Tate and Tate
[2011] FMCAfam 307
•8 April 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| TATE & TATE | [2011] FMCAfam 307 |
| FAMILY LAW – Property settlement – disparity in initial contributions by the parties – mental health issues affecting future employment prospects of one spouse and corresponding additional obligations in relation to parenting and home-making falling upon other spouse – different approach to distribution of tangible assets, superannuation entitlements and entitlement to consumer price indexed benefit – consideration of Veterans Affairs pension as a financial resource – different approaches taken in respect of distributions to be effected – consideration of justice and equity. |
| Family Law Act 1975, ss.75(2), 75(2)(a), (b), (c), (f), 79, (2), (4) Child Support (Assessment) Act 1989 |
| Pastrikos and Pastrikos (1980) FLC 91-987 In the Marriage ofLee Steere and Lee Steere (1985) FLC 91-626 In the Marriage of Ferraro (1993) FLC 92-335 In the Marriage of Clauson (1995) FLC92-595 In the marriage of Whitely and Whitely (1996) 92-684) Russell v Russell (1999) FLC 92-877 |
| Applicant: | MS TATE |
| Respondent: | MR TATE |
| File Number: | BRC 3113 of 2010 |
| Judgment of: | Coker FM |
| Hearing dates: | 23 and 24 February 2011 |
| Date of Last Submission: | 24 February 2011 |
| Delivered at: | Townsville |
| Delivered on: | 8 April 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr Hanlon |
| Solicitors for the Applicant: | Rosen Lawyers |
| Counsel for the Respondent: | Mr Theobald |
| Solicitors for the Respondent: | Trenches McKenzie Cox |
ORDERS
That the Husband pay to the Wife the sum of $54,902 within 42 days of today.
That the Husband transfer forthwith to the Wife all his right, title and interest in the property at Property M, [M], in the State of Queensland being more particularly described as Lot [omitted].
That within 30 days of the payment to the Wife of the monies pursuant to Order (1) hereof the Wife shall procure the release of the Husband in respect of the mortgage to the National Australia Bank being mortgage number [omitted] provided however that if the Wife is unable to procure the release of the Husband from the said mortgage then the Wife shall do all necessary things and sign all necessary documents to effect a sale of the said property and the Wife shall be entitled to retain the whole of the net proceeds of sale.
That forthwith upon payment to the Wife of the monies pursuant to the Order (1) hereof, the Wife transfer to the Husband all her right, title and interest in the property at Property B, [B], in the State of Queensland being more particularly described as Lot [omitted].
That in the event of the Husband not making payment to the Wife of the monies pursuant to Order (1) hereof, then each party do all things necessary and sign all necessary documents to effect the sale of Property B, [B], in the State of Queensland being more particularly described as Lot [omitted], and the Wife shall be entitled to receive the sum of $54,902 from the proceeds of sale, with the balance to be retained by the Husband.
That the Wife shall be entitled to retain for her sole use:
(a)1988 Ford Falcon motor vehicle registration number [omitted];
(b)Cash at bank;
(c)Bowell Scooter
That the Husband shall be entitled to retain for his sole use:
(a)[N] boat;
(b)Great Wall Dual cab ute registration number [omitted].
That pursuant to Section 90MT(1)(b) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of interest held by the Husband in the Defence Force Retirement and Death Benefit Scheme (whether by lump sum or pension) the Wife shall be entitled to be paid thirty per cent (30%) of that splittable payment and that there be a corresponding reduction of the entitlement of the Husband that he would have received in the Defence Force Retirement and Death Benefit Scheme but for this Order.
(a)The operative time for this Order is four (4) days from the date of service of this Order upon the Trustee.
That thereafter each of the parties shall be entitled to retain for their sole use absolutely all other property or financial resources in that party’s power, possession or control provided however that the party retaining any property or financial resource shall indemnify the other in respect of any liability or debt attaching to the property or financial resource so retained.
That all other applications currently before the Court, including any application for spousal maintenance, be otherwise dismissed and that the interim order for the payment by the Husband to the Wife of spousal maintenance be discharged.
IT IS NOTED that publication of this judgment under the pseudonym Tate & Tate is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT TOWNSVILLE |
BRC 3113 of 2010
| MS TATE |
Applicant
And
| MR TATE |
Respondent
REASONS FOR JUDGMENT
These proceedings were commenced on 1 April 2010 by Ms Tate.
I shall, for convenience, refer to her as the wife. The respondent to the application is Mr Tate. Again, for convenience, I shall refer to him during these reasons as the husband. The original application related only to issues in respect of property. Subsequently, the proceedings were amended and orders were sought in relation to the parenting of the two children of the relationship: [X], born [in] 2000, and [Y], born [in] 2002.
To their credit, the parties were able to reach agreement in relation to arrangements with regard to the future parenting of the children and, as such, the only issues that remain for determination are those which relate to the division of property, as between the parties.
The original application filed by the wife sought, in general terms, the transfer by the husband to the wife of any interest he held in two properties jointly owned by the parties. Those properties are situated at Property M, [M], in the State of Queensland and Property B, [B], in the State of Queensland. The wife proposed that, in return for the transfer, she would indemnify the husband in relation to any and all liabilities attaching to those properties. Additionally, the wife proposed that she retain items in her possession including, particularly, a Ford Fairmont motor vehicle and a Bowell scooter. The wife also proposed that the husband should retain a half cabin motor boat in his possession as well as a Great Wall utility and trailer, again, in his possession.
The wife sought also a split of the husband’s interest held in a Defence Force Retirement and Death Benefit scheme which is now paid by way of periodic pension to the husband. Each party, it was proposed, would thereafter retain property in their possession as and for their own property absolutely. The wife’s proposals in relation to finalisation of these proceedings changed little up to the date of the hearing. In fact, the final orders that were sought by the wife in relation to spousal maintenance and property settlement were detailed in the case outline which was filed at the commencement of the hearing. The orders sought were in these terms:
1. That by way of Final Property Settlement and Spousal Maintenance:
1.1That the husband transfer to the wife all his right, title and interest in the property at Property M in the State of Queensland being more particularly described as Lot [omitted];
1.2That each party shall do all necessary things and sign all necessary documents to effect the sale of Property B in the State of Queensland being more particularly described as [omitted] and the net proceeds of sale be divided equally between the wife and the husband;
1.3That within 30 days of the payment to the wife of the monies pursuant to paragraph 1.2 hereof the wife shall procure the release of the husband in respect of the mortgage to the National Australia Bank being mortgage number [omitted] provided however that if the wife is unable to procure the release of the husband from the said mortgage then the wife shall do all necessary things and sign all necessary documents to effect a sale of the said property and the wife shall be entitled to retain the whole of the net proceeds of sale.
2. That the wife shall be entitled to retain for her sole use:
2.11988 Ford Falcon motor vehicle registration number [omitted];
2.2Cash at bank;
2.3Bowell Scooter
3. That the husband shall be entitled to retain for his sole use:
3.1 [N] boat;
3.2Great Wall Dual cab ute registration number [omitted].
4. That pursuant to Section 90MT(1)(b) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of interest held by the husband in the Defence Force Retirement and Death Benefit Scheme (whether by lump sum or pension) the wife shall be entitled to be paid Forty Four Percent (44%) of that splittable payment and that there be a corresponding reduction of the entitlement of the husband that he would have received in the Defence Force Retirement and Death Benefit Scheme but for this Order.
4.1The operative time for this Order is four (4) days from the date of service of this Order upon the Trustee.
5. That pursuant to Section 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect to the husband’s interest in the [H] Superannuation Fund:
5.1The wife shall be entitled to be paid an amount calculated in accordance with the regulations using a base amount, at the date of these Orders, in the sum of One Hundred Percent (100%) and that there be a corresponding reduction to the entitlement the husband would have otherwise had in the [H] Superannuation Fund, but for this Order.
5.2The operative time for this Order is four (4) days from the date of service of this Order upon the Trustee.
6. That thereafter each of the parties shall be entitled to retain for their sole use absolutely all other property or financial resources in that party’s power, possession or control provided however that the party retaining any property or financial resource shall indemnify the other in respect of any liability or debt attaching to the property or financial resource so retained.
It is noteworthy that the wife’s position is not greatly changed, though there are some points of significance. In the first instance the wife does not seek the transfer of the property at Property B, [B], to her, but rather proposes that it should be sold and the proceeds divided equally. Additionally, the wife proposes that there should be a splitting of the husband’s interest in the Defence Force Retirement and Death Benefits scheme, but that it should be divisible upon a percentage of 44 per cent in her favour, rather than 50 per cent percentage which was noted in the initiating application. Additionally, however, the wife then seeks, perhaps in substitution for other amounts which were claimed in the initiating application, the splitting of the husband’s [H] superannuation fund on the basis of 100 per cent of the value of that fund being paid to the wife and that the parties thereafter retain property in their possession.
Overall, there is little great change in respect of what the wife proposes in the ultimate wash-up with regard to distribution of property as between she and the husband.
The husband’s position in relation to the matter was detailed in his response filed in relation to these proceedings on 4 June 2010. The proposals that were put by him at that time included the sale of both of the properties to which I have previously referred and, after payment of all mortgages and liabilities, the equal division of the net equity. The husband also proposed the retention by the wife of the Ford Fairmont motor vehicle and Bowell scooter, as well as the retention by him of the half cabin cruiser, Great Wall utility and boat trailer.
The husband’s proposal in relation to distribution of any interest in relation to superannuation was radically different to that which was proposed by the wife. The husband’s proposal was that all superannuation entitlements be split on an equal basis between husband and wife. Additionally, the husband sought the sale of limited edition framed and numbered prints held by the parties from the artwork of various artists, as well as an equal division of the interest held by the husband in the Defence Force Retirement and Death Benefit scheme.
The husband also proposed further orders including those that related to a re-injection of funds into the joint pool being monies that had been withdrawn by the wife, at or about the time of separation, as well as a more specific delineation of assets of a chattel nature being distributed between the parties. In the final orders sought by the husband, and detailed in his case outline filed at the time of hearing, the orders were significantly pared down. Of course, to some extent, the parties have moved on from the initial flurry associated with the commencement of proceedings and response in relation to them, but there also seems to have been some recognition that division of other assets and property would be a particular difficulty. The final orders sought by the husband were simply in terms as follows:
1. That the husband’s interest in the property situated at Property M be transferred to the wife subject to its present encumbrance.
2. That the wife’s interest in the property situated at Property B be transferred to the husband.
3. That otherwise each party retain as his or her own property all property presently in his or her possession including in the wife’s case her entitlement or interest in her accumulation superannuation funds and in the husband’s case his entitlement or interest in his accumulation superannuation fund.
4. That there be a splitting order in respect of the husband’s DFRDB pension of 20% of each splittable payment in favour of the wife.
5. That the present interim spousal maintenance order be discharge.
As can be noted from the order (5) contained within the final orders sought by the husband, there have been previous proceedings between the parties, in relation to various arrangements with regard to the resolution of financial matters. In particular, an order was made by consent on 8 November 2010 for the payment by the husband to the wife of spousal maintenance in the sum of $225 per week, but at that time it was also acknowledged that the wife would cooperate with arrangements to be taken by the husband to rent the property at Property B, [B], which moneys were then, obviously, able to be utilised by the husband toward, at least in part, the payment of the spousal maintenance claim.
It appears clear now that both parties acknowledge that if property is to be resolved between the parties, that it would include recognition of some component in relation to spousal maintenance and, whilst obligations for payment by the husband to the wife of child support would continue in relation to the children, [X] and [Y], there would be no ongoing liability in relation to the payment of spouse maintenance.
This matter, with respect, would not necessarily seem, on the face of it, to be that difficult an issue for determination. There are certainly some complicating matters that do arise in relation to it, but as the evidence fell in relation to proceedings, it did become a more complicated or convoluted determination than would, at first blush, have appeared to be the case.
The issues which arose and which complicated the matter can be noted as follows:
·The contribution at the commencement of the relationship by the husband and the wife, including consideration of any additional liability of the wife, as required to be repaid by her to her parents.
·The knowledge, if any, of the husband in relation to that liability and whether it had been, as submitted and suggested by the husband, forgiven and to be dealt with pursuant to the provisions of the maternal grandparents’ will.
·The contribution or credit for contribution, if any, to be given in relation to support provided by the husband to the wife’s child of a previous relationship, [Z].
·The interest, if any, in the husband’s DFRDB pension entitlements and the contribution by the wife in relation to same.
·The effect of the husband’s non-splitable entitlement in relation to a Veterans Affairs pension.
Obviously there are a number of issues which need to be addressed in relation to this matter and it would appear that perhaps the most appropriate way to deal with them is to include them in the narrative associated with the assessment of the parties and of the evidence given.
In this instance only two witnesses were called, the husband and the wife. Evidence was certainly available from Mr G, a forensic accountant, who was commissioned by the wife’s solicitors to value the husband’s interest in the Defence Force Retirement and Death Benefit scheme and the pension received by the husband from the Department of Veterans Affairs. Mr G was not required for cross-examination and, it appears, agreed that the gross value, as at 14 January 2010, of the husband’s interest in the Defence Force Retirement and Death Benefit pension is valued at $1,018,272 and the husband’s interest in the Department of Veterans Affairs pension is valued at $532,594.
I accept, as do the parties, that for the purposes of any assessment in relation to this matter those figures are the appropriate figures to be taken into consideration in relation to any assessment. I turn more specifically then, to the evidence of the husband and the wife.
Insofar as the wife was concerned I must say that I was a little troubled by the evidence, at least as it fell from her during cross-examination. Quite simply, there were matters that appeared to be raised during the cross-examination which were not the subject of evidence or disclosure by the wife in relation to her evidence in chief, as contained within her affidavits. Most specifically, that related to the liability which she says was outstanding to the maternal grandparents, Mr and Mrs B.
In particular there appears to have been no reference to that in any of the affidavit material until such time as the wife was called upon to provide some explanation or justification as to moneys that had been removed by her from various accounts or facilities available to the parties and then, subsequently, dissipated. There was also, perhaps to a lesser degree, issues of concern with regard to what motor vehicle or motor vehicles might or might not have been brought into the relationship, as well as issues with regard to the exact calculation of payments made by the wife and the sources of funds used for those payments.
The wife was not, I thought, the most impressive of witnesses when it came to evidence in relation to such matters. The wife denied, for example, that she had ever owned a Daewoo Lanos motor vehicle. Subsequently, however, she acknowledged, when being cross-examined, that she had owned that Lanos, but was unsure whether it had been purchased before or after separation. She also acknowledged during cross-examination that the Holden Vectra, to which she referred as being the vehicle owned by her at the time of commencement of the relationship, was in fact purchased from moneys received from an insurance payout, as well as the sale of the Daewoo.
The wife may have been a little confused as to names of motor vehicles and models of motor vehicles, but the bland denial and then backtracking in relation to the position, when the wife was more pressed in relation to evidence and to the position she took did trouble me somewhat in relation to the matter. Those concerns held by me also flowed into the evidence that was given by the wife in relation to the payment of moneys to her parents in the sum of $30,000.
The wife was adamant that the husband knew of the debt and acknowledged that the debt was one to be repaid to her parents, however I thought that she was unconvincing in relation to much of that and, at least in respect of that particular aspect of the matter, was more inclined to the view and evidence of the husband in relation to there being a debt only known to him subsequent to the relationship and that that debt had been forgiven. I will, obviously, come to the husband’s evidence in that regard in due course.
I was also, I must say, troubled by what I thought was a fast and loose stance taken by the wife in relation to moneys that were removed by her, at the time of separation. The wife became distressed when talking about issues surrounding separation and, whilst it was not clear in the material, it appears evident that the final separation between the parties was one that included significant incidents of violence between the husband and the wife, perpetrated by the husband upon the wife, and that the wife was genuinely fearful for her own wellbeing and the wellbeing of the children in her care.
However, it was difficult to extract evidence from her, particularly evidence which was not necessarily, it would appear, favourable to the wife’s position. For example, the wife was reluctant, I thought, to acknowledge that significant moneys at the time of separation were received by her as a result of payments of long service leave and other entitlements surrounding the husband’s retirement from the defence forces. The wife was more inclined also to suggest that the husband had not made any contributions to continued liabilities and only when pressed did she acknowledge that, subsequent to separation and for a period of approximately three months, she had received the entirety of the husband’s benefits or entitlements, because of the husband being held initially in custody and then in a psychiatric hospital or facility.
Generally, therefore, I was troubled by the veracity of some of the evidence given by the wife in relation to this matter and it led to concerns with respect to contributions made, or at least the value of those contributions, as well as assessments of what might or might not have been the contributions of the husband to the relationship and at the commencement of the relationship.
Having made those comments in relation to the wife, however, there are also, obviously, other necessary findings in relation to the wife at this time. She has done an outstanding job in difficult circumstances with regard to ensuring that there remains available, for the support and nurture of the two children of the relationship, a roof over their head. She has continued, no doubt, with extreme difficulty to meet the ongoing liabilities associated with mortgage payments and other payments associated with continued occupation of the home at [M], as well as to provide for the educational expenses and the day to day needs of the children.
The wife has quite clearly, limited her opportunities for employment so as to be able to provide for the needs of the children and to ensure that their care is able to be met. Obviously, she has had the assistance of her older son, [Z], as well as her mother and father and, as one, they have certainly provided significantly, in relation to issues with regard to the contribution to the household as a homemaker and mother. It is a factor that I would think was prevalent, not only subsequent to separation, but also prior to the separation which occurred in July of 2009 and which was, clearly, a most traumatic and difficult situation not only, one would think, for the wife, but also for the children.
I accept also that the wife did own property including the property situated at [W] in the Northern Territory. At the time, the wife said that she had an equity in that property of $55,000 and, certainly, the husband acknowledged the ownership of the property, though was not able, he said, to provide information as to the equity in the property.
I accept that the wife made a significant contribution at the commencement of the relationship and that that contribution, if one is to exclude the husband’s interest in superannuation entitlements, was certainly one that was significantly greater than the contribution of the husband. I will, of course, comment a little later in relation to issues with regard to contribution during the relationship, and subsequent to separation, when addressing issues in respect of entitlements that might arise in relation to property settlement.
Subject, therefore, to the criticisms and the concerns that have already been expressed by me in relation to this matter, I have no doubts as to the wife’s genuine attempts to maintain and secure property for the benefit of she, the children, and the husband subsequent to separation and she is, of course, to be commended in relation to that particular aspect of the matter.
Turning then to the evidence of the husband in relation to this matter, I must say that, having read the material, I had cause for some concern as to the husband and his ongoing commitment to responsibilities, in relation to the children. That concern was, if anything, increased following the evidence given by the wife, because it became clear that there had certainly been, at or about the time of separation, serious issues of domestic violence of a physical nature between the husband and the wife.
However, when the husband’s evidence was taken in toto, I thought that the husband’s position in relation to this matter was more understandable and, certainly, more tenable. It was clear that the husband was suffering severe and serious disabilities as a result of post-traumatic stress as well as certain physical disability. The husband detailed in his affidavit evidence that he had been diagnosed with a number of complaints, both physical and emotional, which have led to him being declared totally and permanently unfit for work.
Such a determination is not lightly given, certainly by government authorities, and one can only accept that the information provided in relation to the husband’s health is an accurate reflection of his future capacity for work and future entitlements. The husband detailed in his affidavit in support of his initial response, filed on 4 June 2010, some of the emotional and physical difficulties that he experienced. He noted at paragraph 27 of his affidavit that he was diagnosed as having post-traumatic stress disorder, co-morbid with severe clinical depressive disorder. In addition he indicated that he suffered from lumbar-spondylosis, tinnitus and sensorineural hearing loss.
He went on to say, and it was not challenged, that the combination of those mental and physical disabilities had led to him being found unable to work and had led to the assessment of his entitlement to the various pensions, that are received by him.
He also commented upon his current circumstances and the fact that, even when called upon by his solicitors to provide certain information in relation to the financial aspects of the relationship between he and the wife that had led him to become agitated, distressed and to experience mood swings, such that he was more inclined to argument and dispute between he and his new partner.
Again, he was not challenged in relation to those particular aspects of the matter and that is, perhaps, understandable in light of the fact that the wife herself indicated that there were extreme relationship difficulties in the latter part of their relationship arising from the issues with regard to the husband’s health and, in particular, his mental health.
I must say that I was generally impressed with the husband’s evidence and, certainly, where there was difference between the accuracy of certain evidence that was given by the husband or the wife, I am far more inclined to accept the husband’s evidence in relation to this matter. In that regard, in particular, I am satisfied that the husband’s liabilities and assets at the commencement of the relationship were not a shortfall of about $25,000, as suggested by the wife, but perhaps were a situation of there being just about parity between the assets and liabilities of the husband, as at the time of the commencement of the relationship, other than, of course, to recognise that the husband had been, through his employment with the defence forces, contributing to superannuation entitlements even if it were, of course, a non-contributory type fund, for a period of some 13 or 14 years and that that had some significant value.
Additionally, I am satisfied that the husband’s evidence, in relation to acknowledging that there were moneys that had been lent by the wife’s parents to her, at the time of the purchase of the [W] property, were still due and owing, but that over time, there was apparently some indication given that it would be adjusted, pursuant to the maternal grandparents’ will, rather than for there to be a payment. This is a far more accurate reflection of what was the situation, at least until the wife had in her possession or control significant amounts of moneys, and that they were then paid to the maternal grandparents, when same was not necessarily required to be paid or called for in payment.
In that regard I am comforted by the fact that no evidence was called from Mr or Mrs B and the inference that can properly be drawn from that is, of course, to the effect that there was nothing that would be given in their evidence, which would be of assistance to the wife in relation to these proceedings.
The husband was, I thought, at least as best I could assess, regretting the breakdown of the relationship between he and the wife and accepting, to some degree, of his responsibility in relation to that breakdown.
There was also, clearly, an acknowledgement by him that the situation that existed, at or about the time of separation, including serious incidents of domestic violence, were matters which did him no credit and were matters which had not only, of course, affected the relationship subsequent to those incidents, with the wife, but had also affected the relationship between he and the children, [X] and [Y], it being the case that, at the present time, he only spends four hours per fortnight with the children.
He did indicate that he had hopes of an increase in relation to that time and I accept that that is perhaps an accurate reflection of the husband’s hopes and expectations in relation to payment. I was generally impressed the husband’s evidence in relation to this matter and to the open and frank responses which he gave.
I turn now to the law and the course to be followed in relation to this matter. I need, obviously, to look at the law in respect of financial determinations between husband and wife and, in that regard, the relevant law is as follows. Section 79 of the Family Law Act defines the court’s powers in determining applications for property settlement. Subsection (2) of section 79 provides that:
The court shall not make an order under this section unless it is satisfied that in all the circumstances, it is just and equitable to make the order.
Section 79(4) sets out the matters the court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters include:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e)the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The approach to the determination of an application under section 79 is well established by authority (see, for example Pastrikos and Pastrikos (1980) FLC 91-987; In the Marriage ofLee Steere and Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clauson (1995) FLC92-595 and In the marriage of Whitely and Whitely (1996) 92-684). The process ordinarily involves a multiple part procedure.
The court must first identify the assets, liabilities and financial resources of the parties and attribute a value to all assets, usually at the time of the hearing. Thereafter it must evaluate the contributions made by each of the parties as defined in section 79(4)(a) to (c). Finally, the court must consider the financial resources, means and needs of the parties, and other matters set out in section 75(2) in so far as they are relevant. An adjustment of the amount due to each party by way of contribution is then made by reference to the section 75(2) factors. It is not essential, however, that such an adjustment be made. Generally speaking, an adjustment is made because one party has greater needs and the other has stronger means. Section 75(2) is concerned with the process of arriving at a just and equitable result.
In determining what order the court should make under section 79, the court must be satisfied, in all the circumstances of the case, that the order to be made is just and equitable, not simply that the underlying percentage division of the net value of the parties is appropriate. In other words, in consideration of whether the overall result of the order in the property settlement proceedings, is just and equitable (see section 79(2)). It is the justice and equity of the actual orders that the court must consider Russell v Russell (1999) FLC 92-877.
Section 75(2) of the Family Law Act sets out the matters which must be taken into account by the court when determining applications with respect to maintenance. This is the prospective element of the determination of the application for property settlement. The assessment of contributions during the marriage is the retrospective element.
In the Marriage of Ferraro the Full Court said:
A now well established line of authority in this Court indicates the approach normally to be taken in the exercise of the discretion in s79 proceedings. That approach is firstly to ascertain the property of the parties at the time of the hearing, then to consider “contributions” of the parties within paras (a) to (c) of s79(4), and then to consider the matters in paras (d) to (g), more especially para (e) which takes up by reference the provisions of s75(2) and which are generally referred to as the “section 75(2) factors”.
There is of course, therefore, a four step process to be followed in relation to proceedings. Fortunately, there is agreement between the parties as to what the assets of the parties are made up of. They are as follows:
Equity in [M] 225,000
[B] property 160,000
Furniture (wife) 5,000
Cash (wife) 3,000
Scooter (wife) 1,500
Ford (wife) 3,750
Furniture (husband) 2,000
Cash (husband) 60
Cabin cruiser (husband) 4,500
Great Wall vehicle (husband) 14,000Total tangible assets 418,860
Accumulation Super Funds
Husband40,587
Wife40,423
81,010
Defined benefit fund
Husband1,018,272 (incl reversionary benefit)
908,741 (excl reversionary benefit)
Payable56,697 per annum
1,090.33 per week less tax
Obviously, therefore, the tangible assets of the parties, excluding the liabilities which are agreed, is about $418,860. The superannuation accumulation funds held by the husband and the wife total $81,010 and are, within a matter of a few dollars, almost exactly equal.
The Defined Benefit Fund available to the husband has a calculated value of $1,018,272 and that is also accepted for the purposes of these proceedings. It was noteworthy, however, that the Defined Benefit Fund had a value of $1,018,272, but that it included a reversionary benefit which, to all intents and purposes, would be of no value to the wife in relation to this matter and, in fact, if it were the case that the husband were to die, there would be no other entitlement. It was suggested, therefore that any calculation in relation to that matter should be dealt with on the basis of the value of the Defined Benefit Fund excluding the reversionary benefit and that, therefore, it should be calculated on a basis of being valued at $908,741.
For the purposes of the assessment in relation to this matter, I am not necessarily satisfied that that is necessary to be taken into consideration with regard to property settlement because it appears agreed, as between the parties, that some form of distribution or split needs to be effected in relation to the annual entitlement of the husband to the pension, arising from the DFRDB pension and that that has a current value of $56,697 per annum or a weekly payment $1,090.33 per week, which is subject to a taxation liability.
There is additionally, of course, the husband’s disability pension which is not able to be split and that is accepted by the wife. What is clear, however, is that the value of that pension, approximately $26,000 per annum, and therefore valued at about $500 per week, is a financial resource to be taken into consideration in respect of these proceedings.
The pool of assets, be they tangible assets or superannuation entitlements, are clear for the purposes of calculation of distribution in relation to these proceedings.
The second stage or step in relation to the matter is, in my assessment, difficult in light of the various matters which I have already touched upon. It is clear that, at the commencement of the relationship, the wife brought in an interest in the property at [W] though there is, at least to some extent, a dispute as to the net value of that asset, as well as the value of the motor vehicle or even the exact description of the motor vehicle at the time of the relationship being commenced. I accept, however, that there is certainly a difference between what the wife brought in, whether it be in the vicinity of an equity of $30,000 or $60,000, as opposed to what interest might have been held by the husband other than in his DFRDB entitlements, which would appear to be, as best one can assess, perhaps of negligible, if any, value whatsoever.
Subsequent to the commencement of the relationship the parties both contributed financially as best they could. The wife certainly increased her qualifications and it appears clear that, at or about the commencement of co-habitation and from then on, the wife studied so that her qualifications improved from that of [occupations omitted] and that there were corresponding financial benefits associated with that.
I accept, of course, that the husband also was in employment during the entirety of that period and certainly up to his discharge from the defence force, but that work also brought with it obligations, which the husband acknowledged, which had him away [location omitted] or at other places for significant periods of time and that, therefore, prior to the birth of the couple’s children, but certainly subsequent to the birth of [X] and [Y], the wife would have taken on a considerably greater role and responsibility as a homemaker and parent to the children, simply because of the obvious consequence of the husband’s work taking him away.
I am satisfied, of course, that the parties both contributed to an appropriate degree financially during the relationship, but, again, there must be a credit given to the wife in relation to the greater contribution made by her during the period that they were in a relationship as to a homemaker and, subsequent to the birth of the children, to a parent and carer for the children.
Again, when one looks at the situation subsequent to separation, there is a distinct difference between what the wife and the husband brought in by way of contribution. Whilst the husband continued to receive income, and subsequently benefits, the wife’s circumstances changed because of the ongoing and increased responsibilities that she had in respect of the care and supervision of the children.
I am satisfied that there was a significantly greater contribution in all such respects by the wife during the relationship, and subsequent to separation, than the husband and that, whilst it is somewhat difficult to quantify, there must be an appropriate adjustment made to take into consideration both the initial financial contribution, though it would have been eroded over time, as well as the significant contribution of a non-financial nature, including that of both homemaker and parent.
I would assess in that regard also the need to take into consideration that the wife provided what might be called, the “seed capital” which, upon sale of the property at [W] in the Northern Territory, enabled the parties to purchase, initially, two properties in [B], one of which was sold during the relationship, as well as to purchase land at [H] which was sold for a considerable profit during the period of the relationship. That seed capital led then to the opportunity to purchase the property now occupied by the wife and the children at [M] in the south-east corner of the state. They are all matters which should be appropriately recognised in relation to an assessment of the contribution of the parties.
From the husband’s perspective it was contended that, whilst there was certainly a recognition of the wife’s contribution as a homemaker and parent due, in no small part, to the husband’s own situation, arising from the type of occupation he was involved in, there was also a contribution that must be looked at from the perspective of the husband, associated with the fact that he accepted unconditionally, responsibilities in relation to ensuring that there was provision made for the wife’s son, [Z], and that, whilst there was no legal obligation to do so, there was a contribution of a significant nature in that regard.
The husband therefore suggested that there should be an increase, of about five per cent, for the husband’s contribution, in relation to the matter. That was the only adjustment that it was suggested should be made in relation to contributions and that, because of the significant amount clearly that’s attributable to superannuation contributions on the part of the husband, prior to the commencement of the relationship and it is an asset now available, at least insofar as the pension value is concerned, for distribution between the parties, that there should be a finding of an equal contribution, other than an uplift, as a result of the contribution or payments provided by the husband toward the support of the child, [Z].
There is some legitimacy in relation to such a suggestion, but to disregard the very significant contribution by the wife, in respect of her role as homemaker and parent, particularly to the two children of this relationship, as well as the different contributions made by the parties at the commencement of the relationship is, I think, inappropriate.
In the end I have attempted to balance all of the considerations that have been raised in relation to this matter and am satisfied that an appropriate assessment of the value of the contribution of each of the parties at the commencement of the relationship, during the relationship, and subsequent to separation, would place the proportion as between the wife and the husband in the sums of 65 per cent and 35 per cent, in favour of the wife.
I turn then, of course, to the adjustments that are considered pursuant to the provisions of section 75(2) of the Family Law Act. Again, there are competing arguments understandably raised in relation to any adjustment that might or might not appropriately be required.
(2)The matters to be so taken into account are:
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e)the responsibilities of either party to support any other person; and
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l)the need to protect a party who wishes to continue that party's role as a parent; and
(m)if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
From the wife’s perspective there is the strong argument that arises pursuant to the provisions of section 75(2)(b), (c) and (l) relating to the responsibility for the care of the children of the marriage under the age of 18 years. [X] is currently 10 years of age and [Y] is only eight years of age.
There is certainly a significant number of years ahead where the wife will have that primary responsibility in relation to the care and control of the children and, along with that responsibility, will come the obvious hindrance to her opportunity to work in more remunerative employment or even to work in the same role that she works in at the present time, but for more hours. The wife’s evidence, which was unchallenged in that regard, was that she worked, at the present time, about 20 hours per week and the limitation in that respect arose, principally, because of her ongoing responsibilities in relation to the care of the children.
From the husband’s perspective, however, it was contended that there was a factor significant in relation to his circumstances, which would be necessarily required to be considered. They arise as a result of the consideration of the provisions of Section 75(2)(a) and (b).
In particular the age and state of health of the parties is relevant because the wife has qualifications for future employment and it would appear clear that she is in robust good health and that therefore, in time, will have the opportunity and the capacity for greater opportunities for work and, therefore, to increase her income as well as future superannuation benefits and entitlements.
From the perspective of the husband, however, it is strongly contended that the receipt of the DFRDB pension, as well as the Veterans Affairs pension, though they are of course CPI indexed, is, “as good as it gets” in relation to the husband, because of the fact that he has little opportunity for other employment.
The wife contended that the husband had the physical capacity for further work, but, whilst that might be the case, I noted when reading the reports which were, again, unchallenged in relation to this matter, that there was only limited consideration of what work might be able to be available for the husband, including such work as [omitted] or generally unskilled of that nature and, when the pressures of such employment are taken into consideration, along with the fact that the husband experiences serious emotional and mental health issues, it is clear that there would be difficulties that would arise in that regard.
I am satisfied that that is, therefore, a factor which would be of significance in relation to the determination of this matter and that it would be influential in relation to any determination, however whilst the husband’s entitlements would appear to generally be fixed, there is a need to consider the certainty that is available to him, as a result of the entitlements to a DFRDB pension and the Veterans Affairs pension.
There is certainty with what the husband will receive in that regard and it is, clearly, a factor to be considered pursuant to the provisions of section 75(2) and, in particular, section 75(2)(f).
There is a specific requirement, therefore, to consider that issue in relation to this matter though, of course, it must be read in conjunction with subsection (3) which is in these terms:
[Entitlement to pension] In exercising its jurisdiction under section 74, a court shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.
Of course section 75(2) in this matter is specifically being considered in relation to a distribution of property as between the parties and arises specifically pursuant to the provisions and requirements of section 79(4)(e) of the Family Law Act. I am satisfied that, at the very least, there should not be a disregard of the financial resource or benefit available to the husband as a result of those entitlements and, of course, along with them, the obligations that arise in relation to such payments.
There are, therefore, competing elements to be looked at in relation to this matter and I have touched upon them in respect of this discussion. In the end I am satisfied that an adjustment is required in relation to this matter and that it would be appropriate to adjust the contribution in relation to proceedings upon the basis that there would be a five per cent adjustment in favour of the wife.
She may have future prospects or possibilities as to additional income to be received, but, just as clearly, there is certainty in relation to the future for the husband and to his entitlements which outweigh those future prospects and, when taken in conjunction with the ongoing responsibilities of the wife, in relation to the care and supervision of the children, under the age of 18 years and, of course, the need to protect the wife’s role as the parent and carer for the children, there is a need for an adjustment.
Accordingly, I have come to the view that the appropriate adjustment in relation to entitlements as between the husband and the wife, in relation to property is a 70/30 breakdown, in the wife’s favour. What that would mean in relation to these proceedings would be that there would a distribution of the tangible assets as between husband and wife in the following amounts, $293,202 to the wife and $105,098 to the husband.
This could properly be effected by the retention by the wife of the property at [M], subject to her indemnifying the husband in relation to any mortgage attached to the property, as well as her retention of the furnishings, cash, motor scooter and Ford motor vehicle in her possession, and a payment by the husband to the wife of a sum of $54,902.
The husband would be able to raise such funds, either by way of mortgage upon the property at [B], which he would of course retain, or by the sale of that property, at his discretion. He would in addition retain furniture, any cash in his possession, the cabin cruiser, trailer and Great Wall motor vehicle in his possession.
That would then effect a 70/30 distribution between the parties in respect of the immediately realisable assets and, in my assessment, that is a just and equitable distribution of what might immediately be available for the parties.
Insofar as superannuation entitlements are concerned, some different considerations need to be looked at because, of course, they are not immediately realisable, and therefore have only limited immediate benefit to either of the parties. Both the husband and the wife acknowledge that some arrangements need to be made in respect of those entitlements and if, with a current value in total of $81,010, there was to be a distribution of 70/30 between the parties, then the wife would retain superannuation entitlements of $56,707 which would require a transfer to the wife from the husband’s superannuation fund, of a sum of approximately $16,000.
That however, does not reflect the fact that there is a significant distinction to be drawn between what might be the husband’s future superannuation entitlements and what might be available to the wife. Quite simply, the husband’s earning capacity is, as I have found, limited to the DFRDB pension now received by him and Veterans Affairs pension, though both are of course consumer price indexed.
The wife however has a current capacity to contribute to her superannuation entitlements, as well as the statutorily required employer contributions which will be made in relation to any work performed by her, even with respect to the more limited contribution available because of the restriction, at the current time, on the hours that the wife can work. It is a factor which, in my assessment, means that superannuation needs to be considered differently to the distribution of tangible assets, because of the obvious change that will occur over time.
I am satisfied that with each party’s current superannuation entitlements being almost identical, but with there being the real expectation of significant increases in that available to the wife, that it is appropriate that each retain superannuation entitlements currently held in their own name, as and for their own property absolutely. Again I am satisfied that that is a just and equitable resolution of issues with regard to the distribution of superannuation entitlements as between the husband and the wife.
Finally then, I turn to the issues relating to the current benefits received by the husband and what distribution, if any, should be effected in that respect. The husband’s proposal is that there should be a splitting order in respect of his DFRDB entitlements of 20 per cent in favour of the wife. The wife initially proposed that it should be a 50 per cent split in her favour but subsequently suggested, if she were to retain the entirety of the husband’s superannuation entitlements, then that she should receive 44 per cent of the husband’s DFRDB pension or benefit.
I have already indicated what I propose to do in relation to superannuation entitlements of the parties. What needs to be assessed then is how to deal with the benefit received by the husband by way of a weekly payment, which payment is acknowledged to be splittable. There needs also of course to be, however, a consideration of the financial resource available to the husband arising from the Veterans Affairs pension, which currently has a value of approximately $500 per week.
Both benefits received by the husband arise from his employment with the defence forces. The total received therefore is approximately $1600 per week and, in what might be called purely actuarial terms, the husband has contributed entirely to their acquisition during the period from his enlistment until the commencement of the relationship, and the parties have then contributed equally from the commencement of the relationship, until final separation.
Fortunately, those two periods are almost equal and therefore, in mathematical terms, the husband’s contribution to the acquisition of the currently received benefits is 75 per cent and the contribution of the wife is 25 per cent. If that were to be the case, then the wife’s entitlement would properly be able to be fixed at approximately $400 from the current amount received by the husband each week.
However, there is the need to recognise, as was the case similarly with the superannuation entitlements, that the future expectations of each party are somewhat different. The husband’s receipts, subject to consumer price index variations, are fixed. The wife however has far greater expectations now and into the future, which will influence both her income-earning capacity and future superannuation entitlements.
In my assessment that would reduce the entitlement of the wife in total from 25 per cent to perhaps more realistically, 20 per cent of the total receipts by the husband. On current figures, that would be reflected in the wife receiving approximately $320 per week and, whilst there cannot be a split effected in relation to the Veterans Affairs pension received by the husband, an adjustment can properly be made in respect of his DFRDB entitlements which would produce an appropriate payment to the wife on a weekly basis. On current figures, that could properly be reflected in a splittable payment to the wife in respect of the interest held by the husband in the Defence Forces Retirement and Death Benefit Scheme of 30 per cent of that entitlement.
In my assessment, again that would produce a just and equitable distribution of the pension and benefits currently received by the husband in favour of the wife and I intend to so order.
As such, the orders of the court will be:
(1)
That the Husband pay to the Wife the sum of $54,902 within
42 days of today.
(2)That the Husband transfer forthwith to the Wife all his right, title and interest in the property at Property M, [M], in the State of Queensland being more particularly described as Lot [omitted].
(3)That within 30 days of the payment to the Wife of the monies pursuant to Order (1) hereof the Wife shall procure the release of the Husband in respect of the mortgage to the National Australia Bank being mortgage number [omitted] provided however that if the Wife is unable to procure the release of the Husband from the said mortgage then the Wife shall do all necessary things and sign all necessary documents to effect a sale of the said property and the Wife shall be entitled to retain the whole of the net proceeds of sale.
(4)That forthwith upon payment to the Wife of the monies pursuant to the Order (1) hereof, the Wife transfer to the Husband all her right, title and interest in the property at Property B, [B], in the State of Queensland being more particularly described as Lot [omitted].
(5)That in the event of the Husband not making payment to the Wife of the monies pursuant to Order (1) hereof, then each party do all things necessary and sign all necessary documents to effect the sale of Property B, [B], in the State of Queensland being more particularly described as Lot [omitted], and the Wife shall be entitled to receive the sum of $54,902 from the proceeds of sale, with the balance to be retained by the Husband.
(6)That the Wife shall be entitled to retain for her sole use:
(a)1988 Ford Falcon motor vehicle registration number [omitted];
(b)Cash at bank;
(c)Bowell Scooter
(7)That the Husband shall be entitled to retain for his sole use:
(a)[N] boat;
(b)Great Wall Dual cab ute registration number [omitted].
(8)That pursuant to Section 90MT(1)(b) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of interest held by the Husband in the Defence Force Retirement and Death Benefit Scheme (whether by lump sum or pension) the Wife shall be entitled to be paid thirty per cent (30%) of that splittable payment and that there be a corresponding reduction of the entitlement of the Husband that he would have received in the Defence Force Retirement and Death Benefit Scheme but for this Order.
(a)The operative time for this Order is four (4) days from the date of service of this Order upon the Trustee.
(9)That thereafter each of the parties shall be entitled to retain for their sole use absolutely all other property or financial resources in that party’s power, possession or control provided however that the party retaining any property or financial resource shall indemnify the other in respect of any liability or debt attaching to the property or financial resource so retained.
(10)That all other applications currently before the Court, including any application for spousal maintenance, be otherwise dismissed and that the interim order for the payment by the Husband to the Wife of spousal maintenance be discharged.
I certify that the preceding ninety-two (92) paragraphs are a true copy of the reasons for judgment of Coker FM
Date: 8 April 2011
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