MIKONO & PEREZ

[2012] FamCA 761

FAMILY COURT OF AUSTRALIA

MIKONO & PEREZ [2012] FamCA 761

FAMILY LAW – CHILDREN – where the mother relocated from Sydney to Melbourne with the parties’ children  – where the father continues to reside in Sydney – where the mother contends the father consented to her relocating – where the father denies ever providing his consent – where the father currently sees the children on three weekends per month – where the father seeks an order that the children live in Sydney with their mother – where the effect of that order, if granted, is to force the mother to return to Sydney – consideration of the power to make a “coercive” order – where “[t]he proper exercise of such a power is likely to be rare” – whether such an order should be made in this case – where there were incidences of family violence during the parties’ relationship – where the parties’ children witnessed that violence – consideration of the children’s best interests – where it is in the children’s bests interests to remain living in Melbourne with the mother and to spend overnight time with the father on two weekends per month.

FAMILY LAW – PROPERTY SETTLEMENT – de facto relationship – where the parties were in a relationship for five years – where the father brought three properties into the relationship, two of which continue to form the vast majority of the pool – where the father also brought significant liabilities into the relationship – where those liabilities are included in the “pool” – where the father, through his parents, also contributed a significant amount of property and funds during the marriage – where the mother has had the primary care of the children post-separation and will continue to do so – where the father will be solely responsible for the costs associated with spending time with his children – where the father will be solely liable for the significant liabilities included in the “pool” – where orders made that property be distributed in the proportion 80:20 per cent, in favour of the father.  

Family Law Act 1975 (Cth)
Family Law Rules 2004 (Cth)

Adams & Randall [2011] FamCAFC 204
AIF v AMS (1999) 199 CLR 160
B & B: Family Law Reform Act 1995 (1997) FLC 92-755
Biltoft & Biltoft (1995) FLC 92-614
CDJ v VAJ (1998) 197 CLR 172
Chang & Su (2002) FLC 93-117
Chorn & Hopkins (2004) FLC 93-204
Coghlan & Coghlan (2005) FLC 93-220
Cowley & Mendoza (2010) 43 Fam LR 436
Donnell & Dovey (2010) 42 Fam LR 559
H v E (1999) FLC 92-845
Hardie & Capris [2010] FamCA 1046
In the Marriage of Af Petersens (1981) FLC 91-095
In the Marriage of Brandt (1997) FLC 92-758
In the Marriage of Clauson (1995) 18 Fam LR 693
In the Marriage of Ferraro (1993) FLC 92-335
In the Marriage of Lee Steere (1985) FLC 91-626
Knight & Knight (No 3) [2009] FamCA 1080
Mallet v Mallet (1984) 156 CLR 605
Manolis & Manolis (No 2) [2011] FamCAFC 105
Mazorski & Albright [2007] FamCA 520
McCall & Clark (2009) FLC 93-405
MMR v GR (2010) 240 CLR 461
Norbis v Norbis (1986) 161 CLR 513
Norman & Norman [2010] FamCAFC 66
Pierce & Pierce (1999) FLC 92-844
Rosati v Rosati (1997) FLC 92-757
Sampson & Hartnett (No 10) (2007) 38 Fam LR 315
Sealey & Archer [2008] FamCAFC 142
Starr & Duggan [2009] FamCAFC 115
Steinbrenner & Steinbrenner [2008] FamCAFC 193
Taylor & Barker (2007) 37 FamLR 461
Turner v Dunne [1996] QCA 272
U v U (2002) 211 CLR 238

APPLICANT: Mr Mikono

RESPONDENT: Ms Perez

FILE NUMBER: SYC 2973 of 2010

DATE DELIVERED: 31 August 2012

PLACE DELIVERED: Brisbane

PLACE HEARD: Sydney

JUDGMENT OF: Murphy J

HEARING DATE: 5, 6, 7, 8 March 2012; Last written submissions received 3 April 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Mater

SOLICITOR FOR THE APPLICANT: McDonell Milne Toltz Family Lawyers

COUNSEL FOR THE RESPONDENT: Mr Batey

SOLICITOR FOR THE RESPONDENT: Coleman & Greig Solicitors

COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: Mr Monzo

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: Stephen W Bell & Associates

Orders

PARENTING

IT IS ORDERED THAT

Parental Responsibility

(1)It be declared that the presumption of equal shared parental responsibility is rebutted in the best interests of N born … April 2007 and H born … June 2009 (“the children”).

(2)The mother shall have, to the exclusion of the father, parental responsibility in respect of all major long-term issues (as that expression is defined in the Family Law Act 1975 (Cth)) in respect of the children, save that the mother shall, prior to making the sole ultimate decision about any such issue:

(a)Use her best endeavours to advise the father in writing of the decision intended to be made;

(b)Seek the father’s written response in relation thereto;

(c)Consider, by reference to the best interests of the children, any such response prior to making any such decision;

(d)Advise the father in writing as soon as reasonably practicable of her ultimate decision.

(3)The mother shall have sole parental responsibility for decisions regarding the day-to-day care, welfare and development of the children whilst the children are in her care.

(4)The father shall have sole parental responsibility for decisions regarding the day-to-day care, welfare and development of the children whilst the children are in his care.

Live With

(5)The children live with the mother in Melbourne.

Time

(6)The children shall spend time with the father as agreed between the parties, or, failing agreement, as follows:

(a)From 5:00pm Friday to 4:00pm Sunday in Melbourne one weekend in each month;

(b)From the time of the next flight from Melbourne to Sydney after 5:00pm on a Friday, to 4:00pm Sunday in Sydney one weekend in each month;

(c)In Sydney:

(i)for the first half of the June/July school holidays commencing from the time of the next flight from Melbourne to Sydney after 5:00pm on the last day of school before the holidays commence and concluding at 5.00pm on the following Friday;

(ii)for the second half of the Easter and the September/October school holidays commencing at 5.00pm on the middle Friday and concluding at 4:00pm on the day before school recommences, commencing in 2013;

(iii)for the first half of the Christmas/New Year school holidays from the time of the next flight from Melbourne to Sydney after 5:00pm on the last day of school before the holidays commence and concluding at 5.00pm on Christmas Day each even year, commencing in 2012; and

(iv)for the second half of the Christmas/New Year school holidays commencing at 5:00pm Christmas Day and concluding at 4:00pm on the day before school recommences each odd year, commencing in 2013.

(d)Where the father is not otherwise spending time with the children in accordance with these Orders on Orthodox Easter:

(i)In Melbourne, from 5:00pm on the day immediately preceding Orthodox Easter to 4:00pm on Orthodox Easter in odd years, commencing 2013.

(7)Changeover for time with the father in Sydney shall occur at the Melbourne domestic airport and changeover for time with the father in Melbourne shall occur at the children’s school if the children are at school on the Friday and otherwise at the mother’s home.

(8)So as to facilitate time with the children in Sydney in accordance with these Orders, the father shall accompany the children on flights to and from Melbourne until H reaches an age at which he can fly unaccompanied, by reference to the relevant policy(s) of the airline with which the children are travelling.

(9)The father shall bear all expenses associated with spending time with the children in accordance with these Orders.

Communication

(10)The mother shall provide to the father in writing within 14 days of the date of these Orders, a mobile or telephone number and email address via which the children can be contacted.

(11)The father be at liberty to communicate with the children at any reasonable time using the number provided by the mother in accordance with the preceding paragraph.

(12)The mother shall facilitate telephone communication between the children and the father at any reasonable time requested by the children.

(13)The father be at liberty to communicate with the children by mail and email at all such reasonable times as he might wish.

(14)The mother shall retain each written communication and a hard copy of each email communication until the children attain the age of 18.

Provision of Information about the Child

(15)Each party shall do all such things and sign all such documents as may be necessary or required to:

(a)Authorise each parent to communicate with, and receive communication from, any doctor or health professional (of whatever type), whom the children consult, failing which this Order shall, of itself, constitute such authority;

(b)Speak to, and receive oral or written communication from, any school or other educational institution, including any day care centres, attended by the children, after payment of any necessary fee, failing which this Order shall, of itself, constitute such authority;

(c)Keep the other parent appraised of their residential address, telephone contact number, and other electronic communication address or addresses for the purpose of communication with the children (such as Skype and email), with any changes to same being notified to the other party in writing within 48 hours of same occurring;

(d)Notify the other parent as soon as reasonably practicable should either of the children suffer any medical emergency, serious illness, or other significant issue affecting the children’s health or welfare, whilst in their care.

(16)The mother and father shall be at liberty to attend any and all extracurricular activities undertaken by the children and each party shall do all things and sign all documents reasonably necessary to ensure that the attendance of each parent is authorised.

(17)Pursuant to s 65DA(2) and s 62B, Family Law Act 1975 (Cth), the particulars of the obligations these Orders create and the particulars of the consequences that may follow if a person contravenes these orders and details of who can assist parties adjust to and comply with an order are set out in the Fact Sheet attached hereto and these particulars are included in these orders.

PROPERTY

IT IS ORDERED THAT as and by way of settlement of property pursuant to s 90SM of the Family Law Act 1975 (Cth):

(18)The property of the parties or either of them be distributed in the proportion of 80 per cent to the father and 20 per cent to the mother, such distribution to be effected in accordance with the following paragraphs.

(19)The father shall forthwith do all such things and sign all such documents as may be required so as to sell:

(a)The real property situated at E, Sydney, NSW …; and

(b)       The entirety of his share portfolio.

(20)Save as might otherwise be agreed in writing between the parties, the property at E shall be listed for sale at an asking price of $900,000 and sold at a price recommended by a licensed real estate agent nominated by the President of the Real Estate Institute of New South Wales.

(21)As soon as reasonably practicable after the sale of the E property and the father’s share portfolio, the father shall do all such things, sign all such documents and pay all such fees as may be required to obtain an assessment from the Australian Taxation Office of the Capital Gains Tax (“CGT”) payable on the sale of each of the E property and the father’s share portfolio.

(22)Each of the parties shall do all such things and sign all such documents or authorities as might be required to cause to be paid to the trust account of the mother’s solicitors, to be held in the joint names of the parties, the sum of $160,000, such sum to be paid from the proceeds of sale of the said real property or share portfolio (whichever shall first occur) and which such sum shall:

(a)Be invested forthwith on behalf of the parties as they might jointly direct in writing or, failing such agreement, as determined by the mother’s solicitors;

(b)Thereafter be used to pay the CGT assessed in accordance with the previous paragraph of these orders, within seven (7) days of such assessment; and

(c)Thereafter as to the balance remaining, to pay forthwith 80 per cent to the father and 20 per cent to the mother.

(23)The parties shall each and both as the case may be do all such things, sign all such documents and pay all necessary fees as may be required to:

(a)Vest absolutely in the father, to the exclusion of any right, title, interest or claim which the mother has or may have in relation to:

(i)     E2 property, Sydney, NSW … which for the purposes of these orders shall be deemed to have a value of $700,000;

(ii)    His one-third interest in M property, NSW … which interest, for the purposes of these orders, shall be deemed to have a value of $280,000;

(iii)     $46,891 currently held in the trust account of McDonell Miln Toltz Family Lawyers;

(iv)     $43,352 loan owing to the father from P Pty Ltd;

(v)    $156,723 in respect of moneys expended by the father in legal fees;

(vi)     His superannuation interest with AMP flexible in an amount of $9,650; and

(vii)   Chattels currently in his possession and bank accounts currently in his name which, for the purposes of these orders shall be deemed to have a total value of $25,000.

(b)Vest absolutely in the mother, to the exclusion of any right, title, interest or claim which the father has or may have in relation to:

(i) The … Volvo motor vehicle, Registration No. … which for the purposes of these orders shall be deemed to have a value of $23,000;

(ii) $110,000 in respect of moneys expended by the mother in legal fees;

(iii) Her superannuation interests in ING Super, AMP Super and Super Trace in amounts totalling $36,866; and

(iv) Chattels currently in her possession and bank accounts currently in her name which, for the purposes of these orders shall be deemed to have a total value of $7,000.

(c)  The father shall do all such things, sign all such documents and pay all necessary fees as may be required to refinance, or otherwise assume sole responsibility as between the father and the mother for, and to indemnify the mother in respect of:

(i)   The mortgage to ANZ, account no. …86    currently secured over the real property at E (deemed for the purpose of these orders to have a balance of $399,999);

(ii)The mortgage to ANZ, account no. …41     currently secured over the real property at E2 (deemed for the purpose of these orders to have a balance of $171,519);

(iii)The liability to ANZ in respect of loan account no. …31 and Equity Manager Account no. …47 currently secured over both real properties situated at E2 and E (deemed for the purpose of these orders to have a balance of $98,667 and $446,938 respectively);

(iv)The father’s liability in respect of a loan with Westpac secured over M property, NSW  (deemed for the purpose of these orders to have a balance of $183,333); and

(v)The amount of $8898.87 owing on the father’s credit card.

(d)  The father shall raise and pay to the mother within seven (7) days of the sale of the E property or share portfolio, whichever last occurs, a cash sum calculated as follows:

Cash sum = [(A + (B - C) x 20%] - D

Where:

A = The total of the net proceeds of sale of E property and the share portfolio less $160,000 as provided for in paragraph 22 of these Orders

B =$1,438,482, being the total of the property and superannuation interests retained by each of the parties specified at paragraphs 23(a) and 23(b) of these Orders;

C =$1,309,355 being the total of the liabilities specified at paragraph 23(c) of these orders; and

D = $96,866 being the total of the property and superannuation interests retained by the mother specified at paragraph 23(b) of these orders, less her half of the CGT accounted for in A, above.

Dismissal of Other Applications

(24)All outstanding Applications are otherwise dismissed and removed from the list of cases awaiting finalisation.

Other Orders

(25)Paragraph 2 of the “Terms of Settlement” annexed to the Orders of Justice Cohen made on 6 September 2010 be discharged.

(26)All subpoenaed documents shall be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 2973 of 2010

Mr Mikono

Applicant

And

Ms Perez

Respondent

REASONS FOR JUDGMENT

1.The parties to these proceedings seek orders in respect of their children, N (born in April 2007) and H (born in June 2009). Orders are also sought pursuant to Part VIIIAB of the Family Law Act 1975 (Cth) (“the Act”).

2.The parties commenced cohabitation in early 2005 and separated in March 2010. Whilst the parties were engaged, they never married. There is no dispute that the parties were in a de facto relationship. For ease of reference, when dealing with the parties’ property dispute I will refer to the parties as the father and mother so as to maintain consistency throughout these Reasons.

3.After separating in March 2010, the mother travelled with the parties’ two sons to Melbourne. She continues to live there with the parties’ children. The mother contends that the father consented to her relocating with the children to Melbourne. The father denies ever providing consent. Since orders were made by Watts J on 21 February 2011, the father has spent time with the children on three weekends per month. The present arrangement is such that each month, the mother travels with the children to Sydney for one weekend and the father travels to Melbourne on two weekends per month. On each of those weekends, the father spends time with the children during the day, however the children return to their mother’s care overnight. At present, the father is solely responsible for the expenses associated with that time. Further, pursuant to orders of Watts J of 21 February 2011, the mother presently has sole parental responsibility for the children.

4.The “property of the parties to the de facto relationship or either of them” is largely agreed. There are, however, two significant points of contention. The first is the father’s interest as tenant-in-common with each of his parents in a rental property in Sydney. The father contends that he holds his interest on trust for his parents. The mother contends that the interest ought to be included in the property pool. The second issue is an assertion by the father that he owes $121,000 to his parents, as a result of regular loans by them to him. The mother contends that the father’s parents do not expect the father to repay the money. The father seeks to include the amount as a liability.

The Issues

5.The primary issues for determination in this case then, are:

·   whether or not the children should live in Sydney or in Melbourne;

·   if the children live in Melbourne, what time should they spend with their father, and how should the cost of that time be distributed between the parties, if at all;

·   what can properly be considered “property of the parties or either of them” and, specifically, does the father have a beneficial interest in real property he holds as tenant-in-common with his parents; and,

·   whether the father’s parents loaned the father $121,000 such that that amount should be included in the pool as a liability.

The Parties’ Parenting Proposals

6.The mother proposes that the children remain living with her, in Melbourne. Unlike the mother in U v U (2002) 211 CLR 238 (“U v U”), and many other so-called “relocation cases” (see, for example, AIF v AMS (1999) 199 CLR 160 (“AIF v AMS”)), the mother in the present case has already relocated to Melbourne from Sydney with the parties’ two small children. Indeed, the children have lived in Melbourne for over two years. However, like the mother in U v U, the mother in the present case has expressly stated that, should the Court order that the children live in Sydney, she would return to Sydney so as to remain their primary carer. As Gaudron J made plain in U v U (at 247), however, this ought not be considered an “alternative proposal” of the mother; rather, it is the father’s proposal.

7.

I record that I do not regard the mother’s “reasons for relocating” other than with “the seriousness they deserve” (U v U at [36], per Gaudron J). I recognise that the mother is perfectly free to seek to maintain for herself and her children the life which she says will be of benefit to them and productive of happiness for her. The right of the mother to choose where she lives is not gainsaid in these proceedings. So, too, the father enjoys the same freedoms. He says he cannot (and will not) move to Melbourne and his reasons, too, are treated with the “seriousness they deserve” and are not gainsaid (see, also, Hayne J in

U v U

).

8.The orders sought by the father are set out in the submissions by his counsel, handed up at the outset of the trial. In essence, the father seeks an order that he and the mother share parental responsibility for the children and that the children live in Sydney with the mother and spend increasing amounts of time with him. The father does not seek, and has not earlier sought, an order that the children live with him. Put another way, the father seeks no order that the children live with him in Sydney irrespective of where the mother lives. He concedes by his application that the children’s best interests lie in living with their mother. The mother also proposes that the children live with her, but in Melbourne.

9.In terms, the orders sought by the father amount to an order requiring the mother to relocate to Sydney. The first issue, then, is whether the Court has the power to make such an order. The matter is not free from doubt, but the weight of authority suggests that the Court does have the power to make a “coercive” order requiring a parent to relocate so as to be the primary carer of a child/children (see H v E (1999) FLC 92-845 at [19]; Sampson & Hartnett (No 10) (2007) 38 Fam LR 315 at [33]; and B & B: Family Law Reform Act 1995 (1997) FLC 92-755 at [10.62] – [10.65]).

10.Those same authorities, however, also make plain that “[t]he proper exercise of such a power is likely to be rare” and orders made pursuant to an exercise of that discretion would be “…at the extreme end of the discretionary range…” (Sampson at [58] and [83]). It seems axiomatic then, that authority suggests there should exist similarly “rare” or “extreme” factors that warrant the Court exercising its discretion to make “coercive” orders requiring a parent to relocate so as to continue to be the primary carer of their child/ren (Sampson at [17]).

11.I am not prepared to exercise the power to either make a parenting order (s 65D) or mandatory injunction (s 68B) so as to force the mother to live in Sydney against her will. No factors present in this case suggest that any such power should be exercised. I reiterate, no order is sought that the children should be ordered to return to Sydney independently of their mother. (I emphasise that this is not a criticism; indeed it can be seen as a commendable acceptance on the part of the father of the important role of the mother in the children’s lives at this stage of their respective development).

12.In the event that the children are not ordered to return to Sydney, the father proposes that he spend time with the children, as and from 1 June 2012 as follows:

i)From 3:00pm Friday to 5:00pm Sunday in Melbourne one weekend per month, with the father to be responsible for the costs of that weekend, including, for instance, travel, accommodation and so on; and

ii)From 3:00pm Friday to 5:00pm Sunday in Sydney one weekend per month, with the mother to be responsible for the costs incurred in making the children available in Sydney for that time.

13.The father also seeks time with the children during the school holidays and on significant occasions, such as Christmas Day and Orthodox Easter. 

14.The mother proposes that the children spend time with their father as and from 14 April 2012 as follows:

i)If the father lives “geographically proximate” to Melbourne, from 12:00pm Saturday to 4:00pm Sunday each alternate weekend and from 3:15pm to 7:30pm each Wednesday.

ii)Alternatively, if the father remains living in Sydney, each alternate weekend in Melbourne from 12:00pm Saturday to 4:00pm Sunday.

15.The mother also provides for time between the children and the father on significant occasions and “[o]n the weekend falling mid-way through the second and third Victorian School Holiday period…in Sydney.” In terms of the cost of the children travelling to Sydney, the mother seeks an order that the father be solely responsible for any such cost, in addition to the costs of her accompanying the children, which she proposes continue until 28 September 2012 “or upon such time as the children readily separate from the Mother and until such time as the parties agree the children may travel unaccompanied [by the mother]…” as and from which time, the mother proposes that the father fly to Melbourne to collect the children and return to Melbourne with the children at the conclusion of time.

16.Among the orders sought, at the conclusion of the trial, by the Independent Children’s Lawyer (“ICL”) is an order that the children live with the father, should the mother not return to Sydney and that the father “…payout the mother’s current lease on the Melbourne property…” should the mother relocate to Sydney. Counsel for the mother submitted – correctly in my view – that “[n]o questions were asked [of the father during cross-examination]” about the children living predominantly with him, nor about his capacity to pay out the lease on the mother’s Melbourne property.

17.Leaving aside for the moment these issues, the Independent Children’s Lawyer seeks the following orders, some of which, it should be said, I find perplexing, not least the order that the children live with the father if the mother resides in Melbourne. No such order is in the contemplation of either party nor, as I understand it, ever has been. The orders proposed are:

a)The parties have equal shared parental responsibility for the children;

b)The children live in Sydney “at the father’s residence or with the mother”;

c)If the mother relocates to Sydney “the children to live with the mother”; and

d)If the mother remains in Melbourne “the children to live with the father” and the mother to spend time with the children:

i)One weekend each four weeks in Melbourne from 3:00pm, Friday to 5:00pm Sunday, with the mother “to pay the cost of airfares”;

ii)Two weeks each four weeks in Sydney “at times agreed between the parties” with the father the pay the costs incurred in travelling to Sydney.  

Parenting Orders

Relevant Principles

18.Best interests are to be determined by reference to the considerations mandated in Part VII of the Act, which are to be examined within the stated Objects and Principles. I do not propose to repeat here those Principles; I am cognisant of the legislative provisions and the Full Court decisions which have interpreted them. I have attempted to set out my understanding of those principles in Cowley & Mendoza (2010) 43 Fam LR 436 (“Cowley”) and in Hardie & Capris [2010] FamCA 1046 (“Hardie & Capris”). I make it clear that I rely here upon my understanding of those principles as outlined in those cases. 

19.I repeat in particular, what I said at paragraphs [38] – [40] in Cowley: findings need to be made which inform other aspects of the process upon which the Court must embark, including the power to make parenting orders in circumstances where s 61DA applies.

20.In that respect, I cited in Cowley a passage from the Full Court decision in Starr & Duggan [2009] FamCAFC 115 where the Full Court, in referring to Taylor & Barker (2007) 37 Fam LR 461 and Sealey & Archer [2008] FamCAFC 142, said that “the legislation does not mandate consideration of the relevant sections in any particular order” (although the Court went on to suggest a “logical approach”).

21.Findings as to best interests inform a number of different, but related, aspects of the process: the rebuttal of the presumption of equal shared parental responsibility (s 61DA(4)); informing decisions relevant to s 65DAA(1)(a) or s 65DAA(2)(c); the application of the Objects and Principles of Part VII; as well as being the paramount consideration in making a particular parenting order (s 60CA)).

22.Although best interests plays multiple roles within Part VII, the Act mandates but one means of determining best interests in the particular circumstances applicable to the particular child/children the subject of the proceedings, namely an analysis of those considerations set out in s 60CC of the Act. (See, for example, Donnell & Dovey (2010) 42 Fam LR 559 at [103]).

23.By way of corollary, the assessment of best interests is to be conducted within the statutory objective of maximising parental involvement consistent with that assessment. Ascertaining best interests by reference to the Act’s mandatory signposts must embrace the fact that “…[i]t is a mistake to think that there is always only one right answer to the question of what the best interests of a child require … Best interests are values, not facts” (CDJ v VAJ (1998) 197 CLR 172 at 219).

Best Interests – The Present Circumstances

24.

The parties’ post-separation parenting is, as I find, (borrowing the words of

Dr T, who prepared a family report in these proceedings), “…indicated [by] a reasonably cooperative relationship and an accommodating attitude by both parents…” That this is so, notwithstanding the mother’s allegations of family violence by the father, is a testament to the parties’ capacity to be child-focused in their post-separation parenting. Indeed, as Dr T said during cross-examination by counsel for the mother, despite the previous conflict between them, the parties have “…both got a good capacity to set aside their differences and…have a united front, to some extent, in front of the children and behave politely towards each other.”

25.Further, the mother, I accept, readily acknowledges the importance of the children spending time with their father. Similarly, the father said during cross-examination, I consider honestly and sincerely, that “[the mother] was a fantastic mother” and that she had done a “fantastic job” with the children. It is unsurprising then, that the father proposes that the children should live primarily with their mother, regardless of whether that is in Melbourne or in Sydney.

26.As a result of the factors just referred to, and the proposals of the parties, many of the matters that would otherwise be left to the Court to determine by reference to s 60CC are either the subject of agreement or not seriously challenged.

27.Findings about best interests are informed by a consideration of the relevant statutory factors. It is important to be clear about a particular application of that fact. If orders were to be informed by a judgment as to the rectitude of particular conduct, or moral judgments about what parents should or should not have done, results may be different. Here, as will emerge, I find the mother’s move to Melbourne occurred (contrary to her sworn assertions) without the consent of the father. But, as the father recognises (even by the terms of the orders he seeks), the inquiry is as to these young children’s best interests, not to the “morality” or “appropriateness” of the the actions of their parents.

Section 60CC Considerations

Section 60CC(2)(a) and (b)

28.Neither of the parties disputes that the children would benefit from a meaningful relationship with each of their parents. Dr T’s report and oral evidence confirm that “a meaningful or significant relationship with both parents is going to be of advantage to [both [N] and [H]]” (McCall & Clark (2009) FLC 93-405 at 83,476). I am satisfied that, for both N and H, a relationship with each of their parents is “important, significant and valuable” to them (Mazorski & Albright [2007] FamCA 520 at [26]).

29.The mother alleges that the father was physically violent towards her during their relationship and was frequently verbally abusive. That father denies ever physically assaulting the mother, other than throwing a wallet at the mother at or about the time of N’s christening. The father also denies being verbally abusive and contends that the mother was aggressive towards him. The mother concedes that early in their relationship she threw a lamp at the father but that that was the only violent act perpetrated by her upon him.

30.

The mother also alleges that the father physically assaulted N on

16 March 2010, when he was three years of age. The mother subsequently reported this incident, together with other alleged incidents of physical abuse of her by the father, to the police. Subsequently, the father was charged with common assault of N. An Interim Apprehended Violence Order was also made on 22 March 2010 preventing the father from, inter alia, residing in the former matrimonial home whilst the mother and children continued to live there.

31.I accept the mother’s evidence that there was “family violence” (see s 4 of the Act). I accept that the father was intimidatory and overbearing. I reject the father’s account of the physical altercation between he and the mother in November 2007.

32.Both the charge of common assault and the application for a final Apprehended Violence Order were heard on 7 July 2010 in the W Magistrates Court. The transcript of proceedings in the Magistrates Court indicates that whilst the father denied “throwing” N onto the chair as alleged by the mother, he did admit to smacking him but denied intending to harm him. Ultimately, the charge of common assault was dismissed. The application for a final Apprehended Violence Order was also dismissed because, as the Magistrate determined, whilst the mother was at that time “fearful” of the father and had reasonable grounds to be fearful, she had relocated to Melbourne and there had been no violent incidents involving the mother and father since that time. Consequently, “her reasonable grounds to fear [were] no longer available…”

33.Both parties accept that since the mother relocated to Melbourne there have been no incidents of violence and, according to the mother “…our [referring to both her and the children] safety is no longer an issue…”.

34.In addition to the allegation of physical abuse against N by the father, the mother subsequently alleged that the father posed a risk of harm to the children by way of sexual abuse. Specifically, the mother contended in an affidavit filed 18 May 2011 that N had, upon returning from a visit with his father, “fondle[d] himself in an unusual way and he then bent over to attempt to lick his private parts.” The mother stated that she asked N “who does that” and N responded that his father did, whilst sitting on the couch. Interim orders were subsequently made by Watts J on 21 February 2011 that time between the children and their father be supervised. Subsequently, the supervised time spent between the father and the children was with the father’s mother or sister. On 20 October 2011, Watts J made orders by consent discharging the requirement that time between the father and the children be supervised.

35.There is no evidence to which I have been taken in the mother’s material that indicates why she subsequently entered into the consent orders. Dr T, however, reports that “[f]rom what [the mother] said she seemed to have formed the view that there was not any evidence that [N] had been abused by his father and she did not feel that it was necessary for him to be supervised…”.  Indeed, the mother expressly stated during cross-examination that she did not consider the father to pose a risk of harm to either of the children.

36.Dr T expressed the opinion that N had, during the period of cohabitation, been exposed to his parents’ disputes and that he was “affected by this and that on one hand he loves his father and is attached to him but on the other hand he is a bit frightened of him…”. I reiterate, however, that Dr T was of the view that, post-separation, “the boys [have been] quarantined fairly effectively from any negativity…”.  Dr T observed that neither of the children showed “any distress and seemed quite comfortable and undisturbed being in the presence of their parents during changeover…”

37.The father has completed an anger management course as well as two parenting courses. The father has also continued to see a psychologist, Ms B, to “improve [his] parenting for [his] children.” I consider that the father’s control of anger has been a problem; I think it likely to have improved significantly since separation as a result not only of his seeking professional assistance, but also as a result of the geographical distance now separating him and the mother.

38.I also note that the orders made by Watts J on 21 February 2011 were subsequently amended, by consent, on 9 December 2011 to include the “final order” that the children spend no time with the paternal grandfather unless the father was supervising that time. Neither party challenges or seeks to alter that order, which remains in effect.

Section 60CC(3) considerations

Views

39.Dr T considers, and both parties agree, that neither N, who is presently aged five, nor H, who is three years of age, are of an age or stage of maturity where their views will assist in determining their best interests (s 60CC(3)(a)). While children might be too young or immature to express a view or views which might significantly impact on the terms of orders made about them, their views can, and should be, heard otherwise within the proceedings.

40.N tends to express sadness at having to leave his father at the conclusion of their time together. Further, the mother readily concedes that N has expressed a desire to spend more time with this father.

Nature of Relationship

41.It is uncontroversial that both children look forward to spending time with their father (s 60CC(3)(b)(i)) which is consistent with the “strong bond” Dr T observed between the boys and their father.

42.The children also plainly have an involved relationship with members of each of their parents’ extended families that is beneficial to them.

Willingness and Ability to Facilitate Relationships

43.Notwithstanding the fact that each of the parties is plainly devoted to, and love, their children, Dr T expressed the view that the father’s “personal embitterment towards [the mother]…conflicts somewhat with his commitment to [the children]” and “while [the father] will support the boys’ relationship with their mother, this will be less affirmative than in the mother’s home”

(s 60CC(3)(c)). I accept that evidence.

44.I consider that a large component of the father’s “embitterment towards [the mother]” stems, rightly or wrongly, from his perception of the mother’s deceit in and about her relocation to Melbourne. Notwithstanding the father’s “embitterment”, I consider that each of the parties are willing and able to facilitate and encourage a close and continuing relationship between the children and the other parent (s 60CC(3)(c)). So much is plain from their post-separation co-parenting and, in particular, each party’s respective contributions to the arrangement and facilitation of time between the father and the children.

Violence and Orders

45.I have already discussed the allegations of family violence and the interim Apprehended Violence Order made in March 2010 (s 60CC(3)(j) and (k)) and made findings in relation to same.

Sex and Lifestyle

46.No issues of sex, lifestyle or background of the child’s parents or aboriginality arise (s 60CC(3)(g) and (h)). Both parties have Greek heritage and both recognise and encourage the children’s engagement with their heritage.

Capacity

47.It is also conceded by each of the parties that the other has the capacity to provide for the children’s physical, intellectual and emotional needs. Again, so much is clear from the nature of the co-parenting relationship that has existed post-separation (s 60CC(3)(f); ss 60CC(4) and (4A)).

Practical Difficulty and Expenses

48.The father contends that, should the children remain living in Melbourne, he cannot afford to continue to make two trips to Melbourne each month and pay for the mother and the children to travel to Sydney for one weekend per month (s 60CC(3)(e)). To this effect, the father asserts that he has spent approximately $87,000 to date on travelling to Melbourne and having the children, together with the mother, travel to Sydney.

49.It is important to note that for the bulk of this time, the father has had the additional expense of either his mother or sister travelling with him to Melbourne to supervise the visits with his children. Indeed, the father continued to have his family travel with him to Sydney after the consent orders were made by Watts J in October 2011 so as to ensure no further allegations were levied against him. Now, however, he is no longer paying for family members to travel with him to Melbourne and any future expense in that regard will not be his.

50.The father proposes that, in the event the children are to remain in Melbourne, he shall bear the expenses associated with him travelling to Melbourne on one weekend per month and the mother shall bear the expenses of travelling with the children to Sydney one weekend per month. The mother asserted during oral evidence that she did not have the means to afford to travel to Sydney. The father accepted that the mother would not be able to obtain full-time employment until H commenced school in approximately two years’ time.

51.The father proposes paying into a separate account in excess of $60,000 representing rent at a rate of approximately $600 per week for 24 months should the mother return to Sydney. The father stated during oral evidence that he could sell shares he presently holds so as to pay the mother’s rent for two years should she relocate to Sydney. No reason is given why that sum quarantined in that way would not be available to meet the costs of travel and accommodation should the children remain living in Melbourne.

52.The father has a business that is growing, albeit “slowly, slowly”. He does not have primary care of the children. He draws $700 per week from his business. He pays $205 dollars per month (or about $51.25 per week) in child support. The proposals of each of the parties, should the children remain in Melbourne, would see the father spending one less weekend in Melbourne with them each month, but overnight time during the weekends he does have the children. He no longer bears expenses for other family members’ travel.

53.As to communication with the children (s 60CC(3)(e)), the father asserts that he has previously purchased an iPad for the mother so that he and the children could communicate via Skype. According to the father, the mother subsequently returned the iPad to the father indicating it was too difficult to use. I was dissatisfied with the mother’s evidence on this issue which struck me as disingenuous at best. Skype, or similar, and email will, particularly as the children get older, be an important means of geographically remote children staying in regular contact with their father. I have an expectation that these parents will do all that they can to facilitate it.

54.Notwithstanding these issues, the father regularly communicates via telephone with the children. 

Changes

55.The children have a large extended family (s 60CC(3)(d)). On the mother’s evidence, the children regularly interact with their maternal grandmother, aunts, uncles and cousins in Melbourne. On the father’s evidence, the children interact with their paternal grandparents, aunts, uncles and cousins when in Sydney (and have spent time with their paternal grandmother and aunt during their father’s visits to Melbourne in the preceding 18 months). The mother also contends that N “has established friends” in Melbourne from Kindergarten and he and H often have play dates.

56.I do not consider that the children would suffer significant distress, stemming from a change in circumstances, should they be required to return to Sydney, but only if they remained primarily in their mother’s care. Indeed, as Dr T opined (upon the basis, it must be noted, that the children would be living with the mother) “I do not believe that a further relocation back to Sydney would cause the children significant distress”. I reiterate, the mother does not intend or wish to live in Sydney.

Responsibilities of Parenthood

57.The Act’s abolition of fault has ramifications for the place of parties’ conduct within matrimonial proceedings. But, many of the statutory Considerations can be seen to involve questions about the conduct of either or both parents. Family violence is an acute example. So, too, “the attitude to … the responsibilities of parenthood demonstrated by each of the child’s parents” might also be seen to involve an examination of the conduct of one or both parties, as indeed might s 60CC(4) and (4A). Those considerations (and others) heighten, as it seems to me, the fact that, as the High Court said, “…[i]t is a mistake to think that there is always only one right answer to the question of what the best interests of a child require … Best interests are values, not facts” (CDJ v VAJ at 219).

58.That said, considerable caution should attend the making of what might be described as “moral judgments” masquerading as findings about the best interests of a child. Yet, the legislature requires me to take account (if relevant) of the “attitude to the child, and to the responsibilities of parenthood” (s 60CC(3)(i)) demonstrated by each of the parents.

59.I have no doubt the father’s moral approbation at the manner in which the mother facilitated her relocation to Melbourne is a significant contributing factor in Dr T’s opinion, which I accept, that the father was “embittered about the situation.”

60.The mother contends that the father consented to her relocating with the children to Melbourne. I reject her evidence. It is entirely inconsistent with the letters written by the mother’s solicitors to the legal representatives for the father at the time the mother left for Melbourne (see, for example, letters of 18 March 2010 and 16 April 2010). A letter sent in response by the father’s solicitors on 23 April 2010, after the mother had travelled to Melbourne, states “[o]ur client did not agree to your client and the children remaining in Melbourne for any length of time which would inhibit contact with their father and he seeks that your client and the children return to Sydney.”

61.I do not consider that the mother’s motivations in relocating were, as suggested by counsel for the father, mala fides. I accept the mother’s evidence that she was struggling to cope both emotionally and financially with her separation from the father in Sydney and was, in travelling to Melbourne, genuinely seeking the emotional and financial support of her family. All those factors, it might be observed, could have been put before the Court in seeking appropriate orders facilitating the move.

62.I do not, however, consider that the manner in which the mother effected the relocation was illustrative of the child-focussed approach to the responsibilities of parenthood the mother has, more generally, demonstrated. On balance, I accept that, as Dr T put it, the mother was quite “ambivalent about taking [the] step” of relocating to Melbourne. I accept also the doctor’s assessment of the mother as being “a rather compliant person with a conflict-averse and appeasing nature…”.  The unilateral move is consistent with that assessment.

63.Notwithstanding the difficult position the father has found himself in, he has gone to considerable lengths to ensure he sees his children as frequently as possible. He has also sought assistance, in the form of various courses and through sessions with a psychologist to, in his words, “improve [his] parenting for [his] children”. His commitment is each case does him credit and, I think, augurs well for his future relationship with the children.

Other Facts or Circumstances

64.The fact that a party need not show “compelling reasons” to move does not render reasons for moving (or staying) irrelevant (see, for example, U v U at [82], per McHugh J; per Hayne J at [175] and AMS v AIF). Those reasons can sometimes say much about potential capacity, the responsibilities of parenthood or the willingness and capacity to facilitate a relationship.

65.Here, the mother desires to stay in Melbourne because, she says: she has the emotional support of her family; she is removed from what was, on either party’s evidence, a dysfunctional relationship with the father; and, she is no longer fearful or intimidated by the father which, she says, enables her to co-parent more effectively with him. The father wishes to remain in Sydney because that is where his close and extended family live, he has a business operating in Sydney and he has a property there. The reasons for the mother staying in Melbourne and not returning to Sydney and the reasons for the father remaining in Sydney and not relocating to Melbourne show no more than each party having an understandable position, which each is perfectly free to maintain.

66.It is uncontroversial that the children’s primary attachment is with their mother. Indeed, the father’s orders seeking that the children return to Sydney with their mother effectively concedes as much.

67.If the parties were to live proximate to each other, I am pessimistic that the children would again be subjected to the level of hostility that once marked their relationship. Dr T opines that not only has N witnessed his parents’ conflict, he has also been affected by it. To this end, Dr T observed that:

…on one hand [[N]] loves his father and is attached to him but on the other hand he is a bit frightened of him. I think this has contributed to [N’s] aggressive behaviour towards his brother, as [he] may be copying his father.

68.Dr T said of the mother:

…in terms of emotional robustness, it is my view that she is in a significantly more confident frame of mind than she was 18 months ago. She now seems to engage reasonably effectively and directly with [the father] (albeit in the presence of a member of the family) and without any evidence of significant fear, although there is an understandable degree of apprehension. I think that she has made a break from [the father] now, and she is feeling more confident in herself…

69.Consistent with the mother’s affidavit evidence, the mother stated during oral evidence that should she return to Sydney, she felt there would be “collective confrontation: from [the father], from [the father’s] family. I would have no one to talk to….The [father’s] family intimidates me…” The mother deposes to having only one friend in Sydney with whom she has maintained contact since moving to Melbourne and to having an aunty with whom she could spend time, although her aunty is currently experiencing her own familial issues. I accept the mother has a support network in Melbourne that is important and beneficial to her and, as a result, her parenting.

70.Counsel for the father contends that there is no greater risk of conflict between the parties if the mother were to live in Sydney than if she were to live in Melbourne. I disagree. As Dr T observed, the mother is a “diminutive person” with “mollifying characteristic[s]” and “conflict avoidance…seems to be a significant part of her personality make up…”. Those characteristics can, in turn, lead to the mother “standing up for herself at times and at other times, backing right off to the point that she says she accepts responsibility for somebody else’s actions as a way of minimising conflict.” This assessment of the mother conforms with my impression of her in the witness box.

71.By way of contrast, I accept Dr T’s opinions of the father as also consistent with my view of the evidence and impression of him: “…rather overbearing and also express a strong sense of rectitude and entitlement…” Further, Dr T stated that the father’s “attitude towards [the mother] was at times rather contemptuous, flippant and blunt during the assessment…” and the father “…spoke with confidence and an air of indignation. He was quite critical of the mother, whom he seemed to regard as deceptive and manipulative…”.

72.Dr T’s oral evidence that: “there is a relative degree of risk associated with moving back to Sydney”; “the current arrangement is a satisfactory arrangement under the circumstances” is important in assessing what is best for the children and so, too, his conclusion that, presuming it is sustainable, “then probably status quo holds”.

Parental Responsibility

73.I have attempted to distil the principles emerging from earlier authorities, including those which bind me in respect of this issue in Hardies & Capris specifically at [59] to [64].  I do not propose to repeat them here but I make it clear that I rely upon those principles as there discussed.

74.

Pursuant to s 61DA, in making parenting orders in relation to the children, it is presumed that it is in their best interests that their mother and father have equal shared parental responsibility for them. This presumption does not, however, apply where there has been “abuse” or “family violence”

(s 61DA(2)) and is rebuttable where equal shared parental responsibility is not in the children’s best interests (s 61DA(4)).

75.The mother seeks an order for “sole parental responsibility”. The father and the Independent Children’s Lawyer propose an order that the parties have equal shared parental responsibility.

76.Allegations of family violence have been addressed earlier in these reasons; the mother alleges that the father has perpetrated family violence during their relationship. I accept the mother’s evidence in this respect. In light of this finding, the presumption that it is in the best interests of the children for their parents to have equal shared parental responsibility for them does not apply (s 61DA(2)(b)).

77.Further, and in any event, in my view the presumption is rebutted in the children’s best interests. Section 65DAC requires a process of consultation and cooperation in the necessary decision making in respect of “major long term issues” for those who share parental responsibility. The parties’ prior history points to the statutory requirement having the potential to reignite significant conflict. The impact on N has already been referred to. The potential for that conflict should be avoided; high conflict is antithetical to the children’s best interests.

78.But, the exercise of discretion in favour of excluding one parent from consultation and decision making in respect of major long-term issues for a child is, it seems to me, a very significant step, being a very serious interference with the fundamental rights of a person. There is no doubt that the exercise of that discretion ought to be resolved in favour of an outcome which is seen to be in the best interests of the child. But, the fact that this is the paramount consideration does not, in my view, mean it is the sole consideration nor that the legitimate fundamental rights of a parent are irrelevant (cf AIF v AMS and U v U ).

79.The matters and findings just discussed do not necessarily lead to a conclusion that there should be an order for “sole parental responsibility” which might, arguably have the effect of excluding the “other parent” from any involvement in decision making. It seems to me that orders can be made which strike a balance; on the one hand removing (or significantly reducing) conflict by permitting of one parent to have the ultimate “say” but, on the other hand, permitting of input by the other parent. I propose to make such an order in this case.

80.As a result of the presumption not applying, the pre-condition to the exercise of the power to make parenting orders (see MMR v GR (2010) 240 CLR 461 and s 65DAA) is inapplicable; parenting orders as to time are at large. But, the fact that the mandatory requirements of s 65DAA are rendered inapplicable does not mean that a consideration of equal or substantial time and the reasonable practicality of each is rendered irrelevant; the decision as to what orders for time are in the children’s best interests might incorporate a consideration of the statutory specified periods of time, even if not mandatorily so, if only because they are powerful indicators of the legislative intent behind Part VII more generally.

Parenting Orders: Summary and Conclusions

81.I should mention for the sake of completeness that alternative proposals mooted by me were canvassed during the hearing, in particular, the prospect of the children returning to Sydney for several years, until their relationship with their father is well-established. In response to such a proposition, Dr T was of the view that such a proposal would be significantly disruptive to these two small children, who have already relocated once and who have now been living in Melbourne for over two years.

82.Further, in my view, such a course of action is likely to see each party co-parenting with the spectre of future proceedings hanging over their head. Not only is that of itself undesirable (see, for example, s 60CC(3)(1)), in my view it would likely increase the possibility of future conflict. It would also militate against each of these parents otherwise attempting to make a less than ideal situation for the children work best for each of them.

83.I consider that the mother’s proposal as to where the children should live better promotes the best interests of N and H; Melbourne is the home they have known for some two years. I consider they are settled into that environment.

84.I am acutely conscious of Dr T’s concern that a reduction in time between the children would be harmful to their relationship with their father. That factor must be weighed in the balance as a matter of practical reality, any time greater than the quantity suggested by each of the parents requires an order that the mother return to Sydney. That is a move contraindicated by authority and the best interests otherwise of these young children.

Quantification

162.Expressed qualitatively, I regard the following matters as particularly important to my assessment:

e)The two properties which the father brought to the relationship were each mortgaged.  They remain mortgaged and there is the additional line of credit and loan secured over the properties;

f)The mother made an extremely modest initial direct financial contribution;

g)The parties’ relationship subsisted only for about five years;

h)The properties brought to the relationship by the father, together with the separate one-third interest in M property and the $121,000 about which I have earlier made findings, are overwhelming direct financial contributions, given that those properties represent the lion’s share of the pool;

i)The two initial real properties have increased in value by about $240,000 during the course of the relationship.  In that respect, however, for reasons which will emerge, I consider it just and equitable to order the sale of E property and that the significant CGT payable be shared equally;

j)The mother, too, says she was provided with money from her mother, brother and a friend.  I have found that these, too, should not be treated as loans.  Given that “add-backs” form part of the property to be divided, these sums, too, should be seen as a contribution on behalf of the mother;

k)The use to which the real properties contributed by the father were put is important. One provided a home for the parties and their children for the majority of their relationship and continues to provide a home for the children when they spend time with their father in Sydney. The other property provided, and continues to provide, rental income;

l)While the one-third interest in the M property was contributed by the father, it came with a one-third interest in the loan used to purchase the property.  However, it is not disputed that the father’s parents have met all of the repayments, expenses and outgoings;

m)The mother was primarily responsible for the day to day care of the parties’ children during the relationship and for the “homemaking”.  The father also contributed to caring for the children;

n)Post-separation, the mother has been primarily responsible for the care of the parties’ two small children, albeit it as a result of her unilateral actions in relocating with the children to Melbourne.  Although expenses of the father spending time with the children have been shared (because borrowings included in the pool largely funded them), the father’s contribution to the children has otherwise be made in difficult circumstances;

o)Post-separation, the father has been solely responsible for meeting the repayments in respect of the loans secured over the E2 and E properties.

163.Contrary to the manner in which many applications for property settlement are run in this Court, it must always be remembered that the process required of the Court is the exercise of a broad discretion in respect of which reasonable minds can differ. It is neither an accounting exercise nor an exercise in mathematics. (See, for example, Norbis at 522; In the Marriage of Brandt (1997) FLC 92-758). Yet, of course, as was said by Coleman J in Steinbrenner & Steinbrenner [2008] FamCAFC 193:

234.Given that the evaluation of contribution based entitlements inevitably moves from qualitative evaluation of contributions to a quantitative reflection of such evaluation, there will inevitably be a “leap” from words to figures. That is the nature of the exercise of discretion, whether it be in the assessment of contributions in the matrimonial cause, assessment of damages in a personal injuries case, or determination of compensation in a land resumption case.

164.Moreover, any adjustment (and resulting disparity between the parties) needs to be seen in terms of its dollar value – as distinct from an apparently arbitrary percentage figure (see In the Marriage of Clauson (1995) 18 Fam LR 693 at 714).

165.

Contributions weigh very heavily in favour of the father. In my view, they should be assessed in the proportion 85 per cent to the father and 15 per cent to the mother.  That is, the respective contributions should reflect a disparity of

70 per cent, or about $738,000.

Section 90SM(4)(e) – The “s 90SF(3) Factors"

166.It is necessary to consider the property and financial resources of the parties by reference to what each will receive in respect of the mooted contributions division just referred to (s 90SF(3)(b)). 

167.For reasons that will shortly be referred to, I consider it just and equitable that orders should effect the sale of the E property and the father’s share portfolio while the former matrimonial home is retained by the father.  The consequence is that sale costs and CGT will be incurred. In broad overview, if those orders are made, the father will retain the former matrimonial home and a one-third interest in the M property and each of the parties will receive cash and retain their chattels and furniture.  

168.

A significant proportion of the liabilities which are included in the “pool” of property pre-dated the relationship. As a specific example, if CGT (estimated to be in the region of $145,000) is to crystallise and be incurred in respect of

E property, it will pertain to a period significantly longer than the parties’ relationship. But, it needs to be observed that the Court’s assessment is being applied to the values of property as at trial and the amounts of liability at trial; the process is not being applied to the increase in value of the property and the liabilities, and nor should it be. I consider that approach appropriate.

169.The mother is currently aged 42; the father will turn 40 in October this year. Both parties are in good health.  

170.As earlier mentioned, the father is currently drawing a wage from a business he established in 2009 which is, on his evidence, growing “slowly, slowly”. His income is modest.

171.The mother deposes to, and the father concedes, that she will not be able to resume part-time employment until H commences school which is in about two and a half years’ time. The mother’s present income is comprised of “government benefits” and child support paid by the father, which is currently assessed at $205 per month. The mother has undertaken at least one “brief contract … job” since separation, for which she received $2,210.  I accept that such opportunities are likely to be infrequent until H commences school.

172.As a result of the parenting orders I will make, the mother will continue to be primarily responsible for the day to day care of the children in Melbourne and their day to day expenses and needs.

173.The father pays child support, as assessed by the Child Support Agency.  There is no suggestion that he will not do so in the future.  The child support amount is, though, relatively modest as is the father’s current taxable income on which that is, and will in the future be, based. 

174.The father will be solely responsible for the costs associated with spending time with the children.  Those costs include flights, accommodation and incidental expenses during trips to Melbourne and, additional flying costs for Sydney time until both children are old enough to travel unaccompanied.  Those costs have the potential to impact upon his assessed child support, but additional expense is, nevertheless, highly likely.

175.Each of the parties is young and their relationship was short.  The short relationship has had an impact on the earning capacity of both; the mother because she chooses to be a full-time mother until the younger child starts school and the father because maintaining a meaningful relationship with the children will necessitate revolving business/earning arrangements around arrangements for facilitating time with geographically remote children. Those arrangements are not without practical and financial difficulties.

176.The mother will need to rehouse with limited capital and little or no remunerative income until the parties’ younger child attends school. The father already owns property to house himself and the children when he has them.  He has the potential for his equity to grow by reason alone of being, as it were, already in the property marketplace.

177.On balance I consider that an adjustment in favour of the mother is called for, particularly by reference to: the mother’s full-time responsibilities for the care of two young children and their associated expenses; a financial future using as a capital base a modest sum; and, her limited earning capacity in the next few years.

178.However, I consider that an adjustment that gives weight to those particular matters (and weight to the other relevant matters earlier identified) should also give particular weight to: the very significant future costs associated with the father spending time with the children and his current modest income; the necessary diminution in his capital base; and, his borrowings.

179.I consider an adjustment in favour of the mother of around $50,000 (that is, about 5 per cent of the net property and a disparity of 10 per cent) is just and equitable. 

The Proposed Settlement of Property

180.The ultimate findings made by me in respect of both contributions and s 90SM(4)(e) result in a settlement of property which, expressed in percentage terms, sees the father obtaining 80 per cent and the mother 20 per cent

Just and Equitable Orders?

181.

As I have earlier indicated, it seems to me just and equitable that the father should retain the former matrimonial home. I do not consider that the father should be forced to sell what he considers the “children’s home” so as to avoid both parties incurring a larger CGT liability through the sale of

the E property.  In that respect, it is in my view highly relevant that the properties were contributed by the father in specie to the relationship.

182.

Thus, I propose to order that the father sell his share portfolio and

the E property.  I propose to make orders securing the payment of the CGT (which has not yet been assessed) by ordering $160,000 from the proceeds of sale of the E property and the share portfolio to be paid into the mother’s solicitor’s trust account.  That amount is slightly greater than the estimate of total CGT in respect of the E property but permits of a margin for error, particularly given that the father may have been incorrect in his contention that the sale of his share portfolio will not attract CGT.

183.There is the potential for injustice to the mother if the father does not sell that property and the share portfolio in order to meet the cash amount payable to the mother.  In that event, the CGT does not crystallise and different principles might apply to the manner in which the potential CGT liability might be treated within the s 90SM assessment. (See, for example, Rosati v Rosati (1998) FLC 92-804). By way of corollary, if the E property and the father’s share portfolio sell for significantly less than their agreed value and the orders require the father to pay to the mother a lump sum amount specified in the orders, the father will potentially suffer an injustice as that lump sum figure will no longer represent 20 per cent of the pool. I consider, then, that an order should be made requiring the father to sell the E property and his share portfolio and for the orders to contain a calculation giving effect to an overall division that takes account of the actual proceeds of sale.

184.An overview of the justice and equity of the proposed orders can be gauged by looking at the orders based on some basic assumptions. If the E property and the shares are sold at their trial values ($900,000 and about $173,000 respectively), assume the parties pay, say 2.5 per cent commission across the board – say $27,000.   On those assumptions, the division would appear as follows:

Father	Mother
Property
E2 property	700,000
1/3 interest in M property	280,000
Superannuation	9,650	36,866
Other
Chattels and furniture	25,000	7,000
Volvo vehicle	23,000
Debt owing by P Pty Ltd	43,352
Money in father’s solicitor’s trust account	46,891
Add backs
Legals (Add back)	156,723	110,000
Assumed Net proceeds (taking commission into account)	1,046,000
TOTAL ASSETS	2,307,616	176,866
Liabilities
ANZ Mortgage secured over the E property (account no. …86)	399,999
ANZ Mortgage secured over the E2 property (account no. …41)	171,519
ANZ loan secured over both the E2 and E properties (account no. …31)	98,667
Line of credit with ANZ secured over both the E2 and E properties (account no. …47)	446,938
1/3 loan on M property	183,333
Capital Gains Tax (to be set aside)	80,000	80,000
Father’s credit card	8,898.87
TOTAL LIABILITIES (assumed)	1,389,355	80,000
PROVISIONAL TOTALS (using assumptions)	$918,261	$96,866
Father’s entitlement 80 per cent (using assumptions)	$812,102
Mother’s entitlement 20 per cent (using assumptions)	$203,025
Potential Cash Adjustment (using assumptions)	($106,160)	$106,160

185.Thus, on those broad assumptions, the mother would be debt free, has (or, in the case of addbacks, has had) property and superannuation totalling about $176,000 and would, in addition, receive cash of slightly more than $100,000. The father would retain a real property which has been his and the children’s home, an interest in another real property, would pay the mother an amount representing 20 per cent of the pool and would have available to him a significant cash sum of slightly more than $700,000. The father would, however, be solely responsible for liabilities totalling approximately $1,389,355. Using the cash remaining from the sale of the E property and his share portfolio, the father could, for example, pay $8898.87 off his credit card, discharge the whole of the $399,999 loan secured over the E property, together with the $98,667 loan secured over both E properties, and still have about $200,000 which he could retain, or use to pay off the $171,519 mortgage secured over the E2 property.

186.This, of course, is but one example of the permutations available to the father. Its purpose is twofold. First, it illustrates that the orders will enable the father to retain his interests in two real properties (including the “children’s home”) and discharge significant liabilities. Second, it permits of an assessment of the overall justice and equity of the orders, by reference to dollar amounts (even if involving some assumptions) rather than either arbitrary percentages or qualitative statements.

187.In my judgment, the orders I propose effect, with the requisite finality (s 90ST of the Act), a property settlement which is just and equitable.

188.I will order accordingly

I certify that the preceding one hundred and eighty-eight (188) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy delivered on 31 August 2012.

Associate: 

Date:  31 August 2012