B & Z
[2002] FMCAfam 179
•22 July 2002
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| B & Z | [2002] FMCAfam 179 |
| FAMILY LAW – Property – vested inheritance is an asset – reasonable for parent of a child with significant disabilities to relinquish paid employment – contact order made – parent needs to acquire a home in which to exercise appropriate contact – order for spousal maintenance discharged upon acquisition of home – ss.68F(2), 79(4), 75(2), 72, 74 Family Law Act 1975. |
| Applicant: | C R B |
| Respondent: | X F Z |
| File No: | PAM830 of 2002 |
| Delivered on: | 22 July 2002 |
| Delivered at: | Parramatta |
| Hearing Date: | 24 June 2002 |
| Judgment of: | Ryan FM |
REPRESENTATION
| Counsel for the Applicant: | Mr A Givney |
| Solicitors for the Applicant: | Heazlewoods Solicitors DX 4411 EPPING |
| Solicitor Advocate for the Respondent: | Mr R Cheung |
| Solicitors for the Respondent: | Rutland’s Law Firm Solicitors DX 29588 CHATSWOOD |
ORDERS
That all previous orders be and hereby are discharged.
That the parties shall forthwith do all acts and things and sign all documents necessary to sell the property situate at and known as
17 B Street, G in the State of New South Wales for sale by private treaty with a real estate agent at a price to be agreed upon between the parties and failing agreement to be determined by the president of the Real Estate Institute of New South Wales or his nominee.That the proceeds of sale pursuant to Order (2) above be disbursed as follows:
(a)Firstly, in payment of the costs of sale including the real estate agent’s fees and legal fees;
(b)To discharge the mortgage to the St. George Bank;
(c)In payment of any outstanding rates and charges;
(d)In payment of any capital gains tax payable by either party as a consequence of the sale of the property
(e)In payment of 40 per cent of the net balance to the husband.
(f)The remaining 60 per cent to the wife from which she is to pay to the husband $86,870.00.
The wife shall continue to pay mortgage instalments on the St George loan and pay all rates and taxes when they fall due.
If the monies received by the wife from the sale of the home are insufficient to pay the husband $86,870.00 then the wife shall pay to him the balance remaining at the same time as completion of the sale of the property.
That upon payment by the wife to the husband of monies due pursuant to these orders the husband shall simultaneously do all acts and things and sign all such documents as may be required to transfer to the wife all of his right title and interest in the property situate at and known as 26 N Street, G.
In the event that the wife fails to make the payment to the husband as provided in Order 5 then at the expiration of six weeks from when payment was due the parties shall do all acts and things and sign all of such documents that shall be necessary to sell the property situated at and known as 26 N Street, G in the State of New South Wales for the best price reasonably obtainable and cause the proceeds of the sale to be applied in the following manner and order:
(a)In payment of the costs incidental to the sale;
(b)In payment of outstanding rates and taxes;
(c)In payment of the amount then due to the husband plus interest thereon in accordance with the Family Law Rules calculated from the due date of payment to the date of payment;
(d)In payment of the balance then remaining to the wife.
That unless otherwise specified in these orders each party shall be solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party at the date of the making of these orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank’s record thereof, insurance policies are deemed to be in the possession of the party named as the life insured, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements.
That unless otherwise specified in these orders each party shall 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.
That if either party refuses or neglects to sign, within fourteen (14) days of a written request to do so any document necessary to effect the terms of these orders a Registrar or such other office or person as may be appointed by the Federal Magistrates Court of Australia is hereby appointed pursuant to the provisions of s106A of the Family Law Act to execute such documents on behalf of such party.
That the husband pay to the wife $150.00 per week by way of spousal maintenance. The first payment to be made within seven (7) days of the date of these orders. Commencing one week after settlement of the purchase of a home by the husband in his own name this order is discharged.
That the child K B born 28 April 1998 reside with the respondent wife.
That the husband have contact with the said child as follows:
(a)From 10.00am to 5.00pm each Saturday commencing forthwith;
(b)Upon the husband obtaining his own accommodation from 10.00am Saturday until 6.00pm each alternate weekend;
(c)For three hours on the said child’s birthday;
(d)In the event that Father’s Day falls on a non-contact weekend from 10.00am to 6.00pm each Father’s Day;
(e)From 10.00am to 6.00pm each alternate Christmas Day and from 10.00am to 6.00pm on Boxing Day in each other year;
(f)On the child commencing school, for one half of each school holiday period;
(g)Such other times as agreed between the parties.
SCHOOL HOLIDAY CONTACT:
(a)SHALL commence at 9.00am.
(b)SHALL conclude at 2.00pm.
(c)WILL BE calculated from the day after the last day of school until and including the day immediately before school resumes.
(d)Pupil free days are deemed to be school holidays.
(e)If a contact period occurs on a day adjacent to a public holiday, it shall be extended to include the public holiday. If the public holiday is a Friday it shall start at the usual time on the Thursday.
That the respondent wife deliver the said child to the home of the husband’s sister being 36 J Street, R at the commencement of contact and collect the child from the same address at the conclusion of contact. Once the husband obtains his own home, he shall pick up the child from the wife’s home at the commencement of contact and return the child to the same place at the conclusion of contact.
That each parent is restrained from removing the child from the Commonwealth of Australia without the written consent of the other parent.
That pursuant to section 65DA(2) of the Family Law Act 1975 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 Annexure A and these particulars are included in these orders.
That all exhibits tendered in these proceedings be returned at the expiration of one calendar month unless an Appeal is lodged.
That the Solicitor who issued any subpoena collects that subpoenaed material and returns it to the owner within seven (7) days.
That all outstanding applications are otherwise dismissed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
PAM830 of 2002
| C R B |
Applicant
And
| X F Z |
Respondent
REASONS FOR JUDGMENT
The proceedings
These are proceedings for the adjustment of property, for spousal maintenance and for parenting orders.
The application
C R B (“the husband”) filed an application for final orders on 7 March 2002. In essence the orders he sought were:
·Alternate weekend and special occasion contact.
·Contact for one half of each school holiday period once the child started school.
·An injunction restraining the removal of the child from the Commonwealth of Australia.
·That he pay to the wife $135,000 by way of property settlement.
·
That upon payment the wife transfer to him her interest in
26 N Street, G.
·That otherwise the parties retain all property in their respective names.
·That the wife’s application for spousal maintenance be dismissed.
X F Z (“the wife”) filed her response on 24 June 2002. In essence she proposed:
·The husband transfer to her his interest in 26 N Street, G for no consideration.
·That 17 B Street, G be sold and the net proceeds be shared equally.
·That the husband pay $150.00 per week spousal maintenance.
Exhibit D contained the minute of order in which the wife addressed the husband’s application for contact. It provides for alternate Saturday contact between 10.00am and 5.00pm and otherwise on special occasions. The wife opposes any order for overnight contact.
Short history
The wife was born on 22 January 1967 and is now aged 35 years. She was born in Guang Zhou in China and migrated to Australia in 1989.
The husband was born on 6 July 1968 and is now aged 34 years.
The parties met in 1990. They commenced cohabitation in 1993 and were married on 11 January 1997.
Their only child, K B (“the child”) was born on
28 April 1998.
The parties separated in August 2001. Since separation the wife and child have lived in the former matrimonial home at 26 N Street, G.
On 15 January 2002 an apprehended violence order was made at the Local Court at Parramatta for the protection of the wife[1]. The order includes statutory orders made under s.562BC of The Crimes Act 1990 and also orders that restrain the husband from harassing (inter alia) the wife or otherwise approaching her home or place of employment.
[1] Annexure B Husband’s affidavit 21.6.2002
On 12 April 2002 the parties entered interim consent orders which provided:
· That K live with the wife.
· That the husband have contact between 10.00am and 5.00pm each alternate Saturday.
· The court noted that pending the issue of a child support assessment the husband would pay $75.00 per week towards K’s support.
The issues
The primary issues are these:
·Who should have the home at 26 N Street, G;
·The effect of the wife’s care of the child;
·The wife’s capacity for paid employment;
·Whether the husband’s inheritance should be treated as an asset or financial resource;
·Whether contact should include overnight contact.
The background facts
The husband is a machine operator who works at P. He completed a Bachelor of Engineering degree at the University of Wollongong in 1992. At the time the parties commenced cohabitation he worked with BHP. He had no assets or liabilities of significance.
At the commencement of cohabitation the wife was undertaking a Diploma of Accounting part time at Sydney TAFE. She also worked for S Newspapers full time. She did not have any assets or liabilities at the commencement of cohabitation.
Upon cohabitation the parties lived together in rented premises at Burwood. They lived frugally and saved diligently. They purchased their home at 26 N Street, G in 1995.
The purchase of the home was funded from joint savings and a mortgage raised from the St George Bank. The mortgage involved an offset account into which their wages were paid. The wife concedes that the husband made a greater contribution to the repayment of the mortgage from his salary than she did. In 1998 the husband received a redundancy payment from BHP of $25,000. This money was paid to reduce the mortgage on N Street. Later he received $11,000 by way of partial distribution from his father’s estate. Those monies were also applied in reduction of the mortgage. By 2001 the mortgage on the N Street property was discharged.
From the husband’s income the parties purchased three parcels of Telstra shares, 700 in the husband’s name and 600 in the wife’s name. Later, the wife purchased another 900 Telstra shares. The wife used a draw-down from the offset account to do so.
After finishing work with S Newspapers in 1995 the wife then worked for six months on a newspaper in Maroubra before taking up part time work in Chinese restaurants for the latter half of that year. During 1996 she worked in an accounting firm and commencing mid-1997 worked with WTC Pty Limited until she finished in March 2002. She completed her Diploma of Accounting in 1995. Later she undertook distance studies through Charles Sturt University which course she discontinued following K’s birth.
In 1999, during a period of marital unhappiness the wife purchased a house at 17 B Street, G. She did not discuss its purchase with the husband until she had paid a deposit on it. She used the proceeds of sale of the 900 Telstra shares that had been purchased in her name and borrowed money from her mother and sister as a deposit. The purchase price was $164,000. The shortfall of $150,000 was borrowed from the St George Bank. The wife's plans for the B Street property included that it would provide a place for her mother to live when she was in Australia and should the parties separate she considered moving into it herself. The parties agree that the property has been rented from time to time and has been rented continuously for about the last twelve months. It is currently rented out for $165 per week. The mortgage repayments are $254 per week.
The wife gave up work for about three months following K’s birth. It was apparent shortly after K’s birth that their daughter had major health difficulties. K is profoundly deaf, epileptic and does not speak. No specific genetic diagnosis has been established. Both parents have spent many hours consulting doctors, attempting to maximise K’s health and abilities. Multiple agencies and practitioners have been involved in K’s care. It is unlikely she will ever attend mainstream classes and will probably require special education in a supportive school environment once she starts school.
Depending upon the demands of their work both parties were involved in K’s care prior to separation. The husband was able to be more substantially involved until he took up employment with P in July 1999. Thereafter he was no longer able to spend time with K in the morning before he left for work. When she was in Australia the wife’s mother cared for K. This supplemented special care provided by a private carer four days a week and later by a special childcare centre.
At separation, police removed the husband from the home. The wife and child have remained in occupation since then. The husband has lived continuously at his sister’s home at R. He lives with his sister, her husband and their four children.
The parties have not implemented a regular routine for contact since separation. Initially contact occurred each alternate Saturday for different lengths of time. It broke down completely in January 2002 and did not resume until the interim orders were entered on 12 April 2002. Contact has only occurred about three times since those orders were made.
Neither party has re-partnered.
Relevant law
The approach to the determination of an application under section 79 is well established by authority (In the Marriage of Lee Steere and Lee Steere[2]; In the Marriage of Ferraro[3]; In the Marriage of Clauson[4]); the process ordinarily involves a multiple part procedure. Firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing. Secondly, evaluating the contributions made by the parties as defined in section 79(4)(a) to (c) and the effect of any proposed order upon the earning capacity of either party. I must then evaluate the matters contained in section 75(2) insofar as they are relevant, any other order made under the Act affecting a party or child and any child support under the Child Support (Assessment) Act 1989 that a party to the marriage is to provide, or might be liable to provide in the future, for a child to the marriage.
[2] (1985) FLC 91-626
[3] (1993) FLC 92-335
[4] (1995) FLC 92-595
In determining what order the court should make under section 79, the court must be satisfied in all the circumstances that it is just and equitable to do so [section 79(2)]. It is the justice and equity of the actual orders that the court must consider. Russell v Russell[5].
[5] (1999) FLC 92-877
The wife makes an application for spousal maintenance. In Bevan and Bevan[6] the Full Court of the Family Court identified the process for assessing a claim for spousal maintenance. It said[7] this requires:
"1. a threshold finding under s.72;
[6] (1995) FLC 92-600
[7] at 81,981-82,982
2. consideration of s.74 and s.75(2);
3. no fettering principle that pre-separation standard of living must automatically be awarded where the respondent's means permit; and
4. discretion exercised in accordance with the provisions of s.74, with reasonableness in the circumstances" as the guiding principle."
A claim for spousal maintenance that is heard at the same time as an application for property adjustment adds an extra step to the process. The sequence of determining the applications is important and the property application must be determined before the spousal maintenance claim is considered. This is to ensure that the terms of any order made in the property claim are considered in the spousal maintenance application. Clauson supra.
In deciding the residence and contact arrangements that will promote the best interests of a particular child, the court must consider the various matters set out in section 68F(2). Its sub-sections comprise a list of matters that must be considered to the extent that each is relevant to the particular case. Paragraph (l) permits the court to take into account “any other fact or circumstance that the court thinks is relevant”. This ensures that the infinite variety of individual children’s circumstances can be addressed: B and B: Family Law Reform Act (1997) FLC 92-755.
Section 60B(2)(b) has particular relevance in these proceedings. It provides, in effect, that children have a right of contact, on a regular basis, with both their parents and other people significant to their care, welfare and development.
Subparagraph (b) refers to the right of contact on a regular basis. Fundamentally, it emphasises the desirability of contact. Regular contact carries with it a clear understanding that contact should be as frequent as is appropriate and by the various means which are considered to be in the children’s best interests.
Assets and liabilities as at the date of hearing
The parties reached agreement as to the value of most assets and the quantum of liabilities.
I find that the assets, liabilities and financial resources of the parties as at the date of the hearing are as identified in the following table:
| Assets as at the date of the hearing | $ |
| 26 N Street, G (agreed) | 280,000 |
| 17 B Street, G (agreed) | 265,000 |
| National Australia Bank account (H) | 6,500 |
| Telstra Shares (H) | 3,800 |
| TAB shares (H) | 750 |
| 2000 Ford Motor Vehicle (H) | 25,000 |
| 1996 VW Van (H) | 3,000 |
| St George Bank account (W) | 4,000 |
| AXA Life Insurance (W) | 4,000 |
| Husband’s interest in late father’s estate | 27,000 |
| TOTAL ASSETS | 619,050 |
| Liabilities as at the date of hearing | $ |
| St George mortgage secured on B Street | 138,000 |
| Capital gains tax on B Street | NK |
| Visa card (H) | 3,500 |
| Ford Credit (H) | 16,000 |
| Visa card (W) | 1,000 |
| TOTAL LIABILITIES | 158,500 |
| NETT ASSETS | 460,550 |
| Financial resources – AMP superannuation (H) | 24,040 |
The value of the contents of the former matrimonial home is not in evidence. The husband has acquired a small quantity of household goods, which he values at $1,000. As the majority of household goods apparently remained with the wife at separation it is probable that the contents of the home are at least of equivalent, if not greater, value than those in the husband’s possession. Because the court is not in a position to make findings as to their precise identity I have not made any findings about the value of household effects. It would be unjust to include the husband’s modest value whilst disregarding the wife’s household goods.
In the event that B Street is sold capital gains tax is payable. This liability must be taken into account in determining the net available assets. As the quantum payable is unknown, upon its sale the net proceeds must take into account that the liability must be met.
The husband’s father died in 1998. He and his siblings are beneficiaries of his late father’s estate. He has already received an initial distribution from the estate and anticipates a further distribution from the sale of a farm and residence. He anticipates receiving $27,000. His counsel submitted that his interest in his late father’s estate should be treated as a financial resource. Interests in financial resources must be taken into account by the court in making property adjustments. This does not mean that the court may adjust financial resources. Interests in property must be adjusted to take into account economic advantages conferred on a party by their financial resources.
“Property, in relation to the parties of a marriage or either of them” is defined in section 4 of the Family Law Act as property to which a party of the marriage is entitled whether in possession or reversion. Pursuant to section 79(1) of the Act, a court may adjust only the property interests of the parties. However, other present or prospective “financial resources” that do not constitute property may be taken into account pursuant to section 79(4)(e) which requires that the court take into account “the matters referred to in subsection 75(2) so far as they are relevant” when considering what property orders should be made. Section 75(2)(b) requires that “the income, property and financial resources of each of the parties” be taken into account. The case law indicates that financial interests that may constitute financial resources rather than property include:[8]
·the potential “interest” of a beneficiary under a family trust;
·prospective superannuation benefits;
·a non-transferable business licence;
·future long-service leave entitlements;
·an ability to control assets as a company director, shareholder, trustee or appointor of a trust.
[8] As discussed by Anthony Dickey in Family Law (4th Edn), Lawbook Co., 2002 at pp. 720-721.
In Bonnici and Bonnici (1992) FLC 92-272 the Full Court of the Family Court stated (at p.79,020) that “[t]he expression “[financial] resource” is and should be confined to those interests which do not fall into the definition of property as such to which the parties have a present entitlement”. The Full Court held (at p.79,020) that an inheritance received by the husband was “property” and considered whether it should be treated like other property in which the parties have an interest.
In White and Tulloch v White (1995) FLC 92-640, the Full Court of the Family Court (per Fogarty, Kay and Hilton JJ) stated (at p.82,458) that they “do not consider that a prospect of an inheritance can be regarded as a “financial resource”” as that term “connot[es] some degree of entitlement to, control over, or relative certainty of receipt of property.” A will “is a mere expression of intention at the time it is made and may be freely revoked or altered … and … it has no legal effect until the death of the testator.”
I am satisfied that I should treat the inheritance as property. As the husband has already received a partial distribution it is clear that either a grant of probate or administration has been made. At present the balance of the remaining estate is vested in the executor or administrator. The executorial duties require that the terms of the will must be given effect to. The executor is thus “a statutory trustee of the assets of the estate to hold them according to the trusts and dispositions of such will”.[9] As a consequence the husband has an enforceable right to his interest in the estate. This does not mean that he has a legal or beneficial interest in the farm or residence per se before completion of administration. He can force completion and distribution of the assets and net proceeds. In circumstances where he concedes the value of his interest in the estate, the nature of his interests in specific assets is irrelevant.
[9] Burns Philp Trustee Co v Viney [1981] 2 NSWLR 216 at 225 per Kearney J.
Section 79(4) contributions
Neither party had assets or liabilities at the commencement of cohabitation. All of their assets have been acquired during the course of their marriage. The husband was in full time employment throughout the period of the marriage. Other than short periods of part time work and three months maternity leave the wife also worked full time throughout the marriage. She stopped work in March 2002. When she stopped working the wife’s salary was approximately $25,000 per annum. By comparison the husband was earning approximately $51,000 as base salary. The comparative nature of their employment satisfies me that the husband earned greater income during the course of the marriage than the wife did. Neither party suggests that the other wasted monies earned by them. Indeed the acquisition of assets suggests that both saved diligently throughout the marriage. Both lump sump payments received by the husband from his late father’s estate and the BHP redundancy were applied directly to reduce the household indebtedness.
I am satisfied that both parties applied the entirety of their income to the betterment of the family.
The wife’s purchase of B Street was funded in part by monies borrowed from her mother and sister. Apparently she has repaid those monies and there is no debt owing as a consequence of the borrowing. B Street has appreciated in value since its acquisition. The husband made a direct financial contribution to the acquisition of B Street to the extent that he contributed to the overdraft payment, which funded the third parcel of Telstra shares. After B Street was acquired, the mortgage has been repaid either in whole or in part from the wife’s wages and savings. Clearly the drain on her wages and savings has been reduced for those periods that the property was tenanted. However, the husband made an indirect financial contribution by shouldering a greater financial responsibility for the family and the repayment of the N Street mortgage. This freed up the wife’s wages, thereby enabling her to make the mortgage repayments and meet other outgoings on B Street. Without his indirect contribution it is unlikely that the wife could have maintained B Street.
The wife made no direct or indirect financial contribution to lump sum redundancy or inheritances received by the husband.
Thus the husband’s financial contributions significantly exceeds the wife’s when evaluated comparatively.
Neither party asserts that there were any significant improvements to N Street after its acquisition. When McLarens inspected the property it was reported as being in “fair condition only, in need of general internal and external paint, maintenance and upgrading of facilities”[10]. Whilst both parties contributed to the cleaning of the interior of the house, the wife’s contribution was slightly greater than the husband’s were. He maintained the exterior of the property to the extent that he undertook gardening and lawn mowing. More substantial work was carried out at B Street. Using an unqualified tradesman the wife organised and paid for extensions to the property. McLarens consider this work “structurally deficient and unlikely to conform to council’s building codes”. Whilst this work may have increased the marketability of the property for rental purposes, the evidence does not satisfy me that it did, it is unlikely that it contributed to the increase in capital value of the property. This is because the property is located in an area where property is being purchased for its land value content for future redevelopment and modification. The husband carried out minor repairs and maintenance, painting the lounge room and repairing the kitchen cupboards. Other than the wife’s financial contribution neither party contributed to the renovations to any significant degree. Overall, I am satisfied that neither party made any meaningful non-financial contributions, either directly or indirectly, to the acquisition, conservation or improvement of any property. Such contributions as were made were equal.
[10] Exhibit A
Both parties contributed to the welfare of the family. However, because of his working hours the wife had greater responsibility for K’s care and her contribution to the welfare of the family is comparatively greater than the husbands. Since separation, other than for a few short periods of contact, she has been exclusively responsible for K’s care. Prior to separation, whilst both parties undertook various household duties, the wife did more housework than the husband did. He focused more substantially on his own laundry and his own meals. He did the washing up when he came home from work and helped with the grocery shopping. This was consistent with the longer hours that he worked. He was more substantially involved in K’s care during the first year of her life and complemented the care provided by the wife, her mother and paid carers. His sister also helped care for K, babysitting for them quite regularly. Ultimately I am satisfied that the wife’s overall contribution as home maker and parent significantly exceeds the husband’s.
The orders I propose will not affect the earning capacity of either party.
After separation the wife applied for an administrative assessment of child support. She did not do so immediately. The parties agreed that pending an assessment the husband would pay seventy-five dollars ($75.00) per week child support. The details of any child support assessment issued have not been provided to the court. However, the husband’s financial statement[11] reveals that he pays one hundred dollars ($100.00) per week child support. As this amount is greater than the previously agreed amount, I infer that this is the amount required pursuant to an administrative assessment. I am satisfied that the husband will honour his obligations to pay child support and continue to make a proper contribution towards K’s support. His obligation to contribute to K’s support will, as a consequence of her disabilities, continue at least until she is 18 years old.
[11] Filed 21 June 2002
I find, therefore, that the parties’ total contribution should be assessed as being 60 per cent as by the husband and 40 per cent as by the wife. The husband’s greater income combined with the inheritance have been pivotal to the value of the assets that comprise the bulk of the available assets. This must be properly recognised. The remaining distribution from his late father’s estate must be given its full dollar value and is a contribution made solely by the husband.
Section 75(2) factors
Subsection (a) — The husband is 34 years old and is in good health. The wife is 35 years old and is also in good health. I make no adjustment pursuant to the subsection.
Subsection (b) — The husband works full time as a machine operator. In addition to his salary he has the opportunity from time to time to earn additional income from overtime. He has a base salary of approximately $51,000 per annum. Other than income derived from overtime he has no other source of income. He pursues a hobby fixing his old Volkswagon and otherwise owns a car, has some small savings and no other property of value. I have already made findings about the value of his superannuation and interest in his later father’s estate. I am satisfied that he has the physical and mental capacity to continue to work full time earning at least a comparable income to that which he currently draws for many years to come. During the years she worked at WTC the wife earned approximately $25,000 per annum. She has numerous skills including those necessary to work in a restaurant; as a clerk and cleaning: all of which reflect her work history. Additionally, she has educational qualifications in accounting that she utilised for about one year in 1996. Earlier this year K developed epilepsy. The wife sought more recreation leave or leave without pay from her employer so that she could be with K. Her request was refused. As a consequence of her need to be with her daughter, the wife resigned. She agreed with the husband’s counsel that she could go back to work part time at some time in the future. She contemplated that this may coincide with K starting school. Whether she returned to work full time or part time, it is unlikely that the wife will earn an income comparable to that earned by the husband, either in the short term or the long term. I make an adjustment pursuant to the subsection in favour of the wife.
Subsection (c) — K is 4 years old. There is no dispute that she will continue to live with the wife. The wife’s decision to give up paid employment arises directly from her care of K. It is difficult to know what the future holds for K’s health. There is no suggestion that she has a reduced life expectancy. K requires intense occupational therapy and when she was only 5 months old underwent major surgery to have dense cataracts removed. She requires a hearing aid and now suffers epilepsy. She has major global delays and there is no sign that she is able to talk. Dr M, K’s paediatrician, reported in August 2000 that “it would probably be far more satisfactory for K to have more time spent with both parents”. This is because time with her parents is likely to enable K to make greater progress because of consistent care and attention by a parent. Whilst there has been some improvement in K’s gross motor skills, her complex range of disabilities are still profound. On balance, I am satisfied that K benefits from her mother’s additional time. Although when K starts school the wife is hopeful that she may return to some part time or even full time employment, she may never achieve more than a resumption of part time employment. Caring for K is more demanding than caring for a child who does not have her disabilities. This will impinge upon the wife’s capacity to work full time and may limit the hours that she can work part time. I find that this subsection requires an adjustment in the wife’s favour.
Subsection (d) — Both parties have a duty to maintain K. Each has the commitments identified in their financial statements. These commitments are modest and will only enable each to have a modest standard of living. The husband plans to re-enter the property market, either by acquiring N Street or otherwise buying his own home. His weekly cost of living will increase should he do so. Although I do not know precisely what amount of money he will need to borrow, it seems likely that it will be no less than about $135,000. Thus he will have weekly mortgage repayments of at least $207[12]. The wife could live in the B Street property which, after payment of her section 79 entitlement would enable her to all but discharge the mortgage. Thus her average weekly expenses would reduce. However, the wife considers the property is unsuitable and does not wish to live there whilst she has responsibility for K. This is a reasonable decision in my view. I make an adjustment in favour of the wife pursuant to the subsection.
[12] Paragraph 40 Husbands affidavit 21 June 2002
Subsection (e) — Other than already identified, neither party has a responsibility for any other person. I make no adjustment under this subsection.
Subsection (f) — The wife receives a social security benefit in the sum of $330.00 per week: $214.00 by way of supporting parents benefit and $115.00 by way of family assistance. She does not have any superannuation entitlement. I have already made findings about the husband’s superannuation entitlement. He is comparatively young and will not be eligible to receive his benefits for at least twenty-five years. I make no adjustment under this subsection.
Subsection (g) — Since separation both parties have suffered a diminution in their standard of living. The husband is living in his sister’s home and whilst the physical surroundings are appropriate, he does not have exclusive use of them. By comparison, the wife has remained living in the former matrimonial home and has the exclusive use of the household furniture. Neither party obviously spends money on extravagances, nor are they wasteful. Both have been able to maintain small savings. I make no adjustment pursuant to the subsection.
Subsection (h) — I make no adjustment under this subsection.
Subsection (j) — I make no adjustment under this subsection.
Subsection (k) — I make no adjustment under this subsection.
Subsection (l) — The wife’s evidence, which I accept, is that she wishes to be available as a full time parent for K and to be available for her on a full time basis at least until K starts school. Thereafter she is hopeful that she may able to work part time. Whether or not she is able to return to work part time is problematic. I am satisfied that she only has a limited opportunity to do so. Should she returned to part time work, at some stage in the future, she may reasonably limit her hours of employment to approximately coincide with school hours. Probably no more than two or three days per week. This is commensurate with the demands parenting K make on her. The nature of her skills and training ought to reasonably enable her to take up some part time work, subject to her freedom to do so. I make an adjustment under this subsection in favour of the wife.
Subsection (m) — The husband resides with his sister and her family. Other than the payment of board there is no other financial relationship between them. From time to time the wife’s mother lives with her. Otherwise, she lives in China or with other siblings in different parts of the world. I make no adjustment pursuant to this subsection.
Subsection (n) – The orders that will be made will result in the wife having the N Street property which will carry only a small or possibly no debt. The husband will be able to re-enter the property market eventually but will need to raise a sizeable mortgage to do so. I make no adjustment under this subsection.
Subsection (na) — The husband pays $100 per week child support. He will be liable to pay child support for approximately thirteen more years. I make no adjustment under this subsection.
Subsection (o) — There are no other facts or circumstance that I take into account.
Subsection (p) — This issue does not arise.
Having regard to all of the section 75(2) factors I find it appropriate that there should be an adjustment in the wife’s favour having regard to section 75(2)(b), (c), (d) and (l). The appropriate adjustment to make in the wife’s favour is 20 per cent.
Section 79(2) — Is this a just and equitable outcome?
I find that following the parties’ eight and half year’s cohabitation that their contributions were 60 per cent in favour of the husband and 40 per cent in favour of the wife. The wife will have the primary ongoing responsibility for the care of the parties’ daughter who is only 4 years old. This responsibility will impinge upon her capacity to participate in the full time and part time workforce for years to come. The husband has secure and appropriately paid employment. I have made detailed findings concerning the application of section 75(2) and do not repeat them. Balancing all these factors, I find that it is appropriate that the parties’ net assets should be divided as to 60 per cent to the wife and 40 per cent to the husband.
That the outcome of the application of s.79(4) and s.75(2) has resulted in a distribution favourable to the wife I am satisfied is just and equitable in the meaning of s.79(2). The reason for that is that the s.79 exercise requires that I give proper weight to the wife’s contribution as a home maker and to her financial future having regard to her care of K.
Both parties wish to live in N Street. Although only marginally so, it is the superior property. The wife lives in the home with K and believes that this familiar environment contributes to K’s wellbeing. The property has a nice rear yard that K plays in. Importantly, from the wife’s point of view, neighbours are aware of K’s disabilities and keep an eye out for her. Thus when K has run out of her front yard, neighbours have returned her to the wife. Personally the wife feels supported by friends and neighbours. Whilst the husband agrees that this is so, he does not believe that the wife will remain in the home. I am satisfied that she has previously considered moving to Epping or into B Street. However, I accept her evidence that she has decided that the advantages to K and her capacity to parent K have influenced her considerations and that she now plans to remain in N Street for the foreseeable future. I am satisfied that she should have the opportunity to do so. Ultimately no substantial submissions were made that persuaded me that she should vacate N Street and the husband have it.
Thus B Street will be sold. Neither party wishes to continue to own it.
As a result of the orders I make, the wife will remain in the former matrimonial home and B Street will be sold. Although B Street has an agreed value, the net proceeds cannot be known. The capital gains tax liability must be assessed and paid from the net proceeds of sale prior to the net realisable value being determined. So too must the selling costs and repayment of the mortgage. The wife will thus retain assets comprising the home, her bank account and her AXA life insurance, the nett value of which is $287,000.00. Sixty per cent of the net assets entitle her to assets valued at $276,330.00. The husband will retain his Telstra and TAB shares, his National Australia Bank account, motor vehicles and interest in his late father’s estate which assets less his debts are valued at $46,550.00. He is entitled to receive assets with a net value of $184,220.00. Thus there must be an adjustment to the husband taking into account the assets that he retains. The majority of this adjustment will come from the wife’s 60 per cent of the proceeds of sale of B Street. The adjustment is $86,870.00. On an agreed value of $265,000.00 taking into account the costs of sale, capital gains tax and discharge of the St George mortgage it is apparent that the wife’s 60 per cent may not be sufficient to satisfy this payment. Therefore upon the sale of B Street when the wife’s 60 per cent is paid to the husband there may still be an amount due to him. This adjusting figure is the amount the husband needs to receive to give him 40 per cent of the totality of the assets having regard to those that he retains. This money must be paid at settlement of the sale of B Street. If the payment is not made the wife will have six additional weeks within which to pay out her obligations to the husband at the expiration of which time the former matrimonial home must be sold if she is still in default.
Spousal maintenance
The wife brings an application under s.74 and s.72 for the payment of spousal maintenance. The husband opposes her application, challenging her need and alleging that he is not reasonably able to pay maintenance. His counsel challenged the bona fides of her decision to relinquish her employment in March 2002. In essence, it was submitted that the wife had been able to work since K’s birth and ought to continue to do so. Because of the private and community assistance that can be obtained for K the wife could return to work if not full time, then at least part time. I do not accept the submission. It underestimates the physical and emotional demands that caring for a child with significant disabilities places on a parent. I am satisfied that the wife’s decision to give up employment is motivated only by her commitment to her daughter. In this regard the onset of epilepsy has been the factor that tipped the balance in favour of the wife’s decision to give up work. She is acutely distressed by her daughter’s increased health difficulty and is focused on trying to maximise the child’s quality of life. The demands that K places upon her when she is with the wife impact significantly on the wife’s capacity to work while K is at preschool and probably also school. Not only is the wife tired by the physical demands and strain of caring for K, but she must also do many of the household chores, including preparing food, whilst K is at preschool. This is because when she is at home K requires individual attention. I am satisfied that the wife has established, because of her care of K, that she is unable to adequately support herself. I must disregard her Centrelink benefit. Thus her only income is the rental received from B Street. It is absorbed into the mortgage repayments on the property. She is personally liable to make the payments and must do so until its sale.
In her financial statement[13] the wife reveals that she has weekly expenses of $423.00. This includes $254.00 for the St George mortgage. She claims a greater sum ($260) for the same mortgage as a fixed expenditure. It is a fixed expenditure and I have taken the lesser sum into account as a fixed expenditure and not as part of her average weekly expenses. To do otherwise would result in double counting. I have not included her visa card repayments, as this appears to be a credit facility used to pay expenses already included as either fixed or average weekly amounts. Otherwise the amounts claimed are reasonable and necessary. Thus I am satisfied she has fixed weekly expenses of $301.00 and average weekly expenses of $170.00. Once the B Street property is sold she will be relieved of her liability to make the mortgage payment to St George. As a consequence of the monies she must pay to the husband she may need to borrow about $10,000.00 – $15,000 to do so. It would not be reasonable to expect her to exhaust her modest savings of $4,000 in doing so. As she has an established relationship with St George Bank it is likely she will maintain that relationship and borrow the shortfall from them. Assuming a standard variable loan at 5.99 per cent[14] she will have mortgage repayments of approximately $25.00 per week (assuming $10,000.00 is borrowed). Thus her weekly expenses will reduce to $242.00. She will have no income that I can take into account. I accept that the child support is entirely expended meeting K’s needs.
[13] Filed 24 June 2002
[14] Australian Financial Review 17 July 2002
The husband has a gross income of approximately $980.00 per week. He has total fixed expenditure of $642.00 and average weekly expenses of $145.00. His expenses are also modest and reasonable. He has the capacity, until he raises borrowings in order to buy his own premises, to pay the amount sought by the wife. In the event there is a gap between payment by the wife to him of the monies pursuant to s.79 that he is entitled to and his purchase of real estate, he will have about $90,000 that will result in a pre-tax return of $87.23[15]. This assumes an investment return of 5.04 per cent. Thus during the interregnum his capacity to pay spousal maintenance is at least maintained.
[15] 90 day bank bill rate Australian Financial Review 17 July 2002
However, once the husband has purchased his home his capacity to pay spousal maintenance is reduced. He will no longer pay board to his sister ($150.00 per week). He will have mortgage repayments of at least $207.00 per week as well as costs associated with house repairs, electricity, telephone, rates and taxes. Using the figures identified by the wife this could amount to $75.00 per week. His expenses will thus be $919.00 per week. His reduced capacity to pay spousal maintenance must be reflected in the orders the court makes. It is important that he lives in accommodation that includes a yard and is a home that can be made comfortable for K. Assuming that to do so he does not need to make mortgage payments greater than $207.00 per week I am satisfied that he has the capacity to make a payment by way of spousal maintenance in the sum of $50.00 per week.
The issue then is whether it is reasonable that he do so. As a consequence of the s.79 orders the wife will own a home that may have only a very small debt attached to it. The husband will incur significant debt comparatively if he is to re-house himself. He must furnish his home while the wife will have the majority of their jointly acquired household goods. Quickly he will have extra costs associated with contact. These additional expenses are reasonable and necessary. Ultimately the asset position of the parties is such that once the husband has acquired a home the order for spousal maintenance should be discharged. Should either party’s circumstances change in a way that justifies a variation or discharge of the order, they can apply to do so. Any other outcome requires speculation of future events.
Determining the child’s best interests
Both parents are profoundly committed to their daughter’s welfare. For them parenting their only child has particular responsibilities beyond those that parents ordinarily face. This is because of K’s disabilities.
Since her birth both parties have contributed in different ways to her wellbeing. The wife has been more substantially involved in K’s care and almost exclusively responsible for her since separation. I was left with the strong sense of quiet despair from the husband as he has found himself increasingly marginalised from involvement caring for his daughter. During the first twelve months of K’s life he was intimately involved in her care. He attended doctors and therapists as the parents searched for advice and information about the increasingly apparent health difficulties K suffered. His working hours enabled him to be at home in the mornings and he involved himself with feeding K, changing her, bathing her for example. Generally he gained the skills necessary to take care of a baby. His involvement with K in this first year of her life is important as during this stage of a child’s development they can attach securely to a parent. From a parent’s perspective they too can establish a bond with a child that is real and potentially life long. Unfortunately, the wife underestimates the strength of the husband’s attachment to their daughter. Their relationship did not diminish as a consequence of his changed employment and more limited opportunity for substantial involvement in K’s care day by day. He formed part of K’s life on weekends, during holidays and the beginning and end of work days. Thus he was a familiar and, I am satisfied, loving figure in this child’s life until the parties’ separation.
The circumstances surrounding separation are not completely clear to me. An incident occurred between them as a result of which the husband was charged with assaulting the wife. On an application made by police the husband consented to an interim apprehended domestic violence order. The order was made initially in August 2001 and then continued on 23 October 2001. A second incident occurred on the day of separation as a result of which the husband was charged with breaching the apprehended violence order that had been made earlier that day. Both matters were listed at Parramatta Local Court on
23 October 2001. That is the day on which the husband consented to an interim order.
Between separation and 15 January 2002 the husband exercised contact to K each alternate Saturday. The wife delivered K to the husband’s sister’s home at 10.30am and collected her at about 2.00pm. On some occasions the visits were extended and ended as late as 6.00pm.
On 15 January 2002 all domestic violence matters were completed. The husband entered a plea of guilty to the charges of assault on the wife and breaching the apprehended domestic violence order. He was fined $500 in respect of each charge. He consented to a two year final apprehended domestic violence order. Since separation there have been no further incidents of aggressive behaviour or violence by the husband. Against a background free of violent or abusive behaviour, other than that to which I have referred, and nothing similar since separation, I am satisfied that the incidents at separation are not an appropriate measure of the husband’s usual behaviour. These were isolated incidents that occurred on one day. The husband is remorseful, evidenced by his testimony and his plea of guilty. On balance I am satisfied that there is no continuing risk of violence to the wife. In spite of the incidents at separation I am satisfied he is an appropriate role model for the child.
There then appears to have been a gap in contact. The husband made an application for interim contact which resulted in an interim agreement. Contact resumed on 13 April 2002 between 10.00am and 5.00pm. Contact has not always taken place in accordance with the orders. At times the contact has been for reduced periods and on a number of occasions the husband has been unable to exercise it. This, the wife submits, reflects a lack of commitment by him to the child. I do not agree. Contact is exercised in difficult circumstances, as the husband does not have his own accommodation. His sister and her husband are welcoming and make their home available for contact. However, the husband is sensitive to the fact that this is not his home and that he must have regard to the needs of his sister, her husband and their four children. Because K can be disruptive he has not taken full advantage of the contact available as doing so has caused tensions in his sister’s home. This underpins the importance of his obtaining his own accommodation where he can exercise more extensive contact with the child. Nonetheless, during the contact that has taken place, he has been able to maintain his relationship with K and take care of her. I am satisfied he has the capacity to attend to her physical and emotional needs during contact.
In making this finding I considered carefully the evidence about K’s disabilities. The parties have a different approach as to managing their daughter’s disabilities. For her own reasons the wife has decided to consider and then disregard important medical advice about K. The wife is deeply distressed that K has developed epilepsy. She has received clear advice from Dr C. Poon (K’s paediatrician) that the child requires anti-convulsant medication such as Tegretol if her seizures are to be managed. The wife does not agree and is consulting a practitioner of Chinese medicine. Her practitioner is not medically qualified. The wife has great faith in his ability to help K with the seizures. This appears a highly risky strategy that if unsuccessful could have long term adverse effects on K. I was impressed with Dr Poon’s evidence. It is essential that, as he requests, the wife confer with him further. It may be that adjusting dosage levels will ameliorate some of the side effects the wife observed from Tegretol and still give K the seizure control she requires. The husband’s dilemma is apparent. He does not seek to criticise the wife or her commitment to their daughter. He is desperately concerned that the wife has decided to reject Dr Poon’s advice. The court is not asked to adjudicate an application for specific issues orders that may address this apparent dispute between the parties. This is probably because the parties anticipate that they can reach an agreement themselves.
K has hearing aids that the wife will not use. She says this is because they caused K to have an ear infection and that by shouting at her K can hear. Again, this strategy does not have support from K’s doctors, St Anthony’s school, nor the New Childrens Hospital Deafness Centre. In the face of the wife’s refusal to use the hearing aids, the hearing aids are left at school and K uses them whilst she is there. The husband is a more enthusiastic supporter of K’s use of hearing aids than is the wife. That he might use the hearing aids whilst K is on contact with him does not undermine the desirability for contact. Indeed, it enhances it. This is because K will be able to hear more easily and engage the world around her to a much greater extent than if she is deprived of them.
The wife feeds K mashed food that she goes to great lengths to prepare. In the husband’s care, K is able to eat solids: food that a child of her chronological age would usually eat. This distinction does not support a restriction on contact, rather it supports greater contact. That is because the husband’s approach is one that is likely to maximise K’s abilities and minimise the points of difference between her and other children that she will come in contact with, at school for example.
One of the wife’s great fears is that should overnight contact occur K may have a seizure that the husband will not respond to. I was impressed by his awareness of his daughter’s disabilities and their management. I accept that quick parental intervention, perhaps also hospital intervention, is necessary to minimise the possibly dramatic health consequences of an epileptic seizure. The best remedy is prevention, which is precisely the reason Dr Poon prescribes Tegretol. There is an inconsistency between the wife’s refusal to allow the child to receive anti-convulsant medication and her claim that the husband may fail to protect the child from seizures.
K will benefit from a substantial relationship with her father. As all children are K is entitled to a relationship with both of her parents. I accept that she plays happily with him and he has the skills to understand her needs and respond to them. They communicate even though K cannot speak. K can let him know what she wants from him because of the quality of their communication.
More extended contact than the wife proposes will alleviate some of the burden that caring for K is and is likely to continue to be. Whilst both parents accept this burden willingly, it needs to be managed to maximise their capacity to do so. In the past the wife has readily called upon her mother, the husband’s sister and paid carers to care for K. More importantly, the husband was involved prior to separation. His skills have not diminished and K should have the opportunity to enjoy the relationship that is available to her. Extended contact may mean that fewer other adults need to be as extensively involved in K’s care than has been the case in the past. Hence the likelihood that K may require respite care in the future is lessened.
The orders proposed by the husband are orders that are demonstrably in K’s best interests. She will have the opportunity to maintain her relationship with her father and for it to grow. Once he has his own accommodation they can enjoy longer periods that include overnight contact and eventually half school holiday contact. The wife will have a responsibility to ensure that current information concerning K’s health that she has is provided to the husband. He has a responsibility to independently ensure that he maintains sufficient contact with K’s medical practitioners that he is aware of treatment and medical interventions required for their daughter. I am satisfied that he will do so. Ideally the parents will implement the medical advice that they receive and have a consistent approach to their daughter’s care.
For these reasons I make the orders identified at the start of this judgment.
I certify that the preceding ninety-one paragraphs (91) paragraphs are a true copy of the reasons for judgment of Ryan FM
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