Vidito and Vidito
[2008] FMCAfam 1021
•24 September 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| VIDITO & VIDITO | [2008] FMCAfam 1021 |
| FAMILY LAW – Property settlement – 24 year marriage – 3 children – contribution of damages for personal injuries by both parties – expenditure of funds existing at separation by wife after separation – husband having care of parties’ children, two of whom over 18 – husband having greater earning capacity than wife – determination of pool of divisible assets – assessment of contributions – assessment of s.75(2) factors. FAMILY LAW – Property settlement – application for superannuation splitting order – assessment of contributions. |
| Family Law Act 1975 ss.79, 75(2) |
| Hickey & Hickey; A-G for Commonwealth (Intervener), [2003] FamCA 395; (2003) FLC 93-143; (2003) 30 Fam LR 355 C & C, [2005] FamCA 429, (2005) 33 Fam LR 414, (2005) FLC 93-220 Townsend & Townsend, (1994) 18 Fam LR 505, (1995) FLC 92-569 Marker & Marker [1998] FamCA 42, unreported, 1 May 1998 C & C [1998] FamCA 143, unreported, 8 October 1998 NHC & RCH [2004] FamCA 633, (2004) Fam LR 518 (2004) FLC 93-204 |
| Applicant: | MS VIDITO |
| Respondent: | MR VIDITO |
| File number: | PAC 3150 of 2007 |
| Judgment of: | Halligan FM |
| Hearing date: | 11 September 2008 |
| Date of last submission: | 11 September 2008 |
| Delivered at: | Parramatta |
| Delivered on: | 24 September 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr Thistleton |
| Solicitors for the Applicant: | Byles Canceri Lawyers |
| Counsel for the Respondent: | Mr Anderson |
| Solicitors for the Respondent: | G L Jankov Solicitors |
ORDERS
The parties shall forthwith do all things and sign all documents necessary to cause the whole of the net proceeds of sale of the parties’ properties at Property T and Property P presently held in trust by the husband's solicitors to be paid to the wife.
The husband shall within 6 weeks pay to the wife the sum of $166,308 (“the sum”).
On payment of the sum in accordance with order (2), the wife shall do all things and sign all documents necessary to transfer to the husband all her interest in the property at Property H, New South Wales, being the land in Folio Identifier [4] (“the property”).
If the husband does not pay the sum in accordance with order (2), then both parties shall do all things and sign all documents necessary to sell the property as follows:
(a)The solicitor acting on the sale shall be G L Jankov or such other solicitor as the parties may appoint.
(b)The agent shall be as agreed between the parties, or failing agreement within 4 weeks after the expiry of the time fixed by order (2), as appointed by the President of the Real Estate Institute of New South Wales for the time being or his or her nominee (“the President”).
(c)The sale shall in the first instance be by private treaty unless the parties otherwise agree.
(d)The sale price shall be as agreed or in default of agreement within 4 weeks of the expiry of the time fixed by order (2), as fixed by a valuer nominated by the President.
(e)If the property is not sold within three months of listing, then, unless the parties otherwise agree-
(i)The parties shall sell the property by auction using the same agent and solicitor as for the private treaty sale.
(ii)The auction must be held within three months of listing for sale by auction.
On settlement of the sale of the property and after making usual adjustments between vendor and purchaser on sale, the parties shall cause the proceeds of sale to be distributed-
(a)To pay costs of sale including real estate agents, auctioneers and solicitor’s fees, disbursements and commission.
(b)To pay any costs, or to reimburse any party who may have paid the costs, of the services of the President and nominated valuer.
(c)To pay 30.5% of the remaining balance to the wife.
(d)To pay the remainder to the husband.
Pending payment of the sum, or in default of payment the sale of the property, the husband shall pay as and when they fall due all instalments of rates on the property.
The husband shall forthwith do all things and sign all documents necessary to transfer to the wife his interest in Holden Astra motor vehicle registration number [V].
Pursuant to s.90MT, Family Law Act 1975-
(a)The sum of $62,000 is the base amount allocated to the wife in relation to the husband's interest in First State Super.
(b)Whenever a splittable payment becomes payable in respect of the husband's interest in First State Super, the wife is entitled to be paid the amount (if any) calculated in accordance with the regulations, and there shall be a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for this order.
Order (8) binds the trustee of First State Super.
The operative date for order (8) is four working says after service on the trustee of First State Super of a sealed copy of these orders.
Otherwise each party shall retain to the exclusion of the other all personal property in his or her possession or control.
Should a party fail or refuse to sign a document necessary to be signed under this order, then pursuant to s.106A, Family Law Act 1975, a Registrar or a Deputy Registrar of the Court may sign the document on behalf of the party.
IT IS NOTED that publication of this judgment under the pseudonym Vidito & Vidito is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAC 3150 of 2007
| MS VIDITO |
Applicant
And
| MR VIDITO |
Respondent
REASONS FOR JUDGMENT
Introduction
These are property proceedings under the Family Law Act 1975.
The wife seeks orders that from the proceeds of sale of two investment properties, the husband be paid the sum of $39,600 and that she receive the balance, and that the husband pay her $270,000 and in return she transfer to him her interest in the parties’ former matrimonial home. She also seeks a splitting order in relation to one of two superannuation interests of the husband, with a base amount specified of $62,000. Otherwise she proposes that each party retain property in his or her possession or control. The wife's case is that she is entitled to 60% of the parties’ property, excluding superannuation interests, and to 50% of the parties’ superannuation interests.
The husband seeks that the sum of $11,989.50 be paid to him from the proceeds of sale of the investment properties and that the balance be paid to the wife, and that the wife transfer to him her interest in the parties’ former matrimonial home. Otherwise he proposes that each party retain property in his or her possession or control. The husband's case is that he is entitled to 55% of the non-superannuation property of the parties, and to 85% of the parties’ superannuation interests.
Background
The husband was born in 1959 and is aged 49. The wife was born in 1962 and is aged 46. The parties married in 1983 and separated in September 2006 when the wife left the matrimonial home.
There are three children of the parties’ marriage, [X] born in 1986, aged 21, [Y] born in 1988 and within a month of turning 20, and [Z] born in 1991 aged 17.
The evidence
The parties did not cohabit before marriage. At marriage they jointly owned a house at Property B subject to a mortgage and the husband owned a motor vehicle.
The husband bought the motor vehicle in 1981 for $7,200 from his savings. There is no evidence of its value at the date of marriage.
The parties jointly purchased land at Property B in October 1981 for $25,200. The husband paid an unspecified deposit. The husband said the wife “may have contributed a small amount” to the purchase price. The wife said the parties saved a deposit. Neither was cross-examined about this. The balance was borrowed on mortgage. There is no evidence to quantify the parties’ respective financial contributions to the savings contributed to the acquisition of the land.
Before marriage, in 1982 or 1983, the parties jointly borrowed funds secured by mortgage over the property to have a home built on the Property B land. This mortgage was repaid in about 3 years, that is, by about 1985 or 1986.
The parties occupied the home at the time of their marriage. There is no evidence of the parties’ equity in the property at marriage.
At marriage both parties were working full time.
In 1984, the wife had an operation on her leg. She was unable to work for three months after this operation. She resumed work for 6 to 9 months then in 1985 she had to resign her employment when a second operation became necessary. The wife did not resume employment before becoming pregnant with the parties’ first child. She resumed full time employment in mid 1987 when [X] was about six months old.
The husband was the sole income earner during the periods the wife could not work, and he assisted the wife's recovery after her operations by preparing baths for her and by massaging her leg. He also assumed a far greater responsibility for the housework, which the wife normally predominantly performed, for a period after each operation.
[Y] was born in 1988. The wife ceased work in April that year to have surgery. The wife resumed employment in early 1989.
In May 1991, the husband was injured in a motor vehicle accident, suffering head, neck and back injuries and a broken collarbone. He was unable to work for 3 months.
[Z] was born in 1991, the wife ceasing employment the previous month. The wife resumed her employment 4 weeks after [Z]’s birth.
In June 1992, the husband took a three month’s holiday to Malta with his mother and sister. The wife and children did not accompany him.
On 6 December 1994 the wife was injured in a motor vehicle accident, sustaining head injuries and fractures to her knee. She was unable to return to her former employment [in the hospitality industry]. She became extremely depressed.
The husband said that a few months after the wife's accident, she and the children went to Malta for three and a half months with his mother and sister and her father. The wife said that she resumed employment as a clerk in February or March 1995. Neither was cross-examination about this evidence, and I am unable to resolve the conflict.
In December 1996, the husband received $27,000 compensation for injuries he suffered in the 1991 motor vehicle accident.
In 1997 the parties purchased an investment property at Property T as joint tenants for $160,000, borrowing $80,000 and using savings to complete the purchase. The husband's damages of $27,000 were contributed to the purchase of this property, which was leased.
In 1998, the parties sold the Property B home for $203,000 and purchased a house property at Property H for $347,000. The parties applied the net proceeds of sale of the Property B property, $60,000 from damages the wife received as a result of the 1994 motor vehicle accident in the sum of $85,000, and savings to complete the purchase. The balance of the wife's motor vehicle accident damages were used to complete external work at the Property H property and to purchase furniture and furnishings for the home.
The wife ceased employment in 2000 when the family went on a holiday to Malta for three months. She resumed employment about a month after returning to Australia. She has been in constant employment since. She commenced full time employment in December 2006. The evidence does not disclose how much of the wife's employment between early 1989 and December 2006 was part time work. The wife's evidence was that she had worked part time for some years up to December 2006, and the husband's unchallenged evidence was that she was working part time at the time of the wife's motor vehicle accident in 1994.
In 2001, the parties purchased a second investment property at
Property P as tenants in common for $282,000. The husband had a 99% interest and the wife a 1% interest. The shares the parties took in this property seem to have been motivated by tax planning, the property being negatively geared.
In 2004, the husband again travelled to Malta with his parents for approximately four months without the wife or children.
Until 2004, the parties operated a joint account into which their incomes were deposited and from which they met their financial commitments. In 2004, the wife opened a St George account in her sole name. Her income thereafter was deposited into this account. The wife also cause dividends on shares the parties owned and “Cash Back” payments received for the parties’ travel on the M5 toll road to be deposited into this account. The husband's income continued to be deposited into the parties’ joint account, from which most of the household expenses and mortgage payments were met.
In mid 2007, the Property T property was sold for $340,000, netting a little under $187,000. The funds have been retained by the husband's solicitor on trust for the parties.
In August 2007, the parties sold the Property P property for $340,000, netting a little under $96,500. The husband's solicitor retains these funds for the parties.
At separation, the husband retained the funds in the parties’ joint account, being $15,000 after paying off a Visa account owing at that time, and the wife retained the funds in her separate account, of about $37,000. After the investment properties were sold, there remained a sum of about $2,000 in the joint account accumulated from net rent since separation, and the husband retained these moneys.
The wife has expended all but $6,686 of the $37,000 retained by her at separation. She spent $7,853 purchasing furniture, appliances and household items for herself, and to furnish a room for [Z] when he visited her. She spent $5,500 on a rental bond and rent at $220 per week for the period October 2006 to April 2007. She spent $6,365 on dental work and $900 for medical expenses to remove scarring as a result of her motor vehicle accident. She spent $16,500 for an on-site caravan.
During the parties’ cohabitation, the wife was primarily responsible for child care and supervision and for housework. The husband, who worked long hours on occasions, was involved with the children when not at work. He also assumed a greater share of housework when the wife had surgery in 1984 and 1985, and while the wife was recovering from injuries sustained in the motor vehicle accident in 1994. However, when the wife was able to get around the house on crutches she recommenced performing a variety of household tasks.
The husband carried out repairs and maintenance on the parties’ homes and on the investment properties, including repairing damage caused from time to time by tenants. He also erected the boundary fence at the Property B property, laid pavers and turf, built a carport and screened enclosure, laid a concrete pad and erected a garden shed on it.
The husband continues in occupation of the former matrimonial home with the parties’ three sons. He conceded that the rental value of the former matrimonial home is $350 per week.
Since separation the husband has met the outgoings on the former matrimonial home, and until their sale of the two investment properties, he paid the outgoings on them and received the net rent. The husband said that the outgoings on the investment properties he met since separation totalled $23,979 and the net rent he received totalled $18,005. However, in his 2006/2007 tax return, he claimed a loss of $21,874 in relation to the rental properties. The tax savings resulting from this loss remain undisclosed on his evidence.
[X] earns $582 per week. [Y] earns $550 per week and is studying at TAFE. He expects to finish his [omitted] course this year. [Z] is in Year 11, and earns $100 per week. It seems none of the parties’ sons pay the husband any board.
In January 2008, the husband went to Bali on a holiday with the parties three children, as a 21st birthday present for [X]. The trip cost $10,000. The husband also bought a second hand motor vehicle for [Y] at a cost of $1,000 shortly after separation.
The wife spent time with [Z] for about 3 months until about March 2007, but has not done so since. The wife is apparently estranged from all three of the parties’ children. She pays child support as assessed in the sum of $59.70 per week.
The wife rented a town house until May 2007 when, with the agreement of the beneficiaries of her grandmother’s estate, she occupied the home of her deceased grandmother rent free. While I accept the wife's evidence that the beneficial owners of the home the wife currently occupies are anxious for the wife to move to her own accommodation as soon as possible and have suggested she should look to move out by November this year, I am also satisfied it is more likely than not that the wife will be permitted to continue in occupation of this property until she can secure her own accommodation with the funds she will receive following the finalisation of the property settlement between the parties.
The applicable law
Property settlement proceedings fall to be determined by reference to s.79. The court may make such order as it thinks appropriate (s.79(1)), but must not make an order unless satisfied it is just and equitable to do so (s.79(2)). In deciding whether to make an order, and if so what order, the court must have regard to those of the considerations in s.79(4), including s.75(2), the provisions of which are incorporated into s.79(4) by reference, as may be relevant in a particular case.
In Hickey & Hickey; A-G for Commonwealth (Intervener), [2003] FamCA 395; (2003) FLC 93-143; (2003) 30 Fam LR 355, the Full Court explained the preferred approach in determining property settlement proceedings under s.79, as follows (FamCA at [39]; FLC at 78,386; Fam LR at 370):
“39. 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: Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend (1995) FLC 92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEJ and DDF (2001) FLC 93-075 and Phillips and Phillips (2002) FLC 93-104.”
Where the pool of divisible assets and resources includes a superannuation interest, the Full Court in C & C, [2005] FamCA 429, (2005) 33 Fam LR 414, (2005) FLC 93-220, considered the approach that should be taken. The majority said:
58. Thus, we consider that because of the obligation under s 79(2) to make a just and equitable order, then in order to ensure such a result the Court should wherever there is a superannuation interest apply the provisions of s 79(4)(a) to (g) (which will include the matters contained in s 75(2)) to that superannuation interest whether or not a splitting order is sought.
…
65. In summary, then, the trial Judge has a discretion as to how superannuation interests will be treated in a particular case. If superannuation is not included in the list of property but rather made the subject of a separate pool, it will be necessary where a splitting order is sought, or extremely prudent where no such splitting order is sought (in order to ensure that justice and equity is achieved) to:
(a) value the superannuation interest (according to the Regulations if an order under Part VIIIB is sought or according to the Regulations or otherwise if no order is sought);
(b) consider and make findings about the types of contributions referred to in s 79(4)(a), (b) and (c) which have been made by the parties to the superannuation interests on either a global approach or an asset by asset approach depending on the circumstances;
(c) consider the other factors in s 79(4) being the matters in s 79(4)(d), (e), (f) and (g); and
(d) ensure that pursuant to s 79(2) the orders in relation to the parties’ property, and any order under Part VIIIB in relation to superannuation interests are just and equitable.
66. In the context of a consideration of the matters referred to in sub-paragraphs (b) and (c) of the last paragraph, the following matters may well be relevant: the relationship between years of fund membership and cohabitation; actual contributions made by the fund member at the commencement of the cohabitation (if applicable), at separation and at the date of hearing; preserved and non-preserved resignation entitlements at those times; and any factors peculiar to the fund or to the spouse’s present and/or future entitlements under the fund.”
The pool of divisible assets, liabilities and resources
The parties have agreed as to the value of most of the property, and have agreed as to the value in accordance with the Family Law (Superannuation) Regulations of the parties’ superannuation interests. The issues are:
a)Whether the husband’s savings should be brought to account at the amount at separation, as the wife sought, or now, as the husband sought.
b)Whether the parties’ jewellery should be included and if so at what value.
c)Whether the wife has savings of $460 in a Bank of Valetta account.
d)Whether savings retained by the wife at separation and subsequently spent by her should be brought to account as a nominal asset in the wife's hands.
e)Whether an amount for savings formerly in bank accounts the wife held for the children should be brought to account as a nominal asset in the wife's hands.
The husband's savings
The husband retained $15,000 in the parties’ joint account at separation and subsequently retained a further $2,000 accumulated in the joint account from rent on the investment properties. He presently has $44,000 in savings. I am satisfied that prima facie the correct approach is to bring to account in the pool of divisible assets all of the parties’ present property. I can see no reason to depart from this prima facie approach. The increase in the husband's savings since separation can and in my view should be taken into account in assessing the parties’ respective contributions to the pool of divisible assets.
I will include the husband's savings at their current level.
The parties jewellery
Both parties retain jewellery. Neither party disclosed any jewellery in their financial statements. The evidence identifying that jewellery is scant. There is no admissible evidence of the value of any of the jewellery.
In those circumstances, I cannot bring the jewellery of either party to account in the pool of divisible assets.
The wife's savings
The husband submitted that the pool of divisible assets should include $460 in a Bank Valetta account in the wife's name. There is no evidence of any such account, much less of the current balance of the account.
I will therefore not include such an item in the pool of divisible assets.
Funds retained by the wife at separation
As previously mentioned, the wife retained savings at separation in the amount of $37,000 and has since spent all but $6,686 of that amount. The husband submitted that he had a legitimate interest in those funds at separation, and that they should now be added to the pool of divisible assets as if the wife still had them. The wife opposed that approach and argued that he expenditure of these funds was appropriate.
The Full Court’s decision in Townsend & Townsend, (1994) 18 Fam LR 505, (1995) FLC 92-569 is authority for the proposition that funds or property in which one party has a legitimate interest, which are expended or disposed of by the other party after separation, may be brought to account as part of the pool of divisible assets. However, subsequent Full Courts have emphasised that parties are entitled to meet their own reasonable needs from moneys and property available to them, and that writing back assets dissipated since separation should be the exception rather than the rule (Marker & Marker [1998] FamCA 42, unreported, 1 May 1998; C & C [1998] FamCA 143, unreported, 8 October 1998; NHC & RCH [2004] FamCA 633 at [24], (2004) Fam LR 518 at 523, (2004) FLC 93-204 at 79,314, citing both Marker and C & C [1998] FamCA 143 with apparent approval).
As previously set out, the wife’s expenditure from the savings she retained at separation was $7,853 for furniture, appliances and household items for herself, and to furnish a room for [Z] when he visited her, $5,500 on a rental bond and rent at $220 per week for the period October 2006 to April 2007, $6,365 on dental work, and $900 for medical expenses to remove scarring as a result of her motor vehicle accident. She also spent $16,500 for an on-site caravan that she now says is worth $9,000, and which she says should be included in the pool of divisible assets at that value. The husband readily concedes that if the savings spent by the wife, at least to the extent of the expenditure on the caravan, are brought to account as a notional present asset of the wife, the caravan should not be included as a separate item in the pool of divisible assets.
The wife left the matrimonial home without any of the contents. The husband remained in occupation of the matrimonial home and retained use of all its contents. The wife needed furniture, appliances, and household items for her new household. It was not suggested that what the wife spent from the savings retained at separation on furnishing and fitting out her rented accommodation after separation was excessive or extravagant. I am satisfied that the wife's expenditure of $7,853 for this purpose was reasonable, and this sum should not be written back as the husband sought.
It was submitted on behalf of the husband that the wife’s expenditure from savings retained at separation on a rental bond and rent payments were not reasonable as the wife was in employment and could and should have met these expenses from her income, not from savings. I note the wife's lower income compared to the husband's, that the husband had occupation of the jointly owned matrimonial home after separation which was unencumbered, and that the wife was in part time employment at separation, and did not resume full time work until about three months after separation.
One matter that was not dealt with in the evidence was whether or not the wife received a refund of her rental bond at the end of her lease. She did not cover this in her evidence in chief, nor was she cross-examined about it.
A rental bond is refundable to the tenant unless there are liabilities of the tenant under the lease that the tenant does not pay. In the absence of any evidence from the wife to suggest she left the leased premises before the expiry of the lease period or left the premises in a damaged state, I consider that I should infer that the wife would have been entitled to a refund of the bond in full. I therefore proceed on the basis that the wife has not provided any evidence as to the ultimate disposition of the $5,500 initially paid as a rental bond, a breach of her duty of full and frank financial disclosure, and this amount should be regarded as a sum presently available to the wife.
As to the expenditure on rent, I take the view that as it is the husband who seeks the writing back of these moneys, he bears the onus of proof of matters sufficient to justify that course, subject to the wife discharging her duty of full and frank financial disclosure and the consequences that may flow if she doe not. I am not satisfied the wife has failed in the discharge of that duty in relation to the rent, and ultimately I am not satisfied the husband has demonstrated sufficient reason to write back the expenditure on rent as a present asset of the wife.
Similarly in relation to the wife's expenditure on dental and medical procedures. While it was put on behalf of the husband that there is no evidence that the procedures the wife had carried out were necessary, it was not suggested to her in cross-examination that they were not. The cost of the procedures was significant and not such as could be met from income. I am not satisfied the husband has demonstrated sufficient reason to write this expenditure back as a present notional asset of the wife.
The final item is the cost of the caravan. The wife used the caravan for holidays and short breaks from time to time. I cannot see that it was necessary for the wife to expend $16,500 to have a few holidays at the beach. This expenditure has resulted in a $7,500 capital loss, making the wife's holidays at the beach quite expensive.
I am not satisfied that this expenditure by the wife was reasonable, and the amount she expended on the caravan should be fully written back as if it were an asset presently available to the wife. In consequence, the caravan should not be included as a separate asset at its current value.
Thus, I am satisfied that $22,000 of the funds retained by the wife at separation and expended by her since separation should be brought to account as a current notional asset of the wife.
Funds in accounts formerly held by the wife for the children
The husband submitted that funds formerly in bank accounts the wife held for the benefit of the children were retained by the wife at separation and subsequently used by her, and should be brought to account in the pool of divisible assets as an asset of the wife. However, there is no evidence that the wife retained any such accounts at separation. The wife's unchallenged evidence is that the savings in these accounts came from child endowment, and that when such payments stopped and the balance was being eaten away by bank charges, the accounts were closed well before separation and the proceeds spent on family expenses.
I am not satisfied the wife retained at separation any money from accounts she held or had held for the children, and nothing should be included in the pool of divisible assets in relation to those accounts.
Findings as to assets, liabilities and resources
I therefore find that the parties assets and liabilities are as follows, treating the contents of the former matrimonial home as being the husband's as both parties propose he retain them:
Item Description Title Amount 1 Property H property Joint $545,000.00 2 Sale proceeds of Property T and Property P properties Joint $297,700.00 3 Contents of Property H property Husband $5,000.00 4 994 AXA shares Husband $5,616.00 5 540 IAG shares Husband $2,295.00 6 Husband's St George account Husband $44,000.00 7 Husband's Bank of Valetta account Husband $3,000.00 8 Husband's Rodeo motor vehicle Husband $2,000.00 9 540 IAG shares Wife $2,295.00 10 Wife's St George account Wife $6,686.00 11 Wife's Astra motor vehicle Wife $9,000.00 12 Wife's furniture and contents Wife $800.00 13 Savings spent by wife post separation*** Wife $22,000.00 14 Husband's CGT liability Husband -$38,509.00 15 Wife's CGT liability Wife -$13,341.00 16 Total $893,542.00
I find that the parties’ superannuation interests are as follows:
Item Description Title Amount 1 Husband's FSS superannuation Husband $99,000.00 2 Husband's AXA superannuation Husband $60,000.00 3 Wife's Colonial First Choice superannuation Wife $25,132.00 4 Wife's ANZ Super Advantage superannuation Wife $204.00 5 Total $184,336.00
The assessment of contributions
It was submitted on behalf of the wife that the parties’ contributions should be assessed as favouring her in relation to the non-superannuation pool of assets 55/45, and in relation to the superannuation interests, that they should be assessed as equal. It was the husband's case that contributions favoured him 55/45 in relation to the non-superannuation pool of assets and 85/15 in relation to the superannuation interests.
The evidence does not establish that one party had made a greater contribution than the other to the equity in the Property B land at marriage. The husband contributed a motor vehicle at marriage, the value of which is unknown. During cohabitation the husband was the primary breadwinner, and the wife was the primary homemaker and parent. However, the wife also earned and contributed income for a significant part of the parties’ cohabitation, and the husband made non-financial contributions both as parent and homemaker and in work on the properties the parties owned, including the rental properties. Both contributed damages awards received during cohabitation directly to the acquisition of assets, the husband contributing $27,000 in 1997 and the wife contributing $85,000 in 1998. Thus, the wife's was the greater contribution of this kind, by a significant margin.
Since separation, the husband has lived in the parties’ unencumbered matrimonial home with the parties’ children, meeting the outgoings on the home, the wife has paid child support as assessed from time to time, the husband has met the outgoings on the two investment properties until their sale in mid 2007, and has received the net rent on the properties. While there was a deficit between the mortgage payments and other outgoings on the investment properties and the rent the husband received, he also had the benefit of the tax saving resulting from the negative gearing of the properties in an amount he has not disclosed.
Since separation the husband has made almost the sole contribution as parent and homemaker to the parties’ children, although their ages at separation, 19, nearly 18, and 15, and the period since separation of two years compared with the period of cohabitation of 24 years, indicates that this is of relatively minor significance. It is also relevant on the assessment of contribution to note that $27,000 of the husband's present savings of $47,000 in his two bank accounts accrued since separation.
Considering all contributions, financial and non-financial, direct and indirect, by both parties up to the present to the non-superannuation pool of assets, I am satisfied the contributions should be assessed as equal.
In relation to the parties’ superannuation interests, all four interests are accumulation interests in the growth phase.
The husband joined the First State Super scheme on 31 May 1994, and the AXA Retirement Security Plan on 22 September 1998. The husband has made contributions from his wages, in addition to the employer contributions, to the First State Super scheme, and the AXA plan seems to entail contributions by the husband alone from his wages. There is no evidence as to the level of contributions from wages historically to either scheme, nor is there evidence of the amount of contributions to the schemes since separation.
The wife joined the ANZ Super Advantage scheme on 1 February 2002. It seems to relate to previous employment of the wife. Contributions appear not to have been made to it since at least 1 July 2006, that is, since before separation. There is no evidence of when the wife joined the Colonial First State First Choice scheme, nor is there any evidence about the contributions to that scheme at any time.
Having regard to the fact that each of the superannuation schemes have either been as a necessary result of employment by the parties or have been contributed to with income earned by the parties, the majority of which fell during cohabitation, the lack of evidence as to the level of contributions at different times, and the contributions by the parties both financial from income and non-financial during their cohabitation, I am satisfied that contributions to the parties’ superannuation interests should be assessed as equal. The assessment of contributions submitted on behalf of the husband at 85/15 favouring the husband because of his greater earned income, ignores the wife's far greater non-financial contribution during cohabitation, and in effect would penalise the parent who sacrifices a career to assume the primary caring role for the children in a family.
The assessment of non-contributions considerations
It was submitted on behalf of the husband that his ongoing support of the parties’ three children should be taken into account, as should the fact that the husband's income was inflated by about 10 hours of overtime each week, to counterbalance the imbalance in the parties’ incomes, resulting in no adjustment being made to the parties’ contribution based entitlement to the non-superannuation assets. It was the husband's case that there should be no adjustment to the parties’ contribution based entitlement to their superannuation interests.
For the wife it was submitted that the significant disparity in the parties’ incomes should result in an adjustment in her favour of 5% on the parties’ contribution based entitlement to the non-superannuation assets. It was the wife's case that there should be no adjustment to the parties’ contribution based entitlements to the pool of superannuation interests.
The husband has the ongoing care of the parties’ 17 year old youngest child. I do not accept that the husband has any relevant ongoing care responsibilities for the eldest two children, who are now 21 and nearly 20, and who are earning $582 and $550 per week respectively. In relation to [Z], his age means that the impact of the husband's ongoing care responsibilities for him will be minor.
Both parties sought to raise health concerns, but in the absence of any medical evidence suggesting the future earning capacity of either is adversely affected by any of the suggested medical conditions or their symptoms, this is not relevant. I am not satisfied the earning capacity of either party into the foreseeable future will be other than what it is presently.
Thus, the husband has and will continue to have the capacity to earn $1,990 per week, and the wife $815 per week. This is a very significant disparity. The relative financial strength this income gives to the husband is exemplified by the significant increase in his savings since separation. He presently has some $27,000 in savings more than at separation, even after spending $10,000 in January 2008 on a trip to Bali for himself and the three children, and after paying $27,000 in legal fees shortly before the hearing.
In my view, this earning disparity calls for a significant adjustment to the parties’ contribution based entitlement to the non superannuation assets, which in my view should be adjusted by 5% in the wife's favour, giving her a share of 55% to the husband's 45%.
It was the case of both parties that no adjustment should be made to the parties’ contribution based entitlement to the superannuation interests, and I am satisfied that is the appropriate outcome. The interests will continue to grow with contributions in the future, and while it may be inferred that the husband's will grow more than the wife's as a function of his higher income, where the wife seeks no adjustment in her favour then I am satisfied none should be ordered.
A just and equitable order
The husband seeks to retain the former matrimonial home, and he should be given that opportunity, he having continued to live in the home since separation. If the wife is to receive a 55% share of the non superannuation assets valued at $893,542, she must receive property to the net value of $491,448. She retains property to the net value of $27,440, so she must receive a further $464,008.
If the wife received the whole of the proceeds of sale of the investment properties, $297,700, the husband would need to pay the wife $166,308 to retain the former matrimonial home. On the husband's income, at his age, and considering his capacity to save since separation, that is a sum he might reasonably expect to be able to finance if he wished. I note that requiring the whole of the proceeds of sale of the investment properties to be paid to the husband would still leave him with cash assets of $47,000, sufficient to pay his CGT liability arising from the sale of those properties.
I am satisfied it would be just and equitable in all the circumstances to order the husband to pay the wife $166,308, for the proceeds of sale of the investment properties to be paid to the wife, and for the wife to transfer her interest in the former matrimonial home to the husband. If the husband failed to pay the relevant sum to the wife, then the home would have to be sold and the wife paid 30.5% of the net proceeds.
In relation to the superannuation, for the wife to receive half of the superannuation pool of $184,336, she must have superannuation presently worth $92,168. Her superannuation is presently worth $25,336. Thus, she needs to receive a split from the husband's superannuation worth $66,832 to achieve parity with him. She in fact seeks a splitting order specifying a base amount of $62,000, less than I have found she is entitled to. I am satisfied a splitting order to the effect sought by the wife is just and equitable in all the circumstances of this case.
I am satisfied procedural fairness has been afforded by the wife to the trustee of the husband's interest in the First Stare Superannuation Scheme, and the splitting order should be expressed to bind the trustee.
I certify that the preceding eighty five (85) paragraphs are a true copy of the reasons for judgment of Halligan FM
Associate: Deanne Bush
Date: 17 September 2008
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