Barclay and Paston

[2015] FCCA 744

FEDERAL CIRCUIT COURT OF AUSTRALIA

BARCLAY & PASTON [2015] FCCA 744

Catchwords:
FAMILY LAW – Property – de facto relationship – one child – loan alleged – spousal maintenance.

Legislation:

Family Law Act 1975, ss.79, 90SF(1), 90SF(3), 90SM

Af Petersens and Af Petersens (1981) FLC 91-095
Biltoft and Biltoft (1995) FLC 92-614
Chidiac v Maatouk [2010] NSWSC 386
Clauson & Clauson (1995) FLC 92-595
Jones v Dunkel (1959) 101 CLR 298
Ogilvie and Adams [1981] VR 1041
Owens & Owens (No.3) [2010] FMCAfam 3
Stanford v Stanford (2012) 247 CLR 108
Vadisanis & Vadisanis & Anor [2014] FamCAFC 9

Applicant: MS BARCLAY

Respondent: MR PASTON

File Number: LEC 285 of 2011

Judgment of: Judge Howard

Hearing date: 26 February 2015

Date of Last Submission: 26 February 2015

Delivered at: Brisbane

Delivered on: 2 April 2015

REPRESENTATION

Counsel for the Applicant: Mr Priestley SC

Solicitors for the Applicant: David Hunter

Counsel for the Respondent: Ms Wilson

Solicitors for the Respondent: George Lawyers

ORDERS

1. That each party shall provide a copy of a proposed Final Order to each other party by 4:00pm on 9 April 2015.

2. That the parties shall attempt to reach an agreed position in relation to the wording of the Final Order (reflecting the Reasons for Judgment) and shall send a copy of same to the Court by no later than 4:00pm on 16 April 2015.

3. That in the event the parties are unable to reach an agreed position in relation to the wording of the Final Order (and send a copy of same to the Court) within the time frame stated in paragraph (2) – the matter shall be listed for Mention and each party shall attend personally along with their legal representative (if any) on a date to be fixed by the Court.

IT IS NOTED that publication of this judgment under the pseudonym Barclay & Paston is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT LISMORE

LEC 285 of 2011

MS BARCLAY

Applicant

And

MR PASTON

Respondent

REASONS FOR JUDGMENT

1. Early in 2009 the applicant Ms Barclay (now known as Ms Barclay) and the respondent Mr Paston commenced living in a de facto relationship.

2. The parties have one child named X.  X was born on (omitted) 2010. 

3. A tragedy befell this family when, only six weeks after X was born – the respondent (Mr Paston) was arrested and charged with murder.

4. The respondent was subsequently convicted of the murder of a former business associate.  The respondent was sentenced to 28 years imprisonment with a non-parole period of 21 years.  Taking into account time already served – the respondent will be eligible for release on parole in 2031.  Accordingly, the respondent will not be eligible for release for at least a further 16 years.

5. The respondent, who attended Court today via video link from (omitted) Prison near Sydney, told the Court that he intended lodging an appeal against his conviction.  No appeal has yet been lodged on his behalf.  Any such appeal, it appears, is well out of time.  There was no evidence before the Court as to the respondent’s prospects of success in relation to his proposed appeal against his conviction for murder.

6. I accept the evidence of the applicant that, notwithstanding the arrest of the respondent in February 2010 – the parties continued in a relationship until approximately June 2011.  For instance, the respondent visited the applicant in prison and took the child X there to see his father.

7. After separation the applicant commenced proceedings in this jurisdiction seeking property settlement orders and spousal maintenance.

8. The matter came on for hearing originally before Her Honour Judge Demack in December 2012. 

9. In fact, in December 2012 there was also a parenting application on foot.  The parties agreed on the terms of a parenting order.  The Court made final parenting orders by consent confirming that the child X would live with the mother.  Further, the final parenting consent order included an order that the mother have sole parental responsibility in relation to the child.

10. In relation to the question of property settlement – a trial was conducted before Her Honour in December 2012.  Her Honour delivered an ex tempore decision at the conclusion of the hearing. 

11. The final property order was made by Her Honour Judge Demack on 7 December 2012.

12. Some 13 days later, on 20 December 2012 the applicant (Ms Barclay) filed a notice of appeal.

13. The appeal was heard by the Full Court of the Family Court of Australia on 6 August 2013. 

14. On 14 March 2014 the Full Court delivered its decision and the appeal was allowed.  The matter was remitted for re-hearing to the Federal Circuit Court of Australia.

15. The matter came on for hearing once again in the Federal Circuit Court of Australia on 26 February 2015 at Lismore, New South Wales.

16. The parties remain unable to agree on appropriate property settlement orders.  In deciding this case the Court must take into account the well-known four step process applicable to property settlement proceedings.  The Court must also keep in mind the guidance given to trial Courts by the High Court of Australia in Stanford v Stanford (2012) 247 CLR 108. The parties in this case no longer live together. The respondent is in prison. He will be there for at least a further 16 years. The parties’ relationship broke down irretrievably some years ago. It is therefore just and equitable for the Court to make a property settlement order in this case.

17. In relation to the pool of property most items are agreed.

18. The significant item in dispute relates to the question of whether or not certain monies should be brought to account in the property pool as liabilities.  It is said, on behalf of the respondent, that his parents lent certain monies totalling more than $200,000.

19. If the Court accepts the argument put forward on behalf of the respondent there will be no funds left in the property pool for distribution between the parties.

20. It should be pointed out that by order of the Full Court of the Family Court of Australia in March 2014 – the sum of approximately $51,000 was paid to the applicant.  That was because such payment formed part of the original order of Her Honour Judge Demack and there had been no cross appeal filed by the respondent Mr Paston.  I will refer to that payment later in these reasons for judgment.

21. The only significant asset of the parties was a property at Property L.  The respondent had owned that property for approximately six years prior to commencing the relationship with the applicant, Ms Barclay.

22. The respondent’s mother is Ms K.  Ms K has sworn an affidavit which was filed on 5 February 2015.  In paragraphs 16 and 17 of her affidavit Ms K states:

    “16. Prior to the commencement of Mr Paston & Ms Barclay’s relationship I had transferred a property (value $90,000) to Mr Paston in 2000 to enable him to obtain finance for a property he was purchasing in Sydney.  After the sale of this property he used the funds to purchase Property B in 2003.

    17. In 2005, to assist with the purchase of shares in the business, I gave Mr Paston $20,000.  In 2008 I gave him $10,000.  I was in a position to do so at the time due to inheritance I received from my mother’s estate in 2000 and the later sale of a property owned by my husband and I.”

23. Monies were therefore made available by Ms K to her son as follows:

    a)$90,000 in the year 2000 (by way of transfer of a property at (omitted), Queensland as further explained by Ms K during oral testimony on 26 February 2015);

    b)$20,000 in 2005 – to assist with the purchase of shares in a business; and

    c)$10,000 in 2008.

    Total: $120,000

24. I begin by making reference to the evidence contained in paragraph 17 of Ms K’s affidavit.  That evidence makes it clear that Ms K gave funds to her son totalling $30,000 ($20,000 in 2005 and $10,000 in 2008).   

25. After the respondent was arrested in February 2010, Ms K provided further funds to assist both the respondent and the applicant.  Her evidence in that regard is contained in paragraph 7 of her affidavit.

26. The amounts advanced to the applicant (at about the time the respondent was arrested) either by the respondent or the respondent’s mother total approximately $15,000.  The applicant agreed with that sum (approximately) under cross-examination.  As to the amount referred to in paragraph 7(f) of Ms K’s affidavit, ($17,627) – I consider it more likely that the applicant’s version of events is correct – namely that she had worked in the (omitted) business that the applicant and the respondent had established.  The applicant worked in that business for approximately an 18 month period from February 2010.  The money that was earned went into that savings account referred to in paragraph 7(f) and the applicant drew upon those funds.  Even if the applicant also drew upon certain funds that had been deposited by a tenant at the Property L property – from an overall perspective it will make little difference to the outcome of these proceedings.  In relation to the evidence of Ms K contained in paragraph 7 of her affidavit – I find that she forwarded approximately $15,000 to the applicant at or about the time that the respondent was arrested for murder.  Those monies were made available to the applicant because she was in a very difficult position – she had a six week old baby and her partner (the father of the child) had just been arrested and charged with murder.  I do not accept that there is or was any obligation to repay that money to Ms K – or to any other person.  There is no (or certainly no sufficient) evidence which I am prepared to accept to support a conclusion that the money had been lent as opposed to merely provided or given to the applicant.

27. In addition, the respondent alleges that his father Mr Paston Senior forwarded monies by way of a loan totalling $35,000.

28. At the outset I note that there is no affidavit relied upon at the hearing or provided by the respondent’s father concerning the alleged loan.  No explanation was given to the Court as to why the respondent’s father was not called as a witness.  It seems to me that the Court should draw an inference that the evidence of the respondent’s father would not have helped the respondent’s case (Jones v Dunkel (1959) 101 CLR 298). Even if I am incorrect in relation to the drawing of that inference – it will make no difference to the final outcome of this particular issue. There is overwhelming evidence for the Court to conclude that the alleged loans are not in fact loans at all.

29. I have come to the conclusion that the monies forwarded by Ms K to her son, the respondent (or to the applicant for that matter), do not in fact constitute a loan.  There are many reasons for this conclusion.  Those reasons include:

    a)there is no (or no sufficient) evidence of a loan agreement (oral or written) between the respondent and his mother (or his father for that matter); 

    b)there is no document whatsoever evidencing that the monies were forwarded by way of a loan;

    c)there is no evidence whatsoever (oral or written) as to the terms of the loan;

    d)there is no evidence as to when the loan would be repayable;

    e)there is no evidence as to the circumstances in which the alleged loan would be repayable;

    f)there is no evidence of the interest payable (although I do note on occasions, it was referred to in the evidence as an “interest free loan”);

    g)Ms K confirmed in oral testimony on 26 February 2015 (and, it seems had confirmed the same during sworn testimony given at the first hearing in December 2012) that she had not at any time prior to the commencement of the property settlement proceedings in June 2011 – made any demand for repayment;

    h)indeed, my attention has not been drawn to any evidence that would lead the Court to conclude that Ms K has, at any time, demanded or suggested that her son repay the monies;

    i)the respondent alleges that the original transfer of property from his mother had enabled him to purchase real estate in (omitted), Sydney, New South Wales.  When he sold that property in 2003 he realised a sufficient amount of equity to enable him to then purchase the property at Property L.  As noted, that was in 2003.  I note that, notwithstanding the fact that he was, of course, in a position to do so, he did not repay any monies to his mother (or, for that matter, to his father);

    j)the respondent then, in approximately 2009, redrew $182,000 on the mortgage he had granted over the property at Property L to a financier.  Having redrawn $182,000 – the respondent did not make any form of repayment to his parents;

    k)further, the respondent, in his testimony, stated that he received approximately $100,000 from the sale of shares that he owned in a venture/company known as “(omitted)” in 2010.  Notwithstanding that he had those funds available to him he chose to spend the money realised from the sale of those shares in other ways.  He did not in any way attempt to repay any amount whatsoever to his parents;

    l)in 2004 and 2005 the respondent made applications to the (omitted) Bank for certain loans.  In filling out the loan applications he was required to disclose to the bank details of any debts including other loans that he was obliged to repay.  The respondent made no reference whatsoever to the alleged “loans” that had been made to him by his parents.  During candid testimony given by the respondent via video link from (omitted) prison on 26 February 2015 – the respondent stated that the reason he did not tell the (omitted) Bank about the “loans” from his parents was that the bank would not have advanced him the sums that he was seeking.  In essence, the argument by the respondent is that he failed to make disclosure of those “loans” to the bank – because deceiving the bank was the only way he could ensure that the bank would lend him the money that he was seeking.  I do not accept this explanation provided by the respondent.  I find that the reason he did not inform the (omitted) Bank about the “loans” from his parents is because the “loans” did not exist.  He had no legal obligation to repay any money to his parents;

    m)during the course of the parties’ relationship the respondent at no time informed the applicant that he owed any money to his parents;

    n)in the case run on behalf of the respondent in February 2015 – it was presented to the Court that monies paid by Ms K to or on behalf her son in respect of legal fees for the respondent’s legal matter totalled $33,000.  I note paragraph 22 of Ms K’s affidavit.  The case, as presented to the Court, by the respondent’s legal representatives on 26 February 2015 included the legal fees for the respondent’s criminal matter ($33,000) as part of monies that were said to have been “lent” by Ms K to the respondent.  Indeed in the affidavit of Ms K filed 5 February 2015 paragraph 23 originally appeared as follows:

    “23. All the above funds were provided by way of my savings, age pension and a $10,000 bank loan.  I lent around $197,000 in total and Mr Paston’s father (from whom I am separated) lent him $35,000.”

    o)objection was taken to paragraph 23 by Mr Priestley SC on behalf of the applicant.  On that occasion I ruled that the second sentence of that paragraph was inadmissible and I gave reasons on 26 February 2015.  But it should be noted that Ms K, in her sworn affidavit filed 5 February 2015, had put before the Court an affidavit alleging that the total of the monies that she says she had provided to her son by way of a loan – included $33,000 for the respondent’s criminal law fees.  But during oral testimony on 26 February 2015 Ms K stated that the respondent does not have to repay her those monies.  The two contentions cannot stand together.  In the one month Ms K has given diametrically opposite evidence in relation to monies which she forwarded to assist with the payment of legal fees for the criminal case on behalf of her son.

30. The preponderance of evidence leads me to conclude that the monies advanced by the respondent’s parents to him at various points in time from the year 2000 onwards – do no constitute loans.  The respondent is not legally obligated to repay those sums to his parents. 

31. I note the decision of the Federal Circuit Court of Australia in Owens & Owens (No.3) [2010] FMCAfam 3. That is a decision of Federal Magistrate Walters (as His Honour was then). I note in particular the following paragraphs:

    “30. During the course of his oral evidence, the husband conceded that he had not kept any records (himself) – of any nature whatsoever – recording payments from his late father to him (or the parties) or from him (or the parties) to his late father.  The husband also conceded that not all payments that he made to his late father comprised interest payments.  In my opinion, it is extraordinary that the husband, who is clearly intelligent and well educated (even if he does not have the qualifications that he deposed to having) – and who is [employed in the law enforcement industry] – would not have recorded (in some detail, at least) and kept some form of running record or ledger identifying his current indebtedness (or alleged indebtedness) to his father.  How else would the husband know what he must pay back to his father, or how much interest he should pay?  The lack of such record-keeping simply reinforces my view (expanded upon below) to the effect that the alleged loans were not, in fact, loans at all.

    …

    33. I find that the husband was less than truthful when he asserted that the wife was a party to the alleged financial transactions with his late father, and when he asserted that she was aware that intra-family loans existed or had been created. 

    …

    35.  The husband's general lack of credibility (as discussed in these reasons, and in the parenting judgment), and his single-mindedness in pressing (or, alternatively, in instructing his counsel to press) arguments relating to the existence of loans which were clearly without merit, reinforce the conclusion that I have reached to the effect that no such loans ever existed.  That is not to say, of course, that moneys were not provided to the parties (or to the husband) by the husband's late father, but the fact of the matter is that the preponderance of evidence did not get close to demonstrating that the husband's assertions regarding the existence of formal, enforceable loans should be accepted.”

32. There are certain similarities between the case of Owens & Owens (supra) and the present case.

33. In the present case there are no records confirming when payments were made or when monies were advanced.  The complete lack of documentary proof combined with the lack of any form of record keeping or ledger or any corroborative written evidence whatsoever leads me to conclude (when those matters are considered in the light of the other matters to which I have earlier referred) that the monies advanced by the respondent’s mother (and father) do no constitute enforceable loans.

34. I have come to the conclusion that no loans existed.

35. As to the evidence of Ms K, I have come to the conclusion that she was not telling the Court the truth.  Ms K was evasive as a witness.  Ms K was, on occasions, non-responsive.  In oral testimony given on 26 February 2015 Ms K stated:

    “MR PRIESTLEY SC: What I want to suggest to you is that the payments you made from February 2010 right up through your latest affidavit were payments that you made because you wanted to help Mr Paston?

    MS K: They were not.

    MR PRIESTLEY SC: And that you’ve never had any discussion with Mr Paston that would suggest that he had any obligation at any time to repay you any of those moneys?

    MS K: At the (omitted) at (omitted), before he went to the police station, Mr Paston asked me to pay whatever accounts he had and look after Ms Barclay.”

1. It is noteworthy that Ms K at no time prior to her oral testimony on 26 February 2015 had made any reference to discussions at the (omitted).  In any event – the answer given by Ms K in no way could be said to be evidence of an obligation by her son (the respondent) to repay any of the monies.  There is no evidence of any words spoken by Ms K (nor, for that matter by the respondent’s father) to the respondent – at any time – that would or could be construed as evidence of an obligation upon the respondent to repay any monies whatsoever to his mother or his father.

2. To the extent that there was any attempt by Ms K during her oral testimony to infer that she made payments for some other reason than that she had wanted to help her son – I reject that evidence.  To the extent that there is any inference whatsoever in the evidence of either Ms K or the respondent that the monies that were forwarded to the respondent by his mother (and his father) carried an obligation on the part of the respondent to repay those monies to one or both of his parents – I utterly reject such evidence as a falsehood.  Both Ms K and the respondent gave evidence orally on 26 February 2015.  Neither witness was impressive.  Both the respondent and his mother lacked credibility.  It was clear to the Court that both the respondent and his mother were attempting to convey to the Court a state of affairs which did not exist.  They both attempted to convey to the Court that monies had been lent.  As noted, there is no evidence (whether written or oral) that the monies advanced were advanced by way of a loan.

3. For all the reasons I have stated earlier herein I have come to the conclusion that there were no loans made by the respondent’s parents to him.  His parents, it seems, have provided him with funds and access to funds to assist him in the ups and downs of life.  He has not at any time repaid or attempted to repay any amount to his parents.  I have come to the conclusion that this is the case because he is under no obligation to repay his parents.  The monies were given to him by his parents.  They were not lent to him by his parents.

4. Even if my conclusion in that regard was not correct I note that, in relation to the vast majority of the monies forwarded by the respondent’s parents to the respondent – it seems that such monies could not be legally recovered in any event (even if they formed part of a loan, which, I have already concluded, they do not).  This is because the legal recovery of such funds would be impossible.  It seems to me that any such claims by the respondent’s parents are now statute barred.  My attention has not been drawn to any evidence requiring the Court to consider whether or not the limitation period has been extended.  In the absence of any specific terms of repayment the Court would conclude that such a loan (if one existed) would be repayable on demand.  In a decision of the Full Court of the Family Court of Australia entitled Vadisanis & Vadisanis & Anor [2014] FamCAFC 97 this particular point was noted. The Full Court relied upon the well settled principles concerning the repayment of debts which had been accurately and helpfully summarised by Fullagar J in the Supreme Court of Victoria in a decision entitled Ogilvie and Adams [1981] VR 1041. Ward J in the Supreme Court of New South Wales in Chidiac v Maatouk [2010] NSWSC 386 noted at paragraph 182 that the effect of Fullagar J’s decision in Ogilvie and Adams (supra) is that:

   “When money is advanced on terms that it is to be repayable “on demand”, then the cause of action for recovering accrues on the date of the advance without the need for any demand.”

5. Fullagar J in Ogilvie and Adams (supra) stated at page 1043, inter alia:

   “The common law has always regarded the fact of indebtedness as a continuing detention by the debtor of the creditor's money, and this whether the creditor brought an action of debt or an action in indebitatis assumpsit. Therefore if A lends money to B, then instantlyB is detaining A's money. In order to prevent a cause of action for recovery arising in A instantaneously on paying the money, the parties must expressly contract out of that situation by words clearly inconsistent with that situation. The courts have long since settled it that a mere statement or agreement that the money is repayable on demand (or request or at call) is not sufficient to contract out of that situation where all else that is known of the terms of the contract is that A has paid money to B by way of loan. The lender's cause of action still arises instanter on the receipt of the money by the borrower, so that the lender's cause of action becomes statute barred at the expiry of six years after the receipt of the money. See, for example, the early cases of Capp v Lancaster [1653] EngR 296; (1597) Cro Eliz 548;78 ER 794; Ashenden v Clapham [1826] EngR 712; (1673) 1 Freeman 114; 89 ER 84 Norton v Ellam (1837) 2 M and W 461; [1837] EngR 183; 150 ER 839; Jackson v Ogg (1859) Johnson's Reports 397; 70 ER 476 and the recent case of Commercial Union Assurance Co. Ltd. v Revell, [1969] NZLR 106. See also the unanimous dictum of the Full High Court in Young v Queensland Trustees Ltd. [1956] HCA 51; (1956) 99 CLR 560, at p. 566; [1956] HCA 51; [1956] ALR 939, at p. 942, per Dixon, CJ and McTiernan and Taylor, JJ.: "A loan of money payable on request creates an immediate debt."

6. I note that Fullagar J went on to state further at page 1049 in Ogilvie and Adams (supra) as follows:

   “There is a long-settled rule of construction that, where there is a present debt between the parties to a contract to repay money, and the only terms as to repayment of the debt are to be spelled out of a promise to repay on demand, or out of a statement that the money is to be repaid or repayable on demand (or on request), an instantaneous cause of action, upon the very creation of the contract, arises in the lender.  Whether one calls it a rule of law or not does not seem to me to matter.  The only reason why I have chosen the expression “rule of construction” is because other words or terms may appear in the contract which may be in the circumstances sufficient to show an intention that the cause of action is not to arise until some actual demand or some form of demand is made or until some period after demand has elapsed:  see for example Murphy v. Lawrence [1960] N.Z.L.R. 772.  But it is equally correct to say that, where such “other words” or terms do not appear, it is settled law that a loan (for example) which is simply described as being repayable on demand or on request or at call creates a cause of action in the lender enabling him to recover the money instantaneously upon the loan being made, and without any demand being made at all.  What the critical words mean, generally, is a rule of construction, and therefore presumptive only; what the words mean in a written document recording the terms of a loan, when standing alone, is a clear rule of law.”  

7. There is nothing in cases such as Af Petersens and Af Petersens (1981) FLC 91-095 or Biltoft and Biltoft (1995) FLC 92-614 to assist the respondent. In Af Petersens and Af Petersens (supra) the Court accepted (on the basis of the evidence) that a parent had made a legally enforceable loan to a child – who was one of the parties to the marriage.  But the real question was whether or not it was “likely” that the loan would be repaid.  In the present case, as noted, I have come to the conclusion that the respondent is not able to prove that any loan existed.

8. Noting that the monies forwarded by his parents did not amount to loans and noting that the balance of the items are agreed between the parties,  I have come to the conclusion that the property pool is as follows:

LIST OF ASSETS AND LIABILITIES
Item	Held by	Applicant value	Respondent value
ASSETS
Net proceeds of the sale of Property L	Real Estate (omitted) (Respondent)	$88,881	Agreed
Subaru	Applicant	$10,000
(omitted) business	Applicant	$23,000
Contents	Applicant	$3,000
Super	Applicant	$15,000
Super	Respondent	$34,000	Agreed
TOTAL ASSETS		$173,881
LIABILITIES
(omitted) Bank loan	Applicant	$18,000
(omitted) MasterCard	Applicant	$2,500
TOTAL LIABILITIES		$20,500
NET POOL		$153,381

1. The Court must also take into account the fact that $51,000 from the net sale proceeds of Property L has already been paid to the applicant.  I have come to the conclusion that the sum of $51,000 should not be in the property pool.  That property no longer exists.  The fact that the applicant has received the sum of $51,000 already is a matter which I have taken into account in considering the overall justice and equity of any final property settlement order.  As was noted by the High Court in Stanfordv Stanford (supra) it is the “existing” property which is to be brought to account in the property pool.  This money was paid to the applicant some time ago and it has been spent – I infer on living expenses including raising the parties’ child, X.  In particular I note what the High Court had to say in paragraph 37 of the decision in Stanford v Stanford (supra).  In that paragraph the High Court noted:

   “37. First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s 79(1)(a) itself, which refers to "altering the interests of the parties to the marriage in the property" (emphasis added). The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.”

2. The references to Section 79 of the Family Law Act 1975 (Cth) (“the Act”) are, of course, nonetheless relevant to the current de facto property settlement proceedings before the Court brought pursuant to s.90SM of the Act. The important point from that quote from the High Court is that this Court has to have regard to the parties’ existing interests in property.

Contributions

1. There is no doubt that in terms of financial contributions the respondent has practically made all of the financial contributions.  The applicant did work in the (omitted) business established by the parties.  But the respondent owned the Property L property six years prior to the commencement of the relationship and the respondent and his mother provided funds to the applicant after the date the respondent was arrested.

2. In relation to non-financial contributions, I note the sole and extensive contributions made by the applicant in relation to caring for young X. He is now five years of age. During the entirety of the child’s life (apart from the first six weeks) the respondent father of the child has been in prison. The entirety of the work required to raise X has fallen to the applicant. I note in particular s.90SM(4)(c) of the Act.

3. I have come to the conclusion that the contributions based entitlements should be assessed as 40% in favour of the applicant and 60% in favour of the respondent.  I note in particular the contributions of the applicant in raising X.

Section 90SF(3)

1. I note that the respondent will be in prison for at least the next 16 years (on the available evidence).  It may sound harsh, but, nonetheless the bleak reality is that the respondent will have provided for him all of his temporal needs whilst in prison – in particular I refer to all necessary food, shelter and the other necessities of life.  He will have very minimal expenses, if any.

2. The applicant mother has to care for the child.  The child is only five years old and there are 13 more years of his childhood.  All of these expenses will fall to the mother.  She receives no child support.  She will need to continue to work as best she can and possibly re-train.

3. The cash left in the available pool totalling $88,881 will not be enough to pay for the needs of the applicant to assist her in the raising of the child.  Even when one takes into account the additional $51,000 that was paid to the applicant – by way of partial property settlement by order of the Full Court – one could still not say that is sufficient monies to pay for the raising of the child.  That is especially so when the Court has regard to the fact that the applicant has approximately $20,000 in debt ((omitted) Bank loan and (omitted) MasterCard).

4. The respondent wants to receive all of the available cash in the pool.  He wants to make this money available for his mother.  But I have already concluded that there was no loan made to the respondent by his mother or by his father.

5. In this particular case I have come to the conclusion there needs to be a significant uplift in favour of the applicant pursuant to s.90SF(3) of the Act. I would place this figure at 40%. This is because the pool is so minor and the needs of the applicant are so great – namely 13 years further in the raising of young X without any assistance whatsoever from the respondent.

6. That means that the entitlements in respect of the pool will be 80% in favour of the applicant and 20% in favour of the respondent.

Justice and Equity

1. The net property pool totals $153,381.  The applicant is entitled to 80% of that pool and totals $122,704.80.  The applicant currently has a net amount of $30,500 (this comprises the Subaru, (omitted) business, house contents and superannuation totalling $51,000 less her current total debt of $20,500 leaving a current net total for the applicant in the sum of $30,500.)  In order for the applicant to achieve 80% of the net pool ($122,704.80) she requires a further payment to her of $92,204.80.  The only cash left in the pool is the net proceeds of sale of the Property L property.  It appears to be held in the trust account of (omitted) Real Estate.  The total sum is $88,881.  It is therefore just and equitable for the applicant to be paid the full sum available of $88,881.

2. The respondent is entitled to 20% of the net pool.  Twenty percent of the net pool of property ($153,381) totals $30,676.20.  The respondent already has superannuation in the approximate (and agreed) sum of $34,000.  The parties have, as noted, agreed that each party will retain their superannuation.  The respondent will receive the sum of $34,000 available to him from his superannuation upon his release from prison.  Indeed, one would expect that there is growth in his superannuation investment in the ensuing years leading up to his release in 2031.

3. The Court must have regard to the decision in Clauson & Clauson (1995) FLC 92-595. In that case the Full Court noted:

   “There is, we think, at times a tendency to  assess  s.75(2)  factors  in  percentage terms without considering its real impact, and we think there is legitimacy  in  the  views expressed in more recent times that the Court has tended to operate  in  this  area  within artificially delineated boundaries. That is, it appears almost to be inevitable that the s.75(2) factors will be assessed in a  range  between  10%  and  20%.  A number of cases will justify an assessment outside those parameters and in any event it is the real impact in money terms which is ultimately the critical issue.”

4. So that it is the “real impact in money terms which is ultimately the critical issue”.

5. This Court must look at the reality of any given situation.  The dollar value of any order will be relatively minor because of the small size of the remaining pool in this case – minor in the respect that it is minor when compared with the costs of raising a child for 13 more years.

6. It is true that it was a short relationship.  It is true that the ordinary rule is that in short relationships the Court must pay very close attention to the financial contributions.  But this case has very unusual facts.  There are highly unusual circumstances not normally encountered by separated couples.  The respondent is in prison for murder.  He has no needs of a temporal kind (which will not be met by the State) for at least the next 16 years.  The applicant has the care of the parties’ five year old child for whom she is solely responsible.  She is in receipt of Centrelink payments.  She receives some other income from a (omitted) type business and from work as a (omitted).  The applicant’s income is relatively minor.  When her pay from other sources exceeds a certain amount her Centrelink entitlements are reduced in any event.  I do note that she has a new partner – although they do not live together.  The applicant is pregnant once again and her new partner intends providing her with funds to assist in the raising of the child about to be born.  There is certainly no evidence that the new partner will contribute to the costs of raising young X.

7. Even noting that the applicant received a payment of $51,000 in accordance with an order made by the Full Court following the appeal – I am still of the opinion that it is just and equitable (for the reasons stated) that the applicant receive all of the funds currently held in the (omitted) Real Estate trust account totalling $88,881.

8. The property settlement orders whereby the applicant will receive approximately 80% and the respondent will receive approximately 20% of the available pool – are, in the particular circumstances of this case, just and equitable orders for the reasons stated throughout this judgment.

Spousal Maintenance

1. The applicant has applied for spousal maintenance. The relevant section is s.90SF of the Act. Section 90SF(1) provides:-

   “Matters to be taken into consideration in relation to maintenance

   (1) In exercising jurisdiction under section 90SE (after being satisfied of the matters in subsections 44(5) and (6) and sections 90SB and 90SD), the court must apply the principle that a party to a de facto relationship must maintain the other party to the de facto relationship:

   (a) only to the extent that the first-mentioned party is reasonably able to do so; and

   (b) only if the second-mentioned party is unable to support himself or herself adequately whether:

   (i) by reason of having the care and control of a child of the de facto relationship who has not attained the age of 18 years; or

   (ii) by reason of age or physical or mental incapacity for appropriate gainful employment; or

   (iii) for any other adequate reason.

   Note: For child of a de facto relationship , see section 90RB.

   (2) In applying this principle, the court must take into account only the matters referred to in subsection (3).

   (3) The matters to be so taken into account are:

   (a) the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship ); and

   (b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and

   (c) whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years; and

   (d) commitments of each of the parties that are necessary to enable the party to support:

   (i) himself or herself; and

   (ii) a child or another person that the party has a duty to maintain; and

   (e) the responsibilities of either party to support any other person; and

   (f) subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:

   (i) any law of the Commonwealth, of a State or Territory or of another country; or

   (ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;

   and the rate of any such pension, allowance or benefit being paid to either party; and

   (g) a standard of living that in all the circumstances is reasonable; and

   (h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and

   (i) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and

   (j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and

   (k) the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and

   (l) the need to protect a party who wishes to continue that party's role as a parent; and

   (m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and

   (n) the terms of any order made or proposed to be made under section 90SM in relation to:

   (i) the property of the parties; or

   (ii) vested bankruptcy property in relation to a bankrupt party; and

   (o) the terms of any order or declaration made, or proposed to be made, under this Part in relation to:

   (i) a party to the subject de facto relationship (in relation to another de facto relationship); or

   (ii) a person who is a party to another de facto relationship with a party to the subject de facto relationship; or

   (iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or

   (iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and

   (p) the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:

   (i) a party to the subject de facto relationship; or

   (ii) a person who is a party to a marriage with a party to the subject de facto relationship; or

   (iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or

   (iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and

   (q) any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and

   (r) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and

   (s) the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and

   (t) the terms of any financial agreement that is binding on a party to the subject de facto relationship.

   (4) In exercising its jurisdiction under section 90SE, a court must disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.”

1. The respondent (Mr Paston) is currently serving a long term of imprisonment for murder.  He will not be released until at least 2031.  The amount of income he is able to earn in prison is very minimal.  At best, he might earn $45 per week.  In terms of his income – he is not “reasonably able” to maintain the applicant.  As to the property, he has superannuation in the amount of $34,000.  The parties have agreed that he should retain that superannuation – and the applicant should retain her superannuation in the sum of approximately $15,000.  As noted, it seems to me that it is just and equitable for the respondent to be able to rely on that superannuation when he is finally released from prison.  Also as noted, one would hope and expect that there is growth in his superannuation investment in the ensuing 16 years leading up to 2031.

2. I do not consider that it could be said that the respondent is “reasonably able” to maintain the applicant noting the respondent’s current circumstances.

3. For completeness the Court should consider s.90SF(1)(b). Is the applicant unable to support herself for one of the reasons noted in s.90SF(1)(b)? The applicant does have the care and control of the child of the de facto relationship. X is only five years old. The child will, of course, be attending prep and school (if not presently then in the very near future). I do not consider that the applicant is unable to support herself because she is caring for X. I also note that the applicant is expecting another child. I note s.90SF(3)(l). The applicant will still be able to continue in her role as a parent and work at least part time. The applicant herself is a (occupation omitted) and has given evidence that, if she lived in a major city, she could obtain a much higher income. But the applicant has chosen to live away from the capital cities. The applicant indicated that she preferred to raise a family away from a capital city. This is a reasonable decision. But it does have to be noted that the applicant does have the capacity to work. Also, the applicant has the skills and the experience to obtain reasonably well paid employment. I note that the applicant continues to work on a part time basis earning some income in her (omitted) business. I note her (omitted) business is worth $23,000 (as noted and agreed in the property pool). In addition, the applicant earns some money as a (occupation omitted). Section 90SF(1)(b)(ii) is not relevant.

4. As to s.90SF(3) and the matters to be taken into account when considering the applicant’s application for spousal maintenance – I have noted all of the matters referred to there in one way or another during the course of these reasons for judgment.

5. For the reasons stated I have come to the conclusion that the application for spousal maintenance should be dismissed. I have come to the conclusion that the respondent is not reasonably able to maintain the applicant. Further, I have come to the conclusion that the applicant has not been able to show that she is “unable to support herself adequately” for one of the reasons noted in s.90SF.

I certify that the preceding sixty-eight (68) paragraphs are a true copy of the reasons for judgment of Judge Howard

Date:  2 April 2015