MM & DM - [2005] FMCAfam 355

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MM & DM

[2005] FMCAfam 355

FAMILY LAW – Property – whether accrued annual and long service leave is an asset or financial resource – superannuation – where superannuation comprises bulk of the matrimonial asset pool – post Coghlan preferred approach is two asset pool – future needs – fourth step – splitting order made – operative date is date of valuation.

Family Law Act 1975, ss.75, 79
Family Law Superannuation Regulations 2001
Child Support (Assessment) Act 1989

Whitehead (1979) FLC 90-673
In the Marriage of Harrison (1996) FLC 92-682
Farmer & Bramley (2000) FLC 93-060
Querasimu (1999) FamCA 1314
Wilkinson [2005] FamCA 430
Tomasetti (2000) FLC 93-023
In the Marriage of Lee Steere and Lee Steere (1985) FLC 91-626
In the Marriage of Ferraro (1993) FLC 92-335
In the Marriage of Clauson (1995) FLC 92-595
Russell v Russell (1999) FLC 92-877
Coghlan (2005) FamCA 429
Ilett and Ilett [2005] FamCA 432
Gray and Gray [2005] FamCA 498
Chorn & Hopkins (2004) FLC 93-204
JEL and DDF (2001) FLC 93-075
Phillips (2002) FLC 93-104

Applicant:

Respondent:

File Number:

SYM6655 of 2004

Judgment of:

Ryan FM

Hearing date:

24 June 2005

Delivered at:

Parramatta

Delivered on:

13 July 2005

REPRESENTATION

Applicant:

In person

Counsel for the Respondent:

Mr M. Kearney

Solicitors for the Respondent:

Wood Marshall Williams

ORDERS

In respect of the husband’s interest in TelstraSuper whenever a splittable payment becomes payable in respect of the husband’s interest, the wife shall be entitled to be paid an amount calculated in accordance with the Family Law Superannuation Regulations 2001 using a base amount of $117,963 and the husband’s entitlement is correspondingly reduced.
(a)The operative time is 27 January 2005;
(b)This order has effect from the operative time;
(c)This order binds the trustee of TelstraSuper or trustees from time to time of the fund.
The wife shall, within twenty-one days of the date of these orders, notify in writing the trustees of TelstraSuper of:
(a)The name of the trustee;
(b)The name of the fund; and
(c)The address of the fund which she nominates to receive the base amount.
The husband shall, within seven days of the date of these orders, do all acts and things necessary to serve a copy of these orders upon the trustee of TelstraSuper.
All exhibits tendered in these proceedings shall be returned at the expiration of one calendar month unless an appeal is lodged.
The solicitor who issued any subpoena collects that subpoenaed material and returns it to the owner within seven (7) days.
Subject to any application for costs all outstanding applications are dismissed.
Any costs application shall be made within twenty-one (21) days and listed by arrangement with my Associate.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
Parramatta

SYM6655 of 2004

Applicant

And

Respondent

REASONS FOR JUDGMENT

The proceedings

These are proceedings for the adjustment of property and parenting orders. The parenting orders concern the parties’ three children Sarah (not her real name) born in 1990, Stephanie (not her real name) born in 1993 and Kyle (not his real name) born in 1997. At the start of the hearing the parties agreed on the parenting orders. By consent, the court made orders which essentially provide that the children will continue to reside with their mother and have regular alternate weekend and block school holiday contact with their father.

The applications

MM (“the wife”) started the proceedings when she filed an application for final orders on 24 November 2004. In her affidavit filed 16 June 2005 the wife summarised the orders she seeks as being:
·A splitting order whereby the wife receives 75 per cent of the husband’s Telstra superannuation.
·A lump sum payment of $20,000-30,000.
·That the parties otherwise retain assets in their possession.
DM (“the husband”) filed an amended response on 7 February 2005. In his case outline document, the husband’s counsel sets out the orders his client seeks. Essentially, the husband proposes a split of his interest in TelstraSuper whereby the wife’s entitlement is set by a reference to a base amount of $63,684.14. Other than the superannuation split, the husband says the parties should each retain the assets and liabilities in their respective names.
By letter dated 24 May 2005, the trustee confirmed that it will be able to comply with the proposed orders[1]. Thus, the trustee having been afforded procedural fairness the court is able to split the husband’s superannuation.
[1] Exhibit C

The hearing

The applicant wife relied upon the following evidence:
·Her affidavits filed 24 November 2004 and 16 June 2005 and her oral testimony.
·Her financial statement filed 24 November 2004.
The respondent husband relied upon the following evidence:
·His affidavit filed 7 June 2005 and his oral testimony.
·His financial statement filed 7 June 2005.
·Affidavit of TC filed 7 June 2005. This witness was not cross-examined and I accept her evidence.
Both parties tendered documents which became exhibits.
As indicated earlier, during opening addresses, the parties reached agreement in relation to parenting matters. The orders agreed are set out below:
1. The children of the parties, Sarah born in 1990, Stephanie born in 1993 and Kyle born in 1997 reside with the wife.
2. The husband have contact with the children as follows:
(a)Each alternate weekend from after school Friday at 4 pm to Sunday at 7 pm provided however if Sarah is in permanent weekend employment then the husband will take her to and from her place of employment during contact.
(b)One half of each shorter school holiday period being the first half of school holidays for terms 1, 2, and 3.
(c)For a total period of fourteen (14) days commencing
10 am 27 December until an agreed time on New Years Eve and commencing again 10 am 2 January.
(d)Telephone contact every Tuesday and Thursday between 3 pm and 5 pm. The wife shall ensure the children are available until 3.30 pm at home. If the father calls after 3.30 pm and the children are unavailable, the mother shall ensure the children shall return the father’s call when they return home.

The issues

The principal issues raised in these proceedings are:
·Whether having used his long service and annual leave entitlement since separation, the value of the husband’s leave at the date of hearing should be notionally added back.
·As the primary asset comprises superannuation which is not payable for many years, whether the wife should receive any s.75(2) adjustment.
·The nature of the husband’s interest in a home purchased with his current partner post separation.

Short history

The wife was born in 1966 and is 39 years old.
The husband was born in 1967 and is 37 years old.
The parties married in 1989. They did not cohabit prior to their marriage.
They have the three children to whom I have already made reference.
The parties separated on 2 April 2002. Since separation the wife and children have remained in the parties rented home.
On 5 November 2004 the marriage was dissolved, which decree became absolute one month later.
On 24 November 2004 the wife started these proceedings.

Important events

During opening addresses the parties agreed that as at the date of separation the court would find that their contributions are equal. Thus, factual disputes concerning the acquisition and disposition of a home, financial and non-financial contributions, including as home maker and parent prior to separation do not require adjudication. Having considered the affidavit material, I agree that the parties’ assessment that their contributions are equal as at the date of separation is proper. However, in order to evaluate post-separation contributions and determine what adjustment, if any, is warranted pursuant to s.75(2) of The Family Law Act 1975 it is necessary to consider some key elements of the marriage prior to separation.
When the parties commenced cohabitation the husband was employed by Telstra Australia earning approximately $25,000-26,000 per annum. Throughout the marriage he worked full time with Telstra, where he is currently employed. The wife worked in a shoe store at Penrith as a buyer’s assistant. Other than for short periods at the time of Sarah and Stephanie’s birth, the wife worked full time until Stephanie was 2 years old. She left the shoe store and obtained a position as a goods inwards manager and also merchandiser with Arnott’s. The wife stopped paid employment following Kyle’s birth. She has not worked in paid employment since. When the wife gave up full time employment she was earning approximately $28,000 per annum.
Shortly prior to their marriage, the parties purchased a home $93,000. They borrowed $83,000 from Home Fund in order to complete the purchase. The home fund mortgage provided that loan repayments increased with upward movements in the consumer price index. By mid-1995, primarily through increased periodic instalments the Home Fund loan had increased to approximately $120,000. The parties sold the home for $95,000 in mid-1995. After settlement, the parties leased the property from the purchaser. The lease back arrangement continued for two years.
Following the sale the parties had a mortgage deficit of $25,000. To discharge this mortgage, the husband obtained a loan through Endeavour Credit Union, the repayments for which were approximately $500 per month.
In July 1997 the husband purchased 2,000 Telstra shares via an employee share buy back scheme. In addition, his employers allocated him 500 shares. The initial share loan was approximately $6,500. Whilst the husband owned these shares, dividends were applied towards the interest free loan. In about July 1999 the husband purchased 400 Telstra II shares, again using a Telstra employee share buy back scheme. The shares were purchased at $5.70 each.
In 1998, the wife’s parents purchased an investment property. From that time the parties tenanted the property, paying $200 per week. This is where the wife and children continue to reside.
By October 2001, the Endeavour Credit Union personal loan had a small outstanding balance. The parties increased the husband’s loan to $12,500, using the funds raised to purchase a 19 foot half cabin runabout boat for approximately $6,000 and the balance for furniture and household goods.
At separation the parties’ assets, liabilities and financial resources were as follows:
Assets and financial resources
·2,005 Telstra TI shares.
·400 Telstra II shares.
·Contents of former matrimonial home.
·Boat $6,000.
·Husband’s superannuation $106,558 (agreed).[2]
·Wife’s superannuation approximately $6,000.
·Husband’s accrued long service and annual leave.
[2] Exhibit B
Liabilities.
·Endeavour Credit Union account $12,500.
·Telstra T1 employee loan.
·Telstra II employee loan
The wife’s superannuation entitlement was established before she stopped work. Her AMP statement[3] shows that her AMP plan increased by $199.85 in the 2003/2004 financial year. Working backwards, as a rough guide the value of her plan as at separation was in the vicinity of $6,000.
[3] Exhibit F
At separation the husband took his personal possessions, but nothing of value from the home. By agreement he assumed responsibility for the Endeavour Credit Union debt.
By agreement the wife retained the contents of the home and the boat. The parties agreed the wife would sell their boat and use its sale proceeds to buy a car. As agreed, the wife sold the boat and purchased a Commodore motor vehicle. On 27 December 2004 the wife traded in the Commodore and purchased a Camry for $24,000. The wife received $2000 trade in and her parents advanced $22,000 in order to complete the purchase. In relation to this loan the wife repays her parents $50 per month. Other than the household furniture and the boat, at separation the wife also had modest superannuation entitlements. Although these are not disclosed in her financial statement, I accept the wife’s evidence that she provided these details to her former solicitor and that their omission from the wife’s financial statement is an oversight.
In early 2003 the husband moved in with his girlfriend, TC and her daughter.
In mid-2003 the husband sold the Telstra T1 shares for $11,800. From the sale proceeds, he paid out the associated employee loan which was approximately $4,200, the Endeavour Credit Union loan, approximately $6,000 and $2,500 child support arrears. The balance paid out capital gains tax levied on the sale.
On 13 February 2004, the husband and TC purchased a property in Morning Bay for $475,000. Title to the property is structured so that TC owns two-thirds and the husband one-third as tenants in common. TC withdrew $157,356 from her Bendigo Bank term deposit and borrowed $12,166 from her father, which funds she applied towards the purchase of the property, being deposit, stamp duty and associated acquisition costs. Concerning acquisition costs these were paid by TC alone. The husband and TC borrowed $323,000 from Perpetual Trustee of Australia Limited in order to complete the purchase. The husband and TC allege the husband holds his one-third interest in the Morning Bay property on trust for TC. The husband, TC and her daughter Rebekah (not her real name) live in the Morning Bay property. The husband pays $252 per week on the mortgage.
After a hiatus in contact the husband resumed overnight contact to the children in May 2004. For reasons that were not explored, the wife refused the husband overnight contact to the children from February 2003. Since mid 2004 the husband has exercised contact to the children each alternate weekend, for one week in the short school holidays and two weeks at Christmas time.
On 3 June 2004 the husband’s son by TC was born. TC elected to return to work after her maternity leave expired. In July 2004 the husband gave notice to Telstra that he would take his long service leave entitlements commencing at the end of 2004. The husband commenced long service leave in late 2004 and has been on paid leave since. He has exhausted his long service leave entitlement and has only 1.11 weeks annual leave remaining. Having exhausted his long service and annual leave entitlements, the husband will shortly return to work full time with Telstra.

Relevant law

The approach to the determination of an application under s.79 is well established by authority In the Marriage of Lee Steere and Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clauson (1995) FLC 92-595 the process ordinarily involves a multiple part procedure. Firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing. Secondly, evaluating the contributions made by the parties as defined in section 79(4)(a) to (c) and the effect of any proposed order upon the earning capacity of either party. I must then evaluate the matters contained in section 75(2) insofar as they are relevant, any other order made under the Act affecting a party or child and any child support under the Child Support (Assessment) Act 1989 that a party to the marriage is to provide, or might be liable to provide in the future, for a child to the marriage.
In determining what order the court should make under section 79, the court must be satisfied in all the circumstances that it is just and equitable to do so [Section 79(2)]. It is the justice and equity of the actual orders that the court must consider. Russell v Russell (1999) FLC 92-877.

Assets, liabilities and financial resources as at the date of the hearing

In Coghlan (2005) FamCA 429 the Full Court discusses the relevant provisions of Part VIIB including the manner in which a court should formulate the asset pool. Specifically, whether the court should effectively adopt a two pools approach, one for s.4(1) property and a separate superannuation pool. Concerning the different approaches, the majority held:
“Nothing we have said in this judgment would prevent a Court in the exercise of its discretion from including a superannuation interest as an item of property in the list of property which is drawn as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. This approach could be adopted where the parties agree that it should be adopted, or where the Court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the Court to conclude that this would be an appropriate approach.
The parties’ contributions to all items on that list (including the superannuation interest) would then be assessed on either a global or an asset by asset basis. It might then be necessary in the s 75(2) context to have regard to the parties’ future superannuation entitlements (having regard of course to any division proposed on the basis of their contributions), with consideration then being given to the overall justice and equity of any proposed award or order (including any proposed splitting order). Indeed, this is the approach which the Full Court has used on its re-exercise of the trial Judge’s discretion in Ilett and Ilett 2005 FamCA 432 (which will be delivered contemporaneously with the decision in this case).
However, given the conclusions we have reached above, we consider that the preferred approach to the determination of property settlement cases must be to prepare in addition to the list of items of property (which would clearly fall within the definition of that term in s 4(1)), a separate list containing any superannuation interest or interests (valued according to the Regulations if a splitting order is sought in any application before the Court, or if no such order is sought, valued either according to the Regulations or otherwise). This of course is the approach which the trial Judge adopted in this case.
Then for the reasons we earlier gave, whether or not a splitting order is sought on either party’s application, the parties’ contributions to both the property (as defined in s 4(1)) and also to the superannuation interests should be assessed. The other factors in s 79(4)(d), (e), (f) and (g) would then need to be considered. Specifically in the context of s 79(4)(e), that is the s 75(2) factors, any division of the property (as defined in s 4(1)) and any “division” of any superannuation interest (in the sense of an allocation of the base amount) based respectively on the assessments of the parties’ contributions to the property and to any superannuation interest, would then be considered. Similarly, the parties’ future superannuation prospects (be they in capital or income form) would also need to be considered. The overall justice and equity of the ultimate award (including any proposed splitting order or the need for such an order) would then be considered.”
The parties agree on the value of most of their assets and liabilities. As the key asset is the husband’s superannuation this will be dealt with as a discrete asset pool.
I find that the matrimonial assets, liabilities and financial resources as at the date of hearing are set out in the tables below:

Non superannuation assets as at the date of the hearing	$
Husband’s 1/3 interest in the Morning Bay property	NIL
400 Telstra II shares (H) (Agreed)	2,032[4]
Cash at bank (W) (Agreed)	40
Cash at bank (H) (Agreed)	800
Furniture and contents, former matrimonial home (J) (Agreed)	4,485
Total non superannuation assets	7,357
Liabilities as at the date of hearing
Telstra 11 debt (H)	2,570
Total liabilities	2,570
Net non superannuation assets	4,787
Superannuation assets
Telstra superannuation (H) (Agreed)	159,210.35[5]
Wife’s superannuation (Agreed)	6,589[6]
Total superannuation assets	166,069.35
TOTAL ASSETS	170,856.35

[4] Calculated at $5.08, being current market value close of trade 22 June 2005

[5] Valued as at 27/01/2005

[6] Exhibit F

There are a number of findings which require explanation. It was the wife’s contention that the court would notionally add back the husband’s long service leave and annual leave held at separation. During their marriage the parties agreed that the husband would maximise his long service leave entitlement and eventually take his entitlements as a lump sum. With this lump sum the parties hoped to purchase a home, with at least a sizeable deposit. Thus, the wife says she should have half of the accrued long service and annual leave entitlement. Apparently the wife believes the husband is entitled to paid paternity leave for the same duration taken as annual and long service leave. While the husband agrees he is entitled to paternity leave, paternity leave is unpaid. I accept he was not in a financial position to take unpaid leave. If the wife wanted to prove the husband was entitled to paid paternity leave she needed to produce evidence to this effect, which she failed to do. This issue arose in Whitehead (1979) FLC 90-673. Baker J concluded that accrued long service leave is a financial resource, not an asset. However, a long service leave entitlement will count as property where the employee has already been paid a capital sum in lieu of the entitlement. See In the Marriage of Harrison (1996) FLC 92-682. This means that at separation the husband’s accrued long service leave entitlement was a financial resource, not an asset. The husband did not take his long service leave as a capital sum. Indeed, there is insufficient evidence that this option was even available. Had it been available, the husband’s decision to take accrued leave entitlements so that he could stay at home caring for an infant child is reasonable. Similar considerations apply to the husband’s accrued annual leave. I do not have evidence of the husband’s award or workplace agreement or any relevant leave legislation. Usually annual leave is paid when it is taken as leave or upon resignation. Without clear evidence the husband was entitled to cash in his annual leave without taking leave the wife’s claim this should be treated as an asset and notionally added back fails. Even if is was an asset at separation for the same reasons I am satisfied the husband acted reasonably taking long service leave I accept he acted reasonably taking accrued annual leave. Apart from other considerations, rather than take leave without pay or half pay, by taking long service and annual leave at the full rate, the husband was able to meet his continuing child support obligations.
Although she was available for cross-examination the wife elected not to cross examine TC. Thus the husband’s and TC’s evidence concerning a resulting trust is unchallenged. The husband’s approach is consistent with the Full Court’s unreported decision in Gray and Gray [2005] FamCA 498. On this basis I am satisfied the husband holds his one-third interest on trust for TC and that he has no beneficial interest in the property. I agree with the husband’s counsel that this means the court will not take the husband’s joint and several liability for the $333,000 Perpetual Trustee mortgage into account in determining the asset pool.
The husband claimed the court would notionally add back the value of the wife’s Commodore acquired using the boat sale proceeds. In Chorn & Hopkins (2004) FLC 93-204 the Full Court discusses, “add backs” of funds expended after separation. In summary the Full Court concluded monies reasonably disposed by a party in the conduct of their post-separation lives should not usually be added back. The wife needed a car in order to transport the parties children and her use of the sale proceeds to do so is reasonable. Given the wife’s income and her overall financial situation I am not satisfied these funds should be added back.
Neither party contends the wife’s Camry worth $24,000 nor the associated $22,000 loan from her parents should be included. I agree.

Section 79(4) contributions and other factors

Section 79(4) of the Act requires that the court looks at the entirety of the contributions, both financial and non-financial to the welfare of the family, as well as the acquisition, conservation and improvement of those assets. Contributions are not required to be tied to the acquisition, conservation or improvement of a particular asset and are to be taken into account generally as contributions in a total sense. Farmer & Bramley (2000) FLC 93-060, Querasimu (1999) FamCA 1314.
Because the parties separated three years ago post separation contributions are unusually significant. In this context there are two primary issues. These are growth in the husband’s superannuation and the wife’s contribution to the welfare of the family, as homemaker and parent.
The husband’s superannuation interest commenced on 10 December 1990[7]. Since separation his superannuation interest has grown from $106,558 to $159,210.35. Generally, the accepted approach to superannuation contributions during cohabitation is that the non-employee spouse is recognised as making an equal contribution to the acquisition and development of superannuation that accrued during cohabitation. See Hauff (1986) FLC 91-747. Since separation the husband has continued his superannuation contributions via his employer’s contributions. The issue is whether the wife should be credited with making any contribution to its increase. Superannuation has long been regarded as a joint venture whereby parties make provision for retirement income, often using only one spouse’s superannuation scheme to do so. Financial contributions to superannuation are usually made directly by the employee spouse and indirectly by the non-employee spouse. For example, by contributing to the employee spouse’s capacity to pursue employment or co-operating in a financial venture which diverts family income into superannuation the non-employee spouse also contributes. In most circumstances this type of indirect contribution ceases on separation. However, it would be wrong to ignore that most superannuation schemes provide returns calculated by reference to the entire capital sum then invested. Depending on prevailing market conditions there are positive or negative returns. In favourable markets the annual return will reflect growth on the entire sum. It would be inconceivable that if poor market conditions resulted in a fall in the fund’s value, the fall would be ignored when determining the asset pool. That is, the amount held at separation notionally added back. Or reflect adversely on the spouse employee, for example as a negative s.75(2)(o) factor. It follows where at separation a non-employee spouse has contributed to the capital sum held in superannuation, and the fund continues to grow, their contribution continues after separation, albeit in most circumstances to a lesser degree than pre-separation. This is because commonly the most significant contributions will be those made directly by the employee spouse’s periodic superannuation payments. Thus while I am satisfied the husband made the larger post separation contribution to the increase in his Telstra superannuation fund, the wife also contributed, albeit to a lesser degree.
[7] Exhibit A
Neither party claims any relevant post separation s.79(4)(b) contributions.
The wife’s post separation contribution to the welfare of the family is important. Since separation the wife has continued her full time role as parent and home maker. The children live with her, and other than when they are with their father on contact she is fully responsible for their care. This is an onerous responsibility that has been to the children’s advantage. Comparatively, the wife’s post separation contribution to the welfare of the family during cohabitation exceeds the husband’s. In Ferraro (supra) the Full Court highlighted the difficulty involved in evaluating and balancing fundamentally different activities. It also reinforced that the court’s task includes evaluating the significance of the various contributions, the weighting of which is ultimately a matter for the court. The Full Court summarised the situation thus:
“The task of evaluating and comparing the parties' respective contributions where one party has exclusively been the breadwinner and the other exclusively the home maker, is a most difficult one to perform because the evaluation and comparison cannot be conducted on a "level playing field". Firstly, it involves making a crucial comparison between fundamentally different activities, and a comparison between contributions to property and contributions to the welfare of the family. Secondly, whilst a breadwinner contribution can be objectively assessed by reference to such things as that party's employment record, income and the value of the assets acquired, an assessment of the quality of a home maker contribution to the family is vulnerable to subjective value judgments as to what constitutes a competent home maker and parent and can not be readily equated to the value of assets acquired. This leads to a tendency to undervalue the home maker role. However, there are cases where the performance of those roles has what may be described as "special" features about it either adding to or detracting from what may be described as the norm. For example, in relation to the home maker role the evidence may demonstrate the carrying out of responsibilities well beyond the norm as, for example, where the home maker has the responsibility for the home and children entirely or almost entirely without assistance from the other party for long periods or cases such as the care of a handicapped or special needs child. On the other hand, in the breadwinner role the facts may demonstrate an outstanding application of time and energy to producing income and the application of what some of the cases have referred to as "special skills". Within either role there may be cases where the evidence demonstrates a neglect of those responsibilities or a wasting of income or assets.”
The orders I propose will not affect either parties earning capacity.
Following separation the husband initially paid $800 per fortnight child support directly to the wife. After about three months the Child Support Agency (“CSA”) assessed the husband as liable to pay $757 per fortnight. On the wife’s application to change this assessment the CSA increased the husband’s fortnightly payment to $899, which assessment was backdated to July 2002, thereby establishing arrears. Until then the husband’s child support payments were up to date. Following this reassessment the husband applied for a reduction in recognition of his payment for a joint marital debt, namely the credit union debt. On 19 December 2002[8] the CSA issued an assessment reducing the husband’s annual rate of child support for the period 1 August 2002 to 31 May 2004 to $19,763. Since then the husband has paid about $380 per week child support.
[8] Exhibit E
As I have already indicated I must take into account and balance all of the parties contributions. This means that the wife is not required to prove a nexus between her role as a homemaker and parent to the growth in superannuation. It is immediately apparent that this involves quantifying and balancing fundamentally different activities, something that does not lend itself to mathematical precision or a formulaic scheme. Although non financial in nature the wife’s homemaker and parent contributions have been highly valuable to the families welfare. No less than the husband’s commitment to his employment, contact and his contributions towards child support. To a considerable extent post separation these parties continued pre-separation arrangements, with the wife having primary responsibility for the home and children and the husband having primary financial responsibility through paid employment. Although non-financial in nature, case law makes it plain that home maker and parent contributions carries real weight. Three years of this style of contribution, which has consumed the wife’s entire effort when contrasted with the husband’s post separation s.79(4) factors, warrants a small adjustment in the wife’s favour. Taking into account all of the matters referred to, I find therefore that as at the date of hearing the parties’ total contributions and other s.79(4) factors should be assessed as being 52 per cent by the wife and 48 per cent by the husband.

Section 75(2)

Subsection (a). The husband and wife are of similar ages and both enjoy good health. The wife has carpal tunnel syndrome, the effects of which were not elaborated on. None of these matters warrant an adjustment pursuant to the subsection.
Subsection (b). The husband works full time with Telstra as a telecommunications technician. He has worked with Telstra continuously for over twenty years. As at June 2005 the husband’s gross salary is $62,037 per annum or $2,378 per fortnight. Because the husband is on leave, presently, he is not paid lead loading[9]. When the CSA considered the parties’ financial circumstances in December 2002, the husband was earning $67,774 and had the use of a leased company vehicle. It appears whilst on leave the husband receives a base salary, but not other benefits normally received when he is at work. There is no other evidence that would explain the husband’s reduction in salary. I am satisfied that once the husband returns to work his salary package will be at least that which he was paid in December 2002. The husband has the liabilities referred to in his financial statement. Relevantly, he has a significant mortgage debt, repayment of which is gradually establishing an interest in the Morning Bay property. At the time of hearing, the husband’s superannuation interests greatly exceeded the wife’s. By virtue of these proceedings, the husband’s superannuation interest will be substantially reduced and the wife’s interest will exceed his. Prior to separation the husband made additional voluntary contributions to his superannuation. His superior income makes it likely he will again do so. Even if he decides against doing so, the significant growth in his superannuation post separation provides a reasonable indication of his capacity to increase his superannuation entitlements. Thus although the wife’s superannuation interest temporarily exceeds the husband’s he will be able to increase his superannuation at a rate the wife will not be able to match. Presently, the wife does not have paid work and her income comprises child support, family allowance and sole supporting benefits. Added together, her income totals $730 per week. Although the wife hopes to return to paid work within the next six months or so, it is many years since she has worked in the paid work force. Because of the children’s care, she will seek part time work, three days per week during school hours. Even if the wife succeeds in obtaining paid work, her income is unlikely to ever match the husbands. Presently, she does not have an established working relationship with individual employer and her future job security is far more tenuous than the husband’s comparatively secure employment. These factors warrant an adjustment in the wife’s favour pursuant to the subsection.
[9] Exhibit H
Subsection (c). Sarah is 15 years old, Stephanie is 12 years old and Kyle is 7 and a half years old. There is no dispute that the children will continue to live with the wife. But for the care of the children, I am satisfied the wife could immediately seek full time employment, albeit in a relatively unskilled position. Her decision to care for the children subject to returning to paid work part time in the near future is reasonable. Provided Kyle’s arthritis does not deteriorate, by the time he is in high school it would be reasonable for the wife to pursue full time employment, at least during school term. In the Marriage of Clauson (1995) FLC 92-595 the Full Court said, “In addition, it should not be forgotten that the payment of child support in no way compensates the custodial parent for the loss of career opportunity, lack of employment opportunity and the restriction upon an individual lifestyle which the obligation to care for children usually entails”. These comments apply to the wife’s circumstances. I am satisfied that as a consequence of the wife’s substantial care of the children there should be an adjustment in her favour pursuant to the subsection.
Subsection (d). The parties’ expenses are identified in their financial statements. Excluding child support, the husband’s income exceeds his personal expenses whilst simultaneously enabling him to maintain a reasonable living standard. The gap between his income and expenses widens favourably when the husband returns to work. After paying her personal expenditure, the wife has approximately $200 per week available for food, clothing and other non-fixed expenses. Her modest total expenditure reflects her more modest income and standard of living. Only by living frugally is the wife able to meet her and the children’s expenses without going into debt. These matters warrant an adjustment in the wife’s favour.
Subsection (e). Other than the children, the wife has no responsibility to support any other person. The husband and TC are jointly responsible for the support of their infant son. As the husband’s son by TC is only 1 year old, this warrants an adjustment in the husband’s favour pursuant to the subsection.
Subsection (f). The husband does not receive an income tested benefit or payment referred to pursuant to the subsection. The wife receives income tested benefits of approximately $350 per week. Her entitlement is linked to her care of the children and as her income through either paid employment or increased child support improves, her income linked benefits fall. Thus I make an adjustment in the husband’s favour pursuant to the subsection.
Subsection (g). Prior to separation, both parties resided in rented accommodation. The wife continues to reside in rented accommodation. The wife’s standard of living has fallen by virtue of the reduction in her household income. Since separation the husband has acquired legal interest in a home which gives him the amenity and privacy of enjoying his own property. The husband’s standard of living appears to have improved. However, the financial circumstance which has resulted in this differential has already been considered under s.75(2)(b) and (d) and does not warrant further adjustment.
Subsection (h) – (l). These matters do not arise.
Subsection (m). The husband resides with his partner TC. TC is aged 33 years of age and earns $960 per week. Presently, TC works four days per week. In addition to Morning Bay she has a fifty per cent interest in four properties, the total equity in which she estimates to be approximately $77,000. These properties are located in Townsville; Sheldon; Doonan; and Cooroibah. TC’s daughter Rebekah was born in 2000. Rebekah has a severe intellectual disability apparently caused through a rare chromosomal condition. Rebekah attends a special needs school in Roseville. During the week Rebekah resides with the husband and TC and spends some weekends and holidays with her father. Notwithstanding the demands Rebekah’s care places on TC, it is apparent that the financial circumstances of cohabitation with TC enhance the husband’s financial security. Both in the sense of having a partner who contributes to their shared costs of living and whose ownership of property contributes to his security for as long as their relationship continues. It appears that the relationship is secure and both participants appear optimistic about its future. The wife lives alone. These matters warrant an adjustment in the wife’s favour pursuant to the subsection.

Subsection (n). In Wilkinson [2005] FamCA 430, the Full Court allowed an appeal, inter alia, because the trial judge erred by failing to take into account the consequences to the husband’s superannuation of the splitting order the judge was about to make. Reading the judgment as a whole, it appears that the Full Court was not unduly concerned by which subsection this issue is considered. While this issue might previously have been considered the domain of s.75(2)(n), it now appears possible to consider it under a number of different subsections. The important issue is that the effect of the proposed orders is taken into account, but not double counted. As I have already taken into account, the changes to the parties’ superannuation assets by virtue of the orders I will make, no further order is appropriate under this subsection.
Subsection (na). As I have earlier found the husband pays $380 per week child support. Since separation, the husband has reliably paid child support and I am satisfied he will continue to do so. Although I am critical of his decision to obtain a reduction in child support by virtue of paying a joint matrimonial liability and then using assets in which the wife had an interest in order to pay out that liability, this appears to have been an aberration and a step taken when the husband was trying to re-establish himself. As a salaried employee, the husband’s capacity to avoid child support, if he was motivated to try and do so, is extremely limited. The husband has demonstrated a real commitment to his employer and it is unlikely that he would abandon his employment in order to reduce child support. Thus, I am satisfied that the husband will pay considerable child support for the next decade. As a consequence, I am satisfied that there should be an adjustment in the husband’s favour pursuant to the subsection.
Subsection (o) and (p). I make no adjustment under these subsections.
Having regard to all of the s.75(2) factors I find it appropriate that there should be an adjustment in the wife’s favour of 23 per cent. This outcome reflects the cumulative outcome of the findings I have made pursuant to s.75(2). See Tomasetti (2000) FLC 93-023. Any lesser outcome given the modest size of the asset pool would be notional.
Plainly, I have rejected the husband’s submission that because the primary assets are superannuation, which cannot be accessed for twenty years or more, no s.75(2) adjustments are appropriate. There is nothing in either s.75(2) or s.79(2) which supports this submission. Although the wife will wait many years in order to access her s.75(2) entitlements, the circumstances of this case warrant adjustment. If Parliament intended a party who establishes future needs to be deprived those entitlements because they will not be able to access the assets for many years, one would expect Parliament to explicitly say so.

Section 79(2) is this a just and equitable outcome?

Because the court must consider the actual orders, not just the percentage distribution justice and equity requires careful consideration of the range of orders available. The court is enjoined to consider the particular circumstances of each case and hence deliver individual justice. Thus, in some cases it will be appropriate to order that a party takes their superannuation entitlement via an adjustment to other assets and vice versa.
There are key findings that lead to my comfortable satisfaction that an outcome favourable to the wife 75 per cent compared to the husband’s 25 per cent is just and equitable. Simply put, these include that the parties agree during cohabitation contributions are equal. Subsequently, both parties made real contributions, the husband in the main towards superannuation, through child support and the children’s care during contact. The wife primarily through her continued role as home maker and parent. Section 75(2) factors are particularly important in this case, not only because of the parties’ circumstances but also because of the modest asset pool. The husband has secure, well-paid employment which, when coupled with the financial consequences of cohabitation with TC, means that he can enjoy a reasonable standard of living and has a far more certain financial future than the wife. Although by these proceedings, the wife will have significantly greater superannuation than the husband, he has previously shown a capacity to make voluntary payments to superannuation without undermining his standard of living. The wife has overwhelming responsibility for the children’s care and their future care, coupled with her absence from the paid workforce makes it likely that she will never earn income comparable to that which the husband can produce. When one stands back and considers the parties’ respective financial futures I am comfortably satisfied that the ordered outcome is just and equitable.
Concerning non superannuation assets, by virtue of the orders I will make, the husband will have his Telstra II shares and cash at bank subject to a Telstra II debt. Twenty five per cent of $4,787 (net assets) is $1,196. The husband has net non-superannuation worth $262. Seventy five per cent of $4,787 is $3,590. The wife has the furniture and contents of the former matrimonial home and $40 cash at bank, which total $4,525. Therefore, from the non-superannuation assets, the wife must pay the husband $935. Understandably, given the wife’s parlous financial situation, the husband does not seek a cash adjustment from the non-superannuation assets. The question that must then be answered is whether the wife’s superannuation entitlement should be reduced by this amount. In JEL and DDF (2001) FLC 93-075 Holden and Guest JJ said at 88,332 “This is why the ‘‘fourth step’’, namely whether the result is just and equitable, becomes important. In Clauson and Clauson the Full Court (Barblett DCJ, Fogarty and Mushin JJ) recognised, albeit in a discussion of the s 75(2) factors, that the application of percentages does not necessarily result in a just and equitable result, when it said at 81,911 “There is, we think, at times a tendency to assess s 75(2) factors in percentage terms without considering its real impact, and we think there is legitimacy in the views expressed in more recent times that the Court has tended to operate in this area within artificially delineated boundaries. That is, it appears almost to be inevitable that the s 75(2) factors will be assessed in a range between 10% and 20%. A number of cases will justify an assessment outside those parameters and in any event it is the real impact in money terms which is ultimately the critical issue.”
A practical application of this approach is found in Phillips (2002) FLC 93-104 where the Full Court allowed an appeal because the trial judge focussed on percentage outcomes rather than the overall effect of the orders. In that case the Full Court used s.79(2) to reduce the husband’s entitlement by approximately $10,000. The effect of doing so enabled the wife and children to remain in the family home where they lived after separation. Applying JEL and DDF to this case I am satisfied I should not order the wife to pay the husband the small adjustment from her available assets. She has no savings and would need to either sell furniture which she cannot afford to replace or use income she and the children require for their essential needs. By comparison the amount would have no discernable impact on the husband’s situation. There are two matters which dissuade me from further adjustment against superannuation. Firstly, the amount is so small it will make no difference to the parties’ interest twenty years hence. Secondly, the relevant factor which resulted in the husband’s reduction in child support is the CSA attributed $80 per fortnight or $2,080 per annum as an off-set against the husband’s ongoing child support obligations. This is notwithstanding the husband used joint matrimonial funds to pay out the loan. Thus he received the benefit of approximately 45 fortnights reduced child support. By in effect offsetting the husband’s greater gain against the wife’s small payment, justice and equity is served.
The wife sought the payment of a $20,000 – $30,000 lump sum from the available assets. The inevitable consequence of the wife’s failed attempt to notionally include the husband’s accrued long service and annual leave held at the date of separation as an asset is that this part of her application must fail. This is because a court can only make orders for the adjustment of property that exists, even if only notionally.
The final issue concerns the operative date for the slitting order. In Wilkinson the Full Court held, “We are of the view, at least as presently advised, that the operative date or time should as a general rule be the date of valuation of the interest for the reason that the member’s interest may continue to grow from the date of valuation to the date the orders are made”. In this matter the parties agreed on the value of the husband’s superannuation interest as at the date of hearing. It appears it was calculated by reference to valuation obtained from TelstraSuper calculated as at 27 January 2005[10]. Thus, this will be the operative date for the superannuation splitting order.
[10] Exhibit A
For these reasons I make the orders identified at the start of this judgment.

I certify that the preceding seventy (70) paragraphs are a true copy of the reasons for judgment of Ryan FM

Associate: S. Mashman

Date: 13 July 2005