KAVAN & HAWKINS

FAMILY COURT OF AUSTRALIA

KAVAN & HAWKINS

[2015] FamCA 631

FAMILY LAW – PARENTING – Previous orders discharged – parents have equal parental responsibility – children live with the mother

FAMILY LAW – Respondent to transfer real property to applicant – Applicant to discharge mortgage – In event if this not taking place applicant to transfer all interest in real property to respondent who will discharge the mortgage and pay the applicant $30,000- - upon neither part complying real property to be sold.

APPLICANT:

Ms Kavan

RESPONDENT:

Mr Hawkins

FILE NUMBER:

CAC

202

2014

DATE DELIVERED:

16 July 2015

PLACE DELIVERED:

Canberra

PLACE HEARD:

Canberra

JUDGMENT OF:

Faulks DCJ

HEARING DATE:

16 July 2015

REPRESENTATION

SOLICITOR FOR THE APPLICANT:

In person

COUNSEL FOR THE RESPONDENT:

Mr Howard

SOLICITOR FOR THE RESPONDENT:

Ms Murrell

Orders

Parenting

All prior parenting orders with respect to the children B, born … 2009 and C, born … 2010 be discharged.
The parents have equal shared parental responsibility for the children.
The children live with the mother.
The children spend time with the father when he is in D Town as follows:
a)   During school terms:
i.from after school Thursday until 5.15pm Sunday each alternate weekend; and
ii.from after school Wednesday until before school Thursday each alternate week.
b)     For the second half of Term school holidays from 5pm on the middle Saturday until 5pm the following Sunday.
c)     In even numbered years, and years ending in zero, from 5pm Christmas Eve until 2pm Christmas Day (and the children shall be in the mother's care from 2pm Christmas Day until 5pm Boxing Day).
d)     In odd numbered years from 2pm Christmas Day until 5pm Boxing Day (and the children shall be in the mother's care from 5pm Christmas Eve until 2pm Christmas Day).
e)     For the first half of the Christmas school holidays on even numbered years and years ending in zero and the second half on odd numbered years. Absent agreement, the first half of the holidays shall commence at 9am on the day after the last day of school attendance and complete at 5pm on the 6th January and the second half of the Christmas school holidays shall commence at 5pm on the 6th January and conclude at 5pm on the last Sunday of the holidays.
f)   On Father's Day weekend from 5pm Saturday until 5pm Sunday (and the children shall spend the period 5pm Saturday until 5pm Sunday of Mother's Day weekend with the mother).
g)     On each of the children's birthdays:
i.if it is a weekday from after school until 6pm
ii.if it is a weekend from 12pm until 5pm
iii.and the children shall, if in the father's care on either child's birthday, spend the same period with their mother.
h)     At such other times as arranged and agreed between the parties in writing.
The children's time with the father pursuant to order 4a) be suspended during all school holidays. Time pursuant to order 4a)i. is to recommence on the second weekend after school recommences and time pursuant to order 4a)ii. is to recommence on the first Wednesday after school recommences.
If because of work commitments the father is unable to spend time with the children in accordance with the preceding orders, then the following orders apply:
a) If the father gives not less than 14 days' notice to the mother before a time when the children were to spend time with him in accordance with these orders, then the mother will care for the children or will organise alternative care for the children at her cost, if any.
b) If the father gives less than 14 days' notice to the mother before a time when the children were to spend time with him in accordance with these orders then:
i.the father may organise for his family or for another alternative carer for each relevant period within the notice requirements (14 days).
ii.if the father is unable or unwilling to organise an alternative carer for the children in accordance with the last suborder then the mother will have the first option to care for the children herself or to arrange for a family member or friend of her choosing to do so.
iii.if the mother is not able or willing to make arrangements for the children as set out in the last suborder then the mother may organise other care for the children with a person or organisation of her choosing for the whole or any part of any relevant period.
For the purposes of the last mentioned suborder:
a)   the mother will nominate the person or organisation to provide the care for the children and advise the father of her intention to use that person or organisation for that purpose and the contact details of that person or organisation.
b)     the father will pay direct to the nominated person or organisation the fees (if any) for the care of the children in the period referred to above.
c)     the father may telephone the nominated carer to organise payment and or to speak to the children while the children are in that carer's care
The mother will facilitate the children's communications with the father via telephone or via Skype webcam at 7:15am on Tuesdays and Thursdays if the father is working away.
During school holiday periods each parent will facilitate the children's communication with the other parent via telephone or via Skype webcam at 7:15am on Tuesdays and Thursdays.

10. In the absence of other arrangements changeover shall occur at school or the mother shall drop the children off to the father's house at the commencement of time and the father shall return the children to the mother's house at the conclusion of time.

11. Unless otherwise agreed in advance, neither parent shall approach the other when delivering the children and will maintain a reasonable distance at changeovers.

12. If either of the children suffers any illness or injury requiring medical attention or hospitalisation while in the care of either party, then that party shall notify the other party of such illness as soon as is practicable, and will inform the other parent of the name of the medical practitioner treating the child or children or the hospital to which the child(ren) is/ are taken.

13. Both parents will authorise any school the children may attend to provide each parent with copies of all school reports, examples of school work, school newsletters, notification of school activities, parent/teacher nights at the other parents request and expense and inform each parent of any emergency, remedial or correctional treatment required by the children as soon as practicable after the relevant event. Each parent is entitled to attend school events, parent/teacher appointments and the like.

14. Each parent shall authorise any treating medical practitioner, hospital or medical practice the children attend from time to time to provide to the other parent any information he or she requests.

15. The parties shall notify each other within seven days of a change of address and within forty-eight hours of a change of telephone number or email.

16. Neither party, their agent and their servants will say unkind or unpleasant things about the other party to either or both children - or within the children's hearing or permit any other person to do so.

17. Pursuant to s 65DA(2) and s 62B, the particulars of the obligations these orders create and the particulars of the consequences which may follow if a person contravenes these orders and details of who can assist the parties adjust to and comply with an order are set out in the Fact Sheet attached hereto and these particulars are included in these Orders.

Property

18. The respondent, within sixty (60) days (or such further time as the parties may agree) do all acts and things and sign all such documents as may be required to transfer to the applicant or her nominee, at the expense of the applicant, all his right title and interest in the real property known as E Street, D Town, being the whole of the land more particularly described as … of … ("The Real Property").

19. Contemporaneously with the last order, the applicant do all things necessary to pay out and discharge the mortgage registered number … to the Commonwealth Bank of Australia ("The Mortgage") and thereafter indemnify and keep the respondent indemnified in respect of all rates taxes and outgoings for the real property.

20. Within 7 days, the parties do all things necessary to authorise F Solicitors to pay out to the applicant the money standing to credit of the parties in their trust account, being the sale proceeds of G Street, D Town.

21. If the Applicant cannot comply with Order 19 on or before the date required by Order 18, then,

a)   The applicant within a further sixty (60) days, do all things and sign all such documents as may be required to transfer to the respondent at the expense of the respondent all her right title and interest in the real property situated and known as E Street, D Town being the whole of the land more particularly described as … of …;
b)     Contemporaneously with the transfer referred to in Order 21a) above, the respondent do all things necessary to discharge the mortgage registered number … and pay all rates taxes and outgoings of or with respect to the real property and indemnify and keep the applicant indemnified in respect thereto.
c)     Contemporaneously with the transfer referred to in this Order, the Respondent pay to the Applicant the sum of $30,000.

22. If the Respondent does not comply with Order 21, then the parties shall do all things and sign all documents necessary to sell the property.

23. If the parties are unable to agree about the terms of sale, the parties have liberty to apply on 7 days' notice about the terms and conditions of the sale.

24. The proceeds of sale of the real property pursuant to Order 22 shall be applied forthwith upon settlement as follows:

a)   First, to pay all reasonable costs, commissions and expenses of the sale;
b)     Second, to discharge the mortgage and any other encumbrances affecting the real property;
c)     To pay the balance then remaining to the applicant.

25. Unless otherwise specified in these Orders and except for the purposes of enforcing the payment of any money due under these or any subsequent Orders:

a)   Each party be and is solely entitled as against the other party to all property (including choses in action) in the possession or control of such party at the date of these Orders. All the chattels in the matrimonial home are considered to be in the possession of the Applicant.
b)     All life insurance or assurance policies become the sole property of the person whose life is being insured or assured.
c)     Each party be solely liable for and indemnify the other against any liability encumbering any item or property to which that party is entitled pursuant to these Orders.

26. The respondent do all things necessary within a thirty (30) day period to change the structure of H Pty Ltd into a not for profit organisation.

27. Money standing to the credit of the parties in any joint bank account will become the property of the husband.

28. The respondent will pay to the applicant on or before 31 October 2015 the sum of $10,000 by way of lump sum spouse maintenance.

29. In addition, the respondent by way of spouse maintenance will indemnify and keep the applicant indemnified against any liability whatsoever for the debt due to Mr I.

30. By way of further property settlement,

a) pursuant to s 90MT(1)(b) of the Family Law Act 1975, whenever a splittable payment becomes payable from the superannuation interest held by Mr Hawkins in AustralianSuper, the trustee shall pay to Ms Kavan 65 per cent of each splittable payment and there be a corresponding reduction in the entitlement Mr Hawkins would have had but for these Orders.
b) To ensure procedural fairness, the trustee of AustralianSuper may apply to this Court within 14 days of a copy of the Order being served on it to discharge or vary this Order.
c) The solicitors for the respondent will forthwith serve the Order as set out in Order 20(b).

31. For the sake of certainty only, the respondent will be entitled to each of the companies that he has formed and any entitlement deriving therefrom in respect of the applicant will be transferred by her to him at his request. The applicant will forthwith resign any director's position she may hold in respect of any of the companies, assign any interest she may have under any trust to the respondent, and transfer any shares she may have in any of the companies to the respondent.

32. Otherwise all existing applications are discharged (including the wife's application for periodic spouse maintenance).

33. The matter is removed from the pending cases list.

34. Any material that was the subject of a subpoena or which became an exhibit in the proceedings will be returned to the person from whom such material came unless that person requests the court to destroy it. The destruction or return will occur at the expiration of the appeal period.

35. Either party may provide a copy of these orders to any school either child may attend or to any medical (or similar) practitioner threating either child.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Kavan & Hawkins has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: CAC 202 of 2014

Ms Kavan

Applicant

And

Mr Hawkins

Respondent

REASONS FOR JUDGMENT

In this matter, the proceedings today relate to the judgment arising in relation to the application filed on 26 February 2015 by Ms Kavan, who represented herself throughout the proceedings. That application was subsequently transferred to the Family Court at Canberra (the original application having been made in the Federal Circuit Court) on 20 March 2014. The matter was heard over two days in Canberra, the first of those being 19 June 2015 and the second on 14 July 2015.
The matter was adjourned on 19 June as a result of some discrepancies that appeared to have arisen in the financial statements provided by the husband – and I refer to the husband as “the husband” although I accept that the parties were never relatively married – in relation to his various businesses. There are two children: B, born in 2005, and C, born in 2010. The children live primarily with their mother.
The parties’ relationship began in about 2008 and ended in 2013, and the parties have lived apart separately since that time. Significantly, detailed Orders relating to the children were made by consent in July 2014, and hence initially there was some suggestion it may not have been appropriate for the children’s matters to be re-agitated before a court at such a short interval. However, the differences between the parties seemed sufficient in my opinion that, taking account of what would be in the best interests of B and C, I allowed further evidence to be given about what were the best arrangements and, in particular, how the parties could properly deal with the fact that the husband was now more frequently (or appeared to be more frequently) away than had originally been contemplated.
It should be said that Mr Hawkins had commenced and was running a series of companies and trusts which centred principally on the business of providing tradesmen as a labour force to various projects, and some of those projects were some distance from D Town - where the mother and the children were primarily living. This had given rise to a number of difficulties about who was to look after the children on occasions when the children’s father, for work reasons, found that he was unable to avail himself of the time that had previously been agreed he would spend with the children.
These matters came before the Court, together with the claim by Ms Kavan as to a division of property between them. She also sought an order that the husband pay to her $500 a week by way of periodic spouse maintenance.
By the time the matter was before me on the second occasion, as, with the assistance of Mr Howard, became apparent, the parties were in substantial agreement about many of the matters relating to the children I say “in substantial agreement”. These were in effect, reiterating their previous agreement with some variations. There were, however, a number of areas of difference which the Orders I have made attempt to resolve.
Beginning at the start, I need to say that the parties were agreed that they should have equal shared parental responsibility for B and C and that the children would live primarily with their mother.
The fact that the parties agreed and an Order was sought that they should have equal shared parental responsibility means that I am obliged to consider whether it would be appropriate, and in the best interests of the children, that the children spend equal time with each parent or, if that were not practicable or not otherwise in the best interests of the children, that they should spend substantial and significant time with each of their parents.
In this matter, neither parent was really in dispute about the fundamental nature of the arrangements for the children, but I should indicate that although I rely upon and accept and reflect that agreement in the Orders that I have made, in my opinion it is not practicable for the children to spend equal time with their father as they do with their mother or, for that matter, substantial and significant time.
This is in part because their father is away with work from time to time and, in any event, the factors which relate to the children under s 60CC of the Family Law Act (or some of them) support the contention what the parties have in effect agreed upon - which is that they should live principally with their mother but should spend time with their father.
In this regard I mention, without necessarily expanding upon my views about it, the nature of the relationship of the children with each of their parents, the extent to which the parents have taken or failed to take opportunities to be involved with the children – and in this regard, there can be little doubt that the primary person for the children has been and will always, I suspect, remain the mother.
There has been a failure from time to time for the father to fulfil his obligations to financially maintain the children, although that has been now substantially rectified. I am influenced, in my judgment, by my conclusions that the mother has a higher capacity to look after the children than the father does. That is not to suggest that the children do not love their father and enjoy the time that they spend with him. And it is not to suggest that the father does not have a capacity to contribute to the emotional and intellectual needs of the children. It simply means that, in the circumstances, the parents have chosen the better way of dealing with the matter by ensuring that the children live primarily with their mother.
I might add that this conclusion was one that was reached by the single expert witness in the course of the primary proceedings between the parties in the report filed in this Court in June 2014. In that report, Dr J (as she now is) provided that there should be an increase in the time that the children spent with Mr Hawkins which would include one night per week. This is important when it comes to one of the issues between the parties to which I will turn in a moment.
Accordingly, I have made Orders – and these were Orders that were substantially agreed – that, when the father was in D Town, during school terms the children would spend from after school on Thursday until 5.15pm on the following Sunday on each alternate weekend. The father sought and the original Orders provided, consistent with the recommendations in the report from Dr J, that the children would spend Wednesday evening from after school until Thursday morning when school resumed with their father on the other week, that is, the “off-week”, in broad terms.

That was opposed by the mother in the current proceedings, but on balance it seemed to me that it was appropriate that the strong recommendation from Dr J; after her assessment of the children; and the fact that it had been implemented; and the fact that it appeared to have been implemented successfully, overrode what in this case – did not seem to have been a very clearly articulated basis for moving from what had already been in existence and appeared to be operating successfully.
Accordingly, I have made Order 4(a)(ii), which provides for the Wednesday evening to be spent with their father when he is in D Town. It also provides, as is consistent with the orders previously made, that the children spend half their school holidays with their father and on special days as set out in Sub-orders (b), (c), (d), (e), (f) and (g). (h) being a general prescription which says “such other times as arranged and agreed between the parents in writing”. There is no reason why in this matter the parents, who have reached a great deal of agreement about things, should not be capable of doing so again in the future.
Those matters were all agreed by Ms Kavan in the course of her evidence in the witness box, apart from the Wednesday evenings to which I have referred. Order 5 makes the sensible adjustment which says that, obviously, the weekend time and the Wednesday time is to be suspended during periods of school holidays and that the times resume, as indicated in Order 5, which is that the weekends commence on the second weekend after school recommences and the Wednesdays commence on the first Wednesday after school recommences.
The next matter that was an area of contention between the parties (although finally resolved) related to what was to happen if the father was away from D Town and unable to exercise the time that had been originally intended that he would spend with the children. The resolution of this matter is set out in Order 6. Order 6 provides the formulation that was finally, I suppose it might be said “negotiated” in the course of the evidence of Ms Kavan in the witness box.
It represents, in my opinion, a sensible compromise between the parties about what might happen and recognises the means of each of the parties. It accepts that there is a level of suspicion between them and that this should be resolved, so far as possible, by direct intervention.
This is in reference to the payment for the time that the children spend with a paid carer - if it is necessary for there to be such a person. The circumstances giving rise to that follow a pathway that was recommended by Counsel for the father but with some variations as were discussed in the witness box and suggested by me.
In effect, provided the father gives proper notice – in this case, 14 days’ notice – that he is unable to care for the children, then in broad terms, the mother agreed – and generously, in my opinion, appropriately as a mother and in every sense a proper litigant in this court – that she would be happy to continue to look after the children. Her concerns related to her inability perhaps to work or to do something she had arranged if there were times, at less notice, when she could not make arrangements either to change her own affairs or, alternatively, to find some members of the family who could.
Accordingly, Order 6(b) provides that if the father gives less than 14 days notice then a certain pattern is to arise. The first is this: the father can consider and implement, if he is able to do so, for members of his family to spend time with the children. This provides an opportunity for them in the circumstances to spend time with their extended family, and this in itself is probably a good thing both for the children and each of the parents.
If the father is – and I am reading now from Order 6(b)(ii) – unable or unwilling to organise an alternative carer, then the mother will have the first option to care for the children or to arrange for someone of her choosing to do so, a friend to do so. If she is unable or unwilling to make those arrangements, then she may arrange for the children to be cared for by some other organisation or a professional carer such as a home day care person.
Now, there is a variation in the wording of Order 6(b)(iii) because I have added and deliberately added the words “or willing” because, as the Order was originally framed and put to the mother in the witness box, it would be a matter of her having to prove in such circumstances that she was not able to look after the children, whereas it is quite clear from the way questions were put to the mother that the provision related to whether she was unable or unwilling to do so.
If that happens, the mother is able under Order 7 to nominate a person or organisation to provide the care for the children, and the Order provides (sensibly) that the father is to be given notice of this. The father then agrees – and it is to his credit that he makes this concession, but appropriate that he does so, nevertheless – that he will pay to the nominated person the fees for the care of the children for the period referred to. This was an intervention that I made in the proceedings because there was something of an argument about whether or not the mother should produce a receipt. In any event, those arrangements, finally, were agreed between the parties.
The next area of minor disagreement related to the time at which the children might engage in electronic communications with their father, or their mother for that matter, and that was resolved again by compromise, again to the credit of the parties, as being at 7.15 am on Tuesdays and Thursdays, not at 7 or 7.30am which the parties initially had opted for. Additionally, an Order is made in relation to holiday periods in Order 9, and 7.15am appears again at that point.
Order 10 was also a matter of agreement between the parties. There are the arrangements for handover. They reflect the earlier orders in existence between the parties. I think they are sad, in a way, in that it is agreed that the midweek arrangement would have the advantage that the parents do not see each other. I think it is a pity for the children’s sake that they cannot see that their parents are able to cooperate at least to the extent that it is necessary to deliver them from one parent’s house to the other. That might be a matter that improves in the future. At present the arrangements in Order 10 are agreed and Orders are made accordingly.
Order 11 says, unless it is otherwise agreed, neither parent will approach the other when delivering the children. That, again, reflects the earlier orders, the agreement of the parents and, I suppose, the unfortunate attitude that each has towards the other.
Orders 12 and 13 provide that each of the parents will ensure that the other parent is kept informed about illnesses or school activities, and the Orders set out there require each of the parents to notify the other parent as soon as possible about any of those events and to authorise in Order 13 any school the children attend or any person in Order 14 who is treating the children to provide information to the other parent at that parent’s request and at that parent’s expense. That sensibly, in my opinion, makes it available to both parents to obtain the information, but does not impose an unreasonable burden, in this case, on Ms Kavan to provide the post office type activities that such Orders sometimes involve.
Order 15 sensibly provides that the parents should keep each other informed about where they are and what their telephone numbers are. Again, this was a matter of agreement.
Order 16 is a slight variation in wording from that which was originally suggested - but not as to intent. Both parents are obliged under that Order not to say unpleasant or unkind things about the other parent to the children or to allow other people to do so.
Those, then, are the matters that were in issue about the children, and the resolution of them by Orders substantially by agreement by the parents is a matter, extraordinarily, to their credit, given the other issues that they had between them and the lack of trust that otherwise exists.
In relation to property, it is necessary that I should in accordance with the terms of the Act identify the property of the parties and each of them, at least to some extent.
I make the preliminary comment that there was not a lot of property to divide, and what there was to divide was somewhat vaguely represented by each of the parties.
However, I identify as the principal items of property the following: there is the house in E Street in which the mother and the children currently live, and which it is agreed by the parents would go to the mother. There are some trust funds with the father’s lawyers which represents the proceeds of a sale of another property of the parties, but, again, we are not talking about a lot of money. Those funds were depleted by a garnishee order from the Child Support Agency which removed some $5,000 plus from that fund. In addition, the father maintains that from that fund should be paid a debt owed to Mr I, who had performed some work for the parties. The debt is a mutual debt. That is agreed, but that would have the effect of virtually eliminating the funds held by F Solicitors.
In addition to that, the husband has commenced a number of companies, trusts and has operated businesses. These include a contentious entity, the D Town H Pty Ltd business, to which I will return briefly in a moment. These businesses, both parties agree, should be retained by the husband. They have not been valued in any formal way, but neither was the property in E Street. The businesses are asserted by the husband to be of little worth, and such evidence as exists probably supports that contention. I say probably because the accounts of the companies produced are so hopelessly internally contradictory on some matters that it is difficult to form any conclusive view about the value of the assets of the company, what loans may be owed to and from the company and a number of other matters. However, they are there. It is agreed the husband will have them. He maintains in his affidavit that he earns about $70,000 a year from those companies, and they, obviously, represent a source of income for him.
The D Town H Pty Ltd business, if one could call it that, is in a slightly different category. It was contended by Ms Kavan in this matter that she should have that company and to run it for the benefit of the local community. She has substantial sport credentials, and there is no doubt that she has much to offer to the local community in the area of sport and associated matters such as H Pty Ltd. It is fair to say, however, that the husband equally has a passion for sport, and the H Pty Ltd enterprise, if one can call it that, represents at least in part the contributions that each of the parties have made, although, principally, I think I should acknowledge that the contributions were made by the husband.
None of that matters particularly because it is not worth anything, and certainly it does not produce any income that is worth talking about. Both parties agree, in any event, that it should be run as a not-for-profit organisation for the benefit of the local community. In such circumstances, although until almost the very end, Ms Kavan was anxious that she should be the one who would run this organisation she accepted from me a suggestion that perhaps this was not something that would be of great benefit, particularly in the light of her ill health and her commitments to the children.
That all having been said, the parties did reach agreement about that matter, and that is reflected in Order 26 which when made provides that the structure of the business will be converted into a not-for-profit organisation within 30 days.
In addition, Mr Hawkins had three policies of superannuation. Details about these were, to say the least, scant. The lack of information was in many respects representative of the lack of information Mr Hawkins provided about almost all financial matters. However, it became clear after a time that in the three funds there was about $40,000 in round figures. These were accumulation accounts, not defined benefit accounts, and, although it was not part of the husband’s case, it seemed to me that it was appropriate that those superannuation entitlements should be split under s 90MT of the Family Law Act. In Order 30 I make such an order. That Order provides that Mr Hawkins’s AustralianSuper fund should be split as to 65 per cent to Ms Kavan, this is reflective of the fact that, in my opinion, the superannuation entitlements should be divided equally between the parties, and it was more convenient to provide that a 65 per cent split of one fund should be made rather than to have three splitting orders on three different funds with consequential administrative time and effort and money in achieving that result - for relatively small returns.
It is possible that Ms Kavan may persuade the Commissioner for Superannuation to agree to a release of her superannuation funds as a result of this Order. That may be of benefit to her. However, that is a matter for her and for the Commissioner, and not for me. The other Sub-orders in Order 30 provide for the trustee of AustralianSuper to be given a copy of the order to achieve procedural fairness, and Sub-order (c) imposes on the solicitors for Mr Hawkins an obligation to serve the order upon the trustee forthwith.
Technically, there is the possibility that AustralianSuper may apply to the Court (as Order 30(b) provides) to have the orders discharged or varied. It seems unlikely that would be so.
In addition, the parties have various chattels, and they have agreed on a division of those chattels, essentially, on the basis that each keeps what he or she has in his or her own control or possession at present. That includes, so far as Ms Kavan is concerned, the diamond ring which has been variously valued at $11,000 but is unlikely to bring such an amount in the course of sale.
I need to say a word about disclosure. The Family Law Act imposes an obligation on the parties to make a full and frank disclosure of all of their assets. Requests were made by Ms Kavan of her former partner in 2014 and continued into this year and during the course of these proceedings. It is fair to say at the end of the proceedings that Mr Hawkins has failed to provide information which, if he had provided, may have allayed some of the mistrust that he generated with Ms Kavan. When he finally produced some company financial statements and his own financial statement these documents were to some extent mutually and internally contradictory. When those contradictions were pointed out a further set of accounts was produced, but this still left a number of questions outstanding. The process left me wondering if the husband was or could be as stupid as that or if the accountants were or could be so blind to the inelegancies and the inaccuracies of the accounts they produced, that they would continue to produce them in that form, and, ultimately – and I say this (I cannot say with respect) – whether the lawyers had even looked at the documents before they had been filed or tendered.
Trying to ascertain what the husband’s income was a puzzle to perplex Sherlock Holmes. It would be tempting to find that the husband had failed to fulfil his obligations of full and frank disclosure and that he should bear whatever consequences flowed from this. However, I did have as part of the evidence the husband’s sworn evidence about his earnings of about a thousand dollars per week, which was consistent, at least in part, with the accountant’s opinion from the accountant’s examination of the company accounts, and the explanation – I might add, little explanation, late in coming and only after my prompting and (so far as accounting practices are concerned) lamentable explanation – from the accountant about why the figures in the profit and loss account and, in particular, in the balance sheet were as they appear.
To suggest that one should use the beneficiary’s loan account as some sort of holding point for anything that was otherwise unexplained is, to say the least, unsatisfactory. To suggest that, in accounts which showed a business producing very little money, it was appropriate that those loan accounts should rise in the last (and, presumably, the most accurate) set of accounts to a figure well over a million dollars is beyond belief.
I give you some examples, in broad terms, as to some of the problems that exist. After I left the Court earlier this week – on Tuesday, I think it was – I spent some time looking at the figures for motor vehicle expenses in the profit and loss accounts of the trust, in the husband’s financial statements both as to his income and as to his expenditure, and none of the figures in those reconcile with any of the others. I had no idea, at the end of the material provided by the husband as part of his evidence, what benefits he derives from the company or the trust or his business or from any other source in relation to the cars. It is unclear to me whether he is, in fact, providing, as I think was suggested at one point, some form of advantage to his parents with one of the vehicles which, in some way, results in some cash benefit back to him. I have no idea, and none of this was attempted to be explained.
It appears from the accounts, although it is not entirely sure and certainly no certainty was given, that the husband draws from the trust money that was allocated in the profit and loss account as depreciation, some $22,000 a year. This, of course, is a proper deduction, or at least I assume it is a proper deduction, for the purposes of taxation but does not constitute an actual expense to the company unless the company puts aside funds into a sinking fund to provide replacements for the things which are being depreciated. There is absolutely no evidence to suggest that that is so, and hence there has been a little bit of flexibility, if I can put it that way, in the amount of cash that the husband may have taken out of the trust.
There seems to have been little attention paid to the husband’s duties as a director of the trustee company, to his duties under the trust itself, and, effectively, he used the trust account as his own bank account, employed bookkeepers and accountants at a greater figure than some of his employees (from the look of the last set of figures) with very little effect, as they appeared to do, in colloquial terms, little more than stuff up that which had already been seriously stuffed up by the husband in the first place.
The net result of this examination of these figures suggests that the accountant may – and I emphasise particularly the word “may” – be right about what the husband’s combined income and his drawings or loans from the trust might be. It is impossible to find, from the figures provided, that the husband has enough income to pay the spouse maintenance claimed by Ms Kavan.
Regrettably – and I say this because I regard the deficiencies in the husband’s evidence on this point as being truly lamentable – unfortunately, under the Act, I have to make a finding that the husband has a capacity to make the payment, and in all the circumstances, I cannot do so. Suspicion that he has money, unwillingness on my part – and I assure you it is a serious unwillingness – to reward what is either duplicity or stupidity – and I think it is possibly the latter rather than the former – are not enough. I cannot find on the evidence that he has the capacity to make the payments for spouse maintenance on a regular basis that are claimed.
He did acknowledge in the course of his Minutes of Orders Sought – I suspect more as a so‑called clever tactical manoeuvre than any intended acknowledgment, that the mother should have some $20,000 by way of lump sum spouse maintenance, which is to be offset, he would say, against what Order might be made for property.

This, in turn, led me to two Orders that I propose to make, which appear later in the document which you have in front of you, and they are the Orders that provide for the father to provide an indemnity in respect of the loan due to Mr I and for the husband, again, to pay to the applicant, on or before 31 October this year, the sum of $10,000 by way of lump sum spouse maintenance.
To make it clear, I cannot be satisfied that there is a continuing capacity on the part of the husband to meet the claim of the wife, which, I think, for all other purposes, and which, to his credit, Mr Howard acknowledged to be a valid and reasonable claim so far as her expenses are concerned. I am satisfied from his acknowledgment in his Minute of Orders Sought, whether he intended it to be so used or not, that he is acknowledging that, at least, there is the capacity or a potential to pay some lump sum spouse maintenance to the wife, and, accordingly, I have picked up part of that order.
I acknowledge and find that the debt due to Mr I is a joint debt and that half of that, therefore, is the husband’s to pay in any event, and my order directed to him, requiring him to indemnify the wife in respect of the other part of that debt, is part of the offset for the lump sum spouse maintenance that I have referred to above.
I am equally grieved that the husband’s apparent incompetence in the production of his figures and inconsistency has brought about a situation where the wife has had imposed on her by the Taxation Department a debt in respect of what is asserted to be an overpayment of family benefit.
I looked carefully at the exhibit in these proceedings and find that it is a debt that, indeed, is imposed on her, not on anyone else. In those circumstances, it does not seem to me I can make much of an Order about that, but I recognise that the payment of the $10,000 by Mr Hawkins within the next few months will at least serve to cover that debt even if it does not, in fact, provide her with much relief in the process.
I then turn to matters of contribution. In this matter, the relationship between the parties was relatively short: some five years. It was productive of two children. It is a situation where the husband’s businesses, whatever they are worth, are substantially as a result of his efforts. The property transactions of the parties relate, in part, to each of them, and it would be difficult to form a conclusion other than that. The properties and the businesses and other assets of the parties have been about equally acquired or equally contributed to during the course of the marriage. There can be no doubt that the mother has been the principal homemaker and parent and has continued to fulfil that role since the parties have separated, which is now some time ago, and her contribution is a continuing one.
It is probably not appropriate to try to put a percentage on the contributions that each of the parties have made because whatever those contributions are, they are outweighed, in large measure, by the adjustments that should be made for the financial circumstances of the parties pursuant to s 90SF of the Family Law Act. These include her ill health, which is not under challenge; her comparative lack of capacity to earn income and the husband’s ability to do so, admittedly through his own efforts, and I am not in any way diminishing the value of those efforts.
In these circumstances, it is appropriate that she should have the lioness’s share of the property, and that includes the whole of the equity in the E Street property without any offset in relation to lump sum maintenance, and that, I might add, was agreed should be the case by both the parties, although the categorisation of it was somewhat different. It is also appropriate that she receives the whole of the money held by F Solicitors, leaving the husband to find the money to pay Mr I.
It was sought by the husband and agreed by the wife, that the husband should have his businesses and should run them and continue to be the sole beneficiary of them, and Orders have been made by me in the course of the matters before me, which ensures that all of those things occur.
He has the capacity, therefore, even if there is no great capital value attached to his businesses, to use them for the purpose of making money and supporting himself. He has, on his own statements, sufficient money to cover the expenses he incurs at present, including $450 a week in rent and including something like 60 to 100 dollars a week in cigarettes. He has other benefits, including holidays, which he is able to achieve from his income, and while, as I said, there may be not much capital value attaching to the businesses, they provide him with the opportunity to enjoy the lifestyle referred to.
In those circumstances, it seems to me that it is just and equitable that I should make the orders that the parties substantially agreed upon on the basis that the wife would receive the house, which, if she is able to refinance it, becomes hers, whatever its value may be - and there was some disagreement about the value. If she is unable to refinance it, then she has the opportunity to transfer it to somebody else, such as her parents, which is what she suggested, and the orders reflect that it might be transferred to some other person. If she is unable to do that within the time that the parties agreed, she might reasonably be able to do so, then the property is to be transferred to the husband, and he is to pay her $30,000.
This figure is, to some extent, arbitrary simply because the property has never been valued in recent times in a way that both parties agree upon or that they had thought to be relevant to put into contention during the course of the proceedings. If, in fact, the husband cannot refinance the property and move into it or acquire it, then it is to be sold. These are Orders that were agreed between the parties and, in the circumstances, make sense. If the property is sold, the wife gets all the proceeds, whether it is greater or less than the $30,000 referred to in the other order. Each of the parties otherwise keeps the things in his or her possession or control. That includes – and properly so, as a concession by the father, and accepted by the mother – that there is the diamond ring, which may have a value of something less than $11,000, which may, in turn, assist her in the difficult task she faces ahead in supporting herself and the children.
I make comment in passing only that I regarded it as a most inappropriate submission on the part of Mr Howard that he should be critical of the mother in somehow informing the Child Support Agency that there was money in a joint trust account which enabled a child support debt to be taken from joint funds so she paid, in effect, one half of the debt owed by the respondent to the Child Support Agency herself so that she gets, indirectly, some benefit. I cannot do anything about a debt that has been paid, but it is not an appropriate submission to be made that she was somehow the victim, not only the victim but the author, of her own problems in that regard.
That, I think covers the matters that were in contention between the parties. It is with regret, as I said, that in my opinion I am obliged to discharge the mother’s application for periodic spouse maintenance. I make the Orders I do in relation to spouse maintenance based on the factors that I have outlined previously.
I make the usual Orders about the return of subpoenas – the material that has been produced, subpoena, or which became exhibits in the proceedings.
I provide finally in Order 35, and only by way of explanation to you now that either party may provide a copy of these Orders to any school either child may attend, or any medical practitioner treating either child. I say that because the Orders make provision for the school and or the medical practitioner to provide information to the other parent and these Orders which provide the justification for their doing so might, if published to someone in the public, constitute a breach of s 121 of the Family Law Act. And that the Order 35 relives the school and the parents, each of them or their lawyers from the potential obligation and liability that may give rise to.
Otherwise, the matter is removed from the pending cases list.

I certify that the preceding sixty-nine (69) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice Faulks delivered on 16 July 2015.

Associate:

Date: 31 July 2015

[2015] FamCA 631

16 July 2015

Key Legal Topics

Areas of Law

Family Law

Equity & Trusts

Legal Concepts

Procedural Fairness