IRVING & PARKES
[2015] FCCA 3049
•20 November 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| IRVING & PARKES | [2015] FCCA 3049 |
| Catchwords: FAMILY LAW – Property – date of separation – whether the doctrine of promissory estoppel applies – contributions. |
| Legislation: Family Law Act 1975, ss.75, 79, 90C, 90DA, 90G, 119, Child Support (Assessment) Act 1989 ss.5, 98, 116, 117 |
| Todd and Todd (No 2) (1976) FLC 90-008 Lane and Lane (No 1) (1976) FLC 90-055; Abrams & Director-General, Department of Human Services (NSW) [2007] FamCA 731 In the Marriage of McKay (1984) 59 ALR 117 In the Marriage of Gyselman (1992) 15 FLR 219 |
| Applicant: | MR IRVING |
| Respondent: | MS PARKES |
| File Number: | MLC 1940 of 2013 |
| Judgment of: | Judge Small |
| Hearing dates: | 16 – 20 March 2015 |
| Date of Last Submission: | 15 May 2015 |
| Delivered at: | Melbourne |
| Delivered on: | 20 November 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr A. Combes |
| Solicitors for the Applicant: | Telford Story & Associates |
| The Respondent: | Ms Parkes in person |
| Solicitors for the Respondent: | None |
ORDERS
Parenting Orders
In relation to the time the husband spends with the children X born (omitted) 1999 and Y born (omitted) 2000, changeover shall occur at the wife’s home at the commencement of time and at an agreed location close to the intersection of the (omitted) and the (omitted) Roads at the conclusion of time, and failing agreement, at the (omitted) Service Station on the corner of (omitted) and (omitted), (omitted).
Property Orders
Within 60 days (“the due date”) the wife shall pay to the husband the sum of $25,270 (“the payment”).
Contemporaneously with the payment the husband shall relinquish all of his right title and interest in the property situate at and known as Property P in the state of Victoria being the whole of the land more particularly described in Certificate of Title Volume (omitted) Folio (omitted) (“the Property P property”).
In the event that the whole of the payment has not been made by the due date the wife shall do all such acts and things and sign all such documents as may be necessary to place the Property P property on the market for sale (“the sale”) and upon completion of the sale the sale proceeds shall be distributed as follows:
(a)first to pay all costs and commissions of the sale;
(b)second to discharge the mortgage over the (omitted) property;
(c)third to make the payment to the husband plus interest at the rate of 8.5% per annum from the due date to the date of payment;
(d)fourth the remainder to the wife.
Upon completion of the sale of the real property situate at and known as Property H in the State of Victoria being the whole of the land more particularly described in Certificate of Title volume (omitted) Folio (omitted) (“the Property H sale”) the net sale proceeds, if any, shall be divided between the parties as to 63% to the wife and 37% to the husband, and in the event that there is a shortfall between the net sale proceeds and the mortgage debt remaining, the liability for the remaining debt shall be divided equally between the parties.
Should the wife fail to comply with paragraph 4 hereof then pursuant to s.106A of the Family Law Act 1975 a Registrar of the Federal Circuit Court of Australia at Melbourne shall be appointed to sign any and all such documents on her behalf as may be necessary to give effect to these orders, and the Registrar shall be satisfied as to his or her authority under this order upon the husband or his legal representative filing an Affidavit setting out the wife’s failure to comply.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these any subsequent orders:
(a)each party shall be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders.
(b)monies standing to the credit of the parties in any joint bank account shall be divided equally between the parties;
(c)insurance policies remain the sole property of the owner named thereon;
(d)each party shall be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(e)each party forgoes any claim they may have to any inheritances or superannuation entitlements to which the other party is entitled to either presently or in the future
(f)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
The husband’s application for a Departure Order contained in his Amended Initiating Application filed 23 January 2014 is dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Irving & Parkes is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 1940 of 2013
| MR IRVING |
Applicant
And
| MS PARKES |
Respondent
REASONS FOR JUDGMENT
Introduction
Mr Irving (“the husband” or “Mr Irving”) and Ms Parkes (“the wife” or “Ms Parkes”) were married for about 27½ years.
They have two children: X born (omitted) 1999 and Y born (omitted) 2000 (“the children”). The children, both of whom were born in (country omitted) and were adopted by the parties, live with the wife and spend regular time with the husband. I mention their place of birth only because issues to do with the maintenance and development of their cultural identity are relevant to the factors to be considered under s.75(2) of the Family Law Act 1975 (“the Act”).
These proceedings are for parenting orders and property settlement, although by the time of trial, the only parenting matter outstanding was the location of changeover at the end of the children’s time with the husband.
The parties stated at trial that they were agreed that the children would continue to live with the wife and spend regular and specified time with the husband. However, the parties never provided to the court a signed minute of consent orders.
No evidence was presented at trial in relation to parenting orders other than the matter of the location of changeover at the end of the children’s time with the husband.
The husband’s written submissions, prepared by counsel, while not making any particular submissions in relation to parenting matters, did set out a minute of parenting orders sought, but the wife made no mention of the issue in her written submissions.
When my chambers staff asked, well after trial, whether the parties sought to have any parenting orders made, they indicated that they were no longer in agreement, although the husband had sent the wife a copy of the orders he sought.
Nothing further has been heard on that matter.
I therefore assume that the parties have entered into a Parenting Plan or informal agreement in relation to those matters and that they do not seek the court’s involvement in any matter save that set out above in relation to changeover.
The substantive issues in this case can therefore be set out as follows:
A.What should be the location of changeover at the end of the children’s time with the husband?
B.Is it just and equitable in all the circumstances to alter the property interests of the parties?
C.If it is just and equitable what are the property interests of the parties and what is their value?
D.If it is just and equitable to make orders altering the parties’ property interests, what were the contributions of the parties to the acquisition, maintenance and improvement of their property?
E.Should the contribution-based entitlements of the parties be adjusted by reason of the matters set out in s.75(2) of the Act?
F.In light of the above findings, what orders ought to be made to effect a just and equitable settlement between the parties?
G.Whether there should be a Child Support Departure Order pursuant to Division 4 of Part 7 of the Child Support (Assessment) Act1989 (“the CSA Act”)
Background
The husband is 59 years old having been born on (omitted) 1956, and the wife is 58 having been born on (omitted) 1957.
The parties commenced their relationship in 1983 and married on (omitted) 1984. They did not live together before that date.
As already stated, they have two daughters now aged 16½ and 15, who live with the wife and spend time with the husband.
During the marriage the parties bought two residential properties[1]: Property H (“the Property H property”); and Property P (“the Property P property” or “the Property P property”).
[1] The parties also bought and sold a property used for the wife's (business omitted) during the marriage but as the proceeds of that sale have been subsumed into the parties’ other property I do not intend to make further mention of it.
They also rented a property in (omitted) (“the (omitted) property”) for several years before purchasing the Property P property, and the Property H property has been rented out since they moved to (omitted) in 2005.
From the time of her husband’s death in about 1997 the wife’s mother lived with the parties and the children, and she remains living with the wife and the children. When she came to live with the parties she contributed the sum of $50,000 from the sale of her own property to the parties’ property.
At the time of trial the Property H property was on the market for sale and expected to sell, and the Property P property, which had been the family home since its purchase in 2011, was occupied by the wife, the children and the wife’s mother.
The date of separation is a matter of dispute between the parties. The husband says that the parties separated under the one roof at the end of July 2011 and that he left the family home at the beginning of December of that year.
The wife says that the marriage was essentially over from about 2001 but the parties had agreed to live together for the sake of the children. It is her evidence that they actually separated under the one roof in about 2005 and decided to separate physically in June 2011. She agrees that the husband left the family home in December 2011.
The parties were divorced on 2 May 2013.
The wife is a (occupation omitted) and worked in that capacity throughout the marriage, first as an employee and then, beginning in 1986, in a developing (business omitted) operated in the name of (business omitted) Pty Ltd (“(business omitted)”) of which she and the husband were directors. She obtained qualification as a (qualifications omitted) in 2008, thus enabling the (business omitted) to bill (omitted).
In 2009 the wife was diagnosed with chronic liver disease which significantly reduced her working capacity.
In late 2010 she was diagnosed with cancer and underwent major surgery, taking three months off work and returning at reduced hours.
In January 2011 the name of the wife’s (business omitted) was changed to (business omitted) and she continued to operate that business until February 2012 when she ceased work as a result of her deteriorating health. She attempted to return to work in a limited capacity in 2013, but was unable to continue.
The wife received compensation payments in the form of trauma insurance ($275,625 in January 2011) and disability insurance ($563,483 in August 2012) and has been receiving a Disability Support Pension and Centrelink family payments since that time.
The husband has worked as a (occupation omitted) since about 1995, first for (business omitted), and, since 2006, as a (occupation omitted) with an (employer omitted). Before 1995 he held various positions and during the marriage undertook several courses of study, only one of which was completed. He severed all connection and involvement with the parties’ company in August 2011.
The wife lives in the Property P property with the children and her mother and is responsible for all outgoings on that property. She has paid all those outgoings, including all mortgage payments, since July 2011.
The husband has lived in the same rented accommodation in (omitted) since he left the family home in December 2011.
Procedural History
The Husband filed his Initiating Application on 19 March 2013 seeking an equitable division of the matrimonial property.
The Wife filed her Response on 1 May 2013 also seeking a division of matrimonial property and extensive procedural orders for financial disclosure of the husband’s finances.
A Divorce Hearing before a Registrar on 2 May 2013 led to a Divorce Order which was to become effective one month later. The husband was the Applicant in those proceedings.
These proceedings first came before me in the Duty List on 7 May 2013. At that hearing the parties were ordered to a Conciliation Conference with a Registrar on 21 August 2013 and the matter was set down for a two day trial on 10 February 2014.
On 21 August 2013 the parties attend at the Court for a Conciliation Conference with a Registrar but no agreement was reached.
On 10 February 2014 the matter was listed for its Final Hearing but was not reached. Further orders for discovery were made and the matter was set down for a four day hearing with priority beginning on 16 March 2015.
The matter returned in the Duty List on 17 November 2014 as a result of an Application in a Case filed by the wife on 1 September 2014. The Husband filed a Response on 14 November 2014. Both parties sought orders for the sale of the Property H property. The Court made orders for the sale of the property, for the appointment of agents to sell the property, and the wife was ordered to provide further documents to the husband’s solicitors.
The trial began on 16 March 2015 and proceeded for five days, concluding on 20 March 2015. The husband was represented by counsel, and the wife was self-represented.
Five witnesses were called and cross-examined: the wife; the husband; Ms A, a long-term friend of the parties who took over the book-keeping role at the wife’s (business omitted) in 2008 (“Ms A”); and two expert witnesses in relation to the valuation of the Property P property.
Due to evidence being taken until the end of the fifth day of trial, the parties were ordered to make final submissions in writing, with the wife to file her written submissions within 28 days and husband to file his within a further 28 days.
My decision was otherwise reserved.
The wife filed her final submissions on 17 April 2015 and the husband filed his on 15 May 2015.
Since the matter was adjourned for judgment, Ms Parkes has filed the following:
·On 8 May 2015 she filed a single page containing what were said to be “supplementary submissions”
·on 25 May 2015 she filed a further Financial Statement.
·On 24 June 2015 she filed a further Financial Statement
·On 8 September she filed yet another Financial Statement.
Ms Parkes did not seek leave to file any of those documents and I have not read them.
The Issues, the Evidence and the Law
Parenting Issues
A. What should be the location of changeover at the end of the children’s time with the husband?
The parties are agreed as to the amount of time the children should spend with the husband. They are agreed that the husband will pick them up at the wife’s home in (omitted) so they can exercise that time, but are undecided as to how changeover should take place at the conclusion of their time.
The husband lives in (omitted). The distance between the parties’ homes is about 82 kilometres and up to an hour by road.
The wife’s residence is close to the (omitted). The husband’s home is close to the (omitted).
The husband’s case is that the wife should collect the children from his home at the conclusion of their time with him as he will be picking them up from her home at the commencement.
The wife says that she has the task of transporting the children every day, to school and to their various social and extra-curricular activities, and therefore the husband should deliver them back to her home. In addition, it is her evidence that she is the carer for her elderly mother, who has serious health issues and cannot be left alone for significant periods of time as she requires physical assistance for her mobility.
As I have said, both parents live close to a freeway, and those freeways intersect at (omitted).
When I suggested to the wife that changeover after the children spend time with the husband might be close to that intersection, she indicated that she would agree to that, as it would mean less time away from her mother. The husband too indicated that he would be agreeable to an order in those terms.
I will therefore make an order for changeover at the conclusion of the time the children spend with the husband to take place at an agreed location close to the intersection of the (omitted) Road and the (omitted) Road, and failing agreement, at the (omitted) Service Station on the corner of (omitted) and (omitted).
Property Issues
Preliminary Matters
While the major issues in this case have been set out above and will be dealt with each in turn, there are ancillary issues of disputed fact and legal argument which I will deal with before considering the substantive issues B to G above.
1. The date of separation
The husband’s evidence is that the parties separated under the one roof in July 2011 by mutual consent and he left the family home in December 2011.
The wife claims that the parties separated under the one roof in 2005 or at latest in 2008, when the husband told the parties’ accountant in an email dated 25 November 2008 that he was considering resigning from the family business due to “irreconcilable differences” with the wife.
In support of his claim the husband says that between 2005 and 2011, the parties shared the family home, operated joint accounts, cared for the children, bought a motor vehicle, refinanced the Property H property, and purchased the Property P property.
Under cross-examination at trial Mr Irving conceded that the parties’ sexual relationship had ceased in about 2001 but denied that the marriage had finished at that time. His evidence was that the master bedrooms at the Property H, (omitted) and Property P properties were large enough to contain two separate queen-sized beds and that while the parties had slept separately they had occupied the same bedroom. That evidence was not contradicted at trial.
In relation to the email sent to the parties’ then accountant in November 2008 which stated that he believed there were “irreconcilable differences” between him and the wife, the husband said he was referring to the business relationship between him and the wife and that he was considering separating the parties’ business and personal affairs at that time. He denied that that email indicated that the parties were separating in the marital sense.
He further conceded that the wife had reverted to her maiden name at the end of 2008.
I note that it was in 2008 that the wife gained her qualification as a (qualifications omitted) which meant that she was able to charge (omitted) for certain services. I note further that the name of the parties’ company was not changed from (business omitted) Pty Ltd to (business omitted) until early 2011.
When it was put to him that the parties had not attended each other’s work functions or attended social functions as a couple since 2005, Mr Irving said that his memory for dates and places was “not my forte”. However later, he said that the last time he had been to one of the wife’s business functions was in about 2010 at a restaurant whose location he could not recall.
He said that he had been to the wife’s family functions regularly until 2008 and that he had attended the wife’s niece’s 21st birthday celebrations in 2010. When it was put to him that that was “a bald faced lie” he stated that he had photographs to prove that he had attended those functions, although he did not have them with him as he was not expecting that question. He said that Ms Parkes rarely went to his family functions throughout the marriage.
He acknowledged that he had prepared his own evening meals from when he began working at (employer omitted) in 2006, saying that that was because he worked in Melbourne and arrived home late, and that the parties had had discussions about staying together for the sake of the children in about 2008 or 2009. He insisted that there was no discussion about division of assets at that stage and that the discussion had centred on the children’s welfare. He stated that the parties would regularly have discussions about the future in relation to both the children and the family business.
It is not disputed between the parties that in the 2009 – 2010 financial year the family company made a profit which was distributed to the wife thus creating a tax debt to her of about $15,000. At the time of trial that debt had been reduced to $12,800.
That debt becomes a two-edged sword in the context of the dispute about the date of separation.
The wife claims that it is a joint debt, while the husband claims that it is the wife’s alone.
The wife says that the husband cannot claim that the parties were married at that time but that the tax debt is hers alone. She uses that submission to support her claim that the date of separation was before the 2009 – 2010 financial year and that the husband was aware of that fact.
However, the corollary of that argument is that the wife cannot claim that the parties were separated at that time but that the tax debt is joint.
What is clear from the evidence of both parties and Ms A is that Mr Irving was involved in the day-to-day operations of the family company until August 2011 when he handed over the business ledger to Ms A.
In those circumstances the tax debt cannot be used as determinative factor as to when the date of separation actually was.
The wife’s evidence is that after the parties moved to (omitted) in 2005 they ceased spending time together, jointly caring for the children, and going out together as a couple.
She says that from that time they rarely cooked or cleaned for each other, that they rarely communicated directly with each other, and that the husband did not recognise her birthday or Mother’s Day.
She says that she engaged a (omitted) in 2008 so as to commence the “severance of business affairs with the husband”.
In her written submissions the wife says the following:
Following discussions of October 2005: the husband kept secret files unbeknown to me, on his computer; began withdrawing cash from (omitted) bank (business omitted) account in increasing frequency and amount, using to pay off personal debts; establish separate business and personal accounts unbeknown to me at that time.
Business account in the name of (omitted) opened on (omitted) 2010.
She says that when she became ill in 2010 she did not receive emotional support from the husband and that he did not visit her in hospital when she underwent surgery for cancer. The husband denies that allegation.
Affidavits were filed from the wife’s mother, Ms C (“the wife’s mother”), her former sister-in-law, Ms G (“Ms G”), and a friend of the parties, Ms N (“Ms N”).
In her affidavit sworn 5 and filed 6 February 2014 the wife’s mother says as follows:
Even though I was living with my daughter and the applicant since about 1997 I first became aware that they were experiencing marriage difficulties in or about 2005 when they told me that they were seeking to end the marriage as they had in effect been separated for a number of years, even though they still lived together. I actively encouraged then (sic) to try and resolve their differences and was concerned for them and my grandchildren as I had seen how my other grandchildren were affected by the breakdown of their parent’s (sic) marriage.
At the time of trial the wife’s mother was in hospital having undergone orthopaedic surgery, and while there was some discussion of her providing evidence and being cross-examined by telephone, that never eventuated.
In my view, the affidavit of the wife’s mother does not provide evidence to the level where I could be satisfied on the balance of probabilities that the parties separated in 2005.
The evidence of Ms G is that in late 2008 or early 2009 Ms Parkes, her mother, and the children had attended a family celebration for her daughter’s birthday, where “Ms Parkes shared with me that she and Mr Irving had separated but decided to still live together in order to look after the children”.
Ms N’s evidence, set out in her affidavit sworn 24 February and filed 10 March 2015, is as follows:
I have known Ms Parkes and Mr Irving for approximately 6 years.
In 2009 Ms Parkes confided in me that she and Mr Irving had separated, but chosen to continue to live together under the same roof for the sake of their children.
Ms Parkes is usually an extremely private person and did not say much other than that the differences between them were irreconcilable and that she had made many efforts over the years to improve the situation.
Ms Parkes said they had discussed divorce in late 2005 but she was very concerned about the impact on her children who were still young.
I noted that Ms Parkes and Mr Irving did not attend any family or social gatherings as a couple.
I note that Ms N was not made available for cross-examination.
The affidavits of Ms G and Ms N may be evidence of what Ms Parkes said to each of them in 2009, but they do not constitute evidence that the parties separated in 2005.
I also note that the parties were not divorced until 2013 and that the Applicant for the divorce was the husband. The wife gives no explanation for her not having filed an application for divorce either in 2006 or at any time thereafter.
The question of what constitutes an ongoing marriage is often difficult to answer. Marriages come in many forms and are based on many individual arrangements. While most marriages involve sexual relations, some do not; while many involve joint finances, some do not; while some admit the possibility of concurrent relationships with others, some are vociferously opposed to that idea.
What is clear in this case is that between 2005 and 2011 the parties:
·remained living in the same house, and sleeping in the same room, if not in the same bed
·continued to operate joint accounts, although, like many couples, they also had sole accounts
·supported the children together
·refinanced the Property H property
·bought a motor vehicle
and
·purchased the Property P property in March 2011, albeit in the wife’s name[2], living there together until Mr Irving moved out in December 2011, although both parties accept that they were in fact separated by the middle of that year.
[2] It was the husband's evidence at trial that he was unaware at the time of purchase that the property had been registered in the sole name of the wife.
What is also clear is that Ms Parkes at least was unhappy in the marriage for many years, and I find that it is probably the case that she told her mother and a friend that she and Mr Irving either had separated or were considering doing so in the years before 2011.
I note that the evidence of Ms Parkes’ mother is that, when told the parties were only staying together for the sake of the children in 2005, she encouraged them to try to resolve their differences, and they certainly did not change their living arrangements at that time.
The issue of what constitutes a separation is usually discussed in the context of a divorce application. “Separation” is defined in s.49 of the Act as:
Meaning of separation
(1) The parties to a marriage may be held to have separated notwithstanding that the cohabitation was brought to an end by the action or conduct of one only of the parties.
(2) The parties to a marriage may be held to have separated and to have lived separately and apart notwithstanding that they have continued to reside in the same residence or that either party has rendered some household services to the other.
In circumstances like those of these parties, that definition is not particularly helpful as it leaves the question of whether parties are separated to the Court (as signified by the word “may” in sub-section (2)).
The case law in relation to separation states that there are three elements to the legal notion of separation:
·a party must have formed an intention to end the marriage[3]
·the party must have taken some action as a result of that intention or have acted as though the marriage were over[4]
and
·the party must have communicated his/her intervention to end the marriage to the other party, either directly or indirectly[5]
[3] Todd and Todd (No 2) (1976) FLC 90-008
[4] Ibid; Pavey and Pavey (1976) FLC 90-051
[5] Lane and Lane (No 1) (1976) FLC 90-055; Falk and Falk (1977 FLC 90-247
Ms Parkes says she formed the intention to separate in 2005 and that she told her mother of that intention at that time.
However, she does not appear to have taken any action on the basis of that intention for many years after that, and her business relationship with Mr Irving was not completely severed until August 2011, shortly after the date when both parties agree the separation took place.
When I consider the evidence above, and the legal issues as set out herein, I find, on balance, that the parties in this case separated in July 2011.
There are two legal arguments of the wife in relation to the doctrine of promissory estoppel and the meaning and impact of s.119 of the Family Law Act 1975 (“the Act”) which I will now deal with before proceeding.
2. The issue of Promissory Estoppel
Ms Parkes argues that when (she says) the parties decided to separate in 2005 they made an oral agreement as to the disposition of their property and in relation to parenting matters.
She says that she took action to her detriment in reliance on that oral agreement and therefore seeks to invoke the doctrine of promissory estoppel to prevent these proceedings being resolved other than in accordance with that oral agreement.
In support of that argument she refers to the case of W v G, a decision of the Supreme Court of New South Wales in 1996.[6]
[6] W v G (1996) 20 FamLR 49
That was a case where a same-sex couple were involved in disputes about child support and maintenance, the main issue being whether the defendant had a duty to maintain the plaintiff and the two children of the relationship.
It was in that context that the doctrine of promissory estoppel was raised, the plaintiff arguing that she had borne two children relying on a promise by the defendant that the defendant would support the plaintiff in providing for the needs of the children. Therefore, it was argued, the defendant was now estopped from denying a duty to maintain the children and the plaintiff.
Hodgson J accepted that argument and made orders that the defendant provide a certain sum to be used by the plaintiff towards the costs of raising the children.
There are two reasons why Ms Parkes’s submissions in relation to that doctrine must fail in this case.
First, the circumstances, facts and legal basis of W v G are so different to the current matter that it would be drawing a very long bow indeed to apply its findings to these proceedings for property settlement between a married couple under Part VIII of the Family Law Act 1975 (“the Act”).
Second, W v G was decided in 1996, four years before the Act was amended to include Part VIIIA.
Part VIIIA sets out the law relating to financial agreements made between married couples, and requires those agreements to be in certain form and for certain processes to have been conducted.
Section 90C of the Act governs financial agreements made during a marriage, and states as follows:
90C(1) If:
(a) the parties to a marriage make a written agreement with respect to any of the matters mentioned in subsection (2); and
(aa) at the time of making the agreement, the parties to the marriage are not the spouse parties to any other binding agreement (whether made under this section or section 90B or 90D) with respect to any of those matters; and
(b) the agreement is expressed to be made under this section;
the agreement is a financial agreement. The parties to the marriage may make the financial agreement with one or more people.
90C(2) the matters referred to in paragraph 1(a) are the following:
(a) How, in the event of the breakdown of the marriage, all or any of the property or financial resources of either or both of the spouse parties at the time when the agreement is made, or at a later time and during the marriage, is to be dealt with;
(b) the maintenance of either of the spouse parties:
(i) during the marriage; or
(ii) after divorce; or
(iii) both during the marriage and after divorce.
Section 90DA states that any financial agreement that is binding on the parties is of no effect until a separation declaration has been made.
Section 90G states as follows:
90G(1) subject to section (1A), a financial agreement is binding on the parties to the agreement if, and only if:
(a) the agreement is signed by all parties; and
(b) before signing the agreement, each spouse party was provided with independent legal advice from a legal practitioner about the effect of the agreement on the rights of that party and about the advantages and disadvantages, at the time that the advice was provided, to that party of making the agreement; and
(c) either before or after signing the agreement, each spouse party was provided with a signed statement by the legal practitioner stating that the advice referred to in paragraph (b) was provided to that party (whether or not the statement is annexed to the agreement); and
(ca) a copy of the statement referred to in paragraph (c) that was provided to a spouse party is given to the other spouse party or to a legal practitioner for the other spouse party; and
(d) the agreement has not been terminated and has not been set aside by a court.
As can be seen from the above, the requirements for a financial agreement to be binding on the parties are very clear:
·the parties must have made a separation declaration
·the agreement must be in writing
·it must state that it is an agreement made under section 90C
·the agreement must be signed by both parties
·the parties must have obtained independent legal advice before signing the agreement
and
·the legal practitioner providing that advice must sign a statement confirming that that advice has been given.
In this case, the wife seeks to rely on an oral agreement made between the parties in 2005 without any evidence of legal advice having been given to either of them.
Even if I were to find that such an oral agreement had been made in 2005, that agreement is not binding on the parties as it does not comply in any way with the provisions of s.90G of the Act, which must be strictly followed.[7]
[7] See Parker & Parker [2012] FamCAFC 33 per Murphy J
There is also some evidence in the wife’s affidavit material[8] that the parties discussed parenting and property matters in about August 2011, before the husband had physically left the family home, and that they exchanged emails in April 2012 in relation to reducing that discussion to writing, but the emails annexed to that affidavit, which are provided as evidence of an agreement between the parties at that time, could not be said to satisfy the provisions of s.90G in any way.
[8] Affidavit of the wife sworn 5 and filed 6 February 2014 paragraphs 70 to 72
I therefore reject the wife’s submission that the husband is estopped from seeking a settlement under Part VIII of the Act other than in the terms of any alleged agreement/s.
3. The issue of compensatory payments claimed under s.119
Ms Parkes also seeks “compensation” under her interpretation of s.119 of the Act for the following as “an alternative claim”:
·detriment caused me by my reliance on oral agreement;
·loss of assets due to husband significant cash withdrawals from (omitted) bank (business omitted) account intended for use to benefit family and which, I say constitute assets already in his possession;
·loss of assets due to husband’s gambling;
·loss of assets spent by husband in litigation being use of assets obtained pre-separation through unexplained drawings from (omitted) bank (business omitted), and Property H mortgage and savings from non-contribution to family needs (sic).[9]
[9] Written submissions of the wife filed 17 April 2015 page 10
Section 119 of the Act simply states as follows:
Either party to a marriage may bring proceedings in contract or in tort against the other party.
My research has failed to find any judicial decision about the meaning of s.119.
I interpret that section as allowing a spouse to file proceedings for damages against the other spouse in tort or contract in a court of competent jurisdiction such as a State District/County or Supreme Court.
It does not in my view allow a spouse litigant in this jurisdiction to claim in submissions that he/she is entitled to “compensation” from the other when his/her case has been specifically advocated for in the context of Part VIII proceedings, and arguments in relation to tort or contract (other than that in relation to promissory estoppel, which I have dealt with) have not been raised during the proceedings.
Nevertheless, if the wife is arguing that the Federal Circuit Court, in its Family Law jurisdiction, has an inherent power to make an order for damages, that argument too must fail.
In Abrams & Director-General, Department of Human Services (NSW)[10] the Full Court said the following:
In In the Marriage of McKay (1984) 59 ALR 117 at 123; (1984) FLC 91-573 at 79,633; (1984) 9 Fam LR 850 at 862 – 863 Strauss J said:
The Family Court has no general jurisdiction to award damages, which is the most usual remedy at law. Its power to deal with financial matters is by reference to principles which may be quite different from those applied in a “court of law and equity”. It has no general equitable jurisdiction. There is no general power to make declarations or to grant equitable remedies.
We recognise that the judgment of Strauss J in McKay (supra) has been the subject of some adverse comment (see Smith and Smith (No. 2) (1985) 64 ALR 227; (1985) FLC 91-604; (1985) 10 Fam LR 283 per Evatt CJ and Warby and Warby (2002) FLC 93-091; (2001) 28 Fam LR 443). Those adverse comments, however, relate only to issues dealing with the existence of an accrued jurisdiction in the Family Court of Australia and the powers available to the Court in the exercise of any accrued jurisdiction.
[10] [2007] FamCA 731; (2007) 37 Fam LR 449; (2007) FLC 93-335 paragraphs 58-60
The Full Court then went on to say that it could not find that the trial judge was in error in refusing to make an order for compensation in Abrams as there was no specific power for him to have done so.
In those circumstances, I will not make orders under s.119 for the wife to be compensated for the alleged “torts” or “contract breaches” of the husband.
4. The Alleged withdrawals from joint funds by the husband
The wife claims that the husband withdrew sums totalling $256,742 from the parties’ company accounts between 2005 and 2011.
Her case is that the parties separated in 2005, and therefore she considered these to be post separation withdrawals. However, I have found that the date of separation was in mid-2011, so any withdrawals from company accounts made between 2005 and 2011 were made during the marriage.
In her Trial Affidavit Part A[11], the wife says that those withdrawals “do not relate to normal living expenses such as mortgage; car loans; insurances; school fees, utilities; professional expenses; pharmaceutical expenses and repayment of credit cards.”
[11] Affidavit of the wife sworn 11 March 2015 at paragraph 44
At trial the husband tendered a document headed “EXPLANATION CASH WITHDRAWALS OF $254,741.83 during 2005 through 2011” with the subheading:
The attached ledger report was generated from the business entity “(business omitted)” (formerly “(omitted)”)
That document then sets out the following table:
| Cash drawings 2005 to 2011 as noted by Ms Parkes: | $254,741.83 |
FROM LEDGER: | |
| Cash purchases for business | $140,520.49 |
Therefore BALANCE TO EXPLAIN | $114,221 |
| These funds were applied to family needs, which translates to: | |
| Per year | $19,036.00 |
| Per month | $1586.33 |
| Per week | $366.07 |
The document then adds the following:
Comment
This $366.07 per week is less than what I need to survive living alone. The funds used for family needs were a supplement to other forms of purchasing, (such as by Credit cards) to feed, cloth (sic), health and other family expenses for a family household complement of 3 adults and 2 children, and one dog.
From my scanning of the 71 pages of the ledger printout headed “Director’s Private Funds, cash, Mr Irving and Ms Parkes”, it would appear that the vast majority of those monies were spent on donations to charity and a (country omitted) family holiday, and at supermarkets, petrol stations, car parks, department stores, car wash facilities, pharmacies, gift shops, hardware stores, stationery stores, and various other retail establishments.
In other words, the withdrawals do relate to common every day family expenses.
As those expenses were incurred during the course of the marriage, I do not see them as significant considerations in these proceedings.
5. The wife’s alleged failure to apply the rental income from the Property H property to that property’s mortgage loan
The husband also alleges that the wife received all income from the leasing of the Property H property after the parties moved to (omitted) in 2005, and that she did not apply that income appropriately to the mortgage on that property, thus causing the bank ultimately to take steps to foreclose on the mortgage.
In his affidavit sworn 21 January 2014, at paragraph 23(b), the husband states that it had been his understanding that the wife had been paying the mortgage on the Property H property from the rent received. He then goes on to say that in October 2013 he had received notification from the (omitted) Bank that the mortgage was in arrears, and annexed to that affidavit is a copy of a default notice issued by the (omitted) and (omitted) Bank stating that as at 23 October 2013 the loan was in default by an amount of $4779.09 and that the account balance in respect of the loan was $484,779.09. The account number specified in that letter is (omitted).
A document tendered at trial by the wife, consisting of a printout of (omitted) Bank account (omitted) headed “(omitted) loan” with the handwritten note “Property H” alongside that heading, shows direct credit deposits from “(business omitted).” between 28 March 2013 and 16 February 2015 totalling $39,539.02. The amounts deposited vary between $356.90 and $2093.46 and they were deposited at least every month and sometimes more than once a month.
Other documents in evidence before the court show that the sum of approximately $4060 was paid from the wife’s account to the Property H mortgage account between July 2012 and February 2013.
On the basis of that evidence I find that at least between July 2012 and February 2015 the wife was making regular payments against the mortgage loan on the Property H property.
However, the wife had withdrawn a very large sum from that mortgage account in December 2011, which might explain how the loan had fallen into arrears by October 2013.
This evidence does not explain the bank taking steps to foreclose on the mortgage in 2015, and there does not appear to be any detailed evidence before the court in relation to that foreclosure.
In his written submissions the husband states that the foreclosure is the result of the wife unilaterally withdrawing $90,000 from the mortgage redraw facility, which then rendered the rent insufficient to meet the mortgage demands.
However, the withdrawal was made in December 2011 or January 2012, and the bank did not write to the parties about the loan being in arrears until October 2013.
In the absence of further evidence it would therefore be mere speculation on my part to posit any explanation for how that mortgage was or was not paid prior to July 2012, but the bank’s letter of 23 October 2013 indicates that on that day there was a shortfall of $4779.09 in relation to the loan repayments. That is, it would appear that the deposits made by the wife to that mortgage loan up to that date had been insufficient to cover the requisite instalments.
On the basis of the evidence before the court I cannot find on the balance of probabilities that the wife received the income from the Property H property and failed to apply that income to that property’s mortgage loan. All I can find is that she withdrew a significant sum of money from the loan’s redraw facility in December 2011 or January 2012, that on 23 October 2013 the mortgage loan was in arrears in the sum of $4779.09, and that the documents tendered by the wife do not show a lump sum mortgage payment in that amount after that date. They do however show regular payments from that date to 16 February 2015.
6. The “global” or “asset-by-asset” approach
The husband says that the court should take a “global approach” in this case. That is, the court should take the marital property as a whole and decide how that whole ought to be divided between the parties.
The wife says that an “asset-by-asset approach” is more appropriate in the circumstances of this marriage. That is, the court ought to consider each asset separately and decide how it ought to be divided between the parties.
There are, of course, advantages to each party in the approach they advocate.
The law in relation to this issue can be summarised as follows.
In G & G[12], the Full Court of the Family Court of Australia (“the Full Court”) said that “the determination of a claim under s.79 may proceed on an asset by asset basis or on a global view taking all the assets into account.”
[12] (1984) FLC 91-582
In Norbis[13], the High Court said, in referring to this issue:
In the exercise of his (sic) discretion (the primary judge) may take a global approach in making the order, or he (sic) may proceed on an item by item basis in the division of the property between them; the section confers a discretion upon the court which, provided the requisite matters are taken into account, does not dictate any particular method in the formulation of an appropriate order for the alteration of property interests.
[13] [1986] HCA 17; (1986) 161 CLR 513
I am conscious that the Property P property was registered in the sole name of the wife, with the deposit being paid from funds obtained by Ms Parkes from her compensation payments, but that is an issue for consideration when I look at the parties’ contributions to their property. I do not consider it appropriate to effectively quarantine that property and consider it separately from other assets on the basis of that fact.
In this case, where the parties were married for almost 30 years, where they bought property together and conducted a business together, and where they have raised children together, it is in my view appropriate to decide this settlement using a global approach.
I turn now to the substantive issues in this matter.
B. Is it just and equitable in all the circumstances to alter the property interests of the parties?
Section 79(2) of the Family Law Act 1975 (“the Act”) states that a court may not make an order altering the property interests of parties to a marriage unless it is satisfied that it is just and equitable to do so.
In Stanford v Stanford[14], the High Court said the following at paragraph 42:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and the wife.
[14] Stanford v Stanford (2012) FLC 93-495
In Bevan & Bevan the Full Court said that the circumstances described in the above passage of the Stanford judgment “encapsulate the vast majority of cases”[15] .
[15] Bevan &Bevan [2013]FamCAFC 116 paragraph 70
In this case the parties were married for 27½ years. They acquired property together and are now separated. Therefore there is not and will not be common use of their property in the future.
As there is nothing in this case to distinguish it from “the vast majority of cases”, despite the wife’s submission that “the present case is not a common or traditional scenario”[16], I find that it is just and equitable in all the circumstances under s.79(2) to consider an alteration of the parties’ property interests in this case.
[16] Wife’s written submissions filed 17 April 2015 page 14
C. What are the property interests of the parties and what is their value?
The assets of the parties may be set out as follows:
Property P property
Property H property
The husband’s motor vehicle
The wife’s motor vehicle
The husband’s shares
The husband’s superannuation
Their joint liabilities are a matter in dispute, but can be said to be:
The mortgage over the Property P property
The mortgage over the Property H property
The wife’s tax debt for the 2010 year
The wife’s credit card debt
The wife’s personal loan
The husband’s credit card debt
Property P property
A major issue in this matter, and an issue that took up considerable time at trial, was the value of the Property P property.
That property was purchased in 2011 for $900,000 and was registered in the wife’s name. Its purchase price was met by a deposit of $250,000 from the wife’s trauma insurance payout and a mortgage loan of $720,000. It currently carries a mortgage liability of about $620,000.
It is in this property that the wife and children and the maternal grandmother live, and the wife seeks to retain it in this settlement. It is the wife’s evidence that she has paid all mortgage payments and other outgoings on the Property P property since separation in June 2011. That evidence does not appear to be contradicted by the husband.
Essentially the question of the value of the Property P property came down to the evidence of two certified valuers, Mr R (“Mr R”) and Mr C (“Mr C”).
Mr R, who was called as a witness for the husband, and who has some 30 years of experience in the field, stated in his second sworn valuation dated 17 March 2015 that the Property P property’s value is $910,000.
He had provided a previous valuation report dated 29 January 2014 which valued the Property P property at $880,000.
He based both valuations on a comparison of recent sales in the same estate and area, and noted that:
Property P is within the (omitted) Real Estate of (omitted), being a prestigious residential estate characterised by Australian native trees and gently undulating topography. Treed parkland with a lake is in proximity of the subject property being at the eastern end of Property P.
The subject property is located on the northern side of Property P, which provides northern orientation into the backyard.
This location in (omitted) is subject to periodic aircraft flying over with associated aircraft noise[17].
[17] The valuation report of Mr R dated 17 March 2015 page 4
Later in the report, under the heading “Market Commentary”, Mr R makes the following comments:
Following a period of general decline in property values since the height of the residential boom in mid-2010, market value stabilised in late 2012 and generally increased during 2013, 2014 and to date during 2015.
Market demand remains relatively firm to house properties in (omitted).
Growing strength of market demand and price increases in 2013 and 2014 were due primarily to the low interest rates combined with sustained consumer confidence.
Interest rates in 2015 continue to encourage the purchase of real estate. The Reserve Bank of Australia lowered further the official cash rate to 2.25% on 3 February 2015. This is the lowest interest rate since the late 1950s[18].
[18] Ibid page 6
Mr C, who was the wife’s witness, and who has been a certified valuer for about 15-20 years, valued the Property P property at $825,000 in his sworn valuation dated 25 February 2015.
He too had prepared an earlier valuation to the parties, dated 22 January 2014, in which he valued the property at $890,000. That valuation was not filed with the court.
He too based his valuations on recent local sales, but stated that the existence of a newer estate on the other side of a nearby major road meant that the value of the Property P property was diminished. As a result of that, and aircraft noise resulting from the property being under the flight path to Tullamarine Airport, he said that the value of the Property P property was less at the time of that valuation than at the time of his previous valuation conducted in January 2014.
In his report dated 25 February 2015, Mr C says the following:
It has been brought to our attention that the subject property is significantly affected by aircraft noise, due to low flying jet planes approaching and departing Melbourne airport. Airservices Australia issued a report on (omitted) 2013 (which is attached to appendix 4), highlighting significant noise effects to the local area.
From a valuation perspective, we note that property values for high-quality homes tend to hold fair market value however there is now a significant threat as the estate (in which the subject is located) gets older, market values will drop in the local area over on coming years due to the impact of nearby developing estates. This is currently being experienced in the local area. Sales evidence over the last 12 months indicates the market has softened already. This is a typical scenario when new estates are currently under development in nearby locations. The subject property is now approximately 11 years old, as with other properties in the estate. The combination of noise pollution and the estate getting older is likely to have a long-term impact on property values in the area.[19]
[19] The report of Mr C dated 25 February 2015 page 3
Both valuers gave evidence at trial.
Mr R, who was aware of both Mr C’s valuations but who had, before trial, only seen that dated 25 February 2015, confirmed his view that the Property P property was worth $910,000, and stated that he thought that to be a conservative valuation in light of comparable sales in the area. In fact, he said he believes the Property P property is worth “at least the low 900,000s and maybe the mid-900,000s”.
He was specifically asked whether he thought there were any errors in Mr C’s second report, and, quite apart from some disparities he found in measurements of the property between his report and Mr C’s, he was critical of several aspects of Mr C’s report.
Those criticisms included the following points:
·He did not understand how Mr C had come to the conclusion that market values will drop over coming years because, says Mr R, it is impossible to forecast how values will move.
·He disputed that sales over the past 12 months had shown that the market had “softened”. He said that his comparable sales had all risen in value over that period.
·Three of the five comparable sales referred to in Mr C’s report were “a bit old” having been sales from April, June and September 2014.
·Mr C’s sales evidence did not include the sale of Property G (“the Property G property”), which had sold for $900,000 on 20 December 2014. Mr R said that was the most recent comparable sale because it was a well-appointed property in the same estate as the Property P property.
·The methodology by which Mr C had arrived at the land value of the Property P property was flawed in that he had analysed sales of improved properties when there was vacant land available for comparison. Mr R thought that was an unacceptable practice. That is, Mr C had valued the land by subtracting what he saw as the building value from the whole property value. Mr R said he had never seen a certified practising valuer conduct a land evaluation in that manner.
·Mr C’s valuation appeared to be based on his view that properties on this estate were reducing in value because they were ageing. Mr R disputes that view.
·Unlike Mr R, Mr C had not physically looked at the properties upon which his comparable sales evidence was based, but had looked at those sales on computer.
It was Mr R’s evidence that he and Mr C had met to confer and that they had agreed that the improvements to the Property P property were worth $475,000. It was his further evidence that he had looked directly at vacant land sales in the area, and his view was that Mr C was “plainly wrong” in his valuation of the land.
It was Mr R’s further evidence that both the Property G property and the property at Property L (“the Property L property”) had been sold in 2011 and again in either very late 2014 or early 2015. Only the Property L property was mentioned in Mr C’s second report. Mr R noted that the parties had bought the Property P property in 2011 for $900,000 and that therefore the Property G and Property L properties were very important as comparable sales over that similar period.
The evidence of Mr R in relation to his valuation and the methodology used for the basis of that valuation was not shaken under cross-examination.
He was adamant that the value of the Property P property was not affected by the proximity of the newer estate nearby, saying that it was an irrelevant factor because valuers compared “like with like”. The real issue in this case, he said, was what the comparable sales within the estate in which the Property P property is located were.
He conceded that he had not inspected the property for the purposes of his own second report, having assumed that it was in the same condition as it had been at his previous inspection. He further conceded that his valuation might change if the property were to be found to be in need of “substantial repairs” or if there were “major structural damage” to the property. He was unaware of any change to the condition of the property since his previous inspection.
Mr C’s evidence under cross-examination at trial was that he too had not inspected the property before preparing his second report in February 2015, but had conducted what he called a “desk top” valuation, using the internet and a particular real estate computer program to inspect the property virtually. He too assumed that the property was in the same condition as it had been when he had inspected it a year before. He also conceded that he had “cut and pasted” the report based on his previous valuation of January 2014, a process he described as “a logical work practice”.
He further stated that he had also conducted the sales comparisons by virtual inspection from his office.
While Mr C was prepared to concede that his valuation might rise somewhat as a result of the sale of the Property G property, which he had not known about, he was not prepared to compromise his view in relation to the existence of the newer estate in close proximity to the Property P property, or the effect of the property being under the flight path.
In the witness box, Mr R was calm and certain in his evidence, while Mr C appeared somewhat defensive and excitable.
For example, when asked by counsel for Mr Irving to confine himself to answering his questions, Mr C replied:
No, you’re trying skulduggery….
Further, when certain discrepancies were pointed out between him and Mr R in terms of their measurements of the property and the building on it, or its distance from the centre of Melbourne, Mr C became somewhat flustered and did not appear willing to accept that any errors might have been his.
I mention this not to affirm the measurements provided by Mr R, but simply to note the demeanour of Mr C in the witness box.
Under cross-examination, Mr C could not explain why other properties sold in the same estate had recently risen in value when they too would have been affected by the existence of the nearby newer estate and the flight path. Nor could he explain why other properties in the estate had increased in value while the Property P property had decreased.
Having confirmed that his valuation was based on comparisons of sales in the area he was referred to the Property G property, whose value had increased between 13 September 2011, when it had been sold for $620,000, and 27 February 2015, when it had been sold for $755,000. Mr C’s comment was as follows:
It’s really dangerous to try to use older valuations when you’re actually doing an assessment, a valuation. When you start to reflect like that…
And later, when it was pointed out that the increase in value in that property was about 22%, he said:
But the thing is, how big is it, number 1 is – you’re really dealing in dangerous territory – what we need is like-for-like, properties of similar sized land and similar sized homes, to be able to extract out what is a fair-minded valuation.
He said further that a property’s particular specifications, what he called “the internals of this property”, would affect its value.
However he appeared unable to explain why such matters were so important and appeared flustered when he realised the increase in value in that property between 2011 and 2015.
It was Mr C’s evidence that he had not read Mr R’s latest valuation report, and when it was put to him that the court could not accommodate an adjournment for the three hours he said would be necessary for him to do so, he said:
I can shoot from the hip and give you an opinion on valuation.….All right. Settle in the mid-eights.… That’s it…. My gut feeling is telling me, as a valuer, in an attempt to be absolutely impartial, its mid-eights. Mid-eights, somewhere in the mid-eights. You know, that’s it.
When asked if he was now revising his valuation he said:
I would – I would revise it, I would be quite happy to do so. But taking it any further than 850, no, I would be uncomfortable. I would be uncomfortable. That’s – that’s shooting from the hip.
Overall, taking into account the substance of his evidence and, to a lesser extent, his style of presentation, I found his evidence less convincing than that of Mr R.
For all the above reasons, I accept the evidence of Mr R and will take the value of the Property P property at $910,000 for the purposes of these proceedings.
It is not in dispute that there remains a debt of $620,000 attached to the mortgage over the Property P property.
The Property H property
The Property H property was purchased as vacant land in 1986 at a purchase price of $43,500 and registered in the joint names of the parties. About a decade later a house was constructed on the property at a cost of about $180-200,000, those costs being met from the net sale proceeds of the parties’ first matrimonial home in Property N in the sum of about $60,000, and the remainder being met by way of mortgage loan from the (omitted) Bank.
The Property N property had been owned unencumbered by the husband as vacant land at the time of the marriage and the parties had built their first home on it in about 1990, subsequently living there for about ten years.
The parties lived rent-free with the wife’s parents while the Property N house was being built.
At about the time of the construction of the house on the Property H property, the wife’s mother, who had recently been widowed, sold her home and came to live with the parties at Property H. The wife’s mother advanced the wife the sum of $50,000 from her inheritance which was applied towards the building costs at the Property H property.
In 2005 the parties moved to Melbourne and leased a property in (omitted), where they stayed until 2011. The Property H property was leased out at that time and has been used as an investment property ever since, its rental income being used to service its mortgage, and I have made findings about that matter in paragraph 140 above.
The Property H property was placed on the market for sale pursuant to a court order made by consent on 17 November 2014.
It is the husband’s evidence that an offer of $600,000 was made to purchase the property in January 2015, but that the wife had not consented to the sale and it had fallen through.
The parties apparently received a further offer to purchase the property at $569,000 later in 2015, and at the time of trial hoped to sell at that price.
I will therefore value the Property H property at $569,000 for the purposes of these proceedings.
The husband claims a share of the disparity in the two offers as part of these proceedings, saying that disparity is due to the wife’s conduct. I will return to that issue later in these Reasons.
There is a mortgage debt over the Property H property of $500,000.
The motor vehicles
Each of the parties currently owns a motor vehicle and while there are no sworn valuations of either vehicle before the court, the husband did tender a document marked “Valuation Certificate” printed from the website RedBook.com.au in relation to his vehicle. Ultimately, their respective values are not substantially disputed. The wife’s vehicle is worth $23,500 and the husband’s $25,290.
The husband’s shares
The husband holds shares which the parties agree are worth about $2775.
The husband’s superannuation
The husband’s superannuation is valued at $83,274.
It was accrued predominantly during the marriage and as that marriage lasted 28 years or so I will include it in the property pool as though it were an asset of the marriage.
The husband’s inheritance
It was not in dispute between the parties that the husband received an inheritance from his late father’s estate in October 2013, some two years after separation.
In those circumstances, and in the absence of any compelling evidence that Ms Parkes had played a significant role in the care of Mr Irving’s father during the marriage, the inheritance will not be considered as an asset of the marriage.
However, its current value is certainly to be considered as a financial resource in the husband’s hands, and it will therefore be considered later in these Reasons.
The wife’s compensation payments
It is common ground between the parties that in January 2011 the wife received a payment of $275,625 as a result of a trauma insurance claim made in relation to her cancer diagnosis in 2010.
That first payment was made in compensation for the trauma of the cancer diagnosis, and subsequent surgery and treatment, she suffered in 2010.
As I have already found that the date of separation was mid-2011, the trauma for which that money was compensation was suffered during the marriage. I therefore consider those funds to have been an asset of the marriage.
However, they were almost entirely contributed by the wife to the Property P property and therefore currently form part of the value of the Property P property. It would be “double dipping” to consider those funds as a separate asset and I will therefore not include them in the property pool.
As previously stated it is the wife’s evidence that she applied $250,000 of that sum towards the purchase of the Property P property. That evidence is not contradicted by the husband.
In August 2012 the wife received the sum of $563,483 by way of total and permanent disability payment (“TPD payment”) as a result of insurance held with (omitted) (“(omitted)”). At about that time she also received a further gross TPD payment of $57,000.
The TPD payments totalling $620,483 were total and permanent disability insurance payments based on her chronic liver disease, and it was her uncontroverted evidence that their purpose was to compensate her for the loss of future earnings.
The TPD payments having been made in August 2012, more than 12 months after separation, I do not consider them to be part of the parties’ assets for the purpose of these proceedings. Those funds remaining from them will nevertheless be considered as a financial resource in the hands of the wife when the matters set out in s.75(2) are considered.
The husband’s credit card debt
In his written submissions the husband says that the sum of $17,599 was owing on his credit cards at the time of separation. However, much of that debt was incurred after separation in establishing his new household. He has set out that expenditure in a document tendered to the court, and on that evidence the total debt incurred after the date of separation in December 2011 is $8087. I do not consider that expenditure to be a joint debt. I will therefore consider the husband’s credit card debt at the date of separation to have been $9512 ($17,599 minus $8087).
The wife’s personal loan
The wife claims that her personal loan, which was incurred for the purposes of purchasing a new motor vehicle, ought to be considered a joint debt. The amount of that debt is $46,000 and is owed to (omitted) Finance.
That vehicle is a Volvo (omitted), and the contract of sale document in relation to its purchase, tendered to the court at trial, is dated 20 December 2012, which means that it was purchased, and the debt incurred, post separation.
I note that the sale contract states that the trade-in the wife received for her previous vehicle as part of that transaction did not cover the debt she owed on that vehicle, and that in fact there was a $6317 shortfall.
The wife’s loan therefore will not be considered to be a joint debt of the parties, but rather as one of the factors to be considered under s.75(2) of the Act.
The wife’s credit card debt
The wife had credit card debt over two credit cards of $7100 at the date of separation. I will include that sum as a joint debt in my assessment of the value of the property pool.
The wife’s tax debts
As I have already stated when considering evidence about the wife’s tax debt of $12,800 in the context of the date of separation, it is not disputed between the parties that in the 2009 – 2010 financial year the family company made a profit which was distributed to the wife thus creating a tax debt to her of about $15,000. At the time of trial that debt had been reduced to $12,800.
As the debt was incurred during the marriage, it will be considered as a joint debt when I am making the decision about the overall property settlement.
The wife also sought to include her 2013 tax debt in the sum of $3,692 as a liability of the marriage, but as that was incurred after separation on either party’s evidence it is not part of the pool of assets to be distributed in these proceedings. It will, of course, be considered under s.75(2)(b) of the Act.
Therefore, the interests in property to be divided between the parties can be set out thus:
| Assets | Owner | Value |
| Property P property | Wife | $910,000 |
| Property H property | Joint | $569,000 |
| Motor Vehicle | Wife | $23,500 |
| Motor Vehicle | Husband | $25,290 |
| Shares | Husband | $2,775 |
| (business omitted) | Wife | Uncertain |
| (business omitted) | Husband | Uncertain |
| TOTAL Assets | $1,530,565 | |
| Liabilities | Owner | Value |
| Mortgage: Property P property | Joint | $620,000 |
| Mortgage: Property H property | Joint | $500,000 + CGT and selling costs of about $80,000 |
| Credit Cards | Wife | (omitted) $6,600 |
| (omitted) $1,000 | ||
| 2010 tax debt | Wife | $12,800 |
| Credit card debt | Husband | $9,512 |
| TOTAL Liabilities | $1,229, 912 | |
| Net Assets not including superannuation | $300,653 | |
| Superannuation | Wife | Nil |
| Husband | $83,274 | |
| Total property including superannuation | $383,927 |
D. If it is just and equitable to make orders altering the parties’ property interests, what were the contributions of the parties to the acquisition, maintenance and improvement of their property?
The consideration of this issue is mandated by s.79(4) of the Act, which sets out the factors that the court must take into account when deciding what order (if any) should be made under section 79.
Those matters include:
·The financial and non-financial contributions made directly or indirectly by a party to the marriage or a child of the marriage to the “acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them”
·The contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage including any contribution made in the capacity of homemaker or parent
·The effect of any proposed order upon the earning capacity of either party to the marriage
·The matters set out in sub-s.75(2) in so far as they are relevant
·Any other order made under the Act which affects a party to the marriage or a child of the marriage
and
·Any child support that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
The husband’s contributions
At the commencement of the marriage Mr Irving owned the property at Property N, which was then vacant land, and for which he had paid $10,000 some years prior. His evidence is that at the time of the marriage that land was worth about $20,000.
That property was later sold by the parties after they had built a house on it and lived there for some years, and the sale proceeds were used for joint purposes, namely the acquisition of the property at Property H.
During the marriage the husband’s evidence is that he worked both for the parties’ company and other employers, and that he applied his income and efforts for the benefit of the family.
It is his evidence that his work for the company, and his care of the children when he was available, assisted the wife’s business by allowing her to gain further qualifications.
The wife is very critical of several aspects of Mr Irving’s behaviour during the marriage, particularly his performance as the bookkeeper of the family company’s books.
She says effectively that he was an incompetent bookkeeper and that his contribution in that role to the family company and therefore to the party’s finances was ultimately a negative contribution.
She provided evidence in the form of an Affidavit from Ms A, who has been employed by Ms Parkes as her bookkeeper since the husband relinquished that role in 2008, and Ms A also gave evidence at trial.
Her evidence was that Mr Irving had not willingly relinquished the role and that he had made the changeover somewhat difficult.
Ms A said that Mr Irving’s personal style was to be meticulous in his record keeping to the extent that he kept both a full set of electronic records and a full set of hard copy receipts. That is, he would keep all receipts in hard copy form, but would also scan each receipt and then save the scanned copy[20].
[20] I note that Mr Irving denied in oral evidence that he had scanned every receipt but accepted that all receipts had been kept
Under cross-examination by Mr Irving’s counsel, she agreed that his record-keeping could be described as “obsessive” and that it was much more than was necessary.
She confirmed that she was able to perform in a seven or eight hour working week what Mr Irving had performed working full time.
Even if I accept the truth of all Ms A’s evidence and that of the wife in relation to the husband’s book-keeping duties, I cannot find that his behaviour was such as to amount to a negative contribution to the assets of the marriage. No valuation has been provided for the business that has evolved into (business omitted) and there is no evidence that the current property has been negatively affected by the husband’s book-keeping activities.
I therefore accept that during the marriage the husband worked and applied his income for the benefit of both the wife’s business and the family.
The wife claims further that the husband had withdrawn cash from the parties’ business account between January and May 2011 in the sum of $11,800 and she seeks to have those withdrawals taken into account in these proceedings.
As that period was during the marriage, and I have already decided not to take those withdrawals into consideration as forming part of the property pool, I do not consider them to have been a “negative contribution” to the parties’ property.
The wife adduced evidence about a chain of purchases of motor vehicles the parties had acquired during the marriage and sought to present that evidence as evidence of the husband’s liability for a debt.
It was her evidence that the parties had purchased a Toyota Land Cruiser registration number (omitted) (“the Land Cruiser”) in 2001 acquiring finance of $114,490 to do so.
She says that the Land Cruiser was initially financed through (omitted) Finance and later refinanced by the parties drawing down on the mortgage over the Property H property in mid-2004. The amount of that refinancing was $63,675 according to documents annexed to the wife’s trial affidavit Part A.
When that vehicle was sold by the husband post separation, the debt remained as part of the debt secured by the Property H mortgage.
The wife claims that the husband used the Land Cruiser as his personal vehicle during the marriage, although it was registered in the name of (business omitted) for tax purposes.
Even if that were true, the vehicle was purchased as a result of a joint decision by the parties and who drove it at particular times is not a relevant consideration.
The balance sheet for (business omitted) as at 20 January 2012, which is annexed to the wife’s trial affidavit Part A, shows a debt for “Toyota Landcruiser (omitted)” in the sum of $73,152.42. That sum had not changed for several years, as evidenced by the balance sheet for the wife’s company at 20 January 2008.
In those circumstances, where the debt is part of the Property H mortgage, which was accrued during the marriage by decisions of both parties, and where both parties are liable for the Property H mortgage debt, I will not make orders to change that position in relation to the loan extension taken out for the Land Cruiser.
The wife’s contributions
The wife had minimal assets at the beginning of the marriage.
Her evidence, accepted by the husband, is that she worked and studied diligently in order to establish and maintain her (business omitted) and that her personal exertion in that (business omitted) was the main source of the family’s income until her diagnosis of major liver disease was made in 2009.
Therefore I find that the wife too worked and applied her income for the benefit of both her business and the family.
Upon receiving her lump sum TPD payments in 2012 she applied $250,000 to the purchase of the Property P property, and it is not disputed that she has contributed all mortgage and ancillary expenses to that property since separation in mid-2011.
It is her evidence that a further $56,000 from those monies was later deposited in reduction of the mortgage over the Property P property, and that she repaid her mother a loan of $30,000. I note that the husband denies the payment to the wife’s mother was for a loan, but I am not in a position, after hearing evidence from both parties as to the nature of that payment, to make any finding in that regard.
The wife’s evidence is that she then invested the remainder of the TPD payments in term deposits, and later in a mortgage offset account against the Property P mortgage.
In her written submissions Ms Parkes says she has approximately $360,000 remaining of those monies, having made all mortgage payments and other outgoings on the Property P property since final separation in 2011.
As already stated, while those payments, and the remainder of them, are not considered part of the property pool to be divided between the parties, they will be considered as a financial resource in the hands of the wife.
The husband alleges that in December 2011, several months after separation, the wife drew down the sum of $90,000 from the mortgage facility attached to the Property H property.[21]
It is almost trite to say that unless parties to a marriage are significantly wealthy, it will be difficult for them to sustain the same standard of living after separation that they enjoyed during the marriage.
These parties are not wealthy, and while the wife currently has a greater gross income than the husband, her income in the form of child support will cease when Y turns 18 in about three years’ time, her regular income from her insurance will cease by the time she turns 65, and her carer’s allowance will last only for the remainder of her elderly mother’s life.
She is currently supplementing her income from the remainder of her TPD payments in order to pay the mortgage on the Property P property. It is likely that when those funds are spent, she will have to sell the Property P property as she will be unable to meet those payments. Her planning in that regard has meant that the reserve payments are likely to last at least until Y leaves school.
As previously stated, the husband lives in rented accommodation and is unlikely to be able to afford to purchase a property in any close proximity to the city of Melbourne as a result of these proceedings. Indeed, it is possible that he may find it difficult to obtain funding to purchase property at all, which would mean he would need to rent well into the foreseeable future.
The wife currently owns the Property P property, but will need to make a payment to the husband as a result of these proceedings. Depending on her ability to use part of her compensation payments, or to borrow against her equity in that property, that might mean in the short term that she will need to sell the Property P property and find alternative accommodation for herself, her daughters and her mother. She will almost certainly be forced to sell the Property P property in the future when her TPD payments run out.
She is likely to be able to afford to purchase a property in the Melbourne metropolitan area, albeit that she may need to move from the (omitted) area and live in smaller accommodation.
Section 75(2) (h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
This is not a relevant matter in these proceedings.
Section 75(2) (ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
While there is some evidence from the husband that he has struggled financially since separation and that he has been forced to borrow money from friends, and the evidence before the court shows that if she is to retain the Property P property, the wife will carry considerable debt, there does not seem to be any cogent evidence that any order I make for a payment from the wife to the husband will have any effect on the ability of any creditor of either the wife or the husband to recover that creditor’s debt.
Section 75(2) (j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
Both parties underwent courses of study during the marriage, during which time they were supported by joint funds. Both therefore have supported the other’s earning capacity equally.
I have already found that the contributions of the parties to the income, property and financial resources of the other parties should be divided as to 60% to the wife and 40% of the husband.
Section 75(2) (k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
This was a marriage of more than 28 years duration. Both parties underwent courses of study during the marriage, the husband undertaking various course and completing a degree in (course omitted), while the wife obtained qualifications in (qualifications omitted).
I do not consider that the duration of the marriage has affected either party’s earning capacity.
Section 75(2) (l) the need to protect a party who wishes to continue that party’s role as a parent; and
Both children live with the wife and spend time with the husband. It is clear that the wife will have the major care of the children well past their respective 18th birthdays, although it is also clear that the husband will assist financially in the form of child support until those birthdays, and possibly beyond.
Section 75(2)(m) if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
There is no evidence that either party is cohabiting with another person.
Section 75(2)(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
I have already stated that the wife will need to make a payment to the husband as a result of these proceedings. The quantum of that payment will determine whether the wife is able to retain the Property P property, and is therefore a matter to be considered here, although it must be said that this will not be the determinative factor.
Section 75(2)(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
This is not a relevant consideration in these proceedings.
Section 75(2)(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
The husband is currently paying child support to the wife as assessed by the child support agency.
However, he has made application to this court for a departure order in relation to that assessment and the outcome of that application will be taken into account in relation to his future obligations to pay child support.
Section 75(2)(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
There is no other fact or circumstance which, in my view, the court needs to take into account to effect a just and equitable property settlement between the parties.
Section 75(2)(p) the terms of any financial agreement that is binding on the parties to the marriage; and
There is no financial agreement that is binding upon a party to the marriage.
Section 75(2) (q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
There is no Part VIIIAB financial agreement that is binding on a party to the marriage.
Conclusion as to Section 75(2) factors
When all the above factors are balanced against each other I find that it is appropriate to adjust the contribution-based entitlements of the parties so that a 3% weighting is applied to the wife’s entitlement because of her health issues, her lack of working capacity, and the fact that most of her regular income will cease once she turns 65.
Had the wife not had the benefit of the remainder of the lump sum payments she received, that weighting might have been greater.
Therefore, the outcome of the considerations mandated for consideration under s.79 is that the net property of the parties should be divided 63% to the wife and 37% to the husband.
F. In light of the above findings, what orders ought to be made to effect a just and equitable settlement between the parties?
Overall Settlement
The net property pool is worth $383,927 including the $83,274 of superannuation entitlements held by the husband.
As I have decided to consider this matter on a global approach, and the marriage was a relatively long one, I will consider the husband’s superannuation as part of the general property pool.
If the wife receives 63% of that pool, she should receive property and financial resources worth $241,874.
The husband would receive 37% of the property and financial resources worth $142,053.
The wife currently owns the Property P property worth $910,000 but subject to its mortgage of $620,000, a net equity of $290,000.
She also owns a motor vehicle worth $23,500, bringing her total current property for the purpose of this settlement to $313,500.
The husband currently owns a motor vehicle worth $25,290 and shares worth $2775, a total of $28,065. In addition to that property he has superannuation entitlements of $83,274. His total property and financial resources are therefore worth $111,339.
Therefore, in order for the husband to receive $142,053 the wife would need to pay him the sum of $30,714 ($142,053 minus $111,339).
The debts of the marriage, in the form of credit card debts and the 2010 tax debt, amount to $29,912. The parties are equally liable for those debts and should therefore each pay the sum of $14,956 towards them.
The reality is that the wife will have to pay the debts in her name (the tax debt and her credit card debts) which amount to $20,400 and the husband will pay his credit card debt of $9512. When those sums are adjusted, the husband “owes” the wife $5444 ($14,956 minus $9512).
When that $5444 is deducted from the $30,714 that the wife ought to pay the husband, the result is a payment from the wife to the husband of $25,270 and I will make orders in those terms.
The parties will otherwise retain all property currently in their possession.
How the Property H property is to be settled between the parties
The position regarding the Property H property is far less certain. It has been valued for the purposes of these proceedings at $569,000 with a mortgage liability of $500,000. That is, there is a net equity of $69,000 in the Property H property.
The husband claims that the parties received an offer to buy the Property H property at a purchase price of $600,000 in January 2015 but that that sale fell through because of the failure to act by the wife. He claims a share of the $31,000 shortfall in the property’s value which he attributes to the wife.
The Property H property was placed on the market for sale in late 2014 pursuant to orders made on 17 November of that year.
The only mention of the husband’s claim is in a document filed before trial found in the husband’s Case Summary Document filed on 10 March 2015. That mention is set out as follows:
| September 2014 | Wife issues an Application in a Case returnable on 17 November 2014, seeking orders, inter-alia, for the sale of the investment property. The husband agrees and Orders for the sale are made in this Honourable Court on 17 November 2014. |
| November / December 2014 | Investment property placed on the market for sale with (omitted) Real Estate of (omitted) |
| Early 2015 | Via (omitted) Real Estate, the parties receive an offer to purchase the investment property from an arms-length purchaser for $600,000. Husband immediately confirms his instructions to (omitted) Real Estate that he is agreeable to a sale on these terms. |
| 17 January 2015 | Real estate agent makes a written request to the wife, seeking her instructions in relation to the offer to purchase the investment property for the sum of $600,000. |
| 24 January 2015 | Wife finally confirms her advices (sic) to accept this offer on the afternoon of 24 January 2015. |
| 30 January 2015 | (omitted) Real Estate Agent advises the parties that the proposed sale of the investment property has fallen through, as the purchasers had found alternate property while the wife was considering their offer of $600,000. |
The parties advised the court at trial that while the bank was in the process of foreclosing on the mortgage, they were confident that they would be able to sell the property themselves for $569,000 and that that sale was imminent.
In his written submissions, the husband’s lawyer seeks that any debt or profit from the forced sale of the property be borne equally between the parties.
The husband’s final affidavit filed with the court was sworn on 13 November 2014, before the order for the sale of the Property H property had been made.
No mention of this issue was made during the husband’s oral evidence at trial, either in his Evidence-in-Chief, or during his cross-examination by the wife.
I can find no mention of the offer set out in the husband’s Case Summary Document or in any of the exhibits tendered in evidence at trial.
That is, there is no admissible evidence at all before the court that such an offer was made, let alone exactly when it was made, or whether the alleged seven days between the Real Estate Agent making the written request to the wife and her acceptance of that offer was unreasonable.
The evidence before the court shows that the sale of the Property H property will attract capital gains tax of about $70,000. That liability would account for any equity held in the property, and it is therefore more than likely that the parties will be left with an overall shortfall from the sale of that property once vendors’ commissions, rate adjustments and the like have been deducted from the sale price. I have allowed for selling costs of about $10,000 in my calculation of the pool.
That is, the parties’ equity in the Property H property is negative if it sells for $569,000.
In all those circumstances, I cannot find that the wife ought to compensate the husband for any alleged failure to accept the alleged offer, and I decline to make any orders in relation to that issue.
On the basis of what evidence is before me about the status of the Property H property, I will order that any surplus is to be divided in the same proportions as the rest of the property, and that liability for any debt resulting from its sale is to be divided equally between the parties.
G. Whether there should be a Child Support Departure Order pursuant to Division 4 of Part 7 of the Child Support (Assessment) Act 1989 (“the CS(A) Act”)
In his amended initiating application filed 23 January 2014 the husband sought the following order:
That under section 117 of the Child Support (Assessment) Act 1989 there be a departure from the administrative assessment of child support dated 12 December 2013 and the notice of decision dated 9 December 2013 in respect of the obligation of the husband to pay child support for the two children of the marriage, X born (omitted) 1999 and Y born (omitted) 2000, and that the husband pay such sum as this honourable court deems appropriate in all the circumstances.
In his affidavit sworn 21 and filed 22 January 2014 the husband deposes that that the time of swearing his previous affidavit in March 2013 his child support liability had been assessed at $672 per month for both children.
In August 2013 the wife made an application to change that assessment on the basis of the children’s educational costs, which comes under Reason 3 of the matters which must be proven to the Department of Health and Human Services (Child Support) (“the Child Support Agency”) in order for an assessment to be changed pursuant to s.98C(1)(b) of the Child Support (Assessment) Act 1989.
That application was successful, and the husband’s child support liability was raised to $1744.58 per month plus a one-off contribution for the children’s dental work. Mr Irving lodged an objection to this reassessment but that objection was denied.
In October 2013, after Mr Irving had received his inheritance from his father’s estate, Ms Parkes again sought a change of assessment under s.98C(1)(b) and again cited Reason 3, saying that the children had been successful in applying for places at the (omitted) School commencing in the 2014 school year.
She was again successful in that application, and at the time of trial the husband’s child support liability was assessed at $1579 per month.
Mr Irving deposes that if he had to pay child support at that level he would need to “eat into” what he describes in his affidavit as my modest inheritance from my late father’s estate (now in the reduced sum of $92,000 and received by me in October 2013) in order to satisfy the schooling costs of the children as there would be a shortfall in his annual income versus expenses of about $15,000.
He also filed a financial statement on 22 January 2014 which sets his total income at $1387 per week and his total expenditure at $1674 per week, including child support of $364 per week, and $682 in personal expenditure.
When the matter came to trial, Mr Combes of counsel for the husband said in his opening address that Mr Irving was seeking a departure order under s.117(2)(c)(ia) of the Child Support (Assessment) Act 1989 (“the CSA Act”).
The court’s power to make a departure order is found in Division 4 of Part 7 of the CSA Act, and more particularly in ss.116 and 117.
Section 116 sets out the circumstances under which a parent may make application for a departure order, and states as follows:
S.116(1) [Application to court] a liable parent or carer entitled to child support may, in respect of an administrative assessment of child support for a child, apply to a court having jurisdiction under this act for an order under this division in relation to the child in the special circumstances of the case if:
(a) all of the following apply:
(i) the Registrar has, under section 98E or 98R, refused to make a determination under Part 6A in respect of the administrative assessment;
(ii) an objection to the refusal has been lodged;
(iii) the registrar has disallowed the objection; or
(aa) all of the following apply;
(i) a decision has been made in respect of the administrative assessment;
(ii) an objection to the decision has been lodged;
(iii) in making a decision on the objection, the Registrar has, under section 98E or 98R, refused to make a determination under Part 6A in respect of the administrative assessment; or
(ab) the SSAT has, under section 98E or 98R, refused to make a determination under Part 6A in respect of the administrative assessment; or
(b) both of the following apply:
(i) the liable parent or carer entitled to child support is a party to an application pending in a court having jurisdiction under this Act;
(ii) the court is satisfied that it would be the interest of the liable parent or the carer entitled to child support for the court to consider whether an order should be made under this division in relation to the child in the special circumstances of the case; or
(c) in the case of a liable parent - the administrative assessment of child support payable by the liable parent for the child is made under subsection 66(1).
Although no evidence was adduced or submission made in relation to this issue, I will infer that the husband’s application is brought under s.116(1)(b).
In order to make application for a departure order using the provisions of s.116(1), Mr Irving must show that his case contains “special circumstances”.
“Special circumstances” is not defined in s.5 of the CSA Act[31], but the term has been considered in several cases before this court and the Family Court of Australia.
[31] S.5 contains interpretations and definitions of terms used in the Act.
In Savery and Savery[32] Kay J said that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases.”
[32] (1990) FLC 92-131
In the Marriage of Gyselman[33], the Full Court of the Family Court said the following:
Whilst it is not possible to find with precision the meaning of that term, as a generality it is intended to emphasise that the facts of the case must establish something that is special or out of the ordinary. That is, the intention of the legislature is that the Court will not interfere with the administrative formula result in the ordinary run of cases.
[33] (1992) 15 FLR 219 at 225
I can find no reference in the affidavit or oral evidence of the husband which refers to this matter being one which contains “special circumstances”, or which is “special or out of the ordinary” and therefore I cannot be satisfied as to that issue.
In his written submissions, the husband claims that his child support assessment was on the basis that he had an inheritance and that there was litigation before the Court to deal with the quantum of his support (annexure to Trial Affidavit). He further claims that his assessment is based on the fact that the children attend private school, a circumstance to which he says he did not agree. He says that his child support should be based on his salary and not where the children currently attend school[34].
[34] Written submissions of the husband filed 15 May 2015 paragraph 33
He says further that his child support should be varied not to include any other factors save for times the children spend with the respective parties and the parties’ income resulting in a payment by the husband to the wife of $834 per month based on the CSA estimator.[35]
[35] Written submissions of the husband filed 15 May 2015 paragraph 40
Those are the only references to the departure order application contained in the husband’s written submissions.
Neither of those issues – the fact that his inheritance was counted in his child support assessment and that it had now been diminished, or the fact that the children now attend a private school - was raised in evidence at trial.
That means that Mr Irving has not provided the evidence to show that he has the requisite standing under s.116(1)(b) to apply for a departure order in this case.
I will therefore dismiss the application for departure order contained in the husband’s Amended Initiating Application filed 23 January 2014.
However, if I am wrong on that point then I accept the application on the grounds that I am satisfied that it is in the interest of the liable parent, that is Mr Irving, for me to consider whether an order should be made.
Section 117 (1) of the CSA Act allows the court to make a departure order “in the special circumstances of the case” if the court is satisfied of the following:
(i) that one or more of the grounds for departure mentioned in subsection (2) exists or exist; and
(ii) that it would be:
A. just and equitable as regards the child, the carer entitled to child support and the liable parent; and
B. otherwise proper
to make a particular order under this Division.
Section 117(2) sets out the grounds for departure upon which such an application may be made, and the ground set out in subsection (c)(ia) is worded as follows:
That, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child because of the income, property and financial resources of either parent.
At the beginning of the trial, during discussion between the bar and the bench about what the actual issues of the trial would be, one of those issues was said to be the children’s ongoing needs to the age of 18.
The husband’s evidence in chief, which amended the financial statement that he had sworn on 21 January 2014, was that his weekly salary was now $1442 with tax payable of $336 per week. His child support payments were said to be $383 per week.
Mr Irving said that the funds in his bank account constituting the remainder of his inheritance from his late father’s estate, which had been stated in that financial statement to be $92,000, were now “close to zero”.
I have already discussed Mr Irving’s alleged use of the monies inherited from his father’s estate in paragraphs 205 to 306 above in the context of how those monies are to be treated in these proceedings under s.79 of the Family Law Act 1975.
I have found, on the balance of probabilities, that it is improbable that Mr Irving gambled the sum of $44,600 at (omitted) casino in the six months between March and September 2014.
On the basis of that finding, and for the reasons set out in paragraphs 295 to 306 herein, I find that it is more probable than not that Mr Irving has access to funds which he has not declared to this court.
Those funds, that is the $44,600 not accounted for from the husband’s inheritance, are a financial resource in his hands, and therefore ought to be considered under s.117(2)(c)(ia).
Clearly, and indeed on Mr Irving’s own evidence, the Child Support Agency considered his inheritance monies when making the change of assessment in December 2013.
In discussing the parties’ financial situation at that time, Senior Case Officer A considered the previous decision in August 2013 of Senior Case Officer B, who had stated in his decision that while he did not believe that the parties had the financial capacity to pay for the children’s private school fees from the income, “each has (or will have) access to significant financial resources”.
Mr Irving’s evidence is that he received the inheritance from his father’s estate in October 2013.
I infer from that evidence that Senior Case Officer A was aware of Mr Irving’s inheritance as Mr Irving would have been obliged to inform him of that fact.
I have already decided that I am unable to find that there are “special circumstances” in this case.
I am therefore not satisfied that the provisions of s.117(1) are satisfied in this case and will dismiss the application for departure order contained in the husband’s Amended Initiating Application filed 23 January 2014.
However, if I am wrong on that point, I am not satisfied that the provisions of s.117(2)(c)(ia) have been satisfied. That is, considering all the evidence set out above, I am not satisfied on the basis of the income property and financial resources of either party, that it would be unjust and inequitable to allow the current assessment to stand.
As there is no evidence before the court that any other ground for departure exists under s.117(2), I am not satisfied that the provisions of s.117(1)(b)(i) have been satisfied and therefore find that I may not make a departure order.
I will therefore dismiss the application for departure order contained in the husband’s Amended Initiating Application filed 23 January 2014.
Conclusion
A feature of these proceedings was the status of the wife as a self- represented litigant.
She is an intelligent, educated, and articulate woman, and I can say without doubt that she was so far the best-prepared self-represented litigant ever to appear before me.
In the 12 months or so prior to the final hearing Ms Parkes attended at court rooms where I was sitting on a regular basis and sat in the body of the court listening to proceedings and taking notes.
Her affidavit material was comprehensive to the extent that it was actually quite oppressive to read in detail.
Her trial Affidavit, for instance, was filed in two parts, each in its own bound folder. The first, “Part A”, consisted of a ten-page Affidavit with 25 annexures containing more than 300 pages. The second, “Part B”, consisted of an eleven-page Affidavit with 20 Annexures containing about 200 pages.
In addition, Ms Parkes tendered at trial a bundle of eleven documents, each in its own bound folder of about 40 pages, which contained photocopied receipts said to show the wife’s financial contributions to the welfare of the family during the marriage. Almost all of those pages contain multiple receipts, and from my scanning of them, at least five per page.
Clearly, Ms Parkes was under the misguided impression that every cent counted towards the court’s decision as to what the parties’ contributions had been.
Her cross-examination of witnesses at trial, while perhaps influenced by her observation of the adversarial nature of these processes, was appropriate and cogent.
However, despite her best endeavours and not surprisingly, given that she was self-represented, some of her legal reasoning, understanding and knowledge were found wanting as discussed above, and many of her submissions and evidentiary statements were unfortunately misconceived.
The outcome of these proceedings will no doubt disappoint her, as it contemplates the possibility that she might be forced to sell her home.
At the end of the trial I made a point of informing the wife that one of the options at my disposal in these proceedings was to order the sale of the Property P property and the distribution of its sale proceeds between the parties. I told her that I mentioned that issue so that she could address it in her written submissions. I note that she did not do so.
The wife’s self-representation, and the legal misconceptions which flowed from it, led to the trial taking longer than might otherwise have been expected, and to a significant delay in the delivery of judgement, as each of her submissions and the evidentiary and legal bases for them were of necessity analysed in some detail.
I say this not as a criticism of the wife, who used her best endeavours to bring every possible piece of supporting evidence before the court, but simply to note the fact.
I cannot say as a matter of certainty that legal representation for the wife would have led to a shorter trial, but it is more than likely that some of the legal argument, and the level of evidentiary detail that she insisted on placing before the court, might not have been part of the proceedings, and might have led to judgement being delivered more promptly.
This has been a difficult matter to pick apart in evidentiary terms, although ultimately, when irrelevant and extraneous matters are disregarded, the property pool is fairly straightforward.
The “bottom line” in this case is that essentially the parties would have had no property to divide in 2015 had the wife not received a lump sum compensation payment in 2010 which was applied to the purchase of the Property P property; and had she not removed the $90,000 from the Property H mortgage, there would have been a positive equity in that property.
I certify that the preceding four hundred and thirty six (436) paragraphs are a true copy of the reasons for judgment of Judge Small
Date: 20 November 2015
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