Scrymegeour and Scrymegeour

[2012] FamCA 1080

FAMILY COURT OF AUSTRALIA

SCRYMEGEOUR & SCRYMEGEOUR [2012] FamCA 1080

FAMILY LAW – PROPERTY – Contributions and adjustments – where the parties’ entitlements to the matrimonial pool of assets was assessed at 35 per cent to the husband and 65 per cent to the wife following adjustments – where the contributions of the parties are assessed as equal throughout the relationship – where the wife undertook the majority of the care of the parties’ four children – where the husband’s exclusive enjoyment of the former matrimonial home and use of joint monies for personal expenses following separation warranted an adjustment in favour of the wife of five per cent – where the husband and wife’s immense disparity in earning capacity warranted an adjustment to the wife – where the wife’s ongoing care of the parties’ children post-separation warranted an adjustment in favour of the wife – where the husband’s intermingling of joint funds to pay both personal and joint expenses made it difficult to assess the extent of his post-separation contributions – where the husband had the ongoing benefit of a secure and significant salary

FAMILY LAW – SPOUSAL MAINTENANCE – where orders were made for periodic spousal maintenance to the wife for a period of five years – where the mother’s role as homemaker had significantly diminished her earning capacity – where maintenance would allow the wife to undertake a course of study – where the maintenance would allow the wife to spend more time caring for the youngest child of the marriage

Family Law Act 1975 (Cth) ss 75, 79 and 90MT
Family Law (Superannuation) Regulations 2001
Superannuation Industry (Supervision) Act and Regulations 1994

Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Mayne and Mayne [2011] FamCAFC 192

APPLICANT: Mr Scrymegeour

RESPONDENT: Ms Scrymegeour

FILE NUMBER: SYC 6038 of 2010

DATE DELIVERED: 20 December 2012

PLACE DELIVERED: Newcastle

PLACE HEARD: Sydney and Newcastle

JUDGMENT OF: Cleary J

HEARING DATES: 25 May, 3 August 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Shoebridge

COUNSEL FOR THE RESPONDENT: Mr Batey

SOLICITOR FOR THE RESPONDENT: Stephens & Tozer

Orders

1. That within 30 days of the date hereof the husband pay to the wife the sum of $403,353.

2. That pursuant to s 90MT(4) of the Family Law Act 1975 (Cth) (“the Act”) a base amount of $710,029 be allocated to the wife out of the husband’s interest in Company S Superannuation (“the Fund”).

3. That in accordance with par 90MT(1)(a) of the Act, whenever a splittable payment becomes payable in respect of the interest of the husband in the Fund the wife is entitled to be paid the amount (if any) calculated in accordance with Pt 6 of the Family Law (Superannuation) Regulations 2001 (“the Regulations”) using a base amount, as at the operative time, an amount of $710,029 and there shall be a corresponding reduction in the entitlement of the husband and/or such other person or persons (other than the wife) to whom the splittable payment would have been made but for these orders.

4. That the operative time referred to in par 3 shall be the beginning of the fourth business day after the day on which a sealed copy of these orders is served on the Trustee of the Fund.

5. That the Trustee of the Fund, the husband and the wife, in accordance with the obligations set out under the Act, the Regulations and the Superannuation Industry (Supervision) Act and Regulations 1994, shall do all such acts and things and sign all such documents as may be necessary to calculate the entitlement of, and make payment to, the wife in accordance with par 3.

6. That save as is otherwise herein expressly provided:

   (a)Each party be solely entitled to the exclusion of the other to all other property, chattels and choses-in-action of whatsoever nature or kind in the possession of, under the control of or ensuring to the benefit of such party and for that purposes:

   (i)bank accounts are deemed to be in the possession of the person whose name appears in the bank’s records thereof;

   (ii)insurance policies are deemed to be in the possession of the beneficiary thereof;  and

   (iii)superannuation entitlements are deemed to enure for the benefit of the person who is named as the worker whose age or working future provides the conditions for payment of such entitlements.

   (b)Each party be solely responsible for and meet payment of his or her, or as the case may be, liabilities and the liabilities attaching to any asset transferred to or retained by such party hereunder and indemnify and keep indemnified the other party from any liability.

7. That each party pay his/her own legal costs of and incidental to these proceedings, preparation of these Orders and putting the settlement into effect.

8. That the husband pay to the wife for the maintenance of the wife, the sum of $366 per week for a period of five years from the date hereof.

9. That the spousal maintenance payable pursuant to par 8 hereof be adjusted annually on the anniversary of the date hereof in accordance with CPI increases for the City of Brisbane.

10. That the wife shall do all things necessary to offer the following items for sale by auction and thereafter account to the husband and pay to him 35 per cent of the net proceeds of sale, after payment of costs of sale, agent’s commission, delivery and transport fees:

    (a)       2010 motor vehicle of the wife      (Item 2);

    (b)       Type C collection                (Item 10);

    (c)       Type D collection     (Item 17).

    AND in relation to such auction or auctions, each party may attend and bid.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Scrymegeour & Scrymegeour has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC6038 of 2010

Mr Scrymegeour

Applicant

And

Ms Scrymegeour

Respondent

REASONS FOR JUDGMENT

1. This is a dispute between a husband and wife over the division of matrimonial property.  The wife seeks an order for spouse maintenance.

2. The matter was set down for a one day hearing on 25 May 2012.  A second day was required, in part due to the inadequate financial disclosure of the husband.  The proceedings were concluded on 3 August 2012.

Applications

1. On 23 September 2010 the husband filed an Initiating Application.

2. On 1 November 2010 the wife filed a Response.

3. Ultimately the orders sought by the husband were set out in the case outline document prepared on his behalf for the final hearing.[1]  The thrust of the husband’s application was:

   ·a superannuation split of $669,000 to the wife;

   ·a cash payment of approximately $100,000;  and

   ·a lump sum payment of spouse maintenance of approximately $90,000.

   [1]  Exhibit  1 - Husband’s Case Outline, pages  3-5.

4. The orders set out by the wife were contained in a Minute of order[2].  The wife sought:

   ·a superannuation split of approximately the same amount as proposed by the husband ($669,000);

   ·a cash payment of approximately $655,000;

   ·weekly spouse maintenance for a period of five years (approximately $95,000);

   ·an annual adjustment to that maintenance to account for the Consumer Price Index increases in the area in which the wife lives;

   ·each party otherwise keep personalty in their possession or control at the time of the orders.

   [2]  Exhibit 2 – Wife’s Case Outline, pages 1-2

5. The only significant areas of dispute are:

   a)The amount of the cash payment from the husband to the wife.

   b)Whether spouse maintenance should be distributed as a lump sum or periodically over five years.

Short history

1. The applicant Mr Scrymegeour (“the husband”) is aged 53 and is employed as a transport industry professional for Company S.  He lives in the Locality E region south of Newcastle at Town A.  He intends to move to live in the Brisbane area.

2. The respondent Ms Scrymegeour (“the wife”) is now 53 and is employed in a sales and business services field.  She lives in a suburb of Brisbane.

3. The parties met in 1986, married in 1987 and separated 23 years later in March 2010.  They have now been divorced.

4. The parties have four children aged 21, 19, 17 and 12 years.  The parties have made their own arrangements for the care and support of the young adult children who are dependent on them.  Only T, the youngest child is still at school.  T has lived with his mother since the separation of his parents.

Alteration of Property Interests

1. The approach to the division of property pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) is well established (see Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at [39]).

2. Accordingly, I consider the four following factors as set out below:

   (i)Identify the assets and liabilities of the parties.

   (ii)Analyse the contributions of the parties during the relationship up to the date of the hearing

   (iii)Consider the application of the factors in s 75(2) of the Act by way of adjustment.

   (iv)Consider whether the overall outcome is just and equitable in those circumstances.

(i)  What are the assets and liabilities of the parties?

1. A joint balance sheet was tendered[3].  There were several disagreements between the parties as to some valuations and inclusions.  The balance sheet is set out below, followed by Notes to the Asset Pool.

   [3]  Exhibit ‘HW1’

Assets:
No	O’ship	Description		Husb’s value	Wife’s value
1	J	Net sale proceeds of [I Street, Town A]		60,476	60,476
2	W	2010 Motor vehicle		29,000	19,250
3	H	2005 Model Mitsubishi		Nil	Nil
4	H	Boat		230,000	230,000
5	H	[Type F boat]		Nil	Nil
6	H	Furniture and contents		3,000	3,000
7	W	Furniture and contents		10,000	5,000
8	H	Westpac account No. …25		132,595	132,595
9	H	[Company S] Credit Union account		43	43
10	H	Morgan Stanley account no. …75		402	402
11.	H	Morgan Stanley options		5,360	5,360
12.	H	ETRADE account no. …69		8,430	8,430
13	W	CBA  account No. …97		6,762	6,762
14	W	CBA  account no. …18		5,597	5,597
15	W	CBA  account no. …19		77,232	Nil
A	W	CBA  account no. …15		31,243	31,243
16	H	[Type C] collection		To be sold	To be sold
17	W	[Type D] collection		15,000	3,0000
18	W	Jewellery		12,300	12,300
19	W	Sale proceeds of OZ Minerals		2,887	2,887
20	W	Westpac account no. …83		90	90
B	H	Mercedes Benz motor vehicle		Nil	Nil
C	H	Ford Utility motor vehicle		Nil	Nil
Total		$630,417	$553,435
Add backs:
21	H	Legal fees paid to date		4,000	4,000
22	W	Legal fees paid to date (estimate)		8,075	8,075
23	H	Reduction in funds and other assets husband has had control of post separation and for which no reasonable explanation has been given		Nil	NK
24	W	Balance of joint funds unaccounted for by wife		34,000	Nil
D	H	Difference between cost price and value of boat		Nil	25,000
Total		$  46,075	$  37,075
Gross Assets		$ 676,492	$590,510
Liabilities:
25	Joint		Westpac home loan	Nil	Nil
26	Joint		3% selling costs of [Town A]	Nil	Nil
27	Joint		Mastercard at separation	30,000	Nil
Total	$   30,000	$          0
Net assets	$ 646,492	$ 590,510
Superannuation:
25	H		[Company S] Superannuation	1,420,058	NK
26	W		Westpac Superannuation	26,700	23,849
Total	$1,446,758	$     23,849
Grand total	$2,093,250,	$    614,359

Notes to the asset pool

1. The parties could not agree on the value for the following assets:

Item 2	2010 Motor Vehicle	29,000	19,250
Item 7	Furniture and contents	10,000	5,000
Item 16	Type C collection	NK	10,000
Item 17	Type D collection	15,000	3,000
Item 15	CBA account number …19	77,232	Nil

1. Item 7 together with Item 6 which was agreed have been removed from consideration by consent.

2. In respect of Items 2, 16 and 17, orders have been made for sale of those items by the wife and requiring the wife upon sale to account for the net proceeds so that the husband receives 35 per cent of the balance of the proceeds.

3. Item 15 was part of an argument in relation to add backs and double counts.

4. In relation to Item 24 the wife asserted that the monies expended were those reasonably required for her to resettle following the break down of the marriage and to continue the primary care of the children. In any event even during final submissions the husband and wife could not reach a satisfactory agreement as to the exact quantum spent and no evidence was produced to support any specific amount as contained in Items 15 and 24.

5. On this basis, I find that the most appropriate way to deal with this amount is as a contribution factor ( see Mayne and Mayne [2011] FamCAFC 192 at [83])

6. I find that the asset pool is as follows:

1	Net sale proceeds	60,476
4(D)	Boat plus add back of $25,000	255,000
8	Westpac account number …25	132,595
9	Company S CU account	43
10	Morgan Stanley …75	402
11	Morgan Stanley Options	5,360
12	Etrade account	8,430
13	Wife Commonwealth Bank accounts	6,762
14	Wife Commonwealth Bank account	5,597
A	Commonwealth Bank account number …15	31,243
18	Jewellery of wife	12,300
19	Sale proceeds of OZ Minerals	2,887
20	Westpac account	90
21	Husband paid legal fees	4,000
22	Wife paid legal fees	8,075
Gross assets	$533,260
Less liabilities Total net assets	30,000     $503,260
Superannuation:
25	Company S superannuation	1,420,058
26	Wife’s Westpac superannuation	26,700
Total Superannuation	$1,446,758
Grand Total of Assets	$1,950,018

(ii)  Contributions of each of the parties

Parties’ assets at date of marriage – March 1987

1. The parties had some assets when they married.

2. The husband says he had $18,000 in cash and that the wife had $6,000 comprising cash and a motor vehicle. 

3. The wife says she had $10,000 in cash, a motor vehicle with an estimated value of $7,000 and a half share in a business services agency worth $37,000. Following the parties’ marriage the wife sold her share in the agency and received a net amount of $15,000 after the repayment of a loan to her parents.

4. At the highest the wife’s case is that she had $32,000 and the husband $10,000.    On either version after 25 years, it would be artificial to regard a slightly greater initial contribution as making a significant difference to the parties overall contributions.

Contributions during the marriage - 1987 to 2010

1. The husband was in fulltime paid employment throughout the marriage.  He attained a senior position at Company S in 1992.

2. In the early years of the marriage, the wife was in paid employment and then self employment.  She managed a successful business services agency which was sold for $100,000 in 1992.  From the birth of their second child B in 1993 until 2007, the wife was engaged in the fulltime care of the four children.  She also had limited paid employment between 2001 and 2007.

3. The parties agree that throughout the marriage the wife provided the majority of care for the children.  The husband was often at home for periods of time with the family but was also regularly away for significant blocks of time.

4. In 2002 the husband began trading in options.  The wife agreed to the husband trading in her name as there was a taxation benefit to both parties in this approach.  Following separation the wife liquidated and retained those options, with a net worth of $107,000 at separation.  She also retained $22,000 in saved income from her part-time employment.

5. The parties are both hard working resourceful people, who both worked and raised their children.  The contributions during the marriage to the date of separation are equal.  This was properly conceded by both parties at the outset of the hearing.

Period from separation to date of hearing – March 2010 to May 2012

1. The husband lived in the matrimonial home.  At different times one or more of the children lived with him.

2. The wife has lived in Brisbane in a townhouse owned by her parents.  At different times one or more of the children have lived with her.  Presently one daughter is attending university and their youngest child T lives with her.

3. The husband met the mortgage and outgoings. The source of funds for these payments is unclear.  It was a combination of joint funds and income. The husband intermingled income with assets.

4. The lack of clarity about this issue arose from the failure of the husband to attend to the preparation of taxation returns for 2009, 2010 and 2011 and an overall failure to make adequate financial disclosure prior to hearing. The matter became part heard for that reason.

5. The husband paid the joint obligation of the parties in respect of the matrimonial home on behalf of the parties.  He has had the benefit of living in it.  He had exclusive use of the proceeds of sale of jointly owned Property G.  The husband has used joint funds for both joint expenses and personal expenses.

6. The wife has consistently had the care of the youngest child.  There should be an adjustment of five per cent in favour of the wife for the period since separation to balance her need to find accommodation, her lack of access to joint funds, and to recognise her support and supervision of the parties’ youngest child.

7. Accordingly at date of hearing I find the contributions to favour the wife in the ratio 55 per cent to 45 per cent.

(iii)  Should there be an adjustment for s75(2) factors

1. The parties are both aged 53. 

2. The husband has some health problems.  He suffers from haemochromatosis, which requires him to submit three monthly blood tests to his employer’s supervising organisation and a specialist medical report once a year.  This has not affected his capacity to work.  He suffers from bilateral hearing loss which does not affect his employment provided other testing (speech test) is satisfactory.

3. The wife takes medication to reduce high blood pressure levels. This condition does not presently affect her employment.

Superannuation

1. The husband has about $1,400,000 in superannuation.  However, the husband will continue to contribute to his fund until retirement and will have the benefit accordingly.

2. The wife has modest superannuation of about $27,000.

Disparity in income

1. The husband is continuing in fulltime employment at the rate of $300,000 plus, per annum. He pays child support for T at the rate of $13,000 per annum.

   The gross income of the husband for the last three financial years is as follows:

   (a)      2009              $281,239

   (b)      2010              $278,899

   (c)      2011              $323,619.

   Even after payment of Child Support he will probably maintain a future income of about $300,000 per annum

1. The wife is in permanent fulltime employment for 40 hours per week.  She recently received a pay rise and earns $41,160 net.  She also receives $250 per week in child support for T.  This gives her a total net income of $54,211.

2. There is an enormous disparity in income between the parties. The wife has the responsibility for the care of the parties’ youngest child who is now 12.  He has five more years at high school and may proceed to university.

3. In my view these two factors call for an adjustment in favour of the wife of 10 per cent.  This adjustment would have been greater, but for the order I propose to make for spouse maintenance for a period of five years. This financial support will enable the wife to be a little more available to T in the way she wishes and also to retrain in an occupation in which she is confident of finding employment which will improve her position.

4. The ultimate division is therefore 65/35 of the total net asset pool.  This amounts to a split of the net asset pool of $1,267,512 to the wife and $682,506 to the husband.

(iv)  Is the outcome just and equitable?

1. The husband will have few or no tangible assets.  His income will enable him to rent or borrow for adequate accommodation for himself and T when he stays.

2. The wife will have a lump sum.  She will probably need to borrow further funds to reaccommodate herself and T.

3. Both parties will receive the proceeds of sale of the motor vehicle, Type C collection and Type D collection in proportionate shares.

4. Both parties will have adequate superannuation in retirement.

5. I am satisfied that the outcome is just and equitable on that basis.

6. The parties will receive and retain the following assets:

Husband shall retain:
8	Westpac account no. …25	132,595
4(D)	Boat (and add back of $25,000)	255,000
9	Company S Credit Union account	43
10	Morgan Stanley account number …75	402
11	Morgan Stanley Options	5,360
12	ETRADE account number …69	8,430
21	Legal fees	4,000
25	Split of Superannuation Total	710,029       1,115,859
Less Mastercard debt Sub total Cash payment to wife Total retained by husband	30,000 1,085,859     403,353 $  682,506
Wife shall retain:
1	Net sale proceeds of I Street, Town A	60,476
13	CBA  account no. …97	6,762
14	CBA  account no. …18	5,597
A	CBA  account no. …15	31,243
18	Jewellery	12,300
19	Sale proceeds of OZ Minerals	2,887
20 22	Westpac account No …83 Legal fees paid to date	90          8075
26	Westpac Superannuation	26,700
21	Super split – Company S Superannuation	710,029
Total	864,159
Plus cash payment from husband TOTAL retained by wife	403,353 $1,267,512

Spouse maintenance

1. The wife seeks spouse maintenance to enable her to complete a course of education in the property industry with a qualification which will enable her to practice in that industry.

2. The husband concedes the wife’s need and his capacity to pay spouse maintenance.  He proposed the sum of $90,000 to cover the period to

   
   

   29 September 2014, when the wife turns 55 years.  This proposal was in conjunction with a proposed payment of $98,000 by way of property settlement, and was not a distinct proposal for spouse maintenance.

3. It is reasonable for the wife to require financial assistance to retrain due to her extended absence from the paid workforce and from self employment.

4. There is an order for spouse maintenance of $366 per week for a period of five years.

5. The period of five years will cover the balance of T’s high school education and will assist with the wife’s expenses over the course of her study.

Conclusion

1. This was a long marriage and contributions were equal until separation. 

2. Thereafter the husband continued the financial pattern established during the marriage of managing the parties’ financial affairs without reference to the wife.  Since separation he has inter-mingled the proceeds of sale of the matrimonial home with his income.  He failed to provide clear evidence of how joint funds were dispersed, claiming individual credit for meeting joint expenses from joint funds.

3. The husband had a cavalier attitude to financial disclosure which prolonged the hearing.

4. Both parties will have superannuation benefits when they retire in seven to 12 years time.  The husband will accumulate significantly more additional superannuation during that period. 

5. The wife will be supported for a period of retraining and then will have the obligation to be self-supporting until retirement.  She will have rent or loan payments to make for accommodation.  Her income will never be comparable to the husband’s.  She has the obligation, willingly undertaken, to tailor her working hours to T’s needs.

6. I make the orders accordingly.

I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cleary delivered on 20 December 2012

Associate: 

Date:  20 December 2012