HIGGINSON & HIGGINSON
[2013] FamCA 80
FAMILY COURT OF AUSTRALIA
| HIGGINSON & HIGGINSON | [2013] FamCA 80 |
| FAMILY LAW – CHILDREN – Presumption of equal shared parental responsibility – Where parties have difficulty agreeing on time spent with the children for long school holiday period – Assessment of parenting capacity – Where Court is satisfied equal shared parental responsibility is appropriate FAMILY LAW – PROPERTY SETTLEMENT – Contribution of the parties – Where the husband’s initial contribution was higher but subsequent contributions of the wife were more significant than those of the husband – Formulation of asset pool – where the parties have considerable debt - Consideration of factors under s 79 and s 75(2) of the Family Law Act 1975 (Cth) – Contributions favour wife 57.5 percent compared to husband’s 42.5 percent – Health and future earning capacity of the parties where the wife has a far greater earning capacity than the husband – Standard of living considerations – Section 75(2) adjustment of 5 percent in the wife’s favour. |
| Family Law Act 1975 (Cth) ss: 79; 75(2); 81; 60B; 60CA; 60CC; 61DA; 65DAA; 60CG |
| Chorn & Hopkins (2004) FLC 93-204 Stanford v Stanford [2012] HCA 52 |
| APPLICANT: | Mr Higginson |
| RESPONDENT: | Ms Higginson |
| FILE NUMBER: | SYC | 1824 | of | 2011 |
| DATE DELIVERED: | 20 February 2013 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Aldridge J |
| HEARING DATE: | 14, 15, 16 and 31 January 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Gould |
| SOLICITOR FOR THE APPLICANT: | Reid Family Lawyers |
| THE RESPONDENT IN PERSON: | Ms Higginson |
Orders
Parenting Orders
That the following parenting orders are made in relation to E born … March 2003 and J born … July 2005 (“the children”)
That all previous parenting orders are discharged.
That Mr Higginson and Ms Higginson (“the husband and wife”) have equal shared parental responsibility for the children.
That the husband and wife are to equally participate in the making of all major long-term decisions concerning the children including but not limited to where they shall live, which school they will attend, their religion and medical decisions.
That the parent with whom the children are living at the time shall have sole parental responsibility for making day to day decisions concerning the children without reference to the other parent.
That the children live with the wife at all times they are not living with the husband.
That the children live with the husband as follows:
(i)during the school term every second week from 6.00 pm Friday until the commencement of school on Tuesday commencing in the weekend the husband would have the children live with him under the present arrangement;
(ii)for half of each short school holiday period as agreed between the parties and failing agreement for the second half of each short school holiday;
(iii)for half the long school holiday period as agreed between the parties or failing agreement:
(a)commencing with the wife in odd numbered years for the first half of the period between the conclusion of school term until 5.00 pm on 1 January alternating each year thereafter;
(b)with the husband in odd numbered years for second half of the period between the conclusion of school term until 5.00 pm on 1 January alternating each year thereafter;
(c)that change-over occurs at 5.00 pm on the mid-point day between the conclusion of school term and 5.00 pm on 1 January;
(d)following the period in (a)-(c) above, for two week blocks commencing with the wife from 5.00 pm on 1 January to 5.00 pm on 14 January; and
(e)with the husband from 5.00 pm on 15 January to 5.00 pm on 28 January and alternating each year thereafter.
That notwithstanding the above the children shall live with the husband and wife as follows:
(i)with the wife on the Mother’s Day weekend from 5.00 pm Saturday to the commencement of school or 9.00 am on Monday, if the children are not otherwise in her care;
(ii)with the wife from 3.00 pm Christmas Day to 9.00 am 27 December 2013 and each odd numbered year thereafter and from 9.00 am Christmas Eve to 3.00 pm Christmas Day in every even numbered year;
(iii)with the wife from 5.00 pm Easter Thursday to 5.00 pm Easter Saturday in odd numbered years and from 5.00 pm Easter Saturday to 5.00 pm Easter Monday in even numbered years;
(iv)in the event the children are not already living with the wife on their birthdays in accordance with these orders, then the children shall spend time with the wife from 3.30 pm to 7.00 pm. in the event that either child’s birthday falls on a school day or from 9.00 am to 2.00 pm in the event that either child’s birthday falls on a day when the children are not at school.
(v)on the wife’s birthday from 3.30 pm to 7.00 pm in the event the birthday falls on a day the children are not otherwise in her care.
(vi)with the husband on the Father’s Day weekend from 5.00 pm Saturday to the commencement of school or 9.00 am on Monday, if the children are not otherwise in his care;
(ii)with the husband from 9.00 am Christmas Eve to 3.00 pm Christmas Day 2013 in each odd numbered year and from 3.00 pm Christmas Day to 9.00 am on 27 December in every even numbered year;
(iv)with the husband from 5.00 pm Easter Thursday to 5.00 pm Easter Saturday in even numbered years and from 5.00 pm Easter Saturday to 5.00 pm Easter Monday in odd numbered years;
(vii)in the event the children are not already living with the husband on their birthdays in accordance with these orders, then the children shall spend time with the husband from 3.30 pm to 7.00 pm in the event that either child’s birthday falls on a school day or from 9.00 am to 2.00 pm in the event that either child’s birthday falls on a day when the children are not at school.
(viii)on the husband’s birthday from 3.30 pm to 7.00 pm in the event the birthday falls on a day the children are not otherwise in his care.
That for the purpose of facilitating the children living with each party and unless otherwise agreed between the parties:
(i)when changeover occurs at school the parent who has the care of the children shall collect the children from and deliver the children to school; and
(ii)for all other changeovers, the wife shall deliver the children at the commencement of the time to the husband’s residence and the husband shall deliver the children at the conclusion of time to the wife’s residence unless some other location is agreed between the parties.
That each party shall have telephone communication with the children when the children are not in their care at reasonable times. Specifically, the children shall have telephone communication with the parent with whom they are not living each day between 6.30 pm and 7.30 pm and for that purpose:
(i)the parent with whom the children are not living at the time shall initiate the call;
(ii)the parent with whom the children are living shall ensure that the children are available to receive the call and speak to the non-resident parent pursuant to this order;
(iii)the parent with whom the children are living shall ensure that the children have a quiet and private environment in which to speak to the parent with whom they are not living.
That for the purpose of calculating the April school holiday time, the Easter period from 5.00 pm Easter Thursday to 5.00 pm Easter Monday is not to be counted.
That the wife and husband are permitted to travel interstate with the children during periods in which the children are living with them provided that the travelling parent provides the other party with fourteen (14) days written notice (or such other notice period as agreed) of their travel plans including dates and times of travel and contact details for the duration of the trip.
That unless otherwise agreed between the parents in writing, and pursuant to s 65Y(2) of the Family Law Act 1975 the wife and husband are permitted to remove the children from the Commonwealth of Australia to travel overseas for up to twenty eight (28) days per year provided that the travelling parent provides the other parent with thirty (30) days prior written notice (or other such notice period as agreed) of the intended trip, specifying the proposed dates and destination and provides the other parent with fourteen (14) days written notice (or such other notice period as agreed) of the confirmed dates and times of travel, itinerary, return ticketing details and contact details for the children for the duration of the trip.
That interstate and overseas holidays shall be taken with the children during New South Wales gazetted school holiday period unless otherwise agreed in writing between the wife and husband.
That the wife shall retain the passports and birth certificates of the children.
That upon the travelling parent complying with Order 13 above, the non-travelling parent shall release the passport they hold of the child to the travelling parent not less than seven days prior to the notified date of departure and the travelling parent shall return the passport to the non-travelling parent within seven days of returning from any travel with the children in accordance with Order 13.
That the wife and husband shall advise each other of any extra-curricular sporting/recreational activities, birthday parties and school functions in which the children are to be involved. The wife and husband shall ensure, where possible, that the children shall attend such commitments when the children are in their care. In the event a parent is unable to ensure the children’s participation, they will contact the other parent at least 48 hours in advance, to see if they are able to facilitate the children’s attendance.
That the wife and husband shall keep each other informed at all times of their residential address, personal email address and personal contact telephone number and advise the other of any change within 24 hours of such change being made.
That each parent provide such consents and authorises as may be required:
(i)by any school attended by the children to enable both the wife and husband to receive reports, notices and correspondence relating to the children and to permit both parents to attend special events or other school activities involving the children and to speak to the children’s teachers concerning the performance of the children at school; and
(ii)by any hospital, medical practitioner or other health care professional including counsellors, psychologists and/or psychiatrists to enable both the wife and husband to receive information and reports in relation to the children’s health, welfare and treatment.
That, as soon as practicable, each party shall furnish the other party with copies of any school reports, merit cards, awards, medical reports and other written material pertaining to the children’s academic, health and extra-curricular activities of which the other parent does not already have a copy.
That the parties consult with each other and that the written consent of both parties is obtained prior to any non-urgent medical treatment including counselling being provided to the child or children and that each parent is at liberty to contact the treating practitioner and have discussions regarding the consultations, treatment and recommendations.
That the wife and husband will inform the other of any medical treatment the children receive and the treating doctor as soon as practicable after the children have received the treatment and advise of any medication prescribed for the children form time to time and provide the medication and appropriate instructions for its administration at the time of any changeover.
That each parent shall as soon as practicable contact the other parent to advise in the event that either child or both children:
(i)becomes seriously ill;
(ii)is/are hospitalised; or
(iii)is/are involved in an accident, in the circumstances requiring the attention of a medical practitioner or admission to hospital.
That each party is at liberty to obtain all relevant medical records and consult each child’s medical practitioner(s) to obtain any information they require and these orders are sufficient authority for that purpose.
That each party is restrained from denigrating the other parent or a person with whom the other parent has a relationship, in the presence or hearing of the children, or permitting the children to remain in the presence or hearing of any other person denigrating the other parent or person with whom the other parent is in a relationship with and discussing the proceedings or any allegations raised in these proceedings with either of the children or permitting any other person to do so.
That each party is restrained from changing the children’s place of residence outside the Northern Beaches area in Sydney without the written consent of the other party.
That the husband not walk the children to school except on the days when they spend time with him, without the express consent of the wife.
That pursuant to s 62B and s 65DA(2), the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders, and details of who can assist parties to adjust to and comply with an order, are set out in the document entitled Fact Sheet a copy of which is annexed to these orders.
Property Orders
Pursuant to s 79:
(i)the wife shall, within one hundred and twenty (120) days, pay to the husband the sum of $213 778.00;
(ii)the husband and wife shall each retain the motor vehicle in their possession and the husband shall retain the Sport BB equipment in his possession.
(iii)the husband and the wife shall each retain the household contents in the premises in which they presently reside;
(iv)upon the payment referred to in Order 28(i) above being made the husband is to take all necessary steps to:
(a) transfer his interest in W Street, Suburb C, being Folio Identifier …, to the wife;
(b) the wife is to take all reasonable steps to refinance the property and assets remaining with her so as to remove the husband as a borrower and, in any event, to indemnify the husband in respect of any indebtedness or liability he may have with respect to mortgages he has entered into with respect to those properties;
(v)the wife is to take all necessary steps to sell the properties at P Street, Suburb C being Lots … and … in Strata Plan … and, for the avoidance of doubt, G Street, Suburb N being Folio Identifier …;
(vi)the parties are to take all necessary steps to sell the property at A Street, Suburb B, being Folio Identifier …;
That for the purpose of implementing the sales referred to in Order 29 above the parties shall do the following:
(i)the parties shall list the properties for sale by public auction at the earliest possible date at a price to be agreed between the parties and failing such agreement, at a price nominated by the President of the NSW Division of the Australia Property Institute or his/her nominee;
(ii)with such agent as the parties may agree to appoint and failing agreement as to the agent within fourteen (14) days to any such agent nominated by the President of the NSW Division of the Australian Property Institute, (“the agent”), the costs of and incidental to such appointment to be borne equally by the parties as and when same fall due;
(iii)the parties shall each cooperate in every way with the agent including (without limiting the generality of the foregoing):
(a)making the keys available to the agent;
(b)allowing inspection of the properties at all reasonable times requested by the agent;
(c)doing or saying nothing to hinder or prevent a sale being effected;
(d)ensuring that the property including the grounds are in a neat and tidy condition at the time of inspection by the agent and prospective purchasers; and
(e)signing all documents requested by the agents in relation to the listing for sale of the home except contracts or agreements for sale which have not been authorised by the parties’ solicitors.
(iv)the parties shall each execute contracts for sale in the forms prepared by the solicitors having the conduct of the sales at a price agreed upon by the parties or, in the absence of any agreement, at or above the prices nominated by the President of the NSW Division of the Australian Property Institute;
(v)the parties shall do all things and sign all documents necessary to instruct a solicitor or licensed conveyancer within seven (7) days of the date of these Orders to have the primary conduct of the sales on behalf of both parties and failing agreements such solicitor or conveyancer as nominated by the President of the NSW Division of the Australian Property Institute and any costs properly paid to the solicitors will be and form part of the legal costs of sales and be deducted from the proceeds of sale;
(vi)neither party may confer on any agent without the consent of the other party any right any sole or exclusive agency in respect of the properties or to any commission; and
(vii)if the agent shall certify in writing to the parties’ solicitors that it is reasonably necessary for the work specified in a notice of repairs to be carried out to the properties so as to assist in effecting a sale and provided the cost of any such work is less than $500.00 either party may cause such work to be carried out and the costs shall be recoverable by that party from the proceeds of sale.
That the proceeds of sale of the properties referred in orders 29(v) and 29(vi) is to be disbursed as follows:
(i)in payment of usual sale costs;
(ii)in discharge of any mortgages or other encumbrances over the properties;
(iii)in payment of any capital gains tax arising out of the sale of the properties and to enable this to be paid a sum is to be set aside and retained by the wife and then paid when the capital gains tax due and for that purpose the sum to be retained is to be calculated by the wife’s accountants without taking into account CGT Retirement Exemption or SB Roll-Over with any surplus to be distributed in accordance with Order 31(iv); and
(iv)the balance as to 62.5 percent to the wife and 37.5 percent to the husband.
That unless otherwise specified in these orders each party is solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of these orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the bank’s records thereof, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age and working future provides the conditions for payment out of such payment.
That in the event either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these orders, then the Registrar of the Court shall be appointed pursuant to s 106A of the Act to execute such deed, document or instrument in the name of the said defaulting party and to do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
That the husband’s Contravention Application filed on 24 October 2012 is withdrawn, dismissed and is removed from the Court’s list of active cases.
That any application for costs may be made by notifying the other party of the costs order sought, and the basis for any such order together with any evidence to be relied upon within twenty eight (28) days of today and by approaching my associate within thirty five (35) days to arrange the further listing of the matter for a costs hearing.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Higginson & Higginson has been approved by the Chief Justice pursuant to s121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 1824 of 2011
| Mr Higginson |
Applicant
And
| Ms Higginson |
Respondent
REASONS FOR JUDGMENT
Introduction
In these proceedings the applicant, Mr Higginson (“the husband”), seeks orders for an adjustment of property rights under s 79 of the Family Law Act 1975 (Cth) (“the Act”) in relation to the property owned by him and the respondent Ms Higginson (“the wife”). The husband also seeks parenting orders in relation to their two children, E born in March 2003 and J born in July 2005.
There were two further matters before me. The first was a Contravention Application brought by the husband in relation to the failure of any steps being taken to sell a property at G Street, Suburb N (“G Street”) in accordance with orders made by Fowler J on 13 August 2012. The second was an application brought by the husband seeking to restrain the St George Bank Limited (“the bank”), the mortgagee of the property at A Street, Suburb B (“A Street”), from exercising its power of sale. On 7 November 2012 Fowler J granted an interim injunction to that effect up until the first day of the hearing.
On the first day of the hearing the bank offered to consent to a further injunction up until 4.00 pm on 31 July 2013 provided that the monthly instalments on the two loans secured over the property at A Street totalling $4253.59 were paid and that if they were not the bank would be entitled to exercise its right to take possession of the property. The husband indicated that he could not afford to make the repayments and the wife indicated that she could not and would not make those payments. When I indicated that I was not prepared to extend the injunction, counsel for the husband invited me to make the order indicating that, although the husband could not himself make those payments, the husband believed that if the order were made he would be able to secure that payment. In those circumstances the wife did not oppose the order which I made by consent pursuant to the document entitled Short Minute which was marked Exhibit 3.
The Contravention Application did not feature prominently in the hearing it effectively being subsumed by the s 79 application. It was not mentioned further, except in relation to costs, and it was effectively withdrawn. I will make an order accordingly.
Background
The husband was born in 1965 and is currently aged 47 years. He works as a retail shop manager. He resides at A Street, one of the properties owned by the parties.
The wife was born in 1970 and is currently aged 43 years. She is engaged in a business named Business R (“the business”) and resides in another of the properties owned by the parties at W Street, Suburb C (“W Street”).
There are two children of the marriage, E born in March 2003 who is currently aged 9 and her brother J born in July 2005 who is currently aged 7 (who for convenience shall be referred to as “the children”). Both children attend H School.
The parties’ relationship commenced in 1987 and they commenced cohabitation in May 1993. In the middle of June 1991 they acquired A Street. At the time of its acquisition it was owned by Mr D (“the paternal grandfather”), the husband’s father who had inherited it from his mother. It appears from Exhibit 3 that the Public Trust Office valued that property at that time at $195 000.00.
On 26 June 1991 the paternal grandfather executed an agreement which noted, amongst other things, that he was entering into an agreement for the sale of that property to the husband and the wife for the sum of $60 000.00. The husband and the wife borrowed the $60 000.00.
There was some controversy between the parties as to how the difference between the amount of $60 000.00 and the value of the property was dealt with. The husband asserts he had been working for his father part time since the age of thirteen and full time from the age of sixteen and had amassed the sum of $100 000 in savings which were paid in cash to his father at the time of settlement. There were no documents proffered to establish this. The wife says that until the hearing, when the affidavits were produced in relation to this matter, she had never heard of that arrangement and disputed that her husband would have been able to save that amount of money given the wages he was likely to have been earning and given that between 1991 to 2004 when he was working for his father he was receiving $100.00 cash per day.
The paternal grandfather has never sought to assert that he has an interest in the property or that he is owed anything in respect of it. Therefore there was either a payment by the husband as described in his affidavits or there was a gift of that part of the interest by the paternal grandfather to his son and his daughter-in-law. Either way that can be regarded as a financial contribution by the husband.[1]
[1] Kessey & Kessey (1994) FLC 92-495
The husband worked for his father from the age of 13. His father is a licensed tradesman. He worked for his father in the business until 1993. For at least half of that time he was apparently in a partnership with his father in relation to that business. Between 1993 and 2000 the husband conducted a trade business, which he said he started. He borrowed $90 000.00 from his father to purchase the business equipment. The business was sold in 2000 for about $90 000.00 with half paid to his father. This business was also said to be in partnership with his father. There was no evidence of his earnings.
From 1999 to 2004 the husband worked for his father in Suburb Y carrying out trade work and was paid $500.00 per week. The husband then worked in a different trade three days per week earning $32 000.00 per year and is currently employed full time as a manager of Business S earning the sum of $800.00 per week.
The husband also asserts that he gave $20 000.00 to help the wife start up her business and subsequently provided another $70 000.00 financial injection into it. Again there are no documents to support these assertions. The husband does not explain how, given his income, he acquired such sums. For these reasons the evidence does not satisfy me that those payments were made.
After the wife left school she undertook a course at TAFE and became engaged in a business. In 1995 she became self employed and is currently the principal of the business that is owned and operated by M Pty Limited, of which the sole share holder and director is the wife. The business was originally known as Business L changing its name to Business O in 1996, to Business Q in 1999 and in 2004 to its present name. Part of the business is its specific income which has grown slowly. In 2009 the specific income of Business Z was purchased for the sum of $1.1 million. The funds needed for the acquisition of the specific income were borrowed.
According to the last Financial Statement signed by the wife on 28 July 2011 and filed on 3 August 2011 her income was $3967.00 per week. In cross-examination she said she did not know the source of that figure. She said her 2011 and 2012 tax returns had not been prepared. Her income for 2011 was $157 830.00 including $121 023.00 as a fully franked dividend from M Pty Ltd. She said current earnings of the business were $20 000.00 per month from the specific income and $10 000.00, if that, per month from the rest of the business.
The parties acquired A Street in June 1991. It was let for a couple of years until the parties married and it then became the matrimonial home. At that time it was a small fibro cottage. It was substantially renovated. This renovation involved a substantial reconstruction of the dwelling and while that was done the parties lived rent-free in accommodation owned by the husband’s parents. Some $400 000.00 was borrowed to facilitate the reconstruction of the A Street property.
In 2001 the property at G Street, Suburb N was purchased for the sum of $430 000.00. Since that time the property was occupied by the wife’s parents. Her father died in September 2012 and her mother continues to reside there. Throughout that period, rent of $1650.00 per month was paid by the wife’s parents or by her mother solely. There is a dispute as to the other terms on which that property was occupied by the wife’s parents. In these proceedings the wife asserted that her mother had an equitable interest in the property in the sum of $90 000.00. On 13 August 2012 Fowler J ordered that any application by the wife’s parents to become parties to the proceedings so as to enable them to assert such an interest be made by them by 3 September 2012 and ordered the wife to give her parents notice of that order. She did so. No application was ever made by the wife’s parents. The equitable interest is said by the wife to be in their favour. If her parents do not assert such an interest it is difficult for the wife to do so.
In 2002 a company known as F Pty Ltd was incorporated with the parties being the shareholders and directors. It acquired two shops at P Street, Suburb C which have been used ever since as the premises of the wife’s business. F Pty Ltd’s only activity has been the acquisition and holding of these properties.
In 2008 the property at W Street, Suburb C (“W Street”) was purchased and the family moved into that property.
In 2009 further renovations were carried out to the A Street property in order to prepare it for sale. The garage was knocked down, a new kitchen was installed, the house was repainted and timber floors were installed. In order to assist with the sale of the property, the wife purchased some furniture to make the house look more presentable. No offers, reasonable in the opinion of the parties, were received and it was decided to lease the property. It was let until July 2010 when the parties decided to refurbish the house and put it back on the market in September 2010. That did not occur due to the separation of the parties in October 2010.
For a short time following separation, the husband lived in a large motor home in the driveway of the premises at W Street, then resided in a caravan park for a short period, then at Suburb K public venue for a further short period, after which he moved into the A Street property where he still lives.
Each of the above assets is heavily encumbered. The present indebtedness to banks is $3 129 902.00. It is common ground that, except for an eight month period in 1995 following the establishment of the wife’s business, the wife has made all of the mortgage repayments on all of the properties. She has worked 5 to 6 days per week in the business often taking Friday off but usually working Saturdays. She returned to work within three weeks of the birth of each of their children.
Apart from a period of three weeks since the date of separation the children have lived primarily with their mother at the W Street property. The children spend time with their father every second weekend from late on Friday to late on Sunday. Since September 2012 a practice has developed of the husband walking the children to school with the wife from the home at W Street (a distance of some 240 metres).
The parties have agreed that the children should spend equal time with their parents during the school holidays but have not been able to agree as to how that time is to be allocated. This Court was required to determine that issue in respect to the last two school holiday periods.
Parenting orders sought
The husband seeks orders that:
· there be joint shared parental responsibility;
·the children spend equal time with each parent on a week about basis; and
· the long school holidays be divided into two equal blocks.
There are a number of other consequential orders sought by him that did not seem to be in dispute. The wife opposed the three orders set out above seeking to maintain the status quo and that she have sole parental responsibility.
Dr T was appointed as a single expert by the Court and provided a report to the Court on 11 January 2013. He gave evidence and was cross examined.
Principles to be applied
I must apply the relevant provisions of the Family Law Act 1975 (“the Act”) having regard to the objects of the part of the Act dealing with children as set out in s 60B. Section 60CA provides that the Court must regard the best interests of the children as the paramount consideration. I am obliged to consider the matters set out in s 60CC of the Act and I shall deal with those in some detail later in these reasons.
Section 61DA(1) and (4) provides:
(1) When making a parenting order in relation to a child, the court must apply a presumption that it is in the best interests of the child for the child’s parents to have equal shared parental responsibility for the child.
…
(4)The presumption may be rebutted by evidence that satisfies the court that it would not be in the best interests of the child for the child’s parents to have equal shared parental responsibility for the child.
Where the court is proposing to make an order that the child’s parents are to have equal shared parental responsibility section 65DAA requires me to consider the children spending equal time or substantial and significant time with each parent.
Parenting
The children appear to be doing well at school and seem to have an appropriate circle of friends with whom they socialise. On Saturdays they attend Sport U and Sport V which they enjoy, especially E. Whilst there was a dispute as to who enrolled E in Sport U when she was aged six, the practice that developed was that the husband would take her to Sport U, possibly staying for a relatively short time and she would be collected by her grandmother, Ms I, at about 11.30 am.
From the time when E was about ten months old the children were cared for by the husband on a Monday. On Tuesdays and Thursdays E went to kindergarten and J went to a nanny until he was old enough to go to kindergarten, Wednesdays and Saturdays were spent with the maternal grandmother, Fridays with their mother and Sundays with both parents. It was the wife’s evidence, which was not the subject of any significant challenge by the husband, that on many Sundays he did not spend the whole day with the family.
J started pre-school at H School aged three for two days each week. The husband dropped the children at school on most days except Thursday and they were collected after school by him on Monday and Tuesday, by the maternal grandmother on Wednesday and by the wife on Thursday and Friday. Until E was about four years old the husband took her to Sport X lessons on Monday afternoon. Matters have moved less smoothly since separation despite both parties saying to Dr T and to me that they thought they co-operated well in relation to their children.
I find, and Dr T agreed, that there were two significant parenting issues. The first was the lack of co-operation between the husband and the wife and the second was the husband’s insight into the interests and needs of the children. I shall now deal with the significant facts relating to those issues.
When E was aged one she was admitted to hospital for a thumb operation. The husband went away on that week to race in a Sport BB championship. In his affidavit filed on 22 August 2011 he said:
I was competing in state championships and unfortunately could not be there on that occasion. Otherwise I have always made sure I have been there for the children if they are ill. I also make sure I am around for every special event in their life including school functions.
As will be seen shortly that last statement is not entirely correct.
In September 2011 E was presented with a sports award at school as she was the age champion for Sport U. Her mother ordered five tickets for the whole family to attend. As the family was walking to the school for the awards night at about 6.30 pm there was a discussion about the time that the children should spend with their father resulting in the husband walking off, not attending the dinner and hence not being present when E was presented with her sports award.
In October 2011 the husband failed to take E to dance class because he says she told him that she did not want to go. This again occurred in 2012 in relation to the dress rehearsal and final performance in which E was participating. The husband did not take E to the dress rehearsal because, after asking her repeatedly if she wanted to go, she said she did not want to attend. After some intervention from the wife E attended the final performance. The husband said in cross-examination that E says that “Mum forces me to dance I don’t really want to do it”. The wife says, with some force, that ordinarily she would just take the child and not repeatedly ask her if she wanted to go.
Similarly, there was a birthday party to which E was supposed to attend but the husband did not take her. He told Dr T in relation to the party and dancing generally:
[E] didn’t want to go she doesn’t like dancing because there are bitchy girls.
The wife told Dr T that E loved dancing. It seems to me unlikely that a child that has spent a year preparing for a dance performance would not wish to go to it and that she would not wish to go to her friend’s birthday party.
The repeated questioning of E by the husband as to whether she really wanted to go to these events indicated to E that the husband did not wish her to go, that she placated him, wanted to please him and agreed with him. Dr T said:
He has been manipulative by taking what the children say at face value and not acting appropriately as a parent such as organising Christmas functions and birthday parties for them to attend. The children are concerned about the husband and there is a sense of them wanting to care for him. [The husband] hasn’t detected this dynamic.
I agree with Dr T’s observation.
The wife asserts that in February 2011 the children became very badly sun burned when in the care of their father and that she was called to school the following day because E was unwell and distressed. The husband’s response to this was that he had applied the appropriate sun screen and thought E’s condition was the result of stress. The evidence does not enable me to resolve this issue and, as it was an isolated incident, the lack of resolution of this issue does not assist me in this case.
The wife asserts in her affidavit filed 14 October 2011 that on the weekend of 14 August 2011 there was a serious incident when the children were with their father. It appears that J had been running across the road playing “chicken” with cars. The wife asserts that the husband called her and asked her whether he should teach J a lesson either by driving his van slowly into him or by throwing him against the side of the van so he would realise the danger of the activity he was undertaking. The husband denies this and says that he took J aside and tried to talk to him about the dangers involved. I am not prepared to accept the wife’s version of the events as it seems neither likely nor probable to me and whilst I have formed the view that the husband at times lacks insight into his children’s needs I do not think he would deliberately harm them.
In September 2012 the husband commenced walking the children from their home to school some 240 metres away. It was put to the wife in cross-examination that this was because between 11 February 2011 and September 2012 J had been late to school on twenty occasions and E on twenty one occasions and that the husband had decided to walk to school with the children to make sure that they got there on time as their mother was not doing so.
Dr T recorded the husband’s explanation in his report as follows:
Then [the husband] explained that he was concerned when the children were walking on their own to school. It was “240 metres to the gate.” He said that he didn’t want them to walk this so he decided to escort them.
In cross-examination Dr T also recalled the husband telling him that prior to him commencing to walk the children to school they had been late on a number of occasions and that his walking the children to school would reduce the number of late attendances.
As a result of the husband walking the children to school the wife joined them so that all four walked to the school. When cross-examined about this the wife said the responsibility for getting the children up and ready to go to school was hers and that was not dependent upon the husband arriving to walk them to school. There is force in that position. I do accept, however, that the lateness was a factor that influenced the husband in taking this step.
Dr T was not in favour of both parents walking the children to school together because of the pressure it put on the children to please both parents. He felt that the children would be more relaxed with each parent if they saw that parent in blocks, giving them time and space to develop the relationship without feeling any pressure from the other parent. Given the parties communication difficulties, this approach will be beneficial to the children. To give effect to this separation of time spent with each parent, I will make an order restraining the husband from walking the children to school but, recognising that occasions might arise when it is desirable for him to do so or that things may change for the better, will make that restraint subject to the wife’s express consent.
Finally, orders were made on 28 September 2012 that the children spend time with the husband “for the second half of the current school period from 3 to 14 October 2012.” That meant that the children were intending to spend eleven nights with the husband. They only spent ten nights due to the funeral of the wife’s father, after which there was a party or a wake that the wife wanted the children to attend. This is complained of in the husband’s affidavit of 15 October 2012. This, to me, is an example of the lack of insight shown at times by the husband for the needs of his children, as it seemed to me to be quite appropriate and beneficial for their grieving process that the children attend their grandfather’s funeral and the family gathering afterwards. One might have thought that the day might have been made up elsewhere, but this is an indication of a lack of co-operation between the parties despite their protestations to the contrary.
Section 60CC Factors
In deciding the arrangements that will promote the best interests of a particular child, the Court must consider the various matters set out in s 60CC. Section 60CC contains two primary considerations. The first in this matter is that the children have a meaningful relationship with both of their parents (s 60CC(2)(a)). This seems to be an agreed fact in this case and will remain so regardless of the orders that are proposed by either party. The second primary consideration is the need to protect the children from physical or psychological harm or exposed to abuse, neglect or family violence (s 60CC(2)(b)). There were two incidents related in the evidence but, in my view, they were not of a nature that would indicate that there is a risk to the children in this regard. I shall deal with those incidents later in these reasons.
To the extent they are relevant to the particular case, the Court must consider thirteen additional considerations set out in s 60CC(3). Paragraph (m) permits the Court to take into account “any other fact or circumstance that the court thinks is relevant”. This ensures that the infinite variety of children’s circumstances can be addressed. The Court must also consider the extent to which each parent has fulfilled his or her parental responsibilities, and has facilitated the other parent in fulfilling his or her parental responsibilities (s 60CC(4)). In deciding the appropriate parenting order the Court must, to the extent possible and consistent with the child’s best interests, ensure its orders are consistent with any family violence order and do not expose a person to an unacceptable risk of family violence (s 60CG).
By virtue of s 60CA, the Court will determine the weight to be given to the various factors, whether they be primary or additional considerations or considerations identified as issues arising in the particular case but not specifically referred to in the Act. Ultimately, the weight attached to each factor is a matter of discretion.
Section 60CC(3)(a) - any views expressed by the children and any factors (such as the children's maturity or level of understanding) that the Court thinks are relevant to the weight it should give to the children's views
The children are relatively young, especially J. Dr T described him as extremely young, a little overwhelmed and confused by the situation. Dr T formed the impression that he was worried about disappointing his father more than pleasing his mother. In those circumstances little weight should be given to the wishes of J.
E was described as being more mature and more aware of the conflict between the parties than J and is more vocal in her support of her father. She told Dr T she wanted to be with her father and mother “seven, seven”. When asked if that meant week about E appeared confused. Dr T concluded therefore that those statements were not her own. In his report he expressed the view that they were not a reflection of E’s own judgment. He said:
She is somewhat parentified which is from being pressured and questioned perhaps by both parents.
For that reason E’s wishes should, as expressed to Dr T, be tempered. It is clear that both children are doing their best to please their parents and, to a certain extent, are saying what their parents wish to hear.
Section 60CC(3)(b) – the nature of the children’s relationship with each of the parents and other persons
The children have a good relationship with both parents and their maternal grandmother. These relationships seem to be genuinely close and loving. The relationship with the paternal grandparents is a little more difficult to assess. The hostility and antagonism between the wife and her father-in-law in court was palpable. I accept her uncontradicted evidence that prior to separation, the paternal grandparents rarely visited the family and that they did not often go as a family to visit the paternal grandparents. The paternal grandfather agreed that he and his wife had not attended the children’s school for even one school event or function.
The paternal grandfather did, however, attend the school on one occasion. In 2009 the parties had bought a motor home borrowing $160 000.00 from the paternal grandfather. That money was paid into the account of the wife and used the following day to buy the vehicle which was registered in the husband’s name only. In mid-February 2012, at about the time the husband was in the process of selling the motor home to repay his father, the paternal grandfather attended at the school “pick-up and go” zone. This is an area where parents drive in to collect their children from school. As the children were getting in the car he tapped on the passenger side window, smiled at the wife and then passed her a letter. She handed it back and he said “I’m going to take legal action”. He then followed the wife to their home and again handed her the letter. It was a letter of demand from a law firm dated 11 February 2012 seeking recovery of the $160 000.00. It was addressed to the wife solely. Whilst I am not prepared to find that, in the course of that activity, the paternal grandfather said, as asserted by the wife, the words “I am going to destroy you” to her in the presence of the children I have no doubt that her evidence that the paternal grandfather’s actions were indeed aggressive and provocative. When asked about what damage this might have caused to the children and in particular the assertion that he had said that he was going to destroy the mother, his response was to the effect “I didn’t do it there was no damage done.” This was an unfortunate incident to have taken place in front of the children. It is also true that the children seem to have maintained their relationship with him.
On the other hand, it has to be said that the children probably saw more of their paternal grandparents than the wife thinks and that their father, as he said in evidence, did take them to their grandparents regularly when they were in his care. It is also true to say that the children’s visiting with the paternal grandparents has probably occurred more frequently since separation. The children reported a positive relationship with their paternal grandparents to Dr T and he did not see any problems with the children seeing their paternal grandparents. The wife said in cross-examination that she would not try to stop the husband from taking the children to see his parents. I conclude that they have a good relationship with their paternal grandparents, albeit coloured at times by the difficult personal relationship between the wife and the husband’s parents.
At some stage in early 2011 the wife commenced seeing Mr LL. At first the relationship was casual in nature. According to the wife’s evidence in cross-examination the present position is that he stays at W Street when the children are not there and a couple of nights a fortnight when the children are there. The wife emphatically rejected the suggestion that he was her boyfriend. She denied he was living at W Street.
The wife said, particularly at first, that the children did not seem too happy about him being there and that E feels that he takes up too much of the wife’s time. Mr LL was seen by Dr T for the purposes of preparing his report. In that report, having forcefully described his father as “awesome” J then described Mr LL as saying “he’s ok; just ok not awesome.” He also described his paternal grandparents as “awesome”. Dr T said E was not sure about Mr LL and appeared a little reserved and non-committal.
Mr LL told Dr T that the children could not be free and relaxed with him because they feel they may be betraying their father, that he just wants them to be able to relax because they are constantly anxious and on edge and “not allowed to listen to me”.
Dr T noted that the husband seemed very suspicious of Mr LL and that he questions the children about him, putting them under pressure. In cross-examination he said in answer to a question about whether he had the impression that the children had a good relationship with Mr LL, Dr T said:
I formed the view that they were very cautious about him. I think there’s a potential for a good relationship with him but he seems to be in a position where he feels quite disempowered and I think the mother has been quite cautious about how substantial a relationship she has been able to allow to develop there. I think [Mr LL] wants there to be a full and substantial relationship but I think the mother is cautious and I think she’s worried that it could impact on the children until clarification in arrangements have been achieved, I think with the father of the children.
The presence of Mr LL in the life of the wife obviously causes the husband some difficulties. To an extent, those difficulties have been manifested by him questioning the children about Mr LL and generally questioning the children about inappropriate touching to an excessive extent. Having said that there seems to be no evidence that Mr LL is a malign influence on the children. He seems supportive of the wife and apparently ready to develop a fuller relationship with her and the children in a supportive way.
Section 60CC(3)(c) – the extent to which each of the parents have taken the opportunity to participate in decision making about major long term issues in relation to the children and to spend time with and communicate with the children
Generally speaking, each of the parents has participated in making decisions about making major long term issues in relation to the children, has spent time with the children and communicates well with the children. Whilst the time spent with the children and the levels of communication have varied from time to time, it seems true to say that since separation the children have spent more time with their father and he seems to communicate well with them.
Indeed, the issue that arises in relation to the children’s communication with each parent, and in particular with the husband, is that each parent tends to ask too many questions of the children relating to the other party, and the children answer as best they can but in a way, it seems to me, that is coloured by (what the children perceive to be) the attitude of the parent to whom they are giving the answers. Dr T recommended that the parties “be very cautious about quizzing the children …”.
Dr T was concerned that:
Should there be further questioning of the children and possible allegations being made this could destabilise by not allowing the children to maintain a normal relationship with the mother and the mother’s friends.
Section 60CC(3)(d) – the likely effect of any changes to the children’s circumstances
The children appear to be fairly happy and well adjusted in their present circumstances living in W Street with their mother and staying with their father every second weekend. Dr T opined that “should the children continue to reside with the mother and have fortnightly contact with the father I believe that they will continue to develop well”.
The only proposed change in circumstances is a lengthier stay with the husband. Dr T sees that as beneficial to the children.
Section 60CC(3)(e) - the practical difficulty and expense of the children spending time with and communicating with a parent and whether that difficulty or expense will substantially affect the children's right to maintain personal relations and direct contact with both parents on a regular basis
Both parents presently live in close proximity to each other. There is no difficulty with telephone communication between the children and each of the parents. Indeed, on the present arrangement both parents see the children on a daily basis. There is no practical difficulty or expense in the children spending time and communicating with each parent and the order that is proposed by both parents supports the children maintaining a good personal relationship and direct contact with both parents on a regular basis.
Section 60CC(3)(f) - the capacity of each of the children's parents; and any other person (including any grandparent or other relative of the child) to provide for the needs of the child, including emotional and intellectual needs;
The wife has a good earning capacity and, although she will face some difficult financial times in the short term, she will be able to maintain the children well. The husband has a much lower earning capacity – indeed his income is quite low. However, having said that, it was not suggested that he would not be able to maintain the children when they are with him.
On the whole of the evidence I am of the view that the wife understands the emotional and intellectual needs of the children and, whilst she may engage in some inappropriate questioning, she clearly has the best interests of the children at heart and has good emotional insight into their needs.
The husband is in a slightly different position. He still focuses more on the broken relationship between himself and the wife. He has found it very difficult to adjust to there being a new man in the wife’s life which, according to Dr T, he projects onto the children. This has led to him engaging in inappropriate discussions with the children about not being touched by strangers in general, or Mr LL in particular, the person the wife sees regularly.
Dr T sets out in his report details of an event when E was visiting Town CC with her father, during which visit the husband says he was told by E that the ten year old son of the family with whom they were staying tried to have sex with E. Dr T said that it appeared to him that the husband had been quizzing the children on the subject for many months after that event. He records that E told him that her father had wanted to know and for her to tell him if anyone does anything bad to her.
I accept Dr T’s opinion that the husband does not have good insight into the emotional needs of his children and tends to be rather more focused on himself and the wife and Mr LL. He fails to understand when the children are trying to please him and takes their statements at face value. This means that the children have missed out on some significant events. He has also not gone to family events that he should have done. He genuinely wishes to have a supportive role in his children’s lives, he genuinely loves them and wants the best for them, but he is not as well equipped, at present, to care for the children as their mother cares for them.
Section 60CC(3)(i) – the attitude to the children and the responsibility of parenthood demonstrated by each of the children’s parents
Both parents love their children and accept their responsibilities of parenthood, albeit one has slightly greater insight than the other.
Section 60CC(3)(j) & (k) – any family violence or inferences that can be drawn from a family violence order
There are two incidents that need to be discussed. Shortly after the separation the husband held a knife to his chest in the presence of his children and threatened to kill himself. The police were called and the husband was taken to hospital, from where he was later released. The husband said that he did this because he was stressed from the announcement of the separation and under the influence of Xanax, which he had just commenced to take.
Whilst this is no doubt very upsetting for the children, it is not typical of his behaviour and there was no evidence of any similar conduct.
On 8 February 2011, an interim Apprehended Violence Order was made against the husband in relation to the wife and the two children. It seems that the order that was made did not become permanent. The interim order was obtained because the wife said that the husband was following her. That order was discharged. It was not suggested that there is any threat of family violence in relation to the children.
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;
The orders I propose making aim to have the effect that it will be less likely that there will be further proceedings in relation to the children but I am not confident given the history of this matter. However, because the parents will each have a block of time with the children which will lessen the contact between the parents and will also allow the children to feel more comfortable with each of their parents, hopefully reducing the conflict between them over parenting issues.
Section 60CC(3)(g), (h) & (m)
These subsections are not relevant to the current proceedings.
Section 60CC(4)(c) – the extent to which each of the children’s parents has fulfilled the obligation to maintain the children
It seems to me that both parents have, within their capacity and the confines of their respective earning abilities, properly maintained the children. The children are well looked after and have all they need. The disparity in earnings between the wife and the husband means that the vast bulk of this burden has fallen on the wife but I do accept that the husband has spent at least part of his income for utilities and groceries in relation to the children.
Discussion
My first task is to decide whether or not there should be an order for equal shared parental responsibility for the children. As previously mentioned this order is proposed by the husband and opposed by the wife who seeks to have sole parental responsibility.
I have come to the conclusion that there should be an order for equal shared parental responsibility because the evidence before me has not rebutted the presumption provided by s 61DA(1) as previously elucidated. Dr T believed that the children could benefit from a shared parenting arrangement but had some concerns that there was not a sufficiently supportive relationship between them to sustain it. The wife relies upon the instances of poor decision making set out above. These concerns and instances are of not sufficient weight to rebut the presumption pursuant to the section.
In relation to the division of the time between the parents during the last two school holidays the parents have had to come to court to resolve that issue. On the other hand, the parents seem to be able to agree on major issues such as schooling and activities for the children.
Both parents expressed to me the view that they thought they would be able to cooperate with each other more once these proceedings are over and Dr T said in evidence that that gave him comfort. On balance, I am of the opinion that it is in the best interests of the children for both parents to have a significant role in regulating their lives and hope that this order will facilitate that. I find that shared parental responsibility will be beneficial for the children and give a better opportunity for them to maintain a meaningful relationship with both parents.
If the Court is satisfied parents are to have equal shared parental responsibility, it must consider whether the child spending equal time with its parents would be in the best interests of the child, its practicability and if so consider making an order that the child spend equal time with each of the parents. (ss 65DAA(1) The notion of equal time requires no explanation and is decided first. If equal time is not ordered, substantial and significant time must be considered. This concept is defined in ss 65DAA(3) and (4).
Where neither concept delivers an outcome that promotes the child’s best interests, the issue is at large and to be determined in accordance with the children’s best interests.
Consequently, I must now consider, pursuant to s 65DAA, whether the children should spend equal time with each parent. It is not in their interests to do so. I accept Dr T’s view that the husband may attempt to influence the children against their mother and her forming any relationships. I also agree with Dr T that the husband seemed to be quite focussed upon the possibility of the children being abused and that this could lead to a relationship breakdown. I find the wife is a better balanced parent. I am concerned that the husband does not have insight into the children’s needs. For that reason I am not of the view that the husband is ready to have the children on an equal time basis, or that it would be in their interests for such an arrangement to occur. I have also taken into account the fact that the children are still young, that their mother has been their primary carer, and that there is a benefit in a stable life which does not require changing residences weekly.
On the facts of this case it is reasonably practicable for the children to spend equal time for each of the parents. For the reasons I have given it is not in the children’s interests to make such an order and I will not do so.
I must next consider whether the children spending substantial and significant time with each of the parents is in their best interests and, if so, it is reasonably practicable. The answer to both those questions is yes. Dr T expressed the view in his report that a block of time of some four days to be spent with the husband per fortnight was optimal, but he felt that if the Court thought there was a greater degree of cooperation between the parents than he did more days would be better. There are concerns about the degree of co-operation between the parents and concerns about the degree to which they still question the children about each other. I do not find that there is a greater degree of co-operation between the parties than that discussed by Dr T. I am of the opinion that a significant block of time with each parent will be beneficial for the children as noted by Dr T but that the time they spend with their father should be four days per week. This is for the reasons set out in paragraph 86.
The children already spend substantial and significant time with each of their parents and no practical difficulties have arisen from this, given the physical proximity of the parents to each other and to the children’s school. The steps they have arranged for the drop-off and the collection of the children at various times does not seem to have caused any significant difficulties. The order I propose to make, in my view, involves the children spending substantial and significant time with each of the parents within the terms of s 65DAA (3). The order that I will make is that the children reside with their mother and that every fortnight they reside with their father from 6.00 pm Friday to the commencement of school on Tuesday or 9.00 am on non-school days. I note in this regard that the husband will be able to leave work at 3.00 pm on Mondays in order to collect the children from school. I am satisfied that this arrangement is reasonably practicable.
The parties are agreed that the school holidays should be divided equally, but are unable to agree as to the blocks in which the holidays are to be shared. In relation to the shorter holidays week about is appropriate. In relation to the long holidays, it is appropriate that each of the parents have longer than a week with the children and a fortnight each is appropriate with the balance of the holidays to be taken week about and sharing the first period (I have assumed a seven week break as the children are at a private school). There are a number of other orders proposed by the husband which were not disputed by the wife and I shall make those orders. These orders may not result in a precisely half of the long school holiday being spent with each parent in a particular year, but will result in the children spending the same amount of time with each parent over the long school holiday in each two year period.
Property
According to guidelines established through a series of leading decisions, the Court is required to determine the following matters:
·having regard to the breakdown of the marriage, if any, is it just and equitable to consider whether the alteration of the parties interests in their property is just and equitable
·the assets, liabilities and financial resources of the parties to the marriage
·all relevant contributions of each of the parties, within the meaning of paragraphs (a) to (c) of section 79(4) must be identified and weighed against each other
·the matters in paragraphs (d) to (g) of s 79(4), particularly paragraph (e) which takes up by reference the provisions of s 75(2) must be considered and a determination made as to what, if any, alteration should be made to the entitlements of the parties earlier assessed on account of contribution
·an order under s 79 must not be made unless the Court is satisfied that, in all the circumstances, it is just and equitable to make the order.
In the end there was no significant difference between the two balance sheets as to the items that the parties agreed should be included. The major difference was in the value of the shops at P Street. As I have said the husband used a figure of $1 000 000.00 because this is the value the wife ascribed to the property in her affidavit of 14 October 2011. From the bar table the wife stated that the shops were now worth $800 000.00. I have included them in the balance sheet at $1 000 000 because there was some evidence, as opposed to assertion from the bar table, for this figure. I do not need to arrive at a final figure for this asset as I have determined that it should be sold and the net proceeds divided between the parties.
The wife also included in her balance sheet liabilities for income tax, business activities statement relating to F Pty Limited, strata levies in relation to the shops, land tax and “interest refinanced for shortfall in shops”. Unfortunately, the only evidence in relation to these matters arises from the balance sheet handed up in final addresses by the wife. They were not supported by any documents. Proper consideration of them and allowing the husband time to form a view about them would have required an adjournment of the proceedings. I had already refused an adjournment at the request of the wife taking into account a consistent history of the wife failing to comply with procedural and substantial orders, the heavy level of indebtedness of the parties generally and the rapidly diminishing equity in A Street and the risk that the mortgagee might suffer a shortfall. It would not have been in the interests of justice and unfair on the husband, to have allowed the matter to be adjourned. The amounts of money are not inconsequential. They total approximately some $366 000.00. It is not merely a question of the amounts involved, but also a question of the timing of these. It is impossible to deduce from the balance sheet whether the liabilities arose before the separation or after. The lack of evidence about the liabilities precludes them from being taken into account in determining the pool of matrimonial assets.
In this balance sheet the wife included her Westpac Mastercard at $48 000.00. In her Financial Statement of 3 August 2011, the indebtedness was described as $45 500.00. In evidence she said that she had not used that card for months and had entered into a payment arrangement with Westpac to reduce the indebtedness. She said that it had primarily been used for business purposes, particularly paying for advertising but that part of it had been used for the purchase of a fridge and television currently used by the husband. In November 2010 the husband, using a secondary card, withdrew $21 000.00 from this account over the maximum that could be obtained. A few days later he repaid $19 000.00. There have also been family expenses incurred. Given the amount of the debt in 2011 and the evidence that the card was largely used for business expenses, it seems primarily to be a business expense not taken into account in the valuation of the business. The balance was used for family expenses and also for the express benefit of the husband. I find that it is appropriate to take the Mastercard indebtedness into account in the balance sheet in relation to the value of the business.
The wife asserts that her mother has a $90 000.00 equitable interest in the property at G Street. That $90 000.00 is said to be the amount which her parents paid in respect of that property in excess of the agreed rental of $1650.00 per month. The wife relies on a Memorandum of Understanding which is Annexure “G” to her affidavit filed 7 November 2012 which had been read without objection. A copy of this was tendered in the course of the hearing and I rejected it. During the course of the hearing no one averted to annexure “G”. Even if that document was admitted, it would not establish that the wife’s parents had an equitable interest in the property. This would seem to be confirmed by the Residential Tenancy Agreement entered into between the wife and her parents on 28 September 2010 which is annexure “H” to that affidavit. The rights created by that document are not consistent with the interest claimed. As I have said earlier, in the absence of her mother claiming such an interest, it is difficult for the wife to propound it. Annexure “G” states:
Memorandum of Understanding (Agreement)
Between: [The wife]
AND [Mr I]
[Ms I]
PROPERTY: [G Street, Suburb N]
We, [the wife], [Mr I] & [Ms I] acknowledge that $17,000 was paid on 15th January 2003 to [the wife] as a lump sum payment prior to commencing occupation of the property known as [G Street, Suburb N],
It is agreed that from 30th March 2003, [Mr I] & [Ms I] are permitted to reside at [G Street, Suburb N] and remit $1650 per month, payable by 30th of each month.
If at any time [Mr I] or [Ms I] are not able to remit the full agreed amount for any period, it will be accepted due to ongoing repairs and maintenance expenses being covered by [Ms I] and [Mr I].
[Mr I] & [Ms I] agree to assist [the wife] financially wherever possible to remit extra payments, such as superannuation when applicable.
The purpose of this agreement and arrangement is to ensure that [Mr I] and [Ms I] reside in the property until they either die or decide to vacate the premises of their own freewill.
If for some reason the property is required to be sold (for financial reasons), it is agreed that [Mr I] & [Ms I] be reimbursed any amounts remitted which exceed the agreed monthly amount.
Annexure “G” provides that, on the terms set out, the wife’s parents shall reside at the property. It is intended that this continue until they leave or die. If the property is to be sold they are to be reimbursed for amounts they have paid which exceed their monthly payments. It seems they are long term tenants who might from time to time pay more than their rent and receive that balance back only if the house is sold. The terms do not on their face, or by necessary implication, create an interest in the property. In my view the wife’s parents were tenants and not people who provided money to the wife in circumstances where to deny them an interest in the property would be unconscionable. They may have an entitlement to a reimbursement on the sale of the property, but not an interest in the property itself.
Secondly, there is no evidence whatsoever that establishes the sum of $90 000.00 as being the true extent of any interest the mother’s parent’s hold in the property. Whilst the sum of $17 000.00 is referred to in annexure “G”, there is no evidence as to whether or not the amounts paid were in excess of the agreed rental amount. There was no satisfactory evidence about the maternal grandparents’ maintenance of the property. The evidence was not clear as to whether the rent of $1650.00 per month was a market rent at the time the arrangement commenced. There is no doubt that it ceased to become a market rent because the present market rent is in the order of $600.00 per week leading to a loss on the property of $16 231.00 in 2011. I am not satisfied that the wife’s mother has an interest in the property to any extent suggested by the wife, even if I was satisfied there was such an interest.
Finally, it is appropriate that there be some allowance made, as suggested by the wife, for the costs of the sale of the properties that are to be sold. There is no evidence as to this cost but it will arise upon the sale of the properties and its actual amount will be paid in due course.
I do not propose to “add back” the amount that the husband has borrowed from his father for legal fees.[2]
[2] Chorn & Hopkins (2004) FLC 93-204
I will include as a liability of the parties the sum of $26 000.00 which seems to be the amount owing by the parties to the paternal grandfather with respect to the purchase of the motor home. It appears in both parties’ balance sheets.
The parties have a number of other assets. The wife has a current superannuation entitlement of $15 121.34 and the husband has a present superannuation entitlement of $19 860.00. There is no reason why each should not retain those respective entitlements and for them to be included in the general pool of assets.
Both parties included in their balance sheets Sport BB equipment owned by the husband in the sum of $9000.00. The husband will retain that equipment.
The contents in the house at W Street should be retained by the wife.
The house at A Street was sparsely furnished, solely for the purpose of sale. The wife paid for that furniture. The husband has since, as I have described, acquired a fridge and television set. It is appropriate he should retain the benefit of that furniture.
The wife has a Ford motor vehicle valued at approximately $20 000.00 and the husband a Mercedes motor vehicle valued at about $6000.00. It is appropriate that they each retain the vehicles in their possession.
On 25 August 2011 the husband agreed that the wife would be entitled to draw down $50 000.00 from the parties’ home loan with the amount to be characterised at the final hearing. The evidence about what happened to that money consists solely of the wife annexing to her affidavit of 10 August 2012 a copy of the bank statements of the account into which the money was deposited and by her stating in that affidavit that the amounts withdrawn had been applied as indicated in the statements. The amount of $50 000.00 was received into the bank account of M Pty Ltd trading as Business R on 25 August 2011. On 29 August 2011 approximately $8309.00 was paid to St George Bank – presumably in respect of mortgage payments. Thereafter the accounts record payments of what appear to be business expenses, tax payments and living expenses. There was no suggestion by the husband that any of the funds were spent on frivolous items rather, it was suggested that the wife had not established proper use of the money. The evidence is somewhat sparse but sufficient, standing on its own, to demonstrate that the funds were reasonably used. I do not see any reason to treat it otherwise as a liability of the parties.[3] This has the effect of joint property being used for the benefit of the family and represents a contribution by the husband which I take into account.
[3] Townsend & Townsend (1995) FLC 92-569
I received into evidence being Exhibit 14 a statement from H School dated 17 January 2013 addressed to the wife. It shows that as at 31 December 2012 there was an outstanding balance of $12 760.15. When the 2013 fees are taken into account the school fees outstanding as at 17 January 2013 is $32 551.45. The statement notes that for the arrears a monthly repayment plan of $500.00 per month had been agreed. The husband objected to the school fees being included in the balance sheet as that would be a "back door" method of seeking child support from him in circumstances where there is no application before the Court by the wife for child support. The appropriate course is not to include it in the balance sheet since, notwithstanding that it was a joint choice to have sent the children to H School, the husband has never paid the school fees and has never been in a position to do so. The statement was addressed to the wife solely. However, it is appropriate that that liability be taken into account under the provisions of s 75(2) of the Act as the cost of educating the children will have to be borne by the wife and I will do so.[4]
[4] Grantham & Mead [2012] FamCAFC 86 at [59].
I will now deal with capital gains tax on the P Street and G Street properties because I propose to order their sale.[5] The parties, through their accountants, agreed that the capital gains tax on G Street, assuming a sale price of $737 500.00, will be $60,533.00. There was a dispute about whether the current figure for the P Street properties, assuming a sale price of $1 000 000.00, would be $58 086.00 as suggested by the wife’s accountants or nil as suggested by the husband’s. The difference resulted from differing views as to the applicability of “CGT retirement exemption” and “SB roll-over”. The state of the evidence does not enable me to form a view as to which is correct. As I have decided the properties are to be sold, I do not need to do so. I shall order that the appropriate capital gains tax be paid out of the sale proceeds and, as the tax is not immediately payable, order that a sum of money sufficient to pay said tax be set aside by the parties. The appropriate course is to set aside the higher sum, that is, without taking into account any possible deductions due to “CGT retirement exemption” or “SB roll-over”. If such deduction is allowed then the surplus of the funds set aside will be distributed to the parties in the proportions that I have determined.
[5] Rosati & Rosati [1998] FamCA 38
There was a similar dispute in relation to the capital gains tax payable on the specific income of the wife’s business ($12 953.00 as against nothing) for similar reasons. This asset is not to be sold pursuant to the orders I am making.
Finally there was an allegation made by the wife that the husband had disparaged her business to the extent of causing it actual damage and that in particular she had lost a large amount of business. Much of what the wife said appeared to be hearsay and could not be taken into account. However, she did recount at least one occasion where she says, in her presence, and in the presence of her staff, the husband used words to the effect that “you’re going down”. Even if this did occur it is not capable of causing the damage alleged and I do not propose to take that into account.
The balance sheet as at the date of hearing I find to be thus.
BALANCE SHEET
Assets
Joint
Wife
Husband
A Street, Suburb B $900,000 W Street, Suburb C $900,000 P Street, Suburb C $1,000,000 G Street, Suburb N $737,500 Assets
Joint
Wife
Husband
M Pty Ltd t/a Business R $1,115,000 Mercedes motor vehicle $6,000 Ford motor vehicle $20,000 Home contents W Street $10,000 Home Contents A Street $1,500 Sport BB equipment $9,000 Assets $2,811,500 $1,872,500 $15,000 Total assets $4,699,000
Liabilities
Joint
Wife
Husband
A Street, Suburb B
$857,000
W Street, Suburb B
$679,413
P Street, Suburb C and M Pty Ltd
$1,010,420
G Street, Suburb N
$574,069
MasterCard
$48,000
Loan to the paternal grandfather
$26,000
Liabilities
$1,562,413
$1,632,489
Total Liabilities
$3,194,902
Wife’s superannuation
$15,121.00
Husband’s superannuation
$19,860.00
Total superannuation
$34,981.00
Total Assets
$4,733,981
Less Total Liabilities
$3,194,902
Net Assets
$1,539,079
Section 79(2) of the Act
I must first determine whether it is just and equitable that there be an alteration in the property rights of the parties. This must be done by consideration of the relationship, its breakdown, if any, the property held by the parties and the basis on which it was held and used by them. The determination is not to be conflated with the consideration of matters arising under s 79(4). [6]
[6] Stanford v Stanford [2012] HCA 52
In the present case I am satisfied that it is just and equitable to make orders altering the interests of the parties to the marriage to the property held by them. They are no longer living in a marital relationship. The basis on which the ownership of their property and the use of it by reason of them being in a married relationship and living together has ended and it is appropriate that their property interests are altered so as to meet their new needs and circumstances. The parties join in seeking such an order.
Section 79(4)(a), (b), (c) and (d)
Financial Contributions
The husband made a significant financial contribution arising from the acquisition of A Street by the parties. That is his only significant financial contribution. It was some 22 years ago.
The mortgage on that property was paid from rental income for some two years and thereafter the parties started to repay the mortgage from other income. Whilst no express evidence was given as to what the parties were respectively earning at that time, it is clear that within a fairly short time, the wife’s income exceeded her husband’s and did so significantly. Although the husband was in partnership with his father as a tradesman, there is no evidence of his income at that time. He did not suggest that it was substantial. More recently between 1999 and 2004 he was employed by his father for $100.00 per day. When he worked at the retail shop he was earning at first $32 000.00 per year and thereafter some $40 000.00 per year. His contribution to the family expenses seems to have been the payment of utilities and groceries. That means that the acquisition of all of the properties of the parties that had been the subject of borrowing have been funded by the wife and she has paid the majority of the outgoings. The development of her business led directly to the acquisition of the other properties and assets. There was no evidence to suggest that it was the equity in the A Street property that enabled this to take place. It was its reconstruction in the 1990s and the need to borrow to finance the rebuilding that led to its being heavily encumbered. I accept that the husband’s earnings were contributed to the family pool of income.
Since separation the husband’s income has continued as it did before separation. The wife says that her income has been damaged by the decrease of the specific income, the down turn in sales and because of the stress of the separation she has been unable to devote as much time to the business. Nevertheless, it remains the position that since separation the bulk of the expenditure on the family has fallen on the wife.
Apart from buying food for the children when they are with him the husband, since separation, has made no financial contribution to them or to other family liabilities until late in 2012 when he commenced paying $100.00 or $200.00 per week to the St George Bank in respect of the indebtedness over A Street. Thus he has made almost no financial contribution to the property since separation. He has made no child support payments since separation.
Even when taking into account the initial contribution by the husband some twenty two years ago and his agreement to making jointly owned property available to be used as security for borrowings I am of the view that the earnings of the wife over a significant part of that time are such that she has made a significantly greater financial contribution to the property held by the parties than the husband.
Non-financial Contribution
I find that both parties have looked after the properties and maintained them. It appears that the wife did more of the housework than did the husband. The husband and his father did considerable work on A Street when it was being rebuilt and again when it was refurbished.
On the other hand, the wife organised and arranged for the refurbishment of the shops at P Street.
On balance I find that their non-financial contributions were approximately equal.
Contributions to the welfare of the family
Both parents have looked after their children and the family well. The wife has made a greater contribution as a parent and homemaker particularly when the children were younger, notwithstanding that the husband cared for the children one day per week. It is clear that the children have spent more time with their father post separation than they did prior to the separation. The children continue to live primarily with their mother. I find that these contributions slightly favour the wife but not by any significant degree.
Other Matters
The orders that I propose will not have any effect on the earning capacity of the parties. Indeed, I hope they will maintain the wife’s business and enable her to continue to earn, for the benefit of the children, an income similar to the one she presently earns.
In taking these matters into account I believe that the contribution by the parties to the property held by them is 57.5 percent to the wife and 42.5 percent to the husband.
Section 75(2) Factors
Both parties are still of working age and are in good health. They are both in gainful employment, albeit it of different kinds and there is no reason to think that their physical and mental capacity for such employment will not continue in the foreseeable future.
Under the orders that I will make the wife will care for the children for a greater proportion of the time than the husband.
The parties have significant financial commitments. Under the orders that I will make the burden of such financial commitments that remain will fall entirely upon the wife. It has been her income that has supported the family and given them the standard of living that they enjoy. It has been her income that has provided a home for them. I am concerned in this case to ensure that the children have a comfortable home and preferably continue to go to their present school. The only way this can happen, on the evidence before me, is for the wife to continue her employment as a business operator and to retain the benefit of the specific income. The income of the father is quite inadequate for that purpose. In framing the orders that I propose to make for the provision of the parties’ property I have taken this factor into account. I do note in this regard that there is no evidence that the paternal grandfather will either provide such funds or assets to his son as may be needed to ensure the comfortable lifestyle of his grandchildren or, on the other hand, that the husband is in some way entitled to assets held by his parents (whether as a consequence of working for his father for years at a low wage, or otherwise) and that once these proceedings have been finalised he will receive them, or some benefit from them.
The orders that I propose aim to protect the ability of both parties, particularly the wife, to earn an income.
The wife has a present obligation to pay school fees and will continue to pay those fees in the future.
Up to the time of hearing the husband has made no child support payments.
The wife is friends with Mr LL. He sleeps at W Street at least four nights per fortnight. The wife describes him as “just a friend” and would not even accept the description of boyfriend. There was no exploration of Mr LL’s property or income and the likelihood of or any obligation on him contributing to the family. It is therefore not a matter that I can take into account.
In summary then the major factors to be dealt with under s 75(2) are the earning capacity of the parties and the needs of the children. The husband has a significantly inferior earning capacity. The wife will have the children for a greater proportion of time but has a greater earning capacity.
Mr Gould, counsel for the husband submitted that these two factors should be offset and that there should be no adjustment under s 75(2). I disagree. It is essential that the wife’s income is needed for the benefit of the children. It is essential in my opinion for the children’s benefit that the wife retains her business and, in particular, the specific income so as to maintain the standard of living and schooling and general welfare of the two children. In my view an adjustment should be made in favour of the wife of five percent under s 75(2). An appropriate property division therefore is 62.5 percent of the property to the wife and 37.5 percent to the husband.
Form of orders
The husband, in the course of his evidence and in submissions made on his behalf, expressed a desire, if possible, to retain the A Street property for himself. One can see that it has significant sentimental value for him. It is a place in which the children are familiar and happy and where he feels comfortable residing. The equity in that property is small – seemingly less than $50 000.00. The husband suggested in addresses that an appropriate order might be framed to enable him to retain that property even if it were to be burdened by a mortgage. There is no evidence as to what credit would be available to the husband, given his low income. I would not expect it to be substantial. Realistically, I cannot see anyway of framing orders that would enable the husband to retain A Street and it will need to be sold.
The same has to be said for G Street. There is an extant order from this Court for its sale (made by Fowler J on 13 August 2012) which has not been complied with. As I have said, the wife’s mother resides there paying a less than market rent. For understandable reasons the wife does not wish to disturb her mother’s occupancy. The wife has also indicated that consequent upon the sale of the shops she proposed to relocate her business to the garage at G Street, which would need to be refurbished for that purpose. She thought that that was a feasible proposal which would still enable her to carry on her business. It seems to me to be inescapable, to enable a property settlement to occur in these proceedings, that the G Street property be sold and I propose to make that order.
I have considered giving the husband the opportunity to purchase A Street and the wife to purchase G Street. I have decided not to do so because of the lack of evidence about the ability of each party to raise funds within a relatively short period of time, the bank is pressing for payment, to do so would delay for a while the final disposition of the parties property and would require the parties to continue to maintain their financial relationship for longer. I also take into account the wife not complying with the Court’s order for the sale of G Street. I am required to make orders that finally determine the financial relationship between the parties and avoid further proceedings between them. The orders I will make will do that.
As I have said, the shops in which the business is currently carried on are currently for sale. Realistically, that has to occur and the wife gave evidence that she thought she would be able to maintain her business operating from the garage at G Street or by using a shared office facility.
After sale and payment of the costs of sale, mortgages and capital gains tax, the balance is to be disbursed as to 62.5 percent to the wife and 37.5 percent to the husband.
It is necessary to deal with the remaining assets. It is appropriate that each party retain the vehicles in their possession and the household items in the premises in which they reside. Each should retain the benefit of their superannuation. The husband should retain his Sport BB equipment. Orders will be made to reflect this.
I have found that the wife should retain the benefit of her business and the family home. That will therefore mean that there must be a payment to the husband so as to ensure he will receive 37.5 percent of all of the net assets. This means also taking into account the liability on those assets and also the debts to MasterCard and the paternal grandfather. The assets not being sold are:
The assets not being sold:
W Street, Suburb C
$900,000
M Pty Ltd
$1,115,000
Mercedes motor vehicle
$6,000
Ford motor vehicle
$20,000
Home contents (W Street)
$10,000
Home contents (A Street)
$1,500
Sport BB equipment
$9,000
Wife’s superannuation
$15,121
Husband’s superannuation
$19,860
Total
$2,096,481
Liabilities
W Street, Suburb C
$679,413
M Pty Ltd
$675,500
MasterCard
$48,000
The paternal grandfather
$26,000
Total
$1,428,913
Balance
$667,568
I therefore propose to allocate $250 338.00 to the husband (being 37.5% of the net assets not being sold) and $417 230.00 to the wife (being 62.5% of the balance of the assets not being sold). As the husband is retaining assets with a value of $36 560.00 the amount to be paid to him by the wife to achieve this distribution is $213 778.00.
To give effect to that division the orders as set out in this judgment will be made.
Section 79(1)
Taking all of the above matters into account I am satisfied that the orders I propose to make are appropriate, that is to say, just and equitable taking into account the all the matters I have discussed under the headings ss 79(4) and 75(2) of the Act as set out above. The orders meet the obligation under s 81 finally to determine the financial relationship between the parties and avoid further proceedings between them.
I certify that the preceding one hundred and forty-three (143) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 20 February 2013.
Associate:
Date: 20 February 2013
Key Legal Topics
Areas of Law
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Family Law
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Property Law
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