K and K
[2000] FMCAfam 77
•1 December 2000
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| K & K | [2000] FMCA fam 77 |
| PROPERTY SETTLEMENT – Domestic violence allegations – Superannuation (small pool) |
| Applicant: | G A K |
| Respondent: | N G K |
| File No: | ZB3351 of 2000 |
| Delivered on: | 19 December 2000 |
| Delivered at: | Brisbane |
| Hearing Date: | 1 December 2000 |
| Judgment of: | Baumann FM |
REPRESENTATION
| Counsel for the Applicant: | Mr Curran |
| Solicitors for the Applicant: | Michelle Byrnes |
| Counsel for the Respondent: | Ms Carew |
| Solicitors for the Respondent: | M A Kent & Associates |
ORDERS
That the wife shall transfer her interest in the former matrimonial home at Lot 1, B’s Road, I to the Husband in exchange for a payment to her of $64,500 (“the said sum”).
The Husband shall pay the said sum by 9 February, 2001.
If the husband is unable or unwilling to pay the said sum then the property at Lot 1, B’s Road, I is to be sold and the net proceeds of sale are to be distributed:
(a)As to 75 percent to the wife; and
(b)As to 25 percent to the husband
Pending the sale of the said property the husband shall be entitled to enjoy sole use and occupation of the property and shall be solely responsible for all rates, house insurance and other charges running with the ownership of the property.
The parties backhoe shall be sold and the net proceeds of sale (including any costs associated with transporting to the point of sale, shall be divided:
(a)As to 75 percent to the wife; and
(b)As to 25 percent to the husband
The husband shall cause to be delivered to the Wife, within thirty days:
(a)The wife’s Father’s desk;
(b)Broad selection of family photographs and videos.
The husband shall transfer to the wife all his interest in the joint B Trust shareholding.
The wife abandons any claim or interest in any other property or financial resource in the possession or ownership of the husband at the date of this order, and not otherwise dealt with in these orders, and without limiting the generality of this provision including his superannuation entitlement proceeds of sale of cattle, motor vehicles, and chattels in his possession.
The husband abandons any claims or interest in any other property or financial resource in the possession or ownership of the wife at the date of this order, and not otherwise dealt with in these orders, and without limiting the generality of this provision including her superannuation entitlements, motor vehicles, chattels in her possession.
The husband shall be solely responsible and shall indemnify the wife against any claims or demands arise from the Bankcard liability and Queensland Teacher’s Credit Union liability.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
ZB 3351 of 2000
| G A K |
Applicant
And
| N G K |
Respondent
REASONS FOR JUDGMENT
Introduction
The Applicant G A K (“the wife”) filed an application in the Family Court of Australia on 31 August 1999 seeking an order that she be entitled to the property at Lot 1, B’s Road, I and an equal share of the furniture. The respondent N G K (“the husband”) by his response filed 25 October 1999 sought an equal division of property available.
The parties attended a conciliation conference and on 14 September 2000. Deputy Registrar McGrath transferred the matter to the Federal Magistrates Court for trial.
The parties complied with the trial directions and each party gave further evidence and was subject to cross-examination.
History
The parties married on l4 December 1974. There was no prior cohabitation. The parties finally separated in March 1999 and a Decree Nisi of Dissolution of Marriage was granted on 27 July, 2000. There are two surviving adult children of the marriage, R (now aged 22 years) and L (now aged 21 years). Tragically, L’s other sister C died when approximately 3 months old. The husband is now 46 years of age and the wife is 44 years of age.
At the time of marriage the husband was a tradesman plumber, drainer and gasfitter whilst the wife was employed as a dental nurse. Although there have been short periods of unemployment, the husband has been gainfully employed or self-employed in his trade during the marriage and after commencing employment with the K Shire Council in January 1987, he secured a position with the Moreton Shire Council (now I City Council) in 1989 where he continues as a plumbing inspector.
The wife’s work history has been punctuated by periods of unemployment due to the birth of the children and periods of self-employment as a contract sewer; as a book-keeper in the plumbing business; working with her mother making soft toys for a business called “S” and as a part-time employee of W S between 1991 and 1998. The wife alleges her employment opportunities were affected by incidents of domestic violence during the marriage. After separation, the wife obtained a Protection Order under the Domestic Violence (Family Protection) Act 1989 in the I Magistrates Court. The husband says a protection order was made in his favour at the same time.
The history of property accumulation is relatively short, in, that the wife was gifted by her parents in 1977, a parcel of land at Lot 1, B’s Road. The wife says and I accept, that it was necessary to transfer the land into joint names in “order to obtain a loan to build a house”. The house represents the major asset in the marriage at trial.
Asset pool & financial resources
The parties agreed that the assets, and liabilities and financial resources of the parties to be taken into consideration by me were:
a)Assets:
i)Former matrimonial home....................................... $75,425
ii)Chattels in husband’s possession............................ $9,605
iii)Chattels in wife’s possession.................................... $4,728
iv)Backhoe....................................................................... $7,500
v)Shares in B Trust............................................................ $800
vi)Cattle sold (post separation)..................................... $2,821
vii)Total :...................................................................... $100,879
b)Liabilities:
i)Bankcard..................................................................... $6,000
ii)Qld Teacher’s Credit Union....................................... $4,833
iii)Other Accounts............................................................... $248
iv)Total :........................................................................ $11,081
c)Financial Resources:
Husband
i)Gross superannuation at 30 June 1999................. $62,621
ii)Gross superannuation at 28 November 2000....... $78,600
iii)Gross Long Service Leave...................................... $10,627
iv)Gross holiday pay....................................................... $3,592
Wife
i)Gross superannuation at 21 November 2000....... $10,066
In respect of the husband’s superannuation, which he joined in February 1989, the gross total benefit is divided between an unpreserved benefit of $31,300 and a preserved benefit of $47,300 (at trial). The statements from the local Government Superannuation Scheme Board reveal that the unpreserved amount can be “cashed in” upon leaving local government employment before permanent retirement whilst the preserved amount is “locked up” until permanent retirement after age 55. There is no evidence to explain the significant increase in the preserved benefit between June 1999 and trial and I therefore infer that it was as a result of normal accumulation and salary contributions and not as a result of any extra contributions made by the husband.
The husband says he discharged the joint liabilities after separation totalling $11,087. Whilst in his submissions Counsel for the wife asserted some of that liability still exists, it is proper to assume the wife has been relieved in any event, of any contingent liability for these debts.
The issue to be determined
The issues requiring determination by me, on the evidence, appears to be:
a)The respective contributions under s79(4);
b)The impact of the allegations of domestic violence against the wife, if found proved;
c)The assessment of the relevant s75(2) factors;
d)An order that is just and equitable in all the circumstances.
The relevant law
12. The approach to the determination of an application pursuant to s79 of the Act, is well established by authority (see LEE STEERE (1985) FLC 91-626; FERRARO (1993) FLC 92-335; DAUUT and RAIDF (1994) FLC 92-503; PRPIC (1995) FLC 92-574; CLAUSON (1995) FLC 92-595; WHITELY (1996) FLC 684 and DOIG (1999) FLC 92-869) which requires the adaptation of a “three step process”:
a)Determine the extent and value of the property, liabilities and financial resources of the parties at the time of trial (see TOWNSEND (1995) FLC 92-569; BILTOFT (1995) FLC 92-614;
b)Consider what contributions have been made by the parties within s79 (4)(a), (b) and (c);
c)Consider what is identified as the “other factors”, being the matter in s79(4)(d),(e),(f) and (g), including by reference to s79(4)(e) the matters in s75(2) (LEE STEERE (supra) FERRARO (supra) WALTERS and JUREK (1995) FLC 92-635).
Finally, s79(2) requires the Court to be satisfied that in all the circumstances, it is just and equitable to make an order.
The issue of superannuation looms large in this matter as a result of value of that financial resource compared to the value of the property available for division. I repeat the observations made by the Full Court in HARRISON (1996) FLC 92-682 when they said:
“It must be said that in most cases a spouse’s entitlement to superannuation is not property and therefore is not capable of any order under the provisions of s79 see CRAPP and CRAPP (1979) FLC 90-615, COULTER and COULTER (1990) FLC
92-104 and MITCHELL and MITCHELL (1985) FLC 92-601. The various attempts which trial judges, in their ingenuity, have made to take superannuation entitlements into account by reference to precise mathematical calculations, although desirable from a practical point of view, nevertheless do not enable or entitle them to include such sums as part of the property of the parties, however calculated.
It follows from what we have said that in most cases the proper approach to be taken by trial judges, when dealing with the parties entitlement to superannuation in Proceedings for alteration of property interest pursuant to the provisions of s79 of the Family Law Act, is to adjourn the proceedings under s79(5) with or without the making of any order under s79(6) or, in the alternative, to treat the superannuation entitlement as a resource pursuant to the provisions of s75(2)(f) or (j).
Section 75(i)(f) provides the Court shall take into account the eligibility of either of the parties for a pension, any superannuation fund or scheme whether the fund or scheme was established or operates within or outside Australia. Section 75(2)(j) requires the Court to take into account the extent to which a party whose maintenance is under consideration has contributed to the income earning capacity, property and financial resources of the other party.”
In this matter, neither party urged me to consider adjourning the matter under s79(5) and both submit, although with different effect, that the parties superannuation entitlements could be fairly adjusted. I accept that judges generally ought not move outside the lines drawn by the parties without inviting the parties to address on the appropriateness or otherwise of so doing (GIBBONS unreported Full Court decision 20 March 1997; GUTHRIE (1995) FLC 92-647).
Counsel, for the wife made three further submissions on the law, namely:
a)That significance should be given to the actual contribution of the wife arising, as I accept, from the gift of land in 1977 to her. Mr Curran says that the land is still “identifiable”, comprising the former matrimonial home. The Full Court has considered the weight that should be given to initial contributions. The concept of the “erosion” of an initial substantial contribution (as stated by FOGARTY, J in MONEY (1994) FLC 92-485 and approved in BREMMER (1995) FLC 92-560) was considered in PIERCE (1999) FLC 92-844 when the Full Court said at 85,881 that:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contribution by a parity with all the other relevant contributions of both the husband and the wife. In considering the weight being attached to the initial contribution, in this case of the husbands regard must be had to the use made by the parties of that contribution.”
b)That I should find that the wife has been subject to consistent domestic violence during the marriage and relies upon KENNON (1997) FLC 92-757, where the Full Court said at 84,294:
“Put shortly, our view is that where there is a course of violence conducted by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon the parties’ contributions to the marriage, or, put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a trial judge is entitled to take into account in assessing the parties respective contributions within s79.”
and further:
“It is essential to bear in mind the relatively narrow band of cases to which these considerations apply. To be relevant, it would be necessary to show that the conduct occurred during the course of the marriage and had a discernible impact upon the contributions of the other party. It is not directed to conduct which does not have that effect and of necessity it does not encompass conduct related to the breakdown of the marriage (basically because it would not have had a sufficient duration for this impact to be relevant to contributions).”
c)In the wife’s case management document, the applicant sought orders “by way of property settlement and lump sum maintenance”. In his final address, Counsel for the wife made an oral application for lumps sum maintenance. He sought to estimate by mathematical calculation, an allowance for the wife’s need for twelve months of periodic support, as a lump sum. Parties to an action are entitled to know the basis of their opponents case. The wife’s application filed on 31 August 1999, did not seek any order for “lump sum maintenance”. Whilst I’m aware of the practice to “bundle in” a claim for lump sum maintenance with a property application, I do not believe that I should allow the wife to do so at this stage in the Proceedings. Clearly many of the factors which might be relied upon in a claim for spousal maintenance are to be considered under s75(2), however the order I make does not include a direct component for “lump sum” maintenance and the wife’s entitlement to claim maintenance (either periodic or lump sum) is preserved.
The evidence
Section 79(4) contributions
The work histories of both parties were not in dispute. The husband had been employed at the time of cohabitation as a tradesman plumber with A Constructions and thereafter, until commencing employment with Local Government, he worked in an Abattoir and also operated his own plumbing and drainage business. I am satisfied that the husband made the significant direct financial contribution to the marriage.
Although I find that the wife was principal home-maker and care-giver to the children, she also made a significant financial contribution during the marriage (even leaving aside the initial contribution comprising the gifted land). This contribution consisted of her employment initially as a dental nurse and part time positions with H C (as a clerk); Factory work; secretarial work at H Holidays; and secretarial work with ESL Designs. Of a more substantial long term nature was the wife’s employment with W S, which commenced in August 1991 and continued until the wife resigned in May 1998. I also accept the wife’s evidence of her work in a small family sewing business known as “S” and her previous work in a sewing and craft business at R. Although the husband says he was “not aware of where the money that the applicant earned was used,” I accept the evidence of the wife that it was contributed to the family expenses during the marriage.
I accept that there were some periods of separation during the marriage, which the wife alleges was precipitated by acts of domestic violence against her by the husband. There is little corroborative evidence of the violence produced. The general evidence of the wife was that she was continually “flogged” and otherwise abused. She also alleged she was subjected to degrading sexual suggestions. The husband denies the allegations, although he does say that :
“In the years towards the end of our marriage the applicant would drink and on those occasions she would become very abusive towards me and would also physically abuse me. I did on a number of occasions retaliate”.
He also admitted hitting her once, but not with a “closed fist”.”
The significant periods of separation appeared to be:
a)September 1987 to December 1987;
b)February 1996 to May 1997; (when a Protection Order was made in I Magistrates Court);
c)September 1997 to Final Separation in March 1999 (with some intermittent periods of co-habitation).
I am satisfied that the home-life was financially difficult throughout and particularly volatile since at least February 1996. The wife, when giving her evidence appeared distressed and uncertain. Her Counsel suggested that I should accept her presentation in the witness box as confirmation of her allegations of systematic abuse at the hands of the husband. Considering the evidence of the wife’s consulting psychiatrist Dr T, coupled with the fact that the parties have been separated since March 1999, it would be dangerous for me to make a diagnosis of this nature urged upon me by the wife’s counsel. I should mention that I have no hesitation in accepting the doctor’s opinion that the wife:
“will not be able to entre (sic) the workforce for twelve months or more.”
I accept the wife’s evidence of her non financial contributions to the maintenance and conservation of the matrimonial property. I also accept that in the difficult and stressful environment which the parties found themselves in this apparently unhappy union, the wife’s contribution where she was essentially combining the care of the children with part time work, was made in more arduous conditions.
I accept that the husband has made a post separation contribution in the form of the discharge of over $11,000.00 worth of joint debt (although he has apparently accumulated further liabilities since these initial payments). I accept that he has made those payments from his income as there did not appear to be any available cash funds at separation. Against this contribution must be weighed against the benefits the husband has enjoyed in the continued occupation of the home (rent free) whilst the wife (after an initial period of co-habitation with her mother) has been required to rent.
Considering all these factors, it is my conclusion they slightly favour the wife and a difference of 5% is justified. Before consideration of the s75(2) factors, I would adjust the property of the parties as to 52.5% to the wife and 47.5% to the husband.
Section 75(2) factors
In this matter I propose to deal with each of the factors identified in section 75(2) sequentially:
A) AGE AND STATE OF HEALTH
The husband is 46 years of age and although his doctors uncontradicted evidence is that he has been treated “for a major depressive illness since April 1999”, he has continued to maintain his employment. The wife is 44 years of age and in her consulting psychiatrist’s opinion, which also was uncontradicted, the wife “is suffering from post traumatic stress disorder”. Relevantly, she says that the wife “is on medication and will not be able to entre (sic) the workforce for 12 months or more”.
B) INCOME PROPERTY AND EMPLOYMENT
The husband says, and I accept, it is his intention to work until he is 65. He regards his current job as secure. His employment restricts his capacity to do small weekend type plumbing jobs in I or neighbouring shires. I am satisfied that the wife is skilled and capable of returning to work in about 12 months time. She has, during her life, demonstrated a strong work ethic and has diversified experience. As she only left clerical employment with W S about 2 years ago, her need for retraining is not as significant as it would have been, had she not been so employed. It is likely that the wife’s income will be less secure and of less gross value weekly than the husband’s. She will however have a more substantial cash fund at her disposal, as a result of these orders, from which she may either derive investment income or assistance in her housing needs. The husband will either have a responsibility for a mortgage or a lesser cash sum available for investment. I propose to deal with the superannuation entitlement in factor (f), however I have considered the impact of the gross benefit from long service leave and holiday pay. To a large extent these benefits will evaporate with time, the husband indicating an intention to have a holiday and take some long service next year. Nonetheless, they still represent a benefit to the husband which accumulated during the marriage. This factor weighs slightly in the wife’s favour.
C),D) and E)not relevant in this matter.
F) ELIGIBILITY FOR PENSION OR SUPERANNUATION
The wife currently receives sickness benefit. The deemed income from the ultimate cash benefit received by the wife will reduce her government assistance. I find however that the wife will, with a conclusion of these proceedings, progress in her recovery from her current illness and not be reliant upon that benefit in the long term. She has a superannuation entitlement at this time of $10,066.00 (gross). I note that this benefit is fully preserved and therefore the wife cannot access the funds until retirement after 55 years. The husband’s current gross benefit is agreed to be $78,000.00. No evidence of the tax incidence was adduced. Of this amount a gross sum of $31,300.00 is unpreserved, which means, according to Exhibit 1 that the husband will be able to take this sum in cash "when you leave local government employment before permanent retirement at any time in the future”. Whilst this is an option open to the husband, his evidence is that he has no intention of leaving his local government employment for 18 years. Counsel for the husband asserted that the difference in the current superannuation entitlements will be less significant after both parties have completed a full working life. I agree that it is unlikely the husband’s superannuation will be worth over 7 times that of the wife’s at retirement, as it is now. However the disparity is, in the context of the financial circumstances of these parties, quite significant and this factor weighs heavily in the wife’s favour.
G) – O) either have been dealt with adequately above or are not in my view particularly relevant in this matter.
Taking all these factors into account, it is my view that a just and equitable result requires the wife to receive, by way of adjustment, an additional 22.5 % of the asset pool.
Just and equitable
My analysis above would mean that the wife would receive 75 % of the asset pool and the husband would received 25 percent of the asset pool. I disregard the debts paid by the husband after separation as they were brought into account in consideration of the contributions under s79(4).
From the asset pool of $100,879, I propose to deduct the value of the backhoe. The backhoe is in the possession of the wife. The husband says he doesn’t want it and that, in any event, it needs repairs and its motor may even have seized. I propose that the parties shall join in its sale and divide the net proceeds as I have some doubt whether a sale price of $7,500 can be achieved on the evidence I received during the trial. This leaves a pool of assets totalling $93,379.
Counsel for the husband says her client seeks to have an opportunity to obtain finance and purchase the wife’s interest in the property. The husband continues to reside in the property. Repairs need to be done to the property, and I believe the husband has the capacity to do them. He acknowledged he had not attended to them to date, because of the uncertainty of these Proceedings.
I am satisfied that the husband has a reasonable prospect at his age, with his employment and his other financial resources and skills of obtaining a loan to acquire the wife’s interest. I will give him eight weeks to make that application and perfect a settlement. If he decides either to abandon his right to acquire and re-finance (or is unable to do so), then the property will be sold and the net proceeds distributed 75/25 in the wife’s favour. Pending any sale, the husband is to be solely responsible for all rates, insurance and changes arising from ownership of the property. The payment to the wife of $64,500.00 is calculated as follows:
a)75% of $93,379.00................................ = $70,034.00
b)Less :
i)B shares ................................................ $800.00
ii)Wife’s chattels..................................... $4,728.00
iii)Sub-Total :......................................... $5,528.00
c)Total :......................................................... $64,506.00
I shall give the parties liberty to relist the matter before me in respect of the terms of these orders or to hear any application for costs.
I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of Baumann FM
Associate:
Date:
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