K and F
[2010] FCWA 46
•29 APRIL 2010
[2010] FCWA 46
| JURISDICTION | : | FAMILY COURT OF WESTERN AUSTRALIA |
| ACT | : | FAMILY COURT ACT 1997 |
| LOCATION | : | PERTH |
| CITATION | : | K and F [2010] FCWA 46 |
| CORAM | : | CROOKS J |
| HEARD | : | 14-17 SEPTEMBER 2009 |
| DELIVERED | : | 29 APRIL 2010 |
| FILE NO/S | : | PT 2101 of 2007 |
| BETWEEN | : | K |
| Applicant | ||
| AND | ||
| F Respondent | ||
| Catchwords: |
Court's jurisdiction to determine de facto property claim - division of assets in short relationship where "serious injustice" established - application to change child's surname
Legislation:
Family Court Act 1997, s 205Z Interpretation Act 1984, s 13A
Category: Not Reportable
[2010] FCWA 46
Representation:
Counsel:
| Applicant | : | Ms N Hossen |
| Respondent | : | Mr J Hedges |
Solicitors:
| Applicant | : | Paterson & Dowding |
| Respondent | : | Ilberys |
Case(s) referred to in judgment(s):
Chapman & Palmer (1978) FLC 90-510 Cook v Langford [2008] FamCAFC 84 FO v HAF [2007] 2 Qd R 138
Koldsjor & Addington [2009] FamCAFC 21
Kowaliw and Kowaliw (1981) FLC 91-092
McGrath and Hard [2009] FCWA 164
MW v Director-General of the Department of Community Services (2008) 244 ALR 205
Norbis v Norbis (1986) FLC 91-712
Pavey and Pavey (1976) FLC 90-051
Todd and Todd (No 2) (1976) FLC 90-008
Van Jole v Cole (2000) 26 Fam LR 228 at 231
[2010] FCWA 46
1 [Ms K] and [Mr F] have been unable to resolve Ms K’s financial claims under
the Family Court Act 1997 arising from the breakdown of their relationship. They also cannot agree on the surname to be used by their son, [Thomas], who is aged 5 years.
2 Mr F asserts the Family Court of Western Australia does not have jurisdiction to
make orders for property settlement and de facto spousal maintenance against him and opposes Ms K’s application for Thomas to be known by the surname “[K-F]”. He seeks the dismissal of Ms K’s application.
Background
3 Ms K is 41 years of age and is a school teacher.
4 Mr F is 55 years of age and is also a qualified teacher, although in recent years he has worked mainly in real estate.
5 The parties met in June 2002 and developed a close personal relationship.
6 In mid 2003 Ms K and Mr F agreed to have a child together and in August 2003, Mr F successfully underwent either wholly or substantially at Ms K’s expense, surgery to reverse a vasectomy. The parties disagree as to the basis upon which Mr F first agreed to have a child with Ms K to which I will return later.
7 In August 2004, Ms K fell pregnant for the second time after earlier losing an unborn child and Thomas was born in April 2005.
8 In December 2004 the parties began living together in the country, a property purchased in Mr F’s sole name in November 2003.
9 There were significant problems in the parties’ relationship and in March 2006, Mr F moved from that property to rental accommodation in town. Ms K remained living at the property with Thomas, caring for him full-time, until January 2007 when she moved to Perth.
10 On 20 April 2007 Mr F filed an application in relation to the parenting
arrangements for Thomas and on 1 May 2007 Ms K filed an application seeking
orders for property settlement and de facto spousal maintenance.11 The parties were able to agree on the parenting arrangements for Thomas and on
28 October 2008, orders were made which included a provision for Thomas to spend from 9.30 am Sunday to 12.30 pm Wednesday of each week in Mr F’s care and with Ms K for the other times.
12 During the trial the parties were able to agree the child support arrangements for
Thomas and on 12 November 2009, I made orders for Mr F to pay $100 per week in child support for Thomas until 31 December 2010.
[2010] FCWA 46
Relevant legislation
13 Part 5A of the Family Court Act 1997 confers jurisdiction on the Family Court of Western Australia to make orders in relation to parties who have lived in a de facto relationship.
14 Section 205Z of the Act provides as follows:-
“205Z(1) [Requirements to be satisfied]
A court may make an order in relation to a de facto relationship only if satisfied −
(a)
there has been a de facto relationship between the partners for at least two years;
(b)
there is a child of the de facto relationship who has not yet attained the age of 18 years and failure to make the order would result in serious injustice to the partner caring or responsible for the child; or
(c)
the de facto partner who applies for the order made substantial contributions of a kind mentioned in section 205ZG(4)(a), (b) or (c) and failure to make the order would result in serious injustice to the partner.”
Factors to be considered
15 Section 13A of the Interpretation Act 1984 provides inter alia:
“(1) A reference in a written law to a de facto relationship shall be construed as a reference to a relationship (other than a legal marriage) between 2 persons who live together in a marriage-like relationship. (2) The following factors are indicators of whether or not a de facto
relationship exists between 2 persons, but are not essential -
(a) the length of the relationship between them; (b) whether the 2 persons have resided together; (c) the nature and extent of common residence; (d)
whether there is, or has been, a sexual relationship between them;
(e)
the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
[2010] FCWA 46
(f) the ownership, use and acquisition of their property (including property they own individually); (g) the degree of mutual commitment by them to a shared life; (h) whether they care for and support children; (i) the reputation, and public aspects, of the relationship between them.”
16 Those factors set out in s 13A of the Interpretation Act 1984 are not essential but rather are indicators for determining whether or not a de facto relationship exists between two persons. The absence of one or more of these indicators does not prevent the Court from being satisfied that a marriage-like relationship exists.
17 In the High Court decision of MW v Director-General of the Department of Community Services (2008) 244 ALR 205 Chief Justice Gleeson, as he then was, made various observations about the nature of de facto relationships in Australian society.
18 Whilst the Chief Justice was not considering in that case the provisions of de
facto legislation and the list of factors I have earlier noted, Thackray CJ in McGrath and Hard [2009] FCWA 164 referred to Justice Gleeson’s views as having “considerable persuasive value”. I respectfully agree with his Honour’s remarks.
19 In paragraphs 10 to 14 Gleeson CJ said [emphasis added]:
[10]
Finn J was correct to stress the difference between living together and living together “as a couple in a relationship in the nature of marriage or civil union”. The relationship between two people who live together, even though it is a sexual relationship, may, or may not, be a relationship in the nature of marriage or civil union. One consequence of relationships of the former kind becoming commonplace is that it may now be more difficult, rather than easier, to infer that they have the nature of marriage or civil union, at least where the care and upbringing of children are not involved. (As will appear, the qualification is significant in the present case.)
[11]
When divorce, for various reasons, was more difficult, in former times, de facto relationships often existed because there was an impediment to legal marriage. A common impediment was a subsisting marriage of one of the parties. Marriage, in Australia and New Zealand, involves legal requirements of formality, publicity and exclusivity. A person may be a party to only one marriage at a time. De facto relationships, on the other hand, do not involve these elements. They are entered into, and may be dissolved, informally. In Australia, marriages are required to be entered on a public register. In New Zealand, marriages and civil unions must be registered. Parties to marriages and civil unions do not have a choice as to whether, when and by what means they will disclose their status to the public. It goes without saying that there
[2010] FCWA 46
is no mandatory public registration of sexual relationships, even if they involve cohabitation. De facto relationships may co-exist with the marriage of one or both parties and, at least in some circumstances, people may be parties to multiple de facto relationships. Yet the law to be applied in this case acknowledges that some are, and some are not, in the nature of marriage. How is the difference to be determined? No single and comprehensive answer to that question can be given, but there is one test that is applicable to the present case.
[12] In Stack v Dowden, Baroness Hale of Richmond said:
[45] Cohabitation comes in many different shapes and sizes. People embarking on their first serious relationship more commonly cohabit than marry. Many of these relationships may be quite short-lived and childless. But most people these days cohabit before marriage … So many couples are cohabiting with a view to marriage at some later date — as long ago as 1998 the British Household Panel Survey found that 75% of current cohabitants expected to marry, although only a third had firm plans: John Ermisch, Personal Relationships and Marriage Expectations (2000) Working Papers of the Institute of Social and Economic Research: Paper 2000– 27. Cohabitation is much more likely to end in separation than is marriage, and cohabitations which end in separation tend to last for a shorter time than marriages which end in divorce. But increasing numbers of couples cohabit for long periods without marrying and their reasons for doing so vary from conscious rejection of marriage as a legal institution to regarding themselves “as good as married” anyway: Law Commission, Consultation Paper No 179, Part 2, para 2.45. [13] There is no reason to doubt that the same is generally true of Australia and New Zealand. It may be added that, in Australia, what often prompts cohabiting couples to marry is a decision to have a child, and to do so within the context of a marriage. People often refer to this as “starting a family”. The cohabiting parties to many relationships, especially first relationships of the “short-lived and childless” kind, may be surprised to be told that they are involved in a relationship in the nature of marriage or civil union. They may intend no such thing. The same may apply to some people in longer-term cohabitation who have chosen not to marry. It is the common intention of the parties as to what their relationship is to be, and to involve, and as to their respective roles and responsibilities, that primarily determines the nature of that relationship. The intention need not be formed in terms of legal status: to some people that is important; to others it is a matter of indifference. (By hypothesis, the parties to
[2010] FCWA 46
a relationship that satisfies the statutory description are not married, or in a civil union.) The intention may be expressed, or it may be implied. What is relevant is their intention as to matters that are characteristic of a marriage or a civil union, but that do not depend upon the formal legal status thus acquired. To describe a relationship as being in the nature of marriage implies a view about the nature of marriage. The same applies to a civil union. It is unnecessary, for present purposes, to attempt a comprehensive account of the features of a relationship that might justify such a description. Plainly, “living together” is not enough. For present purposes it is sufficient to focus upon that aspect of the relationship between the appellant and the father that gives rise to this dispute, that is to say, shared parenthood, and upon the inferences as to intention that may be drawn from that.
[14] In Magill v Magill, and earlier in Russell v Russell, reference was made to the historical role of the institution of marriage as a means of involving males in the nurture and protection of their offspring, and to the importance of the structure of marriage and the family in sustaining responsibility for, and obligations towards, children. There is a wide range of human behaviour across the spectrum between a sexual encounter and a marriage or civil union. It includes relationships which could never be described as being in the nature of marriage or civil union. Nevertheless, when a sexual union results in the birth of a child, cohabitation between the parties to the union is no longer a matter of purely personal convenience or satisfaction. The interests of a third party have intervened. Traditional concepts of marriage and the family as institutions for the protection of children, and modern concepts of shared parental responsibilities even in the absence of a formal union, may come into play in characterising the relationship. The present case provides an example. [footnotes omitted]
The evidence relied upon at trial
20 Ms K was represented at the hearing by Ms Noelle Hossen of Counsel. She gave evidence and also relied upon the following documents:
(a) her trial affidavit filed 27 May 2009; (b) her Form 13 Financial Statement filed 27 May 2009; (c) affidavit of [Mr BK] filed 13 May 2008; (d) affidavit of [Ms D] filed 4 June 2009; and (e) affidavit of [Ms IK] filed 27 May 2009.
21 Mr BK, Ms D and Ms IK were not required for cross-examination.
[2010] FCWA 46
22 Mr F was represented at the hearing by Mr John Hedges of Counsel. He gave evidence and also relied upon the following documents:
(a) his trial affidavits filed 12 May 2008 and 17 October 2008; (b) his Form 13 Financial Statement filed 12 May 2008; (c) affidavit of [Ms A] filed 18 April 2008; and (d) affidavit of his partner [Ms B] filed 12 May 2008.
23 Ms B was cross-examined on her affidavit and appeared to tell the truth as she
saw it. Ms A was not required for cross-examination. Her evidence dealt with Mr F’s care of Thomas and was no doubt prepared when the Court was also to make decisions on the parenting arrangements for Thomas.
Conflicting evidence
24 This is not a case where I intend to accept the whole of the evidence of one party
where it conflicts with the evidence of the other. I have some concerns about the
reliability of each party’s evidence.25 Mr F’s evidence at the hearing was, on occasion, inconsistent with his affidavit
material. For example, Mr F said during cross-examination that the parties agreed Ms K would look after Thomas full-time for the first 12 months. This was in conflict with paragraph 65(a) of Mr F’s affidavit filed 20 June 2007 where he said the agreement initially reached with Ms K was that she would be at home caring for Thomas full- time for the first two years before Mr F would take time off work to care for Thomas.
26 I am satisfied Ms K was less than frank when she completed her Client
Information Form filed 21 May 2007. At paragraph 18 Ms K explained the current dispute between herself and Mr F and said she “wishes to relocate to reside in Perth and the father seeks that the mother relocate back to the country town”. When cross-examined Ms K conceded she had made an offer to purchase a home in the regional centre in mid May 2007 with the intention of moving to the regional centre to live. I am satisfied that by 21 May 2007 when the information form was signed, Ms K’s intention was not to live in Perth at least in the longer term, and her failure to mention this in the information form reflects poorly on her.
27 There were other aspects of Ms K’s evidence which in my view were far from
convincing. At paragraph 5 of her first trial affidavit filed 12 May 2008 Ms K said “Mr F and I commenced a de facto relationship in December 2004 and separated in early March 2006 albeit Mr F disputes the date of separation”. Ms K was cross-examined about the change from this position to the assertion in her affidavit filed 27 May 2009 that she and Mr F commenced a marriage-like relationship in June/July 2003.
28 After the parties’ separation, Ms K instructed law firm, Haynes Robinson to act
for her and they corresponded with Mr F’s former solicitor, Helen Marshall. Ms K’s
[2010] FCWA 46
lawyer first wrote to Mr F on 12 April 2006 (Exhibit 3). Paragraphs numbered 1 and 4
of that letter are as follows:
“1. You commenced cohabitation with our client in December 2004,
having been in a close relationship together since 1 June 2003.4. You lived together as a de facto couple between 23 December 2004 and 3 March 2006, enjoying a monogamous and committed relationship from 1 June 2002 to the date of separation on 3 March 2006. You presented yourselves to your family and friends as a de facto couple.”
29 In response to this letter from Ms K’s lawyer, Helen Marshall in her letter dated
23 May 2006 (Exhibit 4) asserted that the parties cohabited for less than two years making it necessary for Ms K to establish that she would suffer “serious injustice” before an order for property division could be made in her favour. Ms K said in relation to this letter from Mr F’s lawyer “I may have received Helen Marshall’s letter but I don’t recall it.”
30 In response to Helen Marshall’s letter, Haynes Robinson advised in paragraph 2 of their letter dated 16 June 2006 (Exhibit 5):
“We do not agree with your comments regarding jurisdiction and/or grounds for a claim made in paragraph 2 of your letter. Nevertheless, we are obtaining counsel’s opinion to confirm our view of the jurisdiction and/or grounds for a claim in the Family Court of Western Australia”.
31 Ms K said she did not recall discussing the issue of jurisdiction with Haynes
Robinson.
32 Ms K’s lawyers wrote again to Mr F’s lawyers on 26 September 2006 (Exhibit 6) which included the following:
“We have obtained counsel’s opinion as to the jurisdiction of the Family Court of Western Australia in this matter and the likely outcome of a claim by our client.
It is our view that there is clearly a jurisdictional connection in this matter pursuant to Sections 205Z(b) and (c) of the Family Court Act, as our client would be entitled to orders for:
1. maintenance, and
2. settlement of property.”
33 When asked to comment on the stated opinion of counsel that the Court had
jurisdiction under s 205Z(1)(b) and (c) of the Family Court Act 1997 but made no reference to the parties having a de facto relationship of more than two years, Ms K again could not recall any mention of the Court’s jurisdiction in discussions with her lawyer. At another point in her evidence, Ms K denied ever having discussed the Court’s jurisdiction to determine her claim with her then lawyer.
[2010] FCWA 46
34 Whether or not the parties did live in a marriage-like relationship is ultimately
a question of law to be determined by the Court and Ms K is entitled to alter her position prior to the hearing which is what has occurred. Nonetheless, Ms K’s attempts to explain her change of position by her evidence that she could not recall any discussions on the issue of the Court’s jurisdiction with her former lawyers and with her present lawyers “until the day before the last trial” was not convincing.
35 Given my concerns about the accuracy of both parties’ evidence, I intend to
make findings on the conflicting and relevant evidence between the parties assisted by
such documentary or independent evidence as is available.
Manner of dealing with Ms K’s application
36 I intend to deal first with Ms K’s assertion that the parties lived in a de facto
relationship for at least two years. If Ms K is able to satisfy the Court on the balance of probabilities that this is the case, the Court has jurisdiction to consider the merits of Ms K’s financial claims without having to be satisfied she would suffer “serious injustice” within the meaning of s 205Z(1)(b) and (c) as earlier noted.
Parties’ positions
37 Ms K asserted she started to live in a “marriage-like relationship” with Mr F in
mid 2003, although she agrees the parties did not live together in the same house until 23 December 2004. Ms K further asserts the parties’ marriage-like relationship continued until late February 2006, and in early March 2006 Mr F left the home the parties shared at the country address.
38 Mr F agreed the parties had a relationship for more than two years but denies it
was a de facto relationship. He asserts the parties commenced a de facto relationship when they began living together in December 2004 and they separated in November 2005 when he moved out of the country property.
When did the parties commence a “marriage-like relationship?
39 Determining when a relationship becomes a de facto relationship is often
associated with much difficulty. This was observed by Keane JA in FO v HAF [2007]
2 Qd R 138 where his Honour said at paragraph [21]:“The commencement of the legal relationship of marriage is readily established by the solemnities and formalities by which the parties declare that relationship to each other and to the world. By contrast, questions as to whether and when a relationship has become a de facto relationship may be attended with considerable uncertainty.”
40 I have earlier referred to s 13A(2) of the Interpretation Act 1984 which sets out a list of indicators as to whether a de facto relationship exists.
41 There is no dispute that a number of the indicators set out in s 13A(2) existed in “mid 2003” when Ms K asserts the parties commenced a marriage-like relationship.
[2010] FCWA 46
42 From their first meeting in June 2002, the parties developed a very close and intimate relationship and I accept that by mid 2003:
(a) the parties socialised together with family and friends on a regular, if not frequent basis and were regarded as a couple; (b) they enjoyed various outdoor activities together such as fishing, kayaking and walking the dog; (c) they spent frequent and regular periods staying over in each other’s homes, sharing a bedroom. Although the parties disagreed as to the number of nights they spent in each other’s home, Mr F conceded by 2003 it averaged two nights each week, apart from school holiday periods when they spent more time together; (d) the parties exchanged gifts; (e) they attended family celebrations together; (f) the parties holidayed together which included trips to holiday resorts; (g) the parties cooked meals together at each other’s homes on a frequent basis for their mutual enjoyment and Ms K also prepared meals for Mr F’s father who was in poor health at the time; (h) they comforted and supported one another during times of sadness and illness; and (i) the parties enjoyed an active sex life together and there was no evidence to suggest either party had other sexual partners from mid 2003.
43 As earlier noted Ms K asserts in mid 2003 the parties started a marriage-like
relationship although they continued to live in separate houses. At this time Ms K was living at the home she purchased in January 2003 at a Perth suburb and Mr F was living at his home nearby.
44 Ms K says that in 2003 her relationship with Mr F “progressed significantly and
in June/July 2003 Mr F wanted to try for a baby and said that money was not an issue
and that he would support us and have a vasectomy reversal.”45 Mr F disputes Ms K’s evidence as to the circumstances of their agreement to
have a child together. He says that in July 2003 Ms K raised with him her desire to have a child and that he told her “I was reluctant at my age to take on the financial and other responsibilities associated with having and rearing a child”. Mr F asserted he made it clear to Ms K he wanted no financial commitment to her and said he “had the operation as Ms K had continually assured me that she could afford to support our child without financial help from me.”
[2010] FCWA 46
46 Ms K fell pregnant in late 2003 and lost the child in late January 2004. The
parties agree that at about this time the parties’ relationship suffered. Ms K says that
Mr F “withdrew emotionally and physically”.47 It is not in dispute that after Ms K lost the child she wrote to Mr F concerning their relationship. The letter is Annexure B to Mr F’s affidavit filed 12 May 2008.
48 Ms K’s letter, which was written in about late January 2004, includes the following paragraphs:
“I wanted to clear something up with you. I didn’t reneg on our arrangement with the money. I know you think that’s what I was upset about it – but it wasn’t. I made an arrangement with you – & I’d stick to it.
…
I do accept that you don’t want any responsibility financially or otherwise & I will not ask anything of you. However, I would dearly love your support during a pregnancy should it happen.
I accept more than you think & understand to some degree about your wish not to take responsibility (as above).”
49 Ms K was cross-examined on the letter and said she was upset and fearful at the time and wrote to Mr F trying to “appease him”.
50 Ms K further said when she mentioned her accepting Mr F did not want any
responsibility she was referring not to his present position but rather to what his position was in 2002. If that was the case, I find it very difficult to understand why Ms K would then go on in her letter in very clear terms, to highlight words in the passage “I will not ask anything of you.”
51 I am not satisfied that Ms K was referring in her letter to Mr F’s position to have
a child with her as it was in 2002. The letter is consistent with Mr F’s evidence that when the parties discussed having a child together in mid 2003 he did not want any commitment or responsibility from Ms K having a child and I accept Mr F’s evidence on this point. This is not supportive of there being a marriage-like relationship between the parties in mid 2003.
52 Mr F does not dispute that after the parties had a ceremony for the child Ms K
lost in late January 2004 his attitude toward having a further child changed, he became involved emotionally and did agree he would take on financial responsibility for the child’s support early in Ms K’s second pregnancy.
53 The parties' degree of financial dependence or interdependence and any arrangements for financial support between them is a further factor to be considered.
54 To further support Ms K’s assertion that the parties had a “marriage-like”
relationship in mid 2003, she says the parties agreed to live together in the country town and purchase a home together. It is common ground that Ms K’s father told the
[2010] FCWA 46
parties about the property which was available for sale and the parties looked over this property together. Mr F denies however that the parties intended to jointly purchase the property and there is no dispute that Mr F purchased this property in his sole name which was finalised in December 2003. Ms K does not suggest she contributed financially to the purchase of the property nor that she had any other financial involvement with the original purchase of the property.
55 There was no inter-mingling of funds between the parties, nor did they operate
any joint accounts. After the property was purchased Ms K continued to live in her home in the Perth suburbs and met repayments on her property and Mr F did likewise in relation to his home in a nearby suburb. This again is not supportive of there being a marriage-like relationship between the parties in mid 2003.
56 Mr F does however concede it was the parties’ intention from the time he
purchased the property to ultimately live together in that property. It is further not in dispute that the parties stayed together during holiday periods at the country property after it was purchased and Ms K contributed to the planning and work with renovations to the property which were commenced before the parties moved in together in December 2004. She also spent some funds of her own on improvements to the property. These are facts which support the parties’ commitment to share a life together in the country property.
Conclusion
57 I have earlier referred to a number of the indicators set out in s 13A(2) of the
Interpretation Act 1984 which existed in mid 2003 and were supportive of Ms K’s assertion that the parties did have a marriage-like relationship. Other indicators considered were not supportive of there being a marriage-like relationship between the parties in mid 2003. Ultimately, it is for Ms K to satisfy the Court that there has been a de facto relationship between the parties for at least two years.
58 After considering the totality of the evidence I am not satisfied on balance that
Ms K has discharged that onus. In reaching this conclusion I have placed particular significance on the parties’ decision not to live together until 23 December 2004. This is not a case, for example, where the parties’ decision to live in separate homes before December 2004 arose from reasons associated with employment or perhaps the health of one of the parties or a relative. Here, I accept there was no impediment to the parties living together in one or other of their homes in Perth before they moved to Denmark in December 2004. They chose not to live together.
59 There were also times post mid 2003 when I am satisfied Mr F’s commitment to
the relationship was much less than Ms K’s commitment who wanted far more than Mr F was prepared to offer. This is confirmed by Ms K’s letter to Mr F in January 2004 which I have earlier noted.
60 Whilst the parties intended to live together in the country property when it was
purchased in December 2003, until they commenced to do so in December 2004 I am not satisfied overall that there was a mutual commitment by the parties to a shared life in a marriage-like relationship.
[2010] FCWA 46
61 For these reasons, I conclude that a de facto relationship existed between the parties from 23 December 2004.
When did the parties’ de facto relationship end?
62 It is not in dispute there were significant problems in the parties’ relationship in
late 2005. Mr F asserts the parties separated in November 2005 when he moved from the property to the local caravan park. Ms K agreed that Mr F moved, but denied this ended their relationship.
63 In Pavey and Pavey (1976) FLC 90-051 the Full Court considered the issue of separation in a situation where the parties had been married. In that matter the Full Court affirmed the decision in Todd and Todd (No 2) (1976) FLC 90-008, where the Court stated:
"In my view “separation” means more than physical separation — it involves the destruction of the marital relationship (the consortium vitae). Separation can only occur in the sense used by the Act where one or both of the spouses form the intention to sever or not to resume the marital relationship and act on that intention, or alternatively act as if the marital relationship has been severed."
64 In my view these principles should also apply to de facto situations.
65 I am not satisfied the parties’ relationship came to an end in November 2005. After spending about two weeks at the caravan park Mr F returned to live at the country property. In December 2005 the parties travelled together to Perth and spent between 19 and 23 December 2005 at Mr F’s property in Perth sleeping in the same bed. Although the parties disagreed over whether they had sex after Mr F left the property in November, I do not view this as particularly significant. The parties celebrated Christmas together and had counselling, hoping to improve their relationship. The evidence does not suggest either party communicated an intention to the other to end the relationship when Mr F left the country property in November 2005. In my view, the parties separated in late February 2006. Ms K contacted Centrelink on 27 February 2006 to give notice of her intention to claim a single parenting payment as a result of the breakdown in the relationship and Mr F moved out of the property shortly thereafter in early March 2006.
66 It is my conclusion therefore that there has been a de facto relationship between the parties from 23 December 2004 until 27 February 2006.
Will Ms K suffer “serious injustice” if she is prevented from bringing a financial claim?
67 Given I am not satisfied there has been a de facto relationship between the
parties for at least two years I must consider whether a failure to make an order for property settlement would result in a “serious injustice” to Ms K within the meaning of s 205Z(1)(b) or (c).
[2010] FCWA 46
68 The term “serious injustice” where it appears in s 205Z is not defined in the
Family Court Act.
69 To assist in understanding what is meant by “serious injustice” I was referred to
the decision of Riley J in Van Jole v Cole (2000) 26 Fam LR 228 at 231, a case where his Honour was dealing with that expression in s 46 of the De Facto Relationships Act 1991 of the Northern Territory. His Honour determined that the expression “serious injustice” is to be understood as it is commonly used in the English language meaning “a considerable wrong or unfairness”. I respectfully adopt his Honour’s interpretation for the expression “serious injustice” where it appears in s 205Z.
70 Ms K asserts that the Court’s failure to make an order under s 205Z(1)(b) or (c)
would result in a serious injustice to her. If she is entitled to bring a claim Ms K seeks that Mr F pay her $180,000. Mr F offers no financial settlement and seeks that Ms K’s application be dismissed. He submits Ms K would not suffer a “serious injustice” if there is a refusal to make orders in her favour.
The parties’ asset position
71 The parties were able to reach agreement as to the value of their assets and superannuation entitlements and their agreed position is set out in the following table:
Property
| Description | Ms K | Mr F |
| Assets | ||
| House in regional centre | 425,000 |
| Bank account (Applicant) | 5,501 |
| 2006 vehicle | 14,000 |
| Household contents | 2,470 |
| Suburban house | 800,000 |
| House | 450,000 |
| House | 440,000 |
| Country house | 465,000 |
| Land | 295,000 |
[2010] FCWA 46
| Land | 147,500 |
| Land | 360,000 |
| Land (recently sold) | 290,000 |
| Half share in property | 150,000 |
| Respondent’s bank accounts | 8,075 |
| Respondent’s Westpac investment property account | 9,182 |
| Motor vehicle | 15,000 |
| Furniture & contents | 10,000 |
| Shares | 54,935 |
| Paid legal fees (added back) | 43,440 |
| Paid legal fees (added back) | 54,000 |
| Total assets | 490,411 | 3,548,692 |
| Liabilities | ||
| Loan accounts property (RAMS) | 310,650 |
| Visa | 959 |
| Tax liability | 45,761 |
| Mastercard | 2,027 |
| Centrelink debt | 5,554 |
| Respondent’s Westpac visa | 2,284 |
| Westpac Equity Access Loan A/C | 270,000 |
| Westpac Equity Access Loan A/C | 45,988 |
| Westpac Equity Access Loan A/C | 49,971 |
| Loan account RHG | 445,000 |
| Loan account RHG | 60,000 |
[2010] FCWA 46
| Loan account [F Rd & L St ] | 265,515 |
| Loan account [B Pd & HH] | 346,000 |
| Loan account xxxxx | 150,000 |
| Loan account xxxxx | 99,000 |
| Loan account [P L] | Nil |
| Loan account Citibank – [K] | 350,000 |
| Loan account Citibank – [L] | 117,250 |
| Total liabilities | 364,951 | 2,201,008 |
| Total net assets | $125,460 | $1,347,684 |
72 The total of the parties’ net assets is therefore $1,473,144.
73 In addition to the parties’ agreed net asset position they have the following agreed superannuation entitlements:
| Superannuation Entitlements | Ms K | Mr F |
| GESB Weststate Superannuation | 15,284 |
| GESB Goldstate Superannuation | 176,957 | ||
| GESB Superannuation Entitlements | 55,135 | ||
| Total superannuation entitlements |
| ||
| Initial financial contributions |
Ms K’s position
74 When the parties commenced living together in December 2004 Ms K says she had the following assets:
| Assets | Estimated Value |
| Suburban house | E240,000 |
[2010] FCWA 46
| Country house | E200,000 |
| Savings | 10,000 |
| Furniture and contents | 5,000 |
| Motor vehicle | 7,000 |
| Total: | $462,000 |
| Liabilities | |
| ING housing loan suburban property | 147,000 |
| Housing loan for the country property | 50,000 |
| Total: | 197,000 |
| Total Net Assets | $265,000 |
| Financial Resources | |
| GESB Superannuation | E50,000 |
75 No historical valuation for the suburban property and the country property were
produced. Nonetheless I intend to accept Ms K’s estimates as indicating the appropriate value of the assets she owned in December 2004 for the following reasons:
(a)
Mr F did not seek to challenge the estimates given by Ms K, which were set out in her first trial affidavit filed 12 May 2008;
(b)
the suburban property, which Ms K estimated to be worth $240,000 in December 2004, was sold for $325,000 on 4 July 2006 and no evidence was led to suggest any significant improvements were made to the property from the time the parties first lived together to the time of sale; and
(c)
the country property, which Ms K estimated to be worth $200,000 in December 2004 was a vacant block of land which she sold in April 2008 for $305,000.
Mr F’s position
76 When the parties first started living together Ms K says Mr F had the following assets and superannuation entitlements:
| Assets | Estimated Value |
[2010] FCWA 46
| Country property | 350,000 |
| Suburban house | 600,000 |
| House | 350,000 |
| House | 350,000 |
| Vehicle | 30,000 |
| Furniture and contents | 3,000 |
| Shares | NK |
| Funds in bank accounts | NK |
| Superannuation entitlements | NK |
| Total known assets | $1,683,000 |
| Liabilities | NK |
77 Mr F did not seek to challenge Ms K’s estimate of the real estate values set out
in the above table other than in respect of the suburban property. Scott Grundmann, who is a licensed valuer, placed a value of $460,000 on the suburban property at 15 December 2004. There is no reason why I should not accept his valuation. This results in the total value of Mr F’s known assets being reduced to $1,543,000 in December 2004, without taking into account the liabilities on his Perth real estate.
78 Whilst the evidence is not such as to enable me to determine the value of Mr F’s
shares, savings and superannuation nor the extent of Mr F’s liabilities in December 2004, there appears little doubt overall Mr F was in a significantly stronger financial position than Ms K when the parties started living together.
Contributions
Contributions prior to separation
79 Ms K asserts she made significant contributions to the country property which
commenced before the parties started living together in December 2004 and continued
after they moved to the country house.80 It is well established that contributions made before parties start living together
can be considered when assessing contributions in a case where parties are married and in my view this approach should also be adopted when contributions are assessed in a de facto relationship.
81 It is not in dispute that in the latter half of 2003 the parties discussed living
together and buying a home in the country. I also accept that in about mid November
[2010] FCWA 46
2003 the parties travelled to the country to inspect the property which had been drawn to their attention by Ms K’s father. Although I do not find the parties intended the property should be owned jointly, I accept both parties were involved in discussions concerning the purchase of the property and agreed they would live in the property together. The purchase of the property was completed in December 2003, having been acquired in Mr F’s sole name as earlier noted. At paragraph 61 of Mr F’s affidavit filed 12 May 2008 he says amongst other things:
“I paid the deposit on the property and the stamp duty on the transfer. I arranged the finance to acquire the property and paid all the mortgage instalments on the property from the date of its acquisition until now.”
82 The amount Mr F paid as the deposit on the purchase was not clear from the
evidence. It could not have been significant. The property was purchased for $240,000 and the Transfer of Land document for the purchase (Exhibit 7) disclosed that stamp duty of $9,180 was paid on the transaction.
83 It is not in dispute that Mr F initially borrowed $250,000 for the purchase of the
property. It appears therefore the total purchase price and at least the bulk of the
establishment costs including stamp duty were fully financed.84 I accept that after the property was purchased the parties made regular trips to the country and would stay over for weeks at a time at the property.
85 Mr F did not seek to challenge Ms K’s evidence, which I accept, that in the latter
part of 2004 she began to gather quotes and arranged for renovations to be carried out at the property. She also assisted with some of the work herself. I intend to take these pre-cohabitation contributions to the property by Ms K into account.
86 At paragraph 51 of Ms K’s affidavit filed 27 May 2009 she summarised the
work carried out in connection with the renovations to the property and the assistance received from her father. When cross-examined Ms K conceded most of the work summarised in paragraph 51 was completed after the parties moved in together. Mr F says Ms K“made a small financial contribution by paying for repairs to the back step and the installation of a sink and bench tops in the kitchen”. It is not in dispute the amount Ms K paid towards the renovation costs was approximately $5,000.
87 Apart from her small financial contribution I am satisfied Ms K made
a significant contribution to the work and improvements completed to the property and she devoted a considerable amount of time to the work. I also accept Ms K’s father assisted the parties with the work as detailed by Ms K and she should be the party who benefits from the relatively small contributions from her father.
88 The parties agree that Mr F paid $37,906 in respect of the improvement costs
made to the property. What is not clear, however, is how these costs were funded. More likely than not, these costs were also sourced from borrowings secured against the property. I have reached this conclusion for the following reasons:
(a) Mr F led no evidence to prove otherwise.
[2010] FCWA 46
(b) the improvements for which Mr F paid $37,906 were completed by the end of the financial period ended 30 June 2005. It appears by this time, the loan amount against the property had increased from the original borrowing of $250,000 to $290,000.
89 Before the parties moved to the country in December 2004 they each lived in
Perth and were employed as teachers. When Ms K moved to the country she was about five months pregnant. She left her job in December 2004 and rented out the suburban property for about $120 per week which was applied directly to the mortgage payments on the property. The rent did not fully cover her loan repayments and outgoings on the property and Ms K also had loan repayments on the country house to meet. It was not in dispute that before the parties separated Mr F paid Ms K amounts totalling $15,000 in three instalments which, I accept, were likely used by Ms K towards the loan commitments and outgoings on her properties after her savings of about $5,000 were spent. I also accept the payments from Mr F totalling $15,000 and the interest payments on the borrowings he made for the original purchase and improvement of the property were met by further borrowings made by Mr F.
90 Mr F asserts he assisted Ms K when she lived at the suburban property with “the
renovation of the backyard” and the “maintenance of the interior of the property”. Ms K conceded Mr F fixed the reticulation at the property as a birthday gift to her and helped with other work, including:
• digging a fish pond and laying rocks; • removing and stacking bricks; • helping a friend fix the kitchen cupboards and front door; • digging a hole which was cemented to support a screen; • filling a Ute with mulch for the garden a few times. 91 Ms K says, and I accept, that prior to the parties living together in the country
they would frequently spend time at each other’s home in Perth, would garden together and generally assist one another. I am satisfied each of the parties benefited from help received from the other at their respective properties in Perth and I do not intend to give any significant weight to such work from either party.
92 During the period the parties lived together at the country property Mr F was the
breadwinner. He paid the household accounts and met the parties’ living expenses. Ms K conceded Mr F also paid her about $2,000 which Ms K is likely to have spent on her personal needs such as clothing. Mr F initially worked full-time at the local school after moving to the country, before cutting back to a four day working week before the parties separated.
93 After Mr F moved to the country he rented his home and his income tax return
for the financial year ended 30 June 2005 disclosed that Mr F also received rental income from his properties from two rental properties. The rental income from those properties did not, however, fully cover the property expenses in that tax year. The tax return disclosed that Mr F incurred losses totalling about $18,000 on his three rental properties which were presumably funded from Mr F’s income or by further increasing his borrowings.
[2010] FCWA 46
Property acquisitions during cohabitation
94 During the cohabitation period Ms K retained her properties in the suburbs and
the country. She did not acquire any additional assets. Mr F also retained the
properties he owned when the parties started living together.95 In about March 2005 Mr F purchased a development property in the Perth
suburbs for $145,520 including costs. The purchase was fully financed. Mr F’s tax return for the financial year ended 30 June 2006 disclosed the property was sold in June 2006 for $270,000 and resulted in a capital gain of $82,596 after subdivision costs from which tax was payable on $41,298. It is common ground the sale proceeds from the property were used by Mr F to reduce his level of debt.
Contributions to the welfare of the family including in the capacity of homemaker and parent
96 When the parties lived together, I accept Ms K did the vast majority of the
household tasks and looked after Thomas on a full-time basis. There is no criticism at all of the way in which Ms K carried out these roles in the home. Indeed Mr F concedes she was a “superb” homemaker and parent.
Contributions post-separation
97 As earlier noted, Mr F left the property in March 2006. Ms Kcontinued to live at
the property and looked after Thomas on a full-time basis. I accept she was a committed parent. Ms K supported herself from Centrelink benefits and child support from Mr F. Mr F also paid $548 for Ms K to fly to Sydney to see her sister in about July 2006.
98 Annexure “D” to Ms K’s trial affidavit filed 27 May 2009 is a schedule of the
child support Ms K says she received from Mr F. Between March 2006 and October 2007 I accept Mr F paid Ms K$545.67 per month. Thereafter the monthly payments varied from nil during one or perhaps two months to a high of $791.50 in one month between November 2007 and April 2009.
99 Whilst I am satisfied overall Ms K has been primarily responsible for Thomas’s
financial support since the parties’ separation, she did have the benefit of living rent free at the property until she left the town in January 2007. Following separation Mr F also paid the interest payments on the mortgage and the property outgoings which I have found to have been paid by increasing borrowings.
Sale of the Perth suburban home
100 In July 2006 Ms K sold the property for $325,000. After paying out the
mortgage debt and selling costs she netted $167,656. From this amount Ms K purchased a vehicle which cost her approximately $28,000 after the trade-in allowance on her previous vehicle. Ms K also used funds from the sale of her property to pay legal fees which have been added back to the asset pool for division.
[2010] FCWA 46
101 After Ms K left the property with Thomas in January 2007 she moved to rental
accommodation in Perth for which she was obliged to pay $200 per week. Ms K says, and I accept, she also used proceeds from her property towards her ongoing living expenses and spent approximately $30,000 towards the purchase of a property in the regional centre, which cost $425,000.
Sale of the country property
102 In April 2008 Ms K sold her property for $305,000 and after paying out the outstanding mortgage debt and selling costs she received the net sum of $220,500. From these proceeds Ms K repaid a debt of $25,400 to her father who lent Ms K funds towards the purchase of the house in the regional centre and she used further funds to reduce the mortgage debt on the property to approximately $245,000.
Mr F’s property developments and circumstances post-separation
103 Mr F started real estate work in 2005 when the parties were living in the country
property. I have earlier referred to the purchase and subdivision Mr F completed at the Perth suburban property. Mr F continued working as a teacher for about 12 months after the parties’ separation. He then took long service leave and stress leave from his teaching work in 2007 and took a further 12 months off in 2008. Mr F concedes he could have returned to teaching in 2008 but made no effort to do so. His lawyers indeed wrote to Ms K’s lawyers on 22 October 2008 (Exhibit 20) which included the following paragraph:
“We are instructed that our client proposes to await the decision of the Judge in the upcoming proceedings in the Family Court before considering whether or not he will return to teaching in 2009.”
104 During the financial year ended 30 June 2008 Mr F’s income from teaching had fallen to $20,843 gross (Exhibit 19) and for the year ended 30 June 2009 was $6,831 gross (Exhibit 11).
105 Mr F moved to Perth in April 2007 and resumed living at his home. Mr F says
that he moved to Perth so that he could be close to Thomas who had moved to Perth with Ms K a few months earlier. I do not doubt this was a significant factor in Mr F’s decision to move his home to Perth, but I suspect his relationship with Ms B, who was living in Perth at the time, also played an important part.
106 Although Mr F took an extended break from teaching as from 2007 he continued
his development work and since separating from Ms K he has purchased the following
properties which are included in the table of agreed assets earlier set out:1. Lots 887 and 889;
2. Lot 888;
3. Lot 613;
[2010] FCWA 46
4. Lots 1 and 2; and
5. Half share in Lot 246.
107 To finance these post-separation property acquisitions, Mr F has taken on further
debt which is also set out in the asset table. When financing a property purchase, Mr F has generally borrowed the full purchase price and anticipated interest payments on these borrowings and the development costs. If necessary, Mr F would also offer his other properties for security for the borrowings. It appears the country property secures borrowings Mr F has made to purchase and develop real estate. These borrowings have also been used by Mr F for legal expenses which have been added back to the asset pool. Mr F has also used borrowed funds for his living expenses hoping, no doubt, that profits from his property developments could reduce his debt.
108 As best Mr F could estimate his living expenses for the two and a half years
since he moved to Perth have been approximately $120,000 (Exhibit 23) and these expenses included the costs of a four week European holiday in June 2008, which Mr F went on with Ms B. Mr F acknowledged that for the month of his holiday he paid Ms K$261 in child support for Thomas.
109 Mr F and Ms B started living together in Perth in December 2008 and moved to the country property in early 2009.
Parenting arrangements for Thomas post-separation
110 When the parties separated Thomas was less than one year of age. Ms K
continued to look after him on a full-time basis and until mid 2007 when she started doing some part-time work. Ms K’s post-separation contributions caring for Thomas were significant.
111 Mr F filed an application on 20 April 2007 after Ms K relocated with Thomas to
Perth and on 19 July 2007 orders were made for Thomas to spend time with Mr F during the day from 9:30 am until 4:30 pm on Saturday, Monday, Tuesday and Friday in each 14 day period.
112 In October 2007 Mr F’s time with Thomas was extended to each week from
9:30 am Thursday to 4:30 pm Saturday with extra time to permit Mr F to travel with
Thomas to Sydney for up to a five day period.113 I have earlier referred to the current parenting arrangements which were agreed
to when Ms K sought to relocate with Thomas to the regional centre in November 2008. Mr F has Thomas in his care from 9:30 am Saturday until 8:30 am Wednesday with additional time on special occasions. Thomas spends the remainder of his time with his mother.
114 Whilst Mr F’s time with Thomas has been increased to the present shared care
arrangement and Mr F may have wanted more time with Thomas than Ms K was willing to give, it is the case that Ms K has been primarily responsible for Thomas’s care and development since the parties’ separation. There is no criticism of the quality of her care of Thomas and I view her parenting contributions as significant.
[2010] FCWA 46
Assessment of parties’ contributions
115 At the hearing Mr F’s counsel submitted that the Court should not assess
contributions on a percentage basis to the assets globally, but rather on an asset by asset basis. He relied upon the High Court decision in Norbis v Norbis (1986) FLC 91-712 in support of this approach.
116 In discussing whether the Court should apply a “global approach” or an “asset
by asset approach” to the assessment of contributions to the assets under s 79, Wilson
and Dawson JJ said (at 75,174):“To say as much is to say no more than that the legislation confers a discretion upon the Court which, provided the required matters are taken into account, does not dictate the employment of any particular method in the formulation of an appropriate order for the alteration of property interests. The matters which are to be taken into account will sometimes require the division of the assets, or some of them, upon the basis of their individual values, but in other cases no more than an overall division will be required. In some cases either approach may be adopted in part or in whole.”
117 In her Papers for the Judge Ms K submitted the parties’ contributions should be
assessed on a percentage basis to the assets globally and Ms K should be found to have contributed 20% of the total pool of assets. Her position altered, however, during the hearing when Ms Ks ought a lump sum payment from Mr F of $180,000.
118 The Full Court in Cook v Langford [2008] FamCAFC 84 considered the differing approaches to the assessment of contributions. The learned trial Judge in that case decided not to evaluate the parties’ contributions in percentage terms but rather apportioned a monetary sum to the husband in circumstances where the parties’ relationship lasted about five years and the wife was found to have been solely responsible for the initial and post-separation contributions to a large pool.
119 In relation to the approach of the learned trial Judge in Cook v Langford to apportion a monetary sum, the Full Court said at [75]:
“In the circumstances of this case, it was well open to find it was inappropriate and/or artificial to attempt to evaluate the actual contributions of the husband as a percentage of the large pool of assets which were sourced exclusively from the wife’s sole pre-marriage assets, maintained and improved significantly by her during the marriage, and substantially increased post separation as a result of the sale, engineered by the wife, of AB to another corporate enterprise.”
120 Whilst the Court will usually assess property entitlements in percentage terms,
I intend in the particular circumstances of this case to evaluate Ms K’s property entitlements, not as a percentage of the net asset pool but rather by reference to a monetary sum. Having regard to the length of the parties’ relationship and the properties owned by each of the parties before they started living together, I am satisfied this is the preferred approach to the assessment of contributions.
[2010] FCWA 46
121 Mr F’s counsel did not challenge that the current value of Ms K’s assets has
fallen significantly since the parties started living together in December 2004. He submitted, however, that the Court should take into account various factors when considering the weight to be given to this, which include:
(a) after the separation Ms K had the benefit of living rent free at the country property to the exclusion of Mr F until she “unilaterally relocated to Perth on 15 January 2007”; (b) since the parties’ separation, Ms K made no contribution to the outgoings and interest repayments on the country property mortgage; (c) after Ms K sold her suburban property she retained the net sale proceeds of $167,656 without making any contribution to the country property; (d) it was Ms K’s decision to purchase a new vehicle from her property sale proceeds for approximately $28,000 and to also pay legal fees which further reduced the capital available to her; and (e) Ms K’s decision to sell her country property in April 2008, crystallised a capital gains tax liability that could have been avoided had she not chosen to dispose of her Perth properties.
122 The decisions taken by Ms K to move to Perth from the country property where
she had the benefit of living rent free, to sell her properties and relocate to the regional centre, have seriously eroded Ms K’s capital base. The funds paid in legal fees have, however, been added back to the pool of assets and the current value of the motor vehicle Ms K acquired is also included in the asset pool.
123 These decisions by Ms K should not, in my view, be regarded as conduct
“designed to reduce or minimise the effective value or worth of matrimonial assets” as outlined by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092, nor should they be characterised as “reckless, negligent or wanton” as Baker J also described in Kowaliw’s case.
124 Both parties, in my view, have taken decisions since their separation which have
detrimentally affected their asset position. Mr F’s decision to leave teaching and live substantially off borrowings for more than two years rather than to find further employment and preserve his capital is another example. Neither party argues this is an appropriate case for the Court to add back amounts to the asset pool other than paid legal fees and I regard this as appropriate in the circumstances.
125 I have earlier considered the contributions made by each of the parties to the
asset pool and have also taken into account that the parties cohabited for about 14 months. Notwithstanding the very brief de facto relationship period, I am satisfied that a failure to make an order would result in a “serious injustice” to Ms K within the meaning of s 205Z(1)(b) and (c). In arriving at this conclusion I have placed particular significance on the following factors:
[2010] FCWA 46
(a) the parties jointly chose the country property as their home to live in although it was legally owned by Mr F; (b) after the purchase of the country property Ms K spent a lot of time planning and arranging for the substantial improvements which were made to the property; (c) the original purchase of the country property was virtually fully financed so it was not a case where Mr Fused assets he owned at the start of the relationship to acquire the property; (d) from the time of its purchase in December 2003 the country property has increased in value from $240,000 to $465,000. Deducting the sum of $250,000 Mr F borrowed for the original purchase and approximately $38,000 for the improvements made before the parties’ separation results in a gain of $177,000 without taking into account the interest on borrowings; (e) Ms K gave up her job as a teacher to commence a de facto relationship with Mr F at a time when she was about five months pregnant with Thomas, who he agreed to support and provide for; (f) as a result of the parties’ decision to have Thomas, Ms K’s earning capacity was seriously affected, particularly for the first few years after separation when Ms K’s income was significantly less than she was earning before giving up work to be a full-time mother in December 2004; (g) Ms K was an excellent homemaker and parent during the parties’ time together at the country house, and her primary role in parenting Thomas full-time continued after the separation for a significant period. Apart from her full-time role in caring for Thomas, Ms K also had the main financial responsibility for Thomas’s support following the parties’ separation, although this must be seen in the context of Ms K having lived rent free in the property until January 2007; (h) although Mr F has met interest payments on the funds borrowed to purchase and improve the property with further borrowed funds, since Ms K left the property Mr F has controlled the property, received some rental income from there and has lived at the property with Ms B since early 2009; and
(i) whilst Mr F paid Ms K$15,000 during cohabitation which she used towards her commitments on her suburban property, Mr F did receive the benefit of the profit realised on the subdivision and sale of the investment property of $82,596 less tax payable on the sum of $41,298. This property was purchased when the parties were living together and Ms K was caring for Thomas full-time.
[2010] FCWA 46
126 After taking into account all of the contributions made by each of the parties and
putting appropriate weight on them I assess the value of Ms K’s contributions at $100,000 in addition to the value of the assets she presently owns and those added back as detailed in the table of assets. In the context of the financial position of the parties, I view Ms K’s contributions valued at $100,000 to be “substantial” within the meaning of s 205(Z)(1)(c).
127 To check the appropriateness of this assessment of Ms K’s contributions in the asset position of the parties, I note the following:
1. I assess Ms K’s contributions overall to the country property to be equal to Mr F’s contributions. Deducting the borrowings made by Mr F for the original purchase and improvement of the property from its current value results in a gain of $177,000 as earlier noted. Ms K should, in my view, be entitled to 50% of this amount or $88,500.
2. Notwithstanding Mr F having paid $15,000 to Ms K as earlier noted, an additional allowance should also be made to Ms K because of the profits made by Mr F from the purchase and subdivision of the investment property which was acquired during cohabitation at a time when Ms K was unemployed because of her full-time care of Thomas.
128 Having determined that the Court has jurisdiction to make an order in relation to
| the parties’ de facto relationship, I now turn to consider what order should be made to achieve a just and equitable outcome between the parties. |
| The law |
129 Property cases are governed by s 205ZG of the Family Court Act 1997 and involves a four step process which can be summarised as follows:
(a) to ascertain and value the property of the parties; (b) to determine the contributions made by the parties to the property; (c) to consider the factors set out in s 205ZG(4) and s 205ZD(3) which include the parties’ future needs, income earning capacities, responsibilities and resources; (d) to finally reach a decision that is just and equitable in all the circumstances.
130 I have earlier set out the parties’ agreed asset and liability position and set out my assessment of the parties’ contributions.
131 I now turn to consider the factors set out in s 205ZD(3).
[2010] FCWA 46
Section 205ZD(3) and other factors
(a) the age and state of health of each of the parties;
132 Mr F is 55 years of age and is in good health.
133 Ms K is 41 years of age and is also in good health.
(b) the income, property and financial resources of each of the de facto partners and the physical and mental capacity of each of them for appropriate gainful employment;
134 The parties’ property and financial resources are detailed in the agreed table of
assets earlier set out. Ms K is a qualified school teacher who gave up work to have Thomas. Since moving to the regional centre, Ms K found employment as a part-time teacher at the local school. Ms K has been earning about $850 per week after tax for working .85 of a full-time week. Ms K’s intention is to continue to work at this level, if work is available. There is no evidence to suggest Ms K will not be offered further employment. I am satisfied Ms K has the physical and mental capacity for continued employment as a qualified school teacher and is able to adequately support herself in this capacity.
135 As earlier noted, Mr F is a qualified and very experienced teacher of children,
having worked for many years with the Ministry of Education. At the time of trial, Mr F was working two days a week which he acknowledges he could increase. What Mr F is likely to earn from his development activities cannot be determined. He was successful with the real estate development and has shown an ability to borrow significant amounts for further development work. If Mr F’s real estate work is unsuccessful, I am satisfied he has the qualifications and experience to enable him to return to teaching and whilst working full-time may not be his preferred position, I accept that he has the physical and mental capacity to do so. In my view, Mr F is capable of adequately supporting himself for the remainder of his working life. I accept, however, given that Ms K is some 13 years younger than Mr F, she has the potential for a working life longer than Mr F.
136 If Mr F’s income is limited to teaching, I am satisfied there is unlikely to be any
significant disparity in the incomes the parties will be able to earn from teaching in
future years.
(c) whether either de facto partner has the care or control of a child of the de facto relationship who has not attained the age of 18 years;
137 Thomas presently spends four nights each week with Ms K and three nights each
week with Mr F. Ms K says that since current orders were made, Thomas has been in
her care about 63% of the time which Mr F did not successfully challenge.138 The Child Support Agency, in its assessment for the period to 28 February 2010, assessed the division of Thomas’s care 58% in Ms K’s favour based on the number of nights each party has Thomas under the current arrangement.
[2010] FCWA 46
139 Although the burden of Thomas’s care in future is likely to be shared to
a significant extent between the parties, it appears Ms K will have the greater burden
as Thomas is likely to be with her roughly 60% of the time.
(d) commitments of each of the de facto partners that are necessary to enable the partner to support:
(i) himself or herself; and (ii) a child or another person that the party has a duty to maintain; (e) the responsibilities of either party to support any other person;
140 Neither party has a duty or responsibility to support any person other than
Thomas. Each of the parties have set out in the financial statements their reasonable needs and funds necessary for supporting Thomas.
(f) subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or (ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia; and the rate of any such pension, allowance or benefit being paid
to either party;
141 Ms K discloses in her Financial Statement filed 27 May 2009 being in receipt of
Centrelink benefits of $272 each week and the Family Tax Benefit A & B of $85 per week. When Ms K executed her Financial Statement, it also disclosed her receiving an estimated $75 per week in salary or wages and I assume it was on this basis that Ms K has the stated entitlement to government benefits. I cannot determine whether Ms K has any entitlement to pension benefits if she is working .85 of a full-time position and receiving the level of income I have earlier noted. Mr F discloses being in receipt of a Family Assistance payment of $9 per week.
142 Mr F has substantially greater superannuation entitlements than Ms K and
presumably will be able to access his benefits many years earlier than Ms K because
of his age.143 Mr F’s interest in WestState Superannuation is valued at $15,284 and his
GoldState Superannuation is valued at $176,957. Ms K has superannuation entitlements with GESB valued at $55,135.
(g) a standard of living that in all the circumstances is reasonable;
[2010] FCWA 46
144 During the parties’ relationship, I am satisfied they enjoyed a reasonable
standard of living which included being able to go on a number of holidays together. Since the parties’ separation, Mr F has spent two periods holidaying overseas which included a four week trip to Europe with Ms B as earlier noted. Although he appears to have enjoyed a higher standard of living than Ms K since the parties’ separation, I do not regard this as a significant factor. I am satisfied each of the parties should have sufficient income and capital available to them to ensure they can each maintain a standard of living that is reasonable in the future.
(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; (i) 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;
(j) the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; (k) the need to protect a party who wishes to continue that party’s role as a parent;
145 At the start of the hearing Ms K sought orders for settlement of property and
lump sum de facto spousal maintenance. She did not seek orders for periodic
maintenance.146 By the end of the evidence, Ms K’s counsel conceded, properly in my view, it
would be very difficult for Ms K to succeed with a lump sum maintenance claim. No doubt this was because of her recent employment in the regional centre and her intention to seek ongoing work for .85 of the working week. Ms K has not established a claim for lump sum de facto spousal maintenance.
(l) if either party is cohabiting with another person, the financial circumstances relating to the cohabitation;
147 Ms K is not cohabiting with another person.
148 Mr F has been living with his partner, Ms B, since December 2008. Ms B was
employed in Perth as a Personal Assistant and earned about $85,000 per annum. At the time of trial, Ms B was unemployed and was being supported by Mr F who meets their living expenses and pays for the utilities at the country property where they reside.
149 Mr F and Ms B own a development property together and have jointly borrowed funds to develop and acquire this property.
[2010] FCWA 46
150 Ms B says, and I accept, she plans to build her own business in the town and
does not intend to be supported by Mr F in the future. If her business plans do not succeed, I am satisfied Ms B who is an experienced Personal Assistant, should not have any difficulty finding employment in the town and be able to adequately support herself. Ms B also owns a number of rental properties in Perth which are subject to mortgages in addition to the property she is developing with Mr F.
151 I am satisfied Ms B will be in a position to contribute to the living expenses and
utility costs she shares with Mr F which is a benefit Ms K does not have. That said, I do not view the circumstances relating to Mr F’s cohabitation with Ms B as putting Mr F in a significantly stronger position than Ms K.
(m) the terms of any order made or proposed to be made under section 205ZG in relation to the property of the parties;
152 I have earlier set out the parties’ agreed assets and liabilities and my assessment of the parties’ contributions to those assets.
(n) any child support under the Child Support (Assessment) Act 1989 that a de facto partner has provided, is to provide, or might be liable to provide in the future, for a child of the de facto relationship; and
153 As earlier noted, orders have been made by consent for Mr F to pay $100 per
week in child support for Thomas. I have earlier considered the level of child support Mr F has paid for Thomas since the parties’ separation when assessing the parties’ contributions in the post-separation period. Notwithstanding Ms K’s criticism of Mr F over child support he paid in the past, I am not satisfied Mr F cannot be relied upon to meet the agreed child support payments as ordered.
154 Given that Thomas is just 5 years and Mr F is 55 years, there is the prospect
Thomas could remain dependant for some years after Mr F finishes work and subject to his capital position when he retires, Ms K may have to take on a greater burden with respect to Thomas’s support after Mr F retires.
(o) any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account; and
155 In his Papers for the Judge, Mr F asserts in relation to this factor, that
consideration should be given to the real estate now owned by him having been acquired either before or after the period of cohabitation between the parties. I have considered the contributions made by the parties to the asset pool when dealing with the assessment of contributions.
156 There is no other fact or circumstance which the justice of the case requires to be taken into account which has not already been considered.
(p) the terms of any financial agreement or former financial agreement that is binding on the parties.
157 Not relevant.
[2010] FCWA 46
Conclusion
Section 205ZD(3) factors
158 I have determined following my assessment of the parties’ contributions that Ms
K is entitled to be paid $100,000 from Mr F on the basis that she retains her existing assets which have a net value of $125,460. This provides Ms K with total net assets valued at $225,460. Ms K additionally has superannuation entitlements valued at $55,135. Mr F has net assets of $1,347,684 which, after payment of Ms K’s contribution-based entitlement of $100,000, will reduce his net asset position to $1,247,684. Additionally, Mr F retains superannuation benefits valued at $192,241.
159 The parties’ 14 month cohabitation period, my findings as to the parties’ future
earning capacities, the division of time Thomas spends with each of his parents and the ages of the parties are factors which might be argued weigh against making any adjustment in Ms K’s favour under s 205ZD(3).
160 After balancing all of the relevant factors, however, I am satisfied that an
adjustment is called for in Ms K’s favour which should be the payment of a further
sum of $30,000.161 Those factors which particularly warrant making the adjustment in Ms K’s favour are as follows:
(a)
the large difference in the asset position of the parties favouring Mr F;
(b) Mr F’s significantly greater superannuation entitlements; (c)
Ms K having a greater role, although not significantly greater, in the care and supervision of Thomas, which is likely to continue for the foreseeable future.
Just and Equitable
162 The effect of my decision on the assessment of contributions and the s 205ZD(3)
factors is that Ms K is entitled to a payment of $130,000 on the basis that she retain her existing net assets valued at $125,460. This gives Ms K total net assets of $255,460 and superannuation entitlements valued at $55,135. After payment of $130,000, Mr F will be left with net assets totalling $1,217,684 and superannuation benefits valued at $192,241.
163 Each of the parties will have legal costs to pay unless an order for indemnity
costs is made after this judgement. Ms K’s solicitors estimate in their costs notification advice that she has unbilled costs of approximately $55,000. They may be greater. As best I can determine from Mr F’s costs notification advice, his unbilled or outstanding fees are likely to be less.
164 Notwithstanding the parties’ position as to legal fees, I am satisfied the final
outcome is just and equitable in the circumstances. Ms K should have sufficient funds
[2010] FCWA 46
to pay off most, if not all, of her debts other than her home loan mortgage or alternatively, she may choose to reduce her home mortgage. Mr F is in a substantially stronger asset position to help provide for his future financial security.
Change of name
165 Ms K seeks a declaration that it is in the best interests of Thomas that his
surname be changed to “K-F”. At birth Thomas’s name was registered as Thomas K F
without any hyphenated surname.
Parties’ positions
166 Ms K says that before Thomas was born, the parties discussed the name he
would be given and agreed Thomas should have no middle name and the hyphenated surname “K-F”. Ms K further says when she completed the Birth Certificate particulars after Thomas was born, she was exhausted from lack of sleep and mistakenly included “K” as Thomas’s middle name rather than as part of his surname which the parties’ intended. When Ms K received a copy of Thomas’s Birth Certificate some months after his birth, she says she realised the mistake had occurred.
167 Mr F has a very different version of what was discussed and agreed to prior to
Thomas’s birth in relation to his surname. He says no mistake was made when the documentation relating to the registration of Thomas’s birth was completed. Mr F further says he initially wanted his father’s first name “[Richard]” to be Thomas’s middle name which was unacceptable to Ms K and ultimately the parties agreed that Thomas would have “K” as his middle name. Mr F asserts there was never any agreement for Thomas to have the hyphenated surname.
168 Ms K asserts it is in Thomas’s best interests that he have both family names in
his surname “as part of his identity” and having the hyphenated surname “K-F” will “save confusion for other children and parents and any potentially embarrassing explanations for Thomas”. Ms K also asserts she is committed to maintaining her surname and that if she was to have more children, Thomas would therefore “have the benefit of having the same name connection with any half siblings”.
169 Mr F disputes it will benefit Thomas by having his surname changed and says he already carries Ms K’s surname, albeit as a middle name.
| The law | |
| 170 | The question of change of a child’s name was recently considered by the Full |
| Court in Koldsjor & Addington [2009] FamCAFC 21 where the Court referred to s 65DAC(2) and the definition of “major long-term issues” in s 4(1). The Full Court observed that the amendments make it “clear that in cases where an order is made for parents to share parental responsibility, any decision concerning a child’s name is to be made jointly by the parents.” | |
| 171 | In this case, orders were made by consent on 28 October 2008 for the parties to have “joint parental care and responsibility” for Thomas. |
[2010] FCWA 46
172 The parties cannot agree on the surname Thomas should be known by and the issue must therefore be determined by reference to what is in Thomas’s best interests.
173 The Full Court in Chapman & Palmer (1978) FLC 90-510 set out the following factors as being relevant when considering what would be in the best interests of a child on determining an application for change of name:
• The short and long-term effects of any change in the child’s surname. • Any embarrassment likely to be experienced by the child if his or her name is different to that from the parent with whom he or she lives. • Any confusion of identity which may arise for the child if his or her name is changed or not changed. • The effect any change in the surname may have on the relationship between the child and the parent whose name the child bore during the marriage. • The effect of frequent or random changes of name.
Discussion and conclusion
174 Ms K has the onus of proving the parties agreed Thomas’s surname should be “K-F” and his registration particulars were completed in error.
175 Mr F was not shaken when cross-examined as to what name was agreed by the
parties and I am not satisfied Ms K made the mistake she asserts when completing the particulars form. This does not, however, prevent her from arguing Thomas will benefit from having “K” as part of a hyphenated surname, rather than his middle name.
176 I am not satisfied it is in Thomas’s best interests that he be known by the
surname “KF”. His name from birth has been Thomas K F. Many children in modern Australian society have a surname different to that of one of their parents and I do not accept that having the hyphenated surname “K-F” is likely to save confusion for Thomas or for other children as he goes through school or is likely to avoid Thomas having to make “embarrassing explanations”. A long hyphenated surname has the potential to raise more questions for Thomas than his present name.
177 This is not a case where Mr F has little involvement with Thomas’s care as
earlier noted. Apart from the parties having joint parental responsibility for Thomas, each is significantly involved in his care and development. I am further not satisfied there is likely to be any significant short or long-term effects which will benefit Thomas by changing his surname from “F”. Accordingly, I intend to dismiss Ms K’s application for change of Thomas’s surname.
Proposed orders
178 Subject to hearing from counsel, I propose making the following orders:
1. Mr F do pay Ms K the sum of $130,000 within 30 days.
[2010] FCWA 46
2. Any real estate owned by Mr F be charged with payment of the sum of $130,000 referred to in paragraph 1 hereof and upon payment, any caveat registered by Ms K against the title to any real estate owned by Mr F be withdrawn at Ms K’s expense.
3. Subject to any provision in these orders to the contrary:
(a) each party be solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of these orders; and (b) 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. 4. The applications of the parties otherwise be dismissed.
I certify that the preceding [178] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court
Associate
0
6
1