Janner & Janner
[2025] FedCFamC2F 297
•20 February 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Janner & Janner [2025] FedCFamC2F 297
File number(s): DGC 1118 of 2024 Judgment of: JUDGE O'SHANNESSY Date of judgment: 20 February 2025 Catchwords: FAMILY LAW – Property – final hearing – whether parties reaches agreement many years prior to issue of proceedings – parties SMSF not divided at separation – non superannuation assets divided at separation – found no agreement as alleged – parties remained joint trustees and joint co-borrowers of mortgage debt secured over assets held for SMSF – just and equitable to make property orders – all assets to be taken into account in determining percentage superannuation payment split order – parties to confer and take advise as to form of percentage superannuation splitting orders. Legislation: Family Law Act 1975 (Cth) ss 75, 79 & 90XT Cases cited: Bevan & Bevan [2013] FamCAFC 116
DW & GT [2005] FamCA 161
Farnham & Farnham [2022] FedCFamC2F 83
Fox v Percy (2003) 214 CLR 118
Hickey and Hickey and the AG for the C’lth of Australia (2003) FLC 93-143
Horrigan & Jennings [2018] FamCAFC 206
Keskin & Keskin and Anor (2019) FLC 93-932
Stanford v Stanford [2012] HCA 52
Woodcock & Woodcock (1997) FLC 92-739
Trask & Westlake [2015] FamCAFC 160
Division: Division 2 Family Law Number of paragraphs: 85 Date of hearing: 19 February 2025 Place: Melbourne Counsel for the Applicant: Mr Kaufmann Solicitor for the Applicant: Guthrie & Associates Counsel for the Respondent: Mr Gray Solicitor for the Respondent: Lawyers by the Bay ORDERS
DGC 1118 of 2024 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS JANNER
Applicant
AND: MR JANNER
Respondent
ORDER MADE BY:
JUDGE O'SHANNESSY
DATE OF ORDER:
20 FEBRUARY 2025
THE COURT ORDERS THAT:
1.The parties each retain all assets and liabilities in their sole names, including any superannuation other than that in the Janner Superannuation Fund (‘the Fund’).
2.The parties, by their lawyers, do all acts and things to:
(a)Confer as to the form of the section 90XT(b) order or orders necessary to give effect to these orders, including the sale of the property known as B Street, Suburb C, in the State of Victoria (‘the Suburb C property’) and minimise, but not avoid, legal taxation obligations; and
(b)Obtain any expert taxation or accounting advice as to the necessary form of the orders; and
(c)On or before 4.00 pm on 13 March 2025, the parties file and serve a joint minute of the order to bring about a superfund payment split and division of the benefit of the Fund between the parties to occur on 30 June 2025, to the following effect:
(i)That there be a percentage superannuation payment split, or splits, from the Husband’s interest in the Fund to the Wife to the effect that the Wife’s superannuation entitlements to be rolled out from the Fund is X per centum in accordance with the following formula:
X% = [(A + $1,383,661) × 53.8%] - $826,461
A
Where:
· ‘A’ is the total value of the parties’ superannuation interests in the Fund, as calculated as at 30 June 2025 after taking into account the net of sales expenses and taxation and proceeds of sale of the Suburb C property; and
· $1,383,661 (being the Wife’s “Keep” of $826,461 plus the Husband’s “Keep” of $557,200) is the total value of the property and superannuation interests of the parties, as found, excluding the assumed value of the Fund; and
· $826,461 is the value of the property and superannuation outside the Fund retained by the Wife (aka the “Wife’s Keep”) as found; and
· That formula can be described as calculating the superannuation percentage split (or splits) to the Wife from the Husband’s interest in the Fund, necessary to give effect to an overall asset and superannuation split (one pool) of 53.8% to the Wife and 46.2% to the Husband, taking into account that the Wife will, separate to her ultimate entitlement in the Fund, retain total assets, superannuation, and liabilities of $826,461 and the Husband will, separate to his ultimate entitlement in the Fund, retain total assets and liabilities of $557,200.
(ii)Thereafter the remainder or balance of the parties’ interests in the Fund be retained in the Fund as the Husband’s entitlements therein or if he elects, in writing, on or before 4.00pm on (date to be inserted) (‘the election date’) that the Fund be wound up and his remaining entitlement rolled out to a complying Fund, then after the superannuation payment split to the Wife, the Fund be wound up accordingly and in the event of the Husband does not elect to wind up the Fund on or before the election date, then he be deemed to have elected to retain his interest in the Fund and to have chosen to retain the remaining benefit of the Fund to the exclusion of the Wife.
(iii)In the event the Husband elects in writing by the election date, to wind up the Fund and roll out his remaining entitlement in the Fund to a complying Fund, then the parties do all things necessary to wind up the Fund and the accounting or other expense of doing so, including taxation expense, be treated and regarded as an expense of the Fund as at 30 June 2025.
3.In the event that there is a dispute as to the form of the orders referred to in 2(c) above, the parties each bring in their form of the order together with short written submissions as to why one or other order should be conferred on or before 4.00 pm on 13 March 2025.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
These are the settled reasons of a judgment delivered orally the day after the hearing concluded. These reasons were delivered orally. These settled reasons have been corrected from the transcript where appropriate to correct grammatical errors, to add citations, passages of authorities and evidence, and to attempt to make the orally delivered reasons easier to read. The substance is unchanged.
Background
In the matter of Janner, I am asked to determine competing property order applications. The applicant wife, Ms Janner (“the Wife”), is 63 years and works part-time in retail assistance. The respondent husband, Mr Janner (“the Husband”), is 59 years and works as a self-employed finance professional. The parties married in 1986 and, over the journey of their relationship, had three children: one born in 1990, the next in 1993, and the next in 1996. Those three adult children now live independently or, at least, are financially independent of the parties. The parties separated, depending on your point of view of what constitutes a separation, either in 2015, when the parties commenced to sleep in separate bedrooms, or in July 2017, or shortly before, when the Husband left the former matrimonial home. On the application of the Husband, the parties were divorced in mid-2023. These proceedings were not issued until 2 April 2024.
The primary dispute or contention between the parties relates to whether their existing interests in the self-managed superannuation fund, known as the Janner Superannuation Fund, and hereinafter referred to as “the Fund”, should be retained in their existing interests, which is approximately 5.5 percent / 94.5 percent in the Husband’s favour, or whether there should be a division of the entitlements of the parties by way of superannuation splitting orders to give effect to all of the parties’ superannuation being divided equally, as sought by the Wife.
That dispute turns, in part, upon the weight to be given to what is alleged to be an agreement between the parties to divide their property in 2017.
The Applicant deposes in her affidavit filed 8 January 2025:
40. Following separation, The Respondent and l sold the former matrimonial home situated at [D Street, Town E]. The Respondent left the family home 3 months prior to settlement.
41. At the time, I was unaware of the breakdown of the sale proceeds from the sale of the [Town E] property at the time it was sold. I cannot recall knowing how much was required to discharge the mortgage. I only knew how just how much I was to receive.
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45. The Respondent separated with me and I found the process emotionally very difficult. The Respondent and I had no real communication. I was essentially delivered the news that I had to find myself a new home via our children and recall being encouraged to look at some suitable properties. I don't recall a specific budget being suggested to me by the Respondent, however I do recall struggling to find a suitable property. I remember viewing the [F Street] property which I thought would suit me well but it was quite expensive.
46. I recall that our adult daughter [Ms G] was acting as the intermediary between us during this time. I told our adult daughter [Ms G] that I would simply just rent until I found a suitable property which would be in my price range. [Ms G] must have communicated this to Respondent, as [Ms G] subsequently told me that the Respondent would allow me access to enough of the sale proceeds of [Town E] property which would enable me to buy [F Street].
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49. The Respondent and I did not speak much after separation, in fact, I did not even know where he lived. There was no discussion or explanation of what our asset position was at that time or where money had been applied, I simply just received what I received which went straight towards the purchase of [F Street] which I remember being made to feel, by the Respondent, like I was greedy.
50. For several months following the sale of the [Town E] property I continued to be in denial of the separation, believing that the Respondent and I would reconcile. I thought the sale of the [Town E] property was the Respondent having a midlife crisis.
51. I always believed that the Respondent and I continued to have the [Suburb C] property together[1] and there was no complete severance of all of the assets the Respondent and I had together. I recall talking to [Ms G], after discovering the Respondent was in a new relationship quite a while after separation, that it was time to sell [Suburb C] however she told me that the Respondent felt it was a good investment and that we should hang onto the land.
52. I did not regard the monies I received from [Town E] has a complete financial payout to the end of our marriage.
…
[1] Held in the Fund
The Respondent deposes in his affidavit filed 22 January 2025:
20. In 2017 prior to the sale of the [Town E] property the Applicant and I agreed on an informal property settlement that was approximately a 50/50% split as follows:
21. To the Applicant:
21.1 Cash / property approximately of $700,000;
21.2 [Super Fund 1] entitlement $9,577.48;
21.3 [Super Fund 2] entitlement $13,956.96;
21.4 SMSF entitlement $20,678; and
21.5 Motor vehicle $1 ,000
21.6 Totalling $745,212.44 (49.87%).
22. To me:
22.1 Proceeds of the sale of the [Town E] property $409,064.40;
22.2 Equity in motor vehicle $4,000;
22.3 [Vehicle] $10,000; and
22.4 SMSF entitlement (less $20,678 being Applicant's entitlement) $325,934
22.5 Totalling $748,998.40 (50.13%).
23. The financial settlement in 2017 is roughly a 50/50% split. We both agreed that we did not need legal advice as we were both happy with the informal property settlement.
24. Unfortunately, the [Town E] family home took many months to sell but this also gave us time to discuss and agree to the division of property. I did not involve the children in any settlement discussions, although the Applicant may have. Our daughter did not act an intermediary.
25.The Applicant and I communicated extensively about the informal property settlement. The Applicant wished to purchase a house, in [Suburb H], unencumbered. We made that happen for her with the Applicant receiving about $700,000 in cash while I received substantially less cash of about $409,000. The $700,000 was applied to her property at [F Street, Suburb H]. We also agreed that the Applicant would retain her super entitlements in the SMSF, [Super Fund 1] and [Super Fund 2] and I would retain my entitlements in the SMSF. We had not turned our mind nor appreciated the mechanism by which the Applicant would receive those funds, other than they would be paid upon her retirement.
…
28. I was happy with the settlement although I was unhappy that I had to take on a mortgage on limited income. I also understood that I had my super fund to rely on when I eventually retired and that would pay out my mortgage on my home. I managed my financial affairs as arising from our informal property settlement and with this understanding in mind.
29. The Applicant and I exchanged text messages agreeing to the division of our assets and superannuation with multiple discussions. On 6 September 2019 the Applicant acknowledged that I had always been fair with her financially.
…
30.We both agreed not to obtain legal advice at the time of separation believing it was not necessary as we were in agreement as to the division of assets and to save spending money which we both did not really have.
31.In addition, the Applicant was content for me to continue to complete her personal Tax Returns until 2022 reinforcing the amicable nature around the settlement. We had spent Christmas 2018 and 2019 together as well.
The applicable law
This being a property dispute, it is necessary that I apply the legislation of the Family Law Act 1975 (Cth) and the authorities assisting with that.
Section 79 Alteration of property interests
(1)In property settlement proceedings, the court may make such order as it considers appropriate:
(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them--altering the interests of the parties to the marriage in the property; or
…
including:
(c)an order for a settlement of property in substitution for any interest in the property; and
(d) an order requiring:
(i) either or both of the parties to the marriage; or
…
to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.
…
(2)The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
By section 79(4)(e), the shopping list of largely prospective factors of section 75(2) (that are the same factors to be considered when considering spousal maintenance), must be had regard to and those provisions are as follows:
Section 75Matters to be taken into consideration in relation to spousal maintenance
(2) The matters to be so taken into account are:
(a) the age and state of health of each of the parties; and
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii)child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
(m)if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
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Section 90XT Splitting order
(1)A court, in accordance with section 90XS, may make the following orders in relation to a superannuation interest (other than an unsplittable interest):
(a)if the interest is not a percentage - only interest--an order to the effect that, whenever a splittable payment becomes payable in respect of the interest:
(i)the non - member spouse is entitled to be paid the amount (if any) calculated in accordance with the regulations; and
(ii)there is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for the order;
(b)an order to the effect that, whenever a splittable payment becomes payable in respect of the interest:
(i)the non - member spouse is entitled to be paid a specified percentage of the splittable payment; and
(ii)there is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for the order;
(c)if the interest is a percentage - only interest--an order to the effect that, whenever a splittable payment becomes payable in respect of the interest:
(i)the non - member spouse is entitled to be paid the amount (if any) calculated in accordance with the regulations by reference to the percentage specified in the order;
(ii)there is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for the order;
(d)such other orders as the court thinks necessary for the enforcement of an order under paragraph (a), (b) or (c).
(2)Before making an order referred to in subsection (1), the court must make a determination under paragraph (a) or (b) as follows:
(a)if the regulations provide for the determination of an amount in relation to the interest, the court must determine the amount in accordance with the regulations;
(b)otherwise, the court must determine the value of the interest by such method as the court considers appropriate.
(2A)The amount determined under paragraph (2)(a) is taken to be the value of the interest.
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There are a number of factual disputes between the parties. The most significant of those disputes is whether or not there was an agreement to divide all of the parties’ assets between them, including superannuation, at the time of or soon after separation, when the former matrimonial home was sold, and the proceeds distributed between the parties. It is the Husband’s case that that distribution of the proceeds of that home was part and parcel of an agreement that the parties would otherwise retain their respective interests in their self-managed superannuation fund.
It is common ground that those interests are roughly in the proportion of 5.8% to the Wife and the balance to the Husband. At the time that fund was set up in 2010, from the parties’ prior employment, different amounts were rolled into that self-managed superannuation fund, and, thereafter, it appears common ground that the parties’ entitlements, as income came in, whether actual or notional, increased the value of the super fund assets in the same proportions. The Husband’s case is that by oral discussions between the parties in the lead up to, or short period before they separated physically – that is, in mid or July 2017 – the discussions resulted in a firm agreement that the proceeds of the former matrimonial home would be divided roughly in the proportions of $700,000 to the Wife and the balance to the Husband, which, it turns out, was about $409,064.40.
In addition, the Husband, he says, was to retain the equity in his motor car, which is common ground of about $4,000, and a vehicle, $10,000, with him to retain the embryonic, or just starting up, practice. The Wife was to retain, according to the Husband, her superannuation that was outside the self-managed fund – being Super Fund 1 in the amount of $9,577.48 and her Super Fund 2 in the amount of $13,956.96 – and her car of about $1,000. On the Husband’s case, that meant the Wife retained $700,000 worth of cash and that modest superannuation of about $24,500, and her car, being a total of in the order of around $724,534. The superannuation dispute is in the circumstances that, after the Husband had ceased to work in his profession of a finance professional and had been unable to obtain other employment, the parties had purchased a business and the land that the business operated from. The land, which for the purpose of these reasons, is known as “the warehouse”, was where the business was conducted.
The business, as far as I can tell, was conducted in the parties’ own names, but the land was purchased in the sole name of the Husband, but on behalf of the Fund: that is, the superannuation fund owned the warehouse. The warehouse was funded in large part, or at least substantial part, by significant borrowings which were joint borrowings of the Husband and Wife. That is, they borrowed in their capacity as trustees and individuals and were co-borrowers and jointly and severally liable for the whole of that borrowing.
The Husband’s case
It is the Husband’s case, and on the figures not seriously disputed, that if there was an agreement as he contends, then taking into account the parties’ member balances in the fund as at the time of the sale of the former matrimonial home and the division of the proceeds as described, that the overall adjustment, treating superannuation as a dollar equivalent to a dollar of non-superannuation assets, meant that the parties came out with pretty close to equal. It is his case, then, in the circumstances of that agreement, that he relied upon that agreement as finalising financial relations between them. It is common ground that the Husband applied a substantial part of the funds that he received from the former matrimonial home to the purchase of a dwelling where he still resides and also where he conducts his practice from.
That dwelling was purchased with a substantial mortgage. The mortgage was in the order of $260,000, and has now been reduced to $214,000. In those circumstances of there being, on the Husband’s case, a clear agreement and reliance on that agreement, he says, by both parties, but particularly by him, it is said that it is not just and equitable to now make orders that would substantially interfere with the parties’ assets and liabilities and, in particular, their interests in the self-managed superannuation fund.
The Wife’s case
The Wife’s case is that at the time of the alleged agreement, she was not in a good place emotionally, that she was alcohol-dependent, or potentially alcohol-dependent, and in addition, suffered from anxiety and depression. It was her case that there were no discussions or negotiations, but she was told that she would receive the sum of $700,000 which she could apply to the purchase of an unencumbered home, and she accepted that, and she did so. It is common ground that the Wife purchased a home, where she still resides, for $658,259.21 including stamp duty and costs, and had a modest amount of cash available to her after payment of the home.
It is the Wife’s case, and she asserts, that at all times, she understood that the parties retained their interest in the self-managed super fund – essentially, the interest in the warehouse property, which was rented to the purchaser of the business, which was sold shortly before the final physical separation (in late 2016) and that she would, one day, be entitled to and receive her interest in that super fund when the property was sold. That is, when the warehouse was sold. She says that she had a reasonable basis for that belief and that it was not just a belief, it was a fact. She understood that she and the Husband had been registered as owners, or at least proprietors, on behalf of the Fund, in equal shares.
The transfer of land document that is in evidence demonstrates that the document was drafted with the Husband and the Wife to be registered as the joint proprietors, but that the Wife’s name was deleted, and it was registered in the Husband’s name alone. The Wife says she was not aware of this.
Significantly, from my point of view, it is common ground that at the time of the purchase of that property, the parties became the joint and several borrowers of the substantial mortgage funds necessary to purchase that property, in the sum of $270,000. In the circumstances where the Wife remained a joint trustee of the Fund and remained a co-borrower and liable personally for the debt from the mortgagee (in regard to the warehouse property), I am satisfied that the Wife’s belief was reasonable.
Comparable earning capacities?
The other factual dispute, apart from the nature of any agreement and the extent of it (i.e., whether it intended to resolve superannuation interests finally, as well as assets outside the fund) is the parties’ comparable earning capacities and health. The Wife’s case is the Husband has a significantly greater earning capacity, notwithstanding that his actual taxable income is, by community standards, modest and, at times, only about the same as hers. The Husband’s affidavit suggests that the Wife could, if she wished to, undertake further employment rather than the part-time employment as a retail worker. However, that issue that the Wife would be able to work further was not pursued in cross-examination or submissions following my being able to observe the Wife in the witness box.
The Wife presents as a hardworking, decent person, but naïve about business arrangements. That is understandable and not surprising when she is not university educated, but the Husband is a practising and qualified finance professional. It is unsurprising she would not immerse herself in, and grapple, with the intricacies of financial planning and the structure of the parties’ business, their superannuation fund and so on. Further, the Wife says, and I accept, that at the time of separation, she understood for some time (at least a number of months) that there was a prospect of reconciliation, and I infer she hoped for that.
The Wife relies on the evidence of her GP in the form of an affidavit filed on 11 October 2024 which annexes a letter stating the following:
This letter is to state that [Ms Janner] aged 63 yrs has underlying anxiety and depression. Her symptoms have affected her activities of daily living - .e.g She had a panic attack at work yesterday and had to be brought to the Emergency Department as her blood pressure was elevated. She is also visibly anxious and teary during her clinical assessment today.
She has trialled antidepressant sin [sic] the past, but we have yet to find one that has suited her. Further clinical reviews are advi[s]ed to work through this together, and she is going to see a psychologist through work.
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In addition, the Wife gave evidence that she has recently experienced three panic attacks at work and a further one at home, and that her employment is subject to review by her supervisor due to her making mistakes in the stress of that employment.
The Husband was cross-examined about the events of how working from home without employees is able to turn gross income of in the order of $90,000 into a taxable income of in the order of $46,000. I am not satisfied that there is anything improper or irregular about the Husband’s business expenses. They appear to be a large proportion of his income, except that I am satisfied many of them would be the same, such as subscriptions, compulsory attendance at continuing education and so on, whether the Husband’s income was as it is or two or three times more.
It is also clear that the Husband, effectively, like the Wife, works part-time and, at his age, sensibly, devotes a significant part of his time to caring for grandchildren. He is perfectly entitled to do so. However, ultimately, when push comes to shove, I am satisfied of two things in regard to that dispute about earning capacity:
(1)the Husband has a greater earning capacity, but not significantly greater in dollar terms, but as a proportion significantly greater than the Wife’s earning capacity; and
(2)further, I am satisfied that there is a security in the Husband’s self-employment, having spent the last six or seven years building up that practice of his self-employment and income.
There is a fragility to the Wife’s employment in the circumstances of her health, which include her panic attacks and her current review. The Wife’s health is such that she has, in the past and the not-too-distant past, had a dependency upon alcohol. She now takes medication. The effect of that medication means it is difficult, if not impossible, for her to consume alcohol at all, but part of her health circumstance is that it is necessary to consume that medication.
Credit of the parties
In Fox v Percy (2003) 214 CLR 118 (‘Fox v Percy’), at first instance, the rider of a horse was found to be a more reliable witness than the driver of the Kombi Van that had collided with oncoming horses and riders. The issue was upon which side of the road the collision occurred. The High Court had to interfere with the first instance decision where it had been incorrectly determined, by reason of the apparent reliability of the witnesses, that the collision occurred on the horses’ side of the road. The High Court found the first instance decision was erroneous because the proven skid marks of the Kombi van demonstrated incontrovertibly that at all material times the Kombi van had been on its correct side of the road.
When discussing the drawing of conclusions about truthfulness and reliability solely or mainly from the appearance of the witnesses, the plurality of Fox & Percy observed:
[31]…in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events…
(Citations omitted)
I have endeavoured to rely on objectively established facts and the apparent logic of events in this case as well as the evidence and demeanour in the witness box of the parties.
I was satisfied that the Wife gave a frank and honest account of all circumstances as she understood them. That she simply had no recollection of certain events, or simply did not have an in-depth or even beyond-surface understanding of commercial transactions and the like, does not detract from the genuineness of her evidence. I found the Husband to be a genuine, open and frank witness, save as to one aspect. That aspect related to the proceeds of the sale of the business.
The proceeds of sale of the business
It is common ground that in late 2016, not long before separation, the parties had sold the business that they had previously operated to a third party but retained the warehouse from where it was operated. The net effect of that sale was that after payment of expenses relating to the business, there was little left. It was the Wife’s contention that up to $70,000 had been retained by the Husband and not accounted in these proceedings, or at the time in 2017, between them. It was the Wife’s case that of the said to be $90,000 received from the sale of the business, without considering the sale of the stock at value, she had only received $20,000. That, she said, left $70,000 swinging.
However, by a careful examination in cross-examination of the application of those proceeds and because of the commonsense circumstance that all of the payment of the stock at value proceeds (received when the purchaser took possession of the business in late 2016) were paid to one bank account, it is clear the proceeds were $47,464.82 as evident in exhibit ‘H2’. Those proceeds from the stock and from the sale of the business were deposited to a joint or business account.
It is readily apparent, from even a cursory examination of that account, that the proceeds were applied to ordinary leftover business expenses and the expenses of the parties. As discussed with counsel during the hearing, I have no reason to find that the purchase contract provided other than the usual or ubiquitous form that, upon the purchase of a business, the vendor retains responsibility for debtors and creditors. Hence, the Husband’s account of the payment, the collection of debtors and the payment of creditors from the proceeds is entirely plausible and I accept it. However, from the proceeds of the sale of the business and/or the stock, there are two transactions that were not accounted for. That is, a transfer of $15,000 and a further transfer of $5,000.
In the Husband’s trial affidavit, responding to where the Wife had dealt with the $15,000 transaction, the Husband had deposed that he thought it “might” have been a loan to one of the children, but he could not really remember because it was a long time ago. When, in cross-examination, exhibit ‘H1’ was put to him – which was a $20,000 credit to his personal account on 12 June 2018 – the Husband readily told the Court that that was the return of the transaction of 15,000 described as gift plus another $5,000 transaction and that that had not been a gift at all but had been a loan. Save as to that minor detail, I was satisfied that the Husband was genuinely frank and honest in all of his dealings and evidence.
The impugned agreement
Before I turn to the issue of the resolution of the factual dispute about the agreement, I will turn to an analysis of the authorities of why an informal oral agreement between the parties has attracted such attention in the proceedings. It is common ground that such an agreement, if I am satisfied it existed, does not oust the jurisdiction of the Court in the circumstances where notwithstanding the separation roughly six years prior to the issue of proceedings and seven years prior to hearing, the Wife has brought the proceedings within the timeframes contemplated by the Act, given the date of the divorce. This is not an application out of time.
Relevant authorities
Counsel for both parties sought to rely on relevant authorities dealing with this issue. Counsel took me to those relevant passages, and it is necessary that I refer to them in this judgment.
Prior to the hearing, the solicitors for the Applicant prepared a list of authorities that they sought to rely upon. This was very helpful and I am grateful to the practitioners in their diligent preparation. Those authorities included:
(1)Stanford v Stanford [2012] HCA 52;
(2)Landry & Talford [2020] FCCA 3442;
(3)DW & GT (also referred to as Woodland & Todd) [2005] FamCA 161;
(4)Konitza & Konitza [2009] FamCAFC 71;
(5)Fields & Smith (2015) FLC 93-638;
(6)Mallet v Mallet [1984] HCA 21; and
(7)Ferraro & Ferraro (1993) FLC 92-335
I was specifically asked, as requested by counsel for the Husband, to take into the account of the decision of Bevan & Bevan [2013] FamCAFC 116 at [108] – [111].
108.Although we accept that the court’s jurisdiction can be extinguished only when its power is exhausted by the making of final orders or by a binding financial agreement, the proper exercise of the jurisdiction can include the dismissal of an application because it is not just and equitable to make any order. Furthermore, a decision to dismiss can be made for reasons not referable to s 79(4) since, as the High Court said in Stanford at [40] (original emphasis):
To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
…
111.It is true the trial Judge later accepted that the husband’s representations should have an indirect bearing upon his entitlement – because he considered them when deciding what assets should be taken into account. Nevertheless, we consider his Honour erred in saying there was “no requirement to consider what representations the parties may have made during the marriage or subsequent to separation”. In our view, such representations clearly could be relevant in determining whether it was just and equitable to make an order adjusting existing interests.
(Emphasis added)
Counsel for the Husband also sought to rely upon the observations in DW & GT at [39], while also referring to [35], noting that [35] recites the observations of Woodcock & Woodcock.[2]
35.Counsel for the husband relied upon Woodcock v Woodcock (1997) FLC 92-739 in which the Full Court considered the application of the doctrine of estoppel to property settlement and spousal maintenance applications. The Full Court held that the doctrine of estoppel does not operate to prevent the Court from exercising its jurisdiction to make an order under ss 74, 79 and 85A. Following a detailed review of earlier authorities, their Honours reached the following conclusion (at p 83,968):
“In our view the cases referred to above clearly indicate that the Court’s jurisdiction to grant relief under s 74 or 79 can only be ousted by court order or by an agreement approved pursuant to the provisions of s 87. It may be that the ability of a court to take into account the terms of an unapproved agreement creates in the words of Hoffman LJ ‘the worst of both worlds’ as it will be impossible to predict from case to case, exactly what weight ought to be given to the agreement (Schokker v Edwards: agreement followed; c/f Klesnik: agreement given little weight). However it is the dominant and unwavering thread of all of the cases that the parties cannot by their conduct or agreement oust the jurisdiction of the Court”.
39.Where parties enter into an agreement concerning property, other than an agreement approved under the provisions of the Act or embodied in consent orders, and one party subsequently commences proceedings under s 79 for an alteration of property interests, the Court must determine the application on its merits having regard to the factors as set out in s 79(4) as they exist at the time of the hearing of the application under s 79 and according to the law in force at that time and not, as to either of those two matters, at the time the agreement was made. There is no threshold test, before embarking upon the s 79 exercise, to determine whether the earlier agreement was just and equitable at the time it was made according to the facts as they then existed and the law then in force. The earlier agreement should be considered (as an indication of what the parties may have regarded as just and equitable at the time), but its provisions only given effect if they coincide with an order which is just and equitable according to s 79 at the time of the hearing.
[2] (1997) FLC 92-739
In addition, I will refer to, as requested, the decision of Farnham & Farnham [2022] FedCFamC2F 83 (‘Farnham’) from a decision of sister Judge Turnbull where she observed.
89The Wife argues that, at least in the alternative to an order that she retain the B Street, Town C property, I should make an order in accordance with the Heads of Agreement.
90An agreement which purports to alter parties’ property interests, unless formalised by court order or through s 90G of the Act, is vulnerable. This is true even of uncontentious agreements. The Full Court in Woodcock & Woodcock [1997] FamCA 5 concluded:
“[i]t may be that the ability of a court to take into account the terms of an unapproved agreement creates in the words of Hoffman LJ “the worst of both worlds” as it would be impossible to predict from case to case, exactly what weight ought to be given to the agreement. … However it is the dominant and unwavering thread of all the cases that the parties cannot by their conduct or agreement oust the jurisdiction of the court.”
…
92In the context of prior agreements between parties, the Court in DW & GT also said the following about identifying property interests:
“However, and perhaps more significantly, it would generally be necessary for the Court to acquaint itself with changes in the composition and value of the property pool, so that post-separation contributions can be assessed.”
(Footnotes omitted)
Stanford
In the High Court of Australia case of Stanford v Stanford [2012] HCA 52; (2012) FLC 93-518(‘Stanford’) the majority stated some fundamental propositions about section 79 proceedings. In Stanford the essential issue was whether it was just and equitable to make any property order at all, in circumstances where the consortium vitae or marriage relationship had not broken down by way of a separation and the Wife’s needs were otherwise provided for. The parties had become physically separated due to the ill health of one of them with that party being in residential care and the other remaining in the matrimonial home. The proceedings for the party in ill health were conducted by a case guardian who was also the beneficiary under the will of that party.
The Family Court of Western Australia had made an order for a property settlement that would have necessitated the sale of the former matrimonial home where the husband continued to reside. For 37 years prior to the wife moving to a nursing home, the parties had made their matrimonial home in that house registered in the husband's name. The wife’s expenses in accommodation were being met and she had the benefit of a sum set aside in the event she needed anything further. It was the second marriage for both of the parties.
The High Court varied the order of the Full Court and found that in the circumstances it was not just and equitable that a property settlement or property alteration order be made at all. This was so despite 37 years of marriage and contribution by the wife. Hence section 79(4) contribution, even 37 years of it, was not to be conflated with the section 79(2) “just and equitable” requirement but should be considered separately.
Apart from the general observations about section 79 the High Court observed that it should not be concluded that the making of an order is just and equitable only because of, or by reference to, the matters in section 79 without a separate consideration of section 79(2).
The majority observed at [41]:
[41]...The fundamental propositions that have been identified require a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interest during the continuance of the marriage.
The majority continued at [42]:
[42]In many cases where an application is made for property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice by made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and the wife. No less importantly, the express implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship... And the assumption that any adjustment of those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4) (and/or section 90SM(3)).
In Stanford, the High Court did not go on to comment upon how section 79(4) should be applied where it was just and equitable that a property alteration or settlement order be made. Stanford was not concerned with the nuts and bolts of how section 79(4) was to be applied in the ordinary run of cases, to the extent there is such a thing.
I will also refer to the decision of Horrigan & Jennings [2018] FamCAFC 206 (‘Horrigan & Jennings’) and, in particular, paragraph 26, that applies or effectively makes clear that the observations in Bevan apply in full force effect.
26.In Bevan & Bevan (2013) FLC 93-545 (“Bevan”) the plurality (Bryant CJ and Thackray J) said at 87,237:
108.Although we accept that the court’s jurisdiction can be extinguished only when its power is exhausted by the making of final orders or by a binding financial agreement, the proper exercise of the jurisdiction can include the dismissal of an application because it is not just and equitable to make any order. Furthermore, a decision to dismiss can be made for reasons not referable to s 79(4) since, as the High Court said in Stanford at [40] (original emphasis):
To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down in the Act.
The long and short of those authorities is that section 79(2) means I can only make property orders if those property orders are just and equitable, and that there is a principled reason to interfere with the parties’ existing property and rights.
In addition to those considerations, each party here contends that it is just and equitable that I make some section 79(4) of the Act property alteration orders.[3]
[3] The Husband merely sought orders that gave him the parties existing interest
Property at separation
I now turn to the issue of what was the parties’ property at the time they separated or physically separated[4] that the Husband asserted and I accept.
[4] From the Husband’s affidavit of 22 January 2025.
20.In 2017 prior to the sale of the [Town E] property the Applicant and I agreed on an informal property settlement that was approximately a 50/50% split as follows:
21. To the Applicant:
21.1 Cash / property approximately of $700,000 ;
21.2 [Super Fund 1] entitlement $9,577.48;
21.3 [Super Fund 2] entitlement $13,956.96 ;
21.4 SMSF entitlement $20,678 ; and
21.5 Motor vehicle $1,000
21.6 Totalling $745,212.44 (49.87%).
22. To me:
22.1 Proceeds of the sale of the [Town E] property $409,064.40 ;
22.2 Equity in motor vehicle $4,000 ;
22.3 [Vehicle] $10,000; and
22.4 SMSF entitlement (less $20,678 being Applicant's entitlement) $325,934
22.5 Totalling $748,998.40 (50.13%).
As can be seen, apart from whether the self-managed super fund interest should be included, there is no disagreement between the parties as to the properties they held at the time of the distribution of the proceeds of sale of the former matrimonial home. The conclusions that I reach are that, at that time, the effect was that the Husband applied, or had available to him, assets of $443,064 separate or apart from the Fund. I include, at that point, the returned gift of $20,000, discussed earlier.
On the Wife’s side, I am satisfied that she did receive $700,000 in funds. There was some minor dispute as to whether the sum of $1,740.79 was received. I am satisfied that the Wife does not remember receiving it, because that amount is the exact amount that would go to make up a total of $700,000 received, and I accept the Husband’s evidence in that regard. Hence, at that point, in addition to that, the Wife retained her Super Fund 1 and Super Fund 2 that is included in the $724,753 figure of the Super Fund 1 of $9,577.48 and the Super Fund 2 of $13,956.96, plus her car of $1,000.
The assets in the self-managed super fund were the warehouse – subject to the mortgage and subject to the ordinary liabilities coming and going of rates, insurance, etcetera, relating to the warehouse – and the balance often the rent was applied to the mortgage and expenses. It is significant that, thereafter, the Husband lived in the dwelling that he purchased with the assistance of the mortgage referred to above, and the Wife lived in the dwelling that she purchased. Neither otherwise embarked on any significant financial aspect. The Wife continued to work part-time in retail and the Husband developed his practice from scratch. Each party took overseas holidays, and I am satisfied, of not an extravagant or unreasonable proportion.
I am satisfied that, thereafter, after each party worked relatively hard, or at least hard enough to support themselves, and lived modestly. There can be no suggestion that either party has dissipated or wasted or been negligent with funds. Hence, it can be seen that the non-superannuation assets that the Wife received, at that time, were significantly greater than the Husband’s. That is, the Wife received:
•Cash / property approximately of $700,000; and
•Motor vehicle $1,000
•Totalling $701,000
And the Husband (apart from his interest in the Fund) received or retained:
•Proceeds of sale of the [Town E] property $409,064.40;
•Equity in motor vehicle $4,000;
•[Vehicle] $10,000; and
•Gift/loan of $20,000
•Totalling $443,064.40
Thus, of the overall non-superannuation pool of $1,144,064.40, the Wife received approximately 61.3% and the Husband received approximately 38.7%. That is a disparity of 22.6% between them.
The evidence of what the agreement was and how it comes about, as asserted by the Husband, is devoid of what would usually be referred to as particulars. That is, the acts, facts, circumstances and things, including conversations, offers and acceptances that would constitute an agreement. Nonetheless, the underlying transactions are clear. The jointly owned matrimonial home was sold, and the proceeds divided as I have described. That is, $409,064 to the Husband and $700,000 to the Wife. The Wife retained the non-fund superannuation referred to earlier. The Husband retained the benefit of the gift/loan of $20,000 referred to earlier, a car of $4,000 and a vehicle of $10,000. Hence, he retained non-superannuation assets of about $443,000 and the Wife retained modest (non-Fund) superannuation and the payment from equity in the home of about $724,000.
Post-separation contributions
Following separation, the parties did not embark on significant financial aspects and, I am satisfied, conserved the assets that they had. The Husband undertook modest renovations or improvements to the dwelling that he purchased and serviced the substantial mortgage as he went along, and serviced that, by and large, from his income. In addition, the Husband contributed, over a number of years, a total of $11,000 from his income to the superannuation fund. In addition, the Husband undertook the taxation returns of the Wife until 2022, of himself and, I am satisfied, undertook the trouble and worry of collecting the rent or ensuring that it was paid in regard to the warehouse, paying the bills, filing the appropriate annual returns, and ensuring that the self-managed superannuation fund was compliant with all legal obligations.
I note that both of the parties broadly accepted that they should be regarded as having made a roughly equal contribution to all of their assets as at the time of separation, including the self-managed super. Post-separation, the Husband’s activities of working to pay for the mortgage, making those direct contributions of $11,000 and attending to the organisation of the self-managed super fund, in my view, mean that he should be regarded as making, to a modest degree, over the entire length of this relationship and the post-separation contributions, a more than slightly greater contribution.
Conclusion as to “agreement” controversy
I now turn to the factual dispute, again, of the agreement. I accept the Wife’s evidence that she understood she received $700,000 and that she made no further inquiries and that she regarded the Husband as having treated her fairly. Her lack of sophistication about financial matters meant that she did not inquire or even ponder further. It is undisputed she did not take legal advice. I am not satisfied that the Wife was ever informed of or understood the parameters of the parties’ financial circumstances as they were at the time of separation. I am also satisfied she was not interested. She was content with what she was told by one of the children that what the Husband proposed would always be fair. She accepted that. She accepted the $700,000 and went on with her life.
However, she understood she retained an interest in self-managed superannuation fund and expected that that would come to pass in her hands one day. I do not accept the Husband’s conclusion from the events, as he recollects them, that there was either an express oral agreement, or one to be implied, that all of the assets, including the self-managed superannuation Fund, were divided between them. The effect of that would be that the superannuation fund, as it was, would have been roughly 5 – 6% to the Wife and the balance to the Husband.
I am satisfied that the self-managed super fund is broadly as contended for by the Husband:
| Name of Fund | Type of Interest | Member | Applicant’s Value | Respondent’s Value |
| The Janner Superannuation Fund – Property: B Street, Suburb C | SMSF | Mr Janner & Ms Janner | $975,000[5] | $975,000 (- $11,000 mor-tgage and liabilities of $46,970.35 as at 30 June 2024 |
| The Janner Superannuation Fund – NAB #...39 | SMSF | Mr Janner & Ms Janner | $64,421.31 | $64,421.31 |
| Superannuation subtotal | $1,039,421 | $971,451 |
[5] An agreed value
Hence, overall, the superannuation fund can be regarded as about $6,000 positive in addition to the value of the warehouse, or something in the order of $981,000.
The hearing had originally taken one day, having been stood down, initially, for about 40 minutes to enable the parties to attempt to resolve the matter, and then resumed at 10.45 am. The matter then resumed at 2 pm and concluded a little after 5 pm. I remain, as I expressed, grateful to counsel for the efficient manner in which they conducted the case. All valid points were robustly put in cross-examination and submission. Further, I am grateful to the respective solicitors on both sides for the high-quality, efficient and clear account of a very long relationship with many financial transactions in the parties’ affidavit material. As discussed, I am not satisfied that it is appropriate to take into account the modest post-separation credit card as personal loan liabilities that are in dispute, given the asset pool is otherwise almost agreed and neither party should be responsible for day to day debt of the other after separation.
I could take into account outstanding rates on a property that are of modest dimension on a property that has been in the possession of the party for many years, and modest personal loans or credit card liabilities, both of which have arisen entirely separately, but I am not satisfied that it is appropriate in the circumstances to do so.
Why is it just and equitable?
I will now turn to why it is just and equitable to make an order at all. For this point, it is necessary to recite the orders sought by in the Husband’s application. The Husband seeks a very small change in the parties’ current circumstances, and that is that the Wife should no longer be a trustee of the self-managed super fund, but that her entitlement would remain therein to be rolled out or delivered to her when she satisfies a condition of release, which would include retirement.
I am satisfied that it is just and equitable to make an order pursuant to section 79 of the Act because of the following circumstances. I am satisfied that there was an agreement, or an acquiescence, into how the proceeds of sale of the former matrimonial home would be divided. And I am satisfied that there was not an agreement as to how the self-managed superannuation fund would be divided. That is one reason. The next circumstance relevant to why it is just and equitable to make section 79 orders is that the self-managed superannuation fund is a major asset of the parties. Their respective entitlements together, after capital gains tax, will be in the order of something in the order of $900,000, a bit more or a bit less. That is less than their respective or combined interests in real estate, but it is still a very substantial asset, and it is an asset that they have contributed to over many years.
Further, the circumstance that the parties have both remained trustees of that fund, albeit with the Wife leaving the responsibility of the actual administration to the Husband. They have continued to be trustees of that fund since 2010 and remain so to this day. Further, I am satisfied that post-separation, both parties have continued to contribute to that fund in the sense that the Wife has left in, and not taken out, any entitlement she would have had, as has the Husband. Further, and most significantly, both of them remained co-borrowers for the mortgage debt secured over the warehouse house property and remain so to this day.
The circumstances include the long relationship and the parties having jointly contributed to the Fund over many years and remaining equal and joint trustees. The circumstances include that the Wife proceeded on the basis that she had an equal entitlement in the fund, and she proceeded not unreasonably, and on the basis that that fund remains available to them notwithstanding it was effectively controlled by the Husband.
All of those circumstances combine to satisfy me that it is just and equitable to make a property order and an order about the Fund.
A further aspect I take into account is both parties actually seek section 79 orders: on the Husband’s case, merely to have the Wife renounce her trusteeship; and on the Wife’s case, effectively, the sale of the major asset of the fund. The likely division or payment split of the proceeds is a further reason that I take into account.
An aspect of this case is that both parties seek that I do not interfere with or change their entitlements in their non-self-managed super fund assets. Neither party seeks, in the event that I find it is just and equitable to make an order, that I adopt a formula approach that would give an overall rise and fall depending upon the ultimate value achieved by the warehouse. That means, if I follow that, that there is some degree of imprecision or capacity for the overall adjustment not to be precisely as I have determined in the circumstances where the self-managed super fund value in precise terms will not be exactly known. Nonetheless, I am satisfied that it is in the interest of justice that I make orders to deal with the parties’ assets on the basis that the value of the self-managed super fund will be around about $900,000 (or so), but less any costs for taxation advice and administration involved in winding it up, but taking into account all of their assets including the disparity (in the Wife’s favour) of how the non-Fund assets are now held.
The preferred approach
In Keskin & Keskin and Anor (2019) FLC 93-932 (‘Keskin’) the Full Court, Strickland, Kent & Austin JJ, at [44] approved what was the age old and pre-Stanford “preferred approach” as to the how the nuts and bolts of section 79(4) (and therefore its de facto counterpart at section 90SM(4)) fitted together as set out in Hickey and Hickey and the AG for the C’lth of Australia (2003) FLC 93-143 (‘Hickey’) at [39]. Hickey set out the preferred approach as follows:
[39] The case law reveals that there is a preferred approach to the determination of an application pursuant to the provisions of section 79. That approach involves four interrelated steps. Firstly, the court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of hearing. Secondly the court should identify and assess the contributions of the parties within the meaning of section 79(4)(a), (b) & (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly the court should identify and assess the relevant matters referred to in section 79(4) (d), (e), (f) & (g) (“the other factors”) including, because of section 79(4), the matters referred to in section 75(2) so far as they are relevant and determine the adjustment study (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case.
(Citations omitted and emphasis added)
In case it is suggested that there may be a conflict between the High Court’s rejection of “entitlement” to a section 79 or section 90SM order by mere separation and/or section 79(4) or section 90SM(4) contribution on the one hand, and the use of the word “entitlements” in the Hickey passage cited above on the other. I regard the use of “entitlement” in the above passage as intended to be synonymous with “assessment”. I will have regard to what I find to be the contribution-based assessment rather than entitlement.
The preferred approach assists me in making a principled and orderly determination of the parties’ property dispute.
APPLICATION OF THE PREFERRED APPROACH
Step one: identify the property and liabilities
Turning then to stage 1 of the asset pool. The asset pool, then, is the self-managed super fund that will be about $900,000 or, to be precise or attempt to obtain better precision, $924,000, and on that assumption, I will proceed. That does not take into account likely tax from the profits of sale of the warehouse. The Wife’s non-superannuation assets, which I will adopt from the Husband’s outline of case, means that she would now have non-superannuation assets of $781,600, other superannuation assets of about $44,861, or total assets including a small amount of non-fund superannuation of $826,461 (not including the current entitlement in the Fund).
The husband, on the other hand, will have $557,200 in assets. Together with the approximate value of the super fund of $924,000, that gives me total assets of about $2,307,661, which I will use as the likely approximate value of the total pool. What it turns out to be will depend on the warehouse and winding up expenses including tax.
Step two: section 79(4)(a), (b), (c) contributions
Turning then to the second contribution stage of the Keskin analysis, I am satisfied that the parties should be regarded as roughly contributing equally up to the date of separation, and that is notwithstanding the Wife’s alcohol dependency for at least a substantial part of that relationship. That was broadly common ground between the parties. The dispute as to contribution is whether post-separation it should be regarded as equal.
For the reasons that I have set out above, I am satisfied that the Husband should be regarded as contributing more substantially to the overall asset pool, as discussed above, in the order of about 6% difference between the parties. That is, the overall contribution position, including the self-managed super Fund, I am satisfied should be in the proportions of 47% to the Wife and 53% to the Husband. That is, overall, the Husband would be regarded as contributing about $138,459[6] more than the Wife.
[6] That is 6% more than the Wife.
Step three: section 75(2) factors
I will now turn to stage 3 of the Keskin analysis, which is section 75(2) factors. I refer to the legislation in my findings described above. I am satisfied that there should be a section 75(2) adjustment. I am satisfied because of the uncertainty of the Wife’s employment, her significant health issues, and the Husband’s greater earning capacity, that there should be an adjustment in the order of 6.8%. The section 75(2) factor adjustment should be 6.8% in the Wife’s favour.
The effect overall then would be that the assets would be divided on a one-table basis given the parties’ ages, notwithstanding they continue in employment and will do so for some years, in the proportions of 46.2% to the Husband and 53.8% to the Wife. The net effect of that is that the Wife would, including her non-superannuation, and if the fund achieves $924,000 or thereabouts, end up with a figure in the order of $415,000 of the superannuation, that is, about 45% of the likely end result of the self-managed super fund.
Step four: just and equitable conclusion
I now turn to stage 4. To the extent that the self-managed super fund achieves more or less than the projected roughly, or approximate, $900,000 to $924,000 figure, the parties will bear that in the proportions of 53.8% per cent to the Wife, and 46.2% per cent to the Husband. The difference between the parties of a 6.8% adjustment on the section 75(2) step, gives rise to an overall 7.6% adjustment to the pool on those assumptions. It may be a little more or a little less, depending on what the end result of the superannuation Fund result is.
That will, overall, give a disparity of assets, superannuation and non-superannuation in the Wife’s favour, overall, of about $175,000. It may be a little more or a little less, depending on the result of the proceeds of the superannuation fund.
CONCLUSION
Hence, in these circumstances, I am satisfied that there should be orders the party should retain the assets that they otherwise have, and that there should be payment split orders pursuant to section 90XT(1)(b) such that the superannuation payment split or splits, however that is to be done, should be to the effect that the Husband will retain about 55% of the superannuation fund and the Wife 45% assuming the Fund ends up as contemplated by the parties, but divided overall with all assets in the proportions of 53.8% to the Wife and 46.2% to the Husband
As discussed with the parties, I am not comfortable that the order as drafted for the superannuation split would be able to properly give effect to my determination and reasons and will provide them the opportunity to turn their minds to the appropriate superannuation split orders after taking taxation advice.[7]
[7] These orders are an adaption of the formula, also known as the “rise and fall” formula in Trask & Westlake [2015] FamCAFC 160
I certify that the preceding eighty-five (85) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of Judge O'Shannessy. Associate:
Dated: 7 March 2025
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