SIMS & SIMS
[2020] FamCA 866
•23 October 2020
FAMILY COURT OF AUSTRALIA
| SIMS & SIMS | [2020] FamCA 866 |
| FAMILY LAW – PROPERTY – relationship of around 26 years – where the parties have been separated for at least 13 years – where the proceedings have been stalled by the failure to finalise contested Supreme Court Estate proceedings – where until separation financial and non-financial contributions were equal – where no significant adjustment made in favour of either party is justified to the contribution based entitlements – where the husband contends that it is not just and equitable to make any adjustment to the current legal and equitable interests – where the husband will likely be in a superior asset position arising essentially from his inheritance – property adjustment order made for the husband to make a payment to the wife achieves justice and equity. |
| Family Law Act 1975 (Cth), ss 75, 79 |
| Stanford & Stanford [2012] HCA 52 C & C [1998] FamCA 143 Hunter & Borman & Anor [2020] FamCAFC 250 Hickey & Hickey (2003) FLC 93-143 Hobson & Hobson [2020] FamCAFC 251 |
| APPLICANT: | Ms Sims |
| RESPONDENT: | Mr Sims |
| FILE NUMBER: | BRC | 5309 | of | 2008 |
| DATE DELIVERED: | 23 October 2020 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Baumann J |
| HEARING DATE: | 21 September 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms V Martinovic |
| SOLICITOR FOR THE APPLICANT: | Keyworth Harris & Lowe Family Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr R Cameron |
| SOLICITOR FOR THE RESPONDENT: | Maguire Barnes Family |
Orders
That the husband shall pay to the wife the sum of $165,000 as follows:
(a) $65,000 on or before 23 November 2020; and
(b) $100,000 on or before 23 October 2022, subject to Order 2.
That:
(a)the husband shall pay the said sum of $100,000 by 23 October 2022 or within 30 days of Lot … on SP … being transferred to the husband, whichever is the earlier; and
(b)if the said payment of $100,000 is not paid by 23 October 2021, then the said sum shall accrue interest at the rate of 5% per annum from 23 October 2021 to the date of actual payment.
That the husband shall provide to the wife a report in writing as to the state of finalisation of the Estate of Mr B Sims (so far as it relates to his securing his inheritance), as events unfold, but no less than over six months until payment of the second instalment of $100,000 is made by the husband to the wife.
That save as necessary to comply with Orders 1 to 3 hereof:
(a)each party be solely entitled to the exclusion of the other to all other property (including motor vehicles, furniture, household contents, jewellery and personal possessions) in the possession of such party as at the date of these Orders; and
(b)each party hereby foregoes any claim they may have to any superannuation benefits or insurance benefits belonging to or earned by the other party; and
(c)each party be solely liable for and indemnify the other against any liability, including personal loans or credit card debts which they may have in their names as at the date of these Orders.
That each party shall sign all documents and do all things necessary to give effect to these Orders but if either party refuses or neglects to comply with any provision of this Order (within fourteen (14) days of a written request to do so) then:
(a)the Registrar of the Family Court of Australia at Brisbane is hereby appointed pursuant to the provisions of s 106A of the Family Law Act 1975 to execute such documents on behalf of such party and to do all things and acts necessary to give effect to these Orders;
(b)the execution of such documentation by the Registrar shall have the same force and validity as if such documentation has been executed by the defaulting party; and
(c)an affidavit by a solicitor acting for the non-defaulting party shall be sufficient proof of the other party’s default.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Sims & Sims has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 5309 of 2008
| Ms Sims |
Applicant
And
| Mr Sims |
Respondent
REASONS FOR JUDGMENT
Introduction
Although the Applicant wife Ms Sims commenced property settlement proceedings against her husband Mr Sims way back in 2009, it seems the proceedings have been stalled by the failure to finalise contested actions in the Supreme Court of Queensland relating to the Estate of the husband’s father which had began in 1992.
After these proceedings were transferred from the Federal Magistrates Court (as it then was) to this Court in 2010, it has received sporadic judicial intervention – I am satisfied primarily because the parties were hopeful that when the Estate issues resolved (or crystallised) these parties would be able to mediate a solution.
I must admit that when the matter first came to my attention formally in March 2020, I was extremely concerned that the parties (who are not in the flush of youth) may be waiting many years before the Estate issues, not initially clearly identified before me, finished. It was not acceptable for this Court to simply wait for those other inter family disputes to finish. Ultimately, the parties agreed to proceed to trial; an attempt at mediation took place; valuation evidence to some extent was gathered and a trial set.
The cross-examination of the parties (the only witnesses) was conducted by experienced Counsel Mr Cameron for the husband and Ms M Simsartinovic for the wife – consuming a total of less than two hours, and with oral submissions concluded on the same day judgment was reserved on 21 September 2020.
Whilst the reasons which follow express some of the challenges created by the evidence to achieve just and equitable orders and some finality (as s 81 prescribes), I am satisfied that the orders pronounced which appear at the commencement of these Reasons do achieve justice and equity for both parties.
Contextual history
The statements of fact which now follow should be construed as findings of fact. I should record that neither Counsel contended for any credit findings, and none are necessary. Both parties are thoroughly decent citizens who worked hard together, sometimes in trying conditions, during an intact relationship of around 26 years that proudly bore five (now adult) children and where the parties have been separated since at least 2007.
The salient and generally uncontroversial facts are:
a)the husband is 66 years of age and the wife is 59 years of age and were married in 1981;
b)at the time of marriage the husband worked on a farm with his father and other family members and had done so since he was a child;
c)importantly, the farm had been inherited by the husband’s father many years earlier and although separate defined allotments (some inherited and some purchased) constituted the farm, all allotments were legally owned by the husband’s father Mr B Sims (“the deceased”);
d)notwithstanding the legal ownership resting with the deceased, prior to the parties’ marriage, and I infer with the consent of his father, the husband and wife began construction of a single level dwelling on part of the farm. The house property is described as situated at F Street C Town. The construction was completed in 1982. The husband says it cost $50,000 to build;
e)the home is situated on Lot … Survey Plan …, comprising 36.96 hectares. Although the husband says this property (and I assume the house constructed on it as constructed by the parties) was valued for Estate purposes at $750,000 in approximately 2016, no evidence from an expert valuer making that assessment at that time, has been produced to this Court. Exhibit 2 is a valuation report dated 26 May 2020 (and subsequent letter dated 2 September 2020), which opines that the current value with a breakdown between the land and improvements as:
Land value $450,000
Improvements $100,000
$550,000
This expert was not required for cross-examination and neither party sought to challenge the estimate or breakup of the “notional” value.
f)the parties were blessed with five children Mr R (born in 1984); Ms S (born in 1986); Mr T (born in 1988); Mr V (born in 1990) and Mr P (born in 1992). The husband fairly conceded that the wife was the primary carer and homemaker and whilst there was a period between approximately 1984 and 1989 when the husband was not working on the farm, after the death of Mr B Sims in 1989, the husband returned to the farm to work;
g)the terms of the Will of the deceased and the dispute about the Estate which began in August 1992 and have, in one form or another, continued (and remain unresolved) at the time of the trial before me some 28 years later are dealt with in more detail discretely later in these Reasons;
h)in mid-1994, even though the youngest child Mr P was only two years of age and after 10 years as a full-time mother to the five children, the wife commenced a course and after completion of the course, she was successful in obtaining part-time casual employment with N Organisation in April 1995 which became permanent after a few months. The wife has continued as a permanent employee of N Organisation now for over 25 years and is described as a professional, on a gross weekly wage of $1,979 (approximately $103,000 per annum);
i)although the husband does not provide a reason for ceasing working on the farm in November 1996 (although the wife does at paragraph 17 of her Affidavit filed 20 April 2020), cease he did and in 1997, and he commenced employment with the D Department (now F Department) where he is still employed as a “public servant” on a gross weekly wage of $1,172 (approximately $61,000 per annum);
j)although the ongoing tensions between the brothers on the farm probably contributed to the marital relationship ending, final separation did not occur until April 2007 (although the husband says the wife left the farm in Easter 2004) when the wife says the parties first discussed property settlement. Little evidence is offered as to the parenting arrangements after separation, however I note the children were at the time of separation in 2007 aged approximately 23, 21, 19, 17 and 15 years respectively;
k)in 2007, the husband’s mother Ms M Sims (who held a life interest in the Estate of her late husband) died. It appears if the life interest was an impediment to the administration of the Estate, that has not been a catalyst for the finalisation of the Estate;
l)the parties were divorced in 2008 and these proceedings were commenced by the wife on 10 September 2009, only days before leave to commence proceedings would have been required. For reasons not immediately apparent, the Federal Magistrates Court (as it then was) transferred the proceedings to this Court and the matter has essentially remained dormant for years;
m)since separation the husband has continued to work for the F Service, however to enable him to have access to monies to fund Estate litigation (and he says to prepare him to “pay out” his brothers), he has accessed his accumulated superannuation, leaving him with funds in his bank account and a remaining small superannuation entitlement;
n)the husband retained the sole use and occupation of the family home from separation, and whilst the wife rented for a number of years in 2015 she entered into a “house/land” package at total cost of $405,000 and from accumulated savings she was able to pay a deposit of around $30,000. By making payments of approximately $1,977 a month, the wife has reduced her mortgage at the time of the hearing to approximately $365,000. To try and preserve her chances for a secure retirement, the wife has not accessed any of her superannuation and has salary sacrificed about $50 a fortnight; and
o)both parties have accumulated some employment benefits, yet to be received. The parties are generally in good health and hope to work as long as they can – noting that the husband is seven years older than the wife.
The estate of the husband’s father
On 20 April 2020, as directed by Order made 20 March 2020, the husband filed an Affidavit relating to the Estate. From the evidence then given, explored briefly during cross-examination, the following findings of fact emerge:
a)Mr B Sims (“the deceased”) inherited the farm property before the husband was born. He died in 1989 when the husband was married to the wife. The husband was then 35 years of age;
b)By his Last Will signed in June 1982 (see Annexure “S-1” to the Affidavit filed 20 April 2020), the Testator:
i)appointed his sons Mr H and the husband as Executors and Trustees;
ii)after making some specific bequests, he gave his whole Estate to his Trustees upon the following Trusts (inter alia):
1.permitting his wife Ms M Sims to use and occupy her home until her death;
2.to carry on the business and to pay half the income to Ms M Sims until her death, with the remaining half of the income equally between his three sons, the husband, Mr H and Mr G; and
3.upon the death of Ms M Sims, the real estate farm property together with livestock, plant and equipment was to be held on trust for the three sons subject to entering into a deed of partnership containing certain express conditions.
c)The said Last Will was the subject of a Grant of Probate made in April 2001 and Ms M Sims died in 2007;
d)At paragraphs 11 to 16 of his Affidavit filed 20 April, the husband gives a succinct summary of the extensive Supreme Court litigation involving the Estate, including:
i)the husband was removed as a Trustee in 1996, but remains an Executor;
ii)although Mr H has continued to operate the farm business (at a loss), on … January 2016 a judge in the Supreme Court of Queensland ordered certain properties to be sold – resulting in proceeds from the sale totalling approximately $640,874 (see paragraph 14) being held in Trust;
iii)although the husband estimated the Estate (at one time) to be worth $6,858,646, the husband says valuations have been conducted over the years at different times. For example, although the husband adopted a valuation figure of $750,000 for Lot … SP… as part of the total Estate value of $6.858 million, Exhibit 2 is the best evidence of the current value for Lot … SP … at $550,000. There must therefore be a level of uncertainty about the gross Estate value;
iv)furthermore, against this rough gross estimate, the husband says liabilities are being claimed, mostly it seems by the sole Trustee Mr H totalling $1,716,797 as follows:
-Beneficiary loans $121,435
-Sims Loans $593,029
-Employee entitlements $408,333
-Access road costs $594,000
$1,716,797
v)the husband claims “the assets of the Estate are also subject to Capital Gains Tax…[that] has not yet been quantified.” Significant legal expenses have been incurred and are likely to be incurred, including the current dispute arising from an application made on 9 July 2019 to “wind up the trust” and a likely cross-application (which is “now with counsel being settled”) to remove the Trustee;
e)It follows that quantifying with any absolute certainty what is the likely nett financial benefit the husband will receive from the Estate is problematic. Furthermore, the husband gives somewhat confusing evidence of his anticipated benefit, namely:
i)At paragraph 9 of his Affidavit filed 20 April 2020 he deposes that:
“Pursuant to the terms of the will I am entitled to one third of the value of the property. It is anticipated that I will receive this entitlement in land. The properties I anticipate retaining are as follows:-
a. Lot … on RP … 16.2 hectares $550,000.00
b. Lot … on RP … $185,000.00
c. Lot … on RP … $165,000.00
d. Lot … on RP … $185,000.00
e. Lot … on RP … $145,000.00
f. Lot … on RP … $405,000.00
g. Lot … on SP … $750,000.00”
$2,385,000
Allowing for the reduction in value of Lot … SP …, this gross anticipated benefit is $2,185,000.
ii)However at paragraph 25 of his trial Affidavit, the husband says:
“While I remain unsure as to when the estate will be distributed, I am aware of which parcels of land I am to take from the estate. They have been valued at $550,000 but have a CGT liability to consider.”
iii)In cross-examination, the husband said that the proceeds of sale now have (I infer with some accruals) increased from $640,874 to currently $670,875. That with a view to resolving the dispute he has made an offer (to the other beneficiaries) to pay $97,000 and get the land he wants as set out above. The impression I gain from the husband’s evidence is that he is confident that he will reach an agreement with the other beneficiaries.
Although the ongoing litigation in respect of the Estate has taken many years, no evidence was offered or, for example, advice from the husband’s Counsel in the Estate dispute tendered, that adequately explains why it has taken so long. If an application to “wind up” the Estate is pending before the Supreme Court now for over 12 months and, if the husband, as an entitled beneficiary wanted to move the Supreme Court to take an account of the estate; determine the alleged claims (which I note the husband disputes generally) and make declarations of entitlement, it would do so – and I find it hard to accept that in this family Estate dispute there is no prospects of a mediated resolution rather than a very expensive trial.
Although the husband says the interest he has is a “financial resource” because he does not know when he will receive it, or how much, I disagree.
Doing the best I can on the evidence offered to the Court by the husband, I find that, on the balance of probabilities:
a)he will receive legal title to Lot … SP … with a current value of $550,000; and
b)he will receive further land, as he anticipates he will, with a value of not less than $1,000,000, calculated as follows:
Adjusted gross Estate
$6,658,000
Less allowance for claims
$1,716,797
$4,941,203
Husband’s 1/3 share =
$1,647,067
Less value of Lot …
$550,000
$1,097,067
Less payment
$97,000
$1,000,0647
c)Although this figure is the best estimate, it could be much larger if all the claims made by the Trustee are not accepted. Although the husband may say the residue of $1,000,000 does not take into account his further legal fees and/or CGT (on which he chose to provide no probative estimate), I am comfortable in the analysis that follows in adopting these findings of likely benefit.
I also note that the husband is occupying the home (as he has done exclusively since 2004) and regards his “house paddock” of 36.96 hectares as his land. Although he does not have a legal title to that property at the moment, he has a clear interest under the Will and an anticipated vesting of that interest in the passage of time.
Current legal and equitable interests
The husband contends, as I will soon discuss, that it is not just and equitable within the meaning of s 79(2) of the Family Law Act 1975 to make any adjustment to the current legal and equitable interests (see Stanford & Stanford [2012] HCA 52). Before explaining why I do not accept this submission, it is necessary to identify those interests as I find they exist at the time of the hearing. In circumstances where the parties have now been separated for 13 years, and there is no evidence any of the existing liabilities existed at the time of the separation, I propose to ignore the wife’s credit card liabilities (totalling $13,000); and her Hire Purchase debt ($9,821) in respect of the novated lease on a post separation acquired motor vehicle. I also ignore the wife’s current savings – all accumulated post separation (totalling $19,577) and the value of her motor vehicle. I regard such approach is just and equitable to both parties.
I do not intend to treat the husband’s savings account balance in a similar fashion because in essence the funds represent the nett remaining withdrawals from the husband’s accumulated superannuation. At his age he has been able to access his superannuation. The husband’s Financial Statement reveals a modest excess of income over expenditure (although how much is difficult to quantify where no evidence of living expenses in Part N has been given), insufficient to allow him to accumulate savings of the level currently retained.
Furthermore, the husband’s evidence is that accessing his superannuation benefits was a strategy to unable him to have cash available to meet both his legal expenses of these proceedings and of the continual Estate litigation as well as putting him in the position of having around $97,000 available to pay his brothers to permit the adjustments on the Estate distribution to be ultimately achieved.
At the request of the Court during the hearing, the husband obtained some information as to this withdrawals on his superannuation, and Exhibit 1 shows relevantly that:
a)the value of the husband’s superannuation at 30 June 2006 was $11,938;
b)after the balance in one fund was rolled over in April 2011 to his current fund, he has withdrawn a total of $231,464 post separation; and
c)the balance at 21 September 2020 was $24,132.
The bank account, apart from being the reservoir for the superannuation withdrawals, also seems to have been swelled by an unsecured personal loan of $50,000 taken out in October 2018 (again to help meet legal expenses) on which a loan a balance of $40,899 remained at the trial. The husband deposes to paying $125 a week to his bank on this personal loan.
In these circumstances it would be fair to reduce, in the pool of assets and liabilities, the husband’s savings to a figure of $225,475 and make allowance for the personal debt.
On the basis of these findings, and in consideration of the approach identified by the Full Court in C & C [1998] FamCA 143 to constitute separate pools where distinct characteristics of assets exist, I find the pool of interests should be as follows.
POOL ONE
PARTY
ASSET
AMOUNT
Husband
Nett savings
$225,475
Husband
Motor Vehicle 1
$2,500
Husband
Likely vesting of Lot …
$550,000
$777,975
Wife
J Street, K Town
$402,000
Less mortgage
$363,627
$38,373
TOTAL NETT POOL ONE
$816,348
POOL TWO – SUPERANNUATION INTERESTS
Wife
L Super – Defined Benefit
$534,697
Wife
L Super – Accumulation Fund
$10,707
$545,404
Husband
W Super
$24,132
TOTAL POOL TWO
$569,536
POOL THREE – BALANCE OF INHERITANCE
Husband
Estimated balance approximately
$1,000,000
Mr Cameron for the husband submitted that this is one of those “rare” cases where s 79(2) compels a finding that it is not just and equitable to make any adjustments to the interests but that each party should retain what they now hold.
Recently in Hunter & Borman & Anor [2020] FamCAFC 250, the Full Court (Mr P, Kent and Tree JJ) said at [33]:
“33... there will be cases, such as Stanford itself, where it is concluded that the just and equitable requirement (expressed in s 79(2)… for the making of any adjusting order is not satisfied. There will be other cases where, whilst the just and equitable requirement may be satisfied by the circumstances of the case, the outcome of the application of the mandatory considerations (s 79(4)… is that no adjusting order to existing property interests ought be made.”
And further referred to Stanford at [42] that:
“42.In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).”
In the circumstances of this case, where the parties constructed during their relationship the home on Lot …; where they did so with, I find, a common intention and expectation that in time at least Lot … would vest after the death of the husband’s father in 1989 (during the parties’ relationship) and where the breakdown in the marital relationship in 2007 means the common use of the property no longer can occur, I find it is just and equitable to make an order.
As a result of this finding, the Court is guided by principles enunciated in cases such as Hickey & Hickey (2003) FLC 93-143 to follow the following mandated statutory approach:
a)To identify the pool of assets and liabilities generally, and usually at the time of hearing;
b)To assess the relative contributions of both the financial, non-financial, direct and indirect nature as specified by s 79(4);
c)To consider the factors as are relevant contained in s 75(2) of the Act; and
d)Finally, consider the ultimate analysis to determine whether the order the Court proposes to make is just and equitable to both parties.
Contributions
Although the Court noted in its Order of 6 August 200 with the acceptance by the parties:
“That the parties have agreed that contribution entitlements are equal. The material which the parties are directed to file reflects that consideration of s 75(2) issues and what orders do justice and equity will be the focus of the material.”
both parties gave limited evidence on what they say are relevant contribution factors.
The Applicant wife says, and I accept, her contributions included:
a)primary homemaker and parent to the five children;
b)supporting the husband through his legal battles with other members of the family, including using cashed in superannuation from her employment with the Commonwealth Bank over 10 years (before the birth of the first child) amounting to approximately $20,000 for the Estate Court case in “the early 1980’s”
c)contributing her income from employment until separation to the household;
d)from her employment with N Organisation (being some 12 years before separation and 13 yeas post separation), her accumulated superannuation benefits; and
e)post separation, in the unusual circumstances where the home the parties built was on Estate land, the wife paid rent until she acquired her home at K Town and the husband has continued to enjoy, rent free, the home on the farm.
The husband says, and I accept, subject to the reservations identified, that his contributions included:
a)The husband says he had savings of $50,000 at cohabitation. No proof to establish these savings was offered, however considering how long ago that was, nothing turns on the lack of documentary proof. I am prepared to accept the husband (who was 27 years of age whilst the wife was only 20 years of age) had more savings than the wife. However the wife says the husband had received low wages on the farm and it is unlikely he would have accumulated savings, after expenses, of $50,000. I accept whatever he had went into building the home;
b)Being the “primary breadwinner”, although he says, and I accept, helped with the children and around the property maintaining it;
c)When he left working on the farm finally in 1996, I accept he began to accumulate superannuation, which Exhibit 1 indicates had a balance of around $11,938 at 30 June 2006. Whilst the husband acknowledges the decision to use “joint funds” including the wife’s superannuation entitlements towards the Estate legal expenses, he says that was made “for the potential benefit that may have accrued. No benefit has been received by either party in these legal proceedings”. Why that is, at the time of the hearing, arguable – the benefit as already discussed will “accrue” solely to the husband;
d)Post separation the husband, I accept, has maintained the home and probably the house paddock. It is not clear whether, for example, he pays rates as the land is still vested in the Estate. His continued occupation of the home has been a benefit to him, although I note he asserted that at separation the wife “and her family cleaned the house of almost all the furniture”.
I agree that at least until separation contributions of both a financial and non-financial character were equal.
The inheritance the husband will receive is a financial windfall, however particular in respect of the home paddock and the way it was utilised during the pre-separation period, the wife did make a contribution – in the expectation, as the husband says, of the potential benefit that may have accrued.
Post separation, the parties have made completely independent financial decisions as to the accumulation of superannuation (including salary sacrificing); accessing cash withdrawal opportunities (in the husband’s case) and securing loans including, in the wife’s case, a novated lease on her motor vehicle.
At the time of the hearing, I find the contribution based entitlements to the separate pools to be:
Pool One: Husband 70%; wife 30% accepting the inherited component is mostly a contribution by the husband and that his savings accumulated substantially in superannuation accrued post separation.
Pool Two: Wife 90%; husband 10% allowing for some of the wife’s superannuation having accrued prior to separation.
Pool Three: Husband 100%.
These contribution findings shape the orders I find to be just and equitable, but are not strictly “mathematically” relied upon.
Section 75(2) factors
The wife is in employment with a significantly higher wage than the husband and has, unlike the husband, not utilised most of her employee benefits such as long service leave. I find, despite some of the health issues she asserts, that she has a longer future working life than the husband (being seven years younger), on which to continue to build her superannuation – particularly through the defined benefit component which rewards longevity of employment.
The husband will however be debt free; can remain living on the farm, and on my analysis, will have access to further substantial land holdings in time.
The effect of the orders as to property adjustment (s 75(2)(n)) means that much of the wife’s superannuation benefits will be used to ultimately discharge her home mortgage.
Although not a significant factor, the wife did give evidence of a small legal interest she has in her mother’s modest home, and that she anticipates she may share a small inheritance in time with her siblings.
The superior earning capacity of the wife might, in other circumstances, justify an adjustment to the husband. The benefits to flow from the inheritance to the husband might, in other circumstances, justify an adjustment to the wife.
The purpose of s 75(2), as the Full Court recently observed in Hobson & Hobson [2020] FamCAFC 251 at [32], is not to achieve equality in the financial strengths of the parties, nonetheless the overarching obligation is to achieve a just and equitable division of the property. In the circumstances of this case no significant adjustment in favour of either party is justified to the contribution based entitlements.
What orders achieve justice and equity?
The wife’s amended proposal, as articulated by her Counsel, was for the husband to pay her $200,000 (down from the claim in her case outline of $450,000), and that she retains her other interests. The husband, as earlier recorded, says no adjustment order should be made.
I have determined it is just and equitable for the husband to pay the wife $165,000 in the following instalments:
a)Within 30 days - $65,000;
b)Within two years from the date of this order or within 30 days of the inheritance vesting in the husband - $100,000; and
c)The second payment of $100,000 shall accrue interest at the rate of 5% from the period being 12 months from the date of this order until the date of payment.
Otherwise the parties shall retain all other interests to their ownership (or likely to vest in them) to the exclusion of the other party. On the contribution based determinations, the mathematics might amount to a payment to the wife of $174,000 approximately. I regard the payment of $165,000 as fair.
I find this order is just and equitable to both parties as it:
a)provides to the wife some immediate benefit, which the husband has the capacity to pay;
b)does not reduce the husband’s available funds so as to put at risk making the payment to his brothers of $97,000 or being able to meet legal expenses associated with the Estate; and
c)allows the husband up to three years to finalise the Estate, but so as to provide some relativity to the wife that the second payment does not lose value to her, a modest interest impost is fair. It may also motivate the husband to finalise the Estate to achieve his just inheritance before he gets much older so that he also can consider retirement.
When all payments have been made, and with the wife’s hope for a few years more employment (and perhaps even a beneficial early redundancy):
a)the husband will have his farm land – probably no debt, or at least parcels of land which he could sell to extinguish debt and/or supplement his income. He will have his house and his “house paddock”; and
b)the wife will likely be able to retire in time, owning her own home without a mortgage, and some remaining modest superannuation.
The husband will likely be in a superior asset position – arising essentially from his inheritance.
The orders, for these reasons, at the commencement of this Judgment achieve justice and equity for both the husband and the wife.
I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Baumann delivered on 23 October 2020.
Associate:
Date: 23 October 2020
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