Epworth and Epworth (No 2)

[2009] FamCA 853

FAMILY COURT OF AUSTRALIA

EPWORTH & EPWORTH (NO. 2) [2009] FamCA 853

FAMILY LAW – CHILDREN – With whom children live – Sole parental responsibility – Best interests
FAMILY LAW – PROPERTY SETTLEMENT – Non-participation by the wife

Family Law Act 1975 (Cth)

Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-143

APPLICANT: Mr Epworth

RESPONDENT: Ms Epworth

INDEPENDENT CHILDREN’S LAWYER:

FILE NUMBER: MLC 9473 of 2007

DATE DELIVERED: 7 August 2009

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 7 August 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Dickson

SOLICITOR FOR THE APPLICANT: Madisons Lawyers

THE RESPONDENT: No appearance

COUNSEL FOR PROPOSED INTERVENERS Mr Gregory

SOLICITOR FOR PROPOSED INTERVENERS Kenna Teasdale Lawyers

COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER Ms Lonergan

SOLICITOR FOR INDEPENDENT CHILDREN’S LAWYER Victoria Legal Aid

COUNSEL FOR OTHER PARTIES Mr Hannan

SOLICITOR FOR OTHER PARTIES Thomson Playford Cutlers

Orders

1. That the husband have sole parental responsibility for the children S born … August 1992 and E born … November 1997.

2. That the children reside with the husband.

3. That the children spend time with and communicate with the wife as may be agreed between the parties.

4. That the former matrimonial home at C being the whole of the land more particularly described in Certificate of Title Volume … Folio … be sold wholly out of court subject to the following conditions:

   (a)that within 14 days of service of these orders upon the wife which service is to be effected by forwarding a sealed copy to the wife via registered post to the C property, the wife vacate the said property and thereafter, the husband be entitled to exclusive possession of the said property pending its sale;

   (b)to assist the wife vacate and meet removalist and rental costs, the husband pay or cause to be paid to the wife the sum of $15,000 within 14 days of the date of these orders and such sum, shall be deducted at settlement from any monies ordered to be paid to the wife;

   (c)that the husband have the conduct of the sale;

   (d)that the husband, in conjunction with the selling agent, determine what, if any, restorative work is required to present the property for sale to maximise its market value;

   (e)the husband be reimbursed any monies expended upon the said property upon provision by him of receipts for work undertaken, materials and/or furnishings required to replace any broken, missing or damaged items and such payments shall be made prior to the distribution of any funds to the parties from the proceeds of sale;

   (f)that the wife be restrained from:

   (i)interfering in any way with the said sale;

   (ii)contacting or approaching the selling agents and/or any member of their staff;

   (iii)attending at the property on the day of the auction; or

   (iv)engaging in any activity, designed to frustrate or interfere with the said sale.

   (g)    that the proceeds of the said sale be disbursed as follows:

   (i)to pay agents’ commissions, costs and expenses attributable to the sale;

   (ii)any legal fees, including disbursements, on the sale;

   (iii)the reimbursement of the husband upon proof of receipt of monies referred to in these orders in respect of the preparation of the property for sale; and

   (iv)the balance then remaining be divided as to 25 per cent to the wife after deducting the $15,000 referred to in these orders and any remaining monies thereafter be paid to the husband.

5. That the wife retain to the exclusion of the husband:

   (a)the Voyager motor vehicle registered number …;

   (b)the contents of the property save for the husband’s personal memorabilia including his wedding ring, stamp and coin collection, photo collection; and

   (c)the savings held by the wife in her name.

6. That the husband retain and the wife relinquish any interest in any superannuation entitlement in the possession of the husband.

7. That the husband indemnify and keep the wife indemnified in respect of any personal liability relating to M Company Pty Ltd including any taxation liability or third party action arising out of his conduct of M Company Pty Ltd.

8. That within 30 days of the date of these orders, the wife do all things and sign all necessary documents to:

   (a)resign her directorship in M Company Pty Ltd; and

   (b)transfer to the husband and/or his nominee, her shareholding in M Company Pty Ltd.

9. That should the wife fail to comply with the provisions of these orders in respect of the execution of any document, a registrar of the Court is appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to be appointed to sign such document in the name of the wife.

10. That should the wife fail to vacate the said property pursuant to these orders, then pursuant to Rule 20.54 of the Family Law Rules 2004, a warrant for possession issue authorising all officers of the Australian Federal Police to remove the wife from the property and give possession of it to the husband and for the purposes of obtaining and issuing that warrant, an affidavit from the husband’s solicitor deposing to the wife’s failure to vacate shall constitute sufficient evidence.

11. That the Independent Children’s Lawyer be discharged from the proceedings.

12. That all outstanding applications be otherwise dismissed and removed from the list of cases awaiting a hearing.

13. That the wife be served by the husband with a copy of these orders by registered post to the wife at the C property.

14. That pursuant to s.65DA(2) and s.62B, the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders and details of who can assist parties adjust to and comply with an order are set out in the Fact Sheet attached hereto and these particulars are included in these orders.

IT IS NOTED that publication of this judgment under the pseudonym Epworth & Epworth is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 9473 of 2007

MR EPWORTH

Applicant

And

MS EPWORTH

Respondent

REASONS FOR JUDGMENT

1. Mr Epworth, to whom I shall refer as the husband, and Ms Epworth, to whom I shall refer as the wife, were married in 1988, separated in 2006, and were divorced on 26 June 2008.  Sadly, the period since separation has been marred with difficulty culminating in court proceedings both about the children of the marriage and the financial issues arising from it.  The husband applied for final orders and yesterday I heard the application in the absence of the wife.  I reserved my judgment overnight.  The following are my reasons for the orders I will pronounce. 

2. By way of further background:  the husband is a 56-year-old company director, and the wife is 51 years of age and, as best I can determine, unemployed.  There are three children of the relationship:  G, who is 20 years of age who is a university student;  S, who is about to turn 17 years of age;  and E, who is 11.  S and E live with the husband and attend a private school, the fees for which the husband is personally liable.

3. The wife is clearly unwell but the evidence is lacking because she has not participated in the proceedings or, for that matter, in other proceedings in the Supreme Court of Victoria, to which I shall return.  There are two indications of concern about the wife’s mental health.  They are:  first, that she failed to attend a court ordered psychiatric examination; secondly, only days ago because of her non-responsiveness to the children, the police broke into the former matrimonial home to find the wife locked in an en suite.  That culminated in an ambulance attending.  Despite the appearance of normality in the home, her behaviour could not be viewed as normal.

4. Having said that, I cannot force people to participate in proceedings but I can bring to an end litigation which otherwise precludes the husband from getting on with his life and enabling the children to move on as well.  The difficulty in this latter process is that the absence of participation of the wife makes the task of the Court more difficult in determining what is in the best interests of children but also what is a just and equitable alteration of property interests. 

5. In these reasons the following statements of fact constitute findings of fact.  The onus of proving those facts has fallen on the husband.  The standard of proof is the balance of probabilities.  I say, therefore, that the findings have been established according to that standard.

6. The proceedings began on 23 August 2007 when the husband filed an application for final orders.  The application related only to parenting orders at which time the two younger children were living with the wife.  On 24 September 2007 the wife filed a response to the husband’s application.  She sought that the children live with her, that the husband pay spousal maintenance, and that he transfer to her the former matrimonial home at C without encumbrance.  She also sought a further undefined adjustment of property.

7. The initial hearings were uncontroversial and before registrars.  On 4 February 2008 the parties attended a conciliation conference.  By June 2008, however, there were problems and a parenting dispute loomed.  On 30 June 2008 Senior Registrar Fitzgibbon ordered the children live with the wife but that the parties attend upon psychologist Mr P.  The Senior Registrar ordered the appointment of an Independent Children's Lawyer. 

8. On 23 September 2008 Senior Registrar Fitzgibbon made consent orders organised by the parties themselves that both husband and wife attend upon psychiatrist Dr E.  That order arose out of a recommendation by Mr P.  Similarly, the wife was ordered to take the children to psychologist, Dr N. 

9. Mr P wrote in a report attached to an affidavit that, depending upon a particular finding, it may be that the wife had severe personality dysfunction.  The concerning dispute centred around two letters which the husband said and the wife denied, were written by the wife.  The letters were annexed to the husband’s affidavit.  They made serious allegations against the husband’s brother, a medical practitioner, and then other people.  It could only be said the meticulous allegations were breathtaking. 

10. The relevance of this issue was that yesterday, a legal practitioner, Mr Hannan, sought to appear in the proceedings between the husband and the wife.  It transpired that he acted for the husband’s brother and others.  In the Supreme Court of Victoria in July 2009, a judgment was entered against the wife for a sum in excess of $1.3 million in favour of the husband’s brother and others. 

11. Consistent with my earlier observation about the health of the wife, his Honour noted in his orders that:

    The court took into account the potential ‘grapevine effect’ within the Jewish Community, but also took into account the fact that a reasonable and careful reader of the publications would conclude that they were the product of a vindictive and unbalanced mind and ought not to be accorded credibility.

    The wife did not defend those proceedings.  The judgment is against her. 

12. Up until 24 November 2008 the wife was represented by legal practitioners who became applicants for orders before me.  Those orders sought the payment of their costs from the entitlement of the wife. 

13. On 11 December 2008 the Senior Registrar, in the absence of the wife, made orders that the husband have sole parental responsibility for the children and that they live with him.  The Senior Registrar said that there had been a significant change of circumstances since September 2008 in that the wife’s psychological and day-to-day functioning had significantly deteriorated.  In essence, the wife was unable to care for the children.

14. On 10 February 2009 of the hearing before Registrar Kaur, the wife did not attend. 

15. On 15 April 2009 of the hearing before me, again the wife did not attend.  On 15 April 2009 I set the matter down for final hearing and ordered the service of documents by post on the wife at the former matrimonial home.  That was the property to which I have earlier referred about the police breaking in.

16. Since April 2009 the wife has not participated in the proceedings nor filed anything.  She was called yesterday but did not appear. 

17. At yesterday’s hearing, the husband told me under oath of what the police found recently when they broke into the home.  That incident was precipitated by anxiety on the part of the children who could not get in touch with their mother.  The husband’s evidence was that the wife’s involvement with the children has become sporadic.

18. The wife did not comply with my orders of April 2009.  I am satisfied that she has been properly served.  Her application for orders, as reflected in the response filed 24 September 2007 must therefore be struck out. 

19. Rule 16.11 of the Family Law Rules 2004 provides that if a party does not attend when a trial starts the other party may seek to proceed with their application and seek the orders that they have set out.

20. I am satisfied upon the application of the husband that that provision should be applied and the husband have the right to now prove his case in the usual way. 

21. Yesterday, the Independent Children's Lawyer appointed by the Court, Ms Lonergan, appeared and agreed that the orders of Senior Registrar Fitzgibbon should be made final and that the Independent Children's Lawyer should be discharged.  I agree with that course of action.

22. Before I turn to the financial issues, I find that the orders relating to parenting issues should be made final. 

23. The husband relied upon his affidavit material and the evidence that he gave me on a viva voce basis.  Part VII of the Family Law Act 1975 (Cth) (“the Act”) provides that each of the parents of a child who has not attained the age of 18 has parental responsibility for that child. Parental responsibility about decisions for the future of a child means all the duties, powers, and authority by which parents, by law, have in relation to the child.

24. Because of s 61C(3), joint parental responsibility is subject to any order of the Court and s 61D(1) provides that:

    A parenting order confers parental responsibility for a child on a person, but only to the extent to which the order confers on the person duties, powers, responsibilities or authority in relation to the child.

25. Section 64B(2) provides that:

    A parenting order may deal with one or more of the following:

    (a) the person or persons with whom a child is to live;

    (b) the time a child is to spend with another person or other persons;

    (c) the allocation of parental responsibility for a child.

    There are other sub-provisions but they are not relevant for my purposes today.

26. Section 64B(3) provides:

    Without limiting paragraph (2)(c), the order may deal with the allocation of responsibility for making decisions about major long‑term issues in relation to the child.

27. Section 4 defines “major long-term issues”:

    "major long-term issues" , in relation to a child, means issues about the care, welfare and development of the child of a long-term nature and includes (but is not limited to) issues of that nature about:

    (a)the child's education (both current and future); and

    (b)the child's religious and cultural upbringing; and

    (c)the child's health; and

    (d)the child's name; and

    (e)changes to the child's living arrangements that make it significantly more difficult for the child to spend time with a parent.

28. On the evidence, it is not possible for the parents in this case to currently have any form of arrangement under which the tasks of decision-making could be required to be performed together.  Under the circumstances, the husband should have sole parental responsibility.

29. The objects and principles in Part VII, to which I have already referred, are set out in s 60B(1).  That section provides in detail:

    (1)  The objects of this Part are to ensure that the best interests of children are met by:

    (a)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

    (b)protecting children from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence; and

    (c)ensuring that children receive adequate and proper parenting to help them achieve their full potential; and

    (d)ensuring that parents fulfil their duties, and meet their responsibilities, concerning the care, welfare and development of their children.

30. Subsection (2) of s 60B sets out the principles underlying those objects.  The principles are to be applied when it is or would be in the child’s best interests.  The section provides:

    (2)  The principles underlying these objects are that (except when it is or would be contrary to a child's best interests):

    (a)children have the right to know and be cared for by both their parents, regardless of whether their parents are married, separated, have never married or have never lived together; and

    (b)children have a right to spend time on a regular basis with, and communicate on a regular basis with, both their parents and other people significant to their care, welfare and development (such as grandparents and other relatives); and

    (c)parents jointly share duties and responsibilities concerning the care, welfare and development of their children; and

    (d)parents should agree about the future parenting of their children; and

    (e)children have a right to enjoy their culture (including the right to enjoy that culture with other people who share that culture).

31. It is not possible in this case, on the evidence, to say that the objects and principles could be fulfilled without placing these children at some risk.  Fundamental to my decision in this case is s 60CA which says:

    In deciding whether to make a particular parenting order in relation to a child, a court must regard the best interests of the child as the paramount consideration.

32. Section 60CC provides a check list that the Court must consider relating to what is in the best interests of a child.  It provides:

    (3)      Additional considerations are:

    (a)any views expressed by the child and any factors (such as the child's maturity or level of understanding) that the court thinks are relevant to the weight it should give to the child's views;

    (b)the nature of the relationship of the child with:

    (i)       each of the child's parents; and

    (ii)other persons (including any grandparent or other relative of the child);

    (c)the willingness and ability of each of the child's parents to facilitate, and encourage, a close and continuing relationship between the child and the other parent;

    (d)the likely effect of any changes in the child's circumstances, including the likely effect on the child of any separation from:

    (i)       either of his or her parents; or

    (ii)any other child, or other person (including any grandparent or other relative of the child), with whom he or she has been living;

    (e)the practical difficulty and expense of a child spending time with and communicating with a parent and whether that difficulty or expense will substantially affect the child's right to maintain personal relations and direct contact with both parents on a regular basis;

    (f)the capacity of:

    (i)       each of the child's parents; and

    (ii)any other person (including any grandparent or other relative of the child);

    to provide for the needs of the child, including emotional and intellectual needs;

    (g)the maturity, sex, lifestyle and background (including lifestyle, culture and traditions) of the child and of either of the child's parents, and any other characteristics of the child that the court thinks are relevant;

    (h)if the child is an Aboriginal child or a Torres Strait Islander child:

    (i)the child's right to enjoy his or her Aboriginal or Torres Strait Islander culture (including the right to enjoy that culture with other people who share that culture); and

    (ii)he likely impact any proposed parenting order under this Part will have on that right;

    (i)the attitude to the child, and to the responsibilities of parenthood, demonstrated by each of the child's parents;

    (j)any family violence involving the child or a member of the child's family;

    (k)any family violence order that applies to the child or a member of the child's family, if:

    (i)       the order is a final order; or

    (ii)the making of the order was contested by a person;

    (l)whether it would be preferable to make the order that would be least likely to lead to the institution of further proceedings in relation to the child;

    (m)any other fact or circumstance that the court thinks is relevant.

    (4)      Without limiting paragraphs (3)(c) and (i), the court must consider the extent to which each of the child's parents has fulfilled, or failed to fulfil, his or her responsibilities as a parent and, in particular, the extent to which each of the child's parents:

    (a)      has taken, or failed to take, the opportunity:

    (i)to participate in making decisions about major long‑term issues in relation to the child; and

    (ii)to spend time with the child; and

    (iii)to communicate with the child; and

    (b)      has facilitated, or failed to facilitate, the other parent:

    (i)participating in making decisions about major long‑term issues in relation to the child; and

    (ii)spending time with the child; and

    (iii)communicating with the child; and

    (c)has fulfilled, or failed to fulfil, the parent's obligation to maintain the child.

    (4A)    If the child's parents have separated, the court must, in applying subsection (4), have regard, in particular, to events that have happened, and circumstances that have existed, since the separation occurred.

1. I can only make findings on the evidence.  The aspects of parenting relating to the wife are sadly not available to me.  I find that whilst the children want to spend time with the wife, they are hampered by her lack of responsiveness.  In turn, that gives rise to questions about her capacity and her level of responsibility.  I find there is no evidence to suggest concern about the husband’s capacity or level of parental responsibility.  It is appropriate, therefore, to order that the children live with the husband.  The orders I propose are in the best interests of the children.

2. As I intend to make parenting orders, s 61DA requires that I apply the presumption that it is in the best interests of the children for the children’s parents to have equal shared parental responsibility for them.  This exercise needs to be undertaken after I have considered the question of the parenting orders that I have just indicated that I intend to make. 

3. The rebuttal of the presumption in the Act arises from a finding of either family violence or, alternatively, where it is not in the child’s best interests. In this case I am satisfied for the general reasons set out above that the presumption must be rebutted because it is not in the best interests of the children that their parents have equal shared parental responsibility .

4. I turn then to the financial issues. 

5. On 1 July 2009 Kenna Teasdale Lawyers filed a notice of intervention.  They were the former lawyers for the wife.  Mr Gregory appeared on behalf of the firm.  That firm has a judgment against the wife in the Melbourne Magistrates Court and the wife owes them over $27,000.  I am satisfied that the wife was served properly about the firm’s intervention.

6. Mr Dixon of counsel appeared for the husband. 

7. The husband relied upon, and I have read into the evidence, the following:  an affidavit filed by the husband on 26 June 2009 together with a financial statement;  further, affidavits by the husband’s brother, a Mr B, a Mr F and a Mr R.  The husband also relied upon a financial statement sworn by the wife and filed in 2007 to complete evidence about the asset position.

8. The pathway that I was urged to follow, and will now do so, was set out in Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-143. The Full Court there set out a pathway as a four-step process. First, the Court should define the pool of assets and liabilities attributing to the various aspects of it, appropriate findings as to value. Secondly, the Court should assess and give weight to the various contributions which are required as described in s 79(4) of the Act. Thirdly, the Court should make any necessary adjustment as a result of the factors set out in s 75(2) as they apply to each party. And, fourthly, a Court should assess the positions and be satisfied that the outcome of the determinations is just and equitable. It is important to note that it is not the percentage division but the underlying value of the determination which must be just and equitable.

9. The husband’s evidence was that at the time of the marriage the parties had little, if any, assets.  He said his father, as a form of estate planning and family financial prudence, established the family trust known as the Epworth Family Trust in 1969.  At that time his parents were the appointors and guardians to the trust, and the trustee was and remains Y Nominees Pty Ltd.  The directors of Y Nominees Pty Ltd are his two sisters, his brother and himself.  The trust was varied by deeds of variation on four occasions.  The first in 1986 resulted in himself and three siblings being added as appointors together with the parents with the powers to be exercised jointly.  In 1991 the husband’s parents were removed as appointors and he and his siblings given the power to make decisions based on a 75 per cent majority of all of the appointors.

10. Some years after setting up the trust, the husband’s father was also involved in a company known as H Holdings Pty Ltd.  The husband is currently a director, along with his sisters and his brother.  Y Nominees Pty Ltd is a shareholder in H Holdings Pty Ltd.  H Holdings Pty Ltd is the trustee of a unit trust which owns a number of units together with various investments and savings. 

11. In 1989 the husband’s father purchased a commercial office in Melbourne.  The title to that property is held by K Nominees Pty Ltd, and that company is the nominee of D Pty Ltd.  D Pty Ltd is the trustee of six unit trusts.  The family trust, the Epworth Trust, holds effectively 50 per cent of the various assets in those trusts on behalf of H Unit Trust, and therefore ultimately the Epworth Family Trust itself.

12. Over the years, the husband has received distributions or payments from the Epworth Family Trust.  That trust has paid expenses on behalf of both the husband and the wife, and more importantly of late, made payments direct to her or on her behalf.  Payments from the trust were received by the parties throughout the marriage, but they were increased after December 2004.  Those payments have been made through H Holdings Pty Ltd.  During his lifetime, the husband’s father charged all amounts applied for the husband’s family’s benefit to a loan account.  The husband annexed to his affidavit a schedule showing the payments made.

13. Between 2004 and 2008, the payments totalled over $600,000.  In the 10 months to 30 April 2009, the husband and the wife received $190,000.  The wife has received $24,800 by way of direct payments and a further $7000 of household payments.  These latter payments become relevant for the purposes of including in the pool cash assets that the wife had in 2007, which are referred to in her financial statement, because whilst I do not know what she has done with those amounts, it seems clear she was being supported by the family trust.  School fees have also been paid for the children from those various resources.

14. Neither the husband nor the wife made any contributions of a financial nature or otherwise to the assets of either of the trusts to which I have referred. 

15. In 1990, the husband’s father advanced him $800,000 by way of a mortgage loan to fund the purchase of his first home in V.  Upon the death of the father, his estate consisted of a loan account standing in his favour in the trust of approximately $475,000, together with the loan owing by the husband to his father of $800,000 and a bond paid in relation to his entry into a nursing home.

16. On the father’s death, he left the mortgage loan to a testamentary trust of which the husband is the sole beneficiary.  The trustees are himself, his brother and sisters.  In effect, I find therefore that the husband owes the testamentary trust an amount of $800,000, but as he is the sole beneficiary, it matters little because the sum would otherwise be paid if in fact the loan was called up.  Effectively, under the calculations I have done, the loan has been forgiven.

17. The significance of all of this evidence can be seen in the direct tracing, however, of the equity in the current home.  I will return to that subject shortly.  The husband currently conducts a business through his own family trust.  That business was purchased in 1988 from funds provided by the husband’s late father’s unit trust.  The trust advanced $200,000 to purchase the business.  This was initially charged to his loan account, and his father transferred a similar amount to him as well.  There has been no repayment of those funds.

18. The trustee of the husband’s trust is M Pty Ltd, of which the husband and his late father were the original directors.  The husband and wife each hold a share.  That shareholding needs to be finalised pursuant to the orders that I propose to make.  The husband’s income from the business is modest, and having regard to the expenses of the children, including private school fees, it is clear that the husband and, to that extent, also the wife, have benefited significantly from the husband’s family, and in particular the family trust.

19. At the time that the parties commenced their relationship, the husband was living in a property that was owned by the family trust.  The property was sold in about 1990 and the proceeds were retained by that trust.  The sale of the property occurred following the husband’s purchase of V property, but V property also required renovations.  Whilst the V property was renovated, the parties remained in the unit. Obviously, therefore, it is a significant contribution by the husband’s family towards the benefit of the husband and the wife.

20. I have already mentioned the $800,000 advanced by the husband’s father.  That sum went towards the purchase of the property in V.  The moneys covered all purchase costs including stamp duty.  The renovations that were undertaken in respect of the V property were also paid from funds advanced by the father, although the husband in his evidence was unsure exactly how much.  In 2002, the V property was sold for $1.28 million.  After the sale, the parties rented for some time until the present family home at C was purchased for $1.21 million.  That sum increased to $1.29 million after the various expenses of acquisition were included.

21. In respect of the management of the household, in other words, the non-financial contribution that I have to consider, and in particular the care of the children, the husband said that the wife was primarily engaged as homemaker and parent for the children whilst he engaged in his business activities.  However, the husband also said that he was involved with the children; driving them to school subsequent to separation.  Because of the behaviour of the wife, that task became more difficult.  He said he regularly made the school lunches for the children and interacted with them both before and after school and on weekends. He was involved in their cultural and religious activities. Subsequent to the orders in December 2008, to which I have referred, the children have lived with the husband and he has been their primary carer. 

22. The husband relied upon the evidence of various valuers, Mr R, Mr B and Mr F.  I accept their unchallenged evidence. 

23. In the financial statement in 2007 filed by the wife, she deposed to having just over $118,000 in accounts in the United States of America.  There is no evidence as to what happened to those funds, nor whether the currency was in United States dollars or Australian dollars.  I would accept in the absence of any evidence to the contrary that it was in Australian dollars.  I say that because of the fact that the document was drawn by Australian lawyers.

24. The husband deposed to having interest in his family inheritances which are as yet undistributed, but he also has that significant debt to the family trust which I accept is real.  I accept all of that evidence. 

25. I find therefore the pool of assets to be and the relevant assets and values are as follows: 

    (i)C property, $1.625 million;

    (ii)B Epworth Family Trust, which is the business, $7,897; 

    (iii)The wife’s cash at the bank, referred to in her financial statement, $118,000; 

    (iv)The wife’s car, $8,000; 

    (v)The husband’s superannuation, $297,205; 

    (vi)The husband’s entitlement to his father’s estate, $95,119; 

    (vii)The husband’s entitlement to his mother’s estate, $223,478;

    Less a debt owed to the Epworth Trust of $639,269. 

26. I find, therefore, that the net equity of the parties in the assets is $1.735 million.

27. I turn then to the issue of contribution.  Based on the matters to which I have referred, and which I accept, the husband’s contribution was significantly greater than that of the wife.  The husband benefited from family contributions; that must be seen as a contribution by or on his behalf.  His contribution of a non-financial nature during the marriage, and certainly since December 2008, must also be seen as important and significant.  I accept also, however, that the wife had a significant role in caring for the children over what has been a long period of time.

28. I accept that there is also an outstanding loan to the family trust.  Whilst it may not necessarily be called in immediately, I could not find it just and equitable to include all of the credits associated with the family and trust funds, whilst ignoring the other side of the ledger.  It is permissible to assess contributions on an asset by asset basis, but if a global approach provides a just outcome, that is a better way of making the assessment.  Whilst an asset by asset approach may enable a Court to isolate late received inheritances and highlight significant family contributions, the fairer way in this case is to look at the whole matter globally because of the duration of the marriage and the differing roles each party played.

29. I have included all of the assets together rather than to divide them into various categories.  I have included in the category of assets the superannuation of the husband.  Whilst the husband is not retired and is still some years away, it may be included as an asset in the same way as other assets are.  In this case I had included it on the basis that although the value has dropped substantially as a result of the recent world financial turmoil, it is equally plausible that it will go up in the future.  The husband’s contributions are overwhelmingly greater than those of the wife. I assess the contributions in this case as to 70 per cent to the husband and 30 per cent to the wife.

30. Thirdly in the pathway, I turn to the s 75(2) factors.  I have taken into account that both the husband and wife have age on their sides, but I am not at all sure about the wife’s health.  In any event, she appears not to have worked for a number of years whilst managing the family’s household.  Against that, the husband has limited income but the reasonable security of his family’s wealth and that of the trust.  However, he also has significant obligations to care for the children without respite or financial assistance from the wife.

31. From the evidence I have ascertained that the husband lives a modest lifestyle.  I have taken into account the modest lifestyle of the wife, noting that to a large degree she is reliant upon the goodwill of the family.  I do not know what that will mean in the future.  Of significant concern is the fact that the wife now faces a huge liability to creditors, which on any view she could not meet from her entitlements under the orders I propose.  I cannot do much about that because it would seem on the findings of the Supreme Court of Victoria that she is the creator of her own misfortune.  Thus I am conscious that whatever I give her, she will inevitably lose. That is something that could happen to anyone after an alteration of property orders anyway.

32. In this case it seems clear that the wife’s misfortune is not the fault of the husband.  What is important to take into account is that there will be a significant disparity between the husband and the wife as a result of the findings relating to contribution.  That disparity favours the husband by virtue of the findings I have made.  However, this is not an enormous pool of assets, and I would therefore not see the underlying gap as extraordinary and warranting a further large adjustment. 

33. There is a justification for a small adjustment, and having regard to the assumption I have made that the wife has retained her savings and a modest car, it is appropriate that the adjustment I intend to make out of the sale of the home should be increased from just over 23 per cent, on my calculations, to 25 per cent.  In my view, that will leave the wife with $118,000 of savings, a motor car, and notionally a sum of just over $400,000 from the sale of the home.  I say notionally because she may lose it all to her creditors.  In fact, on what I heard yesterday, it is most likely that she will.

34. I decline to make specific orders for the creditors to be paid because there is insufficient funds available and to give them a proportional share may prejudice other creditors or create a preference under the Bankruptcy Act.  After discussion with Counsel, I have decided I should simply injunct the wife from receiving the entitlement under these orders, and for the creditors to take whatever course of action they consider is in their own interests.

35. I was concerned about the wife having access to funds if she has to vacate the former matrimonial home for its sale.  I accept the husband’s proposal of advancing her funds of $15,000, which sum will be adjusted at settlement. 

36. Because of the wife’s absence from the proceedings, I have little confidence in her ability to cooperate. I therefore propose to order the issue of a warrant for possession if the wife does not vacate by a particular time, and also to authorise the Registrar to sign documents in her name under s 106A of the Act. It is important that once the wife has vacated, she not thwart the orders that I propose.

37. The husband seeks injunctions to ensure the effective implementation of the orders. The power to grant injunctions arises under s 114 of the Act. The basis under which an order is made is that the order must be proper. Having regard to the position adopted by the wife, I find it is proper to make the orders proposed by the husband in those areas.

38. The husband also sought an order for specified costs. Section 117 of the Act says that each party shall bear their own costs. The exception to that rule is where the Court is satisfied that there are circumstances justifying a departure from the rule. If that arises, the Court must examine the matters set out in s 117(2A) of the Act to decide what, if any, order should be made for costs.

39. Having regard to my findings about the financial position of the wife as it is today, and the likely position after the creditors take whatever interest they have in the wife, and the disparity between the husband and wife, in my view it would not be appropriate to make an order for any costs. 

40. The husband also sought an indemnity from the wife about the Supreme Court of Victoria proceedings.  There is no evidence, first, that the wife could provide such an indemnity, but, secondly, there is no basis upon which I could see the husband being liable to his brother, having regard to the quite specific findings of the Supreme Court of Victoria.  I therefore see there is no basis upon which I can make such an order.

I certify that the preceding sixty nine (69) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  17 August 2009