By -

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.’

You've reached the end of this article preview

There's more to read! Subscribe to LSJ today to access the rest of our updates, articles and multimedia content.

Subscribe to LSJ

Already an LSJ subscriber or Law Society member? Sign in to read the rest of the article.

Sign in to read more