Moreton and Moreton
[2006] FMCAfam 449
•25 August 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MORETON & MORETON | [2006] FMCAfam 449 |
| FAMILY LAW – Property settlement – previous partial property orders – whether jurisdiction of the Court exhausted in relation to property subject to earlier orders – distinction, if any between partial and interim property orders – factors to consider – effect of actions of both parties subsequent to partial distribution – growth in superannuation entitlements – factors to consider in determining justice and equity. |
| Family Law Act 1975 (Cth), ss.75, 79, 79(2), 79(4)(a)-(c), 79(5), 79(6), 79(7), 80, 80(j), 90MT(1)(a) Child Support (Assessment) Act 1989 |
| In the Marriage of Lee Steere & Lee Steere In the Marriage of Ferraro & Ferraro In the Marriage of Clauson & Clauson Russell v Russell (1999) FLC 92-877 DW & GT (2005) FLC 93-217 Z & Z (2005) FLC 93-241 S & S (2002) FMCA Family 295 Harris & Harris (1993) FLC 92-378 Burridge (1980) FLC 90-902 Bassi and KD Sales Force Specialists Pty Ltd v Maas (1999) FLC 92-867 Taylor and Taylor (1977) FLC 90-226; (1977) 3 Fam. L.R. 11,220 King and King (1977) FLC 90-229; (1977) 3 Fam. L.R. 11,564 Jarrett & Lukosius [2006] FMCAfam 139 |
| Applicant: | MS MORETON |
| Respondent: | MR MORETON |
| File number: | TVM 2224 of 2000 |
| Judgment of: | Coker FM |
| Hearing date: | 8 June 2006 |
| Date of last submission: | 8 June 2006 |
| Delivered at: | Townsville |
| Delivered on: | 25 August 2006 |
REPRESENTATION
| Counsel for the Applicant: | Mrs Pagani |
| Solicitors for the Applicant: | Miller Harris Lawyers |
| Counsel for the Respondent: | Mrs Willis |
| Solicitors for the Respondent: | Mellick Smith & Associates |
ORDERS
That by way of full and final settlement of property as between the husband and the wife:
That pursuant to section 90MT(1)(a) of the Family Law Act 1975 whenever a splittable payment becomes payable in respect of the husband's interest in the Q Super Fund (the fund) the wife shall be entitled to be paid an amount calculated in accordance with part 6(6) of the Family Law (Superannuation) Regulations 2001 using a percentage as at the operative date as per these orders of 43.29 per cent of the superannuation and that there be a corresponding reduction to the entitlement of the person to whom the splittable payment would have been made but for this order.
The operative date for these orders is the date being 14 business days after the date upon which a sealed copy of these orders are served upon the trustee of the fund.
That the wife indemnify the husband in respect of any superannuation surcharges which he may be liable upon his retirement to the extent that surcharge relates to superannuation interests received by the wife.
That paragraphs 1 and 2 of the flagging orders made by this Court on
5 December 2005be vacated.
That all other applications herein before the Court be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Moreton & Moreton is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT TOWNSVILLE |
TVM 2224 of 2000
| MS MORETON |
Applicant
And
| MR MORETON |
Respondent
REASONS FOR JUDGMENT
These proceedings have what could best be described as an interesting history. The original application filed by Ms Moreton whom I shall refer to as the wife was filed in the Family Court at Cairns on
18 January 2000. It sought orders in relation to property settlement in these terms:
1.Such orders as and by way of settlement of property as may be further particularised by the Wife upon the Husband filing material in this Honourable Court in accordance with the Rules of the Family Court and upon full and complete discovery and any other interlocutory steps being completed prior to the hearing of this application.
2.That unless otherwise specified in these orders and except for the purposes of enforcing the payment of any money due under these or any subsequent orders:
(a)Each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at this date;
(b)Each party hereby foregoes any claim they may have to any superannuation benefits belonging to or earned by the other;
(c)All insurance policies to become the sole property of the owner named thereunder;
(d)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
3.That if either party refuses or neglect to sign (within 14 days of a written request to do so) any documents necessary to give effect to the terms of these Orders the Registrar of the Family Court of Australia at Townsville is hereby appointed pursuant to the provisions of Section 84 of the Family Law Act to execute such documents on behalf of such party.
4.The husband pay the wife’s costs of and incidental to this application.
The respondent to the application is Mr Moreton, whom I shall refer to as the husband. His response also filed in the Family Court of Australia at Cairns was received on 28 March 2000. The husband in his response sought orders in these terms:
1.That the proceeds of the sale of the former matrimonial residence be disbursed as follows:
(a) $76,000 to the Wife.
(b) The balance to the Husband.
2.That unless otherwise specified in these Orders and except of the purpose of enforcing the payment of any money due under these or any subsequent Orders:
(a) Each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at this date.
(b) Monies standing to the credit of the parties in any joint bank account is to become the property of the Husband.
(c) Each party hereby forgoes any claim they may have to any superannuation benefits or insurance policies belonging to or earned by the other.
(d) Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
The application did not proceed very far in the Family Court of Australia. On the order of the Deputy Registrar, the application was transferred to this Court for determination. It was in fact the case that an application was made for its transfer back to the Family Court, however, on 19 September 2000, that matter was heard and I determined that the application for the transfer of proceedings back to the Family Court of Australia, be dismissed. The matter was then listed for hearing at Cairns on 16 November 2000 for a period of two days.
The parties were, fortunately, able to reach agreement in relation to the settlement of almost all issues outstanding between them. That agreement was encompassed within the terms of an order made by consent on 26 October 2000. The terms of that order were as follows:
That by way of partial property settlement under Part VIII of the Family Law Act:
(1)That the husband and wife shall forthwith direct Messrs Pescott Reaston Solicitors, Cairns to pay from their trust account all monies held to the credit of the husband and the wife (including interest) to Messrs Miller Harris Lawyers.
(2)That upon receipt of such monies referred to in order number 1 hereof Messrs Miller Harris make the following payments:
(a)$8,953.00 to Messrs Farrellys Solicitors on account of payment to:
(i)Queensland Credit Union Account No [5];
(ii)Westpac Banking Corporation on account of bank card no. [5];
(iii)MBF on account of monies owing by the husband in the sum of $953.00.
(3)That upon payment by Miller Harris Lawyers to Farrellys Solicitors in the sum of $8,953.00 as provided for in order number 2 hereof the husband shall forthwith indemnify the wife against all liability arising in relation to the debts specified in order No 2(a)(i) and (ii) hereof.
(4)That upon receipt of monies referred to in Order No 1 hereof Miller Harris Lawyers make the following payments:
(a) the wife’s HECS fees in the sum of $7,433.00;
(b)MBF on account of monies owing by the wife in the sum of $1,254.55.
(5)That upon payment by Miller Harris Lawyers of the amount referred to in Order No 4(a) hereof the wife shall forthwith indemnify the husband against all liability arising in relation to that debt.
(6) That upon payment of the sums Order No 2(a) and 4 hereof the husband and wife will direct Miller Harris Lawyers to pay the balance funds received pursuant to Order No 1 hereof in proportion 67.5% to the wife and 32.5% to the husband.
(7) The husband and the wife shall forthwith sign all necessary documents to withdraw from the Westpac rental account No. [7] in the names of the parties, all monies therein and such monies to be distribute din the following proportions:
(a) 67.5% to the wife; and
(b) 32.5% to the husband.
(8)That the husband and the wife shall forthwith take all action and sign all documents necessary to cancel the joint Westpac Bank Card referred to in Order No 2(a)(ii) hereof and any other joint credit facility of any nature whatsoever.
(9)That the husband and wife be jointly responsible for payment in equal shares of the outstanding amount currently due to Mr C, Orthodontist less any refund from MBF and further be jointly responsible for and make payment of the sum of $132.00 currently owing to MBF on account of [D] Moreton.
(10)That pursuant to Section 79(5) the proceedings in relation to the superannuation entitlements of the husband with Qsuper member no [0] be adjourned until any of the following events occur:
(a) the superannuation vests; or
(b)the husband retires, resigns, his employment is terminated or any other event occurs which results in the husband seeking to access his superannuation fund (“the superannuation fund”); or
(c)the pending superannuation legislation reform under the Family Law Act is passed, whichever occurs first.
(11)That pending the determination of the application for property settlement, the Respondent husband is ordered to notify the Applicant wife or her solicitor:
(a)of his intention to resign from employment, within 7 days of having given his employer notice of his intention to resign; and
(b)of any notice given to his employer of his intention to commute all or part of his pension to a lump sum within 7 days of giving the notice, and that such notice take the form of providing the Applicant wife through her solicitor with a copy of any letter or other communication from the husband to his employer containing such notice.
(12)That should the services of the Respondent husband with the Department of Justice be terminated the Respondent husband supply the wife through her solicitor, within 7 days of its receipt by him, with a copy of any letter or other communication to or from the employer relating to such terminations.
(13)That either party be at liberty to have the matter re-listed for further hearing upon giving 7 days notice in writing to the other party.
(14) That the husband shall be restrained from:
(a)dealing with, receiving or disbursing any funds howsoever received whether by lump sum, pension or otherwise from the Q-Super Defined Benefit Plan without the written consent of the wife or order of this Court;
(b)assigning, transferring, or encumbering his entitlement under the Q-Super Defined Benefit Plan.
(15)That the husband be restrained from directing the Manager/Trustee of the Q-Super Defined Benefit Plan from paying any death benefit to any person other than the husband’s estate.
(16)That liberty be granted to either party to apply upon 48 hours notice in relation to the implementation and facilitation of these orders.
(17)That if either party refuses or neglects to sign (within 14 days of a written request to do so) any documents necessary to give effect to the terms of these Orders the Registrar/Deputy Registrar of the Family Court of Australia at Townsville or Federal Magistrates Court is hereby appointed pursuant to the provisions of Section 84 of the Family Law Act to execute such document son behalf of such party.
(18)That unless otherwise specified in these orders and except of the purposes of enforcing the payment of any money due under these or any subsequent orders:
(a) each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at this date;
(b) all insurance policies to become the sole property of the owner named thereunder;
(c) each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
(19)The husband shall provide a sealed copy of this order to the superannuation scheme Managers/Trustees forthwith upon the making of these orders.
IT IS DIRECTED:
1.That the Minutes of Consent Orders remain on the Court file.
2.That these proceedings be removed from the Active Pending Cases List maintained by the Court.
THE COURT NOTES the parties intend that pursuant to the terms of Section 81 of the Family Law Act 1975 (as amended) these orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.
In particular, that order provided, in order 10 for the adjournment of the proceedings, relating to superannuation entitlements and possible distribution until the happening of one of three certain events.
Those orders were made, as I say, on 26 October 2000. Approximately two years later in December 2002 the superannuation amendments contemplated in order 10(c) were brought into effect. There was, therefore, one of the events contemplated pursuant to the provisions of order 10 of the orders of 26 October 2000. The legislation reforms under the Family Law Act were passed.
It was some two and a half years or more after the amendments were made, that the request was made for the matter to be brought back before this Court. Correspondence was received at the Registry on
30 May 2005and again on 1 June 2005 from Miller Harris Lawyers. The letter of 30 May 2005 provided relevantly, in part, as follows:
We request that this matter be listed for further directions before the Federal Magistrates Court in the next sittings. We have provided notice to the husband.
The letter of 1 June 2005 and the reason for the forwarding of same is unclear. However it refers specifically to the orders of 26 October 2000 and of the various events which might lead to the matter being able to be re-listed and then seeks, pursuant to order 13, that the matter be re-listed for further direction.
The matter then came back before the Court and was the subject of directions and listing. It was also the subject of further dispute and negotiation between the parties. The terms of the proposed settlement was also the subject of variation. A further amendment to the application by the wife was filed on 7 June 2006. The amended application sought orders in the following terms:
11.That the interest of the husband in the Q Super Fund will be split to create a superannuation interest for the wife.
12.That pursuant to section 90MT(1)(a) of the Family Law Act 1975 whenever a splittable payment becomes payable in respect of the husband’s interest in the Q Super Fund (“the Fund”), the wife shall be entitled to be paid an amount calculated in accordance with Part 6 (“6”) of the Family Law (Superannuation) Regulations 2001 using a percentage as at the operative date as per these orders of 43.29% of the superannuation interest and that there be a corresponding reduction to the entitlement of the person to whom the splittable payment would have bee made but for this order.
13.That this order bind the trustee from time to time of the Fund.
14.The operative date of these orders is the date being seven business days after the date upon which a sealed copy of these orders are served upon the trustee of the Fund.
15.That the husband be restrained from giving to the trustees of the Fund binding death benefit nomination in favour of any other person or in any other way deal with his interest in the Fund which would have the effect of reducing the value to the wife of this splitting order made in order 12.
16.That the husband indemnify the wife in respect of any loss the wife suffers as a result of the husband failing to comply with the preceding order.
17.That the husband shall do all things necessary (with the exception of paying any fees or administrative costs), including but not limited to exercising his request pursuant to regulation 7A06(2)2 of the Superannuation Industry (Supervision) 1994 Regulations) for the transfer of 43.29% of the superannuation interest form the Fund to a fund of the wife’s choice.
18.Notwithstanding paragraph 7, the husband indemnify the wife with respect to liability for any superannuation surcharge that he may be able to pay upon his retirement, or any other such time that the surcharge becomes payable.
19.That paragraphs 1 and 2 of the flagging Orders made in this matter on 5 December 2005 be vacated.
20.That the husband pay to the wife the sum of $47,151 within 30 days of the date of these Orders.
An amended response was also filed on 8 June 2006 by the husband. The terms of the amended orders sought by the husband were as follows:
3. That pursuant to Section 90MT(1)(a) of the Family Law Act 1975 whenever a splittable payment becomes payable in respect of the Husband’s interest in the Q Superfund (the Fund), the Wife shall be entitled to be apid an amount calculated in accordanc eiwth Part 6 (6) of the Family Law (Superannation) Regulations 2001 using a percentage as at the operative date as per these Orders of 33.33%, or such other percentage as this Honourable Court may deem fit, of the Superannuation interest and that there be a corresponding reduction to the entitlement of the person to whom the splittable payment would have been made but for this Order.
4. The operative date of these Orders is the date being fourteen (14) business days after the date upon which a sealed copy of these Orders are served upon the Trustee of the Fund;
5. That the Wife indemnify the Husband in respect of any Superannuation surcharges which he may be liable upon his retirement to the extent that surcharge relates to Superannuation interest received by the Wife;
6. That paragraphs 1 and 2 of the Flagging Orders made by this Honourable Court on 05/12/05 be vacated; and
7. That in all other respects the Wife’s Amended Application filed herein on 07/06/06 be dismissed.
In fact, when the matter came on for determination before this Court in Cairns on 8 June 2006, further variation was sought, or at least clarification was sought, by the applicant. The further amended application sought specifically in the amended order 12, that there should be a percentage to be paid to the wife pursuant to the provisions of section 90MT(1)(a) of the Family Law Act 1975 and that that percentage was to be fixed, pursuant to the orders, as 43.29 per cent.
The wife's position at hearing was, in fact, that she sought an amount equivalent to 51.29 per cent and not 43.29 per cent, as set out in the further amended application filed only one day before. The reason for that was explained in submissions made by counsel, for the wife.
The wife also sought an order in relation to the payment of an amount, which it was said should be made available as a result of the failure to consider in the property settlement effected between the parties in 2000. That was the personal injuries claim payments, received by both the husband and the wife. It was contended that there should have been a further amount paid to the wife, taking into consideration the personal injuries claim, and that if calculated appropriately was approximately $29,000 and growth, at a rate of 6.25 per cent for a period of five years and eight months, to the time of trial, would result in an amount equivalent to $47,151.73.
There was apparently an error in calculation which was originally made, which set out the amount sought by the wife in the further amended application as $74,179. No matter what the amount sought in relation to that particular aspect of the matter, the husband's position was simply to say that there was no entitlement in relation to same and that a settlement had been effected between the husband and the wife, in relation to all matrimonial property, other than superannuation entitlements and that, therefore, the position in relation to the personal injuries claim was included within the terms of the settlement effected in October 2000.
It was the subject of significant argument in relation to the proceedings and to a large extent it was the main thrust of the case, as it was heard before me. I was referred, obviously, to the various considerations that must be looked at in relation to a property settlement. In particular, I was directed toward the various considerations that should be looked at in relation to what might be referred to as, a normal property settlement.
The approach to the determination of an application under section 79 is well established by authority, In the Marriage of Lee Steere & Lee Steere; In the Marriage of Ferraro & Ferraro; In the Marriage of Clauson & Clauson, the process ordinarily involves a multiple part procedure. Firstly, identifying the property, liabilities and financial resources of the parties at the time of 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 on the earning capacity of either party.
It is then necessary to evaluate the matters contained in section 75(2), insofar as they are relevant and any other order made under the Act affecting a party or child and any child support under the Child Support (Assessment) Act1989 that a party to the marriage is to provide or might be liable to provide in the future for a child of 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) of the Family Law Act 1975. It is the justice and equity of the actual orders that the Court must consider, Russell & Russell.
Here, there is a very clear deviation between the course that the counsel for the wife and the counsel for the husband says should be followed. There is, pursuant to the orders of 26 October 2000 a settlement which has been effected. It is worded as a partial property settlement under part VIII of the Family Law Act. Section 79(5) of the Family Law Act says the following:
Without limiting the power of any court to grant an adjournment in proceedings under this Act, where, in property settlement proceedings, a court is of the opinion –
(a)That there is likely to be a significant change in the financial circumstances of the parties to the marriage or either of them and that, having regard to the time when that change is likely to take place, it is reasonable to adjourn the proceedings; and
(b) that an order that the court could make with respect to:
(i)the property of the parties to the marriage or either of them; or
(ii)the vested bankruptcy property in relation to a bankrupt party to the marriage; if that significant change in financial circumstances occurs is more likely to do justice as between the parties to the marriage than an order that the court would make immediately with respect to:
(iii)the property of the parties to the marriage or either of them; or
(iv)the vested bankruptcy property in relation to a bankrupt party to the marriage;
the court may, if so requested by either party to the marriage or the relevant bankruptcy trustee (if any), adjourn the proceedings until such time, before the expiration of a period specified by the court, as that party to the marriage or the relevant bankruptcy trustee, as the case may be, applies for the proceedings to be determined, but nothing in this sub-section requires the court to adjourn any proceedings in any particular circumstances.
Section 79(6) is also relevant in relation to what is headed, "Interim Orders". Section 79(6) says the following:
Where a court proposes to adjourn proceedings as provided by sub-section (5), the court may, before so adjourning the proceedings, make such interim order or orders or such other order or orders (if any) as it considers appropriate with respect to:
(a)any of the property of the parties to the marriage or of either of them; or
(b)any of the vested bankruptcy property in relation to a bankrupt party to the marriage.
What needs to be considered in relation to the initial argument in relation to this matter, therefore, is the effect of a partial or interim order, made in the Court. It was contended, strongly, on the part of the wife that recent decisions of the Court lean heavily in favour of the need for there to be a total reconsideration of issues with regard to property settlement, if there has been an act or actions taken by one or both parties, pursuant to some form of agreement, but that the arrangements have not been formalised.
It was contended by counsel for the wife that decisions of the Full Court of the Family Court in DW & GT (2005) FLC 93-217 and Z & Z (2005) FLC 93-241 favoured that approach. Counsel for the husband submitted strongly that it was an incorrect interpretation of the determinations in both DW & GT and Z & Z to suggest that there must automatically be a full reconsideration of all issues in relation to property settlement, if an interim or partial order has been made but, more particularly, that they should be distinguished from a situation which existed as it did in both DW & GT and Z & Z, where orders were not made.
In DW & GT it was clearly the case, that the parties had entered into an agreement in relation to the distribution of property to be effected between them and had acted in relation to some. It was clear that the property settlement which was entered into between the parties was pursuant to an informal agreement. It was clearly the case, that there could not have been a basis upon which the Court would be restrained from a reconsideration of the position in respect of property as between the parties, when simply an informal agreement had been entered into and had been acted upon.
In the appeal in DW & GT, one of the grounds of appeal was that the trial Judge had erred in determining, that it was necessary to consider whether the property division was just and equitable, in light of the law that was in force at the time of the informal agreement which, in that instance, was August 1997. It was submitted that the trial Judge should have considered whether the 1997 agreement was just and equitable by reference to the law that was applicable, at the date of trial. It was accepted by the Court that that clearly was the more appropriate course to have been followed and, whilst the informal agreement may, in some way, have indicated the position that was to be taken in relation to the matter, it was in no way binding upon the parties.
A similar argument was initially put forward in relation to the matter of Z & Z. In that case it was clear that the parties had entered into an agreement and that, in fact, consent orders had been prepared but then had never been submitted. At page 79-991, in a discussion relating to the entering into of the consent agreement but not the making of the orders, it was said as follows:
It was not contended on behalf of the husband that the wife was estopped from commencing proceedings under section 79 because two sets of consent orders executed by her in 1997 were not lodged with the Court. Rather the thrust of the husband's submission is that the trial Judge did not give sufficient weight to the agreement to the parties at that time, particularly having regard to their assets at the date of their separation.
The nub of the submission made on behalf of the wife was contrary to the husband’s assertion that she was to receive, 'the substance of the parties’ property except the superannuation', that in fact, 'the husband hid from the wife property with a value greater than that which she received.
What is clear is that in this matter, whilst the parties had perhaps gone further than an informal agreement, in that they had entered into consent arrangements, it was the case that those orders had never been made by the Court. In other words, there had never been an exercise of the discretion of the Court, in relation to a determination as to whether, pursuant to section 79(2) of the Family Law Act, the arrangements were just and equitable.
In any event, Z & Z is clearly distinguishable from the current circumstances in relation to this matter, because it became abundantly clear in Z & Z that there had been a failure on the part of the husband in that case, to make full and frank disclosure and, as a result of that, there was a very different set of considerations that arose.
As I say, counsel for the husband in this matter strongly submitted to me that the arrangements made in relation to the property of the parties exclusive of superannuation was entire in itself and that the consent orders took into account all matrimonial assets to be divided between the parties, save the husband's superannuation entitlements. This, it was said, is reflected directly in the terms of order 10 of the orders of 26 October 2000.
It was submitted that those orders provided for the assets, totally available for division between the parties as at the date of the order, to be divided on the terms as was set out, in the orders. It is also clear, it is submitted, that the wife, pursuant to those orders, received the bulk of the assets which were available for division at the time, there being a distribution of the most significant assets, being the proceeds of sale of the matrimonial home, 67.5 per cent to the wife and 32.5 per cent to the husband. The wife also received additional payment in relation to reimbursements of certain moneys paid by her and a payment of university HECS fees.
On the part of the wife it was contended that there were, in fact, two matters that remained outstanding for determination, that being the superannuation issue and the issue of personal injuries payments which had not been fully determined between the parties, and which were not included within the orders of 26 October 2000.
I have been considerably assisted in my determination of this particular matter by consideration of the decision of Ryan FM, as she then was, in S & S [2002] FMCAfam 295. In that particular case Ryan FM had cause to turn her mind specifically to the issue of the granting of an adjournment, pursuant to the provisions of section 79(5) and the various considerations that need to be looked at in respect of same.
In that case Ryan FM set out at length the development of the position with regard to the making of interim orders and said, in paragraphs 33 through 36 the following:
Prior to the 1983 amendments to the Family Law Act 1975, Nygh J concluded that there was no power to make an interim property order. See Burridge (1980) FLC 90-902. However, he was satisfied that the court could make “in effect, a permanent order .....limited to a portion of the property”. In 1983 s.79 was substantially amended when s.79(5), (6) and (7) were added. In Harris v Harris (1993) FLC 92-378 the Full Court of the Family Court analysed the meaning of interim and partial property orders. At page 79,929 the Full Court said:
The distinction that Nygh J drew in Burridge between an interim and a partial order appears to be that the interim order is one which operates until the final hearing, but may then be submerged into the final order. Whereas a partial property order complete in itself, but dealing with part only of the property and not intended to be a final determination of the proceedings.
We do not doubt that the Court has power in a proper case in s79 proceedings to make what may be conveniently described as an interim order, that is an order dealing with some of the property of the parties prior to the final hearing. We do not consider that it is necessary to draw a distinction in terminology between an interim order and a partial order.
Harris (supra) was subsequently discussed in Bassi and KD Sales Force Specialists Pty Ltd. The Full Court emphasised that Harris (supra) did not decide that there is no distinction as identified in Burridge (supra) between interim or partial property orders or “that it is inappropriate to draw it in a proper case”. Relevantly the court also held:
The Court’s power, under s79(6), to make property orders where it makes an order under s79(5) adjourning proceedings to await the occurrence of a significant financial event such as the receipt of superannuation, is not confined to making “interim” orders. By that sub-section it may make “such interim order or orders or such other order or orders (if any) as it considers appropriate with respect to any of the property of the parties to the marriage or either of them.
Thus pursuant to s.79(6) a court may make inter alia, either an interim or partial property order. It is worth noting that in Carson when exercising its own discretion on appeal, the Full Court ordered the transfer to the wife of the husband’s interest in the home and release from a mortgage by way of interim partial property adjustment. There the source of power was clearly s.79(6). Both Harris and Bassi (supra) were decided prior to the Family Law Legislation (Superannuation) Amendment Act 2001. Section 5(2) of the Family Law Legislation (Superannuation) Amendment Act 2001 may result in the Full Court giving further consideration to the interim or partial order dichotomy. Ultimately the key difference may be whether the source of power is the PtVIII enabling provisions found in s.80(1)(h) or (k) or alternatively s.79(6). The former is only activated by the exercise of a primary power in PtVIII. Whether the order is an interim or partial order the husband’s counsel submitted, “the exercise of the power should be exercised conservatively. In particular the judge should be satisfied that the remaining property will be adequate to meet the legitimate expectations of both parties at the final hearing, or that the order which is contemplated is capable of being reversed or adjusted if it subsequently considered necessary to do so”. I agree that this reflects the current law.
The nature of the “adjournment” ordered pursuant to s.79(5) has also been the subject of comment by the Full Court. It is not an adjournment in a strictly procedural sense. In Grace and Grace the Full Court said:
…the purpose of s79(5) is to not give rise to an expectation among the parties or the Court that they are concerned with the property available for distribution at the time of the s79(5) application. Rather, the purpose of an order under s79(5) is to defer the step of ascertaining the property pool for distribution to a defined future point in time. See also Martin v Martin.
I have taken the opportunity of the re-reading of two of the cases specifically referred to by Ryan FM. In Harris & Harris (supra) a significant consideration was given to what might be the distinction drawn between what was described as an interim property order and, a partial property order. It is significant and important that the argument which was detailed in Harris & Harris (supra) be included here, in light of the importance of that discussion to the determination of these proceedings.
What the Full Court of the Family Court said in Harris & Harris at pages 79,928 to 79,929 were the following:
His Honour distinguished what he described on the one hand as an “interim property order” from on the other hand a “partial property order”. As to the former, his Honour’s conclusions were expressed on pages 75,678 to 75,679 as follows:
“It must first of all be made clear that sec.80 is not an independent source of power: it only gives the court powers ‘which it may use acting … under sec. 74, 78 or 79 or 83’ per Evatt C.J., Marshall S.J. and McGovern J. in King and King (1977) FLC 90-299 at p. 76,580; (1977) 3 Fam. LR 11,564 at P. 11,567. This means that the court cannot be asked to do anything under sec. 80 which it has no power to do under the substantive provisions of sec. 74, 78 or 79. Thus the court could not by consent make an order under para. (j) which it had no jurisdiction to make in a contested application.
This means that the court cannot make an interim property order under para. (h), i.e. an order altering provisionally the interests of the parties to the property pending the final determination of the matter. For the order, if it is made, must be an order under sec 79 and once it is made it cannot be altered except in the limited circumstances set out in sec. 79A: Taylor and Taylor (1977) FLC 90-226; (1977) 3 Fam. L.R. 11,220. There cannot therefore be such a thing as an ‘interim property order’.”
His Honour then turned to the second aspect namely a “partial property order”:
“It was then argued that the court can make a determinative order under sec. 79 altering the rights of the parties to the fund in question insofar as there did not appear to be a dispute between them, leaving the balance in trust for final determination. In argument, I referred to this approach as a ‘salami order’ whereby the sausage is sliced and distributed to the extent that there are no disputing claims, leaving the fact of the balance to be determined later. A more dignified term may be ‘partial order’. Such orders to my knowledge have been made on occasions by consent, under sec. 80 para. (j). On my interpretation of sec. 80, if such orders cannot be made in a contested case, then they cannot be made by consent either. But obviously the point of jurisdiction is not taken in proceedings ending in consent orders.
Unless there exists a principle in relation to sec. 79 that property applications must be made once and for all, it is in my view possible to make such an order under para. (k), if the justice of the case so requires. The first question therefore is whether the decisions of the Full Court in Taylor and Taylor (1977) FLC 90-226; (1977) 3 Fam. L.R. 11,220 and King and King (1977) FLC 90-229; (1977) 3 Fam. L.R. 11,564 require that a determination under sec. 79 should be made on one single occasion only. In Taylor and Taylor [FLC at p. 76,196; Fam. L.R. at p. 11,232], Asche and Dovey JJ. Held that an order made under sec. 79 can only be set aside in the circumstances set out in sec. 79A. Hence the court had no power to vary such an order. That issue does not arise in the present case: the ‘partial order’ once made will, insofar as it disposes of the moneys in the fund, settle the rights of the parties once and for all, but the balance of the fund remains as yet unaffected by any order under sec. 79.
In King and King [FLC at p. 76,579; Fam. L.R. at P. 11,576], Evatt C.J., Marshall and McGovern JJ. said: ‘Once the property issues between parties have been determined no fresh application can be made under sec. 79 of the Act’. Again that is not the issue here, the same application remains before the court and the court does not purport to deal with the entirety of the property issues before it.
There is nothing in the reasoning of the Full Court in Mullane and Mullane (1980) FLC 90-826; (1980) 5 Fam. L.R. 801 and Maisey and Maisey (1980) FLC 90-864, which take the matter any further. I conclude therefore that there is nothing in sec. 79 which prevents the making of a ‘partial property order’ under para. (k) of sec. 80, if it is necessary to do justice.”
The above passage may lead to uncertainty as to whether his Honour was confining his remarks to cases where “ there did not appear to be a dispute: or where the orders were by consent on the one hand with cases where the orders sought were a matter of contest. However, we do not regard his Honour as having confined himself to the former. In the subsequent passages in his Honour’s judgment he went to consider the dispute between the parties as to whether the order should be made and ultimately made the orders which the wife sought despite the husband’s opposition. In addition the question whether the orders were sought by consent or were opposed does not go to the question of power or jurisdiction, although it may be an important matter on the question of the exercise of the power.
The distinction which Nygh J drew in Burridge between an “interim” and a “partial” order appears to be that an interim order is one which operates until the final hearing but may then be submerged into the final order whereas a partial property order is a property order complete in itself but dealing with part only of the property and not intended to be a final determination of the proceedings.
We do not doubt that the Court has power in a proper case in s. 79 proceedings to make what may be conveniently described as an interim order, that is an order dealing with some of the property of the parties prior to the final hearing. We do not consider that it is necessary to draw a distinction in terminology between an “interim” order and a “partial” order.
As I say, I have also given consideration to the Full Court's determination in Bassi andKD Sales Force Specialists Pty Ltd v Maas (supra), where the Court spoke of the powers under sections 79(6) and 79(7). In that case it was clear that the Court was very much of the view that there was a distinction that could properly be drawn between interim orders, orders or such other order or orders as it considers appropriate. In other words, power was available to deal with the property as it were able to be calculated at one particular time, but that other property should be excluded and determined at a later time, in this instance of course, that being the superannuation entitlements.
I have also been considerably assisted in this matter by the judgment of Federal Magistrate Slack in Jarrett & Lukosius [2006] FMCAfam 139. In that case Federal Magistrate Slack had to consider exactly this point and in relation to same following consideration of both Harris & Harris (supra) and Bassi and KD Sales Force Specialists Pty Ltd v Maas (supra) said:
“The husband contends that pursuant to the provisions of s.79(6), the court has the power to make final partial orders.
If that is correct and as a result I have no power to alter the interests of the parties in the non-superannuation property, then I consider that the exercise of that power to make partial final orders should be done in the clearest terms.”
In this matter the order of 26 October 2000 is termed an order by way of “partial property settlement under Part VIII of the Family Law Act.” It is not headed as an interim order or an order until further order. Counsel for the husband stressed that point in submissions made in relation to the proceedings and strongly submitted, that the percentage distribution effected in relation to property, available at the time of the original orders, were weighted heavily in favour of the wife and, of themselves, gave rise to an inference, that the orders took into consideration all available property, including particularly that which became available as a result of the personal injury actions.
Counsel for the husband also strongly submitted, that the wording of the orders, including the introduction referring to partial property orders, read in conjunction with the provisions of order 10, gave rise to only one possible finding, that being that the only issue remaining for determination was any entitlements in relation to a distribution of superannuation. There is strength in relation to that argument, in relation to these proceedings.
What is clear is that the parties have, to a significant degree, moved on in relation to their lives and have acted in effect to disperse what property was received by them in various ways, which makes any further distribution other than in relation to superannuation, in my view, unwieldy and unrealistic.
It was further contended on the part of the husband, that one of the factors that needed to be looked at in relation to the proceedings was that there had been delay in the bringing of the request for the re-listing of the matter and that, therefore effected the superannuation distribution, that should be effected between the husband and the wife. I should say that I am not in any way enamoured of such a suggestion and, in my view, there has been no untoward delay on the part of the wife in relation to the bringing of the request for further directions and, therefore, the request to bring this matter to final determination.
In any event, both the husband and the wife were in a position where they could have moved in relation to the listing of the proceedings and whilst I see no disadvantage to either party in the delay it is not, something that would, in any event, have affected the determination of the final distribution.
What is clear, however, is that since October 2000 to June 2006, nearly six years, the parties have moved forward. The husband, for example, has re-married. There have been purchases of properties and sales of properties, jointly, between he and his current wife. His circumstances in relation to employment have also changed, at least to some degree, in that whilst he is technically a [occupation omitted], it appears clear that since about 1998, he has, to a very significant degree, "acted up" as a [occupation omitted] within the State system and has, therefore, had significant variations in income and contributions, made with regard to superannuation.
The wife's circumstances have also changed. She has completed her studies and is now a [occupation omitted] and, in most recent times has taken employment as [occupation omitted] in [far-north Queensland] which, because of its remote nature, involves certain other benefits being paid to her, as well as the provision of subsidised housing. As such, her position is significantly changed from that which existed in 2000 when the original settlement was effected between the parties in relation to those items of property which could be quantified, at the time.
I am satisfied that the arrangements between the parties, when legally advised, took into consideration all of the assets that existed as at that time, other than the superannuation entitlements which, quite clearly, were not available for distribution, until there was one of the specified events as detailed in order 10 of the orders of 26 October 2000.
It was argued on the part of the wife that the settlement did not taken into account the full benefits received as a result of the personal injuries claim and the payments that both the husband and the wife received.
However it is abundantly clear that those payments were received, to a very significant degree, by each of the parties on, in fact, the day of settlement. The finalisation of the property matters exclusive of superannuation was effected some two years later. It is beyond comprehension that there would have been some exclusion or non-consideration of amounts received by each in relation to their personal injuries claim, exclusive of pain and suffering as is suggested on the part of the wife.
I am not at all satisfied that there was no consideration of those aspects of the matter and, in any event, it is clear from the orders that were made that each party acted specifically upon the assumption that there was a full realisation or finalisation of the property affairs between them, exclusive of superannuation.
It may be, that the Court properly has a discretion in relation to such matters, but I am satisfied that the orders in their original form were final in respect of all property then available for distribution, including amounts received by each in respect of a personal injury claim and that with the passing of time and the actions that both have a taken with regard to the changes in relation to their circumstances, that it would be a gross injustice, particularly to be perpetrated upon the husband, if it were to be suggested that there should be a reconsideration of the entire property distribution between the parties, such that there would be some further or additional payment required to be made, over and above that which has been effected pursuant to the terms of the orders of October 2000.
Obviously consideration must be given to a just and equitable distribution of property as between the husband and the wife. That is required pursuant to the provisions of section 79(2). I am comforted in my determination with regard to matters exclusive of superannuation that the justice and equity of the situation would, in any event, result in a distribution between husband and wife very similar to, if not identical with that which has already occurred.
The reason for that, in particular, arises from the significant change in the wife's circumstances with regard to her qualifications as a [occupation omitted] and the acquisition or growth of superannuation entitlements. The wife's superannuation entitlements, at the time of the orders in October 2000, was approximately $2000 but by the time of this hearing had grown to a sum in excess of $90,000. That amount is to be retained, quite obviously, by the wife and was not the subject of dispute.
I am satisfied that the justice and equity of the situation as between the parties would have meant that each would have retained that which was received pursuant to the orders of 26 October 2000 without any significant variation. In any event, I am satisfied that the wording of the order and the very particular use of the term "partial property settlement" rather than the more common term "interim property settlement" though at least in one argument there should or could be no distinction drawn, was chosen specifically for the purposes of ensuring that it was understood, as I believe it was by all parties, that there had been a full resolution of all property matters, exclusive of superannuation.
In light of that finding there is only one further determination that is required and that relates to the matter of superannuation and the distribution to be effected between the husband and the wife. The husband, in his amended response, says that the wife should receive an amount equivalent to 33.33 per cent of the value of the superannuation which has been calculated, by Peter Skinner of PGS Superannuation Consulting Pty Ltd as an amount equal to approximately $412,776.32 as at 6 January 2006. That is based on normal growth from the figures which were available in 2000.
Mr Skinner was also asked to do calculations in relation to the value of superannuation at different times. These included a value as at the date of separation, 10 April 1998, which provided for total superannuation entitlements of both the husband and wife in the sum of $197,043.22. These were made up of figures available for the husband of $194,945.49 and for the wife of $2,097.73.
Mr Skinner was also asked by the solicitors for the wife, to do various other calculations based on potential splits to be applied in relation to the superannuation entitlements, as at 10 April 1998. The potential splits of the superannuation entitlements as at the date of separation were done on varying figures between an equal distribution, 50/50 through to a 70/30 distribution, in favour of the wife. Upon those calculations the wife would have received, on an equal distribution, superannuation entitlements of $98,521.61 and, on a 70/30 distribution in her favour, an amount equivalent to superannuation entitlements of $137,930.25.
Mr Skinner was then asked to do further calculations in relation to those various splits, taking into account escalations in the value of the superannuation entitlements from 10 April 1998 to the date when the calculations were done, 12 January 2006. Mr Skinner noted that there had been an escalation in unit price from 1.035378 on 10 April 1998 to 1.877707 on 12 January 2006. This was, it would appear, an 81.35 per cent increase in unit price, over the period 10 April 1998 to 12 January 2006. Applying the increase in relation to the various potential splits which were done, resulted in the base amount for orders varying from the 50/50 split, at $178,673.60 to a 70/30 split in favour of the wife resulting in a base amount of $250,143.04.
Mr Skinner also provided information in relation to a calculation based on a percentage order and indicated, that at the date of his calculations, where he had valued the husband’s entitlements at $412,776.32 and there was a 50/50 potential split, that the percentage of the husband’s entitlement to be transferred to the wife to effect that settlement would be 43.29 per cent and if it were increased to a 70/30 split, then to effect such a split would require a percentage in favour of the wife of 60.60 per cent.
These calculations, however, were based on assumptions made with regard to the husband's income, as if he worked entirely as a [occupation omitted]. Mr Skinner, in cross-examination and in questions directed to him by me, indicated that there would be significant variations in the value of the superannuation held by the husband, if there had been significant periods where he had, "acted up" as a [occupation omitted] and therefore earned considerably greater amounts.
It was clear that there would be an increase, though the increases were not specifically available. In re-examination Mr Skinner acknowledged that if, in the last three years, the husband's income was not approximately $74,000 per annum but more accurately $113,000, $109,000 and $137,000 per annum respectively, then there would have been at least, a 25 per cent increase in the value of the superannuation entitlements.
It is therefore a most difficult assessment that could be made or should be made, in relation to the proceedings. The property that was available for distribution in 2000 was split between the parties, exclusive of some items, but the majority was split basically 67.5 per cent/32.5 per cent in favour of the wife. Counsel for the wife says that there should be, at least to some degree, a continuation of that position in relation to the superannuation entitlements and, for that reason, the amendment at trial was made in relation to the percentage sought in respect of distribution between husband and wife, from 43.29 per cent to 51.94 per cent. On the calculations provided by Mr Skinner that is a 60/40 potential split.
I must say that I am far more inclined, particularly in light of the significant growth of the wife's own superannuation, which is not sought to be included in relation to this determination, toward a potential distribution which would have or should have been effected between the parties of a 50/50 split, it being clear that there had been contributions by the husband both prior to and subsequent to the relationship, such that he would be given certain credit in relation to same.
It appears, therefore, that if on the date of separation, 10 April 1998, a 50/50 split had been effected the wife would have received $98,521.61 from the superannuation pool.
Mr Skinner was at great pains to ensure that there was a clear understanding of growth in relation to the amount of $98,521.61, or any other amount that might be calculated from 10 April 1998 through to 6 January 2006.
It was, of course, subject to a possibly erroneous assumption in relation to the amount of income received but, as best he could do, the indication was that the amount which would have been received if it were available for distribution to the wife on 10 April 1998 would have grown on a 50/50 distribution from $98,521.61 to $178,673.60 which would be equivalent to 43.29 per cent of the husband's policy value, on 6 January 2006.
Of course, that policy would appear to be worth more in light of the husband’s higher duties, but there is no accurate figure available in relation to same. If it were, for example, worth now, say, $500,000 there being approximately a 25 per cent growth over and above that which had been calculated by Mr Skinner, then the amount of $178,673.60 which would have been the growth between April 1998 and January 2006 would have been a little less than 40 per cent. It is upon that basis that one assumes that the figure, proposed on the part of the husband of 33.33 per cent, has been calculated.
The fact is, however, that there are no other figures available in relation to the matter, other than the assessments made by Mr Skinner, upon the assumptions that he has made. In my view, they are the best figures that are available and must be accepted in relation to the proceedings. If the assessment is, therefore, that the value of the policy, and it is the best that is available, is $412,776.32 and that the wife would properly have been entitled to an equal distribution as at separation, which had a value then of $98,521.61, then the normal growth would have been to the sum assessed by Mr Skinner of, $178,673.60.
Each party has contributed to the acquisition of that asset and, if there had been a splitting off of an amount equal to one half of the value in 1998, then the wife's entitlements would have grown to $178,673.60.
It was argued on the part of the husband that she was, in fact, benefiting from significant additional contributions made by him post separation. I must say that I simply cannot fathom that argument in relation to the proceedings. What is abundantly clear from the calculations done by Mr Skinner, is that the growth from $98,000 to $178,000 is simply an inflationary growth, which reflects upon the growth of the Q Super Fund, exclusive of contributions. That is made even clearer in any event, from the fact that a doubling of the base amount of $178,673, results in a figure of approximately $357,000 which is, of course, an amount approximately $55,000 less than the figure that Mr Skinner has calculated, as the value of the husband's policy.
The additional value therefore to the husband, through contributions made since separation, is reflected in the fact that his entitlements are approximately $55,000 greater than that, which would be attributable to the wife.
I am obviously required to effect a reconsideration of the property settlement to be effected between the husband and the wife, in relation to superannuation, taking into consideration those matters which are normally looked at pursuant to the provisions of section 79(4)(a) to (c), section 75(2) and, of course, the final procedural step required pursuant to section 79(2). Identifying the value is difficult but, as I have said, the only real figure that is available in relation to this matter is that which has been provided by Mr Skinner, of $412,776.32.
I am satisfied that there has been contribution by each party during the relationship in relation to same, such that the contribution during the relationship would have been an equal contribution though some would be of direct and other of indirect financial contribution. It is clear also that there would be some adjustment made pursuant to the provisions of section 75(2), particularly in light of disparity in income earning capacity of each of the parties, especially when the husband is acting in a capacity as Magistrate and receives significantly greater income, as a result of same.
What is clear, however, is that he contributed to the scheme over and above those contributions made by the wife post separation, and also, prior to the commencement of the relationship. In my view, the contributions made post separation, balanced against those factors that might weigh in favour of the wife pursuant to section 75(2), are such that they counter balance or cancel each other out and, in my view, the appropriate starting point in relation to distribution of the superannuation entitlement, is an equal distribution or a 50/50 split.
That would have been what was required in 1998, as at the time of separation and I see no reason why the justice and equity of the situation would in any way change. The appropriate distribution, therefore, in light of the growth of the policy at least to January 2006, would mean that, pursuant to section 90MT(1)(a) of the Family Law Act, an amount calculated pursuant to the percentage calculations provided by Mr Skinner of 43.29 per cent should be effected. I am satisfied that that is an appropriate distribution of the superannuation entitlements which remain for the purposes of distribution, between husband and wife.
Accordingly, the orders that I intend to make in relation to these proceedings are as follows:
ORDERS DELIVERED
I certify that the preceding seventy-three (73) paragraphs are a true copy of the reasons for judgment of Coker FM
Associate: Lorraine Singer
Date: 24 August 2006