Piper and Piper

[2007] FamCA 1245

FAMILY COURT OF AUSTRALIA

PIPER & PIPER [2007] FamCA 1245

FAMILY LAW – PROPERTY SETTLEMENT – Bequest to parties during and after marriage – Majority of property pool contained in superannuation funds.

APPLICANT: Mr Piper

RESPONDENT: Mrs Piper

FILE NUMBER: HBF 901 of 2006

DATE DELIVERED: 15 October 2007

PLACE DELIVERED: Hobart

PLACE HEARD: Hobart

JUDGMENT OF: Benjamin J

HEARING DATE: 22 August and 15 October 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Foster

SOLICITOR FOR THE APPLICANT: PWB Lawyers

COUNSEL FOR THE RESPONDENT: Mr Crotty

SOLICITOR FOR THE RESPONDENT: James Crotty Lawyers

Orders

1. Within sixty days from the date of these orders the wife pay to the husband the sum of $73,518.00.

2. Within sixty days from the date of these orders and contemporaneous with the payment referred to in order 1 above, the husband shall do all acts and sign all documents to transfer to the wife the whole of his right, title and interest in the property at W (“the home”) being the land referred to in Folio of Register Volume … Folio ….

3. The wife shall indemnify the husband in relation to all outgoings in respect of the home including mortgage repayments and the capital outstanding in respect of the mortgage to Members Equity of about $89,183.00 (“the mortgage”).

4. The husband transfer to the wife his interest in the following property:-

   (a)wife’s Mitsubishi Magna;

   (b)wife’s inheritance from her mother, totalling $89,628.00; and

   (c)wife’s fixed deposit totalling $6,000.00.

5. The wife transfer to the husband her interest in the following property:-

   (a)husband’s Nissan Navara utility (agreed value $4,000.00);

   (b)the parties’ half interest in … Yacht called “[…]”.

6. In accordance with s 90MT(1)(a) of the Family Law Act 1975;

   (a)whenever a splitable payment becomes payable in respect of the interest held by the husband in S Fund, the Trustee shall pay 51% of each splittable payment to the wife and there will be a corresponding reduction in the entitlements of the husband in the said superannuation interest.

   (b)     these orders shall have effect from 13 January 2006, and

   (c)     this order shall bind the Trustee of S Fund.

7. Each party shall sign all documents and do all acts and things reasonably required to give effect to the terms of these orders.

8. Unless otherwise specified in these orders each party be solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such parties at the date of these orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank record, superannuation entitlements are as disclosed and described as being the property of the respective parties during the hearing (save and except with the splitting order set out above).

9. This matter be removed from the list of cases requiring determination.

10. All subpoenaed documents be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same.

    IT IS CERTIFIED

11. Pursuant to Rule 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.

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

FAMILY COURT OF AUSTRALIA AT HOBART

FILE NUMBER: HBF 901  of 2006

Mr Piper

Applicant

And

Mrs Piper

Respondent

REASONS FOR JUDGMENT

1. These are proceedings between the husband and the wife relating to property issues between them.

2. The husband seeks orders that the parties’ property be divided as follows:-

   (a)the non-superannuation property (excluding the sum of about $95,628.00 being inheritances to the wife from her mother and uncle) should be divided equally between the husband and the wife. This division is on the basis that the wife retains property at W (“the home”) subject to a mortgage of about $89,183.00

   (b)The wife would retain her motor vehicle and the inheritances from her mother and her uncle, referred to earlier.  The husband would retain his Nissan Navara motor vehicle and the parties one half interest in a yacht

3. As to the superannuation the husband seeks a splitting order as at the date of separation with the wife taking a base amount of $133,000.00 having effect from 13 January 2006.  The submission behind this splitting order was that the superannuation of the parties at about the time of separation was as follows:

   -       Husband’s superannuation entitlements at separation[1]              $287,954.10

   [1] Para 33(g) of wife’s affidavit sworn 12 June 2007 (“the wife’s affidavit”)

   -       Wife’s superannuation entitlements[2]      $25,884.18

   [2]Wife’s affidavit, annexures ‘I’ and ‘J’.

   Total joint superannuation entitlements as at separation $313,838.28. 50% of $313,838.28 = $156,919.14 of which the wife had control of $25,884.18 at that time.  The balance of about $131,000.00 was adjusted up to $133,000.00 by the husband in the orders that he sought.

4. The husband says, and it is not contested, that he has contributed about $28,470.96 to his superannuation fund since separation[3].  Of that sum $17,431.57 was provided by his employer and the husband made voluntary contributions of $11,039.39.  The wife received from her mother’s estate the sum of $89,628.00 in about April or May 2007 and received $6,000.00 from her uncle’s estate on 28 December 2005 (shortly before separation).  The husband’s submission is that the wife should retain these assets and he should retain the capital paid into his superannuation fund subsequent to separation.

   [3] Exhibit “H3”

5. In her application the wife seeks an order that the superannuation be divided equally, she retain the inheritances from her uncle and from her mother of $95,628.00 and that the balance of the property be divided as to 65% to the wife and 35% to the husband.  The adjustment of 15% was said by the wife to be an adjustment in respect of the other factors.

6. There is no issue as to the pool of assets and extent of liabilities nor the extent of superannuation.  The issues in these proceedings relate to contribution and other factors.

7. At the commencement of the hearing the applications disclosed that the wife was seeking either periodic or lump sum spouse maintenance.  The wife’s counsel said that she was not seeking a maintenance order. He submitted that in the 15% claim by the wife in respect of the other factors included this aspect.  I have had regard to the difference in the parties earning capacity.

8. In these reasons a statement of fact constitutes a finding of fact unless otherwise indicated.

   Background

9. The husband was born in July 1949 and is aged fifty eight.  The wife was born in February 1953 and is aged fifty four.

10. The parties married in May 1973 and separated in January 2006.  The marriage subsisted for about thirty two and a half years.  There are two adult children of the parties, aged thirty two and twenty six, who are self sufficient.

11. The wife is employed as a and earns about $509.00 per week.  In the financial year ending 30 June 2006 she had a taxable income of $25,148.00.

12. The husband is employed in finance and presently has an income of $1,206.00 per week, which is about $62,700.00 per year.  Neither party has been otherwise married.  There is no evidence of any other children of the parties, apart from the adult children referred to earlier.

13. The wife works approximately nine days per fortnight and there is some availability for her to undertake additional work.

14. The wife has occupied the home since separation.  She has paid council rates, water rates and mortgage repayments since that time.

The principles to apply

1. The Full Court in Hickey and Hickey and A-G for the Commonwealth of Australia (Intervener) [(2003) FLC 93-143] at 78,386, reiterated the preferred approach to the exercise of discretion in property matters, pursuant to s 79:

   “39. The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79 (4) (a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79 (4) (d), (e), (f) and (g), (“the other factors”) including, because of s.79 (4) (e), the matters referred to in s.75 (2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend (1995) FLC92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEL and DDF (2001) FLC 93-075 and Phillips and Phillips (2002) FLC 93-104.

   40. Section 79, unlike s.78, requires the Court to consider the whole of the property of the parties, however and whenever acquired, notwithstanding that the parties may only seek an alteration of interest in some of that property. As a consequence of the first step in the preferred approach to the determination of the s.79 proceedings, each party to the proceedings has an obligation to make a full and frank disclosure of his/her financial circumstances and all matters relevant thereto: Oriolo and Oriolo (1985) FLC 91-653; Black and Kellner (1992) FLC 92-287; Weir and Weir (1993) FLC 92-338 and Tate v Tate (2000) FLC 93-047.”

2. Thus the approach in this case involves a number of steps:-

   a.The identification of the property and its value;

   b.

   An evaluation of the parties’ contributions having regards to

   
   

   ss 79(4)(a)(b) & (c);

   c.Consideration of any adjustment to that assessment having regard to the relevant matters in ss. 79(d),(e),(f) & (g) (“the other factors”) including the matters referred to in s.75(2); and

   d.A review of the outcome against a just and equitable requirement.

   Credit of the parties

3. There were some issues as to the credit of the parties.  They saw their case through their own partisan eyes but clearly both endeavoured to give evidence as frankly as they could.  From time to time each made concessions against their own interests. 

4. Mr M gave evidence from the witness box after being called by the wife.  On balance I accept that his evidence is reliable.

5. The wife was given money by her aunt.  She says that she will be repaying those sums, although, she concedes she has no obligation to do so.  In the light of this evidence, I have not had regard to those alleged liabilities.

   Identification of the property and its values

6. There are no issues as to the identification or values of the property.  Counsel for the husband submitted that I should accept the valuations of the property as set out in the wife’s summary of argument.  That is:-

   -     the home  $290,000.00

   -     wife’s Mitsubishi magna  $9,000.00

   -     husband’s Nissan Navara utility  $4,000.00

   -     parties half interest in yacht  $34,000.00

   -     wife’s inheritance from her mother  $89,628.00

   -     wife’s fixed deposit (inheritance from her uncle)       $6,000.00

   Total  $432,628.00

   Less

   -     mortgage     $89,183.00

   Balance  $343,445.00

   Superannuation property

   Wife

   Tasplan as at 27/4/07  $28,818.00

   S Fund as at 27/4/07     $1,345.00

   Total  $30,163.00

   Husband

   S Fund as at 20/8/07  $371,039.52

7. At the commencement of the proceedings counsel for the husband tendered, by consent, letters to and from the superannuation trustees confirming they had notice of the type of orders that were sought and that the orders were acceptable to the trustee.  I am satisfied that the trustee has been given procedural fairness.

8. The husband arranged for an updated statement of his superannuation interest in the growth phase to be available[4].  The agreed figure on the husband’s superannuation balance at 20 August 2007 was $371,039.52.

   [4] Exhibit “H4”

9. There was some argument as to whether the wife had disclosed all of her entitlement to her mother’s estate.  On balance, I accept the evidence of the wife that the sum of $89,628.00 is the total amount that she received from her mother’s estate..

10. Both parties agreed that their legal costs were approximately the same and neither sought add backs in that respect.

    Contributions

11. The wife said that at about the time of separation the husband had taken from the joint account a sum of about $1,500.00 more than she had taken.  I accept the wife’s evidence in that regard and I have had regard to that withdrawal in terms of the contribution factors.

12. The wife gave evidence about the monies spent by the husband on the yacht of about $8,000.00.  I have had regard to that expenditure in terms of the contribution factors.

13. I have had regard to the significant contributions in terms of the wife’s inheritances (which in the case of the wife’s mother was received after separation and in respect of the wife’s uncle it was received about a month or so prior to separation and both sums have been kept separate) and the husband’s post separation contributions to his superannuation fund.

14. At the commencement of the marriage neither party had assets of any significance, they both owned motor vehicles and the wife had savings of about $3,000.00.

15. The husband has worked in paid employment throughout most of the marriage.  Initially he worked in the hospitality business.  The wife worked initially as a clerk and later worked with the husband in the hospitality business.

16. The parties purchased a shop business and later another business.  That second business was unsuccessful and in June 1986 the parties declared themselves bankrupt.  As a consequence of their respective bankruptcy the parties lost all of their substantial assets acquired up to that time.

17. The husband continued to work in paid employment until about 1988 when he commenced a three year degree course.  During this study the husband undertook some part time employment and his income was less than at other times during the marriage.  After completing his undergraduate degree the husband obtained work in Tasmania, he has remained in that employment since that time.  The husband obtained post graduate qualifications between the date of completing his undergraduate degree and the date of separation.

18. The wife worked in paid part time employment throughout most of the marriage.  Both parties contributed in their own ways both directly and indirectly, financially and non-financially in terms of the acquisition of property subject to the comments I make below. The wife had the primary care of the children and was the primary homemaker.

19. In 1991 the parties purchased the land upon which the home was built for $22,000.00.  The wife’s parents gave her $2,000.00 towards the deposit on the purchase of the land.  The parties borrowed about $17,600.00 from the Commonwealth Bank.

20. In 1993 the husband inherited $25,000.00 from his late mother and using these funds and borrowings of about $55,000.00 from the Commonwealth Bank the parties built the home on that land.

21. The inheritance by the husband from his mother’s estate was significant in terms of the ability for the parties to finance the building of the home.

22. The parties refinanced that loan in October 2004 and it was applied as follows:-

    -     payment of Commonwealth Bank loan  $24,000.00

    -     purchase of Mitsubishi motor vehicle  (approx) $17,000.00

    -     half share in a yacht  (approx) $45,000.00

23. The balance of approximately $8,000.00 was put into a joint bank account which was used for repairs and expenses associated with the yacht.

24. The husband had accumulated superannuation from his employment which, as at the date of separation, totalled about $287,954.10.  Since that time the husband has contributed a further sum to that superannuation fund of $28,470.96.  These represent the contributions from his employer of about $17,431.57 and contributions by the husband of $11,039.00.  These additions have been made subsequent to separation.

25. The husband’s post-separation superannuation contributions were in part made available by the husband reducing his living expenses by “house sitting” on a number of occasions since January 2006.  Over that period of time he has lived in nine different homes.  Shortly before swearing his affidavit in April 2007 the husband commenced renting a home at a cost of $230.00 per week.

26. In December 2005 the wife inherited the sum of $6,000.00 from the estate of her late uncle.  This inheritance was received by her in about December 2005 and has been kept separate from the joint assets of the parties since that time.

27. The wife’s mother died subsequent to separation and the wife received the sum of $89,628.49 from that estate which is held by her solicitors.  This is an agreed amount.  There was some cross-examination of the wife in relation to a deed entered into between her and her brother which indicated the amount may have been as high as $95,000.00.  I accept her evidence that the amount she received was the agreed amount.

28. The wife was criticised for not using that sum to pay off the mortgage.  She invested this money with her solicitors on their advice and the loss of interest she has occasioned between April or May 2007 and the date of hearing would not be of great significance.

29. The above specific contributions have been taken into account in reaching the determination I have made with regard to contribution.

30. Other contributions during the marriage included the initial contribution of the wife in the sum of $3,000.00, the contribution by the husband’s father in providing the parties’ with a house for a period of about one year as well as payment of rent by him for a period of about one year.

31. I have also had regard to the application of the inheritance from the father’s mother towards the construction of the home, as well as to the aforementioned $1,500.00 withdrawn by the husband from the parties’ joint account.

32. Having regard to all of these factors as to the non superannuation property I determine that the wife should be entitled to the whole of the inheritance that she had received from her late mother and uncle and one half of the remaining non superannuation property.

33. The superannuation property is more difficult.  The parties’ contributed equally to the pool of non superannuation assets up to the date of separation. Since that time part of the growth of the husband’s entitlements have come from specific contributions by him and some by the growth on the existing fund.   I had intended to split the husband’s fund as at the date of separation.  It was submitted to me that such a split would have meant that the wife would have obtained the benefit of the contributions up to that time and the growth on that part since that time.  However, shortly before I was to deliver judgment a further submission was made that the orders proposed by the husband would not have had that effect.  As such it was necessary for further submissions to be made and further orders approved by the trustees of the superannuation fund.

    The other factors

34. The wife was concerned about a software development project or business that the husband may have entered into with a Mr M.  In 2000 the husband was employed by Mr M to develop a software package to operate as an excel spreadsheet.  The husband was paid an amount between $1,000.00 and $2,000.00 for that work.  At that time Mr M operated his own business which was subsequently sold by him.  The software spreadsheet created by the husband was retained by Mr M.  However, a similar program but is now available free.  The software developed by the husband for Mr M has no commercial value.

1. In 2005 Mr M again contacted the husband to employ him to develop software and to some enquiries about a further excel spreadsheet program with regard to borrowings against assets to fund share purchases.  Mr M said and I accept that he did not offer to the husband a business venture but asked him to investigate how a program worked and to design a similar software program.  Mr M funded the husband on a trip to Sydney and the husband prepared a form of excel spreadsheet.  This program is of no commercial value to Mr M.  In respect of this second task undertaken by the husband for Mr M, the husband was paid by way of provision of accommodation, a trip to Sydney and the use of a laptop computer.

2. I find that the husband has no special skills in software development and there is no objective evidence that the husband is going to go into a business with Mr M.

3. The husband has a good earning capacity and whilst he may retire at sixty he is able to work beyond that date either full time or part time.  The husband’s skills were developed during the marriage. 

4. The wife has a poorer earning capacity than the husband and does not have equivalent skills to the husband’s.  The wife is about three and a half years younger than the husband.  I find that the wife has a capacity to earn a slightly greater income than that which she was able to earn at the date of hearing. 

5. In determining whether there ought to be an adjustment in the wife’s favour in respect of other factors I have had regard to the additional property which the wife will have in retaining the bequests totalling $95,628.00.  It is appropriate that there be a reasonable split of the parties’ superannuation and each party’s present lack of access to their superannuation is an important consideration before me.  I have had regard to the nature of the parties’ respective superannuation interests.

6. The parties only have the commitment to support themselves and no other person.  Neither party is eligible for a pension, allowance or benefit.  The wife’s role as homemaker and mother has affected her earning capacity during the marriage. 

7. The husband says that he is presently able to work but suffers from osteo- arthritis and that he does not believe he will be able to work beyond his sixtieth birthday.  He was not challenged in terms of his health in cross-examination.

8. The wife is aged fifty four and will attain fifty five in February 2008.  Her evidence, which was not challenged, is that[5]:-

   “10.Since separation my health has declined.  I have been diagnosed with two peptic ulcers, which need constant medication and I have also developed high blood pressure.  My doctor has told me it is likely I have developed these conditions because of the stress of my marriage breakdown and the ongoing litigation between [the husband] and I.  I also undergo counselling once a fortnight to help me cope with the breakdown of my marriage.”

   [5] Wife’s affidavit paragraph 10

9. I determine there ought to be an adjustment in favour of the wife as to 5% in terms of the superannuation property (as at the date of separation, that is excluding the money which the husband and his employer have contributed since separation) and 5% in relation to the non-superannuation property (excluding the wife’s bequests which, in accordance with both parties’ submissions, I have treated this property separate from the remainder of the non superannuation property pool as I have done with the husband’s post separation superannuation contributions).

   Just & equitable

10. The allocation of both non-superannuation and superannuation property needs to be just and equitable.

11. The consequence of the above adjustments in terms of the superannuation is that the wife is entitled to about 55% of the parties’ superannuation as at separation. That is she is entitled to 55% of $313,838.28 which equates to $172,611.05.  Of that sum the wife has $25,884.18, being her personal superannuation account.  This leaves a short fall of $146,727.00.  Accordingly, I was proposing to order a split of the husband’s superannuation in that sum as at the date of separation. 

12. As to the remainder of the property, excluding the inheritances, it amounts to:-

    -     home  $290,000.00

    -     wife’s Magna motor vehicle  $9,000.00

    -     husband’s Nissan Navara motor vehicle  $4,000.00

    -     half interest in yacht      $34,000.00

    TOTAL  $337,000.00

    Less

    -     mortgage      $89,183.00

    BALANCE  $247,817.00

    55% of the balance is $136,299.00, and 45% of the balance is $111,518.00. 

13. The wife will retain the following assets:-

    -     home  $290,000.00

    -     Magna motor vehicle        $9,000.00

    Total  $299,000.00

    Less

    -     mortgage      $89,183.00

    BALANCE  $209,817.00

14. I will order the wife to pay to the husband the sum of $73,518.00 thus reducing the total property retained by her from $209,817.00 to $136,299.00.

15. The husband will retain the following assets:-

    -     Nissan Navara motor vehicle  $4,000.00

    -     half interest in yacht  $34,000.00

    -     money paid by wife      $73,518.00

    Total  $111,518.00

16. In terms of the superannuation the wife will retain the following:-

    -     Tasplan superannuation  $28,818.00

    -     S Fund  $1,345.00

    -     Split from husband’s superannuation  $146,727.00

    Total  $176,890.00

17. The effect of the orders is that the wife will be taking about 51% of the husband’s present superannuation entitlements.  That superannuation fund has increased from $287,954.00 at that time to a present sum of $371,039.52.  There has been a growth in that fund over that period of time of about $83,000.00.  Of that growth $28,470.00 amounts to the contributions made by or on behalf of the husband since separation leaving the other capital growth of about $54,500.00.  The wife will be allocated 51% of that sum which will increase her superannuation by about $27,800.00 giving her a total superannuation pool as at the date of hearing of about $204,700.00. The husband will be left with a total superannuation entitlement of about $196,500.00.

18. In my view that result is just and equitable.

I certify that the preceding 68 paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin

Associate:     

Date:               15 October 2007