McManus & Bracken (No 2)
[2023] FedCFamC2F 640
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
McManus & Bracken (No 2) [2023] FedCFamC2F 640
File number(s): MLC 11271 of 2020 Judgment of: JUDGE O'SHANNESSY Date of judgment: 26 May 2023 Catchwords: FAMILY LAW – final parenting and property orders – whether the children’s living arrangements should be equal time or substantial and significant time – where one parent has involved the children in the proceedings – whether the property pool should be divided equally or 70/30 – whether there should be adjustments based on section 79(4) contributions – whether there should be adjustments on section 75(2) factors – equal contribution and 5% section 75(2) adjustment – jointly contributed pool divided 45/55 – final hearing heard over 5 days Legislation: Evidence Act 1995 (Cth) ss 140, 144
Family Law Act 1978 (Cth) ss 4, 4AB, 60CA, 60CC, 60CF, 60CG, 61DA, 65DAC, 75, 79, 80
Cases cited: Adamson & Adamson (2014) FLC 93-622
Blass & Blass (2022) FLC 94-085
Clauson & Clauson (1995) FLC 92-595
Fox v Percy (2003) 214 CLR 118
Hickey and Hickey and the Attorney-General [2003]
Hobson v Hobson (2020) 61 Fam LR 557, [2020] FamCAFC 251
Keskin & Keskin and Anor [2019] FamCAFC 236; (2019) FLC 93-932
Lovine & Connor and Anor (2012) FLC 93-515
McManus & Bracken [2021] FedCFamC2F 206
Phipson & Phipson [2009] FamCAFC 28
Rosati v Rosati (1998) FLC 92-804
Stanford v Stanford [2012] HCA 52; (2012) FLC 93-518
Townsend & Townsend (1995) FLC 92-569
Varnham & Moses (2021) FLC 94-007
Wallis & Manning (2017) FLC 93-759
Wayne & Wayne [2010] FamCAFC 33
Division: Division 2 Family Law Number of paragraphs: 263 Date of last submission/s: 8 December 2022 (exhibit F19) Date of hearing: 3-4 February 2022, 10 February 2022, 18 February 2022, 5 May 2022. Place: Melbourne Counsel for the Applicant: Litigant in Person Counsel for the Respondent: Ms E. Johnson Solicitor for the Respondent: Fitzroy Legal Service Inc. ORDERS
MLC 11271 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR MCMANUS
Applicant
AND: MS BRACKEN
Respondent
order made by:
JUDGE O'SHANNESSY
DATE OF ORDER:
26 MAY 2023
THE COURT ORDERS THAT:
1.All previous parenting and property orders be discharged.
Parental responsibility
2.The parties have equal shared parental responsibility for the children of the relationship, X born in 2013, and Y born in 2014 (“the children”).
Live with and Spend time
3.The children live with the Mother.
4.The children spend time and communicate with the Father as follows:
(a)During school terms in week one of a two-week cycle, from the conclusion of school on Friday (or 3:00pm if a non-school day) to the commencement of school on Monday (or 9:00am if a non-school day) and in the same cycle or rotation as in place pursuant to interim orders;
(b)During school terms in week two of a two-week cycle, from the conclusion of school on Wednesday (or 3:00pm if a non-school day) to the commencement of school on Friday (or 9:00am if a non-school day) and in the same cycle or rotation as in place pursuant to interim orders;
(c)During school holiday periods:
(i)For one half of the school term holiday period at dates and times as agreed, and failing agreement, the first half in 2023 and the second half in 2024 (with the Mother to have the second half in 2023 and the first half in 2024), and with changeover to take place at 12:00pm (midday) on the middle Saturday of the relevant holiday period.
(ii)Term holidays are deemed to commence at the conclusion of school term and conclude at the commencement of first day of school next term.
(iii)During the long summer holiday period at dates and times as agreed and failing agreement on a week about basis:
A.Commencing the first week with the Father in 2023/2024 summer holidays (and commencing the second week with the Mother in 2023/2024).
B.Commencing the second week with the Father in the 2024/2025 summer holidays (and commencing the first week with the Mother in 2024/2025).
C.The summer holidays are deemed to commence at 12noon on the day following the conclusion of school and shall conclude at 12noon on the day prior to the commencement of the school year. Changeovers for week about shall take place at 12noon during the summer holidays.
(d)On Father’s Day weekend, from 4:00pm on the Saturday before Father’s Day, until the commencement of school on the day following Father’s Day.
(e)On the children’s and the Father’s birthday (if the children are not otherwise in his care):
(i)If on a school day, from the conclusion of school until 6:30pm; and
(ii)If a non-school day, from 12:00pm until 4:00pm save that if the Father’s Birthday clashes with Mother’s Day his time with the children shall be from 9:00am to 11:00am; and
(iii)In the event the Father is unable to have the children in his care on his birthday, the Father provide notice to the Mother as soon as practical, and in any event no less than seven (7) days; and
(f)Such further and/or other time as agreed.
5.If the children are otherwise in the care of the Father, the Father’s time be suspended, and the children be in the care of the Mother at the following times:
(a)On the children’s birthdays:
(i)If on a school day, from the conclusion of school until 6:30pm.
(ii)If on a non-school day, from 12:00pm until 4:00pm.
(b)On Mother’s Day weekend, from 4:00pm on the Saturday prior to the commencement of school on the day following Mother’s Day (save for as provided in order 4(e)(ii) herein).
6.Unless otherwise agreed between the parties in writing, text message or email, the children spend time with the parents on at Christmas as follows:
(a)If the children are in the care of the Father, with the Mother from 11:00am Christmas Day until 11:00am Boxing Day.
(b)If the children are in the care of the Mother, with the Father from 11:00am Christmas Eve until 11:00am on Christmas Day.
7.Changeover to occur at the children’s schools at changeover times on school days and otherwise at a place agreed in writing, email or text message and failing agreement at the Suburb C McDonalds Restaurant at the corner of D Street and E Street.
AND THE COURT ORDERS BY CONSENT THAT:
8.The children be at liberty to telephone the parent whose care they are not in at all reasonable times and that each parent facilitate such phone calls.
Schooling & Medical
9.Each party be entitled to attend any school event to which parents are usually invited and otherwise, each party and/or their agent only attend the children’s school whilst they are in their respective care.
10.Each parent authorises:
(a)The children’s school to provide the other parent copies of all notices, newsletters, photographs, order forms, records or like documents.
(b)The children’s treating medical practitioner/s and allied health professional/s, including psychologist/s, to communicate with the other parents as to the health and treatment of the children or either of them.
11.Each parent keep the other fully informed of the contact details of the children’s doctors, allied health professionals and psychologists, if any, and the treatment or therapy recommended and/or undertaken.
AND THE COURT ORDERS THAT:
12.The Mother be permitted to take the children or either of them to see a child psychologist, and absent agreement that psychologist should be as nominated by the children’s treating general practitioner after consultation with both parents, and the cost of the consultations be shared equally by the parents.
AND THE COURT ORDERS BY CONSENT THAT:
Notification
13.Each parent immediately notifies the other parent, in the event that the children or either of them suffer from any serious injury whilst in their care.
14.Each party keep the other informed of their residential address, email address and telephone number at all times and notify the other within seven (7) days of any changes thereto.
15.In the event that either parent has significant or special event such as a family gathering, christening, wedding or other special event, that parent shall give fourteen (14) days written notice to the other parent of their desire for the children to spend the time with them and the other parent will not unreasonably withhold their consent, with makeup time to be afforded to the other parent as soon as practicable thereafter.
Restraints
16.Each party, their servants and/or agents, be restrained by injunctions from abusing, insulting, belittling, rebuking or otherwise denigrating the other party or any other member of the party’s family or household in the presence or hearing of the children.
AND THE COURT ORDERS THAT:
17.The parties be and are at liberty to arrange extracurricular activities in his or her time with the children provided that does not impact the other parent’s time with the children, unless agreed.
18.Neither parent shall discuss these proceedings nor issues in the proceedings in the presence of hearing of the children.
Overseas travel
19.Each parent be at liberty to travel overseas with the children during his or her part of the school holidays, subject to:
(a)The travelling parent providing the other parent with 28 days written notice of the proposed travel and such notice is to include the intended days of departure and return, a copy of the return air tickets for the children and a complete itinerary, including details of where the children will be staying and a contact telephone number at all times; and
(b)The travelling parent arrange travel insurance for the travelling parent and the children and provide a copy of same to the other parent no less than 14 days prior to travel.
20.In the event the overseas travel, as referred to in paragraph 18 herein, the parties cause and ensure the travelling party has the children’s passports no less than 28 days prior to the designated date of departure and the passports otherwise be held by the Wife.
21.On the expiration of the children’s passports, or either of them, both parents expeditiously execute all necessary documents to enable new passports be issued for the children and any associated costs are to be borne equally.
Property
22.The Husband and Wife do all things and sign all necessary authorities to cause the proceeds of sale of the parties former matrimonial home held on trust on their behalf to be divided as follows:
(a)First, to pay any costs of sale or conveyancing of the former matrimonial home or the cost or charges relating to the funds being held on trust (if not already completed);
(b)Second, to reimburse such costs as were agreed and paid by either party for the repair for sale or preparation for sale to the party that paid those agreed costs (if not already completed);
(c)Third, to pay 63.49% of the funds remaining to the Wife (‘the Wife’s part’) but from the Wife’s part to pay to the Husband the sum of $6,500 (for the repayment of the expert reports); and
(d)Fourth, to pay to the Husband 36.51% of the funds remaining.
23.That unless otherwise specified in these orders and save for the purpose of enforcing any monies due under these or any subsequent orders:
(a)Each party be solely entitled to the exclusion of the other to all property (including choses in action) owned by or in the possession of such party as at the date of these orders;
(b)Each party forego any further claims they may have to any superannuation benefits belonging to or earned by the other;
(c)Insurance policies remain the sole property of the owner named therein;
(d)Any monies or liabilities held in any bank or credit accounts remain the sole property of the owner named in whose name the accounts are held;
(e)Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(f)Each party remain responsible for any debts in that party’s name; and
(g)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
AND THE COURT NOTES THAT:
A.The parents are expected to have discussions when the children are of sufficient age and maturity in relation to dividing the long summer school holidays in half.
B.Pursuant to ss.65DA(2) and 62B of the Family Law Act1975 the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders are set out in Annexure A and these particulars are included in these orders.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym McManus & Bracken has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE O’SHANNESSY
INTRODUCTION
Having separated after a marriage of eight years, the Applicant Husband, Mr McManus, (‘the Husband’) and the Respondent Wife, Ms Bracken (‘the Wife’), seek the assistance of the Court to work out how to divide their property and work out their children’s living arrangements.
The parties have two children, X (‘X’) born in 2013 and now aged 9 (almost 10) and Y (‘Y’) born in 2014 and aged 8½, collectively referred to as ‘the children’.
The Husband seeks a gradual move to an equal shared parenting arrangement. The Wife closed her case seeking the children live with her and spend an alternate weekend (Friday to Monday) with another overnight plus half school holidays with the Husband, or a 4/10 per fortnight arrangement, plus half-holidays.
The property pool is about $935,000 plus about $354,000 of superannuation, with the main asset being the proceeds of sale of the former matrimonial home (‘the FMH’), currently held on trust. The parties characterise the Wife’s interest in a deceased estate as a financial resource, and for convenience these reasons characterise the remaining part of the net pool of assets as the “jointly contributed” pool. The Husband seeks a 50/50 division of the jointly contributed property pool and the Wife closed her case seeking a 70/30 division of the non-superannuation assets of the jointly contributed pool in her favour.
I look at the competing parenting applications and proposals through the prism of Part VII of the Family Law Act1975 (Cth) (‘the Act’) and the competing property alteration proposals in accordance with Part VIII of the Act.
BACKGROUND
The Husband was born in 1971 in country F and was aged 51 at the conclusion of the final hearing. He is a self-employed allied health professional with degrees in Allied Health. He earns between $100,000-$110,000 per year, working full time including fly-in-fly-out work three days per month.
The Wife, an Australian citizen, was born in 1979 and was aged 43 at the conclusion of the final hearing. The Wife works three days per week as an Educator and has a degree in Education and postgraduate diploma in Allied Health. As asserted in those parts of her financial statement that were not controversial, she earns approximately $54,000 per year before tax and about $870 net of tax per week, or about $45,240. In addition to income from employment, the Wife receives (as at final hearing) child support as assessed in the amount of $179 per week and social security, totalling $114 per week.
The parties commenced cohabitation in 2006. They married in 2012 and separated under the one roof in March 2020, having previously separated for a period of four months in 2010. In April 2020 the Husband left the former matrimonial home. At the final hearing, the parties had not yet divorced.
Pursuant to interim orders made by consent on 8 February 2021, during school term the children live with the Wife and spend time with the Husband in a 2-week cycle. That is in week 1 from the conclusion of school Friday until commencement of school Monday, and in week 2 from the conclusion of school Wednesday until the commencement of school Friday. That can be described as a 5/9 arrangement or a 3+2/9 arrangement. The parties equally share school holiday and special occasion periods. Both parties seek an order for equal shared parental responsibility.
The parties have a significantly conflictual relationship. Following separation the Wife made allegations of family violence against the Husband, including drug and alcohol misuse and psychological and emotional abuse. The Wife alleged that the Husband has been ‘brainwashing’ and ‘alienating’ the children post-separation, including involving the children in the legal proceedings. The Husband denies these allegations. He alleges that during the relationship the Wife had severe alcohol and mental health issues and difficulties with communication and conflict post-separation.
THE PROCEEDINGS
At some point in 2020 the parties attended mediation and worked out or acquiesced in an interim or for-the-time-being parenting arrangement.
Interim proceedings
On 16 October 2020, the Husband commenced proceedings in this Court seeking parenting and property orders and that application had a first return in Court of 8 February 2021. The Husband then sought orders, among others, that the children live with the Wife and spend time with him in a 5/9 arrangement. He then sought that the FMH, where the Wife and children resided, be sold and for a 60/40 split of the sale proceeds in his favour after all associated costs of the property were paid. He sought that the parties each keep any vehicle, furniture and contents in their possession and split the funds in any joint bank account.
On 3 February 2021, roughly a week before the first return hearing, the Wife filed a response seeking orders that the children live with her and spend time with the Husband “as deemed appropriate by the Court”. That is without any defined positon as to the time the children should spend with the Husband. She sought orders for full and frank financial disclosure, a just and equitable division of the asset pool (that is no defined position), and a part property settlement of $47,000.
On 7 February 2021 (4 days after the Wife filed that response and the day before the first return to Court) the Husband filed an amended initiating application seeking different orders. He then sought, and has sought since, that the children live in an equal shared care arrangement with the parties, with such arrangement to be 4/3 nights in week 1 and 3/4 nights in week 2.
The competing applications came on for first return on 8 February 2021, the day after the Husband filed his amended application. The parties reached agreement on interim parenting and property orders, including participating in mediation after release of a family report. The agreed interim orders of 8 February 2021 substantially reflected the arrangements sought by the Husband back on 20 October 2020 in his initiating application (and alive until the previous day). That was that the children live with the Wife and spend time with the Husband in a 5/9 (3+2/9) arrangement with half school holidays and time on special occasions.
Interim property orders were made that day as well, including that the Wife continue paying the mortgage of the FMH (where she lived), a joint valuation be prepared and the parties each make full and frank disclosure. A privately funded family report was ordered. The matter was otherwise set down for an interim defended hearing on 18 June 2021 and a final hearing on 3 February 2022 as a 2-day matter.
On 9 June 2021 a response to a notice of risk by the Department of Families, Fairness and Housing (‘DFFH’), otherwise known as a ‘section 67Z response’ was released to the parties. The DFFH did not intend to intervene.
The interim defended hearing was listed on 18 June 2021. The parties received a family report by Mr B (‘Mr B’) prior to that hearing. I made orders, with the consent of the parties, for the Husband to pay to the Wife $40,000 by way of a part property settlement, for the parties to provide financial disclosure within 14 days of a request from the other party, and for the Husband to provide some specific disclosure. The parties otherwise agreed, without prejudice to their applications, to maintain the parenting arrangements pursuant to the interim orders made 8 February 2021, that is the 5/9 arrangement. The matter was adjourned for Final Hearing commencing 3 February 2022.
On 13 September 2021 the lawyers retained by the Husband stopped acting and the Husband commenced to represent himself.
On 16 September 2021 the Husband filed an application in a proceeding seeking an order that he be permitted to use the family report prepared by Mr B in intervention order proceedings between the parties in the Magistrates Court. The Wife opposed that application and sought costs.
On 5 October 2021 the matter was listed for Mention with respect to the various applications. On that day the Husband filed another application in a proceeding, seeking to be able to rely on the family report and otherwise noting that the Wife had relied on her own affidavit from these proceedings in the Magistrates Court proceedings without leave of the Court. I heard that mention on that date and I delivered ex tempore reasons and ordered that the parties each be permitted to rely on the family report prepared by Mr B in the family violence and/or intervention order proceedings (in the Magistrates Court). I made an order that the ex tempore reasons may be provided to the relevant Magistrate subject to any order, ruling or direction of that court as to admissibility or relevance. The parties were ordered to otherwise maintain the confidentiality of the family report. I did not make orders as to costs. That decision was settled and anonymised as McManus & Bracken [2021] FedCFamC2F 206.
The Final Hearing
The Final Hearing commenced on 3 February 2022. Unfortunately, the matter could not be completed in 2 days. In addition to 3 and 4 February 2022, the matter proceeded on 10 February 2022, 18 February 2022 and 5 May 2022. A total of 5 days. On the first and second days some time was lost to the parties while the court dealt with other matters. Only the parties were cross-examined. The Husband remained a litigant in person throughout the final hearing, and the Wife was legally represented by solicitor and counsel. Because of the COVID-19 pandemic all of the hearing was conducted electronically over Microsoft Teams.
The delivery of this judgment is well outside the three-month guideline for delivery of judgments of this Court. I apologise to the parties and their lawyers for the delay. In writing these reasons I have re-read the affidavits of evidence in chief and the exhibits and I have read the transcript of the proceedings. I have, assisted by that reading, a clear recollection of the demeanour of the witnesses, the evidence, the issues and the rhythm of the trial.
This 5-day trial was 5 days of cross-examination and submissions. Evidence in chief was by affidavit and the parties proceeded on the basis that evidence in chief had been read before the start of the hearing. It had been. Absent evidence in chief by affidavit, the giving of evidence in chief orally in the witness box would have taken many more days.
On 8 December 2022, while the trial decision was reserved, the Court was advised by email that the FMH had been sold and that the proceeds of sale, $622,990, were held in trust for the parties pending this decision. That email is now marked exhibit F19, 8 Dec 2022.
Documents relied upon
The Husband relied upon the following documents:
·Amended initiating application filed 7 February 2021;
·Affidavit of the Husband filed 17 January 2022;
·Financial statement filed 17 January 2022;
·Affidavit of the Husband filed on 21 January 2022;
·Annexure -1 to Husband’s affidavit (an affidavit in interim proceedings) of the Husband filed 17 June 2021[1], pages 10-11; and
·Paragraphs 2 & 3 of the Wife’s interim affidavit filed 3 February 2021[2]
[1] Although not relied upon in either parties list of documents the Husband was cross examined about this document on 4 February 2022 at TP 102.
[2] Wife cross examined upon on these paragraphs on 18 February 2022 at TP 241-242.
The Wife relied upon the following documents:
·Amended response to initiating application filed 18 January 2022;
·Affidavit of the Wife filed 18 January 2022;
·Financial statement filed 18 January 2022; and
·Affidavit in reply of the Wife filed 19 January 2022.
Exhibits tendered
Exhibits tendered are listed in the below chart:
Exhibit No: Description: Party Thursday 3 February 2022 C1 Draft joint asset and liabilities statement Court M1 [H] Suburb rates notice – [J] Council – 26 August 2021 Wife Friday 4 February 2022 M2 Bank Statements Bundle (re: $110,000) (55 page document) (specifically pages: 1, 2, 9, 10, 15, 18, 28, 47) Wife M6 Correspondence bundle (starting FLS letter of 28.4.2021) (44 page bundle) Wife M3 Country F Pension documents and correspondence (forwarded from Husband)
(in the emails dated 1.07pm and 1.08pm on 04/02/2022)Husband Thursday 10 February 2022 M4 The further and better particulars (attached to the Husband’s 5 October 2021 affidavit) Wife M5 Tender bundle of emails Wife F1 3 pages of bank cheque #...46 records “evidence of cheque” Husband F2 Bundle of 8 pages of email chain ending 25 July 2020 at 9.58am (annexure 9 of the Wife’s trial affidavit) Husband C2 Draft joint asset statement version 2 Court Friday 18 February 2022 F3 Husband’s current superannuation Husband M7 Wife’s superannuation at 3 February 2022 Wife M8 Table of Wife’s bank accounts Wife M9 [Council J] Rates Wife F4 Text message shortly after separation Husband F5 Email chain re: lawyer Husband F6 Husband’s Notice of assessment – year ended 30 June 2021 Husband F7 Wife’s affidavit of 3.2.2021 – paragraphs 2, 3, 24 and paragraph 24 of 16 October. Husband F8 “K Counsellors” Subpoena – 3.5.2021 Husband F9 Bank L …36 (savings maximizer) Page 362/404; Bank L …77 (everyday account) page 348 last page; Page 357 Husband F10 Text 11 and 11a – re [Husband] text message to [Mr M]. Husband M10 [C] Disclosure correspondence combined + FLS letter of 26 October Wife Thursday 5 May 2022 M11 Email chain starting 29 April re: sports Wife F11 Emails Re: children sports that are within the timeframe of M11 Husband F12 5 May 2022 – last email, morning of court Husband F10A Emails - Precursor to M11 emails Husband F13 Emails overlapping other emails Husband M12 Precursor to precursor emails Wife F14 Text message - Re: chips (text #4) Husband F15 Non-berating text (text #9) Husband F16 Text re: beer (text #11/12) Husband F17 Text (text #7) Husband F18 Annexure 1 from 22 April 2021 Affidavit Husband M13 Undertaking Wife Post-trial F19 8 December 2022 – Email and trust account statement showing proceeds of the sale of the former matrimonial home Husband TP56-60 Bundle of 14 pages of letters relating to disclosure of documents between the parties dealt with from pages 56-60 of the transcript of 4 February 2022 Court F9A Bank L …77 statements, pages 330-348 of court book Husband F9B Bank L # …36 statements, pages 359 to 362 of court book Husband Applicable law
Standard of proof
In these reasons, statements of fact are findings of fact. I apply section 140 of the Evidence Act 1995 (Cth) (‘the Evidence Act’) which states as follows:
(1)In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.
(2)Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:
(a) the nature of the cause of action or defence; and
(b) the nature of the subject-matter of the proceeding; and
(c) the gravity of the matters alleged.
Credit of the parties
Fox v Percy (2003) 214 CLR 118 (‘Fox v Percy’) is a High Court case concerning the skid marks of a Kombi van on the correct side of the road. When discussing the drawing of conclusions about truthfulness and reliability solely or mainly from the appearance of the witnesses, the plurality observed:
[31]…in recent years, judges have become more aware of scientific research that has cast doubt on the ability of judges (or anyone else) to tell truth from falsehood accurately on the basis of such appearances. Considerations such as these have encouraged judges, both at trial and on appeal, to limit their reliance on the appearances of witnesses and to reason to their conclusions, as far as possible, on the basis of contemporary materials, objectively established facts and the apparent logic of events…
[Citations omitted]
The context to that observation is that in Fox v Percy, the issue was which side of the road a collision between a Kombi van and two horse riders occurred. At first instance, one horse rider’s evidence was regarded as more reliable than that of the driver of the Kombi van and the Court found that the collision occurred on the wrong side of the road for the Kombi van. The High Court overturned the first instance decision because the objectively established fact of the skid marks of the Kombi van and the apparent logic of events incontrovertibly demonstrated that the Kombi van had been on its correct side of the road.
I have endeavoured to rely on contemporary materials, objectively established facts and the apparent logic of events in this case.
I am also guided by the observations of the Full Court in Adamson & Adamson (2014) FLC 93-622:
[89]In Carlson & Fluvium [2012] FamCA 32 (“Carlson”) at [165] to [169] Kent J made the following observations concerning the making of adverse credit findings against a parent in a parenting case:
[165]As a general proposition, civil courts usually refrain from specific adverse credit findings against litigants if the disposition of the case can legitimately be achieved otherwise. There are good reasons for that approach. For example, a specific finding that a litigant has misled the court might be tantamount to a finding of perjury. Further, it can be accepted as a given that human beings have the capacity to reconstruct or rationalise or even misconstrue past events or conduct, or to engage in self-justification, particularly in recounting events in highly emotive settings or in respect of highly emotive issues. This may make the distinction between an honest, although wrong, account on the one hand, and a deliberate and calculated obfuscation on the other, difficult to draw.
…
[169]Moreover, the resolution of parenting proceedings in this Court usually requires consideration of not only the credibility of the parties as witnesses or litigants but appreciation of the characters and personalities of them as people whose future relationship, or the context of that relationship with their child, the Court has the responsibility to decide.
[90]We agree with those observations. It follows from them that in parenting proceedings an adverse credit finding against a parent should not only be necessary to determine the real issues joined between the parties but should be soundly based, with due allowance for the limitations referred to.
I acknowledge the wisdom of those observations.
In this case I conclude that some of each parties evidence is not reliable. That does not mean that I have found that a party has been dishonest in evidence before me.[3]
[3] See Blass & Blass (2022) FLC 94-085; (2022) 64 Fam LR 625 (‘Blass’) at [40] & [41].
PARENTING
Family Law Act provisions
In deciding what particular parenting orders to make I must regard the best interests of the children as the paramount consideration as commanded by section 60CC the Act. I must consider the matters described in the act as primary considerations and additional considerations. I apply and take into account the whole of Part VII of the Act. I particularly apply the section 4 definition of major long-term issues, section 4AB (definition of family violence), sections 60CA, 60CC, 60CF, 60CG, 61DA and take into account the obligations of section 65DAC. Those are as follows:
major long‑term issues, in relation to a child, means issues about the care, welfare and development of the child of a long‑term nature and includes (but is not limited to) issues of that nature about:
(a) the child’s education (both current and future); and
(b)the child’s religious and cultural upbringing; and
(c)the child’s health; and
(d)the child’s name; and
(e)changes to the child’s living arrangements that make it significantly more difficult for the child to spend time with a parent.
To avoid doubt, a decision by a parent of a child to form a relationship with a new partner is not, of itself, a major long‑term issue in relation to the child. However, the decision will involve a major long‑term issue if, for example, the relationship with the new partner involves the parent moving to another area and the move will make it significantly more difficult for the child to spend time with the other parent.
…
4AB Definition of family violence etc.
(1)For the purposes of this Act, family violence means violent, threatening or other behaviour by a person that coerces or controls a member of the person’s family (the family member), or causes the family member to be fearful.
(2)Examples of behaviour that may constitute family violence include (but are not limited to):
(a) an assault; or
(b) a sexual assault or other sexually abusive behaviour; or
(c) stalking; or
(d) repeated derogatory taunts; or
(e) intentionally damaging or destroying property; or
(f) intentionally causing death or injury to an animal; or
(g) unreasonably denying the family member the financial autonomy that he or she would otherwise have had; or
(h)unreasonably withholding financial support needed to meet the reasonable living expenses of the family member, or his or her child, at a time when the family member is entirely or predominantly dependent on the person for financial support; or
(i)preventing the family member from making or keeping connections with his or her family, friends or culture; or
(j)unlawfully depriving the family member, or any member of the family member’s family, of his or her liberty.
(3)For the purposes of this Act, a child is exposed to family violence if the child sees or hears family violence or otherwise experiences the effects of family violence.
(4)Examples of situations that may constitute a child being exposed to family violence include (but are not limited to) the child:
(a)overhearing threats of death or personal injury by a member of the child’s family towards another member of the child’s family; or
(b)seeing or hearing an assault of a member of the child’s family by another member of the child’s family; or
(c)comforting or providing assistance to a member of the child’s family who has been assaulted by another member of the child’s family; or
(d)cleaning up a site after a member of the child’s family has intentionally damaged property of another member of the child’s family; or
(e)being present when police or ambulance officers attend an incident involving the assault of a member of the child’s family by another member of the child’s family.
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60CA Child's best interests paramount consideration in making a parenting order
In deciding whether to make a particular parenting order in relation to a child, a court must regard the best interests of the child as the paramount consideration.
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60CC How a court determines what is in a child's best interests
Determining child's best interests
(1)Subject to subsection (5), in determining what is in the child's best interests, the court must consider the matters set out in subsections (2) and (3).
Primary considerations
(2) The primary considerations are:
(a)the benefit to the child of having a meaningful relationship with both of the child's parents; and
(b)the need to protect the child from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence.
(2A)In applying the considerations set out in subsection (2), the court is to give greater weight to the consideration set out in paragraph (2)(b).
Additional considerations
(3) Additional considerations are:
(a)any views expressed by the child and any factors (such as the child's maturity or level of understanding) that the court thinks are relevant to the weight it should give to the child's views;
(b) the nature of the relationship of the child with:
(i) each of the child's parents; and
(ii)other persons (including any grandparent or other relative of the child);
(c)the extent to which each of the child's parents has taken, or failed to take, the opportunity:
(i)to participate in making decisions about major long-term issues in relation to the child; and
(ii) to spend time with the child; and
(iii) to communicate with the child;
(ca)the extent to which each of the child's parents has fulfilled, or failed to fulfil, the parent's obligations to maintain the child;
(d)the likely effect of any changes in the child's circumstances, including the likely effect on the child of any separation from:
(i) either of his or her parents; or
(ii)any other child, or other person (including any grandparent or other relative of the child), with whom he or she has been living;
(e)the practical difficulty and expense of a child spending time with and communicating with a parent and whether that difficulty or expense will substantially affect the child's right to maintain personal relations and direct contact with both parents on a regular basis;
(f) the capacity of:
(i) each of the child's parents; and
(ii)any other person (including any grandparent or other relative of the child);
to provide for the needs of the child, including emotional and intellectual needs;
(g)the maturity, sex, lifestyle and background (including lifestyle, culture and traditions) of the child and of either of the child's parents, and any other characteristics of the child that the court thinks are relevant;
(h) if the child is an Aboriginal child or a Torres Strait Islander child:
(i)the child's right to enjoy his or her Aboriginal or Torres Strait Islander culture (including the right to enjoy that culture with other people who share that culture); and
(ii)the likely impact any proposed parenting order under this Part will have on that right;
(i)the attitude to the child, and to the responsibilities of parenthood, demonstrated by each of the child's parents;
(j)any family violence involving the child or a member of the child's family;
(k)if a family violence order applies, or has applied, to the child or a member of the child's family--any relevant inferences that can be drawn from the order, taking into account the following:
(i) the nature of the order;
(ii) the circumstances in which the order was made;
(iii) any evidence admitted in proceedings for the order;
(iv)any findings made by the court in, or in proceedings for, the order;
(v) any other relevant matter;
(l)whether it would be preferable to make the order that would be least likely to lead to the institution of further proceedings in relation to the child;
(m) any other fact or circumstance that the court thinks is relevant.
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60CF Informing court of relevant family violence orders
(1)If a party to the proceedings is aware that a family violence order applies to the child, or a member of the child’s family, that party must inform the court of the family violence order.
(2)If a person who is not a party to the proceedings is aware that a family violence order applies to the child, or a member of the child’s family, that person may inform the court of the family violence order.
(3)Failure to inform the court of the family violence order does not affect the validity of any order made by the court.
60CG Court to consider risk of family violence
(1)In considering what order to make, the court must, to the extent that it is possible to do so consistently with the child’s best interests being the paramount consideration, ensure that the order:
(a) is consistent with any family violence order; and
(b) does not expose a person to an unacceptable risk of family violence.
(2)For the purposes of paragraph (1)(b), the court may include in the order any safeguards that it considers necessary for the safety of those affected by the order.
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61DA Presumption of equal shared parental responsibility when making parenting orders
(1)When making a parenting order in relation to a child, the court must apply a presumption that it is in the best interests of the child for the child’s parents to have equal shared parental responsibility for the child.
(2)The presumption does not apply if there are reasonable grounds to believe that a parent of the child (or a person who lives with a parent of the child) has engaged in:
(a)abuse of the child or another child who, at the time, was a member of the parent’s family (or that other person’s family); or
(b) family violence.
(3)When the court is making an interim order, the presumption applies unless the court considers that it would not be appropriate in the circumstances for the presumption to be applied when making that order.
(4)The presumption may be rebutted by evidence that satisfies the court that it would not be in the best interests of the child for the child’s parents to have equal shared parental responsibility for the child.
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65DAA Court to consider child spending equal time or substantial and significant time with each parent in certain circumstances
Equal time
(1)Subject to subsection (6), if a parenting order provides (or is to provide) that a child’s parents are to have equal shared parental responsibility for the child, the court must:
(a)consider whether the child spending equal time with each of the parents would be in the best interests of the child; and
(b)consider whether the child spending equal time with each of the parents is reasonably practicable; and
(c)if it is, consider making an order to provide (or including a provision in the order) for the child to spend equal time with each of the parents.
Substantial and significant time
(2) Subject to subsection (6), if:
(a)a parenting order provides (or is to provide) that a child’s parents are to have equal shared parental responsibility for the child; and
(b)the court does not make an order (or include a provision in the order) for the child to spend equal time with each of the parents;
the court must:
(c)consider whether the child spending substantial and significant time with each of the parents would be in the best interests of the child; and
(d)consider whether the child spending substantial and significant time with each of the parents is reasonably practicable; and
(e)if it is, consider making an order to provide (or including a provision in the order) for the child to spend substantial and significant time with each of the parents.
(3)For the purposes of subsection (2), a child will be taken to spend substantial and significant time with a parent only if:
(a) the time the child spends with the parent includes both:
(i) days that fall on weekends and holidays; and
(ii) days that do not fall on weekends or holidays; and
(b)the time the child spends with the parent allows the parent to be involved in:
(i) the child’s daily routine; and
(ii)occasions and events that are of particular significance to the child; and
(c)the time the child spends with the parent allows the child to be involved in occasions and events that are of special significance to the parent.
(4)Subsection (3) does not limit the other matters to which a court can have regard in determining whether the time a child spends with a parent would be substantial and significant.
Reasonable practicality
(5)In determining for the purposes of subsections (1) and (2) whether it is reasonably practicable for a child to spend equal time, or substantial and significant time, with each of the child’s parents, the court must have regard to:
(a) how far apart the parents live from each other; and
(b)the parents’ current and future capacity to implement an arrangement for the child spending equal time, or substantial and significant time, with each of the parents; and
(c)the parents’ current and future capacity to communicate with each other and resolve difficulties that might arise in implementing an arrangement of that kind; and
(d)the impact that an arrangement of that kind would have on the child; and
(e) such other matters as the court considers relevant.
Consent orders
(6) If:
(a)the court is considering whether to make a parenting order with the consent of all the parties to the proceedings; and
(b)the order provides (or is to provide) that a child’s parents are to have equal shared parental responsibility for the child;
the court may, but is not required to, consider the matters referred to in paragraphs (1)(a) to (c) or (if applicable) the matters referred to in paragraphs (2)(c) to (e).
(7)To avoid doubt, subsection (6) does not affect the application of section 60CA in relation to a parenting order.
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65DACEffect of parenting order that provides for shared parental responsibility
(1) This section applies if, under a parenting order:
(a) 2 or more persons are to share parental responsibility for a child; and
(b)the exercise of that parental responsibility involves making a decision about a major long‑term issue in relation to the child.
(2) The order is taken to require the decision to be made jointly by those persons.
(3) The order is taken to require each of those persons:
(a)to consult the other person in relation to the decision to be made about that issue; and
(b) to make a genuine effort to come to a joint decision about that issue.
(4)To avoid doubt, this section does not require any other person to establish, before acting on a decision about the child communicated by one of those persons, that the decision ha s been made jointly.
The Husband’s parenting case
The Husband seeks equal shared parental responsibility and a gradual increase in his time with the children until they spend equal time with each parent. In February 2022, the Husband argued for his time to increase to equal time by the end of 2022. This judgment is being delivered in May 2023, for which I apologise, and so that opportunity has passed. However, I take it that he still seeks a gradual increase in time over a 6 to 12 month period. He also said that the orders should be in place until the children turn 13 or have the “cognitive process to be able to make their own decisions”.
The Husband was cross-examined. The Husband presented as a confident, intelligent and determined witness.
The Wife alleges that the Father has discussed these proceedings with the children, and has “sought to influence the proceedings by manipulating the children, which has caused them significant distress”.[4] The Husband denies any conversation with the children about these proceedings, and asserts that the children are unaware of the proceedings and the conflict between the parents. He claims that he is always “honest” with the children and, he says, having been trained in dealing with child sexual abuse survivors, he says that lack of honesty should be avoided. The Husband’s evidence included the assertion that he had not attempted to influence the children on the way to the family report interviews. I do not accept that evidence. I find that he did attempt to influence the children on the way to the family report interviews and beforehand.
[4] The Wife’s outline of case page 3 of 8.
The evidence included that on 11 June 2020 the Husband had emailed the children’s school asserting the family “are no longer able to afford the school fees” and emailed the Wife asserting the children may have to be removed from the school. This distressed the Wife and she replied she would borrow if necessary to keep the children at their existing school. The Husband asserted in cross-examination:
They were never going to be taken out of the school. … I was trying to get the fees to be paid for by the school. … I had just lost all my contracts at the time and I was massively panicking, but about three weeks later … I got a contract from [client] to go into [workplaces] through COVID, which was a bit of a godsend, and that was me thinking, “Crap, are we going to get enough money?” But … there was no intention to take the children out of school. The intention was to get the fees waived for the year, … which I successfully did.
I accept that part of the Husband’s evidence. This episode is part of what demonstrates that what the Husband says about financial and children’s matters is not always reliable and, on this occasion, he unnecessarily raised the false prospect of removing the children from the school.
The Husband’s demeanour in cross-examination, the travelling cheque story (discussed later in these reasons), the school fees saga and the evidence about attempts to influence the children caused me to look carefully at his evidence, including where it conflicted with the Wife’s evidence and her case.
The Wife’s parenting case
Until final address the Wife conducted the final hearing seeking orders to reduce the Husband’s time with the children from the interim 5/9 regime to a 2/12 (plus a meal mid-week) regime.
The main arguments that the Wife put forward include:
·That she has always been the primary carer of the children;
·That the children are not coping with the current arrangements;
·That the Husband is involving the children in the parenting dispute and attempting to coach or turn the children against her;
·That the Husband does not have insight into the children’s needs to be able to care for them in a week-about arrangement;
·That the Husband’s motivation in seeking additional time with the children is financial in not wanting to pay the Wife any child support;
·The Husband’s time with the children had been and continues to be interrupted by his work in fly-in-fly-out or during his time with the children (and they are placed in another room while he speaks to clients); and
·That she did the overwhelming majority of home-schooling during the COVID-19 related lockdowns and that the Husband would ask her to home-school the children during his time with them.
The Wife was cross-examined and presented as an intelligent and determined witness.
The Wife’s trial affidavit contained many complaints and allegations about the Husband’s behaviour under the headings of “Abusive Behaviour of Husband” and “Abusive Behaviour to the Children”. The allegations were all denied by the Husband. The lack of particular events being actually described by the Mother and instead evidence being broad generalised statements of opinion about events, without assistance as to time or context, means that I cannot determine whether the behaviour complained of occurred, or occurred rarely, or often. But the recitation of allegations made clear the Wife’s opinion of the Husband as a parent. I do not find on the balance of probabilities that the Husband behaved as alleged.
The Wife also highlighted that over April and May 2022 a conflict arose over the Husband enrolling the older child in sports without consulting the Mother, telling the child about it (and exciting the child) and then asking the Mother to pay half the fees. Training overlapped with the other child’s activity and the Husband expected each parent to leave one child at one activity, travel to the other activity to drop the other child off, return to pick up the child first dropped off and then get back in time to pick up the other child. The activities were in different suburbs and travel would be by car in peak traffic. The Mother protested and asserted that this was impractical and that the Husband was dismissive of her concerns. I find that it was impractical and that the Husband was dismissive of her point of view. It is necessary to make orders as to extracurricular activities, but not as sought by the Wife.
The manner in which the Wife’s account of her interest in a deceased estate (discussed later in these reasons) was extracted from the Wife is part of what causes me to look carefully at her evidence. She was slow to be frank with the Court or the Husband about this interest.
SOME SIGNIFICANT EVENTS & CONTROVERSIES
Initial contribution controversy
The parties commenced cohabitation in 2006. The FMH was purchased in 2007 for $540,000. The agreed value of the FMH at the final hearing was $1,000,000, and the parties largely agreed to the terms of that sale. When the FMH was purchased in 2007, the parties agree that each of them contributed $105,000 to that purchase and each regards that as having been brought into the relationship and/or an initial contribution for the purposes of the property division dispute. The parties also took out a mortgage for $370,000, which had been paid down to around $270,000 at the time of the final hearing.
It is common ground that the Husband had more savings that that $105,000 when the parties commenced cohabitation, albeit the amount of his savings is in dispute. The Wife asserts that the Husband’s additional sum was, in her opinion, $20,000[5] or $25,000[6]. The Husband asserts he had “around $200,000” at cohabitation “from the sale of my property in [Country F]”, and I infer he means about $95,000 of the “remaining money in a saving account” accounting for the $105,000 spent on the FMH. The Wife says that amount could not have been so high, as bank statements from 2013 show he only had around $38,000 in savings and, the Wife argues, adding and subtracting the earnings and outgoings between those dates, the Husband could not have had any more than $25,000 after his $105,000 contribution in 2007. To determine this dispute I must look at contemporary materials, objectively established facts and the apparent logic of events.
[5] Wife’s opening 3 Feb 2022 TP 37 line 35.
[6] By inference from Wife’s trial affidavit at [28], “…the Husband had $130,000”.
The earliest bank record in evidence is page 9 of 55 of exhibit M2 4 Feb 2022. That shows that as at 19 October 2013 (about 6 weeks after the FMH purchase and about 9 years ago) the Husband had $37,905.92 in his Bank N account #...26 (‘the Bank N #...26 account’). It shows that on 29 October 2013 he transferred $4,500 into that account from a “Bank O savings” account (‘the Bank O savings account’) to give a balance of $42,405.92.
On 23 April 2019, the Husband withdrew $35,000 from the Bank N …26 account to purchase a “new car”. Between that withdrawal and 14 February 2020, about a month before final separation, the Husband transferred ten lots of $5,000 and one lot of $3,000 from the Bank O saving account to the Bank N #...26 account, leaving a balance of $118,954.[7] That balance remained as at separation.
[7] Pages 3 & 2, statement 25, of 55 of exhibit M2.
The Wife also alleges that the Husband did not provide full and frank disclosure by, she alleges, dishonestly claiming that he could not access his Bank N statements until much later than reasonably expected. He said that Bank N would not provide him with statements because he was not a current member, as his account was closed. He says he then escalated his request and was told to put his request in writing and pay a fee. The Wife’s counsel put it to him that he was making up that story, which he denied, and that was because he had been hiding that account from the Wife for years, which he also denied. At least some of the requested statements from Bank N were eventually supplied.
The Wife asserts separation occurred on 15 March 2020 and the Husband asserts the same date but that separation was under the one roof and with the Husband moving out of the FMH in April 2020.[8]
[8] See the family report at [5].
On 1 April 2020 (about a fortnight after separation), the Husband transferred $118,900, almost all the balance of his Bank N …26 account, in a transaction described as “Return to account”.[9] That “Return to Account” transaction was to a Bank O account #...41 and recorded on statement No …16. Also recorded on statement …16 is a transaction of $5,000 to “#...26” that corresponds to $5,000 credit recorded on statement …25 of the Bank N #...26 account. It does not appear to be in dispute that the Bank N account #...41 is the same account as the one referred to as the “Bank O savings” against the credit entries on the Bank N #...26 account statements, referred to above, going back to 2013. In any event, I infer so from the transactions referred to above, and in the absence of evidence of any other account at those times.
[9] Page 10 of 55 of exhibit M2.
Separation and the flight of the $110,000 cheque
On 3 April 2020 the Husband withdrew $110,000 from his Bank O account #...41 in the form of a bank cheque #...46.[10] What happened to the cheque and the Husband’s motivation in obtaining the cheque is in dispute. Initially the Husband did not disclose the $110,000 withdrawal that funded the cheque to the Wife. He later asserted (and still asserts) that he posted the bank cheque to his brother in Country F who, when asked a year later, posted it back.
[10] See exhibits F1 and M2 at page 10 of 55.
At some point in April 2020, and I infer later in April 2020 after the Husband had made the $110,000 withdrawal for the $110,000 bank cheque, the Husband moved out of the FMH.
At some point early after separation, in early 2020, the parties attended mediation and came up with what the Wife described in emails between them as a “parenting plan,” which was at least an interim agreement or acquiescence as to the parent’s time with the children. That arrangement provided for shared care but with the children living more nights with the Wife than the Husband.
The last entry in the Bank N #...26 account is on 10 June 2020 and is described as a “closing entry.” On 4 May 2020 the last bank statement[11] records a payment of $5,070 from that account for “Rental property”.
[11] Page 1 of 55 of M2.
On 11 June 2020 the Husband had $1,245.47[12] in his Bank O Everyday account #...93 and $52,509 in his Bank O corporate entity account #...98[13] and on that same day the Husband emailed the Wife[14] about children’s school, the local Catholic primary school, as follows:
… I’ve been emotionally struggling and I have struggled following your email chains…
As you know that I’m struggling financially and I’ve continued to give you money even though I’m not working much.
…
Due to the $300 per week, rent, bills and living expenses, I cannot afford to pay the private cover. Again, you could have spoken to me.
Maybe we should speak to the school about not paying fees due to financial problems or look at changing schools if we can’t afford [their local catholic school]. I’m happy to contact the school and inform them that we are no longer in a financial position to send the girls to their school. I am aware that Catholic school fees can be waived re changed financial circumstances.
[12] Page 15 of 55 M2.
[13] Page 18 of 55 of M2.
[14] 2nd email of M5.
Later that day the Wife emailed the Husband about him taking one of the children to an eye examination and his response included the following email[15] that day:
… I won’t approve a scan. We can get them for free at the hospital if she needs them.
I’ve emailed the school re the fees. I’m hoping that we can get financial assistance otherwise, we’ll have to take them out of [their local Catholic primary school].
[15] 3rd email of M5.
This expression of financial difficulty is only about two months after withdrawing the $110,000 for the bank cheque. Assuming that the funds in the Bank O Everyday account #...93 included provision to pay business expenses and income tax, the Husband’s assertions of financial difficulty were far from genuine and caused the Wife unnecessary stress.
The Husband issued proceedings on 20 October 2020 and filed an affidavit and a financial statement. No mention of the $110,000 withdrawal or the bank cheque or the sending of it to his brother in Country F is contained in those documents. There was provision and instruction in the standard financial statement form to “specify property … disposed of by you or on your behalf in the 12 months before separation and since your separation”. The Husband left that part blank and the only inference available to any reader of that document would be that the Husband was asserting in a formal court document that he had not disposed of property since separation. Because of those matters, I am satisfied that, when taken together, the Husband’s filed financial statement and affidavit did not make a full and frank disclosure of his financial affairs at that time.
The first return in Court was on 8 February 2021. Orders were made by consent that day that the parties make full and frank disclosure within 14 days, including all bank statements for accounts and credit cards in his or her name from 1 January 2016 to date (order 30(a) to (g). Counsel represented the Husband at that hearing and he says around that time his counsel told him to return the $110,000, although it is not clear on what day that was.
On 22 February 2021, the Husband’s solicitor wrote[16] to the Wife’s solicitor enclosing documents and the letter (‘the 22 February 2021 letter’) purported to fully comply with disclosure obligations. That letter enclosed statements for his Bank O account #...41[17] for the period 31 March 2018 to 31 December 2020 that would have included the transaction of the deposit of the $118,900 and the $110,00 bank cheque withdrawal in the previous April. No other reference to the $110,000 was made in the 22 February 2021 letter.
[16] Exhibit TP56-60 being bundle of letters between solicitors relating to disclosure that the Husband was cross-examined about and provided to the Court but, in error, not tendered, at page 1 of 14.
[17] Actually the customer number.
On 26 February 2021 the Wife’s solicitor wrote[18] to the Husband’s solicitor to deal with disclosure issues and asked:
6) On 1 April 2020 the Husband received a deposit of $118,900 into his [Bank O] account. On 3 April 2020 $110,000 was withdrawn with a reference of “Chq – [the Husband]”. We request disclosure of the source of those funds and a full accounting for how that sum was applied.
[18] Page 4 of 14 of Exhibit TP56-60.
On 9 March 2021 the Husband’s solicitor responded[19] to the 26 February 2021 letter and, I accept, on instructions from the Husband. As to the Bank N statements the solicitors responded:
[19] Exhibit TP56-60 at pages 6 & 7 of 14.
c) [Bank N]
We are instructed that this account was closed and consequently the remaining funds were transferred to another account.
Our client has made enquiries with the [Bank N] head office to obtain statements for this account however, his request has been refused as he is no longer a customer.
d) Deposit/transfer of funds
We are instructed that the $118,900 deposit into our clients [Bank O] account were funds remaining from savings our client carried over from [Country F] prior to meeting your client.
We are instructed that these were proceeds from the sale of his [Country F] property that our client recently gifted $110,00 of these funds to his brother as he is experiencing significant financial distress as a result of the ongoing pandemic in [Country F]. The remaining $8,000 have been used by our client on general living expenses.
[Emphasis added]
The return of the $100,000 cheque
On 31 March 2021, $110,000 was deposited by way of the same bank cheque #...46 (same as on 3 April 2020) into the Husband’s Bank O account #...16.[20] The Husband asserts this is the same bank cheque as he posted to his brother in Country F that was returned to him roughly a year later. The Wife asserts he just kept it as part of a scheme to hide $110,000 from her. The evidence shows clearly that this is the same bank cheque as purchased by the Husband roughly a year earlier.
[20] Page 47 of 55 of M2 and exhibit F1 10 Feb 2022.
The Husband says that the $110,000 has been spent by way of his legal fees, a $40,000 part property settlement to the Wife and other expenses.
From the events described above and the Husband’s demeanour in cross examination and in making submissions, I am satisfied that between 3 April 2020 (the day of the flight of the cheque) and the return of the cheque a year later, wherever the cheque actually was, that at all material times the $110,000 cheque was available to the Husband to deal with as he pleased.
From the events described above (including the Husband’s assertions to the school and the Wife of financial difficulty) and his demeanour when questioned about these events, I am satisfied that the Husband’s statements to the Wife and to the school (on 11 June 2020) were intentionally misleading and inaccurate at that time.
I do take into account that separation overlaid with the COVID-19 pandemic must have been a difficult time for all concerned and it may be that the Husband “panicked.” I infer that soon after the Husband’s barrister told him to put the $110,000 back he did so. He is fortunate to have received that advice and to have acted on it, as that has saved both parties considerable grief and legal expense. It is highly likely the amount of the cheque would have been treated as a “premature” disposition of assets[21] to the Husband in any event. I do take that into account.
[21] Townsend & Townsend (1995) FLC 92-569.
In all the circumstances, these events cause me to conclude that the Husband’s statements as to his financial affairs at any time may be unreliable and motivated to achieve a more favourable outcome in these proceedings rather than an accurate recollection of events. Also, that chain of events, once known to the Wife, only increased her general mistrust of the Husband.
Conclusions as to initial contributions
The evidence of the state of the Husband’s bank accounts between 2013 and 2020, referred to earlier, gives snap shots of his operating two bank accounts and, I infer, building up funds from income in excess of day-to-day expenses. I infer from those known transactions that from time to time he transferred those savings over to the other account, where the funds accumulated and ultimately reached $118,000 shortly before the flight of the bank cheque event.
That pattern of savings and transfer does not corroborate the Husband’s assertion that, some six years before the first transactions in evidence, the Husband had some $95,000 remaining in savings apart from the $105,000 he applied to match the Wife’s $105,000 in savings contributed to the purchase of the FMH. Save for the general, “I spent some then topped up the account” assertion and the 2020 “Return to account” entry (at the time of separation), the only evidence independent of the Husband’s assertions is the Wife’s assertion that he had about $130,000 in savings at the time of cohabitation. I do not regard the Husband’s account of his financial position at or about cohabitation as reliable for the reasons stated above. A party making an allegation of fact, in this case of a significant initial direct financial contribution (being the additional $95,000) has the burden of proof. A party is entitled to rely on their own recollection, contemporary materials, objectively established facts and the apparent logic of events. But the burden of proof remains with the party making the allegation.
For those reasons I am not satisfied that the Husband had an additional $95,000 at or about cohabitation or at the time of purchase of the FMH. Because of the Wife’s concession, and I infer a concession based upon her recollection of events at the time, I accept that the Husband did bring in more savings than the Wife and a total of about $20,000 more than the Wife, or about $130,000. I make that finding notwithstanding other aspects of the Wife’s evidence about financial matters may not be reliable and may be motivated by advancement of her interests in these proceedings.
The Pension
The Wife also alleges that the Husband has been aware of being entitled to a pension in Country F. She put this pension at an undisclosed value and the Husband’ evidence includes that in 2038 [at age 67] he will receive a state pension from Country F of roughly $AU200 per week. The Wife claims that he knew about the pension eligibility for years. He claims that he only made enquiries about any eligibility on the day of the orders of 18 June 2021 (as per notation C of those orders). On 15 October 2020, in a response to the Wife’s solicitors requesting information on any superannuation in Country F, the Husband denied any investments in Country F, and claimed the Wife had misled her solicitors. The Wife’s counsel said that was disingenuous, as he has vehemently denied having any superannuation in Country F, but that the pension scheme in that country is so similar to the Australian superannuation scheme that he should have known they were referring to that interest. The pension scheme in that country is tied to the length of work and income earned in that country, leads to a payment scheme at retirement and cannot be inherited or divided.
Orders were made by consent in June 2021 for the Husband to provide a pension statement as a part of the Husband’s disclosure obligations. The Husband claims that he then made enquiries and did not receive confirmation until November 2021, at which point he claims he sent the information straight to the Wife’s solicitors and that he did not know of his foreign entitlement when first asked. I do not accept the Husband’s assertion of only very recently learning about his overseas pension entitlement.
The Wife’s interest in Mr P’s estate
In early July 2020[22] (4 months after separation), the Wife’s mother’s former partner, Mr P, died. The Wife is a one-half beneficiary of his estate, which consisted mainly of a dwelling in Queensland (‘the Queensland property’). The Husband issued proceedings on 16 October 2020 (about 3 months after Mr P passed). The Wife had consistently pressed the Husband for full and frank disclosure from when she filed her response, where she pressed an interim order as follows:
8.That the parties mutually make full and frank disclosure as to their financial circumstances, including as to the applicant husband/father’s superannuation/pension entitlements in [Country F].
[22] Date alleged by Husband at [68] of his affidavit filed 14 Jan 2022 (‘trial affidavit’) and when that paragraph responded to not qualified or denied.
The Wife did not refer to any interest in Mr P’s estate at the time of filing her response or her first financial statement. Purporting to be unaware of the death of Mr P, on 22 and 23 July 2021, but referring to Mr P’s ill health, the Husband emailed polite inquiries about Mr P to the Wife. The Wife replied in unresponsive terms but, in the present tense, asserted the Husband did not have a relationship with Mr P “that extends beyond me.” The Wife’s reply reads as if Mr P was still alive and is misleading. The Wife asserts in her reply affidavit that she did not inform the Husband of Mr P’s passing because of her grief and because the Husband’s interest was financially motivated. I find that the Wife was concerned at the financial effect on the property proceedings of the Husband’s knowledge of the death of Mr P and was prepared to mislead him. However, the Husband asserted[23] that he had been informed of the death of the deceased in 2021, shortly after the death, as he was invited to the funeral. It is not clear to me whether the Husband already knew of Mr P’s death at the time he sent the inquiry emails.
[23] See at TP-27.
The Wife was slow to make full and frank disclosure of her interest in the estate or actively assist the ascertainment of the value of her interest in that estate. This is one of the matters that satisfies me that the Wife’s statements to the Husband and her evidence may not always be reliable and also that her evidence is affected by what she perceives might assist her financial interests in these proceedings. The damage of this event to the reliability of the Wife’s case was partly assuaged by the Wife’s disclosure of the will of the deceased only a few weeks after filing her first affidavit and financial statement.[24] Ultimately, in her reply affidavit (the topic not being touched in her trial affidavit or second financial statement), the Wife asserted that there may be a challenge to Mr P’s will and that otherwise she may receive up to $70,000-$80,000. Ultimately, when I pressed her counsel, the Wife conceded probate had been granted, the time for challenge to the will had expired and she expected to receive in the order of $100,000 from the sale of the Queensland property.
[24] See the bundle of correspondence relating to disclosure being M10.
The parties concede that no valuation was made of the Queensland property, nor was there any request for a valuation. At the start of the final hearing the Husband said that the property was worth between $400,000 and $600,000, which came to by way of a search on a real estate website for similar properties. He argued that would have made the Wife’s 50% share worth $200,000 to $300,000, and he adopted the larger figure. A council rates document was tendered by the Wife as exhibit M1 and showed the value of the land at $94,000. The Wife initially said that the property was worth $100,000, which would have made her 50% share worth $50,000. The property sold in between the February and the May hearing dates for $245,000. The Wife’s counsel submitted that, minus costs and fees, the Wife’s share would amount to slightly more than $100,000, but later conceded that the expected costs of the estate were likely expected to be in the range of $5000 to be paid from the roughly $30,000 cash in the estate apart from the dwelling.
There can be no suggestion the Husband has directly contributed to this asset, nor can there be any suggestion that the Wife was not required to give timely and full and frank disclosure of the likely value of her interest in Mr P’s estate.
It was not until I pressed during the hearing for up to date superannuation figures of both parties that comparable and up-to-date figures were provided. The Wife’s superannuation at final hearing was actually $24,000 more than her very recently filed outline of case and financial statement asserted.
The Wife’s approach to disclosure of her interest in the estate, the value of her superannuation, the extent to which her evidence in chief consisted of her opinion rather than what had occurred and her demeanour when cross examined caused me to look carefully at her evidence.
Both parties claim that the other has not been forthright in their disclosure obligations; the Wife with her interest in the Queensland property and the Husband in his Country F pension, the Bank N statements and the $110,000 travelling cheque.
The evidence of both parties was influenced by each party’s understanding of what would assist the outcome each sought in the proceedings.
The Husband’s income
In outline of case, the Wife asserted that the Husband’ income was “approximately $200,000 per annum” and he was cross-examined on the basis that he had earned $161,000 in the past and hence still would or could. The Husband asserted in his financial statement, in cross-examination and in submissions, that working at capacity and full time, his income was $100,000 per year. The determination of this question would significantly impact any adjustment of property division by section 75(2) of the Act, discussed later in these reasons.
The evidence included the Husband’s statement in his financial statement, documents and cross-examination. Annexure 1 to the Husband’s trial affidavit, upon which the Husband was cross examined was as follows;
5 February 2021
RE:[the Husband]
To whom it may concern,
We have acted as accountants and tax agents for the above-mentioned client since May 2019.
In this time we have prepared the 2018/19 and 2019/20 tax returns for [the Husband]. These returns declared the following taxable income:
Financial Year
Taxable Income
2018/19
$123,938
2019/20
$161,717
We have also prepared and lodged the September 2020 and December 2020 BAS's for [corporate entity]. Our records show [corporate entity] has earned the following for those six months and expects to distribute 100% of this income to [the Husband].
Item
Taxable Income
Income from Counselling Services (Exe. GST)
$62,235
JobKeeper (Exe. GST)
$10,500
Expenses (Exe. GST)
($6,550)
Net income from 01/7/20 - 31/12/20
$66,185
As of today, all tax debts due have been paid by both [the Husband] and [corporate entity], please see the attached ATO income tax account and ATO integrated account reports. The only pending payment is [the Husband’s] December 2020 PAYG instalment of $18,983, due to be paid on 2 March 2021.
If you wish to discuss this with me, please contact [email address] or directly on my mobile [mobile phone number].
Yours sincerely
The Husband was cross examined about that document as follows:
MS JOHNSON: And you – I think you indicated to his Honour that you still do fly in/fly out work?
THE HUSBAND: I do.
MS JOHNSON: And so how many days a week would that be? You said it was once a month, but for what period of time?
THE HUSBAND: Three days – three days of – three days without. Monday – leave on a Monday, fly back on a Thursday. Or drive and fly by.
MS JOHNSON: And that was on a sub-contracted basis from a [interstate]. Is that correct?
THE HUSBAND: It is.
MS JOHNSON: All right. And you have a lot of other work, because you were quite respected in the industry. Do you agree with that?
THE HUSBAND: I don’t know.
MS JOHNSON: Well, you’re getting a lot of work generated, aren’t you? You’re busy?
THE HUSBAND: I – it’s cyclical. Yes.
MS JOHNSON: And it dropped back a little bit during 2020. Would you agree with that – because of Covid, and you couldn’t do the fly in/fly out?
THE HUSBAND: I lost quite a lot of work, yes.
MS JOHNSON: Yes. And I think it was in 2019 financial year, was that when you earned 166,000 in that year?
THE HUSBAND: 2019 to 2020, I think.
MS JOHNSON: Okay. 166,000. Yes, thank you?
THE HUSBAND: Yes.
MS JOHNSON: And then – and the year prior to that it was 124,000?
THE HUSBAND: No, that’s actually not true.[25]
…
MS JOHNSON: … But, [the Husband], in that, there’s a report of [R consulting firm] and what they say is your taxable income in the 2019 year was 123,938. Do you agree that that was the figure?
THE HUSBAND: Yes.
MS JOHNSON: And in the 2019/2020 financial year, your taxable income was $161,717? Yes.
MS JOHNSON: And it also goes on to say your net income from 1 July 2020 to 31 July – December 2020 was 66,185 – so that’s a half year. You agree - - - ?
THE HUSBAND: Yes, possibly. Yes.
MS JOHNSON: Right. Okay. Well, just going back to what I was putting to you was that you earn a considerable income, you’re a high income earner. Do you agree with that?
THE HUSBAND: One year.[26]
[25] TP-100 to TP-101.
[26] TP-102.
In re-examination the Husband gave the following evidence:
THE HUSBAND: … it was just regarding the salaries on the two thousand and – my salary was quoted as 124,000 for 2018 to 2019. But there’s 14,000 of long service leave on that which showed up in my bank account, so when I worked for [Employer Q], and then when you put the 10,000 into my super, it gives me an annual income of 100,000. So even though the sum showed by – by accountant then is 124, it was actually a taxable income of 100.
HIS HONOUR: In terms of recurring income?
THE HUSBAND: Yes, because 14,000 was from my old employer as long service leave, and that was added onto that financial year.
HIS HONOUR: But you got it paid in cash?
THE HUSBAND: Yes. Just since – since the business – the – the – my – my premise of my business is that earn $100,000 a year, and the 161,000 was purely because of the death on [work site] where I flew up to [the site] on a weekly basis for a period of time to [perform work duties] to 300 [employees]. So what that saw me was attending the [work site] on a weekly basis for a couple of months, and then it dropped down to monthly, which brings my salary back to 100,000. So my actual salary of four years of being self-employed, three have been 100,000, and one has been 161.
HIS HONOUR: And the 161 was the – when you had the weekly basis instead of the monthly basis?
THE HUSBAND: In – in 2019.[27]
[27] TP-103.
In cross examination of the Wife, the Husband put the following matter:
THE HUSBAND: So my question is what – so I will make the statement. My income for 2021 was actually $100,850.[28]
[28] Exhibit F6, the Husband’s FYE 2021 ATO assessment shows his taxable income as $100,850.
HIS HONOUR: Was it is what you mean. Do you - - -
THE HUSBAND: Yes, yes, your Honour.
HIS HONOUR: Do you agree that was - - -
THE HUSBAND: Do you – yes.
HIS HONOUR: - - - my income.
THE HUSBAND: Yes, yes. Do you agree that that was my income?
THE WIFE:Yes. And I can see now there might be a date error.
THE HUSBAND: So in your affidavit - - -?
THE WIFE:- - - ’20.
THE HUSBAND: In your affidavit the – in your affidavit you’ve said my income 2020 to 2021. You actually contacted the Child Support Agency at the end of 2021 to give them that information, didn’t you?
THE WIFE:I don’t recall when I contacted them. However, it is a really confusing system and I think they work on a year behind. I’m – I’m not sure but, you know, I agree that I can see your tax return here is – it’s just over 100,000.
THE HUSBAND: So in your affidavit dated – and I’ve got the numbers – so I want to go to her affidavit dated – I think it was February 2021. In that affidavit you claim that I had an income of $200,000 a year. That’s correct, isn’t it?
THE WIFE:Yes.[29]
[29] TP-240.
In final address the Husband submitted as follows;
THE HUSBAND: … And, just jumping back onto the salary, the $160,000 that I earned in one year, one year alone - - -
HIS HONOUR: Yes.
THE HUSBAND: - - - was purely based on that one time of a death on [work site] where I was able to fly out for 10 consecutive weeks, which gave me a huge amount of income for one year. I supplied my tax returns to this court. My average salary is $100,000. I earned $100,000 last year. My current salary is $100,000. My earnings is $100,000, and I work full time for that. Not only do I work full time, I’m also able to cater for the girls in the time that I work, which again is opposite to what my former partner says. …[30]
[30] TP-350.
The Husband and the Wife were living together for most of the FYE 2020 and so I expect the Wife to have some rough idea about the “extra time away” account about the $161,000 in FYE 2020. That account was not challenged. The Husband’s points about the FYE 2019 income included or was bumped up by long service leave of $14,000 and the 6 months to December 2020 included $10,000 in JobKeeper, and these amounts were not recurrent income was not challenged. His point was that, when the non-recurrent income in those years was had regard to, his recurrent income to use as a guide to the future was closer to the $100,000 per year. There is substance to that point. Hence, his recurrent income for the FYE 2019 year would be about $109,000, not $124,000. His FYE 2021 income was $100,850.
Although other aspects of his evidence were unreliable, his evidence accords with contemporaneous records and the apparent logic of events. The Husband presented evidence about his income and that evidence was not shaken or contradicted. I accept that evidence. Hence, I do not accept that the Wife has demonstrated that the Husband’s usual income is in the range asserted by her. Because of his evidence, I regard the Husband’s income as being in the range of about $100,000 to $110,000 per year, which is in the ballpark of the $100,000 he asserts.
Because of the one year of an income of $161,000 in the FYE 2020 year, in the circumstances of that greater fly out work, I accept there is the uncertain potential for the Husband to earn more than the $100,000 to $110,000 range. However, like the Wife, his care of the children impacts on his ability to always maximise his income. If the same or similar circumstances arose again as in the FYE 2020 year, as a single parent the Husband would be unlikely be able to take up all of such work if it was available.
The Wife's income
The Wife's affidavit and outline of case and financial statement asserted her income for working 3 days each week or part-time as about $54,000 per annum. The Husband’s position was that she could greatly increase that income by working full-time. The evidence of her cross-examination included the following:
THE HUSBAND: And you also claim [in February 2021] that your salary was $39,000 a year. That’s correct, isn’t it?
THE WIFE:Yes. And if you look at my notice of assessment.
…
THE HUSBAND: So working for a not-for-profit organisation you have an annual salary that differs from your taxable salary. That’s correct, isn’t it?
THE WIFE:Well, it – yes. So when you – when you put in deduction ..... you’re - - -
THE HUSBAND: Okay. So but it’s different. Your actual salary … at that time was $55,000 a year, wasn’t it?
THE WIFE:What year? Sorry. What year are we talking about?
THE HUSBAND: In 2020. When you – 2021 when you submitted your affidavit that you earned $39,000.
…
THE WIFE:That was based … on my tax return.[31]
[31] TP-240.
…
HIS HONOUR: Before you do – yes. Before you do because I think you’re going to a different topic I just want to clarify. [The Wife], being a not-for-profit – and I think what’s being suggested is that you are able to salary sacrifice. Is that the case? That you’re able to salary sacrifice?
THE WIFE:I can do. Yes.
HIS HONOUR: Yes. And as at February 2021 were you salary sacrificing any of your income? Yes.
HIS HONOUR: Thank you. And as of now are you salary sacrificing any of your income?
THE WIFE:No.
HIS HONOUR: When did that change?
THE WIFE:Last year.[32]
…
THE HUSBAND: So, your Honour, if the – so my question relates back to the financial motivation. If I was to receive an increase in the care of the children it wouldn’t be cost effective for [the Wife] to return to work, more hours, because she wouldn’t actually have as much money if she returned to work. So I’m re-putting that question that to reduce the number of time the children spend with Dad is financially motivated?
THE WIFE:That’s not true. I’ve already answered that.[33]
[32] TP-243.
[33] TP-246.
In regards to contributions at the commencement of the relationship, the parties are in dispute. The Wife says that she contributed about $110,000 of savings and a second hand car of modest value to the relationship and that the Husband had around $130,000 and a second hand car at the commencement of the relationship. The Husband says that he had around $200,000 and a significantly valuable second hand car at that time. I do not regard either party as having an expert or reliable opinion of the value of the motor car each bought in, but it was not disputed the motor car the Husband bought in was significantly more valuable than the Wife’s motor car. It was common ground each contributed $105,000 to the initial purchase of the FMH early on in their relationship.[58]
[58] See Wife f18.1.22 at [27] and [28] and Wife’s reply f19.1.22 at [10]-[12] and Husband f7.1.122 at [10]-[13].
In regards to contributions during the relationship, the Husband says that each of them contributed equally.
In her outline of case, the Wife argues that this step should found as 60% assessment to her and 40% to the Husband of the jointly contributed assets (that is not including the interest in Mr P’s estate[59]), because:
·Both parties working to financially support the family;
·The Wife’s homemaking support allowed the Husband to achieve more financial success;
·The Wife making “overwhelmingly greater homemaking and parenting contributions”;
·That her homemaking contributions were made more arduous due to abuse from the Husband;
·The Wife being the main caregiver of the children, including taking off work to care for them;
[59] Erroneously said to be merely a financial resource not an asset.
The Husband disputes those factual assertions, claiming that he did not work Fridays so that he could assist with the homemaking, that the family employed a cleaner, that he undertook all home maintenance tasks and that his career had very little to do with the Wife.
A 60/40 assessment is equivalent to saying one party should be treated as contributing 1½ times the other. In final address, having given the 60/40 argument a run, the Wife changed her position to 50/50 contribution on the “jointly contributed assets” and the superannuation assets.
The Husband asserted in outline of case, and asserted realistically, that overall contribution should be regarded as 50/50. I infer he only regarded himself as contributing to the “jointly contributed assets,” that is the list of assets not including the Wife’s interest in Mr P’s estate. However, he still maintained he bought in substantially more than the Wife in direct initial contribution, $105,000 v $200,000.
I had regard to the Husband being a litigant in person. If I was satisfied that contributions during the relationship, in different roles, should be regarded as equal and the Husband did actually bring in $95,000 more than the Wife, it may not reflect the law to treat all contributions to the jointly contributed pool as equal in that event. The asserted disparity in initial direct contribution of the Husband was equivalent to about 35% of the purchase price of the FMH and about 11% of the jointly contributed pool, assuming a dollar in 2007 is about the same as now (which it is not). In other words, it would be a significant disparity of initial contribution if his assertions were correct.
Hence, in the circumstances of the Husband being a litigant in person and the potential failure or failure to understand the subtle difference between a 50/50 contribution position and a 50/50 outcome position, and the disparity of initial contribution being a significant controversy, I looked carefully to see if the evidence of his $200,000 assertion stacked up on the balance of probabilities. As discussed earlier, it did not.
However, on the Wife’s evidence the Husband bought in about $20,000 more than she did or an amount equivalent to about 3.5% of the purchase price of the FMH, the parties major financial asset or investment.
I am not satisfied of the facts that might justify the Wife’s contributions as being more arduous or that her greater homemaker and lesser income earning contributions should be regarded as greater than or superior to the Husband’s during the relationship. To have ever asserted, on the evidence, that her contribution should be regarded as 1½ times that of the Husband’s was unrealistic.
Overall I am satisfied that both of these parents worked long and hard in different roles in the relationship and since separation. That is so not withstanding that, in different ways, each now regards the relationship as unhappy for significant periods. In those circumstances, contribution should be assessed as roughly equal during the relationship and after.
What then of the small disparity of initial contribution? I bear in mind the wise warnings against compartmentalisation, and consider the length of the relationship and the overwhelming contribution of each parent during their relationship and since, over 16 years, in different roles. I am satisfied I should assess section 79(4) contribution (to the jointly contributed assets) overall as roughly equal or 50/50.
Sensibly, no one asserted that the Wife’s post-separation inheritance of roughly $125,000 was contributed to by the Husband at all and hence to that asset I asses contribution as 100/0 in the Wife’s favour. However, it is an asset notwithstanding the degree of uncertainty as to the precise figure and exactly when she will receive it, if not by now.
Step three: section 75(2) factors
I refer to and repeat the shopping list of section 75(2) factors or provisions recited earlier.
When the Wife sought that her contribution be regarded as 1½ times that of the Husband, that is 60/40 in her favour, she sought an adjustment of 15% on account of section 75(2) factors. That was primarily on her case that she would have the care of the children for substantially more time than the Husband (she then sought a 2/12 during school term arrangement), and her lesser income and lesser earning capacity. When, in final address, her case moved to assert equality of contribution overall, the Wife moved to seek a 20% adjustment to her under this section. The Husband seeks that there be no adjustment.
I refer to the observations of the Full Court on section 75(2) adjustments in Hobson v Hobson (2020) 61 Fam LR 557, [2020] FamCAFC 251 (‘Hobson’). The trial judge made an adjustment of 4% on account of section 75(2) factors. The Full Court found that adjustment to be inadequate and upheld the Wife’s appeal and remitted the matter for another hearing. I am assisted by the general principles of Hobson but the underlying facts, both extent of income disparity and the size of the asset pool, are very different and not comparable and so that case does not provide guidance as to the particular percentage adjustment in this case.
The observations of the Full Court in Clauson & Clauson (1995) FLC 92-595 (‘Clauson’) have guided judges and practitioners since 1995. In Clauson the Full Court did not interfere with a contribution assessment of 75/25 in the husband’s favour. But on a re-exercise of discretion, the Full Court made a section 75(2) adjustment of 25% and included the observation (at 81,911) about consideration of section 75(2) factors that:
…in any event it is the real impact in money terms which is ultimately the critical issue.
In Rosati v Rosati (1998) FLC 92-804 (‘Rosati’) the Full Court had reason to re-exercise the discretion in the division of the parties’ assets in a $1,500,000 pool of assets back in 1998. After finding that section 79(4) contribution should be regarded as 60/40 in the husband’s favour the Full Court found a 10% adjustment on account of section 75(2) factors was appropriate. But it is significant how the Full Court addressed the income disparity on account of section 75(2), way back in 1998, and it was addressed as follows at 85,046:
On our adjusted figure for the value of the parties net assets ($1,503,863), adjustment of 10% in the wife’s favour results in an increase in her entitlement of $150,386, and a corresponding reduction in the husband’s entitlement, producing a differential movement between them of $300,772 …
Decisions where the Full Court finds error and re-exercises the discretion or decision are of particular assistance to Judges and practitioners where the facts are similar enough to be roughly comparable. The principles of law stated on appeal would ordinarily be binding on the Trial Judge and the re-exercise of discretion on the facts a helpful example, although not binding.
In Wayne & Wayne [2010] FamCAFC 33 (‘Wayne’), the Full Court dealt with an appeal where the total asset pool was $937,000 (in 2010 dollars), the parties had 4 children aged 18, 16, 10 and 8. The 18 year old could be regarded as independent and the 16 year old, having left school, and was soon enough to be working or looking for work. The 10 and 8 year old children lived in a 5/9 nights per fortnight in school term and shared holiday arrangement, with the Husband for the 9 nights. The 16 year old also lived with the Husband. The Husband was found to have a full time earning capacity of $45,000 to $50,000 and the Wife worked 35 hours per week and had slightly less earning capacity[60]. Contribution was found to be 48/52 in the Wife’s favour and that was not interfered with on appeal.
[60] See at [58] and despite complaint the Full Court did not interfere with those findings.
In Wayne, in those circumstances, the Learned Trial Judge made a section 75(2) or third step adjustment of 10%. The Full Court found the extent of that adjustment to be an error of law and decided the adjustment should be only 4% in the circumstances. The rational of that decision can be easily discerned from the following paragraphs of the appeal decision:
[107]It is also important to recall what was said in Phipson & Phipson [2009] FamCAFC 28 when the Full Court was dealing with another appeal from the trial Judge in the present proceedings:
[39]It is always important to keep in mind that an adjustment of X% for s 75(2) factors leads to a disparity in the value of property received by the parties representing 2 x X%. It is that disparity, measured in “money terms”, that requires consideration in determining whether the result is just and equitable: see Campbell v Kuskey (1998) FLC 92-795 at 84,928.
[108]The 10% adjustment his Honour made on account of s 75(2) factors has led to a disparity in favour of the wife equivalent in value to 20% of the assets. In money terms this represents $187,733 out of a total asset pool of $938,665. Apart from the issues associated with the care, accommodation and maintenance of the children, the s 75(2) factors largely balanced out (save that as a result of the assessment of contributions the wife would have more capital than the husband). The husband was going to have whatever responsibility remained for the care, accommodation and maintenance of J. Both parties would have significant responsibility for the two younger children. It is true the wife will have the children with her about 20% more of the time than the husband, but this amounts to only a little more than 70 additional days a year.
[109]In our view an assessment leading to a disparity of $187,733 in the capital/superannuation to be received by each party was outside the reasonable ambit of the trial Judge’s broad discretion, even taking into account the matters found by his Honour relating to the non-payment of child support in the period after the husband gave up his employment. Our conclusion is sufficient to enliven appellate intervention (House v The King (1936) 55 CLR 499 and Norbis v Norbis (1986) 161 CLR 513). The appeal will therefore be allowed.
…
[112]In our view, given that the children will be with him around 40% of the time, the husband’s accommodation needs for the children would not be significantly different to those of the wife. However, in light of the agreement in relation to child support, we accept that the wife will bear the greater proportion of the burden of maintaining the two younger children (at least for the time being). The husband, on the other hand, will have whatever responsibility remains for accommodating and maintaining J. The other s 75(2) factors, in our view, are evenly balanced, save for the fact that as a result of the assessment of contributions the wife will have 4% (or $37,546) more of the assets/superannuation than the husband.
[113]Taking these matters into account, and the failure of the husband to pay child support after giving up his employment, we consider there should be a 4% adjustment for s 75(2) factors, creating a disparity of 8% between the parties – or in money terms an amount of $75,093.
In Lovine & Connor another Full Court approved the observations in Wayne and demonstrated that the percentage, the actual dollar amount of the adjustment and the disparity the adjustment creates should be taken into account when considering a section 75(2) adjustment.
The disparity that a 15% adjustment made between the parties in Lovine & Connor contributed to that Full Court finding that such an adjustment was wrong in that case. However, the facts of that case are very different to this one and so that case does not assist with what would be an appropriate adjustment in dollar or percentage terms but the cited principle remains applicable. In Wallis & Manning (2017) FLC 93-759 the Full Court, after a discussion of the section 75(2) factors applicable to that case, concluded:
[169]In our view, s 79(4)(e) requires those matters to be taken into account in arriving at orders that are just and equitable as between the parties. In arriving at an appropriate assessment for those factors, a dollar value of it should be uppermost in our minds [79] and, of course, the ultimate disparity in entitlements which it might produce. That dollar value is, in turn, dependent upon the value of the interests in property of the parties.
In Varnham & Moses (2021) FLC 94-007 the Full Court again approved the “real money” approach of Wayne, and of Phipson & Phipson [2009] FamCAFC 28 (cited in Wayne), and of Lovine & Connor.
There can thus be no doubt that settled law requires, when considering all relevant section 75(2) factors that the “real money” as well as the “percentage” must be considered, as well as the disparity between the parties, that any adjustment creates.
In final address, the Wife’s counsel argued that there should be a 20% adjustment (on the jointly contributed pool) if in the previous stage I found contributions to be equal. In terms of dollar amounts, 20% of a roughly $804,000 pool is $160,800. The Husband earns approximately $100,000 per year before tax as a subcontractor. A $160,800 adjustment is therefore worth about 18 months of the Husband’s income.
Discussion of the factors
The following headings, for convenience, paraphrase clauses of section 75(2), but I take into account the whole of the relevant cause.
Age and state of health
The Husband is 52 years old. He submits and I accept that he is in good health.
The Wife is 43 years old and says that she suffers from several medical conditions, but there was no question that her health is good enough to parent the children and pursue the professional occupation for which she is well qualified.
Income, property, financial resources and capacity for employment
The Husband earns approximately $100,000 per year, as discussed above, and will have a pension or benefit in Country F of around $10,000 per year from the year 2038. The Wife says that the Husband earns, or has the potential to earn, approximately $200,000 per year, but I do not have evidence that substantiates that assertion. I regard the Husband’s earning capacity, in the circumstance of the care of the children being with him for substantial periods, as in the range of $100,000 to $110,000. The Wife has not demonstrated that his income at the time of trial is other than what he asserts, about $100,000 per year.
At the end of the second step or contribution analysis, each party will have 50% contribution assessment of the “jointly contributed” asset pool or about half of that jointly contributed pool of $804,000, or $402,000. In addition, the Wife has her interest in Mr P’s estate of about $125,000 that the Husband has not contributed to. The Wife asserts she intends to give her brother half of what she receives from Mr P’s estate and the Husband did not challenge that assertion. The Wife may do so but she is not bound to. So, at the end of the section 79(4) second step of the preferred approach the Wife has about $527,000 of assets and the Husband $402,000 of assets.
In addition, each has roughly $176,000 or $177,000 in superannuation.
As asserted in those parts of her last financial statement that were not controversial, the Wife earns approximately $54,000 per year before tax working three days per week, and after income tax of $179 per week, about $859 net of tax per week or about $44,700 per annum. In addition to income from employment the Wife receives (as at final hearing) child support as assessed in the amount of $187 per week and social security totalling $114 per week. Net of tax and inclusive of child support and government benefits the Wife receives about $1,160 per week.
In the long run, by working 5 full days rather than 3, the Wife has a capacity to earn more and I infer and find up to or about ⅖ or 40% more before tax.
At the time of final hearing the Husband’s income was, he said, about $100,000 per year. After taking account of the reliability of the Husband’s evidence, I am not satisfied the Husband’s income at this time is substantially more than he asserts. The Husband asserted, without contradiction, that his income tax on his $100,000 per year ($1923 per week) income at trial was $521[61] per week, leaving a net of tax income of about $1,402 per week. From that the Husband pays $187 per week in child support, leaving a net of tax and child support income of about $1,215. The Wife’s sources of income, including means tested pension and child support, is about $50-$100 per week less than the Husband’s at the time of final hearing.
[61] Hence with medicare levy the Husband’s tax on $100,000 would be about $25,000 or in the ball park of his $521 per week assertion of what he currently pays or has paid.
The Wife had minimal savings at the final hearing, not attributable to the part-property settlement of $40,000 in June 2021, and will to be in receipt of around $125,000 as beneficiary of Mr P’s estate including the sale of the Queensland property and the cash available to that estate. The Husband claims that she is the beneficiary of two more wills for estates worth over $1,000,000, and the Wife says that the two subject persons are very much alive, so there is no possible way of knowing when that may be received, how much she may receive or if she will receive anything at all. I do not place any weight on the Wife’s potential entitlement under current wills of people alive and well. She has, once her actual current balance was ascertained, around $177,000 in superannuation, about $24,000 more than her last financial statement and outline of case asserted.
I accept that, sooner or later, the Wife will be able to earn substantially more than currently by working full-time rather than 3 days per week.
Care of children under 18 years
Both parties have the care of two children, aged 9 and 8. As I have determined, the children will primarily reside with the Wife and spend time with the Husband in a 5/9 plus half school holidays regime. Although the Wife will likely receive child support as assessed, she will also likely be the back-stop for children’s expenses and the Wife will have more costs relating to the children going forward than the Husband.
Commitments of each of the parties to support themselves or a child
Both parties will have the substantial expense of the care of the children and the Wife more than the Husband.
Responsibilities of either party to support any other person
The parties did not provide any indication that this factor was relevant in these proceedings.
Pension or benefit
The Husband will receive around $10,000 per year as a part of his pension in Country F in many years’ time. This factor warrants only a little weight.
The Husband and the Wife both have around $177,000 in superannuation in Australia although it is likely that the Husband will, with his greater earning capacity, make greater superannuation contributions until retirement than the Wife.
Reasonable standard of living
Both parties will have a reasonable standard of living in the future.
Would maintenance assist education or training
This is not relevant in this case. Both parents are highly educated.
Effect on creditors
The parties did not provide any indication that this factor was relevant in these proceedings.
Effect party contributed to the earning capacity and property of the other
The Husband obtained his second degree during the marriage. Neither party submitted this factor was significant in this case and I will not speculate as to the effect of that on his income.
Protect parties role as a parent
The Wife says that she intends to work less than full time until both children are at secondary school. I accept that is her intention. During the relationship, after the children were born, she worked part time to be available for them as a parent, and she wants to continue in that role. Parliament regards that as a proper motivation and directs I take it into account and I do.
Whether party cohabiting with another person
There is no evidence of either party cohabitating with another person.
Child support to be provided
The Husband pays and will pay child support as assessed. Each party suspects the other of making the parenting applications they do and manipulating his or her income by not maximising income earning capacity to either maximise or limit child support. The evidence does not support such a finding not withstanding that aspects of each parties’ case and evidence were influenced by their desired outcome in these proceedings. I have already taken into account child support paid as impacting on the household income of each party in these reasons.
Any fact or circumstances required to take into account
Both parties have the pressing need for capital to be able to provide for housing for themselves and the children. It turns out both parties current superannuation balances are about equal.
The Husband paid for reports to a total cost of $13,000 and an existing order provides the Wife should bear half of that expense.
Conclusion as to section 75(2) adjustment
The principle matters pressed when a significant section 75(2) factor adjustment was sought were income disparity and care for the children. The income disparity after child support paid and received and government benefits received at the time of trial was not significant.
The children will live in a 5/9 plus half school holidays shared care, but not equal shared care, arrangement. That means both parents will have significant responsibility for the care, accommodation and maintenance of the children, but the Wife will have that responsibility more than the Husband. The care of the children will likely impact on the income of each parent, but to a greater degree on the Wife.
The section 75(2) adjustment pressed is on the “jointly contributed” assets of about $804,000. The 20% adjustment sought, giving a 40% disparity on account of section 75(2) factors, is beyond reasonable and is unrealistic. That would, if put into effect, create a disparity of $321,100 and the Wife would have the additional asset of the roughly $125,000 interest in Mr P’s estate less the part she chooses to give to her brother. The Husband would end up with 30% of $804,000 or $241,000 and the Wife would end up with $562,000, or $321,000 more or 2⅓ times what the Husband does plus retain her interest in Mr P’s estate.
Parties should carefully consider the ultimate effect of his or her proposal before pursuing it in costly and stressful litigation.
After a long relationship with two children, both parties will have substantial care for the children. Both parties need capital to house themselves and the children.
However, all of the circumstances compel still compel a section 75(2) adjustment on the jointly contributed pool. That adjustment will be 5% of that pool or $40,500, creating a disparity on account of section 75(2) factors of $81,000 in the Wife’s favour and she will retain her interest in Mr P’s estate and her superannuation.
Although not the measure, that disparity is roughly equivalent to about one year of the Husband’s income after tax and about one year of the Wife’s net-of-tax current employment-only income. The Husband will end up with assets of 45% of the jointly contributed pool or about $361,800.
The Wife will end up with about 55% of that pool or about $442,000 plus her interest in Mr P’s estate. The Husband has not contributed to Mr P’s estate.
Each party will retain about $177,000 of superannuation.
Step four: just and equitable and conclusion
Standing back and looking at the overall effect of at 45/55 division of the jointly contributed assets I am satisfied orders to give effect to that will be just and equitable.
CONCLUSIONS AND CALCULATIONS AS TO PROPERTY MATTERS
The effect of an overall division of 45/55 of the jointly contributed assets will be as follows:
·To the Wife: 55% of $804,418 is a total of $442,429.90 and the Wife retains of that pool her “keep” of $46,889 and the difference of $395,540.90 (63.49% of the funds held in trust) will come from the funds held in trust.
·To the Husband: 45% of $804,418 is a total of $$361,988.10 and the Husband retains of that pool his “keep” of $134,538 and the difference of $227,450.10 (36.51% of the funds held in trust) will come from the funds held in trust.
Any interest or charges or imposts relating to the funds held in trust will be borne in the same proportions pro rata. From the funds held in trust, any sale costs such as repairs or preparation of the FMH as were agreed should be refunded to the party that paid those before distribution to the parties. From the Wife’s share or part the sum of $6,500 should be paid to the Husband for her half of the cost, if not already paid, of the family report as provided at order 13 of the interim orders and paid by the Husband in the first instance.
In regards to the parties’ superannuation, the Wife seeks an order splitting the parties’ superannuation evenly. The difference of each party’s superannuation ($177,383 and $177,199 respectively) does not require any superannuation splitting payment order.
Before publishing these reasons I sought clarification from the parties as to Easter and special occasions where I had not been addressed.
I certify that the preceding two hundred and sixty-three (263) numbered paragraphs are a true copy of the Reasons for Judgment of Judge O'Shannessy. Associate:
Dated: 26 May 2023
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