Mudge and Vandar
[2014] FCCA 2520
•6 November 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MUDGE & VANDAR | [2014] FCCA 2520 |
| Catchwords: FAMILY LAW – Property – consideration of property upon the basis of two pools, immediately available assets and superannuation entitlements – consideration of contributions by each party at the commencement or the relationship, during the relationship and substantial post-separation contributions. |
| Legislation: Family Law Act 1975 (Cth), ss.79(4), 75(2), 79 |
| Pastrikos and Pastrikos (1980) FLC 91-987 Whitely and Whitely (1996) FLC 92-684 In the Marriage of Clauson (1995) FLC 92-595 In the Marriage of Ferraro (1993) FLC 92-335 In the Marriage of Lee Steere and Lee Steere (1985) FLC 91-626 Russell and Russell (1999) FLC 92-877 |
| Applicant: | MS MUDGE |
| Respondent: | MR VANDAR |
| File Number: | PAC 303 of 2012 |
| Judgment of: | Judge Coker |
| Hearing dates: | 14-15 July 2014 |
| Date of Last Submission: | 16 July 2014 |
| Delivered at: | Townsville |
| Delivered on: | 6 November 2014 |
REPRESENTATION
| Counsel for the Applicant: | Ms Kennedy |
| Solicitors for the Applicant: | Aaron Legal Solicitors |
| Solicitors for the Respondent: | Collins & Thompson |
ORDERS
That the home situate at Property P, be sold and that the parties take all immediate steps to place the property upon the market for sale, and upon sale that all outstanding liabilities attaching to the property, including but not limited to mortgage, rates, utilities and other outgoings be paid and that thereafter the proceeds be distributed as follows:
(a)The payment of $37,178.00 to the Husband's (omitted) Bank Credit Card and that following such payment the Husband indemnify the Wife in relation to any further liability;
(b)The payment to the Husband of $9,325.00 being one half of the amount drawn down from the mortgage attaching to the said property; and
(c)That the balance be divided equally between the Husband and the Wife.
That for a period of four months from the date of this Order, the Husband is to continue responsibility for the payment of the mortgage attaching to the said property, provided however that should the property sell within the period of four months, then that the Husband’s responsibility for any further payments shall forthwith cease, and that if the property does not sell within the four months provided then that the parties are to share equally the payment of all outgoings attaching to the said property.
That the joint shares owned by the parties in (omitted) shall be sold and the net proceeds of such sale divided equally between the parties.
That the Husband retain to the exclusion of the Wife, the following goods, chattels and resources:
(a)Acoustic guitar owned by the Husband at the time of cohabitation;
(b)Electric guitar owned by the Husband at the time of cohabitation;
(c)Electric guitar amplifier owned by the Husband at the time of cohabitation;
(d)(omitted) collection owned by the Husband;
(e)Painting by (omitted);
(f)Collection of paintings and prints: (omitted), another (omitted) painting, (omitted) print, framed (omitted) drawing, print of (omitted), print of (omitted), and perhaps others;
(g)Boxes of the personal effects, books, and personal items of the Husband remaining at Property P, comprising a record collection, (omitted) equipment, an (omitted) wood carving ((omitted)), (omitted) and associated equipment, (omitted) machine plus accessories and materials, vintage wines and wine rack, mini food blender, crockery and cutlery;
(h)All money in any Bank Account in his sole name;
That the Wife retain to the exclusion of the Husband, the following goods, chattels and resources:
(a)Contents of the home located at Property P, NSW, not otherwise dealt with in these Orders.
(b)Mitsubishi Pajero Motor Vehicle registered number (omitted);
(c)Boat and Trailer located at Property P, NSW;
(d)Money on deposit in any bank account in her sole name;
(e)Her personal effects, clothing, shoes and jewellery.
Each party shall indemnify the other party for any debt or liability in the first party’s sole name.
That the Husband retain as and for his sole property absolutely, the interest held in the (omitted) Bank Deferred Annuity.
That in accordance with paragraph 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the Husband’s interest in (omitted) Superannuation – (omitted) Super Fund the Wife shall be entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using a base amount, at the date of these Orders, in the sum of $156,462.25, and that there be a corresponding reduction to the entitlement the Husband would have had in the (omitted) Superannuation – (omitted) Superannuation Fund but for this Order.
The Trustee of the (omitted) Superannuation – (omitted) Super Fund must comply with the obligations imposed upon trustees of eligible superannuation plans under the Family Law Act 1975 and Family Law (Superannuation) Regulations 2001.
These Orders bind the Trustee of the (omitted) Superannuation – (omitted) Super Fund and these Orders take effect from the operative time being the fourth business day after the date of service of these Orders on the Trustee.
That each party and the Trustee have liberty to apply on seven (7) days written notice to the other parties in relation to the implementation of the Orders affecting the Husband’s interest in the said (omitted) Superannuation – (omitted) Super Fund.
IT IS NOTED that publication of this judgment under the pseudonym Mudge & Vandar is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT AT TOWNSVILLE |
PAC 303 of 2012
| MS MUDGE |
Applicant
And
| MR VANDAR |
Respondent
REASONS FOR JUDGMENT
THE APPLICATIONS
On 14 June 2013, Ms Mudge, whom I shall refer to as “the wife”, filed an initiating application in this Court seeking orders with regard to a final property settlement between she and Mr Vandar, whom I shall refer to as “the husband”. The orders that were sought by the wife were brief in the extreme. They were in these terms:
(1)the wife receive 60 per cent of the net superannuation and non-superannuation assets;
(2)that the wife be at liberty to amend her application once the husband has provided the wife with his full and frank financial disclosure.
The husband responded to that application in a response filed on 19 August 2013. In that response, he sought orders on both a final and interim basis. The terms of those final orders were as follows:
1.That the net pool of non-superannuation matrimonial assets be divided between the Applicant Ms Mudge and the Respondent Mr Vandar in the proportions of 65% to Mr Vandar and 30% to Ms Mudge, taking into account goods, chattels, motor vehicles and other valuable items retained by each party.
2.The joint shares owned by the parties in (omitted) shall be sold and the net proceeds of such sale divided equally between the parties.
3.It is declared that Mr Vandar owns to the exclusion of Ms Mudge the following goods, chattels and resources:
(a)Acoustic guitar owned by Mr Vandar at time of cohabitation;
(b)Electric guitar owned by Mr Vandar at time of cohabitation;
(c)Electric guitar amplifier owned by Mr Vandar at time of cohabitation;
(d)(omitted) collection owned by Mr Vandar;
(e) Painting by (omitted);
(f)Collection of paintings and prints: (omitted), another (omitted) painting, (omitted) print, framed (omitted) drawing, print of (omitted), print of (omitted), and perhaps others;
(g)Boxes of the personal effects, books, (omitted) and other items of Mr Vandar located at Property P. And such other personal items of Mr Vandar remaining at Property P, comprising a record collection, (omitted) equipment, an (omitted) wood carving ((omitted)), (omitted) and associated equipment, (omitted) machine plus accessories and materials, vintage wines and wine rack, mini food blender, crockery and cutlery, and other items;
(h) All money in any Bank Account in his sole name;
(i)All right, title and interest in the Superannuation entitlement held in an (omitted) Bank Deferred Annuity.
4.It is declared that Ms Mudge owns to the exclusion of Mr Vandar the following goods, chattels and resources:
(a)Contents of the home located at Property P, NSW, not otherwise dealt with in these Orders.
(b)Mitsubishi Pajero Motor Vehicle registered number (omitted);
(c)Boat and Trailer located at Property P, NSW;
(d)Money on deposit in any bank account in her sole name;
(e)Her personal effects, clothing, shoes and jewellery.
5.Each party shall indemnify the other party for any debt or liability in the first party’s sole name.
6.(a) There shall be a Splitting Order and under the provisions of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the interest of Mr Vandar born (omitted) 1959, in the “(omitted) Superannuation – Personal Super” Fund, being Investor Number (omitted); Superannuation Product Identification Number (omitted), that interest shall be split as provided herein.
(b) The entitlement of Mr Vandar as at the date of calculation shall be divided by the number of months from date membership commenced to date of calculation, then that figure shall be multiplied by 229 being the number of months the parties cohabited, then that figure shall be divided by 2(2) and the resulting figure shall be the amount to be allocated, from the interest of Mr Vandar, born (omitted) 1959 in the “(omitted) Superannuation – Personal Super” Fund, being Investor Number (omitted); Superannuation Product Identification Number (omitted), to Ms Mudge born (omitted) 1956, as required by the Family Law Act 1975.
(c) Pursuant to the Family Law Act 1975, Ms Mudge is entitled to be paid the amount calculated according to Part 6 of the Family Law (Superannuation) Regulations 2001.
(d) Mr Vandar’s entitlement to payment out of his interest in the said Superannuation Fund is correspondingly reduced to take into account the entitlement of Ms Mudge created by this Order.
(e) The Trustee of the said Fund shall do all such acts and things and sign all such documents as may be necessary to calculate according to this Order the entitlement of Ms Mudge and pay to Ms Mudge or as she may direct her entitlements pursuant to this Order.
(f) This Order has effect from the operative time and the operative time is the beginning of the fourth business day after the date on which a copy of this Order is served on the Trustee of the said Fund.
(g) Natural justice having been effected, this Order binds the Trustee or Trustees of the said Superannuation Fund and their agents and servants from the date of service of a copy of this Order on the said Superannuation Fund.
7.That otherwise the Superannuation entitlements of Mr Vandar in (omitted) Superannuation – Personal Super are declared owned by him to the exclusion of Ms Mudge.
THE DIFFICULTIES:
The parties moved initially quite swiftly in relation to the property application once it was instituted by the wife. Thereafter, however, both parties appear to have lost any real impetus or drive in relation to determining issues with regard to property settlement between them. I say that, particularly in light of the fact that there was a real failure on the part of both parties to in any way properly thereafter participate in the procedures that might have led to a resolution of property determination between them, at an earlier stage.
I note that, in particular, there was a conciliation conference conducted before Registrar Ryan on 7 April 2014, in which it was noted that the matter was not resolved and, interestingly, that costs of the husband incurred at the conference were reserved. The reason for costs being reserved was included in notations that followed the determination that the matter was unable to be resolved. The notations were in these terms:
·It is a 20 year marriage, no children. The husband is the greater income earner. The wife lives in the former matrimonial home at Property P. The husband pays the mortgage. There are basically three main assets – the Property P property, the husband’s superannuation and the value, if any, of the husband’s shares in a (omitted) practice.
·The Respondent wife appeared in person today. His Honour made directions on 19 August 2013, in reference to the preparation of the matter for a Conference Mediation Financial. An October and December Conference had been adjourned previously. Absolutely no preparation had been undertaken by the wife, no documents were provided and the wife was unable/unwilling to put forward any proposal for settlement whatsoever. The wife was represented when the August directions were made.
·I reserve the husband’s costs of today’s conference, which were thrown away in the circumstances.
It would appear that the assessment of the registrar who attempted to conduct the conference, in relation to the matter, was basically to the effect that the wife was unwilling or unable to properly seek any orders in relation to the proceedings or to articulate at all a proposal with regard to settlement.
Unfortunately, that was a recurring theme during these proceedings, and I say that even in light of the fact that on 3 July 2014 the wife was represented again by solicitors, but appeared still unable to properly articulate what might be sought by her in relation to the matter. In particular, in her amended initiating application filed on 3 July 2014, only 11 days prior to the hearing, and after the date upon which directions indicated material had to be filed, she sought orders in these terms:
(1)that the wife receive 60 per cent of the net superannuation and non-superannuation assets;
(2)the husband continue to pay to the wife in the sum of $5000 per month pending the net proceeds of sale becoming available after settlement of the sale of the parties’ Property P property;
(3)that the wife be at liberty to amend her application once the husband has provided the wife with his full and frank disclosure.
The only real addition, therefore, over and above what was included in the original application was a request for a payment to be facilitated in relation to an amount of $5000 per month pending the sale of the home. It was, to all intents and purposes, in fact, a continuation of what had occurred since the parties separated on 23 December 2008, some five and a half years prior to the actual trial date. Certainly, amounts paid by the husband have varied to some extent, but they have certainly been sufficient to meet the mortgage and other outgoings attaching to the parties’ property at Property P, in New South Wales, as well as to provide what appears to be conceded on the part of the wife, an amount of about $500 per week towards her own expenses. It was a matter that should have been able to be resolved but the wife’s preparation and disclosure was not forthcoming.
That is not to say, however, that the husband also has fallen short of what could properly be expected of him, in relation to the matter. Original orders were made in relation to disclosure to be effected between the parties. Those orders incorporated in the orders of 19 August 2013 included, specifically, orders with regard to the parties making full and frank disclosure of their financial circumstances by complying with rule 24.03 of the Federal Circuit Court Rules, no later than 14 days before the date of the conference, as well as the provision of information with regard to market appraisals or valuation of assets and provision of superannuation information to the other party.
The husband failed fundamentally to provide any such information and, in fact, did not file any material for consideration in the hearing over and above the short affidavit and financial statement which were provided by him in August of 2013, when responding to the wife’s initial application.
As is perhaps obvious from the comments made herein, the determination of the matter has been made manifestly more difficult as a result of the parties’ failure to even present their own case in a properly prepared and articulated manner. There were, for example, limitations that arose as a result of there being no information whatsoever, apart from a year-old profit and loss statement in respect of the husband’s interest in a business, (business omitted). There was no information in relation to the valuation of the principal asset, the home at Property P, other than a dispute which arose in the last day or so prior to hearing as to value.
The husband had originally, in his financial statement, indicated that the interest held in the property was a 50 per cent interest, equivalent to $450,000.00, therefore valuing the property at $900,000.00. The wife, in her original financial statement, placed the value on the property at $900,000, but then, in her financial statement filed along with the amended initiating application, placed the value of the property at $1.25 million. No valuations were provided, and there was dispute between the parties in relation to that particular aspect of the matter.
I say no valuations were provided, however, it does appear that, on the day of hearing, the wife obtained some valuation evidence, suggesting that the property might be valued at $1.1 million, but I refused to allow the late filing of that particular information, particularly in light of the fact that both parties acknowledge that the only proper outcome that could arise in relation to a property settlement, was the sale of that property.
The issue, really, in respect of the property, is what should occur with the proceeds of sale after the payment out of mortgage and other liabilities attaching to the property, and therefore came down far more significantly to a percentage argument than any determination as to what figure should be received by either party, in relation to the property. Similarly, there was no information available in respect of other assets of a substantial nature, including what was referred to as the husband’s (hobby omitted) collection, nor was there information provided as to jewellery or designer clothes and accessories, apparently purchased by the wife.
Finally, and perhaps most significantly in relation to this matter, it was only in the last few days that there was any real information provided as to the husband’s superannuation entitlements. In the husband’s original financial statement, he indicated that he held superannuation with (omitted) Personal Super as at 30 June 2013 valued at $329,858 and an (omitted) Bank deferred annuity at 30 June 2013, with a value of $25,857. The indications subsequently, however, were that on or about 9 July 2014, a year later, figures were significantly changed such that the (omitted) super fund had a value of $391,155.62 and the annuity was valued, according to agreed sums, at $25,857. Clearly, the annuity had not grown to any real extent, but as it was not being contributed to directly, that is, perhaps, understandable.
THE EVIDENCE:
The parties made the determination in respect of this matter difficult for themselves but, of course, flowing from that, made the matter difficult for determination by the Court. That became more obvious when evidence was called in relation to the proceedings. The wife, with respect, was not a dishonest witness, but certainly was a witness that caused some difficulties to the Court, in relation to determination of proceedings. I have already commented upon the fact that she has not assisted herself or the Court in relation to the conduct of the proceedings. She has not produced documentation that she was required to produce, nor has she, to any real extent, conducted the inquiries that were fundamentally required, but, more particularly, were able to be conducted by her.
That was abundantly clear from the fact that, following the closing of both parties’ cases and the adjournment over to the next morning to enable submissions to be made, an application was made on the part of the wife to reopen the case for the purpose of tendering a document, a bank statement relating to an inheritance which had some significance in relation to contributions by one party or the other, in this case, the wife, during the term of the relationship. The document, which was subsequently tendered, leave having been granted to reopen the case purely for that purpose, was a statement from the joint account of the parties conducted with the (omitted) Bank in (omitted) for an overseas remittance of $62,833.95 on 15 August 1996. The document was one that came into existence almost 18 years prior to the hearing. More particularly, and perhaps more significantly, it was a document held by the wife. She had not only the capacity but the obligation to produce the document and failed to do so.
It is a recurring theme in relation to this matter and one that caused me particular difficulty in relation to the determination. Counsel for the wife, recognising that obvious concern in relation to the matter, submitted, in response to the argument put on the part of the husband, that the husband’s evidence should be relied upon where there is conflict between the evidence of the two parties, rather than the wife, the wife suggested that the wife was “not a sophisticated witness” and though vague, was not wilful in her failure to disclose or to provide evidence.
I am inclined to that view, but by the same token, must be mindful of the fact that where the wife was vague and was unable to specifically recall what might or might not have occurred, let alone precisely what did or did not occur, the husband was very precise in his evidence and I am of the view that the husband’s evidence should be relied upon more significantly than that of the wife’s, when there is dispute, not necessarily because of aspects relating to the truthfulness of one witness or the other, but more particularly relating to the precise recollection of the husband as opposed to the vague or imprecise recollection of the wife.
I had the opportunity to see both of the parties in the witness box. With respect, the wife was exactly as described by counsel, vague and, as I would assess, imprecise. She was asked many questions about issues in respect of the marriage and, in particular, her recollection of circumstances. She deposed in her material, as recently as 11 days prior to the hearing, to the purchase of the Property P property in 1999.
That was notwithstanding the fact that annexed to her own material were indicators of the purchase of the property, including the transfer form which clearly had affixed to it a stamp duty assessment which was dated 20 June 1997. The wife also, in her material, deposed to the purchase price of the Property P property as $435,000 when, again, her own document indicated that the purchase price was $430,000. She had no information and was unable to specifically recall issues with regard to the amount of the mortgage or how various moneys which were put toward the purchase of the Property P property were gathered, including whether they constituted part or all of the inheritance that had been received by her, and which she indicated was approximately $80,000, though the document tendered when the case was reopened, indicated that the value was $62,833.95.
She was unable to provide information precisely as to what might have happened with the proceeds of a property previously owned by her in Property S, Hobart, Tasmania. She was able to depose to the fact that it was sold, she thought, for $98,000, and the husband indicated that he thought that was, perhaps, the actual figure. But, again, there was nothing precise, particularly when the wife acknowledged, quite properly in cross-examination, that she was unable to say what proportion might have been used for day-to-day family purposes between she and the husband and what proportion might have been utilised toward the purchase of other assets.
Similarly, it was indicated that an investment property had been purchased in Property M in the husband’s name, but utilising moneys from the sale of the property in Tasmania. The wife was unable to assist in that regard, but it was noteworthy that she insisted that the totality of the sale price, which was agreed to have been approximately what the purchase price was some time prior, was utilised toward the purchase of the Property P property, and that that was $180,000. Unfortunately, that was obviously incorrect, it being the case that the amount borrowed by the parties was far more than what would have been necessary if the totality of $180,000 had been devoted in its entirety to the purchase of the Property P home.
It also failed to take into consideration that all agreed that there appeared to have been some form of negative gearing arrangements put in place, recognising that the husband was a high income earner, and therefore purchasing the property in his name, and if that were the case, then obviously there would not have been a negative gearing facility available, unless there was a mortgage attaching to the property, and if, as would be the norm, there were to be taxation benefits sought, then no capital reduction in relation to the amount of the mortgage would have been sought, but interest only payments would have been made.
The wife was unable to, in fact, it would seem, even appreciate that that might be the case, but one cannot be overly critical of her in that regard because the husband also had limited, if any, understanding or knowledge of exactly what might have been the situation there and, in any event, had the opportunity directly to provide information with regard to that and failed or chose not to do so.
The wife was prone, I thought, to some degree of exaggeration in her evidence. Much of that came through with regard to these issues of financial dealings and what might or might not have happened, it being clear, for example, that the most that could have been received from the sale of the Property S, Hobart property was $98,000, but there was clearly less than that because of mortgage commitments and, no doubt, sale and other commitments that arose, but that she was adamant that an amount of $180,000, the amount utilised to purchase the property, was received back. There appeared to be no attempt by the wife to understand that particular aspect of the matter.
There were two other issues, not directly relating to funding but which were fundamental, both to the wife’s recollection and, I thought, at the very least, to suggesting a degree of exaggeration, arose from the wife’s evidence. The suggestion that she was abandoned by the husband some three months or so after they married in (omitted) of 1991 was ludicrous. The far more obvious and, I think, accurate recollection was that of the husband, in relation to his having obtained employment at (omitted) in Western Australia, his being required to attend and ascertain whether he liked the people that he worked with and the job and whether they were satisfied with him prior to the wife making the move.
For the wife to suggest that she was abandoned was an exaggeration of the highest order. The husband returned three months later. The wife acknowledged that he had been living in single men’s quarters. The wife acknowledged that they drove back together.
The wife acknowledging that they stayed with friends in (omitted) during the return trip. The wife acknowledged that the husband was living in single men’s quarters prior to collecting her, reflects far more of the accurate recollection and reflection of what occurred than, as suggested by the wife, that she was simply abandoned, knew nothing about what was going on, and was required to seek assistance from the husband’s previous employers at (omitted), so as to enable her to remain in a (employer omitted)-owned property.
Again, the wife produced no evidence in that regard, and as was indicated, and I accept, there was no other evidence than that the husband, through his new employ, made arrangements for the continued payment of the rent associated with the formerly occupied home in (omitted), so as to ensure that the wife was accommodated. The wife’s recollection was fundamentally wrong in relation to the matter and, unfortunately, I am inclined in this particular aspect of the matter to the view that it was not simply a situation of the wife being vague or perhaps reconstructing what had happened, but rather being fundamentally misleading in what she suggested had occurred.
Similarly, when, in her more recent affidavit, she deposed to circumstances which gave rise to specific cruelty on the part of the husband, the wife’s circumstances and allegations fell flat. She suggested in her affidavit under the heading, “Mr Vandar’s attitude towards me during our relationship”, that in about 2003 or 2004 she had had a fall at work as a result of a horse running away, and that she had been seriously injured. She was unconvincing in her evidence in relation to that particular aspect of the matter, and whilst the solicitor for the husband cross-examined at some length in relation to the matter, the wife’s evidence was, I thought, at best, imprecise, and at worst, a reflection of an attempt to mislead the Court, as to exactly what the husband’s behaviours might or might not have been.
To her credit, she subsequently instructed her counsel not to persist with any application arising from a suggestion of the performance of the wife’s household chores and duties being more difficult than would normally be the case because of the behaviours of the husband.
The husband’s evidence, as I say, was more precise than the wife’s, and at least was not what I would have thought was an attempt to reconstruct history from speculation as to what might have occurred 20 or more years ago. The husband answered precisely in relation to issues, and I must say was a far more convincing witness than the wife, though still unable to provide much of the information that was sought in relation to the matter. He was also, I thought, more honest and open when it came to recognition of what each party’s role was within the relationship.
He acknowledged that throughout the relationship each party performed different household tasks, that both cooked and gardened, that domestic chores were shared, but that, as he was working, the wife would, in all likelihood, have performed more of those domestic chores.
The husband’s recollection of various other matters was also, I thought, more precise, but interestingly, and perhaps unfortunately, the husband was, on occasion, unable or unwilling to provide more precise information, for example, with regard to the (omitted) collection that he held and had obviously commenced as a lad, when an interest in (hobby omitted) had first raised itself with him. He was pedantic in relation to that particular aspect of the matter, where it was indicated, for example, that requests were made by the wife’s legal representatives for information with regard to his “(hobby omitted) collection”. He knew exactly what was being inquired into but, rather pedantically and unhelpfully for him and for the Court, chose not to provide information, suggesting that he drew a very specific distinction between (hobby omitted) and that he had not purchased (hobby omitted) at any time during the relationship or subsequent to separation.
It would have been far more helpful and obviously a clearer indication of the husband’s intention to be full and frank, if he had simply clarified immediately that (hobby omitted) had not been purchased but that some limited purchases had been made in relation to (hobby omitted), rather than to simply not provide the information.
Similarly, he knew that information was being sought in relation to his interest in (business omitted), but chose not to provide any real information in that regard. Certainly he forwarded, through his solicitors, a copy of the financial statements for the period ended 30 June 2013 but does not appear to have provided any information, as requested, as to his acquisition of the interest in the business. It became clear that there were even greater difficulties in relation to assessing what might or might not have been the interest in the business, when he gave a rather obtuse answer to a question relating to his quarter interest in the business. He indicated that that wasn’t the case and that one of the previous owners still had a “half-interest”, at least until the purchase was finalised.
The difficulty that, of course, arose in relation to that particular aspect of the matter was that it appears clear that the husband has an interest, though it is difficult to assess what that might be, but also that he draws a significant income from the business. To that end, the 2013 financial statements certainly note that the husband received, as at 30 June 2013, wages and salaries totalling $218,148 and, also, it appears clear that superannuation was paid to his superannuation fund in the sum of $20,070. The best information that appears available in relation to the business, (business omitted), is that the total equity in the company is constituted, at least at 30 June 2013, in a sum of $192,393 and that if the husband owns or will eventually own a one-quarter interest in the business, then his equity is approximately $50,000.
The wife suggested that in her material and, unfortunately, the husband was less than frank in that he noted in his financial statement that the shares in (business omitted) was not known, though, interestingly, he was able to use information clearly coming from his financial statement that showed an income totalling $3784 per week, which could only be an amount drawn from the figures produced and detailed in the financial statements for the period ended 30 June 2013.
Suffice it to say, therefore, that the parties have made the determination in relation to this matter difficult for the Court but, unfortunately, of course, have also made it difficult themselves, particularly when they have not assisted each other but, more significantly, have failed to even present their own cases in a manner which assisted with the determination of these proceedings.
Fortunately, there appears, at least at the hearing, and even subsequent to the hearing but prior to submissions being made, to have been “an outbreak of sense” in that I note, for example, that the parties were able to agree that the orders sought by the husband in the response, with regard to how property should be divided, etcetera, were generally agreed. Counsel for the wife noted that there was agreement in relation to the husband’s final orders 2, 3, 4 and 5, as well as agreement to orders with regard to the sale process to be utilised in relation to the property at Property P, though it was noted that with apparent movement in value, the appropriate listing price should not be $950,000 but rather a sum agreed by the parties or, failing agreement, as might be nominated by the president of the New South Wales Real Estate Institute.
I agree that that is the case and is an appropriate course to follow in relation to this matter. In fact, the real issue here is not so much a determination of who might have been the greater recaller of fact, but rather what might be an appropriate distribution of property between the parties. To that end, it is necessary, obviously, to follow through with the step-by-step process that is required to be considered in relation to the determination of interest in property, which is a long-established routine.
ARGUMENT:
Before turning specifically to that determination, however, it is noteworthy that the legal representatives for the husband specifically indicated that this matter should not be treated, as he described it, as a “house and garden case”. He said that that was the situation because of three considerations that arose. The first related to what he described as the “extraordinary post-separation contributions made by the husband to the wife”, and that certainly is an unusual aspect to this matter. The husband says that he has paid to the wife since separation in December of 2008 an amount totalling greater than $394,000. It is also contended that, even if the amount of the mortgage payments that were made, and they were the minimum required payments, were deducted, there was still an amount in excess of $220,000 paid to the wife, and that made the post-separation contribution significant.
To some degree, I agree that that is the case because, particularly whilst it may be able to be considered that the payments were spousal maintenance, there was also an obvious need to consider an amount in excess of $170,000 paid over five and a half years toward the mortgage payments, whilst the husband was still incurring other expenses with regard to his own accommodation, and the wife had the right and benefit, therefore, of occupation of the home at Property P.
Additionally, it was contended that there were other factors which led to the Court not considering that this was a “house and garden case”. In particular, there was reference to the husband’s interest in (business omitted) and the equity in that being unknown. I, with respect, am not so certain that that is a factor which would mitigate against considering this as a straightforward case, particularly in light of the fact that the information that could and should have been produced in that regard was information specifically in the control of the husband and known to the husband, and he determined, for whatever reason, not to provide such information.
Thirdly, and again, there is perhaps some merit in the argument put, it was suggested that there was what was described as an “idiosyncratic superannuation situation”, it being the case that the husband had superannuation which had begun accumulating prior to commencing the relationship with the wife. It also appeared clear that when he left his employment in (omitted) and prior to commencing employment at (omitted) in Western Australia, he was able to access some of those funds, though another amount of approximately $20,000 was preserved, as well as any redundancy payment and, additionally, holiday leave, long service entitlements, and the like.
It was suggested, therefore, that the wife had received significant benefits in that regard, and it would be what might be considered a “double dip” to then also suggest that she had an entire interest in superannuation entitlements, when she had received benefits that she had not contributed to early in the relationship and then was to receive benefits from the superannuation interests of the husband at the conclusion of the relationship, particularly when there had been an initial amount put in from the husband’s pre-relationship contributions and significant contributions post-separation from December of 2008.
I will, of course, come to those particular aspects of the matter in due course, but thought it appropriate that they be specifically addressed in relation to this matter.
THE LAW:
I need, obviously, to look at the law in respect of financial determinations between husband and wife and, in that regard, the relevant law is as follows. Section 79 of the Family Law Act defines the court’s powers in determining applications for property settlement. Subsection (2) of section 79 provides that:
The court shall not make an order under this section unless it is satisfied that in all the circumstances, it is just and equitable to make the order.
Section 79(4) sets out the matters the court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters include:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The approach to the determination of an application under section 79 is well established by authority (see, for example Pastrikos and Pastrikos (1980) FLC 91-987; In the Marriage ofLee Steere and Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage ofClauson (1995) FLC 92-595 and In the marriage of Whitely and Whitely (1996) FLC 92-684). The process ordinarily involves a multiple part procedure.
The court must first identify the assets, liabilities and financial resources of the parties and attribute a value to all assets, usually at the time of the hearing. Thereafter it must evaluate the contributions made by each of the parties as defined in section 79(4)(a) to (c). Finally, the court must consider the financial resources, means and needs of the parties, and other matters set out in section 75(2) in so far as they are relevant. An adjustment of the amount due to each party by way of contribution is then made by reference to the section 75(2) factors. It is not essential, however, that such an adjustment be made. Generally speaking, an adjustment is made because one party has greater needs and the other has stronger means. Section 75(2) is concerned with the process of arriving at a just and equitable result.
In determining what order the court should make under section 79, the court must be satisfied, in all the circumstances of the case, that the order to be made is just and equitable – not simply that the underlying percentage division of the net value of the parties is appropriate. In other words, in consideration of whether the overall result of the order in the property settlement proceedings, is just and equitable (see 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.
Section 75(2) of the Family Law Act sets out the matters which must be taken into account by the court when determining applications with respect to maintenance. This is the prospective element of the determination of the application for property settlement. The assessment of contributions during the marriage is the retrospective element.
In the Marriage of Ferraro, the Full Court said:
A now well established line of authority in this Court indicates the approach normally to be taken in the exercise of the discretion in s79 proceedings. That approach is firstly to ascertain the property of the parties at the time of the hearing, then to consider “contributions” of the parties within paras (a) to (c) of s79(4), and then to consider the matters in paras (d) to (g), more especially para (e) which takes up by reference the provisions of s75(2) and which are generally referred to as the “section 75(2) factors”.
DISCUSSION
In a property settlement, the court must consider, firstly, those matters that arise pursuant to section 79(2). Is the Court satisfied that it is in all the circumstances just and equitable to make the order. In the vast majority of cases and this is one, the answer is obviously yes. The parties seek a property settlement. It is appropriate that that should occur and particularly when one is mindful of the provisions of section 81, to finally determine the financial relationships between the parties and to avoid further proceedings, no other course could be considered just and equitable.
The first step, then, in relation to any determination to be made is to ascertain the value of the parties’ interests in the marital assets. In that regard there was at least, to some extent, agreement reached between the parties. A balance sheet was handed to me which detailed various amounts for assets, add-backs, liabilities, superannuation and financial resources. The particulars included were in these terms:
| Description | Wife/ de facto partner’s value | Husband/ de facto partner’s value | |
| ASSETS | |||
| Property P | $ e 1,250,000 | $ e 1,250,000 | |
| Household contents retained by Wife | $ 5,000 | $ e 5,000 | |
| Household contents bought since separation | $ | $ e 3,000 | |
| 350 (omitted) Shares @ 7/7/14 ASX $5.945 each | $ e 2,044 | $ e 2,289 | |
| (omitted) Dividend account | $ e 922 | $ | |
| Pajero | $ 2,000 | $ e 2,000 | |
| Joint (omitted) Bank Account | $ e 280 | $ e 1,407 | |
| (omitted) Painting and other paintings and prints | $ e 2,500 | $ e 2,500 | |
| (omitted) Equipment | $ | $ | |
| Vintage Wines | $ | $ | |
| Musical Equipment | $ | $ | |
| Musical Equipment | $ | $ | |
| (hobby omitted) Collection | $ | $ | |
| Jewellery | $ | $ e 20,000 | |
| Collection Designer Clothes & Shoes | $ | $ | |
| Sail boat & trailer | $ 1,000 | $ e 1,000 | |
| (omitted) Collection | $ e 100 | $ | |
| (business omitted) | $ e 50,000 | $ | |
| (business omitted) Shares | $ | $ e 25 | |
| Total | $ 1,313,846 | $ E 1,287,221 | |
| ADD BACKS | |||
| Notional Add Back of Mortgage Draw Downs by Wife | $ | $ 18,650 | |
| Total | $ 0 | $ 18,650 | |
| LIABILITIES | |||
| Mortgage @ 2/7/14 NOTE reduction since separation, notwithstanding $18,650 draw downs on mortgage by Wife | $ 197,548 | $ e 197,548 | |
| (omitted) Bank Visa | $ e 3,018 | $ | |
| Real Estate Agent Sale Costs | $ e 37,500 | $ | |
| Total | $ 0 | $ E 202,392 | |
| SUPERANNUATION | |||
| Type of interest | |||
| (omitted) Superannuation @ 30/06/2013 | Accumulation | $ | $ 329,858 |
| (omitted) Bank Deferred annuity @ 30/6/13 | Def. annuity | $ | $ 25,857 |
| Total | $ 0 | $ E 355,715 | |
It was, however, specifically detailed that there was not agreement in relation to the valuation of the property at Property P, it being suggested now by the wife, following obtaining a valuation, that the property was worth $1.1 million, and the husband suggesting that he would prefer to adopt the wife’s assessment contained within the second or updated financial statement, which placed the property at $1.25 million. In the end, as indicated, it is not really of that great a consideration because of the fact that the property is agreed to be sold.
Additionally, there is dispute as to the value of the (hobby omitted) collection, though in evidence the husband indicated that it might have a value of $30,000.00 and that he would accept that as a figure, for the purposes of these proceedings. Indications were given from the bar table, that the wife would accept that valuation. There was no agreement, however, in relation to the wife’s clothing or jewellery, the husband suggesting that it had a value of $20,000.00, and the wife suggesting that it was of nominal value.
Further, and finally, there was no agreement obviously in relation to the business interests of the husband in (business omitted), the wife suggesting that it was $50,000.00 and the husband not being able to place any value on that particular asset. There are also agreed add-backs and they arise from an acknowledgement that drawdowns occurred in relation to the mortgage over the property at Property P, and that they totalled $18,650.00 and were retained in their entirety by the wife. It was also noted that the wife had drawn on a credit card in the husband’s name, a (omitted) Bank card, and that the current or best known liability in relation to that was $37,178.00.
For the purposes of these proceedings, and simply so as to place a figure on the assets, I intend to adopt certain sums, for the purposes of calculation. I place a value on the property at Property P of $1.1 million. Additionally, I place a value on the (hobby omitted) collection of $30,000 and do not intend to place any value on the jewellery or designer clothes that might be retained by the wife.
I do that on the basis that they are clearly of a personal nature and, in my assessment, it is impossible to place a value upon such items, particularly in light of the fact that they may have cost a significant sum at the time of purchase, but as the husband himself acknowledged in evidence, not so much with regard to the designer clothes or jewellery of the wife, but in relation to his own (hobby omitted) collection, it was a very limited market and what might be each individual item’s value in no way, in fact, reflects what it might be valued at, if the market were required to place some value upon it.
In any event, I intend more generally to take such retained items into consideration in respect of the overall determination of these proceedings. To that end, it was noted that there were a significant additional number of what might be called chattel items. Not only did they include the wife’s clothing and jewellery but included wines, musical equipment, paintings and prints, motor vehicles, sailing boats and trailers, as well as some small shareholdings and bank accounts. There was no evidence provided in relation to the value of those items, other than on occasion agreed values, though more often than not, simply bald statements by one party or the other, generally of a self-serving nature, as to how much chattels retained by the other party were worth.
The parties have agreed on certain items being retained by each, and in my assessment, it is appropriate that such items be retained and that there be no specific attempt to include values in the actual assessment of assets. Any values would be guesses at best, and the items in any event primarily hold value only in the eyes of the party who retains them.
Insofar as the value of (business omitted) is concerned, as I have indicated, there are difficulties in relation to assessing a value there, but it falls clearly upon the husband for there to be information provided in that regard, and he has failed to do so. In the circumstances, it is clear that if the best evidence and, in fact, the only evidence available is that which arises from the balance sheet of 30 June 2014, then a notional figure of $50,000 reflecting the husband’s quarter interest in the business is appropriate.
Accordingly, the asset pool for the purposes of calculation, excluding superannuation, totals $1,180,000.00.
The second step in relation to any determination of entitlements is to consider the contributions of the parties, both at the commencement of the relationship and during the relationship, as well as consideration of financial and non-financial contributions and thereafter, post-separation. As indicated in these reasons already, the information and evidence provided by each of the parties has been limited in the extreme. The difficulties that have therefore arisen are as a direct result of the parties’ own failure to prepare and provide for their own case, in relation to the matter.
The best that can be assessed is that the wife probably came into the relationship with more than the husband. She certainly had an interest in a property at Property S, Hobart, in Tasmania, though exactly what that interest might have been worth at the commencement of the relationship is unclear, and what might have been received at the time of sale of the wife’s property at Property S is also unclear, it being noted, for example, in her material that the property was sold for $98,000, but whether that was the net sale proceeds or some amount less is unclear. Certainly I note that the wife, in her more recent affidavit, indicated that to the best of her recollection and belief she received net sale proceeds sum of $98,000.00 but whether, with respect, that accurately reflects what was received or whether, in fact, the totality of that amount, if it was $98,000.00, was paid into the parties’ joint purchase of the investment property at Property M is unclear.
The husband’s evidence, however, was that there was less held by him than that amount. He notes in his affidavit that he owned a Holden Commodore motor vehicle and had between $20,000.00 and $30,000 in savings. Interestingly, in August of 2013, he recognised that it may be necessary to provide some confirmation of that, suggesting, at paragraph 7(b), as follows:
If necessary, I shall attempt to recover the bank statements.
He never did so, and thereafter simply goes on to note that he had household items, a collection of guitars, stereo equipment, SLR camera, and of course, his (hobby omitted) collection, which had been started as a child. He said he had no debt.
On the face of it, it is clear that an inference can be drawn that the wife brought more into the relationship, at least at the beginning, but thereafter each party contributed in different ways, and in that regard, quite obviously, the financial contribution of the husband was significantly greater from his employment, particularly in light of the fact that the wife was not in employment. That, of course, is not a factor which should in any respect weigh heavily, however, in relation to the proceedings, because the husband’s earning of income arose from circumstances where there were significant changes in the place that he worked, and, of course, in many of the instances, he worked in isolated communities, which meant that the wife’s capacity to provide income and to contribute financially was limited as a result of the moves that were brought about by the husband’s employment.
In any event, I am also satisfied that the wife, whilst involving herself in other activities and they are detailed in her material, to some extent contributed as best she could and, no doubt, as a result of her availability to do so, provided more than the husband in relation to the domestic chores required within the household, and therefore the meeting of needs in that regard.
I am satisfied that it is appropriate, that there should be consideration of that, in relation to the determination of these proceedings, particularly in light of the fact that, in 1996, there appears to have been an inheritance received by the wife, though it now is clear that it was not $80,000.00, but nearer to $60,000.00, prior to the parties’ separation in 2008. The contributions made by the wife, therefore, at the commencement of the relationship were significant. The contribution made by the wife in the first six or eight years of the relationship also by way of the inheritance was significant, but over time there is, as is obviously the case, an erosion to the impact of those particular contributions, and I am certainly of the view that, in the end, it is clear that, by separation in December of 2008, the parties had each contributed both financially and non-financially in different ways and to different degrees, but that the only proper finding in relation to such contributions was that it would have been an equal contribution.
I do not include in that particular aspect of the matter, a specific consideration as to the contributions to superannuation because, as I have noted previously, there was an initial sum contributed to superannuation at the commencement of the relationship which arose from the husband’s employment, prior to the commencement of the relationship, and that is, if you like, what might be considered “seed capital” which has led to the growth of the interest now held in superannuation, of $400,000 or thereabouts in total.
At the time of separation, however, there were other considerations that came into play including, particularly, issues that arise with regard to the payments made by the husband which, as his legal representatives described, were extraordinary post-separation contributions. I am of the view that there is validity in such an argument being made, because although it can certainly be contended that the husband was making payments in relation to support of the wife as a result of a need being shown by her, it needs to be balanced against issues with regard to a capacity of the husband to pay.
There was also, fundamentally, a need to recognise that the husband continued to pay, in their entirety, the mortgage and other outgoings with regard to the property, as well as that spousal maintenance component, and then was required to additionally accommodate and provide for himself. In my view, that is a factor which needs to be taken into consideration in relation to this particular aspect of the matter.
It did, of course, arise from a circumstance, that appears agreed between the parties, to have been a recognition that, at the time of separation, the global financial circumstances were such that the property would not be able to achieve, upon sale, an amount that the parties sought. It was, therefore, not entirely a decision that was made only for the benefit of the wife, but also recognised the fact that increases in value would be beneficial to the husband, over time.
I am satisfied, however, that that post-separation contribution is a factor which places some weight on the assessment of contributions, at least in relation to the immediately realisable assets of the parties. To that end, I am satisfied that an adjustment in relation to the current realisable assets should be in favour of the husband to the extent of approximately 5 per cent, and intend to find that the contributions made by the parties from the commencement of the relationship until the time of trial should be apportioned 55 per cent/45 per cent in favour of the husband.
As I have said, I will address issues in relation to superannuation and the entitlements of each party later in these reasons, but first intend to address those matters that must be considered in relation to the available assets for property settlement. Those are matters that arise pursuant to the provisions of section 75(2) of the Family Law Act.
Section 75(2) is in these terms:
75(2) The matters to be so taken into account are:
(a) the age and state of health of each of the parties; and
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii)a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
(m)if either party is cohabiting with another person - the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii)a person who is a party to a de facto relationship with a party to the marriage; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
In particular, there are two factors that loom large in relation to this matter. The first relates to the future circumstances of the wife and her capacity to provide for her own needs. In that regard, section 75(2) requires the Court to give consideration to the age and state of health of each of the parties. The parties are approximately four years different in age, with the wife the older of the couple. Whilst I rejected the late reliance sought to be placed upon a psychologist’s report, it is clear that the wife has not been in any form of properly remunerative employment for a period of, perhaps, 16 years or more, and is also limited in what employment she can obtain. It is a factor that weighs in her favour with regard to any adjustment that should be considered in respect of the matter.
Additionally, and perhaps most significantly of all, consideration needs to be given to the disparity in future income earning capacity of each of the parties. Here, the best evidence is that the husband has an interest in a business which generates significant income, the best figure being available in excess of $200,000.00 for the financial year ended 30 June 2013. The financial resources, but particularly the income available to the wife is limited, and whilst she has some hopes of perhaps establishing herself in an (omitted) business, I must say, with respect, that I have some doubts as to the real prospects that the wife might have in that regard.
Therefore, whilst there are significant assets available for distribution between the parties, when one considers those two particular matters relating to the ability to earn income of each of the parties and the obvious disparity between the two, and the ages of the parties and, if you like, more generally, the circumstances of the parties, I am satisfied that it is appropriate that there should be an adjustment effected in favour of the wife. In that regard, I am of the view that a 5 per cent adjustment should be effected, which comes back to a determination of the percentage distribution to be effected between the parties as an equal or fifty-fifty distribution in relation to the available assets.
The final step to be taken in relation to such matters requires there to be consideration of whether such an arrangement is just and equitable in all the circumstances, and, I am of the view that that is appropriate. It is also noteworthy that the husband has made a significant financial contribution post-separation, but acknowledges that such contribution, at least insofar as the mortgage payments and outgoings, should continue for a period of four months following the making of these orders, so as to enable the property to be marketed and, hopefully, sold, after which each party will have a significant cash sum available to them, for the purposes of moving forward with their life.
I am satisfied that that is a just and equitable resolution in relation to the matter, and intend to make orders which reflect that continued obligation in relation to payment for a period of four months, from the date of these orders.
As agreed between the parties, I also intend to make orders with regard to a reduction in the mortgage of $18,650 for the mortgage drawdowns which were received by the wife, as well as a direction with regard to the wife being responsible for the payment of the (omitted) Bank credit card in the name of the husband, and that thereafter each party, of course, indemnify the other in relation to any liabilities that they might personally accrue.
SUPERANNUATION:
As indicated, I intend to deal with the issue of superannuation separate and apart from the immediately available assets for distribution. I do that for two reasons. The first is that it is appropriate that there be a consideration of the needs of each of the parties immediately and for consideration of how the asserts, available for distribution at this time, be distributed as opposed to assets which have a future availability.
Secondly, however, and perhaps more significantly, there are distinct differences between the circumstances which led to my determination of what was an appropriate distribution of property between the husband and wife, as opposed to what should occur, in relation to the distribution of superannuation entitlements.
The husband has contributed through his employment, to a superannuation policy since about 1985. That can be gathered clearly from the fact that when he became redundant in the latter part of 1991, he received a redundancy payment, as well as long service and holiday leave entitlements which were available to him, and he was able to call upon non-preserved amounts in relation to superannuation.
The preserved component of his superannuation, however, appears to have been approximately $20,000 and it would seem that that is the amount that has eventually been rolled over into the (omitted) Super Fund, investor number (omitted). The current value of that policy is $392,152. The contributions to superannuation through employment have come about as a result of his work at (omitted) in Western Australia in or about 1 March 1992. Contributions, therefore, would have been made during that period and though there may have been a subsequent rollover, perhaps from 1 March 2000, the start date of the (omitted) Super Fund, the funds initially contributed have continued to grow.
Additionally, as I referred earlier in these reasons, the superannuation of the husband as at 30 June 2013 with the (omitted) Fund was valued at $329,858. The husband has, however, continued to contribute to that policy since separation in December of 2008 and therefore, as at 30 June 2014, the husband had been contributing more to that policy, for a period of up to five-and-a-half years.
The post-separation contributions made by the husband are therefore a factor to be taken into consideration in relation to this matter. The growth in the (omitted) Superannuation personal super fund has also been quite significant. If, as appears to be the case, the value on 30 June 2013 was $329,858 and the value as at 30 June 2014 is $391,155, then the growth has been in excess of $60,000.
That however, does not take into consideration contributions made by the husband and in that regard, the husband’s contributions are reflected in the (business omitted) financial statement, noting that superannuation contributions for the husband in the financial year ended 30 June 2013, constituted $20,070. There is, of course, no evidence as to what might have been contributed during the next financial year, but as there are statutory limitations which would preclude there being any financial advantage in contributions over $25,000, it is abundantly clear that there has been growth, but growth which is, at least to some extent, based upon the increase in the amount invested as a result of contributions, post-separation.
To that end, the legal representative for the husband sought to suggest that there should be a calculation done which, if accepted, would lead to the wife receiving an amount equivalent to 37.65 per cent of the value of the (omitted) Fund. The reason for that calculation is to take into consideration the payments made post-separation.
The legal representatives for the husband noted that there was 22 years and five months and six days from the date that the husband commenced work with his employers in Western Australia to 7 July 2014, the date at which a value is provided. However, they also note that the period of cohabitation from 1 March 1992 to 23 December 2008, is 16 years, 10 months and 22 days and that therefore, the period of cohabitation balanced against the period of contribution to the fund, is almost exactly 75 per cent of the total.
It is using that calculation that it is suggested that there should be a reduction in the entitlement of the wife. I am mindful of the fact that the wife is older than the husband. I am mindful of the fact that the wife does not have superannuation entitlements herself, or at least if she does, does not recall what they might be or with whom any investment might be made.
More particularly, she does not have any future prospects of contribution to superannuation and therefore, whatever she might receive by way of an entitlement in relation to the husband’s superannuation, is the totality, in all likelihood, of what might be contributed to superannuation and available to her, upon retirement. I say that particularly in light of the fact that whilst, with respect, the wife has proposals in relation to the establishment of a business post the determination of these proceedings, there is little indication or evidence of the profitability of such a business or more particularly, even of the wife’s capability of conducting such a business.
Noting, of course, that separation occurred more than five-and-a-half years ago and that the wife has not been in employment of any real nature during any of that time or for perhaps 10 years or more prior to separation, the likelihood of the wife, therefore, being able to establish a business which would, in due course, be able to provide for her, but also to have funds sufficient to ensure that she were able to make contributions to superannuation, is not a likely outcome in all the circumstances. It is a relevant consideration, therefore, in relation to this matter, because of the obvious expectation that the husband, being some years younger than the wife and in employment, will be able to continue to contribute to his own superannuation and to its increase.
In any event, it is not, in my assessment, an appropriate exercise of the discretion of the Court in relation to the matter to suggest there simply should be a mathematical calculation done in relation to what might or might not be the wife’s entitlements. There needs to be that consideration to which I have referred, of the future prospects of each of the parties balanced against the fact that the current value of the superannuation is, no doubt, in part, at least, a reflection of the contributions made by the husband to the fund, post-separation. In that respect, I have determined, therefore, that whilst there must be a significant credit given to the husband for the post-separation contributions made to the scheme, there must also be a recognition that there has been, if you like, an accumulation over time of entitlements in relation to superannuation, simply as a result of the initial contributions made as early as 1 March 1992.
Unfortunately, there was no evidence available of a more specific nature than the general figures that have been provided, in relation to the matter as to what might have been the value of the superannuation as at the time of separation or, of course, what its future value might have been, had there been no further contributions made to that fund, post-separation. The best that can be done is to attempt to effect an equitable resolution between the parties.
I am of the view that the appropriate course to follow is to fix a value for the (omitted) Super Fund and the best that can be done in that regard is to assess that it would be $391,155.62 as detailed in the most recent available information. Thereafter, I am of the view that the husband should receive a 20 per cent credit in relation to post-separation contributions and that, therefore, 80 per cent of the value of the superannuation should be included for the purposes of distribution between the husband and the wife. 80 per cent of $391,155.62 equals $312,924.50.
Having determined previously, that contributions and other factors which need to be considered in relation to a distribution should also be applied in relation to the financial resource, which becomes available in due course with regard to superannuation, I am satisfied using the same reasoning that the wife should then receive one half of the value of that available fund. To that end, I’m satisfied that the appropriate and reasonable order to make is for there to be a splitting order equivalent to one half of 80 per cent of the value allotted to the superannuation entitlement. That is equivalent to $156,462.25.
I am satisfied that a splitting order directed to (omitted) Superannuation with regard to the splitting of the superannuation policy of the husband would affect a just and equitable distribution between the parties, particularly being mindful of the fact that the wife may be in a position within a short period of time to call in those funds, as a result of her circumstances. It is appropriate and provides reasonably and equitably for the contributions of the parties and for the significant additional contributions made post-separation by the husband.
I note also that there remains in existence the (omitted) Bank deferred annuity, which as best one can assess, has a value in the vicinity of $25,000.00 to $26,000.00. That annuity, however, is the result of the preserved funds from the husband’s previous employment in (omitted). As best one can assess, his entitlements in that regard were almost entirely accrued prior to the parties’ commencing their relationship whether it was, as suggested by the wife, in or about the latter part of 1989 or otherwise in or about the early part of 1990.
The wife, however, received a significant benefit, as did the husband when the non-preserved funds were made available to the parties at the time of the husband’s redundancy in the latter part of 1991. I am satisfied that if justice is to be done in that regard, noting that the wife would also have received the benefits that were received as a result of the redundancy and holiday and long service leave entitlements received by the husband, that is appropriate that the amount held in the (omitted) Bank deferred annuity should be retained by the husband.
I do not, therefore, intend to make any order with regard to the splitting of any entitlement held in the (omitted) Bank deferred annuity in the name of the husband.
Finally, there is a further matter that needs to be addressed, relating to the payment of the add-back of the mortgage draw-downs made by the wife, as well as the repayment of the (omitted) Bank Credit Card credit card held in the husband’s name, but which has been utilised by the wife. There is approximately $56,000 to be refunded by the wife in relation to such liabilities: $18,650 in reduction of the mortgage and $37,178 in relation to the current liability arising from the (omitted) Bank credit card.
I have considered in detail what arrangements should be made in that respect and have come to the view, that if justice is to be done to the parties, particularly in light of the lack of disclosure that has arisen from both, that there are certain adjustments that should appropriately be made, which will enable an easier finalisation of the affairs between the parties.
To that end, I am of the view that is appropriate that whilst there has been, as best there can be, an assessment of the value of the husband’s (hobby omitted) collection and his interest in the business (business omitted), it is appropriate that he retain those, but in doing so, there should also be required to be balance against liabilities that have been attached to the wife.
To that end, whilst I am aware that the parties had acknowledged that the draw down from the mortgage had been retained by the wife and that the (omitted) Bank credit card had been utilised by the wife entirely for her purposes, it is appropriate that the addition of $18,650 in relation the actual equity held in the home at Property P once sold should be added, but not otherwise adjusted between the parties, other than by way of an equal distribution. Similarly, before distribution of such funds, it is just and equitable that the amount of $37,178 should be paid to the (omitted) Bank credit card and that thereafter, the husband should indemnify the wife in relation to any liability that attaches to that card.
There should not, however, be an adjustment as a result of the wife being entirely responsible for such payments being made. I’m satisfied that that takes into consideration, the responsibilities and obligations that arise in relation to the wife’s drawing down of such funds. But also recognises the non-specific nature of the value, both of the (hobby omitted) collection, to be retained by the husband and the retention of his interest in the business, which not only pays a significant income, but which it would seem has a value which is unable to be more specifically assessed than one quarter of what the financial statements would indicate is the equity in the corporation.
Such considerations have been included by me in the final determination of the property settlement to be effected between the husband and the wife and are reflected in the orders detailed at the beginning of these reasons.
I certify that the preceding one hundred and ten (110) paragraphs are a true copy of the reasons for judgment of Judge Coker
Associate:
Date: 6 November 2014
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Family Law
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Property Law
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Equity & Trusts
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Statutory Construction
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