By Robert Glade-Wright -
Key decisions
- Diggelen [2014] FamCAFC 160
- Eufrosin [2014] FamCAFC 191
- Joelson [2014] FamCA 788
- Geddes & Toomey [2014] FCCA 1814
- Perks & Doney [2014] FCCA 2404
Property – Treatment of redundancy payment of $459,199 as worth $300,000 due to ‘taxation implications’ was in error
In Diggelen [2014] FamCAFC 160 (1 September 2014) the Full Court (Strickland, Ainslie-Wallace & Ryan JJ) considered Johnston J’s lower court decision to treat a $459,199 payment the husband had received from his employer for ‘accrued annual leave, long service leave, severance payment and ETP’ (at [25]) as having a value of $300,000. The Full Court referred at [27] to the lower court judgment where Johnson J, said:
‘It was submitted [for] the wife that there should be added back … the $469,199 (sic) which [the husband] received as his redundancy payment. … To do so would ignore taxation implications. It must be the case that some of this payment was on account of leave. There was no suggestion that the money paid was tax-free. This is a most unsatisfactory aspect of the case. Doing the best I can in difficult circumstances, I propose to allow $300,000 of this payment to be added back to the pool of property.’ (Diggelen [2012] FamCA 940 at [78]).
In remitting the case for re-hearing, the Full Court said (at [34]):
‘ … there was no evidentiary basis on which his Honour could have found … that some part of the redundancy payment … was subject to tax … and ought to be brought into account at a lesser amount than that received. We also observe that his Honour’s conclusion is at odds with … ss 12 – 85 of Schedule 1 Taxation Administration Act 1953 (Cth) by reason of which the husband’s employer was obliged to retain PAYG payments on the redundancy/termination of employment payment.’
