KHOZA & NKOSI - [2020] FCCA 2908

FEDERAL CIRCUIT COURT OF AUSTRALIA

KHOZA & NKOSI

[2020] FCCA 2908

Catchwords:
FAMILY LAW – Property – undefended hearing – adjustment of property interests – superannuation – in the payment phase – orders made as sought by the applicant wife.

Legislation:

Family Law Act 1975 (Cth), ss.79, 90XT.

Cases cited:

Bevan & Bevan [2014] FamCAFC 19

Black & Kellner [1992] FamCA 2

Carron & Laniga [2019] FamCAFC 115

Chapman & Chapman [2014] FamCAFC 91

Robb & Robb [1994] FamCA 136

Russell & Russell [1999] FamCA 1875

Stanford & Stanford [2012] HCA 52

Teal & Teal [2010] FamCAFC 120

Weir & Weir [1992] FamCA 69

Applicant:

MS KHOZA

Respondent:

MR NKOSI

File Number:

PAC 5188 of 2019

Judgment of:

Judge Obradovic

Hearing date:

19 August 2020

Date of Last Submission:

7 October 2020

Delivered at:

Parramatta

Delivered on:

27 October 2020

REPRESENTATION

Appearing for the Applicant:

Ms Diliberto

Solicitors for the Applicant:

Bell Lawyers

Appearing for the Respondent:

No appearance

ORDERS

That, in accordance with section 90XT(1)(b) of the Family Law Act 1975:
(a)the Applicant Wife (or the Applicant Wife's administrators, executors, beneficiaries, heirs or assigns) is entitled to be paid the specified percentage out of the Respondent Husband's interest in B Superannuation fund;
(b)the Respondent Husband’s entitlement (or the entitlement of such other person to whom a payment may be made out of the Respondent Husband's interest) in B Superannuation fund, is correspondingly reduced by the force of this Order; and
(c)the percentage specified for the purposes of this Order is 75%.
That the trustee of B Superannuation fund do all such acts and things and sign all such documents as may be necessary to;
(a)Calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 the entitlement awarded to the Applicant wife in the immediately preceding clause of this order.
(b)Pay the entitlement whenever the trustee makes a splittable payment from the Respondent Husband's interest in B Superannuation fund.
That this Order has effect from the operative time and the operative time is 7 days after the date of service of this Order upon the trustee.
That the furniture, furnishings and effects presently situate in the container number …67 shall be declared the sole property of the Applicant Wife.
The Respondent Husband must do all acts and execute all documents submitted by the Applicant Wife to transfer to the Applicant Wife the registration and the parties' interest in motor vehicle C.
Unless otherwise specified in these Orders:
(a)Each party be solely entitled to the exclusion of the other, of all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of these Orders and for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank's records thereof, insurance policies are deemed to be in the possession of the beneficiary thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the condition for payment out of such entitlement;
(b)Each party is solely liable for and indemnifies the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
In the event that either party fails, refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, then pursuant to Section 106A, the Registrar or the Deputy Registrar of the Federal Circuit Court of Australia at Parramatta is hereby appointed to execute all deeds, documents and instruments in the name of the defaulting party and to do all such acts and things necessary to give validity and operation to such deeds, documents and instruments.
Remove all outstanding issues from the list of cases awaiting finalisation.

IT IS NOTED that publication of this judgment under the pseudonym Khoza & Nkosi is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT PARRAMATTA

PAC 5188 of 2019

MS KHOZA

Applicant

And

MR NKOSI

Respondent

REASONS FOR JUDGMENT

Introduction

These are the reasons for judgment in respect of an application filed by Ms Khoza (“wife”) on 22 October 2019 and amended on 10 July 2020 seeking final property adjustment orders pursuant to s.79 of the Family Law Act 1975 (“Act”).
The Court made orders on 23 October 2019 for Mr Nkosi (“husband”) to file and serve a Response, Affidavit and Financial Statement within 42 days. The husband has not filed any material nor has he participated in these proceedings.
The matter was heard on an undefended basis against the husband on 14 August 2020 and judgement was reserved.[1]
[1] Noting that the application was re-listed on 17 September 2020, on the Court’s own motion, to raise the issue of s.90XT(2). The applicant was granted leave to file further evidence on this issue and on 7 October 2020 the applicant filed a valuation of the husband’s superannuation interest.
The wife seeks orders in accordance with s.90XT(1)(b) of the Act to receive 75% of the husband’s interest in his B Superannuation fund and that the furniture, furnishings and effects presently held in shipping container …67 be declared the sole property of the wife.

The Law

The overall approach to the determination of an application for property adjustment orders pursuant to s.79 Family Law Act 1975 was set out by the High Court in Stanford v Stanford,[2] where their Honours stated:
[2] [2012] HCA 52; (2012) 247 CLR 108
[37] … first, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property… the question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
…
[40]… whether making a property settlement order is ‘just and equitable’ is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4) …
Such approach was subsequently considered by the Full Court of the Family Court in Bevan & Bevan[3], Chapman & Chapman[4] and Scott & Danton[5].
[3] [2014] FamCAFC 19
[4] [2014] FamCAFC 91
[5] [2014] FamCAFC 203
Once the issue of whether it is just and equitable to make any order is resolved, the Court is to then consider the contributions made by the parties as defined in s.79(4)(a) to (c) of the Act, the matters set out in s.79(4)(d) to (g) of the Act, and in particular the subjective considerations as to the parties by having regard to the provisions of s.75(2) of the Act, in so far as they are relevant.
The Court is then to consider the justice and equity of the actual orders to be made, in the context of the Court’s obligations to make appropriate orders as provided for in s.79(1) of the Act.[6]
[6] see generally Russell & Russell [1999] FamCA 1875; Teal & Teal [2010] FamCAFC 120
The just and equitable requirement is “one permeating the entire process”[7]. Determining whether an order is just and equitable requires the Court to know the assets and liabilities held by each party.
[7] Bevan supra at [86]
Both parties are obliged to make full and substantive disclosure of their financial affairs. [8] Where there is clear evidence of non-disclosure, as is the case in this matter, the Court should not be unduly cautious about making findings in favour of the innocent party.[9]
[8] Black & Kellner (1992) FLC 92-287
[9] Weir & Weir [1992] FamCA 69
Unless a superannuation splitting order is sought, in property settlement proceedings, there is no need to ascertain the capitalised value of a superannuation interest, much less one in the payment phase being paid in the form of a non-commutable pension.[10]
[10] Carron & Laniga [2019] FamCAFC 115 at [36]
The Act, in s.90XT(2), provides that before a splitting order is made, the superannuation interest must be valued.

Factual Findings

The husband was born in Country D in 1951. The husband was previously married and has children from that marriage. The husband migrated to Australia in or around 1991/1992. He worked as a public servant with organisation E and then organisation F. After completing his university studies in 2005, the husband worked as an allied health worker with organisation F. The husband held an interest in a house in City G, Victoria which was subject to a mortgage. After his first marriage ended, the husband became the sole owner of this property following a property settlement between him and his first wife.
The wife was born in Country D in 1962. She was previously married between September 1987 and October 2003. After her divorce, the wife was left with the care of three children from that relationship as well as her niece, whom she had been caring for since she was 19 months old (when the child was orphaned).
In 2004 the wife purchased two blocks of land in Country D worth approximately $8,000. To date, the wife retains her interest in those blocks of land.
In 2006, the wife paid a deposit for a house to be built in City H, Country D. In 2009 after the house had been completed, she purchased the house subject to a mortgage, which she paid off in 2019. The entirety of the mortgage was paid off during the parties’ relationship. The wife retains her interest in that property, the value of which she estimates at $120,000.
The parties married in Country D in 2008. In 2009, the parties adopted the wife’s niece.
At the time of the parties’ marriage, the wife was living and working in Country D. The wife was a healthcare professional in Country D. After the parties’ marriage and until the wife moved to Australia, the husband would travel to Country D on a regular basis to spend time with the wife and her children.
At the time of the parties’ marriage the wife was employed as a manager at the Country D I Organisation. She had a relatively high standard of living, with a “good wage”, subsidised rent and free transport.
The wife remained living and working in Country D until July 2010, when she and two of her children[11] migrated to Australia to live with the husband. The wife became an Australian citizen on 26 January 2016.
[11] Including her niece who had been adopted by her and the husband by this stage
When the wife first moved to Australia, the parties lived in Canberra.
As her qualifications were not immediately recognised, the wife had to obtain verification of her healthcare degree. Her healthcare degree was verified in 2011, and she was then invited to sit the exams, however due to illness she did not undertake the exams.
Since moving to Australia, the wife has remained in full-time employment until recently. The wife was employed by J Organisation between 2011 and 2015, then K Organisation between 2016 and 2018, and finally between 2018 and to early this year, she was employed by the L Organisation. She has been employed on a part-time basis since January 2020 with M Organisation.
In 2012, the wife was diagnosed with a medical condition. This is a chronic condition, which has a significant impact on the wife’s overall health and ability to enjoy life. The condition has recently impacted upon the wife’s ability to work.
Between 2011 and 2013, the parties travelled to City G on at least 4 occasions to clean the husband’s property, attend to repairs and generally make it ready for the incoming tenants. In 2013, the husband’s home in City G was repossessed by the bank and the husband received $80,000 from its sale. The parties agreed that this money would be used to purchase land in Country D.
In 2014, the husband purchased five acres of land in City H, Country D for $22,000. He also purchased an additional two blocks of land in Town N, Country D for $6,000. The parties had agreed that they would build a house and settle on the land in City H after they retired. The parties agreed that they would build blocks of flats on the land in Town N, which would be an income generating asset for them for later in life.
In December 2015 the husband retired and the parties agreed that he would return to Country D to build their retirement home on the land purchased in 2014. It was agreed by the parties that the husband would return to Australia in six months.
Upon the husband’s retirement in December 2015 the husband had $346,000 in superannuation with B Superannuation fund. He received and retained a lump sum of $177,000 and the rest remained as an income stream. Presently, the husband receives a defined benefit payment of approximately $19,000 per annum. The lump sum payment was utilised by the husband to build a house on the land in Country D.
In February 2016, the husband unilaterally packed the parties’ household goods (including two motor vehicles) in a shipping container, arranged for it to be transported to Country D and left Australia. He thereafter stopped communicating with the wife.
In May 2016, the wife moved to Sydney to find work.
The wife’s father passed away in January 2017, and the wife returned to Country D for the funeral. Whilst there, she attempted to contact the husband but was not received well by him.
The wife returned to Country D in 2019 to attend the funeral of her eldest son. Whilst in Country D, the wife managed to speak to the husband. He told her that he needed time to think about things and the wife returned to Australia on 18 April 2019.
On 4 June 2019 the husband telephoned the wife asking for money to return to Australia. The wife sent him $800. On 3 August 2019 the husband returned to Australia and lived with the wife until the end of October 2019.
In late October 2019, the husband advised the wife he wanted to formally separate. The wife agreed to the separation. He has since returned to Country D.
On 23 October 2019, orders were made restraining the husband by injunction from removing the shipping container. The container it appears, had never been shipped to Country D as the storage and moving company had gone bankrupt and the container remained in Australia. One of the vehicles which had been in the shipping container was repossessed, and the other is retained at a storage facility in Suburb O separately to the remainder of the contents of the container.
The wife lives in rented accommodation in Suburb P, Sydney. She has superannuation of $138,000 and remains employed on a part-time basis.
It is the wife’s belief that the land in Country D, now with a 3 bedroom house constructed on it by the husband from the superannuation funds, is worth over $250,000.
During the parties’ relationship the wife’s salary was at all times greater than that of the husband. The wife paid half the rent, she paid for all of the groceries and the children’s expenses, as well as 75% of the bills. The husband’s income was used in part to pay rent, and he also had a liability for child support for his two children from his previous relationship.
Although she worked on a full-time basis, the wife was the primary homemaker and parent. The husband mowed the lawns, made minor repairs around the house and occasionally cooked. The wife was responsible for the majority of the cleaning, cooking and other household tasks, including grocery shopping and doing the laundry. She attended the children’s sporting and school functions. The children were 13 and 11 when they migrated to Australia.
The husband was an elder at Q church, a role in which the wife supported him by attending church regularly, as well as other church functions.

Court’s Determination

The contributions by the wife during the parties’ relationship are assessed as greater than those of the husband. This assessment is made on the basis of:
a)The wife’s greater financial contributions – not only her earnings but the use to which those earnings were put; and
b)The wife’s greater non-financial contributions – her role as parent and homemaker was significantly greater (the parties’ have one adopted child together) and her other non-financial contributions for example to the husband’s property in City G, are all taken into consideration.
There is no evidence of the husband making contributions of the Robb & Robb[12] kind in respect of the wife’s child from her previous marriage who lived with the parties.
[12] Robb & Robb [1994] FamCA 136
The only assets the parties had in Australia were their household and personal belongings, superannuation and the property in City G. The parties did not otherwise accumulate any other assets. They both have assets in Country D, in their respective names, which were by and large accumulated during the parties’ relationship. In respect of the house which the wife owns in Country D, this is an asset which was paid off during the parties’ relationship. In respect of the land and house which the husband owns in Country D, these are assets which were acquired from the sale of the husband’s property in City G and his superannuation.
The wife accepts that the husband was employed and accumulating superannuation for a period of 17 years prior to their marriage. He continued to accumulate superannuation for the next 8 years while the parties were together. There is no evidence as to the value of the husband’s superannuation at various points in time, except at the time of his retirement when he retained a significant lump sum. The present value of the husband’s superannuation interest is $240,981.[13]
[13] Valuation dated 30 September 2020.
The wife does not seek any orders in respect of the parties’ holdings in Country D. The assets of the parties in Australia are essentially limited to the items contained in the shipping container, a motor vehicle and the parties’ respective superannuation. The trustee of the husband’s superannuation fund has indicated no objection to the splitting orders sought by the wife.
The husband has not provided any financial disclosure documents and has not filed any documents in the proceedings. The only evidence before the Court as to the parties’ assets, contributions and other relevant matters is that of the wife. In such circumstances, the Court should not be unduly cautions about making findings in favour of the innocent party.[14]
[14] Weir & Weir [1992] FamCA 69
The husband’s superannuation is in the payment phase.
The wife is of ill-health and has a limited capacity to earn an income due to her health. She has the continued care for her daughter.
Where a member’s benefit is in the payment (pension) phase, and a splitting order is made the non-member spouse becomes entitled to a B Superannuation fund associate pension, in accordance with the B Superannuation fund rules. The associate pension is payable for the life of the non-member spouse, is not commutable, and has no reversionary component.
The orders sought by the wife will provide for the parties to retain property held in their names in Country D, it will provide for the wife to receive a further income stream noting her reduced income earning capacity due to her illness and it will provide for the wife to retain the goods and chattels which were accumulated during the parties’ relationship and which remain in Australia. The orders sought by the wife will ensure that the husband continues to receive an income through his superannuation, albeit a reduced one.
In all of the circumstances of this case, it is just and equitable that orders as sought by the wife are made.

I certify that the preceding fifty-one (51) paragraphs are a true copy of the reasons for judgment of Judge Obradovic

Associate:

Date: 27 October 2020