Barclay and Paton

FEDERAL CIRCUIT COURT OF AUSTRALIA

BARCLAY & PATON

[2016] FCCA 1508

Catchwords:
FAMILY LAW – Bitter property dispute – parenting issues resolved by consent by 9/5 regime – each party asserting greater initial contributions – court not satisfied, despite welter of assertions, that either party made greater contribution than the other – wife’s future needs clearly greater – pool determined and to be adjusted 65/35 in favour of the wife – Husband’s desire to travel overseas with children – wife asserting husband like to hold children overseas, possibly in non-Hague Convention country – Court fully satisfied husband will return children to Australia – overseas travel permitted.

Legislation:

Family Law Act 1975, s.75(2)

Cases cited:
Stanford v Stanford (2012) 247 CLR 108
Mallett v Mallett (1984) 156 CLR 605

Applicant:

MR BARCLAY

Respondent:

MS PATON

File Number:

MLC 3010 of 2015

Judgment of:

Judge Burchardt

Hearing dates:

18, 19 & 20 April 2016

Date of Last Submission:

20 April 2016

Delivered at:

Melbourne

Delivered on:

8 July 2016

REPRESENTATION

Counsel for the Applicant:

Mr Puckey

Solicitors for the Applicant:

Clancy & Triado

Counsel for the Respondent:

Ms Wheeler

Solicitors for the Respondent:

Plaza Legal

ORDERS

Final Parenting Orders

That the parties equally share parental responsibility for the children of the marriage, namely X born (omitted) 2006, Y born (omitted) 2008 and Z born (omitted) 2011 (“the children”).
That the children live with the Wife.
That the Husband spend time and communicate with the children as follows:
(a)every Wednesday during school terms from the conclusion of school on Wednesday or 3.30pm until the commencement of school on Thursday or 9.00am;
(b)each alternate weekend during school terms from the conclusion of school on Friday or 3.30pm until the commencement of school on Monday or 9.00am and if the Monday is a public holiday at 6.00pm on that Monday;
(c)by telephone each Tuesday and Thursday evening during school terms between 6.30pm and 6.45pm with the Husband to initiate the call;
(d)on each of the children’s birthdays from the conclusion of school or 4.00pm until 7.00pm;
(e)on Father’s Day from 10.00am until 5.00pm;
(f)from the conclusion of school on Friday at 3.30pm to the following Saturday or middle day at 3.30pm;
(g)from the Saturday or middle day at 3.30pm until 3.30pm on following Sunday or day before school term commences;
(h)for the first half of all Victorian school term holidays including the long summer vacation in even numbered years;
(i)for the second half of all Victorian school term holidays including the long summer vacation in odd numbered years;
(j)on the Husband’s birthday from 4.00pm until 7.00pm if a school day and from 10.00am until 4.00pm if a non-school day;
(k)from 4.00pm on Christmas Eve until 4.00pm on Christmas Day in odd numbered years;
(l)from 4.00pm on Christmas Day until 4.00pm on Boxing Day in even numbered years;
(m)such other and further times as may be agreed between the parties in writing;
(n)that the children be able to travel to the (country omitted) with the Husband on one occasion each year for a period of three (3) weeks, in July, including term 2 school holidays, each alternate year and for a period of three (3) weeks over the Christmas period in each other year, with the wife to be given no less than 28 days written notice of such arrangements and this to commence in December/January 2016 – 2017 and with the Husband to provide make up time to the Wife as agreed between the parties and failing agreement, at the next school holidays.
(o)such other and further times as may be agreed in writing between the parties.
That unless otherwise agreed, the Father shall be responsible for collecting the children from school or crèche or kindergarten on school days at the beginning of his time and at the end of his time with the children the Husband shall be responsible for returning the children to the Wife at her residence at the front gate. In the event that the Husband’s time with the children commences on a non-school day then he collect the children from the Wife’s residence.
That both parties ensure that the children attend extracurricular activities they may be participating in.
That each party is hereby authorised to obtain from the children’s school or kindergarten all notices, letters, school reports and invitation and to attend parent/teacher interviews or other activities to which parents are invited.
That the Husband’s time with the children be suspended in the event the children are spending time with him as follows:
(a)on each of the children’s birthdays and the Wife’s birthday from 4.00pm until 7.00pm if a school day and from 10.00am until 4.00pm if a non-school day;
(b)on Mother’s Day each year from 10.00am until 5.00pm;
(c)from Good Friday at 10.00am until 10.00am on Easter Saturday in odd numbered years;
(d)from 6.00pm on Easter Saturday until 9.00am on Easter Monday in even numbered years.
That the Wife be at liberty to telephone the children each Tuesday and Friday between 6.15 and 6.30pm with the Wife to initiate the call when the children are with the Husband in holiday time.
That in the event that the children are spending time with the Husband on New Year’s Day then the Wife be at liberty to telephone the children between 10.00am and 10.30am on New Year’s Day with the Wife to initiate the call.
That the parties shall immediately inform the other of any serious illness or injury or medical emergency sustained by the children whilst in their care and further provide any particulars of any treatment received by the children together with the name and address of the treatment provider and or location at which the children is or are a patient.
That the parties shall each make available to the other any medication prescribed for the children to enable the other party to administer such medication to the children and the other party shall thereafter administer the medication as prescribed or required and the medication shall pass between the parties so as to ensure that it is in the possession of the party with whom the child is living or spending time.
That each parent:
(a)shall keep the other informed at all times of any medical, dental, psychological or other health service treatment proposed or given to any of the children;
(b)provide full particulars of the health service provider in subparagraph (a) hereof to the other;
(c)is hereby authorised to obtain from any health service provider concerned with the children all information normally available to a parent of the children.
That each party shall notify the other with no less than 7 days’ prior written notice and particulars of any change of residential address, telephone number, email address or other contact details.
That each party be and is hereby restrained from:
(a)discussing with the children or with any other person in the children’s presence, details of these proceedings;
(b)denigrating each other to the children or speaking with the children, or to any other person in the children’s presence, in derogatory terms about the other party or members of the other party’s household.
That the Husband provide to the Wife an itinerary detailing flights, accommodation and all related travel details within 28 days prior to the intended travel.
That in the event that the Wife seeks to travel with the children overseas, the Husband make available to the Wife the children’s passports no less than six months before the intended travel for not more than 3 weeks a year and with the Wife to provide make up time to the Husband as agreed between the parties and failing agreement in the next school holidays, with the Wife’s travel to be in the long summer holidays or term 1 or term 3 school holidays and to alternate each year.
That the Wife provide to the Husband an itinerary detailing flights, accommodation and all related travel details within 28 days prior to the intended travel.

Property Orders

That within 120 days:

The Husband and Wife do all such things and sign all documents necessary to transfer to the Wife all of his right title and interest in the property situate at Property H at the expense of the Wife (“the Property H property”) (“the Transfer”).
The Husband and the Wife do all such things and sign all documents necessary to discharge the mortgage encumbering the Property H (“the Discharge”) and to refinance into the Wife’s sole name (“the Refinance”).
Contemporaneously with the Transfer and refinance the Wife pay to the husband the sum of $234,694.
In the event the whole of the payment has not been made by the date then the real property be forthwith sold altogether out of Court (“the sale”) and upon completion of the sale, the proceeds of the sale be applied:
(a)Firstly to pay all costs, commissions and expenses of (the said trust transfer and) the sale;
(b)Secondly to discharge the mortgage and any other encumbrance affecting the real property;
(c)Thirdly so much of the payment as is then outstanding together with the cash sale target set by the Reserve Bank and interest thereon at the rate of 2 per centum per annum adjusted monthly from the date to the Husband;
(d)Fourthly the balance to the Wife;
Pending the payment or completion of the sale:
(a)The Wife have the sole right to occupy the real property and that during such right of occupation the Wife pay all instalments pursuant to the mortgage and all rates and taxes and like apportionable outgoings of the real property as they fall due;
(b)The parties hold their respective interests in the real property upon trust pursuant to these orders; and
(c)Neither party encumber the real property without the consent in writing of the other party save for as provided for the refinance and discharge.
The Husband retain to the exclusion of the Wife the property situate at Property T (“the Property T property”).
The Husband be liable for and indemnify the Wife again any and all liability encumbering the Property T property.
The Husband retain for his sole use and benefit and to the exclusion of the Wife the Mazda (omitted) and the Mazda (omitted) Motor Vehicles.
The Husband retain for his sole use and benefit and to the exclusion of the Wife his (country omitted) offset account in the sum of approximately $94,000.
The Husband retain for his sole use and benefit and to the exclusion of the Wife his shares valued at approximately $8,000.
The Wife retain for her sole use and benefit and to the exclusion of the Husband her shares valued at approximately $35,935.
The Wife be responsible for and pay any and all Capital Gains Tax liabilities arising from the sale of property by her.
The Wife retain for her sole use and benefit the Kia Sorrento Motor Vehicle to the exclusion of the Husband.

SUPERANNUATION

That having been accorded procedural fairness, clauses 14 to 21 of these Orders be binding upon the Trustees of the Husband’s superannuation fund, namely (omitted) Superannuation Master Trust member number (omitted) (“the Fund”).
That there be a superannuation splitting order in accordance with section 90MT of the Family Law Act 1975 (Cth) with respect to the Husband’s superannuation with the Fund in favour of the Wife.
That the Court allocate, pursuant to Section 90MT(4) of the Family Law Act 1975 (Cth), a base amount of $50,000 to the Wife out of the Husband’s interest in the Fund (“the base amount”) noting that if the Member’s benefit is still locked into the Term Deposit, the Trustee will request a Term Deposit break to be actioned and that this Term Deposit break may be subject to fees payable for which the member will be liable.
That in accordance with section 90MT(1)(a) of the Family Law Act 1975 (Cth), whenever a splittable payment within the meaning of section 90MT of the Act becomes payable to or on behalf of the Husband from his interest in the Fund, the Wife is entitled to be paid (into a superannuation account nominated by her) by the Trustee of the Fund, the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth) using the base amount (provided that the base amount does not exceed the value of the interest determined under section 90MT(2)) and there be a corresponding reduction in the entitlement the Husband would have had but for these Orders.
That paragraph 17 has effect from the operative time.
That the operative time is four (4) business days after the day on which a certified copy of the final sealed and signed Orders are served on the Trustee of the Fund.
That within 14 days of becoming entitled to receive a superannuation benefit from the Fund, the Husband will give the Trustee of the Fund:
(a)All such forms as necessary to enable it to determine the nature and quantum of the Husband’s superannuation entitlement; and
(b)Any other related information it may reasonably require.
That there be liberty to each party and to the Trustee of the Fund to apply regarding the implementation of these orders affecting the interest of the Husband and Wife in the Fund.
That the Husband sign all such documents and do all such things as may be necessary to enable the Wife to have full access to the Account held in trust on behalf of the child X.
That unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)Each party be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders (the furniture, personal possessions and like chattels in the real property being deemed to be in the possession of the respective party);
(b)Monies standing to the credit of the parties in any joint bank account are to become the property of the party in whose name it belongs;
(c)Each party forego any claims they may have to any superannuation benefits belonging to or earned by the other save for these orders;
(d)Insurance policies remain the sole property of the owner named thereon;
(e)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(f)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 3010 of 2015

MR BARCLAY

Applicant

And

MS PATON

Respondent

REASONS FOR JUDGMENT

Introduction

This is a property dispute clearly driven by the considerable bitterness that the parties feel for one another. To their credit, notwithstanding their mutual difficulties, they have been able to settle parenting issues by consent and the children will be living with their parents on a nine/five ongoing arrangement. There is, however, a remaining parenting dispute between the parties namely, whether the children should be permitted to travel overseas.
So far as property issues are concerned, the applicant husband (to whom it may be appropriate to refer as the father where the occasion denotes) seeks that the property pool be divided 55 percent to the wife and 45 percent to himself. The wife seeks a 75/25 distribution in her favour.
There is no question of splitting the difference. However, as it happens, it is my conclusion that there should be a property division 65 percent in favour of the wife and 35 percent in favour of the husband.

Matters that are agreed and/or uncontroversial

For all the intensity of the proceeding, most of the relevant facts are either agreed or not the subject of any significant controversy. The husband was born on (omitted) 1970 and the wife on (omitted) 1969. Both were born in the (country omitted) (“(country omitted”)) and remain citizens thereof. Both are Australian citizens by grant of citizenship.
The husband is a (occupation omitted) and the wife is a (occupation omitted) with something of an interest or speciality in (omitted).
They met in 2001 in (omitted) and commenced cohabitation in (omitted) 2002 in Melbourne. The husband had to return to the (country omitted) in (omitted) 2003. It appears that this was related to regulation of his visa status in Australia. The wife joined him in the (country omitted) in (omitted) 2004 and they married in (omitted) 2005.
On (omitted) 2006 their first child, X, was born. They returned to Australia in 2008 and on (omitted) 2008 Y was born, followed by Z, born on (omitted) 2011.
The husband has had a number of employment positions during the currency of the relationship. These have produced incomes of between $100,000 and $300,000 a year, although it seems reasonably clear that the husband’s earning capacity has always tended to be more towards the upper end of that scale. At the end of December 2012 the husband’s then contract came to an end and in June 2013 he returned to the (country omitted) to take up further employment at a salary of $174,000.
The husband had met and had some business interaction in 2012 with Ms E, his current partner. The husband asserted, under cross‑examination, that that relationship only became intimate, however, in 2014.
The husband notified the wife in July 2013, as I understand it from the (country omitted) that he did not wish their relationship to continue.
Although there is considerable disputation between the parties as to exactly the extent of their property at the commencement of the relationship, it is beyond question that both the husband and the wife had moneys and/or properties that they owned at that time.
In 2010 the wife sold a property she owned and the net proceeds contributed towards the purchase of the matrimonial home in Property H for $1.1 million. It seems reasonably clear that all or substantially all of the net proceeds were applied towards the purchase of the matrimonial home. The initial mortgage taken out was $780,000, and even if the net figure was $291,000, as the wife asserts, there would have been a shortfall in respect of the purchase price and the stamp duty charges. It is clear that to an extent the purchase price was met out of combined savings, although the wife’s contribution was obviously a significant one.
The husband had accrued a significant tax liability in the 2012 - 2013 tax year (he had a further liability in the 2011 - 2012 year) and in an endeavour to conserve funds, in May 2013 the family moved in with the maternal grandmother. The husband, of course, went to (country omitted) in July 2013 but the mother and children remained with the grandmother and moved back into the matrimonial home in March 2015.
The husband obtained employment in Melbourne and returned to Australia to take up that employment in July 2015. He now earns $297,000 per year (rounded off). He has a fixed term contract but is hopeful of its renewal. He has achieved (position omitted) level employment, which was a long-term aim for him.
The wife earns approximately $67,000 a year as a (occupation omitted) and a further $9,000 per year in other work. Both parties worked full-time until the advent of the children following which, on any view, the mother’s work declined as she took time to care for the children.
Against a background such as this which sets out, on one view, a relatively straightforward assessment of the parties’ positions, one would have thought it might be possible for the parties if properly advised to resolve this matter. It is a measure of the tension between them that they were so radically unable to do so.

Should there be an alteration to the parties’ property interests?

The High Court has made it clear in the case of Stanford v Stanford (2012) 247 CLR 108 that the first step in property cases is to determine the parties’ legal and equitable property interests and determine whether it is appropriate that there be an adjustment to property. In this case, however, as in so many, it is immediately apparent that there should be an alteration to the parties’ property interests. Both of them desire it. The basis upon which they conducted their affairs during their marriage has radically altered and it is plainly appropriate that there be an adjustment in these circumstances.

The pool

Most of the matters in the property pool are agreed, although there are a few areas of dispute. I understand the following to be agreed:

Assets

·Property H (matrimonial home), $1,370,000
·Property R, $277,000;
·Property T, $267,000;
·Two Mazda cars owned by the husband, $25,000;
(taken as a concession against interest from the husband’s aide memoire MFI1 – there are no valuations);
·Kia Sorento owned by wife, $41,200 (red book valuation provided by wife);
·Husband’s offset account in the (country omitted), $94,000
·Husband’s shares, $8,000; and
·Wife’s shares, $35,935.

Liabilities

·Mortgage Property H, $400,000;
·Mortgage Property T, $160,655 (wife), $164,000 (husband);
·Mortgage Property R, $50,769;
·(omitted) bank loan, wife $42,722;
·(omitted) bank loan, wife $40,819;

Superannuation

·Wife’s superannuation:
·Wife, $117,420;
·Husband, $216,497.

The matters of disagreement

The matters in disagreement are:
· The net proceeds of the sale of the wife’s property in Property C in 2015;
· Capital Gains Tax (“CGT”) payable on the sale of the Property C property and a further property at Property R sold by the wife, due to settle shortly, alleged by her to amount to $40,000;
· Whether the $50,000 advanced by the wife’s mother is, in fact, repayable;
· Whether the $80,000 borrowed by the wife since separation is also repayable;
· Whether $15,000 held in a trust for X (“X’s account”) in the (country omitted) is, in fact, that of the father.
Although this takes the matter somewhat out of order, it is not possible to explain these disputed matters in the pool without reference to the evidence more generally and, in particular, the very considerable energy expended by the parties on the issue of contributions. Accordingly, I will deal with the question of contributions and return to the pool thereafter.

Contributions

Much of the parties’ energy was directed to what was said to be imbalances in the parties’ contributions as at the commencement of the relationship.
To take the husband first, he asserts that at the commencement of the relationship he had an interest of $121,500 in his parent’s estate, together with about $40,000 worth of shares and funds and about $20,000 in cash.
The wife’s case by contra distinction asserts that at the commencement of the relationship she owned three properties located in Property S, Property C and Property K, which had a net equity of $280,000.
Much was made by both sides of the alleged superiority of their own contribution and I will come to this when I deal with the evidence. It is sufficient to say, however, that given the length of the relationship (from 2002 until 2013), it is clear that both parties applied their abilities and energy jointly to the improvement of the parties’ circumstances.
The wife’s position in respect of her three properties as set out in her trial affidavit and indeed in her earlier material, is that she possessed in 2002 a flat in Property S, purchased in 1998, worth $185,000 at the commencement of the relationship and with a $91,000 mortgage. The mortgage was reduced to just under $85,000 by the end of 2001 (see P-5 to the wife’s trial affidavit). That was sold in March 2006 for $277,000.
The purchase price of the Property S property is not indicated in the wife’s trial affidavit but the husband has asserted, at para.126 of his trial affidavit that the property was bought for $88,000 in 1998. He was not cross-examined on that assertion.
The property in Property C was bought in November 2001 for $120,000, with a $100,000 mortgage borrowed from the wife’s mother with 6 percent interest payable. The property was sold for $140,000, and settlement took place on 1 July 2015. The wife deposed in her trial affidavit that the proceeds were applied to repay her mother and the balance applied to living expenses for her and the children.
The Property K property was bought in 1999 according to the wife and in 2001 according to the husband. The husband asserts in his trial affidavit (para.128) that the purchase price was $181,000, and once again he was not cross-examined about this. The wife has deposed that the property was worth $280,000 at the commencement of the relationship and that she had a mortgage of $118,700. It was sold as earlier indicated in 2009 for $450,000, with the mortgage at the same figure.
At this point it is appropriate notwithstanding that, once again, it slightly dislodges the ordinary order to turn to the evidence actually given at court.

The evidence of the husband in chief

The husband confirmed that the figures set out in his case outline were correct. He then gave evidence that following late information he might have superannuation in (country omitted) not previously disclosed. He contacted his advisor in the (country omitted) and it emerged that his contributions stopped in 2000. He had received an overnight email showing that his two accounts had a combined value of £955 or approximately $2,000.
The husband gave evidence about the trust fund for X which was established in 2007. It was the parties’ intention to contribute £50 per month to her benefit till she was 18. He said the account was controlled by both of the parties.
The husband referred to having found some (country omitted) bankcards and the difficulties associated with moving from country to country and moving house and resultant loss of records. He said he had about $40,000 in shares and about $20,000 in savings at the time of the commencement of the relationship. He said he went through old computer records and found a screenshot he created in April 2001 supporting the figures for which he contended. He conceded that a claim against (omitted) was not on his spreadsheet. He tendered as exhibit A2 a document showing that he received compensation in 2003 of £6,600 pounds, and showing investments in the sum of around about £32,000 as at 2002. He further gave evidence of a claim against his father’s motor insurance (his parents having been tragically killed in a car crash) which produced £13,000. He had also received £5,900 from the distribution of his mother’s estate.
The applicant produced documents from (omitted) Solicitors dated 1993 in support of these matters. He said that this is where the moneys in the spreadsheets came from. The sale of his parents’ property was completed in 2007 and he received just under £41,000 which he put into what eventually became the (omitted) Offset Account. He said the resultant total was $121,500 (when converted) as at the commencement of the relationship.
The applicant went on to give evidence that he sought to take the children on a holiday to (country omitted) on 29 July 2016. There would be two full weeks in (country omitted) and they would be back by the beginning of the third week. He has friends in (country omitted) and the (country omitted) and proposed that the family would meet in (country omitted). His uncle Mr P is in (country omitted) with his family and his brother lives near (country omitted). His partner is in (country omitted) as is the mother’s brother. He said he wished the children to see them.

The father under cross-examination

The father conceded that he had worked both in the (country omitted) and Australia. He is on a three year contract at the moment and has no assets in Australia except the matrimonial home. He said that he had re-partnered with Ms E in 2014, and that she has two children aged nine and seven. Her former husband sees the children by consent. Ms E runs a (business omitted) in (country omitted) and has two other businesses. The business (omitted) is jointly held by Ms E and himself.
The husband conceded he had been to (country omitted) but has not been offered work in (country omitted) and has not sought it either. He conceded that there was nothing to stop him seeking work in (country omitted). He meets Ms E every two months and hopes she will come to Australia. She lives in rental accommodation and can move anywhere.
When it was put to the husband that there was nothing to stop him leaving Australia, he said, “[t]here’s nothing to stop me except I live here and the children live here.”
The husband has admitted he could leave his (omitted) work tomorrow and that he had applied for (country omitted) passports without the mother’s consent or knowledge.
It was put to the husband that he had told the children that they would travel with him, he responded that he had asked the children if they wanted to go to (country omitted). He had asked the wife in correspondence. He has not booked anything yet and the proposed trip would take nearly three weeks. He conceded that his youngest child is only four years old and has not spent more than eight or nine days with him. He said he would be happy to bring the children home if they were missing their mother. He said X was not objecting to going. He said, “[t]here’s nothing stopping me except orders.” He said he did not think a cash security was necessary as he intends to stay in Melbourne.
The husband conceded that his contract has a pay review at the end of each year and he might receive a bonus, although it was not likely that this would occur this year. He intends to apply for a further contract and indications were that he would get no bonus until the latter half of 2017. The bonus would be from somewhere between 0 - 17 per cent of his salary.
The husband said he earned $174,000 while he was in the (country omitted), plus a car and throughout the marriage had earned in the range from $100,000 to $300, 000. He did not take a job in (omitted) Queensland at a salary of $450,000. This was not at (position omitted) level. He was seeking (position omitted) level employment as part of his ongoing career development. He pays child support and he is paying $10,000 each year into life assurance. The husband was cross-examined about the wife’s finances and said that the quoted figure of $67,000 included her rental income. He conceded that two of the rental properties had been sold. It was put to the husband that the wife was always the primary carer of the children, and he said, “[n]ot necessarily. She wished to continue in (employment omitted).”
The husband said he had bought his (country omitted) property in 2005 from his savings. He started paying child support in 2014. A tax debt had to be payed so the family moved back to the wife’s mother in 2013. They stayed there until March 2015 and the matrimonial home was rented out. Child support was not paid for a year. The (country omitted) property is positively geared in the sum of approximately £3,000 per year on which he pays an admittedly small amount of tax.
When cross-examined about the absence of documentation to support his claims of his assets at the commencement of the relationship, he said he had struggled to find documentation. He said he had done a lot of spreadsheets. It was put to him that a 2008 spreadsheet (exhibit A5) showed a more accurate picture but he said that a number of matters were missing.
The husband was cross-examined about his assertion that the wife had an Australian Tax Office (ATO) debt at the commencement of the relationship. It was put to him that the wife in fact obtained a refund and he said he had no evidence about the matter. It was put to him further that the loans on the wife’s properties were covered by rent in 2002, and he was unable to say. He was cross-examined about his own ATO debt and said he paid for his tax debt for the 2011 - 2012 year in May 2013 with $70,000 out of savings and a $15,000 drawdown on the mortgage. The applicant was cross-examined about the account held on trust for X, but I will deal with that in my findings.
The husband said he had only disclosed his (omitted) Super in the (country omitted) recently because he found this when he was back there on a recent visit. Further cross-examination about the husband’s superannuation did not, in my view, advance the matter.
The husband was cross-examined about the proposed family reunion. He said his grandfather died just before Christmas and the funeral was in January 2016. The family had all decided that they should get together sooner rather than later as his uncle is 65. The husband said, when challenged about his travels, “I live here. I work here. I want to be with the children.”

The husband in re-examination

The husband confirmed that X was keen to see her family in the (country omitted) and was very enthusiastic about going. He said that Z spent eight or nine days with him in the 2015 to 2016 holidays and did not appear to miss his mother. He was asked whether he would wish to work in the (country omitted) and he said, “[n]o, it’s too hot.”

The evidence of the wife

The wife made a number of corrections to her affidavit. She said the first time she had seen the accounts for X’s account since 2007 was recently and she had never accessed the account. She was not aware there was $15,000 in it until today and had no documents of her own about any superannuation she might have in the (country omitted).

The wife under cross-examination

The mother said she was concerned if the husband goes to the (country omitted) he will not return the children. She said she had made no inquiries as to what would happen but she had an understanding of the Hague Convention. She did not know a lot about it. She said she was overwhelmed by the case and had not responded to the husband’s solicitor’s letters about possible travel.
She did not accept that the husband had moved to Australia to be closer to the children. He simply got a job in Melbourne. He had chosen to obtain a job in the (country omitted). She loved him and still does. She was not concerned to stop him seeing his new partner. She did not think that her children would be taken by the husband to see her brother if they were taken to (country omitted). She did not believe he would do so. In response to a question from the Court, she confirmed that the husband was merely saying this to put himself in a better light. She could not herself afford to travel to the (country omitted) and did not want to go. The children had never spent three weeks away from her and returned emotionally damaged after their January 2016 holiday with the father.
The mother, like the father, was cross-examined about disclosure. It is sufficient to say that both the husband and the wife have been dilatory and less than fully compliant in relation to discovery.
The wife confirmed that she had made requests for information about her (omitted) Super. She worked for two years and made about £20,000 pounds in the first year and about £14,000 pounds in the second year. It was put to her that this would have involved a 5 percent personal contribution and 8 percent employer contribution but the wife could not remember the percentages. The wife was cross-examined about the $80,000 drawings she had taken since separation. She said about $50,000 of this was spent on the car. It cost $48,200, together with on-road costs. She had the use of the Mazda until she bought her car and returned it to the husband. She was cross-examined about buying a bed for $3,500, a Thermomix for $2,000 and spending $2,500 on a dog.
The wife said that they had lived with her mother for two years to save money and then moved back into the family house. She bought a special dog for the children and the Thermomix saved time. She said that the husband spends money on travel to see his partner.
The wife was cross-examined about the alleged $67,000 loan from her mother but it is sufficient to say that in the ultimate she conceded that the total was $50,000. She said $49,000 was applied to the mortgage. The wife was cross-examined about the loans from her mother and said that her mother had not demanded that it be repaid.
The wife was cross-examined about selling the Property R property for $277,000. She conceded it was sold one day before auction and that she had had a valuation of $290,000 in September 2014. A valuation obtained by the husband in 2015 of $340,000 was put to her but the wife confirmed that $277,000 was the highest price she could get. The wife was cross-examined about the value of the Property K property at the start of the relationship. She said $280,000 was her estimate but she had made an earlier estimate of $250,000. She said that the renovations to the Property R property were conducted in 2001. She conceded that $45,000 was also owed on a share loan.
The wife confirmed that her mother would help her with buying the husband out of the house but she would have to negotiate with her. She had discussed interest rates with her.

The wife in re-examination

The wife explained the way in which her various loans had increased and decreased from time to time. She said one of the loans had increased from $26,000 to $40,000 this year. That increase was, in part, for the new car which the wife bought because the father kept photographing the previous car at changeover. (He clearly did and his texts annexed to his first affidavit show an unbelievable denial that this was so.)
So far as the second loan was concerned, the wife said she drew $19,000 to move back into the family home in March. She had also taken on the mortgage. It had been reduced to zero when she sold the Property C property. It went up when the car was purchased and for maintenance, house and family expenses. She then said that the loan for shares of $45,000 at the commencement of the relationship was a line of credit she had not used. Counsel for the husband objected to this evidence in re-examination. For reasons I shall come to, it is not necessary to be overly concerned.

Some findings about the credit of the witnesses

Both these witnesses were careful, considered and appropriate in the way in which they gave their evidence. The husband made numerous ready concessions, for example, in relation to his capacity to work overseas or go overseas should he wish. He impressed me as truthful. His compliance with his discovery obligations has been extremely tardy and deficient but I found him a witness of truth.
The wife likewise struck me as being a careful and thoughtful witness. She said that the proceeding had overwhelmed her and I think this is undoubtedly so. Her affect and demeanour while giving evidence was entirely consistent with such an observation. Once again, she has been tardy and deficient in relation to discovery. As with the husband, I have no doubt this was in large part due to the parties’ vigorous concentration on parenting issues. They both left the property matter very much till the end.
Although both witnesses have exaggerated their case from time to time, they were in the main witnesses of truth.

Findings on the contribution issues

The actual figures produced by the husband do not necessarily tally up with the $121,000 he says he had at the start of the relationship. Nonetheless, it is clear on any view that he had obtained inheritances from time to time and various other payments by way of insurance claims and the like. He has at all times been well paid. I accept his evidence that he had substantial assets, more probably than not in excess of $100,000 at the commencement of the relationship.

The wife likewise had relatively substantial assets at the start of the proceeding. Because there are no agreed retrospective valuations, it is not possible to say exactly what the wife’s properties were worth. If, as seems to be the case, the Property R flat was bought in 1998 for $88,000, it seems improbable that it was worth $185,000 as early as 2001-2002. If the Property K property was bought for $181,000 in 1999, it is possible that it was worth substantially more by 2002, but not entirely likely that it was worth the wife’s estimate of $280,000, bearing in mind an earlier estimate of $250,000.
Both these parties have sought to approach their initial contribution on something akin to an arithmetical basis. The evidence does not make that appropriate even if it otherwise was. In my opinion, it is sufficient to record that both these parties in all probability, brought more than $100,000 worth of assets to the relationship at its commencement. It is not possible to be more precise nor in my view is it necessary to be so. The wife’s assertion that she had some $280,000 of net equity at the commencement of the relationship is not, in my view, made out by her on the materials as they stand and does not stand as the kind of overwhelming contribution she asserted.
Nonetheless, the contribution of $280,000 or $291,000 towards the purchase of the matrimonial home is a telling one. However, it needs to be seen in context. The parties commenced their relationship in 2002, although they were apart for some time between 2003 - 2004 not as far as I can see as a result of any decision they made but as a result of bureaucratic necessity. The reality is that they comingled their affairs from an early point and at all times the husband made substantially more by way of earnings than the wife. Counsel for the wife rightly points to the weight that should be placed on the wife’s role as a homemaker and parent and refers to well-established authority such as Mallett v Mallett (1984) 156 CLR 605 in that regard. I accept that the wife’s contributions must be assessed at a substantial rather than a token level.
Likewise, the assistance of the wife’s mother in making the advances that she did was a considerable benefit to the parties and stands to the credit of the wife. Nonetheless, the parties have both contributed as best they may over a protracted period of time. The husband contributed his redundancy payments of $60,000 (which, taking the evidence as a whole are clearly additional to the $60,000 when he was retrenched in 2012) towards the general wellbeing of the family. Contrary to the in my opinion, carping and mean-spirited approach urged on me by both counsel in this case, I think this is a case in which the contributions of the parties are not properly assessed with a calculator. The disparity in their contributions is not as great as counsel had put it. In my view, the proper calibration of the parties’ contributions is equal.
Each did their best and each put in substantial amounts of money from time to time. In saying this, I bear in mind additional matters contributed such as the rent-free accommodation provided by the wife’s mother and the savings that the husband was able to effect from his salary from time to time which, inter alia, paid the CGT on the sale of the Property K property. The husband asserted this and was not cross-examined on it.

Return to the disputed property issues

On the husband’s aid memoire, MFI1, the first disputed matter is the $40,000 profit from the sale of the Property C property. This took place last year. In my opinion, this money does not merit inclusion in the property pool. The wife’s Financial Statement about which she was not challenged does not show extravagant lifestyle or expenditure. I think that the fact that the money is not now to hand shows that it has been well and truly absorbed in living expenses including in part, the rather difficult to follow purchase of the car (funds were said to have been obtained from various sources).
The wife’s purchase of a new car strikes me as being not unreasonable in the circumstances, nor ludicrously extravagant. She has three children to transport who will only grow with time and the car is not at the luxury end of the market. I therefore exclude the $40,000.
The next matter in dispute is the CGT to be paid on the Property S and Property C sales. The net profit from the Property C sale appears to have been $40,000, from which no doubt some expenses can be deducted. Although counsel referred to interest payments in this regard, it is instantly obvious that the properties must have been negatively geared, even though no evidence was given to this effect. It would not have been possible for the wife on her own account to have subsidised the various mortgage payments otherwise.
Next, the CGT on the Property S property. If it was indeed, as the husband asserts, bought for $88,000 and has been sold for $277,000, even accepting deductions for the renovations that may have occurred, this is a clear profit of just under $200,000. In the circumstances and even assuming that the wife only pays tax on half of the profit of these two properties at her marginal rate, an estimate of $40,000 seems to me to be on the light side and certainly one that is justifiable to take into consideration.
The next matter in disagreement is the question of the $50,000 loaned to the parties during the relationship by the wife’s mother. Unlike the earlier loan of $100,000 on the Property C property, which was documented by a loan agreement and upon which interest was paid, no interest has been paid or is payable upon this loan and there is no documented loan agreement. No demand has been made for its repayment. I find that the wife’s mother will not seek to enforce this debt and it should not be included in the pool. The wife said that she would have to negotiate with her mother about this sum but I note that the mother’s mother is prepared to advance yet further funds to enable the mother to retain the matrimonial home. It is not really possible to conclude that this is a debt presently enforceable.
The further matters of disagreement are the two post-separation loans amounting in total to $80,000. These, in my view, are not properly included in the pool. Rather they represent an ongoing post-separation debt that the wife will have to pay. They appear in part bound up with the purchase of the wife’s car.
X’s account, it is clear, is held in trust for her. It is not a resource available to the husband. I accept his evidence in this regard. I will, however, make orders that the husband do all such acts, matters and things as may be necessary to enable the wife to have full access to the account.

The future needs issues

Counsel for the wife submitted that this was a case in which the wife should receive a 10 percent adjustment in relation to contribution (something I have already dismissed) and that the disparity in the parties’ future circumstances was such that it was appropriate there be at least a further 10, if not 15 percent adjustment in relation to future needs.
The wife will have the three children in her care for many years to come and they are not yet even in secondary school.
Counsel pointed to the refusal of the husband to provide any cash security in the event that he might abscond to either the (country omitted) or a non-Hague country.
Counsel for the husband said that although the parties had a different earning capacity, the spend time regime is nine/five. They are not with the wife all the time. He conceded there should be some allowance for the difference in earning capacity but submitted that when the figures were analysed in detail, the wife would receive $85,000 net, whereas the husband would receive only $140,000. Counsel submitted that the wife will keep the home and he will have to purchase a property. He has always had difficulties with inconsistency of employment. Counsel submitted that the husband might have to take a job at a lesser salary and this should be taken into account. He submitted that there should be a 10 percent loading in favour of the wife.
Both counsel sought to take the Court through the figures in fashions that manipulated the figures. Those propounded by counsel for the wife would reduce significantly the amount to be paid to the husband and those propounded by counsel for the husband were naturally enough the other way around.
In my opinion, s.75(2) future needs issues can be dealt with relatively shortly. Both parties are in unexceptional health. The children will live predominantly with the mother for many years to come and the primary care she will have of them, during school time at least, means that it will be very difficult for her to obtain more work than she presently has even if she can maintain that much. Her earning capacity will not significantly increase and all three of her formerly owned properties are now sold.
The husband, on the other hand, struck me as being a man of ambition and ability. He has achieved the (position omitted) level of employment that he has sought over time and, in my opinion, although he is on a contract only and although he has had many jobs, history suggests that he will always be able to obtain further employment. In my opinion, it is more probable than otherwise in the light of his history that having as it were made the grade in this position, he will be able to proceed onwards and upwards. Nothing in life is certain but for present purposes I find that his salary will always be very substantially greater than that of the wife, even if it is not possible to say with certainty by how much.
Counsel’s attempts to finesse the figures to show that the true disparity in earnings was much less than it might have appear cannot deny or put to one side the enormous disparity in earning capacity of the parties. In all the circumstances, it seems to me that there should be a loading of 15 percent in the wife’s favour in this regard.

Just and Equitable

Given that so much of the facts were agreed, it is very regrettable that the case has required judgment. In my opinion, the result imposed by a 65/35 division of the parties’ non-superannuation assets is just and equitable.

Superannuation

The parties agree that there should be a split such that superannuation is equalised. I do not propose to take into account any other figures than those advanced by counsel for the husband in his opening. It is clear there are other superannuation assets that the parties have overseas but they are of such small moment that in my opinion in the scheme of things they are not worthy of further investigation or attention. There will be a splitting order on the figures enunciated by counsel for the husband in his opening, namely the husband $216,000 and the wife $116,000. Those figures were not the object of challenge.

Overseas travel

Despite the intensity of emotion to which this gives rise on the mother’s part, this issue does not require substantial consideration. The husband said, in effect, that his children are here and he wishes to live here. Although he could live anywhere else if he wished, he does not intend to do so, so he certainly will not go to the (country omitted) although he could. He expressed an appreciation of the force of court orders that would prevent him from over-holding the children. In short, having seen and heard him give his evidence, I believe him.
There is one aspect to the evidence I would qualify however. The husband is in a long-distance relationship with Ms E. They see each other every few months. She has two children who are doubtless citizens of the (country omitted) and who see their father by agreement. It remains to be seen whether that father is prepared to accede to any desire on Ms E’s part to relocate to Melbourne and/or Australia. I would surmise that in the event that such relocation does not occur, the relationship will sunder unless the husband returns to (country omitted). However, having said that and notwithstanding his unilateral decision to obtain (country omitted) passports without the wife’s knowledge or consent, I do not think that the husband will, for a moment, seek to abscond to (country omitted) with them to be with Ms E. If he does go back to (country omitted) he will make proper arrangements for visitation when he comes to Australia.
So far as the particular trip presently posited is concerned, the mother’s reservation is that the youngest child in particular is simply too young and he has not been away from her for anything like this amount of time before. She is clearly correct to say this. Nonetheless, even if the children were somewhat put out after eight or nine days with the father over the long Summer holidays, that is conformable with ordinary upset and first-time experience for children as young as this. The husband’s desire to attend a family reunion is anything other than sinister. It arises entirely sensibly on the facts as he puts them and which I accept. There is a somewhat dictatorial aspect to the way the father has sought to progress the matter and indeed some of his earlier emails show an unpleasing side to his personality in his dealings with or about the mother. Nonetheless, the genuineness, so as to speak, of the reunion is not, in my opinion, in doubt.
The fact is that these children are going to spend three weeks with their father over the next Summer holidays. In practice, therefore, they will spend three weeks with their father either in December/January 2016 - 2017, or in August 2016. In my opinion, the children’s development is not likely to be such that the three or four months will make any difference. I appreciate that the overseas travel may be confronting to an extent, particularly for the younger child. The father’s evidence that the eldest child, X, wishes to go was not effectively shaken in cross-examination. With the reassurance of a happy older sibling and the presence of other by no means wholly unfamiliar family members, it is reasonable to suppose that things will go well.
In all the circumstances, there is no valid reason to make the watch list order that the mother seeks.

Conclusion

Unfortunately the conclusions I have reached are not reconcilable with the orders proposed by either party. Those proposals are posited on assumptions as to outcome that have not been made good. In the circumstances, and subject to submissions, I will direct the parties to confer in an endeavour to produce an agreed minute of orders to effect my judgment. Obviously, if this cannot be achieved then further argument will be required.

I certify that the preceding ninety (90) paragraphs are a true copy of the reasons for judgment of Judge Burchardt

Date: 8 July 2016

ADDENDUM

These reasons for judgment were drafted before the end of May 2016. Since then two matters have occurred which require noting. First, the parties have forwarded proposed superannuation splitting orders consistent with what I had noted in the judgment and those orders will be made.
On 31 May 2016 Ms Mulvaney for the Husband wrote to my associate indicating relevantly:
“Our client’s employment contract has been terminated. We now make application to the Court for the matter to be reopened to consider evidence in relation to our client’s income.
We wait to hear from the court as to the appropriate course of action.”
My associate, having consulted with me responded on 1 June 2016 relevantly asserting:
“I wish to indicate that his Honour is aware of the nature of your clients [sic] employment and the recent circumstances in which he finds himself. His Honour has indicated that he will pay due regard to your client’s position in his decision.
No further listing has been allocated to this matter. Please do not hesitate to contact Chambers should you require further information or assistance.”
No further correspondence has been received from the solicitors for the husband seeking to agitate the reopening of the case further.
At para.81 of the judgment I relevantly said:
“The husband, on the other hand, struck me as being a man of ambition and ability. He has achieved the (position omitted) level of employment that he has sought over time and, in my opinion, although he is on a contract only and although he has had many jobs, history suggests that he will always be able to obtain further employment. In my opinion, it is more probable than otherwise, in the light of his history, that having, as it were, made the grade in this position, he will be able to proceed onwards and upwards. Nothing in life is certain but for present purposes I find that his salary will always be very substantially greater than that of the wife, even if it is not possible to say with certainty by how much.”
As I would hope is apparent from that extract, I was keenly aware that the husband’s employment had involved various changes from time to time both as to the positions he held and indeed as to the country in which he worked. I was keenly aware that he was on a fixed term contract only and it was implicit in what I said and I would make it explicit now for the avoidance of doubt, that I was well aware that his contract might not continue. I have made a finding however, set out above, that I think he will find further employment notwithstanding that nothing is ever certain and that his income will always be greater than that of the wife. The cessation of the husband’s previously extant position does not alter my view of that matter in any way.
To reopen the case would involve substantial further expense to the parties and would doubtless involve assertions by the husband that his employment prospects are dire and countervailing assertions by the wife pointing to his past history. In my opinion the event that has transpired, namely the cessation of the husband’s employment, does not materially alter my view of the matter. I am comfortably satisfied that the findings I earlier made properly took into consideration the sort of eventuality that has in fact transpired.
In the circumstances I did not think it was appropriate in the interests of the administration of justice to permit the husband to re-open his case and it is for that reason that I have not done so.

[2016] FCCA 1508

8 July 2016

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Areas of Law

Family Law

Equity & Trusts

Legal Concepts

Procedural Fairness

Constructive Trust