Hibbins & Hibbins
[2008] FMCAfam 228
•17 March 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| HIBBINS & HIBBINS | [2008] FMCAfam 228 |
| FAMILY LAW – Parenting – competing proposals – forensic investigations – issue of Rice and Asplund – equal shared parental responsibility. FAMILY LAW – Property settlement – add backs – loan from husband’s parents – contributions – just and equitable. |
| Family Law Act 1975 Family Law (Shared Parental Responsibility) Act 2006 (Cth) |
| C & C (2005) FCAFC 429 Farnell (1996) FLC 92-681 Goode (2006) FamCA 1346 Kildea (2007) FamCA 1524 Lavender & Turner (2007) FamCA 182 Pierce (1998) FamCA 74 Rice and Asplund (1970) FLC 90-725 Sklovsky and Gastin (2007) FamCA 540 SPS and PLS (2008) FAMCAFC 16 |
| Applicant: | MR HIBBINS |
| Respondent: | MS HIBBINS |
| File Number: | BRC1964/2007 |
| Judgment of: | Baumann FM |
| Hearing dates: | 19 & 21 November 2007 |
| Delivered at: | Brisbane |
| Delivered on: | 17 March 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr Matthews |
| Solicitors for the Applicant: | Berck & Associates |
| Counsel for the Respondent: | Mr Carrigan |
| Solicitors for the Respondent: | Nita Stratton-Funk & Associates |
ORDERS
That the Mother and the Father have joint long-term parental responsibility for the child, T born in 1998 (“T”).
That during the school term T live with the Mother in each fortnight commencing on a Friday from 3:00pm or after school on the second Friday after the date of these Orders until 9.00am or before school on the first Friday with the Mother to deliver T to her school and the Father to collect T from her school.
That T live with the Father at all such times as are not referred to in these Orders for the child to live with the Mother, or as otherwise may be agreed.
That the Mother and the Father each be solely responsible for day to day parental responsibility for T whilst in their respective care.
That each parent notify the other as soon as practicable of any significant illness requiring hospitalisation or medical emergency or accident that might arise in relation to T whilst in that party’s care.
That without limiting the parental responsibility of either parent pursuant to paragraphs 1 and 4, each parent shall keep the other parent informed of and shall properly consult with the other with respect to any significant parenting issues affecting T. For the purpose of these Orders, a significant parenting issue is: -
(a)Any serious medical or health matter concerning T;
(b)Any serious medical or health matter affecting either parent which may affect the ability of that parent to care for T;
(c)Matters relating to the education of T, including but not limited to the choice of school and curriculum;
(d)Disciplinary matters other than of a trivial nature;
(e)Matters concerning the social development and sporting activities of the child;
That unless otherwise agreed between the parties T live one half of each school holiday with each parent respectively, with the Mother to have the second half of the school holidays in 2008 and in alternate years thereafter, and the Father to have the first half in 2008 and in alternate years thereafter save for April 2008 when the mother shall have the first half of those holidays and the father shall have the second half of those holidays.
That if T is living with the Mother on her birthdays and such date is a school day then T is to spend time with the Father from after school until 6.00pm and if the birthday occurs on a weekend T is living with the Father for one half day of each birthday.
If T is living with the Father on her birthdays and such date is a school day then T is to spend time with the Mother from after school until 6.00pm and if the birthday occurs on a weekend T is living with the Mother for one half day of each birthday.
That T spend time with the Father on his birthday from after school until 6.00pm if the birthday falls on a school day or one half day should the Father’s birthday fall on a weekend.
That T is to spend time with the Mother on her birthday from after school until 6.00pm if the birthday falls on a school day or one half day should the Mother’s birthday fall on a weekend.
If T is with the Father on Mother’s day then the weekend will be swapped with the next weekend.
If T is with the Mother on Father’s day then the weekend will be swapped with the next weekend.
That T shall communicate with each parent by telephone at all reasonable times and that both parties be at liberty to telephone T at any reasonable time.
Handovers during school terms occur at the school or the location of T’s care/educational programme. At other times changeovers are to occur at the [L] Shops.
That each parent authorise T’s school to provide to the other parent such information about T including report cards, school newsletters and the like, at the expense of the parent requesting the information.
That each party keep the other advised of their residential address and contact landline telephone number and mobile telephone number, name and place where T shall live, and provide notification of any change of those contact details within forty-eight (48) hours of such change.
That the Mother be restrained and an injunction be granted restraining her from permitting the child T to come into contact with Mr L or
Ms W or from permitting those persons to attend with her for the purpose of any changeover of T between the parents.
That no later than two calendar months before the expiry of any passport held by T, each parent do all acts and things and sign all documents necessary to procure a passport for T. In the event that either parent refuses, fails or neglects to do all things and sign all documents as required under this Order, then the Registrar of the Federal Magistrates Court be hereby appointed pursuant to s.106A of the Family Law Act 1975 to sign such documents in the name of the relevant parent and do all such acts and things as required by that parent under this Order.
That each parent have liberty to take T on an overseas holiday for no more than four (4) weeks in each year, but to coincide with a school holiday period and on terms that two months written notice be given to the other parent outlining the following:-
(a)the proposed itinerary for overseas travel;
(b)the proposed departure and return dates;
(c)addresses and landline telephone numbers for the venues where it is proposed that T stay whilst overseas;
(d)the mobile telephone number that the parent with the care of T overseas will have available;
(e)the proposal for the other parent to have compensatory time with T upon her return from overseas, but such that any compensatory time is not to run concurrently with any period when the other parent is themselves proposing to take T overseas under the provisions of this Order.
That the Father not denigrate the Mother or members of the Mother’s family to T or in the presence of her and use his best endeavours to ensure that no other person denigrates the Mother or members of the Mother’s family to T or in the presence of her.
That the Mother not denigrate the Father or members of the Father’s family to T or in the presence of her and use her best endeavours to ensure that no other person denigrates the Father or members of the Father’s family to T or in the presence of her.
That the Wife retain for her sole use and benefit absolutely and the Husband relinquish all right title and interest in and to the following assets which shall remain the sole property of the Wife:
(a)Mazda 626 motor vehicle in the possession of the Wife;
(b)The furniture and chattels in the possession of the Wife;
(c)All bank accounts in the name of the Wife and/or in which the Wife holds an interest;
(d)The Wife's superannuation entitlement with REST
That the Husband retain for his sole use and benefit absolutely and the Wife relinquish all right title and interest in and to the following assets which shall remain the sole property of the Husband:
(a)the Husband's interest in the Company [R] Pty Ltd including the businesses operated by the said Company and all machinery, equipment and vehicles owned/leased by the said Company;
(b)the Lexus 4WD motor vehicle in the possession of the Husband;
(c)the furniture and chattels and the Jet Ski in the possession of the Husband;
(d)all bank accounts in the name of the Husband and/or in which the Husband holds an interest;
(e)The Husband's superannuation entitlements with Sunsuper and with Tower
That the Husband and the Wife do all acts and things and sign all documents necessary to forthwith effect a disbursement of the capital and interest accrued on the funds held in the joint names of the parties with the ANZ Bank, Account Number 0xxx as follows:
(a)45% to the Wife (being approximately $256,797 as at 1/4/08)
(b)The remaining balance to the Husband and from the said remaining balance, the Husband pay to the Wife the sum of $71,821
That the Husband be solely responsible for the debt to his parents Mr and Mrs H in the sum of $60,000 and that he indemnify and keep indemnified the Wife with respect to all liability thereunder.
That save and except for the assets dealt with pursuant to these Orders, each party shall retain all other property not previously dealt with herein and in the respective possession, ownership or control of that party as at the date of these Orders.
That save and except for any liability dealt with pursuant to the terms of these Orders, each party shall be solely responsible for and meet payment of his or her liabilities and shall keep indemnified the other party from any liability thereunder.
That the Husband and the Wife execute all documents as necessary and do all acts and things necessary to give effect to the terms of these Orders and in the event of either party refusing or neglecting to execute any such document or to do any such acts or things, then the Registrar or Deputy Registrar of this Court is hereby appointed pursuant to Section 106A of the Family Law Act to execute such documents in the name of the relevant party to do all such acts and things.
IT IS NOTED that publication of this judgment under the pseudonym Hibbins & Hibbins is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 1964 of 2007
| MR HIBBINS |
Applicant
And
| MS HIBBINS |
Respondent
REASONS FOR JUDGMENT
Introduction
It is a consistent amazement to me that there are cases that come before the Court where, despite chronic conflict and dysfunction between the parents; exposure by a child overly and inappropriately to conflict and to the litigation; and demonstrated inability of the parents to consistently remain child focused and insightful; the child still presents as happy, securely attached and generally well loved and cared for by those parents.
This is one of those cases and T, now aged nine, is such a child.
These reasons seek to explain my decision for the future care arrangements for T which I believe meet her best interests. Later in these reasons I deal with a dispute about dividing the property of the parties – a dispute which clearly fuelled some of the anger, mistrust and aberrant behaviour of T’s parents – the Applicant husband Mr Hibbins (aged 29) and the respondent wife Ms Hibbins (aged 49).
Brief History
Although the parents finally separated in August 2005 the relationship has been extremely volatile. Whoever said “love and hate” are very similar human emotions could have had this couple in mind.
T was conceived by the IVF process when the relationship between the parties was less than established or secure. In fact, the mother was living in [A] working as a beauty therapist – the father was an interstate truck driver. At the time of conception they were not really living as a couple, although a cohabitation in Queensland did occur just prior to the child’s birth in October 1998.
When the child was about three months old the mother and the child moved back to [A] for some nine months before returning to Queensland where the parents married in December 1999. The mother had in her care two older children from her first marriage – B and C who were aged 16 and 14 at the time of marriage with Mr Hibbins.
In mid 2001 the husband was diagnosed with bowel cancer. He was only 33 years old. This was clearly a very traumatic time for him and his young family.
By early 2002 the relationship was faltering. The tensions and conflict which were generated mostly by the quite different personalities and expectations of the parents was often erupting. From approximately April 2002 for 12 months until April 2003 there were brief separations; an allegation by the mother of child sexual abuse against the paternal grandmother and hospitalisation by the mother for alleged attempts of self harm and suicidal ideation. I remind myself that T was only four year old at this time. Strangely the parties still managed to enjoy an overseas holiday together in October 2002 – without T.
After the initial separation the mother commenced proceedings which resulted in an interim order by a Registrar, however within six months the parties reconciled. The father’s health and recovery from cancer had improved and the parents remained together until April 2005, when they separated again.
Importantly on 27 April 2005, the parties who were both legally represented by the same solicitors as they are now, entered into final orders about T in the Family Court of Australia which essentially provided that:-
“During school term, the mother and the father share the residence of [T] on an equal week about arrangement with changeover to occur from after school each Friday…”
It was further ordered for school holidays to be shared equally. Generally this arrangement has continued unaltered since then – a period to trial in November 2007 of two and a half years. Although after the orders there was one brief attempt at reconciliation, a final separation is agreed to have occurred in August 2005, when shortly after the father commenced proceedings in the Family Court of Australia.
The initial applications by the parties were interesting. The father sought an order that he have the predominant care of T – the mother responded by seeking a dismissal of the father’s parenting application, to preserve the then week about arrangement. No Court ordered change to the week about arrangement has yet occurred.
The arrangement has endured some significant allegations and events including:-
·The mother’s allegation that the father raped her in February 2006. The allegation which the mother pressed was investigated by police but no charges were laid. The father asserted any sexual incident at the time was consensual and initiated by the mother.
·An alleged road rage incident by the father in March 2006.
·An alleged physical abuse incident where the child was “scratched” by the mother’s fingernail.
·Allegations of the father acting violently at a hairdresser – an allegation arising from comments made by T; adopted by the mother but subsequently being recanted by the child. There was no reliable evidence to establish the incident in any way is occurred as the child report to the mother. In fact the unchallenged evidence of the hairdresser Ms D suggests the incident was a figment of the child’s imagination or at least distorted in its telling.
·Allegations of domestic violence and dysfunction between the father and Ms L who had commenced a defacto relationship with the father in January 2006. Ms L has in her care two younger children M and H. T clearly became close to these girls referring to them as “stepsisters”.
·
The relationship between the father and Ms L also being “on and off” resulting in the father, after the first family report by
Ms Lewis, ceasing cohabitation with Ms L in February 2007. By the time of the hearing the father’s relationship with Ms L (and the three girls’ continual connection) had been re-established although they were not living together. Although the mother had sought to restrain the child from being in contact with Ms L, she did not press the application.
·The unresolved property proceedings which resulted in the former family home being sold and with substantial funds being held in Trust now for over two years. In this regard I note that the proceedings were transferred at the joint callover to this Court and an earlier trial scheduled for August 2007 was adjourned and rescheduled for commencement on 19 November 2007 when it proceeded before me. I had hoped to be able to deliver reasons in this complex matter prior to now and acknowledge the added stress caused to the parties by the delay in doing so, which I regret.
Although this summary of events is daunting in itself, I am satisfied that this dispute has been clearly exacerbated by a dispute which seems to exist between Ms L and her former partner Mr L. Mr L is a police officer. He has been in a relationship with a Ms W. Even though
Mr and Ms L have been separated since September 2004, Mr L regarded it as important to inform the mother of the “affair” which commenced between the father and his former wife. The mother has allowed herself to be supported emotionally to some extent by Mr L and Ms W; the mother has allowed them to access family reports in these proceedings; Mr L has bombarded the Department of Child Safety with notifications about the difficulties in the relationship between Ms L and the father. Whilst I can accept his interest is primarily the safety and well being of M and H, his fixation with the father’s behaviour as he sees it (causing, not surprisingly, added conflict between them), has been less than helpful. He chose to offer himself as a witness in the mother’s case. Most of his seething remarks were disallowed by me for the reasons given by me (or ultimately conceded by the mother’s Counsel), however my observation of him in the witness box certainly confirmed that he has the father “in his sights” and his agenda has little, if anything, to do with the best interests of T. The concerning involvement of Mr L and Ms W (to a lesser degree), who are both police officers, and the mother’s alignment with their approach at times was also a concern to Ms Lewis. Whilst a dispute between Mr and Ms L continues, there is the prospect that any relationship between the father and Ms L is more troublesome. The father acknowledged his affection for Ms L – but at times has been resigned to the reality that the relationship may not be sustainable.
Competing Proposals
By the conclusion of the evidence and in final submissions the competing proposals before the Court were broadly (on the major care issues) that:-
Father
The father’s preferred position was the continuation of the week about arrangement and on equal sharing of school holidays. He also seeks that the child change schools to a private school where he believes the child’s education will be enhanced.
Mother
The mother’s preferred position is that the child now live predominantly with her and the spend blocks of five nights a fortnight with the father – she would suggest from after school Friday to before school Wednesday each alternate week. The mother seeks approximately equal sharing of holidays but in a different configuration, namely:-
·All of the Easter and September/October school holidays with the father.
·All of the June/July school holidays with the mother.
·Sharing of Christmas School holidays.
Family Report Writer’s Proposal
Experienced social worker Susan Lewis, for the reasons set out in her report suggests that the child spend:-
·Nine nights with the mother and five nights with the father during school terms.
·More of the school holidays with the father to “make up” for time not spent during the school term.
By so that the time T spends with the parties is approximately equal.
I also record that although the mother had sought sole parental responsibility, at the hearing both parents agreed they should have equal shared parental responsibility. I regard this concession or change from the mother’s previous position as significant.
Forensic Investigations
There has been no shortage of experts engaged by the parties, either jointly or by Court order. The two reports of Susan Lewis arising from interviews initially in November 2006 and then July 2007 are in evidence before me. Those reports were joined in evidence by a report of psychiatrist Dr Tod Wakefield arising from interviews conducted of the parties in January 2007. Before turning to some aspects of those reports, I also acknowledge earlier family reports and a medical assessment by psychiatrist Dr Slaughter were available to the parties from earlier parts of the prior litigation. Although not in evidence directly, Dr Slaughter’s opinions are ventilated by Ms Lewis in her first report (at paragraph 3.7 to 3.11), and Dr Wakefield also had access to Dr Slaughter’s report dated 14 July 2003, where Dr Slaughter apparently noted “that both parents had significant difficulties”.
Dr Wakefield was not required for cross examination and his concluding opinion was expressed as follows:-
“If Mr. Hibbins is to be believed, Ms Hibbins has a severe personality disorder of both the Borderline and Histrionic sub-types. If Ms Hibbins is to be believed, Mr. Hibbins has an Antisocial Personality Disorder. Independent collateral evidence is largely absent, but their respective versions of events and their presentations would suggest that both have vulnerable personalities. Ms Hibbins presents in an overly dramatic, emotional and attention-seeking fashion and recounts a history of rapidly shifting expressions of emotion, self-dramatisation and discomfort when she is not the centre of attention. These factors would certainly strongly suggest elements of a Histrionic Personality Disorder. Her unstable and intense interpersonal relationships, efforts to avoid abandonment, impulsivity, overdosing, mood instability, and difficulty in controlling her temper would also suggest strong features of Borderline Personality Disorder. It is difficult to say whether she meets the full criteria of these disorders without more independent collateral information.
Mr. Hibbins has had a fairly eventful childhood with significant congenital abnormalities requiring surgery and separations from his family. He has been married twice and recently maintained contemporaneous relationships with two women for the express purpose of obtaining money and possessions from one, Ms Hibbins. He admitted to physically assaulting his wife in front of his child and displays a lack of remorse. Rather, he tends to project blame onto Ms Hibbins. While these actions are suggestive of an Anti-social Personality Disorder I would agree with Dr Slaughter’s opinion that there are also significant features of an Obsessional Personality Disorder. While he was initially attracted to Ms Hibbins and her exaggerated emotional style because of his own rather restricted emotional capacity, he was unable to tolerate her emotionality for a prolonged period of time.
Neither parent currently has a significant Axis 1 psychiatric Disorder that would prevent them from caring for their daughter. There is no evidence that either has a depressive disorder, or a substance abuse disorder. T has spent almost two years in a shared care arrangement without any reported problems.
Mr. Hibbins has made a number of unsupported minor allegations about Ms Hibbins’ care of T but these do not appear serious enough to change the status quo.”
Ms Lewis in her first report (before the opinion of Dr Wakefield was available) raised concerns about the dysfunction in the relationship between the father and Ms L and opined at paragraph 8.1 that:-
“T presented as a happy healthy 8 year old who is strongly attached to both parents and used to a shared care situation. This regime was implemented by consent and T has essentially accepted this. She has indicated she wants to continue the shared care arrangement, although it is highly unlikely that she can appreciate the implications of her views, particularly given her age and the dysfunctional dynamics in the parental relationship.”
Ms Lewis was concerned about T’s learning being compromised. By the time of Ms Lewis’ second report, and amid the confusion of the status of the father’s continuing relationship with Ms L, it is apparent that Ms Lewis’ opinion had not significantly altered. It is not necessary in these reasons to recite all the observations of Ms Lewis, who was the subject of cross examination, but I find of particular relevance and of assistance the following matters:-
a)T when observed separately with both parents on separate occasions appeared happy, obviously well cared for and secure in her attachment to both parents.
b)She has clearly been aware and involved in this dispute. In my view this means I must treat what this delightful little girl says to everyone with some caution.
c)This is perhaps starkly evidenced by her answers to Ms Lewis about her “two wishes”. When presented to the report writer by the mother, T’s answer (at paragraph 6.29) was:-
“I would wish that my daddy would stop hurting people and hurting their feelings and to get a horse if daddy ever builds our new home.”
When presented on a different day by the father, her answer was recorded at paragraph 6.44 as saying:-
“that daddy could take me to do fun things more often and I get to share week to week with mum and dad.”
d)The child indicated she was not keen to change schools although the potential new school the father wants her to go to has horse riding which was attractive to T (paragraph 6.26).
The crux of Ms Lewis’ views are best set out at paragraphs 7.7 to 7.9 which I record as follows:-
“7.7T has indicated that she may prefer more time in her mother’s care. Obviously her mother’s availability is a factor in this. She obviously wishes for her father to spend more fun time with her. She indicates that she misses quality time with him. She raises concerns in her father’s environment that supports her feeling more secure in her mother’s care.
7.8 Ultimately, T indicates that she embraces equal shared care with both parties but more from the perspective of both parties missing her than her needing equal time with both parties. Whilst this is a dynamic often seen in children in the age group from about 7/8 through to about 11/12 given their focus upon fairness and justice, it is concerning that T may be placing her own needs behind those of her parents. She may well be compromised emotionally by trying to mange the conflict between her parents and their need for time with her and as a result this may be having an impact on her learning.
7.9This coupled with concerns as to the issues in the father’s environment, particularly in the context of his association with Ms L and risks in relation to future relationships, would support and increase in T’s time in her mother’s care, particularly during school terms.”
In her cross examination Ms Lewis observed that in respect of this child there are many and layered issues. The report writer was not able to conclude or accept the relationship between the father and Ms L “is functional”. Ms Lewis regards T as a child who is expressing wishes to try and keep both parents happy “and in the result her development may be compromised”. Within the context of the feverent litigation which has engulfed these parents, she says “they have both lost sight of T’s needs and development.”
As a result, Ms Lewis believes the week about care arrangement, although supported by the child (at face value), has not worked. Interestingly, although the mother in her Affidavit said the same, in cross examination the mother said the arrangement “has been great and stable” and has worked well for two and a half years.
Overall Ms Lewis opines the child, although not really saying it consistently, wants more time with the mother but probably within the context of equal time – therefore necessitating extra holiday time with the father.
Approach
I have considered the benefit of dissecting every event that the parties raise in their matter (which I have generally noted of significance in the earlier brief history), but have come to the view that it is not necessary to do so. The path by which I have come to my ultimate conclusion about maintaining the current week about arrangement for T with a sharing of holidays can, I hope for the parties, be discerned from my discussion of the primary and additional considerations under s.60CC which follows.
I can accept that these litigation hungry parents, who have clearly spent or committed many thousands of dollars to legal and forensic expenses, might be disappointed in my approach. Simply however, I have no desire for my reasons to be used as another tool in any competitive contest between these parents – or, quite possibly, in the dispute apparently still existing between Mr and Ms L about these children.
Both parents have at times acted poorly. That T does not present with more confronting personality or behavioural difficulties than not doing well in school, is surprising. It says to me - outside the context of this forum – both parents in their own yet different ways love their daughter dearly and show that to her. I have no doubt about that and from the conclusion of this matter (no doubt to be assisted by the resolution of the property proceedings and the added financial independence which they will gain from the release of funds), both of these parents have the opportunity and I think capacity to work together in providing a secure and happy future for their child.
Before moving to the relevant s.60CC factors, I think it is appropriate to record the principles which I am required to apply to determining a parenting dispute.
Principles
The child’s best interests are the Court’s paramount consideration. In determining those interests the Court must consider not only the objects of s.60B of the Family Law Act 1975 and the right of a child to have a meaningful relationship with all those people significant to them, but also the additional considerations are set out in s. 60CC. The primary considerations under s.60CC(2) and the additional considerations under s.60CC(3) will be analysed below to ensure that the order I propose will serve the best interests of T.
In Goode (2006) FamCA 1346 the Full Court made it clear that the presumption that equal shared parental responsibility is in the best interests of the child (s.61DA) does not carry with it any presumption about time. The issue of equal time is dealt with in s.65DAA and “when the presumption is applied the first thing the Court must do is to consider when making an order whether it is consistent with the best interest of the child and reasonably practicable for the child to spend equal time with each of the parents. If equal time is not in the interest of the child or reasonably practicable the Court must go on to consider making an order whether it is consistent with the best interest of the child and reasonably practicable for the child to spend substantial and significant time with each of the parents” (see Lavender & Turner (2007) FamCA 182).
It follows that unless the presumption of equal shared parental responsibility is rebutted, the Court must consider whether equal time with each parent is in the child’s best interests and reasonably practicable. If the Court does not make an order for equal time, the Court must consider whether the child spending substantial and significant time (as defined by s.65DAA(3)), is in the best interests of the children and is reasonably practicable.
I would add to this summary some comments about what I contend to be the submission of Mr Matthews for the father, that I should dismiss the mother’s application for a change to the current arrangements arising from the consent order now nearly three years ago under the principle of Rice and Asplund (1970) FLC 90-725.
Rice and Asplund Issue
At best, difficulties about applying the rule enunciated in Rice and Asplund (1979) FLC 90-725 include:-
a)The order in April was a consent order although not extensively considered by the Court at the time, but shaped by some expert opinion.
b)As the chronology reveals – the order was achieved within the turmoil of separation and possible (then achieved) reconciliation.
c)Although the order may have been shaped by the observations of the 2003 family report by Ms Bobir, that report is not in evidence before me, therefore making it difficult to properly understand how an independent family report writer’s opinion may have changed to that expressed by Ms Lewis now.
d)The father, who now urges dismissal on this basis, was the initiator of these proceedings seeking change which I note, by the responses filed by the mother, she sought to have dismissed.
e)It may have been appropriate in those early stages of the litigation to move the Court for summary dismissal (in effect) under the Rice and Asplund principles as commonly applied. There is no suggestion that either party sought to do so.
f)After the proceedings were launched, they almost developed a momentum of their own. Three forensic reports were prepared. No interim variation to the order took place however.
g)As the busy history above reveals, a number of significant and, I think material, changes did occur which have increased at times tensions including at least:-
i)The involvement, in different ways of Mr and Ms L;
ii)The serious allegations of sexual abuse and rape made.
h)It is, of course, impossible to say to what extent the continuing litigation was the catalyst for the events from time to time – or whether the events were a catalyst for the continuing litigation. Certainly the parties positions have almost reversed from what they proposed to the Court in their original Application and Response.
Mr Matthews referred me to the decision of O’Ryan J in Sklovsky and Gastin (2007) FamCA 540 and the analysis made by the his Honour of the principles in Rice and Asplund (supra). Since the completion of this hearing, the Full Court (constituted by Warnick J alone) has delivered what I respectfully view as the most recent and definitive analysis of the rule in Rice and Asplund. The decision is, of course, binding on this Court. Warnick J, in a case reported as SPS and PLS (2008) FAMCAFC 16 delivered 28 February 2008, begins his analysis with the following introduction:-
“The “wife” in the Marriage of Rice and Asplund (1979) FLC 90-725 (at least, in one of its shorter formulations) that, where there has already been a final order in respect of parenting issues, before the Court embarks on a rehearing of those issues, the applicant must establish a significant change of circumstance – is certainly useful, if not essential. But it is not the primary principle in applications for parenting orders. Nor is its utility or weight uniform across cases in which it might be applied. In particular, those attributes vary, according to whether the rule is applied at the onset of or at the end of a hearing.”
Although the decision SPS and PLS (supra) has wide application, for this case I draw from those reasons the following statements:-
·“At whatever stage of a hearing the rule is applied, its application should remain merely a manifestation of the ‘best interests principle’” (paragraph 48(iii)).
·“The nature of the hearing that follows if the Rice and Asplund rule is not applied as a preliminary matter, as described by authority, may well be the wise and practical choice” (paragraph 69).
·“In summary:-
o The rule in Rice and Asplund is generally expressed – as a rule to be applied as a preliminary matter;
o If applied as a preliminary matter it may achieve all its purposes; and
o If applied at the end of a full hearing of parenting issues the rule cannot achieve all its ends, but can achieve some and ought still receive consideration. However, its force may be diminished.”
It is not appropriate in this case to apply the rule of Rice and Asplund (supra) now. That is the reason why these reasons deal now with the competing proposals. However I took the view at the hearing, that no useful purpose is achieved by delving further into events in contest prior to the April 2005 orders – in circumstances where really the events thereafter are the most relevant.
It is a common, I would say, usual practice for the issue of applying Rice and Asplund principles in this Court is dealt with as a preliminary issue “on the papers”. It seems to me that a docket system where the ultimate judicial arbiter deals with the proceedings at the first opportunity enhances a proper application of the rule. It cannot be a proper application of the rule for a person, as sometimes happens, to blandly assert that things may have changed and that if a family report is procured, that person is satisfied they will be correct. To some degree that is what happened in this case, but in my view this is akin to the “tail wagging the dog”.
Equal Shared Parental Responsibility
The changes to the Family Law Act 1975 arising from the legislative amendments under the Family Law (Shared Parental Responsibility) Act 2006 (Cth) do not constitute a change of the circumstances for the purposes of the Rice and Asplund rule, but as Warnick J observed (at paragraph 87):-
“a change in relevant facts may take on a significance because of the legislative amendments that it would not have possessed before them”.
The parent’s agreement to have equal shared parental responsibility triggers the need for the Court to consider, pursuant to s.65DAA(1) whether it is in the best interests of T to spend equal time with the parents and is reasonably practicable.
Often a Court is asked to speculate whether a change to equal time is in the best interests of the child. In this case, where an equal time regime has existed for over two and a half years the Court has the capacity to assess whether the regime has served and will continue to serve T’s best interest. If it does not, then the mother’s proposal would meet the definition of substantial and significant time as defined by s.65DAA(3). The practicability of other care arrangements is not an issue in my view nor is the ability of the parents to facilitate the regime.
Benefit of Having a Meaningful Relationship
T has currently, as acknowledged by the parents and observed by
Ms Lewis, a meaningful relationship with each of her parents. It has been nurtured and supported by both parents – even in circumstances where they are highly critical of each other, any of the proposals would be capable of preserving a meaningful relationship with each of them.
Need to Protect the Child
This primary consideration has relevance in this case. I have already observed and I accept that both parents have involved the child in this dispute – seeking at times (perhaps innocently) to engage the child’s support. Ms Lewis did not suggest over coaching or influence of the child by either parent. I agree. It is reasonable to infer that even though the parents are highly critical and negative of each other, the child has been able to maintain a positive perspective of each parent. In circumstances where the child has been well aware of the conflict (she has been interviewed by report writers on at least three separate occasions) the lack of detectable transference of negative views held by a parent to T suggests the parents have disguised some of their negative views. Alternatively she shows a maturity beyond her years and is capable of seeing some of her parents’ silliness for what it is.
Certainly the remarks made by the child to Ms Lewis in the first report about domestic violence between the father and Ms L are concerning. This also must be seen within the history of the father’s acknowledged physical violence towards the mother – although he asserts provoked by her behaviour. It is not easily explained why Ms L, who on the father’s case, sees the father and the children (when spending the week with him) on regular occasions, was not called as a witness. She should have been. It makes it difficult to determine the issues of domestic violence in the home, which the father denies, as currently exists. The most powerful statement of the potential risk that this relationship between the father and Ms L poses to T now is the mother’s decision not to seek any restraint upon T coming into contact with Ms L.
Although the father had earlier in the proceedings raised doubts about the mother’s mental state, the considered opinion of Dr Wakefield satisfies me that neither parent presents currently as a risk from a psychiatric perspective. Certainly the personality traits identified by Dr Wakefield, which diagnoses I accept, could potentially present a risk if a parent acts or reacts to a stressor in a way consistent with their personality. I think there are controlling elements in the father’s behaviour and somewhat histrionic elements in the mother’s behaviour.
When I consider all these issues I could not say there are no risks in either household – but rather T seems to have an awareness of her parents’ idiosyncrasies and copes with them without to date scarring her emotionally.
Wishes
For the reasons already given I could not give T’s wishes to maintain an equal time regime determinative weight. Certainly she wishes to maintain time and opportunities with both her mother and father. I do not ignore her recorded views however which do support the father’s proposal or the expressions of perhaps more time with the mother, which supports the mother’s proposal.
Relationships
The important and secure attachments T currently enjoys are primarily with her parents. She clearly has a close relationship with her paternal grandparents. She regards Ms L’s children as her “stepsisters” – T being in many ways the “big sister” to them. As she gets older her peers will gain more predominance in her support network. The order I propose to make will given the opportunity for the child to preserve all these important relationships.
Encouragement of Relationships
Again with some degree of surprise considering the volatile history between the parties for most of their relationship and post separation, each parent demonstrated a degree of respect for the role the other parent play in T’s life and the sincere love and affection she receives. In those circumstances I am satisfied that the parents have and will encourage the important relationships identified.
Effect of Change
In this case, this factor looms as the most telling. Put simply, if the net benefit to T of a change as proposed by the mother does not, in my opinion, outweigh the risks or loss of such a change – I should preserve the status quo. Certainly Dr Wakefield opined that no change was justified. In circumstances where he did not have the opportunity to see the child, I would not attach significant weight to that conclusion.
Certainly Ms Lewis says the child will benefit with more time with the mother, during the school week. The mother, quite naturally adopts this view, explaining it simply by saying “because I am her mum – she loves me”.
The father’s work schedule makes him at times less available. T has mentioned her regret about the times the father is at work – but it is a positive role modelling to see a strong work ethic – and in the father at present T sees that.
Ms Lewis says that the child would cope with a 9/5 regime during school times if she knew she was spending more time with the father over the holidays. This view was not further explained in cross examination, but I think Ms Lewis was referring to the child’s view of equality being fair.
The father has supported extra tutoring for T – who is currently only in grade five anyway.
A Court does not lightly act contrary to the views of an experienced family reporter expressed in a reasoned view. However I think where both parents have told the Court that the arrangement has generally worked well – why would a Court change it, for a mere possibility, (and Ms Lewis could not say with certainty), that the changes will provide the stability and support what Ms Lewis says the child should get. I am not critical of Ms Lewis in seeking to identify an optimal regime.
I do feel however that Ms Lewis may not have applied the weight I think should be applied to the evidence of the:-
·Parties communicating better; and
·T’s current regime generally working well.
Capacity and Attitude to Parent
Ms Lewis says that both parents have the capacity to parent. They are quite different people who parent differently – but not in a significantly conflicting manner. The parents core values and principles are similar.
Although the father has engaged a nanny (Ms G) to assist in his household, Ms Lewis had no concerns with the role she played. T’s comments that the nanny is “fat” and “mean” are observations that reflect probably her preference to be minded by her father or mother rather than Ms G. I take some comfort that the father says, and showed; he had learnt some things from Ms Lewis’ first report. He should listen to what Ms Lewis heard and recorded T to say – basically when she is in her father’s home she would like him to be around. This is the pain and balance every hard working parent faces – but I am satisfied that the father is so devoted to his daughter that he is likely to modify his work hours even more than he currently does, taking on board this observation.
Family Violence
The issue arises here in the context of the instability and asserted consequences of the relationship of the father with Ms L and incidents during the parents at times volatile relationship. T is clearly sensitive to yelling, and other aggressive behaviour. Since the parents finally separated she rarely sees their conflict occurring in her presence. Because I am unable to be satisfied, to the requisite standard, that if the father’s relationship with Ms L continues to intensify and they resume cohabitation, aggressive incidents could occur – I make no positive finding in that regard. The father should be again under no illusions that T will both suffer (and report) if incidents of aggressive interaction occur. It makes little difference whether it was provoked by the alleged behaviour of Mr L to making notifications to the Department of Child Safety, or not.
The effect on T is the same. This factor does not persuade me however that an effective co-parenting of T between the parent
Making a Final Order
Provided the parents learn from the behavioural mistakes that they have made, I have a confidence that T will both cope and prosper in the continuance of a shared regime – week about. I think the finalisation of the property proceedings will also assist.
It would be brave however to predict that some incident in the future might not trigger a further application. A lot will depend, I suspect, on whether the parents can support my decision – even (in the mother’s case) where a parent might not agree wholly with that decision.
Conclusion
For the reasons given, I am of the view that a continuance of the week about regime and an equal sharing of school holidays is in the child’s best interests. I will so order. The parents specific issues orders, although drafted differently are not significantly in dispute. I will ask the parties to engage in discussions about the form of the order consistent with these reasons.
I do not at this time support a change of schooling for T. When so much change has been occurring in her life since she began formal schooling, a school acts like a sanctuary. A change of schooling to the private system might be desirable as she approaches or reaches grade eight. The child expressed a wish not to change schools. I am not persuaded that a change of school (and with it her peers) is in the child’s best interests at this time. The parties, who have equal shared parental responsibility – and therefore a joint interest in making this decision, can do so when the child gets older. Now is, in my view, premature.
I can also indicate that my preference is for school holidays to be shared equally. Holidays offer children a different experience with their parents away from the growing pressures of school work and usual school term commitments and activities. Having that opportunity to experience this about four times a year (spread evenly throughout the year) provides a balance for most children, and I think it would also for T. I would not support either parent taking the child out of school for a holiday. I am aware the father has provided the child with some exciting holiday experiences but as she gets older removing her from school to do so is rarely the best option.
Property Issues
The applicant husband seeks an order that divides the pool of assets in the proportions of 70/30 in his favour. The wife contends for a 70/30 division in her favour. The pool, save for “add backs” is largely agreed.
The financial history is neither complicated nor significantly controversial. I have taken the view that dealing with the history within the matrix of the discussion which follows “add backs”, “loans”, “contributions” and (as is commonly called) the “s75(2) factors” is easier for the parties to follow.
Principles
The preferred or usual approach to determining property proceedings under s.79 of the Act was the subject of a succinct summary by the Full Court in Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143) at [39] where the Court said:-
“39. The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions for the parties within the meaning of ss79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s79(4)(e), the matters referred to in s75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere and Lee Steere (1085) FLC 92-626; Ferraro and Ferraro (1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend (1995) FLC 92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEL and DDR (2001) FLC 92-075 and Phillips and Phillips (2002) FLC 9.-104.”
Pool
Both parties, through their Counsel, made written submissions in which they set out their contentions on the pool to be divided at the time of the hearing (Mr Matthews for the husband at paragraph 39;
Mr Carrigan for the wife at paragraph 8.0). An examination of those summaries distil the following disputes which I need to determine:-
a)Value and inclusion of the husband’s Ford 250 vehicle.
b)Whether the F100 utility (and its lease liability) should be included in the pool or not.
c)How to treat the husband’s post separation acquired Lexus motor vehicle.
d)The extent and treatment of any “add backs”.
e)Whether funds (or part of them) received from the husband’s parents Mr and Mrs H should be treated as a debt or as a contribution.
f)Whether the husband’s Visa card debt should be allowed as a current joint liability.
g)How to treat the funds paid from the investment for expert report costs, totalling $13,863 (Ms Lewis $6053; Dr Wakefield $2310; Vincents Accountants $5500).
When reviewing these submissions for the purposes of these reasons, it became apparent that when the husband’s submissions assert that certain items in the pool were “agreed” the written submissions when compared suggest that might not be the case. In such a case, I am bound to rely upon the evidence rather than an uncertain concession. I acknowledge that at the conclusion of the hearing neither Counsel made lengthy oral submissions relying on their well prepared and considered written submissions.
By not adopting the usual practice of the respondent submitting first and the applicant replying, the differences on the pool which I have now identified were not explored by me. I considered whether to delay the delivery of these reasons, pending further submissions, but as I am aware from the trial that the parties have had a substantial sum of monies invested now for over two years, keeping them from their money is likely to be causing them some significant financial stress. Accordingly I have, on the evidence as best I can, determined a “notional pool” in which I make some clear findings about most of the items in dispute – but will allow the parties post delivery of these reasons a short period of time to provide me with further submissions as to the actual constitution of the pool.
Although some of those difference are identified in the following parts of this judgment, I identify at least these matters:-
a)I was not provided, at trial, with a current statement of the balance of the funds invested with the ANZ Bank V2 account and representing the balance of the sale proceeds from the Property S home. The husband submits the account balance is $575,000 – the wife submits the account is $559,000. This issue is easily resolved by production of a current statement from the bank which would include (if the parties agree), accrued interest since the hearing completed in November 2007.
b)There is a slight discrepancy in the valuation of the husband’s business interests - the husband says $145,556 – the wife says $145,753. The aggregate of the values found by the joint expert Mr Thynne in his report filed 13 August 2007 is $145,753 (see paragraph 2.1 of Report). I adopt that figure.
Mr Thynne was not required for cross examination. His report therefore remains unchallenged. The difficulty I have uncovered however, that despite the “apparent” agreement, the bobcat and trailer; the F100 utility and even the F250 motor vehicle are not treated by the parties either in the same way or, in the way
Mr Thynne has dealt with them.
Both parties include the bobcat and trailer and the lease over it in their pools. However, unless there is another bobcat, this piece of equipment is regarded as the property of the husband’s corporate entity [R] Pty Ltd. As a result it is essentially included in the valuation of that business. The business methodology adopted by the expert of determining the value was by the capitalisation of future maintainable earnings approach. It seems at odds to that approach, to include separately the value of these items in the pool. To do so amounts to “double dipping”. Clearly the value of any equipment is considered when determining the net business assets. As Mr Thynne explains, consistent with accepted valuation methodology, the goodwill for the corporate entity is determined by the method set out as paragraphs 3.2, 3.3, 3.4 and 3.5 of his report at Annexure 4, namely by subtracting from the FME valuation, the agreed net business assets.
I note that, at least for the bobcat and F100 utility (which I understand “pulls” the bobcat and trailer), that values are said to be agreed – but that those values are different from the asset values adopted by Mr Thynne at paragraph 2.2(iii) of his report. Mr Thynne does not actually mention the F100 utility in his list. It seems this might arise from an interpretation of an earlier interim/partial property order.
I am concerned that in fact the parties have, not intentionally I suspect, “double dipped”. I note that the F250 utility, acknowledged as owned by the husband, seems to be represented in the value of his business as a “sole trader” at the net value of $6,197 (see paragraph 2.1 and Annexure 6). Perhaps this is the reason the husband does not include the vehicle in his list of assets.
Because of these uncertainties, which I suspect the joint expert Mr Thynne could clarify in a short space of time, I am uncomfortable in determining the final pool. For this reason the pool will be regarded as notional until I receive some further clarification – either by the parties’ agreement, or further evidence from the joint expert.
c)The relative smallness of the superannuation interests persuade me to include the superannuation interests in the one pool (as contended for by the wife), rather than in a separate pool as contended for by the husband. Such an approach is, in my view, permitted notwithstanding the Full Court decision in C & C (2005) FCAFC 429.
Lexis Motor Vehicle
The husband says at paragraph 41 of his trial Affidavit that when he received the partial distribution of $20,000 from the proceeds of sale of the [S] property “I used the sum $50,000 towards the purchase price of $90,000 of a Lexus”. He borrowed $59,513.07. In my view it would be “double dipping” to include in the pool both the interim distribution the husband received of $70,000 and the Lexus motor vehicle. The current value of the vehicle and its debt will therefore be excluded.
Add Backs
Mr Matthews in his detailed written submissions sets out a number of authorities dealing with the increasing vexed question of the principles to be applied when a trial adjudicator exercises discretion to “add back” funds no longer available. Helpfully the Full Court restated recently in a decision reported as Kildea (2007) FamCA 1524 delivered 21 December 2007, a succinct summary of the current law:-
“112.The Full Court has had cause to consider on a number of occasions the question of so called “add backs” and has established guidelines to facilitate consistency in decision making (see for example Chorn and Hopkins (2004) FLC 93-204, Townsend and Townsend (1995) FLC 92-569 and Kowaliw and Kowaliw (1981) FLC 91-092). In Gollings and Scott (2007) FLC 93-319 at paragraph 65 the Full Court said as follows:
In Omacini and Omacini (2005) FLC 93-218; (2005) 33 Fam LR 134 the Full Court identified three clear categories of cases where it was appropriate to notionally add back to the pool assets which were said by the Full Court to “no longer exist”.Those three categories were:
(a)monies spent on legal fees;
(b)monies disbursed by way of premature distribution of matrimonial assets; and,
(c)monies lost by one party either during or after the marriage as a result of a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets or as a result of reckless negligent or wanton behaviours which had the effect of reducing or minimising the value of assets. [our emphasis]”
In this case it should also be highlighted that when separation occurs parties are not expected to go into a form of “animated suspension”. Life goes on. Expenses are reasonably incurred to live or develop continuing business interests. The authorities make one thing clear in my view and that is, adding back is the exception to the rule. The rule being that generally the Court should deal and divide property as it finds it to exist at the date of hearing.
Within this context the issues on “add backs” can be dealt with as follows:-
a)There appears no dispute that the funds of $50,000 each, released on the 30 April 2007, was for legal expense and should be added back (Farnell (1996) FLC 92-681).
b)As already discussed, I propose to add back the sum of $70,000 received by the husband – rather than including the Lexus motor vehicle. The husband says the balance was paid into the business. I accept the husband’s evidence in that regard. Where the business has been valued and included in the pool it might be arguable that the sum of $20,000 be excluded. However if “put into the business” it should be represented as a debt of the business/company (possibly a loan account) and would “reduce” the business value. To be fair, the debt to the business (if that is how the husband says I should treat it) would be an asset. The whole $70,000 shall be included.
c)The wife has otherwise received the following sums:-
At separation
$75,000
Net proceeds of Sahara motor vehicle (paragraph 35(e))
$16,584
Interim distribution
$70,000
Further distribution
$10,000
Proceeds of ride on mower
$6000
$177,584
The wife says, and I accept that apart from these funds, child support and her Centrelink benefits she has had no other source of income, since separation. I accept that to be the case.
It was acknowledged the wife has paid $76,554 in legal expenses. Allowing for the “Hogan order” payment of $50,000, then I infer at least $26,554 of the other available funds were used for legal expenses and should be “added back”. The question then remains, in circumstances where the pool does not include any other accumulated funds in bank accounts etc, how should the Court treat the balance available of approximately $150,000.
The wife says, without any real attempt at corroboration, that it was used for her support and for T including to pay rent from 11 November 2005 (paragraph 36). The wife’s trial Financial Statement asserts that her average weekly Income is $397 and her average weekly expenses were $1648. The wife was not seriously challenged on these estimates. Interestingly, these expenses include over $310 a week claimed for payments on credit cards. The wife claims expenses of rent of $355 (currently for rent) and other personal expenses of $675 for herself.
Between April 2005 and trial in November 2007 – a period of approximately 31 months (134 weeks) the wife as, she says would have spent approximately $1,120 a week on living expenses (4150,000 ÷ 134). Is this reasonable? If it is, it should not be “added back”. By comparison, the husband’s Financial Statement claims personal expenses of $1139 (at Part N) before adding in rent ($420); credit card payments ($177) and storage ($63). Clearly many of the husband’s personal liabilities seem to be met by the business. I say this because he claims his expenses to be a weekly sum of $9,946 but that includes a number of lease payments on equipment. Again at trial this assertion was not really challenged in cross examination.
Doing the best I can, it seems both parties expected to enjoy a reasonable lifestyle. Although the husband may regard the wife having over $1100 a week available as somewhat generous – it is less than he seeks or needs for himself. In the circumstances I do not propose to add back to the pool more than the wife’s legal expense of $76,554.
Funds from Mr and Mrs H
I have carefully considered the submissions of the wife’s Counsel paragraphs at 3.0 to 3.3. The submissions contended that the husband’s parents “have abandoned or otherwise gifted or forgone:-
a)Their half interest in the property at [N];
b)The $67,500.”
The evidence of Mrs H I found reliable, convincing and persuasive. She offered herself for cross examination. I accept that:-
a)An agreement between the husband and his parents was made in 1994 at the time the property at [N] was purchased. Paragraph 25 of the Affidavit of Mrs H establishes this was a joint endeavour – helping their son get into the property market. He was 26 years old at the time. The parties made equal contributions to the mortgage initially.
b)In late 1997 the husband began paying all mortgage instalments. I accept that the parents and the husband agreed that when the property was sold he would repay their contribution. The parents were happy for him to have the profit.
c)The husband and his parents reached an agreement in 1997 (before cohabitation as I find it to be), that their contributions and other loans, were:-
Initial deposit
$25,000
Loan repayments
$12,000
Home improvements
$8000
Property settlement for former wife
$10,000
Deposit on utility purchased in August 1997
$5000
$60,000
I accept that this was the agreement. In essence therefore at the date of the cohabitation, the husband owed his parents $60,000 but was to be regarded as the sole owner of the property at [N].
d)I accept, as the husband’s mother deposes to at paragraph 27 and 29 of her Affidavit that further payments were made by them to the husband totalling $7,500. I accept the husband contributed these funds as he says he did to the parties’ property.
e)The sale of the [N] property was to be effected on 28 July 2000. The parents signed a letter that the husband was to receive the whole of the net proceeds. He did, and they were used for the purchase of Property S.
f)In late 2000/early 2001 the husband was diagnosed with bowel cancer and became very ill. His diagnosis for survival was not overly positive at the time. He was only 32 years old at the time. This was a traumatic time for the family no doubt. In July 2001 solicitors retained by the parents prepared an acknowledgment of debt. I am prepared on balance, to accept that was done in the context of a concern the parties had that:-
i)The husband was possibly terminally ill;
ii)The husband and wife had tensions in their relationship;
iii)The parents wanted their money secured some way.
g)The mother says at about this time the wife made a statement when having a meal at the [S] Hotel about being “silly” not having anything in writing. The wife denies such a conversation. I do not need to find whether the actual conversation took place, but the concerns which I find the parents had were in my view reasonably held.
h)Shortly after the acknowledgement of debt was signed, the husband received a payout under a trauma policy. At paragraph 30 the husband’s mother says although the “loan” was repaid by the husband from the trauma policy the parents decided to “re-lend” the sum of $67,500 because:-
“His family was surviving on centreline benefits and as they had just finished building their home at Property S they had fairly substantial mortgage payments to make.”
In circumstances where the wife:-
·Knew, she says, little of the history prior to co-habitation
·Denies any awareness of an existing loan
·Sees documents prepared in 2001 – many years after the initial contributions
·Regards the “re-lend” and subsequent new acknowledgement of debt now produced as contrived.
I can understand the wife regards with grave suspicion the establishment and liability of this “loan”.
However, on balance I am prepared to accept that the husband came into the relationship with a liability to his parents of $60,000 and that he received a further $7,500 from them during the relationship. He received, and contributed the whole of the net proceeds of sale of the [N] property to Property S. The loan of $60,000 related to benefits received prior to the marriage. I would not regard it as unusual that it was not documented at the time of advance/agreement. I would not regard it as other than prudent to confirm that part of the loan when the husband’s health was poor and the marriage under pressure.
I intend to include $60,000 as a loan of the husband to bring into the pool. He had it at cohabitation and he retains, in my view a liability to his parents. I intend to regard the other payments received by the husband from his parents during the relationship as contributions he has made totalling $9,500 being:-
$5,000
February 1999 (after the birth of T)
$2,500
May 2001 (after marriage)
$2,000
2001 (for a rainwater tank – see paragraph 32).
Visa Card
Considering the husband’s income, and access to company funds since separation, I cannot be satisfied on the evidence that the husband’s Visa card debt is an expense existing at separation now over two years ago. The expense creating this debt are not explained. For the same reasons I do not include into the pool the wife’s credit card liabilities which are set out in her Financial Statement. Similarly, I would exclude the small bank accounts of the parties which come from post separation earnings or (in the wife’s case) funds left over from the distributions.
Expert Fees
The expert fees totalling $13,863 were discharged from the funds available on investment. The parties would have been required to contribute to them. They have done so by the reduction of the balance available in the ANZ account. I would not add the fees paid back into the pool.
Summary of Pool
On the basis of the findings and reservations set out above, I would determine the notional pool of assets and interests available for division as follows:-
Assets
Funds in Trust
$575,000
Husband’s Business Interests
$145,753
Contents
- husband
- wife
$14,120
$7,317
Jet ski (husband)
$15,500
Mazda 6 vehicle (wife)
$20,275
Tax Refund (04/05) – husband
$6,727
Partial Distributions added back
- husband
- wife
$130,000
$76,554
Superannuation
- husband
- wife
$49,800
$1,108
$1,042,154
Liabilities
Loan to Mr & Mrs H
$60,000
Jet ski loan
$13,434
$73,434
Net Notional Pool
$968,720
Contributions
An issue arises as to the date of commencement of the marriage like relationship between the parties. I am satisfied that the parties had formed a “committed relationship” in late 1997 and discussed having a child and then underwent IVF fertility treatment in the hope of conceiving a child. However, with the parties living in different states and not withstanding, I am sure, frequent visits by the husband (then working as an interstate truck driver) to the wife in [A], the cohabitation and mutual financial and emotional support did not fully commence until shortly prior to T’s birth in October 1998. When the wife moved to Queensland to live with the husband, she was accompanied by her son B. When the wife returned to [A] to sort out problems with her business, B remaining living in Brisbane. She says she travelled to Brisbane every second weekend and the husband travelled frequently to Sydney and stayed in [A], often for several days at a time.
Although the mother did not sell her business until November 1999 (when she immediately moved with T to live with the husband at [N], and then marrying in December 1999), I regard the date of cohabitation as being late 1998, shortly before the birth of T.
At the date of cohabitation, I find the parties’ assets and therefore, the source of their initial contributions to be as follows:-
Husband
Because of the findings already made in respect of the loan to the husband from his parents, his financial position was:-
a)Interest in [N] home. There is no evidence of its value at cohabitation however considering it was purchased for $145,000 in 1994 and was sold in July 2000 for $141,000 (after improvements) it is reasonable to infer that the value at sale was about the value at cohabitation. Because of the findings I have made as to the loan from the husband’s parents, I adopt the full value of $141,000 as the husband’s interest. I am aware the husband claims when he sold the property, discharged a mortgage of $13,000. He also had sale expenses and says his net proceeds of sale were $120,000. He claims to have paid off some of the mortgage debt between cohabitation and sale. I accept that the husband’s net interest at cohabitation should be regarded, as he estimates In his case outline, to be $63,000, however as I detail later in these reasons, the husband’s claim of receiving $120,000 from the sale is not accepted – he received more.
b)The husband says his interest in [R] (Qld ) Pty Ltd was its net assets. The company owned a Mack Titon Prime Mover which he says had a value of $262,000 and an equity of $75,000. The wife disputes that equity, saying (at paragraph 2.2(b) of her submissions) that;-
“The business leased a Mack Truck on 7 October 1997 for $234,846. At June 1998 the lease on that truck was for $229,918 and the truck had been depreciated.”
For this submission the wife relies on the Financial Statements for the business (being Annexure “I”) to her trial Affidavit. I accept that the market value of the truck may be higher than its depreciation value at 30 June 1998 shown to be (before the purchase of a Western Star Prime Mover), around $203,680. At 30 June 1999 the debts on the truck appeared to be (allowing for “deferred interest” credits):-
Esanda Loan
$30,891
Esanda Lease
$142,224
$173,115
On the evidence I am prepared to accept that the husband’s business had equity in the truck but it is difficult to be satisfied that it is as high as the husband asserts at $75,000. The husband says (at paragraph 27), that “in mid 2000 I sold my business so that I would not be required to travel as much interstate.” I am unable on the evidence to determine what value the sale of the business brought to the relationship, although the husband says, at paragraph 26 that:-
“On 28 July 2000 I sold the Titon Mack Truck I had owned prior to our cohabitation and received the sum of $135,727.33 into my ANZ Cash Management Account as the net proceeds of sale of the truck. This was used towards the repayment of the mortgage we had taken with the ANZ Bank for the purchase of our land and the construction of the home at Property S. I turned the other truck I had into a tipper and then only just did local work. I used a tax refund cheque received at this time to change the truck into a tipper.”
The husband was not challenged on this evidence, namely that he received $135,727.23 into his ANZ Cash Management Account “as the net proceeds of sale of the truck”. The wife however says these proceeds represented the net proceeds of sale of the [N] home. The date of 28 July 2000 as the date of settlement for [N], is confirmed by Mrs H. The husband said the net proceeds of sale of [N] were approximately $120,000. However, Annexures “G” to the wife’s Affidavit suggest that he loan balances of $22,141.72 (home loan) and $13,692.16 (supplementary loan) were discharged on or about 11 April 2000, prior to settlement of the home. On this issue I have come to the conclusion that the net proceeds of sale for $135,727.33 (see Annexure “H”) represented the proceeds of sale of the [N] home, and not proceeds of sale of the Mack Titon motor vehicle.
The question that then arises is, if the husband did sell his “business” in mid 2000 as he asserts, what evidence is there to confirm he received anything for the equity in the truck and if so, how much.
The husband could have produced to the Court some documents to demonstrate receipt of funds from the sale of the business, if they existed. He did not do so. It is unclear to me also whether the Mack Truck, which he says was sold in mid 2000 was the one purchased only 12 month earlier (see Exhibit 2) but this seems unlikely to have developed any significant equity in just
12 months.
The wife gives a different explanation of the sale of the Mack Titon Truck at paragraph 11, being as follows:-
“the Applicant’s work meant that he was frequently absent from home on overnight trips. In the 1999/2000 year, he sold the old Mack Truck and purchased another newer 1999 model on 22 October 1999 on lease from Esanda for $265,000. The debt to Esanda on the lease was $189,468. He did not retain that truck fro long as it turned out to be a bad buy and he sold it in April 2000 for the same price for which he had purchased it.”
Again the wife was not challenged on this evidence. I also noted the husband says the wife was “doing the books” at this time. Her recollection is likely to be more accurate about this history – which in part is corroborated by Annexure “M”.
I would have thought it was relatively easy for the husband to have been able to clarify the issue of any equity in the second Mack Truck sold (as part of the business or otherwise) in April 2000. He has not satisfied me that his cohabitation equity in the first truck was converted into a larger payment to him as he suggests. At best, and I am prepared to accept, the equity of around $75,000 at the end of 1998 which he brought into the relationship was about he equity on sale 18 months later. The husband’s case was not assisted by the clear conflict in what he says about the source of the deposit of $135,727.33.
c)The husband claims the balance for two [R] Pty Ltd Bank Accounts totalling $47,089. Again, he adopts a cohabitation date of November 1999. Exhibits 3 and 4 confirm balances at that level, at that date. Whilst the cash management account may have had a similar balance 12 months earlier (noting that the statement is number 25), the difficulty with the balance for the working account is that it fluctuates significantly – as one would expect for a trading entity. For example, the account had a balance at 13 October 1999 of $5,669 and at 9 November 1999 of $38,122. This reveals the artificiality of adopting a particular date. I am prepared to accept that the husband’s business had funds in cash management at separation of about $8,000 (see Annexure “I”) and also some balance in the working account at cohabitation (as I find it to be) but not as high as $47,089 as claimed. Even if the date of cohabitation was November 1999, it would be unfair to adopt the level of the business account at $37,084 because of the lack of information of unpaid creditors at that time. I will allow a balance in total of $20,000.
d)The husband claims he was due for a tax refund of $34,507 for the tax year July 1999/June 2000. If that is the case, (and seems confirmed by the Company Tax Return Exhibit 5), any refund arose during the period of cohabitation offset against tax paid through PPS during that period. It is not a sum that the husband may claim credit for as “pre-cohabitation” contribution.
e)I am prepared to accept that the husband had an interest in the Nissan Wagon but this was purchased during the period of cohabitation. He also had furniture. I am prepared to accept the husband’s assertion of any approximate value of his Tower Life Superannuation of $6,000 - $7,000. I would ignore, in the absence of any evidence, that the “ladies diamond dress ring” had a value of $7,430.
In summary I would estimate the husband’s initial financial contributions as:-
House equity
$63,000
Truck equity
$75,000
Bank balances, say
$20,000
Tower Life Superannuation
$6,000
$164,000
I do not ignore the reality that although the husband says he only had equity in the truck – he was operating a business which also provided a source of income to support the family.
Wife
Her initial contributions, although like the husband being contributed during the early part of the relationship, were seemingly conceded by the husband, as follows:-
a)Interest in Property J, [A]. This property was sold in July 2001 for $170,000. There is no reliable evidence of value of the wife’s equity in the property at cohabitation. The husband says, prior to cohabitation (as I have found it to be), he assisted the wife with some mortgage arrears.
The wife claims the net proceeds received by her was a total of $49,866.25 whereas the husband says the amount was $46,211.83. The settlement statement (Annexure “A”) supports two cheques to the wife, one for $43,129.38 and another for $3,082.35 – a total of $46,211.73. Annexure “B” does not support the wife’s assertion, as the deposit for $6,736.37 is a transfer from another account – which I have no information about. The further cheque for $3,082.35 is actually deposited on 11 July 2001.
b)The wife was paying off a BMW motor vehicle which was written off in an accident on 28 August 1999. The husband says he made some lease payments for the wife in the period March to July 1997 totalling $2102. In any event it is agreed that the insurance payment for $11,246.28 was paid into the business account controlled by the husband, and subsequently used towards the purchase of the 4wd Nissan Patrol.
c)In November 1999 the wife’s small business was sold for $16,700 – by way of acquiring the purchasers’ Camry motor vehicle. In essence a swap. Although the parties agree to the gross sale value (represented by the ultimate sale price of the Camry), the husband says (at paragraph 19), that an account for legal expenses relating to a dispute with the wife’s landlord was paid from the proceeds being $4,500. Even though the wife produces evidence of a payment to the Amex account I am prepared to accept the husband’s evidence. I will regard the value of the wife’s business at cohabitation therefore as $12,200 (allowing for the legal account).
d)It is accepted the wife sold her Commonwealth Bank shares in April 2001 for $4,510 and these funds found their way into the pool of joint assets. I also accept the wife had a quantity of furniture. The wife had a HECS debt then (as she still does) of $2,387 which is not brought into account.
In summary, I would estimate the wife’s initial contributions as:-
House equity
$46,211
BMW equity (less payments by husband) approximately
$9,000
Business equity
$12,200
$67,411
On a comparative basis, the initial contributions in this short marriage were approximately 70% to the husband and 30 % to the wife. As directed by cases such as Pierce (1998) FamCA 74 it is also necessary to look at the quality and use of the initial contributions. The husband of course had an earning capacity, although the tax return of the company to 30 June 2000 reveals no taxable income. I regard it as more likely that the husband was earning a reasonable income. Although the husband, at paragraph 28 of his Affidavit, says that he earns significant income from the concreting business “in excess of $200,000 per annum” the level of his income from driving the tipper is unclear though described by the husband as “a reasonably high income”.
During the relationship, until separation finally in August 2005, (and even allowing for a number of shorter separations), the traditional roles were adopted of the husband being the breadwinner and the wife primarily meeting the role of homemaker and parent – save for the period when the husband was diagnosed with cancer in mid 2001. The husband says, quite understandably, he was unable to work for six months and the parties relied upon Centrelink payments.
I do not ignore the efforts the parties made to the improvement of Property S. Nor do I ignore the contributions provided by his parents to the husband, being the additional funds of $7,500 as well as allowing him to have the use of their $60,000 without payment of interest.
I have no difficulty in accepting the husband worked long hours as he says – but of course, when he does so, the wife was bearing more of the responsibility for the care of T and the management of the home. The husband also concedes the wife helped do the bookwork.
Although the husband’s financial contributions to separation were superior to those of the wife, the wife’s non-financial contributions as a homemaker and parent were superior to those of the husband.
I would, apart from the initial contributions, regard the contributions by the parties to final separation as roughly equal. Although the husband paid a reduced level of child support since separation (allowing for expenses paid on the mortgage etc), it must be taken into account that the wife had the use of over $150,000 drawdown or accessed (as earlier dealt with in these reasons) for her support. I would not adjust the contribution based entitlements for the post separation period from one of equality approximately.
I do not regard the “windfall” of the trauma insurance policy payment as either “a windfall” or properly a contribution by the husband. Clearly he was prudent as a self employed person to have such cover. Annexure “L” to the wife’s Affidavit shows policy Number 9xxx held with ING Life Insurance started on 28 July 1999 with an annual premium of $328.80. It is agreed that on 15 August 2001 the husband received $203,807. I accept the wife’s evidence at paragraph 9 that she discussed with the husband taking out such insurance cover. The premiums were effectively paid by the parties during the relationship. The funds were used for joint expenses or for their joint benefit. I would not give either party additional “credit” for the payment received. For completeness, I do not regard it as any additional contribution by the wife that the home was sold for the ultimate price. The wife says she “held out” for a higher price than the husband was prepared to accept. Even if that were the case (which the husband denies), the true value was that agreed to by the parties when they both signed the contract.
It falls for determination how the Court should make allowance for the initial disparity in contributions over the life of this shortish marriage where otherwise the contributions would be equal.
I have come to the view that the appropriate division on a contribution based assessment should be 65% to the husband and 35% to the wife.
Section 75(2) Factors
The wife is nearly ten years older than the husband at age 49. The wife is in good health and says “the only way I will be able to earn an income to support myself is in operating my own business”. She says she has run her own businesses for 30 years. The wife had been employed teaching beauty therapy at the [X] College but that ceased after only eight months. She says she has approached TAFE at two different Institutes for positions without success.
The wife has been more successful in her own business recently commenced and called “[C] Pty Ltd”, invoicing for teaching Beauty Therapy, a sum of $15,359 for just over six months to 2 May 2007. Without a hint of corroboration or details the wife says her costs are 50%. For what expenses is unclear.
With the shared week about arrangement in effect, I would see no reason for the wife not being able to find some remunerative employment or contract work – however, I would accept this level of income would be much lower than the husband currently generates.
The husband, now aged 39, is recommended “avoidance of heavy lifting and repeated bending” that is required of a concreter because of the cervical degeneration and multilevel advanced spondalosis. I accept that these opinions expressed by Dr C support the husband’s claim of “experiencing some problems with my knees and back”. Dr C opines that he is unable to determine with any accuracy the husband’s ability to continue to work as a concreter.
Other uncertainties are identified by the unchallenged evidence of
Dr W (urologist) include:-
a)Risk of urinary infections arising from a congenital condition of bladder exstrophy.
b)Potential affect of post rectal malignancy and treatment of that condition in 2001.
c)Influence and affect of revision conduct surgery (as was required in 1997) and which “are known to have a limited life of approximately 15 years”.
The husband, in his trial Financial Statement says his income is $1384 per week from his business. At Annexure 3 to the report of Mr Thynne, he provides a brief background to the husband’ current business, including the attempts by the husband to engage in local haulage under an assigned Rinker/Readymix contract. The contract may be terminated by either party on three months notice. Certainly the husband shows some business flair and a willingness to take some commercial risks. The concreting business to 30 June 2007 revealed sale of $792,000 and an operating profit after income tax for the year to 30 June 2007 of $131, 135 ($2520 per week).
The husband will take some of his share of the pool in the form of superannuation which of course will not be available for over 15 years. The superannuation component is relatively small in the context of the current pool.
In respect of future child support, it is likely (even though the parents will share the care), that the husband will be assessed to pay some level of child support to the wife and will pay it.
There should be an adjustment to the wife for the s.75(2) factors as set out above. The husband contends that it should be reflected in no more than “a 5% to 10% adjustment in the wife’s favour” (paragraph 58 of submissions). The wife does not say specifically say what the adjustment for these factors should be, save that in seeking a 70/30 total distribution (and submitting that a contribution based assessment to the wife should “not be less than 50/50), this suggests a contention of an adjustment in the region of 20%.
Considering the age of T; the uncertain health prognosis for the husband, yet the superior current income and earning capacity of the husband, I would allow an adjustment in the wife’s favour of 10%.
This computes to, in effect, the wife receiving the first 20% of a net notional pool of $968,720 – or $193,744. In my view the adjustment is a proper one.
Just and Equitable
It follows that from the above analysis, a division as to 55% to the husband and 45% to the wife may create an order which does justice and equity. On the current notional pool, the wife would be entitled to receive property of approximately $435,924 made up as follows:-
Contents
$7,317
Mazda
$20,275
Add back
$76,554
Superannuation
$1,108
$105,254
Payment from Invested Funds
$330,670
$435,924
The husband’s 55% of the notional pool would amount to $532,796 made up as follows:-
Business
$145,753
Contents
$14,120
Jet Ski
$15,500
Tax Refund
$6,727
Add backs
$130,000
Superannuation
$49,800
$361,900
Less Debts
$73,434
$288,466
Payment from Invested Funds
$244,330
$532,796
Subject to the clarification which I have indicated I require from
Mr Thynne (or the parties) on the notional pool, I would regard such a distribution as creating an order which is just and equitable.
I direct the solicitors for the Applicant father to prepare a minute of order reflecting these reasons to be submitted to the solicitors for the mother by Thursday and that the solicitors for the mother do likewise in respect of property aspects of this order.
That the matter be adjourned to 9:30a.m. on 28 March 2008 for pronouncement of the orders and any further submissions.
I certify that the preceding one hundred and twenty-one (121) paragraphs are a true copy of the reasons for judgment of Baumann FM
Associate: L Parke
Date: 17 March 2008
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