Lim & Lee

FAMILY COURT OF AUSTRALIA

LIM & LEE

[2008] FamCA 546

FAMILY LAW – PROPERTY SETTLEMENT – value of asset pool – add backs – parties agree contributions equal – 5% adjustment in favour of wife due to s 75(2) factors – asset pool divided 55%/45% in favour of wife.

FAMILY LAW – PROPERTY SETTLEMENT – whether proposed orders just and equitable – husband has no funds to meet necessary payment to wife – superannuation entitlements represent husband’s greatest asset – outcome would not be just and equitable – consideration of how inequity to be addressed – Woollams and Woollams (2004) FLC 93-195 cited – husband to pay wife by monthly payments over 11 months – security for payment – charge registered over husband’s superannuation entitlements.

FAMILY LAW – CHILD SUPPORT – arrears of child maintenance – amount of future child maintenance – husband has no income – offer by husband – husband to pay $250 per week per child and arrears.

Family Law Act 1975 (Cth) ss 66B, 66C, 66H, 66J, 66K & 79

C & C (2005) FLC 93-220
Hickey and Hickey & Attorney General of Australia (Intervener) (2003) FLC 93-143
Beneke and Beneke (1996) FLC 92-698
JEL and DDF (2001) FLC 93-075
Phillips and Phillips (2002) FLC 93-104
Omacini and Omacini (2005) FLC 93-218
Woollams and Woollams (2004) FLC 93-195
H and H (2003) FLC 93-168
Mallet v Mallet (1984) FLC 91-507

APPLICANT:

MR LIM

RESPONDENT:

MS LEE

FILE NUMBER:

ADF

1673

2005

DATE DELIVERED:

24 APRIL 2008

PLACE DELIVERED:

ADELAIDE

PLACE HEARD:

ADELAIDE

JUDGMENT OF:

BURR J

HEARING DATE:

16 – 18 and 22 -25 JANUARY 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT:

MRS WEST

SOLICITOR FOR THE APPLICANT:

DENISE M RIENIETS & ASSOCIATES

COUNSEL FOR THE RESPONDENT:

MS MOROSINI

SOLICITOR FOR THE RESPONDENT:

DI MOROSINI & ASSOCIATES

Orders

That on or before Thursday 1 May 2008 the husband do pay arrears of child maintenance calculated to the end of March 2008 in the sum of TEN THOUSAND FIVE HUNDRED DOLLARS [$10,500.00].
That as and from Tuesday 1 April 2008 the husband do pay child maintenance at the rate of TWO HUNDRED AND FIFTY DOLLARS [$250.00] per week for each of the children S born … March 1991 and L born … February 1997.
That in full and final settlement of issues of property settlement between the parties:-
(a)    The husband do pay to the wife the sum of ONE HUNDRED AND NINE THOUSAND THREE HUNDRED AND THIRTY EIGHT DOLLARS [$109,338.00];
(b)    The husband do pay the amount referred to in paragraph 3(a) of these Orders by way of capital payments on account of property settlement at the rate of TEN THOUSAND DOLLARS [$10,000.00] per calendar month, with the first such payment to be made on or before 1 June 2008 and subsequent payments to be made on the 1^st day of each calendar month thereafter until such time as the amount has been discharged in full.
(c)    The husband do forthwith transfer to the wife at the wife’s expense in all respects all that his right, title, estate and interest both at law and in equity in the property situated at B in the State of South Australia (“the former matrimonial home”) PROVIDED THAT if the husband shall refuse or neglect to execute a Memorandum of Transfer in properly registrable form of his right, title, estate and interest in the said property to the wife within seven [7] days after the same shall have been tendered to him by or on behalf of the wife for that purpose then and in such case a Registrar of the Family Court of Australia upon proof by affidavit of such refusal or neglect is hereby appointed to execute and if in his or her opinion it shall be necessary so to do, to do all such other acts and things and to execute such other documents as shall be necessary to give full force and effect thereto and shall execute and do the same accordingly.
(d)    The wife do hereafter duly pay and discharge to the exoneration of the husband all mortgage instalments, rates, taxes and other outgoings in relation to the former matrimonial home property and do indemnify the husband against any liability in relation to any such payments.
(e)    The husband do hereafter duly pay and discharge to the exoneration of the wife all amounts due and owing by the husband to:-
(a)the husband’s brother;
(b)the Inland Revenue Authority of Singapore;
and do indemnify the wife against any liability in relation to any such payments.
(f)    The net balance of any sale proceeds in relation to the jointly owned property at W in Singapore to be sold pursuant to paragraph 1 of the Orders made in these proceedings on 18 January 2008 be distributed as to 55% in favour of the wife and 45% in favour of the husband.
(g)    The husband’s estate and interest (if any) both at law and in equity in the following be and the same are hereby vested in the wife:-
(i)the wife’s personal effects, clothing and jewellery;
(ii)the furniture and household effects in the wife’s possession;
(iii)the wife’s 2003 Ford Falcon station wagon motor vehicle;
(iv)the wife’s ANZ and Bank SA accounts;
(v)the wife’s surrendered insurance policies;
(vi)the wife’s Standard Chartered investment fund account;
(vii)the wife’s Singapore Club membership;
(viii)the wife’s CPF superannuation fund entitlements;
(ix)the wife’s / children’s bank accounts;
(x)55% of any net sale proceeds in relation to the aforesaid jointly owned property at W in Singapore pursuant to paragraph 3(f) of these Orders.
(h)    The wife’s estate and interest (if any) both at law and in equity in the following be and the same are hereby vested in the husband:-
(i)the husband’s personal effects, clothing and jewellery;
(ii)the furniture and household effects in the husband’s possession;
(iii)the husband’s interest in the property at S in Singapore;
(iv)the surrender proceeds and values of the husband’s insurance policies;
(v)the husband’s net redundancy payment from T Company;
(vi)the husband’s Bank SA account;
(vii)the husband’s OCBC account;
(viii)the husband’s CPF superannuation fund entitlements;
(ix)45% of any net sale proceeds in relation to the aforesaid jointly owned property at W in Singapore pursuant to paragraph 3(f) of these Orders.
(i)     Save and except as otherwise specified in these Orders, henceforth each party shall discharge without calling upon the other to contribute thereto the debts and liabilities contracted by them and henceforth each party is restrained and an injunction is hereby granted restraining the parties and each of them from pledging the credit of the other.
(j)     By way of security for the payment by the husband of the settlement sum ordered in paragraphs 3(a) and (b) hereof, at the husband’s expense in all respects the parties do forthwith jointly execute a charge to be registered with the husband’s CPF Superannuation Fund trustee upon the husband’s entitlements pursuant to that CPF Fund, which charge shall remain in place until payment in full of the aforesaid settlement sum PROVIDED THAT if either party shall refuse or neglect to execute such charge within seven [7] days after the same shall have been tendered to him or her by or on behalf of the other party for that purpose then and in such case a Registrar of the Family Court of Australia upon proof by affidavit of such refusal or neglect is hereby appointed to execute and if in his or her opinion it shall be necessary so to do, to do all such other acts and things and to execute such other documents as shall be necessary to give full force and effect thereto and shall execute and do the same accordingly.
That all applications be otherwise dismissed and removed from the pending list.

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

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADF 1673 of 2005

MR LIM

Applicant

And

MS LEE

Respondent

REASONS FOR JUDGMENT

The Applications

I have before me for my determination disputed issues between the parties as to matters of property settlement and child maintenance.
At the commencement of the trial, the parties were also unable to agree on other issues pertaining to their two children S born in March 1991 and L born in February 1997. However, by the conclusion of the first day of the trial, save and except for the issue of child maintenance, they had agreed all matters impacting upon the children and I recorded consent Orders on that day. At the conclusion of the trial proceedings the wife indicated that she did not seek any amount for spousal maintenance nor did she seek to recover alleged arrears.

Background

It will not be necessary for me to be particularly expansive in relation to the parties’ backgrounds as by the conclusion of all evidence they were able to agree their contributions as having been equal. The main issues remaining for my determination are as to the issue of child maintenance and the weight that should be given to relevant Section 75(2) factors. Even then, the parties ended up being only 5% apart. The wife sought a loading of 10% for Section 75(2) factors and the husband proposed that she should receive 5%.
The husband and the wife are approximately of the same age, turning 40 years this year. The husband was born in Asia and the wife in Singapore. They were married in November 1990 in Adelaide where they had met whilst studying. They separated some 14 years later in December 2004.
Their two children, in respect of whom they have reached agreement, were born in 1991 and 1997.
The husband has effectively always worked overseas. Initially in 1992 he secured employment in Indonesia but essentially the whole of his working life has been in Singapore. At the end of 1993 the wife and the child S moved to Singapore to live with the wife’s mother where the husband subsequently joined them. The family of three then moved to Indonesia for about a year.
In approximately 1995 the wife and S returned to Singapore for some six months before the husband joined them after concluding his employment in Indonesia. At the end of 1996 the parties and S moved back to Adelaide and in February 1997 their daughter L was born.
In April 1997 the family again moved back to Singapore for the husband to pursue his employment. The parties again resided with the wife’s mother. At the end of 1997 the family again moved to Indonesia by reason of the husband’s employment but in 1998 returned to Singapore where they purchased a government apartment funded through the husband’s superannuation fund.
In 2003 the parties determined that they would move permanently to Australia and sold the apartment. They purchased another apartment for investment purposes, again funded through the husband’s superannuation fund with some funds being contributed from the sale of the first apartment. They migrated to Australia with the children on 27 December 2003 and in January 2004 purchased the former matrimonial home property at B.
During 2004 the husband continued to work in Singapore and commuted between Adelaide and Singapore on a regular basis. He provided $7,000 per month to the wife to cover all expenses including mortgage payments, utilities, children’s school fees and general living expenses.
In December 2004 the parties separated with the wife continuing to reside in the former matrimonial home with the children and the husband continuing to work in Singapore. When he did visit Adelaide he stayed in the wife’s premises until November 2005 when Judicial Registrar Forbes made orders that the wife and the children exclusively occupy the former matrimonial home. From that time the husband reduced the maintenance payment to the wife from $7,000 per month to $2,600 per month. The wife contends that she borrowed money from her family to meet shortfalls.
On 20 April 2006 Senior Registrar Kelly ordered the husband to pay to the wife child maintenance of $925 per week and spousal maintenance of $570 per week. That order was reviewed by Strickland J on 5 July 2006 when his Honour ordered that the husband pay child maintenance of $900 per week and spousal maintenance of $550 per week.
On 2 December 2006 the parties were divorced by order made in the Federal Magistrates Court.
In May 2007 the husband filed an application to suspend Strickland J’s orders for maintenance and unilaterally reduced the amounts of maintenance he was paying. Some payments he missed completely.
The husband contends that his employment with T Company was terminated effective 31 May 2007 and for that reason he was unable to continue maintenance payments. At that time he received a termination payment of SGD$218,272 gross. He alleges that he repaid his brother an amount of US$20,000 and invested SGD$119,000 in a joint venture business with his brother.
On 1 June 2007 the husband signed an option to purchase a penthouse at S in Singapore for SGD$1,011,120. He settled on that penthouse and he and his partner Ms N became the registered proprietors on 28 September 2007.

The evidence

Each of the parties relied on the identified affidavits filed by them and each gave evidence in support of their applications. Neither called evidence from any other person.
There were unsatisfactory elements about the evidence of both parties. Neither party was completely honest with the Court and thus I am not able to make a finding that as a general principle I prefer the evidence of one over the other. Where matters of credit loom large in my determination of the issues, they are identified at the appropriate time.
This was a difficult matter to try as there were significant areas where a lack of preparation and exchange of necessary pre-trial information was obvious. Documents which should have been exchanged many months beforehand were only located and exchanged during the course of the trial proceedings. Both parties were guilty of failing to fully and frankly disclose their financial position prior to the trial and various acknowledgements and admissions were made very late in the piece.
The lack of appropriate preparation may well not have been the fault of the parties’ legal representatives. There was obvious prevarication and avoidance in the evidence and the approach of both parties. The level of distrust between them was obvious and clearly infected their approach to one another and to these proceedings.

Assets, financial resources and liabilities

The parties were able to agree the vast bulk of the assets, financial resources and liabilities as follows:-
Assets (agreed)
a)Former matrimonial home at B (equity)  $156,150.00
b)Wife’s 2003 Ford station wagon motor vehicle  $14,000.00
c)Husband’s Bank SA account  $3,700.00
d)Husband’s OCBC account  $3,724.00
e)Wife’s ANZ / Bank SA accounts  $1,080.00
f)Wife’s Manulife and NTUC insurance policies
(total surrender value)   $14,337.00
g)Wife’s Standard Chartered Investment Fund account  $327.00
h)Wife’s Singapore club membership  $1,330.00
i)Wife’s CPF superannuation entitlements  $11,654.00
j)Husband’s CPF superannuation entitlements  $250,000.00
$456,302.00
The parties were content for me to deal with their superannuation entitlements as part of a single stage process. They did not wish me to separately identify them and make separate findings on matters of contribution and Section 75(2) factors. (C and C (2005) FLC 93-220).

Matters not agreed

Matters which were not agreed and which require my determination are as follows:-
23.1The husband’s insurance surrender proceeds.
(a)The parties are not able to agree as to the manner in which I am to treat the surrender proceeds and values of several insurance policies that the husband held.
(b)He admitted surrendering one or two policies in February 2006 for which he received SGD$20,000. His Financial Statement filed on 8 February 2006 makes no reference to any insurance policy, only an unnamed investment of $20,000. He said that he used the surrender proceeds to pay maintenance to his wife and children and other costs. Using the currency conversion rate of 1.25 agreed between the parties (Exhibit 26), that equates to AUS$16,000.
(c)In his Financial Statement filed 28 August 2007 the husband did not declare an interest in any other insurance policy (Item 39). However, in his Financial Statement filed on the first day of trial, namely 16 January 2008, he disclosed two policies held with NTUC. During the trial proceedings the husband secured surrender values for those policies being a total of SGD$17,218 (Exhibit 3). That converts to an amount of AUS$13,774.
(d)The husband argues that these various surrender amounts totalling AUS$29,774 ought not be added to the asset pool for division between the parties. He maintains that two of the policies were surrendered during his period of unemployment and that he needed those moneys to pay legal costs, supplement his income and to meet his living expenses. However, in my view the insurance policies fall into the same category as the purported children’s bank accounts which are dealt with below (Exhibit 20) in the sense that both assets were accumulated during the parties’ relationship from moneys earned during that relationship (vide paragraph 23.4). Those policies were not the husband’s to do with as he wished. They constituted an asset which is to be brought to account in the resolution of the property issues between the parties.
(e)The parties purported to agree the surrender value of the two latter policies and nominated a figure of $14,562. However, analysis of Exhibit 3 demonstrates that this figure represents the surrender value in Singapore dollars for just one of the two policies. The value of both in Singapore dollars is SGD$17,218 and thus in Australian dollars is $13,774 (paragraph 23.1 (c)).
23.2The husband’s redundancy payment.
(a)The wife contends that the relevant amount for my consideration is AUS$161,000 being the agreed gross payment less the tax liability on same. The husband contends that its present value, namely the value of his investment in the business with his brother, is the figure that I should adopt, that figure being $92,600.
(b)It is my view that the full $161,000 ought not to be brought to account as a notional add back or as an asset being retained by the husband. There are appropriate deductions that ought to be made from that figure in order to arrive at the proper sum which ought to be brought to account and they are:-
(i)The husband’s employment with T Company was terminated on 31 May 2007. Annexure “C” to the husband’s affidavit filed on 6 July 2007 is a letter detailing the termination arrangements in relation to the husband’s employment. Attached to that letter is a document entitled “Financial Projection”. What is clear from that projection is that an amount of SGD$14,469 is salary for the monthly period ending 31 May 2007 and thus does not constitute part of the redundancy payment. Nor does the amount of SGD$3,000 for his car / transport allowance for the monthly period ended 31 May 2007 constitute part of the redundancy payment. Thus an amount of SGD$17,469 is to be deducted from the total net figure after tax.
(ii)Exhibit 16 is a copy of two Inland Revenue Authority of Singapore statements dated 19 May 2006 and 3 April 2007. The statements detail the husband’s taxation liabilities for each month from June 2006 to March 2008 inclusive. It was agreed, and as is evidenced by Exhibit 16 itself, that the husband’s liability for income tax arises in respect of previous taxation years. I accept that from the husband’s redundancy payment he has made and is due to make taxation payments totalling SGD$24,828 commencing May 2007 and concluding with the payment for April 2008. Thus that further figure of SGD$24,828 needs to be deducted from the redundancy payment to arrive at the true and accurate net result benefitting the husband.
(iii)I further find that the husband paid the ordered maintenance of AUS$1,450 per week for the month of June 2007. He was not employed at that time and the moneys came from his redundancy payment. Thus as the wife received the benefit of maintenance from the first month of the husband’s redundancy it is appropriate that his monthly salary of a further SGD$14,469 be deducted from the husband’s redundancy payment to arrive at an appropriate net figure.
(iv)Whilst the husband unilaterally took the decision not to abide the maintenance Orders made by this Court after June of 2007, I accept that he was unemployed from 31 May 2007. Whilst he did not meet his obligations pursuant to the Court Order, he did for a period of some additional 12 weeks after July 2007, pay maintenance of AUS$700 per week being a total of AUS$8,400. That converts to SGD$10,500. As those payments were also made from his redundancy moneys, as he had no other income, I am further satisfied that it is a legitimate deduction to be made as against the redundancy amount.
(v)The agreed figure for the husband’s Bank SA account is $3,700. That balance is reflected in Exhibit 24. I accept the husband’s evidence that the deposits made into that account in order to provide that balance, also came from his redundancy payment. That converts to SGD$4,625. That amount is a further deduction to be made against the redundancy payment.
(vi)Thus the appropriate net amount to be added to the asset pool is as follows:-
A.     Financial projection total redundancy
payment  SGD$218,272
LESS
B.     Salary and car allowance
for May 2007                   SGD$17,469
C.     Taxation payments paid
and dueSGD$24,828
D.     Additional month when
maintenance paid             SGD$14,469
E.     Additional child
maintenance paid             SGD$10,500
F.      Amount of redundancy
reflected in husband’s
Bank SA account                SGD$4,625     SGD$71,891
E.     Net total  SGD$146,381
(c)That converts to a figure of AUS$117,105. That is the figure to be added to the asset pool for division between the parties.
23.3The value of the wife’s furniture and contents.
(a)The husband says that they have a value of $4,500 as nominated in the Financial Statement filed by the wife on 24 August 2007. The wife does not challenge the value but contends that the value of her furniture and contents ought to be set off as against the furniture and contents in the possession of the husband in Singapore.
(b)In his Financial Statements filed on 28 August 2007 and 16 January 2008 the husband disclosed at paragraph 42 that he estimated the value of the furniture and effects in his possession to be approximately $50. Prior to trial the wife sought no independent valuation of the furniture and effects in the husband’s possession. In his evidence the husband said that he and his partner Ms N had purchased some limited new furniture for their new premises and that the furniture from the jointly owned apartment would almost certainly be disposed of as having no value.
(c)I accept the husband’s evidence and believe that it is appropriate to attribute a nil value to the furniture which is or was in the husband’s possession and to bring to account the wife’s furniture and contents at the agreed figure of $4,500.
23.4Wife’s / children’s bank accounts.
(a)Part of Exhibit 20 is comprised of copies of bank passbooks stated to have been held jointly by the wife and each of the two children with OCBC Bank. Both accounts were closed by the wife on 22 December 2005. The closing balance for S’s account was an amount of SGD$18,432 and for L’s account, an amount of SGD$18,487, being a total of SGD$36,919. That amount equates to AUS$29,535.
(b)The wife contends that the total amount of $29,535 withdrawn by her belongs to the children and should not constitute part of the asset pool for division.
(c)However, I do not agree. The arrangement throughout the parties’ relationship was that the husband forwarded a significant proportion of his Singapore earnings to the wife in Australia. She was the financial manager for the family. The only possible source of the moneys contributed to the children’s accounts was the moneys forwarded by the husband. I do not accept the wife’s evidence that the moneys were accumulated from New Year’s and other gifts given to the children.
(d)It was the husband’s evidence, which I accept, that he was not aware that the wife had established those accounts for the children and then accumulated those funds, until quite recently.
(e)The wife transferred the aforesaid amounts to accounts in her own name and to her sister’s account. I therefore deem it appropriate to add to the asset pool for distribution between the parties the sum of $29,535.
23.5Husband’s debt to brother.
(a)The husband alleges he still owes his brother the sum of $28,000.
(b)Counsel for the husband argued that an earlier debt due by the husband to his brother of US$20,000, ought also to be deducted from the gross redundancy figure in order to arrive at an appropriate net result. It was the husband’s evidence, which I accept, that he had no income after 31 May 2007 and needed to borrow from his brother to meet living expenses. However, I further accept the quite clear evidence that the wife borrowed significant amounts from her sister in order to meet living expenses and provide additional support for the children and the household generally particularly at a time when the husband was not making any maintenance payments. (See Exhibit 29). The wife has not sought that those amounts borrowed from her sister be brought to account in the property settlement proceedings. In my view it is therefore not appropriate to bring to account the debts the husband repaid or are due to his brother.
23.6Taxation liability.
(a)The husband asks that an estimated tax liability for the 2007 completed financial year be taken into account. That figure is $23,000 and includes an amount of $6,000 still due and payable for the 2006 completed financial year.
(b)Exhibit 16 makes it plain that the husband is still to be assessed as to his taxation liability to the Inland Revenue Authority of Singapore for the 2007 year of assessment. Thus clearly the husband has a liability for taxation on the income earned by him until the termination of his employment on 31 May 2007. It was the husband’s evidence that the Singaporean tax year is from 1 January to 31 December in each year. Thus he will be assessed to pay tax on 5 months of earnings from 1 January 2007 to 31 May 2007. It was his estimate in evidence on advice from his accountant that his tax liability for that period would be SGD$18,677, which converts to AUS$14,942.
(c)He further sought to have deducted a balance of two payments still due by him for the 2006 completed financial year. However, I have already made an allowance for those payments as against his redundancy payment by deducting the amounts paid and still to be paid as detailed in Exhibit 16. Thus the total additional deduction from the net asset pool as against the net assets to be retained by the husband, is an amount of AUS $14,942.
23.7Arrears of child maintenance.
(a)The wife contends that the arrears as at the date I reserved Judgment were $12,000. The husband maintains the figure at that time to be $8,000.
(b)Recognising in the end that apart from his redundancy the husband had no income from 31 May 2007 and that it would be inappropriate that she continue to receive spousal maintenance, the wife sensibly abandoned her claim for arrears of spousal maintenance. However, the husband conceded that he still needed to support his children and that he had not done so since October 2007. That was the last time that he paid any child maintenance. Arrears have accrued at the rate of $900 per week which was the amount ordered by Strickland J on 5 January 2006. To the end of March 2008 which is a period of 21 weeks, the arrears of the husband amounted to $18,900.
(c)However, for the reasons expressed below in my determination of what is an appropriate amount for future child maintenance, I believe the arrears realistically and appropriately ought to be calculated at the rate of $500 per week. That would mean the arrears due by the husband to the end of March 2008 would be $10,500. He should pay that amount.
23.8Future child maintenance.
(a)A further issue as to child maintenance is as to the amount that the husband should pay henceforth. He has offered an amount of $500 per week. The wife seeks a figure of $800 per week.
(b)What might be an appropriate amount for maintenance and whether or not it is appropriate to make an order at all is governed by Division 7 of Part VII of the Family Law Act. The husband does not earn assessable income in Australia and hence the application of those provisions to the circumstances of this case.
Section 66B
Objects
(1)The principal object of this Division is to ensure that children receive a proper level of financial support from their parents.
(2)Particular objects of this Division include ensuring:
(a)     that children have their proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both of their parents; and
(b)     that parents share equitably in the support of their children.
Section 66C
Principles – parents have primary duty to maintain
(1)The parents of a child have, subject to this Division, the primary duty to maintain the child.
(2)Without limiting the generality of subsection (1), the duty of a parent to maintain a child:
(a)     is not of lower priority than the duty of the parent to maintain any other child or another person; and
(b)     has priority over all commitments of the parent other than commitments necessary to enable the parent to support:
(i)     himself or herself; or
(ii)any other child or another person that the parent has a duty to maintain; and
(c)     is not affected by:
(i)the duty of any other person to maintain the child; or
(ii)any entitlement of the child or another person to an income tested pension, allowance or benefit.
(c)At paragraph 60 on pages 11 and 12 of her Financial Statement filed on 24 August 2007, the wife deposes to costs incurred by her in the care and maintenance of the children as being a total of $1,285 per week. By the conclusion of the evidence, the wife did not seriously contend that the husband had an identifiable income stream. It was his evidence that it was probable that the business in which he is engaged with his brother is likely to begin earning income in approximately June of 2008. He has offered $500 per week.
(d)Sections 66H, 66J and 66K outline the approach to be taken in the determination of child maintenance proceedings. However, the exploration of those factors is very much confined by the fact that the husband has no income. He relies on his brother’s generosity for his daily living and other expenses. In her Financial Statement filed 25 August 2007, the wife too deposes to the fact that she has no income relevant to my determination.
(e)In terms of the parties’ respective capacities to pay, I am left only with the amount the husband has offered. That amount of $500 per week therefore should be his contribution to the children’s maintenance. The wife’s contribution will be the balance.
(f)Having calculated arrears to the end of March 2008 and ordered that he pay same, it would be appropriate to order that the $500 per week commence from 1 April 2008.
(g)In order to avoid potential future litigation between the parties and because of the 6 year age difference between the two children, I deem it appropriate to order that the maintenance be paid as $250 per week for each child.

Summary of assets, financial resources and liabilities

Thus the net assets and resources pool for distribution between the parties is as follows:-
24.1Agreed assets and resources (paragraph 21)  $456,302.00
24.2Husband’s surrendered and other insurance policies
(paragraph 23.1)  $29,774.00
24.3Husband’s redundancy payment (paragraph 23.2)                  $117,105.00
24.4Wife’s furniture (paragraph 23.3)  $4,500.00
24.5Wife’s / children’s bank accounts (paragraphs 23.4)               $29,535.00
$637,216.00
Less
24.6Husband’s taxation liability  $14,942.00
24.7Total net  $622,274.00
By separate order, I will require the husband to pay the arrears of maintenance calculated to the end of March 2008 at $10,500.

Contributions

As I said earlier, the parties agree that after consideration of matters of contribution, there ought to be an equal division between them of the net property and financial resources pool.

Section 75(2) factors

Further, as I stated earlier, the parties are not far apart in their assessment of what is an appropriate result after consideration of relevant Section 75(2) factors. The wife is seeking an additional loading in her favour of 10% whilst the husband deems that a 5% loading in favour of the wife is appropriate. I turn now, as I am obliged to do by Section 79(4)(3), to the factors enumerated in Section 75(2).

(a)“the age and state of health of each of the parties;”

Both parties will be turning 40 years of age this year and both enjoy good health.

(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 husband remains unemployed. He is engaged in a business with his brother which he hopes will begin attaining profitability in the middle of this year. If the business is successful, then he will earn a good income. If it is not successful by mid-2008, he indicated that he will again resume seeking paid employment. He has excellent qualifications for future paid employment.
Despite undertaking a number of training courses detailed in her affidavit filed on 29 May 2007 and in her oral evidence before the Court, the wife has not secured employment. I am not satisfied that she has made every reasonable effort to secure employment, hoping instead to continue receiving spousal maintenance. This is despite the remarks of Strickland J in his reasons delivered on 29 September 2006 (paragraph 62) where he said:-
“62. I consider that in the circumstances the wife will have some difficulties in obtaining appropriate employment, and she may have to undergo one or more courses before she is successful. Thus, in the short term I accept that she does not have an earning capacity. However, I am not satisfied that she has done all that she can to obtain employment, and certainly she appears to have done nothing about enrolling in any appropriate courses. She is fortunate indeed that this is an interim hearing and that at the moment she cannot contribute to the financial support of her children. However, she cannot rely on that being the case for much longer and she will need to forthwith make a concerted effort to obtain employment and/or at least commence an appropriate course or courses to enable her to return to the workforce. She has the ability but she is not actively pursuing obtaining work.”
Although the wife has been out of the work force for many years, I am satisfied that she has the capacity to earn some income, although never at a level which could be, and will probably be, enjoyed by the husband.
The outcome of these property proceedings, as was acknowledged by Counsel for both parties, will entail the wife receiving the overwhelming majority of capital assets apart from superannuation funds. The husband’s proportion of the net asset pool will be largely made up of the CPF superannuation funds which he will not be able to access for many years yet.

(c)“whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;”

S and L reside with the wife and are likely to continue to do so for some years yet, particularly L who is 11 years of age.

(d)“commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain;”

and

(e)“the responsibilities of either party to support any other person;”

No matters of relevance emerge for my consideration pursuant to these sub-sections.

(f)“subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under –
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia,

and the rate of any such pension, allowance or benefit being paid to either party”

As also stated earlier, the husband has, and will continue to retain pursuant to Orders I propose making in these proceedings, his Singapore CPF superannuation entitlements presently valued at $250,000. The wife will retain her CPF superannuation entitlements of $11,654.

(g)“where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable”

and

(h)“the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;”
and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant;

and

(j)“the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;”

No additional relevant matters emerge for my consideration pursuant to these sub-sections.

(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;”

As I indicated above, the wife has not worked for many years and it has impacted upon her capacity to earn income. However, she has been tardy in her attempts to find work. I am satisfied that the duration of the marriage has not impacted upon her capacity to secure some employment.

(l)“the need to protect a party who wishes to continue that party’s role as a parent;”

This sub-section is not relevant to my determination.

(m)“if either party is cohabiting with another person – the financial circumstances relating to the cohabitation;”

The husband is cohabiting with Ms N who is 35 years of age and earns an income of $292 per week. The two of them have purchased a penthouse apartment together in Singapore at S. I am satisfied that there is no equity in that property which is of relevance to these proceedings.

(n)“the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;”

As I have canvassed earlier, the husband will retain superannuation benefits as his predominant share of the property of the parties. As such, he will not be able to access those funds for another 25 years.

(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 husband is not paying any child support as his income is earned overseas. However, pursuant to my earlier findings in the matter, and effectively pursuant to his own proposal, the husband will continue to pay child maintenance in the total sum of $500 per week.

(o)“any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account.”

and

(p) “the terms of any financial agreement that is binding on the parties.”

These sub-sections are not relevant to my decision in these proceedings.

Conclusion on Section 75(2) factors

The wife’s role in continuing to be the principal carer for the children is a significant factor as is the certain disparity in the income of the parties in the future. Both of these factors favour an additional loading of the settlement outcome for the wife.
However, those factors are offset by the fact that the husband will be obliged to relinquish his interest in all currently accessible assets. The principal proportion of his property entitlement will be his CPF superannuation funds which he will not be able to access until he attains the age of 65 years or gives up permanent residence in Singapore something which I am satisfied on the evidence that he has no intention of doing. He is in a relationship with Ms N and has purchased property there. This factor is a counter-balancing issue in my determination of what is appropriate after reflecting upon Section 75(2) matters.
I find that it is appropriate to make an additional adjustment in favour of the wife of 5%, resulting in a 55 / 45 settlement in the wife’s favour.

Just and equitable

It remains for me to consider whether or not the orders I propose in relation to the property settlement issue between the parties are just and equitable (Section 79(2) of the Act).
The total net pool of assets and resources is a figure of $622,274. A settlement to the wife of 55% would therefore be represented by a figure of $342,251.00.
The wife will retain:-
Former matrimonial home property at B (equity)                 $156,150.00
48.1Wife’s 2003 Ford Falcon station wagon
motor vehicle   $14,000.00
48.2Wife’s ANZ and Bank SA accounts  $1,080.00
48.3Wife’s surrendered insurance policies  $14,337.00
48.4Wife’s Standard Chartered investment fund account  $327.00
48.5Wife’s Singapore Club membership  $1,330.00
48.6Wife’s CPF superannuation fund entitlements  $11,654.00
48.7Wife’s furniture  $4,500.00
48.8Wife’s / children’s bank accounts  $29,535.00
48.9Total  $232,913.00
There is therefore a balance of payment due by the husband to the wife to effect a 55% settlement in her favour of $109,338.00.
The husband would retain:-
50.1The surrender proceeds and values
of insurance policies  $29,774.00
50.2His net redundancy payment  $117,105.00
50.3His Bank SA account  $3,700.00
50.4His OCBC account  $3,724.00
50.5His CPF superannuation entitlements  $250,000.00
50.6Total  $404,303.00
Less
50.7His taxation liability  $14,942.00
50.8Net amount received by husband  $389,361.00
The husband’s entitlement to a settlement of 45% of the total net pool is represented by a figure of $280,023. He thus has an amount of $109,338 more than that to which he is entitled and represents the amount he is to pay to the wife. In addition, he has to pay arrears of child maintenance of $10,500.
However, he has no funds from which to meet that payment. His greatest asset is one which he cannot touch for 25 years, namely his CPF superannuation entitlements presently valued at $250,000 which represents almost 90% of his entitlement. He will have to find the money from somewhere.
This very sharply throws into focus the question of whether or not that outcome would represent a just and equitable one, not just for the husband but within the context of the proceedings generally. It further demonstrates, as the Court has oft said, that this fourth step is a distinct, genuine and meaningful step. It requires me to stand back from the result arrived at by consideration of the second and third stages to determine whether or not a different result would achieve justice and equity.
The guidelines as to the approach to be taken by a trial Judge in determining applications under Section 79 of the Family Law Act 1975 have been stated on numerous occasions by the Full Court. In the matter of Hickey and Hickey and the Attorney General of Australia (Intervener) (2003) FLC 93-143, the Full Court (Nicholson CJ, Ellis and O’Ryan JJ) discussed several earlier authorities and re-stated the guidelines in the following manner (at paragraph 39):
"The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g), ('the other factors') including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere and Lee Steere (1985) FLC ¶91-626; Ferraro and Ferraro (1993) FLC ¶92-335; Davut and Raif (1994) FLC ¶92-503; Prpic and Prpic (1995) FLC ¶92-574; Clauson and Clauson (1995) FLC ¶92-595; Townsend and Townsend (1995) FLC ¶92-569; Biltoft and Biltoft (1995) FLC ¶92-614; McLay and McLay (1996) FLC ¶92-667; JEL and DDF (2001) FLC ¶93-075 and Phillips and Phillips (2002) FLC ¶93-104.''
Kay J in Beneke & Beneke (1996) FLC 92-698 (at 83,369) said:
“Section 79 carries with it an extremely broad discretion. The parameters of the discretion are that the order must be appropriate and must not be made unless it is just and equitable to do so.”
In JEL and DDF (2001) FLC 93-075, Holden and Guest JJ said at 88,332
“140.This is why the ‘‘fourth step’’, namely whether the result is just and equitable, becomes important. In Clauson and Clauson (1995) FLC ¶92-595 the Full Court (Barblett DCJ, Fogarty and Mushin JJ) recognised, albeit in a discussion of the s 75(2) factors, that the application of percentages does not necessarily result in a just and equitable result, when it said at 81,911:
“There is, we think, at times a tendency to assess s 75(2) factors in percentage terms without considering its real impact, and we think there is legitimacy in the views expressed in more recent times that the Court has tended to operate in this area within artificially delineated boundaries. That is, it appears almost to be inevitable that the s 75(2) factors will be assessed in a range between 10% and 20%. A number of cases will justify an assessment outside those parameters and in any event it is the real impact in money terms which is ultimately the critical issue.”
141.More recently, in Russell v Russell (1999) FLC ¶92-877 , the Full Court said at 86,439:
“It must be remembered ... that under s 79(2) of the Act, the Court is required to be satisfied that it is the order to be made which is just and equitable, not just the underlying percentage division of the net value of the parties’ assets.”
142.The Full Court took the opportunity to emphasise that in the consideration of whether the result is just and equitable, it is the justice and equity of the actual orders not of the percentage distribution which must be considered.”
In Phillips and Phillips (2002) FLC ¶93-104 the Full Court (Finn, Kay and O’Ryan JJ) stated (at p 88,986):
[at para 70] "We do not suggest that a trial Judge would fall into error simply because he/she did not set out a list of the assets which each party would retain as a result of his/her decision. However, it is necessary to "stand back" and consider if overall the ultimate award was just and equitable to both parties and in our view that is what his Honour failed to do in this case. "
[at para 74] "In determining an application pursuant to s 79 findings will usually be made as to the entitlements of the parties expressed as a percentage of the net assets of the parties having regard to the matters of contribution and the other factors. However, when considering whether or not the overall result is just and equitable a further adjustment may be warranted depending on the circumstances of the case."
In Omacini and Omacini (2005) FLC 93-218 (at paragraph 46), the Full Court (Holden, Warnick and Le Poer Trench JJ) stated:
“46.The four important steps to be taken in determining a property dispute are well defined (see for example Ferraro and Ferraro (1993) FLC 92-335 at 79,560) and they are:
(a)To identify and value the net property of the parties (usually as at the date of trial);
(b)to consider the contributions of the parties within paragraphs (a)-(c) of s 79(4);
(c)to consider the s 75(2) factors; and
(d)to consider whether the order proposed is just and equitable.”
In the matter of Woollams & Woollams (2004) FLC 93-195, Thackray AJ (as he then was) faced a very similar dilemma as to the one in which I now find myself. His Honour determined not only to vary the percentage outcome arrived at after determining contributions and Section 75(2) factors, but also considered at what stage in the four step process it might be appropriate to undertake the discounting exercise on account of the fact that the husband’s superannuation entitlements were not immediately available to him.
Thackray AJ, in agreeing with the approach of Ryan FM (as she then was) in H and H (2003) FLC ¶93-168, stated (at paragraphs 20-22):
"This agreed value appears to reflect the current balance held in each of the relevant superannuation funds but that 'value' has no regard to the fact that the money cannot be accessed in the ordinary course for many years. (The same can be said of the prescribed method of valuation of interests in accumulation funds pursuant to the Superannuation Regulations.) This creates a dilemma for the Court since the asset pool in this case is such that almost inevitably the husband's share of the property will largely comprise superannuation entitlements whereas the wife's share will be made up by assets that are readily available. It was just such a dilemma that the superannuation amendments to the Family Law Act were designed to address.
A similar dilemma was faced by Stevenson J in H and H [2003] FamCA 1091 (an unreported decision delivered on 27 February 2003) where the court was called upon to determine a case involving superannuation entitlements where no application had been made for a splitting order. Her Honour said (at para 86):—
'In addition, it seems to me that the requirement contained in section 90MC that a superannuation benefit be treated as property "for the purposes of paragraph (ca) of the definition of matrimonial cause in section 4" means only that such a benefit is to be treated as property only when it is sought to invoke the provisions of Part VIIIB and not otherwise. In the present case, it would seem illogical that I am required to treat as "property" a superannuation benefit which will not vest in the husband for many years, in the sense that I should regard the sum of $74,556 as property in the husband's possession for the purposes of distribution of the net pool of property between the parties.'
After the decision in Hickey there can be no doubt that this approach is incorrect, as the Full Court has made clear that superannuation must be treated as property regardless of whether or not the provisions of Part VIIIB are to be invoked. However, the underlying problem remains — how fairly to treat a superannuation entitlement that will not be available for many years?"

Thackray AJ considered at what step in the four-step process should the Court consider discounting the "value" of the entitlement to take account of the fact that it is not immediately available. He also discussed the fourth step and that it appeared to have been given greater attention since the superannuation amendments.
Thackray AJ relied on Mallet v Mallet(1984) FLC ¶91-507 quoting from Gibbs CJ (at page 79,111) (emphasis added by Thackray AJ):
"Decisions in particular cases of that kind can, however, do no more than provide a guide; they cannot put fetters on the discretionary power which the Parliament has left largely unfettered. It is necessary for the Court, in each case, after having had regard to the matters which the Act requires it to consider, to do what is just and equitable in all circumstances of the particular case."
Thackray AJ decided (at paragraph 43) that:
"It is possible for me to consider applying a discount to the wife's entitlements at the third step in the process because I have already ruled out splitting the husband's entitlements at the fourth step. However, had the husband properly sought a splitting order it would not have been until the fourth step that I would have been able to give consideration to the issues that would arise if I had decided not to split his entitlements. It would be an unfortunate interpretation of legislation expressly designed to do justice and equity if the process is not sufficiently flexible to allow a further adjustment to be made to compensate a party who is left holding all or most of his settlement in the form of superannuation that will not be available for years to come. It would be particularly ironic that this state of affairs arose from amendments to the legislation designed to increase the armoury of remedies available to the court."
In Woollams (supra), Thackray AJ was left with the situation where after his calculation of what was an appropriate settlement after consideration of the second and third steps only, the husband’s superannuation benefits represented 90% of his entitlement. The husband in that case was only 40 years of age and hence it was to be many years before he could access his entitlements. The situation in this matter, is almost identical.
I am satisfied that to leave the settlement determination as presently identified would not represent a just and equitable outcome in these proceedings. The question therefore remains as to the manner in which I should redress the present injustice and inequity. In Woollams (supra), Thackray AJ resolved the matter by altering the settlement from a 55 / 45 division in favour of the wife to a 55/45 division in favour of the husband. In this matter, the husband’s Counsel proposed a different approach. She urged me to order that the husband pay any settlement sum due by him at the rate of $8,000 per month. That was also within the context of her submission that the settlement sum that the husband ought to be ordered to pay to the wife was in the amount of $80,000, some $30,000 less than my determination.
Pursuant to that determination, the husband would be required to pay an amount of $109,338 plus the arrears of child maintenance of $10,500.
In my view, the urging by Counsel for the husband that the settlement sum due to be paid to the wife be paid in monthly instalments provides the most appropriate outcome and hence a just and equitable outcome. It results in the wife receiving the full amount of her entitlement but does not, on the husband’s own case, impose upon the husband an obligation to borrow as a lump sum the funds to meet his settlement obligations. The wife did not indicate in her evidence, that she had any immediate need for a significant injection of capital and hence all of her obligations and entitlements could be and would be adequately met by capital payments. However, I am not satisfied that the wife should have to wait some 15 months to receive her settlement entitlements and arrears of child maintenance which would be the result if payments were made at the rate of $8,000 per month. In my view an appropriate regime of capital payments is at the rate of $10,000 per month over the next approximate 11 months.

Security

Counsel for the wife urged me to secure the settlement payment due by the husband by ordering the registration of a Caveat over the husband’s apartment in S in Singapore.
I agree that some form of security is appropriate but not that proposed by Counsel for the wife. The husband is not the sole owner of that apartment. His partner Ms N has a joint registered interest, her parents may well argue that they have an equitable interest due to financial contributions made by them to its purchase and there is little if any equity in the property.
The alternative proposed by Counsel for the husband is the only realistic option open to the Court, that is, a charge registered on the husband’s CPF superannuation entitlements. I propose to order same.

I certify that the preceding seventy (70) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Burr

Associate:

Date: 24 April 2008

[2008] FamCA 546

24 April 2008

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