Mayne and Mayne (No 2)
[2012] FamCAFC 90
•19 June 2012
FAMILY COURT OF AUSTRALIA
| MAYNE & MAYNE (NO 2) | [2012] FamCAFC 90 |
| FAMILY LAW – APPEAL – PROPERTY – Re-exercise of trial judge’s discretion –Where the main non-superannuation assets of the parties were constituted by two properties which entered the property pool through an inheritance of the wife – Where the contributions of the parties were uncontentious save for the wife’s financial contribution by way of a series of inheritances – Where the wife could not account for expenditure of part of one of the inheritances and the sum of this expenditure represented a significant percentage of the property pool – Faulks DCJ & May J agreed contentious amount not to be treated as add-back but considered as s 75(2) factor, or at contributions stage – Strickland J in dissent, contentious amount able to be considered as add-back – Where the contributions to non-superannuation assets were considered to be 70 per cent to the wife and 30 per cent to the husband – Where the contributions to the superannuation assets were considered to be 65 per cent to the husband and 35 per cent by way of direct and indirect contributions to the wife – Where the value of the parties non-superannuation assets has decreased since the trial – Where the husband’s superannuation has grown significantly since the trial however no account of the nature of the growth was provided – Where no evidence as to the prospect of selling a portion of one of the properties was provided – Where the just and equitable requirement in this case requires that both parties receive a portion of non-superannuation and superannuation assets. |
| Family Law Act 1975 (Cth) Family Law (Superannuation) Regulations 2001 |
| Allesch v Maunz (2000) 203 CLR 172 Hickey & Hickey & Attorney-General (Intervenor) (2003) FLC 93-143 Stanford & Stanford [2012] FamCAFC 1 Warner & Warner [2008] FamCAFC 156 |
| APPELLANT: | Ms Mayne |
| RESPONDENT: | Mr Mayne |
| FILE NUMBER: | CAC | 114 | of | 2007 |
| APPEAL NUMBER: | EA | 78 | of | 2009 |
| DATE DELIVERED: | 19 June 2012 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Canberra |
| JUDGMENT OF: | Faulks DCJ, May & Strickland JJ |
| HEARING DATE: | By way of written submissions |
| LOWER COURT JURISDICTION: | Federal Magistrates Court |
| LOWER COURT JUDGMENT DATE: | 5 June 2009 |
| LOWER COURT MNC: | [2009] FMCAfam 559 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Watkins |
| SOLICITOR FOR THE APPELLANT: | Strong Law Pty Ltd |
| COUNSEL FOR THE RESPONDENT: | Mr Howard |
| SOLICITOR FOR THE RESPONDENT: | Farrar Gesini & Dunn |
Orders
In accordance with Section 90MT(4) of the Family Law Act 1975 (Cth), a base amount of $104,880 is allocated to the wife from the husband’s interest in the N Superannuation Scheme.
In accordance with Section 90MT(1)(a) of the Family Law Act 1975 (Cth):
(i)the wife (or such other person to whom a splittable payment is payable) is entitled to be paid, using the base amount allocating in order (1), the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth); and
(ii)the entitlement of the husband in the N Superannuation Scheme (or the entitlement of such other person who becomes entitled to receive a payment out of the husband’s superannuation interest) is correspondingly reduced by force of this order.
The trustee of the N Superannuation Scheme (“the trustee”) shall do all such acts and things and sign all such documents as may be necessary to:
(i)calculate, in accordance with the requirements of the Family Law Act 1975 (Cth) the entitlement awarded to the wife in the immediately preceding clause of this order; and
(ii)pay the entitlement whenever the trustee makes a splittable payment from the husband’s interest in the N Superannuation Scheme.
Orders 1 to 3 (inclusive) have effect from the Scheme operative time and Scheme the operative time is four days after service of these orders on the trustee.
Within the time prescribed under the governing rules of the N Superannuation Scheme, the wife shall request the trustee of the Scheme to observe its obligations in relation to the wife’s entitlement in accordance with the requirements of the Superannuation Act 1916 (NSW).
In accordance with the Family Law (Superannuation) Regulations 2001, any payments from the husband’s superannuation interest made after the trustee has acted under its governing rules in relation to the wife’s entitlements are not splittable payments.
The above orders bind the Trustee.
The wife pay to the husband the sum of $227,117 (“the payment”) within 90 days of the date of these orders (“the due date”).
If the whole of the payment has not been made by the due date:
(i)the wife shall, in addition to the payment, pay to the husband interest on the payment or the amount outstanding from time to time at the rate prescribed by the Family Law Rules to be calculated from the due date to the date of payment; and
(ii)the wife shall do all things necessary to sell either property known as Property A in C, or Property S in C, at her election.
The wife do all things necessary to cause the proceeds of the sale of the property to be distributed as follows:
(i)to pay all costs, commissions and expenses of the sale;
(ii)to pay the usual rate adjustments;
(iii)to pay the amount required to discharge any encumbrances secured over the properties;
(iv)to pay so much of the payment as is then outstanding together with interest in accordance with order 8 and 9(i) to the husband;
(iii)to pay the balance to the wife.
Liberty be reserved to either party to apply to the Federal Magistrates Court on seven days notice to the other with respect to the terms and conditions of the sale.
If either party refuses, fails or neglects to execute any document necessary to put these orders into effect 14 days after being requested to do so, and any such refusal, failure or neglect is proved by affidavits filed and served on behalf of the party alleging this, the Registrar of the Family Court of Australia at Canberra be and is hereby appointed pursuant to section 106A of the Family Law Act 1975 (Cth) to execute such document in the name of such party.
The furniture and chattels in the home situated on the
S property and the farm machinery, tools and stock situated on that property and the A property be retained by the wife.
Unless otherwise specified in these orders, each party be solely entitled to the exclusion of the other to all other property including motor vehicles, bank accounts and shares in the possession of such party at the date of these orders.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Mayne & Mayne (No 2) has been approved by the Chief Justice pursuant to
s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT CANBERRA |
Appeal Number: EA 78 of 2009
File Number: CAC 114 of 2007
| Ms Mayne |
Appellant
And
| Mr Mayne |
Respondent
REASONS FOR JUDGMENT
SUPPLEMENTARY
Faulks DCJ
I have had the advantage of reading the Reasons for Judgment of her Honour Justice May. Her Honour’s judgment helpfully outlines the submissions of each of the parties and I do not wish to add anything further in that respect.
Determination of the property pool
I agree with her Honour’s reasons and findings in relation to the determination of the property pool.
Contributions
I agree with her Honour’s finding that the contribution of the parties to the total superannuation pool to be 35 per cent to the wife and 65 per cent to the husband and the reasons for that finding.
In the Judgment delivered by the Full Court on 23 September 2011, I indicated the reasons therein set out a difference in approach with her Honour and with his Honour Justice Strickland about how the contentious sum should taken into account in the proceedings. This contentious sum of $173,841 is dealt with by her Honour in her reasons relating to the re-exercise of discretion, referred to in paragraphs 85 and following.
In assessing each party’s contributions, her Honour determined that the
non-superannuation contribution should be attributed as 80 per cent to the wife and 20 per cent to the husband for the reasons she therein sets out. Her Honour then adjusts that calculation by 10 per cent (20 per cent differential) to take account of the contentious sum.
For the reasons set out in the Judgment delivered on 23 September 2011, I would not agree that the contentious sum should be taken into account when assessing each party’s contributions. But I do agree, respectfully, with her Honour’s reasons at paragraphs 88 to 94 and her Honour’s assessment that the contributions should be attributed as to 80 per cent to the wife and 20 per cent to the husband, not taking into account the contentious sum.
Section 75(2) factors
In respect of s 75(2) adjustments, her Honour determines that there should be no adjustment. I would, with respect, disagree with her Honour on that point. Consistently with the views I expressed in the Judgment of 23 September 2011, in my opinion there should be an adjustment pursuant to s 75(2)(o) in respect of the contentious sum. In addition, I take account of the submissions made by each of the parties relating to other s 75(2) matters.
In written submissions filed on 30 January 2012, counsel for the husband identified that the health of the parties is not a relevant consideration. The husband conceded he is in full-time employment with a modest income which is higher than the wife’s income. He submitted that the wife would receive, on the basis of the parties’ respective contributions, significantly more
non-superannuation assets than the husband and that this “comparison of relative resources of the parties” requires that an adjustment be made in favour of the husband.
Somewhat repetitiously, the husband also claimed the wife has “the financial resource of the property (or properties) that she will own in that the properties could be used for agistment or otherwise leased to local graziers”. With respect, it seems to be but merely a repetition of the previous submission and accordingly from those factors, though without any particular logic attaching to it, it was submitted at paragraph 34 of the written submissions filed on 30 January 2012, that an adjustment of 5 – 10 per cent to the husband would be appropriate in these circumstances.
The wife’s written submissions in relation to s 75(2) are set out in her Honour’s reasons above.
Contrary to the submissions advanced on behalf of the husband, in my opinion a comparison of the parties’ financial circumstances, even with the division of property in line with the contributions of the parties and the division of superannuation, would not cause me to make any adjustment in favour of the husband. However, the husband’s income and earning capacity are factors which, in my view, warrant a minor adjustment in favour of the wife. The husband’s capacity to continue to earn more than the wife is, in my opinion, an important factor given each party’s age and the fact that, even if the wife has some agistment income from the properties, such income is likely to be comparatively more modest than the husband’s. This is conceded by the husband at paragraph 31 of his written submissions filed on 30 January 2012.
In my opinion, the disparity in the parties’ earning capacity warrants an adjustment in favour of the wife of two per cent. The wife’s inability to account for the expenditure of the contentious sum warrants an adjustment of 11 per cent in favour of the husband. The net outcome is an adjustment of nine per cent in favour of the husband, resulting in a division of non-superannuation assets as to 71 per cent to the wife and 29 per cent to the husband.
If an adjustment of nine per cent is made, this would bring about a division of non-superannuation assets to the husband that is slightly smaller than that proposed by her Honour Justice May. The difference between the nine per cent adjustment that I would make and the 10 per cent adjustment at the contributions assessment stage suggested by Justice May is not such as would cause me to conclude that I should differ from her Honour’s conclusion. Accordingly, although arriving at it from a different perspective, it seems to me that the orders proposed by her Honour in this regard are appropriate and I concur that they should be so made.
Just and equitable result
For the sake of completeness I agree with and adopt the reasons advanced by her Honour in relation to the so called fourth step of the process, “the just and equitable assessment” and have nothing further to add in relation to that matter.
May J
Introduction
On 23 September 2011 the Full Court delivered reasons allowing the wife’s appeal against property settlement orders made on 5 June 2009 by
Federal Magistrate Neville (appeal number EA 78 of 2009). The costs appeal and cross-appeal were both dismissed (appeal number EA 119 of 2009). The
Full Courtalso made orders allowing the parties to file submissions and further evidence, with a view to this Court determining the property proceedings by
re-exercising the discretion of the Federal Magistrate. These are the reasons in the re-exercise of the discretion, and should be read together with the earlier judgment in the substantive appeal.
The main issues of contention in the appeal related to the Federal Magistrate’s treatment of the parties’ superannuation assets, and the inclusion of an
add-back sum into the property pool. It should be explained at the outset that the add-back sum refers to an amount of $173,841 originating from one of the inheritances received by the wife in the course of the relationship. The amount represents expenditure of part of the inheritance for which the wife could not account. The amount is described as the “contentious sum” because its inclusion in the property pool as an add-back is not agreed by the parties.
Deputy Chief Justice Faulks, Justice Strickland and myself agreed that the appeal should be allowed because of the Federal Magistrate’s treatment of the parties’ superannuation. Namely the exclusion of the parties’ superannuation from the total pool of property at the “fourth stage”, the just and equitable order consideration.
In relation to the add-back, Deputy Chief Justice Faulks considered its inclusion in the property pool to be inappropriate and erroneous. In his view the proper approach was to consider this as a s 75(2)(o) factor. Justice Strickland considered its inclusion to be open to the Federal Magistrate, but that the Federal Magistrate fell into error by taking the same amount into account a second time at the s 75(2) factors consideration stage, in effect double-dipping to the wife’s detriment.
I considered the better course would have been to take the amount into account when considering the parties’ contributions to the property during the marriage. I agreed with Strickland J in the sense that even if including the add-back in the property pool itself was not an error, the Federal Magistrate erred by considering the amount again at a later stage.
At the appeal hearing counsel for both parties asked that if the appeal was allowed, we re-exercise the discretion rather than incur the expense of a new trial. For reasons set out in the judgment in the substantive appeal, we considered the circumstances of this case demanded that if possible, this Court should re-exercise the discretion in relation to the division of property.
As I noted in my previous reasons, the viability of this Court carrying out a
re-exercise would become apparent when further submissions and affidavits were received by the parties. Such a re-exercise would not be possible if the evidence became controversial. In view of our different opinions it is appropriate for us to provide separate reasons in relation to the re-exercise.
The orders made 23 September 2011 provided that each party was granted leave to apply to adduce further evidence, make further submissions in writing about the division of the property of the parties, and respond to the submissions of the other.
On 28 October 2011 the husband filed an application in an appeal to adduce further evidence. Further orders were made by consent on 11 November 2011, granting leave to both parties to adduce further evidence and extending the time for the parties to file and serve submissions. The further evidence to be adduced related to updated valuations of the two properties at C, current superannuation balances, and recent income.
A further extension of time to file and serve submissions was agreed by the parties. Both parties filed written submissions on 30 January 2012, and further written submissions in reply on 6 February 2012. The wife in her submissions filed 6 February 2012 complained that the husband had contended matters which had not been raised or dealt with in the appeal. On 27 April 2012 the wife was granted leave to file further submissions in response. Further submissions and a minute of orders sought by her were filed on 11 May 2012.
No affidavit evidence has been filed for the purpose of the re-exercise of discretion. Updated values of the parties’ assets, including superannuation, have been provided in a list of assets and liabilities agreed by the parties. Each party has also filed comprehensive submissions, including submissions in response to one another. Thus there is no difficulty in relation to the evidence becoming controversial which would usually necessitate a new trial. However a re-exercise is not without difficulty, including in this case an absence of evidence as to how the husband’s superannuation has substantially increased in value since trial.
I note at this point my comments in the substantive judgment, that it was envisaged that the former valuer Mr V would be engaged on behalf of both parties to update the valuation and also give advice as to whether there was some prospect of selling a portion of one of the properties. In light of the husband’s submissions that a just and equitable outcome would require that he be given some share in the non-superannuation assets, which are almost entirely constituted by two properties currently retained by the wife, it is a great pity such evidence has not been provided by the parties to assist in our
re-exercise of discretion and determination of the proper orders to be made.
Re-exercise of discretion is not, however, impeded by the lack of fresh or further evidence from the parties. Indeed a re-exercise of discretion by an appeal court may be conducted entirely on the basis of the evidence which was before the Federal Magistrate. The order in the appeal granting leave to the parties to adduce further evidence was made in consideration of the parties’ request for an opportunity to update relevant information, which they have done in the form of submissions.
A consideration of the property orders to be made will be based on the evidence before the Federal Magistrate, and the parties’ submissions filed in accordance with the orders made in the appeal, including the updated list of assets and liabilities and the further submissions insofar as they relate to the division of property.
The list of assets and liabilities was provided with the respondent husband’s submissions filed 30 January 2012. The list contains the values of the parties’ assets and liabilities (including superannuation) as at trial, and as currently agreed. The list also includes the add-back, the value of which is agreed by the parties, however the method of its inclusion in the pool is not.
LIST OF ASSETS AND LIABILITIES
ASSET
VALUE AT TRIAL
CURRENT AGREED VALUE (except for addback)
1
Real Estate – Property A (W)
$400,000
$350,000
2
Real Estate – Property S (W)
$430,000
$400,000
3
Commonwealth Bank (W)
$707
$707
4
Mitsubishi Triton (W)
$10,500
$10,500
5
Household contents (W)
$20,000
$20,000
6
Commonwealth Bank (H)
$390
$390
7
S Credit Union (H)
$1,630
$1,630
8
IAG Shares (H)
$3,055
$1,440
9
Telstra Shares (H)
$510
$390
10
Nissan Pathfinder (H)
$6,500
$6,500
11
Add back
$173,841
(not agreed) $173,841
TOTAL
$1,047,033
$965,398
ASSET
VALUE AT TRIAL
CURRENT AGREED VALUE
1
Superannuation (H)
$259,474
$365,803
2
Various Superannuation (W)
$25,300
$35,616
TOTAL
$284,774
$401,419
It is apparent that the value of the parties’ non-superannuation assets, with or without the add-back amount, has decreased by approximately $80,000 since the trial in October 2008, a not insignificant amount. However, the total value of the property pool has increased, as the parties’ superannuation assets have grown. It should be noted that this is primarily due to the post-trial augmentation of the husband’s superannuation interests to the extent of approximately $100,000.
As will later be further explained, the increase in value of the superannuation together with its historical acquisition is a reason in my opinion to deal with it as a separate pool.
Submissions of the Parties
Wife’s submissions
The wife’s initial submissions filed 30 January 2012 canvass two alternative scenarios for the division of property between the parties, namely exclusion and inclusion of the add-back amount. It is apparent that the wife prefers the Court adopt a global approach to the division of the property pool.
The wife submits that the value of the property pool to be used by this Court in the re-exercise of discretion should be $1,192,976. This excludes the
add-back value and includes the current agreed values of the parties’ superannuation. The wife correctly submits that the husband’s superannuation ought to be included as a result of this Court’s reasons in the substantive appeal.
The wife submits that the findings of the Federal Magistrate regarding contributions and further adjustments under s 75(2) should be adopted in the
re-exercise, because such findings were not challenged on appeal, except as to the add-back issue. The wife seeks that the Federal Magistrate’s findings of contributions be adopted. Those findings were contributions by the wife of 81 per cent and by the husband of 19 per cent. With the further adjustment under s 75(2) of 3 per cent in favour of the husband, the overall division on the Federal Magistrate’s findings, supported by the wife in her submissions, is
78 per cent to the wife and 22 per cent to the husband. On the wife’s figures, 22 per cent of the property pool is $262,454 and the value of assets retained by the husband is $376,153 ($365,803 of this amount being in the form of superannuation). It is contended therefore that the division should be achieved by ordering a split of the husband’s superannuation, or a cash payment, to the wife in the amount of $113,699.
The alternative proposed by the wife includes the add-back amount, and again adopts the current value of the parties’ superannuation interests, making the total property pool $1,366,817. The wife submits that if the add-back is included and, in accordance with my opinion in the substantive judgment that the amount could not then be also taken into account under s 75(2), the division should reflect the contribution findings of 81 per cent to the wife and 19 per cent to the husband. On the wife’s figures, the husband’s 19 per cent entitlement would be $259,695. It is again contended that the division should be achieved by ordering a split of the husband’s superannuation, or a cash payment, to the wife in the amount of $116,458.
An obvious limitation to the wife’s contentions is that the percentage found by the Federal Magistrate was based on a consideration of assets excluding the superannuation.
Considering the just and equitable effect of the property division exercise, it can be seen that both of the wife’s alternatives leave the husband with no substantial real property, his only remaining assets being a small amount in shares, an aged vehicle and a superannuation sum which he will not be able to access for at least seven years.
In the submissions filed 30 January 2012, the wife asked that the costs of the appeal be reserved until orders in the re-exercise of the discretion are made. Reference was made to offers in relation to the appeal. Cost certificates have already been granted in relation to the appeal, however it may be that the parties will ask for costs orders after the orders are made in relation to the
re-exercise.
Husband’s submissions
The husband’s initial submissions filed 30 January 2012 discuss four matters: the re-exercise of the discretion by this Court, the manner in which this Court has found it can take into account the add-back amount, the four step approach identified in Hickey & Hickey & Attorney-General (Intervenor) (2003) FLC 93-143, and the property to be received by both parties under the various alternatives available to the court.
The husband seeks that the Court employ a two pool approach in identifying and dividing the property pool. The husband’s position is that the orders should be based on his receiving 35 per cent of the non-superannuation assets (including the add-back), and 60 per cent of the superannuation assets. At trial, the husband sought a global division of property of approximately 38 to 40 per cent to him and 60 to 62 per cent to the wife, based on contributions by him of 35 per cent and a 3 to 5 per cent adjustment in his favour based on
s 75(2) factors.
In relation to the approach to a re-exercise of discretion generally, the husband submitted that this Court may decide the way in which the case should have been decided at first instance and insert its own decision in lieu. Section 94(2) of the Family Law Act 1975 (Cth) (“the Act”) and the decisions in Allesch v Maunz (2000) 203 CLR 172 and Warner & Warner [2008] FamCAFC 156 were referred to in support of this proposition.
In relation to the add-back, or the “contentious amount”, the husband correctly submitted the Court should only take the amount into account in one way and that double counting was not appropriate. It was submitted that the most effective method of taking the contentious amount into account is by means of an add-back into the property pool, because the wife received the amount and on her own evidence applied it to her benefit. It is submitted that this approach is supported by findings in the reasons for judgment of the Federal Magistrate, which were not overturned in the appeal judgment, including that the wife had failed significantly in her obligation to provide full and frank disclosure. It was further submitted that the Court is entitled to take the wife’s conduct in this manner into account, as part of the consideration of how to deal with the contentious amount.
It is the husband’s position that, in the event that the Court determines the contentious amount should be taken into account as a contributions consideration, or at the “second step”, the Court should reduce the wife’s contribution based entitlement. It is noted (paragraph 12 of the submissions) that the add-back represents 18 per cent of the pool of assets not including superannuation.
Based on the clear decision of Deputy Chief Justice Faulks, Justice Strickland and myself in the reasons for judgment in the appeal, that if included in the property pool at step one, the add-back could not also be taken into account in the step two determination of contributions, I take this submission to mean that in the event the add-back is not included at step one in the property pool, then it should be considered at step two, and the wife’s contribution entitlement should be reduced accordingly. In my view, either approach is permissible.
The husband provided detailed submissions on each of the four steps identified in Hickey & Hickey & Attorney General (Intervenor) which the Court may follow in divisions of property. The relevant submissions can be summarised as follows:
Step 1 – The Pool of Assets
· The Court should adopt a two pool approach with superannuation assets separate due to the superannuation constituting a significant percentage of the total pool (Coghlan & Coghlan (2005) 93-220 and Davida & Davida [2011] FamCAFC 38) and the husband’s superannuation entitlements in particular being a defined benefit interest.
· Both parties’ superannuation entitlements have grown since the hearing at first instance and this growth should be excluded from the pool (Gollings & Scott (2007) FLC 93-319), using instead the value of superannuation entitlements as at trial.
· If post-trial superannuation growth is included, the husband’s contribution to superannuation should be increased to reflect the share of growth.
· The contentious amount should notionally be added to the pool of assets and included on the wife’s side of the ledger when the property is divided.
Step 2 – Contributions
· Non-superannuation contributions should be attributed 70 per cent to the wife and 30 per cent to the husband based on: the husband’s income contribution over the course of the marriage (being the sole source of income for the majority of the relationship and the primary source at all other times), the husband’s significant non-financial contributions to the properties now owned by the wife (the benefit of which will be retained by the wife as she retains those properties).
· Alternatively should the add-back sum be taken into account in the assessment of contributions (rather than being included in the pool) then the husband’s contribution should increase to 35 per cent.
· In relation to the non-superannuation assets, it is conceded that contributions will favour the wife based on the inheritance received by her from her parents, the rent free accommodation provided by her parents and her contributions as homemaker and parent. However, the amount by which contributions should favour the wife it is argued differs significantly from the findings of the Federal Magistrate.
· In addition, it is argued that the wife should receive no credit for the assets received by an inheritance from her aunt as it is not now reflected in any assets. It is asked instead that the Court add back the amount, it is also conceded that this approach would increase the wife’s contribution.
· As to the superannuation, if the trial values are used, then superannuation contributions should be 60 per cent to the husband and 40 per cent to the wife, because the husband had been contributing to his entitlements for five years prior to the relationship and two years after the relationship as at the date of the trial.
· If the current values are used, contributions should be 65 per cent to the husband and 35 per cent to the wife because the husband has been making sole contributions to his growth in superannuation entitlements for a total of ten years (five years post-relationship and five years before the relationship).
Step 3 – s 75(2) assessment
· The health of the parties is not raised as an issue; the husband is in full time employment with a modest income which is higher than that of the wife. The wife will own properties which could be used for agistment or otherwise leased to local graziers.
· The respective contributions based entitlement will result in the wife receiving significantly more non-superannuation assets than the husband and this comparison of relative resources of the parties requires an adjustment to the husband in the order of 5-10 per cent.
· If the contentious amount is to be taken into account as a matter under s 75(2)(o), rather than in the pool or the assessment of contributions, then a further adjustment of 10 per cent to the husband (15-20 per cent total) is appropriate.
· There should be no s 75(2) adjustments for the superannuation entitlements as suggested above (60 per cent to the husband if trial values are used, 65 per cent if current values are applied).
Step 4 – Just and equitable
· It is submitted, correctly in my opinion, that it would not be just and equitable for the husband to receive the whole of his superannuation entitlements and, as a consequence, a significantly reduced amount by way of other assets. Therefore there should be a split of the husband’s superannuation entitlements to the wife, submitted by the husband to be in the order of 40 per cent if the trial value is used ($88, 609.80) or 35 per cent (104, 880.65) if the current value is used.
· The husband does not have any significant resources to enable him to
re-house or otherwise to acquire assets, and his superannuation is not available to him for at least seven years.· The husband seeks an order for the wife to pay him a sum representing his entitlement to the non-superannuation pool of assets. If the wife is unable to pay the amount required within the timeframe permitted, then he says the wife should be required to sell some or all of her properties in order to meet the payment. The husband does not now seek that some of the lots of land comprising the wife’s properties be transferred to him.
· The Federal Magistrate’s determination of contributions as 81 per cent and 19 per cent to the wife and husband respectively were manifestly inadequate, whether looking at the whole of the pool or the two pool approach. This inadequacy is highlighted when considering cases where there is only a short marriage with the assets of the parties being brought into the relationship by one of the parties only. This was a long marriage of 23 years and the husband made significant contributions during that period.
· Order 5 made by the Federal Magistrate provided for a division of the chattels owned by the parties and was not challenged on appeal. The husband seeks that this order be made as part of the re-exercise of discretion, the evidence being that the husband had been excluded from the home with no notice and had not had an opportunity to obtain an equitable share of the chattels. The difficulty about this proposal is that all orders made by Federal Magistrate Neville were set aside and we otherwise have no evidence or submissions about why such an order should be made.
Division of Assets
· If the contentious amount is to be included in the pool then the amount payable to the husband of non-super assets should be about 35 per cent.
· If the contentious amount is not to be included in the pool of assets then the amount payable should be approximately 40 per cent either on the basis of:
i)contributions of 35 per cent and adjustment for s 75(2) factors of 5 per cent (if the contentious amount is taken into account on contributions); or
ii)contributions of 30 per cent and an adjustment for s 75(2) factors of 10 per cent (if the contentious amount is taken into account under s 75(2)(o)).
A proposed order consistent with the husband’s submissions in relation to superannuation has been served on the husband’s superannuation fund.
Wife’s further submissions
The wife’s submissions in response filed 6 February 2012 assert that the husband’s submissions ought to be rejected. Numerous bases for this assertion are suggested including as follows:
· The respondent’s submissions fall outside the scope of further submissions permitted pursuant to the orders, which described “submissions in writing about the division of the property of the parties”.
· The respondent has made submissions which purport to vary the findings of the Federal Magistrate, which were not subject to cross appeal by the respondent, nor considered by the Full Court, except as they specifically related to the grounds of appeal.
· The respondent is seeking to re-agitate in the submissions matters which are ordinarily raised at trial.
· The respondent is contending for the use of a two pool approach not argued at trial and not challenged on appeal, for findings of contributions different to those found by the Federal Magistrate and not challenged on appeal, and for an adjustment for s 75(2) factors, which is different to what he contended at trial.
It is the wife’s submission that if the issues ordinarily raised at trial are to be
re-agitated, then the matter ought to be conducted as a re-trial. She requested that if the husband’s submissions are to be considered, natural justice would require that leave ought to be granted to her to be able to provide further submissions in response. On 27 April 2012 we gave such leave.
The wife’s submissions provided a minute of orders sought. The proposed orders provide for an allocation of $113,699 of the husband’s superannuation interest to the wife pursuant to s 90MT(4) of the Act, and that each party retain all other property in their possession at the date of the orders.
Husband’s further submissions
The husband’s submissions filed 6 February 2012 in response to the first submissions of the wife address a number of issues.
The husband asserts that the wife’s submissions proceed on the basis that this Court is not re-exercising the discretion of the Federal Magistrate but rather, simply applying the determinations of his Honour. It was submitted that s 94(2) of the Act makes it clear that the Full Court is to make the orders which, in its opinion, ought to have been made in the first instance. Therefore, the Court must come to its own conclusions.
It is submitted that according to the wife’s proposal (which does not include the add-back and uses the current value of the superannuation entitlements whereas the husband says trial values should be used), the husband would receive 1.3 per cent of the non-superannuation assets and 62.8 per cent of the superannuation assets.
If the add-back is included, then the wife’s proposal results in the husband receiving 1.07 per cent of the non-superannuation assets and 62.1 per cent of the superannuation assets. This is a lower percentage to the husband on both pools, despite that add-back amount being entirely on the wife’s side of the ledger in the property division.
Neither of the wife’s proposals, in the husband’s submission, would provide him with any resources with which to rehouse himself or even to meet his significant liabilities. Other than the property retained by him valued at about $10,000, the husband would receive only superannuation, which he cannot access for a significant period of time.
Submissions are repeated in favour of two pools, based on the superannuation assets constituting a significant proportion of the total pool. The husband further submits that only by considering the two pools separately can the Court make an order that is just and equitable.
In the event that the Court prefers a one pool approach, the husband submits that his contributions would be significantly increased as a result of his superannuation entitlements, as well as the other contributions set out in his initial submissions. Based on these contributions, the husband asserts a finding of his contributions in the order of 35 to 40 per cent and a further 5 per cent in his favour for s 75(2) adjustments.
It is the husband’s submission that the contributions assessment by this Court should be significantly different from the assessment made by the Federal Magistrate. In the event that the assessment of the Federal Magistrate is found to be correct, the husband submits there should be, at the very least, a significant adjustment under s 75(2)(b) as a result of the disparity in resources that the parties will be left with after the contributions assessment (Farmer & Bramley (2000) FLC 93-060, Polonius & York [2010] FamCAFC 228).
The husband’s submissions also provided a minute of orders sought. The proposed orders provide for an allocation of $88,609 of the husband’s superannuation interest to the wife pursuant to s 90MT(4) of the Act, that the wife pay to the husband the sum of $327,539 within 42 days of the date of the orders, and if payment is not made that the wife shall pay interest on the amount and shall do all things necessary to effect the sale of the properties known as A and S in C.
As to costs, the husband submits that orders 8 to 10 of the orders in the appeal made 23 September 2011 conclusively finalised costs in the appeal. Should this not be the case, he seeks to be heard in reply to any application for costs. The husband referred to paragraph 4 of the orders made 23 September 2011, which contemplated submissions in relation to costs. These submissions would relate to the costs associated with the re-exercise.
Wife’s further submissions pursuant to directions of 27 April 2012
Primarily these submissions urged the Court not to interfere with the findings of the Federal Magistrate in relation to contributions, especially as the findings had not been challenged by the husband in the appeal. Of course this submission ignores the central error made by the Federal Magistrate, which was applying a percentage based on contribution to assets not including the superannuation assets.
The wife’s further written submissions do address the position of the wife in the event that that re-exercise reconsiders the contributions entitlements of the parties. The position of the wife remains unchanged as to the percentage of property the parties should receive and the proposed orders. The wife repeats her position at trial, that the contribution based entitlement in her case ought to be 90 per cent and the husband’s entitlement 10 per cent.
It is submitted for the wife that the husband’s submission that a two pool approach be adopted ought be rejected. It was said that at the trial, the assessment of contributions and further adjustment for s 75(2) factors were all carried out on the basis of a single pool, and that no complaint or submission was made by the husband on this issue until submissions were invited as to the form of the order.
The wife’s further submissions do also contemplate however, the position of the wife in a re-exercise of the discretion based on a two pool approach. It is submitted that the wife contends a 100 per cent contribution based entitlement to the non-superannuation assets. In support of this entitlement submissions were made in relation to the substantial contribution made by the wife to the non-superannuation assets, emphasising correctly that the real estate was inherited from her family. In addition substantial cash inheritances were received by the wife from her family, and she says expended on maintenance and improvement of the properties and the children.
In respect of the superannuation assets, the wife contends for an entitlement of 60 per cent to the husband and 40 per cent to her. The wife concedes that it is open to the Court to increase the contributions based entitlement of the husband, on the basis of the increased value of his superannuation. It was contended however, that the wife’s asset position has decreased, because of the reduced values of real estate and that although the change in value is not as significant as the husband’s, the difference is minimal and on a de minimus basis ought be ignored.
In relation to the s 75(2) assessment, the wife reiterates that the Federal Magistrate’s finding of a 3 per cent adjustment to the husband ought not be disturbed, as it was not the subject of appeal or complaint by the husband. The wife’s submissions do not specify to which pool this adjustment is to be applied.
It is further submitted for the wife that in fact the role of the parties during the marriage, specifically the wife as primary carer and homemaker and the husband as employed with a superior earning capacity, called for a significant adjustment in the wife’s favour, or alternatively diminished any adjustment in the husband’s favour because of the disparity of financial resources.
In any event the wife submits that the husband’s contribution to the
non-superannuation assets should be assessed at 10 per cent. Alternately it is submitted that should the Court adopt the two pool approach (which is resisted, again because it was not a ground of appeal), then the Court should find that the wife had made 100 per cent contribution to the non-super assets. The wife also asks that she receive 40 per cent of the superannuation assets.
Discussion
Before proceeding to deal with the substantive division of property between the parties, it is important first to address the argument of the wife with respect to the scope and purpose of this Court’s re-exercise of the Federal Magistrate’s discretion.
The final submissions filed by the wife on 27 April 2012 reiterated her earlier submissions in relation to this issue:
8. The appellate process is not a process for the unsuccessful party to have “a second bite of the cherry” in terms of the percentage division, and other issues, agitated at trial.
9. It is for the Full Court to “re-exercise it’s [sic] discretion”. A re-exercise of discretion is not a “retrial” of all matters before the Full Court. As was said in Stanford and Stanford (2012) Fam CAFC 1 (at para 42) (19 January 2012):
“Given that we have been asked to re-exercise discretion, it is necessary to consider the reasons for Judgment of the Magistrate. It is important to observe that the finding of facts by the Magistrate were not challenged”.
It is important to consider the circumstances of this case compared to those in Stanford & Stanford [2012] FamCAFC 1. In both cases the findings of fact in relation to contributions were not expressly challenged in the appeal. However in Stanford & Stanford, both parties agreed that in the re-exercise of the Magistrate’s discretion, the findings of the Magistrate on contribution should not be disturbed. In the re-exercise of discretion in this case, it is apparent that there is no such agreement between the parties.
An appeal lies to the Family Court from orders made by the Federal Magistrates Court (s 94AAA(1) of the Act). There is no doubt that in such an appeal, the Court can make any such decision as, in the opinion of the Court, ought to have been made in the first instance, or may order a rehearing
(s 94AAA(6)).
In accordance with section 93A(2) of the Act, in an appeal from the Federal Magistrates Court, an appeal court shall have regard to the evidence given before the trial court and may receive further evidence.
The nature of such an appeal to the Full Court was explained in Allesch v Maunz (2000) 203 CLR 172.
For that purpose it is instructive to repeat the following parts from the majority decision:
20.The nature of the appeal to the Full Court is to be discerned from s 93A(2)of the Family Law Act 1975 (Cth) ("the Act"), which was considered by this Court in CDJ v VAJ and in DJL v Central Authority and, also, from s 94 of the Act. Section 93A(2) provides that, subject to s 96, which is concerned with appeals from courts of summary jurisdiction:
"... in an appeal the Family Court shall have regard to the evidence given in the proceedings out of which the appeal arose and has power to draw inferences of fact and, in its discretion, to receive further evidence upon questions of fact, which evidence may be given by affidavit, by oral examination before the Family Court or a Judge or in such other manner as the Family Court may direct."
…
22.The majority in CDJ v VAJ proceeded on the basis that an appeal under s 94(1) of the Act is an appeal by way of rehearing. That is undoubtedly correct. So much is to be discerned from the terms of s 93A(2), in particular its conferral of power to receive further evidence. That is not a power possessed by appellate courts whose jurisdiction is confined to appeals in the strict sense and whose function it is simply to determine whether the decision under appeal was or was not erroneous on the evidence and the law as it stood when the original decision was given. And an appeal under s 94(1) is, as s 93A(2) indicates, to be distinguished from an appeal under s 96 which is a hearing de novo.
23.… And the critical distinction, for present purposes, between an appeal by way of rehearing and an appeal in the strict sense is that, unless the matter is remitted for rehearing, a court hearing an appeal in the strict sense can only give the decision which should have been given at first instance whereas, on an appeal by way of rehearing, an appellate court can substitute its own decision based on the facts and the law as they then stand.
…
30.Although, on an appeal by way of rehearing from a discretionary judgment, an appellate court may, itself, exercise the discretion in question by reference to circumstances as they then exist, it is not bound to do so. It may, instead, set aside the order under appeal and remit the matter for rehearing or, in terms of s 94(2) of the Act "order a re-hearing, on such terms and conditions, if any, as it considers appropriate." And where circumstances have or are likely to have changed between the original hearing and the disposition of the appeal, it is not uncommon for an appellate court to remit the matter for rehearing rather than, itself, exercise the discretion in question.
31.If on an appeal by way of rehearing from a discretionary judgment an appellate court is minded to exercise the discretion in question by reference to circumstances as they exist at the time of the appeal, it is necessary that the parties be given an opportunity to adduce evidence as to those circumstances. It is not entirely clear that that happened in the present case, particularly as the Full Court indicated that it could only speculate as to the likely outcome of a fresh application of the principles governing property settlement to the property then owned by the parties.
32.Whether or not the parties were afforded an opportunity to lead evidence as to the circumstances as existing at the time of the Full Court's decision in this matter, the Full Court erred in its exercise of the discretion to set aside the property settlement orders. The matters taken into consideration by the Full Court were relevant to the question whether a rehearing would occasion the wife some injustice that could not be remedied by the imposition of terms, but that question was not answered. Nor did the Full Court determine whether a rehearing might result in some different outcome. These were issues which should have been determined if the Full Court was, itself, to exercise the discretion to set aside the property settlement orders by reference to circumstances as they then existed. They are not questions which this Court can now determine. Accordingly, the matter must be remitted to the Full Court.
(footnotes omitted)
It is plain that once the Full Court finds error, the decision is made to set aside the orders and determine which is the better course: to remit the matter for rehearing or, on the material before the Full Court together with further evidence and submissions, to re-exercise the discretion.
In this case, on the urging of the parties the Court will re-exercise the discretion based on the further agreed evidence of value and their respective submissions.
The Court is not restricted to the evidence before the Federal Magistrate nor the arguments at trial, subject of course to each party being given the opportunity to make submissions.
Determination of the property pool
For the purposes of the re-exercise of discretion, the parties have provided an updated agreed list of assets and liabilities. The two contentious issues which remain are the treatment of the superannuation assets, and the inclusion or exclusion of the contentious amount of $173,841 as an add-back.
Superannuation
In my reasons for judgment in the substantive appeal, I noted it is permissible to treat superannuation assets differently or separately to other assets. There is nothing however, which requires a court to adopt a particular approach in certain circumstances. It is a discretionary decision.
The husband’s submissions have correctly identified that in circumstances where the superannuation interests constitute a significant portion of the parties’ property, it may be appropriate to adopt a two pool approach. The value of the parties’ superannuation as a percentage of the total property pool at trial was 21.4 per cent (with the add-back) or 24.6 per cent (without the add-back). On the current values, the superannuation represents significantly more of the total pool, being 29.4 per cent (with the add-back) or 33.6 per cent (without the add-back).
Given that the superannuation of the parties constitute a substantial proportion of the property pool, and that the majority of this is in the husband’s name, I consider it appropriate to adopt a two pool approach in identifying the assets of the parties to be subject to division.
As to whether the trial or current values should be adopted, the husband supports using the trial value, because he contends the accumulation in value since the trial has been entirely attributable to the parties separately in their own interests, not in the joint interests of the relationship.
As mentioned earlier, one difficulty is the absence of evidence in the
re-exercise as to the nature of post-trial growth in the superannuation assets. In any event this can be assessed as contribution.
In the interests of reaching a just and equitable decision which takes into account the current position of the parties, in my view the proper value to be assigned both the superannuation and the non-superannuation assets is the current value. To do otherwise would depart from the general principle that the Court should consider the value of the assets “at trial”.
The add-back/contentious amount
As I made clear in the reasons for judgment in the appeal, it seems the parties have very little to show from the inheritance which was the source of the contentious amount. The monies were received and expended entirely during the course of the marriage. In these circumstances, I do not consider the use of an add-back to be the only approach.
The better course in my view is to consider the use of these monies and, where the expenditure is unexplained or there was no proper account, take these matters into account in determining the proper percentage to be attributed to the parties by reason of their contributions during the marriage. Accordingly,
I would consider the issues associated with the contentious amount at the second stage.
Based on a two pool approach, adopting current values and no add-back, the assets for division between the parties are as follows:
| Current agreed value | |
| Pool 1 – Non-superannuation | $791,557 |
| Pool 2 – Superannuation assets (current) | $401,419 |
| Total value of assets | $1,192,976 |
Contributions
In respect to contributions, it is uncontroversial that the wife was the primary homemaker and the husband was the primary income provider.
The significant factor in the contributions determination is the considerable money and property resources which the wife contributed from a series of inheritances. The first, of value unknown, was from the wife’s mother upon her death. The second was from the wife’s father upon his death in 1997, which included the two properties A and S. These two properties are still retained by the wife. The third was $376,742 from the wife’s aunt upon her death. Of this total sum, $188,171 was received in 1999 and $188,571 in 2004. Each of the wife’s inheritances for which the value is known was therefore wholly received during the course of the relationship.
The two properties inherited by the wife upon the death of her father are clearly identifiable and comprise the major part of the assets of the parties. It is clear that considerable contribution should be attributed to the wife for the property inheritance.
The inheritance from the aunt however is more problematic, as it is not apparent how some of the moneys were applied. The evidence of the wife was that she spent the entirety of the funds of the inheritance from the aunt during the relationship, however she was unable to specifically account for a portion of the funds, in the sum of $173,841.
It is apparent from the wife’s evidence that virtually the entirety of the unaccounted for funds from the inheritance from the aunt was applied for the wife’s own benefit, not for the benefit of the parties’ jointly. The funds were expended on payments and gifts to her half siblings and various other family members, debts associated with her father’s estate, and personal holidays and “healing” courses inter-state (Federal Magistrate’s reasons for judgment
p14 to15).
The unaccounted for expenditure from the aunt’s inheritance is equal to approximately 21 per cent of the non-superannuation property pool at current values. But for this factor, the wife’s direct contribution to the property pool could be assessed in a range between 80 and 90 per cent.
The husband’s direct and indirect contributions in a long marriage should not be ignored, leading properly to an overall result of a division of the
non-superannuation assets (leaving aside the wife’s unaccounted expenditure of her inheritance) of 80 per cent to the wife and 20 per cent to the husband. When proper consideration is taken of the wife’s use of the inheritance, the division of the non-superannuation assets should be 70 per cent to the wife and 30 per cent to the husband.
In these circumstances I consider the contributions of the parties to the
non-superannuation asset pool to be 70 per cent to the wife and 30 per cent to the husband.
Contributions to superannuation assets are clearly attributable to the individual to whom the interest has accumulated, subject to the recognition that during the period parties live together and when one has made a financial contribution, it reduces the moneys available to the other by that amount. It is also in many cases an incident of employment to be shared mutually.
The husband’s entitlement to the total superannuation of the parties
prior to the division of property is approximately 91 per cent. The husband began accumulating his superannuation five years prior to the commencement of the relationship, and now for five years post-relationship (two years after separation and three years post trial). The duration of the relationship was
23 years.
On her evidence, the wife did not work out of the home for the first ten years of the relationship, and then worked part-time. On the husband’s submissions, the entirety of the wife’s superannuation was accumulated during the course of the marriage. It is not controversial that by virtue of her significant contributions as homemaker and mother, which supported the husband in his accumulation of superannuation, the wife made indirect contributions to the husband’s superannuation interest during the period of the relationship.
Since trial, the total superannuation pool has increased by 40 per cent. The wife’s own superannuation has increased, however this growth only represents 9 per cent of the total superannuation pool growth.
In these circumstances, I consider the contribution of the parties to the total superannuation pool to be 35 per cent to the wife and 65 per cent to the husband.
Section 75(2) factors
Having already considered the contentious amount at the contributions stage, it would be erroneous and unnecessary to consider it again as a s 75(2) factor warranting any adjustments. I therefore consider there ought not to be any adjustment made under s 75(2) in stage 3 to the division of the parties’ property, in accordance with the contributions findings in stage 2.
There is no justification for any further adjustment by reason of s 75(2). The need for any adjustment is unnecessary also by reason of the proposed orders in relation to superannuation.
Just and equitable result
The parties were married for a significant period, 23 years, during which time both made significant financial and non-financial contributions. In my view, a just and equitable result in such circumstances requires that the division of property ensure both parties receive some non-superannuation and superannuation assets.
Division of the two pools of property according to the contributions which I have found would meet this requirement. The proper orders to be made therefore ought to reflect the division of the non-superannuation pool as 70 per cent to the wife and 30 per cent to the husband, and the division of the superannuation pool as 35 per cent to the wife and 65 per cent to the husband.
The mathematical effect of this division is that the non-superannuation entitlement of the wife is $554,089 and of the husband $237,467. On the current value of the non-superannuation assets, the husband is already in possession of $10,350 of these assets. The wife would therefore be required to make a cash payment to the husband of $227,117.
If the wife is unable to raise the funds by other means, then she will be required to sell one of the properties in order to meet the husband’s entitlement. In this sense, I repeat my earlier comment that it is unfortunate the parties have not put before this Court further evidence from a valuer as to the prospects of sale of either of the properties or part thereof. The absence of such evidence does not however, preclude the making of such an order. While the wife may understandably be dissatisfied by the prospect of sale of a property or both, a division of property where the husband receives no tangible property assets is a result where the requirements of justice and equity between the parties in these circumstances would not be met. Accordingly, the wife should be ordered to sell property in the event she cannot otherwise meet the payment.
In respect of the superannuation assets, the entitlements of the wife at 35 per cent and the husband at 65 per cent are equal to $140,496.65 and
$260,922.35 respectively. The husband currently retains in his superannuation fund $365,803 and the wife in her fund retains $35,616. The husband would therefore be required to make from his interest, via a superannuation splitting order under s 90MT of the Act, a payment to the wife of $104,880.65.
The division of property in accordance with the two pool approach would therefore provide each party with both non-superannuation and superannuation assets, as I consider to be required in order for justice and equity to be done between the parties.
Strickland J
I have had the advantage of reading the separate reasons for judgment of Deputy Chief Justice Faulks and May J. However, I do not agree with all of those reasons or all of the orders proposed by their Honours.
In her reasons for judgment May J has set out the history and background of this matter as well as the respective submissions of the parties and the orders that they seek on a re-exercise of the discretion of the Federal Magistrate. Plainly I do not need to repeat these matters, but I do consider it necessary to make some brief comments before setting out my reasons for judgment as to the substantive issues. Those comments are as follows:
a)The contentious amount of $173,841 is not entirely comprised of money “for which the wife could not account.” It also comprises expenditure that the Federal Magistrate found to be “inappropriate”. We have not disturbed this finding in this appeal.
b)As to the further evidence, I point out that the parties presented agreed values of the properties but what was not presented was advice from the former valuer as to the prospect of selling a portion of one of the properties.
c)It is not “the method of” the “inclusion in the pool” which was not agreed by the parties, but whether the contentious amount should be included in the pool at all.
d)The error made by the Federal Magistrate was not that he based his findings as to the appropriate percentage division “on a consideration of assets excluding the superannuation”, but that as identified in paragraph 165 of my reasons for judgment delivered on 23 September 2011, after determining the percentage division on the basis of the total pool of superannuation and non-superannuation assets, his Honour then took out the superannuation and only applied that percentage to the non-superannuation assets.
I now turn to my reasons for judgment as to the substantive issues.
The asset pool
As identified by May J in her reasons for judgment there are two contentious issues here, first the treatment of the superannuation assets, and secondly, the inclusion or exclusion of the amount of $173,841.
In relation to the first issue I agree with May J and Deputy Chief Justice Faulks that it is “appropriate to adopt a two pool approach” to the assets of the parties. I also agree that the “proper value to be assigned is the current value of both the superannuation and the non-superannuation assets.”
However, as is plain from my reasons for judgment in the appeal, I disagree with their Honours’ treatment of the amount of $173,841. There is no question that in the circumstances of this case that sum should be notionally added back to the asset pool. Thus, based on a two pool approach, adopting current values and notionally adding back that sum, the assets for division between the parties are as follows:
Non-superannuation assets $965,398
Superannuation assets $401,419
Total assets $1,366,817
Contributions
Like Deputy Chief Justice Faulks, I agree with May J’s assessment of the respective contributions to the superannuation assets at 65 per centum to the husband and 35 per centum to the wife.
In further support of that finding I would adopt what the Full Court said in Hauff & Hauff (1986) FLC 91-747 and which still holds true today. First, at 75,441 Fogarty and Murray JJ said this:
The relevance of superannuation in most proceedings is twofold. In the majority of cases it represents a form of saving by the parties during the course of their marriage to which each of them is treated as having made either a direct or indirect contribution … The second aspect in most cases is that it represents a future financial resource and a future protection against the uncertainties of life and a nest egg for the retirement of both parties (and not merely the contributor) if their marriage continued to that point …
Secondly the Full Court emphasised that in many cases superannuation is an incident of employment to be mutually enjoyed by both parties to the marriage.
As to the respective contributions of the parties to the non-superannuation assets I also agree with the findings of May J, but not of Deputy Chief Justice Faulks, but of course, that is to be expected given the different approaches adopted by us in relation to the contentious amount of $173,841.
Thus, for my part, having notionally added back the said amount to the pool of assets, it is then a matter of assessing the respective contributions of the parties to all of those assets, including the contentious amount, and in this regard I agree with what May J has set out in paragraphs 88, 89 and 90 of her reasons for judgment.
Turning to the contributions to the inheritance from the aunt, of which the $173,481 forms part, I have no issue with the reasons for judgment of May J as set out in paragraphs 91 and 92, save and except that as identified in paragraph 110 above not all of the contentious amount was unaccounted for, but that should not affect the assessment of the wife’s contributions. Certainly, the evidence supports the findings of the Federal Magistrate as to the wife’s conduct in relation to the inheritance from her aunt.
Then, as to May J’s actual assessment of the contributions of the parties set out in paragraphs 93 and 94 of her reasons for judgment, I have no difficulty with accepting her Honour’s findings that upon a proper assessment of the respective contributions of the parties, “the division of the non-superannuation assets should be 70 per cent to the wife and 30 per cent to the husband.” The difference of course is that on my approach that percentage division is to be applied to an asset pool that includes the contentious amount of $173,841. Logically, I can see no other result.
Section 75(2) factors
Having identified the error made by the Federal Magistrate in paragraph 157 of my reasons for judgment delivered on 23 September 2011, there should be no adjustment for lack of disclosure and the failure to account for most of the contentious amount.
Further, I agree with May J that there is “no justification for any other adjustment” pursuant to s 75(2) of the Family Law Act 1975 (Cth) (“the Act”). In this regard I obviously disagree with Deputy Chief Justice Faulks who found that there should be an adjustment of 2 per centum in favour of the wife because of the husband’s “income and earning capacity” compared to the wife. In this regard I note that the wife’s capital position as a result of my proposed orders will exceed the husband’s, and this more than offsets such disparity.
Just and equitable result
I agree with May J that “a just and equitable result (in the circumstances of this case) requires that the division of property ensure both parties receive some non-superannuation and superannuation assets.”
Reflecting on my findings that there should be a division of 65 per centum to the husband and 35 per centum to the wife of the superannuation assets, and
70 per centum to the wife and 30 per centum to the husband of the non-superannuation assets (including the amount of $173,841), they well and truly meet that requirement.
The mathematical effect of such a division is that the entitlement of the wife to the non-superannuation assets is $675,779, and the husband’s is $289,619. As identified by May J the husband retains assets of $10,350, and thus, on my calculations, the wife will be required to make a cash payment to the husband of $279,269. In that regard, I agree with the sentiments expressed by May J in paragraph 106 of her Honour’s reasons.
In respect to the superannuation assets, given that I have agreed with May J’s percentage division and the value of those assets the result will be the same as is set out in paragraph 107 of her Honour’s reasons for judgment.
I consider that the outcome I propose both as to the non-superannuation assets and the superannuation assets, and the orders to achieve that, comply with
s 79(2) of the Act.
The orders that I would make are as follows:
a)Within ninety (90) days of the date of these orders the wife pay to the husband the sum of $279,269.
b)The furniture and chattels in the home situated on the S property and the farm machinery, tools and stock situated on that property and on the A property be retained by the wife.
c)Unless otherwise specified in these orders, each party be solely entitled to the exclusion of the other to all other property including motor vehicles, bank accounts and shares in the possession of such party at the date of these orders.
d)In the event of default by the wife in payment of the sum referred to in paragraph a) hereof or any part thereof:
i)the wife shall pay to the husband in addition to such sum interest upon the amount unpaid calculated at the rate prescribed by the Family Law Rules from the date of default to the date of payment of such sum; and
ii)should such default continue for a period of twenty-eight (28) days then and in that event either the property known as A in C, or S in C, at the election of the wife, be sold on such terms and conditions and for such price as the parties may agree and in default of agreement as determined by the Federal Magistrates Court, and from the net proceeds of sale the husband receive such sum as shall then be outstanding pursuant to these orders (including the interest due pursuant to sub-item paragraph i) hereof) and the wife receive the balance.
e)Liberty be reserved to either party to apply to the Federal Magistrates Court on seven (7) days notice to the other with respect to the terms and conditions of the sale in default of agreement as to the same.
f)In accordance with Section 90MT(4) of the Family Law Act 1975 (Cth), a base amount of $104,880 is allocated to the wife from the husband’s interest in the N Superannuation Scheme.
g)Pursuant to Section 90MT(1)(a) of the Family Law Act 1975 (Cth) whenever the trustee of the N Superannuation Scheme makes a splittable payment out of the interest of the husband in the scheme, the trustee shall:
i)pay to the wife her administrators, executors, beneficiaries, heirs and assigns the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001(Cth); and
ii)make a corresponding reduction in the entitlement of the husband in the N Superannuation Scheme or such other person to whom a splittable payment would have been made but for this order.
h)The operative time for the orders made in f) and g) is four (4) days after service of these orders on the trustee of the said scheme.
i)If either the husband or the wife shall refuse or neglect to execute any document necessary to give effect to the terms of this order within seven (7) days after the same shall have been tendered to him or her for that purpose then and in such case a Registrar or a Deputy Registrar of the Federal Magistrates Court upon proof by affidavit of such refusal or neglect is hereby appointed to execute on behalf of either party hereto and if in his or her opinion it shall be necessary so to do to settle the same and to do all such other acts and things and execute all such other documents as shall be necessary to give full force and effect hereto and shall execute and do the same accordingly.
I certify that the preceding one hundred and twenty-nine (129) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court delivered on 19 June 2012
Associate:
Date: 19 June 2012
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