Stuart and Stuart

[2015] FamCA 1146

FAMILY COURT OF AUSTRALIA

STUART & STUART [2015] FamCA 1146

FAMILY LAW – PROPERTY SETTLEMENT – Undefended hearing – application by the wife for a superannuation splitting order – where the husband is on notice of the proceedings and the wife’s application – where the husband has previously indicated that he does not wish to participate in the proceedings – final orders made in the terms of the wife’s application

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth): rr 11.02, 15.52

Stanford v Stanford (2012) 247 CLR 108

APPLICANT: Ms Stuart

RESPONDENT: Mr Stuart

FILE NUMBER: MLC 3560 of 2015

DATE DELIVERED: 18 December 2015

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Johns J

HEARING DATE: 7 December 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr D Meehan

SOLICITOR FOR THE APPLICANT: Melbourne Family Lawyers

THE RESPONDENT: No appearance

Orders

1. That paragraphs 2 to 6 of these orders are binding on the Trustee of Company C Super Pty Ltd (ABN …) (“the fund”).

2. That the Court allocate, pursuant to s 90MT(4) of the Family Law Act 1975 (Cth) (“the Act”), a base amount of $190,000 to the wife, MS STUART, out of the husband, MR STUART’S interest in Company C Super Pty Ltd, Member No. ….

3. That in accordance with s 90MT(1) of the Act, whenever the Trustee of the fund makes a splittable payment from the interest held by the husband in the fund, the Trustee shall pay out to the wife the amount which is calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth), and there be a corresponding reduction in the entitlement that the husband would have but for these orders.

4. That Order 2 has effect from the operative date.

5. That the operative date of these orders is four (4) business days after the day on which a certified copy of the final signed and sealed orders is served on the Trustee.

6. That until the happening of any of:

   (a)The establishment of a separate account in the name of the wife in the fund; or

   (b)The transfer or “rolling over” into another superannuation fund of the payment split created by Order 2 hereof; or

   (c)The wife satisfying a condition of release and being paid the payment split created by Order 2 hereof; or

   (d)The wife executing a waiver of rights within the meaning of s 90MZA of the Act in relation to the payment split created by Order 2 hereof;

   the husband be and is hereby restrained by himself, his servants and/or agents from executing a Binding Death Nomination in favour of any person or doing any other act or thing which would render any part of this interest in the fund a “non-splittable payment” within the meaning of Regulation 12 of the Family Law (Superannuation) Regulations2001 (Cth) AND the Trustee of the fund give effect to this order.

7. That unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:

   (a)Each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders;

   (b)With the exception of the superannuation split of the husband’s Company C Super (Member No. …) outlined in Order 1 to 6 herein, each party forego any claims they may have to any additional superannuation benefits belonging to or earned by the other party including:

   (i)The wife forego any claim she may have to the husband’s entitlements in the Military Superannuation and Benefits Scheme;

   (ii)The husband forego any claim he may have to the wife’s entitlements in her CareSuper policy No. …;

   (c)       Insurance policies remain the sole property of the owners thereof;

   (d)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.

8. That the wife’s Further Amended Initiating Application filed 30 September 2015 be otherwise dismissed.

9. That forthwith the wife cause a sealed copy of the orders dated 18 December 2015 and the Reasons for Judgment be served upon the husband at his address B Street, Suburb A by pre-paid post.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 3560  of 2015

Ms Stuart

Applicant

And

Mr Stuart

Respondent

REASONS FOR JUDGMENT

Introduction

1. These are undefended property proceedings between Ms Stuart, to whom I shall refer in these reasons as the wife, and Mr Stuart, to whom I shall refer as the husband.  They are undefended proceedings due to the failure of the husband to participate since 6 October 2015.  The husband has had a number of opportunities to participate in the proceedings; he has been ordered to file documents and he has failed to comply with those orders.  Further, he did not appear at the hearing of the matter on 7 December 2015. 

2. The wife seeks to finalise the proceedings and it is on that basis that she seeks the matter progress and be determined on an undefended basis.

Background

1. The wife is aged 56 years.  She is engaged in full-time employment as an accounts manager. 

2. The husband is aged 57 years.  He is technical expert. However, to the best of the wife’s knowledge the husband is currently unemployed although it is alleged by the wife that he has the capacity to work.

3. The parties commenced cohabitation in 1990 and married in 1991.  Final separation occurred on 1 December 2013 and the parties were divorced in April 2015.  There are no children of the marriage.

4. The parties met when both were enlisted in the defence forces.  Both parties were engaged in employment throughout the marriage, the wife initially in the defence forces and then in subsequent years in hotel management, retail and computers.  The husband worked in the defence forces until 1997 and thereafter worked in IT.  He worked with Company C until approximately July 2012 when he resigned from that employment.

5. The parties separated under the one roof in October 2013.  Following that separation they sold the former matrimonial home at D Street, Suburb E (“Suburb E”).  Upon the settlement of the sale of Suburb E the parties divided the proceeds of sale equally.  They also divided their chattels and personal effects. 

6. The parties executed a Statement of Agreed Facts dated 29 June 2015 confirming the fact that the net proceeds of sale of Suburb E were divided equally (Exhibit B). 

7. In his Financial Statement filed 13 August 2015, the husband confirms his receipt of one half of the proceeds of sale of Suburb E at Part M of that document.  He also confirms receiving a half-share of the proceeds of sale of two motorcycles. 

8. Notwithstanding the decision of the parties to equally divide their non-superannuation assets, they were unable to finalise the division of their superannuation interests.

9. As a result, on 27 April 2015 the wife filed an Initiating Application in which she sought orders for a superannuation splitting order.  That application was listed for a Case Assessment Conference on 29 June 2015.  That day the husband appeared in person.  The parties engaged in negotiation at that conference and executed a Minute of Proposed Order.  As the husband had not filed a Financial Statement prior to that conference, the Registrar refused to make final property orders.  Accordingly, the matter was listed for a directions hearing before the Registrar on 14 August 2015 at 10.00 am.  The husband was ordered to file a Financial Statement by 20 July 2015.  The notation to the procedural orders made that day reads as follows:-

   Upon receipt of the respondent’s Financial Statement the listing on the 14/08/2015 will be vacated upon the making of final consent orders in Chambers.

10. The husband did not comply with the timelines stipulated for the filing of his Financial Statement.  In fact his Financial Statement was not filed until 13 August 2015, being the day before the listed directions hearing.  The husband did not appear at the directions hearing on 14 August 2015.  As a result, the matter was adjourned for further directions on 9 September 2015.

11. Again on 9 September 2015, the husband failed to appear.  That day, the Registrar made orders adjourning the matter for hearing in the Judicial Duty List on 6 October 2015.  Further, the husband was ordered to file and serve a Response to Initiating Application by 2 October 2015 and to appear at the adjourned hearing.  Paragraph 7 of those orders provides as follows:-

    In the event the respondent does not comply with paragraphs 2 and 6 of these orders, the Applicant has liberty to apply to have her Amended Initiating Application proceed on an unopposed basis on the adjourned hearing date.

12. The matter was listed before me in the Judicial Duty List on 6 October 2015.  That day the husband appeared in person.  The husband informed that Court that he had not sought legal advice in relation to the orders sought by the wife but confirmed that he did not oppose the orders sought.  In the circumstances I determined that it was appropriate that the applications be adjourned to 27 November 2015 to enable the husband to seek legal advice prior to the wife’s application proceeding to determination.   The notation to the orders made adjourning the matter records the following:-

    A.That the husband has appeared at Court this day and indicated that:-

    (i)         he does not wish to participate in the proceedings; and

    (ii)he does not oppose the orders sought in the wife’s Further Amended Initiating Application filed 30 September 2015.

    B.In circumstances where the husband has not obtained legal advice, the wife sought an adjournment of her application to proceed on an undefended basis.

13. Ultimately the matter proceeded to hearing before me on 7 December 2015.  At the commencement of the hearing, the husband was called.   He did not appear.  Accordingly, the wife sought to proceed with her application on an undefended basis. 

14. The material relied upon by the wife in support of her application is as follows:-

    ·Further Amended Initiating Application filed 30 September 2015;

    ·Affidavit of the wife filed 30 September 2015;

    ·Financial Statement of the wife filed 27 April 2015;

    ·Affidavit of Mr F filed 30 September 2015;

    ·Financial statement of the husband filed 13 August 2015;

    ·Minute of Orders sought by the wife signed by the husband and the wife dated 29 June 2015 (Exhibit A);

    ·Statement of Agreed Facts signed by the husband and the wife dated 29 June 2015 (Exhibit B); and

    ·Letter from Company C Super to Melbourne Family Lawyers dated 19 June 2015 (Exhibit C).

The wife’s application

1. The wife seeks to have the matter determined on an undefended basis given the husband’s failure to appear this day.  As noted earlier, the husband has on occasions participated in the proceedings.  He filed a notice of address for service on 3 July 2015 and a Financial Statement on 13 August 2015.  He last appeared in the proceedings before me on 6 October 2015.  The notation to my orders of that day records the husband’s then expressed attitude to the proceedings.  The orders made in Chambers listing the matter for hearing before me this day were forwarded to the husband at his address for service.  Accordingly, I am satisfied that he is aware of the hearing before me.

2. Rule 11.02(2)(c) of the Family Law Rules 2004 (Cth) (“the Rules”) provides that if a party does not comply with the rules, the regulations or a procedural order, the Court may, amongst other things, determine the case as if it were undefended. An undefended hearing means that the respondent does not participate at all; from the Court’s perspective, there is no live issue between the applicant and the respondent.

3. Having regard to the husband’s failure to comply with orders requiring him to file material and attend the hearing, coupled with his stated intention to the Court on 6 October 2015 that he does not oppose orders as sought by the wife and does not wish to participate in the proceedings, I am satisfied that it is appropriate to determine the case on an undefended basis.  The husband has had the opportunity to be heard and has elected not to participate in the proceedings. 

4. In her Further Amended Initiating Application filed 30 September 2015, the wife seeks orders in the following terms:-

   1.That the Court allocate $190,000 to the wife out of the husband’s interest in [Company C Super Pty Ltd].

   2.That otherwise each party retain the assets currently in their possession and under their control namely:-

   (a)the Wife retaining her Care Super entitlements, her cash at bank and her motor vehicle;

   (b)the Husband retaining his interest in Military Superannuation and Benefits Scheme, the balance of his [Company C Super] entitlements, his cash at bank and motor vehicle.

   3.Such further or other orders as this court deems appropriate.

5. The orders sought before me as set out in Exhibit A are expanded insofar as the wife seeks a splitting order pursuant to s 90MT(1) of the Family Law Act 1975 (Cth) in order to give effect to the orders sought in her Further Amended Initiating Application. The husband has signed the proposed Minute of Order. Hence I am satisfied he has been accorded procedural fairness insofar as he has been on notice as to the orders sought by the wife since 29 June 2015.

6. The proposed order has been served on the trustee of the superannuation fund, being Company C Super.  That fund has confirmed that it does not have any objection to the terms of the proposed Minute.  This is confirmed in the letter from Company C Super to Melbourne Family Lawyers dated 19 June 2015 (Exhibit C).  Accordingly, I am satisfied that procedural fairness has been accorded to the trustee of the relevant superannuation fund.

Legal Principles

1. Property applications are to be determined in accordance with the provisions of Part VIII of the Act. The High Court considered the approach to be adopted in the determination of proceedings pursuant to s 79 of the Act in the decision of Stanford v Stanford (2012) 247 CLR 108. At page 121 the High Court said that “[t]he power to make a property settlement order must be exercised ‘in accordance with legal principles, including the principles which the Act itself lays down’.” Section 79(2) of the Act provides that a court should not make an order for property settlement unless it is satisfied that it is just and equitable to do so.

2. In determining an application pursuant to s 79, the Court is required to:-

   ·Identify the parties’ respective legal and equitable interests in property;

   ·Determine whether, in accordance with s 79(2) it is just and equitable to make a property settlement order having regard to the parties’ existing interests;

   ·Determine all relevant contributions of each of the parties;

   ·Identify and weigh against each other the matters set out in s 79(4)(a) to (c) inclusive;

   ·Consider the matters contained in s 79(4)(d) to (g) inclusive and make a determination as to what, if any, alteration should be made to the entitlements of the parties earlier assessed on account of their contributions, particularly having regard to the provisions of s 75(2).

3. The Act does not prescribe the order in which the matters in s 79(4) are to be considered. The circumstances of individual marriages as to their nature and form differ; how parties have organised and lived within the marriage are factors which may be relevant in the exercise of the discretion pursuant to s 79(2) of the Act.

The legal and equitable interests of the parties

1. Having regard to the husband’s Financial Statement, it is common ground between the parties that they have divided equally their non-superannuation interests.  The interests divided were valued at approximately $450,000, comprising the proceeds of sale of Suburb E of approximately $430,000 and $20,000, being the proceeds of sale of the motorcycles.

2. The parties’ superannuation interests comprise of the following:-

Superannuation	Wife	Husband
Military Super	$468,307[1]
Company C Super	$194,720[2]
CareSuper	$164,136[3]
Total Superannuation	$827,163

[1] Annexure PGS1 to the affidavit of Mr F filed 30 September 2015.

[2] Annexure AS3 to wife’s affidavit filed 30 September 2015.

[3] Annexure AS4  to the wife’s affidavit filed 30 September 2015.

1. The wife relies upon the affidavit of Mr F filed 30 September 2015 in support of her contention as to the value of the husband’s Military Super interests.  Mr F was engaged on behalf of the wife to prepare a valuation of the interest of the husband in Military Super.  Annexure PGS1 to Mr F’s affidavit is his valuation of the husband’s entitlements in Military Super as at 30 June 2015.  Mr F is a director of PGS Superannuation Consulting Pty Ltd and provides strategic advice on superannuation for family law purposes.  He holds a Bachelor of Economics and Master of Commerce.  Previously, he has held executive positions with ComSuper and Military Super. 

2. Mr F is not an expert appointed in accordance with Division 15.5.2 of the Rules. Accordingly, counsel for the wife made oral application seeking permission for the wife to rely upon the sworn evidence of Mr F in accordance with the provisions of r 15.52 of the Rules.

3. Leave was granted for the making of that oral application. 

4. The husband’s interest in Military Super is a defined benefits scheme.  It is a superannuation fund of which he has been a member since 1977.  The parties shared a relationship of some 23 years.  The husband’s interests in the Military Super scheme represent a significant of proportion of the parties’ superannuation interests acquired during their long relationship.  Given the significance of the husband’s interest in the Military Super scheme in the context of the wife’s application I am satisfied that it is necessary that expert evidence be obtained as to the value of that interest. 

5. The husband had been on notice as to the evidence of Mr F since 30 September 2015 when his affidavit was filed.  Further, the husband is on notice as to the orders sought by the wife in terms of a superannuation split.  The husband has elected not to participate in the proceedings in the knowledge of the evidence before the Court and the orders sought by the wife.  Having regard to those circumstances I am satisfied that it is appropriate that leave be granted to the wife to rely upon the evidence of Mr F as to the value of the Military Super interests.

6. The orders sought by the wife are that there be a superannuation split from the husband’s interest in Company C Super valued at $190,000.  The effect of an order in those terms would result in the wife receiving superannuation interests valued at $354,136, or 43 per cent of the parties’ accrued superannuation interests.  If the parties’ superannuation and non-superannuation interests are combined, the effect of an adjustment to the wife as sought by her would result in her retaining 45 per cent of the parties’ interests and the husband retaining 55 per cent of their interests. 

7. Save for the husband’s superannuation interests accumulated by him prior to the parties’ cohabitation, neither party had any assets of significance at the commencement of their relationship.  There is no evidence as to the value of the husband’s superannuation interests at the commencement of the cohabitation in 1990.  At that stage he had been a member of Military Super for approximately 13 years.

8. Both parties worked full-time throughout the relationship until the husband resigned from his position with Company C in July 2012, approximately 12 months prior to the parties’ separation under the one roof. 

1. The wife continues in full-time employment and her income from that employment is approximately $92,000 per annum.

2. The husband was not in employment at the time he swore his Financial Statement.  The wife deposes that the husband has qualifications and training which would enable him to obtain employment.  The husband does not challenge that evidence. 

3. I am satisfied that the orders sought by the wife are just and equitable.  The orders appropriately take into account the parties’ respective contributions over the course of their 23-year cohabitation.  The orders proposed allow an adjustment of 14 per cent in favour of the husband with respect to the superannuation interests and looking at the pool of superannuation and non-superannuation interests, an adjustment in his favour of approximately 10 per cent.  I am satisfied that an adjustment in those terms appropriately reflects the husband’s contributions made in respect of the superannuation interests accumulated by him prior to the commencement of the parties’ relationship.  That adjustment also takes into account the current disparity in the parties’ respective incomes.

4. Accordingly, I will make orders in the terms sought by the wife.  Further, I will order that a sealed copy of these orders and the Reasons for Judgment be served upon the husband.

The Orders

1. The orders that I make are as follows:-

   1.That paragraphs 2 to 6 of these orders are binding on the Trustee of Company C Super Pty Ltd (ABN …) (“the fund”).

   2.That the Court allocate, pursuant to s 90MT(4) of the Family Law Act 1975 (Cth) (“the Act”), a base amount of $190,000 to the wife, MS STUART, out of the husband, MR STUART’S interest in Company C Super Pty Ltd, Member No. ....

   3.That in accordance with s 90MT(1) of the Act, whenever the Trustee of the fund makes a splittable payment from the interest held by the husband in the fund, the Trustee shall pay out to the wife the amount which is calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth), and there be a corresponding reduction in the entitlement that the husband would have but for these orders.

   4.That Order 2 has effect from the operative date.

   5.That the operative date of these orders is four (4) business days after the day on which a certified copy of the final signed and sealed orders is served on the Trustee.

   6.That until the happening of any of:

   (a)    The establishment of a separate account in the name of the wife in the fund; or

   (b)    The transfer or “rolling over” into another superannuation fund of the payment split created by Order 2 hereof; or

   (c)    The wife satisfying a condition of release and being paid the payment split created by Order 2 hereof; or

   (d) The wife executing a waiver of rights within the meaning of s 90MZA of the Act in relation to the payment split created by Order 2 hereof;

   the husband be and is hereby restrained by himself, his servants and/or agents from executing a Binding Death Nomination in favour of any person or doing any other act or thing which would render any part of this interest in the fund a “non-splittable payment” within the meaning of Regulation 12 of the Family Law (Superannuation) Regulations2001 (Cth) AND the Trustee of the fund give effect to this order.

   7.That unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:

   (a)    Each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders;

   (b)    With the exception of the superannuation split of the husband’s Company C Super (Member No. …) outlined in Order 1 to 6 herein, each party forego any claims they may have to any additional superannuation benefits belonging to or earned by the other party including:

   (i)The wife forego any claim she may have to the husband’s entitlements in the Military Superannuation and Benefits Scheme;

   (ii)The husband forego any claim he may have to the wife’s entitlements in her CareSuper policy No. …;

   (c)    Insurance policies remain the sole property of the owners thereof;

   (d)    Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.

2. That the wife’s Further Amended Initiating Application filed 30 September 2015 be otherwise dismissed.

3. That forthwith the wife cause a sealed copy of the orders dated 18 December 2015 and the Reasons for Judgment be served upon the husband at his address B Street, Suburb A by pre-paid post.

I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johns delivered on 18 December 2015.

Associate: 

Date:  18 December 2015