ELFORD & ELFORD
[2015] FamCA 192
•24 March 2015
FAMILY COURT OF AUSTRALIA
| ELFORD & ELFORD | [2015] FamCA 192 |
| FAMILY LAW – CHILDREN – Best Interests – Where the child has meaningful relationships with both parents – Where there is need to protect the child from harm through subjection or exposure to family violence committed by the father – Where the effect upon the child of being caught between his parents’ intense conflict has been profound – Where the father lacks insight into the effect on the child on such conflict – Child’s views –Where the mother’s parenting capacity is superior – Where the preponderance of evidence militates in favour of the mother being the child’s primary residential parent – Child to live with the mother – Where an embargo on face-to-face contact between the child and the father for two months will be reparative for the child – Where after the initial embargo the child will be re-introduced to longer visits with the father FAMILY LAW –CHILDREN – Parental Responsibility – Where the presumption of equal shared parental responsibility does not apply because of the father’s past commission of family violence – Where the parties agreed it would be impossible for them to share parental responsibility – Mother to have sole parental responsibility FAMILY LAW –PROPERTY SETTLEMENT – Where the parties agreed their superannuation interests should be treated as property – Where the mother is insolvent – Where the father’s capital contributions were far superior to the mother’s – Where the parties’ overall contributions of income and labour were comparable – Where the mother’s future needs far exceed the father’s – Where it is just and equitable to make property settlement orders – Mother entitled to 40 per cent of the parties’ property and financial resources – Father entitled to 60 per cent |
| Crimes Act 1900 (NSW), s 61AA Family Law Act 1975 (Cth), ss 4, 4AB, 60B, 60CA, 60CC, 61B, 61DA, 62B, 64B, 65AA, 65DA, 65DAA, 65DAC, 65DAE, 65D, 75, 79, 117 |
| Bevan & Bevan [2013] FamCAFC 116 Marriage of Coghlan (2005) 33 Fam LR 414 Stanford v Stanford (2012) 247 CLR 108 |
| APPLICANT: | Ms Elford |
| RESPONDENT: | Mr Elford |
| INDEPENDENT CHILDREN’S LAWYER: | Krstina Wooi |
| FILE NUMBER: | NCC | 2896 | of | 2013 |
| DATE DELIVERED: | 24 March 2015 |
| PLACE DELIVERED: | Newcastle |
| PLACE HEARD: | Newcastle |
| JUDGMENT OF: | Austin J |
| HEARING DATE: | 3, 4, 5 & 12 March 2015 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr A Mooney |
| SOLICITOR FOR THE APPLICANT: | Berryman Partners |
| COUNSEL FOR THE RESPONDENT: | Mr M Graham |
| SOLICITOR FOR THE RESPONDENT: | Catherine Henry Partners |
| COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: | Mr S Rugendyke |
| SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: | Krstina Wooi |
Orders
Parenting Orders
All former orders relating to the child B (the child), born … 2004, are discharged.
The mother shall have sole parental responsibility for the child.
The child shall live with the mother.
Each of the parties shall take all reasonable steps to ensure that the child spends time with the father as follows, or as otherwise agreed:
(a)Each alternate Sunday between 9.00 am and 6.00 pm, commencing on Sunday 24 May 2015 and concluding on Sunday 16 August 2015; and
(b)Thereafter:
(i)
During school terms, each alternate weekend, from
9.00 am Saturday until 6.00 pm Sunday, commencing on Saturday 29 August 2015 and on the first Saturday of each new school term thereafter;
(ii)During school holidays, for the first week of the Winter school holidays and the last week of the Summer school holidays; and
(iii)On the child’s birthday from 5.00 pm until 8.00 pm each odd numbered year.
The parties are restrained from causing or permitting the child to spend time with the father prior to 9.00 am on 24 May 2015.
For the purposes of implementation of Orders 3 and 4 hereof, the school holidays are deemed to commence at 9.00 am on the first day following the last day of school term, the holidays are deemed to end at 6.00 pm on the last day preceding the day upon which the child is due to return to school, and the mid point is noon on the day halfway between those first and last days.
Orders 3 and 4 hereof are suspended during the following periods:
(a)From 3.00 pm on Christmas Eve until 3.00 pm on Boxing Day each year, during which period the child will spend time with the father from 3.00 pm on Christmas Day until 3.00 pm on Boxing Day, and with the mother from 3.00 pm on Christmas Eve until 3.00 pm on Christmas Day in odd numbered years, with the same arrangements in reverse in even numbered years; and
(b)Between 9.00 am and 6.00 pm on each Mother’s Day and Father’s Day, during which periods the child shall spend time with the mother on Mother’s Day and with the father on Father’s Day.
For the purposes of implementing the time spent by the child with the father, the mother shall cause the delivery and the father shall cause the collection of the child at the commencement of the time to be spent with the father in or about the foyer of the C Club at D Town, NSW, and the father shall cause the delivery and the mother shall cause the collection of the child at the conclusion of the time spent with the father at the same place.
Unless otherwise agreed, the parties shall take all reasonable steps to ensure that the child communicates by telephone with:
(a)The father each Wednesday, between 6.00 pm and 6.15 pm, and for that purpose the father shall telephone the child on the telephone number provided to him by the mother, and the mother shall ensure the child is able to receive the father’s calls on that number at that time; and
(b)The father, on the child’s birthdays in even numbered years, between 5.00 pm and 5.15 pm, and for that purpose the father shall telephone the child on the telephone number provided to him by the mother, and the mother shall ensure the child is able to receive the father’s calls on that number at that time.
(c)The mother each Wednesday when the child is spending time with the father pursuant to Order 4(b)(ii) hereof, between 6.00 pm and 6.15 pm, and for that purpose the mother shall telephone the child on the telephone number provided to her by the father, and the father shall ensure the child is able to receive the mother’s calls on that number at that time.
Within seven days hereof the mother shall cause the child to be delivered to the Director of Child Dispute Services at the Newcastle registry of the Family Court of Australia to have explained to him by the Family Consultant and Independent Children’s Lawyer the effect of these orders, and if deemed appropriate by the Family Consultant, the reasons for such orders.
Each party is restrained from denigrating the other in the presence or hearing of the child and from permitting the child to remain in the presence or hearing of another person denigrating the other.
The mother shall authorise and request the principal of any school attended by the child to provide to the father, at the father’s expense, copies of all school reports and school photograph order forms relating to the child.
Each party shall forthwith inform the other, and keep the other informed, in writing of their respective current residential address, landline telephone number, mobile telephone number, and email address.
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.
Any and all outstanding applications pursuant to Part VII of the Family Law Act are dismissed.
Property Settlement Orders
By way of alteration of property interests pursuant to Part VIII of the Family Law Act, the father shall pay to the mother the sum of $236,174 within two months of the date of these orders.
Subject to compliance with Order 17 hereof, and in consideration of that payment, the father is declared the sole legal and beneficial owner (as between the parties) of the real property and improvements comprising Folio Identifier …, being the property more commonly known as E Street, D Town, NSW (“the property”), and the mother shall do all such things and sign all such documents as may be necessary to transfer all her right, title, and interest in the property to the husband contemporaneously with her receipt of payment.
Subject to compliance with Order 18 hereof, and in consideration of that transfer, the father shall indemnify and keep indemnified the mother against all rates, taxes, statutory charges, mortgage repayments, and other outgoings and liabilities affecting or relating to the property.
In default of compliance with Order 17 hereof, the parties shall do all such acts and things and sign all such documents as may be necessary to list the property for sale by public auction on the following terms:
(a)The mother shall select the solicitors to act on the sale;
(b)
The property shall be listed by the parties for auction sale within
6 weeks of the date of default under Order 17 hereof;
(c)The real estate agent and auctioneer, in the event of disagreement between the parties, shall be the real estate agent and auctioneer chosen by ballot from the respective choices of the parties;
(d)The reserve price shall be as agreed between the parties, and in the event of disagreement between the parties, the reserve price nominated by the auctioneer;
(e)In the event the property is not sold by auction, or private negotiation within a further 7 days, then the property shall be submitted to successive auctions within further 6 weeks periods until sold, otherwise on the same terms and conditions as applied to the first auction;
(f)
The father, other than for the purpose of enabling compliance with
Order 17 hereof, is restrained from further charging, mortgaging, or otherwise encumbering the property;
(g)The father may occupy the property pending its sale pursuant to these orders, provided he meets all expenses incurred in respect of the property as and when those expenses fall due (including loan repayments, Council rates, water rates, and insurances), maintains the property in a reasonable state of repair, and facilitates inspection of the property by prospective purchasers.
Upon completion of the sale of the property pursuant to Order 20 hereof the solicitors acting for the parties on the sale shall disburse the proceeds of sale as follows:
(a)First, to pay all costs, commissions, and expenses of the sale and to pay any Council and water rates outstanding in respect of the property;
(b)Secondly, to discharge any encumbrance registered over or affecting the property;
(c)Thirdly, to pay to the mother 34.99 per cent of the balance remaining, together with interest calculated upon that sum over the period since the father’s default of Order 17 hereof; and
(d)Fourthly, to pay the balance to the father.
Subject to compliance with Order 17 hereof, the husband is declared the sole legal and beneficial owner (as between the parties) of his shareholding in F Pty Ltd.
Unless otherwise provided:
(a)Each party shall be the sole legal and beneficial owner (as between the parties) of all other assets in their respective possession as at the date of these orders, and for that purpose bank accounts are deemed to be in the possession of the person named as the account holder, investment accounts are deemed in the possession of the named investor, and superannuation entitlements are deemed in the possession of the superannuant; and
(b)Each party shall be solely liable for and shall indemnify the other against any and all debts attaching or relating to the property in their respective possession and any debts in their respective sole names.
In the event of either party refusing or neglecting to sign within 7 days of a written request to do so any document necessary to implement the terms of these orders the Registrar of the Family Court of Australia at Newcastle is empowered to execute such documents on behalf of the parties pursuant to s106A of the Family Law Act.
Any and all outstanding applications pursuant to Part VIII of the Family Law Act are dismissed.
Costs Orders
Costs are reserved for 28 days.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Elford & Elford has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT NEWCASTLE |
FILE NUMBER: NCC 2896 of 2013
| Ms Elford |
Applicant
And
| Mr Elford |
Respondent
And
| Independent Children’s Lawyer |
REASONS FOR JUDGMENT
Introduction
These proceedings concern disputes over the parties’ only child and the division of their property.
Although the ambit of each dispute was relatively narrow, the litigation was vitriolic and the evidence abundant. The parties seemed pre-occupied with the resolution of factual disputes, so history might be construed more consistently with their own perceptions, rather than with resolution of the legal issues that confronted them.
As for the parenting orders, the dispute was confined to whether the child should live with the parties for equal time or spend some lesser period of time with the father.
As for the property settlement orders, the parties’ proposals were only eventually seven per cent apart in circumstances where their total property interests were of very modest value.
History
The parties married in 2002 and finally separated in November 2012.
Their only child was born in 2004 and is now 10 years of age.
The mother has an adult daughter, aged 20 years, from a prior relationship. She lived with the parties for all but the last few months of their relationship.
Following the parties’ separation in November 2012, the mother and the child vacated the former matrimonial home and moved into alternate accommodation. The father remained in occupation of the former matrimonial home, which was rented from the maternal grandmother.
The father was evicted from the former matrimonial home in April 2013 following litigation between him and maternal grandmother over his occupation of and financial claim upon the property.
The father owned the parcel of real property adjoining the former matrimonial home, which property comprised two holiday apartments. The parties rented the two apartments for short term holiday vacations, which business was called “G Pty Ltd” (“the business”). The father took sole control of the business upon separation and, upon his eviction from the former matrimonial home, he began occupation of one of the holiday apartments.
The father remains in occupation of one holiday apartment, while the mother and child live with the maternal grandmother. The residences of both parties are in relatively close proximity in the H Town locality.
Following the parties’ separation, the child spent large amounts of time with the father by agreement between the parties.
In January 2013 the parties agreed upon an arrangement under which the child would live with them for equal time. However, only a month later in February 2013, the mother formed the view that such an arrangement was unsuitable for the child and, by agreement, the arrangement was varied so that the child lived with the mother and spent substantial amounts of time with the father. That arrangement remained in place for the next year, until after these proceedings were commenced and interim parenting orders were made.
The proceedings were commenced by the mother in November 2013 in the Federal Circuit Court. She sought both parenting and property settlement orders.
Interim orders were made in February 2014, which essentially provided for the child to live with the parties for equal time on weekly rotations. Those orders did not align with either party’s proposal, as both parties sought orders for the child to live with them and to spend substantial and significant time with the other.[1]
[1] Initiating Application filed 25/11/13; Response filed 28/1/14
A month later, in March 2014, the proceedings were transferred to this Court. The mother brought an application for variation of the interim parenting orders made in February 2014, but the mother’s Application and the father’s Response were both dismissed in July 2014. The interim orders made in February 2014 therefore prevailed until final hearing.
A Family Report was procured and, upon its release to the parties, the proceedings were fixed for final hearing in March 2015.
The evidence
The mother relied upon:
(a)Her affidavit filed on 27 January 2015;
(b)Her financial statement filed on 3 February 2015; and
(c)The affidavit of her adult daughter, Ms I, filed on 27 January 2015.
The father relied upon:
(a)His affidavit filed on 27 January 2015;
(b)His financial statement filed on 27 January 2015;
(c)The affidavit of Ms J filed on 10 February 2015; and
(d)The affidavit of Ms K filed on 10 February 2015.
The parties and the Independent Children’s Lawyer also relied upon the Family Report dated 12 September 2014.
Parenting proceedings
Legal principles
Orders in respect of children are regulated under Part VII of the Family Law Act (“the Act”). The Act defines the meaning of a “parenting order” (s 64B).
When invited to make a parenting order, the Court is enjoined to bear in mind both the objects of the legislation and the principles which underpin those objects (s 60B) in determining the nature of the parenting orders which ought properly be made (s 65D).
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 with precision the criteria which the Court must contemplate in arriving at a conclusion as to what is in the best interests of the child (s 60CC).
The Court is required to apply 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 equal 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 best interests of the child for the parents to have equal shared parental responsibility for the child (s 61DA(4)). The presumption says nothing about the amount of time the child should live or spend time 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, either presumptively or otherwise, 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 Court’s discretion is at large in the determination of the parenting orders warranted, though the discretion must still be exercised in the context of the child’s best interests being the paramount consideration.
The parenting proposals
The parties agreed that parental responsibility for the child should be allocated to one of them exclusively. The Independent Children’s Lawyer agreed.
The disagreement was over the child’s living arrangements.
The mother initially proposed that the child should live with her and spend some time with the father each alternate weekend and during school holidays. Her proposal, set out in her Amended Initiating Application filed on
22 October 2014, coincided with the recommendations of the Family Consultant within the Family Report. However, the Family Consultant revised her recommendations, which were reduced to a written minute and tendered during her cross-examination.[2] The mother and Independent Children’s Lawyer both adopted the revised recommendations as their proposal. It entailed an initial embargo upon any face-to-face interaction between the father and child.
[2] Exhibit F5
The father proposed the child should live with the parties for equal time, but on fortnightly instead of weekly rotations. The alternate proposal for the child to live primarily with him and to spend time with the mother, contained within his Response filed on 28 January 2014 and more recently deposed in his affidavit,[3] was ostensibly abandoned, but in cross-examination the father admitted that regime was really his preferred outcome.
[3] Father’s affidavit, paras 222-227
Best interests – primary considerations
The parties acknowledged the child has meaningful relationships with both of them from which he does, and should continue to, derive much benefit. Consequently, there was no controversy over the application of s 60CC(2)(a) of the Act.
The focus of the parenting proceedings was upon the risk of harm each party alleged the other posed to the child, which at least in part had implications under s 60CC(2)(b) of the Act.
The mother alleged the father was an overbearing bully who perpetrated family violence throughout their relationship and after their separation. She contended the father would continue to expose the child to family violence, thereby causing him psychological harm.
The mother also contended the father modelled socially unacceptable behaviour, which would eventually stunt the child’s emotional maturity, but that is an issue more properly considered under s 60CC(3) of the Act.
The father contended the mother engaged in behaviour that aligned the child with her and tended to undermine the child’s relationship with him, which would cause psychological detriment to the child. Similarly, that is an issue more properly considered under s 60CC(3) of the Act.
The parties’ evidence about the past occurrence of family violence was largely irreconcilable, but it is convenient to initially address the small portion of evidence upon which there was commonality.
In about August 2012, the father argued with Ms I in the kitchen of the former matrimonial home in the presence of both the mother and the child. During the argument, Ms I pushed the father away from her to give herself space and the father responded by slapping her face. The father admitted that incident occurred.[4]
[4] Father’s affidavit, paras 148, 211; Family Report, paras 12, 102, 104
The father’s striking of Ms I was undeniably an assault. She was a 17 year old adolescent and he was a grown man. Even though she first pushed him away from her, he was not acting in self-defence because there was no threat he needed to avert. Nor was striking a teenager on the face a form of corporal punishment legitimised by law (s 61AA Crimes Act 1900 (NSW)). He “lost his temper and retaliated”, as he told the Family Consultant, because he was “provoked”, as he said in cross-examination. As an assault, it was also recognised by the Act as both “abuse” (s 4(1)) and “family violence” (s 4AB).
Both the mother[5] and Ms I[6] gave much more graphic explanations of the event than the father, which conveyed a much more heated and frightening encounter than the father’s version. They additionally asserted the father pushed the mother backwards over a chair, pushed Ms I into the kitchen sink causing her to strike her back, and glasses were smashed.
[5] Mother’s affidavit, para 133
[6] Affidavit of Ms I, paras 31-37
The mother and Ms I were both cross-examined about the incident and both gave convincing evidence about it. Despite her obvious timidity, the mother tenaciously stood by the accuracy of her account and refuted any suggestion of exaggeration. Although she did admit to exaggeration of an unrelated incident (she estimated the duration of the father’s enragement during another argument at two hours,[7] but conceded it was not that long and only seemed to last a long time), her willingness to make an obvious concession only served to galvanise the reliability of her evidence about the incident in the kitchen. Ms I was attentive and measured in her cross-examination and she too credibly endorsed her evidence in chief in all respects.
[7] Mother’s affidavit, para 132
By comparison, the father’s evidence was much less impressive. Generally, it was difficult to extract from him direct answers to direct questions and he tended to add superfluous detail that was unresponsive to the question in an apparent attempt to justify himself. The Family Consultant found the father a little difficult to engage[8] and he presented in a similar way when giving evidence. Interrogation in Court and by professionals like Family Consultants is almost always stressful and unnatural, but all litigants have to endure the same experience.
[8] Family Report, para 90
At least in respect of the incident in the kitchen in August 2012, I accept the evidence of the mother and Ms I in preference to the evidence of the father. I find the incident probably occurred as they alleged. The father perpetrated family violence upon both the mother and Ms I in the presence of the child. In fact, the father expressly instructed the child to stay put and observe the incident,[9] so he was exposed to the father’s family violence.
[9] Affidavit of Ms I, para 33
Aside from the incident in the kitchen in about August 2012, the father admitted the parties occasionally argued and pushed one another and, from time to time, he would “take [the mother] by the wrist and forcefully put her in the bedroom because she wouldn’t be reasonable”.[10] The father disputed his use of the words “grabbed”, “dragged”, and “forcefully” when discussing the issue with the Family Consultant,[11] but otherwise accepted the accuracy of his admission about pushing the mother and shutting her in the bedroom. He seemed not to appreciate that his treatment of the mother in that fashion, imposing his will upon her as if she was being admonished like a child, was controlling, demeaning and humiliating. Both the mother[12] and Ms I[13] perceived such behaviour in that way. So, presumably, did the child because the father admitted he was exposed to it[14] and the child gave a consistent account to his counsellor in May 2014.[15]
[10] Family Report, paras 46, 103; Father’s affidavit, paras 92, 216(i)
[11] Father’s affidavit, paras 216(i), 216(t)
[12] Mother’s affidavit, paras 117, 128
[13] Affidavit of Ms I, para 24
[14] Family Report, para 105
[15] Exhibit ICL3
The mother additionally deposed to a much earlier incident of family violence around Christmas 2005.[16] She alleged she was repeatedly slapped by the father and pinned to the ground, which assault only ceased when a neighbour interceded and yelled at the father to desist. The child was at home at the time that incident occurred. When the mother was cross-examined about the incident, she said she was “beaten” by the father in a “frenzy” and her demeanour was commensurate with her vivid recollection of such a frightening event. She said she had since tried to locate the neighbour to give evidence in these proceedings, but was told the neighbour had moved away. The father admitted an argument occurred, but denied any physical altercation. The mother’s account was more convincing.
[16] Mother’s affidavit, para 126
Besides those events upon which the mother and Ms I gave specific evidence, their evidence was really a collection of conclusions that merely represented their honest perception about the father’s behaviour, which they perceived to be domineering and controlling. The mother told the Family Consultant she found it exhausting walking on eggshells whenever the father was present.[17] The mother said of the father in evidence:[18]
During our marriage [the father] was highly skilled at indoctrinating, controlling and intimidating the children and myself.
[17] Family Report, para 67
[18] Mother’s affidavit, para 122
The father’s perception could hardly have been more different. He deposed:[19]
[The mother] and I had a close, loving and happy relationship until her [surgery in February 2012].
[19] Father’s affidavit, para 99
Save for his admissions of slapping Ms I in August 2012, pushing the mother, and occasionally forcibly shutting the mother in a room, the father flatly denied committing any family violence at all. He made that denial to the Family Consultant and in evidence.[20]
[20] Father’s affidavit, para 146; Family Report, paras 15, 46, 103
The father did, however, make other concessions in cross-examination about his past behaviour. He said he did “rant and rave” at the mother because she was “extremely frustrating”, which happened quite often in the final year of their relationship. He also admitted getting “frustrated, annoyed, and angry”. The Family Consultant concluded the father tended to minimise the parental conflict and explain his behaviour as merely responsive to provocation.[21] He attempted to justify himself in much the same way under cross-examination.
[21] Family Report, paras 46, 136(b)
Although the father denied it, I accept he occasionally said very hurtful things to Ms I like:
I can’t expect great things from you because you don’t have my blood.[22]
It is lucky I don’t rape you because that is what most step-dads do.[23]
[22] Affidavit of Ms I, para 30
[23] Mother’s affidavit, para 131
The parties’ perceptions about the volatility in their relationship were very different, but that did not necessarily render one perception or the other untruthful. I accept the father probably does genuinely believe that, save for few exceptions that he considers relatively insignificant, he was not a violent person. But that perception springs from a belief that violence is manifest only in physical altercations. It is not. The expansive definition of “family violence” (s 4AB) now makes that plain.
The Family Consultant formed the view that the father engaged in family violence, which was behaviour of a coercive nature designed to induce the mother’s fear and submission.[24]
[24] Family Report, paras 134-137
The Family Consultant also formed the view that, without purporting to diagnose the father with the condition of Narcissistic Personality Disorder, he demonstrates personality traits consistent with such a condition.[25]
[25] Family Report, paras 139-141
The father criticised the Family Consultant for her conclusions, apparently because she relied upon the versions of past events given by the mother and Ms I, which she undoubtedly did in part. That, however, was not a valid criticism. The Family Consultant said she formed her views in reliance upon other considerations as well, including the father’s statements, the contents of documents produced on subpoena, and her own observations of the parties. Even if the Family Consultant had exclusively relied upon the mother’s version of past events, it proved at trial to be a more reliable version than the one offered by the father.
In any event, as the Family Consultant said in cross-examination, it is unnecessary to label the father with any psychological condition. The important consideration is the manner in which he behaves. Any diagnosis could only serve to explain why the father might act in that particular way.
It is, of course, quite unnecessary to determine all factual conflicts between the parties. It is also unnecessary to determine the validity of every opinion offered by the Family Consultant.
Some basal facts are incontrovertible. The father certainly perpetrated family violence. He did so when he assaulted Ms I. He also did so on the occasions when he forcibly shut the mother in rooms. Otherwise, in all probability, the family violence committed by the father was not as pervasive as the mother perceives nor as trivial as the father perceives.
Regrettably, despite the passage of well over two years since the parties’ separation, their conflict is as rife as ever. There is an existent need to protect the child from harm he would suffer through subjection or exposure to family violence committed by the father. The risk of such harm can be attenuated by the child spending less than equal time with the father and by minimising the occasions upon which it would be necessary for the parties to be in one another’s physical presence.
The parenting dispute, however, became much more about the parties’ disparate parenting styles and capacities than the past occurrence of family violence.
Best interests – additional considerations
Both parties should feel acute embarrassment about the manner in which they have used the child as a pawn in their mutual vendetta. On occasions, both parties retained the child and refused him the opportunity to spend time and communicate with the other.[26] They also both made important decisions about his care and upbringing without recourse to the other.
[26] Family Report, para 33
The effect upon the child of being caught between his parents’ intense conflict has been profound. He is “very sad” and “very anxious”, which has caused the Family Consultant “serious concerns” for the past year.[27]
[27] Family Report, para 37
The child reported to the father that the mother denigrates him in the child’s presence, for example, by calling the father a “prick”.[28] Perhaps the child’s representations to the father about the mother were false, but comments of that ilk would be consistent with the mother’s adverse feelings towards the father. She thinks he is psychologically unwell and a vindictive bully. Even if the mother did not openly denigrate the father in the child’s presence, the mother conceded the child was well aware of her feelings about the father. She acknowledged the child was aware of the high parental conflict and conscious the parties wanted quite different residential outcomes for him. Inferentially, the mother conceded she had not been able to shield the child from the parental animosity. She admitted she needed to show the father more respect.
[28] Family Report, para 97; Father’s affidavit, para 160
According to the Family Consultant, at least the mother now demonstrates insight into how the parties’ behaviour has been problematic for the child, whereas the father still lacks such insight.[29] That opinion seems correct because, somewhat surprisingly, the father maintains the child’s resilience has enabled him to cope well with the changes within his family and be unaffected by the conflict.[30] The father admitted the child was “dumbfounded” by the parental conflict to which he was exposed, but seemed to think his torpid reaction was benign acceptance of the situation,[31] rather than witless anxiety.
[29] Family Report, paras 52, 138
[30] Family Report, paras 95, 109
[31] Family Report, para 108
The father’s lack of insight is also demonstrated by his apparent willingness, perhaps even enthusiasm, to accept every word uttered by the child as truthful and correct. The father apparently believed the child was speaking truthfully when the child reported his belief to the father that the mother and maternal grandmother “hated” him.[32] The father even believed the child when he reported being kicked in the ribs by the maternal grandmother while he was being pinned on the ground by the mother. The father reported that complaint to the police.[33] When challenged in cross-examination about the improbability of the child’s report, the father simply retorted “my son is not a liar”. The father’s belief in the truth of the child’s report is surprising since he admits the maternal grandmother is hardly in physical condition to act as the child said. She is in “exceedingly poor” health and virtually on her “deathbed”.[34] The father noted the child made other reports of his physical abuse by the mother to his counsellors,[35] which he submitted should also be accepted by the Court as truthful and accurate.
[32] Father’s affidavit, para 162
[33] Father’s affidavit, paras 220-221
[34] Family Report, para 115
[35] Exhibits F4, F6
The foolishness of the father’s position is patent. He purports to believe in the truth of the child’s reports about being hated and assaulted by the mother and maternal grandmother, but yet he maintained his proposal for the child to live with the mother for equal time. A sensible parent would not voluntarily subject his child to hatred and abuse, so either the father does not truly believe the child’s reports or he is an incompetent parent. The most likely explanation is he does not truly believe the child’s reports, which means he acted foolishly by reporting the assault allegation to police when he knew the investigation would involve the child having to repeat the false allegation to police and his request for the Court to accept such allegations as correct was disingenuous.
The evidence suggests the father has denigrated the mother in the child’s presence and involved him in the litigation. Although such evidence only comprises the mother’s allegations of the child’s representations, she was not challenged about their accuracy. The representations sound plausible. They are consistent with the father’s feelings and do not seem readily consistent with fabrication by the child. The child reported the father told him the mother frustrated interaction between them and was depriving them of a home.[36]
[36] Mother’s affidavit, para 148
Worse still, the child reported the father revealed to him he “cries a lot” when the child is not with him.[37] The child also told his counsellor in May 2014 that the father told him he would “shrivel up and die” if the child went to live with the mother.[38] Such comments must have implied to the child the father is barely able to contain his despair when the child is absent and are tantamount to his emotional blackmail, as they are most probably designed to induce some level of guilt in the child about not residing permanently with him. There are numerous other examples of the father’s behaviour which suggest he demands emotional loyalty from the child.
[37] Mother’s affidavit, para 149
[38] Exhibit ICL3
Shortly before their final separation, the father began attending upon a counsellor at the mother’s request. The father found the counselling useful and continued to consult the counsellor for about two years.[39] After separation, the father took the child to two of those counselling sessions. The father conceded the child was in the same room and could have overheard his conversation with the counsellor, even though he expected the child to be engaged in his own activities.[40] In those two sessions the father spoke critically of the mother and maternal grandmother. More likely than not, the child would have been exposed to that denigration, just as the Family Consultant imputed. The father’s behaviour tended to make the child feel as though he needed to choose sides between his parents. Either the father intended that outcome or he was remarkably naïve.[41]
[39] Father’s affidavit, para 95
[40] Father’s affidavit, para 216(g)
[41] Family Report, paras 22-25; Mother’s affidavit, para 147
When the parties were due to be divorced, the father took the child to Court. The father knew the mother would be present, but the child did not. The inevitable meeting between the mother and child at Court could only possibly result in their mutual embarrassment, which is precisely what ensued. The father allowed them only a transient greeting and the child would most likely have felt the need to demonstrate loyalty to the father, since he was in the father’s care that day.[42]
[42] Family Report, para 35; Mother’s affidavit, paras 145-146
Even when the father conferred with the Family Consultant as recently as September 2014, instead of playing casually with the child, the father took the child by the hand and earnestly explained in his presence to the Family Consultant how much he loved the child, how close they were, and how much the child wanted to live with him. When the child was released from such confinement the father insisted on a protracted and tactile farewell.[43]
[43] Family Report, para 133
The child now feels he does not even have the father’s permission to greet the mother if he and the father see her in the street.[44]
[44] Mother’s affidavit, para 70
The father has been vindictive towards the mother and maternal grandmother on numerous occasions since separation, which reflects poorly upon his attitude and his parenting capacity.
He immediately changed the locks on the D Town property, thereby preventing her further employment in the business conducted upon it, and terminated her wage payments.[45] There was no obvious impediment to the parties’ continued joint conduct of the business, since their duties in the business were separate and distinct. The mother was thereby left virtually destitute and reliant upon welfare and the generosity of her family.
[45] Family Report, para 27
When the father was eventually evicted from the former matrimonial home by the maternal grandmother he took revenge by concealing decomposing seafood around the house.[46] The father strenuously denied it,[47] but I reject his denials as false. Nobody had a motive for such a prank besides the father. He was angered by his loss of the litigation against the maternal grandmother and exchanged text messages with his brother about how, upon his eviction, he could “trash [the house] as long as not maliciously”.[48]
[46] Family Report, para 30; Mother’s affidavit, para 13
[47] Family Report, para 114
[48] Mother’s affidavit, para 14, Annexure A
The maternal grandmother made an insurance claim and a complaint to the police. Despite the father’s claims to the contrary, it is unlikely the maternal grandmother fabricated the entire incident, made a false report to police, and made a fraudulent claim upon her insurer.
The Family Consultant, who presumed the father was responsible for the prank, concluded it was fulfilment of a “revenge fantasy”, which would be consistent with his violent tendencies. That was not merely idle speculation, because the father once admitted to his counsellor in 2013 that he had fantasised about driving a bulldozer through the D Town property as “sweet revenge”.[49]
[49] Family Report, para 134(a); Exhibit M3
The Independent Children’s Lawyer even suggested to the father in cross-examination that his decision to move into the adjacent D Town property upon his eviction from the former matrimonial home was a vengeful decision. Although the father denied it, the inference is open. The father paid rent of $240 per week to the maternal grandmother, which he insisted was market rent, yet instead of then renting a comparable home for a comparable rent (approximating $12,000 per annum), he decided to occupy one of the two apartments he owned next door, which immediately reduced his annual business income by some $50,000. The decision was certainly not a wise commercial one and was inconsistent with his asserted “substantial acumen” in real estate.[50] Such a decision was, however, consistent with an inference of financial revenge.
[50] Father’s affidavit, para 37
The Family Consultant said the father holds negative views about the mother’s parenting skills and personal attributes, which he shares openly with others.[51] Such propensity was on display during the final hearing. During cross-examination, the father remarked about the mother, often gratuitously and not in obvious response to a question:
[The mother] does benefit from a bit of guidance and help.
Her life improved after I came along.
[The mother’s] capabilities are limited. I had no great expectations of her.
[51] Family Report, para 135(d)
The father’s antipathy towards the mother has seemingly caused his loss of perspective. He said in cross-examination that the mother’s original proposal for the child to live with her and only spend “substantial and significant time” with him, as set out in her Application filed in November 2013, represented an attempt by her to “remove [him] from [the child’s] life”. Her proposal could not reasonably be construed in that way, but regardless, his perception was astonishing because his own proposal, as set out in his Response filed in January 2014, was a mirror-image of the mother’s. He criticised her for making exactly the same proposal as he did in reverse.
The father even instructed his counsel to challenge the mother in cross-examination about the validity of her diagnosis with cancer in 2012. Why he did so remains unknown, because it had nothing to do with the case at hand. The most probable explanation was his bitterness towards her. It was beyond doubt the mother had a hysterectomy in early 2012. Even though it is inconceivable a woman would submit to such radical surgery without very good reason and only in reliance upon expert advice, it was put to the mother she had no cancer diagnosis at all. The mother quizzically rejected the suggestion. The father was later challenged in cross-examination about his motive for such a pointless attack on the mother. His glib response was that he had not heard any doctor give her a diagnosis of “irrevocable cancer”, though he conceded he did not attend every medical appointment with her. Amazingly, he admitted the mother honestly believed she was diagnosed with cancer, which exposed his criticism of the mother as a liar to be a pointless charade.
The Family Consultant said in cross-examination the child was “one of the most stressed children I have ever seen”. She regarded the parental conflict as a significant contributory factor in the child’s distress.
The mother told the Family Consultant and gave evidence about how the child reacts upon his return to her from the father. Sometimes he is “very angry”, “out of control”, and refers to her as “woman” in a derogatory way.[52] Other times he is quiet and anxious.[53] She was not challenged about the accuracy of that evidence.
[52] Family Report, para 63
[53] Mother’s affidavit, paras 23, 105
His behaviour at school has been wanting in some respects also. Despite his satisfactory school reports,[54] he has engaged in belligerent conflict with teachers and other students, about which the father has felt the need to chastise him.[55] The Family Consultant said that there was a real danger the child was mirroring the father’s behaviour, which was characterised by arrogance and a sense of entitlement.[56]
[54] Exhibits F2, F3
[55] Family Report, para 110; Exhibit F6
[56] Family Report, paras 140, 146
The child has expressed his views to the Family Consultant, but there are reasons to regard those views with caution. First, he is young and does not have sufficient maturity to understand the implications of his stated views. Secondly, his stated views have not been consistent. Thirdly, the manner of his interaction with the father suggests he has deliberately chosen to express views that he perceives to be consistent with the father’s. Fourthly, both parents doubt the sincerity of his expressed views.
There is little need to elaborate the first consideration. The child is still only 10 years of age.
When the child spoke with the Family Consultant, he said the equal time arrangement on weekly rotations had worked well, he enjoyed it, and that routine should be retained.[57] He then volunteered that an equal time arrangement on fortnightly rotations would be even better.[58] It seems more than coincidental that he would express a preference for a regime identical to that proposed by the father in the proceedings immediately after having expressed satisfaction with the existing arrangement.
[57] Family Report, paras 120-121, 125
[58] Family Report, para 127
Notwithstanding the child’s apparent satisfaction with an equal time regime, the father informed the Family Consultant that the child told him his preference was to live primarily with the father.[59]
[59] Family Report, para 91
The father boldly asserted in cross-examination that he had always regarded an equal time living arrangement as best for the child, but that was not correct. He filed a Response in January 2014 proposing that the child live primarily with him. He also filed an affidavit in January 2015 in which he deposed that he believed the child’s best interests would be served by living primarily with him.[60]
[60] Father’s affidavit, paras 222-225
During cross-examination the father said that “in his heart-of-hearts” he wanted the child to live primarily with him and, additionally, he also thought that was the child’s dearest desire. The mother also said in cross-examination she did not believe the child genuinely wanted to continue with an equal time regime. She thought he was pressured by the father to say he did.
Two inferences necessarily flow from that evidence. First, the parties do not believe the truth of the child’s representations to the Family Consultant about wanting the equal time arrangement perpetuated. Secondly, it is quite a remote prospect that any permanent equal time arrangement will solve the family’s problems, when neither the father nor mother want it and neither believes the child really wants it. The regime will not work if it is rejected by all of them as unworkable.
The evidence suggests the child should live primarily with one party. His relationships with both parties are loving and important and both are capable of caring for him as a primary residential parent. The real question is which party is most suited to the task. The critical comments made by the child to the Family Consultant and his counsellor about the mother should be disregarded,[61] since he was observed to react to her in just as loving a way as he did with the father.[62]
[61] Family Report, paras 126, 129, 131; Exhibits ICL1, ICL3
[62] Family Report, paras 132, 133
Conclusions and orders
The presumption of equal shared parental responsibility does not apply because the evidence establishes the father’s past commission of family violence
(s 61DA(2)).
The parties agreed it would be impossible for them to share parental responsibility for the child. They told the Family Consultant so[63] and they each made an application for sole parental responsibility. It is uncontroversial there is a “significant lack of trust and poor communication” between them.[64] The parties, Independent Children’s Lawyer, and Family Consultant all agreed one of the parties must have exclusive parental responsibility for the child.
[63] Family Report, paras 48, 56, 113, 117
[64] Family Report, para 50
The absence of an order allocating equal shared parental responsibility for the child to the parties means s 65DAA of the Act is not engaged and so the child’s living arrangements are dictated by his best interests and not a statutory formula.
The father’s proposal for an “equal time” residential regime is rejected. It would not work for the reasons already explained. For more than the last 12 months the Family Consultant has held firm to the opinion that:[65]
…the current [equal time] arrangements are putting too much pressure on [the child] and…he would benefit from living primarily with one parent and spending time with the other parent. [The child] is not coping with the shared care arrangement or with the ongoing conflict between the parents and the loyalty demands that they are making of him.
[65] Family Report, para 37
The father could not explain rationally why that opinion should not be regarded as correct. His only submission of merit was that the equal time arrangement had been successfully implemented since interim orders to that effect were made in February 2014. The parties’ compliance with those orders has come at a cost though. Neither wants to continue adhering to an equal time residential regime and the child has suffered by being forced to endure it. It is likely the parties have maintained their compliance with the interim orders because each feared repercussions for any contraventions at final hearing. That insurance will no longer be available once the litigation is concluded.
The Family Consultant observed in cross-examination that if the current regime is maintained, the child will probably not be able to endure it much longer. He would likely “pick a parent and abandon the other” in order to reduce his stress. Unsurprisingly, his coerced abandonment of one parent in preference for the other would likely induce serious psychological maladjustment in the mid to long term.
The evidence overwhelmingly requires that the child should live primarily with one party. The father’s failure to actually seek an order for the child’s residence is not a disqualifying feature. There can be no doubt that outcome was his genuine desire, nor was there any doubt he was capable of providing such care to the child.
The preponderance of evidence militates in favour of the mother being the child’s primary residential parent. There are several reasons why her parenting capacity should be regarded as superior. Despite her criticisms of the father, she is not as ill-disposed towards him as he is towards her, so there is a better chance the child will retain his meaningful relationships with both parents if he lives with the mother. She has greater insight into how the intense parental conflict is liable to deleteriously affect the child and is better equipped to shield the child from it. The mother is also likely to be a better role model to the child, since she lacks the arrogant, opinionated and confrontational tendencies of the father.
The next question to be addressed is how the child should interact with the father in the future.
From the time the mother commenced these proceedings in November 2013 until she filed her Amended Application in October 2014, she considered the child should spend “substantial and significant time” (s 65DAA(3)) with the father – encompassing alternate weekends, mid-week visits, and half of school holidays. Her views changed when the Family Report was released. The Family Consultant suggested more confined interaction between the child and the father and the mother adopted that recommendation.[66] Her views changed again when the Family Consultant produced in cross-examination a revised set of recommendations, which were tendered.[67] The mother and Independent Children’s Lawyer both adopted the revised recommendations as their mutual proposal.
[66] Family Report, para 149
[67] Exhibit F5
The mother was cross-examined about what circumstances changed to warrant alteration of her views over the course of the proceedings. Her answer was simple. Her opinions were shaped and influenced by those of the Family Consultant, who was able to clearly articulate the concerns the mother has long entertained but been unable to express with such clarity.
The father railed against the outcome recommended by the Family Consultant, but it enjoyed the support of both the mother and Independent Children’s Lawyer and was consistent with most of the evidence. There is no deficiency in the father’s capacity to cater to the child’s physical and intellectual needs. It is his capacity to meet the child’s emotional needs that is impaired. The risk of the child’s emotional harm needs to be alleviated by curtailing the extent of his interaction with the father without actually impairing the importance of their relationship. The proposal of the mother and Independent Children’s Lawyer achieves that objective.
The Family Consultant recommended an embargo on the child’s face-to-face visits with the father for the next couple of months, followed by their staged re-introduction. The recommendation called for the child’s interaction with the father not to progress beyond alternate weekends (Saturday afternoon to Sunday afternoon) and only one week in only two school holiday periods.
The Independent Children’s Lawyer submitted the father would not be able to contain his dissatisfaction with any outcome that provided for the child to spend less time in his care than in the mother’s care, let alone one as confined as that suggested by the Family Consultant. His personality traits would incline him to regale the child with the inequity of the arrangement and attempt to align the child with him to undermine it. The child would need some time away from the father to enable the new arrangement to be implemented without the prospect of deliberate or inadvertent sabotage by the father.
The father submitted such an outcome would be punitive and would risk the child’s rebellion, but neither criticism was balanced. The father may genuinely feel such orders are punitive to him, but the tide of evidence suggests they would be reparative for the child. While it is true the child may act out by absconding from the mother, I accept the Family Consultant’s opinion that the chance of the child being relieved by such orders is just as pronounced.
After the initial embargo and re-introduction periods, which in combination extend for some months, the orders enable the child to spend time with the father each alternate weekend in school terms. However, that time will commence at 9.00 am instead of 1.00 pm on Saturdays. No rational explanation was offered as to why the extra four hours was or was not significant.
The orders provide for the child to communicate with the father weekly by telephone. There is no initial embargo on such communication. That order also accords with the Family Consultant’s recommendation.
The child will spend one full week with the father in both the Winter and Summer school holidays, consistently with the Family Consultant’s recommendation. The father was anxious to limit the child’s expenditure of time with him in the Summer school holidays because that is the busiest time in his professional chiropractic practice and also presumably for the business, so the orders suit him in that regard.
Changeovers should occur at a neutral and public venue. The identification of the venue was not addressed by the parties, either in evidence or submissions. The venue prescribed in the orders is arbitrarily chosen.
An order is made for the Independent Children’s Lawyer and Family Consultant to explain the orders to the child and, if thought appropriate, the reasons for such orders. Such an order accords with the Family Consultant’s recommendation and the Independent Children’s Lawyer’s request.
The remaining orders could not reasonably meet objection.
I am satisfied the parenting orders are reflective of the child’s best interests.
Property Settlement proceedings
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]), it is permissible for the factors within s 79(4) to inform the inquiry under s 79(2) (see Bevan & Bevan [2013] FamCAFC 116 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 current assets, liabilities and financial resources are as follows:
Assets
Value
Total
Car (…)
500
GBS acc #...
400
Miscellaneous personal property
1,000
Sub-total
1,900
1,900
Liabilities
GBS credit card
1,700
Outstanding legal fees
47,195
Sub-total
48,895
48,895
Net deficit
-46,995
Superannuation
IOOF Lifetrack
31,000
31,000
Net deficiency
-15,995
The mother sought to claim as liabilities a series of debts she owes to her lawyers totalling $47,195.[68] She conceded during final submissions that, to do so fairly, she would need to also permit the father to count the legal fees he has already paid by enlargement of his mortgage.
[68] Schedule of property interests filed 3 February 2015
The parties agreed their superannuation interests should be treated as property, even though that is not the usual course (see Marriage of Coghlan (2005) 33 Fam LR 414 at 428-429).
The father’s current assets, liabilities and financial resources are as follows:
Assets
Value
Total
D Town real property
675,000
Sole shareholding in corporation “F Pty Ltd”
nk
Sole interest in business “G Pty Ltd”
nk
Shareholding in Telstra
4,155
Car (…)
6,800
NAB acc #...
139
Miscellaneous personal property
23,800
Wedding rings surrendered by the mother in court
4,000
Sub-total
713,894+
713,894+
Liabilities
NAB home loan, subject to add-back of legal fees paid from the loan
208,957
NAB flexi mortgage account
7,062
NAB credit card
252
Debts related to “G Pty Ltd”
2,090
Sub-total
218,361
218,361
Net assets
495,533+
Superannuation
IOOF Lifetrack
70,909
70,909
Net assets/resources
566,442+
The father acknowledged in cross-examination that he is the sole shareholder and director of F Pty Ltd (“the corporation”). He attributed a value of $500 to the corporation in his financial statement, but he conceded that was merely representative of his weekly drawings from the corporation, not a genuine estimate of the value of the corporation. The corporation owns a chiropractic clinic and employs the father to conduct it. The value of the corporation remains unknown, but it must have some value.
The father also acknowledged in cross-examination that he is the sole registered owner of the business called “G Pty Ltd”, for which he holds an ABN. Similarly, the value of that business is unknown. The business must have some value, but it only has a value when conducted in conjunction with a freehold or leasehold interest in the D Town property. The business, which entails the rental of apartments situated on the D Town property, is inalienable from the real property. The business therefore has some value to the father whilst ever he retains the D Town property, since it affords him an income stream. Although the business expenses have historically outstripped its income, resulting in net losses, the losses can be avoided by shutting down the business. The father must perceive some benefit in persisting with the business.
The father admitted in cross-examination that the current debit balance of the NAB home loan is $208,957, rather than the figure of $160,747 disclosed in his financial statement. The father conceded he enlarged the home loan, which is secured by mortgage over the D Town property, by some $124,000 in the period since separation. Of that enlargement, some $110,000 was used by him to pay outstanding legal fees associated with this litigation. For the same reason the mother’s unpaid legal fees are taken into account as existent liabilities in the property adjustment process, the father’s actual existing mortgage debt is also counted.
Section 79(2)
The mother’s property interests are subsumed by her debts. She is insolvent. Both parties recognised it would not be a just and equitable outcome for the parties to simply retain their existing property interests and liabilities, since both advocated for property settlement orders to be made. I concur with their mutual belief that it would be just and equitable to make property settlement orders between them.
Sections 79(4) and 75(2)
The parties did not cohabit before their marriage in 2002.
At that time the father owned:
(a)His shareholding in the corporation which ran the chiropractic practice in which he was employed (F Pty Ltd);
(b)The real property at L Town, NSW, from which the chiropractic practice operated;
(c)Encumbered real property at D Town, NSW, which property was situated next door to the former matrimonial home rented by the parties from the maternal grandmother;
(d)A car (though the car was probably an asset of the corporation, as is the case with the current car driven by the father);
(e)Some shares; and
(f)Some superannuation.
The father estimated the values of those assets at that time,[69] but little weight can be reposed in his inexpert opinions of historical value.
[69] Father’s affidavit, para 38
Undoubtedly the mother’s assets at that time were of much less value than the father’s. She only had a car and some household furniture. She also had a small credit card debt.[70]
[70] Father’s affidavit, paras 39-40
Once the father began cohabitation with the mother in the property rented from the maternal grandmother he began spending money to renovate that property.[71] In the litigation between the father and maternal grandmother which followed the parties’ separation, the father apparently claimed reimbursement of his expenditure upon her property from the maternal grandmother. His claim failed, but the maternal grandmother’s claim succeeded. The father was evicted from the property without any compensation for his expenditure.[72] It is not, therefore, an issue warranting further consideration in these proceedings.
[71] Father’s affidavit, paras 50-51
[72] Father’s affidavit, para 106
The father worked in the chiropractic business four days each week, for which purpose he lived away from the former matrimonial home in Newcastle. That residential regime applied until he sustained a back injury in December 2008 (not September 2009[73]), after which time he lived permanently in the former matrimonial home. He received periodic workers compensation payments for several years and was paid lump sum compensation of around $43,000 in March 2011.[74]
[73] Mother’s affidavit, paras 30, 35
[74] Father’s affidavit, paras 55, 61; Mother’s affidavit, para 36
In September 2011, the father sold his property at L Town and some of the chiropractic business equipment. The net proceeds of sale were used to diminish the loan secured by mortgage over the D Town property.[75]
[75] Father’s affidavit, para 64
From the time the D Town property was bought and renovated,[76] the business operated holiday lettings of the two apartments constructed on the property. The wife was paid $250 per week to manage the business.[77]
[76] Father’s affidavit, paras 29-31
[77] Father’s affidavit, para 68
The mother resigned her former employment, which entailed office administration duties, to help run the business with the father. She worked in the business on weekdays and weekends.[78]
[78] Mother’s affidavit, paras 27, 29, 31, 33; Affidavit of Ms I, paras 9, 11
However much the father sought to minimise the work done by the mother in the conduct of the business, he was willing to pay her $250 per week for her effort.[79] In any event, shortly following separation, the father wrote to the mother expressing how important her assistance was in the conduct of the business.[80] The father said in cross-examination he was not entirely truthful in that letter, from which it follows he is willingly dishonest when it suits him. Either he was dishonest in the letter he wrote to the mother or he was dishonest in his evidence. Since he authorised a magazine article about the business in 2003, which attested to the mother’s integral involvement in the business,[81] I infer his letter to the mother in January 2013 was truthful and she really was substantially involved in the conduct of the business.
[79] Father’s affidavit, paras 74-80
[80] Exhibit M1
[81] Exhibit M2
I accept that both parties contributed the income they received for the benefit of the family unit. In the mother’s case, that was the income she earned from employment in the business. In the father’s case, that was the income earned from his employment as a health professional and the periodic workers compensation he later received in lieu of wages. Although the father also generated an income through operation of the business, it was uncontroversial the business always ran at a loss.[82] The expenses always exceeded its income. As proprietor of the business, the father received no income from it at all. It in fact cost him money. It was therefore a drain on the parties’ resources, though it afforded the father some taxation relief.
[82] Father’s affidavit, para 81
Of course, the lump sum workers compensation of $43,000 paid to the father in 2011 was a contribution for which he is accorded additional credit. That money was also expended by the father within the family economy.
The father asserted he took responsibility for most household chores in the former matrimonial home, at least following his recovery from his back injury no earlier than 2009,[83] even though he returned to part-time work as a health professional and alleged his additional principal responsibility for conduct of the business. I do not accept that evidence. I prefer the mother’s evidence that she took responsibility for most household chores. It was logical she took primary responsibility for household duties, given she was at home other than when attending to the business next door.
[83] Father’s affidavit, paras 69-70, 127
I also accept the mother was primarily responsible for care and supervision of the child and Ms I. She was partially corroborated by Ms I.[84] The father only admitted the mother took primary responsibility in that role prior to him sustaining his back injury.
[84] Affidavit of Ms I, para 10
Upon final separation, the father terminated the mother’s employment in the business and ceased payment of money to her. When he was asked why, he replied she had financial support from her family. He said the maternal grandmother is a “multi-millionaire” and she could “look after” the mother.
The father has paid the mother a minimal amount of child support,[85] but it should be remembered the child has lived with the parties for equal time and the mother paid no child support to the father.
[85] Father’s affidavit, para 143
The parties are of comparable age and neither complains of ill-health.
Presently, the mother has only casual employment. She may be able to increase the number of hours she works, but it is unlikely she has a capacity for work of a more lucrative type. Her skills in office administration are now stale and her age inhibits her chances of employment in that field.
The father’s income-earning capacity is far superior, despite his back complaint. He still works part-time as a health professional and will be able to do so for the foreseeable future. He also retains ownership and possession of the D Town property. While ever he does so he will be able to continue running the business of holiday rental of one or both apartments constructed on the property, if he so desires. He deposed that he had no trouble attending to both his professional medical practice and operation of the business.
The father deposed to the likelihood of the mother inheriting money from the maternal grandmother at “some time in the foreseeable future”,[86] but nothing was made of that evidence in final submissions.
[86] Father’s affidavit, paras 124-125
In summary, the father’s capital contributions were far superior to the mother’s, their overall contributions of income and labour were comparable, but the mother’s future needs far exceed the father’s.
Conclusions and orders
The parties’ respective property settlement proposals were not far apart. The mother contended her entitlement to 40 per cent of the property, whereas the father ultimately submitted the mother’s entitlement to be 33 per cent.
Given their overall property interests are quantified at not less than $550,447
(= 566,442 – 15,995), the seven per cent difference between them amounted to only $38,531. To provide context, that is an amount the father could derive from the rental of one apartment at his D Town property over the next
nine months, because historically he was able to generate rental income of $50,000 per annum for each of his two apartments. Put another way, the father spent around triple that amount on legal costs in these proceedings.
The mother’s future needs are a powerful factor. She will have the primary care of the child, who is still only 10 years of age, and probably very modest financial assistance from the father in the form of child support. Her ability to earn income is substantially diminished.
The claim she made for 40 per cent of the property was not unreasonable. It would leave her with superannuation of only $31,000 and net assets of only $189,179. It is unlikely she will be able to buy her own home with such meagre assets. She could not buy an unencumbered home with that sum, nor could she likely earn the regular income necessary to support the additional mortgaged loan she would need for that purpose. Such assets could only provide her with the ability to obtain stable rental accommodation of her own. It could not be reasonably contended that her receipt of $38,531 less, for which outcome the father contended, is a more just or equitable result.
The orders therefore provide for the mother to receive 40 per cent of the property and financial resources. That will be achieved by ordering the father to pay to her a lump sum of $236,174. In combination with her other assets, liabilities, and her superannuation interest (which leave her with net liabilities of $15,995), a cash payment of that amount will leave her with 40 per cent ($220,179 = 40 per cent x $550,447).
The father is permitted some time to marshal his affairs to raise such funds, presumably by extension of the mortgage secured against the D Town property. If he is unwilling or unable to do so, the D Town property will be sold to pay the mother’s entitlement.
The payment of $236,174 due by the father to the mother amounts to 34.99 per cent of the agreed value of the D Town property. In the event the property needs to be sold, it may fetch more or less than that sum. In such circumstances, the father must pay to the mother 34.99 per cent of the net proceeds of sale rather than the fixed sum of $236,174. That will avoid either party suffering detriment by the property realising an unexpectedly high or low price.
Such orders are just and equitable.
Costs
The Independent Children’s Lawyer foreshadowed a costs application against both parties and the respondent foreshadowed a costs application against the applicant. The question of costs will be influenced by considerations enumerated in s 117 of the Act, which were not canvassed in final submissions. Costs are therefore reserved for 28 days.
I certify that the preceding one hundred and fifty four (154) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Austin delivered on 24 March 2015.
Associate:
Date: 24 March 2015
Key Legal Topics
Areas of Law
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Family Law
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Insolvency
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Equity & Trusts
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