Manwaring and Manwaring
[2011] FMCAfam 50
•4 April 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MANWARING & MANWARING | [2011] FMCAfam 50 |
| FAMILY LAW – Property distribution – superannuation only – 3 year marriage – 5 year relationship – the five years since separation – each has superannuation at commencement of the relationship – husband has more than the wife but also has debts at the commencement of the marriage – wife has other assets – wife’s redundancy package accessed just prior to the end of the marriage – no assets at separation, only debts and superannuation – wife solely contributes to 5 years of post separation contributions pursuant to s.79(4)(c) – husband and wife each work full time father chooses not to spend any meaningful time with the children – s.75(2) factors favour uplift in the wife’s favour – splitting order. |
| Family Law Act 1975 (Cth), ss.90MT (1)(a); 90MT (1)(b) W and W EA 35 of 2004 (Bryant CJ, Finn, Coleman, Warnick and O’Ryan JJ) |
| Applicant: | MS MANWARING |
| Respondent: | MR MANWARING |
| File Number: | CSC 491 of 2008 |
| Judgment of: | Willis FM |
| Hearing date: | 23 September 2010 |
| Date of Last Submission: | 23 September 2010 |
| Delivered at: | Cairns |
| Delivered on: | 4 April 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr G Victoire |
| Solicitors for the Applicant: | Miller Harris Lawyers |
| Counsel for the Respondent: | Mr G Burridge |
| Solicitors for the Respondent: | Slater & Gordon |
ORDERS
In accordance with section 90MT (1)(a) of the Family Law Act 1975 (“the Act”), wherever a splittable payment within the meaning of section 90ME of the Act becomes payable to or on behalf of the respondent husband from his interest in the [P] Superannuation Scheme (“[P]”), the applicant Wife is entitled to be paid, by the trustee, [omitted], the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount of $183,695.00 and there is a corresponding reduction in the entitlement the respondent husband would have had but for the Orders.
The operative time for Order 1 is seven business days after the service of the Final Orders of the Trustee.
That each party be at liberty to apply in relation to the implementation of the Orders affecting the superannuation interest.
That Order 1, 2 and 4 are binding on the Trustee of the Fund.
Until such time as the superannuation split to the Wife pursuant to these Orders can be rolled over into a separate account for the Wife:
(a)The Husband shall provide the Wife with no less than 28 days notice before such time as he elects 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 shall direct and authorise the Trustee of the Fund to communicate with the Wife and/ or any person authorised by him in writing.
That the Husband shall be responsible for all repayments as and when they fall due and other liabilities for the Bank of Queensland loan account, account number [omitted] held in the joint names, and shall indemnify the Wife in respect of all future liabilities associated with this loan as and when they fall due.
That the Wife retain her right, title and interest in the real property held in her sole name at Property M, more particularly described as Lot [omitted] and will indemnify the Husband in regards to any liabilities and outgoings of the real property.
Unless otherwise specified in these Orders, and except for the purposes of enforcing payment of any money due under these or any subsequent orders, each part is solely entitled to the exclusion of the other to all property in the possession of such party at this date.
Each party is solely liable for and will indemnify the other against any liability encumbering any item of property to which that party is entitled to pursuant to these Orders.
If either party refuses or neglects to sign (within 14 days of a written request to do so) any document necessary to give effect to the terms of these Orders, the Registrar of the Federal Magistrates Court of Australia is hereby appointed pursuant to the provisions of section 106A of the Family Law Act 1975 to sign such documents on behalf of each party.
IT IS NOTED that publication of this judgment under the pseudonym Manwaring & Manwaring is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT CAIRNS |
CSC 491 of 2008
| MS MANWARING |
Applicant
And
| MR MANWARING |
Respondent
REASONS FOR JUDGMENT
The parties in this matter met in 2000, married [in] 2002 and separated in November 2005, a relationship of five years.
They have two children, currently aged 9 and 7.
They are in dispute about how to divide the superannuation they each have standing in their own names. There are no other assets left to divide arising out of this marriage. Each of the parties worked during the relationship, however, for various reasons they have not left the relationship in a healthy financial position.
The husband owned a house at the commencement of the relationship which was sold early in the marriage. The parties acquired a unit after the husband’s house was sold and a block of land during their five years together, however, the unit was sold and the block of land was repossessed by the mortgagor at the end of the marriage when the husband was unable to continue making the repayments. He says he couldn’t keep paying the repayments as the wife insisted he pay child support.
After the marriage ended, all that remained of the parties non-superannuation assets was a negative pool. Their debts were around $28,000.00 and each assumed a debt for approximately $13,000.00. The wife has paid off her share of the debts; the husband has about $3000 remaining.
They now ask the Court to determine how they should divide their respective Superannuation. A feature of this matter is that the post separation period of November 2005 to the time of trial in September 2010 is as long as the relationship itself.
In the post separation period, each party has continued to be employed and make regular contributions to their own superannuation.
It is not disputed that, post separation, the two children of the marriage not only remained living with the wife but the wife has also been solely responsible for every aspect of raising the children. Sadly, it seems that the husband has walked away from his family at separation, not only moving away from Far North Queensland where his children reside to live in Canberra, but also failing to spend physical time with his children other than for about four occasions in five years and then, for only a limited time. There have been opportunities for the father to travel to Sydney from Canberra to meet up with his children which have been forgone. The husband seems only to have travelled to see the children if his employer paid the airfare. The husband rings the children twice a week. The husband has left the raising of the children and every aspect of their care, their emotional wellbeing, their education and physical care to the wife. I am not surprised that the wife was distressed and wept at various times when giving her evidence. I have no doubt she feels abandoned by the father’s lack of attempts to show a commitment to his children.
There have been times since the separation that a reconciliation has been contemplated between the parties but it has never come to fruition. The husband is a poor manager of money and whilst denying the level of gambling alleged by the wife, he appears to be regularly short of funds. He has continued to try and borrow money from the wife post separation notwithstanding that he, like the wife, has a healthy [omitted] income, and he is not the primary carer of two children. He has raised at this trial the wife’s failure to pay his airfare home after a counselling session in Cairns, he does not deny the wife’s evidence that post separation he has asked the wife for $5,000.00 to pay lawyers to help him defend domestic violence charges against his then new partner. The wife could not lend this amount. The husband borrowed around $250.00 from the wife for airfares to Canberra on occasion, $500.00 on another and $100 for petrol. These loans were not repaid. These are examples of the husband’s inability to manage his own quite healthy income to pay his own costs of living. The wife’s evidence was that during the marriage the husband gambled, drank and smoked cigarettes and in doing so, the husband spent money on himself that would otherwise have been directed into the family budget. It is not difficult to see from the husband’s income and his current state of finances with increasing borrowings that the husband chooses to live beyond his means.
Post separation the wife has borrowed funds to provide a home for her and the children and she now has significant debts in purchasing that house and updating her car. The husband post separation has borrowed money on personal loans and increased credit card expenses. He appears to have acquired no assets with his borrowings. The husband has spent money on travelling to Sweden to spend time with his now second wife (he having left another partner with whom he lived post separation and with whom he has one child) and paying funds for their wedding. The husband’s Swedish wife does not yet have the necessary visa to live in Australia and there is no evidence as to when this might occur. The husband’s credit card and personal loan debt is considerable. The husband has paid child support post separation, currently at around $950.00 per month. Each of the husband and wife remain in the workforce, the husband with [omitted] in Canberra working with [omitted] and the wife being a [omitted]. The wife’s income at the time of trial was $117,416.00, slightly higher than the husband’s at around $109,772.00[1].
[1] Financial statement of the husband efiled 20/9/10.
A single expert was appointed by the parties, Mr S, to provide Family Law Valuations for their respective funds. Mr S has valued the Superannuation of each party at three dates: - the commencement of the relationship, the end of the relationship and the time of trial. When I say the time of trial, I should say that for reasons explained in Mr S’s report, the date adopted for the husband’s value was 29 September 2009. In brief it was not possible for Mr S to calculate the 2010 value as the figures required for his fairly complex calculations were not yet available. I have therefore, when comparing the respective values, used the common date of 29 September 2009 so as their respective superannuation funds are considered on the same date, and not a year apart.
Orders Sought by Each Party
The husband seeks an Order that the wife be paid a base amount of $67,000.00 by way of a splitting Order out of his interest in the [P] Superannuation Scheme (“[P]”) Fund and that he retain the balance. The husband’s fund is a defined benefit fund. Mr Burridge of Counsel for the husband submits that the $67,000.00 represents 70% of the accumulated superannuation during the course of the relationship[2], though the case outline suggests that figure represents 70% of the husband’s accumulation during the marriage. The husband submits that he brought assets into the marriage at the commencement of their relationship greater than the wife and he refers to a home at [S] in Brisbane which he owned at the commencement of the relationship. The husband says he also had about twice as much superannuation as the wife. The husband says that whilst there ought to be a small adjustment in the wife’s favour to take account of the two children living with the wife, this should only be a slight adjustment and that the split proposed by him takes account of the s.75(2) matters and represents a just and equitable settlement. Mr Burridge submits that I should not give the usual weight that I might otherwise give to the s.75(2) factor of the wife having two children well under 18 years of age in her sole care as the wife will not receive any benefit in the present time from any proposed Superannuation split. He contends that this will only occur when the wife retires and the children will be well and truly over 18 when the wife is entitled to the benefit of the superannuation split and for this reason, less weight should be attached to that s.75(2) factor. Mr Burridge was unable to point me to an authority to support this contention. In relation to contributions,
Mr Burridge contends that I should look at the actual contributions to the husband’s superannuation by the wife and the section 75(2) factors over all. Mr Burridge’s proposed split would result in the husband retaining $373,270.00 of his own Superannuation (it being valued at $440,279.68) and the wife retaining her own [U] Super at $292,816 + the $67,000.00 split from the husband, a total of $359.816.00.
[2] Transcript page 83 – line 35.
The wife seeks an Order that she be paid $220,139.00 which is said to be 70.7% of the total superannuation pool[3]. The wife proposes that in addition to receiving 70.7% of the husband’s superannuation, she maintain all of her own Superannuation valued at $292,816.07 as at
29 September 2010. That would result in the wife receiving $606,086 in Superannuation funds, out of a superannuation pool of $733,095.00.
[3] Written summary of argument of the wife.
Mr Victoire of Counsel for the wife submits that the husband’s assertion that he brought non-superannuation assets into the marriage is inaccurate and that if the husband’s liabilities at the commencement of the relationship are factored in, the husband actually brought in a negative non- asset pool, whereas the wife owned a car and furniture with an insurance value of $40,000.00 and had no debts. Mr Victoire submits that the negative asset pool of non superannuation reduces the real value of the husband’s superannuation at the commencement of the marriage and that when the debts are acknowledged, together with the wife’s other financial and non-financial contributions particularly in the five years post separation, the husband’s and wife’s contribution as at separation are either equal[4] or, as submitted on page 7 of the wife’s summary of argument 55% on contributions and an adjustment of 15% for section 75(2) factors. Mr Victoire also points me to the contribution by the wife of her redundancy payment some months prior to separation, most of which was accumulated prior to the parties cohabiting and a large portion of it was contributed for the benefit of the family and spent post separation on the financial survival of the family.
[4] Oral submissions page 97 “and when we factor in then the fact that there has been contribution during the relationship and then what has happened post-separation in terms of who has been the primary carer of the family, to look at contribution that the mother has made in a direct way, to say that would be an appropriate 50/50 overall on contribution, and then reflecting section 75(2) of the 20 per cent adjustment”.
Mr Victoire does not agree that the s.75(2) factors should be treated lightly as submitted by Mr Burridge, simply because the nature of the asset being divided is superannuation. He submits that it is not uncommon to divide up assets other than cash between separating parents, and that there is no precedent for failing to give less weight to this s.75(2) factor simply because the asset is not cash or a house.
Mr Victoire submits that given the wife will be the only parent assuming parental responsibilities of the children for their housing and all aspects of their life, that the s.75(2) factors require a significant adjustment to the contributions resulting in the wife being entitled to receive 20% in s.75(2) factors. He says the wife’s entitlement is therefore in percentage terms 70.7% of the current superannuation pool, or 50% of the husband’s superannuation, being a splittable payment of $220,139.84[5].
[5] See also, page 97 of the Transcript Mr Victoire: it would be an appropriate 50/50 overall on contribution, and then reflecting section 75(2) of the 20% adjustment.
The current liabilities for the parties are set out in the table of assets and liabilities non-superannuation pool at paragraph 32 of these reasons, these figures are based on Counsel’s advice that the most up to date figures are contained in pages 3 and 4 of the wife’s summary of case outline[6]. I note Mr Victoire has adopted the 2010 value for the wife and the 2009 value for the husband in his case outline. I consider it is more equitable to adopt the values of each party as at
29 September 2009 as it is the common date, the husband’s not having been valued as at 2010 for reasons set out by Mr S.
[6] Transcript page 99 – lines 10 to 25.
Relevant background
When the parties met in 2000 they were each employed with [omitted] organisations. The wife set out her work history in her material and she has moved through various executive positions in [organisations omitted]. The husband was initially with [omitted] in Cairns and at that stage earned less than the wife. The husband then worked with [omitted] based on Thursday Island after the wife took up the position of [omitted] on Thursday Island.
Generally the wife has earned a higher income than the husband throughout this reasonable short relationship of five years. The wife’s work history and that of the husband’s as set out in the wife’s affidavit is not challenged. The wife whilst giving birth to two children took time out of the paid workforce for only six weeks after each birth. When the wife returned to work after the birth of their first child [X] [in] 2001, the wife took [X] to work with her and [X] slept in her bassinet whilst the mother worked. When the wife’s work required travelling to Brisbane which was fairly regular after [X] was born, the mother took [X] with her to Brisbane and her own mother assisted with her care to enable the mother to continue working and earning an income.
When the mother obtained her position on Thursday Island in September 2002, she and [X] moved to Thursday Island and into a house provided by [employer omitted] at a reduced rate and for six months the mother worked full time and was a sole parent on Thursday Island. [X] was placed in the care of a babysitter during work hours and the mother paid the $120.00 per week out of her salary.
The father remained in Cairns during this time and to try and reduce their overheads, the mother organised for the husband to board with her adult daughter from another relationship for a nominal amount each week. During this time, notwithstanding that the husband has his own income, the mother had to send the father $1,000.00 on an occasion as he had just run out of money. The mother was paying for herself and [X] and all of the day to day expenses and rent on Thursday Island at this time.
Once the husband moved to also take up work on Thursday Island, the wife was largely left to continue with the sole parenting responsibilities as the father’s work required him to travel around the Northern Peninsula area to [occupation omitted]. Each week the husband would leave Thursday Island on the Monday morning ferry at 6.30am and return on the following Friday afternoon ferry at 5pm. The wife did all of the raising of [X] during the week, apart from working hours when she was cared for by a babysitter, as well as working.
In the eight weeks prior to the birth of the parties’ second child, the mother says that [X] travelled occasionally with the father to [omitted], where she would attend the local day care at [omitted]. When the parties’ second child [Y] was born by caesarean, the mother came home to rest and recuperate with the new born [Y] three days after he was born, and three days after the mother came home the father said had to attend an important work conference on another island for a week. The mother, left without assistance, organised her own family to assist her at this critical time.
The mother returned to full time work six weeks after [Y] was born and both young children were cared for by a babysitter paid by the wife, whilst she worked. The husband continued to work away each week for a period and the wife was the sole parent for both children whilst the husband worked away on other Islands.
After the father ceased travelling away each week for his work, he still travelled away to other Islands regularly, first each second week and then about once each six weeks.
After [Y] was born [in] 2003, the wife says and it is not challenged, that the husband began to drink alcohol frequently and heavily as issues with his work on the development of the Alcohol Management Plan escalated in the five communities he worked in. The husband’s drinking reached a point where the husband would consume a 40oz bottle of Bourbon in one night.
In January 2005 the husband suffered his first bout of pancreatitis in Cairns. The wife took the husband to the [omitted] Hospital where he was admitted for some days, after which he returned to live and work on Thursday Island.
In June 2005 the husband and wife decided that the wife should cease work and she took up a voluntary early retirement package from [employer omitted] in the sum of $87,998.00 after tax. This enabled the wife and family to benefit from the wife’s income whilst she cared for the husband who was still suffering from his condition whilst continuing to work, and to care for their young 2 year old [Y] along with [X]. It allowed the wife to assume a greater role in caring for the children and the husband and generally the welfare of the family. Most of the redundancy funds, some $60,000.00 were spent quickly from June 2005 until the parties finally separated in November 2005. It seems that the parties moved back from Thursday Island in or around June 2005 and commenced living in a rented house at [omitted] until separation in November 2005.
The wife and children moved out of the rental house at separation. At that time there was about $28,000 of the voluntary redundancy payment remaining and the wife has retained those funds for her own use post separation. The wife says and I accept that this sum was used for the support of her and the children, the parties had no matrimonial home and the wife had stepped out of the paid workforce to assist the husband and family. The wife was therefore left to find accommodation for her and the two children and the primary financial responsibility for doing this was left to the wife. The wife also accessed in the early post separation period her superannuation. On 17 February 2006 she withdrew a sum of $20,000.00 which she says was spent on supporting herself and the children, with around $12,000 on upgrading the vehicle she had at separation to a more recent vehicle.
The wife having taking voluntary redundancy was not working at the time of separation and being a sole parent with two young children she then returned to work in May 2006 as [omitted] on Thursday Island where she and the children returned to live. In approximately April 2006 the husband left Cairns and Far North Queensland and took up employment interstate with Centrelink in Canberra where he remains working.
As to the property (other than superannuation) which existed at the end of the marriage, all that remained were debts and the parties assumed equal responsibility for payment of the debts, an amount of around $13,000.00 each. Each of the parties had superannuation. Apart from this they were in dire financial straits with their block of land being repossessed due to their inability to maintain the repayments on the land.
In looking at the history of the contributions to the marriage and the acquisition of non-superannuation assets during the marriage, the parties agree that the husband owned a house at [S] when he met the wife and that this house was sold in February 2001, a few months after they commenced living together in September 2000.
The husband said the sale resulted in $17,000.00 being the net proceeds, however, that is disputed and the wife says it was around $12,000.00. I am satisfied from the settlement documents tendered, that the net amount from the sale was $12,000.00 and not $17,000.00 as initially alleged by the husband. These funds from [S] house were contributed to the purchase of the Property L unit for the sum of $200,000.00, the first joint asset of the parties. The wife was gifted funds of $6,700.00 from a relative which she contributed to the purchase of the Property L unit. Each of the parties contributed to payment of the mortgage of $190,000.00 with the Bank of Queensland during the marriage. When the parties moved out of the apartment so that the wife could take up employment on Thursday Island, the unit was rented out. The rent was directed towards the mortgage together with payments by each of the parties.
In 2004 the Property L unit was sold and of the net sale proceeds of $45,000.00, $28,800.00 was directly paid on to the credit cards standing in the name of the husband. The parties then used the remaining sale proceeds, around $16,200.00, towards the purchase of a block of land at [C] Cairns in July 2004 which cost $310,000.00. The parties borrowed almost the entire amount of $310,000.00 to fund the purchase of this block. However, the parties’ relationship came to an end in November 2005. The repayments on the block of land then fell behind; the husband says he could not keep up with the repayments as the wife insisted he pay child support. Unfortunately, the land was repossessed and this accounted for part of the losses and debts at the end of their relationship which, as I have said earlier, was shared equally between the parties, each taking about $13,000.00 worth of debt.
The husband has three adult children from other prior relationships and also a child under 18 from a post separation relationship. That child [Z] born [in] 2008 is a child of a short lived relationship post separation being a different relationship from the husband’s current marriage. [In] 2009 the husband married Ms C who lives in Sweden and hoping for a residency visa for Australia and who is described as being involved in a property settlement with her former husband.
The wife has two adult children from a previous marriage, [names omitted].
The Law
In this matter I am required to follow the approach to property division set out in various authorities and described as a four step process referred to in cases such C v C (2005) 33 Fam LR 414; In the Marriage of Hickey (2003) FLC 93-143 and Ferraro and Ferraro (1993) FLC 92-335 Those authorities identify a four step approach which is to first determine the pool of assets and liabilities, then evaluate each of the parties’ financial and non-financial contributions during the marriage and post separation, determine if that contribution figure requires adjustment in light of the relevant s.75(2) factors and finally to consider whether the proposed result is just and equitable in all of the circumstances having regard to the actual result in dollar terms and if necessary to make any further adjustment.
In this matter given that it is primarily in regard to the division of superannuation, I have had particular regard to C v C (2005) 33 Fam LR 414; T & T (2006) FLC 93-263; SDM v JCM [2006] FamCA 840 (Warnick, May and Boland JJ); W & W EA 35 of 2004 (Bryant CJ, Finn, Coleman, Warnick and O’Ryan JJ); BAR & JMR (No.2) FamCA 386 (Young J). In regard to the treatment of initial contributions and property matters I have had regard to Williams & Williams [2007] FamCA 313 (Kay, Coleman & Stevenson JJ) and Pierce v Pierce (1999) FLC 92-844.
Mr Burridge helpfully referred me to a decision of the Full Court, Edwards & Edwards (2009) FLC 93-409 a case which involved division only of superannuation interests and which upheld the first instance decision of FM Henderson. He also referred me to The Marriage of Parshen (1996) 21 Fam LR 199 in relation to the inference that absent evidence to the contrary, it should be inferred in property proceedings that moneys howsoever received by a party have been used by that party for the benefit of the family. In relation to the issue of gambling Mr Burridge referred me to Dorney & Dorney [2007] FMCAfam 617 a decision of Federal Magistrate Walters. In this regard I have also read and relied on the Full Court decision in C & C [2006] FamCA 528 a decision of Bryant CJ, Warnick and Boland JJ which addresses the relevant authorities including De Angelis & De Angelis (2003) FLC 93-133. Mr Victoire made particular reference to BAR & JMR 2005 FamCA 386 and I have noted the cases referred to on his case outline, along with Waters & Jurek (1995) FLC 92-635
The matter of Kapoor & Kapoor [2010] FAMCAFC 113, a decision of Justice Finn, was also relied upon by Mr Burridge. It is a fairly recent decisions from June 2010 which was an appeal from property orders made by FM Brewster and which involved superannuation issues amongst others. Other cases were referred to as set out on each of the case outlines.
The Hearing – Evidence
The wife gave evidence and was cross examined. The wife’s other witnesses were not required for cross examination.
The husband gave evidence and was cross examined.
Mr S’s report was admitted without challenge and he was not required for cross examination.
The parties relied on their documents as read into the record and as shown in their case outlines.
Each of the parties was represented by Counsel during the hearing. I have had regard to all of the evidence and the exhibits. I have read the written submissions of each Counsel, for which I thank them, and taken into account their oral submissions.
Where a statement of fact is referred to in these reasons, it represents a finding unless stated otherwise.
The Witnesses
The Wife
The mother has worked long and hard during this short marriage and relationship of 5 years. She was an intelligent and articulate witness with an excellent recall of the issues relevant to their relationship. The wife has a history of achieving in her work place. At the commencement of her relationship with the father she was employed as a Manager with [omitted]. Two years later she was appointed the [omitted] on Thursday Island. In 2006 the wife became the [omitted] on Thursday Island. The wife has regularly updated her qualification with accreditations to maintain her skills. At present she is studying for her Masters Degree in [omitted] which has started slowly, but which I have no doubt she will achieve once this litigation is finalised. My impression was the wife has directed all her energy, commitment, finances and resources into this relationship and that the husband disappointed the wife in his apparent failure to do likewise.
The wife found it difficult to acknowledge that the husband had made financial contributions to the marriage. The wife said she was the person supporting the family as the husband spent money gambling, drinking and smoking and he brought credit card debt into the marriage. She was loathe to admit that he had paid funds towards their joint mortgage as she said he also withdrew money from that account. Having perused the relevant statements it is clear to me that the husband and wife each contributed, albeit in different proportions, and the husband and wife each drew at different times on the mortgage account. The wife said she not only paid the mortgage, but she paid most of the other expenses. This may be true, however, generally the amount paid by the wife was smaller than the amount paid by the husband directly on to the mortgage.
I have no doubt that the wife has been totally committed to the financial stability of this family and that the husband’s gambling and visits to the casino with friends when he was drinking were seen by the wife as entirely wasteful and some might say selfish given the parties’ overall financial circumstances. I have no doubt that the husband’s post separation conduct in failing to properly engage with his two children, his continued attempts to borrow money from the wife post separation, and requests for the wife to help him with difficulties he found himself in as a result of his new relationship, together with the vague possibility of reconciliation as recently as 2008 and 2009, were most unpalatable and hurtful to the wife. Her perception of his actual financial contribution to the joint mortgage may have been somewhat coloured by these events.
The Husband
My impression of the husband was that he had invested much less emotionally and physically into this marriage and family than the wife. The husband was very defensive in his answers. Generally I found the husband to be a witness with a poor memory and overall an unimpressive witness. At times the husband became confused with what were quite simple questions and other times I considered that he feigned confusion to avoid answering questions directly or to avoid making admissions against his own interests. The husband appeared to adopt the stance that he would resist all suggestions or propositions unless there was evidence to prove it. Even when faced with documentary evidence and allowing for the fact that the husband had not seen many of the disclosed documents prior to swearing his affidavit on 20th September 2010, his admissions as to the obvious content of the documents came reluctantly. This occurred in relation to the credit cards. In his affidavit he accepted one credit card at the commencement of the relationship, though in person he was loathe to accept that the debt existed. Similarly with the personal loan documents he was loathe to admit a debt existed when the parties met. When faced with evidence of his credit card debts on or around the beginning of the relationship the husband would say I can’t remember this. Many of his answers to questions which could have involved admitting a fact against his own case were “I can’t recall”.
The husband’s evidence surrounding the lodgement by him of an amended tax return three days prior to this trial in 2010, disclosing for the first time additional income derived from his “[business]” services over the years 2008 and 2009 left me with a strong impression that the husband had been hiding this income. It seemed to me he acted strategically after realising, possibly through legal advice, the likely consequences for him appearing in a Federal Court with questions being asked about his income and tax declarations. The husband gave a convoluted account of having a USB stick stolen in January 2009 which had records of his own income on it from 2008 and 2009, and only realizing in September 2010, 3 days before the trial, that he forgot to put the income from his [business] on his tax return at all. He therefore lodged the amended tax return on Monday of the week of the trial in the shadow of this litigation. Mr Victoire for the wife showed the husband subpoenaed documents from [workplace omitted][7]. Those documents revealed three invoices from 1 July 2007 until the trial showing a total income of $10,825.00. The husband gave evidence of not keeping paper copies of invoices, not been able to access his own electronic copies, losing his USB and failing to ask the department for a copy of the invoices to assist him to find out how much he was paid for the work.
[7] Exhibit M9.
I regard the husband’s denials that the fact that the records from the Department of Communities were subpoenaed had nothing to do with his subsequent hasty lodgement of an amended tax return as untruthful. That the husband failed to contact the Department of Communities and obtain copies of his own invoices suggests to me that he was not really genuine in wanting to have this income declared. The husband may have lodged an amended tax return days before the trial, but it is clear that the full extent of the husband’s income derived from his [business] has still not been declared given that the invoices show he earned $10,285.00, some $4,000.00 more than has been declared.
The husband said in re-examination that he flew at his own expense as part of my [business][8] to Boigu Island or other Islands in the Torres Strait, however, then conceded that the charter flights to the Islands were paid by [workplace omitted]. When the husband asked about the flights from Canberra stated that those flights also were covered by the [workplace]. It was not the case therefore that the husband assumed the cost of the flights “as part of his [business]” as originally stated by the husband[9] under oath and as sworn to in his own affidavit. Where the evidence of the husband and wife conflicts, in the absence of any independent evidence, I prefer the evidence of the wife. The husband was in my view, trying to tailor his evidence in a way only to support his own case.
[8] Transcript p 65 – lines 10-15.
[9] Transcript p 65, lines 15 – 30.
Step one - Determine the value of the assets – including non-superannuation assets and liabilities
In relation to the asset pool, and in addressing the first step in the four step approach it is necessary for me to determine the asset pool. In this matter there is no quarrel between the parties that no other orders other than division of the superannuation by a splittable payment is necessary.
Agreed Schedule of assets and liabilities as at September 2010
| Assets | Title | Value |
| Item | $ | |
| Property M | Wife | 370,000.00 |
| 2009 Volkswagon Polo (rego [omitted]) | Wife | 21,900.00 |
| Household contents and goods | Wife | 3,000.00 |
| Suncorp bank account | Wife | 1,200.00 |
| National Australia Bank account | Wife | 569.00 |
| Household contents and goods | Husband | 3,000.00 |
| 2006 Hyandai Sonata Sedan (registration [omitted]) | Husband | 11,650.00 |
| Westpac One main account | Husband | 217.00 |
| TOTAL ASSETS | 411,536.00 | |
| Liabilities | ||
| Item | ||
| Property M (home loan) | Wife | 353,000.00 |
| St George Bank Finance for Wife’s motor vehicle | Wife | 23,000.00 |
| Bank of Queensland personal loan | Joint | 2,872.00 |
| National Australia Bank personal loan | Wife | 30,000.00 |
| GE Money loan | Husband | 12,257.00 |
| Westpac Fixed rate personal loan | Husband | 22,621.00 |
| Westpac Master card | Husband | 16,738.00 |
| TOTAL LIABILITIES | 460,616.00 | |
| Superannuation | ||
| [U] Super | Wife | 292,816.00 |
| [P] Superannuation Scheme | Husband | 440,279.69 |
| TOTAL SUPERANNUATION | 733,095.69 |
The Superannuation of each party
Turning to the parties’ respective Superannuation funds, it is agreed that at the commencement of the marriage the wife’s superannuation was valued at $66,242.92 and the husband’s was valued at $127,690.00. The details of each of the funds and their values are referred to in the single expert report of Mr S, the contents of which have been accepted by each of the parties. The wife has an accumulation fund and the husband has a defined benefits fund.
Mr S identifies the values of the respective Superannuation as follows:
Wife:
· As at beginning of relationship 1 October 2000: $66,243.00
· As at separation 19 November 2005: $229,428.00
· As at trial (using 29/9/09): $292,816.00
Husband:
·As at beginning of relationship 1 October 2000: $127,691.00
·As at separation 19 November 2005: $223,344.00
·As at trial – (using 29//9/09): $440,278.00
Whilst the husband’s superannuation fund was worth almost twice that of the wife’s at the commencement of the relationship (and in making this observation I accept the that wife’s case is that the husband brought other debts which diminish the real value of assets the husband brought into the marriage) the wife’s superannuation grew at a greater rate than did the husband’s during the relationship as is apparent from their respective values at separation. Thereafter the husband’s defined benefit superannuation fund, which is drawing closer to the retirement date of the husband, has escalated at a greater rate than the wife’s.
At separation, the wife’s superannuation had increased to $229,428.00 and the husband’s had increased to $223,344.00. Mr S has calculated the respective increases of $153,620.00 for the wife’s fund and $77,216.52 for the husband’s fund at pages 5, 6 and 7 of his report[10]. Mr S states in his report that the wife accumulated $76,404.02 more superannuation than the husband during the same period, i.e. the marriage period[11]. Mr S has shown a calculation to account for interest from the date of separation to the current date, to reflect the current day value of that increase. Mr S said that the figure of $89,377.13[12] represents the current day value of the superannuation referable to the marriage period after applying the appropriate interest rates to a [U] Super account in a balanced accumulation account held by the wife.
[10] At PGS 3.
[11] Page 7 of 8, PGS 3.
[12] Page 7 and 8 PGS 3.
Mr S has contemplated various superannuation splits on the basis that the husband retains his own Superannuation and receives a portion of the wife’s fund, which has grown at a faster pace during the marriage than the husband’s superannuation fund. Scenarios are proposed including assigning the whole or 100% of the $89,377.13 to the husband which would need a splitting order from the wife’s superannuation to the husband’s fund for that amount[13]. I note that
Mr S’s calculations all make reference to the separation date, and that there is no reference to the post separation period and the various contributions that have occurred in the five years post separation period. Mr S properly notes that the apportionment between the parties is a matter for judicial determination and should of course include a determination under s.75(2) to ensure that it is just and equitable
[13] Page 7 and 8 – PGS 3.
In regard to the relevant considerations and the preferred approach to the determination of property division involving superannuation, C v C (2005) 33 Fam LR 414 their Honours stated [14] ….for the reasons we earlier gave, whether or not a splitting order is sought on either party’s application, the parties’ contributions to both the property (as defined in s 4(1)) and also the superannuation interests should be assessed. The other factors in s 79(4) (d), (e), (f) and (g) would then need to be considered. Specifically in the context of s 79(4) (e), that is the s 75(2) factors, any division of the property (as defined in s 4(1) and any “division” of any superannuation interest (in the sense of an allocation of the base amount) based respectively on the assessments of the parties’ contributions to the property and to any superannuation interest, would then be considered. Similarly, the parties’ future superannuation prospects (be they in capital or income form) would need to be considered. The overall justice and equity of the ultimate award (including any proposed splitting order or the need for such an order) would then be considered.
[14] Paragraph 64.
At paragraph 65 their Honours continued to explain that a trial judge has discretion as to how superannuation interests will be treated in a particular case. If superannuation is not included in the list of property but rather made the subject of a separate pool, it will be necessary where a splitting order is sought, or extremely prudent where no such splitting order is sought (in order to ensure that justice and equity is achieved) to:
Value the superannuation interest (according to the regulations if an order under Pt VIIIB is sought or according to the regulations or otherwise if no order is sought)
Consider and make findings about the types of contributions referred to in s79 (4) (a), (b), and (c) which have been made by the parties to the superannuation interests on either a global or an asset by asset approach depending on the circumstances;
Consider the other factors in s 79(4) being the matters in s 79(4) (d), (e), (f) and (g); and
Ensure that pursuant to s 79(2) the orders in relation to the parties’ property, and any order under Pt VIIIB in relation to superannuation interests are just and equitable.
In the context of a consideration of the matters referred to in subparagraphs (b) and (c) of the last paragraph, the following matters may well be relevant: the relationship between years of fund membership and cohabitation, actual contributions made by the fund member at the commencement of the cohabitation (if applicable), at separation and at the date of hearing; preserved and non-preserved resignation entitlements at those times; and any factors peculiar to the fund or to the spouse’s present and/or future entitlements under the fund.
If this approach is adopted, whereby superannuation interests are dealt with separately from property as defined in s (4) 1, but are subject to the considerations in s 79(4), then not only will any contributions, both direct and indirect, by either party to such superannuation interests be more likely to be given proper recognition, but the real nature of the superannuation interests in question can also be taken into account, both in consideration of the s 75(2) matters and in the final assessment of whether the ultimate order is just and equitable[15].
Step 2 – The financial and non-financial contributions of each of the parties
[15] C v C supra, paragraphs 65,66 and 67.
Redundancy payment
This issue is raised by each party in relation to contributions.
Just prior to separation in November 2005 the wife took a voluntary redundancy package in July 2005. This was at a time when the husband was suffering from pancreatitis having been hospitalised for three months. The husband agrees that this was a tough time and there was pressure in their relationship generally and financially and he was sick. The husband seemed reluctant to admit that the wife gave up work and took the voluntary retirement package to be at home, look after the children and look after the husband. The husband said “Well the thing is she had to look after the kids. She took the package so she wanted to get the package to look at how we’re going to move forward in relation to our relationship; this is, whether we were going to, you know, contribute to the loan in terms of how we were going to pay off the block of land as well. There’s a whole range of factors we discussed. Part of it, yes, she was going to look after me, and partly the kids. The husband accepted that $28,000.00 remained of the redundancy package at separation. Therefore, $60,000.00 from the wife’s redundancy payment has been spent during the marriage”.
The [employer] document tendered shows that the payout was $109,115.35. From that tax of $21,689.12 was deducted, resulting in a net payout of $87,426.23.
Mr Burridge contends that the husband contributed indirectly to the redundancy repayment as about half the benefit accrued during the marriage. He says that the $28,000.00 that the wife retained at separation could be regarded as a contribution by the husband, in foregoing his share of this sum.
The redundancy calculations indicate that the commencement of the wife’s employment was March 1994 and the retirement date was 1 July 2005. The wife was in a relationship with the husband from September 2000 to November 2005. On that calculation, the wife had been in employment for six years prior to the commencement of the relationship. That period reflects the wife’s sole contribution. The relationship spanned 5 years, and during that time, notionally each of the parties contributed equally. The husband has not therefore solely contributed to the wife’s redundancy package during the relationship, each party has. The wife has therefore contributed about 75% of the value of the redundancy and the husband 25%. Given that $60,000.00 net was spent during the marriage out of $87,000.00 net, I regard the husband as already having had the benefit of the notional 25% he contributed which in dollar terms would be about $21,750.00 prior to separation. He has notionally shared in $60,000.00. I do not accept therefore that the amount the wife retained should be seen as a post separation contribution of the husband.
The Husband
Although I am asked to make a determination in relation only to the superannuation of the parties, I consider it is necessary for me to assess their contributions both to the property as defined in s.4(1) and also to the superannuation interests.
In relation to the husband, I am satisfied that he had the house at [S] and that, as I have noted elsewhere, that house was mortgaged and when sold, the net sale proceeds yielded $12,000.00, not $17,000.00 as initially alleged by the husband. The husband has been less than forthcoming about the debts he also bought into the marriage. As can be seen in the husband’s case outline e-filed on 20 September 2010, there is no mention of the husband’s liabilities which existed at the commencement of the marriage, nor is there any mention of liabilities in the husband’s first affidavit[16] and in the affidavit filed 15 days later on 20 September 2010 the husband accepts he had one credit card debt of around $6,000 to $7,000.00. After being cross examined by Mr Victoire I was satisfied that the husband also had a personal loan at the commencement of the cohabitation which he had failed to mention and which is evident in the personal loan account with the Bank of Queensland[17]. The husband’s personal loan was in the sum of $22,332.00. Even when the husband was shown the loan accounts, he still was reluctant to admit the obvious state of his financial affairs as shown in the document stating I don’t’ remember this.
[16] Filed 5/9/10.
[17] Exhibit M4 – statement of personal loan account with Bank of Qld – in husband’s name.
Similarly, the husband was loathe to admit he had two credit cards at the commencement of the marriage and he was very reluctant to accept what the balance might have been at the commencement of the marriage in relation to the second credit card. He accepted that the second credit card had a starting balance of around $7,000.00 a few months after the marriage. I consider it more than likely that the husband had also had the second credit card six months earlier with a value of around $7,000.00 when the parties met. The second credit card had an opening balance $7,126.00 and was almost at the maximum. Even giving the husband the benefit of largely disregarding the second credit card, I am satisfied that the husband had the admitted credit card of $7,700.00 (again at the limit at the start of the relationship) and a personal loan of $22,332.00, being a total of just on $30,000.00.
Given that I am satisfied that the husband had debts of at least $30,000.00 at minimum, and that the house he owned at [S] crystallised into about $12,000.00 equity, not $17,000.00 as initially alleged by the husband, the true position of the husband financially when he entered the marriage was that his non-superannuation assets totalled $12,000 and liabilities were $30,000.00, resulting in a non-superannuation asset pool of minus $18,000.00.
Where the husband’s asserts that his Superannuation was worth twice that of the wife, in my view, that value ought to be seen in light of the other assets which in fact had a negative value. Balancing out those assets and liabilities, the real worth of the husband’s superannuation as a contribution to the marriage is in my view $127,690 given to the Superannuation, less the $18,000.00 liabilities from the other assets, a total of around $109,000.00 overall in net terms.
In relation to the personal loans and credit card debts that the husband introduced at the beginning of the relationship I make the observation that the repayments constituted a significant draw on the parties’ weekly salaries. The ANZ credit card which at the maximum limit was $243.69 per month, and the personal loan with Bank of Queensland was $459.00 per month and the Westpac Visa had minimum monthly repayments of $532.37. These credit card repayments were paid out after four years into the marriage when the Property L unit sold in late 2004. From a profit of $45,000.00 on the unit, $28,000.00 was paid directly on the two credit cards.
The husband worked during the relationship and it seems uncontested that generally he earned a lesser salary than the wife for the duration of the five year relationship. The wife accepts that the husband directed at least half of his salary into the marriage finances. The mortgage statements show the husband making regular payments on the
Property L unit, starting at $800 per month but decreasing after the first few months to $600.00.
The wife says that the husband gambled, drank heavily and smoked cigarettes. Many spouses would drink and smoke cigarettes. The husband admitted that he went for counselling during the marriage in relation to his gambling habits. At the same time he states that on average he was spending $20.00 per week. I regard his comment that this amount of money was too much as being disingenuous. It is clear from the evidence of his gambling that the husband had periods when he would spend hundreds of dollars in a cluster of days as seen in November 2000 when he spent $800 over two days.
As to the husband’s gambling whilst I am satisfied that he has understated the extent of his gambling and whilst I appreciate that obtaining evidence of gambling is difficult, the evidence that I have in this matter, falls short of establishing on the requisite standard of proof on the Briginshaw[18] test and as referred to in section 141 of the Commonwealth Evidence Act that a wastage claim exists[19]. Counsel for the wife conceded this in his final submissions. Whilst Mr Victoire asks me to take this issue into account in a general way when weighing up the contribution, I am not prepared to do this as I only have evidence of very limited spending, albeit I am not satisfied that the husband gave his evidence honestly on this issue.
[18] Briginshaw (1938) 60 CLR 336.
[19] Re NCH and RCH (2004) FLC 93-204; Dorney & Dorney [2007] FMCAFAM 617 which refers to various authorities.
In relation to his non-financial contributions there is scant evidence of the husband making much contribution in this regard. The husband says he assisted with the care of the children when he was home. He may have done this, however, I am satisfied that the bulk of the parenting and homemaking was performed by the wife, often without any assistance of any kind from the husband who was living in Cairns for six months by himself when the wife and the parties’ first child moved to Thursday Island to live. This also occurred when the husband did move to Thursday Island but then was absent from Thursday Island for the whole working week, or later, when he regularly travelled away to the other Islands each second week or at a later period for a week each six weeks or so.
At the end of the trial Mr Burridge and Mr Victoire have submitted that they are both in agreement that apart from the gambling issue, the contributions during the relationship were otherwise equal.
Significantly, post separation the husband has made no contribution to the welfare of the family. His physical involvement with his children is unusually restrictive and has amounted to him seeing the children about four times in five years, for limited periods.
The only financial contribution he has made is through paying child support as the legislation requires him to, based on his salary. The amount paid by him is $950.00 per month. It is apparent from the evidence contained in the wife’s affidavit that the cost of paying even for the children’s extracurricular activities alone is greater than this amount. Paragraph 67 sets out monthly expenses for art, karate, AFL, basketball and after hours school care at $1,003.00 per month. The wife is responsible for paying every dollar involved in the cost of raising the children over and above the child support paid by the husband.
The husband assumed responsibility for paying one of the two remaining debts at separation, and of $13,000.00 he still has $3,000.00 remaining. The husband has had five years to pay out this debt during which he has had a full time income. As I have said elsewhere in these reasons, the husband seems to be a poor manager of money.
The husband has had the benefit of what I consider would be his notional share in the wife’s redundancy payment due to his indirect contributions during the marriage, as explained elsewhere in these reasons. Around $60,000.00 of the redundancy was spent on the family prior to separation, the wife retaining about $28,000.00.
The husband has continued to make direct financial contributions to his own superannuation fund post separation.
Other than paying child support pursuant to the legislation, the husband has made no post separation contributions to the welfare of the family pursuant to s.79 (4)(c) or any other indirect contributions. Therefore it cannot be argued, and nor was it, that he has made any contribution directly or indirectly to the wife’s superannuation in this five year post separation period. He has made no financial contributions to the non-superannuation assets acquired by the wife post separation.
The Wife
The wife introduced assets at the commencement of this short lived relationship. The insurance value was around $40,000.00. I do not have evidence of the second hand value of the wife’s car and furniture, nor do I have evidence that the insurance value was the “replacement value” or the second hand value. This issue was not the topic of cross examination. I am satisfied that the wife bought in non-superannuation assets to the marriage with a value of around $40,000.00 or slightly less.
The wife has made significant contributions during the marriage both financial and non-financial. In addition to her car and furniture, the wife contributed funds gifted to her from her own family
,: a sum of around $7,000.00 to the purchase of the parties’ apartment in Property L Cairns.[20] Apart from lending the husband around $600.00 to buy paint to do up the husband’s house in [S] and having her step fatherMr W help the husband prepare the house for sale, the wife started paying payments on the husband’s credit card after cohabitation, and for about four or five months the wife solely paid the weekly rent, and all expenses for each of them including food, electricity, phone, insurance and day to day expenses. This was on the basis that the husband said he had no money to contribute at the time as he was paying upkeep on his house in Brisbane and paying his various other liabilities.
[20] Wife’s affidavit paragraph 13 - $6,7329.00
The wife contributed all of her earnings to the welfare of the family, towards food and expenses, and towards their joint debts. The wife negotiated inexpensive board of around $50.00 a week with her adult daughter from another relationship to enable the husband to live somewhere else other than their Property L unit, so that the unit could be let out. The wife’s assertion that she paid for the mortgage and the other expenses is noted and I accept that as being truthful. However, the Bank of Queensland statements show each of the parties contributing to the repayments on the mortgage in different proportions[21]. The wife says that the husband drew out of those funds, and I accept that he did. It seems to me however, that both parties drew on those funds at different times.
[21][21] Exhibit M6 and Exhibit F3.
The wife has contributed most of the redundancy payment of $87,000 net, $60,000.00 of which was spent on the benefit of the family prior to separation and $27,000.00 of it post separation.
The wife has paid for half of the remaining debt at the time of separation, some $13.000.00 at a time when she had to provide for the housing for the children of the marriage and absorb all of the costs associated with raising the children, apart from the child support paid by the husband.
The wife has accessed her own superannuation post separation and those funds have been spent to assist her and the children post separation. I accept that those funds were spent on reasonably incurred expenses for the ongoing support of the mother and children.
Significantly the wife has contributed solely to the post separation raising of the two children [X] and [Y]. At separation, [X] was aged four and a half, and [Y] was aged 2 years and four months. [X] is now 9 and [Y] is 7. For the five years post separation the mother has solely raised these two children. The husband has had the overnight care of the children for approximately 6 nights in this time, visiting the children on four separate occasions between 2006 and 2009 and once in September 2010. I regard the wife’s contributions pursuant to s,79(4) (c) as a significant post separation non-financial contribution.
The wife has continued to make contributions to her own superannuation fund post separation as has the husband.
Evaluation of the parties’ contributions
Evaluating the parties’ respective contributions involves having regard to various factors. The husband has entered the marriage with greater superannuation than the wife. If the superannuation only is looked at in a separate pool, the husband had $127,690.00 and the wife had $66,242.92.
The extent of the disparity between their respective superannuation funds is diminished however, when the debts that the husband bought into the marriage in relation to the non-superannuation assets are taken into account as I have already stated. A close examination of the husband’s non-superannuation assets reveals he entered the marriage with at least $30,000.00 debt. The husband’s equity in the house sold shortly after cohabitation crystallised into 12,000.00. Therefore, the non-superannuation assets of the husband are either $18,000.00 in the negative or $25,700.00 in the negative if the second credit card had funds on it at the commencement of the relationship. Deducting those figures from the value of the husband’s superannuation $127,690.00 results in that figure being reduced to either $109,690.00 or $101,990.00.
The wife entered the marriage, firstly without debt, and secondly with non-superannuation assets worth at most $40,000.00 and likely a little less. Shortly after the relationship commenced and once the equity in the husband’s [S] house crystallised a few months after cohabitation, the wife contributed some $6,700.00 coming from her family towards the purchase of the Property L unit. The wife had approximately $66,000.00 in her superannuation fund. The wife has had around $112,000.00 or a little less in both super and non-super assets. A close examination of their respective contributions therefore shows that the disparity between the husband’s initial contributions and the wife’s is not as great as the husband suggests. I find that the initial contributions were approximately equal.
As to the alleged imbalance of the initial contributions I reject the assertion that the husband’s superannuation in the overall context of both superannuation and non-superannuation assets, was worth twice as much as the wife’s. His Honour Justice Watts in T and T succinctly summarised the approach taken in relation to contributions to superannuation made prior to and after cohabitation. His Honour stated that there are a number of things to consider:
1. The importance of the imbalance of initial contribution will lessen as the period of cohabitation increases;
2. Even though it is neither practical or desirable to approach cases in a pseudo mathematical way, a calculation of initial contribution does provide a “rough initial point of reference” (Clauson & Clauson (1995) FLC 92-59)
3. There need not be an imbalance of contribution during the cohabitation in favour of one party to offset the initial contribution of the other party. The importance of the initial contribution can be eroded over time in circumstances where there is equality of contributions during the course of the cohabitation (Bremner & Bremner (1995) FLC 92-560
4. Finally regard needs to be had for what the Full Court said in Pierce & Pierce (1999) FLC 92-844 where the Full Court said that it was “not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances to the initial contribution”.
In this matter, each of the parties have made contributions to the marriage at the commencement through their respective superannuation funds, however, seen in their full context, the apparent greater weight that might be attached to the husband’s superannuation fund, is diminished by the value of the liabilities he also introduced into the marriage. The wife gave uncontested evidence that she set about making repayments to the husband’s credit cards at the point of co-habitation as the husband said he had to pay the liabilities on the house he owned.
When considering the wife’s initial financial contributions at the commencement of the relationship and funds directed towards the acquisition of the Property L shortly after cohabitation, I am satisfied that overall the husband and wife contributed approximately similar amounts at the commencement of the relationship. If the parties' contributions during the relationship were regarded as equal, the contributions as at the separation date would in my view stand at 50/50. If I am wrong about that, I regard the weight attributed to the wife’s financial and non-financial contributions during the relationship, together with her initial contributions, as offsetting any purported initial contributed solely by the husband.
As to the contributions during the marriage, both Counsel submit that, apart from the gambling issue, the husband’s and wife’s contributions are equal.
I regard the wife as having made superior non-financial contribution during the marriage than the husband. The uncontested evidence of the wife was that for lengthy periods she was the sole parent of a child or both children. There is little evidence of the husband making non-financial contributions during the marriage. His contributions to the welfare of the family have been limited.
It seems on the evidence that the wife’s salary has been a little higher than the husband during the marriage, however, I do not consider that the difference would add much if any weight to the wife’s contributions. I consider also that the wife made a further financial contribution through her redundancy package, at least half of which was accumulated in the period outside of the marriage as I have set out elsewhere in these reasons. The significant sum of $60,000.00 net was spent from the wife’s redundancy payment in the months prior to separation and as I have already stated, this sum is more than the husband’s notional contribution to the redundancy payout during the relationship.
This is a short marriage of three years, and a relationship of 5 years. In all of the circumstances and having regard to the wife’s financial and non-financial contributions and those of the husband’s, I regard the contributions of each of the parties as at the separation date as equal.
The post separation period as at the date of trial was as long as the relationship itself. The initial period of the relationship of 5 years, has added to it another 5 years during which the husband and wife have been contributing financially to their own superannuation funds. In addition the wife has been continuing to contribute significantly to the welfare of the family and the children in her role as sole homemaker and parent, as well as being a working mother. The mother has not even had the assistance of the husband during the school holidays each year, which might otherwise have been expected if the father had
re-located and re-organised to spend time with his children during most of the school holidays.
Those post separation non-financial contributions by the wife are in my view important and I attach significant weight to the wife’s contributions over the period 2005 until 2010. The wife has continued to contribute financially to her own superannuation as has the husband for the past 5 years, however, in my view the non-financial contributions of the wife for five years post separation represent a significant indirect contribution to the husband’s superannuation. The husband has made no similar non-financial, financial, direct or indirect contributions to the wife’s superannuation post separation and up to the common date of September 2009 or up to the time of trial.
Mr Burridge of Counsel on behalf of the husband submitted that the husband’s case is that there should be a “70% division of the accumulated superannuation during the course of the relationship” and “that would mean a split of $67,000.00 from the husband’s superannuation”[22]. Using the figures of Mr S, 70% of the total of accumulated superannuation, of both the husband and wife, would mean 70% x the total of $153,620.55 + $77,216.52($230,837.00) which results in a figure of $161,585.95[23] to the wife and the balance of $69,251.12 to the husband. Perhaps Mr Burridge intended to submit what was more in line with his written case outline which states:
“The Orders sought by the Husband reflect a payment from his Superannuation to the wife which equates to 70% of the increase in his superannuation over the period of the relationship.”
[22] Transcript page 83 – line 35.
[23] Page 7 of 8.
That figure seems to be obtained by simply using the Family Law Value of the husband’s superannuation of $223,343.74 at separation and deducting Family Law Value at the commencement of the marriage $127,690.61. That total $95,653.00 x 70% = $66,957.10 or approximately $67,000.00
I do not regard this figure as properly acknowledging the husband’s debts at the commencement of the relationship, the wife’s initial contributions and her subsequent contributions during the relationship both financially and non-financially, and it particularly does not address the significant contributions pursuant to s.79(4) (c ) post separation. I am satisfied that it is a wholly inadequate acknowledgment of the wife’s contributions to which I have referred in these reasons.
I consider that in view of all the circumstances, and in light of the wife’s indirect contributions to the husband’s superannuation, and her contributions at the commencement and throughout the marriage, the wife’s entitlement to a percentage of the husband’s superannuation fund should not be limited to a portion or percentage of the growth, pegged at the separation date which the husband seems to be suggesting.
I am mindful that the husband’s defined benefit superannuation fund has escalated since separation at a greater rate than that of the wife’s. The husband has continued to contribute to his fund, though there is no evidence that he has contributed anything other than his regular percentage deducted from his salary. The husband’s defined benefit fund is described by Mr S as being in the growth phase. The husband is 52 and edging closer to retirement. The escalation at this stage of the life of the fund is likely due to him being in the fund pre-marriage, during the marriage and post separation. His Honour Justice Watts’ reasons in T v T (supra) at paragraph 114 set out a passage of the Explanatory Memorandum in relation to valuing interests in defined benefit plans. That memorandum refers to the interest typically based on years of service with an employer and salary levels prior to retirement as well as contributions and investment earnings. The difficulty in properly valuing a future interest is referred to noting that it is not possible to know with certainty the full value during any point in time, except when the benefit becomes payable. I have had regard to the projections by Mr S in his report in relation to the superannuation fund of each party at the retirement dates of 55, 60 and 65.
In relation to the overall financial and non-financial contributions of each of the parties up to the time of trial including the superannuation of each of the parties, I assess their respective contributions up to separation as equal. In the five years post separation I consider that the wife’s post separation non-financial contribution to the welfare of the family requires a further adjustment of 7.5% in the wife’s favour bringing the overall assessment of the wife’s percentage to 57.5% and 42.5% to the husband.
Adopting those percentage figures and applying them to the total of the superannuation funds (being $440,278.00 + $292,816 = $733,094.00) the total amount would be divided as to $421,529.00 to the wife and $311,564.00 to the husband.
The next step is for me to determine whether or not any further adjustment is required following an evaluation of the factors referred to in s.79(4) d-g.
The third step – 79 (4) d-g matters which include a consideration of section 75(2) factors – income earning capacity and other matters
As to the effect of any proposed order on the earning capacity of either party, I do not regard any Order made for a superannuation split as having an effect on either party’s capacity to earn.
Turning to the relevant s.75(2) factors the wife is seeking an uplift of 15% based on a contribution finding of 55% or 20% based on a contribution of 50% .
The husband is aged 52 and older than the wife who is aged 47. Neither party has any medical condition that is going to impact on their income earning capacity[24] and I note the oral submission of
Mr Burridge that he is not seeking an uplift factor based on any illness of the husband.
[24] Page 92, lines 35 onwards, and page 93 line 0 – 5.
The wife earns $117,000.00 per annum and the wife earns approximately $111,000.00. The husband has in the past during 2007 and 2008 earned funds from his [omitted] business of around $10,000 over and above his salary. I do not anticipate the husband earning any significant funds from his [business]. The wife is undertaking further studies however she is in the early stages of these additional studies. With two children to raise and full time work, I consider that the wife’s further education will be steady but slow.
As to the income, property and financial resources of each of the parties, I am mindful that each of the parties is currently in debt according to their current non-superannuation assets and liabilities. The wife carries greater debt as she has purchased a house for herself and the children and she has the obligation now and in to the future to raise the children and provide housing for them, along with the other costs which are not covered by the husband’s child support. The children are aged 9 and 7 and the wife has an ongoing obligation to provide for the children for the next 11 years until the youngest is aged 18. I regard this factor as a significant s.75(2) factor.
The husband pays child support as assessed of around $950 per month. It is clear on the evidence that the wife still pays significant child rearing costs as outlined in her affidavit. In addition, the wife alone bears the cost of after school care and vacation care incurred to enable her to work full time.
The husband has a duty to support his child aged only 2 from a post separation relationship. He says he pays around $125.00 per week for [Z]. I could not be sure that he is paying that sum or not as I have found generally that the husband’s evidence is unreliable. I am, however, satisfied that he is currently paying child support for [Z] around that figure. The husband’s obligation to provide for the children of this marriage will continue for 11 years and [Z]’s support till aged 18 will continue for 16 years. The husband may well be retired by that stage
,: he currently being 52. I anticipate that the husband will continue to pay child support for the children of this marriage whilst ever he works with [omitted].The husband has a wife who does not yet live in Australia. The husband says she has a property settlement happening in Sweden and he is hopeful that she may be able to come to Australia to live if he can get her Visa situation sorted out. I do not have any other evidence about the financial circumstances, income or assets of the husband’s Swedish wife.
Looking at the financial resources and other property of the husband and wife, I note that the wife has purchased a house and borrowed heavily to do so. The husband has also borrowed funds and increased his credit card limits. He has purchased no assets of any substance according to his financial statement. He is choosing to spend funds on his own discretionary expenditures.
Having regard to the financial resources held by each of the parties at the time of trial, I note that in the last few months of the marriage, the wife cashed in her redundancy payment and that it has been spent on the family during the marriage and the support of the wife and children after separation. That is a resource that is no longer available to the wife. Most of that resource accumulated prior to the marriage.
The wife also accessed her superannuation in the post separation period and reduced the fund by $20,000.00. I do not know whether that was using the hardship provisions or not, however, I do know that the funds were spent on assets for the use of the wife and children. The evidence shows that the wife had stepped out of the workforce and accepted the redundancy payment so as to be able to commit time to raising the children and care for the husband who had been ill with pancreatitis. At separation therefore the wife was not in employment. It was shortly after this time that the wife accessed a portion of her superannuation. The wife’s current funds are therefore diminished by the extent of that drawing, some $20,000.00 of which was spent on upgrading the family car and other reasonable expenses associated with having the sole care and responsibility of two children post separation. When the wife took on the primary role of caring for the family being the husband and children, she left the workforce to do so. The wife not only had that interruption to her career, she then found herself unemployed and in debt and having to provide for two children at separation.
The husband submits that the wife is entitled to a portion of his superannuation by way of a splitting Order, though, whilst acknowledging that the most significant factor under s.75(2) is the wife having the care of two children under 18, the husband urges me not to place too much weight on that factor. Mr Burridge on behalf of the husband submitted that I ought not place too much weight on the s.75(2) factor of the wife having the sole responsibility for raising the two children as the wife superannuation split is not really going to provide in real financial and monetary terms, the sort of benefit or immediate advantage that receiving non-superannuation property would result in.
I have considered that submission and I find some difficulty with it. The wife is the parent who, in the here and now has to provide housing and transport sufficient for herself and the two children of the marriage together with all of the other child raising expenses over and above the child support paid by the husband. The wife has to provide for herself and the two children, instead of just providing for herself, as would be the case if the children lived with the husband.
The wife in my view will also be paying significant funds for the child rearing costs of the children, notwithstanding that the husband is paying child support. As I have mentioned elsewhere, the costs at this time in the children’s lives of supporting them in their normal child hood pursuits of basketball, AFL and karate is set out in the wife’s material and is a substantial cost. In addition, the wife continues to work and therefore the adjustment in relation to income earning capacity is not a serious consideration, whereas, if the wife chose to be a stay at home mother, the comparison in income earning capacity would be significant whilst the mother directed her efforts solely into parenting and remained out of the paid workforce. Another issue which also arises is that the mother in order to earn her income, has to pay for after school care weekly and also vacation care during the holidays to enable her to work. The husband as I have said elsewhere, does not even have the children in his physical care for holidays. Whilst it is the husband’s prerogative to forego these precious years with his children, his choices have financial ramifications for the wife.
Whilst the wife is providing for the children and incurring all these expenses, she is foregoing the opportunity to contribute additional funds to her own superannuation or retirement and as she will inevitably have less income that she would if the father was paying all of these costs.
I therefore do not accept the contention that because the wife is not going to get cash in the immediate future, that I should place any less weight on the s.75(2) factor of the wife having the sole care of two children under 18.
As to the standard of living of each of the parties, each has a regular and healthy income, though each has debt to service. There were only debts left at separation, so neither party had an interest in real estate at the time of separation. The wife has had to borrow significantly to provide a permanent home for her and the children. This has only been achieved through her own ability to earn a relatively high income. If the wife had not returned to the workforce, the standard of living for her and the children would have been greatly reduced.
On the evaluation of the contributions which I have undertaken, the wife is entitled 57.5% of the total of superannuation and the husband is entitled to 42.5%. That percentage is reflected as $ 421,529.00 to the wife and $311,564.00 to the husband.
Having regard to all of the relevant circumstances I consider that it is appropriate to adjust the contribution based entitlement further in favour of the wife to reflect the impact of the relevant factors under s.79 (4) d- g which I have referred to. I regard the 15-20% as submitted by Mr Victoire as not properly acknowledging the husband being 5 years older than the wife, that he earns slightly less than the wife and he has to pay child support for another child, as well as the two children of this marriage. I consider that in these circumstances, an uplift factor of 7.5% is appropriate.
By adjusting the figure I have already determined as being the wife’s entitlement due to her contributions of 57.5% or $421,529.00 the wife’s entitlement becomes 65% or $476,511.00. The husband’s entitlement becomes 35% or $256,582.00.
Step 4 – determining whether in all of the circumstances the proposed Orders are just and equitable
On the proposed Orders, the husband and wife will retain their current non-superannuation assets. Each has debt, the wife more than the husband. This is because the wife has purchased a house for herself and the children.
In terms of the Superannuation split, the wife would have superannuation valued at $476,511.00. The wife’s own superannuation fund stands at $292,816.07 therefore a splitting Order will be made in her favour for a base amount of $183,695.00.
The husband will retain the balance of his superannuation less the value of the splitting Order. The husband’s superannuation is valued at $440,279.68. After the splitting Order the husband’s fund will be valued $256,583.00.
The value of each party’s fund will increase by retirement. Mr S has set out the future value of their current funds prior to a superannuation split. The wife has 13 years to aged 60, the husband has 8. There is no evidence as to when either party proposes retiring. The husband will receive a multiple of his final salary, and it is anticipated that his salary will increase at least by the consumer price index between the date of trial and retirement date. The estimate of each of the parties’ retirement benefit at age 60, prior to the proposed split, was considered to be equal. Given the financial burden which will be absorbed by the wife over the coming years until the children reach the age of 18 and her ongoing sole responsibility for their care and the other financial and non-financial contributions made by the wife and which she will continue to make for some years ahead, I consider that it is appropriate that ultimately her greater contributions and future costs are acknowledged by her receiving a greater share of the total superannuation pool.
The husband alleged he entered this relationship with a more funds in his superannuation fund than the wife. However, the debts he brought into the marriage in the non-superannuation assets had a direct impact on the real value of the assets contributed at the commencement of the marriage. Each of the parties had superannuation prior to the commencement of the marriage. I have concluded that the parties’ contribution at the commencement of the relationship was approximately the same after consideration of their respective assets (including both superannuation and non-superannuation) and liabilities.
The wife assumed an equal amount of debt at separation with the husband, even though she had the prime responsibility for raising the two children. The wife has contributed a redundancy package, most of which was accrued prior to marriage. That resource is no longer available to her. The wife has accessed superannuation and reduced her fund just after separation. I note that she was left at separation with the two children and debts. The wife had to return to the work force to support herself and provide accommodation for the two children of the marriage for the five years post separation. The wife has been contributing to the husband’s superannuation for ten years in total.
The husband left Far North Queensland and moved to Canberra where he has had only himself to support and provide housing and transport for. Over the past two years he has been required to support his young son aged 2.
Post separation for 5 years, the wife has continued to be the primary and sole parent of the parties’ two young children. Her contributions in this regard were significant.
I consider that in all of the circumstances, a result that enables the wife to share equally in the husband’s superannuation growth during this relationship and to receive acknowledgment of the relevant section 79 (4) d – g factors results in a just and equitable division.
I intend to make a splitting Order in favour of the wife from the interest held by the husband in his [P] Superannuation Scheme, to enable the wife to receive 65% of the total superannuation pool. The calculation of the total superannuation is $733,095.00. This sum multiplied by 65% equates to $476,511.00. The wife already has superannuation to the value of $292,816.00. The husband’s superannuation fund is in the growth phase therefore a splitting Order pursuant to s.90MT (1) (a) with a base amount of $183,695.00 allocated to the wife out of the interest held by the husband in the [P] Superannuation Fund, with the husband’s entitlement to be reduced by that amount will be Ordered. The wife is to retain her own superannuation fund to the exclusion of the husband.
I will also make the standard Orders that are set out in the wife’s draft of Orders sought from Order 2 through to 10 inclusive, with the addition of the words “as and when such repayments fall due” in relation to Order 6 which refers to the husband being liable for repaying the repayments as and when they fall due on the Bank of Queensland Loan account.
I certify that the preceding one hundred and forty-three (143) paragraphs are a true copy of the reasons for judgment of Willis FM
Date: 4 April 2011
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