KEDDY & KEDDY
[2019] FCCA 3850
•17 December 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| KEDDY & KEDDY | [2019] FCCA 3850 |
| Catchwords: FAMILY LAW – Property – undefended final hearing – where the wife seeks property settlement orders – where the husband failed to provide disclosure or to properly participate in the proceedings where the husband failed to apply for the appointment of a litigation guardian despite ample opportunity – where initial contributions were nominal – where the contributions of the parties at separation were equal – where post separation the husband accessed substantial funds from his superannuation and the parties’ former business, the use of which remains unexplained – where the husband has accrued significant credit card debt post separation – where the husband did not pay child support – where the mother has sole care of the children – just and equitable outcome. FAMILY LAW – Costs – where the father has failed to properly participate in proceedings and whose behaviour has fallen far short of what the court would expect – fixed costs awarded to the mother. |
| Legislation: Family Law Act 1975 (Cth), pts.VII, VIII |
| Cases cited: M & M (1998) FLC 91-979 Colgate-Palmolive & Cussons (1993) 46 FCR 291 |
| Applicant: | MS KEDDY |
| Respondent: | MR KEDDY |
| File Number: | NCC 1781 of 2018 |
| Judgment of: | Judge Betts |
| Hearing date: | 30 July 2019 |
| Date of Last Submission: | 30 July 2019 |
| Delivered at: | Newcastle |
| Delivered on: | 17 December 2019 |
REPRESENTATION
| Counsel for the Applicant: | N/A |
| Solicitors for the Applicant: | Landmark Legal (Ms Driver) |
| Counsel for the Respondent: | N/A |
| Solicitors for the Respondent: | N/A |
ORDERS
THE COURT ORDERS IN RELATION TO THE PARENTING PROCEEDINGS THAT:
The Mother have sole parental responsibility for the children X born in 2003, Y born in 2005 and Z born in 2011 (“the children”).
The children live with the Mother.
The Father have no contact with the children.
Pursuant to section 11(1)(b) of the Australian Passports Act 2005, the Mother is authorised to apply for and retain a passport for the children X born in 2003, Y born in 2005 and Z born in 2011 without the Father’s written consent or approval.
Pursuant to section 65Y of the Family Law Act 1975, the Mother is at liberty to travel outside of the Commonwealth of Australia with the children whether or not the Father has consented to any such travel.
THE COURT ORDERS IN RELATION TO THE PROPERTY PROCEEDINGS THAT:
The wife be declared to have the sole right title and interest in and to the property situated and known as A Street, Suburb B being the whole of the land comprised in title reference …60 to the exclusion of the Husband.
The Husband be solely liable for and indemnify and keep the Applicant Wife indemnified for any liabilities imposed by the Australian Taxation Office for non-compliance by him as trustee with any relevant superannuation and taxation legislation in respect of the Keddy Superannuation Fund.
The Husband be solely liable for and indemnify and keep the Wife indemnified against any liabilities in his sole name including but not limited to liabilities to:
(a)The Commonwealth Bank of Australia;
(b)B Group;
(c)National Australian Bank;
(d)C Group Pty Ltd;
(e)D Bank.
The Wife is to be solely liable for the E school fees to date and indemnify the Husband in respect thereof.
The Husband be declared to have the sole right title and the interest in and to F Pty Ltd to the exclusion of the Wife.
Unless otherwise specified and except for the purposes of enforcing the payment of any money under these or any subsequent orders:
(a)Each party be solely entitled to the exclusion of the other to all property including choses in action in the possession of such party as at the date of these orders;
(b)Any money standing to the credit of the parties in a bank account are to be retained by the party in whose name the account appears;
(c)Each party hereby forgo any claim they may have to any superannuation benefit belonging to or in the name of the other party.
In the event that any party refuses or neglects to comply with any provision of these orders then a Registrar of the Federal Circuit Court of Australia is hereby appointed pursuant to section 106A of the Family Law Act 1975 to execute any deed or instrument in the name of the party in default and do all acts and things necessary to give validity and operation to these orders. An Affidavit by the party as to the other party’s default will be sufficient to enliven the Registrar’s jurisdiction pursuant to this order.
The defaulting party pay all reasonable costs incurred by the other party for the purpose of executing order 12 herein.
THE COURT ORDERS THAT:
The Husband pay the Wife’s costs of and incidental to these proceedings fixed in the amount of $25,000.00 with such costs to be paid by no later than 31 March 2020.
The proceedings be removed from the Active Pending Cases List.
IT IS NOTED that publication of this judgment under the pseudonym Keddy & Keddy is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT NEWCASTLE |
NCC 1781 of 2018
| MS KEDDY |
Applicant
And
| MR KEDDY |
Respondent
REASONS FOR JUDGMENT
These reasons for judgment were delivered orally. They have been corrected from the transcript so as to make them easier to read.
Background:
The court has before it an application for both parenting orders and property settlement orders following the breakdown of the marriage between the Applicant, Ms Keddy (described herein as "the wife" or "the mother") and the Respondent, Mr Keddy (described herein as "the husband" or "the father").
The parties commenced a relationship around 1998, married in 1999, and finally separated on 22 October 2016 after a relationship of some eighteen (18) years.
The parties have three children:
(a)X - born in 2003 (aged 16);
(b)Y - born in 2005 (aged 14); and
(c)Z - born in 2011 (aged 8).
The wife and children continue to live in the former matrimonial home.
Litigation history leading to the proceedings ultimately being determined on an undefended basis:
The matter is proceeding by way of an undefended final hearing, both as to parenting and property issues.
The matter has a sorry procedural history, and it would be fair to say that this is largely, if not entirely, due to the husband's non-compliance with court orders, his non-compliance with court rules, and his failure to properly participate in the proceedings generally.
The husband’s defaults seem to be secondary to a very serious mental health condition on his part, if not multiple mental health conditions, but the court has had to “draw a line in the sand” in this matter and bring it to an end because there are two parties to this proceeding. As unfortunate as the husband's circumstances are, there is also the wife to consider, and she needs this litigation to come to an end, as do the children in this case.
The wife commenced her application on 14 June 2018. When the matter first came before me on 24 July 2018, the wife was represented by her solicitor, Ms Driver, and the husband was represented by his then solicitor, Mr Dobinson. On that day, on the basis of the material before the court, interim orders were made for the children to live with the mother, for the mother to have sole parental responsibility, and for the father to have no contact with the children. This was on the basis of serious risks concerning the father's care of the children to which I will turn shortly.
The court separately ordered that the husband/father file his response material by 4 October 2018 and that the parties attend a Child Inclusive Conference on 8 October 2018. The proceedings were otherwise adjourned to 29 October 2018 for directions before me.
The matter next came before the court on 29 October 2018 by which time the Child Inclusive Conference Memorandum was available. Again Ms Driver appeared for the wife. On this occasion Ms Wilson, solicitor, appeared for the husband.
The husband had still not filed his response material and an extension of time was granted. He was ordered to file his material by 24 January 2019, and I reserved the wife's costs of and incidental to that day on an indemnity basis noting the husband's non-compliance with orders. The proceedings were otherwise adjourned to 9.30 am on 26 February 2019 at Newcastle for a directions hearing including a hearing in relation to the wife's application for costs.
The matter next came back before the court on 26 February 2019. The husband had still failed to comply with the orders in relation to filing his response material. He had never filed a Response, an affidavit, a Financial Statement, or a Notice of Risk. By this time, the wife was urgently applying to the court for an order that the matrimonial home be transferred from joint names into her sole name because she was concerned about the husband racking up significant debts and otherwise wasting matrimonial assets.
On this occasion, Ms Driver again appeared for the wife and Ms Wilson again appeared for the husband. The court made orders setting down the wife's Application in a Case for interim hearing on 23 May 2019, and it also ordered that the father be restrained from publishing - by electronic means or otherwise or distributing to the public - any material relating to the proceedings including, but not limited to publishing information on Facebook or on other social media sites.
The court also ordered that he immediately remove all of his Facebook posts referring to these proceedings and I note, in this regard, that the husband had posted inflammatory and abusive material.
The court again granted the husband an extension of time to file his material – the new deadline being 30 April 2019. The court directed that such response material address not only the wife's Application in a Case (to transfer the former home into her sole name), but also the question of the appointment of a Litigation Guardian for the husband.
The court ordered that:
In the event the respondent father fails to comply with these orders, the court will consider proceeding to an undefended basis on the next occasion.
Again, the applicant wife's costs of and incidental to that day were reserved.
The wife was granted leave to issue more than five (5) subpoenas because the husband was not properly participating in the proceedings. He had not filed any material. He had not made any proper financial disclosure to the wife. Accordingly, it was necessary for the wife to herself “join the dots” in terms of what was happening with the finances of the parties.
When the matter came before the court on the next occasion, 23 May 2019, Ms Driver once again appeared for the wife and Ms Wilson appeared for the husband. I can distinctly recall the look of discomfort on Ms Wilson's face sitting in court; she was rather anxious to withdraw from the proceedings and I suspect, frankly, she was fearful of her own client. She sought leave to withdraw and she subsequently was given that leave, and the husband then appeared self-represented.
The husband was somewhat agitated, and it was certainly clear to me that he was struggling. At times he was barely able to contain himself, uttering abusive remarks in the wife's direction although, to be fair, he was not in any way abusive towards the court. He certainly was struggling to contain himself. He still had not filed any material. He had not brought any application for the appointment of a Litigation Guardian.
Having heard the argument in relation to the wife’s Application in a Case, the court made orders that the home be transferred to the wife, and that she do all things to discharge the mortgage on the property and replace it with a mortgage in her own name. In default of the husband signing the necessary forms, the court ordered that a Registrar of the Federal Circuit Court be appointed to execute documents on the husband’s behalf.
The court also set the matter down for 2.15 pm on 30 July 2019 for an undefended hearing.
It emerges from the file that, in fact, the husband did not do what the orders required him to do. The Registrar's jurisdiction to execute the transfer had to be invoked and, in fact, the Registrar ended up signing the transfer documents on the husband's behalf and any other necessary documents.
The undefended hearing:
The matter came back before the court again on 30 July 2019 for undefended final hearing. On that occasion, Ms Driver appeared again for the wife and the husband again appeared self-represented.
Once again, the husband’s presentation was of concern to the court. He tendered a letter from Dr G, a psychiatrist, dated 26 July 2019 which essentially stated that the husband was struggling since the loss of his job in early 2018, and the loss of his livelihood. Dr G expresses her concern that, in consulting the husband throughout 2019, he was vulnerable and had been – potentially - manipulated or exploited by others in his state of vulnerability; that he was currently financially destitute; and she was unsure how he was even lawfully surviving.
The husband was facing a number of criminal charges, many of which he was unable to logically explain, and he was concerned that he was facing gaol time. Dr G stated that she had struggled to manage the husband biologically for many reasons. She was concerned about the side effects of previous medications that had been prescribed. She noted that his GP had prescribed the husband Lithium two (2) years ago to manage his mood disorder and that, until the “snowball” of psychosocial stressors that the husband had since experienced, the Lithium had been beneficial.
She noted that in his ongoing state of disorganisation and confusion, the husband had developed Lithium toxicity and stopped taking it altogether, as set out in one of the earlier letters prepared by Dr G of 28 February 2019. Dr G had prescribed an alternate mood stabiliser and anxiolytic for the husband, but she was concerned that it was sedating him and making his neurological state worse. She stated that he was not able to make any decisions, organise or plan, or execute his life in any rational manner. His mental state was unpredictable and disorganised.
Dr G considered that the husband’s physical status and upkeep were dishevelled. His sustenance was poor due to financial reasons and he was depressed, secondary to losing purpose in his life including contact with his children. Her advice to the court was that his complex needs would be best met in a multi-disciplinary setting where he could avail himself of clinicians, social workers, outreach/crisis team and a psychologist - and that in her current situation Dr G was unable, in her capacity, to provide the best care for him at that stage.
The husband, essentially, relied upon this letter to seek an adjournment of the proceedings.
Having considered that letter and having heard submissions from Ms Driver, the court decided that it ought to proceed to an undefended hearing. This was no small decision, and it weighed upon me at the time because I could see that the husband was genuinely struggling with his mental health. As before, he was extremely agitated. He was abusive. He would ramble incoherently, and he would say aggressive things in the wife's general direction, accusing her of ruining his life and the like. He did not seem able to contain himself. He did appear to be dishevelled. At some point during the hearing, he got up and left.
The difficulty for the court is, as I have said earlier, that there are two parties in this proceeding, a husband and a wife. There are also three innocent children caught in the crossfire of this unhappy family dispute. I had given the husband every opportunity to obtain a Litigation Guardian. I had given him every opportunity to file response material. He has had legal representatives. There are two separate legal firms who represented him at different points, each of whom then sought to withdraw.
There was no other realistic alternative than for the court to proceed on an undefended final basis acknowledging, as I do, that there is an inherent injustice, if not prejudice, in such a course. But the reality is that had the court taken any other step, then the proceeding would simply have rolled on with no end in sight, and with absolutely no guarantee whatsoever that the husband was actually going to take any constructive step in the meantime.
The material before the court:
In the course of the hearing, Ms Driver tendered numerous subpoenaed documents as exhibits. The court has had regard to the documents that were tendered, as well as to the prior orders made in the proceeding to which I have earlier referred. The court has benefitted from the Case Outline prepared by Ms Driver, which is exhibit “W1”, and the court has had regard to the material referred to in that document under the heading “Material to be relied upon”. [1]
[1] Part E of the document.
Determination of the parenting proceedings:
I turn, then, to the parenting proceedings first.
The law:
Parenting proceedings fall within Part VII of the Family Law Act (“the Act”). The court is obliged to regard the best interests of the children as the paramount consideration. The objects and principles of Part VII are set out in section 60B of the Act. Section 60CC prescribes the mandatory best interests considerations to which the court must have regard in arriving at its statutorily-mandated best interests decision: section 60CA and section 65AA of the Act.
Relevant facts:
Turning to the facts, the father was the primary breadwinner during the relationship and the mother was the primary carer.
It is quite clear from the mother's unchallenged affidavit filed 14 June 2018 that the parties were in a difficult, unhappy and - I would find - dysfunctional relationship. It was a relationship characterised by the husband's emotional volatility which, at times, was manifested as:
(a)family violence; and
(b)abusive and aggressive behaviour towards her and, on occasion, the children.
The mother's affidavit is to the effect that as early as 2003, the husband was diagnosed with anxiety and depression. He had a difficulty with alcohol abuse. He also, it would seem, took illicit drugs from time to time. Most notably this included methylamphetamine (“ice”), which is a particularly insidious drug and, indeed, in my view, a complete and utter scourge on Australian society.
The husband threatened, on occasions, to kill himself. The wife attended the husband's GP with him. It was suspected that he was suffering from bipolar disorder, and he was prescribed with a mood stabiliser.
The wife's affidavit is replete with evidence that sets out the difficulties in managing the husband's behaviour. Being unchallenged, I accept the evidence set out in that affidavit.
In the lead-up to separation, he was regularly becoming verbally abusive towards the wife, and intimidating in his anger and aggression. He would regularly refer to her as "fucking stupid" or "a lazy bitch", such words being used in the children's presence. On one occasion, he threw a phone at the wife which hit her in the hip.
The wife could not talk to the husband about his behaviour. He would tell her words such as, "Fuck off and phone a friend…Find someone who cares…Get out of my fucking face."
On occasions, if he became angry while driving with the family in the car, he would drive very fast and drive right up to the back of the car in front, making the mother fearful as to the safety of the children.
On the day of separation, the parties were arguing, and the husband told her that she had to leave. He stormed down the stairs, turned to their son, X, and said to him words to the effect of, "What the fuck do you think you are looking at?" He also called the wife a "fucking pathetic little housewife" in front of the children.
It is a mark of the intensity of the husband's mental difficulties, and his intimidating and aggressive behaviours that X, the oldest boy, suffered from bedwetting from the age of five (5) to the age of thirteen (13). This only stopped when his father moved out. While I have no medical evidence to say that his bedwetting was caused by his father's behaviours, I am strongly of the view that it is likely that this is so. The impact of the sort of abusive behaviour perpetrated by the father, including in the children's presence, is a well-known destroyer of the emotional wellbeing of children.
This court deals with family violence all too often, and its consequences are harrowing and often, frankly, not understood or even appreciated by the adults who perpetrate such behaviours.
The father has behaved in an erratic and aggressive manner. He has been neglectful of the children. On one occasion he took X away to a concert, and then left him in a hotel room on his own at a time when X would have been only 13 or 14 years of age.
The husband perpetrated family violence, and an apprehended violence order (“AVO”) was taken out against him by the Police.
His behaviour post-separation was particularly concerning. He sent the mother numerous text messages when the children were in her care, including notably on one occasion a picture of a doll from a horror film holding a knife which would have been most upsetting and disturbing for her.
Not only was the AVO taken out against the father, but he subsequently breached the AVO and was dealt with by the courts.
On one occasion, the father effectively tailgated the mother's car, and she then went straight to the police and made a statement to them.
The children reported to the mother that the father was making them feel uncomfortable.
The father engaged in self-indulgent - but perhaps explicable on the basis of mental illness - emotional abuse towards the children. On one occasion, he sent a message to the children's phone which read:
Fuck off and leave us alone. Dad did nothing for you ever. I'm just a deadbeat dad who's not worth anything.
X was upset by what his father was sending him and he told his father to stop doing it because he was making him feel stressed. The father response was:
Thanks for that. I'm glad that I'm that important in your life. I'll fuck off then.
The father showed an inability to shield the children from his seriously disturbing emotionally abusive behaviour, but this is by no means the first time that he had behaved in such a way. There is a pattern of such behaviour exhibited by him through the relationship.
Moreover, the husband fell into the difficulty of what might be called "bad company". He was taking drugs, as I have indicated, particularly methylamphetamine. The husband in a text message to the wife in early 2018 said that he was shaking, and losing strength in his legs, arms and hands.
It would be fair to say that the husband was on a serious downhill spiral.
It seems to me from the wife’s evidence that she wanted to promote a relationship between the husband and the children – provided that it was safe. But in terms of his communication with the children, the husband’s behaviours were such that the wife ended up having to protect the children from him.
The husband sent messages to the children saying that he was not good enough for them, that he used to have a place in their lives, but that his void had been filled "and replaced by better people, I guess." To put a guilt trip on his own children, who were the victims of his behaviour, simply added insult to injury, but that is exactly what the husband did.
Alarmingly, and perhaps at the base of the father's problems, he also sent a message to X in which the father talked about being raped when he was a child, and that he thought he was okay, but had later realised he had not been able to deal with it effectively.
It might be that the father’s text is truthful, but the court is not in a position to know anything about it - save to say that it represented, perhaps, a cry for help from the father. But, again, it is an example of him involving, or attempting to involve, the children in adult issues that they desperately need to be protected from.
CIC Memorandum:
The Child Inclusive Conference Memorandum, which was prepared on 8 October 2018 by Family Consultant Ms H, made for chilling reading. It observed that there was an AVO in place, and that the children were reporting that the parents used to argue, and that the father used to swear at the mother.
The father admitted post-separation drug use, including ice. He said he used illicit drugs socially during the relationship, and had last used on the June long weekend in 2018. He told the Family Consultant that he was seeing a psychiatrist every three (3) weeks and a psychologist every three (3) weeks, and that he was being a given a provisional diagnosis of possible bipolar disorder, substance-induced mood disorder, and borderline personality disorder.
The mother told the Family Consultant that she wanted the father to have a relationship with the children; she acknowledged that he loved them and that they loved him; but she was concerned at his behaviour. She was also concerned about the company that father was keeping as he allegedly had a known drug user living with him at one point after separation.
X was able to recall that living in the family home was like walking on eggshells, having regard to his father's moods. He thought his father's moods became worse over time, but he also thought that the mother had some issues of her own in coping with the separation. Sadly, he really did want to see his father, and he told the consultant that "not seeing him sucks". He disliked not seeing his father. But equally, when he did see his father it caused him stress. X just wanted his father to get some help to deal with “stuff in the past”. He wanted the judge to know that he did not want to be a messenger between the parents, and that the AVO had put him in a difficult position because his mother would not communicate with the father and, instead, used him as a messenger which was unhelpful from his perspective.
In terms of Y, she remembered the parents living together, and she described verbal fights where the father would swear a lot. She described being scared, and not knowing what they might do to each other.
Hers is the classic presentation of an anxious child who has been exposed to high parental conflict and, on occasion, family violence. Sadly, she too missed her father although she described him as being unpredictable and said he could easily become angry.
She was also unhappy and scared about all of the father's body piercings and found them embarrassing when he came to the school. Like X, she would be happy to see the father, but she was concerned about his presentation and he did make her anxious.
As for Z, she too had seen the father yell at the mother which she did not like, and she thought that he got really frustrated all the time. She could recall the father chasing them at some earlier point and said that he was scary. She said that she would not like to see him now.
Under the heading “Future Directions”, the Family Consultant stated that it appeared that the children had been exposed to frightening behaviour by the father which had made them concerned about seeing him, and that Y and Z missed him but, equally, were also ambivalent about seeing him given his past behaviour. They just wanted him to behave in a more predictable and safe manner.
The Memorandum suggested some supervised time in the interim, and that the court consider appointment of an ICL.
Subsequently:
The sad reality of the matter is that nothing much has improved or changed since that time. The father has struggled to maintain any semblance of functional mental health. He has not been having a relationship with the children and, indeed, the mother has been in the difficult position of, effectively, having to protect the children from him.
His presentation in court is certainly such that I have no doubt whatsoever that the father, whether knowingly or unknowingly, would have a very distinct capacity to intimidate people.
Best interests findings - primary considerations:
In terms of the section 60CC considerations, the reality of this case is quite straightforward.
The children may benefit from having a meaningful relationship with the father but, on balance, he poses unacceptable risk to them, as that concept was explained in the High Court decision of M & M (1998) FLC 91-979. The risks are manifest and across multiple levels. He is a physical risk, having regard to his own dishevelled and difficult state of physical health, and his propensity for violence. He is an emotional risk, having regard to his uncontrolled outbursts.
He has perpetrated family violence in the past. He has been dealt with by courts for breaching AVOs. In the context of the property proceedings, to which I will turn shortly, he makes admissions to his doctor in relation to his mental health being greatly impaired. He clearly has had significant issues with his mental health functioning for a long time, and there is other material from Dr G, which is contained in the subpoenaed records and exhibited in these proceedings, which refers to the real difficulties in his mental health, and about him keeping bad company and, potentially, having been robbed by other such persons.
When he was in court before me, I asked him about his upcoming appearance in the Local Court fairly shortly. He was not really able to give me any clear picture of what he was even charged with. His account was completely incoherent, and I struggled to understand even the most basic information from him about what was actually going on. Dr G seems to have had similar difficulties. She could not get a logical sequence of events out of him either.
In my view, the children overwhelmingly need to be protected from their father. That is the tragic reality of his mental illness. It may be a legacy - and it would be particularly tragic if this was so - that his own alleged experience of being raped as a child - may well be at the very base of all of his mental health and related problems. But only the father knows that, and only he can take the steps that he has to take as a parent in order to be able to put his children first.
Under the Family Law Act 1975 (Cth) (“the Act”), children have rights and parents have responsibilities. The number one responsibility for the father, it seems to me, is to get his mental health in check and then - and only then - for him to work on developing his relationship with his children. He simply poses too much risk to them at this time.
I do not propose to further address the risk factors. I accept the wife's affidavit evidence. There are numerous documents annexed to her affidavit which speak to the very high level of risk posed by the father in relation to his mental health and his acts of family violence.
The children obviously benefit from a meaningful relationship with their mother who is the only stable “rock” in their life in terms of their parenting, and she has done her best to provide them with a solid and safe environment in what must have been very difficult circumstances on a great many occasions.
Best interests findings – additional considerations:
In terms of the additional considerations, the older two children seem to want to see their father, but given the events that have occurred in this matter, and given the risks that are posed, I cannot give such views any real weight.
If the father was volunteering to spend time with the children at a contact centre, and if he was properly participating in the proceedings and providing the court and the mother with evidence of his medical treatment and mental health treatment, then such a proposal might have been an option. But at this time there is no suggestion that he would even comply with an order for supervised time.
The children's relationship with their mother is a close one. Their relationship with their father, sadly, is becoming fractured. But at this time, it is in their best interests to be protected from him.
The father has been recalcitrant when it comes to properly supporting the children's finances. He stopped paying child support altogether around March of 2018 while it seems to me that at the same time he was squandering thousands of dollars in an unexplained way, probably on drugs and/or gambling or other activities.
His decision-making is probably impaired by his mental health, but the reality is that the father has failed to properly provide for his own children since separation. (I will return to that aspect of the matter a little later in the context of property issues).
The wife is effectively seeking orders that correspond with the interim orders the court made in July of 2018, which provide that the children live with her, that she have sole parental responsibility, and that they not spend time with the father.
If I were to make the orders that she proposes today, then I am really only making those orders again - but on a final basis and with the addition of some orders for travel and passports and the like. There would be no real change in the circumstances for these children. Though their present circumstances are far from ideal, the court is simply not dealing with an ideal set of circumstances.
Practical difficulties and expenses do not really arise in this case. The issue is the father's risk, and his emotional and physical risks posed to the children.
The mother has the capacity to parent the children. The father at this time, sadly, does not. In fact he seems to lack the capacity to even properly care for himself, let alone for the children.
I am aware of the children's age, maturity and other relevant material. These matters do not take me very far in this particular case.
The mother has shown the appropriate attitude to parenting, save that according to X she used him as a “go-between”. The mother’s proposed orders will save X (and the other children) from being caught in that difficult, if not impossible, dynamic.
I have addressed family violence matters already.
The court intends to make orders that are least likely to lead to the institution of further proceedings.
Applying the statutory pathway & arriving at a “best interests” conclusion:
Section 61DA(2) is engaged as a result of the court’s findings. The court will therefore not apply any presumption that it is in the best interests of the children to make an order for equal shared parental responsibility because the court has reasonable grounds to believe that the father has engaged in family violence against the mother. Moreover, he has also engaged in “abuse” of the children in the context of his emotionally abusive messaging to which I have referred. [2]
[2] The term “abuse” is statutorily defined in section 4 of the Act
On any logical analysis, it takes the court no time at all to come to the view that the parents should not be expected to communicate at all for the purposes of making decisions about the children. They are unable to communicate. The mother is scared of the father and, in my view, understandably so. His messages to the children are also a serious concern, and demonstrate that he is unable to filter, in an appropriate way, his communications as is expected of a parent.
The father has not properly participated in these proceedings. He has never filed an affidavit, a Notice of Risk, or a Response. He has not put on any evidence beyond participating in the Child Inclusive Conference at which real concerns were raised about his presentation, and about the things that he was telling the consultant.
In all of the circumstances, the court considers that the only logical order to make in this case is that the wife have sole parental responsibility for the children.
In terms of the children's living arrangements, the only logical order is for the children to live with the mother who is providing them with a safe and stable home.
The third order, and a melancholy order for a court to make, is that the father have no contact with the children.
The mother also wants to be able to potentially travel overseas with the children at some future time if finances permit. There would seem to be no good reason why she should have to obtain the father's consent to sign a passport for them, noting his previous non-compliance with orders that required him to sign transfer documents for the former matrimonial home. The father cannot be relied upon - if he is even able to be contacted, which is another issue - to fill out the necessary passport application forms. I do not want to put this family through having to come back to this court to seek relief when I can make orders now which prevent that from being a future problem.
Nor should the father be in a position where, having regard to the orders that I am making, he could simply “veto” any overseas trip proposed by the mother by refusing to give his consent as required by section 65Y of the Act. This would hardly be in the best interests of the children at this time.
For these reasons, the court makes the final parenting orders set out earlier herein.
Determination of the property settlement proceedings:
The wife seeks property relief pursuant to the provisions of Part VIII of the Act.
I have briefly set out some of the chronology earlier in these reasons, and the material that has been relied upon by the court. I will not repeat what I have said.
The law:
Having regard to the provisions of Part VIII of the Act, and to the relevant authorities, I intend to adopt the following approach:
(a)Firstly, I will identify and value the assets, liabilities and financial resources of the parties;
(b)Secondly, I will consider whether it is just and equitable to make a property settlement order;
(c)Thirdly, I will identify and assess, as best I can, the respective contributions by the parties towards the matrimonial property;
(d)Fourthly, I will identify and assess the relevant future factors sets out in section 75(2);
(e)Fifthly, I will consider the effect of my findings and proposed orders so as to satisfy myself that the proposed orders are just and equitable.
Before proceeding further, I want to make a few observations. The first is that the husband has failed to make any proper financial disclosure. This means that from the wife's perspective, it is very difficult, if not impossible, for her to attempt to be precise in terms of what her likely property settlement entitlements might be. She has been deprived of all of the basic information that the husband should have given her. So too have the wife's solicitors.
Importantly, the court has also been deprived of a comprehensive statement by the husband, or of any attempt at disclosure by him so as to explain the financial circumstances.
The court is asked to make an order that is ultimately just and equitable, as mandated by the Act, in circumstances where the court is to some extent “flying blind” as a direct result of the husband's default. Even though the husband has suffered from mental illness at all relevant times, the reality in this proceeding is that he could - and indeed should - have taken some steps to have a Litigation Guardian appointed for him.
And as I have earlier indicated, there are two parties to the proceedings not just one.
The husband's failure to participate means that the court is limited in terms of its capacity to truly do justice and equity. Relevantly, the court intends to take the view that it ought not to be unduly cautious about making findings in the wife's favour, having regard to the husband’s non-disclosure. Particularly, I refer to the decision of the Full Court in Black & Kellner (1992) FLC 92-287, and to the other authorities in the same vein such as Mezzacappa & Mezzacappa (1987) FLC 91-853.
The other matter I would record is that the wife's evidence is unchallenged.
Step 1 – Identifying & valuing the matrimonial property:
Ms Driver has, very helpfully, issued multiple subpoenas and tendered multiple documents to assist the court.
In a practical sense, she had to do so because the husband was not making proper disclosure.
Helpfully, Ms Driver has tendered as exhibit “W4” a Balance Sheet as at separation and as exhibit “W5’ a Balance Sheet as at now. I propose to adopt the balance sheet set out in exhibit “W5”, as being the current assets and liabilities. For convenience exhibit “W5” is reproduced below:
Balance Sheet (Current)
ASSETS
| Ownership | Description | Wife value | Husband value |
| Joint | A Street, Suburb B | $600,000 | $600,000 |
| Husband | F Pty Ltd | $NK | |
| Husband | ANZ Access Advantage account #...61 | $655 | |
| Husband | CBA Direct Investment account | $1 | |
| Wife | D Bank account #...04 | $1,964 | |
| Wife | D Bank account #...45 | $1,653 | |
| Total | $604,273 |
ADDBACKS
| Ownership | Description | Wife value | Husband value |
| Husband | Super Fund J | $153,049 | |
| Husband | Keddy SMSF | $21,898 | |
| Husband | F Pty Ltd | $62,777 | |
| Total | $237,724 | $0 |
LIABILITIES
| Ownership | Description | Wife value | Husband value |
| Joint | K Bank Mortgage account no. …18 | $203,825 | |
| Joint | K Bank Mortgage account no. …06 | $59,165 | |
| Husband | Commonwealth Award Credit | $44,212 | |
| Husband | Go Credit card | $15,685 | |
| Husband | NAB Low rate | $0 | |
| Husband | C Group rewards | $18,577 | |
| Husband | CBA Smart Access #...70 | $1,995 | |
| Husband | Westpac | $NK | |
| Husband | Business Transaction account F Pty Ltd #...11 | $499 | |
| Wife | D Bank Visa | $727 | |
| Joint | E School Fees | $10,378 | |
| Total | $355,063 | $0 |
SUPERANNUATION
| Member | Name of Fund | Type of Interest | Wife value | Husband value |
| Wife | Super Fund L | Accumulation | $62,263 | |
| Joint | Keddy Superannuation Fund | SMSF | $1.00 | |
| Total | $62,264 | $0 |
FINANCIAL RESOURCES
| Ownership | Description | Wife value | Husband value |
| NETPOOL | With addbacks | $549,198 | |
| NETPOOL | Without addbacks | $311,474 |
I accept that all of the add-backs referred to in exhibit “W5” should be added back into the Balance Sheet. These total $237,724 of unexplained funds that the husband has withdrawn post-separation from superannuation or from the parties’ former business, F Proprietary Limited (“F”). He has, without reference to the wife, drawn down substantial moneys, including draining his own super funds.
Alarmingly, one would think that the husband’s superannuation moneys were “preserved” as a matter of law and should never have been able to be accessed by him. Yet the husband has accessed - and potentially squandered - all of this money with just about nothing to show for it that the court can see.
But having said this, Ms Driver observes in her Case Outline that the husband has also made unexplained deposits at different times such as a $24,754 cash deposit into an ANZ account ending …61 in the period between September 2018 and April 2019.
The husband's financial affairs are completely and utterly opaque. As I have indicated, it is appropriate having regard to decisions such as Kowaliw (1981) FLC 91-092 and Townsend (1995) FLC 92-569 that the moneys taken by the husband be added back in. The fact is that whether he has spent them - which is certainly a likelihood, or whether he still retains some of them - which is also a likelihood - the husband has never accounted for these funds. They were matrimonial assets, and his failure to account for them is greatly troubling to the court, and leaves the court with the view that the only proper way to do justice to these parties is to add those moneys back in full as the wife seeks.
The liabilities of the parties are also fairly substantial, as set out in exhibit “W5” at paragraph 115 of these reasons. Most notably from my perspective, the husband has run up a Commonwealth Bank credit card from some $21,000 at separation to $44,000. He has taken out a new Go credit card and run up a debt of $15,685, and his C Group Rewards card has gone from a $135 balance at separation to $18,577 according to the evidence before me.
I note that the husband has had a capacity to convince banks to loan him significant amounts of money on credit cards. Perhaps this is a reflection on the banking culture as much as anything else. The reality is the husband has overspent a number of these credit cards, and has been in default of the repayment arrangements.
Notably, the parties have also accrued a debt to E School for the children's school fees.
Exhibit “W4” is also relevant because it sets out the pre‑existing assets as they were when the parties separated. It can be seen from that document that the husband had superannuation at separation, and that there were significant moneys held in F’s bank accounts. For convenience exhibit “W4” is reproduced below:
Balance Sheet (at separation)
ASSETS
| Ownership | Description | Applicants value | Respondent value |
| Joint | A Street, Suburb B | $E640,000 | |
| Husband | F Pty Ltd | $NK | |
| Husband | CBA F Business online saver account | $62,777 | |
| Husband | CBA F Business transaction account | $2,545 | |
| Husband | K Bank account #...09 | $3,990 | |
| Total | $709,312 |
LIABILITIES
| Ownership | Description | Applicants value | Respondents value |
| Joint | K Bank | $218,904 | |
| Joint | K Bank | $64,265 | |
| Husband | CBA rewards credit card | $21,431 | |
| Husband | NAB Low rate visa | $6,469 | |
| Husband | C Group Visa | $135 | |
| Total | $311,204 |
SUPERANNUATION
| Member | Name of Fund | Type of Interest | Applicants value | Respondents value |
| Husband | Super Fund M (@1 July 2016) | Accumulation | $124,731 | |
| Joint | Keddy SMSF | SMSF | $5,456 | |
| Wife | Super Fund L | Accumulation | $49,732 | |
| Total | $179,919 |
FINANCIAL RESOURCES
| NET TOTAL | $578,027 |
Step 2 – Is it “just and equitable” to make a property settlement order?
Turning then to the question of whether it is just and equitable to make a property settlement order in this case, I am mindful of the decision of the High Court of Australia in Stanford & Stanford (2012) FLC 93-518.
I accept that the court must be satisfied, prior to making any property settlement order, that the making of such order would be “just and equitable” within the meaning of section 79(2) of the Act.
The expression "just and equitable" is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds. There are however three (3) fundamental propositions;
(i)Firstly, the court must identify the existing legal and equitable interests of the parties in the property. I note here that I have already done so;
(ii)Secondly, the court must exercise the power in a principled fashion.
(iii) Thirdly, the court cannot answer the question of whether it is just and equitable to make a property settlement order by assuming that the parties' rights or interests in and to the property are different from such as then exist. There can be no assumption that one or other party has a right to have the property divided between them merely by reference to section 79(4) considerations. Taking such an approach would be to impermissibly conflate the separate statutory requirements in section 79(2) and section 79(4).
The present case involved a lengthy relationship and intermingling of assets throughout. There are three children who are in the wife's overwhelming primary care. The relationship has failed. The wife seeks a property settlement order.
The husband has never filed any material opposing the making of an order.
There has been an AVO put in place between these parties. The wife is, to some extent, intimidated by the husband. These parties need to have their property separated as between them. They are no longer in a position to commonly share and use their property. The express and implicit assumptions that underpin their existing property arrangements were brought to an end by the voluntary severance of their relationship.
I also note that the husband's post-separation squandering of money or withdrawal of money occurred without reference to the wife, and that she has been legitimately concerned that she and the children might, to use the colloquial, "go down with a sinking ship" if she remains entwined with the husband financially. The court is comfortably satisfied that it is just and equitable to make a property settlement order in this case.
Step 3 – Assessment of contributions:
I intend to assess contributions globally in this case given the length of the relationship and the fact that, respectfully, each of the parties brought into it very modest assets. The parties were relatively young when they started a relationship, and they did not really have any significant assets.
A global approach in my view is appropriate: Norbis & Norbis (1986) FLC 91-712.
I find that the initial contributions of the parties were nominal.
Their contributions during the relationship were that the husband was the primary breadwinner and the wife was the primary homemaker and parent.
The husband set up an online business, F Pty Ltd, and he also worked independently for a separate business.
To be fair to the wife, her role was not only that of a homemaker and primary parent, which are difficult enough tasks in themselves, but she also she engaged in paid employment as well. She worked around her child care commitments. This was the way in which the parties structured their lives.
They bought a home, and they subsequently sold the home and bought their current home at Suburb B.
At separation, the parties had the assets which are set out in exhibit “W4” referred to in paragraph 123 of these reasons.
The court would find that at separation, the contributions of the parties were probably about equal. The reality is that the parties each made significant contributions over a lengthy period of time, and I see no real point of distinction between the parties.
Turning then to the post-separation contributions, these are a major point of difference between the parties.
In terms of parenting, the wife has been the primary carer for the children throughout. The wife has met the mortgage repayments and the property rates etc, since June of 2017. She has spent upwards of $40,000 doing so, as set out in exhibit “W6.” The husband stopped paying child support around March of 2018, so for the better part of the last twenty-one (21) months or so, the husband has not been paying any regular child support to the wife.
His child support income had apparently been assessed at around $48,000 per annum. On the evidence before me as set out in exhibit “W32”, the husband should have been paying somewhere between $400 and $1,300 per month in child support to the wife according to the various assessments that have been issued.
As I have indicated earlier, it is quite clear that the husband decided to significantly deplete his cash resources, including his own superannuation. According to exhibits which are before me, he was complaining in 2018 that friends had “robbed him” of money. The husband had made such a complaint to his doctors.
The husband was also complaining about his debt situation increasing. And it was suggested in exhibit “W31” that by August 2018, he was considering bankruptcy. He had earlier lost his job in early 2018, and he seems to have received a termination payout from that employer of around $25,000 on the subpoenaed material but none of this money is accounted for.
Post-separation, the reality is that, as I have earlier indicated in the context of exhibit “W5”, the husband has depleted his own superannuation, as well as the moneys that were sitting in F Proprietary Limited, all of which come to $237,724.
Only the husband knows whether those moneys, or any of them, still exist. To be fair, he may not in fact even know himself. He told me, from the bar table, that there are many financial transactions he cannot explain. He ran up credit card debts by more than $50,000 from what they were before. He failed to support his children. He has not been spending time with his children.
The court considers that having regard to the post-separation contributions of the parties, the only just and equitable and appropriate way to assess contributions is to make somewhat artificial adjustments to the Balance Sheet as follows:
(a)the court has regard to exhibit “W5” in terms of the current assets which total $604,273, noting the addbacks of $237,724;
(b)the court takes into consideration the mortgages of $203,825 and $59,165;
(c)the court takes into consideration the $28,035 that the husband's credit card debt was at separation, not the current figure;
(d)the court takes into account the debt to E School of $10,378;
(e)the court takes into account the wife's current superannuation balance;
(f)when the court adopts this notional approach, which is a hybrid of exhibits “W4” and “W5”, the nett assets for the purposes of the contributions assessment come to $603,258.
By way of explanation, what the court is effectively doing is disregarding, in a contribution sense, the husband's post-separation increase in his credit card debts. The court is instead carrying over the credit card balance at separation. The court is adding back the post-separation moneys that the husband took out, as I have indicated earlier.
On the basis that this is the appropriate way to assess contributions, the court would find that the wife's contribution-based entitlement to that adjusted Balance Sheet would be sixty-two and a half percent (62 ½ %) to the husband's thirty-seven and a half percent (37 ½ %) .
On that basis, the wife's contributions-based entitlement would be $377,036.25 to the husband's $226,221.75.
Step 4 – Adjustments (if any) for future factors:
Before I go any further, I should record that on my calculation, the wife presently holds assets totalling $392,512 which consists of the assets in exhibit “W5”, namely A Street, Suburb B, her two (2) D Bank accounts. She has the associated mortgages, which come to $262,990. She has the debt to E School of $10,378 and she has superannuation of $62,263 so she holds nett assets, including super, of $392,512. Her contribution-based entitlement is $377,036.25.
Turning then to what adjustments should be made by reference to section 75(2) factors, the wife's income is, with respect, modest. It roughly equates to her expenses. She is 42 years of age and in seemingly good health undertaking part-time administration work. She has the care of the three children. Her work capacity is somewhat limited by the care of these children.
The assets she has are modest but not insignificant.
The children attend a private school, as the parties intended for it to be, and the reality is that the wife has been doing all she can to keep the children enrolled in that school in what are difficult circumstances.
The husband's circumstances are largely unknown. He may, in fact, have cash resources of which the court has no knowledge. The husband has not put on any material. It is unknown whether he can support himself. Probably it is more likely than not that he cannot, but this is truly an unknown because his financial circumstances are utterly opaque, given his complete non-disclosure.
Certainly, it is not likely that the husband will be paying any significant child support to the wife, and certainly not voluntarily.
There are creditors in this case who may not be paid on the wife's proposed orders, but they are unsecured banks who have, it seems to me, chosen to loan money to the husband in circumstances where the banks are large corporate entities who, one would think, should be properly vetting their prospective customers and putting proper procedures in place to manage their debtors. The wife had no input in relation to any of these debts that were raised by the various banks.
In all of the circumstances, the court considers that there is appropriate room for a further adjustment to the wife, having regard to her care of the children. The adjustment would exceed the difference of $15,000 which is, effectively, the value of the assets that she would be retaining on her proposed orders.
Step 5 – Ensuring a “just and equitable” outcome:
Having regard to all of the matters identified herein, the court considers it is just and equitable for the wife to be able to retain the property that she seeks to retain in this case.
Conclusion:
In the circumstances, and for these reasons, the court makes the property settlement orders
Costs application:
The wife applies for costs consequent upon my proceeding to make final orders on an undefended basis today.
Her application falls pursuant to section 117 of the Family Law Act. Pursuant to section 117(1), the usual rule is that each party bears his or her own costs. However, section 117(2) goes on to provide if the court is of the opinion that there are circumstances that justify it doing so, then the court may make such order for costs as it considers just.
In this case, Ms Driver says that there are justifying circumstances, having regard to the relevant considerations in section 117(2A).
Addressing these:
a)I know the financial circumstances of the wife. I do not really have a clear picture as to the financial circumstances of the husband, but he certainly has had significant access to cash resources since separation;
b)Neither party is legally aided;
c)The husband's conduct of the proceedings has been dismal, to say the least. He has failed to provide any documents to the court. He has failed to comply with orders. He has failed to properly participate in the proceedings or to make proper disclosure in any way, shape or form. The wife has had to, through Ms Driver, do everything herself to be able to put the financial “jigsaw pieces” together;
d)The husband has failed to comply with orders.
e)He has been unsuccessful in the proceedings, and one could say wholly unsuccessful in the parenting proceedings.
f)In terms of offers in writing, Ms Driver tenders, as exhibit “W34”, a letter from the wife’s solicitors Landmark Legal of 23 April 2018 in which an offer of settlement was made concerning the property orders, as well as some proposals being made in relation to parenting - more relevantly in relation to property. The proposal was that the wife would pay the husband $80,000 cash.
This is a far more generous outcome to the husband that this court has determined to be just and equitable in the circumstances.
The court's usual position, when contemplating a costs order, is to consider making an order for standard (or party and party) costs. This form of order recognises that litigation is an expensive process for everyone and that, in the ordinary course, a costs order is not intended to be a complete indemnity.
In the decision of Colgate-Palmolive & Cussons (1993) 46 FCR 291, Sheppard J, by reference to earlier authorities, identified a number of categories of case in which an order for indemnity (or solicitor and own client) costs might be made.
These include a case where there is wilful default of court orders or other behaviour which falls far short of what the court would expect of a litigant, and which has made the other party's pursuit of the litigation, and the court's role generally, more difficult.
This is exactly what has happened in the present case. The husband has failed to properly participate in litigation to which he was a party. Particularly in respect of the property aspect of the matter, his behaviour has fallen far short of what the court would expect.
Ms Driver seeks an indemnity costs order originally pitched at $29,779.16 plus two additional amounts totalling $1,320 being costs reserved on earlier specific occasions as a result of the husband's default. Upon being questioned about the figure, the position taken by Ms Driver is that the wife would accept a figure of $25,000. Even on a party and party basis, the wife’s recoverable costs (on scale) in my view would be in excess of $10,000.
In my view the figure of $25,000 is an appropriate figure to order in a case such as this.
Although I have some empathy for the husband's circumstances, the reality is that the court gave him every opportunity to seek advice, every opportunity to properly participate in the proceedings. The court's job was rendered much more difficult by his own behaviour and, indeed, the effort and energy that Ms Driver had to display in order to bring this matter to a conclusion was far more than would reasonably have been required in a “standard” case, if such a thing exists in this court.
The court considers that the husband's defaults are of such a nature that in the unusual circumstances of this case that an order would be warranted fixed in the sum of $25,000 - which in truth represents a hybrid figure between what would be a full indemnity sought by the wife (around $31,000) and what would be a standard costs order (on scale) which would be somewhere between $10,000 and $20,000. The court considers that the making of such an order would be just, and that there are circumstances which justify so doing.
In the circumstances, the court will make a costs order against the husband.
In relation to that order, I am giving the husband a significant amount of time to pay those costs - more time than I would normally, but noting also that he is not here, and noting that there is a prospect, perhaps a real prospect, that such moneys may never be able to be recovered.
But as I have indicated, although I query whether this is a situation of trying to “draw blood from a stone”, it is certainly possible that the husband has access to other resources, given his unusual circumstances and the sheer amount of money that he has withdrawn since separation.
I certify that the preceding one hundred and seventy-five (175) paragraphs are a true copy of the reasons for judgment of Judge Betts
Date: 6 February 2020
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
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Equity & Trusts
Legal Concepts
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Costs
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Procedural Fairness
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Jurisdiction
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Remedies
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Statutory Construction
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Res Judicata
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