Slade and Slade
[2010] FMCAfam 67
•2 February 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SLADE & SLADE | [2010] FMCAfam 67 |
| FAMILY LAW – Property – marriage of approximately ten years in duration – marriage produced two children – asset pool – whether parties’ superannuation should be placed in a separate pool – assessment of contributions – waste – whether wife’s alleged excessive consumer spending should be regarded as “negative” contribution – weight to be given to bequests and donations received by husband – whether such gifts should be given strict arithmetic weight – assessment of homemaking and parenting contributions – assessment of s75(2) factors – whether wife should receive entitlements in cash or as a mix of cash and superannuation – factors to be considered in determining form of settlement orders – just and equitable. |
| Family Law Act 1975, ss.75(2), 79, 90MC, 90MT |
| Lee Steere v Lee Steere (1998) FLC 91-626 Ferraro v Ferraro (1993) FLC 92-355 Clauson v Clauson (1995) FLC 92-595 Hickey v Hickey & Attorney-General of the Commonwealth of Australia (Intervenor) (2003) FLC 93-143 Biltoft & Biltoft (1995) FLC 92-614 C & C (2005) FLC93-220 Norbis v Norbis (1986) FLC 91-712 Pierce & Pierce (1999) FLC 92-844 Russell v Russell (1999) FamCA 187 Waters & Jurek (1995) FLC 92-635 D & D [2003] FamCA 473 Kessey & Kessey (1994) FLC 92-495 Pellegrino & Pellegrino (1997) FLC 92-789 AJO v GRO (2005) 33 Fam LR 134 In the Marriage of DJM and JLM (1998) 23 Fam LR 396 In the Marriage of Townsend (1994) 18 Fam LR 505 In the Marriage of Kowaliw (1981) FLC 91-092 In the Marriage of Browne & Green (1999) 25 Fam LR 482 In The marriage of Spiteri (2005) 33 Fam LR 109 Collins & Collins (1990) FLC 92-149 L & L (2006) FLC 93-254 |
| Applicant: | MS SLADE |
| Respondent: | MR SLADE |
| File Number: | ADC 2103 of 2008 |
| Judgment of: | Brown FM |
| Hearing date: | 22 September 2009 |
| Date of Last Submission: | 22 September 2009 |
| Delivered at: | Adelaide |
| Delivered on: | 2 February 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr Berman |
| Solicitors for the Applicant: | Griffin Hilditch |
| Counsel for the Respondent: | Ms Lindsay |
| Solicitors for the Respondent: | North East Lawyers |
ORDERS
In full and final settlement of all claims for the settlement of matrimonial property:
Within thirty (30) days of today’s date the parties do all things necessary and execute all necessary documents to place the former matrimonial home known as and situate at Property W in the State of South Australia being the whole of the land comprised in Certificate of Title Volume [omitted] for sale on such terms and conditions as the parties may agree and failing agreement as nominated by the court with the proceeds of sale when realised to be divided as follows:
(a)Firstly to pay the costs, commissions and expenses related to the said sale;
(b)Secondly to pay out the mortgage to the Adelaide Bank secured against the aforesaid property;
(c)Thirdly to pay out the Adelaide Bank Line of Credit, known as the Power Loan also secured against the aforesaid property;
(d)Fourthly to discharge the parties’ joint liability in respect of the Adelaide Bank Merlin Visa card;
(e)Fifthly to pay the sum of $5,200.00 owing by the wife on her Coles Myer credit card and the sum of $778.00 owed by the husband to JB Hi Fi.
(f)Finally, to pay the balance as to sixty-two percent (62%) plus the sum of $7,069.42 to the wife and thirty-eight percent (38%) less the sum of $7,069.42 to the husband.
Within thirty (30) days of the date of these orders the wife do deliver up to the husband the following items currently in her possession:
(i)Plasma TV
(ii)Digital video camera
(iii)Muhammad Ali shorts
(iv)Drawers and contents in robe and paperwork from filing cabinet
(v)Half photos and videos
(vi)NEC large television
(vii)Lawnmower
(viii)Webber barbeque
(ix)Items in shed
(x)Barbeque
(xi)Small portable television
Pursuant to section 90MT(1)(a) of the Family Law Act there be a splitting order in respect of the husband’s [E] Superannuation Scheme and pursuant to section 90MT(4) of the Act a base amount in the sum of $48,500.00 be allocated to the wife out of the husband’s interest in such fund.
The solicitor for the wife serve a copy of these orders on the Trustee of the [E] Superannuation Scheme by 15 February 2010 and thereafter the aforesaid Trustee has liberty to relist the matter before the court in the event that the Trustee is unable to comply with order (3) hereof, but otherwise the operative time for the aforementioned splitting order shall be 24 February 2010.
The Trustee of the [E] Superannuation Scheme, the husband and the wife, in accordance with the Family Law (Superannuation) Regulations 2001 shall do such acts and things and sign all necessary documents as are required to calculate the payment entitlements of the wife in accordance with order (3) hereof.
Save and except for the chattels specified in order (2) hereof and the superannuation interests specified in order (3) hereof, each party be solely entitled to the exclusion of the other to all other properties and chattels of whatsoever nature and kind in the possession of such party as at the date of the making of these orders and for that purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank’s records thereof and insurance policies and superannuation entitlements are deemed to be in the possession of the beneficiary thereof.
The husband is declared to be the owner of the Ford motor vehicle currently in his possession and the wife is declared to be the owner of the Holden Astra motor vehicle currently in her possession.
The applications be otherwise dismissed.
Each party has liberty to apply as to any consequential orders necessary.
IT IS NOTED that publication of this judgment under the pseudonym Slade & Slade is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADC 2103 of 2008
| MS SLADE |
Applicant
And
| MR SLADE |
Respondent
REASONS FOR JUDGMENT
Introduction
These proceedings are concerned with the division of matrimonial property. The parties to the proceedings are Ms Slade “the wife” and Mr Slade “the husband”.
The parties began to live together in 1997 and married [in] 1999. They are the parents of two children, [X] born [in] 2000 and [Y] born [in] 2003.
There is no dispute between the parties that they finally separated on 12 May 2008. The wife commenced these proceedings a few days later. At that time, the parties were in dispute about both arrangements for the care of [X] and [Y] and as to how their matrimonial property was to be divided.
On 22 September 2009, the parties agreed on final orders for the parenting of the children. They agreed they would have equal shared parental responsibility for the two children.
In practical terms, they also agreed that, during term times, the children should spend four nights per fortnight in the care of their father, as well as half of each school holiday period. In respect of [Y], the school holiday arrangement is to start once she is eight years of age.
Arrangements were also made for the children to see their father on special occasions, but otherwise, the children are to live predominantly with their mother.
The husband is a [occupation omitted] employed by [E] and has been since 1990. He earns a base salary of around $65,000.00 per annum, but with overtime, shift and on call allowances earned $84,000.00 in the most recently completed financial year.
The wife is a part-time [occupation omitted]. She currently earns around $6,000.00 per annum based on around 12 hours work per fortnight. She is paid $18.64 per hour. She also receives social security payments and child support of $910.67 per month from Mr Slade.[1]
[1] See annexure KS12 for the wife’s affidavit filed 28 August 2009.
The parties previously indicated to the court that they had reached agreement in respect of the division of their property, at a conciliation conference, which had earlier been convened, at the direction of the court. However, they were unable to formalise their agreement and no proposed consent orders have ever materialised. This is the major reason the finalisation of these proceedings has been delayed.
The pool of property available to be divided between the parties is not large. The most significant item, in dollar terms, is their former family home, situated at Property W.
The Property W property is worth about $380,000.00. It is subject to liabilities in the form of a mortgage and associated line of credit, in a sum of around $66,000.00. The parties have other, contentious, credit card debts.
The parties agree that their current financial circumstances dictate that the Property W property should be sold. The parties’ other significant asset, in terms of value, is the husband’s superannuation. It has been valued, by an actuary, at just under $100,000.00.
Both parties are in their mid-thirties. They are in dispute about the percentage basis on which their pool of matrimonial property should be divided between them.
They are also in dispute about the mix of the assets each should receive at the end of the court’s process. The wife preferring to receive her entitlements in the form of cash, rather than as a combination of a split from the husband’s superannuation and a sum of money.
The parties are also in disagreement about the actual extent of property available to be divided between them. The chief area of disagreement being centred on whether a credit card debt, in the wife’s name, standing in the sum of $5,332.00 should be included in the parties’ pool of assets.
These proceedings are designed to resolve the various disputes between the parties and, as far as possible, finalise their financial relationship with one another.
The applicable legal principles
The process to be followed, for the division of the parties’ property, is well established by law.[2] The relevant legal principles are primarily contained in Section 79 and 75(2) of the Family Law Act 1975. I am required to follow a number of steps.
[2] See Lee Steere v Lee Steere (1998) FLC 91-626; Ferraro v Ferraro (1993) FLC 92-355; Clauson v Clauson (1995) FLC 92-595; Hickey v Hickey &Attorney-General of the Commonwealth of Australia (Intervenor) (2003) FLC 93-143;
Firstly, I must ascertain what are the parties’ assets and liabilities as at the date of trial.[3] This step creates areas of contention between the parties in the following areas:
·The wife has a Coles Myer credit card, with a debt related to it of $5,332.00. It is her position that the debt should be regarded as a joint matrimonial debt because the items purchased on the card were largely ones referable to the parties’ relationship.
·It is the husband’s case that the wife obtained this card, during the marriage, without reference to him. It is also his case that the expenses related to it are largely personal to the wife and profligate. In these circumstances, she should assume responsibility for the debt in question.
[3] See Biltoft & Biltoft (1995) FLC 92-614
During the course of the hearing, the parties were able to apparently agree on the value of the vast majority of their assets and liabilities. They agreed that:
·The Property W property is worth $380,000.00. Obviously, the marketplace will determine its exact value, when the property comes to be sold.
·The property is subject to a mortgage of $40,916.00 and a line of credit debt in the sum of $25,285.00.
·The parties have a joint Visa card debt of $4,767.00.
·They also have a joint debt of $778.00 owed to JB Hi-Fi, which relates to the purchase of a plasma television set. It would seem to be the case that the husband wishes to retain the television set in question.
·The contents of the former family home are worth $7,941.00, of which the wife has items to the value of $4,550.00 and the husband items to the value of $3,391.00.[4]
·It is agreed that the wife’s car is worth $6,200.00 and the husband’s car is worth $14,600.00.
·The husband’s superannuation is worth $99,772.00, having been professionally valued according to the legislatively mandated method.
·The wife’s superannuation is worth $13,596.00.
[4] There is a difficulty with this value. The wife’s counsel, in written submission, submits that the parties have agreed on these values. The husband’s counsel, in her written submissions, agrees the total figure of $7,941.00 but asserts the wife has all the items in question. In his minute of orders sought, on behalf of the wife, Mr Berman has attached a schedule of items which his client proposes the husband should receive. I assume this list has come about as a result of some agreement between the parties.
As previously indicated, the parties have previously indicated they have reached agreement regarding the total settlement of the property aspect of these proceedings. However, this agreement has never been crystalised. Rather, it would seem to be the case that subsequent areas of disagreement have arisen between the parties, some of which have related to comparatively minor items of household property.
The final hearing of this matter was allocated one day’s hearing on 22 September 2009. The hearing of evidence from the parties took the whole of the time allocated. At the end of the proceedings on 22 September, I was told that the parties had reached an accommodation with one another, which would be reduced to writing overnight, so that a proposed consent order could be submitted.
However, the next morning, I was told that, once again, the agreement had dissipated overnight. In these circumstances, I determined that each party should provide written submissions to the court. As indicated, there is an anomaly between the parties’ respective written submissions in regards to the issue of household items. I propose to resolve this issue on the basis of the written submissions provided by counsel for the wife.
Accordingly, the parties’ total superannuation has a combined value of $113,368.00. The husband proposes a split from his superannuation, in the wife’s favour, as part of any final orders made by the court.
On the other hand, the wife proposes that each party should retain his or her respective superannuation as it is. The implication being that given the level of disproportion, in the parties’ respective superannuation entitlements, she should receive the preponderance of her settlement from the proceeds of sale of the Property W property.
This dispute raises issues as to whether the parties’ superannuation should be tabulated in a separate pool to their other assets and so whether their various contributions to the two separate categories of asset should be assessed independently by the court.
Pursuant to Section 90MC of the Family Law Act 1975, superannuation interests are to be treated as property, as such, they specifically attract the provisions of section 79 of the Act.
In C & C[5], the Full Court of the Family Court has described superannuation as a different “species of asset” from other forms of property.
[5] C & C (2005) FLC93-220
This is because superannuation, particularly in its accumulation phase, cannot be easily translated into cash, unlike other more “conventional” assets, such as land and personal property, and so its value accurately determined by sale.
In addition, superannuation can present other valuation problems, depending on conditions relating to the fund concerned. The ultimate value of some superannuation funds may depend on factors which are unknown at the time of the court hearing, such as the length of time of employment of the beneficial owner of the superannuation concerned at retirement from the work force. These issues are particularly significant in funds which are categorised as defined benefits scheme.
Mr Slade’s superannuation, in the [E] Superannuation Scheme, has aspects of a defined benefit superannuation scheme. As a result, it has been valued according to the prescribed methodology provided by the Family Law (Superannuation) Regulations. The parties acknowledge that this is the only means by which the husband’s superannuation entitlements can be properly valued.
In C, the majority of the full court of the Family Court held as follows:
“In summary, then, the trial Judge has a discretion as to how superannuation interests will be treated in a particular case. If superannuation is not included in the list of property but rather made the subject of a separate pool, it will be necessary where a splitting order is sought, or extremely prudent where no such splitting order is sought (in order to ensure that justice and equity is achieved) to:
a)value the superannuation interest (according to the Regulations if an order under Part VIIIB is sought or according to the Regulations or otherwise if no order is sought);
b)consider and make findings about the types of contributions referred to in s 79(4)(a), (b) and (c) which have been made by the parties to the superannuation interests on either a global approach or an asset by asset approach depending on the circumstances;
c)consider the other factors in s 79(4) being the matters in s 79(4)(d), (e), (f) and (g); and
d)ensure that pursuant to s 79(2) the orders in relation to the parties’ property, and any order under Part VIIIB in relation to superannuation interests are just and equitable.
In the context of a consideration of the matters referred to in sub-paragraphs (b) and (c) of the last paragraph, the following matters may well be relevant: the relationship between years of fund membership and cohabitation (if applicable), at separation and at the date of hearing; preserved and non-preserved resignation entitlements at those times; and any factors peculiar to the fund or to the spouse’s present and/or future entitlements under the fund.”[6]
[6] See C & C (supra) at 79,646
The rationale behind the majority’s reasoning in C & C appears to be that, by reason of its special nature, it is often appropriate to assess contributions to superannuation interests separately to contributions made towards other more “conventional” assets.
This is so one or other of the parties’ contributions to that superannuation may be given “proper recognition”. In order to ensure this “proper recognition”, it is necessary for the court to consider what is the “real nature” of the relevant superannuation interest – namely whether it is likely to be received as a recurrent pension or a lump sum or in some other manner.
The wife’s contention is that it is not appropriate for the parties’ superannuation to be placed in a separate pool. Rather, she asserts that the parties’ various contributions should be assessed in a global manner in respect of their entire assets, both non-superannuation and superannuation.
She argues that, given the modest asset pool, such an outcome would not lead to any distortion of the asset pool and so some form of unfairness to the husband, particularly given that both parties are many years from retirement.
On the other hand, it is the husband’s position that considerations of justice and equity dictate that there should be two asset pools. The implication of his position being that it is fair that both parties should receive a “mix” of both superannuation and non-superannuation assets at the conclusion of these proceedings. This a theme to which I will return when outlining considerations applicable at the final stage of the court’s deliberations.
It is common ground between the parties that, following separation, the husband withdrew the sum of around $8,000.00 from a savings account, totally depleting that account. Initially, the wife sought to have this sum notionally “added back” into the parties’ pool of assets. She no longer seeks to do so, apparently accepting that the husband utilised the moneys on joint matrimonial liabilities.[7]
[7] See annexure PS4 to the husband’s affidavit filed 11 September 2009.
My basic task, in the first step, is to calculate the parties’ pool of assets at the date of hearing. It is not my role to trace every dollar and item of property utilised by the parties, either prior to their separation or after it and make some exact accounting of the various transactions involved.
The second step involves the court ascertaining the contributions which each party has made towards those assets. Contributions fall into two broad categories. The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly, by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any of the property.
The second kind is contributions to the welfare of the family: in the words of the section, “the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage, including any contribution made in the capacity of home maker or parent.”[8]
[8] See Family Law Act s79(4)(c)
It is clear from the authorities that this second kind of contribution must be given appropriate weight and is not to be treated as a token matter or as a contribution which is inherently less valuable or important than a financial contribution to property.
In assessing the parties’ contributions to the acquisition of the assets of their marriage, it is necessary to consider whether the court should adopt a global approach or an asset by asset approach. In the former, the court assesses the parties’ contributions to their assets in a total or comprehensive manner. In the latter, the court assesses the parties’ contributions to individual items of property.
The global approach is the method generally adopted because it is usually the more convenient, particularly when the court is assessing different types of contributions – home making and financial – towards the acquisition of the various assets concerned.[9]
[9] See Norbis v Norbis (1986) FLC 91-712 at 75,268
The second step occasions controversy between the parties in the following areas:
·The parties met as teenagers and were boyfriend and girlfriend thereafter. The husband began paid employment, at aged 17 or 18 in 1990, whilst the wife was aged 15 or 16.
·It is the husband’s case that, when the parties began to live together, in 1997, he had a personally acquired savings of $23,000.00, which sum was the basis used to purchase the Property W property in which the parties lived from the time their cohabitation began.
·In all these circumstances, the husband contends that his individual contribution of $23,000.00, in the overall circumstances of this case, is a contribution which merits “special recognition,” in his favour, in the court’s deliberations.[10]
[10] See Pierce & Pierce (1999) FLC92-844 at 85,811.
·The wife’s case is that she was employed [in the Administrative Industry] both prior to and after the parties began their relationship.
·As such, she contends that she made, at the very least, a substantial indirect contribution, which enabled the husband to acquire the housing deposit of $23,000.00, which more properly should be regarded as a joint financial contribution.
·It is the husband’s position that he made discrete financial contributions, in the sum of $33,000.00, in the form of inheritances received by him during the course of the parties’ marriage.
·The wife concedes that the husband did receive a bequest, from his late grandmother’s estate, in 2001, in the sum of $10,000.00 but refutes any other specific bequests.
·In addition, it is the wife’s position that this was a bequest that was intended to benefit her as much as the husband.
·The husband characterises the wife as a spend thrift, who wasted the parties’ funds during the marriage on self-indulgent luxuries for herself. In particular, he contends that the wife;
ØBetween February 2006 and August 2008 withdrew $7,000.00 from joint funds, for which she has never accounted.
ØExtended the parties’ mortgage by $20,000.00.
ØFailed to administer the parties’ financial affairs properly, particularly in respect of paying debts on time, so that penalties and interest were incurred.
ØUtilised the parties’ joint credit card to make luxury purchases for herself, such as the use of solariums; beauty products and new clothing.
·The wife refutes any suggestion that her personal expenditure can be characterised as waste. It is her position that the husband had equal access, with her, to the parties’ various statements and accounts and so could have taken steps in respect of both her management of the parties’ finances and her expenditure, if he chose to do so.
·As such, in the context of the parties’ marriage, the wife asserts that there was nothing extraordinary about her level of expenditure, which warrants the court’s attention at the second step.
·In addition, she points to the fact that the husband was content to extend the parties’ line of credit, by an amount of $20,000.00, to purchase an expensive motor car of his preference. As such, by necessary implication, he had a significant degree of insight into the parties’ financial affairs.
·The wife concedes that the husband was the family’s major breadwinner during the parties’ marriage. However, she points to the fact that she did undertake some part time work [in the Retail Industry] and used her wages for family purposes.
·The husband concedes the wife’s employment but asserts that the wife used her income for her own profligate purposes, which were unrelated to the family and its needs.
·On the other hand, it is the husband’s case that he undertook a considerable amount of overtime, which was potentially dangerous because of the nature of his employment and all his wages went to family purposes.
·The wife characterises the husband as an unduly punctilious person, who required her to discharge her home making responsibilities to a very high standard.
·It is also her case that the husband was obsessively involved with body building and, as a result, attended a gymnasium three or four evenings per week.
·As a result, it is her case that home making and parenting responsibilities for [X] and [Y] fell disproportionately on her shoulders.
·On the other hand, it is the husband’s case that both parties were involved in physical fitness and both attended a gym regularly.
·He characterises the wife as a lax home maker, who left the dishes and laundry to him. It is his case that the wife preferred socialising and shopping to doing the necessary household chores.
·The husband concedes that the wife was actively involved in parenting the children but asserts that his parenting contributions were also substantial.
·Both parties assert that their respective post-separation contributions have been greater than the other’s in the following areas:
ØThe wife contends that her financial resources, post-separation, have been insufficient to provide for her and the children’s basic needs, particularly given the expenses related to the children’s education.
ØShe has remained the children’s primary carer, on a modest income, whilst the husband has been receiving a generous salary in comparison and his needs have been far less than hers and the children’s have been.
ØIn comparison to herself, the husband has been able to live largely rent free with his father.
ØThe wife is also aggrieved that the husband ceased paying the recurrent mortgage payments on the Property W property from January 2009 onwards and has not recently contributed to other outgoings related to the property.
ØThe husband concedes his higher salary but points to the fact that he has been assessed to pay child support on it, which is based on the actual costs of financially supporting children of the ages of [X] and [Y].
ØIn addition, he points to the fact that he pays half the children’s school fees at [S] School.
ØHe denies living rent free with his father, asserting he pays board and contributes to bills.
ØIt is the husband’s case that a disproportionate level of responsibility for paying the parties’ joint debts has fallen on his shoulders in the period post-separation and that the wife has largely lived cost free in the parties’ former family home in the period since the parties separated in May 2008.
ØIn addition, it is the husband’s case that the wife has been underutilising her capacity to earn income, in the period since the parties separated, and has the ability to work more than six to twelve hours per fortnight.
At the end of the second stage, the wife asserts that the parties’ various contributions, during their marriage, should be regarded as being essentially equal. It is her case that the parties pooled their respective financial resources and their marriage was a joint partnership to which both contributed equally, according to the maximum of their respective capabilities, albeit it in different forms from time to time.
She characterises her own expenditure, during the marriage, as being within the normal range of matrimonial propriety. She asserts the husband seeks to draw attention to it now only to advance his own interests and the proper time for him to object to her financial conduct was during the marriage. Something which he failed to do.
It is the wife’s case that, in the event that the husband’s submissions regarding specific financial contributions, in the form of his purported inheritance and alleged initial financial contributions find favour with the court, these are cancelled out by her significant post-separation contributions.
On the other hand, it is the husband’s case that the combination of his direct financial contributions, during the marriage and his contributions as a home maker and parent are significantly greater than those of the wife.
It would appear to be his position, as advocated by his counsel, that the court should make a direct adjustment, in his client’s favour, in the sum of $56,000.00 being the amount of his inheritance and alleged savings at the commencement of the parties’ relationship.[11]
[11] See husband’s written submissions at page 7.
In the event this direct arithmetical allowance does not meet the court’s favour, it would appear to be the husband’s position that the parties’ contributions, at the end of the second stage, should be assessed as being 60/40 per cent in his favour. As previously indicated, it would be his position that the wife’s Coles Myer credit card should be regarded as being the wife’s sole responsibility.
The third step involves the assessment of the parties’ prospective needs, by reference to the factors set out in section 75(2) of the Family Law Act 1975. Pursuant to section 75(2)(o), the Court is entitled to take into account “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
In the main, section 75(2) deals with the prospective needs of the parties. This area creates some controversy between the parties, although the husband concedes that overall the matters arising under section 75(2) favour the wife.
The following considerations arise at the third step:
·The parties agree that there is a substantial disparity currently between the husband’s income and the wife’s income, which disparity is likely to remain for the indefinite future [section 75(2)(b)].
·The wife asserts that the parties’ children are young and she is their primary carer. As such, her capacity to return to the workforce is limited [section 75(2)(c)].
·The wife also asserts that her skills are limited and it will be difficult for her to increase her hours of work.
·On the other hand, the husband points to the fact that both [X] and [Y] are now of school age and, as such, it is not unreasonable for the wife to increase her level of employment forthwith.
·The wife concedes that the husband is currently paying child support. However, it is her case that this child support will be inadequate to meet the children’s actual needs and accordingly a heavy financial burden will remain on her shoulders [section 75(2)(c)].
·For his part, the husband points to the fact that he will continue to pay a significant proportion of his income in child support and, given his status as a PAYG tax payer, the Child Support Agency will be able to assess an appropriate level of child support for [X] and [Y] for the indefinite future [section 75(2)(na)].
·The wife wishes to receive sufficient funds to enable her and the children to have financial security in the short to medium term, particularly so that the wife can purchase some form of accommodation for them all [section 75(2)(g)].
·In these circumstances, she argues that considerations of justice and equity should dictate that she receives her proper entitlements in the form of cash rather than a superannuation split, particularly as the husband, by dint of his superior income, will be able to recover financially sooner than her following the failure of the parties’ marriage.
·However, the wife concedes that, if the court does accede to her proposal regarding receiving her entitlements in cash, it may be appropriate that there be some adjustment downwards, as a result of the section 75(2) factors favouring her, to recognise the benefits of a lump sum.
·On the other hand, it is the husband’s position that considerations of justice and equity dictate that the parties should each receive a pro rata amount of superannuation and non-superannuation assets in the overall settlement, particularly as he is likely to be at least 20 years from retirement and the crystallisation of his superannuation entitlements.
At the end of the third stage, it is the wife’s position that the various section 75(2) factors greatly favour her and given the modesty of the parties’ overall asset pool, these factors should be given real rather than token weight. In these circumstances, it is her position that she should be given a further 20 per cent of the parties’ total assets, exclusively from the proceeds of sale of the Property W property.
The husband does not see the marriage between the parties as being one of equals. He asserts that the wife spent wantonly and wastefully during the parties marriage and this is a factor which the court can take into account [section 75(2)(o)]. In all of the circumstances of this case, he urges the court to be cautious in assessing the allowance to be made in the wife’s favour at the third stage.
It would be his position that considerations of justice and equity warrant an adjustment somewhere in the vicinity of between 5 and
7.5 per cent and at the most 10 per cent, but certainly not the
20 per cent proposed by the wife.
Finally in determining what order the court should make under section 79, the court must be satisfied that in all the circumstances, it is just and equitable to make the relevant orders. Overall, it is the justice and equity of the actual orders that the court must consider.[12]
[12] See Russell v Russell (1999) FamCA 187
Accordingly, the fourth step is for the court to take a step back and examine whether the orders it proposes are just and equitable. In this regard, the wife asserts that it would be fundamentally unfair to her if she receives anything less than 70 per cent of the parties net non-superannuation assets, given the small property pool available and her overwhelming prospective needs.
On the other hand, it would appear to be the husband’s position that the overall division of the parties’ total property should be closer to an equal one, given what he characterises as the wife’s wanton and cavalier wastage of matrimonial property.
The “overriding requirement” of section 79 is that considerations of justice and equity should inform each step of the process. The exercise I must undertake is not a “process of social engineering”[13] or of equalisation of assets or financial resources.
[13] See Waters & Jurek (1995) FLC 92-635
At the outset, I am at pains to point out to the parties that the task I must undertake is not a simple accounting or arithmetical task. In the jargon of the times, I cannot “crunch the numbers” to come up with a division of their property, which is not open to challenge or incapable of different interpretation.
Marriage is by and large a joint enterprise. How much buffer spouses must give one another, when financial set backs occur, must depend on the degree of consultation and acquiescence in their relationship.[14]
[14] See D & D [2003] FamCA 473 at paragraph 49
The task, set out for me in this case, requires me to balance and compare contributions which are by their nature different, within the framework of a marriage. Many contributions in a marriage, such as being a homemaker, do not result in the direct acquisition of assets. They are also difficult to value. The discretion I have is a wide one.
Documents Relied Upon
The wife is the applicant in these proceedings, which she commenced on 28 May 2008. She has not formally amended her application in the period since. Her application seeks a settlement of property which is “just and equitable” in all the circumstances.
In support of her application, the wife relies on the following documents:
i)an affidavit of herself filed on 28 August 2009;
ii)a statement of her financial circumstances filed 28 August 2009.
The husband is the respondent to the application. He has not formally amended his response filed on 18 June 2008. His response indicates that he too seeks a just and equitable division of the parties’ matrimonial property, being 50 per cent thereof to him and 50 per cent to the wife. In support of his application, he relies upon the following documents:
i)an affidavit of himself filed 15 September 2009;
ii)a statement of his financial circumstances filed 15 September 2009.
The Evidence
The parties have both independently expressed a wish to settle these proceedings and indeed the court has been told that the matter has been resolved on at least two separate occasions. The fact that the case remains unresolved is testament to the intensity of the conflict between the parties.
The parties separated in unhappy circumstances. One of the consequences of their separation has been a period of financial privation for each of them. In the period since May 2008, each perceives that the other has been jockeying for advantage over him or her. Accordingly, it is hardly surprising that the parties are not well disposed to one another.
The husband asserts that the wife concocted allegations of violence against him to frustrate his ongoing relationship with [X] and [Y]. The wife portrays the husband as a martinet, when it comes to domestic matters. On the other hand, the husband portrays the wife as slovenly as far as housework is concerned. Currently, neither party can say anything particularly positive about the other.
The husband portrays the wife as an avaricious and selfish spendthrift, who had no compunction in diverting marital resources to supply her own shallow needs. On the other hand, he paints himself as trusting of the wife in her management of their joint financial affairs, whilst she was happy to pull the wool over his eyes.
On the other hand, the wife portrays herself as trapped in an unhappy marriage, with an insensitive and domineering partner. She paints herself as a person who, although she liked nice things for herself, spent within normal limits and who concealed nothing from the husband, who was always able to inspect the parties’ financial records, if he so chose.
Proceedings between former marital partners invariably evoke strong emotions, particularly where one party feels hard done by as a result of the circumstances surrounding the end of that marriage. Such emotions are likely to inform how parties recollect past events and, when those events need to be reconstructed, for the sake of adversarial proceedings such as these, it is only to be expected that such a subsequent reconstruction should favour the party making it.
In this case, both parties currently view the other through a distorting prism of hostility. As such, both have, I think, followed the natural human tendency, in proceedings such as these, to minimise their own failings and maximise those of the other.
For the same reason, both have maximised the extent of their respective contributions and minimised those of the other. This is particularly so in respect of the issue of domestic contributions.
Neither party seemed to me to have any great financial acumen. As such, there is not a wealth of financial documents available in this case and, as such, an exact reconstruction or reconciliation of their financial affairs is impossible. This is particularly so in respect of issues to do with the husband’s alleged superior initial financial contribution and the exact extent of the bequests made to him.
For those reasons, it is inevitable that both parties have reconstructed parts of their marital history and placed undue emphasis on matters, which are likely to be of assistance to them in the ultimate outcome of the case. This is understandable given the significance of it to both parties. The proceedings were bitterly contested and there is currently no love lost between them.
Whether those reconstructions were conscious or unconscious is difficult to say, in the absence of corroborating evidence. However, I have little confidence in either parties’ capacity to provide a completely objective recollection of what occurred between them.
Both the husband and the wife are attractive people. Both of them have been interested in personal physical fitness and both seem to take a pride in their appearance. The husband conceded that he took pride and gained pleasure in his wife’s presentation to the world at large. Given this state of affairs, it seems somewhat naïve, on his part, that he did not assume her efforts did not entail some level of cost.
In addition, when it has suited each of them, both the husband and wife have been able to embark on expenditure which appealed to him or her. The parties’ line of credit was extended on two separate occasions so that each party could have a new motor vehicle with trimmings, such as mag wheels. The wife relies on this incident as an example of the “pot calling the kettle black”.
Pursuant to section 140 of the Evidence Act1995 (Cth) the standard of proof to be applied in this case is the balance of probabilities. As a result of section 140(2), without limiting the matters which the court can take into account in determining whether it is satisfied regarding any particular matter on such a balance, the court may also take into account the following:
“(a) the nature of the cause of action or defence; and
(b) the nature of the subject-matter of the proceedings; and
(c) the gravity of the matters alleged.”
In this case, I believe it would be imprudent of me to determine issues of fact on the basis of my assessment of the respective credibility of each of the parties alone. Essentially determining that one party is more likely to be truthful than the other and therefore resolve all factual issues in dispute in favour of that party. In my view, the evidentiary topography, in this case, is more complex than that.
In what follows, I will attempt to analyse the evidence relating to the various factual issues in dispute and, if I can, make findings on the balance of probabilities.
a) Basic chronology
The husband was born [in] 1972. The wife was born [in] 1974. The parties met in 1990, when the wife was 16 and the husband was 18.
Mr Slade started work at [E], at around the same time.
The parties began as girlfriend/boyfriend, in their late teens, and began to live together in 1997, a bit over two years prior to their marriage in October of 1999.
Accordingly, the parties met when both were very young. Whether they pursued other relationships, after they first met, is unclear to me. However, the impression I have is that the parties have been closely involved with one another for many years.
b) Initial contributions and the purchase of the Property W property
It is common ground between the parties that, following their cohabitation, they jointly purchased the former family home situated at Property W for the sum of $128,000.00, in July of 1997. It is also common ground that, of this sum, $110,000.00 was borrowed from the Adelaide Bank.
At the time of the purchase, the husband had been employed by [E] for around seven years. I have not been advised what his base level of remuneration was, but it is his evidence that, in the period leading up to the purchase of the property, he worked over time so that the necessary deposit, which he asserts was $23,000.00, could be saved.
It also seems to be the case that the wife was employed in the period leading up to the purchase of the property. I have not been advised when precisely she joined the workforce. However, the husband acknowledges that, up until December of 2000, she was employed, on a full-time basis, [in the Administrative Industry]. She deposes that she was earning around $450.00 per week, when this employment ceased.
In these circumstances, the wife contends that she contributed towards the acquisition of the necessary savings, which were essential to enable the purchase of the Property W property. The husband does not agree, asserting that the wife “always spent [her] money on luxury items and refused to work any overtime...” [15]
[15] See husband’s affidavit at paragraph 27.
By 1997, the relationship between the parties seems to have been a committed one for some time. Without doubt, they socialised and made plans together. This, it seems to me more likely than not, entailed some joining of their mutual finances together. The husband bought items for the wife and vice versa.
Perhaps the husband was more sensible and disciplined about money – certainly he presents himself as such – but given the strength of the relationship between the parties, it seems to be artificial to talk of “the husband’s money” and “the wife’s money” in this period of 1997.
Although, given her age at the time and her personal disposition, it seems likely that the wife did spend some of her income on “luxury items” for herself, she did so without apparent demur from the husband.
It also seems to me to be inherently unlikely that the entirety of her wage was so spent and more likely that at least some of it was funnelled back into the parties’ joint plans to buy (and furnish) a home together.
At this juncture, I do not understand it to be the husband’s case that the plan to purchase the Property W property was his alone. His relationship with the wife was integral to the purchase, as is reflected in the fact that the property was registered in joint names and the mortgage related to it was a joint liability.
I accept that, in the period leading up the purchase of the Property W property, the husband earned more than the wife did. It also seems more likely than not that he undertook more overtime. The nature of his employment is one which readily lends itself to overtime.
However, notwithstanding these findings, for the reasons already provided, I find it difficult to accept that the difference between the amount advanced by the Adelaide Bank and the purchase price of the property concerned was supplied by the husband’s sole efforts alone.
If it was, it seems to me to be likely that the wife necessarily made significant contributions towards readying the home for the parties’ mutual occupation.
In Pierce & Pierce,[16] Ellis, Baker & O’Ryan JJ made reference to several of the relevant authorities concerning initial contributions. Their Honours said as follows:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight should be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions both of the husband and the wife. In considering the weight to be attached to the initial contribution, in this case the husband, regard must be had to the use made by the parties of that contribution.”
“…there is no principle that the length of the marriage leads to a likelihood that other contributions will outweigh or weigh equally with ‘a particular contribution’. It is a matter of assessing the contributions of all relevant kinds in each case to arrive at an outcome, which is both appropriate and just and equitable. In some cases particular contributions may be outweighed or equalled by other ones. In other cases particular contributions may be so disproportionate to other contributions as to merit special recognition.”
[16] Pierce & Pierce (1999) FLC 92-844 at page 85,811
The evidence is clear to me that both parties entered their relationship and subsequent marriage in good faith. The intended it to be a marriage of equals. Subsequently, they had two children together. Whatever their mutual criticisms regarding their respective homemaking endeavours, it seems that both were integrally involved in parenting [X] and [Y].
Given this state of affairs and given the ambivalence of the evidence regarding the precise provenance of the deposit which was used to purchase the Property W property in the first place, I do not think that the evidence can sustain the husband’s contention that his self-declared superiority in savings should be given special recognition in this particular case, certainly not in the exact arithmetical sense, which the husband contends.
c) The Issue of the Bequests to the Husband
The parties are in dispute about the exact extent of the moneys involved in the bequests made to the husband and what was the intention of the person who made the actual bequests involved. There is a lack of documentary evidence in respect of the first issue and the only evidence in respect of the issues comes from the parties themselves, who are unlikely to be completely objective about it.
The wife concedes that the husband did receive a bequest of $10,000.00, from his grandmother’s estate. This payment is proved by a letter from solicitors dated 23 January 2001.[17] The letter concerned speaks of a specific legacy of $10,000.00. No further sum is indicated.
[17] See exhibit PS5 to the husband’s affidavit filed 15 September 2009
It is Mr Slade’s evidence that his father subsequently provided him with a further sum of $15,000.00 from his (Mr S Senior) portion of the estate. In this regard, the husband is able to provide a copy from his father’s bank account for March 2001 but did not call any evidence from Mr S Senior himself.
I accept that the payment was made. The wife’s contention is that her father-in-law intended to benefit the family, including herself, generally. This does not appear to be inherently unlikely, given that [X] had only recently been born.
It is very often difficult, in hindsight, to glean what was the actual intention of the donor of a gift made in the context of a marriage, where the donor has blood ties to one of the parties to that marriage. The usual rule is that where the intention is unclear, the court should look to any special relationship between the donor concerned and one of the spouses and regard the gift as having been contributed by that party.[18]
[18] See Kessey & Kessey (1994) FLC 92-495 at 81, 149
On balance, it would seem more likely than not that Mr Slade’s late grandmother intended to benefit her grandson by her bequest. The issue is more complicated where Mr S Senior is concerned, particularly as he has not been called to give evidence in these proceedings.
However, as Chisholm J remarked in Pellegrino & Pellegrino,[19] it is frequently the case that, when parents make a provision involving one of their married children, they do not specifically formulate whether they intend to benefit their own child or both of the parties to the marriage concerned. In addition, it is invariably the case that a gift, in any event, results in some benefit to both of the parties to the marriage concerned.
[19] Pellegrino & Pellegrino (1997) FLC 92-789
In this particular case, the husband cannot recall precisely what was done with the sums involved. It seems to be the case that they were paid into joint matrimonial resources and allocated to inchoate joint expenditure. This is not surprising, given the extent of the sums involved.
In the context of this case, I am content to follow the normal rule to treat the provision of the sum of $25,000.00 as a contribution made on behalf of the husband, whose grandmother and father respectively made the donations involved. This is not a case where the gift concerned appears to have been made “in recognition for some service made to [either the grandmother or Mr S Senior] jointly by the parties.”[20]
[20] See Pellegrino & Pellegrino (supra) at 84, 278
However, once again, in the context of an assessment of the parties’ other various contributions during the marriage, the donations involved are not of such magnitude that they should be taken into account in strict arithmetical terms, as counsel for the husband contends.
I reach this conclusion because of the amounts of the donations involved and because the husband is not able to establish that the gifts resulted in the acquisition of specific assets, which can now be quarantined from the parties’ general pool of assets and contributions application to their acquisition assessed individually.
There is a dispute between the parties regarding the third alleged legacy of $8,000.00. The husband is not able to produce any collateral evidence to support his assertion that the gift was made. In these circumstances, I am unable to establish that the gift was made.
d) Parenting and homemaking contributions
The parties have very different views regarding the carrying out of homemaking responsibilities during their marriage. In particular, the husband refutes the suggestion that the parties divided their family responsibilities along what are usually characterised as “conventional” lines, he being the family’s main financial provider, whilst chipping in with outdoor maintenance on weekends and some parenting responsibilities, when he was not otherwise at work but leaving the vast preponderance of homemaking and parenting duties with the wife, particularly whilst she was not part of the paid workforce.
The wife’s case is that she attended to all of the daily needs of the children; prepared all meals in the household; did all the necessary cleaning and daily maintenance; attended to the administrative tasks relating to the running of the parties’ household; and was responsible for the family’s dog. It is also her case that she played an integral role in renovations undertaken in respect of the Property W property, including repainting it and erecting a garage there.
On the other hand, the husband asserts that the wife was reluctant to complete any indoor task, unless it was absolutely necessary. He asserts that the sink was always full of dishes and the laundry was seldom done. As such, he was required to attend to these tasks. He further refutes any suggestion that the wife had anything to do with the care of the family’s pet dog.
In addition, it is a major plank of the husband’s case that the wife was grossly negligent in the manner in which she administered the family’s finances, leading to frequent levies being imposed in respect of the late payment of bills relating to the provision of credit and other services.
On the other hand, it is the wife’s position that the husband, due to his obsessive interest in body building was frequently absent from the family home. It is also her case that he used steroids, during the marriage, which rendered him aggressive and difficult to live with.
The husband does not accept his portrayal as an abusive and difficult spouse. He acknowledges some use of steroids but deposes that the wife also used drugs in connection with her gym programs. In any event, the husband asserts that he ceased his steroid use some years ago now.
There is no evidence, apart from each party’s assertion of the fact, to support his or her case in respect of the nature of the parties’ respective homemaking contributions or lack thereof. Disputes of this kind are common in vitriolic proceedings, between former partners, regarding the division of matrimonial property. Given the private nature of most marriages, these disputes are very often difficult, if not impossible, for the court to resolve.
Although the husband has many and varied criticisms of the wife, he does not suggest anything other than that she was a loving and caring parent. If he has any criticisms of the wife it is that she was too indulgent with the children. In any event, there is no evidence to indicate anything other than that [X] and [Y] are properly parented children, who enjoyed comfortable lives during the time their parents lived together.
Given that the husband has been more involved in the paid workforce than the wife, it seems a logical inference for the court to draw that more of the parenting responsibilities for [X] and [Y] have devolved upon the wife than the husband and she has discharged these responsibilities properly.
The impression I have is that the parties’ marriage was often a turbulent one, which was also periodically deeply unhappy. Both parties seem to be more than capable of some level of selfish behaviour, which the other resented. I suspect that this is the nature of many marriages.
However, I do not believe it is possible for me to reach the conclusion that one party was “a passenger”, whilst the other did all the work. It seems to me more likely that both parties contributed a great deal to the marriage, albeit probably in different ways and forms, given that they are likely to have different temperaments and priorities as to what was important for the family.
e) Financial Contributions
Clearly the husband has been the family’s main financial provider during the parties’ marriage. I accept his work, as a [omitted], was often both arduous and dangerous. It also required him to work overtime regularly. There is no evidence to indicate anything other than that he contributed his wages to joint matrimonial purposes. I accept his case that he was a good financial provider.
The wife left the paid workforce shortly prior to [X]’s birth. It seems to have been a joint decision of the parties that she would remain out of the workforce, whilst the parties’ children were in early infancy. She returned to the workforce briefly, in around 2005, when she worked [in the Retail Industry].
The husband’s case is that the wife utilised all her wages, during this period, for her own purposes. The wife contends otherwise, asserting that she went to work to augment the family’s income and so that the children could be better provided for.
I am unable to resolve the specific truth or otherwise of these assertions. Rather, I prefer to deal with the issues, more generally, under subsequent headings dealing with the issue of financial waste, during the marriage and the circumstances surrounding the acquisition of the wife’s Coles/Myer credit card.
f) Waste
The husband’s case is that the wife had “unfettered access and control” of the parties’ visa card and the line of credit associated with the Property W property.[21] He deposes that it was his understanding, given his level of remuneration, that the parties’ mortgage would be regularly paid by the wife and so would be gradually and inexorably reduced.
[21] See husband’s affidavit filed 15 September 2009 at paragraph 15.
In this context, the husband has deposed as to his bemusement at the failure of the mortgage to reduce and the fact that the parties’ credit card was not periodically reduced to a nil balance, as he thought should occur.
Implicit, in the husband’s evidence, is a recognition of the fact that he had some knowledge of the parties’ financial affairs. The wife’s evidence, which I accept, is that she kept the parties’ various accounts, including statements in respect of the parties’ credit card, mortgage and line of credit, in a folder, which the husband consulted, as did she.
It is her case that the husband was frequently critical of her level of expenditure. This statement rings true to me. However, it is her case that he never did anything of a concrete nature to take over management of the parties’ financial affairs, such as insuring a direct payment of some element of his salary in respect of the mortgage or curtailing, in some way, the wife’s use of the parties’ joint credit card.
Although I accept that the husband was and is critical of many aspects of the wife’s financial activities, particularly her level of discretionary spending, the impression I have is that he is attempting to allocate fault and responsibility, for that spending, some considerable period of time after the event and absolve himself of any responsibility for his acquiescence, either actual or tacit, in that expenditure.
As I have previously observed, I have no doubt that the wife takes a pride in her appearance and likes to buy nice things for herself and the children. The husband frankly conceded that he took some pride and pleasure in his wife’s appearance.
However, the essence of the husband’s case is that the wife went beyond what was reasonable and effectively concealed her various excessive purchases from him. In general terms, I find this difficult to accept, given that the two shared a bedroom in a suburban home and the husband had untrammelled access to the parties’ various statements and accounts.
In addition, the husband knew, in general terms, what amount of money was coming into the household, on a weekly basis, as he largely contributed this sum. He does not seem to me to be a financial naïf, so far as his appreciation of the cost of things.
In such circumstances, it seems to me to be implausible that he did not know, at least in general terms, what the wife was spending and, although he may have been frequently annoyed at this expenditure, he did little, in practical terms, to curtail it. Accordingly, he cannot now absolve himself of all responsibility for it.
It is not my role to express opinions regarding the propriety of such things as solarium visits; tummy tucks; and the purchase of shoes, handbags and clothes. It is beyond the scope of these proceedings to account for the unreasonableness of any of these purchases, on an individual or “line by line” basis, even if the evidence in respect of each such purchase was available, which it is not.
The sad fact is that both parties must bear some responsibility for living beyond their means, during their marriage. It is a human characteristic to look for someone to blame, at a marriage’s end, when the realisation becomes crystallised that one’s financial circumstances are not what one would have wished. I believe that the husband has succumbed to this natural and understandable impulse.
The husband makes specific complaints, regarding the wife withdrawing $5,500.00 between February 2006 and December 2007. He claims that he became aware of these withdrawals, only after separation. For reasons already provided, I find it difficult to accept that this is the case.
In addition, although the sums are significant, the husband has only his suspicions as to what became of the money. He cannot point to its use in any specific purchase or say that it was wasted in say gambling or some other wanton manner.
The Full Court of the Family Court[22] has identified three areas where it is appropriate to notionally “add back”, into a pool of matrimonial property, assets which do not exist or cannot be proved to be still existing. The circumstances are as follows:
·Where matrimonial assets have been utilised to pay the parties’ legal fees, thus diminishing the pool of assets available to be distributed between them and so creating a situation where the normal rule whereby each party should bear his or her own costs is defeated.[23]
·Where there has been a premature distribution of matrimonial assets.[24]
·Where one of the parties has embarked on a course of conduct, either recklessly or with the direct intent to reduce or minimise the effective value of some item of matrimonial property.[25]
[22] See AJO v GRO (2005) 33 Fam LR 134 at 144
[23] See In the Marriage of DJM and JLM (1998) 23 Fam LR 396
[24] See In the Marriage of Townsend (1994) 18 Fam LR 505
[25] See In the Marriage of Kowaliw (1981) FLC 91-092 at 76,644
In regards to the third of these categories, it has been pointed out by the Full Court that this principle represents a guideline for the court rather than a fixed code, bearing in mind the discretionary nature of the jurisdiction created by section 79 of the Family Law Act.[26]
[26] See In the marriage of Browne & Green (1999) 25 Fam LR 482
I accept that the wife did purchase items for herself, which pleased her and which many would regard as self-indulgent fripperies. However, it is a long way from that to the court making a specific finding that she has embarked on a course of conduct designed to reduce or minimise the effective value or worth of items of matrimonial property in the sense envisaged by Baker J in Kowaliw or has recklessly done so. Rather, it seems more likely than not that the purchases have mounted up, little by little, and neither she nor the husband has been inclined to take positive steps to limit her conduct.
I accept that, at this juncture, the husband is somewhat resentful about what he views as the wife’s financial profligacy. However, it is a considerable extension from that for the court to make a finding that the wife’s behaviour amounts to a “negative contribution” or that it should attempt to make some calculation, as to a sum, which should be notionally added back into the parties’ pool of assets, to compensate the husband for this conduct.
In my view, it would not be just and equitable for the court to consider either course in these proceedings. This is particularly so given that the full court has generally not been supportive of the notion of any such “negative contributions”.[27]
[27] See In the marriage of Spiteri (2005) 33 Fam LR 109 at 119.
g) The wife’s Coles Myer credit card
The wife acknowledges that she applied for the Coles Myer credit card, when she obtained work, [in the Retail Industry], at sometime in 2005. There was apparently some “tie-in” between her employment and the offer of the card, which she accepted. The card was in the wife’s sole name and had an initial credit limit of $5,000.00.
It is the husband’s position that he knew nothing about the card, until after the parties separated and it was used to purchase items for the wife’s exclusive use. As such, the debt relating to the card should be regarded, by the court, as the wife’s liability alone.
On the other hand, the wife contends that the card was no secret and while some of the purchases reflect items for her use, she also purchased things for the children with the card and, in any event, the purchases concerned were not unreasonable, in the context of the parties’ accepted lifestyle.
Although the card may not have been a secret, as such, it does not seem to me that its acquisition was an expressly joint one. The wife decided to get a job to earn a little extra money and the credit card was a fringe benefit of that.
As such, I do not think that the credit card can be categorised as some sort of financial conspiracy created by the wife against the husband. Rather, it was incidental to her decision to obtain part-time employment, which no doubt the husband welcomed.
I have been provided with copies of the statement, for the card, from December 2005 to April 2008.[28] The first statement shows a balance owing of $895.66. As previously indicated, it is impossible to categorise the purchases “line by line” into what is reasonable and what is not.
[28] See annexure KS21 to the wife’s affidavit filed 28 August 2009.
It is not my function to be an auditor of the financial proprieties of the purchases in question. Some however can be obviously categorised as “feminine” and some apparently relate to the purchase of children’s apparel.
What the statements show is a steady balance of around $1,000.00 to $1,300.00 owing, until mid 2007. Moderate interest is changed on this balance but a regular credit payment is also made, which maintains a state of financial stasis.
Thereafter, the amount owing inexorably rises in gradual increments. Credit payments become less frequent and smaller and accordingly the amount of interest levied inevitably increases. None of the purchases are for dramatic amounts, the biggest being for around $300.00.
The amount owing on the card gradually increases until, on 27 April 2008, $5,332.87 is owing. Nothing had been paid against the previous opening balance and interest of $87.96 was levied. It is interesting to note that the credit limit on the card was increased from $5,000.00 to $9,000.00 in the period to which the statement relates, which coincides with the liability reaching the level of $5,000.00.
Without wishing to be so but inevitably appearing sanctimonious, the statements are a lesson in how not to use a credit card efficiently and of the pitfalls of a too ready access to consumer credit.
It seems probable that, at least in part, the fact of the card moving into dereliction coincided with the cessation of the wife’s employment. Clearly, she lacked the financial discipline to moderate her level of purchases, following the reduction in her level of income. It also seems likely that she did not confide in the husband about the ever-growing burden of debt, in the hope that something would turn up in time.
For his part, the husband kept his head in the sand regarding the family’s lifestyle, particularly how the wife dressed herself. In his own words, he acknowledges that “… part of me just did not want to know.”
The use of the credit card, by the wife and the parties’ financial life generally are a modern example of the so‑called “Micawber Principle”, where the famous character in David Copperfield observes as follows:
“Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”
In my view, the wife’s credit card debt is symptomatic of how the parties led their lives financially, during their marriage. Regrettably, their expenditure regularly exceeded their income. In my view, it is fatuous to assign fault for this state of affairs to one spouse alone, either totally or in part.
Both parties enjoyed the lifestyle, which they led. The husband concedes that he was in a state of denial in respect of many aspects of it. In these circumstances, as it was incurred during the course of the parties’ marriage, I propose to include the wife’s credit card debt as a joint liability of the parties.
h) Post‑Separation Contributions
The parties’ separation inaugurated a period of financial austerity for them each. Although [X] and [Y] have been attending school, the wife has been disinclined to extend her hours of employment, a matter which has irked the husband.
The wife has been able to remain in occupation of the Property W property. The husband met the recurrent mortgage payments until the early part of 2009, as well as some of the utility payments. Thereafter, he has stopped payment, claiming straightened financial circumstances, something which the wife does not accept.
The husband has continued his employment with [E]. As previously indicated, he has been assessed to pay child support for [X] and [Y]. In addition, I accept that he has paid one half of the children’s school fees to attend [S] School.[29] Accordingly, I do not think that it can be said that Mr Slade has abrogated his financial responsibility for the two children concerned.
[29] See annexure PS11 to the husband’s affidavit filed 15 September 2009.
I accept that it is expensive for the children to attend [S] School, particularly because of the expense of their necessary uniforms and involvement with sport and other extramural activities. Given the acrimony of the parties’ separation, the responsibility for these expenses has fallen more on the wife than the husband, who contends that such incidental expenses, are covered by child support.
However, I do not think that it can be said that the husband is enjoying a significantly superior standard of living to the wife. He is living with his father. I accept that he makes a significant contribution towards the cost of running his father’s household and it cannot be said that he is living a subsidised life. Rather, I accept that he is living with his father through financial necessity. It must be galling, for a person of
Mr Slade’s age, to be forced to return to live with one of his parents.
Accordingly, in the period post‑separation, I do not think that it can be said that one party’s contributions significantly outweigh the other. In the vernacular, “both have been doing it tough”. In these circumstances, I can well understand why the husband would feel it appropriate that the wife should attempt to work longer hours, given the parties’ changed financial circumstances.
Step 1 – the pool of assets
In the circumstances of this case, I propose to place the parties’ superannuation assets in a separate pool and assess contributions to those items separately. I reach this conclusion because of the significant proportion of the parties’ total assets, in dollar terms, which that superannuation represents and further because the husband commenced acquiring his interest in that superannuation in 1990, which was some years prior to the parties commencing their formal relationship.
For all those reasons, I find that the parties have the following assets and liabilities, which are available to be apportioned between them:
Property $ Property W property – to be sold but worth in the vicinity of $380,000.00 Astra motor vehicle (wife) $6200.00 Ford motor vehicle (husband) $14,600.00 Furniture and effects (husband) $3391.00 Furniture and effects (wife) $4550.00 $408,741.00 Liabilities Mortgage as at 8 July 2009 $40,916.00 Adelaide Bank Line of Credit $25,285.00 JB Hi Fi $778.00 Visa card (join names) $4767.00 Coles Myer credit card (wife) as at separation $5200.00 Total Liabilities $76,946.00 Net Non Superannuation Assets $331,795.00 Superannuation Husband’s superannuation $99,772.00 Wife’s superannuation $13,596.00 Total Superannuation $113,368.00
I appreciate that the figure attributed for net non superannuation assets is somewhat artificial. There is no actual valuation for the Property W property, which the parties agree is to be sold. I hope the property achieves a sum greater on sale than that which is anticipated.
When the property is sold, the mortgage and line of credit will be extinguished. Accordingly, it will be necessary to deal with proceeds of the sale of the property, in the orders which will be made, in generic terms. However, it is useful to fix a figure to ascertain what is the parties’ worth in general terms to assist the court in determining the overall justice and equity of any orders which are made.
Step Two – Assessment of Contributions – Section 79 (4)(a) 2(c)
I now turn to the second of the steps in the exercise under section 79, namely an assessment of the parties’ contributions within the context of section 79(4)(a) to (c). These provisions are as follows:
“Section 79(4) In considering what order (if any) should be made under this section in proceedings with respect to any property of the parties to a marriage or either of them, the court shall take into account –
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of home maker or parent.”
Section 79(4) requires that the court look at the entirety of the contributions, both financial and non-financial, to the welfare of the family, as well as to the acquisition, conservation and improvement of those assets. Contributions are not required to be tied to the acquisition, conservation and improvement of any particular asset and maybe taken into account generally as contributions in a total sense.
The task required of me pursuant to section 79(4) of the Family Law Act thus is to weigh and assess the disparate contributions of the parties to arrive at an outcome, which is both appropriate and just and equitable in all the circumstances. Contributions, which are different in quality and nature, must be compared. The exercise is not purely an arithmetical or accounting one.
The relationship and subsequent marriage between the parties was one of around eleven years in duration, a significant period of time. It produced two children. The parties undoubtedly loved each other, when they married and wanted to raise children together, which they did shortly after their marriage. As such, they wanted their marriage to be a successful and abiding one.
Accordingly, I find that the marriage between the parties was one of equals, in which they elected to share the benefits and pitfalls which might befall them during it. The parties’ marriage was, in every sense, a joint endeavour.
Sadly, and perhaps inevitably, the end of the marriage leaves each of the parties with a sour taste in the mouth. In particular, the husband asserts that, during the marriage, the wife symbolically disembarked from the parties’ shared matrimonial vessel and elected to navigate on her own. As such, she should bear responsibility for such solo voyaging.
I use this nautical metaphor because of what was said by the Full Court in D:
“By and large, marriage is a joint venture where parties can expect to buffer each other from the winds of misfortune that blow during the course of their relationship. The degree of the buffer may depend on how much individual sailing they do without consultation or indeed contrary to the wishes of the other. But there can be no certain answer to how much that should be when applying s.79 principles.”[30]
[30] D & D [2003] FamCA 473 at paragraph 49
For the reasons already provided, I do not accept that the wife’s consumer spending, during the marriage, should be regarded as being tantamount to waste or some form of “solo sailing” on her part, leading to an inevitable diminution in the assessment of her contributions during the marriage. The husband himself was not adverse to accessing credit for items which appealed to him, as his purchase of his current vehicle demonstrates.
In addition, the wife, in my opinion, did not resort to any direct form of deceit or subterfuge in her spending. The husband had access to the vast majority of the parties’ financial records and must have been aware, in general terms, of the nature of the wife’s expenditure, which was part of the parties’ shared lifestyle. As the husband somewhat plaintively puts it, he chose to ignore what was happening in the parties’ finances.
Without any doubt, the husband’s exertions in the work force were the main source of the parties’ financial support and the chief means by which their comfortable consumer lifestyle was maintained. Clearly, the husband deserves significant recognition for this state of affairs, which should also recognise the moneys resulting from the bequests and gifts made to him.
On the other hand, I find that the wife has also made significant contributions, during the marriage, as both a homemaker and a parent, notwithstanding the husband’s trenchant criticisms of her. The difficultly provided by the case is how the husband’s superior financial contributions are to be balanced against the significant contributions, which the wife has made, which have not of themselves directly resulted in the acquisition of assets.
It is a difficulty to which I have already alluded in that, pursuant to the section 79 exercise, the court is often called to compare fundamentally different things. In Ferraro, the Full Court of the Family Court noted as follows:
“The task of evaluating and comparing the parties’ respective contributions where one party has exclusively been the breadwinner and the other exclusively the homemaker, is a most difficult one to perform because the evaluation and comparison cannot be conducted on a “level playing field”. Firstly, it involves making a crucial comparison between fundamentally different activities, and a comparison between contributions to property and contributions to the welfare of the family. Secondly, whilst a breadwinner contribution can be objectively assessed by reference to such things as that party’s employment record, income and the value of the assets acquired, an assessment of the quality of a homemaker contribution to the family is vulnerable to subjective value judgments as to what constitutes a competent homemaker and parent and can not be readily equated to the value of assets acquired. This leads to a tendency to undervalue the homemaker role”[31]
[31] Ferraro & Ferraro (1992) 16 Fam LR 1 at 38
Although the husband, in the battleground provided by these proceedings, has found much to be critical of in the wife’s performance in the home (and she of him), I believe that I must be careful not to under value the wife’s parenting and homemaker role. On the other hand, it may potentially lead to injustice if, in a similar fashion, I overlook or downplay the husband’s significant financial contributions.
Bearing these various matters in mind, I have come to the conclusion that the husband’s overall contributions, particularly because of the legacy and gift which he received in 2001, are modestly more than the overall contributions of the wife.
I would assess them as being 47/53 per cent in favour of the husband, so far as the parties’ non-superannuation assets are concerned. These assessments are not altered by virtue of anything, which has occurred following the parties’ separation.
In my view, the situation is not significantly different so far as the parties’ superannuation is concerned. The major difference is that the husband had been a member of his superannuation scheme since 1990 and accordingly began making contributions towards it some years prior to the parties commencing their formal relationship.
However, I have not been advised of the specific characteristics of the fund concerned. I would imagine that, in the initial period of his membership of the applicable fund, Mr Slade’s contributions towards it were modest, given that his income was likely to have been fairly low, particularly whilst he was a trainee.
For her part, the wife has modest superannuation. No doubt this is reflective of the fact that she has been absent from the paid workforce for a significant period of time and when she has worked has been employed in modestly remunerated positions.
One of the consequences of the parties’ decision to have children and for the wife to leave the workforce was that she lost the capacity to make personal revision for her retirement through the accumulation of superannuation.
In all the circumstances of this case, I am unable to assess whether
Mr Slade had any significant amounts of superannuation, when the parties began their relationship. In any event, given that his superannuation is not held in a strictly base accumulation fund, and has been subject to formulaic valuation, it seems likely that his years of employment are a factor in the current value of his fund. In all these circumstances, I would assess the parties’ various contributions towards the accumulation of their total superannuation as being equal.
Step 3 - Section 75 (2) factors - the prospective needs of the parties
I am now required to consider the various matters set out in section 75(2) and in particular to consider whether any further adjustment should be made in favour of either party. The section 75(2) factors are as follows:
(a) the age and state of health of each of the parties;
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
(d) commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
(ii)a child or another person that the party has a duty to maintain;
(e) the responsibilities of either party to support any other person;
(f) subject to subsection (3) the eligibility of either party for a pension, allowance or benefit under -
(i)any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia,
and the rate of any such pension, allowance or benefit being paid to either party;
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain adequate income;
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
(l)the need to protect a party who wishes to continue that party’s role as a parent;
(m)if either party is cohabiting with another person – the financial circumstances relating to the cohabitation;
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party;
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any other fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties.
I do not believe that the division of the parties’ matrimonial property, which will follow from the orders made by the court, will effect the earning capacity of either the husband or the wife [section 79(4)(d)].
The parties are each in their mid 30s and both enjoy robust good health. Accordingly, both have many productive years before them, in which to repair their respective financial fortunes.
The husband is a skilled [omitted], who works in a potentially dangerous but essential industry. He earns a salary commensurate with his skills and the risks involved. The nature of his work allows him a significant level of overtime and shift allowances. As such, he has the capacity to earn around $80,000.00 per annum. Barring unforeseen circumstances, he is likely to remain so employed for the indefinite future.
The most valuable “asset”, which a party can take out of a marriage, is a substantial and reliable income earning capacity.[32] In this case, I am satisfied that the husband has such a capacity.
[32] See Clauson & Clauson (1995) FLC 92-598 at 81, 911
The wife has no specific skills of which to speak. Prior to marriage, she held a [administrative role]. During the marriage and afterwards, she has been [employed in the Retail and Childcare Industries].
Although these occupations are important, they are not well paid and are very often the domain of part-time workers. Accordingly, it seems likely that the wife’s level of remuneration, in the paid workforce, will remain significantly much less than that of the husband. This is a factor, which favours the wife to a marked degree [section 75(2)(b)].
However, in the context of the parties’ current circumstances, it seems neither unreasonable nor unfair for the husband to have an expectation that the wife will undertake more hours of paid employment than she currently does, particularly while she aspires to the children having a privately funded education.
One of the employment phenomena of recent times in Australia is the growing participation of women in the workforce, very often on a less than full-time basis. The financial pressures implicit in an ever increasingly consumerist society have meant that a family with only one parent in the workforce is becoming rarer in Australian society, whereas some decades ago it was seen as more of the norm.
This is particularly so in families where the children concerned are of school age. Necessarily, it must also be common in separated families, where financial necessity drives parents back to the workforce following marriage breakdown. For obvious reasons, two family units cannot live as cheaply as one previously did, where resources, particularly accommodation, were shared.
I appreciate that the wife wishes to continue and enhance her role as a parent to [X] and [Y] [section 75(2)(l)]. But this may be something which the parties cannot afford, particularly if the wife wishes to enjoy the lifestyle, which she and the family have had, prior to separation. After all, it is a significant part of the wife’s case that she cannot afford the costs of keeping [X] and [Y] at their current school.
In my assessment, the wife is currently under utilising her income earning capacity, particularly whilst the parties’ children are at school. I have no knowledge of what effect an increase in her wages may have on her entitlements to social security but this is a factor which the applicable legislation requires me to disregard [section 75(3)].
In my view, the wife is likely to be readily employable, in the workforce, albeit on an unskilled basis. Certainly, she has a capacity to work more than 12 hours per fortnight to assist in her and the children’s financial support.
However, I also accept that the wife’s primary responsibility to provide care for [X] and [Y] must inevitably impact upon the wife’s capacity to earn an income [section 75(2)(c)]. This factor, in association with the discrepancy in the parties’ level of income, is the factor which most favours the wife.
The wife will be the parent, who is mainly responsible for providing care for [X] aged nine and [Y], aged six. Given their ages, the children will be highly dependent upon their mother. She will bear the burden of delivering and collecting them to and from school; making arrangements for their care before and after school, if she is working; and tending to them in the event that either is ill. These responsibilities, relating to a child’s health, education socialisation and general wellbeing have been described as “myriad”.[33]
[33] See Collins & Collins, (1990) FLC 92-149 at 78, 043-8.
Inevitably, these responsibilities will impact on the hours of paid work which the wife can take on, in future and so have implications for her prospects of promotion. I appreciate that, in this day and age, these difficulties confront many working parents, who must rely on either relatives or paid workers to assist in caring for their children before and after school and during school holidays. I also appreciate that there are many schools of thought regarding the benefits and deficits of such arrangements.
However, the fact that Ms Slade will carry out most of the parenting responsibilities for [X] and [Y], must inevitably have an impact on her financial “bottom-line” and is a factor which I must be careful not to underestimate.
The wife, of course, does not bear the financial responsibility for maintaining the children alone. She is and will remain entitled to claim child support, from the husband, as indeed she has done. However, it must not be forgotten that the payment of child support, in no way compensates the principal care providing parent for the loss of career opportunity and the inevitable restrictions upon working hours and choice of work, which the obligation to care for children entails.[34]
[34] See Clausen (Supra) at 81, 911
The husband is a PAYG tax payer. He works for a public authority. So far as the Child Support Agency is concerned, there is no controversy about his level of remuneration, which is readily amenable to the application of the relevant child support formula, which is based on the actual costs of supporting children.
Accordingly, it seems to me that Mr Slade will contribute a significant proportion of his income, by way of child support, to the wife for [X] and [Y]. In my assessment, he has been a reliable payer of child support, in the period since the parties separated and is likely to remain so.
The weight to be attached to a child support assessment will vary in the circumstances of each particular case concerned. The court is directed to look at the amount of the assessment, the financial circumstances of each of the parties, the needs of the children concerned and whether child support is likely to be paid regularly and at an adequate rate in future.[35]
[35] See Clauson (supra) at 81,911
Accordingly, I do not think that this is the type of case where the wife should be entitled to a greater proportion of the parties’ accrued marital capital because the husband will attempt to evade his financial responsibilities towards the parties’ children in future, either by concealing income or failing to undertake appropriate types of employment. Rather, for the foreseeable future, [X] and [Y] (and so the wife herself) are likely to benefit from the husband’s continuing secure employment [section 75(2)(na)].
Both parties are many years from retirement. Accordingly, neither has placed any emphasis on retirement planning in the conduct of their respective cases.
It is the wife’s preference that she receives whatever property is allocated to her, following these proceedings, in the form of immediately realisable assets. As such, she does not seek a splitting order, in respect of the husband’s superannuation, which was initially far greater than her superannuation.
It is clearly not the husband’s preference to remain living with his father on an indefinite basis. He, like the wife, would seek to have sufficient funds to access some form of independent accommodation for himself. It seems to be the wife’s position that her and the children’s financial security will be enhanced if she has more cash than superannuation at this stage.
Whether the parties wish to purchase some form of accommodation for each of them is unclear to me. I assume that both do. In this country, investment in the family home is the most common form of wealth accumulation and the means by which individuals seeks to attain financial security. As such, I can well understand why both parties want sufficient funds to be able to purchase some form of accommodation in the short to medium future.
However, notwithstanding these understandable aspirations, I must not overlook the fact that both parties, in the not so distant future, must take steps to provide for their financial security in retirement. This need is likely to be as important for the wife, as it is for the husband. Although, given both parties’ ages and state of health, it cannot be a pressing consideration.
In addition, in my view, the husband is just as entitled as the wife to aspire to having his own accommodation. After all, he has worked for many years to acquire the Property W property and it is reasonable that he should be left with sufficient financial resources to be able to enjoy a comfortable standard of living following the parties’ separation.
I am satisfied that, upon an overall assessment of the applicable section 75(2) factors, a further adjustment in favour of the wife is appropriate. The more difficult aspect of the case is assessing what that further distribution should be, in percentage terms, given the reasonably small extent of the parties’ property pool and what the precise form of the distribution of property should take. These difficulties are compounded by the modest extent of the parties’ property pool, which is unlikely to be sufficient to satisfy the complete needs of both parties.
Accordingly, the proper adjustment, in respect of factors after contribution, often becomes critical in cases such as this one. For these reasons, the Full Court has commented that the centre of gravity, in the determination of property cases, has shifted towards the assessment of section 75(2) factors and, as such, courts such as this one, have been directed to give the provisions concerned “real rather than token weight”.[36]
[36] See Waters & Jurek (1995) FLC 92-635 at 82,376
Like all other factors in this case, the composition of any particular set of orders, in terms of the proportion of non-superannuation as opposed to superannuation assets, which each party ultimately receives and the percentage basis of such awards must be determined by considerations of what is just and equitable in the overall circumstances of the case.
The relevant factors in determining how the mix of assets between parties is made up is likely to include the following:
·the purchase price of appropriate accommodation and rehousing costs for each of the parties concerned;
·the need to provide some form of financial buffer to cover each of the parties concerned in respect of the ordinary exigencies arising from independent living;
·the current level of the parties’ superannuation and any discrepancies thereon;
·the probability of the parties being able to acquire appropriate superannuation benefits from any future income;
·any discrepancies in the income earning capacity of the parties concerned, which will have implications in respect of any capacity to borrow monies in future in order to finance the purchase of future accommodation.[37]
[37] See L & L (2006) FLC 93-254.
After all, the intent of part VIIIB of the Family Law Act 1975, which is the part of the Act dealing with superannuation splitting, was to ensure an equitable division of matrimonial property, which avoided the artificial situation which commonly occurred in the past, whereby one party, usually the husband, had the sole benefit of superannuation, whilst the other party, invariably the wife, was compensated with other assets, which may or may not have had an equal value to the superannuation concerned but who was thus denied the benefit of retirement planning through superannuation.
Now both kinds of assets can be divided by court order, so that a fairer and less anomalous result can be achieved. How the mix between superannuation and non-superannuation assets is to be achieved must depend upon the parties’ overall circumstances and what is just and equitable.
The wife will have the predominant care of the parties’ two children, who are in primary school. Providing for the children in future is likely to become more rather than less onerous, as they each move into their teenage years, at which stage their need for clothing, food, education and other prerequisites of life will become more significant. The wife will assume this burden, albeit whilst in receipt of a reasonable level of child support from the husband, whilst being, at best, a modest income earner.
These factors call for a further distribution of actual property, in the wife’s favour, which should not be token, given the overall pool of actual property, which stands in the realm of around $330,000. I would assess the appropriate adjustment as being in the vicinity of 15 per cent.
Both parties are many years away from retirement and the crystallisation of their respective superannuation interests. Accordingly, in the short term, it will have few implications for the wife’s standard of living, whether she receives further proportion of the husband’s superannuation entitlements or not.
In all the circumstances of this case, I propose to make a more modest allowance, by way of section 75(2) factors in respect of the parties superannuation resources and propose that these be divided 55/45 per cent, in the wife’s favour, at the end of the third stage. The major reason for this adjustment is that the husband will be better placed in the future to provide for his retirement than the wife by dint of his superior income.
Step 4 – Section 79(2) – Is This a Just and Equitable Outcome:
The final step in determining property proceedings is to stand back and consider whether the proposed result represents a just and equitable outcome. Considerations of justice and equity must inform each step of the court’s process and the overall result.
It is all very well to talk in percentage terms, so far as property orders are concerned, but at the end of the day what matters to the parties is what the orders mean in dollars and cents and what effect they will have on their respective long term aspirations and living standards.
Sixty-two per cent of the party’s net non-superannuation assets is represented by the sum of $205,712.90 and 38 per cent by the sum of $126,082.10. Again, I appreciate this is an artificial exercise given that the Property W property is to be sold and its exact realisation price is unknown.
However, for obvious reasons, in assessing the overall justice and equity of the outcome, which I propose, it is useful to know what is the likely extent of the amount of cash, which both the husband and wife anticipate receiving, once the property is sold.
After the deduction of the value of the assets currently in her possession, this will leave the wife with a cash sum of around $190,000.00, depending on the precise sum to be realised from the sale of the former matrimonial home and the actual costs involved in its sale.
Although, no evidence has been provided regarding the wife’s capacity to borrow and her plans, if any, to return to the workforce are unclear, such a sum would appear to be sufficient to provide her with a sizeable deposit to purchase some form of accommodation for herself. It will also provide her with a sizeable nest egg, if utilised sensibly, to cover her against unforseen exigencies.
Clearly the husband is left with a far more modest sum, but still one well in excess of $100,000.00. However, he remains in the workforce, in a secure position, which provides him with a comfortable salary. As such, I would anticipate that he would have no problems, either in the provision of a sufficient deposit to purchase a home for himself or to approach a lender for mortgage finance.
Accordingly, in my view, the result which I have reached provides both parties with a modicum of security, in the short to medium term. Both will have some funds to allocate to future accommodation plans and both will have a cash sum to provide some measure of security.
One of the benefits flowing to the husband, from his long term employment by a semi-public utility, is membership of a secure superannuation fund. I have determined that it is just and equitable that the wife receives a portion of the husband’s superannuation entitlements. For the reasons already outlined, I believe that it is both fair and appropriate that the wife receive a significant proportion of the husband’s superannuation.
The husband has many years of paid employment before him, during which period he will be able to replenish his superannuation entitlements. In this regard, the wife is not so well placed. She is likely to be a modest income earner, for the remainder of her working career. It is also unlikely that she will be able to join a fund comparable to that of which the husband is a member.
It is the wife’s preference that she should receive the sum to which I have calculated she is entitled, from the husband’ superannuation, in the form of cash. I do not think that this would be an equitable outcome. In particular, it would not be fair to the husband as it would deprive him of the relatively easy opportunity to purchase accommodation for himself in the medium term. In addition, such an outcome, in my view, would jeopardise his short term financial security.
Although she may not see it is such presently, considerations relating to the wife’s overall financial security dictate that she should be mindful of her retirement planning. Accordingly, I have reached the conclusion that it is both just and equitable that the wife receive a significant proportion of her entitlements, in the form of a split from the husband’s superannuation.
If the parties’ superannuation is split 55/45 percent, as I envisage, the wife needs to retain and receive superannuation to the value of $62,352.40. Taking into account the value of her existing superannuation, this means a split, in her favour of $48,756.00 from the husband’s superannuation. I will round down this sum to $48,500.00.
The outcome leaves Mr Slade with a much reduced store of superannuation. However, he is not yet forty. As such, he can anticipate, at the very least, a further working career of approximately twenty years. Accordingly, as I have already indicated, he has ample time to replenish his superannuation entitlements.
At the end of the day, I consider that it is fair that the parties each receive some cash, from the sale of their home and some superannuation. In reaching the assessment, which I have, I bear in mind the wife’s lesser income and ongoing responsibility to provide a home for the parties two children, albeit with significant financial support from the husband. In my view, the result I propose represents a just and equitable outcome, given the parties’ pool of assets.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding two hundred and forty-two (242) paragraphs are a true copy of the reasons for judgment of Brown FM
Associate: P Smith
Date: 2 February 2010
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