Marsh and Marsh (No.2)
[2012] FMCAfam 13
•19 January 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
MARSH & MARSH (No.2) [2012] FMCAfam 13
FAMILY LAW – Property – contributions of parties – add-back of interim property distributions – characterisation of assumed tax on disposition of shares and interim property distribution amounts – relevant s.75(2) factors – superannuation splitting order.
Family Law Act 1975, ss.44, 75, 79, 90MT, 106A
C & C [2005] FamCA 429; (2005) 33 Fam LR 414; (2005) FLC 93-220
In the Marriage ofHickey (2003) 30 Fam LR 355; (2003) FLC 93-143
Marsh & Marsh [2010] FMCAfam 1519
Polonius & York [2010] FamCAFC 228
Rosati & Rosati (1998) 23 Fam LR 288; (1998) FLC 92-804; [1998] FamCA 38
Z & Z [2005] FamCA 996; (2005) FLC 93-241
Applicant: MS MARSH
Respondent: MR MARSH
File Number: SYC 8390 of 2007
Judgment of: Monahan FM
Hearing dates: 26 & 27 July 2011
Date of Last Submission: 27 July 2011
Delivered at: Sydney
Delivered on: 19 January 2012 REPRESENTATION
Counsel for the Applicant: Mr Mater
Solicitors for the Applicant: John R Quinn & Co
Counsel for the Respondent: Mr Richards
Solicitors for the Respondent: Turner Freeman Lawyers ORDERS
(1)Within 28 days from the date of these Orders, MR MARSH (“the husband”) do all acts and things and execute all deeds, documents and instruments necessary to transfer to MS MARSH (“the wife”) all of the husband’s right, title and interest in the property known as Property H, [H], NSW (“the [H] property”).
(2)The wife retain all furniture and household contents in the [H] property.
(3)Within 42 days from the date of these Orders, the husband pay to the wife the sum of $125,178.20 (“the settlement sum”).
(4)In the event that the husband fails to comply with the paragraph three (3) herein, then:
(a)interest shall thereafter accrue on the settlement sum (or such unpaid portion thereof) until full payment is made; and
(b)in the event that the husband has failed to pay the settlement sum in full within 90 days of the date of these Orders, the husband thereafter forthwith cause the property known as Property R, NSW, to be sold and the wife to be paid the settlement sum together with any interest that has accrued thereon from the net proceeds of sale. In the event of any shortfall, the husband thereafter forthwith cause the property known as Property B, NSW, to be sold and the wife to be paid from the net proceeds of sale such sum due to her that remains outstanding, together with any interest that has accrued on the unpaid portion of the settlement amount.
(5)Both parties do all acts and sign all documents necessary to transfer their interest, if any, in the 2006 [vehicle omitted] to their daughter, [Z].
(6)Other than as is specifically provided for in these Orders, the parties be solely entitled to the exclusion of the other to all other real property, personal property and chattels of whatsoever nature and kind in the possession or control of each of the parties as at the date of these Orders, including, but not limited to, all or any money standing to the credit of the party in any bank or building society, superannuation entitlements, shareholdings, motor vehicles, furniture and contents and any present or future expectation under a trust or estate.
(7)The parties indemnify each other in respect of all liability to pay tax including income tax, goods and services tax, capital gains, penalty tax and interest which may arise in the future in respect of any tax returns lodged on behalf of each of them or any entity in which each of them has an interest as at the date of these Orders or in respect of any transactions pursuant to these Orders.
(8)The husband and [P] Superannuation do all necessary acts and things, sign all documents and give all consents necessary to give force and effect to the Orders hereunder:
(a)paragraphs 8(b) to 8(i) (inclusive) and 9(e) and 9(f) herein are binding on [P] Superannuation (“the Fund”);
(b)the amount allocated to the wife out of the interest of the husband in the Fund is $502,170.60;
(c)pursuant to s.90MT(1)(a) of the Family Law Act 1975 (“the Act”) whenever a splittable payment becomes payable in respect of the interest of the husband in the Fund, the wife be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (“the Regulations”) using the base amount and that there be a corresponding reduction in the entitlement of the husband to whom the splittable payment would have become payable but for these Orders;
(d)paragraph 8(c) herein has effect from the operative time;
(e)the operative time for the purpose of these Orders is the seventh business day after the husband has complied with paragraph 9(d) herein;
(f)within 14 days of becoming entitled to receive superannuation benefits from the Fund, the wife provide to the Fund all such forms as shall be necessary to enable it to determine the nature and quantum of the superannuation entitlement, together with any other related information the Fund may reasonably require;
(g)until such time as the amount of the superannuation split allocated to the wife pursuant to these Orders can be rolled over on to a separate account in the sole name of the wife:
(i)the husband provide to the wife no less than 28 days notice before such time he elects to retire for any reason or otherwise become entitled to access in whole or in part his entitlement to the Fund;
(ii)the husband direct and authorise the Trustee of the Fund to communicate in writing with the wife and/or any person authorised by her:
1. to answer any reasonable enquiries as may be made by the wife or on her behalf from time to time in relation to her entitlement in the Fund; and
2. to provide the wife and/or her authorised representative a copy of any notice of any application or request by the husband which seeks release of entitlements in the Fund insofar as that release may affect the wife’s entitlement in the Fund pursuant to these Orders;
(h)the husband by himself, or by his servants or agents, be hereby restrained from doing any act or thing which would prevent the wife, her heirs, administrators, executors or nominees from receiving the benefit in the Fund to which she is entitled pursuant to these Orders.
(i)in the event that the superannuation split to the wife pursuant to these Orders can be rolled over into a separate account of the wife, the parties and the Trustee of the Fund each do all such acts and things and execute all such documents as may be necessary to facilitate and to implement that roll-over.
(9)Paragraph eight (8) herein be stayed pending the following:
(a)within seven (7) days of the date of these Orders, the husband cause a sealed copy of these Orders be served on the Fund;
(b)within 28 days of the date of these Orders, the husband cause an affidavit to be filed and served confirming his compliance with paragraph 9(a) herein and attaching any response received from the Fund;
(c)the Court will consider in Chambers the affidavit filed by the husband pursuant to paragraph 9(b) herein and, if satisfied that procedural fairness has been afforded to the Fund, the Court may lift the stay, or alternatively make further directions, including listing the matter for mention hearing in relation to this discrete issue only; and
(d)within seven (7) days of the Court making Orders lifting the stay, the husband cause the Trustee of the Fund to be served with a sealed copy of such further Orders, together with a completed Regulation 72 Notice.
(10)In the event that either party refuses or neglects to execute any deed or instrument that may be required to give effect to these Orders, the Registrar of the Court be appointed pursuant to s.106A of the Act to execute such deed or instrument in the name of such party or parties and do all acts necessary to give validity to the operation to the deed or instrument.
(11)Subject to paragraphs eight (8) and nine (9) herein, all extant applications be otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Marsh & Marsh (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEYSYC 8390 of 2007
MS MARSH Applicant
And
MR MARSH Respondent
REASONS FOR JUDGMENT
Introduction
1.This is an application by MS MARSH (“the wife”) against MR MARSH (“the husband”) seeking various property orders pursuant to s.79 of the Family Law Act 1975 (“the Act”). The wife’s application is opposed by the husband, who is seeking different property orders.
2.The parties are in dispute as to their respective property and family contributions made during the relationship and following their separation. They are also in conflict over their respective needs and future income earning capacity.
3.The wife commenced these proceedings by an Initiating Application filed on 15 June 2010. The matter first came before me in my duty list on 21 July 2010 and on that occasion I made the following orders by consent:
“3.The Applicant have leave to make her Application out of time under s.44(3) of the Family Law Act 1975.
4.Until further order, the Respondent be restrained from selling, assigning, mortgaging, encumbering or in any other way dealing with his interest in the properties registered in his name and known as:
(a)Property B; and
(b)Property R.”
An Order was also made on that occasion for the parties to attend a Conciliation Conference on 27 October 2010.
4.The wife thereafter filed an Application in a Case on 29 July 2010 seeking interim spousal maintenance in the sum of $1,227.00 per week as well as an order that the husband pay her legal costs of the application (“the interim application”).
5.The interim application came before me in my duty list on 8 September 2010 and it was adjourned to 25 November 2010 being a date after the Conciliation Conference.
6.The Conciliation Conference proceeded before Registrar McNamara on 27 October 2010. Unfortunately, the parties were unable to resolve their dispute.
7.When the matter returned before me on 25 November 2010, I agreed to hear the interim application that day and to list the substantive matter for Final Hearing in mid-2011. Following an interim hearing of the interim application I reserved my decision and listed the matter for judgment hearing on 10 December 2010.
8.I duly delivered my decision on that subsequent date and the reasons were settled and released to the parties prior to the Final Hearing “(the interim decision”)[1]. In summary, although I dismissed the wife’s interim application for spousal maintenance, orders were made for a further interim property distribution in her favour in the amount of $30,000.00. The parties had earlier agreed for the wife to receive an interim property distribution in the amount of $120,000.00.
[1] Marsh & Marsh [2010] FMCAfam 1519.
9.The Final Hearing proceeded before me on 26 July 2011 and concluded the following day. The wife was represented by Mr Mater of counsel and the husband was represented by Mr Richards of counsel.
Background
10.I refer to the background information about the parties, their relationship and their children that I provided in the interim decision.[2]
[2] Ibid, at [11]-[19].
11.
Both parties provided the Court with comprehensive chronologies.
As to significant events in their relationship, the parties were not in dispute, or not in any significant dispute, in relation to the following:
·1958: Husband born [date omitted] and wife born [date omitted] (both currently aged 53 years);
·1979: parties commence cohabitation in Adelaide upon their marriage [in] 1979; both parties employed full-time; wife asserts parties had no significant assets at time of marriage while husband asserts he had some savings, a car and some accumulated superannuation;
·1979-1980: parties jointly purchase Property M, South Australia for about $35,500.00 financed by joint savings, proceeds of the sale husband’s car and loan in joint names; parties purchase vacant land at [W], South Australia and build home thereon using jointly borrowed funds; on completion of the [W] home, the Property M home sold and net proceeds used to reduce [W] mortgage;
·1981: Husband commences employment with [B] (“[B]”) [in] 1981 and parties move to Darwin;
·1983: Wife ceases employment in September prior to the birth of parties’ eldest child [X] [in] 1983 (now aged 28 years) (“[X]”);
·1986: Parties’ child [Y] born [in] 1986 (now aged 25 years) (“[Y]”);
·1990: Parties’ youngest child, [Z], born [in] 1990 (turning 21 years in 2011) (“[Z]”);
·1991: Husband transferred by [B] to Sydney and parties move to Sydney with the children; parties purchase property at Property Q, NSW for $195,500.00 financed by the proceeds of the sale of the [W] property and NAB mortgage funds of $140,000.00;
·1992: Husband is advised by [B] that he is being transferred to Melbourne; parties sell the Property Q property for $201,000.00; Husband subsequently advised by [B] that he will not be transferred to Melbourne and parties and the children reside in rented serviced apartment (with rent paid by [B]);
·1993: Parties purchase Property P, for $320,000.00 funded by the proceeds of the sale of the Property Q property and NAB mortgage funds of $286,000.00; [B] pays some interest on NAB mortgage for first four years;
·1998: Parties purchase vacant land at Property H, [H] (“the [H] property”) for $220,000.00, using joint savings and NAB mortgage funds of $520,000.00 to fund both the purchase and construction of a family home;
·2000: Parties move into the [H] property; parties spend $150,000.00 on furnishings before occupation; parties lease out the property at Property P (“the investment property”); Husband moves out of the [H] property in November 2000 and thereafter rents accommodation until July 2002; parties formally separate on 4 December 2000; Husband pays $8,500.00 per month to Wife for 9 years and 4 months, together with various running expenses on home, private health insurance, gap fees, children’s tertiary fees and expenses, books, laptops, allowances, motor vehicles for each child on their sixteenth birthdays, registration and insurance, travel and accommodation expenses, birthday presents, milestone birthday parties and presents (which Husband asserts totals $2,645,170.00);
·2001: Husband commences relationship with Ms G in late 2001; Husband also moves back into the [H] property for two weeks in December 2001 while wife’s parents visit; Husband moves into Ms G’s home with her two children at [omitted], NSW;
·2002: Parties sell the investment property for $555,000.00 with net proceeds used to reduce mortgage over the [H] property;
·2003: Husband purchases interest in a boat;
·2005: Husband transferred to Singapore (and later Hong Kong) by [B]; the husband provides the wife with $12,000.00 per month and meets mortgage payments on the [H] property; the wife acknowledges that in 2005 the husband reduced her credit card debt by $27,000.00; [X] moves out of the [H] property;
·2006: Husband sells his interest in the first boat and purchases an interest in a second boat; the husband discharges [H] mortgage of $350,000.00; thereafter the husband pays the wife $8,500.00 and not $12,000.00 per month;
·2007: Husband purchases property at Property R (“the Property R property”) for $1,030,000.00 financed by mortgage loan; the Property R property leased to parties’ son [X]; wife asserts she organises improvements to Property R property; husband purchases property at Property C (“the Property C property”) for $925,000.00 financed by mortgage loan;
·2008: Divorce order made by Registrar Davis on 24 January 2008; Ms G resigns her employment and moves with her 12 year old daughter to Hong Kong to live with husband (Ms G’s 18 year old son remains in Sydney); husband pays $5,000.00 off the wife’s credit card debt; husband purchases property at Property B (“the Property B property”) for $535,000.00 financed by mortgage loan; [Z] completes her Higher School Certificate;
·2009: [Y] moves out of the [H] property and into the Property B property;
·2010: Husband posted to London by [B]; Husband pays $90,000.00 to Wife (to repay her debt to son [X]) and a further $30,000.00 by way of interim property distribution; Wife commences property proceedings; wife commences spousal maintenance proceedings; [Z] moves to USA as part of her tertiary studies;
·2011: Husband pays wife a further $30,000.00 by way of Court-ordered interim property distribution; Husband continues to pay support for [Z]; Final Hearing.
Proposals
12.The wife sought the following orders at the Final Hearing:[3]
[3] See wife’s Case Outline document, page 1 stating that the wife sought the orders set out in her Initiating Application filed on 15 June 2010.
“1.…
2. Transfer of Property H, [H] to the wife
That the husband do all acts and things and execute all deeds, documents, instruments and writings necessary to transfer to the wife all of the husbands right title and interest in the property known as Property H, [H]. (hereinafter called ‘the [H] property’).
3. Transfer of Property B to the wife
That the husband do all acts and things and execute all deeds, documents, instruments and writings necessary to transfer to the wife all of the husband’s right title and interest in the property known as Property B (hereinafter called ‘the Property B property’).
4. That the husband shall do all acts and things to cause the existing mortgage on the title of the Property B property with National Australia Bank to be discharged within three (3) months of the date hereof.
5. Payment to the wife
That the husband pay the wife the sum of $500,000.00 within three (3) months of the date of these orders.
6. Superannuation entitlements
6.1 That Mr Marsh and [P] Superannuation do all necessary acts and things, sign all documents and give all consents necessary to give force and effect to the orders hereunder.
6.2 That orders 6.1 and 6.3 to 6.6 (inclusive) of these orders are binding on [P] Superannuation (‘the Fund’).
6.3 That the amount allocated to the wife in these proceedings out of the interest of the husband in these proceedings in the Fund is 50%.
6.4 That pursuant to s90MT(1)(a) of the Family Law Act 1975 (‘the Act’) whenever a splittable payment becomes payable in respect of the interest of the said husband in the Fund the wife shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (‘the Regulations’) using the base amount and that there be a corresponding reduction in the entitlement of the husband to whom the splittable payment would have become payable but for these orders.
6.5 That order 6.4 has effect from the operative time.
6.6 The operative time for the purpose of order 6.4 of these orders is four (4) business days from the date of these orders upon the Trustee of the Fund.
6.7 The wife shall, within fourteen (14) days of becoming entitled to receive superannuation benefits from [P] Superannuation provide to the Fund all such forms as shall be necessary to enable it to determine the nature and quantum of the superannuation entitlement and any other related information it may reasonably require.
6.8 That there be liberty to apply to each party and the Trustee in relation to the implementation of the orders affecting the superannuation interest.
6.9 That until such time as the superannuation split to the wife, pursuant to these orders can be rolled over on to a separate account to the wife:
(a) The husband shall provide to the wife no less than twenty-eight (28) days notice before such time he elects to retire from and take voluntary retirement and/or for any reason except or become entitled to access in whole or in part his entitlement to the Fund.
(b) That the husband shall direct and authorise the Trustee of the Fund to communicate with the wife and/or any person authorised by her in writing:
(i) to answer any reasonable enquiries as may be made by her or on her behalf from time to time in relation to her entitlement in the Fund; and
(ii) to provide the wife and/or her authorised representative a copy of any notice of any application or request by the wife which seeks release of entitlements in the Fund insofar as that release may affect the wife’s entitlement in the Fund pursuant to these orders.
6.10 The husband by himself, his servants and/or agents be and are hereby restrained from doing any act or thing which would prevent the wife, her heirs, administrators, executors or nominees from receiving the benefit in the Fund to which she is entitled pursuant to these orders.
6.11 In the event that the superannuation split to the wife pursuant to these orders can be rolled over into a separate account of the wife each of the parties hereto and the Trustee of the Fund shall each do all such acts and things and execute all such documents as may be necessary to facilitate and to implement that roll over.
7. Balance of matrimonial property
That unless otherwise specified in these orders and except for the purposes of enforcing the payment of any money due under these or any subsequent orders each party be solely entitled to the exclusion of the other to all property in the possession of such party as at this date.
8. Appointment of Registrar pursuant to Section 106A
That in the event that either party refuses or neglects to comply with the provision of any order herein the Registrar of the Family Court at Sydney is hereby appointed pursuant to Section 106A of the Family Law Act to execute all deeds and documents in the name of either the husband or the wife and do all acts and things necessary to give validity and operation to the said order.
9. Liberty to apply
That either party have liberty to apply on seven (7) days notice in the event of any difficulty arising out of the implementation and enforcement of these orders.”
13.The husband sought the following orders at the Final Hearing:[4]
“1.That within 42 days from the date of these orders the husband do all such acts and things and sign all such documents as maybe required to transfer to the wife, at the expense of the wife, all of his right title and interest in the property situated at and known as Property H, [H] in the state of New South Wales being the whole of the land more particularly described in folio identifier [omitted] (‘the [H] property’).
2. That both parties do all acts and sign all documents necessary to transfer their interest, if any, in the 2006 [vehicle omitted] registration number [ ] to their daughter, [Z].
3. That other than as is specifically provided for in these Orders the parties are solely entitled to the exclusion of the other to all other real property, personal property and chattels of whatsoever nature and kind in the possession or control of each of the parties as at the date of these Orders including but not limited to all or any money standing to the credit of the party in any bank or building society, superannuation entitlements, shareholdings, motor vehicles, furniture and contents and any present or future expectation under a trust or estate; and the wife is entitled to retain all of the furniture and contents in the [H] property.
4. That the parties indemnify each other in respect to all liability to pay tax including income tax, goods and services tax, capital gains, penalty tax and interest which may arise in the future in respect of any tax returns lodged on behalf of each of them or any entity in which each of them has an interest to the date of these Orders or in respect of any transactions pursuant to these Orders.
5. That in default of the parties or either of them doing all acts and things and executing all such documents as are necessary to give effect to these Orders, a Registrar of the Court be appointed pursuant to s106A to execute all such documents in the name of the party in default and to do all such acts and things necessary to give validity and operation to the said orders.”
[4] See husband’s ‘Minute of Order’ document.
Issues
14.The following issues were in dispute at the Final Hearing:
·the parties’ contributions made prior to the relationship;
·the parties’ contributions made during the relationship;
·the parties’ contributions made following the breakdown of the relationship;
·ascertaining the value of the net property pool given disputes between the parties as to the value of certain assets and asserted liabilities; and
·the parties’ respective future needs and obligations and, in particular, the wife’s on-going health issues.
Evidence
15.Both parties provided the Court with oral and affidavit evidence as detailed below and were cross-examined.
16.
The husband did not require either the wife’s medical practitioner,
Dr S, or the wife’s specialist gastroenterologist, Dr R, for cross-examination.
Wife’s evidence
17.The following documents were relied upon by the wife:
·Initiating Application filed on 15 June 2010;
·the wife’s affidavit sworn on 10 June 2010 and filed on 15 June 2010;
·Updating Financial Statement sworn and filed on 4 July 2011;
·the wife’s trial affidavit sworn and filed on 4 July 2011;
·the affidavit of Dr S sworn on 22 July 2011 and filed in Court on 25 July 2011 (“Dr S’s affidavit”);
·the affidavit of Dr R sworn on 22 July 2011 and filed in Court on 25 July 2011 (“Dr R’s affidavit”); and
·Outline of case document.
18.The wife also relied on a number of documents tendered during the hearing (Exhibits “AW1” to “AW6”).
19.Overall, the wife presented as a polite and generally focused witness.
Husband’s evidence
20.The husband relied upon the following documents:
·Response filed on 10 August 2010;
·Updated Financial Statement sworn on 11 July 2011 and e-filed on 12 July 2011 (“the husband’s Financial Statement”);
·the husband’s trial affidavit sworn on 11 July 2011 and filed on 12 July 2011; and
·Case Summary document and Minute of Order.
21.The husband also relied on a number of documents tendered during the Final Hearing (Exhibits “RH1” to “RH10”).
22.The husband also presented as a polite and focused witness and was generally willing to make concessions when asked questions of that type.
Law and discussion: the four steps
23.Section 79(1) of the Family Law Act 1975 (“the Act”) provides that the Court may make such orders as it sees fit to alter interests in matrimonial property. The Court’s discretion is not unlimited and must be exercised in accordance with the factors set out in the legislation and, more specifically, s.79(4) of the Act.
24.The preferred approach to the exercise of the discretion has been outlined in numerous decisions of the Full Court of the Family Court of Australia (“the Full Court”), such as in In the Marriage ofHickey (2003) 30 Fam LR 355; (2003) FLC 93-143.
25.The preferred approach involves four interrelated steps:[5]
·Step 1: identify and value the parties’ property, liabilities and financial resources as at the date of the hearing;
·Step 2: identify and assess the parties’ “contributions” within the meaning of ss.79(4)(a), (b) and (c) of the Act and determine the parties’ contribution-based entitlements expressed as a percentage of the net value of the parties’ property;
·Step 3: identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g) of the Act including, because of s.79(4)(e) of the Act, the matters referred to in s.79(2) of the Act so far as they are relevant, and determine the adjustment, if any, that should be made to the contribution-based entitlements of the parties determined at Step 2; and
·Step 4: consider the effects of the findings of steps 1-3 and resolve what order is just and equitable in all of the circumstances of the case.
[5] L Young & G Monahan, Family Law in Australia, 7th ed, LexisNexis Butterworths, Australia, 2009, pp.614-615.
Step 1: the asset pool
26.Based on submissions by both counsel and further questioning by the Court, the following table, drawn from the ‘Balance Sheet’ prepared by the husband, represents the agreed assets and liabilities of the parties including superannuation entitlements, unless otherwise stated:[6]
[6] In the table, ‘H’ refers to property registered in the husband’s name or otherwise legally owned by him or in his possession; ‘W’ refers to property registered in the wife’s name or otherwise legally owned by her or in her possession and ‘J’ denotes property registered in the joint names of the husband and the wife.
No. (Non-superannuation) Assets Valuation 1 Property H, [H] (J) $900,000.00 2 Property R (H) $1,200,000.00 3 Property B (H) $570,000.00 4 Property C (H) $1,200,000.00 5 NAB Property H bank account (H) $120,400.00 6 HSBC Hong Kong and London accounts (H) $155,354.00 7 [B] (H) – 9,835 [B] shares - Husband asserts value is $395,000.00 and Wife does not know value No agreement 8 Household Contents – Property C (H) $10,000.00 9 Household Contents – [H] (J) $30,000.00 10 Boat (50% ownership) (H) – Husband asserts value is $60,000.00 and Wife asserts value is $92,500.00 No agreement
11 Wife's NAB Bank account (W) $2,847.00 12 BMW (W) $24,500.00 13 Jewellery (W) $10,000.00 14 ‘Add back’ - interim property distribution (W) $120,000.00 15 ‘Add back’ - interim property distribution (W) $30,000.00 15A Wife’s legal costs paid (W) – husband admits quantum of $36,185.00 but does not admit it is an ‘asset’ No agreement
Sub-Total (Non-superannuation assets) To be determined No. Liabilities Valuation 16 Mortgage – Property C (H) $382,500.00 17 Mortgage – Property B (H) $382,500.00 18 Mortgage – Property R (H) $800,000.00 19 ‘Assumed’ tax due on sale of 9,835 [B] shares (LTIP 2008) (H) – Husband asserts amount is $99,293.89 and Wife does not know value No agreement
20 UK tax due on sale of 3,669 [B] shares in 2010 (H) – Husband asserts $6,463.28 and Wife does not know value No agreement
21 NAB Personal Loan (W) $8,773.00 22 NAB Visa (W) $49,508.00 23 [Z]’s Trust Fund (W) $9,000.00 Sub-Total (Liabilities) To be determined No. (Superannuation) Assets Valuation 24 [B] (H) $1,673,902.00 Sub-Total (Superannuation assets) $1,673,902.00 27.Given the above, the parties are only in disagreement in relation to the following alleged matrimonial assets and liabilities:
·the current value of the husband’s [B] stock options (being 9,835 shares) and the amount of tax to be paid upon their sale by the husband;
·the tax the husband asserts is due to be paid on the disposition of 3,669 [B] shares in 2010;
·the value of the husband’s boat; and
·whether the wife’s legal costs paid as at the date of the Final Hearing should be treated as an asset and/or liability.
28.These issues need to be resolved before the Court can determine the net available property pool.
Value of the husband’s [B] stock options and related tax liabilities
29.The husband asserts in the revised balance sheet that the value of his [B] stock options is currently $398,178.14. This amount is slightly more than the figure of $395,000.00 estimated in the husband’s Financial Statement.[7] The wife submits that she does not know the value of the [B] stock options.
[7] See Item 38.
30.It is disappointing that the parties were unable to agree upon a valuation of these share interests or at least agree upon an expert to value the relevant interest and estimate any tax liabilities arising upon disposal.
31.In support of his ‘estimate’, the husband tendered a document that he prepared with input from information he acquired from [B]; more specifically their “UK Register” website for his share account (see Exhibit “RH2”). The screen-shot from the relevant website appears to confirm that the husband acquired 9,835 [B] shares under his employer’s Long Term Incentive Program (“LTIP”). The document would also seem to confirm that as at 30 June 2011, the market price per share was “GBP 26.965” (£26.965). The husband asserts that this totals “£265,200.78” (ie. (£26.965 x 9,835) or, when converted to Australian dollars, he asserts an amount of “$395,213.00”.
32.Although the wife did not concede these amounts, she did not cross-examine the husband at any length about them either.
33.In the absence of evidence to the contrary, the Court will accept the husband’s evidence as contained in the husband’s Financial Statement in respect of the 9,835 [B] shares he holds under his employer’s LTIP scheme. That is to say, the 9,835 [B] shares will be taken to have a value of $395,000.00 for the purposes of these proceedings.
34.The husband also asks the Court to assume that the future sale of these [B] shares will attract tax levied in the United Kingdom and Hong Kong. The husband asserts the assumed tax liability, when converted to Australian dollars, will amount to $99,293.89.
35.In support of his assertion, the husband tendered a copy of a letter he received from Ernst and Young, London, dated 26 July 2011 (see Exhibit “RH7”) (“the Ernst and Young letter”). It is not readily apparent to the Court how the figures stated in the letter translate to a converted liability, in Australian dollars, of $99,293.89. That said, it is clear that tax will be levied on the future disposition of the shares.
36.The wife did not concede these amounts but, again, presented no evidence in rebuttal.
37.Given the Full Court’s decision in Rosati & Rosati (1998) 23 Fam LR 288; (1998) FLC 92-804; [1998] FamCA 38, the Court can either make an allowance in the property pool for the tax to be paid or, in the alternative, take the prospect of such tax being incurred by the husband into account as a relevant s.75(2) factor.
38.Given the present circumstances, the Court finds it appropriate to make an allowance in the property pool for the estimated tax to be paid by husband.
39.In the absence of contrary evidence, the Court will accept the husband’s evidence that the potential liability is, in Australian dollars, $99,293.89.
Tax payable by husband regarding disposition of [B] shares in 2010
40.The husband asserts that his tax liability arising from the sale of the 3,669 [B] shares in 2010 should be included as a matrimonial liability (noting that the liability is yet to be paid). The assertion in itself seems just and equitable. However, the problem that arises (again) is how to quantify such a liability.
41.The husband asserts the liability is, in Australian dollars, $6,463.28. In support of his assertion, the husband again relied on the information contained in the Ernst and Young letter.
42.This amount is not admitted by the wife.
43.For the reasons previously stated, the Court finds it appropriate to make an allowance in the property pool for the estimated tax to be paid by husband.
44.In the absence of contrary evidence, the Court will accept the husband’s evidence that the potential liability is, in Australian dollars, $6,463.28.
Value of the husband’s boat
45.The husband acknowledges that he is a one-half owner of a boat with a friend, one Mr O.
46.I state again that it is disappointing that the parties were unable to agree upon a valuation for this asset or organise a single valuation to be obtained. Such easily resolvable disputes only prolong the hearing of the evidence and the delivery of the Court’s decision.
47.
In any event, the husband asserts that the boat has a value of $60,000.00. Under cross-examination by Mr Mater, the husband described his estimate as a “a bailout price” if the boat was sold immediately.[8] The husband also confirmed that in late 2010 he had received an offer to sell his half share of the boat to Mr O, the
co-owner, for $60,000.00.[9]
[8] Transcript, 27 July 2011, page 96.
[9] Ibid, page 97.
48.
The wife asks the Court to accept that the boat commands a value of $92,500.00; this is the figure the husband asserted his interest in the boat was worth when he affirmed his initial Financial Statement on
2 August 2010 (see Exhibit “RH10”).
49.Under cross-examination, the husband stated that he and Mr O had recently expended $7,000.00 on maintenance for the boat,[10] and reconfirmed that he estimates that he would only receive the sum of $60,000.00 if the boat were sold now.[11] That said, the husband also acknowledged that he had not accepted the offer of $60,000.00 to sell his interest in the boat to Mr O.[12] This may indicate that the husband believes the boat is worth more than the $60,000.00 that was offered or that he did not wish to dispose of his interest in the boat at that stage.
[10] Ibid, page 96.
[11] Ibid, page 97.
[12] Ibid.
50.Given the circumstances, the Court is satisfied that the value of the boat would be in the range of $60,000.00 to $92,500.00. Given the lack of a agreed valuation, or evidence to the contrary, the Court will adopt a figure at the mid-point of the valuation range (ie. $76,250.00).
Wife’s legal fees
51.Up to the date of the Final Hearing, both parties had expended considerable sums on legal fees. It can be expected that their legal expenses will be considerably higher after a two-day Final Hearing.
52.The revised balance sheet discloses that the wife has been required to borrow the sum of $36,185.00 to fund her legal fees in the same amount.
53.I note that the wife was the beneficiary of an order made for an interim property settlement in the amount of $30,000.00, and had previously received the sum of $120,000.00 by way of an agreed interim property distribution. I further note that at paragraph 44 of the interim decision I stated:
“44. Although, there was no application before me, I consider it appropriate for there to be a further interim property distribution favouring the wife, in the sum of $30,000.00 to assist her in preparing for the final hearing. I am satisfied that the principles enunciated by the Full Court in In the Marriage of Zschokke (1996) 20 Fam LR 766, and more recently in the case of Strahan v Strahan (2009) 42 Fam LR 203, would have application in the present circumstances so as to ensure that the wife has sufficient funds to prosecute her case and is not left financially challenged in respect of her personal expenditure.”[13]
[13] Marsh & Marsh [2010] FMCAfam 1519 at [44].
54.As the payments for legal costs were clearly made post-separation, the Court sees no reason for such payments to be considered as a matrimonial asset (in the form of an add-back) or as a matrimonial liability. Any outstanding payments are, however, relevant to the parties’ respective future financial resources.
55.Consequently, this will not be included in the property pool as a matrimonial liability.
Net value of asset pool
56.Given the above determinations, the Court finds that the net available property pool is $3,106,313.00 (excluding superannuation entitlements) and $4,780,215.00 (including superannuation entitlements). This is calculated as follows:
No. (Non-superannuation) Assets Valuation 1 Property H, [H] (J) $900,000.00 2 Property R (H) $1,200,000.00 3 Property B (H) $570,000.00 4 Property C (H) $1,200,000.00 5 NAB Property H account (H) $120,400.00 6 HSBC Hong Kong and London accounts (H) $155,354.00 7 [B] (H) – 9,835 [B] shares $395,000.00 8 Household Contents – Property C (H) $10,000.00 9 Household Contents -Property H (J) $30,000.00 10 Boat (50% ownership) (H) $76,250.00 11 Wife's NAB Bank account (W) $2,847.00 12 BMW (W) $24,500.00 13 Jewellery (W) $10,000.00 14 ‘Add back’ - interim property distribution (W) $120,000.00 15 ‘Add back’ - interim property distribution (W) $30,000.00 Sub-Total (Non-superannuation assets) $4,844,351.00 No. Liabilities Valuation 16 Mortgage – Property C (H) $382,500.00 17 Mortgage – Property B (H) $382,500.00 18 Mortgage – Property R (H) $800,000.00 19 ‘Assumed’ tax due on sale of 9,835 [B] shares (LTIP 2008) (H) $99,293.89 20 Tax due on sale of 3,669 [B] shares in 2010 (H) $6,463.28
21 NAB Personal Loan (W) $8,773.00 22 NAB Visa (W) $49,508.00 23 [Z]’s Trust Fund (W) $9,000.00 Sub-Total (Liabilities) $1,738,038.17 No. (Superannuation) Assets Valuation 24 [B] (H) $1,673,902.00 Sub-Total (Superannuation assets) $1,673,902.00
| Summary | |
| Non-superannuation assets | $4,844,351.00 |
| (less) Liabilities [14] | $1,738,038.00 |
| Net assets (excluding superannuation) | $3,106,313.00 |
| (add) Superannuation asset | $1,673,902.00 |
| Net assets (including superannuation) | $4,780,215.00 |
[14] For simplicity, this figure has been rounded down to the nearest dollar.
Step 2: contributions
57. From the evidence, it is clear that the parties have, throughout the entirety of their relationship, specialised their respective roles into that of significant ‘breadwinner’ and significant ‘homemaker and parent’. This is quite a normal and sensible division of labour in our society that usually advances both the financial prosperity and the overall welfare of a couple and their children.
58.
While there is no presumption that for contribution assessment purposes such specialised roles equalise,[15] an outcome favouring equality is not unusual in cases involving long relationships following an analysis of the evidence relevant to s.79(4)(a)-(c) of the Act.[16]
[15] In the Marriage ofMallet (1984) 156 CLR 605; In the Marriage of Ferraro (1992) 16 Fam LR 1; (1993) FLC 92-335; In the Marriage of McLay (1996) 20 Fam LR 239; (1996) FLC 92-667.
[16] In the Marriage of McLay (1996) 20 Fam LR 239, at 248-250 (per Nicholson CJ, Fogarty and Dessau JJ).
Of course, such an outcome may alter following consideration of the other s.79 factors, in particular s.79(4)(e) of the Act.[17]
[17] Ibid, at 250.
59. That said, what the legislation requires is that the Court consider the parties’ contributions made on and from the commencement of their relationship,[18] during their relationship, and following separation.[19]
[18] In the Marriage of Olliver (1978) 4 Fam LR 360; (1978) FLC 90-499.
[19] In the Marriage of Ferraro (1992)16 Fam LR 1; (1993) FLC 92-335.
60. In this case it is noteworthy that the parties agree that they separated over 10 years ago and it is clear from the evidence that the asset pool increased significantly in the post-separation period.
Financial and non-financial contributions
61. It is clear that both parties have made financial and non-financial contributions to the acquisition, conservation and improvement of their matrimonial property. This is particularly so given their mutual investment of their earnings into their property pool and their labours associated with the conservation of the [H] property.
62. It is also clear from the evidence that the husband, through the parties’ decision to specialise their respective roles, has been able to contribute significantly more income and energy into making relevant financial contributions than the wife. This appears so, not just during the period of the parties’ cohabitation, but in the decade since their separation.
63. In his closing address, Mr Richards argued for the husband that while the overall contributions made by the parties at the time of separation “would be seen as being equal”,[20] the asset pool at that time comprised an amount equivalent to around 20% of the current net asset pool.[21]
[20] Transcript, 27 July 2011, page 139.
[21] Ibid.
64. The husband’s overall argument is that he has made virtually all the contributions to the increased property pool since 2001. The evidence would support this submission in terms of the strength of the husband’s financial contributions.
65. In support of his argument, the husband submitted through his counsel that “the mathematics in this case is a useful guide to assessing contribution”.[22] The husband asserts that his post-separation contribution to the property pool “would be in the order of about $1.285 million following separation”.[23]
[22] Ibid, page 141.
[23] Ibid.
66. The husband also asks the Court to accept that, post-separation, he has expended monies totalling $2.6 million “for the benefit of the wife and children”.[24] The wife does not deny that the husband has provided financially for her and the children from the time of separation until more recent times when he reduced and ultimately withdrew such on-going financial assistance following the youngest child’s transition from high school to university. Indeed, it was this decision by the husband that seems to have acted as a catalyst to the wife commencing these proceedings after nearly 10 years of separation and some 18 months after their divorce.
[24] Ibid, page 140.
67. The wife, understandably, asks the Court to consider her own contributions to the conservation and improvement of the [H] property, but also her own competing family contributions that act to erode the significance of the husband’s on-going financial and non-financial contributions. The wife also asks the Court to accept that she indirectly contributed to the acquisition of the investment properties.
Family contributions as homemaker and parent
68. As has been previously noted, in addition to the wife’s contributions made pursuant to s.79(4)(a) and (b) of the Act, the Court is satisfied that the wife was the primary homemaker for the parties and the primary carer for the parties’ now adult children. This is not disputed in any way by the husband who, through Mr Richards, described the wife’s role as homemaker and parent in the post-separation period as “absolutely marvellous”.[25]
[25] Ibid.
69. Consequently, the Court finds that the wife has made a significant contribution to the family pursuant to s.79(4)(c) of the Act.
Global or asset-by-asset assessment of contributions
70. The approach to be taken to the assessment of contributions is an interesting question in this case given the factual mix. Although the parties’ relationship spans some 30 years, the parties have been separated for the last 10 years. Moreover, there is no real disagreement between the parties that the net asset pool has increased significantly over the last 10 years.
71. In his closing submissions Mr Richards argued that despite the length of the parties’ relationship, there may be merit in adopting an asset-by-asset approach. In support of this, the husband referred the Court to the Full Court decisions of Z & Z [2005] FamCA 996; (2005) FLC 93-241 (“Z & Z”) and Polonius & York [2010] FamCAFC 228 (“Polonius”).
72.
In Z & Z, the Full Court considered a marriage of some 27 years where the parties had entered into unfiled “terms of settlement” five years prior to their divorce. At first instance, Justice Buckley had ultimately determined that while the contributions of the parties were equal during the marriage, a further adjustment of 30% should be made in the husband’s favour as a result of his post-separation contributions.[26]
[26] His Honour also made a 10% allowance in the wife’s favour for s.75(2) factors with the consequence that the net property of $3,175,179.00 was divided as to 70% to the husband an 30% to the wife. An appeal by the husband was subsequently dismissed.
On appeal, by way of obiter, Finn J stated that while the trial judge validly adopted a ‘global approach’ to the assessment of contributions, it may be useful in similar cases to use an asset-by-asset approach. More specifically, her Honour observed the following at paragraphs 42 and 43:[27]
[27] See also (2005) FLC 93-241 at 79,978.
“42. It is my impression that there are currently coming before the Court a significant number of cases in which the period between the parties’ separation and the hearing of their property settlement proceedings is substantial. The delay seems often to arise, at least in part, because the parties have initially reached some form of informal (or even formal) settlement from which one party later resiles (often for good reason). In these long separation periods, the parties will usually have built up substantial new assets or incurred substantial liabilities. In an endeavour to satisfy the parties that any orders which are eventually made by the Court in these somewhat complicated cases are just and equitable, it can, in my view, be very useful for Judges to assess contributions to property on an asset by asset basis.
43. In so saying I do not intend any criticism of the trial Judge in this case. Indeed, a relatively clear picture of the history of the parties’ assets is presented in his reasons for judgment. I have made the comment which I have, only because of the opportunity to do so which this case provides, involving as it does, a long separation period, an earlier informal agreement, and the development of significant assets by one party post-separation.”
73. It is also noteworthy that in Z & Z, Coleman and Boland JJ, in their joint judgment, stated at paragraphs 164 and 165:
“164. The parties’ marriage was of long term duration. The trial Judge carefully recorded the contributions of each of the parties from the commencement of their cohabitation when the parties had little by way of assets of significance. There was no challenge to the trial Judge’s finding that ‘the Husband was able to gain skills, training and opportunity which enabled him to develop his business and to acquire and earn income’. It was conceded by the husband that the wife was the primary caretaker of the two children of the marriage. Further, the husband accepted that he worked for long hours during the marriage including his work for the company.
Conclusions
165. The assessment and comparison of contributions, both financial and non financial and the translation of that weighing and comparison is not and cannot generally be a strictly mathematical task, particularly in a marriage of long duration (see Norbis v Norbis (1986) 161 CLR 513 at 521-523 and G and G (1984) FLC 91-582 at 79,697).”
74. In Polonius, the Full Court (Boland, Thackray and O’Ryan JJ) agreed with the observations made by Finn J in Z & Z and stated at paragraph 93:
“93. … In a case such as this, where there was a marriage of long duration and a lengthy period of separation before the hearing of applications for property settlement, during which time significant assets were accumulated by one or both parties, it should indicate that in such circumstances it may be more useful to undertake an assessment of contributions on an asset by asset, or, category of asset by category of asset basis: see Norbis v Norbis[1986] HCA 17; (1986) 161 CLR 513. However, in this case, that was not the approach the Federal Magistrate adopted when assessing the contributions made subsequent to mid-1997.”[28]
[28] Polonius & York [2010] FamCAFC 228 at [93].
75. That all said, I note in this case that Mr Richards also conceded that:
“whilst we have submitted that your Honour might utilise an asset-by-asset approach, we don’t think that there would be any different result if your Honour chose not to”.[29]
[29] Transcript, 27 July 2011, page 141.
I note that the wife, through Mr Mater, proceeded on the basis of a global assessment of contributions.
76. Given the length of the parties’ relationship and its history, the ‘global’ approach to the assessment of contributions is the most appropriate and convenient to the parties’ circumstances. That said, given the husband’s overall argument that contributions would favour him significantly, I would agree with his concession that an asset-by-asset approach would have, generally speaking, produced a similar outcome.
77. The husband ultimately asked the Court to assess contributions at 90% in his favour and 10% in the wife’s favour.[30] The wife contended that the evidence supported a “pretty much equal” assessment of contributions.[31]
[30] Ibid, page 142.
[31] Ibid, page 145.
78. I would agree that the evidence would support an outcome of equal contributions being made as at the date of separation. That said, given the significance of the financial contributions made by the husband post-separation, I am not satisfied that the evidence supports an overall assessment of equal contributions being made. A further adjustment should be made in the husband’s favour and I am satisfied that the evidence supports a further adjustment in percentage terms of 20%.
79. Consequently, I am satisfied that the evidence supports a contributions assessment outcome favouring the husband of 70% and 30% in favour of the wife.
80. I am further satisfied that such determination should apply to both the net property pool (excluding superannuation) as well as to the superannuation assets. There is evidence before the Court that the husband’s superannuation has increased from $388,426.00 to $1,673.902.00 since separation.
Step 3: section 75(2) and related factors
81. I now turn to the third step in the process of apportioning the assets available for distribution between the parties and refer to each of the relevant factors under s.79(4)(d) to (g) of the Act to which regard must be given.
Section 79(4)(d): effect of any proposed order upon the earning capacity of either party to the marriage
82. The orders that I propose making in this matter will not affect the earning capacity of the husband and should improve the earning capacity of the wife.
Section 79(4)(e): matters referred to in sub-section 75(2) so far as they are relevant
(a) The age and state of health of each of the parties
83. The parties are both currently aged 53 years.
84.
There is no evidence that the husband suffers from ill health.
In contrast, there is evidence that the wife suffers from health issues including [omitted]. There is also evidence that, at the time of the Final Hearing, the wife was still undergoing assessment and possible treatment for [omitted]. It is likely that, pending the wife losing weight and undergoing further assessment, she may have to undergo a [omitted].
(b) The income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
85. While the husband has remained in full-time work throughout the duration of the marriage, the wife has not been in paid employment since 1983, that is, when she was aged just 26 years.
86. The husband is hopeful that his employer, [B], might facilitate his return to Australia in approximately two years whereupon he would take on a senior role in the business.[32] Should that eventuate, the husband stated that his income will be unchanged but that he would no longer be entitled to any financial benefits for living overseas.[33] In that event, the husband proposes to reside with his partner at the Property C property.[34]
[32] Transcript, 27 July 2011, page 125.
[33] Ibid.
[34] Ibid, page 126.
87. In her evidence the wife stated that although she had completed several courses of education since separation, such courses were “for personal development [and] they were never intended to lead to employment”.[35]
[35] Transcript, 26 July 2011, page 23.
88. In response, the husband asserted that the wife was capable of generating income by devoting her energies to establishing and running a small business. That said, the husband acknowledged that unless she had sufficient money available to invest then the only way the wife could obtain the necessary funds to establish a small business would be via borrowed funds.[36] The husband also stated that, using his experience in the [omitted] industry as an example, an amount of $200,000.00 would be needed to establish a small business (such as acquiring a franchise) and a further amount of $200,000.00 would be needed for stock purchases “but if you’re into other items it varies”.[37] He also acknowledged that should the wife be successful with her claim she would have sufficient funds to be able to establish a small business.[38]
[36] Transcript, 27 July 2011, page 132.
[37] Ibid, page 133.
[38] Ibid.
(d) Commitments of each of the parties that are necessary to enable the parties to support:
(i) himself or herself;
(ii) a child or another person that the party has a duty to maintain
89. The wife has not re-partnered and none of the children, apart from the youngest child, [Z], live with her (although [Z] is currently studying overseas). All three children are now adults and are fully engaged in work or tertiary study. The children have been financially supported by the husband and there is no reason to suspect that they will not be the beneficiaries of his future support should such be needed.
90. The husband has a fully dependent spouse and two teenage step-children.
(e) The responsibilities of either party to support any other person
91. See the comments made in paragraphs 89 and 90 above.
(f) The eligibility of either party for a pension, allowance or benefits…
92. The wife is in receipt of a Centrelink Newstart Allowance as detailed in her Financial Statement affirmed on 4 July 2011.
(g) Where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable
93. This is a live issue in this case.
94. I am satisfied that the orders to be made in this matter will provide a reasonable standard of living for the parties having regard to their assets and liabilities and the circumstances existing at the present time.
(m) If either party is cohabiting with another person – the financial circumstances relating to the cohabitation
95. The wife is not cohabiting with another person and the husband’s circumstances have been previously discussed.
(o) Any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
96. There are no other factors which the justice of the case requires to be taken into account that have not been discussed previously in this decision.
97. For the sake of completeness, I note that considerations under s.75(2)(h), (j) and (k) of the Act are not applicable here as neither party seeks final orders in respect of spousal maintenance. I also note that s.75(2)(c), (ha), (l), (n), (naa), (na), (p) and (q) as well as s.79(4)(f) and (g) of the Act are not applicable in the circumstances of this case.
Submissions and discussion
98. The wife seeks a significant adjustment in her favour for s.75(2) and related factors. Mr Mater, for the wife, argued that, given the unusual factual setting, there should be further adjustment “of probably about 25 per cent”.[39]
[39] Transcript, 27 July 2011, page 146.
99. While the husband acknowledged that the wife was entitled to a further adjustment for s.75(2) and related factors, Mr Richards submitted “that an adjustment of 10 per cent in her favour would approximately provide for that expenditure to be met for the next decade”.[40]
[40] Ibid, page 142.
100. In light of the above-mentioned circumstances, the Court agrees with the wife that the circumstances warrant a further adjustment of matrimonial property in the wife’s favour. That said, the Court is also persuaded by the submissions made by the husband that an adjustment of 10% is appropriate. While the wife has some health issues, she is under the assessment and treatment by generalist and specialist medical practitioners. The wife is also in transition from significant homemaker and parenting roles to the next phase of her life which is largely free of the responsibilities of traditional parenting.
101. This additional adjustment of 10% in the wife’s favour would apply in respect of the net property pool (excluding superannuation).
102. In relation to the husband’s superannuation, there is an issue as to whether it should be divided in the same way as the non-separation assets. In C & C [2005] FamCA 429; (2005) 33 Fam LR 414; (2005) FLC 93-220 the Full Court[41] stated the following at paragraph 65:
[41] Bryant CJ, Finn and Coleman JJ (Warnick J and O’Ryan J agreeing in the result, but disagreeing in part as to the reasoning).
“65.… the trial judge has a 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:
(a) 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);
(b) consider and make findings about the types of contributions referred to in s 79(4)(a), (b) and (c) which have been made by the parties to the superannuation interests on either a global approach or an asset by asset approach depending on the circumstances;
(c) consider the other factors in s 79(4) being the matters in s 79(4)(d), (e), (f) and (g); and
(d) 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.”
103. In this case, while I am satisfied that based upon contributions assessment alone the husband’s superannuation should be divided 30% in the wife’s favour and 70% in the husband’s favour, I am not satisfied that there should be any further adjustment for s.75(2) and related factors.
104. I am satisfied that with a base amount of $502,170.60 (reflecting 30% of the current value of the husband’s superannuation), and a substantial property division, the wife will be able to adequately provide for herself financially in the years ahead.
105. I note that Mr Mater for the wife acknowledged the likelihood of such an outcome in his closing submissions, noting of course that he advocated an equal division based upon a contributions assessment:
“On the question of the superannuation, yes, if one looks at any two pools’ or several pools’ consideration – it might be appropriate to look at the superannuation as separate from the other harder assets, if I could put it that way, with superannuation – could be treated in the [C & C] fashion. We don’t need to look at Polonius v York for justification for such an approach. I mean, we can go to Mallet, many years ago in the High Court, for that. But if the superannuation is to be looked at as a separate pool, again, the same consideration is at play, in my respectful submission, concerning the question of adjustment. We’re not looking at the date of separation. We’re not – the law is plain that we look at the value of that particular financial resource/asset – call it what you will – and again, the same considerations apply so far as the contributions go.
Again, the wife, through the husband’s choice, remained out of employment, and perhaps generating some superannuation on her own part, because of his wish that she be at home to look after the children until 2010 when he cut the tap off. So in my submission there’s not much difference in how the superannuation ought to be considered, although perhaps it might be arguable that you wouldn’t get beyond the equal contribution that I assert should be accorded to both those pools, if there are to be two pools. On the section 75(2) factors, I think there probably – if there’s a 25 per cent adjustment on the hard assets, ie excluding the superannuation, there probably is no need to go to the superannuation and adjust that again.”[42]
[42] Transcript, 27 July 2011, pages 146-147.
Step 4: justice and equity
106. Section 79(2) of the Act provides that:
“The Court shall not make an Order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.”
107. There is no dispute between the parties that the wife should retain the [H] property. There is also no dispute that the wife should retain assets including the current contents of the [H] property and the BMW motor vehicle.
108. While the wife is seeking an order for the husband to transfer all his interest in the Property B property, she is not seeking any specific orders in relation to the other real property interests (including the Property C property, which is the husband’s residence with his partner).
109. In relation to superannuation, as stated there should be a superannuation splitting order that provides for the wife to receive the base amount of $502,170.60, being 30% of the current value of the husband’s superannuation. This amount, when compounded with interest, should provide the wife with a healthy retirement income.
110. I am satisfied that any final property settlement should and will enable the wife to pay off her current debts and utilise excess funds to invest and produce income, whether through the receipt of interest on invested sums, or investment in a business venture, or both. The wife should also be free to sell the [H] property at an appropriate time of her choosing and relocate to a suitable property that will meet her post-child rearing needs.
111. I am also satisfied that the husband has provided well for the wife during their marriage post-separation and also post-divorce. The husband is now entitled to seek an end to his financial obligations and the final orders to be made in this case should be capable of producing such an outcome.
Conclusion
112. As stated, the Court is satisfied that the net available property pool, being $3,106,313.00 (excluding superannuation entitlements), should be divided 40% in favour of the wife and 60% in favour of the husband. The wife’s percentage share incorporates an adjustment in her favour of 10% to reflect s.75(2) and related factors.
113. Based on the agreed valuations and determinations made by this Court, and excluding superannuation entitlements, this represents an amount of $1,242,525.20 in favour of the wife and $1,863,787.80 in favour of the husband.
114. There will be orders for the husband to transfer all his right title and interest in the [H] property to the wife within 28 days from the date of these Orders.
115. In relation to the payment of the balance of the wife’s share, the husband will, within 42 days, pay to the wife the sum of $125,178.20 (“the settlement sum”). This sum is made up as follows:
Wife’s 40% share of net matrimonial assets (excluding superannuation)
$1,242,525.20
Less
Property H, [H] (J) $900,000.00 Household Contents -Property H (J) $30,000.00 Wife's NAB Bank account (W) $2,847.00 BMW (W) $24,500.00 Jewellery (W) $10,000.00 ‘Add back’ - interim property distribution (W) $120,000.00 ‘Add back’ - interim property distribution (W) $30,000.00 Balance
$125,178.20
116. Subject to the accounting above, the husband would retain all the other net matrimonial property including responsibility for the payment of the mortgages on the Property B, Property R and Property C properties as well as payment of the tax due on the [B] shares.
117. In the event that the husband fails to comply with the relevant order paying the wife the settlement sum then:
·interest shall thereafter accrue on the settlement sum until full payment is made; and
·in the event that the husband has failed to pay the settlement sum within 90 days of the date of today’s orders, then the husband will cause the Property R property to be sold and the wife shall be paid from the net proceeds of sale the settlement sum together with any interest that has accrued. In the event of any shortfall, then the husband will cause the Property B property to be sold and the wife shall be paid from the net proceeds of sale such sum due to her that remains outstanding, together with any interest that has accrued on the said amount.
118. Contemporaneously with the payment of the settlement sum and the transfer of the husband’s interest in the [H] property to the wife as outlined above, the wife shall sign and deliver to the husband all necessary documents to transfer the balance of any other jointly owned property to the husband and he will then assume all liability and otherwise indemnify the wife for the mortgages and the like.
119. The Court is also satisfied that there should be a superannuation splitting order that provides for the wife to receive the base amount of $502,170.60 being 30% of the current value of the husband’s superannuation.
120. Despite the comment made at paragraph “I” of the wife’s case outline document[43], no letter in the terms described was forthcoming during the proceedings. In fact it was noted that the relevant superannuation fund had not been given procedural fairness. Consequently, as there is no evidence before the Court that the trustee of the relevant fund has been given procedural fairness, the superannuation splitting order will be stayed until the Court is satisfied that procedural fairness has been afforded and will, inter alia, require the husband to serve a copy of the Orders on the trustee of the relevant fund within seven days of date of this judgment. Additional procedural Orders will also be made in this respect.
[43] The comment reads “The trustee of the Husband’s superannuation fund was notified of the wife’s application of a 50% splitting order by letter dated 12 July, 2011.”
121. Subject to the Orders referred to above, there will also be Orders that each party retain all other property currently in their respective possessions, free of any claim from the other. This will include motor vehicles, monies standing to their individual credit in any bank or financial institution and any furnishings, household or personal effects, including jewellery.
122. Each party will be required to indemnify the other with respect to any debts and liabilities standing in that party’s sole name.
123. There will also be an Order pursuant to s.106A of the Act as sought by both parties.
124. For all these reasons the Orders of the Court will be as set out at the commencement of these reasons for judgment.
125. Given the factors to which I have referred, I am satisfied that the Orders are just and equitable.
I certify that the preceding one hundred and twenty-five (125) paragraphs are a true copy of the reasons for judgment of Monahan FM
Date: 19 January 2012
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