S v S

[2009] FCWA 8

[2009] FCWA 8

JURISDICTION	:	FAMILY COURT OF WESTERN AUSTRALIA
ACT	:	FAMILY LAW ACT 1975
LOCATION	:	PERTH
CITATION	:	S and S [2009] FCWA 8
CORAM	:	THACKRAY CJ
HEARD	:	17 DECEMBER 2008
DELIVERED	:	9 JANUARY 2009
FILE NO/S	:	PTW 2851 of 2006
BETWEEN	:	S Applicant/Husband
AND
S Respondent/Wife
Catchwords:

FAMILY LAW - Property - s 75(2) factors - Adjustment in favour of the wife

Legislation:

Family Law Act 1975

Category: Not Reportable

Representation:

Counsel:

Applicant	:	Ms P Giles
Respondent	:	Self Represented Litigant

Solicitors:

Applicant	:	Lewis Blyth & Hooper
Respondent	:

[2009] FCWA 8

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

DJM v JLM (1998) FLC 92-816
Harrison and Harrison (1996) FLC 92-682

[2009] FCWA 8

1 I am required to resolve a dispute between [Mr S] (“the husband”) and [Mrs S] (“the wife”) in relation to division of their assets.

2 There was very little disagreement concerning the asset pool and no dispute

concerning contribution issues, leaving the only significant matter for determination the adjustment to be made pursuant to s 75(2) of the Family Law Act 1975 (“the Act”).

Brief background

3 The wife is 54 years of age. She is employed on a part time basis as a clerk.

4 The husband is 56 years of age. He is permanently incapacitated. He lives on

benefits to which he is entitled arising out of his service in the [defence forces], during which service he suffered an injury, leading to the amputation of one of his legs in 2005.

5 The parties commenced cohabitation in 1983 and were married in July 1984. The parties regularly moved around Australia and overseas in the course of the husband’s service in the [defence forces].

6 There are three children of the marriage: [D] born in June 1986; [M] born in August 1988; and [J] born in April 1994.

7 The wife continues to live in the former matrimonial home with the two

youngest children. She acknowledges that she will be unable to afford to acquire the
husband’s interest in the home and that it will have to be sold.

The asset pool

8 I find the assets and liabilities at the time of trial to be as follows:

Husband	Wife
$	$

Assets

[Matrimonial home] 300,000 300,000

[Wife’s car]	2,750
[Husbands’s car]	35,000
Wife’s Bank Accounts	1,700
National Australia Bank shares	12,415

[2009] FCWA 8

Furniture and contents	3,000	4,000
Legal fees added back	6,987	480

Add back –account with [Mrs W] 1,850

Total assets	344,987	323,195
Liabilities
Aussie Home Loan	3,000	3,000
Virgin MasterCard	3,200

Commonwealth MasterCard 800

Total liabilities	3,800	6,200
Net Assets	341,187	316,995

9 I propose treating the parties’ superannuation entitlements as if they were

property. They are of almost identical value, albeit the husband is presently able to
access his, whereas the wife cannot. The superannuation entitlements are as follows:

Husband Wife

AMP	15,237
Westscheme	6,605
Commonwealth superannuation	22,000
Total superannuation	22,000 21,842

10 Although at the commencement of the hearing there were a number of matters in

dispute (or at least questioned) relating to the assets, these were mostly resolved by
discussion and exchange of documents.

11 Hence, for example, although the husband was proposing that the wife be

responsible for the home loan, his counsel conceded during the hearing that this was no longer an issue. Similarly the husband did not pursue an “add back” relating to certain funds received by the wife. The wife also did not pursue an “add back” associated with the withdrawal of $45,000 by the husband from his superannuation in order to buy a motor vehicle.

[2009] FCWA 8

12 I have included both parties’ MasterCard liabilities in the list of assets and

liabilities notwithstanding they were incurred post separation. The evidence indicates that both liabilities were incurred for appropriate purposes (including improvements to the matrimonial home) and they represent part of the parties’ financial position as at the date of the trial.

13 I have included the wife’s bank accounts at the figure given by her in her oral

evidence (and as accepted by counsel for the husband), but I have also noted the wife’s evidence that she had some bills to pay using this money, although these were not quantified.

14 At the conclusion of the trial the only significant matter relating to the asset pool

still in dispute was a $6,300 “add back” sought by the husband in relation to the disbursement of joint funds some years prior to separation. I accept that the wife had been making significant efforts to obtain documents to show the purpose for which these monies were expended. Her expectation was that she would find that the money had been paid to discharge a credit card liability in the name of the husband. The wife gave every impression of being a reliable witness and I had little doubt there would be a legitimate explanation for the expenditure of this money.

15 The wife was given permission following the conclusion of the hearing to

adduce further evidence in relation to the proposed $6,300 “add back”. The Court subsequently received a copy of a letter from the Bank which confirms the wife’s recollection of how the funds were expended.

16 The wife was also given leave to provide a document after trial to corroborate

her recollection that she had paid only $480 to solicitors for legal fees incurred in these proceedings. The Court has since received a document confirming this was the amount.

Credibility

17 The assessment of credibility is of only marginal relevance in these proceedings.

18 I have already indicated that I found the wife to be a reliable witness. Although

some effort was made to paint her in a less than favourable light as a result of her decision to work only four days a week (because she would be no better off working an extra day), I could see nothing inappropriate in her conduct, particularly in light of the facts that she still has a teenage child for whom she is responsible and her employer does not have additional work for her at the present time.

19 I formed an equally positive view of the husband. Like the wife, he appeared to

be a pleasant and responsible person. It is true that he gave somewhat contradictory evidence concerning the pension entitlements he is currently receiving and in one instance he gave incorrect evidence in relation to his Defences Forces Retirement and Death Benefit (DFRDB) payments. Documentation provided by his solicitors after the hearing (to which I will refer later) also indicated that he gave inaccurate evidence concerning the number of times he has been rejected for a TPI pension.

[2009] FCWA 8

20 However, I am not satisfied that these contradictions/errors were the result of

any effort on the part of the husband to deceive the Court. They are more likely an indication of the husband’s confusion about financial issues and in this regard it is important to keep in mind that the husband does not enjoy good health.

Property settlement approach

21 I am required to follow a four step process in dealing with applications for property settlement pursuant to the Act. These are:

• identify and value the assets and liabilities of the parties;

• assess each party’s contributions to the assets;

• assess a range of factors set out in s 79(4)(d) to (g) of the Act; and

• consider whether the proposed orders are just and equitable.

Contributions

22 I have recorded already that there was no dispute between the parties relating to

contributions. Very sensibly, given the length of the marriage and the efforts each made, neither party suggested their contributions were more valuable than the other party’s.

Section 75(2) and other factors

23 I am required to take into account factors set out in s 79(4)(d) to (g) of the Act. These incorporate the matters referred to in s 75(2), to the extent they are relevant.

24 The husband originally proposed that he receive an adjustment of 5% on account

of s 75(2) factors, thereby bringing about an overall distribution of assets 55:45 in his favour. At an early stage of the trial, his counsel informed me that the husband had previously offered to forego any adjustment and made an open proposal that the assets be divided equally.

25 The wife sought a significant adjustment in her favour on account of s 75(2)

factors. She argued that there should be a 5% adjustment on account of the fact that [J] was a child under the age of 18 years for whom she would be responsible. She sought a further 5% on account of the fact that the husband will have free medical and dental treatment for the balance of his life. Finally, she sought a payment from the husband of $60,000 on account of the husband’s DFRDB entitlement.

26 I should note that the wife had, prior to trial, obtained a valuation of the

husband’s DFRDB entitlement. She noted that the valuation was included in her list of disclosure documents, although it was apparently not inspected. Counsel for the husband asserted that the wife’s list was somewhat cryptic and in any event submitted that the valuation had been obtained in breach of the “single expert rules”. Furthermore no affidavit had been obtained from the actuary who had prepared the

[2009] FCWA 8

valuation. Given these difficulties, the wife elected not to seek an adjournment to rectify the procedural problems but instead asked me when assessing the s 75(2) adjustment to take into account in a general way the fact that the husband had the benefit of his DFRDB.

27 At the outset of my discussion of the s 75(2) factors I should say that I do not

propose to ascribe specific percentages/amounts for the each of the matters raised by the wife. The wife was self represented and would not have been aware that the Full Court has indicated that this is not an appropriate approach when making the s 75(2) adjustment: Harrison and Harrison (1996) FLC 92-682 at 83,085; DJM v JLM (1998) FLC 92-816 at 85,273 - 85,274.

28 The husband is a few years older than the wife. He does not enjoy good health.

He suffers from depression, Post Traumatic Stress Disorder and diabetes, as well as problems associated with the amputation of his leg. The wife accepts that he will never work again. The husband does, however, have a Gold Card which entitles him to free medical and dental treatment for life. According to the husband, the card would cover costs associated with treatment at private hospitals and by psychiatrists as well as providing discounted medication.

29 The wife enjoys better health than the husband. She has high blood pressure

which is currently controlled by medication. She gave evidence that one of the reasons she is currently working only four days per week is to ensure a proper “life balance”. In this regard it is worthy of note that the wife suffered a nervous breakdown in 1998.

30 The property of the parties and their respective superannuation entitlements have

been set out above. If they were to be divided equally (based on contributions), each
would receive in the region of $350,000.

31 The parties have no other financial resources. The wife has accumulated pro

rata long serve leave entitlements as a result of having worked in her current employment for 10 years. I accept the wife’s evidence that she is probably unable to cash her entitlements until such time as she has completed 15 years service (unless she resigns) but she may be able to take some of the leave accrued before the expiration of 15 years.

32 The wife’s income comprises $612 gross per week from employment; $89 per

week from Family Tax Benefit; $87 per week Centrelink pension and $50 per week child support from the husband. I accept that the wife’s parenting payment benefits will cease when [J] attains the age of 16 years.

33 The wife commenced working four days a week comparatively recently, having

previously worked three days a week. I accept there are no more hours available to her with her current employer. Notwithstanding the wife’s obvious competence, I accept that she would be unlikely to be able to return to work in banking, having not worked in that industry now for many years. I also consider that she would have difficulty at her age and with her experience to obtain work much better paid than she presently has. I can also understand why, in the present climate, the wife would wish

[2009] FCWA 8

to remain with an employer who she has known for 10 years and whom she described
as a “very good employer”, who is “very conscious of family issues”.

34 The husband previously had three sources of income. He gave evidence in his

affidavit that he received a Centrelink disability pension ($200 per fortnight on average); a DFRDB payment ($603.70 per fortnight); and a Veterans’ Affairs Pension ($414 per fortnight). In his statement of financial circumstances he gave similar figures, and also claimed that he paid tax of $133 per week.

35 The husband gave conflicting oral evidence as to whether the payments

mentioned above were gross or net. The husband ultimately accepted that his DFRDB entitlement was $900.35 per fortnight. Although $266 tax is deducted from this payment at source, the wife established in cross-examination that the husband consistently receives a tax refund each year in excess of $5,000.

36 The husband claimed that he had ceased receiving the Centrelink disability

pension after swearing his trial affidavit. The payment in question terminated when the husband ceased to be entitled to receive a Defence Force Income Support Allowance, which is payable under the Veterans’ Entitlements Act 1986. The payment ceased with effect from 19 September 2008, when the husband stopped paying rent when he moved to a rural property (which he is “doing up” for a friend in readiness for sale early in 2009).

37 Since losing the Centrelink pension, the husband has been receiving net

payments of $1,019.11 per fortnight. (He did receive a one off payment in November 2008 which the wife queried, but documentation the husband was permitted to provide after trial established that this was reimbursement of travel costs associated with a medical appointment.)

38 The wife asserted that the husband could apply for a TPI pension, which she said

would result in him receiving a significantly greater income than he presently receives. (The increase in income was not quantified.) The husband gave evidence under cross-examination that he had twice applied for a TPI pension since the amputation of his leg and that he had been “knocked back” on both occasions. He acknowledged that he had the right to apply again but said that there was “no guarantee I will get it”.

39 The husband acknowledged in cross-examination that he had not included any

documentation concerning his application for a TPI pension in his disclosure. At the conclusion of the trial it was agreed that the husband should provide to the Court and to the wife copies of the correspondence by which his two applications for a TPI pension were rejected. Shortly after the trial, correspondence was received from the husband’s solicitors enclosing, inter alia, a copy of the decision of the Repatriation Commission concerning the husband’s application for a disability pension lodged in October 2007. The decision, which was dated December 2007, indicated that none of the husband’s medical conditions were related to his eligible service and hence his application was rejected. The correspondence accompanying the decision indicated that an application for review of the decision could be made within 12 months of receiving the decision.

[2009] FCWA 8

40 The correspondence from the husband’s solicitors enclosed a further letter sent on behalf of the husband to the Department of Veterans’ Affairs on 25 October 2008. The letter from the husband’s advocate related to “new Disability Claims” made on behalf of the husband under the Safety, Rehabilitation and Compensation Act 1988. The correspondence from the husband’s solicitors went on to indicate that the husband’s solicitor had telephoned the husband’s advocate and had been informed that no response had been received to the October 2008 application.

41 I conclude from the information provided that the husband in fact has only had

one application for a TPI pension rejected and that the husband or his advocate (from the Vietnam Logistic Support Veterans’ Association (WA) Inc) must be of the view that there is at least some prospect that the husband has an entitlement to benefits not currently being received under the Safety, Rehabilitation and Compensation Act 1988.

42 Given the state of the evidence, it is difficult to determine precisely what

benefits the husband is likely to receive in the future. The husband’s DFRDB entitlements are ongoing (and will be for life). Other entitlements of the husband will be dependent upon the outcome of the husband’s representations for additional benefits. As a minimum, the husband should continue to receive the level of income he is presently receiving (as well as an annual tax refund if tax continues to be deducted from his DFRDB benefit at the current rate). In the event the husband commences paying rent again, presumably the benefits he previously was receiving will be reinstated. (As to which see the final paragraph of Exhibit 1, which indicates that the benefit the husband lost in September 2008 will be reinstated in the event that he again becomes entitled to the Defence Force Income Support Allowance.)

43 In considering the weight to be given to the husband’s DFRDB entitlements it is

relevant to note that the husband joined the Navy in August 1970, some 13 years prior to the parties commencing cohabitation, and left the Navy in 1996, some 12 years after commencement of cohabitation. No evidence was given or submissions made about the precise extent to which these years of service impacted upon his ultimate DFRDB entitlement. (I note, for example, that in the documentary information provided by the husband after trial, reference was made to the fact that the husband’s period of eligible service for the purposes of the Veterans’ Entitlements Act 1986 did not commence until December 1972.) Nevertheless, I consider I can take judicial notice of the fact that length of service does impact upon DFRDB entitlements. The fact that some of the husband’s period of service pre-dated cohabitation is a relevant factor to take into account in the exercise of discretion.

44 The wife also suggested that the husband would have an entitlement to apply for

a Defence Services Home Loan. The husband did not consider he would be able to do so. Although I consider it possible the husband would have an eligibility for assistance under the Defence Services Home Act 1918, the benefits associated with the lower rate of interest on the very modest assistance available are not such as to make any difference to my assessment of the s 75(2) factors.

45 Neither party is cohabitating with any other person and neither of them has any

obligation to support anyone other than [J]. Neither of them has any commitments out
of the ordinary.

[2009] FCWA 8

46 The marriage was 21 years in duration. The wife claims it has had an impact on

her income earning capacity as she considers there was a possibility that had she not had children and had she remained working in the same branch of the bank, she would now be in a management position. Instead of remaining with the bank, where she had worked for 12 years before meeting the husband, the wife worked in voluntary, casual and part time positions as and when she could. It should be noted, however, that until the birth of [D], the wife was always able to obtain a transfer to a new branch of the bank when the husband received a new posting.

47 The wife readily conceded that there was no guarantee that she would have

ultimately become a bank manager. Nevertheless, the wife demonstrated by the manner in which she prepared and conducted her case that she is a woman of considerable ability. In my view it is an entirely realistic proposition to consider that were it not for marriage and children, the wife could now be in a management position, earning an income greater than she currently does. She would also no doubt have accumulated significant superannuation entitlements herself had she remained with the bank.

48 It was put to the wife that there would have been damage to her earning

capacity, even if she were not following the husband around Australia, because she’d had children. I accepted the wife’s response that the employment practices of the bank at the relevant time were such that she could reasonably have expected to return to work after having children. As it was, she took up permanent part time work when the youngest child was 4 years of age.

49 The wife currently has both of the youngest children living at home with her. It

is likely that [J] at least will be with her for a number of years. The husband, although paying more than he is obliged to pay by way of child support, is only contributing $50 per week. This means that the majority of the costs of raising [J] will be met by the wife. [M] is working and earning a modest income, albeit he is apparently not paying any board.

50 The husband is presently seeing [J] each second weekend, as well as during

school holidays. He travels to Perth and stays rent free in a friend’s home for this purpose. The husband is hoping he might see [J] more in the future, but there was no basis on which I could conclude this was likely to occur, especially given that the husband consented to orders reflecting the current contact arrangements in September 2007.

51 The husband is able to access the superannuation in his account, whereas the wife would not be able to do so with the funds in her superannuation account.

52 In my view the factors of greatest significance in this case are these:

• The wife’s obligation to house and maintain [J];

• The husband’s incapacity;

• The fact that the husband’s DFRDB entitlement guarantees him an income for life, tempered by the fact that his entitlements are

[2009] FCWA 8

in part related to service in the [defence forces] prior to

commencement of cohabitation;

• The fact that the husband has at least some prospect of increasing the level of benefits he currently receives;

• The fact that the husband has free health and dental care for life;

• The wife’s ability to work, albeit tempered by the fact that she will probably retire at around age 65, by which time her superannuation/pension entitlements are unlikely to be anywhere near as valuable as the husband’s DFRDB and other entitlements;

• The likely negative impact of the marriage on the wife’s earning capacity;

• The desirability, after such a lengthy relationship, of both parties having a decent standard of living and secure accommodation.

53 Taking all of the above matters into account and in the exercise of the very wide

discretion afforded by the legislation, I consider that an adjustment of 10% in favour of the wife would be justified. This will bring about an outcome whereby the wife receives 60% of the assets and the husband 40%.

Just and equitable

54 As the final step in the process I am required to step back and consider whether

or not the outcome based upon assessment of contributions and the adjustment on account of s 75(2) factors brings about a result that is just and equitable. In determining whether or not the outcome is, in fact, just and equitable it is important to note the impact of the s 75(2) adjustment in dollar terms rather than in purely percentage terms. The effect of the 10% adjustment in dollar terms is in the region of $70,000, but results in a disparity between the parties’ entitlements of double that amount.

55 Although I accept that both parties will be left in very modest circumstances as a result of these orders, I am satisfied that the outcome I propose is just and equitable.

Orders
56	These reasons have been completed immediately prior to the commencement of
my annual leave. Ideally, before publishing my reasons, I would have given the parties the opportunity to make submissions in relation to the documentation received after the trial and the matters on which I have indicated I am taking judicial notice. As I indicated to the parties I would prepare my reasons promptly, time does not permit this to occur.
57	I will nevertheless give the parties an opportunity to comment in relation to these
matters before I pronounce final orders. If either party wishes to make any further

[2009] FCWA 8

submissions, they should contact my Associate during my annual leave and request a Special Appointment to be arranged in the week commencing 9 February 2009. If, however, both parties are content with the proposed form of orders, I invite them to advise my Associate accordingly and I will make orders during my leave.

58 Subject to receiving any further submissions, the orders I propose are as follows:

1.	The husband and wife shall be appointed as joint trustees for sale of the property situate at and known as [the address] (“the former matrimonial home”).
2.	The former matrimonial home shall be sold at a price and on terms to be agreed by the husband and the wife. In the event of disagreement both parties shall have liberty to apply.
3.	The proceeds of sale of the former matrimonial home shall be divided in the manner following:

(a)	in payment of agent’s commission and other expenses of sale;
(b)	in discharge of the mortgage;
(c)	in adjustment of rates and taxes;
(d)	in payment of the balance to the parties in such proportions as will bring about a 60/40 division of assets in favour of the wife (such division to be calculated by reference to the list of assets, liabilities and superannuation entitlements contained in the Reasons for Judgment delivered on 9 January 2009).

4. The husband and wife shall each retain the assets currently in their possession or registered in their name and shall be responsible for liabilities incurred in their name.

5. In the event that either party intends to seek an order for costs, they shall file and serve submissions in support of that application within 14 days of the date of these orders.

6. The respondent to the application for costs shall file and serve submissions in response within 14 days of service of the applicant’s submissions.

7. The party applying for costs shall file and serve submissions in reply within seven days of service of the respondent’s submissions.

8. The application and response be otherwise dismissed.

[2009] FCWA 8

I certify that the preceding fifty eight [58] paragraphs are a true copy of the
reasons for judgment delivered by this Honourable Court
Associate