Oa**Reilly and Renoir

[2007] FamCA 722

FAMILY COURT OF AUSTRALIA

O’REILLY & RENOIR [2007] FamCA 722

FAMILY LAW – PROPERTY SETTLEMENT – SUPERANNUATION – Order to adjourn proceedings for further hearing of application seeking a splitting order of superannuation interest pursuant to s 90MT Family Law Act 1975 to enable the determination of the value of the interest to be determined in accordance with Family Law (Superannuation) Regulations 2001. Norbis v Norbis (1986) FLC 91-712 and C & C (2005) FLC 93-220 cited.

Family Law Act 1975 s90MT
Family Law (Superannuation) Regulations 2001

Norbis v Norbis (1986) FLC 91-712; C & C (2005) FLC 93-220

APPLICANT: MS RENOIR

RESPONDENT: MR OREILLY

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER: PAF 1430 of 2004

DATE DELIVERED: 20 July 2007

PLACE DELIVERED: Parramatta

JUDGMENT OF: Coleman J

HEARING DATE: 20 & 21 June 2007

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Ms Sarah Bevan

COUNSEL FOR THE RESPONDENT: Self-represented

INDEPENDENT CHILDREN’S LAWYER:

Orders

1. That the proceedings be adjourned for further hearing to a date to be arranged.

2. That costs be reserved.

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Honourable Justice Coleman delivered this day will for all publication and reporting purposes be referred to as O’Reilly & Renoir.

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: PAF 1430 OF 2004

MS RENOIR

Applicant

And

MR O’REILLY

Respondent

REASONS FOR JUDGMENT

1. The proceedings before the Court are brought by Ms Renoir (“the wife”) who seeks orders against Mr O’Reilly (“the husband”) pursuant to Part VIIIB in the following terms:

   1)The Court notes that [the husband] is a member of the [A] Super Plan (Member no. […]) (“the fund”).

   2)That, pursuant to Section 90MT(1)(a) of the Family Law Act 1975 (“the Act”), whenever a splittable payment within the meaning of Section 90ME of the Act becomes payable in respect of the husband’s interest in the fund, the wife shall be entitled to be paid an amount calculated in accordance with the Family Law (Superannuation) Regulations 2001 (“the Regulations”), using a base amount of $100,000 and that there be a corresponding reduction to the entitlement the husband would have had in the fund but for this order.

   3)The operative time for Order 2 is 4 business days from the date of the making of these orders.

   4)That the non-member wife request the trustee to roll-over or transfer the transferable benefits out of the husband’s superannuation interest in accordance with the requirements of the trust deed.

   5)The Court notes, pursuant to Rule 14G of the Family Law (Superannuation) Regulations 2001, any payments from the husband’s superannuation interests made after the trustee has roll-over or transferred the wife’s interest out of the fund are not splittable payments.

   6)That, except as otherwise provided herein, each party is solely entitled, to the exclusion of the other party, to the property (real and personal), financial resources and superannuation currently held in that party’s name or to which that party may be otherwise beneficially entitled.

   7)In the event that either party fails, refuses or neglects to sign any document required to give effect to these orders then the Registrar of this Court is hereby empowered pursuant to section 106A of the Act to sign that document in the place of the party in default and to do all acts and things to give that document full force, effect and validity.

   8)That the husband pay the wife’s costs of, and incidental to, these proceedings. (Minute of Orders Sought by the Wife dated 13 June 2007).

2. The husband opposes the granting of such relief in its entirety.

3. The issue is accordingly whether there should be a “splitting order” in favour of the wife with respect to the husband’s superannuation interest, and, if so, the quantum of such order.

4. The Court has no recollection of the trustee of the relevant superannuation fund having been served with the wife’s application and thus afforded the opportunity, as a matter of natural justice, to be heard in opposition to such application.

5. The preferable course in those circumstances is that, if a splitting order is to be made, the trustee of the superannuation fund be served with the order and given leave to be heard in opposition to such order within a limited time.

Background

1. The facts and circumstances of this case are somewhat unusual and, as will be seen, give rise to some substantial issues for consideration in the exercise of the Court’s discretion.

2. The parties commenced co-habitation in about July 1991, married on 4 January 1992, separated in September or October 1995 and were divorced on 17 December 2002.

3. It is common ground that the parties had financial dealings subsequent to their separation and until 1998. Thereafter, albeit through the children of their marriage, the parties had dealings with each other. Since early 2004 in the case of the wife and early 2005 in the case of the husband, both parties have lived with new partners.

4. There are two children of the marriage. The elder, C, was born in March 1993 and is now aged 14. C has lived with the husband since June 2006. Prior to that time, almost eleven years after the separation of the parties, C lived with the wife. The second child of the marriage, M, was born in July 1994, and is now almost 13 years of age, has lived with the wife since separation.

5. Leave to bring the current application was granted on 8 October 2004. The parties have previously litigated children’s issues, those proceedings finally concluding with orders made by consent on 13 October 2006. In the past five years there have been numerous contested child support proceedings. Those proceedings continue.

6. The husband was born in December 1964. He is accordingly 42 years of age. The wife was born in April 1973. She is 34 years of age. For ten years prior to cohabitation the husband had been a serving member of the Australian Defence Forces and at the commencement of cohabitation had an interest in the DFRDB Fund worth $12 536. Such sum was “rolled over” into another superannuation fund upon the husband leaving the Australian Defence Force at about the time cohabitation commenced, or shortly prior thereto. At the commencement of cohabitation neither party had any other property of significant value.

7. In 1982 the wife inherited a one third interest in remainder to a property at B (“the [B] property”) pursuant to the terms of the last will and testament of her grandmother. The remainder interest arose by virtue of the wife’s mother receiving a life interest in the B property.

8. From 1982 to the present the wife has received no benefits from the B property and made no contributions, financial or non-financial, direct or indirect, to the conservation or improvement of the property. The husband has made no indirect contributions of any kind to the acquisition, conservation or improvement of the B property. The life tenant, the wife’s mother, is currently aged 73 years. There is no evidence before this Court from which any inferences as to the wife’s mother’s potential longevity could be drawn.

9. About a year prior to the commencement of cohabitation between the parties the husband purchased a property at P (“the [P] property”) subject to a mortgage. The husband’s equity in that property was minimal.

10. The property was initially tenanted, the rental receipts being insufficient to cover the outgoings which the husband met from the resultant taxation refund.

11. On 27 November 1992 the parties purchased a property at W (“the [W] property”) for $155 000.00.  The property was purchased in the wife’s name. The whole of the purchase price of the W property was borrowed, such borrowings being cross-collateralised over the P property.

12. From 1993 until its discontinuance in 1997 the wife was engaged in litigation against the solicitor who acted on the purchase of the W property. The husband contributed approximately $9500.00 towards the payment of legal fees with respect to such proceedings. There is no suggestion that the wife’s proceedings were commenced other than on legal advice, nor is there any suggestion that the proceedings were discontinued other than on legal advice. The proceedings can be seen as having involved a loss to the parties over those years of $9500.00.

13. Upon separation in September or October in 1995, the wife and children moved to P. The husband occupied the W property and made mortgage payments on it which he alleges totalled $17 453.00 from separation until the sale of the property approximately 18 months later.

14. Until about 2003 the husband had contact with the children, essentially each weekend and during school holidays. It is apparent that the children were very young when the parties separated. The husband travelled between Sydney and P to see the children.

15. From 1995 until 2001 the husband paid approximately $64 000.00 by way of child support for the children. He was assessed to pay over that period a total of $41 985.00 (Exhibit R2). The husband’s income during that period was substantial. Not surprisingly, the wife had no income at that time, having two children under three years of age.

16. Although separated, in 1996 the parties entered into a business at P, the H business (“the business”). The husband obtained a loan of $30 000.00 to fund the commencement of the business. That sum was subsequently refinanced and secured over the P property.

17. It is common ground that the business was not successful. There is no suggestion that during the period in which the wife worked in the business (from late 1996 to mid 1998) she did other than attend to her duties diligently. There is no suggestion that entering into the business was, or should have been seen by the parties as being, risky or likely to be unsuccessful, nor does the evidence establish that the actions or inaction of either party caused or contributed to its lack of success.

18. In April 1997 the W property was sold for approximately $166 000.00. After payment out of the mortgage then outstanding on the property the sum of $11 697.82 remained. Those monies were applied for the benefit of the parties via the business. 

19. In mid 1998 the wife and the children relocated from P to the Sydney area.

20. In late 1999 the wife suffered an injury from which she was subsequently, in May 2003, compensated by the payment of $22 500.00 which was said to have been for “pain and suffering”. There is no evidence that the husband materially contributed to the acquisition of those monies or to the wife’s convalescence or rehabilitation after sustaining such injuries.

21. In late 1999 the P property was sold. After payment of the mortgage, which included the initial business loan, some $13 255.00 remained. The husband received that sum which he applied in payment of his personal credit card debts.

22. In about March 2000 the husband redeemed or otherwise liquidated what had been his DFRDB superannuation entitlement, $16 000.00 being received which he alleges he applied to discharge “marital debts” the nature, quantum and identity of which he did not prove in evidence. The husband says a further $10 000.00 from the sale of the business was also applied for these “marital debts”.

23. In May of 2000 the husband consolidated all other superannuation entitlements in an A Super account. In December 2000 the husband rolled over his B superannuation entitlement of $76 330.00 to the A Super.

24. The wife commenced cohabitation with her current partner Mr P in March 2004. A child of their relationship, L was born in April 2004.

25. The husband’s employment with C Company continued from 2000 to 2004. On 6 April 2004 the husband was retrenched from his employment by C Company. It is likely that he received a termination payment of approximately $63 530.00 which he rolled over into his A superannuation to create a balance in that account of approximately $150 000.00 by December 2004.

26. On 21 July 2004 the husband was made bankrupt on his own petition. The husband’s statement of affairs filed in relation to such bankruptcy disclosed as his only asset of substance an A “[…] super”, having a balance of $133 000.00.

27. The husband disclosed that he had “transferred, given away or sold” a car which he said to have been worth $20 000.00 in the five years preceding his bankruptcy.

28. The husband’s list of creditors, apparently totalling $73 400.00, included a St George personal loan of $36 500.00, the probabilities being that a substantial portion of which was referrable to a second $30 000.00 facility obtained for the purpose of the business at P.

29. The husband also disclosed that he had, in November 2003, sold a motor vehicle to M Companyfor $20 000.00 which sum the husband claimed to have also utilised to pay creditors, the nature, quantum and identity of which was not revealed.

30. The wife resumed employment in 2004. The wife is currently receiving worker’s compensation payments.

31. The husband last worked in December 2006 at which time his then employment was terminated. The husband has not sought to obtain employment subsequently.

32. The husband married Ms D on 23 January 2005. There is a child of that relationship, D, born in June 2006.

Credit

1. Understandably, given the period since the parties ceased cohabitation, there are areas of the evidence where documentation which would have been instructive has not been provided to the Court.

2. The credibility of the wife does not require serious consideration. The wife made concessions when shown documents during her cross-examination, and presented as an honest and reliable witness.

3. The husband’s actions, particularly in relation to his bankruptcy, and the income upon which child support assessments were based, suggests that his evidence needs to be approached with some caution. It is unnecessary to draw an adverse credit finding with respect to the husband given, as will be seen, that the absence of documentation, including documentation relating to periods for which the husband has some documentation, creates a difficulty in terms of establishing on the balance of probabilities a number of his allegations. Where the evidence of the parties is in direct conflict, the Court prefers the evidence of the wife to that of the husband. That finding is of ultimately of limited significance.

4. More significant are the absences of documentation reasonably expected to exist and to have been able to be tendered in support of the husband’s claims. This is particularly so given the documentation which the husband did have and produced.

The property of the parties

1. The superannuation interest of the husband is said by the husband to be worth $205 000.00. There is no evidence of any valuation of the superannuation interest in accordance with the regulations pursuant to the Family Law Act 1975 (“the Act”).

2. The evidence before the Court suggests that the figure of $205 182.00,  advanced by the husband to be its notional withdrawal value, is likely to fall well short of the value which would be ascribed to the interest were it to be valued pursuant to the regulations.

3. The case has been, sensibly in the circumstances, conducted on the basis that the “value” of the husband’s superannuation interest is $205 182.00. That “value” has a measure of reality about it, notwithstanding that the husband cannot access that sum or any significant part of it for some years. Approaching the case on the basis that the husband’s superannuation interest is worth the figure of $205 182.00 has some attraction.

4. Consistent with the decision of the High Court in Norbis v Norbis (1986) FLC 91-712 and the Full Court in C & C (2005) FLC 93-220, the superannuation interest can be viewed discreetly from any other assets.

5. The only other property of the parties to the marriage or either of them to which reference has been made throughout the proceedings is the wife’s remainder interest in the B property. The Court has earlier referred to the circumstances surrounding the acquisition and conservation of that property.

6. The parties disagree as to the value of the wife’s interest in the property. For her part, Ms E, an expert well qualified to do so, has valued the wife’s interest in remainder on several bases, the most realistic being Scenario C whereby, in reliance upon a valuation of the B property which is not disputed, Ms E concluded the value of the remainder interest at present to be $78 000.00.

7. The difficulty with so doing is that whereas Ms E proceeded on the assumption that the life tenant was aged 70 years, she is in fact aged 73. As such, a shorter period, at least in an actuarial sense, can be expected before the remainder interest vests in possession. Ms E’s other scenarios provide a basis for a working pro rata recalculation of the $78 000.00 referred to in what appears the most realistic scenario.

8. As Counsel for the wife agreed, and the husband did not dispute, a figure of approximately $100 000.00 results from substituting in Ms E’s formula an age of 73 for the 70 years currently appearing in it. It is clear both from Ms E’s May and June reports, albeit commissioned by different parties, that the May valuation reflects Ms E’s professional opinions as to the appropriate approaches to the valuation of the wife’s remainder interest in the B property.

9. The husband relies upon Ms E’s June valuation, the effect of which is to produce significantly higher values for the wife’s remainder interest in the B property. Although the husband would not concede that such was the case, it is apparent from Ms E’s own report that the valuation she provided on the husband’s instructions in June 2007 was not undertaken in the way she would have, had she not been instructed to do so, for reasons which she articulated in the following terms:

   I have been instructed by the Husband to take into account the anticipated increases in the property value when determining the value of the reversionary interest of the Wife in the property. I note that this is not the usual method that I would adopt as the appropriate basis for valuing the reversionary interest held by the Wife in the property. I would usually apply a discount to the present pro rata value of the reversionary interest held by the Wife in the property consistent with the valuation methodology accepted by the Full Court of the Family Court in the matter of Georgeson [In the marriage of Georgeson P and Georgeson M (1995) FLC 92-618]. Prima facie, the present value of an asset that will inflate over a certain period is its nominal value today ie., discounting a forecast value to present value should result in the nominal value if assumptions as to risk and return are consistent. This method takes into account the impediment associated with realisation of the reversionary interest currently held, assuming that the benefits associated with ownership of the asset cannot be accessed until the expiration of a certain period. This method is premised on the assumption that the future growth in the asset that will be achieved over the course of the period to expiration of the specified term is not an asset of the marriage. (Affidavit of Ms [E], of 24 May 2007, filed 13 June 2007, Annexure A, para 2.6).

10. The logical difficulty with the husband’s approach is that it assumes, perhaps for good reason, particular increases in the value of the B property notwithstanding that the exercise, at least for the purpose of these proceedings, is to determine a current valuation of the property. The logic underpinning

    
    

    Ms E’s May approach is, in the Court’s view, not able to be faulted. The artificiality of the June valuation, as Ms E, a thorough and competent expert witness, was careful to point out, is apparent.

11. To the extent that anything turns on it, which the Court does not believe to be the case, the figure of $100 000.00 is regarded as the value of the wife’s remainder interest in the B property. When that will vest in possession cannot be known.

1. To the extent that either party suggests that the assets of the wife’s new partner and/or the husband’s new wife should be taken into consideration in this case, the Court rejects such suggestion. Twelve years after the parties separated, nine years after the parties last had financial dealings, other than in the form of child support, to have regard to the finances of new partners, particularly where there does not appear to be a vast disparity, or inordinate wealth to be available on either side, would not be appropriate.

Contributions

1. Skilfully, Counsel for the wife articulated the contribution based entitlement asserted on her client’s behalf by reference to a number of periods. They were from the commencement of cohabitation to separation a little over 4 years later in about September or October 1995. Then, from separation in 1995 to the end of 1998, by which time, save with respect to child support, the parties had no dealings. Finally, the period from the beginning of 1999 to the beginning of 2004, at which time the wife re-partnered and the husband was still in employment, his remarriage not occurring until January 2005. In a case where assessment of contributions is by no means simple or straightforward, this approach has much to commend it, whatever conclusions the Court reaches with respect to contributions themselves.

2. When the parties commenced cohabitation, save for his DFRDB entitlement which had clearly accrued before the commencement of cohabitation and without contributions of any kind by the wife, the husband had no assets of significance. If he had equity in the P property the evidence suggests such equity to have been minimal. The wife’s only property of significance at the commencement of cohabitation was her interest in remainder in the B property the value of which at that time, though no more than of academic interest, is not known and clearly was not then accessible in any form by her.

3. The inference is irresistible that, during the course of their cohabitation, in various ways the parties contributed approximately equally. The husband contributed more in a direct and indirect financial sense than did the wife. On the other hand, the wife’s contributions as homemaker and parent were undoubtedly greater than those of the husband who was in full time employment at all material times.

4. In reality, albeit perhaps not apparent until the P and W properties were ultimately later liquidated, the only “property” of significance arising from the cohabitation was the husband’s superannuation interest in a fund conducted by B, by whom the husband was employed. The value of that interest at the time of separation was $13 077.59, the whole of which accrued during the period of the parties’ cohabitation.

5. The husband did not make further contributions to his DFRDB entitlement during cohabitation, and probably was not able to as he was not then a serving member of the ADF, the evidence suggesting that he made no contributions to the conservation or improvement of that interest during the years of cohabitation. In the circumstances, to quarantine that interest together with that of the wife in remainder in the B property for the purpose of calculating contribution entitlements would be realistic.

6. The inference is almost irresistible that at the time of separation in 1995 the parties were equally entitled on a contribution basis to the husband’s B superannuation interest worth $13 077.59 and to his A superannuation interest worth $3320.28. The husband does not seriously dispute that proposition, the contention being that his greater contributions, particularly with respect to marital debts thereafter should be seen as having offset any entitlement of the wife as at October 1995.

7. In the period from 1995 to 1998 the wife worked in the business. The business was not particularly lucrative.

8. The husband occupied the W property and paid the mortgage instalments and other outgoings which approximated $250.00 per week. In addition, the husband was responsible for improvements to the W property, the cost of which he did not quantify. There is no evidence as to the impact on the value of the property of the work which the husband thus did.

9. The husband was clearly earning more than the wife. Perusal of tax documents supplied by the husband’s accountants and tendered by him (Exhibit R4) are instructive and reveal the following matters of significance.

10. For the income tax year of 31 July 1996 – 30 June 1997 the husband had a taxable income of $89 595.00, which was reached after allowing losses with respect to the business of $25 839.00. Contrary to the husband’s assertion that the P rental property entailed a loss, in the 1997 tax year it generated a net profit of $199.00.

11. For the income tax year ended 30 June 1998 the husband’s taxable income was $88 157.00 after allowing losses of $26 638.00 from the business. A profit of $54.00 was generated by the P rental property. Interestingly, the working sheets of the husband’s accountant suggest that for the 1998 income tax year the cost of travel between Sydney and P, with a frequency consistent with the contact the husband had been exercising to the children, was claimed by him as a business expense.

12. It is probable that the husband “propped up” the business from his earnings. Although it is clear that a further $30 000.00 was borrowed to start the business, and that an additional $30 000.00 was injected by way of further capital.

13. The evidence suggests that the first $30 000.00 was paid out on the sale of the P property. The husband claims that the surplus resulting from the sale was used by him to meet personal credit card debt. The second $30 000.00, though refinanced or rolled over in various ways thereafter was on balance part of the $36 500.00 which was not repaid when the husband declared himself bankrupt in 2004.

14. The wife undoubtedly, during the period from separation to the end of 1998 bore the greater burden of caring for the parties’ children who were very young, being aged 5 and 4 by the end of 1998.

15. To the extent that the husband sought unquantified costs of travelling to P for contact each alternate weekend, his greater earning capacity at that time suggests that to have been appropriate, and not something which should weigh significantly in the balance.

16. The husband claimed credit for the period from 1995 – 2001 by virtue of his having paid in total $64 000.00 in child support when he was obliged to pay no more than $42 000.00. The Court does not know on what basis the child support was assessed. His earnings over those years reveal that a payment of approximately $10 000.00 per annum in child support was well within the husband’s capacity. In 1998, when his taxable income was $88 000.00, the husband was obliged to pay a mere $2500.00, and in fact paid the more appropriate sum of $10 000.00. The Court thus does not accept that the husband’s alleged generosity in relation to child support between 1995 and 1998 should operate to his advantage.

17. To the extent that the husband claims that he discharged marital debts, there is a dearth of source documentation to support his claims, either with respect to the quantum of marital debts allegedly discharged, or the discharge of such debts. It is to be noted that the husband claims that $16 000.00 of his DFRDB entitlement was utilised to pay marital debts. The evidence does not support that assertion. The husband claims that he applied the net proceeds of sale of the W property for that purpose, a claim unsupported by any source documentation advanced by the husband.

18. As noted earlier, the two $30 000.00 borrowings which undoubtedly existed were as to $30 000.00 discharged on the sale of the P property and as to the other $30 000.00, on the probabilities, discharged as a consequence of the husband declaring himself bankrupt in 2004. The claims of the husband with respect to the period from separation in 1995 to 1998 are thus essentially rejected.

19. Counsel for the wife submitted that the wife should be held to be entitled to 50 per cent of the increase in the value of the husband’s superannuation between 1995 and the end of 1998.

20. As noted earlier the husband’s superannuation interests were worth approximately $16 000.00 at about the time of separation. There is no reliable evidence of the value of the husband’s interest in 1998. The husband’s superannuation interests were worth $76 330.11 in December 2000, at which time the husband rolled his B entitlements into an A fund. The increase in the husband’s superannuation interest between separation in 1995 and December 2000, five years later, was accordingly approximately $60 000.00 or about $12 000.00 per annum.

21. On behalf of the wife it was submitted that the Court should pro rata the increase for the purpose of calculating the entitlements of the parties, the effect of so doing being to treat the value of the interest in late 1998 as approximately $50 000.00, the wife’s entitlement accordingly being $25 000.00. Although less than ideal, in the absence of more reliable figures this approach has much to commend it.

22. Whatever the value of the husband’s non DFRDB superannuation interest at the end of 1998, the evidence establishes an entitlement of the wife on a contribution basis to 50 per cent of such interest. In so saying the Court is mindful of the submission of the husband that a significant proportion of the increase in the superannuation interest between separation and the end of 1998 was referrable to employer contributions. The Court is unaware of any authority, and was referred to none, establishing that such contributions should be quarantined in some manner favourable to the member spouse.

23. Regarding the wife’s entitlement at the end of 1998 as $25 000.00 is, on the figures which flow from doing the calculations with any accuracy, perhaps generous to the husband but, the wife’s case having been thus propounded, the Court does not propose a more generous approach, particularly as the husband, though intelligent, articulate and well prepared for the case, remains a litigant in person.

24. It is then necessary to consider the period from the beginning of early 1999 to early 2004, a period of five years.

25. Counsel for the wife submitted that the wife’s entitlement with respect to the increase in the husband’s superannuation interest between the notional $50 000.00 value in 1998 and its value in 2004, approximately $140 000.00, be fixed at 30 per cent of such increase, a sum of approximately $30 000.00, which, if accepted, would represent an entitlement of approximately $55 000.00 at that time.

26. It is clear that, during the period 1998 to 2004 the only financial dealings of the parties related to child support. During that period the husband, it is clear from the child support record (Exhibit R1) paid child support as assessed from time to time.

27. There is no real scope, other than by artificial and essentially arbitrary approaches, for factoring into a consideration of this period any deficiency in child support provided by the husband. The wife clearly had the greater burden of caring for the children during this period. The husband exercised contact for much of the period on an alternate weekend, half holiday basis.

28. The wife relied upon difficulties associated with the care of the child C by virtue of medical conditions from which C suffered. The evidence in relation to those difficulties is not extensive, not supported by medical or other expert evidence, and, in a quantitative sense, not suggested to have significant adverse implications, none of which is to deprecate the wife’s efforts in caring for the child over those years.

29. The children were young, being aged only 11 and 10 at the end of the period. The children’s ages, the significantly greater burden of the care and the duration of the provision of such care suggests that, other things being equal, to deny the wife any entitlement on a contribution basis to the increase in the husband’s superannuation benefits over this period would be unjust.

30. The husband was earning over that period significantly more than was the wife. Further perusal of tax documents supplied by the husband’s accountants and tendered by him (Exhibit R4) are instructive and reveal the following matters of significance. For the income tax year ended 30 June 1999, the husband had a taxable income of $56 039.00. After allowing losses from the business of $4 173.00. The husband was entitled to a refund of $13 873.60 for that year.

31. For the year 2000, the husband’s taxable income was $37 126.00 after allowing for losses of $33 380.00 with respect to the business at P. The husband became entitled to a refund of $16 515.93.

32. For some inexplicable reason, no documents with respect to the income tax year ended 30 June 2001 appear in the Exhibit.

33. For the income tax year ended 30 June 2002 the husband’s taxable income was $58 042.00, for year ended 30 June 2003 it was $59 250.00, for the year ended 30 June 2004 it was $66 084.00, for 2005 it was $18 071.00 and year ended 30 June 2006 it was $31 914.00.

34. The husband’s case is that he discharged matrimonial debts during this period, in a manner and to an extent at which comfortably offsets any contribution based entitlement the wife might claim with respect to his superannuation interest for the period 1999 – 2004.

35. As noted earlier, the husband was during this period in receipt of a significantly greater income than was the wife.

36. It is apparent from the statements that much of the increase in the husband’s superannuation entitlement was referrable to the earnings of the fund rather than contributions of the husband, such documentation as the Court has revealing the following.

37. As at 30 July 1995 husband had an A investment linked personal superannuation plan in which his interest was worth $3320.28. The husband’s B Superannuation Fund interest as at 31 August 1995 was worth $13 077.59. Both of those interests accrued during the cohabitation of the parties. The husband’s total benefits then were $16 000.00.

38. As at 21 December 2000 the husband rolled his eligible termination payment of $76 330.00 from the B Superannuation Fund into the A Superannuation Fund which subsists to this day. The husband’s interest in the A superannuation policy in May 2000, seven months before the B eligible termination payment was rolled into that fund was $8881.27. The husband’s interest in the A Super Fund as at 30 June 2000 was $14 373.91, that was six months before the B superannuation was rolled into that fund. As at 31 December 2000 the husband’s interest in the A Super, which by that time had included the B Eligible Termination Payment of  $76 330.11, was $160 620.85.

39. The husband’s apparent assertion that the level of his payments into the fund should be taken into account in his favour in these proceedings is not borne out by the details of payments made into the fund for a number of the years revealed by statements from the A and attached to the husband’s affidavit of evidence-in-chief.

40. As has also earlier been noted, the husband made numerous claims with respect to “marital debts”. It is clear that the initial $30 000.00, or what remained of it, borrowed to set up the business at P had been discharged prior to 1999. The husband’s less than satisfactory documentary evidence leaves it open to the Court to find that the other $30 000.00 borrowed from the then Advance Bank was reflected by the $36 500.00 which, by virtue of his voluntary bankruptcy, the husband did not repay in any measure to that entity.

41. The husband’s claims that the realisation of his pre-cohabitation DFRDB entitlement was applied, directly or indirectly, for marital debts, are not supported by any independent documentation. Similar observations apply to the balance of proceeds of sale of the business, and the two parcels of real estate.

42. The documentary evidence presented suggests that marital debts were met from “marital assets”. The husband’s claim with respect to his DFRDB superannuation interest is simply not supported by any reliable evidence to which the Court has referred.

43. The husband was retrenched in April 2004 and received a termination payment, inferentially of approximately $68 000.00, which form part of his superannuation entitlement of $140 000.00 at the end of that year. The entitlement to that payment accrued during the period 2000 to 2004.

44. On the evidence, but for the husband’s eligible termination payment, which was referrable to employment which, by 2000, had little connection with the marital relationship of the present parties, the husband’s superannuation interest may well, on the evidence, have been little more than the $76 000.00 balance in 2000 together with interest for another 4 years, although the statements suggest that in some years of that period the earnings of the fund reduced the value from the husband’s interest. Whatever the position, to fail to recognise that a significant part of the $140 000.00 balance of the husband’s superannuation interest in December 2004 was referrable to the husband’s personal exertion from 2000 to 2004 would be to visit an injustice upon the husband.

45. On behalf of the wife reliance was placed upon the husband having had some $38 000 in shares in 2002, which does not seem to be disputed. How that arose is less than clear, although documentation tendered by the husband (Exhibit R4) suggests that the husband was share trading at a substantial level during that period. The husband claims that the whole of the $38 000.00 which he had in 2002 was paid to solicitors, together with additional funds of approximately $28 000.00, his total paid legal fees approximating $64 000.00.

46. Whilst there is force in much that Counsel for the wife submitted with respect to the period after 2000, the Court does not find the nexus between the actions of either of the parties in that period to be sufficient to enable that period to advance the claims of either party. From 2000 on, the parties had no financial dealings. Each was free to, and did, pursue a new life.

47. To the extent that the husband claims, with respect to the period 2000 to 2004 or otherwise, that his child support payments should reduce the wife’s entitlement, the Court rejects such contention. On the evidence before this Court, the husband paid what, on his own tax returns he should have been paying, regardless of what the child support agency assessed, or how it came to such assessment. The effect of the payments the husband has made is to deprive the wife of the ability to successfully contend that her entitlement should be enhanced by reason of child support payments received by her from the husband.

48. It would be artificial and potentially unjust in those circumstances, particularly given how it appears that much of the increase in the value of the husband’s superannuation interest came about, to adjust the interests of the parties by virtue of that period.

49. It is not seriously suggested, and sensibly so, that events after 2004 should impact upon contribution based entitlements with respect to the husband’s superannuation interest. The interest has grown since that time, in part due to contributions made by the husband, at times in part due to the performances of the superannuation fund.

50. For the foregoing reasons the Court concludes that as at the beginning of 1999 the wife’s entitlement to the husband’s superannuation interest was approximately $25 000.00. It would be unjust and unrealistic to suggest that such figure should today reflect the wife’s contribution based entitlement with respect to the husband’s superannuation interest. Conversely, to in some way project that figure forward in percentage terms would be arbitrary and potentially unjust. An approach, albeit not a perfect approach, but the Court concludes a fair approach, would be to annually adjust that sum by reference to cost of living adjustments.

51. Submissions to the Court proceeded on the basis of an annual inflationary adjustment of approximately 3 per cent. Figures obtained from The Australian Bureau of Statistics reveal the consumer price index for Australia to be as follows:

Quarter	Consumer Price Index	Percentage Increase
December 1998	121.9	-
December 1999	124.1	1.80
December 2000	131.3	5.80
December 2001	135.4	3.12
December 2002	139.5	3.03
December 2003	142.8	2.37
December 2004	146.5	2.59
December 2005	150.6	2.80
December 2006	155.5	3.25
March 2007	155.6	0.06

1. In all the circumstances of this case, the Court concludes that the fairest approach to both parties is to apply those figures to the wife’s entitlement on an annual basis. Whist by no means an ideal approach, to allow interests in accordance with the CPI movements from December 2004 to March 2007 (March 2007 being the most recent figures available from The Australian Bureau of Statistics) would in the circumstances be a reasonable way of preserving the real value of the wife’s entitlement to the husband’s superannuation interest without unfairly affecting the husband’s contributions to the fund during that period. So doing produces a figure of $31 908.14.

Section 75(2)

1. The case was conducted on the basis that no s 75(2) adjustments were appropriate, and sensibly so given that 12 years have passed since the parties last cohabited. Each party has a child ordinarily resident in his or her household. Child support proceedings continue and nothing done in these proceedings will impact on the rights of either party in such proceedings. To adjust by virtue of child support in either direction would, in the circumstances, not be warranted.

2. The Court is unable to reach any informed conclusions as to comparative earning ability and, to the extent that each party appears to have improved his or her fortunes in life through re-partnering, it would be quite unrealistic in the circumstances of this case to alter contribution based entitlements of either party by reference to s 75(2) factors of that kind.

3. In reality, even if, as may be the case for the husband, a s 75(2) adjustment is asserted to be appropriate, the Court does not consider such to be the case. There will accordingly be no adjustment to the contribution based entitlement of either party.

Conclusion

1. It is necessary to consider whether the proposed settlement accords with the requirements of justice and equity pursuant to s 79(2).

2. The wife’s entitlement represents 15.55 per cent of the current “value” of the husband’s superannuation interest. Accepting, as the Court must, that determining such interest involves the exercise of a wide discretion (see Brennan J in Norbis v Norbis (1986) FLC 91-712) the facts and circumstances of this case involve what might be considered to be exercising the widest possible discretion.

3. The Court perceives that the order sought on behalf of the wife is a “splitting order” within the terms of s 90MT of the Act. The terms on which the relief sought on behalf of the wife has been drafted confirm that perception. As noted earlier in these reasons, the only evidence of the “value” of the husband’s superannuation interest is that provided by the husband, albeit that evidence is corroborated by source documentation produced by the relevant superannuation entity.

4. The Court perceives that there is no evidence providing a “determination of an amount in relation to the interest” of the husband pursuant to the regulations referred to in s 90MT(2) of the Act. The reference to the regulations is a reference to the Family Law (Superannuation) Regulations 2001. Section 90MT(2) is mandatory in its operation and provides that:

   (2)Before making an order referred to in subsection (1) [a splitting order], the court must make a determination under paragraph (a) or (b) as follows:

   (a)if the regulations provide for the determination of an amount in relation to the interest, the court must determine the amount in accordance with the regulations;

   (b)otherwise, the court must determine the value of the interest by such method as the court considers appropriate.

5. Having regard to the matters traversed earlier in these reasons, were the Court free to do so, it would, pursuant to s 90MT(2)(b), determine the value of the husband’s superannuation interest in accordance with the figures revealed by the evidence. The Court does not propose at this stage doing so, and may be precluded from doing so in any event having regard to the terms of s 90MT(2)(a). Two matters are clear. The first is that this issue was not agitated at trial, either at the instigation of counsel for the wife or at the instigation of the Court. The second matter is that there clearly is no evidence of a valuation of the superannuation interest of the husband in accordance with the regulations. Why there is not is not material for present purposes. In the circumstances, even if the Court were able to proceed in accordance with s 90MT(2)(b), the Court does not consider that so doing would in the circumstances be just or equitable, and may be significantly unfair to both parties. Though it is regrettable, in the circumstances the Court considers that the only proper course is to publish these reasons and, by order, provide that the proceedings stand over to a future date in order that the question of the valuation of the husband’s superannuation interest, the implications of same and the appropriate order to be made can be more properly determined.

I certify that the preceding one hundred and thirteen (113) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Coleman.

Associate: 

Date: