DELACROIX & DELACROIX

FAMILY COURT OF AUSTRALIA

DELACROIX & DELACROIX

[2015] FamCA 349

FAMILY LAW – CHILDREN – Parenting – Where the mother seeks sole parental responsibility for the children – Where the children primarily live with the mother – Where the children are 17, 14 and 11 years old – Where one of the children has indicated a wish to spend more time with the father – Where there are problems with the co-parenting relationship – Whether the father can support the child’s emotional and intellectual needs – Whether the father should have equal shared responsibility for one of the children – Whether the parties should have equal time with the child – Where the youngest child is to spend substantial and significant time with the father.

FAMILY LAW – PROPERTY – Final orders – Adjustment to existing property interests pursuant to s 79 – Whether there should be an adjustment under s 75(2) – Where the wife was employed by the husband’s family business –Where both parties’ parents offered the parties loans during the course of the relationship – Where the wife claims that the husband improperly removed sums of money from the business to produce a lower valuation – Whether a transfer of an interest in a property was a gift or a loan – Where there is a 10 per cent adjustment in favour of the wife – Where the Court is not satisfied that there is a sufficient ground for a child support departure order under s 117(2) – Where the wife’s application for spouse maintenance is dismissed.

Family Law Act 1975 (Cth) s 60CC, s 61DA, s 65DAA, s 79, s 81
Child Support (Assessment) Act 1989 (Cth) s 117(2)
Civil Procedure Act 2005 (NSW) s 100

Hoyts Pty Limited v Spencer (1919) 27 CLR 133
Equus Corp Pty Limited v Glengallan Investments (2004) 218 CLR 471
Walton v Gardiner (1993) 177 CLR 378

APPLICANT:

Ms Delacroix

RESPONDENT:

Mr Delacroix

FILE NUMBER:

SYC

4987

2013

DATE DELIVERED:

14 May 2015

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Aldridge J

HEARING DATE:

1-5 December 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Ms Christie

SOLICITOR FOR THE APPLICANT:

Fox & Staniland Lawyers

COUNSEL FOR THE RESPONDENT:

Mr Lethbridge SC

SOLICITOR FOR THE RESPONDENT:

Tilley Family Law & Mediation

Orders

Property

That the proceeds of sale of the property known as and situate at B Street, Suburb B (“the Suburb B property”) be distributed by paying $2 480 779 to the wife and $665 345 to the husband.
That the wife is to take all necessary steps, to repay to Mr E, the parties’ debts to him and to indemnify the husband against any liability in respect to those debts.
That within 45 days of the date of these Orders and simultaneously:
(a)The wife shall do all acts and things and sign all documents necessary to:
(i)Resign as a Director of the Company known as F Pty Ltd;
(ii)Transfer her shareholding in F Pty Ltd to the husband;
(iii)Assign credit and or debit loan accounts (if any) she has in F Pty Ltd to the husband; and
(iv)Transfer the whole of her right, title and interest in the Partnership to the husband including but not limited to her interest in any capital and/or current accounts of the Partnership.
(b) The husband shall:
(i)Provide to the wife all documents for her to sign to effect Order 3(a) above;
(ii)Do all necessary acts and things to remove the wife as a borrower from the Business Facility;
(iii)Release the wife from any guarantees she may have given with respect to the Company or the Partnership;
(iv)Release the wife from any obligations in relation to the Business Facility; and
(v)Indemnify and keep the wife indemnified in respect of any and all liabilities arising from her prior shareholding and/or directorship in the Company and the Partnership.
That the parties are to otherwise retain the motor vehicles and assets currently in their possession.
That the parties are to retain the benefit of the funds in their respective superannuation accounts.
That in the event either party refuses or neglects to execute any deed, document or instrument necessary to give effect to these Orders, the Registrar of the Court be appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.

Parenting

That the wife is to have sole parental responsibility for the children G born on … 1997 and H born on … 2001.
That the parties are to have equal shared parental responsibility for the child J born on … 2003 (“J”).
That J is to live with the wife.
That J is to spend time with the husband as follows:
(a)During school terms, each alternate weekend from after school Friday to before school on Monday and in the other week from Tuesday after school to before school on Thursday;
(b)For one half of all school holidays being the first half in all even years and the second half in all odd numbered years;
(c) Father’s Day from 9:00 am to 5:00 pm;
(d)On 6 July each year for at least 3.5 hours as agreed or in default of agreement from 9:00 to 12:30 pm on a weekend or after school to 6:30 pm if a school day;
(e)In even numbered years from 12:00 noon on Christmas Eve to 12.00 noon on Christmas Day and in odd numbered years from 12.00 noon on Christmas Day to 12.00 noon on Boxing Day; and
(f) Any other times as agreed between the parties.
That in the event Mother’s Day falls during a period of time that J spends with the husband pursuant to these orders, then J shall spend time with the wife on Mother’s Day from 9:00 am to 5:00 pm.
That, on the occasions J is not being collected from or returned to school, the husband is to collect J from the wife’s residence at the commencement of his time with J and he shall return J to the wife’s residence at the conclusion of his time.
That J is to have access to a mobile phone during all visits with the husband and the husband shall not restrict J from calling the wife if he expresses a wish to do so.
That both parties are to keep the other informed of their residential address and contact details at all times.
That the wife’s application for spousal maintenance is dismissed.
That the wife’s application for a child support departure order is dismissed.
That pursuant to s 65DA(2) of the Family Law Act 1975 (Cth), the particulars of the obligations these Orders create and the particulars of the consequences that may follow if a person contravenes these orders are set out in the Fact Sheet, attached hereto and these particulars are included in these orders.
That all applications and cross applications be and are hereby dismissed.
That all issues be removed from the Active Pending Cases List.
That all material produced on subpoena shall be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same not before fifty-six (56) days from the date of these Orders.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Delacroix & Delacroix has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 4987 of 2013

Ms Delacroix

Applicant

And

Mr Delacroix

Respondent

REASONS FOR JUDGMENT

introduction

These proceedings are concerned with the parenting orders that should be made in relation to the parties’ three children and orders under s 79 of the Family Law Act 1975 (Cth) (“the Act”). The court was also required to consider making a child support departure order and orders for spousal maintenance.
Mr Delacroix (“the husband”) was born in 1965. Ms Delacroix (“the wife”) was born in 1966.
The parties have three children. G (“G”) was born in 1997 and is now almost 18 years old. H (“H”) was born in 2000. J (“J”) was born in 2003.
The parties met and commenced cohabitation in 1994, according to the wife, and 1996 according to the husband. The husband was then working as a businessman and the wife in a clerical position, as a sales assistant on Saturdays and as a sports instructor through the week. In 1996 she became a full time sales assistant and extended the hours as a sports instructor.
In 1997 G was born. The wife ceased working as a sports instructor and took three months maternity leave from her position as a sales assistant. In October 1997 she resumed work as a sales assistant one day per week until about May 2000 when she was pregnant with H. In 2002 for approximately four months she worked one day a week as a sales assistant. Other than for those periods of employment the wife has not been in paid employment outside the family business.
In August 2001 the husband sold his interest in business.
In 2002, using the proceeds of the sale of the real estate agency, the parties acquired a 40 per cent interest in the I Hotel at Suburb D. The remaining interest in the hotel was acquired by the husband’s parents and the husband’s brother.
The wife did some work in the hotel painting artwork, organising functions and worked behind the bar for a short period. She did not work in the hotel from 2003 but continued to receive a wage. The husband worked full time in the hotel.
On 1 February 2007 the husband was severely injured in a motor cycle accident and was away from work for over six months during which time he was substantially cared for by the wife. He later received compensation for his injuries in the sum of approximately $920 000.
The parties separated on 22 March 2013.
Each of the parties made a substantial attack on the credit of the other. For reasons that will emerge in the course of this judgment I found neither of them to be entirely satisfactory witnesses and did not accept parts of their evidence. Accordingly, I exercise some caution in dealing with their other evidence when it was in issue and not otherwise corroborated.

Parenting

G is presently a boarder at L School. He is in Year 12. When he is not living at the school he lives with the wife. He spends time with the husband when he chooses, as arranged directly between them.
H attends M School and is in Year 9. She lives with the wife. She is free to see the husband when she chooses but, at the time of the hearing in December 2014, had not spent time with him for some months.
Both parties accept that, having regard to their age and maturity, G and H should continue to make their own arrangements as to when and how they spend time with the husband.
There was, however, a dispute as to parental responsibility. The wife seeks an order that she have sole parental responsibility for G and H and the husband proposes that the parties have equal shared parental responsibility for them.
This issue arises starkly in relation to the schooling of the three children. Whilst it is agreed that G and H should continue at their present schools for this year, it is the husband’s position that the family cannot afford to continue to send H to a private school and accordingly she should no longer attend M School after this year. The wife wishes H to continue at that school and submits the husband has the ability to pay for it.
Pursuant to interim parenting orders made on 10 September 2014, J lives with the wife and spends time with the husband every second week from after school Friday until 12 noon the following Sunday and in the intervening week from after school Tuesday until before school the following Wednesday.
J is currently in his last year at N School. He is enrolled in and due to commence at L School College next year.
Again, there is dispute between the parties as to whether the wife should have sole parental responsibility for J or whether there should be equal shared parental responsibility. Again, there is an issue between them as to whether J should attend L School College or a public school.
There is also a dispute between them as to the time J should spend with the husband. The wife proposes that the present interim regime remain in place save that the time J spends with the husband on Sundays be extended from 12.00 noon until 6.00 pm.
The husband’s proposal is that J live week about with the husband and the wife.
The trial commenced on 1 December 2014. The wife commenced her evidence in the afternoon and, by leave, gave evidence that G had been admitted to O Hospital the previous Friday with anorexia nervosa. He was admitted to the Cardiac Ward on the Friday afternoon because his heart was failing and on 1 December 2014 was transferred into the eating disorder unit at O Hospital.
It then emerged that the wife had been taking G to a psychologist weekly or fortnightly and his general practitioner weekly for weigh-ins. The wife had also been speaking with the school counsellor and the Year 11 Boarding Master as to G’s eating disorder.
The wife then added that it was likely that G would spend a minimum of two weeks in the eating disorder unit and would probably have to become a day boy at school for 2015. A meeting with his treating doctor to discuss G’s future care was to be held at 10.30 am Friday 5 December 2014 which the wife was proposing to be attended by her and not by the husband.
It then emerged in cross examination that, not only had the wife not advised the husband of the above treatment and consultations, but did not even advise the husband that G had been taken to hospital. G did so himself. The wife agreed that she had not informed the husband of the proposed meeting with the doctors the coming Friday. The wife said:
But you had taken no step, apart from telling us in the witness box that – to inform [Mr Delacroix] of this meeting, had you?‑‑‑I had asked [G] to do it, because he would ask me not to tell his father.
And did he give you a reason as to why he didn't want his father informed?‑‑‑Yes. He did.
And what was that?‑‑‑He didn’t want his father to berate him. He felt it was his problem, nobody else's. He didn’t want anybody else to know about it.
And what did you say to him when he expressed those views?‑‑‑I encouraged him to tell his father, as did [Ms P] [his treating psychologist].
(Transcript of proceedings, 1 December 2014, page 6 lines 34-45)
As to the meeting with the doctors the wife said:
Notwithstanding your knowledge that there was a serious issue and that [G] had been referred to a professor with respect to eating disorders, you took no steps to inform the child’s father of that fact?‑‑‑This professor not only specialises in an eating disorder, he also specialises in anxiety and depression which [G] is also on medication for.
The question I put to you was that when you became aware of the referral you took no steps to inform [G’s] father of that fact, did you?‑‑‑No, I didn’t.
And you did that deliberately, didn’t you?‑‑‑I was asked by [G] not to tell anybody.
Let me suggest has it occurred to you, ma’am, that [G] may express views to you not because he’s concerned about his father, but because he’s concerned about you?‑‑‑Yes, that would be right.
The fact is, isn’t it, ma’am, that you have endeavoured assiduously to preclude [G] spending significant time with his father?‑‑‑No, that’s not correct at all.
And do I take it then that insofar as the child is involved, that is, [G] is involved in relation to eating disorders, if I might ask you firstly, your position is that [Mr Delacroix] gets told nothing unless [G] forms the view that he should tell him?‑‑‑That’s correct.
And your view is that with respect to any other issue involving [G] – and you’ve mentioned two, depression and anxiety – your view is that unless [G] forms the view that his father should be told, his father is to be told nothing about any potential treatment for those issues?‑‑‑I’ve been asked by the school psychologist, [Ms P], and [Dr Q] to let [G] have his own voice.
Do I take it then, ma’am, the answer to my question was “yes”?‑‑‑Yes.
And you will be the one, I take it, who will make the decision as to whether or not [G] wishes his father to be told?‑‑‑ [G] can make that decision.
(Transcript of proceedings, 1 December 2014, page 7 line 36 – page 8 line 22)
The husband did not adduce any evidence to challenge the wife’s evidence about G’s views. It was also true that G was seeing the husband from time to time and had spent some time with the husband two weeks ago when they went out looking at cars.
It then emerged that J had been seeing the same psychologist for four months. The cross examination continued:
Yes. And did you think it appropriate that you should speak to [J’s] father before you engaged a psychologist to see him?‑‑‑No, I didn’t.
And did you think it important that [Mr Delacroix] might have some view about whether or not the child should see a psychologist?‑‑‑Yes, he would have a view on that.
And do you think [Mr Delacroix] is entitled to have a view about that?‑‑‑Absolutely.
And had you told him that you were proposing to see a psychologist it would have enabled him, for example, to speak to the child’s general practitioner, wouldn’t it?‑‑‑Yes, it would.
And you accept, don’t you, that in not telling [Mr Delacroix] you have, effectively, denied him the opportunity to have any input into the course of treatment that’s been undertaken by [Ms P]?‑‑‑That’s right.
And then that’s because, quite frankly, your view is that [Mr Delacroix] doesn’t deserve any input?‑‑‑That’s not correct at all.
Well, can you explain why in relation to your 11 year old son if it were significant enough for him to see a psychologist it wasn’t significant enough to cause you to tell his father that you were proposing that course?‑‑‑It wouldn’t matter what I said to [Mr Delacroix], he would always say no. To take him to the dentist he wouldn’t agree. He hasn’t agreed for my daughter to have orthodontics. He doesn’t agree with anything I choose to do. The child needed to speak to somebody and I felt I needed to do something to help him.
Once the child had seen [Ms P], did you form a view that the child [J’s] visit had been beneficial?‑‑‑Maybe one out of the four visits he might have got something out of it.
Well, is that a “yes”?‑‑‑Yes.
And having taken the child to a psychologist and having formed the view that the visit was beneficial, did you not think it appropriate at least at that stage to tell [Mr Delacroix] that you had undertaken that course?‑‑‑No, I didn’t.
You didn’t think, ma’am, perhaps that if [J] was in a position where he was sad and needed the intervention of a psychologist it might be relevant to tell [Mr Delacroix] as the child was spending some time with him?‑‑‑I don’t think it would have benefited either of them.
You don’t, do I take it then, think that there is any point in informing [Mr Delacroix] then of any course of treatment that you choose to undertake with respect to your son, [J]?‑‑‑No. I think [Mr Delacroix] has got every right to be informed of every decision made with the children.
If that’s the case then, firstly, why didn’t you tell him when you proposed initially to take the child to Ms #?‑‑‑Because – it’s [P].
Well, [P], I’m sorry?‑‑‑Because [Mr Delacroix] and I are unable to speak at the moment.
(Transcript of proceedings, 1 December 2014, page 9 line 27 – page 10 line 34)
When it was suggested that the difficulty in talking could be resolved by text communication the wife replied that whenever she emailed the husband or texted him she gets an abusive message back.
G was discharged from O Hospital on 18 December 2014. He has returned to school as a boarder. According to the wife, he is still struggling with his health. During his stay in hospital the husband visited him only twice.
It is to be noted that this evidence was given after the parties had been cross-examined. By a joint letter received from the parties’ solicitors dated 12 March 2015, both parties wished that the evidence be closed and no further cross examination was to be conducted. It was an agreed position that no adverse inference can be drawn from there being no cross examination from the evidence filed in:
a)The wife’s affidavit filed 16 February 2015 (those paragraphs that are read set out in Order 2 of the Orders of 19 February 2015);
b)The husband’s affidavit filed 10 February 2015; and
c)The husband’s affidavit filed 6 March 2015.

The husband’s response to these events was also telling.
By the time the husband entered the witness box later in the week he had had the opportunity to visit G. He had done so once. He had not spoken to any of G’s doctors - only to a nurse whose name he did not recall. He agreed that he was shown a bundle of papers by G that related to his condition, a proposed treatment plan and a document dealing with the role of parents. Although the husband denied that he merely flicked through the papers and did not read them, he could not recall any details of the proposed program, what it was that he had been recommended to do to assist G or any significant information he would have had if he had read the documents. His evidence that he read them cannot, therefore, be accepted. He agreed that he had not taken steps to keep copies or do any further research into G’s condition or treatment.
The husband said that he opposed G being on anti-depressants from Year 7 saying that he did not believe that anti-depressants were an answer and that possibly G talking to his parents would be better.
When it was pointed out to the husband that it was in fact a psychiatrist who had prescribed the anti-depressants, he said that he had not spoken to the psychiatrist but merely spoken to the general practitioner who had referred G to the psychiatrist, saying “the decision had already been taken so I discussed it with the GP.” It is to be noted that the psychiatrist who prescribed the anti-depressants was in fact the very same psychiatrist that the husband consulted after his suicide attempt.
The husband thus approached G’s very serious condition in a remarkably cursory manner.
H also saw a psychologist on eight occasions from March 2013 until August 2013 to assist her with settling into school at M School. On this occasion the wife did inform the husband.
The husband said that he became aware at some time that H was seeing a psychologist but did not know whether she needed to go. He would have preferred to have been involved in the process. He had however not made any enquiries of either the general practitioner or the psychologist as to H’s need for assistance or the results of the consultations.
Similarly, the husband has never contacted H’s school counsellors saying that he had effectively been given no information about the children. That may be so but then he has not, however, sought that information out when it was available to him.

The Parties’ Behaviour in Front of the Children

In January 2013 the family went on holiday to Country R for ten days. Whilst the husband disputed that he was withdrawn and distant during the holiday, the wife’s evidence that he was, was confirmed by H saying the same to the Family Consultant. Whilst in Country R, the wife informed the husband that she wished to end the relationship. Upon return from Country R she moved into G’s room.
At about 6.45 pm on 24 February 2013 the wife observed the husband staggering downstairs to the lounge. He was crying, his speech was slurred and he appeared disoriented. He kissed the wife on the forehead saying “Goodbye. I love you”.
The husband then walked out to H who was sitting at the kitchen bench with J nearby. The husband kissed H on the forehead saying “Goodbye [H], I love you. I will always love you. I am sorry”. When H asked “Dad where are you going?” the husband replied “Goodbye I love you”. The husband returned to the bedroom and fell face first on the bed. The wife then saw a half empty bottle of rum and a note on the bedside table which read “I am sorry. Goodbye. I love you all. You can have everything now”. On the ground was an empty bottle of Temazepam. These are sleeping tablets which were prescribed for the wife. She ascertained that the husband had taken 23 of the tablets. The wife called emergency services and the husband was taken by ambulance to the S Hospital emergency department where he was kept for 36 hours and then transferred to the psychiatric emergency care unit (Affidavit of Ms Delacroix sworn 20 November 2014 at [157] – [159]).
On 27 February 2013 the husband was transferred to the C Clinic in Suburb U where he agreed to participate in a four week program.
Towards the end of that four week period the parties then commenced to have acrimonious exchanges about their property division. The wife returned home to find the husband at home. All of the children were present. The wife asked him to leave and the husband responded “No. I don’t actually have to leave.” He then stepped out the front door. H locked the kitchen door and G locked the backdoor to prevent the husband from re-entering the house. When the husband tried forcefully to open the door he said to G, “[G] you are siding with your mother. Let me in. Open this door” (Affidavit of Ms Delacroix sworn 20 November 2014 at [171].
The husband’s version is slightly different saying that he was never in the house and he merely asked G to open the back door as he needed to go to the toilet. Thus, it is undisputed that at the time of this visit, the children were present and the doors were locked to prevent the husband from entering.
On 7 May 2013 the husband attended the premises to collect some tools from the garage. He saw that some were missing. The husband says that G saw that he was upset and went inside and told the wife who called the police. When the police arrived the husband left. The following day he returned to collect his tools. He could not find them so the husband called the police. Apparently the police persuaded the wife to hand over the drill and the sander but not the other tools. More importantly, after the husband left, the wife noticed that the cupboard doors had been pulled off from her grandmother’s antique sideboard in which the tools had been stored. The garage door was also off its hinges. Later in the day G pointed out a crack in the wall to the wife.
G also said to the wife, according to her, “I saw Dad on Friday night walking past your car. He punched the right hand side of the passenger window” (Affidavit of Ms Delacroix sworn 20 November 2014 at [174]).
The following day the wife attended Suburb V Police Station which led to the police obtaining for her a provisional Apprehended Domestic Violence Order (“ADVO”) with the wife and the three children as protected persons.
The wife said no more of the incident in her affidavit. However, it was the husband’s position that some three weeks after these events G told the husband that he had done the damage in the garage. The husband says that he then contacted the wife and contacted the police who withdrew the ADVO. This is contrary to the wife’s version as how the ADVO was withdrawn which was:
The Domestic Violence Liaison Officer informed me prior to the mention on 25 June 2013 that the Magistrate would not agree to the interim ADVO being extended for a period of 6 months and thereafter, if there were no further problems, the withdrawal of the application for a final ADVO. I reluctantly opted to request the Police not to continue with the ADVO application. I hoped that it would avoid further inflaming the situation between [Mr Delacroix], myself and the children.
(Affidavit of Ms Delacroix sworn 20 November 2014 at [182])
In cross-examination, however, the wife said that she told the police the husband had damaged the garage because that is what she thought at the time. She said she later found out that the damage to the garage door had in fact been done by G. She said her affidavit was truthful as she had only just found out that G had caused the damage. When it was put to her that she had known the true position when she swore the affidavit the wife said she did not remember when G told her. Even if that had been the case, the wife at no time sought to correct or add to her affidavit at any time prior to her cross-examination. When regard is had to her affidavit a reader would wrongfully gain the impression that the husband was liable for the damage. This reflects poorly on the wife’s credit.
On 18 August 2013 there was an incident at the Suburb B home when the husband came to collect J. The wife described it in her affidavit as follows:
[Mr Delacroix] was standing in front of the garden having entered the gate. [Mr Delacroix] and I argued, [Mr Delacroix] pushed me, I grabbed his shirt to stop myself from falling over, his shirt ripped and I fell to the ground. [Mr Delacroix] said to [J]: “Look what your mother has done to me”. I rang police. [Mr Delacroix] rang the police. [H] and [J] witnessed the incident. The police attended the property and I was charged with common assault and taken to [Suburb V] Police Station. I was served with an AVO with [Mr Delacroix] as the victim. I was given a section 10 for the common assault charge. The AVO has since expired.
(Affidavit of Ms Delacroix sworn 20 November 2014 at [187])
What actually occurred is in found in the police record of the incident.
According to the provisional ADVO the wife told the police:
Yes I hit him. He was wondering around in my property, I told him to fuck off.
…
I grabbed his shirt and pulled it and I fell back into the bush. I was really pissed off with him and wanted to hit him harder.
(Exhibit 8, part 2, page 246)
In cross-examination the wife also admitted that she told the husband that he was a ‘fucking cunt’.
Of this incident the wife said it was a brain snap and that is how angry she was.
Importantly, the wife accepted that the version she puts in her affidavit bears little relationship to what happened. She agreed that it was incomplete and untruthfully represented what occurred.
Credit issues aside, all of the above demonstrates that the parties have little difficulty behaving badly in front of their children.

Principles to be Applied

In deciding whether to make a particular parenting order a court must regard the best interests of the child as the paramount consideration. In determining what is in the child’s best interests the court must take into account the considerations set out in s 60CC of the Act.
There are two primary considerations. The first is the benefit to the child of having a meaningful relationship with both of the child’s parents.
The Family Consultant opined of G:
There are aspects of his relationships with family members which appear to remain difficult but, with increasing maturity and independence, he seems to be in a good position to be able to maintain meaningful relationships with both of his parents.
(Family Report dated 7 November 2014 at [47])
Notwithstanding there is some relationship between G and the husband, they do not see each other frequently. The Family Consultant accepted that it was appropriate for the husband to stand back and not to press G for more time but he needed to be cautious about standing too far back. However, as G’s admission to hospital confirms, G is opposed to having the husband involved in significant aspects of his life. Given the age of G, the reality is the relationship will develop or not, as sorted out between G and the husband.
As has been seen H has a very limited relationship with the husband. Of her, the Family Consultant said:
…it is damaging to [H] for her to be exposed to the dispute over finances and for either parent to portray the other parent negatively. Whilst [H] is 14 years old and seemingly actively involved in peer relationships, it is important that both parents address the concerns that she raises and actively encourage her to maintain a relationship with her father, at the very least, through regular communication.
(Family Report dated 7 November 2014 at [49])
Implicit in this statement is H deciding for herself when she will see the husband but that it is appropriate that her mother encourage her to do so.
The effect of this is that although G and H would benefit from a meaningful relationship with their father, the relationship is, at present, limited and that it is really up to the children, facilitated by the parents, to develop that relationship further.
J sees the husband regularly. His relationship with the husband is of value to him. He has a close relationship with the wife. It is important therefore to put orders in place that will continue the maintenance of his meaningful relationship with both parents.
The second primary consideration is to protect the children from physical or psychological harm from being subjected to or exposed to abuse, neglect or family violence. Each of the children have witnessed their parents being violent towards each other - physically and verbally. There seems, however, to be no recent instances of such behaviour. This, of course, has partly been achieved simply by the parents having no contact with each other. The prospect of future violence between the parents can be minimised by putting in place orders in which the change-overs for J take place at school and not between the parents personally. On other occasions the change-over will have to be at the wife’s house unless the parties can agree on other arrangements.
There is no suggestion of any abuse, neglect or violence directed towards the children.
There are a number of additional considerations which must be taken into account.
The views of the children as to parental responsibility are not known. It is obvious from G’s behaviour in relation to his admission into hospital that he does not want the husband involved in important decisions in his life.
H is generally distant from the husband.
J on the other hand is keen to see the husband. He told the Family Consultant that he does not like the orders that are presently in place because he spends too little time with the husband and there are long gaps between the time he spends with him. He would prefer to spend half of each week with each parent. The Family Consultant thought that there needed to be some caution in to weighing J’s views. This is because his views may be a reflection of him protecting himself and removing himself from the conflict. The husband has not previously held a role of a primary carer and J has not yet experienced the arrangement he seeks to have put in place. Noting that, the Family Consultant opined:
Caution would be required if significant weight were not given to [J’s] views, particularly in the context of him having two older siblings who spend time with their father in accordance with their wishes. [J] has expressed an indication that he will also spend time with his father in accordance with his wishes, irrespective of court orders. He has, in some ways, already done this as he was arranging to spend overnight time with his father when his mother was particularly not supportive of it. Whilst he may not currently have the capacity to do as he pleases, it will only be another year or so before he will. There would be a benefit of implementing an arrangement now that will work for [J] as he gets older, rather than implementing an arrangement that is likely not to last.
(Family Report dated 7 November 2014 at [51])
There is some force in that opinion, particularly as until the interim orders were put in place, J was playing a significant part in directly organising with the husband the time he would spend with him. He had to do that because the parents either would not communicate with each other about that, or would not agree. J’s views, generally speaking, support the orders sought by the husband.
The wife spends time with the children and communicates with them frequently and appropriately. The same cannot be said of the husband.
On 2 July 2013 the husband rang H to tell her that he had booked a parent teacher interview for him to speak to her teacher. H then became extremely distressed. She cried and told the husband that she did not want him to go as the wife was going and she did not want a scene. The husband did not attend the interviews but, as far as the evidence discloses, made no other effort to speak to the teachers. The husband gave evidence that he receives the M School newsletters but does not read them all. He said that he did not always have the opportunity and did not get to read them and get back to them but could not say why he did not read them all. When asked what sport H plays the husband said netball, but could be basketball. He was then asked in what sport H just played a grand final. The husband did not know.
There is little communication between H and the husband and the evidence discloses that he is prepared to do little or nothing to inform himself of important matters in her life which would provide the subject of useful communication between them, hopefully leading to a development of their relationship.
The husband was due to take J to the Suburb N Rugby Awards in a period when J was spending time with him. The husband did not go because he thought the event was rained out although he made no enquiries to see whether that was in fact the case. He said that J did not press him to take him. Thus it was that J did not receive at the rugby awards night the trophy that he had won or a trophy for having played 50 games for the club. Indeed, at the time of the hearing he was not aware that J had won these awards. Certainly J had not told him.
It does not say much for the relationship between a son and his father that J cannot, or does not at least, tell his father of his receiving what would be two important awards in his life. To all this the husband merely replied that, if he had known, he would have made an effort to get there. It would be in the interests of J, in particular, for the husband to have made more of an effort to be involved with J’s life so as to know what was in fact happening.
These matters, coupled with the material earlier referred to in relation to the medical treatment of G and H, raise real concerns as to whether the husband should have any parental responsibility for the children. It also casts doubts on the nature of the relationship J in fact has with his father.
The three children obviously have a relationship with each other although G’s relationship with the other two children is limited by his being a boarder and, no doubt, by his health issues. Nevertheless it seems that all three children have a close relationship with each other.
The reality is however that J will only see H and G when they are all with the wife.
The wife has entered into a new relationship with Mr W. Mr W spends most weekends with the wife and at times throughout the week when he is not away for work. He spends four to five nights per week at the wife’s house. When it was suggested that this was significant time the wife replied that Mr W arrives at 8.30 pm and leaves at 6.00 am. She agreed that, although Mr W and her have not discussed cohabiting, it is likely they will live together permanently at some time.
Mr W attended the interviews for the Family Report. J seems to have adjusted to having Mr W involved in the family but has some difficulties with his son. H is not close with Mr W but she says that she no longer gets upset or angry regarding him being in the home. Nonetheless the Family Consultant noted that the interactions between the children and the wife and Mr W were warm and playful.
There is no reason to think that the involvement of Mr W in the children’s lives would point in any particular direction in relation to the orders the parties seek.
It is necessary to consider the extent to which each of the children’s parents has taken or failed to take the opportunity to participate in the making of decisions of major long term issues in relation to the children, spending time with the children and communicating with the children. There is no dispute that the wife is fully engaged with each of the children in this regard. Indeed the criticism of her is that she participates in decisions about the children to the exclusion of the husband.
It is also apparent from what has been written above that even when faced with the opportunity, or indeed what one might have thought the obligation, to involve himself in the children’s lives, particularly the medical treatment and school and sporting interests, he has not taken that opportunity. That puts the husband in a particularly poor position to assist making significant parenting decisions and one can well understand why the wife has taken it upon herself to make any significant decisions in relation to the children.

G described the husband in his interviews with the Family Consultant in May 2014 as “uninvolved and unavailable”. That is not an inappropriate summary. Another way to put it is that although the husband’s explanation or his behaviour is that he has “stood back” from the children, the Family Consultant opined that perhaps he has stood back too far. Thus, whilst the wife accepted that the husband was entitled to have a view about medical treatment for the children and that he had a right to be informed of any decision made about the children, she did not give him the opportunity. As the husband correctly submitted, simply because the parents are unable to speak at the moment is not a sufficient explanation.
On the other hand, the evidence also clearly establishes that when given the opportunity the husband has not been involved. The most telling example of that is his cursory involvement, if it can even be called that, in G’s treatment at O Hospital where, at the time of the hearing, the husband had not spoken to a treating doctor or even completely read material that G gave to him.
The wife has borrowed from her father to support herself and the children having received little support from the husband. The husband says that he cannot afford it. I will return to this later.

Each of the Parties’ Proposals is a Change in J’s Circumstances

The main change in the husband’s proposal is that J would be spending significantly more time with the husband – time which he has not currently yet spent and he has also not experienced that much time with the husband as a primary care giver. Nonetheless, J is keen to spend more time with the husband and he is supported in that by the Family Consultant. Thus, although there will be a change in J’s circumstances, it is not one that will obviously be of detriment to him.
Without going into the details, it is accepted by counsel for the wife that the wife can be subject to criticism for failing to facilitate the children’s relationship with the husband and his family post separation. There have been difficulties with the children speaking with the husband by Skype and telephone. She has prevented the paternal grandmother from visiting G in hospital and has acted to facilitate G and H’s wishes not to see their father at times. The wife has acted on G’s wishes to withhold information from the husband. Otherwise, the wife seems to have provided as best she can for the children’s needs including their emotional and intellectual needs. Indeed she has been astute to seek and obtain assistance for them from school counsellors, psychologists and psychiatrists when she feels the need to do so.
This cannot be said of the husband. As earlier described the husband seems to be uninvolved and unavailable. His lack of insight into his children’s needs and interests, particularly J and his sporting achievements, is telling and raises concerns about the amount of time J should spend with the husband. This is particularly concerning as it is with J that the husband has anything resembling a close relationship. It is difficult to see how a parent can properly respond to a child’s intellectual and emotional needs if he does not interest himself sufficiently in their lives even to know, or have the children tell him, of significant events in their lives such as winning a major sporting award or a sports grand final. Concern that arises from this is that J is moulding his relationship to suit the husband rather than the husband being involved in J’s life and supporting his emotional and intellectual development.
What I have said sufficiently deals with the attitudes of the children and the responsibilities of parenthood as demonstrated by each of the parents. I have also dealt with family violence involving the child or a member of the child’s family.

Equal Shared Parental Responsibility

Section 61DA provides that when making a parenting order in relation to a child the court must apply a presumption that it is in the best interests of the child for the child’s parents to have equal shared parental responsibility for the child. That presumption may be rebutted by evidence if it satisfies the court that it would not be in the best interests of the child for there to be equal shared parental responsibility.
I am satisfied that it is not in the best interests of G and H for there to be equal shared parental responsibility. This is because of the un-involvement of the husband in important aspects of their lives, even when given the opportunity. It would also appear to be in accordance with their wishes as inferred from the evidence of G and H. G is nearly 18 years old in any event. H has a very limited relationship with her father. When you add to this the difficulty that the parents have in communicating, the presumption is easily rebutted.
In doing so I am fully aware of the view of the Family Consultant that giving the wife sole parental responsibility is to exclude the husband from the decision making in relation to G and H, of which they would be aware. They are, however, already well aware of his lack of interest so this consideration does not have significant weight.
The position in relation to J is much more finely balanced. Although a number of the same considerations that apply to G and H also apply to J there is also a significant difference in that whatever orders are to be made in these proceedings J will be spending a lot of time with the husband. The husband therefore will have a substantial involvement in his life. Whilst I am very concerned as to the husband’s degree of involvement with J and his willingness to be involved in informed decision making, if J is to spend a lot of time with the husband it is important J should know that the husband has a role to play in important decisions about him. It would be a difficult position for all the parties to be in if the wife had sole parental responsibility yet J was spending significant and substantial time, if not equal time, with his father.
Ultimately, the issue is whether the presumption in favour of equal shared parental responsibility is rebutted. Taking these matters into account I am of the view that the presumption has not been rebutted and that there should be equal shared parental responsibility in relation to J.
In that event, s 65DAA of the Act requires the court to consider whether the child spending equal time with each of the parents would be in the best interests of the child.
J’s views support equal time. However, the important countervailing consideration is what I found the husband’s unavailable and uninvolved approach to his children. Whilst J does spend considerable time with the father it is of real concern that the nature of the relationship is such that the husband does not take, for example, steps to take J to his awards night, enquire from him if it is important that he should go, or that there is a such a relationship that J would tell him that he has won such an award. Nonetheless the Family Consultant said of this proposal:
However, the problems in the co-parenting relationship, [Mr Delacroix’s] full time care of [J] being untested and the cautions about placing too much weight on [J’s] views all indicate that an equal time arrangement may not be in [J’s] best interests.
(Family Report dated 7 November 2014 at [62])
I accept that opinion. I am also concerned that having to move between households on a weekly basis, which is something that J has not yet experienced, would not be in his best interests.
I am, however, satisfied that it would be in J’s best interests to spend substantial and significant time with the husband as defined in s 65DAA(3) of the Act. That is to say, it is important that J spend time with the husband on week days as well as weekends and holidays and on significant occasions to the child and the parent. There is no doubt that such an order is reasonably practicable. There are no particular difficulties about implementing such an arrangement provided that face to face changeovers between the parents are avoided where possible.
There was some criticism of the husband’s accommodation. He shares a four bedroom house with another person. Whilst the accommodation is not ideal J has not raised any particular difficulties about it.
Accordingly, there will be an order for J to spend time with the husband each alternate weekend. This is important because it will enable J to spend weekends with his father but also alternate weekends with his brother and sister.
The wife strongly submitted that even if J was to spend alternate weekends with the husband he should be returned to the wife in time for Sunday dinner so the family unit (which the wife considered to be her and the three children) could have dinner together. Whilst it is desirable for the children regularly to see each other this consideration does not weigh in favour of there being a return on Sundays. Indeed, the preferable course is to avoid a face to face changeover. The changeover will be affected on Mondays direct for school. In the intervening week the appropriate order will be that J spend two days per week from after school until before school with his father. There will also be orders to provide for special days and holidays.

Property

Applicable Principles

According to guidelines established through a series of leading decisions the court is required to determine the following matters:
d)The assets, liabilities and financial resources of the parties to the marriage.
e)Having regard to the breakdown of the marriage if any, is it just and equitable to consider whether the alteration of the parties’ interests in their properties is just and equal.
f)All relevant contributions of each of the parties.
g)The matters in paragraphs (a) – (c) of s 79(4), must be identified and weighed against each other.
h)The matters in paragraphs (d) - (g) of s 79(4), particularly paragraph (e) which takes up, by reference, the provisions of s 75(2) must be considered and a determination made as to what, if any, alterations should be made to the entitlements of the parties earlier assessed on account of their contributions.
An order under s 79 of the Act must not be made unless the court is satisfied in all of the circumstances; it is just and equitable to make the order.
Although there was a dispute between the parties as to whether they commenced cohabitation in 1994 or 1996 the exact date does not appear to be critical. It is clear that on 4 July 1995 the husband entered into a property settlement with his former wife.
The position of the parties by 1996 was that the wife had sold a property in which she had an interest and had realised $60 000. The wife had a car valued at $10 000.
The husband owned a property at X Street, Suburb Y (“the Suburb Y property”), which was the subject of a mortgage. He had a half interest in his real estate agency, a car which he later sold for $60 000 and a boat he later sold for $20 000. In December 1997 the property at X Street, Suburb Y, was sold for $425 000.
Following G’s birth in July 1997 the husband’s parents gave the parties $30 000.
On 16 December 1997 the parties purchased Z Street, Suburb AA (“the Suburb AA property”) for $700 000 using the proceeds of the sale of the property at Suburb Y, the proceeds of the sale of the wife’s property and a loan from the wife’s father in the sum of $200 000 to make the purchase. From this time the wife worked primarily as a homemaker and parent.
In 1998 the parties borrowed $180 000 from the wife’s father which was repaid in 2000.
In July 2000 the husband and his business partners discovered that one of their employees had been stealing money from their business. A claim was made against the insurers but, pending the settlement of that claim, they borrowed $294 500 from the wife’s father to reimburse the stolen funds to the landlords. A further sum of $50 000 was borrowed from the husband’s parents. Ultimately, the insurer met the claim and both loans were repaid.
On 1 August 2001 the husband sold his interest in the business for $936 001.
In 2002 the husband received an inheritance of $115 038. Also in 2002 the parties acquired an interest in the I Hotel at Suburb D. The I Hotel at Suburb D is located at BB Street, Suburb D. The business, but not the premises, is owned by F Pty Ltd. The shareholders at the time of acquisition were the husband’s father, the husband’s mother, the husband, the wife and the husband’s brother Mr CC Delacroix. The husband’s parents held 40 ordinary shares jointly, the husband and the wife held 40 ordinary shares jointly and Mr CC Delacroix held 20 ordinary shares. Each shareholder also owned 20 “dividend” shares. A shareholder’s agreement dated 1 April 2003 provided that the agreement took effect from 29 August 2002, the date of the acquisition of the hotel. It recorded that each of the shareholders was required to advance to the company the following amounts:
The husband’s parents       $3 440 000 (jointly)
The husband and the wife   $3 440 000 (jointly)
Mr CC Delacroix                 $1 720 000
The company owns the business of the I Hotel but not the premises. The premises are owned by a partnership which consists of the co-owners of the land who are the husband’s parents as to 40 per cent, the husband and the wife as to 40 per cent with Mr CC as to 20 per cent.
On 1 April 2003 they entered into an agreement to operate a partnership, in the same proportions as the ownership of the land. The purpose of the partnership was to lease the land on which the Suburb D Hotel is operating to F Pty Ltd. At least for the last few years, the practice has been that the company pays rent to the partnership in such an amount as determined each year that ensures the company does not make a significant profit but, rather, breaks even. Thus the profits, if any, of the hotel are distributed to the participants by way of dividends from the partnership.
The total purchase price was $7 850 000 and additional expenses such as stamp duty.
The husband and the wife paid for their interest in the hotel by using the sale proceeds of the husband’s real estate business and by borrowing $2 790 000.
In February 2005 the Suburb AA property was sold for $1 560 000 and they purchased DD Street, Suburb B for $2 655 000. The purchase was funded by the proceeds of sale of the Suburb AA property, a mortgage and a further loan in the sum of $200 000 from the wife’s father.
In February 2007 the husband was significantly injured in a motor vehicle accident. He was off work for some six months and for a significant period substantially cared for by the wife.
In 2008 the husband bought a boat for $360 000 and spent $20 000 in renovating it. His parents gave him $50 000 towards its purchase.
In February 2008 the parties purchased EE Street, Suburb AA (“the EE Street property”) for $1 515 000.
In April 2008 the property at DD Street, Suburb B was sold for $3.5 million. The sale proceeds were used in part to repay $800 000 of the loan used to purchase the interest in the hotel and the balance was invested.
In July 2009 the parties purchased B Street, Suburb B (“the Suburb B property”) for $2.9 million and in August 2009 sold the EE Street property for $1 390 000. $200 000 was borrowed from the wife’s father to assist with the purchase of the Suburb B property.
On 29 October 2009 the husband received damages in respect to his personal injuries in the sum of $920 067. The funds were used to discharge the mortgage on the Suburb B property and to reduce the hotel loan by $190 000.
In 2010 the husband sold the boat for $310 000.
In the late 2011 the husband’s parents transferred their interest in a property at FF Street, Suburb N (“the Suburb N property”), to the husband, the wife, the husband’s brother Mr CC and his wife Ms CC, each having a 25 per cent interest.
In late 2012 the Suburb N property was sold for $3.5 million. The husband and the wife received $1 662 900.98 as their share of the proceeds. For reasons that are unexplained the solicitors acting on the conveyance transferred $1 748 902.32 into the parties bank account. From these funds $1 500 000 was applied to the loan used to obtain the interest in the I Hotel. $52 500 was paid to the husband’s parents and the husband purchased a motor vehicle 1 in the sum of $200 000.
The terms of the acquisition and sale of the Suburb N property are controversial. The husband asserts that it was in effect a loan from his parents and that, although the transferees were entitled to any profits they might make on the re-sale of the property they remained indebted to his parents for the value of the land at the time it was transferred. The wife’s position is that the property was a gift. I shall return to that shortly.

The I Hotel

Since the acquisition of the hotel in 2002, save for the time when he was prevented from doing so by his car accident, the husband has worked at the I Hotel, Suburb D. It has been the family’s sole source of income since that time. From the outset the wife received a wage from the I Hotel even though she ceased worked there shortly after its acquisition. Mr CC’s wife Ms CC also received a wage although she was not working there. At the time of separation the wife was receiving approximately $45 000 per annum before tax by way of salary and approximately $60 000 per annum before tax from the partnership (being a dividend of approximately $15 000 per quarter).
On 5 August 2013 the wife’s employment was terminated. The husband said of the termination:
[Ms Delacroix] continued to receive her salary until 5^th August 2013 when the other directors of the company resolved that it be stopped as she was no longer doing any work for the company we had separated and my brother was working twice the hours I was.
(Affidavit of Mr Delacroix sworn 13 November 2014 at [43])
This is misleading.
The husband’s brother, Mr CC, said he played no part in the decision. He said his parents were not actively involved in day to day operation of the hotel which was undertaken by him and the husband. The husband was in charge of the financial affairs of the hotel. Although he said that he and the husband were required to consult with his father in relation to important management decisions, the profitability of the hotel and the distribution of profits, the husband could not remember any such conversation with him. He said it was possible he had discussed profit distribution with his father.
The husband’s mother said that she left all business dealings to her husband. She had never discussed the wife’s salary with anyone.
Therefore the only people who could have made the decision to terminate the wife’s employment would be the husband’s father and the husband.
The husband’s evidence was that it was his father who made the decision to withdraw the wife’s salary and that he did not argue with him. Given Mr CC’s evidence, this is unlikely.
Thus the above statement of the husband is misleading in two ways. The wife had not worked for the company for many years so to suggest that her salary was terminated because she was not working there is misleading. The suggestion that the decision was made by the other directors is also misleading. I find that the decision was made by the husband.
Interestingly, Mr CC and his wife Ms CC have separated. She does not work in the hotel but is still being paid a salary of $45 000 per annum.
It is difficult, therefore, to see any valid commercial reason for the wife’s salary being terminated.
The business and assets of the hotel were valued by Mr GG, an expert in hotel valuation. In March 2009 he had valued the hotel as a going concern, for mortgage purposes, at $9.5 million.
His opinion was that at, 25 July 2014, the value of the hotel as a going concern was $6,400,000. In each valuation Mr GG used two methods – the direct comparison method and the capitalisation of net operating profit method.

In response to written questions provided to him by the wife concerning the reduction in the amount of the valuation Mr GG said:
1(d)Briefly, the rationalisation of the difference in the difference in the valuation conclusions reached in March 2009 to July 2014 using the income and market approaches relied upon in both reports are as follows:
i.3 PME [poker machine entitlements] have been removed from the premises
ii.The net operating profit deduced at the 2009 valuation was $1,021,235 per annum as opposed to $716,453 per annum
iii.Average weekly maintainable earnings have declined from $72,633/week to $63,394/week, a difference of $9,239/week.
iv.The capitalisation rate increased reflecting the risk for further decline in trade due to the gentrification in the area and intensified competition between the two valuation dates from other licenced premises on the peninsula.
v.Decline in overall net operating profit from 27% to 22% between the two valuation dates.
(Exhibit J, affidavit of Ms Delacroix sworn 20 November 2014)
This apparent reduction in earnings has been reflected in the dividends received by the partners. Since separation the wife has received the following partnership dividends (Affidavit of Ms Delacroix sworn 20 November 2014 at [28]):
April 2013 $14 474.05
July 2013$15 820.72
October 2013           $15 882.72
January 2014           $12 002.64
April 2014 $8 489.85
July 2014 $871.45
October 2014           $756.00
It is clear from correspondence between the husband and the company’s accountant that the accountant and the husband set the rent payable by the company to the partnership each quarter so as to ensure that the hotel just breaks even. Thus, the husband says, as the hotel’s profitability has fallen, the rent has been adjusted downwards thus leading to smaller distributions to the partners.
Mr GG’s view was that there had been a change in the market in Suburb D by more families with children moving to the area.
In his 2014 valuation Mr GG used a capitalisation rate of 11.25 per cent which gave a value of $6,368,470 and of 11 per cent which gave a value of $6,513,207. He adopted, as a mid-range, the figure of $6,400,000. When it was suggested that the capitalisation rate of 10.75 per cent used in the 2009 valuation would have been more appropriate, he said that it may not have been wrong to use that but he would have been harder on the earnings in that case.
Ultimately, there was no significant challenge to Mr GG’s opinion and no contrary evidence was adduced. I will adopt the value given by him for the hotel and the premises.
The wife asserts that:
The husband had available to him during the marriage cash monies which she [the wife] understood (on the basis of conversations with him; see Exhibit 10) were monies obtained from the [I Hotel].
(Written submissions on behalf of the wife filed 19 December 2014 at [48])
The wife contended that during the relationship such monies had gone to fund the parties’ expenses in circumstances where the sole income available to the husband and the wife was a salary of $45 000 each and whatever rent they received, less monies necessary to pay the interest on the Commonwealth Bank bill. She contended that it was illogical for the court to find that these were the only monies available to the parties in circumstances where lifestyle appeared to exceed their income. The wife says that the husband would regularly attend the hotel on Saturdays and would return cash which was stored in shoes, wardrobe, underneath the mattress protector and in the bed head. The wife estimated that to be from $600 to $1 000 per week. She said the husband told her:
[Mr CC] turns off the cash register at the far end of the upstairs bar near the telephone on Friday nights and the cash that comes through that till we split.
(Transcript of proceedings, 2 December 2014, page 75 lines 15-21)
The effect of the evidence of an employee of Sanyo Office Machines Limited, an employee of the hotel and Mr CC Delacroix is that it is unlikely that the till described by the wife was turned off in the manner described by her. The computerised till system is designed to prevent a till being left open and not record takings. The till is also used as the ordering system for food and stock management. Difficulties with both would arise if a till was simply left open as neither food orders or stock usage would be processed. Whilst it is true that the computer printouts from the till in question indicate that it is possible that the till could have been left open after the first cash sale and then the single cash sale avoided, the till records do not indicate that this occurred regularly or frequently.
It is to be recalled that the husband’s parents were at this stage providing the family with $1 000 cash per week (the source of which was never explored). This occurred until the transfer of the Suburb N property to the parties and is a ready explanation for the abundance of cash in the household.
The wife has made other allegations of cash dealings by the husband which were not correct.
On 25 September 2013 the wife applied to the Child Support Registrar to change the child support assessment. The reasons the wife provided for the assessment were:
My ex-husband and I own 40% shares of our family business. We both shared an income of $180 000. As of 22 July my payments from the company was reduced by $45,000 (now earning $30,000 pa). My ex-husband now earns that extra money and has not declared it to the Child Support Agency. The business is a cash business and we have always used the cash to provide us with our lifestyle. Since the marriage breakdown I no longer receive any of the cash.
January 2013 my ex-husband purchased himself a [motor vehicle 1] paying $200,000 cash. Mid January 2013 we took our 3 children to [Country R] costing us $40,000 staying in 5 star accommodation. Two out of our 3 children are enrolled in private schools with a total of $50,000 pa. Not to mention his 7 day holiday 3 weeks ago to Bali with his girlfriend. [Mr Delacroix] has stopped paying school fees and the children are not welcome back next term if the fees are not paid. So far in terms of child support from [Mr Delacroix] since applying 29 July 2013 I receive $1,200 for our 3 children.
I can assure you that [Mr Delacroix] earns a lot more money than he is claiming. I would appreciate it if you would investigate.
(Exhibit 8, part 2, page 236)
When it was suggested to the wife that the funds for the purchase of the motor vehicle 1 came from a trade in of the existing car and the proceeds of the sale of the Suburb N property, she agreed. She said she did not think of it when she wrote it and that she did not know where he got the money from. When pressed, the wife said that she did not remember whether she knew these things when she wrote to the Child Support Agency.
It emerged that the trip to Country R and the children’s school fees were paid from the company’s bank accounts.
At the time, the wife had these records in her possession. Even if not made deliberately maliciously, the allegations to the Child Support Agency were certainly made recklessly. This is so, notwithstanding the seriousness of the allegations.
It is also to be pointed out that the wife was a director of the company operating the hotel and a member of the partnership that let the premises of it. If she was aware of cash being improperly moved from the business, as she asserts she was, then that involved her adopting and approving of seriously wrongful conduct by the husband. Had I been satisfied that that was the position, I would have not finalised the matter until it had been referred to and investigated by the Australian Taxation Office.
Finally, Mr GG thoroughly looked at the accounts of the company. His report does not suggest that he noted any discrepancies or irregularities in the accounts such as might arise from the regular removal of substantial amounts of cash.
In all of the above circumstances I am not satisfied that substantial sums of cash have been improperly removed from the hotel and this lowered the recorded turnover thus leading to a lower valuation.
There is some concern about the turnover, however. Mr GG said, without expanding further:
Historically, net operating profit, after add backs, has a range from a high of 19% of turnover in 2012 to a low of 9% in 2014. This is abnormally low and a significant range.
(Affidavit of Mr GG sworn 25 August 2014, annexure ‘A’, page 40)
It is possible that this could be explained by the refurbishment of the hotel and the revamping of its kitchen in 2014. The refurbishment cost some $200 000 but $100 000 of that was provided by way of an interest free loan from a liquor supplier.
The “abnormally low” net operating profit was otherwise left unexplained. It is therefore difficult to attribute that low figure to actions of the husband such as, for example, not recording takings but removing them as cash.

Loans from the Wife’s Father

The parties have borrowed money from the wife’s father, Mr E, on four occasions.
In 1998 the parties borrowed $180 000. In his primary trial affidavit the husband asserted that the reason for that borrowing was to replace the misappropriated funds from the business. By the trial the husband had now realised that the reason for that borrowing was to repay his parents’ money they had lent the husband to enable him to repay the Suburb Y property. The advance was the subject of a written agreement signed at least by the husband and the wife as follows:
THIS AGREEMENT DATED 20/6/98 BETWEEN [MR E] (THE LENDER) AND [MR DELACROIX] AND [MS DELACROIX] (THE BORROWER) CONFIRMS THAT AS OF 20/6/98 THE LENDER HAS LENT TO THE BORROWER $180,000 AT ZERO INTEREST FOR AN UNSPECIFIED PERIOD OF TIME.
IT IS AGREED THAT IF THE LENDER REQUIRES THAT PART, OR ALL OF THE LOAN BE RE-PAID, THE LENDER SHALL GIVE THE BORROWER NOTICE IN WRITING AT LEAST 3 MONTHS PRIOR TO THE REPAYMENT DATE OF THE AMOUNT REQUIRED TO BE RE-PAID.
(Affidavit of Mr E affirmed 27 November 2014, Annexure ‘B’)
It was Mr E’s evidence that the loan was never repaid and no interest payments were made. He says the loan was never called upon and eventually forgotten. The husband’s evidence that the loan was repaid, possibly from his inheritance of $115 038.
A further loan, as I have said, was made in mid 2000 for approximately $290 000 which was repaid on 7 November 2000.
The wife asserts that two loans remain outstanding.
The first was one made in 1997. The loan agreement is in writing and is as follows:
This agreement dated 1.12.97 between [Mr E] (the lender) and [Mr Delacroix] and [Ms Delacroix] (the borrower) confirms that as of 1^st December 1997 the lender has lent the borrower $200,000 at zero interest for an unspecified period of time.
It is agreed that if the lender requires that part, or all of the loan be repaid, the lender shall give the borrower notice in writing at least 3 months prior to the repayment date of the amount required to be repaid.
In the event of the lender’s death, the lender does not require any of the outstanding loan to be repaid by the borrower to his estate or to any beneficiary. Under this circumstance it is agreed that the loan has been paid back in full.
(Affidavit of Mr E affirmed 27 November 2014, Annexure ‘A’)
Mr E asserts that, at the time the agreement was signed, the husband said “we will pay you interest”. An interest rate was then set at 4 per cent. He then asserts that thereafter interest payments of $666.67 were paid into his account each month being 4 per cent of $200 000. He says that no principal has been repaid. In this, Mr E was supported by the wife’s evidence.
It is to be recorded however that Mr E did not pretend to be a good historian. His recollection in cross-examination was not extensive. He could not remember parts of his affidavit, saying that his daughter helped him remember, and that, apart from the things of which she reminded him, he had no clear recollection.
The husband said:
[Ms Delacroix’s] Father directed how the payments would be made. Often they were paid to his Westpac credit card account number [XXXX]. Payments were also made to his Bendigo Bank Account number [XXXX]. Payments were also made directly to his Wife’s pharmacy account, his accommodation costs at the Swagman Inn in the Philippines and various household expenses. The last payment made by me was on the 2^nd May 2013 in the amount of $666.65 to his Bendigo Bank account.
(Affidavit of Mr Delacroix sworn 13 November 2014 at [10])
In a later affidavit the husband said the following conversation occurred between him and Mr E:
[Mr E]: “I’m happy to lend you the money and I don’t want any interest. With the interest you save you can pay me back over a period of time”
[Mr Delacroix]: “Thank you. That sounds like a great idea. We would be paying the bank around 4 per cent interest. We will pay you $8,000 a year by monthly payments.”
[Mr E]: “That sounds good I will tell you how I want it paid”
Thereafter Ms’s father gave directions from time to time to pay money to various accounts and expenses as referred to in my affidavit. I kept a record of the amounts paid. Payments were in varying amounts, sometimes a matter of $666.66 or later $1,333.33 but always a total of $8000 per annum year to year some slight variations may have occurred where the repayments were made at [Mr E’s] request for specific expenses to be paid.
(Affidavit of Mr Delacroix affirmed 3 December 2014 at [2])
There is no dispute as to the regular payments in those amounts but there is a dispute as to whether the payments were payments of interest or principal.
The position is that the written agreement provides for no interest to be paid. The husband asserts that there was an oral agreement for the payment of interest.
In Hoyts Pty Limited v Spencer [1919] HCA 64; (1919) 27 CLR 133 Knox CJ said:
From the authorities referred to during the argument, the following propositions may be deduced, viz: -
(a) When parties negotiate an agreement by parol and subsequently reduce it to writing, the writing constitutes the contract, or at any rate is conclusive evidence of its terms, subject, of course, to the right of either party to proceed for its rectification or recission on sufficient grounds.
(b) A distinct collateral agreement, whether oral or in writing, and whether prior to or contemporaneous with the main agreement, is valid and enforceable, even though the main agreement be in writing, provided the two may consistently stand together so that the provisions of the main agreement remain in full force and effect, notwithstanding the collateral agreement.
(Citations omitted)
In Equuscorp Pty Ltd v Glengallan Investments Pty Ltd [2004] HCA 55; 218 CLR 471 Gleeson CJ, McHugh, Kirby, Hayne & Callinan JJ said at [33] & [35]:
The respondents each having executed a loan agreement, each is bound by it. Having executed the document, and not having been induced to do so by fraud, mistake, or misrepresentation, the respondents cannot now be heard to say that they are not bound by the agreement recorded in it. The parol evidence rule, the limited operation of the defence of non est factum and the development of the equitable remedy of rectification, all proceed from the premise that a party executing a written agreement is bound by it.
…
Secondly, in the nature of things, oral agreements will sometimes be disputable. Resolving such disputation is commonly difficult, time-consuming, expensive and problematic. Where parties enter into a written agreement, the Court will generally hold them to the obligations which they have assumed by that agreement. At least, it will do so unless relief is afforded by the operation of statute or some other legal or equitable principle applicable to the case. … The obligations of written agreements cannot simply be ignored or brushed aside.
One of the possibilities that the court considers is the possibility that a contract may be partly oral and partly in writing. As was pointed out in Hoyts Pty Limited v Spencer (supra) that can only occur where the oral part of the agreement is consistent with the written part.
Here the written term says there is to be no interest payable and the alleged oral term is that there is to be interest at 4 per cent. They cannot consistently stand together.
The contracts cannot be said to be collateral contracts because:
(a) of the inconsistency; and
(b) there is no separate consideration for the alleged collateral agreement.
It follows therefore that there is no binding agreement for the payment of interest. The payments equivalent to 4 per cent per annum of the original sum are therefore to be treated as payments of principal.
In addition, the husband says that from time to time he made larger additional payments.
The documents that could establish the payments are not all available. The husband says this was because they were stored in the attic of the house and that the wife, who has had control of the house since separation, has not made them available to him. The wife asserts that, admittedly after some period of obfuscation by her, she made the records in the attic available to the husband. He says not all were made available. That impasse cannot be resolved on the state of the evidence.
Given the state of the evidence, I am not prepared to accept the husband’s uncorroborated evidence that he made additional payments. He relies upon hand written notes kept by him referring to various payments but it is not apparent to me from those entries that the payments were for the benefit of and at the direction of Mr E. For example, relying on the note, the husband asserts that payments recorded as being for ‘G’s teeth’, are payments to Mr E. That seems most unlikely.
A cheque butt tendered by the husband establishes that on 14 May 2000

Mr E was paid $17 500.
Thus, taking all these things into account, the appropriate step is to take the $200 000 as being owed and deduct from it payments of $8 000 per year from the commencement of 1998 up until separation in March 2013 – approximately 16 years or $128 000. When the amount paid to Mr E in May 2000 is added to the sum, repayments have been made in the sum of $145 500 leaving $54 500 owing.
In early 2005 Mr E lent the parties $200 000 to assist with the purchase of DD Street, Suburb B. Again, the agreement was in writing and provided as follows:
This agreement dated 15^th January 2005 between [Mr E] (the lender) and [Mr and Ms Delacroix] (the borrower) confirms that as of the 20^th January 2005 the lender has lent the borrower $200,000 at zero interest for an unspecified period of time.
It is agreed that if the lender requires that part, or all of the loan be repaid, the Lender should give the Borrower notice in writing at least 3 months prior to the re-payment of the amount required to be repaid.
(Affidavit of Mr E affirmed 27 November 2014, Annexure ‘D’)
The husband asserts that this loan was repaid in the same way as the 1997 loan. The husband annexed bank statements that he, without contradiction, asserted showed payments from the parties’ National Bank account of $19 960 from March 2007 to March 2008. I will take those to be repayments of the loan.
Mr E and the wife assert that, as with the 1997 loan, there was an agreement for interest payable at 4 per cent. They accept that payments of interest of $666.67 were made every month. For the reasons given above, the claim that there was an oral term of the agreement for the payment of interest that over rode the written term that would be no interest payable cannot be accepted.
The wife tendered a text message from the husband sent to her on 19 September 2013. It said (Exhibit 19):
[Ms Delacroix], could you ask your father to provide me with receipts for all of the interest payments we have made to him that relate to our current $400,000 loan and also receipts for interest that relate to the paid out loan we had with him prior to that.
I note that on both loans, he specifically requested that our agreement stated that no interest was to be paid, however has charged us 4% interest on the loans from drawdown.

This confirms regular payments of what was said to be interest, but it is not an acceptance that there was any oral agreement to pay it.
There is, however, an acceptance by the wife of payments to Mr E of $8 000 per year since early 2005. Thus there were eight years of payments prior to separation that equates to $64 000. Accepting that to be the position, the amount owing is $136 000.
Again, the husband asserted that he had made further repayments and pointed to his bank statements generally. He did not identify specific entries which he said were repayments other than to mark particular entries. It is not the court’s function to trawl through some 20 pages of the husband’s bank statements to see which of the identified payments could properly be regarded as what the wife and Mr E consider to be interest payments or what the husband refers to as being payments over and above the regular payments. I will proceed on the basis that the sum of $136 000 is outstanding on the second loan.
On 26 February 2014 Mr E had his lawyers send a letter of demand to the husband demanding payment of $380 000. This was said to be pursuant to loan agreements dated 26 June 1998 and 1 December 1997. At the hearing he relied upon the agreements of 1 December 1997 and 5 January 2005. Given the difficulties with Mr E’s memory of events, no weight should be attributed to the letter of demand – it merely highlights the problem.

FF Street, Suburb N property

I have already set out the basic facts in relation to this issue in paragraphs [128] – [130] above.
On 28 March 2014 the husband’s parents commenced proceedings in the Supreme Court of New South Wales against the husband and his brother Mr CC. Against each of the defendants the parents sought repayment of $1 332 500 together with interest of $240 388.44. The Statement of Claim noted that there had been repayments of $52 500 by the husband and Mr CC on 18 and 19 December 2012 respectively. The loan agreement was said to be partly oral and partly written. The writing was said to consist of a letter dated

7 July 2011.
That note is in the handwriting of their father, addressed to Mr Delacroix and Mr CC and is as follows:
As we have discussed previously and in view of our previous assistance to both of you, we are prepare to go ahead with the sale to both of you of the property we own at [FF Street, Suburb N].
As discussed, although you realise that the property has appreciated in value we would sell to you the property at the price we purchased it for.
We believe that the revenue coming from the property will bring further assistance to both families.
As agreed the provision is that should we request repayment in full you would do so within three to six month time of our request. We believe that you should have no problems obtaining a loan on the property.
As we have discussed you told us that you are keen to go ahead.
Please confirm your intentions. Then I will inform our solicitor and seek some assistance from our accountant if needed.
From both of us, Dad and Mum
(Exhibit 8, part 2, page 236)
The husband’s father died on 22 October 2014. The husband’s mother said that, although she left their finances to her husband, she had a clear understanding that the Suburb N property was given to the children on the basis that they would repay it on demand. It was at this time, she said, that the monthly allowance to the parties ceased.
The wife said of this:
[Mr Delacroix’s] mother came to the home most Saturday mornings. On one of these Saturdays in 2011 [Mr Delacroix’s] mother [Ms HH Delacroix] said to [Mr Delacroix] in my presence words to the effect of “I’ve been speaking to [Mr II Delacroix] and we’ve decided to give the [business] to both families to help out with the children but don’t tell [Ms JJ], because we don’t want [Mr KK] getting his hands on any of this money”. I said: “Thank you that is very generous of you. I’ll ring [Mr II Delacroix] and thank him” [Ms HH Delacroix ]a said: “Yes make sure you do.”
Later that day I called [Mr II Delacroix] and said: “Thank you very much for the kind and generous gift. It will help us with the school fees.” He said: “That’s alright.” The transfer of 25% of the [business] to me and 25% to [Mr Delacroix] was a gift. It was never a loan.
I declared the income received from the sale of the [business] in my 2013 income tax return as a result I have a capital gains tax debt to pay. I have entered into an instalment arrangement with the ATO, with the total amount due to be payable in January 2015.
After [Mr Delacroix] was discharged from [C Clinic] he said to me referring to the [Suburb N] sale proceeds “That money is coming from my inheritance. You are not entitled to my inheritance and I will do whatever I have to, to stop you from touching it. I will get my father to draw up a loan agreement so we have to pay all the money back.”
(Affidavit of Ms Delacroix sworn 20 November 2014 at [98] – [101])
The wife’s solicitor was sent a copy of the Statement of Claim on 4 April 2014. Notwithstanding this view, the wife took no steps in relation to the Supreme Court proceedings. She did not seek to intervene in the proceedings. She did not seek to have them dismissed or stayed as an abuse of process. She did not seek to restrain those proceedings from continuing until after the determination of the Family Court proceedings between the parties. She did not seek to have the proceedings heard with the property case in the Family Court. She has not sought to have that judgment set aside.
The husband, and his brother, each filed submitting appearances and judgment was entered against them. It seems that no steps have been taken by their mother or their father’s estate to enforce the judgment. Mr CC has retained his profit from the sale of the Suburb N property in a bank account. He has not paid the judgment to which he consented. No steps have been taken to garnishee that account or to issue a bankruptcy notice.
For reasons given elsewhere, I am not prepared to accept the wife’s uncorroborated evidence as to the conversations she alleges that she had with the husband’s parents.
On the other hand, there are some unusual aspects to the transactions. The husband’s parents had solicitors act for them on the sale of the property. It was an agreed position at trial that in their files there was no mention of these monies being advanced by way of a loan. No loan document was prepared either by solicitors or anyone else.
There is no evidence that establishes that either the 7 July 2011 letter or the allegations contained in it were aired in any way prior to separation.
The husband’s evidence refers to the advice of an accountant being obtained but no advice was in evidence.
The wife relied upon the wills made by the husband’s parents made on 6 March 2012. There are specific bequests in those wills of LL Street, Suburb N, MM Street, Suburb NN and shares in F Pty Ltd. There is no reference to a Suburb N property loan. There was also no specific reference to the interest in the land at Suburb D. There was, however, a division of the remainder amongst the three children. These two matters combine to prevent any inference being drawn from the failure specifically to mention any loan arising from the Suburb N property transaction. It could well be included in the residue along with the interests in the Suburb D property.
On 11 May 2013 the husband’s father sent the following email to the husband and to Mr CC (Exhibit 20):
I am preparing for eventual litigation re the sale.
I have 7years of statements regarding monthly gift. I could not find the larger gifts, do you have any records?
I want to be able to show our generosity over the years.
Furthermore if it goes to a court, a judge will see the profit you all made after a very short time when selling the property, these facts will weight heavily.
(As per original)
The first and last sentences obviously relate to the Suburb N property referring to the recent sale and the very large profit that was made. The second sentence is a reference to the regular and other payments made by the parents to the parties over the years.
There is no suggestion in that email that the Suburb N property transaction was a loan. There is no demand for repayment. In fact, the email is consistent with the transaction being a gift.
On 10 May 2013 the husband’s father wrote to the husband and Mr CC saying (Exhibit 25):
In future you must find a way to invest or save funds in a way that may be safe against predators.
You cannot afford to have your assets depleted, you cannot afford to have your business and revenues crippled. If those women had any affection, problems you have encountered would not have gone that far.
These women are only on the lookout for a good catch!
This email strongly suggests that steps needed to be taken at least in the future to protect the sons’ property from the predications of their wives.
These matters cast great doubt over the assertion that the Suburb N property transaction was a loan as opposed to a gift. This is so even though payments of $52 000 were made in December 2012.
However, a judgment, albeit one by consent, remains.
In Walton v Gardiner [1993] HCA 77; (1993) 177 CLR 378, Mason CJ, Deane and Dawson JJ said at [23]:
…
Yet again, proceedings before a court should be stayed as an abuse of process if, notwithstanding that the circumstances do not give rise to an estoppel, their continuance would be unjustifiably vexatious and oppressive for the reason that it is sought to litigate anew a case which has already been disposed of by earlier proceedings. (See, e.g., Reichel v Magrath (1889) 14 App Cas 665, at p 668; Connelly v DPP [1964]
AC 1254, at pp 1361-1362). The jurisdiction of a superior court in such a case was correctly described by Lord Diplock in Hunter v Chief Constable of the West Midlands Police ([1981] UK HL 13; (1982) AC 529, at p 536) as "the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right thinking people".
As the wife seeks a finding that there was, in fact, no loan but rather a gift, she seeks a judgment that would be in direct conflict with the findings of the Supreme Court. If her case is accepted, there would be a judgment of the Supreme Court of New South Wales finding that there was loan agreement (because it issued a judgment enforcing it) and a judgment of this court finding that there was no loan but a gift. They are necessarily inconsistent. The approach taken by the wife in these proceedings is an impermissible collateral attack on the Supreme Court judgment and cannot be maintained.
Finally, the issue is whether it is likely that the judgment will be enforced.
According to the husband, on 11 May 2013 his father sent the following letter of demand to the husband and to Mr CC:
Re your purchase of our property and taking into account our agreement see letter of the 7^thof July 2011we are now asking both of you to make good the agreement that is that you repay us the full amount you have purchased the property for.
You would appreciate the profit you realised when you sold the property! We intend to upgrade our present situation, we would like to move from our present apartment to a more appropriate environment therefore would you please make the repayment within the next 3 months.
(Exhibit 8, part 2, page 229)
Neither brother took any steps at all in response to this letter. Mr CC did not make the requested payment notwithstanding he held sufficient cash to do so.
The Statement of Claim makes a claim for interest of $240 388.44 despite there being no reference in the 7 July 2011 letter to interest being payable. Whilst interest from the time of a demand for payment up to judgment could be claimed under s 100 of the Civil Procedure Act 2005 (NSW) neither brother raised any objection to that claim.
No evidence was given as to why the estate and the husband’s mother have taken no steps to enforce the judgment. The executors are the husband, his brother and his sister. Taking this lack of explanation into account together with the fact that no proceedings have been undertaken to recover the funds against Mr CC, who undoubtedly has them, or against the husband, for some time after judgment it is more likely than not that the debt will not be called upon. It will not be included in the parties’ list of assets and liabilities.
At the conclusion of the hearing the parties agreed on a number of interim orders. Each was to receive, as a partial property settlement, $100 000 from their Viridian Line of Credit. From that account $15 000 was to be paid to L School for G’s school fees and $16 100 to M School for H’s school fees.
The parties agreed that the matrimonial home should be sold and that the giving of this judgment be delayed until the sale proceeds were known. On 9 April 2015 the parties notified the court that the property sold for $3 600 000 with settlement due on 11 May 2015. From that sale the parties agreed that the following payments were to be made:
Viridian Line of Credit                   $384 518.09
Arrears of council rates   $2 823.64
Arrears of water rates   $1 533.90
Agreed expenses of sale                  $65 000.00
$453 875.63
Thus, the net proceeds of sale are $3 146 124.40.
Since separation the wife has borrowed $69 000 from her father to enable her to pay school fees, dentist bills and general living expenses.
Accordingly the assets and liabilities of the parties at the time of hearing are:
Assets

Joint

Proceeds of sale of B Street, Suburb B

$3 146 124

Joint

Interest in I Hotel (interest in the land and shares in I Hotel Pty Ltd)

$2 507 316

Husband

Motor vehicle 4

$35 000

Wife

Motor vehicle 3

$17 000

Joint

House contents

$10 000

Wife

Jewellery

$3 000

Total:

$5 718 440

Add Backs

Wife

Paid legal fees

$60 000

Husband

Paid legal fees

$25 000

Total:

$85 000

Liabilities

Joint

CBA Facility (I Hotel)

$1 000 000

Husband

Outstanding Tax

$46 455

Joint

Debt to wife’s father

$190 500

Wife

Outstanding tax

$45 885

Wife

Debt to wife’s father

$69 000

Wife

Credit card

$10 000

Total:

$1 361 840

Superannuation

Husband

Host Plus

$154 393

Wife

Host Plus

$85 206

Total:

$239 599

Total Assets, Add backs and Superannuation

$6 043 039

Less liabilities

$1 361 840

Net assets:

$4 681 199

Subsection 79(2) of the Act

I must first determine whether it is just and equitable that there be an alteration of the property rights of the parties. This must be done by consideration of the relationship, its breakdown, the property held by the parties and the basis on which it was held and used by them. The determination is not to be conflated with the consideration of matters arising under s 79(4).
In the present case I am satisfied that it is just and equitable to make orders altering the interests of the parties to the marriage to the property held by them. They are no longer living in a marital relationship. As the parties are no longer living together in a married relationship the basis on which their property was owned and used has ended. It is appropriate, therefore, that their property interests are altered so as to meet their new needs and circumstances.

Subsection 79(4) of the Act- Contributions

The husband has made a greater financial contribution to the property of the parties’ than the wife has. He made a greater initial contribution having his interest in his home at Suburb Y, the boat and car which were significantly greater than the wife’s interest in her property and her car.
The parties’ first residential property was acquired using the parties’ interest in the properties they held before they met and a loan from the wife’s father.
The husband also had his interest in the real estate agency which was sold in 2001 for $936 001. This was some years after the relationship commenced and thus cannot be regarded as a contribution solely by the husband. There was, however, no suggestion that the wife had worked in that business but she had supported the husband by giving a guarantee. The parties borrowed money from the wife’s father, interest free, to assist the business when it was defrauded by an employee. These proceeds were used to acquire the parties’ interest in the I Hotel and land.
The husband received an inheritance of $115 202 from his parents. The parties received approximately $1 000 per month from the husband’s parents until the transfer of the Suburb N property. That transfer, on the findings made in this matter, provided the parties with $1 748 902 in late 2012. In addition there was the gift of $50 000 at the time of the boat purchase and payments of $30 000 on the birth of each of the children. The wife accepts that such a payment was made in respect of G but denied that similar gifts were made in relation to H and J. Given that the husband’s parents obviously had the ability to do so, it is more likely than not that they followed the same course with each child.
The husband also received damages for his personal injury settlement of $920 000. It is important, however, to recognise that part of those damages, although payable to the husband, were calculated by reference to the domestic care and services provided to the husband by the wife.
The husband was the primary income earner throughout the marriage.
The wife introduced $60 000 from the sale of her property and a car. The wife, however, made significant contributions via the four interest free loans from her father.
The wife submitted that she made a contribution of 25 per cent of the Suburb N property because it was given to her. It was a transfer from the husband’s parents and it is most unlikely that it was anything other than a transfer of 50 per cent to them because of their relationship. No significant weight should be ascribed to this as a contribution of the wife.
The wife worked as a homemaker and parent to a much greater degree than the husband. She has continued to do so post-separation with little or no assistance from the husband. Since then his parenting has been cursory and detached despite the obvious difficulties facing G and H in particular. She cared for the husband for some time after his injury when he required extensive assistance.
Taking all these matters into account I am satisfied that the parties’ financial and non-financial contributions to their property and to the welfare of their family is 60 per cent to the husband and 40 per cent to the wife.

Subsection 75(2) of the Act

I do not see that any proposed order will have any affect upon the earning capacity of either party to the marriage.
The wife is generally in good health.
The husband still suffers the after effects of the motor vehicle accident. He has restricted movement in his right ankle which limits his ability to squat and to walk up and down stairs, slopes and uneven ground. This is exacerbated by weakness and pain in his left knee and residual and functional restrictions of both hands and wrists. The expert occupational therapist opined that:
Those residual impairments are also likely to continue to impact on his ability to work around the hotel and bottle shop in the future; as well as his ability to perform domestic tasks if he again moves to live in a larger home with a garden in the future.
(Affidavit of Ms OO sworn 25 November 2014, Annexure ‘A’)
The husband’s work, however, is predominantly of an administrative and management nature and these matters will not impact upon him as much they might if he were to carry out some other form of employment. His limitation of his domestic activities need to be taken into account.

The wife has not been in paid employment outside the family business since early in the relationship. She wishes to refresh her skills in her previous occupation. The cost of a TAFE course in business is approximately $2 640 for tuition and $92 for administration. She intends to do a one year course which will cost $8 750. It will be difficult for her to obtain significant employment until those courses are completed. She has medical bills including a fortnightly psychologist of $160 per session.
The husband on the other hand as a result of these orders will retain his interest in the hotel and the source of income that it will provide. In the last six months the hotel spent approximately $200 000 on painting, lighting and general refurbishment. It was partly funded by an interest free loan of $110 000 but it is likely this will be a one off expense. The hotel continues to pay a wage to a non-employee in the sum of $45 000.
It is worth interpolating here that, for the purposes of valuing a business

Mr GG said he would not necessarily adjust payments made to

non-employees if they could be considered a part of, for example, a director’s remuneration. If the total seemed appropriate he would not make any adjustment. It is implicit in that statement that he regarded a payment of $90 000 to each of the husband and Mr CC as an appropriate director’s fee. It is more likely than not that, in due course, the husband will receive such a payment as that continues to be the combined income of his brother and his wife.
The valuer noted that one of the weaknesses of the hotel business was its income from food sales and that it was the husband’s evidence that he proposed a new arrangement which hopefully will lead to increased income. In any event, the husband has the possibility for the business and income from it to improve. Indeed, the valuer says that he was unable to rule out the separation of the parties as a cause of the down turn in the company’s income.
Overall the husband will have the benefit of an asset capable of creating significant regular income.
Pursuant to these orders the wife will have the primary care of the children of the marriage and but substantially shared care in relation to J.
A significant issue arises in relation to school fees. It is the husband’s view that the parties can no longer afford private school fees and that apart from this year in respect of which the school fees have been paid, H and J should attend their local school. It is the wife’s strong desire that H should continue at M School and that J should commence at L School next year. As I understood the husband’s evidence, he would prefer the children to continue at private school but was of the view that the parties could not afford to do so. As the fees for the remainder of G’s high school education have been paid the issue only arises in the relation to the other two children. The wife will be able to make that decision in relation to H and will have capital available to pay for that if she chooses to do so. The decision in relation to J, to be made jointly, will be more difficult, but again the capital is available if the parties decide to use it for that purpose.
It is not an obligation that should therefore be given any weight.
Each of the parties has an obligation to pay a considerable amount of money to their parents, although I have found that the obligation of the husband is unlikely to be enforced.
In relation to the post separation loans, Mr E said although they were payable he would not press for payment if the wife could not afford it. There are funds available to pay it and calculation of the parties’ interests has taken that liability into account.
I consider that the length and duration of the marriage and the decision of the parties for the wife to be the primary homemaker and parent has adversely affected her earning capacity.
In May 2013 the wife commenced a relationship with Mr W. They have been spending significant time together in the wife’s home since July 2013. The evidence is that this is up to five nights per week. The evidence of the wife is that it is likely that they will permanently live together in the future. He has provided some financial support to the wife.
Taking all these things into account there ought to be a 10 per cent adjustment in favour of the wife so that each would receive 50 per cent of their net assets. This adjustment is largely based on the disparity between earning capacities and the much greater continuing care of the children. It is a substantial amount ($468 120) but it is well justified by those considerations.
Taking all of the above matters into account, I am satisfied that the orders I propose to make are appropriate, that is to say, just and equitable taking into account all of the matters I have discussed under the heading s 79(4) as set out above. The orders meet, as best they can in the circumstances, the obligation under s 81 of the Act to finally determine the financial relationship between the parties and avoid further proceedings between them to the extent possible.

Form of orders

The total net assets of the parties are $4 681 199. One half of this is $2 340 600. The wife will retain the following assets:

Motor vehicle 3

$17 000

House contents

$10 000

Jewellery

$3 000

Paid legal fees

$60 000

Superannuation

$85 206

Total:

$175 206

The husband proposed an equal division of the house contents. As best as can be seen from the evidence the items that he particularly wished to retain have been sold. In that case the appropriate order is for the wife to retain the household contents.
The wife will be responsible for the following liabilities:

Joint debt to father

$190 500

Outstanding tax

$45 885

Debt to father

$69 000

Credit card

$10 000

Total:

$315 385

The difference is a negative figure of $140 179. For her to receive 50 per cent of the net assets this must be added to $2 340 600 so that she will receive a cash payment of $2 480 779.
The husband will retain the following assets:

Interest in the I Hotel

$2 507 316

Motor vehicle 4

$35 000

Legal fees

$25 000

Superannuation

$154 393

Total:

$2 721 709

The husband will be liable for the following:

CBA Facility

$1 000 000

Outstanding tax

$46 455

Total liabilities:

$1 046 455

Net assets retained:

$1 675 254

Thus to obtain 50 per cent of the total net assets, the husband needs a payment of $665 345.
Thus the funds representing the proceeds of sale of the Suburb B property of $3 146 124 are to be distributed by paying $2 480 779 to the wife and $665 345 to the husband. There will be orders for the parties to take all necessary steps to ensure that they become solely liable for the debts as taken into account as above, for indemnity and the transfer of any interests in property.

Spousal maintenance

The wife seeks spouse maintenance limited in nature. She seeks $800 per week until she receives her entitlements under the final orders. Given that the Suburb B property has now been sold there can be an immediate final settlement and thus the need for spousal maintenance does not arise.

Child support departure order

The wife seeks an order by way of departure from the administrative assessment of child support that the husband pay private school fees for G, J and H together with associated expenses.
I have already discussed the school fees. It is not an agreed position that the children should attend private schools. On the evidence before me neither party has the income to justify private school fees but has the capital to do so.
In that circumstance the wife has not established a ground for departure under s 117(2) of the Child Support (Assessment) Act 1989 (Cth).
The husband seeks to have the administrative assessment departed from by reduction of his income from $85 000 per annum to $50 000 per annum. If there has been a reduction of his income, that can be dealt with by way of re-assessment by the Child Support Registrar. Section 117(2) is not satisfied by run of the mill matters that can be dealt with by the Registrar by re-assessment. This claim also fails.

I certify that the preceding two hundred and sixty seven (267) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 14 May 2015.

Associate:

Date: 14 May 2015

[2015] FamCA 349

14 May 2015

Key Legal Topics

Areas of Law

Family Law

Civil Procedure

Legal Concepts

Costs

Remedies

Jurisdiction

Procedural Fairness

Res Judicata

Joint	Proceeds of sale of B Street, Suburb B	$3 146 124
Joint	Interest in I Hotel (interest in the land and shares in I Hotel Pty Ltd)	$2 507 316
Husband	Motor vehicle 4	$35 000
Wife	Motor vehicle 3	$17 000
Joint	House contents	$10 000
Wife	Jewellery	$3 000
Total:	$5 718 440

Wife	Paid legal fees	$60 000
Husband	Paid legal fees	$25 000
Total:	$85 000

Joint	CBA Facility (I Hotel)	$1 000 000
Husband	Outstanding Tax	$46 455
Joint	Debt to wife’s father	$190 500
Wife	Outstanding tax	$45 885
Wife	Debt to wife’s father	$69 000
Wife	Credit card	$10 000
Total:	$1 361 840

Total Assets, Add backs and Superannuation	$6 043 039
Less liabilities	$1 361 840
Net assets:	$4 681 199

Joint debt to father	$190 500
Outstanding tax	$45 885
Debt to father	$69 000
Credit card	$10 000
Total:	$315 385

Interest in the I Hotel	$2 507 316
Motor vehicle 4	$35 000
Legal fees	$25 000
Superannuation	$154 393
Total:	$2 721 709

CBA Facility	$1 000 000
Outstanding tax	$46 455
Total liabilities:	$1 046 455
Net assets retained:	$1 675 254