Parties Dispute Over the Approach in Assessment of Contributions

Branic & Sanberg [2021] FCCA 1652 (23 July 2021)

The parties are in dispute over the division of the money deposit into the wife's account by B insurance because she was diagnosed with cancer.  The husband's counsel proposes that the pool be divided as 80% to the husband and 20% to the wife’s estate.  The wife's counsel, on the other hand, asserts that the court should take a "two-pool" approach to the assessment of contributions. 

Facts:

The parties were in a marriage of about 16 years which commenced in 1999.  They have two children, X and Y.  In 2012 the wife was diagnosed with cancer and a claim was made under the policy for a trauma benefit.  B Insurance paid $100,000.00 which was deposited into an account in the wife’s name.  Due to the wife's total and permanent disability and later death, she received $1.575m of the pool of $2.46m from B insurance.  The husband's counsel proposed that the pool be divided as 80% to the husband and 20% to the wife’s estate. 

He submitted that it should find that contributions to the money from B Insurance were equal because the parties made a joint decision to take out the policy and the premiums were paid from the parties self-managed superannuation fund.  He submitted that the husband should be assessed as having made a greater contribution to the remaining assets because of his initial contributions and his care of the children since the wife’s death.  He submitted that overall contributions should be assessed as 55% by the husband and 45% by the wife.  The husband’s counsel submitted that there should be a 25% adjustment in the husband’s favour because he had the care of the children. 

The wife's counsel submitted that the court should take a “two-pool” approach to the assessment of contributions.  He submitted that contributions to the B Insurance monies should be assessed as 95% by the wife and 5% by the husband because it came into existence as a result of the wife’s illness and death and that contributions to the remaining assets should be assessed as equal.  The wife's estate will allows for the husband to make an application to the estate for money to be provided for the children's maintenance and advancement in life.   Another superannuation fund had paid the husband a death benefit of $74,000.00 to be held in trust for the children. 

The wife's counsel asserts that the estate should receive 79% of the assets and the husband 21%.  After the trial on 5 February 2021,  on 24 June 2021 the husband filed an Application in a Case seeking leave to re-open his case in order to call evidence about his changed financial circumstances since the hearing.

Issues:

I. Whether or not the court should take a "two-pool" approach in the assessment of contributions. 

II. Whether or not the husband's application for leave to re-open the case should be granted.

Applicable law:

Family Law Act 1975 (Cth) s 75 - provides for the matters to be taken into consideration in relation to spousal maintenance. 

Family Law Act 1975 (Cth) s 79 - empowers the court to make such orders as it considers appropriate altering the parties’ interests in property. 

Bonnici & Bonnici (1992) FLC 92-272 - a case in which the husband received a substantial inheritance late in the marriage, the trial judge adopted a global approach and assessed contributions as equal.
EB v CT (No. 2) (2008) QSC 306 -  involved an application to re-open in a de facto property case and in which it was held that the guiding principle in deciding whether to grant leave to re-open is whether or not the interests of justice are better served by allowing or rejecting the application. 
Erdem & Ozsoy [2012] FMCAfam 1323 - referred to by the respondent's counsel in submitting that the contributions should be assessed as 95% by the wife and 5% by the husband. In this case, Judge Walets said that "while I accept that the husband may have made a contribution (directly or indirectly) to the policies or arrangements which gave rise to the wife's superannuation entitlements and, ultimately, her death benefits, there can be no doubt that it was the wife's death that generated the substantial lump sum payments."
Falcken & Weule [2019] FamCAFC 140 - where the wife suffered a stroke during the marriage and received a payment pursuant to an income protection policy. The husband argued that his contribution to the payment of the premiums for the policy meant that contributions to the amount the wife received should be assessed as equal.
G & G [1984] FamCA 60; (1984)FLC 91-582 - held that separate assessment and global assessment of contributions are both legitimate unless the High Court rules otherwise provided that those who take the global approach heed the warning that the origin and nature of the different assets ought to be considered and that those who favour the more precise approach do not mistake the trees for the forest, i.e. add up their individual items without standing back at the end to review the overall result in the light of the needs of the parties.
Miller & Miller [2009] CAFC 121 - where the Court ruled that the insurance payment was not a windfall because although the fact that it was a joint decision to take out the insurance and the fact that the premiums were maintained out of the parties’ joint funds can be treated as contributions by each of the parties, there still needed to be a life-threatening event before a payment could be made.
Norbis & Norbis[1986] HCA 17; (1986) FLC 91-712 - endorsed the view that separate assessment and global assessment of contributions are both legitimate. 
Pericles & Hopman [2020] FamCA 465 - involved an application to re-open a property case where Justice Bennett pointed out that whether the court permitted the re-opening of a case was a discretionary decision and that applicant bore the onus of proving on the balance of probabilities that the interests of justice were best served by reopening the case rather than dismissing the application.
Stanford & Stanford [2012] FamCAFC 1; (2012) FLC 93-495 - where the High Court stressed that when an application for a property settlement was made the court must first identify the parties interests in property and then consider whether it was just and equitable to make an order altering those interests. 
Yeates & Yeates [2013] FCWA 117 at [208] and [209] - held that the payment of insurance premiums cannot be compared with contributing to a superannuation fund and that “[t]he sad reality is that the money became available only because the husband was diagnosed with a terminal illness and then died”.

Analysis:

The B Insurance Policy was taken out as the result  joint decision of the parties and that the premiums were paid by the SMSF for ten years.  While the husband made contributions throughout the marriage in many and diverse ways, the wife’s illness and death are the direct contributing factor to the money being in existence.  For a case to be re-opened, the husband should discharge the onus of establishing that the interests of justice will be fulfilled.  The husband submitted that his redundancy payment of  $77,504.54 net of tax which he would receive would be used to pay off his car loan, income tax bill, credit card debt, and school fees. 

The balance would be for living expenses.  Due to his parenting commitments, he intends to look for a job near his children's school however despite his applications for 30 positions, he either received no response or had been unsuccessful.  The fact that the husband wishes to be selective about the employment he engages is not a new development.  The litigation has been on foot for three years and it is in the interests of everyone, including the litigants in this case and other litigants patiently awaiting court time that it be concluded as soon as possible.

Conclusion: 

The Court ordered to dismiss the Application filed on 24 June 2021. Within seven (7) days of the date of these orders the applicant shall pay the respondent $1,105,919.50.  Contemporaneously with the payment being made in accordance with the Order, the respondent shall do all things and sign all documents as shall be necessary to transfer to the applicant all of the estate’s right, title and interest in the the C Street, Town D Property.  The applicant shall do all such acts and things and sign all such documents as shall be necessary to discharge the mortgage on the C Street, Town D property.  Within fourteen (14) days of the date of the Orders the respondent shall do all things necessary to remove from the C Street, Town D property the horse float and shipping container. 

The amount allocated to the respondent out of the interests of the Applicant in the Fund is $104,763.50.  Whenever a splittable payment becomes payable in respect of the interest of the applicant in the fund, the respondent is entitled to be paid the amount of $104,763.50.  The applicant shall do all such acts and things and sign all documents as shall be necessary to pay the respondent, the wife’s member balance in the Branic Superannuation Fund of $126,363.50.  Each party is otherwise declared to be the sole legal and beneficial owner of all real and personal property presently in their possession, custody or control.