Hemiro and Ramos and Ors

[2018] FCCA 1425

FEDERAL CIRCUIT COURT OF AUSTRALIA

HEMIRO & RAMOS & ORS [2018] FCCA 1425

Catchwords:
FAMILY LAW – Parenting – property – short marriage – unilateral obtaining and management of liabilities by the husband – asset-by-asset approach – spousal maintenance.

Legislation:

Family Law Act 1975 (Cth), ss.60B, 60CA, 60CC,(2), (3), 61DA, 65DAA(3), 72, 75(2), 79

Evidence Act 1995 (Cth), s.140

Cases cited:

Re F: Litigant in Person Guidelines (2001) 161 FLR 189

Stanford & Stanford (2012) FLC 93-518
Norbis & Norbis (1986) FLC 91-712
Calverley v Green (1984) 155 CLR 252
Jones v Dunkel (1959) 101 CLR 298

Pierce v Pierce [1999] FLC 92-844

Omacini & Omacini (2005) FLC 93-218

Applicant: MR HEMIRO

First Respondent: MS RAMOS

Second & Third Respondents: MS HEMIRO & MR A HEMIRO

File Number: MLC 1583 of 2017

Judgment of: Judge McGuire

Hearing dates: 13 & 14 November 2017, 22 February 2018, 26 & 27 March 2018, 5 April 2018 and 10 May 2018

Date of Last Submission: 10 May 2018

Delivered at: Melbourne

Delivered on: 17 October 2018

REPRESENTATION

Counsel for the Applicant: Ms J. Papson

Solicitors for the Applicant: Kennedy Guy

The First Respondent: Appeared in Person

Counsel for the Second &
Third Respondents: Mr S. Fuller

Solicitors for the Second &
Third Respondents: Rb Flinders

PARENTING ORDERS:

1. That the parents have equal shared parental responsibility for the children [X] and [Y] both born 2013.

2. That [X] and [Y] live with the father as follows:

   a)Each alternate weekend between Friday at the conclusion of school (or 3.30 p.m. if not a school day) until the following Monday at the commencement of school (or 9.00 a.m. if not a school day);

   b)For a further period of two nights in each fortnight at the discretion of the mother if the mother continues in her current employment or type of employment but with the mother to give the father the maximum possible notice of the exercise of her discretion provided however, if the mother should relinquish her current employment or type of employment then the children spend time with the father in the off-week from after school on the Monday (or 3.30 p.m. if not a school day) until the commencement of school on the Wednesday (or 9.00 a.m. if not a school day);

   c)For one half of each Victorian gazetted term school holiday as agreed between the parties but failing agreement then for the first half of such holidays being from the first Friday at the conclusion of school (or 3.30 p.m. if not a school day) until 12.00 noon on the second Saturday;

   d)On a week-about basis during the Victorian gazetted summer school holidays as agreed between the parties but failing agreement then for changeovers to occur on each Friday at 3.30p.m.; and

   e)That time for the children with the father pursuant to Order 2(a) and (b) hereof be suspended during school holiday periods.

3. That [X] and [Y] live with the mother at all other times.

4. That the children spend such other times and variations of the above with each of their parents, including on special days, as agreed between the parents from time to time.

FINANCIAL ORDERS:

1. That within sixty (60) days of the date of these Orders the wife shall:

   a)Make a lump sum payment of $48,275 into the Bank 1 Business loan account (Business A);

   b)Transfer and/or vest all her right, title and interest in the following to the husband absolutely:

   i)The husband’s Motor Vehicle A;

   ii)The husband’s Motor Vehicle B;

   iii)The assets of Business A and any associated trust;

   iv)All personalty and chattels in the possession of or under the control of the husband as at the date of these Orders;

   v)The balances of any bank accounts or like investments in the name of or to the benefit of the husband as at the date of these Orders; and

   vi)Any superannuation policy and entitlement of the husband.

   c)Be solely be responsible for and indemnify the husband in respect of the following:

   i)Any and all liabilities incurred by the wife since separation in either joint names or in her name alone;

   ii)Any mortgage secured by the property situate at Property A in Victoria;

   iii)Any liability attaching to any asset retained by the wife pursuant to these Orders; and

   iv)Any debt owing by the wife either solely or jointly with the husband to the Department of Centrelink.

2. That contemporaneously with the payment referred to in Order No. 5 (a) hereof, the husband shall:

   a)Transfer and/or vest all his right title and interest in the following to the wife absolutely:

   i)The property situate at Property A in Victoria registered in the name of the wife;

   ii)The wife’s Motor Vehicle C;

   iii)All personalty and chattels in the possession of or under the control of the wife as at the date of these Orders;

   iv)The balances of any bank accounts or like investments in the name of or to the benefit of the wife as at the date of these Orders; and

   v)Any superannuation policy or entitlement of the wife.

   b)Be solely responsible for and indemnify the wife in respect of the following:

   i)The Bank 1 Business loan (Business A);

   ii)Any and all liabilities of Business A;

   iii)Any and all personal loans owing to Ms Hemiro and Mr A Hemiro;

   iv)Any and all liabilities incurred by the husband since separation in either joint names or in his name alone;

   v)Any liabilities attaching to any of the assets retained by the husband pursuant to these Orders; and

   vi)The husband’s credit card liabilities.

3. That the husband be and is hereby restrained from releasing or permitting to be released as security for the Bank 1 Business loan (Business A) any security offered by Ms Hemiro and/or Mr Hemiro prior to the release of the security for such loan offered by the wife in her property situate at Property A in Victoria.

4. That the husband make all reasonable applications to the Bank 1 upon payment by the wife pursuant to Order No. 5(a) hereof to obtain a release for the wife of her guarantee under the balance of the Bank 1 Business loan (Business A).

5. That the parties or either of them have liberty to apply in respect of Order No. 5(a) hereof in the event of the wife being unable or unwilling to make the payment referred to in that Order within the time permitted by that Order.

6. That pursuant to Section 81 of the Family Law Act1975 the parties intend that these orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 1583 of 2017

MR HEMIRO

Applicant

And

MS RAMOS

First Respondent

And

MS HEMIRO AND MR A HEMIRO

Second & Third Respondents

REASONS FOR JUDGMENT

Applications

1. The broad issues between the parties are as follows:

   i)Parenting orders in respect of the parties’ twin children, [X] and [Y] both born 2013 (aged four years). The applicant husband proposes an order for equal shared parental responsibility. The wife seeks an order in her favour for sole parental responsibility.

   The husband proposes a graduated regime of times for the children up to six nights a fortnight with him as from 2019 and in two blocks each of three nights.

   The wife's proposal, consistent with her employment as an (occupation omitted), is for the children to spend time with the husband for “six non-consecutive nights in each month as nominated by the wife within seven days of receiving her work roster” together with “other times, including school holidays and special occasions as agreed between the parties in writing” and “for Christmas on 7 January each year”.

   ii)The wife seeks a spousal maintenance order in her favour of $200 per week to be paid by the husband on an ongoing basis. The husband opposes any order for spousal maintenance.

   iii)A major issue between the parties in respect of property settlement rests with a home at Property A in Victoria owned by the wife prior to the commencement and still in her position. The husband seeks an order that that property be sold and that the net proceeds of sale after payment of various asserted joint liabilities be divided as to 70% to the wife and 30% to the husband. The wife says that she should retain her home without any cash adjustment on the husband. She argues that the husband is the beneficial owner of an apartment in Property B where the title sits with his parents. She also argues that the husband should be solely responsible for any residual debts from a business purchased by him during the relationship and since sold.

   The husband says that he holds no interest in the Property B apartment. He says that there are residual debts from the now sold business primarily being a loan from Bank 1 with $119,451 outstanding and loans from his parents with $25,145 outstanding. He also cites other small liabilities and argues that all liabilities, being debts of the marriage, should be satisfied from the proceeds of sale of the wife’s home before distribution of the balance between the parties.

   Although she did not specifically reference it, the wife argues a property settlement on an asset-by-asset approach to contributions whereas the husband says that the consideration should be on the more common global approach.

Background

1. The husband is 40 years of age having been born on 1978. He is employed as an (occupation omitted) with a disclosed income of approximately $119,000 per annum. There is no evidence before me that the husband has re-partnered.

2. The wife is 42 years of age. She is employed as a (occupation omitted) (part-time) by (employer omitted). She has a disclosed annual income of $35,000.

3. The parties were married and commenced cohabitation on 2010. They appear to have been in a relationship from about 2008 but did not cohabit prior to their marriage. They separated on 29 March 2016.

4. There are twin children of the marriage being [X] and [Y] both born 2013 (aged four years).

5. These proceedings were commenced on the husband's application filed 20 February 2017 seeking orders as to both parenting and property settlement. The wife's response was filed 19 April 2017 first raising the issue of spousal maintenance.

6. On 24 April 2017 interim orders were made by consent providing inter alia:

   a)That the children live with the wife; and

   b)That the children spend time with the husband for four nights per fortnight and otherwise as agreed.

7. On 2 August 2017 the substantive issues were listed for trial with an estimated hearing time of two days to commence 13 November 2017.

8. The wife's interim application for spousal maintenance was listed for hearing on 3 August 2017. The wife did not proceed with that interim application but maintains her application for final orders for spousal maintenance.

9. A Family Report dated 19 October 2017 was prepared by family consultant, Ms C, and released pursuant to my order of 23 October 2017.

10. Despite the estimate for the trial being or two days, it occupied seven days of Court time between November 2017 and May 2018. At the first listing of the matter for trial in November 2017, it became apparent that the wife was seeking orders of the Court to attach to an apartment property at Property B and registered in the name of the husband's parents Ms Hemiro and Mr A Hemiro. Consequently, and appropriately, an order was then made by consent joining Mr & Ms Hemiro as second and third respondents.

11. The wife represented herself at the trial. The husband was represented by solicitors and Counsel. Mr & Ms Hemiro (Senior) were separately represented by solicitors and Counsel. The Court file discloses that the wife's solicitors had withdrawn from acting only on 6 November 2017. I assume, therefore, that the wife had enjoyed some professional assistance with the preparation of her affidavit material. It was my observation, however, that she did struggle at times with some of the complexities argued in this matter and similarly with complicated legal issues in respect of both parenting and financial matters. The wife was, however, provided with a lengthy expose of the procedure of the trial together with an invitation to seek assistance from the Court at any time in respect of procedural matters.[1] I observed the wife to be an intelligent, articulate and well prepared litigant-in-person. She was capable and direct her cross-examination of the husband and his mother. She conducted herself with the utmost courtesy to the witnesses and to the Court.

    [1] Re F: Litigant in Person Guidelines (2001) 161 FLR 189

12. The third respondent being the husband's father is elderly and suffers number of illnesses including dementia. The Court was provided with regular medical reports in respect of his condition. It eventuated that Mr A Hemiro (Snr) did not actively participate in the proceedings. His interests were attended by the participation of his wife and the representation of Counsel.

13. In July 2013 the husband incorporated Business A. The husband was the sole director and company secretary. That company purchased a business '(name omitted)’ for $220,000. A loan of $250,000 was obtained from Bank 1. Security was provided by the husband's parents’ home and perhaps later the Property B property and also the wife's property at Property A.

14. In February 2014, the company commenced proceedings in the County Court of Victoria against the vendors of Business A alleging misrepresentation. Those proceedings settled in August 2014 with a gross payment of $55,000 to the company which netted some $46,232 after payment of legal costs.

15. The business was eventually sold for $155,000 with the sale settling in about September 2016. The husband asserts that he received a net amount from this sale of $112,562 although documents before the Court show the net proceeds to have been $116,561.  The wife disputes the “money trail' claimed by the husband which involves alleged various loans, some repaid and some outstanding, from his parents. Importantly, however, the husband asserts that an amount of approximately $119,451 remains owing to Bank 1 in respect of the business loan. It is not disputed that the husband has not attended to the Bank 1 loan since at least the end of 2016 and hence it being drawn out to its current balance. It is agreed that the balance of the loan as at 31 August 2016 was $171,962.

Issues

1. The broad issues remaining for the Courts determination are many and varied but can be generally a summarised as follows:

   i)Whether it is in the children's best interests for there to be an order for the mother to exercise sole parental responsibility? 

   ii)The best interests for the children in respect of their time with their father and the regime of that time?

   iii)Whether the wife has made out a case for the payment of spousal maintenance and, if so, the duration and quantum of such payments? 

   iv)The content of the property pool with specific reference to how the Court should deal with various liabilities of the parties, including the above-mentioned residual business loan and alleged outstanding loans from the husband's parents?

   v)The wife's assertion that the husband is the beneficial owner of the apartment at Property B and hence whether this property then be included at value in the property pool?

   vi)The wife's assertion that the husband should be solely responsible for the residual debt in respect of the business due to his sole financial management of the business and/or whether the husband has created a false 'money trail' in obtaining unnecessary or non- existent “loans” from his parents so to create a false impression of his financial circumstances for the purposes of this litigation?

   vii)Whether the wife’s home was improperly/illegally offered as a guarantor for the Bank 1 business loan in that she did not receive requisite independent legal advice and, if this is the case, then whether or not such is relevant to my determination under section 79 of the Family Law Act (1975) (“the Act”)

   viii)The various contributions of the parties to the assets and, in particular, the wife’s home and the debts/loans set out above.

   ix)Whether the consideration of contributions be made on an asset-by-asset approach or an in-globe approach.

   x)The relevant Section 75 (2) factors.

Children's issues – relevant law

1. Section 60CA of the Family Law Act 1975 (“the Act”) provides a fundamental basis for my consideration being that the best interests of [X] and [Y] are to be my paramount consideration. I determine those best interests with reference to the objects and principles of Part VII of the Act set out in s.60B and then by pragmatic reference of the probative evidence and the parties’ proposals to the numerous mandatory considerations set out in s.60CC (2) and (3) of the Act. Section 60B sets out the objects and principles as follows:

   (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 children; and

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

   (c) ensuring the 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.

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

   (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).

2. The mother seeks an order that she have sole parental responsibility for [X] and [Y]. The father argues for an order for equal shared parental responsibility. The notion of 'parental responsibility' is generally seen as relating to the powers, duties and authority that parents have by law for their children. In a practical sense it usually references the long-term or important decisions that parents make for their children as opposed to the more mundane day-to-day decisions. Issues such as education, religion and medical procedures are often given as examples of 'parental responsibility'.

3. Section 61DA of the Act provides a presumption that parents have equal shared parental responsibility for their children. That presumption, however, does not apply if the Court is satisfied that there has been family violence or abuse of a child within the broad definitions of those terms within the Act. Further, the presumption may be rebutted by evidence satisfying the Court that it would not be in the children's best interests for their parents to exercise shared parental responsibility.

4. The significance of either the presumption of equal shared parental responsibility applying or being made by way of Court order is that the Court is then required to enter into a statutory course of consideration being, firstly, to consider whether the children spending equal time between their parents is both in the children's best interests and reasonably practicable. If the answer to either of those questions is in the negative then the Court must consider whether the children spending 'substantial and significant time' between their parents is both in the children's best interests and reasonably practicable? ‘Substantial and significant time’ is defined in s.65DAA(3) of the Act and includes time for children with a parent on both weekends and weekdays and allows parents and children to be mutually involved in each other's activities.

1. Relevantly, the father in the matter now before me argues for a regime of time leading up to the children spending six nights per fortnight with him in two blocks each of three nights. This would, of course, fit easily within the definition of 'substantial and significant time’. The mother's proposal is more problematic in its definition. She proposes that the children spend 'six non-consecutive nights each month' with the father. Transparently, the mother’s proposal is based to a large extent on her own unusual work roster with an (employer omitted). She also argues the relative parental incapacity of the father.

2. The relevant considerations under s.60CC of the Act are many and divided into 'primary' and 'additional' considerations although not in any hierarchical level of importance and where each case is to be considered on its own factual platform. Significantly, no single factor is determinative of the decision as to the children's best interests but it is for the Court to attribute weight and balance to each of the factors on a case-by-case basis.

The evidence

1. Both parties gave evidence and were cross-examined in respect of children's matters. Each was noticeably critical of the other in respect of their proposals for the parenting and living arrangements for [X] and [Y] and also as to the insight and capacity of the other parent. Despite this mutual tendency towards criticism, I expect that the continuing personal acrimonious relationship between Mr Hemiro and Ms Ramos stemming from the breakdown of their own relationship, consequent mutual suspicions, and lack of any civil communications is behind the tenor of the evidence of each. Nevertheless, Ms Ramos at one stage volunteered her ambition for [X] and [Y] to enjoy full, successful and meaningful relationships with both of their parents. Similarly, if only by reason of the orders he seeks, Mr Hemiro acknowledges the parenting skills of his children's mother. He was also at times able to volunteer gratuitous compliments in respect of the mother’s parenting. Suffice for me to observe that the residual personal animosity between these two otherwise fundamentally good parents is at the crux of the dispute now before me.

Family Report

1. The Court has the benefit of a comprehensive and insightful Family Report prepared by Family Consultant, Ms C. Ms C was not required by either party for cross-examination and her report of 17 July 2017 was read into evidence.

2. At [10] of her report Ms C cites Mr Hemiro’s proposal for the children to live with him for six nights per fortnight and notes Mr Hemiro being ‘….a strong advocate for equal shared care and had petitioned Senators on this issue. He said he was seeking what is commonly referred to as a 50/50 care arrangement.'

3. Ms Ramos is reported as believing that the current interim arrangement (4 nights per fortnight) was ‘too disruptive for the children and she sought they have less time in their father's care.'

4. At [24] Ms C reports that each of Mr Hemiro and Ms Ramos acknowledge their poor communication but that each tended towards greater blame to the other party. Interestingly and significantly, however, at [25] Ms C observes:

   Despite this, both parents had a strong child focus and both indicated a wish to improve their post separation communication. Both were focused on the needs of the children and both spoke with knowledge of each child's individual needs as well as their needs as a sibling pair. In some regards they did not fit the typical profile of the family law client given the absence of significant risk and the parental capability demonstrated and the child focus they each held.

5. Ms C had the benefit of meeting the children and observing [Y] and [X] with each parent. Given the young ages of the twins, however, they were not interviewed separately from the parents. At [32] and following, Ms C observed the children with Mr Hemiro as follows:

   32.    When Mr Hemiro entered the children's room he was greeted warmly by the children. [X] saw him first, ran to him and climbed up into his arms. Once [Y] had seen him he also ran to him and wanted a hug. Both children competed for his attention and both engaged in fairly robust play in his company.

   …

   35.    [Y] had then soiled his nappy and Mr Hemiro quickly and easily attended to it and ensured [Y] was in a clean nappy to resume play. [X] waited patiently for him to finish and then proceeded to climb onto her father's back and insist on being held by him. The style of play both children engaged with was very active and high energy.

6. At [36] Ms C noted the contrasting styles of the parents in that 'both children engaged with this more gentle style of play (with Ms Ramos) and were equally responsive to it’.

7. At [39] Ms C insightfully offers:

   It would appear that if the parents could manage their post separation parenting, these children would benefit from the different aspects each brings to their parenting. Mr Hemiro brings a level of high energy while Ms Ramos bought (sic) a more settled and quieter form of play. Ideally these children would benefit from regular exposure to both of these styles as they were highly responsive to each. It is also apparent that Mr Hemiro and Ms Ramos are equally focused on the children's safety and wellbeing which should avoid disputes regarding the quality of their physical safety in either care arrangements.

8. Further, and under the heading 'EVALUATION' at [41] Ms C opines:

   41.    Essentially this is a matter dealing with two high-quality parents who both operate with a high level of child focus. Both parents demonstrated their love and commitment for their children and their capacity to provide good care for them. Further to this, the children were responsive to their parents and interacted warmly with both.

   …

   43.    What these parents perhaps failed to fully grasp is the impact of their poor communication on the children. If they could direct the same amount of energy to addressing that as they do to the day to day physical well-being of the children, they would conquer what is identified as the only significant risk for their children, that is, being in the presence of their parents’ conflict and experiencing the parental distrust and dislike. If they could somehow manage this, it is assessed they would not need the services of a legal system to assist them as they could fine tune their arrangements alone.

9. I respectfully agree and adopt the comments of Ms C set out above in so far as they are consistent with my own observations and conclusions regarding these two parents.

10. The personalities of the parents is also highly influential in their dispute and as noted by Ms C at [48] where she says that Mr Hemiro is focused on an arrangement that is an equal time which accords with his belief that this should be the starting point in all separations and where he has campaigned in this regard in the past. Similarly, however, Ms Ramos is focused on her employment being the primary indicator of the children's relationship with their father. Importantly, Ms C is of the view at [48] that, with greater insight and objectivity:

    It is possible that these parents will be able to communicate more effectively at some point and it would be problematic if the absence of communication was used as a strategy to avoid an equal shared care arrangement. This family potentially could be a candidate for such an arrangement in the future, however, both parent’s working arrangements coupled with the young age of the children, requires consideration as to the most appropriate arrangements that remove the children from the conflict but maximise the relationship they have with both parents.

11. In formulating her recommendations, Ms C notes the considerations of the young ages of the children and their need for stability. She notes that work arrangements for both parents which see Ms Ramos with problematic shift and travel work commitments and where Mr Hemiro works a 5 day Monday – Friday week. It is noted that the children currently spend three days a week in child care.

12. At [55] Ms C formulates her recommendations within this difficult recipe as follows:

    In order to maximise benefits for the children, an arrangement whereby they live with their mother and spend approximately 2 nights per week with their father should be considered. Ideally, the parents would communicate with a minimum of two weeks’ notice as to which days they would be. It is further recommended that the weekend time is shared equally between the parents with each having two weekends in any four week period. It is foreseeable that as the children reach school age and as the parents’ communication improved that additional time with their father should be considered.  

13. In accordance with her summary at [59] and despite some ambiguity at [55] I, understand Ms C to be recommending the children spend four nights per fortnight with their father (but as a minimum with a suggestion of increase in the future) and for this to incorporate at least the certainty of one weekend per fortnight (or two weekends per month) with an obligation on Ms Ramos to give requisite notice of her work roster but, in any event, for the weekends to occur with some anticipated certainty.

Section 60CC factors

Section 60CC(2)(a) – the benefit of the children having a meaningful relationship with both of their parents

1. All of the indications from the Family Report and the reporter’s observations are that these children have, despite logistical difficulties, been able to establish successful, comfortable and meaningful relationships with both of their parents. It is somewhat surprising that the children's relationship with their father has developed to such an extent given the apparent lack of regularity and routine in the relationship thus far. By way of comment, this may be a statement as to the underestimation of the robustness and adaptability of children generally and these children in particular within their relationships with parents and also that these children have benefited by what they understand to be fundamentally a good mother and a good father and perhaps contrary to the views of the parents of each other.

Section 60CC(2)(b) – the need to protect the children from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence

1. Both parents make accusations of family violence against the other.  There are allegations of physical violence. There are allegations of financial and coercive violence. My observations of the parties and understanding of their evidence is that any 'violence' is historically situational to their own relationship breakdown. The observations of the children with each of their parents suggests that the children themselves have not been subject to violence although they have almost certainly been exposed to their parents’ mutually suspicious and critical relationship. There is, however, no evidence of any probity that the children are in any physical, psychological or emotional danger in the care of either parent.  Therefore, whilst I expect that there has been some situational violence and in no way diminishing the abhorrence of such behaviour, I am not satisfied that the presumption of shared parental responsibility in these generally in these good and capable parents is rendered inapplicable.

Section 60CC(3)(a) - the views of the children

1. [X] and [Y] are just four years of age and could not be expected to have rationalised any views as to their living and parenting arrangements.

Section 60CC(3)(b) - the nature of the relationship of the children with each parent

1. Each of the parents themselves obviously claims a close and attached relationship with the children. The observations of the Family Reporter corroborate each parent in this regard. Significantly, Ms C observes different parenting styles and, correctly in my view, opines that the children might ultimately benefit from regular exposure to this breadth of style where the father is perhaps more robust and the mother more gentle in style.

Section 60CC(3)(c) – the extent to which the children's parents have taken, or failed to take the opportunity to participate in making decisions about major long-term issues in relation to the children and to spend time and communicate with the children

1. My observations of the mother and her evidence generally is that she is perhaps more assertive and empowered in her parenting of the children with an honestly held view that she is a more competent parent than the father. The evidence does not support her view in this regard. The tenor of the mother’s evidence was suggestive of a lack of commitment by the father and even perhaps an ulterior motive in pursuing substantial time with children. Again, there is no objective evidence to support such a view. Indeed, I found the father to be, consistently with his statements to the Family Reporter, also 'empowered' in what he saw as his 'rights' of equal time with the children. If there is any credence to my observations of each of the parents then each unfortunately misses the point being ultimately the best interests of the children rather than parental “rights” and empowerment.

Section 60CC(3)(ca) – the extent to which each of the children's parents has fulfilled, or failed to fulfil, the parent's obligations to maintain the children

1. Again the mother was critical of the father in this respect claiming that he sought to adjust his income or make frequent application to the Child Support Agency in an attempt to lower his child support obligations. I am unable to make any findings in this regard and again expect that the residual financial suspicions between these two parents is the source of these issues.

2. The mother continues to work, albeit part-time, in order to financially support her children. The father pays child support as assessed.

Section 60CC(3)(d) the likely effect of any changes in the children's circumstances, including the likely effect on the children of any separation from either of their parents

1. As mentioned above, these children's relationships have flourished with both their parents and despite what has been a lack of continuous routine and entrenched parental conflict. The mother proposes a greater routine in the children's lives but at the expense of the quantity of time for [X] and [Y] with their father. The father also proposes order and routine with set arrangements for time for the children between their parents on a fortnightly basis but does so with little or no regard to the mother’s work roster which she, of course, endures so as to provide financial support for her children.

Section 60CC(3)(e) – the practical difficulty and expense of the children spend time with and communicating with their parents

1. The practical issues are compounded by the lack of communication and palpable absence of trust between the parents. It is a fact that the mother pursues her career with a (employer omitted). Her roster varies from month to month. Equally, however, the father works a traditional 5 day week. As observed by the Family Reporter, this situation might be alleviated to a large degree or even totally if these two parents were able to resolve their communication issues. They live in relatively close proximity. They are both committed and good parents. The children have established successful relationships with them. The children benefit from the diversity in parenting styles. The manifestly suspicious and mutually critical personal relationship between these parents seems the only hurdle to what might be successful beneficial relationships for the children such that I expect many parents throughout Australia successfully negotiate daily or weekly without recourse to the Family Courts.

Section 60CC(3)(f) – the capacity of each of the children's parents to provide for the needs of the children, including emotional and intellectual needs

1. There seem to be many critics of the Australian family law system and many prepared to offer their unsolicited opinions as to alternative models. I think it is safe to say, however, that the Judges of the Courts in this country dealing with family law have long recognised the benefits and assistance to the Courts and to litigating parents from Family Reports. They provide independent, expert, arms-length observations, opinions and recommendations in respect of family dynamics often at odds with the self-interested content of affidavits of parties and their supporters. This is a process which sympathetically excludes the children from the Court room. Sadly, in the matter now before me, the affidavit material of both parents seems at pains to paint pictures of the other highlighting criticism as to the capacity, insight and agenda. The observations of the Family Reporter, however, are at odds with this evidence. Rather, the Family Report exposes in some detail the positive parental capacity and dedication of each of these parents. Sadly, it also exposes their lack of insight and inability to prioritise the children's best interests over their own personal conflictual relationship. Nevertheless, I am satisfied on the evidence in the Family Report that each of these parents has a capacity to attend to the physical, intellectual and emotional needs of [X] and [Y] subject only to them first acknowledging and dealing with their own communication and trust issues which, if unaddressed, will inevitably negatively impact on their children and their relationships with those children into the future.

Section 60CC(3)(g) – the maturity, sex, lifestyle and background of the children and either of the children's parents

1. These children are very young at just four years of age. Contemporary social thought (as indicated in the Family Report at [43] and [52]) is that a Court’s consideration of an equal or near equal shared parenting arrangement is very much dependent upon a finding of parental capacity to discharge such a regime together with a finding of a high level of communication and co-operation between the parents. As children become older and more adaptable and resilient then perhaps such considerations decrease in their relevance. Suffice to observe that these two parents have not yet reached a level of co-operation and/or communication which might assist the successful imposition of a regime of equal time between their parents. Nevertheless, the evidence of the Family Reporter suggests that [X] and [Y] are socially developed and stable and perhaps despite, rather than because of, the standard of cooperative parenting afforded them.

Section 60CC(3)(h) – if the children are aboriginal and Torres Strait Islander

1. Not relevant.

Section 60CC(3)(i) – the attitude to the children and the responsibilities of parenthood, demonstrated by each of the children's parents

1. At [41] of the Family Report, Ms C concludes that each of Mr Hemiro and Ms Ramos individually are high quality and child focused parents.

2. If those were the only relevant considerations then I doubt whether this matter would be before the Courts. However, as mentioned frequently above, each of these two parents has an entrenched and manifest suspicion and dislike of the other to a level where co-operation and communication are non-existent. It is likely, in my view, that their personal mistrust has little or nothing to do with their objective views of the other as a parent but, rather, confuses their disappointment in and criticism of the other following the breakdown of their own personal relationship.

Section 60CC(3)(j) – any family violence involving the children or a member of the children's family

1. These matters have been dealt with above.

Section 60CC(3)(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 children

1. It is trite to note that Family Law Courts are not so presumptuous as to attempt to make 'ideal' orders for children. The matters that come before these Courts are problematic for both parents and children. Parents bring their personal issues to the fore under a veil of supposedly arguing for the best interests of their children. Nevertheless, Courts are required to frame orders which, on balance, are seen to be in the best interests of the children and so as to maintain and assist beneficial and meaningful relationships with their parents. Whilst this will usually be an imperfect solution, the Courts still expect their orders to be followed and that Court orders and reasons for those orders provide a framework for parents to move forward to more successfully and co-operatively parent their children. In the matter now before me, however, the Family Reporter, consistent with my own observations, sees the intra-parent animosity being the sole stumbling block to these two fundamentally good parents being able to mutually enjoy what are quite clearly existing successful relationships with their children.  If, however, the mutual suspicion and criticism continues with a failure to communicate about their children then it is highly likely that these parents will again visit to the Family Courts, and if so, continued litigation in these Courts will negatively impact directly on their children, their children's emotional welfare and almost certainly on the relationships of each of the mother and the father with [X] and [Y].

Findings and Conclusions – Children

1. I am satisfied on the evidence that [X] and [Y] have established, comfortable and successful relationships with each of their parents. The issue here is perhaps best summarised by the Family Reporter at [39] above where she notes differing but positive aspects in the parenting of both Mr Hemiro and Ms Ramos and that [X] and [Y] could potentially benefit from those differences in style.

2. I am satisfied generally as to the capacity of each of these parents to attend to the children's needs and again agree with the Family Reporter at [41] when she opines “essentially this a matter dealing with two high quality parents who both operate with a high level of child focus. Both parents demonstrated their love and commitment for their children and their capacity to provide good care for them. Further to this, the children were responsive to their parents and interacted warmly with both.”

3. I am satisfied that there has been some situational family violence between these two strong willed individuals and certainly do not detect any power imbalances between them. Whilst family violence in any form and at any level is deplorable, it is not here such to feature prominently in my considerations.

4. Despite their demonstrated capacities, these parents themselves suffer entrenched communication and suspicions/conflict issues emanating from their own relationship breakdown. The lack of communication problems are manifested in the proposals of each of these parents for the daily care of the children and compounded by the mother’s shift work commitments. The father proposes a regime whereby the children spend a set routine of six nights per fortnight with him or effectively a shared care arrangement according to the Family Reporter he may have something of a fixation on “father’s rights”.  I accept that the mother’s roster is a moving feast with limited prior notice. She admits to some flexibility but not so as to accommodate the rigid proposal of the father. Nevertheless, Mr Hemiro’s argument for certainty and routine has some merit both for order in the children's lives and understandably for Mr Hemiro himself to be able to organise his life together with his expectations of the children being with him. However, those expectations are simply and practically incompatible with the mother’s work commitments. Put bluntly, orders in the terms of those sought by Mr Hemiro and without any room for flexibility would inevitably result in the mother either relinquishing her employment or her care of the children in favour of the father or even the mother utilising other child-carers if she has to work when the children are with her. This would result in an unenviable decision for her between her children and her work and a result which could not be in the children's best interests. Further and despite popular opinion as to children needing routine and order in their lives, the best evidence is that [X] and [Y] have thrived in their relationships with each of their parents. It would not be too simplistic to conclude that whereas these four year old twins have succeeded admirably in negotiating the logistics set out above, their parents have failed dismally.

5. For her part Ms Ramos proposes orders which are essentially based only on her work commitments. It might be understandable that Mr Hemiro feels aggrieved that his relationship with his children is dictated solely by their mother’s employment as that he assumes a role as baby sitter when she is unavailable because of work. Certainly, where the mother offers little or no credit to Mr Hemiro for his role in the children’s lives thus far but is ready to criticise him then such feelings might be justified.

6. Within this difficult factual platform and recipe of emotions and agenda the Court is still required to construct orders which allow and assist these children to continue and flourish their relationships with each of their parents. The children are young and require assistance to maximise the potential of their relationships with each parent. In summary, therefore, the orders sought by the mother provide minimal time with the father and utilise him only as a 'default parent' when she is at work. She would, on her proposal, be the sole determiner of when the children spend time with their father on a monthly basis. I am not persuaded that such a regime would be in the interests of these children.

7. Similarly, the father’s rigid approach would sit comfortably with his own relationships with [X] and [Y] but does not in any way accommodate the mother’s circumstances and in turn might be detrimental to the children’s relationship with their mother.

8. On reflection, I am not persuaded that orders in the terms of either parent’s primary proposals would be in the best interests of [X] and [Y]. I agree with the Family Reporter at [54] that it is not realistic for Ms Ramos to expect Mr Hemiro to be available on short notice and at her behest and this does not provide quality in his relationship with the children. However, the flexibility inherent in Ms Ramos’ employment needs to be given some regard. As such, I propose that the children spend a set period with their father and regardless of whether their mother is at work or not being on each second weekend from Friday afternoon (or the conclusion of school) until Monday morning (or the commencement of school). On the assumption that the mother will continue with her employment, then irresistibly she will need to call on the father for further time each fortnight to care for the children. In this respect, the father should have the first option to care for the children rather than other carers (although I note that this has apparently been the case) but in any event a minimum of two more nights in any fortnight. This will allow the children to have some set expectations as to time with their father and for this to be quality time on weekends. It will also accommodate to some degree the mother’s flexibility.

9. Although there is no evidence to suggest that the mother intends to relinquish her employment or change its terms to something more certain, should either eventuate then it is intended, in any event, that the children spend more time with the father than simply three nights per fortnight. Should the mother’s employment be removed from the equation then the children will spend a block period of two nights in the 'off week’ with the father, but, of course, this would not factor in unless and until the mother relinquished her employment. The parties will retain a liberty to apply in this respect. [X] and [Y] will soon be of school age. The current circumstances of the parents are such that I see no reason why I should not simply put the children with each parent for half of the term school holidays and on a week about basis on summer school holidays. Whilst this will inevitably create some logistical and communication issues for the parents, it will perhaps give them some motivation to better their efforts in these respects.

10. The result of the above, therefore, is that [X] and [Y] will spend each second weekend with their father until the Monday morning and regardless of the mother's employment. The father would then have first option to care for the children when the mother’s employment does not permit her to do so. However, in any event, the children will spend a minimum of a further two nights per fortnight with their father regardless of their mother's employment status and commitments. It is not possible to set these two nights in concrete and they must be left for the parties to communicate and be dictated by the vagaries of the mother's employment.

11. From the above it is only proper and in the children’s best interests that there be an order for equal shared parental responsibility. I accept the Family Reporter’s evidence that each parent is capable and committed. I am not making orders as sought by the mother that she be the sole determiner of the children’s time with the father. Whilst their communication and trust is low and their propensity to mutually criticise is high, these are areas where they can and should improve. I am confident that the end of this and the financial dispute might be a “line in the sand” moment so as to allow these good parents to isolate their own personal issues from a cooperative approach to parenting [X] and [Y].

Property

Financial issues

1. The parties here seek noticeably different orders for property settlement. The wife also asks for spousal maintenance. Her trial affidavit at [181] states:

   “I seek orders specified in my amended response filed 15 June 2017.”

2. That document does not set out any final orders for spousal maintenance. It does ask for an interim order. Nevertheless, in her final submissions the wife asks for spousal maintenance for an indeterminate period for a non-specific amount.

3. The husband argues for property settlement orders generally as follows:

   1.That the wife’s property at Property A in Victoria be sold and that the proceeds be disbursed as follows:

   (a)to pay agents costs and commission;

   (b)to discharge the first mortgage registered over the property;

   (c)to discharge the second mortgage registered over the property to Bank 1 loan number;

   (d)to pay the ATO debt in respect of the business, Business A in the sum of $3,000 and to reimburse the husband for the amount of $640.77 paid to the ATO;

   (e)to pay the husband’s Bank 2 credit card account in the sum of $9,000;

   (f)to pay the husband’s Bank 1 credit card in the sum of $2,815.00;

   (g)to pay the husband’s parents in the sum of $25,145;

   (h)that the balance then remaining, plus the notational sum of $50,000 (unilaterally drawn down on the property mortgaged by the wife post separation) as to 70% to the wife and 30% to the husband.

4. The husband also proposes that the wife be solely responsible for any loan to her mother in an approximate sum of $35,000 together with a Centrelink debt of $3,875.

5. Mr Hemiro asks for a superannuation split whereby the wife receive a base amount of $20,000 from his superannuation entitlement.

6. The wife asks for the following broad orders:

   a)That she retain her home at Property A together with its mortgage liability;

   b)That the husband retain his interest in an apartment at Property B such being registered in the names of his parents;

   c)That the husband be solely responsible for and indemnify the wife in respect of:

   i)any and all liabilities arising from Business A;

   ii)his personal taxation liability;

   iii)any and all liabilities owing to his parent, Mr & Ms Hemiro;

   iv)his credit card and motor vehicle loan liabilities;

   v)that there be a split of the husband’s superannuation entitlements so as to achieve equality of entitlements between the husband and the wife, taking into account the wife’s superannuation entitlements;

   vi)that in all other respects each of the parties retain those items of property currently in his or her possession.

7. By the time of her final address, the wife is also asking for a cash adjustment of $30,000 from the husband on account of ‘costs expended by her prior to becoming self-represented.’ I take this to be a premature application for costs by the wife and will disregard it for the purposes of my consideration under s.79 of the Act although the husband’s argument for an “add back” of the wife’s legal costs paid through a mortgage draw down will be considered.

Issues

1. The wife is self-represented and although she was thoroughly prepared and her cross-examination was conducted with some skill, the complexities of the legal issues generally and of s.79 in particular, often escaped her grasp and her case was often obfuscated by her sense of personal grievance and considerations of fault aimed at the husband.

2. Firstly, and although the wife did not actually make the submission, it is clear that her position is that the Court should conduct its consideration of the property pool on an ‘asset-by-asset approach’. Specifically, she says that the husband made no, or minimal, contribution to her home at Property A, which she purchased prior to the commencement of their relationship and where the parties lived during the course of their marriage and that the husband should therefore have no entitlement in or from this property.

3. The husband argues for a ‘global’ consideration of the parties’ property pool.

4. Secondly, there is a major dispute in respect of the status and ownership of an apartment at Property B. The wife says that the husband and others have made representations that he is the beneficial owner of that property despite its title being registered in the names of his parents. The wife says that the husband has frequently moved money between bank accounts to cloud his actual ownership. She says that the husband and his parents now claim that the husband has no interest in the Property B property only so as to minimise her entitlement under s.79 of the Act. Specifically the wife says that the husband himself claimed that the Property B property was registered in his parents’ names so as to defeat any claim by his former wife. The wife says that the Property B apartment should be included in the pool of property for considerations and at value.

5. The husband denies that he has ever had any legal or equitable interest in the Property B property. His parents gave evidence supporting the husband. The husband says that the Property B property should not be included in the pool for consideration. He says that any representations that he has made (including some documented) were untrue and only as a result of him “big noting” himself or dishonestly boasting so as to impress the wife.

6. Thirdly there is a dispute as to the current mortgage liability secured by the Property A property. It is agreed that the current liability is $250,000. The parties agree that the wife drew down $50,000 from that mortgage post separation in order to meet her legal costs. Those costs were paid via a personal loan first obtained from the wife’s mother such repaid from the drawn-down. Consequently, the mortgage liability should be included in the pool at $250,000 but consideration be had of the wife’s paid legal costs which she says amount to $35,000. She argues, that the remaining $15,000 was necessary and reasonable expenditure by her post separation in respect of her own and the children’s support[2].

   [2]  Omacini & Omacini (2005) FLC 93-218

7. The husband’s Counsel argues simply that a sum of $50,000 be ‘added-back’ to the pool to account for the wife’s post-separation draw-down and consequent increase in the mortgage liability. Similarly, it is agreed that the wife withdrew $10,000 from her superannuation entitlement post separation. The husband’s Counsel asks again for an ‘add-back’ of $10,000. The wife argues that these monies were necessary reasonable expenditure.

8. Fourthly, the husband says that there is an amount of $119,451 owing to Bank 1 on a business loan in respect of the business operated by Business A, such business having now been sold. The husband says that this is a debt of the marriage remaining from an asset of the marriage and that it should be included in the property pool and the wife share responsibility accordingly.

9. The wife argues, ‘presumably on an asset-by-asset basis’, that the husband should be responsible for the whole of this liability. She says that he acted unilaterally in obtaining the loan. She says that the husband did not consistently put the income from the business into loan repayments. She says that he has not serviced the loan since the sale of the business or since separation of the parties. She says that he has purchased assets for himself from the proceeds of sale of the business rather than attend to the loan. She says that the loan has been retained and indeed increased deliberately by the husband so as to minimise her entitlement under s.79 of the Act. Further, the wife says that the husband improperly and unfairly induced her to offer her home as security for the business loan in circumstances where she did not receive proper independent advice.

10. Fifthly, the husband says that outstanding personal loans from his parents of $25,145 are debts of the marriage. He says generally that his parents provided various loans throughout the marriage and to assist with the car was business. The husband says that the loans are legitimate and evidenced by partial repayments. The husband’s mother, Ms Hemiro, corroborates this evidence and seeks repayment.

11. The wife says that the loans are effectively a ‘sham’ perpetrated by the husband and his parents so as to minimise her entitlement under the Act. The wife says that she had no knowledge of the husband obtaining the loans and no knowledge of or benefit from the expenditure of the monies allegedly advanced. She says that the husband should be solely responsible for any loans alleged to be outstanding to his parents where he can point to no benefit received by her or the family.

Relevant law

1. Matters of property settlement are provided for in s.79 of the Act. Subsection (1) offers that there is a discretion in the Court to make such orders it considers appropriate. Subsection (2) requires that the Court not make any order altering the property interests of the parties unless it is satisfied that it is just and equitable to make an order. Section 79(4) sets out the factors that the Court shall take into account in determining what, if any, orders should be made.

2. The High Court in the well-known decision of Stanford & Stanford[3] confirmed that the consideration in s.79(2) and that in s.79(4) are not to be conflated. That is, the Court must first determine whether it is just and equitable to make any order separately from a simple consideration of the parties’ contributions. In this process the Court is to identify the legal and equitable interests of the parties in property. ‘Property’ includes assets, liabilities and financial resources. For these purposes, superannuation interests are to be treated as property. In the matter now before me and where the parties have joint legal and equitable interests in property and specifically residual loans in respect of the business and where their relationship has most certainly broken down, it is proper for the Court to consider an alteration of their interests.

   [3] (2012) FLC 93-518

3. Consequently, it is then for the Court to determine the property pool and to attribute value to the items in that pool. Significantly, the Court then considers the contributions made by the parties to the property pool. Contributions may be of a direct or indirect financial type and may also be non-financial in the sense of home maker and parent. After the contribution considerations the Court considers whether it is then just and equitable to make any further adjustments by reason of the relevant matters under s.75(2) of the Act.

4. Importantly, the husband here argues that contributions be considered globally and generally without specific asset focus. The wife, however, undoubtedly argues (although she did not use the terminology) for the Court to consider the parties’ property and the contributions to that property on an asset-by-asset approach.

Global or asset-by-asset approach

1. It is now well established that it is permissible for a trial judge to enter into a consideration of the parties’ entitlement under s.79 of the Act by either a global or asset-by-asset approach.[4] The former involves an alteration or division of the property pool on a global view of the total net pool without necessarily a focused attribution of particular contributions to particular assets, liabilities or resources. The latter or asset-by-asset approach involves a determination of the parties’ contributions to individual items of the property pool.

   [4] Norbis & Norbis (1986) FLC 91-712

2. Although experience suggests that most matters are more commonly and conveniently dealt with by the global approach, it seems that the alternative may be appropriate in circumstances where the marriage is of short duration and/or where the parties have maintained relatively separate finances and/or where a particular contribution might be directed to particular asset. Further it is open to the Court to consider separately two ‘pools’ (or more) dependent upon the status of an asset or pool of assets.

Relevant background facts

1. The parties married on 2010 and separated on 29 March 2016. They did not cohabit before their marriage. Their relationship was therefore a relatively short one which endured for less than 5 and a half years. At the date of cohabitation the wife owned the property at Property A, subject to a mortgage. The parties lived in that property for the duration of their marriage. The wife and the two children remain living in that property.

2. There is no disagreement that the wife alone paid the mortgage and outgoings on the Property A property prior to, during, and post separation. Both the husband and wife say that they contributed to other living expenses. The wife’s unchallenged evidence is that the husband was unemployed throughout the majority of 2013. Her unchallenged evidence is that she took maternity leave during the marriage and cashed in all of her annual and long service leave entitlements and maintained the mortgage and outgoing payments.

3. The husband owned an apartment at Suburb P as at the time of commencement of cohabitation. There is now general agreement that he sold the apartment in 2014 and netted $34,481 (although the wife initially argued that the husband had netted a substantially greater amount which he had not disclosed). It is not disputed that the husband deposited these monies into his own personal bank account and contributed none of that money directly to the mortgage over Property A.

4. Except during her maternity leave, the wife worked throughout the marriage as a (occupation omitted) on a part time basis with an annual income of around $35,000. The husband was unemployed for 2013. He is currently employed with (employer omitted) as a (occupation omitted). He discloses an annual base gross income of approximately $104,000 - $119,000 (there is conflicting evidence).

5. In mid-2013 the husband purchased a business at Suburb Q. His affidavit discloses a purchase price of $220,000 with disbursements of $12,389.69 totalling $232,389.69. The husband borrowed $250,000 for the purchase. I have no evidence as to why the husband borrowed an excess of $17,611 or what became of those excess funds.

6. The business was purchased under the company umbrella of Business A. The husband was the sole director and company secretary.

7. The husband’s loan for the purchase of the business required third party guarantees from each of the husband’s parents and from the wife. For that purpose the wife was required to offer her home at Property A as security. To this end, the bank required her to receive independent legal advice. At [135] of her trial affidavit, the wife states:

   On 4 June 2013 Mr Hemiro drove me to his lawyers and accompanied me into the appointment where I was required to sign papers to acknowledge that I had received independent legal advice as to the nature and effect of my role as guarantor of the Bank 1 Business Loan. Mr Hemiro maintained present (sic) during the appointment despite that he is the borrower on the loan. As a result of his presence I felt pressured to sign the document.

   On the day I attended that appointment I was 2 months pregnant with our twins. I was taking daily doses of hormones to assist me with the pregnancy. I was feeling vulnerable and stressed. I was unable to resist Mr Hemiro’s insistence that I guarantee the loan so that the purchase could occur.

   Mr Hemiro insisted that I guarantee the purchase despite that hi parents had also agreed to guarantee the loan. His parents offered their Suburb R home as security for the business purchase. This was later changed so that the Property B property is now secured for the loan.

8. Exhibit “R17” tendered in these proceedings is the Solicitor’s Certificate purporting to certify the wife’s independent advice. It is signed by Peter Renwick, Solicitor. Mr Renwick, or his firm, was the husband’s solicitor in respect of the purchase of the business. Mr Renwick is the husband’s solicitor in these family law proceedings. Both Mr Renwick and the wife signed the Solicitor’s Certificate on 4 June 2013.

9. Specifically, the Solicitor’s Certificate certifies that:

   “I certify that in the absence of the borrower and before the guarantor signed the documents…”

10. The wife deposes in her affidavit that the husband remained in the room with her and the husband’s solicitor. That evidence was not challenged or not successfully challenged.

11. The wife says that she felt pressured to sign the guarantee and that she did so at a time of personal vulnerability.

12. The husband’s evidence was that the wife was fully informed and voluntarily and keenly attended his solicitor’s office with the implication that she did not seek independent advice.

13. Notably, the husband did not adduce evidence from Mr Renwick as to the circumstances of his advice to the wife or to dispute the wife’s assertion that the husband remained in the room during such advice. I note, however, that the wife did not bring any application in respect of Mr Renwick acting in the Family Law proceedings and did not herself call him to give evidence.

14. The husband brought a civil action in the Supreme Court of Victoria against the vendor of the business for misrepresentation as to profitability. The matter resolved with a payment of $55,000 gross to the husband. Legal fees were $8,768 leaving a balance of $46,232. These balance monies were paid to the husband on 23 and 29 September 2014. He deposited $40,000 to the business loan account but not until 7 January 2015. The husband gives no explanation as to the delay or as to the use of the balance funds save and except that:

    “…these monies were applied to business and family expenses….”

15. The above or similar is a phrase used by the husband in his affidavit and in his viva voce evidence on a frequent basis when asked to explain or particularise expenditure and monies in his possession.  

16. In October 2015 the husband signed a contract for sale of the business for $190,000. The purchaser did not settle on the contract. The husband’s unchallenged evidence was that the real estate agent retained the totality of the forfeited deposit of $19,000. Although I find such business practices to be questionable, the husband’s evidence was not challenged and I am prepared to accept that this was the case.

17. The sale of the business was then subject to another contract on 19 May 2016 for $155,000. This was approximately 2 months after the parties’ separation. That contract settled eventually on 19 August 2016. The settlement statement from the husband’s solicitors being exhibit “R4” to his trial affidavit shows balance monies received of $116,561 and noting a deposit into a bank account (unparticularised) of $112,012.45 after solicitors costs and disbursements. The wife did not take issue with any discrepancy in these figures but again these apparent discrepancies are not explained by the husband except in the vague way set out above and, of course, I do not have the benefit of any forensic tracing or accounting evidence. Certainly, however, no explanation of any particularity is given by Mr Hemiro as to why the entirety of the $116,561 was not paid off the business loan nor is there any explanation as to the expenditure of the discrepancy of $4,548.

18. Generally and frequently the wife gave evidence that she was not consulted in even the most minimal way in respect of the day to day operations of the business. She volunteered, however, that she understood the business to operate on a ‘cash’ basis and attempted some cross-examination of the husband as to the apparent lack of regular deposits into the business accounts. Further, the wife cross-examined the husband as to the use and whereabouts of regular income from a (food) van located at the business. Again, the husband’s standard answer was that these monies from both sources were used for ‘business and family expenses.’

19. On the balance of probabilities and on the evidence before me, I am satisfied that the husband operated the business effectively independently of and without consultation with the wife and did not regularly or frequently account to her for the proceeds of that business. I am not satisfied that the various bank statements put before me assist in providing a forensic tracing of the income from the business.

The husband’s financial transactions with his parents

1. The husband claims an accumulation of numerous personal loans made by parents to him to constitute an outstanding liability of the marriage with a balance of $25,145.

2. The wife does not accept this to be a matrimonial debt. She says that she was never consulted by the husband in the obtaining of any of these loans. She says that the parents at no time consulted her in respect of the advancements or ever informed her of them. She says that she has no knowledge as to the purpose of the loans asserted by the husband during the relationship and post separation.

3. Yet again, in cross-examination, the husband’s consistent response was that the monies were used to prop up the business and/or for ‘business debts and family expenses.’

4. The husband’s mother was cross-examined specifically as to whether or not she conferred with the wife in respect of these loans. Ms Hemiro confirmed the wife’s own evidence that this did not occur. The husband’s mother was unable to particularise the purpose for the loans or the focus of the monies advanced.

5. Whilst the husband and his parents claim a somewhat lengthy and complex web of loans and partial repayments, the wife says that there is no logical or traceable nexus of loan to need. That is, she says, that both she and the husband were working and when she was on maternity leave then it was she who activated her leave entitlements to pay for the mortgage liability which she did without direct assistance or contribution from the husband. She says that the business income was in cash and regular and supplemented by rental from the (food) van on the premises. The wife urges the Court to be suspicious as to the bona fides of the financial relationship between the husband and his parents which include unusual discrepancies such as payments by the husband to his parents into the ‘Property B apartment account’.

6. The wife’s evidence as to the husband acting unilaterally with income from the business and generally not consulting her, is consistent with the husband’s use of monies, particularly the proceeds of the civil litigation in respect of the purchase of the business and the eventual proceeds of sale of the business for his own ends and benefits such as he purchased a motor vehicle with those funds before transferring the vehicle to a lease and not immediately depositing the funds to the business account and doing so post-separation and without the consent of the wife who, of course, had her home remaining as security for the husband’s business loan. At [97] and [115] of her trial affidavit, the wife says:

   [97]  Mr Hemiro did not apply his income to our family. During our relationship Mr Hemiro continually moved funds between his account and his parent’s accounts. I have reviewed the document (sic) available to be that were produced by the Bank 1 and the Bank 2. These account statements show that Mr Hemiro was constantly moving funds between his accounts and his parent’s (sic) accounts. I say that Mr Hemiro was making a contributions towards the Property B property that his parents hold on his behalf.

   …

   [115]    Mr Hemiro was financially controlling during the relationship. He was secretive about his financial affairs. Mr Hemiro refused to provide me with access to information about his personal finances or the bank accounts associated with the business. He provided me with a secondary credit card for his credit card account but no access to the credit account information. For 2 years and 2 months while I was on maternity leave, Mr Hemiro paid me a cash allowance of $10 per week which increased to $20 per week at the suggestion of a counsellor we saw during the relationship.

7. At [118] the wife’s unchallenged or not successfully challenged evidence is:

   Mr Hemiro refused to provide me with information about his personal finances. We generally kept separate accounts, any joint accounts we had were controlled by Mr Hemiro. I did not have access to any of those accounts as Mr Hemiro refused to provide me with Personal Identification Numbers (PINs) or internet access to the accounts.

8. At [119] the wife deposes:

   I operated my own account with the Bank 3 throughout our marriage. I met all the mortgage payments on the mortgage encumbering the Property A property. Mr Hemiro made no direct financial contributions to Property A. I continued making these payments during my maternity leave, to do so I cashed in all of my annual leave and my long service leave. This ensured that I continued to receive my monthly salary of about $4,000 for the duration of my maternity leave, from which I would meet the mortgage payments and so much of our living expenses as I was able to.

9. In respect of loans from the husband’s parents the wife deposes at [148]-[153]:

   [148]    Between 4 January 2016 and 5 January 2016 Mr Hemiro’s father, Mr A Hemiro deposited the sum of $25,000 to the loan encumbering the business. I was not aware of these deposits, nor was I aware that Mr Hemiro had loaned money from Mr A Hemiro.

   [149]    I was not consulted about the loans, nor was I consulted by Mr Hemiro about any financial dealings between him and his parents during our relationship. Had Mr Hemiro consulted me about borrowing money from his father I would not have agreed.

   [150]    I recall that during December 2015 and January 2016 Mr Hemiro and I were having significant difficulties in our relationship and we were discussing separation.

   [151]    Mr Hemiro accepted these loans in circumstances where the loan encumbering the business was being serviced and where the previous loan statement that as at 31 December 2015 there were funds of $61,533.57 available to be drawn from the loan.

   [152]    I do not accept that the loans were necessary for the continued operation of the business or to assist us with our living expenses. I am not aware of how Mr Hemiro applied these funds.

Sale of business

1. The sale of the business eventually settled on 31 August 2016. At that stage, the business loan liability stood at $176,962. On 6 September 2016, the balance proceeds of sale of $112,012 were deposited into the husband’s Bank 1 account. If put directly to the loan then that would have left the business loan liability at approximately $64,950 (even without explanation as to what happened to the balance from the proceeds of $116,561). It was not until 28 September 2016 that the husband then applied an amount of only $97,400 to the Bank 1 Loan from the $112,012 proceeds of sale having been deposited into his own Bank 1 account. No account is given for the discrepancy of $14,612. Further, on 24 October 2016 the husband drew a bank cheque in the sum of $30,000 from the Bank 1 Business Loan account and apparently to repay his parents for the series of $5,000 loans totalling $30,000 received by him over a few days in January 2016.

2. The husband concedes that no ongoing payments have since been made to the business loan account which he says has a liability currently sitting at $119,451. In simple terms, therefore, the husband’s business loan seems to have run out from what should have been $64,950 to $119,451 during a period when these parties have been separated and engaged in this litigation.

3. The wife says that she was not a party to or consulted on the transactions in respect of the proceeds of sale of the business.

Conclusion as to global or asset-by-asset approach

1. I am persuaded that justice and equity in this matter requires a consideration of the parties’ contributions on an asset-by-asset approach. This is a marriage of short duration. The current assets of substantial value being the wife’s home and the husband’s Motor Vehicle B were owned by the respective parties prior to the commencement of the relationship. It is argued that the parties’ finances were kept separate in respect of focused assets. The only notable joint enterprise of these parties was the purchase of the business which however was purchased solely by the husband through his corporate umbrella and where the wife argues that all decisions in respect of the financial operation of that business were made unilaterally by the husband. The wife claims that the husband has an equitable or beneficial interest in a property at Property B which she says should be added to the pool. All of these factors satisfy me that an asset-by-asset approach is proper in these circumstances.

The property pool

1. As a working reference it is helpful for these reasons to set out the asset property pool as asserted by the husband at the trial, as follows:

Assets

Wife’s home	Property A	$530,000
Husband’s motor vehicle	Motor Vehicle B	$19,000
Husband’s motor vehicle	Motor Vehicle A	$15,000
Wife’s motor vehicle	Motor Vehicle C	$10,000
Business A	Business A	NIL
Total	$574,000
Husband’s claimed ‘add back’	Wife’s unilateral draw down of her superannuation	$10,000
TOTAL	$584,000

Liabilities

Mortgage	Property A	($250,000)
Bank 1 Business Loan	Business A	($119,451)
ATO business debt	Business A	($3,000)
Husband’s Bank 2	Credit Card balance (as at separation)	($9,000)
Husband’s Bank 1	Credit Card balance (as at separation)	($2,815)
Husband’s Motor Vehicle A loan	Finance Loan	($18,000)
Husband’s personal loan liability	Owing to Mr & Ms Hemiro	($25,145)
Total Liabilities	-$427,411

Net tangible assets

Total assets	$584.000
Total liabilities	-$427,411
Total net tangible assets	$156,589

Superannuation

Husband’s superannuation	Super Fund M	$153,699
Wife’s superannuation	Super Fund N	$39,081
Wife’s superannuation	Super Fund O	$63,697
Total Superannuation	$256,477

Property B Property

1. In addition to the above, the wife asserts that the husband is the equitable or beneficial owner of an apartment at Property B. That property has a current value of approximately $590,000. The husband denies that he has any interest in that property. His denial is supported by the evidence of his parents and also his sister who provided an affidavit but was not cross-examined by Ms Ramos.

2. The husband’s parents, Mr & Ms Hemiro, are the registered owners of the apartment at Property B. The Title shows the purchase to have been registered in 2005.

3. The wife says that the husband is the beneficial owner of that property. It seems that the wife argues that the registration of that Title in the names of Mr & Ms Hemiro is a form of fraudulent collusion between the husband and his parents in order to avoid any claim of either the wife and/or the husband’s former wife. The wife therefore argues that the husband retains an equitable interest via a resulting trust in the sense considered by the High Court in Calverley v Green.[5]

   [5] (1984) 155 CLR 252

4. The wife makes the assertion of fact as to ownership of the Property B property and therefore carries an onus of proof on the balance of probabilities pursuant to s.140 of the Evidence Act 1995 (Cth). That is, in practical terms, there is a presumption of ownership in the husband’s parents by reason of their legal Title. The wife holds an onus to rebut that presumption to the requisite standard of proof.

5. The husband and his mother, Ms Hemiro both gave evidence and were cross-examined in respect of this issue. Both the husband and his mother deny that the husband holds any interest in the Property B property.  They deny any collusion or fraud at defeating any interest claimed by the wife or the husband’s former wife.

6. The wife relies on the following evidence to rebut the presumption of ownership of the husband’s parents:

   i)the wife says that the husband represented to her on a number of occasions that the Property B property was owned by him and that it was registered in the name of his parents in order to defeat any claim by his former wife;

   ii)the wife says that the husband told her that he put at least $100,000 towards the purchase of the Property B property in 2002;

   iii)the wife adduced evidence from her sister, Ms A, who deposes that the husband had also told her of his ownership of the Property B property. Ms A was cross-examined. Her affidavit at [5] – [6] states:

   5.  I recall a conversation that I had with Mr Hemiro’s sister on Sunday 3 October 2010. It was the day after Mr Hemiro and Ms Ramos’ wedding. I hosted a lunch for Mr Hemiro’s family in my home. Mr Hemiro’s sister, Ms L, approached me in the kitchen.  Ms L told me that my family need not worry about Ms Ramos and Mr Hemiro’s financial security because Mr Hemiro had both the apartment in Property B as well as one in Suburb P.

   6.  During the course of Ms Ramos and Mr Hemiro’s relationship Mr Hemiro consistently maintained that he was the owner of the Property B property. He mentioned it in conversations with me on a number of occasions.

   iv)the wife produced an email sent from the husband to her dated
   1 February 2010 in which the husband provides a form of family financial plan and specifically includes his interest in the Property B property in that document. The text of that message which is followed by a calculation table is:

   sent: Mon 1/2/2010   11.04 AM

   To: Ms Ramos

   Subject: Our future – looks grim or exciting (depends how you look at it) …

   Hey bubs – I want you to have a look at these calculations below (if you can view them).

   Basically, I have calculated our maximum payments to the loan for Property A (after this year) that we can pay.  This tells us we can own our home in 4 years – by 2015 !!

   It means that all your pay and both our tax returns need to go straight to the house and we can be debt free after that!!

   The Property B unit will be completely paid off in the same fashion in the year after that! (my emphasis)

   We can own over $700,000 and have a huge income of equivalent to $11,000 per month combined by the time our car lease is over!!  WOW!!

   (currently we are on about $3,200 combined – that is what we are living on – i.e. income minus our loan expenses for all our investments)

   If we buy a new home after that, for, say $800,000 or up to $1,000,000, we could pay it off purely off the income from our investments as close as 2016 (and live very comfortably on both our incomes) (my emphasis)

   How cool !!   s0 – scary or exciting?;

   v)the wife says that she and the husband actually stayed in that property, albeit for a very short period, and that she assisted with the cleaning of the apartment and in distributing leaflets advertising for tenants;

   vi)the wife may also rely on the admission of Ms Hemiro in her affidavit at [11] that in late 2009 there were family discussions between Ms Hemiro, Mr A Hemiro, the husband, and his siblings as to the gifting of certain assets to their children (although she says that those discussions amounted to no actual gifts or transferring assets due to a downturn their financial circumstances;

   vii)that numerous deposits were made by the husband into the Property B property management bank account held in the names of his parents;

   viii)the wife relied on exhibit ‘A1’being the Engagement book that the husband has used to propose to the wife which included representations that he owned the Property B property in the form of photographs of both his Suburb P apartment and the Property B apartment.

1. The husband and his mother rely on the following:

   i)the husband concedes that he has made representations including those cited by the wife about as to his ownership of the Property B property but says that he was only “big noting” himself in order to impress the wife;

   ii)together with the Title always being registered in the names of Mr & Ms Hemiro, they also obtained and continue to hold a mortgage registered over the Property B property in their names alone;

   iii)that contrary to the wife’s assertion that the husband claimed a contribution of ‘at least $100,000 in 2002’, the purchase was not made or settled until 2005;

   iv)there is no documentary corroboration of the husband contributing $100,000 or at all to the Property B property or that he had hidden money from his first wife noting also that the final consent orders for property settlement between the husband and his first wife are an exhibit in these current proceedings;

   v)the husband adduced evidence by an affidavit of 27 January 2018 from his sister, Ms L, who disputed the wife’s claim of the husband having a beneficial equitable interest in the Property B property and of the alleged discussions with Ms A. The wife chose not to cross-examine or challenge the evidence of this witness who therefore provides some evidentiary corroboration of the position taken by the husband and his parents;

   vi)the husband and Ms Hemiro answer the wife’s assertion of the monies being paid by the husband into the Property B management bank account by saying that these amounts were irregular and often of small amounts which have no consistency or nexus as to time or quantum consistent with the payment of a mortgage or any other contributions towards the ownership or maintenance of the Property B property. Ms Hemiro says that the payments or ‘repayments’ of the various loans advanced to the husband and made into that account simply as a convenience for referencing the loan repayments.

   vii)the husband and Ms Hemiro say that documents corroborate the Property B property to have been purchased in 2005 or 2006 for $206,000 with a contemporaneous mortgage loan of $190,000. This evidence effectively contradicts the wife’s evidence that the husband contributed $100,000 towards the purchase;

   viii)all documents of Title, mortgage, lease and bank accounts have consistently been solely in the names of Mr & Ms Hemiro alone;

   ix)that Ms Hemiro plausibly explains the fact that no action was taken on the 2009 discussions about transferring assets to their children by a substantial financial downturn to them in the value of investment (omitted) licences held by Mr & Ms Hemiro;

   x)both the husband and Ms Hemiro deny that the wife had ever stayed at the Property B property or cleaned it and says that this is inconsistent with the status of a third party managed property with ‘(property manager)’ being responsible for all management of the property including cleaning and sourcing of tenants.

Findings and Conclusions – Property B property

1. There are many matters that cause some concern about the husband’s evidence in respect of financial transactions generally and specifically as to the Property B property. First, his concession as to claiming ownership of the property to the wife but being dishonest in the sense of ‘big-noting himself’ is perhaps plausible but in no sense is it strong probative evidence and could equally appear as an opportunistic response or explanation. Similarly the evidence of Ms Hemiro that there were indeed discussions in 2009 about the possibility of gifting assets to the children but that the advancements did not proceed because of financial constraints is superficially perhaps corroborative of the husband’s evidence. Nevertheless, it is notable that the husband himself did not mention these 2009 conversations in his own affidavit to give some rationale to his ‘big-noting’. Rather, these 2009 conversations are mentioned only by his mother in her affidavit which was not sworn until 2 February 2018 and which was notably after the wife had cross-examined the husband himself in respect of these matters on the first day of the trial and where Ms Hemiro was only ‘joined’ by my suggestion/insistence after the commencement of the proceedings when it became apparent that the wife was seeking orders attaching to the Property B property which, of course, is registered in the name of Mr & Ms Hemiro. That is, significantly, the husband had not otherwise adduced evidence from his parents, being evidence which, if honest, may have explained his representations to the wife and to the wife’s sister as to the ownership of the Property B property. The husband had been armed with the wife’s materials and her assertions prior to the start of the trial and had not by then adduced this explanatory evidence. No explanation is given by him for what may be an important evidentiary omission.

2. Secondly, I harbour doubts as to the status of the email of 2010 from the husband to the wife. He says that it is a form of ‘love letter’ to the wife where he is again ‘big-noting’ himself. However, any reading of that email shows it to be a more formal document in the form of a financial plan for the husband and the wife with a high degree of mathematical detail rather than some more general attempt at a form of romantic persuasion. Generally, it is difficult to accept the confession of a lie as a probative explanation for what prima facie appears as an empirical and rational truth.

3. Nevertheless, the wife carries an onus and burden of proof to rebut the presumption carried by the legal Title albeit only to the standard of the balance of probabilities. Her argument suffers chronologically in that she says that the husband represented a contribution by him to the purchase of the Property B property in 2002 when I am comfortably satisfied on the documents before me that the purchase was not made and/or settled until 2005 or 2006.

4. Similarly, the simple mathematics of the purchase price of $206,000 together with a mortgage of $190,000 does not account for the wife’s asserted contribution by the husband of $100,000.

5. The husband and his mother offer plausible explanations for his payments into the Property B apartment management bank account although I remain unconvinced as to the necessity of using that account. In any event, those deposits do not correlate with any regularly of quantum or time in respect of mortgage or similar repayments. Similarly, there is no evidence of the husband directly benefiting from the rental income from the Property B property. Neither the husband nor his mother retreated under vigorous cross-examination on this issue by Ms Ramos.

6. Consequently, and despite a number of indications of the husband having some beneficial interest in the Property B property, but where the wife carries an onus of proof, I am left with the situation where the presumption of ownership by reason of the legal registered Title is not rebutted on the balance of probabilities. Consequently, I will not include the Property B property in the pool of assets for consideration and alteration between these two parties.

Contributions

1. The issue of contribution is now therefore most relevant to, firstly, the wife’s home, and secondly, what are termed the ‘husband’s loans’ or more particularly being the Bank 1 Business Loan residual liability of $119,451 and the asserted loan liability to his parents sitting $25,145.

2. The wife’s home is agreed at the value of $520,000. Its value as at the date of the marriage was $300,000-$350,000. It has therefore appreciated over the last 8 years in a sum of approximately $170,000-$220,000. The parties’ cohabitated in that property, however, only for some 5 and a half years. The wife’s mortgage liability at the date of marriage in 2010 stood at approximately $225,000.

3. The wife paid all mortgage and outgoings on the Property A property before, during and post separation. Whilst the husband concedes that he made no direct payments to the home but says that he contributed his income towards family expenses during the relevant 5 and a half year period. The wife’s unchallenged evidence, however, is that she also contributed the residue of her income to family expenses. No particularised breakdown is given, however, by either party.

4. The husband’s affidavit material is silent as to any other contributions by him to the Property A property. In his evidence in Court, he made some unconvincing attempts to claim contributions by way of some structural additions or improvements to the property. I did not find his evidence convincing in this respect.

5. The property is now valued at $520,000. Undoubtedly the capital value increase has been due primarily to positive market factors, since 2010 but only because of the ‘sling shot’ effect of the wife’s ownership of the property prior to the marriage[6]. Further, the husband has not lived in that property since March 2016 and although it would not be proper to allocate the capital gain on a pro rata basis, it is reasonable to expect the gains to have continued after separation.  The wife has made all payments since March 2016. The husband obviously had the benefit of residing in the property during the period of the marriage.

   [6] Pierce v Pierce [1999] FLC 92-844

6. I find the wife’s contribution to this asset to be overwhelming in every respect. She provided the initial ownership impetus for the ‘windfall’ of the beneficial market forces. She has solely met the outgoings post separation. She made the direct financial contributions during the marriage. I accept, however, that the husband made some indirect contributions during the period of cohabitation although I also accept that the wife contributed in this respect.

7. The wife concedes a draw down from the mortgage of $50,000 post separation. She did so in order to pay a $35,000 loan from her mother which had been used to pay legal costs in these proceedings. She says that the remaining $15,000 was utilised for necessary and reasonable living expenses for herself and the children post separation. Whilst paid legal costs might ordinarily be ‘added back’, I am generally satisfied that the wife reasonably used the residue of $15,000 on living expenses. This was her evidence and was effectively unchallenged by cross-examination. She works only part time. She and the children did not have the benefit of the husband’s income although she did receive child support. Ms Ramos did, however, give evidence that she had to get the Child Support Agency to garnishee the husband’s wages in order to receive regular child support. The wife was not successfully challenged in cross-examination on this issue. By this stage, of course, she was continuing to solely meet the mortgage and other outgoings whilst having the added responsibility for the care and support of twin infant children.

8. The current equity in the property is $270,000. This equity is lesser by $35,000 by reason of this wife having paid her legal costs. I have a discretion as to whether to “add-back” that amount or, perhaps more properly, simply take it into account pursuant to s.75(2) (o) of the Act. I prefer the latter approach in circumstances where the husband did not volunteer evidence as to his own paid legal costs, if any. Nevertheless, I am comfortable in finding that the husband has benefited personally and frequently by unexplained discrepancies in the abovementioned numerous financial transactions. Consequently, in all of those circumstances I exercise my discretion in including the mortgage at $250,000 being its current liability. I note the wife’s paid legal costs but also the various financial benefits retained by the husband or unexplained discrepancies in his financial transactions. I also note the wife’s superior initial contribution of the ownership and equity in the home, the short duration of the relationship, the wife’s direct financial contribution to the home, the indirect financial contributions of both parties and including the husband being unemployed for one year of this 5 ½ year relationship but generally take into account the benefit the wife has had from the mortgage account together with all other contributions to the Property A property.

9. Taking all matters into account including the direct and indirect contributions, I am of the view that the husband’s contribution to the wife’s Property A property be allocated at 10% and the wife’s contribution at 90%. In dollar terms, therefore, the husband’s entitlement from that property is $27,000.

10. Secondly, the husband’s case is effectively that the parties should be equally responsible for the loan liability to his parents ($25,145) and the residual Bank 1 Business Loan ($119,451). The wife says that the husband should be solely responsible for both liabilities.

11. The asserted liability to the husband’s parents raises a number of issues for consideration. The wife says that she was never consulted as to the obtaining of any loans by the husband from his parents during the marriage. The husband himself does not specifically assert that the wife was consulted or that she agreed to these loans. One of the lenders, the husband’s mother, gave evidence and agreed that she at no time discussed these loans, in any of their aspects with the wife. The tenor of Ms Hemiro’s evidence was that the loans were made to the husband personally at his request variously throughout the parties’ marriage and usually without specific explanation as to need or purpose. The indication of the mother’s evidence was that this was a long term arrangement between the husband and his parents. I accept therefore that the wife was oblivious to these loans.

12. The husband says that the wife and children benefited from the loans advanced by his parents but without any particularisation. The wife denies any benefit. She says that both parties were working and that her income met the mortgage and other property expenses. She says that the parties had the additional income from the business and (food) van lease of $1,000 per month. In short, the wife says that there is no evidence of demonstrated need or purpose for the husband to have obtained personal loans from his parents.

13. Where the husband asserts a fact, namely that the loans were obtained for need or purpose then he carries an onus to prove that fact on the balance of probabilities. That is, the wife does not carry a negative onus to disprove the husband’s assertions of fact.

14. The husband’s evidence was generally unsatisfactory in respect of his explanations for the taking of loans from his parents. He offered only that the proceeds were used for ‘business and family expenses’. He provided no greater particularisation. His mother offered no particulars except to say that the monies advanced in early 2016 in a quantum of $30,000 by way of $5,000 instalments over a short period were on account of the husband suffering some emotional fragility at that time. I do not accept this as evidence of explanation for the obtaining of loans where there is no medical or other evidence before me in respect of the husband’s incapacity for his employment at that time. To the contrary, the evidence leads me to comfortably find that the husband was consistently employed from 2014.

15. The husband obtained loans from his parents totalling $30,000 over a period of only a couple of weeks in early 2016 which was only shortly before the parties’ separation. He did not consult the wife. The lender did not consult the wife. No satisfactory explanation is given for the obtaining of those loans or explanation for the use of the proceeds of the loans. The husband unilaterally ‘repaid’ the $30,000, again without consultation with the wife, from the balance proceeds of sale of the business. On the balance of probabilities, I do not accept that these loans were either necessary or legitimate loans. The husband’s mother produced a ‘spreadsheet’ which was apparently created only during the course of these proceedings or shortly beforehand and appears to be collaborative effort between the husband and his parents. I see it as having little probative or corroborative value over and above it being a self-serving document where the husband is unable to point to any need or purpose for the asserted loans.

16. These ‘loans’ must be seen within the context of the financial relationship between the husband and his parents and the wife’s suspicions as to the husband manipulating his personal finances in order to minimise her entitlement under s.79 of the Act. Again, neither the husband nor his parents give any or any sufficient explanation as to the need or purpose of the loans. The corroborative evidence is vague and lacking probity. Prima facie these parties had income sufficient to meet their needs. The husband has a demonstrated capacity to be less than precise or prudent in his dealings with money as evidenced by his delays in depositing funds from the sale of the business and even then not depositing the full funds. I am not satisfied, therefore, that the husband has shown on the balance of probabilities that the ‘loans’ are legitimate or should be considered as a joint liability for the purposes of my consideration. In any event, I am satisfied that, if there were such loans then he obtained them unilaterally and has shown no benefit to the wife or family. The wife should bear no responsibility for these loans.

17. Thirdly, the husband says that the current balance of the Bank 1 Business loan sits at $119,451 and that this should be considered as a joint debt of the parties. The wife says that the husband has manipulated this liability so as to maximise it for the purposes of these proceedings and again in an effort to minimise her entitlement under s.79 of the Act.

18. The husband says that the wife was a willing and voluntary party to the loan and to the purchase of the business and that she delegated all management of that business to him. The tenor of his evidence was that the business was not successful. He says that he regularly needed to obtain loans from his parents to assist financially in respect of ‘business debts.’

19. The circumstances of the wife signing a guarantee and providing her home and security for the business loan are troublesome and dubious to say the least. It is clear that the wife attended on the husband’s solicitor for the necessary ‘independent’ advice. The wife says that the requirement for such advice to be in the absence of the husband was ignored. She said that the husband sat in on her meeting with his lawyer. She argues a form of pressure to sign, given her circumstances of being pregnant and receiving IVF hormone treatment at the time. However, she adduces no expert medical opinion in this respect. A significant evidentiary failure, in my view, also occurs in the husband not producing evidence from his solicitor to verify what he says was the wife’s keen and voluntarily participation. These concerns are compounded by that solicitor also being the husband’s current family law solicitor in these proceedings. I note that no objection was taken by the wife or her previous solicitors. Further, the wife herself did not call or subpoena the solicitor to give evidence.

20. On a consideration and balancing of all of the evidence, I am unable to find that the wife voluntarily attended the husband’s solicitors’ office and signed the guarantee for the business loan.

21. This business was effectively purchased by the husband alone albeit under the umbrella of a trust and trustee company of which the husband was the sole director and secretary. I am satisfied generally that the husband ran the business without anything other than general reference to the wife. Nevertheless, there is no evidence that the wife attempted to be proactive during the running of the business or that she conducted any checks and balances herself and despite her home being security for the business loan. I am satisfied, therefore, that the wife, at the very least acquiesced in the husband’s management of the business.

1. The husband’s financial transactions in respect of this business are also dubious. I do not have the benefit of forensic accounting evidence of the business’s financial records. There are numerous bank statements tendered by each of the parties but ultimately of little assistance without some expert evidence. The bald facts in respect of this loan are that it stood at $176,962 as of 31 August 2016 which is contemporaneous with the business sale. On 6 September 2016 the proceeds of sale of $112,012 were deposited by the husband into an account but not the loan account.  If deposited against the loan balance that would have left a balance owing on the loan of $64,950. The husband offers no explanation for not depositing the entirety of the proceeds of sale against the outstanding loan. The husband has undoubtedly manipulated these balances and the receipt of these monies to his own benefit and, I expect, so as to maximise its balance at the date of these proceedings. He unilaterally used those monies to purchase a Motor Vehicle A albeit with a later return of the monies from a lessor. He unilaterally drew $30,000 from the account to ‘repay’ his parents for asserted loans (dealt with above) and again did so without consulting the wife and where the wife’s home was security against that business loan. Other discrepancies in the balances are met by the husband in the witness box with the unhelpful response ‘business and family expenses.’

2. In conclusion, I am prepared to accept that the wife acquiesced to the loan and its original quantum. However, I am persuaded that, at its simplistic and mathematically, the loan liability after the settlement of the sale of the business should have sat at $64,950.

3. The husband claims that the loan liability now amounts to $119,451. Even taking the $30,000 repaid to the husband’s parents from the current balance of $119,451 leaving $89,451 it is clear that this loan has been allowed to run down by an amount of approximately $25,000 since the sale of the business in September 2016.

4. The husband simply does not give any or any sufficient explanation for his apparent use of monies well in excess of his income. On his evidence he also, of course, had the use of at least $30,000 in loans made by his parents in the first weeks of 2016. At face value, even the husband’s own sworn financial statement filed in these proceedings does not indicate anything other than he being able to adequately meet his expenses from his income.

5. Generally I do not accept the husband’s evidence as to the financial management of the business and his general assertion that it was not profitable. I accept that generally it was predominately a ‘cash’ business. I accept that there was an additional income of $1,000 per month rental from the (food) van situated on site. I accept that the husband controlled the business finances without reference to the wife. I accept the financial viability of the business was at least to the value of its sale price of $155,000.

6. Other financial issues are at play here. Firstly, the husband was in employment at least from 2014. The best evidence is that he had taxation returns available to him of $17,000 (2014), $13,500 (2013), and $10,000 (2016). As was common with his evidence in court, the husband was only able to explain the use of these substantial amounts by them being ‘dissolved through all our debts.’ In simple circumstances where the wife was paying the mortgage and the income meeting the business loan, there is no evidence offered by the husband of any other “debts”.

7. The husband (and also the wife) have not attended to the residual business loan since separation or perhaps from the time of the sale of the business and hence increasing it to its current balance. However, during that time, the husband has obligated himself to a Motor Vehicle A lease loan. He gives no explanation as to what the wife says were the proceeds of an insurance claim from the write-off of his previous vehicle. He has had the income from his employment together with the benefit available to him from a taxation return from 2017. He claims to have had the benefit of substantial loans over a consistent lengthy period from his parents including a sum of $30,000 in the matter of a few weeks in early 2016 and shortly prior to parties’ separation. Frankly, the bank statements provided by the husband in these proceedings assist little in explaining his asserted expenditure.

8. Having had the benefit of seeing and hearing the husband give evidence in respect of all financial issues, I do not find him to be a good or believable witness. His evidence was often vague and frequently obfuscated by generalised statements of little evidentiary assistance. Generally where carrying an onus of proof, his evidence does not discharge that onus of proving asserted facts. I am left strongly with an impression that this husband has entered into a course of conduct aimed simply at putting his finances in the poorest possible light for the purposes of these proceedings.

9. In respect of the outstanding loan liability to Bank 1, I am of the view that the husband explains nothing over and above the simple mathematics set out above which should have seen the loan balance at $64,954. To have it drawn out to a current sum of $119,451 defies understanding. On the basis of the wife having acquiesced to the obtaining of the loan and delegating the management of the business to the husband, I am of the view that she should share in the repayment of the loan but only starting at its mathematically logical sum of $64,954. Given the husband’s management of the finances and the business and the difficulties in his evidence above, and including his unexplained retention of various smaller amounts, I am of the opinion that justice and equity should see the wife being responsible for one third of that amount which I calculate at $21,650.

10. The husband claims further liabilities in respect of credit cards and an ATO debt of $3,000 which he says relates to the business which has, of course, been disposed of as long ago as September 2016. I repeat that the husband unilaterally utilised the proceeds of the sale of the business for his own purposes including the purchase of a motor vehicle (since the subject of release). He had what he says were the proceeds of substantial loans from his parents (since repaid from the proceeds of sale of the business). He has had the sole use of his income subject to child support assessment. The business bank statements provided by the husband did not suggest regular or consistent injections of income from what was obviously a ‘cash’ business. On the balance of probabilities, and given the contents of the husband’s sworn financial statement as to his apparent over payment of tax instalments, I am satisfied that he should have by now had the benefit of a taxation return consistent with those of recent years. During this time the wife has continued to work only part time and has had the primary care and responsibility of the twin pre-school aged children. In all of those circumstances, I am of the view that the husband should be responsible for the taxation liability and for his own credit cards where again I harbour strong suspicion of the husband maximising his liability for the purposes of these proceedings.

11. There is one remaining liability for my consideration being a Centrelink debt of the wife in a sum of $3,875. This resulted from an adjustment to the wife’s entitlement following the husband’s eventual lodging of a tax return. Clearly, therefore, the debt is prima face a liability of the marriage. This debt should not fall solely to the wife. I accept that the debt arose only because of discrepancies in the husband’s taxation and assessments. In circumstances where the husband has had the benefit of his quite generous tax returns, I am of the view that he should be responsible for this debt.  I am unsure as to whether or not the wife has paid the Centrelink debt and therefore will adjust any cash settlement she is required to make on the husband accordingly with the wife to then assume responsibility for this Centrelink debt.

12. In all other respects, I am persuaded that these parties should retain those assets currently in his or her possession and/or any personal liabilities. The husband’s Motor Vehicle B was owned by him prior to separation and not subject to any particular contributions by the wife during the relationship. The wife’s motor vehicle was purchased during the relationship and should remain her property. Whilst the funds for this purchase may have been contributed by the husband, I am of the view that the nature of the financial interrelationship between these parties and the purchase by the husband of a Motor Vehicle B together with him retaining the Motor Vehicle B combine so that there should be no adjustment for the wife retaining this depreciating asset. I note again the wife’s unchallenged affidavit evidence that the husband has retained without explanation the insurance pay out on his previous motor vehicle in the sum of an estimated $14,000.

Conclusions as Contributions

1. Consequently on an asset-by-asset approach as to contributions, and where the major dispute resolves around the status of the wife’s home and the husband’s liabilities to his parents and the Bank 1 Business Loan, I conclude that the wife should make a payment to the husband of $48,275 comprising of $30,500 (husband’s contributions to Property A property) plus $21,650 (wife’s contributions to the Bank 1 Business Loan) less $3,875 (husband’s responsibility for the Centrelink debt).

Section 75(2) considerations

1. I must also consider whether there should be any further adjustment in favour of either party after consideration of the relevant matters under s.75(2) of the Act. Both parties are employed, albeit that the husband’s income being substantially greater than that of the wife. The twin children will live primarily with the wife pursuant to my orders. However, those orders will in all likelihood obligate the husband to provide suitable accommodation and facilities for the children when in his care. In addition, the husband pays child support as assessed. The orders that I make should allow the wife to retain the Property A property subject to her being able to raise the funds to make the cash adjustment on the husband for his entitlement under these orders. The husband, on the other hand will need to re-establish himself in accommodation. In all of these circumstances, and after considering the property on an asset-by-asset basis, I am not persuaded that any further adjustment to either party is justified where the husband will be leaving this marriage with only debt and the wife will be retaining her home conditional upon making a relatively small cash payment and noting my considerations above of the wife’s paid legal costs under s.75(2)(o).

Superannuation

1. The husband has an entitlement of $153,699. The wife has current entitlements of $103,778. The wife has had the benefit of the draw down of her superannuation of $10,000.  This was a relatively short marriage of just over 5 years duration. I accept that a significant portion of each parties’ accumulation occurred outside of the time of the marriage. The balances of the entitlements of each of the parties are not substantial. In all of those circumstances, I do not propose to make any splitting orders in respect of either party’s entitlement.

Spousal maintenance

1. The wife seeks spousal maintenance in an indeterminate amount and open ended. Section 72 of the Act provides at subsection (1) provides:

   (1)     A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:

   (a)     by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;

   (b)     by reason of age or physical or mental incapacity for appropriate gainful employment; or

(c) for any other adequate reason;

having regard to any relevant matter referred to in subsection 75(2).

(2)     The liability under subsection (1) of a bankrupt party to a marriage to maintain the other party may be satisfied, in whole or in part, by way of the transfer of vested bankruptcy property in relation to the bankrupt party if the court makes an order under this Part for the transfer.

1. It is accepted that an applicant seeking spousal maintenance has an onus to prove, firstly, that he or she has need of spousal maintenance and, secondly, that he or she is unable to meet those needs. It is then, and only then, that a threshold is crossed and consideration will be given to the other party to contribute to the applicant’s maintenance.

2. It is proper to note that little particular focus was placed during the course of these proceedings on the wife’s application for spousal maintenance. She was not cross-examined in any detail as to her particular needs and I generally take at face value the contents of her sworn financial statement. The wife did, however, cross-examine the husband in some detail as to the contents of his financial statement and including gaining a reluctant concession that he pays instalments of taxation over and above those required by the ATO Scale thereby explaining his historical substantial taxation returns.

3. The wife has an income from her part time employment of approximately $35,000 per annum. The husband discloses an income of approximately $104,000 per annum. As is evident in my reasons herein, however, I am of the view that the wife perhaps has the capacity for greater employment depending on the level of dependency she places on the husband for the care of the children. She has a mortgage liability in the home she will retain. She receives child support but incurs expenses in respect of the children. The wife’s income is supplemented by a relatively small Centrelink payment which, of course, is disregarded as income for the purposes of this consideration. At Part N of her financial statement the wife estimates personal needs of $505 per week. The particulars of those needs or expenditure however, disclose some as being unnecessary such as entertainment $50 per week and gifts $30 per week. Consequently, given the wife’s current income and my findings as to a potential greater capacity for employment together with her current disclosed income and personal expenditure, I am not persuaded that she has discharged her onus to prove, on the balance of probabilities, that she has a need for spousal maintenance over and above her own capacity to meet those needs. Consequently, the application for spousal maintenance will be dismissed. In any event it is relevant to note that the wife did not show an excess in the husband’s income over expenditure when I include the responsibility he will retain for reasonable appreciation to the substantial outstanding business loan which, of course, continues to be secured in part by the wife’s home.

Orders

1. Having regard to all considerations, therefore, I calculate that the wife will make a cash adjustment on the husband of $48,275. The husband will then be responsible for the Bank 1 Business loan account. I am mindful, however, that the wife’s home remains as part-security for that loan and any order I make for the husband to provide indemnity to the wife for that loan is not enforceable against the bank. I propose to order therefore that the wife’s payment to the husband of $48,275 be made directly by her towards reducing the liability under the Bank 1 Business loan and to decrease the amount owing accordingly.  The husband will then be responsible for the balance and will indemnify the wife. I note also that the husband’s parents Mr & Ms Hemiro remain parties to these proceedings and that their home also secures the business loan and I will therefore restrain the parties or any of them prioritising or obtaining the release of the parent’s security over that of Ms Ramos. I do so on the basis that the historical financial relationship between the husband and his parents has been without consultation with the wife and where it would not be just and equitable in the circumstances set out in these reasons for the husband and his parents to obtain a release for the parents’ security prioritised over the wife’s security.

I certify that the preceding one hundred and seventy-five (175) paragraphs are a true copy of the reasons for judgment of Judge McGuire

Date: 17 October 2018