S and S - [2002] FMCAfam 295

FEDERAL MAGISTRATES COURT OF AUSTRALIA

S & S

[2002] FMCAfam 295

FAMILY LAW – Property – superannuation – application to adjourn final hearing – interim orders – necessity to ensure orders are interim if an adjournment is granted – s.79(6) Family Law Act 1975 interim property orders made must be appropriate – s.79(5) Family Law Act 1975 nature of adjournment discussed – evidence of value of superannuation at further hearing must comply with Family Law (Superannuation) Regulations 2001 – findings supporting interim orders may differ on final determination.

Family Law Act 1975, s.75, s.79, s.79(2), s.79(4)(a)–(c) and (f)–g), s.79(5), s.79(6), s.79(7), s.90 and s.117

Family Law Legislation Amendment (Superannuation) Act 2001
Family Law (Superannuation) Regulations 2001
Child Support (Assessment) Act 1989

Lee Steere and Lee Steere (1985) FLC 91–626 applied
Ferraro and Ferraro (1993) FLC 92–335 applied
Clauson and Clauson (1995) FLC 92–595 applied
Russell v Russell (1999) FLC 92–877 applied
Van Essen and Van Essen (2000) FLC 93–028 distinguished
Versace and Armstrong [2001] FMCAfam 231 followed
Taylor & Taylor [2001] FamCA 866 followed
Carson and Carson (1999) FLC 92–835 followed
Burridge (1980) FLC 90–902 discussed
Harris v Harris (1993) FLC 92–378 discussed
Bassi and KD Sales Force Specialists Pty Ltd (1993) FLC 92–378 discussed
Bailey (1978) 4 FLR 86 referred to
Pierce v Pierce (1999) FLC 92–844 referred to

Applicant:

W J S

Respondent:

M S

File No:

PAM 269 of 2002

Delivered on:

12 September 2002

Delivered at:

Parramatta

Hearing Date:

30 July 2002

Judgment of:

Ryan FM

REPRESENTATION

Counsel for the Applicant:

Mr W Moss

Solicitors for the Applicant:

DGB Lawyers

Counsel for the Respondent:

Mr Wilson

Solicitors for the Respondent:

A R Yates & Co
Solicitors

ORDERS

Pursuant to s79(5) that these property proceedings are adjourned part heard for further mention on 31 January 2003 at 9.30 am.

IT IS ORDERED PURSUANT TO S.79(6) AND PENDING FURTHER ORDER:

That the husband pay to the wife the sum of $124,571 by way of interim property settlement within forty-two (42) days of the date of these orders.
Simultaneously with settlement pursuant to O 2 of these orders the husband shall give the wife an indemnity from the Westpac mortgagee releasing the wife from any liability pursuant to the mortgage. In the alternative a discharge of the Westpac mortgage shall be provided.
Upon compliance with O 2 and 3 of these orders the wife shall simultaneously transfer to the husband her interest in the property [at] Woonona in the State of New South Wales.
In the event that the husband fails to comply with O 2 or 3 above, that the parties forthwith do all such things to list the property situate [at] Woonona in the State of New South Wales for sale by private treaty with a real estate agent at a price to be agreed upon between the parties and failing agreement to be determined by the president of the Real Estate Institute of New South Wales or his nominee.
That the proceeds of sale pursuant to O 5 above be disbursed as follows:
a)Firstly, in payment of the costs of sale including the real estate agent’s fees and legal fees;
b)To discharge the mortgage to the Westpac;
c)In payment of any outstanding rates and charges;
d)In payment of $124,571 to the wife;
e)The balance to the husband.

That unless otherwise specified in these orders:
1.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 party as 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’s record thereof, insurance policies (but not superannuation entitlements) are deemed to be in the possession of the beneficiary thereof.
2.Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
That the respondent wife file and serve an amended response within twenty-one (21)days.
Pursuant to r15.1 of the Federal Magistrates Court Rules it was reasonable to employ an advocate to represent the parties in the proceedings.
That the applicant husband file and serve any reply within a further twenty-one (21) days.

(11)That the husband make written submissions as to costs within 14 days.
(12)That the wife make any written submissions in reply within a further 14 days.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
WOLLONGONG

PAM269 of 2002

W J S

Applicant

And

M S

Respondent

REASONS FOR JUDGMENT

Introduction

The proceedings concern competing applications for property settlement.
W J S (“the husband”) commenced these proceedings when he filed an application in the Family Court on 4 March 2002. Those proceedings were transferred to the Federal Magistrates Court on 17 June 2002. The matter was listed for trial on 30 July 2002. During closing addresses the wife’s counsel made an application to adjourn the proceedings pursuant to s.79(5) Family Law Act 1975. The application was predicated upon the basis that the new superannuation splitting laws were essential to enable the court to make orders that are just and equitable as required by s79(2). The amendments (inserted as s.90MC Family Law Act 1975) expand the definition of property contained in s.4 Family Law Legislation Amendment (Superannuation) Act 2001 to include superannuation. Contrary to the submissions made by the husband’s counsel the court granted the wife’s adjournment application. Both parties then made application for s.79(6) interim or partial final property orders pending the resumed hearing. The court was asked to make orders that dealt with all matters excluding superannuation.
Because the purpose of the adjournment is that the court would give the wife the benefit of the Family Law Legislation Amendment (Superannuation) Act 2001 the orders pending the completion of the hearing should be framed as interim orders. Section 5(2) Family Law Legislation (Superannuation) Amendment Act 2001 provides, “subject to subsections 3 & 4, the superannuation amendments do not apply to a marriage if a s79 order, or s87 agreement, is in force in relation to the marriage at the start up time”. The Family Law Legislation (Superannuation) Act 2001[1] provides that the Act will commence no later than 29 December 2002.
[1] Section 2
Section 4 Family Law Act 1975 defines a s.79 order as “an order (other than an interim order) made under s79 of the Family Law Act 1975”. Thus, an order that is framed as a s.79 order, other than an interim s.79 order attracts the provisions of s.5(2) of the Family Law Legislation (Superannuation) Amendment Act 2001. Certainty requires that the order must be framed as an interim s.79(6) order to ensure that the benefit of the legislation is clearly available when the proceedings continue. An interim s.79(6) order must be appropriate in the circumstances of the particular case.

The applications

In his application filed 4 March 2000 the husband sought orders, in essence, that the former matrimonial home be sold and after payment of the sale costs and Westpac mortgage the nett proceeds be divided as to 60 per cent to the wife and 40 per cent to him. He applied that the wife pay his costs.
At trial he proposed interim orders that upon the sale of the home he receive 60 per cent of the nett proceeds and the wife 40 per cent. Because the wife’s s.79(5) application was made at the end of the proceedings I gave both counsel the opportunity to make additional written submissions which addressed the orders the court should make by way of interim property settlement. In the husband’s submission his counsel wrote, “The husband seeks the opportunity to acquire the wife’s interest in the former matrimonial home”. No submissions contrary to this altered approach have been submitted on behalf of the wife.
M S (“the wife”) filed her response on 8 April 2002. The orders sought are set out below:
1.That the parties do all acts and things and sign all documents to cause property [at] Woonona to be sold and after payment thereout to the mortgage to Westpac Banking Corporation and all other sale expenses the whole of the nett proceed be paid to the wife.
2.That the husband transfer to the wife the whole of his right, title and interest in the Suzuki Berlina motor vehicle registered number WZE435.
3.That the wife transfer to the husband the whole of her right, title and interest in the Subaru Liberty motor vehicle registered number WZE435.
4.That the husband transfer to the wife 50% of his Illawarra Credit Union and BHP Billiton shares.
5.That the husband pay to the wife an amount equalling 50% of his total superannuation benefits upon his retirement or upon such benefits becoming available to him which ever is the earlier.
6.That the parties otherwise retain all property in their respective possession as at the date of these orders including their entitlements under any scheme of superannuation and further that the parties indemnify each other in respect of any liabilities in their sole name.
7.That the husband pay the wife’s costs of and incidental to this application
The wife’s counsel submitted a minute of orders, described as interim not partial, sought by her pending completion of the hearing. In essence, she sought 70 per cent of the nett proceeds of sale of the home and that the parties otherwise retain the assets, subject to any liabilities attached to the asset, that they each have.

The issues

Whether the proceedings should be adjourned pursuant to s.79(5).
Whether if an adjournment is made it is appropriate to make order pursuant to s.79(6).
The weight to be attached to the husband’s inheritance received in 1994.
The parties comparative capacity for paid employment.
The value of the husband’s superannuation.

Background facts

The husband was born in Wollongong on 24 November 1947 and is thus aged 54 years.
The wife was born in the United Kingdom on 23 January 1948 and is thus aged 53 years.
The parties married on 20 December 1969 at Corrimal. They did not live together prior to their marriage.
They have three children. SS who was born on 20 December 1976, D who was born on 9 October 1978 and their youngest C who was born on 9 April 1981. D is employed as a motor mechanic and C is studying nursing at the University of Sydney. They live in the former matrimonial home.
Although they did not live together prior to their marriage the parties established a joint bank account and shortly before they married purchased vacant land [at] Woonona. They paid $5,300 for it. There is minor disagreement about the date of purchase of the land, however nothing turns on this factual disagreement. At the time of their marriage both parties were in paid employment. The husband had started in June 1968 as a trainee mines surveyor with [Colliery A]. The wife worked as a teller with [Bank A], which was subsequently taken over by [Bank B]. Other than the land, the husband owned a 1969 Triumph motor vehicle and the wife had some personal possessions. Upon their marriage they lived in rented accommodation and both applied their income towards joint matrimonial purposes. These included paying the rent, paying a loan attached to their car and saving to build the home.
In 1972 the husband transferred to [Colliery B] where he remained for about five years.
In 1973 they completed the construction of a home on the land at [Woonona]. They borrowed funds from the wife’s employer, [Bank A], to do so. Whilst the home was being built the husband took a second job driving taxis.
In 1974, about two years before SS was born the wife gave up her paid employment. She had difficulty conceiving and I infer that the parties agreed that the wife should stop work for a time. She did not return to paid employment until about 1984.
In 1984 the wife’s father died. The parties agreed that her mother live with them. The wife’s mother spent about $25,000 building a granny flat at the former matrimonial home that she then lived in. The granny flat comprised an additional sitting room, bedroom and bathroom. At the same time the parties bought a business in Woonona known as [B]. The business involved making and selling school uniforms and other clothing for children as well as baby goods. $11,000 was borrowed from Westpac to purchase the business. Although their intention was that the wife’s mother manage the business she was unable to do so. Thus, the wife took it over and ran the business for approximately twelve months. Whilst she was at work her mother cared for the children. Unfortunately the business was unprofitable and twelve months later it was sold. On its sale the parties realised $12,000. These monies were paid to the wife’s mother to reimburse her for monies she paid into the business for operating costs.
Three and a half years after she moved in, the wife’s mother relocated to Darwin. She lived in Darwin for about five years before she returned to live with the parties. She subsequently died leaving an estate that comprised personal belongings that had no significant value.
Having left [Colliery B] in about 1977 the husband then worked at South Bulli Colliery as a mine deputy until about 1982. He then took up employment at [Colliery C], where he still works as a mine deputy.
In 1987 the wife returned to work as a cashier with [financial institution C]. She worked on a casual basis. Later, she took up full time employment, in about 1991 or 1992 as a loans officer for the next six years. She was made redundant in 1997. Her redundancy payout of approximately $15,000 was spent on household furnishings, bathroom renovations, solar heating for the swimming pool and otherwise general household expenses. Shortly after she received her redundancy the wife started work at [financial institution D]. She continues to work for [financial institution D] as the supervisor of the [suburb] branch. Currently she works 29.5 hours part time, five days a week.
In about 1999 the husband joined the BHP Superannuation Fund. When NRMA de-mutualised he was allocated 374 shares. Although not disclosed in his financial statement there is no evidence that suggests they have been sold. He joined the BHP Billiton Employee share plan and has 500 shares subject to a debt.
The parties separated on 20 September 2001. At separation the mortgage stood at approximately $161,000 to the Illawarra Credit Union. The husband re-financed the Illawarra Credit Union mortgage with Westpac during the first separation so that he had the benefit of a mortgage offset facility and line of credit. The Westpac loan had a lower interest rate.
Upon separation the wife vacated the former matrimonial home and commenced cohabitation with her partner W K. A few weeks later she returned to the former matrimonial home. The parties unsuccessfully tried to save their marriage. The wife then moved into a rented unit at Coniston where she lived alone. Six weeks later she returned to the former matrimonial home in about December 2001. Again, the parties tried to reconcile. The husband, however, had met his partner C L and in February 2002 left the former matrimonial home. The parties have both removed the furniture and household goods that they wished to have from the home. Their children D and C live at the home, although C stays in Sydney for part of each week.
On 1 June 2002 the parties signed an agency agreement with Martin Morris and Jones to sell the former matrimonial home. A sale was negotiated which later the proposed purchasers withdrew from.
Upon separation the husband maintained the mortgage limiting his payments, however, to repayment of interest only. On 8 July 2002 he drew down on the mortgage in the amount of $5,241.12. He did not discuss the draw down with the wife. $4,000 was paid to AGC and the balance as interest payments on the mortgage. The AGC loan was a joint matrimonial debt. Thus the draw down affects a capital contribution by both parties and moderates the husband’s claim that he made the mortgage payments subsequent to separation.
The wife has not made any mortgage repayments since separation. The husband stopped making payments in mid-June 2002.
In 1998 the parties purchased a Suzuki Berlina for about $21,000. They drew down on the mortgage to do so. At separation the wife had the use of the car and continues to do so. At separation the wife withdrew $2,500 from accounts in the husband’s name. Since then he has paid out debts to Illawarra Credit Union in the sum of $3,028 and ANZ Visa Card at $1,020. The wife has contributed to C’s living expenses whilst the husband has not. The wife shares her time between the former matrimonial time and her partner’s home. Most of her time is spent at Mr K’s home. She makes no financial contribution to his household. Mr K is a wedding photographer, a business that the wife helps with without remuneration.

Relevant Law

The approach to the determination of an application under s79 is well established by authority In the Marriage of Lee Steere and Lee Steere[2]; In the Marriage of Ferraro and Ferraro[3]; In the Marriage of Clauson and Clauson[4] the process ordinarily involves a multiple part procedure. Firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing. Secondly, evaluating the contributions made by the parties as defined in s.79(4)(a) to (c) and the effect of any proposed order upon the earning capacity of either party. I must then evaluate the matters contained in s.75(2) insofar as they are relevant, any other Order made under the Act affecting a party or child and any child support under the Child Support (Assessment) Act 1989 that a party to the marriage is to provide, or might be liable to provide in the future, for a child to the marriage.
[2] (1985) FLC 91-626
[3] (1993) FLC 92-335
[4] (1995) FLC 92-595
In determining what order the court should make under s.79, the court must be satisfied in all the circumstances that it is just and equitable to do so [s.79(2)]. It is the justice and equity of the actual orders that the court must consider. Russell v Russell[5].
[5] (1999) FLC 92-877
The importance of the husband’s superannuation entitlement to the justice and equity of the outcome of these proceedings is a pivotal issue. Section 79(5) of the Family Law Act provides:
Without limiting the power of any court to grant an adjournment in proceedings under the Act, where, in proceedings with respect to the property of the parties to a marriage or either of them, a court is of the opinion:
(a) that there is likely to be a significant change in the financial circumstances of the parties to the marriage or either of them and that, having regard to the time when that change is likely to take place, it is reasonable to adjourn the proceedings; and
(b) that an order that the court could make with respect to the property of the parties to the marriage or either of them if that significant change in financial circumstances occurs is more likely to do justice as between the parties to the marriage than an order that the court could make immediately with respect to the property of the parties to the marriage or either of them;
the court may, if so requested by either party to the marriage, adjourn the proceedings until such time, before the expiration of a period specified by the court, as that party to the marriage applies for the proceedings to be determined, but nothing in this subsection requires the court to adjourn any proceedings in any particular circumstances.

Section 79(7) of the Family Law Act provides:
The court may, in forming an opinion for the purposes of subsection (5) as to whether there is likely to be a significant change in the financial circumstances of either or both of the parties to the marriage, have regard to any change in the financial circumstances of a party to the marriage that may occur by reason that the party to the marriage:
(a)is a contributor to a superannuation fund or scheme, or participates in any scheme or arrangement that is in the nature of a superannuation scheme; or
(b) may become entitled to property as the result of the exercise in his or her favour, by the trustee of a discretionary trust, of a power to distribute trust property;
but nothing in this subsection shall be taken to limit the circumstances in which the court may form the opinion that there is likely to be a significant change in the financial circumstances of a party to the marriage.

In Van Essen and Van Essen[6] the Full Court of the Family Court refused an adjournment application predicated upon the proposed superannuation changes. When Van Essen (supra) was decided the legislation had not been passed and no conclusion could be reached as to its final form. More recently, in Versace & Armstrong[7] Bryant CFM applied s.79(5) and adjourned proceedings pending the commencement of the superannuation legislation. The Chief Federal Magistrate cited with approval the reasoning of Strickland J in Taylor & Taylor[8] in which he distinguished Van Essen (supra) subsequent to the passage of the legislation. This means that an application for orders pursuant to s.79(5) must establish the following preconditions cumulatively in order to invoke the adjournment power:
a)that there is likely to be a change in financial circumstances,
b)that the likely change is a significant one,
c)that having regard to the likely significant change it is reasonable to adjourn the proceedings, and
d)that an order made if that significant change occurs is more likely to do justice between the parties than an immediate order. See Carson and Carson[9].
[6] (2000) FLC 93-028
[7] [2001] FMCAfam 231
[8] [2001] FAM CA866
[9] (1999) FLC 92-835
Prior to the 1983 amendments to the Family Law Act 1975, Nygh J concluded that there was no power to make an interim property order. See Burridge [10]. However, he was satisfied that the court could make “in effect, a permanent order …..limited to a portion of the property”. In 1983 s.79 was substantially amended when s.79(5),(6) and (7) were added. In Harris v Harris [11] the Full Court of the Family Court analysed the meaning of interim and partial property orders. At page 79, 929 the Full Court said:
The distinction that Nygh J drew in Burridge between an interim and a partial order appears to be that the interim order is one which operates until the final hearing, but may then be submerged into the final order. Whereas a partial property order complete in itself, but dealing with part only of the property and not intended to be a final determination of the proceedings.
We do not doubt that the Court has power in a proper case in s79 proceedings to make what may be conveniently described as an interim order, that is an order dealing with some of the property of the parties prior to the final hearing. We do not consider that it is necessary to draw a distinction in terminology between an interim order and a partial order.
[10] (1980) FLC 90-902
[11] (1993) FLC 92 – 378
Harris (supra) was subsequently discussed in Bassi and KD Sales Force Specialists Pty Ltd[12]. The Full Court emphasised that Harris (supra) did not decide that there is no distinction as identified in Burridge (supra) between interim or partial property orders or “that it is inappropriate to draw it in a proper case”[13]. Relevantly the court also held:
The Court’s power, under s79(6), to make property orders where it makes an order under s79(5) adjourning proceedings to await the occurrence of a significant financial event such as the receipt of superannuation, is not confined to making “interim” orders. By that sub-section it may make “such interim order or orders or such other order or orders (if any) as it considers appropriate with respect to any of the property of the parties to the marriage or either of them.
[12] (1999) FLC 92-867
[13] at 86,265
Thus pursuant to s.79(6) a court may make inter alia, either an interim or partial property order. It is worth noting that in Carson when exercising its own discretion on appeal, the Full Court ordered the transfer to the wife of the husbands interest in the home and release from a mortgage by way of interim partial property adjustment. There the source of power was clearly s.79(6). Both Harris and Bassi (supra) were decided prior to the Family Law Legislation (Superannuation) Amendment Act 2001. Section 5(2) of the Family Law Legislation (Superannuation) Amendment Act 2001 may result in the Full Court giving further consideration to the interim or partial order dichotomy. Ultimately the key difference may be whether the source of power is the PtVIII enabling provisions found in s.80(1)(h) or (k)[14] or alternatively s.79(6). The former is only activated by the exercise of a primary power in PtVIII. Whether the order is an interim or partial order the husband’s counsel submitted, “the exercise of the power should be exercised conservatively. In particular the judge should be satisfied that the remaining property will be adequate to meet the legitimate expectations of both parties at the final hearing, or that the order which is contemplated is capable of being reversed or adjusted if it subsequently considered necessary to do so”. I agree that this reflects the current law.
[14] As relied upon by Nygh J in Burridge (supra)
The nature of the “adjournment” ordered pursuant to s.79(5) has also been the subject of comment by the Full Court. It is not an adjournment in a strictly procedural sense. In Grace and Grace[15] the Full Court said:
..the purpose of s79(5) is to not give rise to an expectation among the parties or the Court that they are concerned with the property available for distribution at the time of the s79(5) application. Rather, the purpose of an order under s79(5) is to defer the step of ascertaining the property pool for distribution to a defined future point in time.[16] See also Martin v Martin[17]
[15] (1998) FLC 92-792
[16] at 84-889
[17] (1986) FLC 91-737

Assets and liabilities as at date of hearing

I find that the parties assets and liabilities and financial resources as at the date of this first part of the hearing are as set out in the table below:

Assets as at the Date of Hearing	$
Woonona [home] (agreed)	387,500.00
Illawarra Credit Union account (H)	3,000.00
Western Credit Union account (W)	100.00
533 BHP Billiton shares (H) at $9.08	4,839.64
Liberty Subaru (H)	30,000.00
Berlina Suzuki	10,000.00
IAG shares (H) (agreed)	902.00
Household effects (H)	5,000.00
Household effects (W) (agreed)	5,000.00
TOTAL ASSETS	446,341.00
Liabilities as at the Date of Hearing	$
Westpac mortgage	154,000.00
David Jones (H)	3,431.00
Illawarra Credit Union (Husband’s car)	30,657.00
Visa account (W)	3,000.00
BHP Employee share loan (H)	6,761.00
TOTAL LIABILITIES	197,849.00
NETT ASSETS	248,492.00
Financial Resources
Coal Super Retirement Fund as at 10/07/02 (H)	151,415.10
BHP Billiton as at 10/07/02 (H)	42,998.55
MLC Master Key Superannuation as at 09/07/02 (H)	107,155.83
CUE Super Plan (W)	6,059.00
MLC Master Key Superannuation (W)	23,075.00

P P of [Financial Planners] gave evidence regarding the taxation implications for the husband if he withdrew his total superannuation monies as a lump sum after he turns 55. He prepared a report dated 29 July 2002[18] which he supplemented by oral testimony. He only had limited information and assumed that all monies were contributed post-1983. The husband has been a member of the COSAF superannuation fund throughout his working life and joined the MLC Master Key Superannuation Fund upon the parties marriage. Thus the post 1983 contribution assumption is wrongly applied to those funds. He conceded that the $5,000 termination payment deducted from the MLC termination benefit is not payable if the husband takes his interest in the fund after he reaches 55 years. The tax free threshold, currently $112,000, will increase annually in accordance with movements in the CPI. He anticipated this is roughly equivalent to 4% annual increases and thus the later the husband takes his superannuation, the higher the tax free threshold limit is. Assuming there are no major changes to the value of the superannuation funds Mr P’s evidence is that the husband can expect to pay $30,044.15 tax should he withdraw his total superannuation entitlement as a lump sum once he turns 55 years. Taxation that is payable should be deducted from the benefit when deciding its value. Any preserved amounts of superannuation cannot be withdrawn in cash until the husband has turned 55 years and has genuinely retired[19]. $42,998.55 of the BHP Billiton Fund is preserved and $122,297.40 of the COSAF Fund is preserved. The whole of the wife’s CUE superannuation is preserved. The evidence does not address whether any of her MLC Master Key fund is preserved.
[18] Exhibit D
[19] Exhibit B
Although not explicitly addressed it seems that prior to separation both parties approached the acquisition of superannuation entitlements as a joint venture for their retirement. Whilst each directly contributed from their income to their own fund, both contributed indirectly as family income was diverted into the funds. See In the Marriage of Bailey[20]
[20] (1978) 4 FLR 86
The relevance of these findings as to the value of the parties, particularly the husband’s, superannuation interests is its nexus to the adjournment application. The findings address the funds current value. These findings do not bind the court on the resumed hearing. Ultimately if the court makes a splitting order, the husband and wife will have separate reasonable benefits limits and eligible termination payments.
The wife’s counsel argued that the $5,241.12 draw down on the mortgage should be notionally added back to the asset pool. However, because these monies were used to pay the mortgage and the joint AGC liability I do not bring the funds back into the matrimonial pool. Rather, this matter is better dealt with as a contribution factor. The husband did not seek a notional add back of the monies withdrawn by the wife at separation. As the evidence does not reveal that she had other funds to live on, it is unlikely these monies would have been added back.
The husband does not challenge the wife’s evidence that they each have taken a roughly equivalent share of the contents of the matrimonial home. That he agrees that the wife’s household effects have a value of $5,000, I infer that his have an equivalent value. He has borrowed extra funds on the David Jones credit card to supplement the household effects which loan will be taken into account as a joint liability.

Section 79(4) contributions

Throughout the whole of the marriage the husband has been in full time employment. Just as the wife did, he applied the whole of his income to joint matrimonial purposes. This included the purchase of the land, building the home upon it, acquiring savings, servicing matrimonial debt and otherwise the costs incurred by the family in day to day living. His salary provided the source of funds from which superannuation payments were made into each of his three superannuation funds.
The husband’s counsel submitted that the $60,000 inheritance received by him in 1994 materially affected the findings the court should make in relation to the comparative financial contributions made by the parties. This is because compared to the wife’s lump sum contributions it was received comparatively recently and is a larger sum. Neither counsel submitted that there is a distinction that any of the lump sums had a particular quality applicable in terms of its application by the parties[21]. Coming as it did within about six years of separation and as a larger sum, the husband’s inheritance justifies a finding that the financial contribution made by him is slightly greater than that made by the wife. The earnings he achieved by salary and as an official in the [C] Association were greater than the wife achieved as a bank teller. Thus, I am satisfied that the husband made a greater financial contribution to the acquisition, conservation and improvement of the assets than the wife did.
[21] See Pierce (1999) FLC 92-844
Neither party asserts that the court should make a finding other than each party made an equivalent non-financial contribution, a matter apparent from the manner in which they presented their case. I agree.
Both parties made a contribution as a home maker and to the welfare of the family. The wife relinquished full time employment to improve the likelihood that the parties would be able to have children. Thereafter, she was primarily responsible for maintaining the home and attended to the day to day running of the home. Once they had children the wife assumed primary responsibility for their care. Eventually she returned to work, initially working part time so that she could continue her prime role as a home maker and parent. In paragraphs 40 and 41 of her affidavit she details her work in the home. The husband does not challenge her evidence. Rather, he complimented the wife’s care of the children and with her took an active part in their school activities, sports and social activities. His working hours were always longer than the wife’s were. I am satisfied that the wife made a greater contribution as a home maker and parent than the husband did.
The orders will not affect the earning capacity of either party. All three children have turned 18. There are no s.79(4)(f) or (g) factors.
This was a marriage of approximately thirty-one years during which the parties had three children. Both parties worked hard throughout the course of their marriage. The husband assumed primary responsibility for the financial support of the family and was able to earn greater income than the wife did. All money earned and inherited by him was applied to joint matrimonial purposes. The wife contributed all money earned by her similarly and assumed primary responsibility for the home and the children. During their marriage the parties achieved a comfortable standard of living and provided well for themselves and their children. Their contributions complimented each other. Evaluated comparatively the contributions are equal. The husband’s slightly greater financial contribution equates with the wife’s slightly greater contributions as a home maker and parent. Contributions as a home maker and parent must be given proper value. Having regard to the matters in s.79(4)(a)–c) inclusive, the parties made equal contributions. Since separation neither party has made a significant contribution that results in a different finding. Whilst the husband has supported the home and loans, he drew down on the mortgage to a considerable degree in order to do so. Thus his contribution is subsumed into the current level of indebtedness. These findings guide the court in its consideration of the adjournment application and, if it is granted the competing applications for interim property orders. Whether or not these global findings are applicable to a larger asset pool that includes the parties’ superannuation is an issue that will be addressed at the further hearing.

Section 75(2) factors

Subsection (a)

The husband is one year older than the wife is. They are both in good health. I make no adjustment pursuant to the subsection.

Subsection (b)

I have already made findings about the property and financial resources of the parties and do not repeat them. Because superannuation will be taken into account later it would be double counting if it were considered in the s.75(2)(b) exercise at this time. The husband’s gross income is $1,866.00 per week. It has reduced since he completed his financial statement because he is no longer receiving income from the [C] Association. He turns 55 on 24 November 2002. This is compulsory retirement age in his industry. This is a curious term because he is able to work beyond his 55^th birthday in the industry should he choose to do so. It is likely that he will continue to work until he is 60 years old, his preference being to retire then rather than at 65 years. The wife’s part time work results in a gross weekly payment of approximately $533.16. Previously she had worked thirty-eight hours per week, which hours were reduced to their current level three years ago. Although she has worked in the finance sector for many years, she is without formal qualifications. She has limited computer skills and would require training to achieve reasonable administrative or clerical skills sufficient to obtain employment in that field. Whilst there is some uncertainty about the future of the [suburb] branch of [financial institution D] I am satisfied that the wife will be able to continue to work and earn income at her current level for probably the next five years. Beyond that, her future is much more uncertain.

I make an adjustment in favour of the wife pursuant to the subsection.

Subsection (c)

This does not arise.

Subsection (d)

The husband’s income significantly exceeds his expenditure. By comparison the wife uses all her income to meet her necessary commitments. Neither party is extravagant, nor are they wasteful. Realistically their commitments are modest and appropriate given their comparative incomes. However, the adjustment made pursuant to s.75(2)(b) which addresses the disparity in income, property and financial resources (excluding superannuation) is a sufficient adjustment and a further adjustment under s.75(2)(d) is not warranted.

Subsection (e)

Neither party has a responsibility to support any other person.

Subsection (f)

This does not arise.

Subsection (g)

Since separation the wife has moved between the former matrimonial home, a rented unit and lived with her partner. The husband remained in the former matrimonial home until he moved to live with his partner in rented accommodation. Both parties have maintained a standard of living that is reasonable in the circumstances. I make no adjustment pursuant to the subsection.

Subsections (h) – (l)

These do not arise.

Subsection (m)

The wife’s partner runs his own small business. He has an interest in a home with his former wife. The wife does not contribute to the household expenses incurred in his home. She does work for him that is unpaid. The husband’s partner, C L is unemployed. There is a paucity of evidence about her financial situation. I make no adjustment pursuant to the subsection.

Subsection (n)

The orders that the court makes will be s.79(6) interim orders. The husband will pay the wife a sum of money for her share of the nett available assets. He will need to extend his borrowing’s to do so. He has the capacity to do so. Because the hearing has not concluded any orders made at this stage may be the subject of later orders. I make no adjustment pursuant to the subsection.

Subsection (na) – (p)

These do not arise.
Having regard to the relevant section 75(2) factors I find it appropriate that there should be an adjustment in the wife’s favour having regard to section 75 (b). The appropriate adjustment to make in the wife’s favour is 5 per cent. Given the limited size of the available asset pool, any lesser adjustment would be notional. The nexus between the s.75(2) adjustment and the size of the asset pool is apparent. If it were considerably larger, 5% may be too generous to the wife. This adjustment may or may not be appropriate when the hearing concludes. It provides the sub-stratum for the interim not final orders.

The adjournment and section 79(6) orders

The nett value of the assets is significantly less than the nett value of the parties superannuation interests. The nett value of the husband’s superannuation entitlements exceeds the nett value of the matrimonial property. If the superannuation entitlements were treated as a financial resource, the court must find that a very significant percentage adjustment in favour of the wife should be made pursuant to s.75(2). Orders that gave her all of the matrimonial assets would be manifestly unjust to the husband. He would have nothing until his retirement. Subject to specific circumstances, which do not arise in this matter, a court cannot make orders for the adjustment of property greater than the nett available assets. Because the value of the husband’s superannuation exceeds the nett matrimonial assets, even taking into account the wife’s superannuation entitlements, without adjusting the husband’s superannuation justice and equity to the parties cannot be achieved. The husband is eligible to take his superannuation upon reaching 55 if he retires. It is more likely that he will continue to work until he is 60 years old. The effect of the superannuation changes to which I have already referred in these reasons will enable the court to treat the parties’ superannuation as property. Thus orders can be made in relation to it. Treating the superannuation as property is a material and significant change in the financial circumstances of the parties and the size of the asset pool. If the completion of the hearing is deferred until after the amendments are operative the court will be in a better position to do justice as between the parties than it could if the proceedings were determined immediately.

The husband’s counsel conceded that had the adjournment application been sought prior to the start of the hearing his client would have conceded the application to adjourn. This implicitly acknowledges the current constraints on the court’s capacity to make final orders that satisfy s.79(2). Because the adjournment application was made at the end of the hearing and after the court had earlier expressed concern about its capacity to make orders that were just and equitable immediately he submitted the adjournment should be refused. Although the application was unfortunately late, its lateness does not detract from its veracity. The consequence of adjourning at the end of the hearing is best addressed by an order for costs.
Both parties wish to have secure housing. Only the husband wants to live in the matrimonial home. He will have the opportunity to do so. The parties agree on the value of the former matrimonial home. It is unclear whether withdrawing the home from the real estate agent who has marketed it may result in fees becoming payable to the agent. If there are, then those costs must be borne by the husband. Because the parties are estranged requiring the husband to refinance the mortgage and take responsibility for the home whilst the wife is a joint owner is unreasonable. Similarly leaving the wife exposed to a continuing liability in relation to the current or an enlarged mortgage is inappropriate. When the wife transfers her interest in the former matrimonial home to the husband, in addition to the monies that must be paid by him to her he must provide either a release from the mortgagee that releases the wife from her obligation to the mortgagee or otherwise a discharge of the mortgage. By doing so she will have a better opportunity to borrow sufficient monies to enable the purchase of a modest home.[22] Because the parties have already distributed other items of personalty the orders should reflect that reality. It would be an artificial exercise to only address the equity in the former matrimonial home. Both parties, during the adjournment must remember that these orders, in part or in whole can be subject to later final orders.
[22] Authority for a similar approach is found in Carson (supra)
The husband will retain the home, his savings, shares, car and furniture the total value of which is $431,241.64. The liabilities attached to these are $194,849.00. The husband is entitled to assets the nett value of which is $111,821. The wife currently has assets valued at $15,100 that she will keep. She has liabilities of $3,000. She will receive

55 per cent of the nett assets and is thus entitled to assets the nett value of which is $136,670.00. There will have to be an adjustment to the wife paid by the husband. The adjustment is $124,571.00. If the money is not paid the home must be sold. Although it has an agreed value the nett proceeds can not be known. After payment of selling costs, discharge of the mortgage and any outstanding rates the wife shall have the amount referred to above. Any adjustment that needs to be made as a consequence of the actual selling price and other costs can be made at the final hearing.

Conclusion

This has been an unusual matter. Both because the adjournment application was made late in the proceedings and because the parties agree that upon the court granting the adjournment it should make substantial interim property orders. It is appropriate that pursuant to s.79(6) and pending further order that interim orders are made that reflect this outcome. I have made findings concerning the application of s.75(2) and do not repeat them. Balancing all these factors, it is appropriate that the parties nett available assets should be adjusted as to 55 per cent to the wife and 45 per cent to the husband. The wife will have monies which will enable her to re-enter the property market and provide a home for herself. Having listed the home for sale both parties agree that she should have the benefit of her share of it immediately. In order to buy a home it is likely she will need to borrow money in order to do so.
That the outcome of the application of s.79(4) and s.75(2) to the limited asset pool has resulted in a distribution favourable to the wife 55 per cent as to the husband’s 45 per cent I am satisfied is just and equitable within the meaning of s.79(2).
There are significant issues for determination at the resumed hearing. Not only must the court deal with the superannuation as property but also any relevant events that may attract either s.79(4), s.75(2) and s.79(2). At the further hearing the court must have evidence of the value of the relevant superannuation interests in accordance with the method provided in the Family Law (Superannuation) Regulations 2001. Before the proceedings resume the wife must give the trustees of each eligible superannuation plan notice of any application to split or flag the husband’s superannuation interests (s.90MZD will then be operative). This may well mean that the findings as to the value of the parties’ superannuation entitlements are significantly different to their current value. Findings, which have underpinned the current exercise, may as a consequence of intervening events be no longer justified.
Because on the resumed hearing there are substantial issues to be addressed, the wife’s submission that no additional costs arise as a consequence of the adjournment fails. Thus the court must consider the husband’s application that the wife pay his costs of this hearing.

Costs

The gravamen of the costs application is that it is alleged by the husband that the wife in effect wasted his time by making the adjournment at the conclusion of the hearing thus limiting the utility of the hearing and necessitating a further hearing. Hence costs were thrown away. The wife submitted that costs were not thrown away and the resumed hearing will be comparatively inconsequential.
The matters that the court must consider on an application for costs are those matters contained in s.117 Family Law Act 1975. The normal rule is that each party will pay their own costs. However, the court may make an order for costs if it is satisfied that in the particular circumstances of the case it should do so. When the court is looking to consider whether an order for costs should be made the court must consider those matters contained in s.117(2)A. I will deal with those matters sequentially.
Subparagraph (a) — the financial circumstances of each of the parties to the proceedings. I have already made findings in relation to the parties’ financial circumstances and I do not repeat them. The husband is in a superior financial position to the wife. The subsection favours the wife accordingly.
Subparagraph (b) — does not arise. Neither party is in receipt of a grant of legal aid.
Subparagraph (c) — the court’s capacity to do justice and equity was a pivotal issue in these proceedings. From the outset its capacity to make orders that concerned the husband’s superannuation entitlements was fundamental to its capacity to make orders that addressed s.79(2). The orders sought by the wife in her response vis superannuation were beyond the court’s jurisdiction. At the start of the hearing this issue was raised with her counsel and in spite of the court’s expressed concerns about the form of order sought she instructed her counsel to continue. Because of the size of the asset pool compared to the superannuation interests, a s.79(5) application should have been made sooner. Thus the first stage of the hearing would have been avoided. The facts are sufficiently compact that the whole of the issues would always have been able to be addressed in one day. As a consequence of her insistence that the matter proceed as it did, the hearing will require two days to complete. These additional costs are incurred unnecessarily. The application of the sub-section favours the husband.
Subparagraphs (d), (e), (f) and (g) — do not arise.
I am satisfied on balance that there should be an order for costs in favour of the husband. I will order that the costs be quantified in accordance with schedule 1 of the Federal Magistrates Court Rules. Because the submissions did not adequately address quantum both parties will have 14 days, consecutively, within which to make any written submissions as to the quantum that should be ordered.

I certify that the preceding seventy-five (75) paragraphs are a true copy of the reasons for judgment of Ryan FM

Associate:

Date: 12 September 2002