FAMILY COURT OF AUSTRALIA
| M & M | [2006] FamCA 913 |
FAMILY LAW– APPEAL– PROPERTY – Whether the trial Judge erred in determining the property available for distribution between the parties by excluding the balance of funds received by the husband on the termination of his employment and an alleged beneficial interest in a property purchased by the husband with his brother and sister-in-law and by including legal fees paid by the wife apparently from post separation income.
FAMILY LAW – APPEAL – PROPERTY – CONTRIBUTIONS – Whether the trial Judge erred in assessing the contributions of the parties.
FAMILY LAW APPEAL – PROPERTY – FUTURE NEEDS – Whether the trial Judge erred in assessing the future needs of the parties.
FAMILY LAW – APPEAL – PROPERTY – SUPERANNUATION – Whether the trial Judge erred in his approach to an interest by the husband in the SAS Trustee Corporation Pooled Fund under the Police Regulation (Superannuation) Act 1906 by taking an asset by asset approach and accordingly treating the husband’s State Superannuation entitlements differently from the other assets – Whether the trial Judge gave sufficient weight to contributions made by the wife to the husband’s State Superannuation interest – Discussion of ‘West and Green’ formula.
FAMILY LAW – PRACTICE AND PROCEDURE – Application by the husband to adduce further evidence.
Family Law Act 1975
BAR & JMR (2005) FLC 93-231
Cahill & Cahill (2006) FLC 93-253
Coghlan and Coghlan (2005) FLC 93-220
C & M [2003] FamCA 1204
Clauson and Clauson (1995) FLC 92-595
Harrison and Harrison (1996) FLC 92-682
Pastrikos (1980) FLC 90-897
Pierce and Pierce (1999) FLC 92-844
Trott and Trott (2006) FLC 93-263
Webber and Webber (1985) FLC 90-648
West and Green (1993) FLC 92-395
| APPELLANT: | M | |
| RESPONDENT: | M | |
| FILE NUMBER: | PAF 1488 of 2003 | |
| APPEAL NUMBER: | EA 54 of 2005 | |
| DATE DELIVERED: | 20 September 2006 |
| PLACE DELIVERED: | Canberra | |
| JUDGMENT OF: | Bryant CJ, Finn and Boland JJ | |
| HEARING DATE: | 23 September 2005 | |
| LOWER COURT JURISDICTION: | Family Court of Australia | |
| LOWER COURT JUDGMENT DATE: | 22 April 2005 | |
| COUNSEL FOR THE APPELLANT: SOLICITOR FOR THE APPELLANT: | Mr Batey Mark Brown & Associates | |
| COUNSEL FOR THE RESPONDENT: | Mr Connor | |
| SOLICITOR FOR THE RESPONDENT: | Abbott Tout | |
Orders
That the appeal be allowed.
That by consent the further evidence contained in the affidavit of Ms L filed 14 June 2006 and the affidavit of the husband filed 27 June 2006 be admitted.
That Order 1 of the orders made on 22 April 2005 be set aside and in its place the following order be made:
‘1.Within 14 days of the date of these orders the husband shall transfer to the wife the whole of his right, title and interest in the former matrimonial home and the wife shall indemnify the husband in respect of all liability with respect to the said property.’
That each party be at liberty to file and serve any written submissions in relation to the costs of the appeal within 28 days of the date of these orders.
That…
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- M & M [2006] FamCA 913
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- [2006] FamCA 913
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CaseChat Overview and Summary
The central legal issue before the court was whether the formulaic approach, as applied in cases like *West and Green*, was a legitimate method for determining a party's superannuation entitlement for the purposes of property division under section 79 of the *Family Law Act 1975* (Cth). The court was required to consider whether such entitlements constituted property capable of division or whether they should be treated as a financial resource.
The court reasoned that the formula in *West and Green* was intended to address future payouts upon retirement, not to assess contributions to the date of hearing. It noted that subsequent cases, including *Harrison and Harrison* (1996) FLC 92-682 and *Bartlett & Bartlett* (1996) FLC 92-721, had expressed reservations about the formulaic approach. The court affirmed that, in most instances, superannuation entitlements are not considered property capable of division under section 79. Instead, the proper approach is typically to adjourn proceedings or treat the entitlement as a financial resource under section 75(2)(f) or (j) of the Act. The court indicated that when a superannuation payout has been received, it should be included as property, with adjustments made to contributions for pre-marriage and post-separation periods.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
In West and Green (1993) FLC 92-395 the formula came into being, not as a means of assessing contributions to the date of hearing, but to allow for an order which would take effect in the future (upon the husband’s retirement). It was intended to reflect that future contributions to the fund would come from the husband, after a property division had been effected between the parties and with no conceivable contribution by the wife in the future. In particular Kay J said (at page 80,038) (emphasis added):`As the final payout figure will not be determined until such time as the husband retires from employment, and as the duration of the marriage compared to the duration of the years that the husband has been in the scheme will also not be determined until that time, it is appropriate in my view to create a formula which will clearly indicate precisely what the wife is to receive when the husband elects to collect his superannuation.’ Prior to the introduction of Part VIIIB into the Act, it appears to have been common amongst some lawyers to use that formula to quantify the ‘value’ of superannuation and to include the figure so arrived at, in the pool, as if it were property of the parties. In our view the ratio of West and Green was of narrow compass and may have been accorded an interpretation it did not warrant. Be that as it may, this formulaic approach has been criticised in a number of cases. In Harrison and Harrison (1996) FLC 92-682 the Full Court (Ellis, Baker & Warnick JJ) said (at page 83,084): ‘It must first be said that in most cases a spouse's entitlement to superannuation is not property and therefore is not capable of any order under the provisions of s 79. See Crapp and Crapp (1979) FLC 90-615, Coulter and Coulter (1990) FLC 92-104 and Mitchell and Mitchell (1995) FLC 92-601. The various attempts which trial Judges, in their ingenuity, have made to take superannuation entitlements into account by reference to precise mathematical calculations, although perhaps desirable from a practical point of view, nevertheless do not enable or entitle them to include such sums as part of the property of the parties, however calculated. It follows from what we have said that in most cases the proper approach to be taken by trial judges, when dealing with a party's entitlement to superannuation in proceedings for alteration of property interests pursuant to the provisions of s 79 of the Family Law Act, is to adjourn the proceedings under s 79(5) with or without the making of any order under s 79(6) or, in the alternative, to treat the superannuation entitlement as a resource, pursuant to the provisions of s 75(2)(f) or (j).’ In Bartlett & Bartlett (1996) FLC 92-721 the Full Court (Ellis, Baker & Coleman JJ), in dealing with an appeal from a case in which the trial judge had applied a West and Green type formula recognising the period of cohabitation as proportionate to the period of contribution in determining the sum to include in the property interests of the parties, averted to the difficulties with application of the formulaic approach saying that such case (at page 83,675): ‘…illustrates the difficulties associated with adopting the formula type approach and the care which must be taken, if that approach is adopted, to include in the considerations, the financial resource being that portion of the present value of the superannuation quarantined after the application of the formula. In our opinion, what the trial Judge should have done, was to have included all moneys which the husband had received following his retirement as property and then adjust his assessment of contribution in relation to the pre-marriage and post-separation periods.’