Dent and Staff & Anor
[2018] FamCA 194
•29 March 2018
FAMILY COURT OF AUSTRALIA
| DENT & STAFF AND ANOR | [2018] FamCA 194 |
| FAMILY LAW – CHILDREN – With whom a child spends time – Where the father moved about 750km away from the mother and children after the parties’ separation – Where the father’s conduct is responsible for the deterioration in the children’s relationships with him – Where past family violence ousted the presumption of equal shared parental responsibility – Where the father lacks insight into the children’s emotional needs – Ordered the mother shall have sole parental responsibility – Ordered the children shall live with the mother and spend time with the father on six occasions each year in the region close to the mother’s home. FAMILY LAW – PROPERTY SETTLEMENT – Where the father was bankrupted in 2016 – Where the mother is the sole proprietor of the former matrimonial home – Concluded the father (and his trustee in bankruptcy) could not establish the existence of an equitable interest in the former matrimonial home pursuant to either a resulting or constructive trust – Concluded it would not be just and equitable to make any property adjustment order. |
| Australian Passports Act 2005 (Cth) s 11 Corporations Act 2001 (Cth) s 601AD Family Law Act 1975 (Cth) ss 4, 60CC, 61DA, 65D, 65Y, 70M, 70N, 72, 79 Family Law Regulations 1984 (Cth) rr 4 and schedule 1A Care of Children Act 2004 (NZ) ss 8, 81, 82, 83, 84, 85, 86 |
| Allen v Snyder (1977) 2 NSWLR 685 Bannister v Bannister (1948) 2 All ER 133 Baumgartner v Baumgartner (1987) 164 CLR 137 Bevan & Bevan (2013) 49 Fam LR 387 Calverly v Green (1984) 155 CLR 242 Martin v Martin (1959) 110 CLR 297 Muschinski v Dodds (1985) 160 CLR 583 Rice v Asplund (1979) FLC 90-725 Stanford v Stanford (2012) 247 CLR 108 |
| APPLICANT: | Mr Dent |
| RESPONDENT: | Ms Staff |
| INTERVENER: | Trustee in Bankruptcy |
| INDEPENDENT CHILDREN’S LAWYER: | Ms Dawson, Legal Aid NSW Gosford |
| FILE NUMBER: | NCC | 3354 | of | 2014 |
| DATE DELIVERED: | 29 March 2018 |
| PLACE DELIVERED: | Newcastle |
| PLACE HEARD: | Newcastle |
| JUDGMENT OF: | Austin J |
| HEARING DATE: | 13, 14, 15 & 16 March 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Fisher |
| SOLICITOR FOR THE APPLICANT: | Not Applicable |
| COUNSEL FOR THE RESPONDENT: | Mr Kelly |
| SOLICITOR FOR THE RESPONDENT: | Derham Houston Lawyers |
| COUNSEL FOR THE INTERVENER: | Mr Davies |
| SOLICITOR FOR THE INTERVENER: | O'Neill Partners Incorporating Sally Nash & Co |
| COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: | Mr Allen |
| SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: | Ms Dawson, Legal Aid NSW Gosford |
Orders
All former orders in respect of the following children are discharged:
(a)B, born … 2006;
(b)C, born … 2007; and
(c)D, born … 2010.
The mother shall have sole parental responsibility for the children.
The children shall live with the mother.
Subject to Order 6, the mother and father shall take all reasonable steps to ensure the children spend time with the father from 9.00 am until 5.00 pm on the first Sunday of April, June, August, October, December, and February each year.
For the purposes of implementing Order 4, the mother and father (or their nominees) shall exchange the children between them at the McDonalds Restaurant at Suburb T, NSW.
If the father fails to allow the children to spend time with him on two consecutive occasions pursuant to Order 4, then Order 4 is suspended and any time spent by the children with the father thereafter shall be at the discretion of the mother.
Pursuant to s 68B of the Family Law Act, the father is restrained from entering upon or approaching within 100 metres of any school attended by the children.
The mother and father shall take all reasonable steps to ensure that the children are able to communicate with the father in the following manner:
(a)By the father being able to send letters, cards, and/or gifts to the children on or about dates proximate to their birthdays, Father’s Day, and Christmas Day, and
(b)By the mother promptly sending to the father any letters, cards, photographs, or other written communication that the children, or any of them, wish to be conveyed to the father.
The father is restrained from electronically recording, either visually or aurally, the mother, her nominee, or the children at or about any exchanges of the children pursuant to Order 5.
The mother and father are restrained from causing or permitting the infliction of corporal punishment upon the children.
The mother and father are restrained from denigrating the other in the presence or hearing of the children and from permitting the children to remain in the presence or hearing of another person denigrating the other.
The mother and father shall notify the other of any medical emergency, illness or injury suffered by the children whilst in their respective care warranting treatment by a third party and shall authorise any treating health professionals to communicate with the other parent about the condition and treatment of the child.
The mother shall authorise and request the principals of any school attended by the children to provide to the father, at his expense, copies of all school reports and school photograph order forms relating to the children.
The mother and father shall forthwith inform the other, and keep the other informed, in writing of their respective current residential address and mobile telephone number.
Pursuant to s 65Y(2)(b) of the Family Law Act, the mother (but not the father) is permitted to take the children outside the Commonwealth of Australia.
Within seven days hereof the mother shall cause the children to be delivered to the Independent Children’s Lawyer to have explained to them the effect of these orders, and if deemed appropriate by the Independent Children’s Lawyer, the reasons for such orders.
Pursuant to s 65DA(2) and s 62B of the Family Law Act, particulars of the obligations that these orders create, particulars of the consequences that may follow contravention of these orders, and details of assistance to comply with these orders are set out in the attached Fact Sheet, which forms part of these orders.
The Independent Children’s Lawyer is discharged upon the expiration of any applicable appeal period.
Costs are reserved for 28 days.
Any and all other outstanding applications are dismissed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Dent & Staff has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT NEWCASTLE |
FILE NUMBER: NCC 3354 of 2014
| Mr Dent |
Applicant
And
| Ms Staff |
Respondent
And
| Trustee in Bankruptcy |
Intervener
And
| Independent Children’s Lawyer |
REASONS FOR JUDGMENT
Introduction
These proceedings concern the resolution of disputes between the applicant father and respondent mother over their three children under Part VII of the Family Law Act 1975 (Cth) (“the Act”) and the division of their property under Part VIII of the Act.
The father was bankrupted on 10 February 2016. His trustee in bankruptcy (“the trustee”) intervened in the proceedings in February 2017 but, apart from filing some affidavits, did not usefully participate. He appeared by counsel at the final trial but requested and was granted leave to depart without further involvement.
The progress of the proceedings to trial was interrupted for several reasons. First, several months were lost while the trustee established the father’s financial affairs. Second, the Family Consultant initially recommended the restoration of the children’s visits with the father be attempted, which entailed an adjournment and the procurement of a second Family Report. Third, the original trial in November 2017 was vacated on the father’s application due to the revocation of his grant of legal aid.
Background
The spouses commenced a de facto relationship in 2000 and were married in 2004. They finally separated in November 2014 and were divorced in May 2016.
The spouses’ three children were born in 2006, 2007, and 2010 and, at the time of trial, were between eleven and seven years of age.
The father has older children from a former relationship but they are not relevant to these proceedings, save in respect of the father’s failure to maintain them. He has never paid child support for those older children and, for a time, did not pay child support for the subject children.
The spouses began their relationship in Sydney, but later moved to the E region of NSW, where they lived at the time of separation. The spouses were then conducting a business through a corporate structure and both worked in that business.
The father vacated the former matrimonial home upon separation in November 2014 and commenced these proceedings only weeks later in December 2014. In February 2015, interim orders were made to both regulate the spouses’ financial affairs (with their consent) and the care arrangements for the children (which orders were contested).
As for their financial affairs, the mother was restrained from selling or further encumbering the family home and ordered to place the father in effective control of their corporate business structure. Despite the father’s denials and prevarication in cross-examination, the mother complied with those orders. Her compliance with both the orders and her general duty of disclosure seemed comprehensive.[1] In cross-examination, the father was impelled to admit the mother’s compliance with many of the interim orders and, in respect of those particular orders with which he did not admit her compliance, he either did not know whether she complied or otherwise could not persuasively establish her breach. Nor did he establish her failure to comply with her duty of disclosure under the Family Law Rules 2004 (Cth). Significantly, the father was a director and shareholder of the corporation which conducted the business and so he had just as much power as the mother to obtain and regulate the financial records of the corporation and the business.
[1] Exhibit M6
Once the father moved permanently to the X region in June 2015, he ceased trying to conduct a business in the E region. He was later bankrupted in February 2016 and the parties’ corporate structure progressively dissolved throughout 2016 and 2017.
As for the children, the interim orders provided for them to live with the mother, to spend time with the father on alternate weekends, and to communicate with the father by telephone once each week. The father was either unable or unwilling to utilise all of the time with the children which was available under the terms of the orders. He initially saw the children only during the daytime because he did not believe he had satisfactory facilities to accommodate them overnight.[2] Then, shortly afterwards in April 2015, he told the Family Consultant he intended relocating to the X region on the north coast of NSW, which would only enable him to see the children on one weekend each month.[3] The father saw the children on the last weekend in May 2015[4] and he then moved to the X region in June 2015.[5] After that, the changeovers between the parties were often fractious and the children’s interaction with the father was episodic, but their interaction ceased altogether in March 2017. Substitute interim orders were made with the parties’ consent in November 2017, when the trial was initially adjourned, providing for the children to spend time with the father on two specific occasions before the next trial date, which orders were implemented.
[2] First Family Report, para 20
[3] First Family Report, para 21
[4] First Family Report, para 23
[5] Father’s second affidavit, para 292
Evidence
The father relied upon:
(a)His affidavit filed on 23 October 2017;
(b)His second affidavit filed on 5 March 2018; and
(c)His financial statement filed on 23 October 2017.
Although the father’s second affidavit referred to annexures labelled B1 to B10, those documents were not annexed and were not separately tendered as exhibits.
The father did not rely upon any affidavit from his former partner, as procedural orders allowed.[6]
[6] Order 7(1)(ii) made on 26 May 2017
The mother relied upon:
(a)Her affidavit filed on 29 September 2017;
(b)Her second affidavit filed on 2 February 2018;
(c)Her third affidavit, sworn on 13 March 2018, which was tendered as an exhibit before it was filed;[7]
(d)Her financial statement filed on 29 September 2017; and
(e)The affidavit of her partner, Mr F, filed on 29 September 2017.
[7] Exhibit M1
The parties and Independent Children’s Lawyer also relied upon:
(a)The Family Report dated 21 October 2016 (“the first Family Report”); and
(b)The Family Report dated 27 April 2017 (“the second Family Report”).
In relation to the dispute under Part VIII of the Act, the trustee relied upon:
(a)The affidavit of the trustee filed on 28 November 2016;
(b)The affidavit of the trustee filed on 3 March 2017; and
(c)Another document separately filed by the trustee.[8]
Parenting orders
[8] Exhibit T1
Legal principles
Orders in respect of children are made under Part VII of the Family Law Act (“the Act”), where the meaning of a “parenting order” is defined (s 64B). The Court may make such parenting orders as it thinks proper (s 65D), within the context of the objects of the legislation and the principles which underpin those objects (s 60B).
When making parenting orders, the Court is mandated to regard the child’s best interests as the paramount consideration (ss 60CA, 65AA). The Act specifies the criteria which must be considered in arriving at a conclusion as to what is in the child’s best interests (s 60CC).
The Act imports a rebuttable presumption that a child’s best interests are served by an order allocating equal shared parental responsibility for the child to the parents (s 61DA). Parental responsibility is defined to encompass all duties, powers, responsibilities and authority conferred by law upon parents (s 61B). The legislation dictates the manner in which shared parental responsibility is to be exercised in respect of decisions relating to “major long-term issues” concerning the child (s 65DAC), being matters such as education, religion, culture, health, name, and changed living arrangements (s 4), and also in respect of decisions which do not relate to such significant issues (s 65DAE).
The presumption of equal shared parental responsibility does not apply in certain circumstances, including in instances of child abuse and family violence (s 61DA(2)), and the presumption may be rebutted if the Court is satisfied it would not be in the child’s best interests for the parents to have equal shared parental responsibility (s 61DA(4)). The presumption says nothing about the amount of time the child should live or spend with each parent, but the manner in which parental responsibility for the child is allocated by the Court may bear on that issue.
In the event an order is made allocating equal shared parental responsibility to the child’s parents, the Court is then obliged to consider both the advisability and practicability of the child living for equal time with both parents, or alternatively, living primarily with one and spending substantial and significant time with the other (s 65DAA). If parental responsibility for the child is allocated in some other way, then the exercise of the Court’s discretion about the child’s care arrangements is at large, though the discretion must still be exercised in the context of the child’s best interests being the paramount consideration.
Proposals
In final submissions, the father abandoned the proposal set out within his Amended Application filed on 28 June 2017 and instead sought the orders set out within the minute of orders he tendered.[9] In essence, he abandoned his quest for the children’s residence but maintained his application for the allocation of equal shared parental responsibility for the children. He proposed that they spend time with him in school holiday periods and they have regular communication by Skype or telephone.
[9] Exhibit F2
Similarly, in final submissions, the mother abandoned the proposal set out within her Further Amended Response filed on 30 June 2017 and instead sought the orders set out within the minute of orders she tendered.[10] She proposed her allocation with sole parental responsibility for the children, that they live with her, and that they spend time with the father on only four occasions each year. She proposed that each visit be confined to a single day, with the changeover venue close to her home, and that future visits cease if the father fails to attend on two consecutive occasions. She proposed there be no orders to either prevent or compel telephone communication between the children and the father.
[10] Exhibit M18
The Independent Children’s Lawyer tendered a minute of the orders she proposed at the commencement of her final submissions.[11] Her proposal was generally consistent with the mother’s. She proposed that the mother have sole parental responsibility for the children, that they live with her, and that they spend time with the father on five occasions each year, with each occasion comprising two consecutive days (escalating to include the intervening night). Similarly, she proposed the children’s visits with the father be suspended and then be left to the discretion of the mother if the father fails to attend on two consecutive occasions. She proposed weekly telephone communication and occasional written communication between the children and the father.
[11] Exhibit ICL1
Best interests of the children (s 60CC(2)(a))
The central tenet of the father’s case for reversal of the children’s residence was his allegation that the mother was alienating the children from him.[12] His contention, implicitly if not expressly, was that the mother’s conduct tended to ruin the children’s relationships with him and deprive them of the benefit they formerly did and should continue to derive from their relationships with him. His eventual abandonment of his application for the children’s residence must necessarily mean he also abandoned the alienation allegation, or he at least realised it could not be sustained on the available evidence.
[12] First Family Report, paras 58, 83, 84
The mother denied the alienation allegation, which disavowal was objectively supported by the evidence and the Family Consultant’s opinion. She is not intent upon the destruction of the children’s relationships with the father.
Following the interim orders being made in February 2015, the father only allowed the children to spend time with him until he left the E region in June 2015 to live in the X region. He thereafter failed to allow the children to spend any time with him until late 2016.[13] The father told the Independent Children’s Lawyer he chose to move so far away because the children’s changeovers between the spouses was “growing extremely hostile and volatile” and he did not want the children exposed to such conflict. The failure of the family business in the E region was another reason for his relocation.[14]
[13] Mother’s first affidavit, paras 223, 234, 235, 267; Father’s first affidavit, para 196
[14] Exhibit M13
Most probably, at least up until the family’s meeting with the Family Consultant in October 2016, the children’s estrangement from the father was a realistic reflection of their experience after the spouses’ separation.[15] The children perceived they were abandoned by the father, about which their feelings were an admixture of anger, sadness, and disappointment.[16] The Family Consultant found the children to be wary of the father at their first interview, but still warm towards him.[17] Their relationships with the father appeared salvageable so the Family Consultant recommended resumption of their visits, but in the absence of the father’s partner.[18]
[15] First Family Report, para 119
[16] First Family Report, paras 68, 69, 70, 76, 99, 101
[17] First Family Report, paras 112, 114, 116
[18] First Family Report, Recommendations I and II; Father’s first affidavit, paras 208,210
At the meeting with the Family Consultant in October 2016, the mother readily agreed to the father’s request to spend time with the children the following day before his return to the X region.[19]
[19] First Family Report, para 117; Second Family Report, para 2
The spouses arranged for the children to next visit the father in November 2016, but it did not end well. The father took his partner with him (contrary to the Family Consultant’s advice), he was late returning the children, and he began recording the mother to prove she was “emotionally volatile”.[20] The father remained in the E region over the next few days and attended the children’s school, which resulted in another altercation and the police being summoned.[21]
[20] Second Family Report, paras 7-13; Father’s first affidavit, paras 216-226
[21] Second Family Report, paras 14-17; Father’s first affidavit, paras 227-235
The father chose not to spend time with the children over the next few months on other dates arranged between the spouses’ solicitors. The father openly contended that was because of the mother’s “violent and abusive baseless allegations” and his “lack of finances”.[22]
[22] Mother’s affidavit, paras 279-281, 396-402, Annexures S, X, Y, Z, AA; Father’s first affidavit, para 237-238; Second Family Report, paras 18-23
The subsequent visit between the children and father in March 2017 also turned out badly. A tense stand-off developed between him and the children, which he sought to remedy by driving them to the police station for them to be admonished by police officers.[23] The father subsequently told staff at the children’s school it was “a nightmare weekend” with the children and he was “unsure whether he will see [them] again” after the tumult.[24]
[23] Second Family Report, paras 25-29
[24] Exhibit M15; Second Family Report, para 30
The father did not attend the second appointment with the Family Consultant in April 2017,[25] so she was deprived of the opportunity to observe the children’s behaviour in his company. At that point in time, the Family Consultant was satisfied of the mother’s insight and parenting capacity, whom she perceived was trying to prioritise the children’s psychological well-being when dealing with the father.[26]
[25] Second Family Report, page 4
[26] Second Family Report, paras 42, 44, 46
When the trial could not proceed on the first occasion in November 2017, the mother was not obstructive about further interaction between the children and father, even though they had not spent time together since March 2017. She agreed the children could spend time with the father on two discrete occasions in December 2017 and February 2018, but confined to daytime hours on each occasion.[27] The first visit occurred satisfactorily but the second ended in heated dispute between the father and second child.
[27] Orders 5-7 made on 6 November 2017
It must follow that, even though the children probably still regard their filial relationships with the father as meaningful, they derive from them much less than the full measure of benefit they desirably should. The responsibility for the deterioration in their relationships with the father must rest principally with him. The evidence did not demonstrate that much, if any, responsibility should rest with the mother.
By comparison, the children’s relationships with her are meaningful and the children derive much benefit from them. The father’s eventual resignation to the reality that the children should remain living with her was testament to that.
Best interests of the children (s 60CC(2)(b))
The father alleged both parties formerly committed family violence, whereas the mother sought to blame only him for past family violence. The Family Consultant concluded the father was the primary perpetrator of family violence,[28] but it is unnecessary to decide the factual dispute for two reasons.
[28] First Family Report, para 53
First, the commission of any family violence by either spouse was sufficient to oust the presumption of equal shared parental responsibility (s 61DA(2)(b)).
Second, while the mother alleged the children were at unacceptable risk of psychological harm in the father’s care due to their subjection or exposure to his uncontained and overbearing behaviour and his alarming lack of insight, that argument tended to engage the evidence as it related to ss 60CC(3)(f), 60CC(3)(i), and 60CC(3)(j) rather than s 60CC(2)(b) of the Act.
The father maintained the children were at some risk of harm by reason of their subjection or exposure to physical abuse by the mother,[29] but he ultimately did not suggest the children should be removed from her residential care. He was content with an injunction restraining the spouses from administering the children with corporal punishment.[30]
[29] Father’s first affidavit, para 213, Annexure GD-5
[30] Exhibit F2, Orders 12-13
Best interests of the children (s 60CC(3))
Several aspects of the evidence were pivotal to the resolution of the spouses’ dispute over the children. They were:
(a)The views of the children (s 60CC(3)(a));
(b)The father’s failure to take the opportunity to allow the children to spend time with him (s 60CC(3)(c)(ii));
(c)The father’s failure to properly maintain the children (s 60CC(3)(ca));
(d)The practical difficulty and expense of the children spending time with the father (s 60CC(3)(e));
(e)The father’s impaired parenting capacity and impaired attitude to the responsibilities of parenthood (ss 60CC(3)(f) and 60CC(3)(i)); and
(f)The children’s involvement in family violence between the spouses (s 60CC(3)(j)).
The children’s views about the father were relatively constant between the two interviews conducted in October 2016 and April 2017. The children are exceedingly cautious and anxious about spending any time with the father.[31] The two eldest children would prefer not to be forced to see him, whereas the youngest child was sad the situation is as unmanageable as it now seems. The children are still only young, but some weight should be accorded to the constant views of at least the eldest child. As would be obvious, those views were probably informed by the unreliability of their interaction with the father after separation and the conflict they witnessed during the events in November 2016 and March 2017, but the evidence about their subsequent experiences offered insufficient room for optimism about any improvement.
[31] First Family Report, paras 99-102, 104-105, 108; Second Family Report, paras 56-60
The father’s lack of insight into the children’s emotional needs and his inability to provide for their emotional needs was an issue of pre-eminent importance. His shortcomings in that regard were proven repetitively by the evidence. The following examples illustrate the conclusion:
(a)He voluntarily moved some 750 kilometres away from the mother and the children in June 2015 after having agreed on orders only months before in February 2015 for them to spend alternate weekends with him. He knew the orders could not be implemented as a consequence of his decision to move away because he told the Family Consultant that his similar geographical separation from his older children from a former relationship prevented him from having relationships with them too.[32] Despite the tyranny of the distance he voluntarily chose to put between himself and the children, he told the Family Consultant he was “doing everything possible” to have relationships with the children.[33] If he truly believed that he was deluding himself.
[32] First Family Report, para 90
[33] First Family Report, para 91
(b)The Family Consultant told the father in October 2016 that the children were angry with him and felt rejected because of his conduct, not the mother’s conduct.[34] The Family Consultant asked the father directly why he would not move back to the E region to see more of the children and he unconvincingly explained he was attending TAFE and was in another relationship. He said he might be willing to move back, but he has not, even though he is no longer in that or any other relationship.[35] He has remained living in the X region and said in evidence he intends to remain living in that district. It must suit him to live so far away and not see more of the children. Even though the father believed he and the eldest child were “best friends” and the eldest child pleaded with him to spend weekends with him,[36] he did not. On at least one occasion in November 2015, he travelled to the E region but elected not to see the children.[37] The father believes he has better employment prospects and better emotional support in the X region,[38] which must mean he believes the children’s need to see more of him ranks lower in priority than his own need for the satisfaction he derives from living in the X region.
[34] First Family Report, para 92
[35] First Family Report, para 96
[36] First Family Report, para 39
[37] First Family Report, paras 28-29
[38] Father’s second affidavit, para 329
(c)The father often criticised the mother, unjustifiably and unwisely, to the children and others:
(i)He criticised her for continuing to take the children to the changeover venue after he moved to the TX region,[39] but the interim orders obliged her to do so. He also told the Family Consultant he still intended to come back down to the E region to see the children on one weekend each month,[40] so the mother had to be prepared.
[39] First Family Report, para 24
[40] First Family Report, para 21
(ii)The eldest child confirmed to his school counsellor the father said “mean things” about the mother.[41]
(iii)The father threatened the mother he would tell the eldest child she was formerly a sex-worker,[42] which he later did by sending a text message to the mobile telephone to which he knew the children had access.[43] The eldest child learned of the mother’s history and she was compelled to explain it to him.[44]
(iv)The children reported to a counsellor and the Family Consultant that the father made “negative comments” about the mother during their telephone communication.[45]
(v)The father contacted police and requested them to carry out “welfare checks” on the children, implying they were in danger in the mother’s care, without any apparent objective basis for such concern.[46]
(vi)The father contacted the family general practitioner, the child welfare authority, and lawyers to report his concerns about the mother’s “mental health”, which concerns he elaborated in lurid detail.[47] He overlooked mentioning to them the concern expressed by police about his own “mental state”.[48]
(vii)The father told the Family Consultant of his concern the mother suffers from a variety of psychiatric or psychological ailments, which the Family Consultant dismissed as baseless scandal.[49]
(viii)The father told the Independent Children’s Lawyer, in histrionic terms, of his concerns about the mother’s emotional instability and unreliability.[50]
(ix)The father told staff at the children’s school of his belief in the mother’s irrationality, unreliability, and destructive potential.[51] He also pointlessly criticised the mother’s new partner to the Family Consultant[52] and the staff of the children’s school.[53] That was a deliberate attempt by the father to align the school staff with him against the mother.
(d)The father sometimes took video footage of the mother and children at changeovers.[54] He said in cross-examination he did so to protect himself from malicious allegations, but if the video footage was intended by him to be used as evidence, it was pointless because he did not adduce it in evidence and, when the mother called for its production, it was not produced. In any event, the father seemed not to appreciate (or alternatively care about) the distress it caused the children for him to videotape the changeovers. They were disturbed by their involvement in their parents’ antipathy. The father admitted in cross-examination the children have told him they feel as though they need to choose allegiance with one parent over the other because of the conflict.
[41] First Family Report, para 15; Mother’s first affidavit, paras 441, 443, 444, 449
[42] First Family Report, para 22
[43] Mother’s first affidavit, para 442
[44] First Family Report, para 41
[45] First Family Report, para 25
[46] First Family Report, paras 44, 84
[47] First Family Report, paras 9, 34, 35
[48] Father’s first affidavit, paras 125, 182, 185
[49] First Family Report, paras 55-57, 86
[50] Exhibit M13
[51] Exhibit M15
[52] First Family Report, para 85
[53] Exhibit M15; Second Family Report, para 30
[54] First Family Report, paras 49, 84; Second Family Report, para 11
As the Family Consultant logically observed, it was ludicrous for the father to widely and gratuitously criticise the mother’s competence as a parent when he willingly left the children in her care in the E region while he continued to live in the X region.[55] The father’s insight into that issue has not noticeably improved. As recently as in July 2017, his counsellor had to instruct him to desist from his fixation upon the mother’s alleged dysfunction and to instead concentrate on his own behaviour,[56] which is the same message the Family Consultant had been trying to give for much longer.
[55] First Family Report, paras 36, 87, 88
[56] Exhibit M14
Unfortunately, the father cannot appreciate the problem from an objective perspective. He constantly deflects blame from himself to the mother. He told the Family Consultant the mother was responsible for him moving away from the children and him not availing himself of time with the children under the interim consent orders made in February 2015. He refused to acknowledge it was his voluntary decision[57] and he refused to accept responsibility for the children being angry with him about it.[58]
[57] First Family Report, paras 88, 95
[58] First Family Report, para 92
The father adduced evidence which was apparently designed to demonstrate an improvement in his insight and parenting capacity,[59] but the evidence did not achieve his objective. His completion of education courses in 2017 did not help too much with his insight. The breakdown in arrangements for the children to spend time with him in March 2017 occurred in the midst of his counselling, which started months before.[60] His evidence in-chief and in cross-examination at trial in March 2018 was still replete with his criticisms of the mother. He continued to blame her for his non-payment of child support in respect of his older children.[61] He still maintained there were “issues” about her mental health. Most tellingly, until final submissions in the trial, he still thought the children’s best interests demanded that they be removed from the mother’s residential care so they could instead live with him in the X region and only occasionally spend time with her, apparently not recognising the absurdity of that proposal until such a belated point in the litigation.
[59] Father’s second affidavit, paras 303-330
[60] Father’s first affidavit, para 293, Annexure GD-9
[61] Father’s second affidavit, paras 65, 78, 80
The Family Consultant reported in April 2017:
At the current time, the children are considered to be [at] risk of emotional and psychological harm resulting from the father’s behaviour, which may negatively impact on their long term well-being and development.[62]
[The father’s] intense focus on [the mother’s] perceived deficits tends to preclude him from developing any insight or accepting any responsibility for the situation that has evolved.[63]
Put very simply, [the father] blames the mother for everything that has happened to date, including his decision to move away from the children. He tends to share his views and his version of events with others in an attempt to further his agenda, without boundaries or consideration as to the impact that this might have on others.[64]
[The father] appears to lack insight into the impact of his actions on his children. He has no filter in regard to what may be appropriate or inappropriate information to share with children. He also presents as quite resistant to accepting any feedback about the children’s experiences and perceptions of their situation.[65]
The Family Consultant has significant concerns about the father’s capacity to recognise and meet the needs of the children. The father presents with significant deficits in regard to parenting capacity.[66]
[62] Second Family Report, para 40
[63] Second Family Report, para 47
[64] Second Family Report, para 48
[65] Second Family Report, para 49
[66] Second Family Report, para 54
The Family Consultant adhered to those views in cross-examination. In a purely hypothetical sense, the father attempted to extract her concession that his insight had improved since her last report in April 2017, but she only conceded any change on his part was possible, not probable. The evidence of favourable change urged by the father was far too little far too late. As the mother contended in final submissions, orders need to be made on the basis of current reality, not the mere hope of his future improvement.
The children’s general happiness and self-esteem have been deleteriously affected by the spouses’ conflict and the father’s behaviour over the last few years.[67] For that reason, the evidence warrants orders which strictly limit the amount of time the children spend with the father. It is unnecessary to impose permanent professional supervision upon their interaction, as the Family Consultant considered as an alternative,[68] since not even the mother suggested such an onerous constraint. The Family Consultant agreed in cross-examination that, since the children still love the father, their expenditure of limited time with him was preferable to no time at all.
[67] Second Family Report, para 61
[68] Second Family Report, para 62
Relatively strict confinement of the children’s future interaction with the father was also justified by the practical difficulty and expense involved in bringing them together. The father intends retaining his residence in the X region and the mother intends retaining her residence on the E region. Some 750 kilometres separates their homes and the uninterrupted driving time is about 10 hours. The father proposed orders that envisage the children will only be able to spend time with him in school holiday periods, though he contemplated visits of much longer duration than did either the mother or Independent Children’s Lawyer. Irrespective, it was common ground the children’s visits with him will be infrequent.
As to the duration of the children’s visits with the father, he conceded to the Family Consultant that it was “hard to look after [three] active children by himself”,[69] which was why he relied upon his former partner for help. He is no longer in a relationship with that person so he is without her help. The father’s difficulty in handling the three children together was most recently demonstrated by him trying to keep all of them satisfied during the daytime visit in February 2018. It ended in a tantrum by the second child, which he was seemingly powerless to prevent or mollify. The same thing happened on the last weekend visit in March 2017, when he felt obliged to take the children to the police for their chastisement.
[69] Second Family Report, para 51
Finally, the father’s failure to properly maintain the children is a salient consideration. It is a reason why the onus of travel should fall upon the father, rather than the mother, to implement the children’s future visits with him. For a long period, the father paid no child support in respect of the children at all. More recently, he has paid some child support, but it is a reasonably paltry amount.[70]
[70] First Family Report, para 27; Mother’s second affidavit, paras 6-8
Conclusions and orders
Some form of family violence occurred between the spouses in the past so the presumption of equal shared parental responsibility does not now apply (s 61DA(2)). As the father correctly submitted, that does not preclude an order for equal shared parental responsibility being made, but it must be in the children’s best interests before such an order would be made.
The children’s best interests would not be served by an order for the spouses to have equal shared parental responsibility. They cannot effectively co-parent the children. When asked, the father could not identify a single decision the parties made jointly about the children’s welfare after their separation. Most recently, the father vociferously criticised the mother for removing the children from their private school and instead enrolling them at a public school.[71] The mother had no option because she was indebted for school fees in the sum of $8,000 and could not pay them. His criticism of her for the decision was bold and ironic in the face of his inability to pay the fees and his paltry contribution of child support.
[71] Father’s second affidavit, paras 333, 340, 347, 365
The evidence afforded no scope to fairly conclude the spouses are capable of civil discourse and temperate decisions about important issues concerning the children. The prospect of them reaching any consensus is remote. It is only feasible for the mother, as the residential parent, to have exclusive parental responsibility for the children. That conclusion was consistent with the advice of the Family Consultant.[72]
[72] First Family Report, para 62
The spouses and Independent Children’s Lawyer concurred it is only feasible for the children to spend time with the father intermittently because of the distance between the spouses’ homes and their very modest financial circumstances. The father admitted in cross-examination his poor financial circumstances partly explained why he did not travel to see the children between March and December 2017.
The orders make provision for six visits each year, in circumstances where the mother proposed four and the Independent Children’s Lawyer proposed five. The visits are spaced two months apart. The frequency of those visits seeks to strike a balance between, on the one hand, the need of the children to see enough of the father to derive benefit from their relationships with him and, on the other, the father’s financial capacity to travel by car or train between the X region and the E region and to accommodate himself for the nights before and after the visits with the children. Even though the father remains an unemployed, undischarged bankrupt, he conceded the prospect of his receipt of financial assistance from his family to help maintain contact with the children.
The visits should be confined to daytime only because of the trouble the father has historically encountered controlling them for weekends. His proposal for them to spend large chunks of school holiday periods with him was another illustration of his lack of insight. The children have never spent more than a weekend with him since the parties’ separation in November 2014 and those weekends have sometimes ended in acrimony. Confinement of visits to single days at intervals of two months will not expose the children to an unacceptably high risk of emotional harm. The mother and Independent Children’s Lawyer must both agree, since their proposals were similar.
There is little chance the children would happily visit the father so far away from their home with the mother. They are guarded about him because of his apparently fluctuating level of interest in them over the last few years. There is really no option but to ensure their visits with the father occur in the E region, so he will be obliged to collect and return the children in that region. Since the visits will be confined to single days, he will not be able to take them far away.
If, regardless of the reason, the father fails to attend for two consecutive visits under the orders then the orders will be suspended and any future time spent by the children with him will be determined unilaterally by the mother as an incident of her exclusive parental responsibility for them. That was the mutual proposal of the mother and Independent Children’s Lawyer and was consistent with the advice of the Family Consultant.
The father proposed an order which effectively compelled the spouses to renegotiate the amount of time the children spend with him if he ever decides to move and live closer to the mother.[73] No such order is made since it would offend common sense, the law, and the evidence. It offended common sense because the trial was intended to put an end to over three years of dispute and such an order would invite the prospect of renewed dispute at the father’s election. It offended the law because one factor dictating decisions about the children’s best interests is the desirability of avoidance of further litigation (s 60CC(3)(l)) and such an order would be tantamount to an invitation for more litigation. It offended the evidence because, during the trial, both spouses confirmed their intention to retain their residences some 750 kilometres apart. Parenting orders are always susceptible to alteration (s 65D(2)), but only in the event of sufficiently substantial changes in circumstances (Rice v Asplund (1979) FLC 90-725).
[73] Exhibit F2, Order 11
The spouses agreed the changeover venue should be the McDonalds Restaurant at Suburb T in the E region of NSW.
An order restrains the father from recording any aspect of the changeovers, as the mother and Independent Children’s Lawyer proposed.
The mother sought orders enabling removal of the children’s names from the airport watch list, her procurement of passports for them, and her international holidays with them,[74] which proposal was endorsed by the Independent Children’s Lawyer in similar terms.[75] The father did not seek any orders to the contrary, but he said he opposed the mother’s proposals because he feared she would take the children to New Zealand and not return. While his fear may be genuine, it is not objectively justified.
[74] Exhibit M18, Orders 12-14
[75] Exhibit ICL1, Orders 18-21
The mother will shortly be an Australian citizen.[76] Members of the maternal family live in New Zealand and she does not want to be restrained from taking the children to New Zealand. Even if she did unexpectedly detain the children in New Zealand, the father could seek their return to Australia under the 1980 Hague Convention or alternatively register and enforce the orders in New Zealand (ss 4, 70M, 70N of the Act; r 14 and schedule 1A of the Family Law Regulations 1984 (Cth); ss 8, 81-86 of the Care of Children Act 2004 (NZ)).
[76] Exhibit M1
The discharge of former orders relating to the children will include the discharge of the interim orders made in December 2014, which required the addition of the children’s names to the airport watch list. Another order is made under s 65Y(2)(b) of the Act permitting the mother to travel outside Australia with the children. There is no need for any separate order about the children’s passports because the mother will have exclusive parental responsibility for the children (s 11 of the Australian Passports Act 2005 (Cth)).
Telephone communication between the children and the father has been the catalyst for continued complaint by both spouses.[77] Nevertheless, the father proposed orders[78] for their telephone and electronic communication even more frequently than the single telephone call each week prescribed by the interim orders made in February 2015.[79] The Independent Children’s Lawyer proposed retention of the regime for one telephone call each week,[80] while the mother preferred no prescriptive orders about telephone communication at all. No order is made to prescribe telephone communication as it would invite the same trouble the spouses have encountered over the last three years. The orders do not prevent the children’s voluntary telephone communication with the father, as presently occurs between the eldest child and father. Instead, orders are made for limited written communication between the children and father, which was the additional proposal of the Independent Children’s Lawyer[81] and the original proposal of the mother.[82]
[77] First Family Report, paras 25, 40, 46; Father’s first affidavit, paras 194, 198, 199, 203, 272; Father’s second affidavit, paras 342, 343; Mother’s first affidavit, paras 426,427
[78] Exhibit F2, Orders 4-7
[79] Order 6 made on 18 February 2015
[80] Exhibit ICL1, orders 10-13
[81] Exhibit ICL1, Order 14
[82] Further Amended Response filed 30/6/17, Order 4
The mother proposed an order be made restraining the father from attending the children’s schools,[83] whereas the Independent Children’s Lawyer proposed the father should only be excluded from their schools when he did not have the school principal’s written permission to attend.[84] The father did not seek any order permitting or preventing his school attendance. The father attended the children’s school in the past, which caused conflict between the spouses.[85] There is no reason for him to attend the children’s school. He can obtain the children’s school reports and school photographs without the need to attend in person. An injunction precludes his attendance at the children’s school.
[83] Exhibit M18, Order 10
[84] Exhibit ICL1, Orders 16, 28
[85] First Family Report, paras 28, 45, 83; Second Family Report, paras 14-17
The father sought orders restraining the mother’s freedom of movement and compelling her to submit the children to counselling.[86] He conceded his application for those orders, which were made for the first time in final submissions, denied the mother procedural fairness and could not therefore be made.
[86] Exhibit F2, Orders 9, 10, 20
The father sought orders imploring the spouses to act more responsibly than they have in the past.[87] He conceded the proposed orders were entirely aspirational and unenforceable, so they could not be made.
[87] Exhibit F2, Orders 15, 16
The father sought an order which compelled the spouses to resort to mediation and counselling if they are unable to resolve any future dispute,[88] but he agreed such an order was unnecessary if sufficiently prescriptive and enforceable orders were otherwise made.
[88] Exhibit F2, Order 21
The remaining parenting orders made are self-explanatory and could not be the subject of sensible opposition.
The mother proposed that the orders be explained to the children by the Independent Children’s Lawyer, which the Independent Children’s Lawyer informed the Court she was willing to do, so an order is made to that effect.
Property settlement orders
Legal principles
Orders under s 79 of the Act altering the property interests of parties may only be made if the Court is first satisfied, pursuant to s 79(2), it is just and equitable to make such orders. The Act then identifies in s 79(4) the matters the Court must take into account in considering what order, if any, should be made (see Stanford v Stanford (2012) 247 CLR 108 at [22], [35]). While those two inquiries are not to be conflated (see Stanford at [35], [40], [51]), the factors within s 79(4) permissibly inform the inquiry under s 79(2) (see Bevan & Bevan (2013) 49 Fam LR 387 at [83]-[89], [163], [169], [171]-[172]).
It is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying the existing legal and equitable property interests of the parties. It must not be assumed that the parties’ rights to or interests in marital property are or should be different from those that then exist or that a party has the right to have the parties’ property divided by reference to considerations set out in s 79(4) of the Act (see Stanford at [37]-[40], [50]). Commonly, however, it will be just and equitable for the parties’ property rights to be altered because the breakdown in their relationship will end their fiscal unity and deprive them of common use of their property (see Stanford at [42]; Bevan & Bevan at [68]-[70], [82], [164]-[165]).
If and once determined it is just and equitable for the property interests of the parties to be altered, the process of evaluating the proper orders to make is dictated by the factors enumerated within s 79(4) of the Act. The court must necessarily identify and assess the parties’ contributions within the meaning of ss 79(4)(a)-(c) and then take account of the relevant matters referred to in ss 79(4)(d)-(g) and 75(2).
Existing property interests
The mother’s existing assets and liabilities comprise:
No.
Assets
Value
Total
1
Former matrimonial home at Suburb Q
695,000
2
Shares in Y P/L
nil
3
Bank accounts
10
4
2006 model car
3,500
5
1997 model car
100
6
Household contents
2,000
Sub-total
700,610
700,610
Liabilities
7
Mortgage over Suburb Q
197,788
8
Westpac loan
45,157
9
Westpac credit cards
37,329
10
M credit cards
7,200
11
School fees
8,000
Sub-total
295,474
295,474
Net assets (surplus)
405,136
The father only has proprietary interest in some bank account balances of minimal value and some personal property of minimal value.[89] His interest in all other assets vested in the trustee upon his bankruptcy.
[89] Father’s financial statement, paras 37, 40, 43
The trustee’s existing assets and liabilities comprise:
No.
Assets
Value
Total
2
Shares in Y P/L
nil
12
Interest in other real property (50%)
500
Sub-total
500
500
Liabilities
13
X Council
33,004
14
CBA credit card
486
15
P Firm
20,000
16
H & Assoc
1,000
17
Telstra
800
18
S Firm
10,000
19
Paternal grandmother
22,500
20
ATO
800
21
Child Support Agency
31,000
Sub-total
119,590
119,590
Net assets (deficit)
-119,090
The trustee deposed he enjoyed a one-half proprietary interest in the former matrimonial home, but he certainly has no legal interest in the property since the mother is the sole registered proprietor.[90] The trustee did not participate in the trial to try and explain the anomaly. The father sought to argue the trustee is now vested with the one-half equitable interest in the property that he previously enjoyed. He contended the equitable interest arose either by constructive or resulting trust.
[90] Mother’s financial statement, para 35; Mother’s first affidavit, paras 44, 100; Father’s second affidavit, paras 63-64; Exhibit M19
The evidentiary foundation for the father’s argument was said to be his unchallenged evidence that:[91]
[He] had $80,000 - $100,000 saved from sales over the previous 2 years through City Commercial P/L and [he] contributed all those funds to the purchase of the [Suburb Q] property and renovations.
[91] Father’s second affidavit, para 63
But that evidence was different from his original evidence that:[92]
[He] had $80,000 saved from sales over the previous 2 years and [he] contributed all those funds to the purchase of the [Suburb Q] property.
[92] Father’s first affidavit, para 63
Comparison of those two pieces of the father’s own evidence left the following facts quite unclear:
(a)The quantum of funds contributed to the purchase;
(b)Whether the funds were contributed by G Pty Ltd or by the father personally; and
(c)Whether the expenditure was directly towards the purchase price, more indirectly towards mortgage repayments or the cost of subsequent renovations of the property, or a permutation of those things.
The lack of clarity was only compounded by the mother’s unchallenged evidence. She deposed the spouses had $80,000 in joint savings, which money was applied in aggregation with a loan of $278,800 to enable completion of the property purchase.[93] The loan by the mortgagee was made exclusively to her.[94] There was no evidence as to responsibility for loan repayments up until separation, but the mother was solely responsible for the loan repayments after separation.[95]
[93] Mother’s first affidavit, para 99
[94] Exhibit M19; Mother’s first affidavit, para 100
[95] Mother’s first affidavit, para 513
An implied (or resulting) trust arises where the legal owner of property provided only part of the purchase price of the property and another party provided the other portion of the purchase price. A trust is presumed in favour of the other party and his beneficial interest is proportionate to the financial contribution (see Allen v Snyder (1977) 2 NSWLR 685 at 689-691; Calverly v Green (1984) 155 CLR 242 at 246). The trust may also be implied from later financial contributions, such as those in the nature of mortgage repayments. However, the implication of the trust is ousted by a countervailing presumption of advancement when the financial contribution is made by a husband for the benefit of his wife or child. In those circumstances, the contribution is presumed to be a gift to the recipient (see Martin v Martin (1959) 110 CLR 297 at 303-305; Allen v Snyder at 690; Calverly v Green at 268-269; Muschinski v Dodds (1985) 160 CLR 583 at 590). Both the implication of the trust and the presumption of advancement are rebuttable presumptions and will yield to evidence as to the actual intention of the parties (see Allen v Snyder at 690).
In the case of constructive trusts, the inquiry is not as to the actual or presumed intention of the parties, but rather as to whether according to the principles of equity it would be a fraud for the legal owner of the property to deny the trust. The constructive trust is imposed when it would be unconscionable to allow the legal owner to enjoy sole beneficial ownership of the property (see Bannister v Bannister (1948) 2 All ER 133; Muschinski v Dodds at 614-617, 620-621; Baumgartner v Baumgartner (1987) 164 CLR 137 at 148-150).
In this instance, the father (and trustee) bore the burden of establishing the existence of the equitable interest, but the untested and conflictual evidence failed to establish whether it was the father or City Commercial Pty Ltd who contributed money to the purchase of the property and, even if it was the father, the amount of money he (as distinct from the mother) contributed. Speculation of those essential facts will not suffice.
The spouses agreed upon the mother’s purchase of the property in her sole name because the father had unpaid debts and he did not earn an income.[96] The purchase of the property in the mother’s sole name was therefore a deliberate asset-protection strategy devised by the spouses. It could hardly be unconscionable to hold the parties to the bargain they struck because they each perceived benefit in it over a long period of time. It is only now, upon their separation, that the father asserts his disadvantage.
[96] Mother’s first affidavit, paras 44, 100; Father’s first affidavit, paras 64, 65
The evidence fell short of proving the father acquired any equitable interest in the former matrimonial home pursuant to either a resulting or constructive trust by reason of the manner in which the mother acquired sole legal title in the property – let alone an equitable interest quantified at one-half of the property’s title. If the father never held an equitable interest in the property then no such interest could have vested in the trustee. Any entitlement of proprietary interest in the property enjoyed by the trustee must, if at all, derive from the father’s established entitlement under Part VIII of the Act.
The father submitted that any failure to accept the correctness of the trustee’s assertion of his equitable interest to one-half of the former matrimonial home would deny the trustee the opportunity to argue for his entitlement and thereby deny him procedural fairness, but the submission is rejected. The trustee intervened in the proceedings as a party, appeared at the trial, decided not to actively participate, and sought and was granted leave to depart. The trustee’s decision not to participate and prosecute his submissions was voluntary. He cannot complain if, without the benefit of any elaboration or explanation by him, his evidence or submissions are rejected because the evidence is incorrect or the submissions are misconceived. He has a right of appeal if he considers the Court’s factual findings or conclusions are wrong.
The value attributed by the mother to the former matrimonial home (item 1) is accepted in preference to that attributed by the trustee. She wants to retain the property so the value she attributes to it is an admission against interest and there was no expert evidence on the issue. In any event, the mother’s estimate is both more recent and higher than the trustee’s.
The trustee professed the father’s liability for one-half of the loan secured by mortgage over the former family home, but that evidence was wrong. The mother is the sole mortgagor of the property and solely liable for the debt the mortgage secures.[97] The value attributed by the mother to the current debit balance of the loan (item 7) is accepted in preference to that attributed by the trustee. She has been responsible for meeting the repayments and should know the debit balance best.
[97] Exhibit M19
The mother deposed to her generic debt of $60,300,[98] but that evidence is not accepted for present purposes, even though she was not challenged about it. Some of it was referrable to her payment of legal costs, which are her exclusive responsibility. In cross-examination she revealed how school fees constitute $8,000 of the debt. Only her liability for that amount is taken into account (item 11), which the mother’s counsel conceded to be correct in final submissions.
[98] Mother’s financial statement, para 35
The spouses formerly held shares in and were directors of various private corporations. City Commercial Pty Ltd was de-registered in October 2016,[99] J Group Pty Ltd was de-registered in June 2017,[100] J Corp Pty Ltd was de-registered in June 2017,[101] and S Pty Ltd was de-registered in January 2018,[102] so the spouses’ former shares in those corporations are now worthless. The corporations ceased to exist upon de-registration and any property then held by the corporations vested in ASIC (s 601AD of the Corporations Act 2001 (Cth)). The spouses informed the Court as long ago as September 2015 that the corporations were no longer operating and it was unnecessary to value their shareholdings in the corporations.[103]
[99] Exhibit M8
[100] Exhibit M10
[101] Exhibit M11
[102] Exhibit M12
[103] Notation B made on 11 September 2015
Y Pty Ltd is the corporate trustee of the Y Super Fund. The spouses are shareholders in the company but only the mother is a director.[104] The company performs no function other than its trusteeship of the superannuation fund, so the shares are not intrinsically valuable.
[104] Exhibit M9
Some $73,000 is held in the superannuation fund and is apportioned equally between the spouses.[105] The father deposed that his own superannuation interest within the fund was worth $70,000,[106] but his counsel conceded the error in final submissions. He acknowledged the spouses’ superannuation interests within the fund were of equal value – $36,500 – as the mother alleged.
[105] Mother’s first affidavit, para 501; Mother’s financial statement, para 45
[106] Father’s financial statement, para 45
Section 79(2)
The mother contended it would not be just and equitable for there to be any adjustment of the parties’ proprietary interests or any split of their superannuation interests, which submission was correct.
Aside from the encumbered former matrimonial home and the spouses’ equal superannuation interests, the spouses and trustee have nothing but meagre personal property and large debts. The father conceded that any adjustment of proprietary interests could only be achieved by the mother raising further debt against the security of the former matrimonial home or by the sale of the home and the division of the net sale proceeds. He was impelled to agree the mother had no capacity at all to expand her debt so any adjustment of their property interests would necessarily entail the sale of the home.
For strategic purposes, the spouses agreed the former matrimonial home should be acquired in the mother’s sole name in 2007. Their strategy remained unchanged during the remainder of their marriage. Upon separation, the mother remained in occupation of the home with the children and she alone struggled to meet the mortgage repayments and all other utilities and expenses related to it for the privilege of her exclusive occupation of it.
Given the father proposed orders in these proceedings which would restrain the mother from changing the children’s current residence without notice to him and confine her to find any new residence within the same geographic area,[107] his simultaneous demand for her to sell and vacate the former matrimonial home was surprisingly inconsistent.
[107] Exhibit F2, Orders 9-10; Father’s second affidavit, paras 349, 505
The combined net property of the mother, father, and the trustee is valued at $286,046. The spouses’ superannuation interests are collectively worth $73,000. The total net property and superannuation interests therefore amount to $359,046. The father ultimately argued for his entitlement under ss 79(4) and 75(2) of the Act to be assessed at only 15 per cent of the property and superannuation, which amounts to $53,857. He already has and will keep his superannuation interest of $36,500 so, in effect, he submitted for an extra allocation of $17,357 in property, which property would necessarily vest in the trustee, not him. The allocation of property of that value to the trustee would not enable the trustee to discharge the father’s overall debt of $119,090, so its payment to the trustee would be futile. Orders of that type would only cause the mother’s loss of the home she occupies with the children and leave the father as an undischarged bankrupt.
Before his abandonment of the trial, the trustee made a submission in writing contending he was entitled to “the lower end of [the] range” of between 20 and 50 per cent of the “vested matrimonial pool”.[108] Evidently, he also considered it would be just and equitable to adjust the parties’ property interests, perhaps enabling him to acquire extra property to satisfy the father’s creditors, but the outcome for which he contended would not benefit him much more than the outcome for which the father contended. Much of the debt proven in the father’s bankruptcy was unilaterally incurred by him after the spouses’ separation. There could be no justification for an outcome that forced the mother to contribute towards the payment of that debt from the small surplus of available assets.
[108] Case Outline filed by the trustee on 12 March 2018
The only argument eventually mounted by the father to justify the need to adjust the parties’ property interests was his asserted entitlement to see his past contributions properly and publicly reflected in findings and orders which require the mother to alienate some of her property for the benefit of the trustee. The argument is rejected. It would not be just or equitable to adjust the parties’ existing property interests for that reason. The spouses and the trustee should retain their existing property interests.
Sections 79(4) & 75(2)
The father and trustee should not be disappointed by the conclusion reached under s 79(2) of the Act that it would not be just and equitable to adjust the parties’ property interests, because the same result would follow if their property interests were adjusted in an otherwise just and equitable way.
In final submissions, the father conceded an assessment of the spouses’ respective contributions up to the time of trial would result in the mother’s contribution-based entitlement to 70 per cent of the parties’ assets and superannuation (and his corresponding entitlement to 30 per cent). Once allowance was made for the spouses’ future needs, the father conceded an adjustment of 15 per cent should be made in the mother’s favour, resulting in her receipt of 85 per cent of assets and superannuation (and his corresponding entitlement to 15 per cent).
The trustee contended the father’s entitlement under ss 79(4) and 75(2) of the Act would reflect in an assessment of entitlement at no less than 20 per cent, but little weight is attributed to that submission. The trustee did not participate in the trial to explain the basis of his submission and, since the father was certainly not complicit with the mother in any improper attempt to deprive the trustee of assets for use in the bankruptcy, the father’s admission of the mother’s greater entitlement was telling.
According to the father’s concessions, his asserted entitlement to 15 per cent of assets and superannuation would amount to $53,857. Since he will retain his superannuation interest of $36,500, he effectively submitted for an extra allocation of $17,357 in property to the trustee. In view of the meagre overall value of the parties’ assets and superannuation, the extra $17,357 would have otherwise been adjusted in the mother’s favour under s 75(2) of the Act. An extra adjustment of $17,357 over and above the 15 per cent adjustment in the mother’s favour conceded by the father would increase the adjustment to $71,214. An adjustment of that amount only accounts for 19.83 per cent of the assets and superannuation.
The mother is only 44 years old. She works part-time as a store manager and earns only modest income. She is pregnant with her fourth child and will probably be unable to work during her confinement with the new baby and the child’s infancy. The parties’ children will continue to live with her and she will be almost exclusively responsible for their care and supervision until they attain independence, which is a long period given the youngest child is still only seven years of age. The father has historically paid her very little child support and that is unlikely to change. In such circumstances, an adjustment in the mother’s favour of 19.83 per cent (worth $71,214) would be a modest and deserved adjustment.
Conclusions and orders
Since no property adjustment orders will be made, the mother will retain the former family home, subject to the mortgage encumbering it. Otherwise, she will retain her own personal property and be responsible for her own debts. That will mean she retains property worth $405,136.
The father will retain the negligible amount of personal property the trustee allowed him to retain.
Both spouses will retain their own equal superannuation interests within the superannuation fund. They can each choose whether they leave their interests within the fund or roll-out their interests to other compliant superannuation funds. The mother is the sole director of the corporate trustee of the fund so she bears responsibility for the fund’s future prudential and regulatory compliance.
The trustee will not receive any extra assets or cash for use in the administration of the father’s bankruptcy.
I certify that the preceding one hundred and thirteen (113) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Austin delivered on 29 March 2018.
Associate:
Date: 29 March 2018
Key Legal Topics
Areas of Law
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Family Law
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Equity & Trusts
Legal Concepts
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Constructive Trust
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Costs
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Remedies
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Jurisdiction
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