In Crawford [2012] FMCAfam 1315 (4 December 2012) the parties, both police officers, had a relationship and were married for a total period of 20 years. They had three children, aged 12, 14 and 17. Their property comprised net non-superannuation assets of $644,000 and superannuation of $1.6 million of which $987,000 odd was the value of the wife’s pension from her superannuation scheme, being a pension in the payment phase received by her since retiring from the police service three years before separation due to an injury while on duty. The husband continued to be employed as a police officer.
Altobelli FM assessed contributions until separation (excluding the wife’s pension) as equal (para 40) and while the wife was found to have made superior parenting contributions in the three years since separation, “particularly in circumstances where her income was less than that of the husband and where the child support paid did not meet the actual expenses of the children” (para 41) the court accepted the husband’s argument that the wife’s greater post-separation contributions were offset by his assumption of liability for a mortgage liability and the court’s refusal to allow addbacks sought by him (para 42).
As to the wife’s pension, Altobelli FM proceeded to examine the terms of the pension as set out in a joint expert statement, saying at paras 46-54:
“The wife’s contention in relation to her pension is that it should be treated as belonging to a separate pool, and that contribution should be assessed in her favour as to 82 per cent. The husband’s contention is that the wife’s pension should not be treated as part of a separate pool, and that his contribution should be assessed as being equal to that of the wife.
The court rejects the husband’s contention that the pension should not be treated as part of a separate pool. The weight of authority favours an asset-by-asset, or separate pools approach to superannuation benefits in the payment phase, particularly when the benefit cannot be commuted to a lump sum, but also in cases where commutation is theoretically possible, but the evidence indicates it is not likely. On the facts of this case, for example, there is no evidence that the wife will seek to commute her pension at any time. The weight of authority includes PJM & STM (2005) FLC 93-242, Cahill & Cahill (2006) FLC 93-253, T & T (2006) FLC 93-263, Schmidt & Schmidt [2009] FamCA 1386 (2 April 2009), Wheeldon & Wheeldon [2011] FamCA 40 (7 February 2011), Treloar & Treloar (No 2) [2007] FamCA 1127 (16 August 2007), Hayton & Bendle [2010] FamCA 592 (16 July 2010) and Semperton & Semperton [2012] FamCAFC 132 (25 August 2012). Many, but not all, of these cases deal with DFRDB pensions which, whilst not possessing identical features to the wife’s pension, have very many similar features, in particular an income stream the value of which is capitalised, based on an actuarial statutory calculation.
The real issue in relation to the wife’s pension, therefore, is how to assess contribution to it. The husband’s case is that he contributed equally to it. Whilst he concedes that the trigger for the receipt of the wife’s entitlement was that she was hurt on duty, and thus retired from the New South Wales police, he submits that in reality the wife’s entitlements are derived from a period of employment of almost 20 years, most of which took place during the marriage. Moreover, the reality of the contribution made by each of them during the marriage, directly and indirectly, financially and non-financially, over a long marriage enabled them each to work, and thus he contributed to the accumulation of the wife’s entitlements in this regard. The husband contends for no relevant distinction being drawn as between the contributions that each made over many years: Burke & Burke (1993) FLC 92-356.
The wife’s case emphasises the peculiar nature of the pension. It is a periodical, indexed payment granted by statute. It became payable only because the wife was hurt on duty. It is designed to replace lost income, and is therefore not compensatory in nature. It continues until death, and thus retirement age is irrelevant.
One of the issues between the experts in this case was whether it was possible to break down the value of the wife’s pension ($987,717) into components which would then facilitate a contribution-based assessment. Thus Mr B for the wife expressed the opinion that it was possible to distinguish between pre- and post-retirement benefits by calculating the value of the pension payments between the present, and the maximum retirement age, as if the pension were a fixed term pension. His opinion, therefore, based on the assumptions he made, is that the $987,717 has different characteristics prior to and post retirement age:
• Pre-age 65 amount – $751,484
• Post-age 65 amount – $236,233
Implicit in the wife’s case is that it is only the post-age 65 component to which it could be argued that the husband had made any contribution, as the balance merely represents her lost income.
Whilst Mr S disagrees with Mr B’s methodology, the reality is that even he concedes that the value of the pension can be broken down into two components that he calls the compensation component, and the retirement component. He places a lower value on the compensation component, and higher value on the retirement component pointing out, for example, that by the time the wife retired after 20 years’ service, she had already accrued a substantial benefit for retirement purposes.
Ultimately, neither Mr B nor Mr S’s expert evidence directly assists the court in assessing whether, and if so to what extent, the husband has made a contribution to the wife’s pension. Indirectly, however, their evidence confirms that in reality the wife’s pension does have some component to it that is not exclusively referable to her injury. To that extent the husband must have contributed to it, a fact conceded by the wife who submits his contribution should be assessed at 18 per cent.
Assessing the husband’s contribution to the pension is more art than science. The different character of the pension is an important factor. Other cases might provide some guidance, but ultimately each case is different, and thus different judicial approaches might be warranted: Thackray & Ryan JJ in Semperton (op cit), paragraph 190. Thus, for example, in T & T the non-beneficiary spouse was awarded 15 per cent. In Schmidt it was 10 per cent. In Wheeldon it was 15 per cent, Treloar 15 per cent, and in Hayton & Bendle it was also 15 per cent.”
Altobelli FM concluded at para 57:
“Doing the best the court can do under the circumstances, the court would have in fact assessed the husband’s contribution to the wife’s pension at 15 per cent. As the wife herself proposes 18 per cent, a figure which is well within the reasonable range for assessing the husband’s contribution, the court will adopt this figure.”
Altobelli FM took an asset by asset approach (para 58) finding contributions to Pool A (non-super assets) as equal and to Pool B (wife’s pension) as 82/18 per cent in favour of the wife. As to Pool C (husband’s super of $637,000 odd) Altobelli FM said at para 61:
“In relation to Pool C, the husband’s superannuation, the somewhat odd situation in this case is that whereas the husband contended, in effect, that the wife had contributed to 50 per cent of this pool, the wife’s contention is that her contribution should only be 37 per cent. Whilst the precise rationale for the wife’s contention that she only contributed 37 per cent of the husband’s superannuation is unclear, nonetheless if that is what the wife contends for, and in circumstances where the court might have accepted an argument for a higher contribution, the court will nonetheless settle for what the wife contends.”
As to s 75(2) factors (care of children and disparity in earning capacity) Altobelli FM said at para 77:
“A finding of a 10 per cent adjustment in the wife’s favour, producing a 20 per cent discrepancy, is available without any reference to the nature and quality of the wife’s pension. The court so finds. The 10 per cent adjustment, however, should not be calculated by reference to the wife’s pension as that would not be just and equitable as regards the husband, and it would otherwise carry an air of artificiality. Indeed, the 10 per cent adjustment should only be calculated by reference to the non-superannuation pool. This means the wife receives $128,945 more than the husband. The focus here should be on the quantum of the adjustment rather than which pool it is levied against. Thus, the wife would be entitled to 60 per cent of Pool A, 82 per cent of Pool B, and 37 per cent of Pool C.”