Smith and Kensington

[2008] FamCA 1058

FAMILY COURT OF AUSTRALIA

SMITH & KENSINGTON [2008] FamCA 1058

FAMILY LAW – PROPERTY SETTLEMENT - Contributions
FAMILY LAW – PROPERTY SETTLEMENT - Superannuation - Splitting order

Family Law Act 1975 (Cth)

APPLICANT: Ms Smith

RESPONDENT:  Mr Kensington

FILE NUMBER: SYC 3091 of 2007

DATE DELIVERED: 2 October 2008

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Judicial Registrar Johnston

HEARING DATE: 28 and 29 July 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Gregory Johnston

SOLICITOR FOR THE APPLICANT: Miller Goddard Solicitors

COUNSEL FOR THE RESPONDENT: Ms Anne Rees

SOLICITOR FOR THE RESPONDENT: Campbell Paton & Taylor

Orders

1. That pursuant to s90MT(4) of the Family Law Act 1975 the sum of $300,000 from the wife’s superannuation interest in AustralianSuper (“the fund”) be allocated to the husband (“the base amount”) by way of a splitting order as follows:

   (1.1)That, in accordance with s 90MT(1)(a) of the Act:

   (a)the husband is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and

   (b)the wife’s entitlement in the fund, is correspondingly reduced.

   (1.2)That the Board of Australian Super (“the Trustee”) do all things necessary to:

   (a)calculate, in accordance with the requirements of the Act and the Family Law (Superannuation) Regulations 2001, the entitlement created for the husband by these orders and

   (b)pay the entitlement whenever the fund makes a splittable payment out of the wife’s interest in the fund.

   (1.3)That this Order have effect from the operative time and the operative time is 28 days after the date on which a sealed copy of these orders is served on the Trustee.

2. That the parties forthwith do all acts and things and execute all documents necessary to cause the funds held by Miller Goddard, Solicitors on trust for the parties, being the proceeds of sale of the properties situate at T and M and of chattels and livestock disposed of by both or either of the parties to be distributed in the following manner:

   (2.1)in payment of $511, 965 to the solicitors for the wife; and

   (2.2)in payment of the balance to the solicitors for the husband.

3. That the husband be entitled to retain the items of personalty in his possession at the date of these orders.

4. That the wife do all acts and things required to transfer to the husband the 1991 Toyota motor vehicle registered in her name and that the husband thereafter be entitled to that vehicle.

5. That upon assessment of the capital gains tax (“CGT”) payable on the sale of the properties at M and T, the husband pay 50% of the assessed CGT and the wife pay 50% of the assessed CGT.

6. That the wife indemnify the husband in respect of any liability asserted by her for the repayment of monies to her parents.

7. That the wife do all things and sign all documents necessary to transfer to the husband the Harley Davidson motorcycle.

8. That otherwise each party is declared to be the sole owner of all other items of property in their respective possession custody or control including but not limited to superannuation entitlements.

9. That in the event that either party shall fail, neglect or refuse to execute any deed, instrument or document to give validity and effect to these orders then upon the other party filing an affidavit setting out such failure, neglect or refusal then a Registrar of the Sydney Registry of the Court is hereby appointed pursuant to section 106A of the Family Law Act to execute any such deed, instrument or document in the name of the party who defaults and to do all things necessary to give validity to the operation of the deed, instrument or document.

10. That the parties have liberty to apply on 7 days notice in respect of the implementation of these Orders.

11. That the above orders not commence operation until 21 October 2008.

12. That both parties have leave to re-list these proceedings for further submissions in relation to the form of the orders only at any time until 20 October 2008.

13. That all exhibits be released.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 3091  of 2007

MS SMITH

Applicant

And

MR KENSINGTON

Respondent

REASONS FOR JUDGMENT

Introduction and Applications  

1. These are contested property proceedings. The applicant in the proceedings is Ms Smith (for convenience I shall refer to her as “the wife”). The respondent is Mr Kensington (for convenience I shall refer to him as “the husband”).

2. The wife seeks orders the effect of which would be as follows;

   a)   That there be a superannuation splitting order in respect of her interest in Australian Super so that the whole of that interest be allocated to the husband as the base amount.

   b)     That the parties cause monies held by Miller Goddard, Solicitors on trust to be paid to the husband’s solicitors in the sum of $1450 and the balance to be paid to the solicitors for the wife.

   c)     That each party be declared the owner of all other items of property in their possession and or control respectively including superannuation entitlements.

   d)     Certain orders in relation to specified items of personal property and costs and machinery orders.

3. On the other hand the husband seeks orders to the following effect;

   a)   That there be a splitting order in relation to the wife’s interest in her superannuation as sought by the wife.

   b)     The husband be entitled to retain the items of personalty in his possession.

   c)     That the wife do all things and sign all documents to transfer to him the 1991 Toyota motor vehicle registered in her name.

   d)     The parties do all things and sign all documents to cause the monies held in the controlled money accounts by Miller Goddard, Solicitors to be paid to the husband.

   e)     That upon assessment of the capital gains tax payable on the sale of the properties at M and T the husband and the wife pay the assessed capital gains tax in the proportions consistent with the Court’s determination of the overall proportions in which their property should be distributed between them.

   f)   That the wife indemnify the husband in respect of any liability asserted by her for the repayment of moneys to her parents.

   g)     That the wife do all things and sign all documents necessary to transfer to the husband the Harley Davidson motorcycle.

4. On 26 August 2008 leave was sought on behalf of the wife to re-open her case. This was opposed by the husband. But I granted such leave to the wife on 18 September 2008. I received into the evidence liabilities of the wife which were additional to those submitted on her behalf in the final address by her counsel. The amounts of the liabilities were agreed and I refer to them below.

background

1. The husband was born in 1939 and therefore he is 69 years of age. The wife was born in 1962 and therefore she is 46 years of age. The parties commenced co-habiting in mid 1990 (see below). They married in March 1991. They separated in early 2007 (also see below). They were divorced on 13 August 2007.

2. There is one child of the marriage, L, who was born in November 1993. Accordingly, the child is 14 years of age. The husband had two children by his previous marriage namely, a daughter born in November 1976, and a son born in May 1982. Sadly, the husband’s daughter was killed in a motor vehicle accident in 1995.

3. Approximately 9 or 10 months prior to the parties commencing to co-habit, the husband had received a termination payment from S Company of $493,205.72. The husband had been employed full time with S Company over many years. However S Company had terminated the services of all employees including the husband in August 1989 as a consequence of a nation-wide.

4. At the time the parties commenced cohabiting the husband had an interest in his former matrimonial home the other one half interest being owned by his former (first) wife, a substantial superannuation interest and most of his termination payment. The husband resolved his property dispute with his first wife when consent orders were made by this Court in relation to that matter in 1992. The husband transferred his interest in his former matrimonial home to his former wife and paid out the then mortgage balance of approximately $30,000.

5. In mid 1990 the parties purchased a property at N, Victoria for $182,000. This was purchased in the wife’s name. It is common ground that the parties did this to endeavour to preserve assets of the husband. This purchase was funded by a contribution of $80,000 by the husband, the source of which was his termination payment. The parties borrowed the balance of the funds on mortgage. This property became the former matrimonial home and the parties commenced living in this property upon settlement of the purchase which would have been in approximately late August 1990. The parties continued to live in this property for some years.

6. Shortly after the parties’ marriage in March 1991 the husband’s property consisted of his interest in the N home and approximately $214,000 in savings. The husband did not have any liabilities other than ongoing liability to pay child support in respect of his two children from his former marriage. The husband continued to pay child support in relation to his daughter for some years. The husband paid child support in relation to his son until 1996.

7. Apart from some personal property the wife did not have any property of significant value.

8. In 1990 the wife commenced employment with S Company.

9. In April 1991 both the husband and wife were re-employed by S Company.

10. In 1993 S Company merged with Q Company..

11. In 1994 the wife purchased a horse.

12. In 1995 the parties purchased a property at P, Victoria for $250,000 and a property at R, Victoria in the wife’s name for $205,000. These purchases were funded by a $25,000 deposit on each and the balance of the required funds was borrowed from the Advance Bank.

13. In 1995, as indicated above, the husband’s daughter was killed in the motor vehicle accident. The husband became depressed and took sick leave for approximately 16 months.

14. In 1996 the parties sold their N property for $160,000. Also in 1996 the parties purchased the property T in New South Wales from the wife’s father for the consideration of $100,000. It is common ground that the property then had a value of $420,000. To fund this purchase the parties borrowed $200,000 from the National Australia Bank. The additional $100,000 produced from the borrowing was spent on stamp duty, legal costs, installation of power to the property and the purchase of a horse for the wife at a cost of $55,000. This horse was subsequently sent to Victoria for training.

15. The proceeds of sale of the parties’ N property were used to purchase livestock, and for fencing and construction of a shed and facilities.

16. The parties conducted a rural partnership on the property the business of which was breeding and trading livestock.

17. On 30 July 1997 the husband retired on medical grounds from Q Company. He received $160,000 and he rolled over approximately $264,924 superannuation.

18. In 1997 the wife sold the R property for approximately $220,000. After paying out the mortgage the net proceeds of sale were approximately $40,000. This money was paid towards household expenses. In 1997 the husband established the Kensington Superannuation Fund as a self managed superannuation fund.

19. In October 1999 the husband went into voluntary bankruptcy. The husband had undertaken some investments designed to minimise income tax. But following an adverse ruling from the Australian Taxation Office he was assessed to pay tax at a level which he could not afford.

20. In March 2000 the P property was sold for $330,000 and the mortgage of approximately $20,000 was discharged. The net proceeds of sale of the P property were used to purchase the property at Y for $90,000 in February 2001. This property was purchased in the name of the Kensington Superannuation Fund.

21. In 2002 the husband was discharged from bankruptcy.

22. In March 2003 the Kensington Number Two Superannuation Fund was established and the husband’s interest in the Kensington Superannuation Fund was transferred to this new superannuation fund. The fund purchased the property at B for $137,750

23. In 2004 the family moved to a rented property at M, Victoria to enable the wife to be close to her horse trainer. After renting this property for 12 months the parties decided to purchase it. The property was purchased for $360,000 by the Kensington Number Two Superannuation Fund. The parties borrowed $390,000 from Westpac Banking Corporation the total costs required being $382,000. The parties lived at the M property until December 2005 when they returned to live at their T property. They then rented the M property out.

24. In early 2006 the properties owned by the Kensington Number Two Superannuation Fund namely, B property an Y property were sold. The proceeds of sale were applied to reduce the outstanding mortgage balance on the M property.

25. As indicated above the parties separated some time between February 2006 and early 2007. The husband and the parties’ child L remained living at T property. The wife commenced co-habiting with her now husband Mr Smith whom she married in November 2007.

26. In May 2007 the wife sold Qantas shares for $10,000 and her Harley Davidson motorcycle for $14,000. In August 2007 the wife attended at the T property when the husband was absent and she sold 29 head of cattle for $9200.

27. In December 2007 the child came into the primary care of the wife and has remained living with the wife since that time.

28. On 5 March 2008 this Court made orders to facilitate the sale of the T and M properties. Since shortly after this time the husband has resided with his brother in New South Wales.

29. Despite an injunction having been made on 5 March 2008 restraining the husband from removing items of personalty, furnishings, machinery and chattels from the T property, the husband removed a considerable amount of such property.

30. In May 2008 the T property was sold for $1,080,000. The net proceeds of sale have been paid to a controlled monies account.

31. In June 2008 the M property was sold for $425,000. After payment of the mortgage and costs of sale including legal costs on the sale, outstanding school fees to L’s private school of $11,466 and a personal loan of the wife in the amount of $51,822 were paid, the balance of $57,998 was paid into a controlled money account in the name of the wife’s solicitors.

Issues

1. There was an issue about when the parties commenced co-habiting. It was submitted on behalf of the husband that this was in October 1989. On the other hand the wife asserted that the parties did not commence co-habitation until their marriage on 19 March 1991.

2. What is clear is that they purchased their first matrimonial home at N, Victoria in approximately mid 1990. By this time the parties were operating a joint account into which their respective salaries were paid. During submissions it was agreed that it was more probable than not that the parties commenced co-habiting when they moved into their home at N within a couple of months of mid 1990.

3. There was another issue about when the parties separated. The wife asserted that the parties separated in February 2006. The wife filed an application for divorce in the Federal Magistrates Court deposing in such application that the parties separated in February 2006. The husband did not challenge that date of separation in those proceedings. I note also that the wife arranged for a demountable home to be installed on the T property in March 2006. But this suffered storm damage shortly after its installation and it became uninhabitable.

4. Nevertheless, the husband alleges that the parties did not separate until early 2007. In this regard the husband said that the parties went out together socially and had a family holiday together in January 2007. He said that it was at that time that the wife met her husband Mr Smith. The husband said that the wife informed him in March 2007 that the marriage was over.

5. There is no question that the marriage was over and that both parties had this view by early 2007. Whether the wife had informed the husband that the marriage was over, or had acted in such a manner that the husband could be in no doubt that this was the wife’s view prior to this time, is unclear to me. Accordingly, I tend to favour the husband’s submission that the parties did not separate within the meaning of the Act until early 2007. This is despite the wife having relied on February 2006 as the time of separation for the purposes of the parties’ divorce proceedings.

6. In any event, in my view, it matters little, if at all, for the purposes of these property proceedings, whether the parties were in a state of having separated at the earlier or later time. This is because each of them continued to make contributions between February 2006 and, say, March 2007.

Property available for division

1. Most of the property available for division and the value of the various items were agreed. But there were issues about the extent to which certain items of property should be “added back” to the pool of property.

2. It was submitted on behalf of the husband that the proceeds of sale of the livestock sold by the wife after separation ($9200) the proceeds of sale of the Harley Davidson motorcycle sold by the wife ($14,000), the proceeds of sale of the Qantas shares sold by the wife ($10,000) and a drawdown of superannuation by the wife of ($38,645) should be added back to the pool of property. This is a total of $71,845.

3. It was submitted on behalf of the wife that this would be unreasonable in circumstances where the wife had paid the mortgage in relation to the T property between February 2006 and October 2007. It was conceded by the husband that the wife had paid $28,128 in mortgage repayments and that it would be reasonable in all the circumstances for this to be deducted from the suggested add back.

4. In considering whether any part of this $71,845 should be added back as property enjoyed by the wife I have taken into account the fact that the wife paid at least $28,128 in mortgage payments, she paid $11,000 to the parties’ accountant and the wife also paid $14,200 for the child L’s school fees since May 2006. This is a total of $53,328. The difference between $71,845 and this amount is $18,517. It might be argued that this amount should be added back to the pool of property.

5. On the other hand it is submitted on behalf of the wife that the husband withdrew a total of $193,738 from his superannuation fund between the time of separation and the time of the trial. His account at separation had a balance of $206,512 whereas at trial there was only $12,774 in the fund.

6. In my view, there is a difficulty with this submission. The only income the husband had was a very modest pension. Accordingly, it was necessary for him to withdraw capital from his superannuation fund in order to finance his living costs and those of the parties’ child after separation. In my view, it is only fair to permit him such expenditure. He also spent some funds on maintenance and improvements to the T property.

7. I regard the $54,698 which the husband has spent on his legal costs differently. Obviously these monies have been spent for the husband’s sole benefit and they should be added back to the pool of available property.

8. If one was to allow the husband a reasonable amount for his living costs as well as those of the child, in my view this would leave an amount unaccounted for, which although more than the $18517 which might arguably be added back against the wife, would not exceed this by a great margin.

9. In these circumstances, and bearing in mind the wife was earning and having the benefit of significant income during the relevant period whereas the husband was not, in my view, the only amount which should be added back is the $54,698 spent by the husband on his legal costs.

1. The only remaining issue for determination in relation to the property available for division between the parties concerns the value of the husband’s stamp collection. The parties were unable to agree on a value for this. The husband arranged for his stamp collection to be valued by a Mr GS, a dealer in fine and rare postage stamps. Mr GS valued this stamp collection at approximately $5625. The wife did not accept this valuation. But the parties failed to have a single expert appointed to undertake a valuation of this.

2. The husband conceded during cross-examination that he had spent at least $30,000 during the course of the relationship on the acquisition of stamps and books.

3. Despite the strong submission on behalf of the wife, that the Court should attribute a value of, say, $30,000 to the stamp collection, I do not propose to do so. It was submitted on behalf of the husband, that during the marriage the wife spent a very significant amount of money in pursuit of her hobby of competing with horsees. This included purchase of her horse for $55,000, the horse currently having an agreed value of $9000. In addition, significant amounts of money were spent on having the horse trained and various other expenses associated with this hobby. It was submitted that, bearing in mind the significant funds spent on the wife’s hobby, it would be unfair to the husband simply to attribute a higher value to the husband’s stamp collection on the basis of his admission about the $30,000 he spent on purchase of stamps and books. It was submitted that this would be especially so when there was no evidence in proper form to support a high value being placed on the stamp collection.

4. I accept the thrust of the submission on behalf of the husband in this regard. I propose to find that the stamp collection has a value of $5,625 on the basis of this being an admission against interest by the husband.

5. Accordingly the property available for division is as follows:

Asset	$
1.         Proceeds of sale of T and M properties in controlled money account	756,353
2.         Proceeds of sale of cattle in controlled money account	42,450
3.         Wife’s Stud	25,950
4.         Wife’s 1991 Toyota wagon husband wants to retain	9500
5.         Wife’s Qantas shares	945
6.         Wife’s Stallion	9000
7.         Wife’s 2005 Toyota Hilux	22,500
8.         Wife’s 2005 Toyota Landcruiser	15,000
9.         Wife’s bank accounts	127
10.      Wife’s mobile home	2000
11.      Wife’s jewellery	4000
12.      Wife’s legal costs	2000
13.      Wife’s superannuation	458,714
14.      Husband’s Harley Davidson motorcycle	16,000
15.      Husband’s caravan	2800
16.      Husband’s trailer	1000
17.      Husband’s stallion	990
18.      Husband’s stamp collection	5625
19.      Husband’s superannuation fund	12,774
20.      Husband’s Westpac bank account	1170
21.      Husband’s legal costs	54,698
22.      Husband’s superannuation	15,678
_____________
$1,459,274

Liabilities

1. Both parties have liabilities to their solicitors for their legal costs. I am not aware of the precise outstanding amounts although I have a general idea of amounts owing. I propose to leave these liabilities out of this table other than to the extent explained above. The wife has liabilities in respect of her Toyota Hilux vehicle and a horse float of $33,306. She has a Mastercard liability of $6,721 and a GE liability of $9,826. The husband has a credit card liability of $4,726. Total liabilities are therefore $54,579.

2. Each of the parties will have a capital gains tax liability from the sale of real estate.

3. The wife has a liability to the accountant of $12,300 but I do not propose to regard that as a liability for the purposes of these proceedings.

4. Accordingly, the surplus of assets compared with liabilities is $1,404,695.

Contributions

1. Taking a broad view, early in the marriage and after the husband’s property settlement with his former (first) wife, his assets consisted of his equity in the N property of $80,000 and $214,000 savings in two bank accounts. He did not have any liabilities. So, on a broad view, this is what the husband brought into the marriage.

2. On the other hand, the wife did not have any property of significant value. But in 1996 her father sold the parties T property at a price which represented only a small part of its value. It is common ground that, in effect, the wife’s father made a gift to the wife of $320,000. It is also common ground that the wife’s father made further contributions to a total of $50,000 being $30,000 advanced to the wife shortly after the parties purchased T property and $20,000 advanced later.

3. There appears to be no issue that these are contributions that should be regarded as coming in on the wife’s side of the ledger as it were.

4. There is a real issue about how the Court should regard $65,000 advanced to the wife by her mother in 1996. The wife’s mother said that in circumstances where she had become very ill, she gave the wife $65,000 for her safekeeping.

5. This money was invested with two persons who were financial advisers to the husband and the wife. The money was lost. Each party blamed the other for this loss.

6. The wife said that the husband informed her that if she placed the money with the investment business of these financial advisers it would be able to earn a return of ten percent.

7. The husband said that he was introduced to one of the financial advisers by the wife. The husband said that the wife worked with colleagues of this financial adviser. The husband also said that these advisers had prepared the parties’ income tax returns for the previous three years. The husband said that he informed the wife that she should seek the advice of the financial advisers about how to invest the $65,000.

8. There was a strong submission on behalf of the husband to the effect that he should not have to bear any of the loss of this money. This was on the basis that the husband asserted that it was the wife who had invested the money and that she had invested it poorly. It was submitted that this money had never formed a part of the assets of the parties, that it did not produce any property, and that it should not be regarded as a contribution on behalf of the wife. It was submitted on behalf of the wife that the parties have an obligation to repay the $65,000 to the wife’s mother.

9. Firstly, I accept the submission on behalf of the husband that this money is not owed by the parties to the wife’s mother. It is certainly not an enforceable debt. Although the money came into the control of the wife, it has not produced any acquisition, conservation or improvement of property. Rather, as I have said, it has been lost. So really it adds nothing to the Court’s consideration of the parties’ contributions. I propose to take it into account as a relevant s.75(2)(o) matter.

10. There is no issue that the wife’s mother advanced her $7500 in 2006 to assist with the purchase and installation of a demountable home on the T property.

11. Both parties have worked during the marriage and have contributed their incomes for the purposes of themselves and their family. But the husband retired on medical grounds in 1997 as indicated above. He received payment of $160,000 and rolled-over his superannuation of approximately $264,924.

12. The husband became the primary parent of the child from approximately 1996 because he was no longer working with Q Company. On the other hand, the wife became the main bread-winner for the family.

13. So for these reasons, and also because the child remained living with the husband after separation until late 2007 when she moved to live with the wife, the husband has made a greater contribution to the welfare of the family and as homemaker and parent.

14. There is no doubt in my mind that the wife has made a greater financial contribution than the husband. As I have said, she became the major bread-winner. And in forming this view, I have not lost sight of the payment the husband received upon retirement nor of his initial contributions. But the wife’s parents made the significant financial contributions to which I have referred above. Clearly the wife’s contributions overall have been significantly greater than those of the husband particularly because of the contributions by her parents. In my view the wife’s contributions overall have been 58% and those of the husband have been 42%.

s 75(2) matters

1. The husband is 69 years of age and he is in reasonable health. He is retired. His income is $52 per week from a superannuation pension. On the other hand, the wife is 46 years of age and she is in good health. The wife is working full time with Q Company. Her income is $2062 per week, although I understand that the wife has reduced her level of hours because she works in Sydney yet lives with her husband Mr Smith in southern New South Wales. Accordingly, in my view, the wife has the capacity to earn income at a higher level than that which she is currently in receipt of. The wife also has the capacity to be able to contribute to superannuation.

2. The parties’ daughter L has been living primarily with the wife since late 2007. On all current indications this situation is likely to continue.

3. The wife and her husband share their living costs. Mr Smith is in receipt of a very modest income and he has equity of approximately $100,000 in his home.

4. The husband pays approximately $6 per week in child support. One would expect his child support to increase at least to some extent in future.

5. The wife’s mother advanced $65,000 as indicated above and this money has been lost. The wife said that her mother wishes to be repaid this amount as I have said. As also indicated above this is not an enforceable debt but the wife might wish to repay this at least in part.

6. The wife would also enjoy more of the available property based on contributions.

7. The most significant s.75(2) matters are the primary responsibility which the wife has to provide for the child and the significant differences between the parties in terms of their respective incomes and income earning capacities. On the one hand the husband is retired. In my view it is clear that the husband’s income-earning years are well behind him and he has almost exhausted his superannuation. On the other hand it would appear that the wife has many more income-earning years ahead of her and she should be able to continue to earn income at least at her present level, and I would have thought at a higher level. She should also be able to build a reasonable level of superannuation. She also shares her living costs with her husband.

8. In these circumstances, it will be appropriate to set-off an amount of property in favour of the husband in order to achieve a just and equitable order as required pursuant to s.79(2) of the Act. In my view the appropriate set-off is 8% of the available property.

Conclusion and fourth step

1. The wife will have 50% of the available property. This is property with a value of $702,348 (50% of $1,404,695 = $702,348).

2. The wife has the following assets:

$
23.      Stud	25,950
24.      Qantas shares	945
25.      Stallion	9000
26.      Toyota Hilux	22,500
27.      Toyota Land Cruiser	15,000
28.      Bank Accounts	127
29.      Mobile Home	2000
30.      Jewellery	4,000
31.      Legal Costs (add back)	2000
32.      Superannuation	458,714
_____________
$540,236

1. But the wife also has liabilities in respect of her Toyota Hilux vehicle and a horse float of $33,306. The wife also has a Mastercard debt of $6,721 and the GE debt of $9,826. She has total liabilities of $49,853. Accordingly the wife has surplus assets compared with her liabilities of $490,383 ($540,236 - $49,853 = $490,383).

2. In order to achieve property with a value of $702,348 the wife would require further property with a value of $211,965 ($702,348 - $490,383 = $211,965).

3. On the other hand the husband is also to have 50% of the available property. This is property with a value of $702,347.

4. The husband has the following property:

$
1.   1991 Toyota wagon	9500
2.   Harley Davidson motorcycle	16,000
3.   Caravan	2800
4.   Trailer	1000
5.   Stallion	990
6.   Stamp collection	5,625
7.   Westpac bank account	1170
8.   Legal costs	54,698
9.   Superannuation	12,774
10. Superannuation	15,678
_____________
$120,235

1. But the husband has the credit card liability of $4,726. Accordingly, he has property with a net value of $115,509 ($120,235 - $4,726 = $115,509)

2. The wife seeks a superannuation splitting order with the effect that her superannuation benefit of $458,714 would be split 100% in favour of the husband. The effect of this would be that upon this vesting the husband would be able to withdraw this amount from the fund presumably because of his age.

3. I am prepared to provide the wife with part of what she is seeking in this regard. I say part only because in my view the Court is to take account of government policy in introducing the superannuation amendments to the Family Law Act 1975. I note that page 8 of the Explanatory Memorandum to the Family Law Legislation Amendment (Superannuation) Bill 2000 referred to the objectives. Included in the objectives are the following:

   ·    Encourage parties to take responsibility for their own affairs where possible;

   ·    Minimise compliance costs;

   ·    Be consistent with the Government’s broader retirement incomes policy goals.

   At page 9 of the Explanatory Memorandum it is said that the Government’s retirement incomes policy has a number of broad objectives, including:

   ·    Ensuring that superannuation savings, which have benefited from concessional tax treatment, are used to maintain and improve living standards in retirement rather than being diverted to other uses; and

   ·    Effectively targeting Government assistance in the form of aged pensions and other benefits to those who have limited resources with which to fund their retirement.

4. In these circumstances I propose to make a splitting order with the effect of providing the husband with a base amount of $300,000 in the wife’s superannuation fund. This would leave the wife with $158,714 in the fund. I am confident that the wife would be able to build on this in the future so that the government policy as outlined above will still be achieved so far as the wife is concerned.

5. On the basis that the husband is to have $300,000 of the wife’s superannuation, this would leave the wife with $190,383 surplus assets compared with liabilities ($490,383 – $300,000 = $190,383). Accordingly, the wife would require further property with a value of $511,965 in order to achieve property with a value of $702,348 ($702,348 - $190,383 = $511,965). This can be paid to the wife out of the net proceeds of sale of the T and M properties held in the controlled money account. This would leave a balance of $244,388 ($756,353 - $511,965 = $244,388) remaining from the T and M properties proceeds of sale. This could be paid to the husband.

6. Accordingly, the wife will have surplus property compared with liabilities with a value of $702,348 ($190,383 + $511,965 = $702,348) which is 50% of the property and superannuation available for division between the parties.

7. On the other hand the husband will have the property with a value of $115,509 referred to above, the $300,000 from the wife’s superannuation, the balance of the proceeds of sale of the T and M properties of $244,388 and the proceeds of sale of the cattle of $42,450. This is property with a total value of $702,347.

An overall view

1. The wife will have property and superannuation with a value of $702,348. Of this amount $190,383 will be in personal property and superannuation leaving a balance of property of $511,965. The wife has a liability to her solicitors for legal costs. But the balance of property available to the wife will be sufficient to enable her to accommodate herself, her husband and the parties’ child L. The wife should be able to continue in her employment for many years.

2. On the other hand the husband will have property with a value of $702,347. $300,000 of this will be by way of the superannuation splitting order. But he will be able to convert this to cash. Although some of this property is personalty and added-back legal costs, and the husband will have to pay some legal costs, the balance should be sufficient for him to purchase some modest accommodation and have a fund which could be used for living expenses or invested to provide an income stream.

3. The orders proposed will not affect either party’s capacity to earn income, although as I said, I regard the husband as not having such capacity.

I certify that the preceding ninety-seven (97) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Johnston.

Associate: 

Date:  2 October 2008