NORTHCOTT & NORTHCOTT
[2014] FCCA 1804
•8 August 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| NORTHCOTT & NORTHCOTT | [2014] FCCA 1804 |
| Catchwords: FAMILY LAW – Parenting Orders – where the mother seeks the removal of an injunction preventing her new partner from coming into contact with the children. |
| Legislation: Family Law Act 1975, ss.79(2), 90MT, 90RD, 90SB, 90SF(3), 90SM(3)(4), 106A Family Law (Superannuation) Regulations 2001 |
| Bevan & Bevan [2013] FAMCAFC 116 Stanford & Stanford (2012) FLC 93-495 |
| Applicant: | MR NORTHCOTT |
| Respondent: | MS NORTHCOTT |
| File Number: | MLC 2292 of 2012 |
| Judgment of: | Judge Small |
| Hearing dates: | 3-6 June and 15-16 July 2013, 28-29 January 2014 |
| Date of Last Submission: | 17 July 2014 |
| Delivered at: | Melbourne |
| Delivered on: | 8 August 2014 |
REPRESENTATION
| Counsel for the Applicant: | Mr Barton |
| Solicitors for the Applicant: | Malkoun & Co Lawyers |
| Counsel for the Respondent: | Ms Teicher |
| Solicitors for the Respondent: | Mirabellas Solicitors |
PARENTING ORDERS
Paragraph 3 of the Orders made on 18 December 2012 is hereby discharged.
PROPERTY ORDERS
DECLARATION
Pursuant to s.90RD of the Family Law Act 1975 (Cth) the court declares that the parties were in a de facto relationship between January 1999 and May 2011.
ORDERS
Within 90 days of the date of these Orders (“the due date”) the Applicant shall pay to the Respondent the sum of sixty-four thousand four hundred and fifty dollars ($64,450.00) (“the payment”).
By the due date, the Applicant shall make the following payments (“the loan payments”):
(a)The balance owing or $10,000 whichever is the lesser amount to the (omitted) Bank personal loan account in the name of the Respondent;
(b)The balance owing or $15,400, whichever is the lesser amount, to the parties’ (omitted) Bank Loan;
(c)The balance owing or $9,200, whichever is the lesser amount, to the parties’ (omitted) Bank Loan.
Subject to the provisions of paragraph 4 hereof the Respondent shall otherwise be responsible for the loans specified therein and shall indemnify and keep indemnified the Applicant against all liability for those loans.
In the event that the payment and the loan payments are not made by the due date, then the Applicant shall forthwith do all such things and sign all such documents as may be necessary to place the property situated at and known as Property R in the State of Victoria (“the Property R property”) on the market for sale and the sale proceeds shall be applied as follows:
(a) First to pay all costs and commissions of the sale;
(b) Second so much of the payment and the loan payments as is outstanding to the Respondent plus interest at the rate of 8.5% per annum from the due date to the date of payment;
(c) The balance to the Applicant.
Subject to paragraphs 3, 4 and 5 hereof, the Applicant shall retain all of his right, title and interest in the Property R property and shall indemnify the Respondent against any and all encumbrances and outgoings in relation to the Property R property.
The Respondent shall retain of her right, title and interest in the property situated at and known as Property M in the State of Victoria (“the Property M property”) and shall indemnify the Applicant against any and all encumbrances and outgoings in relation to the Property M property.
The properties situated at and known as Property W (“Property W”) and Property B (“Property B”) in the State of Victoria (“the investment properties”) shall be forthwith placed on the market for sale and the sale proceeds shall be applied as follows:
(a) First to pay all costs and commissions of the sale;
(b) Second to discharge any mortgages and any other encumbrances held over the investment properties;
(c) Third the balance, if any, 42.5% to the Applicant and 57.5% to the Respondent;
Or in the alternative
Third, any debt in relation to the investment properties remaining after the discharge of all encumbrances shall be the liability of the Applicant alone.
In accordance with s.90MT of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the superannuation interest of the Applicant in the (omitted) Superannuation Fund (‘the Fund”), the Respondent will be entitled to be paid an amount calculated in accordance with Part VI of the Family Law (Superannuation) Regulations2001 using the base amount of $27,820 (twenty seven thousand eight hundred and twenty dollars) and there will be a corresponding reduction in the entitlement of the Applicant.
The trustee of the Fund must comply with the obligations imposed on trustees of eligible superannuation plans under the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001.
The Applicant is hereby restrained by himself his servants and agents from making any binding death benefit nomination to the trustee of the Fund in favour of any person who is an eligible beneficiary within the meaning of Regulation 13 of the Family Law (Superannuation) Regulations 2001 which would have the effect of diminishing the value to the Respondent of the splitting order made in paragraph 8 hereof.
Paragraphs 10 and 11 of these Orders bind the trustee of the Fund when these paragraphs take effect from the operative time, being the fourth business day after the date these Orders are served upon the trustee.
Should the Applicant fail to do anything or sign any document necessary for the operation of these orders within fourteen days of a request that he do so, then pursuant to s.106A of the Family Law Act 1975 (Cth) a Registrar of the Federal Circuit Court of Australia shall be forthwith appointed to do any such thing and sign any such document on his behalf as may be necessary to effect the operation of these Orders.
The Respondent shall retain the piano currently situated in the Property R property and the parties shall make arrangements for its collection from the Property R property within 14 days at the expense of the Respondent and the Applicant shall ensure that it is in good condition for collection.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these any subsequent orders:
(a) each party shall be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders. The chattels in the Property R property are deemed to be in the possession of the Applicant and the chattels in the Property M property are deemed to be in the possession of the Respondent;
(b) monies standing to the credit of the parties in any joint personal bank account are to be divided 42.5% to the Applicant and 57.5% to the Respondent;
(c) the parties shall retain all superannuation entitlements held in their names;
(d) insurance policies remain the sole property of the life insured named therein;
(e) each party shall be solely liable for and indemnify the others against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(f) any joint tenancy of the parties in any real or personal estate is hereby expressly severed; and
(g) each party forgoes any claim they may have to any inheritances to which the other party is entitled to either presently or in the future.
AND THE COURT NOTES:
A.That the Trustee of the (omitted) Superannuation Fund has been afforded procedural fairness in relation to Orders 10 to 13 hereof.
IT IS NOTED that publication of this judgment under the pseudonym Northcott & Northcott is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 2292 of 2012
| MR NORTHCOTT |
Applicant
And
| MS NORTHCOTT |
Respondent
REASONS FOR JUDGMENT
Introduction
This matter concerns an Application for parenting orders and property settlement filed by the de facto husband and father Mr Northcott (“the Applicant”) on 16 March 2012.
The parenting issues, apart from one specific dispute, were resolved by consent before the end of trial.
On 28 January 2014, counsel for the Respondent mother informed the Court that a Minute of Proposed Consent Orders in relation to parenting issues would be handed up to the Court on the following day.
On 29 January 2014 counsel for both parties assured the Court that a signed minute of final parenting orders would be handed up before the end of the day.
That did not happen and counsel were then asked to file a Minute of Proposed Consent Orders to be made in chambers, it being considered necessary for the Court to make those orders before being able to properly consider the property dispute.
However, it was not until several months later that two separate Minutes of Proposed Consent Orders were filed, one signed by each parent. That would not have created a difficulty for the Court if the two Minutes had contained identical orders, but unfortunately, they did not.
The Minutes were then returned to the parties’ solicitors with a request for a single document containing one Minute of Proposed Consent Orders and signed by both parties to be filed forthwith.
It was not until 11 June 2014 that the parenting orders were made. That has been the major cause of delay in making property orders and delivering this judgment.
The parenting orders of 11 June 2014 provide for the children of the relationship, X born (omitted) 2000, Y born (omitted) 2002 and Z born (omitted) 2005 (“the children”) to live with each parent in an equal shared care regime and for the parents to equal shared parental responsibility for them.
At the end of trial, there was only one issue in relation to the parenting orders which was still in dispute, that being whether the mother’s partner would continue to be restrained from coming into contact with the children.
Therefore, these reasons are confined to that parenting issue and to the question of a property settlement arising from the breakdown of the de facto relationship.
Background
The parties, both of whom were born in (country omitted), met in Australia in 1998 and began living together in January 1999 after what the Respondent refers to as a commitment ceremony. They never married.
The Applicant is now 44 years old and the Respondent is 37.
The children were all born in Australia and the parents and all children are Australian citizens.
The parties separated finally in May 2011, although they lived separated under the same roof until September of that year, the relationship thus having lasted for about 12½ years.
Evidence was adduced at trial to show that the Applicant was legally married to another woman in 2002, later being divorced, and the Respondent claimed that there had been several periods of separation during the relationship.
I note that the marriage of the Applicant to another woman in those circumstances does not on its own prevent the Court from making orders in relation to the property of the parties to this de facto relationship[1].
[1] Family Law Act 1975 (Cth), s.4AA(5)(b)
During the relationship the parties purchased several properties, the first, in 1999, being a block of land at Property R (“the Property R property”), which was registered in the name of the Applicant and upon which the family home was built. The Applicant has lived in the Property R property, which is unencumbered, since the construction of the family home was completed in 2000.
The Court has no evidence before it in relation to the purchase price of the Property R property or how the purchase price was funded.
There was some evidence that the property had been mortgaged and that the mortgage was extinguished in 2010 when a (business omitted) said to have been owned by the Applicant and his uncle was sold. However, that evidence was vague and uncertain and I cannot make any findings on that issue.
In 2006 the parties purchased the property at Property M (“the Property M property”), which was registered in the name of the Respondent and was initially purchased for investment purposes. The Respondent has been living in the Property M property since she returned to Melbourne from Adelaide in 2012.
Again there is no evidence before the Court in relation to the purchase price of the Property M property although the Applicant deposes to having applied a total of $90,000 towards the purchase, with the Respondent obtaining a mortgage loan for the remainder.
Late in the relationship the Applicant purchased three properties for investment, those being situated at Property K (“the Property K property”) in April 2010, Property W (“the Property W property”) in June 2010, and Property B (“the Property B property”) in July 2011 (collectively “the investment properties”).
There is no evidence before the Court in relation to the purchase price of any of the investment properties, nor as to how those purchase prices were met.
The Property K property was sold in late 2012 with the settlement of sale taking place on 9 January 2013. The Applicant states that the sale price after costs of sale was $285,000, but that is the only evidence before the Court as to the sale price of the Property K property, or as to how its sale proceeds were applied, except that the Applicant deposes that he made a loss on that sale. No documents in relation to that sale have been provided to the Court.
This lack of information and evidence has made the Court’s task in this case particularly onerous.
During the relationship the parties participated in various “(investments omitted)” and I shall return to that issue later in these reasons.
Procedural History
The Initiating Application filed on 16 March 2012 sought parenting and property orders.
The property orders sought provided for the Applicant to retain the former family home (the Property R property); for the investment properties to be sold with the Applicant retaining 75% of the net sale proceeds, and otherwise for the parties to keep the property currently in their possession (including their respective superannuation interests).
The proceedings came before Federal Magistrate Whelan (as Her Honour then was) on 24 April 2012 in the Duty List. At that hearing Judge Whelan made procedural orders and set the matter down for Trial on 11 March 2013 with an estimate of a two day hearing.
On 25 June 2012 the Respondent filed a Response in which she sought orders that she retain the Property M property, that the Applicant retain the remaining properties, all of which are registered in his name, that each party be responsible for half of the (omitted) debt and that the joint superannuation interests be divided equally between the parties.
In July and September 2012 the parties attended two Conciliation Conferences which did not resolve the matter.
The Applicant filed an Application in a Case on 24 August 2012 seeking a declaration that the parties were in a “continuous domestic relationship between the dates of 19 January 1998 and 30 April 2011 and from March 2000 lived at Property R, Victoria as de facto husband and wife”, and an order that the Child Support Agency[2] be restrained from 9 July 2012 pursuant to s.111C of the Child Support (Registration and Collection) Act 1988 from taking enforcement action against the Applicant for alleged child support arrears.
[2] All references to “the Child Support Agency” in this judgment refer to the Child Support Program of the Commonwealth Department of Human Services.
The background to that Application is discussed in paragraphs 127 to 131 of these reasons.
The Application in a Case came before Federal Magistrate Whelan (as Her Honour then was) on 30 August 2012 and the orders were made by consent pursuant to the Child Support (Registration & Collection) Act 1988 restraining the Registrar of the Child Support Agency from:
1.… disbursing the monies received by it by way of interception from the taxation return of the Applicant, and be stayed from any further enforcement action against the Applicant until the Registrar makes a final determination in relation to the Applicant’s objection to the Child Support Agency.
2. That pursuant to section 121(9)(g) of the Family Law Act 1975 the Applicant be granted approval to provide the Child Support Agency with a copy of the Respondent’s Affidavit sworn 8 June 2012.
The matter returned to Court twice more before the initial Trial date, with interim parenting orders and further procedural orders being made.
On 11 March 2013 the proceedings were adjourned to 12 March 2013 for Final Hearing before Federal Magistrate Burchardt (as His Honour then was).
On 12 March 2013 the Trial was adjourned by His Honour to 3 June 2013 with an estimated hearing time of three days. The matter was also adjourned to the next day for a Mention Hearing and procedural orders were made by consent in relation to discovery and valuations.
Further orders were made by consent providing for the Applicant to make available to the Respondent the Toyota (omitted) with Registration Number (in Victoria) (omitted), and for both parties to disclose “the leases for the (omitted) that the Applicant and Respondent participated in during the course of their relationship”.
The Respondent filed an Amended Response on 3 June 2013 which sought to have the Final Hearing adjourned and amending the orders she sought in relation to property such that the Property R property would be retained by the Applicant and all other properties be sold with the Respondent retaining 60% of the proceeds and the Applicant 40%. The Applicant would also pay the Respondent $240,000 or 60% of the asset pool retained by the Applicant, in default of which the Property R property would be sold and the net proceeds divided 60/40 in the Respondent’s favour.
She again sought orders for the parties to be equally responsible for the (investment omitted) debt and for the equalisation of superannuation entitlements.
The proceedings finally came before me on 3 June 2013 for Trial and counsel for the Respondent advised that as discovery had not been completed in relation to some matters, and as there was no valuation evidence in relation to the real property of the relationship despite directions having been made some months before to ensure that that evidence would be available, she was seeking an adjournment to account for that deficiency.
The Respondent having been granted an adjournment for similar reasons at the previous hearing on 13 March 2013, I declined to delay the proceedings any further and dismissed that application.
The matter then ran for four days. On the fourth day the hearing was adjourned to 15 July 2013 with an estimate that a further 2 days would be required.
On 15 July 2013 the proceedings continued before me for 2 days. On 16 July 2013 it was clear that the matter would require additional hearing time and the proceedings were once again adjourned for a final time until 28 January 2014. Inter alia, the following orders were made:
2. The Applicant has liberty to apply for an order staying any enforcement proceedings either in train or contemplated by the Child Support Agency until further order.
3. By the 31 August 2013, both parties file a document listing all payments into, and all payments withdrawn from all (investment omitted) played by them together.
No documents were filed by 31 August 2013 in compliance with order 3 of those orders and the parties filed no other documents before the adjourned date.
On 28 January 2014 the final days of the Hearing began, the matter finally concluding on 29 January 2014 with my decision being reserved.
Thus, the matter had taken 8 days of final hearing, with six witnesses giving evidence and being cross-examined, most of that evidence having been given through interpreters.
There were several occasions during the trial when I felt it necessary to warn the parties through their counsel that they might be in danger of giving evidence that might open them to civil or even criminal charges.
On every occasion, counsel informed the Court that they and their clients understood the risk but that their clients wished to continue with their evidence. At no time did any witness seek a certificate under s.128 of the Evidence Act 1995 (Cth).
The state of the evidence provided for the trial was, to say the least, chaotic, and I expressed my frustration in open Court at that state of affairs.
Neither counsel appeared to be fully across what evidence there was in my view, even when the complexity of the (investment omitted) evidence is taken into account, and overall, I found the preparation for trial of the property dispute to have been somewhat lacklustre.
Both counsel insisted on pursuing issues which appeared to me to have little or no relevance to the matters in dispute before the Court and it was the conduct of the case, rather than the volume of evidence presented or the fact that interpreters were involved, which led to the 8 days of trial.
Issues
As in any de facto property matter, there are several questions the Court must answer in this case in an attempt to find a just and equitable outcome to the proceedings.
Those questions are:
a)Did a de facto relationship exist between the parties so as to enliven Part VIIIAB of the Family Law Act 1975 (“the Act”) and if so, how long did it last?
b)What is the property of the de facto relationship to be distributed between the parties and what is its value?
c)What are the interests of the parties in that property and is it just and equitable to alter those interests?
d)If it is just and equitable to alter those interests, what were the contributions, financial and non-financial, direct and indirect, of the parties to that property?
e)Should there be any adjustment made to the value of those contributions based on the factors set out in s.90SF of the Family Law Act 1975 (“the Act”)?
f)What orders, if any, should the Court make to alter the current interests of the parties in that property so as to provide a just and equitable settlement between them?
In addition to property matters, in this case the Court must decide whether it is in the best interests of the children for an injunction preventing the Respondent Mother from allowing them to come into contact with her partner Mr T (“Mr T”) to continue.
The Evidence
A. Did a de facto relationship exist between the parties so as to enliven Part VIIIAB of the Family Law Act 1975 (“the Act”) and if so, how long did it last?
It is common ground between the parties that they met in 1998 and that they were living together by 1999. They separated finally in September 2011. Even if the Court accepts that there were periods of separation during that time, it appears to be agreed between the parties that the total period of cohabitation was more than two years, fulfilling the requirements of s.90SB(a) of the Act.
They have three children together, which satisfies the provisions of s.90SB(b).
Periods of separation
The Applicant’s case is that the parties lived together for the entire period between 1999 and 2011, save for a period of about six months in 2002, around the time that he married the other woman.
The Respondent says there were several periods of separation between 1999 and 2011 when she either left the family home and lived elsewhere or lived separated under the same roof.
The Respondent provided no evidence of any other address at which she says she lived during the period 1999 to 2011. Indeed, she says that the agreed approximate six month period of separation in 2002 was spent with the parties living under the same roof.
She described at trial incidents where officers of the Department of Immigration arrived at the house to check that the Applicant and his wife were living together and that she (the Respondent) had been very angry about that. It is her evidence that the Applicant married the wife for the sum of $20,000 so that the wife could migrate to Australia. The Applicant denies that allegation, but was unable to explain why he had married another woman in 2002.
I cannot find therefore that there was any other significant period of separation than the six months or so in 2002.
Therefore, I am satisfied that the requirements of s.90SB of the Family Law Act 1975 (“the Act”) have been met and will make a declaration under s.90RD of the Act that the parties were in a de facto relationship between 1999 and 2011.
B. What is the property of the de facto relationship to be distributed between the parties and what is its value?
The parties are agreed that the property of the relationship to be distributed as a result of these proceedings consists of the following assets and liabilities:
· The property at Property R, which is unencumbered, and worth $425,000. This property is registered in the Applicant’s sole name.
· The property at Property M which is worth $335,000 and carries a mortgage debt of about $93,000. That property and the mortgage are registered in the Respondent’s sole name.
· The property at Property W which is worth $320,000 and carries a mortgage loan of approximately $350,000. That property is in the Applicant’s sole name.
· The property at Property B which is worth $330,000 and carries a mortgage debt of approximately $408,000. That property too is in the Applicant’s sole name.
· Two Toyota (omitted) motor vehicles worth approximately $15,500, one of which is in each party’s possession.
· The Respondent’s superannuation entitlements of about $57,300.
· The Applicant’s superannuation entitlements of about $90,750.
In addition to the above assets and liabilities the Respondent sets out the following liabilities in her Outline of Case Document handed up on the first day of trial in June 2013[3]:
· a (omitted) Bank Loan in the sum of $9,200
· a (omitted) Bank Loan in the sum of $15,400
· a (omitted) Bank Personal Loan in the sum of $10,000.
[3] It was not until the final day of trial on 29 January 2014 that the parties’ counsel advised the Court that the figures set out in that document were agreed between them.
She also claims an “add back” of $11,575 which was removed from the sale proceeds of the Property K property sold in 2012 and placed in the Applicant’s personal account.
I do not propose to add that sum to the asset pool but will consider it as a financial resource retained by the Applicant when considering the issues set out in s90SF of the Act.
That means that the parties have non-superannuation assets worth $1,425,500 and liabilities of $885,600: a net pool, excluding superannuation, of $539,900.
Their joint superannuation entitlements amount to about $148,000.
Further, the parties agreed at trial that they owed (or at least were obliged to invest) approximately $80,000 to various (investment omitted). I shall deal with the (investment omitted) in some detail later in these reasons.
In the Applicant’s Outline of Case Document, filed on 8 March 2013, he seeks only one order in relation to property matters and that is a declaration that “the parties were in a domestic relationship of more than two years”.
It is clear from the Outline of Case Document that the Applicant was concerned only with parenting issues at that time, which is unfortunate given the unfolding of the proceedings at trial.
C. What are the interests of the parties in that property and is it just and equitable to alter those interests?
As has already been stated, the Property R property and the Property W and Property B properties are registered in the name of the Applicant, and the Property M property is registered in the name of the Respondent.
The Toyota (omitted) vehicle mentioned in paragraph 65 above is apparently registered in the name of the Respondent and is worth about $3,000[4].
[4] Financial Statement of the Respondent affirmed on 31 May 2013 paragraph 40.
The other Toyota (omitted) has been retained by the Applicant. He values it at about $3000 but the Respondent’s Outline of Case Document states its worth as $12,500.
That matter was not agitated at trial but it was clearly stated that the valuation figures set out in the Respondent’s Outline of Case Document were agreed by the parties. That document values the Applicant's Toyota at $12,500 and that is the value I shall take for the purposes of this judgment.
The superannuation entitlements specified in paragraph 65 above are the property of the owners of those entitlements.
Having determined the extent and value of the pool to be distributed as far as is possible, it is then necessary, pursuant to s.90SM(3) of the Act, for the Court to determine whether it is just and equitable to alter the existing interests of the parties in the property.
Section 90SM(3) is in identical terms to s.79(2) of the Act, which refers to property settlements between married couples.
In considering the meaning of s.79(2) in Stanford & Stanford[5], the High Court made clear that the decision about justice and equity must be made before any order can be made altering the interests of parties to property in family law proceedings.
[5] Stanford & Stanford (2012) FLC 93-495.
In Stanford the High Court said at paragraph 42:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and the wife.
In Bevan & Bevan[6] the Full Court of the Family Court said that the circumstances described in the above passage of the Stanford judgment “encapsulate the vast majority of cases”. While these parties were not married, the principles set out in Stanford and Bevan apply equally to de facto relationships and there is nothing exceptional in this relationship which would make the statements made in Stanford and Bevan inapplicable .
[6] Bevan & Bevan [2013]FAMCAFC 116 paragraph 70
In this case, the parties were in a de facto relationship for about 12½ years. They have three children who have not yet attained the age of 18 years.
Property was bought and sold during and after the relationship such that the Applicant now has an interest in three properties as well as superannuation interests, and the Respondent has an interest in one property and she also has superannuation entitlements.
Clearly there cannot be common use of that property now that the relationship is over.
In those circumstances I find that it is just and equitable in all the circumstances to alter the property interests of the parties
D. If it is just and equitable to alter those interests, what were the contributions, financial and non-financial, direct and indirect, of the parties to that property?
Section 90SM(4) of the Act sets out the matters the Court must consider in deciding what orders to make altering property interests of de facto parties.
Those matters include the contributions, financial and non-financial, direct and indirect, made by each party to the acquisition, maintenance and improvement of the property and to the welfare of the family.
In this case, the parties appear to have come into the relationship in similar financial circumstances.
The Applicant says that the Respondent made no financial contributions to the acquisition of the land upon which the family home was constructed and that it was he who made those contributions. However, he does not quantify those contributions, nor explain their source, and I cannot make any findings of fact in relation to them.
What is agreed is that both parties worked, either part or full time, or looked after the children and the household throughout the period of cohabitation.
It is suggested by the Respondent that the Applicant sent significant amounts of money back to his family in (country omitted), but she could provide no real evidence to support that assertion.
The Applicant says that while he assisted his family from time to time, he did not send large amounts to them and certainly not enough to have invested in property in (country omitted) as alleged by the Respondent. In those circumstances, I cannot find that he in fact did so, although his evidence at trial was that at times during the relationship he had sent about $500 or $600 every six weeks or so.
When I consider all the evidence, scant though it is, I can only find that the contributions of the parties throughout the relationship were equal, with the Applicant’s significant financial contributions through his work as a (occupation omitted) being balanced by the Respondent’s contributions as homemaker and parent in addition to her lesser financial contributions from her work as a (occupation omitted).
That leads to a conclusion that on contributions considerations alone, the property of the parties should be equally divided.
E. Should there be any adjustment made to the value of those contributions based on the factors set out in s.90SF(3) of the Family Law Act 1975 (“the Act”)?
Section 90SF(3) sets out 17 factors which, if present, might cause the Court to make an adjustment to the percentage of the assets distributed to one of the parties. I will set the relevant factors out in full.
Section 90SF(3)(a): the age and state of health of each of the parties to the de facto relationship.
The Applicant is 44 years old and the Respondent 37. There is no evidence before the Court that either suffers from any particular health issues.
Section 90SF(3)(b): the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment.
The Applicant earns his living as a (occupation omitted) at (employer omitted) and the evidence shows that his income is about $70,000 per annum from that work.
The Respondent works part-time at a (employer omitted) and earns about $25,000 per year.
There is no suggestion that either party lacks the capacity for gainful employment although the seven year age difference will mean that the Applicant is likely to have a lesser number of years remaining in the work force in which to earn an income from personal exertion.
It is the evidence of both parties that any income derived from rental of the Property K, Property W and Property B properties is/was applied to their mortgage loans.
The Applicant’s evidence is that while he is the registered proprietor of three real properties, the Property W and Property B properties have no equity in them and indeed are worth less than the mortgage loans secured by them. It is however the case of both parties that the Property W and Property B properties ought to be sold and I will make those orders accordingly.
The Applicant has sold the Property K property but the evidence before the Court is unclear as to whether a profit was realised from that sale. The Applicant says in evidence that he lost money on the transaction but the Respondent claims that he gained an advantage of $11,575 which was deposited into his personal account.
At trial the Applicant conceded that he had removed that sum from the sale proceeds, and that while he had spent some of the money on mortgage payments on the loans for the other properties, the large majority of it was spent on personal and family expenses.
I therefore find that the Applicant has had the benefit of the sum of $10,000 from the sale proceeds of the Property K property.
The (omitted)
Evidence about the parties’ participation in several “(investment omitted)” during the relationship took up the majority of the trial time devoted to property issues.
A (investment omitted) is, as far as I can ascertain from quite voluminous but nonetheless still not entirely clear evidence, a time-limited unofficial private banking and loan system whereby participants make regular monthly payments in cash to a caretaker, or “(investment omitted)”, and the participants then bid for the right to borrow from those monies.
The amount available for distribution each month depends on the number of participants or shares in the (investment omitted). The monies remaining at the prescribed date of the end of the (investment omitted) are divided between the participants such that each receives the total net sum of his/her share. At any given time during the (investment omitted) a participant may be in credit or in debt to the (investment omitted) and the operation of the (investment omitted) is such that each share must contribute a fixed amount of money each month or four week period.
It is conceded by both parties that a person’s obligation to a (omitted) is not a legally binding contract, but the evidence of the parties, and of the two (omitted) who gave evidence at trial, was that it is rare for a participant to fail to fulfil that obligation.
So for instance, if there are 60 shares in a (investment omitted) and each share is bound to pay $500 per month to the (investment omitted), then $30,000 less the (investment omitted) fee of about $500 will be available for borrowing each month.
It is apparently common for individuals or couples to own more than one share in a particular (investment omitted).
The parties to these proceedings owned multiple shares in several (investment omitted) during the relationship, making regular deposits of $2,000 and at times up to $4,000 per month, but the question of exactly how much was deposited or invested during the relationship is unclear, and how much was withdrawn is a matter of dispute.
The exact number of (investment omitted) played, the exact amounts deposited and the source of those funds is not discernible from the evidence presented.
However, what is clear is that the parties played at least four (investment omitted) in the last few years of the relationship, and that they deposited the sum of at least $2,000 per month and probably more into those and perhaps other (investment omitted).
It was the Applicant’s evidence at trial that he was now obliged to pay a further $80,000 into (investment omitted) which he and the Respondent had played during the relationship. He considered that obligation to be a debt, but if my understanding of the (investment omitted) is correct, at the end of each (investment omitted) he will have collected much if not all of the sums deposited.
The Respondent’s evidence was that the Applicant had sold at least one of the four shares in the (investment omitted) to his uncle for $10,000, thus recouping some of his payments and relieving himself of the obligation to continue to pay for that share. I can find no other evidence in relation to that allegation, either from the Applicant or any other person and I can make no finding in relation to it.
The evidence about withdrawals from the (investment omitted) is, to say the least, conflicting.
The Applicant claims that the Respondent removed a total of $136,000 from the (investment omitted), part during the relationship in 2009 and 2010, and part at the time of separation in 2011. The Respondent’s evidence is that she received only $37,720 in September 2011. The Applicant says that the withdrawals were made from (investment omitted) conducted by two (omitted), Ms P and Ms T, both of whom gave corroborating evidence at trial.
However, it was conceded by the Applicant that the parties were still living together, and playing the (investment omitted) together, when all but two of the sums were allegedly distributed. The Respondent’s evidence was that any monies withdrawn from the (investment omitted) before separation were applied to joint expenses or enterprises.
The Respondent acknowledges that she withdrew the sum of $37,720 from a (investment omitted) conducted by Ms T in September 2011. She says that money was used to buy furniture and other expenses necessary for her to re-establish a home for herself after separation. She flatly denies ever removing monies from any (omitted) conducted by Ms P or from more than one (omitted) conducted by Ms T.
The problem with the evidence of the (investment omitted) is that they conceded that they did not keep records of who deposited how much into the (investment omitted) and who received monies by way of borrowings. They were adamant that they recalled the Respondent receiving monies but when further questioned, Ms T said that she had actually given some of the money to the Applicant.
While I have no reason to doubt the honesty of the (investment omitted), I cannot be satisfied that that they are not mistaken in their belief that the Respondent received the second sum of $33,000 in November 2011. Without any documentary evidence available, and a period of more than 18 months elapsing between the alleged events and the trial, and with the (investment omitted) conducting multiple further (omitted) in the meantime, I can only find on the balance of probabilities that the Respondent received the sum of $37,720 from the (investment omitted) played by the parties. In circumstances where there were some 81 shares in one of the (investment omitted) and 67 in the other, it is in my view unlikely that the (investment omitted) could recall with any certainty who had received what sums without documentary corroboration.
Counsel for the Respondent submitted that because of that state of affairs, I should ignore the (investment omitted) entirely in considering what orders to make in this case.
However, it was conceded by her client that she had received the sum of $37,720 and I will consider that sum to be a financial resource in her hands in the final distribution of the parties’ property. If she had withdrawn the money from a joint account at a conventional bank there would be no doubt that she had had the benefit of it.
Child Support Issues
In 2012 the Applicant made an application to the Child Support Agency in relation to the children, who had remained living with him after separation.
He was surprised to find that the Respondent had first made an application for child support in relation to the children in 2001, and that he had been assessed as having a child support debt of over $40,000 arising from assessments made since that time.
On 3 August 2012 the sum of $14,586 (the amount of the Applicant’s tax refund for the 2011-2012 financial year) was transferred from the Australian Taxation Office to the Child Support Agency in part satisfaction of that debt.
It appears from all the evidence available to the Court that none of those monies had been distributed to the Respondent at the time the trial ended on 29 January 2014 and that the total sum of the debt at the end of trial was about $43,000.
On 17 August 2012 the Applicant lodged an objection to the assessment with the Child Support Agency and on 24 August 2012 he filed an Application in a Case in these proceedings seeking orders that the Child Support Agency be restrained from taking enforcement action against him for the alleged child support arrears, and approval to provide a copy of the Respondent’s affidavit sworn 8 June 2012 to the Child Support Agency.
As I have already stated, those orders were made by Judge Whelan on 30 August 2012, and as far as the Court is aware, the Applicant’s tax refund from the 2011 – 2012 year remains quarantined within the Child Support Agency pending the outcome of these proceedings.
It is probable that the Applicant’s liability to pay child support for the period up to the date of separation will be extinguished once the Child Support Agency is made aware of this judgment, as I have found that the parties were in a de facto relationship between 1999 and 2011.
It is therefore likely that the monies currently held by the Child Support Agency in relation to that debt will be released to him and he will receive a sum in excess of $14,000. I take that possibility into account when considering the Applicant’s financial resources.
The corollary to that situation is that the Respondent may find herself in some legal jeopardy in terms of her applications for child support over the years, although there is no evidence before the court that she actually received any monies for that purpose during the relationship.
Centrelink Payments
Evidence was adduced at trial that the Respondent had been claiming benefits from Centrelink in the form of the Supporting Parents’ Benefit while she was living with the Applicant.
The Respondent’s evidence was that the Applicant had refused to marry her after the birth of their son X in 2001 and that she therefore was single and wished to ensure that she could support her children. It was in that circumstance that she applied for and received Centrelink benefits. It was her evidence that she had continued to receive those benefits until the Applicant removed the children from her care in 2012.
The Respondent’s evidence discloses a possible overpayment which she may have to repay and if so, that debt is likely to be considerable. I cannot quantify it, but I take the possibility into account when considering the Respondent’s financial resources.
Section 90SF(3)(c): whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years.
The parenting orders made by consent on 11 June 2014 provide for both parties to have equal shared responsibility for and care of the three children of the relationship. In other words, the need for each to care for the children is balanced by the other’s equal need to do so.
Section 90SF(3)(d): commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain.
Both parties must support themselves and the children. There are no other persons that the parties have a duty to maintain, although the Applicant does have family members living with him about whose financial situation the Court knows nothing.
Section 90SF(3)(e): the responsibilities of either party to support any other person.
Neither party has a legal responsibility to support another child or adult.
Section 90SF(3)(f): subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party.
Both parties work, the Applicant full time and the Respondent part-time. Neither appears to be eligible for a pension and it is likely that the Family Tax Benefit will be paid to each according to their care of the children.
Section 90SF(3)(g): a standard of living that in all the circumstances is reasonable.
Both parties live in a house owned by them which is or will be encumbered by a mortgage[7]. Both are working and there is enough equity in the joint assets to provide a reasonable standard of living for each of them.
Section 90SF(3)(h): the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income.
[7] Based on evidence adduced at trial I am assuming that the Applicant will have to borrow against the Property R property in order to pay the Respondent any substantial sum.
No evidence was adduced either in Affidavit material or at trial in relation to this issue and I do not therefore consider it to be of any consequence.
Section 90SF(3)(i): the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant.
This is not a relevant consideration in this case.
Section 90SF(3)(j): the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party.
I have found that the parties’ contributions to the relationship were equal. Therefore both have contributed to the other’s income, earning capacity, property and financial resources.
Section 90SF(3)(k) the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration.
The relationship lasted some 12½ years and for much of that time, the Respondent worked part-time or not at all, and otherwise cared for the children. Those years were those of her twenties and early to mid-thirties when she might have expected to otherwise have obtained qualifications and then worked full time. I do therefore consider that the length of the relationship has contributed to her current lesser earning capacity.
Section 90SF(3)(l): the need to protect a party who wishes to continue that party’s role as a parent.
Both parties wish to continue their role as parent and that is confirmed by the orders for shared parenting which were made by consent.
Section 90SF(3)(m) if either party is cohabiting with another person—the financial circumstances relating to the cohabitation.
The Applicant claims that the Respondent is living with her partner Mr T. Both the Respondent and Mr T, who gave evidence at trial, say that while they are in a relationship, it is that of girlfriend and boyfriend and that they have no plans for cohabitation in the near future.
Mr T lives in Adelaide, where he has children and where he conducts a business, and while he visits the Respondent regularly in Melbourne on weekends, I cannot find that they are cohabiting.
There is no evidence that the Applicant is cohabiting with another person.
Section 90SF(3)(n): the terms of any order made or proposed to be made under section 90SM in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party.
The terms of the orders I propose to make in this case will provide each party with a property to live in and will provide for the sale of the investment properties with the consent of the parties. There is no vested bankruptcy property to be considered.
Section 90SF(3)(o): the terms of any order or declaration made, or proposed to be made, under this Part in relation to:
(i) a party to the subject de facto relationship (in relation to another de facto relationship); or
(ii) a person who is a party to another de facto relationship with a party to the subject de facto relationship; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii).
This consideration is not relevant in this case.
Section 90SF(3)( (p) the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:
(i) a party to the subject de facto relationship; or
(ii) a person who is a party to a marriage with a party to the subject de facto relationship; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii).
This consideration is not relevant in this case.
Section 90SF(3)(q) : any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship.
I have already discussed this issue in paragraphs 128 to 136 above.
Section 90SF(3)(r): any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account.
I do not consider that there is any other particular fact or circumstance in this case which the Court needs to take into account.
Section 90SF(3)(s): the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and
This consideration is not relevant in this case.
Section 90SF(3)(t): the terms of any financialagreement that is binding on a party to the subject de facto relationship.
This consideration is not relevant in this case.
When all the S.90SF(3) considerations are taken into account, I find that an adjustment of seven-and-a-half per cent (7.5%) in favour of the Respondent is appropriate. That is, the Respondent should receive fifty-seven-and-a-half per cent (57.5%) of the parties net assets, and the Applicant forty-two-and-a-half per cent (42.5%).
While I have taken the issues surrounding the (investment omitted) into account in arriving at that figure, I will make no specific order in relation to the outcome of those (investment omitted).
F. What orders, if any, should the Court make to alter the current interests of the parties in that property so as to provide a just and equitable settlement between them?
For the Applicant to receive 42.5% of the property including superannuation, he would need to retain property worth (in round figures) a total of $292,380.
The Respondent would then receive property worth a total of $395,570.
I propose to effect that division as follows:
The Applicant will retain:
Property R property $425,000
The liability from the expected shortfall on the
sale of the investment properties ($108,000)
His Toyota (omitted) motor vehicle $12,500
Superannuation after a split of $27,820 to
the Respondent $62,930
Liability for the three (omitted) Bank loans ($34,600)
Payment to the Respondent ($65,450)
Total property $292,380
The Respondent will retain
The Property M property $335,000
Her Toyota (omitted) motor vehicle $ 3,000
Superannuation after a split of $27,820 from the
Applicant $ 85,120
Payment from the Applicant $ 65,450
Mortgage on Property M property ($93,000)
Total property $395,570
There is one more property issue outstanding. The parties own a piano which is, or at least once was used by the children. Each of them wishes to retain it as part of these proceedings. It is said to be worth between $2000 and $5000.
When I consider that the Applicant will receive the benefit of the remainder of the money invested in the (investment omitted) (which is possibly in the realm of tens of thousands of dollars) when those (investment omitted) expire (and indeed may have already done so), that he has already received $10,000 from the Property K sale, and that the Respondent has had the benefit of $37,720 from the (investment omitted), I consider that it is appropriate that the Respondent retain the piano that is currently in the Property R property. I will therefore make an order to that effect.
Parenting Orders
The only parenting issue outstanding is whether the injunction currently preventing the Respondent from allowing her partner, Mr T, to come into contact with the children, ought to be discharged.
The Applicant wishes the injunction to remain. He says that Mr T is a violent and dangerous man and that his children are at risk if allowed to have contact with him.
In support of that contention, the Applicant presented evidence of multiple text messages and silent telephone calls which he says he received from Mr T in 2012 and 2013 and which he says caused him to fear for his safety. The Applicant took out an Intervention order against Mr T soon after the Respondent left the relationship.
His counsel adduced further evidence from Mr T under cross-examination relating to an incident of family violence which allegedly took place in Adelaide between Mr T and his former wife well before Mr T met the Respondent. While police records show that they attended Mr T’s home on that occasion, no charges were laid in relation to that incident and neither was a family violence restraining order made.
At its highest, the evidence adduced by the Applicant on this issue reveals considerable animosity between the Applicant and Mr T. I note that is not at all unusual for ex-partners and new partners to be in conflict in cases that come before this Court.
However, Mr T was able to provide evidence of his good character in the form of a police check carried out by the (religion omitted) of Adelaide in 2013 and his demeanour in the witness box while giving evidence about his quite extensive community and charitable work was quite persuasive.
Mr T has been prevented by injunction from seeing the children of his partner since 18 December 2012. That injunction was made on an interim basis by Judge Whelan. It is not unusual for such interim injunctions to be made as a precautionary measure while evidence of risk to children is being gathered.
After hearing all the evidence, and having the opportunity to see Mr T in the witness box, where he impressed as a reasonable and insightful man, I am not satisfied that he is currently a threat to the safety or wellbeing of the children and therefore will discharge the injunction ordered on 18 December 2012 as I do not consider its continuation to be necessary in the best interests of the children. Indeed the very existence of the injunction has been the cause of much of the tension between Mr T and the Applicant with the Applicant not believing that the Respondent has always complied with its terms.
Conclusion
This case has not been an easy one to determine, partly because of the way it was prepared by the parties’ solicitors and partly because of the way it was run by their counsel.
The delay in receiving proposed Final Parenting Orders to be made by consent only added to the frustration felt by the Court in concluding the matter.
It is to be hoped that the parties will now be able to put their differences behind them and get on with their lives in such a way as to promote the wellbeing of their children, who are clearly greatly valued and much loved by both parents.
I certify that the preceding one hundred and seventy-five (175) paragraphs are a true copy of the reasons for judgment of Judge Small
Date: 11 August 2014
Key Legal Topics
Areas of Law
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Family Law
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Property Law
Legal Concepts
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Remedies
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Procedural Fairness
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Costs
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Injunction
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Statutory Construction
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