INGLIS & INGLIS
[2011] FMCAfam 367
•21 April 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| INGLIS & INGLIS | [2011] FMCAfam 367 |
| FAMILY LAW – Children – best interests – equal shared parental responsibility – whether father’s time should be in one block – driving with excessive blood alcohol level when children were in the car – “miniscule” Child Support. FAMILY LAW – Property – asset pool – whether motor vehicle should be “added back” – assessing contributions not a precise mathematical exercise – purported loan agreements – no provision for wife to sign – enforcement probably statute barred – whether funds a gift to benefit husband only – whether funds were “payments in kind” – low taxable incomes declared – “traditional roles” – contributions after separation – obligation to make full disclosure – wife has no real work experience or qualifications. |
| Family Law Act 1975 (Cth), ss.60B, 60CA, 60CC, 60CG, 61DA, 62B, 65DAA, 75, 79, 81, 90MC, 90MT Limitation of Actions Act 1958 (Vic), s.5 |
| Aldridge & Keaton (2009) FLC 93-421 C and C [1998] FamCA 143 Carpenter and Lunn (2008) FLC 93-377 Champness & Hanson (2009) FLC 93-407 Chappell & Chappell (2008) FLC 93-382 Re NHC and RCH (2004) FLC 93-204 Clauson & Clauson (1995) FLC 92-595 C v C (2005) FLC 93-220 Ferraro v Ferraro (1993) FLC 92-335 Gollings and Scott (2007) FLC 93-319 Gosper & Gosper (1987) FLC 91-818 Hickey & Hickey (2003) FLC 93-143 Jones v Dunkel (1959) 101 CLR 298 Kessey & Kessey (1994) FLC 92-495 Lee Steere (1985) FLC 91-626 Mallett & Mallett (1984) FLC 91-507, (1984) 156 CLR 605, (1984) 52 ALR 193 M & M [1998] FamCA 42 Milankov and Milankov (2002) FLC 93-095 Mills & Watson [2008] FMCAfam 2 Mulvaney & Lane (2009) FLC 93-404 AJO v GRO (2005) FLC 93-218 OSF and OJK (2004) FLC 93-191 Russell v Russell (1999) FLC 92-877 Stirling & Dobson [2011] FMCAfam 52 Townsend and Townsend (1995) FLC 92-569 Wilde & Wilde [2007] FamCA 1044 |
| Applicant: | MS INGLIS |
| Respondent: | MR INGLIS |
| File Number: | MLC 11571 of 2009 |
| Judgment of: | Roberts FM |
| Hearing dates: | 15, 16 and 17 November 2010 |
| Date of Last Submission: | 17 November 2010 |
| Delivered at: | Launceston |
| Delivered on: | 21 April 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr D. Laidlaw |
| Solicitors for the Applicant: | Defteros Lawyers |
| Counsel for the Respondent: | Mr A. Barbayannis |
| Solicitors for the Respondent: | Maria Barbayannis & Co |
ORDERS
Children
That by consent MR INGLIS (“the husband”) and MS INGLIS (“the wife”) have equal shared parental responsibility for [X] born [in] 2001 and [Y] born [in] 2003 (“the children”).
That the children are to live with the wife.
That the children are to spend time with the husband as follows:
(a)during school terms, from the conclusion of school on Wednesday until the commencement of school on Monday in each alternate week and unless otherwise agreed such is to commence on the first Wednesday of each school term;
(b)from the conclusion of school on the Thursday of the other week in each fortnight until 8:00 pm with such to commence on the second Thursday of each school term unless otherwise agreed;
(c)for half of all school holiday periods by agreement, but failing agreement for the first half in odd numbered years and the second half in even numbered years, with changeover to occur at 12.00 midday on the middle day of each holiday period;
(d)if the children are not otherwise with the husband:
(i)on each of the children’s birthdays and on the husband’s birthday from the conclusion of school until 6:00 pm if such day is a school day and from 10:00 am until 2:00 pm if such day is a non-school day; and
(ii)from 10.00 am until 6.00 pm on Fathers’ Day in each year;
(e)for half of the Greek Easter weekend in each year, being from 5.00 pm on Easter Thursday until 5.00 pm on Easter Saturday in odd numbered years, and from 5.00 pm on Easter Saturday until the commencement of school on Easter Monday (or 10.00 am if a non-school day) in even numbered years;
(f)from 4.00 pm on Christmas Eve until 4.00 pm on Christmas Day in 2010 and in each alternate year thereafter;
(g)from 4.00 pm on Christmas Day until 6.00 pm on Boxing Day in 2011 and in each alternate year thereafter; and
(h)at such other times that may be agreed between the parties.
That the children’s time with the husband is to be suspended as follows:
(a)from 4.00 pm on Christmas Day until 6.00 pm on Boxing Day in 2010 and in each alternate year thereafter;
(b)from 4.00 pm on Christmas Eve until 4.00 pm on Christmas Day in 2011 and in each alternate year thereafter;
(c)from 10.00 am until 6.00 pm on Mothers’ Day in each year; and
(d)for half of the Greek Easter weekend in each year, being from 5.00 pm on Easter Thursday until 5.00 pm on Easter Saturday in odd numbered years, and from 5.00 pm on Easter Saturday until the commencement of school on Easter Monday (or 10.00 am if a non-school day) in even numbered years
That each parent is to ensure that the children attend their school, sporting and extra-curricular activities while they are in the care of that parent.
That when changeover does not occur at school, the husband is to collect the children from the wife’s home at the start of those periods of time that they are to spend with him and return them to her home at the end of such periods.
That the parties are to each keep the other informed of their residential address and mobile and landline telephone numbers at all times and notify the other within 24 hours of any change to either his or her address or telephone number.
That each party is to notify the other as soon as possible of any illness or injury suffered by either of the children and of any medical, dental, hospital or like treatment received by the child and the other party is at liberty to contact the doctor, dentist, hospital or other health professional who has treated either child to make enquiries about the health of the child.
That the parties each have liberty to:
(a)approach and communicate directly with the children’s schools or educational institutions;
(b)obtain copies of school reports, photographs, newsletters, notices, and the like;
(c)attend parent teacher nights, school concerts, prize and special nights, sporting events and any similar school functions that parents would ordinarily be able to attend; and
(d)attend all sporting and extra curricular activities involving either of the children.
That in the event that either parent has a significant or special event (including, but not limited to significant family gatherings, Christenings, weddings) upon being provided with notice of the event, the parties are to do all such acts and things reasonably necessary to ensure that the children are able to attend such event.
That pursuant to sections 65DA(2) and 62B of the Family Law Act 1975 the particulars of the obligations that the preceding Orders create and the particulars of the consequences that may follow if a person contravenes these Orders are set out in Annexure “A” to these Orders and these particulars are included in these Orders.
Property
That within 90 days of the date of these Orders (“the first period”) the wife is to pay to the husband the sum of $100,000 (one hundred thousand dollars) (“the wife’s payment”).
That contemporaneously with the wife’s payment the husband must transfer to the wife all his right, title and interest in the former matrimonial home situate at and known as Property M in Victoria (“the home”) and the wife must discharge the existing mortgage which encumbers the home and refinance the home to exclude any liability on the part of the husband.
That in the event that the wife is unwilling or unable to make the wife’s payment within the first period or the wife has otherwise notified the husband or his solicitors in writing that she is unable or unwilling to make the wife’s payment then the husband is to pay to the wife the sum of $312,000 (three hundred and twelve thousand dollars) (“the husband’s payment”) within a further 60 days from the date of the notification or the end of the first period whichever shall first occur (“the second period”) and contemporaneously with the husband’s payment the wife must transfer to the husband all her right, title and interest in the home and that the husband must discharge the existing mortgage which encumbers the home and refinance the home to exclude any liability on the part of the wife.
That in the event that husband is unwilling or unable to make the husband’s payment by the end of the second period then the parties must forthwith engage a real estate agent to be agreed between the parties but failing agreement as nominated by the president of Real Estate Institute of Victoria (“the agent”) to sell the home at public auction or on such terms and conditions as may be agreed between the parties in consultation with the agent and in default of agreement as directed by the agent.
That the net proceeds of the sale of the home are to be applied as follows:
(a)firstly to pay all costs, commissions and expenses of the sale;
(b)secondly to discharge any mortgage and any other encumbrances affecting the home;
(c)thirdly to pay to the wife from the resulting balance (“the balance sum”) a sum equivalent to 67.5% (sixty-seven and a half per cent) of the total asset pool; and
(d)fourthly to pay the balance to the husband.
That for the purposes of Order No. 16 hereof “the total asset pool” shall be the total of the balance sum plus a further sum of $51,000 (fifty-one thousand dollars);
That pending the transfer of the home to either the wife or the husband or its sale pursuant to these Orders;
(a)the Wife has the sole right to occupy the former matrimonial home and during such occupation she must pay all instalments pursuant to the mortgage and all rates and similar outgoings in relation to the home as they fall due;
(b)the parties hold their respective interests in the home upon trust pursuant to these orders; and
(c)neither party shall encumber the home without the consent in writing of the other party.
That unless otherwise specified in these Orders and except for the purposes of enforcing the payment of any money due under these or any subsequent Orders:
(a)each party to be solely entitled to the exclusion of the other to all property (including choses-in-action and superannuation entitlements) in the possession of such party as at this date;
(b)any monies standing to the credit of the parties in any bank account in their name is to remain the property of that party;
(c)any insurance policies to become the sole property of the owner named therein;
(d)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled to pursuant to these Orders; and
(e)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
That the parties have liberty to apply in relation to the implementation of the property orders made today.
IT IS NOTED that publication of this judgment under the pseudonym Inglis & Inglis is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLC 11571 of 2009
| MS INGLIS |
Applicant
And
| MR INGLIS |
Respondent
REASONS FOR JUDGMENT
The litigation
The applicant is MS INGLIS (“the wife”) and the respondent is
MR INGLIS (“the husband”).
The wife filed her application seeking both parenting and property orders on 24 December 2009 and the husband filed his response on
2 February 2010. On 16 February 2010 Federal Magistrate O’Sullivan made pre-trial orders and directions, which included an order for the preparation of a Family Report. He also made interim orders by consent as follows:
1. The children of the relationship [X] (born [in] 2001) and [Y] (born [in] 2003) shall live with the Wife.
2. The children shall spend time with the Husband as follows:
(a) from 3:30pm or the conclusion of school on Wednesday to 8:30am or the commencement of school on Thursday every week;
(b) every second weekend from 3 :30pm or the conclusion of school on Friday to 8 :30am or the commencement of school on Monday commencing 19 February 2010;
(c) for one half of each school holiday period as agreed and in default of agreement, the first half; and
(d) from 10:00am on Father's Day to 8:30am the following day (if Father’s Day falls on a non-contact weekend).
3. The Husband's time is suspended from 10:00am on Mother’s Day to 8:30am the following day (in the event that Mother’s Day falls on a contact weekend).
4. Any changeover not taking place at the children's school shall take place at the carpark at the shops at [omitted].
5. Each party is restrained from denigrating the other in the presence of the children.
6. Each party must take all reasonable steps to prevent any other person from denigrating the other party in the presence of the children.
7. Each party has liberty to attend school functions usually attended by parents.
8. Each party must immediately inform the other of any medical issues affecting the children which require professional treatment.
9. The Wife shall have the exclusive right to occupy the former matrimonial home at Property M (the “Matrimonial Home”)
10. Within 21 days, the parties must appoint a single expert valuer to provide a sworn valuation of the Matrimonial Home. If the parties cannot agree as to the valuer, the valuer shall be appointed by the President of the Real Estate Institute of Victoria. The cost of the valuation shall be borne equally between the parties.
11. The parties will permit the children to telephone the other party at any reasonable time they express a wish to do so, all such calls are to be made from the mobile phone of Anthansios.
12. All interim applications are otherwise dismissed.
Ms. D (“the court expert”) provided a Family Report on 14 August 2010.
The parties’ competing applications in relation to both parenting and property issues were heard by me on 15, 16 and 17 November 2010.[1] Their proposals at the start of the hearing do not need to be recorded here because they both had different proposals by the end of the hearing.
[1] I shall refer to those dates as Day 1, Day 2 and Day 3 respectively.
I am pleased to say that issues in relation to parenting issues narrowed quite considerably by the start of Day 2. At that time, the father’s counsel informed me that “subsequent to the evidence of the family consultant [his] client has considered the matter overnight and it [was] his position that he would consent to a five night per fortnight regime being in one block from Wednesday through to Monday morning - the conclusion of school Wednesday to Monday morning and for a dinner in the alternate week on a Thursday.”[2] However, the matter did not resolve at that time.
[2] Transcript, Day 1 at page 25
At the end of the hearing, the husband’s counsel provided me with a document setting out the orders that his client was seeking. The parenting orders sought were as follows:
1. The parties retain equal shared parental responsibility for the children …
2. The children live with the husband as follows:
2.1 During school term, from the conclusion of school on Wednesday until the commencement of school on Monday in each alternate week commencing on the first Wednesday of each school term and each alternate week thereafter;
2.2 From the conclusion of school on Thursday until 8:00 pm in each alternate week commencing on the second Thursday of each school term and each alternate Thursday thereafter.
2.3 For half of all school holiday periods by agreement, and failing agreement the first half in odd numbered years and the second half in even numbered years, with changeover to occur at 12 noon on the middle day of each holiday period;
2.4 On each of the children's birthdays and on the husband's birthday from the conclusion of school until 6:00 pm if a school day and from 10:00 am until 2:00 pm if a non-school day, in the event that the children would not otherwise be living with the Husband.
2.5 From 10 am until 6pm on Father's Day in each year;
2.6 For half of the Greek Easter weekend in each year, being from 5 pm Easter Thursday until 5 pm Easter Saturday in odd numbered years and from 5 pm Easter Saturday until the commencement of school or 10 am (if a non school day) on Easter Monday in even numbered years;
2.7 From 4 pm Christmas Eve until 4 pm Christmas Day in 2010 and in each alternate year thereafter;
2.8 From 4 pm Christmas Day until 6 pm Boxing Day in 2011 and in each alternate year thereafter;
2.9 At such other times that may be agreed between the parties.
3. The children live with the wife at all other times and that the children's time with the husband be suspended as follows:
3.1 From 4 pm Christmas Day until 6 pm Boxing Day in 2010 and in each alternate year thereafter;
3.2 From 4 pm Christmas Eve until 4 pm Christmas Day in 2011 and in each alternate year thereafter;
3.3 From 10 am until 6 pm on Mother's Day in each year.
4. When changeover does not occur at school, the husband collect the children at the commencement of periods of time that they are to live with him from the wife's home and the wife collect the children at the conclusion of such periods from the husband's home.
4A. Each parent will ensure that the children attend their school, sporting and extra-curricular activities whilst they are in their respective care.
5. The parties keep each other informed of their residential address and telephone numbers (both mobile and landline) at all times and notify the other within 24 hours of any change to either their address or telephone numbers.
6. Each party shall notify the other as soon as possible of any illness or injury suffered by the children and any medical, dental, hospital or like treatment received by the children which occurred whilst the children were in the care of that party and the other party shall be at liberty to contact the doctor, dentist, hospital or other medical professional or like person who treated the children to make enquiries about the health of the children.
7. The parties are each at liberty to approach and communicate directly with the children's schools or educational institutions attended by the children and are further at liberty to obtain copies of school reports, photographs, newsletters, notices, and the like and further each party shall be at liberty to attend parent teacher nights, school concerts, prize and special nights, sporting events and like school functions that parents would ordinarily be able to attend.
8. Each party is at liberty to attend all sporting and extra curricular activities involving the children.
9. In the event that either parent has a significant or special event such as a family gathering, christening, wedding, or other special event, upon being provided with notice of the event, the parties will do all such acts and things that may be practical to ensure that the children are able to attend the nominated event.
10. Pursuant to S65DA(2) and S62B, the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders are set out in the Fact Sheet annexed hereto and these particulars are included in these orders.
In starting his closing submissions, the wife’s counsel said that what I have to decide had boiled down to “reasonably straightforward matters” and added:
In relation to the children obviously it is an issue as to whether there ought to be a continuation of the current arrangements or a change to a block period, and if a block period whether there ought to be some additional time. Apart from that it is pretty well agreed in relation to a sharing of most of the other significant matters for the family. [3]
[3] Transcript, Day 3 at pages 157 and 158
He also added Orders 5 to 10 as sought by the father were not contentious.
In relation to property orders, the parties agree that the wife should have first option to make a payment to the husband in return for a transfer to her of the former matrimonial home at Property M in Victoria (“the home”), but if she cannot pay the required sum, then the husband will have the option to pay her a sum of money in return for a transfer of the home to him. However, if he does not do that, then the home must be sold.
Having said that, the parties are a long way apart in relation to the sums of money that each would be required to pay. The wife is seeking a division of property (including superannuation) on the basis of 70% to herself and 30% to the husband. The husband is seeking a division (excluding superannuation) of 60% to himself and 40% to the wife.
The parties generally agree upon what should be included in the asset pool and upon values, save that they cannot agree about whether a Valiant motor vehicle should be included in the asset pool. I will say more about that below
Brief Background
The husband and the wife are aged 36 years and 38 respectively.
They commenced their relationship when they started dating in 1999. They were married in early 2001.
They have two sons aged 9 years and 7 years. They are affectionately called “[X]” and “[Y]” by the parties, so I shall use those names in these Reasons.
Shortly before the parties were married they purchased the home for $225,000. They borrowed $150,000 which was secured by way of a mortgage loan from the Commonwealth Bank. However, the purchase was made possible because the husband’s parents paid the deposit of $75,000 in addition to paying the stamp duty and legal costs. At about that time, the wife’s parents also contributed $20,000.
The wife was working as a [omitted] at the time of the parties’ marriage. However, she ceased employment early in the marriage. Throughout the whole of their relationship the husband worked for his family’s business which [omitted] (“the business”). He continues to work in the business for his family. It is run by a company. His father is the only shareholder and is a director and secretary. The husband is also a director of that company, but he is not a shareholder.
The parties lived in the home from the time of marriage until their final separation. The wife and the children continue to live in the home.
The parties’ marriage had deteriorated significantly in or about 2009, and in April of that year the husband took and retained a Toyota LandCruiser, which had previously been driven by the wife. It has not been returned to her.
In August 2009 the husband stopped paying the wife any housekeeping money. He had previously been giving her $300 per week.
Their final separation occurred in December 2009 when an Intervention Order was made against the husband (“the intervention order’). It prevented him from going to, or remaining within 200 metres of the home. The husband consented to the making of that intervention order without admitting the facts set out in the application. The intervention order was due to expire on 9 December 2010.
The evidence
The parties relied upon two affidavits each, and the husband’s mother had also filed an affidavit. In addition, the court expert’s Family Report was received into evidence.
The parties, the husband’s mother and the court expert all gave oral evidence as follows:
Day 1 The court expert and the wife Day 2 The wife and the husband Day 3 The husband and his mother
Credit
Before addressing the particular issues that I must decide, it is my view that I should make some comments about the credibility of the parties and the husband’s mother.
I find that the wife generally gave her evidence honestly. However, it is clear that she was not involved in many of the financial decisions that were made so she is unable to give accurate evidence about those matters. For example, she said on more than one occasion that she had no idea about some financial matters within the family.[4]
[4] See Transcript, Day 2 at pages 44 and 45
On the other hand, I gained the distinct impression that at times the husband was tailoring his evidence to suit his case. Some examples are:
·Early in his evidence the husband had said that he was the “managing director” of his father’s company[5] but later said that he did not know whether the business had money to spend.[6]
·In his first affidavit he had admitted that the Valiant motor vehicle had been purchased for $7,000.[7] However, when he was cross-examined about that purchase, he initially stated that he had purchased it for $5,500. When he was referred to the relevant paragraph of his affidavit, he sought to correct what he had said by including the costs of getting the vehicle roadworthy and on the road.[8]
·In relation to how he lost his driver’s licence, the father said that he had consumed only one double scotch while his children were having a pizza, and that when he was stopped by the police approximately half an hour later his breathalyser reading was 0.12. However, I am satisfied that it would have taken a lot more alcohol than one double scotch to get his blood alcohol to a level as high as 0.12.[9]
·During cross-examination by the wife’s counsel the husband said that his mother had asked the wife to sign loan agreements “many times” but “she never did”.[10] A few questions later, when it was put to him that he had only just said that his mother had asked the wife to sign the agreement he said: No, I said my mum told her about the agreements that had been drawn up and asked her would she like to come and sign. She said, ‘No.’. At that point I told the husband that that I clearly heard him say that his “mother asked her many times to sign it and she never did”. He then agreed that he had in fact said that. However, when he was asked by the wife’s counsel only two questions later how many times his mother had asked the wife to sign, his response was “Well, about twice”.[11]
[5] Transcript, Day 2 at page 61
[6] Transcript, Day 2 at page 94
[7] Paragraph 46
[8] Transcript, Day 2 at page 67
[9] I will comment further about that incident below, because the children were in his car at the time.
[10] The loan agreements are exhibited at Annexure “B” to the husband’s first affidavit.
[11] Transcript, Day 2 at pages 95 and 96
I also note that on occasions, it would have been relatively simple for the husband to provide documents to support his claims but he failed to do so. For example:
·Only one of his payslips (dated 28 September 2000) was produced to the Court, yet he said that he was provided with weekly payslips. Further, he is a director of the company that runs the business, so he could have produced the company records of his remuneration even if he had lost all his payslips. He did not do that.
·He said that that he had “sold” the Valiant to his sister for $4,000 in return for her paying off debts for him on her credit. However, he did not produce any of those credit card payment slips, nor did his sister give any evidence to corroborate his evidence.
I am of the opinion that I can draw inferences that, because the husband did not produce the documents referred to in the preceding paragraph, those documents would not have assisted his case.[12]
[12] See Jones v Dunkel (1959) 101 CLR 298
The husband’s mother was generally an unsatisfactory witness, partly because she very often interrupted the Greek interpreter (who had been specially organised to assist her) and answered questions in English. However, she was mainly an unsatisfactory witness because she was also tailoring her evidence to suit her son’s case. For example, when she was asked how many times she had asked the wife to sign the loan agreements, her initial response was “a hundred times”. However, when she was immediately queried about that, she said that she did not remember and blamed her solicitor for making a mistake.[13] (I presume that the “mistake” was that in both loan agreements the only borrower is the husband, and the only lender is his father.) I shall comment further about those loan agreements below.
[13] Transcript, Day 3 at page 133
I also note that when the husband was asked who made the decisions to vary his level of pay from time to time, his answer was: “My mother”.[14] However, when his mother was asked about that she said that decisions about her son’s pay were made by “the managing director and secretary”. Questioned further, she revealed that the secretary was a lady working in the office at the [business] and the managing director was the husband’s father (i.e. her own husband).[15]
[14] Transcript, Day 2 at page 91
[15] Transcript, Day 3 at page 122
Because I conclude that the husband and his mother were tailoring their evidence to suit what they thought would be better for the husband’s case, I cannot help but conclude that, in the absence of other corroborating evidence, the wife’s evidence is generally to be preferred where there is a conflict in the evidence.
Legal principles – parenting orders
Proceedings for parenting orders are governed by the provisions of Part VII of the Family Law Act1975 (“the Act”). Section 60CA provides that the court must consider the best interests of the child as the paramount consideration.
Section 60B sets out the objects of Part VII of the Act and the principles which underlie those objects. It provides:
60B(1) The objects of this Part are to ensure that the best interests of children are met by:
(a) ensuring that children have the benefit of both of their parents having a meaningful involvement in their lives, to the maximum extent consistent with the best interests of the child; and
(b) protecting children from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence; and
(c) ensuring that children receive adequate and proper parenting to help them achieve their full potential; and
(d) ensuring that parents fulfil their duties, and meet their responsibilities, concerning the care, welfare and development of their children.
60B(2) The principles underlying these objects are that (except when it is or would be contrary to a child's best interests):
(a) children have the right to know and be cared for by both their parents, regardless of whether their parents are married, separated, have never married or have never lived together; and
(b) children have a right to spend time on a regular basis with, and communicate on a regular basis with, both their parents and other people significant to their care, welfare and development (such as grandparents and other relatives); and
(c) parents jointly share duties and responsibilities concerning the care, welfare and development of their children; and
(d) parents should agree about the future parenting of their children; and
(e) children have a right to enjoy their culture (including the right to enjoy that culture with other people who share that culture).
In determining what is in a child’s best interests I must consider the matters set out in section 60CC. It refers to “primary considerations” and “additional considerations”.
There are two “primary considerations”. The first is the benefit to the child of having a meaningful relationship with both parents, and the second is the need to protect the child from physical or psychological harm from being subjected to or exposed to abuse, neglect or family violence.
The court must also take into account those of the “additional considerations” set out in section 60CC(3) that are relevant.
There has been some debate about whether the “primary considerations” should be given more weight than the “additional considerations”. That debate may continue from time to time. However, it is my view that each consideration, whether “primary” or “additional”, should be given the weight it deserves in the light of the facts of the particular case. Indeed, I am fortified in that view by the judgment of May and Thackray JJ in Mulvaney & Lane,[16] in which their Honours said:
76. It is important to recognise that the miscellany of “considerations” contained in ss 60CC(2) and (3) is no more than a means to an end. Self evidently, they are only matters to be considered. Of course, we accept they are of great importance, being the factors identified by Parliament as those the Court must take into account (when they are relevant). However, they must be applied in a manner consistent with the overarching imperative of securing the outcome most likely to promote the child’s best interests.
77. It needs also to be remembered that the importance of each s 60CC factor will vary from case to case. Whilst the list of considerations is lengthy, no list could ever encompass all the matters that experience demonstrates could be of relevance. This is no doubt why Parliament has included the catchall consideration in s 60CC(3)(m), namely “any other fact or circumstance that the court thinks is relevant”. By this device, judicial officers may consider any matter which (within the reasonable range of discretion) could touch on the child’s best interests.
[16] (2009) FLC 93-404. Also see Aldridge & Keaton (2009) FLC 93-421 and Champness & Hanson (2009) FLC 93-407
Section 60CC(4) provides that the court must also consider the extent to which each parent has fulfilled his/her parenting responsibilities and has facilitated the other parent in fulfilling his/her parental responsibilities:
Section 60CG provides that the court must, to the extent that it is consistent with the child’s best interests being paramount, also ensure that any order that is made is consistent with any family violence order and does not expose a person to an unacceptable risk of family violence.
Section 61DA provides a presumption that it is in the best interests of the children for their parents to have “equal shared parental responsibility” unless there are reasonable grounds to believe that a parent has engaged in abuse of a child of that parent’s family or in family violence. Sub-section (4) provides that 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”.
In a 2008 decision[17], FM Walters said the following in relation to terminology:
Although the law now refers to a child “spending time” with a person (usually a parent) with whom the child does not live, I shall use – from time to time in these Reasons – the obsolete term “contact”. I have elected to use the superseded term because it is both more convenient and less grammatically challenging to do so.
[17] Mills & Watson [2008] FMCAfam 2
For the same reasons I will also use the superseded term “contact” from time to time in these Reasons.
Primary considerations
The benefit to the children of having meaningful relationships with both parents
There is no suggestion by either party that children should not have a meaningful relationship with the other. The court expert reported:
Both parents acknowledged that the children have a strong bond with each of them and with their grandparents on both sides. Both parties would like the children to maintain their strong connections with each other and with their extended family members. [19]
[19] Family Report at page 13
I accept what the court expert says.
The need to protect the children from harm from abuse, neglect or family violence
The court expert reported:
On a positive note, the presence of an Intervention Order that has served to buffer the children from parental conflict that they witnessed prior to separation. [The wife] alleged that she experienced physical violence from [the husband] and his parents. The veracity of the violence allegations requires testing as they are denied by [the husband]. Nevertheless, [Y]’s information indicates that the children were exposed to verbal conflict between their parents and [Y] also recalled that his father used to punch walls in frustration. The intensity of anger and conflict was frightening for the children. It is a concern that [Y] reported that he punches his brother in the face when he is upset with him. It is not uncommon for children who witness physical violence to mirror violence in their relationships when dealing with conflict.
She also noted that the proceedings had come before the Court immediately after the parties had separated in acrimonious circumstances. It was therefore pleasing to me to note that the parties were able to narrow the dispute in relation to the children quite significantly and the interim orders that were made on 16 February 2010 generally appeared to be working well.
It also pleased me that the parties did not concentrate their efforts during the hearing upon the acrimonious circumstances of their separation and I came to the conclusion that the issue of domestic violence had largely become historical. By that I mean that now that the parties are separated, and they both accept that the break-down of the relationship is irretrievable, the potential for future violence is significantly reduced.
I also note that the court expert reported that the wife had stated to her that she was not concerned about coming face to face with the husband.[20] However, I must say that I accept that the husband was more violent than he is prepared to concede and he needs to learn to control his temper when things are not going his way, especially when the children are with him.
[20] Family Report at page 7
Relevant additional considerations
The children’s views
In relation to [X]’s views, the court expert reported as follows:[21]
[X] identified his father as his favourite person in his family. He described his father as “thoughtful and loving” and his mother as “kind and caring”. He identified both parents as significant adults in his life. He expressed sadness and distress about the fighting he had witnessed between his parents. He hopes that they would be able to get on with each other and communicate with each other.
and
[X] seemed very aware of the writer’s role in the parenting dispute. Whilst acknowledging that he feels settled into a routine with his current arrangements he stated that he would like to spend “a bit more time with Dad”. When asked, “who would be happiest if you spent more time with Dad?” he responded, “Dad”.
[21] Family Report at page 11
She said this about [Y]: [22]
He identified his Mum and Dad as his favourite family members and expressed love and affection for them.
and
He spoke directly about his sadness that his parents are not living together but acknowledged that he is happier now because they are not fighting with each other. Nevertheless, he misses the presence of each parent when he is spending time with the other.
[22] Family Report at pages 9 and 10
It is very clear to me that these children want to continue spending significant periods of time with each of their parents. Fortunately, the proposals of each party will provide that for them.
The children’s relationships with the parents and other people
The parties clearly acknowledge the importance of the children’s loving relationships with the other parent and with their extended families. I accept the evidence of the court expert in relation to this. In the Family Report she said:
Both parents acknowledged that the children have a strong bond with each of them and with their grandparents on both sides. Both parties would like the children to maintain their strong connections with each other and with their extended family members.
The willingness and ability of the parents to facilitate and encourage the children’s relationships with the other parent
In my view, this is covered in the quotation immediately above and I do not really need to say any more.
The practical difficulty and expense of the children spending time with and/or communicating with a parent
This is not an issue in this matter.
The capacity of the parents to provide for the children’s needs
Both parties have the capacity to provide all the children’s emotional and physical needs, but I have some concerns that neither is exercising that capacity to the fullest.
At the time of the hearing [Y] had just been released from hospital. He is suffering from Perthes disease. That is a condition of unknown cause that affects the hips in growing children. It is much more common in boys than girls, and usually occurs in children aged between 4 and 10 years. The most common symptom is limping,[24] which can persist. One of the methods of treatment is to apply a broomstick plaster.[25]
[24] The court expert commented upon [Y]’s limp.
[25] Source: Exhibit “W5” - Leaflet on Perthes disease provided by the Royal Children’s Hospital
[Y] had just had a broomstick plaster applied when this matter came on for hearing, and was provided with a report about [Y]’s treatment that is now Exhibit “W1”. I do not need to repeat what is said in that report but it is clear that for some time both parents (and other family members) will need to provide extra assistance for [Y].
However, I must record that it was pleasing to see that the parties appeared to be united in their concern for [Y]’s well-being and were cooperating in relation to his care. That gives me some confidence that their cooperation will continue in the future
While I note that there were some cross words between the parties at the hospital, I put that down to the stress that each of the parents must have been undergoing as a result of [Y]’s hospitalisation.
[Y] is apparently overweight as well, and his doctor has recommended that he lose weight. Unfortunately, each parent seems to blame the other for providing [Y] with take-away food from time to time.[26] I can take judicial notice of the fact that excess weight and obesity among both children and adults in Australia is a significant and increasing health issue, but I am sure that I do not need to repeat what [Y]’s doctor has already told the parties. They both need to act on that advice and stop providing [Y] with take-away food. His excess weight can only be exacerbating his difficulties with Perthes disease
[26] See paragraphs 20 and 29 of the Family Report
The court expert said this about [X]:
[X] presented as an 8 year old child who lacked confidence and appeared withdrawn. He looked downwards during his interview with the writer and avoided eye contact with the writer. Throughout his interview he appeared cautious and generally uncomfortable. Themes of anxiety and distress prevailed throughout his interview.
That is somewhat concerning but I note that both parties described [X] as being a sensitive child. They need to keep that in mind at all times.
The attitudes of the parents to the children and to parental responsibilities
I do not have any significant concerns about the wife’s attitude to the children or to her responsibilities as a parent. However, I cannot say the same about the father’s attitude to his responsibilities as a parent.
As I have already noted, the husband was stopped by police when driving with the children in his car and his breathalyser reading showed that he had a blood alcohol level of 0.12. That means that he had significantly more alcohol in his system than the law allows, and it was very clearly unsafe and highly irresponsible of him to be driving in that condition.
At the time of the hearing the husband was still disqualified from driving because of that incident and I sincerely hope that he has learnt his lesson.
I also have some concerns that the husband has been paying child support at what was described as a “miniscule” rate by counsel for the wife.[27] In my opinion, paying a weekly sum of $6.82 for the support of two children would be almost as helpful to the wife as paying nothing at all, so the use of the word “miniscule” is quite apt. [28]
[27] Transcript, Day 3 at page 166
[28] See the Child Support Assessment for the period 7 December 2009 to 6 March 2011 - Exhibit “W3”.
The husband’s child support liability has been assessed on the income that he has declared for income tax purposes, but it will be apparent from what I say below in relation to property matters that I consider that he earns (or is capable of earning) a better income than that which he declares to the ATO. He should therefore be able to pay the wife more child support, and his failure to do so does not reflect well upon his attitude to his parental responsibilities.
The wife complained to the court expert that the husband “bribes the children with gifts to enlist their support”[29] and that statement is supported by what [Y] said to the court expert.[30] That also reflects badly upon the husband’s attitude to his parental responsibilities, especially in the light of what I have said in relation to his failure to pay a proper level of child support in the paragraph immediately above.
The likely effect of any change in the children’s circumstances
[29] Family Report at paragraph 25
[30] Family Report at paragraph 34
Under the current arrangement children are having contact with their father every Wednesday night and every second weekend. That is five nights per fortnight and it involves three separate periods of time. The wife wants that to continue but the husband wants to change that so that he has contact with the children for five consecutive nights per fortnight. However, it is also his proposal that the children could spend time with him from after school until 8 p.m. on each intervening Thursday during school terms. That would break up the long period of nine days that they would be away from their father.
As is mentioned above, the husband changed his position at the start of Day 2, having heard the evidence of the court expert on Day 1. Essentially, the court expert advised that it was her opinion that equal time between the parents was not appropriate for these children, but she indicated her preference for contact to be in blocks rather than fragmented. Her words were:
I have always advocated for periods of time being done in blocks rather than being fragmented up, because each changeover within a conflicted situation is hard. Children have to emotionally adjust each time, so whatever the arrangement, I think, it’s preferable to be done in a block.[31]
[31] Transcript, Day 1 at page 12
As I understood the wife’s evidence, she was of the view that children are already unsettled when they return from their father and longer periods of time would make them more unsettled. She used the words “menaces” and “brats” to describe the children when they return to her after time with their father.[32] She appeared to blame their behaviour on a lack of discipline in their father’s household.
[32] Transcript, Day 2 at pages 29 and 30
I consider that a more likely possibility is that the children’s behaviour is a factor of the emotional adjustment that was referred to by the court expert. It would therefore follow that, if there were fewer changeovers in each fortnight, there would be less need for emotional adjustment. Therefore, on balance, I am of the view that a block of five nights per fortnight with their father could be more settling for the children.
However, I do think that a block of nine nights is too long for the children to be separated from either parent so the father’s proposal to spend one afternoon and an evening with them in the “off week” is a sound proposal.
Similarly, in order to avoid long periods of separation from either parent, the long summer school holiday should be shared on a week and week about basis (and not half the holiday in one block as suggested in the orders sought by the husband).
Any family violence and family violence orders
I have commented about this above and do not need to say more.
Conclusions – children
I conclude that the parties should share parental responsibility equally, notwithstanding that there has been some violence in the past. I am confident that the violence is historical and generally came about because of the parties’ unhappy marriage.
Both parties seek an order for equal shared parental responsibility so that Order will be made by consent and I do not have to consider the matters referred to in paragraphs (1)(a) to (c) of section 65DAA of the Act. The parties’ willingness to share parental responsibility equally gives me confidence that they feel they are able to communicate in the interests of the children. Indeed, the fact that the parties were able to narrow their dispute so significantly gives me confidence that the process will continue in the future.
Essentially, I will make parenting orders that are very similar to those being sought by the husband, but with some modifications.
Legal principles – property orders
Section 79 of the Family Law Act 1975 (“the Act”) sets out the matters that the court must take into account when considering what orders should be made for the alteration of the property interests of parties. They include:
a)the financial and non-financial contributions made directly or indirectly by or on behalf of each party or by a child to the acquisition, conservation or improvement of any property of the parties;
b)the contribution made by a party to the welfare of the family including any contribution made in the capacity of homemaker or parent;
c)the effect of any proposed order upon the earning capacity of either party; and
d)the matters referred to in sub-section 75(2) as far as they are relevant.
The general approach to the determination of a property settlement application has been well established by authority[33]. It is essentially a multi-step process. The first step is to identify the property, liabilities and financial resources of the parties (generally at the time of the hearing). The second step is to evaluate the contributions made by the parties as defined in section 79(4) of the Act and the third step is to consider those matters contained in section 75(2) that are relevant.
[33] See Lee Steere & Lee Steere (1985) FLC 91-626; Ferraro v Ferraro (1993) FLC 92-335; Clauson & Clauson (1995) FLC 92-595, Hickey & Hickey (2003) FLC 93-143 and C v C (2005) FLC 93-220
In determining what order the court should make under section 79, the court must be satisfied in all the circumstances that it is just and equitable to do so.[34] It is the justice and equity of the actual orders that the court must consider and this has sometimes been referred to as “the fourth step”.[35] In Russell v Russell, the Full court said:
Furthermore, it must be remembered in this regard that under s79(2) of the Act, the Court is required to be satisfied that it is the order to be made which is just and equitable, not just the underlying percentage division of the net value of the parties' assets. Indeed we take the opportunity to emphasise that in what his Honour has termed “the fourth stage”, that is, the consideration of whether the result is just and equitable, it is the justice and equity of the actual orders not of the percentage distribution which must be considered. [36]
[34] See Sub-section 79(2)
[35] See Hickey & Hickey (2003) FLC 93-143 and Russell v Russell(1999) FLC 92-877
[36] (1999) FLC 92-877 at page 86,439
However, I agree with Federal Magistrate Walters that “the testing of any proposed orders by reference to section 79(2) is not a fourth substantive step (properly so called) in the property settlement exercise, and there is no fourth step in that sense.”[37]
[37] OSF and OJK (2004) FLC 93-191 at paragraph 16
In the same decision (OSF and OJK) he went on to say:
The problem with considering the application of section 79(2) as a stand alone requirement or consideration is that it is impossible to determine what factors may direct the court in its consideration of what may or may not be a just and equitable result in proceedings. Nygh J, in early cases, referred to concepts such as “palm tree justice” or “a soup kitchen approach” in relation to subjects such as these. It is impossible to look at the question of whether an order or a result is “just and equitable” without measuring or assessing that consideration by some yardstick. The approach set out in section 79 requires that the court use the considerations in section 79(4) as the yardstick, and not other (wholly undisclosed) considerations.[38]
[38] Paragraph 18
Since the end of 2002 courts have been required to treat any superannuation interest as “property” for the purposes of property settlements between parties to a marriage and in appropriate cases courts may “split” superannuation interests. [39]
[39] See sections 90MC and 90MT of the Act
The asset pool
The parties agree that the following assets and liabilities are to be included in the asset pool:
Assets The home $510,000 LandCruiser $23,000 Husband’s superannuation $21,032 Sub-total $554,032 Liabilities Mortgage loan $98,000 Wife’s credit card $1,000 Sub-total $99,000 Net total $455,032
In accordance with the reasoning of the majority in C v C,[40] I consider it to be appropriate to include the husband’s superannuation interest in the same pool of assets as the other assets. This is because it is of little value in relation to the total value of the other assets.
[40] (2005) FLC 93-220
As mentioned above, the parties cannot agree about whether a Valiant motor vehicle should be included in the asset pool. The wife contends that the Valiant should be “added back” into the asset pool at a value of $7,000. The husband contends that it should not be included at all.
In Wilde & Wilde[41] the Full Court of the Family Court said:[42]
The question of constructing a notional pool of property for division between parties in proceedings under s 79 is not without difficulty and has been the subject of a number of decisions each dealing with differing factual situations. (See Townsend and Townsend (1995) FLC 92-569; C and C [1998] FamCA 143; Re NHC and RCH (supra); AJO v GRO (2005) FLC 93-218 and Gollings and Scott [2007] FamCA 397). These cases all recognise the discretion reposed within the trial Judge in adjusting property between parties pursuant to s 79. The discretion in relation to living expenses post separation was specifically addressed in M & M [1998] FamCA 42 and C & C [1998] FamCA 143
[41] Wilde & Wilde [2007] FamCA 1044
[42] Bryant CJ, Finn and Boland JJ
In M & M their Honours Baker, Kay and Chisholm JJ put the principle succinctly when they said:[43]
There seems to be no appropriate basis for notionally adding back moneys that existed at separation but which have been subsequently spent on meeting reasonably incurred necessary living expenses. Neither the Family Law Act nor the case law require that parties go into a state of suspended economic animation once their marriage breaks down pending the resolution of their financial arrangements. Parties are entitled to continue to provide for their own support.
[43] [1998] FamCA 42 at paragraph 2.11
The Valiant motor vehicle was first referred to by the wife in her first affidavit, where she said that she and her husband “decided to purchase a Valiant classic car for about $7,000”.[44] in his first affidavit the husband responded to that by saying the following:[45]
I admit that the Valiant was purchased $7,000.00 three years ago and I say that prior to separation I sold the car to my sister or $4000.00. The $4000.00 was applied towards debt.
[44] At paragraph 61
[45] At paragraph 46
In his second affidavit, he said this about the Valiant: [46]
The proceeds of sale of the Valiant motor vehicle of $4,000 where (sic) applied by me towards outstanding tax invoices of the wife and me and should not be taken into account. The vehicle was also unregistered.
[46] At paragraph 22(c)
In her second affidavit the wife said that the proceeds of the sale of the Valiant should be included in the asset pool “namely $4,000, which were not applied to outstanding tax invoices belonging to me and is located at the home where the husband is currently residing”.[47]
[47] At paragraph 23(iii)
When he was cross-examined the husband accepted with some reluctance that the Valiant had cost a total of $7,000. He maintained that he had sold it to his sister for $4,000. Questioned further, he said that he had not received payment but his sister had paid “family bills”. He said that he did not know the whereabouts of the Valiant and that his sister lives in the same house as he does. He did not produce any of the bills or payment receipts to the court.
On balance, I conclude that the husband deliberately removed the Valiant in an attempt to put it beyond the reach of the wife for the purposes of these proceedings. I am not satisfied that he sold it to pay family bills, but even if he did transfer it to his sister, that transaction was not at arms length and was clearly not with the approval of the wife. I am therefore of the opinion that this is a case in which that asset should be added back into the asset pool. I have no evidence about the value of the Valiant, but I note that the husband has not denied that it was purchased as a “classic car”. It therefore seems appropriate to me to add it back into the pool at the full value of $7,000.
As a result, the total net value of the asset pool for consideration is $462,032.
Contributions
I agree with counsel for the wife that the assessment of the parties’ contributions is “the nub of the dispute”.[48]
[48] Written closing submissions at page 5
It is important to remember that contributions include direct and indirect financial and non-financial contributions as well as contributions to the welfare of the family including any contribution made in the capacity of homemaker or parent. Further, it is also important to remember that the assessment of contributions is not an exercise of mathematical precision. In Kessey and Kessey[49] the Full Court said:
In many - indeed probably in most - property settlement cases the Court has to evaluate and assess contributions to property in the absence of precise valuations of the contributions in question. Indeed, where the contributions to property are indirect or non-financial, precise valuation is impossible, and even where the contributions are direct or financial so that a valuation might be provided, other factors (not capable of precise mathematical statement) may well have eroded the initial value of such contributions. In a case such as the present, it is not necessary to arrive at precise mathematical valuations of the parties' contributions - all that is necessary is to evaluate the weight that should be given to each party’s contributions relative to the contributions of the other party.
[49] (1994) FLC 92-495 at page 81,150.
In their affidavits, the husband and his mother set out many payments that the husband’s parents made on behalf of the husband and the wife. It is clear that they contend that the husband should get some extra contribution adjustment because of those payments.
In her affidavit the husband’s mother appeared to summarise the approach that she and her son consider I should adopt. She said:
That insofar as financial matters are concerned, I wish to have it clearly on the record that my husband and I have made the overwhelming financial contributions to the asset pool of the husband and wife herein. We have made a total of direct financial contributions as at 8 September 2010, of $311,983.81. These contributions have been made as set out below.[50]
[50] At paragraph 11
In that affidavit, she detailed a number of payments that she and her husband had made which add up to that total of $311,983.81. I do not need to detail them all here, but I will refer to some below.
The husband’s mother went on to say:
That if one adds the sums of $95,900, $58,200, $75,000, $60,000 and $22,883.81, my husband and I have contributed $311,983.81 to the parties' financial circumstances and that does not include other smaller amounts of assistance to the parties nor does it include stamp duty and registration fees in relation to the former matrimonial home.
That without the assistance of my husband and me, the parties herein would have had very little matrimonial assets to divide.
The wife did not really challenge the fact that those total payments had been made by the husband’s parents. However, her counsel submitted that the dispute lies in the characterisation of those payments.[51]
[51] Transcript, Day 3 at page 161
When the parties purchased the former matrimonial home, they were assisted by payments of $75,000 from the husband’s parents and $20,000 from the wife’s parents. In addition, the husband’s parents paid the legal costs and stamp duty on the purchase.
Further, the husband’s parents purchased the Toyota LandCruiser that was initially used by the wife as the family vehicle. It was subsequently removed from her possession by the husband and has not been returned to her. It appears to be accepted that the husband’s parents paid $60,000 for that vehicle.
The wife says that the LandCruiser was given to her in November 2001 as a gift for her 28th birthday and for the birth of [X].
The husband and his mother both say that the LandCruiser was purchased from funds advanced as a loan. Further, they also say that a sum of $75,000 provided purchase of the former matrimonial home had also been a loan. Both annexed copies of what purport to be loan agreements to their affidavits.[52]
[52] For example, see Annexure “B” to the husband’s affidavit.
In my view, it is of some significance that the purported loan agreements are only between the husband’s father as the “lender” and the husband as the “borrower”. It is all so significant that both agreements were allegedly signed on 10 January 2002 and both are repayable “upon demand or upon the sale or transfer of [the former matrimonial home] or the death of the borrower whichever shall first occur”.
I have commented above about the credibility of the husband and his mother in relation to those purported loan agreements, but I should state clearly for the record that I find on the balance of probabilities that those documents, which significantly did not include any provision for the wife to sign, were produced specifically for the purpose of court proceedings such as these after it became clear that the wife had made a claim for property settlement (or was likely to make one). I do not accept the explanation set out by the husband’s mother in paragraphs 13 and 14 of her affidavit and I note that no affidavit was available from the solicitor who allegedly prepared the purported loan agreements. The husband knew that the status of funds advanced as “loans” was in dispute, yet no affidavit from the solicitor was forthcoming. I can only assume that such an affidavit would not have assisted his case.[53]
[53] Again see Jones v Dunkel (1959) 101 CLR 298
Even if I am wrong about what I have said in the paragraph immediately above, I have significant doubts that the “loan agreements” would ever be enforced against the husband by his father. Further, even if his father was inclined to enforce either “loan agreement”, it seems probable to me that his father’s right of action is statute barred in any event.[54]
[54] See section 5 of the Victorian Limitation of Actions Act 1958
The question then arises whether I should treat those purported loans as gifts made to benefit the husband alone.
It is clear from the decision of a single judge in Gosper & Gosper [55] that a gift made to parties jointly by the parents of one spouse can be treated as a financial contribution made directly on behalf of that spouse alone, because it is often “clear that the motivating circumstance was the relationship” between parents and their son or daughter, and that it was intended to benefit their son or daughter. [56] However, in Kessey Baker, Finn and McCall JJ said:
In other words, a contribution by a parent of a party to a marriage to the property of the marriage will be taken to be a contribution made by or on behalf of the party who is the child of the parent unless there is evidence which establishes it was not the intention of the parent to benefit only his or her child.[57]
[55] (1987) FLC 91-818
[56] See page 76,168
[57] Their emphasis – see page 81,150
When she was cross-examined, the husband’s mother was asked whether various payments were intended to benefit or help both her son and his wife, and she said that it was for both of them. Counsel for the wife repeated the word “both” and the husband’s mother said:
Both. Not only to my son. Both. I help for both to be family with the kids, not chuck my son on the street.
She was questioned further and she said:
I help both, and my grandkids special.[58]
[58] Transcript, Day 3 at page 135
In the circumstances, it seems clear to me that if there was any gift involved, the intention was to benefit both parties and not just the husband alone. However, counsel for the wife would prefer that I treat payments made by the father’s parents as payments in kind for the work that the husband did in his father’s business. He suggests that the husband’s family pool their efforts, and in turn, pool their funds. [59] In his written submissions, he went on to say:
It is a proposition open to the Court to find that all of the additional contributions claimed by the husband’s parents of around $312,000 were simply a distribution of income which the husband had earned, but labelled as other than taxable income.
[59] Written closing submissions at page 8
That proposition needs to be examined.
The husband said that prior to separation he was working between 30 and 40 hours per week and that he has 16 years experience as a serviceman in his industry. [60] However, his tax returns reveal that he was only declaring the following incomes for income tax purposes:[61]
[60] Transcript, Day 2 at page 63
[61] Exhibit “W2”
Year ended Taxable Income 30.06.03 $12,469 30.06.04 $12,219 30.06.05 $14,629 30.06.06 $6,852 30.06.07 $8,638
Further, his 2009 taxable income shown on his Child Support Assessment was $16,833.[62]
[62] Exhibit “W3”
Significantly, the only pay slip produced to the court was one that the husband had provided to the Commonwealth bank more than 10 years ago to assist the parties to obtain their mortgage loan.[63] It shows that the husband’s pay for a 40 hour week in September 2000 was $892.80. Extrapolated over a year that would have given him an annual income then of more than $46,000.
[63] See paragraph 18(xi) of the wife’s second affidavit and Exhibit “W4”
I have no doubt that employees in the same industry as the husband (who are not employed in family businesses) have seen reasonable increases in their rates of pay over the last 10 years. Although I was not provided with any information to support that assumption, I think it is a logical inference that pay rates would have roughly kept pace with inflation. I calculate that the total Consumer Price Index increases in Melbourne over the 10 year period between June 2000 and June 2010 to have been approximately 35%,[64] and I conclude that it is a reasonable assumption that a wages income of $46,000 in 2000 would probably have increased similarly over that same ten year period to approximately $62,000 in 2010.
[64] Source: Consumer Price Index published by the Australian Bureau of Statistics. See CCH Australian Family Law Handbook at ¶35-100
I therefore find it quite easy to conclude that the husband’s worth to the family business was well in excess of what he was declaring for tax purposes and the payments made by his family on his behalf were indeed “payments in kind” to compensate for the extremely low wages that the husband was declaring to the Australian Taxation Office. I also conclude that, because the business was a family enterprise, it matters not whether the payments to the husband and the wife came from the husband’s father, his mother or both. It is also not difficult to conclude that, if the husband had in fact been paid a proper wage by the business, he could have earned an additional $312,000 or more over the relevant period and he and his wife could have met their expenses from his income.
Consequently, for the period up to the parties’ final physical separation, I do not propose to attribute any additional weight to the husband’s side of the ledger for payments made by his family.
Further, the husband and the wife adopted what are often described as the “traditional roles” of one being the main breadwinner and the other being the main homemaker and parent, and it should be remembered that the contribution made by the wife as a homemaker and parent should generally be recognised not in a token way, but in a substantial way.[65]
[65] Mallett & Mallett (1984) FLC 91-507 per Gibbs C.J., Mason and Wilson JJ at page 79,111.
I conclude therefore that the weight to be attributed to the parties’ contributions up to their final separation was equal.
Since the parties separated the wife has been the greater contributor to the welfare of the family and to the conservation of the home, which is the parties’ principal asset. In this regard, she has been the primary carer for the children with miniscule financial support from the father and she has also kept up the mortgage payments without his assistance. In my view, that deserves some recognition and if the parties’ property division was to be based on contributions alone, I would award 52.5% to the wife and 47.5% to the husband.
However, division of property is not based upon contributions alone.
The sub-section 75(2) factors
The wife is aged 38 years and the husband is 36 years old.
The wife deposed that she suffers from anxiety and depression, which is treated by medication. She also said that she has had a prolapse which has been operated on, but it requires further surgery. Further, she stated that she has an ovarian cyst and a hernia which will require surgery.[66] She was not challenged about that,[67] nor was she required to provide further medical evidence.
[66] Paragraph 79 of her first affidavit.
[67] See paragraph 60 of the husband’s first affidavit.
The husband receives an income from the business and other benefits which are somewhat difficult to quantify. Clearly, the husband has not assisted the court in relation to that quantification, because he has been less than forthcoming in relation to the provision of proper information relating to of his remuneration. In this regard he has not “put all his financial cards on the table” and it should be remembered that in financial matters, the obligation to make full disclosure is absolute. Kannis & Kannis is reported in an edited version only (in relation the issue of the removal of a next friend).[68] However, in the unedited version of the decision delivered on 24 December 2002, the Full Court of the Family Court re-stated a long held principle as follows:[69]
Whether the non-disclosure is wilful or accidental, is a result of misfeasance, or malfeasance or nonfeasance, is beside the point. The duty to disclose is absolute.
[68] (2003) FLC 93-135
[69] Nicholson CJ, Buckley and Kay JJ at paragraph 51
Notwithstanding the difficulty in assessing the husband’s true income, it is still clear that he is in a more advantageous position financially than the wife. The wife has no real qualifications and no significant work experience. She would like to work, and indeed, she would like to pursue tertiary studies. However, she did not complete Year 12, so that will present an initial hurdle for her.
Clearly, the husband will be in a more advantageous financial position for some time yet. Further, under the orders that I will make today, the wife will continue to shoulder the greater burden in relation to caring for the children. Initially, that burden will be complicated by [Y]’s health difficulties but I hope that the parties will work together in relation to that and that those difficulties will only be temporary.
Both parties have a continuing responsibility in relation to the support of the children, but it is clear that the husband’s miniscule child support contribution of $6.82 per week will not assist the wife greatly.
Clearly, the sub-section 75(2) factors favour the wife significantly. However, I have taken note of the submission by counsel for the wife that I should consider the real impact of any adjustment in the wife’s favour rather than just consider it in percentage terms. He referred me to Clauson & Clauson, where the Full Court said:
There is, we think, at times a tendency to assess s. 75(2) factors in percentage terms without considering its real impact, and we think there is legitimacy in the views expressed in more recent times that the Court has tended to operate in this area within artificially delineated boundaries. That is, it appears almost to be inevitable that the s. 75(2) factors will be assessed in a range between 10% and 20%. A number of cases will justify an assessment outside those parameters and in any event it is the real impact in money terms which is ultimately the critical issue.[70]
[70] (1995) FLC 92-595 at page 81,911
Counsel for the wife submitted that I should therefore make an adjustment of 20% in the wife’s favour. With a net asset pool of approximately $462,000, that would be an adjustment in excess of $92,000. I consider such an adjustment to be too much and determine that a 15% adjustment is more appropriate.
Conclusions – property
I have determined that an overall contribution percentage of 52.5% should be attributed to the wife, with a further sub-section 75(2) adjustment of 15%. That means that the wife should receive 67.5% of the net value of the asset pool. That is $312,000 in round figures and I consider that to be a just and equitable sum in all the circumstances of this matter.
If the wife is to retain the home at $510,000, subject to its mortgage loan, she will retain an asset with a net worth to her of $412,000. That means that she must pay the husband $100,000 to provide justice and equity to him. Applying the principle of de minimis non curat lex, I have left out the credit card liability for which the wife will be responsible, in view of its relative insignificance in the larger picture.[71]
[71] For a discussion of the application of the de minimis principle see the Full Court decision in Milankov and Milankov (2002) FLC 93-095
Counsel for the husband suggested that the wife should be required to pay the husband his entitlement within 60 days. I think that such a time-frame would be a little short for her to arrange finance as a recipient of Centrelink benefits. Consequently, I have decided that she should have 90 days to pay that sum in return for a transfer of the home to her.
If the wife is unwilling or unable to pay the husband such a sum, then the husband will have 60 days to pay the wife $312,000 in return for a transfer of the home to him. He is in a better position financially and the possibility of family assistance to arrange finance does not seem unlikely.
The home will have to be sold if neither party is willing or able to do what is set out in the three paragraphs immediately above. In those circumstances, the wife will receive 67.5% of the asset pool and the husband will receive 32.5%. The asset pool will comprise the Toyota LandCruiser, the husband’ superannuation and the notional value of the Valiant (with a combined total value of $51,000), plus the net proceed from the sale of the home.
I will make orders to provide for what is set out above in these reasons.
Comment
I heard this matter in Melbourne but I will be handing down this decision from Tasmania by telephone. My Associate will provide copies of these Reasons to the parties’ legal representatives by email or fax.
Finally, I would like to thank both counsel for the very helpful way in which they conducted the hearing.
I certify that the preceding one hundred and forty (140) paragraphs are a true copy of the reasons for judgment of Roberts FM
Date: 21/4/11
[18] See also Carpenter and Lunn (2008) FLC 93-377, Chappell & Chappell (2008) FLC 93-382 and Stirling & Dobson [2011] FMCAfam 52
[23] At paragraph 50
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