Hurt on duty super review

Hurt on duty super review

Jarvis & Seymour

82. The concern that the Court has about Mr G’s methodology in calculating the figures set out at 1.13 of his report is that it is based on an assumption which, whilst safely made in the context of valuing an interest as a whole, may not necessarily be safely made when valuing components of a superannuation interest. In any event, the insuperable challenge confronted by the Court in seeking to, somehow, apply the figures contained at paragraph 1.13 is, firstly, that they cannot be reconciled to the value of $1,102,855 (i.e. the figures just do not add up) and, secondly, the Court has no evidence before it as to what the Husband’s intentions are about when, and in what manner, he would take his benefits.
83. The Court acknowledges that in other cases Courts have drawn the distinction between two elements of a spouse’s superannuation, in order to understand the nature of the interest. For example, in Schmidt & Schmidt [2009] FamCA 1386, a decision of His Honour Justice Watts, in another (omitted) hurt on duty case, his Honour drew the distinction between the Husband’s pre-retirement superannuation interest and his post-retirement superannuation interest. The former was the husband’s invalidity benefit, the latter his retirement benefit. At paragraphs 101-108 of Schmidt, his Honour states:
    <li “=””>

    101. The husband currently receives an amount of $958.68 net per fortnight by way of income stream from his superannuation interest.

<li “=””>

102. The reason he receives that fortnightly pension now (rather than at normal retirement age) is because he was hurt on duty.

<li “=””>

103. I find that it is appropriate to assess contributions to pre-retirement superannuation interests separately.

<li “=””>

104. Counsel for the husband argues that only 10 percent of the income stream should be seen as being contributed by the wife.

<li “=””>

105. Between now and his retirement the amount of the husband’s current superannuation interest is not primarily based upon the amount of time that the husband was in the (omitted) pooled fund. It is based on:-

<li “=””>

105.1 The husband being hurt on duty;

<li “=””>

105.2 The circumstances in which the husband was hurt on duty;

<li “=””>

105.3 The amount of the husband’s salary at the time that he was hurt on duty.

<li “=””>

106. In this case the amount of the husband’s salary has a significant connection to the amount of time the husband has been with the (omitted) service. It also has some connection with the fact that the husband was promoted to sergeant in 2003.

<li “=””>

107. The husband was hurt when being exposed to a risk in the course of his employment to which members of the general work force would not normally be exposed. Consequently he receives a superannuation interest equivalent to 100 percent of his salary (s 10(1A)(c) PRSA).

<li “=””>

108. The wife cannot claim any direct contribution arising from the husband being hurt on duty.

84. Mr Richards submits that the same distinction should be drawn in this case, with the invalidity benefit being treated in the same way as what Watts J described as the pre-retirement superannuation interest.
85. At paragraph 122 of Schmidt, Watts J states:
    <li “=””>

    There is a distinction to be drawn between the contributions the wife has made towards the part of the husband’s superannuation interest that he receives because he was hurt on duty and the part of the superannuation interest that he will receive whether or not he had been hurt on duty.

86. Again, transposing that distinction to this case, Mr Richards submits that, because the contribution to the invalidity benefit must, of necessity, be treated in a way different to the contribution to the retirement benefit, these items should be in separate pools. Mr Richards emphasised that the hurt-on-duty benefit commenced after the date of separation, a factual similarity to Schmidt. The Court doubts, however, whether this factor itself is significant because, on the Husband’s own evidence in this case, the psychological and psychiatric injury that he suffered during the course of his work happened during the course of the relationship and, to that extent, it cannot be said that the hurt-on-duty benefit accrued after separation, even if the benefit, in a technical sense, commenced from that time. Indeed, in cross-examination about the Husband’s anger, something about which he deposes to in paragraph 127 of his Affidavit sworn 22 January 2016, he agreed that his anger issues predated the separation. Indeed, it was put to him that the evidence that he gave about his anger extended not just to the period “just before date of separation” but “indeed some years before that”. The Husband agreed and then made this rather insightful, if not somewhat gratuitous comment, “The cops made me mad, and someone wants to keep me there.” Thus, even Mr Richards’ own client might not agree with the subtle distinction sought to be drawn about the hurt-on-duty benefit commencing after the date of separation. The Husband’s own comment also demonstrates the artificiality of some of the distinctions that are often sought to be drawn in these cases. Thus, for example, even if the analysis by Watts J at [105] of Schmidt was correct, and it could be argued that the Husband’s invalidity benefit was not primarily based on a period of membership, but rather on the fact that he was hurt-on-duty, the circumstances in which he was hurt-on-duty, and the amount of the Husband’s salary at the time he was hurt-on-duty, it is nonetheless a legalistic way to assess contribution to the benefit in question.
87. On the facts of this case, the Husband was hurt-on-duty, but the period of duty pre-dated the separation by several years. He agreed that the highly traumatic events to which he was exposed in the course of his duty occurred well before separation. The Husband’s own evidence is that he coped with the stress by going to the pub often, drinking much, playing golf, and going fishing or diving. The reasonable inference to be drawn and the finding the Court in fact makes, is that when he was not home, the Wife had to bear an added responsibility for parenting and homemaking duties. Turning now to the circumstances in which the Husband was hurt-on-duty, the Court is prepared to accept (in a lay sense only) that he was exposed to risks in the course of his work which members of the general workforce were not normally exposed. Does that mean, ipso facto, that the Wife did not bear some of the consequences of this herself? One may well ask why the spouses of (omitted) receive reversionary benefits if, on the analysis of cases such as Schmidt, they made no contribution at all? The third component referred to in Schmidt is the amount of the Husband’s salary at the time he was hurt-on-duty. It is unquestionable that the Wife contributed to this.
88. It seems to this Court that even putting aside the difficulties inherent in adopting Mr G’s valuations of the retirement benefit and invalidity benefit, that a legalistic and technical approach to the assessment of the Wife’s contribution to the Husband’s hurt-on-duty pension has the potential to distract the Court from its fundamental task under s.79(2) to make an order that is, in all the circumstances, just and equitable. Indeed, this Court is strongly of the view that to draw the distinction submitted on behalf of the Husband between retirement benefit and invalidity benefit is, on the facts of this case, not just and equitable. Moreover, when the Court considers s.79(4), and the very broad ranges of contribution that are expressed in that subsection, the legalistic approach contended for on behalf of the Husband is unacceptable.
89. Thus, whilst the Court accepts that the Husband’s superannuation of $1,102,855 should be treated in a separate pool to the non-superannuation assets, the Court declines to make a distinction between retirement benefit and invalidity benefit. A just and equitable order must still be made, but that exercise must take into account all of the very diverse contributions made by both the Husband and the Wife.
90. Doing the best the Court can, therefore, it assesses the Husband’s contribution to the superannuation pool to be 70 per cent.

An Adjustment Under Section 75(2)?

91. It was interesting for the Court to note that two experienced family law Counsel made submissions about a s.75(2) adjustment in favour of the Wife which was not all that inconsistent with each other. Mr Millar for the Wife submitted that there should be a 7.5 per cent adjustment in her favour on the non-superannuation pool and 5 per cent on the superannuation pool. Mr Richards on behalf of the Husband submitted that any adjustment in the Wife’s favour would be between 5 and 10 per cent, but not in relation to what he described as the invalidity benefit component of the Husband’s superannuation. The Court recognises that these submissions were predicated on the Court’s acceptance of each Counsel’s submission about contribution. As it turns out, the Court has not accepted either Counsel’s submission about contribution, having formed its own assessment.
92. What is striking is that the Husband, quite properly it must be acknowledged, conceded that there would be some s.75(2) adjustment in the Wife’s favour to reflect the fact that the children will be in the care of the Wife and the only provision that he would provide is child support. The concession about the adjustment in her favour also reflected the reality that, even on a (omitted) pension, he was earning more than she was. It must also recognise the fact that, in all likelihood, he will have a pension for life, albeit, one the quantum of which will decline post-splitting order. She will be left to the uncertainties of employment in the workforce. Despite all the hardships that the Husband has experienced and will in all likelihood continue to experience and despite his uncertain mental health, the reality is that his (omitted) pension will ensure with almost certainty that he will continue to be in a sound and secure financial position compared to the Wife. The prospects of the Wife improving her financial condition will depend on her being able to return to work full-time, a matter that is far from certain. It will depend, to some extent, on the children becoming totally independent of her. It will depend, to some extent, on her re-partnering. In this regard, her relationship with Mr W is an unknown. The Court finds that it is probably a closer relationship than she was prepared to concede to the Court but that, in any event, it is not yet a relationship that involves the commingling of finances, or unrestricted financial support. The Court can go no further in making findings in this regard.
93. An adjustment is called for, having regard to all the evidence, in her favour. Doing the most the court can do with the evidence available, the court assesses the s.75(2) adjustment in the Wife’s favour to be 7.5 per cent on the non-superannuation pool and 5 per cent on the superannuation pool.
94. This means that in the superannuation pool, contribution is assessed as to 65 per cent in favour of the Husband and 35 per cent to the Wife and in relation to the non-superannuation pool, contribution is assessed as to 52.5 per cent in favour of the Husband and 47.5 per cent to the Wife.

Just and Equitable Orders?

95. A further issue arises from the Wife’s claim to an adjustment in her favour of $35,758.50, representing arrears arising from the Husband’s failure to keep up the repayments in respect of the parties’ mortgage loans, rates, taxes, and insurance payments, as set out in Order 7 made by His Honour Judge Monahan on 27 November 2014 and monies withdrawn by the Husband from the mortgage loan account.
96. It is important to recognise that, in the Husband’s evidence, he did not cavil with the fundamental proposition that he failed to comply with the order made by Judge Monahan. He said, however, that he did not have the money with which to comply with the order. In reality, the Court finds his refusal to comply with the order was nothing more than a petulant protest in relation to an order he did not like. At all relevant times, he had access to funds that could have been used to comply with the Order.
97. The evidence in the Wife’s case about the quantification of her claim is contained in an Affidavit of Mr I, sworn 14 February 2015. Mr I is a forensic accountant, retained by the Wife for the specific issue of quantifying the loss caused by the Husband’s actions. Mr I was not required for cross-examination. His brief was to review both mortgage accounts and determine the effect of the failure to maintain mortgage payments on each account along with the effect of the withdrawal of $47,312.15 as a lump sum. There is no contention about the factual matters that was the subject of Mr I’s analysis. He concluded that the combined financial effect of the Husband discontinuing the repayments on the mortgage loan and then withdrawing $47,312.15 was to increase the mortgage payout on 4 May 2015 by $71,517.72. The amount the Wife claims is half of this amount. The Husband’s cavalier approach to this issue contributes to the finding against him. The Wife is entitled to the order that she seeks.
98. The superannuation pool in this matter totals $1,131,097. The Husband’s 65 per cent share amounts to $735,213.05. His total superannuation held amounts to $1,115,602, so the adjustment in the Wife’s favour will need to be the difference between these two figures, i.e. $380,389. In the Husband’s Minute of Order, he contemplates a splitting order from his interest in the (omitted) Superannuation Scheme. The base amount in this regard will be $380,389.
99. The non-superannuation pool in this matter totals $573,862. The Husband’s 52.5 per cent share of this amounts to $301,277.55. He presently has assets in his control amounting to $64,020.00. The difference between these two figures is $237,257.55, which represents his share of the joint funds, being the sale proceeds of Property O1.
100. The Wife’s 47.5 per cent share of the aforementioned pool is $272,584.45. She has assets in her control totalling $63,005. The difference is $209,576.45, which represents her share of the joint funds held.
101. A further adjustment needs to be made in the Wife’s favour of $35,758.50, out of the Husband’s share. Thus, he gets from the sale proceeds $201,499.05 and she gets $245,337.95.
102. The Orders will reflect the Court’s findings.