Rankin & Rankin [2017] FamCAFC 29 (2 March 2017)

 

1. This was an appeal relating to order made in relation to property, lawyers costs, spousal maintenance, child support, school expenses and superannuation.
2. The issues included:

• where personal responsibility for debts are conceded and excluded from the table of assets and liabilities
• order for payment to the lawyers prior to the property distribution (and whether this was in fact a costs order being made without having proper regard to matters under s 117 or whether it was a lump sum adjustment under s 75(2)
• whether the trial judge erred in making a spousal maintenance order because she failed to take into account the other party’s debts and other financial obligations
• Whether the primary judge properly made orders for the husband to pay child support and school expenses
• Where s 125 of the Child Support (Assessment) Act 1989 (Cth), a mandatory provision, was not complied with
• Where the primary judge made a superannuation splitting order under s 90MT of the Family Law Act at the invitation of the parties

Legislation

Federal Proceedings (Costs) Act 1981 (Cth).

Child Support (Assessment) Act 1989 (Cth) ss 117, 125

Family Law Act 1975 (Cth) ss 72(1), 75(2), 79, 117

Family Law Rules 2004 (Cth) r 19.04

Cases

Beklar & Beklar [2013] FamCA 327

Chorn & Hopkins [2004] FamCA 633; (2004) FLC 93-204

Clauson & Clauson (1995) FLC 92-595

Harris v Caladine [1991] HCA 9; (1991) 172 CLR 84

Lee Steere & Lee Steere (1985) FLC 91-626

Metwally v University of Wollongong [1985] HCA 28; (1985) 60 ALR 68

Russo & Wylie (2016) FLC 93-747

Spano & Spano (1979) FLC 90-707

Teal & Teal [2010] FamCAFC 120

Vass v Vass [2015] FamCAFC 51; (2015) 53 Fam LR 373

Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 200 ALR 447

Appeal: Heard in Melbourne on 13 October 2016 and delivered in Sydney on 2 March 2017

JUDGMENT OF: May, Thackray & Aldridge JJ

LOWER COURT Judgment: Family Court of Australia on 29 February 2016

ORDERS

(1) The appeal against Orders 1(a), 1(b)(ii)C, 14 and 15 made by Johns J on 29 February 2016 be allowed.

(2) Orders 1(b)(ii)C, 14 and 15 be set aside.

(3) Order 1(a) be amended by deleting the words “wife’s solicitor in payment of her legal costs and disbursements” and inserting the word “wife” in lieu.

(4) The applications for spousal maintenance and child support are remitted to the Family Court of Australia for rehearing by a judge other than Johns J.

(5) The appeal otherwise be dismissed.

(6) The Application in an Appeal filed on 23 September 2016 be dismissed.

(7) There be no order as to costs, costs certificates were issued under the Federal Proceedings (Costs) Act 1981 (Cth).

INTRODUCTION

1. The Court of first instance had made property orders to effect that there was to be a payment of $170,000 to the wife’s solicitors, with the balance of the parties’ net property divided between them so that the wife received 70 per cent and the husband 30 per cent. From his share the husband was to pay a number of debts as well as $65,000 to the wife as capitalised spousal maintenance. By agreement, a superannuation splitting order was made, splitting the parties’ superannuation equally between them.
2. Her Honour also made orders under the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”), the effect of which was that the husband’s child support was to be assessed on the basis that his income was $243,000 per annum. There was a further order that, in addition to this child support, the husband pay all the tuition fees, extracurricular expenses, and for uniforms and equipment associated with the schooling of the parties’ three children.
3. The non-superannuation assets available for distribution totalled $803,611.41. Her Honour found that as the husband had accepted that he should be responsible for the unpaid school fees and the child support, they should not be set off against the assets.
4. The husband appealed each of these orders including the order as to superannuation.

BACKGROUND

1. At the time of the hearing the wife was 46 years old. She migrated to Australia in November 1999. Her qualifications are not recognised in Australia and apart from some brief periods of basic employment she has not worked since.
2. The husband was 48 years old at the time of the hearing. He migrated to Australia in 1991 and works as a professional.
3. The parties commenced cohabitation when the wife arrived in Australia. They married in March 2000. The wife asserted that they separated in July 2010 whilst the husband asserted that it was in July 2013. The primary judge did not resolve that dispute.
4. The parties had three children who were aged 12, 11 and six at the time of the hearing. They live with the wife.

THE APPEAL

1. The Amended Notice of Appeal contained nine grounds but they were grouped into five topics.
2. By an Application in an Appeal filed 23 September 2016 the husband sought to adduce further evidence on the appeal. The only evidence that was pressed related to changes to the parties’ superannuation funds.  The Appeal Court dealt with that application when they deal with the challenge to the superannuation orders.

Was the overall result just and equitable? (Grounds 1, 2 and 5)

1. The husband’s submitted that the orders was so unreasonable or plainly unjust that the appeal court should conclude her Honour failed to properly exercise the discretion.
2. The husband submitted that his property list compared with the table relied upon by her Honour had three errors:

1. The primary judge failed to consider the cumulative effect of the orders.
2. The primary judge failed to take into account that the husband’s legal fees, which were owed to the solicitors who appeared for him at the hearing, were $130,000.
3. The 70/30 division was not just and equitable because it gave excessive weight to the s 75(2) factors in favour of the wife and because the effect of the orders on the husband’s net income was not considered.

1. The husband submits that the effect of the orders was unjust and unreasonable, as the wife received $517,554.44 or 95.86 per cent of the pool and the husband only $22,359.72 or 4.14 per cent.
2. The Appellate Court considered that there were a number of difficulties with the the husband’s submissions.
3. The husband’s table is somewhat beguiling because it includes three debts, which the husband accepted were his responsibility at the hearing and for which he alone should be liable. Counsel for the husband accepted that the debts were the husband’s responsibility, but nonetheless submitted that the unpaid school fees and child support should have been included as liabilities in the table of assets available for distribution. If the debts had been included as liabilities, the amount of assets available for distribution would have been reduced by $46,644.92. If no relevant adjustment was made under s 75(2)(o) of the Family Law Act 1975 (Cth) (“the Family Law Act”) to allow for these debts being solely the husband’s responsibility, this would see the wife bearing 70 per cent of these liabilities, thus rendering the husband’s concession that he should pay these debts nugatory.
4. The Appeal Court said that “The same might be said of the husband’s obligation to meet the order to pay Belleli King, his previous lawyers, their outstanding fees.”
5. The Appeal Court considered that they were correctly removed from the table of assets and liabilities available for division between the parties.
6. The husband also submitted that the obligation to pay $130,000 to his current lawyers was not taken into account and if it had, it would have the effect of leaving the husband unable to pay his debts from the property he was to receive pursuant to the orders.
7. It was submitted by the husband’s counsel that if the primary judge had decided not to include the husband’s debts in the property pool, her Honour should then have taken them into account under s 75(2) of the Family Law Act, when considering what adjustment, if any, should have been made to the parties’ contributions based entitlements. It is implicit in this submission that had her Honour taken this course, she would have arrived at an adjustment in favour of the wife of less than the 20 per cent she determined was appropriate.
8. However, such an approach would have had the effect of the wife contributing to the husband’s debts. The primary judge found that the husband has “effectively executed self-help with respect to his legal fees” and that in doing so had “disregarded” the court orders to pay school fees and his obligations under the Assessment Act (at [138]). And the Court did not consider that the wife had any obligation to contribute to the husband’s legal fees.
9. The husband was also critical of the size of the adjustment of 20 per cent in favour of the wife. In order to put this criticism into context, the appeal court turned to her decision in relation to the s 75(2) adjustment.
10. The primary judge first adopted the submissions of the parties that contributions were equal (at [126]). Secondly, she held there should be a “cash adjustment in favour of the wife with respect to her outstanding legal costs” (at [140]). Thirdly, in determining the s 75(2) adjustment, her Honour proceeded on the basis that the “pool” against which the adjustment should be made was worth $633,000 – in other words, the $170,000 for legal fees was deducted (at [165]). Finally, her Honour held that an adjustment of 20 per cent against this reduced pool was appropriate.
11. As her Honour pointed out at [165] the value of the adjustment was $126,600 which “represents a differential between the parties of approximately $253,200, an amount earned by the husband in approximately one year”. The adjustment arose from the wife’s limited economic capacity and her care of the three children with “little support from the husband with respect to the day-to-day responsibilities for the care of the children” (at [154]).
12. The Appeal Court said, “It is sufficient to say that we see no error in the adjustment.”

1. The Husband’s counsel also submitted that the primary judge erred in her consideration of whether the orders were just and equitable because her Honour made no reference to the fact that the husband would only receive $22,539.72.
2. Reference was made to Teal & Teal [2010] FamCAFC 120 at [70], where the Full Court said:

By implication however s 79(2) requires if the Court is to make an order under s 79(1) altering the interests of the parties to the marriage in property, such an order must be just and equitable. This legislative imperative is often described as the requirement that a judicial officer “stand back” and look at the reality of the percentage division at which she or he has arrived. That requirement requires consideration of the actual assets to be retained by each party, and may include consideration of the effect when one party is to retain the greater proportion of his or her entitlement in superannuation of the nature, form and characteristics of the superannuation. 

(Emphasis added)

1. The Appeal Court said the premise for including the liabilities had not been established and they did not accept the husband’s assertions as to how the pool of non-superannuation assets ought to have been constituted.
2. The Appeal Court also considered that her Honour had engaged in the “standing back” step.

165. Having regard to those circumstances I am satisfied that an adjustment of 20 per cent in favour of the wife is appropriate. Based on a pool of $633,000 that is an adjustment in her favour of $126,600. This represents a differential between the parties of approximately $253,200, an amount earned by the husband in approximately one year. However, in circumstances where I will make provision for lump sum spousal maintenance for the wife and child support payable at a level appropriate to the husband’s current income, I am satisfied that an adjustment of that amount is just and equitable.

1. The Court found that there was no error identified in the primary judge’s approach to the property settlement and these appeal grounds did not succeed.

Should an order have been made for the payment of $170,000 to the wife’s lawyers prior to the division of the parties’ property? (Grounds 3 and 4)

1. The orders included that the net proceeds of sale were to be applied firstly $170,000 to the wife’s solicitors and the balance 70 percent to the wife.
2. The husband submitted that the payment to the wife’s lawyers was a costs order that could only be made under s 117 of the Family Law Act and that the order was therefore fatally flawed because the primary judge did not have regard to s 117(2A). In doing so he pointed to the form of the order and the primary judge’s finding that “the sum of $170,000 should be paid to the wife’s solicitor on account of her legal costs”.
3. In Lee Steere & Lee Steere (1985) FLC 91-626 the Full Court said at 80,076 – 80,077:

In a realistic assessment of the financial resources of the parties, it is proper to include any legal costs each of the parties may have to pay, subject of course to any reimbursements by way of an order for costs. This should not be seen as a back-door method of awarding costs to a party who has been refused the whole or part of his/her costs. It is one thing to take account of costs in calculating the net assets which are available to each party for the purpose of determining their financial resources. It is quite another thing to award a party a specific amount for the purpose of meeting certain expenditure such as costs. The latter can only be done on an application under sec 117, the former is part of the normal enquiry under sec 75(2).

1. The Appeal Court said at paragraph 50, “…if her Honour did intend to award a specific sum for the payment of costs, she was in error. Such a course could only be taken under s 117 of the Family Law Act. Her Honour did not purport to act under that section and did not take into account the mandatory s 117(2A) considerations.
2. After her Honour found that the parties’ contributions to their assets and welfare of the family up to the time of the hearing were equal she turned to the issue of the husband’s payment of legal fees. The wife’s case was that the husband had spent $230,000 of funds that would have otherwise been divisible between the parties. She sought an order that her solicitors be paid the same amount as the husband had paid his lawyers or, alternatively, the amount owing to her solicitors at the end of the hearing, whichever was the lesser. The estimate of those costs, taken from the wife’s Costs Statement, was $178,520.90. The wife limited her claim to $170,000.
3. The husband was cross-examined as to the source of funds from which he paid his legal fees. He conceded that the credit card debts with respect to those payments were repaid from his income.
4. It was submitted on behalf of the wife that but for his payment of legal costs those funds would be available to the parties for division in these proceedings. Accordingly, it is on this basis that it is submitted that there should be an adjustment for those payments in favour of the wife.
5. The primary judge referred to Chorn & Hopkins [2004] FamCA 633; (2004) FLC 93-204 at 79,322 – 79,323:

55. This decision appears to confirm the principle that where the payment of legal costs can be regarded as a premature distribution of funds (in which both parties have an interest), it is appropriate to add back those costs as a notional asset. It also confirms the principle that where funds have been borrowed to pay legal fees, and such liability is still outstanding, neither the payment of the fees nor the liability should be taken into account. The decision also supports the proposition that where it is determined that a payment of legal fees should be taken into account as a notional asset, any outstanding liability in respect of those fees should also be taken into account.

56. In summary, we consider that the above mentioned decisions of the Full Court establish that, while the treatment of funds used to pay legal costs remains ultimately a matter for the discretion of the trial Judge, in determining how to exercise that discretion, regard should be had to the source of the funds.

57. If the funds used existed at separation, and are such that both parties can be seen as having an interest in them (on account, for example, of contributions), then such funds should be added back as a notional asset of the party, who has had the benefit of them.

58. If funds used to pay legal fees have been generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be added back as a notional asset; nor would any borrowing undertaken by a party post-separation to pay legal fees be taken into account as a liability in the calculation of the net property of the parties. Funds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement may need to be looked at differently from other post-separation income or acquisitions.

59.Outstanding legal fees themselves are generally not taken into account as a liability.

60.If in the exercise of the discretion, it is determined that legal fees already paid should be taken into account as a notional asset, then normally any liability associated with the acquisition of the monies used to pay the legal fees should also be taken into account.

1. In view of these passages, the primary judge concluded:

136. There is no dispute that the funds used by the husband to pay his legal fees have been generated by him after separation from his employment as a [professional]. It is submitted on behalf of the wife that she has made contributions to the development of the husband’s career; she has supported him in the early years of his practice when he was establishing himself as a [professional]. Otherwise, it is submitted on her behalf that she has been the primary care-giver to the parties’ children and principally responsible for maintaining the home; in this way she provided invaluable support to the husband in the progression of his career and development of his capacity to earn income. I accept those submissions.

137.At the time the husband earned the income applied to the payment of his legal fees, he had an obligation to support the wife and the children of the marriage. That this is so is evident from the orders dated 4 November 2013 which required him to meet mortgage payments and outgoings with respect to the properties in Western Australia and [Suburb C].

138.As noted earlier, the husband did not service the mortgage liabilities on the parties’ properties, thereby increasing the debt payable upon settlement of the sales of those properties. Further he substantially reduced his child support liability by providing an estimate of his income to the Child Support Registrar which substantially reduced his obligation to pay child support. Income which otherwise would have been available to support the wife and the children was applied to the payment of his legal fees. The husband has effectively executed self-help with respect to his legal costs and in doing so has disregarded his obligations to meet liabilities pursuant to orders of this Court and in accordance with the Child Support (Assessment) Act 1989 (Cth).

139 Such matters may be taken into account pursuant to the provisions of s. 75(2)(o) of the Family Law Act. However, in my view a percentage adjustment will not achieve justice and equity in the overall context of this case in circumstances where:-

▪ the asset pool excluding superannuation is only $803,000;

▪ the husband has paid $230,000 to his lawyers in preference to his obligations to the wife and the children; and

▪ such payment has been made from income which he has been able to earn, in part, through the contributions of the wife.

140 Having regard to those circumstances, I am satisfied that justice and equity require that there be a cash adjustment in favour of the wife with respect to her outstanding legal costs prior to the disbursement of the sale proceeds rather than a percentage adjustment in her favour.

…

167. Further I am satisfied for the reasons set out herein that prior to disbursement of the sale proceeds the sum of $170,000 should be paid to the wife’s solicitor on account of her legal costs.

1. The husband did not challenge the primary judge’s finding at [138] that “income which otherwise would have been available to support the wife and the children was applied to the payment of his legal fees”, contrary to orders of the court and the provisions of the Assessment Act. Thus Appeal Court considered that the matter was not simply about the husband dealing with his post separation income as he saw fit.
2. The primary judge turned to the issue as to how to take into account the husband’s use of these funds.

1. As is apparent from the above passages, her Honour first looked at “adding back” the sum of $230,000 to the assets to be divided. That would have been an entirely permissible course: Vass v Vass [2015] FamCAFC 51; (2015) 53 Fam LR 373. This approach was not adopted. (And had she “added back” the sum of $230,000 to the property pool, the amount available for distribution from non superannuation assets would have been $1,033,611.41 ($803,611.41 + $230,000) and assuming the same 70/30 division, the wife would have received $723,528 rather than $612,782 under the primary judge’s orders).
2. Her Honour then turned to s 75(2)(o) of the Family Law Act and found that a percentage adjustment under that section would not achieve justice and equity. (However the full Court of the Family Court did not agree and said that such an adjustment would do so if correctly calculated).
3. Her Honour decided to make a lump sum adjustment under s 75(2)(o).

1. The Court considered that the trial judge’s discussion had all the hallmarks of the determination of property orders and not a costs order.
2. The appeal court considered that the form of the order was potentially misleading and therefore varied the order such that it provides for a payment to the wife and not to her solicitors.

Post Separation Income

1. The husband also challenged the order on the ground that the primary judge did not properly take into account that the $230,000 was paid from post-separation income which, it was submitted, he was entitled to spend as he saw fit. In support of this submission, the husband referred to Beklar & Beklar [2013] FamCA 327. In that case the primary judge “added back” into the property pool payments made to a party’s lawyer, but, recognising that the payments had been made from postseparation income, the amounts added back were reduced by 50 per cent.
2. That case is an example of the flexibility of approach required in complex financial cases where the orders must be adapted to the particular facts of the matter before the court. It is not, and did not purport to be, a statement of general principle, as counsel for the husband properly conceded.
3. In the unique circumstances of this case and having regard to the husband’s evidence and her Honour’s unchallenged findings, the primary judge could have followed such a course. However, the relevant enquiry is whether the primary judge was in error in taking into account the whole of the $230,000. It is apparent from what the Appeal Court  already said that they do not consider that there was such an error. In particular, the findings made by the primary judge at [136] – [138], which were unchallenged, support her approach.
4. Therefore, these grounds were not been established.

Was the order for the payment of capitalised spousal maintenance properly made? (Grounds 6 and 7)

1. The husband submitted that the primary judge erred by not properly considering whether the husband was reasonably able to meet an order for spousal maintenance.
2. The primary judge ordered that the husband pay the wife spousal maintenance in the form of a lump sum of $65,000.
3. Her Honour noted that the wife’s weekly expenses of $1,542 had not been challenged, and that the wife’s income consisted solely of Centrelink benefits and child support.  The wife’s unmet weekly expenses were found to be $500.
4. The husband had an income of $5,000 per week. The total of all expenses claimed by him in Part G of his Financial Statement was $4,357 per week. The expenses claimed by the husband include an allowance of $1,004 per week in respect of the mortgages for the Western Australian properties and 225 per week for rates and unit levies, however, those properties have since been sold. Therefore, he now has a surplus of income over expenses of approximately $1,872 per week and the primary judge found that the husband had the capacity to meet an order for spousal maintenance.
5. The primary judge had regard to the wife’s need to retrain and her responsibilities to the care of the parties’ children and considered it appropriate that there be an order for spousal maintenance. That order was limited in time, recognising that the wife anticipates that she will be able to resume employment within three years.
6. Having regard to the husband’s non-compliance with previous orders that he pay the mortgage expenses for the former matrimonial home and the investment properties that the primary judge considered it was appropriate that the wife’s maintenance be paid as a lump sum, and given that she will be paid maintenance in advance the court was satisfied that it is appropriate that there be a discount for the lump sum amount as the wife will have the benefit of being paid maintenance in advance in the sum of $65,000 (rather than $500 x 52 x 3 = $78,000).
7. The primary judge also made an order that the husband’s child support was to be assessed on the basis that his income was $243,000 per annum, leading to a child support assessment of $894 per week.
8. The primary judge also ordered the husband to pay the children’s private school fees, extra-curricular expenses, and costs for uniforms and associated equipment. The husband conceded that this order should be made, but neither party adduced any evidence as to the quantum of all the expenses. The husband did accept that the cost of the private school the two older children were attending was between $10,000 and $12,000 per annum per child, but it was unclear whether this concession related only to the fees or included all of the other expenses. In any event, the primary judge did not refer to, or take into account, the increased child support or the obligation to pay the school expenses when considering the ability of the husband to meet a recurring spousal maintenance order.
9. After the husband met his liability to pay outstanding child support, school fees and his former solicitors and made the ordered payments to the wife (including maintenance of $65,000), he would be left with $22,359.72.
10. However, the evidence also disclosed that the husband owed a further $130,000 to his current lawyers. That obligation was not taken into account by the primary judge.
11. Section 72(1) of the Family Law Act provides that 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”, in the circumstances otherwise set out in the section.
12. In Spano & Spano (1979) FLC 90-707 Evatt CJ said at 78,766 (Powley SJ and Lusink J agreeing):

One ought to mention too that the court has always taken the view that a lump sum order should only be awarded if there are funds available to meet such an order. In the present case there is no such difficulty. There are clearly funds available but it should not be taken that the fact that there are funds available would itself alone justify the making of an order. It is only a condition precedent and not necessarily itself a justification for such an order.

1. In Clauson & Clauson (1995) FLC 92-595 at 81,907 the Full Court pointed out that the result of any s 79 order must be taken into account because it “defines the other party’s capacity to meet any order”.
2. The Appeal Court found that the primary judge erred in finding that the husband had the capacity to meet the order for spousal maintenance, because she failed to take into account the increased child support obligation, the expenses associated with the children’s school and the husband’s debts, including the debt owed to his then lawyers.
3. It is correct to say that the primary judge did not receive any submissions from the husband on the impact of his debt to L. Y. Tonge on any aspect of the wife’s claims. It was argued that this precluded the husband from asserting on appeal that the primary judge erred in failing to take it into account (Metwally v University of Wollongong [1985] HCA 28; (1985) 60 ALR 68; Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 200 ALR 447). However, the husband’s evidence of this debt was not disputed, and it is difficult to see what further evidence could be given on the point. The wife did not suggest any. Thus, we can see no impediment to the husband advancing this argument on appeal (Whisprun at [51]). In any event, the ground would succeed even if the husband was limited to submissions as to the failure to take into account the other matters raised by him.
4. The order for the payment of spousal maintenance was set aside and remitted for rehearing.

Were the orders for the payment of child support and school expenses properly made? (Ground 8)

1. The primary judge made the following orders:

1. Pursuant to s 117 of the Child Support (Assessment) Act 1989 (Cth) there be a departure from the administrative assessment of child support payable by the husband to the wife for the children for the purposes of calculating the child support obligation of the husband the annual child support income for him shall be fixed as follows:

1. For the period commencing 1 January 2016 to 31 December 2016 the sum of $243,000;
2. For the period 1 January 2017 to 31 December 2017 the sum of $243,000 plus CPI.

1. Pursuant to s 124 of the Child Support (Assessment) Act 1989 (Cth), the husband pay all tuition fees, extracurricular expenses, uniforms and equipment consequential to attendance by the children to the schools attended by them as at the date of hearing.

1. The husband submitted that his child support income should be assessed his post tax income because all periodic and non-periodic child support (including school fees and related expenses) would be paid by the husband out of his after tax income. A gross income of $243,000 per annum is approximately $155,580 after tax at present tax rates. Pursuant to the provisions of the CSA Act it is estimated that the husband’s child support income would result in an assessment that he pay periodic child support of $894 per week or $46,488 per annum. This is a significant proportion of the husband’s after tax income.
2. Each party criticised the other for not adducing evidence as to the costs of the expenses, the appeal court could not see how the primary judge could be satisfied of the ability of the husband to meet the orders in the absence of this evidence.
3. At the hearing of the appeal, the Court raised s 125 of the Assessment Act, noting that it had not been complied with and querying whether that noncompliance vitiated the orders. Whilst this was not the subject of a ground of appeal, counsel for the wife properly accepted that the mandatory nature of the section could not be ignored and the orders were set aside and remitted for rehearing.

Should the primary judge have made a different superannuation order? (Ground 9)

1. The primary judge, at the invitation of the parties, made superannuation orders on the terms requested by the parties.  However, the husband appealed the orders “in circumstances of significant delay, the making of orders which are just and equitable within the meaning of s 79(2) required that the learned primary judge to [sic] divide the parties’ superannuation interests by reference to a percentage of the parties’ total superannuation entitlements at the date of the judgment”.
2. The husband sought to adduce evidence of changes in the parties’ superannuation entitlements to show that the parties’ interests had not increased in value to the same extent, thus supporting the submission that the primary judge was in error in making the consent order.
3. A person’s interest in a superannuation fund may change over time as the underlying assets vary in value from time to time and produce varying income. The Appellate Court considered that such an easily anticipated variation would lead to a consent order splitting superannuation interests being set aside on appeal is entirely obscure.  Particularly:

1. when judgment was only approximately 2 months after the hearing;
2. there is no over-arching obligation on the court to achieve a just and equitable outcome as to superannuation contrary to the parties’ wishes (see Russo & Wylie (2016) FLC 93-747 at [54])
3. where the primary judge merely acceded to the parties’ wishes. It cannot be said that in doing so her Honour fell into error. Both parties were legally represented, which was a matter on which her Honour could rely (Harris v Caladine [1991] HCA 9; (1991) 172 CLR 84 per Mason CJ and Deane J at [15], Brennan J at [11] and Dawson J at [25]). It was not suggested that the agreement that led to the consent order was in question, but, if it was, that would need to be raised in an application to set aside the orders and not on appeal.

1. Given the decision reached on this issue, the application to adduce further evidence was dismissed and the appeal ground was found to have no merit.

 

 

This article does not represent the views of the firm.  It a case note based on a decision made by the Full Court of the Family Court in relation to family law property, spousal maintenance and child support case.

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