Calculation for settlement not mathematical

Calculation not mathematical

Nelson & Ashcroft [2016] FCCA 1322 (2 June 2016)

Calculations: for full case: http://www.austlii.edu.au/au/cases/cth/FCCA/2016/1322.html

DISCUSSION:

56. It is necessary then to firstly address the issues that arise with regard to whether it is, in all the circumstances, just and equitable to make a determination in relation to this matter. In that respect, I note the previous comments of other judges in relation to the various considerations to be looked at and with respect perhaps need say little more than that the relationship between the applicant and the respondent in these proceedings has irretrievably broken down. Without in any way meaning to sound callous or harsh, it is unfortunately clear that as a result of the physical and psychological injuries that have been sustained by the applicant including the ongoing effect of an acquired brain injury, he is simply not the man that commenced the relationship with the respondent in these proceedings.
57. It is clear, for example, that there have been changes in his personality and demeanour which have led to aggressive behaviours, the obtaining by the respondent of domestic violence orders and of two circumstances which have given rise to breaches. There are also clearly other issues of concern with regard to the applicant including his suicidal behaviours and two attempts at least in relation to the taking of his life. It is clear that what might have previously existed between the applicant and the respondent is no longer able to in any way be considered as continuing.
58. In that respect, I am therefore satisfied that it is just and equitable that there should be a resolution of the property matters of the parties.
59. The second step then is to consider the assets of the parties. In that respect there is agreement as to what constitutes the assets of the parties and it is detailed in the agreed facts which have been handed to the court. I include herewith the nonsuperannuation assets and liabilities as well as the superannuation assets and the combined pools for the purposes of noting what constitutes the pool for distribution.

60. The next step is to consider the contributions of the parties. Again there appears generally to be agreement as to what each party contributed financially to the relationship, during the period of two years and one month’s cohabitation. At point (20) of the agreed facts, it was noted that the respondent’s total contribution made up of carer’s allowance and primarily income from her current employment, totalled $91,506 and that the contribution by the applicant made up of rental income from a property he owned prior to cohabitation at Property W, as well as various other payments received from (omitted) Super or the (employer omitted), totalled $149,178.
61. I would not necessarily consider that there should be any mathematical adjustments made as a result of the financial contributions of each of the parties. There are two obvious reasons for me saying that. The first is that whilst each contributed financially to the extent that they were able to do there needs to be recognised that whilst each worked to the best of their ability or received entitlements which arose as a result of prior employment they were simply paid at different levels and it would be highly inappropriate in a matter such as this to draw a financial distinction between the contributions of the parties.
62. In any event, there needs to be recognised as is properly acknowledged, that the income of the respondent was reduced by an amount of approximately $10,000, as a result of her taking reduced work time so as to ensure that she was able to provide assistance to the applicant particularly with regard to ensuring his ability to attend at doctors and other therapeutic attendances as were required as a result of his workplace injury.
63. It was also necessary to consider the differing nonfinancial contributions that would have been made during the period of cohabitation. Again, there is very clearly evidence of a far more significant contribution being made in a non-financial respect by the respondent as a result of the limitations arising from the injuries sustained by the applicant. All in all, I am certainly satisfied that there is an equal contribution in respect of income and provision of support during the relationship.
64. It needs also, however, to be recognised that in a period of about nine weeks, from 3 February 2014 until 9 April 2014, the applicant received payments in relation to his injuries of approximately $785,000. As determined they are clearly moneys that are a contribution made by the applicant to the matrimonial pool.
65. In that respect, therefore, as detailed in the outline provided on the part of the applicant the contributions in totality by each of the parties were significantly different. As set out in Table G to the case outline provided by the applicant, it is suggested that the total contribution, both at the commencement of cohabitation and during cohabitation was $975,122 by the applicant and $220,506 by the respondent. The percentage calculation it is suggested with regard to the financial contributions of the parties, therefore, is 81.6 per cent by the applicant and 18.4 per cent by the respondent.
66. As I have indicated a purely mathematical calculation, however, fails to take into consideration other matters which are relevant in relation to the proceedings. In particular there is the non-financial contribution by the respondent and it is properly acknowledged that the non-financial contribution by the respondent which gave rise in part to a reduction in her financial contribution because of a reduction in the hours that she could work has not been taken into consideration. And whilst the proposal by the applicant is that a figure of 20 per cent be utilised for the formulaic calculation of entitlements it does not in my assessment, fully appreciate the non-financial contributions by the respondent or specifically issues with regard to the dissipation of at least some part of the moneys that were received during the relationship.
67. Quite simply, it is necessary to note that whilst approximately $1.2 million was received into the relationship during the period of two years and one month that they cohabited the actual assets of the parties exclusive of superannuation totals $888,500 and after deduction of a number of liabilities, primarily being the mortgage attaching to the Property C property, there are total nonsuperannuation assets of approximately $600,000.
68. Whilst it is clear that some of the income and moneys received into the relationship during the period of cohabitation were utilised for daytoday living expenses, it is necessary to recognise that a very significant amount perhaps $500,000 or thereabouts is not reflected in the asset pool of the parties. That is an important consideration here and as was emphasised by the legal representatives for the respondent is at least in part attributable to the fact that when the applicant received on 3 February 2014, an amount in excess of $378,000, 10 days later he paid $200,000 to the (omitted) Bank to discharge the mortgage that was then in existence over his Property W property.
69. That property was then retained and produced some other income which was received during the relationship but after separation the property was sold by the applicant and on 1 April 2015, the applicant received from the sale of the Property W property an amount of $191,007.
70. Those moneys were utilised entirely by the applicant. Some of the moneys were provided for the payment of a lump sum child support payment in relation to the applicant’s two biological children, as well as unfortunately, the dissipation of at least $65,000, though the respondent suspects more by way of gambling in a month on an online gambling site. Otherwise, the moneys which were received and there must have been at least another $60,000 to $70,000 available to the applicant has been dissipated and is no longer available for distribution between the parties.
71. The point made by the respondent is a strong one. The contributions of the applicant during the relationship included that $200,000 but it did not in any way lead to the accumulation of further assets on the part of the parties jointly but was rather utilised entirely by the applicant. It gives rise to a need for a reconsideration of what might properly constitute the contributions of the parties and if there is to be some consideration of a calculation upon a percentage basis then there is obviously the need to address the dissipation of the proceeds received from the sale of Property W by the applicant.
72. In that respect, if as suggested the total contribution made by the applicant during the relationship is approximately $975,000 but that $200,000 has been utilised in some proportion appropriately and in others less than properly but entirely for his own purposes, then a more appropriate consideration of contributions of a directly financial nature would be a percentage closer to 77.5% to 22.5%. As I have indicated previously however, such a mathematical calculation does not take into consideration the reduced income earning capacity of the respondent as a result of limitations in her availability for work as a result of providing care and assistance for the applicant.
73. The assessment of contribution is obviously more difficult where the relationship is short in time and one party has made a far greater financial contribution than the other party. In this matter however, there is the additional consideration which has reduced the respondent incomes earning capacity and her additional non-financial contribution as a result of her meeting the needs of the applicant. Other considerations might also include whether the applicant through his greater financial contribution has contributed to the support of the respondents children but as noted earlier, there is at this time irreconcilable differences between the parties in relation to such issues.
74. Ultimately I have come to the view that the purely mathematical assessment does not reflect the entirety of the contributions, financial and non-financial and that an appropriate percentage reflective of all such issues is 70% to the applicant and 30% to the respondent.
75. Next it is necessary to consider that prospective element of any assessment reflected in the section 90SF(3) factors. In this matter that is a consideration which weighs heavily in favour of the applicant. It is clear that he has no future employment prospects as is obvious from the circumstances that arose in the days and weeks preceding the hearing of this matter. The applicant’s health both physical and psychological has been dramatically affected as a result of the accident which occurred on (omitted) 2012.
76. Not only does that seriously impact upon his future capacity to earn income but his state of health both physical and psychological is such that there will no doubt be extensive future requirements relating to medical treatment. I am not provided with any real evidence as to what might be the financial impact upon the applicant as a result of further issues with regard to his health but can opine that even with future entitlements to support there will be some calls upon whatever financial resources might remain under the applicants or his legal personal representative’s control.
77. Balanced against that is the fact that the respondent is apparently in good health, in secure employment and her prospects now and into the future mean that she has good opportunities to continue in appropriate, gainful and remunerative employment. The respondent also has children from a previous relationship and has obligations with regard to those children but B will shortly turn seventeen and the calls upon the respondent in respect of commitments there whilst not totally removed would be expected to reduce. The respondent does have continuing responsibilities in relation to C aged twelve but they do not appear to directly impinge upon her capacity for employment and therefore whilst there are obligations relating to the child and his maintenance they are not necessarily prohibitive of her future opportunities.
78. Again it is not entirely clear what might be the applicant’s future entitlements to support either by way of pension, allowance or benefit but even if such were available it would not be anticipated as being in any way equivalent to the respondent’s future opportunities.
79. It would normally be necessary to consider the duration of the de facto relationship and the extent to which that relationship may have affected the earning capacity of one or other of the parties. However, in this matter the de facto relationship is short and following the parties’ separation it has not to any real degree affected what would be anticipated in respect of the future circumstances of the parties. I say that in the sense that the applicant’s physical and psychological situation existed prior to the commencement of cohabitation though it may have deteriorated over time and the respondent has continued in the employment which she had prior to cohabitation commencing and every expectation is that it will continue into the future.
80. Clearly there may be other factors that arise in the future including improvement or deterioration in the applicant’s health as well as what might be the circumstances of the respondent with regard to any other relationship or more extended obligations in relation to the parenting and provision for her children. But to seek to include such considerations would be speculative in the extreme and any adjustment pursuant to section 90SF(3) can only properly be a reflection of the circumstances as they currently exist.
81. In that respect I am satisfied that there is a very real distinction between the future prospects of the applicant and of the respondent and in the circumstances consider that an adjustment of 5% in favour of the applicant would be appropriate. That would then relate to an ultimate determination of 75% in favour of the applicant and 25% in favour of the respondent.
82. The orders that have been proposed on the part of the applicant and it would seem accepted by the respondent are formulaic but reflect a means by which a calculation can be done so as to facilitate a figure which will reflect an appropriate, just and equitable distribution of property as between the parties. Accordingly, the orders of the court adopting a percentage entitlement of 25% exclusive of superannuation entitlements and other motor vehicles, bank accounts and chattel items in the possession of the respondent are detailed at the commencement of these reasons.