VINCE & VINCE (No.2)
[2021] FCCA 282
•22 February 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
| VINCE & VINCE (No.2) | [2021] FCCA 282 |
| Catchwords: FAMILY LAW – Property proceedings – application for leave to proceed out of time with proceedings for property settlement – parties separated for 11 years – application brought by the wife in circumstances where the husband received compensation from a WorkCover claim post separation, which he had originally commenced during the parties’ marriage – issues of child support being assessed in light of the husband being found to have been entitled to regular compensation payments in the period post-separation – section 75(2) factors considered – question of whether contributions must be tied to assets available to be divided in property proceedings – assessment of prospective needs – considerations of justice and equity. |
| Legislation: Family Law Act 1975 (Cth), ss.4, 39, 44, 79, 79A, 90XC Child Support (Assessment) Act 1989 (Cth) ss.4, 25, 43, 98S, 111, 112, 117, 118 Child Support (Registration and Collection) Act 1988 (Cth) |
| Cases cited: Bevan & Bevan [2013] FamCAFC 116 Biltoft & Biltoft (1995) FLC 92-614; (1995) Fam LR 82 Brisbane South Regional Health Authority v Taylor [1996] 186 CLR 541 NHC & RCH (2004) FLC 93-204 Clauson & Clauson (1995) FLC 92-595 C & C (2005) FLC93-220 Edmunds & Edmunds [2018] FamCAFC 121 Farmer & Bramley (2000) FLC 93-060 Ferguson & Ferguson (1978) FLC 90-500 Fox v Percy (2003) 214 CLR 118 Gadzen & Simkin [2018] FamCAFC 218 Gallo & Dawson [1990] HCA 30 Gilmour & Gilmour (1995) FLC 92-591 Hall, K A and Hall, J C (1979) FLC 90-679 Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 Ingold & Ingold [2019] FamCA 734 In the Marriage of Browne & Green (1999) 25 Fam LR 482 In the Marriage of DJM and JLM (1998) 23 Fam LR 396 In the Marriage of Kowaliw (1981) FLC 91-092 In the Marriage of Omacini (2005) 33 Fam LR 134 In the Marriage of Townsend (1994) 18 Fam LR 505 Jacenko & Jacenko (1986) FLC 91-776 Lee Steere & Lee Steere (1985) FLC 91-626 McColl & McColl [2013] FCCA 736 Milas v GM Holden Limited [2015] FCCA 1311 Rushton & Rushton [2011] FMCAfam 1259 Russell & Russell [1999] FamCA 1875 Sharp & Sharp [2011] FamCAFC 150 Slocomb & Hedgewood (2015) FLC 93-678 Stanford v Stanford [2012] HCA 52 Trevi & Trevi [2018] FamCAFC 173 Vince & Vince [2016] FCCA 2590 Wardman & Hudson (1978) FLC 90-466 Waters & Jurek (1995) FLC 92-635 Watson & Ling [2013] FamCA 57 Whitford & Whitford (1979) FLC 90-612 |
| Applicant: | MS VINCE |
| Respondent: | MR VINCE |
| File Number: | ADC 4545 of 2007 |
| Judgment of: | Judge Brown |
| Hearing dates: | 22, 23 & 24 July 2020 |
| Date of Last Submission: | 24 July 2020 |
| Delivered at: | Adelaide |
| Delivered on: | 22 February 2021 |
REPRESENTATION
| Counsel for the Applicant: | Mr Anderson |
| Solicitors for the Applicant: | CG Family Law |
| Counsel for the Respondent: | Mr Bowler |
| Solicitors for the Respondent: | Duncan Basheer Hannon |
ORDERS
In full and final settlement of all claims for settlement of matrimonial property:
That, pursuant to section 44(3) of the Family Law Act 1975 (Cth), leave is granted for the wife to proceed with her application for property settlement out of time.
The husband pay to the wife the sum of fifty two thousand dollars ($52,000.00) within fourteen (14) days of the date of these orders.
Within fourteen (14) days of the date of these orders, the husband do execute a transfer of his shares to the wife, at his expense, to the value of 32.5% of his current share portfolio.
The parties are given liberty to apply in the event that order (3) hereof cannot be satisfied.
Pursuant to section 90XT(1)(a) of the Family Law Act 1975 (Cth) there be a splitting order, in the sum of sixty thousand dollars ($60,000.00), made in the wife’s favour out of the funds currently standing in the husband’s name in his Super Fund B Account.
The trustee of the Super Fund B Fund do all things necessary to give effect to order (5) hereof and within twenty eight days (28) of the making of this order to rollover the sum to be split in the wife’s favour to the superannuation fund as nominated by the wife.
The wife will serve a copy of these orders on the trustee of the husband’s Super Fund B Fund within twenty eight days (28) of the date of these orders and thereafter the aforesaid trustee has liberty to relist the matter in the event that the trustee is unable to comply with order (5) hereof.
The trustee of the Super Fund B Fund and the wife in accordance with the Family Law (Superannuation) Regulations 2001 shall do such acts and things and sign all necessary documents as are required to calculate the payment entitlements of the wife in accordance with order (5) hereof.
Including but without limiting the effect hereof, the husband shall retain for his sole use and benefit absolutely free from any further claim or demand of the wife:
(a)the furniture and furnishings in his possession, power and control;
(b)any motor vehicle in his possession;
(c)all savings, shares and investments in his name subject to orders (2) & (3) hereof;
(d)any superannuation entitlement, long service leave, annual leave or other work related benefits, standing in his name subject to order (5) hereof;
(e)his personal effects; and
(f)any other real and/or personal property and/or financial resources of the husband or in the husband’s name and/or possession not otherwise specified herein.
Including but without limiting the effect hereof, the wife shall retain for her sole use and benefit absolutely free from any further claim or demand of the husband:
(a)the furniture and furnishings in her possession, power and control;
(b)any motor vehicle in her possession;
(c)all savings, shares and investments in her name;
(d)any superannuation entitlement, long service leave, annual leave or other work related benefits, standing in her name;
(e)her personal effects.
(f)any other real and/or personal property and/or financial resources of the wife or in the wife’s name and/or possession not otherwise specified herein.
All applications be otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Vince & Vince (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT ADELAIDE |
ADC 4545 of 2007
| MS VINCE |
Applicant
And
| MR VINCE |
Respondent
REASONS FOR JUDGMENT
Introduction
These reasons for judgment focus on issues relating to the division of property, following divorce, and the provision of financial support for children, following parental separation. At its heart, it is a limitation case.
For reasons of public policy, the applicable legislation stipulates periods of time in which such applications can be made to the court. The applicant in this case is significantly out of time in respect of seeking a matrimonial property settlement and retrospective child support.
In fact, the case relates to property essentially acquired long after the parties had separated. However, the property received by the respondent concerned has, as one of its components, recompense for income which would have been earned during the parties’ marriage and at a time when the relevant applicant was providing the majority of financial support for the parties’ children.
In the case of property proceedings, the limitation period is one of twelve months from the date on which a divorce is granted; in the case of applications to depart from administrative assessments of child support, the period is eighteen months from the date of the relevant assessment.
However, the court is endowed with a discretion to extend time, if it is satisfied that hardship would be accorded to a party to the relevant marriage or a parent or child affected by the applicable child support assessment.
This case centres on issues of hardship. It is also concerned with the time the relevant applicant became aware that she had a potential claim and whether the explanation provided by her for not acting sooner can be regarded as being a reasonable one.
Background
Ms Vince “the wife”[1] and Mr Vince “the husband” are the parents of X born in 2001 and Y born in 2004. The parties were married in 1999 and divorced on 11 April 2009.
[1] This is the name utilised by the wife in her current application before the court and in all her previous applications. During the trial, she indicated that she had changed her surname back to her maiden name of “Z” by deed poll in 2019. This change has not been formally recorded in the current proceedings. I mean no disrespect but will refer her as either “the wife” or Ms Vince in the reasons for judgment. As a matter of convenience, it appropriate that I follow the same course in respect of Mr Vince, although the parties are now long divorced.
When the parties began their relationship, the wife was in her late twenties and the husband was around thirty years of age.[2] They each owned a motor vehicle and had some other personal items of modest value.
[2] The husband was born in 1968. The wife was born in 1975.
It is also common ground between the parties that, at the date of their final separation, they were living in rented accommodation and were in debt. Accordingly, at the time, there was no property to be divided between them in practical terms. The parties had roughly equivalent holdings of superannuation.
The wife commenced the relevant proceedings, in this court, on 23 March 2017, seeking leave to proceed with property settlement proceedings, out of time, pursuant to section 44(3) of the Family Law Act 1975. She is approximately seven years out of time.
The husband responded to this application on 19 October 2017. He opposes the wife’s application and seeks its dismissal. The factual background to the application is complicated and unusual.
The parties finally separated, in difficult circumstances, in February 2007. Following the separation, X and Y lived predominantly with their mother.
However, there were extensive proceedings between the parties, again in this court, between August of 2007 and October of 2016, relating to parenting arrangements for X and Y. The judicial officer overseeing these proceedings was Judge Mead (as Her Honour then was).
The proceedings between the parties, in respect of arrangements for X and Y’s care, occurred in two main tranches. Between 1998 and 2005, the parties lived in suburban Melbourne, during the majority of which time the husband was in full-time employment.
In 2005, the husband’s employment was terminated in controversial circumstances. As a consequence of that, shortly prior to Christmas 2005, the family moved to Town C in South Australia, where the wife’s parents lived. At the time, the husband was suffering a severe psychiatric illness. He was not able to work.
It is Ms Vince’s evidence that Mr Vince was violent towards her and behaved in an obsessive manner, which was emotionally abusive. No doubt this behaviour was precipitated by Mr Vince’s illness, but his conduct was a major factor leading to the parties’ separation.
The first round of proceedings centred on what periods of time the children should spend with their father in these challenging circumstances. Mr Vince was hospitalised from time to time and medicated. Ms Vince decided to move, with the children, away from Town C to Town D, where she felt safer.
As the proceedings progressed, an independent children’s lawyer was appointed for X and Y and a family report prepared. In tandem with these interventions, Mr Vince provided medical reports from his various treating medical practitioners, particularly his psychiatrist, Dr E.
Ultimately, after Mr Vince had spent a period of professionally supervised time, with the children, at a children’s contact centre, and thereafter with the husband spending time with the children, subject to lay supervision, the parties’ competing applications were fixed for final hearing in mid-2010.
In the lead up to this trial, the husband aspired to parenting the children in a shared care regime. However, shortly prior to the commencement of the trial, he indicated as follows:
“It has always been my wish to have the children live with me and the mother on a week about basis.
I have given due consideration to resolving this matter without further argument, as I believe it to be in the boys’ best interest to have certainty in their lives.
I will therefore not pursue a shared parenting arrangement and have modified my proposals in relation to my ongoing time with the children …”[3]
[3] See father’s affidavit filed 31 May 2010 at [88] – [90]
In this context, on 16 June 2010, the parties were able to agree on a raft of orders in respect of X and Y’s care, which saw the children living predominantly with their mother but spending regular periods of time with their father.
However, I have no doubt, notwithstanding this level of agreement, that the parties’ parenting relationship, with one another, can only be characterised as being one of suspicion, hostility and a compromised level of communication. This state of affairs has continued until the present time.
The second tranche of proceedings were commenced, by the husband, in late December 2014. At the time, he sought an urgent injunction restraining the mother from relocating X and Y’s place of residence from Town D to Adelaide. At the time, Mr Vince was living in Town D, having moved there, no doubt to be closer to the children concerned.
Ms Vince responded to this application in February of 2015. By this stage, she had moved with the children to suburban Adelaide. It being her position that the move was likely to provide X and Y with greater educational opportunities and would provide her with more secure and fruitful employment.
From Mr Vince’s perspective, the relocation was one to be characterised as unilateral, as he had made it clear that he did not consent to it, particularly given that it did not accord with the spirit of the earlier order. He regarded the move as another example of the mother’s manipulative conduct and disregard for his role in the children’s lives.
Again, an independent children’s lawyer was engaged to represent the interests of X and Y, whilst this controversy was litigated and a further family report was prepared. In the interim, Ms Vince was ordered to return the children to Town D and a further trial was listed for November of 2015.
Throughout the entirety of the period, during which the parties were engaged in litigation for care arrangements for their children, it is clear that Mr Vince was not able to engage in paid workforce, due to his illness. Ms Vince was engaged in employment.
In these circumstances, given the care arrangements for the children, Ms Vince was required to pay child support to Mr Vince. This appears to have been a source of some grievance for her.
For his part, Mr Vince appears to have been somewhat bitter that his aspiration for shared care had not been achieved and was further threatened by Ms Vince’s desire to move to Adelaide with the children.
In all these circumstances, the parties were unable to resolve the difficult issue of relocation and the proceedings between them went to trial before Judge Mead on 4, 5 & 6 November 2015, with final submissions occurring on 25 January 2016 and judgment being delivered on 7 October 2016.
It is the wife’s case that the husband made certain disclosures, during his evidence given at the trial in November 2015, which clearly indicated that his financial circumstances had significantly changed during the period after the parties had separated.
If this is the case, the husband contends that it does not provide sufficient explanation as to why the wife did not instantaneously bring her current application with the alleged revelations, but rather waited a further period of around seventeen months before commencing the current proceedings. The implication being the delay has caused him prejudice and does not have an adequate explanation.
For her part, the wife contends that she was awaiting the outcome of the further children’s proceedings before Judge Mead and the husband himself behaved in a consciously obstructive manner in respect of her potential claim and concealed salient aspects of his affairs from her, notwithstanding her concerted requests that he provide disclosure to her.
Accordingly, the wife submits that she has provided an explanation for the delay and in the overall circumstances, the hardship to be occasioned to her, if she is not allowed to proceed with her action is demonstrable – she will be deprived of her proper entitlements, stemming from supporting herself and the children, during a lengthy period of time, with little assistance from the husband, who has attempted to frustrate her. Under pinning her case is that contributions can be made by a spouse to property acquired after separation if justice demands.
For his part, the husband contends that he did not frustrate the wife’s application or attempt to conceal financial information from her and he was, in any event, under no obligation to disclose his financial affairs to his former wife, from whom he was long separated.
More significantly, it is the flavour of his case that his change in financial fortunes came about through his own efforts, largely unaided by the wife. As such, the monies he has received represent compensation for his own travails, not those of the wife. In these circumstances, it would not be equitable for her to share in his change of financial situation.
Judge Mead had available to her, in determining the appropriate outcome of the 2015/16 proceedings, a family report prepared by a psychologist, Ms F. In her report, dated 9 August 2015, Ms F identified some of the themes, which are relevant to the present proceedings. The salient passages of the family report are as follows:
“[Ms Vince] said Mr Vince is never going to work again. His is still attending court in Melbourne to get damages for an incident that happened at his work before Y was born. She needs to provide a financial future for the children. She has been working since 1988 and still does not own a house.
…
In relation to finances, Mr Vince is right on the border of 34% and 35%. She has to pay him child support. There is constant conflict of how to interpret Court orders. Mr Vince claims that she owes him money and she has retained the children when she shouldn’t. Ms Vince said this is not right … Basically child support is not set up for their situation and it is not helpful at all. She pays for uniforms, camp fees and sports. She pays for all the children’s costs. She can ask if these costs can count towards child support that she pays him and he always says that because he doesn’t intend to work, it is not appropriate. He always says no because he doesn’t intend to work ever again. His sources of money are Centrelink, compensation, her, and his parents. If he gets more time with the children, Mr Vince is looking at this as a source of income. If he gets the children more, he will get more money from Ms Vince.”[4]
[4] See Family Assessment Report dated 9 August 2015 at pp 7 – 8
In interview with Ms F, Mr Vince is reported as indicating to her that his financial circumstances were straitened and he could not afford to travel regularly to Adelaide. He also indicated his view that Ms Vince wished to move to Adelaide in order to gain greater child support from him and a larger share of the Family Tax Benefit.
The trial before Judge Mead centred on a number of inter-related issues stemming from the fact that X and Y were then living with their mother and father on a four/ten night per fortnight regime, during school terms, with the school holidays being evenly divided.
Mr Vince resolutely resisted the wife’s relocation application. He sought to restrain the children moving away and wished to increase his time with them to five nights per fortnight. It was his position that he could not afford to move away from Town D, because this location offered him cheap rental accommodation. In addition, the husband submitted that his psychiatric health would be adversely affected if he lived in Adelaide.
For her part, Ms Vince contended that she would be better off financially and emotionally, if permitted to live in Adelaide. She submitted that there was no practical impediment to Mr Vince moving in tandem with her and the children to Adelaide, given his then circumstances, which involved him being in receipt of social security and living in rented accommodation. She was open to the children spending more time with their father, if he elected to move.
Accordingly, financial issues were germane to the outcome of the 2015/2016 relocation proceedings. Mr Vince addressed them, to some extent, in his trial affidavit, which was formally filed with the court on 20 October 2015, shortly prior to the date scheduled for the trial to begin. His evidence, provided at this stage, can be summarised as follows:
·His psychiatric condition prevented him being in paid employment but did not affect his capacity to devote himself to the full-time care of X and Y;
·He had been pursuing a claim, against his former employer, through WorkCover Victoria for a number of years;
·His employment had been terminated during the parties’ marriage and the wife had not been sympathetic to his situation;
·This had led to the wife being unsupportive of his claim and discouraging him from pursuing it;
·WorkCover Victoria had accepted, in 2011, that he had an underlying psychiatric illness which had been exacerbated by his employment, leading to him having no capacity for paid employment;
·As a consequence, he had recently been approved “to receive ongoing weekly payments for WorkCover Victoria and am to receive back-pay for the payments that were stopped some years ago”. In addition, he was to be reimbursed for past and future medical expenses;
·He had been examined by a number of psychiatrists for medico-legal purposes. These psychiatrists had been appointed by both his solicitors and by the solicitors for the relevant employer and its insurer;
·Ultimately, a medical panel confirmed that his underlying psychiatric disorder, namely a bipolar disorder, had been exacerbated by his employment.[5]
[5] See husband’s affidavit filed 20 October 2015 at [24] – [34]
Accordingly, it is Mr Vince’s position that he did formally indicate that his financial circumstances had changed around this time. The wife does not necessarily agree. She caused her solicitor to issue a subpoena directed to the solicitor for the relevant insurer to provide all medical material prepared in respect of Mr Vince’s WorkCover action, along with details of any financial agreement reached between him and his former employer.
Both Mr Vince and the firm of solicitors concerned objected to producing the documents concerned. Mr Vince on the basis that the information was “personal, private and potentially embarrassing” to him. The solicitors on the basis that the documents were covered by legal professional privilege.
It seems clear that the documents in question were not produced. However, it is also clear from Judge Mead’s judgment that Mr Vince was extensively cross-examined about the settlement of his WorkCover claim and its implication for his capacity to move to Adelaide.
In her judgment, Judge Mead found as follows:
“Mr Vince swore his trial affidavit, filed 20 October 2015, on that same day. He deposed to his financial circumstances and issues in relation to his Work Cover claim in paragraphs 25 to 34 of that affidavit. He deposed in paragraph 29 to having recently been approved to receive on-going weekly payments from Work Cover Victoria and to the fact that he was to receive back-pay for the payments that were stopped some years previously, as well as being reimbursed for medical and associated expenses.
Mr Vince was cross-examined at length as to those financial matters. It was abundantly clear from his evidence that he had deliberately avoided providing details of his Work Cover settlement to the mother or her legal practitioners prior to trial notwithstanding numerous requests for same.
He conceded that at the time of trial he was receiving a weekly payment of $1,570, that he had received a settlement of $80,000 in 2011 with respect to a serious injury claim and had received the sum of $760,000 by way of settlement after an agreement in principle on or about 2 June 2015. He said that he had to reimburse Centrelink $140,000 from those funds and that after tax and legal fees he retained something over $400,000 which he received in late July 2015.
He conceded in answer to a question from the Court that he did not want to tell the Court or the mother’s legal representatives that information.
When asked by the mother’s counsel why he did not tell Ms F that the financial impediment to him moving to Adelaide or its environs had been removed, he said there were other reasons why there were impediments to moving, including his stress levels.
When it was put to Mr Vince in cross-examination as to whether it had occurred to him that the information about his financial situation should have been put before the Court, he replied that it did not count for who was the better parent.
I am satisfied that the Mr Vince knew in advance of his appointment with Ms F on 12 June 2015 that he was to receive a substantial sum in settlement of his Work Cover claim, as well as receiving on-going weekly payments.
I am satisfied that he deliberately withheld that information from Ms F, the mother’s legal representatives and from the Court. I find there is no financial impediment to the father moving to Adelaide or somewhere near Adelaide in the event that the mother is permitted to relocate the children to live with her in Adelaide.”[6]
[6] See Vince & Vince [2016] FCCA 2590 at [32] – [39]
Judge Mead was also critical of Mr Vince in respect of issues relating to the level of financial support provided by him in respect of X and Y, which is a relevant criteria pursuant to section 60CC(3)(ca) of the Family Law Act. She found as follows:
“At the time of trial the father was not paying child support. His evidence was that he had contacted the Child Support Agency when he had either received his lump sum payment or began receiving further weekly payments.
His evidence about his finances was totally unsatisfactory. Not only had he deliberately avoided disclosing any financial information to the mother’s solicitors prior to trial but he was exceedingly coy in that regard at trial and it was difficult to ascertain exactly what his financial circumstances were at the time.
It appeared from cross-examination that there were ongoing disputes with the Child Support Agency and/or the SSAT. I accept that by the time this judgment is delivered further information would have been obtained by the Child Support Agency and the matter perhaps to some extent remedied.
I find however that post-separation and to the date of trial the father was less than committed to providing funds to maintain the children.
I am satisfied that the primary financial support for the children was provided by the mother.
I consider that this is an important responsibility of parenthood and that post-separation and to the date of trial it was a responsibility primarily borne almost solely by the mother and avoided by the father.
The father’s evidence about contributions made to the costs of some of the children’s extracurricular activities illustrated an attitude on his part of expecting the mother to provide effectively all of the children’s financial support.
I find that even on the unsatisfactory evidence as to the father’s financial position at trial he certainly had the capacity to make financial contributions to the children’s upkeep even if his offers were informal and not through the normal child support channels, but he clearly had no intentions of so doing.”[7]
[7] Ibid at [114] – [121]
I am not bound by Judge Mead’s findings and cannot rely on her findings of credit. The relevance of this material, from the husband’s perspective, is that the issue of his changed financial circumstances was well known to the wife in late 2015, if not earlier, yet she did not institute proceedings sooner.
From the wife’s perspective, the relevance of the material is to support her contention that the husband has been disinclined to provide financial support for the children and is motivated by his dislike for her, which stems from his perception that she did not support him when he was ill and later, when pursuing his claim for compensation, led him actively to conceal his financial affairs from her and to be as uncooperative as possible in regards to them.
Ultimately, Judge Mead determined that Ms Vince could relocate, with the children, to Adelaide, at the commencement of the school year in 2017, which she duly did. However, the final orders also provided for Mr Vince to spend five nights per fortnight, during school terms, with the children, in the event he moved to Adelaide to live, which he too duly did, moving to the suburb of Suburb G.
It is my impression that the poor relationship between the parties has not improved in the thirteen years which have passed since their separation. X is now an adult. Y has lived with each of his parents for varying periods of time. He is currently living with his mother and has done so since the early part of last year.
Given the intractability of the issues between them, each party has incurred substantial legal costs over the years. At present, the wife estimates she owes around $123,000.00 in legal fees; the husband has paid some of his costs, but estimates that the proceedings have cost him approximately $110,000.00.
The husband’s change of financial circumstances
Ms Vince is a health care worker by occupation, although she is currently studying. Mr Vince has tertiary qualifications in construction. However, as indicated above, he has not been employed in the paid work force for many years due to the sequellae of his psychiatric illness.
In 2001, the husband was working for a company known as H Company in Melbourne. It is part of the J Company conglomerate.
It was Mr Vince’s view that the systems for which he was responsible were unsafe but management superior to him did not accept his assessment and forced him to sign off on the systems concerned against his better judgment. This caused him to suffer anxiety.
During 2003, Mr Vince became more and more stressed at work. He is a punctilious and principled person. This state of affairs caused him to suffer greater and greater levels of stress in his workplace, which came to the fore at a meeting convened in late 2003.
Mr Vince was unable to continue working and initially received weekly workers’ compensation payments for the period between 12 August and 10 September 2003. On his return to work, matters had not improved and it is apparent he became more and more unwell.
Initially, Mr Vince was diagnosed with a major depressive illness but this diagnosis has proved to be incorrect and more recently, in 2007, he was diagnosed with a bi-polar condition. Ultimately, after receiving some workers’ compensation payments, Mr Vince’s employment was terminated in 2005.
It was Mr Vince’s perception that his termination represented a grave injustice. In 2004, H Company made an offer to compromise any future claims he had against it for the sum of $70,000.00. The husband regarded the sum offered as being derisory. He rejected it. His weekly payments of compensation ceased.
This situation inaugurated a period of great financial austerity for the family. It was the catalyst for the move to South Australia, which both parties perceived would provide a cheaper standard of living. At the time, X was a pre-schooler and Y newly born. Ms Vince could not easily work. Mr Vince received a disability pension; whilst Ms Vince had a carer’s allowance and later worked 2 or 3 days a week at a hospital.
At the same, it is the effect of Ms Vince’s evidence that Mr Vince was very unwell indeed. On her evidence, he was subject to auditory and visual hallucinations. She believed that his behaviour had become obsessive, including in respect of his sense of grievance against his former employer.
She wished that he had accepted the offer of settlement made to him. She resented the amount of time he spent on researching the law relating to workers’ compensation and would have preferred that he drop his claim, which she regarded as being unhealthily obsessive.
The parties borrowed money from relatives to survive, particularly Mr Vince’s parents. Ms Vince perceived that Mr Vince squandered money on hobbies with which he became fixated. She asserts that he had four credit cards at one stage. From her perspective, this was a particularly difficult time. She did not know if there would be money in the parties’ account to pay for groceries when she presented her card at the till.
She asserts that she felt drawn into the husband’s legal struggles and helped him with various aspects of his claim, which she considered likely to be fruitless. At the same time, she was largely responsible for maintaining the home and parenting X and Y, in circumstances of great financial privation and emotional stress.
Mr Vince agrees that the period between the cessation of his WorkCover payments and the parties’ final separation was a period of great financial privation for the family. He does not dispute that he was severely unwell. It is his evidence that the family survived by borrowing money on multiple credit cards; loans from his family; Centrelink payments; and the wife’s part-time work.
It is the husband’s position that the parties were grossly in debt at the date of separation and owned only the modest contents of their home. In his perception, from the informal division of assets which followed, the wife retained all the items of property of any worth, leaving him with practically nothing.
It is his case that the parties’ respective levels of superannuation were roughly approximate – he had $100,000.00; whilst the wife had $70,000.00. As such, neither thought it necessary to alter these holdings or seek any formal orders in respect of other items of property. This is not to say Mr Vince considered what had occurred to be fair to him.
To the contrary, he remains highly aggrieved at the outcome of this informal property settlement and this has, to some extent, formed his attitude to the current proceedings. It is his case that he was left with responsibility for all the significant debts of the marriage, which the wife escaped scot free.
Given his compromised health and unemployment, he was not able to service the debts, notwithstanding the fact that he was able to access some of his superannuation through hardship provisions and borrowed further sums from his parents. He has provided a statement, dated 30 June 2008, indicating his superannuation balance was around $24,000.00.[8]
[8] See Exhibit I
In these circumstances, he was compelled to seek bankruptcy, on his own petition in July of 2008. In his own words, he became bankrupt “to get rid of the stress”. I accept that this was an extremely difficult process for Mr Vince and caused a severe blow to his sense of self-respect. He felt abandoned by his former wife and let down by his former employer. I have been provided with a copy of the notification of Mr Vince’s bankruptcy.[9]
[9] See Exhibit D
It indicates that he had debts of $128,847.00, one of which was to his father, Mr K ($25,000.00) and another to a company associated with Mr Vince (L Pty Ltd - $29,938.00). The other debts seem to be to credit providers. Mr Vince was discharged from bankruptcy in 2011.
From Mr Vince’s perspective, there was a clear connection between his incapacity for work and how he had been treated by H Company. In addition to being principled, Mr Vince is determined and methodical. He was not inclined to let any potential claim against the company go, notwithstanding the difficulties confronting him.
He is also capable of great focus, which Ms Vince would characterise as obsessive in nature. I mean no disrespect, but Mr Vince is not the sort of person who will let bygones be bygones. He diligently researched issues to do with workers’ compensation. He discovered that a claim of his kind was not subject to any limitation period. Again, in his own words, he decided “to bide [his] time until he could get what [he] was entitled to”.
In the medium to longer term, after the parties had separated, he elected to concentrate on re-gaining his health and pursuing his application in respect of parenting arrangements for X and Y. He also consulted an experienced firm of workers’ compensation solicitors in City M.
Given the animus between him and Ms Vince, which had been precipitated by their difficult separation and the ensuing vitriolic proceedings regarding care arrangements for the children, Mr Vince was disinclined to keep Ms Vince informed of the progress of his case. From his perspective, it was his business alone.
Mr Vince’s case for compensation from H Company had two components. In 2010, he commenced proceedings under the Accident Compensation Act 1985 (Vic) for compensation for suffering a serious injury at work. The other aspect of his case related to a claim for reinstatement of the weekly payments of compensation, which had been ceased when his employment was terminated.
Mr Vince resolved the first aspect of his case in 2011, when he signed a deed of release in which he agreed to accept an all in offer of $80,000.00 to settle his serious injury claim. His solicitors took $15,000.00 of this sum on account of costs.[10]
[10] See Exhibit M
In 2015, a medical panel instituted under the relevant legislation found that Mr Vince had been incapacitated for work from 2004 onwards on the basis that his pre-existing medical condition of a bi-polar disorder had been exacerbated by stress in the workplace.
As a consequence, he was entitled to weekly payments of workers’ compensation from this date, together with payment of all reasonable medical expenses relating to his condition.[11] In her affidavit, filed in support of her application for leave to proceed out of time, Ms Vince deposed as follows:
“In approximately mid 2015 our son Y told me that the father’s previous employer had to pay him $1,570.00 per week and ‘he got heaps of other money as well that he bought parts of companies with like gold and stuff’”.[12]
[11] See Exhibit N
[12] See wife’s affidavit filed 23 March 2017 at [39]
In addition, Ms Vince was given to understand Mr Vince had been able to purchase a large flat screen television set and had been able to holiday with the children in Queensland and the Northern Territory, which did not seem a feasible level of expenditure if Mr Vince was in receipt of social security as his sole source of income. In these circumstances, she was also suspicious that he had not provided a contemporary tax return.
In gross terms, the sum to which Mr Vince was entitled was around $800,000.00. However, he was obliged to reimburse social security and pay tax on the sum. He was also entitled to interest on the sum. Ultimately, he received a sum in an amount of $478,434.59 in June of 2015.[13]
[13] See Exhibit H
Pursuant to the relevant decision, Mr Vince continues to receive weekly payments of compensation attributable to his workplace injury. He is subject to regular medical examinations to assess his current level of functioning and whether he is capable of returning to work. The reality is that it is highly improbable he will return to work.
From Ms Vince’s point of view, the change in Mr Vince’s financial circumstances has been profound and continues in its effect. He is now a salary earner and has been since the parties separated, during which period she was the parent who primarily supported X and Y, although due to the operation of the child support system it was she who had to pay child support to him.
Mr Vince is prudent so far as financial affairs are concerned. For personal reasons, he has no desire to purchase a home for himself. He has made some repayment of monies, which he asserts he owes to his parents, who supported him during his long period of financial austerity.
He has made some other modest purchases of consumer items for them and himself and paid his legal fees. Otherwise he has invested his lump sum reimbursement of back wages into three parcels of publically listed Australian shares (including N Company) and in term deposits with the NAB. The amount concerned is around $300,000.00.
It is the wife’s position that considerations of justice and equity require that these various sums disbursed by Mr Vince be notionally added back into what she says is the matrimonial asset pool, creating a much larger pool approaching $550,000.00. The husband does not accept that there is any proper rationale for these add backs.
At the present time, the husband holds superannuation totalling about $410,000.00. Of this sum, the husband concedes he contributed approximately $175,000.00 between June 2016 and 2017. The wife has deposed that she holds superannuation to a value of approximately $161,000.00.
On 25 November 2015, following the disclosures made by Mr Vince on oath, in the proceedings before Justice Mead, the wife made an application to the Registrar of the Child Support Agency to depart from the then administrative assessment of child support on the basis that it no longer reflected the husband’s income.
The Registrar dealt with the application on 22 January 2016 and determined as follows:
·From 1 July 2015 to 30 June 2016 Mr Vince’s child support income would be set at $80,000.00;
·From 1 July 2016 to 30 June 2017 Mr Vince’s child support income would be set at $81,600.00;
·From 1 July 2017 to 30 June 2018 Mr Vince’s child support income would be set at $83,232.00;
·From 1 July 2018 to 31 December 2019 Mr Vince’s child support income would be set at $85,000.00.
As a consequence, from the date of the determination, Mr Vince was assessed to pay Ms Vince an annual amount of child support fixed in an amount of $11,050.00. As the relevant decision maker noted, the Registrar had jurisdiction to depart from administrative decisions for only the preceding 18 month period.[14]
[14] See Exhibit K
The respective applications of the parties
In her further amended application filed on 10 May 2019, Ms Vince seeks the following orders:
·Leave be granted pursuant to section 44(3) of the Family Law Act 1975[15] to proceed with an application for matrimonial property settlement out of time;
·That she receive an amount calculated to be 40% of the asset pool;
·That there be an equalisation of the parties’ superannuation holdings;
·A departure order be made pursuant to section 117 of the Child Support (Assessment) Act 1989[16] in respect of the period from 1 October 2010 to 31 December 2022 to reflect income received by the husband by way of WorkCover payments;
·In the alternative, the relevant assessments be varied so as to result in the wife having to make no payments of child support to the husband for the period from 1 October 2010 to 31 December 2022. Presumably this would result in Ms Vince having some form of child support credit.
[15] Hereinafter referred to as The Act
[16] Herein after referred to as The Assessment Act
The applicant’s case, in respect of child support, is not, with all due respect, expressed with any great degree of particularity. Counsel for Ms Vince, Mr Anderson concedes that there is a risk of a doubling up in respect of two branches of Ms Vince’s claim.
From her perspective, she does not care how any lump sum payment received by her is characterised, so long as she receives what she believes is a reasonable proportion of the husband’s lump sum payment attributable to both lost wages and compensation for his injury. To echo the words of Deng Xiaoping, she does not care whether the cat is black or white so long as it catches the mice.
Mr Vince has maintained an unwavering position throughout the proceedings. He opposes the granting of leave and seeks that the wife pay his costs of the proceedings.
The case has had a somewhat tortuous path to final hearing. In accordance with the protocol adopted by the Federal Circuit Court in respect of the allocation of matters, the application was allocated to the docket of Judge Mead, as she had previously had carriage of the matter.
Her Honour dealt with a number of interlocutory matters, between June 2017 and November 2018, including an application that she recuse herself on the basis of having made an adverse finding in respect of Mr Vince’s credit during the 2015/16 proceedings. She fixed the matter for final hearing on 9 May 2019.
Her Honour was appointed to the Family Court in March of 2019. Judge Kari, of this court, assumed conduct of many of Judge Mead’s matters. However, Judge Kari disqualified herself from hearing the case and the May 2019 trial date was vacated and the matter allocated to me.
On 30 July 2019 the case came before me for the first time. I was concerned that it had been outstanding for a significant period of time and allocated a further hearing date in late July of 2020, which at the time was the earliest hearing date I could provide.
Given this delay, for reasons of pragmatism, I have elected to hear the wife’s application for leave to proceed out of time, in respect of both matrimonial property and child support, concurrently with her substantive application.
In these circumstances, Mr Vince has been compelled to provide his defence in respect of the substantive application. This centres on issues to do with monies he contends are due to his parents, as repayment of loans, and which therefore should not be included in the pool of assets, and other controversies relating to add backs generally.
The Evidence
This has not been an easy judgment to write. Each party has filed multiple affidavits. There were numerous documents tendered. Mr Vince’s financial affairs, particularly the flow of money in and out of his financial control, has not been easy for me to grasp. I have had to reconstruct, as best I can, his financial history from the many documents provided.
However, in this context, I bear in mind that it is not the court’s function to act as an auditor of Mr Vince’s financial affairs and reconcile each and every payment he has received and tabulate all his expenditure. Rather, as best I can, I must determine the issues falling before me in a just and equitable manner.
Although there are many controversies arising in this case, in my view, it is not one which centres on the court making findings of credit. In my assessment, although the parties present as markedly different in the witness box, they share one attribute in common. I found each of them to be painstakingly honest.
They, however, as a consequence of their traumatic separation and the protracted and bitterly contested proceedings which followed, do not trust one another. This has created the background for this third round of proceedings between them and a setting in which no concessions are made and every point is taken. In simple terms, the parties cannot afford this type of litigation in which, regrettably, the lawyers concerned have been the major beneficiaries.
The husband has a singular personality. He is not, however, a liar. He is something of a pedant by nature. He was methodical in the presentation of his case and a stickler for exactitude to the point of literalism. He approaches matters in dichotomous terms. A time limit either applies or it does not. For obvious reasons, he is disinclined to help the wife. It is his view that she has no moral entitlement to his compensation payments as she, in effect, abandoned him when he was most in need.
It is Mr Vince’s position that the time limit in this case was unequivocal and either was or should have been known to the wife. As such, he is entitled to the benefit of it and Ms Vince should be penalised. Mr Vince is not inclined, by temperament, to see subtle graduations in respect of such matters.
However, apart from his propensity to approach issues in a black or white manner, the major factor influencing the manner in which he has chosen to approach the case, is his deep and abiding antipathy for his former wife, whom he perceives has betrayed him both actually and in moral terms, in the years since the parties separated.
In these circumstances, he is ethically opposed to doing anything which he perceives will assist or advantage her in any way whatsoever, even if it comes at the cost of economic disadvantage to him. To the contrary, I have the perception he may regard such an outcome as a price worth paying. He regards her as feckless and grasping and a person whom his personal ethics require to be resisted come what may.
As such, from his perspective, he regards the case as a matter of the highest principle. Sadly, it is my impression that he also approaches the case as a means to get back at Ms Vince, for all of his previous suffering, which he in part attributes to her and which he perceives she did not help to alleviate.
Mr Vince is also an extremely patient and determined person, who is implacable in his resolve. This is most obviously demonstrated by his long struggle with H Company, in which ultimately he was successful. It is his position that he was morally vindicated in his righteous struggle against his former employer, which had behaved grievously, so far as he was concerned.
But, as it was he who took up the struggle, in the face of Ms Vince’s objections and against great odds, the victory must be his alone, given his perception that Ms Vince repudiated his struggle and abandoned him, when he needed her support the most. As such, in moral terms, she should not share in the fruits of his victory and it would be against his personal principles for her to do so.
Given his views, Mr Vince feels that he is under no compunction to assist Ms Vince or was under any obligation to provide her with information voluntarily, or indeed give any leeway in how he has conducted his case. That is not to say I consider that he has been consciously dishonest or disingenuous.
Essentially, I find that he is disinclined to provide any modicum of assistance to Ms Vince but has not actively lied. To the contrary, at times, he was pedantically mannered in how he approached questions, querying sums down to a few dollars and answering counsel’s questions with extreme literalism.
On the other hand, Ms Vince did not present, at all, as a worldly person or as one with a head for figures or legal issues generally. She approaches the world in a more laissez faire fashion than her former husband. She also is not temporally inclined to take a combative approach to the world. Rather, she seemed to me to be something of an innocent abroad.
However, Ms Vince also has a closely honed sense of what is fair. From her perspective, it is just not fair that she should have struggled financially, for just as long as her former husband did, and then not receive some share in his compensation.
What the parties have in common is a propensity to tell the truth, as each perceives it, from their own particular perspective. The husband sees the truth in black and white terms. The wife has a more subtle notion of fairness, not necessarily grounded in prosaic terms. However, in terms of what actually happened and when it did, this difference in personality has no great moment.
It is not particularly hard, in my view, for the court to prepare a clear narrative of what has happened in chronological terms. In addition, there is a plethora of documents, from insurance companies and the like, who are obliged to keep accurate records. As such, it cannot be said that there has been any deficiency, in discovery, on either side.
In these reasons for judgment, findings of fact are made on the balance of probabilities, from my observation of the demeanour of each of the witnesses concerned.[17] I have tried to reach my conclusions on credibility and reliability on the basis of contemporary materials, objectively established facts and importantly, on the apparent logic of events.[18]
[17] See Evidence Act1995 (Cth) at section 140
[18] See Fox v Percy (2003) 214 CLR 118 at 129 [31] per Gleeson CJ, Gummow and Kirby JJ
The legal principles applicable
Pursuant to section 39 of the Act, this court has jurisdiction conferred upon it in respect of what are termed matrimonial causes. This expression is defined by section 4(1)(ca), to include proceedings in respect to the property of the parties to a marriage…arising out of their marital relationship.
Property is exhaustively defined by section 4 as property to which either spouse is entitled whether in possession or reversion. Clearly, this definition can include Mr Vince’s WorkCover payment and the assets into which it has more recently been converted.
Part VIII of the Family Law Act 1975 deals with financial matters relating to parties who are or have been married to one another. In particular, section 79(1) authorises the court to alter the property interests of the parties to a marriage. Part VIIIB provides specific provisions enabling the splitting of superannuation between spouses.
However, time limits are imposed in respect of such applications. Pursuant to section 44(3) where a divorce order has taken effect proceedings of the kind referred to in paragraph 4(1)(ca) shall not be instituted, except by leave of the court … after the expiration of 12 months.
As indicated at the outset, the court has a discretion provided by section 44(4) to grant leave if it is satisfied:
“that hardship would be caused to a party to the relevant marriage or a child if leave were not granted.”
It is appropriate, at this stage, for me to outline what are the principles which are to be applied, in respect of any alteration of the property interests of the parties concerned, if leave is granted.
This is because the applicable authorities require the court to make some sort of prospective assessment of what a party will forego, if leave is not granted. This is the essence of hardship.
The major provisions relating to marital property division are contained in sections 79(1); 79(2); 79(4); & 75(2) of Part VIII of the Act. Pursuant to section 79(1) the court is authorised to make such order as it considers appropriate in order to alter the interests of the parties to a marriage in relevant property.
Pursuant to section 79(2) the court is actively prevented from making such an order unless it is satisfied that it is just and equitable to do so in all the circumstances prevailing. This follows from the use of the prohibitive words “shall not” in the relevant section.
Section 79(4) provides the mechanics of how a court is to make an order altering marital property interests. It provides seven matters [in paragraphs (a) – (g)] to be considered, as relevant. In this case, the criteria provided by section 79(4)(c) are particularly germane. These go to parenting and homemaking contributions.
Paragraphs (a); (b); and (c) categorise contributions made by marital partners, which are relevant. Paragraph (d) directs the court to take into account the effect of any order upon the earning capacity of either party to the marriage concerned.
Paragraph (e) directs the court to consider a list of matters contained in section 75(2), which are germane to spousal maintenance or the prospective positions of the parties concerned by reference to their respective financial resources, means and needs.
Finally, paragraphs (f) and (g) apply to child support and previously made parenting orders, as relevant. There is some overlap between these various provisions and not all will be applicable in every case.
Until recently, the position in respect of the process to be applied to the resolution of matrimonial property cases was said to be well settled, as it required the application of a preferred approach. This approach entailed a four step process, described by the Full Court as follows:
· identification and valuation of the property of the parties;
· identification and evaluation of contributions to the property (including property no longer owned by the parties) – the contribution phase – section 79(4)(a) to (c);
· identification and assessment of the various matters in section 79(4)(d) to (g) including to the extent they are relevant, the matters in section 75(2) – the prospective needs phase;
· considerations of justice and equity.[19]
[19] See Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39] and Bevan & Bevan [2013] FamCAFC 116 at [60]
The general applicability of this four step process has been recast, to some extent, in the light of what has been said recently by the High Court in the matter of Stanford v Stanford.[20] In the case, the majority stated that:
“It will be recalled that s 79(2) provides that ‘[t]he court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order’. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.
The expression ‘just and equitable’ is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.” [21]
[20] Stanford v Stanford [2012] HCA 52
[21] Ibid at [35] – [36]
Accordingly, considerations of what is just and equitable flavour all applications pertaining to property settlement. What is fair is impossible to define with certitude and must depend on the prevailing circumstances. However, care must be taken to avoid conflating the stipulation contained in section 79(2) with the discretionary exercise contained in section 79(4).
Although, Mr Vince does not formally express it as such, the overwhelming theme of his case is that it would not be just and equitable, in the idiosyncratic circumstances arising in this case, for the court to make any property order, whether leave is given or not. Essentially, he would assert Ms Vince has not satisfied the stipulation contained in section 79(2).
This follows because of the length of the time the parties have been separated and, more significantly the construction of the asset pool, which consists almost exclusively of property directly contributed by him in the period following separation.
In Bevan & Bevan[22] the Full Court summarised three fundamental propositions relating to the interaction between section 79(2) and section 79(4), which can be summarised as follows:
·Determination of what is just and equitable begins with an identification of existing property interests;
·The discretion provided by section 79 must not proceed on any assumption that any settlement of property should be different from those existing property interests, as determined by principles of common law and equity;
·However a determination that a person has an entitlement to a division of property by reference only to section 79(4) would be wrong as it would ignore the express statutory requirement of section 79(2) or conflate the two considerations.
[22] Bevan & Bevan [2013] FamCAFC 116 at [73]
As discussed by the Full Court in Bevan, whether it is just and equitable to make any particular property order is invariably inextricably interwoven with questions of contribution arising under section 79(4) and the parties’ financial and relationship history with one another.
Although the court must be careful not to combine issues arising under section 79(2) with the exercise arising under section 79(4), it is artificial to divorce them from each other. Section 79(2) does not, however, I take it, represent a formal threshold to be crossed prior to the undertaking of the section 79(4) exercise.
It will be necessary, if leave is granted, for me to consider whether it would be just and equitable to make a property order in the circumstances of the present case pursuant to section 79(2) on the basis of the parties’ existing property interests, which sees Mr Vince holding the vast preponderance of them given the settlement of his WorkCover claim following the parties’ separation.
I cannot start on the basis of a consideration of Ms Vince’s homemaking and parenting contributions as assessed pursuant to section 79(4). However, the four step approach remains a valid approach to matrimonial property cases. In Bevan the majority of the Full Court (Bryant CJ and Thackeray J) said as follows:
“Although the High Court did not disapprove the four step process, we accept it was not approved either...However, the High Court’s decision serves to refocus attention on the obligation not to make an order adjusting property interests unless it is just and equitable to do so.
…
Stanford will also serve as a reminder that the four step process ‘merely illuminates the path to the ultimate result’.”[23]
[23] See Bevan & Bevan [2013] FamCAFC 116 at [65] and [71]
In the first step, I must ascertain what are the parties’ assets and liabilities available to be divided between them. The normal rule is that those assets are to be determined as at the date of trial.[24]
[24] See Wardman & Hudson (1978) FLC 90-466; and Biltoft & Biltoft (1995) FLC 92-614
Accordingly, if leave is granted to proceed, the asset pool should be calculated according to the assets each party currently holds now, not at the date on which they separated.
In the second step, I must ascertain the contributions, which each party has made towards the pool of assets, as are found, following the first step. Contributions fall into two broad categories.
The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly, by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any of the property of that relationship.
The second kind is contributions to the welfare of the family: in the words of section 79(4)(c), “the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent.”[25]
[25] See Family Law Act section 79(4)(c)
It is clear from the authorities that this second kind of contribution must be given appropriate weight and is not to be treated as a token matter or as a contribution which is inherently less valuable or important than a financial contribution to property.
In its totality, section 79(4) requires the court to examine the entirety of contributions, both financial and non-financial, to the welfare of the family, as well as to the acquisition, conservation and improvement of any asset which may be individually identified.
The task conferred is to weigh and assess contributions, which are necessarily disparate in nature. Contributions, within the framework of a marriage, which are different in quality and nature – that of a homemaker and parent, which is not readily quantifiable in dollar terms, and that of a wage earner; – must be compared. It has been referred to as a holistic exercise.[26]
[26] See Watson & Ling [2013] FamCA 57 at [13] per Murphy J
As a consequence, contributions are not automatically required to be tied to the acquisition of any particular item and may be taken into account in a total sense. The exercise is not a purely arithmetical or accounting one. This is the nub of Ms Vince’s case.
It is her position that she made significant parenting and homemaking contributions, during the period of the parties’ cohabitation (and indeed afterwards, when she parented X and Y with modest or no assistance from Mr Vince) and considerations of overall justice and equity do not require that these contributions have to be tied to an asset acquired during the actual period of that cohabitation.
If she is deprived of the opportunity to pursue her claim, in this respect, this would amount to her suffering a hardship in the sense envisaged by section 44(4)(a) of the Act.
In my view, in this context, the majority reasoning of the Full Court in Farmer & Bramley[27] is germane. In order to see the relevance, it is necessary to provide a synopsis of the factual situation concerned. The parties concerned were married for a period in excess of a decade. Their marriage produced one child. During their relationship, the parties acquired few, if any, assets and lived in modest circumstances.
[27] Farmer & Bramley (2000) FLC 93-060
The husband suffered from drug-related problems and was supported emotionally and financially by the wife during the marriage. The parties’ child lived with both the husband and wife after separation. After the parties separated, the husband won a significant sum of money in a lottery. The wife commenced property proceedings.
In distinction to the current matter, the application was commenced within time. However, as in the current matter, the central issue was whether a marital contribution had to relate to the present assets of the marriage – in Farmer, the proceeds of the lottery win acquired after the parties had separated – when considered in the context of the wife’s myriad contributions, in difficult circumstances, during the marriage, which had not resulted in the acquisition of any specific asset.
Finn J held as follows:
“First an issue has arisen in this appeal as to whether an entitlement based on contributions made to the welfare of the family can only be satisfied out of property available to the parties at the time the contribution was made. In my view, there is nothing in s.79(4)(c) or indeed else in the Act, or in the authorities to date, which would justify such a limitation. Again in my view, if such a limitation were to be applied in any particular case, its justification would have to be found in the generally worded limitation in s.79(2) that a court shall not make an order under s.79 ‘unless it is satisfied that in all the circumstances it is just and equitable to make the order.’
Secondly, if it was to be determined that a majority of the community considered that one spouse should, as a general rule, have no entitlement to share in property either by good fortune or good management acquired after separation by the other spouse, then the Act would need to be amended to make this clear. As the Act currently stands, the jurisdiction conferred by s.79(1) to alter the interests of spouses in property extends without limitation to all the property which either spouse is entitled ‘whether in possession or reversion’ (s.4).”[28]
[28] Ibid at 87,948 [56] – [57]
Kay J held as follows:
“[T]he Court's task is to evaluate all of the contributions from the time of the commencement of the parties’ relationship until the time of the hearing and give such weight to such contributions as the Court thinks is appropriate in the circumstances.”
In so doing the court was not restricted from considering contributions to the welfare of the family which may have been made over many previous years.
As a consequence:
“There is nothing in the legislation that requires s 79(4) (a) (b) and (c) contributions to be measured only in terms of ‘what did either party contribute to the assets of which they are presently possessed?’”
The third step involves the assessment of the parties’ prospective needs, by reference to the factors set out in section 75(2) of the Family Law Act. Pursuant to section 75(2)(o), the court is entitled to take into account “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
Finally, in determining what order the court should make under section 79, the court must be satisfied that in all the circumstances, it is just and equitable to make the relevant orders. Overall, it is the justice and equity of the actual orders that the court must consider.[30]
[30] See Russell & Russell [1999] FamCA 1875 at [80]
The “overriding requirement” of section 79 is that considerations of justice and equity should inform the process envisaged therein. The exercise I must undertake is not a “process of social engineering”[31] or of equalisation of assets or financial resources.
[31] See Waters & Jurek (1995) FLC 92-635
Considerations of this type inform the so-called fourth step, as well as providing the determination as to how the court should approach issues such as notional property. The court must make the orders it considers just and equitable.
Pursuant to section 90XC of the Family Law Act, superannuation interests are to be treated as property. As such, they attract the provisions of section 79(4) of the Act.
In C & C[32], the Full Court of the Family Court has described superannuation as a different “species of asset” from other forms of property.
[32] C & CC & C & CC (2005) FLC93-220
This is because superannuation, particularly in its accumulation phase, cannot be easily translated into cash, unlike other more “conventional” assets, such as land and personal property, and so its value accurately determined by sale.
Superannuation is a form of compulsory saving for retirement. As such, it must be preserved until its crystallisation on the occurrence of some specified event, usually permanent retirement from the workforce.
In C & C, the majority of the full court of the Family Court held as follows:
“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.
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 (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.”[33]
[33] See C & C (supra) at 79,646
The rationale behind the majority’s reasoning in C & C appears to be that, by reason of its special nature, it is often appropriate to assess contributions to superannuation interests separately to contributions made towards other more “conventional” assets.
This is so one or other of the parties’ contributions to that superannuation may be given “proper recognition”. In order to ensure this “proper recognition”, it is necessary for the court to consider what is the “real nature” of the relevant superannuation interest – namely whether it is likely to be received as a recurrent pension or a lump sum or in some other manner.
In the present case, as a consequence of their respective ages, issues to do with preparedness for retirement loom large for each of the parties. At this stage, it is doubtful that either of them is in a strong position so far as financial security in retirement is concerned. As will be explored in more detail in due course, whilst he is in receipt of worker’s compensation payments, Mr Vince does not receive any compulsory contributions from his notional employer.
As such, Mr Vince has elected to move some of his compensation payments into superannuation. Ms Vince is 49 years of age. She has modest stores of superannuation. In these circumstances, it will be necessary for the court to consider closely if and how there should be any alteration of the parties’ respective superannuation holdings.
The authorities are clear that limitation periods, imposed by the legislature, are not empty shibboleths. Their rationale is that it is in the interests of society, as a whole, that litigation between individuals be commenced within fixed and well understood temporal parameters so that once those parameters have been reached, all concerned can carry on with their lives in the certitude that they will not be subject to litigation in respect of events which occurred in their past.
In Brisbane South Regional Health Authority v Taylor McHugh J (with whom Dawson J agreed) pointed out that
“The discretion to extend time must be exercised in the context of the rationales for the existence of limitation periods. For nearly 400 years, the policy of the law has been to fix definite time limits (usually six but often three years) for prosecuting civil claims. The enactment of time limitations has been driven by the general perception that ‘[w]here there is delay the whole quality of justice deteriorates’.”[34]
[34] Brisbane South Regional Health Authority v Taylor [1996] 186 CLR 541 at 551
Later in the case, his Honour said as follows:
“A limitation period should not be seen therefore as an arbitrary cut off point unrelated to the demands of justice or the general welfare of society. It represents the legislature’s judgment that the welfare of society is best served by causes of action being litigated within the limitation period, notwithstanding that the enactment of that period may often result in a good cause of action being defeated. ... A limitation provision is the general rule; an extension provision is the exception to it. The extension provision is a legislative recognition that general conceptions of what justice requires in particular categories of cases may sometimes be overridden by the facts of an individual case.”
In the same case, Toohey and Gummow JJ said as follows:
“The discretion ... is to order an extension of the limitation period. It is a discretion to grant, not a discretion to refuse, and on well established principles an applicant must satisfy the court that grounds exist for exercising the discretion in his or her favour. There is an evidentiary onus on the prospective defendant to raise any consideration telling against the exercise of the discretion. But the ultimate onus of satisfying the court that time should be extended remains on the applicant.”
Accordingly, whether to grant an extension turns on what is in the interests of justice arising from an idiosyncratic consideration of the case concerned. In Gallo & Dawson, McHugh J indicated as follows in respect of the exercise of a discretion to extend time:
“In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time.”[35]
[35] Gallo & Dawson [1990] HCA 30
The Family Court has enumerated the individual considerations which inform the discretion to ameliorate the limitation period, in appropriate circumstances, where the interests of justice require that it be extended. Essentially, it is a discretion to be exercised judicially by identifying matters relevant to the discretion, in the particular case and weighing those matters against one another.[36] The discretion is to be exercised primarily within considerations of the hardship which would be occasioned to the relevant applicant.
[36] See Milas v GM Holden Limited [2015] FCCA 1311 per Judge Sullivan
In Whitford & Whitford the Full Court of the Family Court, in a case concerned with the twelve month limitation period arising as a consequence of section 44(3) and the granting of a divorce order, stipulated that this “… power should be exercised liberally in order to avoid hardship, but nevertheless in a manner which would not render nugatory the requirement that proceedings should be instituted within a year from the decree nisi.” [37]
[37] See Whitford & Whitford (1979) FLC 90-612 at 78,146
Accordingly, this court is not in a position to overlook the legislature’s intention that, ordinarily, property proceedings arising in respect of a marriage should be commenced within one year of the court formally dissolving the marriage concerned.
Unlike parties to a de facto relationship, the process of divorce involves a formal application to the court, which in turn produces written evidence of the dissolution of the marriage concerned. Ms Vince applied for a divorce order on 5 December 2008. The relevant divorce order was made on 11 April 2009. It is a significant period of time ago.
On the relevant divorce order is a notice informing the relevant parties of the applicable time limit. Accordingly, the wife is not in a position to assert that she was wholly ignorant of the time limit. What were the implications for the husband, in respect of any particular decisions made by him, particularly in respect of re-agitating his action against H Company, is not clear to me.
The chief rationale informing the legislature’s intention, in this regard, being that the former parties to a marriage are entitled to a sense of finality, in respect of issues arising from their previous relationship and that delay, or its abnegation, of itself, has the potential to lead to injustice, particularly if it can be demonstrated a person has managed his or her affairs on the basis that there will be no possible suit in respect of the alteration of matrimonial property interests.
In this case, Mr Vince has deposed that he did not actively pursue his claim for WorkCover, in the immediate aftermath of the parties’ separation because he was more focussed on issues to do with the care of X and Y. In my view, this is a somewhat simplistic analysis because, at the time, there were no assets to be divided.
The same can be said of the wife. Accordingly, neither managed their affairs, after the expiration of the twelve month limitation period, on the basis that the time limit provided an immunity from suit. From each of their perspectives, it was largely irrelevant.
In order to temper any potential hardship, the legislature has also provided a discretion to the court to extend time. This discretion must be exercised judiciously and advisedly. In Whitford, the Full Court determined that the manner in which this discretion is to be exercised must depend on the facts of the particular case. It is an idiosyncratic decision.
Relevant matters for consideration include the length of the delay; the reasons for the delay; any prejudice occasioned to the respondent by reason of the delay; the strengths, on the merits, of the applicant’s case; and the degree of the hardship, which would be suffered unless leave was granted. These are all matters relevant to the exercise of the discretion, but not necessarily the only ones.[38]
[38] Ibid at 78,146
* value as at date of hearing.
This analysis indicates the importance of superannuation in the current matter. It is also axiomatically significant that Mr Vince’s holdings in this regard have been augmented by the recent sums he has contributed to his fund. At the same time, I am aware that he is not currently entitled to any employer originating compulsory payments, whilst Ms Vince is.
e)Step Two – Assessment of contributions
Section 79(4) requires that the court look at the entirety of the contributions, both financial and non-financial, to the welfare of the family, as well as to the acquisition, conservation and improvement of the assets. Contributions are not required to be tied to the acquisition, conservation and improvement of any particular asset and may be taken into account generally, as contributions in a total sense.
The task required of me, pursuant to section 79(4), of the Family Law Act, thus is to weigh and assess the disparate contributions of the parties, to arrive at an outcome, which is both appropriate and just and equitable, in all the circumstances. Contributions which are different in quality and nature, must be compared. The exercise is not a purely arithmetical or accounting one.
The unusual aspect of this case is that, due to the anomaly of the husband receiving a lump sum payment, which was not anticipated by the wife, the court is called upon to assess these contributions in two different contexts. Firstly, in respect of the period during which they were an intact family – a period which lasted approximately eight years and during which their two children were born; and secondly, a far longer period, in which they led separate lives, apart from the fact that their obligations as parents continued.
This lump sum did not result in the direct acquisition or conservation of any piece of property acquired during the time their marriage was on foot. Accordingly, the intellectual difficulty is that although it is undoubtedly the case Ms Vince’s contributions as parent, homemaker and wage earner, from 1998 to the time of separation, were significant, they did not directly result in the acquisition of material assets.
At the end of the first phase, the parties were in jointly straitened financial circumstances. Essentially, their extensive and diverse contributions had resulted in nothing material to be divided between them. As a consequence of this, no formal orders were made. The parties’ difficult circumstances extended into the next period of their lives and although each continued to make contributions towards the parenting of their children, their contributions did not result in any significant proprietorial acquisitions.
All of this changed at the end of the second phase due to the unforeseen (from the wife’s perspective) eventuality of the husband’s financial position radically altering, due to him receiving a large cash payment to reflect the fact that he had not been paid wages, to which he was entitled, during the majority of this period.
Essentially, Mr Vince was subject to an involuntary and dramatic process of saving for around nine years, during which he lived from hand to mouth, as did Ms Vince. It is this anomaly with which the court must grapple both in terms of Part VIII of the Family Law Act and section 117 of the Child Support (Assessment) Act.
Clearly, if the monies in question had been received by Mr Vince as a periodic payment they would have attracted the application of the child support formula and Ms Vince would have received a regular payment of child support based on the amount of this payment; her income; and what were the care arrangements for the children.
She has, in fact, received back payments in respect of her entitlements for child support periods in this second phase, but due to limitation issues, only from 1 July 2015. The period between separation and when these child support payments began is one of around seven years. It is a significant period.
During this period, in its initial stages, X and Y lived predominantly with her. The parties’ consensually agreed position, vis-à-vis the children’s case, following the first round of proceedings in mid-2010, was an equal division of school holidays and a 10/4 regime per fortnight during school terms, favouring Ms Vince. In correspondence generated by the Agency in early 2016, this was equated to a 65/35% care arrangement.[92]
[92] See Exhibit K
At one stage, due to income disparities between the parties, the husband being attributed a child support income of around $14,000.00 and the wife having one of $30,000.00 – $46,000.000, it resulted in Ms Vince having to pay child support to Mr Vince from time to time.
Ms Vince was working as a health care worker during these periods but, as I understand matters, not always on a full time basis, due to her parenting obligations. Attributing some level of income to her and applying Mr Vince’s compensation income to this period, to this type of care arrangement, it seems incontestable that Mr Vince would have been assessed to pay Ms Vince some level of periodic child support.
I have not been provided with the actual child support assessments originally made for the years in question. However extrapolating Mr Vince’s deferred payment, as a weekly sum, to these assessments, it is axiomatic that they do not reflect his income as now attributed to these periods. In my view, this is neither just nor proper. Accordingly, in general terms, the criteria required to support a departure application have been made out.
I do not have the data to make the necessary calculation in respect of what the child support should have been for the seven or so years in question. The sum is likely to be a significant one given that when the assessment was changed to reflect his changed circumstances, in early 2016, it resulted in Mr Vince having an annual child support rate of $11,050.00 or $212.50 per week.
Accordingly, applying a conservative approach, the child support income foregone by Ms Vince, over the period of seven years, bearing in mind uncertainties of income and related matters, is likely to be well in excess of $50,000.00.
However, again, I must emphasise that the mechanisms to be utilised pursuant to Part VIII and section 117 are not interchangeable. One is formulaic in nature; the other is not. However, there is clearly an overlap in practical terms and I must be careful not to double dip.
It seems to me to be more expedient to approach the case on the basis of an assessment of the factors delineated in the Family Law Act rather than attempting to have two processes at work, which overlap. The parties themselves appear to be open to such an approach, which I consider is open to me given the nature of the criteria delineated in section 75(2)(na) & (o) of the Act.
No fault can be attributed to Mr Vince for not providing child support to Ms Vince in the initial post separation period. For self-apparent reasons, he was not able to make any such payments. I accept that he did provide what financial support he could and that he did feed and clothe the children when they were in his care. He also made regular contributions towards the funding of their sporting activities.
However, during this period, Ms Vince was also subject to a significant level of financial austerity, whilst having to continue in the paid workforce and discharge a larger portion of the responsibility of parenting X and Y. This must be regarded as a significant contribution.
Although the initial phase of the parties’ marriage did not result in the accumulation of significant material assets, I consider that I am still required to make some assessment of their various contributions during this period. This is to ensure that whatever alteration of property is made, it is a just and equitable one, which reflects all the parties’ various contributions during the period up to the date of hearing.
Between 1999 and 2004, the husband made significant financial contributions as the family’s more significant breadwinner. Ms Vince was also in paid work from time to time but less so after the birth of X in 2001. In this period their contributions, though different in nature, must be regarded as largely equivalent.
I accept that Mr Vince became increasingly unwell in the later stages of 2002 and throughout 2003. Obviously, this was not due to any fault attributable to him but it must have had a large impact on Ms Vince’s on-going role as a homemaker and income provider. I accept her evidence that she attempted, as best she could, to support the husband through these difficult times.
Mr Vince’s employment at H Company was terminated in mid-2005. His arrears of compensation were calculated to begin in 2004. The parties separated in February of 2007. In my assessment, during this first phase, Ms Vince’s various contributions must be regarded as great indeed.
Clearly, she must be taken to have contributed to that portion of wages which would have been received by Mr Vince between 2004 and early February of 2007, as this would have sustained the family during this extremely difficult period, during most of which Mr Vince was very unwell, leaving Ms Vince with the greater burden of keeping the family afloat in every sense of the word.
The period between the date of separation and now is a more controversial one due to the fact that the parties largely lived autonomous lives. In this context, it is the husband’s position that it was his efforts alone which resulted in the successful conclusion of his action against H Company, to which the wife made little, if any, contribution.
In addition, it is his position that the hardship occasioned by his illness was largely borne by him alone and the only source of outside help, for him, was the care from his parents, who provided him with a financial lifeline when he needed it. As such, the wife has not demonstrated any contribution towards the award of damages made in his favour in 2011.
I do not agree. The wife lived with the husband in the years following the incident which gave rise to his claim for having suffered a serious injury at work, during which the psychological sequellae of this injury became manifest. This rendered the discharge of her homemaking and parenting responsibilities more onerous, particularly given the financial ramifications of the husband’s incapacity to work.
True it is that during this period life was also extremely difficult for Mr Vince and remained so until he received his arrears payment in 2016. The same can be said of this period for Ms Vince. She continued to make a very significant contribution towards the welfare of X and Y without much financial assistance.
Accordingly, I accept that the mental anguish and suffering occasioned to Mr Vince as a consequence of the incident at his workplace has reverberated long and painfully for him and is therefore largely idiosyncratic to him alone.
However, Ms Vince has also lived through and suffered the consequences of Mr Vince’s injury, although to a lesser degree. In addition, she has had the greater buttress in being able to take part in the paid workforce and support herself and the children to a more satisfactory degree than the husband, in the period post separation.
It is an accident of happenstance that Mr Vince’s wages over a long period of time were unfairly withheld from him resulting in him receiving something of a lump sum windfall. I am satisfied that considerations of justice and equity require that Ms Vince be taken to have made significant contributions towards the acquisition of this windfall, which was accrued both before and after the parties separated.
I reiterate that, in my view, there is no principle that requires a contribution made to the welfare of the family to be satisfied only out of property available at the time the contribution was made. Clearly, in this case, Ms Vince has made myriad and significant homemaking contributions, both before and after the husband acquired his lump sum.
However, at the same time, I cannot overlook the fact that, if Mr Vince had been in receipt of a regular income stream following separation, this would have been subject to an assessment of child support with the remainder going on Mr Vince’s personal support. Given that Ms Vince was working at the time and had qualifications to do so, it is improbable that she would have considered bringing a spousal maintenance application.
The reality is that Ms Vince has only been able to bring her application for property settlement because the failure of H Company to recognise Mr Vince’s claim, over many years, has resulted in the now fortuitous accumulation of what would otherwise have been a stream of incidental payments to which property proceedings would not have attached. In my view, this is a significant factor which favours the husband in the assessment of contributions post separation.
Balancing these various factors against one another, I have reached the somewhat artificial conclusions, bearing in mind controversies about the extent of the asset pool and factors which have influenced its current extent, that the parties’ non-superannuation assets should be divided 75%/25% in the husband’s favour.
In terms of superannuation, given the fact that post separation Mr Vince has accessed his superannuation and has not been in a position to add to it through employer contributions, as he has not been formally employed, I propose making a split, in Ms Vince’s favour, out of Mr Vince’s Super Fund B, in an amount of $20,000.00, which represents 25% of the amount to superannuation which Mr Vince has added since he received his arrears payment. I have advisedly not included the disability insurance payment in this calculation.
f) Step Three – section 75(2) – the parties’ prospective needs
I am now required to consider the various matters set out in section 75(2) and in particular to consider whether any further adjustment should be made in favour of the parties. The section 75(2) factors are mainly, but not only, prospective in nature.
Paragraph (a) – Mr Vince was born in 1968. He continues to suffer from a significant level of psychiatric illness. It is doubtful, in the extreme, that he will ever be able to resume his previous profession as a professional. At best, he will be able to undertake some form of employment, which does not involve stress or engagement with others.
More probably, he will remain in receipt of his workers’ compensation payments indefinitely or until he reaches retirement age and transitions to an aged pension or some other form of social security. He will remain subject to review by V Insurance, which is unlikely to reduce his feelings of anxiety.
Ms Vince was born in 1971. She enjoys good health. As such, she is in a better position than Mr Vince and likely to remain so for the foreseeable future.
Paragraph (b) – for obvious reasons, this is one of the more significant considerations arising in this matter. As indicated above, Mr Vince currently has a reasonably secure level of recurrent income in the form of his weekly compensation payments. In general terms, his income from this source is around $91,000.00 per annum. This is subject to him satisfying regular medical examinations that he remains unfit to return to work.
On the basis of the medical evidence provided to me, which includes a report from a psychiatrist nominated by the insurer, it seems more probable than not that Mr Vince will continue to receive this income for the reasonably foreseeable future. In my view, this is sufficient to provide him with a reasonably comfortable standard of living.
Ms Vince has valuable qualifications as a health care worker and significant work experience in this field. She is also currently re-training in public service. Her income is in the vicinity of $70,616.00 per annum. Accordingly, although in good health, in contrast to the husband’s significantly compromised health, she is not as financially secure as is he. However, she is not subject to the same level of review, as is Mr Vince.
Given Ms Vince is approaching fifty years of age and can anticipate working for at least the next decade or so, an income disparity of $20,000.00 per year is a significant one, particularly when the overall asset pool is considered. However, her employer will contribute to her superannuation fund. Mr Vince will not have this benefit.
It has been said, by the Full Court, that the most valuable “asset” a party can take out of a marriage is “a substantial, reliable income-earning capacity”.[93] In my view, each of the parties is likely to have the security of an on-going source of income but neither can be regarded as financially secure. The sad fact of this case is that over the past twenty years or so, the parties have not been able to accumulate assets of significant value.
[93] See Clauson & Clauson (1995) FLC 92-595 at 81,911
When he received his arrears, Mr Vince decided to invest a significant proportion of them in a share portfolio and retain some in cash. The dividends produced augment his income but not to any great degree. Ms Vince has no such level of asset backing.
Paragraph (c) – X is now over eighteen years of age and receives a youth allowance. Y is sixteen years of age and has lived with each of his parents over the last couple of years. Issues to do with child care arrangements and the like are not significant in this case, at this stage.
Paragraph (d) – each of the parties have demonstrated a significant degree of aptitude to live frugally, when their circumstances have required it. Their children are appropriately supported. This is not a relevant consideration.
Paragraph (e) – neither party has either a legal or moral obligation to support any other person, other than the children concerned.
Paragraph (f) – as I have already observed, neither party can rest easily on the basis of any assumption that they have ample resources of superannuation available to cover future exigencies of life. The distinction between their respective positions being that Ms Vince has potentially in excess of a decade to add to her superannuation. Mr Vince is unlikely to be able to add to his.
Paragraph (g) – one inevitable consequence of the end of the majority of both marriages and de facto relationships, is a drop in the standard of living of one or sometimes both of the parties concerned. When the parties separated in 2007, as it was in the period which followed Mr Vince’s employment termination, each of them has suffered extremely straitened financial circumstances.
It cannot be said that Ms Vince had it easy, in financial terms, between 2007 and now; whilst Mr Vince did it tough. With the acceptance by H Company that Mr Vince has and continues to suffer a compensable injury, his financial circumstances have been mitigated. In my view, this is a factor which favours Ms Vince.
Paragraphs (h) (ha) (j) (k) (l) (m) (n) & (naa) – these provisions are not specifically relevant to the case.
Paragraph (na) – this paragraph speaks of child support a party to a marriage might be liable to provide. In this context, one aspect of the wife’s case is her departure application relevant to the period from separation until mid-2015.
In my view, in all the circumstances of this case, it is pragmatic to approach this issue pursuant to the provisions of the Family Law Act rather than the Child Support (Assessment) Act. As indicated above, in the period in question, Ms Vince provided the larger proportion of the financial support required for X and Y.
Clearly, given the decision made by the court in respect of section 112 of the Assessment Act, there is a possibility that Mr Vince may be retrospectively assessed to pay child support in respect of the period between the parties’ separation and when the administrative departure assessments cut in, which deemed his compensation payments to be child support income.
If the court elects, on the basis of double dipping, to approach the issue of child support pursuant to section 75(2)(na), this is a factor which significantly favours Ms Vince. I propose to deal with the issue in this way rather than attempt some quasi formulaic approach.
Paragraph (o) – in Ferguson & Ferguson [94] the Full Court of the Family Court held that section 75(2)(o) was to be read ejusdem generis, with the other matters listed in section 75(2), which enabled the court to bring into account “conduct which has an economic significance in the parties’ dealing with each other or the property in dispute.”
[94] See Ferguson & Ferguson (1978) FLC 90-500 at 77,607
In my view, there are several issues, which have an economic significance, germane to the parties in the case. They can be summarised as follows:
·The monies and gifts, amounting to $128,092.00, paid to his parents by the husband between 2011 and December 2015;
·The legal fees paid by the husband, in an amount of $27,617.61;
·The husband’s stewardship of his various lump sum payments in the context of the current extent of his assets;
·Issues relating to the change in valuation of the husband’s share portfolio;
·Each party’s anticipated legal fees.
In raw terms, the husband received a net sum of around $710,000.00,[95] which is related to his workplace injury and the reimbursement of income to which he was entitled between 2004 and 2015, during which period the wife made significant contributions towards the welfare of X and Y. In addition, for a significant proportion of this period, she did not receive child support.
[95] I have deducted the insurance payment from this calculation.
The current value of assets (and superannuation) currently referrable to the sum received is significantly less. I calculate it at around $370,000.00 or in the vicinity of half. The same considerations apply to the money the husband put into his NAB account. Initially, he deposited $410,000.00. The value of shares and bank deposits, at date of trial, is $292,400.00 – a reduction of around 30%.
Clearly there has been a significant diminution of the pool of assets currently available to be divided between the parties, which can in no way be attributable to any action referrable to the wife. The effect of this diminution is to compromise the potential value, in dollar terms, of the significant non-financial contributions she has made, when a percentage, based on contributions, is applied to it. In my view, this is unfair to the wife and needs to be rectified.
It seems to me to be just and equitable for the court to give some consideration how potential injustice, to the wife, in respect of what I have termed the husband’s poor stewardship of his lump sum payments, is to be avoided. Clearly, these factors are distinct from the obvious mechanisms leading to the reduction of these sums and are abstruse in nature.
The precise reason the asset pool has been so diminished is unclear. In part, it may be due to the date at which the value of shares was crystallised, which was at the height of the pandemic crisis. Clearly, this diminution is not attributable to the husband but it would be unfair to the wife if she was to receive a sum based on outdated and deflated values.
The solution to this dilemma, clearly lies in allocating to the wife a fixed percentage of the share portfolio as at the date of the making of final orders. This would allow her to make her own decision as to how and when she wishes to realise any shares assigned to her.
I can appreciate why Mr Vince felt compelled to repay his parents and to express his gratitude towards them. On my calculations, $128,000.00 represents around 15% of the various lump sums received by him between 2011 and 2018, which relate to the settlement of his case by V Insurance.
However, the fact remains that these actions have been prejudicial to the wife given the fact that the usual practice of the court is to assess contributions in percentage terms. I have accepted the husband’s evidence that his parents provided him with a financial life-line when he most needed it. However, Ms Vince also provided support as a parent, which Mr Vince did not consider warranted any similar sort of recognition.
The same sorts of considerations apply to the monies allocated to the payment of legal fees by the husband. The wife has not been able to defray her fees in the same manner. This is unfair to Ms Vince.
It is all very well to talk in percentage terms, so far as property orders are concerned, but at the end of the day what matters to the parties is what the orders mean in dollars and cents and what effect they will have on their respective long term aspirations and living standards.
For obvious reasons, it would have been of assistance to Ms Vince, if her contributions could have been recognised concurrently with those of Mr and Mrs Vince Senior, and she could have received a similar level of payment in respect of her legal costs.
One of the more significant aspects of the case is that, at its conclusion, each party faces crippling legal costs. I have calculated the current level of non-superannuation assets as being a little less than $300,000.00 in value. This is approximately the amount of costs accrued by the parties.
Accordingly, the outcome of this case has the distinct possibility of being fruitless or even pyrrhic in its outcome. Certainly, there is a very real danger that the resources dedicated to the resolution of the issues raised by the case are not proportionate to what is at stake in dollar terms.
This is a case which raised many issues, not the least of which was the question of whether the wife’s claim was statute barred. In addition, for idiosyncratic reasons, Mr Vince is not a person inclined to seek a compromise. These factors have the potential to lead to protracted and expensive litigation, which is corrosive to the economic welfare of those with the misfortune to become involved in it.
Without doubt, this case has been a financial calamity for each of the parties, which they can ill afford. Apart from providing my commiserations, there is little I can do, to ameliorate the deleterious consequences of this decision for each of the parties.
Conclusions
The husband leaves the proceedings in a more secure financial position than the wife in the short to medium term, as a consequence of the acceptance by the relevant authorities and V Insurance that he is permanently and totally incapacitated for work, and this relates to a compensable injury sustained at his employment with H Company. As such, he will continue to receive payments of compensation for the reasonably indefinite future. He will be able to pay his rent and other living expenses. His medical expenses will be reimbursed. He will be reasonably secure financially.
On the basis of the medical evidence available, it seems unlikely that he will be able to return to work other than in extremely well regulated and subjectively suitable circumstances, which are unlikely to be available to him. Whether V Insurance will challenge this state of affairs is unknown to me but given the contemporary opinion of their own medical advisor, this appears unlikely. Accordingly, this period of financial security is likely to continue.
The wife too has a reliable source of income and qualifications and experience behind her as a health care worker. She is likely to be able to provide for her financial support through her own endeavours for the foreseeable future. Although the wife’s wage is less than the husband, these central section 75(2) factors are reasonably well balanced.
The major difference in the parties’ financial positions, at present, is that the husband has far greater financial security because of his ability to access capital. He has chosen, as is his prerogative, not to purchase long term accommodation for himself. The wife would like to have such an option at some stage.
In my view, given my assessment of her contributions, it is just that she receives some portion of the capital accrued by the husband as a consequence of the unconsented accumulation of around eleven years of his wages. Although, the costs incurred by her to achieve this objective are likely to erode the financial import of such a decision.
Given the diminution of the husband’s capital, which occasioned no benefit to the wife and which has the potential to discount her significant marital contributions as a parent and homemaker, it is just and equitable in my view that she receive a further 7.5% of the non-superannuation assets, bringing her entitlements up to 32.5%.
One of the significant financial distinctions arising between the parties is their respective position in respect of future accumulation of superannuation. The husband is not in a position to gather any further compulsory contributions to his superannuation. He is now 52 years of age and is likely to have recourse to a further ten years prior to having to access his superannuation, during which period it is to be hoped it will grow in value as a consequence of prudent investment choices made by the industry fund of which he is a member and the benefit of compounding.
The wife has longer in the workforce before her and so the capacity to grow her fund both through natural growth but also from employer contributions. As such, although the husband currently has accrued more superannuation, in my view, as time unfolds, the wife is likely to be better placed for retirement than the husband.
In these circumstances, in my assessment, bearing in mind that $90,000.00 of the husband’s current superannuation entitlements is attributable to his disability insurance claim, I propose to make an additional split, in the wife’s favour, to the split of $20,000.00 already assessed, of $40,000.00.
Form of Orders – Considerations of Justice and Equity
The final step in determining property proceedings is to stand back and consider whether the proposed result represents a just and equitable outcome. Considerations of justice and equity must inform each step of the court’s process and the overall result.
32.5% of what I have found to be a significantly diminished asset pool is represented by the sum of $95,050.10. This sum is referrable to both cash and shares. 32.5% of the cash is represented by the sum of $52,205.00. I will round this down to $52,000.00, which as previously indicated, is roughly comparable to what Ms Vince would have received in child support for the years prior to the relevant administrative assessment commencing.
It will leave Mr Vince with a significant sum in cash, which is likely to be earmarked to repay his parents or to go to legal fees. The same can be said of Ms Vince’s portion, which still leaves her with a significant liability to her solicitor.
Thereafter, I propose that Mr Vince do all things necessary to transfer shares to the value of 32.5% of his current portfolio, to the wife, as at a date 14 days from the date of these orders. It would be unfair to Ms Vince if the court were to adopt the valuations as at trial. I assume Mr Vince has not liquidated or re-allocated his portfolio significantly since the date of trial. However, I will grant liberty to apply in the event that this order presents any unforeseen difficulty.
On the current figures, this will leave Mr Vince with assets worth $88,985.82 and Ms Vince with assets worth $42,845.03. Whether this will assist Ms Vince, at some stage in the future, to place a deposit on a home is unclear to me. Given her liability for legal fees it appears questionable.
At the end of the process, the husband will have superannuation valued at approximately $350,000.00, of which $90,000.00 is referrable to his disability payout. The wife will have approximately $220,000.00 but more time to accrue further amounts to this sum as a consequence of her greater future involvement in the paid workforce.
Given the extent of fees, this is a far from perfect outcome for each of the parties concerned. As much as anything, it is reflective of the long antipathy between them, which has not permitted them to embark upon any mutually agreed upon path to resolve the complex legal issues this case has thrown up and which I have endeavoured to resolve as best I can.
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding five hundred and twenty (520) are a true copy of the reasons for judgment of Judge Brown.
Associate:
Date: 22 February 2021
[29] Ibid at 87,949 [68] – [69]
[39] Ibid at 78,144–5
0
9
4