NASLUND & NASLUND

[2020] FCCA 2498

FEDERAL CIRCUIT COURT OF AUSTRALIA

NASLUND & NASLUND [2020] FCCA 2498

Catchwords:
FAMILY LAW – Property – long marriage – weight to be given to the husband’s compensation payment and inheritance – defined benefit fund.

Legislation:

Family Law Act 1975 (Cth), ss.75(2), 75(2)(b), 75(2)(o), 78, 79, 79(1), 79(2),

79(4), 90XT(1)(a), 90XT(4), 106A

Family Law (Superannuation) Regulations 2001 (Cth)

Cases cited:

De Angelis & De Angelis [1999] FamCA 1609

Dickons & Dickons (2012) 50 Fam LR 244

Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143

Stanford v Stanford (2012) 247 CLR 108

White & Tulloch v White (1995) FLC 92-640

Applicant: MR NASLUND

Respondent: MS NASLUND

File Number: MLC 14358 of 2018

Judgment of: Judge Harland

Hearing dates: 1 & 2 June 2020

Date of Last Submission: 2 June 2020

Delivered at: Melbourne

Delivered on: 9 September 2020

REPRESENTATION

Counsel for the Applicant: Mr Matta

Solicitors for the Applicant: Sayer Jones

Counsel for the Respondent: Ms Swann

Solicitors for the Respondent: Aughtersons

ORDERS

1. That within 60 days of the date of these Orders the wife pay to the husband the sum of $428,508 (“the payment”).

2. That contemporaneously with the payment in Order 1:

   (a)The husband shall do all such things and execute all documents necessary to transfer the property situated at and known as B Street, Suburb C being the whole of the land contained in folio identifier Volume ... Folio ... (“the property”) to the sole name of the wife;

   (b)the wife shall pay all monies necessary to discharge and remove all mortgages, charges, encumbrances and all other liabilities, whether in law or equity for which the husband bears any actual or contingent liability at the date of these Orders.

3. That pending transfer of the property provided for in Order 2, the wife shall be responsible for all mortgage payments, statutory rates and charges, other utilities, insurances, outgoings and expenses in relation to the property incurred prior to the date of transfer and shall make all such payments as and when they fall due and hereby indemnifies the husband in respect of all other liabilities incurred prior to the date of transfer.

4. That in the event the payment is not made in compliance with Order 1, then within a further 14 days, each party shall do all things necessary to cause the property to be sold by private treaty, or such other method as may be agreed, at the earliest possible date at a price to be agreed between the parties and failing such agreement, to be determined by the President of the Victorian Division of the Australian Property Institute or his/her nominee and that the proceeds of sale shall be disbursed in accordance with Order 5 herein.

5. That the proceeds of sale set out in Order 4 herein be disbursed as follows and in that priority:

   (a)In payment of agents commission, advertising expenses, conveyancing adjustments and legal expenses of the sale;

   (b)In payment of costs incurred in relation to the nomination of a real estate agent (if any), in payment of costs incurred in relation to the nomination of a solicitor (if any) and in payment of costs in relation to determination of value or selling price by the President of the Victorian Division of the Australian Property Institute or his/her nominee (if any);

   (c)Discharge of all mortgages secured on title;

   (d)Thirdly, an amount that enables a payment to the wife such that she receives 45% of the total realisable assets of the parties; and

   (e)Fourthly, the balance to the husband.

6. That in relation to the husband’s superannuation interest in Military Super (service number ...) (“the Fund”):

   (a)There be an allocation for the purposes of section 90XT(4) of the Family Law Act 1975 a base amount of $66,759.50 to the wife from the husband’s interest in the Fund;

   (b)Pursuant to section 90XT(1)(a) of the Family Law Act 1975 whenever a splittable payment becomes payable in respect of the husband’s entitlements in the Fund the Respondent will be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using the base amount specified in Order 6(a) and there will be a corresponding reduction in the entitlement the husband would have had in the Fund but for this Order;

   (c)Order 6(b) will take effect from the operative time being four business days after the day a sealed copy of this Order is served upon the Trustee of the Fund;

   (d)Having been afforded procedural fairness the trustee of the Fund will be bound to observe the provisions in Order 6 and the requirements pursuant to the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001;

   (e)There be liberty to apply to each party and the trustee of the Fund in relation to the implementation of the Orders affecting the superannuation interest.

7. That in relation to the husband’s superannuation interest in E Super Fund (member number ...) (“the Fund”):

   (a)There be an allocation for the purposes of section 90XT(4) of the Family Law Act 1975 a base amount of 100% of the fund to the wife from the husband’s interest in the Fund;

   (b)Pursuant to section 90XT(1)(a) of the Family Law Act 1975 whenever a splittable payment becomes payable in respect of the husband’s entitlements in the Fund the wife will be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using the base amount specified in Order 7(a) and there will be a corresponding reduction in the entitlement the husband would have had in the Fund but for this Order;

   (c)Order 7(b) will take effect from the operative time being four business days after the day a sealed copy of this Order is served upon the Trustee of the Fund;

   (d)Having been afforded procedural fairness the trustee of the Fund will be bound to observe the provisions in Order 7 and the requirements pursuant to the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001;

   (e)There be liberty to apply to each party and the trustee of the Fund in relation to the implementation of the Orders affecting the superannuation interest.

8. That pursuant to s.78 of the Family Law Act that each of the husband and the wife shall be and hereby are declared to be the sole and absolute owner at law and in equity of:

   (a)all items of furniture, furnishings, personalty, chattels and jewellery;

   (b)all monies (whether held in cash or in deposit with any financial institution);

   (c)any motor vehicle;

   (d)all contributions to or benefits or entitlements arising from membership of any fund of insurance or superannuation whether such interest be present, contingent or expectant;

   in the possession, custody or control of each party in which either has an interest which are not otherwise dealt with in these orders.

9. That in the event that either party should fail, neglect or refuse to sign or execute any deed, document or instrument required by or to give effect to these Orders then pursuant to s.106A Family Law Act that the Registrar of the Federal Circuit Court of Australia, Melbourne Registry shall be and is hereby authorised, empowered and directed to sign and execute such deed, document or instrument in the place and instead of such party and to thereafter do all things and acts as are necessary to give validity and operation to same.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 14358 of 2018

MR NASLUND

Applicant

And

MS NASLUND

Respondent

REASONS FOR JUDGMENT

1. The parties were in a 29 year relationship. The husband will turn 60 this year. The wife is 59. 

2. Both parties had modest assets at the beginning of the relationship. The parties started living together in 1988. They married in 1989. They are now divorced. The husband says they separated on 13 October 2017. The wife says they separated on 16 May 2018. Nothing turns on this.

3. At the beginning of the trial I made rulings with respect to objections to evidence. I did not grant leave for the affidavit of Mr F with respect to the husband’s superannuation entitlements to be relied upon, as the affidavit was filed well outside the time frame and leave was not sought. Significantly, it was not raised at the compliance check a few weeks prior to the final hearing. My trial directions are clear. It is not good enough to say that there is no prejudice to the other party as they have received the affidavit prior to the trial, whilst late. In any event, Mr F’s affidavit little advanced matters as he agrees with the single expert’s valuation. 

4. The cross-examination of the parties was brief, which reflects the fact that the controversies between the parties primarily centres on legal argument. The parties’ Counsel helpfully prepared written submissions overnight and spoke to those.

5. The issues in dispute between the parties are as follows:

   a)the weight that should be given to the husband’s lump sum contributions of his compensation payment and his inheritance from his uncle;

   b)the income disparity between the parties;

   c)the treatment of the husband’s defined benefit superannuation entitlements; and

   d)whether or not the wife’s prospective inheritance should be taken into account.

The parties’ legal and equitable interests

1. At the beginning of the trial there were several minor items in dispute. To the parties’ credit, by the end of the trial the only item of the balance sheet that remained in dispute was the value of the wife’s car. At the end of the trial the parties’ Counsel tendered a joint balance sheet which is marked as exhibit 4.

2. The wife relies on her Redbook valuation which is included in the court book at page 1089, and the photos she attaches showing the car in a poor condition and being worth only $400. The Redbook valuation sets out four values in accordance with the condition of the car. The highest value is $5,100. The husband says he has a Redbook valuation of $7,900. He has not seen the car for some time and does not know its condition. More importantly he does not include his valuation in evidence. In cross-examination the wife said the car is insured but there is an excess of $500. The husband’s Counsel submitted that the husband’s value, less the excess, should be included as it is open to the wife to have the car fixed. The wife’s Counsel opposed this, arguing that this was speculative. The only evidence as to value before me is the wife’s Redbook valuation. I cannot be satisfied that if the wife had the car fixed its value would increase from $400 to $7,900. The husband’s figure is well above the highest value for the car if it was in new condition. The wife has included photographs of the car which show the car is not in new condition. I will accept the wife’s value of $400.

3. Having resolved the issue of the value of the wife’s car, I find that the parties’ legal and equitable interests are as follows:

Assets	ownership	$
B Street, Suburb C	Joint	$850,000
Husband’s savings (according to his evidence)	Husband	$6,000
G Ltd 400 shares at $14.97 per share	Husband	$6,000
H Ltd 400 shares at $2.67 per share	Husband	$1,000
Motor Vehicle 1 (damaged and poor condition)	Wife	$400
Motor Vehicle 2	Husband	$5,000
Motor Vehicle 3	Husband	$8,000
Total Assets	$876,400
Liabilities
CBA Bank Mortgage registered over B Street, Suburb C	Joint	$50,022
Total Liabilities	$50,022
Net assets	$826,378
Superannuation
Military Super entitlements	Husband	$399,837.26
J Super Fund entitlement	Husband	$162,430
K Super Fund	Wife	$103,888.39
Total Superannuation	$666,155.65

Legal principles with respect to property division

1. Part VIIIA of the Family Law Act (“the Family Law Act”) governs property, spousal maintenance and maintenance agreement between married couples. The major provisions relating to marital property division are contained in ss.79(1); 79(2); 79(4); & 75(2) of the Family Law Act.

2. Until the High Court decision in Stanford v Stanford (2012) 247 CLR 108, the position in respect of the process to be applied to the resolution of matrimonial property cases was said to be well settled, with a preferred approach as set out by the Full Court in Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39].

3. The High Court considered the operation of s.79 of the Family Law Act in the matter of Stanford. In this case, the majority stated at paragraphs 35 to 36 that:

   35. “It will be recalled that s 79(2) provides that "[t]he 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) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.”

   36. The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.” [Footnotes omitted]

4. The High Court found three fundamental propositions with respect to the application of s.79, which can be summarised as follows:

   1. Firstly, in order to ascertain whether it is just and equitable to make a property settlement order, it is necessary to identify the existing legal and equitable interests of the parties in the property. The High Court emphasised the word ‘existing’.

   2. Secondly, although s.79 gives the court a broad power to make property settlement orders it may not be exercised in an unprincipled fashion. There must be no assumption that the parties’ interests are or should be different to their existing interests.

   3. Thirdly, when considering whether making a property settlement order is just and equitable the court must not assume that one or the other party has the right to a property adjustment order. The court must give separate consideration to s.79(2) in addition to the matters referred to in s.79(4).

5. In Stanford the High Court indicated that, in the vast majority of matrimonial property cases, the requirements of s.79(2) will be readily satisfied, largely as a result of a consideration of the circumstances of the parties concerned, particularly the nature of their separation.

6. The High Court also pointed out that what is just and equitable is different in every case.

7. As one of the controversies between the parties is the weight to be given to the husband’s compensation payment and inheritance received during the marriage, it is worthwhile setting out paragraphs 17 to 21 of the Full Court in Dickons & Dickons (2012) 50 Fam LR 244:

   17. Within that context, then, it is self-evident that financial contributions (whether direct or indirect) can be made to a relationship that have an effect on the property of the parties without those financial contributions finding their way directly into, or being directly linked to, specific property or, indeed, directly to the totality of the property available for distribution at the time of trial. Financial contributions can be made to the “…acquisition, conservation or improvement…” of property “…directly or indirectly…” (s 79(4)(a). …  A financial contribution can be made indirectly by, for example, the use by parties of income or assets for purpose A freeing up the use of other income or assets for purpose B.  Moreover, a particular financial contribution might have been used wholly in discretionary expenditure which, but for that contribution, would not have been available to the parties or would have required borrowings or a diminution of capital.  Such a contribution can also, in that way, be seen, for example, as an indirect contribution to the conservation of property.  Indeed, the principles discussed for example in In the Marriage of Kowaliw (1981) FLC 91-092 and In the Marriage of Townsend (1995) FLC 92-569, can be seen as an exception to that general proposition.

   18. Any and all such contributions, whether or not they sound in, or are directly linked to, the property available for distribution, should be considered and assessed together with the nature, form and extent of all other contributions of all types contemplated otherwise by s 79(4). 

   19. That is true of assets or income generated within the relationship and it is equally true of assets or income coming from outside of the relationship (for example, as here, in the form of inheritances). In the same way, s 79(4) specifically requires the Court to take into account contributions made to the welfare of the family (and substantively and “…not in any merely token way…”; see, Mallett v Mallett (1984) 156 CLR 605 at 636 per Wilson J) notwithstanding that those contributions may not be, or cannot be seen to be, directly linked to the available property at trial, or any increase or decrease in the value of the property. 

   20. Put another way, consistent with authority, the s 79 discretion involves as a necessary requirement that “… trial Judges weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such an assessment into a percentage of the overall property of the parties or provide for a transfer of property in specie in accordance with that assessment.” (In the Marriage of Aleksovski (1996) FLC 92-705 at 83,437).  In Aleksovski, Kay J outlined the well-known “gold bar” analogy and said “[w]hat is important is to somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship” (at 83,443). 

   21. Those same principles can be expressed as saying that the requirements of the section are met by approaching the assessment of contributions holistically and by analysing the nature, form, characteristics and origin of the property currently comprising that to which s 79 applies, and, in turn, analysing the nature, form and extent of the contributions (of all types) contemplated by s 79).  That task is also undertaken by reference to the nature and form of the particular marriage partnership manifested by the particular circumstances of this particular marriage.  Is it, for example, a relationship, as Deane J put it in Mallett at 640-641 “…where the parties have adopted the attitude that their marriage constituted a practical union of both lives and property…” or is it, for example, a union where parties lived very separate domestic and financial lives?  

Contributions

1. The wife stopped working shortly before the parties’ oldest son Mr L, now aged 29 was born. The parties have two other sons, Mr M aged 27 and Mr N aged 25.

2. When the parties met both were working in the Army reserves. During his period in the reserves the husband was posted to Country O for three months when the wife was pregnant with their first child. From 2007 until 2012 the husband was posted in New South Wales. During that period he was also posted overseas on four occasions. The husband has remained employed with the Australian Defence Force ever since. During the relationship he spent significant periods working away from home.  The husband was injured at work. He spent some time at home in 2012 and 2013 as he recovered from his injuries which required him to have surgery and which resulted in him receiving compensation. In 2014 the husband was posted to Western Australia and remained there until 2017. He is currently posted in New South Wales having returned in March 2020.

1. The wife returned to work part-time when their youngest son was in year one.  She transitioned to full-time work when their oldest son was in year six.

2. The husband was away for portions of the marriage and in which time the wife was responsible for managing the household and caring for the children. Of course, the husband spent these periods away in order to provide financially for the family. He was able to spend such long periods away because the wife was looking after the children and the home. The wife was also responsible for managing the family finances. She says she always consulted with the husband about these decisions.

3. The husband complained that he was kept in the dark about the parties’ finances and about the wife keeping him on a strict budget where he only had an allowance of $150 a week. However, this is not true as during cross-examination he had to concede that he had accessed and used his Defence Forces savings account and also had access to the parties’ credit card. The bank statements evidencing the husband’s access to the accounts are marked as exhibit 2. The husband continued to pay the mortgage on the former matrimonial home until February 2019 when orders were made for the wife to pay the mortgage. The mortgage is modest.

The husband’s compensation payment and inheritance

1. In 2012 the husband was injured and as a result had a period of time off work and then a period of working part-time. During that period, the Department of Veterans Affairs (“DVA”) supplemented his income. He received three payments in 2012 and 2013 from the DVA totalling $40,411. These were payments making up the difference in his income. 

2. In 2013 he received a lump compensation payment of $68,699. The husband says this was for pain and suffering. This sum was used for the benefit of the family. The husband seeks to include the $40,411 in income payments in addition to the $68,699 lump sum compensation payment. This would be double counting to include the $40,411 payment, as this payment meant that the husband’s income did not reduce.

3. The wife does not dispute the fact that the husband received the sum and that the monies were applied to the benefit of the relationship. During the hearing the husband’s Counsel was at pains to have the wife concede that but for the husband’s lump sum payments the home loan would not have been reduced by some $45,000. During submissions the wife’s Counsel argued that the evidence does not establish this but that the wife acknowledges that it was used for the benefit of the relationship. For the purposes of my determination it makes no difference as there is not a dispute that it was used to benefit the family and must be taken into account as a contribution. Neither of these sums were quarantined.

4. Given the concession that the sum was for the benefit of the family it does not matter that the funds were applied directly to the mortgage or to other family expenses which the parties otherwise would have paid for from their income. Clearly these are contributions by the husband which need to be taken into account when assessing the parties’ contributions and determining a just and equitable outcome.

5. In 2013 the husband inherited the sum of $114,873 from his uncle. The wife does not dispute that and says that she also contributed through the supports she gave to his uncle. She does not provide sufficient evidence to establish that this should be treated as a joint contribution rather than a contribution by the husband. The husband acknowledges that the wife did provide some assistance to the husband’s uncle including paying bills for him.

Section 75(2) factors

1. The parties are of similar ages. The wife sought to raise some health issues in her affidavit but these were successfully objected to as irrelevant, as the wife does not suggest that the health issues impact on her ability to work or her income earning capacity.

2. Both parties intend to keep working.

3. Somewhat surprisingly, given the issues in this case, neither party sought financial advice with respect to the timing of retirement and the income required to meet their costs of living. Both parties can access their superannuation now if they retire. Both need an income in order to be able to pay for their respective living expenses. 

4. In addition to the husband’s base rate of pay he also receives allowances and is salary sacrificing into his superannuation. This includes various allowances of approximately $15,000 on top of his base salary which is approximately $82,000 a year. During the marriage the husband was also entitled to a rental allowance as he was posted away from home. The husband is living on the barracks. He pays mess fees of $250 a week which includes utilities. In addition he pays for his food. His living expenses are modest. It is appropriate to consider his salary package with those allowances, which bring his salary to $107,000.

5. The wife earns approximately $58,000. There is an income disparity between the parties that is likely to remain for at least 12 months and likely longer. It is unknown whether or not the husband will be able to earn a similar income in civilian employment.

6. The parties’ three adult sons all live with the wife in the former matrimonial home. All three are in full-time employment. The wife says she has never asked them what they earn as she does not see that it is any of her business. She has never asked them to pay board.

7. It was clear from the wife’s answers in cross-examination that she has not given much contemplation to what she would do if she cannot retain the former matrimonial home. She would like to remain in the former matrimonial home and continue to enjoy the lifestyle the parties enjoyed when married. The former matrimonial home is on 1000m² of land and is a four bedroom plus study home. The husband also wants to rehouse himself.

The wife’s prospective inheritance

1. I must determine whether the Court considers that the justice of the case requires the wife’s prospective inheritance to be taken into account under s.75(2)(o).

2. The wife’s father is currently 91 years of age and suffers from Alzheimer’s disease. There is no dispute that he has lost testamentary capacity. His will is in evidence. His beneficiaries are his four children of his second marriage, including the wife. He has two children from a previous relationship. The wife asserts that the estate is currently worth about $460,000.

3. The husband argues that the wife’s prospective inheritance should be taken into account as a financial resource for the wife. The wife says it is too remote and that it should not be taken into account. She says her father is in robust health and that she does not expect to receive a share of the inheritance within the next four to five years. The wife further submits that she expects the inheritance to diminish with the costs of her father’s care and that she does not know how much her inheritance will be, particularly if the two children from his first marriage pursue a share of the estate.

4. The husband asserts in his written submissions that the wife’s prospective inheritance should be taken into consideration by the Court under ss.75(2)(b) and (o) of the Family Law Act. He submits that by ignoring the prospective inheritance, the Court will be ignoring the realities of the wife’s circumstances.

5. He further submits that the proposed inheritance cannot be ignored as a financial resource and that it is the wife’s own evidence at Item 56 of her financial statement filed 8 May 2020, where she includes the sum of approximately $50,000 from the prospective inheritance upon the death of her father as an interest to which she is entitled.

6. Alternatively, the wife submits that the potential inheritance is not a financial resource, is currently not available to her and cannot be quantified. She further submits that the Full Court in White & Tulloch v White (1995) FLC 92-640 have observed at paragraph 25 that an expectancy could not be said to be a financial resource pursuant to s.75(2)(b), “that term connoting some degree of entitlement to, control over, or relative certainty of receipt of property.”

7. The wife’s mother in White & Tulloch v White was around 81 or 82 years of age and in good or reasonable health. In this case, the wife’s father does not have any testamentary capacity and his will is unlikely to be altered, alluding to at least some degree of entitlement on behalf of the wife. However when she might receive this inheritance and its quantum is uncertain.

8. The Full Court in White & Tulloch v White have made it clear that there is no absolute rule with regard to prospective expectancies:

   45. We do not consider there is any absolute rule. The ultimate criterion is whether the evidence is, or may be, relevant to the just and equitable process under s.79. An expectancy of an inheritance will not be relevant in many s.79 proceedings. In the end, relevance must depend upon the nature of the claims being put forward and the facts of the particular case. For example, if the claims were based entirely upon contributions, it could not be suggested that an issue of expectancy could be relevant because no s.75(2) factors would be involved. Where the claim includes s.75(2) factors, the nature or degree of suggested relevance between those specific claims and the expectancy in question would need to be analysed. That is to say, there must be a worthwhile connection between a specific element of the party’s case and the suggested expectancy.

9. Both parties make reference in their written submissions to paragraph 51 of the Full Court’s decision:

   It is ultimately a question of fact and degree. During the course of argument a number of obvious examples at each end of the spectrum were referred to. In a case where the testator had already made a will favourable to the party but no longer had testamentary capacity and there was evidence of his or her likely impending death in circumstances where there may be a significant estate, and where there was a connection to s.75(2) factors, it would be shutting one’s eyes to the realities to treat that as irrelevant. On the other hand, the bald assertion that one of the parties has an elderly relative who has property and is or is likely to benefit that party is so speculative that it would be inappropriate to contemplate it as relevant in a s.79 determination, it being too remote to affect the justice and equity of the case in any worthwhile way.

10. The wife submits that the law has not changed since White & Tulloch v White and the question still remains one of fact and degree.

11. The wife’s father is 92, has executed a will favourable to the wife and her siblings and no longer has testamentary capacity due to his suffering from Alzheimer’s disease. His projected life expectancy is unknown. The wife’s circumstances fall in between the two extremes outlined above by the Full Court in that the wife is very likely to receive an inheritance from her father, however there is no evidence to suggest when this will occur or how much she will receive.

12. The wife further submits that this case can be distinguished from that of De Angelis & De Angelis [1999] FamCA 1609. The wife’s prospective inheritance in De Angelis was taken into consideration by the trial judge and upheld by the Full Court as the wife had a very real expectation of inheriting the two properties with an estimated worth of $500,000, which was roughly the same value as the matrimonial asset pool to be divided between the parties. There was evidence at trial about those properties and contributions were made by the husband towards the improvement of those properties.

13. The wife submits that the husband has not demonstrated the necessary connection between the prospective inheritance in this case and s.75(2) factors. She further submits that there is no evidence on which the court can make any findings about the state of health and the financial circumstances of either party’s elderly parent, other than the parties’ own “bald assertions”. The husband maintains that the reality of the wife’s circumstances cannot be ignored however does not provide evidence establishing a connection between the prospective inheritance and relevant s.75(2) factors. There is no evidence as to the value of the father’s estate, costs of a nursing home or other medical care costs.

14. The wife’s prospective inheritance will be a much smaller amount compared to the parties’ overall asset pool. There is no evidence before me to suggest that it would be unjust to the husband if the Court did not take into account the prospective inheritance.

15. In her trial affidavit the wife includes one sentence referring to the husband’s mother being 82 years old and having an estate worth approximately $1,000,000. There is no evidence in support of this assertion. The wife did not press at trial that this should be a financial resource for the husband. My impression is that it was raised in answer to the husband’s contention that her prospective inheritance should be taken into account.

16. Neither parties’ prospective inheritance will be taken into account under s.75(2)(o).

The husband’s military superannuation

1. One of the major areas of dispute between the parties is how the husband’s defined benefit entitlements with the Military Superannuation and Benefits Scheme (“Military Super”) should be treated. There is no dispute between the parties about the valuation of his entitlements which are currently valued at $399,837.26. The issue in dispute is when and in what circumstances the husband could withdraw this lump sum.

2. Towards the end of the hearing, the parties agreed upon interim orders restraining the Trustee of Military Super from making any splittable payment in the interim. Exhibit 3 is also correspondence from the husband’s solicitors to the wife’s solicitors dated 12 May 2020 providing an undertaking that the husband will not access his superannuation entitlements pending any final orders being made.

3. The wife argues that the husband turns 60 this year and that his defined benefit interest should be treated as a realisable rather than a preserved asset because the husband can choose to retire at 60. The husband says his position is no different to the wife’s as she has also reached her preservation age which is 57 and not 60 as she believed. Neither party intends to retire in the short term. The husband gave evidence that whilst ordinarily retirement age is from 60, his employer has indicated that given the pandemic there is an increased demand for defence services and that they intend to extend his contract for another 12 months. The husband expects written confirmation to be provided within the next couple of months. After that he intends to seek civilian employment. He has not made enquiries as to the types of employment he could engage in and the income he could expect to receive. The husband would be entitled to take a pension of approximately $20,000 but does not currently plan to do so.

4. The wife says that the husband is able to access his defined benefit entitlements as a lump sum when he leaves the army regardless of whether or not he obtains civilian employment or retires. The husband disputes that he would be able to access the defined benefit entitlements as a lump sum without retiring. The trust deed and other documents for Military Super are included in the court book. There is nothing in the trust deed which supports the wife’s contention. The preserved benefits summary document included at page 870 of the court book supports the husband’s contention that he cannot access his superannuation entitlements as a lump sum until he retires. There is also correspondence from his lawyers confirming that understanding after the husband consulted with his financial advisor.

5. The wife advances this argument as she seeks to keep the former matrimonial home. She said she has made enquiries of her bank and understands that she will be able to borrow $327,000 which will enable her to make a payment to the husband and pay her legal fees.[1] The wife says the only way she can afford to keep the home is if the husband keeps all of his defined benefit interest. The wife is understandably keen to maintain the lifestyle she enjoyed during the marriage and is well settled in that local area. It is clear that she has not given much thought to alternatives to staying in the former matrimonial home. She does have all three children living in the home. She said her eldest son bought a block of land with his girlfriend and so will move out at some stage in the foreseeable future. The wife has not considered the alternative which is to seek the assistance of her sons, whether by charging board or by one of more of them financing the mortgage with her.

   [1] I note the husband took out a personal loan to pay his legal fees. Neither party used joint funds to pay their legal costs.

6. The evidence does not support the wife’s contention that the husband’s Military Super should be treated as readily realisable now or in the immediate or near future. Rather both parties are in similar positions. Both parties’ positions in wanting to continue to work are reasonable as the assets each will receive are not so great that they will be able to purchase a home and generate an income sufficient to pay for their living expenses from those assets.

7. I am satisfied that a two pool approach should be applied in this case. I am satisfied that the husband’s superannuation is not currently nor about to become realisable. It is not sufficient for the court to identify the parties’ existing legal and equitable interests. The court must also consider the nature and characteristics of those interests in determining a just and equitable outcome.

Conclusion

1. I am satisfied that it is just and equitable to make property orders. I am further satisfied that a super splitting order should be made regarding the husband’s superannuation as it would not be just and equitable for the husband to receive assets that are not currently realisable. The husband has assets in his possession with a value totalling $26,000. The wife has her car worth $400. I will give the wife the opportunity to retain the former matrimonial home. If she is unable to refinance and pay out the husband, the house will need to be sold.

2. It is necessary to assess the parties’ contributions holistically. It is appropriate to take a global approach. Both parties worked hard in their respective spheres. The husband contributed two lump sums as well as being the primary income earner. It is important to acknowledge that the wife has engaged in paid employment but also significantly, particularly considering the significant periods where the husband was posted interstate, this necessarily meant that she was responsible for the parenting and home-making contributions during these periods. I acknowledge that in the later years the children were adults.

3. With respect to s.75(2) adjustments, the husband currently has a higher income. However, just as there is uncertainty as to what amount the wife will inherit from her father in the future, there is no evidence as to what the husband’s earning capacity will be when he leaves the army and whether or not it will continue to be greater than the wife’s.

4. Given all of these competing factors with respect to contributions and s.75(2) factors, I am satisfied that the non-superannuation pool should be divided 55/45 percent in the husband’s favour. The parties’ superannuation entitlements should be divided equally.

I certify that the preceding fifty-nine (59) paragraphs are a true copy of the reasons for judgment of Judge Harland

Associate: 

Date: 9 September 2020