Pappas & Pappas
[2008] FMCAfam 790
•1 August 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| PAPPAS & PAPPAS | [2008] FMCAfam 790 |
| FAMILY LAW – Child aged five years – final arrangements for care – parties agree presumption of equal shared parental responsibility should apply – whether both reasonably practicable and in child’s best interests for child to live with each of her parents for equal periods on week about basis – nature of parties’ parenting relationship – capacity to communicate effectively – best interests. PROPERTY – Relationship and marriage of eight years – asset pool – assessment of contributions – whether asset by asset or global approach – weight to be given to gift by one party’s parent – inheritance – s.75(2) factors – just and equitable. |
| Family Law Act 1975, ss.60B; 60CA; 60CC; 61DA; 65DAA; 65DAC; 75(2), 79(4) |
| Lee Steere v Lee Steere (1998) FLC 91-626 D & D [2003] FamCA 473 Goode & Goode (2006) FLC 92-286 C & C (2005) FLC 93-220 Gosper & Gosper (1987) FLC 91-818 Levick & Levick (Family Court of Australia) delivered 31 January 2001 (Moore J) |
| Applicant: | MR PAPPAS |
| Respondent: | MS PAPPAS |
| File Number: | ADC 3070 of 2007 |
| Judgment of: | Brown FM |
| Hearing dates: | 23 & 24 June 2008 |
| Date of last submission: | 11 July 2008 |
| Delivered at: | Adelaide |
| Delivered on: | 1 August 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr D Whittle |
| Solicitors for the Applicant: | Moody Rossi & Co |
| Counsel for the Respondent: | Ms Hurley |
| Solicitors for the Respondent: | Pederick Lawyers |
ORDERS
The husband and wife have equal shared parental responsibility for the child of the marriage [B] born in 2003 (hereinafter referred to as “the child”).
The child live with each of her parents for equal periods of time as follows:
(a)During school term times, on a week about basis, with the child moving between her parents’ respective homes from after school on each Friday provided that on Wednesday of each week the child will spend from after school until 7:30pm that Wednesday with the parent she is not living with during the week concerned;
(b)For half of each school holiday, the halves to be agreed between the parties and failing agreement to be the first half with the father in 2008 and each even ending year thereafter and the first half with the mother in 2009 and each odd ending year thereafter and the other parent to have the remaining half of each such school holiday.
The child spend time with her parents on the following special occasions:
(a)In the event that Greek Orthodox Easter does not coincide with Roman Catholic Easter at times to be agreed between the parties so that the child spends equal periods of time with both of them during Greek Orthodox Easter and failing agreement as follows:
(i)With the husband from 3:30pm on Good Friday until 6:00pm on Easter Saturday in 2009 and each alternate year thereafter;
(ii)With the wife from 6:00pm on Easter Saturday until 9:00am on Easter Monday in 2009 and each alternate year thereafter;
(iii)With the husband from 6:00pm on Easter Saturday until 9:00am on Easter Monday in 2010 and each alternate year thereafter; and
(iv)With the wife from 3:30pm on Good Friday until 6:00pm on Easter Saturday in 2010 and each alternate year thereafter.
(b)At Easter at times to be agreed between the parties so that the child spends equal time with both of them during the period of Easter and failing agreement as follows:
(i)With the husband from 3:30pm on Good Friday until 6:00pm on Easter Saturday in 2009 and each alternate year thereafter;
(ii)With the wife from 6:00pm on Easter Saturday until 9:00am on Easter Monday in 2009 and each alternate year thereafter;
(iii)With the husband from 6:00pm on Easter Saturday until 9:00am on Easter Monday in 2010 and each alternate year thereafter; and
(iv)With the wife from 3:30pm on Good Friday until 6:00pm on Easter Saturday in 2010 and each alternate year thereafter.
(c)At Christmas time at times to be agreed between the parties so that the child spends equal time with both of them during Christmas and failing agreement as follows:
(i)With the husband from midday on 24 December 2008 until midday on 25 December 2008 and each alternate year thereafter;
(ii)With the wife from midday on 25 December 2008 until midday on 26 December 2008 and each alternate year thereafter;
(iii)With the wife from midday on 24 December 2009 until midday on 25 December 2009 and each alternate year thereafter; and
(iv)With the husband from midday on 25 December 2009 until midday on 26 December 2009 and each alternate year thereafter.
(d)On each of the parties’ birthdays so that the child spends time with the parent who is not providing the child’s residence on the occasion of such birthday for a period of at least three hours at times to be agreed between the parties and failing agreement to be from 3:30pm until 6:30pm on the occasion of that party’s birthday.
(e)On the child’s birthday so that the child spends at least three hours on her birthday with the parent who is not providing a residence for her on the occasion of her birthday at times to be agreed between the parties and failing agreement to be from 3:30pm until 6:30pm.
(f)In the event that Father’s Day falls on a weekend when the child is in the care of the wife the child will spend from 9:00am until 6:00pm with the father on Father’s Day.
(g)In the event that Mother’s Day falls on a weekend when the child is in the care of the husband the child will spend from 9:00am until 6:00pm with the father on Mother’s Day.
Each parent shall have the right to obtain copies of the said child’s school, academic records, report cards, progress cards, school magazines and newsletters, school photographs (at their own cost), fees and enrolment information and such information pertaining to the child’s school and school related sports activities.
Each party has the right to attend at the child’s school for all events that are routinely attended by parents.
Should a medical emergency arise in relation to the said child whilst the said child is in the care of either of her parents then the parent concerned shall notify the other parent as soon as practicable of the time and nature of such medical emergency, the name and an address of any treating medical practitioner and hospital attended by the child and the location of the child.
The husband and wife shall have the right to communicate with and obtain any information concerning the said child’s physical and mental health and welfare direct from any medical practitioner, specialist medical practitioner, psychologist, psychiatrist, other health professional, counsellor and/or social worker.
The parties be each restrained and an injunction issued restraining each of them from removing the said child from her enrolment at the [Z] Primary School without the written consent of the other party.
The child be at liberty to communicate with the parent with whom she is not living by telephone, text message, email or other electronic means at all reasonable times and the parent with whom the child is then living shall facilitate such communications.
The parties facilitate the child’s regular attendance at any extra curricular activities which the parties have agreed that the child should undertake from time to time.
The parties be restrained and an injunction issue restraining each of them from denigrating the other or members of the other’s family in the presence of the child or permitting any other person to do so.
In full and final settlement of all claims for settlement of matrimonial property:
The balance of the net proceeds of sale of Property W in the State of Queensland be divided between the parties as follows:
(a)The sum of one hundred and twenty-six thousand three hundred and sixty dollars four cents ($126,360.04) to the wife;
(b)The balance to the husband.
The husband indemnify and keep the wife forever indemnified in respect of any liability arising out of his interest in the property known as and situated at Property M, P in the State of South Australia and his partnership in the business known as [X].
The husband be liable for all remaining capital gains tax outstanding in respect of the sale of , Property W in the State of Queensland and keep the wife indemnified in respect of same.
The husband be liable for the payment of the outstanding credit card debt standing in his name and forever keep the wife indemnified in respect of it.
The husband be declared the beneficial owner, to the exclusion of the wife, of the property known as and situate at Property M, P in the State of South Australia and the business known as [X].
The wife retain as her sole property without any claim from the husband:
(a)Her personal effects and clothing currently in her possession;
(b)Her furniture, furnishings and household effects currently in her possession;
(c)The proceeds of sale of the Toyota Corona motor vehicle registered number [omitted];
(d)The Hyundai Elantra motor vehicle currently in the wife’s possession;
(e)All insurance policies, superannuation entitlements and moneys standing in her name in any bank or other financial institution.
Pursuant to section 90MT(4) of the Family Law Act 1975 a base amount of six thousand dollars ($6,000.00) be allocated to the wife in respect of the husband’s superannuation interest in the MLC Master Key Superannuation Fund and that pursuant to section 90MT(1)(a) whenever a splittable payment becomes payable in respect of that interest, the wife is entitled to be paid the amount to be calculated in accordance with the Family Law (Superannuation) Regulations 2001 in respect of that base amount and there is a corresponding reduction in the entitlement of the husband.
The Trustee of the MLC Master Key Superannuation Fund the husband and the wife in accordance with the Family Law (Superannuation) Regulations 2001 shall do such acts and things and sign all such documents as may be necessary to calculate the payment entitlement of the wife in accordance with order (18) hereof.
Order (18) of these orders have affect from the operative time which shall be on 1 September 2008.
The solicitor for the wife serve a copy of these orders on the Trustee of the MLC Master Key Superannuation Fund and the Trustee and the parties be given liberty to re-list the matter on giving seven (7) days written notice if the Trustee is unable to comply with the order herein.
The husband retain as his sole property without any claim from the wife:
(a)His personal effects and clothing currently in his possession;
(b)His furniture, furnishings and household effects currently in his possession;
(c)The Holden Commodore motor vehicle registered number [omitted];
(d)The properties to which he is beneficially and legally entitled in Greece; and
(e)All insurance policies, superannuation entitlements and moneys standing in his name in any bank or financial institution other than the superannuation interest referred to in order (18) above.
That all applications herein be otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Pappas & Pappas is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADC3070 of 2007
| MR PAPPAS |
Applicant
And
| MS PAPPAS |
Respondent
REASONS FOR JUDGMENT
Introduction
Mr Pappas (“the husband”) and Ms Pappas (“the wife”) are the parents of [B] born in 2003. The parties began to live together in June 1998, married in Adelaide in October 2001 and finally separated on
22 September 2006.
These proceedings relate to final arrangements for [B]’s care and the division of the parties’ matrimonial property, as the parties themselves are currently unable to agree on the necessary arrangements, now that their marriage has ended.
It is the husband’s position that [B] should be cared for, by her parents, in what is commonly called a shared parenting regime, moving between her parents’ homes, on a week about basis, after school on each Friday. He also proposes that [B] should spend equal periods of time, with her parents, during school holidays and on nominated special occasions.
On the other hand, it is the wife’s position that, up to this stage, she has provided more of [B]’s care and as a result [B] is more closely bonded to her. In addition, she characterises the parties’ parenting relationship as being poor and their capacity to communicate effectively with one another as being severely compromised, largely because of the husband’s domineering attitude towards her.
As such, the wife contends that a shared care regime is neither workable nor likely to be in [B]’s best interests. Accordingly, the wife proposes that [B] spend time with her father, on alternate weekends, and overnight on Wednesday, in the intervening week, as well as for defined periods during school holidays and on special occasions.
In November 2006, not long after the parties separated, they agreed on some orders, in the Family Court at Adelaide, in respect of interim arrangements for [B]’s care. It was agreed that [B] would spend time with her father on alternate weekends and Wednesdays. The orders further provided that by the time [B] was attending school, she should spend five nights per fortnight and half of each school holiday period with her father.
This provides the ambit of the dispute, between the parties, in respect of [B]’s care. The husband contends he now has a firm base of providing care to [B] and it is now time to extend it. The wife points to [B]’s age and urges a more cautious approach.
As is commonly the case in proceedings concerning the care of children, the parties agreed to commission an expert to provide a report for them and the court as to [B]’s level of relationship with each of them and how her interests might best be served.
This report was prepared by Dr Coats, an experienced child psychologist. He reported as follows:
“The father has already been enjoying a pattern of time with [B] comprising five nights per fortnight, so it is not a big shift to add on two days and make it full shared care. I am of the view that [B] would benefit from this being week about with provision for one mid-week time with the other parent (for example, for a few hours on a Wednesday). I can find no compelling argument for retaining the present pattern. It is likely that it may in fact contribute to some of the transitional difficulties in [B]’s behaviour reported particularly by the mother. In any event, it is imperative that the parents not engage in conflict or denigrate the other party in the presence of the child.[1]
[1] See family report at page 10
The husband asserts that Dr Coats has made a correct assessment of the situation and the court should adopt his recommendation. On the other hand, it is the wife’s position that Dr Coats has been unduly optimistic about the parties’ capacity to cooperate with one another and has grossly under estimated the potentially deleterious consequences for [B] of her parents’ poor and acrimonious parenting relationship.
The property aspects of the case were bitterly contested. Fundamentally, the parties disagree about what is the extent of their pool of matrimonial assets – the wife asserting that the husband has concealed several valuable assets, from her, behind the sham of his mother’s purported ownership of them – the husband contending the wife is intent on manipulating circumstances to inflate artificially the pool of property, to suit her own ends.
The parties also disagree about how their contributions to various items of property should be assessed. The husband pointing to the fact that he inherited some land from a relative in Greece and his mother gave him an interest in a [omitted] business and its premises in P. As such, he asserts that the wife has made no direct contribution to his acquisitions of these items of property. The wife does not agree.
Rather, the wife asserts that she is entitled to 65% of a much bigger asset pool than the husband is prepared to concede. For his part, the husband contends that the wife is entitled to 50% of the proceeds of sale of an investment property, which the parties owned in Queensland. The sum involved is just over $160,000.
For her part, the wife contends that the proper pool of property is valued somewhere in the vicinity of $1million, when items of property, which are in reality in the proper control of the husband, rather than his mother, are included. As is apparent from this brief introduction, the positions of the parties, in respect of property issues, are diametrically opposed.
It was Dr Coats’ opinion that the differences, between the parties, in respect of property issues were preventing them reaching agreement in respect of arrangements for [B]’s care. He wrote as follows:
“There have been ongoing and as yet unresolved disputes over property and from all reports this is a complex area given the various properties and assets involved. However, I am hopeful that the resolution of these, either by prior agreement or via the upcoming trial process, can help clear the air between the parties and allow them to get on with a mutually constructive approach that ensures [B]’s needs are met in optimal fashion over the coming years.”[2]
[2] See family report at page 10
Although the parties have been able to agree on which primary school [B] should attend, another area of extreme controversy between them, they remain deadlocked about parenting arrangements for [B] and particularly what is and how their matrimonial property should be divided.
These proceedings are designed to resolve the various disputes between the parties, and, as far as possible, finalise their financial relationship with one another. When parents, who no longer live together, ask the court to determine where and with whom their child should live, it is the best interests of the child concerned which are paramount.[3]
The legal principles to be applied and the issues in the case
[3] See Family Law Act at section 60CA
a) Property Aspects
The process to be followed for the division of the parties’ property is well established by law.[4] The relevant legal principles are primarily contained in sections 79 and 75(2) of the Family Law Act 1975. I am required to follow a number of specific steps.
[4] See Lee Steere v Lee Steere (1998) FLC 91-626; Ferraro v Ferraro (1993) FLC 92-335;
Firstly, I must ascertain what are the parties’ assets and liabilities as at the date of trial.[5] This is the most contentious area of dispute between the parties, in the following major areas:
[5] See Wardman & Hudson (1978) FLC 90-466; and Biltoft & Biltoft (1995) FLC 92-614
·The husband and his mother, Ms P are currently the registered proprietors, in equal shares, of a property located at Property M, P. It is common ground that the total property is worth $436,000.
·The husband says he was given a one half share in the property, by his mother, in early March 2002.
·The wife says Ms P Senior holds the half share of the property currently registered in her name, on trust for the husband, who is beneficially entitled to the whole property.
·The husband and Ms P Senior operate a [omitted] business in half of the Property M property, which is a duplex. The other half of the building is rented.
·It is the husband’s position that he and his mother have agreed that she should receive the entire rent received from the property in order to provide her with some financial security and in consideration of her earlier gift of half of the property to the husband.
·The wife asserts that the rental received from the P property should be notionally “added back”, into the parties’ pool of assets and be counted as a matrimonial resource, of which the husband has prematurely received the benefit.
·Ms P is the registered proprietor of a property situate at Property O, P. This property is directly behind Property M. The property is valued at $335,000. Currently the husband is living in the premises, which he asserts he rents, for proper value, from his mother.
·The wife is suspicious of the various transactions regarding the Property O property, particularly that the property was acquired by Ms Pappas around about the time of the parties’ separation. Again, she asserts the transaction is a shame and the property concerned is constructively owned by the husband and, as such, should be included in the pool of the parties’ matrimonial assets.
·The husband does not agree. He points to the fact that his mother is the legally registered proprietor of the property concerned and the wife has not formally sought to join her as a party to these proceedings. Accordingly, it is his position that the court has no jurisdiction to make any orders in respect to the Property O property which, in any event, he has no interest in.
·The husband’s parents operated a [omitted] business ([X]), at the Property M premises, with a Mr N. Mr N never had a legal interest in the Property M property. It is the husband’s position that he purchased Mr N’ interest, in the [omitted] business in March 2002 for the sum of $20,000.
·The husband’s father died some years ago. Ms Pappas inherited his interest in both the [omitted] business and the Property M property, on his death.
·It is the husband’s position that his mother continues to own a one half share in the [omitted] business and accordingly it is appropriate that only one half of the business be included in the parties’ pool of assets.
·The wife does not agree. She asserts that the husband owns the entire [omitted] business and any suggestion that Ms P owns one half of the business is a sham.
·It is agreed between the parties that the husband inherited some land at Zakynthos, Greece, currently worth $130,000.
·
The parties also agree that they purchased a property at
Property C, P in January 1999. This property was sold in October 2002 and subsequently an investment property was purchased in Property W, Queensland. This property has been sold. The parties agree that the proceeds amount to $160,401.84.
·
In large part, the wife’s claim that the husband has acted in concert with his mother to defeat her proper entitlements in this case, rests on a document executed by the husband and
Ms P Senior, which bares the date 1 May 2002.[6]
·The document purports to be a sale agreement in respect of the Property M property and the [omitted] business, pursuant to which the husband had purchased Ms P Senior’s interest in both for the sum of $200,000.
·Accordingly, it is the wife’s position that the document conducively establishes that the husband is the constructive owner of the entire legal interest in both the Property M property and the business.
·The husband acknowledges that he executed the document but states that it was composed following the parties’ separation and has been intentionally wrongly dated. He now describes the document as “dodgy” and totally resiles from it.
·It is his position that the document was formulated, immediately following the parties’ separation and was soon regretted and withdrawn by him.
·It is his position that the “document was misguidedly drawn by him in an attempt to protect his mother’s gift, to him, of the one half share in the Property M property and the [omitted] business, from being formally included in the parties’ pool of assets, by the suggestion that it was subject to a loan, to him, from his mother.
·Needless to say, the wife does not accept this explanation and asks the court to accept that if the husband is capable of being so self-admittedly disingenuous, the court can have no confidence in his evidence.
·The parties agree on the value of their respective superannuation interests, which are modest. The parties also agree on the value of their other items of property and other liabilities, which are also modest.
[6] See Annexure “U” to the wife’s Affidavit filed 4 June 2008
The husband vigorously refutes any suggestion that anything other than a one half share in both the [omitted] business and the Property M property should be included in the parties’ pool of assets. He also asserts that he has no interest in the property situate at Property O, P. If his assertions are accepted, the pool of the parties’ property amounts to just under $560,000.
On the other hand, the wife asserts that the matrimonial pool of property, when the entirety of the Property M property and Property O are included comes to somewhere in excess of $1.1million, although she concedes that there may be a mortgage secured against the
Property O property.
Secondly, I must ascertain the contributions which each party has made towards those assets. Contributions fall into two broad categories.
The first kind is contributions to the property: financial contributions and non-financial contributions, made directly or indirectly, by or on behalf of a party to the marriage to the acquisition, conservation or improvement of any of the property.
The second kind is contributions to the welfare of the family: in the words of the section, “the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage, including any contribution made in the capacity of home maker or parent.” It is clear from the authorities that this second kind of contribution must be given appropriate weight and is not to be treated as a token matter or as a contribution which is inherently less valuable or important than a financial contribution to property.
In assessing the parties’ contributions to the acquisition of the assets of their marriage, it is necessary to consider whether the court should adopt a global approach or an asset by asset approach. In the former, the court assesses the parties’ contributions to their assets in a total or comprehensive manner. In the latter, the court assesses the parties’ contributions to individual items of property.
The global approach is the method generally adopted because it is usually the more convenient, particularly when the court is assessing different types of contributions – home making and financial – towards the acquisition of the various assets concerned.[7]
[7] See Norbis v Norbis (1986) FLC 91-712 at 75,268
However, the court retains a discretion to adopt the asset by asset approach in appropriate cases. Cases where it is appropriate to adopt this approach include those where the parties have made different contributions to the assets concerned; or where the marriage between the parties has been short and they have kept their assets separate. In determining what is the appropriate approach, the court must have reference to considerations of justice and equity.[8]
[8] See Norbis (supra) at 75,173-75,174 and McMahon & McMahon (1995) FLC 92-606
The second step occasions controversy between the parties in the following major areas:
·The husband asserts that the court should adopt an asset by asset approach in respect of what he says is his one half interest in the Property M property; his one half interest in the [omitted] business; and the property in Greece, which he inherited.
·As such, the court should assess his contributions towards the acquisition of these assets as being total or close to it, as he inherited the Greek properties and received his interest in the Property M property and the [omitted] business, as a gift from his mother.
·The wife does not accept this assertion and submits that the court should take a global approach to all items of matrimonial property, including the Property M property; the [omitted] business and the properties in Greece.
·In support of her submission, she points to the fact that the husband received his interest in the business and Property M property in early 2002.
·As such, the wife contends that income from the business has been utilised to maintain the husband’s interest in the property, to which she must be taken to have contributed, by reason of her other marital contributions, including working in the business from time to time.
·In addition, it is the wife’s position that these same factors entitle her to some interest in the substantial appreciation in value of the Property M property, in the period since the husband acquired his interest in it.
·The wife asserts that she has some, albeit modest, interest in the inherited Greek properties, as matrimonial income was utilised in paying legal fees and travelling to Greece to secure the husband’s entitlements.
·The husband asserts that he made a superior financial contribution towards the purchase of the Property C, P property in August 2000. He asserts that he paid the deposit of $30,000 and his mother paid stamp duty and other costs on the property of around $10,000.
·It is his position that this contribution merits “special recognition” because it is so disproportionate to other contributions made during the marriage, particularly as the wife had no savings to speak of, when the parties married.
·The wife does not accept this and contends she contributed around $10,000 to the purchase of the Property C property.
·The wife worked at [omitted] between 1997 and 2000. It is her case that she sustained a work related injury in 1998, which resulted in a payment to her of around $42,000, which she received in July 2000.
·It is the wife’s position that this sum was largely contributed towards the reduction of the mortgage on the Property C property and the payment of other joint matrimonial debts. As such, it is a significant contribution which also merits “special recognition”.
·The husband worked for the [omitted] Bank until late 2001. Thereafter he started working at the [omitted] business – [X].
·It is the wife’s position that she worked extensively at [X] between early 2000 and shortly before [B]’s birth in 2003.
·The husband rejects any assertion that the wife worked extensively in the business. He does concede that she did the majority of household duties, during this period.
·The husband asserts that he has been the parties’ principal wage earner during the marriage.
·The wife asserts that she has been the main homemaker and parent for [B].
At the end of the second stage, the husband asserts that the court should generally assess the parties’ contributions towards the acquisition of the parties’ interest in the proceeds of sale of the Property W property and the other miscellaneous items of property 52.5% - 47.5% in his favour, particularly bearing in mind his superior financial contributions. However, he would be satisfied if the court divided these items equally. As previously indicated, he does not accept that the wife has made any contributions towards the other items of property, which are notionally included in the pool.
On the other hand, it is the wife’s position that her contributions to all the assets in the pool are significant, given the length of the relationship and subsequent marriage between the parties and her overall efforts as a parent and homemaker.
The third step involves the assessment of the parties’ prospective needs, by reference to the factors set out in section 75(2) of the Family Law Act 1975. Pursuant to section 75(2)(o), the Court is entitled to take into account “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.
In the main, section 75(2) deals with the prospective needs of the parties. This area too, occasions controversy between the parties in the following areas:
·The husband asserts that the parties are both in their early 30s and enjoy good health. He also proposes that they have a shared care arrangement in respect of their child. As such, he asserts that there should be no distribution in favour of either party by reason of any section 75(2) factor.
·It is the wife’s position that she has no specific skills to speak of, having emigrated, from Greece to Australia, in 1994.
·On the other hand, the husband is a self employed picture framer, who owns a piece of real property, from which he operates his business. As such, the wife asserts that the husband has a significant advantage over her by way of financial resources and skills to earn an income.
·It is also the wife’s position that she should retain more of the responsibility for caring for [B] in future.
At the end of the third stage, it is the wife’s position that she should be entitled to a further allowance of at least 10% by virtue of the applicable section 75(2) factors in respect of the whole property pool, as she has calculated it.
The husband acknowledges that if his preferred approach is adopted by the court, in respect of both the pool of assets and the parties’ individualised contributions in respect of them, it will leave him with considerable capital interests, particularly in the form of his interest in the Greek property and Property M property. In light of this, he proposes that the wife receives an additional 10% of the proceeds of sale of the Property W property and the other more modest assets of the parties.
In support of his position, the husband points to the fact that it is unlikely that he will ever be able to sell the inherited Greek properties, due to the fact that he holds his interest with other family members in Greece and the property itself is unlikely to yield him any direct income. As such, he submits that his ownership of this property does not confer any concrete benefit upon him.
Finally in determining what order the court should make under section 79, the court must be satisfied that in all the circumstances, it is just and equitable to make the relevant orders. Overall, it is the justice and equity of the actual orders that the court must consider.[9]
[9] See Russell v Russell (1999) FamCA 187
The “overriding requirement” of section 79 is that considerations of justice and equity should inform each step of the process. The exercise I must undertake is not a “process of social engineering”[10] or of equalisation of assets or financial resources.
[10] See Waters & Jurek (1995) FLC 92-635
At the outset, I am at pains to point out to the parties that the task I must undertake is not a simple accounting or arithmetical task. In the jargon of the times, I cannot “crunch the numbers” to come up with a division of their property, which is not open to challenge or incapable of different interpretation.
Marriage is by and large a joint enterprise. How much buffer spouses must give one another, when financial set backs occur, must depend on the degree of consultation and acquiescence in their relationship.[11]
[11] See D & D [2003] FamCA 473 at paragraph 49
The task, set out for me in this case, requires me to balance and compare contributions which are by their nature different, within the framework of a marriage. Many contributions in a marriage, such as being a homemaker, do not result in the direct acquisition of assets. They are also difficult to value. The discretion I have is a wide one.
b) Child issues
Part VII is the part of the Family Law Act which deals with orders relating to children. The service of [B]’s best interests is the most important consideration in this case [Family Law Act s.60CA].
The aims and principles of Part VII [section 60B] emphasise the desirability of a child’s parents being as closely involved as possible in their child’s life, both in terms of the exercise of parental responsibility and the time they each spend with their child, commensurate with the need to protect the child concerned from physical or psychological harm arising from the child being subjected to abuse, neglect or family violence.
These principles also speak of the entitlement of children to spend regular periods of time with those who are significant to them. Obviously these people include parents but also other relatives, particularly grandparents [section 60B(2)(b)].
Given the importance of both parents being closely involved in their child’s life, the starting point for any parenting order is to consider whether the parents concerned should have equal shared parental responsibility for their child [section 61DA].
The presumption of equal shared parental responsibility is rebutted if it is found, on reasonable grounds, that one of the child’s parents has abused the child concerned or exposed him or her to family violence [section 61DA(2)].
The presumption is also rebutted if evidence is provided which satisfies the court that it would not be in the child’s interests for his or her parents to have such equal shared parental responsibility [section 61DA(4)].
The presumption itself does not determine the extent of time the child concerned spends with each of his or her parents. This is determined by section 65DAA.
If the presumption applies, the court is required to consider firstly whether the child should live with his or her parents for equal periods of time, provided this outcome is both likely to be in the child’s best interest and reasonably practical.
If the court rejects equal time, it is then required to consider the child living with each of his or her parents for “substantial and significant” periods of time. Again this outcome is subject to considerations of the child’s best interests and practicality.
The Family Law legislation emphasises the importance of parents being actively involved in their children’s lives – in their schooling; sporting activities and recreation; and their daily routine; as well as special occasions; – so long as this involvement is commensurate with protecting the children concerned from harm.
The concept of children spending either equal periods of time or substantial and significant periods of time with their parents is predicated on the satisfaction of two criteria. Firstly the court must be satisfied that such arrangements are likely to be in the best interests of the children concerned and secondly the arrangements are likely to be reasonably practicable to put into operation.
In considering the children’s best interests, I must look to a long list of matters in section 60CC of the Family Law Act. There are two categories of matter I must consider – primary considerations and additional considerations.
There are two primary considerations – firstly the need to ensure that the children concerned have a meaningful relationship with both their parents – secondly the need to ensure they are protected from harm, both physical and psychological harm, which may arise if they are exposed to any kind of abuse or neglect, including family violence.
The additional considerations are more numerous [section 60CC(3)]. Again, their application must depend on the particular circumstances of the case concerned. Although the primary considerations are generally to be given more emphasis, arising as they do from the aims and principles of the Family Law legislation, in determining the outcome of a particular case, one or more of the additional considerations may come to the fore.
Issues of practicality are dealt with by section 65DAA(5). The court is required to consider how far apart are the parties’ homes; the parties’ current and future capacity to implement shared care type arrangements; the parties’ ability to communicate with one another and solve parenting problems consensually; and most importantly, the likely impact of such an arrangement on the children concerned.
If, for whatever reason, the court reaches the conclusion that the presumption of equal shared parental responsibility does not apply and so there is no need for it to actively consider either an equal time or substantial and significant time arrangement, the court is still required to put into place the outcome which it considers will best serve the best interests of the children concerned, according to the various criteria set out in section 60CC and subject to the objects and principles contained in section 60B. Pursuant to section 65D, the court is empowered to make whatever parenting order it thinks proper.[12]
[12] See Goode & Goode (2006) FLC 92-286 at 80,899 [paragraph 65]
In this particular case, the following issues seem to arise regarding future arrangements for [B]’s care:
·The parties agree that they should have equal shared parental responsibility for [B]. [section 61DA].
·This being so, is it likely to be both in her best interests and reasonable practicable for her to live with her parents for equal periods of time? [section 65DAA(5)].
·Is the parties’ parenting relationship sufficiently cohesive and empathetic to support a shared parenting regime?
·Are the parties’ communication skills so poor that such a regime will not work, as the wife contends, or with the resolution of the property proceedings, will the tension between them dissipate, as the husband contends, and so communications normalise?
·What is the nature of the relationship between [B] and each of her parents? In particular, does she have a primary attachment to her mother? [section 60CC(3)(b)].
·Given the parties current poor attitude to each other, particularly the mother’s ostensible perception that the husband has been intent on cheating her in the property proceedings and the father’s perception that the mother has exaggerated her claims of his poor behaviour in the period immediately after the parties separated, do the parties have an appropriate facility to encourage a close and continuing relationship between [B] and the other parent concerned? [section 60CC(3)(c)].
·Currently [B] spends five days, interspersed in each fortnight, with her father. Will there be any detrimental consequences, for her, of changing such an arrangement to a seven consecutive day arrangement? Should there be a graduated change to such an arrangement? [section 60CC(3)(d)].
·Is one of the parties better placed to provide for [B]’s needs, particularly emotionally? [section 60CC(3)(f)].
·Has the husband been violent towards and derogatory of the wife? If so, what is the relevance of this behaviour for [B]’s best interests? [section 60CC(3)(j)].
·What is the relevance of [B]’s age and the fact that she has never spent more than three days away from the care of her mother? [section 60CC(3)(g)].
·Finally and most importantly, what is the best outcome for [B]?
The evidence
The husband relied on the following documents:
i)an affidavit of himself filed 23 May 2008;
ii)a statement of his financial circumstances filed 23 May 2008;
iii)an affidavit of his mother, Ms P filed 24 June 2008.
The wife relied on the following documents:
i)an affidavit of herself filed 4 June 2008;
ii)a statement of her financial circumstances filed 4 June 2008.
In addition, both parties relied on the family report of Dr Coats dated 4 May 2008. This was tendered into evidence. The parties themselves, Ms Pappas and Dr Coats were the only witnesses who gave evidence in these proceedings.
Dr Coats has been a psychologist, specialising providing in providing family reports for courts adjudicating disputes concerning arrangements for children, since 1996. During that time, he has prepared literally hundreds of family reports. He is also a psychologist in private practice. He estimates that between sixty and seventy percent of his practice relates to children, particularly their parental relationships.
I found Dr Coats’ evidence and report to be thorough and well considered. Given his experience and expertise, it would be imprudent of the court to lightly disregard his recommendations. Overall, I accept Dr Coats’ evidence.
Ms P Senior was not comfortable in the court environment, largely due to her lack of familiarity with it. English is not her mother tongue. Notwithstanding these difficulties, she came across as a delightful and honest person, who is devoted to [B] and her family.
It was obvious to me that she is and has been a very hardworking person. She and her late husband started off with a [omitted] shop, in M, in 1975. The late Mr P Senior worked in the shop, whilst his wife worked in a factory to ensure that the mortgage on the shop could be serviced.
Later, in 1979, the late Mr P Senior and his friend, Mr N started [X] in a shop adjoining the [omitted] shop.
Mr N did not have any financial interest in the business premises of [X] in M as Mr and Ms P Senior owned the land concerned. Ultimately,
Mr and Ms P Senior decided that the [omitted] provided a better income and more prospects than the omitted shop, which was closed. Ms P Senior continued to work outside the [omitted] business so that she and her husband would have a regular stream of income to pay the mortgage.
Mr P Senior died in 1984. Accordingly, Ms P Senior inherited her husband’s interest in the Property M property and the [omitted] business through survivorship. The mortgage on the property was paid off long before 2002, in large part due to Ms P Senior’s hard work.
One theme came very strongly from Ms P Senior’s evidence – over many years, she worked very hard to secure her interest in the Property M property, which is a duplex retail premises. It is clear to me that she acquired her interest in the property, over many years and long before the husband became involved in it. I accept this evidence.
The parties currently view each other with a high degree of suspicion. There is ample reason why the parties should be suspicious of one another. In particular, the husband acknowledges that he and his mother concocted a false sale agreement, in respect of the Property M property and the [omitted] business. The document was falsely dated 1 May 2002, when in reality, I find it was created shortly after the parties separated.
The agreement[13] purports to create a loan from the husband to his mother in a sum of $200,000.00 arising from the purported sale of a half share in the real property at M and the business. In his evidence to the court, the husband described the document as “dodgy”. So it is. The husband acknowledges it to be a complete fabrication, designed, somewhat hamfistedly, to defeat any potential claim the wife might make against the property concerned in subsequent family law proceedings.
[13] See annexure Q and U of the wife’s affidavit filed 4 June 2008
Ms P Senior is not a sophisticated business or legal person. She has however worked hard for what she (and her family) have acquired in life. She would not have been the instigator of any scheme directed against the wife but she would have gone along with it and done what her son told her to do, particularly if one thought it would ensure that the Property M property remained in her family’s control.
The husband is an intelligent person, with some commercial background, having worked for the [omitted] Bank for a number of years. At the time of the documents creation, he was shocked by the parties’ separation and no doubt apprehensive about what it might mean for him, both financially and as a parent. The document was his idea. I suspect he regrets it now.
The rationale of the document was clearly to prevent the wife claiming an interest in the half share of the M land, which Ms P Senior had gifted to her son in March of 2002, after the husband had purchased
Mr N’s interest in the [omitted] business. At the time of the transfer the husband intended to run the business himself, with a diminishing level of support from his mother, as she grew older.
From both the husband and his mother’s perspective, the gift of the land and business, in 2002, was to the husband alone. As such, they were apprehensive about any potential claim on them, from the wife, which they considered grossly unfair. Particularly as, from
Ms P Senior’s point of view, she and her late husband had worked so hard to achieve ownership of the property and the business in the first place and it was open to them alone to determine who should benefit from them.
In these circumstances he conceived the idea of the bogus loan from his mother. I accept that he rejected the subterfuge concerned a few days later and properly instructed his solicitor about the agreement and its disingenuous provenance. However, by then the damage was done. The wife contends that, in reality, the husband owns the entire property and business at Property M and Ms P Senior has no remaining interest in it.
Essentially, it is the wife’s case that, if the husband was prepared to deceive her (and potentially his lawyer, her lawyer and in time possibly the court itself) he would have no compunction in doing so again and accordingly the court should treat all his evidence with the highest degree of caution, rejecting it when it comes into conflict with her own evidence.
I do not accept that this is necessarily so. The husband and his mother did a foolish thing, which the husband soon regretted. They were motivated by a desire to protect Ms P Senior’s years of hard work.
The transfer of property in 2002, was an internal arrangement within a close-knit and fairly traditionally orientated Greek family.
Although legally half the property had been transferred to the husband, both Ms P Senior and indeed her son considered that Ms P Senior retained at the very least a moral interest in the property, which both considered it would be unjust if the wife was allowed to make a claim against it. Accordingly, they took things into their own hands.
These machination, though not helpful to the court, are not uncommon in proceedings such as these, where ties of blood and family outlast those sometimes more temporary connections created by marriage.
In my view, the deception concerned was fairly shallow and soon resiled from. As such, I do not accept that the husband is an intrinsically dishonest and manipulative person.
I mean the wife no disrespect, but she did not seem to me to be a sophisticated person financially. During the marriage, it seems clear to me that she was content to leave financial matters largely to the husband, seeing her role as to parent [B] and keep house, whilst the husband was the main family breadwinner. This is most manifest by the fact that it was the husband’s idea to sell the Property C property and purchase an investment property in Queensland.
During the marriage itself, the wife does not suggest that the husband was colluding against her financially. Rather, her concerns surface in the current acrimonious and heavily adversarial proceedings. Her case of financial manipulation, concealment and duplicity, on the husband’s part, rest solely on the concocted sale agreement, created as I have found it, after the parties’ separation, and the suspicion and innuendo, which have followed from it.
The wife can point to no evidence indicative of money being systematically concealed by the husband or a business which supported a grandiose or extravagant lifestyle. The [omitted] business was a modest family operated affair. The wife is not in a position to say anything other than that her mother-in-law and late husband were industrious migrants to this country, who worked hard for what they achieved materially and who wanted to benefit their blood family.
To my mind, there is no compelling evidence to suggest that the husband is some sort of financial svengali, who has attempted to secrete significant assets away from the wife, or that he has had significant sources of income other than the [omitted] business. Rather, at this juncture, I suspect the wife believes what she wants to believe and hopes is true – that there is more property to be divided between the parties than the husband asserts and so she should get a greater share of it.
For understandable and human reasons, the wife is concerned about her future financial security. She re-migrated to this country as a nineteen year old. Although personable and intelligent, she has no specific qualifications. In these circumstances, her motivation in these proceedings, as described to Dr Coats – “all I wanted was a house and the little one”[14] – does not appear to be too far from the mark.
[14] See family assessment at page 3
Both parties describe themselves as being emotional and determined people. I do not disagree with that self-assessment. I suspect that both parties, to some degree, have allowed their respective passions and determination to achieve their respective best outcomes to influence their evidence, either consciously or unconsciously to some degree.
Overall, I think both parties have followed the natural human tendency, in adversarial proceedings such as these, to maximise their own respective contributions and minimise those of the other. Notwithstanding these concerns, I consider both parties to be basically honest witnesses.
However, on balance, I consider that the husband is likely to be a more reliable historian of the parties’ financial affairs because he largely managed them during the parties’ marriage.
In these reasons for judgment, findings of fact are made on the balance of probabilities, based on my observations of the parties and witnesses concerned and a consideration of the overall evidence. In what follows, statements of fact constitute findings of fact.
a) Chronology
The husband was born in Adelaide in 1975. The wife was born in Adelaide in 1976. At the age of nine months, the wife returned to live in Greece with her parents. She returned to live in Australia in 1994.
The parties began to live together in June of 1998. At the time the husband was working in the conveyancing and debt recovery department of the [omitted] Bank. The wife was working as a process worker at [omitted].
The wife sustained a repetitive strain injury whilst at work at [omitted]. She made a claim for workers’ compensation. The claim was settled at some time in 2000 with the wife receiving a sum in excess of $40,000.00.[15]
[15] See exhibit W3
The parties purchased their first home at Property C, P in January of 1999. The purchase price was around $140,000.00. Due to his employment, the husband was entitled to apply for a mortgage loan from [omitted] Bank on advantageous terms. The parties borrowed around $110,000.00, which was secured by way of a mortgage against the Property C property.
In common with many bank employees, the husband seems to have been a diligent saver. There is no doubt that on 1 February 1999 he held $22,000.00 in an account in his name at [omitted] Bank and withdrew $10,000.00 on 1 February 1999. Undoubtedly, this sum represented the deposit on the Property C property.
The wife has established that she had around $6,000.00, in savings, when the Property C property was purchased.[16] She asserts that she placed at least $10,000.00 into the purchase of the Property C property. On the other hand, the husband asserts that he and his mother provided an additional $30,000.00, in addition to the deposit of $10,000.00, which had earlier been paid.
[16] See exhibit H15
It is difficult to unravel these various disputes now. Undoubtedly, the purchase of the property was a joint enterprise by the husband and wife. As such, I accept that both contributed, as best they could, to the completion of the property. It seems more likely than not that the husband and his mother together contributed more directly than the wife. No doubt, the parties also had other significant expenses at the time.
In particular, the parties had purchased a Commodore motor vehicle, through a [omitted] Bank personal loan. It seems clear to me that the wife utilised her WorkCover payment to pay out the motor vehicle loan of $9,000.00 and to significantly reduce the mortgage on the
Property C property.
The parties married in October 2001. Shortly afterwards the husband resigned from [omitted] Bank. He did not find the regimented life of the bank to his liking. It is unclear to me when precisely the wife left [omitted]. She says it was in 2000. The husband puts it earlier in March of 1999. I do not think much turns on this distinction.
After a brief period in Queensland, the parties returned to Adelaide to live. It was around this time that discussions began about the husband assuming an interest in [X]. I accept that the husband purchased
Mr N’s interest in the business, for the sum of $20,000.00, in mid-March of 2002.[17] This sum was borrowed by the husband and his mother from the [omitted] Bank. In recognition of the fact that the husband and Ms P Senior were now the operators of the business, they registered their ownership of the business name “[X]”.[18]
[17] See exhibit H3
[18] See exhibit H11
No doubt in order to consolidate his interest in the business and as a mark of her love and affection for him, at the same time, Ms P Senior gave the husband a half interest in the Property M property.
The transaction was formally registered on 28 August 2002. At the time, the entire property was valued at $80,000.00 and stamp duty was paid on the nominal gift of $40,000.00 made to the husband.
Thereafter the husband worked in the [omitted] business and has done so ever since. The parties are in considerable dispute as to what duties, if any, the wife performed in the business. The husband and his mother are generally dismissive of the wife’s efforts, asserting that she rarely came into the business and then only to use the internet for shopping purposes. On the other hand, the wife asserts that she was closely involved in all aspects of the business, until shortly prior to [B]’s birth.
Disputes of this kind frequently arise in vitriolic property proceedings. They are very often difficult to resolve on the basis of credit alone, particularly in the absence of independent verifying evidence.
On balance, it seems to me likely that the husband and his mother were the major forces behind the business, with some assistance from the wife, which was probably not as extensive as she now contends.
In any event, it seems to me likely that she was involved in more of the homemaking duties than the husband in this period. Certainly, after [B]’s birthday in 2003, she was significantly involved in homemaking duties and parenting [B]. There seems to be no dispute between the parties that she is a capable, loving and child focussed parent.
It is the wife’s case that, some time after Ms P Senior’s gift of the one half share of the Property M property to him, Mr Pappas clandestinely purchased the remaining half of the property from his mother for a sum of $100,000.00. For the reasons already provided, I do not think that such an agreement was made. Certainly, I do not find that Ms P Senior is holding such an interest on trust for the husband.
The wife has produced no evidence regarding any transfer of moneys from the husband to his mother in support of this assertion. Nor does the sum seem to relate to the value of the property at the time.
On balance, it seems to me far more likely that the husband’s explanation for the creation of the sale agreement, upon which the wife now seeks to rely is the correct one.
The wife asserts that the husband frequently referred to the [omitted] business and the premises on which it was conducted as being his property. This may be so but does not necessarily establish the legal reality of the situation. In addition, no doubt with the expiration of time, the husband had an expectation that the business would come to him, as his mother would either bequeath or gift it to him.
But the reality of the situation is that, at the time of the gift,
Ms P Senior was a person in her mid-fifties. She may have had some thoughts of easing out of the business but her financial needs remained significant. In addition, I believe it unlikely that Ms P Senior would want to walk away entirely from what had been her life’s work up until this time.
It was against this background that the husband and his mother reached an agreement regarding the rental nominally received by them in respect of the half of the Property M property, which was not utilised by the [omitted] business. It was agreed that Ms P Senior would receive the rent from this property so that she would always have a reliable income stream, as she got older.
I accept that the husband always had such an understanding with his mother and it is not something he has later concocted. Given my findings about the circumstances surrounding Mrs P Senior’s gift of the property to the husband in the first place, it seems to me to be a highly plausible arrangement.
I am not persuaded to think otherwise by reason of the fact that the husband has declared rent nominally received by him for the property as income for taxation purposes. I do not think that there is anything intrinsically suspicious about this arrangement. Rather, it seems more likely that the husband wanted to do the right thing by the Tax Office, as he deposed in his evidence and also ensure that his mother had as much rental income as possible. No doubt, in part, to express some form of appreciation for the generosity of her gift to him in the first place.
The half of the Property M property concerned has not always been successfully tenanted by the husband and his mother. Indeed, at one time, the property was occupied, rent free, by the parties’ themselves.
It has also been occupied by an unsuccessful printing business, with whom the husband wished to go into business. But the proposed joint venture did not come off and no rental was paid by the business concerned.
More recently, the premises have been rented by a business [S] Inc at an annual rental of $21,840.00. This lease was entered into on 1 August 2006.[19] I accept that this is a proper commercial rental and Ms P Senior has received it. Given these findings, I can see no justification for this rental to be notionally “added back” into the parties’ pool of marital assets.
[19] See exhibit H10
In August of 2002 the parties sold the Property C property for around $250,000.00. The net proceeds were around $70,000.00. Thereafter, the parties elected to purchase an investment property located at Property W in Queensland. The total purchase price was around $340,000.00, of which $280,000.00 was borrowed.
The transaction seems to have been largely the husband’s idea.
The property was negatively geared, the shortfall between the necessary outgoings and the rental received being somewhere between $400.00 and $900.00 per month. The husband paid the sum required from his earnings in the business. No doubt, he obtained some taxation advantage.
Transactions of this kind are unexceptional. Obviously, it was not hidden, in any way, from the wife. Its nature reinforces my conviction that there was nothing extraordinary about the parties’ financial affairs. Certainly, I think it inherently unlikely that the husband was secretly acquiring properties, by means of his income secured from the [omitted] business, whilst the wife was engaged in home duties. Particularly, I do not think he was in cahoots with his mother to this end.
As a result of the death of his father in 1984, the husband became entitled to a three-eighth share in three separate pieces of land in Greece: a vineyard, an olive grove and some farmland on the Island of Zakynthos. He shares this interest with his uncle, who is not particularly well disposed towards him. The uncle occupies the land in question. The husband’s sister and mother also have interests in the property concerned.
I accept the husband’s evidence that he receives no rent from these properties in Greece. I also accept that it is likely to be impossible to persuade any of the parties concerned, including the uncle living in Zakynthos, to sell any of the properties involved.
It is the husband’s case that it was a protracted process for him and his sister to achieve this inheritance, which necessitated them obtaining Greek citizenship – a process which itself took six years. There were then legal proceedings in Greece, involving other of his relatives.
The husband and his sister retained a solicitor in Melbourne, experienced in Greek law, to assist with the process. The husband believes that he instructed this lawyer in 2000 and the legal fees involved were about $5,000.00.
In late 2005 the parties and [B] travelled to Greece for a holiday.
Part of the holiday was spent with the wife’s family but the husband also utilised a portion of it to finalise the necessary documentation in respect of his inheritance.
I accept the husband’s evidence that, in a material sense the properties concerned have little value to him. Certainly, it is not a value which is likely to be realised in the foreseeable future. At best, $5,000.00 of matrimonial property went into the acquisition of this asset, which cannot be realised and produces no income for the husband.
To her credit, although the wife asserts that she assisted the husband in regularising the inheritance, she does not believe that she has any claim on it. Rather, she asserts it should be taken into account when the court considers the parties’ future earning capacity and asset base.[20]
[20] See wife’s affidavit at paragraph 52
It is the wife’s position that the property situated at Property O, P, currently registered in the name of Ms P is in reality the husband’s property. By necessary implication, she asserts that the property was acquired by him through the application of marital income.
The property concerned is situated directly behind the Property M property. This being so, it is the wife’s contention that the husband has long harboured a desire to acquire the property so that the business may expand.
It may be the case that the husband has had aspirations to acquire the property. It may also be the case that the husband and wife inspected the property, at some time prior to their separation, with this in mind. It is also not beyond the bounds of possibility that Ms P Senior also saw some benefits in the property for the business. She, after all, owns a half-share in the business.
In any event, in a formal sense, the husband did not pursue the purchase of the property. Rather, a memorandum of transfer was executed in October 2006, transferring the property from its previous owner to Ms P Senior. The consideration for the transfer was $275,000.00. It is not suggested by the wife that this was an inadequate consideration or was not provided.
At the time of this transaction, Ms P Senior lived at Property S, North P and had done so for many years. In September 2006, she extended her mortgage to $345,000.00. Accordingly, I accept that she borrowed the entirety of the sum required to acquire the Property O property and it was properly registered in her name.
What was the precise motivation behind Ms P Senior’s purchase of the property is unclear to me. She has deposed that she had known its owner for many years and when the owner decided to move into a nursing home, she (the owner) approached Ms Pappas with an offer to sell, which Ms P Senior was inclined to accept. I have no reason to disbelieve this evidence.
What is clear to me is that Ms P Senior used her own financial resources to purchase the property. She has since sold the Property S property because she felt it was too big for her. She has moved to an apartment in [G] and borrowed more money to finance this property. The Property O property remains subject to the pre-existing mortgage, which has not been substantially reduced.
The wife is suspicious of these various transactions because they occurred around the time of the parties’ separation. She asserts that
Ms P Senior’s purchase of Property O property is a front for the husband. I do not accept that this is so. Rather Mrs P Senior pursued the acquisition for her own reasons and benefit.
It may have been the case that, if the parties had remained married,
Ms P Senior may have chosen to formulate her purchase of the Property O property in another way. It may also be the case that she sees the benefit of the property to her son and will ultimately bequeath it to him.
However, Ms P Senior is now in her late fifties. She struck me as being a canny business woman. I accept that she saw an opportunity in the property and took it because she could and it suited her at the time. There is no evidence to indicate that the husband has diverted any income from the business into the transaction concerned.
b) The parties parenting relationship
It is the wife’s case that the parties’ parenting relationship is a poor and dysfunctional one. Particularly because the husband has been disrespectful and insulting of her, in text messages and other written communications, which have passed between the parties. As such, she is doubtful that the husband is capable of encouraging and supporting [B] to have a close and loving relationship with her mother.
The husband concedes that he was deeply shaken by the parties’ separation, which came unexpectedly to him. He concedes that he has been sarcastic in tone, in some of his communications with the wife, particularly in the months following the parties’ separation.
However, it is now his position that his emotions have settled and the wife is overstating her concerns about him, for tactical reasons related to these proceedings.
In particular, the husband asserts that the wife has sought to have coffee with him, on several occasions, since the parties separated, which, in his submission, substantially undercuts any suggestion made by her that she is fearful of the husband or traumatised by his previous behaviour.
The wife is also critical of the husband for allowing [B] to sleep in his bed regularly. It is also her case that the husband regularly abrogates his responsibility to parent and care for [B] to his mother Ms P Senior. For his part, the husband refutes these suggestions and again asserts that they are motivated by the wife’s desire to achieve her preferred outcome in these proceedings.
I do not think there is anything either sinister or unusual in the fact that [B] comes into her father’s bed from time to time. The wife conceded that [B] was sometimes frightened at night and came into her bed. Given [B]’s age, there seems to be nothing unusual in this behaviour and the response of either of her parents to it.
Ms P Senior deposed that her son and [B] visited her home, at [G] from time to time. She said her son rarely went out alone and when he did, [B] “wanted her dad”. The import of Ms P Senior’s evidence was that when [B] came for a “sleep over” at her home, the husband was invariably there as well.
This evidence was in accord with that given by the husband. He deposed that he and [B] visited Ms P Senior about once or twice a month. He confirmed that Ms P Senior would collect [B] from her school, from time to time, if he was working when [B] was due to come into his care. I accept this evidence. In my view, there is no evidence to support the wife’s contention that the husband’s mother plays an inappropriately significant role in [B]’s life.
The wife deposes that [B] frequently returns into her care, after being with her father, in an unhappy and distressed frame of mind.
The implication of this evidence being that the husband has not provided an inappropriate level of care for her.
In this regard, Ms P Senior deposed that [B] was “very clingy with her dad” before she was due to return to the care of her mother. In these circumstances, I think it would be imprudent of me to place too much reliance on what the parties and their respective supporters report of [B]’s emotional state, in the periods immediately prior to her being exchanged between the parties. Dr Coats described these problems as “transitional difficulties”.
As is commonly the case with separated parents, who enjoy neither a particularly warm nor empathetic relationship, the parties choose to communicate with one another by text message. The benefit of this medium is that it is immediate and conducive to the exchange of brief and often abbreviated information. It is not a subtle means of communication.
The husband has kept a record of some of the text messages, which passed between the parties.[21] For the most part, the messages are brief and business like. I do not think that they can be characterised as threatening or abusive. To my mind, they are largely unexceptional.
[21] See exhibit H13
It is the wife’s position that the husband has used the medium of text messages to harass her.[22] It seems to be her position that the text messages, which have been tendered are unrepresentative and have been selected by the husband to serve his ends.
[22] See wife’s affidavit of evidence at paragraph 12.9
She herself, however, does not provide any specific examples of text messages, to which she takes exception. In all the circumstances of this case, I believe I must be cautious in respect of the wife’s allegations regarding feeling victimised and traumatised by allegedly abusive text messages.
I have also been provided with the two communication books, which the parties have used to convey longer pieces of information about [B]. The books have passed between them on handover.[23] The wife relies on some entries written by the husband, which are, to my mind, sarcastic in tone and perhaps patronising towards her.
[23] See exhibit H14
The entries concerned do the husband no credit but, in my view, it is drawing a long bow to say that they are abusive or threatening.
Of itself, the fact that the parties have felt the need to utilise a communication book, is indicative of some level of communication dysfunction between them. It is telling however that, as time has passed, the entries in the book become more infrequent.
The parties’ relationship is not currently a perfect one. From the husband’s point of view, the separation was a traumatic one, to which it took him time to emotionally adjust, a process which is still not fully finalised. In addition, the parties’ property proceedings have been hard fought and protracted. Both parties have invested heavily in their outcome. Necessarily, this must have added to the level of tension between them.
It would be both unrealistic and unduly utopian to expect the parties to have had, immediately following their separation and even now, a perfect and respectful relationship with one another, given these circumstances. It is trite but true nonetheless to observe that marital separation is one of the most traumatic experiences, which can befall a person. Necessarily, the process of separation often requires a considerable amount of emotional adjustment.
No doubt, like many separated parents, the relationship between the parties’ waxes and wanes between its good days and bad days.
I suspect both feel hard done by and wounded by the behaviour of the other and these feelings provide an undercurrent to all their interactions with one another. As a result, they may never be close again. But I do not think these feelings render their relationship an abusive one. Rather, at its worst, it is a stilted and mistrustful one and at its best a businesslike, if somewhat terse one.
However, it seems to me that, notwithstanding these difficulties, the parties have some ability to empathise with one another, particularly so far as their respective feelings for [B] are concerned. In the communication book, the husband wishes the wife a Merry Christmas and offers her a photograph of [B] whom he describes as a “happy little girl”.
The wife concedes that she and [B] provided gifts for the husband at Orthodox Easter time, a particularly significant occasion for the parties, and the wife encouraged and supported [B] anointing the husband’s head, in accordance with the Greek tradition.
In addition, the husband deposed that he provided some money for the wife to buy briefs and singlets for [B], when the wife informed him that [B] needed them. The parties were also able to agree on [B] spending a longer period of time, with her father, in the April 2008 school holidays.
Notwithstanding these areas of apparent cooperation, it is my apprehension that the parties still have a propensity to fall into vehement disagreement. As equally spirited people, both the husband and wife have the common human tendency of wanting to have their own way. One such issue concerned which primary school [B] should attend. The husband had one preference. The wife had another.
The wife asserts that the husband went behind her back and made inquiries at the school of his preference. The husband concedes that this was so but points to the fact that no agreement was concluded with the school concerned.
In any event, to the parties’ great credit, they were able to reach agreement in respect of this issue. The parties agreed that [B] should attend [Z] Primary School, which was the wife’s preference. Accordingly, it seems to me the husband is capable of subjugating his feelings to reach a compromise with the wife.
d) The family report and the evidence of Dr Coats
Dr Coats had a fundamental advantage over me in these proceedings – he was able to see [B] interact directly with each of her parents. From these observations, Dr Coats concluded that [B] enjoys a “close, warm and responsive relationship with each [of her parents]”.[24]
[24] See family report at page 9
In this regard, Dr Coats noted that, since late 2006, [B] had spent
3 nights over alternate weekends and each Wednesday night with her father, as such he had been able to play a highly significant role in [B]’s life to date and it was Dr Coats’ impression that the husband remained clearly motivated to continue his role in this regard. I share Dr Coats’ view of the husband.
Dr Coats was also impressed by the fact that the parties had been able to resolve the issue of [B]’s primary school between them. He believed that it was likely to be in [B]’s best interests if her parents continued to work constructively together. As such, he was in favour of simplifying the current care arrangements for [B] in the form of an immediate transition to a “full shared care arrangement, with perhaps some scope for some time spent with the other parent during each week …”.[25]
[25] Ibid at page 10
Dr Coats did not have a strong view as to whether there were any likely benefits in there being a graduated increase in the husband’s time with [B], as a prelude to the week about arrangement, which he advocated. He could see pros and cons in both an immediate transition and a graduated one. He conceded that [B] was not used to “not seeing mum for a week” but otherwise believed she was a socially advanced child. As such, he believed that once [B] began at school, this would become “an access of continuity” for her. In such circumstances, there were likely to be benefits for [B] of having as settled a weekly routine as possible.
In his report, Dr Coats opined as follows:
“So long as there is reasonable consistency between households with respect to bed time, nutritional approaches, boundaries (for example, in sleep arrangements), and discipline (balanced with indulgence), I believe [B] would enjoy moving comfortably between households so that she can relish her strong relationship with both parents”.[26]
[26] Ibid at page 10
If I have any concerns about Dr Coats’ report, it is that he is being unduly sanguine about the progress the parties have made in forming a workable parenting alliance with one another. Dr Coats acknowledged that one of his motivations in making the recommendations which he had, was to direct the parties from litigation if at all possible. Obviously, he has not been successful in this regard. However, notwithstanding this factor, he remained strongly in favour of a shared parenting regime for [B]. In this regard, given the successful resolution of the schooling issue, he remained confident that the parties would be able to find workable solutions to any difficulties which arose in a mutual parenting regime.
Dr Coats acknowledged that there would be and remained ongoing points of conflict between the parties. However, it was his apprehension that there had been a considerable shift in the atmosphere between the parties. In particular, he could not detect any degree of mutual disrespect between the husband and wife, both of whom he regarded as being “highly motivated to do well by their child.”
Dr Coats acknowledged that there had been conflict between the parties but it was his apprehension that [B] “had been spared the worst of it.” As such, he expressed some optimism that the parties had a facility to keep their hostilities at bay and not expose them to their child.
Dr Coats was asked his opinion of some of the communications, which had passed between the parties, particularly in the months after their separation. In Dr Coats’ opinion, it was inevitable that there would be a certain level of “prickliness” in the parties’ communications with one another, particularly as from the husband’s point of view, he had not anticipated the parties’ separation and was adjusting to it.
Dr Coats also acknowledged that there was a considerable undercurrent of hostility in the parties’ attitude to one another as described in the court documents. However, he observed that it was often his experience to find parents very different in their presentation to him “face to face” as to how they presented in litigation. In reaching his opinion about the viability of a shared parenting regime, Dr Coats relied on his personal observations of the parties’ interacting with one another and with [B]. This led him to the view that “these people can implement a shared parenting regime.”
In this regard, Dr Coats noted that the parties needn’t “be the best of buddies”. Rather the parties needed not to be disrespectful of one another and needed mechanisms to exchange necessary information between them. In this regard, both communication books and SMS text messages provided significant advantages. In regards to the more recent entries in the communication book, Dr Coats was of the view that they were “modulated and responsive.”
Dr Coats could see significant disadvantages to a maintenance of the current arrangement. He thought the clinging ness described by the mother was likely to be intensified by frequent changes in arrangements for [B]’s care. He described the clinging ness as being due to “transitional difficulties”. Overall, it seems to be the case that Dr Coats could see significant advantages, for [B] of her periods with each of her parents being consolidated, particularly now that she had begun at school and both her parents had work commitments.
Determining [B]’s best interests – Section 60CC
a) The primary considerations
The applicable legislation places two considerations in a position of pre-eminence – the need to protect the child concerned from harm, as a result of exposure to abuse and family violence; and the benefits of the child having a meaningful relationship with both of his or her parents.
There are no concerns, raised by either of the parties, concerning issues of neglect or abuse. [B] is a much loved child, who is currently thriving. If anything, as Dr Coats put it, is that [B] may at times be over indulged.
The wife characterises the parties’ relationship as being one marked by family violence, particularly what she asserts is the husband’s disrespectful tone towards her. No doubt, in the past, Mr Pappas has said angry things to Ms Pappas. He has also been sarcastic in some of his communications towards her. However, there is no evidence to suggest that [B] herself has been seriously affected by this aspect of her parents’ relationship with one another.
To the contrary, it seems to be the case that [B] has been spared the worst of the conflict between her parents. I accept Dr Coats’ evidence in this regard. It is also my view that the parties’ relationship has not been as turbulent and difficult, as the wife would have me believe.
Accordingly, in these circumstances, considerations of [B] pursuing a meaningful relationship with both her parents must be given pre-eminent consideration in this case. It is the husband’s position that [B] will have the most meaningful relationship possible, with both her parents, if she spends strictly equal periods of time with each of them. Such an arrangement will ensure that [B] will feel that both her parents are equally involved in every aspect of her life.
The parties’ ability to communicate and exchange information about [B] is not perfect. In my view, it would be unrealistic to expect it to be so. Nonetheless, the parties are able to exchange such information as is necessary to ensure that there is a continuity in arrangements for [B]’s care. The parties’ share a common background. I do not think that there is likely to be a high level of discontinuity in their regimes for [B]’s care in their respective households.
It is the wife’s position that [B] is exhibiting some signs of stress as a result of the currently existing arrangements. There is however no other evidence to suggest that she is anything other than a thriving child, who enjoys the time she spends with each of her parents. I agree with
Dr Coats’ assessment that these transitional difficulties will diminish if there is an equal time arrangement.
The parties’ households are close together in suburban Adelaide.
The parties have been able to agree on which school [B] should attend. Their communications with one another, previously problematic at times are now reasonably respectful and businesslike. In all these circumstances, I do not think issues of reasonable practicality rule out the shared care arrangement to which Mr Pappas aspires.
An order which provides for shared parental responsibility requires that parties to it to consult with one another and make a genuine effort to come to a joint decision about major long-term issues to do with the child or children concerned [Family Law Act section 65DAC].
Major long-term issues is defined in section 4 of the Act and includes issues to do with a child’s education; religious and cultural upbringing; the child’s health; the child’s name; and changes to the child’s living arrangements that would make it significantly more difficult for the child concerned to spend time with a parent.
In this case, now that the issue of [B]’s primary education has been resolved, it seems unlikely that there will be other major long-term issues of controversy arising between the parties. This is particularly so given the common cultural and religious orientation of the parties.
For all these reasons, I propose to make the orders, in respect of [B]’s care, which the husband seeks, with the slight modification as advocated by Dr Coats. The orders are as set out at the commencement of these reasons for judgment.
Property Issues
Step One – the pool of assets available for division
On the basis of the findings I have made in respect of the evidence led in this case, I find that the parties have the following assets and liabilities to be divided between them:
Assets
$
Proceeds of sale of Property W
160,897.84
Funds retained by husband
14,226.00
Funds retained by wife[30]
14,236.00
Wife’s share of capital gains tax
5,000.00
Husband’s half interest in Property M, P[31]
230,000.00
Husband’s half share in [X]
6,737.00[32]
Furniture and household effects (wife)
3,175.00
Furniture and household effects (husband)
1,850.00
Husband’s interest in Greek properties
130,000.00
Husband’s motor vehicle
1,700.00[33]
Total
567,821.84
Superannuation
MLC (husband)
16,721.00
AMP (wife)
2,824.00
Total superannuation
19,545.00
Total
587,366.84
Liabilities
Husband’s credit card debt at separation
3,782.00
Husband’s liability for capital gains tax on sale of Property W
5,684.77[34]
Total
9,466.77
Net assets
577,900.07
[30] this sum was used by her to purchase a motor vehicle
[31] the parties agree that the total value of the property is $436,000.00 according to a jointly commissioned valuation
[32] see exhibit W4, the valuation of Mr McPharlin dated 16 October 2007
[33] see husband’s statement of financial circumstances filed 23 May 2008
[34] see exhibit H7
For the reasons provided, I have excluded the remaining half share of Property M, P and Property O, P from the parties’ pool of assets.
I am satisfied that both these items are legally and beneficially owned by Ms P Senior as is one half interest in the [omitted] business.
The husband may have an expectation that he will receive these items of property on his mother’s death. However, given her age and the fact that she remains active in the [omitted] business, it would be inappropriate to include these items of property in the parties’ pool of assets.
The wife retained a sum of around $5,000.00 to pay her half liability in respect of the capital gain generated by the sale of the Property W property. This sum has been notionally added back into the parties’ pool of assets on the basis that it represents a premature distribution in the wife’s favour.
The husband has not as yet paid his capital gains liability. I have included this as a joint liability, taking into account the “add back” of the wife’s capital gains tax. This will ensure that the liability is jointly shared by the parties.
I have placed the parties’ superannuation in a separate pool to their other assets, in accordance with the principles laid down by the Full Court of the Family Court in C.[35] Neither party has accumulated a significant sum of superannuation up to this stage and neither seeks that any splitting order should be made.
[35] C & C (2005) FLC 93-220
Step Two - assessment of contributions
On the basis of the evidence and the findings I have made in respect of it, the parties assets, (as set out above) fall into three main categories: items inherited by the husband (the Greek properties); items gifted to the husband by his mother (the Property M, property); and items acquired by the parties themselves during the course of their relationship and subsequent marriage (the proceeds of sale of the Property W property and other items of their personalty).
Given this differentiation, it seems to me self apparent that the parties’ respective contributions towards the acquisition and preservation of these various assets is essentially different. In addition, the marriage between the parties cannot be regarded as a long one. Accordingly, it seems to me that considerations of justice and equity should dictate that the parties’ respective contributions should be assessed on an item by item basis.
The husband acquired his interest in the Greek properties on the death of his father in 1984. It has been a long campaign for him to secure his proper entitlements in the property. However, given the location of the properties and his co-ownership of them with other relatives, it seems unlikely that the husband will ever benefit, in a financial sense, from his ownership of these properties.
In my view, the wife’s contribution towards the acquisition of these properties must be regarded as largely peripheral. The parties went to Greece for a holiday. Incidental to that holiday were some efforts to secure the transfer of the Greek properties to the husband. No doubt, the wife’s Greek language fluency was useful in this regard but the legal process of the husband acquiring the properties had been put in train before hand.
In these circumstances, I assess the husband’s contributions towards the acquisition of the Greek properties as being very close to 100%.
In any event, given that the assets in question cannot be sold and produce no income, it is highly artificial for them to be included in the parties’ pool of assets in the first place.
I am satisfied that Ms P Senior gave the half interest in the Property M property, to the husband, because she wished to benefit him personally because of her ties of blood and affection for him. She also wanted him to have a secure base from which to pursue his future employment as a picture framer.
She and her late husband had worked very hard, over many years, to acquire the property in the first place. No doubt these years of endeavour were directed to the ultimate benefit of members of their family, particularly their children. The retirement of Mr N from the [omitted] business and the desire of the husband to pursue other employment interests provided an opportune time for Ms P Senior to make her generous gift to the husband.
The gift concerned was expressed as being made directly to the husband. This must follow from the fact that the husband alone was registered on the title concerned. I have no reason to think anything other than that Ms P Senior intended to benefit her son alone by the gift which she made directly to him.
As such, I am satisfied that, in the context of these proceedings, the contributions that led to the acquisition of the half-share in Property M should be taken to have been made largely on behalf of the husband alone.[36]
[36] See Gosper & Gosper (1987) FLC 91-818 and Kessey & Kessey (1994) FLC 92-495
In all the circumstances of this case, I am satisfied that the motivation leading to the gift made by Ms P Senior was the parent/child relationship, which she shared with the husband. I acknowledge that at the time of the gift the husband was married to the wife. However,
Ms P Senior did not express the gift as being to the wife. I do not think that this was an oversight on her part.
In her affidavit, Ms P Senior deposes as follows:
“I decided to give half of the building at [Property M] to [Mr Pappas] mainly because [Mr Pappas] had always wanted something that had been his father’s and his father and I owned the building together.”[37]
I accept Ms P Senior’s evidence in this regard. As such, this considerable gift must be regarded as a contribution made, at its instigation, by the husband but not of the wife.[38]
[37] See Ms P Senior’s affidavit at paragraph 9
[38] See Peligrino v Peligrino (1997) FLC 92-789 at 84,726-8
The gift was received in 2002, in the early period of the marriage.
No doubt some outgoings had to be paid subsequently paid in respect of it. These would have been made from the receipts of the [omitted] business, which must be regarded as matrimonial income. The wife’s responsibilities for [B] precluded her from returning to the paid workforce.
As such, in the overall context of the marriage, the wife must be regarded as having made some contributions to the property concerned. However, the husband’s contribution of the asset is so disproportionate to the wife’s other contributions that it must be accorded “special recognition”[39].
[39] See Pierce & Pierce (1999) FLC 92-844 at 85,811
Given these findings, it seems to me to be appropriate that the parties’ contributions towards the acquisition of the Property M property should be considered in isolation to their other assets. Undoubtedly, in such circumstances, the husband’s contributions towards the acquisition of this particular asset must be considered in all practical senses, as being very close to total.
I have elected not to notionally “add back” into the parties’ pool of assets any sum related to one half of any rent received from the Property M property. I accept the husband and his mother’s evidence that this rent was utilised by Ms P Senior in recognition of the generosity of her gift of the half-share in the property in the first place and to provide her with some measure of financial security in future. As such, I do not think that these notional sums can be regarded either as amounting to a waste of the asset on the husband’s part or a premature distribution of assets in his favour.[40]
[40] See AJO v GRO (2005) 33 FamLR 134 at 144-145
The relationship and subsequent marriage between the parties was one of around eight years. It produced one child. I am satisfied that the husband was the family’s major financial breadwinner during the marriage and provided his income and other financial resources to the wife and [B]. I can find no evidence to support any suggestion that he has secreted funds or assets away from the wife.
It also appears to me to be the case that the wife was the major homemaker and parent during the parties’ marriage. I accept that she is a dedicated and capable parent. Necessarily, her responsibilities for [B] precluded her from being in the paid workforce for several years.
I accept that she performed some duties in the [omitted] business but not over any extended periods of time and certainly not on such an extensive basis as she would now have the court accept.
Putting aside the Greek properties and the half interest in the
Property M premises, the parties’ most substantial asset, in dollar terms, is the proceeds of sale of the Property W investment property. This property is a direct successor to the parties’ first family home at Property C, P. I am satisfied that both parties made significant financial contributions towards the acquisition of the Property C property and so to its successor at Property W.
For his part, the husband and his mother put in a direct sum somewhere between $30,000.00 and $40,000.00. The wife contributed significantly less initially but later contributed a significant sum by reason of her work health settlement. Clearly, the purchase of both properties are to be regarded as joint enterprises, to which both parties contributed as fully as possible.
In all these circumstances, I would assess the parties various contributions towards the proceeds of sale of the W property and the other of their remaining assets as being broadly equivalent. It seems clear to me that the parties’ marriage was a partnership, to which both contributed equally, albeit at times in different ways.
At present, the parties have grossly disparate amounts of superannuation, although neither could be described as being well prepared financially for retirement. No doubt, this situation is as a result of the different periods of time the parties have been in the workforce, particularly that the wife has been engaged in home duties.
In all the circumstances of this case, I do not think it appropriate to differentiate between the contributions the parties have made to their superannuation in a total sense. In particular, it is not contended by the husband that he brought into the marriage a significant amount of superannuation.
In carrying out the section 79 exercise, the court is often called upon to compare fundamentally different things. It must carry out this comparison in respect of the entirety of the marriage concerned.
As such, the court must be careful to avoid a tendency to undervalue non-financial contributions, made by homemakers and parents.[41]
[41] See Ferraro & Ferraro (1992) 16Fam LR 1 at 38
The major difficulty in this case is that, as a result of the findings I have made, the husband has been found to have made the overwhelming contributions in respect of two items of property of significant value – the Greek land and the Property M property. I am aware that I must be careful not to be “dazzled” by the magnitude of these financial contributions.[42] In particular, if this results in an undervaluing of the wife’s non-financial contributions.
[42] The metaphor used by Kay J in Aleksovski v Aleksovksi (1996) FLC 92-705 at 83,443
The husband borrowed $20,000.00 to acquire his interest in the [omitted] business. This loan was largely paid off during the course of the parties’ marriage. In these circumstances, in my view, the wife has made some contributions towards the acquisition of the [omitted] business. In the context of how the parties divided their family responsibilities, I would assess that contribution as being equal to that of the husband.
As a result of these matters, I assess the parties’ various contributions to the acquisition of their marital assets as follows:
Item
Husband’s contribution
Wife’s contribution
Proceeds of sale of Property W
50%
50%
Funds retained by the parties
50%
50%
[X] business
50%
50%
Furniture & household effects
50%
50%
Superannuation
50%
50%
Greek properties
97.5%
2.5%
Property M, P
90%
10%
Step 3 – Section 75(2) factors – the prospective needs of the parties
Sub-section (a) – The husband is thirty-three years of age. The wife is thirty-one years of age. Both enjoy good health. Accordingly, I would expect both of them to have very many years of productive life before them. Accordingly, the matters which fall for consideration under this criterion are not significant in this case.
Sub-section (b) – The husband has a substantial interest in the [omitted] business, which employs him and the premises on which the business operates. According to his statement of financial circumstances, the business provides him with an income of $520.00 per week.
The wife is employed as a secretary at a bakery company at an income of $600.00 per week. It is her position that she has no specific skills to speak of, having completed her education in Greece and come to this country as a teenager. I accept that the wife is likely to be a modest income earner for the foreseeable future.
I do not believe that the husband can be described as deriving a large income from the [omitted] business. However, he is clearly happy to remain self-employed and no doubt there are some benefits which derive to him from such self-employment.
In addition, the husband owns a half-share in his business premises.
It seems likely that, at some stage in the future, his mother will transfer her remaining interest in the business to him, along with, quite possibly, her remaining half interest in the Property M property.
At any event, it seems likely that Ms P Senior will play less and less of a role in the business and more and more responsibility for it, along with a greater share of the profits, will devolve onto the husband. Accordingly, it seems to me that the husband’s financial security is more assured than the wife’s is. As such, the matters which fall for consideration under this heading favour the wife.
Sub-section (c) – As a result of the orders made in this case, [B] will live with each of her parents for equal periods of time. Accordingly, both will have to accommodate the demands of parenting with those of earning an income, to an approximately equal degree. As such, I do not think that the matters which fall for consideration under this heading favour one party more than the other.
Sub-section (d) & (e) – Apart from [B], neither party has any responsibility to support any person apart from him or herself. Neither seems to lead an unusual lifestyle. Accordingly, the matters which fall for consideration under these criteria are not relevant in this case.
Sub-section (f) – Neither party is currently well placed for retirement. However, given their ages, neither the husband nor the wife has any pressing need in this regard. As such, neither has sought a specific splitting order.
For reasons already provided, I propose including the parties’ respective superannuation entitlements in their pool of assets, which will be taken into account in an equal division of their other assets. Otherwise, I do not think that these matters are highly determinative in this case.
Sub-section (g) – One of the sad consequences of the end of the marriage between the parties is an inevitable reduction in the standard of living for them both. It is trite, but true nonetheless, that two households cannot live as cheaply as one. What is important, in respect of this subsection, is that any drop in standard of living should not be borne disproportionately by one party.
The husband is currently living in premises rented from his mother. He is paying $250.00 rent per week. I have no reason to think that this is not a proper market rent or is not collected by Ms P Senior.
The wife pays a similar amount of rent. In the longer term, she aspires to having sufficient financial resources to enable the purchase of a home for her and [B]. No doubt, the husband harbours similar aspirations.
Overall, it seems to me that the parties enjoy a broadly similar standard of living. As such, I do not think that the matters which fall for consideration under this heading favour one party more than the other.
Sub-section (h), (ha), (j), (k) (l) & (m) – I do not think that any of these subsections have any particular application in the present case.
Subsection (n) – The husband will retain his interest in the Greek land and his half share in the Property M property. Accordingly, his asset backing is markedly superior to the wife. As such, it is likely to be easier for him to borrow moneys in future, particularly against the Property M property. I accept that the Greek land is of little immediate benefit to him.
Accordingly at the end of the parties’ marriage, the husband is in a superior overall financial position to the wife. He also has significant financial support from his mother and can anticipate such support continuing in future. In my view, these factors favour the wife.
Sub-section (na) – The weight to be attached to a child support assessment will vary in the circumstances of each particular case concerned. The court is directed to look at the amount of the assessment, the financial circumstances of each of the parties, the needs of the children concerned and whether child support is likely to be paid regularly and at an adequate rate in future.[43]
[43] See Clauson & Clauson (supra) at 81,911
The husband is currently paying a modest amount of child support in respect of [B].[44] No doubt this reflects the extent of time [B] has been in his care and his modest income. As a result of the orders made in this case, [B] will now spend more time than previously in the husband’s care. This will have implications for the child support assessment.
[44] See exhibit H1
In accordance with the reasons already provided in this case, I do not think that it can be found that the husband is concealing his income or artificially manipulating his resources to the detriment of the wife. Accordingly, I have no reason to think that any child support assessment made in future will not reflect either his or the wife’s financial position. Accordingly, I do not think that the matters fall for consideration under this heading are central to the case.
Sub-section (o) & (p) – Neither of these sections is relevant in the present case.
Conclusions – section 75(2)
I am satisfied that, upon an overall assessment of the various section 75(2) factors, a further adjustment in favour of the wife is appropriate. The greater difficulty is assessing what that further distribution should be, in percentage terms and the particular pieces of property to which it should apply, given that an asset by asset approach has been taken to the assessment of spousal contributions.
This problem is compounded by the reasonably small extent of the property pool and the fact that it is unlikely to be sufficient to satisfy the needs of both parties, particularly in terms of the wife’s aspiration to purchase a home for herself.
As a result of the orders made in this case, the parties are embarking on a shared care arrangement for their five year old daughter. Inevitably, this arrangement must have significant implications regarding how both parties manage their future lives, particularly in terms of their employment, for a lengthy period of time. As a result of the arrangement for [B], both parties will suffer inevitable restrictions upon working hours and loss of career opportunities, which the obligation to care for a child entails.
The husband is self employed. He shares his self employment, with his mother, to whom he is close. He has the security of owning half his business premises, and given that his mother owns the remaining half of the property, he is both secure in his occupation of the premises and has the prospect of receiving the remainder of the property at some stage in the future.
As a result of these factors, in comparison to the wife, the husband is relatively financially secure. In addition, his employment situation is flexible and, as such, will be able to accommodate [B]’s changing needs from time to time. He also has the support of his mother in this regard.
The wife is a modestly paid and largely unskilled employee of a small business. Her prospects of career advancement are slight. She does not have the same level of asset backing, as the husband does, deriving from the generous gifts he has received from his mother.
As a result of these factors, the wife’s financial future is far rockier than the husbands is likely to be. The juggling of family and work responsibilities is likely to be more onerous for her than for the husband. In addition it is likely to be much harder for the wife to secure a foothold in the housing market than the husband, who has a far greater asset backing.
In my view, these are the primary factors, which call for a greater allocation of property to the wife than would currently fall to her, following the court’s assessment of contribution factors alone. It is all very well to talk in terms of percentages, so far as orders are concerned, but at the end of the day, what matters to the parties is what the applicable orders mean, in dollar and cent terms and what affect they have on their respective long term aspirations. At the end of the day, as she said to Dr Coats, what the wife wants is a house to live in with [B].
For these reasons, the Full Court has commented that the centre of gravity, in the determination of property cases, has shifted towards the assessment of section 75(2) factors and, as such, courts such as this one, have been directed to give the provisions concerned “real rather than token weight”.[45]
[45] See Waters & Jurek (1995) FLC 92-635 at 82,376
The pool of assets, in this case, is small and so may not be able to achieve the wife’s ultimate ambitions at this stage. I must also be careful not to overlook the fact that, although he has some employment advantages over the wife, the husband too is a modest income earner and also has considerable family responsibilities, so far as [B] is concerned. At this stage, I would assess that the wife is entitled to a further 5% of the parties’ major pool of assets; a further 5% in respect of the value of the Property M property but I would exclude the Greek property from this exercise.
Conclusions – s.79(2) – is this a just and equitable outcome?
The final step in determining property proceedings is to stand back and consider whether the proposed result represents a just and equitable outcome. Considerations of justice and equity must inform each step of the court’s process and the overall result.
As a result of the first step of the process involved in dividing marital property, I have calculated the parties’ total net assets to be worth $577,900.07. For the reasons already provided, I have decided to take different approaches to how that sum is to be divided depending upon the category of asset to which the sum represents.
As a result of the decisions I have made, the wife is entitled to 55% of the parties’ net assets, other than the Property M property and the land in Greece.
55% of this sum is represented by the sum of $119,845.04. In addition, I have determined that the wife is entitled to 15% of the value of the Property M property. This is represented by the sum of $34,500. Finally, I have determined that the wife is entitled to 2.5% of the value of the properties in Greece. This is represented by the sum of $3,250.
Accordingly, on my calculations, the wife is entitled to the sum of $157,595.04. The wife has, either notionally or in her actual possession, assets to the value of $25,235.00. These include her household effects ($3,175.00); the funds retained by her ($14,236.00); and the moneys which she used, from joint funds, to pay her liability for land tax ($5,000.00). Accordingly, to retain property to the value of $157,595.04, the wife requires to receive a further sum of $132,360.04.
I propose achieving this sum by making a splitting order of $6,000.00 from the husband’s superannuation and a payment to her from the proceeds of sale of the Property W property. Such an outcome will achieve an approximate equalisation of the parties’ superannuation entitlements. It will also marginally reduce the amount of cash, which will have to be paid to the wife.
At this point of their working lives, for obvious reasons, both parties have a need for cash sums rather than for future superannuation entitlements. I appreciate that neither party has sought such a splitting order but I believe that such an outcome is a just and equitable one.
Accordingly, it will be necessary for the wife to receive a further sum of $126,360.04. Obviously, this can come only from the proceeds of sale of the Property W property. It will leave the husband with a sum of $34,537.80.
Overall, this outcome results in the wife receiving just over 27% of the total net asset pool. In my view, to express the outcome this way is somewhat misleading, as it includes the nominal value of the Greek properties, which as I have found cannot be sold by the husband and produce no income for him.
If the asset pool is calculated excluding the Greek properties, it results in the wife receiving a little over 35% of the property pool. Given the husband’s superior contributions, in the form of the half interest in the Property M property, I think this represents a just and equitable outcome.
In particular, it leaves the wife with a significant capital sum, which may be sufficient to enable her to purchase a property for herself and [B]. As I have previously indicated, this is her major priority.
The husband will not be so liquid, as the wife. However, he will have the capital resource of his interest in the Property M property, together with a modest sum to protect him from any unforseen exigencies. Given that he is renting from his mother presently, he has some level of security, so far as his accommodation is concerned.
These calculations are posited on the basis that the husband’s capital gains tax and the parties’ outstanding credit card debt at separation will be also paid from the proceeds of sale of the Property W property. Accordingly, in effect, both parties leave the proceedings debt free.
In determining the overall justice and equity of this outcome, I have considered the parties’ respective preparedness for retirement, as represented by their respective superannuation entitlements.
In addition, I have considered that both have a need for some form of financial buffer for the ordinary exigencies of independent living.
I have also considered the parties’ respective need for appropriate accommodation and their respective likely ability to borrow.[46] Overall, I am satisfied that it represents a just and equitable outcome.
[46] See Levick & Levick (Family Court of Australia) delivered 31 January 2001 (Moore J)
For all these reasons, the orders of the court will be as set out at the commencement of these reasons for judgment.
I certify that the preceding three hundred and five (305) paragraphs are a true copy of the reasons for judgment of Brown FM
Associate: P Smith
Date: 1 August 2008
and Clauson v Clauson (1995) FLC 92-595
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