MCBRIDE & MCBRIDE

[2014] FamCA 552

FAMILY COURT OF AUSTRALIA

MCBRIDE & MCBRIDE [2014] FamCA 552

FAMILY LAW – CHILDREN – Best interests – Child has meaningful relationships with both parents – Relocation – Where either future living arrangement proposed does not impinge on the child’s best interests

FAMILY LAW – CHILDREN – Parental responsibility – Presumption of equal shared parental responsibility applied – Child to live with parents for equal time provided the father lives in sufficient proximity to the mother – Where if the father does not live in sufficient proximity to the mother the parenting regime reverts to one in which the child lives with the mother and spends substantial and significant time with the father

FAMILY LAW – PROPERTY SETTLEMENT – Where there is a huge disparity between the parties’ respective interests in property and superannuation – Assets and superannuation considered separately – Where father made substantial contributions but mother’s future needs greater – Mother entitled to 35 per cent of the assets – Father entitled to 65 per cent of the assets – Superannuation interests split equally

Child Support (Assessment) Act 1989 (Cth)
Evidence Act 1995 (Cth) ss 69, 135, 183
Family Law Act 1975 (Cth) ss 4, 60B, 60CA, 60CC, 61B, 61DA, 62B, 64B, 65AA, 65DA, 65DAA, 65DAC, 65DAE, 65D, 68B, 75, 79, 81, 90MT, 90MZD, 106A, 114
Family Law Rules 2004 (Cth) rule 14.06
Family Law (Superannuation) Regulations 2001 (Cth)

Aleksovski v Aleksovski (1996) FLC 92-705; (1996) 20 Fam LR 894
AMS v AIF (1999) 199 CLR 160
Bevan & Bevan [2013] FamCAFC 116; (2013) 49 Fam LR 387
Burke v LFOT Pty Ltd (2002) 209 CLR 282
Chang v Su (2002) FLC 93-117; (2002) 29 Fam LR 406
Goode & Goode (2006) FLC 93-286; (2006) 36 Fam LR 422
Hepburn & Noble (2010) FLC 93-438
Malcolm v Monroe (2011) FLC 93-460
Marriage of Bonnici (1992) FLC 92-272; (1991) 15 Fam LR 138
Marriage of Burke (1993) FLC 92-356; (1992) 16 Fam LR 324
Marriage of Coghlan (2005) FLC 93-220; (2005) 33 Fam LR 414
Marriage of Figgins (2002) FLC 93-122; (2002) 29 Fam LR 544
Marriage of Kessey (1994) FLC 92-495; (1994) 18 Fam LR 149
Marriage of Wall (2002) FLC 93-110; (2002) 29 Fam LR 1
McCall v Clark (2009) FLC 93-405
MRR v GR (2010) 240 CLR 461
Pierce v Pierce (1999) FLC 92-844
Sampson v Hartnett (No.10) (2007) FLC 93-350; (2007) 38 Fam LR 315
Smith v NSW Bar Association (No 2) (1992) 176 CLR 256
Stanford v Stanford (2012) FLC 93-518
Taylor v Barker (2007) FLC 93-345; (2007) 37 Fam LR 461
U v U (2002) 211 CLR 238
Vetter v Lake Macquarie City Council (2001) 202 CLR 439
Weir & Weir (1993) FLC 92-338; (1992) 16 Fam LR 154

APPLICANT: Ms McBride

RESPONDENT: Mr McBride

FILE NUMBER: NCC 1710 of 2013

DATE DELIVERED: 23 July 2014

PLACE DELIVERED: Newcastle

PLACE HEARD: Newcastle

JUDGMENT OF: Austin J

HEARING DATE: 7, 8 & 22 July 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr G. Levick

SOLICITOR FOR THE APPLICANT: Ramsland Laidler Solicitor

COUNSEL FOR THE RESPONDENT: Mr M. Graham

SOLICITOR FOR THE RESPONDENT: Catalyst Family Lawyers

Orders

Parenting Orders

1. All former orders relating to the child B, born …, (“the child”) are discharged.

2. The parties shall have equal shared parental responsibility for the child.

3. While ever the father lives within a radius of 30 kilometres from the mother’s residence, unless otherwise agreed, the child shall live with:

   (a)The mother:

   (i)From the time of these orders until the child’s conclusion of school on the first Friday thereafter; and

   (ii)From the child’s conclusion of school on the second Friday after these orders are made until the child’s conclusion of school on the third Friday after these orders are made, and then every alternate week thereafter;

   (b)       The father:     

   (i)From the child’s conclusion of school on the first Friday after these orders are made until the child’s conclusion of school on the second Friday after these orders are made, and every alternate week thereafter.

4. While ever the father lives outside a radius of 30 kilometres from the mother’s residence, unless otherwise agreed:

   (a)The child shall live with the mother; and

   (b)The parties shall take all reasonable steps to ensure the child spends time with the father:

   (i)During school terms, each alternate weekend from the child’s conclusion of school on Friday until the child’s commencement of school on Monday (or Tuesday if Monday is a public holiday), commencing on the first Friday of each school term;

   (ii)During the Spring, Autumn, and Winter school holidays, for the first half of such holidays in every even numbered year, and for the second half of such holidays in every odd numbered year; and

   (iii)During the Summer school holidays, for the first half of such holidays in years when the holidays commence in even numbered years and for the second half of the holidays in years when the holidays commence in odd numbered years.

5. For the purpose of implementation of Orders 4(b)(ii) and 4(b)(iii) hereof, the school holidays are deemed to commence at the child’s conclusion of school on the last day of school term, the holidays are deemed to end at the child’s commencement of school on the first day of the new school term, and the mid point is the day and time halfway between those first and last days.

6. Orders 3 and 4 hereof are suspended during the following periods:

   (a)From 3.00 pm on Christmas Eve until 3.00 pm on Boxing Day each year, during which period the child will spend time with the mother from 3.00 pm on Christmas Eve until 3.00 pm on Christmas Day, and with the father from 3.00 pm on Christmas Day until 3.00 pm on Boxing Day in even numbered years, with the same arrangements in reverse in odd numbered years; and

   (b)Between 5.00 pm Saturday and the child’s commencement of school the following Monday on each Mother’s Day and Father’s Day weekends, during which periods the child shall spend time with the mother on the Mother’s Day weekend and with the father on the Father’s Day weekend.

7. Unless otherwise agreed, for the purposes of implementing Orders 3 and 4 hereof, the parties shall respectively ensure the child’s:

   (a)Collection from:

   (i)School, whenever the child’s residence or expenditure of time with a party is to commence at or about the conclusion of school during school term; or otherwise

   (ii)The other party’s residence.

   (b)Return to:

   (i)School, whenever the child’s residence or expenditure of time with a party is to conclude at or about the commencement of school during school term; or otherwise

   (ii)The other party’s residence.

8. Unless otherwise agreed, the parties shall take all reasonable steps to ensure that the child communicates privately by telephone with:

   (a)The father each Wednesday at 6.00 pm when the child is living with the mother, and for that purpose the father shall telephone the child on the telephone number provided to him by the mother and the mother shall ensure that the child is able to receive the father’s calls on that number at that time;

   (b)The mother each Wednesday at 6.00 pm when the child is either living or spending time with the father, and for that purpose the mother shall telephone the child on the telephone number provided to her by the father and the father shall ensure that the child is able to receive the mother’s calls on that number at that time; and

   (c)The parent with whom the child is not then staying, on the child’s birthday at 6.00 pm, and for that purpose the parent with whom the child is not staying shall telephone the child on the telephone number provided by the other parent for that purpose and the parent with whom the child is staying shall ensure that the child is able to receive the other parent’s calls on that number at that time.

9. Each party is restrained from denigrating the other in the presence or hearing of the child and from permitting the child to remain in the presence or hearing of another person denigrating the other.

10. Each party shall forthwith inform the other, and keep the other informed, in writing of their respective current residential address, landline telephone number, mobile telephone number, and email address.

11. Unless otherwise agreed, the parties shall forthwith take all reasonable steps to ensure the child is enrolled at and attends the K Region Grammar School.

12. Leave is granted to the parties to furnish a sealed copy of these orders to the principal of any school attended by the child.

13. Pursuant to s 65DA(2) and s 62B of the Family Law Act, particulars of the obligations that these orders create, particulars of the consequences that may follow contravention of these orders, and details of assistance to comply with these orders are set out in the attached Fact Sheet, which forms part of these orders.

14. Any and all outstanding applications pursuant to Part VII of the Family Law Act are dismissed.

Property Settlement Orders

1. The parties shall do all such acts and things and sign all such documents as may be necessary to effect the sale of the following properties (“the properties”) on the conditions set out in these orders:

   (a)Folio Identifier …, being the property more commonly known as C Street, Suburb D , NSW (“Suburb D ”); and

   (b)Folio Identifier …, being the property more commonly known as E Street, Suburb F, NSW (“Suburb F”).

2. For the purposes of implementation of Order 15 hereof:

   (a)The properties shall be listed for sale within 14 days of the date of these orders;

   (b)The properties shall be listed for sale by private treaty with the licensed real estate agents agreed between the parties, and in default of agreement, with the agents chosen by ballot from the respective choices of the parties;

   (c)The listing prices for the properties shall be as agreed between the parties, and in default of agreement, the listing prices nominated by the listing agents;

   (d)In the event of either property not being sold within 3 months from the date of these orders the unsold property shall be put by the parties to sale by auction on the following terms:

   (i)The auctioneer shall be agreed between the parties, and in default of agreement, the auctioneer shall be chosen by ballot from the respective choices of the parties;

   (ii)The auction shall take place within 6 weeks of the deadline date for sale by private treaty; and

   (iii)The reserve price shall be as agreed between the parties, and in default of agreement, the reserve price nominated by the auctioneer.

   (e)In the event of either property not being sold by auction or private negotiation within a further 7 days then the parties shall put the unsold property to successive auctions within further 6 weeks periods until sold, otherwise upon the same terms and conditions as applied to the first auction; and

   (f)Pending completion of the sales, the father shall pay all mortgage repayments, Council and water rates, maintenance levies, and insurance premiums in respect of both properties as and when they fall due.

3. Upon completion of the sale in respect of each property the parties shall cause the proceeds of sale to be applied as follows:

   (a)First, to pay all costs, commissions, and expenses of the sale and to pay any Council and water rates and maintenance levies outstanding in respect of the property;

   (b)Second, to discharge the mortgage and any other encumbrance affecting either property, including but not limited to:

   (i)The loan account with the Westpac Bank in the name of one or both parties secured by mortgage (registered number …) over Suburb F;

   (ii)The Investment Loan account number … with the Westpac Bank in the name of the mother secured by mortgage over Suburb F and Suburb D.

   (c)Third, to pay to the mother:

   (i)If Suburb F and Suburb D sell for combined contract prices totalling $1,950,000 or more – the sum of $460,831, plus the amount representing 35 per cent of the surplus;

   (ii)If Suburb F and Suburb D sell for combined contract prices totalling less than $1,950,000 – the sum of $460,831, less the amount representing 35 per cent of the deficit.

   (d)Fourth, to discharge the loan of the father, guaranteed by the mother, which is secured by mortgage over the real property comprising Folio Identifier …, being the property more commonly known as G Street, Suburb H, NSW (“Suburb H”); and

   (e)Fifth, to pay to the balance then remaining to the father.

4. The father is declared the sole legal and beneficial owner (as between the parties) of Suburb H.

5. The father shall be solely liable for and shall indemnify the mother, and keep her indemnified, against all rates, taxes, statutory charges, mortgage repayments, and other outgoings and liabilities affecting or relating to Suburb H.

6. Declaration that the trustee of the MLC Super Fund has been accorded procedural fairness in respect of these superannuation splitting orders, and orders ancillary thereto.

7. Order that these orders are binding upon the trustee of the MLC Super Fund.

8. Order, pursuant to s 90MT(2) of the Family Law Act, that for the purpose of these orders the value of the father’s interest in the MLC Super Fund (Account number …) is determined to be $153,696, being a value with which the parties agree.

9. Order, pursuant to s 90MT(1)(b) of the Family Law Act, that whenever a splittable payment becomes payable in respect of the father’s interest in the MLC Super Fund:

   (a)The mother is entitled to be paid an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth) using a base amount at the date of these orders of $40,228; and

   (b)There be a corresponding reduction in the father’s entitlement to his interest in the Fund.

10. Order that these orders shall have effect from the operative time, and for that purpose the operative time shall be 4 days from the date of service of these orders upon the trustee of the Fund.

11. Unless otherwise provided:

    (a)Each party shall be the sole legal and beneficial owner (as between the parties) of all other assets in their respective possession as at the date of these orders, and for that purpose bank accounts are deemed to be in the possession of the person named as the account holder, investment accounts are deemed in the possession of the named investor, and superannuation entitlements are deemed in the possession of the superannuant; and

    (b)Each party shall be solely liable for and shall indemnify the other against any and all debts attaching or relating to the property in their respective possession, and any debts in their respective sole names, including any individual liability for capital gains tax arising out of the sale by the parties of real property pursuant to these orders.

12. In the event of either party refusing or neglecting to sign within 7 days of a written request to do so any document necessary to implement the terms of these orders the Registrar of the Family Court of Australia at Newcastle is empowered to execute such documents on behalf of the parties pursuant to s 106A of the Family Law Act.

13. Any and all outstanding applications pursuant to Part VIII of the Act are dismissed.

Costs

1. Costs are reserved for 28 days.

IT IS NOTED that publication of this judgment by this Court under the pseudonym McBride & McBride has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT NEWCASTLE

FILE NUMBER: NCC 1710 of 2013

Ms McBride

Applicant

And

Mr McBride

Respondent

REASONS FOR JUDGMENT

Introduction

1. The applicant mother and respondent father are in dispute about both the parenting arrangements for their only child, who is now nearly seven years old, and the division of their property interests.

2. The parties commenced their cohabitation in April 2003 and finally separated in April 2012.

3. The child was born in 2007 and they were married in 2008. They are now divorced.

4. At the beginning of their relationship the parties lived in Sydney, where they purchased a residence, but they purchased another property and subsequently moved to the J Region of NSW in about September 2011.

5. Following their separation several months later in April 2012, the mother and child remained in occupation of the former matrimonial home. The father vacated the property and began to live temporarily with the paternal grandmother in another property owned by him on the J Region.

6. Upon separation the parties reached agreement about the child living with them for equal time, though they have different perspectives about how well that regime has worked for the child. The father wants to retain that parenting regime but the mother desires its abandonment.

7. Both parties have since entered into new relationships, but the mother’s new relationship is more advanced than the father’s.

8. The mother conceived a child with her new partner (“Mr I”) and their child was born in 2014. The mother now splits her time living between the former matrimonial home on the J Region and the rented residence of Mr I in the K Region of NSW, pending the resolution of these proceedings.

9. The father now lives independently of the paternal grandmother, but still on the J Region in rented accommodation. He does not yet live with his new partner (“Ms L”), who lives in Sydney, but they plan to begin cohabitation after these proceedings.

The evidence

1. The mother relied upon:

   (a)Her affidavit filed on 19 June 2014;

   (b)Her financial statement filed on 30 August 2013; and

   (c)The affidavit of her partner, Mr I, filed on 19 June 2014.

2. The father relied upon:

   (a)His affidavit filed on 20 June 2014;

   (b)His financial statement filed on 8 November 2013;

   (c)The affidavit of his partner, Ms L, filed on 19 June 2014; and

   (d)The affidavit of the paternal grandmother filed on 19 June 2014.

3. The parties also relied upon the two memoranda of the Family Consultant prepared on 16 October 2013 and 5 December 2013. The Family Consultant was not required for cross-examination, so the contents of those memoranda may be safely accepted as correct.

Parenting dispute

Proposal of mother

1. The mother proposed the orders set out within her Amended Application filed on 24 June 2014. In essence, she sought the allocation of equal shared parental responsibility for the child to the parties, for the child to live with her, and for the child to spend “substantial and significant time” with the father.

2. Her underlying proposal, which was the real irritant between the parties, was to relocate her residence with the child from the J Region to the K Region.

Proposal of father

1. The father proposed the orders set out within his Response filed on 8 November 2013. He agreed the parties should have equal shared parental responsibility for the child, but his proposal about the child’s living arrangements was dependent upon the distance between the parties’ households.

2. If the parties remained living in proximity to one another in the J Region, he proposed that the child live for “equal time” with each party. If the mother instead chose to move away from the J Region then he proposed the child live with him and spend “substantial and significant time” with the mother.

The issue

1. Since the mother’s professed position was she would not relocate her residence away from the J Region without the child,[1] the parenting dispute therefore narrowed to whether the child would either:

   (a)Live for equal time with each party, which would necessitate the parties continuing to live in sufficient proximity to one another either on the J Region or in the K Region for that outcome to be reasonably practicable, or

   (b)Live predominantly with the mother in the K Region and spend substantial and significant time with the father.

   [1] Family Consultant’s memo 5/12/13, page 3

1. The option of the child living predominantly with the father and spending substantial and significant time with the mother was foreclosed by the mother’s refusal to move away from the J Region without the child.

Applicable legal principles

1. Orders in respect of children are regulated under Part VII of the Family Law Act (“the Act”). The Act defines the meaning of a “parenting order” (s 64B).

2. When called upon to make a parenting order, the Court is enjoined to bear in mind both the objects of the legislation and the principles which underpin those objects (s 60B) in determining the nature of the parenting orders which ought properly be made (s 65D).

3. When making parenting orders the Court is mandated to regard the child’s best interests as the paramount consideration (ss 60CA, 65AA). The Act specifies with precision the criteria which the Court must contemplate in arriving at a conclusion as to what is in the best interests of the child (s 60CC).

4. The Court is required to apply a rebuttable presumption that it is in the best interests of a child for the child’s parents to be allocated equal shared parental responsibility for the child (s 61DA). Parental responsibility is defined to encompass all duties, powers, responsibilities and authority conferred by law upon parents (s 61B). The legislation dictates the manner in which shared parental responsibility is to be exercised in respect of decisions relating to major long-term issues concerning the child (s 65DAC), being matters such as education, religion, culture, health, name, and changed living arrangements (s 4), and also in respect of decisions which do not relate to such major long-term issues (s 65DAE).

5. However, the presumption of equal shared parental responsibility does not apply in certain circumstances, including in instances of child abuse and family violence (s 61DA(2)), and the presumption may be rebutted if the Court is satisfied it would not be in the best interests of the child for the parents to have equal shared parental responsibility for the child (s 61DA(4)). The presumption applies to the allocation of parental responsibility and not to the amount of time the child should spend with each parent.

6. In the event an order is made allocating equal shared parental responsibility, either presumptively or otherwise, the Court is then obliged to consider both the advisability and practicability of the child living for equal time with both parents, or alternatively, living primarily with one and spending substantial and significant time with the other (s 65DAA).

7. If the presumption of equal shared parental responsibility does not apply, or is successfully rebutted, and a different form of parental responsibility order is made, then the Court’s discretion is at large in the determination of the parenting orders warranted, although that discretion must still be exercised within the parameters of the prevailing legislative provisions.

8. The principles outlined above have been authoritatively examined in Goode & Goode (2006) FLC 93-286 and MRR v GR (2010) 240 CLR 461.

Best interests of child – primary considerations (s 60CC(2))

1. As would be obvious from the parties’ competing parenting proposals, there was much common ground between them, which was of primary importance in the proceedings.

2. As to s 60CC(2)(a) of the Act, the child enjoys meaningful relationships with both parties from which she derives benefit. That should remain the case. According to the Family Consultant, she is lucky enough to have “close and loving relationships” with “two exceptional parents”.[2]

   [2] Family Consultant’s memo 5/12/13, page 2

3. As to s 60CC(2)(b) of the Act, there is no need to protect the child from any physical or psychological harm she might suffer through subjection or exposure to any abuse, neglect, or family violence. She is not threatened by any such risk of harm.

4. The primary considerations do not, therefore, favour one party’s proposal over the other’s.

Best interests of child – additional consideration (s 60CC(3))

1. The parties have consensually implemented an “equal time” living arrangement for the child since their separation over two years ago.

2. Such an arrangement apparently suits the child. Her views were canvassed by the Family Consultant, but the child is equally content with both parties. She told the Family Consultant it was “too hard to choose where to live”.[3] Her views are not therefore influential, even if she did have the maturity for her views to carry weight, which she does not.

   [3] Family Consultant’s memo 5/12/13, page 2

3. The mother is dissatisfied with continuation of the equal time regime, but in truth, her dissatisfaction arises from recent developments that pertain to her interests rather than the child’s.[4] So much was proven when her counsel conceded in final submissions she would be content to abide by an equal time regime, so long as she could live in the place of her choosing. Her complaints about the equal time regime, in so far as they relate to the child, were relatively minor.

   [4] Mother’s affidavit, paras 75-92

4. None of the submissions made by the mother’s counsel directly engaged the factors prescribed by s 60CC(3) of the Act. It was expressly conceded the “gender affinity” between the child and the mother, mentioned by the Family Consultant,[5] was not a persuasive factor.

   [5] Family Consultant’s memo 5/12/13, page 3

5. Conversely, the father is satisfied with continuation of the equal time regime, but equally, his satisfaction is due to the regime’s suitability to him. The advantages he perceives in such a regime and the disadvantages of any change to it really reflect his wishes, not the child’s wishes or her best interests.[6]

   [6] Father’s affidavit, paras 7, 9-10

6. The only factor discretely addressed by the father’s counsel as a consideration of relevance to s 60CC(3) of the Act was that prescribed by s 60CC(3)(d) – the likely effect upon the child of her separation from the father and the paternal grandmother. It was submitted the effect upon the child would be deleterious if she only spends time with the father for five nights per fortnight instead of living with him for seven nights per fortnight, but that submission only has superficial attraction.

7. The child’s relationships with both parties are so strong that, to her, it hardly matters whether she spends five, six, or seven nights of every fortnight with each of them. Her relationships with them will probably remain as strong regardless of whether she spends as few as five or as many as seven nights per fortnight with each of them. The father conceded the child had an equally strong relationship with the mother, even though he deposed the child lived with the mother for only 40 per cent of the time for a period.[7] It must logically follow that he accepts the child would also retain her strong relationship with him even if she lives with him for a little less than equal time.

   [7] Father’s affidavit, para 68

8. The father contended any change to the existing arrangements would likely adversely affect the child, but that conclusion is not reasonably open. Change is inevitable in every child’s life, even though stability and routine may be generally desirable. Things changed for the child in the past when the parties separated and the family no longer occupied a common residence, when the paternal grandmother began caring for her on Sunday nights, when she started pre-school, when she started school, and when she was introduced to the parties’ respective new partners. Since separation the child has had to adjust to the parties’ decisions about when she would live with them and travel overseas with them, because the parties’ commitments changed, as their composite roster demonstrated.[8] The equal time she spent with the parties did not rotate on a regular weekly basis. Each week was liable to differ from the last. Things will continue to change for the child in the future, such as when she moves from infants school to primary school and then from primary school to secondary school, or when she starts a new sport or extra-curricular activity. There will always be new children and adults to meet in her life.

   [8] Mother’s affidavit, paras 42-43, 49, Annex.E; Father’s affidavit, paras 63-65, Annex.GM3

9. The mother’s proposal for the child to live in the K Region instead of on the J Region, and for her to change schools in the process, would not be a change for the child of such magnitude as would evoke alarm, despair, or dread. The parties agree the child is bright and gregarious with a wide circle of friends – no doubt because she has been socialised by two intelligent, charming parents who want her to be happy. Even the child knows she would readily make friends at a new school and find happiness. She said as much to the Family Consultant.[9] The father’s pessimism is coloured by his own childhood experience.[10]

   [9] Family Consultant’s memo 5/12/13, page 2

   [10] Father’s affidavit, para 141

10. Neither party could point to any evidence that rationally or persuasively enabled determination of the dispute by reference to the child’s interests. Whichever of the future living arrangements proposed by the parties is adopted, the child’s best interests will not be perceptibly impinged.

11. Once it is openly acknowledged the child’s best interests are not decisive of the controversy, it is much more easily determined by reference to the parties’ interests, which are still accommodated by the immutable legal precepts of the Act. It must be remembered that the child’s best interests are the paramount consideration – not the sole consideration (see U v U (2002) 211 CLR 238 at 248, 260, 282, 284; AMS v AIF (1999) 199 CLR 160 at 207, 230, 254). The legitimate interests and desires of the parties cannot be ignored and it is a mistake to masquerade arguments about the parties’ individual interests as arguments about the child’s interests.

12. Importantly, parents have as much residential freedom as is compatible with their obligations pertaining to the child (see AMS v AIF at 196, 206, 207-208, 210, 223-224, 231-232; Sampson v Hartnett (No.10) (2007) FLC 93-350). Only when the welfare of the child would be adversely affected should a parent’s right of freedom of mobility defer to the paramount consideration of the child’s best interests (see U v U at 262). Those principles have poignant operation in this instance.

Conclusions and orders

1. The presumption of equal shared parental responsibility applies (s 61DA(1)). Even if it did not, the parties agreed they should have equal shared parental responsibility for the child anyway. They would not have mutually made that proposal unless they both believed such an outcome would promote the child’s best interests. Orders are made implementing their proposal.

2. In light of the allocation of equal shared parental responsibility for the child to her parents, the Court is obliged to consider making orders for the child to live for “equal time” with the parties, or alternatively, for the child to live with one parent and spend “substantial and significant time” with the other (s 65DAA). Those two alternatives must be evaluated in terms of both the best interests of the child and their reasonable practicability (see MRR v GR at 466).

3. The mother’s proposal to relocate with the child must be considered not only in the context of findings about what is in the child’s best interests under s 60CC of the Act, but also in the context of s 65DAA of the Act. In order to avoid devaluing the statutory imperatives, the Court must first give separate and real consideration to the option of “equal time” without regard to the relocation proposal, which entails an alternate regime of “substantial and significant time” (see Taylor v Barker (2008) 37 Fam LR 461 at 475, 478-480).

4. The mother contended the parties had insufficient trust in, and respect for, one another to make an “equal time” regime work, but that is not so. The Family Consultant found the parties are “still able to communicate and enter into respectful conversations”.[11] They have successfully negotiated a flexible roster for the child for more than two years, they each agreed to let the other take the child on an overseas holiday, they agreed upon the school she should attend, they speak courteously to one another in public, and they correspond in writing civilly. That is not to say they are without complaint about the other, but the nature of their complaints is relatively benign.

   [11] Family Consultant’s memo 5/12/13, page 2

5. An arrangement under which the child lives for “equal time” with each party has a proven track record. It has been and will be reasonably practicable to implement, so long as the parties maintain their residences in sufficiently close proximity, and it will probably continue to promote the child’s best interests. The alternative option, under which the child would live with one parent and spend substantial and significant time with the other, is unlikely to promote her interests any better. The provisions of the Act are therefore engaged (s 65DAA(1)). Orders should preferably be made for the child to live with the parties for equal time.

6. But that does not mean the “equal time” arrangement must be implemented on the J Region. Other factors come into play.

7. The mother is desperate to relocate with the child to the K Region, whereas the father is keen for the child to remain resident on the J Region. If they both live near one another, either in the K Region or on the J Region, the equal time residential arrangement will remain reasonably practicable.

8. It should not be assumed the father cannot, or should not, contemplate moving so as to be nearer to the mother and child in the K Region. The mother is not obliged to subordinate her wish to relocate to the wish of the father to remain and pursue his life on the J Region. It is important to bear in mind that the parent wishing to relocate with a child bears no onus of proving the existence of compelling reasons for the relocation (see U v U at 261). Nor does the parent who desires no change of residential location bear any onus of proving the existence of compelling reasons for that decision (see Malcolm v Monroe (2011) FLC 93-460 at [83]). However, the parties’ reasons for their proposed relocation and immobility should be explored and evaluated, which process will inform the inquiry about whether the relocation is a proper exercise of parental responsibility (see U v U at 285-286; Malcolm v Monroe at [81], [83]).

9. The mother’s principal reasons for wishing to relocate to the K Region are rational and valid. They comprise:

   (a)Her wish to live with Mr I as a family unit, especially now they have a new baby. Presently, the mother and her new baby live on the J Region when the child lives with her for half the time, but back in the K Region with Mr I and their new baby for the other half of the time the child lives with the father on the J Region. The mother started living with Mr I for half the time when she commenced maternity leave in February 2014, just prior to the birth of her new baby. It is impractical for the mother and her new baby to continue living a dual life indefinitely. It adversely affects Mr I and the new baby as much as the mother. The mother has a high emotional stake in the successful function of her new family unit.

   (b)Her desire to have easy access to both physical and emotional support from members of the maternal family, including the maternal grandmother, maternal grandfather, and maternal aunt, all of whom live in the K Region. The availability of family support, including such things as reliable quality child care, financial assistance, and emotional support are often very important considerations to be taken into account when considering the parties’ competing proposals (see McCall v Clark (2009) FLC 93-405 at [131]-[135]; Hepburn & Noble (2010) FLC 93-438 at [43], [49]-[64]). The father was keen to explain how the paternal grandmother is close at hand for him, which he regards as beneficial to the child, so he must realise the benefit to the mother and child of having her family members near to her.

   (c)The difficulty confronted by Mr I instead relocating from the K Region to the J Region, which arises for two reasons. First, he works in Newcastle and his daily commute to work would be increased by about one hour in each direction. That is not decisive, but it is a consideration. Second, his own child, who is aged seven years, now lives with him and spends time with her mother frequently, including occasions during the school week. The residential arrangements for Mr I’s other family would be impinged by him having to relocate with his child to the J Region. Mr I admitted in cross-examination he had considered buying a home and relocating to the J Region, but that was before he acquired the residential responsibility for his own child in January 2014.

10. The father’s reasons for refusing to move from the J Region so as to remain in close proximity to the child did not withstand the same scrutiny.

11. He initially said in cross-examination he would remain living on the J Region regardless of the orders made by the Court, but when pressed he conceded the child would benefit from having him live closer to her if orders were made enabling the mother and child to relocate to the K Region. The father then said he would have to “strongly consider” relocating himself in such circumstances. That was the only sensible answer for him to give because there is no obvious reason why he cannot relocate. He seemed to finally accept that he was wrong when he earlier suggested the idea of his relocation was “insensitive”, “flippant” and “[un]realistic”.[12]

    [12] Father’s affidavit, para 148

12. The father plans to return to work as soon as these proceedings are complete, however he said he would only accept consultancy work that permits him to “largely” work from home. He plans to communicate electronically with the organisation with whom he consults. The father therefore admitted he could live and work from anywhere. It made no difference to him.

13. The evidence about the father’s comfortable financial circumstances, yet to be addressed in relation to the parties’ property settlement, proves he has the capacity to enable his relocation to the K Region. He is not unduly constrained by financial limitations and he only lives in rental accommodation.

14. The mother’s reluctant willingness to remain resident on the J Region and the father’s reluctant willingness to relocate to the K Region should not be regarded as alternate positive proposals by each of them. Rather, they are merely concessions about fall-back positions if their primary proposals do not find favour. It is permissible to inquire of the parties about their alternate positions so as to afford them procedural fairness because, once the parties ask the Court to determine their dispute, the Court is not bound to a choice between their polarised proposals (see U v U at 246-248).

15. Despite the father’s ability to move to the K Region, he asserted the orders should impose a regime under which he and the child are able to remain resident on the J Region.

16. The father contended he and the maternal grandmother would provide the mother with adequate physical support on the J Region when she decides to return to the workforce. He said the child could live with him or the paternal grandmother whenever the mother is unable to care for her because of work commitments. That may be feasible, though it is doubtful the mother would repose as much trust in the father as she does in members of the maternal family or Mr I, but that arrangement would still not be as satisfactory because the father and paternal grandmother would probably not be as willing to also care for the mother’s new baby, or Mr I’s child for that matter. The mother needs to consider the alternate care of her new baby, not just the child, when she is working.

17. The mother expects to return to work at the expiration of her maternity leave in February 2015. Her plan is to work from home for three days each week and to commute to work in Sydney on the other two days each week. On the two days she travels to Sydney the child and her new baby would be cared for on one day by the maternal grandmother and by Mr I on the other day, when he takes his rostered day off.[13] The mother’s commute to and from Sydney on those two days each week would be reduced if she remained living on the J Region, but the mere reduction in travel time would not absolve the need for alternate child care on those two days, nor render the father’s alternate child care plan more attractive.

    [13] Mother’s affidavit, paras 161-162

1. The mother proposed that, upon relocation to the K Region, the child would attend a private school in the locality of her new home instead of the private school she presently attends on the J Region. The father professed the change of school would be problematic for the child, but he probably realises that is not so for several reasons. First, the child’s personality makes it likely she will adapt quickly, particularly since she would attend the same school as Mr I’s child, who would be living in the same household. Second, the father intends to shortly commence cohabitation with Ms L and he expects Ms L’s child, who is a similar age to the child, to relocate with Ms L and change her school.[14] He must therefore expect Ms L’s child will adjust to such a change, which is understandable because well-adjusted children do cope with such changes.

   [14] Father’s affidavit, para 157

2. The father currently participates in some of the child’s school activities. He implied he could not do so at her proposed new school, as a reason for her not changing schools, but there is no reason at all he could not continue to do so at her new school, irrespective of where he chooses to live.

3. The father contended it would not be “appropriate” for the child to travel the distance between her proposed new school in the K Region and his existing home on the J Region, though he failed to clearly explain why. It was common ground the duration of the journey would be 60-70 minutes. On the mother’s proposal, the child would need to undertake that journey with either the father or the paternal grandmother on six occasions each fortnight during school terms if the father remained resident on the J Region. That frequency and duration of travel would not likely be too arduous for the child. The father could regard it positively, as an opportunity to have the child as his captive audience in the car, but if he chooses to still regard it negatively, he could always move and live closer to the K Region. That would obviate the problem.

4. The paternal grandmother is fit and well. She drives a car and stated her willingness to drive to the K Region to collect and return the child as and when required.

5. The mother’s interest in and motives for moving to the K Region are more convincing than the father’s interest in and motives for remaining resident on the J Region. The mother’s decision is a sensible exercise of her parental responsibility for the child. She should not be constrained by injunction from choosing a different place of residence with the child. The best interests of the child do not demand it. The mother is free to choose where she lives. Her choice of residence, and the father’s choice of residence thereafter, will define the nature of the child’s living arrangements.

6. No order is made “allowing” the mother to relocate her residence with the child, as she proposed.[15] Such an order is not a parenting order within the meaning of s 64B nor a mandatory or restrictive injunction under ss 68B or 114 of the Act and is accordingly not a proper exercise of the Court’s power (see AMS v AIF at 223-224, 231-232; Sampson v Hartnett (No.10)).

   [15] Amended Application filed 24/6/14, Order 3

7. The orders make provision for the child to live for equal time with the parties, so long as the father chooses to live in sufficient proximity to the mother. It is, however, necessary to place some restriction upon when the equal time regime will operate and when it will not. That is because, hypothetically, the father could choose to try and implement an equal time regime by retaining his residence on the J Region and driving the child to and from school each day in the week when she lives with him on the J Region, even though he gave evidence about the undesirability of such travel for the child. At least inferentially, the parties accept such regular travel would not be either reasonably practicable or in the child’s best interests on a long-term basis.

8. The orders therefore provide for an equal time regime, but only if the father chooses to establish his residence within a radius of 30 kilometres from the mother’s residence. The radial distance is necessarily arbitrarily, because the parties did not expressly debate the issue in evidence or submissions, but it is a reasonable limitation which affords the father plenty of latitude.

9. If the father chooses to live further than 30 kilometres away from the mother then the parenting regime will revert to one in which the child lives with the mother and spends substantial and significant time with the father. As an alternative, it would be both reasonably practicable and in the child’s best interests (s 65DAA(2)). The default alternative reflects the mother’s proposal under which the child would spend time with the father every Wednesday night in school terms, every alternate weekend in school terms (Friday to Monday), half of all school holidays, and on other special occasions.

10. Since the parties could not, in the exercise of their parental responsibility for the child, agree upon the school the child should attend, the dispute must be settled by the Court. The father said he had “no issue” with the alternate private school chosen by the mother. Rather, he only had “an issue” with the child’s change of school at all. Given the mother will be able to relocate her residence with the child, a change of school is inevitable. An order is made requiring the parties to take immediate steps to change the child’s enrolment to the specific school chosen by the mother.

11. The fees at the child’s new private school will be comparable to the fees incurred at her current private school. The father is currently paying the totality of her school fees voluntarily. He said he would continue to do so if necessary, though he understandably expects the mother to share the financial burden. She will likely be able to do so consequent upon the property settlement between the parties, though no order is made about the child’s school fees and expenses, as the mother wanted.[16] Her proposed order was neither a parenting order under Part VII of the Act nor a property settlement order under Part VIII of the Act. Neither party made any application for an order about school fees under Parts 6A or 7 of the Child Support (Assessment) Act 1989 (Cth). The issue was not addressed in that way by either party. The assessment and payment of child support is in the hands of the Child Support Agency.[17]

    [16] Amended Application filed 24/6/14, Orders 5-6

    [17] Mother’s affidavit, paras 325-329

12. Similarly, no order is made about the parties’ reconciliation and equal payment of medical expenses, presumably for the child, as the mother wanted.[18] The issue was not mentioned at all in the evidence or in submissions.

    [18] Amended Application filed 24/6/14, Order 16

13. Any changeovers of the child that cannot occur at the child’s school should preferably occur at the parties’ residences. That was the father’s proposal,[19] which was not the subject of challenge during the hearing. It is impossible for the orders to nominate another venue equidistant between them, as the mother proposed,[20] because it is unknown where the father will choose to live.

    [19] Response filed 8/11/13, Order 7

    [20] Amended Application filed 24/6/14, Order 9

14. The mother’s expectation of the child’s telephone communication with the parties was not controversial.[21] An order is made to ensure such communication occurs.

    [21] Mother’s affidavit, para 69

15. The remaining orders could not be the subject of reasonable dispute.

16. The mother conceded she allows the child to refer to Mr I as “Dad”.[22] In cross-examination, she said she would not be irritated by the child referring to Ms L as “Mum” and Mr I said he would not be irritated by his own child calling some other adult male in her life “Dad”. The mother said she would comply with an injunction restraining her from allowing the child to refer to anyone other than the father as “Dad”, but no such order was sought by the father. Consequently, he must be similarly content with the practice. When the child’s best interests do not require it, the Court should not foist a moral code upon resistant parties. When living with the mother, the child will hear Mr I’s child calling him “Dad” and she will soon hear her half-sister calling Mr I “Dad”. She would be the only child in the household required to refer to Mr I by another name. The parties must therefore accept the practice of the child referring to both Mr I and the father as “Dad”, even though that is a term of endearment usually reserved for the paternal figure in a child’s life.

    [22] Mother’s affidavit, para 118

17. The parenting orders set out at the commencement of these reasons promote the child’s best interests.

Property settlement dispute

Applicable legal principles

1. Orders under s 79 of the Act altering the property interests of parties may only be made if the Court is first satisfied, pursuant to s 79(2) of the Act, it is just and equitable to make such orders. The Act then identifies in s 79(4) the matters the Court must take into account in considering what order, if any, should be made (see Stanford v Stanford (2012) FLC 93-518 at [22], [35]). While those two inquiries are not to be conflated (see Stanford at [35], [40], [51]), it is permissible for the factors within s 79(4) to inform the inquiry under s 79(2) (see Bevan & Bevan [2013] FamCAFC 116 at [83]-[89], [163], [169], [171]-[172]).

2. It is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying the existing legal and equitable property interests of the parties. It must not be assumed that the parties’ rights to or interests in marital property are or should be different from those that then exist or that a party has the right to have the parties’ property divided by reference to considerations set out in s 79(4) of the Act (see Stanford at [37]-[40], [50]). Commonly, however, it will be just and equitable for the parties’ property rights to be altered because the breakdown in their relationship will end their fiscal unity and deprive them of common use of their property (see Stanford at [42]; Bevan & Bevan at [68]-[70], [82], [164]-[165]).

3. If and once determined it is just and equitable for the property interests of the parties to be altered, the process of evaluating the proper orders to make is dictated by the factors enumerated within s 79(4) of the Act. The court must necessarily identify and assess the parties’ contributions within the meaning of ss 79(4)(a)-(c) and then take account of the relevant matters referred to in ss 79(4)(d)-(g) and 75(2).

Section 79(2)

1. Before the final hearing commenced the parties tendered a joint balance sheet setting out their existing property interests, their superannuation interests, and their dispute over other assets in which the father has some form of interest.[23] That exhibit forms the template for the following findings.

   [23] Exhibit A

2. The existing property interests and superannuation interests of the mother are as follows:

No.	Assets	Value	Total
3	Suburb F property (50 per cent)	650,000
12	Household contents (50 per cent)	1,000
14	GBS acc #...	1,400
15	IAG shares	1,000
16	MLC insurance policy	0
17	Portable spa	1,200
18	Partial property settlement	0
19	Jewellery	NK
Sub-total	654,600+	654,600+
Liabilities
31	Loan (encumbers both Suburb D  and Suburb F)	657,000
32	GBS credit card	5,000
Sub-total	662,000	662,000
Net assets (deficit)	-7,400+
Superannuation
34	MLC super	73,239

1. Not all items were agreed.

2. The father did not admit the balance in the mother’s building society account, the value of her IAG shares, the value of her MLC insurance policy, or the quantum of her credit card debt (items 14-16, 32). In the absence of evidence to the contrary, I accept the mother’s evidence. She was not cross-examined about the inaccuracy of her evidence in that regard.

3. The parties agreed the father paid $20,000 to the mother by way of “partial property settlement” pursuant to interim orders made in December 2013 (item 18), but that payment is not notionally added back to the mother’s existing property interests because there is no evidence the mother is still in possession of the money. I impute it has been spent, in which case it is no longer an asset. It is therefore taken into account pursuant to ss 79(4)(e) and 75(2)(o) of the Act when assessing the parties’ respective entitlements, which is an orthodox approach (see Bevan & Bevan at [78]-[79], [160]). Neither party objected to that approach when the prospect was raised in final submissions.

4. The parties could not agree on the value of the mother’s jewellery (item 19). There was no expert evidence as to its value and the mother made no admission as to its value. It must have some value – no matter how little – but the absence of evidence precludes any finding about it.

5. The existing property interests and superannuation interests of the father are as follows:

No.	Assets	Value	Total
1	Suburb D  property (100 per cent)	650,000
2	Suburb H property (100 per cent)	550,000
3	Suburb F property (50 per cent)	650,000
4	Westpac acc #...	58
5	Westpac acc #...	0
6	Westpac acc #...	224
7	Westpac acc #...	0
8	Westpac acc #...	94
9	Westpac acc #...	12,300
10	Motor Vehicle	16,000
11	Motorcycle	6,000
12	Household contents (50 per cent)	1,000
13	Interest in business name	0
35	Funds in Country M	231,337
36	Inheritance	303,969
Sub-total	2,420,982
Liabilities
26	Loan (encumbers Suburb F)	502,064
27	Loan (encumbers Suburb H)	550,000
28	Unpaid GST	9,000
29	Unpaid income tax	22,000
30	Westpac mastercard	15,000
Sub-total	1,098,064	1,098,064
Net assets	1,322,918
Superannuation
33	MLC super	153,696

1. Not all items were agreed.

2. The mother did not admit the balances in the father’s bank accounts (items 4-9), but in the absence of evidence to the contrary, I accept the father’s evidence. He was not cross-examined about the inaccuracy of his evidence in that regard.

3. The parties disagreed over the value of the father’s motor vehicle (item 10). The mother asserted it had a higher value of $18,000, but she adduced no expert evidence to prove such value, in which case I accept the father’s valuation of $16,000 as an admission against interest.

4. The mother did not admit the father’s business name was worthless (item 13). He operates as a sole trader.[24] She did not adduce evidence to the contrary and the father was not challenged about the inaccuracy of his evidence. I therefore accept his business name has no value.

   [24] Father’s financial statement, para 11

5. The mother did not admit the quantum of the father’s taxation and credit card liabilities (items 28-30), but she did not adduce contrary evidence and did not cross-examine the father about the inaccuracy of his evidence. I therefore accept the father’s evidence.

6. There was a conceptual dispute between the parties about the characterisation of funds in Country M (items 35, 36). The evidence proved those funds were the property of the father, which the father eventually acknowledged in final submissions. The funds are not merely a financial resource from which he might be favoured at the discretion of some other person.

7. Some of the funds (item 35) were the proceeds of sale of a Country M property the father conceded he owned. It was sold in late 2012. He clearly has dominion over the funds.[25] I reject any assertion to the contrary.[26]

   [25] Exhibit M2

   [26] Mother’s affidavit, paras 282, 284-285

8. The inheritance (item 36) was received by the father in tranches over a period of years. Although he contended the inheritance amounted to AUD$207,645, which figure he computed by conversion from £120,000,[27] the mother did not concede it.[28] Documents were tendered by the mother showing the father’s receipt of two payments, totalling £166,950, in 2009 and 2011 as part of his inheritance.[29] At current exchange rates, that sum equates to AUD$303,969.

   [27] Father’s affidavit, para 200

   [28] Exhibit A, item 36

   [29] Exhibits M3, M4

9. The father gave inconsistent evidence about the inheritance. He deposed in his affidavit that the cash from the inheritance remained in Country M,[30] but also deposed he recently brought $35,000 from the inheritance to Australia.[31] In cross-examination he said the $35,000 did not come from the inheritance account, but rather from another account in which he alleged the paternal grandmother had an interest. He also said he had not drawn upon the account containing the inheritance. Importantly, he conceded he failed to produce to the mother any document verifying the balance of the inheritance account.

   [30] Father’s affidavit, para 200

   [31] Father’s affidavit, para 241

10. If the balance of the inheritance account is actually less than £166,950 because of, for example, the imposition of taxation,[32] it was within the power of the father to prove it. But he failed to do so. He simply deposed to his belief about the potential subjection of the funds to Country M taxation,[33] and in re-examination said he still did not know whether any tax had been deducted from the funds.

    [32] Exhibit M3

    [33] Father’s affidavit, para 200

11. In fact, the available evidence implied one of the payments made to the father had already been debited with 35 per cent tax, and the tax remitted, so that the amounts actually paid to the father were net funds.[34]

    [34] Exhibit M3

12. The father filed an Application in a Case on 21 July 2014 seeking to re-open his case and tender in evidence a letter annexed to his supporting affidavit. The Application was heard and dismissed on 22 July 2014, with reasons for the dismissal to be incorporated within these reasons.

13. The underlying admissibility of the letter was disputed, so the parties sensibly acknowledged the admissibility of the letter was germane to the exercise of discretion about the grant of leave to the father to re-open. If the letter was inadmissible then the question of the grant of leave became superfluous. Leave would be denied. Only if the letter was admissible would the ordinary principles governing the grant of leave need to be considered (see Smith v NSW Bar Association (No 2) (1992) 176 CLR 256 at 267).

14. The letter the father wished to tender was dated 12 August 2011 and emanated from the solicitors handling the deceased estate from which his inheritance was paid. It asserted the father received two payments as part of the inheritance – one payment of £81,216 (which correlated with Exhibit M4) and another payment of £46,164 (which was inconsistent with Exhibit M3).

15. There was no challenge to the authenticity of the letter. However, the contents of the letter were hearsay. It was conceded the letter was therefore inadmissible unless an exception to the hearsay rule could be invoked. The father contended the letter was a business record and consequently admissible pursuant to s 69(2) of the Evidence Act 1995 (Cth), but that was incorrect.

16. The mother abandoned her initial submission that the letter was inadmissible because it was prepared in contemplation of these proceedings (s 69(3)), but correctly contended the letter was not a business record because it was not a record prepared or kept for the purposes of the solicitors’ business pertaining to administration of the estate or otherwise (s 69(1)). Rather, as the father was impelled to concede, it was nothing more than the solicitors’ assertion of a series of facts about the father’s inheritance, at least one of which was contentious. The salutation and the contents of the letter imply it was written for the singular purpose of verifying those facts to an unfamiliar reader. The letter was addressed “To whom it may concern” and then purported to summarise the quantum of the benefits received by the father from the deceased estate. The only reasonable inference to draw was that the letter was not a business record (s 183).

1. Given the controversy over the amount actually received by the father from the inheritance, the fact should have been proven by source records or by evidence given directly by the author of the letter. Even though that solicitor is from Country M, the evidence could still have been given by way of affidavit and, if still challenged, cross-examination then undertaken by telephone. There was no basis to conclude the author of the letter was “unavailable” within the meaning of the Evidence Act.

2. Reception of the letter into evidence would also have been productive of the danger that its probative value would be substantially outweighed by the extent to which it would be misleading and confusing (s 135). Admission of the letter, in isolation from any other evidence, would only cause an unresolved conflict in the evidence between it and another exhibit. The conflict could not be cured by permitting the father to give supplementary oral evidence to explain the inconsistency, since he had already been cross-examined on the issue and could not offer any clarification. Nor did he relevantly say anything more in the affidavit he filed in support of his application to re-open.

3. The letter purported to verify that the father received £46,164 from a Standard Life investment, whereas another exhibit already tended to prove the father received £85,734 from the Standard Life investment.[35]

   [35] Exhibit M3

4. The letter and the exhibit could not be rationally reconciled. An inference is not readily available that the gross sum of £85,734 was notionally payable to the father, but was reduced to the net amount of £46,164 after the deduction of tax. First, the exhibit implied tax had already been deducted to produce the net amount of £85,734. Second, the father said he was ignorant of the taxation implications. Third, even if tax of 35 per cent was deducted from the sum of £85,734, the net result is not £46,164.

5. The exhibit confirmed the sum of £85,734 was actually paid to the father in May 2009, so the letter written in August 2011 retrospectively asserting what the solicitors believed was previously paid to him from an independent source was less likely to be accurate.

6. As the mother submitted, the father could easily have cured the defect by producing to her all of the relevant source documents verifying the amounts he received by way of inheritance and the bank account statement verifying the balance of the account containing the inheritance money. He did not do so. Contrary to his submission, the letter was not satisfactory compliance with his obligation of full and frank disclosure.

7. All evidence must be weighed according to the proof which it is in the power of one side to have produced and the power of the other to have contradicted (see Vetter v Lake Macquarie City Council (2001) 202 CLR 439 at 454; Burke v LFOT Pty Ltd (2002) 209 CLR 282 at 330). The father had all the power in that respect and the mother had none.

8. It is well known parties are obliged to make comprehensive disclosure of their financial circumstances in property settlement proceedings. In instances of deliberate non-disclosure by one party the Court should not be unduly cautious about making findings in favour of the other party (see Weir & Weir (1992) 16 Fam LR 154 at 158-160; Chang v Su (2002) 29 Fam LR 406 at 422-424). Consequently, it is not unreasonable in the circumstances to conclude the father received £166,950 rather than only £120,000 or £127,380 from the inheritance, the funds have not been drawn upon by the father, and the funds are currently worth AUD$303,969.

9. Even though admittedly assets, the parties argued over whether the father’s Country M assets should be quarantined and treated differently from his other existing property interests.

10. The mother argued for incorporation of those assets into the father’s pool of property, just as if they were a dormant “gold bar” (see Aleksovski v Aleksovski (1996) FLC 92-705 at 83,443), but acknowledged such incorporation would substantially dilute her proportional share of the overall assets from the 60 per cent for which she initially contended.

11. If I correctly understood the mother’s final submission on the issue, she was content to adopt the approach contended by the father, which was to quarantine the assets from consideration under s 79(4)(a)-(c) of the Act, but to take the father’s ownership of those assets into account pursuant to ss 79(4)(e) and 75(2) of the Act. Such an approach accords with old authority (see Marriage of Bonnici (1992) FLC 92-272 at 79,020; Marriage of Burke (1992) 16 Fam LR 324 at 328-329; Marriage of Wall (2002) 29 Fam LR 1 at 9; Marriage of Figgins (2002) 29 Fam LR 544 at 557-558). In those circumstances, the mother would be on firmer ground contending for her comparatively larger contributions to the remaining assets and additionally contending for an adjustment in her favour because of the availability to the father of those quarantined assets.

12. On reflection, the father’s Country M assets should not be quarantined. They should be treated as constituent parts of the father’s existing property interests. It may be doubted that antiquated decisions like Bonnici, Burke, Wall, and Figgins remain authoritative in the face of the High Court’s pronouncement that the first task in property settlement proceedings is to identify all of the parties’ respective legal and equitable property interests for consideration under both ss 79(2) and 79(4) (see Stanford v Stanford at [37]-[40], [50]).

13. By reference to the above findings, the mother’s current property and superannuation interests are worth about $65,839 (allowing for uncertainty about the value of her jewellery), whereas the father’s current property and superannuation interests are worth $1,476,614. The combined net value of the parties’ assets and superannuation interests is therefore $1,542,453.

14. The parties lived together with their child as a family unit for approximately nine years. They worked hard in employment, combined their income, and contributed in one way or another to capital acquisitions. They also co-operated in the care and supervision of their child. All of their efforts were intended to advance the wealth and contentment of the family unit. In such circumstances, the current disparity in their individual financial circumstances is unfair. It would not be just and equitable if the parties’ property interests were not altered under Part VIII of the Act. Such a finding is uncontroversial, since both parties sought an adjustment of their property interests. They simply disagreed over their proportional entitlements.

Proposal of mother

1. The mother proposed that she receive 60 per cent of the parties’ combined assets (excluding items 35 and 36) and superannuation interests, which division in respect of the superannuation interests would be achieved by splitting the father’s superannuation interest.

2. The mother therefore quantified her entitlement at $604,288 (and the father’s at $938,165).

Proposal of father

1. The father began the trial by proposing that he receive 60 per cent of the parties’ assets (excluding items 35 and 36, which he would retain), with each party to retain their own superannuation interests. However, in final submissions he proposed the parties should have equal superannuation interests, which should be achieved by splitting the father’s larger superannuation interest.

2. The father therefore quantified his entitlement at $1,253,061 (and the mother’s at $289,392).

3. The parties were therefore $314,896 apart. When their entire assets and superannuation interests had a net value of $1,542,453, the magnitude of the disparity was difficult to fathom, particularly since there was very little underlying factual dispute about their contributions and needs.

Sections 79(4) and 75(2)

1. The father contended the parties’ contributions to assets should be considered separately from their contributions to superannuation interests. Although the mother disagreed with that approach, the father’s approach is preferable (see Marriage of Coghlan (2005) 33 Fam LR 414 at 428-429). Both parties ultimately sought superannuation splitting orders so the assets and superannuation interests will be considered separately.

2. Despite the volume of filed affidavit material, comparatively little of the parties’ respective contributions were controversial.

3. Save for the father’s ownership of the real property in Country M, which was later sold in December 2012 for £127,631 net,[36] the parties took assets of similar value into the relationship in 2003.[37] The mother believed the father also then had an account containing £400,000, but the father denied it.[38]

   [36] Exhibit M2

   [37] Mother’s affidavit, paras 180-181; Father’s affidavit, para 165

   [38] Mother’s affidavit, para 181; Father’s affidavit, para 166

4. The proceeds of sale of the Country M property remain a significant consideration as a contribution by the father (see Pierce v Pierce (1999) FLC 92-844 at [23]-[30], [40]).

5. The parties both worked hard in full-time employment and contributed their earnings to the household. The father’s wages tendered to be higher, but not materially so, despite his submission to the contrary. The mother took time off work on maternity leave and she was the primary carer for the child. Her evidence about that was not challenged in cross-examination.[39]

   [39] Mother’s affidavit, paras 4, 12, 37

6. The parties each received redundancy payments from employers and the mother received a cash settlement from litigation against a former business partner, but those payments were incidental to the parties’ ordinary income-earning activities and were not separately addressed in submissions by the parties.

7. However, there were other notable capital contributions made throughout the parties’ relationship.

8. The inheritances of $303,969 received by the father and of $10,000 received by the mother,[40] are significant considerations. Neither party made any discernible direct or indirect contribution to the other’s inheritance.

   [40] Mother’s affidavit, paras 191, 219; Father’s affidavit, para 179

9. In 2005 the paternal grandmother gave $170,000 to the parties, which they put towards the purchase of their initial residence at Suburb F. The parties later converted the Suburb F property to an investment property and it was used as security for loans which enabled their purchase of other parcels of real property at Suburb H and Suburb D. The father derives credit for that gift (see Marriage of Kessey (1994) FLC 92-495 at 81,149-81,150).

10. The paternal grandmother has, however, received reciprocal consideration from the parties which moderate the weight otherwise attributable to her gift of $170,000. They gave her a gift of $5,000 in return,[41] and they purchased the properties at Suburb D and then Suburb H for her residence. Although the paternal grandmother paid rent to the parties, it was less than market rent. Presently she occupies the Suburb H property and pays rent of $420 per week, when the father conceded the market rate is $530 per week.

    [41] Father’s affidavit, para 206

11. The father received monetary advantage after separation, which was denied to the mother, though it is impossible to quantify.

12. From about August 2012 the parties took steps to separate their finances. From then until the commencement of her maternity leave in February 2014, the mother was solely responsible for payment of one loan secured over both the Suburb F and Suburb D properties. The loan repayments were about $735 per week, which she paid from her own income. She occupied the Suburb D property.

13. By comparison, the father lived at the Suburb H property with the paternal grandmother, until he moved out in September 2013.[42] He paid no rent for his occupation of that property. He received the rents from the paternal grandmother for her occupation of the Suburb H property and from the tenants of the Suburb F property. Those rents roughly equated to $1,400 per week, which income covered the two repayments he maintained in respect of the other loans secured over the Suburb F and Suburb H properties.

    [42] Father’s affidavit, para 81

14. The upshot is that the father had rent-free accommodation for a period and his loans were paid by the rent he received, even though the rent paid on the Suburb F property was properly payable to both him and the mother as joint owners of that property. The father refused the mother’s request for him to pay to her half of the rent he received on the Suburb F property. Even though the father received the whole of the Suburb F rent, he sought advice about only paying tax on half of the rental income,[43] implying he also received a tax advantage.[44] The mother would be obliged to declare and be assessed for tax upon the half of the Suburb F rent due to her,[45] but since she has not yet filed her tax returns for the financial years ended 30 June 2012, 2013, or 2014,[46] she has not yet sustained that loss. She may yet do so.

    [43] Exhibit M1

    [44] Mother’s affidavit, para 274

    [45] Mother’s affidavit, para 275

    [46] Mother’s affidavit, para 280

15. The father tendered a spreadsheet of expenses relating to the Suburb F and Suburb H properties for the period between March and June 2014,[47] but its significance was not explained in any meaningful way – either in evidence by the father or in submissions by his counsel.

    [47] Exhibit F1

16. Once the mother commenced maternity leave in February 2014, the father took over repayments of the mortgaged loan formerly serviced by the mother. He has also paid the entirety of the child’s private school fees.[48]

    [48] Father’s affidavit, para 220

17. The father also paid $20,000 to the mother by way of “partial property settlement” in December 2013.[49]

    [49] Father’s affidavit, para 220

18. The parties are of comparable age. The mother is 41 years of age and the father is 45 years of age. They are both in good health.

19. When the father was last employed his annual income was $195,000 per annum.[50] Since then, his choice has been to only accept consultancy work which accommodates his care of the child for equal time.[51] His current earnings are therefore diminished, but he has a substantial income-earning capacity.

    [50] Father’s affidavit, para 191

    [51] Mother’s affidavit, para 281; Father’s affidavit, para 74

20. The mother started work with her current employer in 2010 earning $100,000 per annum.[52] By the time she commenced maternity leave in February 2014, her annual income approximated $120,000. She too has a substantial income-earning capacity, but it is not as great as the father’s.

    [52] Mother’s affidavit, para 237

21. Although the mother is likely to return to work in early 2015, she will only be able to do so if satisfactory care arrangements can be made for her new baby born in 2014.

22. No adjustment should be made by reference to the parties’ differential superannuation interests because they will be equalised, for reasons explained below.

23. Since the father’s Country M assets form part of his legal interests and are not quarantined from consideration, his introduction of those assets and the paternal grandmother’s gift of $170,000 are very important contributions. His overall contributions were greater, but his retention of much more of the assets is a factor of relevance under ss 75(2)(g), (n), (o) of the Act. The mother also made substantial contributions that need to be recognised and her future needs are greater than the father’s.

24. The synthesis of those considerations justifies the father’s entitlement to 65 per cent of the assets and the mother’s entitlement to 35 per cent of the assets.

25. The father contended all of the parties’ superannuation interests were accumulated from the time they commenced cohabitation and so their contributions should be regarded as equal. I accept that submission and reject the mother’s submission of her entitlement to 60 per cent of the combined superannuation interests. Given separate analysis of the parties’ contributions to superannuation interests, the mother failed to explain why her contributions were greater, let alone greater by half.

Conclusions and orders

1. The mother’s entitlement to 35 per cent of the net assets equates to $460,431 (= 35 per cent x (-7,400 + 1,322,918)).

2. The father’s entitlement to 65 per cent of the net assets equates to $855,087 (= 60 per cent x (-7,400 + 1,322,918)).

3. The debts for which the mother is currently liable exceed the value of the assets in her possession. The deficit in value is $7,400. In order for the mother to receive her proper entitlement the father must give her extra cash or assets valued at $467,831.

4. The father wants to retain the Suburb F and Suburb H properties,[53] but it is unlikely he can. To do so, he would need to pay to the mother not only $467,831, but also her one-half share of the Suburb F property, which share is valued at $650,000.

   [53] Father’s affidavit, paras 231-232

5. The parties’ joint interest in the Suburb F property needs to be severed, for otherwise the intention of the Act (s 81) is unfulfilled. The mother certainly does not, and the father probably does not, want to retain a joint interest in any real estate.

6. The orders therefore require sale of the Suburb F and Suburb D properties. The sale proceeds of both properties will be required to ensure payment of the mother’s proper entitlement. The net proceeds of sale of only Suburb F would not be sufficient because the property is valued at $1,300,000 and it secures two loans of the parties worth $1,159,064 (items 26 and 31). The net equity in the property is only about $140,000.

7. The sale proceeds will be used to discharge the parties’ two loans secured over the Suburb F property (items 26 and 31). The discharge of the mother’s loan (item 31) will mean she receives $7,000 more than the value of her one-half proprietary interest in the property. Her interest is valued at $650,000 (item 3) and her loan balance is $657,000 (item 31).

8. Once that loan is discharged the father will then only need pay to the mother $460,831, which is $7,000 less than the figure computed above.

9. The orders provide for the sum of $460,831 payable to the mother to vary upwards or downwards on a percentage basis, depending upon whether the two properties sell for more or less than their agreed values in this litigation. Neither party will then be unfairly disadvantaged.

10. After the mother receives her share of the sale proceeds, the residue must be used to pay the father’s loan secured by mortgage over the Suburb H property, because the mother guaranteed the father’s performance of that loan.[54] Her release from the guarantee can only be ensured by the loan’s discharge. If the father wishes to thereafter re-finance the Suburb H property he may do so. That will mean that loan is paid from the father’s share of the sale proceeds and he will retain any remaining balance of the proceeds.

    [54] Father’s affidavit, para 204

11. Otherwise, the parties will retain the assets in their possession and bear their own debts.

12. The father’s superannuation interest will be split so as to ensure the parties are left with equivalent superannuation interests valued at or about $113,467. That will require an amount of $40,228 to be split from the father’s superannuation interest (73,239 + 40,228 = 113,467 and 153,696 – 40,228 = 113,467).

13. The value of the father’s superannuation was agreed at $153,696. Pursuant to s 90MT(2) of the Act, that amount is determined to be the current value of his superannuation interest.

14. The parties agreed the trustee of the father’s superannuation fund was accorded procedural fairness, as required by the Act (s 90MZD) and the Family Law Rules (rule 14.06).[55] The trustee was notified of a slightly different splittable amount, but both parties urged the superannuation splitting orders be made nonetheless.

    [55] Exhibit M5

15. The mother sought an order compelling the father to account to her for income and expenditure since October 2012 in respect of the Suburb F property.[56] No such order is made, even if there is power to make it, because there is no utility in it. These orders are final. The mother knows the father retained all the rent. It is no secret. The orders are made in that knowledge.

    [56] Amended Application filed 24/6/14, Orders 9-10

1. The property settlement orders set out at the commencement of these reasons are just and equitable.

I certify that the preceding one hundred and sixty two (162) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Austin delivered on 23 July 2014.

Associate: 

Date:  23 July 2014