Jasper and Jasper
[2009] FMCAfam 250
•6 February 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| JASPER & JASPER | [2009] FMCAfam 250 |
| FAMILY LAW – Property settlement – relatively long marriage – modest asset pool – superannuation splitting order – disparities in earning capacity – assessment of s.75(2) factors. |
| Family Law Act 1975 (Cth) s.75(2) |
| C & C [1998] FamCA 143 C & C (2005) FLC 93-220 Doherty & Doherty (2006) FLC 93-256 M & M (2006) 37 Fam LR 150 NHC v RCH [2004] FamCA 633 The Marriage of Hickey (2003) FLC 93-143 Townsend & Townsend (1995) FLC 92-569 |
| Applicant: | MR JASPER |
| Respondent: | MS JASPER |
| File Number: | PAC 309 of 2008 |
| Judgment of: | Walker FM |
| Hearing date: | 20 November 2008 |
| Date of Last Submission: | 20 November 2008 |
| Delivered at: | Sydney |
| Delivered on: | 6 February 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Thistleton |
| Solicitors for the Applicant: | Benjamin & Robinson Solicitors |
| Counsel for the Respondent: | Mr Campton |
| Solicitors for the Respondent: | H.C. Stathis & Co Solicitors |
THE COURT ORDERS THAT:
(a)On or before 4.00pm on a date four calendar months from the date of these orders, the wife is to pay the husband by way of order for settlement for property, pursuant to section 79 of the Family Law Act1975 the sum of $52,700.00 (the principal sum). Interest will accrue on the said amount at the rate prescribed by the Family Law Rules (the interest).
(i)Upon the wife’s compliance with Order 1(a), the husband shall do all such acts and things and sign all documents necessary to transfer to the wife the whole of his right, title and interest in the property situated at and known as Property K, in the state of New South Wales (the Property K property).
(ii)In default of the wife paying the principal sum by the due date the parties shall do all necessary acts and things and sign all necessary documents to cause the Property K property to be sold at a price to be agreed between the parties and failing agreement at a price to be determined by the President of the Real Estate Institute of New South Wales or his or her nominee and to disperse the proceeds of the said sale in the following manner and priority:
· Payment of the outstanding mortgage.
· Payment of agent’s commission and advertising expenses and legal costs and disbursements of the sale.
· Payment of costs incurred, if any, in relation to determination of value and selling price by the President of the Real Estate Institute of New South Wales.
· Adjustment of municipal and or water rates including arrears (if any).
· The principal sum payable to the husband plus the interest payable to the husband.
· The balance to the wife.
(a)The wife is to do all necessary acts and things to cause the property situated at and known as Property W in the state of New South Wales (the Property W property) to be sold for the best price reasonably available and to disperse the proceeds of sale as follows:
· Payment of agent’s commission and advertising expenses and legal costs and disbursements of the sale.
· Adjustment of municipal and or water rates including any arrears (if any).
(b)Simultaneously with the sale of the Property W property, the wife is to cause any shortfall in the mortgage to be discharged.
(a)That pursuant to section 90MT(1)(a) of the Family Law Act whenever a splittable payment is payable in respect of the superannuation interest of Ms Jasper in the IOOF Superannuation Fund, Mr Jasper is entitled to be paid an amount in accordance with the Part 6 of the Family Law (Superannuation) Regulations 2001 using a base amount in the sum of $40,000.00 and that there be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for this order.
(b)The Trustee shall have liberty to re-list this matter by arrangement with my associate, no later than 14 days after the date of service of these orders on the Trustee, if the Trustee wishes to be heard in relation to order 3(a).
(c)Order 3(a) is to bind the Trustee of the Fund and these orders take effect from the operative time, being 21 days after the date of service of these orders on the Trustee.
That within 14 days of the date of these orders the husband do all such acts and things and sign all documents necessary to remove his name from the Australian Scholarship Group and transfer membership in that fund to the wife.
That within 14 days of the date of these orders the husband do all acts and things and sign all documents necessary to transfer to the wife the Holden Commodore motor vehicle.
Subject to the orders set out above, the husband and wife shall each respectively own and retain all interest and entitlement to:
All personal property, chattels including furniture and motor vehicles now in his/her respective possession or control.
All interest in banks, building societies or credit union accounts and interests in superannuation funds standing in his/her name respectively.
In the event that either party shall fail to sign any document necessary to give effect to these orders then a Registrar or Deputy Registrar of the Federal Magistrates Court of Australia at Sydney, pursuant to section 106A of the Family Law Act1975 shall have the power to act and execute all documents necessary in the name of the person who has refused or neglected to sign such documents.
IT IS NOTED that publication of this judgment under the pseudonym Jasper & Jasper is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAC 309 of 2008
| MR JASPER |
Applicant
And
| MS JASPER |
Respondent
REASONS FOR JUDGMENT
Introduction
These are property proceedings under the Family Law Act 1975.
The wife in a document titled “Minute of orders as sought by the Wife” filed in Court on 20 November 2008 seeks orders for a sale of a property at Property W, and that simultaneously with this sale, she meet any shortfall in the mortgage on the property and pay the husband the sum of $30,000.00. Upon this taking place, the husband is to transfer to the wife his interest in a property at Property K, the former matrimonial home. The wife seeks orders that the husband transfer to her a Holden Commodore motor vehicle and his membership in the Australian Scholarship Group.
The husband in his Initiating Application filed on 22 January 2008 seeks orders for the sale of each of the properties at Property W and Property K with the net proceeds of sale to be divided 50 percent to the wife and 50 percent to himself. He also seeks a splitting order in relation to the wife’s superannuation interest in the [O] Superannuation Fund, division of furniture as agreed and retention of motor vehicles and other property currently in the possession and held in the respective name of each party.
Background
The husband was born in 1963 and is aged 45. The wife was born in 1964 and is aged 44. The parties commenced cohabitation in 1989 and married in September 1991. They have three children, [X] born in 1994, [Y] born in 1996 and [Z] born in 2001.
The evidence
At the time of the parties’ marriage the husband was working as a [tradesman] and the wife was working [in the education industry]. Shortly after the marriage she commenced studies for a Masters degree in [omitted].
The wife says that at the commencement of the relationship she had a Sigma motor vehicle worth approximately $5,000.00, savings of $10,000.00 and the husband owned a motorbike valued at approximately $5,000.00. She says the husband had a credit card debt of at least $3,000.00. The husband in his affidavit sworn 18 January 2008 denies that the wife used savings to pay off his credit card debt which he says was only in the sum of $300.00.
Around the time of marriage, the husband was made redundant and received a redundancy package of $30,000.00 after working for
10 years as [occupation omitted (1)].
The parties then purchased a unit at Property N for $130,000.00 using the husband’s redundancy payment, joint savings and a mortgage from the National Australia Bank.
In 1994 the wife obtained her higher degree and commenced employment with [T]. She says her income increased by 30 to 40 percent at this time and that she was earning roughly 40 percent more than the husband. [X] was born in August 1994 and the wife says he was about 5 months of age when she commenced this position.
In 1996 the Property N property was sold for the sum of $150,000.00 and the parties purchased a property at Property D for the sum of $212,000.00. This was financed from the proceeds of the sale of the Property N property, together with some monies from the parties’ joint savings account with the balance secured by a mortgage from
St George.
The wife agrees that the husband undertook the majority of the renovations at Property D.
In 1996 the wife was appointed to the position of [omitted] with [T] with a further increase in income.
[Y] was born in 1996 and the wife returned to work in February 1997. She obtained a position as [omitted] with [T] at Parramatta during 1998.
The wife says that in about 2000 she received a redundancy payment of $50,000.00 pursuant to her employment with [T]. The parties sold the Property D property and using the proceeds of the sale together with the wife’s redundancy package purchased a property at Property K. A mortgage of $50,000 was obtained to complete the construction of the house on the property and to build a swimming pool. The husband says he did work on this property including levelling the yard, building the retaining walls, laying driveways, installing a child safe pool fence, building garden sheds, timber decks and re-wiring light fittings.
In 2001 [Z] was born. The wife says she resumed part time work shortly after [Z]’s birth for a couple of months and then resumed full time employment.
In 2003 the wife commenced working with [G] at Parramatta.
In March 2005 the parties purchased a home unit in Property W for the sum of $405,000.00. This was purchased in the wife’s name, given her higher income and the advantages of negative gearing. The loan for the purchase was in the sum of $425,000.00. Repayments initially came from the parties’ joint account. It is not contested that since separation the wife has met all repayments in respect of this property as well as those in respect of the matrimonial home.
In 2006 the wife commenced working at [O] as a [omitted]. Her salary increased with this position and the wife says she currently earns about $130,000.00 per annum.
The parties separated on 12 December 2006. The children have resided with the wife since separation.
On 22 January 2008 the husband filed an initiating application seeking orders in relation to property matters.
In May 2008 the husband commenced his own business as a [omitted].
On 30 June 2008 the wife and the children vacated the matrimonial home and moved to shared rental premises.
Issues
The significant issues in the matter relate to the following:
a)Whether the wife should be required to notionally add back to the asset pool the sum of $1,500.00 obtained from the sale of shares.
b)The assets and liabilities of each of the parties at the commencement of cohabitation.
c)The respective contributions of the parties to the accumulation of assets and to the welfare of the family.
d)The post separation contributions of the wife.
e)The assessment of section 75(2) factors.
f)Whether a splitting order should be made in relation to the wife’s superannuation interest and if so, in what amount.
The relevant law
Property settlement proceedings are dealt with in accordance with section 79 of the Family Law Act. The Full Court in The Marriage of Hickey (2003) FLC 93-143 confirmed a four step process:
·Identify and value the property, liabilities and financial resources of the parties
·Identify and assess the contributions of the parties and determine the contribution based entitlements within the meaning of paras (a) to (c) of 79(4) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties.
·Consider the section 79(2) factors and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two.
·Section 79(4)(d)-(g).
·Consider the effect of the findings and determine what order is just and equitable in all the circumstances of the case.
The wife’s evidence at hearing was that she sold shares in 2007 following separation and received the sum of $1,500.00. The husband says that this sum should be added back on a notional basis to the asset pool on the authority of Townsend & Townsend (1995) FLC 92-569. However the case law now establishes that adding back monies reasonably spent post separation ought to be the exception. The Full Court in NHC v RCH [2004] FamCA 633 referred to the decision in
C & C[1998] FamCA 143 and found that:
“Whilst not seeking to place a fetter upon the exercise of discretion of a trial judge in individual cases, it seems that the concept of adding monies reasonably disposed of back into the pool ought to be the exception rather that the rule. The parties are entitled to reasonably conduct their affairs post-separation in a manner that is consistent with properly getting on with their lives.”
It is uncontested in this matter that since separation the wife has been primarily responsible for the financial support of the three children and for payments and other expenses relating to the matrimonial property and the investment unit at Property W. The wife’s evidence is that she has experienced difficulty in meeting the expenses of herself and the children. No issue was raised that the sum raised by the sale of the shares was used otherwise than in meeting the reasonably incurred living expenses of herself and the children. I find therefore that it is not appropriate that this sum be added back.
Apart from the sum referable to the shares there is agreement between the parties about the value of assets and liabilities of the parties, including both superannuation assets and non superannuation assets. This was set out in a joint document titled “Schedule of Property, Liabilities and Financial Resources”. It was agreed that there should be a separate pool for the superannuation assets.
Taking the finding about the shares into account, the assets and liabilities of the parties are as follows:
| Assets | H/W/J | Value $ |
| Property K property | J | $625,000.00 |
| Property W property | W | $365,000.00 |
| Holden Commodore | H | $17,500.00 |
| Savings | W | $7,300.00 |
| Bravo motor vehicle | H | $8,000.00 |
| Tools | H | $4,000.00 |
| Total assets | $1,026,800.00 | |
| Less Liabilities | ||
| Mortgage Property K | J | $288,274.00 |
| Mortgage Property W | W | $426,023.00 |
| Selling costs Property W | W | $13,360.00 |
| Total Liabilities | $727,657.00 | |
| NET PROPERTY | $299,143.00 | |
| Superannuation | ||
| IOOF | W | $182,200.00 |
| CBUS | H | $148,169.00 |
| TOTAL Superannuation | $330,369.00 |
As is evident from the table the non-superannuation assets of the parties are relatively modest. The major asset of the parties is the equity in the matrimonial home at Property K. In relation to
Property W the current mortgage debt exceeds the value of the property in the sum of approximately $61,000.00. To that liability must be added the costs associated with the sale of the property which is sought by both parties.
Superannuation constitutes just over half of the total assets of the parties. In line with the authority of C & C (2005) FLC 93-220, and consistent with the submissions of counsel at the hearing, contributions to the property asset pool and the superannuation pool will be assessed separately. The Full Court in C & C was of the view that whether or not a splitting order is sought by either of the parties, the parties’ contribution to both the property and also the superannuation interests should be assessed. The Court said that:
“The other factors in s. 79(4)(d), (e), (f) and (g) would then need to be considered. Specifically in the context of s. 79(4)(e), that is, the s75(2) factors, any division of the property (as defined in s 4(1) and any “division” of any superannuation interest (in the sense of an allocation of a base amount) based respectively on the assessments of the parties’ contributions to the property and to any superannuation interests, would then be considered. Similarly, the parties’ future superannuation prospects (be they in capital or income form) would also need to be considered. The overall justice and equity of the ultimate award including any proposed splitting order or the need for such an order would then be considered.”
Assets and liabilities at commencement of cohabitation
The wife says in her affidavit sworn 2 March 2008 that at the commencement of the relationship she was the registered owner of a Sigma motor vehicle valued at approximately $5,000.00 and that she had savings of approximately $10.000.00. She says that the husband was the registered owner of a motor cycle valued at approximately $5,000.00 and that the husband had a credit card debt. She says that she cannot recall precisely the amount of this debt but that it was at least $3,000.00 and that some of her savings were used to repay this debt.
The husband’s recall of these early assets and liabilities as set out in his affidavit evidence was less detailed than the wife’s. He agreed with what the wife said about the car and the motorcycle. However, it is not clear in his affidavit sworn 18 January 2008 whether the husband seeks to deny that the wife had savings at the commencement of cohabitation or to deny that any such savings were used to pay off his credit card debt. In cross-examination, the husband acknowledged that the wife brought savings into the marriage but was unable to say if the sum of $10,000.00 was correct or not. In his affidavit, the husband said that his credit card debt was $300.00. In cross-examination he denied that it was in the sum of $3,000.00 as claimed by the wife, but gave oral evidence that it was in the sum of $500.00 and said he recalled this figure because it was used to pay for parts of his motorcycle. When pressed, the husband acknowledged that he could not absolutely say what the amount of his debt was at the time of cohabitation.
The wife was cross-examined as to her recollection of the figure of $10,000.00 in savings. While she acknowledged that she could not recollect exactly when the parties commenced living together in 1989, she was steadfast in her assertion that her savings at co-habitation had been in the sum of $10,000.00.
I find from the evidence, especially as the husband is not able to contradict what the wife says, that it is most likely that the wife brought the sum of $10,000.00 into the relationship. The husband is adamant that his debt at the time was not $3,000.00. In his affidavit he says that it was $300.00. In his oral evidence he says that it was $500.00. It is clear that he had a debt of at least $500.00 at the commencement of the relationship.
Assessment of contributions
At hearing it was submitted on behalf of the husband that there should be a finding of equal contributions, including to the building up of assets. He urged that undue weight should not be given to financial contributions in the context of a relatively long marriage and that an adjustment in relation to s.75(2) factors should not be made in favour of the wife because of her earning capacity and ability to generate superannuation.
It was submitted on behalf of the wife that her contribution to the building up of assets placed her slightly ahead of the husband and that she had made very significant post separation contributions in terms of her support of the family with minimal financial support from the husband for a period of almost two years. The wife’s case outline document contended that the wife’s contribution to both non-superannuation and superannuation assets should be 60 percent, with a 10 percent adjustment in favour of the wife in relation to section 75(2) factors. In final submissions, counsel for the wife submitted that having heard the evidence the wife’s contribution to non-superannuation assets should be assessed as 70 percent.
Financial contributions
The evidence is that the wife brought $10,000.00 into the relationship. Both parties were paid redundancies. The wife’s payment exceeded that of the husband. The husband’s redundancy payment was used to partly finance the purchase of a unit at Property N and the wife’s was subsequently used to partly finance the purchase of the property at Property K. Both parties worked throughout the marriage putting money into a joint account which was used to assist in the purchase of properties which progressively upgraded the family’s housing during the marriage. The wife took leave for short periods following the birth of each child.
Following his redundancy as [tradesman] with [occupation omitted (1)] the husband worked with [occupation omitted (2)] as a [tradesman] for approximately eighteen months and then with [occupation omitted (3)] as a project manager for approximately four and a half years followed by work with a number of employers for a further twelve months. After that he was employed as a [occupation omitted (4)] for five years and then as a [occupation omitted (5)] before establishing his own business as a [occupation omitted (6)] in May 2008. In his Financial Statement filed on 22 January 2008, at the time he was employed by [occupation omitted (5)], the husband discloses a total wage before tax in the sum of $1,110.00 per week. In his Financial Statement filed on
10 November 2008the husband disclosed an average weekly income in the sum of $1,200.00.
The wife says that following the completion of her Master’s degree when she obtained employment with [T] in 1994 her income significantly increased and that she was then earning approximately 40 percent more than the husband. The wife says her income increased again when she was employed as a [omitted] with [O] and that her present income is approximately $130,000.00 per annum.
Non financial contributions
The husband gives evidence of his contribution to the improvements of the properties which the parties have owned from time to time but especially in relation to his work on improvements of the property at Property D.
The husband said his work as [tradesman] enabled him to gain experience in all aspects of building maintenance and that as a result he was able to undertake renovations at the Property D property where he removed termite damage, replaced timbers, re-gyprocked and
re-painted. He says he closed off rooms, built walls, finished walk-in wardrobes, removed the old kitchen and installed a new one, knocked down walls, opened a rear entertainment area, landscaped the gardens and constructed a deck around the pool area. The wife does not dispute this work of the husband and I find that he made significant contributions to the improvements of the properties, particularly at Property D, as set out above.
The wife concedes that the husband put substantial effort into improving this property. She says however that one of the children was only aged two at this time and the other was younger and that the husband would not have been able to spend time on these improvements unless she had been caring for the children while he was undertaking this work.
Contributions to the welfare of the family
The respective contributions of the parties to the welfare of the family including contributions made in the capacity of homemaker and parent are disputed by the parties. The wife says in her affidavit sworn
2 March 2008 that during the marriage she breastfed the children, got up to them at night, arranged for and attended medical appointments, attended school functions, sports days, parent teacher nights and was responsible for locating and arranging day care, preschool and school. She says that during the marriage she attended to preparing the children’s breakfasts and lunches in the mornings, packed their bags for day care and school and took the children to and from day care and school. She says that “the husband assisted occasionally”. She says that there was a period of 2 years when he took the children to school on two mornings each week. The wife says that when she commenced work at [O] in 2006 she employed a nanny five days a week from 3.00pm to 6.00pm to assist in the care of the children. She says she would drop the children off in the morning and the nanny would collect them from day care or school in the afternoon. The wife says she was responsible for enrolling the children in swimming lessons, soccer and other sporting activities and attending to their homework and projects. She says she is presently the president of the school P and C committee.
The husband says that he would take the children to childcare in the mornings and pick them up in the afternoons and says that this meant he was not able to work overtime. He says that when the wife was employed by [T] and [G] she spent a lot of work days travelling interstate for business which would normally be three days at a time and that during this time he cared for their six month old son who needed “regular express breast milk or formula” and that he would cook, clean and look after the younger children, drop them off at childcare in the morning, go to work and pick them up from work and prepare dinner and get them ready for bed. The wife stated in oral evidence that that she did little interstate travel when [X] was young but made three to four interstate trips of approximately three days at a later time during what she described as “the [omitted] period”.
The husband is not specific about the amount of time that the wife was away and when he did these extra duties. The implication from what he says is that ordinarily the wife would be participating in these domestic tasks as well. In cross-examination the wife conceded that both she and the husband contributed in various ways to what was required in looking after the children and maintaining the home.
I find it most likely given the evidence before the Court in this matter that as the husband says, caring for the children and the home was part of “family teamwork” and that this was shared by both of the parties.
On the evidence then I find that the wife with her initial savings, higher redundancy and higher income since approximately 1994 has made greater financial contributions than the husband. At the same time, as conceded by the wife, the husband has made significant contributions to the improvements of the properties owned from time to time by the parties, particularly in relation to the property at Property D. The proceeds of the sale of this property together with the wife’s redundancy payment were used in the purchase of the matrimonial home at Property K. I find that overall, up to separation the parties have contributed equally to the acquisition and improvement of the property of the parties. I also find that up to separation, the parties have contributed equally to the welfare of the family.
Post separation contributions
Two financial statements were filed by the husband. The first was sworn on 18 January 2008 and the second on 10 November 2008. The husband was cross-examined on the gross weekly income indicated in each and did not demur from what was in each of the Financial Statements, i.e. he was earning $1,100.00 gross per week at the time of swearing the first document, when he was employed as a [omitted] and $1,200.00 in his most recent Financial Statement filed on 10 November 2008 some time after he commenced his own business.
Since separation the wife has been responsible for the care of the three children. The husband agrees that he spends time with the children on alternate weekends from Friday to Sunday, that he sees the boys’ soccer games on Saturdays during the soccer season and on soccer training nights during the week. He does not spend time with them during school holiday periods.
The husband in his affidavit sworn 6 November 2008 set out that when the parties separated he voluntarily paid child support in the sum of $170.00 per month. He says that the wife then approached the Child Support Agency for an assessment of child support and that as a result he received a nil assessment and ceased making child support payments. The wife’s evidence in her affidavit was that the husband paid child support in the sum of $35.00 per week from April 2007 to March 2008 and then ceased making payments. In cross-examination the husband conceded that he had been assessed to pay child support in the sum of $118.83 per month for the child support period from
15 February 2008to 30 June 2008 and that the nil assessment was for the period 1 July 2008 to 14 May 2009. He did not dispute the wife’s evidence that he had ceased paying child support in the sum of $35.00 in March 2008 but did say the outstanding child support had been paid as of the date of the hearing.
The husband also agreed in cross-examination that it was a joint decision of the parties to send the children to Catholic schools. The wife’s evidence is that the husband agreed to pay school fees for the oldest child. The husband says in his affidavit that he paid school fees of $820.00 per term for [X]. The wife says to her knowledge the husband paid the fees for the first term of 2007 and for half of the second term. In cross-examination, the husband said he recalled paying about $800.00. He thought he had paid more but could not be certain. He agreed that when he ceased to make payments for child support he decided to cease making payments for [X]’s school fees. The husband said he was uncertain about the amount of the school fees for the younger children but that they could be about $600.00 per term. The wife’s evidence in her affidavit is that school fees are $1,400.00 per term and that she is behind in payments in the sum of $3,400.00.
The husband says he has paid soccer registration of the three boys in the sum of $1,600.00 per annum. The wife agrees with this and says the husband met half of the cost of one of their sons to travel to Italy to play soccer and $400.00 for their son [Y] to travel to Melbourne to play soccer. The husband said it was necessary for him to accompany his son to Italy and that this trip cost him $9,000.00. The wife says apart from these payments she has met all living costs of the three boys since separation.
The wife has been responsible for paying mortgages in relation to both properties and for paying outgoings in relation to both properties. The husband was asked in cross-examination whether he knew how much it was costing the wife to meet the outgoings on the properties. The husband responded that he “didn’t have any idea”. A schedule of mortgage payments and payments relating to management and other fees, council rates and water rates concerning the properties was tendered in evidence. The schedule in relation to the Property W property for the period December 2006 to October 2008 shows costs including mortgage payments in the sum of $72,886.05, less income of $26,167.95 with net expenses of $46,718.10. The husband argues that the benefit of negative gearing would have offset the losses to some extent. However, there was no specific evidence before the Court of tax benefits accruing to the wife in respect of this.
The wife’s evidence is that she could not continue to meet these expenses and accordingly moved from the matrimonial home on
30 June 2008with the children to shared rental accommodation with another family also with three children at Property K. She says this is cramped accommodation and that the children share bedrooms. Her share of the rent is $450.00 per week and she makes weekly payments of $50.00 for storage of items from the matrimonial home. She receives $650.00 per week rent from the matrimonial home which is used to meet loan payments together with other outgoings. She has continued to be responsible for the upkeep and maintenance of the matrimonial home.
The wife paid $135.00 per week for the assistance of a nanny five days a week to assist with the care of the children after school when she commenced her employment with [O]. She says that since the commencement of 2007 she has been unable to afford the costs of the nanny 5 days a week and that she now works from home on Fridays. She pays for the nanny on Tuesdays, Wednesdays and Thursdays and neighbours help with child care after school on Mondays.
The evidence is that the wife meets all living expenses of the three boys including school fees, excursions, camps, school uniforms and books, food, clothing, accommodation, private health cover and other health expenses. The husband’s evidence is that since separation he has provided minimal financial assistance which consisted of child support of $35.00 per week from April 2007 to March 2008, some initial assistance in relation to the school fees of one of the boys and payment of soccer registration for the boys.
Based on this evidence I find that the wife has been overwhelmingly responsible for both financial contributions to the property of the parties and for contributions to the welfare of the family since separation. She has been responsible for payments and upkeep in respect of the matrimonial home and the property at Property W and for the care and support of the children. I find that there must be an adjustment in her favour of 10 percent in relation to these post separation contributions.
Assessment of contributions to superannuation
There was no evidence in the matter about the value of superannuation at the time of commencement of cohabitation or at the time of separation. The only evidence provided in the course of the hearing followed a question to the wife about how long she had been a member of her superannuation fund. She responded that since May 2005 all contributions had been made by her employer. There had not been a response to the husband’s Form 6 by the hearing date.
Leave was given to the parties to submit details of the husband’s superannuation interests following the receipt of the response to the Form 6. Subsequently the response was received and the updated value was incorporated in the joint document, titled ‘Statement of property, liabilities and financial resources’. This agreed Statement showed the value of the wife’s superannuation interest as $182,200.00 and the value of the husband’s superannuation interest as $148,169.00. This reflected a differential of $34,031.00. Both are accumulation funds. These figures were less than the estimates provided in the Financial Statements of the parties and suggested the likelihood of a decline in the value of both parties superannuation, although the assessment of this was hampered by the lack of evidence of the valuation of either as at the date of separation.
At hearing the husband’s counsel noted that while a splitting order in relation to the wife’s superannuation had been sought in the husband’s application, his submissions were hampered by the fact that there had not been a response to the husband’s Form 6 as at the date of hearing. It was acknowledged that the wife could have made contributions to her superannuation fund post separation and that overall, depending on the difference between the value of the parties’ respective superannuation interests, some evening up may be justifiable. More specifically it was submitted that if the difference between the two interests was around $168,000.00 for the husband, as compared to $188,000.00 in favour of the wife, a splitting order of $12,000.00 or so, could be made to “even up”. The husband’s counsel expressed the view that that was the highest he could put the husband’s case in relation to a split of superannuation and submitted that if the Court determined that a splitting order was not appropriate the disparity in superannuation could be taken into account as a section 75(2) factor. Counsel for the husband acknowledged that the Court could make an adjustment to both pools in relation to superannuation but noted the obvious difference between the opportunity to receive assets in terms of immediately available property as against deferred assets in the form of superannuation.
It was submitted on behalf of the wife that if the superannuation differential between the parties was around $20,000.00 there should be no splitting order. However on the basis of the wife’s proposed separation contributions, the wife’s contributions to her superannuation should be assessed at 60 percent because her post separation earnings were greater than the husband’s.
I will attempt on the evidence available, to assess the contributions to the parties’ respective superannuation entitlements. The Full Court in M & M (2006) 37 Fam LR 150 referred to comments made in C & C and noted that:
‘In our view there is nothing said by the majority in C & C that would give any support for the application of some kind of a formula or that contributions to superannuation whatever the nature of the fund, should be treated in a different way from contributions to other property under section 71(4). This is so whether the superannuation is considered as part of one pool of assets or in a separate pool.’
It would not be possible in any case to apply any mathematical or precise calculation in the circumstances of this matter. There are a number of factors which lead to a conclusion that the parties’ contribution to the overall superannuation pool, should be assessed as equal. There is no evidence of contributions to superannuation prior to cohabitation. Both parties were working at the time of cohabitation. There is no reason to find in this matter that the pre co-habitation contributions of either were of any very particular significance. The parties’ direct financial contributions, indirect financial contributions and contributions to the welfare of the family have been assessed and the finding is that up to separation the contributions should be assessed as equal. I find that this assessment should also apply to the superannuation pool and accordingly find that the contribution of the parties to their respective superannuation interests up to the time of separation should be regarded as equal.
Section 75(2) factors
The most relevant Section 75(2) factors arising from the evidence including those referred to in submissions made on behalf of the parties are as follows.
Section 75(2)(a) The age and state of health of each of the parties.
The husband is aged 45 and the wife is aged 44. There is no evidence of health problems of either.
Section 75(2)(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.
The wife’s evidence is that she undertook further tertiary study to improve her qualifications and has progressively obtained increasingly well paid positions and is currently earning about $130,000.00 gross per annum. Her financial statement filed on 31 October 2008 shows a weekly income of $2,476.00 and tax of $612.00, i.e., a net weekly income of $1,864.00. The husband was cross-examined on his most recent financial statement filed on 10 November 2008 where he disclosed average gross weekly income in the sum of $1200.00 per week with tax of $300.00 per week, i.e. $900.00 net. His affidavit evidence is that in May 2008 he commenced a business as a [omitted]. He says that “whilst it is progressing well, at the moment I am covering my expenses.” Certainly the husband deposed to his earnings related skills in his affidavit sworn 22 January 2008 where he said that following his apprenticeship and employment as a [tradesman] he gained experience in all aspects of building maintenance and was able to renovate and refurbish the properties the parties had owned. The evidence indicates that both parties have capacity for gainful employment. The wife has demonstrated a superior income earning capacity as compared to the husband. The evidence is also that in order to exercise this earning capacity the wife is required to expend part of her income to pay for the services of a nanny to care for the children after school while she is working. Both parties have superannuation interests. The agreed schedule submitted on behalf of the parties shows the wife’s superannuation interest as $182,200.00 and the husband’s superannuation interest as $148,169.00 a difference of $34,031.00 in the wife’s favour. While the wife has greater superannuation entitlements, the differential is not so very considerable. On the evidence both parties will continue to contribute to superannuation. The wife’s superannuation prospects are good while she is in her current employment. The husband has started his own business it is difficult to predict his future superannuation prospects.
Section 75(2)(c) Whether either party has the care or control of a child of the marriage who has not attained the age of 18 years.
The wife is the primary carer of three children aged 14, 12 and 7.
Section 75(2)(g) Where the parties have separated or divorced, a standard of living in all the circumstances must be reasonable
This is a matter where at hearing both parties were residing in rented accommodation. Both parties wished to secure more permanent accommodation. The wife wished to be able to retain the matrimonial home and live there with her three children. The husband wished to be able to purchase accommodation for himself. Given the small asset pool, particularly in relation to more immediately available assets, achieving these goals to the extent possible is a relevant consideration in relation to the circumstances of both parties.
Section 75(2)(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.
The husband says that his contribution to domestic duties was such as it affected his “value as an employee”. In particular, he refers to the wife’s position at [O] and says that on Wednesdays and Thursdays she needed to leave home at 6.30am in the morning and that accordingly on those days he was not able to leave the home until the boys went to school and he dropped the youngest child at child care at 8.00am. He says that as he was employed as a [omitted] at the time, he had to travel across the metropolitan area to work on different projects particularly in the Eastern suburbs and that his starting time on occasion was delayed until 10.30am or 11.00am. The husband said that this affected his wages and his value as an employee. The evidence is that the wife commenced her employment at [O] in 2006. The parties separated in December 2006. There was therefore relatively limited time for any more arduous conditions associated with the wife’s employment at the time to have a very significant impact on the husband’s earning capacity. The requirement on the husband was to deliver the children to school two mornings each week. The wife says there was a period of two years when the husband took the children in the mornings. The wife’s evidence is that she took them to school on the other mornings and employed a nanny from the time she commenced at [O] to collect and care for the children after school. I am not satisfied that the husband has made out his case that the wife’s work has had a significant adverse affect on his own career prospects.
Section 75(2)(m) If either party is cohabitating with another person, the financial circumstances relating to the cohabitation.
The husband’s evidence is that he is cohabiting with a person he describes as his ‘girlfriend’. He says she earns $600.00 per week net and assists him in relation to rent and other household expenses.
Section 75(2)(n) The terms of any order made or proposed to be made under section 79 in relation to the property of the parties.
Both parties will have access to superannuation in the future.
Section 75(2)(na) 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.
The evidence is that the husband paid very small amounts of child support from April 2007 to March 2008 when he ceased making child support payments. The husband said this was following a nil assessment. The evidence which he acknowledged at hearing was that he was still required to make payment until the end of June 2008. The evidence is that he has been reluctant to provide financial assistance to the family. The husband has now established his own business and it must be considered likely that the husband will attempt to structure his affairs to minimise any child support payments. On the basis of the evidence concerning the husband’s past behaviour the Court finds that in the future the wife cannot expect significant financial assistance via child support from the husband.
Section 75(2)(o) Any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account.
The wife says that in April 2008 she proposed to the husband a
re-financing of the existing mortgage facility in the expectation that it would save $200.00 per month. She annexes to her affidavit sworn
28 October 2008a letter dated 28 August 2008 from her solicitors to the solicitors for the husband. This letter advises that a response is still awaited from the proposal in relation to the re-financing of loans. When cross-examined, the husband disagreed about the details of the conversation he had with the wife about this. He agreed that when she asked him to sign documents he said “I don’t know what you’re talking about. I won’t sign anything.” He said that he could not say if his solicitor received the letter or if he himself saw it. I found that the husband was not responsive to these questions. I formed the impression that he was he was quite bitter about aspects of the relationship and that this was likely to influence his response to such proposals from the wife. While the evidence indicates that as a result of the husband’s attitude an opportunity to make some savings was lost, the quantum was not likely to have a significant overall impact.
Overall my assessment of s.75(2) factors is that the superior income and earning capacity of the wife is a significant consideration. However what must be considered is the requirement for the wife to pay for assistance in the care of the children to fully exercise this capacity and the likelihood that well into the future she will be primarily responsible for the financial support of the three children with limited assistance from the husband. The children are young. The youngest is only seven years of age. Their education, accommodation clothing, health care and other needs will be financially demanding for the wife. The husband also at present has the benefit of sharing living expenses with his partner. On this basis the Court finds that there should be an adjustment of 5 percent in favour of the wife arising from section 75(2) considerations both in relation to property assets and superannuation.
Post separation contributions to superannuation
Although counsel for the wife urged that the wife’s contributions to superannuation should be assessed at 60 percent because of her greater post separation earnings, given the decline in value and the lack of clear evidence about the value of the wife’s superannuation at the time of separation the Court needs to be cautious about this. The Court in this matter is left with little basis for making an adjustment in relation to post separation contributions as it is difficult to determine the increase in value in the post separation period. Given uncertainties about valuation of superannuation at the time of the hearing and the apparent decline of both superannuation funds it is preferable to take a cautious approach to this and to make no adjustment for post separation contributions to superannuation.
In the circumstances of this matter, as set out above, it has been appropriate to assess contributions to superannuation to one superannuation pool. The result of the analysis of contributions and s.75(2) factors is that there should be an overall adjustment of five percent in the wife’s favour in relation to this superannuation pool. This means that after adjustment the wife’s interest would be in the sum of $181,702.95 and the husband’s interest would be in the sum of $148,666.05. This closely reflects the existing superannuation entitlements and on this basis there would be no reason to disturb existing superannuation entitlements.
The Australian Scholarship Group
At hearing evidence was given about an educational fund for the children referred to as the Australian Scholarship Group in the Minute of Orders sought by the wife. The fund is in the joint names of each of the parties and they had each contributed to it during the marriage. The husband did not dispute that he had made no contributions to the fund since separation but gave evidence that he nevertheless opposed transferring the fund to the wife’s sole name. Given that the wife is currently responsible for meeting the costs of the children’s education and likely to continue to be responsible for this, I find that it is reasonable to require the husband to transfer his membership in the fund to the wife.
Just and equitable
The wife’s aim, if possible, is to retain the matrimonial home at Property K to house herself and the three children. To do this she will be required to borrow funds to pay the husband’s share of the assets. Evidence at hearing was that the wife had made inquiries as to her borrowing capacity. The wife said that she had made inquiries in February 2008 and was advised that she would be able to borrow the sum of $45,000.00. There was no evidence as to her current borrowing capacity or of the effect of the impact of changes to interest rates.
It was submitted by the wife’s counsel that the wife should have the opportunity to attempt to raise sufficient funds to pay the husband and that if she was unsuccessful orders could provide for the sale of the Property K property.
For the husband it was submitted that he should have sufficient funds as a result of orders made to be able to pay the deposit on a property. No evidence was given about what sum he might need for this.
The division of non superannuation assets of 65 percent to the wife and 35 percent to the husband would mean that the wife is entitled to $194,442.95 of the total non superannuation assets of $299,143.00.
The husband is entitled to $104,700.00 of these assets. He already has in his possession the Brava motor vehicle worth $8,000.00 and tools to the value of $4,000.00. The wife proposes that the ownership of the Commodore Holden motor vehicle which is in the husband’s name, but used by her, be transferred to her. The transfer of this motor vehicle to the wife is taken into account in the division of assets. Taking these matters into consideration the wife would need to pay the husband the sum of $92,700.00. On the evidence this would well exceed her borrowing capacity. She would then need to sell the Property K property, incur selling costs and experience the difficulties of finding alternative accommodation for herself and the three children.
The Full Court in the matter of Doherty & Doherty (2006) FLC 93-256 noted that:
“Since the availability of superannuation splitting orders following the introduction of Part VIIIB “consideration of the constitution or “mix” of the assets with which each party will be left as a result of the proposed orders would seem a necessary, if not critical, factor in determining the justice and equity of proposed orders in each case in which superannuation interests are involved.”
In this matter justice and equity would indicate that each of the parties should be left, to the extent possible given the available assets, with funds which potentially enable the wife on the one hand to attempt to borrow the funds to secure the matrimonial home, and the husband to have funds which could go towards a deposit on a property for his accommodation needs.
Given the limited non superannuation asset pool, and recognising that there will be a significant shortfall on the sale of the Property W property, the only means of achieving this result is to adjust the mix of non-superannuation and superannuation assets by way of making a split in the husband’s favour of the wife’s superannuation interest. The wife does not oppose this, the husband would, if it means a significant reduction in funds immediately available to him.
Conclusion
In the circumstances what appears to achieve a just and equitable result would be to allow for a sum of $40,000.00 of the wife’s superannuation entitlements to be made available to the husband. This would result in a splitting order in relation to the wife’s superannuation in the sum of $40,000.00. Accordingly the husband would receive $52,700.00 as a cash sum from the wife together with $40,000.00 from the wife’s superannuation fund. The husband sought a splitting order in relation to the wife’s superannuation. These orders will enhance his retirement income while providing a basis for the acquisition of property by him. If the wife is unable to borrow sufficient funds to pay the husband his share, the orders will provide for the sale of the matrimonial home and for the husband to be paid the sum of $52,700.00 from the sale of the property.
I certify that the preceding eighty-four (84) paragraphs are a true copy of the reasons for judgment of Walker FM
Associate:
Date: 6 February 2009
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