KELLOGG & FORTUNE
[2020] FamCA 173
•25 March 2020
FAMILY COURT OF AUSTRALIA
| KELLOGG & FORTUNE | [2020] FamCA 173 |
| FAMILY LAW – PARENTING – De facto relationship – two children of the relationship – where the Respondent has failed to participate in the proceedings – matter proceeded undefended – sole parental responsibility – children live with the mother – children spend time and communicate with father as agreed in writing between the parents. FAMILY LAW – PROPERTY – De facto relationship – where Applicant seeks a property settlement pursuant to s 90SM of the Act – where the Respondent has failed to participate in the proceedings – matter proceeded undefended – equal contributions at commencement – where the s 90SF(3) of the Act factors favour the Applicant – orders made. |
| Family Law Act 1975 (Cth) ss 90SF, 106A |
| APPLICANT: | Ms Kellogg |
| RESPONDENT: | Mr Fortune |
| FILE NUMBER: | MLC | 14161 | of | 2018 |
| DATE DELIVERED: | 25 March 2020 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Hartnett J |
| HEARING DATE: | 17 March 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Robertson |
| SOLICITOR FOR THE APPLICANT: | Robertson Legal and Conveyancing Lawyers |
| THE RESPONDENT: | No appearance |
Orders made 18 march 2020
Parenting
All previous parenting Orders be discharged.
The Applicant mother have sole parental responsibility for the children X born … 2009 and Y born … 2013 (‘the children’) and the Applicant mother is to keep the Respondent father informed, to the extent that is practicable, as to major events with respect to the children’s lives including any serious illness, schooling, and place of residence.
The Applicant mother have sole parental responsibility to obtain and/or renew the Australian Passports of the children and for this purpose, the Applicant mother is at liberty to apply for a passport for either and/or both of the children without first obtaining the consent of the Respondent father.
For the purposes of Order 2 herein, a copy of these Orders can be provided to the children’s school/s and treating medical and allied health practitioners and for the purposes of Order 3 herein, a copy of these Orders can be provided to the Australian Department of Foreign Affairs and Trade.
The children live with the Applicant mother.
The children spend time and communicate with the Respondent father as may be agreed in writing between the Applicant mother and the Respondent father.
The Applicant mother shall keep the Respondent father notified, to the extent that is practicable, if either of the children suffer a serious illness or injury. In the event that either of the children require emergency medical assistance, the Applicant mother shall provide to the Respondent father the name of the hospital and/or treating practitioner and all necessary contact details as soon as practicable.
Each of the Applicant mother and the Respondent father forthwith keep the other informed of their current residential address, mobile and landline telephone numbers and any available email addresses and advise the other of any change thereto within 7 days of such change.
Each of the Applicant mother and the Respondent father be permitted to liaise directly with the children’s school/s and sporting bodies to receive school notices, information, newsletters, school reports, school photographs and any other necessary information regarding the progress of the children.
The Applicant mother have sole parental responsibility in respect of administering and decision making for the scholarship of the child X with the Scholarship Fund (in the sum of approximately $3,500) and with fund name ‘… Education Fund’.
Property
The remaining net proceeds, in the sum of $141,177.93, held in the trust account of Robertson Legal and Conveyancing Lawyers Pty Ltd in the name of the parties, being part of the net proceeds from the sale of the parties’ real property situate at B Street, Suburb C in the State of Victoria be forthwith applied in payment of, in the first instance, the following liabilities of the parties and/or either of them:-
(a) to L Finance the sum of approximately $47,000;
(b) to M Services (N Town Kindergarten) the sum of approximately $1,180;
(c) to O Day Care (P Lawyers) the sum of approximately $638.15;
(d) to Q Company (R Group) the sum of approximately $4,063.28;
(e) to S Company (T Lawyers) the sum of approximately $4,360.64;
(f) to U Company the sum of approximately $481.35
(g) to the Australian Taxation Office the sum of approximately $3,734.75;
(h) to repayment of monies borrowed by the Applicant mother from Ms V the sum of approximately $17,000; and
(i) to repayment of monies borrowed by the Applicant mother from Mr W the sum of approximately $5,000.
In the event any of the above described liabilities, as set out in Order 11 herein, are able to be further negotiated by the Applicant mother such that any lesser sum may be due then the Applicant wife is at liberty to retain the funds saved by her in respect of such negotiations.
After payment out of all liabilities, as described in Order 11 herein, and subject to Order 12 herein, the balance remaining in the trust account of the Applicant mother’s solicitors in the name of the parties is to be paid out to the Applicant mother in its entirety.
The Applicant mother retain the $10,000 interim property settlement received by her pursuant to Order 5(a) of the orders made by the Honourable Justice Bennett on 1 April 2019 and the further $50,000 interim property distribution received by her pursuant to Order 1 of the orders made by the Court on 17 March 2020.
The Applicant mother retain sole ownership and possession of the removable portable chicken shed.
The Respondent father retain sole ownership and possession of the 57ft Ketch yacht.
The Respondent father retain sole ownership and possession of the various plant, equipment and/or machinery currently stored by him at the real property known as and situate at B Street Suburb C in the State of Victoria.
Each of the Applicant mother and the Respondent Father be liable for, and indemnify the other against, any and all liabilities in their respective names and any and all liabilities attached to any item of property retained by them pursuant to these Orders, with the Respondent father to be solely liable for, and indemnify the Applicant mother against any and all liabilities of whatsoever nature and kind incurred by and/or in the name of Fortune Pty Ltd ACN ….
That unless otherwise specified in these Orders and save for the purposes of enforcing any monies due pursuant to any of these Orders:-
(a) each of the Applicant mother and the Respondent father shall be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of each of them as at the date of these Orders;
(b) insurance policies shall remain the sole property of the beneficiary named therein as at the date of these Orders; and
(c) each of Applicant mother and the Respondent father shall be liable for, and indemnify the other against, any liability encumbering any item of property to which each is entitled pursuant to these Orders.
The Respondent father pay the Applicant mother’s costs reserved on 1 April 2019 and 12 April 2019 in a sum of $4,400, with such payment to be made to the Applicant mother’s solicitors and within 90 days hereof.
Superannuation
The base amount of $74,073.42 is allocated, as required by s.90XT(4) of the Family LawAct 1975 (Cth) (‘the Act’) to the Applicant mother out of the Respondent father’s interest in the Super Fund 1 Fund, member number 4541218 (‘the fund’).
In accordance with s.90XT(1)(a) of the Act, whenever a splittable payment becomes payable in respect of the fund:-
(a) the Applicant mother is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth) (‘the Regulations’) using the base amount allocated in Order 21 herein; and
(b) there be a corresponding reduction in the entitlement of the Respondent father to whom the splittable payment would have been made but for this order.
The trustee of the fund (‘the trustee’) shall do all such acts and things, and sign all such documents as may be necessary to:-
(a) calculate, in accordance with the Regulations of the Act and the Regulations, the entitlement of the Applicant mother created by Order 21 herein; and
(b) pay the entitlement whenever the trustee makes a splittable payment out of the Respondent father’s interest in the fund.
Orders 22-23 inclusive of these orders are binding on the trustee of the fund.
Order 23 of these orders shall have effect from the operative time, and the operative time is 4 business days after service of a certified copy of these orders on the trustee.
The Applicant mother cause a certified copy of these orders to be served on the fund within 14 days from the date of these orders.
There be liberty to apply to each party and the trustee in relation to the implementation of the orders effecting the superannuation interest.
After service of the payment split notice pursuant to r.7A.03 of the Superannuation Industry (Supervision) Regulations 1994 (Cth), the Respondent father and the Applicant mother shall do all such things and sign all such documents as may be necessary, including but not limited to, the Applicant mother exercising her request pursuant to r.7A.06(1) of the Superannuation Industry (Supervision) Regulations 1994 (Cth) for the rollover or transfer of the transferable benefits out of the Respondent husband interest in the fund to a fund of the Applicant mother’s choosing in accordance with r.7A.12 of the Superannuation Industry (Supervision) Regulations 1994 (Cth).
In the event that the Respondent father refuses or neglects to sign a document necessary to give effect to these orders, a Registrar of the Family Court of Australia at Melbourne is hereby appointed pursuant to s.106A of the Act to execute all documents and/or instructions in the name of the Respondent father and do all acts and things necessary to give validity and operation to such documents and/or instruments.
The Applicant mother shall retain as her sole property and for her sole benefit her interest in the Super Fund 2 Fund.
Procedural
As soon as practicable, the solicitor for the Applicant mother serve a copy of these Orders upon the Respondent father by service effected to the email addresses of the Respondent father, being:-
(a) …;
(b) …; and
(c) ….
Otherwise all extant applications are dismissed and the matter is removed from the list of active cases.
AND THE COURT NOTES THAT:
A.Pursuant to s.62B and s.65DA(2) of the Family Law Act 1975 (Cth), the particulars of the obligations these Orders create and the particulars of the consequences that may follow if a person contravenes these Orders are set out in the Annexure and these particulars are included in these Orders
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Kellogg & Fortune has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLC 14161 of 2018
| Ms Kellogg |
Applicant
And
| Mr Fortune |
Respondent
REASONS FOR JUDGMENT
Preliminary
These proceedings commenced on 7 December 2018 when the Applicant de facto mother (‘the Applicant’) filed an Initiating Application seeking final property orders. During the course of the proceedings she amended that application to also seek final parenting orders.
The Applicant has been required to attend at Court on a number of occasions to obtain necessary property orders. She has had no co-operation from the Respondent de facto father (‘the Respondent’) in respect of the property proceedings which included hearings on 1 April 2019; 12 April 2019; 21 June 2019; 6 November 2019 and 12 February 2020. With respect to the parenting orders proceedings, the Respondent has participated, consenting to orders made on 18 September 2019 by Registrar George. Whilst those orders, almost in their entirety, dealt with parenting matters, there was one order (order 11) that went to the property proceedings between the parties. Order 11 was as follows:-
By twenty-one (21) days, the Respondent/Father file and serve a Financial Statement.
This order was not complied with by the Respondent.
The orders to which the Respondent consented provided for the parties’ children X born … 2009 and Y born … 2013 (‘the children’) to live with the Applicant, and for her to have sole parental responsibility of the children. Time spent with the Respondent was as agreed between the parties. Otherwise, orders were made in like terms to the final parenting orders sought by the Applicant.
On 6 November 2019 the property matters proceeded. There was no appearance by the Respondent. Orders made that day included, relevantly, order one, wherein the matter was listed for consideration as an undefended hearing on 12 February 2020. Order three, was relevantly, as follows:-
If the Respondent husband files and serves a Response and Financial Statement prior to 12 February 2020 the solicitor for the Applicant wife is to notify the docket Registrar by email.
The Respondent’s failure to participate in the property orders proceeding has resulted in the matter proceeding on an undefended basis. Whilst that was envisaged by Registrar George in November 2019, on 12 February 2020, when the matter proceeded before me, I determined it could not proceed on an undefended basis as the Applicant then sought orders which differed from those set out in her Initiating Application. The Court ordered on 12 February 2020 that:-
(1) Within 7 days hereof the Applicant file and serve upon the Respondent:-
(a) further amended application setting out those parenting and property final orders as sought by her; and
(b) a copy of this order.
(2) The Respondent file and serve an affidavit of evidence in chief, a financial statement and any other affidavits of evidence on which he seeks to rely within 21 days hereof.
(3) In the event the Respondent fails to comply with order 2 herein and/or appear on the adjourned hearing date there is leave to the Applicant to proceed undefended.
(4) The Respondent is ordered to attend on the final hearing of the matter on 17 March 2020.
(5) Otherwise all extant applications are adjourned for final hearing to 17 March 2020 at 10.00am before Justice Hartnett.
AND THE COURT NOTES THAT:
A. Tendered in evidence this day is material from Super Fund 1 as to the Respondent’s present superannuation entitlements which indicate the Respondent’s superannuation account balance is in the sum of $101,240.31 as at 20 January 2020.
B. The Respondent has failed to comply with order 11 of the orders made 18 September 2019 and failed to appear at a mention hearing on 6 November 2019.
Undefended Hearing
On the hearing of the matter on 17 March 2020, the Respondent did not attend. He was called outside the courtroom on three occasions and did not respond to the call. He did not comply with order two of the orders of 12 February 2020. He filed no material including, importantly, a Financial Statement such that the Court could be possessed of some evidence as to the Respondent’s current financial circumstances.
The Court refers to the notation to the orders of 12 February 2020 and, in particular, the material which was tendered in evidence from Super Fund 1, an industry superannuation fund, of which the Respondent is a member. Tendered into evidence on 17 March 2020 was correspondence from Super Fund 1 to Robertson Legal & Conveyancing Lawyers, the solicitors for the Applicant, and by way of reply to the Applicant’s solicitor’s correspondence to Super Fund 1 of 13 February 2020. Correspondence from Super Fund 1 of 22 February 2020 confirmed that the Super Fund 1 trustee had been afforded procedural fairness and would await the orders of the Court.
By telephone communication made on 17 March 2020 from the solicitors for the Applicant to Super Fund 1, Super Fund 1 confirmed a decline in the superannuation entitlements of the Respondent from $101,240.31 as at 20 January 2020 to $92,591.77 as at 17 March 2020. Likewise, the superannuation entitlements of the Applicant which were, as at 20 January 2019, in the sum of $41,890.04 with Super Fund 2, had reduced in quantum such that the amount standing to the Applicant’s benefit in that superannuation fund was in the sum of $41,194.71.
In these undefended proceedings, the Applicant relied upon the following documents:-
a)a Further Amended Initiating Application filed 19 February 2020;
b)her affidavit of evidence‑in‑chief sworn 30 January 2020;
c)a Financial Statement sworn by the Applicant on 12 November 2018;
d)an affidavit of Mr Ian Robertson, solicitor for the Applicant, sworn 30 January 2020;
e)an affidavit of Ms Sheridan Thomson, practice manager of the firm of solicitors for the Applicant, sworn 24 February 2020; and
f)an Outline of Case document filed 19 February 2020.
The affidavit of Ms Sheridan Thomson went to compliance by the Applicant with orders made by the Court on 12 February 2020, in particular order one. Ms Thomson’s affidavit provided evidence that the Respondent had been duly served with the Applicant’s Further Amended Initiating Application filed 19 February 2020, the Applicant’s Case Outline filed 19 February 2020, and the Court orders dated 12 February 2020. Service was effected in the manner provided for by earlier Court order, being by way of email to three separate email accounts of the Respondent.
The affidavit of Mr Robertson referred to earlier orders made by the Court, being those made by Her Honour Justice Bennett on 1 April 2019 and, in particular, order seven therein which provided:-
That the wife’s costs of and incidental to this application be and are hereby reserved to the learned trial judge.
Thereafter, a further costs reserve order was made in respect of the Applicant’s need to issue further proceedings returnable in June 2019. Order two of the orders made 21 June 2019 provided as follows:-
Order 2 in the Orders made on 1 April 2019 be amended to read to the extent that the Respondent [Mr Fortune] is required to do all acts and things necessary to execute any documents in relation to the sale of real property situate at an known as [B Street, Suburb] C in the State of Victoria, being more particularity described in Certificate of Title Volume … Folio … (“the property”), then pursuant to S 106A of the Family Law Act 1975 (Cth) these acts and things can be done by the Applicant’s Legal Practitioner Ian Robertson of …, Victoria.
(Emphasis omitted)
Order four of the orders made that day provided as follows:-
The applicant’s costs of and incidental to this application be and are hereby reserved to the learned trial judge.
Mr Robertson sought a payment of costs in the sum of $4,400 inclusive of GST in respect of his professional fees which included the drawing of an Application in a Case, the drawing and settling of affidavits, the appearance at Court on the hearing of 1 April 2019 and all other incidental matters in respect of that application.
Section 106A of the Family Law Act 1975 (Cth) (‘the Act’), as referred to in the orders of 21 June 2019, became operative as a result of the Respondent’s non‑compliance with those orders. An urgent sale of the parties’ real property situate at B Street, Suburb C in the State of Victoria became necessary. The Applicant had an offer to purchase the property for the sum of $650,000, with that offer being an entirely arms‑length transaction. At the time, the property was producing no income for the parties; was subject to a mortgage in respect of which interest payments were being incurred in the sum of approximately $2,200 a month; and neither the Applicant nor the Respondent had the necessary funds to meet such mortgage repayments. The bank had issued a notice to vacate to the parties and the parties were incurring penalty rates in respect of their mortgage default.
The work done by Mr Robertson in respect of the Applicant’s need to be able to sell the property of the parties in the complete absence of co-operation from the Respondent resulted in reasonable expenses being incurred for the work done. Mr Robertson was mindful of the costs incurred by the Applicant and to that end appeared himself on each occasion that there was a Court attendance. He did so, and did so again in the undefended hearing, in an effort to conserve the Applicant’s expenditure on legal costs. In the exercise of its discretion the Court determines that the Respondent should pay those reserved costs of 1 April 2019 and in the quantum sought by Mr Robertson. The Court notes that Mr Robertson did not otherwise claim costs for the work done in respect of the 21 June 2019 hearing and of course could have done so.
Background
The Applicant was born on … 1983. She is now aged 37 years. The Respondent was born on … 1983. He shall soon be also 37 years of age. The parties commenced their relationship in approximately November 2004, and they commenced to cohabitate on or about 1 February 2005. Their cohabitation continued until the parties separated on or about 20 May 2018. The period of their cohabitation was thus approximately a little over 13 years.
During the course of the parties’ relationship, two children were born. Those children are:-
a)X, born on … 2009. X is now aged 10 years; and
b)Y, born on … 2013. Y is now aged six years and in three months shall become seven years of age.
Since the parties’ separation on 20 May 2018, the children have lived with the Applicant. The Respondent, for the most part, has lived and worked in Country AA and/or Country BB and/or New Zealand. Since separation, the Respondent has married.
The Respondent last saw the two children of the de facto relationship at around the time of separation. Since that time, he has chosen to have very limited contact with his children, being by way of Skype, text message or telephone call, which has been, for the most part, intermittent. The Applicant has encouraged him to communicate with the children and indeed the parties agreed on an arrangement where he would call the children once each week in the latter part of 2019. The Respondent, however, failed to uphold that agreement and the children were left on more than one occasion awaiting a call from their father which did not eventuate. This was very distressing to the children and distressing to the Applicant, who has had to deal with their feelings of loss, dismay and anger in the Respondent’s cessation of his relationship with them. The last time the children heard from their father was on 12 November 2019. They have had no communication with him or from him from that time until the present time.
The Applicant was required to commence these proceedings in December 2018 to deal with pressing financial issues that had been left to her to deal with, which included creditors contacting her for payment. The Applicant also had to deal with the parties’ default in their mortgage repayments to the Commonwealth Bank of Australia.
Contribution
At the commencement of the parties’ cohabitation, neither of the parties had assets of any particular significance. Their contributions were equal.
Following the birth of the parties’ child X, and on 14 June 2012, the parties became the joint registered proprietors of real property known as and situate at B Street Suburb C in the State of Victoria (‘the Suburb C property’). This property is a vacant bush block of about 99 acres. It is connected to electricity. It has no town water, but rather tank water, and has a small converted tin shed/caravan situate on it in which the parties could sleep, cook and wash. The land, as well as the flora and fauna on the land, was burnt out in the Black Saturday bushfires on 7 February 2009.
Throughout the parties’ period of cohabitation and their de facto relationship, the Respondent was the primary income earner and the Applicant was engaged in home duties and the primary care of the parties’ children. Additionally, she ran a small hobby farm for a very small income.
During the course of cohabitation and the relationship, the Respondent had a relatively high income, being approximately $130,000 gross per annum, whilst the Applicant’s income was in the vicinity of $20,000 to $30,000 gross per annum.
At the time of the parties’ purchase of the Suburb C property, they obtained a mortgage secured over the property with the Commonwealth Bank of Australia. That mortgage, at the time of the parties’ separation, was in the sum of approximately $339,941.
The minimum monthly mortgage repayments required to be paid by the parties, by the terms of their mortgage, was $2,132.
At the time of purchase of the Suburb C property, the parties were required to borrow additional funds, as they had a shortfall in respect of their purchase of the Suburb C property which was required to be satisfied at settlement. That shortfall was in the sum of approximately $40,000 and it was obtained by a further home loan with the Commonwealth Bank of Australia with loan number 4104 in the name of the Applicant and Respondent, with such loan being secured over the investment property of the Applicant’s mother located at CC Street, Town DD in the State of Victoria. As at separation, that loan remained outstanding in the sum of $37,687.14.
Additionally, the parties had obtained a further mortgage amount through the Commonwealth Bank of Australia, being a mortgage with EE Mortgage Insurance. This mortgage was not secured over the Suburb C property and was in the sum of approximately $94,509.43 as at 2 January 2019. At that time, it was $5,000 in arrears. This unpaid and outstanding mortgage existed following the sale of an investment property which the parties had purchased and then sold in or about December 2015. That investment property was situate at FF Street, Suburb GG in the State of Victoria. The property was sold by the parties for less than the mortgage outstanding and the Respondent had agreed with the mortgage provider, and the Applicant, that he would meet the monthly repayments ongoing in respect of that outstanding mortgage, which no longer had any security for repayment.
The loan referred to in the preceding paragraph is hereafter referred to in these reasons as being a loan owing to L Finance in the sum of approximately $47,000. That sum had actually peaked in the sum of $97,123.33 following separation but the Applicant was able to negotiate with L Finance in light of the subsequent sale of the Suburb C property, wherein L Finance and the Applicant agreed that L Finance would be paid out a lesser sum and a sum being approximately $47,000. It may be, in submissions from the Applicant on the hearing of this matter on an undefended basis, that the Applicant could further reduce the sum payable to L Finance, but at the present time the agreed amount outstanding is $47,000, and that is an amount for which the Applicant and Respondent will be liable at its highest level.
The parties commenced to have difficulty in meeting their mortgage repayments in respect of their occupation of the Suburb C property in mid-2016. The Commonwealth Bank of Australia obtained a default judgment in the County Court of Victoria on 9 November 2016 in the amount of $394,263.73 together with a payment of costs of $3,412. The Commonwealth Bank of Australia also obtained a warrant of possession for the Suburb C property on 9 November 2016. However, the Applicant and Respondent were able to pay a part of the monies then owing to the Commonwealth Bank of Australia, by application of funds received by them from the 7 February 2009 Black Saturday bushfires payment to them. The Commonwealth Bank of Australia was prepared to allow a mortgage debt to remain and the parties to remain in occupation of their home.
In or about June 2018, the parties again fell into arrears in their mortgage repayments to the Commonwealth Bank of Australia and, as a consequence, they again incurred various enforcement costs in a total sum of approximately $800.
The Commonwealth Bank of Australia then issued an eviction notice which was placed on the gate of the Suburb C property in late May 2018, notifying that the parties were required to vacate the property by 8 June 2018 as a result of their non-payment of the mortgage. The Applicant was unaware that the Respondent had failed to meet the mortgage repayments, and thus unaware that a large sum had accrued in respect of mortgage arrears. The Applicant was as a consequence assisted by funds lent to the parties by her mother, Ms V, who on 6 June 2018 deposited the sum of $17,000 into the parties’ home loan account and that sum, together with a payment made by the Respondent of $2,000, enabled the Applicant and the children to reside in the property for a short time longer.
On 14 August 2018, it became necessary for the Applicant’s brother, Mr W, to lend to the Applicant an amount of $2,500 to meet the monthly mortgage commitment to the Commonwealth Bank of Australia in respect of her occupation of the Suburb C property. Further funds were advanced by him a week later to meet further monthly mortgage payments due to the Commonwealth Bank of Australia, that amount also being in the sum of $2,500, making the total borrowings from the Applicant’s brother by the Applicant an amount of $5,000 toward repayment of the parties’ mortgage obligations. On 2 November 2018, the Applicant’s mother lent the Applicant a further sum, this time in the amount of $2,360, to meet the monthly mortgage payment due in respect of her occupation of the Suburb C property.
Throughout the July and August period, the Respondent made no contribution to the mortgage for which he was jointly and severally liable, and secured by the property of which he was a joint proprietor. In response to the Applicant seeking assessed child support payments from him for the support of the parties’ children, the Respondent took action which was succinctly described by him in email sent to the Applicant on 24 August 2018 as follows “You do realise that, by calling child support I will not be paying any bills or anything mortgage phone bill nothing.”[1]
[1] Affidavit of Ms Kellogg sworn 12 March 2019, [22].
In November 2018, the Respondent withdrew three separate amounts from the Commonwealth Bank of Australia Complete Home Loans, as those loans went slightly into surplus. The monies that he withdrew totalled $1,300. This was at a time when he was not making any contribution to the mortgage repayments on the property, nor to the support of the children and nor to the support of the Applicant. The Applicant and children were, by that time, being supported by the Applicant’s mother and brother.
On 2 January 2019, the Applicant received an SMS message from the Respondent’s mobile telephone with words to the effect, “you can go and sell your body to get the money and pay the mortgages.”[2]
[2] Affidavit of Ms Kellogg sworn 12 March 2019, [23].
On 28 February 2019, the local rates were due for payment on the Suburb C property in a sum of $5,991.90. The Applicant had no capacity to meet that payment.
It had become apparent to the Applicant in August 2018 that the parties would be required to sell the Suburb C property and to do so quickly – the Commonwealth Bank of Australia would otherwise take action to enforce a mortgagee sale. The Applicant attempted to discuss these matters with the Respondent, but to no avail. In the months that followed, the Applicant received an offer from an at-arm’s-length purchaser, a Mr HH, to purchase the Suburb C property for $650,000. At that time, the Applicant was in receipt of a total income of approximately $500 gross per week, which included family benefit payments. The Respondent’s Child Support Agency assessed amount of $382.17 per month payments to the Applicant had ceased, as the Respondent’s declared income was below $40,000. The Applicant’s financial position was critical and the receipt of an offer to purchase the property at the sum stipulated was of great benefit to the parties. Despite this, the Applicant could not get the Respondent’s co-operation in achieving a sale and was required to bring an application to the Court to have sole conduct of the sale to enable the property to be sold. At that time, the Respondent was working in Country AA, to the best of the Applicant’s knowledge, and his income was not being deposited into an Australian bank account. He was, nevertheless, in receipt of income of approximately $130,000 together with other benefits, and that income was not subject to Australian taxation.
The Applicant was placed in a very difficult position by the Respondent. The Applicant was able to obtain orders in the Court which provided for her to proceed with the sale of the Suburb C property to produce some equity for the benefit of the parties and their children.
Settlement of the sale of the Suburb C property occurred on 12 August 2019. The net sale proceeds were placed on trust for the parties and held by the Applicant’s solicitors in their trust account in the name of the parties. The net sale proceeds were in the sum of $201,177.93
Assets and liabilities of the parties
Assets
The assets of the parties are as follows:-
Monies of the parties in the Robertson Legal & Conveyancing Lawyers trust account
$191,177.93
A yacht in the Respondent’s name
E$10,000
Z Bank monies for the benefit of the Respondent
$1,411.85
Tools, plant and equipment, including machinery in the ownership and possession of the Respondent
E$100,000
Removable chicken shed
E$8,000
Part property settlement already advanced to the Applicant
$10,000
Total assets E$320,589.78
Additional matters in respect of the assets
The parties’ yacht was purchased by the Respondent on or about 20 January 2018 for an amount of $36,000. The Applicant does not know the current whereabouts of the yacht and the Respondent has made no discovery with respect to same. The Respondent claimed to the Applicant that he had sold the yacht and was to produce a sale docket and/or receipt. He failed to do so.
The removable chicken shed was purchased by the parties in 2017 for the sum of approximately $19,000. It had been in the Applicant’s possession but she recently left it in the custody and control of a repairer due to repairs being required to be effected to it. Those repairs have an estimated cost of some $5,000 to $6,000, but currently it would appear that the repairer has disposed of the chicken shed without the knowledge or consent of the Applicant.
The estimate as to the Respondent’s tools, plant and equipment, including machinery, is derived from exhibit ‘…K63’ to the affidavit of the Applicant sworn 30 January 2020. That exhibit is a schedule of cover from Mr JJ in respect of items of machinery insured by Fortune Proprietary Limited as trustee for the Fortune Trust, all controlled by the Respondent. The items numbered three and seven no longer exist in the possession and/or ownership of the Respondent, but the balance of items set out as covered in that schedule total an amount of $130,200. Whilst the Court would see that insurance cover as not necessarily reflecting the market value of the items of machinery listed, that is the best evidence the Court has before it in respect of attempting to place a value on these items, which are retained at the Suburb C property at the election of the Respondent and as agreed to by the purchaser of that property. The Respondent did not at any time place any evidence before the Court as to the value of these items, nor indeed as to his income, asset and liability position.
Liabilities
The liabilities of the parties are as follows:-
L Finance
As described above, this is a residual debt of the parties following the sale of an investment property the parties purchased and subsequently sold due to not being able to meet the investment’s high expenses. Although the amount outstanding to L Finance was $97,123.33, on 9 October 2019, Ms KK of L Finance emailed the Applicant to advise that the company would accept a final settlement sum of $47,254.71.
approximately $47,000
M Services (N Town Kindergarten)
$1,180.00
O Day Care (P Lawyers)
Note: was $915.18 and is now $638.15 as a result of repayments made by the Applicant.
$638.15
Q Company (R Group)
$4,063.28
S Company (T Lawyers)
Note: was $7,345.64 and is now $4,360.64 as a result of repayments made by the Applicant
$4,360.64
U Company
Note: was $1,346.51, is now $481.35 as a result of repayments made by the Applicant
$481.35
Australian Taxation Office Applicant’s debt
$3,734.75
Loan from Ms V
$17,000.00
Loan from Mr W
$5,000.00
Total liabilities $83,458.17
It is noted that following separation, the Applicant reduced some of the debt that was an outstanding liability of both parties. As indicated above, the Applicant was able to repay a total of $4,127.19. This was a direct financial contribution made by her.
Superannuation
Super Fund 1 of the Respondent as at 17 March 2020
$92,591.77
Super Fund 2 of the Applicant as at 17 March 2020
$41,194.71
Section 90SF(3) of the Act matters
The Respondent’s earning capacity and income are significantly greater than that of the Applicant. The parties’ children remain relatively young children who will need to complete primary school and proceed through secondary school. The child support arrears, currently of approximately $37,000, may or may not be able to be ultimately paid to the Applicant for the benefit of the children. In part, that may well depend on which country the Respondent is working in. Currently, the Applicant believes that the Respondent is in New Zealand, where attempts can be made to enforce the payment of child support arrears. During the parties’ cohabitation and de facto relationship, the Respondent worked in construction. His annual income was between $100,000 and $150,000 per annum. On 30 April 2018, the Respondent obtained employment with LL Proprietary Limited as an engineer working a rotating roster, six weeks on and one week off. He was based in Country BB. His base annual remuneration was $120,000 plus superannuation at 9.5 per cent of $11,400. His income was exempt from income tax in Australia.
When the Respondent attended in Court on 18 September 2019, the Respondent thereafter remained in Australia for approximately 17 days before travelling to New Zealand. During this time, he attended the Suburb C property and remained at that property to complete the process of relocating various plant and equipment that belonged to Fortune Proprietary Limited, being a company of which he was a sole director and shareholder and which was deregistered on 5 August 2018, to that property. Some of the plant, equipment and machinery that remains at the Suburb C property is:-
a)A truck;
b)a flatbed truck;
c)an excavator, 3.7 tonne;
d)two Drills;
e)a boring tool;
f)GPS Tracking System;
g)generators;
h)water pumps;
i)various tools;
j)plant trailer with ramps to cart excavator/directional drills;
k)fuel tank trailer, 1000 litres; and
l)an APS air compressor.
The monies held in trust from the sale of the Suburb C property, after payment out of the liabilities as described above, amount to $107,719.76. The Court made a further interim property distribution to the Applicant in the sum of $50,000 on 17 March 2020. This sum was additional to the partial distribution received by the Applicant by orders made 1 April 2019, which was in the sum of $10,000. The Applicant seeks to retain the totality of the proceeds of sale now remaining together with an adjustment to her of 80 per cent of the monies held by the Respondent in his superannuation fund. Otherwise, the Applicant seeks to retain her own superannuation entitlements and those few possessions that she has. This would leave the Respondent retaining the yacht and/or its sale proceeds; 20 per cent of his superannuation entitlements; the totality of his tools, plant and equipment currently stored at the Suburb C property; and would provide a division of the parties’ net assets, excluding superannuation, in the sum of $237,131.61 in a percentage adjustment of approximately 74 per cent to the Applicant.
At the commencement of the parties’ relationship their contributions were equal. During the course of the parties’ de facto relationship and cohabitation, for the most part, their contributions were equal, but differing contributions. At the end of that relationship, the Respondent ceased to apply his income to the parties’ expenses causing the Applicant to be left in dire financial circumstances without assistance from the Respondent and having to seek immediate financial assistance from her mother and brother.
Subsequently, the Applicant became without financial assistance from the Respondent in the provision of financial support for the children. The Respondent has now also withdrawn from the provision of any physical care of the children, and the provision of emotional support for the children.
The Respondent’s earning capacity is likely to remain considerable, by comparison with that of the Applicant. Given the Respondent’s failure to pay child support as assessed since separation, save for perhaps a very short period, the Applicant faces the very real prospect that she will not at any time receive financial support for the children from their father.
The children live with their mother and do not spend any time with their father. This situation is likely to continue. The Respondent will retain his tools, plant, equipment and machinery which are of value to him and can be used by him to earn income.
The Applicant has the full-time care of the children and this considerably restricts her capacity to work outside normal school hours. The s 90SF(3) of the Act factors heavily favour the Applicant and in particular, given the small nature of the parties’ net asset pool.
The Court is satisfied that the orders proposed by the Applicant and that have been made by the Court are just and equitable in the circumstances of this case.
I certify that the preceding fifty-six (56) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hartnett delivered on 25 March 2020.
Associate:
Date: 25 March 2020
Key Legal Topics
Areas of Law
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Family Law
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