Linssen and Linssen
[2019] FCCA 1225
•15 May 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| LINSSEN & LINSSEN | [2019] FCCA 1225 |
| Catchwords: FAMILY LAW – Property settlement – long marital relationship – consideration of Kennon in the context of family violence – relevance of husband’s ill health and limited life expectancy – where wife in receipt of disability pension – consideration of two pools. |
| Legislation: Family Law Act 1975, ss.72(1), 75(2), 79(2), 79(4) Family Law (Superannuation) Regulations 2001 (Cth) |
| Cases cited: Kennon v Kennon [1997] FamCA 27; (1997) FLC 92-757 Mallet v Mallet (1984) 156 CLR 605 |
| Applicant: | MR LINSSEN |
| Respondent: | MS LINSSEN |
| File Number: | MLC 9069 of 2018 |
| Judgment of: | Judge Mercuri |
| Hearing dates: | 18 and 19 September 2018 |
| Date of last submission: | 19 September 2018 |
| Delivered at: | Melbourne |
| Delivered on: | 15 May 2019 |
REPRESENTATION
| Counsel for the applicant: | Mr Williams |
| Solicitors for the applicant: | Pearsons Lawyers |
| Counsel for the respondent: | Ms Teicher |
| Solicitors for the respondent: | Davies Moloney |
ORDERS
That the wife shall pay to the husband the sum of $560,000
(“the payment”) within 30 days of the date of the orders being made (“the date”).That contemporaneously with the payment:
(a)the husband do all such acts and things and sign all such documents as may be required to transfer to the wife, at the wife’s expense, all of his right, title and interest in the real property situate at and known as Property A (“Property A”); and
(b)the wife shall otherwise be solely liable for and indemnify the husband against all rates, taxes, and outgoings of or with respect to Property A of whatsoever nature and kind.
That in the event the whole of the payment has not been made by the date, the parties forthwith do all acts and things and sign all documents necessary to place Property A on the market for sale on terms and conditions as agreed between the parties and in the absence of agreement as determined by a real estate agent nominated by the President of the Real Estate Institute of Victoria (REIV) (“the sale”).
That upon completion of the sale of Property A the proceeds be divided as follows:
(a)firstly, to pay the agent all costs, commissions and expenses of the sale and legal costs including disbursements; and
(b)secondly, the balance to be divided:
(i)60% to the wife; and
(ii)40% to the husband.
That pending the transfer or settlement of the sale of Property A:
(a)the wife shall continue to have the sole use and occupation of Property A and during such right of occupation she shall:
(i)meet all of the outgoings of and with respect to Property A including rates;
(ii)keep Property A insured against loss and damage at all times and provide proof of same to the husband’s lawyers upon request; and
(iii)maintain Property A in a good and reasonable state of repair and condition at all times;
(b)the parties hold their interest in Property A on trust pursuant to these orders; and
(c)neither party encumber Property A without the other party’s written consent or order of the Court first obtained.
That paragraphs 7 to 8 inclusive of these orders are binding on the Super Fund B (“the Trustee”) as Trustee of the Super Fund B Scheme (“the Scheme”).
That pursuant to section 90MT(1)(a) of the Family Law Act 1975 (“the Act”) whenever a splittable payment becomes payable in respect of the wife’s interest in the Scheme, the husband shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (“the Regulations”) using the base amount of $343,500 (provided that such base amount shall not exceed the value of the interest determined under section 90MT(2)) and there be a corresponding reduction in the entitlement of the wife to whom the splittable payment would have been made but for these orders.
That order 7 has effect from the operative time and that the operative time for such order be four (4) business days after the service of a sealed copy of these orders on the Trustee.
That the Trustee of the Scheme, in accordance with the obligations set out under the Act and the Regulations, do all such acts and things and sign all such documents as may be necessary to calculate the entitlement of the husband and make payment to the husband in accordance with these orders.
That there be liberty to apply to each party and the Trustee in relation to the implementation of the orders affecting the superannuation interest.
That the wife shall retain for her sole and exclusive use, enjoyment and benefit all other items of property (both real and personal and including choses-in-action and financial resources) in her name possession and/or control including but not limited to:
(a)her bank accounts and savings;
(b)her Motor Vehicle C;
(c)the furniture and household contents in Property A;
(d)her superannuation entitlements save for the superannuation split provided in these orders; and
(e)her personal belongings and effects.
That the wife shall be solely liable for and indemnify the husband in relation to all debts and liabilities in her name or attaching to any item of property which she is to retain pursuant to these orders.
That the husband shall retain for his sole and exclusive use, enjoyment and benefit all other items of property (both real and personal and including choses-in-action and financial resources) in his name possession and/or control including but not limited to:
(a)his bank accounts and savings;
(b)his Motor Vehicle D;
(c)his superannuation entitlements including the superannuation split provided in these orders; and
(d)his personal belongings and effects.
That the husband shall be solely liable for and indemnify the wife in relation to all debts and liabilities in his name or attaching to any item of property which he is to retain pursuant to these orders.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all other real and personal property (including choses-in-action and shares) registered in the name of or in possession of such party, or to which that party is legally or beneficially entitled, as at the date of these orders;
(b)monies standing to the credit of the parties in any joint bank account are to be divided equally and the account closed;
(c)each party retain for their sole use and benefit any superannuation or employment benefits accrued in their sole name save and except for the superannuation split provided in these orders;
(d)insurance policies remain the sole property of the owner named thereon;
(e)each party shall be solely liable for and indemnify the other against any liability/ies in their name or encumbering any item of property to which that party is entitled pursuant to these orders; and
(f)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
AND THE COURT NOTES THAT:
(A)Pursuant to section 81 of the Family Law Act 1975 (Cth) the parties intend that these orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.
(B)Section 121 of the Family Law Act 1975 (Cth) provides that it is an offence punishable by imprisonment for up to one year to publish or disseminate to the public any account of family law proceedings which identifies the parties, witnesses or other people concerned with the proceedings, unless specifically authorised by the court.
IT IS NOTED that publication of this judgment under the pseudonym Linssen & Linssen is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 9069 of 2018
| MR LINSSEN |
Applicant
And
| MS LINSSEN |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for orders pursuant to section 79 of the Family Law Act 1975 (“the Act”).
The applicant husband was born on … 1944 and at the time of trial, was in very poor health. The respondent wife was born on … 1958. The parties commenced cohabitation in about 1980 and married on … 1983.
The parties separated for approximately five months on 1 October 2017 and reconciled in February 2018. The parties then separated on a final basis on 24 June 2018. The husband initiated these proceedings on 8 August 2018. An urgent hearing was sought in light of the husband’s extremely poor health and prognosis at the time.
The final hearing was conducted on 18 September 2018.
Aside from a factual dispute about the extent, if any, of family violence during the relationship, there were no other significant factual disputes in this matter.
The relationship was a long one, lasting some 38 years. There was one child of the relationship, Mr E born … 1988 who tragically died in a car accident on … 2010. Both parties had children from prior relationships. In the case of the respondent husband, he had three sons from a previous relationship, two of whom also tragically died in a car accident. His surviving son from his first marriage, Mr F was born on … 1967.
The respondent wife also had a son from a previous relationship, Mr G born … 1977 (“Mr G”). The husband adopted Mr G in 1984 and Mr G lived with the parties until he was about 20 years of age.
Parties’ proposals
At trial, the husband sought orders which would see all assets of the parties being distributed on a 60/40% basis in favour of the wife.
In the alternative, if the wife’s disability pension was to be excluded from the asset pool altogether, the husband sought an order for the remaining assets to be distributed on a 50/50% basis.
The wife opposed the husband’s application and sought:
a)there be two pools:
i)the first consisting of the real assets and superannuation entitlements of the parties, save and except from the wife’s pension entitlement and the $150,000 paid into the wife’s superannuation fund which related to the death benefit paid on the death of the parties’ son, Mr E (“the first pool”); and
ii)the second consisting of the wife’s pension and the $150,000 referred to above (“the second pool”); and
b)the wife receive 70% of the first pool and 90% of the second pool.
The legislation
Section 79 of the Act gives the court power to alter the interests of the parties to a marriage in the property of the parties to that marriage. Subsection 79(2) of the Act provides that:
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Section 79(4) of the Act sets out the matters the court must take into account when considering what orders, if any, should be made for the alteration of the interests of the parties in property. Those matters are:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f)…;
(g)….
The approach to applications under section 79
It is well settled since Stanford v Stanford (2012) 247 CLR 108 (“Stanford”) that the proper approach to an application under section 79 of the Act is as follows:
Section 79(2) provides that “[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under this section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under section 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.[1]
[1] Stanford v Stanford (2012) 247 CLR 108 at [35].
The court went on to say:
The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to a marriage and whatever may have been their stated or unstated assumptions about property interests during the continuance of marriage.
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4) (emphases added)
(footnotes omitted).[2][2] Stanford v Stanford (2012) 247 CLR 108 at [41]-[42].
In this case, the parties have been in a very long marriage which produced one child and during which the parties helped each other raise children from previous relationships. In the case of the wife’s child from her previous relationship, the husband formally adopted him. Notwithstanding an attempt at reconciliation, their relationship ended and they are each seeking orders of this court pursuant to section 79 of the Act.
I am satisfied that in all of the circumstances, it is just and equitable to make orders adjusting property matters between them on a final basis.
Having come to this view, I turn to the approach that the court takes in considering what orders are appropriate under section 79 of the Act. In this context, regard can be had to the following comments of the
High Court in Norbis v Norbis (1986) 161 CLR 513 in which Justices Mason and Dean said:
Here the order is discretionary because it depends upon the application of a very general standard – what is ‘just and equitable’ – which calls for an overall assessment in the light of the factors mentioned in s.79(4), each of which in turn calls for an assessment of circumstances…[3]
[3] Norbis v Norbis (1986) 161 CLR 513 at [4]; see also Mallet v Mallet (1984) 156 CLR 605 at [609].
The approach that the court generally takes in considering what orders are appropriate under section 79 of the Act, are aptly summarised in
In the Marriage of Hickey[2003] FamCA 395. Essentially this requires the court to:
a)identify the assets and the value of the assets in the property pool;
b)determine the contributions made by each of the parties to those assets, both directly and indirectly and in financial and non-financial terms;
c)determine whether any adjustment is required for section 75(2) factors; and
d)in light of those findings, determine what orders for the division of property is just and equitable.
In Bevan v Bevan (2013) 279 FLR 1; (2013) 49 Fam LR 387; [2013] FamCAFC 116 (“Bevan”), the court acknowledged that prior to Stanford, the four stage process was the manner in which section 79 proceedings were commonly dealt with.[4] However, Bryant CJ and Thackray J stated:
Although, the four step process has been regularly applied, the Full Court has stressed it is no more than a means to an end, since the statutory obligation is to alter existing interests only if it is just and equitable to do so. Thus in Norman v Norman [2010] FamCAFC 66 at [60], the Full Court (Finn, May and Murphy JJ) said:
It is the mandatory legislative imperative (to reach a conclusion that is just and equitable) that drives the ultimate result. For all its usefulness and merit as a ‘disciplined approach’ or a ‘structured process of reasoning… the
‘three-step’ or ‘four-step’ approach merely illuminates the path to the ultimate result.[5][4] Bevan & Bevan (2013) 279 FLR 1; (2013) 49 Fam LR 387; [2013] FamCAFC 116 at [59]-[60].
[5] Bevan & Bevan (2013) 279 FLR 1; (2013) 49 Fam LR 387; [2013] FamCAFC 116 at [61].
Bryant CJ and Thackray J went on to say:
It follows that judges would be well advised to avoid what we consider to be arid discussion of the ‘stage in the process’ at which ‘adjustments’ are permissible. Such discussion tends to elevate the four step process to the status of a statutory edict, when in fact it is no more than a shorthand distillation of the words of a statute which has but one ultimate requirement, namely not to make an order unless it is just and equitable to do so.[6]
[6] Bevan & Bevan (2013) 279 FLR 1; (2013) 49 Fam LR 387; [2013] FamCAFC 116 at [72].
I have applied these principles in determining this matter.
Assets and liabilities
Before turning to the key issues in this case, it is necessary to identify the pool of assets and liabilities available for distribution between the parties.
The parties agreed that their joint assets and values at the time of trial were as follows:
Assets
Ownership
Value
Property A
Joint
$1,400,000
Motor Vehicle D
Husband
$60,000
Motor Vehicle C
Wife
$5,000
Bank accounts
· ING account – $8,000
· Westpac account – $6,000
Husband
$14,000
Bank accounts
Wife
$9,000
Bank accounts and savings
Joint
Nominal
Furniture and household contents
Wife
$10,000
Total assets
$1,498,000
The parties agreed that they had no liabilities at the time of trial.
In addition, the parties agreed that they hold the following superannuation entitlements:
Superannuation
Ownership
Value
Super Fund B account no. …
Husband
$180,590
Superannuation withdrawn by the husband
Husband
$70,000
Super Fund B account no. …
Wife
$705,618
Super Fund B account
Wife
$5,474
Total agreed superannuation
$961,682
Disputed superannuation
It is conceded that the wife currently receives a pension in the sum of $33,081.10 per annum[7] from Super Fund B and that the wife could convert this pension to a lump sum payment. The evidence before the court as to the present day valuation of the wife’s pension is $523,534[8].
[7] Exhibit B.
[8] Exhibit B.
There is a dispute as to how the wife’s disability pension which she receives from Super Fund B ought to be dealt with.
It is the husband’s case that this amount ought to be included in the asset pool. The wife’s position is that this amount ought to be excluded from the asset pool. The wife maintained that it is her intention not to convert this pension to a lump sum but rather to continue to draw on it for her future living expenses. The wife submitted in the alternative that this amount ought to be dealt with as a separate pool altogether and she ought to retain 90% of that pool. The question of the proper treatment of the wife’s pension is addressed in greater detail below.
The husband also asserts that the wife also has a further superannuation entitlement in the sum of $5,474.88.[9] The wife does not expressly address this claim but it does not appear to have been taken into account in the calculation of the wife’s superannuation entitlement.[10] Exhibit B[11] does make reference to a superannuation entitlement in the wife’s name to the value of $5,474.88. I am therefore satisfied that this amount should also be included in the asset pool.
[9] Exhibit G.
[10] Exhibit F.
[11] Being the letter from Super Fund B dated 11 September 2018.
Key issues
The issues at trial were:
a)the parties’ respective contributions;
b)whether the wife was subjected to domestic violence during the relationship as alleged and if so, what impact this may have on the questions before the court;
c)whether the court should adopt a ‘one pool’ or ‘two pool’ approach in determining this matter and if the latter, what falls within the second pool; and
d)what adjustment is appropriate in the circumstances, having regard to the husband’s poor prognosis at trial?
Evidence
At the time of trial, the husband’s health was dire. At the commencement of the hearing, a letter from Dr H was tendered dated 17 September 2018 which stated:
(Mr Linssen) has rapidly progressive metastatic bowel cancer. He was admitted to hospital over the weekend with a bowel obstruction and rapidly accumulating ascites. He is drowsey (sic). He is requiring ongoing intravenous fluid. He is not now and never will be fit to attend court. In the next few days he will be transferred to Suburb J Hospital for inpatient palliative care. He has an estimated life expectancy of several weeks.[12]
[12] Exhibit C.
In his affidavit sworn on 7 August 2018, the husband deposed to the fact that he has suffered a series of serious health issues since 2012 when he was initially diagnosed with atrial fibulation.[13] He further deposed that:
a)in 2016, he was diagnosed with prostate cancer and underwent radiation treatment for several months commencing in … 2016;[14]
b)in … 2017, he was diagnosed with bowel cancer for which he underwent surgery between … 2017 and … 2018;[15] and
c)in … 2018, he was advised by his treating oncologist Dr H that the cancer had spread to his lungs.[16]
[13] Paragraph 11 of the affidavit of the husband sworn 7 and filed 8 August 2018.
[14] Paragraph 12 of the affidavit of the husband sworn 7 and filed 8 August 2018.
[15] Paragraph 13 of the affidavit of the husband sworn 7 and filed 8 August 2018.
[16] Paragraph 14 of the affidavit of the husband sworn 7 and filed 8 August 2018.
The husband annexed a letter from Dr H dated 25 July 2018 to his affidavit, which stated that “his prognosis is poor, likely to be a number of months of survival.”[17]
[17] Annexure L-1 of the affidavit of the husband sworn 7 and filed 8 August 2018.
This proceeding was expedited due to the husband’s poor health. At the commencement of the hearing, the court was advised that the husband was in hospital and unable to attend court although if required for cross examination, could be available by telephone or, alternatively, evidence could be taken at his bedside.
Ultimately, counsel for the wife agreed to conduct the cross-examination of the husband by telephone. Whilst this was not ideal, it was the most expedient manner for evidence to be taken from the husband for the purposes of this hearing.
I am satisfied that the husband was able to respond to questions of him in a sufficiently lucid manner. Although there were at time difficulties which are not uncommon when witnesses give evidence over the telephone, I am satisfied that the manner in which the husband gave evidence did not adversely impact the court’s ability to assess that evidence.
The wife also gave evidence and was subject to cross-examination.
The only real factual dispute between the parties related to the nature and extent of family violence between the parties. This is explored further below. The husband’s position in relation to this issue was that:
a)there were some altercations between the parties during their long relationship but they were not to the extent that the wife now asserts;
b)the majority of the disputes between the parties arose towards the end of the relationship as a result of a disagreement over the husband’s wishes in relation to his will; and
c)the wife was at times violent towards him.
Contributions
Initial contributions
The parties commenced cohabitation in 1980. It is common ground that at the commencement of cohabitation, the husband had a car and some savings of $18,000 which was used to purchase the first family home in Suburb K.[18]
[18] This money came from the husband’s property settlement with his first wife.
The husband asserts that the money which he brought into the relationship allowed the parties to purchase their first home and effectively provided a ‘springboard’ from which their assets grew over the course of their long relationship.
The wife disputes any ‘springboard’ argument and says that the sum of $18,000 over the course of a long marriage is modest in the scheme of things. There is some merit to this argument although some credit must be given to the husband for his initial contribution which, in 1980, was not insignificant. In the course of cross examination, the wife conceded that the first home they purchased following their marriage cost $53,000, of which the husband contributed $17,000 from money he had received following the settlement from his first marriage.[19]
[19] Transcript page 56 at lines 33 to 46.
It is also common ground that when the parties’ son, Mr E passed away, they received an insurance payout of $208,000. There is a dispute as to whether this amount was paid to the wife or to the parties jointly. There is no dispute that the payment was in respect of their son’s death.
It is agreed that $150,000 of the insurance payout was paid into a term deposit and then transferred into the wife’s superannuation account. A further proportion[20] was used to purchase a ring for the wife and the balance was used to pay for overseas travel.
[20] The wife says $20,000 and the husband says $30,000.
Contributions during the marriage
The husband’s case is that essentially, the parties’ contribution during the relationship was equal. The husband gave evidence that he worked for Employer for 43 years and retired in 2008.
The wife says that during the relationship, she worked and cared for the children and the home. The wife’s case is that she made significant contributions during the relationship, not only financially but also as home maker, primary carer for the children and carer to the husband’s mother when she became ill at the end of her life. The wife also cared for the husband for many years once he became ill even at times when she herself was unwell and was being treated for various medical conditions.
It is not in dispute that the husband adopted the wife’s son, Mr G who lived with the parties until his early twenties and the husband provided for him. It is also not in dispute that the husband’s son, Mr F lived with the parties for some two years.
The wife’s evidence is that she was named as the sole beneficiary on her son’s life insurance policy and therefore the payout received should be treated as a significant contribution on her part.
The wife also gave evidence that when she was made redundant from her position with Employer, she received a redundancy payment in the sum of $54,000.[21]
[21] Transcript page 58 at line 44 to page 59 at line 4.
Ultimately, the wife conceded that during the relationship both she and the husband did their best to work hard and contribute equally to the benefit of their combined family unit.[22] Having regard to the totality of the evidence, this concession was quite properly made.
[22] Transcript page 58 at lines 28 to 34.
I find that both parties worked to the best of their abilities and contributed equally during the relationship.
Contributions post separation
Neither party asserted any significant contributions post separation.
Family violence
The wife asserts in her material that she was subjected to family violence throughout the relationship. She says that the husband “on many occasions… would hit me with his fists and over the years (she) suffered various black eyes and blood noses.”[23]
[23] Paragraph 10 of the affidavit of the wife sworn and filed 13 September 2018.
In her affidavit of 13 September 2018, the wife deposes to the following specific incidents of family violence:
a)on 17 August 1998, the husband allegedly hit her over the head with a bar stool resulting in her having to get 12 stitches in her head (“bar stool incident”);
b)the husband would commonly assault the wife by spitting on her and pulling her hair, particularly if he was drunk (“spitting and hair pulling incidents”);
c)on 26 October 2001, the husband allegedly hit her causing her bruising to her eye and cheek, following which she saw her local doctor on 29 October 2001 (“October 2001 incident”);
d)on 1 October 2017, the husband allegedly became violent and abusive following an argument about how the family home was to be dealt with in the event of the husband’s death (“October 2017 incident”); and
e)on 24 June 2018, following another argument about the title to the former matrimonial home, the husband allegedly beat the wife resulting in two black eyes and which led to the parties’ final separation (“June 2018 incident”).
I will deal with each of these allegations in turn.
Bar stool incident
The wife alleged that:
a)the husband hit her over the head with a bar stool causing her to obtain 12 stitches to her head;
b)at this time, her son Mr G who was in the family home came downstairs and tried to protect his mother leading to an altercation with the husband;
c)she was taken to hospital by ambulance, the police subsequently attended and an intervention order was obtained excluding the husband from the family home for a period of time.
The husband does not address this allegation in his affidavit material. In the course of cross-examination, he conceded that:
a)there was an incident which occurred in or about 1998 in the family room and Mr G, who was about 20 or 21 years old at the time, came downstairs;
b)the wife started screaming;
c)he did not recall whether the wife was bleeding as a result of this incident although he did concede that he was told there was a lot of blood.
The husband denied that he was drunk at the time and that that explained why he could not recall the incident. He alleged that the wife drinks to excess.
Although he did not concede that the incident occurred as alleged by the wife, the husband did concede that the wife was taken to hospital afterwards and had some stitches to her head. He also conceded that the police attended the family home, he was taken to the police station for an interview and that subsequently an intervention order was issued.[24]
[24] Transcript page 24 at lines 11 to 33.
During re-examination, the husband gave the following further evidence about this incident:
Mr G just looked at me… looked at his mother; he looked at me. I don’t think he could figure out what was going on… why there would be a problem.[25]
[25] Transcript page 35 at lines 41 to 44.
Spitting and hair pulling incidents
These allegations were not addressed in the husband’s affidavit material.
When put to him during cross examination, the husband denied that he pulled the wife’s hair on many occasions or caused her many black eyes.[26]
[26] Transcript page 29 at lines 30 to 44.
October 2001 incident
This allegation was not dealt with in the husband’s affidavit material. As noted above, when it was put to him that he caused the wife to have black eyes on various occasions during the relationship, the husband denied having done so.
October 2017 incident
This allegation was not dealt with in the husband’s affidavit material and no questions in relation to this incident were put to the husband.
June 2018 incident
During cross examination, the husband denied that the June 2018 incident occurred as alleged by the wife. When it was put to the husband that the wife had photos of the bruising to her face that she had suffered as a result of this incident, the husband replied “she’s an expert in… make-up”.[27]
[27] Transcript page 32 at lines 12 to 13.
When it was put to the husband that the wife attended on her GP following this incident and her GP called to check up on her at home the following day, the husband denied this but went on to say “I was sat down when she answered the phone” suggesting that he did recall the wife receiving a call from her GP.[28]
[28] Transcript page 32 at lines 20 to 21.
The husband did concede that shortly after this incident, he was removed from the family home as a result of an intervention order obtained on the wife’s behalf.[29]
[29] Transcript page 32 at lines 36 to 41.
In his affidavit sworn on 7 August 2018, the husband asserts that on
12 June 2018, the wife bit him on his left hand causing “cutting, bleeding and bruising.”[30] He further deposed:
She jumped on me and was chocking (sic) me with both hands. As I had just had surgery, I did not have the strength to defend myself. The next day she was clearly made up with what appeared to look like black eyes.[31]
[30] Paragraph 23 of the affidavit of the husband sworn 7 and filed 8 August 2018.
[31] Paragraph 23 of the affidavit of the husband sworn 7 and filed 8 August 2018.
In the course of cross-examination, the husband submitted photos which he said evidenced the damage caused to his hand as a result of the wife’s actions on 12 June 2018.[32] The husband did not accept the proposition put to him that the injuries to his hand were caused by his assault on the wife and not by the wife on him.[33]
[32] Exhibit D.
[33] Transcript page 34 at lines 1 to 9.
The husband further deposed that on 24 June 2018, the wife applied for an intervention order, the police attended at the family home and an intervention order was granted the following day for a 12 month period.[34]
[34] Paragraph 24 of the affidavit of the husband sworn 7 and filed 8 August 2018.
The wife annexed various notes from her treating GP in respect of various consultations in 2015, 2017 and 2018 to her affidavit sworn
13 August 2018.[35]
[35] Annexure L-1 to the affidavit of the wife sworn 13 and filed 14 August 2018.
Dr L filed an affidavit in these proceedings attesting to the fact that she is the wife’s treating doctor. Dr L annexed a copy of the wife’s medical file and a report she prepared in relation to the wife.[36] Those notes cover the period from February 1985 to June 2018 and include the notes which were annexed to the wife’s affidavit of 13 August 2018.
[36] Annexure -1 of the affidavit of Dr L sworn 17 and filed 18 September 2018.
Ultimately the husband’s counsel did not require Dr L for cross-examination. Her evidence therefore is unchallenged.[37]
[37] Transcript page 47 at lines 20 to 22.
Dr L’s notes record that the wife reported various incidents of family violence by the husband over the course of their relationship.[38] Importantly, those notes also record that the dispute at least from 2016 appeared to relate to the parties’ will. For example, the notes of a visit on 18 July 2016 contain the following:
… husband had surgery, hes (sic) acting badly as well, hit her and wants to leave his will to charity, when she contested he swung his fist at her and gave her a bump on head (he is against Mr G (sic) – the only remaining son, who stood up for his mom to protect her!!).[39]
[38] Annexure -1 of the affidavit of Dr L sworn 17 and filed 18 September 2018.
[39] Annexure -1 of the affidavit of Dr L sworn 17 and filed 18 September 2018.
At its highest point, and like the other notes supplied by Dr L, this provides a record of what the wife disclosed to her doctor. They are not evidence of the truth of those matters.
Having said that, the notes which appear to be dated 13 June 2018 record the following:
…bashed up by husband on 12/06/18, over dispute about the Will…[40]
[40] Annexure -1 of the affidavit of Dr L sworn 17 and filed 18 September 2018.
Importantly, under the heading ‘Examination’ the doctor’s notes record the following:
two black eyes, see pic on my iphone, swollen and puffy eyes, blue black and red hue to upper lids and lower lids, swollen tender bruised bridge of nose and forehead no neck stiffness…[41]
[41] Annexure -1 of the affidavit of Dr L sworn 17 and filed 18 September 2018.
The notes of 14 June 2018 further note:
Came later, saying she had to tell her husband that Dr L knows the situation, he said to her is she concerned about me too?!! (acc to Ms Linssen he has scratch marks on his face from when she pushed him off, and he has a bump on back of head when he hit the dressing table during scruffle (sic))[42]
Ms Linssen is still thinking what to do, she feels she cant abandon a man who has terminal cancer, but she wont sign what he wants her to sign either, which is insulting and degrading, leaving ½ of their family home and super to his estranged sons 17 y.o son and expecting her to live off her pension of 600/ week (sic)[43]
[42] Annexure -1 of the affidavit of Dr L sworn 17 and filed 18 September 2018.
[43] Annexure -1 of the affidavit of Dr L sworn 17 and filed 18 September 2018.
Dr L’s notes of 27 June 2018 further record:
The black eyes are in healing phase, some purple pigment visible lower lids and forehead…[44]
[44] Annexure -1 of the affidavit of Dr L sworn 17 and filed 18 September 2018.
On the basis of all of the evidence available before me, I find that there was an altercation between the parties on 12 June 2018 which resulted in both the husband and the wife suffering some injuries.
I accept the wife’s evidence that she suffered bruising to her eyes and that she sought medical attention for same. I do not accept the husband’s explanation that the wife put make up on to create a false impression about the extent of her injuries.
The medical notes supplied are consistent not only with the wife’s reporting to the doctor but also contain evidence of the doctor’s own observations upon examination of the wife as his patient which appear to be consistent with actual physical injuries.
I note that the wife indicated that Dr L was available for cross-examination during the hearing at which time the husband could have challenged these notes if he sought to question Dr L’s examination of the wife. The husband did not do so.
I also find on the basis of the evidence before me that there were various other incidents of family violence between the parties during their relationship. At the very least, it is conceded that an intervention order was obtained against the husband on at least two occasions during the relationship which resulted in the husband being excluded from the family home.
Whilst it was argued on behalf of the wife that I should prefer her evidence in relation to the family violence alleged during the relationship, it was not clear how it was said that this family violence, if accepted, impacted upon the adjustment to be made in relation to property settlement. Counsel for the wife submitted that the wife’s contributions over the course of the parties’ relationship were made more arduous because of the family violence she was subjected to. It was submitted on behalf of the husband that no Kennon argument was raised in this instance.
In Kennon v Kennon [1997] FamCA 27; (1997) FLC 92-757 (“Kennon”), the Full Court of the Family Court considered the relevance of domestic violence to section 79 proceedings and noted:
The question raised in this case was whether and if so to what extent domestic violence was relevant in the exercise of the discretion under s79 of the Family Law Act. If it is relevant, that should be clearly acknowledged. If it is not, then a disservice is done by attempting to apply the section to circumstances which are not within its ambit. Change is then a matter for the legislature.[45]
[45] Kennon v Kennon [1997] FamCA 27; (1997) FLC 92-757 at 84,291.
After discussing the history of section 79 and the changes introduced by the Family Law Act in 1975, the court further noted:
Section 79 replaced the previous s 86. It made no explicit reference to conduct one way or the other but it did include the rather enigmatic provision in s 75(2)(o) …
… in pre 1975 legislation, conduct as such was relevant to the determination of property proceedings and, to an extent, those orders were seen to represent social and judicial disapproval of that conduct. It seems to us that in the post 1975 cases the change was to exclude what were otherwise relevant factors under s79 because they had their origin in conduct. … The correct position may be that such matters are relevant within s 79 not because they are based in conduct, rather despite that and because they are otherwise part of the legitimate s 79 exercise.[46]
[46] Kennon v Kennon [1997] FamCA 27; (1997) FLC 92-757 at 84,291 and 84,292.
After considering a range of relevant cases, the court stated:
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage which is demonstrated to have had a significant adverse impact upon that party’s contributions to the marriage, or put another 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 (emphasis added).[47]
[47] Kennon v Kennon [1997] FamCA 27; (1997) FLC 92-757 at 84,294.
The court made it clear that this approach was limited to exceptional cases. Indeed, in considering whether this approach was likely to have the effect of ‘opening the floodgates’, the court went on to say:
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…[48]
[48] Kennon v Kennon [1997] FamCA 27; (1997) FLC 92-757 at 84,294 to 84,295.
Whilst I have found that there were instances of family violence during the relationship and I accept the wife’s evidence that the husband inflicted injury to her, as supported by her visits to her general practitioner, the family violence does not rise to the level required in Kennon. There is no evidence that the violence to the extent that it did occur during the relationship had “a discernible impact upon”[49] the wife’s contributions.
[49] Kennon v Kennon [1997] FamCA 27; (1997) FLC 92-757 at 84,295.
For these reasons, I have not had regard to the family violence during the relationship in considering what orders ought to be made under section 79.
One pool or two pool approach
It was argued for the wife that the court should adopt two pools; the first pool consisting of the real property and the parties’ combined superannuation excluding the sum of $150,000 which came from the life insurance payment and the wife’s disability pension. It was argued that the life insurance payment and wife’s disability pension should fall into the second pool.
It is settled law that ultimately, whether a global or asset by asset approach is used will depend on the circumstances of the case; however, “in most cases, the global approach is the more convenient.”[50] It is therefore open to me to adopt a two pool approach to this matter.
[50] Norbis v Norbis [1986] HCA 17; 161 CLR 513 at [16].
It was argued on behalf of the wife that the husband has not made any contributions towards the wife’s disability pension. Counsel for the wife referred to the Federal Court decision of Campbell v Superannuation Complaints Tribunal [2016] FCA 808 in which Logan J considered whether the applicant’s entitlement to receive an invalidity pension benefit pursuant to a military superannuation scheme was a ‘superannuation interest’ for the purposes of section 90MD of the
Family Law Act1975 (Cth). In the context of considering this question, his Honour relevantly said:
An examination of Family Court authority discloses a line of cases in the original and appellate jurisdiction in which that court has grappled with questions as to what is a just and equitable allocation of property where the matrimonial assets include an entitlement to be paid an invalidity benefit from an occupational superannuation fund. This line of authority proceeds from the acceptance that an entitlement to be paid an invalidity pension from an occupational fund constitutes a ‘superannuation interest’ for the purposes of Pt VIIIB of the Family Law Act. These authorities and their effect were summarised by Foster J in Simpson & Simpson [2014] FamCA 521 at [69] and [72] in this way:
69.…[T]he nature, form and characteristics of the husband’s pension needs to be considered in evaluating the party’s contributions to that pension and in determining what orders are ultimately just and equitable…
72.The authorities referred to above recognise the different qualities of contributions made by the non-member spouse in respect of the invalidity and non-invalidity component of a pension stream. The contributions of the non-member spouse in relation to an invalidity component have been regarded as inferior to those of the member spouse where the pension substitutes for current income pending retirement.[51]
[51] Campbell v Superannuation Complaints Tribunal [2016] FCA 808 at [36].
The wife relied upon [72] above in Simpson & Simpson [2014] FamCA 521 to support her claim that the husband’s contribution to her disability pension was significantly less than her own and ought to be reflected in any adjustment in his favour.
Moreover, it was argued for the wife that given the husband’s terminal illness, he has no need for any adjustment in his favour (other than a nominal one) in respect of the wife’s disability pension.
There is some merit to the suggestion that the wife’s disability pension, valued for the purposes of the Family Law (Superannuation) Regulations 2001 (Cth) (“the Regulations”) should be included in a separate pool.
I am prepared to adopt a two pool approach in this case, however for the reasons which follow, this does not ultimately affect the final orders which I make. It is simply another path to the same result.
In relation to the proceeds of the life insurance paid following the death of the parties’ son, the wife submitted that this should also be included in the second pool, essentially for two reasons. Firstly, the wife was the nominated beneficiary under the son’s life insurance policy and therefore this was a contribution made by her and a significant one at that. Secondly, this was a payment made following the tragic death of her son and there was an emotional element to this payment that the husband would not have in the long term given his poor prognosis. Moreover, his estate would not have any such emotional connection to this payment.
No documentary evidence was put before the court supporting the proposition that the wife was the sole beneficiary of her son’s policy. The evidence such as it was, was that the money once received was paid into a term deposit in the husband’s name and then transferred into the wife’s superannuation account. I am not satisfied on the basis of the evidence that the payment could properly be described as a payment to the wife, to the exclusion of the husband. It was a payment consequent upon the tragic death of the parties’ child. There is force to the following submission made by counsel for the husband:
That’s a dreadful event that occurred… The payment was made during the subsistence of a marriage between a husband and a wife and, indeed, it didn’t attract to one party or the other. The trauma to both parents is the same.[52]
[52] Transcript page 81 at lines 37 to 39.
Moreover, the court was not referred to any authority which would support a finding that the life insurance payout should be excluded from pool one. The fact that ultimately, the beneficiaries under the husband’s will might access some of this money, is not reason alone to treat this part of the wife’s superannuation entitlement in a different manner.
I therefore find that the whole of the wife’s superannuation entitlements (other than the disability pension) should be included in pool one.
I therefore find that there should be two pools. The first pool consists of the following assets:
Pool one
Assets
Ownership
Value
Property A
Joint
$1,400,000
Motor Vehicle D
Husband
$60,000
Motor Vehicle C
Wife
$5,000
Bank accounts
· ING account – $8,000
· Westpac account – $6,000
Husband
$14,000
Bank accounts
Wife
$9,000
Bank accounts and savings
Joint
Nominal
Furniture and household contents
Wife
$10,000
Super Fund B account no. …
Husband
$180,590
Superannuation withdrawn by the husband
Husband
$70,000
Super Fund B account no. …
Wife
$705,618
Super Fund B
Wife
$5,474
Total assets
$2,459,682
Pool two
The second pool consists solely of the wife’s disability pension which is valued at $523,534.97.
The section 79(4)(d), (e), (f) and (g) and section 75(2) factors
Section 79(4)(d) requires that the court give consideration to the impact of any proposed orders on the earning capacity of either party to the marriage.
The wife has a disability pension. She is 59 years of age and there is no evidence before this court that she is likely to have any capacity for employment in the foreseeable future. If she were required to commute that pension to a lump sum payment, this would detract from her earning capacity. Given the husband’s prognosis at trial, orders of this court are not likely to impact on his earning capacity.[53]
[53] Family Law Act 1975 (Cth), s. 79(4)(d).
The considerations in section 79(4)(f) and (g) do not apply in this case.
Section 79(4)(e) requires that consideration be given to section 75(2) factors to the extent that they are relevant. The relevant factors in this instance arising from section 75(2) are discussed in turn below.
Section 75(2)(a): the age and state of health of each of the parties
It is common ground that as at the date of trial, the husband’s health was in a precarious state and his prognosis was extremely poor. Indeed his treating oncologist stated that the husband “has an estimated life expectancy of several weeks”.[54]
[54] Exhibit C.
For her part, the wife has given evidence, which I accept, that she too has had a series of health issues in recent years. The wife gave evidence that in 2014, she underwent a right hip replacement. In 2015, she was diagnosed and treated for breast cancer and further, she would be undergoing a left hip replacement within six months of the trial.[55] She deposed that her cancer is currently in remission although she continues to take medication in relation to that condition.
Section 75(2)(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
[55] Paragraphs 4 and 5 of the affidavit of the wife sworn and filed 13 September 2018 and the annexures referred to therein.
The wife gave evidence that she was made redundant from her role as a clerical assistant with Employer in 2016 and as a result of her health issues, she was deemed eligible and commenced receiving a disability pension from her superannuation fund, Super Fund B.[56]
[56] Paragraph 8 of the affidavit of the wife sworn and filed 13 September 2018.
The wife has also given evidence, which I accept, that she receives this pension
…in place of a government pension up to the age of 65 where it can be converted to a lump sum. I will not be eligible to receive a government pension if I receive my disability pension as a lump sum. As I need an income, I will not be commuting the Disability Pension.[57]
[57] Paragraph 8 of the affidavit of the wife sworn and filed 13 September 2018.
Section 75(2)(e): the responsibilities of either party to support any other person
Neither party has the responsibility for a child of the relationship under 18 years of age.
Section 75(2)(f): subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under… (ii) any superannuation fund or scheme… and the rate of any such pension, allowance or benefit being paid to either party
As discussed elsewhere in these reasons, the wife is in receipt of a disability pension associated with her superannuation fund. This provides her with a weekly income of some $600. As this pension has been valued in accordance with the Regulations, it is not necessary to consider it under this provision.
However, as noted by counsel for the husband, if the disability pension is not included as an asset, the wife would continue to have the benefit of this pension on an ongoing basis and that is a relevant factor to take into account when considering future needs.
Section 75(2)(g): Where the parties have separated… a standard of living that in all the circumstances is reasonable
Section 75(2)(n): …the terms of any order made or proposed to be made under section 79 in relation to; (i) the property of the parties
It is clear from the material that irrespective of the concerns during the parties’ relationship, the key issue which led to their final separation and presumably some of the altercations towards the end of the relationship, was a fundamental difference of opinion between the parties as to how the family estate should be dealt with following the husband’s death. So much is clear from the evidence of the parties themselves and corroborated in the notes taken by Dr L.
The wife essentially argued that given that the husband had a limited life expectancy at trial, he had a much more limited need for the assets accumulated over the course of their life together. Moreover, the wife maintained that the beneficiaries of the husband’s will ought not have any greater claim over the parties’ assets than she does given that she and the husband accumulated the assets over the course of their relationship.
The wife further deposed that she and the husband each executed wills in 2004.[58] The husband’s will relevantly provides that on his death all of his property goes to the wife and that if his wife does not survive him, then all of his property goes equally to Mr G and Mr E, but not to his surviving son from his first marriage Mr F.[59] Clause 5 of that will also stated:
Mr F… has been omitted from any benefit or bequest pursuant to this Will as I have previously provided him with financial benefit during his lifetime.[60]
[58] Paragraph 16 of the affidavit of the wife sworn and filed 13 September 2018.
[59] Annexure L-6 of the affidavit of the wife sworn and filed 13 September 2018.
[60] Annexure L-6 of the affidavit of the wife sworn and filed 13 September 2018.
In essence, the wife’s position was that as the husband has a terminal illness with a clear and limited life expectancy, he does not have future needs and accordingly an adjustment needs to be made in her favour, as the party who does have future needs.
The wife relied upon Jurlina & Jurlina [2014] FamCA 284 (“Jurlina”) and Morcomb & Lennox [2016] FCCA 4885 in support of this argument.
Jurlina is a decision of Aldridge J of the Family Court. In that case, the husband was terminally ill. The wife had the care of one of the parties’ sons, Mr F, who was profoundly disabled. The court accepted that post-separation, the wife had continued to care for Mr F, whose condition had deteriorated.
The court also accepted that the husband’s health was very poor and that he had limited life expectancy. The medical evidence showed that the husband was expected to survive for between nine and twelve months. In considering how this factor should be taken into account, Aldridge J referred to the case of Re Lawrie & Lawrie (1981) FLC 91-102 in which Fogarty J said:
It is appropriate and, in my view necessary, to consider the relative future needs of the parties in determining what is a just and equitable order under sec 79. …where in any case it is clearly established that the future financial needs of a party will terminate (or perhaps significantly diminish) upon the happening of a definite future event, it is proper to take that into account…
The effect of the orders here are to give the husband security of the home for the balance of his life, and then provide the wife with a small additional capital sum in excess of fifty per cent directed to providing her with modest accommodation and comfort for the balance of her life, a result achieved not of the expense of the husband but at the expense of his estate.[61]
[61] Re Lawrie & Lawrie (1981) FLC 91-102 at 76,750.
Ultimately, in Jurlina, Aldridge J ordered that the wife receive 58% and the husband 42% of the pool. Importantly, he also ordered that the husband be permitted to remain in his home for the remainder of his life. In coming to his decision about the wife’s percentage of the pool, Aldridge J stated:
It is a substantial sum but it recognises that the primary care and support for Mr F will fall solely on the wife’s shoulders. This is a large burden both in financial and non-financial terms. It recognises that the husband will need some care and support but his life expectancy is short.[62]
[62] Jurlina & Jurlina [2014] FamCA 284 at [152].
The adjustment in the wife’s favour (which I note was significantly less than the adjustment sought by the wife in the present proceedings), was in part dependent on the ongoing needs the wife would have in caring for the parties’ disabled son.
Counsel for the wife also referred to a decision of this court in Morcomb & Lennox [2016] FCCA 485 (“Morcomb”), a decision in which his Honour Judge Brewster undertook a review of some of the decisions which have grappled with this issue. Ultimately, Judge Brewster concluded that it was just and equitable to make orders which saw the respondent receive 67% of the asset pool.
It was submitted on behalf of the wife that I should follow the reasoning in Morcomb. In that case, Judge Brewster also referred to the Full Court decision in Tasmanian Trustees Ltd v Gleeson (1990) 14 Fam LR 189 (“Gleeson”) which involved a marriage for some twenty years and a pool comprising one major asset and adjoining land, valued at just over $60,000. At the time of trial, the husband was terminally ill and sought an adjustment of 70% in his favour on the basis that he was suffering a chronic degenerative neurological condition. The trial judge reserved his decision but prior to that decision being handed down, the husband died. The trial judge found that until separation, the “parties had made an equal contribution to the acquisition, conservation and improvement of the former matrimonial home, its furnishings and equipment.”[63] Post separation, the trial judge found that the wife paid all outgoings associated with the former matrimonial home. The husband’s executor was substituted as a party to the proceedings and the judge dismissed the application for an order under section 79(8) by the husband’s executor.
[63] Tasmanian Trustees Ltd v Gleeson (1990) 14 Fam LR 189 at [190] per Nygh J.
The husband relied upon the decision in Menzies & Evans & Evans (1988) FLC 91-969 (“Menzies”) where Smithers J considered what adjustment ought to be made in circumstances where the wife had died after proceedings were issued but before the proceedings had concluded. In that case, the wife’s executor was granted leave to intervene in the proceedings.
There are a number of important aspects which need to be noted in Menzies:
a)the case was run on the basis that if the matter concluded prior to the wife’s death, it would have been appropriate for the court to make orders dividing the asset pool between the parties equally; and
b)the husband was also in poor health and following orders made in 1987, proceeded by his next friend.
After discussing the evidence filed in the proceedings about the contributions which each of the parties made to the accumulation and maintenance of the asset pool, Smithers J noted:
In these circumstances the agreement at the trial as to a probable order for equal division of the property of the parties had the wife not died, can be seen to be based, to a very considerable extent, upon the contributions of each of them during this long marriage. Needs of the parties would obviously have been a factor. However, given the length of the marriage, the respective contributions, and the amount of the assets available to them, it is difficult to see that their needs would have been of particular significance in relation to the outcome of the case had the wife not died; the parties would have had the need to support themselves over the remainder of their lives, each being in poor health, but with quite sufficient funds (given for example an equal division of the property) to cater for those needs.[64]
[64] Menzies & Evans & Evans (1988) FLC 91-969 at 77,007.
As noted in Menzies, section 79(8) of the Family Law Act 1975 (Cth) “was brought into the Act to prevent the abatement of proceedings instituted under the Act by reason of the death of one of the parties to the marriage.”[65]That provision clearly contemplates that the court has the power to make an order adjusting the property interests of parties to a marriage even after one of the parties has died. What, if any order is appropriate, must be determined by reference to the factors identified in section 79.
[65] Menzies & Evans & Evans (1988) FLC 91-969 at 77,008.
However, as noted in Menzies:
…The assets of the parties are not small. The order which would have been made, had it not been for the death of the wife, would have been likely to have reflected to a very great degree the relevant sec 79 contributions of the parties over a very long marriage; the respective needs of the parties would have been likely to have been well catered for by a division according to contribution.
It is not appropriate to consider any suggested merits of the persons who would benefit under the will of the husband should it be proved after his death…
The only significant difference in the analysis of the case arising out of the death of the deceased, is the obvious one that, when comparing the position of each of the parties, the deceased no longer has sec. 75(2) needs for the future, while the husband continues to have such needs. This does, in my view, alter the situation in a way which should be reflected in the outcome of the case. Even though his needs can be met out of income, the fact that he does have to meet them, and that the deceased does not have such needs, is the significant factor here. This aspect of the case should be of moderate significance only however in view of the amount of the assets, the age of the husband, and the extent of his future needs. Save to the extent necessary to reflect this aspect of the case it would in my view be wholly inappropriate that the deceased should be deprived of the benefits of her contributions over so many years. That is to say that it is still appropriate, following the death of the deceased, that the outcome of the case should depend, largely, upon the extensive contributions of the parties over so many years (emphasis added).[66]
[66]Menzies & Evans & Evans (1988) FLC 91-969 at 77,010.
The issue in Gleeson was whether an order ought to be made in the circumstances where the husband had died prior to judgment being handed down. The trial judge refused to make an order adjusting the parties’ property interests. On appeal, it was held that the trial judge had erred.
In considering this matter on appeal, Nygh J effectively noted that consideration must be given to both contributions and future needs when determining whether and if so, what order should be made under section 79. A party’s contribution claims ought not be extinguished upon their death. Nygh J said:
… it would be rare for a court to deprive one of the spouses of the marriage of the entire share to which he or she might be entitled by reason of contribution, having regard to the needs of the other party. But, as I pointed out, whilst it might be rare, it does occur and the obvious example is a situation where the estate is very small, consisting of a modest former matrimonial home, where one spouse has no earning capacity and the other spouse is unwilling or unable to contribute to the support and maintenance of the spouse in possession of the house and any dependants. There is no absolute principle in this Court that a party is not under any circumstances to be deprived of the fruits of his or her contribution, although it is proper to say, generally speaking, that the Court should be reluctant to take that step.
I consider that the proper approach in a matter such as this was taken by Smithers J in the case of Menzies and Evans and Evans… I wholeheartedly agree with the learned Judge in that case that the deceased has a prima facie moral entitlement to the share gained by contribution during his or her lifetime and, if this is so desired, to dispose of that share by will to persons who are strangers to the marriage. But the facts of this case are quite different to those in Menzies and Evans and Evans.
In Menzies and Evans and Evans, the estate was more than 10 times the size of the estate in this case. The husband in Menzies and Evans and Evans was of an extremely advanced age and his needs were small and adequately catered for out of the portion to which he was entitled by reason of contribution. In this case the estate is very small and the needs of the wife are overwhelming.[67]
Section 75(2)(o): any other fact or circumstance which, in the opinion of the court, the justice of the case requires
[67] Tasmanian Trustees Ltd v Gleeson (1990) 14 Fam LR 189 at [193]-[194].
The wife asserted that her future needs are greater also because of her emotional connection to the former matrimonial home given that she has lived there for most of her adult life and that she has retained the possessions of her son Mr E, who passed away in 2010, in his bedroom in that home. This is understandable and I have taken this into consideration in determining what is just and equitable.
What order is just and equitable?
I am bound by the reasoning in both Menzies and Gleeson. In each of those cases, the husband had already died and the court was required to consider what, if any orders were appropriate having regard to the factors in section 79, including both contributions and future needs.
In this case, the wife’s claims in relation to pool one appear to be based primarily on the basis of future needs, with minimal regard to the contribution arguments. Interestingly, in relation to her proposed pool two, the wife relies principally on contribution arguments. There appears to be some inconsistency in this approach.
In any event, having regard to the authorities discussed above, this court needs to consider both contribution arguments as well as future needs. If this is the case once one of the parties has already died, it is all the more so whilst both parties remain alive, even though one of the parties has a very poor health prognosis. As noted by Nygh J, this case does not, in my view, fall within those cases in which a party’s claim based on their contributions towards the acquisition, conservation and improvement of the property of the parties, should give way to the other party’s claim based on future needs.
The asset pool is sufficient to allow the wife to have a home, albeit not necessarily the home that she currently lives in, and an ongoing income from her pension. Either of the husband’s proposals, which in my view are at the upper end of the discretionary range open to this court would allow the wife to maintain a standard of living which is reasonable in all the circumstances.
By contrast, the wife’s proposal would see the husband retain a share of the parties’ assets which does not adequately reflect his contribution over the course of the parties’ relationship, in circumstances where the overall pool is sufficiently large to ensure that the wife’s future needs are met, particularly where she continues to have access to her invalidity pension.
Counsel for the husband put forward two proposals.
The first proposal saw an overall split of the parties’ assets, including the current day value of the wife’s pension on a 60/40% basis (in the wife’s favour). It was argued that the proposed orders under this approach would provide the wife with the opportunity to keep the former matrimonial home in the event that she was able to finance a payment to the husband in the sum of $560,000. If not, the former matrimonial home would be sold and the net proceeds distributed as between the parties on a 60/40% basis. On this proposal, there would also be a splitting order in the husband’s favour of $343,500.
The second proposal proffered by the husband would see the wife’s pension excluded from the pool altogether and an equal split of all remaining assets. Under this proposal, if the wife wished to retain the former matrimonial home, she would be required to make a payment to the husband in the sum of $700,000 and a superannuation split of $230,251. On the basis of the agreed value of the former matrimonial home, this approach would result in a similar overall result to the wife.
Option one would see the wife receive assets to the value of $1,789,930. Option two would see the wife receive assets to the value of $1,753,375.
By contrast, the wife’s proposal would see:
a)the wife receive assets to the value of $1,721,777 and the husband receive $737,904 from pool one; and
b)the wife also receive $471,181 and the husband receive $52,353.50 of pool two.
That is, the wife would receive a total of $2,192,958 and the husband would receive a total of $790,257.50.
For each of the reasons set out above, the wife’s proposal does not represent a just and equitable adjustment as it fails to give adequate consideration to the husband’s contributions to the acquisition, conservation and improvement of the assets of the parties.
Each of the husband’s proposals lead to roughly the same outcome. Given the slightly more advantageous figures to the wife under option one, I make orders in the terms proposed by the husband as option one.
For these reasons, I make the orders set out at the commencement of this judgment.
I certify that the preceding one hundred and forty-seven (147) paragraphs are a true copy of the reasons for judgment of Judge Mercuri
Date: 15 May 2019
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