RIZZO & RIZZO

[2019] FCCA 105

FEDERAL CIRCUIT COURT OF AUSTRALIA

RIZZO & RIZZO [2019] FCCA 105

Catchwords:
FAMILY LAW – Property Settlement – consideration of Court’s discretion where wife seeks orders which give her net tangible assets greater than value of the pool of tangible assets – consideration of “one or two pool” approach – spousal maintenance.

Legislation:

Family Law Act 1975 (Cth), ss.75(2), 79, (1),(2), (4)

Cases cited:

Stanford v Stanford [2012] HCA 52
Coghlan & Coghlan (2005) FLC 93-220
Russell v Russell (1999) FLC 92-877
Hirst v Rosen (1982) FLC 91-230 at 77,251
Farmer v Bramley (2000) FLC 93-060 at 87,972
Clauson & Clauson (1995) FLC 92-595
Phillips & Phillips (2002) FLC 93-104

Applicant: MS RIZZO

Respondent: MR RIZZO

File Number: LNC 502 of 2018

Judgment of: Judge McGuire

Hearing dates: 18 & 19 December 2018

Date of Last Submission: 19 December 2018

Delivered at: Launceston

Delivered on: 31 January 2019

REPRESENTATION

Counsel for the Applicant: Mr M Turnbull

Solicitors for the Applicant: Bishops

Counsel for the Respondent: Mr R Murray

Solicitors for the Respondent: Murray & Associates

ORDERS

Property:

(1)That within twenty-one (21) days of the date of these orders the parties do all such things necessary to place the properties situate at Property A in Tasmania and Property B in Victoria on the market for sale on terms and at a sale price as agreed between the parties but failing agreement then:

(a)By real estate agents agreed between the parties but failing agreement then by agents nominated by the President of the Real Estate Institute of Tasmania and the President of the Real Estate Institute of Victoria respectively or their nominees;

(b)By private treaty or by auction as agreed between the parties or failing agreement then as recommended by the agents; and

(c)At sale prices or reserves as agreed between the parties but failing agreement then as advised by the agents with the parties to accept any reasonable offers suggested by the agent's.

(2)That the proceeds of sale of the properties be disbursed as follows: –

(a)To the payment of reasonable costs and disbursements on the sales;

(b)To the payment of any mortgages under which either property is secured;

(c)To any monies outstanding under Westpac business loans referenced in the reasons herein;

(d)The balance then to the wife.

(3)That within twenty-one (21) days of the date of these orders to the husband transfer to the wife, all his right, title and interest in the following absolutely: –

(a)A motor vehicle 1 registered … in the possession of the wife;

(b)The balance of the Westpac Choice account number …;

(c)The balance of the ANZ bank account in the husband's name account number … to a maximum of $21,000 (but if that balance be a lesser sum than $21,000 as at the date of these orders then the husband to make such amount up to $21,000 within twenty-one (21) days of the date of these orders);

(d)All personalty and chattels in the possession of or under the control of the wife as at the date of these orders; and

(e)The wife's superannuation entitlements with Super Fund T and Rizzo Superannuation Trust.

(4)That contemporaneously with the transfer and and/or vesting orders referred to in paragraph 3 hereof, the wife transfer and/vest all her right, title and interest in in the following to the husband absolutely:

(a)A motor vehicle 2 registered number … in the possession of the husband;

(b)All shareholdings held by the wife or the husband in the following:

(i)Unit trust L;

(ii)… class units in the Unit Trust L;

(iii)Shares in the Shares L; and

(iv)Ordinary share in the Unit Trust L.

(c)The husband's superannuation entitlement with Rizzo Superannuation Trust but subject to these orders; and

(d)The husband's ANZ bank account … but subject to these orders.

(5)That subject to these orders each party be responsible for and indemnify the other in respect of the following: –

(a)Any liability attaching to any asset retained by that party pursuant to these orders; and

(b)Any and all liabilities incurred by that party since separation in either joint names or in that party's name alone.

(6)That pursuant to section 90XT(1)(a) of the Family Law Act 1975 (as amended) a base amount of $158,828.52 be allocated to the wife out of the husband’s interest in the Rizzo Superannuation Trust Superannuation Fund.

(7)That pursuant to section 90XT(1)(b) of the Family Law Act 1975 wherever the Trustee makes a splittable payment from the interest held by the husband the Trustee:

(a)Pay the wife or her legal personal representative and assigns the entitlement calculated in accordance with Part VI of the Family Law (Superannuation) Regulations 2001; and

(b)Make a corresponding reduction in the entitlement the husband would have had in the Fund but for these orders.

(8)That these orders have effect from the operative time of these orders being 4 business days after the day on which the final sealed, signed orders are served on the Trustee.

(9)That the Trustee of the Fund do all such acts and things and sign all such documents as may be necessary so that the Trustee, in accordance with the obligations set out under the Family Law Act 1975 and Family Law (Superannuation) Regulations 2001, can calculate the entitlement of and make payment to the wife in accordance with 0rder (6) hereof.

(10)That upon receipt by the wife of a payment slip notice when issued by the Trustee pursuant to Rule 7A.03 of the Superannuation Industry (Supervision) Regulations 1994, the wife exercise her election pursuant to Rule 7A.06 Superannuation Industry (Supervision) Regulations 1994 to request the Trustee to roll over or transfer the transferrable benefits as Rule 1.03(1) of the Superannuation Industry (Supervision) Regulations 1994 to another fund of the wife’s choosing.

(11)That following the action taken by the Trustee of the Fund as contemplated in Rule 14F(2)(b) of the Family Law (Superannuation) Regulations 2001 the provisions of Rule 14 Family Law (Superannuation) Regulations 2001 will make any splittable payments following the action by the Trustee, non-splittable.

(12)That until the happening of any of:

(a)The establishment of a separate account in the name of the wife and the fund; or

(b)The transfer or rolling over into another superannuation fund the payment split created by order (6) hereof; or

(c)The wife satisfies the condition of release and is paid the payment split which is created by order (6) hereof; or

(d)The wife executes a waiver of rights within the meaning of section 90MZA of the Family Law Act 1975 in relation to the payment split created by order (6) hereof.

(13)The husband be and is hereby restrained by himself, his servants or agents, from executing a binding death benefit nomination in favour of any person or from doing any such act or thing which would render any part of his interest in the Fund a non-splittable payment within the meaning of Rule 13 of the Family Law (Superannuation) Regulations 2001.

(14)That until the operative time of these orders the husband will be restrained by himself, his servants or agents from making application from withdrawal of any funds from his interest in the Fund.

Spousal Maintenance:

(15)That for a period of four (4) years from the date of these orders the husband pay to the wife spousal maintenance in a quantum of $300 per week with the first such payment to be due and owing as of 7 February 2019 and by direct deposit by the husband into a bank account nominated by the wife or otherwise as agreed between the parties.

Child Support:

(16)That by consent pursuant to section 124 of the Child Support (Assessment) Act 1989 the husband shall make payment to the wife by way of ongoing non-periodic child support for the benefit of the three children of the marriage the following:-

(a)Payment of accounts and/or invoices issued by the School 1:

(i)Children’s school fees,

(ii)Compulsory and in addition such share of non-compulsory excursions as agreed;

(iii)Levies;

(iv)Compulsory stationary:

(v)Compulsory costs in relation to electronic devices; and

(vi)100% cost of necessary school uniforms.

(b)100% cost of the following extracurricular activities –

(i)The children’s swimming coaching fee and registration fees;

(ii)[X]’s swimming lessons; and

(iii)Costs of [Y]’s tutoring.

(17)Private health insurance at the current level.

(18)Payment of the children’s mobile phone accounts.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT LAUNCESTON

LNC 502 of 2018

MS RIZZO

Applicant

And

MR RIZZO

Respondent

REASONS FOR JUDGMENT

Applications

1.The wife is the applicant seeking orders in respect of property settlement, spousal maintenance and non-periodic child support.

2.To their great credit, the parties have reached agreement in respect of the child support issue and I am asked to make consent orders.  Further, it is proper to comment that it was an unusual pleasure to conduct a trial where each of the parties put only opposing legal argument and where they are able to agree the pool of property and values and, more unusually, evidence was given and cross-examination undertaken without any issues of credit, fault or blame by or to either of these parties.  Similarly, cross-examination by Counsel for each party, presumably on instructions, was limited, positive and focused.

3.The husband is 47 years of age and the wife 46 years.

4.The parties commenced cohabitation in … 2001 and married on … 2002.

5.The husband is a professional in Launceston with an agreed gross income of approximately $662,000 per annum.

6.The wife has qualifications and experience as a professional in Tasmania, interstate and overseas.  She currently works as a professional with the Employer on a part time basis with an income of approximately $35,000 per annum.  The wife is studying to improve her qualifications in this field.  Estimates are given of job opportunities with a potential income of approximately $100,000 per annum.

7.The parties have three children being [Y] born … 2004 (aged 14 years), [Z] born … 2006 (aged 12 years) and [X] born … 2011 (aged seven years). Again to their great credit, the parties have agreed arrangements for their three children whereby they live on a regime of 10 nights per fortnight with the mother and four nights per fortnight with the father being in one block over a long weekend.

8.The parties separated in December 2017.  There is no evidence before me of either party having re-partnered in the sense of requiring or contributing financial support.

9.The parties agree that the husband will pay child support as assessed in a quantum of $36,500 per annum or $702 per week. The child support order I am asked to make by consent also provides for the husband to pay School fees and excursions (E $45,000 dollars per annum); private health insurance for children (E $6,000 per annum); education tuition for [Y] (E $2,400 per annum); costs of the children's swimming, coaching, registration and lessons (not known) and payment of children's mobile phone accounts (not known).

The Wife’s proposal

10.It will be of assistance and outlining the parties’ positions that I first set out in these reasons the agreed property pool and values which are as follows:

Ownership	Description								Wife's value	Husband's value
ASSETS
1	W	Property A (Certificate of Title Volume … Folio …)- property valuation 29 May 2018							$1,400,000			$1,400,000
2	H	Property B VIC (Certificate of Title Volume … Folio …)- property valuation 5 June 2018							$910,000			$910,000
3	H	Motor vehicle 1 (registration …) in possession of wife							$11,525			$11,525
4	H	Motor vehicle 2 (registration …) in possession of husband							$20,750			$20,750
5	J	Westpac offset bank account …							0			0
6	J	Westpac rent account …							0			0
7	J	Westpac tax savings account …							0			0
8	W	Westpac choice account …							$27,797	;:::)	$27,797
9	H	Life insurance policy							0			0
10	W	Life insurance policy							0			0
11	W	154 ordinary units in the Trust L							$15,800			$15,800
12	W	Units in the Unit Trust L							above			0
13	H	2 shares in the Unit Trust L Pty Ltd							above			0
14	H	1 ordinary share in the Unit Trust L							above			0
15	H	ANZ Bank account …							$21,000			$21,000
16	J	Household	d contents d contents-to be divided by agreement	NA			NA
17	H	Unpaid work invoices							N/K			0
Total		$2,406,869.00			$ 2,406,869.00
Addbacks sought by wife, but not conceded by husband						j
Husband' s legal (paid by husband)						$20,000.00
Wife's legal costs (paid by wife)						$ 2,910.85
Total						$22,910.85

Ownership	Description		Wife's value	Husband’s value
LIABILITIES
18	W	Westpac home loan for Property A	$ 381,734.98	$ 381,734.98
19	J	Westpac business loan account …	$ 206,599.19	$ 206,599.19
20	J	Westpac business loan fixed …	$ 285,670.45	$ 285,670.45
21	J	Westpac investment loan Property B	$ 128,045.82	$ 128,045.82
22	J	Westpac rocket investment loan …Property B	$ 299,882.40	$ 299,882.40
23	Westpac fixed rate investment loan Property B	$ 357,000.00	$ 357,000.00
24	H	Chattel mortgage over motor vehicle to Bank of Queensland Property B	0	0
25	H	Westpac MasterCard	0	0
TOTAL	$1,658,930.00	$1,658,930.00

SUPERANNUATION
Member		Name of Fund	Type of Interest	Applicant’s value	Respondent’s value
26	W	Super Fund T	Accumulation	$   8,458.38	$     8,458.38
27	W	Rizzo Superannuation Trust	Self-managed superfund	$192,450.00	$ 192,450.00
28	H	Rizzo Superannuation Trust	Self-managed superfund	$352,533.00	$352,533.00
Total		$553,441.38	$553,441.38

Net value of non-superannuation, tangible assets (including add-backs)	$ 770, 849.85
Superannuation value	$ 553,441.00
NET TOTAL	$1,324,290.85

11.The wife seeks an order that the husband pay spousal maintenance in a quantum of $500 per week for a period of four years from the date of these orders. The husband agrees that there should be spousal maintenance and, by the end of the evidence, proposed that he pay $300 per week for a period of two years from the date of these orders.

12.The wife argues that the Court consider an alteration of the parties property on a 'one pool' approach being inclusive of both tangible assets and superannuation. She seeks an order based on her desire to retain the former matrimonial home at Property A ($1,400,000) and also to retain the mortgage secured by that property ($381,734.98) and in detail her proposal is as follows I respect of the tangible assets:

Wife Receives:

Motor vehicle 1	$     11,525
Westpac choice account	$     27,794
Add-back paid legal costs	$      2,900
Wife's Super Fund T	$      8,458
Wife's entitlement- Rizzo superannuation	$   192,450
Mortgage - Property A	$381,743
Wife’s total net property inclusive of superannuation	$ 1,261,403.00

13.On this proposal by the wife, the husband receives:

Property B	$ 910,000
Motor vehicle 2	$   20,750
“Unit Trust L”	$   15,800
ANZ account	$   21,000
Add-back – paid legal costs	$   20,000
Husband’s entitlement Rizzo superannuation	$ 352,533
Westpac business loan	( $206,599.19)
Westpac business loan fixed	($ 285,670.45)
Westpac investment loan	($ 128,045.82)
Westpac rocket investment loan	($299,882.40)
Westpac fixed rate investment loan	($ 357,000.00)
Net property inclusive of  superannuation retained by husband	$  66,887.00

14.I calculate that orders in the terms of the wife's proposal above would have the wife retaining 95% of the property pool and 5% for the husband.

15.The wife and her Counsel, however, offer inducement options for the husband to accept the proposal above or for the Court to address ‘justice and equity' issues as follows: –

(a)she leaves open for the Court to further adjust or 'split' the wife's superannuation entitlement in favour of the husband;

(b)given that the wife's proposal would leave the husband with a substantial net negative tangible asset entitlement, she would permit the continued use of the Property A property for four years as security for the above-mentioned loans which the husband would retain.

16.In circumstances where the wife's Counsel concedes in his final address that there should be no adjustment on the basis of contributions, the wife justifies her proposal broadly as follows: –

(a)that she and the children currently enjoy residence in the former matrimonial home.  The parties’ oldest child, [Y], suffers some anxiety and depression issues which would be exacerbated by a move of residence. The parties’ daughters have known no other home.  The home is proximate to that of the maternal grandparents who offer physical and emotional support.  The home is also proximate to a swimming centre which is an activity undertaken by the children;

(b)that the husband's income is significantly superior to that of the wife and that he will, in any event, be better able to re-establish himself financially relative to the wife.

17.Notably, the wife’s proposal sees the husband retaining the Property B property ($910,000).  His evidence, however, is clear that he does not want to keep that asset.

The Husband's proposal

18.The husband argues that the Court should take a 'two pool’ approach.  He says that the wife's proposal would leave him with net negative tangible assets of approximately $285,646 (on my figures set out above). He says that he has no desire to retain the Property B property and asks for an order for its sale.  He says that this would then leave him still with substantial debt (around $340,000) but no assets to secure that debt (over and above the wife's offer to provide the former matrimonial home as security for four years). 

19.The husband concedes that he has a far superior income than the wife but argues that ‘justice and equity' is not afforded him in a situation where the wife would effectively be retaining more than 100% of the net tangible assets and he retains ‘negative tangible assets' in the form of debt.

20.The husband, however, concedes a significant loading to the wife by reason of the relevant section 75(2) factors including discrepancy in income and the greater responsibility for the care of the children. To this end, he says that he is prepared to allocate to the wife 100% of the net tangible assets. This would, of course, eradicate all of the debt in the form of numerous loans set out above and leave the husband to move forward debt free but also without any assets of value (save and accept some minor assets which the parties agree would be allocated to him) but would, of course, necessitate the sale of both the Property A and Property B properties. He says that the wife receiving virtually 100% of the net tangible assets would allow her to purchase an adequate property for herself and the children in the Property A market. Essentially he argues that there is no need for the wife to retain a property valued at dollars $1.4 m being at the higher end of the Property A property market in circumstances where he would be left with only debt. It follows in putting this argument that the husband is prepared to disproportionately take superannuation as his entitlement in allowing the wife to retain close to the totality of the net tangible assets but only where he is relieved of net debt in the result.

The Law

21.Section 79 of the Family Law Act 1975 (“the Act”) provides for alteration of property interests.

22.Section 79(1) states:

In property settlement proceedings, the court may make such order as it considers appropriate:

(a)  in the case of proceedings with respect to the property of the parties to the marriage or either of them - altering the interests of the parties to the marriage in the property …

23.Section 79(2) provides:

The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

24.Following the well-known decision of the High Court in Stanford v Stanford[1] I am obliged to make the determination under s.79(2) distinct from and not conflated with considerations of contributions.

[1] [2012] HCA 52

25.In the matter now before me, I am easily satisfied that it is proper, just and equitable to alter the parties property interests. The marriage was of some duration. I am satisfied that the marriage is broken down. The parties are joint owners of and responsible for both asset and debt.

26.The task for the Court is then and therefore a well-established one whereby I am first to determine the contents of the property pool and attribute value to that pool. As set out above, the parties here agree the property pool and values.  Importantly, superannuation interests and entitlements are to be 'treated as property' although not having the same tangible or crystalized nature as an asset[2].  

[2] Coghlan & Coghlan (2005) FLC 93-220

27.The Court is then to consider the contributions of the parties towards the attaining of, maintenance and improvement of the contents of the property pool. Contributions may be of a direct financial, indirect financial, or non-financial type including as homemaker and parent. After findings as to the contributions and the attributing of weight, the Court then considers whether it is just and equitable to make any further adjustments in favour of one or other of the parties on consideration of the relevant factors under s.75(2) of the Act. It is generally then understood that the Court should ‘stand back' and consider whether the proposed resulting orders are just and equitable in the particular circumstances of the factual platform and not simply on a basis of mathematical percentage division[3].

[3] Russell v Russell (1999) FLC 92-877

28.Unusually, and again with considerable credit to these parties, the issues of contribution and adjustment under s.75(2) do not weigh heavily in my consideration. That is, whilst the wife had an interest in some real property at the date of commencement of cohabitation, her Counsel, properly in my view, conceded in final submissions that I need not make any adjustment between the parties on the basis of contributions. Similarly, the husband's Counsel and the husband in the witness box readily concede that the wife would and should achieve a significant adjustment in her favour on consideration of the s.75(2) factors are. This being the case, the real issue for the Court is in the approach taken to altering the property interests in the sense of the arguments put on behalf of each party above. That is, should the Court adopt a ‘one-pool' or ‘two-pool’ approach? On a more practical basis, the Court is to consider, in all of the circumstances of these parties including but not limited to the husband's substantially superior income, whether 'justice and equity' is afforded both parties in making orders which would have the wife retain more than one hundred percent of the tangible hard-assets whilst leaving the husband without any assets but with not inconsiderable debt?

Consideration

29.There is no argument before me that there should be any adjustment between these parties on the basis of contributions.

30.I am easily satisfied that there should be a significant adjustment to the wife by reason of the s.75(2) considerations. The husband's income is substantial. Whilst he is perhaps generous in his contributions to the children and forthcoming by a concession to pay spousal maintenance (albeit not as to quantum or length of time) to the wife, his financial position remains far superior to that of the wife. Her current and potential income is limited relative to that of the husband. She has the major responsibility for the care of the children for a number of years into the future. Those children substantially reside with her. Consequently, and whilst an adjustment of at least 30% to the wife might ordinarily be contemplated, the proposals of both parties left for my consideration at the conclusion of the evidence render such a mathematical percentage precision unnecessary.

31.The force of the wife’s argument is the relative superiority of the husband's income.  I am referred by the wife's Counsel to the oft quoted comment of the Full Court in Clauson & Clauson[4] that an application of percentage mathematical distribution of property does not necessarily lead to a 'just and equitable' result and particularly at p. 81,911 where their Honours note:

It has long been recognised that in most cases the most valuable 'asset' which a party can take out of the marriage is a substantial, reliable, income – earning capacity…

There is, we think, at times a tendency to assess s.75(2) factors in percentage terms without considering its real impact, and we think there is legitimacy in the views expressed in more recent times that the court has tended to operate in this area within artificially delineated boundaries.  That is, it appears almost to be inevitable that the s.75(2) factors will be assessed in a range between 10% and 20%. A number of cases will justify an assessment outside those parameters and in any event it is the real impact in money terms which is ultimately the critical issue.

[4] (1995) FLC 92-595

32.On this theme of 'reality' and the wife retaining the home at a value greater than the total net pool value, Counsel refers me to Russell v Russell (supra at p.86,439) where the Full Court commented:

It must be remembered… That under s.79(2) of the Act, the court is required to be satisfied that it is the order to be made which is just and equitable, not just the underlying percentage division of the net value of the parties’ assets. 

33.Further, Counsel for the wife referred me to and relied upon a decision of the Full Court in Phillips & Phillips[5] where the wife, like in the matter before me, sought to retain the former matrimonial home.  That case, however, involved an issue of disputed valuation and where the Full Court considered the trial Judge’s order to sell the property (presumably to obtain ‘value certain') and where the Full Court commented at [69]:

While we are extremely conscious of the limits on appellate interference with discretionary judgements, especially in circumstances such as the present where it is not possible to identify any error by the trial Judge, and the quantum of the amount in dispute, nevertheless, in our view, to order a sale of the (X) property fell outside the 'generous ambit within which reasonable disagreement as possible.

[5] (2002) FLC 93-104

34.Suffice to say that I feel easily able to distinguish both the factual platform and the major issue in Phillips from those now before me.

35.I am fundamentally required here to determine whether I adopt the 'one-pool' or 'two-pool' approach to a consideration of the property and including superannuation.

36.In bald terms, the parties’ joint superannuation entitlements have a value of $553,441.  The net value of the non-superannuation tangible assets is $747,939. The wife's argument for a 'one-pool' approach is transparently based on her desire to retain the former matrimonial home which has an equity of $1,018,000.  Leaving aside other assets of relatively minor value that she would retain, this equity represents approximately 133.7% of the property pool or in practical terms, more than the parties own in the form of tangible assets. Inevitably, therefore, such as a settlement would leave the husband with substantial net debt.

37.The Full Court in Coghlan (supra) made it clear that superannuation entitlements differ from 'property' as defined in s.4(1) of the Act but that superannuation could be 'treated' as 'property'. Whilst the majority in Coghlan (supra) seem to be of the view that a 'two-pool' approach is preferable or that superannuation be considered separately than tangible assets, I am comfortably satisfied that I retain a discretion as to adopting either approach and that, ultimately, general issues as to justice and equity impact on the exercise of that discretion.  Importantly, however, the Court is obliged to render 'justice and equity’ to each of the parties. After some reflection and whilst noting the wife's rigorous and inflexible desire to retain the former matrimonial home and perhaps for some good subjective and objective reasons, I prefer that I conduct my consideration on a 'two-pool' approach.  I come to this conclusion on consideration of the following but not limited to the following relevant factors: –

(a)The wife's proposal not only leaves the husband with virtually nil tangible assets, it leaves him in a net position of substantial debt;

(b)The husband is just 47 years of age and perhaps in the prime of his career.  Whilst his income may be substantial, he would not realistically be looking at retirement and hence the crystallising of his superannuation entitlements for approximately 18 or so years;

(c)I do not consider that I have the power (nor would it be proper) to order that the husband retain a particular asset namely the Property B property where his unambiguous evidence is that he wishes that property to be sold.  Whilst the Property B property may have an equity of some $200,000, neither the husband nor the wife wish to retain that asset although the wife continues to seek an order that I impose that asset on the husband;

(d)Justice and equity in most cases involving an alteration of property interests leaves the Court to consider the ability of each of the participants to re-establish themselves after separation and after the making of property settlement orders; and

(e)This is not a matter where subtle adjustments of the 'mix' being sought between superannuation and property might easily allow the wife to retain the home. To the contrary, the wife's proposal for her to retain the former matrimonial home would give her a total asset value substantially in excess of the net asset value and leaving the husband retaining net tangible debt but without any or few hard assets.

38.I cannot see justice and equity being afforded to both the husband and the wife in the circumstances of the wife's proposal. To do so, in my view, would be to wander into the realms of social engineering or even to the 'soup kitchen', so eloquently suggested by Nygh J in Hirst v Rosen[6] where his honour said:

Section 79, as I have indicated in argument, does not entitle the court to adopt 'a soup kitchen' approach. The Full Court has made it quite clear in Currie & Currie (1976) FLC 90-101 … That the reference in s.79 (2) to considerations of justice and equity is controlled by the factors set out in sub-section(4).  It is, therefore, not open sesame for the court to administer such justice as it thinks fit.  That, indeed, would be a grievous error.

[6] (1982) FLC 91-230 at 77,251

39.With respect to his Honour and noting the later decision of the High Court in Stanford (supra), I am of the view that the sense of His Honour's comments hold true and also as later expressed differently but with same intent by Guest J in Farmer v Bramley[7] that an alteration of property interests pursuant to s.79(1) of the Act is not an invitation:

[7] (2000) FLC 93-060 at 87,972

… To engage in an unbounded exercise in distributive justice.

40.Undoubtedly s.79 of the Act emboldens a trial judge with a wide discretion in distributing property including to make adjustments pursuant to the numerous matters set out in s.75(2). Nevertheless, the statute equally provides boundaries and limitations on that discretion or, more properly, that the discretion is to be exercised within statutory constraints. Similarly, the authorities over the years have emphasised the breadth and nature of such a discretion as, for example, in Clauson with the innovative but proper observation that the most valuable 'asset' that a party can take out of a marriage is a substantial income. Nevertheless, I am of the view here that the wife's proposal that she retain hard-assets of significantly greater value than the net value of the parties’ joint assets exceeds the limits of even generous judicial discretion and moves outside the constraints of s.74of the Act. Rather, a proper examination of contributions and adjustments pursuant to s.75(2) serve to give proper attention to all of the relevant variables. The wife, however, bases her proposal on what she herself 'desires' as a result rather than by any attraction to either statute or precedent. The nature of matrimonial property pools vary almost as infinitely as do the nature of marriages themselves. The content and value of the property pool is the starting point of my consideration. S.74(4) then provides the boundaries within which judicial discretion is exercised. The second and relevant consideration here is the adoption of the 'two-pool' approach. There lay the boundaries and limitations of my discretion. It has never been and nor should it ever be the case that a property division is based on the wants and desires of a particular party to a marriage.

Conclusion

41.The husband now offers that the wife can retain 'all of the net assets' at value.  Whilst his offer is generous, I expect that it implies that he retains his motor vehicle ($20,750) and it is generally agreed that he will retain the Unit Trust' ($15,800).  He will automatically 'retain' the add-back of his legal fees paid ($20,000) in circumstances where neither Counsel argue against an approach of 'adding-back' paid legal costs.  On my calculations, therefore, the wife would retain assets with a net value of $691,389 as against the husband retaining assets to value of $56,550 (these calculations are based on an assumption that the husband's offer for the wife to retain 'all of the assets' was inclusive of his ANZ bank account balance of $21,000).  I calculate that to be a distribution of the tangible assets in favour of the wife as to 92.44% and to the husband 7.56%. Suffice to say that such a distribution might easily account for and give adequate weight to the comments of their Honours in Clauson in respect of the husband retaining the 'valuable asset' of his income. Further, such a generous consideration of the s.75(2) factors might well test the limits of even the broadest of discretion given to judges. Nevertheless, this is the husband's proposal and I am prepared to make orders accordingly.

Superannuation

42.Having taken a 'two-pool' approach, I must now consider whether, and if so, on what basis, I alter the superannuation interests of these parties. The majority of their interests are in a self-managed fund.  The wife also has a small industry fund entitlement.

43.It is, of course, proper for me to follow the course of consideration set out in s.79(4) including relevant s.75(2) factors in respect of superannuation entitlements if I am to 'treat them as property'.

44.On the evidence before me and given the length and circumstances of the relationship, I assume that the majority, if not all, of the superannuation entitlements have accrued during the course of the relationship. I have already found generally that contributions between the parties are equal. I have found that the wife has substantial s.75(2) factors in her favour. Nevertheless, there are other considerations at play here. Firstly, it is clear that the wife will leave this relationship in a substantially financially better position than the husband in the sense of net assets retained. This is a relevant consideration in respect of the parties being able to re-establish themselves following their separation. As against this, and, of course, the husband will have the benefit of an immediate and ongoing substantially superior income. A further consideration is that he will pay spousal maintenance for a period of time. He also contributes significantly towards the financial support of the children and does so (on his evidence) in an amount of approximately $55,000 per annum over and above his child support assessed at $36,500 per annum. Underlying all of these considerations is, of course, the fact that by reason of his income the husband will be able to superannuate himself into the future in a far superior quantum then will the wife.

45.Taking all of these matters into account I am of the view that the parties total superannuation entitlements should be adjusted as to 65% to the wife and 35% to the husband.  This will be achieved by a splitting order in respect of the self-managed fund which I calculate to be a base amount to the wife from the husband’s entitlement in the Rizzo Superannuation Trust of $158,828.52.

Spousal Maintenance

46.The wife seeks an order for the payment of spousal maintenance in the sum of $500 for period of four years.  She grounds this period on the basis of the youngest child’s primary school education requirements.

47.The husband accepts that he has an ability to contribute to the wife's financial support.  He argues that a reasonable period for continued spousal maintenance would be for two years and at a quantum of $300 per week. 

48.S.72 of the Act provides at subsection (1):

A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:

(a)by reason of having the care and control of a child of the marriage was not attained the age of 18 years;

(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or

(c) for any other adequate reason;

having regard to any relevant matter referred to in subsection 75 (2).

49.The wife provides a financial statement sworn 3 December 2018.  She discloses a gross income of $669.92 per week. That document at parts G and N states that her personal expenses total $872.43. On the bald face of that document alone her personal expenses exceed her income by only $202.51 per week.  Further, some of her claimed expenses in part N might reasonably be considered as unnecessary or luxuries.  However, I also accept that she will have the responsibility for some of the children's financial support.  She claims their expenses to be $741.72 per week.  The husband will contribute $702 per week from his basic child support assessment.  In all of these circumstances I am reasonably satisfied that the wife's needs for spousal maintenance would not be greater than the $300 per week offered by the husband.

50.The wife currently works part-time and I am satisfied that she is undertaking further education and is keen to eventually work full time. The youngest child is still of primary school age and this is a factor to take into account under the Act. The wife says that her care of this youngest child for a period of four years is reasonable and impacts on her ability to work full time and I generally accept her evidence and contention in this respect. Consequently, I intend to order that the husband by the wife spousal maintenance at the sum of $300 per week for a period of four years from the date of these orders which would accommodate that youngest child's primary education.

I certify that the preceding fifty (50) paragraphs are a true copy of the reasons for judgment of Judge McGuire

Date: 31 January 2019