ELLIS & MURPHY
[2018] FamCA 468
•22 June 2018
FAMILY COURT OF AUSTRALIA
| ELLIS & MURPHY | [2018] FamCA 468 |
| FAMILY LAW – CHILDREN – With whom a child lives – International Relocation – Where the parties agree the children should live with the mother but disagree over the mother relocating to the UK with the children – Concluded the mother should remain living with the children in Australia – Ordered the children live with the mother – Ordered the children spend substantial time with the father – Ordered the parties may take the children from Australia on international holidays FAMILY LAW – CHILDREN – Parental Responsibility – Where an order for equal shared parental responsibility would not be in the children’s best interests – Where the parties’ conflict is too entrenched for them to negotiate and reach consensus on important issues related to the children – Concluded the parties have not been involved in family violence – Ordered the mother shall have sole parental responsibility for the children FAMILY LAW – PROPERTY SETTLEMENT – just and equitable – Where the parties agree to retain their own superannuation interests and no splitting order should be made – Where the parties agree their financial and non-financial contributions during cohabitation were equivalent – Concluded the father’s post-separation financial contributions redressed the imbalance of the parties’ initial capital contributions and their overall contributions should be regarded as equivalent – Adjustment in the mother’s favour – Concluded the parties’ shares in the non-superannuation assets should be 60 per cent for the mother and 40 per cent for the father |
| Family Law Act 1975 (Cth) ss 4AB, 60B, 60CC, 61DA, 65DAA, 65DAC, 65Y, 90SF, 90SM |
| AMS v AIF (1999) 199 CLR 160 Bevan & Bevan (2013) 49 Fam LR 387 Chorn v Hopkins (2004) FLC 93-204 Hepburn & Noble (2010) FLC 93-438 Malcolm v Monroe [2011] FLC 93-460 Marriage of Coghlan (2005) 33 Fam LR 414 McCall v Clark (2009) FLC 93-405 Sampson v Hartnett (No.10) (2007) FLC 93-350 Stanfordv Stanford (2012) 247 CLR 108 U v U (2002) 211 CLR 238 Zanda & Zanda [2014] FamCAFC 173 |
| APPLICANT: | Mr Ellis |
| RESPONDENT: | Ms Murphy | ||||
| FILE NUMBER: | NCC | 1188 | of | 2015 | |
| DATE DELIVERED: | 22 June 2018 |
| PLACE DELIVERED: | Newcastle |
| PLACE HEARD: | Newcastle |
| JUDGMENT OF: | Austin J |
| HEARING DATE: | 22, 23, 24 & 25 May 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Not Applicable |
| SOLICITOR FOR THE APPLICANT: | Not Applicable |
| COUNSEL FOR THE RESPONDENT: | Mr Bithrey |
| SOLICITOR FOR THE RESPONDENT: | Kekeff & Associates Solicitors |
Orders
Parenting Orders
All former orders relating to the following children (“the children”) are discharged:
(a)X, born … 2010; and
(b)Y, born … 2014.
The mother shall have sole parental responsibility for the children.
The children shall live with the mother.
The parties shall do all things reasonably necessary to ensure the children spend time with the father:
(a)In the Summer school holidays:
(i)For the first portion of the holidays in 2018/2019, commencing at 9.00 am on the second day after the last day of school term and concluding at 12.00 noon on 5 January; and
(ii)For the second portion of the holidays in 2019/2020, commencing at 12.00 noon on 5 January and concluding at 5.00 pm on the last day before the first day of school in the new term.
(b)Until the youngest child commences school:
(i)During school terms, each alternate week from 5.30 pm on Thursday until 6.00 pm on Sunday, commencing on Thursday 28 June 2018 this term and on the first Thursday of each new term;
(ii)For the first half of the Autumn and Spring school holidays, commencing at 5.30 pm on the last day of school term and concluding at 5.30 pm on Saturday on the middle weekend of the holidays;
(iii)For the first half of the 2018 Winter school holidays, commencing at 5.30 pm on the last day of school term and concluding at 5.30 pm on Saturday on the middle weekend of the holidays;
(iv)If the youngest child does not start school until 2020 then, subject to Order 6 hereof, for the first half of the 2019 Winter school holidays, commencing at 5.30 pm on the last day of school term and concluding at 5.30 pm on Saturday on the middle weekend of the holidays;
(c)Once the youngest child commences school:
(i)During school terms, each alternate week from the conclusion of school on Thursday until the commencement of school on Monday, commencing on the first Thursday of each new term;
(ii)For the first half of the Autumn and Spring school holidays, commencing at 5.30 pm on the last day of school term and concluding at 5.30 pm on Saturday on the middle weekend of the holidays;
(iii)Subject to Order 6 hereof, for the first half of the Winter school holidays, commencing at 5.30 pm on the last day of school term and concluding at 5.30 pm on Saturday on the middle weekend of the holidays;
Orders 3 and 4 hereof are suspended between 9.00 am and 5.00 pm each Mother’s Day and Father’s Day, during which periods the children shall spend time with the mother on Mother’s Day and with the father on Father’s Day.
Orders 4(b)(iv) and 4(c)(iii) are suspended if the mother provides the father with:
(a)Not less than two months written notice of her intention to take the children to the UK for the Winter school holidays; and
(b)Written confirmation of the dates upon which they will depart from and return to Australia.
Pursuant to s 65Y of the Family Law Act, the parties are entitled to take the children from Australia on international holidays, provided such travel arrangements are consistent with these orders.
For the purpose of implementation of Orders 3-5 inclusive, the parties shall respectively ensure the children’s:
(a)Collection from school, whenever the children’s residence or expenditure of time with a party is to commence at or about the conclusion of school during school term;
(b)Return to school, whenever the children’s residence or expenditure of time with a party is to conclude at or about the commencement of school during school term; and otherwise
(c)Collection from and return to the McDonald’s Restaurant at Suburb B, NSW.
While the mother is living in Australia, the parties shall take all reasonable steps to ensure the children communicate privately by telephone with:
(a)The father each Tuesday at 6.00 pm while the children are living with the mother.
(b)The mother each Wednesday at 6.00 pm while the children are spending time with the father on during school holiday periods.
(c)The parent with whom the children are not then staying at 6.00 pm on the children’s birthdays.
When the mother is holidaying with the children in the UK, the parties shall take all reasonable steps to ensure the children communicate privately with the father by audio-visual link each Tuesday at 9.00 am Greenwich Mean Time.
Each party is restrained from denigrating the other in the presence or hearing of the children and from permitting the children to remain in the presence or hearing of another person denigrating the other.
The mother shall authorise and request the principal of any school attended by the children to provide to the father, at the father’s expense, copies of all school reports and school photograph order forms relating to the children.
Each party shall forthwith inform the other, and keep the other informed, in writing of their respective current residential address, 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.
Property Settlement Orders
The father shall pay to the mother the sum of $225,822 within six weeks of the date of these orders.
The father is declared the sole legal and beneficial owner (as between the parties) of the real property and improvements comprising Folio Identifier Lot … in DP …, being the property more commonly known as C Street, Suburb D, 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 father, subject to:
(a)His payment to her of the sum in satisfaction of Order 15;
(b)His discharge of the existing home loan, secured by mortgage over the property;
(c)His indemnity of the mother against any and all liability under the existing home loan;
(d)His indemnity of the mother against all rates, taxes, statutory charges, and other outgoings and liabilities affecting or relating to the property; and
(e)His indemnity of the mother against any and all liability secured over or related to his E Town and F Town businesses.
The father is declared the sole legal and beneficial owner of the E Town business, subject to:
(a)His payment to her of the sum in satisfaction of Order 15;
(b)His discharge of the existing home loan, secured by mortgage over the property;
(c)His indemnity of the mother against any and all liability under the existing home loan;
(d)His indemnity of the mother against all rates, taxes, statutory charges, and other outgoings and liabilities affecting or relating to the property; and
(e)His indemnity of the mother against any and all liability secured over or related to his E Town and F Town businesses.
The father shall forthwith do all such acts and things necessary to sell the F Town business for the best price obtainable.
For the purpose of implementing Order 18, the father:
(a) Is restrained from removing any equipment from the business.
(b)Is restrained from acting or omitting to act in a way calculated or likely to reduce the value of the business pending its sale.
(c) Shall notify the mother in writing of:
(i)The name of the business broker and solicitor he retains to act on the sale;
(ii)The listing price;
(iii)The sale price;
(iv)The date of exchange of contract; and
(v)The date of completion of the contract.
(d) Shall provide the mother with copies of:
(i)The contract entered with the purchaser;
(ii)The proposed settlement statement; and
(iii)The final settlement statement
Upon completion of the sale of the F Town business pursuant to Order 18, the father shall ensure the proceeds of sale are disbursed as follows:
(a) First, to pay all costs, commissions, and expenses of the sale;
(b) Second, to pay the mother 60 per cent of the balance; and
(c) Third, to pay himself the remaining 40 per cent.
The father is declared the sole legal and beneficial owner of all shares in G Pty Ltd (the trustee of the Ellis Family Trust) and shall indemnify the mother against any and all liability to or borne by the corporation.
The father shall forthwith do all acts and things necessary to transfer to the mother 215,000 points from his Qantas Frequent Flyer account.
Unless otherwise provided:
(a)Each party shall be the sole legal and beneficial owner 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 and superannuation entitlements are deemed in the possession of the superannuant
(b)Each party shall be solely liable for and shall indemnify the other against any and all debts attaching or relating to all real and personal property in their respective possession and any debts in their respective sole names, including any individual liability for capital gains tax arising out of the sale by the parties of assets pursuant to these orders.
Miscellaneous Orders
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 E Town is empowered to execute such documents on behalf of the parties pursuant to s 106A of the Family Law Act.
Costs are reserved for 28 days.
Any and all other outstanding applications are dismissed.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Ellis & Murphy has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT NEWCASTLE |
FILE NUMBER: NCC 1188 of 2015
| Mr Ellis |
Applicant
And
| Ms Murphy |
Respondent
REASONS FOR JUDGMENT
Introduction
These proceedings involve disputes between the applicant father and respondent mother over their two children and the division of their property interests.
In respect of the children, the parties agree they should continue to live with the mother and maintain their important relationships with the father, but the mother wants to move back to the United Kingdom (“UK”) with the children and the father wants them to stay in Australia. The parties also dispute the allocation of parental responsibility for the children.
In respect of their property, the parties agreed they should retain their own superannuation interests but divide their non-superannuation assets. Given the extent of their liabilities, there was relatively little net property to argue over, though each party wanted a greater proportion of it than the other.
Short history
The parties became acquainted in 1990 when they lived and studied at the same university in the UK.
The father moved to Australia in 2007 and the mother followed in 2008. They have both since lived in Australia and are now dual citizens of Australia and the UK. They commenced their de facto relationship in late 2009 and separated in April 2015.
Their children were born in 2010 and 2014 and, at the time of trial, were aged seven and four years respectively.
At the time of the parties’ separation, the family lived in E Town. The mother took the children and vacated the family home while the father was away for a short period. The father remained in occupation of the family home and the mother established a separate residence for her and the children in rented accommodation in another E Town suburb. That remains the situation.
The father commenced these proceedings shortly after the separation in May 2015 in the Federal Circuit Court of Australia.
Interim parenting orders were first made in May 2015 and provided for the parties to have equal shared parental responsibility for the children, for the children to live with the mother, and for them to spend time with the father twice each week (on Sundays and Tuesdays). The father ceased working on Tuesdays so the children could spend time with him that day.
The second set of interim parenting orders was made in October 2015, expanding the time spent by the eldest child with the father on weekends. At that time, the youngest child was still only about 18 months of age and so the orders treated him differently.
The third set of interim parenting orders was made in February 2016, expanding the time spent by both children with the father on alternate weekends and each Tuesday.
The fourth set of interim parenting orders was made in November 2016, again expanding the time spent by both children with the father on alternate weekends and each Tuesday. In essence, the orders then provided for the children to spend time with the father on alternate weekends (Friday afternoon until Sunday afternoon), each Tuesday for the whole day (7.30 am until 6.00 pm), and for some block periods of holiday time. The orders did not stipulate the venue for the children’s exchange, but it has been occurring at the parties’ homes.[1] Despite some level of dissatisfaction expressed by the parties, they each informed the Family Consultant in February 2018 that those arrangements were “working relatively well for the children”.[2]
[1] Family Report, para 2
[2] Family Report, para 24
In February 2017, the Federal Circuit Court transferred the proceedings to this Court for determination. The Family Report was ordered in October 2017, it was prepared in February 2018, and the trial then proceeded in May 2018.
Evidence
The father relied upon:
(a)His affidavit filed on 26 April 2018, together with the exhibit documents referred to therein which were tendered;[3]
(b)His financial statement filed on 30 April 2018; and
(c)The affidavit of his partner, Ms H, filed on 26 April 2018, together with the annexure referred to therein which was tendered.[4]
[3] Exhibit F1
[4] Exhibit F2
The mother relied upon:
(a)Her affidavit filed on 26 April 2018, together with the culled exhibit documents referred to therein which were tendered;[5]
(b)Her financial statement filed on 26 April 2018;
(c)The affidavit of the maternal grandmother, Ms J, filed on 26 April 2018, together with the exhibit document referred to therein which was tendered;[6] and
(d)The affidavit of the maternal grandfather, Mr J, filed on 26 April 2018, together with the exhibit document referred to therein which was tendered.[7]
[5] Exhibit M3
[6] Exhibit M4
[7] Exhibit M5
The parties also relied upon:
(a)The Memorandum of the Family Consultant dated 20 June 2017;
(b)Family Report dated 13 February 2018;
(c)The affidavit and reports of the single expert witness, Ms K;[8] and
(d)The affidavit and reports of the single expert witness, Mr L.[9]
Parenting dispute
[8] Exhibit M1
[9] Exhibit M2
Legal principles
Orders in respect of children are made under Part VII of the Family Law Act (“the Act”), where the meaning of a “parenting order” is defined (s 64B). The Court may make such parenting orders as it thinks proper (s 65D), within the context of the objects of the legislation and the principles which underpin those objects (s 60B).
When making parenting orders, the Court is mandated to regard the child’s best interests as the paramount consideration (ss 60CA, 65AA). The Act specifies the criteria which must be considered in arriving at a conclusion as to what is in the child’s best interests (s 60CC).
The Act imports a rebuttable presumption that a child’s best interests are served by an order allocating equal shared parental responsibility for the child to the parents (s 61DA). Parental responsibility is defined to encompass all duties, powers, responsibilities and authority conferred by law upon parents (s 61B). The legislation dictates the manner in which shared parental responsibility is to be exercised in respect of decisions relating to “major long-term issues” concerning the child (s 65DAC), being matters such as education, religion, culture, health, name, and changed living arrangements (s 4), and also in respect of decisions which do not relate to such significant issues (s 65DAE).
The presumption of equal shared parental responsibility does not apply in certain circumstances, including in instances of child abuse and family violence (s 61DA(2)), and the presumption may be rebutted if the Court is satisfied it would not be in the child’s best interests for the parents to have equal shared parental responsibility (s 61DA(4)). The presumption says nothing about the amount of time the child should live or spend with each parent, but the manner in which parental responsibility for the child is allocated by the Court may bear on that issue.
In the event an order is made allocating equal shared parental responsibility to the child’s parents, the Court is then obliged to consider both the advisability and practicability of the child living for equal time with both parents, or alternatively, living primarily with one and spending substantial and significant time with the other (s 65DAA). If parental responsibility for the child is allocated in some other way, then the exercise of the Court’s discretion about the child’s care arrangements is at large, though the discretion must still be exercised in the context of the child’s best interests being the paramount consideration.
Children’s best interests – primary considerations (s 60CC(2))
It was not contended the children require any protection against harm they may suffer through subjection or exposure to family violence, abuse, or neglect (s 60CC(2)(b)), in which event the only primary consideration engaged by the evidence was the need to ensure the children continue to derive benefit from the meaningful relationships they have with both parents (s 60CC(2)(a)).
For much of this litigation the father believed the mother was intent on interfering with the integrity of the children’s relationships with him. He said so to the Family Consultant in June 2017[10] and again in February 2018.[11] He also gave evidence-in-chief to that effect.[12] However, in cross-examination, he was obliged to concede the interim orders progressively made during the proceedings, which incrementally expanded the time the children spent with him, were not actively opposed by the mother and so she did not “vehemently oppose” such arrangements as he alleged. That was hyperbole at best and deceit at worst. In cross-examination he admitted the mother has complied with all orders, she has at least “partially” encouraged the children’s relationships with him, and he believes she will facilitate the children’s relationships with him in the future, though he is uncertain as to “what extent” she may do so. His admissions necessarily meant much of his former doubt about the mother’s integrity had now dissipated but, by the time of final submissions, he said he abandoned all belief the mother had or would ever try to destroy or impair the children’s relationships with him. His turn-around was therefore complete.
[10] Memorandum, para 14
[11] Family Report, para 20, 62, 74
[12] Father’s affidavit, paras 107-108, 113, 216
While the father undoubtedly wanted the children to spend even more time with him than they had, the mother’s disinclination to allow it was not proof of her intention to thwart their relationships. She simply held a different view about the amount of time the children should spend with him. The father mistakenly confused her refusal to capitulate to his demands with a malevolent intent to ruin the children’s relationships with him.
Objectively, there was plenty of evidence to prove the mother did not impair the children’s relationships with the father and she has no intention to do so. Most importantly, after more than three years of separation, the children still have loving relationships with him, enjoy spending time with him, are eager to spend even more time with him, and miss him when they are not with him.[13] It is inconceivable the children would still be so fond of him if the mother was working assiduously behind the scenes to thwart their relationships.
[13] Memorandum, paras 14-15, 29; Family Report, para 91
The Family Consultant was not challenged about the correctness of her opinion that the children do not present as aligned or alienated children.[14] Although she initially held “some concerns” about the mother’s willingness and ability to promote and facilitate the children’s relationships with the father, particularly if they relocate to the UK,[15] by the time of her oral evidence at trial she had relinquished such concerns.
[14] Family Report, para 28
[15] Memorandum, para 35
Firm conclusions to the effect that the children have not already been aligned by the mother against the father and, further, she is unlikely to align them in the future eradicate any lingering concern about how her relocation with the children to the UK might be intended to cause damage to the children’s relationships with the father. However, it does nothing to assuage concern about how the children’s geographic separation from the father would damage their relationships with him simply by precluding their frequent face-to-face interaction.
On the specific issue of how the tyranny of distance might damage the children’s relationships with the father, there was a marked difference between the Family Consultant’s opinions at the time of her first and second consultations with the family. No satisfactory explanation was offered for the difference, despite valiant attempts by the mother’s counsel during final submissions to reconcile the inconsistency. Initially, in June 2017, the Family Consultant was quite clear and unequivocal about how the children’s relationships with the father would be detrimentally affected by their relocation with the mother to the UK, but by February 2018 she seemed satisfied their meaningful relationships with the father would survive the relocation.
In respect of the eldest child, she said:
(a)In June 2017:[16]
The impact …on [the eldest child] would be to reduce the amount of time she spends with her father. Given that [the eldest child] appears to have a good relationship with her father, this would result in grief and loss and could have a negative impact on that relationship over time.
(emphasis added)
(b)And then in February 2018:[17]
If [the eldest child] moves to live in [the UK], she will adjust…She will undoubtedly miss her father…however, she should be able to maintain a close relationship with him if she were able to have regular communication and block periods of holiday time…
(emphasis added)
[16] Memorandum, para 35
[17] Family Report, para 104
In respect of the youngest child, she said
(a)In June 2017:[18]
The impact on…[the youngest child] would be to disrupt his current relationship with his father. [The youngest child’s] poor language skills are likely to impede his ability to share information with his father and may detract from his ability to enjoy and to fully utilise the video calls. His short attention span, although developmentally appropriate, will also make the calls quite difficult for both parent and child. Unless [the youngest child] is able to spend regular time with the father in person (as well as using other media such as video calls during periods of separation) it is likely that there will be a negative impact on their relationship, given his young age and stage of development.
(emphasis added)
(b)And then in February 2018:[19]
Although [the youngest child] will undoubtedly miss the father if he were to relocate to [the UK], leaving his father behind in Australia, [the youngest child] will adjust to the changes. He should be able to continue to maintain a good relationship with his father over time…
(emphasis added)
[18] Memorandum, para 40
[19] Family Report, para 113
In cross-examination at trial, the Family Consultant said face-to-face contact between the children and father was now not so important, provided it is “scaffolded” with other means of communication to keep the relationship strong, which presumably meant so long as they communicate regularly it is not so important for them to visit each other regularly. She did not explain why face-to-face contact between them was now not so important when only several months ago she regarded it as imperative to avoid the eldest child’s sense of grief over the loss of the father and damage to the youngest child’s relationship with him. In the absence of any adequate explanation, the evolution of the Family Consultant’s opinions on that issue was a troubling feature of the evidence.
Importantly, the eldest child recently made clear to the Family Consultant she feels just as close to the father as she does to the mother[20] and she has openly told the mother she misses the father when away from him.[21] There is no reason to suspect the youngest child feels any differently; he just did not have the maturity to express himself with such clarity.
[20] Family Report, para 94
[21] Mother’s affidavit, para 115
Although the Family Consultant may now feel as though the children could probably maintain their meaningful relationships with the father if they relocate to the UK with the mother and he remains in Australia, I am not similarly satisfied. It is possible they could do so, but it could not be inferred as probable they would do so on any fair analysis of the available evidence. More likely, while the father would remain a significant figure in their lives, they would cease to derive anywhere near the current level of benefit they derive from their relationships with him and his paternal influence would wane. Their relationships with him would fall back in priority and the mother would emerge unrivalled as the most important figure in their lives. Ultimately, the Family Consultant conceded to the father in cross-examination that it would be “ideal” if he could continue his integral involvement in their daily lives.
The Act requires the Court to consider, as primarily important in the determination of orders which will meet children’s best interests, the benefit of them having meaningful relationships with both parents (s 60CC(2)(a)), in the context of an objective to ensure they benefit from both of their parents being meaningfully involved in their lives to the maximum extent that objective is consistent with their protection against harm (ss 60B(1)(a), 60B(2)). In the absence of any tangible risks of harm, and there are no such risks in this case, it is well accepted that children benefit from and their interests are served by the development of good relationships with both parents (see U v U (2002) 211 CLR 238 at 285-286).
Children’s best interests – additional considerations (s 60CC(3))
The children are still young so their views carry little weight (s 60CC(3)(a)), but it is at least noteworthy the eldest child told the Family Consultant she does not wish to move from Australia to the UK and would prefer to only take holidays to the UK.[22] She was alarmed and upset at the prospect of the mother moving the children to the UK away from the father in Australia.[23]
[22] Memorandum, para 31
[23] Family Report, para 98
The important nature of the children’s relationships with each party has already been discussed as a primary consideration under s 60CC(2)(a). No further commentary is warranted as an additional consideration (s 60CC(3)(b)(i)).
The mother placed considerable store in the importance of the children’s relationships with members of both the maternal and paternal families (s 60CC(3)(b)(ii)), all of whom live in the UK, but she conceded in cross-examination the children’s filial relationships with her and the father are the most important of all. It was uncontroversial the children have already developed warm relationships with members of the extended maternal and paternal families in the UK via electronic communication and occasional holidays. They will continue to enjoy those warm relationships regardless of where they live with the mother.
The father took every available opportunity to be an active participant in the children’s lives (s 60CC(3)(c)). He always wanted the children to spend more time with him than the mother was prepared to allow and he eagerly engaged in the children’s activities. He stopped working in his businesses on Tuesdays each week so he could have the children for the whole day. He attends the eldest child’s school as a reading volunteer, attends all of the eldest child’s parent/teacher meetings and other school activities for parents, and regularly reads to the eldest child.[24] He takes the children to swimming lessons, taught the eldest child to ride bikes, and organised her birthday parties.[25]
[24] Father’s affidavit, paras 124-138, 249
[25] Father’s affidavit, paras 142-146
The father has always fulfilled his child support obligations (s 60CC(3)(ca)). He has paid over $2,000 per month in satisfaction of child support assessments since shortly after the parties’ separation.[26]
[26] Father’s affidavit, para 213
The children would be deleteriously affected by any physical separation from the father (s 60CC(3)(d)), which would be the inevitable result of their relocation with the mother to the UK, since he wants to remain living in Australia as much as she wants to live in the UK. However, it should not be assumed the father cannot or should not move to the UK to be near the mother and children because she need not necessarily subordinate her wish to live in the UK to his wish for them all to remain in Australia (U v U at 286). She enjoys the right to choose where she wants to live but, since she will remain the residential parent, her freedom of choice must yield to the children’s best interests if the proposed relocation to the UK would adversely affect the children, because their interests are the paramount consideration (see U v U at 262; AMS v AIF (1999) 199 CLR 160 at 196, 206, 207-208, 210, 223-224, 231-232; Sampson v Hartnett (No.10) (2007) FLC 93-350; Zanda & Zanda [2014] FamCAFC 173 at [132]-[136]).
The children would maintain their meaningful relationships with both parents so long as they both choose to live in proximity to one another in either Australia or the UK, so the respective ease with which the mother could stay in Australia should be compared to the respective ease with which the father could relocate to the UK. While neither party bears any onus to prove compelling reasons to warrant either the relocation or retention of the status quo, the reasons they each advance for their proposal helps inform the inquiry about whether each proposal is a wise exercise of parental responsibility (see U v U at 261, 285-286; Malcolm v Monroe [2011] FLC 93-460 at [81], [83]).
The mother contended in final submissions she was motivated to move to the UK for several reasons, which were articulated to be: to derive support from her family who live there; to help her ailing parents who live there; and to avoid conflict with the father.
The availability of family support in the distant location to which a residential parent wishes to relocate with the children, including reliable quality child care, financial assistance, and emotional support, are important considerations and should be balanced and weighed when considering the parties’ competing proposals (see McCall v Clark (2009) FLC 93-405 at [131]-[135]; Hepburn & Noble (2010) FLC 93-438 at [43], [49]-[64]).
When the evidence in this case is analysed carefully, the mother’s contention she can derive much better support in the UK than she can in Australia seems more illusory than real. At best, the difference would probably be marginal. She said she wanted to settle in in the UK in reasonable proximity to the maternal grandparents, so she implicitly expects to receive the extra support she desires to “assist her to care for the children” from them.[27] However, she cannot expect too much help from them by way of child care if she simultaneously expects to have to provide them with physical and emotional care as they age with their current ailments. The mother contended they are too old and infirm to now travel to Australia, which is part of the reason why she needs to be back in the UK. The mother’s brother and his family also live in the UK, but she adduced no evidence about any help she expects to receive from them. Undoubtedly she would enjoy seeing them more, but that is not the type of support she implied she wanted.
[27] Memorandum, para 18
Nor did the mother say she expects to receive any financial help from her family. The maternal grandparents did loan her $25,000 during these proceedings, but she asserted she must repay the money to them once the property settlement is finalised, so the financial accommodation they offer is finite. In any event, any financial assistance from her family can be provided remotely from the UK, just as has already occurred. The mother expects to find part-time work in the UK, like the work she already has here in Australia, and her income from professional business is sufficient for her to support herself and the children adequately. The evidence did not fairly permit any inference the mother would be any better placed financially by living in the UK.
The mother’s sense of isolation from her family in the UK following the breakdown of her relationship with the father is understandable, but she has not been without friendship and emotional support in Australia. Shortly after the parties’ separation the mother deposed:[28]
I have a secure job…I love my job and I have a good support network of good friends and work colleagues.
[28] Father’s affidavit, para 94
She also told her doctor at about the time of the parties’ separation that she:[29]
…has developed very supportive friendships in [E Town].
[29] Exhibit M13
She still has the same job and the same friends.
She also recently told the Family Consultant she “loves Australia”.[30]
[30] Family Report, para 53
Although the mother now wants to relocate with the children to the UK, it was not always so. The parties agreed early in their relationship the family would live in Australia[31] and, when these proceedings were commenced in 2015, the mother actually applied for the parties to be restrained from travelling overseas with the children, other than for occasional holidays.[32] It was not until early 2016 that she revealed her change of mind about her desire to relocate with the children to the UK.[33] While she gave reasons for why she now wants to live in the UK, she did not explain why she changed her mind about it. That must be left to inference.
[31] Family Report, para 79
[32] Response filed 19/5/15 and Amended Response filed 21/10/15
[33] Amended Response filed 19/2/16
Significantly, the Family Consultant reported the mother’s “primary concern” was the “ongoing parental conflict”. She perceived the father was highly critical of her and he pressures her to comply with his wishes.[34] Inferentially, that is the most important reason why she now wants to move to the UK. She really wants to escape his overbearing attitude.
[34] Memorandum, para 20
The parties certainly have different parenting styles. The Family Consultant said so[35] and the parties agreed. The mother is less assertive than the father, but her perception he is a domineering bully is not objectively borne out by the evidence. She cherry-picked some instances over the last three years to illustrate her frustration with his rigidity and the difficulty with their communication, but she was impelled to admit they have communicated courteously and successfully on many past occasions. In reality, neither party is sufficiently tolerant of the other. The mother is arguably too sensitive about the father’s criticism and he is arguably too quick to judge her by his high and inflexible standards.
[35] Family Report, para 81
The following examples, which were the subject of cross-examination and submissions, illustrate their clash of wills:
(a)In May 2015, when the proceedings commenced, the mother filed a Notice of Risk alleging the children were at risk of harm in the father’s care for a variety of reasons, including that he was a suicide risk, he was violent, and he was neglectful of the children’s needs. She initially proposed that the children only spend time with the father for short periods under professional supervision at a contact centre.
Although the parties’ feelings were still very raw in the immediate aftermath of their separation, the mother’s allegations were histrionic and ultimately baseless. Unfortunately, her allegations set the tone for an adversarial contest between them. From that point on, the father was defensive and took every available opportunity to try and prove his quality as a parent.
(b)In May 2015, the mother withheld the youngest child from the father because the child was allegedly too unwell to spend time with him. However, the mother left the child in the care of her nanny and then went to work.
The father was incensed because he was well able to care for the child. Perhaps with some justification, he felt as though it might have been a ruse to keep the youngest child from him. By the same token, the youngest child was then barely 14 months old and staying inside at home that day might have been best for his recuperation.
(c)In August 2015, the father wrote several times to the mother asking her to take the youngest child to consult his doctor about his recurrent colds and ear infections over preceding months.
The mother replied saying she would not do so because the child was a “healthy little boy”. The father was not satisfied, so he made his own appointment and took the youngest child to the doctor who diagnosed the child suffered from “glue ear”, the treatment for which required multiple follow-up appointments. The receptive language deficit later detected in the youngest child might well have had its origin in the child’s “glue ear” condition.
The mother objected to the father’s interference but, in this instance, his insistence was justified. However, there was no justification at all for him to copy-in the child’s pre-school principal to the email he sent to the mother about it, as he was forced to admit in cross-examination. All that did was cause the mother embarrassment.
(d)In August 2016, the father declined to allow the mother and children to travel to the UK (though he agreed to their holidays to the UK in 2015 and again in 2017).
The mother perceived the father was being needlessly obstructive when she had good reason to return and help the maternal grandparents after the maternal grandmother’s hip replacement surgery. The father did not stop the mother from returning to the UK, but suggested the children should stay with him while she was away because her attention would have been focussed on the maternal grandparents and, further, she was unable to specify when she would return to Australia. The mother decided not to go without the children.
(e)In September 2016, without checking with the mother first, the father booked himself and the eldest child into a father/daughter program conducted through her school. He wrote to the mother explaining he had done so and it would entail him having the child with him one afternoon each week for the duration of the course when she would otherwise be in the mother’s care. He asked whether she agreed.
The mother chided him for not consulting her first, but did not object. He replied confirming he only registered his interest and had not actually committed to the program.
(f)In January 2017, the father discovered the mother had employed a new nanny for the children. He wrote to the mother requesting the nanny’s contact details, curriculum vitae, and criminal history, which the mother refused to provide.
At trial, the father maintained his veiled criticism of the mother for not providing the information he wanted, by reason of which it must be presumed he did not trust her to select a suitable person as the children’s nanny without him vetting her suitability.
(g)In March 2017, the father was dissatisfied with the school shoes worn by the eldest child.
Rather than buy her a new pair himself, the father sent a message to the mother sarcastically imploring her to use the child support he paid her to buy a new pair. The mother already had the matter in hand. A new pair of shoes was in transit from the UK.
(h)In July 2017, without checking with the mother first, the father booked the eldest child’s place in an extra-curricular music activity when the child’s involvement would have slightly encroached on her residence with the mother (about 20 minutes each Friday).
The mother bristled about the lack of consultation and castigated the father. He responded by snidely criticising her in an email he sent to school staff withdrawing the child from the activity. When challenged in cross-examination about it, the father said he regretted his actions.
(i)In July 2017, the youngest child returned from the UK in the mother’s company with a speech stammer. The father arranged speech therapy for him and told the mother of the arrangements afterwards.
The mother did not attend the speech therapy sessions. She said they clashed with her work commitments, which is a valid reason, but the father seems to secretly believe she refused to attend as protest against his unilateral action.
(j)In August 2017, the parties exchanged text messages about whether they should communicate in writing in a book or by text message. The mother’s preference was for the former and the father’s preference was for the latter. They could not even agree on the method by which they should communicate.
The father confected his surprise by saying to the mother “goodness gracious me”, which riled her to the point that she refused to communicate with him by text message any more. The father believes her decision was petulant, but she was exasperated by her perception about how difficult it was for them to communicate effectively. The father responded by informing the mother’s solicitor he would thereafter video-record all changeovers of the children, which he has since done.
He said he decided to do so to protect himself against false allegations that might be made by the mother. His action might have deterred any such allegations, such as the one made by the mother to the Family Consultant about him denigrating her in the children’s presence at one changeover,[36] but he did not adduce any of the video footage in evidence. Inferentially then, the mother did not do or say anything at changeovers to warrant her contradiction by video evidence. The father was impelled to admit she might feel threatened by him video-recording her at every changeover and all it did was increase her animosity. He said he would desist.
(k)The father has contacted the mother’s companion, Mr M, asking him to convince the mother to abandon her plan to relocate to the UK and instead remain in Australia.
The mother seemed to think that was an unacceptable incursion into her personal affairs, whereas the Family Consultant thought it was “fairly benign”. Why the mother thought it was improper for the father to try and convince her, through her partner, to remain in Australia was not adequately explained, particularly since his approach was respectful.
[36] Family Report, para 45
The Family Consultant reported the father may not intend to frustrate and intimidate the mother the way he does, since he seemed oblivious to the distress he causes her.[37] In cross-examination she said he lacked insight into his personality traits. Her opinion about his lack of any intent to aggravate the mother seemed correct, judging by his conduct at trial. He showed his single-mindedness by doggedly pursuing peripheral issues even when warned they were immaterial to the outcome, proving why the mother was fed up with him. Perseverance is one thing but obstinacy is quite another. Nonetheless, the father cannot be fairly criticised for any lack of commitment to the children. He really does have their best interests at heart. The mother knows he loves them, wants to be involved with them, and wants what is best for them.[38] The problem for her is not so much what he does, but how he does it.
[37] Family Report, para 87
[38] Family Report, para 44
The mother, however, has occasionally been intolerant, reactive, and provocative, which has compounded their conflict.
She told her doctor in the past she is “a bit of a worrier”[39] and her doctor thinks she does “some catastrophizing”.[40] She perceives herself to be more attuned to the children’s needs and more caring than the father, but she had to admit the children have never come to any harm in his care. Her proposal for the children to spend weeks at a time in the father’s care, either in the UK or in Australia, is the surest confirmation of her belief the children are not at any risk of harm in his care. The allegations she made against the father in the Notice of Risk she filed in May 2015 probably caused much more damage to the parties’ parenting relationship than she realises.
[39] Exhibit F3
[40] Exhibit F8
The father said, without challenge, the mother regularly contradicted him in the eldest child’s presence for two years before they separated, which he did not like.[41] The mother admitted she told the eldest child she did not agree with the father’s decision on some particular issue,[42] which she conceded in cross-examination was inappropriate and she should not have done. She also conceded she occasionally tells the eldest child “Don’t listen to Daddy”. She must understand such comments undermine the father’s authority and he is frustrated by it, just as she told the Family Consultant she is frustrated by the father undermining her parental authority.
[41] Father’s affidavit, para 80
[42] Mother’s affidavit, para 59
If, as is implied from the evidence, the mother’s exasperation with the father is the most influential reason for her desire to relocate with the children to the UK, then it is necessary to consider alternative ways to avert her exasperation without such intrusive disruption to the children’s lives.
The mother is understandably tense about the current relocation dispute. She wept once with the Family Consultant[43] and also once in cross-examination. While the Family Consultant said the mother would be disappointed if confined to residence in Australia, she said that outcome would not likely cause her so much distress as to impair her parenting capacity, with consequent detriment for the children.[44] As she advised, prescriptive orders should “contain” the father so the mother feels re-empowered as the children’s primary carer. That would be satisfactorily achieved by orders investing her with sole parental responsibility for the children and by ensuring there is no room for any debate about the arrangements under which the children spend time with the father,[45] which solution her counsel conceded to be correct in final submissions. The mother would seemingly be satisfied with “clear boundaries” in place for the father.[46]
[43] Family Report, para 30
[44] Family Report, para 134
[45] Family Report, para 105
[46] Family Report, para 55
Both parties have sufficient capacity to provide for all of the children’s physical, emotional, and intellectual needs (s 60CC(3)(f)). Their historic clashes of wills are an adverse reflection on their respective attitudes to the responsibilities of parenthood (s 60CC(3)(i)), but such conflict can be avoided, or minimised at least, by tightly prescriptive orders which regulate the exercise of parental responsibility and when the children should be in their respective care.
Comparatively, the mother could more easily remain living in Australia with the children than the father could relocate to the UK (s 60CC(3)(e)). She has friends who provide her with support, she has an established professional job providing her with good income, and she likes living in Australia. She acknowledged to the Family Consultant that if she must remain living in Australia with the children she would want to be able to travel to the UK on a relatively frequent basis,[47] which is entirely reasonable. In final submissions, the father conceded she should be able to travel to the UK with the children twice each year for about three weeks on each occasion.
[47] Family Report, para 54
The father’s relocation to the UK would not be impossible, because he remains a UK citizen and members of the paternal family also live there, but it would be inconvenient. He is a self-employed health professional and has been for the last decade. While he could sell his professional practice, he would need to find alternate employment in the UK somewhere reasonably close to the mother’s new home. Even if that is possible, it may not yield the same level of income. In addition, he and Ms H now regard their romantic relationship as permanent and they expect to begin living together shortly. She cannot move to the UK because her children regularly spend time with their father. In the event of the mother’s relocation to the UK with the children, the father would stay in Australia, as he told the Family Consultant[48] and confirmed in evidence.
[48] Family Report, para 79
The issue of family violence between the parties was vexed (s 60CC(3)(j)). The father asserted, without challenge, he had never been physically violent towards the mother. In fact, she did not allege otherwise. The Family Consultant knew there was no physical abuse between them,[49] but she said the “emotional and psychological” effects upon the mother of her experiences with the father should not be “underrated or ignored”.[50] Nor should they, but the evidence about her feelings and their cause requires careful scrutiny.
[49] Family Report, para 84
[50] Family Report, para 84
The Family Consultant repeatedly said she regarded the father’s past conduct towards the mother to be “coercive”,[51] but that was not a descriptive term the mother used herself. The father’s bossy and demanding demeanour towards her is not the same thing as his coercion or control of her. There was abundant evidence of the mother’s physical and financial freedom, which tended to rebut any suggestion the father coerced or controlled her. She possessed her own bank accounts,[52] she worked part-time outside the home in professional practice, she had unfettered use of her own car, she loaned the father money for use in his business and was repaid by him with interest,[53] and the father provided her with a credit card for her use after separation until the child support assessment was in place, the debt for which he paid.[54] It is unknown whether the Family Consultant took those facts into account when she formed her impression about the father’s “emotional abuse” merely from reading the documents with which she was furnished.[55]
[51] Family Report, paras 20, 23, 33, 81, 82, 84, 87
[52] Father’s affidavit, paras 69, 301
[53] Father’s affidavit, para 284(a)
[54] Father’s affidavit, paras 336-337; Mother’s affidavit, para 143
[55] Family Report, para 85
The evidence more accurately suggests the mother considers the father is occasionally “disrespectful”,[56] lacks insight, and undermines her as a parent,[57] which he does by being dismissive of her views as the children’s primary carer and by being unduly assertive about his own views. But the father’s conduct of that sort which induces those feelings in the mother could hardly constitute family violence. Even if she did thereby feel coerced or controlled, as the Family Consultant imputed, it was not as a consequence of any “violent, threatening, or other [like] behaviour” by the father and so it was not evidence which proved the occurrence of “family violence” as defined in the Act (s 4AB).
[56] Family Report, para 33
[57] Family Report, para 44
The mother did say in evidence the father raised his voice and shouted at her, which made her feel “overpowered”,[58] she was fearful of him and how he would react if she challenged him,[59] she remains fearful of his potential to become angry and cause her physical harm,[60] and she feels intimidated by him,[61] but they are all descriptions of only her feelings. The father alleged both parties raised their voices during arguments and he was not challenged about the truth of that evidence.[62] Proof of family violence requires proof the mother’s fear was induced by “violent, threatening, or other [like] behaviour” by the father. The presence of her fear without that causal link is not enough. Save for raising his voice during disagreements, which is not necessarily violent or threatening, there was no other violent or threatening behaviour alleged against the father to arouse complaint.
[58] Mother’s affidavit, para 34
[59] Mother’s affidavit, para 49
[60] Mother’s affidavit, paras 49, 87
[61] Mother’s affidavit, para 63
[62] Father’s affidavit, para 84
The mother’s counsel contended in final submissions the father’s past conduct was “capable” of amounting to “family violence” in the widest sense that term is defined in the Act, but that would be stretching the evidence to and probably beyond the very limits of its elasticity. Most probably, the parties have not been involved in family violence – just conflict.
Parties’ proposals
The father pressed for the parenting orders set out in one of the two Amended Initiating Applications he filed on 20 March 2018. In essence, he wanted the parties to have equal shared parental responsibility for the children and for the children to live with the parties for equal time once the youngest child commences school. In the meantime, he wanted the children to live with the mother and for them to spend substantial amounts of time with him. He wanted each party restrained from relocating more than 50 kilometres away from the other. If, contrary to his primary proposal, the mother was not restrained from relocating to the UK with the children then he wanted two holidays of several weeks duration with the children each year (one in the UK and one in Australia) and weekly video-link communication with them.
The mother pressed for the parenting orders set out in her Amended (Third) Response filed on 28 March 2018. She wanted sole parental responsibility for the children and for the children to live with her. She wants to relocate with them to the UK and her proposals for them to spend time with the father hinged on whether or not she relocates or stays in Australia. If she and the children go to the UK and the father stays in Australia, she agreed the children should have two annual holidays with the father (one in the UK and one in Australia) and regular weekly video-link communication with him. If they remain in Australia, she agreed the children should spend substantial amounts of time with the father (though not as much as he contemplated) and proposed that she and the children be able to travel several times each year to the UK on holidays.
The parties’ proposals were consistent with the ideas they each discussed with the Family Consultant in February 2018.[63]
[63] Family Report, paras 15-18
Conclusions and orders
The presumption the parties should be vested with equal shared parental responsibility for the children is comfortably rebutted by the evidence, since such an order would not be in the children’s best interests (s 61DA(4)). The parties’ conflict is now too entrenched to expect they will be able in the foreseeable future to communicate respectfully, negotiate faithfully, and reach consensus about significant issues related to the children, which capacity is essential (s 65DAC).
The mother does not consider she is able to successfully share parental responsibility with the father.[64] She cut off all but essential communication with him in about August 2017, in response to text messages she received from him, the tone of which she disliked.[65] He considered her response was unjustified,[66] but it is a measure of how fed up with him she feels. Although the father wants the parties to have equal shared parental responsibility, he admitted to the Family Consultant the parties have “poor communication” which made co-parenting difficult at times.[67] He made the same admission in cross-examination.
[64] Family Report, para 55; Mother’s affidavit, para 170
[65] Exhibit M9
[66] Family Report, para 62
[67] Memorandum, para 10; Family Report, para 62
As the Family Consultant logically explained to the father, the mother could hardly have any trust in him if he displays his distrust of her by filming her when the children are exchanged in order to protect himself against any false allegations he worries she might make.[68] The parties did not greet one another or even make eye contact in the presence of the Family Consultant.[69] Her opinion there are “significant trust and communication issues” between the parties which probably make it impossible for them to share parental responsibility is correct.[70]
[68] Family Report, paras 64, 75
[69] Family Report, para 116
[70] Family Report, paras 81, 125
Since no order will be made for the parties to have equal shared parental responsibility for the children, s 65DAA of the Act is not engaged. Nevertheless, the father proposed an “equal time” residential regime for the children so it must be considered. As already mentioned, the parties acknowledge they have quite different parenting styles. The father thinks that is of benefit to the children,[71] but the Family Consultant and the mother do not think so. That was the reason why the Family Consultant recommended against an “equal time” arrangement, or anything like it.[72] The Family Consultant’s opinion is accepted as correct. The parties are not sufficiently co-operative to support an “equal time” arrangement or anything that resembles it, so it would not be in the children’s best interests.
[71] Father’s affidavit, para 245
[72] Family Report, paras 81, 96, 125
In the absence of any order for the children to live with the parties for “equal time”, either now or in the future, the father acknowledged the children would remain living primarily with the mother. The next question, therefore, is whether she may establish the children’s residence in the UK or whether she must remain living with them in Australia.
On balance, the mother should remain living with the children in Australia. The reasons for that decision are the subject of prior analysis, but in summary: the children’s relationships with the father are as strong as their relationships with the mother; their relocation to the UK would probably cause damage to their important relationships with the father, as he would remain in Australia; the mother could more easily remain living in Australia than the father could adapt by moving to the UK; she is relatively happy with her life in Australia; the family support she expects to receive in the UK in the form of child care is more illusory than real; she is well supported by her friendship group in Australia; her financial position in Australia is satisfactory and would not likely be materially improved in the UK; her desire to see her family in the UK can be addressed by allowing her and the children to take regular holidays there; and the conflict she has previously experienced with the father can likely be abated by orders which vest parental responsibility for the children exclusively in her and prescribe the time the children should spend with him. The establishment of such “clear boundaries” while affording her the chance for regular holidays to the UK will probably solve the mother’s concern.
There is no need to restrain the parties’ residences within certain geographic limits, as the father proposed. Making orders which require the parties to ensure the children spend regular amounts of time with the father will practicably require them to maintain households in reasonably close proximity. Orders are, however, necessary to ensure the parties are at liberty to take the children on international holidays (s 65Y). The mother will be able to take the children overseas to the UK, on sufficient notice, in December/January (during the Australian summer school holidays) and July (during the UK summer). Although the children only have two weeks of school vacation in July each year, taking an extra week out of school at that time will not be critical.
The orders split the Summer school holidays and rotate the entitlement to the first half, which incorporates Christmas. In some years the mother may want to take the children to the UK for Christmas and she should not be prevented. In the years when she has the second half of the Summer holidays, she can still take them to the UK in January if she desires. The parties will share the Winter school holidays, unless the mother gives the father sufficient notice of her intention to take them to the UK, in which event he will forego the children spending time with him in that school holiday period. That is a small concession required of him in return for the benefit of the children continuing to live in Australia.
Otherwise, the children should spend substantial and significant time with the father. Aside from holidays and special occasions, the mother proposed such visits be confined to three consecutive nights each alternate weekend during school terms, whereas the father proposed five nights per fortnight as an intermediate step to equal time. The orders strike a balance and provide for four consecutive nights each alternate weekend, commencing on Thursday afternoons and concluding on Monday mornings, once the youngest child starts school and they can be conveniently collected from and returned to the same school. In the meantime, the regime will be three nights each fortnight. That will probably require the father to alter his current work hours, but he would need to do that under his proposal in any event.
The remaining parenting orders are self-explanatory and sensible.
Property settlement dispute
Legal principles
Orders under the Act altering the property interests of parties may only be made if the Court is first satisfied it is just and equitable to make such orders. It is necessary to begin that inquiry by identifying the existing legal and equitable property interests of the parties. It must not be assumed the parties’ rights to or interests in 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 the statutory considerations (see Stanfordv Stanford (2012) 247 CLR 108 at [37]-[40], [50]). Although the High Court was dealing in Stanford with an application between spouses for property settlement pursuant to Part VIII of the Act, the principles apply equally to applications between de facto partners pursuant to Part VIIIAB of the Act.
It is permissible for the factors prescribed by s 90SM(4) (the counterpart to s 79(4)) to inform the inquiry under s 90SM(3) (the counterpart to s 79(2)) of the Act about the justice and equity of making property settlement orders (see Bevan & Bevan (2013) 49 Fam LR 387 at [83]-[89], [163], [169], [171]-[172]).
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 90SM(4) of the Act. The court must identify and assess the parties’ contributions within the meaning of ss 90SM(4)(a)-(c) and then take account of the relevant matters referred to in ss 90SM(4)(d)-(g) and 90SF(3) of the Act.
Existing property interests
The parties were unable to compile a joint balance sheet and so the following findings about the identity and value of their property, debts and superannuation interests are based on the available evidence and were endorsed as correct by both parties during the trial.
The father’s existing assets, liabilities, and superannuation interests comprise:
No.
Assets
Value
Total
1
Former family home at Suburb D (50 per cent)
750,000
2
E Town business
394,473
3
F Town business
Not known
4
Banking accounts
58,098
5
N life policy
1,583
6
Motor vehicle 1
28,000
7
Motorcycle
15,000
8
Motor vehicle 2
6,000
9
Trailer
2,500
10
Household contents
5,000
Sub-total
1,260,654
1,260,654
Liabilities
11
Former family home mortgage (50 per cent)
463,000
12
Business loans
696,962
Sub-total
1,159,962
1,159,962
Net surplus
100,692
Superannuation
13
N Super
296,130
14
O Super
80,072
15
Pension
87,700
Total superannuation
463,902
The former family home is jointly owned by the parties and they remain jointly and severally liable for the debt secured by mortgage over it. The parties did not challenge the correctness of the value of $1,500,000 attributed to the property by the single expert, Ms K (item 1). The parties agreed upon the current debit balance of the mortgaged loan (item 11).
The current value of the father’s E Town business (item 2) was the subject of expert opinion by the single expert, Mr L. The mother challenged him in cross-examination about his underlying assumptions, but did not subsequently submit his evidence should not be accepted as correct. His evidence is therefore accepted and the value of the practice is as he opined.
The current value of the father’s F Town business (item 3) is unknown. No updated opinion evidence was procured from Mr L because the parties agreed the business would be sold,[73] though that has not yet occurred. The parties initially disputed how it should be sold and who should control the sale, but in final submissions the mother acceded to the suggestion the father should control the sale. She resiled from the proposal to be appointed as the trustee for sale and she was disinterested in sharing the task with the father. The true value of the practice will be realised when it is sold to a willing purchaser. Because its current value is unknown, it is excluded from the quantification of the father’s financial position, but its net sale proceeds must be used to adjust the parties’ ultimate property entitlements.
[73] Notation B(ii) made on 26 October 2017
The mother’s existing assets, liabilities, and superannuation interests comprise:
No.
Assets
Value
Total
1
Former family home at Suburb D (50 per cent)
750,000
16
Banking accounts (excl. trustee accs)
18,067
17
Motor vehicle 3
30,000
18
Furniture and personal effects
2,000
Sub-total
800,067
800,067
Liabilities
11
Former family home mortgage (50 per cent)
463,000
19
Income tax
5,583
20
Loan from maternal grandfather
omitted
21
P Finance
27,500
Sub-total
496,083
496,083
Net surplus
303,984
Superannuation
22
N Super
103,366
23
Pension
554,892
Total superannuation
658,258
The mother deposed she owes a debt of $25,000 to the maternal grandfather (item 20),[74] but it is omitted as a liability because she procured the loan to meet her legal fees.[75] When funds are borrowed to pay legal fees and the liability is still outstanding, the liability should not be taken into account (see Chorn v Hopkins (2004) FLC 93-204 at [55]).
[74] Mother’s affidavit, para 163
[75] Exhibit F9
Section 90SM(3)
The parties sensibly agreed it would be just and equitable to adjust their existing property interests, not least because their joint ownership of the former family home and their joint liability under the mortgage needs to be severed.
Sections 90SM(4) and 90SF(3)
The parties agreed their assets and liabilities should be considered separately from their superannuation interests, as is the norm (see Marriage of Coghlan (2005) 33 Fam LR 414 at 428-429).
As to their superannuation interests, they each brought UK superannuation to the relationship and, as far as the evidence goes, neither made any further contributions to their UK superannuation funds during the relationship. Any growth in their UK superannuation interests has been the product of simple investment growth. The father admitted the mother’s UK superannuation interest was worth $470,203 at the time they commenced cohabitation[76] and is now worth $554,892. The mother did not know the value of the father’s UK superannuation interests at the time of cohabitation[77] and his valuation evidence was rejected pursuant to valid objection.[78] He did not submit they had grown much since the commencement of cohabitation.
[76] Father’s affidavit, para 284(c)
[77] Mother’s affidavit, paras 125.3.2, 125.3.3
[78] Father’s affidavit, paras 283(g), 283(h)
The parties’ indirectly contributed to the accumulation of the other’s Australian superannuation interests and, although the father’s Australian superannuation interest is much larger than the mother’s, her UK superannuation interest is much larger than his. The parties agreed they should retain their own superannuation interests and no splitting orders should be made.
In respect of their assets, the parties correctly agreed their respective financial and non-financial contributions during the period of their cohabitation were equivalent. Their difference of opinion over their proportional entitlements devolved to disputes about:
(a)Their initial contributions of capital – the mother submitted her contributions were greater and the father said their contributions were equivalent; and
(b)Their respective contributions in the period between separation and trial – they each contended their own contributions were greater.
Given the narrowness of the dispute, it is unnecessary to traverse their contributions during the relationship, though it was still the subject of much evidence and considerable cross-examination.
At the commencement of cohabitation the father contributed:[79]
(a)The E Town business which he bought shortly before cohabitation began. It cost $127,500, but it was encumbered by debt of $110,000, so the net equity was about $17,500.
(b)An encumbered real property in the UK, the net equity in which was worth about £66,000, for which he later received about $86,000. The fact the mother was not aware of the property does not mean he did not own it.[80] His evidence was unchallenged.
(c)Cash of about $119,000 in his bank account.
(d)An encumbered vehicle, the net equity in which was worth about $15,000, which the mother admitted.[81]
(e)A motor cycle worth about $11,500, which the mother admitted.[82]
(f)Another car worth about $12,000.
[79] Father’s affidavit, para 283
[80] Mother’s affidavit, para 122
[81] Mother’s affidavit, para 125.1
[82] Mother’s affidavit, para 125.2
By comparison, at the commencement of cohabitation the mother contributed:[83]
(a)Cash of £168,437,[84] which she estimated to be worth $300,000. Her evidence about the exact amount of cash is preferred to the father’s prevarication and speculation about the amount.[85]
(b)A car of unknown value, which the father admitted.[86]
[83] Mother’s affidavit, para 123
[84] Exhibit M8
[85] Father’s affidavit, para 284(a)
[86] Father’s affidavit, para 284(b)
Precise mathematical comparison is impossible, but the mother’s financial contribution exceeded the father’s by about $50,000.
As for their post-separation contributions, the mother provided most care for the children and the father paid child support as required.
The father used the parties’ joint capital in a mortgage off-set account to pay down the mortgage and the debt encumbering his two businesses, but he also injected his own post-separation income for that purpose. The mother asserted the mortgage off-set account had a credit balance of about $320,000 at the time of separation,[87] but it had a credit balance of $363,496 several months later.[88] The mother did not use the off-set account after separation, so all subsequent deposits and withdrawals were made exclusively by the father. The father deposited approximately $500,000 to the account within the year following separation and the withdrawals over the same period were about $50,000 more.[89] Obviously, the father deposited his own post-separation income to the mortgage off-set account to supplement the existing credit balance. Accordingly, the father’s evidence that he made post-separation principal and interest payments of around $700,000 to reduce the debit balances of the home mortgage and business debts by some $470,000 is most probably correct.[90] Of course, he had the benefit of occupation of the jointly-owned former family home during that period, while the mother needed to rent alternate accommodation.
[87] Mother’s affidavit, para 151
[88] Exhibit M14
[89] Exhibit M14
[90] Father’s affidavit, paras 328-330
The father admitted in cross-examination that some of his withdrawals from the mortgage off-set account were used to meet his personal expenses, but that form of expenditure was not quantified. The mother simply implied it was more than the father admitted. For her part, the mother conceded in cross-examination she did not know how the father spent the money withdrawn from the mortgage off-set account, so the evidence left the issue unsatisfactorily vague. The mother was critical of the father’s continued expenditure on items like new cars and overseas holidays after his income dipped following his decision to drop back to three days’ work each week, but any argument about waste lost force in the morass of detail and the failure to properly quantify the alleged waste.
The father’s financial contributions after separation redressed the imbalance of the parties’ initial capital contributions. Overall, their contributions should be regarded as equivalent. The mother’s submission her contributions should be assessed at 65 per cent is rejected. The father’s submission his contributions should be assessed at 55 per cent is rejected.
The parties are of similar age, both are healthy, and both are similarly qualified for professional practice. Their incomes from part-time work are currently comparable.
The mother will remain the children’s primary carer, which in the case of the youngest child will occupy her for another 14 years. She is likely to work only part-time for the foreseeable future, which will generate her gross annual income of about $150,000, as it does at present.
For some time, the father has also chosen to work only three days each week, but he will now only have the children on weekends in school terms until the youngest child starts school and then their visits will expand to incorporate every second Friday, so he might now choose to work nine-day fortnights. Even if he chooses not to do so, he could do so, in which event his income-earning capacity would then be more relevant than his actual income. If he works nine days instead of the current six days each fortnight in his own business, his income is liable to increase by about half. His present gross annual income is about $159,000,[91] so it could feasibly rise to $240,000 quite quickly. Regardless of the precise amount, he is capable of earning considerably more income than the mother for the foreseeable future.
[91] Father’s affidavit, para 364
The father expects to soon cohabit with his partner, Ms H, and her children. She earns $79,000 per annum but, most likely, her income will be spent meeting the needs of herself and her children.
The mother’s superannuation interests are worth about $200,000 more than the father’s, but he will or should make up ground on her with his superior income or income-earning capacity over the next few years.
The parties’ future needs warrant an adjustment in the mother’s favour, which is quantified at 10 per cent. The mother’s proposal for five per cent was too cautious, perhaps because she over-estimated her contributions at 65 per cent, and the father’s proposal for no adjustment at all is rejected.
The parties’ respective final shares in the non-superannuation assets should therefore be 60 per cent for the mother and 40 per cent for the father, which outcome falls between the parties’ submissions. The mother wanted 70 per cent and the father wanted 55 per cent.
Conclusions and orders
The parties agree the F Town business must be sold by the father. The mother changed her mind and does not want either sole or joint control of the sale.
They also agree the former family home must be sold if the father cannot afford to buy-out the mother’s interest in the property and indemnify her against the totality of the home loan mortgage and the business debt. However, the father is very keen to retain the property if he can. Despite real doubts about his financial capacity to do so, he should not be deprived of the opportunity to try.
The mother wants to keep her personal assets (items 16, 17, 18) and bear her personal debts (items 19, 21), the net value of which is $16,984.
The father wants to keep the family home (item 1), the E Town business (item 2), and his personal property (items 4, 5, 6, 7, 8, 9, 10), but bear sole liability for the mortgaged home loan (item 11) and his business loans (item 12), the net value of which is $387,692.
Consequently, excluding the F Town business, the net assets are worth $404,676. The wife presently only has assets worth $16,984, but 60 per cent of the net assets amounts to $242,806. The father therefore needs to pay her $225,822 to rectify the imbalance. She would then have net assets worth $242,806 (60 per cent) and he would have net assets worth $161,870 (40 per cent). The F Town practice would then need to be sold and the net proceeds of sale split between them in the same 60/40 per cent ratio. That will achieve a just and equitable distribution of their assets and liabilities.
Any business debt secured against the F Town practice will need to be paid exclusively by the father from his share of the sale proceeds or alternatively secured by him over the other assets he retains because, unless he successfully indemnifies the mother against all of the debt related to the home and the businesses, she will not receive her proper entitlement.
The declaration of the father’s sole ownership of the former family home and his remaining E Town business will be conditional upon three things: his payment of $225,822 to the mother within six weeks (which will enable him time to marshal his affairs); his discharge of the existing mortgaged home loan to eradicate the mother’s liability (which will mean he will need to re-finance the property either alone or with Ms H); and his indemnity of the mother against any and all of the business debt associated with his E Town and F Town businesses. The father expected he would have to re-finance the home loan and indemnify her against any liability under the business loan related to the E Town business,[92] though apparently not the F Town business.[93]
[92] Exhibit F10, Orders 2, 10
[93] Exhibit F10, Orders 13(c), 13(d)
There is some residual concern, left unclarified by the parties, about how the business loans are secured against the two businesses. It is unknown whether the secured creditor will demand payment of all, only part, or none of the sale proceeds which will be realised on the sale of the F Town business in partial satisfaction of the business loans. Most likely, the value of the F Town practice is insufficient to discharge the entirety of the business loans.
In the event the father cannot meet all of the conditions then, absent agreement between the parties, the matter will need to be re-listed to formulate machinery orders designed to achieve the determined outcome by sale of at least the former family home.
The mother sought an order in the form of a mandatory injunction compelling the father to transfer to her one-half of his frequent flyer points,[94] but he only agreed to surrender 215,000 points.[95] An order is only made consistently with the father’s proposal since the issue was not the subject of any cross-examination or submission.
[94] Exhibit M15, Order 12
[95] Exhibit F10, Order 16
Both parties wanted similar orders confirming the father’s sole legal and beneficial ownership of the service trust which he uses to administer one or both of his businesses.[96] There was precious little evidence about the trust (the Ellis Family Trust) or its trustee (G Pty Ltd), so the orders simply make similar provision to the orders sought by the parties.
[96] Exhibit F10, Order 15; Exhibit M15, Order 14
I certify that the preceding one hundred and twenty-one (121) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Austin delivered on 22 June 2018.
Associate:
Date: 22 June 2018
Key Legal Topics
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Family Law
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Property Law
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Statutory Construction
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