KIRBY & HODGSON

FEDERAL CIRCUIT COURT OF AUSTRALIA

KIRBY & HODGSON

[2015] FCCA 372

Catchwords:
FAMILY LAW − Whether wife should relocate children’s residence back to New South Wales ̶ whether wife should have sole parental responsibility − relevance of party’s ability to communicate ̶ whether children should spend equal time with each parent − whether wife has an undisclosed amount of money ̶ how money spent on legal expenses should be taken into account – relevance of small property pool to s.75(2) matters.

Legislation:

Family Law Act 1975 (Cth), ss.4AB, 11F, 60B, 61DA, 60CA, 60CC, 60CC(2),

60CC(3), 61DA75(2), 65DA, 65DAA, 65DAC, 75(2), 79, 79(4)

Succession Act 2006 (NSW)

Goode & Goode [2006] FamCA 1346; (2006) FLC93-286
Stanford & Stanford [2012] HCA 52; (2012) CLR 108
Chappell & Chappell (2008) FLC 93-382
Sayer & Radcliffe and Anor [2012] FamCAFC 209

Applicant:

MS KIRBY

Respondent:

MR HODGSON

File Number:

DGC 306 of 2013

Judgment of:

Judge Phipps

Hearing dates:

7, 8, 9 & 10 April 2014 &

16 & 17 June 2014

Date of Last Submission:

17 June 2014

Delivered at:

Dandenong

Delivered on:

26 February 2015

REPRESENTATION

Counsel for the Applicant:

Mr Indovino

Solicitors for the Applicant:

Radebe & Associates

Counsel for the Respondent:

Mr Schonell

Solicitors for the Respondent:

LCI Legal

Counsel for the Independent Children’s Lawyer:

Ms Stavrakakis

Solicitors for the Independent Children’s Lawyer:

Victoria Legal Aid

ORDERS

Children

That the wife have sole parental responsibility for the children X born (omitted) 2004, Y born (omitted) 2008 and Z born (omitted) 2011.
That the children live with the wife in Victoria.
That the children spend time with the husband as follows:
(a)in Victoria as agreed between the husband and the wife;
(b)in New South Wales:
(i)for 10 days as agreed during all school term holidays;
(ii)for half of all summer school holidays as agreed and if not agreed the first half;
(c)at all reasonable times by telephone, Skype or similar electronic communication, emails, letters, correspondence and cards;
(d)otherwise as agreed between the parties.
The husband pay the cost of the children’s travel to New South Wales.
The parties and the children attend a counsellor as recommended by the Independent Children’s Lawyers for the purpose of therapeutic counselling.
That the husband is entitled to attend school functions normally attended by parents and, at his expense, to receive school reports, school photographs, circulars, notices and copies of any other documents usually sent to or available to parents.
Each party must keep the other informed of serious injuries or illnesses suffered by the children when in that party’s care.
Each party is restrained by injunction from physically disciplining the children or permitting any other person to do so.
Each party is restrained by injunction from denigrating the other party to or in the presence of the children or permitting any other person to do so.
The Independent Children’s Lawyer is authorised to send copies of the family report and memorandum of child inclusive conference to the appointed counsellor.
That the order placing the children’s names on the airport watch list remains in full force and effect.
That the order appointing the Independent Children’s Lawyer is discharged from 1 September 2015.
Property
The husband pay the wife the sum of $100,000 (the amount) on or before 27 April 2015 (the date).
That contemporaneously with the payment:
(a)the husband and the wife do all such acts and things and sign all such documents as may be required to transfer to the husband at the expense of the husband all her right title and interest in the properties situated at and known as Property M1 and Property M2 (the properties) to the husband;
(b)the husband take all steps necessary to discharge the mortgage or mortgages over the properties in the name of the husband and the wife and otherwise take all steps necessary to discharge the wife from any liability for money secured by the mortgage or mortgages and indemnify the wife for any liability under the mortgage or mortgages.
That in the event that the whole of the payment has not been made by the date then the husband and wife do all things necessary to sell the properties, or one of the properties if the net proceeds of sale are sufficient to pay the wife $100,000 (the sale). Upon the completion of the sale, the proceeds of the sale be applied:
(a)first to pay all costs, commissions and expenses of the sale;
(b)secondly to discharge the mortgage and any other encumbrances affecting the real property;
(c)thirdly so much of the payment as is then outstanding together with interest thereon at the rate of 8.5% per annum adjusted monthly from the date to the wife;
(d)fourthly the balance to the husband.
Pending completion of the sale the husband has the sole right to receipt of the rents and profits from the properties.
That each party retain the shares held in their own name.
That the wife retain her Ford Territory motor vehicle.
That the husband retain sole ownership of the company (omitted) Pty Ltd (the company).
That the husband remain responsible for and indemnify the wife against;
(a)any tax liability of the company;
(b)all credit card debts in his name or the company’s name;
(c)all other liabilities of the company.
That unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders each party be solely entitled to the exclusion of the other to all superannuation and other property (including choses-in-action) owned by or in the possession of such party as at the date of these orders.

IT IS NOTED that publication of this judgment under the pseudonym Kirby & Hodgson is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT DANDENONG

DGC 306 of 2013

MS KIRBY

Applicant

And

MR HODGSON

Respondent

REASONS FOR JUDGMENT

Introduction

The applicant wife, Ms Kirby, and the respondent husband, Mr Hodgson, have three children X born (omitted) 2004, Y born (omitted) 2008 and Z born (omitted) 2011. The children are aged ten, six and three. The wife moved with the children from Sydney, where the parties had lived since they married, to Melbourne to live with her parents in April 2012. She proposes that she remain living in Melbourne with the children and that they spend time with their father during school holidays and otherwise as may be agreed. The husband proposes that the wife and children should return to Sydney and the children spend equal time week about with each parent. The parties dispute the distribution of their property.
For children’s matters the pathway through the provisions of the children’s provisions in Part VII, of the Family Law Act 1975 (Cth) is described by the Full Court of the Family Court of Australia in Goode & Goode [2006] FamCA 1346. For property matters the decision of the High Court of Australia in Stanford v Stanford [2012] HCA 52; (2012) CLR 108 requires that I first decide whether it is just and equitable to make orders under s.79 of the Family Law Act 1975 (Cth). Both parties propose the making of property orders. The parties have separated and the basis upon which they shared their finances has come to an end. It is just and equitable to make property orders. I must then consider each parties contribution in terms of s.79(4) and then whether any adjustment should be made taking into account the matters in s.75(2).

Proposals

In final submissions the Independent Children’s Lawyer and the wife made the same proposals for children’s orders except that the wife proposed that all costs of travel for the children be paid by the husband. The proposal is that:
a)the wife have sole parental responsibility for the children and they live with her in Victoria;
b)the children spend time and communicate with the father as follows:
i)in Victoria as agreed between the husband and the wife;
ii)in Sydney for seven days as agreed during all school holidays in 2014 and for 10 days as agreed during all school term holidays in 2015 and each year thereafter;
iii)during 2014/2015 Christmas school holidays week about and during 2015/2016 school holidays in each year thereafter half of all holidays as agreed and failing agreement the first half;
iv)by telephone, Skype, email, letters, correspondence and cards and otherwise as agreed in writing between the parties.
The Independent Children’s Lawyer proposes, and the mother agrees, that the parties and the children attend upon a counsellor as recommended by the Independent Children’s Lawyer for the purpose of therapeutic counselling.
The wife’s proposal for property orders, as I followed her counsel’s final submission, is that the property be divided 80% to her and 20% to the husband, that no provision be made for adding back amounts each party has spent on legal expenses and that there be no splitting order for superannuation.
The father’s proposal is that the children return to live in Sydney and then spend equal time with each parent. The effect of the property orders he proposes is that he retains all property and be responsible for all debts. His outline of case puts the orders in terms of a declaration that the wife retain the money she has kept over many years from the parties’ assets and that otherwise orders which mean that he will be the sole owner of the parties two pieces of real estate and be responsible for the debts.
Until the commencement of the hearing, or shortly before, the wife’s position was that if the court ordered that the children return to Sydney she would not herself return to Sydney. Her position at the commencement of the hearing was that she would. She explained this was because the children are her life.
The wife’s proposal, if the children were living in Sydney, was that the children live with her and spend alternate weekends and half school holidays, or perhaps more, with the husband. The husband did not make a proposal for his spending time with the children if they lived in Melbourne.

Children’s provisions

Children’s provisions are contained in part VII of the Family Law Act 1975 (Cth). The objects of the part and principles underlying it are s.60B.
1) The objects of this Part are to ensure that the best interests of children are met by:
(a) ensuring that children have the benefit of both of their parents having a meaningful involvement in their lives, to the maximum extent consistent with the best interests of the child; and
(b) protecting children from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence; and
(c) ensuring that children receive adequate and proper parenting to help them achieve their full potential; and
(d) ensuring that parents fulfil their duties, and meet their responsibilities, concerning the care, welfare and development of their children.
(2) The principles underlying these objects are that (except when it is or would be contrary to a child's best interests):
(a) children have the right to know and be cared for by both their parents, regardless of whether their parents are married, separated, have never married or have never lived together; and
(b) children have a right to spend time on a regular basis with, and communicate on a regular basis with, both their parents and other people significant to their care, welfare and development (such as grandparents and other relatives); and
(c) parents jointly share duties and responsibilities concerning the care, welfare and development of their children; and
(d) parents should agree about the future parenting of their children; and
(e) children have a right to enjoy their culture (including the right to enjoy that culture with other people who share that culture).
Each of these objects and principles has relevance in this dispute.
Section 61DA provides that the court when making a parenting order in relation to a child must apply a presumption that it is in the best interests of the child for parents to have equal shared parental responsibility. The presumption does not apply if there are reasonable grounds to believe that a parent of the child (or a person who lives with a parent of the child) has engaged in abuse of the child or another child, a member of the parent's family or family violence, or if it is not in the children’s best interests to apply the provision.
Section 60CA provides that in deciding whether to make a particular parenting order in relation to a child, the court must regard the best interests of the child as the paramount consideration. In determining what is in the child’s best interest the court must consider the matters set out in s.60CC(2) & (3).
The provisions of Part VII and the pathway through the legislation apply to relocation cases just as they do to any other children’s case. The best interests of the children is the paramount consideration.

Children’s issues

The children’s issues include:
a)whether the parties should have equal shared parental responsibility or whether the wife should have sole parental responsibility;
b)whether the children should live in Melbourne or Sydney;
c)the degree to which there has been family violence.

Evidence on children’s issues

The pathway through the legislation includes identifying the agreed facts.
The wife was born in (country omitted) on (omitted) 1974. She migrated to Australia with her parents in 1977 and lived in Melbourne. The husband was born on (omitted) 1977 in Sydney. His family is in Sydney, and at the time the parties met and were married they consisted of his parents, both of whom are now deceased, his brother and his sister. The parties met through a friend of the wife and first met in person in Melbourne during 2001. They were married on (omitted) 2002 and commenced living together in Sydney.
All three children were born using the assisted reproduction process of intracytoplasmic sperm injection, an expensive process. Both parties are (religion omitted), the wife being (omitted) and the husband (omitted). Both parties acknowledge volatility in their relationship. In June 2004 the wife moved to Melbourne and stayed with her parents for several weeks.
Commencing in May 2006 the husband worked in Darwin for a period of approximately 5 months. The wife was pregnant with twins but miscarried during this time.
When the parties married in 2002 they lived in a home owned by the husband at Property R. In 2009 they moved to Property B which had been owned by the husband’s mother and after her death by his father. They lived there rent-free. The husband remains living there.
The husband’s mother died on (omitted) 2008 and both parties agree that this significantly affected the husband. He describes himself as becoming depressed.
The wife alleges extensive family violence, including physical violence by the husband towards her and towards X. There are two incidents where, to some extent, the parties agree.
Both parents agree that X is articulate and can be difficult. She answers back to her father. On 19 July 2011 the family was going on a family outing and X would not get into the car. The wife alleges that the husband shouted at X and tried to choke her. The husband admits that he picked X up under the arms had held her up to his face. The Department of Child Services in New South Wales became involved and its file records that the husband said that he put his hands around X’s throat but he denies choking her. The parties agreed to a safety plan with the Department.
On 28 March 2012 the parties had an argument. To some extent the parties agree what happened. The wife acknowledges that she said to the father “May God take you. I want to fucking kill him. Do I kill him and finish him”. This was said in a mixture of (language omitted) and English. She acknowledged that she called him a name in (language omitted) which was put to her as meaning “poofter”. She said it doesn’t actually mean that but she would accept that just for simplicity. The husband admits that he grabbed the wife by the back of the neck pushed her down on the bed knelt astride her and raised his hand as if to hit her. The wife’s description is similar although she describes herself as being thrown onto the bed. The husband is a large man, 125kg he says.
There is some agreement about the subject matter of the argument. The parties were arguing about finances and about the wife hitting or smacking Y. The husband says the wife hit Y because she had wet her bed. The wife says that it was the fourth night in a row that Y had wet the bed and she smacked her to discipline her, not because she had wet the bed but because she was removing her nappy and she smacked her to discipline her. The children were in the house during this incident and while they may not have seen it they heard it. The police came and applied for a family violence order against the husband which restrained him from committing family violence but did not exclude him from the house.
The wife then decided to leave with the children. She says she looked for rental accommodation but it was too expensive She says she asked the husband to leave but he would not saying that the house had belonged to his mother, which it did. Whatever happened between the parties they agree that the husband signed a document headed “Parenting Plan” dated 24 April 2012. It reads:
I Mr Hodgson of Property B agree to let my wife Ms Kirby take our 3 children interstate to Melbourne to reside for the time being.
On 28 April 2012 the wife left Sydney with the children and drove to Melbourne. She and the children have lived with her parents at their home in (omitted) since. Initially the husband came to Melbourne about every three weeks to see the children. He stayed in the (omitted) house, slept in the same bed as the wife and they had sexual relations. He saw the children at the home and took them out using the wife’s car with her consent. When the sexual relations ceased is not agreed but the wife says it was in September 2012 and the husband’s visits continued until December. In June 2012 the parties and the children went on a short holiday to (omitted) in Victoria.
The husband suggests that on 8 July 2012 the wife sent him an email suggesting that they could develop property together. The email says “Check out this man’s advertising in Victoria. Let’s buy some land and build our own townhouses.” The wife says that the words “Let’s buy some land and build our own townhouses” is part of the advertisement which she attached to her email and she was bringing the type of advertising to the husband’s attention. I accept that this is the explanation but nevertheless the email was sent.
The husband’s visits continued until December 2012. Both parents agree that X is articulate and often answers back to her father. When interviewed by Mr M, the family consultant, in September 2013 the husband said that X had been deliberately difficult and playing up over recent weeks, apparently trying to provoke him.
An incident occurred in December 2012 which resulted in the father no longer coming to stay at the wife’s parent’s house and the mother obtaining a family violence intervention order in the Magistrates Court of Victoria at Ringwood in January 2013. The father alleges that the paternal grandmother hit X on the back, something the wife does not accept. Whatever happened the parties agree that the mother then obtained the intervention order and the husband did not see the children until May 2013.
The husband says that separation took place in December 2012 while the wife maintains that it was 28 April 2012 when she left Sydney with the children. There is no need to decide when the parties’ marital relationship came to an end. As far as the children are concerned they would have seen their father’s time on weekends in Melbourne as normal family times except that they were not in Sydney. Their father stayed in the house with them, slept in the same bed as their mother, had meals with them and took them on outings.

The husband commenced these proceedings on 11 February 2013. Orders on 19 March 2013 provide for the appointment of an Independent Children’s Lawyer and for a attendance upon a family consultant under s.11F of the Family Law Act 1975 (Cth). This took place on 24 April 2014
The memorandum by the family consultant, Mr M records that X told him that prior to her parents’ separation her father hurt her all the time and once held her by the throat in a corner. X stated also said that her father picked her mother up and rotated her around above his before throwing her on to the bed. The memorandum records that X reluctantly agreed that her mother has sometimes hit and screamed at her and her siblings but this was because of the way the father treated her mother. X said she did not want to return to her old school at Sydney and did not want to live in Sydney or return to the former family home.
Despite the statements by X, Mr M observed that the children enjoyed their time with their father. Mr M describes X as laughing throughout an activity with her father. He proposed that it would not be in the children’s best interests to remove them from their current home and education on an interim basis and recommended that the children spend time with their father at least each third weekend in Victoria, to include long weekends and non-school days where appropriate.
Interim consent orders made on 2 May 2013 provide for the children to live with the wife and spend time with the father each alternate weekend from 5.00pm Friday until 5.00pm Sunday or 5.00pm Monday in the event Monday is a public holiday or non-school day. Such overnight time to involve only X and Y commencing 17 May 2013. For Z the time was each alternate Sunday commencing 19 May 2013 from 10.00am until 5.00pm until 2 August 2013 and thereafter each alternate Saturday and Sunday from 10.00am until 5.00pm Saturday and from 10.00am to 5.00pm Sunday. Provision was made for telephone, Skype or like communication four times per week.
Further interim consent orders made 28 October 2013 provide for all three children to spend time with the father every third weekend from 5.00pm Friday to 5.00pm Sunday or 5.00pm Monday in the event Monday is a public holiday or non-school day, 5.00pm 20 December to 5.00pm 24 December (in Victoria), 12noon 31 December 2013 to 12.00noon 7 January 2014 (in Victoria) and from 14 January to 12noon 21 January 2014 (in New South Wales). While the wife says that the children were a little uneasy for the first two times at Christmas and during the holidays, all agree that the week in Sydney went very well for the children.
A significant area of agreement is that the children love their father and enjoy their time with him. The wife acknowledges this despite all the allegations she makes against the husband. This is illustrated by events around Father’s Day 2013. On the weekend of 23 August 2013 the children spent time with their father. The wife alleges that when they returned Y said that she had hit Z and the father had choked her and that X said the father pushed her grabbed her by the waist and threw her on the bed, choked Y and strangled her. The mother took the children to the police. The police interviewed the children but they did not make similar statements. Two things should be noted. The children were interviewed by Mr M, the family consultant for the family report after 23 August and made no such statements to him. Then, in her evidence, the wife said she did not know whether to believe the children or not.
The wife says that she wrote in the communication book asking the father if he would be seeing the children on Father’s Day. His response made her think that he would and she told the children. The wife says X did some paintings and cards for her father for Father’s Day. Then the husband said he was not coming. The mother says that X got quite angry and started ripping up her cards and paintings. The wife says she was very disappointed and to her it showed how much X loved her father.
In other parts of her evidence the wife described the husband as a loving father and could be very good getting down on the ground and playing with the children. Mr M made the same observation and in particular noted that the children showed no fear of their father.
The wife’s original affidavit sets out a description of significant abuse, including physical abuse of her and X. Until shortly before the commencement of the hearing her position on the court documents was that any time the children spent with the husband should be supervised. Notwithstanding that she agreed to unsupervised time, that, she said being on advice. In cross examination by counsel for the Independent Children’s Lawyer she said she was afraid that the husband might react badly to typical behaviour by X.
The wife acknowledges that the children’s week with the husband in Sydney in January 2014 went well. Before this the husband stayed with her and the children at her parents’ home throughout 2012 and the parties had a sexual relationship until at least the middle of that year.
The mother relied on the evidence of Ms F, a counsellor who saw the children after they came to Melbourne. Ms F’s evidence is that X told her of her father choking her amongst other things. In 2013 Ms F recommended that there be only supervised time.
Notwithstanding all of this the mother’s proposal now is that the children should eventually spend 10 days of all school term holidays and half Christmas holidays with their father as well as whatever time can be agreed with the father in between.
There is no doubt that the parties relationship was volatile. I find it difficult to reconcile the wife’s description of the extent of family violence with the evidence, including from the wife, of the loving relationship the children have with the husband. On the other hand notes of a counsellor and a psychologist the father attended shows that he acknowledged he was having significant problems.
The husband saw Ms C of (omitted) Psychology Clinic on two occasions, 11 July 2011 and 6 August 2011. He missed two scheduled appointments in between. He reported having two episodes of panic attacks in his history. He lost his mother three years ago. He reported that for most of the time be sat at home and did nothing but smoke cigarettes and eat. He reported there is significant conflict in his marriage partly related to transition to parenthood issues.
The psychologist says that added together the husband was under enormous stress and had been for some time. The psychologist says a provisional diagnosis could be Reactive Depression and Adjustment Disorder. The psychologist notes that the husband expressed a great deal of hostility towards his wife and his eldest daughter as she reminded him of his wife and that she made him quite angry like his wife did. He also commented that he was very distressed that his wife often screamed at the children. He said that they had different experiences of and ideas about parenting which led to much conflict.
In a note to the referring doctor Ms C says she is very concerned about the level of hostility expressed by the husband towards family members and his disregard of his own responsibility in his troubles.
In 2012 the husband attended Mr B a counsellor with (omitted) Relationship Services. Mr B’s notes of 5 September 2012 says that the husband reports he has anger issues that have led to his current separation from his wife and children. Under dot points Mr B includes these:
H reports:
strong dominant personality like his wife
likes her strength was attracted to this “mental challenge” but now doesn’t like it because she is very strong and he wants to still have his way with even small things e.g. “I don’t like the way she walks”
he gets upset either has to walk away or he explodes and tells her to stop
his mother passed away four years ago and he went into a deep depression from about three years the first six months he stopped working and he sat in the backyard smoking and doing nothing
mother was his best friend and did not know what to do after she passed. He was unable to meet his responsibilities as a father or husband left wife to manage the home and the children
In his notes of 21 September 2012 Mr B says the husband reports he does take things very literally and in a “black and white” way. He wants assistance with parenting skills and communication.
These notes corroborate the wife’s description of the husband’s moods and attitude towards her. They do not corroborate the wife’s allegations of extensive physical violence but they do show that the husband acknowledges his anger and corroborate the wife’s claim that he did little with the children, something the husband in his evidence disputes. They provide an explanation for the wife wanting to move away from the husband to the supportive environment in her parent’s home and an explanation why she might wish to stay there.
While the wife maintains that her description of the extent of family violence is correct the husband denies that it is so. Probably the answer lies somewhere in between. The significant aspects of the incident in March 2012 are agreed. Both parties were extremely angry. The mother’s abuse of the husband was extreme. The husband reacted with physical violence. Probably similar incidents, perhaps not so extreme, happened before. I am satisfied on the balance of probabilities that there were events similar to the one in March 2012 but not necessarily at the same intensity.
The husband acknowledges that there was an incident when he held X under the armpits and brought her up to face level. The Department of Community Services record of discussions with the parties after this incident is that the husband says he put his hands around X’s throat but did not choke her. X’s description of it as choking is the way the child would see it. While this incident happened the mother’s description of the extent of violence by the husband towards X is difficult to reconcile with the relationship between X and her father now. I do not consider I can make a finding that there were similar incidents.
In the family report Mr M makes this assessment of the children’s relationships:
This assessment has revealed that the children have a sound relationship with both parents, although clearly the children’s major attachment is with their mother given that they have predominantly lived with her. It was evident that Z has a very close attachment with his maternal grandfather and could only be pacified by him on occasions. This is likely a factor of Z’s young age (he was a little over one year of age at separation) and the consequence of the children living in his home for the past 18 months.
Earlier in the report Mr M includes this as part of his observation of the children with the husband:
Throughout the session all three children engaged exceptionally well with their father, although X was noted to periodically move away from Mr Hodgson as if she suddenly remembered that she was not supposed to enjoy time with him. The three children engaged in physical and boisterous activity with their father, climbing on his back as he carried them around, jumping onto their father from the couch, and doing somersaults over the top of him as he lay on his back on the floor. There was a great deal of laughter and fun throughout.
To Mr M the husband alleged that the wife had deliberately and overtly denigrated him and undermined his relationship with the children. As to the wife’s claim that the husband had hit X and that X fears her father will kill her Mr M said that X did not report her father had struck her at any time previously while they were living in Sydney. Mr M says that she had no time stated a fear that her father would harm her, or exhibit any fear of the father during the observation session. The only physical punishment she spoke about was when her mother smacked her a few weeks prior to interview, adding that she still smacks them when they are naughty.
The parties slept in the same bed and had a sexual relationship until at least September 2012. Mr M says this might have been because the wife thought that the longer she could remain in Melbourne the better her chances of staying there. The wife denied this was the reason. When cross-examined by counsel for the husband she said “the father asked me to sleep with him and I obliged” she said that she was not still in a relationship with the father. When cross-examined by counsel for the Independent Children’s Lawyer she agreed with the proposition that in 2012 in Melbourne they were in a family environment, under the same roof sharing a bed, sharing family life, but it seemed completely different to the same environment in Sydney.
Later in cross examination by counsel for the Independent Children’s Lawyer about the discussion she had with the husband in December 2012 she said that even despite separation she hoped that one day the husband would change.
The wife had mixed feelings towards the husband until December 2012. The relationship then broke down completely. One of the elements in this the wife refers to is that the husband then started accusing her of taking money.
This issue is relevant to the property issue. It is relevant to the children’s issues because it concerns the wife’s credit and is an element in the mistrust between the parties.
The husband alleges that the wife has taken $739,352.23 from the husband’s (omitted) business and either has it in cash at home or has sent it to (country omitted). The wife denies that this is so. If it is correct it is relevant to her ability to care for the children.
The husband conducts a business as a (occupation omitted). The wife was largely responsible for keeping the accounts in that she paid invoices and prepared the information for the accountant to prepare Business Activity Statements, Annual Statements and Taxation Returns.
The amount of $739,352.23 is calculated this way. The husband prepared a list of payments which he considered was unaccounted for. They came to $961,776.06. An accountant, Mr W, was retained. He was given the list of payments amounting to $961,776.06 and a number of bank statements.
He prepared a report with a number of tables. The tables deal with each of the bank statements supplied to Mr W. Table 1 is a summary and the following nine are divided into two types of tables. One type is described “We were not able to verify the following transactions: (these amounts were not identified on Bank Statements supplied)”. The other type is described as “We identified these amounts as being inter bank account transfers.” The total of the nine tables comes to $222,423.83. This is subtracted from the amount of $961,776.06 to give the amount of $739,352.23 which the husband alleges the wife has taken.
Mr W tables are an accounting exercise. His report shows that from the bank statements he has been given he has identified $222,423.83. He cannot say where the rest of the money went.
Correspondence between the solicitors includes the husband’s solicitors asking for explanations of payments and the wife’s solicitors asking for documents to be supplied. The wife provided explanations for many of the amounts but these did not satisfy the husband.
The husband says he became suspicious when he found that the mother had a large number of accounts and that she had transferred some money to Melbourne in late 2010. The wife had an account in X’s name which at one stage held $125,000. The explanation for the transfers in Melbourne came from the wife. She had placed money on term deposit in the name of one of the children. The term deposit matured and since she was in Melbourne staying at her parents’ house she went to the nearby branch of the bank at (omitted) and renewed the deposit. Her explanation for where much of this money went was that it was used towards the deposit on the parties investment property in Property M.
The payments which the husband alleges are not accounted for go back to 2003. The wife made payments for the husband’s (omitted) business. There is no evidence about the number of transactions but a reasonable inference is that they numbered in the thousands. The wife says that any payment she made were for the business or for family expenses. The only way to verify this would be an examination of many, if not all, of the individual transactions and that has not been done. Given the time which has passed it may not be possible.
The best evidence that there is no hidden money is that of the husband’s income. The husband’s (omitted) business is incorporated. The husband said its gross receipts have been about $150,000 a year and he drew a wage of about $50,000 per year. Motor vehicles were owned by the companies and so that provided some additional benefit. The parties lived in a house in the name of the husband’s father. The husband did renovations paying $15,000 for materials, but otherwise the expenses for the house were normal outgoings. They did not include rental mortgage payments. The parties purchased an investment property. The husband renovated the residence on that property, subdivided land and built another residence. While this work provided capital gain it did not give income until completed.
The husband’s income provided for the family of eventually five. They did not live extravagantly but neither did they live frugally. The inference I draw from the available evidence is that the husband’s income was enough to provide for their family’s expenses but not a surplus over nine or 10 years of $700,000. On the balance of probabilities there is no basis for finding that the wife has an undisclosed fund.

Best interest considerations

The best interest considerations are in s.60CC of the Family Law Act 1975 (Cth) as follows:
The primary considerations are:
(a) the benefit to the child of having a meaningful relationship with both of the child's parents; and
(b) the need to protect the child from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence.
Note: Making these considerations the primary ones is consistent with the objects of this Part set out in paragraphs 60B(1)(a) and (b).
(2A) In applying the considerations set out in subsection (2), the court is to give greater weight to the consideration set out in paragraph (2)(b).
Additional considerations
(3) Additional considerations are:
(a) any views expressed by the child and any factors (such as the child's maturity or level of understanding) that the court thinks are relevant to the weight it should give to the child's views;
(b) the nature of the relationship of the child with:
(i) each of the child's parents; and
(ii) other persons (including any grandparent or other relative of the child);
(c) the extent to which each of the child's parents has taken, or failed to take, the opportunity:
(i) to participate in making decisions about major long-term issues in relation to the child; and
(ii) to spend time with the child; and
(iii) to communicate with the child;
(ca) the extent to which each of the child's parents has fulfilled, or failed to fulfil, the parent's obligations to maintain the child;
(d) the likely effect of any changes in the child's circumstances, including the likely effect on the child of any separation from:
(i) either of his or her parents; or
(ii) any other child, or other person (including any grandparent or other relative of the child), with whom he or she has been living;
(e) the practical difficulty and expense of a child spending time with and communicating with a parent and whether that difficulty or expense will substantially affect the child's right to maintain personal relations and direct contact with both parents on a regular basis;
(f) the capacity of:
(i) each of the child's parents; and
(ii) any other person (including any grandparent or other relative of the child);
to provide for the needs of the child, including emotional and intellectual needs;
(g) the maturity, sex, lifestyle and background (including lifestyle, culture and traditions) of the child and of either of the child's parents, and any other characteristics of the child that the court thinks are relevant;
(h) if the child is an Aboriginal child or a Torres Strait Islander child:
(i) the child's right to enjoy his or her Aboriginal or Torres Strait Islander culture (including the right to enjoy that culture with other people who share that culture); and
(ii) the likely impact any proposed parenting order under this Part will have on that right;
(i) the attitude to the child, and to the responsibilities of parenthood, demonstrated by each of the child's parents;
(j) any family violence involving the child or a member of the child's family;
(k) if a family violence order applies, or has applied, to the child or a member of the child's family--any relevant inferences that can be drawn from the order, taking into account the following:
(i) the nature of the order;
(ii) the circumstances in which the order was made;
(iii) any evidence admitted in proceedings for the order;
(iv) any findings made by the court in, or in proceedings for, the order;
(v) any other relevant matter;
(l) whether it would be preferable to make the order that would be least likely to lead to the institution of further proceedings in relation to the child;
(m) any other fact or circumstance that the court thinks is relevant.

The considerations relevant to this case are dealt with in the following paragraphs.
The first of the primary considerations is the benefit to the children of a meaningful relationship with each party. Mr M does not make a recommendation about whether the children should be returned to live in Sydney. He makes recommendations about the time the children should spend with their father depending where they are living. When asked about X having to change schools and leave the friends she had made Mr M said that she would adjust.
In terms of the children’s relationship with each parent, when the children spent a week in Sydney with their father it went well and the mother acknowledges that it went well. This was with the mother remaining in Melbourne. The mother now proposes that the children spend a substantial amount of each school holidays with their father and time in between when can be arranged. The wife is the children’s primary carer and so an arrangement where she is comfortable with where she is living and comfortable with the time the children are spending with the husband will enhance a meaningful relationship with her. The mother would not be as comfortable in Sydney. Close proximity to the husband, given the events of the past, could well affect her.
The second of the primary considerations is the need to protect the children from harm. Despite the wife’s stated fears she now agrees to the children spending substantial time with the husband. I am satisfied from Mr M’s evidence that the children show no fear of the husband, indeed the contrary. There is no need to take evidence under this consideration into account.
The first of the additional consideration is the views of the children. X told Mr M she wants to stay in Melbourne because she has friends in Melbourne and doesn’t have any friends in Sydney. Y did not express a preference about Sydney or Melbourne, Z is too young to have any views. Given Mr M’s evidence that X would adjust if she moved to Sydney and the children’s ages little weight can be placed on their views.
The next additional consideration is the relationship of the children with each parent and other persons including grandparents. Mr M identifies the wife as the children’s primary carer and the other evidence shows that is so. Prior to separation the husband worked full time as (omitted), and the wife was the homemaker and cared for the children. The husband in his discussions with the psychologist Ms C acknowledges that after his mother died he did little to help with the children. Clearly the mother is the primary carer and her well-being is therefore important to the children’s well-being
The children’s love for their father is acknowledged by the wife and the close relationship with the husband is described by Mr M. They have been living with their maternal grandparents and so have a close relationship with them and Z’s close relationship with his maternal grandfather was noted by Mr M.
The paternal grandparents are deceased. The husband has a brother and sister living in Sydney. The children get on well with them when they meet them.
The extent to which each parent has participated in decision making and spending time with the children and their support is relevant. The husband has travelled from Sydney to Melbourne with the attendant difficulties to see the children. The wife prevented the children from seeing the father from December 2012 until May 2013 but has since cooperated with court orders. The husband has provided some support for the children, the extent being to some extent disputed, but this is of little relevance in this case.
The next additional consideration is the effect of any change on the children. If they moved to Sydney they would see their father more frequently but they would be moved from the environment in which they have been since early 2012. The mother would lose the emotional, day-to-day and financial support that she enjoys from her parents. The children are well settled in Melbourne and have been since early 2012. While Mr M’s evidence is that X would adjust from moving away from her school and friends, she would have to adjust. Z has a close attachment to his grandfather. Mr M noted that it took the grandfather to settle him and so Z would lose this support.
The evidence about the difficulty and expense of the children spending time with a parent is clear. The father gave evidence of the expense of coming to Melbourne and said that he could not afford to keep it up. Clearly, the children would see their father less often if they live in Melbourne.
The next consideration is the ability of each parent to provide for the children’s needs including intellectual and emotional needs. Both parents can do this, but the mother as the primary carer has the greater capacity.
The next consideration is the attitude to the responsibilities of parenthood. One responsibility of a parent is to promote a relationship between the children and the other parent. The wife in moving to Melbourne has made it more difficult for the children to have a relationship with the husband, but initially she did this with the husband’s consent. The children did not see their father from December 2012 to May 2013. Once court orders were made the wife has cooperated with them and now acknowledges that the children should be seeing their father.
Issues of family violence and family violence orders are described above.
The need to make an order least likely to lead to further proceedings is relevant to the question of an order for parental responsibility and that is dealt with later in these reasons.

Parental responsibility

The parties are in dispute about whether there should be an order for equal shared parental responsibility, proposed by the husband, or an order for the sole parental responsibility for the wife, as proposed by her. Section 65DAC of the Family Law Act 1975 (Cth) sets out the effect of a parenting order for shared parental responsibility. If there is such an order and the exercise of parental responsibility involves making a decision about major long-term issues in relation to the child the parties are required to make the decision jointly. They are required to consult each other in relation to the decision to be made and to make a genuine effort to come to a joint decision about that issue.
Major long-term matters include schooling (both present and future), the children’s religious and cultural education and changes in the child’s living arrangements that make it significantly more difficult for the child to spend time with a parent.
Section 65DA provides a presumption that it is in the best interests of children for parents to have equal shared parental responsibility. The presumption does not apply if there are reasonable grounds for believing that there has been family violence or if it is not in the best interests of the children for the presumption to apply.
There is clear evidence of two instances of family violence. The husband’s behaviour in March 2012 meets the definition of family violence in s.4AB of the Family Law Act 1975 (Cth) in that it was “violent, threatening or other behaviour by a person that coerces or controls a member of the person's family (the family member), or causes the family member to be fearful”. The husband’s description of the occasion when he held X up under the armpits in itself meets the definition of family violence. Since I am satisfied that the husband put his hands around X’s throat it clearly does. I am satisfied there were other occasions of family violence.
Consequently, since there are reasonable grounds for believing that there has been family violence, the presumption does not apply, but since the husband proposes an order for equal shared parental responsibility I have to decide whether it is in the best interests of the children for that to be done.
In Chappell & Chappell (2008) FLC 93–382 the Full Court of the Family Court of Australia said at [75]:
In order to rebut the presumption it is necessary for the Court to make a finding that it would not be in the best interests of the child for the presumption to be applied. We accept that in determining what is in the child’s best interests the Court must take into account the prescribed matters in ss 60CC(2) and (3), one of which requires the Court to consider whether it would be preferable to make the order least likely to lead to the institution of further proceedings. In our view, it would be an appropriate exercise of discretion in some cases to find that application of the presumption would not be in the child’s best interests because the track record of the parents would suggest a high probability of deadlock, which would inevitably lead to further proceedings. In such cases, however, the process of reasoning required to rebut the presumption would involve findings related to the welfare of the child, rather than findings concerning, for example, the likelihood that schools and hospitals would find it easier to deal with one parent rather than two.
The Full Court was referring to rebuttal of the presumption but the passage above shows the relevance of the best interests consideration whether it would be preferable to make the order least likely to lead to the institution of further proceedings. In this case there is significant mistrust between the parties. The wife says that she wanted to enrol the children in (religion omitted) school and could not get the husband to reply with his consent and so she went ahead. Similar things might happen with the children for schooling generally. There is a potential for a dispute about religious upbringing because one party is (religion omitted) and the other (religion omitted) and this, the wife suggests, is an element in the issue about the (religion omitted) school. The husband’s mistrust extends to a belief that the wife has “embezzled” a large amount of money. The husband used this word when speaking to Mr B.
One of the major long-term matters is changes in a child’s living arrangements that make it significantly more difficult for one parent to spend time with the child. That is a major issue in this case. The parties cannot agree whether the children should live in Melbourne or Sydney and the court must decide. Once the decision is made a further change is unlikely but the potential exists.
I am satisfied that the inability of the parties to communicate and the distrust they have of each other suggest a high probability of deadlock. It may only be that the mother proposes sending the children to a certain school, perhaps an (religion omitted) school, in addition to ordinary schooling and the husband might not reply. In terms of the obligations placed on a parent by an order for equal shared parental responsibility, that places the mother in a difficult position. If she enrols the children unilaterally arguably she is breaching the obligation imposed by an order for equal shared parental responsibility, but on the other hand the children’s best interests would require that they do be enrolled.
Since there is a high probability of deadlock an order for equal shared parental responsibility is not in the children’s best interests. The risk of further litigation needs to be avoided. The children’s best interests are served by the mother having an order for sole parental responsibility. They have a excellent relationship with their father and the order will not affect that.

Relocation

The pathway through the legislation described in Goode & Goode [2006] FamCA 1346; (2006) FLC 93-286 applies in relocation cases just as in any other children’s case. See for instance the decision of the Full Court of the Family Court of Australia in Sayer & Radcliffe and Anor [2012] FamCAFC 209. Since I have decided that an order for equal shared parental responsibility is not in the best interests of the children I do not have to consider the requirements of s.65DAA.
An element of the best interest consideration the ability of each parent to provide for the needs of the children is the practicality of where they live and how they are supported. The wife lives with the children with her parents in a home big enough to accommodate all of them. She has the support of her parents, including financial support. She intends staying with her parents.
The wife’s income is a separated parent’s pension and family tax benefits. She is not claiming child support from the husband. She has retained an exception from doing so based on family violence.
She says that if she moved to Sydney she could not afford to rent near the husband’s residence and would have to go further out in the suburbs of Sydney. The husband says rental accommodation is available from about $350 a week. The wife says it would be more expensive. Whichever is correct her financial position would be considerably worse than at present.
The wife has no family in Sydney and so would lose the considerable family support she has in Melbourne.
Should the children move from Melbourne to Sydney they would move from a well settled environment to an uncertain one. The mother would have to maintain her position as the children’s primary carer without the support of her parents. While she is clearly a strong personality her personal well-being might be affected by living in close proximity to the husband, although admittedly in a large city. There is no professional evidence of how a move might affect the wife but I am satisfied from the evidence of how she views the husband that she would at least feel some unease. While I am not satisfied there was family violence to the extent the wife alleges, I am satisfied there was family violence. The husband’s statements to the psychologist Ms C of his attitude towards the wife show that the mother has grounds for feeling uneasy. This unease might have an additional effect on her ability to care for the children and its possibility is something to be taken into account when assessing the effect of the move on the children.
One matter which must be considered is the ability of the husband to relocate. He says he cannot because his business and business contacts are in Sydney. In addition, he continues to live in the house which was owned by his father. The likelihood of him remaining there for some time is dealt with later in these reasons. If the husband was to move to Melbourne he would have to find a place to live and he would either have to find employment or establish himself as a (occupation omitted) in Melbourne. I approach the question of relocation on the basis that the husband cannot relocate.
The best interests considerations lead to the conclusion that the children should remain living in Melbourne with their mother. They are well-established and well cared for by their primary carer, their mother. Moving to Sydney would have an adverse affect on the mother’s ability to care for the children. She would struggle in the basics of provision of accommodation and day-to-day care. The situation the mother and the children would be in if they moved to Sydney is uncertain. The countervailing consideration is the reduction in time the children will spend with the husband but that is outweighed by the other considerations.
The wife’s proposal for the children’s time with the husband if she remains in Melbourne is the only practical one. It provides for a substantial amount of time in Sydney with the husband during school holidays. The husband’s ability to spend time with the children in Melbourne is uncertain and the children spending time with the husband in Sydney apart from school holidays is impractical.
Even if the children did return to Sydney spending equal time with each parent would not be in their best interests. Mr M does not recommend equal time. While I am not required to consider the reasonably practicable considerations in s.65DA they are still relevant. The parties attitude to each other means that they would not be able to communicate over the myriad small issues that would arise under an equal time arrangement and solve any problems as they arise.
The cost of travel for the children to Sydney must be borne by the husband. The mother’s income, largely dependent on government benefits, is insufficient for her to be able to contribute.

Property

In her case outline the wife lists the matrimonial assets and liabilities as follows:
ASSETS
Property M1                   $370,000
Property M2                   $390,000
Tools  $    3,000
Chattels  $    2,000
Ford Territory                 $    8,000
TOTAL  $773,000
LIABILITIES
mortgage on Properties M1 & M2            $550,000
NET ASSETS  $223,000
In his case outline the husband lists the assets and liabilities as follows:
ASSETS
Property M1   $370,000
Property M2                  $390,000
husband’s (omitted) Bank account        $       767
husband’s (omitted) Bank account        $       480
husband’s (omitted) Bank account        $       580
wife’s (omitted) Bank account         $  70,000
wife’s shares  $    5,283
wife’s (omitted) shares  $       999
wife’s (omitted) Ford  $  12,000
TOTAL  $850,109
LIABILITIES
Properties M1 & M2 mortgage                 $550,000
company’s Australian tax debt               $ 26,502.83
company overdraft  $  50,000
company (omitted) Bank credit card         $    8,498
husband’s (omitted) Bank credit card        $  22,000
husband’s (omitted) Bank credit card        $    2,298
(omitted) Bank credit card                         $  11,022
TOTAL  $670,320.83
NET ASSETS  $179,788.17
The amount of superannuation is agreed, the husband has $76,000 and the wife has $16,133. Neither party proposes a splitting order and so I will treat these amounts as a financial resource of each party.
In cross examination the husband acknowledged he has (omitted) shares valued at about $1,000.
In the husband’s list of assets the wife’s (omitted) Bank account of $70,000, the wife’s shares $5,283, and the wife’s (omitted) shares $999 are noted as coming from her financial statement of 11 February 2013. The wife gave evidence that at the time of trial she had about $500 in bank accounts but otherwise confirmed the correctness of the financial statement. Although not included in the wife’s outline the evidence is that she retains shares with a total value of $6,282 at 11 February 2013. There is no other evidence of value and so I will use the value of the $6,282.
The wife had $70,000 in a bank account in February 2013. In June 2012 she withdrew $82,000 out of the parties’ bank account. The amount of $70,000 in February 2013 was the balance. Effectively by the time of the hearing the balance was gone. Some of it was spent on furniture and household items after she came to Melbourne. A substantial amount, at least $56,000 went to legal expenses. Final submissions on behalf of the husband proposes that the whole of the $82,000 be included as a matrimonial asset, in other words be added back in.
Normally money which was clearly matrimonial funds at separation which has been spent on legal expenses should be added back into the assets. The issue here is more complicated because the husband has spent a substantial amount of money, the total of which is not clear, on legal expenses which is not as clearly identifiable as the money the wife spent.
The husband has had two solicitors and is in dispute with the first one over his fees. While what he has paid to both solicitors is not clear it is substantial. Cheque butts showed $70,000 for legal expenses and another $3,000 in bank transfers. The company account was in credit $17,000 in October 2012 when the husband sold a motorbike he had purchased earlier in the year. In April 2014 it was overdrawn $50,000. The husband says that he was not drawing wages from the company and so he was effectively using his wages for legal expenses. He acknowledged that some of the overdraft went towards paying the legal expenses.
On that argument the company overdraft should be treated as an expense of the husband and therefore not included in the calculation of the parties assets and liabilities. The other matter relevant to this question is the tax liability of $26,502.83. If the husband had not spent money on legal expenses the money would have been available to pay the tax liability.

The exact amount each party has paid for legal expenses is not in evidence. The submission for the wife is they should be ignored because they effectively balance out. That, I consider is the correct approach. The overdraft and taxation bill should be included as liabilities in the calculation of matrimonial assets and liabilities. Those liabilities, or much of them, would not be there if the husband had not used money from the company for legal fees. Much of the $82,000 the wife withdrew would still be there if not spent on legal expenses. The amount the wife spent on items other than legal expenses I accept was spent on reasonable living expenses.
The other matter relevant to legal expenses is that after the wife withdrew $82,000 from the parties savings the husband withdrew the balance, $30,462. He says he paid it into the mortgage accounts for the parties properties or used the money for living expenses, cash that he gave the wife for the children and for travelling to Melbourne to see the children. This is additional money that the husband has had to use. The husband has spent money on his living expenses and nothing suggests he has been extravagant. Consequently, there is no argument for the adding back of the $30,462 but it is a further consideration in treating the amounts each party has spent on legal expenses as cancelling each other out and not taking them into consideration in determining what are the assets and liabilities.
The husband lists several small amounts in bank accounts. The wife likewise has small amounts in bank accounts, some in children’s names. The source of the funds is not clear and they may be money received after separation. In the circumstances I will not include them.
Both parties include the wife’s (omitted) Ford motor vehicle. The husband uses a value of $12,000 from the wife’s financial statement of 11 February 2013. The wife values it in her case outline at $8,000. There is no professional valuation and so I will use the wife’s recent valuation of $8,000 as an admission against interest.
The husband lists credit card debts of $35,320. He says that at the time of separation the parties had credit card debts of $40,000 and he has been making minimum payments since. The wife does not dispute the credit card debts and so I will include them as liabilities.
The assets are:
Property M1   $370,000
Property M2   $390,000
wife’s shares   $    5,283
wife’s (omitted) shares  $       999
wife’s (omitted) Ford  $    8,000
husband’s (omitted) shares  $    1,000
TOTAL  $775,282
The liabilities are:
liabilities Properties M1 & M2 mortgage $550,000
company Australian tax debt                  $  26,502.83
company overdraft  $  50,000
company (omitted) Bank credit card     $     8,498
husband’s (omitted) credit card             $   22,000
husband’s (omitted) credit card             $     2,298
husband’s (omitted) credit card             $   11,022
TOTAL  $670,320.83
NET ASSETS  $104,961.17
The husband has $76,000 in superannuation and the wife has $16,133.
Given the small size of the property pool the matters under s.75(2) become particularly significant, but I must make a determination on contributions.

Contributions

At the commencement of the relationship the husband had these assets. The Values are his estimate:
Property R  $85,000
(omitted) motorbike  $10,000
(omitted) jet ski       $10,000
(omitted) truck                     $  6,000
Savings  $25,000
(business omitted) Pty Ltd                        $  2,500
The wife says that she had these assets:
Shares  $  9,648.20
Investment fund  $  1,165.66
Motor vehicle   $10,000
The wife’s outline of case says that the husband had a taxation debt of $25,000 but I have not seen any verification one way or the other. All the husband’s assets except for the (business omitted) company have been sold. He says he spent $40,000 on the wedding.
I do not need to make findings on what the parties had at the commencement of the proceedings. The substantial asset the husband owned was real estate at Property R and I proceed on the basis that he made a greater initial contribution to the parties assets. The value of $85,000 put on it by the husband is a net value. The husband says he purchased it for $310,000 with a $100,000 deposit and a mortgage of $210,000. When he purchased it is not clear but the best inference I can draw is that it was not very long before the parties married. The parties had a 10 year relationship in which three children were born and their asset position changed. While I have to take into account initial contributions their influence is not large.
The husband is an experienced (occupation omitted). He undertook a (course omitted) and has studied and obtained a number of certificates in (occupation omitted) since then. He is a licensed (occupation omitted) and started his company (business omitted) Pty Ltd in 1997.
The two properties are rented with a combined rental of $3,720 per month. The husband’s pays interest only on the mortgage, about $2,535 per month. There are outgoings such as insurance and maintenance, but there is income in excess of outgoings. In cross examination it was put to the husband that it was about $10,000 and while the husband did not acknowledge that exact amount it is something in that vicinity.
From 2002 to 2009 the parties lived in the property owned by the husband at Property R. In 2004 they purchased an investment property at Property M1 for $275,000 plus stamp duty and costs of about $15,000. The husband says he renovated the property at a cost of $70,000. He says if he was to employ someone for this work the total cost would have been $180,000.
The land was subdivided and the husband then built a property at Property M2 at a cost of $165,000. He says that if he had employed someone to do the work the cost would have been $285,000. The original purchase was financed by mortgage as was the construction of Property M2.
The husband’s father gave him $25,000 in 2006 which went towards the loans. Following his mother’s death in (omitted) 2008 the husband received an inheritance of $20,000 which was placed into the mortgage loan.
The husband says that while the parties resided in the Property R property he undertook renovations with materials costing $20,000.
In 2009 the parties and then two children moved to live at Property B, a property owned by the husband’s father. They lived there rent-free until separation and the husband estimates that that saved them approximately $104,000 over a period of four years. He says he undertook renovations with materials costing $15,000. Following separation the husband has continued to reside in the Property B property.
The husband’s income was from his (omitted) business. Around the time of separation he says that its gross receipts were about $150,000 and he was drawing a wage of $50,000.
The husband says that he paid the wife’s Higher Education Loan Program Debt but a Australian Taxation Office statement of 30 June 2013 shows that the debt is $9,533.
The wife worked in the husband’s (omitted) business. She paid accounts, prepared material for the companies accountant for Business Activity Statements and Taxation returns and attended to banking. She was employed in the early part of the marriage but there is little material about the extent of that employment. The husband in an affidavit says she worked a total of 13 months. For much of the marriage she cared for the children as well as the administrative work for the husband’s (omitted) business.
After separation the husband made some payments towards the upkeep of the children. There is no child-support assessment because the mother has an exemption from applying. The husband had considerable expense in travelling to Melbourne to spend time with the children. The wife maintained the children by living at her parents’ house and from the government payments she received. The husband made a larger initial contribution but of no great significance given the period of the marriage. The majority of the parties’ income was earned by the husband and he received payments from his father and his mother’s estate. He renovated one of the parties’ investment properties and built the other and carried out improvements to his father’s property which was the parties’ matrimonial home. The use of this home in Property B was rent-free and so the value of that must be treated as a contribution by the husband.
The wife paid the major part in caring for the children and as a homemaker. Particularly because of the relatively small property pool, diminished because of the amounts spent on legal expenses, the mother’s lesser contribution to financial matters is matched by her greater contribution in caring for the children and as a homemaker. The parties post separation contributions do not affect the assessment of contributions. The parties’ contributions are equal.

Section 75(2)

The husband is a qualified (omitted) and has an established (omitted) business, the evidence about his income is that it is a relatively modest $50,000 a year. The wife has tertiary qualifications as an (omitted) and so an ability to an income. She is not doing so because she is caring for the children, but once the younger child commences school she should be able to obtain employment. Both parties are in good health.
The wife has no property apart from her interest in the property the subject matter of these proceedings. The husband has an interest in his father’s estate.
The husband’s father died after the parties had separated. He died without leaving a will. His estate consists of two properties, the one in which the husband lives, the former matrimonial home in Property B and one in which his sister lives. Under the terms of the Succession Act 2006 (NSW) the children of the deceased share the estate in equal shares.
The husband has a sister and brother. The sister lived in a property owned by her parents from 1999 caring for her father until his death. She is single with one adult child aged 30. The husband’s brother is married. He has two children from a previous marriage, one adult aged 22 and the other 16 or 17. He is (occupation omitted) for (employer omitted) and his wife works at (employer omitted) as well.
The husband lives in the former matrimonial home, the home owned by his deceased father, and now by the deceased father’s estate. The husband’s sister lives in a property formerly owned by their deceased mother, now part of the deceased father’s estate. While no admissible evidence of the valuations is before the court the husband has produced a valuation of $565,000 for the father’s property and $380,000 for the mother’s property, a total of $945,000, and in submissions both parties accepted these valuations for the purpose of s.75(2).
Both the sister and the brother have sworn affidavits and were cross-examined. The husband and his siblings say they have agreed that the sister should have 50%, the brother 40% and the husband 10%. They say they have agreed this because the sister cared for their father for many years, and the husband has had the benefit of living in his father’s house rent-free. The agreement is not in writing.
While legally the estate is shared equally between all three they can agree to a different division. The Family Provisions of the Succession Act 2006 (NSW) may give the husband’s sister and brother the ability to claim a greater share of the estate if not agreed. The sister’s claim would seem to be stronger than the brother’s. Other than those observations I can make no assessment of the likely result of any claim if it was made.
I am conscious that agreements among family members which disadvantage one party in property proceedings need to be scrutinised carefully. The husband and his sisters are entitled to make the agreement they say they have. It is not in writing and they say that is because it is an agreement within the family. I cannot say that it is not genuine and I proceed on the basis that it is.
Currently the husband remains living in what was described as their father’s house and the sister remains living in what was described as their mother’s house. All three say they have no current plans to sell but will sell once one decides they wish to take their share. As best as I can infer from the limited information I have the brother has no immediate need for his 40% share. I have no information about his income or other financial circumstances apart from his employment which, from its description, is relatively well paid. His wife is employed.
The husband and his sister both have a home in which to live and a reasonable inference is that they have no need to realise their interest in their father’s estate. The husband remains living in the home in Property B. The husband and his siblings are on good terms. That is the inference I draw from their evidence. I conclude that the husband’s brother and sister will not bring about the sale of the Property B property unless they are satisfied that the husband has a satisfactory residence elsewhere. I conclude that the husband will be able to live in the Property B property until he is in a position to find other satisfactory accommodation. When he does he will have a capital amount of 10% of his father’s estate, currently $94,500.
Neither party proposes a superannuation splitting order and so the husband has more superannuation than the wife and the greater ability to contribute to it in the future.
Because the estate is small I must look at the reality of the parties financial positions rather than simply percentage amounts. The wife has no assets other than her share in the matrimonial property and nowhere to live except her parents’ home. A reasonable inference is that she can remain living there indefinitely. She has the care of all three children and will have them until they turn 18. She has the assistance of her parents. She has the ability to earn income but it is limited by her need to care for the children. She may receive an inheritance from her parents eventually but that would seem to be some distance into the future. She is not receiving child support from the father, and while she may receive some support it will be limited. Any obligation or ability of the father to pay child support will be offset against any costs incurred as in travelling to Victoria to see the children.
The father has the ability to earn income from his (occupation omitted) skills and his established (omitted) business. He has a home to live in and when he moves from that home will have a capital amount which at $93,500 is not much less than the parties net assets of nearly $105,000.
The wife’s proposal that she should receive 80% of the net assets does not treat the company overdraft, the taxation bill or the credit card bills as liabilities for the purpose of calculating the net value. I consider that those liabilities should be treated as liabilities for the purpose of calculating the parties net matrimonial assets. I propose making orders which, while leaving them as liabilities for the husband to satisfy, treat the husband’s business overdraft, taxation debt and the bankcard debts, valued at the time of the hearing, as matrimonial debts.
Given that the wife must care for all three children with probably only limited assistance from the husband, except during school holidays when the children are with the husband, the considerations under s.75(2) overtake the equal assessment of contributions completely. I consider that the proper adjustment under s.75(2) is for the whole of the net assets to be paid to the wife. I will round the figure at $100,000 This does not give the wife more than the 80% she proposed because she proposed 80% of a higher asset pool.

I certify that the preceding one hundred and fifty-three (153) paragraphs are a true copy of the reasons for judgment of Judge Phipps

Associate:

Date: 26 February 2015

[2015] FCCA 372

26 February 2015

Key Legal Topics

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Family Law

Equity & Trusts

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Injunction

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Fiduciary Duty