McLaughlin and McLaughlin

[2016] FCCA 1898

FEDERAL CIRCUIT COURT OF AUSTRALIA

McLAUGHLIN & McLAUGHLIN [2016] FCCA 1898

Catchwords:
FAMILY LAW – Property dispute – marriage in 1991 ending in 2007 (wife’s version) or 2014 (husband’s version) – husband  asserting greater contributions but court accepting contributions were equal – wife having care of adult disabled son – husband’s earnings substantially greater than wife’s – husband in poor health – 5% adjustment in wife’s favour in respect of future needs.

Legislation:

Family Law Act 1975

Stanford v Stanford (2012) 247 CLR 108
Mallet v Mallet (1984) 156 CLR 605

Applicant: MR MCLAUGHLIN

Respondent: MS MCLAUGHLIN

File Number: MLC 6925 of 2014

Judgment of: Judge Burchardt

Hearing date: 7 July 2016

Date of Last Submission: 11 July 2016

Delivered at: Melbourne

Delivered on: 10 August 2016

REPRESENTATION

The Applicant: In Person

Counsel for the Respondent: Mr Chislett

Solicitors for the Respondent: Rf Legal

ORDERS

1. Within 60 days hereof the husband pay to the wife the sum of $158,698 (“the payment”).

2. Contemporaneously with the payment:

   (a)the wife transfer all her right, title and interest in the property known as Property H (“the property”) to the husband;

   (b)the husband refinance the property and discharge all liabilities of whatsoever nature including the (omitted) Bank (“(omitted)”) Defence Force Home Loan and (omitted) Bank Personal Loan.

3. In the event that the husband defaults in respect to the payment to the wife as directed in Order 1 then the property be listed for sale as soon as practicable and not less than 60 days from the default by public auction.

4. The parties sell the property upon terms as to be agreed or in default as determined by the President of the Real Estate Institute of Victoria or his nominee whose decision shall be binding with the cost of such nomination being a selling cost.

5. In the event that either party fails to execute any document or transfer pursuant to these orders the same may be executed by a Registrar of this Court pursuant to s.106A of the Family Law Act 1975 (Cth) (“the Act”) upon satisfying the Registrar by affidavit the necessity for such execution.

6. The proceeds of sale of the property be applied as follows:

   (a)selling costs;

   (b)discharge of any mortgage or encumbrance;

   (c)payment of any amount outstanding to the wife together with interest calculated by the Act and the Family Law Rules 2004 from the time of default until settlement; and

   (d)the balance to the husband.

7. Save as set out herein each party retain all chattels and assets standing in their respective names including any chose in action and indemnify the other for all liabilities of whatsoever nature arising from the retention of such assets pursuant to these Orders.

8. That having been accorded procedural fairness, Orders 8-15 of these Orders be binding upon the Trustees of the Husband’s superannuation fund, namely the (omitted) Superannuation  member number (omitted) (“the Fund”).

9. That there be a superannuation splitting order in accordance with s.90MT of the Family Law Act 1975 (Cth) with respect to the Husband’s superannuation with the Fund in favour of the Wife.

10. That the Court allocate, pursuant to s.90MT(4) of the Family Law Act 1975 (Cth), a base amount of $43,545.50 to the Wife out of the Husband’s interest in the Fund (“the base amount”) noting that if the Member’s benefit is still locked into the Term Deposit, the Trustee will request a Term Deposit break to be actioned and that this Term Deposit break may be subject to fees payable for which the member will be liable.

11. That in accordance with s.90MT(1)(a) of the Family Law Act 1975 (Cth), whenever a splittable payment within the meaning of s.90MT of the Act becomes payable to or on behalf of the Husband from his interest in the Fund, the Wife is entitled to be paid (into a superannuation account nominated by her) by the Trustee of the Fund, the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth) using the base amount (provided that the base amount does not exceed the value of the interest determined under s.90MT(2)) and there be a corresponding reduction in the entitlement the Husband would have had but for these Orders.

12. That Order 11 has effect from the operative time.

13. That the operative time is four (4) business days after the day on which a certified copy of the final sealed and signed Orders are served on the Trustee of the Fund.

14. That within 14 days of becoming entitled to receive a superannuation benefit from the Fund, the Husband will give the Trustee of the Fund:

    (a)All such forms as necessary to enable it to determine the nature and quantum of the Husband’s superannuation entitlement; and

    (b)Any other related information it may reasonably require.

15. That there be liberty to each party and to the Trustee of the Fund to apply regarding the implementation of these orders affecting the interest of the Husband and Wife in the Fund.

IT IS NOTED that publication of this judgment under the pseudonym McLaughlin & McLaughlin is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 6925 of 2014

MR MCLAUGHLIN

Applicant

And

MS MCLAUGHLIN

Respondent

REASONS FOR JUDGMENT

Introductory

1. This is a property dispute.  Although the parties are divorced it is still appropriate to refer to them for convenience as husband and wife.  The applicant husband seeks that the superannuation of the parties that is split-able should be adjusted so that the ultimate outcome is 60 percent to 40 percent in his favour.  He further seeks that all non-superannuation assets be divided as to 80 percent to him and 20 percent to the wife.  The wife seeks that the splittable superannuation of the parties be equalised and that there be otherwise a 55/45 split in her favour.

Agreed or Uncontroversial Matters

1. The husband was born on (omitted) 1961 and the wife on (omitted) 1961.  They married on (omitted) 1994.  Both had been married previously and the husband has three adult children by a prior marriage and the wife has two children by her earlier marriage.  The parties have one son between them, X, born (omitted) 1996, who they agree is diagnosed as suffering from Asperger’s Syndrome, a difficulty that will remain with him for the rest of his life.

2. Although there is a disagreement between the parties as to its extent, both parties agree that there were at least some periods of separation within the relationship.  The wife says that the marriage came to an end in 2007 but that the parties lived together under the same roof from 2008 until 2014 when separation took place on 19 May 2014.  The husband vividly objects to this characterisation of the duration of the relationship and says that the marriage continued, notwithstanding earlier periods of separation, until final separation in May 2014.

3. The husband is a (occupation omitted) who works in a (position omitted), (putting the matter somewhat broadly) for the (employer omitted) and he also has (occupation omitted) as a (position omitted) in the Armed Forces.  The significance of his (omitted) service will become apparent later. 

4. The wife works as a (occupation omitted) in an (employer omitted) and has the full-time care of X and is likely to do so on an ongoing basis notwithstanding that he is an adult.  X spends no time with his father.  The father asserts and the wife denies that the mother has fomented this state of affairs. 

The decision of the High Court in Stanford

1. In Stanford v Stanford (2012) 247 CLR 108, the High Court confirmed that the proper approach to property disputes is, first, to identify the legal and equitable interests of the parties and determine whether an order adjusting the property interests of the parties should be made. In this case, like so many, as indeed the High Court foreshadowed in Stanford, the basis upon which the parties conducted their financial affairs has radically changed by the fact of their separation.  Both parties seek an adjustment to property interests and it is, therefore, plainly appropriate to make one.  This brings us, therefore, to the standard four step methodology.

The Pool

1. Both parties agree that the pool consists of the following assets and liabilities. 

   Assets
   

   Property H: $555,000  

   Husband’s 2012 Mitsubishi Lancer: $13,000  

   (omitted) productivity funds: $50,000 (but excluded as per parties’ submissions)

   Total, $568,000

   Liabilities 
   

   (omitted) Defence Force Home Loan: $212,879

   (omitted) Bank Personal Loan: $66,579

   Total: $279,458

   Net assets: $288,542

   Superannuation 
   

   Wife's (omitted) account: $90,379

   Husband's (omitted) Super: $177,470

   Total: $267,849

2. I understand all the above values are agreed between the parties. I have taken them from the figures either agreed by the husband in cross-examination or advanced by him in cross-examination without material challenge.

3. Although both parties have bank accounts the amounts disclosed in those bank accounts in the materials are, in my view, so small as to be inconsequential.  Although there are, of course, chattels and personal possessions predominantly in the possession of the wife, who remains in occupation of the matrimonial home, there is simply no evidence as to their value and I do not propose to include any value for them in the pool, notwithstanding, of course, that they would cost money to replace. 

4. Likewise, to the extent that the parties assert from time to time in their materials and indeed in the wife’s case outline, there are credit card debts, these all appear to be post-separation debts and/or debts that the parties incurred individually during the latter years of their relationship when their funds were to a considerable extent not co-mingled.  No submission was pressed in final submissions by either the husband or counsel for the wife that these liabilities should be reflected in the court’s deliberations and, accordingly, I do not propose to do so.

5. It should be noted, however, that the Home Loan and the (omitted) Bank Personal Loan are clearly joint debts of the parties.

Contributions

1. I say at the outset that the parties have filed relatively voluminous material.  Much of it related to X (the father’s original application related to parenting issues only).  Mr McLaughlin, who appeared self-represented, expressly informed the court that he relied upon all his affidavits and I have, therefore, naturally read them in detail and had due regard to them.  Indeed, the same is the case with the material filed on behalf of the wife.  The difficulty is, however, that in the light of the way the trial has been conducted much of the material filed is either not directly relevant or in many cases repetitive.  What emerge as the two substantive issues between the parties is the extent of contribution in terms of household and related activity and the extent to which the parties were separated.

2. It is common cause that at the time the parties married the husband had substantial entitlements, as he says at paragraph 14 of his trial affidavit, “as a result of my Defence Force service, which, at that time, had exceeded 23 years”.  

3. This set of entitlements included a Defence Force Retirement and Death Benefits Scheme (“DFRDB”) payment which is a pension paid to Mr McLaughlin in an annual sum, as he puts it (see paragraph 108 of his trial affidavit) of $17,525.82. 

4. Mr McLaughlin also was entitled to what has been described in his financial statement as (omitted) superannuation.   In fact, this is the sequelae to a productivity payment made to him and augmented from time to time which, as earlier indicated, now stands to his benefit at the sum of $50,000.  In evidence before the court it became apparent that the husband received a first payment when he first left the (employer omitted) in 1990.  He re-enlisted in 1991 and then when he finally left in 2002 he received another cheque.  The (omitted) funds which, as I understand the husband’s evidence, is held in an (omitted) Bank account is worth as near $50,000 as makes no difference and will be accessible to him at age 55.  It is not, however, superannuation. It is a lump sum available to him shortly (or deferred should he so wish). It will be included in the pool, notwithstanding that some of it clearly accrued before the commencement of the parties’ relationship.

5. The husband as at the date of the marriage had also been classified as 100 percent disabled due to a number of substantial injuries sustained in the course of (omitted) duty.  This entitled him to a DVI pension of approximately $600 per fortnight.  As at the date of his trial affidavit the husband valued this sum on a net basis as $11,521 per annum. 

6. It does not seem to be in issue that at the time of the marriage the wife had little in the way of assets. 

7. From the husband’s trial affidavit it is apparent that there were a number of separations from time to time.  At paragraph 25 the husband deposed to his being posted to (omitted) at (omitted), New South Wales in December 1997 and the fact that the wife resided with the children in (omitted), Victoria.  This appears to have continued until May 1999 when the parties recommenced living together (see paragraph 28 of the trial affidavit). 

8. A further 10 months separation apparently took place when the husband was posted to (omitted) in 2001 to 2002 (see paragraphs 31-32 of the trial affidavit).

9. In both his affidavit material and in his evidence-in-chief and, indeed, in his case outline, the husband deposed that he was, at least, an equal performer of household duties. Indeed, in his case outline he denied that the wife was X’s primary carer, essentially because she worked nightshift.

10. When it was put to the husband in cross-examination that the marriage was a traditional one in which he worked and made the money and the wife stayed at home and looked after the family, he denied this.  He denied that she did all the cooking but conceded she had cooked most of the meals.  He denied that the wife did all the housework although his claims appeared to centre on the fact that the wife did not wish to take care of his uniform (he asserted without contradiction that the wife did not like involvement with the (employer omitted)).

11. The husband had laid particular emphasis on the fact that the former matrimonial home was bought with the assistance of the (omitted) Defence House Ownership Assistance Scheme (“DHOAS”).  How this actually operated is not easy to ascertain either from the affidavit material or from the evidence-in-chief.  As best I understand it, the Department of Defence makes available what the husband described in evidence as housing opportunities.  Approximately $80,000 worth of funds is available to start a party off, so to speak.  Exhibit M3 to the husband’s trial affidavit suggests a loan of $80,000 on reduced interest rates. The evidence given by the husband appeared to suggest, however, that what happens is that interest, whether real or notional, from this sum is credited towards the payment of the ongoing mortgage.  There is little doubt, and I am prepared to accept for these purposes, that this was advantageous to the parties in the purchase of their home.

12. Furthermore, it is a fact that the husband contributed the entirety of the substantial deposit on the home of approximately $70,000.

13. The wife was not actually cross-examined about her affidavit evidence to the effect that she was, indeed, the primary homemaker and carer of the children.  In these circumstances, and noting that X has ended up living with her alone, the assertion by the wife that she was X and the other childrens’ primary carer is, in my view, made out.  As I find, this was, indeed, what might be described as a traditional old-fashioned marriage in which the husband made the money and the wife looked after the home and children.  There were, of course, qualifications to that generalisation.  The husband undoubtedly provided some measure of childcare and must have cooked some meals from time to time.  Correspondingly, the wife was able to work during periods of the relationship also.  But, quite clearly, there were extended periods, on the husband’s own case, when the parties were not living together and it must necessarily have followed that the children, who were living with the wife, were looked after by her and she preserved the home.

14. When one comes to the issue that has so agitated the husband, whose demeanour and style suggests a very considerable rigidity of approach, as to whether separation took place in 2007 or 2014, I note that, at paragraph 45 of his trial affidavit, the husband deposed:

    “From when we recommenced our relationship to the end of 2006.”

    And, at paragraph 47:

    “During the time the respondent lived with the boys in (omitted), I paid for some, but not all of the rent. “

15. At paragraph 49, the husband deposed:

    “At the end of 2007, the respondent advised me that she wished to resume our relationship.  She moved, with the boys, back to the Property H property.”

16. At paragraph 57, the husband deposed:

    “Only a few months after I had refinanced the home, the respondent told me that she no longer wanted me to live in the home. From November and December 2008, I lived in the (employer omitted) and (omitted) accommodation.  From January 2009 to November 2010, I lived in rental accommodation at (omitted).”

17. At paragraph 60 of the trial affidavit, the husband deposed:

    “In November 2010, I moved back to the home at Property H.  I continued to sleep in the shed and kept my clothing there.”

18. Notwithstanding this, however, the husband deposed (and he was not cross-examined) that he would continue to eat dinner in the house after November 2007 and he continued to pay the mortgage each fortnight, nearly all utilities and for substantial other work (see paragraphs 61 to 62 of the trial affidavit).

19. In paragraph 71 of his trial affidavit, it is apparent that the husband concedes that, from 2007 onwards, the parties had separate financial arrangements and that the wife claimed Centrelink benefits as a single person.  Notwithstanding this, however, the husband continued to pay the mortgage right through to 2014.

20. It is also clear that, in 2012, the husband and wife jointly borrowed $71,000 (husband’s version) or, in February 2013, $80,000 (wife’s version) to consolidate credit card debts apparently substantially incurred by the wife.  I note that the wife received an inheritance on 3 December 2013 of $62,150 which appears to have been dissipated on household expenses with no particularly significant material outcome.

21. The above represents what, on any of the view of the matter, is a somewhat disjointed or higgledy-piggledy description of the salient disputes between the parties.  I have already made it clear that overall I accept that both of these parties contributed as best they could to the fortunes of the family, both by work (more particularly the husband) and by contributions to the running of the household and care of the children (more particularly the wife). 

22. One issue that is not necessary to deal with at any great length, although very understandably it deeply exercised the parties, was the extent of family violence in the case.  The wife alleges and the husband vividly denies any such violence, although, I note, from exhibit A2, the husband appears to have been found guilty with no conviction recorded, on 30 June 2015.  The wife was cross-examined by the husband about alleged assaults and her answers were given with conviction.  Nonetheless, counsel has not, at any point, sought to raise a Kennon case on her behalf.  Given that is so and without in any way seeking to diminish the significance and import of family violence of any sort, it is not necessary for the Court to express any concluded view as to the extent of family violence between the parties.

1. While the husband was fervent in his position that the parties did not finally separate until 2014, I accept the submission from counsel for the wife that the precise duration of the marriage is probably not of any great significance.  Whether the parties separated in 2007 or 2014, it was a relatively lengthy marriage.  It was plainly marked by periods of upheaval and separation, which I have extracted from the husband’s own material above.

2. The reason why the date of final separation is, perhaps, even less significant than it would otherwise be is that it is apparent, from what the husband says about the numerous payments he continued to make after 2008, that although the parties did not commingle their finances, he nonetheless continued to contribute to the family as though the parties were living together.  He made substantial payments, on any view of the matter, right up until 2014, which were very clearly to the benefit of the wife and such of the children as were still living with her at the time, including, most particularly, X.

3. The husband’s two Armed Forces pensions were of course already substantially accrued by the husband before the marriage took place but they are not available for division.  In 2002, the husband’s contribution of $70,000 towards the deposit for the matrimonial home was of course important in the purchase of the only really substantial asset they now possess.  This was further assisted by the DHOAS loan, to which the husband referred.  Nonetheless, all of this took place a long time ago in the context of a lengthy marriage.

4. It is, of course, well recognised that the wife’s contribution as homemaker and parent is to be acknowledged in a substantial and not an insignificant way (see Mallet v Mallet (1984) 156 CLR 605). Given the length of the marriage (on either version of its duration) and notwithstanding the size of the husband’s earlier contributions, in all the circumstances, I would assess the parties’ contributions as equal.

Future needs

1. The husband has an income of $78,022 per annum (see paragraph 108 of his trial affidavit).  He additionally has two pensions, worth $11,521 and $17,525.82 annually, giving a total income of over $107,000 a year.  That, however, is not a wholly realistic figure, because in excess of $29,000 of that income is net of tax.

2. The wife, by way of contrast, has only very modest income (described as a gross annual income of potentially $50,419, see page 8 of wife’s Case Outline).  She also receives a carer’s allowance of $62 a week in respect of X.

3. At this stage, it is perhaps appropriate to say a brief further word about the husband’s repeated requests, both in his materials and on the day of trial to adjourn to effect further discovery from Centrelink.  The husband’s reasons for seeking that information are set out in his materials and most particularly at paragraph 9 of his affidavit, filed 30 May 2016.  The material which he described as “seminal to some of the issues in dispute” was intended to address evidence of what the respondent had said to a third party as to the date of separation and evidence of income received from Centrelink during the period 2007 and 2014 for the benefit of the child X.

4. In dealing with the history of the matter already under the contribution issues, I hope I have made it plain that the question of the date of separation simply does not have the significance that the husband thought it had.  Likewise, given that he himself conceded the wife was separated from him for periods of time and claimed Centrelink, the utility of such more detailed information is readily apparent as useless. 

5. The income, however, suggested by the wife’s Case Outline is illusory.  She cannot work full time.  She has X to look after and always will.  The materials suggested X will be living with the wife for the foreseeable future and will always be a cost to her given the scope of the carer’s benefit.

6. Although the husband is in poor health and says he will not be able to work for much more than five more years, he will have available to him shortly, it would appear, the whole of the (omitted) funds and likely when he turns 60 (this was the best estimate he could give and it is consistent with superannuation law generally) could access his (omitted) pension.

7. The wife does not so far as the material suggests suffer any significant health difficulties other than being treated for depression. 

8. Given the fact that the husband has and will have for at least, it seems, another five years an earning capacity to all effects and purposes likely three times greater than that of the wife and given that she will be looking after X on an ongoing indefinite basis, in my opinion, there ought be a five per cent adjustment in favour of the wife in respect of future needs as she seeks.

Superannuation

1. The wife seeks that there be an equalisation of the parties’ superannuation and the husband, as earlier indicated, seeks a 60/40 split in his favour.  Nothing was articulated by the husband as to why a 60/40 split in his favour would be appropriate.  In truth, little was said by counsel for the wife in this regard either.  It should be noted that the pension in respect of which the wife seeks a splitting order is a public service pension, all of which or almost all of which accrued during the relationship.  It is not clear how much superannuation the wife had at the commencement of the relationship.

2. In my opinion, the matters which move to a conclusion that there was an equality of contribution between the parties during the marriage lead inexorably to the conclusion that there ought be a splitting order made to equalise the parties’ superannuation accrued during that time.

3. It should be further noted that all parties proceeded on the express understanding clarified by the court that the husband’s DFRDB and disability pensions and (omitted) funds were not to be treated as assets in the pool but rather treated as an income stream.  Although there may be some difficulty with that approach, in the light of past authorities, I am satisfied that it is a just and equitable approach to the income stream and (omitted) funds that the husband has available to him.  There will accordingly be an order that the superannuation be adjusted to produce an equality of outcome between the husband’s (omitted) superannuation and the wife’s (omitted) account. 

Just and Equitable

1. This is an unusual case with an unusual set of facts and circumstances.  Even when he retires, the husband will have almost $30,000 in tax-exempt income together with whatever he chooses to do with his $50,000 in the (omitted) fund and what remains of his (omitted) and whatever his (omitted) superannuation is then worth.  I note that he has five years of further contributions in which to have the (omitted) fund appreciate. 

2. In all the circumstances, I think the split of non-superannuation assets of 55/45 in favour of the wife is appropriate and the equalisation of the superannuation is appropriate.  I should make it clear that in regarding the overall settlement, I have had regard to both of these distinct aspects of the outcome. 

3. It seems to me highly possible that neither party will be able to retain the family home.  Nonetheless, I have prepared orders requiring the husband to pay out to the wife her share of the matrimonial pool with default orders for sale of the home in the event that he is unable to refinance.  The wife has not suggested that she will be able to refinance the home and therefore, I have not contemplated that possibility. 

I certify that the preceding fifty-one (51) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Date: 10 August 2016