DS & DS
[2002] FMCAfam 368
•8 November 2002
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| D S & D S | [2002] FMCAfam 368 |
| CHILDREN – Residence – best interests of child. PROPERTY SETTLEMENT – Contributions – no appearance by one party – wastage of assets. Family Law Act 1975, ss.68F(2), 75, 79, 117 Taylor v Taylor (1979) 143 CLR 1; B v B: Family Law Reform Act (1997) Lee Steere & Lee Steere (1985) FLC 91-626 |
| Applicant: | R M D S |
| Respondent: | K E D S |
| File No: | DNM 2627 of 2001 |
| Delivered on: | 8 November 2002 |
| Delivered at: | Darwin |
| Hearing Date: | 8 October 2002 |
| Judgment of: | Brown FM |
REPRESENTATION
| Counsel for the Applicant: | Ms Davis |
| Solicitors for the Applicant: | Davis Norman |
| Counsel for the Respondent: | No appearance |
ORDERS
That the child R J D S born 1 July, 1997 reside with the wife and husband on a week about basis and that each parent have responsibility for the child’s day to day care, welfare and development when the child is in their respective care.
That the parties share responsibility for the child’s long term care, welfare and development.
The child is to reside with the husband each Father’s Day from 9.00am to 6.00pm.
The child is to reside with the wife each Mother’s Day from 9.00am to 6.00pm.
On Christmas Day the child is to spend half of the day with each parent.
The husband is to have reasonable contact with the child on the husband’s birthday and on the child’s birthday. The wife is to have reasonable contact with the child on her birthday.
Each party is to notify the other immediately if the child becomes injured or seriously ill whilst in either of their care.
The parties are to keep each other informed of all matters pertaining to the health and education of the child.
That within 28 days of the date of these orders the wife do all acts and things and sign all necessary documents to transfer to the husband all of her right title and interest in the property situated at 135 P D, McMinns Lagoon.
That the husband shall indemnify the wife, against all payments and liability pursuant to the mortgage with ANZ bank and all rates, taxes and outgoings of or with respect to the real property of whatsoever nature and kind.
That within 28 days of the date of these orders:
(a)The husband and wife execute all deeds and instruments necessary to dissolve the Company “R Pty Ltd” (A.C.N. 071 903 181); and
(b)Following the dissolution of the said company, the husband shall be entitled to the sum of money standing to the Account of R Pty Ltd, presently in the Trust Account of the parties’ accountant.
(c)The husband execute all deeds and instruments necessary to transfer to the wife any interest that he may have in the business known as “H D B S” or its successor in title.
(d)That the wife shall indemnify and forever keep the husband indemnified in respect of all or any liability that has arisen or may arise in respect of the said business “H D B S” or its successor in title.
(e)That the wife shall be responsible for the following debts:
(i)Any debts owing to suppliers of the business “H D B S” or its successor in title whether such debts arose before or after the date of this order; and
(ii)Any liability to the Commissioner of Taxation arising out of the operation of the business “H D B S” or any successor in title
and shall indemnify the husband and the company and keep him indemnified from any liability in relation to these debts.
That unless otherwise specified in these orders and except for the purposes of enforcing the payment of any money under these orders:
(a)Each party be solely entitled to the exclusion of the other to all property (including choses in action) in the possession of such party as at the date of these orders;
(b)Each party hereby forgoes any claim they may have to any superannuation benefit or entitlement belonging to or earned by the other;
(c)All insurance policies are to become the sole property of the beneficiary named thereunder;
(d)Each party be solely liable and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
That in the event that the wife refuses, neglects or fails to comply with the provisions of these orders:
(i)The Federal Magistrate or any person appointed by him pursuant to the Family Law Act is hereby appointed to execute all deeds and documents in the name of the wife and do all acts and things necessary to give validity and operation to the said orders.
That a copy of these orders and the reasons for judgment herein be personally served on the wife.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT DARWIN |
DNM 2627 of 2001
| R M D S |
Applicant
And
| K E D S |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application by R M D S “the husband” for parenting orders in respect of one child R J D S born 1 July 1997. He also seeks orders in respect of the division of matrimonial property. The respondent to the proceedings is K E D S “the wife”. The husband and wife are R’s parents.
The parties began to live together in 1992. They were married in Darwin on 23 September 1995. They separated on 2 August, 2001.
The proceedings have a complicated history in the Family Court at Darwin and this Court. The husband commenced the proceedings in the Family Court on 29 August, 2001. The wife filed a response to the application on 26 September, 2001.
In his application the husband sought orders in general terms as follows:
1)That the child, R J D S, born 1 July 1997, reside with the applicant father and that he have responsibility for the day to day care, welfare and development of the said child.
2)That the parties have joint responsibility for the long term care, welfare and development of the said child.
3)That the mother have contact as may be agreed between the parties.
4)That the husband retain the family home situated at and known as 135 P D, McMinns Lagoon in the Northern Territory of Australia.
5)That the wife retain the business “H D B S”.
6)That the husband, R M D S shall indemnify the wife, K E D S against all payments and liability pursuant to the mortgage with ANZ (“home mortgage”) and all rates, taxes and outgoings of or with respect to the real property of whatsoever nature and kind.
7)That the wife, K E D S shall do all such acts and things and sign all such documents as may be required to transfer to the husband all of her right title and interest in the real property situated at and known as 135 P D, McMinns Lagoon in the Northern Territory of Australia.
8)(i) That on or before the expiration of 28 days from the date of
these Orders;
a) the husband and wife execute all deeds and instruments necessary to dissolve the company “R Pty Ltd” (ACN 071 903 181); and
b) the husband execute all deeds and instruments necessary to transfer to the wife all of his right title and interest in the business known as “H D B S”.
(i)That subject to paragraph 8 (iii) hereof as and from the date of such transfer as mentioned at paragraph 8 (b) hereof the wife, K E D S shall indemnify the husband, R M D S and forever thereafter keep him indemnified in respect of all or any liability of him in respect of the said business, being “H D B S” including any liability of the husband to the Commissioner of Taxation howsoever such liability arises.
(ii)That the wife shall be responsible for the following debts:
a)any debts owing to suppliers to the business “H D B S” whether such debts arise before or after the transfers referred to in paragraph 8 (i) (a) and (b) hereof; and
b)any liability to the Commissioner of Taxation for the years 2001/2002 arising out of the operation of the business “H D B S”,
and shall indemnify the husband and the company and keep indemnified from any liability for these mentioned debts or liabilities.
9)That pending completion of Order 8 hereof, the following provisions apply:
i)The wife shall continue to operate the business “H D B S” and shall personally meet:
a)all costs associated with the day to day operation of the business;
b)all payments to the Australian Taxation Office for the business as they fall due;
10)That unless otherwise specified in these orders and except for the purposes of enforcing the payment of any money due under these or any subsequent orders:
a)each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at this date;
b)each party hereby forgoes any claim they may have to any superannuation benefit belonging to or earned by the other;
c)all insurance policies to become the sole property of the beneficiary named thereunder;
d)each party be solely liable and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
11)That the husband shall within 28 days of the date of these orders sign all documents and do all acts and things necessary to ensure that ownership of the business name “H D B S” is transferred to the wife and of all chattel and equipment situated at the business premises and used in connection with the said business are transferred to the wife.
12)That in the event that the husband or the wife refuses, neglects or fails to comply with the provisions of these orders:
(i)the Registrar of the Family Court of Australia at Darwin is hereby appointed to execute all deeds and documents in the name of the husband/wife and do all acts and things necessary to give validity and operation to the said orders; and
(ii)the husband or wife in default is ordered to pay all reasonable costs incurred by the husband or wife for the purpose of enforcing these orders and proving his or her damages.
13)Further or other orders that this Honourable Court deem fit and appropriate.
In her response the wife sought orders as follows:
1)The children, R J D S born 1 July 1997 and T M C born 24 July 1989 live with the respondent mother.
2)That the mother have responsibility for all decisions concerning the child’s day to day care, welfare and development whilst the child is in her care with the father to have responsibility for all decisions concerning the child’s day to day care, welfare and development whilst the child is in the care of the father.
3)That the father have contact with the child R J D S born 1 July 1997 in the following terms:
a) every Friday from 4.00pm to Saturday 4.00pm;
b)For one half of the Northern Territory School Term Holidays being either the first half or the second half as agreed between the parties;
c)For one half of the Christmas School Holidays being either the first half or the second half as agreed between the parties save that in each year the mother has contact with the child from 5.00pm on Christmas Eve until 2.00pm on Christmas Day and the father have contact with the child from 2.00pm Christmas day until 5.00pm on Boxing Day;
d) At any other times as mutually agreed between the parties.
4)That the property situated at 135 P D McMinns Lagoon in the Northern Territory of Australia be sold and the proceeds of the sale be apportioned 65% to the mother and 35% to the father.
The wife did not seek any specific orders in respect of the b shop and as matters transpired it is not necessary that any orders should be made in respect of T.
On 28 September, 2001 O’Ryan, J made orders in respect of R as follows:
1)That until further order the child reside with the father for one week commencing 5 October 2001 and each alternate week thereafter and the child reside with the mother for the week commencing 28 September 2001 and each alternate week thereafter.
2)That until further order the child continue to be cared for by J C in accordance with the day care arrangements for this child that existed prior to 14 September 2001.
Arrangements for the care of R have proceeded on this basis since the orders were made. Ms C is his nanny.
On the 10 December, 2001 Jordan, J made orders in respect of a business formerly operated by the parties, the H D B S as follows:
1)That the wife and/or her agents in operating the business known as H D B S shall:
i)not obtain credit binding the husband without first obtaining his permission in writing.
ii)keep the husband indemnified against all payments and liabilities pursuant to the business which include but not exhaust the following debts of the business:
a)any debts owing to suppliers to the business H D B S;
b)all costs associated with the day to day operation of the business which includes employee wages;
c)all payments to the Australian Taxation Office for the business as and when they fall due;
d)sell or diminish the value of any goods/chattels of the business.
On 4 December, 2001 the proceedings were transferred to this Court.
The financial situation of the H D B S and in particular the financial affairs of a company R Pty Ltd of which both the husband and the wife are directors, is the central issue in this case. The wife has operated the business of the H D B S since the parties separated. It is the husband’s position that he has been excluded from the business and denied access to its business records.
On 4 February, 2001 orders were made fixing the matter for hearing on 2 and 3 May 2002. The husband pressed for an urgent hearing of the matter because of his concerns about the solvency of R Pty Ltd. It was also ordered that a family report be prepared in respect of issues pertaining to the parenting of R. The wife was represented by solicitors at this time.
On 15 February 2002, in anticipation of the final hearing, orders were made that the wife provide the financial records of R Pty Ltd to the company’s accountant, Mr Moyle in order that the company’s financial returns could be completed and so that the husband would be appraised of the financial health of the company and the associated business.
The family report in this matter was prepared by a psychologist, Ms Treya Derrington and was completed on 3 April, 2002. It was released to the parties on the following day.
On 30 April, 2002 the hearing dates of 2 and 3 May, 2002 were vacated. It was the husband’s position that there had not been adequate compliance by the wife with the orders of the Court in respect of the provision of the business records of the company to Mr Moyle. At that stage, the wife’s solicitors indicated that they were without instructions. On 10 May, 2002 the solicitors filed a Notice of Ceasing to Act.
On 21 May, 2002 the matter was listed for trial as a reserve matter before the Court on 8 August, 2002. The wife appeared on her own behalf on that occasion. Orders were also made in respect of the filing of material for the hearing and further orders were made in respect of the provision of records relating to R Pty Ltd by the wife to Mr Moyle.
The matter came on for hearing as ordered on 8 August, 2002 before Bryant, CFM. The husband appeared with the solicitor who had represented him throughout the proceedings to date. The wife appeared on her own behalf. She had not filed any affidavit material as ordered by the Court on 21 May, 2002. Nor had the husband. It was the husband’s position that the wife had not complied with the earlier Orders in respect of the provision by her of the business records of the company to Mr Moyle. As a result, on 8 August, 2002, Bryant CFM made these orders:
1. THAT the hearing date of this matter on 8 August 2002 is hereby vacated and the Application filed on 6 August 2001 be listed for final hearing as a reserve matter on 8 and 9 January 2003 NOTING that 2 days hearing time has been allowed and such time limit will not be exceeded without the leave of the Court.
2.THAT the time in which the parties have to comply with the Orders made by Federal Magistrate Brown on 21 May 2002 be extended to 9 September 2002.
3.THAT the Application filed on 6 August 2002 otherwise be listed for mention 10 September 2002 at 9:30am, and in the event that the wife has not complied with these orders (and subject to the husband’s compliance) the husband be at liberty proceed on an undefended basis to seek the orders in his application filed 6 August 2001.
The husband filed an affidavit in support of his application for final orders on 9 September, 2002. The wife has not complied with the Orders of Bryant, CFM. She has not filed any affidavit material as directed.
On 10 September, 2002 there was no appearance by or on behalf of the wife. On that date I made the following order:
1)There being no appearance by or on behalf of respondent wife the matter is fixed for final hearing on an undefended basis on 8 October 2002 at 2.15pm.
On 8 October, 2002 there was no appearance by or on behalf of the wife. She had not filed any affidavit material with the Court. Accordingly on that date, the husband’s application was dealt with on an undefended basis.
The Court has an obligation to ensure that the parties to proceedings have an opportunity to participate in the proceedings. Before a person can be adversely effected by a judicial order, he or she must be afforded an adequate opportunity to be heard (Taylor v Taylor (1979) 143 CLR 1). In this case, the mother did not appear and was not represented at the final hearing. She did not appear and did not file any affidavit material in support of her case. I am satisfied that she had notice that if she did not appear on 10 September, 2002 and failed to file any affidavit material by that date, it was highly probable that the husband would be given leave to proceed with his application on an undefended basis in her absence.
For reasons that are not known to the Court, the wife failed to appear on 10 September, 2002. The husband’s solicitor indicated that a sealed copy of her client’s affidavit filed on 9 September, 2002 had been forwarded to the wife by pre paid post to her last known address. On the basis of the evidence before me, I am satisfied that the wife has had the opportunity to attend and present argument, file material and address matters before the Court.
Pursuant to Rule 16.01 of the Federal Magistrates Court Rules:
“The Court may, at any stage in a proceeding on the application of a party, give any judgment or make any order even if the claim was not made in an originating process.”
On 8 October, 2002 the husband provided the Court with a minute of the final orders he sought in the matter. These were in different form to those sought in his application for final orders, chiefly in regard to the orders he sought in respect of R. He sought orders on a final basis in essentially the same terms as the current arrangement, that is, that the care of the child is shared between the parties on a week about basis. The orders the husband seeks are as follows:
(1)That the child R J D S born 1 July, 1997 reside with his mother and father on a week about basis and that each parent have responsibility for the child’s day to day care, welfare and development when the child is in their respective care.
(2)That the parties share responsibility for the child’s long term care, welfare and development.
(3)The child is to reside with the father each Father’s Day from 9.00am to 6.00pm.
(4)The child is to reside with the mother each Mother’s Day from 9.00am to 6.00pm.
(5)On Christmas Day the child is to spend half of the day with each parent.
(6)The father is to have reasonable contact with the child on the father’s birthday and on the child’s birthday. The mother is to have reasonable contact with the child on her birthday.
(7)Each party is to notify the other immediately if the child becomes injured or seriously ill whilst in either of their care.
(8)The parties are to keep each other informed of all matters pertaining to the health and education of the child.
(9)That within 28 days of the date of these Orders the wife do all acts and things and sign all necessary documents to transfer to the husband all of her right title and interest in the property situated at 135 P D, McMinns Lagoon.
(10)That the husband shall indemnify the wife against all payments and liability pursuant to the mortgage with ANZ bank and all rates, taxes and outgoings of or with respect to the real property whatsoever nature and kind.
(11)That within 28 days of the date of these Orders:
(a)the husband and wife execute all deeds and instruments necessary to dissolve the company “R Pty Ltd” (CAN 071 903 181); and
(b)following the dissolution of the said company, the husband shall be entitled to the sum of money standing to the account of R Pty Ltd, presently in the Trust Account of the parties accountant.
(c)The husband execute all deeds and instruments necessary to transfer to the wife any interest that he may have in the business known as “H D B S” or its successor in title.
(d)That the wife shall indemnify and forever keep the husband indemnified in respect of all or any liability that has arisen or may arise in respect of the said business “H D B S” or its successor in title.
(e)That the wife shall be responsible for the following debts:
(i)any debts owing to suppliers of the business “H D B S” or its successor in title whether such debts arose before or after the date of these Orders; and
(ii)any liability to the Commissioner of Taxation arising out of the operation of the business “H D B S” or any successor in title;
and shall indemnify the husband and the company and keep
him indemnified from any liability in relation to these debts.
(12)That unless otherwise specified in these Orders and except for the purposes of enforcing the payment of any money due under these Orders:
(a)each party be solely entitled to the exclusion of the other to all property (including choses-in-action) in the possession of such party as at the date of these orders;
(b)Each party hereby forgoes any claim they may have to any superannuation benefit or entitlement belonging to or earned by the other;
(c)All insurance policies are to become the sole property of the beneficiary named thereunder;
(d)Each party be solely liable and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
(13)That in the event that the wife refuses, neglects or fail to comply with the provisions of these Orders:
(i)the Federal Magistrate or any person appointed by him pursuant to the Family Law Act is hereby appointed to execute all deeds and documents in the name of the wife and do all acts and things necessary to give validity and operation to the said Orders.
(14)That the wife pay the husband’s legal costs in relation to this proceeding.
Essentially it is the husband’s position that the care of R should continue to be shared between the parties and that he should retain the former matrimonial home situate at 135 P D, McMinns Lagoon subject to the existing mortgage, and that the wife should retain the b shop and business and indemnify him against all debts related to the business. As indicated earlier, the financial situation of this business and its worth are the central issue in this case. Regrettably, due to the wife’s non participation in the proceedings, there is a paucity of evidence regarding these issues. However, it is the husband’s position that the worth of the business at the time the parties separated is at least comparable to the value of the assets that he will retain if the orders he seeks are made. It is the husband’s case that the wife has a significant addiction to amphetamines which she has acquired in the period prior to the parties separation and if the business has lost value since separation this is due to the wife’s neglect and imprudence and as a result, he should not bear the burden of any such loss.
The evidence
The husband relied on the following evidence:
i)affidavit sworn by him on 9 September 2001
ii)family report of Treya Derrington dated 31 March 2002.
At the hearing the husband gave additional oral evidence. Obviously this evidence was not subject to any cross-examination. Notwithstanding this limitation on the evidence, I formed the impression that the husband was a decent and hard working person. He is deeply shocked at what has happened in his life since the parties separated, particularly in respect of the H D B S.
The husband’s counsel very properly conceded that there were grave difficulties in this case in the Court ascribing proper values to a number of items of property that were in the possession of the wife at the time of the hearing and which had not been valued by the husband due to the wife’s lack of co-operation with the Court process. This was particularly the case in respect of the by business and its fittings and chattels.
Relevant facts
The husband was born on 9 September 1956 and is 46 years of age. The wife was born on 18 September 1965 and is 37 years of age. The parties began to live together sometime in 1992 and married in Darwin on 23 September 1995. The parties separated on 2 August 2001 when the husband returned from a period working in East Timor. At that time, the wife left the former matrimonial home at 135 P D, McMinns Lagoon. R remained with the husband until 14 September, 2001 when the wife collected him from his nanny, Ms C. This precipitated the interim proceedings which were dealt with by O’Ryan, J. on 28 September, 2001 and which resulted in the shared care arrangement which has persisted to the present time.
The wife has two children from an earlier relationship, namely S F C born 22 March, 1985 and T M C born 24 July, 1989. S has lived with the husband since the parties separated. T has lived with the wife.
Since the parties separated, the wife has formed a relationship with J C with whom she lives at Corroboree Park, about 85 kilometres from Darwin, with T and R in each alternate week. R has been attending M P Primary School since the start of this year. This is the school T also attends. There has been considerable tension between the parties regarding which school R should attend. The husband’s preference was for R to attend S F o A Primary School at Humpty Doo, which he attended the previous year, although he was not yet five. The mother preferred for him to attend the same school as T.
The Court was called upon to determine this vexed issue on an interim basis on 26 February 2002. On which occasion I determined that as R was already attending M P Primary School, it was appropriate that he continue to attend there until the final determination of the issues pertaining to him. In his evidence before me on 8 October, 2002, the husband indicated that he does not propose to change R’s enrolment from M P Primary School.
The wife is a b by trade. It seems that due to her expertise in this field that she was more involved in the day to day operation of the b shop than the husband. The husband has been involved in the trucking, transport and stevedoring industry for many years. He has a long connection with Perkins Shipping. As a result, since November 1999 he has been employed as operations manager for Perkins Shipping in East Timor. He has been earning up to $110,000.00 per annum in this position. Prior to that time he was a self-employed water carter. This business was operated under the name of R Transport and the husband owned the truck that was used in the business.
On 18 September, 2001 the wife applied to the Local Court at Darwin, pursuant to the Domestic Violence Act, seeking a restraining order against the husband. The husband did not contest the application and on that date the Local Court made the following orders:
Until further order of the Court, the defendant R M D S;
1)not approach or remain at any place where K D S is living, staying or working;
2)not approach K D S directly or indirectly;
3)not contact K D S directly or indirectly except by solicitor, family court counsellor or in accordance with the Family Court Orders relating to the child of the relationship;
4)not assault or threaten to assault K D S directly or indirectly;
5)not damage or threaten to damage property in the possession of K D S;
6)not act in an offensive or provocative manner towards K D S.
It is the husband’s position that this order has precluded him from having any involvement in the business and that, due to the failure of the wife to provide him with its financial records, he has no knowledge of its current position, although he suspects that it is in severe difficulties. In this regard, he has been served with a number of demands for payment from creditors of R Pty Ltd and also served with court summones in respect of debts allegedly owed by the company.
The husband has a negative regard for Mr C, whom he describes as an “habitual drug user”, with a “lengthy criminal history”. The husband also alleges that Mr C has in the past trafficked in illicit drugs. Although it has not been confirmed by any official records, the husband gave evidence that Mr C has been sentenced to a term of imprisonment of six months in respect of his breaking and entering a chemist shop in Humpty Doo and stealing a quantity of pharmaceutical drugs. It was obvious to me that there is a high level of mistrust and suspicion between the parties.
It was in this context that the family report of Ms Derrington was ordered.
Ms Derrington interviewed both parties, observed each of them with R; interviewed Ms C and the principals of both the M P Primary School and S F o A school. She also spoke with R himself at some length. The report was prepared between 8 and 22 March, 2002. Although Ms Derrington was not cross-examined about the contents of her report, it seemed to me to be well considered and thorough. By virtue of the position he has now adopted in respect of the parenting orders he seeks for R, it would seem that the husband accepts the recommendations that Ms Derrington has made.
In her report, Ms Derrington gave the following opinions as a result of her interviews and observations of R:
“R is an active, robust, buoyant child who appears to be open and loving and trusting in both parents’ company. He obviously loves his sister T very much. He appears to be a well loved child, which supports the expressions by both parents that he is doing well in the shared care situation.
He presented as a child with appropriate behaviour for his age, and a high level of activity. He indicated, by nodding, in response to a question from me that he understands that his parents are fighting about him.
Both the school principals and the carer, Mrs J C, indicated that R is stressed and fragile at times. This indicates that the child is likely to be experiencing the current conflict between the parents very deeply. The mother also said that R “gets very stressed at school”. Mr D S did not speak of any concern about R having any particular stress at school in my interview with him.”
Ms Derrington recommended in her report as follows:
“I would recommend that this child remain at M P School where he seems to be managing reasonably well under the current circumstances.”
In the summary and recommendation section of her report, Ms Derrington said as follows:
“This child is primarily attached to his mother and also very close to his father. His mother believes that a shared care arrangement is working well for R. The father wants to have the parental control because he is deeply distrustful of the mother and her partner.
I recommend that the child continue to be in a shared care arrangement. Overall, the child seems to be functioning adequately in this arrangement, in spite of the current situation where the conflict between the parents is likely to be contributing to increased emotional stress for the child.
If the decision is made to place the child in the father’s primary care, the child is likely to continue to be unduly insecure because his primary attachment to his mother is strong and would be compromised.
If the decision is made to place the child in the mother’s primary care, it is possible that the outcome would be positive for the child in that Mrs D S expressed unreserved acknowledgment of the importance of the father in R’s life. She is likely to continue to place high importance on the contact between R and his father.
With regard to the child’s schooling, as mentioned above, I recommend that the child remain at his present school because he is well cared for there, and he has daily contact with his sister T which is reassuring for him.”
The law relating to parenting orders
Residence, contact and specific issues orders are parenting orders arising in proceedings conducted under Part VII of the Family Law Act 1975. Section 60B sets out the object of Part VII and the principles which underlie those objects. They are subject to Section 65E in that in determining the outcome, the best interests if the child concerned are the paramount consideration (B v B: Family Law Reform Act (1997) FLC 92-755).
In deciding the residence and contact arrangements that will promote the best interests of the particular child, the Court must consider the various matters set out in Section 68F(2), to the extent that each is relevant to the particular case. The weight which is to be attached to any one consideration will depend on the circumstances of the individual case. The list is not intended to be exhausted. Both long term and short term prospects are relevant to the overall assessment.
Section 68 F(2) factors
Wishes
R is still very young, just over 5. There is no evidence of his wishes in this case. In any event, given his age this would not be a strongly determinative factor in this case.
The nature of the relationship of the child with each of the child’s parents and with other persons
The evidence of Ms Derrington is that R enjoys a close relationship with each of his parents, however he is primarily attached to his mother. On the basis of this evidence, I was concerned about the prospect of disrupting the relationship that R enjoys with his mother any further than it already has been. R also has a close relationship with his older sister T. He sees her on an almost daily basis at school and obviously on a more frequent basis when he is at his mother’s home during the weeks that he is living with her. It is clearly of the greatest importance that R maintains his relationship with both T and his parents and indeed with his older brother S. Although far from ideal, due to the obvious conflict between the parties, the current shared care arrangement does provide the opportunity for the continuation of these relationships. It is also important to note that Ms Derrington reported that the wife accepts that R is close to his father and in her (the wife’s) view the shared care arrangement is working well for R.
Likely effects of change
R has been living in the shared care arrangement since September of last year, a period slightly in excess of one year. This is also the period during which his parents have been separated. It is apparent that R is aware of the current level of conflict between his parents and is distressed by it. However, this is the arrangement under which he has been living for the past year. If orders were made in the terms that the husband currently seeks there would be no change in circumstances so far as R is concerned.
Practical difficulties associated with contact
The parties both live in the rural area of Darwin, although the wife lives several kilometres further away from Darwin along the Arnhem Highway. In the context of the present arrangement for R’s care, there are no practical difficulties in respect of contact. The parties live in reasonable proximity of one another and R has been able to be exchanged between them without difficulty. As I have already indicated, the wife told Ms Derrington that in her view the shared care arrangement was working adequately.
Capacity of each parent
The husband is critical of the wife’s abilities as a parent, particularly in respect of her use of illicit drugs and her regard to the irregularity of T’s attendance at school. It was Ms Derrington’s impression of the wife that she was a “concerned, caring and empathetic mother”. The mother denied being a drug addict to Ms Derrington.
In the circumstances of this case it is difficult to assess the truth of the husband’s assertion that the wife has a significant drug problem. In my view, the assessment of Ms Derrington is a significant matter in this case. She saw nothing untoward in the wife’s parenting of R or her capacity to provide for his emotional or intellectual needs.
My impression of the husband is that he is a caring and concerned parent. This was also Ms Derrington’s assessment of him. It is to the husband’s credit that he has moderated his position in the light of the recommendations contained in the family report. The wife also said to Ms Derrington that the husband was a good father. In the circumstances of the case, the most important factor seems to be that the parties each agree that the shared care arrangement should continue. This is certainly the husband’s position at this stage and was what the wife indicated was her position to Ms Derrington.
In these circumstances, my concerns regarding the very serious allegations raised by the husband are somewhat assuaged. I do not propose to change the current situation in respect of R which is apparently what both of the parties want.
The child’s background and other characteristics
I was not told that R has any special background or other characteristics that need to be taken into account.
The need to protect the child from any family violence
Although there is a domestic violence order in effect between the parties, this is not a case where either party raised issues regarding family violence and the need to protect R from it.
Conclusions
One of the matters which I am required to consider pursuant to Section 68F(2) is what order will be least likely to lead to the parties returning to Court to seek further orders in respect of the child concerned. In this case, due to the non attendance of the wife at Court, I have grave concerns about her lack of input into the proceedings. My concern is heightened by the very serious allegations of drug abuse that the husband has levelled against her. However, the current proceedings must be brought to a conclusion. Fortunately the wife did take part in the process which led to the production of the family report. As I have already indicated, it is apparently the position of the wife that the current shared care arrangement should continue. This is also the position that the husband has advocated. In these circumstances, I believe that, although the evidence before me is somewhat limited, that it does indicate that R’s best interests will be served by the current arrangement being continued on a final basis. For these reasons I propose to make orders on a final basis in respect of arrangements for the parenting of R in accordance with the minute of order prepared by the husband’s solicitor.
Relevant law in relation to the adjustment of property
Proceedings for the division of matrimonial property are determined under section 79 of the Family Law Act. The approach to the determination of an application under Section 79 is well established by authority (Lee Steere & Lee Steere (1985) FLC 91-626; Ferraro & Ferraro (1993) FLC 92-335; Clauson & Clauson (1995) FLC 92-595). The process ordinarily involves a multiple part procedure. Firstly, identifying the property liabilities and financial resources of the parties at the time of the hearing. Secondly, evaluating the contributions made by the parties as definded in section 79(4)(a) to (c). Thirdly, evaluating the matters contained in Section 75(2) insofar as they are relevant.
In determining what order the Court should make under section 79, the Court must be satisfied in all the circumstances that it is just and equitable to do so [section 79 (2)]. It is the justice and equity of the actual orders that the Court must consider (Russell and Russell (1999) FLC 92-877).
The assets and liabilities of the parties
The first step is to determine the extent and value of the property, liabilities and financial resources of the parties at the time of the hearing.
The wife has provided no evidence at the hearing in respect of the extent and value of the property currently in her possession or the liabilities that are associated with that property. In particular, she has not made available the financial records of R Pty Ltd or the H D B S to the husband to enable him to conduct a valuation of this business and the various chattels which it owns. Accordingly, the exercise of identifying the property of the parties in this case is a difficult one.
The major item of matrimonial property is the former matrimonial home situated at 135 P D, McMinns Lagoon, which the husband is currently occupying. This property is registered in the joint names of the parties. The husband has obtained a valuation which indicates that the property is currently worth $240,000.00. The property is subject to a mortgage in favour of the ANZ bank in the sum of $130,000.00.
It is the husband’s evidence that the former matrimonial home was equipped with furniture and other fittings valued at approximately $20,000.00. This furniture consisted of furniture, whitegoods and computers. However, following the making of the domestic violence order in September 2001 the wife and her partner broke into the P D property and removed all the furniture, whilst he was absent. It is the husband’s position that these items of property should be included in the parties’ list of assets at a value of $20,000.00 and allowance made that they have been taken by the wife. In the context of these undefended proceedings I accept the value of the furniture as given by the husband.
The value of the b shop business and the chattels associated with it is a more problematic issue. During the course of the parties’ marriage the b shop business was operated by a company known as R Pty Ltd. Both the husband and wife were directors of this company.
As has already been indicated, the wife is a qualified b. Accordingly, she played a greater role in the operation of the by than the husband did. During the marriage and at times when he was not working for Perkins Shipping, the husband operated a water cartage business. This business was also operated by R Pty Ltd. Its major asset was the truck that the husband used to cart water.
Since the restraining order of September 2001 the husband has not been able to gain to access to the business premises of the H D B S. I also accept the husband’s evidence that the wife has failed to provide the necessary financial information to him and the company’s accountant in order to establish what the takings of the b shop are and what are its creditors.
The major asset of the trucking aspect of the business was the husband’s truck. The husband gave evidence that the truck was sold for the sum of $60,000.00. The proceeds of the sale were paid to Mr Moyle, the company’s accountant, and from this sum $25,000.00 was paid to the ANZ bank in order to payout the business mortgage associated with R Pty Ltd and a further $6,000.00 was paid to Mr Moyle in accounting fees.
The husband also sold another car that was owned by R Pty Ltd in September 2002. This was a Toyota Landcruiser that was sold for $19,000.00. The proceeds of the sale of this car have also been placed in Mr Moyle’s trust account. Accordingly, at the present time the sum of approximately $48,000.00 is in this account.
The husband values the business of the b shop at $50,000.00. He takes this figure from the wife’s statement of financial circumstances filed on 26 September, 2001. He also asserts that the values of the fittings and equipment in the b shop is approximately $40,000.00. I have no way of knowing whether or not these are correct valuations. In his oral evidence, the husband indicated that the shop was fitted out with fridges, freezers, electrical saws and other by equipment, display cabinets, computerised tills and other equipment. His evidence was that the b shop was a fully operational business and that one of the refrigerators alone cost $35,000.00. In the circumstances of this case I am prepared to accept the valuations that the husband has given.
Whilst the husband was working in East Timor for Perkins, he was earning a large salary. He deposited a portion of this salary in a joint bank account. It is his position that the wife has withdrawn the sum of $15,000.00 from this account without consultation with him and that this sum should be added back to the parties’ list of assets and, when those items are divided between the parties, this sum of $15,000.00 taken into account as a credit for the wife.
It is the husband’s position that whilst he was working in East Timor the wife would order stock for sale in the b shop but would not pay for it. He is unaware what the takings of the shop were for this period and where they went, although he suspects that they were used to purchase amphetamines. Following the parties’ separation, he was served with a number of summons’ in respect of the business. The company’s largest creditor was the Austral Meat Company, the company that supplied the b shop with meat. In order to avoid R Pty Ltd being wound up, the husband agreed to using his tax refund of approximately $16,000.00 to pay off debts owed to Austral. It is his position that this sum also should be added back into the company’s list of assets and liabilities.
The wife has two cars in her possession, namely a Holden Commodore and a Nissan Pintara stationwagon which the husband values at $15,000.00.
Accordingly, it is the husband’s position that the items of matrimonial property that should be taken into account in this matter are as follows:
| Savings (withdrawn by the wife prior to separation) | $15,000.00 | $15, |
| Chattels (removed from the former matrimonial home by the wife) | $20,000.00 | |
| 135 P D, McMinns Lagoon | $240,000.00 | |
| Husband’s taxation return (used to pay company debts) | $16,000.00 | |
| H D B S | $50,000.00 | |
| B shop fittings and chattels | $40,000.00 | |
| Wife’s cars | $15,000.00 | |
| Proceeds of the sale of the truck and landcruiser (currently held in accountant’s trust account) | $48,000.00 | |
| Total: | $444,000.00 |
There is little doubt about the parties’ debts other than debts that the wife may have acquired since separation. The parties’ debt of which the husband is aware and which he acknowledges as joint debts consist of the mortgage to the ANZ bank in respect of the P D property, which currently stands at an amount of $130,000.00 and the amount owing to the ANZ bank in respect of the business loan relating to the operation of the b shop. It is the husband’s position that although this latter debt has been paid out in full, it should still be taken into account as a joint debt of the parties. I agree with this submission. Accordingly, the liabilities of the parties’ stand at an amount of $155,000.00. Accordingly the net value of the parties’ property available for distribution between them is $289,000.00.
The husband has deposed that he has a sum of $13,000.00 in accrued superannuation. The wife has not indicated what amount, if any of superannuation she has accumulated.
Assessing the contributions of the parties
In this regard I am once again confronted with the difficulty that I have heard evidence from only one party.
The relationship between the parties was one of approximately nine years. At the outset of the marriage, the husband owned a house at 8 A C, Humpty Doo. He sold this house in 1992 and received a net sum of $110,000.00. This sum was used to purchase a truck, which was used in the husband’s water carting business. This first truck was sold and a second truck was purchased with its proceeds. The second truck was also used in the water carting business. This second truck was sold by the husband in September 2002 to pay some of the b shop debts.
The wife brought into the marriage the sum of $30,000.00, which she received from a property settlement with her first husband. This sum was used in part to purchase the b shop. The b shop was purchased in 1995. It was an existing business and operated from rented premises. The purchase price of the business was about $20,000.00. In 1998 the parties borrowed the sum of $35,000.00 from the ANZ bank in order to upgrade the plant and equipment of the business.
It is the husband’s case that the wife was largely responsible for the running of the b shop business and that it was a profitable concern with an annual turnover of approximately $500,000.00. It is certainly his case that the business was paying its own way and provided a reasonable income for the wife until she began using amphetamines. It is the husband’s position that if properly run, the b shop would be a profitable concern and prior to the separation of the parties was a valuable entity.
It is his position that both prior to and since separation he has injected considerable funds into the b shop business. He estimates that he has put in a sum of approximately $30,000.00 to the business. He also paid the further sum of $25,000.00 to pay out the business loan to the ANZ Bank.
The former matrimonial home at P D was purchased in either 1996 or 1997. It is the husband’s position that he contributed the initial purchase monies and also paid the monthly mortgage payment of $1,960.00 either from the income he received as a water carter or from his employment with Perkins Shipping. It is his position that the wife made no direct payment towards the mortgage or any other direct financial contribution towards its acquisition.
It is the husband’s position that if he retains the former matrimonial home situated at P D and the wife retains the b shop business and its fittings that this will represent a just and equitable result in this case, as both parties will receive assets, that at least at the time of the parties separation, were of approximately equal value.
It is the husband’s position that if the wife retains, or is nominally regarded as having retained the following items:
·The husband’s savings withdrawn by the wife prior to separation;
·The chattels that were removed from the former matrimonial home;
·The husband’s taxation return;
·The H D B S and its fittings and chattels and her two cars.
that she will have received items to a value of $156,000.00. He will retain the former matrimonial home in which there is currently a net equity of $110,000.00. This division makes no regard for the money currently held in the accountant’s trust account (approximately $48,000.00). It is the husband’s position that as the sum of money in the accountant’s trust account is largely attributable to the sale of his truck and the landcruiser that he should retain these monies. This would give him assets of $158,000.00. This division will result in the parties each receiving assets of approximately equal value.
In the circumstances of this case, on the basis of the limited evidence I have heard, I accept that this division represents a proper assessment of the contributions of each of the parties during the marriage. I reach this conclusion on the basis that the husband’s initial contribution to the assets of the marriage was greater than the wife’s was; he made a greater direct financial contribution to the acquisition of the P D property and he made a significant contribution towards the acquisition of the assets of the B’s shop. It is also the case that when he was working for Perkins Shipping in East Timor he was earning a significant income.
Section 75(2) factors
The husband is 46 years of age. He is in good health. I have no reason to believe that he is not able to obtain reasonably well paid employment either with Perkins Shipping or as a self employed driver. The wife is 37 years of age. I have not heard any direct evidence in respect of the state of her health other than that the husband alleges that she has significant difficulties in respect of amphetamines addiction. However, prior to the parties’ separation she was a self employed b. She had access to all the necessary tools of her trade and the necessary equipment to earn a good living from the H D B S. Since the parties separated, the evidence of the husband is that the wife has transferred the business name of the H D B S into her name. She has also arranged for the lease of the b shop premises to be transferred from R Pty Ltd to her name alone. From this evidence, I believe that I can infer that it is the intention of the wife to retain the b shop and premises as her means of generating income. I accept the evidence of the husband that prior to the parties’ separation the b shop business was capable of generating a turnover of $500,000.00 per annum. I have no reason to believe that the shop would not produce a reasonable income for the wife, if properly administered.
Due to the orders I will make, the parties will share responsibility for R on a week about basis. Accordingly, it cannot be said that one of them will have a greater responsibility than the other for the care of R. Nor will there be any implications in respect of the payment of child support.
It must be the case that as a result of the husband’s evidence that there is now considerable doubt in respect of the value of the b shop business and its chattels. However, if there has been any wasting of this asset, I believe that, in the circumstances of this case, it is appropriate that the wife bear responsibility for this loss. It is also appropriate that the husband be quarantined from any additional losses that have been occasioned from the operation of the b’s shop since the parties separated.
The evidence is clear that she has sought to exclude the husband from the operation of the business since the parties separated. If there has been any great decline in the value of the business, in my view, this can only be attributable to the actions of the wife. This is a relevant consideration pursuant to section 75(2)(o) of the Act. In Kowaliw & Kowaliw (1981) FLC 91-092 Baker, J. said at page 76:645 the following:
“If a party has acted in the manner to which I have referred earlier, either by:
a)embarking upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
b)acting recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value,
then such conduct in my view and the economic consequences which flow therefrom are clearly matters to which the court may have regard pursuant to the provisions of s75 (2) (o).
If, on the other hand, losses of a financial kind have been suffered by the parties to a marriage in the course of pursuit of matrimonial objectives such as the gaining of income or the acquisition of assets, whether the liability of such losses be joint or several then, in my view, such losses should be shared by the parties (although not necessarily equally) and taken into account when altering property interests.”
In the circumstances of this case, I do not believe that there are any factors attributable to section 75(2) of the Act which require any additional adjustment of the property in favour of either of the parties.
Conclusions
The legislation confers on me a discretion to make orders that I consider are just and equitable in all of the circumstances, taking into account all relevant statutory considerations [section 79(2)]. In all the circumstances of this case, particularly the fact that the wife has not appeared at the final hearing of the matter and in particular bearing in mind that the husband will retain the former matrimonial home and the wife will retain a business that, at least at the time the parties separated, was a viable and profitable concern, it is in my view, just and equitable to make orders in terms of those sought by the husband.
The husband has sought an order that the wife pay his costs of this application. In the circumstances of this case I do not believe that it is appropriate that there should be any departure from the general rule as set out in section 117 that each party should bear their own costs.
For all these reasons the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding eighty-nine (89) paragraphs are a true copy of the reasons for judgment of Brown FM
Associate:
Date: 8 November 2002
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