Sadler and Sadler

[2009] FamCA 447

FAMILY COURT OF AUSTRALIA

SADLER & SADLER [2009] FamCA 447

FAMILY LAW – PROPERTY – Settlement in relation to marriage

Family Law Act 1975 (Cth) ss 75(2), 79, 90MT(4), 90MT(1)(a)

Lee Steere and Lee Steere (1985) FLC 91-626
Ferraro and Ferraro (1993) FLC 92-335
Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355
Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414
Clauson and Clauson (1995) FLC 92-595; 18 Fam LR 693

APPLICANT: Mr Sadler

RESPONDENT: Ms Sadler

FILE NUMBER: NCF 848 of 2005

DATE DELIVERED: 27 May 2009

PLACE DELIVERED: Sydney

PLACE HEARD: Newcastle

JUDGMENT OF: Johnston JR

HEARING DATE: 11 December 2008 and
20 March 2009

REPRESENTATION

FOR THE APPLICANT: In person

FOR THE RESPONDENT: In person

Orders

1. That within 14 days of being requested to do so the husband do all things and sign all documents necessary to transfer to the wife his interest in the following:

   (a)Monies in the joint account of the parties in the Heritage Building Society.

   (b)The Toyota Surf motor vehicle registration number … and

   (c)The 18 foot boat, motor and trailer.

2. That within 14 days of being requested to do so the wife do all things and sign all documents necessary to transfer to the husband her interest in the 1994 Toyota Spacia motor vehicle registration number ….

3. That within 14 days the wife deliver the following items of property to a place and at a time reasonably nominated by the husband to her in writing:

   (a)       All personal paperwork

   (b)       School certificates and reports

   (c)       Trade certificates and indentures

   (d)       Fork lift licence (class 5 crane driver)

   (e)       Personal references

   (f)All photos and memorabilia relating to the husband’s employment and personal life

   (g)One half of all photos relating to the children

   (h)The octagonal Tasmanian blackwood occasional table the subject of a current order

4. That within 14 days the husband deliver the following items of property to a place and at a time reasonably nominated by the wife to him in writing:

   (a)       Video camera, discs, tapes, accessories and cabling

   (b)       All keys for the Toyota Surf motor vehicle

   (c)The wife’s original birth certificate and the wife’s divorce decree in relation to her former marriage

5. That upon the wife presenting to the husband evidence that she has completed the appropriate application, the husband shall do all things and sign all documents necessary to facilitate provision to the wife of the Australian Defence Force uplift and removal entitlements for herself and the children.

6. That the base amount of $76 753 is allocated, as required by section 90MT(4) of the Family Law Act 1975 to the wife out of the husband’s interest in the Military Superannuation and Benefits Scheme (“the Scheme”).

7. That pursuant to section 90MT(1)(a) of the Family Law Act 1975 whenever the Trustees for the Scheme make a splittable payment from the interest held by the husband in the Scheme, the Trustee shall pay to the wife or her administrators, executors, beneficiaries, heirs or assigns an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001, using the base amount referred to in the above order and there shall be a corresponding reduction in the entitlement the husband would have had in the Scheme but for these orders.

8. The operative time for the above order is twenty-eight business days after the day on which a sealed copy of these orders is served on the Trustees.

9. That these superannuation splitting orders bind the Trustees.

10. That pursuant to s 79 of the Act each party is declared the sole owner respectively of all other property and superannuation in their possession and/or control.

11. That all exhibits be released.

12. That in the event that either party should fail to sign any document necessary for the implementation of these orders, the Registrars of this Court are appointed pursuant to s 106A of the Act to sign such document in the name of the defaulting party and to do all things to give validity to such document.

13. That all other applications by the parties are dismissed.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: NCF 848 of 2005

MR SADLER

Applicant

And

MS SADLER

Respondent

REASONS FOR JUDGMENT

Introduction and Applications

1. These are contested property proceedings.

2. The applicant is Mr Sadler and for convenience I shall refer to Mr Sadler as “the husband”.  The respondent is Ms Sadler.  For convenience I shall refer to Ms Sadler as “the wife”.

3. The proceedings came before me in circumstances where they had previously been listed before Ryan J to be heard in the course of her Honour’s consideration and determination of the substantive parenting proceedings.  But the wife had not filed a response to the husband’s property application nor any evidence.  Ryan J decided to give the wife a further chance to defend the husband’s property application.

4. To the wife’s credit she has filed a Response, an affidavit and a financial statement.  At least I am clear about the orders she is seeking. Her affidavit is quite empty of relevant material but no doubt this is not surprising in circumstances where the wife has been unable to obtain legal advice.  Each of the parties is self-represented.  There is a dearth of relevant material in their affidavits in proper form including historical material.

5. The husband seeks orders to the following effect:

   1.That the wife transfer to him her interest in all monies standing to the credit of the parties in their joint account with the Heritage Building Society.

   2.That the wife make available to the husband certain specified items of personal property.

   3.That a writ issue to empower the Marshal or the Sheriff to search for and seize a Blackwood occasional table in the control of the wife and deliver this to the husband.

   4.That the wife indemnify the husband in respect of any liabilities of the wife since separation.

   5.That the wife do all things and sign all documents necessary to transfer to the husband her interest in the 1994 Toyota Spacia motor vehicle registration number ….

   6.That the husband do all things and sign all documents necessary to transfer to the wife his interest in the 1994 Toyota Surf motor vehicle registration number … and in the boat, motor and trailer.

   7.That each party be declared the sole owner of all other property and superannuation in their possession and/or control respectively and

   8.That certain restraining orders and formal orders be made.

6. On the other hand the wife seeks orders to the following effect:

   1.That the husband transfer to her his interest in the money in their joint account with Heritage Building Society.

   2.That the husband do all things and sign all documents necessary to effect the “[Australian Defence Force] uplift and removal entitlements” due to the wife and children upon their relocation.

   3.That the husband make available to the wife certain specified items of personal property.

   4.That the husband pay the wife’s HECS debts and fees.

   5.That the husband pay maintenance and registration costs in respect of the Toyota Surf motor vehicle.

   6.That each party be declared the sole owner of all other property in their possession and/or control respectively and

   7.That there be an order splitting the husband’s interest in his superannuation 80 percent in favour of the wife.

Background

1. The wife was born in May 1967 and she is therefore 42 years of age.  The husband was born in September 1969 and he is therefore 39 years of age. 

2. The parties’ relationship commenced in 1993.  They commenced cohabitation upon their marriage in January 1995.  The parties separated on 30 July 2005 and divorced on 29 May 2007.

3. There are two children of the marriage, a daughter born in May 1996 who is 12 years of age and a daughter born in March 2001 who is 7 years of age.

4. The wife has three children by previous relationships.  These are a son born in January 1993, a daughter and another son whose details are unclear to the Court.  The children of the marriage live primarily with their father pursuant to orders of this Court dated 13 August 2008 and spend time respectively with their mother.  Until approximately June 2006 the children had lived with their mother.  The wife’s son also lives with the husband.

5. The husband is a long-serving member of the Australian Defence Force.  He is a technician.  In the early part of their marriage the husband and wife lived in Queensland where the husband was based by virtue of his military service requirements.  More recently they lived in New South Wales.

6. The wife has not worked in paid employment since before the birth of the elder child, the parties having arranged their circumstances so that the husband was the breadwinner and the wife would attend to the needs of the children and the household as her major focus and contribution.

7. The parties’ property is modest.  They do not own any real estate and this is probably a consequence of living in accommodation provided by the Australian Defence Force.

The Applicable Law

1. Sub-section 79(1) of the Act provides that in property settlement proceedings, the Court may make such order as it considers appropriate.

2. Sub-section 79(2) provides that the Court shall not make an order under the above sub-section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

3. There is a long-standing preferred approach to the determination of an application brought pursuant to the provisions of s 79.  This involves four inter-related steps.  Firstly, the Court should make findings about the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing.  Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties.  Thirdly, the Court should identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g), including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two.  Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case. 

4. This approach has been confirmed in numerous cases in this Court including for example Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Hickey and Hickey (2003) FLC 93-143; 30 Fam LR 355; Coghlan and Coghlan (2005) FLC 93-220; 32 Fam LR 414 and Clauson and Clauson (1995) FLC 92-595; 18 Fam LR 693.

Non-military superannuation assets available for division

1. Detailed evidence about the property of the parties was somewhat scarce.  In particular, there were serious shortcomings in terms of evidence in admissible form about the values of items of property.  Doing the best that I can in difficult circumstances the property and superannuation available for division between the parties is as follows:

Assets	$
1.        Husband’s Defcredit account	500
2.        Husband’s AMP shares	1,000
3.        Husband’s 1994 Toyota Spacia motor vehicle (add back)	4,900
4.        Husband’s AMP superannuation	13,262
5.        Wife’s 1994 Toyota Surf motor vehicle	6,000
6.        Wife’s 18 foot boat, motor and trailer	5,000
7.        Joint account with Heritage Building Society	280
__________
$30,942
Liabilities
1.         Husband’s Defcredit	5,000
2.         Husband’s Personal loan	21,899
3.         Wife’s HECS	5,576
4.         Wife’s Centrelink debt	2,179
________
34,654
Deficiency	$-3,712

Contributions in relation to the above assets

1. Even though there is a deficiency of assets compared with liabilities I shall make some brief observations about the parties’ contributions.  There is little evidence by the parties about their contributions over the course of their marriage.  But it is clear that the husband has had continuity of employment in the Australian Defence Force and he has made almost the entirety of the financial contributions.

2. On the other hand the wife has concentrated her energies on caring for the children and the husband.  She has made the major contribution in this regard and also in the area of the domestic work.  This is the way the parties arranged their responsibilities.

3. After separation the children lived with the wife for most of the time and the change of their residence to that of the husband has occurred since this Court made orders to this effect in August 2008.

4. The picture which emerges about the parties’ contributions overall, especially in the absence of detailed evidence about their respective contributions is one of equality.

Husband’s military superannuation

1. I propose to consider the husband’s interest in the Military Superannuation and Benefits Scheme separately from the above assets.  I note in the case of Coghlan and Coghlan (above) the majority of the Full Court of this Court said as follows at page 79,646:

   … we consider that the preferred approach to the determination of property settlement cases must be to prepare in addition to the list of items of property (which would clearly fall within the definition of that term in s 4(1)), a separate list containing any superannuation interest or interests …

2. The Full Court then set out the approach which should be taken in relation to superannuation interests.

3. The husband’s membership of the Military Superannuation and Benefits Scheme, commenced on 3 May 1994 and he has contributed to the Scheme since then.  His superannuation interest is in the growth phase.

4. At the hearing on 11 December 2008 the husband tendered his Contributing Member Statement as at 30 June 2008.  This stated that his interest in the fund at that time consisted of his member benefit of $49 466.91 and his total employer benefit of $165 504.68.  This was a total of $214 971.59.

5. My subsequent consideration of this case took place at a time when there were many media reports to the effect that superannuation funds generally had lost substantial value as a consequence of the global financial crisis.  In these circumstances my Associate informed both parties that I proposed to re-list the proceedings on 20 March 2009 for further submissions in relation to the matter of the husband’s superannuation interest.  The husband attended on that occasion and the wife did not, informing the Court that she was too ill to attend.

6. Recently the husband forwarded to the Court a further affidavit to which he annexed a statement from the Scheme setting out details of his interest in the fund as at 20 March 2009.  This indicates that the value of his member benefit has dropped to $47 808.26, as I suspected it would have.  But the employer benefit has increased to $181 179.58.  This is a total of $228 987.84.

7. Having considered this new material, I have decided to use the values as at 30 June 2008, namely $214 971.  This is partly because I asked the husband to provide the March 2009 values out of my concern that if his interest in the fund had dropped below the 30 June 2008 values, in my view, to have used the earlier values would have been unfair.  But, as indicated above, his overall interest in the fund increased by March 2009 rather than diminished as I had feared it might.  The other reason I prefer to use the earlier values is that the parties separated now as long ago as July 2005 but of course the husband has continued to make financial contributions to the fund.

Contributions in relation to the military superannuation

1. As indicated above

   -    the parties commenced cohabiting when they married in January 1995;

   -    the husband had commenced contributing to the Military Superannuation and Benefits Scheme eight months earlier on 3 May 1994;

   -    the parties separated on 30 July 2005.

2. In Coghlan the Full Court also said at page 79,646 that in the context of considering the contributions by the parties and the relevant s 75(2) matters that it may well be relevant to consider the relationship between years of fund membership and cohabitation, contributions made by the member at the commencement of the cohabitation, at separation and at the date of hearing and certain other matters.

3. Clearly the husband has made direct financial contributions to the fund since separation.  In addition, as I have said, he made the contributions from the time of commencing in the fund until marriage.  These are contributions made solely by the husband.

4. On the other hand, the wife has made contributions as homemaker and parent and these are to be recognised in a full sense and such contributions are in no way to be regarded as of lesser importance than all the other contributions by the husband.

5. In my view, it is clear that the husband has made a higher level of contributions in the area of his military superannuation than the wife.  But the wife’s contributions to this have also been significant.  In my view, the appropriate assessment of contributions to the military superannuation is 55 percent by the husband and 45 percent by the wife.

6. On this basis the husband would enjoy $118 235 of the total amount of $214 971.59 and the wife would enjoy $96 737 thereof.

7. I also note that on the March 2009 values that the husband would, at least on paper, have a more substantial interest in his superannuation because of the higher value of the employer benefit.

s 75(2) matters

1. The husband is 39 years of age and in good health.  As indicated above, he is a technician in the Australian Defence Force.  His income is $1101 per week and in addition he receives the Family Assistance Benefit in the amount of $229 per week.

2. As indicated above, the husband contributes to compulsory superannuation and his employer also contributes to superannuation for him.

3. On the other hand the wife is 42 years of age and she is in receipt of the disability pension.  I understand that there was expert opinion before the Court in the parenting proceedings to the effect that the wife has a borderline personality disorder.  She has been undertaking a course of study at Newcastle University.  Her income from the pension is $213 per week.  She rents accommodation from the New South Wales Housing Authority.  She lives extremely modestly.

4. As indicated above, pursuant to the orders of this Court made on 13 August 2008 the three children including the wife’s son from a previous relationship live with the husband.  They spend time with their mother each alternate Saturday from 9:30 am to 4:30 pm and certain other periods.

5. The wife pays $19 per week child support and the husband receives $62 per week child support from the wife’s son’s father.

6. The most significant s 75(2) matters are firstly, the difference between the income-earning capacities of the parties and secondly the situation that on all present indications the husband will be likely to have to bear most of the expense of providing for the children including their educational costs for many years as well as having to provide the major care for them.  This is particularly the case in relation to the girls given their ages.  In any event, at the present time, included in the children’s costs are before and after school care costs which amount to approximately $440 per month.

7. As against this, the wife’s future in terms of her income earning capacity is unclear.  It is to be hoped that once she has obtained her degree she will be able to find appropriate employment.  What this might involve and the level of her remuneration are unclear at this time.  But on all indications to this point, in my view the husband is well ahead of the wife in this area and he is likely to continue to be so.

1. In addition, I have considered the military superannuation on the basis of the lower values.  I note that on the current values the husband should enjoy a higher level of superannuation based on the higher employer benefit.

2. In taking careful account of these matters, in my view, the pendulum swings in favour of a modest set-off of assets in favour of the husband.

3. In my view the appropriate set-off is 7 percent.

Conclusion and fourth step

1. The husband is to have 62 percent of the assets.  The surplus assets come to a value of $211 259 ($214 971 - $3712 = $211 259).  Sixty-two percent of this is $130 981.

2. The husband has the following assets (excluding Military Superannuation):

$
1.       Defcredit account	500
2.       AMP shares	1,000
3.       1994 Toyota Spacia motor vehicle (add back)	4,900
4.       AMP superannuation	13,262
___________
$19,662

1. But the husband also has the following liabilities:

$
1.        Defcredit	5,000
2.        Personal loan	21,899
_________
$26,899

1. Accordingly, the husband has a deficiency of assets compared with liabilities of $7237 ($19 662 - $26 899 = $-7237).

2. In order to have 62 percent of the available assets which, as indicated above is $130 981, the husband would have to be able to enjoy $138 218 of the Military Superannuation ($130 981 + $7237 = $138 218).

3. On the other hand, the wife has the following assets:

$
1.       1994 Toyota Surf motor vehicle	6,000
2.       18 foot boat, motor and trailer	5,000
3.       Say, joint account with Heritage Building Society	280
__________
$11,280

1. But the wife also has the following liabilities:

$
1.        HECS debt	5,576
2.        Centrelink debt	2,179
________
$7,755

1. Accordingly, the wife has surplus assets compared with liabilities of $3525.  To achieve 38 percent of the available assets, which are assets with a value of $80 278, the wife requires further assets with a value of $76 753 ($80 278 - $3525 = $76 753). This can be provided by splitting the husband’s superannuation to provide the wife with a superannuation interest in this amount.

2. It might be possible, upon the wife making an application to the trustees of the military superannuation fund, for this interest to be released to the wife on the ground of hardship.

3. The orders I propose will not affect the income earning capacity of either party.

I certify that the preceding fifty-six (56) paragraphs are a true copy of the Reasons for Judgment of Judicial Registrar W P Johnston.

Associate:     

Date:              27 May 2009