X & X
[2005] FMCAfam 294
•8 June 2005
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| X & X | [2005] FMCAfam 294 |
| FAMILY LAW – Property – global or asset by asset approach – whether global approach appropriate in 5.5 year marriage with one child – global approaches adopted, with superannuation funds dealt with separately from ‘property’. FAMILY LAW – Property – contributions – significance of initial contributions in 5.5 year marriage with one child – significant initial contributions. FAMILY LAW – Property – contributions – superannuation – splitting order – date of operative effect – no date of valuation in evidence as value agreed at trial – date of trial appropriate date for operative effect. |
| Family Law Act 1975, ss.79, 75, 90mc |
| Brandt & Brandt (1997) FLC ¶92-758 C & C [2005] FamCA 429 Coventry & Coventry and Smith (2004) FLC ¶93-184 Crapp v Crapp (1979) FLC ¶90-615 Davut and Ralf (1994) FLC ¶92-503 Dickson and Dickson (1999) FLC ¶92-843 Evans and Public Trustee of WA (1991) FLC ¶92-223 Farmer & Bramley (2000) FLC ¶93-060 Farnell and Farnell (1996) FLC ¶92-681 Figgins & Figgins (2002) FLC ¶93-122 G & G (1984) FLC ¶91-582 Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC ¶93-143 King v Kemp (1996) FLC ¶92-673 Law-Smith and Senior (1989) FLC ¶92-050 Lenehan and Lenehan (1987) FLC ¶91-814 McLay and McLay (1996) FLC ¶92-667 McMahon and McMahon (1995) FLC ¶92-606 Norbis & Norbis (1986) FLC ¶91-712 Pierce & Pierce (1999) FLC ¶92-844 Prpic and Prpic (1995) FLC ¶92-574 Russell & Russell (1999) FLC ¶92-877 Stay v Stay (1997) FLC ¶92-751 W & W [2005] FamCA 430 Zyk, RM and Zyk, D (1995) FLC ¶92-644 |
| Applicant: | CX |
| Respondent: | BX |
| File Number: | MLM6004 of 2004 |
| Judgment of: | Riethmuller FM |
| Hearing date: | 31 January 2005 |
| Date of Last Submission: | 31 January 2005 |
| Delivered at: | Melbourne |
| Delivered on: | 8 June 2005 |
REPRESENTATION
| Counsel for the Applicant: | Ms Smallwood |
| Solicitors for the Applicant: | Pearsons |
| Counsel for the Respondent: | Mr Weil |
| Solicitors for the Respondent: | Rennick & Gaynor |
ORDERS
That the husband pay to the wife the sum of $217,500 within 30 days, and in consideration of, and contemporaneous therewith:
(a)the wife must do all acts and execute all documents submitted by the husband to transfer to the husband any interest of the parties in the land being the whole of the land situated at 105 W Road, in the State of Victoria;
(b)the husband secure the release of the wife from any mortgage or other security with respect to the property; and
(c)the husband do indemnify the wife and keep her indemnified from all debts, liabilities and obligations of the wife relating to or arising out of:
(i)the property; and
(ii)the mortgage presently encumbering the property; and
(iii)from all actions, proceedings, costs, claims and expenses in respect of the property.
In the event that the husband is unable or unwilling to comply with order 1, then:
(a)The parties must do all acts and execute all documents necessary to sell the property by public auction to be held within 75 days of these orders.
(b)The reserve price is to be such amount as nominated by the husband.
(c)In the event that the property does not sell at auction, it be auctioned again within 120 days and there be no reserve price at the auction.
(d)Each party has the right to bid at the auction.
(e)That the proceeds of sale be applies as follows:
(i)to the discharge of all mortgages or encumbrances presently affecting the property;
(ii)to the payment of the sale expenses;
(iii)to payment of the wife of the sum of $217,500 together with interest (at the default rate pursuant to the court rules) from the time of payment provided for in order 1; and
(iv)the balance to the husband
With respect to the husband’s superannuation fund:
(a)Whenever a splittable payment is payable in respect of the superannuation interest of BX in the AMT superannuation fund:
(i)CX is entitled to be paid an amount calculated in accordance with the Family Law (Superannuation) Regulations 2001, using a base amount in the sum of $129,930 at the operative time of 31 January 2005; and
(ii)there is a corresponding reduction in the entitlement of the person to whom the splittable payment would have been made but for this order.
(b)Within 7 days after CX receives the payment split notice from the trustee under regulation 7A.03 of the Superannuation Industry (Supervision) Regulations1994 she must do all things and execute all documents to make a request pursuant to regulation 7A.06(2) of the Superannuation Industry (Supervision) Regulations1994, for the trustee of the fund to either:
(i)roll over or transfer the transferable benefits of CX to a fund nominated by her in writing; or
(ii)do all things and execute all documents (including making a request pursuant to regulation 7A.05 of those Regulations) for the fund to create a new interest in her name in the fund, provided that the fund rules allow her to create such an interest.
(c)This order binds the trustee or trustees from time to time of the superannuation fund.
That within 28 days the husband transfer all of his right title or interest in the Coles Myer shares to the wife.
With respect to the child’s keepsakes, memorabilia, photographs and gifts (including, but not limited to christening gifts, plates, bowls, cutlery, time capsules, embroidery and announcements and documents):
(a)within 7 days the husband provide to the wife a list of such items divided into two sections headed ‘Section A’ and ‘Section B’;
(b)that within 7 days of receiving the list, the wife notify the husband as to whether she elects to receive the items in ‘Section A’ or ‘Section B’;
(c)that the husband deliver up to the wife all of the items listed in the Section nominated by the wife within 7 days of receiving notice of the section of the list that she has nominated; and
(d)each party make available to the other copies of any items listed that are within their possession, within 7 days of any request, at the expense of the requesting party (provided the request is made within 28 days)
Each party be solely entitled to the exclusion of the other to all other entitlements and property (including choses-in-action) owned by or in the possession of such party as at the date of these orders, not otherwise dealt with in these orders.
That the husband pay spousal maintenance to the wife in the sum of $1088.33 per calendar month payable monthly in advance each month up to and including June 2007, and that thereafter spousal maintenance cease.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT Melbourne |
MLM6004 of 2004
| CX |
Applicant
And
| BX |
Respondent
REASONS FOR JUDGMENT
The parties seek final orders with respect to property.
The orders originally sought by the applicant were as follows;
5.That the Wife receive such amount of capitalised spousal maintenance as the Honourable Court deems fit.
6.That the former matrimonial home known and situated at 105 W Road, in the State of Victoria be forthwith sold altogether out of Court and the net proceeds thereof be divided on the basis of 70 per centum thereof to the Wife and 30 per centum thereof to the Husband, such percentage division to be based on a mortgage of $160,000 and to take into account that the Husband has already received $90,000 when calculating his 30% entitlement.
7.That the Wife receive 50 per centum of the Husband’s long service leave entitlement payout, any sick leave entitlement payout and any annual leave payout.
8.That the Wife receive 70% of the Coles Myer shares.
9.That the Wife retain the BMW motor vehicle currently registered in her name and in her possession and pay to the Husband 30% of the net value of such vehicle.
10.That there be an adjustment of superannuation between the parties.
11.A selection of furniture from the family home.
12.Such further and other Orders as the Court deems fit.
At trial, after the openings and some initial discussions with counsel, the wife revised her application to seek 55 per cent of the total asset pool.
The husband, in his response, sought orders in the following terms:
10.That the Husband pay to the wife the sum of $200,000 within sixty (60) days.
11.That in consideration of paragraph 10:
(a)The Wife transfer to the Husband her interest in the former matrimonial home situate at and known as 105 W Road; and
(i)The Husband indemnify the Wife in respect of the home loan from ME and all other rates, taxes, charges and encumbrances in respect of the property.
12.That the parties Coles/Myer shares be sold and that the nett proceeds be equally divided between the parties.
13.That the parties otherwise respectively retain to the exclusion of the other all items of property and financial resources in their respective ownership, possession and control.
At trial the husband relied upon the following documents:
a)Affidavit of BJX sworn 21 January 2005, filed 25 January 2005.
b)Affidavit of BJX sworn 6 October 2004, filed 5 January 2004.
c)Affidavit of BJX sworn 25 August 2004, filed 31 August 2004.
d)Form 13 Financial Statement of BJX sworn 21 January 2005, filed 25 January 2005.
e)Affidavit of DN sworn 28 January 2005, filed 28 January 2005.
f)Real Estate Valuation Report of DB of AB Valuers dated 25 November 2004.
The wife relied upon the following documents:
a)Order 30 affidavit of wife sworn 24 January 2005;
a)Financial statement filed on 20 July 2004;
b)Order 30, affidavit of wife sworn 19 July 2004 from paragraph 20 onwards.
Background
The husband was born on 22 August 1960 and is now 44 years of age. The wife was born on 7 August of 1969 and is now 35 years of age.
In 1987 the husband commenced work at DP, and in the last year or so has changed employer as a result of the effect of I purchasing the relevant section of DP at which the husband works. This has resulted in some changes upon his remuneration package meaning that he is no longer eligible for bonuses and is no longer able to convert a car allowance into a cash payment.
On 26th July 1998 the parties commenced cohabitation. They purchased a home at C in Melbourne in June of 1999 for around $370,000 (with expenses of around $22,000). This was funded by a deposit made up of $20,000 of money from the wife, and $102,000 of moneys held by the husband: the balance was borrowed. These resources were resources of the parties prior to the commencement of the relationship. The wife also had a motor vehicle which was later sold for $10,000. The husband contended in evidence that his recollection was $7,000, however his evidence on this was not firm. On this point I prefer the evidence of the wife.
On 12 February 2000 the parties married and in August 2000 the wife commenced work with an advertising agency known as C & A.
On 28 September 2001 the wife gave birth to the child of the parties NJX.
The parties separated on 7 February 2004. It appears that the relationship had broken down and arrangements were in place for the wife to move out of the home on 14 February 2004, however the acrimony increased before that date when it became apparent to the husband that the wife was in some form of a relationship with a third person.
On 7 October 2004 interim maintenance and property orders were made by me as follows:
a)That the husband pay spousal maintenance pending the hearing of this matter in the sum of $1088.33 per month payable monthly in advance with the first payment to commence 8 October 2004.
b)That the husband and Wife each within 7 days receive one half of the sum represented by the balance of the bank account as at the 6 October 2004, in P less $80,000 and $80,000 be transferred forthwith to the mortgage account (ME).
c)That until further Order each party be restrained from drawing down on the mortgage account without the consent of the other party.
d)That the monies received directly by the parties from the above distribution be treated as an interim property distribution.
The parties have settled the parenting issues with respect to their child N on the following basis:
a)
That both the husband and the wife maintain long term responsibility for the care of the child of the marriage NX born
28 September 2001.
b)The said child reside with the husband in a two week cycle as follows:
(i)Monday 3.00 pm until Tuesday 7.30 am in one week of the two week cycle;
(ii)Friday 6.00 pm until Monday 7.30 am in week two of the two week cycle; and
(iii)Each Wednesday from 5.00 pm to 6.30 pm.
a)That at all other times the child resides with the wife.
b)During the periods which coincide with mid-term school holiday, for the year 2005 the child is to reside with the husband for a period of 5 nights on dates to be agreed between the parties, and thereafter as agreed, but in default of agreement, for a minimum of 5 nights.
c)During the 2005/2006 Summer vacation the child is to reside with husband for 2 periods of 6 nights and 1 period of seven nights, and thereafter as agreed, but in default of agreement for these periods as a minimum.
d)The child is to have contact with the husband on the child’s birthday, and the husband’s birthday at times to be agreed between the parties and it is expressly noted that the same is to apply reciprocally with regard to the mother’s birthday.
e)That the child reside with the respective parent for Mother’s Day and Father’s Day in each year.
f)Other times by agreement.
g)That the child is to spend Australia’s Christmas Day with the husband and the Ukranian Christmas Day with the mother.
At the trial of the matter, the parties were agreed with respect to many of the issues concerning the identification of the pool of assets and contributions to the pool.
The law
Section 79 of the Family Law Act 1975 (‘the Act’) enables the Court to make such orders as the Court considers appropriate altering the interests of parties in the property. Section 79 of the Act sets out a number of significant matters that must be considered in order to determine what orders would be appropriate.
In Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC ¶93-143 the Full Court of the Family Court conveniently summarised the preferred approach 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: Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend (1995) FLC 92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEJ and DDF (2001) FLC 93-075 and Phillips and Phillips (2002) FLC 93-104.
The approach taken in Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC ¶93-143 must now be read subject to the decision in C & C [2005] FamCA 429 (with respect to superannuation), where Bryant CJ, Finn and Coleman JJ said:
43. Thus, the way in which s 90ms is drafted leads us to the view that superannuation interests are another species of asset which is different from property as defined in s 4(1), and in relation to which orders also can be made in proceedings under s 79.
44. However s 90ms(1) does have the effect, in our view of requiring that in a case where the Court intends to make orders in relation to superannuation interests of the spouses, it must do so “under” s 79 (although s 90ms(2) makes it clear that the Court cannot make an order in relation to a superannuation interest except in accordance with Part VIIIb). In other words, the Court must apply to superannuation interests the matters to be taken into account under s 79.
…
63. …we consider that the preferred approach to the determination of property settlement cases must be to prepare in addition to the list of items of property (which would clearly fall within the definition of that term in s 4(1)), a separate list containing any superannuation interest or interests (valued according to the Regulations if a splitting order is sought in any application before the Court, or if no such order is sought, valued either according to the Regulations or otherwise). This of course is the approach which the trial Judge adopted in this case.
In undertaking the first step the various items of property should be identified with reasonable precision and value. However in the subsequent steps it is not possible to make an adjustment for each relevant factor with mathematical precision. This is clearly stated by Nygh J in G & G (1984) FLC ¶91-582 (at page 79,697), where his Honour said that:
It cannot be required of the Family Court that it assesses contributions with mathematical precision with respect to each item.
This observation was approved by Mason J (as his Honour then was) and Deane J in Norbis & Norbis (1986) FLC ¶91-712. This observation has regularly been repeated by the authorities: see for example Brandt & Brandt (1997) FLC ¶92-758 and Farmer & Bramley (2000) FLC ¶93-060. Of course, ‘Judges [and Federal Magistrates] are obliged to exercise their discretion judicially and should explain the broad nature of their reasoning that leads to their conclusion’: see Figgins & Figgins (2002) FLC ¶93-122.
With respect to the final step it is important to note that it is the justice and equity of the actual orders that the Court must consider: see Russell & Russell (1999) FLC ¶92-877.
The pool of assets
It is agreed that the husband brought to the relationship the following assets or financial resources:
c)superannuation valued at $160,000;
d)cash moneys used to purchase the matrimonial home of $102,000; and
e)furniture and personal effects.
The wife brought to the relationship the following:
a)a motor vehicle later sold for $10,000;
b)cash moneys of $20,000 applied towards the purchase of the matrimonial home;
c)some superannuation, although the amount is unable to be quantified; and
d)a quantity of furniture and personal effects.
The parties are agreed that the present asset pool comprises the following:
a)a house at C (Melbourne), with a net value of $411,000;
b)Coles Myer shares valued at $6,000;
c)the wife's car valued at $13,000;
d)the husband's superannuation ($290,000 at separation) at trial valued at $338,622;
e)the wife's superannuation valued at separation at $24,320.
The total value of the pools is therefore $792,942. The pools consist of:
a)Property of $430,000; and
b)Superannuation interests of $362,942.
With respect to the furniture, there are a number of lists attached to the affidavits of the parties. It is clear that some division of furniture has occurred to date. The husband says that that division was by agreement. The wife says that there was no agreement and she now seeks a greater proportion of the furniture and effects. However, she provides no basis on which to make a further order. There is no proper valuation of the furniture or effects. .
At trial, the husband agreed that he would return to the wife the following items:
a)a Ukrainian doll; and
b)the wife's toys.
It appears clear that there are a number of items that relate to the child such as the birth certificates, christening gifts and the like. I see no reason why these items ought not be shared equally between the parties and, if necessary, the husband can compile two lists each listing half of the items, and the wife can choose to receive all of the items on one of the lists. Further, each of the parties ought to both be entitled to obtain copies of whatever photographs or other documents are in the possession of the other relating to the child.
With respect to the balance of the furniture, I do not propose to make specific orders with respect to any in specie division as there is no basis for determining the division. There is no expert valuation evidence as to the value of the furniture. The costs of selling second hand furniture are often as great as its market value: however, the value to the parties is certainly greater. I am not satisfied that any particular orders with respect to furniture, in this case, are appropriate. In the circumstances I make no order with respect to furniture, save that the parties retain what is currently in their respective possession.
Asset by asset or global approach
Counsel for the husband argued that the property was more appropriately considered on an asset by asset approach rather than a global approach, arguing that the husband’s contributions to the home, and particularly superannuation ought to be treated separately. There are a number of cases considering this issue.
In Lenehan and Lenehan (1987) FLC ¶91-814 the Full court said:
The judgments of the High Court in Norbis v. Norbis (1986) FLC ¶91-712 demonstrate the very wide discretion which a trial Judge has in the approach that he may adopt under sec. 79. In particular the judgments in that case discuss the ``global'' and the ``asset by asset'' approaches, and demonstrate that this is largely a matter for the trial Judge to determine in the exercise of his discretion. However Norbis' case is not a carte blanche to adopt either view irrespective of the circumstances of the individual case. There are cases where one approach or the other is clearly appropriate and a failure by the trial Judge to adopt that approach may demonstrate error. We think this is one such case. His Honour's initial approach of treating the parties' contributions to the home as separate from their contributions to the other (largely business) assets was, we think, a proper approach in the circumstances.
In Zyk, RM and Zyk, D (1995) FLC ¶92-644 the Full Court held that a trial judge erred in not applying an asset by asset approach, saying:
The global approach enables the Court to assess the contributions aspect of the s. 79 exercise in an overall way by considering the parties' contributions to their property as a whole although factoring into that exercise the circumstance, if it be so, that they may have made varying contributions to the total property at trial or which formed part of the history of their property during the marriage. It is the generally preferred and the generally adopted approach. It enables a broad approach to be taken to the varying contributions of the parties over the years of their marriage and in particular it usually has the advantage of more easily dealing with and giving proper recognition to paras. (b) and (c) contributions. However, where the contributions to the components of the total property are disparate, caution needs to be exercised in this approach and the overall conclusion tested against the requirement that the orders be ``just and equitable'' . Lenehan is an example of a case where difficulties arose for that reason.
The asset by asset approach enables the Court to assess separately the parties' contributions to particular assets or groups of assets. It is the less preferred approach largely because it can at times be an artificial exercise and also because it can create difficulties in the proper evaluation of paras. (b) and (c) contributions. But there are a number of circumstances where it may be appropriate to do so, for example an inheritance received post separation, or where the financial relationship of the parties during the marriage was such that they treated some property as exclusively the property of one party to which the other party made no, at least no para. (a), contributions to it. It may be convenient in cases like that to treat that property separately rather than assess the overall contributions of the parties to the totality of their property.
However, the trial Judge has a discretion as to which course to adopt and does so having regard to what appears more suitable to the circumstances of the particular case.
In McMahon and McMahon (1995) FLC ¶92-606 the Full Court considered circumstances that may lead to an asset by asset approach being more appropriate, saying:
The short duration of and the unhappy nature of the marriage, coupled with the parties' strict division of assets and their method of dealing with them lent itself to an asset-by-asset approach, particularly where they had separately identified another group of assets as joint.
…
One of the reasons why their Honours expressed a preference for the global approach is because it is natural to assess the contribution by a spouse as a homemaker and parent, either by reference to the whole of the parties' property, or to some part of that property as distinct from individual assets.
However, this is not a case where the homemaker and parent contribution looms large and, having regard to the parties' agreement that it should be regarded as equal for the period of the marriage, this presented no obstacle to the adoption of the asset-by-asset approach in this case.
We consider that this is a case which falls conveniently into the class of cases referred to by Wilson and Dawson JJ in Norbis at FLC pp 75,173-75,174; CLR 532-3, when they said:-
“If the parties' interests in specific items of property differ or they have made differing contributions, it may be desirable to proceed upon an item by item basis in the division of property between them. In such a case, justice and equity may best be served by treating the items separately for the purpose of determining the proportions in which they are to be divided, particularly if the overall division is to be effected by the transfer or retention of interests in individual assets, as was convenient in this case.”
Other reported cases where an asset by asset approach has been preferred include: Prpic and Prpic (1995) FLC ¶92-574 (a personal injuries damages award received after separation was dealt with separately) and Davut and Ralf (1994) FLC ¶92-503 (entitlements to land in Cyprus inherited late in the marriage and built upon with the assistance of the eldest daughter).
Whilst the global approach is adopted in the vast majority of cases, without issue, there is a number of reported cases where the issue was specifically considered and the global approach was said to be preferred: see Coventry & Coventry and Smith (2004) FLC ¶93-184 (a nine year marriage with one child where the most substantial asset came from the husband’s parents); Dickson and Dickson (1999) FLC ¶92-843 (a 26 year marriage with significant contributions by the wife in respect of the family); and Farnell and Farnell (1996) FLC ¶92-681 (assets acquired from damages paid as a result of a personal injury claim)
In McLay and McLay (1996) FLC ¶92-667 the Full Court specifically considered a request to treat superannuation separately, saying:
As was pointed out as long ago as Hauff's case (1986) FLC ¶91-747 and in many cases since, broadly speaking, the accepted approach proceeds on the basis that superannuation is an aspect of the benefits of employment of the party of the marriage who is employed and each party is often taken to have made, during the course of their cohabitation and because of the way in which they have ordered their lives, equal contributions to the acquisition and development of that interest. This is an especially important matter in Australia because the superannuation thus accumulated is often paid as a lump sum at the end of the working life of that person and has been treated by the parties as a central part of saving for their support in retirement. This is a strong case of that because it was accumulated over many years, from what would have been a low base at the beginning of their marriage and when their financial circumstances made this a sacrifice for both, to the substantial figure it represented when the husband retired and when the parties were still living together.
In this case the husband had a substantial superannuation entitlement at the commencement of the relationship. There is no evidence as to the extent to which the current superannuation entitlement has grown by return on investments rather than contributions during the marriage or between separation and trial. The parties have a child and the wife has contributed substantially in the homemaker role. The parties did not attempt to keep their assets or resources separately (in the sense discussed in McMahon and McMahon (1995) FLC ¶92-606). I find that it is appropriate to treat ‘property’ globally.
It is appropriate in this case (having regard to the facts) to recognise the wife’s contributions with respect to the superannuation as falling within what was described in McLay as the ‘broadly … accepted approach’
In C & C [2005] FamCA 429 the Full Court set out that superannuation interests, whilst an asset or resource, may be a different species to that of ‘property’ as defined by section 4 of the Family Law Act, 1975. However, as C & C [2005] FamCA 429 makes clear, all of the usual s.79 steps should still be undertaken with respect to the superannuation.
Whether particular superannuation interests are property within the meaning of the s.4 definition of property is a difficult question, particularly having regard to the changes to superannuation law and Family Law Act, 1975 in recent years. The matter has not been considered in detail recently: As to the past cases and differing views see generally Crapp v Crapp (1979) FLC ¶90-615; Law-Smith and Senior (1989) FLC ¶92-050; Evans and Public Trustee of WA (1991) FLC ¶92-223; King v Kemp (1996) FLC ¶92-673; and Stay v Stay (1997) FLC ¶92-751.
In this case the parties have not placed enough information before me to satisfy me that the interests are within the meaning of ‘property’ as defined under s.4 of the Act. As such, I do not find that the superannuation interests in this case are ‘property’ for the purpose of s.79 of the Act. Section 90ms provides for power to make orders in relation to superannuation interests, but only when making property orders under s.79.
However, superannuation of the parties must be taken into account.
In C v C the court explained that, on a practical level:
61.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 s 79, whether or not a splitting order is sought in those proceedings. This approach could be adopted where the parties agree that it should be adopted, or where the Court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the Court to conclude that this would be an appropriate approach.
As a result it appears that all of the consideration relevant to ‘property’ will have to be undertaken with respect to superannuation in order to give it proper consideration.
However, in dealing with superannuation in this case it is appropriate (having regard to the factors set out above and the lack of specific valuation evidence about the superannuation interests) to deal with this class of asset ‘globally’, that is without separately dealing with the superannuation interests of the husband and wife. However, this is not a case where, in light of C & C, the superannuation interests ought to be treated globally with ‘property’.
Contributions
Section 79(4) of the Family Law Act requires consideration of the contributions of the parties. The relevant parts of section 79(4) are as follows:
79(4) In considering what order (if any) should be made under this section in proceedings with respect to any property of the parties to a marriage or either of them, the court shall take into account –
(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;
(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;
(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.
It is relevant when considering the various contributions to also consider the times when those contributions are made. For example see the discussion in Pierce & Pierce (1999) FLC ¶92-844 where the court was considering the weight to be given to various contributions having regard to the time of the contributions, and the importance of those contributions.
The parties cohabitated for a period of around five and a half years. Of this period, they were married for a period of nearly four years prior to separation.
The initial contributions of the parties are set out in paragraphs [22] and [23] above.
With respect to the time during the relationship, I note that the husband continued to earn an income in excess of $130,000 per annum. The wife earned an income of up to $70,000 per annum at one stage early in the relationship but, after N was born, earned little, save for a period of nine months when the wife earned somewhere between $16,000 and $30,000 (depending upon the evidence of which party would be accepted).
The wife ceased full time employment to care for N. Her contributions as a homemaker are clearly significant.
I am mindful of the fact that the wife gave evidence that had it not been for the large capital contribution of the husband at the commencement of the relationship, the parties would not have been able to buy the matrimonial home (although given their income amounts they would certainly have been likely to have bought a more modest home whilst together, even without the cash contribution of the husband).
A large part of the parties' current asset pool was generated as a result of significant increases in the value of the matrimonial home. The superannuation of the husband was also substantial at the start of the relationship.
The parties both contributed substantially during the relationship. Whilst the husband’s financial contributions through earnings were clearly greater than that of the wife, her contributions as a homemaker and parent were greater than the husband. I find that during the course of the relationship their contributions to property were substantially equal.
The wife and child, after separation, established a new household. The husband has paid child support and continued to contribute to his superannuation fund. The husband has had the use of the matrimonial home, although has contributed to upkeep and the mortgage.
In the circumstances of this case I assess the contributions of the parties to the property pool 57.5:42.5 in favour of the husband.
I must also carefully consider the superannuation interests of the parties, which are not ‘property’ within s.79.
The direct financial contributions of the parties to their respective superannuation interests, is this case, were made solely by the respective parties. The matters bearing upon the other forms of contribution relevant under s.79 are set out in paragraphs 47] to [55] above. Having regard to the relevant factors, I assess the contributions of the parties to superannuation at 70:30 in favour of the husband.
Section 79(4)(d) to (g)
I now turn to the third step in the process of apportioning the assets available for distribution between the parties.
The effect of any proposed order upon the earning capacity of either party to the marriage: s.79(4)(d)
The orders that I propose making in this matter will not affect the earning capacity of either party to these proceedings.
The matters referred to in sub-section 75(2) so far as they are relevant: s.79(4)(e)
a) The age and state of health of each of the parties
The husband is 44 and the wife 35 years of age. Both are in good health.
b) The income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
Both parties present as impressive and capable people. I have no doubt that they would be able to obtain and maintain employment in the future.
The wife says that she desires to continue in the role of homemaker and primary carer and not return to work during hours that N would not be at kindergarten or school. N does not commence his preparatory year of school until 2007, and grade 1 in 2008.
The wife says that she has been unable to find any part-time work that fits in with the kindergarten hours for N. It transpired in evidence that although the wife had not registered with an employment agency, she had pursued two of her former employers about the possibility of part-time work, both by telephone call and e-mail. One of the e‑mails was in accordance with the view of the husband (that the wife does not wish to seek employment until after the litigation). That e‑mail provides (emphasis added):
Hello R,
How are you? Hope all is going well for you and C&A. I have to admit I still miss you all!!
I’m writing to let you know that I am meeting with [MH] on Thursday morning to discuss work options for the future. With your permission I would like to list you as a referee.
However, if you think there may be any opportunity in the upcoming months to return to C&A I would love to know! I’m not in an immediate rush to resume work as I still have some personal matters to settle.
…
The wife did engage in part time work after N was born, before separation, earning $16,000 in nine months (on her evidence which I prefer on this point).
I find that the wife is likely to return to part time work after this litigation has finished and that it is reasonable to expect her to do so.
It appears that the wife (but for N’s needs) still has an income and earning capacity of around $70,000 per annum and the husband around $130,000 per annum together with a car allowance of some degree of value (even though it cannot be converted to cash, as this allowance saves him meeting car expenses). It is not suggested that the wife's earning capacity in the advertising industry has been significantly diminished.
I must also take into account the differential in superannuation interests presently held by the parties, and the respective contributions to the superannuation pool set out above. The result of the contributions finds above is that there is some disparity in the assets and financial resources of the parties
c) Whether either party has the care or control of a child of the marriage who has not obtained the age of 18 years
The bulk of the responsibility for the day to day care of the child of the marriage will, in future, be borne by the wife.
There is no doubt that the husband is in a stronger financial position than the wife at present, not only as to income but liberty to engage in income earning, as a result of the care of the child of the parties.
The care of the child of the parties must be considered a significant factor in this case which restricts the wife’s ability to exercise her full earning capacity, and consequential ability to accumulate superannuation in the future.
d) Commitments of each of the parties that are necessary to enable the parties to support himself or herself or a child or another person that the party has a duty to maintain.
Neither of the parties has commitments other than those necessary to support himself or herself and their child.
e) The responsibilities of either party to support any other person;
Neither party has a responsibility to support any one other than each other (to the extent such maintenance may be required) and their child (as discussed above).
f) The eligibility of either party for a pension, allowance or benefit.
I do not regard this factor is of significance in this case. The husband’s earnings are never likely to make him eligible for a pension or benefit. To the extent that the wife relies, in part, upon a pension this is income tested and as a result of her care for the child.
g) Where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
I accept the account of the wife expenses as set out in her material, subject to the matters discussed in paragraph [96] and following, below.
h) The extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
j) Re Glew; Glew v Harrowell of Hunt & Hunt Lawyers
Re Tresidder; Tresidder v Harrowell of Hunt & Hunt Lawyers [2003] FCA 73 and 198 ALR 331 The extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
k) The duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
The question of spousal maintenance is considered below.
l) The need to protect a party who wishes to continue that party’s role as a parent;
The wife says that she does not wish to return to full time work so that she may care for the child. It is clear that the wife has worked part time (for some periods) since the child was born. Once the child was attending primary school it appears likely to me that the wife would have returned to work.
m) If either party is cohabiting with another person – the financial circumstances relating to the cohabitation;
On the evidence before me neither party’s financial circumstances appears to be affected as a result of cohabiting with another person nor is it likely in the foreseeable future that this situation will change.
na) 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;
On any view, the child support provided by the husband in respect of J to date has been reasonable. The current assessment rate is $306.00 per week. The husband is meeting the reasonable direct financial costs of caring for the chid of the parties.
There is nothing in the evidence to indicate that the husband will not continue to pay the proper amount of child support as assessed by the Agency in respect of whatever level of salary he receives. Having regard to the husband’s salary this contribution will be significant.
o) Any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
There is no other fact or circumstance in this case that is significant.
Any other order made under this Act affecting a party to the marriage or a child of the marriage: s.79(4)(f)
There are other orders made under the Family Law Act 1975 which affect a party or the child which need to be taken into account. The parenting orders made in this matter result in the child continuing to live with the wife. Spousal maintenance issues are dealt with below.
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: Section 79(4)(g)
These provisions have been considered in relation to section 75(2)(na) above.
Conclusions
In the circumstances of this case I find that an adjustment of 12.5% in favour of the wife is appropriate both with respect to superannuation and property.
Is the result just and equitable?
After adjustment in favour of the wife, the property would require a split of 55:45 in favour of the wife of the property of $430,000.00. Adjustment of the superannuation would result in a split of 57.5:42.5 in favour of the husband with respect to the superannuation of $362,942.
If superannuation and presently available property are split in the same proportion the following overall result ensues:
Asset Type Pool Husband Wife Available Assets $430,000 $193,500 $236,500 Superannuation $362,942 $208,692 $154,250 Total $792,942 $402,192 $390,750
The wife currently holds her car (valued at $13,000). It is appropriate that she receive the Coles Myer shares ($6,000) and a payment of $217,500 from the husband, and failing payment that the home be sold.
In addition a splitting order is necessary splitting the husband’s interest such that the wife receives $129,930 in addition to her present superannuation fund of $24,320.
I find that this produces a just and equitable result as it provides for both parties to share in presently available assets and superannuation in appropriate proportions. Both will have present assets to provide toward a home and not insignificant superannuation for the future.
The splitting order should generally take effect from the date of the valuation. In W & W [2005] FamCA 430 where Bryant CJ, Finn, Coleman, Warnick and O’Ryan JJ said:
62. As we have indicated above, where a splitting order is made by a court, the order should include an operative date. … Having considered the matter we are of the view, at least as presently advised, that the operative date or time should as a general rule be the date of valuation of the interest for the reason that the member’s interest may continue to grow from the date of valuation to the date the orders are made.
In this case the value of the fund was an agreed amount advised from the bar table. In the absence of an agreed operative date, but in light of an agreement as to the value of the fund as at the date of the trial, it is therefore appropriate that the operative date be the date of the trial.
I find that the orders I propose are just and equitable in the circumstances of this case.
Spousal maintenance
In this case the wife also seeks spousal maintenance.
Pursuant to s.74 of the Family Law Act 1975 the Court may make such order as it considers proper for the provision of maintenance for the wife in accordance with Part 8 of the Act. Section 72 sets out:
72. A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether -
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason,
having regard to any relevant matter referred to in sub-section 75(2) .
In this case the wife is not working at present. She is able to work part time. Based upon her previous income she earned when working part time in the past (which I accept was around $16,000 for nine months) I find that she could be reasonably expected to earn around $21,000 per year.
The wife says that her weekly expenses are around $750.00 per week. However she claimed $100.00 per week for gifts and $100.00 per week for clothing. She also says she spends $185.00 per week on food for her and N. I do not accept that these are reasonable figures. However the wife has made no allowance for rent. She says her current rent is $275.00 per week.
I find that the wife’s reasonable needs are such as to require spousal maintenance to continue until N is in school in 2007. She will need a reasonable amount of time to find additional work after N starts school. I therefore find that it is appropriate to order that spousal maintenance continue for around two years. Thereafter the wife has sufficient capacity to meet her reasonable needs and living expenses and any additional support that N may need over the child support assessment.
A review of the husband’s financial circumstances (including his child support obligations) shows that he has the capacity to meet those financial needs of the wife.
I note that the effect of the property division will be to provide a lump sum to the wife. However she is not such a strong position as to show that no maintenance would be appropriate as it would leave her drawing on capital over the next couple of years.
I therefore find that this is a case where maintenance ought to continue at its present rate until 30 June 2007.
I will therefore make orders to effect my findings that:
a)The husband to pay the wife $217,500.00 within 28 days in exchange for a transfer of the home, and failing payment that the home be sold;
b)The parties to retain the cars and other chattels in their possession (save for the keepsakes with respect to the child which should be shared);
c)The wife to retain the shares;
d)The husband to split his superannuation in favour of the wife in the sum of $129,930; and
e)The wife to retain her superannuation; and
f)Spousal maintenance order to continue until June 2007.
I certify that the preceding one hundred and one (101) paragraphs are a true copy of the reasons for judgment of Riethmuller FM
Associate:
Date:
0
3
1