BARAKAT & FARID
[2020] FCCA 2708
•2 October 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| BARAKAT & FARID | [2020] FCCA 2708 |
| Catchwords: FAMILY LAW – Interim Spousal Maintenance – assessment of need and capacity. FAMILY LAW – Interim Property Distribution – whether just and unsuitable. |
| Legislation: Family Law Act 1975 (Cth), ss.60B, 60CA, 60CC, 60CG, 61DA, 65DAA, 72, 74, 75, 80 |
| Cases cited: Cao & Cao [2018] FamCAFC 252 Goode & Goode (2007) 36 Fam LR 422 Hall & Hall [2016] HCA 23 Kajewski & Kajewski (1978) FLC 90-471 Keats & Keats [2016] FamCAFC 156 Lesley & Lesley [2015] FamCA 894 Mazorski & Albright [2007] FamCA 520 MRR v GR [2010] HCA 4 Sadlier & Sadlier [2015] FamCAFC 130 Salah & Salah [2016] FamCAFC 100 Slater & Light [2011] FamCAFC 1 |
| Applicant: | MS BARAKAT |
| Respondent: | MR FARID |
| File Number: | PAC 2275 of 2020 |
| Judgment of: | Judge Obradovic |
| Hearing date: | 17 September 2020 |
| Date of Last Submission: | 17 September 2020 |
| Delivered at: | Parramatta |
| Delivered on: | 2 October 2020 |
REPRESENTATION
| Counsel for the Applicant: | Ms Shea |
| Solicitors for the Applicant: | Somerville Legal |
| Counsel for the Respondent: | Ms Windsor |
| Solicitors for the Respondent: | Stewart & Associates |
PENDING FURTHER ORDERS
Orders 2, 3 and 4 of the Orders made by consent on 27 May 2020 are suspended.
The children W born in 2009, X born in 2010, Y born in 2012 and Z born in 2017, shall spend no time with the respondent.
The respondent is to pay to the applicant, by way of spousal maintenance, a lump sum of $28,000 into the applicant’s Westpac Esaver account BSB: ..., Account Number: ...59, by the parties doing all acts and things necessary to authorise and direct J Lawyers to release such sum to the applicant.
The parties are to do all things and sign all documents necessary to authorise and direct J Lawyers to transfer to the applicant (or as nominated by the applicant) the sum of $100,000 to be categorised at a final hearing or settlement of the matter.
Within 48 hours of the date hereof the respondent is to deliver the Motor Vehicle 1 (previously with registration Number ...) to the applicant by delivering the vehicle to B Smash Repairs noting that the Registration Number may have been varied by the respondent without the prior knowledge of the applicant.
Within 14 days of the date hereof, the respondent is to provide, by way of disclosure, copies of the following documents:
(a)Bank statements evidencing the deposit applied by the respondent towards the acquisition of the property situated at C Street, Suburb D;
(b)The respondent’s individual tax returns for the financial years ending 30 June 2019 and 30 June 2020;
(c)The respondent’s Notice of Assessment for the financial years ending 30 June 2019 and 30 June 2020;
(d)The complete financial accounts (including balance sheets and profit and loss statements) for the financial years ending 30 June 2018, 30 June 2019 and 30 June 2020 for:
(i)E Pty Ltd;
(ii)F Pty Ltd; and
(iii)Any other business in which the respondent has an interest.
(e)The last four business activity statements lodged by:
(i)E Pty Ltd;
(ii)F Pty Ltd; and
(iii)Any other business in which the respondent has an interest.
(f)Bank statements for all accounts (including credit card accounts) in the name of the respondent solely or jointly with any other person or entity for the last 12 months;
(g)Bank statements for all accounts (including credit card accounts) in the name of:
(i)E Pty Ltd;
(ii)F Pty Ltd; and
(iii)Any other business in which the respondent has an interest.
for the last 12 months;
(h)Copies of all current motor vehicle registration documents and insurance policies for all motor vehicles in which the respondent has an interest whether the said motor vehicle/s is registered under:
(i)The respondent’s name;
(ii)E Pty Ltd;
(iii)F Pty Ltd; and
(iv)Any other business in which the respondent has an interest.
(i)For the last 12 months, a copy of statements for finance or chattel mortgage in relation to the Motor Vehicle 1;
(j)The respondent’s home loan application in respect of the purchase of the property situated at G Street, Suburb H; and
(k)The tenancy application and tenancy agreement in respect of the husband’s current place of residence.
THE COURT FURTHER ORDERS
Pursuant to s.68L of the Family Law Act1975 an Independent Children’s Lawyer is appointed for W born in 2009, X born in 2010, Y born in 2012 and Z born in 2017 and request the Legal Aid Commission of NSW to provide such representation.
The parties are to provide to the Independent Children’s Lawyer, within 48 hours of receiving notice of their appointment, all documents thus far filed by them in these proceedings together with all existing orders and copies of any relevant reports.
The parties are to provide to the Independent Children’s Lawyer immediately upon notification of their appointment, a copy of any subpoena issued in the proceedings.
The matter is listed for directions at 9.30am on 27 November 2020 following the appointment of the Independent Children’s Lawyer.
IT IS NOTED that publication of this judgment under the pseudonym Barakat & Farid is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
PAC 2275 of 2020
| MS BARAKAT |
Applicant
And
| MR FARID |
Respondent
REASONS FOR JUDGMENT
Introduction
Before the Court are competing interim applications brought by each of the parties, Ms Barakat (“the applicant”) and Mr Farid (“the respondent”) with respect to the parties’ children W born in 2009, X born in 2010, Y born in 2012 and Z born in 2017.
In addition, the applicant seeks interim property orders including orders for interim spousal maintenance.
Summary of Proceedings
The applicant filed an Initiating Application on 18 May 2020 seeking both final and interim parenting and property orders. The application was made returnable on 27 May 2020.
On 27 May 2020 the respondent filed a response, affidavit, financial statement and notice of risk.
On 27 May 2020 the Court made orders, pending further order that:
1. The children W born in 2009, X born in 2010, Y born in 2012 and Z born in 2007 shall live with the mother.
2. The children shall spend time with the father as agreed to between the parents in writing but no less than two hours of supervised time each week, such time to be supervised by an appropriate supervising agency and the parents are to forthwith do all acts and things necessary to undertake any intake process for such supervising agency.
3. The mother is to propose within 24 hours the names of three supervising agencies and the father is to within a further 24 hours, communicate to the mother via her solicitors the acceptance of one of those supervising agencies.
4. The cost of the supervision of the children’s time with the father is to be borne by the father.
5. The father is otherwise restrained by injunction from contacting, communicating with the children or otherwise permitting any third party from doing so, other than as permitted by these Orders.
6. The father is restrained by injunction from collecting the children from their school or daycare.
7. The father is at liberty to communicate with the children by telephone or video conference on no more than three occasions each week, limited to 20 minutes on each such occasion, such communication to occur between the hours of 6pm and 7pm on Monday, Wednesday and Friday of each week.
8. The husband shall forthwith pay a lump sum amount of $12,000 being payment of urgent spousal maintenance pursuant to s.77 of the Family Law Act 1975.
Further, the Court made orders setting the matter down for interim hearing on 17 September 2020 and directed the parties to attend mediation with an accredited Family Dispute Resolution Practitioner and to attend a Child Inclusive Conference with a Family Consultant on 26 June 2020.
On 5 August 2020 the applicant filed an Application in a Case seeking further restraints against the respondent or any third party from attending the children’s extra-curricular activities or from approaching or being within 200 meters of the children or the applicant, other than as provided for in the orders made by the Court on 27 May 2020. Further, the applicant sought an injunction against the respondent from disposing of or further encumbering property situate at C Street, Suburb D without the written consent of the applicant.
That application was listed at short notice on 7 August 2020.
On 7 August 2020 the Court heard the urgent application filed by the applicant and made the following orders pending further order:
1. Order 7 of the orders made on 27 May 2020 is suspended.
2. Pursuant to section 68B of the Family Law Act 1975:
2.1 Mr Farid be and is hereby restrained, by way of injunction, from attending any of the children’s sporting activities or extracurricular activities (or causing any member of the paternal family or his friends or otherwise any other third party to do so) unless otherwise ordered by the Court.
2.2 Mr Farid be and is hereby restrained, by way of injunction, from approaching Ms Barakat and/or the children within 200 metres at any time including but not limited to any school, place of residence or employment of or other place occupied by the mother and the children.
3. For the purpose of 2.1 and 2.2, the persons protected under these orders pursuant to section 68B of the Family Law Act are the following:
3.1 Ms Barakat, born in 1985;
3.2 W, born in 2009;
3.3 X, born in 2010;
3.4 Y, born in 2012; and
3.5 Z, born in 2017.
4. Within 24 hours of the date of these orders, the Father notify his family members that they are not to approach the Applicant Mother or the children other than in accordance with the orders of the Court.
5. The Respondent Husband is hereby restrained, by way of injunction, from disposing of, further encumbering or otherwise dealing with the property situated at C Street, Suburb D being the whole of land comprised in Folio Identifier ... (“the C Street, Suburb D property”) without the Applicant Wife’s prior written consent.
6. The cost application is stood over to the conclusion of final hearing.
On 15 September 2020 the respondent filed an Application in a Case and affidavit seeking parenting orders that were different to the orders sought in his Response filed 27 May 2020 including seeking restraints on the applicant’s mother and sister who are not parties to these proceedings.
On the day of the interim hearing, 17 September 2020, the parties came to an agreement for the Court to remove the injunction made on 7 August 2020 in respect of the property at C Street, Suburb D and instead for orders to be made as follows:
1. Order 5 of the Orders made on 7 August 2020 be discharged subject to the following:
a. That the husband do all things and sign all documents necessary to transfer his interest in the C Street, Suburb D property to X; and
b. Simultaneiously with 1.a, the husband shall direct Mr K to transfer into the Stewart Law Trust Account, the sum of $71,400 to be held in trust on behalf of Mr Farid and Ms Barakat pending further order or as agreed between the parties in writing.
Such orders were made by the Court on 23 September 2020.
Interim Orders Sought
The applicant asks the Court to make orders that:
a)The respondent pay to the applicant an amount of $1,100 each week by way of interim spousal maintenance;
b)The parties do all things necessary to authorise the transfer of $100,000 from J Lawyers to the applicant;
c)The respondent deliver the Motor Vehicle 1 to the applicant for the use of the applicant and the children;
d)Orders for financial disclosure; and
e)That the respondent’s application for interim parenting orders is dismissed (and that the children spend time with the father in accordance with interim orders previously made).
The respondent seeks orders that:
a)The children spend time with him each week from 6pm Friday until 6pm Sunday;
b)The children have telephone or video communication with the respondent between 6pm and 7pm on each of Monday, Wednesday and Friday limited to 20 minutes each week;
c)An Independent Children’s Lawyer be appointed; and
d)Orders 2, 2.1, 2.2 and 5 of the Orders made on 7 August 2020 be set aside.
Short Summary
The applicant was born in 1985 and is currently aged 34 years.
The respondent was born in 1983 and is currently aged 37 years.
The parties were married in 2007 and separated in March 2020.
There are four children of the relationship:
a)W born in 2009;
b)X born in 2010;
c)Y born in 2012; and
d)Z born in 2017.
The former matrimonial home was sold in March 2020, with settlement in late April 2020. Presently, $694,637 is held in the trust account of J Lawyers, who acted on the sale.
Interim Spousal Maintenance
Spousal maintenance is governed by Part VIII of the Family Law Act 1975 (Cth).
a)The gateway in respect of spousal maintenance to the operation of Part VIII is through s.72(1).
b)The liability of a party to a marriage to maintain the other party that is imposed by s.72(1) is crystallised by the making of an order under s.74(1).
c)Sub-section 72(1) establishes a threshold question before the power of s.74(1) may be exercised.
d)A court exercising the power conferred by s.74(1) is obliged by s.75(1) to take into account the matters referred to in s.75(2) and only those matters. Those matters are presented as a comprehensive checklist.
e)The order for spousal maintenance may be, relevantly:
i)for a lump sum or payment of a periodic sum: s.80(1)(a),(b); and
ii)until further order: s.80(1)(h).
f)The power to make an order for interim spousal maintenance is separate and distinct from the power to make an order for urgent spousal maintenance conferred by s.77.
(see generally: Hall & Hall [2016] HCA 23; Sadlier & Sadlier [2015] FamCAFC 130;
Is the Applicant Unable to Adequately Support Herself?
Firstly, the Court needs to determine whether the applicant is unable to adequately support herself by reason of having the care and control of a child of the marriage, age, physical or mental incapacity for appropriate gainful employment or any other adequate reason, having regard to any relevant matter referred to in sub-s.75(2).
The applicant has not worked since her marriage to the respondent. She is the full-time carer of the parties’ four children, and has been the home maker and primary carer for the children for 13 years. The children shall, at least in the interim period, remain living with the mother.[1] The parties’ children range in age from the oldest being 11 years old to the youngest being 3 years old.
[1] Both parties press for orders on an interim basis for the children to live with the mother
The applicant has very limited capacity for gainful employment at present. She has no immediate qualifications, she has not worked in paid employment for 13 years and has the full-time care of four children.
The applicant does not own any real property and she has no financial resources.
The Court is satisfied that the applicant does not have the capacity to adequately support herself by reason of having the care and control of the parties’ four children all of whom are under the age of 18 years.
Section 75(2) Matters
The applicant is 34 years of age, and she asserts that she suffers from ongoing trauma as a result of the violence which she says the respondent perpetrated against her.
The applicant receives a “single parent pension”[2] of $384 per week and a Family Tax Benefit of $486 per week. The applicant’s total income is $872 per week. The applicant’s only source of income is Centrelink benefit.[3] Pursuant to s.75(3) such benefits are to be disregarded when the Court is exercising jurisdiction under s.74. Indeed, logically, an entitlement to government benefit might itself be regarded as some evidence of need.[4]
[2] Presumably a parenting payment
[3] Being an income tested benefit and in part being a benefit paid to the applicant because she has care of young children
[4] Sadlier & Sadlier [2015] FamCAFC 130 at 48, referring to Kajewski & Kajewski (1978) FLC 90-471
The applicant’s weekly expenses are at least $370[5] for her personal expenses, although it is clear from her financial statement that the various columns and rows in Part N do not add up. She pays $520 for rent for her and the children (which has not been apportioned by her for the purposes of her maintenance application) and $20 for credit card payments. The applicant does not have a motor vehicle, and has since separation been paying the cost of a hire motor vehicle.
[5] Part N Applicant’s financial statement filed 18 May 2020
The applicant’s weekly expenses for the children are $1,062.[6] The respondent does not pay any child support,[7] although he is assessed to pay child support and has an outstanding child support liability of $4,217.12.
[6] ibid
[7] Part D Applicant’s financial statement filed 18 May 2020
Based on the evidence the Court finds that the applicant has established a need for $800[8] per week.
[8] $370 (part N) plus $20 (credit card) plus $410 for rent (apportioned by the Court)
Respondent’s Capacity to Pay
The respondent is 37 years of age and appears to be in good health.
The respondent has worked throughout the marriage. He is the director and sole shareholder of two companies. His taxable income for the financial year ending 30 June 2017 was $80,007 and for the financial year ending 30 June 2018 it was $187,934[9].
[9] Exhibit 1 pages 24-25
The respondent asserts that his sole income at present is the JobKeeper allowance, and that he earns no income from his business or from any other source.[10] According to the respondent, his weekly earnings are $750 while his weekly expenses are $1,481. He therefore submits, that he has no capacity to pay spousal maintenance.
[10] Financial statement filed 27 May 2020
The respondent refers to “a new woman” in his life, whom he also refers to as his “current wife”. The annexures to his affidavit indicate that the respondent’s new/current wife has three children.
The sworn evidence[11] of the respondent is that there are no other income earners in his household, there are no expenses paid by others for his benefit and that he does not pay any expenses for the benefit of others. Presumably, therefore, the respondent does not live with his new wife and her three children, or if he does, his financial statement is more than likely incorrect as to the matters set out at Parts E, F and H.
[11] Being his financial statement filed 27 May 2020
The respondent’s weekly rent payment is $620, which is more than the applicant pays to house herself and the parties’ four children. It does not appear reasonable that the respondent’s rental expenses should fairly outweigh those of the applicant and the children.
The respondent also asserts[12] to have a “factory mortgage” with the National Australia Bank and he pays “Investment Property Factory Insurance” presumably being for the commercial property at C Street, Suburb D of which he was a 10% owner as at May 2020. The respondent’s interest in that property is the subject of the orders made by consent on 23 September 2020, that is, it has now apparently been agreed that it is valued at $71,400 which amount will be held on trust on behalf of the parties upon the transfer of the respondent’s interest in that property to his brother Mr K. Therefore, the respondent will no longer be liable for these costs of $86.15 per week associated with the “factory” as asserted in his financial statement.
[12] See financial statement filed 27 May 2020
The respondent asserts[13] that the total of “all other expenditure” is $700. There are no particulars of what these expenses are said to be (Part N of the respondent’s financial statement is blank). Noting however, that the applicant’s “other expenses” are $1,432 of which $370 is for her and $1,062 is for the children[14], the respondent’s “other expenses” do not appear to be reasonable.
[13] Item 32 financial statement filed 27 May 2020
[14] See Item 32 and part K of the financial statement filed 18 May 2020
It was submitted on behalf of the respondent that the applicant has designer handbags, clothing and items of furniture which she could sell to support herself and that such items were a financial resource for her.
Not only is there no expert or other admissible evidence as to the value of such asserted chattels, nor indeed any detailed evidence as to what such chattels might be, but it is astounding for the respondent to be suggesting that the applicant should be selling items of personalty in order to support herself; particularly in circumstances where the applicant has the care of the parties’ four children, where the respondent has failed to meet his child support liabilities and where there are large sums of money currently held in trust, being the net proceeds of sale of the former matrimonial home which the respondent wants to pay to his brother on account of an alleged debt (as discussed further below in these reasons).
On the basis of all of the evidence in the proceedings, including the matters discussed under the heading “Respondent’s Financial Dealings” below, the Court is satisfied that the respondent does have the capacity to pay spousal maintenance.
It is appropriate given the other matters addressed in these reasons that an order for lump sum interim spousal maintenance be made rather than an order for weekly periodic spousal maintenance. It is likely that the final hearing in this matter will not occur before the middle to end of 2021. In those circumstances, it is appropriate that the respondent pay spousal maintenance until at least June 2021. Given that the Court assessed the applicant’s need at $800 per week, over a period of nine months, and with a small discount for a lump sum payment, the amount of interim spousal maintenance is assessed at $28,000[15]. Such a payment is to be made from moneys currently held in trust being the proceeds of sale of the former matrimonial home.
[15] $800 per week over 9 months at 4.3 weeks per month is $30,960
Interim Property Distribution
The applicant seeks that she be paid $100,000 by way of a partial property distribution order. The applicant referred the Court to Lesley & Lesley[16] where McClelland J (as he then was), with respect, conveniently summarised the relevant principles.
[16] [2015] FamCA 894 at [27]
Respondent’s Financial Dealings
The respondent’s sworn evidence[17] in the proceedings is very scant on his financial dealings, financial resources and generally in respect of financial matters. He asserts that he has total liabilities of $861,000, while asserting that the total value of property owned by him is $827,400.[18]
[17] The respondent relied on his affidavit filed 15 September 2020, paragraphs 38-46 of his affidavit filed 27 May 2020, and the affidavit of Mr K filed 15 September 2020. He also relied on his financial statement filed 27 May 2020: see Respondent’s Case Outline Document filed 17 September 2020 and leave granted during the interim hearing
[18] Financial statement filed 27 May 2020
Respondent’s Income
The respondent asserts that he has not received any income from his business since at least September 2019. Notwithstanding such an assertion, the respondent maintained the mortgage repayments on the former matrimonial home of approximately $7,000 per month until the property was sold in March 2020. As at April 2020, the respondent had just over $100,000 in a bank account in his name with the Commonwealth Bank of Australia.[19] By 27 May 2020, there was only $13,400 in the respondent’s bank accounts. The respondent does not explain in his financial statement nor his affidavit how, close to $90,000, was spent by him in less than two months.
[19] Account Number ...15, being a NetBank Saver Account
Respondent’s Corporate Interests
As at 26 May 2020, the respondent was a sole director and shareholder of F Pty Ltd[20] which is not disclosed in his financial statement.
[20] Exhibit 1 page 31
According to the respondent he has a 100% share in E Pty Ltd, which is asserted to have a nil value. The business is said to operate out of L Street, Suburb D. The property at L Street, Suburb D is not listed as an asset of the respondent in his financial statement.
The applicant asserts that the respondent has a 50% equitable interest in the property at L Street, Suburb D and that the parties lived there between 2008 and 2011, and then from 2012 to 2015.
The respondent however asserts[21] that this property was purchased by the respondent and his brother, Mr K in 2010. The respondent then transferred his interest to Mr K in 2014. It is asserted that the transfer of property from the respondent to his brother resulted in a debt to Mr K of $90,160 “which it was agreed between the brother he would pay him at a later date when he had the capacity to pay.” This is not a debt asserted in the respondent’s financial statement.
[21] Exhibit 1 page 4
What is disclosed in the financial statement is an alleged debt of $58,000 to Mr K asserted to be “Remainder 50% of proceeds of sale of business” and an alleged debt of $682,000 to Mr K said to be “Building and renovation fee” which is discussed in detail further below. It is entirely unclear from the financial statement and the other evidence what the “Remainder 50% of proceeds of sale of business” is said to relate to. The amount alleged does not accord with the other evidence of an asserted debt to Mr K in respect of the purchase of E Pty Ltd referred to immediately below.
According to the respondent, in 2015, the respondent’s brother transferred a share of the business M Group to the respondent, for apparently, no consideration. There is no evidence as to what the business was valued at this time. It appears that the respondent received a 50% share in the business[22].
[22] This is said on the basis that it is asserted that upon a subsequent purchase of the brothers’ shares, the brothers owned 45% and 15% respectively.
The name of the company was later changed to E Pty Ltd [23] and in 2015, the respondent purchased both of his brothers’ shares in the company. It appears therefore the respondent is asserting that his brothers gave him half the business and that he later (in the same year) bought the remaining 50% of the business from them. There are no historical company searches available to show the transfer of shares or similar, at this, or any other time.
[23] Exhibit 1 page 3
Apparently, the respondent “did not pay any consideration on the basis that when [the respondent]… sells the company he would pay his brothers their share. Mr K owned 45% and Mr N owned 10%.” While the business was said to have been sold to Mr N in 2017 for $1,200,000 after making partial payments totalling $281,230.60 the sale fell through. The respondent retained these proceeds, but said they were injected back into the business.
The respondent asserts that he therefore owed Mr K $540,000, but he only paid him $189,000. The payment did not come from the proceeds of sale of the business, but from the proceeds of sale of a property at Suburb O[24].
[24] Referred to later in these reasons
If the 2017 sale of the business fell through, it is not clear on what basis it is asserted that the respondent owes Mr K 45% of the price for which the business did not sell. It is also unclear why a payment was made to Mr K from proceeds of sale of the property at Suburb O when according to the respondent the payment was to be made when the business was sold.
In any event, the business was ultimately sold in January 2019 for $500,000. The respondent asserts that:
“From that money he paid some company debts and a company Ute. He needed to pay further company debts as well as pay Mr K and Mr N $351,000 and $120,000 respectively but your client pressured him into funding her lifestyle. Our client paid for her Botox to her face and bottom, extravagant furniture of your client’s choosing, designer bags and clothing (in excess of $200,000.00) and family holidays (which the parties enjoyed at least 4 times a year).”[25]
[25] Exhibit 1 page 4
If Mr K owned 45% of the business and the agreement was that the respondent pay him upon the sale of the business, then it is prima facie logical that the respondent might at most[26] owe his brother Mr K $225,000 being 45% of $500,000 less the payment of $189,000 already made, leaving a balance of $36,000.
[26] If the Court accepted any of the respondent’s evidence about these purported transactions and business dealings
The respondent’s financial statement does not disclose any debt to his brother Mr N, nor does it disclose any debt to Mr K for $351,000 as asserted in the respondent’s solicitor’s letter of 26 August 2020[27].
[27] Exhibit 1
Respondent’s Real Property Interests
There are a number of property transactions which are also only disclosed through the annexure to the respondent’s affidavit (and in the applicant’s sworn evidence). The respondent’s interest in L Street, Suburb D has already been dealt with earlier in these reasons.
C Street, Suburb D
The respondent says that in 2016, together with his brother Mr K he purchased the property at C Street, Suburb D as to 10% and 90% respectively. The purchase price was $980,000. It is not explained in the respondent’s evidence how he was able to fund his share of the purchase of this property. The property appears to be valued at $1,400,000[28] as at 15 June 2020, yet at the time of swearing of his financial statement on 27 May 2020 the respondent valued his 10% share at $120,000. As noted earlier, the respondent’s interest in that property is the subject of the orders made by consent on 23 September 2020.
[28] Exhibit 1 page 11-12
Suburb O Property
In 2017, the respondent purchased a property at Suburb O for $1,060,000 which was sold in January 2020 for $1,100,000. The respondent says that after payment of the loan and expenses associated with the sale, from net proceeds of sale of $192,564 he paid his brother Mr K $189,000 (referred to earlier).
Suburb P Property
In 2017, the respondent purchased a property at Suburb P for $1,207,000 with a mortgage of $965,042. It was sold in June 2018 for $1,170,000. It is not clear how the respondent was able to obtain a mortgage for $965,042, when he already had an existing mortgage of some $800,000[29] on a taxable income of $80,007.
[29] Suburb O: $1,000,0000 less net proceeds of sale after payment of loan, see paragraph directly above
G Street, Suburb H and Alleged Debt to Q Pty Ltd
In 2018, the respondent purchased the property at G Street, Suburb H for $3,205,000 (“G Street, Suburb H property”). The applicant asserts that the purchase of the G Street, Suburb H property was purchased via a loan of $2,400,000. It is entirely unclear from the respondent’s evidence how the purchase was funded and/or how it is that he was able to obtain the finance to fund a $3,205,000 purchase given his declared taxable income[30].
[30] At highest, the respondent’s evidence suggests that approximately $200,000 came from the proceeds of sale of the property at R Street, Suburb P
The respondent’s solicitor’s letter dated 26 August 2020, which must have been written on instructions[31], asserts as follows:
a)That the respondent purchased the G Street, Suburb H property for investment purposes;
b)That the respondent employed Q Pty Ltd to undertake renovations, which were completed in December 2018;
c)That the total cost of the renovations was $682,000 and that the respondent and his brother agreed that the respondent would pay Q Pty Ltd for the renovations once the property was sold; and
d)The parties moved into the G Street, Suburb H property in December 2018.
[31] It forms part of Exhibit 1 but is also annexed to the respondent’s affidavit filed 15 September 2020
It is difficult to understand how the property could be an “investment property” given that it appears to have been the parties’ primary residence for a period of time prior to its sale.
Q Pty Ltd is a company of which the respondent’s brother, Mr K, is a director of and the only evidence of the company undertaking any renovations is a purported building contract annexed to the respondent’s affidavit and various assertions made in the affidavit of Mr K.
The contract which is annexed to the respondent’s affidavit, purports to be signed by the respondent and his brother on behalf of Q Pty Ltd, and appears to be dated 11 October 2018. The contract price is $682,000. However, there are no works specified in the contract except in clause 12, which is the progress payment clause. There are no drawings or plans referred to in the contract.
Except for the mere assertions in the affidavits, there is no evidence that any work was done pursuant to the building contract, that the work has been completed such that payment for work done pursuant to the contract was due and payable, that any invoices were issued for the work, that any demand for payment in accordance with clause 14 of the contract or otherwise has ever been made. It is not enough to assert that a legal obligation exists. There are no particulars of the agreement[32] said to have been entered into between the respondent and his brother (presumably on behalf of Q Pty Ltd) to vary the purported building contract as to payment terms.
[32] There is only an assertion that an agreement existed. This is not proof of the agreement, and it is certainly not proof of what the terms of the purported agreement might have been
While it was submitted on behalf of the respondent that on the evidence it is possible to find that the asserted debt to Mr K exists, and the Court accepts that such a possibility exists, the onus of proof is on the balance of probabilities (not a mere possibility). The Court is not satisfied on the evidence currently before it that the respondent has established the existence of a debt to his brother Mr K and/or to Q Pty Ltd [33]. Even if such a debt had been established, the respondent has not satisfied the Court that this asserted debt should take priority over any possible interim property distribution to the applicant.
[33] Neither Mr K nor Q Pty Ltd have sought to be joined to the proceedings.
Motor Vehicle 1
In 2017, E Pty Ltd purchased a Motor Vehicle 1 for $138,000. It appears that $114,000 was transferred from the respondent’s bank account on 18 January 2019 with reference “Motor Vehicle 1” therefore, presumably, on account of the Motor Vehicle 1 owned by the respondent’s company. The respondent asserts though that he has not been able to make payments in respect of this vehicle, yet he does not explain what the payment in January 2019 was in respect of.
This asset is not disclosed in the respondent’s material, and presumably the respondent is asserting that it has a value of zero as the company is valued at zero and the vehicle is an asset of the company. It is highly improbable that the motor vehicle has a value of zero. The motor vehicle remains in the respondent’s possession and in his control[34]. It is a vehicle which was utilised by the applicant for the benefit of the children while the parties were together. It is therefore appropriate that the respondent do all things necessary to make the vehicle again available to the applicant for her use.
[34] He is the alter ego of the company of which he is the sole director and shareholder of, and which is the legal owner of the motor vehicle
Other Relevant Matters
The respondent’s evidence is confusing and appears to be contradictory. While the Court has not heard the benefit of any cross-examination of either party, it is clear from the respondent’s own evidence that there appear to be many transactions between him and his brother Mr K, and perhaps also his brother, Mr N, which are not necessarily arms length but do involve business and real property dealings. It also appears that the respondent may not have been honest in his dealings with financial institutions or perhaps even the Australian Taxation Office given the property transactions he engaged in, the loans which he was able to obtain and the income he has declared. These matters will no doubt be clarified in the fullness of time and when the parties have been cross-examined and after there has been full and frank disclosure.
The extent of the asset pool is unclear, in large part due to the lack of full and frank disclosure of relevant matters by the respondent in his evidence. It is clear however, that it appears it is the respondent rather than the applicant, who has at all times had the control of the parties’ assets and has made decisions affecting the property of the parties.
It appears on the evidence that the applicant’s financial circumstances are inferior to those of the respondent.
Considering that the parties were married for over 14 years, that the applicant will at least in the interim remain the children’s primary carer, and the state of the evidence at present in respect of the debts asserted in the respondent’s case, it is probable that the applicant will ultimately receive a property settlement amount that is above the amount sought by her by way of interim distribution.
This is notwithstanding the orders presently sought by the respondent on a final basis in respect of financial matters, which would essentially see the parties retain all the assets which are currently in their possession or control, and would thus see the applicant with only her items of personalty and the respondent with close to $700,000[35].
[35] He does not seek any orders for the payment of any amount to either of his brothers either on an interim nor on a final basis
The applicant’s evidence includes an estimate of costs to final hearing as well as notice of costs incurred to date. The total of those costs is over $100,000. The applicant says she requires funds to meet legal fees, the purchase of a motor vehicle and to ensure she has access to any emergency funds should this be necessary.
While the applicant’s evidence is not very lengthy, the Court is satisfied that the making of an order for partial property distribution would ensure that the applicant is able to afford legal representation to prosecute her application and that the amount sought is reasonable in all of the circumstances[36].
[36] (Even with an order being made for the applicant to have the use of the Motor Vehicle 1)
Interim Parenting
The central enquiry is for the Court to determine the outcome that will be best for the children the subject of these proceedings.
Parenting proceedings are governed by the provisions of Part VII of the Family Law Act 1975. Section 60CA provides that in deciding whether to make a particular parenting order, the Court is to regard the best interests of the child as the paramount consideration.
Section 60B of the Act outlines the objects and principles underlying Part VII of the Act.
In determining what is in the children’s best interests, the Court must consider the matters set out in s60CC. Section 60CC outlines the primary and additional considerations that the Court is to take into account in determining what is in the best interests of the children.
The Act does not mandate the discussion of considerations under s60CC in any particular order, and it is well recognised that additional considerations may outweigh primary considerations.[37]
[37] see for example Slater & Light [2011] FamCAFC 1at [45]
In applying the primary considerations the Court must give greater weight to the need to protect the child from physical or psychological harm, from being subjected to, or exposed to, abuse, neglect or family violence than to the benefit to the child of having a meaningful relationship with both of the parents.
It has been held that a meaningful relationship “is one which is important, significant and valuable to the child.”[38] The focus is not on the relationship as such, but on the benefit the relationship might have for the child.[39]
[38] Mazorski & Albright[2007] FamCA 520 at [26], cited with approval by the Full Court in
[39] Ibid at [122]
In addition, in considering what order to make, the Court must, to the extent that it is possible to do so consistently with the child’s best interest being the paramount consideration, ensure that the order does not expose a person to an unacceptable risk of family violence.[40] The Court may include[41] in the order any safeguards that it considers necessary for the safety of those affected by the order.
[40] S.60CG(1)(b); see the brief discussion of s60CG in Salah & Salah [2016] FamCAFC 100 at [35]
[41] See s60CG(2), such safeguards are for the purposes of sub-paragraph (1)(b)
Section 61DA of the Act provides that when making a parenting order, the Court must apply a presumption that it is in the best interests of the child for the child’s parents to have equal shared parental responsibility. The presumption does not apply where there are reasonable grounds to believe a parent has engaged in abuse of the child or family violence and the presumption may be rebutted if the Court is satisfied that an order for equal shared parental responsibility would not be in the child’s best interests. In interim proceedings, the presumption applies unless the Court considers that it would not be appropriate in the circumstances for the presumption to be applied when making an interim order.[42]
[42] s61DA(3)
In the event that the Court orders the parents to have equal shared parental responsibility, the Court must apply the provisions of section 65DAA which provides for a consideration of the child spending equal time with the parents. If the Court finds that it is not in the child’s best interests and reasonably practicable, then the Court must consider the child spending substantial and significant time with the parents. Section 65DAA is expressed in imperative terms.[43]
[43] MRR v GR [2010] HCA 4 at [15]
The Full Court in Goode v Goode[44] mandated that this legislative approach must be followed in all parenting cases, and in particular set out the procedural steps to be followed on an interim application, noting that in interim proceedings there may be little uncontested evidence to enable more than a limited consideration of these matters to take place.
[44] (2007) 36 Fam LR 422, (2006) FLC 93-286
As stated by the Full Court in Keats & Keats, in respect of the conduct of interim proceedings:[45]
…the principles that emerge from cases such as SS v AH [2010] FamCAFC 13, [are] namely, that apart from relying upon the uncontroversial or agreed facts, a judge may have little alternative than to weigh the probabilities of competing claims and the likely impact on children in the event that a controversial assertion is acted upon or rejected.
[45] [2016] FamCAFC 156 at [9]
The applicant makes very serious allegations of family violence against the respondent. The applicant submits that the respondent, through his violent behaviour, poses an unacceptable risk to the children if they were to spend interim time with him other than on a supervised basis.
The applicant, inter alia, says to the Court:
a)That the respondent has physically and verbally abused her during the marriage which has resulted in the applicant requiring medical attention, including surgery in 2008, stitches to her nose, damaged teeth, a fractured cheekbone as well as other cuts and bruises. The applicant says that the respondent has attempted to choke her resulting in her falling unconscious.
b)That the children have been distressed due to the significant change in their living arrangements since separation, and that the few times they did spend time with the respondent after separation they returned home extremely unsettled.
c)That after separation she facilitated the children’s time with the respondent because she was too scared not to.
d)That the respondent has said to the children that the applicant is using lawyers and wanting to take him to Court, and that she is wanting to call the Police and take his money.
Between the time of the making of the orders on 27 May 2020 and the interim hearing, the respondent had not availed himself of the opportunity of spending time with the children pursuant to those orders.
It was submitted to the Court on 7 August 2020, that that the respondent no longer sought any parenting orders, a submission which the respondent now says was made without instructions. He has since changed his solicitors, and it appears on the evidence that the respondent’s solicitors are now the third solicitors he has engaged to act for him in relation to the family law dispute between the parties.
The children and the parents participated in a Child Inclusive Conference on 26 June 2020. According to the memorandum to Court, at the time the respondent proposed that the children live in an equal time arrangement. This was different to the position in his Response filed 27 May 2020, and is different to the orders he now seeks on an interim basis.
The Child Inclusive Conference Memorandum to Court notes as follows:
a)W,[46] who is the oldest child of the parties, spoke positively of the applicant and his relationship with her. He said that when his parents were in a relationship, they fought a lot. W said that he has seen the respondent hit the applicant on many occasions and that he felt sad when he saw this, as he believes it was the wrong thing for the respondent to do. W said that he and his siblings used to hug the applicant after the respondent injured her and that she has needed surgery due to her injuries. He said that he has witnessed an ambulance attend his house and that he sometimes got involved in the parents’ fights because he is the eldest child and his siblings were scared. W said that he has seen the respondent throw things, break things and yell. The child further added that he wondered if his experience of witnessing violence were connected to his behaviour at school, which was problematic as he had been suspended due to fighting. The child said he generally feels angry. He expressed negative feelings towards the respondent’s new wife.
b)X[47], the second oldest of the children, spoke positively about his relationship with the applicant and his siblings. X said that the respondent would often get angry for no reason, and that he would get angry and hit the applicant and that the children were not allowed to comfort their mother after this happened. X stated that there was a time when the respondent put a foot on the applicant’s nose and she had to get stiches. He said that he cried and felt very sad for the applicant, and that he felt scared of the respondent. X said that he thinks about these experiences a lot and that he does not talk to anyone about it. X also expressed negative feelings towards the respondent’s new wife.
[46] W is 11 years old
[47] X is 10 years old
The respondent denies that he was violent towards the applicant or that the children have ever witnessed any violence. His submission to the Court was in essence that the applicant is manipulating the children and that they are now making these allegations because of the applicant’s manipulation of them. It was submitted that the applicant was present during the interviews between the children and the family consultant with an inference being that the applicant influenced the children in what to say.
The respondent says in his sworn evidence:
a)“I also believe that the Applicant’s motive is to use the legal system by way of revenge in order to stop contact between me and my children because I have a new woman in my life.”[48]
b)“I have grave concerns as to the Applicant’s mental health and her ability to encourage violence by our children towards my current wife. I fear for their safety and well-being. As a result of this I have informed Family and Community Services (FaCS) as to the Applicant’s behaviour with respect to neglect and not supervising the children and encouraging and using them to conduct violent acts as a means of revenge…”[49]
c)“I have not been able to actively be involved in my children’s lives as a result of false allegations made against me and ask this respectful court to revoke the current orders in respect of the supervised visits as there is no evidence to the allegations made.”
[48] Paragraph 18 Respondent’s Affidavit filed 15 September 2020
[49] Paragraph 30 Respondent’s Affidavit filed 15 September 2020
The respondent has never sought to appeal the orders of 27 May 2020. His affidavit filed 15 September 2020 was prepared by a legal practitioner and he was represented by Counsel at the interim hearing. The respondent’s affidavit contains many matters which are not only inadmissible and irrelevant, but it seems to attack the integrity of the Court process and the Court decision. It is disappointing to see legal representatives acting as mere mouthpieces for their clients, not only in drafting court documents but also in the submissions which were made.
On 7 August 2020, the Court made a number of injunctions, which were more particularly worded than the injunctive relief made by the Court on 27 May 2020. The injunctions were made to prevent the father from contacting the children other than in accordance the orders.
The Family Consultant opined as follows:
“56.… The allegations of family violence against [the respondent]… are extremely serious… W and X reported that they have witnessed this alleged violence and abuse. If these allegations are accurate, it may not be in the children’s best interest to spend any time with [the respondent]…, as both their and [the applicant’s]… physical and emotional safety may be at ongoing risk. It is also possible that, if [the respondent]… has behaved as alleged, he will have a significantly compromised parenting capacity and he may continue to engage in controlling and undermining behaviour of [the applicant]…
…
61. The children expressed views that they want to spend time with [the respondent]…, and they seemed to believe that this is what [the applicant]… also wants. However, it appears that there are serious safety risks to the children which may need priority over their views.”[50]
[50] Child Inclusive Conference Memorandum to Court dated 26 June 2020
The matters alleged in the respondent’s affidavit about the applicant using the legal system to exact revenge, speak to the possibility of the respondent continuing to engage in undermining behaviour of the applicant.
The paramount consideration for the Court are the children’s best interests. The Court is not bound by the parties’ competing proposals[51].
[51] The Full Court held in Cao & Cao [2018] FamCAFC 252:
“72. It cannot be enough to establish the lack of procedural fairness simply by demonstrating that no order of the type made was sought by the parties or the Independent Children’s Lawyer, since the ultimate task of any judge in quelling disputes under Part VII of the Act is to make orders which promote the subject child’s best interests. Sometimes (perhaps even often), parties do not apply for orders which promote the child’s best interests. The court is not then bound to a choice between two or more suites of inadequate orders. Once parties are unable to reach a compromise and their dispute is litigated to conclusion, the child’s best interests become the paramount consideration in the court’s determination of appropriate orders, irrespective of the parties’ competing proposals. The making of orders that do not reflect the orders devised by the parties does not, of itself, vitiate the judgment or orders.(U v U (2002) 211 CLR 238 at 263, 284-285).
…
77. The concept of procedural fairness is essentially practical, not abstract, and is designed to avoid practical injustice (Ex parte Lam at 14). The rules of procedural fairness do not have immutably fixed content, though, as a general principle, the parties need to know what case the opposing party seeks to make and how that party seeks to make it (Assistant Commissioner Condon v Pompano Pty Ltd (2013) 252 CLR 38 (“Pompano”) at 99-100; National Companies and Securities Commission v News Corporation Limited (1984) 156 CLR 296 at 312). It is also a fundamental principle of justice that a party is given the opportunity of replying to the opposing party’s case (Kioa v West (1985) 159 CLR 550 at 582).
78. However, once the critical issues in the proceedings are known to the parties, the decision-maker is not required to expose his or her thought processes or provisional views for comment before making the decision (Minister for Immigration and Citizenship v SZGUR (2011) 241 CLR 594 at 599). Although not obliged to do so, the decision-maker may still choose to do so, because parties can be assisted by hearing tentative opinions and being given an opportunity to deal with them (Johnson v Johnson (2000) 201 CLR 488 at 493, 504-505; Concrete Pty Limited v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577 at 609-610).
79. While procedural fairness is an essential attribute of any court’s procedures, the content of the obligation in each case requires close analysis of all aspects of the court’s procedures and the legislation and rules governing it (Pompano at 99; RCB v The Honourable Justice Forrest (2012) 247 CLR 304 (“RCB v Justice Forrest”) at 321; SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152 at 160-161). Importantly, parenting proceedings under Part VII of the Act are not strictly inter partes disputes (RCB v Justice Forrest at 321; M v M (1988) 166 CLR 69 at 76). The rights of the parties are subjugated to the best interests of the child. Furthermore, the interim hearing of urgent parenting applications is an abridged process where the scope of the enquiry is significantly curtailed (Goode & Goode (2006) FLC 93-286 at [68]). The process does not admit of prolongation. Evidence is not tested by cross-examination and, ordinarily, it is impossible to make critical findings of fact so a surfeit of evidence is unhelpful.”
The critical issue in these parenting proceedings is whether the benefit to the children of a meaningful relationship is outweighed by the risk posed to them by the father’s (alleged) behaviour.
The applicant maintains that it is in the children’s best interest to spend some time with the respondent although such time ought to be supervised. It may be that her views about the children’s best interest in this regard are coloured by her experiences of the respondent over many years, and the coercive and controlling behaviour she has allegedly experienced at his hands; on her own evidence she remains frightened of the respondent.
Even though not specifically raised during the interim hearing, the respondent must have been aware of the possibility of an order for no time given the gravity of the allegations made against him, the evidence in the applicant’s case, the recommendations in the Child Inclusive Conference Memorandum to the Court and the matters which the children reported to the Family Consultant. Subsequent to the Reasons for Judgment being reserved, the Court invited further submissions from the parties as to an order that the children spend no time with the father in the interim.
The parties have both taken up the opportunity of making further submissions in respect of the matters raised in the Child Inclusive Conference Memorandum and particularly about the prospect of an order for no time. The Court has had regard to those further submissions.
While an order for supervised time would test the father’s capacity to comply with rules and directions, and would give him the opportunity of demonstrating a capacity for self-control and putting the children’s needs first, the risk to the children outweighs the benefit of any time at present. This is not about the father being given opportunity, he already has had an opportunity of spending time with the children but has not done so. The Court is wary of any disappointment the children might suffer if the father again did not avail himself of the opportunity of seeing them.
Certainly, there might be benefits to the children in seeing their father, who on the face of it they appear to love dearly. There might also be benefits to the children spending time with the extended paternal family, but always such benefits are to be weighed against possible detriments.
The father in his submissions raises the issue of his allegations against the mother. It is unclear what the relevance of these submissions might be except a misguided understanding of the task imposed upon the Court. The father’s submissions refer to evidence which was not before the Court at the interim hearing. The father asks the Court to make an order for the children to live with the mother on an interim basis.
The father says:
If it is the case that the mother is to be afforded a presumption of innocence in respect of these proceedings and in particular in respect of those “allegations” then it is only natural that the father be afforded the same legal right in respect of any “allegations” of violence made against him.
The Court is not, at this interim stage, able to make findings of fact in respect of uncontested evidence. It is not helpful to refer to the presumption of innocence, a concept which is usually applied in the sphere of criminal law.
When making the orders on 27 May 2020 the Court did not have the benefit of the Child Inclusive Conference Memorandum, nor the benefit of other evidence relied upon at interim hearing. Those orders were made on an urgent basis and in circumstances where there were no existing order and issues of possible removal of children was raised, together with very serious allegations of violence.
Given:
a)the very serious allegations of violence made by the applicant;
b)that at least the two older children have apparently witnessed such violence;
c)the vulnerability of the children based on their ages, maturity levels and stated experiences;
d)that the two older children appear to be significantly negatively impacted by witnessing the violence allegedly perpetrated by the respondent upon the applicant;
e)the respondent’s complete denial of any violence;
f)that the respondent has not availed himself of the opportunity of spending time with the children pursuant to the orders made in May 2020; and
g)the respondent’s stated attitude towards the applicant
the Court finds that the children would be placed at an unacceptable risk of harm if they were to spend time with the respondent in accordance with his application or indeed in accordance with the applicant’s application.
Even though the two older children have expressed a wish to see the respondent, taking a cautious and child focused approach, the Court finds that the evidence overall at this stage of the proceedings does not support any order for the children to spend time with the respondent at present.
The evidence supports the continuation of the injunctive restraints made on 7 August 2020, pending further order.
It is important for the parties’ children that the recommendations made particularly about W and X are taken particularly seriously, and that the children are provided with not only the emotional support they need but also with psychological support to assist them in managing the process they are going through, their emotions and behaviour.
I certify that the preceding one-hundred and seventeen (117) paragraphs are a true copy of the reasons for judgment of Judge Obradovic
Associate:
Date: 2 October 2020
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