JENKINS & STEWART

[2013] FamCA 387

FAMILY COURT OF AUSTRALIA

JENKINS & STEWART [2013] FamCA 387

FAMILY LAW – PROPERTY – Division of interests in superannuation

Family Law Act 1975 (Cth)

Coghlan and Coghlan (2005) FLC 93-220; (2005) 33 Fam LR 414
Neil v Nott [1994] HCA 23; (1994) 121 ALR 148
Re F: Litigants in person guidelines [2001] FamCA 348
Stanford v Stanford [2012] HCA 52
Tomasevic v Travaglini [2007] VSC 337

APPLICANT: Ms Jenkins

RESPONDENT: Mr Stewart

FILE NUMBER: MLC 1924 of 2010

DATE DELIVERED: 23 April 2013

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 18 April 2013

REPRESENTATION

THE APPLICANT: In person

THE RESPONDENT: In person

Orders

1. That pursuant to s 90MT(1)(a) of the Family Law Act 1975 (Cth), the amount of $61,379.00 is allocated as the base amount to be deducted from the interest of the husband in the Credit Suisse Superannuation Rollover Plan (the Superannuation Fund) and whenever a splittable payment becomes payable out of the interest of the husband in the superannuation fund, the wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 and there shall be a corresponding reduction in the entitlement of the husband to whom the splittable payment would have been made but for these orders.

2. That forthwith upon the wife receiving these orders, a copy of these orders be served by her upon the trustee of the superannuation fund and a copy of any correspondence relating to such service be provided by the wife to the husband.

3. These orders shall only have effect from the fourteenth business day after the day upon which a sealed copy of these orders is served upon the trustee by the wife according to paragraph (2).

4. That the trustee of the superannuation fund has a further fourteen days after service of these orders to seek to set them aside on the basis they an objection is raised to the splitting order based upon lack of procedural fairness to the trustee.

5. That all extant applications be otherwise dismissed.

NOTATION

And the Court notes that the purpose of paragraphs (2),(3) and (4) of these orders arises because neither party has served upon the trustee a copy of their proposed orders.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Jenkins & Stewart has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 1924  of 2010

Ms Jenkins

Applicant

And

Mr Stewart

Respondent

REASONS FOR JUDGMENT

1. Ms Jenkins (“the wife”) and Mr Stewart (“the husband”) are both undischarged bankrupts.  Despite the property issues between their trustees being resolved, the dispute about the non-bankruptcy property remained. 

2. The parties have been long separated but I propose to refer to them as husband and wife and mean no disrespect to them in doing so; it is for the convenience of these reasons.

3. The property in this case is limited to the respective interests in superannuation.  Both husband and wife have approached the hearing without assistance from legal representatives although the wife indicated that the proposed orders attached to her amended application came from a precedent provided to her by a lawyer from whom she had sought advice.

4. Despite their need to present precise and admissible evidence, what the parties provided was what they thought was relevant. In any event, preliminary discussions indicated the parameters of the dispute.

5. The wife indicated that she had not prepared for a final hearing. I made orders on 27 February 2013 at which the wife was present.  The orders were clear and concise that this was to be the final hearing.  I do not accept that there can be any doubt as to what was required.

6. The Court was asked to divide the property of the parties not affected by their bankruptcies pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”).

The supernannuation values

1. The best evidence presented by the applicant wife was that she had an interest in superannuation which she described as being held by AMP Life Limited with (to use her description “estimated”) value of $32,000.  However, under cross-examination, she changed that to say that there were a series of accounts and the total would not be $32,000 but somewhere between $26,000 and $28,000.  She added that “it’s about $28,000 all up”.

2. The wife also deposed to the fact that she had a Toyota motor car with an estimated value of $5000.  That was not an issue about which there was any dispute or concern.

3. The respondent husband also estimated the value of his superannuation entitlement but he was much more precise.  He declared an interest in the Credit Suisse superannuation roll-over plan of $125,123. Later at the bar table, he told the Court that he had obtained a balance the previous evening and the exact amount was $120,966.  During her cross-examination of the husband, the wife did not challenge that figure.

4. The husband also referred to property in a liquidated company but as a bankrupt, presumably that property (if any) has or will vest in his trustee.  None of that was of any assistance and the wife did not take the matter any further.

The orders sought

1. The wife’s amended application was filed on 3 April 2013.  She sought 70 per cent of an unnamed superannuation fund in which the husband had an interest.  The husband conceded that his superannuation (as I have earlier described) was indeed the superannuation fund to which the wife was alluding.  The wife had not served the trustee with a copy of the proposed orders notwithstanding she presumably had knowledge of who that trustee was.  Any order that the Court now makes may have to be set aside on the basis that the trustee has not been provided procedural fairness.  I propose to make an order giving the trustee liberty to apply in the event that it or they feel aggrieved.  I warned the parties about that.

2. It is clear therefore that the wife’s claim is that she wanted 70 per cent of the husband’s superannuation or having regard to the value ascribed initially by the husband to his interest, she wanted a splitting order of $84,676 out of the husband’s entitlement.

3. In his response filed 12 April 2013, the husband sought discovery but having regard to the stage of the proceedings, that was inappropriate.  I canvassed that with the husband before the hearing commenced and he indicated that anything that he needed to follow up could be obtained in cross-examination of the wife and indeed he was right. 

4. The husband otherwise sought that the joint balances (by which he meant the total of both parties’ superannuation) as at the date of separation be divided 60 per cent to the wife and 40 per cent to the husband.  He too had not served the trustees of the fund.

5. The order sought by the husband, related to the separation date but the evidence of the husband as to value indicated the current value.  No evidence has been led about the contribution by the husband subsequent to separation and again, with the paucity of evidence, I will do the best I can.  I will presume that he has made some contributions over the years since the parties’ separation but for the reasons below, it matters little. It is important to note that what the husband intended was to add the totals of both parties’ interests which at the time he did the calculation, that came to $152,966 and that that sum should be divided accordingly.

6. It will therefore be seen (subject to a variation of the value of the interest of the wife) that the husband was offering to pay to the wife $59,779 by way of a splitting order from his fund and the wife was seeking a splitting order of $84,676 from the husband’s fund.

Background

1. By way of background, the parties married in 1999 and separated in January 2010.  There is therefore some relevance in the fact that it is now three years or more since the parties separated and no doubt, there have been fluctuations in the balances of the superannuation funds of both parties over that time however, that was not in evidence

2. The parties were divorced in April 2011.  They have two children who are aged 9 and 5.  The wife is the predominant carer although the husband has the children five out of 14 nights per fortnight during school term and the parties otherwise share the children equally during holidays. 

3. The husband described himself as employed in a management role but was made unemployed in March 2013.  He currently supports himself on government benefits.  The wife was cynical about the timing of his unemployment but did not seek to challenge the authenticity of the letter that he provided from his employer terminating his employment nor the fact that he was on Centrelink benefits.  I find therefore that he is currently unemployed. 

4. The husband lives with his partner Ms P and together they have a child who is 7 months old.  The husband’s partner earns $212 per week and his evidence when cross-examined, was that she works in a services role and does as many shifts as she can.

5. The father’s financial statement upon which he relied indicated that he is paying over $600 per week by way of rent.  The wife asked how he could afford to do that having regard to his current employment dilemma.  His response was that it may not be able to continue.  As part of her questioning, the wife put to the husband that he was living in a lavish home but that is not something about which I could make any finding on the evidence.

6. The wife described herself as being occupied in home duties and that she was reliant upon government benefits and child support.  She cross-examined the husband about the fact that he was unreliable because there was $12-13,000 outstanding.  The husband acknowledged that debt but added that he had paid rental payments and there was the gift to the wife of a motor car.  He said that there was an agreement that the mother’s car be accepted in lieu of child support and that he has now made that claim to the Child Support Agency which he said is yet to be ruled upon.  The wife disputed that but I am not in a position to make a finding about it because neither party presented any evidence.  Whilst the wife asserted that there were arrears and the husband was unreliable, there is now the added dilemma that he is unemployed.  He also has a child of another relationship which no doubt affects any child support formula.

7. The wife said that her financial circumstances were dire.  She pointed out that were it not for a man named Mr M, she would be in a worse position.  Mr M apparently has lent her money and is currently paying her rent and some bills, apparently on odd occasions.  She was cross-examined about the nature of the relationship with Mr M and also on the issue of the loans.  Each of those matters needs to be dealt with separately.

The wife’s relationship with Mr M

1. In relation to the nature of the relationship, the husband pointed to the wife’s association with Mr M.  He said the children had indicated that they were frequently staying at the home of Mr M but the wife denied that and insisted that it was only “once a week or so”.  She denied what the children had said was true.  The husband questioned her about a series of trips with Mr M including a holiday in Queensland, a proposed trip overseas for her brother’s wedding and a trip next week to Bali.  Each of these was explained by the wife even if somewhat unsatisfactorily.  In relation to the Bali trip, the wife said it may not be happening because although the trip had been won in some social function, she was not sure that she was going because she and Mr M were not on good terms.  That is despite the fact that they travelled to Noosa earlier in the year in a trip which was paid for by Mr M.  Apparently his son provided accommodation.  The overseas trip foreshadowed concerns a wedding at the end of May 2013 involving the wife’s brother.  The wife indicated that she wanted the children’s passports or the documents to obtain them completed by the husband yet she was not sure whether her brother was going to fund the trip to his wedding.  As for Mr M travelling, that too remains unclear.  The relevance of all of this concerns the question of whether or not the wife is cohabiting with another person whose financial circumstances might therefore be relevant. 

2. The husband produced a document which he said, and it was not denied by the wife, came from the internet describing the wife as a consultant in a business in which it she also described herself as a director.  When I asked her to explain what all that was about, she conceded it was just advertising and that in reality, it was all a lie.  She said she was not receiving a salary or wage from the named business nor was she a director at all.  The latter was confirmed by an ASIC search which showed that she not only was not a director but she also did not have any shareholding.  The company is controlled and directed by Mr M and he seems to be the sole shareholder.

3. The highest that I could put the evidence was that the wife has the benefit of calling upon Mr M when she is in dire straits but I could not find that she is cohabiting with Mr M in the sense of a relationship of any permanence.  I earlier mentioned her hesitation about whether Mr M was travelling to Bali because the relationship is apparently not good.  There is some support for that position because in relation to the loan issue to which I shall now turn, the wife described Mr M as a “loan shark”.

The loans by Mr M

1. The loans to which the wife referred in her affidavit are all apparently due to Mr M.  The nature and extent of the loans remains unclear although it was the wife’s evidence that as a “loan shark”, Mr M would definitely want to “get his money back” for, as she said, he deals with such things as repossessions of cars.  I am not convinced that that evidence took the matter any further. She said that there was no interest rate on the loans and there was no specific time for repayment because she and Mr M had not sat down to work out those arrangements.  She said at its highest, she had to repay the money when in a position to do so. 

2. To the extent that all of that evidence goes to the question of cohabitation with Mr M, I could not find that to be the case.

The wife’s current circumstances

1. The wife said that she lived in rented accommodation and had no other person living with her who was earning an income.  She said she cared for the children and had been out of the workforce for four years and was finding it difficult to obtain secure employment.  She has tertiary qualifications and as her website entry would show, she has significant experience in her industry.  She said however that in her local area, employment was very difficult to find.

2. Despite the fact that both parties seemed impecunious it would appear that the children or one of them attends a private school.  Just how those fees are paid remains a mystery although there was a debt claimed.  It was part of the husband’s evidence that the wife was living with Mr M because he was shown on a document as the step-father.  The school record is at best cryptic and I would not be prepared to draw the inference as the husband would have me do so.

3. At its highest, the wife said that during the marriage she was fully employed and earned a good salary but otherwise she had been the person who cared for the children.  As I earlier indicated, the husband now has the children five nights out of 14 and half holidays and obviously the wife has the rest.

4. Much of the evidence to which I have just referred concerns the current positions of the parties but it does not help me in determining what will happen in the future.  The wife’s evidence was that the husband’s track record was such that she could not rely upon him in the future for child support yet his response was that as soon as he obtained employment he would pay.  Whilst one might have some reservations about that statement having regard to the current arrears, the wife did not explore why there were those arrears nor did the husband proffer any explanation as to how the debt got up to $13,000 nor whether it was specifically orchestrated that way because he had purchased the wife a motor car.  The wife’s response in relation to the motor car was that at best it was now worth $6000.

5. Neither of the parties challenged the other in relation to their respective contributions during the time that they were together and the only evidence I have is that each contributed their respective resources when they had the opportunity to do so.

The husband’s circumstances

1. When the wife cross-examined the husband about his intentions, he gave evidence that he was looking for work in the central business district and had lodged his name with “numerous agencies” and was following up job ads.  He said he hoped to get employment soon.

2. In relation to the wife’s criticism about his financial support for the children, he responded by saying that he paid for school books and a current excursion upon which one of the children was attending.  The wife disputed that but there is no evidence one way or the other and having regard to the contentious nature of the evidence and the fact that each party saw little benefit in providing a comprehensive picture, I propose to make no finding on that specific evidence.

Submissions

1. Each party was given the opportunity to make a final address as to why the orders that they sought should be made.  The husband’s only point was that he was looking for closure and that he was acknowledging that the wife could not tap into the superannuation but it was his view that the proposal he made was fair and reasonable.  The wife’s response was that she was the mother of the children and making a significant contribution towards their support and based on the advice she had received, this was a fair and equitable outcome.

Self-representation

1. In Neil v Nott [1994] HCA 23; (1994) 121 ALR 148, the High Court of Australia observed that a frequent consequence of self-representation is that the court must assume the burden of endeavouring to ascertain the rights of parties which are obfuscated by their own advocacy.

2. Every litigant has the right to represent themselves. Where one party is represented and the other is not, the advice and assistance the unrepresented person receives should be limited to ensure that any disadvantage in not having a lawyer is overcome, particularly in an adversarial environment. However, the court in that situation cannot extend its duty to create a positive advantage to the unrepresented over the represented. It is more difficult where there is no legal representation and the court is expected to be able to explain and determine a case in an adversarial procedure.

3. Having two unrepresented litigants does not mean the court environment can be used as a bargaining centre or mediation service; it remains a court obliged to determine the controversy according to law.  

4. As Bell J observed in Tomasevic v Travaglini [2007] VSC 337, the judge cannot become the advocate of the self-represented litigant.

5. The Full Court of this Court in Re F: Litigants in person guidelines [2001] FamCA 348 set out the various principles that fell to a judge to ensure fairness where there was a litigant who was without legal representation. Both parties were provided procedural fairness not only on this occasion but previously when the matter was listed back in February because the issue was confined to the superannuation splitting issue and each had to provide the evidence to support their contentions. Each was advised to obtain legal advice before they filed their affidavits.

The onus of proof and the standard of proof

1. The onus of proof lies with the person making the allegation. The standard of proof is the balance of probabilities. I have determined the matter on what I have read and heard where that evidence is of probative value and most importantly, have made findings about what probably happened.

The approach to the division of property

1. In Stanford v Stanford [2012] HCA 52, the Court outlined three fundamental principles to be applied when exercising the power under s 79 of the Act.

2. The first step is to determine whether it is just and equitable to make an order at all having regard to the legal and equitable interests that the parties have in the assets that are presented by either of them for division or alteration.

3. In Stanford, the High Court emphasised that the starting point should not be a presumption that any alteration must occur.

4. If it is just and equitable to make an alteration to the existing interests, s 79(4) requires the Court when determining what if any, order should then be made, to take into account the various contributions of the parties in their many forms together with the factors (in so far as they are relevant) in s 75(2) of the Act. In addition to contributions, the Court is also obliged to take into account child support considerations and the effect of any proposed order upon the earning capacity of either party.

5. The application of ss 79(2) and 79(4) must not be conflated. Thus, once the court is satisfied under s 79(2) that it is just and equitable to make an order, the next step is to consider what order should be made by examining s 79(4).

6. The assessment of these various contributions including those of homemaker and parent can be undertaken on either an asset by asset basis or globally.  The paucity of the evidence here means that the Court has to do the best it can bearing in mind the focus of the parties.  Sending the parties away to gather more evidence in this case would seem pointless.

Superannuation

1. Under Part VIIIB of the Act, the Court is empowered to make a particular form of order to split the superannuation of parties in a “matrimonial cause” (s 90MS). In respect of “superannuation interests”, the Court has jurisdiction by virtue of s 90MC, which provides that the superannuation interest “…is to be treated as property for the purposes of paragraph (ca) of the definition of matrimonial cause in s 4”. Section 90MT specifies the types of orders that can be made in relation to a superannuation interest.

2. Superannuation interests have been described by a majority of the Full Court in Coghlan and Coghlan (2005) FLC 93-220; (2005) 33 Fam LR 414 as “another species of asset” in relation to which orders may be made in proceedings under s 79 (2005) FLC 93-220 per Bryant CJ, Finn and Coleman JJ at para 43. Notwithstanding the imprecision that comes with identifying the value of a superannuation interest, the Court will apply s 79 and in particular 79(4) of the Act as with the other assets of the parties.

3. The parties seemed to understand that, subject to some hardship provisions, superannuation for both of them might be of future benefit but there was little that they could achieve from it now or in the immediate foreseeable future. 

Findings

1. I find that the husband’s superannuation as at the present time is $120,966.  I find that the wife’s superannuation entitlement is $28,000. 

2. Whilst there may be other assets of minimal significance such as cars and furniture, neither party came to court seeking orders in respect of those items.

3. It is just and equitable to make an adjustment of the superannuation entitlements of the parties.  Having regard to the disparity of the two superannuation entitlements and the fact that the husband conceded that a splitting order should be made in favour of the wife and she was seeking one, I find an order should be made. It is important to note that the parties agree that the current position is not otherwise appropriate.

4. The second question concerns the various aspects set out in s 79 including s 79(4)(e).

5. There is no evidence of any dispute about the contributions made by either party.  The husband did not complain about the wife’s description of what went on over the years that they were together and the wife conceded that the husband earned more money than she did.  The fact that their financial life ended in bankruptcy simply clouds the picture. 

6. Based upon the evidence the parties presented to me and that neither challenged the quality or extent of the other’s contributions, I find that their various contributions were equal. 

7. Subsequent to the separation of the parties, there is much that is in dispute about the financial circumstances.  Indications of that relate to the child support issue mentioned above but then there is the question of the husband’s contribution of a motor car which even if he was not given credit for child support purposes, somehow seems to have some relevance as a contribution. 

8. Nothing I read or heard would suggest that any splitting order I make would affect either party’s earning capacity.

9. Neither party led any evidence about superannuation contributions or interest variations subsequent to separation. As earlier mentioned, I inferred that the husband had contributed but he did not seek orders that would affect that position.

10. Thus, on the evidence, sparse as it is, up until now, I could not find that there is any difference in the respective contributions.

11. Turning to the s 75(2) factors, I make the following findings:

    ·    Both parties are capable of employment but currently have difficulties obtaining it and neither party suggests that there are any health considerations that would preclude them from being employed;

    ·    Neither party has any financial resources or property of any significance such as to justify an adjustment in their favour;

    ·    The parties are both in straitened financial circumstances and the husband has the responsibilities of a new child;

    ·    Neither party indicated any particular responsibility to maintain another person other than children and it was not suggested by the husband that his new partner fell into that category any more than the wife’s friend Mr M fell into that category either;

    ·    Both parties are currently eligible for government benefits and neither has any entitlement to current superannuation benefits.  I do not propose to include superannuation considerations here because it would otherwise possibly mean double-dipping.

    ·    Each of the parties might see the other as living a lifestyle inconsistent with their means but none of the evidence would support a finding that their current standard of living was unreasonable;

    ·    Issues associated with maintenance and creditors have all been dealt with by previous orders;

    ·    Notwithstanding the husband’s assertion about the wife living in a de facto relationship, I could not find that she is cohabiting with Mr M. The husband is living with his partner but her income was modest and they have a child for whom his partner is also financially responsible;

    ·    The wife maintains that it is important for her to care for the children and that is a significant issue but there is also the responsibility of the husband which, whilst not equal to hers, is certainly significant having regard to the time that he has with the children. That factor has been taken into account but alone would not justify an adjustment in this case;

    ·    The terms of the orders that I propose to make have little or no impact on the current financial circumstances of the parties because the reality is that neither will be able to obtain the benefits of any superannuation adjustment for many years to come;

    ·    There is much dispute in this case about child support but as no evidence was produced as to the past which would enable the Court to find that the husband is a recalcitrant avoider nor is there any evidence that what he says about his proposed payments in the future will not come true;

    ·    There are no unusual circumstances about this case otherwise.

12. In my view having regard to the very limited circumstances of the parties and the fact that the superannuation entitlement is a long way off in the future, I find there is no justification for any specific adjustment under s 75(2) or s 79(4)(e).

Conclusion

1. This is a case where the parties agree that an adjustment is just and equitable but cannot agree on the quantum of that adjustment.  All of the circumstances point to a totalling of the superannuation and an adjustment such as would provide them with an equal amount of superannuation.  However, the husband’s case was that an adjustment should be made in favour of the wife as to 60 per cent.  He described that as a just and equitable outcome.  His initial calculations based on the wife’s superannuation of $32,000 which would have a superannuation splitting order made of $59,779 have to be reconsidered because of the calculations I have found as to the parties’ respective interests.  60 per cent of $148,966 is $89,379 from which the wife already has $28,000 leaving an entitlement of $61,379. 

2. The wife sought $84,676 based on 70 per cent of the husband’s superannuation but in my view that would be most unfair.

3. In my view, it is just and equitable to make an adjustment of the husband’s superannuation such that a splitting order be made to the extent of $61,379.

The trustees

1. Neither party had served the trustees as required and I expressed concern about the issue of natural justice to them.  I propose to make an order giving the trustees an opportunity to set these orders aside and because it is the wife who is the recipient of the benefits of this order, she can bear the responsibility for serving the trustee.  These orders will not come into operation until 14 days after the trustee is served by the wife and to the extent that the trustees require the matter reopened on the grounds of natural justice, I shall make provision in the relevant orders.  I direct that the wife serve a copy of the orders upon the trustee which will make clear why they are being so served.

I certify that the preceding Sixty Seven (67) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 23 April 2013.

Associate: 

Date:  23 April 2013