LONG & LONG
[2015] FCCA 1443
•28 July 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| LONG & LONG | [2015] FCCA 1443 |
| Catchwords: FAMILY LAW – Property settlement – consideration of initial contributions financial and non-financial – consideration of post separation contribution and future obligations – distinction between immediately realisable assets and superannuation entitlements. |
| Legislation: Family Law (Superannuation) Regulations 2001, Part 6 |
| Pastrikos and Pastrikos (1980) FLC 91-987 Stanford and Stanford Lots of Questions – Very Few Answers, Martin Barfeld QC of the Victorian Bar |
| Applicant: | MS LONG |
| Respondent: | MR LONG |
| File Number: | PAC 4450 of 2012 |
| Judgment of: | Judge Coker |
| Hearing date: | 14 April 2015 |
| Date of Last Submission: | 15 April 2015 |
| Delivered at: | Townsville |
| Delivered on: | 28 July 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr Brian Kelly |
| Solicitors for the Applicant: | Fowler Predny Solicitors |
| Respondent: | In person |
ORDERS
BY WAY OF FINAL PROPERTY SETTLEMENT:
That the Husband pay to the Wife the sum of $463,200 within 60 days of the date of this Order.
That the Husband arrange refinancing of any joint debt attaching to the property situate at Property Q, in the State of New South Wales and being the whole of the land contained in Folio Identifier (omitted), (hereinafter referred to as “the property”) and release the Wife from any liability within 60 days of the date of this Order.
That the Husband be responsible for the preparation of all necessary documents to effect the terms of Orders 1 and 2 and that each party do all things and sign all documents necessary to effect such terms.
That in the event of payment as required by Order 1 not being made, then and in that event, the Husband and Wife forthwith do all acts and things and sign all documents so as to cause the property situate at and known as Property Q, in the State of New South Wales and being the whole of the land contained in Folio Identifier (omitted) to be listed for sale and as to such sale the following provisions apply:
(a)The sale be by way of public auction.
(b)The parties agree upon an estate agent and, failing agreement, the husband to nominate three agents who conduct business within a 5km radius of Property Q and the Wife to select one of those real estate agents.
(c)The reserve price for the purpose of any such auction be such as the parties agree, or failing agreement at a price determined by the auctioneer.
(d)Any offer within Ten Thousand Dollars ($10,000.00) of the reserve price be accepted by the parties.
(e)The Solicitor for the Wife shall have carriage of the sale.
That the parties contribute equally to the cost of conducting the said auction sale.
That pending completion of the sale of the property the Husband shall ensure that the property remains in a good and tenantable condition, fair wear and tear excepted and having regard to its state and condition as at the date hereof.
That pending the sale of the property the Husband shall be responsible for all maintenance and outgoings in respect of the property, including payment of all rates and taxes on the property and payment of any home loan and mortgage debt secured over the property.
In the event of any damage or deterioration in the condition of the property (fair wear and tear excepted) the Husband shall forthwith rectify or otherwise make good such damage or deterioration. Nothing within this order shall be deemed to impose upon the Husband any duty to render any improvements to the property having regard to its state and condition as at the date of these orders and this provision shall only apply as to direct deterioration other than fair wear and tear.
The net proceeds of the sale after deduction of agent’s commission, discharge of mortgage, legal costs and fees on the sale, adjustment of rates and taxes and all other expenses which may be reasonably incurred in respect of the sale be divided as follows:
(a)As to 60% thereof to the Wife.
(b)As to the balance then remaining to the Husband.
That save for the division of assets hereinbefore provided, each party be declared the sole beneficial owner of the motor vehicles, any other monies, furniture and chattels in his or her respective possession as at the date of these orders.
SUPERANNUATION:
Paragraphs 11 to 19 of these orders are binding on the trustees of the (omitted) Super Trust (the fund).
That in accordance with S.90MT(4) of the Family Law Act 1975, a base amount of Thirty Thousand Dollars ($30,000.00) (the base amount) is allocated to the Wife out of the Husband’s interest in (omitted) Superannuation being a sub-plan of the (omitted) Super Trust.
Pursuant to s.90MT (1)(a) Family Law Act 1975, whenever a splittable payment becomes payable in respect of the interest of the Husband in the fund, the Wife is entitled to be paid an amount calculated in accordance with Part 6 Family Law (Superannuation) Regulations 2001 using the base amount and there be a corresponding reduction in the entitlement of the Husband.
That the Trustee of the (omitted) Super Trust (“the trustee”) shall do all such acts and things and sign all such documents as may be necessary to:
(a)calculate, in accordance with the requirements of the Family Law Act 1975 the entitlement awarded to the Wife in the immediately preceding clause of this Order; and
(b)pay the entitlement whenever the trustee makes a splittable payment from the Husband’s interest in the (omitted) Super Trust.
That this order has effect from the operative time and the operative time is the beginning of the fourth day upon which this order is made.
That after service of the payment split notice in accordance with the Superannuation Industry (Supervision) Regulations 1999 (“the SIS Regulations”), the husband shall do all such things and sign all such documents as may be necessary, including but not limited to exercising the Wife’s request in accordance with the SIS Regulations, for the rollover or transfer of the non-member spouse interest to a complying superannuation fund of the Wife’s choosing in accordance with the SIS Regulations.
Until such time as the superannuation split to the Wife pursuant to these orders can be rolled over into a separate account to the Wife:
(a)The Husband will give to the wife written notice not less than 28 days before such time as they elect to retire from and/or take voluntary retirement and/or for any reason accept or become entitled to access in whole or in part his entitlement in the fund;
(b)The Husband will direct and authorize the trustee of the fund to communicate with the Wife and/or any person authorized by her in writing:
(i)To answer any reasonable inquiries as may be made by her or on her behalf from time to time regarding her entitlement in the fund; and
(ii)To give to the Wife and/or her authorized representative a copy of any notice of any application or request by the husband which seeks release of entitlements in the fund in so far as that release may affect the Wife’s entitlement in the fund pursuant to these orders; and
(c)The Husband or his servants and/or agents be and are hereby restrained from doing any act or thing which would prevent the Wife, her heirs, executors, administrators or nominees from receiving the benefits in the fund to which she is entitled pursuant to these orders.
In the event that the superannuation split to the Wife pursuant to these orders can be rolled over into a separate account to the Wife each of the parties will each do all such acts and things and execute all such documents as may be necessary to facilitate and to implement that rollover.
There be liberty to each party and the trustee of the fund to apply regarding the implementation of these orders affecting the interests of the Husband and the Wife in the fund.
SUPERANNUATION (SELF MANAGED FUND)
Paragraph 21 of these orders is binding on the trustees of the (omitted) superannuation fund (the fund).
That the Husband and the Wife do all such acts and things and sign all such documents, including but not limited to the signing of trustee minutes, to effect the resignation of the Wife as a director of the trustee or to transfer to the Husband from the Wife her shares in the trustee, and for the Wife to resign as a member of the fund.
IT IS NOTED that publication of this judgment under the pseudonym Long & Long is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT AT TOWNSVILLE |
PAC 4450 of 2012
| MS LONG |
Applicant
And
| MR LONG |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
These proceedings relate to an application by Ms Long, whom I shall refer to as the wife, seeking orders in relation to a property settlement to be effected between she and Mr Long, whom I shall refer to as the husband.
The wife’s application has been before the Court for some two and a half years and involved proceedings both with regard to property settlement and with respect to the parenting of the two children of the relationship. The matter previously proceeded to hearing in relation to children’s matters and orders have been made in relation to parenting.
THE APPLICATIONS
At the commencement of the hearing, a minute of the proposed order sought by the wife in relation to a property settlement was provided to the Court. It was comprehensive, covering nearly six pages and totalling 28 orders. The terms of those proposed orders are annexed to these reasons and marked with the letter A.
The proposed orders were the subject, however, of some variation in that whilst the wife initially proposed that orders should be made with regard to the sale of the former matrimonial home situate at Property Q, in the State of New South Wales, it was acknowledged that as the husband sought to retain that property, it may be that, subject to any orders being made, the husband would be able to retain the home, provided that a payment were made to the wife.
There was a more exact figure able to be relied upon in relation to the proceedings as well, in that the parties agreed, for the purposes of the proceedings, that the former matrimonial home would have a value of $1,000,000.00 upon sale. It was also acknowledged that there was a liability attaching to the property with an agreed value at the day of hearing of $227,618. For the purposes of calculation, therefore, it was acknowledged that the equity in the home could be relied upon as $772,000.00 or thereabouts.
It was also then acknowledged, though not until the conclusion of the proceedings, that the add-back which was sought in relation to non-market rental being paid by the husband, for the period that he remained in occupation of the home subsequent to separation, would not be pursued. This was clarified by the wife’s solicitors at the conclusion of the proceedings, particularly when the husband was seeking clarification as to whether he needed to address, in relation to that particular aspect of the matter.
It reduced to some significant degree the issues in dispute in relation to proceedings, though, as became obvious during the hearing, there were still fundamental differences between the parties, particularly with regard to issues of contributions, both at the commencement of the relationship and during the marriage, as well as in relation to post-separation contributions, both of a financial and non-financial nature. I shall come to those later in these reasons.
The husband responded to the proceedings that were before the Court and detailed his proposed orders in relation to the matter. The husband’s proposed orders were shorter in compass and were in these terms:
(1)That the father is to pay to the mother $328,466.00 for her full share of the equity in the current family home and that the house shall be transferred into the father’s name. This figure representing the balance remaining of 47.6% of the Total Asset Pool as presented in paragraph 22 of the accompanied affidavit.
(2)Or, that the father be given the opportunity to pay in cash to the wife her share of the equity in the family home as decided by the courts, based on the average of the three valuations provided as exhibits with the associated affidavit, and that upon full payment, the current family home be transferred into the father’s name and that the father be given 90 days from the date of these orders to pay this money to Ms Long or her lawyer.
(3)If the Father cannot pay the money, as mentioned above, in the appointed time then the home should go on the market immediately with a real estate agent agreed upon by both parties. If the parties cannot agree than one agent nominated by the husband and one agent nominated by the wife from amongst the real estate agents conducting business in the area.
(4)In the case that the family home must be sold then the previous solicitor who was involved in the carriage of the sale when we bought it shall also have carriage of the sale or any other solicitor agreed upon by the both parties.
(5)That both parties contribute evenly to any fees incurred in the transfer of title or the sale of the current family home.
(6)That, apart from the equity in the current family home, each party be declared the sole beneficial owner of motor vehicles, any other monies, furniture and chattels in his or her respective possession as at the date of these orders.
(7)That the total combined superannuation of both parties shall be split 30% to the wife and 70% to the husband.
INDICATION OF PRELIMINARY VIEW AND COMMENT
At the commencement of the proceedings I gave an early indication of what I thought were factors that would be of some significance in relation to the proceedings and whilst obviously indicating that it was a preliminary view and one that would obviously be open to variation, suggested that the parties might like to consider further negotiations if a preliminary indication were given.
I noted that in light of the duration of the marriage and the various contributions of different natures that were made by the parties, as well as there being, in my assessment, a need to consider the issue of superannuation separate from the immediately realisable assets, that an appropriate course might be to look at an equal division or 50/50 split of the immediately realisable assets. And, in light of the difference in age between the parties and therefore the more significant time that the husband had contributed to superannuation, for there to be a recognition of pre-relationship contributions, such that a settlement in the vicinity of 70/30 with regard to a superannuation split would be appropriate.
The parties took the opportunity to discuss arrangements with regard to a split to be effected between the husband and the wife, and the husband indicated that, having considered the comments that were made, he would amend his proposals in relation to property settlement to reflect a payment by the husband to the wife of $386,000, being 50 per cent of the apparent equity held in the former matrimonial home, and a 70/30 split, in relation to the issue of superannuation.
Notwithstanding that the parties no doubt entered into genuine attempts to resolve the matter by way of negotiation, the wife did not feel that that reflected an appropriate recognition of many of the issues which would be the subject of further consideration by the Court, and therefore the matter proceeded to hearing.
This case is one of those examples of a case where there is an obvious need to consider, not only the evidence that is before the Court but also to have the opportunity to view the witnesses that were required to be called and to consider their evidence, in relation to the proceedings.
I accept that the wife’s position, in relation to this matter was an understandable one, with regard to consideration of any initial indication of what might or might not have been appropriate in relation to the proceedings, and, in light of the opportunity to see the parties, accept that it was of course an appropriate stance to take by her.
Before addressing issues which need obviously to be considered in relation to the matter, I wish to specifically note one matter which was alluded to by counsel for the wife, at the commencement of the proceedings. It was simply a recognition of the fact, that whilst the husband and the wife in this matter were unable to reach agreement as to a settlement to be effected between themselves, it was based in no way upon concerns that arise from malice or determination on the part of one party or the other to cause hurt or distress to the other.
Quite simply these parties were two decent, caring and considerate parents and partners. Their relationship had, unfortunately, broken down, but as was identified by counsel for the wife, there were no elements of violence, drug use or abuse, alcohol use or abuse, or inappropriate or neglectful parenting of the children. Both the husband and the wife were decent, concerned and considerate parents and partners in the relationship, and in many respects it is a great tragedy that the relationship was not able to be one that continued through until the end of the parties’ lives.
However, that does not in any way affect the need for the Court to make appropriate findings and determinations based on the evidence available in respect of the proceedings. As I indicated earlier in these reasons, the parties sought to simplify the matters that were required to be determined. For example, whilst there were a number of incidental matters which required some consideration, in relation to the matter, for example, relating to motor vehicles retained by each party as well as funds that one or other removed from accounts or drew down from the mortgage, there appears quite properly to have been an acceptance that they were of approximately equal natures and therefore were not sought to be included in any final determination.
In fact, there were only really two assets which were sought to be considered by the Court, in relation to its determination. That was the equity in the former matrimonial home and its distribution and the division of superannuation entitlements held by the husband, it being the case that the wife’s superannuation was minimal in the extreme, perhaps only $3000 or thereabouts and therefore below the threshold of what would in any event have been splittable, between the husband and the wife.
The parties have conducted these proceedings in a most appropriate manner. It should specifically be noted that the husband was self-represented but that, in my assessment, to no real extent or at all affected the way in which the matter was determined. He is a (occupation omitted) by profession and calling and is no doubt a man capable of both consideration of the principles of law at a high level, as well as a most competent and composed advocate on his own behalf.
Whilst the husband called, understandably on occasions, for assistance in respect of matters that might give rise to objections or otherwise, without any shadow of a doubt he was certainly one of the most impressive self-represented litigants that could have been imagined, in relation to proceedings before the Court.
THE EVIDENCE
Only the husband and the wife were required for cross-examination. It should be noted, however, that the wife also relied upon the evidence of her mother and her father, Mr A and Ms S.
Mr and Ms S filed affidavits on 13 March 2015. The husband did not seek to cross-examine them in relation to such matters as might have fallen in respect of their evidence, though he made it clear and it was, I would think, accepted that he challenged certain of the matters contained within the affidavit filed by both Mr and Ms S, particularly with regard to statements such as those contained in paragraph 7 of Mr A’s affidavit relating to the cost of renovations to a property he purchased and which was occupied by the wife amounting to $32,000.
In that respect, the husband simply noted that there were no receipts provided in relation to the claims and he was not at all satisfied that the figures that were relied upon were accurate. He also noted, again understandably, that whilst Mr and Ms S made reference to the need for them to recoup from the sale of the Property C property, an amount equivalent to $414,675 AUS, what they needed to recoup was in no way reflective of what might then automatically fall as being required to be paid by the husband to the wife, by way of a property settlement.
As was emphasised and was quite correct, there was no certainty or assurance that the wife would buy from her parents the property at Property C or that it was in fact worth the amount which Mr and Ms S suggested they would need to recoup.
I accept otherwise the statements contained within the affidavits of Mr and Ms S, particularly with regard to their intent and desire to assist their daughter and grandchildren to ensure that there was a home over their heads rather than, as was for at least some period, a situation of the mother and children living in a refuge, as well as accepting that the purchase of a property in Australia, when they were (country omitted) residents, was not part of any retirement investment plan held by them.
More particularly, then, noting that there was agreement in relation to the valuation of the property, I turn to the evidence of the husband and the wife. As I indicated previously, both the husband and the wife were, in my assessment, decent, caring and considerate parents and partners to a marriage. Unfortunately that relationship broke down, and, as there was no agreement, it was necessary to hear evidence from the parties.
Notwithstanding those positive assessments in relation to both of the parties, there is, as is almost invariably the case, some concerns and criticisms that arise in relation to each. For example, the husband was understandably concerned that the wife had not been, as he would have suggested was required, full and frank in relation to issues with regard to the income received by her from her employment with (employer omitted).
The wife is a (occupation omitted) by profession and had work with (employer omitted) in that capacity. She was paid at a rate of $57 per hour and this reflected income for part-time employment received by her in the vicinity of $1250 to $1400 per fortnight, depending on the exact number of hours worked there being it would appear from pay slips, some variations between 22 hours and 25 hours per week. It was certainly acknowledged, however that she was not working full time.
What troubled the husband and what was not it would appear, disclosed clearly in earlier information, was the fact that the wife attended to a number of (employers omitted) in her capacity of working for (employer omitted) and that there appeared to be some form of quota relating to the number of (duties omitted) done. And, if there were more than that quota attended to by her because of her working efficiently during the hours that she worked, then there was an extra payment received by her. That extra payment appears to have been $25 for each additional (duties omitted) done over and above those which were required in the normal conduct of her work with (employer omitted).
In the three pay slips which were provided, inclusions were made for an extra $25 per (duties omitted) to be paid for 10 additional procedures for the pay period ending 10 March 2015, four in the pay period ending 24 March 2015 and 12 for the pay period ending 7 April 2015. Obviously therefore the wife received pay in addition to her normal $57 per hour rate in an amount of $650 over those three fortnightly periods and that reflected extra income, it would appear, in the vicinity of $200 to $300 per week.
The husband’s contention was that that income should have been disclosed and information was not made available to him. That is the case and it was troubling that the wife had not been full and frank in relation to that particular aspect of the matter though it appears clear that she, like the husband, did provide additional information late in time and that there was no attempt to deceive the Court or the husband when specific calls were made. It was more a case of there simply being insufficient thought with regard to the information to be provided rather than I think any attempt to deceive the Court.
I would note however, that whilst the husband raised such concerns in respect of the wife with regard to those matters, it was similarly the case that counsel for the wife raised such suggestions or inferences in relation to the husband’s failure to provide his tax returns for the last three financial years. The husband was adamant that there was no attempt to mislead and, like the wife in this matter, I am satisfied that that was the case and that it was rather a situation of each simply not fully appreciating the need for extensive disclosure of various items of documentation that might have been held and which may have been of assistance in relation to the determination of proceedings.
Otherwise I must say that the wife generally was a most impressive witness. It is never easy to be cross-examined and certainly it would appear from experience to be an even more difficult circumstance for a person to find themselves in when they are cross-examined by a person having had a close relationship with that person formerly.
Notwithstanding that, both the husband and the wife in cross-examination conducted themselves in an exemplary manner. There was courtesy and respect and whilst the husband emphasised his concerns with regard to his future financial circumstances forcefully, there was no rancour in the exchange and similarly there was no apparent bitterness in the responses that were given by the wife.
To some extent, I gained the impression that the wife was quite restrained in her interaction with the husband and in the answering of his questions, that she was perhaps understandably, a little overawed or intimidated by the whole procedure. Her evidence, however was, I thought, compelling.
She was asked by the husband about a wide-ranging number of topics, including those to which I have referred in relation to her income, but also was asked about the differing views that she and the husband had with respect to issues such as the amount of work that each might have put into the relationship, both as a homemaker and as a parent, as well as being questioned as to why she sought different percentages in relation to any distribution of property to that proposed by the husband.
I thought that her answers in relation to such matters were considered and very sensibly presented. When asked about her reason for seeking an equal distribution of the husband’s superannuation entitlements of about $100,000, rather than a lesser amount as suggested by the husband and as was initially indicated by me in the vicinity of 70/30 in favour of the husband, she noted that she had minimal superannuation whilst the husband had more significant amounts. Further, she emphasised that though she had prospects for more work into the future, noting that the children of this relationship were only six and four and a half years, there was certainly ahead of her a period of 12 to 15 years where as she intended to continue her role as an involved parent in the children’s lives, she would only have the opportunity for casual work or limited work until such time as the children had attained their majority.
She confirmed, for example that at the present time she had employment for about 24 hours per fortnight and noted that that involved work only on Monday and Tuesday, but that as time progressed and in particular when the younger of the two children commenced preschool or school, then she might have greater opportunities for work but still only sought employment during periods when the children were engaged in school.
There would be obvious consequences if she sought work of another nature, for example full-time or permanent part-time work. The consequences would be twofold. Firstly, whilst there may be some certainty in the amount of income that would be received, there would also be expectations that the wife were required to work during periods that the children were in her care but on school holidays.
The proposals with regard to school holidays were agreed in earlier orders that were made and involved an equal division of the school holidays, such that even if it were acknowledged that there was perhaps six weeks of holiday time to be spent with each parent during the calendar year there would be only, one would expect, four weeks of leave available and that therefore the wife would have obligations or responsibilities with regard to the children which would mean that she would either have the expenses associated with their care whilst she worked or opportunities for leave without pay, which would have consequential financial consequences for the wife’s day-to-day circumstances.
She properly noted, therefore that she did not have the full earning capacity that might otherwise fall if she did not have the significant involvement and responsibility for the care of the children. Stemming from that she said, was a need to have a greater entitlement to superannuation than might otherwise have been the case. The argument that was put on the part of the wife, both through her counsel but also through her evidence, was an understandable one.
Insofar as the division of realisable property was concerned, the wife in her evidence, detailed her reasons for seeking a greater proportion than simply an equal proportion. As her evidence fell it became clear that whilst the initial indication given by me in relation to this matter was, I thought, reasonable in light of the evidence that was detailed in the material there were other factors that arose and which had been contemplated by the wife such as her more significant involvement in the day-to-day care of the children, though it was certainly acknowledged that each parent would have substantial and significant time with the children, as well as the limitations on her future earning capacity as a result of those responsibilities.
The wife’s position in relation to the matter became clearer and as I come to discuss the law and the application of the evidence in relation to the matter, I will address that more fully.
It was also apparent that the wife had not simply considered her own circumstances in relation to the orders that she sought with regard to property settlement. In fact, the husband cross-examined her quite extensively in relation to whether she had as he put it, “considered his needs in caring for the girls”. The wife indicated that she had considered that and when asked whether she was aware of the fact that he had significant time with the girls, she acknowledged that she had considered that and therefore was asked by the husband whether she then acknowledged that he would have similar expenses with regard to the children.
She said that she had considered that but did not accept that he would have expenses similar to her and went on to explain why that was the case. Quite simply, she indicated that whilst the father would have the children in his care for substantial and significant periods, including from the commencement of 2016, four nights in each fortnight, she would have obviously 10 nights in each fortnight and therefore would have greater needs with regard to the day-to-day expenses associated with the caring of the children.
Such an explanation is unanswerable and whilst the husband sought to press that he would have to have clothes for the children and school uniforms, as well as matters of that nature being dealt with, it was clear that no matter how that aspect of the matter was addressed, the fact was that whilst there might be expenses that both would be required to incur, though it would not be necessary if they were able to work together, for example, with regard to the joint purchase of uniforms and ensuring that they moved between each parent’s household, there would be additional expenses that would fall upon the mother, simply because in each fortnight she would have the children in her care for six additional days, to that of the husband.
The husband sought to emphasise that he would have greater travelling expenses because of where he lived and that, of course, is understandable, but overall I accept that the wife’s position in relation to the matter was an understandable one, and one which clearly emphasised the thought that she had put into her proposals, with regard to these proceedings.
As I say, apart from one passing concern about a less than comprehensive indication of income earned at the present time, I was generally most impressed with the wife and her position taken in relation to this matter.
Insofar as the husband was concerned, I found him in many respects to be an articulate, intelligent and impressive man but also, unfortunately, one who, despite his protestations to the contrary, was very focused on his own needs and wishes. Whilst he couched many of his statements in terms of what the girls would need and of his involvement of a substantial and significant nature, there seemed, I thought, to be far less appreciation on the part of the husband of the wife’s obvious needs, than of any consideration by him of what he would need, to be able to ensure that he was to continue providing for the children.
That was most obvious, I thought, in two particular respects. The first of those related to evidence called and submissions subsequently made with regard to the contributions of the parties at the commencement of, and shortly after, the establishment of the relationship between the husband and the wife. The husband was adamant that his contribution at the commencement of the relationship far outweighed that of the wife. He sought, unfortunately I thought, to diminish or minimise any real appreciation of what the wife brought into the relationship.
The husband, it was clearly understood, sold a property that was owned by him, within a matter of weeks of marriage and that that realised a sum of about $103,000, after payment of mortgage expenses and the like. The wife, however, had an interest in a property and it was, in fact, resided in by the husband and the wife for a period after marriage before its sale and then the subsequent purchase of other properties over time, prior to the parties relocating to Australia.
It appears clear that the wife had an initial equity in the home that she owned in (omitted), and whilst it appears clear that the husband did provide the payout in relation to the mortgage, approximately $70,000, as well as no doubt providing some physical labour and meeting some expenses with regard to renovations and improvements in respect of the home, the husband sought to give, I would think, no credit whatsoever to the fact that the wife owned the property. And whilst it was emphasised by counsel for the wife that she therefore provided what might be called the “seed capital” for the purchases and profits that were made into the future, the husband seemed determined to emphasise his own significant contribution, without appreciating that the property was initially owned by the wife, that it was no doubt a sensible purchase in light of the fact that within two years it increased in value from $105,000 to $195,000 at sale, and that there had only been about $30,000 or thereabouts spent on improvements.
Additionally, whilst the husband was at pains to acknowledge that he assisted the wife’s father and, on occasions, the wife’s mother and the wife in various works upon the property, there appeared to be little if any appreciation by him of the fact, that through the wife or through her family, much of the increase in value occurred. It was troubling because it reemphasised the husband’s view that his contribution was significantly greater or of certainly more value than would be the case with respect to the wife or members of her family.
A similar concern arose in relation to the circumstances post-separation. The husband continued to live in the former matrimonial home and of course, quite properly, paid the mortgage instalments required in relation to the home. What was obvious however, is that through his employment with the (employer omitted), there were additional funds available which could be utilised for proper purposes and, in fact, until separation, were utilised for the reduction of the mortgage that the parties had. Subsequently however, in fact within days of separation, the husband ceased those additional payments, making only the minimum payments required in relation to the property. What that meant was that he resided in the property at a much reduced rate than would be normally expected.
It appears clearly to have been acknowledged that an appropriate market rental in relation to the jointly owned property would have been in the vicinity of $650 to $700 per week. The husband’s payments, however, were significantly less than that and, in fact, meant that there was a shortfall between payments and market value, the wife says, of approximately $330 to $390 per week, dependent upon what might have been the market rental at different times, during the period post-separation.
What has occurred as a result of that action by the husband is that, as evidence fell, the husband has available to him in an account held for such purposes, but not in the name of the husband but, rather, held by the (omitted), an amount of about $47,000.00 that could have been utilised, as was previously the case, in reducing the amount owing in respect of the mortgage. It is therefore understandable that the wife, at least initially, sought to include some component of payment back, in relation to rental which was not received by her.
The husband, though as I have noted an intelligent man, seemed unable or unwilling to recognise that he had had the benefit of those moneys to the complete exclusion of the wife. By that I mean, that no matter what might be the outcome of these proceedings, the husband will have, as was emphasised by counsel for the wife, an immediately available sum of $47,000 or perhaps more, to be utilised toward reduction of any mortgage or other contractual obligations that he has, and that is a financial resource available to him and would have been an amount that could have been reduced on the mortgage, therefore providing a more significant equity than the $772,000 or thereabouts, that presently is available.
As I say, what troubled me in that regard is that, again, the husband seemed unable or unwilling to recognise that his actions were of a self-centred nature. Whilst he sought to provide for himself, he emphasised that the wife would be similarly able to do so, without appreciating that both could have jointly benefited from such an arrangement otherwise being continued, as was the case prior to separation.
As previously indicated, there was also significant criticism of the husband, with regard to his failing to make available the tax returns which were called for late in time. It was suggested that I should draw an adverse inference in that regard and that it could be suspected that the husband did not produce the documents when called for, even though he could have done so simply by entering into the Australian Taxation Office portal and downloading documentation, because they would have shown a different indicator of income available to him.
I am not satisfied that such an inference could or should properly be drawn. The husband has certainly provided significant indicators of moneys available to him, both taxable and non-taxable, through his work as a (occupation omitted), and I am satisfied that there was no intent or desire to mislead or deceive the Court or the wife, in relation to his financial circumstances.
What I am concerned about, however, is that whilst there was no intent to mislead the Court there was certainly an inability on the part of the husband to acknowledge that there were other considerations than simply his needs and wants which were to be considered, in relation to these proceedings.
Additionally, one other matter needs to be addressed, not so much because it is, in my assessment, relevant with regard to a property settlement to be effected between the parties, but because it permeated, at least from the perspective of the husband, much of what occurred in relation to the proceedings. That factor was the husband’s distrust of the wife.
I did not gain any impression that the wife was manipulative, controlling or deceitful in her actions. Notwithstanding that, the husband indicated that shortly after separation he was the victim of some form of computer hacking and that information with regard to his bank accounts and financial circumstances was used to his detriment. He considered that it was an action of the wife, and whilst indicating in these proceedings that he did not necessarily still hold that view, the impression that I gained, unfortunately, was that it was more a statement made by the husband in light of him thinking that he needed to say it, rather than that he actually believed it to be the case.
On a number of occasions, for example, he indicated that the wife was, in his view, untrustworthy, in that she would attempt to take the children away, that she would act in a manner which would be contrary to his opportunity for a relationship with the children, and notwithstanding the fact that the parties had been separated for some two and a half years, and the wife had not sought to act in any such manner, there appeared still to be an undercurrent of distrust and that then flowed through the husband’s dealings with the wife. That attitude, unfortunately, influenced his approach to the wife and to her needs, as opposed to what he might have considered his needs or even rights.
As I say, the husband was an intelligent man but, at least insofar as his appreciation of the wife and her contributions both financial and non-financial to the acquisition and preservation of assets, I gained the distinct impression that he was intransigent in his view that he was in all respects more significant in relation to the financial aspects of the relationship, as well as he noted in respect of the parenting.
In fact, toward the end of cross-examination the husband was asked specifically about those attitudes. He was asked whether he acknowledged that the contributions made by the wife as a wage earner, at least until the older of the children was born, was greater than the husband was able to contribute, because of the terms of his employment. His response was evasive. He did not acknowledge that that might have been the case or even suggest that there was some error in the calculations and that it was not correct. Rather, he simply indicated that he hadn’t made reference to such matters in his most recent affidavit material because Judge Halligan had indicated at an earlier time, that it was not relevant.
I also indicated that I did not think the contributions made by one or other through wages at different times in the relationship would in any way outweigh the other, even if there were differences in income. But what was troubling is that the husband would not make the acknowledgment, even when it was clearly indicated to him that it would not be of any significance or relevance at all, in relation to the ultimate determination.
More particularly counsel for the wife then specifically put to him that until at least the birth of X, the contributions were equal. His response was definite and I thought telling. He said, “No. I contributed much more.” And when asked to clarify whether that was in respect of finances or as homemaker, and whether he acknowledged that they would be equal as a homemaker, he again responded most definitely, “No. I did more.”
It was troubling that the husband’s attitude was again one of minimising the involvement or contributions of the wife and it did give rise to real concerns on my part, as to the complete veracity of the evidence and the reliability of the husband’s evidence in these proceedings, particularly when it came to any assessment of contributions of a financial or non-financial nature.
THE LAW:
I turn then to the matters that need to be considered pursuant to the law in relation to these proceedings Section 79 of the Family Law Act 1975 defines the court’s powers in determining applications for property settlement. Subsection (2) of section 79 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) sets out the matters the court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters include:
(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 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)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)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 approach to the determination of an application under section 79 is well established by authority (see, for example Pastrikos and Pastrikos (1980) FLC 91-987; In the Marriage ofLee Steere and Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage ofClauson (1995) FLC 92-595 and In the marriage of Whitely and Whitely (1996) FLC 92-684). The process ordinarily involves a multiple part procedure.
The court must first identify the assets, liabilities and financial resources of the parties and attribute a value to all assets, usually at the time of the hearing. Thereafter it must evaluate the contributions made by each of the parties as defined in section 79(4)(a) to (c). Finally, the court must consider the financial resources, means and needs of the parties, and other matters set out in section 75(2) in so far as they are relevant. An adjustment of the amount due to each party by way of contribution is then made by reference to the section 75(2) factors. It is not essential, however, that such an adjustment be made. Generally speaking, an adjustment is made because one party has greater needs and the other has stronger means. Section 75(2) is concerned with the process of arriving at a just and equitable result.
In determining what order the court should make under section 79, the court must be satisfied, in all the circumstances of the case, that the order to be made is just and equitable – not simply that the underlying percentage division of the net value of the parties is appropriate. In other words, in consideration of whether the overall result of the order in the property settlement proceedings, is just and equitable (see section 79(2)). It is the justice and equity of the actual orders that the court must consider, Russell v Russell (1999) FLC 92-877.
Section 75(2) of the Family Law Act sets out the matters which must be taken into account by the court when determining applications with respect to maintenance. This is the prospective element of the determination of the application for property settlement. The assessment of contributions during the marriage is the retrospective element.
In the Marriage of Ferraro, the Full Court said:
A now well established line of authority in this Court indicates the approach normally to be taken in the exercise of the discretion in s79 proceedings. That approach is firstly to ascertain the property of the parties at the time of the hearing, then to consider “contributions” of the parties within paras (a) to (c) of s79(4), and then to consider the matters in paras (d) to (g), more especially para (e) which takes up by reference the provisions of s75(2) and which are generally referred to as the “section 75(2) factors”.
In Hickey and Hickey and A-G for the Commonwealth (2003) FLC93-143 the Full Court of the Family Court approved the four step process to making orders under section 79 of the Family Law Act:
Step 1: Make findings as to the identity and value of the property, liabilities and financial resources of the parties as at the date of the hearing;
Step 2: Identify and assess the contributions of the parties within the meaning of section 79(4)(a), (b) and (c ) and determine the contribution based entitlements of the parties expressed as a percentage;
Step 3: Identify and assess relevant factors in section 79(4)(d), €, (f) and (g) and section 75(2) and determine any adjustments that should be made to the contribution based entitlements at step 2;
Step 4: Consider the effect of the findings in Step 3 and determine and resolve what order is just and equitable in all the circumstances.
(It is clear it is the Order that must be considered in terms of justice and equity, not the percentage split – Russell v Russell (1999) FLC 92-877).
The High Court’s decision in Stanford v Stanford [2012] HCA 52; (2012) 47 FamLR 481 has now modified that approach. In Erdem & Ozsoy [2012] FMCAfam 1323 (5 December 2012) Walters FM, as he then was, said of the majority decision in Stanford:
116. It is arguable that the effect of the High Court's decision in Stanford is that the first step in the property settlement exercise is to identify, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in their property. The second step involves ascertaining whether it is just and equitable to make an order altering the interests of the parties in their property. In most cases – relevantly, where the parties have separated and are no longer living in a marital relationship – the underlying assumptions that the parties had to the effect that the existing property ownership arrangements were functional (or perhaps irrelevant) and could be varied by agreement between them, no longer apply. That fact alone should ordinarily persuade the Court that it is just and equitable to make orders altering the parties' interests in their property. It is only after the Court has concluded that it is just and equitable to make such orders that it should proceed to take what might be regarded as the third and fourth steps – namely:
a) assess the extent of each party’s contributions under the various sub-headings described in section 79(4); and
b) thereafter, consider the financial resources, means and needs of the parties and the other matters set out in section 75(2) so far as they are relevant,
and in the process adjust the amount due to each party by way of contribution by reference to the relevant section 75(2) factors.
In Hobbs & Valonz [2013] FCCA 1999 Judge Cassidy adopted the approach set out by Mr Martin Barfeld QC of the Victorian Bar in his paper “Stanford and Stanford Lots of Questions – Very Few Answers”. The paper suggests the following approach which was adopted by Judge Cassidy:
“It can be now said after Bateman v Bowe that the approach is still one involving steps, albeit not to be followed ‘unthinkingly’. These appear to be:
o Declare and value the interest (both legal and equitable) of each party in property:
o Determine whether circumstances exist to make an order adjusting those interests and explain that circumstances. If the answer is yes (as it usually will be);
§ Evaluate and fix contribution;
§ Apply the s.75(2) factors;
o Formulate an order justified to give effect to the production of the evaluation.”
In Stanford, the majority explained in respect of whether it would be just and equitable to make an order would often be dealt with as follows:
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 the 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 end 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 section 79(4).
DISCUSSION
This relationship is at an end. The parties no longer live as a married couple and the functional arrangements that might previously have existed no longer continue. It is just and equitable, but even more so, essential, to make a property settlement order that severs the joint character of the parties’ finances. I am satisfied that it is proper to proceed in this matter.
Insofar as the assets of the parties are concerned, as indicated earlier in these reasons, it is not difficult at all to assess what the assets might be. Quite simply it is agreed that the significant asset, the home at Property Q, is valued at $1,000,000.00 for the purposes of calculation, and that there is a mortgage of a little in excess of $227,000.00, leaving an equity for the purposes of calculation of approximately $772,000.00. Also, there is the husband’s superannuation held in two funds, firstly with (omitted) Superannuation of $44,625.00 and in a self-managed superannuation fund “(omitted) Superannuation Fund”, with a value of $54,294.00. For the purposes of simplicity, noting that there would of course have been some small growth in the last few months, as well as contributions, I would assess the superannuation entitlements at this time at $100,000.00.
The other assets, as I noted earlier, included motor vehicles, chattel items, cash drawings that each party took at times subsequent to separation, though they are generally conceded to be of roughly equal value and are not sought to be included in any assessment, in relation to these proceedings.
The second step of any calculation or assessment therefore is to deal with the issues of contribution by the parties, both financial and non-financial. I have touched upon such issues in my commentary with regard to these proceedings, and certainly note that there where divergent view between the husband and the wife, in relation to what those contributions might be.
It was agreed, and I accept, that it was the appropriate course to follow, to consider the issue of the immediately realisable asset, the home and the equity in the home, as distinct and separate from the interest in the husband’s superannuation entitlements. Insofar as the home is concerned, it is the product of the financial contributions made by the parties, both at the commencement of the relationship and during the period of the marriage from 2003 through until separation in or about October 2012.
The husband, it appears clear and it is acknowledged, brought in a cash component of $103,000.00 and, no doubt, some other smaller chattel items. It was an easily calculated sum as it arose from the sale of the husband’s previously owned residence and resulted in the receipt by the husband of the amount of $103,000.00 or thereabouts, following the payment of mortgage and other expenses associated with sale of that property.
The wife had the interest that she indicated existed in the home at (omitted). That home was purchased, the wife says and it would not appear to be challenged by the husband, for $105,000.00 and whilst there was some difference between the parties as to exactly what might have gone in, I would accept that the wife had an equity in the property at the time that the parties commenced cohabitation of approximately $35,000.00.
I would also accept that the husband paid out the balance of the mortgage of about $70,000.00, once the parties were married and took up occupation of that residence. As well as that, each party contributed both financially and non-financially to improvements to the property, but I am satisfied that if there were increases in value over and above what might be simply seen as inflationary increases, because of a positive property market, they were improvements which weighed more heavily in favour of the wife.
I say that because, whilst the husband indicated that he performed certain works upon the property, the wife’s father performed similar works and, it was acknowledged, had greater expertise and experience in such areas, as well as there being contributions made by the wife and her mother, in the physical labours associated particularly with the painting of the residence. There is a greater contribution by the wife or on the wife’s behalf than would be the case of the husband, and I would also specifically find that where the value of the property appears to have significantly increased over a period of only two years, whilst there may have been renovations and improvements effected upon the home, at least to some extent, credit must also be given to the wife, in the purchase of the property in a location in which there was significant capital growth.
It is, as was emphasised by counsel for the wife, an issue of seed capital being brought into the relationship, and whilst the husband certainly contributed financially as well, I am not prepared to find that there was such a significant disparity between the contributions of each, that after the period of time that has passed between the commencement of cohabitation and separation, that there would still be a benefit in percentage terms, that would flow to one party or the other, though it was strongly pressed on the husband’s part, that that should occur.
Additionally, and of significance also, is the fact that the parties were married for six years or so before the first of their children arrived. During that time, both worked full time and I accept that there may have been differences in their earning capacity and would find on the limited evidence that is available, noting as I did the somewhat evasive character of the husband’s evidence, in relation to those early financial contributions, that the wife earned more and therefore brought more into the relationship, which would, of course, also balance any shortfall that there might have been between her contribution at the commencement of the relationship, to that of the husband.
As well, during the relationship, each performed various tasks, and I am not at all enamoured of the suggestion by the husband that he did more than the wife in every non-financial capacity, both as homemaker and in later years as parent, than had the wife. I am certainly more of the view that the parties’ contributions, financial and non-financial, from the commencement of the relationship to the time of separation, were of an equal though different nature.
It may have been, for example, that because of the husband’s work as a (occupation omitted), he was more often home and had the opportunity to perform certain of the tasks within the home, simply because he was immediately able to do so, but I do not accept under any circumstances that that would be of such a significant nature that it would in fact alter the equality of the contributions that were made by the husband and the wife during the relationship.
I similarly am not of the view that up until separation and certainly following the birth of the children, that the husband’s contribution as a parent was more significant and praiseworthy than would be the situation of the wife. Again, like in any relationship, the parties performed different tasks, but I am not satisfied that they were different to the extent that they would be reflected in a contribution alteration during the time of the relationship. In my assessment, in different ways, but of an equally valuable nature, the parties contributed during the relationship as well as at the commencement of the relationship and on balance, that the contributions were equal.
The circumstances changed, however, subsequent to separation. However the separation might have come about, the fact is that the marriage was at an end and again, however it might have come about, the wife has had the more significant involvement in respect of arrangements, with regard to provision for the children.
I accept without hesitation that the husband has made payments in relation to child support, and whilst there was some evidence called as to disputes or differences between the parties, in relation to who might or might not have been full and frank in disclosures with regard to their income and therefore capacity to provide for and pay child support, I am satisfied that contributions of an appropriate nature, particularly by way of child support, were paid by the husband. As well, the husband has been meeting expenses and costs associated with the children on occasions when they were in his care, but to suggest that they would outweigh or, in fact, even be equivalent to the costs or detriments that the wife has incurred is unreasonable in the extreme.
I accept without hesitation that the wife has limited her opportunities for employment, because of her wish to be involved in the parenting of the children and therefore she has only taken part-time work and, whilst certainly of a remunerative nature, has not reflected the totality of what she might have been able to earn, if she had worked full time. Additionally, there is the incontrovertible fact that the wife has, again, however it may have come about, been far more significantly involved in the day-to-day care of the children and therefore meeting the day-to-day expenses associated with the children.
It is clear also and it is significant, that the husband has had the opportunity to continue in occupation of the former matrimonial home, at a cost to him that was significantly less than would have been the market value. Whilst it is not sought to adjust for that amount, in light of the agreement with respect to the value being fixed at $1,000,000.00, it is clear that if the husband had continued the payments, which were able to be made and which were made prior to separation, at the level that they had previously been, then there would have been a significantly greater equity in the residence and therefore the wife has foregone an entitlement in that regard.
It is a factor of significance, because it also reflects issues with regard to contribution to the acquisition and preservation of assets, almost in a negative character, because the equity in the home of approximately $772,000.00 would have been significantly increased, if the husband’s $47,000.00, held in the (employer omitted) funds and able to be utilised by him, had been used to reduce the mortgage. There is, almost a double effect therefore in relation to that, in that it was not reflected in a higher equity in the home, but rather was reflected in a more substantial financial resource which would and will be, no doubt, immediately available to the husband, once any determination is made in relation to this matter.
In all of those circumstances, in my assessment, it is clear that there has been a greater contribution, both as a parent and otherwise, post separation, in the preservation of the assets of the parties by the wife and that it would appropriately be reflected in an adjustment in favour of the wife. Post-separation contributions, in my assessment, should then be considered in light of the various matters that I have referred to here, such that an adjustment of five per cent would be appropriate in relation to the final assessment of the contributions of each of the parties, to the acquisition and preservation of the assets.
Accordingly, I find that at least in respect of realisable assets, the appropriate position to be taken is that, in light of contribution, the percentages should be adjusted 55 per cent in favour of the wife and 45 per cent in favour of the husband.
I turn then to the third of the steps required to be considered in relation to an assessment of property settlements, often referred to as the section 75(2) factors. In that respect, there are conflicting issues that need to be considered. There are many matters that take some degree of relevance, in relation to such proceedings. Section 75(2) of the Family Law Act is in these terms:
(2) The matters to be so taken into account are:
(a) the age and state of health of each of the parties; and
(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; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(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; and
(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; and
(g)where the parties have separated or divorced, 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; and
(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; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
(m)if either party is cohabiting with another person - the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(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; and
(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 to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
Of particular significance, however, both in relation to the realisable assets and also in relation to superannuation, which I intend to deal with separately, are a number of the various factors to be taken into account.
Firstly, the age and state of health of the parties, and in particular the difference in ages of the parties, the wife being 33 years of age and the husband being 41 years of age. The significance of that is twofold in my assessment. Firstly, it is significant in that with respect to superannuation in particular, the husband contributed to or established the seed capital with regard to superannuation entitlements well prior to there being any relationship with the wife. It is a factor which needs to be considered, and whilst it was understandably emphasised by counsel for the wife that there were no figures available in that regard, a notional consideration of 10 per cent was acknowledged by the wife, such that rather than 60/40 distribution being sought in relation to superannuation, it was an equal distribution.
Additionally, however, there is the fact that there is an eight year age difference between the parties and therefore, subject of course to continued employment and good health, there is a distinction to be drawn between the future ability to acquire and accrue superannuation. Quite simply, if a notional retirement age of 65 were adopted, though that may not be the case by the time either of these parties reach that age, the husband has approximately 24 more years of employment ahead of him, whilst the wife has approximately 32 years.
Noting that they both have qualifications and callings, and that there would be the obvious opportunity for the wife to continue in employment, certainly for many years after the children no longer need her day-to-day care and supervision, that is a factor which is of significance, in relation to the circumstances of each of the parties. It is a factor which, at least to some degree, weighs in my assessment in favour of the husband, particularly with regard to the element of a determination of entitlements, in relation to superannuation and any split that might properly be effected.
Balanced against that, however, and of particular significance, is the issue of one or other of the parents having care and control of a child of the marriage, who has not attained the age of 18 years. As I commented earlier in these reasons, whilst the husband has and will continue to have significant and substantial time with the children, it cannot be ignored that the wife will have significantly greater or more substantial responsibilities in relation to the care and supervision of the children, and that is a factor which weighs in favour of the wife.
Similarly, the matters that arise pursuant to section 75(2)(d), relating to the commitments of each party that are necessary to enable the party to support himself or herself or a child or another person that the party has a duty to maintain, weighs in favour of the wife. It does so for two reasons, firstly because the wife simply will have more time with the children and therefore correspondingly more expenses associated on a day-to-day basis with providing for the children, but also it correspondingly has an effect upon her capacity to earn, to the utmost what she might be able to earn because of her express desire, and one which is understandable and accepted, that she wishes to maintain, at least for a decade and perhaps more, the significant involvement in the day-to-day life of the children. There is therefore the corresponding reduction in what she might or might not be able to earn through employment. That also is a factor which weighs in favour of the wife.
Interestingly, and of significance, the husband made great sway of the terms generally of section 75(2)(g) of the Act, relating to a standard of living that is in all the circumstances reasonable. With respect, though the husband emphasised that as a factor of real significance, he failed, in my assessment, to fully appreciate the real meaning of such a consideration.
It does not, under any circumstances, mean that there should be a diminution in the entitlement of one party so as to ensure that the other party is able to maintain the lifestyle or circumstances that previously existed. The husband, understandably, wishes to retain the interest in the home at Property Q. He emphasises that if the wife were to receive more than 50 per cent, or in fact even in the vicinity of 50 per cent of the equity in the home, then his mortgage would be a substantial one, certainly well in excess of half a million dollars, and that there would be difficulties in him being able to meet such payments and that therefore, he might lose the home.
It was emphasised by him that if that was the case, it would not be “fair”, because the standard of living that he would have would be reduced. The fact is, however, that when, and I emphasised this on a number of occasions during the hearing, the matrimonial “pie” is divided between the parties, each takes less than would be the totality available.
It does not, however, effect a division between the parties that is just and equitable. It would be, of course, hoped that each parent would maintain a standard of living that was reasonable, but it is not the maintaining of a standard of living that was previously able to be enjoyed by the parties, because of the circumstances that existed, for example, when they were together and sharing a residence or subsequent to separation, when the husband occupied the residence at a reduced payment for a period of some two and a half years.
The fact is that the greater consideration and certainly the more legitimate consideration is to effect a reasonable and appropriate distribution between the parties, rather than one that simply reflects one party or the other’s desire to continue to live as they have before, and where they had before.
Perhaps similar to those matters that I have already commented upon, arising from the provisions of section 75(2)(c) and (d) is the consideration that arises pursuant to the provisions of section 75(2)(l) relating to the need to protect a party who wishes to continue that party’s role as a parent. In particular, the wife will continue the primary role as a parent of these children and it will have consequences for her. In particular, it will directly affect her capacity to earn income and that is, as previously noted, a factor to be considered.
It is also necessary to note that whilst the husband will have substantial and significant time, even if he were to have equal time with the children, there will not be any corresponding effect upon his capacity to earn in his role as a (occupation omitted). He would continue in that role. It may mean that there would be different circumstances with regard to his work and how that was to occur, but there would be no corresponding effect upon his earning capacity and that again is a factor which weighs in favour of the wife.
Finally, and it was stressed on the part of the wife, consideration should be given to the general catch-all that arises pursuant to the provisions of section 75(2)(o) of the Act, relating to any other fact or circumstance that in the opinion of the court, the justice of the case requires to be taken into account.
In this instance, it was emphasised that almost immediately upon separation, the husband acted in a manner which gave rise to direct consequences upon the wife. The first consequence was that by ceasing the payments that were previously made from the (employer omitted), the equity in the home now is not as great as it would have been and flowing from that, the husband has available to him an amount of approximately $47,000, which is a financial resource. It is a factor which has some influence in relation to this matter because it does significantly alter the circumstances that would otherwise have been in place if the payments which were previously being made had continued.
Whilst there is no suggestion and I do not find that the husband has acted in a manner that was illegal or otherwise deceitful or misleading, he certainly has acted in a manner which has provided greater benefit or resource for himself and a reduction in benefit or resource for the wife. This will have an effect upon her now and into the future, such that it is again one of those matters which weighs, at least to some degree, in favour of the wife and leans towards a further adjustment that should properly be made with regard to the final distribution to be effected, between the husband and the wife.
Insofar as the realisable assets are concerned, therefore, I am certainly of the view that an appropriate distribution adjustment should be made pursuant to the section 75(2) factors and in that regard, again consider that a further five per cent would be appropriate, such that the final distribution of the realisable assets available for distribution between the parties, being the equity in the home at Property Q is 60/40 in favour of the wife. That would require a payment by the husband of $463,200.00 if he sought to retain the home.
Before turning finally, then, to the issue of superannuation and how any distribution should be effected in that regard, I would also note that the husband in his outline filed in relation to this matter, suggested that there should be other adjustments made with regard to the property of the parties, including some form of consideration being given to the costs of sale.
I would simply indicate that that is not, in my assessment, a reasonable consideration, firstly because the parties now have agreement as to value and therefore as to the equity, but also because it would be a benefit to the husband if he were able, as he suggests he wishes to do, to retain the property because there would be no need to incur costs of sale and therefore no need to make an adjustment in relation to such figures. In any event, if the husband is unable to effect the payment required, the home will be sold, and the wife will carry 60% of those costs, as she would receive 60% of the equity after payment of sale expenses.
Turning then to the issue of superannuation, as noted, there are, in my assessment, two factors which in fact weigh more heavily in favour of the husband than would be the case in respect of the distribution of the realisable assets, available for the parties. The first of those is the initial contribution made to the acquisition of superannuation entitlements, and whilst there is no figure available in that regard, it is clear that the husband has, through his employment, made significant contributions which have established the, “seed capital”, for the superannuation, which is not the case in the residence and the discussions with regard to that aspect of the matter.
It is, of course, impossible to assess what that contribution might be, but I am certainly satisfied that it is a factor that weighs in favour of the husband, as does the factor arising from the disparity or difference in ages of the parties and therefore the future capacity to contribute to the super funds of the parties. In the circumstances, I am of the view that an adjustment in favour of the husband is appropriate in relation to superannuation and whilst no doubt there is some entitlement held by the wife, it is, in my assessment, appropriate that there should be a distribution of 70/30 in favour of the husband with regard to superannuation.
To that end, therefore, I intend to make orders which would reflect a splitting of the husband’s superannuation entitlements from the (omitted) Superannuation to effect a $30,000.00 split, in favour of the wife.
Finally, and of course, I touched upon it earlier in these reasons, it is necessary to consider whether what is proposed in the orders that would then flow would be just and equitable and reflect an appropriate finalisation of the property matters between the parties. I am satisfied that such arrangements as would flow from the orders that I intend to make, in relation to this matter are reasonable, and reflect a just and equitable resolution of property matters. In the circumstances, therefore, the orders of the court will be, as detailed at the commencement of these reasons.
I certify that the preceding one hundred and twenty-five (125) paragraphs are a true copy of the reasons for judgment of Judge Coker
Associate:
Date: 28 July 2015
ANNEXURE A
1. That the Husband and Wife (hereinafter collectively referred to as “the parties”) forthwith do all acts and things and sign all documents so as to cause the property situate at and known as Property Q in the State of New South Wales and being the whole of the land contained in Folio Identifier (omitted) (hereinafter referred to as “the property”) to be immediately listed for sale and as to such sale the following provisions apply:
1.1The sale be by way of public auction.
1.2The parties agree upon an estate agent and, failing agreement, the husband to nominate three agents who conduct business within a 5km radius of Property Q and the wife to select one of those real estate agents.
1.3The reserve price for the purpose of any such auction be such as the parties agree, or failing agreement at a price determined by the auctioneer.
1.4Any offer within Ten Thousand Dollars ($10,000.00) of the reserve price be accepted by the parties.
1.5The Solicitor for the Wife shall have carriage of the sale.
2. That the parties contribute equally to the cost of conducting the said auction sale.
3. That pending completion of the sale of the property the Husband shall ensure that the property remains in a good and tenantable condition, fair wear and tear excepted and having regard to its state and condition as at the date hereof.
4. That pending the sale of the property the Husband shall be responsible for all maintenance and outgoings in respect of the property, including payment of all rates and taxes on the property and payment of any home loan and mortgage debt secured over the property.
5. In the event of any damage or deterioration in the condition of the property (fair wear and tear excepted) the Husband shall forthwith rectify or otherwise make good such damage or deterioration. Nothing within this order shall be deemed to impose upon the Husband any duty to render any improvements to the property having regard to its state and condition as at the date of these orders and this provision shall only apply as to direct deterioration other than fair wear and tear.
6. The net proceeds of the sale after deduction of agent’s commission, discharge of mortgage, legal costs and fees on the sale, adjustment of rates and taxes and all other expenses which may be reasonably incurred in respect of the sale be divided as follows:
6.1As to 60% thereof to the Wife.
6.2As to the balance then remaining to the Husband.
That there be an add back to the asset pool in the amount of $390.00 per week calculated from 8 October 2012 to 19 June 2014 and an add back to the asset pool of $329.00 per week from 20 June 2014 to the date of sale of the property to represent the value to the Husband of having had occupation of the former matrimonial home property to the exclusion of the Wife.
Notation: The amount of $390.00 per week is based on the market rental value of the property, being $700.00 per week, less the amount paid by the husband for the home loan ($255.00 per week) less an allowance for estimated management fees at 7.7%, say $55.00.
The amount of $329.00 per week is based on the market rental value of the property, being $700.00 per week, less the amount paid by the husband for the home loan ($316.00 per week) less an allowance for estimated management fees at 7.7%, say $55.00.
That the wife be paid from the husband’s share of the net proceeds of sale of the former matrimonial home a sum representing 50% of the add back calculated in accordance with Order 7 above.
That save for the division of assets hereinbefore provided, each party be declared the sole beneficial owner of the motor vehicles, any other monies, furniture and chattels in his or her respective possession as at the date of these orders.
SUPERANNUATION:
Paragraphs 10 to 18 of these orders are binding on the trustees of the (omitted) Super Trust (the fund).
That in accordance with S.90MT(4) of the Family Law Act 1975, a base amount of Forty Thousand Dollars ($40,000.00) (the base amount) is allocated to the wife out of the husband’s interest in (omitted) Superannuation being a sub-plan of the (omitted) Super Trust.
Pursuant to s.90MT (1)(a) Family Law Act 1975, whenever a splittable payment becomes payable in respect of the interest of the husband in the fund, the wife is entitled to be paid an amount calculated in accordance with Part 6 Family Law (Superannuation) Regulations 2001 using the base amount and there be a corresponding reduction in the entitlement of the husband.
That the Trustee of the (omitted) Super Trust (“the trustee”) shall do all such acts and things and sign all such documents as may be necessary to:
(a) calculate, in accordance with the requirements of the Family Law Act 1975 the entitlement awarded to the wife in the immediately preceding clause of this Order; and
(b) pay the entitlement whenever the trustee makes a splittable payment from the husband’s interest in the (omitted) Super Trust.
That this order has effect from the operative time and the operative time is the beginning of the fourth day upon which this order is made.
That after service of the payment split notice in accordance with the Superannuation Industry (Supervision) Regulations 1999 (“the SIS Regulations”), the husband shall do all such things and sign all such documents as may be necessary, including but not limited to exercising the wife’s request in accordance with the SIS Regulations, for the rollover or transfer of the non-member spouse interest to a complying superannuation fund of the wife’s choosing in accordance with the SIS Regulations.
Until such time as the superannuation split to the wife pursuant to these orders can be rolled over into a separate account to the wife:
(a) The husband will give to the wife written notice not less than 28 days before such time as they elect to retire from and/or take voluntary retirement and/or for any reason accept or become entitled to access in whole or in part his entitlement in the fund;
(b) The husband will direct and authorize the trustee of the fund to communicate with the wife and/or any person authorized by her in writing:
(i)To answer any reasonable inquiries as may be made by her or on her behalf from time to time regarding her entitlement in the fund; and
(ii)To give to the wife and/or her authorized representative a copy of any notice of any application or request by the husband which seeks release of entitlements in the fund in so far as that release may affect the wife’s entitlement in the fund pursuant to these orders; and
(c) The husband or his servants and/or agents be and are hereby restrained from doing any act or thing which would prevent the wife, her heirs, executors, administrators or nominees from receiving the benefits in the fund to which she is entitled pursuant to these orders.
In the event that the superannuation split to the wife pursuant to these orders can be rolled over into a separate account to the wife each of the parties will each do all such acts and things and execute all such documents as may be necessary to facilitate and to implement that rollover.
There be liberty to each party and the trustee of the fund to apply regarding the implementation of these orders affecting the interests of the husband and the wife in the fund.
SUPERANNUATION (SELF MANAGED FUND)
Paragraph 19-22 of these orders are binding on the trustees of the (omitted) superannuation fund (the fund).
The base amount allocated to the wife out of the interest of the husband in the fund is $10,000.00 (the base amount).
Pursuant to s90MT(1)(a) Family Law Act 1975, whenever a splittable payment becomes payable in respect of the interest of the husband in the fund, the wife is entitled to be paid an amount calculated in accordance with Part 6 Family Law (Superannuation) Regulations 2001 using the base amount and there a corresponding reduction in the entitlement of the husband.
That this order has effect from the operative time and the operative time is the beginning of the day upon which this order is made.
Within 14 days of becoming entitled to receive a superannuation benefit from the fund the husband will give the trustee of the fund:
(a) All such forms as necessary to enable it to determine the nature and quantum, of the wife’s superannuation entitlement and give the trustee of the fund;
(b) Any other related information it may reasonably require.
Until such time as the superannuation split to the wide pursuant to these orders can be rolled over into a separate account to the wife:
(a) The husband will give to the wife written notice not less than 28 days before such time as they elect to retire from and/or take voluntary retirement and/or for any reason accept or become entitled to access in whole or in part their entitlement in the fund;
(b) The husband will direct and authorise the trustee of the fund to communicate with the wife and/or any person on authorised by her in writing:
(i)To answer any reasonable inquiries as may be made by her and on her behalf from time to time regarding their entitlement in the fund; and
(ii)To give to the wife and/or their authorised representative a copy of any notice of any application or request by the wife which seeks release of entitlements in the fund in so far as that release may affect the wife’s entitlement in the fund pursuant to these orders.
(c) The husband his servants and/or agents be and are hereby restrained from doing any acts or thing which would prevent the wife, her heirs, executors, administrators or nominees from receiving the benefits in the fund to which she is entitled pursuant to these orders.
In the event that the superannuation split to the wife pursuant to these orders can be rolled over into a separate account to the wife each of the parties will each do all such acts and things and execute all such documents as may be necessary to facilitate and to implement that rollover.
There be liberty to each party and the trustee of the fund to apply regarding the implementation of these orders affecting the interests of the husband and the wife in the fund.
Subject to the trustee giving effect to the request by the [husband or wife] in accordance with paragraph 5 of these orders, the [husband or wife] at their own expense will:
(a)Tender their resignation as director of the trustee;
(b)Transfer to the [husband or wife] their shares in the trustee; and
(c)Resign as a member of the fund.
That the Husband and the Wife do all such acts and things and sign all such documents, including but not limited to the signing of trustee minutes, rollover requests and related documents, that may be necessary to rollover or transfer the entitlement of the Wife in the dun to another complying superannuation fund of the Wife’s choosing.
0
4
4