Kimber and Kimber (No.2)

[2017] FCCA 367

FEDERAL CIRCUIT COURT OF AUSTRALIA

KIMBER & KIMBER (No.2) [2017] FCCA 367

Catchwords:
FAMILY LAW – Final property order – partial property orders made in 2013 – s.79 considerations after husband’s successful s.79A application.

Legislation:

Family Law Act 1975, ss.75(2), 79A(1), (2),(4)

Cases cited:

Stanford v Stanford [2012] 247 CLR 108

Applicant: MR KIMBER

Respondent: MS KIMBER

File Number: LNC 769 of 2011

Judgment of: Judge McGuire

Hearing date: 28 February 2017

Date of Last Submission: 28 February 2017

Delivered at: Launceston

Delivered on: 2 March 2017

REPRESENTATION

The Applicant appeared in person

Counsel for the Respondent: Mr G Tucker

Solicitors for the Respondent: Grant Tucker

ORDERS

1. That within 28 days of the date of these orders the wife pay to the husband a sum of $4,675.

2. That the party’s otherwise be entitled to the exclusion of the other to their own superannuation policies and entitlements.

3. That otherwise each party be solely entitled to the exclusion of the other to all property of whatsoever nature and kind currently in the possession or control of that party as at the date of these orders.

4. That each party be solely liable for and indemnify the other in respect of the following:

   (a)Any and all liabilities attaching to any of the assets to be retained by that party pursuant to these orders or the partial property settlement orders of 26 August 2013;

   (b)Any and all liabilities incurred by that party since separation in either joint names or that party's name alone.

5. That pursuant to Section 81 of the Family Law Act 1975 the parties intend that these Orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.

IT IS NOTED that publication of this judgment under the pseudonym Kimber & Kimber (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT LAUNCESTON

LNC 769 of 2011

MR KIMBER

Applicant

And

MS KIMBER

Respondent

REASONS FOR JUDGMENT

1. These are proceedings for property settlement.

2. These reasons are to be read in conjunction with my reasons of 15 December 2016 and the orders of His Honour Judge Roberts made 26 August 2013 when his Honour made consent orders for partial property settlement which unambiguously dealt with the tangible assets of the parties as they then stood or were disclosed as standing.

3. A notation was made to his Honour’s orders on that day as follows:

   [19] That it is the intention of the parties that there be a superannuation split from the husband’s scheme being (omitted) Superannuation ((omitted)) to the wife in the sum of $24,000.00.

4. There was a further notation noting a child support debt of the husband of $4,000 which was to be factored into the superannuation split. I am advised that the wife has waived that debt and hence is Honour’s order could be read as the parties agreeing for a superannuation split from the husband's scheme in the sum of ‘$20,000'.

5. This matter came before me in late 2016 and on 15 December 2016 I acceded to the husband's application to vary his Honour’s orders pursuant to section 79A of the Family Law Act 1975 on the basis of non-disclosure by the wife.  Further, the party's superannuation entitlements had not by that stage been dealt with pursuant to any final orders.

6. My reasons of 15 December 2016 note the parties property pool in the nature of tangible assets in 2013 having an agreed value of approximately $450,000 net where proper, full and accurate disclosure of the wife would have seen an additional $19,013 added to the pool and all of which was in the possession of the wife.

Issues

1. There are two discrete issues left now from my determination:

   a)Firstly there an issue as to how the Court should deal with the additional sum of $19,013?

   The husband says that it should simply be included in the pool and divided in accordance with the agreed division of other tangible assets by his Honour at 60% to the wife and 40% to the husband.  Mr Kimber also seeks interest at 3% for the 3.5 years since the making of his Honour’s orders on what would have been his proper entitlement.  I calculate 40% of $19,013 to be $7,605.  Interest at 3% for 3.5 years would bring the total amount sought by Mr Kimber to $8,435.

   The wife says that the Court should disregard the additional $19,030 by reason of part of those monies, in the very least, being as the result of post-separation contributions by her.  For example, the wife failed to disclose a tax return entitlement.  If the Court should be against the wife on this argument then counsel argues that any further entitlement of the husband should be set-off within any superannuation split.

   b)The Court must deal with the party’s superannuation entitlements where for these purposes superannuation is to be 'treated as property'.

   The husband says that each party should retain their own current entitlements and this would give justice and equity to the intention of the parties as set out in his Honour’s notation of 26 August 2013, which, save for the errors in the wife's disclosures, the parties agree that:

   i)The wife disclosed in her financial statement sworn 21 August 2013 that she had superannuation entitlements totalling $60,800;

   ii)The wife's actual entitlement as of that date was $85,290;

   iii)The intention of the parties as of 26 August 2013 was that the wife would receive 40% of the total superannuation entitlements of the parties on the husband would receive 60% (the husband says that this division was agreed so as to give the wife a higher proportion of the tangible assets and he a higher proportion of the superannuation and so as to allow the wife to retain the home).

   The wife says that there should be equality of superannuation entitlements and a division in the form of a flagging or splitting order from the husband's entitlement accordingly.  Counsel for the husband leaves it for the Court to determine whether the values of the superannuation entitlements are as of the date of this hearing, the date of separation 2011, or the date of the partial property settlement orders in August 2013.

2. The wife's entitlements to superannuation are comprised in accumulation funds whereas the husband has a defined benefit policy which is not yet in the payment phase. 

Relevant Law

1. Matters of property settlement are provided for in section 79 of the Family Law Act. Sub-section (1) states that the Court may make such order as it to considers appropriate whereas s79(2) provides that the Court shall not make an order under this section unless it is satisfied that it is just and equitable to do so.

2. It is well-established[1]that ordinarily the Court will first determine the party’s rights in law and equity to property as at the date of the hearing and then attribute value to that pool. 'property' includes assets, liabilities and financial resources.

   [1] Stanford v Stanford [2012] 247 CLR 108

3. If the circumstances of the parties and the property justify an alteration of their legal interests then the Court is to consider the various contributions set out broadly in s79(4) of the Act and then any further adjustments by reason of consideration of the relevant factors set out in section 75(2). Importantly, it is the orders themselves then that must be just and equitable.

Consideration

1. The factual platform here is unusual.  It is clear that his Honour anticipated dealing with the matter finally by consent orders but that on 26 August 2013 the Court was not appraised of all details or valuations of the husband's superannuation entitlement and/or did not to have evidence of procedural fairness on the relevant superannuation fund(s).

2. I am satisfied that these parties intended to divide their tangible assets as to a net 60% to the wife and a net 40% to the husband. 

3. I am also satisfied that the parties intended to divide their total superannuation entitlements as to a net 60% to the husband and 40% to the wife and I generally accept the husband’s submission as to the rationale of these divisions.

4. I am comfortable in finding that the parties reached agreement as to a 60/40 division of the assets on the basis of a multitude of contribution considerations. I also emphasise that there was included a consideration of the wife retaining the former matrimonial home and that this was an element in the ultimate agreement as to a percentage distribution.  Being mindful that it is not the function of this Court to conduct a precise mathematical exercise in altering property interests of parties and not having any detailed actuarial evidence of any precision as to the proportions of post-separation contributions by either party or, more particularly, by the wife to the total sum of $19,013 now to be added to the pool, I am equally comfortable in a 60/40 distribution of net tangible property as doing justice to the considerations for the Court and the factors in encouraging these parties’ agreement as of 26 August 2013. That is, I prefer that any post-separation contributions of the wife to those items not disclosed by her in her trial material to be 'consumed' in the melting pot of considerations leading to her receiving 60% of the pool of tangible property.

5. I therefore find that the husband should receive 40% of the $19,013 added to the pool which I calculate to be an entitlement of $7,605.  I also find that the husband should be entitled to an interest component.  This was an entitlement that he should and would have had the benefit of in real form as from August 2013.  He therefore suffered the loss of use and benefit of these monies by reasons of the wife's non-disclosure.  He should not, therefore, in my view be put to any theoretical or actual detriment as to his entitlement.  I note that the interest rate sought by the husband is, in any event, significantly less than referenced in the Family Law Regulation.  In all of the circumstances, I believe it reasonable that the husband should have interest on his entitlement leaving at an amount owing to him of $8,435.

6. Secondly, technically the values of superannuation entitlements should be taken as at 'the date of the hearing, it is uncontroversial that I would then have to consider, calculate and weigh the post-separation contributions of each party to their own particular funds.  In a logical sense, the adjustment value should therefore, approximate the value of the parties funds as at the date of separation where any post-separation contribution by each to the other’s policy would be negligible in a context where both parties were included.

7. Further, I am satisfied that these parties themselves had reached a consensus as of August 2013 that their total entitlements would be divided as to 40% the wife and 60% to the husband where superannuation was to be treated as a ‘separate pool’ although, of course, there was some connection by reason of the wife receiving a greater proportion of her entitlement in tangible asset and the husband's greater proportion in superannuation pursuant to my findings are set out above.  I consider therefore that justice and equity is afforded these parties by acknowledging their agreement and intention noted in his Honour's orders but in making adjustments so as to include the actual values of the party’s superannuation entitlements as of 26 August 2013 where the husbands entitlement remains as disclosed at $137,336 but the wife's entitlement increases from $60,800 to $85,290.

8. Consequently, I calculate the total superannuation entitlements of the parties as of 26 August 2013 to be $222,626.  The wife is to receive 40% which I calculate at $89,050.  She retained her then entitlement of $85,290.  This would leave her entitlement by way of splitting or flagging order from the husband's superannuation of only at $3,760.  Where the costs of the parties splitting or flagging such an entitlement would be more than it is worth, I accept the submission of the wife's counsel that there be a 'set-off'  with the husband's entitlement for a cash payment of the wife in the sum of $8,435 being set-off against the wife's entitlement of a superannuation split/flag of $3,760 resulting in the wife making a payment to the husband of $4,675 and each party keeping their own superannuation entitlements to the exclusion of the other.

I certify that the preceding nineteen (19) paragraphs are a true copy of the reasons for judgment of Judge McGuire

Date:  2 March 2017