Agius & Agius

Case [2022] FedCFamC1F 809

Federal Circuit and Family Court of Australia

(DIVISION 1)

Agius & Agius [2022] FedCFamC1F 809

File number(s): MLC 12548 of 2018
Judgment of: HARTNETT J
Date of judgment: 21 October 2022
Catchwords:

FAMILY LAW – Parenting – Where the parties agreed to equal shared parental responsibility at the conclusion of the trial – With whom the child should live – Spend time arrangements – Where the husband perpetrated family violence against the wife – Where the parties’ elder adult child has significant mental health and behavioural issues – Where the subject child has Autism Spectrum Disorder – Where both the adult child and subject child live with the mother – Where the father seeks for the child to reside with him and to change schools – Where the mother encourages the child father relationship – When the child’s best interests are promoted by a continuation of his residence with the mother – No change of school – Where substantial and significant time spent with the father.

FAMILY LAW – Property – Alteration of property interests – Where it is just and equitable to adjust the parties’ property interests – Where the parties’ have a self-managed superannuation fund which has real property which must be sold – Where the wife has a large tax debt – Where the husband resides in the self-managed superannuation fund property and has incurred penalties in respect of such occupation – Where the wife has made a post separation contribution to the welfare of the children – Where the wife has income and earning capacity greater than the husband – Where the net asset pool is considerably reduced by virtue of the parties liabilities – Where the parties business was placed in liquidation – Where a division of 50% to the wife and 50% to the husband should be made.  
Legislation:

Evidence Act 1995 (Cth) s 140

Family Law Act 1975 (Cth) ss 4AB, 60B, 60CA, 60CC, 61DA, 79, 90XC(1), 90XT(1)(a)

Income Tax Assessment Act 1936 (Cth) s 109G(4)

Family Law (Superannuation) Regulations 2001 (Cth) reg 13

Superannuation Industry (Supervision) Regulations 1994 (Cth) reg 4.09A(2)

Cases cited:

Bell & Nahos [2016] FamCAFC 244

Bevan & Bevan (2013) FLC 93-545

Dickons v Dickons (2012) 50 Fam LR 244

Mulvany v Lane (2009) FLC 93-404

Stanford v Stanford (2012) 247 CLR 108

Whisprun Pty Ltd v Dixon (2003) 200 ALR 447
Division: Division 1 First Instance
Number of paragraphs: 187
Date of hearing: 28 - 29 June 2022
Place: Melbourne
The Applicant: Litigant In Person
Counsel for the Respondent: Mr Atkinson
Solicitor for the Respondent: AFL Kordos Lawyers

ORDERS

MLC 12548 of 2018

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MR AGIUS

Applicant
AND:

MS AGIUS

Respondent

order made by:

HARTNETT J

DATE OF ORDER:

21 october 2022

THE COURT ORDERS THAT:

Parenting

1.All previous parenting orders be discharged.

2.The parties have equal shared parental responsibility for the child, X born 2007 (“the child”).

3.The child live with the mother.

4.The child spend time and…

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AGLC
Agius & Agius [2022] FedCFamC1F 809
Case
[2022] FedCFamC1F 809
Decision Date

CaseChat Overview and Summary

The case of Agius & Agius involved a dispute between the parties over parenting arrangements and property division following their separation. The parties had agreed to equal shared parental responsibility but disagreed on where their child, X, should live and how time should be spent with each parent. The father, who perpetrated family violence against the mother, sought for X to reside with him and to change schools. The mother encouraged the child-father relationship and supported the father's regular involvement in X's life. The court found that it was in X's best interests to remain in the mother's care and to continue attending his current school. The court ordered that X should live with the mother and spend substantial and significant time with the father. The court also ordered that the parties' self-managed superannuation fund, which held real property, be sold and the proceeds divided equally between the parties. The wife's post-separation contribution to the welfare of the children and her greater income and earning capacity were taken into account in making the property division order. The court found it just and equitable to adjust the parties' property interests and ordered that the wife's interest in the self-managed superannuation fund be rolled over to a complying superannuation fund nominated by her. The husband was ordered to pay 50% of the parties' taxation liabilities. The court made orders for the sale of the parties' property, the transfer of funds, and the preparation and lodging of tax returns for the self-managed superannuation fund. The court also made orders for the winding up of the self-managed superannuation fund and the rollover of the parties' respective entitlements to their respective nominated superannuation accounts. The parties were restrained from dealing with or disposing of any of the assets of the self-managed superannuation fund other than in accordance with the terms of the orders. The court made orders for the parties to sign all documents necessary to effect the property division and for an officer of the Court to sign any required documents on behalf of a party who failed to provide a signed document within seven days of a request in writing. The court dismissed all extant applications and removed them from the list of cases awaiting hearing. The parties were granted general liberty to apply as to the operation of the orders.

Orders

Orders of the court

Parenting

1. All previous parenting orders be discharged.

2. The parties have equal shared parental responsibility for the child, X born 2007 (“the child”).

3. The child live with the mother.

4. The child spend time and communicate with the father as follows:

(a) during the school term:

(i) each alternate week, to commence within the following 14 days of these orders on such date as agreed between the parties, from the conclusion of school (or 4.00pm if a non-school day) on Friday u4ntil 6.00pm on Sunday, with such time to be extended to 6.00pm on Monday if the following Monday is a public holiday or a non-school day; and

(ii) once each alternate week, being the week in which the child would not otherwise see the father, on Tuesday from the conclusion of school until 7.00pm with the father and the child to spend such time in Melbourne, and the father to collect the child from school and return the child to the mother’s residence. Such order is subject to the father notifying the mother at least 48 hours in advance of his availability to exercise this period of time with the child.

(b) during the school term and long summer holidays:

(i) in 2022 and each even numbered year thereafter, for the second half of each school term holiday period from 9.00am on the middle day of the school holiday period until 5.00pm on the day before the first day of the next school term; and

(ii) in 2023 and each odd numbered year thereafter, for the first half of each school term holiday period from the conclusion of school on the final day of school until 9.00am on the middle day of the school holiday period.

(c) notwithstanding any other order to the contrary, in the event that the child is not otherwise in the father’s care, the child spend time with the father during the following periods:

(i) from 4.00pm on Christmas Day until 4.00pm on Boxing Day in 2022 and each even-numbered year thereafter;

(ii) from 3.00pm on Christmas Eve 2023 until 4.00pm on Christmas Day and each odd-numbered year thereafter;

(iii) from 9.00am on Good Friday to 4.00pm Easter Sunday in 2023 and each odd-numbered year thereafter;

(iv) from 4.00pm on Easter Sunday to 9.00am on Easter Monday in 2024 and each even-numbered year thereafter;

(v) from 4.00pm on the Saturday before Father’s Day to 6.00pm on Father’s Day;

(vi) from 4.00pm on the father’s birthday each year until 4.00pm the next day; and

(vii) for the child’s birthday, on the first Saturday following the child’s birthday from 4.00pm until 12 noon the following day with the mother to collect the child from the father’s residence; and

(d) as otherwise agreed between the parties.

5. Unless otherwise agreed, the child’s time with the father pursuant to Order 4(a) be suspended during the end of school term and long summer school holiday periods and recommence in the same cycle as provided for in these orders as if his time was not interrupted by the school holiday periods.

6. That notwithstanding any other order to the contrary, in the event the child is not otherwise in the mother’s care, the child spend time with the mother during the following periods:

(a) from 4.00pm on Christmas Day until 4.00pm on Boxing Day in 2023 and each odd numbered year thereafter;

(b) from 3.00pm on Christmas Eve 2024 until 4.00pm on Christmas Day and each even-numbered year thereafter;

(c) from 9.00am on Good Friday to 4.00pm Easter Sunday in 2024 and each even-numbered year thereafter;

(d) from 4.00pm on Easter Sunday to 9.00am on Easter Monday in 2025 and each odd-numbered year thereafter;

(e) from 4.00pm on the Saturday before Mother’s Day to 6.00pm on Mother’s Day;

(f) from 4.00pm or the conclusion of school on the mother’s birthday to 4.00pm or the commencement of school the next day;

(g) for the child’s birthday, on the first Saturday following the child’s birthday from 9.00am to 4.00pm, with the father to collect the child from the mother’s residence; and

(h) from 3.00pm or the conclusion of school if a school day, on the eve of Lunar New Year until 9.00am or the commencement of school on the day following Lunar New Year.

7. Unless otherwise agreed during school terms and school holidays, the father collect the child (at the commencement of his time with him) from school, or from the mother’s residence if a non-school day or public holiday, with the father to return the child to the mother’s residence at the conclusion of his time.

8. Both parties be at liberty to telephone the child at all reasonable times when the child is in the care of the other parent, and both parties shall facilitate the child communicating by any means with the other parent when the child is in their care.

9. Both parties be at liberty to attend the child’s school for the purposes of attending parent-teacher interviews, school concerts, and special events to which parents are normally invited.

10. The mother and father each authorise and direct all school, education facility and extracurricular provider of the children to provide each party (at their request and cost) all information reasonably provided regarding their attendance, including but not limited to notices, information, newsletters, reports and/or photographs.

11. Both parties keep the other informed of any medical issues involving the child whilst in their care, including any medical appointments, medical treatment and medication prescribed and both parents are permitted to attend such appointments.

12. The mother and father each keep the other informed of their current residential address and telephone contact numbers and notify the other in writing within seven days of any change.

Property

13. The parties forthwith do all acts and things to instruct B Lawyers to transfer the funds being held on trust for the parties by B Lawyers (“the trust funds”) as follows:

(a) into the trust account of C Lawyers in the sum of $25,440.13 being property received by the husband pursuant to this Order; and

(b) into an account to be nominated by the wife, the remaining trust funds with such trust funds forthwith to be applied by the wife against the liabilities owing to the Australian Taxation Office in the name of the wife, and D Pty Ltd, with such payments to be applied against the oldest liabilities first, so as to minimise interest payments.

14. The parties be liable for the entirety of any and all taxation liabilities incurred (both during the relationship and since separation) in the parties’ personal names, and in the name of any commercial entity and/or trust controlled by the parties for all financial years up to and including the financial year ended 30 June 2021, in the following proportions:

(a) the husband be liable for 50% of the taxation liabilities; and

(b) the wife be liable for 50% of the taxation liabilities.

15. The parties shall do all acts and things and sign all documents necessary to minimise the taxation liabilities of the parties and/or the corporate entities owned by them or either of them.

16. The taxation liabilities referred to in Orders 13, 14 and 15 hereof expressly include any ultimate increase of such taxation liability which may occur as a result of the application presently before the Commissioner for Taxation under subsection 109G(4) of the Income Tax Assessment Act 1936 (Cth), and the wife is to keep the husband informed in relation to such application.

17. Having been accorded procedural fairness in relation to the making of these orders, Orders 19 to 31 hereof are binding on the parties in their capacities as Directors of Agius Superannuation Pty Ltd (“the Trustee”) (being the Trustee of Superannuation Fund 1 and/or E Pty Ltd (the holding Trustee pursuant to Deed dated 12/10/17) (“SMSF”)).

18. The parties sign all documents and do all things necessary to sell by auction (“the sale”), the real property situated at and known as H Street, F Town, in the State of Victoria (“the F Town property”) (registered in the name of E Pty Ltd) more properly identified in Certificate of Title Volume … Folio …, within 60 days hereof or otherwise by written agreement between the parties.

19. Within seven days of the date of these orders, the wife propose three real estate agents from which the husband is to select a real estate agent within seven days of such nomination, and if the husband fails to so select, the wife be at liberty to select a real estate agent unilaterally.

20. The wife have the conduct of the sale and that she keep the husband reasonably informed of the sale process.

21. The proceeds of the sale be applied as follows:

(a) first, to pay all costs, commissions and expenses of the sale;

(b) secondly, to discharge registered mortgage dealing number … to the G Bank, secured against the F Town property;

(c) thirdly, to pay any tax assessed against the SMSF (including Capital Gains Tax) as a result of the sale; and

(d) finally, the balance of the proceeds of sale be deposited into G Bank account number ending …20 (in the name of the SMSF) pending implementation of the superannuation provisions contained in these orders.

22. Within 14 days of the date of this Order, the husband vacate and provide to the wife vacant possession of the F Town property.

23. The parties sign all documents and do all things necessary to sell all other non-cash assets (if any) of the SMSF forthwith and deposit any monies received as a result of such sale or sales in the SMSF G Bank account number ending #0920.

24. Within 14 days of the date of these orders, the parties in their capacity as Directors of the SMSF Trustee company cause Agius Superannuation Pty Ltd to do all such acts and things necessary to engage VV Financial Services (“VV Financial Services”) to promptly prepare financial statements and tax returns for the financial years ended 30 June 2018, 30 June 2019, 30 June 2020, 30 June 2021 and 30 June 2022 (“the tax returns”) for the SMSF and do all things necessary to enable VV Financial Services to prepare and lodge the tax returns and that the cost of preparing the tax returns be borne by the SMSF.

25. To give effect to Order 24 herein, within seven days of the date of these orders, the husband do all such acts and things and provide all documents required by VV Financial Services to enable the completion of the tax returns, including but not limited to all invoices and receipts relating to renovations effected to the F Town property in the 2018, 2019, 2020, 2021 and 2022 financial years.

26. Any liabilities (including taxation liabilities) owing by the SMSF arising from the completion of the tax returns as provided for in Orders 24 and 25 herein be borne by the SMSF, save for that any penalty, fine, or liability (including taxation liability) incurred by the parties, or the SMSF or other such entity in which the parties may have an interest, that arises as a result of the husband residing in the F Town property, shall be paid from the husband’s interest in the SMSF after the wife’s interest in the SMSF has been rolled out pursuant to Orders 27 to 30 herein.

27. The base amount to be allocated to the wife out of the interest of the husband in the SMSF is the amount calculated as 50% of the total value of the SMSF less the wife’s member balance in the SMSF.

28. In accordance with s 90XT(1)(a) of the Family Law Act 1975 (Cth) (“the Act”) the wife is entitled to be paid the base amount allocated in Order 27 herein and the entitlement of the husband is correspondingly reduced by the same amount (“the payment split”).

29. The parties, both personally and in their capacities as Directors of Agius Pty Ltd, the SMSF Trustee company, do all acts and things and sign all documents as required to transfer the payment split to a complying superannuation fund nominated by the wife (“the wife’s nominated fund”).

30. The operative date for the purposes of Orders 27 and 28 is 30 days after completion of the settlement of the sale.

31. Upon the payment split, the parties do all acts and things and sign all documents as may be necessary to rollover the wife’s member interest in the SMSF to the wife’s nominated fund.

32. Following completion of Order 31 herein, the parties do all acts and things and sign all documents as may be necessary to rollover the husband’s member interest in the SMSF into a complying superannuation fund to be nominated by the husband.

33. Pending the transfer of the benefits to the parties nominated funds, each party is restrained from dealing with or disposing of any of the assets of the SMSF other than in accordance with the terms of these orders or the joint written consent of the parties (such consent not to be unreasonably withheld) and each party immediately revoke any binding death benefit nomination already made and each party be and is hereby restrained from:

(a) making any binding death benefit nomination in favour of a child described in reg 13 of the Family Law (Superannuation) Regulations 2001 (Cth);

(b) making any other nomination where the effect of such nomination would be to render any splittable payment not splittable; and

(c) doing any act or thing which would defeat, extinguish or reduce the entitlement of either party under this Order.

34. Following the implementation of the payment splits, the rollover of the parties’ respective entitlements to their respective nominated superannuation accounts, the parties do all such acts and things and sign all documents necessary to wind up the SMSF and deregister the Trustee and further engage VV Financial Services accounting to assist them to do so. The SMSF to pay for all costs of such wind up and deregistration.

35. In the event that the parties or either of them fail to provide any signed document required pursuant to these orders, and within seven days of a request in writing for such signature, then an officer of the Court shall sign such document/s on behalf of the party and pursuant to s 106A of the Family Law Act 1975 (Cth).

36. Each of the parties shall retain ownership of those corporate entities and trusts owned by them, being D Pty Ltd as owned by the wife, Agius2 Pty Ltd as owned by the wife, and Agius Family Investments Pty Ltd as owned by the husband.

37. Unless otherwise specified in these orders and save for the purposes of enforcing these orders:

(a) each party be solely entitled to the exclusion of the other to all other property (including choses-in-action and motor vehicles) in the possession of such party as at the date of these orders;

(b) monies standing to the credit of either party in any bank, building society or investment account are to remain the property of the account holder;

(c) monies standing to the credit of either party in any bank, building society or investment account are to remain the property of the account holder;

(d) insurance policies remain the sole property of the named owner;

(e) each party, be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;

(f) each party, be solely liable for and indemnify the other against any liability in that party’s sole name including but not limited to income taxation liabilities; and

(g) any joint tenancy of the parties in any real or personal estate is expressly severed.

38. There is general liberty for both parties to apply as to the operation of these orders.

39. Otherwise, all extant applications are dismissed and removed from the list of cases awaiting hearing.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

The father demonstrated a lack of insight into his own actions against the mother, and how a change in residency would affect X. I find the father also lacks insight into X’s mental health and wellbeing, and in particular fails to acknowledge that his attitude toward Mr K affects both Mr K and X. The mother accepts that it is important for X to maintain a relationship with the father, and supports the father’s regular involvement in X’s life. An order for X to remain in the mother’s care will be less likely to lead to further litigation. Conclusion I am satisfied that it is in X’s best interests to remain at his current school and live with the mother. I accept the evidence of Dr S that X, with autism, is “a boy that needs a structure and routine and predictability in his life, which would be upended were he to relocate.”[53] The mother’s proposals as to spend time arrangements during the school week are generally preferable to the father’s as they are more practical and better promote X’s best interests, in particular, should the father move his residence to City AA, a distance of more than 100 kilometres from Melbourne. There should be, however, an opportunity for X to spend time each week with the father including in the alternate week, should the father travel to Melbourne. Accordingly, I shall make an order to that effect. The balance of the orders I shall make provide for holiday and special occasion time together with regular communication between X and his parents. Overnight time during school terms as proposed by the father in the alternate week would be too difficult and disruptive for X who would need to travel from City AA, to Suburb ZZ, before school on a Wednesday having made the trip from Melbourne to City AA on the evening before following a school day. That would be an exhausting period for X, with his particular needs, and disruptive to his routines. Accordingly, the mother’s proposal better advance X’s best interests. Property Further Relevant Background[53] Family Report dated 2 August 2021, paragraph 37.Funds obtained by the husband In early 2018, the husband transferred $100,000 to a bank account in the name of Agius Investment Trust. That account was controlled by the husband. The husband did not make adequate discovery of this transfer. The husband, at trial, maintained the money so transferred was expended in full and applied to improve the F Town property, and was “recorded in the books”.[54] He later conceded this amount had not been recorded, claiming the taxation return for that financial year remained outstanding. There is no documentary corroborative evidence to support the husband’s claim that he applied the funds in their totality, or at all, in the manner described by him. However, I can be satisfied, on the wife’s concession that the husband was responsible for organising some renovations to the F Town property. The wife did not know the quantum the husband was spending on the renovations, which were to be minor in nature, a matter which the husband ignored. The wife claimed that the husband initially sold shares owned by the SMSF to fund the renovations, and when this was not sufficient, the husband assumed W Pty Ltd would fund the balance of the renovations. The wife did not agree to the husband paying for renovations to the F Town property from the W Pty Ltd accounts. The further monies the husband obtained (see [105] below) may have been also applied to the F Town property by the husband, but I can make no finding as to that when applying the necessary standard of proof. [54] Transcript 29 June 2022, p.109 lines 29-34.

Ratio Decidendi

Legal Principle Established

Both parties in the orders sought by each of them, recognised that given their geographical distance from each other’s residence, it was not in the child’s best interests and reasonably practical for X to spend equal time with each of his parents. Both parties instead sought orders for substantial and significant time to be spent with the non-resident parent. On the facts of the case, the parties’ orders as sought were proper. Primary Considerations The father alleged that X is at risk of harm in the household of the mother, that risk being from Mr K. The mother does not propose to remove Mr K from her household. It is common ground between the parties that Mr K’s behaviour has been challenging for his parents, in particular the mother, as the father has not spent any time with Mr K in over three years. The father provided no assistance to the mother in her attempts to address, beneficially for all, the various issues present for Mr K. Mr K has experienced drug addiction and engaged in antisocial and reckless behaviours such as “stealing a vehicle and having an accident [at] one point.”[8] His behaviours have resulted in police attending the mother’s residence on a number occasions. It is accepted by the mother that X has witnessed Mr K be violent toward the mother, and that X is acutely aware of his brother’s difficulties and alcohol abuse. [8] Family Report dated 2 August 2021, paragraph 13. It was the mother’s unchallenged evidence that Mr K’s escalation in behavioural issues spiked following the parties separation. Mr K witnessed the aftermath of the altercation between his parents, including injuries sustained by his mother and the police attending the FMH, as described in paragraphs [13] and [14] of these reasons. Mr K reported to Dr S that the reason he did not wish to spend time with the father was because the father was “unapologetic for [his] past failings and refuses to apologise”.[9] [9] Family Report dated 2 August 2021, paragraph 32. X, in his interview with Dr S in August 2021, described the situation with Mr K as follows:[10]… the situation for his brother had improved noticeably within the household in more recent times. He agreed that there have been significant challenges with [Mr K's] behaviour, including aggressive outbursts, alcohol use, and a generally unpredictable and labile presentation. He described, "it's better than before because now he doesn't have alcohol, he says, I hope that's true, which I think it is… He's a […] now”. While he understood that there had been violence perpetrated against his mother by his older brother, [X] maintained that, "I wasn't there… Wait, I was there, but I was asleep”. He said he had witnessed the police attend the home at one stage, taking his brother away.[10] Family Report dated 2 August 2021, paragraph 25. It was the mother’s evidence that “[X] and [Mr K] love each other and they both want to live in the same house together”.[11] While “there were some issues at the time of separation”, those issues had since resolved with the assistance of a family therapist and other interventions that had occurred mostly as arranged by the mother. In respect of Mr K’s health and behaviour, Mr K, having in the view of Dr S “rejected his father entirely”,[12] has not interacted with the father in over three and a half years and the father has no real knowledge of the existing relationship and interactions between the two brothers and/or between the mother and the parties’ children. [11] Wife’s affidavit filed 24 June 2022, paragraph 41.[12] Family Report dated 2 August 2021, paragraph 32.