EP and Up
[2006] FMCAfam 492
•15 September 2006
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| EP & UP | [2006] FMCAfam 492 |
| FAMILY LAW – Parenting – undefended – application by mother for children to live with her. PROPERTY – Undefended – husband’s superannuation only significant asset – add-back for premature distribution of matrimonial assets. |
| Family Law Act 1975 |
| AB & GB (No.2) [2005] FMCAfam 402 In the Marriage of Lee Steere (1985) FLC 91-626 |
| Applicant: | EP |
| Respondent: | UP |
| File Number: | PAM 3225 of 2006 |
| Judgment of: | Sexton FM |
| Hearing date: | 13 September 2006 |
| Date of last submission: | 15 September 2006 |
| Delivered at: | Orange |
| Delivered on: | 15 September 2006 |
REPRESENTATION
| Counsel for the Applicant: | Mr D Day |
| Solicitors for the Applicant: | Campbell Paton Taylor |
| Respondent: | No appearance |
ORDERS
Parenting
That the children of the marriage, Thomas, born 11 January 1990, Joshua, born 8 July 1991, Melanie, born 12 July 1992, Samuel, born 17 October 1993 and Sarah, born 20 September 1996 (not their real names) [“the children”] live with the wife.
That the wife have sole parental responsibility for the children.
That each party have responsibility for the day to day care, welfare and development of the children while in that party’s care.
That the children spend time with the husband as follows:
(a)For the children, Thomas and Joshua, in accordance with their wishes; and
(b)For the children, Melanie, Samuel and Sarah, by arrangement with the wife.
That the children communicate with the husband by telephone at any reasonable time, noting the children do not presently have any contact details for the husband.
That pursuant to section 65DA(2) of the Family Law Act 1975 the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders are set out in Annexure A and these particulars are included in these orders.
Property
That pursuant to section 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the husband’s entitlement in the Fund known as the Colonial First State First Choice Personal Super (Fund), the wife shall be entitled to be paid 100% of the husband’s entitlement in the Fund with any adjustments if applicable in accordance with Family Law (Superannuation) Regulations 2001 and that there be a corresponding reduction to the entitlement of the husband that he would have had in the Fund but for this Order.
That, having been accorded procedural fairness in relation to the making of this order, this order binds the trustees of the Colonial First State First Choice Superannuation Trust.
That the operative time for these Orders is the date being 4 days from the date of service of the orders upon the Trustee of the Fund.
That the wife be declared to be the sole legal and beneficial owner of all her right title and interest in and to:
(a)All cash at bank and moneys invested by her in her sole name;
(b)All furniture and personal effects in her possession; and
(c)The motor vehicle in her possession.
That the husband be declared to be the sole legal and beneficial owner of all his right title and interest in and to:
(a)All cash at bank and moneys invested by him in his sole name;
(b)All furniture and personal effects in his possession;
(c)The motor vehicle in his possession; and
(d)The whole of the amount received by him by way of redundancy payment in or about September 2005.
That unless otherwise specified in these Orders and except for the purpose of enforcing the payment of any money due under these or any subsequent Orders:
(a)Each party be solely entitled to the exclusion of the other, in both law and in equity, to all property (including choses-in-action) in the possession of such party as at the date of this order; and
(b)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
That except as otherwise provided in these Orders, the husband and the wife remain liable for any debts, howsoever arising, in their own name at the date of these Orders and in this respect shall indemnify, keep indemnified and hold harmless the other from any liability in relation thereto.
That in the event the husband or the wife refuses or neglects to comply with any of the Orders herein, the Registrar of this Court at its Sydney Registry be appointed pursuant to section 106A of the Act to execute, in the name of the husband or the wife as the case may be, all deeds and instruments necessary to give effect to the orders herein, or any of them, and do all acts and things necessary to give validity and operation to the said deeds and instruments.
That all exhibits tendered in these proceedings be returned at the expiration of one calendar month from the date these Orders become operative, unless an appeal is lodged.
That within 14 days from the date of these Orders the applicant wife cause to be served personally on the husband a copy of these Orders and Reasons for Judgment.
That the operation of these orders be stayed for a period of 42 days.
That the husband have liberty to apply at 7 days notice to vary or discharge these orders, such liberty to apply to expire 42 days from the date of order.
That in the event the husband makes an application in accordance with Order (18) the husband to file in support:
(a)An affidavit setting out his reasons for failing to comply with any order of this Court and of the Family Court of Australia not complied with since the proceedings were commenced;
(b)A sworn financial statement; and
(c)An affidavit in support of the Orders he seeks.
That all existing applications otherwise be dismissed and the matter removed from the list of cases awaiting finalisation.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ORANGE |
PAM 3225 0f 2006
| EP |
Applicant
And
| UP |
Respondent
REASONS FOR JUDGMENT
Introduction
These are proceedings for final parenting and property orders. After a 15 year relationship the parties finally separated in June 2003, although the wife moved to Orange in 1999 and from that time the husband gradually spent less time with the wife and children. The parties are not divorced.
There are 5 children of the marriage, Thomas 16, Joshua 15, Melanie 14, Samuel nearly 13 and Sarah nearly 10 (not their real names).
The wife, 51, lives in central Western New South Wales with the parties’ 5 children as well as 2 of her 5 children from her previous marriage. The wife is dependent on Centrelink for income support, although she says one of her adult sons from her first marriage gives her financial assistance week to week. The husband is presently assessed to pay child support of $21.67 a month but the wife says it is not being paid.
The husband, 39, lives in Sydney. As the husband has not filed any affidavit material since early 2005, there is no evidence before me as to his current living or employment circumstances. According to the wife, the children have not spent any time with the husband since early 2005 nor have they communicated with him since then.
History of proceedings
Parenting proceedings were commenced by the wife by application for final orders and application for a recovery order on 4 February 2005 at Orange Local Court. On 8 February 2005, orders were made by the Orange Local Court requiring the husband to return the 3 children who were then with him, to the wife and providing for the children to live with the wife until the adjourned date of 15 February 2005. The wife sought orders on a final basis that the 5 children of the marriage live with her.
The husband responded on 14 February. He sought orders that 3 of the 5 children of the marriage live with him, the youngest with the wife and that there be no orders in relation to the oldest child Thomas.
In February 2005 the proceedings were transferred to the Parramatta Family Court with a request for an expedited directions hearing. On
6 April 2005 the wife filed a Financial Statement and an amended application seeking both parenting and property orders. The husband filed an amended response setting out the parenting and property orders he was seeking, but did not file a Financial Statement as required by the Rules. The matter came before a Registrar of the Family Court on
5 April 2005 and was adjourned to 3 May 2005 in the Bathurst Registry of the Court. The matter was listed for a conciliation conference on 10 August 2005. Both parties were represented but the husband had still not filed a Financial Statement. On 8 August 2005 Matthews Folbigg, solicitors for the husband, filed a Notice of Ceasing to Act. As a result, the conciliation conference was adjourned to 14 December 2005 at Orange. On 14 December 2005, the court record states “I note the husband’s car broke down on the way to Orange and CMF was conducted by telephone.” The matter was adjourned to 4 April 2006 in the Bathurst Circuit and the husband was again directed to file and serve a Financial Statement. The court record notes the husband’s address in metropolitan Sydney. On that day, the wife deposes to her solicitor being handed a Financial Statement sworn by the husband which she annexed to her primary affidavit in these proceedings. The matter was adjourned to 28 June 2006 for a further conciliation conference. The husband was directed to provide to the wife’s solicitors all documents held by him in relation to his redundancy package from his former employer. On 28 June 2006 a further conciliation conference was held and both parties were represented. As no agreement was reached, the matter was transferred to the Federal Magistrates Court for the Orange Circuit call over on 9 August 2006 and directions were made for each party to file and serve affidavits and updated Financial Statements in readiness for hearing.
The matter first came before me at the call-over on 9 August 2006. The husband’s then solicitor, Ms Garvin, who was not on the Court record, sought leave to withdraw. The husband did not appear in person. I adjourned the matter to the call-over in Orange on 11 September 2006 and directed the applicant wife’s legal representative to notify the husband of the orders made that day and the likely ramifications of the husband’s failure to comply with previous court orders and his non-appearance on the adjourned date. I noted on the Order that the matter would proceed on an undefended basis and orders may be made in accordance with the wife’s application in the event the husband failed to comply with previous orders and/or failed to appear on the adjourned date. That order was sent by the court to Garvins Solicitors. I find the wife’s solicitors complied with the orders of
9 August 2006 by forwarding letters to the husband dated 10 and 14 August 2006, annexures F and H of the wife’s affidavit.
The husband did not file any material as ordered and did not appear by himself, by an agent or by his legal representative on 11 September 2006. Upon being telephoned by the wife’s solicitors on that morning, the husband advised the wife’s solicitor he was on his way to the Court in Parramatta. The court later that day advised the husband the matter was listed for hearing on 13 September 2006 in Orange and would definitely proceed at that time. On 12 September 2006 at 11.18 a.m. (incorrectly noted on the court memorandum as 11.18 p.m.) the court at Orange received a message from a person who identified herself as “Christina” calling on behalf of Mr UP asking the court to call back on a mobile number. On the morning of 13 September 2006 a Christina Smith advised the court that Mr UP would not be attending on
13 September 2006 as he was unable to borrow a car, as intended. Ms Smith gave no explanation as to why the husband could not travel by train to Orange. The husband did not appear on 13 September 2006 nor did anyone appear on his behalf.
As I am satisfied the husband has repeatedly failed to comply with orders of the Family Court and the Federal Magistrates Court, that he was on notice of these proceedings and was given the opportunity to be heard in the proceedings, I proceeded with the wife’s application on an undefended basis.
At hearing the wife sought orders that the 5 children of the marriage live with her and spend time with the husband in accordance with their wishes. In addition, the wife sought orders that the husband’s superannuation interest in Colonial First State First Choice Super Fund be split such that she receives the whole of the husband’s entitlement and that otherwise the parties each retain assets and liabilities held in their respective names. In his Amended Response filed 2 May 2005, the husband sought orders that Joshua, Melanie and Samuel live with him and spend time with the wife and that Sarah live with the wife and that he spend time with Sarah on alternate weekends and at other times. The husband sought orders that his superannuation entitlement be split such that the wife be entitled to a base amount of $20,000.00 and that otherwise each party retain assets and liabilities held by each of them.
The children live with the wife in Orange in rented accommodation. The wife is not employed outside the home. Thomas, Joshua and Christpher attend the local Christian school but will change schools next year as the wife cannot afford the fees. Samuel attends the local high school and Sarah attends a public school in the area. The wife is available to care for the children before and after school. The children spend no time with the husband and do not communicate with him. The wife has not had any communication with the husband since February 2005, although saw him at Court for the apprehended violence proceedings in March 2005.
Parenting issues
Legal principles
The principles governing parenting cases are set out in Part VII of the Family Law Act 1975. Section 60CA provides that I must regard the best interests of the child as the paramount consideration. To determine the child’s best interests I must consider the primary considerations set out in section 60CC(2) and the 13 additional considerations set out in section 60CC(3). Section 60CC(4) requires me to consider also the extent to which each party has fulfilled his or her parental responsibilities, and has facilitated the other parent in fulfilling his or her parental responsibilities. Although the two primary considerations must assume greater importance than the additional considerations when determining what orders are in the best interests of the child, I must consider all the factors before making a determination. I must ensure that any order I make is consistent with any family violence order and does not expose a person to an unacceptable risk of family violence, to the extent that it is possible to do so consistently with the child’s best interests being the paramount consideration.
The primary considerations are firstly the benefit to the child of having a meaningful relationship with both of the child’s parents and secondly, the need to protect the child from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence.
I give these matters very careful consideration because the Act provides that they are primary considerations and because they are consistent with the first two objects of the Act set out in section 60B to which I must have careful regard.
The objects of the parenting provisions of the Family Law Act 1975 are to ensure that the best interests of children are met by:
·ensuring that children have the benefit of both of their parents having a meaningful involvement in their lives, to the maximum extent consistent with the best interests of the child; and
·protecting children from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence; and
·ensuring that children receive adequate and proper parenting to help them achieve their full potential; and
·ensuring that parents fulfil their duties, and meet their responsibilities, concerning the care, welfare and development of their children.
The principles underlying these objects include that children have the right to know and be cared for by both their parents; have a right to spend time on a regular basis and communicate on a regular basis with both their parents and other people significant to their care; parents jointly share duties and responsibilities concerning the care, welfare and development of their children; parents should agree about the future parenting of their children and children have a right to enjoy their culture (including the right to enjoy that culture with other people who share that culture).
The primary considerations
The benefit to the children of having a meaningful relationship with both the children’s parents
The wife deposes to the husband having little to do with the children as they were growing up. The wife says her daughters from her first marriage played a significant role in the care of the younger children.
I accept the wife’s evidence that the children have not seen the husband since 11 February 2005, and have had no communication with him since then. In his affidavit sworn 11 February 2005, the husband deposes to spending at least one weekend a month with the children between 2003 and February 2005. The wife deposes to the husband having no contact with the children from June 2003 until September 2004 when he came to central Western New South Wales to attempt reconciliation for one weekend. After that, the husband made occasional telephone contact with the children. As the husband did not make himself available for cross-examination, I give more weight to the wife’s evidence and find that from the time of their final separation in June 2003, the husband made minimal effort to spend time with or communicate with the children. In November 2004 the wife travelled to New Zealand to visit her father who was very ill. She left the children in the care of two of her adult daughters. The wife says she agreed to the husband’s request while she was away, to have the
4 eldest children stay with him while his parents were staying with him. Thomas returned to the wife on 18 December 2004. In early January 2005 the wife returned to New Zealand because her father died. Upon her return to Australia at the end of January 2005, the husband refused to return the children telling the wife they wanted to remain living with him. The wife says the husband would not allow her to talk to the children. As already noted, the wife then applied to the court for the children’s recovery. The children have subsequently told the wife they were left in the care of the husband’s brother during December and January and did not spend much time with the husband. The children told the wife that from 28 January 2005 until the time of their return to her care, they stayed in various locations before being moved to the home of the husband’s girlfriend, Ms Smith.
In June 2005, the wife endeavoured to facilitate the children spending time with the husband by proposing to the husband’s solicitors supervised contact at a contact centra. The wife completed the intake procedures. The husband’s solicitors did not respond to the wife’s proposal for supervised contact, nor did the husband contact the centre to complete the intake procedures. I find the husband has not sought to spend time with the children since early 2005.
The wife says the husband has not provided the children or the wife with his contact details to enable the children to communicate with the husband.
I am satisfied, that despite the wife’s efforts to assist the children to maintain communication with the husband, the children do not have a meaningful relationship with the husband as a result of his own actions.
The need to protect the children from physical or psychological harm and from being subjected to, or exposed to, abuse, neglect or family violence
I accept the wife’s unchallenged evidence that the husband was aggressive towards the children and the wife during the course of the relationship. I accept their relationship was characterised by separations and reconciliations as the husband kept promising to improve his behaviour. The wife deposes to the husband hitting the girls “for trivial things.” The wife deposes to many incidents from 1991 until the time of final separation when the husband frightened the wife and the children. She says “on many occasions he beat me, pulled my hair and punched me in the face and my body. He would also hit the children, especially the child Michael from my first marriage. He threatened to hurt me more if I went to the police. I was very scared. He would say words to the effect of: ‘I don’t care if you call the police or call anyone for help. I will do anything. I will cut up the police and anyone before they stop me.” In December 1996 the wife deposes to the husband picking up a metal bar and yelling at the wife and children “get out of here.” The wife and children locked themselves in a bedroom. Shortly afterward with the emotional and financial assistance of their church minister, the wife and children moved. Following promises from the husband to change his behaviour leading to another reconciliation, the husband again became abusive. In 1997 the husband said to the wife “Fucking bitch, I am going to kill you.” In 1999 the wife moved with the children to central Western New South Wales to be near her sister, while the husband remained living and working in Sydney.
The wife deposes to the children reporting the husband engaging them in disturbing conversations during the period they were living with him between December 2004 and February 2005. The wife sets out the conversations at paragraphs 54 – 56 of her affidavit, in which the husband denigrated and insulted children of the wife’s first marriage, her first husband and the wife’s family in a way which must have been humiliating and very distressing for the children. Melanie later said to the wife “I’m afraid of him. I am scared he will do something to me” “dad would wake me up after he finished work at night and take me to the back room and tell me sexually explicit stories”. Melanie, aged 14, reported the husband asking her whether she was still a virgin.
In his affidavit sworn in February 2005 the husband alleges that while living with him, the children complained about the wife calling them derogatory names, hitting them and neglecting them. The husband deposes to the children wanting to remain with him and the wife slapping Melanie when she arrived to collect the children on 28 January. When informing the children of the recovery order, the husband deposes to Melanie saying to him “If I have to go back, I am going to run away.” Given the husband has not participated in these proceedings, and given the evidence of the wife which I accept, that the husband has made no effort to spend time with the children or communicate with them in any way since early last year, I do not accept the husband holds fears for the welfare of his children. I prefer the unchallenged evidence of the wife as to what occurred during the period the 3 children lived with the husband during December/January 2005 and as to what occurred when she attended to collect them on 28 January 2005.
The additional considerations
The children’s expressed views and the weight those views should be given
The wife says the children have told her they do not want to see the husband. I take into account the conversation between Melanie and the wife referred to in paragraph 23, in which Melanie expressed her fear of the husband. I accept that the children have told the wife they do not want to see the husband and give this some weight.
The nature of the relationships between the children and each parent and the children and other persons
I am satisfied on the wife’s evidence the children have a close relationship with her and with their older half siblings. On the evidence before me, I can make no findings as to the strength of the children’s relationships with the husband.
The willingness and ability of each parent, and in this case, each party, to facilitate and encourage a close and continuing relationship between the children and the other parent; the capacity of each parent and any other person to provide for the needs of the children including emotional and intellectual needs; the attitude to the children and to the responsibilities of parenthood demonstrated by each parent
I am satisfied on the wife’s evidence that the wife is willing to encourage a relationship between the children and the husband. She said in oral evidence “I have no wish to stop the children seeing their father.” The wife initiated a proposal for the children to spend time with the husband a contact centre which the husband ignored. I am satisfied on the wife’s affidavit evidence that the wife has demonstrated a capacity to provide for the children’s needs and that she has shown a proper attitude to the responsibilities of parenthood. The wife has protected the children from the husband’s abusive and violent behaviour by moving to central Western New South Wales and has supported the children financially and emotionally with minimal assistance from the husband since separation.
The extent to which each parent has fulfilled or failed to fulfil his or her responsibilities as a parent including spending time with the children, participating in decision–making about his/her welfare, and facilitating the other parent to do the same, and the extent to which each parent and party has fulfilled his or her obligation to maintain the children
The wife believes the husband paid the monthly loan repayments of $1,404.26 on the Toyota Tarago until September 2005 when payments stopped. She annexes to her affidavit the loan contract between the husband and AGC dated December 2001. The wife says she did not receive any monies by way of child support. The husband told the wife at the conciliation conference in December 2005 that he was no longer employed and could not make further payments on the car. In early 2006 AGC sought to repossess the Toyota Tarago. They were owed $22,798.28. With the assistance of her adult daughter, the wife borrowed $30,790.77 to discharge her existing loan to the Orange Credit Union and to discharge the debt to AGC. In this way, the wife ensured the family would continue to enjoy the benefits of having a car.
I find the husband has failed to fulfil his responsibilities as a parent by having so little to do with the children from the time of the parties’ separation. The husband has failed to provide the children with any financial or other support since September 2005. The husband has made no inquiries as the children’s welfare since February 2005. I find the husband has failed to fulfil his duties as a parent and give this factor significant weight in reaching my decision.
The likely effect of any change in the children’s circumstances, including the likely effect on the children of any separation from either parent or any other children or other person with whom the children have been living
On the basis of the evidence already referred to, I am satisfied any change in the children’s circumstances would be detrimental to their welfare.
The practical difficulty and expense of the children spending time with and communicating with a parent
It is not possible for the children to spend time with or communicate with the husband while he maintains his present attitude towards spending time with them.
Any family violence involving the children or a member of the children’s family and any family violence order that applies to the children or a member of the children’s family if the order is a final order or the making of the order was contested
As already noted, I find the husband has behaved in a violent and abusive manner towards the children and the wife, that the children have witnessed many episodes of violence and been subjected to inappropriate conversations with the husband.
In February 2005 the police commenced apprehended violence proceedings against the husband for the wife’s protection. On 12 September 2005, final orders were made against the husband for 12 months. That order expired the day before this hearing.
I find the children are best protected from the husband’s abusive and violent behaviour by living with the wife.
The orders which would minimise the risk of there being further court proceedings about the children and whether those orders would be preferable
Given the husband retained the children in early 2005 after a period when the children spent time with him which caused the wife to commence these proceedings, I find the children are less likely to be subjected to further proceedings if I make the orders sought by the wife.
Any other relevant fact or circumstance
Despite seeking orders for 3 of the parties’ 5 children to live with him, the husband has made no effort to maintain a relationship with those children or any of the children since February 2005. The husband has not complied with a number of Court orders in these proceedings. Despite being on notice as to the likely ramifications of his failure to comply with orders and his failure to attend the hearing, the husband has failed to participate in this hearing. I find the husband’s attitude demonstrates an almost reckless disregard for the children’s welfare.
Parental responsibility
Section 61C(1) provides that each parent has parental responsibility for the child but by section 61C(3) the joint parental responsibility is subject to any order the court may make. Parental responsibility relates to decision making, not to the amount of time a child will spend with each parent. Section 61DA requires the court to apply a presumption that it is in the best interests of the child for the child’s parents to have equal shared parental responsibility for the child. Section 65DAC applies whenever a parenting order provides for shared parental responsibility. The presumption does not apply if there are reasonable grounds to believe that a parent of the child (or a person who lives with a parent of the child) has engaged in:
a)Abuse of the child or another child, who at the time, was a member of the parent’s family (or that other person’s family); or
b)Family violence.
As I am satisfied the husband has engaged in violent conduct towards the wife and the children, I find the presumption in favour of equal shared parental responsibility does not apply in this case. In circumstances where the husband spends no time with the children, has no communication with the children and takes no interest in their lives, I find it practical and in the children’s best interests for the wife to have sole responsibility for all decisions relating to the children.
Given my finding that it would not be in the children’s best interests for the parents to have equal shared parental responsibility for the children, I am not required to consider the question of whether spending equal, substantial or significant time with each parent would be in the children’s best interests.
I am satisfied the children should live with the wife and the orders set out at the beginning of these Reasons are in the best interests of the five children of the marriage.
Property issues
The approach to the determination of an application under section 79 of the Family Law Act 1975 is well established by authority (In the Marriage of Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clauson (1995) FLC 92-595) and involves consideration of these questions:
a)What were the assets, liabilities and financial resources of the parties and their values at the time of hearing?
b)What were the financial and non-financial contributions made directly or indirectly by or on behalf of each party to the acquisition, conservation or improvement of the property of the parties?
c)What was the contribution made by each party to the welfare of the family including contributions made in the capacity of homemaker or parent?
d)What is the effect, if any, of any proposed order upon the earning capacity of each party?
e)What matters referred to in sub-section 75(2) of the Act are relevant and what adjustment, if any, should be made as a result of these factors?
f)Have there been any other orders made affecting a child or either party and is child support payable or likely to be payable in the future for the children of the cohabitation?
g)After consideration of these matters, is it just and equitable to make the actual orders?
What were the assets, liabilities and financial resources of the parties at the time of hearing and their values?
The husband has not filed any affidavit evidence in these proceedings as to his financial circumstances or the financial history of the marriage. However, the wife annexes to her affidavit sworn August 2006, a copy of a financial statement sworn by the husband in January 2006, but never filed. On the basis of the contents of that financial statement and the financial statement of the wife sworn in August 2006, I find the parties have at least the following assets and liabilities at the date of hearing:
| Assets at the date of hearing | $ |
| Wife’s credit union and bank account proceeds | Neg |
| Wife’s Toyota Tarago | 20,000.00 |
| Wife’s household contents | 5,000.00 |
| Wife’s personal loan Orange Credit Union | (29,000.00) |
| Wife’s Commonwealth Bank Mastercard | (1,700.00) |
| Wife’s Harvey Norman Buyer’s Edge debt | (2,755.00) |
| Wife’s personal loan from Mr Brown | (9,447.00) |
| Wife’s Centrelink debt | (1,400.00) |
| Wife’s debt to OCS | (1,443.00) |
| Wife’s Telstra and Optus debts | (3,700.00) |
| Husband’s superannuation interest in Colonial First State Superannuation as at 10 August 2006 | 92,040.00 |
| Husband’s bank account proceeds | Neg |
| Husband’s 1995 motor vehicle | 1,500.00 |
| Husband’s Commonwealth Bank Mastercard | (1,235.00) |
| Husband’s Westpac Visa Card | Neg |
| Other assets of the husband | Not known |
| TOTAL NET ASSETS when considered as one pool | 67,860.00 |
Husband’s redundancy payment
I find the husband left his employment with UL on 9 September 2005 [Exhibit 1]. I am satisfied the husband received a redundancy package at that time. I am unable to make a finding on the basis of the documents tendered from the husband’s employer [Exhibit 1] as to the precise amount the husband received from his employer by way of termination package. The figures in Exhibit 1, the employer’s Termination Programme, are difficult to reconcile with the deposit shown in Exhibit 2, the husband’s bank account statement, which shows the husband deposited the sum of $67,678.34 into his account on 9 September 2005. The wife’s counsel was unable to assist with the interpretation of Exhibit 1. There is some evidence to corroborate the figure of $67,678.34 as the amount the husband received. The wife deposes to the husband’s solicitor handing to her solicitor at the Family Court on 4 April 2006 a schedule listing how the sum of $67,678.34 was expended by the husband between 9 September 2005 and 4 April 2006. The schedule, annexure “L” of the wife’s affidavit sworn 8 August 2006, shows the whole of the amount has been spent. The schedule is not signed and has not been verified by the husband. On the basis of the evidence referred to and in circumstances where the husband has provided the court with no evidence on the issue, I accept the wife’s counsel’s submission that on balance, I should find the husband received $67,678.34 on 9 September 2005.
The schedule already referred to, lists the husband’s expenditure from the $67,678.34 as follows:
·Payment Westpac Visa card $10,252.89
·Payment CBA Mastercard $ 5,200.00
·Personal loan with sister $ 5,000.00
·Yearly church donation $ 3,000.00
·Assistance renovations two family homes $20,000.00
·Attend family funeral and funeral expenses $ 6,000.00
·Airfare & pocket money to visit family $10,000.00
·Full car service and parts/maintenance $ 936.51
·Car accessories – CD player $ 668.00
·Car registration $ 736.80
·Personal expenses incl. food and clothing $ 5,884.14
The husband’s bank statement, annexure P of the wife’s affidavit, discloses a withdrawal of $65,225.00 on 12 September 2005. It is evident from the husband’s bank statement for October 2005 [Exhibit 2] and Ms Smith’s bank statement for the same period, that the husband transferred $7,500 to the account of Ms Christina Smith on 11 October 2005. This amount is not specifically referred to in the list. I am therefore not persuaded the schedule provided by the husband is necessarily accurate. The wife’s counsel submits that at least the sums alleged to have been spent on repaying his sister’s loan, assisting with renovations, and a holiday, a total $35,000.00 should be added back to the net asset pool of the parties for distribution between them. Counsel submits this expenditure was outside the range of reasonable expenditure, was not “proper” and should be added back to the pool.
In the case of AB & GB (No.2) [2005] FMCAfam 402, Federal Magistrate Ryan (as she then was) summarised a number of decisions dealing with waste and notional add backs. Her Honour set out the principles which arise from these cases. Two of those principles are:
(vii) Taking the premature distribution into account in a general way pursuant to s 75(2)(o) and applying the cumulative outcome of the ss 79(4) and 75(2) findings to the smaller depleted asset pool may offend s 79(2) notions of justice and equity.
(xiv) even if it does not involve waste, the economic consequences of a significant reduction in the asset pool must be considered.
The wife’s counsel does not suggest the amounts spent by the husband from his redundancy should necessarily be categorised as “waste” as referred to in Kowaliw & Kowaliw (1981) FLC 91-092 and taken into account pursuant to section 75(2)(o). Counsel submits it would be unfair to the wife for the amounts to be omitted from the asset pool. In Townsend & Townsend (1995) FLC 92-569 the Full Court determined funds used by the husband alone from the sale of a taxi should be notionally added back to the pool of assets on a precise dollar basis. The court held there had been a premature distribution of marital property and it would not be just to deal with the issue simply by an adjustment under section 75(2)(o). The Full Court in Omacini & Omacini (2005) FLC 93-218 referred to three categories of cases where it is appropriate to notionally add back to the pool of assets. They are:
(a)Where the parties have expended money on legal fees [DJM and JLM (1998) FLC 92-816];
(b)Where there has been a premature distribution of matrimonial assets [Townsend and Townsend (1995) FLC 92-569]; and
(c)In the circumstances outlined by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092.
The husband did not disclose to the court or to the wife the receipt of his redundancy payment until the matter was before the Family Court on 4 April 2006, 7 months after the event. By that time, the husband says he had spent all the money. I am satisfied on the basis of the limited evidence before me that the husband has prematurely distributed matrimonial funds in the full knowledge of the wife’s pending claim for property settlement and in the knowledge of his obligation to make full and frank disclosure of his financial position.
I am satisfied at least some of the funds expended should be added back to the net asset pool to be distributed between the parties. In deciding the amount which should be added back, I take into account that the husband was unemployed from the time of the redundancy payment and would need some funds to support himself and to pay outstanding credit card debts. In the absence of other evidence, I am satisfied the amounts paid to assist with renovations, to his sister, to the church and for his visit to his parents and family should be notionally added back to the pool. This amounts of $38,000.00.
Superannuation entitlements
The husband’s interest in UL Super is an accumulation interest. I am satisfied on the basis of the letter from UL Super to the wife’s solicitors of 25 February 2005, annexure E to the wife’s affidavit, that the husband’s eligible service period commenced on 23 January 1995. As the only substantial asset of the parties is the husband’s superannuation entitlement, the wife seeks a splitting order in relation to that interest.
I am satisfied the husband’s superannuation interest was accumulated during the course of the parties’ marriage and after separation in 2003. In these circumstances, I find it appropriate to adopt an integrated approach to the superannuation and non-superannuation assets of the parties. The majority of the Full Court in Coghlan & Coghlan (2000) FLC 93-220 said there is no binding principle as to the exercise of the Court’s discretion in deciding which approach should be adopted:Nothing we have said in this judgment would prevent a Court in the exercise of its discretion from including a superannuation interest as an item of property in the list of property which is drawn as ‘the first step’ in the determination of proceedings under s79, whether or not a splitting order is sought in those proceedings.
I therefore find the net asset pool of the parties, including the husband’s superannuation entitlements and including the notional sum of $38,000.00 to be added back, to have a total net value of $ 105,860.00.
Contributions
The court must consider all the contributions, both financial and non-financial to the acquisition, conservation and improvement of the parties’ assets as well as to the welfare of the family before and after separation. The Full Court said in Aleksovski & Aleksovski (1996) FLC 92-705 (at 83,437):
It is therefore necessary…[to] weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such assessment into a percentage of the overall property of the parties.
The court must consider the contributions in an overall sense both before and after separation: Sippel & Sippel [2004] FamCA 201.
Financial contributions
I accept the wife’s evidence that neither party had assets of significance at the commencement of cohabitation.
The wife says she did not have paid employment during the marriage. The wife says until 1995 the husband was mostly unemployed. From 1995 until 2005 the husband worked as a process worker at UL. The husband’s taxation assessment for the year ending June 2005, annexed to the wife’s affidavit, states the husband’s taxable income as $69,393.00 in that financial year. The wife says the family received assistance and support from the Smith Family, St Vincent de Paul and the Salvation Army during the relationship. Since separation the wife and children have received assistance from their church.
Apart from “a couple of second hand cars” the wife says the parties did not acquire assets of significance during the marriage. In December 2001 they purchased a Toyota Tarago in the wife’s name. The wife believes the husband borrowed the purchase funds from AGC Finance and met the monthly payments on the loan until September 2005.
From the documents tendered from UL and annexure E of the wife’s affidavit, I am satisfied the husband’s superannuation has accumulated since January 1995 when the parties were living together. The value of the interest as at 1 July 2004 was $72,019.33, at 2 February 2005, $84,480.64 and has a present value of $92,040.00.
I am satisfied the husband made a significantly greater financial contributions to the assets of the marriage than the wife.
Non-financial contributions
Neither party deposes to making particular non-financial contributions during the marriage.
Contributions as homemaker and parent
On the wife’s evidence, I find the wife took the majority responsibility for the care of the 5 children during the marriage and since separation. The High Court in Williams v Williams (1985) 10 Fam LR 355 held the contribution made by a wife to the welfare of the family, by caring for the children after separation is a factor within section 79(4)(c) of the Family Law Act 1975. I find the wife made the significantly greater contribution as homemaker and parent during cohabitation and after separation.
What is the effect, if any, of any proposed order upon the earning capacity of each party?
The property orders that I have made in this matter will not affect the earning capacity of either party.
The wife’s counsel submits that on the basis of the unchallenged evidence of the wife, I should find the parties’ overall contributions to be approximately equal. I accept counsel’s submission.
What matters referred to in sub-section 75(2) of the Act are relevant?
The husband is 39 and the wife 51. There is no evidence before me in relation to either party’s health.
The wife, born in Tonga, moved from Tonga to New Zealand with her family in 1976. The parties lived in New Zealand until early 1991 when they moved to Australia. The wife has 10 children, 5 from her first marriage and 5 from her marriage to the husband. The wife says and I accept, that she has no formal training or qualifications. She has not been in paid employment since the parties started living together. The wife’s statement of financial circumstances sworn in August shows the wife has a shortfall each week between her income and expenditure. The wife has assets and liabilities with a negative value. The wife says she has borrowed substantial funds from her church leader, Mr Brown and makes repayments when she can. The wife owes fees to OCS and as a result the three eldest girls will have to change schools next year. The wife owes money to Telstra and Optus. Her landline phone has been disconnected. The wife has always had the care of the parties’ 5 children and wishes to continue in her role as a full time parent.
The only evidence before me as to the husband’s financial circumstances is a sworn but unfiled financial statement dated January 2006. The husband deposes to receiving an income of Nil, having expenses of $31.92, a debt of $1,235.00, a car and a superannuation entitlement. He deposes to living with a girlfriend, Christina Smith who has an income of $747.15 a week. The husband is paying no child support. There is no evidence before me as to whether the husband is presently working. I am however satisfied, whether he is working or not, the husband at 39, has the capacity for employment. I am satisfied the husband has the capacity to earn an income of nearly $70,000 as he earned in the 2005 financial year. The husband has no dependents.
The Full Court in In the Marriage of Clauson (1995) FLC 92-595 said:
It has long been recognised that in most cases the most valuable “asset” a party can take out of the marriage is a substantial, reliable income earning capacity.
Even if he remains unemployed, I am satisfied the husband is in a stronger financial position than the wife. He has the benefit of living with a partner who is earning an income.
I find the wife’s earning capacity at 51, is much less than that of the husband at 39. I have made a significant adjustment in the wife’s favour as a result of this factor.
The wife deposes to owing a debt to Centrelink of $7,000 in 1999. The wife says because the husband stayed with her between 1997 and 1999 the parties were overpaid by Centrelink. The wife is repaying the debt without assistance from the husband, from her Centrelink benefits. As a result, I make a small adjustment in her favour pursuant to section 75(2)(o).
I accept the wife’s counsel’s submission that the wife should be entitled to a further 10-15% by way of adjustment for section 75(2) factors. Weighing the various factors, I assess the adjustment the wife should receive at 14%. This will give the wife 64% of the total net asset pool overall and the husband 36%.
Is the result just and equitable?
Section 79(2) provides that:
The Court shall not make an Order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.
The wife presently has assets and liabilities with a negative value of ($24,445.00). I have found the net asset pool of the parties is $105,860.00. For the wife to receive 64% of the overall net asset pool of the parties, she will need $67,750. This means she will need the whole of the husband’s superannuation entitlement (92,040.00) and an additional $155.00.
The husband will be entitled to 36% of the overall net assets. If the husband retains the assets set out in the following table, the husband will receive 36.1% of the net asset pool:
| Assets to be retained by husband | $ |
| Husband’s superannuation entitlements | Nil |
| Husband’s bank account proceeds | Neg |
| Husband’s motor vehicle | 1,500.00 |
| Notional assets from redundancy payment | 38,000.00 |
| Husband’s credit card debts | (1,235.00) |
| TOTAL | 38,265.00 |
If the wife receives the assets and liabilities set out in the following table which will give her 63.9% of the net asset pool:
| Assets to be retained by wife | $ |
| Wife’s bank account proceeds | Neg |
| Wife’s debt to Orange Credit Union | (29,000.00) |
| Total of other debts | (20,445.00) |
| Wife’s motor vehicle | 20,000.00 |
| Wife’s household contents | 5,000.00 |
| Husband’s superannuation entitlement – 100% | 92,040.00 |
| TOTAL | $67,595.00 |
I find this distribution of assets to the wife is so close to the 64% the wife is entitled to receive that I have decided not to require the husband to pay an additional $155.00 to give the wife precisely 64%.
On the evidence of the wife’s solicitor sworn 11 September 2006 and the letter from the Financial Services Administrator of the husband’s superannuation fund dated 14 September 2006 [Exhibit 5] I am satisfied that the Trustees of Colonial First State Superannuation have no objection to the orders sought by the wife for a superannuation splitting order, orders I have made in similar terms.
I am satisfied that in all the circumstances of this case, the Orders I have made are just and equitable.
I certify that the preceding seventy-six (76) paragraphs are a true copy of the reasons for judgment of Sexton FM.
Associate: Collette McFawn
Date: 18 September 2006
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