Westbrook & Westbrook

[2021] FCCA 975

FEDERAL CIRCUIT COURT OF AUSTRALIA

Westbrook & Westbrook [2021] FCCA 975

File number(s):

DGC 2393 of 2019

Judgment of:

JUDGE BURCHARDT

Date of judgment:

13 May 2021

Catchwords:

FAMILY LAW – Property dispute in which only assets are parties’ superannuation  - eight year relationship which ended in 2013 – both parties agreeing that there should be a superannuation split – wife seeking split based on values at trial and husband seeking split based on figures at December 2014 – just and equitable in particular circumstances that superannuation split be based on 2014 figures

Legislation:

Family Law Act 1975 (Cth) ss 75(2), 79, 90XT(1)(a)

Cases cited:

Hauff & Hauff (1986) FLC 91-747

AJO & GRO (2005) FLC 93-218

Stanford & Stanford (2012) 247 CLR 108

Williams & Williams (1984) FLC 91-541

Number of paragraphs:

28

Date of hearing:

28 April 2021

Place:

Dandenong

Counsel for the Applicant:

Self Represented

Counsel for the Respondent:

Self Represented

ORDERS

DGC 2393 of 2019

BETWEEN:

MS WESTBROOK

Applicant

AND:

MR WESTBROOK

Respondent

ORDER MADE BY:	JUDGE BURCHARDT
DATE OF ORDER:	13 MAY 2021

THE COURT ORDERS THAT:

1.The matter be adjourned to this Court for mention before Judge Burchardt on 16 June 2021 at 9.30 am.

Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.

IT IS NOTED that publication of this judgment under the pseudonym Westbrook & Westbrook is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

REASONS FOR JUDGMENT

JUDGE BURCHARDT

INTRODUCTORY

1. This is an unusual property dispute.  The parties have, in effect, no meaningful property interests save for superannuation.  The applicant wife seeks that there be some adjustment to the parties’ superannuation interests but did not articulate any precise division that she was seeking.  The respondent husband seeks that there be an equalisation of the parties’ superannuation either in the amounts they held one year after separation or, alternatively, at the time of separation itself.

2. It should be noted that both parties have been self-represented at trial.  Both made it clear, in response to questions from the Court, that they did not wish to cross-examine but simply wished to make submissions, which is what, by the agreement of all concerned, took place.

3. For the reasons that follow, I propose to order an equalisation of the parties’ superannuation calculated as best as I can on the figures that were obtained one year after separation.

   AGREED OR UNCONTESTED MATTERS ARISING FROM THE PARTIES’ AFFIDAVITS

4. The wife was born in 1979, and the husband was born in 1976.  The wife is employed as a part-time customer service officer and a casual taxi driver.  The husband is the managing director of a family business of his own that he runs with his partner Ms B.

5. The parties met in 2005 and commenced cohabitation in 2006.  They married in 2009 and separated on 29 July 2013.  They have two children:  X, born in 2010, and Y, born in 2012.  Following orders made by consent on 11 June 2020, the children live with the mother and spend time with the father in a 10/4 fortnightly arrangement.  There have been ongoing issues as to the tardiness or incomplete amounts of child support paid.

6. It is common cause that the parties divided their chattels at the time of separation together with such funds as they then had.  The funds were extremely small, amounting to little more than thousand or two dollars each.  The chattels, plainly, would have had no meaningful second-hand value.  No formal agreement was entered into as to this distribution, but neither party seeks any adjustment to the chattels or financial resources that each party has. 

7. It should be noted that from their financial statements, neither party has anything of any moment in terms of moneys in the bank or funds in any other way available to them, save that the husband has the advantage of paying his partner $1,100 a week in the family business, from which he also receives a sum of that amount.  The parties have motor vehicles, and the husband owns a boat and some jet skis, but there is nothing to suggest these are of any significant value, and, indeed, his car is the subject of a loan. 

8. Both parties live in rental accommodation, and it is clear from their affidavits that they have lived in rental accommodation throughout their time together.  The matter of the property division that took place in 2013 is perhaps clearly and poignantly expressed in paragraph 4 of the wife’s affidavit affirmed 16 March 2020, where she said:

   In regards to the division of assets at the time of separation, the larger assets and the house were divided.  We didn’t have a lot of big assets to split.

9. In the same affidavit, the wife set out what is clearly the genesis of this claim when she said:

   One thing I find confusing is how Mr Westbrook managed to double his superannuation in the three years after he split, yet his income didn’t change.  Was he hiding money from me?  Did he sell some of our belongings?  That’s a massive jump, and by Mr Westbrook’s own admission, he hasn’t put any super aside since starting his own business.

10. This passage relates to the fact that the husband ceased his pre-existing and secure employment in 2016 and, as it were, went out on his own.  He was a sole trader for three years and then incorporated his business together with his partner, Ms B.  Unsurprisingly, that business has taken something of a hit during the COVID emergency but appears to still be continuing.

11. From the materials filed, it is plain the wife’s superannuation at separation in 2013 was $44,854 across four accounts, and that of the husband was $76,367.  His superannuation was worth $162,800 when he filed his financial statement on 19 September 2019, but he has withdrawn $10,000 during the COVID emergency.  The wife has withdrawn $20,000 in superannuation in more recent times to meet various exigencies.

    THE MATTERS ASSERTED AT COURT

12. In her oral submissions, Ms Westbrook pointed to the significant increase between 2013 and 2016 of the husband’s superannuation from $76,000 to $162,000.  She pointed to the fact that he has not made any superannuation contributions in the last four years and that the $86,000 increase to which she referred seemed extraordinary given an income of 69,000 to 72,000 dollars during the relevant period.  She surmised whether the husband was paying his partner’s superannuation through the business. 

13. She traversed the husband’s affidavit’s assertion that he had paid school fees in 2018 but pointed out that the husband does not pay school fees on an ongoing basis.  She does.  The husband’s financial statement had not mentioned whether his partner was in receipt of child support or statutory benefits.  They have $9,000 per month between them and have recently bought two puppies and a gaming computer. 

14. She tendered as exhibit A1 a document from Suburb C which, she asserts, shows that she pays the school fees (and I accept that proposition) and a document from Centrelink showing the deductions that enable her to do so.  The wife informed the court that she had withdrawn $20,000 out of her superannuation during COVID and that her present total is $55,578.  She informed the court that she wanted a fair superannuation split but, as earlier indicated, did not articulate exactly what that would mean.

15. The husband traversed his school fees.  He asserted that he is paying child support and had been informed that, as a result, he does not have to pay school fees and is not doing so.  He had paid medical expenses in the past.  He said that the major increase in his superannuation had taken place because he had done a lot of work.  He confirmed he has had his own company for the last two years and was the sole trader for three years before that.  He ceased his employment in December 2016. 

16. He has not salary-sacrificed into superannuation, and no superannuation has been paid to his partner.  He went on to say that he was content for there to be an equalisation of superannuation at a point 12 months after superannuation.  His superannuation was $91,576 at the end of 2014.  In the alternative, the superannuation should be equalised as at the date of separation.

17. In reply, the wife said her superannuation was $40,000 in 2014. The wife confirmed that her superannuation was $44,854 at separation, and she was earning approximately $40,000 in the 2014 calendar year.

    STANFORD & STANFORD (2012) 247 CLR 108 (“STANFORD”)

18. The court’s first task is to identify the legal and equitable interests of the parties and determine whether a property adjustment is appropriate.  Regrettably, the parties have the misfortune to really have no property of any meaningful note whatever, save for their superannuation;  nonetheless, the wife seeks a superannuation adjustment, and the husband explicitly concedes that there should be one, and in these circumstances, in my view, it is just and equitable that there be a property adjustment.

    DETERMINATION OF THE ISSUE

19. The wife’s position is essentially that there should be an adjustment of the parties’ superannuation assessed as at the date of trial, whereas that of the husband is there should be an equalisation based on the end of 2014 or, alternatively, the separation in December 2013.

20. The position in relation to the court’s approach to the time at which the assessment of the parties’ property should be made was described succinctly but, in my respectful view, very helpfully by the Full Court of the Family Court in AJO & GRO (2005) FLC 93-218, where at [16] - [17] the court relevantly said:

    The starting point is that ordinarily in proceedings under s79 of the Family Law Act 1978 (Cth) (“the Act”) the property and financial resources of the parties are valued as at the date of trial. See, for example, Williams & Williams (1984) FLC 91-541 and Hauff & Hauff (1986) FLC 91-747.

    We accept that in a particular case there may be reasons which justify the selection by the trial judge of another date and that in some cases that may be the date of the separation of the parties.

21. This case falls to be considered very much on its own particular and very discrete set of facts.  The parties were in a relationship from 2006 to the end of 2014, a relationship of almost exactly eight years.  They have two children who are still relatively young, and the mother’s affidavit material speaks eloquently of the difficulties of bringing them up and paying for them on her own. This is particularly so given the difficulties faced by X. I have no hesitation in accepting that her financial circumstances are more strained than those of the husband.  He may suffer the difficulty that his business is by no means entirely secure, but the income in his household is very substantially greater than that of the wife (this is in effect all the information the parties have provided as to their future needs/s75(2) matters)

22. Nonetheless, the parties separated as long ago as December 2013 and quite clearly came to an informal agreement about the division of their finances and chattels at that time.  The husband has asserted that it was agreed that there would be no further claims, but in the absence of any cross-examination, and in the face of the express concession by the husband that there should be some sort of superannuation split, I am not persuaded that any sort of binding agreement to exclude superannuation claims was entered into.

23. Neither party has been able to tell me what their superannuation was at the commencement of the relationship.  Given that that of the husband was $76,000 in December 2013 and that that of the wife was $45,854 at the end of December 2013, in my view, it is more probable than otherwise that all or very nearly all of their superannuation must have accrued during that period up to that point.  The husband concedes that a superannuation split as at the end of 2014 would be fair.  At that time, his superannuation had increased to $91,576.

24. Bearing in mind the wife’s earnings of $40,000, in all probability, her superannuation would have increased from $44,800 to approximately $50,000, bearing in mind the nine per cent contribution and the apparent marked increase in figures at that time (extrapolating from the husband’s significant increase in one year).  Had a superannuation split been made at that time, of course, that of the wife would have accrued yet further, and it is reasonable to conclude that her superannuation figure would now be much higher.

25. The wife’s claim is really one arising out of her stark suspicions about the very significant increase that took place in the husband’s superannuation in the period from December 2013 until he ceased superannuation contributions in 2016.  What this overlooks, however, is that the husband’s superannuation will not have stayed static in the last five years.  I take judicial notice of the fact that superannuation funds have performed very well over that period, and, indeed, Super Fund D, in which the husband has his funds, has done particularly well.

26. In truth, while one can fairly allot to the wife a proper measure of contribution to the husband’s superannuation while they were together, in circumstances where she has not brought a property claim for six years after separation, and there has been no relationship between the parties, self-evidently, during that period, in my view, it would be unjust and inequitable to adopt in this instance the value of superannuation at trial.

27. I think that the husband’s position that it would be just and equitable to divide the superannuation as at one year after superannuation is, in the very particular circumstances of this case, a just and equitable outcome.  While this is true that the wife did not contribute to the husband’s superannuation after separation, even in the most notional sense, the fact is that had a division then taken place, that of the wife would have been substantially greater now than it was then.  While these are not areas of precision, self-evidently, in my view, an adjustment of the parties’ superannuation as at the end of 2014 is indeed just and equitable.

28. This means that I will assume that the superannuation of the wife was $50,000, rounded off, and that of the husband was $91,576.  I have drawn orders to reflect this superannuation split.  Because the parties are self-represented, I have no doubt the superannuation trustee has not been given procedural fairness.  I will give the wife the proper opportunity to forward her draft orders to the superannuation fund, and once procedural fairness has been provided, and assuming that the orders are not objectionable to the trustee, this matter will be brought to a conclusion.

I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Burchardt.

Associate:

Dated:       13 May 2021