LIVINGSTON & LIVINGSTON
[2015] FCCA 1863
•8 July 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| LIVINGSTON & LIVINGSTON | [2015] FCCA 1863 |
| Catchwords: FAMILY LAW – Property – accusations regarding non-disclosure – dispute over existence and location of gold sovereigns and bullions – initial contributions – disparity in incomes. |
| Legislation: Family Law Act 1975, ss.60CA, 60B, 65D, 64, 60CA, 60CC, 60CC, 60DA, 65DAA, 79, 75(2), 4(1) |
| Waterford and Waterford [2013] FamCA 33 Mazorski and Albright [2007] 37 Fam LR 518 McCall & Clark (2009) FLC 93-405 MRR and GR [2010] HCA 4 Chang v Su (2002) FLC 93-117 Stanford & Stanford (2012) 247 CLR 108 Bevan & Bevan (2013) FLC 93-545 Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 Pierce v Pierce (1998) FLC 92-844 Williams & Williams [2007] FamCA 313 C & C (2005) FLC 93-220 Rosati v Rosati (1998) FLC 94-804 |
| Applicant: | MS LIVINGSTON |
| Respondent: | MR LIVINSTON |
| File Number: | DNC 187 of 2013 |
| Judgment of: | Judge Harland |
| Hearing dates: | 20, 21, 22 May, 19, 20 November 2014 and 15 May 2015 |
| Date of Last Submission: | 15 May 2015 |
| Heard at: | Darwin and Melbourne |
| Delivered at: | Adelaide |
| Delivered on: | 8 July 2015 |
REPRESENTATION
| Counsel for the Applicant: | Ms Farmer |
| Solicitors for the Applicant: | Withnalls Lawyers |
| Counsel for the Respondent: | Mr Sweeney |
| Solicitors for the Respondent: | Mills Oakley Lawyers Pty Ltd |
ORDERS
Parenting
The wife and the husband are to have equal shared parental responsibility for the child [X], born [omitted] 2001.
The child is to live with the wife.
The child is to spend time with the husband in accordance with the child’s wishes.
Property
That pursuant to s.78 of the Family Law Act1975 the wife shall be and hereby is declared to be the sole and absolute owner at law and in equity of the following:
(a)Property S, Northern Territory;
(b)2011 Toyota Rav4;
(c)her shares;
(d)AMP investment;
(e)her superannuation;
(f)gold sovereigns and coins; and
(g)bank accounts, furniture, chattels, personalty and jewellery in her possession
That pursuant to s.78 of the Family Law Act1975 the husband shall be and hereby is declared to be the sole and absolute owner at law and in equity of:
(a)Property C, Northern Territory;
(b)Property M, Victoria;
(c)1999 Holden Rodeo;
(d)Bolwell Shark Scooter;
(e)2003 Hyundai Getz;
(f)his shares;
(g)his superannuation; and
(h)bank accounts, furniture, chattels, personalty and jewellery in his possession.
That within 60 days of the date of these orders each party shall do all such things and execute all documents necessary to transfer the property situated at and known as Property C, Northern Territory being the whole of the land contained in folio identifier lot [omitted] Town of Darwin comprised in Certificate of Title Volume [omitted] (“the Property C property”) to the sole name of the the husband.
That within 60 days of the date of these orders each party shall do all things and execute all documents necessary to cause the property situated at and known as Property B, [B], Northern Territory being the whole of the property contained in folio identifier Lot [omitted] Town of [B] comprised in Certificate of Title Volume [omitted] (“the [B] property”) to be sold by private treaty (or auction if the real estate agent recommends it) at the earliest possible date and that the proceeds of sale be disbursed as follows and in this priority:
(a)Payment of the costs of sale including agents’ commission and conveyancing fees.
(b)Payment to the husband of $2,000 for the wife’s share of the sale costs of the Property H, property, also known as Property W, (“the Property H property”).
(c)Estimated remaining CGT owing on the sale of the Property H property of $6,307.
(d)Land tax owing on the Property H property of $5,084.74.
(e)Estimated CGT of $1,825 on the [B] property.
(f)Estimated CGT owing on sale of the Property L, Northern Territory property (“the Property L property”) of $22,181.
(g)Balance to be divided between the husband and wife such that the wife receives 30% and the husband receives 70% of the property pool.
That the husband indemnify the wife with respect to all and any taxation liabilities regarding income and expenses for the Property C property, the [B] property, the Property L property and Property M, (“the Property M property”) property.
That in the event that either party should fail, neglect or refuse to sign or execute any deed, document or instrument required by or to give effect to these Orders then pursuant to s.106A Family Law Act 1975 that the Registrar of the Federal Circuit Court of Australia, Melbourne Registry shall be and is hereby authorised, empowered and directed to sign and execute such deed, document or instrument in the place and instead of such party and to thereafter do all things and acts as are necessary to give validity and operation to same.
IT IS NOTED that publication of this judgment under the pseudonym Livingston & Livingston is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT DARWIN |
DNC 187 of 2013
| MS LIVINGSTON |
Applicant
And
| MR LIVINGSTON |
Respondent
REASONS FOR JUDGMENT
The parties are embroiled in a hotly contested parenting and property dispute.
History of the proceedings
This matter has been strongly litigated since its inception. Several applications in a case have been filed.
The final hearing commenced in May 2014. The matter initially had an earlier listing that had to be delayed because of the husband’s late provision of a substantial number of disclosure documents. The hearing had to be aborted on the third day of trial because of the husband’s mental health. Due to the husband’s presentation outside of court his lawyers arranged for an urgent appointment with psychologist Ms K who raised the issue about the husband’s capacity to proceed with the hearing and to give instructions.
The hearing was adjourned so that the husband’s lawyers could obtain a psychiatric assessment of the husband. The wife is [occupation omitted]. It is necessary for the husband to see an interstate psychiatrist. The husband filed a report by that psychiatrist which indicated that the husband had capacity but would be unable to proceed with the hearing for a couple of months.
On 23 June 2014 the Court listed the matter for a further three days of hearing commencing on 20 November 2014. Mr R prepared the family report in this matter. It appears that although the lawyers put him on notice that he was required for cross-examination, he did not advise the parties promptly that he would be away during the scheduled hearing period. He was overseas until mid-January 2015 and it was not possible for him to give evidence by telephone from overseas. If he had responded to the lawyers promptly than alternate dates could have been allocated. As it stands it only came to the attention of the parties and the Court a couple of weeks before the hearing was due to resume. As the matter was part heard no other hearings were listed on those days so valuable court time would have been lost if the hearing were not to proceed. The hearing continued for 2 days of 20 November 2014. The matter was listed for further hearing for one day on 5 March 2015.
Due to my transfer from the Darwin Registry to the Melbourne Registry I brought the hearing forward to 19 February 2015. The hearing could not continue on that day as the wife was in hospital with pancreatitis. The parties sensibly agreed that the last part of the hearing could be conducted by video link from the Melbourne Registry. The only witness left to give evidence was the family consultant. The hearing had already been extended due to circumstances outside of the control of the parties and the court.
At the commencement of the trial the wife relied on the following material:
a)her trial affidavit filed 9 May 2014;
b)her financial statement filed 9 May 2014;
c)affidavit of Mr L filed 9 May 2014.
At the commencement of the trial the husband relied on the following material
a)his trial affidavit filed 11 May 2014;
b)his financial statement filed 15 May 2014;
c)affidavit of Mr C filed 20 January 2014;
d)affidavit of Mr J filed 16 May 2014;
e)affidavit of Mr D filed 17 February 2015;
f)family report dated 3 October 2014.
At the resumption of the trial the husband also relied on with leave:
a)affidavit of Dr K;
b)affidavit of the husband filed 14 November 2014;
c)affidavit of Ms C.
Background
The husband was born on [omitted] 1960. He is 54 years old.
The wife was born on [omitted] 1967. She is 47 years old.
The parties were married on [omitted] 1999.
[X] was born on [omitted] 2001. He is 13 years old.
They separated on 3 November 2012 when the wife and [X] moved out of the former matrimonial home.
The parties divorced.
Parenting dispute
The husband says the wife was always possessive of [X] from the time he was born. He says even when they were together she would discourage the husband from spending time with him. When he was living in the downstairs part of the house and the wife was living upstairs the husband says [X] would sneak downstairs to see him. The husband says [X] described himself as the meat in the sandwich. The husband says the wife made him live downstairs after he returned from a year working in Cairns from May 2010 until she moved out of the home in November 2012.
The husband says that he loves [X] unconditionally. He says he was a good and responsible father and was actively interested in all aspects of [X]’s life.
He describes the limited periods of time he has spent with [X] since separation. They have been in the nature of short visits and outings.
The husband, in frustration at not being able to see [X], stopped at the wife’s home on his way to his property in [B] on 15 September 2013. He says the wife was angry and came out and told him that he had been told not to come there. [X] came out and the husband says he looked scared. The husband said to [X] that he was travelling to [B] and asked if he would like to come and that he would be back before dinner. The wife said to the husband that [X] had homework to do. The husband said [X] looked like he was crying. The wife insisted that [X] had conjunctivitis. The husband says he left quickly as the wife was angry and [X] looked frightened.
The husband outlined other attempts he has made to see [X] which he says have been blocked by the wife. He also proposed family therapy.
The wife says that throughout the relationship she was mainly responsible for [X]’s care. She says the husband had little time for [X]. She says that when the husband worked in Cairns for 12 months there was little communication between the husband and [X].
The wife says when the husband returned from Cairns he agreed to live downstairs. Their relationship continued to deteriorate and they lived separately.
Both accuse the other of being derogatory, negative and manipulative.
The wife says the husband’s relationship with [X] continued after separation as it had previously, with them seeing each other on rare occasions and speaking by phone on rare occasions.
The wife says the phone the husband gave [X] to use had less than $30 credit on it. She says the husband placed pressure on [X] to use it which he resisted by turning it off and not carrying it with him. The credit ran out shortly after [X] received it. The wife says she told the husband he needed to put more credit on it. It would have been a simple thing for the wife to put credit on the phone.
The husband delivered correspondence to [X]’s school on 23 May 2013. The wife says this upset [X] and he spent the day in Pastoral Care. [X] wrote to his father asking him not to write to him at school. The wife says despite this the husband sent three further emails to [X] at school. The wife is silent about anything she did to encourage an alternative means for the husband to contact [X] and any encouragement she gave to [X] to contact his father. I am comfortably satisfied that this is because she did nothing to encourage the relationship with [X] and his father.
The wife says [X] resisted spending time with the husband from April 2013. She says the husband did not listen to [X]’s views expressed at the child inclusive conference and that the husband frequently tried to contact [X] at school and by his mobile and [X] withdrew further. She says the husband kept pushing the issue and [X]’s position hardened. [X] feels pressured by his father and feels guilty.
The husband started sending postcards to [X]. Some were posted and some were hand delivered. The wife says she passed them to [X]. Some of them pressured [X] to spend time with him or guilt tripped him for not seeing the husband’s aunt and uncle before they died. The husband lacks insight into how his messages pressure [X].
The husband left Christmas gifts for [X] at the wife’s solicitor’s office in December 2013 and delivered a parcel to the school in March 2014. I do not accept the wife’s evidence that she has done more than make a token effort to encourage [X] to have a positive relationship with his father. In this respect the wife has failed in her parental responsibility. The wife disagreed with the proposition that she is the gatekeeper between father and son but I believe that is an accurate description. The wife says she had no objection to the husband attending [X]’s sporting events but made no effort at all to inform the husband of the details of those events so he could attend.
The husband showed limited insight into [X]’s needs. He said in cross-examination that his relationship with [X] had not changed but that [X] was restricted in what he could do. He did not agree that the wife was the primary carer of [X] when they were together as he says he was in part-time employment as well, although of course he had to concede that for the year he was in Cairns the wife was [X]’s sole carer. He complains that the wife restricted his access to [X] from the time he was living downstairs and they were living upstairs from 2010 until the separation.
The husband does not accept comments of Mr V and Mr R with respect to [X]’s views. He says that the wife placed [X] under enormous pressure to give way to her wishes since he was a toddler. It was clear from the husband’s evidence when cross-examined that he sees himself as being responsible and fair-minded and supportive of the wife and [X] and that he has been victimised by the wife. He complains that [X] has been coached which was not the findings supported by Mr R. The husband is unable to accept that his relationship with [X] is troubled.
Mr R says that [X] feels pressured and uncomfortable in his relationship with his father and there was a sense of being subjected to emotional manipulation by the husband which he denies. The husband writes postcards to [X] every week. He says he does not see that as pressuring [X] and that [X] has never asked him to stop writing them.
On 28 September 2014 the husband wrote a postcard saying “my lawyer tells me that mum is now divorcing me. That is very sad, I can’t understand it.” The husband says that [X] needed to know what was happening in the family. When asked whether he could see how this was inappropriate, he could not concede that it was important for [X] to know that he was not divorcing his mother. I put to him that it is not appropriate to write to [X] about what lawyers are telling him. The husband responded “if he is able to express an adult view about me, well, then, he needs to understand…” This shows a remarkable lack of insight. [X] is 13 years old. He is still a child and both parents should protect him from the adult issues. Both parents have failed to do this.
The husband sent another postcard to [X] in October 2014 saying “it’s hard for me to remember what you look like.” Again the husband says this is a statement of fact and was unable to see how this might put pressure on [X] or make him feel guilty. He could not see that it might place a burden on [X]. He wrote again the following week telling [X] that the Property L property was on the market for sale because he could not afford it. Again, he said he had to let him know. This is clearly about the husband’s own needs and him not being able to separate them and seeing it from [X]’s perspective. In another card he wrote “I’m thinking of you a lot these days wondering if I will ever see you again.” He also wrote a card that said in Spanish, (as [X] was studying Spanish), which referred to the father being sad because he had not seen his son. Inevitably these types of expressions would make [X] feel guilty and may in fact push him further away from the husband.
The husband did not know what Mr R meant when he said that he had little capacity for critical self-reflection. It is apparent during the course of examination that Mr R made an accurate assessment of the husband and in this regard the husband is very keen to justify his position and present himself as being the innocent party.
The wife’s conduct
The wife has inappropriately involved [X] in the dispute. The husband alleged in his affidavit that the wife would prevent [X] from going downstairs to see him when they lived separately under the one roof with the husband living downstairs and the wife living upstairs. The wife said when giving evidence, she questioned [X] about that after reading it in the affidavit and said that [X] denies that he is frightened of her.
Mr V’s report
Mr V was the family consultant who prepared a section 11F report. Both parents complained about the other.
The wife and [X] said that the husband struck [X] 3 or 4 times before. The wife says [X] was annoyed by the husband talking too much. [X] said that he found a stick during a walk with his father and picked it up. [X] says the husband became annoyed with him, took the stick and hit him with it. The wife and [X] said that he had a red welt on his neck and ribs for about a week. The husband told Mr V he did not recall any such incident and was perplexed by it.
[X] said that his parents used to argue a lot. He chose to live with his mother. He said his father was disorganised and would mess up his routine and that his father was not readily available because of his work. He also said that his father was putting a lot of pressure on him to visit him and says things like “don’t you love me anymore”.
[X] said he went to activities with his father such as going to football. He said he wanted to be able to choose when to see his father. He also said that after his father returned from Cairns he was fine with the arrangement of him and his mother living upstairs and his father living downstairs with [X] being able to see his father when he wanted to.
The husband complained that the wife has made [X] introverted and depressed post separation. He also complained about financial issues. The husband says he wanted an equal time arrangement but then qualified this to say “if [X] chooses”.
Mr V observed that [X] did not seem depressed or introverted but appeared to have thought through his position based on his own experiences. He is reaching a level of maturity where his views could be determinative: “indeed given his experiences, it could be argued his maturity in this regard has been accelerated.”
The wife complained that the husband was manipulative and would interrogate [X]. On at least one occasion the wife is the one who questioned [X] (see [36]). She further discussed the issue of the husband attending [X]’s soccer games with him after she was cross-examined about providing the husband with a schedule of his games. She said [X] knew she was in court but denied she was involving him in the proceedings.
Mr V was cross-examined. He said that he found [X]’s comments to be genuine and not coached and to be consistent with his emotional state. He thought that [X] had accelerated emotionally with respect to family issues. He said some children do that when their parents separate and there is a lot of conflict.
He was not in a position to say that the family needed therapy and noted that the proceedings had been going on for a significant period of time. He said if they would have benefited from therapy he would have thought that the penny would have dropped a long time before. He also noted that even if people agree to go to family therapy there can be varying levels of commitment to it.
I have no doubt at all that the husband loves [X] dearly and is well meaning. The issue is his lack of insight into the impact of his conduct and the inadvertent pressure he puts on [X]. Both parents need to remember that [X] is the child of their relationship and deserves to be protected from the adult conflict between his parents and not burdened by it.
Mr R
Mr R prepared a family report dated 3 October 2013. [X] was 11 years and 10 months old at the time of the report. He has not spent any significant time with his father since June 2013.
The wife said that [X]’s relationship with his father was troubled and he was at that time resistant to spending time with his father.
The husband sought an equal time arrangement. He said [X] needed to have a relationship with him and needed to have him counter the wife’s “controlling and dominant influence”. The husband says [X] is at risk of emotional and psychological harm in his mother’s care.
Each parent accused the other of having a “major personality disturbance” impacting on their parenting capacity.
Mr R said “[t]here is a high level of barely contained hostility existing between the parents and their communication between them is highly problematic.”
He noted that [X] was highly intelligent, articulate and mature for his age and his views should be given considerable weight.
The wife described the husband as egocentric and needing to control everything. She complained that the husband involved [X] in inappropriate discussions. She referred to the husband burdening him with guilt about not spending time with him. She also referred to the stick incident. She said she supported [X] spending time with his father if he wanted to. She said the husband’s pressure on [X] to spend time with him was causing [X] anxiety and distress.
The husband presented as intense and frustrated. He described what he identified as the wife’s deep-seated psychological issues in detail and how this impacted on her as a parent. He said the wife was solely responsible for the breakdown of their marriage. He described [X] as being at serious risk in his wife’s care and that he would explode in a couple of years’ time when he realised what his mother was doing to him. He denied the wife’s accusations against him.
[X] did not want to be observed with his father. He expressed his views in a considered and thoughtful way. His demeanour did not suggest that his views were rehearsed. He described a history of his parents arguing. He said it reduced when his father started living downstairs.
[X] says that he was shocked when his mother decided to move out of the home. He expressed concern about his father visiting his mother’s home unannounced.
[X] gave the impression of having a troubled relationship with the husband and that he felt pressured and uncomfortable in this relationship. He said his father pushes him to spend more time with him and makes him feel bad.
[X] said he accidently hit his father with a stick when they were walking. He said his father pushed him to the ground and hit him across his back with the stick which broke, leaving a mark.
[X] said his father says bad things about his mother. His father told him that his mother was mentally ill. He said his mother did not discourage him from spending time with the husband.
[X] said he would be angry if the Court orders him to spend set times with his father. He said he would refuse to go. He said he wanted to see his father when he wanted to and still intended to see his father. He said he was happy for his father to come to his sporting events and would be happy to spend time with him at those events.
The husband presented as frustrated that so many people had been duped by the wife’s veneer. He describes her as powerful and destructive. The wife describes the husband as manipulative and having a personality disorder. Mr R noted that a psychological assessment of the parents was beyond the scope of his report.
He observed that the husband “displayed little capacity for critical self-reflection” and was rigid in his views. He had a lack of insight and empathy. He thought the wife presented as more balanced and considered. [X] displayed maturity beyond his years. He did not present as being coached. [X] presented his views in a considered and balanced manner. [X] witnessed the breakdown of his parents’ marriage over several years and as an only child was wedged in the middle. He presents as being relieved it is over.
Mr R did not think an equal time arrangement would be in [X]’s interests given the poor relationship between his parents. [X] has said he wants to decide what time he spends with his father for himself and given his presentation, this would be in [X]’s best interests.
The husband says there was an incident involving a stick in late 2011 but that what occurred was not what was reported by the wife and [X] to the family consultant. The husband says he recalls an incident that occurred about 200 metres from their home when he was walking with the wife and [X]. [X] had a stick which he hit the husband with. The husband took the stick away from [X] and put it in the rubbish bin. [X] became very upset. He says the wife left to return home with the dog and he picked [X] up to take him home while he continued to scream and lash out at him. The husband denies striking him with the stick and denies leaving any red welts or bruising. He says the event has been blown out of proportion in order to make it seem that he assaulted [X].
There are examples of the wife making unilateral decisions for [X] where she should have consulted the husband, including enrolling [X] at [omitted]. Whilst they discussed [omitted] as a possibility, it is clear that the wife enrolled him unilaterally and then sought a change to the Child Support arrangement seeking that the husband contributes to the school fees. The wife had indicated through her lawyer that she would provide the details of [X]’s extracurricular activities but never did so.
Mr R was cross-examined. He said the wife had presented as supportive and as prepared to allow [X] to decide and act on his views in relation to the time with his father. He did not gain the impression that she was manipulative or obstructive or not encouraging the relationship. As would be clear from my discussion elsewhere in this judgment I do not share that view having had the benefit of seeing her under cross-examination. He accepted the proposition that encouragement or discouragement can be overt or subtle. Mr R says it was not raised with him that the wife was manipulating or discouraging [X] from having a relationship with his father. He was asked if this would change his recommendations.
When Mr R prepared his report in October 2013 he noted that there was a vulnerable relationship between the husband and [X]. He said he was disappointed that litigation continued on for so long because it places added strain on [X] and his parents and it hangs over their heads. That is likely to have a negative effect on [X]’s relationship with his father rather than a positive one in [X]’s relationship with his father and his father’s refusal to accept that [X]’s views are genuinely his own. He noted the importance of the husband keeping his negative views about the wife to himself and not expressing them to [X]. The same clearly applies to the wife.
Mr R said he struggled to see the benefit of family therapy. He said he had not discussed this with [X] but he suspected that [X] would see it as something being imposed upon him at the behest of the husband. He said if [X] expresses the view that he would not be prepared to attend family therapy or individual counselling he would struggle to see the value in it. He expressed concern that he would allow the current situation to continue further. He was prepared to interview [X] again to ask about family therapy.
Domestic Violence Order application
The wife went to the local court and sought orders restraining the husband from attending her home but it went much further than that. She sought that the injunction cover [X] as well. This was in circumstances when she knew this matter was coming up for final hearing shortly. She conceded in cross-examination that she knows that this Court can make a broad range of parenting orders including restricting the husband from attending [X]’s school and so on.
The complaint was based on the husband attending her house on one occasion unannounced. She also complained that the husband harassed her and [X] since separation. The difficulty with this is that it ignores the fact that the husband has tried to remain in contact with [X] without any positive encouragement from her.
The wife complained that the husband dropped a present for [X] at her solicitor’s office yet if he had dropped it at her house she also would have complained. He dropped it at the solicitor’s office after unsuccessfully trying to make arrangements to see [X] to give it to him in person. The wife’s attitude gives her no credit. She included the husband dropping the present off to her solicitor in her local court complaint as well. The complaint is exhibit C.
I am not prepared to make an injunction on an ongoing, indefinite basis against the husband from attending the wife’s home or approaching her. Given what is happening in this matter, the husband would be foolish to attend the home uninvited but there was not sufficient evidence to suggest that the husband would do so again given what has happened. The wife also has to take some responsibility for creating a situation where the husband is fairly desperate to keep a connection with his son, something which the wife did absolutely nothing to assist.
Family therapy
Initially the husband sought an order for equal shared parental responsibility and a week about arrangement. The wife also sought an order for equal shared parental responsibility.
By the commencement of the hearing the husband changed his position. He seeks an order for family therapy. He seeks orders that do not finalise the parenting proceedings in order to give therapy a chance to work. He did acknowledge the difficulties associated with that, particularly given the passage of time since these proceedings began. Mr R was not in favour of an order being made for family therapy because of [X]’s strong views.
The real consideration here is the utility of therapy given the rigidity of the parties and their lack of insight. The husband has fixed views that are unlikely to change. He sees the situation as being entirely the wife’s fault. The wife blames the husband. It is difficult to see how family therapy will assist assuming that [X] is willing to engage in it.
Legal principles applicable to the parenting issues
The principles governing the Court’s determination in this matter are set out in Part VII of the Family Law Act 1975 (Cth) (“the Act”). The court must regard the best interests of the child as the paramount consideration: s.60CA. What it means in individual cases is informed by a number of statutory provisions.
The objects set out in s.60B(1) help clarify what Part VII aims to achieve when it talks about best interests: s.60B(1). There are also principles that underlie these statutory objections: s.60B(2). S.65D of the Act gives the court the power to make a parenting order which is defined by s.64.
In deciding whether to make a particular parenting order, s.60CA requires that I must consider the matters set out in s.60CC(2), being the primary considerations and s.60CC(3) being the additional considerations.
There are two primary considerations. The first is the benefit to the child of having a meaningful relationship with both their parents and the second is the need to protect the child from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence.
The Act indicates that these considerations are to be considered as having particular importance. They are described as primary and as a note to s.60CC indicates, are consistent with the first two objects of Part VII, as stated in s.60B, that the best interests of the child are met by ensuring they have the benefit of both their parents having a meaningful involvement in their lives to the maximum extent, consistent with their best interests and protecting them from physical or psychological harm from being subjected to or exposed to abuse, neglect or family violence.
The concept of a meaningful relationship has been considered in a number of decisions including Waterford and Waterford [2013] FamCA 33, Mazorski and Albright [2007] 37 Fam LR 518 and McCall & Clark (2009) FLC 93-405.
There are 13 additional considerations which are set out in s.60CC(3) which I will refer to later in these reasons.
I must also consider the extent to which each parent has fulfilled his or her parental responsibilities and has facilitated the other in fulfilling his or her parental responsibilities. I must ensure that any order I make is consistent with any family violence order and does not expose a person to an unacceptable risk of family violence the extent that doing so is consistent with the child’s best interest being treated as paramount. There are no issues of family violence in this case.
S.61DA(1) provides that when making a parenting order, the Court must apply a presumption that it is the best interests of the children for their parents to have equal shared parental responsibility. The presumption does not apply if there are reasonable grounds to believe that a parent has engaged in abuse of the child or family violence (s.61DA(2)). The presumption may also be rebutted if the court is satisfied that it would not be in the best interests of the child for the parents to have equal shared parental responsibility (s.61DA)(4)).
If the presumption is not rebutted and I accept it would be in the best interests of the child to make an order to equal shared parental responsibility, I am then required by s.65DAA(1) and (2) to consider whether to make orders that the child spend equal time and if not equal time then substantial and significant time with each parent.
For a parenting order to involve the child spending substantial and significant time with a parent, s.65DAA(3) requires that it must at least provide for the child to spend time with the parent both on days falling on weekends and holidays and on days falling outside those times. It must also allow the parent to be involved in the child’s daily routine and on occasions and events that are of particular significance to the child and for the child to be involved in occasions and events that are of special significance to the parent.
In MRR and GR [2010] HCA 4, the High Court found that s.65DAA(1) requires a court to consider both whether the best interests of a child is served by an order for equal time and whether it is reasonably practicable for children to spend equal time. Both elements must be present in order for a court to make an order for equal time. At paragraph [13] of the judgment the High Court said:
“Section 65DAA(1) is expressed in imperative terms. It obliges the court to consider both the question whether it is in the best interests of the child to spend equal time with each of the parents (para (a)) and the question whether it is reasonably practicable that the child spend equal time with each of them (para (b)). It is only where both questions are answered in the affirmative that consideration may be given, under para (c), to the making of an order. The words in which para (c) commences (if it is) refer back to the two preceding questions and make plain that the making of an order can only be considered if the findings mentioned are made. A determination as a question of fact that it is reasonably practicable that equal time be spent with each court has the power to make a parenting order of that kind. It is a matter upon which power is conditioned much as it is where a jurisdictional fact must be proved to exist. If such a finding cannot be made, subs (2)(a) and (b) require that the prospect of the child spending substantial and significant time with each parent then be considered. That subsection follows the same structure as subs (1) and requires the same questions concerning the child’s best interests and reasonable practicability to be answered in the context of the child spending substantial and significant time with each parent.”
Both parties seek equal shared parental responsibility in their orders although the wife did make a last minute attempt to change this in closing submissions.
There are no issues of family violence. There is no communication between the parties currently. It is clear that the parties disdain each other and blame each of for the breakdown of their relationship and for other issues. This is often an indicator that equal shared parental responsibility would not be in the child’s best interests. In this case however I am concerned that the wife has not encouraged [X] to maintain his relationship with his father and has in fact obstructed it. [X] is already at high school it may be that there are not major issues which are going to arise for [X]’s care, welfare and development in the next couple of years. In my view it is in [X]’s best interests that his parents be obliged to consult each other about major decisions concerning [X]’s welfare otherwise the wife may exclude the husband altogether.
[X] has a meaningful relationship with both his parents and that should continue. Even though he has not seen the husband for some time it is significant that [X] was not overly critical of his father when he spoke to Mr R. Both parents have done [X] a disservice by placing him in the middle of the conflict. His parents are so entrenched in their positions that they are unlikely to take responsibility for their part which is to [X]’s detriment.
[X] is a mature teenager who has expressed strong views. His views are no doubt in part informed by the conflict he is acutely aware of between his parents. I must place significant weight on his views.
To his credit the husband no longer pressed his application for an equal time arrangement and at hearing the husband sought orders for family therapy. I agree with the views of Mr R that the family therapy is unlikely to achieve anything. The parties are entrenched in their positions and the husband is lacking in insight although he is well meaning and clearly dearly loves his son.
I am mindful of the requirement to consider s.65DAA. It is not in [X]’s best interests that I make orders for either equal time or substantial and significant time. It is likely that any order for a fixed time would be resisted by [X] and would place him in a difficult position. It is hoped that [X] feels that the court has listened to and respected his fears and that he will feel able to approach his father on his terms and spend time with him once these proceedings are over. It is also hoped that the husband is able to give [X] the space he needs and not put pressure on him as he has done so in his communications with [X] in the past.
It is clear that [X] has a good relationship with his mother and maternal grandparents and that the wife is able to provide for [X]’s physical and intellectual needs (as is the husband). The concerns I have with respect to both parents’ lies in their capacity to provide for [X]’s emotional and psychological welfare.
I am satisfied that the parenting orders are in [X]’s best interests.
Property dispute
The parties prepared a joint balance sheet, setting out the value of assets, liabilities and the ownership of these items. They also indicated where there was agreement as to who was to retain a particular item.
The parties have agreed on most aspects of the balance sheet. With respect to the disputed items I make the following findings:
a)Neither party valued the Holden Rodeo. In his first financial statement the husband said it was worth $5,000. He reduced it to $2,000 in his second financial statement. In his case outline he gave it a nil value. The wife attributes a value to it of $5,000. The case outline is not evidence. The husband conceded in final submissions that the court should adopt the figure of $2,000.
b)There is a dispute as to the value of the wife’s Toyota RAV4. The husband says it is worth $19,350. The wife says it is worth $14,000. Neither has obtained a valuation. The husband conceded in closing submissions that I should accept the wife’s figure.
c)I have no evidence of value of the wife’s piano. I remove it from the balance sheet.
d)I accept the husband’s estimates of values for his superannuation.
e)The figure owing for the land tax on the Property M property is not in dispute but whether it should be included in the balance sheet is. The wife says the husband has owned that property prior to the relationship and has had the sole benefit of the income from the property since separation and therefore should be responsible for the liability associated with it. The wife says that the debt was not on the balance sheet prepared in May 2014 and there is no evidence that the husband assumed that the debt arose post May 2014. The husband managed all of the rental properties post separation without assistance from the wife. The wife was also able to purchase her property by withdrawing significant sums from the parties’ joint accounts without telling the husband. In the circumstances, the costs associated with the rental properties should be shared.
f)The figures of estimated capital gains tax are agreed, the issue was whether or not the properties are going to be sold. The wife’s position is that if the properties are sold, the capital gains tax estimate should be taken into account. All estimates of CGT are agreed. The issue is the treatment of CGT on the properties the husband will retain. I discuss this further below.
The parties’ legal and equitable interests are set out below.
Ownership Value Real Property
Remaining proceeds of the sale of Property L, Northern Territory
Joint (sold) $922.00 Property S, Northern Territory
Wife (wife to keep) $640,000.00 Less Mortgage Loan to ME Bank (excluding recent lump sum payment to mortgage from Wife’s partial property settlement and balance of Wife’s Offset Account)
(478,876.00) Net Equity
$161,124.00 Property C, Northern Territory
Joint (husband to keep) $720,000.00 Property B, Northern Territory
Joint (to be sold) $300,000.00 Property M, Victoria Husband (husband to keep) $835,000.00 Partial Property Settlement to Husband
Husband $204,288.54 Partial Property Settlement to Wife
Wife $204,288.54 Funds held in trust with Mills Oakley Lawyers being anticipated capital gains tax payable on sale of Property H, Victoria (sold for $511,000 and settled 27 March 2015) Husband $75,000.00
Miscellaneous 1999 Holden Rodeo & Campervan
Husband $2,000.00 Bolwell Shark Scooter
Husband E$500.00 2003 Hyundai Getz
Husband $1,500.00 2011 Toyota RAV4
Wife $14,000.00 Gold bars, gold sovereigns/ coins removed by Wife
Sundry Shares held by the
Wife as at 12 May 2015Wife
Wife
E$50,000.00
$24,782.00
Sundry Shares held by the Husband as at 12 May 2015 (excluding shares held in trust on behalf of [X])
Husband
$57,208.00
AMP Flexible Lifetime Investment No [omitted]
Wife $26,548.15 Total Non-Superannuation Property $2,677,161.23
Superannuation
[1] Husband $18,719.26 [2] Husband $59,382.72 [3] Husband $203,649.66 [4] Wife $298,744.09 [5] Wife $12,442.19 Total Superannuation $592,937.92
Total Gross Assets $3,270,099.15 Liabilities
Land Tax owing to the Victorian State Revenue Office
Husband ($5,084.77) Estimated Capital Gains Tax
Property H, Vic
Husband ($82,229.00) Property B, [B], NT
Husband ($1,825.00) Property L, N.T
Joint ($22,181.00) Total Liabilities
$111,319.77
Total Net Assets (inclusive of superannuation) $3,133,997.38
Disclosure
Much has been made about disclosure issues in the lead up to the hearing, with complaints being made on both sides. The husband produced numerous folders of documents. The wife did not provide updated disclosure until just before the hearing whilst complaining about the husband’s disclosure. Exhibit E shows her own disclosure was incomplete. It was also clear at the hearing that she did not provide any source documents with respect to her shares. It is not enough to disclose it on the financial statement. It was also hypocritical of the wife to take the position of complaining about the husband initially not making sufficient disclosure and then making too much. Given that the husband had the management of his shares and the rental property; it is not surprising that he had volumes of documents to produce.
The wife’s attitude towards her own duty of disclosure was unsatisfactory. Her complaints included the husband failing to provide joint documents while she in fact shared that obligation. In the instance of the Perpetual Investment document Ms Farmer complained that the husband did not disclosure it until the Friday before the trial when in fact the husband had produced it originally 4 months before.
The husband’s initial contributions
There can be no doubt that the husband made significant initial contributions.
When the parties met the husband was working as a [omitted] in Melbourne. He owned two rental properties.
The husband owned the property at Property M, Victoria which he purchased on 19 March 1987 for $61,000. The property was unencumbered by the time of the parties’ relationship. The husband carried out renovations for the property before they met.
The parties lived in that property from April 1999 until March 2004 when they moved to Darwin. The husband says they carried out further renovations on the property in 2001. The husband says he contributed $50,000 to the renovation and the wife contributed $15,000.
The husband also owned property at Property W, Victoria which he purchased on 28 March 1990 for $415,000. The mortgage was discharged in September 1991 and has been an investment property ever since.
The husband says that at the date of cohabitation he had a Toyota Corona that was worth about $2,500. Further, he says that he had $50,000 in savings and some shares. The wife disputes the husband’s assertion that he had $50,000 in savings and says she did not recall him having any significant savings. She says they pooled incomes after they married and that the pooled income funded their renovations.
The wife says by agreement at the beginning of their marriage they each worked less than full time so that they could commit to their marriage.
The husband says the wife had a Camry, a piano and some personal possessions at the commencement of the relationship. The husband says the wife received a payout of about $8,000 from her first husband and another $8,000 from [omitted] as a result of an unfair dismissal claim. The wife largely agrees with this.
The wife’s career
The wife says that her first marriage to a fellow [omitted] was abusive and that she had started [omitted] during the relationship. She says she pleaded guilty to the offences and received a suspended sentence. As a result of disciplinary proceedings she was placed on restrictions and for three years she was not allowed to [omitted] was required to undertake random drug tests. She had the restrictions removed in mid-1999. She says she was employed as a [occupation omitted] when they met. She then secured employment with [omitted]. The employment offer was then reneged and she received a net payment of $7,000 in compensation. She says she received a similar amount from her ex-husband. When the wife and husband returned from their honeymoon she commenced employment as a [omitted].
The wife was cross-examined about further disciplinary action that the [omitted] had taken against her in Tasmania with respect to [omitted] fraud. She received a fine which she thinks was between $10,000 and $12,000 and that her father paid for her.
In her affidavits filed 9 May 2014 the wife refers to the taxable income of the husband, taking information from the tax returns. The husband’s income has varied somewhat during the relationship as he has had various legal and non-legal jobs. The wife’s income was lower in the earlier parts of the marriage, particularly when she took maternity leave and returned to work part-time. Her income then steadily increased from 2006 onwards. Her income has increased more dramatically post- separation.
The husband’s inheritance
The husband received an inter vivos gift from his father of shares. Exhibit O is a summary of the shares the husband received. The parties accept that the summary is an accurate summation of the source documents. The husband traded shares throughout and after the marriage and sold some from time to time to pay for various living expenses.
He also received an inheritance after his father’s death.
The husband’s affidavit filed 15 May 2014 includes the administration statement for the husband’s father’s estate which shows that the husband received distributions totalling $130,000 cash.
The wife does not dispute the fact that the husband received an inheritance. The husband states that he invested this inheritance in shares. The wife disputes the value of the inheritance and also says that the husband used joint funds to invest in shares such that the share portfolio is not solely referrable to the husband’s inheritance. She was not involved in the share investments. She did not provide details as to what joint funds the husband used.
[X] received $20,000 from his grandfather’s inheritance. The husband invested this in shares and continues to manage it on trust for [X].
Other contributions
The husband claims that the wife had significant health issues of various sorts during the early years of their marriage. He says he provided significant support.
He also says that in the early years of the marriage she worked part-time and received a modest income. Once she obtained her specialisation in [omitted] her income began to rise from about 2008 onwards.
The parties moved from Melbourne to Darwin in March 2004 to enable the husband to take up [occupation omitted]. The wife says she supported the husband in [omitted] performing duties that [omitted] wives usually perform.
The parties purchased a home at Property L, in the husband’s name in December 2005 for $310,000. It was purchased with the assistance of a $290,000 loan. The husband says he used the proceeds from the sale of shares that had been gifted to him by his father in 2006 to payout the loan in full. He had to pay capital gains tax (CGT) on the sale of the shares. The wife agrees that the sale of the shares paid out the mortgage. She says they used their joint income to pay the CGT which was due on the sale of the shares.
The husband says he used the funds from his inheritance to carry out improvements to the [L] property. The wife says they used an agent to manage the property until the husband took this over in 2011.
The husband says he needed to act as an investor because of the inheritance and said the wife was disinterested in this. In mid-2005 he purchased the house at Property C for $449,000. He took out a mortgage to purchase the house. The property was on a large block of land, but was run-down. The husband bought this property with the intention of doing it up and renting it for income. The husband says since May 2010 he has managed the property; renting out the four bedrooms individually and carrying out regular maintenance on the property. He also says he carried out improvements to the property including having the kitchen and bathroom remodelled.
In August 2008 the parties purchased a property at Property B in [B] for $285,000. The husband says he has managed the property since May 2010 and that the property has been rented out for most of the period from the time of purchase until after separation when the husband needed to take the tenant to the Residential Tenancy Tribunal for non-payment of rent. After that, he moved into the property.
The husband says he has made significant contributions managing these properties and continued to do so after the parties separated without any assistance from the wife.
The husband’s affidavit filed 14 November 2014 details the money he has spent on the properties.
The wife denies being in poor health during the early period of their relationship. She said she had recovered from ovarian cancer and had two surgeries during the marriage. In 2005 she had a hysterectomy and there were some complications. She says that she has always been able to work by agreement and that she stayed home and was a full time mother. While she was at home with [X] she started studying for her specialist qualification.
She says she did most of the washing, ironing cooking and cleaning as well as much of the gardening.
Post separation the wife has had the care of [X]. The husband has been solely responsible for managing the parties’ real estate.
Gold sovereigns, coins and bars
The husband says he bought 128 gold sovereigns in late 1999, using his savings of between $8,000 and $10,000 because he was concerned about the Y2K predictions and the possibility of a financial crisis. The husband says the parties purchased a safe which the wife’s father installed at the [L] property. He says the wife had the key and the combination.
The husband says after he returned from Cairns, the wife suggested drawing up an inventory to convert the contents of the safe. The husband says that inventory was typed by the wife. That inventory is annexed and marked PRL 8 to the husband’s affidavits filed on 15 May 2014. It lists coins, various documents and other collectables including four 5 ounce gold bars.
The husband says he was unable to check the contents of the safe after the wife moved out on 3 November 2012 until 29 October 2013 because he did not have a key. The wife disputes that she had the only key and says the husband had another key and was able to access the safe post separation. The husband had a locksmith attend the home to open safe. The safe was empty.
The wife says she knew the husband had some gold sovereigns but did not know the details of them. She denies the husband had either 5 kilograms or 5 ounces of gold bullion. Mr Sweeney made much of the wife’s evidence at [73] of her affidavit where she says that the husband has some commemorative coins and gold sovereigns but does not have a detailed knowledge of them and was not aware of the existence of any gold bullion. Mr Sweeney points out that this is inconsistent with the wife’s case outline which puts in issue the existence of any gold including coins and sovereigns. The wife’s case outline states that “Gold bars, gold sovereign coins alleged by the husband, disputed in all respects by the wife.” It was put to her in cross-examination that she adopted that statement. She said the husband had coins he collected.
She says she has not been near the safe in years. She says the last time she saw anything in the safe was in May 2010 when the husband wanted to make a list. She denies typing it.
Mr Sweeney cross-examined the wife further about this issue when the hearing resumed in November 2014. The wife was shown the list which had a series of post-it-notes with numbers and it was acknowledged it was her handwriting. She conceded that the notes were hers. The notes are next to the list describing coins and various items. This is suggestive of the wife being involved in preparing that list. On the balance of probabilities I find that the wife did type the list. The wife also said when cross-examined again that she was aware that the husband had sovereigns that were silver and gold colour. I accept the wife had more knowledge of the collection than she was willing to admit.
I prefer the husband’s evidence to the wife’s with respect to the list; I find that the wife typed the list. The husband says he prepared a further list in September 2012 of what was in the safe from memory. He says that he purchased the gold ounces with the $15,000 on 27 March 2007. The husband was able to go into detail about what he had. I accept that the husband had a collection that included coins, sovereigns and ounces of gold. I have some doubts that the husband prepared the second list purely from memory but that does not mean that the wife did not have the opportunity to remove the contents of the safe. She was clearly planning her exit for some time – she could have removed the contents before having her father assist with her move. Therefore, her father’s evidence is not conclusive.
Ms C, the husband’s sister filed an affidavit to rebut the wife’s earlier evidence as to the non-existence of the gold. Significantly the wife did not require her for cross-examination.
I find that the wife knew about the existence of the gold, sovereigns and the coin collection. Her evidence was contradictory and unreliable.
The issue of value is more difficult to resolve. The husband estimates its value as between $80,000 to $100,000. The husband’s case is that the wife emptied the contents of the safe when she moved out. The husband says he did not have the key or the combination to access the safe. The husband places much significance on the fact that he invited the wife to attend the house with her lawyer and a locksmith so that the safe could be opened. She refused.
The husband significantly exaggerated the value of the shares he received saying they were worth $1,000,000 when Exhibit D shows a gross value of $680,000. This comes from the husband’s source documents. In light of the husband’s exaggeration, I am not able to simply accept his estimated value of the gold at $100,000. The Full Court in Chang v Su (2002) FLC 93-117 stated that the trial judge is entitled to take a more robust view of a party’s financial position when there has been non-disclosure. The husband says that the wife could have produced the gold and had it valued. That is true but that does not simply allow me to adopt the husband’s figure when I have doubts about his reliability as well.
In most circumstances, notional property or addbacks should be taken into account on a s.75(2)(o) consideration rather than artificially addback to the balance sheet. The High Court’s statement in Stanford & Stanford (2012) 247 CLR about the Court being required to identify the parties’ existing assets and liabilities supports this view. The Full Court in Bevan & Bevan (2013) FLC 93-545 made obiter comments about addbacks at [75] that also lend support to this. However, the Full Court has not had occasion to squarely consider addbacks since the decision of Stanford and Bevan. Those decisions do not state that addbacks are never appropriate.
In the circumstances, I think it is just and equitable between the parties to attribute a value of $50,000 to the gold and to further find that the wife has it in her possession.
I also find that it is appropriate to add back this amount because I find it is as a result of non-disclosure and the sum is such that in the context of the overall pool, to do so will not distort the pool.
Post separation
The wife purchased a home at Property S, post separation. She remains living in that property with [X]. She purchased the home for $651,093.50 including costs. She took out a loan for $495,000 and funded $143,000 from joint funds and $10,000 from her own account. She says she has undertaken renovations on the property.
The husband has sold the shares post separation and used those funds to buy a US real estate course, and to carry out improvements on the properties he was managing and living expenses.
Section 75(2) factors
The husband says he has been receiving psychological assistance and counselling since 2008. The husband disclosed in his May 2014 affidavit that he [left employment] effective from 30 June 2014.
The husband was granted leave to file an updated affidavit as to his financial circumstances before the resumption of the hearing in November 2014. In that affidavit filed on 14 November 2011, he outlines his attempts to find employment post [occupation omitted]. He has had some part-time work as a [omitted] and obtained some casual work with the [omitted]. He deposes to applying for a variety of jobs both in the [omitted] field but also in other fields [omitted]. I accept that the husband has made genuine attempts to find a job and is now working in both [omitted] fields.
The husband refers to his mental health taking a toll on him.
Further, the husband said that in order to secure income for the future, he invested in a course to train in the sale and purchase of real estate in the USA. He funded the course through the sale of shares he received from his late father. He spent $36,427.50 on the course. He bought the Diamond package which is a two day training course that takes place in Las Vegas, Nevada. He has not yet travelled to Nevada to undertake the course. He says he has opted for the diamond course which offers lifetime support. At the same time as spending such a significant sum he sought to agitate spouse maintenance. The husband had managed two real estate investment properties but otherwise has no experience in real estate. The husband says after the amount of rejections he’s received he feels that the only way he will be able to earn a living is by being his own boss. He says with the course he will be able to sell real estate in America from Australia. It seems somewhat fanciful and reckless to spend such a sum of money when at the same time he is saying that he will need maintenance. This may well be something that is raised in further litigation should the husband file an application for maintenance after these proceedings are concluded.
The husband saw Dr K after the hearing was aborted in May 2014.
Dr K prepared a report which is annexed to his affidavit filed on 25 July 2014. He was not required for cross-examination. Dr K recorded that the husband presented with acute situational stress and adjustment disorder with depression over the failed marriage. He said that the husband would not be able to participate in the proceedings for another two or three months. He anticipated that the husband would be able to work regularly in the future.
Since his employment with [omitted] finished in June 2014 the husband has obtained various casual jobs for varying periods of time including a 3 week job with the [omitted] for which he was paid $9,000 tax free.
The wife’s income has continued to rise significantly post-separation. There is no reason to think that the wife will not be able to continue to earn a high income which is currently in excess of $300,000. She was earning over $170,000 in June 2012. The husband was earning over $100,000 per annum until June 2014.
Whilst the husband has capacity it is clear that the wife has a greater earning capacity than he does and this is likely to remain the position. This requires an adjustment in the husband’s favour.
The wife has sole care of [X] currently and she is likely to continue to have his primary care. This is a factor in the wife’s favour.
The husband has paid child support although has not paid child support more recently because he says he is waiting for an adjustment to the assessment.
Presentation of witnesses
Neither party was an impressive witness. It was necessary to direct both of them to answer the question asked of them on several occasions. Both appeared more concerned with making sure their version came across rather than focusing on the questions they were being asked.
At times Ms Livingston was evasive. She chose her words carefully. She also failed to disclose her true income to the Child Support Agency when she made an application for a change of assessment.
Mr Livingston was verbose and expansive and he often made self-serving speeches instead of answering the question he was asked. He was prone to exaggeration (an example of this was his estimate of the value of the shares he received from his father). Mr Livingston was very keen in painting himself as a dedicated husband and father victimised by a vindictive wife.
Legal principles with respect to property and their application to the facts in the case
Part VIII of the Family Law Act1975 is the part of the Act dealing with property, spousal maintenance and maintenance agreement. The major provisions relating to marital property division are contained in ss.79(1); 79(2); 79(4); & 75(2) of the Act.
Pursuant to s.79(1) the Court is authorised to make such order as it considers appropriate in order to alter the interest of the parties to a marriage in relevant property.
The expression “property” is defined in s.4(1) in relation to the parties to a marriage or either of them as meaning “…property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.”
Pursuant to s.79(2) the Court is actively prevented from making such an order unless it is satisfied that it is just and equitable to do so in all the circumstances prevailing. This follows from the use of the prohibitory words “shall not” in the relevant section.
S.79(4) provides the mechanics of how a Court is to make an order altering marital property interests.
Paras.(a), (b) and (c) categorise contributions made by marital partners, which are relevant. Paragraph (d) directs the Court to take into account any order regarding the earning capacity of either party to the marriage concerned.
Para.(e) directs the Court to consider a list of matters contained in s.75(2), which are germane to spousal maintenance or the prospective positions of the parties concerned by reference to their respective financial resources, means and needs. Finally, paragraphs (f) and (g) apply to child support and previously made parenting orders, as relevant. There is some overlap between these various provisions and not all will be applicable in every case.
Until the High Court decision in Stanford, the position in respect of the process to be applied to the resolution of matrimonial property cases was said to be well settled with a preferred approach as set out by the Full Court in Hickey & Hickey & Attorney-General (Intervener) (2003) FLC 93-143 at 78,386 [39].
The High Court considered the operation of s.79 in the matter of Stanford. In this case, the majority stated at [35]-[36] that:
“It will be recalled that s 79(2) provides that "[t]he 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. Section 79(4) prescribes matters that must be taken into account in considering what order (if any) should be made under the section. The requirements of the two sub-sections are not to be conflated. In every case in which a property settlement order under s 79 is sought, it is necessary to satisfy the court that, in all the circumstances, it is just and equitable to make the order.”
The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.” [Footnotes omitted]
The High Court found three fundamental propositions with respect to the application of s.79, which can be summarised as follows:
1.Firstly, in order to ascertain whether it is just and equitable to make a property settlement order, it is necessary to identify the existing legal and equitable interests of the parties in the property. The High Court emphasised the word ‘existing’.
2.Secondly, although s.79 gives the court a broad power to make property settlement orders it may not be exercised in an unprincipled fashion. There must be no assumption that the parties’ interests are or should be different to their existing interests.
3.Thirdly, when considering whether making a property settlement order is just and equitable the court must not assume that one or the other party has the right to a property adjustment order. The court must give separate consideration to s.79(2) in addition to the matters referred to in s.79(4).
In Stanford the High Court indicated that, in the vast majority of matrimonial property cases, the requirements of s.79(2) will be readily satisfied, largely as a result of a consideration of the circumstances of the parties concerned, particularly the nature of their separation.
The High Court also pointed out that what is just and equitable is different in every case.
Stanford casts doubt on the correctness of adding back notional amounts to the pool for the purposes of property settlement. The Full Court confirmed this in Bevan & Bevan. The Full Court said at paragraph [79]:
“We observe that “notional property”, which is sometimes “added back” to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute “property of the parties to the marriage or either of them, and thus is not amenable to alteration under s 79. It is important to deal with such disposals carefully, recognising the assets no longer exist, but that the disposal of them forms part of the history of the marriage – and potentially an important part. As the question does not arise here, we need say nothing more on this topic, save to note that s 79(4) and in particular s 75(2 (o) gives ample scope to ensure a just and equitable outcome when dealing with the unilateral disposal of property.”
Both parties seek property adjustment orders. Some of their property is in joint names. I am satisfied that it is just and equitable to make property orders, adjusting the parties’ legal and equitable interests.
In Pierce v Pierce (1998) FLC 92-844 at para.28 the Full Court said:
“In our opinion it is not so much a matter of erosion of contribution but a question of what weight is to be attached, in all the circumstances, to the initial contribution. It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution, in this case of the husband, regard must be had to the use made by the parties of that contribution.”
In Williams & Williams [2007] FamCA 313 the Full Court states at the paragraph 26:
“We think there is force in the proposition that a reference to the value of an item as at the date of the commencement of cohabitation without reference to its value to the parties at the time it was realised or its value to the parties at the time of trial, if still intact, may not give adequate recognition to the importance of its contribution to the pool of assets ultimately available for distribution between the parties Thus where the pool of assets available for distribution between the parties consists of say an investment portfolio or a block of land or a painting that has risen significantly in value as a result of market forces, it is appropriate to give recognition to its value at the time of hearing of the time it was realised rather than simply pay attention to its initial value at the time of commencement of cohabitation. But in doing so it is equally as important to give recognition to the myriad of other contributions that each of the parties has made during the course of their relationship.”
The leading case with respect to the treatment of superannuation is
C & C(2005) FLC 93-220. Where there is significant superannuation it is often appropriate to use the two pool approach. In this case, the amount of superannuation is so small I will include the parties’ superannuation interests in one pool.
The parties have many years before they reach retirement and the superannuation pool is significant. The husband has 48% of the superannuation pool. Neither party seeks a superannuation splitting order. In circumstances where neither party seeks a splitting order and where they hold similar amounts, it is appropriate in the circumstances of this case to use the one pool approach.
There is some controversy between the parties about the treatment of the capital gains tax liabilities. The husband seeks that the capital gains tax on the two properties the parties agree he will retain be taken into account either as liabilities or pursuant to s.75(2)(o). Rosati v Rosati (1998) FLC 94-804 is the leading case on this topic. The Full Court said at [6.36] the following:
It appears to us that although there is a degree of confusion, and possibly conflict, in the reported cases as to the proper approach to be adopted by a court in proceedings under s.79 of the Act in relation to the effect of potential capital gains tax, which would be payable upon the sale of an asset, the following general principles may be said to emerge from those cases:-
(1)Whether the incidence of capital gains tax should be taken into account in valuing a particular asset varies according to the circumstances of the case, including the method of valuation applied to the particular asset, the likelihood or otherwise of that asset being realised in the foreseeable future, the circumstances of its acquisition and the evidence of the parties as to their intentions in relation to that asset.
(2)If the Court orders the sale of an asset, or is satisfied that a sale of it is inevitable, or would probably occur in the near future, or if the asset is one which was acquired solely as an investment and with a view to its ultimate sale for profit, then, generally, allowance should be made for any capital gains tax payable upon such a sale in determining the value of that asset for the purpose of the proceedings.
(3)If none of the circumstances referred to in (2) applies to a particular asset, but the Court is satisfied that there is a significant risk that the asset will have to be sold in the short to mid term, then the Court, whilst not making allowance for the capital gains tax payable on such a sale in determining the value of the asset, may take that risk into account as a relevant s.75(2) factor, the weight to be attributed to that factor varying according to the degree of the risk and the length of the period within which the sale may occur.
(4)There may be special circumstances in a particular case which, despite the absence of any certainty or even likelihood of a sale of an asset in the foreseeable future, make it appropriate to take the incidence of capital gains tax into account in valuing that asset. In such a case, it may be appropriate to take the capital gains tax into account at its full rate, or at some discounted rate, having regard to the degree of risk of a sale occurring and/or the length of time which is likely to elapse before that occurs.
It is not disputed that capital gains tax needs to be paid on the properties which have sold or are in the process of being sold. The controversy is over whether potential capital gains tax should be taken into account over the properties which the husband is going retain, that is the Property C property which has an estimated CGT of $55,232 and the Property M property which has an estimated CGT of $150,255. The husband has moved into the Property C property.
With respect to the Property C and Property M properties, I am not satisfied that there is a significant risk that either property will have to be sold in the short or medium term. The husband will have these properties mortgage free. He has already invested a significant sum in a real estate course which presumably he is satisfied will enable him to earn a decent income. He will also continue to have the rental income from the [M] property.
I am not satisfied that the fourth limb referred to be the Full Court in Rosati is triggered. The husband intends to live in the Property C property. There is no evidence to suggest that he has any intention to sell the property in the near or even the medium future. The husband will also retain the [M] property and will continue to receive an income from it. He will receive some cash from the sale of the [B] property although that is likely to take some time to sell.
In all of the circumstances, I had not satisfied that it would be just and equitable to make an adjustment for the CGT on these two properties.
Conclusion with respect to property
The husband’s initial contributions and the inheritance are significant. They did act as a springboard and represent a significant portion of the parties’ wealth. The parties lived in one of his properties for the first 5 years of their marriage and received rental income throughout. The wife says the husband should receive a 10% adjustment in his favour for his initial contributions. The husband says he should receive an adjustment of 20% to 25% for his initial contributions.
I find that the husband should receive an adjustment of 15% for his initial contributions and inheritance. Apart from these contributions I find that the parties made equal contributions during and after the marriage.
The husband’s written submissions are not clear on what percentage adjustment there should be for s.75(2) factors but clearly states that the overall adjustment should be 70% to 75% in his favour. The wife says that there should be a 5% adjustment in her favour for s.75(2) factor.
I do not accept the wife’s submission that the husband has a significantly greater earning capacity than he is currently earning. There is no evidence to support that. Even if the husband is again able to earn what he was previously, the wife’s income is three times as high. Even though she will have the care of [X] for the next 5 years that does not outweigh the significantly higher earning capacity that she has. The husband will retain two unencumbered properties; one he will live in and the other he can continue to derive an investment income from. I find that there should be a further adjustment in the husband’s favour of 5%.
Overall, the husband will receive 70% of the property.
The wife will retain the following:
Property S equity $172,000.00
Toyota Rav4 $14,000.00
Shares$24,782.00
AMP Investment $26,548.15
Wife’s superannuation $311,186.28
Partial property settlement $204,288.54
Gold $50,000.00
$802,804.97
The husband will retain the following:
Property C property $720,000.00
Property M property $835,000.00
Cars $4,000.00
Shares $57,208.00
Superannuation $281,751.64
Partial property settlement $204,288.54
$2,102,248.18
The wife has 25% of the property pool in her possession. The husband’s lawyers hold $75,000 in their trust account. Darwin Conveyancing holds $922. These sums should be applied to reduce the CGT owing on the sale of the Property H, property. The shortfall will need to come from the proceeds of sale from the [B] property.
The [B] property proceeds of sale should be divided as follows:
(1) Payment of the costs of sale including agents’ commission and conveyancing fees.
(2) Payment to the husband of $2000 for the wife’s share of the sale costs of the Property H, property.
(3) Estimated remaining CGT owing on the sale of the Property H, property of $6,307.
(4) Land tax owing on the Property H, property of $5,084.74.
(5) Estimated CGT of $1,825 on the [B] property.
(6) Estimated CGT owing on sale of the Property L property of $22,181.
(7) Balance to be divided between the husband and wife such that the wife receives 30% and the husband receives 70% of the property pool.
At the end of the hearing, counsel for the parties indicated that they would send a consent minute to Chambers addressing the sale of the [B] property within the next few days. Unfortunately, this did not materialise. No explanation has been given. The lawyers did not answer an enquiry from my chambers about this. Rather than delay the judgment I have dealt with the sale of the [B] property in the orders at the beginning of this judgment. I am satisfied that the financial orders are just and equitable in all of the circumstances of this case.
I certify that the preceding one hundred and ninety (190) paragraphs are a true copy of the reasons for judgment of Judge Harland
Associate:
Date: 8 July 2015
Key Legal Topics
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Family Law
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Property Law
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Jurisdiction
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Remedies
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Statutory Construction
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