Sullivan and Sullivan
[2008] FMCAfam 1215
•12 November 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SULLIVAN & SULLIVAN | [2008] FMCAfam 1215 |
| FAMILY LAW – Property adjustment – notional add back of superannuation vested – spouse maintenance. |
| Family Law Act 1975, ss.75(2), 79 |
| Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 (2003) 30 FamLR 355 AJO & GRO (2005) 33 Fam LR 134, (2005) FLC 93-218 DJM and JLM (1998) 23 Fam LR 396, (1998) FLC 92-816 Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569 Kowaliw (1981) FLC 91-092; (1981) 7 Fam LR N13 |
| Applicant: | MR SULLIVAN |
| Respondent: | MS SULLIVAN |
| File Number: | SYC 3845 of 2007 |
| Judgment of: | Lapthorn FM |
| Hearing date: | 27 June 2008 |
| Date of Last Submission: | 27 June 2008 |
| Delivered at: | Newcastle |
| Delivered on: | 12 November 2008 |
REPRESENTATION
| Counsel for the Applicant: | Ms Christie |
| Solicitors for the Applicant: | Atkinson Vinden Heazlewoods |
| Counsel for the Respondent: | Mr Ladopolous |
| Solicitors for the Respondent: | Staunton & Thompson |
ORDERS
That within 14 days the husband pay to the wife the sum of $5,000.
That provided the husband has complied with order (1) herein the wife vacate the property situated at Property C in the State of New South Wales (“the Property C property”) on or before 17 January 2009.
That upon the wife’s compliance with order (2), the wife provide to the husband a set of current keys to the Property C property to enable him to access it.
That upon the wife’s compliance with orders (2) and (3), the husband be at liberty to access the Property C property in order to effect cleaning, repairs and painting.
That each party contribute equally to the costs of the cleaning, repairs and painting of the Property C property referred to in order (4), whereupon the husband shall pay these costs up-front and provide to the wife copies of invoices for such cleaning, repairs and painting, and the wife’s contribution to such costs shall be paid from the proceeds of sale of the Property C property referred to in order (7).
That within 28 days of the wife’s compliance with orders (2) and (3), the parties do all acts and things and sign all documents necessary, to sell the Property C property for the best price reasonably obtainable upon the following terms and conditions:
(a)
list the Property C property for sale by private treaty with such agent and at such price as the parties agree or failing agreement as nominated by the President of the Real Estate Institute of
New South Wales, the costs of and incidental to such listing to be borne equally by the parties as and when same fall due;
(b)the parties each cooperate in every way with the agents including but not limited to:
(i)making the key available to the agents;
(ii)allowing inspection of the Property C property at all reasonable times requested by the agents;
(iii)doing or saying nothing to hinder or prevent a sale being effected;
(iv)ensuring that the Property C property including the grounds are in a neat and clean condition at the time of inspection by the agents and prospective purchasers; and
(v)signing all documents requested by the agents in relation to the listing for sale of the Property C property except a contract or agreement for sale which has not been authorised by the parties’ solicitors;
(c)the parties each execute a contract for sale in the form prepared by the solicitors having the conduct of the sale, at or above the price pursuant to order (6)(a);
(d)the solicitor nominated by the husband will have the primary conduct of the sale on behalf of both parties provided that the wife’s solicitor will be entitled to independently advise and represent the wife in respect of the sale and all matters arising thereon and any costs properly payable to the solicitor nominated by the husband will be and form part of the legal costs of sale and be deducted from the proceeds.
(e)neither party may confer on any agent without the consent of the other party any right to any sole or exclusive agency in respect of the Property C property or to any commission;
(f)the party not in possession will be entitled upon reasonable notice once per fortnight to enter and view the state of repair of the Property C property;
(g)in the event that the Property C property remains unsold for a period of 3 months from the date upon which it was first listed for sale, the parties will list the Property C property for sale by public auction with such agent as agreed between the parties and failing agreement as nominated by the President of the Real Estate Institute of New South Wales, the costs of and incidental to such appointment to be borne equally by the parties;
(h)the reserve price for the purpose of such auction will be such as the appointed Real Estate Agent advises;
(i)unless otherwise agreed between the parties, in the event that the bidding at the auction does not reach the reserve price the parties may negotiate with the highest bidders or any other interested person and effect a sale of the Property C property at a price which is not more than 10 % below the reserve price;
(j)
if the Property C property remains unsold, the parties do all acts and things and sign all documents necessary to immediately
re-list the Property C property for sale by public auction again, on a date nominated by the agent and at such auction there will be no reserve price.
That on settlement of the sale of the Property C property the proceeds of sale be paid in the following manner and priority:
(a)all costs and expenses of sale including legal costs and disbursements, agent’s commission, valuer’s fees and auction expenses (including repayment of any such expenses as have been paid by either or both of the parties);
(b)the amounts required to discharge the mortgage to Citibank registered over the Property C property;
(c)the amounts required to pay all municipal and water rates, and levies, outstanding with respect to the Property C property;
(d)of the then balance, 56% thereof to the wife, less one half of the costs of the cleaning, repairs and painting of the Property C property referred to in order (5);
(e)the remaining balance to the husband.
That the wife provide the husband access to the Property C property upon four days of him providing her solicitor with written notice of his intention to attend at the Property C property, and he be at liberty to remove and retain as his personal property the items of furniture and chattels contained in the schedule annexed to these orders.
That for the purpose of facilitating compliance with order (8), at the time the husband nominates to attend at the Property C property, the wife shall leave a set of keys at the Property C property in the letter box of that property, and she shall vacate the property for period of six hours to enable the husband to remove the items he is to retain.
That the base amount allocated to the wife out of the defined benefit interest held by the husband in the Commonwealth Superannuation Scheme (“the CSS fund”) is $348,770.
That pursuant to s.90MT(1)(a) of the Family Law Act 1975, whenever the Trustee of the CSS fund makes a splittable payment from the interest held by the husband, the Trustee will pay to the wife or her administrators, executors, beneficiaries, heirs or assigns the entitlement calculated in accordance with Pt 6 of the Family Law (Superannuation) Regulations 2001 and there shall be corresponding reduction in the entitlement the husband would have had in the CSS fund but for these orders.
That order (10) has effect from the operative time.
That the operative time of these orders is 14 days after the date the orders are made.
That the husband serve a copy of these orders on the Trustee of the CSS fund within 7 days of the date of these orders by ordinary pre-paid post.
That the Trustee of the Super Fund, in accordance with the obligations set out under the Family Law Act 1975 and Family Law (Superannuation) Regulations do all such acts and things and sign all such documents as may be necessary to calculate the entitlement of, and make payment to, the wife in accordance with these orders.
That subject to the compliance with these orders the husband and wife each retain to the exclusion of the other all items of real and personal property, superannuation, savings, motor vehicles, furnishings, furniture and household effects, insurance policies, and respective position as at the date of these orders, and indemnify each other in relation to all other liabilities they have in relation to any other property held by them.
That in the event that either refuses or neglects to sign any documents, instruments or writings so as to give effect to these orders within a period of 14 days from the date of being served with a copy of these orders and any such document, instrument or writing, the Registrar of this Honourable Court may pursuant to section 106A of the Family Law Act do all acts and things necessary to give validity and operation to the said document, instrument or writing so as to effect compliance with these orders.
That the parties be at liberty to re-list this matter on seven days notice for the purpose implementation of these orders.
Schedule – chattels husband is to retain
Brass lamp with Cream China Shade (sitting above Hi-Fi on corridor bookcase)
Father’s paintings (2 watercolours)
Large scroll still rolled up in its container (under the stairs)
Green Buddha painting in hallway
The silver spouted decanter the husband’s father gave him (on top of the Korean chest)
The silver tea service, creamers, jugs, teapot and coffee pot, sugar bowls etc
Stone Buddha head (on dragon table in the corner)
Japanese Badger (sitting under the yew coffee table)
Small mosaic inlaid box (on corridor bookcase)
Brass bowl and Arabic teapot that is next to it (corridor bookcase)
Incense burner sitting next to stone Buddha on dragon table
Chinese side table (TV & DVD is sitting on that at present)
Japanese sake set (still in its box in kitchen cupboard above the fridge)
Coddling dish (in kitchen cupboard)
1 bottle of Geikkakan sake in black bottle (in kitchen cupboard)
2 Ceylon figure carvings (standing next to Korean chest)
Japanese mirror (on wall above Korean chest)
Hoskasi Japanese picture (on wall to the left of the TV)
1 Japanese print (to the left of the large water colour in the silver painted frame)
Punch cartoon (above corridor bookcase)
Dog cartoon from Granada TV (above corridor bookcase).
Black Chinese temple rubbing picture (in cracked gold frame in hallway)
Pastel picture of husband as a young boy (in spare bedroom)
Chinese jewellery box chest in the shape of an alter table
Gold Tosakhan dance mask (sitting on yew desk)
Fondue set that is in the laundry (this is the pot, cooker & forks)
The husband’s DVDs Audio tapes and CD’s
The husband’s videos and the 2 bookcases they sit in
The remainder of the husband’s clothes including his Burberry raincoat
The leather & chrome Vassily chair (in bookcase in spare bedroom)
The husband’s theatre & movie books and bookcase by the front door
Brandy Balloon crystal glasses and one Waterford decanter
Four Sherry glasses, either the red or white wine glasses, the Kennedy white house martini glass that the husband’s father got from a presidential reception
FN Nikon camera, contents & case that the husband’s father used in Vietnam (that is in the bottom of the cupboard at the top of the stairs)
Chinese Bactrian camel & horses (sitting on centre coffee table in the living room)
One half of the assorted personal photographs
Amplifier & small DVD player (on the top shelf in the cupboard in the spare bedroom)
Korean drinks chest (in the living room)
The husband’s baby shoes (on the floor under the yew coffee table)
Peach pip carving (on yew side table nearest the kitchen)
The husband’s christening silver backed clothes brush (on yew side table nearest the kitchen)
The husband’s christening silver that is in the kitchen & upstairs cupboards (these include tankards, napkin rings, cups etc)
Some knick knacks and childhood paintings on the bookshelf in the spare bedroom
Brandy balloon warmer the father’s father gave him (on top of the Korean chest)
The Chinese embroidered runner that is sitting on top of the yew desk (in the hallway)
The large round wickerwork Mama San Chair on the balcony,
Indian devil dagger
Napoleonic model soldiers
Changi picture
Small DVD player in spare room
Flokati rug on balcony
2 Japanese vases on balcony
IT IS NOTED that publication of this judgment under the pseudonym Sullivan & Sullivan is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 3845 of 2007
| MR SULLIVAN |
Applicant
And
| MS SULLIVAN |
Respondent
REASONS FOR JUDGMENT
Introduction
Mr Sullivan and Ms Sullivan ask the court for orders in relation to property adjustment as a result of the breakdown of their marriage.
The husband would like to see the former matrimonial home sold and the proceeds divided 55% to the wife and the remainder to him. He also proposes that his superannuation be split equally between the parties.
The wife would like to remain living in the former matrimonial home and therefore asks the court to make an order transferring the husband’s interest in the property to her.[1] She seeks a split of the husband’s superannuation and also periodic spouse maintenance.
[1] This position was submitted at hearing notwithstanding the proposed orders sought in the wife’s Outline of Case Document called for the sale of the former matrimonial home.
There are three personal items the parties also ask the court to rule on.
Short Background
Both parties are 57 years of age. The wife was born in January 1951 and the husband May 1951.
They were together for 35 years having commenced living together in either 1971 or 1972. They married in February 1976 and separated on 1 January 2007.
Mr and Ms Sullivan lived in the United Kingdom until immigrating to Australia in 1978. They did not have any children.
Evidence
The husband relied on his affidavit filed 18 February 2008, his financial statements filed 18 and 26 February 2008 and the affidavit of his brother, Mr R filed 26 February 2008.
The wife relied on her affidavit filed 14 February 2008, her financial statement filed 15 June 2007 and the affidavit of her treating oncology specialist, Dr M filed on 19 October 2007.
The parties also relied on the affidavits of Mr N filed by leave in court on 27 June 2008 and Mr G filed 29 August 2007.
Documents were tendered at the hearing.
Both the husband and wife gave evidence and were cross-examined. The husband presented as a person frustrated by the litigation process. He appeared intolerant of the questions asked of him and also appeared at times to avoid answering those questions directly. I was however left with the impression that this was more out of frustration rather than any attempt to deliberately mislead the court. Litigation, especially when it is conducted in an adversarial way, can prove difficult for many people in the community and it is not always possible for them to hide their frustration with the process.
The wife also appeared to be distressed by the process and possibly her state of health.
At the end of the day I was satisfied that both parties gave their evidence to the best of their ability and in an honest way. Some of their evidence differed but I am not persuaded either party deliberately gave false evidence. It is possible for people to have different perceptions of events and I am satisfied that that is the case here. For example the wife clearly viewed the separation as a desertion of her by the husband. She believes that he did not want to remain with a “sick wife”. The husband denied this and presented as frustrated if not offended by such accusations. They each gave evidence of conversations and actions in support of their various view points. This issue is not one that I need to determine in order to decide what orders should be made, however I am satisfied that each party honestly believes their version of events surrounding this issue. As both of them have been treated for depression it is not surprising they would view these events differently.
When the parties commenced to live together they rented accommodation in the United Kingdom until they purchased their first property at [omitted] in Cheshire. This was in around 1975. The property was purchased from the joint savings of the parties and by way of mortgage. Both parties worked at this time, he with [omitted] and the wife as a [omitted]. The parties pooled their incomes and applied it toward the mortgage and general living expenses.
That home was sold in around 1978 or 1979 and the parties netted approximately £16,000 from the proceeds of sale. They then migrated to Australia. The proceeds of sale of the Cheshire property dissipated over time after the parties bought household goods and used them for general living expenses in Australia.
They initially rented accommodation in Sydney. The husband commenced work with [omitted] in 1979 and remains there today. The wife worked as a [omitted] for a number of agencies since arriving in Australia. The parties continued to pool their incomes until separation.
The first Australian property the parties purchased was an apartment in [R]. They purchased this in 1992 for approximately $60,000. It was financed almost entirely by way of borrowings. The parties then sold the property for $72,000 netting approximately $7,000. For sometime they continued to rent.
The former matrimonial home was purchased in around 2001. The purchase price was $350,000 and it was financed by way of a $60,000 deposit from the party’s joint savings and by a mortgage from Citibank. The parties remained living in that property until separation when the husband moved out. The wife remains living there. The husband is living in a house owned by his brother, Mr S. He does not pay rent to his brother.
In January 2005 the wife was diagnosed with breast cancer and ceased work in order to have treatment. In October of that year she returned to part-time work.
In December 2006 the wife travelled to the Untied Kingdom to visit her family and the parties separated on a final basis upon her return in January 2007. At around the time of separation the wife developed a chronic anxiety disorder and ceased work in February 2007. She was hospitalised and referred to the [R] Mental Health. She takes
anti-depressive medication in particular Zoloft. Documents tendered[2] from the [Y] Hospital and [R] Mental Health indicate that the wife has had major difficulties in relation to depression with concerns for her day to day living and possible self harm.
[2] Exhibits W1 and W2
The husband complains that the wife has not maintained the property since separation telling the court that it is in disrepair and not presentable for sale. The husband has paid the mortgage since separation.
The husband has been a member of the Commonwealth Superannuation Scheme since January 1989. This is a Defined Benefits Fund and was valued by Mr N, the single expert, as at 1 June 2008
at $601,329. Both parties agree that the fund is divided into
two components. The funded component is valued at $180,191 and the unfunded component or pension is valued at $421,138. The court has been told that if the pension component was divided equally the parties would be able to obtain a pension of $25,510 per annum which would net a weekly figure of $441. The wife would be entitled to that pension now if a splitting order was made as she is unable to work as a result of her health. The husband does not intend to retire at this stage. His part of the pension, if a splitting order was made, would be available when he chose to retire.
Because the husband has been employed by [omitted] for a lengthy period of time he has accumulated annual leave and long service leave. His evidence was that he was not entitled to cash in the accumulated leave. The wife concedes there was insufficient evidence to quantify the value of the leave but invited the court to have regard to this resource of the husband. The husband gave evidence that he is prohibited from working elsewhere whilst on paid leave from the [omitted] and therefore invited the court to find that it was not a resource that should be taken into account.
The husband indicated in his evidence that he would need to continue working at least until 65 years of age and may continue beyond that.
Since the parties separated the husband has consulted Dr H for depression. His evidence is that he has been prescribed Zoloft. He sees a psychologist for grief management.
The husband’s mother passed away on 11 February 2007. He inherited some furniture and personal effects of hers.
Because the husband paid the mortgage post-separation he says that he could not afford to rent elsewhere. His brother Mr S offered him accommodation at [K] rent free. His evidence is that he is not able to continue to have this rent free accommodation long term. The husband had access to the garage at the former matrimonial home. Both parties have contributed equally to the body corporate fees and rates.
The wife says that during the marriage she preformed all of the household duties of cleaning, cooking, maintenance and repairs. She says she also attended to all of the household bill payments and budgeting.
The wife was diagnosed with breast cancer in January 2005. She underwent Chemotherapy however in June of that year underwent a mastectomy of her right breast. She then received radiotherapy until September 2005. Her prognosis is that she is currently in remission but is required to have 3 monthly check ups with Dr M. She has bi-annual visits with her Oncologist Dr B.
From March 2007 the wife had no income. She used her credit cards to meet her living expenses and since September 2007 has received the New Start Allowance. In March 2007 the wife accessed her Superannuation fund to meet her credit card bills and to pay for legal fees.
Issues
The court in order to determine this matter has been invited to make a number of findings in relation to:
a)How to treat post-separation issues and in particular:
i)the husband’s payment of the mortgage whilst the wife has been living in the former matrimonial home and the husband has had accommodation elsewhere;
ii)the wife’s withdrawal of her superannuation;
iii)the parties respective debts; and
iv)the post-separation increase in the husband’s superannuation;
b)What weight should be given to the income disparity between the parties;
c)Whether the wife should be permitted to retain the former matrimonial;
d)The husband’s capacity to pay ongoing spousal maintenance.
The law
In determining property proceedings the court is required to conduct a four staged process. The first task is to identify the assets, liabilities and financial resources of the parties at the time of the hearing. The court then considers the contributions made by the parties before looking at their future needs. Finally the court needs to be satisfied that the orders are just and equitable.[3]
[3]Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143, (2003) 30 FamLR 355, S79 Family Law Act
The property of the parties
The parties agree as to the value of the assets and liabilities although they disagree as to whether there should be a notional add back in relation to the superannuation that the wife had withdrawn in 2007.
The husband’s superannuation is a significant component of the parties’ financial affairs. The court has a discretion as to how superannuation is to be treated and each case will be determined on its own facts and circumstances.
In this case both parties submitted the court should treat the superannuation of the husband separate from the asset pool. I am satisfied, given the significant value of the superannuation in the context of the overall asset pool, that the superannuation should be treated as a separate item.
I do not intend to include the husband’s accrued leave entitlements because firstly they are not quantifiable and secondly I accept the husband’s evidence that he can not work elsewhere during that leave.
Notional Add back of the wife’s superannuation
The wife withdrew all of her superannuation in March 2007. She received $46,589. Some of this money went towards living expenses and some of it towards her legal fees.
It is open to a court, in appropriate circumstances to exercise its discretion and notionally add back into a pool of assets for distribution funds that no longer exist. The adoption of that course will depend on the facts of each case. The Full Court of the Family Court in AJO & GRO[4] summarised the three categories of such cases:
a)Where the parties have expended money on legal fees[5];
b)Where there has been a premature distribution of matrimonial assets[6]; and
c)Where a party has by a course of conduct reduced the value of an asset or where the party has acted recklessly, negligently or wantonly with the matrimonial assets effectively reducing their value.[7]
[4] (2005) 33 Fam LR 134 at p144, (2005) FLC 93-218 at p79,617
[5] DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816
[6] Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569
[7] Kowaliw (1981) FLC 91-092; (1981) 7 Fam LR N13
I accept the wife’s evidence that she used her credit cards to pay for living expenses and legal fees and paid those credit cards from her superannuation payout. Since March 2007 the wife has not been working whereas the husband has continued his paid employment. The reason for her ceasing to work was directly related to her health issues rather than any deliberate action to cease work and draw down the parties’ capital. I find that she needed to access the superannuation fund to meet the short fall between her social security payments and her expenses.
This issue is important because part of these funds was utilised for the payment of legal fees. The husband borrowed monies to go towards his legal expenses. He argues that the funds would have been available to the parties if it were not for the withdrawal and by not adding the legal fees component back would in effect result in the husband having contributed towards the wife’s legal fees as well as his own which would amount in effect to the making of a costs order against him. Counsel for the husband argued that if there was a notional add back it would not be appropriate to include the husband’s loan as this was primarily utilised for the payment of his legal fees.
Legal fees clearly fall within the type of payments usually added back into the pool of assets. I accept the husband’s submissions that there is a risk of him being burdened with sharing the wife’s legal fees if the sum is not added back.
The evidence of the wife suggests the amount attributable to legal fees is approximately $35,000.
Ms Christie for the husband argued if the court added that amount to the figure attributable to her bank account it would be close to the amount withdrawn from the superannuation fund and it would therefore be appropriate to add back the withdrawn sum. I accept this submission and will add back the superannuation withdrawn.
Post separation acquired debt
The wife has credit card debts of $26,699 and the husband has a David Jones Card of $2,500 and a loan with Credit Union Australia for $18,962.
I am satisfied that the wife used her card to meet her living expenses and legal fees. I have already referred to how the payment of her legal fees should be treated. Given the wife accrued the credit card debts whilst she was not working and that these living expenses were modest given the eighteen months since separation, it is appropriate for the debt to be included in the list of liabilities.
The husband’s credit union loan was primarily used for the payment of his legal fees. For the same reasons discussed in relation to the add back of the wife’s superannuation funds it would not be appropriate to include this loan in the list of liabilities.
I am not persuaded that the sum of $2,500 for the husband’s David Jones card should be included as the husband has been earning an income post separation and would have been able to meet his commitments in relation to this debt.
I find from the evidence that the assets of the parties are as follows:
| Description | Possession | Value |
| Property C, NSW | Joint | $445,000 |
| Shares | Husband | $1,708 |
| Notional Add Back of Wife’s Superannuation | Wife | $46,589 |
| Motor Vehicle | Husband | $2,000 |
| Total | $495,297 |
I find from the evidence that the liabilities of the parties are as follows:
| Description | Possession | Value |
| Mortgage with St George Bank | Joint | $159,881 |
| Credit Cards | Wife | $26,699 |
| Total | $186,580 |
I find that the net position of the parties is $308,717.
I find from the evidence that the financial resources of the parties are as follows:
| Description | Possession | Value |
| Superannuation | Husband | $601,329 |
Contributions
I now turn to the second step in the exercise namely an assessment of the parties’ contributions.
At the commencement of the relationship neither party had any assets or liabilities of significant value. I therefore find that they commenced their relationship by making equal contributions.
Each party submitted that during the marriage contributions were equal and I am satisfied on the evidence that that is the case.
The husband argued that post separation he made a greater contribution than the wife because his superannuation has increased considerably since the date of separation. The wife disputes the extent of extra contribution by the husband but in closing submissions her counsel conceded that the husband made a slightly greater contribution than her because of his continued payment of the interest on the mortgage and other house related expenses post separation but Mr Ladopoulos argued that in the context of a 35 year relationship, the contributions made over the 18 months of separation to the date of hearing should be accorded little weight. He submitted on the wife’s behalf that if there is to be any recognition of greater contribution it should be limited to one or two percent.
Although the husband’s superannuation has increased significantly since separation he has not made any special payments. He continued to make payments to his superannuation and made payments towards the mortgage and rates. For these reasons I find that although the husband has made a greater contribution than the wife post separation when that is weighed against the length of the relationship I find that the greater contribution should only be assessed at two percent.
Weighing up the various contributions of the parties I find that these should be assessed at 52% to the husband and 48% to the wife.
Section 75(2) factors
Having determined the contribution elements the court is required to have regard to the provisions of s.75(2).
Both parties are 57 years of age and both have had health issues associated with anxiety and depression. The wife has also suffered breast cancer which is currently said to be in remission. The wife says that she is not fit to return to work and has not been in that position since March 2007.
The husband despite his treatment for depression maintains his employment. He anticipates working until he is 65 or even beyond.
I accept the evidence of both parties in relation to their health and employment status.
The husband earns approximately $76,000 a year.[8]
[8] Exhibit H4
I propose to make a splitting order for the husband’s superannuation that would entitle the wife to access a pension. Counsel for the husband informed the court that if the unfunded component of the husband’s superannuation was divided equally between the parties the wife would be entitled, because of her inability to work, to a pension of $25,510 per annum which would equate to a net figure of $441 per week. The amount would be higher if the percentage split was greater than 50%.
Neither party has any child or other person to provide for.
When I weigh up the health of the parties and the significant difference in income between the husband and wife I find that there should be an adjustment in the wife’s favour of 10%.
Section 79(2) – just and equitable
The fourth stage of the process is to step back and assess whether in all of the circumstances it is just and equitable to make the orders to be proposed.
The percentage division that I have found to be appropriate in this case is 58% to the wife and 42% to the husband.
The wife would like to keep the former matrimonial home. In order to do so she would need to refinance the mortgage whether she was to receive the whole of the non-superannuation assets. Although she gave evidence of being interested in a reverse mortgage she did not appear to understand how such mortgages worked and there was no evidence that she would be able to obtain one. I am not satisfied on the evidence that the wife would be in a position to obtain finance.
One option open to the court is to make orders providing for the wife to receive all of the non-superannuation assets and a reduced split of the husband’s superannuation. Although this would see the husband retain the greater share of his superannuation he would have to wait until he retires to access it. I am not satisfied that this would provide justice and equity between the parties. I accept the husband’s evidence that he may find the need to work past 65 and therefore would have around 10 more years to wait before receiving his component of the matrimonial distribution. The wife on the other hand would not only receive the home but would be able to access her part of the superannuation as she is not working. This would be unfair to the husband.
The orders sought by the husband provided for the wife to receive 55% of the proceeds of the sale of the former matrimonial home not the pool of assets as a whole. When the court considers the wife’s superannuation added back and her credit card debts a division of 58% would be achieved if she received 56% of the proceeds of sale.
The husband argues for equal distribution of the superannuation. Whilst this argument has appeal firstly as to simplicity and secondly to recognise the equal contribution during the marriage I am not satisfied that justice and equity would be achieved if the percentage distribution I have found to be appropriate was not also applied to the superannuation. Although both parties argued for treating the superannuation separately, a request to which I have acceded, given the disparity of income between the parties and my finding that the wife is unlikely to be able to refinance the property in order to keep the former matrimonial home, I am satisfied that for there to be equity between them the percentage division needs to apply to both the superannuation and non-superannuation components. This would also enable the wife to receive a larger weekly pension to assist with future rental expenses. For those reasons I will make orders providing for the wife to receive 58% of the husband’s superannuation by way of splitting order.
I am satisfied that it is appropriate to make an order that the former matrimonial home be sold. The husband is concerned that the property is not in a fit state to be marketed. He seeks an order for him to be appointed trustee for sale and for the wife to vacate the home. He would then ensure that home is cleaned and repaired where necessary and generally prepared for sale. He offered the wife $5,000 to assist her with meeting the rental bond and initial rent expenses but sought in his orders that that sum be repaid to him from the wife’s share of the proceeds of sale.
In support of his position he relied on the evidence of his brother,
Mr R, as to the state of the home and exhibit W1, which is the file from [Y] Hospital. The tags the court was directed to by counsel for the husband show recorded observations by third parties that the home was unkempt as at December 2007. This appears to be as a result of the wife’s medical condition. The husband argues that if the wife remains living in the home it will not be presentable for sale.
Whilst I am satisfied that there is evidence that the wife’s medical condition has affected her ability to focus on maintaining the home I am not satisfied that there is any evidence she will hinder the ongoing sale if ordered. For that reason I am not persuaded that the husband should be appointed trustee for sale but I accept that in order to obtain the best possible price for sale it is appropriate for the wife to vacate the property and that the parties share in the costs of preparing the property for sale. The wife would only be able to vacate the property however if the husband provided her with the $5,000 he offered during the hearing and she has had time to convert the superannuation to a pension. I propose to allow her two months in order to achieve that.
I am not satisfied that the $5,000 should be returned to the husband from the wife’s share of the proceeds of sale. This payment is more akin to spouse maintenance. For the reasons I will discuss below I am not persuaded the husband is in a position to make ongoing periodic spouse maintenance but I am satisfied that his offer to assist the wife in this regard would not have been made if he would not have been in the position to provide it.
Periodic Spouse Maintenance
The wife seeks a periodic spouse maintenance order. I accept the wife’s evidence that she is not able to work and therefore find that she has established need.
The husband argues that he does not have the capacity to pay a periodic sum. The figures in his financial statement proved to be inaccurate in part when he gave evidence however overall I find that despite a not insubstantial income of around $76,000 per annum his expenses, which are generally reasonable, take up a considerable amount of his income. He argued that he did not have capacity to pay.
A simple mathematical calculation will not assist in this case because there are a number of variables and unknowns. At the time of the hearing the husband had been enjoying rent free accommodation in a house owned by his brother. There is insufficient evidence to find that this benefit will continue indefinitely although I am satisfied that it would be available to the husband in the short term. As a result of the orders I propose to make the house will have to be sold and the husband will then not have the expense of making mortgage payments but at some stage in the future he will have to pay rent. Given the amount of mortgage payment listed in his financial statement was modest I do not have confidence he would save much by paying rent.
When I weigh up the expenses he listed in his financial statement, concluding that for the most part they are reasonable, I am satisfied that there is no surplus available to meet an ongoing commitment to spouse maintenance. Even when I take into account his annual earnings were about $6,000 more than he estimated in his financial statement I am not satisfied that he would have a surplus or if he did it would be so modest as to not warrant diminishing it to pay periodic spouse maintenance given the vicissitudes of life would mean that there would be weeks that he would have extra expenses eating away at that surplus. In those circumstances I exercise my discretion to not make any order for periodic spouse maintenance.
Personal Items
The parties reached agreement about a number of items of furniture but could not agree in relation to three items. The each want the leather and chrome Wassily chair, the dining table and chairs and the Korean drinks chest.
The wife argued that these are items she would need to replace and because of her financial position she would not be able to do so.
The husband says that when one considers the list of items he has elected to take his request is very modest and should be accepted. The majority of items listed in the schedule that became exhibit H1 are small items of personalty. I am satisfied that the items he seeks are modest and that he should be able to keep the leather and chrome Vassily chair and the Korean drinks chest.
Whilst both parties would need a dining table and chairs the husband’s income is such that he is in a better position than the wife to buy another dining suit. I am therefore of the view that the wife should retain that item and will not include it in the schedule of items the husband may retain.
Conclusion
For the above reasons I will make the orders set out in the beginning of this judgment however I will give the parties liberty to re-list the matter on seven days notice in relation to the implementation of the orders or in case the base amount allocated in the orders for the husband’s superannuation does not reflect the 58% distribution that I have found to be appropriate.
I certify that the preceding eighty-four (84) paragraphs are a true copy of the reasons for judgment of Lapthorn FM
Associate: Helen Drysdale
Date: 12 November 2009
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