Mahanti & Shree
[2023] FedCFamC1A 123
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Mahanti & Shree [2023] FedCFamC1A 123
Appeal from: Mahanti & Shree [2023] FedCFamC2F 280 Appeal number(s): NAA 95 of 2023 File number(s): CAC 2530 of 2019 Judgment of: ALDRIDGE J Date of judgment: 8 August 2023 Catchwords: FAMILY LAW – APPEAL – PROPERTY – Where the appellant contested the further five per cent adjustment in favour of the respondent and the form of the orders, which left the appellant with the bulk of his share of assets as superannuation – Adequacy of reasons – Error of law – Whether the outcome was disproportionate and plainly unjust – Where neither party sought a superannuation splitting order – No error established – Appeal dismissed – Appellant to pay the costs of the respondent in a fixed sum. Legislation: Family Law Act 1975 (Cth) s 75(2)
Family Law (Superannuation) Regulations 2001 (Cth)
Cases cited: Bennett and Bennett (1991) FLC 92-191; [1990] FamCA 148
Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110
Number of paragraphs: 50 Date of hearing: 17 July 2023 Place: Sydney Counsel for the Appellant: Mr Givney Solicitor for the Appellant: Walsh & Blair Lawyers Counsel for the Respondent: Mr Howard Solicitor for the Respondent: Farrell Lusher Solicitor ORDERS
NAA 95 of 2023
CAC 2530 of 2019FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR MAHANTI
Appellant
AND: MS SHREE
Respondent
order made by:
ALDRIDGE J
DATE OF ORDER:
8 august 2023
THE COURT ORDERS THAT:
1.The appeal is dismissed.
2.The appellant is to pay the respondent’s costs fixed in the sum of $15,381.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
IT IS NOTED that publication of this judgment by this Court under the pseudonym Mahanti & Shree has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
ALDRIDGE J:
INTRODUCTION
This is an appeal from property settlement orders made by a judge of the Federal Circuit and Family Court of Australia (Division 2) on 16 March 2023. The orders provided for the respondent to retain a property at Suburb B and to pay to the appellant $85,395. The parties were otherwise to retain the assets in their possession including their superannuation entitlements.
On appeal, the appellant did not contest the finding of the primary judge that the contributions favoured the respondent as to 75 per cent and 25 per cent to the appellant. Rather, he contested the further five per cent adjustment in favour of the respondent and the form of the orders, which he submitted, left the bulk of his share of the assets as superannuation which he could not access for at least 20 years. The appellant was 40 years old at the time of the hearing.
The primary judge found the assets, superannuation entitlements and liabilities of the parties to be:
40. …
Ownership Value Assets [D Street, City C] J 950,000 [E Street, City C] W 650,000 [F Pty Ltd] W 139,241 [K Pty Ltd] H 0 [Appellant’s] bank accounts (listed in balance sheet) H 18,764 [Respondent’s] bank accounts (listed in balance sheet) W 1,564 Jewellery W 15,000 [Motor vehicle 1] H 4,000 [H Pty Ltd] H 4,000 Total Assets 1,782,569 Liabilities Mortgage secured over [D Street, City C] property J 461,524 Mortgaged secure over [E Street, City C] W 364,828 [J Bank] personal loan J 45,562 Unpaid tax W 0 Loan from [the appellant’s] brother J 0 Total Liabilities 871,914 Net Non-Superannuation 910,655 Superannuation [Super Fund 1] W 64,546 [Super Fund 2] H 103,602 Total Superannuation 168,148 Combined Total 1,078,803
(As per the original)
It can be seen that the primary judge did not accept the appellant’s submission that the superannuation should be dealt with in a separate pool to the rest of the assets and liabilities.
The appellant is to receive 20 per cent of the net assets and superannuation – namely $215,761. He will have no liabilities. Of that that sum, $26,764 represents assets he will retain (which includes $18,764 in a bank account) and his superannuation of $103,602.
THE APPEAL
Was the five per cent adjustment justifiable? (Grounds 1 and 2)
The appellant challenges the five per cent adjustment for considerations under s 75(2) of the Family Law Act 1975 (Cth) (“the Act”) in two ways. First, it was submitted that his Honour did not exercise his own discretion when making that finding but erroneously acted on the agreement of both parties to such an adjustment, each of which was based on entirely different assumptions. At the hearing, the appellant contended that the contributions based entitlement of the respondent should be found to be 60 per cent. Her position was that it favoured her to the extent of 85 to 90 per cent.
Secondly, it was submitted that insufficient reasons were given for the adjustment.
At [9], his Honour observed:
9.Whilst the parties are agreed that the appropriate adjustment for future needs is 5 per cent in favour of [the respondent], the evidence and submissions with respect to future needs it to be taken into account and a determination made as to future needs as is necessary in order to arrive at an outcome that is just and equitable.
The appellant relies on the finding at [60] which was said to be cursory and which revealed a failure to “put his mind on” the matters raised in [9] (Appellant’s Summary of Argument filed 13 June 2023, p.3). It was also submitted that the reasons were inadequate. The primary judge said:
60. Both parties submitted that the appropriate adjustment for future needs was 5 per cent in favour of [the respondent]. The parties’ positions remained unchanged upon arrival of the largely agreed joint balance sheet. Taking into account the evidence and the submissions with respect to future needs I am satisfied that an adjustment of 5 per cent in favour of [the respondent] is just and equitable.
The appellant submitted that, having found that the contributions should be taken to be 75 per cent in favour of the respondent, his Honour should have paused there to consider whether any further adjustment was required. A division of property in that proportion would see the respondent retain $809,103 and the appellant $269,700 (of which $103,000 would be superannuation). This was, according to the appellant, an outcome which required no further adjustment.
To that lack of consideration, it was submitted, must be added that the respondent’s agreement that there should be a s 75(2) adjustment in favour of the respondent was based upon the assumption that there would be two pools divided, with the non-superannuation pool to be divided, but with the superannuation pool not to be divided so that each retained his or her entitlements. The appellant held about 62 per cent of that pool. Thus it was not an unconditional acceptance that there should be an adjustment.
It is convenient to look first at the appellant’s submissions to the primary judge before returning to the reasons.
In his Case Outline, the appellant submitted:
2.It is noteworthy that the parties are some 20 to 25 years from retirement age, and it is simply not just and equitable to bring in the superannuation assets as an equivalent asset to those assets comprising the non-superannuation pool.
(Appellant’s Case Outline filed on 30 November 2022, paragraph 2)
Later in the Case Outline, it is made clear that the concern as to a five per cent adjustment is based on only the non-superannuation assets being divided, with the parties retaining their superannuation.
In oral submissions the following was put:
[COUNSEL FOR THE APPELLANT]: So I think I’ve gathered in all the contributions that your Honour has to throw up in the air and think what is just and equitable as to the contribution phase and my submission to your Honour is that the contribution phase leaves [the respondent] with 60 per cent and [the appellant] 40 per cent. And your Honour then looks at, firstly, the differentiation between 60 per cent and 40 per cent and, your Honour, at page 18 of my case outline – paragraph 18 on page 15 of my case outline, obviously the figures are going to vary slightly when we produce a balance sheet but there is almost – there is a $180,000 differentiation between what each of the parties receive at the contribution phase.
(Transcript 2 December 2022, p.139 lines 27–35)
The submissions moved to the adjustment. Effectively, the fact that the appellant would be retaining largely superannuation was ignored for the consideration of contributions and adjustment.
Later it was submitted:
[COUNSEL FOR THE APPELLANT]: Your Honour, there’s a $40,000 difference in the superannuation and so [the respondent], on either side of the table, is going to get and obtain a greater share of the asset pool for quite good reasons but a substantial part of the money that my client will receive in the smaller amount that he receives will be superannuation which he can’t draw on for 30 years.
So that’s a matter that your Honour – if your Honour accepts my friend’s submission about a one pool, then your Honour has to factor in, well, a more substantial part of my client’s share of the assets of the parties will be superannuation and, therefore, will your Honour top up [the respondent] under 75(2) as significantly as your Honour might do? I will make this concession, your Honour. If your Honour accepts my submissions today and what’s in my case outline, then I say that I do not wish to be heard that my client’s overall receipt would be 35 per cent, if your Honour does a one pool approach. But if your Honour is contemplating a greater contribution to [the respondent] and/or a greater adjustment to [the respondent] under 75(2) then I ask you to take that into account.
(Transcript 2 December 2022, p.154 line 33 to p.155 line 2)
Thus the point was raised.
It should be observed here that the overall outcome should be the same regardless of how it is reached. The choice of one pool or two should not determine whether a division of property is just and equitable – it is merely a step to working out the result which should be the same regardless of which approach is used.
After discussing the considerations that could lead to an adjustment under s 75(2), his Honour said:
59.[The appellant] submits that due to [the respondent] having the sole care of the parties’ child, an appropriate adjustment is 5 per cent in her favour. [The appellant] also submits in his Outline of Case Document that each party ought to retain their superannuation entitlements which is to be taken into account in the adjustment phase. [The appellant’s] superannuation entitlements significantly exceed [the respondent’s] and taking this approach would drive up the overall division of property in his favour beyond 35 per cent which I do not find to be warranted and would lead to an unjust and inequitable result.
Neither party had sought a superannuation splitting order. That means, in particular, the appellant did not suggest that a splitting order should be made in favour of the respondent so that she received some of his superannuation thus enabling him to receive more of the remaining property which would be immediately available to him.
In the above paragraph, his Honour squarely rejects the approach of the appellant because, in all of the circumstances, it would lead to an inappropriate result because he would receive too much as an overall division.
Later, under the heading “Overall evaluation”, the primary judge said:
63.[The appellant] submits that due to [the respondent] having the sole care of the parties’ child, an appropriate adjustment is 5 per cent in her favour. [The appellant] also submits in his Outline of Case Document that each party ought to retain their superannuation entitlements which is to be taken into account in the adjustment phase. [The appellant’s] superannuation entitlements significantly exceed [the respondent’s] and taking this approach would drive up the overall division of property in his favour beyond 35 per cent which I do not find to be warranted and would lead to an unjust and inequitable result.
64.Given the parties comparable entitlements at the commencement of their relationship, and their comparable contributions during the relationship, there may have been scope for an equalisation of superannuation with an effect of increasing the cash amount payable to [the appellant] in order to achieve the overall distribution that has been determined as just and equitable. However, neither party has sought a splitting order and taking into account the relatively modest values, there is greater utility in finalising the proceedings than imposing delay and costs on the parties through valuations, drafting splitting orders and according procedural fairness to the trustee.
It can be seen therefore, that in assessing the adjustment at [59] and in the overall consideration, his Honour was well aware of the fact that the appellant held the greater share of superannuation and that it would not be available for many years. It was clearly taken into account. I do not accept that his Honour “did not put his mind” to it.
In my opinion, at [59], the primary judge acknowledges that the concession was based on the parties retaining their superannuation but not that it was based on the respondent receiving only 60 per cent of the non-superannuation property. However, it is plain that his Honour independently arrived at the figure of five per cent due to the respondent’s sole care of the parties’ child (at [56] and [57]).
No error has been demonstrated.
The principles as to adequacy of reasons are well-known (Bennett and Bennett (1991) FLC 92-191; Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110). Reasons need not be lengthy to be adequate. The content of the reasons is determined by the issues to be decided.
Here a superannuation splitting order was not proposed. Whilst the primary judge could have done so, he was certainly not obliged to take that course. There was no valuation of the superannuation interests pursuant to the Family Law (Superannuation) Regulations2001 (Cth) so as to enable such an order to be made. He considered that he would not at [64]. There is no challenge to that course.
The effect of the course taken by the appellant was that he was to retain his superannuation. That meant that he must necessarily receive a smaller share of the other assets than if he had proposed giving up his superannuation entitlements.
Essentially, his Honour was asked to “discount” the other assets because a large proportion of the entitlements and assets to be received by the appellant could not be accessed for many years.
His Honour declined to do so and explained why at [59] and [62]–[63]. The derivation of the adjustment is explained at [56]. As the reasoning process is discernible, the reasons are adequate.
These grounds are not established.
In adopting a one pool approach, did the primary judge err by failing to consider at all that the appellant would not be able to access his superannuation benefits for many years leading to the respondent receiving an unreasonable share of the parties’ disposable assets? (Ground 3)
As already discussed, the primary judge directly said that he took into account that the superannuation entitlements would not be available for some time at [63].
The appellant submitted that this was not enough and should have turned his mind to the express monetary amounts involved.
The precise breakdown of what the appellant was to receive was set out in the preceding paragraph at [62] and again, it was referred to at [68] and [69].
His Honour did turn his mind to the issue.
This ground does not succeed.
Was the determination plainly unjust because the appellant would receive only 12.3 per cent of the non-superannuation assets? (Ground 4)
The arguments put in support of this ground are essentially the same as those put in support of Ground 3.
If the overall division of property of 80 per cent to the respondent and 20 per cent to the appellant, is as the primary judge found, then in the circumstances of this case, the appellant’s share has to be significantly made up of his superannuation. He could have sought to ameliorate that by proposing that the respondent receive some of his superannuation entitlement. He did not.
The appellant cannot use the breakdown of the assets to be retained by him as a basis for the respondent to receive less than the share that was found to be just and equitable.
As discussed earlier, this was taken into account.
The question is whether the outcome was disproportionate and plainly unjust.
In the circumstances of this case, where there was a short marriage, the respondent contributed most of the assets and had the sole care of the parties’ child, and where the appellant did not seek a superannuation splitting order, the outcome is entirely unremarkable. It is not disproportionate, unreasonable or plainly wrong.
This ground does not succeed.
Did the primary judge, in adopting a one pool approach, fail to consider at all the parties contributions to their superannuation, other their initial contributions, so as to determine the “effect” of such contributions? (Ground 5)
The primary judge identified the parties’ superannuation entitlements at the commencement of the relationship at [42] and [43]. The appellant had $25,000 and the respondent $27,000.
His Honour did not refer to contributions to the balance of the superannuation entitlements or the impact of them on overall contributions. No doubt this was because no evidence or submissions were directed to that question.
There is nothing more the primary judge could have done.
This ground fails.
CONCLUSION AND COSTS
It follows that the appeal will be dismissed.
The appeal has been wholly unsuccessful. The appellant accepted that it was appropriate that there be an order that he pay the respondent’s costs fixed in the sum of $15,381.
I certify that the preceding fifty (50) numbered paragraph is a true copy of the Reasons for Judgment of the Honourable Justice Aldridge. Associate:
Dated: 8 August 2023
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