Ma and MN (No.2)
[2003] FMCAfam 269
•11 July 2003
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MA & MN (No.2) | [2003] FMCAfam 269 |
| FAMILY LAW – Property settlement – contributions – gift by parties’ parents are treated as contributions – superannuation splitting order – whether just and equitable. MAINTENANCE OF SPOUSE – Wife has care and control of two children of the marriage. |
Family Law Act 1975, ss.72; 75; 79; 90MS
W and W (1980) 6 Fam LR 538; FLC 90-872
Ferraro (1992) 16 Fam LR 1; (1993) FLC 92-335
McLay (1996) 20 Fam LR 239; FLC 92-667
Clauson (1995) 15 Fam LR 693; FLC 92-595
Rosati (1998) 23Fam LR 288; FLC 92-804
Pastrikos (1979) 6 Fam LR 497; FLC 90-897
Gosper (1987) 11 Fam LR 601; FLC 91-818
Kessey (1994) 18 Fam LR 149; FLC 92-495
Pellegrino (1997) 22 Fam LR 474; FLC 92-789
Pierce (1998) 24 Fam LR 377; (1999) FLC 92-844
Aroney (1979) FLC 90-709
Grabar (1976) 2 Fam LR 11,581; FLC 90-147
Anast and Anastopoulos (1982) FLC 91-201
Best (1993) FLC 92-418
Brandt (1997) FLC 92-758
Levick (Unreported) Family Court of Australia, Moore J, 31st January 2003
Schefe (1978) FLC 90-473
| Applicant: | AM |
| Respondent: | NM |
| File No: | CAM 2688 of 2002 |
| Delivered on: | 11 July 2003 |
| Delivered at: | Parramatta |
| Hearing dates: | 15 & 16 May 2003 |
| Judgment of: | Scarlett FM |
REPRESENTATION
| Counsel for the Applicant: | Ms Rees |
| Solicitors for the Applicant: | Nicholl & Co |
| Counsel for the Respondent: | Mr Miller |
| Solicitors for the Respondent: | Farrar, Gesini & Dunn |
ORDERS
Within one (1) month of the date of these Orders the applicant and the respondent are to do all acts and things and execute all deeds, documents, instruments and writings necessary to sell the former matrimonial home known as 17 J Street, C in the Australian Capital Territory being the whole of the land in Block 32 Section 73 (hereinafter referred to as “the property”) by private treaty at a price to be agreed between the applicant and the respondent or failing such agreement at a price determined by a valuation which shall mean a valuation by a registered valuer being a member of the Australian Institute of Valuers.
The applicant and the respondent are to do all acts and things necessary to secure that upon the sale of the property the proceeds of sale shall be paid in the following manner in priority:
(a)the amount required to discharge any registered mortgage upon the property;
(b)agent’s commission and auction expenses if any due on the sale;
(c)reasonable legal costs on the sale;
(d)the usual adjustment of rates and land taxes and any arrears thereof;
(e)the balance of proceeds to be divided between the parties in the following proportions:
(i)as to 57 per centum to the respondent; and
(ii)as to the balance to the applicant.
Pending completion of the sale each party will hold their respective interest in the property on trust for the other and neither party is to encumber the property without the consent of the other party.
Within one (1) month from the date of these Orders the applicant is to do all things necessary to transfer to the respondent all of his interest in the Toyota Corolla motor currently in the possession of the respondent.
The application by the respondent that the applicant pay to her the sum of $300.00 per week for her maintenance is dismissed.
Each party is to retain the sole right title and benefit to all other items of personal property and financial resources presently in their respective name possession or control.
Each party is to forgo any claim that he or she may have to any superannuation policy or benefit in the name of the other party.
The respondent is to be solely liable for any amount owing by her to Centrelink.
In default of either party doing all such things and executing all such documents as may be necessary to comply with these orders within seven (7) days of being called upon to do so then the Registrar or a Deputy Registrar of the Federal Magistrates Court shall be appointed pursuant to section 106A of the Family Law Act to execute such document in the name of the person to whom the direction was given and to do all acts and things necessary to give validity and operation to such documents.
All documents produced in answer to any subpoena other than exhibits may be returned.
The Application is removed from the Pending Cases List.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
CAM 2688 of 2002
| AM |
Applicant
And
| NM |
Respondent
REASONS FOR JUDGMENT
Application
This is a property application by the husband. The orders that he seeks (in a Minute of Order handed up in court) are to this effect:
a)
that the parties should sell the former matrimonial home at
17 J Street, C in the Australian Capital Territory, now occupied by the wife and the two children of the marriage;
b)that the parties should divide the net proceeds of sale equally, after paying out the amount owing on the mortgage, rate adjustments, agent’s commission and conveyancing costs;
c)that the husband’s superannuation should be split between the parties so that the base amount allocated to the wife is $45,000.00; and
d)that the parties should otherwise be declared the sole beneficial owner of all other items in their name or possession.
The wife opposes these orders. In a Minute of Order handed to the Court, she asks the Court to make orders to this effect:
a)that the husband transfer his interest in the former matrimonial home to her;
b)that the husband should transfer his interest in a Toyota Corolla motor car to her;
c)that the parties retain all items of personalty currently in their name or possession (including the husband’s superannuation); and
d)the husband should pay the superannuation surcharge debt.
The wife also seeks an order that the husband should pay her the sum of $300.00 per week by way of spousal maintenance.
The parties also sought parenting orders about the two children of the marriage. I made orders providing that the two children should reside with the mother (which was not contested) and that the father should have defined contact at the conclusion of the hearing on 16th May 2003.
Background
The husband is 34 years old and the wife is aged 33. He is an accountant by profession, employed on contract by Air Services Australia, and she is a hairdresser. The parties met in 1988 and were married on 17th October 1992. They were both working at that stage.
When the parties were first married, they moved into a house at
56 N Street, S in the ACT, a house owned by the husband’s parents. In 1994, the husband’s parents transferred the title to that residence to the parties. They sold that house in December 1999 and purchased the present residence at 17 J Street C in January 2000. They resided there together until 15th April 2002, when the husband left the former matrimonial home and commenced to reside with his parents.
There are two children of the marriage. The parties’ daughter A was born on 9th October 1995. Their son T was born on 9th November 1997. Both children are now at school. The children reside in the former matrimonial home with the wife, and have done so since their parents separated.
On 20th May 2003 the wife lodged an Application for Divorce. On
2nd July 2003 I pronounced a decree nisi dissolving the parties’ marriage.
Issues
The issues between the parties concern the way in which the property should be divided. The wife wants to keep the former matrimonial home and does not want a share of the husband’s superannuation. The husband wants a sale of the property and an equal division of the proceeds, with the wife receiving a share of his superannuation.
The husband opposes an order that he should pay spousal maintenance, claiming that the wife has a capacity to support herself by working at least on a part-time basis. The wife has the care and control of the two children of the marriage and wishes to remain as a full-time parent.
Principles to be applied
When dealing with applications to vary property interests, courts exercising jurisdiction under the Family Law Act must not make an order under the provisions of section 79 unless satisfied that, in all the circumstances, it is just and equitable to make the order (see sub-section 79(2)). It has been held that section 79(2) does not give the Court an independent power to effect “palm tree justice” and that what is just and equitable depends on a proper consideration of the factors set out in section 79(4) (see W and W (1980) 6 Fam LR 538; FLC 90-872).
Sub-section 79(4) sets out a number of matters the court must take into account. They 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 of the property of the parties of the marriage or either of them;[i]
b)the contribution (other than a financial contribution) made directly or indirectly or on behalf of a party to the marriage or a child of the marriage;[ii]
c)the contribution made by a party to the welfare of the family, including any contribution made in the capacity of homemaker or parent;[iii]
d)the effect of any proposed order upon the earning capacity of either party to the marriage;[iv]
e)any relevant matters referred to in sub-section 75(2);[v]
f)any other order made under the Family Law Act affecting a party or a child of the marriage;[vi] and
g)any child support under the Child Support (Assessment) Act 1989.[vii]
h)In dealing with applications under section 79 of the Family Law Act, the Full Court of the Family Court has made it clear that there are three steps to be followed by a court. First, the court must identify the property of the parties and ascertain its net value.
Second, the court must look at the contributions of the parties, following the principles set out in section 79(4).
Third, the court then considers the relevant factors as set out in sub-section 75(2). This may involve an adjustment in favour of one or other of the parties. This approach has been laid down in cases such as Ferraro (1992) 16 Fam LR 1; (1993) FLC 92-335 and McLay (1996) 20 Fam LR 239; FLC 92-667.
Where there is a claim for spousal maintenance as well as a property claim, the court should apply a further step in the process, so that the spousal maintenance claim should only be considered after the section 79 application (Clauson (1995) 15 Fam LR 693; FLC 92-595). A court may not increase a party’s share of the property as a way of avoiding the need for spousal maintenance (Rosati (1998) 23 Fam LR 288;
FLC 92-804), but, on the other hand, a person who secures a settlement under section 79 may no longer need to be maintained (see Pastrikos (1979) 6 Fam LR 497; (1980) FLC 90-897; Clauson (supra)).
The matrimonial assets
The parties’ legal advisers have submitted lists of the assets and liabilities of the parties. They have agreed on some matters. There is no agreement about the value of the chattels in the former matrimonial home, although the husband says that they are worth $30,000.00. The parties do not agree, either, about the value of the Toyota Corolla motor car in the possession of the wife. The husband places its value at $6,400.00, the wife says that its value is $3,500.00. I will take the lower of the two values as representing the minimum figure. The parties’ gross assets appear to be the following:
a) The former matrimonial home at 17 J Street, C ACT held by the parties as joint tenants (agreed value)
$485,000.00
b) Chattels at the former matrimonial home
$30,000.00
c) Wife’s Telstra shares (agreed value)
$6,465.00
d) Toyota Corolla (value disputed)
$3,500.00
e) Wife’s superannuation (funds withdrawn)
$2,598.00
f) Husband’s superannuation[1] (agreed)
$89,076.00
g) Wife’s bank account
$300.00
h) Husband’s bank account
$3,500.00
TOTAL
$620,439.00
[1] If the court does not make a superannuation splitting order
The gross value of the matrimonial assets is $620,439.00
The parties’ liabilities consist of an overpayment of family allowance to the wife by Centrelink. According to paragraph 119 of the wife’s affidavit sworn on 27th February 2003 she is making repayments of $20.00 per fortnight from her Centrelink pension and the debt stood at $775.60 at the date of swearing her affidavit.
The husband discloses in his Financial Statement two liabilities, a sum of $1,500.00 owing to MasterCard and a superannuation surcharge of $2,080.00. I am not satisfied that I should take these amounts into account. The credit card debt appears to have been incurred by the husband since the parties separated.
By subtracting the liability of $775.60 (which I shall round up to $776.00) from the gross value of $620,439.00 I arrive at a net value of the matrimonial assets of $619,663.00.
The contributions of the parties — section 79(4)
The Court is required to take into account three different types of contributions made by or any behalf of a party to the marriage.
Sub-section 79(4)(a) requires the Court to consider the financial contribution made directly or indirectly to the “acquisition, conservation or improvement of any of the property”. Sub-section 79(4)(b) requires the Court to consider the contribution other than a financial contribution to the “acquisition, conservation or improvement of any of the property”. Sub-section 79(4)(c), on the other hand, requires an examination of the contributions made by the parties to the welfare of the family, “including any contribution made in the capacity of homemaker and parent.”
When the parties were first married, on 17th October 1992, the husband was working as an accountant on a salary of about $35,000.00. The wife was working as a hairdresser, earning about $20,000.00 per year. They each owned a motor car. The husband had money in the bank, which he says in his affidavit of 17th April 2003 was about $10,000.00. He had a cheque account with a balance of $1,128.00 as at 16th October 1992[2] and a savings account with the Advance Bank. This savings account had a balance of $12,551.13 on 23rd September 1994, which had increased to $18,349.93 by 6th June 1995, so I am satisfied that the husband’s estimate of $10,000.00 at the date of the marriage is one that I should accept.
[2] Exhibit 3
The wife deposed in her affidavit sworn on 27th February 2003 that she had set up a bank account for “marriage and honeymoon expenses” and that she had saved about $10,000.00 by the time of the wedding. She also had a Term deposit of $10,000.00 and an Incentive Saver account with a balance of $9,000.00 at 27th November 1992. Her parents purchased a bedroom suite, mattress and linen for the couple.
The couple moved into a house at 56 N Drive, S, when they were married. The husband’s parents owned the house. They resided in the house free of rent until 1994. The husband’s parents transferred the title to the name of the husband on 6th June 1994. The home was a gift from the husband’s parents.
The parties agree that the decision of the husband’s parents to transfer the title of the property was on the initiative of the wife. The wife says that the husband’s mother said to both of them “It’s yours” but I consider that the gift of the home in 1994 and the earlier decision by the parents to allow the parties to reside in the property free of rent should be regarded as a contribution by the husband. The decisions in Gosper (1987) 11 Fam LR 601; FLC 91-818 and Kessey (1994)
18 Fam LR 149; FLC 92-495, make it clear that it is still open to the court, in an appropriate case, to regard such a gift as a contribution by the party to whom the donor is related. In Gosper (supra) it was held that where there has been a gift by a relative of one or both of the parties the first step is to determine the ownership of that gift. Normally the transfer of the title to the property would be the strongest indicator of the intention of the donor. In this case, the title was transferred into the name of the husband.
The decision by Chisholm J, in Pellegrino (1997) 22 Fam LR 474; FLC 92-789 is relevant here, also. In that case, the provision of
rent-free accommodation to the parties to a marriage by the wife’s parents was regarded as a contribution by the wife. In the case before me, the husband’s parents provided rent-free accommodation to the parties from the date of the marriage until the title to the property was transferred to the husband.
The initial contributions, in my view, significantly favour the husband.
The parties renovated the house before and during the marriage. The husband deposes that they were “able to accumulate sufficient savings to undertake these improvements due to the fact that we did not have to pay rent or have mortgage repayments to make during this period.”[3] The parties both worked.
[3] Husband’s affidavit sworn 17 April 2003, paragraph 9
The wife continued in her employment as a hairdresser until she was seven months pregnant with the parties’ daughter A, who was born on 9th October 1995. She did not return to paid employment outside the home, but remained as the primary carer of the children and attended to the domestic duties. After A was born, the wife commenced working from home on a part-time basis, cutting people’s hair. This work was done on a Saturday.
The parties sold the house at Stirling in 1999 for $226,000.00. They purchased the present house at 17 J Street C for $358,000.00. They borrowed the sum of approximately $130,000.00 from the Commonwealth Bank in order to complete the purchase.
At the time the parties were purchasing the house at C, the husband’s parents indicated that they wished to give some assistance to the husband’s brother in the same way that they had assisted the husband and wife. They agreed on a figure of $50,000.00, and the wife’s father, AP, provided this sum in August 1999. A copy of a handwritten receipt signed by the husband’s parents is annexed to the wife’s affidavit. Mr P also provided a further $50,000.00, in instalments of $10,000.00, between 4th April 2000 and 22nd May 2001. The husband and wife applied these later payments towards reducing the mortgage debt to the Commonwealth Bank.[4]
[4] Ibid, paragraph 15
The initial contribution by the husband’s family of rent-free accommodation followed by an outright gift of the freehold must still be given a considerable amount of weight (Pierce (1998) 24 Fam LR 377; (1999) FLC 92-844). The contributions by the parties during the time between the wife’s finishing work shortly before A’s birth until separation should, to my mind, be assessed as equal. The wife made a significant section 79(4)(c) contribution as mother and homemaker during that period.
The gifts by the wife’s family of a total of $100,000 should be regarded as a contribution on behalf of the wife (Kessey, supra). These amounts, provided late in the marriage, between August 1999 and May 2001, should be given significant weight. The parties separated in April 2002.
Taking an overall view of a period of cohabitation that lasted for about nine years and six months, the early contributions favoured the husband, then there was a period of about equal contributions, then there were significant contributions late in the marriage on behalf of the wife. I note that the husband was assessed for payments of child support once the parties had separated. The wife has had the benefit of the use of the former matrimonial home, which is now unencumbered by any mortgage. A termination payment from Air Services Australia when the husband changed over to working on contract was applied toward the mortgage debt (and was taken into account by the Child Support Agency in a Notice of Decision dated 11th July 2002)[5].
I consider that the overall contributions should be assessed as 60% by the husband and 40% by the wife.
[5] and see also paragraph 90 of the wife’s affidavit where she states that the husband’s long service leave and other leave balances amounting to $29000.00 odd were applied to the mortgage.
Sub-section 75(2) factors
Sub-section 79(4)(e) requires the Court to take into account “the matters referred to in sub-section 75(2) so far as they are relevant”.
I propose to consider them in order.
Sub-section 75(2)(a) requires the Court to take into account the age and state of health of each of the parties.
The husband was born on 30th March 1969, so he is now aged 34 years. The wife was born on 2nd November 1969. She is aged 33 years. Both parties appear to be in good health.
Sub-section 75(2)(b) requires the Court to consider the income, property and financial resources of each of the parties and their physical and mental capacity for gainful employment.
The husband works on contract as an accountant with Airservices Australia. He receives a base salary of $76,475.00 per annum, which comprises a cash component of $59,238.00, salary sacrificed items of $10,573.00 and Fringe Benefits Tax of $6,664.00. His employer superannuation contribution amounts to $13,623.00. He also has a bonus component of salary, but it is quite possible not to receive anything by way of a bonus in a year. Anything he receives is, quite literally, a bonus. The husband has a capacity to work as an accountant until he chooses to retire. He has a greater earning capacity than the wife does by dint of his professional qualifications.
The husband leases a Holden Vectra motor car. He resides with his parents, to whom he pays board of $250.00 per week. He has a bank account with a balance of about $3,500.00. If his superannuation is not to be split, it should be regarded as a financial resource. It has a value of $89,076.00.
The wife is qualified as a hairdresser and has worked in that occupation on both a full-time and part-time basis. She deposed in her affidavit that before the parties separated she was earning approximately $100 to $150.00 per week doing casual haircuts from home. At the time of swearing her affidavit, 27th February 2003, she was still doing casual haircuts and earning an average of $60.00 per week. She explains the reduced income in this way:
“Given that I have the full time care of the children, I have reduced the number of haircuts that I have previously undertaken. If I am able to do so, I undertake haircuts when the children are in the care of their father every second weekend.”[6]
[6] Wife’s affidavit, paragraph 98.
The wife currently has a Toyota Corolla motor car in her possession and has some Telstra shares that were valued at $6,465.00. Her superannuation monies were partly paid out, leaving her with a small balance. She has an account at the Commonwealth Bank with a balance of $300.00 and two other accounts in trust for the children, which I will not take into account. She has household effects and other items of personalty, including two diamond rings.
I note that sub-section 75(2)(c) requires the Court to consider whether either party, has the care and control of a child of the marriage who has not attained the age of 18 years. This is a significant factor in relation to the maintenance element in an order for alteration of property interests under section 79.
In this case, the two children A and T live with the wife. They are aged 7 and 5 respectively, so they can be expected to remain the mother’s responsibility for another eleven to 13 years. I am satisfied that this factor will call for an adjustment in favour of the wife.
Sub-section 75(2)(d) states that the Court must consider the commitments of each of the parties that are necessary to enable that party to support both himself and herself and also a child or another person that the party has a duty to maintain.
Neither party has any duty to maintain any other person apart from themselves and the two children.
Sub-section 75(2)(e) requires the Court to consider the responsibilities of either party to support any other person. Neither party has any responsibility to support any other person.
Sub-section 75(2)(f) refers to the eligibility of either party for a pension, allowance or benefit under any law of the Commonwealth, of a State or Territory, or another country, or under superannuation fund or scheme.
The husband is not presently entitled to any pension, allowance or benefit. He will be entitled to claim on his superannuation fund when he attains the age of 65, but his presently only 34 years of age. The wife receives Family Assistance and a Parenting Payment from Centrelink, but I understand these to be income-tested allowances and I do not propose to take them into account. She has a small interest in the Australian Retirement Fund, but she will not be eligible to claim on that amount for a considerable time.
Sub-section 75(2)(g) requires the court to take into account a standard of living that in all the circumstances is reasonable. This has been held to be “a relative concept which must be judged in the light of the standard of living to which the parties were accustomed during marriage” (see Aroney (1979) FLC 90-709 at 78,790).
In this case, the wife is still living in the former matrimonial home, although her income has dropped since separation. The husband’s standard of living has clearly dropped, as he is back living with his parents and paying board. He no longer has the use of the former matrimonial home. It would not be possible to make an order that would restore to both parties a standard of living equal to that which they previously enjoy. The husband may well be able to restore his previous standard of living by the use of his greater earning capacity.
Sub-sections 75(2)(h), (j), (k) and (l) refer to matters, which are not relevant to the property proceeding, but are more referable to maintenance issues.
Sub-section 75(2)(m) requires the court to consider, in the case where either party is cohabiting with another person, the financial circumstances relating to the cohabitation. “Cohabiting” for the purposes of this sub-section has been defined by Pawley J in Grabar (1976) 2 Fam LR 11,581; FLC 90-147 at 75,718, by adopting the definition in Wheatley (1950) 1 KB 39:
“The cohabitation of two people as husband and wife means that they are living together as husband and wife, the wife rendering wifely services to her husband; the husband rendering husband-like services to his wife. They must live together, not merely living in one house, but as husband and wife.”
Pawley J went on to say that there could be cohabitation in that sense although the parties are not in fact husband and wife. It is in that sense that the term is used in section 75(2)(m).
Neither party in this case is cohabiting with either person.
An order made or proposed to be made under section 79 is referred to in sub-section 75(2)(n). Where applications for maintenance and property settlement are considered together, as in this case, the Court must reach a decision on the property application before considering an application for maintenance (see Anast and Anastopoulos (1982)
FLC 91-201, Pastrikos (supra)).
Sub-section 75(2)(na) refers the court to any child support under the Child Support (Assessment) Act 1989.
In this case, the wife applied to the Child Support Agency for an administrative assessment of child support payable by the husband. The wife deposes that the first payment was made on 10 or 11 June 2002. The husband applied to vary the original assessment and a decision was made on 11th July 2002, changing the 2002/2003 assessment and varying the annual rate of child support payable by the husband to $12,461.00 from 1st July to 13th September 2002.
Both parties made applications in November 2002 to vary the assessment. The applications were refused on 27th January 2003. The husband currently pays child support at the rate of $336.00 per week. There seems to be no reason why the husband would not continue to pay child support at the rate set by the Child Support Agency. He is permanently employed and likely to remain so.
Sub-section 75(2)(o) refers the Court to any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account. There do not appear to be any facts or circumstances that need to be taken into account, other than those already referred to.
After considering all the relevant matters under sub-section 75(2), I am satisfied that an adjustment should be made in the wife’s favour. The husband retains a significant earning capacity, certainly greater than that of the wife. As the Full Court of the Family Court said in Clauson (supra at 81,911):
“It has long been recognised that in most cases the most valuable ‘asset’ which a party can take out of the marriage is a substantial, reliable, income-earning capacity: see Best and Best (1993) FLC 92-418 at 80,295”.
The wife has the care and control of the two children of the marriage, who are of school age but are only aged 7 and 5. I note that in Brandt (1997) FLC 92-758 at 758, the Full Court referred to the matters which it is appropriate for a court to bear in mind in considering the impact on a party who has the responsibility for the young children of the marriage:
“It is proper to take into account the economic ramifications of having responsibility for the children and the quasi-economic contributions involved in raising children which include washing, ironing, cooking, transporting and the like. It is appropriate to bear in mind salary and income opportunities forgone because of responsibilities to children. It is appropriate to recognise that such responsibilities involve sacrificing leisure and recreation time.”
I am satisfied that the matters considered under sub-section 75(2) call for an adjustment in the wife’s favour of 20%. This would then see the division of property between the parties as 60% to the wife and 40% to the husband.
Section 79(4)(d)
The orders that I propose to make are unlikely to affect the earning capacity of either party.
Other orders (section 79(4)(f)
On 16th May 2003 in the Federal Magistrates Court at Canberra I made orders providing that the two children should live with the wife and the husband should defined contact. That contact was to include alternate weekends from Friday evening to Sunday evening, on alternate Wednesday afternoons and half of the school holidays.
On 2nd July 2003 in the Federal Magistrates Court at Parramatta I pronounced a decree nisi dissolving the parties’ marriage. The decree will become absolute on 3rd August 2003.
Child support issues (section 79(4)(g)
I have considered the question of child support in paragraphs 57 and 58.
Conclusions
I propose to decide the section 79 question before making a decision on the wife’s application for spousal maintenance. The issue to be decided is whether I should make a splitting order in respect of the husband’s superannuation interest in the AvSuper Fund. Section 90 MS of the Family Law Act gives the Court the power to do so in proceedings under section 79.
The particular interest in this case is a defined benefit interest. I have the benefit of a report by Mr SB dated 24th April 2003, which contains a valuation prepared on behalf of both parties. He calculates the value of the interest at $89,076.65.
Ms Rees, for the husband, submitted that it would be just and equitable to order that the former matrimonial home should be sold and that part of the wife’s entitlement should come from a splitting order. She referred me to the unreported decision of Moore J in the Family Court in the matter of Levick, which was decided on 31st January 2003.
Mr Miller for the wife argued that the superannuation should be left with the husband and pointed to the wife’s need to rehouse herself and the children.
Ms Rees put to me that the husband is only 34 years old, and that the superannuation should be shared. If the house were to be sold, the wife would have a substantial sum of money to either buy another house or to invest. Why should the husband be obliged to take an asset that he cannot get his hands on for decades whilst the wife obtains an asset that she can use immediately, was the argument.
To my mind, the question of the children is an important factor. The husband retains his earning capacity, which is not insubstantial. The wife has the need to provide a home for the children, with all its attendant responsibilities (see Brandt, supra). The wife’s earning capacity is significantly less. To my mind, the welfare of the children calls for an order that will give the wife the potential to either keep the existing house, if she can afford to do so, or purchase another more modest, but still suitable, house, to live in with the children. I am mindful that the husband will also need to rehouse himself, but he has no present pressing need for accommodation other than at his parents’ home. He will be able to earn sufficient funds over time to give himself the capacity to obtain his own independent accommodation, as he will have a borrowing capacity that will be greater than that of the wife.
It is for these reasons that I propose not to make a splitting order.
I consider it to be just and equitable to satisfy the wife’s entitlement from the non-superannuation assets. Ms Rees put to me that if I adopted that course then the husband’s superannuation should go back to being regarded as a financial resource and should be taken out of the asset pool.
If the superannuation funds are treated as a financial resource, the gross value of the assets will be:
a) Former matrimonial home
$485,000.00
b) Chattels at former matrimonial home
$30,000.00
c) Wife’s Telstra shares
$6,465.00
d) Proceeds of wife’s superannuation
$2,598.00
e) Toyota Corolla
$3,500.00
f) Wife’s bank account
$300.00
g) Husband’s bank account
$3,500.00
TOTAL
$531,363.00
By subtracting the liability of $776.00 from the figure of $531,363.00, I arrive at a total of $530,587.00
The wife will receive 60% of the net property of the parties, or $318,352.00, and the husband will receive 40%, or $212,235.00. The former matrimonial home makes up the greater part of the net property and it would appear to me that the wife would not have the capacity to pay the husband his share and retain the house. It seems clear that the house will have to be sold, which is what the husband seeks.
The wife should retain the Toyota Corolla motor car, as the husband is leasing a more modern vehicle. The wife should retain the chattels in the former matrimonial home.
The entitlement of the wife will comprise the following:
a) Chattels
$30,000.00
b) Telstra shares
$6,465.00
c) Toyota Corolla
$3,500.00
d) Superannuation proceeds
$2,598.00
e) Bank account
$300.00
f) Share of proceeds of sale
$276,265.00
TOTAL
$319,128.00
Less liability for Centrelink debt
$776.00
BALANCE
$318,352.00
The title to the former matrimonial home is in the name of the husband. He will have to sign the appropriate documents. The costs of sale of the property should be borne equally by the parties, and this will have a slight effect on the amount that each party will receive. I have not been provided with any figures as to the estimated amount of estate agents’ commission or conveyancing costs on the sale. If those amounts are shared equally, it would seem that if the wife were to receive 57% of the net proceeds of sale she would receive about $276,000.00.
Spousal maintenance
The wife seeks an award of spousal maintenance in the sum of $300.00 per week. In order to obtain an order, the wife must meet the threshold test provided by section 72:
“A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately, whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in sub-section 75(2).”
The wife has the care and control of the two children. They are both of school age, and the wife would appear to have the time available to work on a part-time basis. She has qualifications as a hairdresser and has worked casually since the marriage by doing haircutting from home. She was earning $100.00 to $150.00 per week doing casual haircuts, but she cut that work back once the parties separated. She deposes in her affidavit that she does not wish to go back into hairdressing because of the inflexibility of hours that hairdressers work. She also deposes that she “would rather not have the children cared for after school.”[7]
[7] Wife’s affidavit paragraph 113.
The wife was cross-examined about her efforts to obtain employment. When asked what jobs she had applied for she said “I haven’t applied for any jobs.” She reiterated that hairdressing salons were too inflexible. Whilst she has relatives who are in the hairdressing industry, she said “I don’t work with family. I made that a rule after I had a rift with my uncle.” The uncle owns a hairdressing salon.
The wife said that she spends time at school with the children. She said
“I need to be at school with them (the children). I do reading and I do canteen. Reading is conducted on various days. They also have assembly, then they will be making bread and I will be in the classroom with A most of the day.”
The wife rejected the idea that the husband’s parents could assist her by minding the children whilst she was at work. I am not satisfied that a good reason has been shown for this, although it is clear that relations between the wife and the husband’s parents are strained.
It appears to me that the wife has so arranged her life that she is spending a significant part of most weekdays attending at the children’s school and she has no real intention of seeking gainful employment. It is one thing to protect a party who wishes to continue that party’s role as a parent (sub-section 75(2)(l)), but the children are of school age and do not suffer from any disability. There is no need for their mother to spend most of the school day acting as an unpaid teacher’s aide. It is relevant that the wife will receive a significant cash sum out of the proceeds of sale of the former matrimonial home as a result of the section 79 orders that I will make (see Schefe (1978)
FLC 90-473). She is receiving payments of child support on a regular basis. I am not satisfied that the wife has shown that she is unable to support herself adequately.
I propose to dismiss the wife’s claim for spousal maintenance.
It is for these reasons that I make the orders in the attached schedule.
I certify that the preceding eighty-eight (88) paragraphs are a true copy of the reasons for judgment of Scarlett FM
Associate: S. Polley
Date: 10 July 2003
[i] Subsection 79(4)(a)
[ii] Subsection 79(4)(b)
[iii] Subsection 79(4)(c)
[iv] Subsection 79(4)(d)
[v] Subsection 79(4)(e)
[vi] Subsection 79(4)(f)
[vii] Subsection 79(4)(g)
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