Tearle and Tearle
[2008] FMCAfam 270
•28 March 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| TEARLE & TEARLE | [2008] FMCAfam 270 |
| FAMILY LAW – Property settlement – substantial initial contribution by husband – future needs of wife – large number of young dependant children – leave to re-open husband’s case – costs. |
| Family Law Act 1975, ss.75(2), 79 |
| Farnell & Farnell (1996) FLC 92-681 Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 Norbis v Norbis (1986) 161 CLR 513 Pierce v Pierce (1998) FLC 92-844 Rosati & Rosati (1998) FLC 92-804 Williams & Williams [2007] FamCA 313 |
| Applicant: | MS TEARLE |
| Respondent: | MR TEARLE |
| File Number: | WOC 524 of 2007 |
| Judgment of: | Altobelli FM |
| Hearing date: | 15 November 2007 |
| Date of Last Submission: | 4 February 2008 |
| Delivered at: | Sydney |
| Delivered on: | 28 March 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr Foster |
| Solicitors for the Applicant: | Johnson Horsley Solicitors |
| Counsel for the Respondent: | Mr Gould |
| Solicitors for the Respondent: | Hansons Lawyers |
ORDERS
That within 60 days of these Orders (“the due date”) the husband pay to the wife the sum of $186,268 by way of full and final property settlement.
That upon compliance with Order 1 herein, the husband be entitled to retain all of his right, title and interest in the following properties:
(a)Property D; and
(b)Property M.
That in the event the husband does not comply with Order 1 herein by the due date, the wife has leave to relist this matter before Federal Magistrate Altobelli on seven days notice as regards the enforcement of these Orders.
That the Court allocate as required by s.90MT(4) of the Family Law Act 1975 a base amount of $120,595 to the wife out of the husband’s interest in Axxx Super.
That in accordance with s.90MT(1)(a) of the Family Law Act 1975 whenever a splitable payment becomes payable, that Axxx Super:
(a)Pay to the wife or the wife’s legal personal representatives the amount calculated in accordance with part 6 of the Family Law (Superannuation) Regulations 2001; and
(b)Make a corresponding reduction in the entitlement the husband would have had in Axxx Super but for this Order.
That the Trustee of Axxx Super (“the Trustee”) do all such acts and things and sign all documents as may be necessary to:
(a)Calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 the amount to be paid to the wife pursuant to Order 7 of this Order;
(b)Pay the amount whenever the Trustee makes a splitable payment out of the husband’s interest in Axxx Super.
That this Order have effect from the operative time and the operative time is four business days after the service of a sealed copy of these Orders upon the Trustee.
That the Trustee do all such acts and things and sign all documents as may be necessary so that in accordance with the obligations set out under the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001, the Trustee can calculate the amount due and make payment to the wife in accordance with Orders 9 and 10 of these Orders.
That the wife do all things necessary, included but not limited to, exercising her request pursuant to r.7A o6(1) of the Superannuation Industry (Supervision) Regulations 1994 for the rollover or transfer of the amount due to her out of the husband’s interest in Axxx Super to the fund of the wife’s choosing in accordance with r.6A.12 of the Superannuation Industry (Supervision) Regulations 1994.
That pursuant to r.14F of the Family Law (Superannuation) Regulations 2001, any payments from the husband’s superannuation interests made after the Trustee has rolled over or transferred the amount due to the wife to a fund of the wife’s choosing are not splitable payments.
That having been accorded procedural fairness, these orders require the Trustee to observe the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001.
That within 14 days from the making of these Orders the wife do all things necessary to transfer to the husband her interest in the parties’ joint interest in the time share holding of 6000 Premier Holiday credits with Txxx Limited and the husband indemnify the wife from all or any liability in relation to any debt attached to such time share holding.
That within 14 days of the making of these Orders the husband and wife do all things necessary to invest monies presently held by the husband on trust for the children of the marriage in a joint IMB investment account requiring the signatures of both parties to withdraw funds therefrom and that the parties shall thereafter hold such funds on trust for the children for the purposes of their education and advancement in life.
That otherwise each party be entitled pursuant to s.79 of the Family Law Act 1975 to retain any asset or personalty in that party’s name or possession as at the date of these Orders and that each party shall pay and bear responsibility for any debt in that party’s name or attaching to any asset being retained by that party pursuant to these Orders.
The wife pay the husband’s costs of the Application in a Case filed
30 November 2007in the amount of $500, such amount to be paid within 60 days of the making of these Orders.
IT IS NOTED that publication of this judgment under the pseudonym Tearle & Tearle is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT WOLLONGONG |
WOC 524 of 2007
| MS TEARLE |
Applicant
And
| MR TEARLE |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for alteration of property interests under s.79 of the Family Law Act, commonly known as a property settlement. The applicant wife is 45 years old and currently receives Centrelink benefits. The respondent husband is 44 years old and is a tradesman currently earning about $1,800 weekly. They commenced cohabitation in 1992, married in 1995, and separated in 2005 after about 13 years of cohabitation. They have five children between the ages of two and eleven. The husband and the wife have been unable to reach agreement about their property settlement. These reasons explain why the Orders I have made represents, in my opinion, a just and equitable alteration of property interests between them.
Background
The family lives and works in the South Coast of the New South Wales. There were a number of issues in relation to their asset pool that I deal with below, but most of their asset pool is represented by real estate owned by either of them, and superannuation which is mostly that of the husband. It is a reflection of the industriousness of these parties that there are no relevant liabilities. The wife concedes that the husband came into their relationship with his property at Property M, unencumbered, his interest in Property D subject to a mortgage, and superannuation having a value of about $25,000. All three of these assets remain today and are found in the asset pool. The wife therefore concedes that the husband made a greater contribution in a financial sense at the commencement of their relationship. The issue, in respect of which they have not been able to agree, is how precisely that is quantified in their property settlement.
The husband asserted, through his counsel Mr Gould, that his contribution was significantly greater than that of the wife and that on contribution alone he should be entitled to 70 percent of the combined pool of superannuation and non-superannuation assets. The s.75(2) adjustment favours the wife to the extent of 20 percent, according to Mr Gould. Thus, from the husband’s perspective, the outcome should be 50:50 in the end result.
The wife asserted, through her counsel Mr Foster, that whilst the husband’s contribution was greater at the time of cohabitation, when one has regard to the diverse contributions made by both parties during their relationship, the husband is only ahead by five percent, so that contribution should be 52.5 percent to the husband, and 47.5 percent to the wife. In relation to s.75(2) factors he submitted that the number of children in the mother’s primary care, together with a significant income earning disparity, meant that these factors should be at least 25 percent. Thus from the wife’s perspective the final outcome should be at least 72.5 percent in her favour, across the pool of assets.
The five children of the marriage are aged eleven, ten, nine, six and two. They live with the wife but spend alternative weekends plus block time during the school holidays with their father. He pays child support which he said was $413.50 weekly in his financial statement filed
19 October 2007.
After separation the parties sold a Property V. The net sale proceeds together with other joint funds were used by the wife, with the consent of the husband, to acquire in her name only Property F. This is now the home for the wife and the children.
As the issues have emerged in this case, it is not necessary to set out a detailed financial history of the marriage. Relevant transactions will be discussed, as appropriate. The husband worked throughout the marriage. His skills as a tradesman were obviously very valuable to the mining industry in the NSW South Coast region. The wife was employed as an applied scientist at cohabitation but was then primarily concerned with supporting the husband from home and attending to the needs of their rapidly growing family. They were obviously both diligent in the roles they adopted within their marriage.
Issues
The issues in this case are relatively discrete and consist of:
a)Identifying the pool of assets and liabilities having regard to issues that arose about capital gains tax liabilities, add-backs, and the value that should be adopted for the wife’s interest in her home at Property F; and
b)Assessing the weight to be given to the initial contribution of the husband as a result of him bringing in various assets; and
c)Assessing the future needs factors in this case which clearly favour the wife; and
d)Making an order that is just and equitable having regard to the pool of assets and liabilities, and the circumstances of this case.
The Applicable Law
The preferred approach to the determination of an application under s.79 of the Family Law Act is set out in a passage found in the Full Court’s decision in Hickey & Hickey & Attorney-General of the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at 39.
The Full Court states that there are four inter-related steps:
a)Identify and value the property, liabilities and financial resources of the parties; and
b)Identify and assess the contributions of the parties and express them as a percentage of the net value of the property; and
c)Identify and assess the other facts relevant under s.79(4)(d)-(g) including s.75(2) and determine the adjustment (if any) to be made to the contribution entitlements at step two; and
d)Consider the effect of the above and resolve what order is just and equitable in all the circumstances.
One of the legal issues that arises is whether I should adopt a global or asset-by-asset approach to contribution. The authority in this regard is, the High Court’s decision in Norbis v Norbis (1986) 161 CLR 513 per Wilson and Dawson JJ at 534-5. It is clear from this statement of the law that either approach is available to me, in part or in whole. My discretion in this regard should be exercised having regard to the facts of this case.
Another issue in this case is how, precisely, I should weigh and assess the initial contribution made by the husband in bringing property into the marriage. In this regard, I need to consider the decision of the Full Court in Pierce v Pierce (1998) FLC 92-844. A useful recent decision of the Full Court examines its earlier decision in Pierce v Pierce together with a later case. In Williams & Williams [2007] FamCA 313 the Full Court states as follows at paragraphs 27, 28, 29 and 32:
27. In Pierce v Pierce when speaking of the relevance to be paid to initial contributions the Full Court (Ellis, Baker and O’Ryan JJ) …28.…said at [28]:
In our opinion it is … a question of what weight is to be attached, in all the circumstances, to the initial contributions. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.
29. Pierce v Pierce was a case in which the husband brought in $200,000 cash into the relationship. He applied that money towards the purchase of a matrimonial home. He was employed throughout the marriage and supported the wife who, whilst in some paid employment primarily attended to domestic tasks and taking care of the children. The Full Court assessed the parties’ respective contributions to a pool of $320,000 as 70 per cent in favour of the husband and 30 per cent in favour of the wife at the end of a 10 year relationship.
32. In Hunt v Zuryn (2005) FLC 93-226; (2005) 34 Fam LR 169 the Full Court (Kay, May and Boland JJ) allowed an appeal in a property case where a pool of assets of $1.12million had been assessed for contribution purposes as 75 per cent in favour of the husband and 25 per cent in favour of the wife. The Court in allowing the appeal indicated that an assessment of 75:25 fell outside the realms of an acceptable range saying at 79,730; 170:
Such an assessment ought adequately recognise that much of the parties’ wealth can be attributed to the capital growth in the assets introduced by the husband at the commencement of the marriage but at the same time bringing into consideration a myriad of other contributions each made in the course of their relationship.
Accordingly, I must not only identify the contributions of each party, but also assess the weight to be attributed to these contributions having regard to many factors including what has occurred afterwards.
Capital gains tax is an issue in this case. The Full Court of the Family Court of Australia has provided guidance about the treatment of capital gains tax in Rosati v Rosati [1998] FLC 92-804:
6.36 It appears to us that although there is a degree of confusion, and possibly conflict, in the reported cases as to the proper approach to be adopted by a court in proceedings under s.79 of the Act in relation to the effect of potential capital gains tax, which would be payable upon the sale of an asset, the following general principles may be said to emerge from those cases:
(1) Whether the incidence of capital gains tax should be taken into account in valuing a particular asset varies according to the circumstances of the case, including the method of valuation applied to the particular asset, the likelihood or otherwise of that asset being realised in the foreseeable future, the circumstances of its acquisition and the evidence of the parties as to their intentions in relation to that asset.
(2) If the Court orders the sale of an asset, or is satisfied that a sale of it is inevitable, or would probably occur in the near future, or if the asset is one which was acquired solely as an investment and with a view to its ultimate sale for profit, then, generally, allowance should be made for any capital gains tax payable upon such a sale in determining the value of that asset for the purpose of the proceedings.
(3) If none of the circumstances referred to in (2) applies to a particular asset, but the Court is satisfied that there is a significant risk that the asset will have to be sold in the short to mid term, then the Court, whilst not making allowance for the capital gains tax payable on such a sale in determining the value of the asset, may take that risk into account as a relevant s.75(2) factor, the weight to be attributed to that factor varying according to the degree of the risk and the length of the period within which the sale may occur.
(4) There may be special circumstances in a particular case which, despite the absence of any certainty or even likelihood of a sale of an asset in the foreseeable future, make it appropriate to take the incidence of capital gains tax into account in valuing that asset. In such a case, it may be appropriate to take the capital gains tax into account at its full rate, or at some discounted rate, having regard to the degree of risk of a sale occurring and/or the length of time which is likely to elapse before that occurs.
Identifying the pool of assets and liabilities
In this matter I find the pool of assets and liabilities to be as I set out below. Where there were contentious issues about items, or when further explanation is necessary, I have made findings and provided brief reasons below. The joint asset pool set out below had its genesis in separate draft documents provided to me by both counsel for the husband and the wife.
| Asset | Ownership | Value | |
| Non-Superannuation Assets | |||
| 1 | Property M | H | $350,000 |
| 2 | Property D | H | $108,750 |
| 3 | IAG Shares (at 15/2/2008) | H (1191) | $4,394 |
| 4 | IMB Shares (at 15/2/2008) | H (20,397) | $61,598 |
| 5 | Holden utility vehicle | H | $10,400 |
| 6 | Txxx Timeshare | Joint | NIL |
| 7 | Coin Collection | H | $6,384 |
| 8 | Household Contents | H | $2,500 |
| 9 | Legal fees paid | H | $13,300 |
| 12 | Property F | W | $424,519 |
| 11 | Household Contents | W | $8,000 |
| 12 | Chrysler Voyager vehicle | W | $20,800 |
| 13 | IMB Account | W | $276 |
| 14 | St George Account | W | $1,520 |
| Total Non-Superannuation Assets | $1,012,441 | ||
| Superannuation Assets | |||
| 15 | Axxx Super | W | $8,193 |
| 16 | Axxx Super | H | $225,978 |
| Total Superannuation Assets | $234,171 | ||
| Liabilities | |||
| 17 | capital gains tax Property D | H | NIL |
| 18 | capital gains tax Share sales | H | $23,967 |
| 19 | capital gains tax IMB share sale | H | $1,730 |
| Total Liabilities | $25,697 | ||
| Total Assets | $1,246,612 | ||
| Less Total Liabilities | $25,697 | ||
| Net Assets | $1,220,915 |
Item 10 in the schedule represents the actual amount drawn by the wife on the parties’ joint IMB account and transferred into her own IMB account. This is in accordance with the wife’s own evidence (wife’s affidavit filed 12 November 2007, paragraphs 9-12) and the money was used by her to purchase her current home at Property F. The husband asserts that the amount of $424,519 should be included in the pool of assets. The wife asserts it should be a lower figure, i.e. $386,000, her net equity in the property. The difference arises from stamp duty and expenses associated with the purchase. I accept the husband’s contention in this regard. To approach it in any other way would be to disadvantage him, and provide a benefit to the wife at the husband’s expense. The funds were clearly joint funds that were distributed by agreement before a final order for property settlement was made. It is in this regard similar to jointly owned funds being used for legal costs: Farnell & Farnell (1996) FLC 92-681.
Item 6 in the schedule was the subject of a consent order to the effect that the wife transfer her interest in the Txxx Time Share to the husband, and he indemnify her as regards any residual liability attaching to that interest. For all practical purposes, this asset has no value.
There is an IMB account held in trust for the children which has a balance of approximately $35,400. This too was the subject of a consent order the effect of which is to create a joint husband and wife trust account for the children in relation to the proceeds of this account. This account, accordingly, does not appear on the schedule.
The value of the IAG and IMB shares was calculated as at 25 March 2008 by reference to the value of those shares as shown on the Australian Securities Exchange website for IAG and the IMB website. The parties agreed that I could proceed on this basis and adopt a date as close as reasonably possible to the date of judgment, having regard to the myriad practical issues that arise in preparing and issuing a judgment.
Subject to the matters referred to above, the pool of both non-superannuation and superannuation assets, and the values attributable thereto, were agreed or not disputed.
In relation to the liabilities referred to at times 17 to 20 inclusive, these figures represent my findings in the following circumstances. The husband contended that I should find that the following were liabilities for the purposes of this case:
a)Capital gains tax on IMB shares $8,030
b)Capital gains tax on IAG shares $506
c)Tax on joint IMB account $909
d)Capital gains tax on sale of Property D $11,534
e)Capital gains tax on sold IMB shares $1,730
Total $22,709
Item (e) was agreed by the wife, and is item 19 in the schedule. The wife argues that none of the other liabilities ought to be taken into account because there is no evidence to establish them, or to quantify them. All of the IMB and IAG shares are held by the husband and he asserts that in order to fund what he considered as the inevitable payment to the wife pursuant to these orders, he would need to sell these shares thus triggering the capital gains tax liability. Of course the alternative I have is to either transfer them to her which probably has the effect of reducing the capital gains tax liability, or effecting a division of these shares in specie. These alternatives do not, in my opinion, make sense on the facts of the case. As it turns out, and for reasons that will become obvious below, the husband is ordered to make a payment to the wife, and I regard it as both reasonable and indeed financially prudent that he would liquidate his shareholdings to finance part of this payment. In relation to the shares, therefore, I regard the matter as falling squarely within the first and second principles enunciated by the Full Court in Rosati & Rosati (1998) FLC 92-804.
Even though I find that the capital gains tax liability arising out of the sale of these shares is a liability that must be taken into account, quantifying this liability is by no means easy. For example the value of the shares may fluctuate (indeed, have fluctuated since the hearing). The husband’s taxable income and taxation affairs generally may fluctuate before the shares are actually sold. The husband nonetheless advances the figure of $23,967 based on advice he has received. The wife challenges this advice and evidence having regard to the uncertainties referred to in this paragraph. Of course I could treat the capital gains tax liability as a contingent liability and as a s.75(2) factor. If I did that it would not be a significant amount – indeed probably less than two percent of the asset pool.
I have decided, however, that on the facts of this case it is just and equitable to fix the liability at $23,967. This creates a “swings and round-a-bout” situation because it could work either for or against the husband depending on unpredictable external factors that neither spouse can control. From the wife’s perspective the outcome is neutral. The liability was going to be taken into account one way or another. At least on this approach the liability is fixed and thus predictable.
I have not allowed the husband’s claim to the capital gains tax on the sale of his share of Property D. His evidence was that rather than borrow against Property M which he would retain as part of the property settlement (this was common ground), he preferred to sell his interest in Property D in order to fund any payment to the wife in these proceedings. A sale of Property D would necessarily involve the co-owners, his parents. Indeed the evidence was that Property D was purchased, at least in part, as an income stream for his parents in retirement. The husband seemed to be of the view that if the court made an order against him that required him to sell his interest in the Property D, his parents would not stand in the way. I simply do not accept that the husband would sell his interest in the Property D when he can borrow against Property M. I am not prepared to allow a capital gains tax liability in relation to a sale that, in my mind, is neither inevitable nor likely to occur in the future: Rosati & Rosati (1998) FLC 92-804.
Assessing weight to be given to initial contribution
In the section above entitled “Background” I set out the respective positions of the husband and the wife on this issue. There is no need to repeat this. The wife does not dispute that the husband brought into the marriage the following assets, as per his counsel’s case summary:
a)Property M – value unknown
b)Half interest in the Property D – value unknown
c)Savings of $30,000
d)A motor vehicle – value unknown
e)Superannuation with a value of $25,000
The husband asserted, in his case summary, that his assets at cohabitation were as follows:
a)Property M $111,000
b)Property D $40,000
c)Motor Vehicle $3,000
d)Furniture and effects $2,000
e)Coin collection $3,000
f)Superannuation $26,000
g)IMB shares $4,585
h)Savings $44,000
A complication in this case is that there is no admissible evidence that establishes a value at cohabitation of the M and D properties. Notwithstanding this I am still able to assess contribution in a general sense with these properties. The evidence does enable me to find that Property M was unencumbered at cohabitation, and Property D became unencumbered shortly after cohabitation.
The evidence also enables me to make the following findings about the husband’s initial contribution:
a)Most of the IAG and IMB shares were in fact owned by the husband at cohabitation in the sense that the current holding represents the fruit of share splitting and dividend reinvestment having their genesis in his original shareholdings.
b)The husband’s superannuation at cohabitation had a combined value that I round off to $26,000.
c)The husband had a coin collection at cohabitation but I am unable to make findings about its value at the time of cohabitation.
d)Based on an admission against interest by the wife, the husband had savings of $30,000 at cohabitation.
From the perspective of trying to assess the weight to be given to the husband’s initial contribution, it seems to me that the main assets to consider are the properties at M and D, the IMB and IAG shares, and to a lesser extent the superannuation (which I will exclude for present purposes). If the total net value of the combined asset pool is rounded up to $1,230,000, the current value of the assets referred to above would be:
a)Property M $350,000
b)Property D $108,750
c)Shares $4,466
d)Shares $69,350
TOTAL $532,566
This represents about 43 percent of the property pool. This approach is highly artificial, of course, and allows no room whatsoever for a recognition of the diverse contributions made by the wife during the relationship, whether or not made towards these assets. It is an interesting rule of thumb, however, with which to measure the claims for contribution made by both parties. The wife concedes that a five percent differential on contribution is just and equitable (52.5:47.5) but viewed in the light of this rule of thumb exercise, is it a paltry recognition of the present value of the husband’s initial contribution. The husband asserts that a 40 percent differential is appropriate (70:30) but this gives him almost full credit without recognising the subsequent contribution by the wife to other assets and in other myriad ways.
The end result is never as easy to find as it is for the parties to establish and then defend their respective positions on initial contribution. As the authorities referred to in the section entitled “The Applicable Law” state, considerable discretion is provided to the court to do what is just and equitable on the facts of each case. It would be as wrong for the court to overstate the weight to be given to the husband’s contribution as it would be to understate the impact of the wife’s other contributions. The situation could easily arise in some cases, perhaps even in this one, where if the wife’s contributions to all the other assets were properly recognised then, together with s.75(2) adjustments, those other assets would not be enough to satisfy a just and equitable claim.
On the facts of this case it is not just and equitable to simply look at the husband’s initial contribution by reference to present values. Those present values are a relevant consideration but are not determinative in this case. Even the husband’s counsel conceded in final submissions that work was done to Property M during the relationship, and the shareholdings grew as a result of factors to which the husband did not directly contribute. Under the circumstances, and taking into account all of the facts of this case including the diverse contributions, both financial and non-financial, direct and indirect, of both the husband and the wife, I assess the husband’s contribution to non-superannuation assets to be 60 percent and that of the wife 40 percent. I regard this 20 percent differential as a just and equitable reflection of the greater weight that needs to be given to the husband arising out of his initial contribution at the commencement of the relationship.
Future Needs
For the husband it was conceded that 20 percent was appropriate, particularly in view of the amount of child support the husband pays.
For the wife 25 percent was pressed. She has five children to care for, the oldest of whom is only 11. Her only income is Centrelink benefits, Family Tax Payments A and B and child support. When she purchased Property F she borrowed $100,000 which she repays at the rate of $178 per week. She also owes money to her father, arising out of the purchase, but the status of this loan is unclear. Whatever her previous training and qualifications, the fact is that she has a two year old at home and four other children at school. Her earning capacity in the immediate future is quite bleak. By contrast the husband is earning $1,856 weekly, and seems to have the capacity to save money. He is 44 years old and expects to work till at least 60. He gave no evidence about uncertainty as to employment in the industry in which he works.
Having regard to the above matters, I regard a s.75(2) adjustment in the wife’s favour of 25 percent to be quite appropriate on the facts of this case.
Just and Equitable
A number of issues arise in this context. If the final adjustment in the wife’s favour is 65 percent, should that figure be applied across the whole pool, i.e. to both superannuation and non-superannuation assets? Also, how precisely should the superannuation entitlement of the husband be split in order to give effect to the order? Finally, is the end result implementation of the order one that is just and equitable?
The wife submits that the final percentage should be applied across the board to all assets. She seeks a super-split of $161,580 out of the husband’s fund in the orders she seeks, but in paragraph 24.13 of her affidavit filed 15 November 2006 she deposes to wanting a splitting order that gives her one half of the total superannuation. In his case outline, the husband proposes a splitting order in her favour of $132,309, but this is based on a final split of 60:40 in the wife’s favour. This was later amended to a split of $108,892, being one half of the total superannuation of the parties.
Separation took place in December 2005. The unchallenged evidence of the husband is that his superannuation entitlement on 1 July 2005 was $150,629.87 and on 30 June 2006 it was $182,952.39. Under the circumstances it is appropriate to estimate that as at separation his superannuation entitlement was about $166,000, the halfway point between the two figures. The current balance is almost $226,000, an increase of about $60,000. His unchallenged evidence is that he made additional contributions after separation as a result of salary sacrifice arrangements. It is hard to ignore this post-separation increase in the value of his superannuation, and the authorities require me to consider whether the facts call for a separate adjustment in relation to superannuation. In cross examination the wife conceded that she knew of this post-separation increase in value, and agreed that she had not contributed to it. The increase of about $60,000 represents about 25 percent of his superannuation. This percentage is too high to ignore. Whilst it is cumbersome to do so, it is nonetheless just and equitable to the husband to apply a lower percentage to the superannuation assets. Instead of the wife receiving 65 percent of the superannuation assets, she will receive 55 percent thus recognising in an imprecise way the greater contribution made to this asset by the husband, offset of course by the s.75(2) factors that apply in his favour.
Conclusion
The result is that the wife is to receive 65 percent of the non-superannuation pool, or 65 percent of ($1,012,441 minus $25,697) = $641,383 after rounding off. Of course she already has the following assets:
a)Property F $424,519
b)House contents $8,000
c)Car $20,800
d)IMB savings $276
e)St George savings $1,520
TOTAL $455,115
This results in a payment to her of $186,268
Moreover, the wife is to receive 55 percent of the superannuation pool, or 55 percent of $234,161 = $128,788 after rounding off. As she already has $8,193 in superannuation of her own, the super-split will be $120,595.
Is this just and equitable in the end result? It provides the wife with an overall entitlement of $770,171 or 63 percent of the total pool of assets. It provides her with funds to meet both her short-term and long-term needs. From the husband’s perspective the payment pf $186,268 is achievable within a reasonable timeframe by disposing of the shares and then borrowing against Property M. He will also have a post-split superannuation entitlement that will provide a solid foundation on which he can build for his retirement. I propose to allow him 60 days to make the payment. As I am confident that he will be able to do so I will not make a default order of sale but instead grant leave to the wife to relist on seven days notice to seek enforcement orders should the need arise.
Application to re-open the case
After the hearing of this matter on 15 November 2007 the husband filed an application to re-open his case to correct some incorrect evidence. The application was opposed. It came before me on
4 February 2008and was dealt with by way of submissions. As it turned out, the wife did not object in principle to further evidence being admitted. Indeed the further evidence did not have any impact on my decision. The only outstanding issue is costs. The husband submits he should not have been put to the trouble of making and pursuing the application to re-open the case, particularly in view of the wife’s concession as to the admissibility of the evidence. There is substance in this. The husband acted appropriately in seeking to correct what at the time may have seemed to him to be highly misleading evidence. A more sensible and reasonable response from the wife and her representatives would have been more appropriate, with hindsight. A costs order is justified but I will limit it to a lump-sum of $500 to be paid by the wife in 60 days, or set off against the payment due to her under these orders, if she so prefers.
I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of Altobelli FM
Associate: Lisa Molloy
Date: 28 March 2008
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