Wife Applies for a Superannuation Splitting Order Against Husband

Wasen & Basara [2021] FCCA 1022 (14 May 2021)

Wife applied for property orders against her husband as well as superannuation splitting order referable to the husband’s superannuation.  The court, in determining what approach to apply examined each of the party's evidence as to their contributions. 

Facts:

The parties initially bought a 2 bedroom unit in Suburb T then sold it and purchased B Street, Suburb C property as joint tenants.  The wife continued her home day care business, which she commenced at the Suburb T unit, at the Suburb C property.  The parties rebuilt the property costing $210,000.00.  The husband asserts that the wife's withdrawal of funds from the home loan account put him to the additional expense of meeting mortgage repayments and interest in the order of some $57,800.00.  The wife countered with the suggestion that the husband could have used some of his withdrawn superannuation to repay the home loan and, thereby, reduce any obligation to pay instalments and interest.  The applicant wife sought orders for her husband to transfer to her his rights, title and interest in the B Street, Suburb C property.  Upon transfer, the wife will discharge the existing mortgage on title to the property and the husband will be freed from all further liability.  Until the transfer, they both shall equally share the liability for the mortgage debt.  The husband sought orders to make arrangements with the wife to procure a sale of the property by way of public auction, with the proceeds from which to be applied to expenses of the sale, council, water rates, the Commonwealth Bank mortgage, and maintenance levies with respect to the property.

Issue:

Whether or not the wife's withdrawal of funds was a waste.

Whether or not a one pool approach including property and superannuation should be adopted in this case.

Applicable law:

Family Law Act 1975 (Cth) ss 75, 79 & 81 - The court should take into account contributions 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, to the welfare of the family, child support, the age and state of health of each of the parties and etc. 

C & C [2005] FamCA 429; (2005) FLC 93-220 - provides that the Court has the discretion to include a superannuation interest as an item of property (whether or not a splitting order is sought) and not consider it as part of a separate pool if the parties agree or if the superannuation interest itself fell within the definition of property contained in s.4(1) of the Act; or if the interest did not fall within the definition of property, it was of small value when compared to the value of the items of property; or there are features about the superannuation interest which make this appropriate.

Analysis:

The withdrawn funds by the wife had been kept in a term deposit which had not earned interest.

During the course of the parties' relationship, the husbands financial contributions exceeded those of the wife.  The wife's non-financial contributions exceeded those of the husband. 

The husband had, substantially altered the structure of his superannuation by reducing it from the sum of about $872,397.15 in December 2019 down to $106,326.68 with the difference, after payments having been made, now being held, substantially, in the form of monies at bank or credit union.

Conclusion:

The wife's withdrawal of the funds was held by the Court as waste.  Weighing all of the factors relating to contributions, both financial and non-financial, the Court assesses the parties’ contribution entitlement as being, in the overall circumstances, equal.  Accordingly, the wife would be entitled to receive $1,078,926.96 and the husband would be entitled to receive $1,078,926.95 in the property and superannuation pool.

Despite the superannuation splitting order sought by the wife, the Court applied the one pool approach including property and annuation because of the altered structure of the husband's annuation.  The Court ordered that the wife is to pay the husband the settlement sum of $119,659.76.  The husband should transfer to the wife, at the expense of the wife, all of his rights and interests in the B Street, Suburb C property, from which the husband shall be freed and discharge from all further liability.  Until such transfer, the parties shall equally share liability for the payments on its mortgage debt.