WATERS & WATERS
[2010] FMCAfam 198
•7 May 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WATERS & WATERS | [2010] FMCAfam 198 |
| FAMILY LAW – Property – long marriage – contribution of parties found to be equal – loading given to the wife on the basis of section 75(2) factors being her long-standing health issues and the husband’s greater earning capacity. |
| Family Law Act 1975, ss.75, 77, 79 |
| C & C [1998] FamCA 143 M & M [1998] FamCA 42 Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 Re NHC & RCH (2004) FLC 93-204 AJO & GRO (2005) FLC 93-218 M and M [2006] FamCA 913 |
| Applicant: | MS WATERS |
| Respondent: | MR WATERS |
| File Number: | MLC 8637 of 2009 |
| Judgment of: | Bender FM |
| Hearing dates: | 2 & 3 March 2010 |
| Date of Last Submission: | 3 March 2010 |
| Delivered at: | Melbourne |
| Delivered on: | 7 May 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr Puckey |
| Solicitors for the Applicant: | J A Middlemis |
| Counsel for the Respondent: | Mr Williams |
| Solicitors for the Respondent: | Cahills |
ORDERS
The real property situate and known as Property U Queensland (being Lot [omitted]) be forthwith sold altogether out of Court (“the sale”) and the proceeds of the sale be applied:-
(a)firstly to pay all costs, commission and expenses of the said sale;
(b)secondly to discharge the mortgage and any other encumbrance affecting the real property;
(c)thirdly in payment of (or retained in trust until payment) the amount of capital gains tax due and payable by the parties following the sales by the parties of:-
(i)the real property situate and known as Property U Queensland, and
(ii)the party’s joint share port folio, and
the capital gains tax liability shall be calculated in accordance with paragraph 2 hereof, and
(d)fourthly the balance then remaining (hereafter called “the net proceeds of sale”) be divided:-
(i)to the wife 65% of (“X” plus $70,000.00), where:-
(aa)“X” is the net proceeds of sale of the real property at Property U Queensland having carried out the calculations set out above, and
(e)the balance of the net sale proceeds to the husband.
In order to calculate the capital gains tax liability set out in paragraph 1(c) hereof each party shall forthwith (and time shall be of the essence) do all things and sign all documents required to:-
(a)jointly appoint an accountant to be agreed between their solicitors, and
(b)instruct the accountant to calculate the capital gains accrued upon the sale of the party’s shares and investment property, and
(c)apportion the capital gains calculated at sub paragraph (b) equally between them in their personal income taxation returns, and
(d)pay the capital gains tax assessed by the Australian Taxation Office upon their share of the capital gains when it falls due.
Liberty be reserved to either party to apply with respect to the terms and conditions of and execution of sale.
For the purpose of these orders, pursuant to section 90MT(1)(a) of the Family Law Act 1975:
(a)the operative time is 4 business days after service of these Orders upon the trustee of the [R] Staff Superannuation Fund; and
(b)the member spouse is the husband, Mr Waters born [in] 1964; and
(c)the non-member spouse is the wife, Ms Waters born [in] 1960.
The base amount allocated to the non-member spouse is $42,104.00 of the interest held by the member spouse in the [R] Staff Superannuation Fund.
Whenever the trustee makes a splittable payment from the interest held in the [R] Staff Superannuation Fund by the member spouse,
Mr Waters, the trustee shall pay to the non-member spouse Ms Waters, her entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using a base amount of $42,104.00 and there shall be a corresponding reduction in the entitlement that the member spouse would have had but for these orders.The husband be restrained by himself his servants or agents from making any binding death benefit nomination to the trustee of the [R] Staff Superannuation Fund in favour of any child who is an eligible beneficiary within the meaning of Regulation 13 of the Family Law (Superannuation) Regulations 2001 which would have the effect of diminishing the value to the wife of the splitting order made in paragraph 6 of these orders.
Paragraphs 4 to 7 (inclusive) of these orders are binding on the trustee of the [R] Staff Superannuation Fund.
Each party and the trustee of the [R] Staff Superannuation Fund have liberty to apply in relation to the implementation of the orders affecting the superannuation interest.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders.
(b)monies standing to the credit of the parties in any joint bank account are to be divided:-
(i)65% to the wife, and
(ii)35% to the husband
(c)each party forego any claims they may have to any superannuation benefits belonging to or earned by the other.
(d)insurance policies remain the sole property of the life insured named therein.
(e)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
(f)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
(g)each party foregoes any claim they may have to any inheritances to which the other party is entitled to either presently or in the future.
That the applications of the wife filed on the 28th day of September 2009 and of the response of the husband filed on the 18th day of November 2009 be otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Waters & Waters is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BENDIGO |
MLC 8637 of 2009
| MS WATERS |
Applicant
And
| MR WATERS |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter involves an adjustment of property between the parties after a long marriage in excess of 25 years.
The wife is seeking orders that the parties’ assets be divided between them so that she receives 65 per cent of the parties’ ‘realisable’ assets and there be a superannuation splitting order in her favour so that the parties’ superannuation entitlements are equalised.
The wife is also seeking that the amount of $40,000.00 received by her post separation from the redundancy monies received by the husband be characterised as spousal maintenance and not a partial distribution of property.
The wife argues that this adjustment reflects the disparity in the parties’ earning capacities and her need for ongoing support arising from her long standing health issues.
The husband is seeking orders that the parties’ assets, including superannuation, be divided equally between them.
The husband is also seeking orders that the sum of $40,000.00 already paid to the wife be characterised as partial property settlement.
The husband argues that the parties are both currently suffering from health issues which prevent them from working and in those circumstances there should be an equal division of the matrimonial assets. The husband argues that in the 12 months post separation the wife received in excess of $80,000.00 of matrimonial assets by way of ‘support’ and that accordingly the $40,000.00 payment received by her cannot be deemed as necessary to her support. He argues that the payment should be characterised as partial property settlement.
Background
The wife was born [in] 1960 and is 49 years of age. She suffers from major inflammatory arthritis involving her spine which causes her significant pain and restriction. She also suffers from depression and anxiety. Her treating medical practitioners believe the wife has little capacity to engage in employment at this time but are optimistic she will gradually improve and be able to resume at least part-time work as a [occupation omitted] within the next 12 months.
The wife produced a report from her treating medical practitioner Dr S dated 22 February 2010 as to her current medical condition.
The wife is a qualified [occupation omitted].She has not [worked] full-time since 2008. At the time of the parties’ separation the wife was on a graduated return to work regime because of her health issues. She is currently engaged in [work omitted].
The wife lives in rental accommodation in [C] with the parties’ youngest daughter [Y]. She has not re-partnered.
The husband was born [in] 1964 and is 46 years of age. He is currently unemployed. When the parties separated the husband was employed in [omitted] and living in the Northern Territory. He was earning $150,000.00 per annum. He involuntarily ‘resigned’ from that position in September 2009. The husband has re-partnered and lives in Melbourne with his girlfriend.
The husband produced a report from his treating clinical psychologist Dr R dated 23 January 2010 which indicated the husband has been attending him since October 2009 for treatment for reactive depression and stress management. It states the husband:
“continues to need psychological intervention and is likely to do so for some months. He is currently unable to work.”
The parties commenced co-habitation in 1983, married [in] 1986 and separated in February 2009.
The parties have three children. [X] is aged 23 years, works in the [omitted] industry and resides in [J]. [Y], who is nearly 20 years of age, is a tertiary student, is in part-time employment and lives with the wife. [Z] is 18 years of age, lives with his sister [X], is currently completing a school-based apprenticeship and is in Year 12.
At the commencement of co-habitation neither party had assets of significance. The husband was [occupation omitted] and the wife was a [occupation omitted].
After leaving [occupation omitted] the husband was employed in the [omitted] industry. The wife qualified as a [omitted] in 1992.
When the parties separated the husband was employed as a [omitted] for [R] and was earning in excess of $150,000.00 per annum. The parties were living in [J] in the Northern Territory.
The parties’ assets at the date of separation consisted of jointly owned real estate in Property U, Queensland (“the Queensland property”), a joint share portfolio, motor vehicles, chattels and the parties’ respective superannuation entitlements. The parties had borrowings which had been taken out by them for the purchase of the Queensland property and share portfolio.
Subsequent to separation and by agreement, the parties’ share portfolio was sold and the parties received $224,002.00. This amount was utilised to discharge the parties’ margin loan of $125,474.00, pay out two equity loans and to reduce the mortgage on the Queensland property.
The parties will incur liability for Capital Gains Tax as a result of the sale of the shares and have reached agreement as to how such tax is to be paid. At the final hearing of the matter the parties provided a minute of consent orders which sets out the process for the Capital Gains Tax to be determined and how such tax is to be paid.
Subsequent to separation the husband caused the parties’ tax returns to be completed. An amount of approximately $40,000.00 was refunded and after payment of accountant’s fees, each party received $17,000.00.
Upon separation the wife moved to Adelaide for three months and then settled in [C], Victoria where she now resides. She initially drew down against the parties’ various online banking facilities. In addition between April and September 2009, the husband paid the wife an amount of $760.00 per fortnight for her support.
Upon the husband’s ‘involuntary’ resignation from [R], he received a net redundancy payment of $123,000.00. By agreement the wife was paid the sum of $40,000.00 from this payment. It was ordered that how this sum was to be characterised would be determined at the final hearing of the matter.
At trial the husband tendered a spreadsheet he had prepared setting out in great detail the total monies received by the wife between February 2009 and January 2010. These monies were derived from draw downs from the parties’ accounts, the support paid to the wife by the husband and the $40,000.00 payment from the husband’s redundancy. The total, not challenged by the wife, was $69,850.79. In addition the wife received $17,000.00 as her share of the parties’ tax returns.
The husband had not prepared a similar document as to his own expenditure during this period. He conceded he had the benefit of his salary from March to September 2009, his share of his redundancy payment and the $17,000.00 tax return. The husband has expended $13,000.00 of his redundancy payment and the $17,000.00 tax return.
The husband’s evidence is that he does not have any formal qualifications. He indicated he did not wish to return to work in the [omitted] industry in remote locations. He has applied for a number of [omitted] positions in and around Melbourne but has not been offered an interview.
The parties’ property in Queensland is rented for $190.00 per week and the rental is utilised in the payment of the mortgage on that property, together with rates and management fees. The parties have had the Queensland property on the market for sale since February 2009 and no offers have been made for its purchase.
The parties’ evidence as to their financial history was consistent and the detailed background set out in this judgment does, I believe, accurately reflect that history over their long relationship.
The Issues
Having heard the parties’ evidence, considered their proposals and heard submissions I identified the issues between the parties as follows:
a)What constitutes the property pool, and in particular:
i)Should the $40,000.00 received by the wife from the redundancy payment of the husband be categorised as partial property settlement or as spousal maintenance?
ii)Should the $17,000.00 each party received from the tax refund be included in the pool?
iii)Should the $13,000.00 of monies expended by the husband from the redundancy monies be included in the pool?
b)Has the husband made a greater contribution than the wife post separation because of his payment of the alleged shortfall between the rental received on the Queensland property and the associated mortgage, rates and management fees and because of his support of [Z]?
c)Should there be a weighting in the wife’s favour in relation to the section 75(2) factors, and in particular a comparison of the parties’ income earning capacities and the impact on the parties of their respective health issues?
The legislation
Section 79 of the Family Law Act1975 (“the Act”) defines the Court’s powers in determining applications for property settlement. Sub-section 79(2) of the Act provides that:
The Court shall not make an Order under this Section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.
Section 79(4) of the Act sets out the matters the Court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters are:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The four-step approach
In Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 at [39], the Full Court of the Family Court described the preferred four-step approach in property matters as follows:
The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), ("the other factors") including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case ….
Assets and liabilities
Having sold their share portfolio and discharged the loans taken out to fund the purchase of the shares, the parties’ remaining assets consist of the Queensland property which has a nominal value of $255,000.00 and is encumbered by way of a $75,000.00 mortgage, the balance of the husband’s redundancy package of some $70,000.00 and the parties’ respective superannuation entitlements.
The parties have had the Queensland property on the market for sale since February 2009 at an asking price of $285,000.00. The parties have received no offers for the purchase of this property and it may well be that in order to effect a sale, they will have to reconsider the sale price. For the purposes of this litigation both parties have sensibly used a figure of $255,000.00 as the estimated value of the Queensland property.
As noted earlier in this judgment, when the husband took his enforced retirement from his position with [R] he received a redundancy payment of some $123,000.00. From this amount the wife was paid $40,000.00 and consent orders were made at the time of that payment which reflected that the categorisation of that payment would be determined at the final hearing of the matter.
It was submitted on behalf of the husband that the $40,000.00 payment received by the wife cannot be considered spousal maintenance. It was argued that in the 12 months since separation the wife has received $86,000.00, made up of $29,000.00 by way of credit card payments, draw downs on the parties’ loan accounts and support from the husband, the $17,000.00 tax return and the $40,000.000 from the redundancy payment. Of this amount only some $8,000.00 now remains in her savings.
It was submitted that in the wife’s financial statement filed on
28 September 2009, she deposed that her weekly living expenses were some $650.00 per week, an annual expenditure of $34,000.00. The husband submitted that even allowing for relocation costs, the expenditure by her in the 12 month period following separation was excessive, showed that she had not used the funds sensibly and had allowed her spending to spiral out of control.
It was therefore argued on behalf of the husband that the $40,000.00 payment received by the wife should be seen as a partial property distribution and that the amount be included in the property pool.
It was submitted on behalf of the wife that the spreadsheet prepared by the husband showed that between February 2008 and the end of January 2010, the wife received $69,850.79 which included the $40,000.00 paid to her from the husband’s redundancy package. In February/March 2009, it was submitted the wife received $10,708.00 which included some $3,300.00 in relocation fees. It was submitted that if you subtract that amount of $10,708.00, together with the $40,000.00 from the $69,850.79 that left an amount of $19,142.79.
It was submitted that between March and September 2009 the wife received total payments of $18,185.00 which equated to $699.00 per week for her to live on. It was submitted that this amount was an accurate reflection of the amounts utilised by her in that period if you subtracted the sums of $10,708.00 and the $40,000.00.
It was then submitted by the wife that between 1 October 2009 and
3 March 2010, there were no payments made to her. Using the calculation of $699.00 a week, for the period of 22 weeks between October 2009 and March 2010 a reasonable cost of living for the wife was $15,000.00.
It was therefore submitted that from the $40,000.00, an amount of $15,000.00 was attributable to spousal maintenance.
It was then submitted that the wife needed to ‘explain’ or ‘justify’ the receipt and use by her of the remaining $25,000.00. It was argued this amount of $25,000.00 equates to approximately seven to eight months of spousal maintenance into the future and that given the wife’s current health position, attributing that amount for 35 weeks of spousal maintenance into the future would be an appropriate manner in which to categorise those funds. Therefore it was submitted that in all the circumstances orders should reflect that pursuant to section 77A of the Act, the amount of $40,000.00 received by the wife is attributable to her support.
At the commencement of the hearing, Counsel for both parties provided to the court a document that purported to represent what their client asserted the property pool should be.
On the husband’s behalf it was submitted that the property pool consisted of the following:
Queensland Property $255,000.00 The husband’s ING account $60,000.00 The husband’s Westpac account $2,660.00 The husband’s Westpac account $7,500.00 Payment to wife $40,000.00 Total $365,160.00 Less liabilities:
Mortgage to the Queensland Property <$75,000.00>
NET POOL $290,160.00
The document prepared on the wife’s behalf deposed to the asset pool being as follows:
Queensland Property
Less mortgage
Net$255,000.00
<$75,000.00>
$180,000.00
Tax refund/payment retained by husband $17,000.00 Redundancy lump sum less payment to wife of $83,000.00 $83,000.00 Tax refund/payment retained by wife $17,000.00 Total $297,000.00 In the handwritten document, the wife’s Counsel initially included the $40,000.00 payment to the wife with a notation it needed to be categorised. In closing submissions this amount was excluded from the wife’s proposed asset pool.
The authorities are quite clear that monies that are existing at separation which are used by the parties to fund their reasonable living expenses will not be notionally added back into the property pool (see M & M [1998] FamCA 42, C & C [1998] FamCA 143, Re NHC & RCH(2004) FLC 93-204 and M and M [2006] FamCA 913).
In AJO & GRO (2005) FLC 93-218, the Full Court of Holden, Warnick and La Poer Trench JJ held in paragraph 30 the following:
“To date, three clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a)Where the parties have expended money on legal fees;
(b)Where there has been a premature distribution of matrimonial assets; and
(c)In the circumstances outlined by Baker J in Kowaliw & Kowaliw (1981) FLC 91-092 at 76,644:
(a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
In this matter, both parties have utilised matrimonial assets in order to support themselves, the wife since separation and the husband since his enforced resignation in September 2009.
On his own evidence, the husband has expended approximately $30,000.00 since September 2009, being the tax return retained by him as well as $13,000.00 of his redundancy payment monies. Since the parties’ separation in February 2009, the wife has expended approximately $80,000.00. The husband argues that the amount expended by the wife is greatly in excess of that which should reasonably have been expended by her to meet her living expenses and that in those circumstances the $40,000.00 received by her from his redundancy payment cannot be seen to be either of spousal maintenance or monies spent on meeting reasonably incurred necessary living expenses.
There is no doubt that the wife could have lived more frugally than she has since separation but I am not satisfied that she has acted “recklessly, negligently or wantonly” in her expenditure over this period such that the $40,000.00 received by her should be deemed to be matrimonial property to be added back into the property pool.
I am however satisfied that such amount should be categorised as spousal maintenance and an order made pursuant to section 77A of the Act reflecting that finding.
In relation to the tax refund and redundancy monies that have been expended by the husband totalling $30,000.00, I am satisfied that these monies have been utilised by him to fund his reasonable living expenses since September 2009 and that that amount should not be included in the property pool.
In all these circumstances I therefore find the matrimonial assets to be divided between the parties to be as follows:
Queensland Property
Less mortgage
Net$255,000.00
<$75,000.00>
$180,000.00
Monies remaining from redundancy $70,000.00 Total $250,000.00 Superannuation:
Husband’s superannuation entitlements $155,000.00 * Wife’s superannuation entitlements $20,000.00 * Total $175,000.00 * These figures to be confirmed
Contributions
Neither party had any assets of significance at the commencement of cohabitation.
It was agreed that the parties’ contributions during the marriage had been equal and their evidence supported such a conclusion.
It was submitted on behalf of the husband that post-separation he has paid some $7,000.00 to meet the shortfall between the loan repayments and the rental that is received with respect to the Queensland property.
It was further argued on the husband’s behalf that he is supporting the parties’ youngest son [Z] who is doing a school-based apprenticeship and living with his sister in [J] in the Northern Territory.
It was therefore argued that the husband is making a greater contribution than the wife post-separation.
Under cross-examination however it became apparent that the $7,000.00 shortfall with respect to the Queensland property had been met from draw downs from the parties’ various loans and not directly from the husband, albeit he ensured that those payments were made.
The evidence also showed that since the sale of the parties’ shares and subsequent reduction in the mortgage over the Queensland property, the rental payments meet the mortgage, rates and management fees in relation to the Queensland property. It was the husband’s evidence that the rental income from the property is $190.00 per week and the combined costs of the mortgage, rates and management fees is $187.50 per week. Accordingly, the husband should not be incurring ongoing commitments for this property pending its’ sale.
It was the husband’s evidence that he had expended somewhere between $3,000.00 to $3,500.00 for [Z] in the payment of school fees and computer expenses. He conceded in cross-examination that he had been reimbursed the sum of $3,412.00 by the Government for these expenses.
The husband also conceded that [Z] receives approximately $100.00 per week as part of his apprentice-based course and may qualify for Austudy when he turns 18.
It is accepted that the husband continues to pay health insurance for [Z] and [Y].
[Y] lives with the wife and I accept that the wife is contributing to [Y]’s care.
I therefore find that neither party is making a greater contribution post-separation than the other and that in all these circumstances there is to be no adjustment for contributions as between the parties.
Section 75(2) factors
The wife is 49 years of age and has long-standing inflammatory arthritis which causes her significant pain and restriction. This condition pre-dates separation and has impacted on her working capacity for some considerable period of time. At the date of separation she was on a plan to return to work.
The wife is a qualified [omtted] and currently [works], when available, in the [C] area as well as [work omitted].
It was the wife’s evidence that she did not believe she would be able to return to full-time [work omitted] and was exploring the possibilities of establishing her own business as a [omitted]. It was her evidence that at best she expected to be able to generate an income of approximately $30,000.00 per annum.
The wife is currently living in rental accommodation in [C] with the parties’ second daughter [Y] who is a tertiary student and engaged in part-time employment.
On the wife’s behalf, it was submitted that there should be an adjustment on the basis of section 75(2) factors.
It was argued that the wife’s ongoing and long-term health issues impact on her earning capacity such that a realistic expectation was that at best she could earn some $30,000.00 per annum into the future.
By contrast, the wife argued that the husband’s current health matters were not such that they will impact on his ability to work in the short to medium, let alone long, term.
Further, it was argued on behalf of the wife that the husband’s earning capacity is much greater than hers. On his own evidence, the husband has the potential to earn $80,000.00 per annum in Melbourne. Based on his work history he can choose to return to the [omitted] industry where he has previously been able to earn up to $150,000.00 per annum. Whilst he indicates he no longer wishes to work in that industry, it is clearly an option open to him, especially as his current partner also works in that industry.
On this basis, it was submitted on the wife’s behalf that it was a spurious argument for the husband to claim that he and the wife had a similar earning capacity and that there should be no adjustment.
It was argued on behalf of the wife that in all the circumstances the wife should receive 65 per cent of the parties’ realisable assets and that there be an adjustment in relation to superannuation entitlements such that the parties’ superannuation entitlements were equalised.
It was submitted on behalf of the wife that such a result would mean that overall there would be a division of the parties’ total assets, including superannuation, such that the wife would retain 60 per cent of same and the husband would retain 40 per cent of same.
The husband is 46 years of age and is currently unemployed. He produced a brief report from his treating clinical psychologist dated
23 January 2010 which details that he is currently suffering from reactive depression and will continue to need psychological intervention for some months and is, as at January 2010, unable to work.
Prior to separation and until February 2009 the husband, who has been employed in the [omitted] industry for well in excess of 20 years, was working as a supervisor for [R] in [J] and earning approximately $150,000.00 per annum.
It was the husband’s evidence that he no longer wishes to work in the [omitted] industry and in particular in isolated towns.
Further, it was the husband’s evidence that he has no formal [omitted] qualifications and all efforts by him to date to try and obtain employment in a [omitted] role have been met with no success.
It was his evidence that the positions that he had been applying for attracted a salary of between $70,000.00 and $80,000.00 per annum.
The husband confirmed in his evidence that he is living with his girlfriend with whom he has been in a relationship since May 2009. His girlfriend is a [occupation omitted] who he met through work when she was engaged as a contractor by [R] in [J]. It was the husband’s evidence that his girlfriend had applied for and obtained a position with [R], but turned it down when he was forced to resign from his position. The husband’s girlfriend is currently employed with [omitted] and it would appear owns her own home and motor vehicle.
The husband denied that he was living in a de facto relationship with his girlfriend, but conceded that he lives in her home, they have travelled together and have discussed their respective financial arrangements in the context of him making a contribution to the living expenses associated with him living in her home.
The husband’s evidence in relation to his relationship was less than convincing and it is apparent that he and his current girlfriend are in a committed relationship.
It was submitted on behalf of the husband that there should be no adjustment in relation to section 75(2) factors. It was argued that both parties are unemployed and have medical certificates saying that they are currently unable to work. It was argued that the husband has no formal qualifications and his best efforts to date to find employment have been unsuccessful.
It was argued on behalf of the husband that it was not appropriate to assess the husband’s potential earning capacity based on him working in the [omitted] industry as he had properly made a decision that this was not a lifestyle he wished to pursue into the future.
It was submitted on the husband’s behalf that his circumstances are such that he does not have a greater earning capacity than the wife.
I am satisfied that the husband does have a greater earning capacity than the wife, whether he chooses to return to the [omitted] industry or not.
I am satisfied that any health issues currently suffered by the husband are not of a long-term nature and that even absent of formal qualifications, his long history in the [omitted] industry in a [omitted] role gives him the capacity to earn an amount much greater than that of the wife.
I am also satisfied that the nature of the wife’s ongoing health issues are such that they will continue to impact on her capacity to earn in the medium to long term and that into the future she will at best earn no more than $30,000.00 per annum.
The parties’ property pool is a relatively small one of at best $250,000.00 (excluding their respective superannuation entitlements). The wife’s limited earning capacity will greatly restrict her borrowing capacity and her ability to reaccommodate herself.
By comparison, once the husband has re-established himself in full-time employment and in the circumstances of his current relationship, the husband’s ability to reaccommodate himself and re-establish himself is imminently greater than that of the wife.
In all these circumstances I am satisfied that there should be an adjustment in the wife’s favour of 15 per cent on the basis of s.75(2) factors.
Superannuation
In relation to superannuation, both parties put forward a proposal that there be a splitting order in the wife’s favour such that the parties’ superannuation entitlements were equalised.
It was also the parties’ evidence that neither party’s superannuation entitlements had been accurately determined, nor had the husband’s superannuation fund been accorded procedural fairness.
In this circumstance, it is apparent that final orders will not be able to be made in relation to superannuation until such time as these matters have been attended to.
Conclusion
As previously noted in this judgment, the parties’ property in Queensland has been on the market since February 2009 and no purchase offer has ever been made. It is currently on the market for an asking price of $285,000.00 and I note that for the purposes of these proceedings the parties have been more sensibly using a figure of $255,000.00. It is possible however that they will have to accept an even lesser amount if they wish to realise this asset for their benefit.
Until a sale of the Queensland property is achieved, the final amounts to be received by either party cannot be known.
Having determined that a just and equitable division of the realisable assets between the parties is that the wife receives 65 per cent of same and the husband receives 35 per cent of same, the orders that I propose to make are that there be a division of the parties’ realisable assets using the following formula:
·The wife shall receive 65% of (“X” + $70,000.00)
“X” being the net proceeds of sale of the Queensland property and $70,000.00 being the balance of the monies received by the parties through the husband’s redundancy and tax returns less those amounts reasonably expended by them in their living expenses since separation.
As there has been no procedural fairness afforded to the husband’s superannuation fund and as the exact value of their respective superannuation entitlements is not known, the orders necessary to finalise this matter will need to be jointly prepared by the parties’ respective solicitors and procedural fairness afforded to the superannuation fund before they can be finalised. Such orders should also incorporate the agreement between the parties regarding payment of the Capital Gains Tax associated with the sale of the parties’ share portfolio.
I certify that the preceding one-hundred and two (102) paragraphs are a true copy of the reasons for judgment of Bender FM
Date: 7 May 2010
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