P and P

[2008] FCWA 38

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY LAW ACT 1975

LOCATION: [REGIONAL CENTRE]

CITATION: P and P [2008] FCWA 38

CORAM: CROOKS J

HEARD: 21 FEBRUARY 2008

DELIVERED : 28 MARCH 2008

FILE NO/S: PT 3678 of 2007

BETWEEN: P

Applicant/Husband

AND
P
Respondent/Wife

Catchwords:

PROPERTY SETTLEMENT - adjustment for s 75(2) factors

Legislation:

Family Law Act 1975, s 75, s 79, s 90MT

Category: Not Reportable

Representation:

Counsel:

Applicant: Mr R Dunlop

Respondent: Mr G Giudice

Solicitors:

Applicant: DS Family Law

Respondent: George Giudice Law Chambers

Case(s) referred to in judgment(s):

Nil

1The dispute to be determined concerns the division of property between [Mr P] (“the husband”) and [Mrs P] (“the wife”).

Background

2The wife is 57 years of age and the husband is 53 years of age.

3The parties commenced living together in about 1978 and they married [in] November 1984. In August 2005 the husband left the parties’ jointly owned home at [the address in the regional centre].

4There are two children of the marriage, [Y] who is now aged 22 years and [K] who is now aged 21 years. [Y] is a [professional] residing in Perth. [K] is in his second year of [an apprenticeship] and lives with the wife in the [matrimonial home].

5The husband is an accountant employed by a private firm in [the town]. The wife is [a technical assistant] employed by the [government agency].

6During the marriage, the parties purchased and paid off the [matrimonial home] and acquired other assets, including [ a residence in Perth].

The evidence and materials relied upon at trial

7The wife was represented by Mr Giudice of counsel. She gave evidence in support of her application and also relied upon the following documents:

(a)trial affidavit sworn 30 January 2008;

(b)financial statement sworn 30 January 2008;

(c)affidavit of the valuer, [Mr E] sworn 5 February 2008;

(d)affidavit of consultant psychiatrist, [Mr M] sworn 5 February 2008;

(e)affidavit of [Mrs B] sworn 20 February 2008.

8The husband was represented Mr Dunlop of counsel and gave evidence in support of his application. The husband also relied upon the following documents:

(a)trial affidavit sworn 22 January 2008;

(b)financial statement sworn 22 January 2008;

(c)affidavit of the valuer, [Mr G] sworn 15 January 2008.

Each party’s credibility

9It was not submitted that I should make any adverse findings in respect of the credit of either party. I was satisfied that both parties attempted to give their evidence in an open and candid way. In the end, there were no factual disputes about issues which substantially impacted on my decision.

Wife’s position at trial

10Mr Giudice submitted three alternative claims for the wife which are as follows:

(a)the wife should receive 70% of the superannuation and non‑superannuation assets which should include the [matrimonial home] unencumbered;

(b)from the non-superannuation assets, the wife should receive a settlement equal to 60% of the combined value of the superannuation and non-superannuation assets;

(c)the wife should receive the following:

(i)the [matrrimonial home] unencumbered;

(ii)the furniture and other assets presently held by the wife;

(iii)a payment from the husband of $50,000;

(iv)a split of the husband’s superannuation fund in such sum as will give the wife 60% of the combined value of the superannuation and non-superannuation assets taking into account the value of the assets to be retained by the wife.

Husband’s position at trial

11Mr Dunlop submitted that the wife should receive:

(a)the [matrimonial home] unencumbered;

(b)the motor vehicle and other assets presently held by the wife;

(c)a splitting order from the husband’s superannuation assets in such amount as will give the wife a total of 52.5% of the combined value of the superannuation and non-superannuation assets taking into account the assets to be retained by the wife as set out in (a) and (b) hereof.

Property proceedings – the law

12Property cases are governed by s 79 of the Family Law Act 1975.

13The determination of an application pursuant to s 79 involves a four step process which can be summarised as follows:

(a)to ascertain the property of the parties;

(b)to determine the contributions made by the parties to the property;

(c)to consider the other factors set out in s 79(4) and s 75(2) which include the parties’ future needs, income earning capacities, responsibilities and resources; and

(d)to finally reach a decision that is just and equitable in all the circumstances.

The assets

14The parties were able to reach agreement as to the list of the assets and liabilities for the purposes of my determination.

15The agreed list of assets and liabilities is as follows:

Assets	Husband	Wife
[The matrimonial home]	$162,500	$162,500
[The Perth residence]	190,000	190,000
Furniture	2,000
Furniture	1,000
Antiques	2,960
Antiques	3,000
1999 [motor vehicle]	3,500
Proceeds of sale of 1974 [motor vehicle]	1,800
1994 [motor vehicle]	2,000
ING Life Insurance Policy	4,104
Shares	8,819
Bank account	Nominal

Bank account	Nominal
Total assets	363,604	370,579
Superannuation
Superannuation	295,294
Superannuation	31,137
Total superannuation	295,294	31,137
Total assets including superannuation	658,898	401,716
Liabilities
Mortgage secured against [the Perth residence]	54,000	54,000
BankWest personal loan	3,500
BankWest MasterCard	2,000
BankWest Lite MasterCard	1,500
Total liabilities	59,500	55,500
Total net assets	599,398	346,216

16The total value of the superannuation and non-superannuation assets is $945,614. The total value of the non-superannuation assets after deducting liabilities is $619,183. The total value of the superannuation assets is $326,431.

Legal costs

17Apart from the liabilities set out in the abovementioned list, each of the parties will have legal fees to pay. The wife has borrowed funds from family to meet costs already paid and the husband has paid certain legal expenses from income and borrowings he has made. The parties agreed that I should not include in the asset pool any addbacks for legal expenses nor the liabilities incurred to meet those costs. I consider this to be the correct approach.

Contributions

18The parties agreed that I should assess their financial and non-financial contributions to both the superannuation and non-superannuation assets as being equal.

19In this long marriage, both parties made significant contributions and I regard the parties’ agreement that I should assess contributions in this manner as being the appropriate outcome.

Section 75(2) and other factors

(a)the age and state of health of each of the parties;

20The husband is 53 years of age. Whilst the husband says that he has suffered with depression, he acknowledges that he has not sought any medical assistance for this condition which he has managed with the support of family and friends. I am satisfied that the husband has no health problems which might prevent or impact on him continuing his career in the future as an accountant. The wife is 57 years of age. Since the parties’ separation, the wife’s health has suffered. [Dr M], the wife’s psychiatrist, says in his evidence that the wife is suffering from a “major depressive disorder with panic attacks”. The wife is currently on medication for this condition. The wife says that her health problems have made [left her unable to perform at full capacity] and it is a struggle for her to cope with work on most days. Fortunately, the wife has the option of taking on less stressful duties with her employment which will not impact on her income. I am satisfied that whilst the wife has ongoing health problems for which she will need further treatment, these problems should not prevent her from continuing to work [in her field] in the future.

(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;

21The wife is employed as [a technical assistant] for [a government agency] for which she earns a gross annual income of approximately $34,000. The husband is employed as [a professional] and has worked for his current employer for more than 20 years. He currently earns a gross annual income of approximately $72,000. I am satisfied that both parties have the capacity for continued gainful employment, however, the husband is able to earn a significantly greater income than the wife for the remainder of his working life even after tax is considered. I find that the wife is exercising her capacity for gainful employment to the fullest. Given the wife’s age and health problems, I am satisfied she is unlikely to retrain and increase her earning capacity nor could she reasonably take on more work than she is doing at present. The annual gross income of the husband is more than double the gross income received by the wife.

(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;

22Neither party has the care of the two children of the marriage who are not under 18 years.

(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;

23The wife is supporting herself from her income. She has the benefit of living in a mortgage free home without which she would have difficulty making ends meet on her current salary. The husband is supporting himself from his income which is sufficient to pay rent for his accommodation and to live reasonably well.

24Neither party has a duty to maintain a child or another person. Both parties have, however, been contributing to the support of [Y] and [K]. The husband has provided support in various ways which has included meeting mortgage repayments on the [Perth] property which [Y] has occupied. [Y] has been paying less than market rent for the property. The wife has contributed to [K]’s support by providing him with free board in the [matrimonial home]. Whilst [K] receives income from his work as a second year apprentice, the wife accepts he cannot presently afford to pay board given his current commitments. [K] will complete his apprenticeship in about two and a half years and prior to this will receive increases from time to time in his income which is currently about $350 gross per week. Jasmine currently earns $40,000 per annum working [in her profession]. Given the ages of the children and their current circumstances, I do not intend to give any weight to the financial assistance either party may choose to provide for their children.

25The wife says that the [matrimonial home] is in need of significant maintenance and her trial affidavit details various work required. She gives an estimate of “at least $35,000” for the cost of restumping the [matrimonial home]. This cost was not accepted by the husband. Whilst I accept from the wife’s evidence and the valuation report of [Mr E] that the [matrimonial home] is in need of maintenance and repair, no evidence is provided which would enable me to properly assess the costs of these repairs, nor to determine what impact, if any, the carrying out of these repairs would have on the value of the [matrimonial home]. For these reasons, I have not taken the wife’s estimate of the costs of repairing the [matrimonial home] into account in coming to my decision.

(e)the responsibilities of either party to support any other person;

26This paragraph does not require any additional consideration. Neither party is responsible to support any person other than the children of the marriage who I have referred earlier in this judgment.

(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;

27Neither party discloses any eligibility to receive any Government pension or benefits. Both parties have superannuation. Whilst there is a significant imbalance in the value of the parties’ superannuation entitlements, I do not propose to take that into account as I have included the superannuation interests of the parties in the pool of assets. I do, however, take into account that by reason of the difference in the income earning capacities of the parties which will continue into the future and the husband being about four years younger than the wife, that the value of his superannuation should increase at a significantly greater rate than the superannuation entitlements of the wife.

(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;

28The parties enjoyed a reasonable standard of living during their long relationship and should have sufficient income and capital available to them to enable each party to maintain a reasonable standard of living in future.

(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;

(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;

(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;

(l)the need to protect a party who wishes to continue that party’s role as a parent;

29These paragraphs do not require consideration.

(m)if either party is cohabiting with another person–the financial circumstances relating to the cohabitation;

30The wife has not repartnered. The husband has repartnered and resides with his de facto wife in rental accommodation. She is aged 53 years and employed as [an aide] earning approximately $31,000. The husband says that he is committed to that relationship. The husband pays the rent for the accommodation in which he resides with his partner. The husband’s rental expenses have not, however, increased as a result of this relationship. Whilst the husband and his partner keep their finances separate, their cohabitation would enable him to share some household expenses which is a benefit the wife does not have. I accept, however, that this benefit alone does not put the husband in a significantly stronger position than the wife.

(n)the terms of any order made or proposed to be made under s 79 in relation to:

(i)the property of the parties; or

(ii)vested bankruptcy property in relation to a bankrupt party;

31The assets and liabilities of the parties have been set out earlier in these Reasons as has my assessment of the parties’ contributions to those assets.

(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

32This has no relevance.

(o)any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account; and

33This has no relevance.

(p)the terms of any financial agreement that is binding on the parties.

34This has no relevance.

Conclusion

35I am satisfied an adjustment of 12% is called for after considering the s 75(2) and other factors. In reaching this decision, I have taken into account in particular, the significant difference in the income earning capacities of the parties which will continue for the remainder of the parties’ working lives and will affect the parties’ future superannuation entitlements.

Just and equitable

36The effect of my decision on contributions and the other factors is that the wife shall be entitled to 62% of the non-superannuation assets or $383,893 and 62% of the superannuation assets or $202,387. The husband shall receive 38% of the non‑superannuation assets or $235,290 and 38% of the superannuation assets or $124,044.

37On the basis of the wife retaining her existing superannuation entitlements of $31,137, a splitting order using a base amount of $171,250 is required to achieve the proposed division.

38I am satisfied that is a just and equitable outcome in all the circumstances.

Effect of orders

39The effect of the orders proposed is as follows:

Assets	Husband	Wife
[The matrimonial home]	$325,000
[The Perth property]	380,000
Furniture	2,000
Furniture	1,000
Antiques	2,960
Antiques	3,000
1999 [motor vehicle]	3,500
Proceeds of sale of 1974 [motor vehicle]	1,800
1994 [motor vehicle]	2,000
ING Life Insurance Policy	4,104
Shares	8,819
Bank account	Nominal
Bank account	Nominal
Amount payable by husband	42,314
Total assets	391,104	385,393
Liabilities
Mortgage secured against [the Perth property]	108,000

BankWest personal loan	3,500
BankWest MasterCard	2,000
BankWest Lite MasterCard	1,500
Amount payable by husband	42,314
Total liabilities	155,814	1,500
Total net assets	235,290	383,893

Superannuation
Husband’s superannuation with [BC] Superannuation Fund to split	124,044	171,250
Wife’s superannuation	31,137
Total superannuation	124,044	202,387

40Because no notice of the proposed superannuation splitting orders has been given to the Trustee of the [BC] Superannuation Fund, I will delay pronouncing these orders until the appropriate notice has been given.

41The orders I propose to make subject to any submissions from counsel, are as follows:

1.The husband pay the wife the sum of $42,314 within 28 days of the making of these orders.

2.The husband shall transfer to the wife all his right title and interest in the former matrimonial home situate at [the address in the regional centre] in the state of Western Australia more particularly described as Lot x on Plan xxxx and being the whole of the land comprised in Certificate of Title Volume xxxx Folio xx [(“the matrimonial home”)].

3.Subject to paragraph 4 hereof, the wife shall indemnify the husband with respect to all costs claims and demands relating to [the matrimonial home]

4.Within 28 days of the date of these orders, the parties do all acts necessary to discharge the mortgage Exxxxx to BankWest and any other loans in relation to the [matrimonial home] at the cost of the husband.

5.Upon payment of the sum of $42,314 referred to in paragraph 1 hereof, the wife shall transfer to the husband all her right title and interest in [the Perth residence] more particularly described as Lot x on Strata Plan xxxxx and being the whole of the land comprised in Certificate of Title Volume xxxx Folio xxx [(the Perth property).

6.Within 28 days of the making of these orders the husband cause the mortgage number xxxxx to BankWest to be discharged do all acts necessary for the wife to be released by the bank from any liability thereunder or any other loan relating to [the Perth] property whether by paying out the loan or otherwise.

7.The husband indemnify the wife with respect to all costs claims and demands with respect to the [the Perth] property.

8.The wife shall transfer to the husband all her interest in the following:

(a)the motor vehicle in the possession of the husband;

(b)the furniture in possession of the husband; and

(c)the roll top desk antique chair and two wardrobes; and

(d)any other item not specifically referred to herein in possession of the husband.

9.The husband shall indemnify the wife with respect to all costs claims suits and demands concerning any of the items in paragraph 8 hereof.

10.The husband shall transfer to the wife all his interest in the following:

(a)the wife’s 1000 shares in Telstra;

(b)the motor vehicle in the possession of the wife;

(c)the wife’s AXA shares;

(d)the furniture in possession of the wife;

(e)the wife’s superannuation entitlements; and

(f)any other item not specifically referred to herein in possession of the wife.

11.The wife shall indemnify the husband with respect to all costs claims suits and demands concerning any of the items in paragraph 10 hereof.

12.The Trustee of the [BC] Superannuation Fund (hereinafter referred to as “the Fund”) is bound by these orders and required to do all such acts and things and sign all such documents as may be required to give full effect to these orders, it being noted that the Trustee was accorded procedural fairness in relation to the making of this order.

13.The base amount allocated to the wife out of the superannuation interest held by the husband in the Fund is $171,250.

14.In accordance with s 90MT(1) of the Family Law Act 1975, whenever the Trustee of the Fund makes a splittable payment out of the superannuation interest held by the husband in the Fund, the Trustee shall pay to the wife, or her legal personal representative, the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, and there is a corresponding reduction in the entitlement the husband would have had but for this order.

15.Paragraph 12 of this order has effect from the operative time.

16.The solicitors for the wife shall serve a sealed copy of this order upon the Trustee within 7 days.

17.The operative time for the purpose of this order is four business days from the date of service upon the Trustee of a sealed copy of these orders.

18.The husband shall be and is hereby restrained by himself, his servants or agents from executing, and/or giving to the Trustee of the Fund a binding death benefit nomination in favour of any person, or from doing any other act or thing, which would render any part of, or payment from, his superannuation interest in the Fund a “not splittable payment” within the meaning of regulations 12 or 13 of the Family Law (Superannuation) Regulations 2001 such as would defeat the wife’s entitlement pursuant to this order.

19.The applications of the parties be otherwise dismissed.

I certify that the preceding [41] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court

Associate