Weichman and Raynor
[2007] FMCAfam 342
•29 May 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WALDEN & ROMAN | [2007] FMCAfam 342 |
| FAMILY LAW – Property – 4th step – consideration of what is just and equitable in the circumstances – wife seeks to retain all of her entitlement in realisable assets and for husband to retain his entitlement in superannuation assets – husband seeks that each party retain a ‘mix’ of realisable and superannuation assets. |
| Family Law Act 1975 |
| Aleksovski & Aleksovski (1996) FLC 92-705 Coghlan & Coghlan (2000) FLC 93-220 Doherty & Doherty [2006] FamCA 199 G & G (2000) 26 Fam LR 592 HG & HCT [2005] FamCA 734 Hickey & Hickey & Attorney General for the Commonwealth of Australia (2003) FLC 93-143 In the Marriage of Clauson (1995) FLC 92-595 In the Marriage of Ferraro (1993) FLC 92-335 In the Marriage of Gill (1984) 9 Fam LR 969 In the Marriage of Lee Steere (1985) FLC 91-626 Jones v Dunkel (1959) 101 CLR 298 Kowalski & Kowalski (1993) FLC 92-342 Lorriman & Lorriman [2004] FamCA 1010 McCullogh & McCullogh [2006] FamCA 840 Norbis v Norbis (1986) 161 CLR 513 Parshen & Parshen (1996) FLC 92-720 Pellegrino & Pellegrino (1997) FLC 92-789 Sippel & Sippel [2004] FamCA 201 |
| Applicant: | MR WALDEN |
| Respondent: | MS ROMAN |
| File number: | SYM 2079 of 2006 |
| Judgment of: | Sexton FM |
| Hearing dates: | 5 and 6 March 2007 |
| Date of last submission: | 6 March 2007 |
| Delivered at: | Sydney |
| Delivered on: | 29 May 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr P Cook |
| Solicitors for the Applicant: | Stuart Fowler & Partners |
| Counsel for the Respondent: | Ms J Haughton |
| Solicitors for the Respondent: | Kartsounis & Co. |
THE COURT ORDERS THAT:
Within 14 days the parties do all acts and things necessary to close their joint account with the ANZ Bank and the wife receive any credit balance in that account.
Within 28 days the parties divide by agreement between them the furniture and chattels in the former matrimonial home which existed at the time of separation and failing agreement by the due date, the parties divide the items by the pick a pile method within a further 14 days, in the presence of their solicitors, the wife have first choice.
Within two calendar months (“the date of settlement”) the following to occur simultaneously:
(a)The wife pay the husband by way of property settlement the sum of $92,137.00;
(b)The wife do all things and execute all documents necessary to cause the mortgage secured over Property C in the State of New South Wales (“the home”) being the whole of the land contained in the Certificate of Title Lot 7xxx in Deposited Plan 7xxx to be discharged and indemnify the husband in relation to same; and
(c)The husband do all acts and things and execute all documents necessary to cause his right, title and interest in the home to be transferred to the wife.
In the event the wife fails or is unable to comply with Order (3) herein by the date of settlement, the parties forthwith do all acts and things necessary to sell the home for the best price reasonably obtainable and by way of consequential orders:
(a)The parties do all acts and things necessary to enable the property to be listed for sale by private treaty with such real estate agents as the parties agree and failing agreement within 14 days, with a licensed real estate agent as may be determined by the President of the Real Estate Institute of New South Wales or his/ her nominee, upon the written request of either party (“the selling agent”);
(b)Within 14 days the parties do all acts and things necessary, including but not limited to signing all or any Cost Agreement, to prepare a Contract of Sale with such solicitor as the parties agree and failing agreement, with a solicitor appointed by the President of the Law Society of NSW or his/ her nominee, upon the written request of either party (“the solicitor”);
(c)
The parties agree on a sale price and failing agreement within
14 days, a price to be determined by an accredited real estate valuer appointed by the Australian Property Institute (NSW), upon the written request of either party (“the valuer”) and the parties share equally the costs of the appointment;
(d)The wife cooperate in allowing access to the property at all reasonable times to prospective purchasers and the selling agent and ensure the property is clean and tidy at the time of inspections;
(e)The wife maintain the property in reasonable condition and repair having regard to its present condition and state thereof, pending completion of the sale of the property;
(f)If the property is not sold by private treaty within three (3) months of being listed for sale then the parties do all acts and things necessary for the property to be sold by auction;
(i)Through a licensed auctioneer as agreed between the parties and failing agreement as appointed by the selling agent;
(ii)At a reserve price agreed upon by the parties and failing agreement within 14 days then at a reserve price determined by the valuer;
(iii)The auction be listed on a date no more than five (5) months from when the property was first listed for sale by private treaty; and
(iv)In the event the property does not sell at the first auction then the property be re-listed for auction within two (2) months at a reserve price as agreed between the parties and failing agreement at 5% less than the reserve price at the first auction.
Upon completion of the sale of the home, the proceeds be distributed in the following order and priority:
(a)In payment of agents commission and selling costs;
(b)In payment of legal costs associated with the sale;
(c)In adjustment of rates and other outgoings in accordance with usual conveyancing practice;
(d)In adjustment between the parties as a result of any failure by either party to meet outgoings on the home prior to sale in accordance with these Orders;
(e)In payment of the amount necessary to discharge the mortgage secured over the property;
(f)In payment of 65% to the wife;
(g)In payment of $89,163 to the wife; and
(h)In payment of the balance to the husband.
Pending the date of settlement:
(a)The husband and wife share equally the mortgage repayments as and when they fall due and the wife be responsible for all other outgoings on the home;
(b)The wife have exclusive occupation of the home.
From the date of settlement, the wife be solely liable for all outgoings in respect of the home including mortgage repayments and indemnify the husband in relation to same.
Each party be solely liable for any debts to his/her parents and indemnify and keep indemnified the other party in relation to same.
Except as otherwise provided in these orders, the parties each retain as against the other any other assets, personal or real, superannuation entitlements and financial resources in his/ her possession, custody or control or to which he/ she becomes entitled.
Except as otherwise provided in these orders, the husband and the wife remain liable for any debts, howsoever arising, in their own name at the date of these Orders and in this respect shall indemnify, keep indemnified and hold harmless the other from any liability in relation thereto.
In the event the husband or the wife refuses or neglects to comply with any of the Orders herein, the Registrar of this Court at its Sydney Registry be appointed pursuant to section 106A of the Act to execute, in the name of the husband or the wife as the case may be, all deeds and instruments necessary to give effect to the orders herein, or any of them, and do all acts and things necessary to give validity and operation to the said deeds and instruments.
The parties be at liberty to re-list the matter on providing to the other party seven (7) days notice regarding the implementation of these Orders.
All exhibits tendered in these proceedings be returned at the expiration of one calendar month unless an appeal is lodged.
Any application for costs be filed and served with supporting affidavit within 28 days.
All outstanding applications otherwise be dismissed and the matter removed from the list of cases awaiting finalisation.
IT IS NOTED that Order (5) of these Orders has been amended pursuant to rule 16.05(2)(e) of the Federal Magistrates Court Rules.
IT IS NOTED that publication of this judgment under the pseudonym Walden & Roman is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYM 2079 of 2006
| MR WALDEN |
Applicant
And
| MS ROMAN |
Respondent
REASONS FOR JUDGMENT
Introduction
This case concerns property adjustment. After a 24 year relationship, and following a period of 3 months separation in 2001, the parties finally separated in May 2004. There are three adult children of the marriage G, 22, A, 20 and H, 19. When the husband left the former matrimonial home the three adult children remained living with the wife for a few months before moving to live with the husband in rented accommodation nearby. G and A have since moved back to the wife at the former matrimonial home at Property C and are in full time employment. H is living in the USA, studying and playing basketball, supported by the husband.
One of the central issues in the case is whether or not there should be a superannuation splitting order. The husband asks for the former matrimonial home to be sold and the wife to receive part of her entitlement by way of a superannuation splitting order. The wife asks to retain the former matrimonial home and to receive the whole of her entitlement from non-superannuation assets.
The wife is 47 and the husband 50. They married and commenced cohabitation in 1980. They separated on 1 May 2004 and divorced in April 2006. The wife has lived in the former matrimonial home since separation and works full time. There is no evidence that the wife has re-partnered. The husband works full time as a Manager and part-time in the Education Industry. He commenced living with his present wife in November 2005 and re-married in July 2006. He lives with his wife in her property at P with her 12 year old son R. The husband and his present wife entered into a Binding Financial Agreement immediately prior to their marriage. They manage their finances separately with the exception of a joint “holiday account” to which they contribute equally.
Issues
The approach to the determination of an application under s.79 of the Family Law Act 1975 is well established by authority (In the Marriage of Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clauson (1995) FLC 92-595; Hickey & Hickey & Attorney General for the Commonwealth of Australia (2003) FLC 93-143) and involves consideration of these questions:
a)What were the assets, liabilities and financial resources of the parties and their values at the time of hearing?
b)What were the financial and non-financial contributions made directly or indirectly by or on behalf of each party to the acquisition, conservation or improvement of the property of the parties?
c)What was the contribution made by each party to the welfare of the family including contributions made in the capacity of homemaker or parent?
d)What is the effect, if any, of any proposed order upon the earning capacity of each party?
e)What matters referred to in sub-s.75(2) of the Act are relevant and what adjustment, if any, should be made as a result of these factors?
f)Have there been any other orders made affecting a child or either party and is child support payable or likely to be payable in the future for the children of the marriage?
g)After consideration of these matters, is it just and equitable to make the actual orders?
What were the assets, liabilities and financial resources of the parties at the time of hearing and their values?
The parties agree on the nature and value of the assets and liabilities held by each of them at hearing, with the exception of a debt to the husband’s father in the sum of $20,000. The parties jointly ask the court to disregard a number of post-separation assets and liabilities of each of them, from the pool of assets available for distribution. Neither party adduces evidence of paid legal fees so they are not included in the balance sheet. The only finding the parties ask the court to make concerns the debt owed to the husband’s father.
Debt to husband’s father. The parties agree the husband’s father advanced them $20,000 in March 2002 to meet a contingent tax liability arising from an investment scheme. A dispute arises as to whether the parties are now obliged to repay the funds. The husband’s evidence about the financial arrangements he has entered into with his father is not clear. He says although he has not repaid the $20,000, he has subsequently lent his father $7,000 for the purchase of a car because his father’s investment funds were tied up. He says his father has repaid at least some of this money. The wife says she was not present when the arrangements for the $20,000 advance were made, but does not accept the funds must be repaid. The wife recalls the husband’s father saying to her “can you give me [Mr Walden]’s bank account details, how hard is it for me to give $20,000 to [Mr Walden] for his tax debt?”
The wife’s counsel submits it does not make sense for the husband’s father to be repaying funds borrowed from the husband, if the parties owe him $20,000. Given the husband’s father gives no evidence in the proceedings, counsel submits that I should draw the inference that evidence from the husband’s father would not have assisted the husband’s case[1]. In the absence of an explanation from the husband as to why his father is not available to give evidence on the issue, I accept counsel’s submission. I am not persuaded a debt to the husband’s father in the sum of $20,000 should be included in the net asset pool available for distribution between the parties.
[1] Jones v Dunkel (1959) 101 CLR 298
Superannuation entitlements. The parties agree that their respective superannuation interests are accumulation interests and they agree on their values. Each party’s counsel submits at the outset of hearing that the court should use the 2 list approach to the list of assets, but neither submits the court should assess each party’s percentage entitlement to the superannuation assets in any different way from the non-superannuation assets. If I were to adopt the 2 list approach, a superannuation splitting order must necessarily follow. I find it curious that the wife’s counsel asks the court to adopt the 2 list approach when the wife opposes the making of a splitting order. The wife can only avoid a splitting order if the court adopts an integrated approach to the superannuation and non-superannuation assets.
Each party has accumulated his/her entitlement to superannuation both during the marriage and since separation. Consistently with her role as homemaker and parent, the wife has accumulated much less in superannuation both during the marriage and since separation. In addition, the wife’s interest has increased since separation at a much slower rate than the husband’s interest. In these circumstances, I find it appropriate to adopt an integrated approach to the superannuation and non-superannuation assets of the parties. The majority of the Full Court in Coghlan & Coghlan (2000) FLC 93-220 said there is no binding principle as to the exercise of the Court’s discretion in deciding which approach should be adopted:
Nothing we have said in this judgment would prevent a Court in the exercise of its discretion from including a superannuation interest as an item of property in the list of property which is drawn as ‘the first step’ in the determination of proceedings under s79, whether or not a splitting order is sought in those proceedings.
I therefore find the assets of the parties available for division between them to be a total of $707,613.00 as identified in the following table:
| Assets and liabilities at the date of hearing | $ |
| Former matrimonial home at Property C | 590,000.00 |
| Joint ANZ account Mr Walden & Ms Roman | 20.00 |
| Husband’s ANZ Business Account – J Pty Ltd | 32.00 |
| Husband’s ANZ Access Advantage Account | 2,000.00 |
| Husband’s ANZ E-trade account | 1,000.00 |
| Wife’s Citibank account | 100.00 |
| Wife’s 1998 Ford Vehicle | 8,000.00 |
| Joint ANZ Easy start home loan (mortgage on home) | (72,000.00) |
| Debt to wife’s mother, Mrs R | (2,000.00) |
| Wife’s Superannuation | 27,965.00 |
| Husband’s UniSuper entitlement | 1,284.00 |
| Husband’s interest in the IOOF superannuation fund | 151,212.00 |
| Total net asset pool including superannuation | 707,613.00 |
Contributions
The court must consider all the contributions, both financial and non-financial to the acquisition, conservation and improvement of the parties’ assets as well as to the welfare of the family before and after separation. The Full Court said in Aleksovski & Aleksovski (1996) FLC 92-705[2]:
It is therefore necessary…[to] weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such assessment into a percentage of the overall property of the parties
[2] at 83,437.
The court must consider the contributions in an overall sense both before and after separation.[3] See also In the Marriage of Gill (1984) 9 Fam LR 969; G & G (2000) 26 Fam LR 592; Kowalski and Kowalski (1993) FLC 92-342.
[3] Sippel & Sippel [2004] FamCA 201
Neither counsel asks the court to deal with this matter on an asset by asset basis. Given the length of the parties’ marriage and that their assets have accumulated during and after the marriage I have adopted the global approach. In Norbis v Norbis (1986) 161 CLR 513, the High Court held that either approach is legitimate but also said:
However there is much to be said for the view that in most cases the global approach is the more convenient.
Financial contributions during marriage
The parties largely agree on their financial history both during the marriage and since separation. Prior to marriage they purchased a vacant block of land in Property S using their savings and a loan of $10,000 from the husband’s father which they subsequently repaid. Otherwise, neither party had any assets or liabilities of significance at the time of their marriage.
Real estate
In 1980 the parties had a house built on Property S using funds borrowed from the Building Society where the wife was then working, at staff subsidised rates. In November 1983 the parties purchased a vacant block of land at Property N for $8,500 using savings and a loan from the wife’s parents. In 1986 the husband received a redundancy payment of $7,000 including his superannuation entitlements which the parties used to build the home at Property S.
In 1987 the parties sold their Property S property for net proceeds of $55,000 and purchased a vacant block of land at Property C for $72,500, using those proceeds of sale and a personal loan. A year or so later, the parties had a home built on the Property C land using funds borrowed from M, the husband’s then employer. In the same year, the parties sold Property N using the funds to meet some of the Property C building costs. In 1994 the husband left his employment with M and the parties re-financed the loan on Property C.
Investments
In or around 1994, the parties invested in property on advice that the investment funds were tax deductible. These tax deductions were disallowed by the Australian Taxation Office in 2001 which resulted in a tax liability of over $30,000 in the name of the husband. The husband received advice as to the precise figure owed to the Tax Office after the parties separated.
Compensation funds
In or about 1999, the wife received and contributed $10,000 to joint funds by way of a victim’s compensation payment. In 2002 the wife received and contributed $17,000 to joint funds by way of compensation for a motor vehicle accident in 1999. The authorities make it clear that these awards should be regarded as a contribution by the wife. The Full Court in Aleksovski & Aleksovski[4], said:
In our opinion, in most cases, a damages verdict arising from a personal injury claim, whenever received, is a contribution by the party who suffered the injury. It should not be considered in isolation, for the reason that each and every contribution, which each of the parties makes to the relationship, must be weighted and considered at the same time.
Contributions by husband’s father
[4] (1996) FLC 92-705 at 83,437.
For a period of 20 months during the marriage, the parties lived with the husband’s father rent-free, though contributed towards his expenses for a period of 20 months. As already noted, the husband’s father advanced the parties $20,000 in 2002 to meet a tax liability. These are contributions credited to the husband[5].
Employment
[5] Pellegrino & Pellegrino (1997) FLC 92-789; Lorriman & Lorriman [2004] FamCA 1010.
The parties were both working full time at the date of marriage, the husband qualifying as an engineer in the same year. The husband has worked full time during the marriage in the building and insurance industry, apart from a period in the second half of 2003. The husband was earning approximately $177,000 per annum at the time of the parties’ separation. The wife worked full time until the birth of the parties’ first child. She then worked either part-time or casually while carrying the major responsibility of caring for the children. In the absence of any evidence to the contrary, on the authority of Parshen & Parshen[6] I assume both parties contributed their incomes to the benefit of the family.
[6] (1996) FLC 92-720.
Financial contributions after separation
The wife withdrew approximately $4,000 from the parties’ joint funds at the time of separation. The husband sold shares in his name for a similar sum.
The wife increased her hours of work after separation and has been working full time for two years. She is earning $40,000.00 a year. The husband continues to work full time, though has changed his place of employment. He is earning $233,000.00 a year.
For 3 months after separation, the husband paid the outgoings on the former matrimonial home and for two years he met all the mortgage repayments. From mid-2006 to the present, the husband and wife have shared the mortgage repayments equally.
The husband has paid his liability to the Australian Taxation Office in the sum of $31,000 without contribution from the wife.
The wife has had the exclusive use of the former matrimonial home but has carried out maintenance and improvements on the property including painting, repairs, removal of rubbish, maintaining the garden with assistance from her brother.
The husband paid child support of $2,300 a month until the children moved to live with him a few months after separation. The wife then paid $55 a month in child support. The wife now supports the two oldest children with some assistance from each of them by way of board. The parties’ youngest son, H travelled to the USA for his final year of school in August 2005 and to further his basketball career. The husband funded his travel and education expenses and gap medical expenses. The husband has paid and continues to pay private health insurance premiums for A and H. The husband continues to provide financial support to H, though the wife also meets his expenses when he spends time in Australia.
In relation to superannuation, the parties agree the wife has a present entitlement of $27,965 and the husband an entitlement in two funds of $152,496. Most of the wife’s entitlement relates to the post-separation period as she earned a low income during the marriage. The husband’s entitlement has grown by approximately one third since separation[7].
[7] Exhibits 4, 6 and 7.
In assessing each party’s contribution entitlements to superannuation, I take into account the overall contributions of each party. I have had regard to Stephen Bourke’s article “Dealing with Superannuation after Coghlan” released in July 2006[8]. He refers to the High Court decision of Norbis v Norbis (1986) 161 CLR 513 at 523-4 when the Court agreed there should not be “over-zealous attention to the ascertainment of the parties’ contributions.”[9] Mr Bourke says further “the High Court has unequivocally determined that ‘homemaker and parent’ contributions should be taken into account ‘not in a token way, but in a substantial way.’[10] He goes on:
There is nothing in the Act, including Part VIIIB, that suggests those matters – or any other existing jurisprudence in respect of contributions – are any less true of superannuation interests (whether property or not).[11]
[8] Bourke S, Dealing with Superannuation after Coghlan (2006) Television Education Network, ib id, p.14.
[10] ib id, p.14 citing Mallett v Mallett (1984) 156 CLR 605, per Gibbs CJ at 609, citing Rolfe; Mason J at 623, Wilson J at 636, Deane J at 640-1, Dawson J at 646.
[11] ib id, p.14.
I find the husband has made the significantly greater financial contributions both during the marriage and since separation as a result of the division of roles between the parties during the marriage.
Non-financial contributions
There are only minor factual differences between the parties as to their respective non-financial contributions. The husband assisted with maintenance and landscaping at Property S, piped the drainage easement and coordinated the tradesmen who built the Property N house. The husband coordinated and liaised with builders and authorities to complete the Property C home, when the building company contracted to build the home was deregistered and the building was delayed and the parties incurred additional unexpected costs. The husband built retaining walls, established a garden and painted the interior and exterior of the Property C home. The wife does not adduce evidence of her non-financial contributions during the marriage, beyond her contribution to the welfare of the family. There is no dispute the wife has maintained the Property C home since separation and has undertaken improvements to that property.
The wife was predominantly responsible for domestic tasks and for the day to day care of the parties’ three sons during the marriage though the husband took some role in caring for the children particularly while she was working, transporting the children to sporting events, and coaching and managing sport. I accept the wife’s evidence that she made the overwhelmingly greater non-financial contributions.
The husband cared for the children for over 12 months after separation. The wife now contributes to the care of the parties’ two adult children.
The wife’s counsel contends the parties’ contributions should be assessed as equal overall. The husband’s counsel submits that the husband is entitled to 52% by way of contributions overall as a result of greater post-separation contributions. I accept that the husband has made the greater post-separation financial contributions, and also contributed non-financially by caring for the children for a significant period. However, on a weighing of all the factors including the length of the marriage, I am not persuaded the husband’s contributions after separation warrant a contribution adjustment in his favour. The husband left the marriage on a high salary and the wife on a modest salary as a result of the parties’ division of roles during the marriage. The wife was not in a financial position to match the husband’s contributions after separation. The wife did however, increase her working hours and took responsibility for many of the outgoings on the home only a short time after separation. Given the constraints on her financial capacity as a result of the marriage, I am satisfied the wife contributed to the full extent of her ability to do so, both financially and non-financially after the parties’ separation.
I therefore assess the parties’ contributions overall as approximately equal to the date of hearing.
What is the effect, if any, of any proposed order upon the earning capacity of each party?
The orders I have made will have no effect on the earning capacity of either party.
What matters referred to in sub-section 75(2) of the Act are relevant?
I have considered each of the relevant factors listed in sub-s.75(2) of the Act.
The husband is 50 years of age and the wife 47. The wife suffers from neck pain at times as a result of a motor vehicle accident in 1999 but there is no evidence that this affects her capacity for employment. There is otherwise no evidence of either party having health problems.
The husband has a present income of $233,000 a year. The wife is earning $40,000 a year.
According to each party’s Financial Statement relied on at hearing, the husband’s income well exceeds his expenses week to week while the wife’s weekly income is significantly less than her expenses. The husband’s expenses also include $496 a week towards superannuation, while the wife makes no contribution to superannuation. The husband deposes to some modest savings, the wife to negligible savings. I find the husband is in a stronger financial position than the wife.
The Full Court in In the Marriage of Clauson (1995) FLC 92-595 said:
It has long been recognised that in most cases the most valuable “asset” a party can take out of the marriage is a substantial, reliable income earning capacity.
I am satisfied the wife’s earning capacity is significantly less than that of the husband and she will accrue less superannuation in the future as a result. I make an adjustment in the wife’s favour as a result of this factor.
The husband has re-married. His wife is in full time employment with a salary in excess of $100,000 a year. Although he and his wife have entered into a Binding Financial Agreement to keep most of their financial arrangements separate, I am satisfied the husband enjoys an advantage over the wife, in sharing his expenses with his present wife.
The husband’s counsel submits there should be an adjustment of 10-12% in favour of the wife as a result of s.75(2) factors. The wife’s counsel submits the wife should receive a 20% adjustment in her favour, given the relatively modest size of the asset pool. In my view the appropriate adjustment is 15%. This will give the wife 65% of the net assets of the parties, and the husband 35%.
Have there been any other orders made affecting a child or either party and is child support payable or likely to be payable in the future for the children of the marriage?
The children are adult. This factor does not apply.
Is the result just and equitable?
Section 79(2) 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.
The husband asks that the parties share in the ‘tangible’ assets and the superannuation assets. In particular, he seeks a splitting order providing for the wife to receive $50,000 from his entitlement in the IOOF Superannuation Fund. The wife, on the other hand, seeks orders that provide for her to receive the whole of her property entitlement by way of ‘tangible’ assets so that she can retain the home. The wife’s counsel submits that unless the wife retains her present home, she is unlikely to be in a financial position to purchase another home in the future given her income, her capacity to borrow and repay a loan. She therefore needs tangible assets. Although the wife adduces no evidence as to how much she can borrow on the security of the home on her present income, the wife’s counsel says:
“…superannuation will not assist the wife to put herself in a position where she can create wealth. The only way she can possibly do that is if she has as much cash available to her to pay for the purchase of a house. The wife should have the best opportunity to remain in her house, as her only opportunity to accumulate a capital asset.”
The husband’s counsel submits the husband presently has no assets beyond some superannuation. Counsel submits:
“One can see that beyond super his financial position is rather paltry at the moment. He is dependent upon continuing to earn the generous wage that he receives at the moment, but your Honour would be aware that he has only been in that job for a relatively short time… he has moved from job to job.”
The husband’s counsel further submits that superannuation is:
“a chose in action to obtain from the trustee a sum of money when certain conditions are met…It can’t be seen in circumstances where the husband has so few cash reserves, or cash assets, that it could be just and equitable that he is left with entirely super which he cannot access, base on his age, for another 10 years.”
Counsel says it cannot be assumed the husband will continue to earn the income he receives now. The husband’s counsel argues that the wife only needs to house herself and could do so from her share of the net proceeds of sale of the home.
I agree with the husband’s counsel that it is discretionary whether or not the court makes a splitting order. Neither counsel refers me to any authorities. However, having considered a number of cases in which this question arises[12], I agree with counsel that each case turns on its own facts and the only overriding principle is that the orders must be just and equitable. In Doherty & Doherty[13], the facts were similar to the present. The husband there sought orders that the former matrimonial home be sold and his superannuation entitlement be subject to a splitting order, such that each party received a mix of tangible and superannuation assets. The wife in that case sought an order that she retain the home and the husband retain the whole of his superannuation entitlement. The husband had a higher income than the wife, had re-partnered and was living in his new partner’s home. The Court did not make a splitting order and the husband was unsuccessful on appeal. The Full Court said:
[12] McCullogh & McCullogh [2006] FamCA 840; Doherty & Doherty [2006] FamCA 199; HG & HCT [2005] FamCA 734.
[13] [2006] FamCA 199.
“There had been no evidence before [the Court] of any particular purpose or need for which the husband would use such cash as he might receive from a sale of the home and equal division of its proceeds. Nor was there evidence of the husband’s intentions with regard to the age of retirement…
…the decision about the mix of assets was a discretionary one.”
In the present case, as in Doherty, there is no evidence before the Court as to any particular purpose or need for which the husband would use cash he might receive from a sale of the home.
Similarly, in McCullough & McCullough[14] the Full Court noted where there were no findings by the Trial Judge about any particular need of the husband for capital and where the wife had less capacity to retain and repay any borrowing, it was just and equitable for the wife to receive most of the ‘tangible assets’ although in that case, the wife received a small proportion of her entitlement in superannuation.
[14] [2006] FamCA 840.
The husband will receive 35% of the net assets which is equivalent to $247,665. If the Court does not make a splitting order and leaves the whole of the husband’s superannuation entitlement with him, the husband will receive $92,137 in cash from the wife, in addition to the other assets he already has. If the Court makes the splitting order sought by the husband, the sale costs of the home will be taken into account and will reduce the asset pool. The husband could expect to receive an estimated additional $40,000 - $45,000 in cash, depending on the impact of the costs of sale on each party’s entitlement and the actual sale price of the home.
The husband has a strong work history over the last 28 years. He is a qualified engineer. There is no evidence to suggest the husband cannot continue to earn a high salary. He is earning an income well in excess of his expenses and his expenses will decrease when this matter is finalised as after two months he will no longer contribute to the home mortgage. I find the husband will be in a position to save the difference I have referred to relatively quickly. I also take into account that the husband adduces no evidence as to an immediate need for cash funds. Given the insubstantial difference in his position if the wife is given an opportunity to retain the home, I have decided it is just and equitable to both parties for the wife to have that opportunity. In the event the wife is unable to re-finance the home and borrow the sum necessary to pay the husband the amount ordered within 2 months, the home will be sold.
The husband will have assets and liabilities set out in the following table:
| Assets to be retained by husband | $ |
| J Pty Ltd business account proceeds | 32.00 |
| ANZ Access Advantage account proceeds in husband’s name | 2,000.00 |
| ANZ E trade account in husband’s name | 1,000.00 |
| Unisuper entitlement | 1,284.00 |
| Share of IOOF superannuation entitlement | 151,212.00 |
| Payment from wife | 92,137.00 |
| TOTAL | 247,665.00 |
The wife will have the assets and liabilities set out in the following table:
| Assets to be retained by wife | $ |
| Proceeds of joint account | 20.00 |
| Wife’s Citibank account | 100.00 |
| 1998 Ford Vehicle in wife’s name | 8,000.00 |
| Wife’s superannuation entitlement | 27,965.00 |
| Debt to mother | (2,000.00) |
| Home at Property C | 590,000.00 |
| Debt secured by mortgage on Property C | (72,000.00) |
| Payment to husband | (92,137.00) |
| TOTAL | 459,948.00 |
If the home has to be sold, for the wife to receive 65% of the net asset pool, she must receive 65% of the assets, excluding the net value of the home ($518,000.00) which is 65% of $189,613 = $123,248. The wife already has assets of $34,085, so she will need another $89,163 from the net sale proceeds of the home to achieve 65% of the assets excluding the home. After payment of that sum to the wife, the balance of sale proceeds must be divided 65% to the wife and 35% to the husband.
I am satisfied that the orders set out at the beginning of these Reasons are just and equitable.
I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of Sexton FM.
Associate: Collette McFawn
Date: 29 May 2007
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