Harper and Pint

FAMILY COURT OF AUSTRALIA

HARPER & PINT

[2011] FamCA 771

FAMILY LAW – DE FACTO RELATIONSHIPS – PROPERTY SETTLEMENT – Where the parties were in a de facto relationship for a short period of time – Where there are two young children from the de facto relationship – Where there is a modest asset pool – Where the father declared bankruptcy before the final hearing – Where the mother’s contributions were greater than the father’s contributions – Where the mother will have greater needs in the future than the father.

Evidence Act 1995 (Cth)
Family Law Act 1975 (Cth)

C & C [2005] FamCA 429
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC ¶93-143
Russell & Russell (1999) FLC ¶92-877
Milankov and Milankov (2002) FLC 93-095
Townsend and Townsend (1995) FLC 92-569

APPLICANT:

Mr Harper

RESPONDENT:

Ms J Pint

FILE NUMBER:

MLC

8349

2009

DATE DELIVERED:

24 August 2011

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Bennett J

HEARING DATES:

28, 29, 30 and 31 March; 1 April; 2 and 11 May 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT:

In person

COUNSEL FOR THE RESPONDENT:

In person

Orders

IT IS ORDERED THAT:

On Friday 26 August 2011 at 3 pm the father deliver the car, … Holden registration number …, to the mother with sufficient petrol so that the petrol tank is at least 1/5^th full, along with all sets of keys to the car and any service history documentation, to a car space next to Flagstaff Gardens northbound on or near the corner of William Street and La Trobe Street, Melbourne.
Contemporaneously with Order 1, the father obtain and sign all documents necessary to transfer all his right, title and interest in the car to the mother and deliver all such documents to the mother.
Contemporaneously with Order 1, the father leave the following items on the back seat of the car for the mother to retain:
(a) 1 television receiver; and
(b) 1 Apple laptop computer.
Within 30 minutes of compliance by the father with Order 1, the father collect the DVD of his friend’s wedding, stored in room 8 on level 3 of this Registry of the Family Court of Australia and the mother be and is hereby entitled to all chattels and things deposited in that room pursuant to Orders or directions of the Court.
The mother contact my Associate … on … within 14 days to organise a suitable time for the collection of the items of property referred to in Order 4.
Pursuant to s90MT(1)(b) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the interest held by the father, Mr Harper (born … December 1976) member no. …, in the H Superannuation Fund, the mother, Ms J Pint (born … November 1980) shall be entitled to be paid 100% of that splittable payment and that there be a corresponding reduction to the entitlement the father would have received in the H Superannuation Fund, but for this Order.
Order 6 has effect from the operative time and the operative time for this Order is four (4) business days after the service of sealed orders on the Trustee of the H Superannuation Fund.
Orders 6 and 7 bind the said Trustee of the H Superannuation Fund.
The mother be responsible for service of this Order on the Trustee of the H Superannuation Fund forthwith.
Pursuant to s90MT(1)(b) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the interest held by the father, Mr Harper (born … December 1976) member no. …, in the Z Superannuation Fund, the mother, Ms J Pint (born … November 1980) shall be entitled to be paid 100% of that splittable payment and that there be a corresponding reduction to the entitlement the father would have received in the Z Superannuation Fund, but for this Order.
Order 10 has effect from the operative time and the operative time for this Order is four (4) business days after the service of sealed orders on the Trustee of the Z Superannuation Fund.
Orders 10 and 11 bind the said Trustee of the Z Superannuation Fund.
The mother be responsible for service of this Order on the Trustee of the Z Superannuation Fund forthwith.
Otherwise all extant applications be dismissed and the matter be removed from the list of cases awaiting determination in the docket of the Honourable Justice Bennett.
All exhibits tendered in these proceedings be returned (to the party on whose behalf the exhibit was tendered) at the expiration of one calendar month unless an appeal is lodged.
The Subpoenaed Documents Clerk of this Registry return any documents produced on subpoena to the owner at the expiration of one calendar month unless an appeal is lodged.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 8349 of 2009

Mr Harper

Applicant

And

Ms J Pint

Respondent

REASONS FOR JUDGMENT

These proceedings are competing applications in a de facto financial cause for final alteration of property interests between the mother and the father.
To a very large degree, the financial aspect of the breakdown of the parties’ relationship was overshadowed by proceedings concerning their two children, B PINT,[1] born in October 2008 and A Pint, born in March 2010. The parenting proceedings were resolved after numerous interim applications and seven days of final hearings when orders were sought, and made, by consent, on 11 May 2011. Thereafter, the independent children’s lawyer ceased to be a party to the proceedings.
[1] Pursuant to paragraph 3 of the final parenting orders made on 1 May 2011, the mother was entitled to change B’s family name to “[Pint]”. I assume that this has been done.
In October 2010, the father petitioned for his own bankruptcy in circumstances which I will deal with more fully later in these reasons. As a result of the father’s petition, Mr N was appointed the father’s bankruptcy trustee and became a party to these proceedings. Mr N and the mother resolved a final alteration of property interests in relation to the father’s interest as sole registered proprietor of a property at C, which was the only asset of the father’s which was taken into his bankrupt estate. On the first day of the final hearing I made orders by consent, pursuant to which the mother is to pay Mr N $13,000 within 30 days and Mr N will transfer to her all of the right title and interest previously held by the father in the property at C. Mr N then ceased to be a party in the proceedings.
The effect of the mother’s settlement with the father’s bankruptcy trustee is that the mother is now the sole registered proprietor of the property at C (“the C property”) or entitled to be so. The C property is worth about $360,000. At the time of the trial, it was subject to a mortgage registered in favour of Westpac Bank which secured $180,000. In addition, the mother owes a considerable amount of money to her family, not less than $180,000, and most recently, a further $13,000 which the mother required to buy out the interest of the father’s bankruptcy trustee.
Assets not included in the father’s bankrupt estate for reasons stated by Mr N:
a)The father’s motor vehicle, registration number … ;
b)The father’s extensive figurine collection and accoutrement, including paints and books.
c)Various household furniture and personalty which are sought by the mother and detailed in paragraph 9 of the orders she seeks as including a Queen size pillow top mattress, a children’s car seat, a video camera purchased at JB Hi Fi, the father’s entire DVD collection, a portable air conditioner, an iPhone, a big screen television receiver, an Apple Mac Book computer and a black picture frame.
In addition, there are the father’s superannuation interests. These are in two funds, being the H Superannuation Fund which has a balance of about $24,000 and Z Superannuation Fund which has a balance of about $7,000. Both are accumulation interests. The whole of the father’s interest in H Superannuation is attributable to contributions made either before the parties commenced their de facto relationship or after the breakdown of that relationship. I am satisfied that the superannuation trustees have been accorded procedural fairness insofar as the mother seeks a splitting order against each fund.
The mother asserts that $70,000 withdrawn by the father from the Westpac Bank mortgage account post separation ought to be added back into the pool as a premature distribution of income. The father concedes that he took the $70,000 and returned only $16,100 of it to the relevant account. However, he says that no part of the $53,900 remains. He says that he spent it or gambled it away.
In summary, after many days of interlocutory applications before Cronin J and myself, seven days of final hearing and by virtue of the settlements referred to above, this proceeding is now a de facto financial cause about a car, figurines, some magazines, some DVDs, some household effects, superannuation, and, in relative terms, a large add back claimed by the mother against the father.
During the course of the trial, I directed that various personal possessions of the father be delivered to the Court so that the mother could inspect them and, thereafter, that the items be stored safely pending the final decision. The father delivered items. The mother cross examined the father and suggested that he had held back, and failed to deliver, the full collection of paints, figurines and magazines. My impression of the father’s evidence and the mother’s cross examination is that the father did deliver all of the paints but did not deliver all of the figurines and magazines. That said, the evidence does not enable me to identify with any precision that which the father failed to disgorge.

Jurisdiction

Jurisdiction for the Court to make orders effecting a final alteration of property interests between the parties arises under Part VIIIAB of the Act.
I am satisfied that the mother and father were in a de facto relationship which commenced in or about September 2008 and concluded with the breakdown of their relationship on 29 August 2009 and that they resided in the state of Victoria for the duration of that relationship.
Two children were born of the relationship.
I am satisfied that the jurisdiction of the Court to make final property orders is appropriately engaged.

The applications

Final submissions were taken in relation to financial aspects on 21 June 2011.
In addition to what the mother already has, she seeks:-
a)The father’s car, Holden registration number … ;
b)All of the father’s superannuation interests;
c)All items held in court to which she ascribes a value of about $600;
d)The Apple Mac book (computer);
e)$5,000 by way of child birth expenses, pursuant to s 67B.
The mother seeks that the father pay $100,000 of the loan owing in his name to Westpac Bank plus interest at a commercial rate. At the time of the trial, the indebtedness of $180,000 was secured by mortgage over the title to the C property. The property will, by arrangement with the father’s bankruptcy trustee, be transferred to the mother and this may have already occurred. The mother’s preference is that the father remain directly liable for the loan. However, accepting that Westpac are not going to release the property without her paying out the father’s loan, the mother seeks that the father pay $200 per week into the replacement loan which she will have to take to be able to pay out Westpac’s mortgage amongst other things. Ultimately, it is the mother’s intention to sell the C property when it appreciates in value and clear all her indebtedness.
The mother seeks that the father repay the equivalent of $100,000 plus interest over 25 years by way of instalments. Alternatively, the mother seeks spousal maintenance until A attains 18 years (in March 2028) or until she finishes her schooling, whichever last occurs, at the rate of $200 per week.
The mother seeks that the father also pay to her monies due under interim orders including:-
a)$23,900 being the difference between the $40,000 which the father was ordered to pay into the mortgage account by Cronin J on 24 February 2010 and the $16,100 which was actually paid;
b)the arrears in fence costs, house maintenance expenses, insurances, rates and mortgage payments as ordered on 20 January 2010;
plus interest at commercial rates.
The mother conceded that she had no evidence about child birth expenses which she said were merely her living expenses.
The father’s position is that:-
a)He wants to retain his motor vehicle;
b)He seeks that the mother receive, by way of splitting orders, 75% of his superannuation interests;
c)He will relinquish all the property stored in the court, including a video camera, with the exception of a DVD of his friends’ wedding (the mother agrees to this);
d)He keeps all furniture at his home including the queen size bed, television receiver, and Apple Mac Book.
He says he has already thrown away the portable air conditioner which was not working.
The father’s motor vehicle was acquired by the father prior to the relationship. At some point the father took an interest bearing commercial loan to repair the vehicle and the mother paid out that loan in the sum of $6,000. The father repaid the $6,000 to the mother but concedes receiving the benefit of not having to pay interest for approximately two years. The father ascribes a value to the car of $6,000.
The father’s position is that the video camera was purchased with the proceeds of the bank loan, at least half the figurines were also paid for from the bank loan.
The father says that the television was purchased by him prior to the relationship for $600, as was the bed frame.

The evidence

The parties gave evidence by affidavit and orally and were cross examined. Relevantly, the parties and the mother’s parents, Mr Q Pint and Ms R Pint, gave evidence and were cross examined, as were the family consultant and the manager of the child care centre at which the children used to be enrolled.
The mother submitted that the father was an unreliable witness and that, where there is a conflict between her evidence and the father’s evidence, I ought to prefer her evidence. I do.
I am satisfied that the father was an unreliable witness and litigant in that there were topics about which he gave evidence that he knew to be false. There are many examples. Through counsel, he told the court on 20 January 2010 that he had $40,000 in funds that he subsequently said that he did not have. On 24 February he gave evidence before Cronin J that he had deposited all the cash he had back into the mortgage account when, in fact, he had very recently and systemically drained all his accounts of funds so that no accounts could be frozen and kept the cash concealed.
He has been dishonest to the mother in that he lied about circumstances in which their oldest daughter was injured. He is also disregarding of the welfare of the mother and the children as the circumstances of his bankruptcy demonstrate.
The mother’s evidence was also less than one hundred per cent reliable but, in her case, it is much more nuanced and reflective of a strong degree of single mindedness and a lack of insight, particularly in relation to parenting.
I am satisfied that the mother was an honest witness but, in relation to parenting matters, a sometimes unreliable witness.
I am satisfied that that the father gave some evidence which he knew to be false. He also comported himself dishonestly in some financial aspects of the proceedings and post separation activities with disregard for his family and/or malice for the mother. The father was not a reliable witness.

Standard of proof

The relevant test for the Court’s assessment of evidence in this matter is found in s 140 of the Evidence Act 1995 (Cth). Section 140(1) requires the facts in issue to be proved by the party with the persuasive onus on the balance of probabilities.

Findings of fact

In these reasons a statement of fact is a finding of fact.

The law

Section Part VIIIAB of the Act defines the Court’s powers in determining applications for property settlement. Section 90SM(3) 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.
Section 90SM(4) of the Act sets out a number of significant matters that must be considered in order to determine what orders would be appropriate. I will have regard to such of those matters as are relevant.
In the context of s 79 of the Act, in Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC ¶93-143 the Full Court of the Family Court conveniently summarised the preferred approach to dealing with applications for alteration of property interests. Those steps are equally applicable to applications for alteration of property interests between de facto couples such as Mr Harper and Ms Pint.
First, I have to identify and value the property, liabilities and financial resources of the parties at the date of the hearing. Second, I have to identify and assess the contributions of the parties within the meaning of ss 90SM(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, the Court should identify and assess the relevant matters referred to in ss 90(d), (e), (f) and (g), (“the other factors”) including, because of s.90SM(4)(e), the matters referred to in s 90SF(3) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourth, I need to consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case.
A subsequent case of C & C [2005] FamCA 429 (with respect to superannuation), the Full Court stated that, at the outset, property should be identified as being property which does not include superannuation interests or as superannuation interests which may lead the Court to identify and divide “two pools” of assets.
With respect to the final step it is important to note that it is the justice and equity of the actual orders that the Court must consider: see Russell & Russell (1999) FLC ¶92-877.
Finally, s 90SM(9) provides that the Court shall not make a final property order under this section unless the parties to the proceedings have attended a conference in relation to the property issues with a Registrar or Deputy Registrar of the Family Court, or a Registrar or Deputy Registrar of the Family Court of that State, as the case may be. The parties attended such a conference on 10 February 2011.

Relevant background

The mother and father met in March 2006. The mother was aged 25 years and working casually in the security industry. She resided in rented accommodation in Melbourne Suburb 1. The father was 29 years old. He was in full time employment in the security industry and rented an apartment in Melbourne Suburb 2.
At the commencement of their relationship, the mother had approximately $10,000 or $15,000 in savings which she conceded were subsequently spent on overseas travel. She also had an interest in an investment property in the city, which was held by her and one of her brothers. The father had no assets of significance. He owned the motor vehicle (which the mother now seeks be transferred to her) against which there was a $6,000 loan. Subsequently, the mother paid out the loan and the father repaid her, without interest. Then the mother lent the father a further $4,000 and $3,000 which he repaid without interest.

The parents kept company after the mother returned from overseas. The parties’ first child was conceived whilst they lived separately and it was not until approximately one month prior to B’s birth that the mother left her temporary accommodation and moved into the father’s rented accommodation in Melbourne Suburb 2. That was in approximately September 2008. In March 2009, by which time B was approximately four months old, the family moved into the home of the mother’s parents where they occupied a spare bedroom. The purpose of the relocation was to save money by subletting the father’s rental accommodation to backpackers. In this endeavour, the parties made a profit in excess of $300 per week.
In December 2008, the parties purchased the block of land at C. The deposit for the property was paid for by the mother as were the conveyancing costs. The parties borrowed $180,000 from the mother’s parents. Those moneys had been raised by the mother’s parents by way of borrowings taken in their own name and were not in any way secured over the C property.
The vacant land at C was registered in the sole name of the father. It was said because the father was in full time employment whereas the mother was not. A few months later the parties contracted to have a home built on the land at an estimated cost of $180,000.
They borrowed $250,000, again in the sole name of the father, from Westpac Banking Corporation. The intention was to utilise the mortgage finance to build the home and to then apply any surplus borrowed funds in partial repayment of the monies owing to the mother’s parents. The house cost $179,000 to build which left $70,000 of borrowed funds available in that account plus $5,000 of the joint savings which was accumulated income earned from the backpackers. That would have meant that the parties’ indebtedness to the mother’s parents could be reduced by $75,000 to about $105,000. The mother’s uncontradicted statement was that her parents were also going to be paid some of the $26,000 First Homebuyer’s Grant for which the father would be eligible in reduction of the funds advanced by them. None of the funds were repaid to the mother’s parents because the father took the money from the account and says that he spent or gambled away all but $16,100 of it.
On 28 August 2009 there was an altercation between the mother and the father at the home of her parents. There are varying accounts of what occurred. I heard evidence from the parties as well as the mother’s parents who witnessed the altercation. Subsequently, the father was charged, pleaded guilty and was convicted of having assaulted the mother. The father left the home of the mother’s parents on 29 August 2009 and there has not since been a reconciliation between the parties.
At the time of separation, 29 August 2009, the surplus funds which the parties intended to repay to the mother’s parents amounted to approximately $70,000. Had they done as they said, that would have reduced the parties’ indebtedness to the mother’s parents from $181,000 to $111,000.
As at separation, B was nearly 11 months old and the mother was in the early stages of her pregnancy with A. Shortly after separation, the mother requested that the father pay their available funds, of $70,000, to her parents. The father refused to do so and said that he had sought legal advice. At trial the father said that he had been advised that he could have a possible entitlement to some or part of the $70,000 on the basis that the former matrimonial home would be transferred to the mother by way of a final alteration of property interests.
Following separation and the completion of the house at C, the father refused to allow the mother access to the dwelling for five months either for the purpose of occupying it or renting it out. His evidence was, in effect, that he did not want to advantage the mother by permitting her to occupy the property and wished to avoid any impediment to the property being sold as part of any final property orders. The father was self interested in this position and disregarding of the needs of his family, then constituted by the mother and B as the mother was heavily pregnant with A. During this period, the father was not paying the mortgage (principal or interest) affecting the property or other outgoings but stymied the mother’s proposal to generate income by renting it. I am satisfied that the father’s actions were harmful to the parties’ financial position and made life harder for the mother in financial and emotional terms. The father’s actions necessitated the mother’s application to the court for sole use and occupation of the property.
Proceedings were instituted in this court and first came before Barry J on 20 January 2010. The father was represented by Mr Mort of counsel and the mother appeared in person. In the course of the hearing before Barry J, which involved issues of the sole use and occupation of the C property, payment of outgoings and encumbrances and some parenting orders, the court was advised by counsel for the father that the father had spent some of the $70,000 which was to be repaid to the mother’s parents. The father, through his counsel, was specifically asked how much remained and the response was $40,000.
In an affidavit sworn on 23 December 2010 the father details how he withdrew some of the $70,000 from the mortgage account. Between 9 October 2009 and 23 November 2009 the withdrawals total $62,840. During the same period, he also applied a further $10,053.13 to pay his credit card which was used for day to day expenses. However, as at 20 January 2010, those details were not available and the father was required to explain what he had done with the $70,000.
On 20 January, 2010, Barry J made various orders including:
Property Issues
(1)That the Wife have the sole right to use and occupy the property at [C].
(2)All moneys held by the father in cash in the safe deposit box at Commonwealth Bank, [M], be paid within 48 hours in reduction of the loan from Westpac Bank secured by mortgage over the subject property.
(3)If the said cash is not deposited within forty-eight (48) hours, the matter is to be re-listed at 10.00 am on 27 January 2010 in the Family Court of Australia, Melbourne.
(4)The husband is restrained from encumbering, disposing of, or in any way dealing with his interests in the subject property.
(5)The Wife is to pay $175 per week to Westpac Bank in reduction of the mortgage debt over the subject property.
(6)The Husband is to continue to make all other outstanding payments on the mortgage to the Westpac Bank in relation to the subject property.
(7)The Wife is to pay the insurance on the subject property, and once such insurance is paid, she is to notify the Husband in writing, who is to forthwith indemnify her 50 per cent of all moneys paid.
(8)The Wife is to pay the rates on the subject property, and once all rates are paid, she is to notify the Husband in writing, who it to forthwith indemnify her 50 per cent of all such moneys paid.
(9)Within fourteen (14) days of the date of this Order the Husband is to provide to the Wife full particulars with supporting invoices and accounts for all moneys expended in the construction of the home on the subject property.
(10)Within twenty-four (24) hours the Husband is to authorise in writing and thereafter ensure within four (4) days that all appliances currently paid for or partly paid for are installed in the subject property.
(11)The Husband is restrained from entering the subject property, save for the purposes of authorising his agents to install the appliances under Order (10) herewith.
(12)If the appliances are not installed within the time stipulated, the matter is to be forthwith re-listed in the Family Court of Australia, Melbourne.
(13)The Wife is authorised to have any work completed on the subject property to improve its value, including but not limited to dealing with [S Builders, L Company and T Fencing].
(14)The Wife is to supply copies of invoices and receipts to the Husband for all expenditure in relation to carrying out landscaping and fencing on the subject property within seven (7) days of receipt of any such documentation.
(15)The Husband or his legal representatives is to notify the Wife in writing within forty-eight (48) hours of confirmation of payments made, by way of insurance, rates, mortgage instalments or any other.
Subsequently the father provided some receipts including a receipt for construction of a fence. However, the mother’s investigations revealed that the work was never undertaken or paid for and that the “receipt” had been obtained as a quotation. In evidence and in closing submissions, the father endeavoured to justify his position by saying that he was asked to provide receipts and merely provided a document which was called a receipt. It is abundantly clear from paragraph nine of the Order made 20 January that the father was to provide receipts to substantiate actual expenditure. I am satisfied that the father’s actions and evidence were intentionally dishonest.
The matter then came before Cronin J on 24 February, 2010. It was implicit in the manner in which the father’s case was conducted on 24 February, 2010 that he had deposited all of the funds which remained of the money borrowed from his parents-in-law. However, in cross-examination at the final hearing, the mother proved that the father’s situation was considerably less transparent than he portrayed. Whereas $16,100 might have been the balance of the money which he physically removed from the mortgage offset account, the father had accumulated other funds which he could have, but did not, use to replenish the mortgage account from which he had removed the $70,000.
His evidence was that he accumulated earnings by living off and “wasting” the moneys to which his parents-in-law were entitled and had been able to accumulate his earnings from employment. It transpired that on 20 January, 2010, but prior to the matter proceeding before Barry J, the father had left the court building and gone to a BankWest branch in Melbourne and withdrawn $8,220 in cash. He said that this was his accumulated income. He admitted to doing so because he was concerned that orders could be made freezing the amount if it remained in the account. He chose to conceal the money on his person on the basis that he would be better able to deny possession of it more effectively than if it was sitting in a bank account.
Additionally, the father’s wages of $2,315.27 were paid into the same account on 20 January, 2010. Two days prior to the matter proceeding before Cronin J, the father again drained his bank accounts, he admitted, so the court could not freeze those funds either. On 22 February, 2010, he withdrew $1000 from his account at an automatic teller machine and then later in the day withdrew a further $940. The following day he withdrew $3900. Accordingly, when he came to court before Cronin J on 24 February 2010, the father had no funds at bank.
Ultimately, instead of paying the $70,000 which the parties had at separation to the mother’s parents, he deposited only $16,100 into the mortgage account and a further $4,200 by way of a taxation refund, a total of $20,400 which defrayed the mortgage instalments and holding costs on the property. No monies were repaid to the mother’s parents.
The father petitioned for his own bankruptcy. He gave evidence that he did so in order to “get rid” of the C property. It appears to have been an entirely selfish act on his part which had serious and adverse consequences for the mother and, through her, the children as well as for the mother’s parents. It could have been much worse but for the commendable restraint exercised by the father’s bankruptcy. The debts extinguished by the bankruptcy were:-
a)$2,000 for the father’s unpaid telephone calls and early termination of contract fee;
b)$1,300 to the mother’s brother for levelling the C property;
c)$7,000 or $8,000 on his credit card;
d)$180,000 owing to the mother (whose liability to her parents for that amount is not extinguished).
When it was pointed out to the father that the intervention by his bankruptcy trustee had cost the mother $13,000 and relieved him of paying for his own post separation liabilities for a mobile telephone and a credit card, he responded “that’s right your Honour, that’s something that she organised with the trustee as I have no right over the property at all as the trustee does”. I am satisfied that the effect on the mother of the father’s bankruptcy has been very bad. It has required her to pay a further $13,000 for the benefit of the father (through his bankrupt estate). Those are funds which she would not otherwise have had to pay and which it has been necessary that she borrow.

Pool of assets divisible between the parties

It was not suggested by either party that the legal or equitable interest in the C property, acquired by the mother from the father’s bankruptcy trustee post separation (and formalised in orders made on the first day of the trial) should be adjusted against and I will not do so.
The father accepts that he has wasted and ought to be regarded as having retained the $70,000 which he took less what he returned to that account. The father returned $16,100 of the funds and then paid in another $4,200 by way of a taxation return. Of that, I regard only the $16,100 as having been returned which leaves the balance attributable to the father’s spending at $53,900. The $4,200 was accumulated income, which was accumulated during a period when the father was employed but paying minimal child support, the mother says in the vicinity of $6.50 per week. The $4,200 can, in my view, be attributable to and in part payment of, the periodic expenses that the father was obligated to meet under the order made on 20 January 2011.
The mother submits that I should find that the father still has $50,000 or so in cash. That is the $70,000 less the $16,500 which he repaid. She submits that I should not accept that the father gambled the money as alleged. In this respect, she points to the lack of details about how and why the father gambled and of his attendances at Crown Casino. I agree that his evidence was vague. In submissions he commented that he “was not really thinking of [winning]” when he gambled the money. The mother points to the fact that in producing receipts, the father produced hundreds of parking metre tickets and McDonalds Restaurant receipts but not a single receipt which placed him at Crown Casino at the time of the alleged losses. The mother points to the fact that the father gave evidence that he took money out of the account at ATMs and gambled it. However, when confronted with bank statements evidencing a lack of relevant withdrawals, he said that he took the money out of safety deposit boxes. The mother’s recitation of facts is correct.
The evidence does not satisfy me to the required standard that the $53,900 is still in existence and/or is under the father’s power or control. The mother submits that the father’s retention of the $53,900 should be reflected in a dollar for dollar allowance against him. This would be consistent with principles referred to by the mother as “Townsend principles”[2] which she described in her final submissions as monies which the father took when he knew he was not going to be entitled to them and “which it would be unjust in the extreme to just take into account in a general way and needs to be taken into account as a premature distribution of property and on a dollar for dollar basis.” However, the mother ignores the effect of the father’s bankruptcy which extinguished his liability to either the mother or her parents for the $180,000. If I were to accede to the mother’s application to add-back $53,900 into the asset pool and attribute it to the father, I would be resurrecting a liability which the father’s bankruptcy extinguished. Furthermore, save for in exceptional circumstances (none of which are present here), the Court cannot make orders which exceed the real assets in a case.[3]
[2] Townsend and Townsend (1995) FLC 92-569.
[3] Milankov and Milankov (2002) FLC 93-095, 88,864 per Kay J (dissenting on this point), who stated, “In my view, the law is well settled. The Court cannot make an order for the alternation of property interests that extends beyond the available assets of the parties (see Walters and Walters (1986) FLC 91-733, 10 Fam LR 1006; Evans and Public Trustee (1991) FLC 92-223, 14 Fam LR 646; and Grace v Grace (1998) FLC 92-792, 22 Fam LR 442.”
I am unable to treat the $53,900 as an add back against the father.
No assets were valued in this case. Doing the best that I can with the values which seemed not to be the subject of disagreement between the parties, it appears that the following is in the non-superannuation asset pool divisible between the parties:
a)The father’s car worth about $6,000;
b)The belongings, mobile telephone unit and figurines held at court worth about $600;
c)The Queens size mattress to which no specific value was ascribed; and
d)The Apple Mac Book to which no specific value was ascribed.
There are the father’s superannuation interests which the parties agree are valued at about $30,000 and which include contributions made by the father prior to the commencement of the relationship and after the breakdown of the relationship.

Contribution based entitlement

I take into account the various capacities in which contributions can be made. That is, financial contributions made directly or indirectly by or on behalf of the parties, direct and indirect financial contributions and homemaker and parent contributions.
The father brought very little by way of hard assets to the relationship, essentially modest car subject to a loan and a capacity to earn a modest income which he did. He also had a superannuation interest which is the most valuable asset which I am required to take into account in the final alteration of property interests.
The mother submitted that the father did not financially support the family even during cohabitation and that his wages were applied in payment of only one half of the rent and household outgoings and for his own recreational use including “drugs”, CDs and figurines. On the balance of probabilities, I find that to be correct.
The mother’s evidence was that the mother’s parents provided rent free accommodation to the couple and B, paying for a holiday for the family to Queensland two weeks before the parties separated. The parents also provided the loan of $180,000 which has since been taken over by one of the mother’s brothers, Mr G Pint. By borrowing funds from her family, the mother lent money to the father on three occasions for his car. The monies were repaid without interest.
The mother has been solely responsible for the children since separation. The family consultant’s evidence is to the effect that there have been serious deficits in the mother’s parenting. However, having heard all the evidence and the presentation of each party’s case, I am satisfied that the mother was driven to such meticulous preparation of her case because of the father’s various deceptions in and outside court. I conclude that the mother’s contribution as a homemaker and parent might not have been optimal in relation to the child(ren) post separation but, vis a vis the father, have been total. Post separation, the father has done nothing to assist the mother in the capacity of a homemaker and parent and has actually made life very difficult for her.
I find the parties’ contribution based entitlement, having regard to all direct and indirect financial and non-financial contributions, at the commencement of the relationship and after the breakdown of the parties’ relationship, together with contributions as a home maker and parent to be 75 % to the mother and 25% to the father. The father’s contributions were principally his car and superannuation entitlement.

Adjustive factors under s 90SF(3)

Section 90SF(3) specifies certain matters which must be taken into account. I will do so to the extent that the matters are relevant to this case.
(a)the age and state of health of each of the parties to the de facto relationship;
The parties are relatively young and are in good health.
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
Both of the parties have the capacity for gainful employment. The mother will retain assets over which there is significant debt. Due to his self petitioned bankruptcy, the father is relatively debt free save for a debt incurred by virtue of him receiving rent assistance to which he was not entitled.
The father was less than frank about his employment and income post separation. This required the mother to cause subpoenae to issue and to undertake discovery and inspection which was quite out of proportion to what was at stake but, nonetheless, necessary because of the father’s lack of proper or adequate disclosure.
The father describes his current employment as well sought after because of the relatively high hourly rate and ability to salary sacrifice. He has informed the court on a number of occasions that he expects to be offered full time employment after these proceedings are over. I accept the father’s evidence in this regard and also accept that he might now not be able to avail himself of the full time employment if he does not have a motor vehicle.
If the father is not employed in his current occupation, I am satisfied that he will be able to obtain some employment in that industry or unskilled labour work elsewhere.
The mother’s ability to work outside the home is seriously curtailed by her responsibilities to care for the children. Her first employment was as a skilled worker which skills are now obsolete. She has accreditation to do particular work in the security industry but could not work at nights or on weekends. I am compelled to say that the presentation of the mother’s case, which was highly organised, methodical and most effective leaves me with the impression that she would make an excellent book keeper or excel in the clerical field without much formal training. However, the very real concerns expressed by the family consultant, in relation to the mother having been distracted by these proceedings to the point that her capacity to parent the girls has been seriously and adversely affected, leads me to conclude that the mother cannot balance employment and parenting. I conclude that her capacity to earn income outside the home is negligible for the time being.
(c) whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years; and
(l) the need to protect a party who wishes to continue that party's role as a parent;
The mother has the care of the young girls and will into the foreseeable future. They are one and three years old. The eldest child has special needs, as identified by the family consultant. She is currently seeing a paediatrician, speech therapist and a psychologist. There are similar concerns in relation to A which make sense as it appears, on the evidence, that the mother’s enormous investment in preparation of this case has come at the cost of her not being sufficiently emotionally available to the girls.
The mother wishes to remain at home with the children as full time carer. The evidence in the concluded parenting proceedings, including that of the family consultant and the manager of the day care centre, was tested in cross examination. That evidence indicates that a change in the mother’s parenting style is imperative.
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
The mother is required to house herself and the two children as is the father when the children are in his care. Each party needs a motor vehicle but the mother’s predominant care of the children makes her need more imperative than the father’s need.
(e)the responsibilities of either party to support any other person;
Neither party has any person to support other than himself or herself and the children of their relationship.
(f) the eligibility of either party for a pension, allowance or benefit under any law of the Commonwealth, of a State or Territory or of another country and the rate of any such pension, allowance or benefit being paid to either party;
The mother is in receipt of social security benefits applicable to her status as a single mother without income from paid employment.
The father has previously claimed rental assistance to which he was not entitled and which he must now repay. The father is eligible to apply for social security benefits in the event that he is unemployed.
(f)a standard of living that in all the circumstances is reasonable;
The mother says that, prior to their relationship, the father was living in rented accommodation which he shared with backpackers. He is now renting a two bedroom unit, with a swimming pool. During the trial, the mother pressed the point that the father should rent out his spare room. I accept that would be possible for him to do and that it his choice that he has not done so.
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
Maintenance payable by the father to the mother would ease the mother’s burden. It is not envisaged at this stage that the mother will retrain.
(k) the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
The mother’s income earning capacity is seriously curtailed by reason of her care of the two very young children of the relationship.
(n) the terms of any order made or proposed to be made under section 90SM in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party;
The mother is entitled to be registered as a proprietor of the C property which is worth less than is owed by way of encumbrances and monies advanced by her family.
(q) any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship;
The father will be subject to administrative child support assessments. However, I am satisfied that he is likely to try to minimise and hide some income as the mother was able to demonstrate he has done already. The father is particularly conscious of any earnings which he receives in excess of $48,000 per annum being able to be attached, as to 50%, by his bankruptcy trustee.
It is likely that the mother will receive some child support. However, it is unlikely that the father will declare all of his earnings so the child support is likely to be artificially low.

Section 90SM(4)(d)

Pursuant to s 90SM(4)(d), I take into account the effect of any proposed order on the income earning capacity of the parties. The proposed orders do not impact adversely on the mother. However, the mother seeks an immediate transfer of the father’s car to her. The father’s evidence is that the loss of his motor vehicle will mean that he will “have to give notice to work”. I accept that there is a distinction between having to offer a resignation for a particular position and not being employable. The father asserted that, because he works on-call casual in the security industry, he is expected and required to do a range of shifts including over weekends, covering five sites with finishing times varying between 10.00 p.m., 11.00.p.m. and 3 a.m. Some weekend shifts start at 6.00 a.m. He said, for instance, that a C site shift concludes at 11.30 p.m. after which there are no trains or buses. On the other hand, the mother says that the father has had an extended period in which to accumulate funds with which to buy a car and that, if he has to resign, which she doubts, he will get another job.
Frequently, final property orders do impact on income earning capacity of a party. I accept that a transfer of the father’s car to the mother will make it more difficult for him to transport himself, particularly if he cannot acquire a new car, and may render it impracticable for him to remain in his current position or working his current roster. It may reduce his income significantly and do so by more than any net saving between paying for public or other transport and being relieved of car running expenses. However, I am satisfied that the necessitous circumstances of the mother outweigh the father’s need to keep this particular car.

Further adjustment pursuant to the parties’ contribution based entitlement

Having regard to the factors in s 90SF(3), I am satisfied that the mother is entitled to a further adjustment of 25%, principally in relation to her lower income earning capacity and her role as the primary carer of the two young children at least one of whom has special needs.
That brings the mother’s entitlement to 100% of the property which is divisible between the parties. That pertains to the superannuation interests and the non-superannuation assets and, I am mindful, will include the father’s superannuation interest acquired in either fund post separation.

Justice and equity – the fourth step

The orders provide that the mother gets most of what remains to be divided between the parties. The father will even lose the benefit of any contributions he has made to the named superannuation funds post separation. I do not know how much of the fund those contributions represent but the father said that he had recommenced making contributions into one of the funds during these proceedings and to date. This is appropriate considering the lack of provision the father made for the mother and children post separation and the considerable extent to which he has hindered the mother providing for the children by petitioning for his own bankruptcy and making less than full and frank disclosure and occasionally lying, in this proceeding.
The father seeks to retain a DVD of a friend’s wedding from the items which are stored at Court. The mother has no objection. I will order that the father have the DVD.
I will also order that the husband is to retain the queen size mattress, which is currently at his residence. Both parties want it. I decide, however, that the father can retain it. This is in part due to the size of the mattress (which would necessitate separate delivery arrangements) and my experience that the parties have no ability to communicate in a civilised manner. My concern is that they would not be able to agree on details of the mother’s (or one of her friends or family member’s) collection of this item from the father, or be able to actually transfer the mattress without drama. However, logistics aside, I am satisfied that it is just and equitable for the mother to be entitled to everything that currently exists and that she seeks, but for the father to retain the mattress which (he says) he sleeps on and the DVD which is of sentimental value.

Mother’s application for $200 per week

The mother seeks that the father pay $200 per week either by way of reduction of her liability to the mortgagee of the C property or by way of spousal maintenance.
There is jurisdiction for me to make an order for payment of an entitlement to property by way of instalments. That is found in ss 90SS(1)(a) and/or (b). However, I regard the mother’s entitlement to an alteration of property interests as being satisfied by her receiving the totality of what there is left. I know that it does not amount to much. However, that is all there is to divide between them. It would have been different if the father’s indebtedness in relation to the $180,000 to the mother’s parents had not been proved as a debt in the bankruptcy and extinguished.
Insofar as the mother’s application for spousal maintenance is concerned, I have already considered the relevant matters set out in s 90SF(3). I am satisfied that the mother currently has a need for spousal maintenance. However, I am not satisfied on the evidence that the father has the capacity to pay it.
I decline the mother’s application for the father to pay $200 per week by way of instalments of a property entitlement or spousal maintenance.

Mother’s child bearing expenses

The mother made application for $5,000 of child bearing expenses. These were expenses associated with the birth of A who was born after the breakdown of the parents’ relationship. The mother clarified that these were her day to day living expenses. I accept that the mother would have incurred some expenses. I am not satisfied that they amount to $5,000. No endeavour was made to isolate any other lesser or particular sum. Most significantly, I am not satisfied that the father has the means or ability to pay the expenses.
I decline the mother’s application for child bearing expenses.

Mother’s application that father pay arrears of periodic sums due pursuant to orders of the Court

It does appear that the father had the means and ability to meet the outgoings required under the Order made on 20 January 2010 at least for a short period of time. However, by the time those payments were sought to be enforced before Cronin J on 24 February 2010, his Honour declined to do so because the father did not have a demonstrable capacity to pay. I am not now satisfied that there is any sum from which he can meet arrears of orders or that from 24 February 2010 he has actually had the capacity to pay.
I decline the mother’s application for arrear of payments due under interim orders.

Generally

I find that the final alteration of property interests is, within the ambit of what the legislation permits, just and equitable and otherwise proper.
I mentioned at the outset that this case was about a few chattels, some modest superannuation and an add back. To the reader it may seem a trifling matter. However, I am satisfied that it was important to the parties. Whereas a judicial determination was required only about this very small pool, the parties and I always knew that their major challenges lie with parenting their young daughters. I trust that this determination will allow the parents to put financial matters behind them to some extent although, undeniably, the mother will have to manage the consequences of the father’s actions for years to come.
These are the reasons for which I make the orders set out at the commencement of this judgment.

I certify that the preceding one-hundred and nine (109) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Bennett delivered on 30 March 2011.

Associate:

Date: 24 August 2011

[2011] FamCA 771

24 August 2011

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