Kemp & Wilkinson
[2015] FCCA 1621
•17 June 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| KEMP & WILKINSON | [2015] FCCA 1621 |
| Catchwords: FAMILY LAW – Children – where applicant seeks referral to child dispute conference – where parenting proceedings finalised by consent orders – no current parenting proceedings. COSTS – Where applicant seeks discharge of previous costs order – no order sought in Application – where no appeal lodged – where no application made under Rule 16.05. |
| Legislation: Federal Circuit Court Rules 2001, r.16.05 |
| Cases cited: Hickey & Hickey [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143 Stanford v Stanford [2012] HCA 52; (2012) 47 Fam LR 481; FLC 93-518 |
| Applicant: | MR KEMP |
| Respondent: | MS WILKINSON |
| File Number: | SYC 7637 of 2012 |
| Judgment of: | Judge Scarlett |
| Hearing date: | 21 October 2014 |
| Date of Last Submission: | 21 October 2014 |
| Delivered at: | Sydney |
| Delivered on: | 17 June 2015 |
REPRESENTATION
| Applicant: | In person |
| Counsel for the Respondent: | Mr Fermanis (direct brief) |
ORDERS
Within three (3) months from the date of these Orders the Applicant husband must pay to the Respondent the sum of $45,352.42 by way of settlement of property.
Except as otherwise provided in these Orders:
(a)Each party will be solely entitled to the exclusion of the other to all other property including real property and chattels of whatsoever nature and kind in the possession of such party as at the date of these Orders and that for this purpose bank accounts are deemed to be in the possession of the party whose name appears on the bank’s record thereof, insurance policies are deemed to be in the possession of the owner of the policy, superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlements; and
(b)Each party is to be solely liable for and indemnify the other party against any debts or liabilities in their respective names.
All other Applications are dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Kemp & Wilkinson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 7637 of 2012
| MR KEMP |
Applicant
And
| MS WILKINSON |
Respondent
REASONS FOR JUDGMENT
Application
This is an Application for property settlement by the husband. In his Amended Application, filed on 16 July 2013, the Applicant seeks orders that:
17. Notwithstanding anything elsewhere contained in these orders, the father and mother shall each respectively retain all interest and entitlement to:
17.1 All personal property now in his/her respective ownership, possession or control;
17.2 All shares, debentures, units in unit trusts, banks, building society or credit union accounts standing in his/her sole name respectively;
17.3 All interests in life insurance policies and superannuation funds standing in his/her sole name respectively;
17.4 All interests in any business to which either party has an interest in;
17.5 All other property.
18. Except as specifically provided for by these orders to the contrary, the father hereby indemnifies the mother from and in respect of all actions, claims, suits and demands as may be made against the mother in relation to all liabilities in the name of the father.
19. Except as specifically provided for by these orders to the contrary, the mother hereby indemnifies the father from and in respect of all actions, claims, suits and demands as may be made against the father in relation to all liabilities in the name of the mother.
20 . Except as specifically provided for by any order comprised in these orders to the contrary, each of the father and the mother release the other from all debts owing from one to the other.
21. Both parties do all acts and things and execute all documents, authorities and writings as are necessary to give effect to all or any of these orders.
22. In the event that either party refuses or neglects to execute any deed, document on instrument necessary to give effect to these orders, the Registrar of the Court be appointed pursuant to Section 106A of the Family Law Act 1975(Cth)to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of affidavit.
23. The mother pay the father’s costs of and incidental to this Amended Initiating Application.
The Respondent filed a Response to the Applicant’s original Application that was filed on 19 December 2012 but did not file a Response to the Amended Application. In her Response the Respondent sought the following orders:
16. That the net assets of the parties be divided on the basis that the Respondent receives 60% of the net value of the assets and the Applicant receives 40% of the net value of the assets.
17. That leave be granted to the Respondent to amend her orders sought in this Application 21 days after the Applicant has provided full disclosure of his financial circumstances.
18. That the applicant pay the Respondent’s costs in this proceedings.
Background
The Applicant husband was born in (country omitted) on (omitted) 1966.
The Respondent wife was born in (country omitted) on (omitted) 1983.
The parties met on the internet in (omitted) 2009 but did not meet face to face until (omitted) 2010.
The wife arrived in Australia on (omitted) 2011 and they commenced living together. They were married on (omitted) 2011.
In May of that year the wife discovered she was pregnant and on (omitted) 2012 the parties’ only child, a son named X, was born.
The parties separated on 15 October 2012.
On 23 October 2012 the husband transferred the sum of $30,000.00 out of the parties’ joint bank account held at (omitted) Bank to an overseas destination.
In December 2012 the husband sold his property at Property Q for $280,000.00. He received the sum of $124,185.85 by way of net proceeds of the sale.
On 19 December 2012 the husband commenced proceedings in this Court seeking parenting and property orders.
On 11 January 2013 the wife applied to the Child Support Agency for an assessment of child support.
The parties attended a Conciliation Conference before a Registrar on 16 July 2013. The property proceedings did not resolve at the Conference.
On 29 July 2013 the parties entered into final Consent Orders in relation to parenting. Those Orders provide that (in summary):
a)the child X born (omitted) 2012 is to live with the wife;
b)the child was to spend time with the father for a graduated program up until the age of three years, thereafter increasing until the child attains the age of six years, and increasing after the child’s sixth birthday;
c)the child would also spend time with the father during school holidays and on special occasions;
d)the child would be able to obtain a passport and travel overseas with either parent.
The parties were due to attend Court on 29 April 2014. The Applicant did not attend Court and the Respondent’s then Counsel, Mr Lott, sought and obtained an order for costs of the day.
The property Application was heard by the Court on 21 October 2014. The wife gave oral evidence and was cross-examined by the husband.
Evidence and submissions
The husband relied on his trial affidavit affirmed on 17 September 2014. He also prepared a written submission in which he sought orders that:
a)the parties should respectively retain all interest and entitlement to:
i)all personal property now in his or her respective ownership, possession or control;
ii)all interests in superannuation funds in his or her sole name respectively; and
iii)all other property.
b)the Court should revoke the order for costs made against him on 29 April 2014; and
c)an order should be made for “a referral be done to child dispute custody (child psychology) to investigate why the child (X) is so anxious whenever he is returned to the mother”.
The husband neither appealed against the costs order made on 29 April 2014 nor applied under rule 16.05 to have the order set aside. Orders cannot be made purely on the basis of a written submission.
Similarly, there are no current parenting proceedings on foot. The parenting issues between the parties were finalised by Consent Orders made on 29 July 2013. Consequently, there is no basis to make an order referring the parties to a Child Dispute Conference or to a child psychologist.
The wife relied on her affidavits of:
a)28 March 2013;
b)1 April 2014; and
c)3 October 2014.
The wife gave oral evidence and was cross-examined by the husband.
The wife was represented by Mr Fermanis of Counsel on a direct brief. He submitted that there was no real or significant challenge to his client’s evidence and so her evidence should be accepted. Further, he submitted that it would be just and equitable to make orders for the settlement of the parties’ property, as the wife is the primary carer of the parties’ child. He submitted that an order should be made that the husband should pay to the wife an amount of $45,474.25 or, in the alternative, the court should make a superannuation splitting order against the husband’s interest in (omitted) Superannuation Fund providing for a base amount of $45,474.25.
The proper approach to determination of a property application
The way a Court approaches a property application under section 79 of the Family Law Act 1975 (Cth) is, first of all, to follow the principles set out by the High Court of Australia in Stanford v Stanford[1]. First, the court must consider the requirements in subsection 79(2) of the Act, which prescribes:
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
[1] [2012] HCA 52; (2012) 47 Fam LR 481; FLC 93-518
The High Court held in Stanford at [37] that the court must first identify the existing legal and equitable interests of the parties in the property.
Second, although s.79 confers a broad power on a court to make a property settlement order, “it is not a power that is to be exercised according to an unguided judicial discretion” (at [38]).
The third principle, and perhaps the most important, is:
…whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property, which is fixed by reference to the various matters (including financial contributions) set out in s.79(4)[2].
[2] [2012] HCA 52 at [40]
Thus, the decision in Stanford means that the Court must consider the requirements of s.79(2) before embarking on the four step process set out by the Full Court of the Family Court of Australia in Hickey & Hickey[3].
[3] [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143
In Hickey, the Full Court set out a process of four inter-related steps that must be taken by a court when determining a property application:
Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss. 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss. 79(4)(d),(e), (f) and (g)(“the other factors”) including…the matters referred to in s.75(2) so far as they are relevant…Fourthly, the Court should…resolve what order is just and equitable in all the circumstances of the case.[4]
[4] [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143 at [39] per Nicholson CJ, Ellis & O’Ryan JJ
It is neither contradictory nor redundant to consider again whether a proposed order is just and equitable under s.79(2), because the Court is considering the matter after having undertaken the three previous steps referred to in the Hickey decision.
Just and equitable
The parties have been separated since 15 October 2012. It is evident that the marriage has irretrievably broken down. It is clearly in the best interests of both parties to resolve the issues between them so that they may both move on with their lives.
I am satisfied that it is just and equitable in all the circumstances to make orders for the settlement of the parties’ property.
The property and liabilities of the parties
The husband in his affidavit claimed that the wife “has been successful in concealing her offshore accounts by not making a full disclosure despite many requests from me for her to provide those accounts”.[5]
[5] Affidavit of Mr Kemp 17.9.2014 at [31]
The husband set out a balance sheet claiming:
32. The financial pool is as follows:
Ms Wilkinson's Centrelink account[6] $2262
[6] The number of the account is not published.
Ms Wilkinson’s jewellery… $7110
Ms Wilkinson's (omitted) bank account[7] $6139
Ms Wilkinson's Superannuation fund $777
Ms Wilkinson's (omitted) Ford sedan… $E8000
Market value of (omitted) Company $Unknown
Ms Wilkinson's (omitted) Account(s) $Unknown
Ms Wilkinson’s ebay account(s) $Unknown
Ms Wilkinson’s other offshore account(s) $Unknown
Ms Wilkinson’s household content $1,000
Mr Kemp's Proceeds of Property Q unit sale $112185
Mr Kemp's Superannuation $52,462
[7] Again, the number of the account is not published
Mr Kemp's Household content $500
Mr Kemp's (omitted) bank account[8] $1353[9]
[8] The number of the account is not published.
[9] Affidavit of Mr Kemp 17.9.2014 at [32]
It can be seen that the Applicant considers that the total value of the assets whose values can be ascertained amounts to $191,788.00.
The husband’s figures cannot be accepted in their entirety. He holds fast to his view that the wife has “a huge source of income kept overseas”[10] but his evidence is mainly speculative and unconvincing. He also claims that the wife “has meticulously concealed the fact that she owns a motor vehicle…”[11] but provides no evidence to support that assertion. The estimate of $8,000.00 as the value of this claimed motor car is unsupported by evidence. In any event, the wife has produced evidence that she disposed of the car.
[10] Applicant’s Written Submission
[11] Ibid
Mr Fermanis of Counsel tendered the balance sheet from the Conciliation Conference, which I find to be a more reliable document, although not entirely accurate. I note that the wife’s retirement funds in (country omitted) in the sum of $571.00 were counted twice in the document.
Non superannuation asset pool
I find the parties’ non superannuation assets to be:
a)Husband's Nissan (omitted) motor vehicle $13,600.00
b)Husband’s household contents $2,000.00
c)Husband's (omitted) Bank[12] $1392.01
[12] Account number not published
d)Husband's (omitted) Bank[13] $ 0.95
[13] Bank account number not published
e)Wife’s Centrelink Basics Card account $2,262.45
f)X (wife as trustee) (omitted) bank account $1,975.88
g)Joint (omitted) Bank account[14] $0
h)Wife’s jewellery $980.00
Wife’s household contents $600.00
Total$22,811.29
[14] Bank account number not published
Addbacks
The following amounts are to be added back, noting that the husband transferred various amounts out of the (omitted) Bank accounts only five days after the parties separated totalling $170,837.50. The wife also claims that the husband has bank accounts and superannuation in (country omitted) of an unknown value.
I find the parties’ non superannuation assets to be $193,648.79
Liabilities
I find the parties’ liabilities to be:
a)Husband’s (omitted) credit card $102.08
b)Husband's (omitted) credit card $227.60
c)Wife’s (omitted) credit card $302.17
Total $631.85
I find the parties’ total liabilities to be $631.85.
By deducting the total liabilities of $631.85 from the total of the non-superannuation asset pool of $193.648.79 I arrive at a total of $193,016.94.
I find the net total of the non-superannuation asset pool to be $193,016.94.
Superannuation
I find the parties’ superannuation assets to be:
a)Husband's (omitted) Super $65,311.47
b)Husband's (country omitted) superannuation $UNKNOWN
c)Wife’s retirement funds in (country omitted) $571.00
Total superannuation $65,882.47
By adding the total of the parties’ superannuation entitlements, namely $65,882.47, to the total of the non-superannuation asset pool, being $193,016.94, I arrive at a total of $258,899.41.
Accordingly, I find the total net asset pool to be $258,899.41.
The parties’ contributions
Whilst I consider that the wife’s evidence should be regarded as reliable, it appears clear that the husband’s contributions during the parties’ relatively short period of cohabitation outweighed those of the wife. In particular, he brought into the marriage the investment home unit in Property Q, which he sold. The proceeds amount to $112,185.00.
As the husband’s contributions heavily outweigh those of the wife, I am satisfied that the contributions of the husband should be regarded as 90% as against 10% by the wife.
The effect of any proposed property order upon the earning capacity of either party.
Subsection 79(4) requires at paragraph (d) that the Court consider the effect of any proposed order upon the earning capacity of either party to the marriage. In my view the proposed orders will not have any effect upon either party’s earning capacity.
Relevant matters referred to in subsection 75(2)
The Court is required by s.79(4)(e) to consider the matters referred to in subsection 75(2) so far as they are relevant.
The husband was born on (omitted) 1966. He is now 48 years of age. He appears to be in good health.
The wife is significantly younger than the husband, as she is only 31 years old. She was born on (omitted) 1983. She also appears to be in good health.
The husband is employed by the (employer omitted) as a (occupation omitted). According to his Financial Statement filed on 10 May 2013 his total average weekly income amounts to $1,372.00.
The wife’s total average weekly income, according to her Financial Statement filed on 24 April 2013, is an estimated $682.00. This includes child support paid by the husband of $166.00 per week.
The wife receives a parenting payment from Centrelink of $350.00 per week and Family Tax benefit A and B amounting to $164.00 per week.
The parties’ child X, who was born on (omitted) 2012, resides with the wife. Whilst the husband claims that the parenting arrangement is a shared care arrangement and no adjustment should be made in favour of the wife, the reality is, on reading the Consent Orders made on 29 July 2013, that the wife is the child’s primary caregiver.
The husband claims that the wife has substantial business interests and earns a significant income from doing business outside Australia, the fact is that he has failed to provide any satisfactory evidence in support of his claim. He has also made claims that the wife has “defrauded the Australian Tax Office by hiding her income in offshore accounts”[15], he has not led any evidence in support of this serious allegation.
[15] Affidavit of Mr Kemp 17.9.2014 at [29]
In my view there should be an adjustment of 10% in favour of the wife.
Just and equitable
Again, the Court must consider whether the proposed orders are just and equitable. The wife will receive 20% of the net asset pool and the husband will receive 80%, which reflects his substantially greater contribution over the parties’ short marriage. The husband will retain his superannuation intact and the proposed orders will not affect his earning capacity.
I am satisfied that the proposed orders are just and equitable.
Orders to be made
The wife will be entitled to receive 20% of the net asset pool of $258,899.41. This amounts to $51,779.88. She currently has in her possession assets totalling $6,427.46, including the amount of $1,975.88 in an account at (omitted) Bank which she holds in trust for the child. This means that she needs to receive an amount of $45,352.42, which is very slightly less than the amount submitted by her counsel, Mr Fermanis (by $121.83, to be precise).
I propose to allow the husband three months to make the payment to the wife.
Otherwise, the parties will retain the items they already hood to the exclusion of the other and will be responsible for payment of their own relatively small credit card debts.
I certify that the preceding sixty-three (63) paragraphs are a true copy of the reasons for judgment of Judge Scarlett
Associate:
Date: 17 June 2015
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