Tomlin and Nilsen
[2011] FMCAfam 166
•5 April 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| TOMLIN & NILSEN | [2011] FMCAfam 166 |
| FAMILY LAW – De facto property matter – small asset pool – consideration of “mix” of assets and whether to make a superannuation splitting order – the applicant has primary care of the parties’ three children including one with special needs and has a lesser earning capacity than the respondent – orders made for her to retain a greater proportion of the realisable assets and for there to be no superannuation splitting order. |
| Family Law Act 1975, ss.75, 79, 90SF, 90SM |
| Pierce and Pierce (1999) FLC 92-844 Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 L and L [2003] FamCA 40 D and D [2006] FamCA 199 |
| Applicant: | MS TOMLIN |
| Respondent: | MR NILSEN |
| File Number: | MLC 7025 of 2010 |
| Judgment of: | Bender FM |
| Hearing dates: | 3 & 4 March 2011 |
| Date of Last Submission: | 4 March 2011 |
| Delivered at: | Melbourne |
| Delivered on: | 5 April 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr Williams |
| Solicitors for the Applicant: | Peter Baker & Associates |
| Counsel for the Respondent: | Mr Middlemis |
| Solicitors for the Respondent: | J A Middlemis |
ORDERS
BY CONSENT:
The father and the mother retain equal shared parental responsibility for the long term care, welfare and development of the children [X] born [in] 1996 (“[X]”), [Y] born [in] 1998 (“[Y]”) and [Z] born [in] 1999 (“[Z]”).
Save as set out below [X], [Y] and [Z] live with the mother.
[X], [Y] and [Z] spend time with the father as follows:
(a)on alternate weekends from 5.00 pm Friday until 5.00 pm Sunday;
(b)for one half of all school term holidays as agreed and failing agreement:
(i)for the first half in even numbered years and
(ii)for the second half in odd numbered years;
(c)for one week during the school Christmas holiday period as agreed, and:
(i)
from 5.00 pm on 24 December 2011 until 2.00 pm on
25 December 2011 and in alternate years thereafter; and
(ii)
from 2.00 pm on 25 December 2012 until 5.00 pm on
26 December 2012 and in alternate years thereafter;
(d)by telephone each alternate Wednesday (after [X], [Y] and [Z] have been with the father for the weekend) and each alternate Thursday evening (prior to the father’s upcoming weekend with [X], [Y] and [Z]); and
(e)at such further times as are agreed between the parties.
Notwithstanding anything stated in order 3 herein, the father and the mother shall each spend time with [X], [Y] and [Z] on each of the following special days:
(a)for half of [X], [Y] and [Z]’s birthdays or if the birthday is on a school day for at least three hours after school at times to be agreed;
(b)with the mother from 10.00 am to 4.00 pm on her birthday or if her birthday is on a school day for at least three hours after school at times to be agreed;
(c)if the father would not otherwise spend time with [X], [Y] and [Z] on Father’s Day, with the father from 10.00 am to 5.00 pm on Father’s Day or otherwise as agreed; and
(d)if the mother would not otherwise spend time with [X], [Y] and [Z] on Mother’s Day, with the mother from 10.00 am to 5.00 pm on Mother’s Day or otherwise as agreed.
All [X], [Y] and [Z]’s changeovers occur at the [omitted] Supermarket car park at [suburb omitted] or as otherwise agreed between the parties.
The mother have sole responsibility for making decisions about [X], [Y] and [Z]’s day to day welfare, care and development when [X], [Y] and [Z] are in her care.
The father have sole responsibility for making decisions about [X], [Y] and [Z]’s day to day welfare, care and development when [X], [Y] and [Z] are in his care.
Whichever party receives a copy of [X], [Y] and [Z]’s school report/s shall forthwith provide a copy/copies to the other party, or if the school is agreeable, direct the school to provide copies of such reports directly to the other party.
Each party shall upon receiving notification of any school or extra curricular special event (including but not limited to concerts, parent teacher interviews, excursions and camps) forthwith provide the other party with details or a copy of the notification of such event.
If either party receives notice of a party or other special event for [X], [Y] or [Z] which will take place while [X], [Y] and [Z] are with the other party, he/she shall forthwith give the other party notice of such event.
Each party shall forthwith notify the other of any medical or other emergency affecting [X], [Y] or [Z].
BY THE COURT:
The parties do all things necessary to forthwith place the property at
Property D (“the real property”) on the market for sale (“the sale”) and upon completion of the sale, the proceeds of the sale be applied:
(a)firstly to pay all costs, commissions and expenses of the sale;
(b)secondly to discharge the mortgage and any other encumbrance affecting the real property;
(c)thirdly in repayment of the parties’ personal loan with Suncorp;
(d)fourthly in payment of the sum of $5,300.00 towards the parties’ joint Suncorp credit card;
(e)fifthly the balance then remaining be divided in the proportion of:
(i)80 per centum thereof to the applicant; and
(ii)20 per centum thereof to the respondent.
Pending the payment or completion of the sale:
(a)the respondent have the sole right to occupy the real property and during such right of occupation the respondent pay all instalments pursuant to the mortgage and all rates and taxes and like apportionable outgoings of the real property as they fall due;
(b)the parties hold their respective interests in the real property upon trust pursuant to these orders; and
(c)neither party encumber the real property without the consent in writing of the other party.
The applicant forthwith do all necessary acts and things and sign all necessary documents to transfer to the respondent at the expense of the respondent all her right, title and interest in the Mitsubishi Triton motor vehicle.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all superannuation and other property (including choses-in-action) owned by or in the possession of such party as at the date of these orders (the furniture, personal possessions, and like chattels in the property being deemed to be in the possession of the respondent);
(b)insurance policies remain the sole property of the owner named thereon;
(c)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders; and
(d)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
IT IS NOTED that publication of this judgment under the pseudonym Tomlin & Nilsen is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BENDIGO |
MLC 7025 of 2010
| MS TOMLIN |
Applicant
And
| MR NILSEN |
Respondent
REASONS FOR JUDGMENT
Introduction
When this matter was before the Court at final hearing, both parenting and property issues were live. However, when the parties’ solicitors were contacted by my Chambers and advised that the judgment was ready to be delivered, the Court was advised the parties had resolved parenting matters between themselves and did not require a determination of parenting issues by the Court. A minute reflecting that agreement was received by my Chambers and forms part of the orders made this day.
The parties have three children [X] born [in] 1996 (“[X]”), [Y] born [in] 1998 (“[Y]”) and [Z] born [in] 1999 (“[Z]”).
[X], [Y] and [Z] live with their mother and will spend alternate weekends, half school term holidays, one week in the long summer vacation and special days with their father.
In relation to property matters, the parties agree that the former family home be sold, that the sale costs be paid, the mortgage discharged, the Suncorp personal loan be repaid and $5,300.00 be applied towards the joint Suncorp Credit Card.
The applicant seeks that the balance of the proceeds of sale of the former family home be divided such that she receives 80 per cent of same and the respondent receives 20 per cent of same. The applicant otherwise proposes each party retain all other assets in their possession, including each party retaining their superannuation entitlements.
The respondent seeks that the balance of the proceeds of sale of the former family home be divided equally between the parties. The respondent also proposes that there be a superannuation splitting order, such that there is an equal division of the parties’ superannuation entitlements and that the parties otherwise keep those assets currently in their possession.
Background
The applicant was born [in] 1966 and is 44 years of age. She is employed on a part-time basis as a [omitted]. She has re-partnered but does not live with her new partner. The applicant has a daughter, [A] aged 22 years, from a previous relationship. [A] lived with the parties for several years.
The respondent was born [in] 1965 and is 45 years of age. He is employed as an [omitted]. He has recently commenced a new relationship with a woman who resides in Adelaide. The respondent has a son, [B] aged 16 years, from a prior relationship. He does not spend time with [B] but pays child support as assessed by the Child Support Agency.
The parties commenced their relationship in February 1995 and commenced cohabitation in May 1995. They separated for 18 months in 2003/2004 and finally separated in September 2009 when the applicant and the children left the former family home.
When the parties first commenced cohabitation they were resident in [omitted]. The respondent was employed with [S].
In 1997, the respondent accepted a redundancy package of $65,550.00 to enable the parties to relocate to Bendigo to be closer to the applicant’s family.
In 1998 the respondent’s parents entered into a contract to purchase the property at Property D (“the former family home”) on behalf of the parties. Neither the applicant or respondent were in permanent employment and they did not qualify for a bank loan. The parties provided the $8,000.00 deposit for the purchase of the property. Following settlement the parties and the children moved into the former family home and were responsible for all outgoings in relation to the former family home, including all mortgage payments.
In 2006 the respondent obtained full-time permanent employment as a [omitted]. The parties were then able to obtain bank finance and “purchased” the former family home from the respondent’s parents for the amount necessary to discharge the mortgage on the property, being $60,270.00.
It is the respondent’s contention that the former family home was valued at $175,000.00 at the time of the transfer. He provided no independent proof of the value of the property in 2006 (being the time of the transfer) at the final hearing of the matter.
The Issues
Both parties are in agreement that the former family home is to be sold and have also agreed that from the proceeds of sale, the mortgage, the personal loan in their joint names and $5,300.00 towards the joint credit card debt are to be paid. The parties are unable to agree how the net proceeds of sale of the former family home should otherwise be divided between them and whether there should be a superannuation splitting order.
The issues between the parties in relation to their property matter that I have identified are as follows:
a)Should there be an adjustment in the respondent’s favour arising from his receipt of a redundancy payment of $65,550.00 early in the relationship and from the assistance his parents gave the parties in their ability to acquire the former family home?
b)What should be the adjustment as between the parties in the applicant’s favour arising from section 90SF(3) factors?
c)When looking at an overall adjustment of property as between the parties, should there be a superannuation splitting order as between the parties against the respondent’s superior superannuation entitlements or should an order be made that there be no superannuation split and the applicant retain a greater proportion of the parties’ current realisable assets?
The legislation
Part VIIIAB of the Family Law Act1975 (“the Act”) sets out the Court’s powers when dealing with financial matters relating to de facto relationships.
Section 90SM of the Act defines the Court’s powers in determining applications for property settlement between de facto couples. Sub-section 90SM(3) of the Act provides that:
The court must 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 90SM(4) of the Act 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 are:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii)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 de facto relationship 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 de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii)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 de facto relationship or either of them; and
(c)the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, 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 de facto relationship; and
(e)the matters referred to in subsection 90SF(3) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the de facto relationship or a child of the de facto relationship; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship.
The matters to be taken into account under section 90SF(3) of the Act are as follows:
(a)the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship ); 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 de facto relationship 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 (4), 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)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
(i)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 de facto relationship 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 90SM in relation to:
(i)the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
(o)the terms of any order or declaration made, or proposed to be made, under this Part in relation to:
(i)a party to the subject de facto relationship (in relation to another de facto relationship); or
(ii)a person who is a party to another de facto relationship with a party to the subject de facto relationship; 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
(p)the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:
(i)a party to the subject de facto relationship; or
(ii)a person who is a party to a marriage with a party to the subject de facto relationship; 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
(q)any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and
(r)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(s)the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and
(t)the terms of any financial agreement that is binding on a party to the subject de facto relationship.
The four-step approach
In Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 at [39], the Full Court of the Family Court described the preferred four-step approach in property matters. Whilst this decision related to a couple who had been married, I am satisfied that the approach is equally applicable to parties who were in a de facto relationship. The four-step approach was described by the Full Court in the following terms (for the sake of clarity, where ss.79(4)(a), (b) and (c) are referred to, the relevant sections in this matter are ss.90SM(4)(a), (b) and (c), where ss.79(4)(d), (e), (f) and (g) are referred to, the relevant sections in this matter are ss.90SM(4)(d), (e), (f) and (g) and where s.75(2) is referred to, the relevant section in this matter is s.90SF(3)):
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), ("the other factors") including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case ….
Assets and liabilities
The parties are in agreement as to what constitutes the property pool. The agreed property pool is as follows:
Property D $250,000.00 Mitsubishi Triton (in applicant’s name but in respondent’s possession) $2,000.00 Ford Falcon (in applicant’s name and possession) $9,000.00 Applicant’s Commonwealth Bank of Australia account $4,000.00 Respondent’s Suncorp Account $600.00 Total $265,600.00 Less liabilities:
Mortgage <$144,301.00> Personal Loan <$17,800.00> Joint Credit Card debt <$5,300.00> Total <$167,401.00>
REALISABLE NET ASSET POOL $98,199.00 Superannuation:
Applicant’s Superannuation $4,029.00 Respondent’s Superannuation $39,000.00 Total $43,029.00
TOTAL NET ASSET POOL $141,228.00
Contributions
In 1997, some two years after the commencement of cohabitation, the respondent accepted a redundancy payment from his employer, [S], of $65,550.00. The respondent’s evidence is that he had been employed by [S] for 15 years at the time that he accepted that redundancy.
It was therefore argued on his behalf that a large proportion of the redundancy package was attributable to the 13 years prior to the commencement of cohabitation and that accordingly the applicant had made no contribution in relation to that portion of the monies received.
It was the respondent’s evidence that after relocating to the Bendigo area, he had difficulty in obtaining ongoing full-time employment and that it was his redundancy funds that supported the family during this period.
As set out earlier in this judgment, in 1998 the respondent’s parents entered into a contract to purchase the former family home for an amount of approximately $82,000.00. The deposit of $8,000.00 was provided by the parties from the respondent’s redundancy payout. The parties and the children moved into this property upon settlement. The parties were solely responsible for the payment of all outgoings in relation to this property, including the mortgage, rates, insurances and utilities.
It is common ground that the respondent’s parents entered into the contract for the purchase of the home as the parties, being unemployed at that time, did not qualify for a bank loan.
In 2006, after the respondent secured full-time employment as a [omitted], his parents transferred the property to the parties for an amount that was commensurate with the figure needed to discharge the then mortgage on the property in the respondent’s parents’ names.
It was the respondent’s evidence that at the time of the transfer of the property from his parents to the parties, the property had a value of $175,000.00, albeit he filed no independent expert evidence confirming this estimate.
It was submitted on behalf of the respondent that in those circumstances his parents had made a considerable contribution to the parties’ assets. It was submitted on his behalf that the equity in the property at the time of transfer was approximately $115,000.00. The parties were only required by the respondent’s parents to discharge their then mortgage of $60,270.00. They required no additional payment. The respondent submitted that in these circumstances his parents made a contribution to the parties of $55,000.00, being the additional equity in the property.
During the parties’ relationship, the applicant’s eldest daughter from a previous relationship, [A] now aged 22 years, resided with the parties for at least seven years, and during such time no support was received from her natural father. It was argued that the respondent’s contribution to her care throughout this period is a relevant factor.
It was therefore submitted on behalf of the respondent that the redundancy payment received by him, which supported the family for a considerable period of time, the contribution by his parents and his support of the applicant’s daughter [A] is such that his contribution to the parties’ asset pool should be seen to be greatly in excess of that of the applicant.
It was submitted on behalf of the respondent that his greater financial contributions are equal to any section 90SF(3) adjustments in the applicant’s favour.
It was submitted on behalf of the applicant that the initial contribution from the respondent reflected in his redundancy package in 1997 has been offset by the more significant contributions of the applicant as the parent and homemaker during the course of the relationship and subsequent to separation.
It was further submitted on behalf of the applicant that whilst the respondent’s parents facilitated the acquisition of the former family home at a time when the parties themselves were unable to obtain a loan in their own names, it was always understood between all parties that the property was being acquired for the parties and that this is borne out by the reality that the respondent’s parents made no monetary contributions to the acquisition and maintenance of the property. It was argued in those circumstances that whilst the respondent’s parents lent the parties their names, they in no other way contributed to the acquisition of the property.
It was therefore submitted on behalf of the applicant that in all the circumstances the parties’ contributions to the asset pool should be considered equal.
The Full Court in the matter of Pierce and Pierce (1999) FLC 92-844 held at page 85881:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all the other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution… regard must be had to the use made by the parties of that contribution.”
Whilst the initial contribution of the respondent has been offset, at least in part, by the contribution of the applicant as parent and homemaker, I do not agree with the applicant’s submission that her contribution in this regard has offset the respondent’s initial contribution.
In relation to the acquisition of the former family home, whilst the respondent’s parents facilitated the acquisition of that property for the parties, they at no time made any monetary contribution, nor, I am satisfied, did they ever consider that property to be anything other than the property of the parties.
Whilst on paper, it can be argued that the respondent’s parents transferred the property to the parties for an amount that was less than the equity in the property at that time, I am satisfied that they did not consider themselves to be the owner of that property and in reality neither did the parties.
In all these circumstances I am satisfied that the contributions of the respondent, and in particular that of his redundancy payment, are greater than that of the applicant and that there should be a five per cent adjustment in his favour.
Section 90SF(3) factors
The applicant is aged 44 years and is in good health. She is employed on a part-time basis as a [omitted]. She has recently increased her working commitment from four days per week to five. She earns approximately $35,000.00 per annum.
The respondent is aged 45 years and is employed as an [omitted]. The respondent earns approximately $76,000.00 per annum as well as having a novated lease arrangement in relation to his motor vehicle of approximately $14,000.00 a year.
The applicant has been the primary carer for the parties’ three children and their sole carer in the last 18 months since separation. The parties’ agreed living arrangements for the children are such that the applicant will remain the primary carer for the children. The parties’ daughter [Y] has special needs as she has been diagnosed with high-functioning autism and obsessive compulsive disorder. The parties’ son [X] has very recently been admitted to the Adolescent Psychiatric Unit of the [omitted] Hospital in Melbourne suffering from severe depression and post traumatic stress disorder. These issues place additional responsibility on the applicant as the children’s primary carer.
The respondent pays child support for [X], [Y] and [Z] and has always paid child support at the assessed rate. He currently pays $280.00 per week by way of child support for them. The respondent also pays child support for his son from a previous relationship, [B].
In all these circumstances it was submitted on behalf of the applicant that there should be an adjustment of the parties’ assets in her favour to reflect her greater section 90SF(3) factors.
The respondent made no submissions as to what the level of adjustment under this section should be in the applicant’s favour, save that any section 90SF(3) adjustment in the applicant’s favour is offset by his greater contributions.
Because of the disparity in the parties’ earning capacities and the greater responsibility that the applicant bears as the primary carer of the parties’ three children, I am satisfied that there should be a loading in the applicant’s favour under this heading of 25 per cent.
Superannuation
It was submitted on behalf of the applicant that given the very small size of the realisable asset pool of only $98,199.00 and her role as the primary carer of the three children, that this court should make orders that the realisable assets be divided such that she receive 80 per cent of same and the respondent receive 20 per cent of same, and that this court not make any orders as against the respective superannuation entitlements of the parties.
It was submitted on behalf of the applicant that such an order would afford her the opportunity to best support herself and the three children into the future.
It was submitted on behalf of the applicant that such a resolution of the matter would in fact reflect a 58.5:41.5 division in the applicant’s favour and that such an outcome was appropriate in all the circumstances, given the respondent’s capacity to re-establish himself, arising from his greater earning capacity.
It was submitted on behalf of the applicant that given her inferior earning capacity and her responsibility as the primary carer of the three children, including one with special needs, she has the greatest need to retain the largest proportion of the very small asset pool. It was argued on that basis that there should be no superannuation splitting order made in relation to the respondent’s superannuation. She argued that any disadvantage to the respondent in not receiving a greater proportion of the realisable assets at this time was offset by her taking a lesser amount of the total pool than she might otherwise have been entitled to if a superannuation splitting order was made.
It was submitted on behalf of the respondent that the court should make a superannuation splitting order such that there be an equal division of the parties’ superannuation entitlements between them. It was the respondent’s submission that he wished to obtain sufficient funds from the proceeds of sale of the former family home to enable him to purchase a more modest property in the [D] area so that he would be able to provide a home for himself and for the children when they were spending time with him.
It was submitted that if orders were made in the terms sought by the applicant, he would not be in a position to achieve such an outcome.
In the matter of D and D [2006] FamCA 199, the Full Court upheld the decision of the Federal Magistrate at first instance whereby the wife received all of the realisable assets and the husband retained only his superannuation interests.
Their Honours in paragraph 17 of that decision held as follows:
“Since the availability of such orders following the introduction of Part VIIIB, consideration of the constitution or “mix” of the assets with which each party will be left as a result of proposed orders would seem a necessary, if not critical, factor in determining the justice and equity of proposed orders in each case in which superannuation interests are involved.”
In the matter of L and L [2003] FamCA 40, the wife was seeking orders that she retain the bulk of the in specie assets and that the husband retain the majority of the parties’ superannuation entitlements.
In paragraph 60 of that judgment, in relation as to the manner in which to deal with such an application, Moore J observed as follows:
“It is a question that has to be determined by reference to what is just and equitable in all of the circumstances.”
Just and equitable
As noted by Moore J in the matter of L and L (supra), the manner in which the division of assets between the parties is determined must be on the basis of what is just and equitable.
Whilst the respondent argued that there should be an equal division of all the parties’ assets on the basis his initial contributions equalled the section 90SF(3) adjustment in the applicant’s favour, I have determined that the realisable assets of the parties should be divided such that the applicant receives 70 per cent of same and the respondent receives 30 per cent of same.
I am also of the view that given the parties’ ages, any adjustment in relation to their superannuation should be on the basis that their entitlements are equalised. In real terms this would have an overall effect of dividing the totality of the parties’ realisable assets and superannuation entitlements such that the applicant would receive 64 per cent of same.
The applicant’s proposal is such that she would receive 58.5 per cent of the total asset pool. She argues that in enabling her to retain a larger proportion of the realisable assets she can better support herself and the children and that any disadvantage to the respondent is off-set by her receiving, in percentage terms, less than she would otherwise receive under this determination. She also argues the respondent’s greater earning capacity is such that he will be able to recover any lost capital much more quickly than she would be able to.
It was the respondent’s evidence that he is seeking there be a superannuation splitting order as he wishes to utilise his share of the proceeds of the former family home to purchase another property in the [D] area. It was his submission that if the court accedes to the applicant’s proposal that there be no superannuation split, he would have insufficient monies to enable him to purchase another property.
If the court made a superannuation splitting order as is proposed by the respondent, rather than receiving 50 per cent of the parties’ realisable assets as was the respondent’s proposal, the court has determined that the respondent would receive 30 per cent of the parties’ realisable assets. The amount received by the respondent after such a division would not, in all likelihood, enable him to purchase another property.
In these circumstances I am of the view that the proposal of the applicant, whereby she retains 80 per cent of the realisable assets and that there be no superannuation splitting order is the outcome that is the most just and equitable outcome as between these parties, given the applicant’s lesser earning capacity and her responsibilities for the primary care of the children.
The parties have agreed that each shall retain the motor vehicles they are currently driving and their respective bank accounts. This represents, somewhat coincidentally, an 80:20 division of those assets in the applicant’s favour. Accordingly, the orders will provide that each party keep the assets in their possession, including their respective superannuation entitlements, and that upon settlement of the sale of the former family home, after payment of the parties’ mortgage and agreed debts, the balance of the sale proceeds be divided such that the applicant receives 80 per cent and the respondent receives 20 per cent.
I certify that the preceding sixty-six (66) paragraphs are a true copy of the reasons for judgment of Bender FM
Date: 5 April 2011