Carpenter & Woodward
[2021] FedCFamC2F 600
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Carpenter & Woodward [2021] FedCFamC2F 600
File number(s): MLC 1855 of 2021 Judgment of: JUDGE BENDER Date of judgment: 24 November 2021 Catchwords: FAMILY LAW – PARENTING – The Mother’s application for parenting orders – the Father has not filed any material and has not participated in proceedings – the children have spent no time with the Father since January 2021 following an incident relating to the Father’s heavy drug usage.
HELD – The Mother have sole parental responsibility for the children – the children to live with the Mother and spend time with the Father as agreed between the parties in writing.
FAMILY LAW – PROPERTY – The Wife’s application for property orders – the Husband has not filed any material and has not participated in proceedings – the parties do not hold any assets – the property pool consists of the Husband’s interest in his late mother’s estate.
HELD – The executor of the estate of the Husband’s late mother be joined as a party to the proceeding – the Second Respondent cause any interest they currently hold on behalf of the Husband in the estate to be transferred to the Wife.
Legislation: Family Law Act 1975 (Cth) Cases cited: Calvin & McTier [2017] FamCAFC 125
Bonnici & Bonnici [1991] FamCA 86Division: Division 2 Family Law Number of paragraphs: 71 Date of hearing: 24 November 2021 Place: Bendigo Solicitor for the Applicant: Ms Buchanan of Reign Legal Counsel for the Respondent: The Respondent did not appear ORDERS
MLC 1855 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS CARPENTER
Applicant
AND: MR WOODWARD
Respondent
ORDER MADE BY:
JUDGE BENDER
DATE OF ORDER:
24 NOVEMBER 2021
THE COURT ORDERS THAT:
1.The Applicant has sole parental responsibility for the children X born in 2008 (“X”), Y born in 2010 (“Y”) and Z born in 2012 (“Z”) collectively (“the children”).
2.The children live with the Applicant and spend time with the Respondent only by agreement in writing with the Applicant.
3.The Applicant be at liberty to serve a copy of these orders on the children’s school, general practitioner, treating psychologists or mental health counsellors or any other party as determined to be necessary by the Applicant.
4.Ms B, in her capacity as the executor of the estate of Ms C be joined to these proceedings as the Second Respondent (‘the Second Respondent”).
5.Within 28 days of the date of these Orders, the Second Respondent do all acts and things, and sign all documents necessary to cause any interest they hold on behalf of the Respondent in the property located D Street, Town E in the State of Victoria, being more particularly described in Certificate of Title Volume … Folio … to be transferred to the Applicant.
6.Within 28 days of the date of these Orders, the Second Respondent will do all acts and things, and sign all documents necessary to pay to the Applicant any money they hold on trust for the Respondent.
7.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 property (including choses-in-action) in the possession of such party as at the date of these orders);
(b)the parties each retain monies held in their independent bank accounts;
(c)each party forego any claims they may have to any superannuation benefits belonging to or earned by the other, unless otherwise specified in the Orders herein;
(d)each party foregoes any claim they may have to any inheritances to which the other party is entitled to either presently or in the future;
(e)insurance policies remain the sole property of the owner named therein;
(f)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; and
(g)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
8.All extant applications be dismissed and this matter be removed from the pending cases list.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Carpenter & Woodward has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
(Revised from Transcript)JUDGE BENDER:
INTRODUCTION
This is the Mother’s application for both parenting and property orders following the breakdown of the parties’ marriage in 2017.
The Mother filed an Initiating Application on 22 February 2021 and attempted service on the Father on 25 February 2021 and 12 March 2021.
Those attempts at service were unsuccessful and the Mother subsequently filed an Application in a Case on 15 April 2021 seeking orders for substituted service.
The matter first came before Registrar Sudholz (as she then was) on 20 May 2021 in the Bendigo sittings of the Federal Circuit Court. On that occasion Registrar Sudholz made orders for substituted service and further orders were made requiring the Father to file answering material and made notations setting out what would happen in the event the Father failed to appear. The matter was then adjourned to the August sittings of the Bendigo Circuit.
On 20 August 2021 the matter again came before Registrar Sudholz and there was no appearance by or on behalf of the Father. He also had not filed any answering material.
Registrar Sudholz was satisfied he had been properly served in accordance with her orders of 20 May 2021 and again made orders requiring the Father it file answering material as well as orders to the effect that if the Father failed to comply with those orders, then the Mother was to file an affidavit setting out why orders should be made on an undefended basis and gave the Mother leave to seek that the matter proceed on an undefended basis should the Father fail to file any material or appear on the next occasion.
The matter came before me on 5 November 2021 during the Callover for the upcoming November sittings of the Bendigo Circuit.
There was again no appearance by the Father and it was raised by the solicitor for the Mother that the only asset in which either of the parties realistically have an equitable interest in is the Father’s entitlement arising from the estate of his late mother.
As a matter of procedural fairness I made orders on that occasion that the executors of the Father’s late mother’s estate be served with the Mother’s Application, supporting material and her proposed orders.
Further orders were made requiring an appearance from the estate should they have any objections to the orders as proposed by the Mother, given that any orders I make in relation to financial matters would require their cooperation.
Again, the Father was put on notice of the adjourned date and what would occur in the event that he failed to appear.
The matter is before me today and there is no appearance by or on behalf of the Father.
The Father has also not filed any material in these proceedings to date.
I have documentation before me that confirms that the trustees and legal representatives of the estate of the Father’s late Mother have been served.
I have been advised by the solicitor for the Mother that she has had discussions with the solicitors who has the conduct of the matter on behalf of the estate. The estate solicitors confirmed that the executors and other beneficiaries of the estate have no opposition to the orders being sought by the Mother and are actually quite delighted that the Application has been made as it will facilitate the estate being appropriately and finally wound up.
I am satisfied the Father is aware of today’s hearing and the applications before the Court and the implications for him if he fails to participate in these proceedings. He has chosen not to do so. I am therefore of the view that the Mother’s application in this matter should proceed on an undefended basis and the matter be heard today.
BACKGROUND
The Mother was born in 1987 and is aged 34 years. She is working full-time for the Employer F. She earns approximately $50,000 per year. The Mother has re-partnered.
The Father was born in 1986 and is 35 years of age. It is the Mother’s understanding that the Father is unemployed. In the absence of any material being filed by the Father we do not know if he has re-partnered.
The parties commenced a relationship in 2006 and separated in 2017.
The parties have three children. X born in 2008 (“X”), Y born in 2010 (“Y”) and Z born in 2012 (“Z”).
The Mother is seeking parenting orders that would provide that she have sole parental responsibility for X, Y and Z, that they live with her and that any time they spend with their father be as determined by her.
In relation to financial matters, the Mother is seeking orders for the transfer to her of the Father’s entitlement to a share in a property that was owned by his late mother at D Street, Town E (“the D Street, Town E property”) and of any monies to which the Father is entitled that is currently held by the executors of the Father’s late mother’s estate. The Mother otherwise seeks orders that each of the parties retain to the exclusion of the other their entitlement to whatever property is owned or in which they have an equitable interest.
PARENTING MATTER
The parenting orders sought by the Mother are set out in paragraph 21 of this judgment.
It is the Mother’s evidence, which the Court accepts, that the relationship she had with the Father was one in which she was subject to very severe family violence which predominantly was a result of the Father’s ongoing and consistent use of illicit substances. Not only was the Mother the victim of the Father’s behaviours but so were X, Y and Z.
After the parties separated, the Father’s inappropriate behaviour continued and whilst the Mother attempted to allow X, Y and Z an opportunity to have a relationship with their Father, his behaviour was such that it was very difficult for them to do so.
In January 2021 there was an incident in which X, Y and Z were exposed to the Father’s violence and drug use and as a result they have not spent any time with the Father since then.
It is the Mother’s evidence, which the Court accepts, that next month the Father is to appear before the County Court in relation to a very long list of charges which are drug and violence related. It is the Mother’s understanding that although the Father is pleading not guilty to those charges, the expectation is that he is in all likelihood going to be convicted and if that occurs will face a long term of imprisonment.
Perhaps the saddest thing that I have heard in relation to parenting matters is that recently X came upon his Father in a supermarket car park. The Father was affected by some form of illicit substance and was in such a condition that he did not even recognise his own son.
As has been noted, the Mother is seeking orders that she have sole parental responsibility for X, Y and Z, that they live with her, and that anytime that they spend with the Father only be by agreement in writing.
Part VII of the Family Law Act 1975 (Cth) (“the Act”) sets out the considerations the Court must take into account when making parenting orders. The overriding requirement is that any order be in the best interests of the children.
The two paramount considerations relevant to that issue as set out in s 60CC is the right of the children to have a meaningful relationship with both of their parents and the right of the children to be protected from the risk of exposure to physical or psychological harm, the latter being given priority over the former.
Sadly, it is apparent from the evidence before the Court that this is a matter in which it is not possible at this time for X, Y and Z to have any form of meaningful relationship with their Father. The Father’s drug issues, violence and criminal activities mean that he is in no position to have a meaningful relationship with them nor can it be seen to be in their best interests that they do so.
X, Y and Z spending any time with their Father at this time would clearly place them at risk of psychological, emotional and possibly physical harm.
It is a credit to the Mother and her new partner that X, Y and Z are thriving. They have provided the children with a safe, secure and loving home where they are seeing what it is like to live in a family who love, respect and look after each other.
I am absolutely satisfied that the orders proposed by the Mother are in X, Y and Z’s best interests and I intend to make those orders accordingly.
PROPERTY
In relation to property matters, the orders sought by the Mother are set out in paragraph 22 of this judgment.
The Law
Section 79 of the Act defines the Court’s powers in determining applications for property settlement after the breakdown of a marriage. Section 79(2) of the Act provides that:
(2) The court must not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
Section 79(4) of the Act sets out the matters the Court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters are:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The matters to be taken into account under s.75(2) of the Act are as follows:
(a) the age and state of health of each of the parties; 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 marriage 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 (3), 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) where the parties have separated or divorced, 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
(ha) 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 marriage 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 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; 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
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
The High Court in the matter of Stanfordv Stanford [2012] HCA 52 held that, prior to making orders that adjust any interest in the property in which the parties have an equitable interest, in accordance with the provisions of the Act, the Court must first determine that it is just and equitable to make such orders. The High Court in Stanford (supra) held that in the majority of matters, the decision as to whether it is just and equitable for the Court to make orders adjusting the parties property interests is resolved by the breakdown of the marital relationship and the mutual desire of both parties for orders altering their respective property interests.
This is a most unusual matter in that the property in which either of the parties have an equitable interest is the Father’s interest in the estate of his late mother who passed away shortly after the parties separated.
Under the terms of the Father’s mother’s late will he is entitle to one-third of that estate.
That this Court can make orders in relation to an inheritance received after separation is well accepted.
The solicitor for the Mother has quite properly referred the Court to the matter of Calvin & McTier [2017] FamCAFC 125 in which the Full Court confirmed the longstanding law which holds that an inheritance is property of the parties and as such the Court has the power under s79 of the Act to make orders in relation to it.
The facts and circumstances in the matter of Calvin & McTier (supra) relate to an inheritance that was received some years after the parties had separated.
The Full Court held that it was appropriate for a Court to make orders that impact upon that inheritance and made specific reference to the matter of Bonnici & Bonnici [1991] FamCA 86 in which the Full Court held that the manner in which the Court deals with an inheritance must depend upon the circumstances of each individual case.
If, as is the case in this matter, there had been no other assets than the Father’s inheritance, but the Mother had clearly carried the main financial burden in financially supporting the family and also performed a more substantial role as a homemaker and parent, then it is open to and indeed incumbent upon the Court to make property orders in her favour from such an inheritance.
Whilst there is not a mutual application before the Court by the parties to alter their property interests, where the only asset of the parties is the Father’s interest in the Father’s late mother’s estate, where there has been a breakdown of the relationship and in consideration of the principles set out in Calvin & McTier (supra), it is just and equitable that orders be made that enable a finalisation of the parties’ financial relationship so that they can move on independent of each other.
I am therefore satisfied that it is appropriate I should be addressing orders that alter the parties’ equitable property interests.
Assets and Liabilities
This is a matter where at the conclusion of the parties’ relationship they had almost no assets.
This was because of the Father’s drug usage throughout the relationship.
Because of the Father’s drug usage it was the Mother who solely performed the duties of homemaker and parent. She also ensured that there was a roof over their heads, food on their table and clothes on their back as a result of her employment.
The Father’s inheritance from his mother’s estate as gleaned from the inventory of assets and liabilities lodged at the time of the application for probate, consisted of two pieces of real estate, the D Street, Town E property, the property at G Street, Town H (“the G Street, Town H property”) and cash of approximately $750,000.
On 26 June 2019 the Father received $250,000 case being his share of the moneys available at that time for distribution from the estate.
The solicitors for the Mother subpoenaed the Father’s bank records. The records disclose that by 31 August 2020, only 14 months after the receipt of the $250,000, the Father had spent the entirety of those monies.
A perusal of the bank records show that the majority of those funds were used by way of regular transfers of large amounts of money to persons who it is submitted on behalf of the Mother, and which the Court accepts, were providing the Father with drugs.
At no time did the Father utilise any of those moneys in support of X, Y and Z.
The solicitor for the estate of the Father’s mother’s estate have advised the Mother’s solicitors that remaining in the estate are the D Street, Town E property and approximately $100,000 of superannuation.
The Mother’s solicitors have advised the Court that the estate has not been able to be wound up primarily because of the behaviour of the Father.
It would appear that the Father has been squatting at the D Street, Town E property. He has broken the locks and essentially used the property as a dumping ground for rubbish. He has left the property in a state of squalor reflective of a lifestyle dominated by drug use.
Contributions
The Mother quite properly concedes that she made no overt contribution to the Father’s inheritance given it has been received by the Father as a result of him being his late mother’s son.
It is argued however that this is a matter where there should be orders made for at least part of that inheritance to be transferred to the Mother given her overwhelmingly greater contribution as parent, homemaker and income earner during the relationship.
The Mother has also made and will continue to make a considerably greater contribution post-separation as the sole carer of X, Y and Z and will continue to be solely responsible to provide for them financially, emotionally, physically, practically and in any and every other way possible.
In those circumstances I am satisfied both parties have made contributions to the property available for distribution.
s75(2) Factors
The order that the Mother seeks is that the Father’s interest in the D Street, Town E property and the funds held by the estate from the Father’s late mother’s superannuation as a result of his inheritance from his late mother’s estate be transferred to her and that, otherwise, the parties each retain their entitlement to all property either real or equity that they otherwise have.
As set out in the preceding paragraphs, the Mother will have the sole financial and caring responsibilities for X, Y and Z without any assistance whatsoever from the Father.
As such there must be adjustments made in her favour for s75(2) factors.
Just and Equitable
The total entitlement of the Father in his late mother’s estate is $453,300. This figure may vary depending on the amount the D Street, Town E property sells for. Its value is estimated to be $410,000 in the probate documents.
The orders sought by the Mother would see her receiving $170,000. This is 37.5 per cent of the totality of the Father’s entitlement under his inheritance from his mother’s estate.
Such an outcome is clearly just and equitable in all the circumstances set out in this judgment as it reflects the Mother’s contributions as parent and homemaker and her s75(2) factors.
I am more than satisfied that it would be an appropriate exercise of my discretion to make the orders that are sought by the Mother in relation to financial matters.
I certify that the preceding seventy-one (71) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Bender. Associate:
Dated: 24 November 2021
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