Akrad & Akrad
[2020] FCCA 3640
•18 December 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
Akrad & Akrad [2020] FCCA 3640
File number(s): MLC 14738 of 2019 Judgment of: JUDGE BENDER Date of judgment: 18 December 2020 Catchwords: FAMILY LAW – Parenting – Mother’s Application for final parenting orders – where the Father has failed to participate in proceedings – where there has been serious family violence perpetrated by the Father and witnessed by the children.
HELD – the Mother has sole parental responsibility for the children – the children live with the Mother – the children spend no time with the Father.FAMILY LAW – Property – Wife’s Application for final property orders – where the Husband has failed to participate in proceedings – the matter proceeded on an undefended basis.
HELD – Wife to retain assets in her name and her superannuation such that she receives 67.5% of the parties’ asset pool for division and the Husband receives 32.5% of same reflecting the Wife’s greater contribution and 75(2) factors.Legislation: Family Law Act 1975 (Cth) Cases cited: Bevan and Bevan [2013] FamCAFC 116
Hickey and Attorney General for the Commonwealth of Australia [2003] FamCA 395
Kennon & Kennon [1997] FamCA 27
Stanford v Stanford [2012] HCA 52
Number of paragraphs: 75 Date of hearing: 18 December 2020 Place: Melbourne Counsel for the Applicant Ms Elleray Solicitors for the Applicant Souki Lawyers Counsel for the Respondent The Respondent did not appear ORDERS
MLC 14738 of 2019 BETWEEN: MS AKRAD
Applicant
AND: MR AKRAD
Respondent
ORDER MADE BY:
JUDGE BENDER
DATE OF ORDER:
18 DECEMBER 2020
THE COURT ORDERS THAT:
Parenting
1.The Applicant Mother have sole parental responsibility for the children of the marriage:
(a)X born in 2003 (“X”)’
(b)Y born in 2004 (“Y”); and
(c)Z born in 2007 (“Z”).
2.X, Y and Z live with the Mother.
3.X, Y and Z are to spend no time or communicate with the Father.
4.The Father is restrained from coming within 500 meters or attending X, Y and Z’s school.
5.The Mother is permitted to provide a copy of these orders to the principal of X, Y and Z’s school.
Property
6.Pursuant to section 78 of the Family Law Act 1975 (Cth), THE COURT DECLARES that the Applicant is the full and only beneficial owner of the following properties:-
(a)B Street, Suburb C in the State of Victoria being the land more particularly described in the Certificate of Title Volume … Folio …;
(b)D1 and D2 Street, Suburb E in the State of Victoria being the land more particularly described in the Certificate of Title Volume … Folio … and Volume … Folio …;
(c)the sale proceeds of F Street, Suburb G in the State of Victoria contained in the Commonwealth Bank Australia Netbank Saver Account No …72;
(d)the funds contained in the Applicant’s CBA Smart Access Account ending …60; and
(e)the Applicant’s Super Fund H entitlements.
7.The Respondent retain for his own use and benefit:-
(a)all household possessions, furniture and personal items in the property situate and known at J Street, Suburb G in the State of Victoria;
(b)the Motor Vehicle 1 registered in his name; and
(c)all shares owned by him.
8.Unless otherwise specified in these orders and save for the purpose of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all superannuation and other property (including choses-in-action) owned by or in the possession of such party as at the date of these orders;
(b)insurance policies remain the sole property of the owner named thereon/in;
(c)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;
(d)any joint tenancy of the parties in any real personal estate is hereby expressly severed.
9.The matter be removed from the pending cases list.
AND THE COURT NOTES THAT:
A.Pursuant to rule 16.05(2)(a) of the Federal Circuit Court Rules 2001 (Cth), the court may vary or set aside a judgment or order made in the absence of a party.
B.Pursuant to s.62B and s.65DA(2) of the Family Law Act 1975 (Cth), the particulars of the obligations these Orders create and the particulars of the consequences that may follow if a person contravenes these Orders are set out in the Annexure and these particulars are included in these Orders.
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment under the pseudonym Akrad & Akrad is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
INTRODUCTION
This matter relates to both parenting and property matters following the breakdown of the parties’ relationship of some 20 years.
The Applicant Mother filed an Initiating Application on 24 December 2019. Its return date was somewhat delayed as a result of COVID-19.
The Respondent was served with the Initiating Application on 21 March 2020.
The matter first came before Registrar Hayward on 30 June 2020. On that occasion the Respondent had filed no answering material and did not appear.
Registrar Hayward adjourned the matter to 14 October 2020 and made orders for the Applicant to file amending documentation, for the Respondent to file answering material and for service of the orders on the Respondent to take place by way of email.
Most relevantly, the Registrar put the Respondent on notice that should he fail to comply with the orders and/or fail to attend the next court event, being 14 October 2020, then the matter may proceed on an undefended basis and orders be made in his absence.
The Applicant did all things required of her in relation to the filing of material. She served the Respondent as ordered.
When the matter came before the Court on 14 October 2020, orders were made adjourning the matter to today and directing the Respondent to file and serve a Response and answering material by 13 November 2020. Further orders were made that if the Respondent did not file the answering material by 27 November 2020, the Applicant was to file a Further Amended Initiating Application setting out the final orders sought by her and a single affidavit setting out the basis upon which she submitted the proposed parenting orders were in the children’s best interests and the proposed property orders were just and equitable. The Applicant was also ordered to file an affidavit of a valuer in relation to the parties’ real estate holdings.
Service on the Respondent was to be effected by way of email and, most relevantly, orders were made that if the Respondent failed to comply with the orders with respect to the filing of answering material and/or appear on the adjourned date the Applicant would have leave to seek undefended orders be made today in the terms set out in her Further Amended Initiating Application.
The Respondent has filed no answering material and has not appeared.
The Applicant has filed all relevant documentation as ordered and has served all relevant material as directed.
Accordingly, leave is granted for the Applicant to proceed today to seek final orders on an undefended basis.
BACKGROUND
The parties married in 1998 and separated on 20 August 2018. They divorced on 20 November 2019.
The parties have four children: Mr K born in 2001 (“Mr K”), X born in 2003 (“X”), Y born in 2004 (“Y”), and Z born in 2007 (“Z”).
Mr K, X, Y and Z all reside with the Mother. They had minimal interaction with the Father in the period shortly after separation but have not spent any time with him for in excess of 12 months.
During the course of the marriage, the Applicant was in employment save for those periods necessary for the birth and caring of her children. The income earned by her was utilised solely for the benefit of the family, both in terms of servicing mortgages on properties owned by the parties, and supporting the family generally.
The Respondent ran his own business up until 2009. Since that time he has not been in paid employment and the financial responsibility for the care of the family fell squarely and solely on the shoulders of the Applicant.
The parties lived in a property owned by the Respondent’s parents at J Street in Suburb G.
During the marriage, the parties were able to acquire the following real property: F Street in Suburb G in 1999 for $150,000 (“the F Street, Suburb G property”), a factory property and vacant block of land adjacent to each other at D1 and D2 Street, Suburb E for $203,000 (“the D1 and D2 Street, Suburb E properties”) and B Street in Suburb C for $575,000 (“the B Street, Suburb C property”).
The F Street, Suburb G and D1 and D2 Street, Suburb E properties were purchased as a result of the parties’ endeavours. My understanding of the B Street, Suburb C property is that it was able to be purchased as a result of the parties’ joint endeavours as well as funds of approximately $150,000 that was obtained by the Respondent when he, perhaps fraudulently, sold a property owned by his parents and retained the proceeds thereof.
The properties have all been registered in the Applicant’s name. The reasons for that are unknown to me.
The mortgage on the F Street, Suburb G property was discharged by the parties, in full, by 2004. In April 2019, because of the substantial debts owing by the parties at separation, the Applicant sold the F Street, Suburb G property for $710,000, settling on 12 December 2019.
In paragraphs 85 and 86 of her Affidavit filed 30 November 2020, the Applicant deposes in detail as to how she used $200,000 of the proceeds of sale of the F Street, Suburb G property to discharge the parties’ joint liabilities such that as at today, an amount of $416,177.33 remains in a NetBank Saver account in the Applicant’s name.
The D1 and D2 Street, Suburb E properties were tenanted by the Respondent who, it would appear, fraudulently entered into a lease with the tenant on the basis he purported to be the owner of the property. There was a period of time post-separation where he retained the totality of the rental income totalling some $65,000.
In recent times, the Applicant has been able to rectify that situation. She is now receiving the rental from the D1 and D2 Street, Suburb E properties which she has been utilising in the support of herself and the children, particularly, during COVID, when she has only been in receipt of JobSeeker.
The Applicant deposes to being the victim of ongoing and very serious violence at the hands of the Respondent both prior to and since the parties’ separation. She deposes to instances where she has had to barricade herself in her motor vehicle for her protection. She deposes to the Respondent pushing, kicking and hitting, to his damaging mobile phones, tearing and burning clothing, including work clothing, to her receiving a constant barrage of verbal and offensive insults. The parties’ children have not only been witnesses to the Father’s violence towards the Mother, Mr K has at times had to intervene to protect his Mother.
Since separation, the police, on the Mother and children’s behalf, obtained an Intervention Order. That Intervention Order, has been extended to 2025. This in and of itself is indicative of the seriousness of the abuse to which the Mother and children have been subjected and of the concern that the police and the Magistrates court have in respect to the risk the Father poses to the Mother and the children.
The Father has been incarcerated for breaches of the Intervention Order. This too is indicative of the seriousness of the breaches, which have included threats to kill.
The Father was recently incarcerated in relation to breaches of the Intervention Order. He was released, in late 2020, and has, since his release, again, breached the Intervention Orders by sending the Mother grossly inappropriate communication.
PARENTING
In relation to the parenting matters, the Mother in her Further Amended Initiating Application seeks orders that reflect the interim orders I made in October 2020 being that:
(1)the Mother have sole parental responsibility for the three minor children, X, Y and Z
(2)X, Y and Z live with the Mother.
(3)X, Y and Z spend no time with the Father.
(4)the Father be restrained from attending X, Y and Z’s school or coming within 500 metres of their school.
(5)The Mother be permitted to provide a copy of the orders to their schools.
Given the continuous and horrendous violence to which the Mother and all four children have been subjected to at the hands of the Father, that the children have spent minimal time with the Father since separation and that the Father provides no child support, it is apparent that the orders sought by the Mother are in the best interests of X, Y and Z.
PROPERTY
In relation to financial matters, the law relating to the manner in which a court is to determine whether orders should be made and whether or what orders, if that is the case, are just and equitable are well established in the matter of Stanford v Stanford [2012] HCA 52.
Suffice to say, I am satisfied that this is a matter in which it is just and equitable that orders be made in relation to the parties property interests, albeit the orders sought by the Mother do not actually require an adjustment of the parties’ equitable interests in their property.
I must however consider whether the Mother’s proposal is a just and equitable outcome by a proper consideration of s 79 of the Family Law Act 1975 (Cth) (“the Family Law Act”).
THE LAW
Section 79 of the Family Law Act 1975 (“the Act”) defines the Court’s powers in determining applications for property settlement. Section 79(2) of the Act provides that:
The Court shall not make an Order under this Section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.
Section 79(4) of the Act sets out the matters the Court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters are:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The standard manner in which property matters are adjusted once there is a decision made for the court to exercised its discretion under the Family Law Act and that is the accepted four-step approach enunciated in the matter of Hickey and Attorney General for the Commonwealth of Australia [2003] FamCA 395.
The four step process set out in Hickey is as follows.
·Firstly, the Court determines the nature of the property pool and attribute valuations.
·Secondly, the Court considers the contributions of the parties to the property pool including direct and indirect financial contributions and non-financial contributions often in the form of homemaker or parent.
·Thirdly, and after considering entitlements based on contributions the Court determines whether any further adjustments to either parties’ entitlement is proper, given the considerations under section 75(2) of the Act.
·Finally, the Court stands back and considers whether the proposed division of the property is just and equitable pursuant to section 79(2) of the Act.
The High Court in Stanford v Stanford [2012] HCA 52 and subsequently the Full Court in Bevan and Bevan [2013] FamCAFC 116 observed that this four step approach should not be rigidly followed.
However, the Full Court in Bevan (supra) also indicated that in the majority of property cases, the four step approach is an appropriate manner in which to approach the determination of the division of properties between parties once the Court is satisfied that such division is just and equitable.
I am satisfied that this is a matter where the four step approach of Hickey is the appropriate approach to be taken to determine a just and equitable division of property between the parties.
ASSETS AND LIABILITIES
Following the four step approach of Hickey the first matter of consideration is determining what the property pool is.
The Applicant filed a very detailed affidavit on 30 November 2020 that sets out very clearly the history of the matter and the assets of the parties.
Also before the Court is an affidavit of valuer Mr L sworn on 27 November 2020, annexed to which are sworn valuations in relation to all of the parties’ real estate.
Paragraph 125 and 126 of the Applicant’s affidavit filed 30 November 2020 sets out the assets and liabilities of the parties that are known to her. The independent evidence which confirms the value of those assets is properly before the Court. As the Respondent has failed to participate in these proceedings, his current financial circumstances cannot be known with certainty.
However, I am satisfied that the asset pool, for the purposes of this decision is as follows:
(a)The Applicant has a CBA Smart Access account ending …60 in which there is $37,920.50.
(b)She has a CBA NetBank Saver account ending …72 in which there is $416,177.33.
(c)The properties at D1 and D2 Street, Suburb E with a sworn value of $1,270,000. The properties are unencumbered.
(d)The property at B Street, Suburb C, has a sworn value of $1,125,000. There is a registered mortgage on that property. Currently $247,517.41 is owing on that mortgage.
(e)The Respondent, on 1 April 2021, forwarded a snapshot (a picture of the electronic device) of the Respondent’s Australian Shares Statement numbered …18 to the parties’ children which showed, at that time, the Respondent had shares with a market value of $202,025.
(f)The Respondent subsequently sent to the children a further snapshot which showed, as at 1 April 2020, his CommSec Australian share account numbered …18 had an amount of $1,078,000 in it.
(g)The Applicant’s solicitor has unsuccessfully tried to subpoena the Husband’s share records/CommSec Australia share account. It is apparent from the snapshots forwarded by the Respondent to the parties’ children that as at April 2020, the Respondent had funds in excess of $1 million in his share trading account. He also boasted to the children that he owned $2 million in shares in a company whose trading had been suspended as they had the potential to be involved in the manufacture of COVID vaccines which would have considerably increased their value. I think at the time that he was making all this information available to his children, those shares were valued at something like 2.1 cents a share.
The Applicant also has liabilities other than the mortgages on the properties. She has outstanding school fees of $14,000. In addition I have accepted oral evidence from the Applicant’s counsel today, as it’s only something that has become known since the filing of the trial affidavit, that the Applicant’s accountant has advised that the Applicant has been assessed to pay capital gains tax in relation to the sale of the B Street, Suburb C property of $117,000. There is potential for the capital gains tax to be reduced on the production of proof of certain payments over the history of the property. However, as that documentation is in the possession of the Respondent, it is unlikely that the requisite documentation to reduce the capital gains tax will come to light. I therefore accept that there is a capital gains tax liability of $117,000 which the Applicant will be liable for.
As mentioned earlier in this judgment, during the parties’ relationship, they lived in a property at J Street, Suburb G. The property is registered in the name of the Respondent’s late father. There is a sworn valuation in relation to that property of $765,000. It would appear that the status of that property and in particular whether it passes to the Respondent’s Mother, who is still alive but is not living in Australia, whether it passes to the Respondent, or whether it may pass to Mr K as the eldest grandson, is unknown and will be something that will be pursued in due course.
The Applicant believes that subsequent to the fraudulent sale of the property by the Respondent of his Father’s property that is referred to earlier in this judgment, the paternal grandfather, while he was alive, lodged a caveat to protect J Street, Suburb G from sale. The caveat, it is understood, is worded in such a way to indicate that it is to protect the interest of the parties’ eldest son, Mr K. It is the understanding of the Applicant, though it has not been confirmed, that it is possible there is a will in existence leaving that property to Mr K. Again, these are all matters for the future.
For those reasons, I am not moved to include J Street, Suburb G in the asset pool. I am only commenting on it because there was a possibility that this property might be inherited by the Father. As its status is unknown and it is a real possibility that it may well end up being a matter to be fought over in the Supreme Court under the appropriate legislation applicable thereto, I will not include it as an asset for division between the parties.
The Applicant also has superannuation of $155,000 which she has accumulated as a result of her lengthy employment throughout the entirety of the relationship.
It is not known whether the Respondent has any superannuation.
The assets that are known as at this date including the Respondent’s shares and share account as at 1 April 2020 are as follows:-
Assets
CBA Smart Access account ending …60
$37,920.50
CBA NetBank Saver account ending …72
$416,177.33
D1 and D2 Street, Suburb E
$1,270,000.00
B Street, Suburb C
$1,125,000.00
Respondent’s Australian Shares Statement …18
$202,025.00
CommSec Australian shares …18
$1,078,000.00
TOTAL ASSETS
$4,129,122.83
Liabilities
B Street, Suburb C
$247,517.41
School fees
$14,000.00
Capital Gains Tax
$117,000.00
TOTAL LIABILITIES
$378,517.41
TOTAL NON-SUPER POOL
$3,750,605.42
Superannuation
Applicant’s Superannuation
$155,000.00
TOTAL SUPER POOL
$155,000.00
TOTAL POOL
$3,905,605.42
CONTRIBUTIONS
It was submitted on behalf of the Applicant that when considering the parties’ contributions the Court should be persuaded that it is the Applicant who made by far the greater contribution.
This is because for the majority of the relationship, the Applicant was the major income earner in the household and it was her endeavours that enabled the parties to purchase and maintain their significant property portfolio.
It is the Applicant’s submission that she was the person who almost solely performed the role of parent and homemaker with little to no assistance from the Respondent.
It is submitted on behalf of the Applicant that this is a matter in which the level of violence to which she and the children were subject at the hands of the Respondent is at such a level that it is a matter in which the matter of Kennon & Kennon [1997] FamCA 27 is applicable as her contributions were made more onerous as a result of the levels of violence to which she and the children were subjected.
I am in complete accord with the submissions made on behalf of the Applicant. The contributions of the Applicant both during and after separation have been much greater than those of the Respondent.
I am of the view that the adjustment in the Applicant’s favour for contributions should be 12.5 per cent. This is made up of a 7.5 per cent adjustment for the greater contributions made by her as an income earner and homemaker and a 5 per cent adjustment because of how much more difficult those contributions were made as a result of the violence to which she and the children were subjected at the hands of the Respondent both during the relationship and post-separation.
S75(2) FACTORS
In relation to section 75(2) factors, it is submitted on behalf of the Applicant there should be an adjustment in her favour.
It is submitted on behalf of the Applicant that she is unlikely to be able to resume her longstanding position with Employer H, given the perilous state in which the industry find itself as a result of COVID. It is further argued that if the Applicant is able to retain her position with Employer H, it is unlikely that it would be on a full time basis.
It is also submitted on behalf of the Applicant that she will have the primary care of the parties’ minor children. In addition, whilst Mr K is now an adult, he is studying full-time and the Applicant is continuing to support him.
The parties’ daughter, X, finished year 12 this year in what would have been very difficult circumstances.
Y and Z will continue to attend the school they have attended all their lives. It is a private school which all the children have attended. The Applicant will continue to be responsible to pay the fees whilst the girls finish their education. I also assume that, like their older siblings, there is an expectation that they will complete their VCE and proceed to tertiary education.
The Father has never paid child support. He is unlikely to ever pay child support. As such, it is submitted on behalf of the Applicant that whilst not an inconsiderate property pool, the Applicant will be bearing all responsibility for the parties’ children and, as such, there should be an adjustment in her favour.
I am in complete accord with the submissions put on behalf of the Applicant. I believe there should be an adjustment in the Applicant’s favour of 5 per cent under section 75(2) factors to reflect the greater responsibility she will bear in the ongoing support of the parties’ four children.
I am therefore of the view that the parties’ realisable assets should be divided such that the Applicant retain 67.5 per cent and the Respondent retain 32.5 per cent.
SUPERANNUATION
The Applicant’s superannuation is $155,000.00. It is unknown whether the Respondent has superannuation.
PARENTING
Given the Respondent’s extreme violence both during and after the relationship, I will make orders with respect to parenting as set out in paragraphs [30] and [31] of this judgment as they are clearly in the children’s best interests.
PROPERTY
If the Applicant retains the monies in her bank accounts, the real estate in her sole name and all of her superannuation entitlements and is responsible for the mortgage, capital gains tax and outstanding school fees, she will retain 67.2 per cent of the parties’ asset pool. Whilst this is fractionally less than the 67.5 per cent adjustment referred to in paragraph 67 herein, it allows for a clean break of the parties’ financial affairs.
This outcome will give the Applicant and the children financial security. The Applicant can choose to sell one of the residential properties and utilise those funds together with the monies that she has saved to re-accommodate herself and the children. She can choose to retain the commercial property as an ongoing income stream to support herself and the children going forward, particularly in the parlous employment circumstances in which she currently finds herself.
The Respondent will have the benefit of his share trading, and if his messages to his children about the shares he owns are accurate, he may well have a considerable windfall coming his way.
Whatever happens in relation to the J Street, Suburb G property is not something that will be resolved in the short-term. In the mean-time, the Respondent has the benefit of an unencumbered property in which he can live and on which he pays nothing other than the outgoings.
The orders I intend to make are such that both parties will be able to get on with their lives with appropriate financial security and capital backing to enable them to live comfortably and productively going forward.
I am therefore more than satisfied that the orders and outcomes proposed by these orders are just and equitable.
I certify that the preceding seventy-five (75) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Bender. Associate:
Dated: 9 April 2021
Key Legal Topics
Areas of Law
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Family Law
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Property Law
Legal Concepts
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Remedies
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Fiduciary Duty
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Restitution
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Statutory Construction
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