Jelavic & Jelavic
[2024] FedCFamC2F 658
•6 June 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Jelavic & Jelavic [2024] FedCFamC2F 658
File number(s): CAC 509 of 2022 Judgment of: JUDGE MANSFIELD Date of judgment: 6 June 2024 Catchwords: FAMILY LAW – PROCEDURAL – Where the respondent mother and wife did not file any trial material and did not appear at final hearing – Where proceedings continued in her absence but not on an undefended basis.
FAMILY LAW - PARENTING – Parental responsibility and living arrangements in issue for 12 and 14 year old boys – Turbulent period post-separation including child absconding, school refusing, sleeping rough, antisocial behaviour involving police, being taken into protective custody for being intoxicated, fighting and hospitalisation and refusal of support services – Where behaviour improved markedly in the care of the father.
FAMILY LAW - PROPERTY – Division of property to provide for unequal post separation contributions and provision for commitments necessary to enable the father’s support of the children – Where husband appointed trustee for sale of investment properties and mechanism for capital gains tax liabilities to be taken into account.
Legislation: Family Law Act 1975 (Cth) Pt VII, VIII,
ss 60B, 60CA, 60CC, 61DA, 65AA, 65D(1), 75(2), 79, 79(4), 81, 117, 117(2A)
Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021, Schedule 1
Cases cited: Kioa v West (1985) 159 CLR 550 at 582
Morgan & Valverde [2022] FedCFamC1A 133
Rosati v Rosati (1998) FLC 92-804
Saso & Saso [2023] FedCFamC1A 65
Stanford v Stanford (2012) 47 Fam LR 481
Tibb v Sheean (2018) 58 Fam LR 351
Townsend v Townsend [1994] FamCA 144
Weir and Weir (1993) FLC 92-338
Division: Division 2 Family Law Number of paragraphs: 107 Date of last submission/s: 26 March 2024 Date of hearing: 25 – 26 March 2024 Place: Canberra Counsel for the Applicant: Mr J Eley Solicitor for the Applicant: Alliance Family Law Respondent: No appearance Independent Children’s Lawyer Legal Aid ACT ORDERS
CAC 509 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR JELAVIC
Applicant
AND: MS JELAVIC
Respondent
AND: INDEPENDENT CHILDREN'S LAWYER
ORDER MADE BY:
JUDGE MANSFIELD
DATE OF ORDER:
6 JUNE 2024
THE COURT ORDERS THAT:
FINAL PARENTING ORDERS
Parental responsibility
1.The Father has sole parental responsibility for the children, X, born in 2009 (“X”) and Y, born in 2012 (“Y”).
2.The Father is to inform the Mother in writing of any major long-term decision which he makes for X and/or Y within 48 hours of the decision being made.
3.The parents will each do all things necessary to support and encourage the children living with and spending time with the other parent in accordance with these Orders and:
(a)In the event Y or X is not in the care of the parent in whose care they are meant to be pursuant to these orders, the other parent will actively encourage them to return to the ordered or agreed living/spend time arrangements;
(b)Further to Order 3(a) above, each parent will then provide an update by text message to the other parent no less than once every 24 hours until Y and/or X return to the ordered or agreed living/spend arrangements and/or is returned to school.
Living arrangements & supports
4.Y and X will live with the Father.
5.Y and X will spend time with the Mother as follows:
(a)On no more than two occasions each fortnight and for periods of no more than four hours on dates and times nominated by the Mother in writing no less than 21 days in advance (and the Mother shall not nominate two consecutive four hour times on the same day);
(b)The Mother’s nominated time with the children as per Order 5(a) above is to occur between 5.30pm and 8pm on Fridays, between 9.30am and 8pm on Saturdays and between 9.30am and 5.30pm on Sundays.
(c)On the children’s birthdays, the Mother’s birthday, Christmas, Easter Sunday and Mother’s Day between the hours of 5.30pm and 8pm when the event falls on a school day and 2pm to 8pm when the event falls on a date the children are not required to attend school.
A.AND IT IS NOTED Upon the Mother complying with Orders 23, 24, and 25 herein, the Father intends to agree to the children spending time with Mother as per the below, at all times taking into account the children’s ages and their views:
(a)On dates and times nominated by the Mother in writing no less than 21 days in advance;
(b)The Mother’s nominated time with the children as per Item (a) above is to occur between 5.30pm on Friday until 5.30pm on Sunday and in respect of such time:
(i)The time shall occur not more frequently than each alternate weekend;
(ii)The time can include, but shall not be in addition to the times specified in Item (iii) below;
(iii)For the first 5 occasions the children shall spend no more than a consecutive 24-hour period with the Mother; and
(iv)After the first 5 occasions, the children may spend up to a consecutive 48-hour period with the Mother.
(c)On the children’s birthdays, the Mother’s birthday, Christmas, Easter Sunday and Mother’s Day between the hours of 5.30pm and 8pm when the event falls on a school day and 2pm to 8pm when the event falls on a date the children are not required to attend school.
6.The Mother shall not nominate to spend time with the children on dates that the children are scheduled to attend major family events and the Father shall give the Mother not less than 35 days prior written notice of any major events and family events that the children are to attend.
7.The Father may not schedule a major family event at the times specified in Order 5(c).
8.All changeovers shall take place at the “C Store” in Suburb B, ACT.
9.The parents will do all things necessary to comply with any recommendation made by Child & Youth Protective Services (“CYPS”).
10.The Father will do all acts and things necessary to facilitate the children’s completion of D Service Program/Post-Separation counselling for children program.
Travel
11.Each parent will give the other parent one days notice in writing if they intend to travel with Y and/or X outside of the ACT/City E area for a period of over 24 hours and the travelling parent shall provide the other parent with an alternative contact telephone number, address and basic itinerary.
Other parenting orders
12.The parents are restrained by injunction from using physical discipline on Y or X.
13.Except in the event of an emergency, the parents shall solely communicate with each other regarding the children by way of the parenting application AppClose, and for the purposes of this Order the parents are to do all acts and things to be registered and remain registered with the AppClose parenting application.
14.The Mother and Father will keep each other informed in writing of their contact telephone number, email address and residential address and will advise each other within 24 hours of any changes to those details.
15.Each parent will forthwith advise the other in writing in the event of the following occurring:
(a)Y or X being seriously injured or falling seriously ill;
(b)Y or X requiring urgent medical treatment by a doctor and/or ambulance crew; and/or
(c)Y or X being admitted to hospital or attending the emergency department.
16.During the time the children are with each parent, that parent shall:
(a)Speak of the other parent, their partner and family members respectfully.
(b)Not denigrate or insult the other parent, their partner or other family members in the presence or hearing of the children and use their best endeavours to ensure that others do not do so either.
17.The Father will advise the Mother of the names and addresses of any new medical practitioner or other professional persons dealing with the children within 48 hours of the children’s engagement with them.
18.This Order shall be sufficient authority for all schools, medical practitioners and any other professional persons dealing with Y or X to provide to the Mother any and all information in relation to the children, including but not limited to school reports, letters to parents, invitations to events, notices of parent teacher interviews, medical information, medication information, diagnoses, and treatment recommendations.
19.Further to the above Order, the Father shall provide in writing any authorisation that is required to ensure that the Mother can access information from the relevant services.
20.Each parent be at liberty to attend any school event to which parents are ordinarily invited.
21.Each parent be at liberty to attend any extra-curricular activities in which Y or X are involved.
22.The Father is authorised to provide a copy of these Orders to any school, medical, allied health or extra-curricular provider attended upon by the children.
23.The Mother will do all things necessary to engage in treatment with a clinical psychologist and provide the Father with a letter from her psychologist confirming:
(a)The psychologist has been provided with a copy of these Orders and the Family Reports of Mr F in accordance with Order 24; and
(b)the Mother has attended upon the psychologist for no less than six sessions; and
(c)The psychologist’s view as to whether the current state of the Mother’s mental health is such that she is able to safely care for the children overnight and their opinion as to anything else that may be relevant to the Father’s decision regarding whether the children spend further time with the Mother.
24.The Mother is to provide copies of these Orders and the Family Reports of Mr F in these proceedings to her treating medical professionals, including her clinical psychologist for the purposes of Order 23 above.
25.The Mother shall forthwith complete the Keeping Kids in Mind (KKIM) and Talking With Your Kids (TWYK) parenting courses and shall provide a certificate confirming her completion to the Father.
26.That within 28 days of the date of these Orders, the ICL is to meet with the children in order to explain the effect of the Orders and notations made by the court in relation to parenting matters and having met with the children pursuant to this Order, the appointment of the ICL is discharged.
FINAL PROPERTY ORDERS
G Street Property
27.The Wife retain the property known as and situated at G Street, Suburb H, ACT (G Street Property), being further particularised as G Street, Suburb H in the Australian Capital Territory.
28.The Wife shall indemnify and forever keep indemnified the Husband in respect of all liabilities of whatsoever nature and kind, of and associated with the G Street Property, including but not limited to any loan payable to Mr J.
K Street Property
29.The Husband is hereby appointed the Trustee for Sale of the property situated at and known as K Street, Suburb L, NSW being the whole of the land more particularly described as Lot …, in Strata Plan … at Suburb L in the state of New South Wales (K Street Property) and will do all acts and things to cause the sale of the K Street Property for the best price reasonably achievable at market.
30.Upon the settlement of the sale of the K Street Property, the proceeds of sale be paid in the following manner and priority:
(a)First, to pay all costs, commissions and expenses of the sale;
(b)Second, to pay the usual adjustments for rates between the Husband and the Wife as sellers and the purchaser pursuant to the Contract for Sale;
(c)Third, in payment of such sums as are required to discharge the loans secured by mortgage against the property, including:
(i)M Bank loan account #...10; and
(ii)M Bank loan account #...21;
(d)Fourth, in payment of one-half (50%) of the total amount owing to the M Bank loan account #...83 (or such sum of the balance owing for that loan if the N Street property sells before the K Street Property);
(e)Fifth, in payment of the sum of $60,000 to the Husband to be held on trust for the parties for the payment of capital gains tax pursuant to Order 44;
(f)Sixth, of the balance then remaining:
(i)60 per cent to the Husband; and
(ii)40 per cent to the Wife.
31.Pending the sale of the K Street Property:
(a)The Husband and Wife are hereby restrained from further encumbering the K Street Property; and
(b)The Husband has the sole right to occupy the K Street Property to the exclusion of the Wife for the purposes of preparing the property for sale.
N Street Property
32.The Husband is hereby appointed the Trustee for Sale of the property situated at and known as N Street, Suburb L NSW being the whole of the land more particularly described as Lot …, in Deposited Plan … at Suburb L in the state of New South Wales (N Street Property) and will do all acts and things to cause the sale of the N Street Property for the best price reasonably achievable at market.
33.Upon the settlement of the sale of the N Street Property, the proceeds of sale be paid in the following manner and priority
(a)First, to pay all costs, commissions and expenses of the sale;
(b)Second, to pay the usual adjustments for rates between the Husband and the Wife as sellers and the purchaser pursuant to the Contract for Sale;
(c)Third, in payment of such sum as is required to discharge the loan secured by mortgage against the property, namely M Bank loan account #...91;
(d)Fourth, in payment of one-half (50%) of the total amount owing to M Bank loan account #...83 (or such sum of the balance owing for that loan if the K Street property sells before the N Street Property)
(e)Fifth, in payment of the sum of $71,000 to the Husband to be held on trust for the parties for the payment of capital gains tax pursuant to Order 44;
(f)Sixth, of the balance then remaining:
(i)60 per cent to the Husband; and
(ii)40 per cent to the Wife.
34.Pending the sale of the N Street Property:
(a)The Husband and Wife are hereby restrained from further encumbering the N Street Property; and
(b)The Husband has the sole right to occupy the N Street Property to the exclusion of the Wife for the purposes of preparing the property for sale.
O Street Property
35.Within 90 days of the settlement of the sale of the latter of the N Street and K Street properties, the parties shall do all acts and things and sign all documents necessary to transfer to the Husband, at the expense of the Husband, all of the Wife’s right, title and interest, in the property known as and situated at O Street, Suburb P in the State of Queensland, being the whole of the land and further particularised as Lot …, on Survey Plan … on Title Reference … (O Street property).
36.Contemporaneously with the transfer of the O Street property to the Husband, the Husband shall do all acts and things and sign all documents necessary to refinance the loan secured by mortgage against the O Street property so to release the Wife from all liability in respect of the O Street property.
37.Pending the transfer of the O Street property to the Husband:
(a)The Husband shall have the sole use and occupation of the O Street property;
(b)Both parties are restrained from further encumbering the O Street property; and
(c)The Husband shall meet the payment of all liabilities of and associated with the O Street property.
Q Street Property
38.Within 90 days of the settlement of the sale of the latter of the N Street and K Street properties, the parties do all things necessary to transfer to the Husband at the expense of the Husband, all of the Wife’s right, title and interest, for the property known as and situated at Q Street, Suburb L in the state of New South Wales, being the whole of land and further particularised as Lot …, in Deposited Plan …, Certificate Title Folio … (Q Street Property).
39.Contemporaneously with the transfer of the Q Street property to the Husband, the Husband shall do all acts and things and sign all documents necessary to refinance the loan secured by mortgage against the Q Street property so to release the Wife from all liability in respect of the Q Street property.
40.Pending the transfer of the Q Street property to the Husband:
(a)The Husband shall have the sole use and occupation of the Q Street property;
(b)Both parties are restrained from further encumbering the Q Street property; and
(c)The Husband shall meet the payment of all liabilities of and associated with the Q Street property.
Payment to the Wife
41.Contemporaneously with the transfer of the Q Street property to the Husband, the Husband shall pay to the Wife $380,000, with the following amounts to be deducted from the payment to the Wife:
(a)$5,000 for payment of the cost order made in favour of the Husband on 1 March 2023;
(b)$8,613 for payment of the Wife’s half share of the expert reports paid by the Husband in these proceedings; and
(c)$10,406.82 for payment of the Husband’s costs with respect to proceedings on and related to 6 November 2023.
Capital Gains Tax
42.The parties shall do all acts and things and sign all documents necessary to lodge their personal income tax returns for all financial years up to and including the financial year ended 30 June 2023 by no later than 30 June 2024.
43.To crystallise the capital gains tax liabilities payable by the parties, the parties shall do all acts and things and sign all documents necessary to lodge their personal income tax returns as follows:
(a)For the financial year ended 30 June 2024, by no later than 1 September 2024; and
(b)For the financial year ended 30 June 2025, by no later than 1 September 2025.
44.Upon a party receiving a Notice of Assessment from the Australian Taxation Office following the lodgment of the personal income tax returns pursuant to Order 43 evidencing the capital gains tax payable by them for the sale of the K Street and N Street properties:
(a)The Husband is authorised to pay his capital gains tax liability from the funds held by him pursuant to Orders 30(e) and 33(e);
(b)Within 7 days of the Wife providing the Husband with evidence of her capital gains tax liability, the Husband shall pay to the Wife such sum as is equivalent to the Wife’s capital gains tax liability from the funds held by him pursuant to Orders 30(e) and 33(e);
(c)If there is a shortfall in the funds held by the Husband to make the payment to the Wife pursuant to Order 44(b), then the Husband shall pay to the Wife such sum as is equivalent to 60 per cent of the shortfall; and
(d)If there are any surplus funds held by the Husband from the funds held by him pursuant to Orders 30(e) and 33(e) after the payment of all capital gains tax liabilities arising from the sale of the K Street and N Street properties, then the surplus funds shall be paid in the proportion of 60 per cent to the Husband and 40 per cent to the Wife.
R Pty Ltd
45.Within 14 days of the date of these Orders, the Wife shall do all acts and things and sign all documents necessary to:
(a)Resign as a director of R Pty Ltd; and
(b)Transfer all of her shareholding in R Pty Ltd to the Husband.
46.Following the Wife resigning as a director and transferring her shareholding in R Pty Ltd to the Husband pursuant to Order 45, the Husband shall indemnify and forever keep indemnified the Wife in respect of all liabilities of and associated with R Pty Ltd.
Property to be Retained the Husband
47.The Husband shall retain for his sole use and benefit to the exclusion of the Wife, the following:
(a)All bank accounts held in his personal name;
(b)The S Company shares;
(c)Motor Vehicle 1 ;
(d)All of the assets and goodwill of the business trading as R Pty Ltd ACT;
(e)All chattels, furniture and household goods in the Q Street, K Street, N Street and O Street properties; and
(f)His superannuation entitlements.
Property to be Retained the Wife
48.The Wife shall retain for her sole use and benefit to the exclusion of the Husband, the following:
(a)All bank accounts held in her personal name;
(b)Motor Vehicle 2;
(c)Motor Vehicle 3;
(d)All chattels, furniture and household goods in the G Street property; and
(e)Her superannuation entitlements.
Home Contents
49.That within 14 days of Final Orders being made, the Wife shall deliver up to the Husband, the items listed in Annexure “A” to these Orders.
Catchall
50.Unless otherwise specified in these Orders and except for the purpose of enforcing the payment of any money due under these or any subsequent Orders:
(a)Each party be solely entitled to the exclusion of the other to all property (including choses-in-action) owned by or in the possession of such party as at the date of these Orders;
(b)All insurance policies to become the sole property of the owner named therein;
(c)Each party 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; and
(d)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
Section 106A order
51.That if either party refuses, fails or neglects to execute any document necessary to put these Orders into effect within 14 days of being requested to do, and any such refusal, failure or neglect is proved by affidavits filed and served by or on behalf of the party alleging this, the Registrar of this Court at Canberra be and is hereby appointed pursuant to section 106A of the Family Law Act 1975 to execute such document in the name of such party.
Annexure A – Home Contents
Home Contents to be returned to the Husband within 14 days:
(a)His Passport
(b)Two sets of keys for his Motor Vehicle 1.
(c)His collection contained on one of the two audio systems together with the set of speakers.
(d)His and family pre-digital photos.
(e)Copies of family video tapes and portable hard drives with digital family photos and videos.
(f)His hobby photographic equipment, bags, accessories etc.
(g)His mobile phone containing a lot of digital photos.
(h)Envelope containing $3,158.40 of T Group monies that were in the Husband’s possession as treasury of the association and in the office drawer of Q Street.
(i)Nail gun.
(j)Tile cutter.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE MANSFIELD
INTRODUCTION
The applicant father and husband is 53 years old. The respondent mother and wife is 52 years old. They began living together in 1994 and married in 1996. They separated in March 2021 after a relationship of 27 years.
There are four children of the relationship. The two eldest are 24 and 22 years old. X is 14 years old and Y is 12 years old. In March 2022, the applicant commenced the proceedings seeking parenting and property orders including that:
(a)The parents have equal shared parental responsibility;
(b)The children live with both parents on a week about basis and for half of the school holidays; and
(c)There be an equal division of property.
On 7 July 2022, the respondent filed a Response, Financial Statement and a Financial Questionnaire. She also filed a Genuine Steps Certificate and Notice of Risk. She did not file an affidavit. The wife has not filed any other material in the proceedings.
Since separation, it has been a turbulent time which has included:
(a)X and Y initially living with the mother and spending ad hoc time with the father when they wanted to or when the mother asked them to;
(b)Informal living arrangements and interim orders for Y and X being made, kept and broken;
(c)Y and X not moving or acting together;
(d)Family violence order proceedings as between the father and the maternal grandfather, and, the police and the father on behalf of X;
(e)X absconding, school refusing, sleeping rough, antisocial behaviour involving police, being taken into protective custody for being intoxicated, fighting and hospitalisation and refusal of support services;
(f)The mother frequently and increasingly alleging the father psychologically abused her and physically abused the children during the relationship;
(g)The mother’s increasingly dysregulated behaviour and difficulties with coping to the extent of not allowing Y or X to stay with her;
(h)Child protection authority involvement.
The children have been living with the father since 19 September 2023. X and Y have not seen their mother since 19 September 2023 despite multiple attempts from the father to organise visits, except for when X walked to his maternal grandparent’s home down the road when he did not agree with the father’s screen time restrictions, and the mother happened to be there.
The family engaged in the Functional Family Therapy Child Welfare program from October 2023 –January 2024 during which time both children have returned to school full-time, stopped running away, physical conflict between the brothers has reduced and the father has changed his responses to the children’s behaviours to cater for their needs.
The property of the marriage includes:
(a)The former matrimonial home (“the Q Street property”) in joint names in which the father and the children now live;
(b)Three residential investment properties acquired during the relationship in joint names – The K Street property, the N Street property and the O Street property;
(c)Various loan accounts and facilities in joint names secured by mortgages over the real properties;
(d)A residential unit (“the G Street property”) which the mother unilaterally acquired in her own name after separation along with a private loan secured by mortgage;
(e)The parties shareholdings in the company R Pty Ltd, which is the structure in which the husband has and continues to operate his business as a tradesperson;
(f)Contingent liabilities of:
(i)Capital Gains Tax upon the sale of investment properties;
(ii)The husband’s income tax debt;
(iii)R Pty Ltd tax debt;
(iv)Unpaid rates and utilities for the Q Street property; and
(g)Respective superannuation interests in industry accumulation funds.
On 6 November 2023, the matter was listed for final hearing but did not proceed in circumstances where the respondent had not filed any material. The respondent’s evidence from the bar table was that she had not had sufficient time to prepare her trial documents due to her ill mental health. The matter was relisted to 25 March 2024.
On 6 November 2023, interim orders were made:
(a)With respect to the parenting proceedings, by consent, which provided for:
(i)The father to have sole parental responsibility;
(ii)Y and X to live with the father and spend alternate weekends with the mother;
(iii)The parents comply with any recommendations made by the child protection authority, participate in family therapy and enrol in a post-separation parenting course.
(b)With respect to the property proceedings, not by consent, which provided for:
(i)The husband continue to occupy the Q Street property and the wife be restrained from going there;
(ii)The husband be appointed the trustee for sale of the K Street property and the N Street property;
(iii)The books and records of R Pty Ltd be regularised and the tax returns lodged.
THE HEARING
The matter came before me for final hearing on 25 March 2024. The applicant was represented by counsel. The Independent Children’s Lawyer appeared as solicitor-advocate. The respondent had representation via the Cross-Examination of Parties Scheme. The respondent was not in attendance. On behalf of the respondent, an application was made to again adjourn the final hearing. On that application the Court received into evidence:
(a)Medical Certificate in relation to Ms Jelavic dated 23 March 2024 (“Exhibit A”); and
(b)Affidavit of the Applicant filed 25 March 2024 (“Exhibit B”).
I delivered ex tempore reasons for my decision to dismiss that application. In the context of these reasons for judgment, when declining the application to adjourn, I also declined to order that the matter be determined as if it were on an undefended basis. Firstly, two of the three parties were in attendance and participating. Further, regard was had to the principles in Morgan & Valverde [2022] FedCFamC1A 133 and Saso & Saso [2023] FedCFamC1A 65.
In the circumstances where the respondent was not in attendance, as far as the respondent may be concerned the matter proceeded as though it were being determined on an undefended basis. However, having regard to the present authorities it is an important distinction to make that it did not proceed on that basis. I specifically made no order to the effect that the mother was denied the opportunity to cross-examine the applicant or the expert or to make submissions.
Procedural fairness requires each party to be given an adequate opportunity to be heard, and to present their cases (Kioa v West (1985) 159 CLR 550 at 582). However, it is only the opportunity to present evidence and argument which the interests of justice requires, not the actuality of it.
Having no further instructions, counsel for the mother sought leave for her and the instructing solicitor to withdraw which was granted.
No application to re-open the evidence has been made. No application has been made since the withdrawal of the mother’s legal representatives. No application has been made between the close of evidence in the hearing, the reservation of judgment and the pronouncement of final orders and the delivery of reasons.
Orders sought by the respondent mother and wife
By her Response filed on 7 July 2022, the respondent mother and wife sought final orders including that:
(a)She have sole parental responsibility.
(b)The children live with her and spend time with the father week about and for half of the school holidays subject to the father undertaking a psychological assessment.
(c)The property be divided as to 80 / 20 per cent in her favour.
By her Financial Questionnaire filed 7 July 2022, the respondent contended that:
(a)Her contribution based entitlement claim was 80 per cent of the net value of the assets; and
(b)There be a further adjustment in her favour of 10 per cent because of her predominate care of the children.
Orders sought by the applicant father and husband
By the time of the final hearing, by his Amended Initiating Application filed 19 February 2024, the father sought final parenting orders including that:
(a)He have sole parental responsibility and the children live with him; and
(b)The children spend time with the mother as agreed.
The husband sought property orders to the effect of a division of 65 /35 per cent in his favour including that:
(a)The wife retain the G Street property;
(b)The husband obtain the O Street property;
(c)The husband obtain the Q Street property;
(d)The husband, as trustee, sell the K Street property;
(e)The husband, as trustee, sell the N Street property;
(f)The husband obtain the R Pty Ltd business;
(g)Each party retain their own superannuation interests;
(h)The husband retain Motor Vehicle 1;
(i)The wife deliver up to the husband specified items;
(j)Costs.
By a combination of the Outline of Case Document and submissions by counsel on behalf of the applicant, the husband contended that:
(a)The property ought to be assessed as to 60 per cent in his favour on account of his greater contributions by way of:
(i)His compensation payment of about $95,000 received in September 2016;
(ii)His personal labour and expertise in renovating the K Street property and the N Street property;
(iii)His preservation of the real properties and the business post-separation;
(iv)His majority care of the children post-separation.
(b)There be a further adjustment of 10 per cent in his favour to account for his majority care of the children (in the event the parenting orders he seeks are made).
(c)That overall, the just and equitable division of the property pool be 65 / 35 per cent in his favour.
The Independent Childrens Lawyer
By her Outline of Case document filed 22 March 2024, the ICL contended that:
(a)The mother’s difficulties engaging with the proceedings are reflective of significant mental health difficulties or other behavioural concerns (as alleged by the father and suggested by the Expert reports and the available subpoena material).
(b)On the current evidence, the ICL is strongly in support of orders that the father hold sole parental responsibility.
(c)The ICL’s view is that orders should be made for the mother to request time with the children and that the father is required to facilitate time upon request within strict limitations.
(d)The family report writer opined in his updated report that both children were at risk of emotional harm in the mother’s care, ‘through experiencing their caregiver as either intensely frightening or frightened.’[1]
[1] Exhibit C2, at [100].
The father and the ICL arrived at a joint position as to final orders which became a Minute (Exhibit C5) and then following submissions, an Amended Minute (Exhibit C6).
THE ISSUES
In the absence of the respondent, I have identified the issues by reference to the orders sought by the parties and the legislation.
In the parenting proceedings, the issues are:
(1)Should the father have sole parental responsibility?
(2)If the children are to live with the father, what should the arrangements for time with the mother be?
In the property proceedings, the issues are:
(1)How should the parties’ contributions be assessed?
(2)What are the parties’ future needs?
THE EVIDENCE
The mother has not filed an affidavit at any time in these proceedings. The following material was received into evidence:
(a)Wife’s Financial Questionnaire filed 7 July 2022 (“Exhibit C1”);
(b)Report of Mr F dated 1 November 2023 (“Exhibit C2”);
(c)Report of Mr F dated 10 November 2022 (“Exhibit C3”);
(d)ICL Tender Bundle (“Exhibit C4”);
(e)Minute of Final Orders Sought by the ICL and Father, in respect of parenting, dated 25 March 2024 (“Exhibit C5”);
(f)Amended Minute of Final Orders Sought by the ICL and Father, dated 25 March 2024 (“Exhibit C6”);
(g)Affidavit of Mr Jelavic filed 19 February 2024 (“Exhibit A1”);
(h)The husband’s Financial Statement filed 19 February 2024 (“Exhibit A2”);
(i)The wife’s Financial Statement filed 7 July 2022 ("Exhibit A3”);
(j)Affidavit of Mr Jelavic filed 25 March 2024 (“Exhibit A4”);
(k)Superannuation Information Letter, being 3 pages, dated 16 February 2024 (“Exhibit A5”);
(l)Item 1 of the Father’s Tender Bundle (“Exhibit A6”);
(m)Title Search (“Exhibit A7”); and
(n)Deed of Loan (“Exhibit A8”).
(o)Applicant’s aide memoire – Balance sheet evidence (“Exhibit A9”)
(p)Applicant’s minute of final property orders (“Exhibit A10”)
(q)Of the Applicant’s Tender Bundle – Items 1, 3-6, 16-22 (excluding pages 415 onwards) (“Exhibit A11”)
PRINCIPLES – THE PARENTING DISPUTE
Both parties have asked the Court to make orders in respect of children under Part VII of the Family Law Act 1975 (Cth) (“the Act”). Neither has discontinued their cause of action. Each party therefore is taken to contest the orders sought by the other and pursues the orders sought by themselves.
The Court may make such parenting orders as it thinks proper (s 65D(1)), within the context of the objects of the legislation and the principles which underpin those objects (s 60B). When making parenting orders, the Court is mandated to regard the children’s best interests as the paramount consideration (s 60CA and s 65AA).
Despite the mother presenting no evidence in her case, nor testing any of the evidence of the father, there is still an evidentiary onus to be met by the husband and the ICL that the orders they seek are in the best interests of the children.
Parental responsibility
Division 2 of Part VII of the Act is titled ‘Parental responsibility’ and deals with the concept of parental responsibility including (a) what parental responsibility is; and (b) who has parental responsibility.
Section 61DA of the Act relevantly provides that, when making a parenting order in relation to a child, the Court must apply a presumption that it is in the best interests of the child for the child’s parents to have equal shared parental responsibility for the child.
The presumption does not apply if there are reasonable grounds to believe that a parent of the child (or a person who lives with a parent of the child) has engaged in abuse of the child or another child who, at the time, was a member of the parent’s family (or that other person’s family); or family violence.
The presumption may be rebutted by evidence that satisfies the court that it would not be in the best interests of the child for the child’s parents to have equal shared parental responsibility for the child.
The best interests of the children
Section 60CC of the Act specifies the criteria which must be considered in arriving at a conclusion as to what is in the children’s best interests. In Tibb v Sheean (2018) 58 Fam LR 351 at [68]–[69], the Full Court made clear that while the Court must “consider” each of the primary and additional considerations in s 60CC, express discussion is not necessary. I have given careful consideration to each of the primary and additional considerations as they relate to the issues and circumstances of this case.
DETERMINATION OF ISSUES IN THE PARENTING PROCEEDINGS
Parental responsibility
There are many references to instances of high conflict, argument and trauma in the history of this family. The family report writer recorded that:
(a)The mother’s history of alleged family violence appears to be an ongoing consideration impacting on her mental health and her parenting capacity;
(b)The mother admitted to slapping X and denying his access to the home due to fears for her own safety, and the safety of any possession of value;
(c)The father indicating that since an AVO was taken out on him, and then rescinded, he has ceased using any physical force in his interactions with X.
I am satisfied there are reasonable grounds to believe that a parent of the child has engaged in family violence. The presumption that it is in the best interests of the children for the children’s parents to have equal shared parental responsibility for the children does not apply.
In any event, the presumption is rebutted by evidence that satisfies the court that it would not be in the best interests of the children for the children’s parents to have equal shared parental responsibility for the children.
I find that it is in the best interests of the children for the father to have sole parental responsibility for the children for the following reasons.
The expert deposed:
[at 103]. [Ms Jelavic], at this time, is psychologically incapable of supporting the father’s relationship with the children, or indeed communicating with him without becoming preoccupied with expressing anger and blame. … I have not encountered a persistent and intense emnity towards an ex-partner such as what I have observed now from [Ms Jelavic] towards the father.
[at 120]. I’m reluctant to offer recommendations towards orders, as the parents and children have shown a chronic tendency to follow their own preferences, despite orders that have been in place at any given time over the past 12-18 months.
[at 127]. I do consider that sole parental responsibility may need to be provided to one parent, so as to reduce the level of communication required and joint decision making between the parties.[2]
[2] Exhibit C2.
The ICL made the following submissions, which I accept:
9. Regrettably, it is the view of the ICL that the mother’s difficulties engaging with the proceedings are reflective of significant mental health difficulties or other behavioural concerns (as alleged by the father and suggested by [Mr F]’s reports and the available subpoena material).
10. The mother’s communication with the father via the parenting application AppClose is highly combative, not child-focussed and suggests that the mother finds any communication from the father to be distressing. It appears that there is almost no possibility that the parents will be able to discuss and reach agreement on major long-term decision for the children.[3]
[3] ICL’s Case Outline filed 22 March 2024.
The father:
(a)Has engaged in programs with X through U Service.
(b)Has enrolled in and completed Family Functional Therapy with both children.
(c)Has also enrolled both children in the D Service program after orders allowed the father to enrol them without the mother’s consent because the mother did not complete the necessary paperwork. The children have been willingly engaging in the service.
(d)Has followed the recommendations of the updated family report, engaging V Service and following recommendations of CAMHS and CYPS.
(e)Has had full-time care of the children since 19 September 2023 with little to no time spent with the mother. The children have had the benefit of stability, consistency and counselling services. They are attending school regularly.
Orders 1 and 2 are made accordingly.
Living and time arrangements
The father has demonstrated his willingness and capacity to promote the children’s relationship with the mother in order to maximise the potential benefit to them of that relationship. The mother communicates with hostility and spite. She has not demonstrated any capacity to not undermine the father and still denigrates him to the children.
The expert determined that the father has capacity and ability to provide majority care to the children. He cannot see how the mother would cope emotionally with having both children with such complex emotional behavioural needs in her primary care.
The expert reported [at 123]:
…I would have concerns about the children being in her [the mother’s] primary care for fear that they may experience verbal abuse, physical abuse, denigration of the father and involvement in the parental conflict, and in particular for [X], that he may be told to leave the premises and subsequently the risks to [X] are further increased in regards to his antisocial and substance using friends and acquaintances.[4]
[4] Exhibit C2.
The mother’s current relationship with the children is unknown. There is no evidence available that the mother has taken any action to address the concerns raised by the expert in his original report or in his updating report.
I take into account the ICL’s concern that:
… orders specifying that the mother spend certain time with the children may place them at risk. However, as the father deposes to the children wishing to spend time with the mother and given the very difficult relationship between the parents & noting the children’s ages, on balance the ICL’s view is that orders should be made for the mother to request time with the children and that the father is required to facilitate time upon request within strict limitations.[5]
[5] ICL’s Case Outline, 22 March 2024.
On the available evidence, and having considered the submissions of the ICL and by counsel for the father on his behalf, I am satisfied that the orders jointly sought by the father and the ICL at Exhibit C6:
(a)To the extent possible, provide an opportunity for the children to benefit from a meaningful relationship with both of the children's parents;
(b)Protect the children from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence;
(c)Provide for the views of the children to be expressed on an ongoing basis and oblige the father to take them into account in exercising parental responsibility, including in this case his consideration of time with the mother; and
(d)Provide a pathway for the mother to maximise her capacity to provide for all of the needs of the children.
Accordingly, I am satisfied that Orders 3-26 are in the best interests of the children.
PRINCIPLES – THE PROPERTY DISPUTE
Both parties have asked the Court to make a property order under Part VIII of the Act. Neither has discontinued their cause of action. Each party therefore is taken to contest the orders sought by the other and pursues the orders sought by themselves.
In relation to property proceedings under Part VIII of the Act, the High Court in Stanford made it clear that jurisdiction does not arise unless the court is satisfied that, in all the circumstances, it is just and equitable to make an order. The High Court provided three fundamental propositions which must not be obscured:
(a)First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.
(b)Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion.
(c)Third, the power to make a property settlement order must be exercised in accordance with legal principles, including the principles which the Act itself lays down.
Despite the wife presenting no evidence in her case, nor testing any of the evidence of the husband, there is still an evidentiary onus to be met by the husband as to:
(a)Satisfying the court, in all the circumstances, that it is just and equitable to make an order; and
(b)That the orders he seeks are just and equitable.
THE PROPERTY POOL
Firstly, it must be recognised that the wife has clearly not complied with her duty to give full and frank disclosure of all information relevant to the proceeding. I proceed in accordance with the two-step process in the Full Court’s decision in Weir and Weir (1993) FLC 92-338 to “avoid providing a charter for fraud in proceedings of this nature.” Once it is established that there has been “deliberate non-disclosure,” then “the Court should not be unduly cautious about making findings in favour of the innocent party.” I am satisfied that the wife’s non-disclosure in these proceedings is deliberate. Accordingly, I should not be unduly cautious about making findings in favour of the husband.
The process of identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties to property of the marriage or either of them is by way of compilation of a balance sheet.
Pool
Wife
Husband
Assets
1
Q Street
1,550,000
775,000
775,000
2
K Street
640,000
320,000
320,000
3
N Street
780,000
390,000
390,000
4
O Street
800,000
400,000
400,000
5
G Street
800,000
800,000
6
S Company Shares x1,350
7,493
7,493
7
R Pty Ltd
2,000
1,000
1,000
8
R Pty Ltd (M Bank #...91)
14,897
7,449
7,449
9
Motor Vehicle 1 unregistered
0
10
Motor Vehicle 2
37,000
37,000
Total Assets
4,631,390
2,730,449
1,900,942
Liabilities
11
Joint M Bank line of credit xx…18 (Q Street)
44,606
22,303
22,303
12
Joint M Bank mortgage acc xx…16 (O Street)
362,464
181,232
181,232
13
Joint M Bank mortgage acc xx…21 (K Street)
1,990
995
995
14
Joint M Bank mortgage acc xx…10 (K Street)
282,314
141,157
141,157
15
Joint Investment deposit loan xx…83 (K Street, N Street and O Street)
350,395
175,198
175,198
16
Joint M Bank mortgage acc xx…91 (N Street)
363,900
181,950
181,950
17
Loan from Mr J
400,000
400,000
18
Joint M Bank business loan acc xx…89
31,940
15,970
15,970
19
R Pty Ltd 2020 and 2021 tax liabilities
80,005
40,003
40,003
20
R Pty Ltd interest and charges post separation
10,339
5,170
5,170
21
Rates arrears (Q Street property)
12,602
6,301
6,301
Total Liabilities
1,940,555
1,170,278
770,278
Superannuation
22
Husband's Super Fund 1
132,704
132,704
23
Wife’s Super Fund 2
233,288
233,288
Total Superannuation
365,992
233,288
132,704
Combined Total
3,056,827
1,793,459
1,263,368
In the absence of the wife, it is worthwhile providing the evidentiary basis for the value of each item on the balance sheet. Exhibit A9 is also a useful guide.
Assets
1
Q Street
Valuation at Item 3 of Exhibit A11
2
K Street
Valuation at Item 4 of Exhibit A11
3
N Street
Valuation at Item 5 of Exhibit A11
4
O Street
Valuation at Item 6 of Exhibit A11
5
G Street
Settlement Statement as at 23 December 2022 at Annexure L to Exhibit A1
6
S Company x1,350
Item 37 of Husband's Financial Statement (Exhibit A2)
7
R Pty Ltd
Paragraph 134 of Exhibit A1
8
R Pty Ltd (M Bank #...91)
Item 37 and Part O of Husband's Financial Statement (Exhibit A2)
9
Motor Vehicle 1 unregistered
Item 40 of Wife's Financial Statement (Exhibit A3)
10
Motor Vehicle 2
Item 40 of Wife's Financial Statement (Exhibit A3)
Liabilities
11
Joint M Bank line of credit xx…18 (Q Street)
Husband's Financial Statement (Exhibit A2)
12
Joint M Bank mortgage acc xx…16 (O Street)
Husband's Financial Statement (Exhibit A2)
13
Joint M Bank mortgage acc xx…21 (K Street)
Husband's Financial Statement (Exhibit A2)
14
Joint M Bank mortgage acc xx…10 (K Street)
Husband's Financial Statement (Exhibit A2)
15
Joint Investment deposit loan xx…83 (K Street, N Street and O Street)
Husband's Financial Statement (Exhibit A2)
16
Joint M Bank mortgage acc xx…91 (N Street)
Husband's Financial Statement (Exhibit A2)
17
Loan from Mr J
Paragraph 131 of Exhibit A1, Exhibit A7 and Exhibit A8
18
Joint M Bank business loan acc xx…89
Bank Statement at Item 19 of Exhibit A11
19
R Pty Ltd 2020 and 2021 tax liabilities
ATO Statements at Items 16 and 17 of Exhibit A11
20
R Pty Ltd interest and charges post separation
Items 16 and 17 of Exhibit A11 and Accountant's letter at Annexure Y (page 49) of Exhibit A4
21
Rates arrears (Q Street property)
Item 18 of Exhibit A11
Superannuation
22
Husband's Super Fund 1
Item 45 of Husband's Financial Statement (Exhibit A2)
23
Wife’s Super Fund 2
Exhibit A5
Superannuation
The wife’s Response is consistent with a one pool approach in that it does not seek a different approach to or division of the parties’ superannuation interests.
The husband proposes a two pool approach in that the orders he seeks are an application of a percentage alteration in his favour to the non-superannuation pool and that the parties’ superannuation interests not be disturbed. My impression is that this approach has been taken due to the perceived complexity and aversion to anything that may require the wife’s involvement and co-operation. It is an approach that is inherently disadvantageous to him as the wife’s rounded superannuation interests at $230,000 are significantly more than his rounded interests at $130,000.
I am not satisfied however that approach does justice to the husband. This is a long marriage where the parties’ respective superannuation have been built up entirely during the relationship. The husband’s lesser interests are reflective of his earnings coming from the family business as opposed to the wife’s earnings as an employee. The evidence does not suggest that findings with respect to contributions ought to be different to superannuation interests and non-superannuation property. The total value of $365,000 is significant but still relatively modest with respect to the pool. The parties are close in age and have capacity to continue to earn. It is a case amenable to an equalisation of superannuation interests but neither party seeks a splitting order and the family law values pursuant to the regulations have not been obtained. Both parties interests are in accumulation funds.
For the above reasons, in my view a one pool approach is appropriate and can still be used despite not making a splitting order.
Tax liabilities
Annexure Y (page 49) of Exhibit A4 is a letter to the applicant obtained at his request and instructions from a Public Accountant and Registered Tax Agent. The representations and opinions expressed in the letter have not been challenged. Further, they are in my view objectively reasonable (noting the husband has been operating as a sole trader) and in accordance with the husband’s sworn evidence and the circumstances of this case. The evidence arising from that letter is that:
(a)The estimated CGT liability for the:
(i)N Street property is $70,334.
(ii)K Street property is $57,908.
(iii)O Street property is $64,869.
(b)The estimated personal tax liability of the husband’s for the year ended 30 June:
(i)2022 is $46,031.
(ii)2023 is $34,760.
(iii)2024 is $57,649.
These items are not property and are not in the balance sheet. They are however contingent liabilities to be taken into account. In relation to the CGT liabilities, upon sale of any of the properties. In relation to the husband’s personal tax liabilities, upon lodgement of his returns noting they are all from the period after separation.
Premature distribution of funds
Dates of relevance in this section are:
(a)March 2021, when the parties separated;
(b)September 2022, when the wife signed the contract to purchase the G Street property;
(c)December 2022 when the G Street property settled;
(d)September 2023 when the husband returned to living in the Q Street property.
The husband presents evidence of the wife causing money to be transferred out of the pool into accounts in her own name including:
(a)$155,000 from the R Pty Ltd account across eight transactions on 5 and 6 April 2021.
(b)$28,000 from the Business Loan Account on 6 April 2021 ($25,000) and 2 June 2021 ($3,000).
(c)$280,630.87 from a joint loan account between 5 and 30 April 2021.
Rounded, the withdrawals total $483,000. The transactions as deposed by the husband in his affidavit were supported by bank statements.
The husband deposed [at 158]:
Of the above transactions, I have not received any written communication explaining how the funds were applied. [Ms Jelavic] through her solicitors disclosed in November 2022 that she had purchased a [Motor Vehicle 2] vehicle for $37,000. In addition, [Ms Jelavic] disclosed that she also gifted $55,000 of joint funds to our son [Mr W]. She disclosed that she owed school fees of about $10,000 to the school, had a Centrelink debt of $7,043 and a Westpac credit card.
The husband also presents evidence of:
(a)The wife’s retention and sole benefit to $100,483 of funds accumulated during the marriage which were in a bank account in her own name; and
(b)$23,440 from two accounts in the children’s names ($11,720 each) on 22 December 2022.
I am satisfied that: all of these monies existed at separation and the husband had a legitimate interest in them; and, the withdrawals were a unilateral and premature distribution of funds to herself without the husband’s consent. Accordingly, they may be added back as notional property to the pool. (Townsend v Townsend [1994] FamCA 144). Nevertheless, I decline to add them back in circumstances where:
(a)Already represented in the balance sheet are post separation assets of the Motor Vehicle 2 for $37,000 and the equity in the G Street property of $400,000. Plus the stamp duty, legal and other costs of acquisition that the wife had to pay, the prematurely distributed funds are not wholly but largely still accounted for in the balance sheet.
(b)There are examples of the wife’s expenditure of some of these funds on liabilities of the pool (for example, payments to Centrelink) or what are likely to be reasonably incurred living expenses (for example, credit card payments). It is of course impossible to account for the wife’s use of the funds with any precision in the absence of her evidence and her nondisclosure. In submissions, the husband did not press for an accounting or the adding back of any notional property in lieu of making submissions as to the husband’s superior contributions post separation.
Any loan from the wife’s parents
I have also had regard to the husband’s evidence (at paragraph 131 of Exhibit A1), against his own interests, that according to the wife, $100,000 was borrowed from her parents towards the purchase of the G Street property. I decline to include that as a liability in the balance sheet because:
(a)The $400,000 borrowed from Mr J plus the amounts kept or taken by the wife in the order of $600,000 are well sufficient to cover the $400,000 balance of the purchase price plus whatever the stamp duty and other purchase costs could reasonably be expected to have been.
(b)The bank statements (produced under subpoena), do not reveal any such transaction. To the contrary, they illustrate an accumulation and expenditure of funds without a requirement for $100,000 to acquire the G Street property.
Other items
Regarding items 19 and 20:
(a)The ATO statements at Items 16 and 17 of Exhibit A11 show that the R Pty Ltd income tax and GST liabilities from periods up to 31 March 2021 (as to $34,120) and 30 June 2021 (as to $45,885) totalling $80,005. That is the situation at separation. The balance of $10,339 is general interest charges since then.
Regarding item 21:
(a)By extrapolation of the $982 quarterly rates instalment, the total rates arrears of $11,508 is in the order of 11 or 12 quarters or just under four years. The husband has not resided in the property between separation and September 2023. This is a liability referable to both parties. The water/sewer charges of $1,094 is as at October 2023 so is also a liability referable to both parties.
HAS THE POWER TO MAKE A PROPERTY SETTLEMENT ORDER BEEN ENLIVENED
Having regard to:
(a)The existing legal and equitable interests of the parties in the property identified as property of the parties to a marriage or either of them; and
(b)The husband and wife are no longer living in a marital relationship; and
(c)There is no longer the common use of property by the husband and wife; and
(d)The express and implicit assumptions that underpinned the existing property arrangements, including the assumption that any adjustment to those interests could be effected consensually as needed or desired, have been brought to an end.
I am satisfied that, in all the circumstances, it is just and equitable to make a property settlement order. What order, if any, is then to be determined by applying s 79(4).
CONTRIBUTIONS
It is uncontroversial that neither party had any assets or liabilities of significance at the commencement of their relationship. It was a long relationship of some 27 years which bore four children and accumulated traditional assets and liabilities.
The husband deposes to the parties respective contributions at paragraphs 111-113 and 115-117 of his affidavit. The circumstances are uncontroversial. They are in accordance with the overall picture. They each worked throughout the relationship. They divided their labours and efforts amongst financial and non-financial contributions in accordance with their respective preferences and capabilities. I have had regard to what the wife contended in her Financial Questionnaire (Exhibit C1) as at July 2022. I do not regard any of those circumstances as remarkable.
The husband deposes to receiving a compensation payout of $95,752 in 2016 after a botched surgery on his elbow four years after sustaining an injury in 2011 which was ‘applied to the relationship.’ Given the size and age of the payment relative to the size of the pool and the length of the relationship, I do not consider it amounting to an unequal contribution in favour of the husband.
The husband submitted that the husband’s application of his skills and work to the real properties ought to warrant an assessment in his favour. I do not agree. It is reflective of the agreed division of contributions generally.
I am satisfied that there ought to be an assessment in favour of the husband for his superior contributions to the preservation of the property of the marriage over the three years between separation and final hearing. He deposes to these at paragraphs 116-124 of his affidavit. He first moved to and lived in the K Street property to which he improved. He has preserved the R Pty Ltd business. He has attended to the tasks of managing the O Street and the N Street properties. He has attended to administration and payments towards the loans and associated expenses across all of the properties.
The bank statements support the husband’s evidence that the wife made no financial contribution to any of the property of the parties after separation, including the Q Street property in which she lived from March 2021 to November 2022. She continued to work and earn and retained all of her own income. She effectively ‘checked out’ and took no responsibility to the preservation of any of the property. Inexplicably, despite moving out of the Q Street property and into the G Street property in about November 2022, she did not agree to the husband occupying the Q Street property and instead left it empty. The father was required to obtain interim orders in order to move back and live there with the children.
Whist the husband has had majority care of the children in recent times, this is a relatively recent development and does not warrant an adjustment in his favour relative to the length of the relationship or the length of the separation period.
I have had regard to the wife’s allegations of family violence in this case. I do not consider that they amount to the conditions or circumstances that have warranted property adjustment in precedent setting cases.
FUTURE NEEDS
(a)As declared in her Financial Statement (Exhibit A3) as at 7 July 2022, the wife is an Office Administrator and has been with the same employer for 7 years. Her gross weekly income was $1,142.
(b)By way of the representations on her behalf as to why she has not participated in the proceedings or appeared at the final hearing, she does not enjoy good mental health. Nevertheless, it appears that the wife is physically well, remains employed (or at least retains capacity to earn) and is housed in the G Street property.
(c)By his Financial Statement (Exhibit A2), the husband earns $1,500 per week as a ‘sole trader’ tradesperson. He changed from operating under the company to a sole trader after separation when the wife refused to cooperate as a director and stripped the company funds. He seeks orders to obtain all of the interests in the company which will provide him the ability to return to that operating structure if he chooses. Those orders will be made. The wife earns her income elsewhere. The company has little and is nothing without the husband working within it and running it. In practical terms it will enable him to continue the “R Pty Ltd” business.
(d)The husband gives evidence of physical ailments that will probably limit his capacity for physical labour in due course. Those are natural circumstances that do not warrant adjustment of the pool.
(e)In her Financial Questionnaire as at July 2022, when the children were in her primary care, the wife sought an adjustment of 10 per cent in her favour. The husband has had primary care, and in effect sole care, of the children since the interim orders in September 2023. The final parenting orders will see those circumstances continue. He does not give any evidence of this impacting upon his capacity to earn. The age of the children probably explains this but nevertheless, being self-employed, there will inevitably be times when his ability to work and earn is limited by his sole care of the children. The wife does not pay child support. The circumstances of this case suggest she never will. That she withdrew $23,440 from the bank accounts in the children’s names is extraordinary. The husband does not seek return or adding back of those funds but hopes the mother will return those funds to the children, whom the husband perceives to be their rightful owners.
(f)There ought to be an adjustment in the favour of the husband to account for the commitments necessary to enable his support of the children which he has a duty to maintain.
JUSTICE AND EQUITY
Having taken into account the matters in s 79(4) and the relevant matters in s 75(2), the wife’s case of a division of 80 / 20 per cent in her favour has not been made out. The husband’s case for assessment in his favour due to unequal contributions has been partially successful such that an assessment in his favour is appropriate but not to the extent he seeks of 10 per cent. His case as to future needs in light of the parenting orders has been made out but again, not to the extent of 10 per cent.
I am satisfied that it is just and equitable to make orders that account for:
(a)The husband’s superior contributions to the preservation of the property of the parties post-separation such that the contributions be assessed as to 55 per cent in his favour; and
(b)For the commitments necessary to enable the father’s support of the children, an adjustment of 5 per cent.
Accordingly, the property of the parties or either of them ought to be altered to achieve a division of 60 / 40 per cent in the husband’s favour.
The factors that need to be provided for in order to give effect to my findings with respect to the parties’ contributions and future needs include:
(a)The likelihood of the wife not co-operating or even obstructing the giving of effect to final orders;
(b)The wife retaining the G Street property;
(c)The husband obtaining sole title to the Q Street property;
(d)The husband obtaining sole title to whichever other properties are able to be retained by the husband subject to his ability to refinance and afford them;
(e)The necessity to liquidate the equity in the K Street property and/or the N Street property and/or the O Street property;
(f)The necessity to provide for the capital gains tax labilities that will arise on disposal of properties;
(g)The husband obtaining sole interest in the R Pty Ltd business;
(h)The necessity to provide for the husband’s personal taxation liabilities and the company’s taxation liabilities without effectively double counting them as an item of property subject to overall division but also as a component of the reasoning to the assessment of contributions in the husband’s favour;
(i)Each party retaining their own superannuation interests; and
(j)Adhering to my duty to make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them (s 81).
Firstly then, to the wife goes:
5
G Street
800,000
17
Loan from Mr J
-400,000
10
Motor Vehicle 2
37,000
23
Wife’s Super Fund 2
233,288
Sub total
670,288
On account of the husband contending that the Q Street and the O Street properties do not need to be sold and he seeks to retain them, to the husband goes:
1
Q Street
1,550,000
11
Joint M Bank line of credit xx…18 (Q Street)
-44,606
21
Rates arrears (Q Street property)
-12,602
6
S Company x1,350
7,493
9
Motor Vehicle 1 unregistered
0
4
O Street
800,000
12
Joint M Bank mortgage acc xx…16 (O Street)
-362,464
7
R Pty Ltd
2,000
8
R Pty Ltd (M Bank #...91)
14,897
18
Joint M Bank business loan acc xx…89
-31,940
19
R Pty Ltd 2020 and 2021 tax liabilities
-80,005
20
R Pty Ltd interest and charges post separation
-10,339
22
Husband's Super Fund 1
132,704
Sub total
1,965,138
The amount required to adjust the pool such that the parties interests are 60 / 40 per cent in the husband’s favour is $380,000 from the husband to the wife such that:
(a)The wife’s interests are $670,288 plus $380,000 being $1,050,288; and
(b)The husband’s interests are $1,965,138 less $380,000 being $1,585,138.
The husband contends that selling the K Street property and the N Street property will yield sufficient proceeds to pay out the loans securing those properties, the Joint Investment deposit loan xx…83 which is secured by all three investment properties and to provide for both parties’ estimated CGT liabilities. Those numbers are:
2
K Street
640,000
3
N Street
780,000
13
Joint M Bank mortgage acc xx…21 (K Street)
-1,990
14
Joint M Bank mortgage acc xx…10 (K Street)
-282,314
15
Joint Investment deposit loan xx…83 (K Street, N Street and O Street)
-350,395
16
Joint M Bank mortgage acc xx…91 (N Street)
-363,900
Estimated CGT liability – K Street
-57,908
Estimated CGT liability - N Street
-70,334
Sub total
293,159
The numbers are of course estimates obtained for the purposes of these proceedings. They can only become sums certain upon sale of the properties and taxation assessment. Whereafter, the proceeds and liabilities can be apportioned as to 60 per cent to the husband and 40 per cent to the wife. On the estimates, the husband would receive $175,000 and the wife would receive $117,000.
I take into account the husband’s estimated personal tax liabilities for the years 2022, 2023 and 2024 totalling nearly $140,000. It is not appropriate to include those in the pool subject to division because:
(a)They are going to be liabilities of the husband’s which accrued post separation, just as the wife’s personal taxation liabilities accrued post-separation are her own responsibility; and
(b)The husband has received the benefit of an assessment in his favour for superior post separation contributions to the preservation of the properties which included payments towards the loans and associated expenses across all of the properties. Those payments must have been made from his taxable earnings. To include the associated tax liabilities and thereby cause the wife to pay 40 per cent of those as well would be double counting.
Once the orders have all been complied with, in real terms the significant features are that:
(a)The wife will have the G Street property to live in, equity of $400,000, Motor Vehicle 2, in the order of $380,000 plus $117,000 in cash and her superannuation interests of $230,000.
(b)The husband will have the Q Street property to live in and the O Street property, together they are valued at $2,350,000. He will need to borrow $800,000 to refinance those properties and make the settlement payment to the wife. The husband will have the R Pty Ltd business but will also be solely responsible for its negative cash position of $17,043 and tax debts of $90,344. He will also retain his superannuation interests of $130,000.
(c)I have also taken into account that the husband will inherit the full CGT liability associated with the O Street property. Applying the principles in Rosati v Rosati (1998) FLC 92-804 to this case:
(i)I am satisfied that the asset is one which was acquired solely as an investment and with a view to its ultimate sale for profit which may call for an allowance to be made for any capital gains tax payable upon such a sale in determining the value of that asset for the purposes of the proceedings;
(ii)However, the likelihood or otherwise of the O Street property being realised in the foreseeable future is low. The husband intends to keep it and seeks orders for a realisation of other properties to raise the sums otherwise required;
(iii)I am not satisfied that a sale of it is inevitable, or would probably occur in the near future or there is a significant risk that the asset will have to be sold in the short to mid-term. The length of time that is likely to elapse before any sale is likely to be long.
(iv)Having regard to the above circumstances, I do not consider it appropriate to take the capital gains tax into account at its full rate or at some discounted rate.
I am satisfied, in all the circumstances, that is a just and equitable outcome.
THE PROPERTY SETTLEMENT ORDERS
The final orders are made largely in the terms sought by the husband at Exhibit A10. They have been changed so as to take into account the findings.
Orders 27 and 28 provide for the wife to retain the G Street property and the associated loan to Mr J which are both already in her sole name.
Orders 29 - 34 provide for the sale of the K Street and N Street properties including appointment of the husband as trustee for sale as that is what is deemed required for the Orders to be given effect in circumstances where the wife has wholly disengaged. The likelihood of her communicating with the husband is very low let alone agreeing or co-operating to an extent required to sell the properties. The husband is interested in maximising the proceeds of sale so there is no inherent prejudice to the wife.
Orders 35 - 40 provide for the transfer of the Q Street and O Street properties to the husband and for the payment of the settlement sum to the wife.
Orders 41(a) and 41(b) provide for the amounts due and payable by the wife to the husband in accordance with previous orders of this Court.
At proposed Order 41(c), the husband seeks an order in his favour for the costs thrown away in preparation for the final hearing that was to occur on 6 November 2023 but did not proceed in circumstances where the respondent had not filed any material nor had she filed or served any application to adjourn the final hearing. The wife nevertheless sought and obtained an adjournment in order to file and serve trial material but ultimately did not do so.
Pursuant to section 117 of the Act, each party is to bear their own costs of proceedings under the Act. Nevertheless, the Court may make such order as to costs as it considers just if there are circumstances that justify doing so, having regard to the matters prescribed by sub-section 117(2A) of the Act.
I consider the respondent’s conduct in the proceedings and her failure to comply with previous orders of the court justifies an order for costs with respect to 6 November 2023. The applicant seeks his costs fixed in the amount of $10,406.82 by reference to the Court’s scale and calculated pursuant to Schedule 1 of the Federal Circuit and Family Court of Australia (Division 2) (Family Law) Rules 2021, being:
(a)Item 8 – Preparation for a Final Hearing (2 day matter) - $6,637.98;
(b)Item 13 – Daily Hearing Fee - $2,512.56; and
(c)Item 14 – Advocacy Loading - $1,256.28.
I consider that amount to be proper.
Orders 42 - 44 provide a mechanism for taking into account the capital gains tax liability that will arise upon sale of the properties in a manner that is consistent with these reasons for judgment.
Orders 45 and 46 provide for the husband to acquire the wife’s interest in R Pty Ltd.
Orders 47 and 48 are consistent with the reasons herein.
Order 49 is made on the evidence set out at paragraph 162 of the husband’s affidavit (Exhibit A1) that “[t]here are a number of my personal [sic] in Ms Jelavic’s possession that have not been returned to me, despite numerous requests.”
Order 50 is usual and uncontroversial and responsive to s 81 of the Act.
Order 51 is made to provide for the circumstances where one or the other of the parties is recalcitrant in the execution of documents. Particularly for example, with respect to the wife’s compliance with Orders 45 and 46.
I certify that the preceding one hundred and seven (107) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Mansfield. Associate:
Dated: 6 June 2024
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