Pelly and Nolan
[2011] FMCAfam 530
•25 July 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| PELLY & NOLAN | [2011] FMCAfam 530 |
| FAMILY LAW – Children – equal shared parental responsibility – property – loan made by the parent of one of the parties. |
| Family Law Act 1975, ss.60CA, 60CC, 61DA, 65DAA, 75(2) & 79 |
| Af Petersens & Af Petersens (1981) FLC 91-095 Biltoft and Biltoft (1985) FLC 92-614 NHC & RCH (2004) FLC 93-204 Collu v Rinaldo [2010] FamCAFC 53 Hickey & Hickey and A-G for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 Kowaliw v Kowaliw (1981) FLC 91-092 AJO & GRO (2005) FLC 93-218 Prince and Prince (1984) FLC 91-501 |
| Applicant: | MR PELLY |
| Respondent: | MS NOLAN |
| File Number: | BRC 11106 of 2009 |
| Judgment of: | Howard FM |
| Hearing dates: | 28 February & 1 March 2011 |
| Date of Last Submission: | 1 March 2011 |
| Delivered at: | Brisbane |
| Delivered on: | 25 July 2011 |
REPRESENTATION
| Counsel for the Applicant: | Mr Jordan |
| Solicitors for the Applicant: | Jones McCarthy Lawyers |
| Solicitors for the Respondent: | Charles Cooper Lawyers |
ORDERS
That the parties within 21 days of the date of this Order submit to the Court draft orders to reflect the Reasons for Judgment.
IT IS NOTED that publication of this judgment under the pseudonym Pelly & Nolan is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 11106 of 2009
| MR PELLY |
Applicant
And
| MS NOLAN |
Respondent
REASONS FOR JUDGMENT
Background
The applicant is MR PELLY. He was born in Sydney [in] 1964.
The respondent is MS NOLAN. She was born in Newcastle [in] 1972.
The parties began their relationship early in 2002. They commenced living together in [suburb omitted], Sydney. In April 2002, the parties moved from Sydney to the Gold Coast.
The parties have three (3) children, namely - [X] born [in] 2003, [Y] born [in] 2004 and [Z] born [in] 2005.
The parties cannot agree on appropriate orders for the parenting of their children. Furthermore, the parties cannot agree on how to divide their property.
The parties separated on a final basis on 15 May 2009. The parties therefore had lived in a de facto relationship between early 2002 and 15 May 2009.
The father/husband in this case relied upon the following affidavit material at the final hearing:-
a)Affidavit of Mr Pelly filed 31 January 2011;
b)Affidavit of Ms S filed 18 February 2011; and
c)Affidavit of Mr P (Paternal Grandfather) filed 24 February 2011.
The mother/wife in this case relied upon the following affidavit material at the final hearing:-
a)Affidavit of Ms Nolan filed 28 January 2011.
Parenting
At the time of separation in May 2009, the mother had intended to relocate with the children to Newcastle as she had greater family support in Newcastle. I note the mother’s evidence in her affidavit filed 28 January 2011 at paragraph 31 where she stated:-
“31. The Applicant agreed for the children and I to relocate to Newcastle and between the time of separation and mid June 2009 I made plans for the children to attend school in the Newcastle/[omitted] area and for accommodation in that area. The children were to attend either [schools omitted].”
I accept this evidence from the mother.
By mid June 2009, however, the father had instructed lawyers and had decided that he did not want the children to relocate with the mother to Newcastle.
The mother eventually completed a “Parenting Orders Program”. The mother reflected upon her decision to relocate the children to Newcastle. The mother eventually decide that it would be better for the children in terms of their relationship with the father – if the children remained living with her on the Gold Coast.
From approximately July 2009, the parents had made an arrangement whereby the children would live primarily with the mother but spend the following time with the father:-
a)each Thursday from the conclusion of school until 5.30 pm; and
b)each alternate weekend from the conclusion of school on Friday until 4.00 pm on Sunday.
This arrangement between the parties was formalised by way of a Court Order on 8 March 2010.
I also note paragraph 37 and 38 of the mother’s affidavit filed 28 January 2011 where she states:-
“37. The Applicant has also had an opportunity to spend half of each school holiday with the children but has, until Easter 2010, not taken the opportunity to spend this time with the children which allowed me to take the children to the [omitted] area in NSW to visit my family.
38. I have offered the Applicant additional time with the children on special occasions such as for his birthday or for the children’s birthdays, but this additional time offered has been rejected by the Applicant.”
I accept this evidence of the mother.
The father seeks an order that would enable the children to spend six (6) nights per fortnight with him along with half of the school holidays.
The mother seeks an order whereby the children would spend two (2) nights each week with the father from Thursday afternoon until 9.00 am Saturday morning.
Best interests of the children
Section 60CA of the Family Law Act 1975 (hereinafter “the Act”) states:-
“60CA Child's best interests paramount consideration in making a parenting order
In deciding whether to make a particular parenting order in relation to a child, a court must regard the best interests of the child as the paramount consideration.”
In determining what is in a child’s best interest, the Court must take into account the various matters set out in s.60CC of the Act.
Section 60CC(2) states:-
“60CC(2) The primary considerations are:
(a) the benefit to the child of having a meaningful relationship with both of the child's parents; and
(b) the need to protect the child from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence.”
In this particular case, Mr F was commissioned to prepare a family report. In fact, Mr F has prepared two (2) reports, the first was dated 7 May 2010 and was released to the parties on 14 May 2010. The second one was dated 7 February 2010 – it is apparent that it should have been dated 7 February 2011. It is titled the “Updated Family Report”. It was released to the parties by the Court on 15 February 2011.
It is apparent to the Court from the evidence of Mr F and from the evidence generally that there will be benefits to these children in having a meaningful relationship with both the mother and the father.
There is no evidence in this particular case that would require the Court to consider specifically the provisions of s.60CC(2)(b).
In s.60CC(3) sets out the so called, “Additional Considerations”.
Section 60CC(3)(a) – Any views expressed by the child and any factors (such as the child’s maturity or level of understanding) that the Court thinks are relevant to weight it should give to the child’s views.
In the first family report, the children expressed some views. [X] told the report writer that he liked his school and told the report writer about making friends there. The children attend [S] School at the Gold Coast. Furthermore, [X] spoke with affection about his mother and father and made it clear to the report writer that the only thing he would change about his parents is the way that they treat each other. At that stage, the mother was still intending to relocate with the children to Newcastle. The child did not offer a preference in that regard but suggested that he would like to make sure that he could spend time with both of his parents. He did reiterate that he would miss his school if he were to move to Newcastle.
[Y] also spoke affectionately about both his mother and his father.
Mr F notes in paragraph 45 of his first report, inter alia:-
“45. … and he told me that he would like to see more of his father than he presently does.”
[Z] was reluctant to speak to the report writer at the first interview and was not pressed.
In the second report, the report writer noted the following in relation to the children’s views:-
“41.I asked [Z] if she remembered talking to me last time and told her I wanted to chat about her family. [Z] nodded and said ‘I just want Dad and Mum to live together. But they don’t want to live together. I want to see Dad more’.
…
44.I asked what it might be like for her if she could see more of her father and she replied, ‘Then I won’t get to see Mum more if I see Dad more’.”
In the updated family report Mr F said in relation to [X]:-
“47. He spoke positively about Ms S moving into his father’s home. He said that by having Ms S there his father now, ‘Doesn’t have to yell that much.’ He spoke positively about his mother and father. He said he would change about his father, ‘That he stopped fighting with Mum.’ He would change about his mother, ‘That maybe she could talk to Dad a bit longer’.
48. I told him about the idea of seeing more of his father and he too raised the dilemma, ‘Well if we visit Dad a bit longer, well we don’t see Mum and if we see Mum more we don’t see Dad longer.’
49. I asked about him having three wishes for his family. He replied ‘Mum doesn’t fight Dad. Dad doesn’t fight Mum and they start being friends’.”
[Y] was also interviewed by the report writer and Mr F has noted at paragraph 52 of the updated report:-
“52. I talked to [Y] about the idea of spending more time with his father. He started talking about having four nights with his father and then four nights with his mother. I asked what it might be like for him if there were more sleepovers at Dad’s home and he said, ‘Well Mum says we’d miss her more.’ I asked what he thought it would be like for him and he said, ‘It would be fair.’ I asked what he might wish for his family and he said, ‘Be with Dad more often and see Dad more often.’”
[X] will turn eight (8) years of age in 2011. [Y] will turn seven (7) years of age in 2011 and [Z] will turn six (6) years of age in 2011.
The children are, of course, very young.
Not a great deal of weight can be placed on their views.
It is apparent that the children talk affectionately about both the mother and the father. In the most recent report, both [Z] and [Y] did express the view that they would like to see the father more often.
Having regard to the young age of the children - only limited weight can be given to the views expressed.
Section 60CC(3)(b) – The nature of the relationship of the child with:-
each of the child’s parents; and
other persons (including any grandparent or other relative of the child).
The nature of the relationship of the children in this case with each parent has to be described as close and affectionate. That is apparent from the Family Reports. The children clearly have a loving relationship with both parents.
There is no particular evidence concerning the relationship of the children with other persons – apart from that they appear to have developed a fondness for Ms S – the father’s new partner.
Section 60CC(3)(c) – The willingness and ability of each of the child’s parents to facilitate and encourage a close and continuing relationship between the child and the other parent
The father in this case recognises that the mother has been the primary carer for the children throughout their lives to date. The father is willing and able to facilitate and encourage the already existing, close and continuing relationship between the children and the mother.
The father, through his Counsel, Mr Jordan, has expressed concern that the mother is not willing to facilitate and encourage the father’s relationship with the children.
I note, however, that the mother had initially intended relocating with the children to Newcastle following separation. Mr F, the report writer, had recommended that the mother and the children be allowed to relocate. After completing the “Parenting Orders Program”, the mother changed her mind and decided to remain living on the Gold Coast. Furthermore, the final orders sought by the mother would see the children spending two (2) nights every week with the father. To my mind, this does indicate that the mother is willing and able to facilitate and encourage the relationship between the children and the father.
Under cross-examination it was apparent that the mother was somewhat doubtful that the father was going to actually “step up to the plate” and participate fully in parenting the children. The mother’s views in that regard have come about because, she says, that the father did not provide any significant assistance in the parenting of the children while the couple where together and since separation the mother says that the father has (essentially) let the children down by making promises – but not keeping those promises. The mother cited the example of the father apparently promising the boys that he would attend at a parent/teacher interview and then the father failed to show up. The mother says that the boys were disappointed.
I accept the mother’s evidence in relation to these issues.
I also find that the mother is, notwithstanding the doubts or uncertainties that she has concerning the father’s future parenting ability – I consider the mother is both willing and able to facilitate a close and continuing relationship between the children and the father. The most tangible evidence of this fact is that the mother withdrew her application to relocate with the children to Newcastle in recognition of the fact that there would be a greater benefit for the children if they remained living in close proximity to the father.
Section 60CC(3)(d) – The likely effect of any changes in the child’s circumstances, including the likely effect on the child of any separation from:
either of his or her parents; or
any other child, or other person (including any grandparent or other relative of the child), with whom or she has been living.
The proposed orders in this case will not have any particular effect on the children in the terms contemplated by this subsection.
Section 60CC(3)(e) – The practical difficulty and expense of a child spending time with and communicating with a parent and whether that difficulty or expense will substantially affect the child’s right to maintain personal relations and direct contact with both parents on a regular basis
Given that both parents will remain living in the Gold Coast area, there are not likely to be any practical difficulties or any particular expenses impacting on the children spending time with the parents.
Section 60CC(3)(f) – The capacity of:-
each of the child’s parents; and
any other person (including any grandparent or other relative of the child)
to provide for the needs of the child, including emotional and intellectual needs.
I am satisfied that each of the parents in this case does have the capacity to provide for the needs of the children including their emotional and intellectual needs.
Section 60CC(3)(g) – The maturity, sex, lifestyle and background (including lifestyle, culture and traditions) of the child and of either of the child’s parents and any other characteristics of the child that the Court thinks are relevant.
There are no particular matters in this case that require the Court to make findings as contemplated by this subsection.
Section 60CC(3)(h) – If the child is an Aboriginal child or a Torres Strait Islander child:
the child’s right to enjoy his or her Aboriginal or Torres Strait Islander culture (including the right to enjoy that culture with other people who share that culture); and
the likely impact any proposed parenting order under this part will have on that right
This particular subsection is not relevant in the present case.
Section 60CC(3)(i) – The attitude to the child, and to the responsibilities of parenthood, demonstrated by each of the child’s parents
The observations and findings under this heading are also applicable and relevant to Section 60CC(4).
I find that the mother in this case has an excellent attitude towards the children and to the responsibilities of parenthood. Furthermore, the mother has demonstrated since the children were born that she has fully accepted the responsibilities of parenthood.
When the parties were together, the mother was the primary carer. The mother’s evidence is to the effect that the father provided very little assistance in the parenting of the children when the parties were together. I accept this evidence from the mother.
An issue arose in June 2009, concerning [X]’s molar. I note the mother’s evidence in paragraph 40(a) of her affidavit. I accept the mother’s evidence concerning [X]’s tooth.
I cannot see that there was any reasonable explanation from the father as to why he could not or would not take [X] to the dental appointment – even though the child was then currently in his care. It was appropriate for the father, having noticed the issue concerning [X]’s tooth for him to contact the mother and discuss the issue with the mother.
That type of communication should also have occurred in relation to the high temperature suffered by the child, [Z]. All that would be required is a text message or a note in a communication book along the lines, “[Z] had a high temperature on Saturday night and I administered some infant panadol”. This type of communication is appropriate, of course, both ways. The parents need to keep each other informed of such issues to enable appropriate and safe co-parenting. I note that the issue concerning [Z]’s high temperature occurred in July 2009 and I accept the mother’s evidence as stated in paragraph 40(b) of her affidavit.
I also accept the mother’s evidence as stated in paragraph 40(c) of her affidavit. That issue, concerning [Z]’s rash in June 2010, comes in the same category as other health issues. The parents need to be able to exchange information in a civil manner concerning the health of the children and make arrangements appropriately for the children to receive medical, dental and other treatment as necessary. It does appear to be the case that the issues surrounding the medical care of the children have always fallen to the mother. The mother seems to be the person primarily responsible for taking the children to doctors, dentists etcetera. I did note that the father was not aware that the children have ever been to a dentist. This does seem inconceivable having regard to the age of the children. There was no particular evidence in relation to that issue so I will not make any adverse finding in that regard.
It was unusual, to say the least, that the father was not able to remember in the witness box the name of the general practitioner responsible for the medical care of the three (3) children.
It does confirm the mother’s evidence that the father has not participated fully in the parenting of the children.
There are two (2) other issues to which the Court should refer under this subsection.
[Extracurricular activity omitted]
Concerning the involvement of the children in [omitted] - I accept the mother’s evidence in this regard. I accept that the boys wanted to be involved in [omitted] and they currently have friends who are also involved in [omitted]. Given that this is something that the boys want to be involved in, then, in my view, the father ought to embrace that activity and encourage the boys in relation to their participation.
Birthday parties
In relation to the birthday parties referred to in the evidence, both of the events referred to relate to birthday parties that were to be held by two (2) of [X]’s friends. Two (2) boys – [E] and [C] – appear to have had parties organised for February 2010.
I accept the mother’s evidence concerning the two (2) birthday parties. The attendance by a child at the birthday party of a friend is an important event for the child. Young [X] wanted to attend both [E]’s birthday party and [C]’s birthday party.
As it transpired, [X] was unable to attend [E]’s birthday party. The father had arranged another activity. Surely the other activity planned by the father could have been postponed to another weekend with the children – a weekend that did not clash with the birthday party of one of their friends.
I note the mother’s evidence contained in paragraph 45(xvi) to 45(xix) where the mother stated:-
“45(xvi). At 1:10 p.m. on 19th February 2010 (The day before the birthday party) I am informed by my solicitor and verily believe that she received a facsimile from the Applicant’s solicitor regarding [X]’s attendance at [C]’s birthday party. That letter said that the Applicant has made arrangements with the children, [X] had told the Applicant that he did not want to go to the party as the Mother of the child was my friend and that the Applicant would have further discussions this weekend with [X] about his attendance at the party. Annexed hereto and marked “TLN-3” (pages 8 to 11 inclusive of the annexures) is a true copy of the facsimile from Jones Mitchell Lawyers dated 19th February 2010.
45(xvii). The issue I took with the content of the letter from Jones Mitchell Lawyers dated 19th February 2010 was:
A. On at least 2 occasions I heard [X] say to the Applicant he wanted to go to the party.
B. [X] complained that the Applicant had said “you don’t want to go to the party, wouldn’t you prefer to go to the farm” or words to that effect. I was concerned that the “discussions” that the Applicant planned to have with [X] when he collected him from school on 19th February 2010 would be in line with the “discussions” they had already had in relation to the party;
C. [C]’s Mum was not my friend but I acknowledge that I do get along with [C]’s Mum as [C] is [X]’s friend.
D. I did send the invitation to the Applicant and notify him of the details of the party and the Applicant did indicate that [X] could go on 10th February 2010 but would not confirm same.
E. The Farm, I subsequently discovered was owned by a friend of the Applicant’s and is located at [omitted]. The party was in [V] (less than 10 minutes drive from the Farm).
45(xviii). In accordance with my instructions, on 19th February 2010, my solicitors sent to the Applicant’s solicitor a letter noting my concern that it appears from the content of their letter of the same date that the Applicant would not be allowing [X] to attend [C]’s birthday party. Annexed hereto and marked “TLN-4” (page 12 to 13 of the annexures) is a true copy of that facsimile sent to Jones Mitchell Lawyers.
45(xix). [X] did end up going to [C]’s Birthday party. When the Children returned to my care on the 21st February 2010 they told me that the Applicant’s friend who owns “The Farm” was not there so they couldn’t stay there.”
I also note the mother’s evidence in paragraph 45(h) where she stated, “There have been many other birthday parties that the children miss out on whilst in the Applicant’s care, the most recent of which was [name omitted]’s birthday party on 19th December 2010.” I accept the mother’s evidence in relation to the issue of birthday parties.
Surely the attendance by a young child at the birthday party of a friend should not require the exchange of letters between solicitors. This is a straightforward and common parental obligation – to ensure the children attend the birthday parties of their friends. The person caught in the middle and suffering the most of course is young [X] in this regard. When his parents cannot agree on the implementation of straightforward arrangements concerning something as simple as attendance at a birthday party – it is concerning. On the evidence available, I have formed the view that the father should have altered his plans and made appropriate arrangements to enable the young child to attend the birthday parties of his friends. The same goes not only for young [X] but also for [Y] and [Z] should such situations arise in the future.
This does indicate to the Court that the father has not fully demonstrated that he has accepted the responsibilities of parenthood.
The father will no doubt benefit from completing the “Parenting Orders Program”. It seems to me that he should also complete the Triple P Parenting Program.
Section 60CC(3)(j) – Any family violence involving the child or a member of the child’s family.
Section 60CC(3)(k) – Any family violence order that applies to the child or a member of the child’s family, if:-
the order is a final order; or
the making of the order was contested by a person.
Neither subsections (j) nor (k) in s.60CC(3) are relevant in this case.
Section 60CC(3)(l) – Whether it would be preferable to make the order that would be least likely to lead to the institution of further proceedings in relation to the child
It is clear from the evidence of Mr F that the children ought to be spending more time with the father. Hopefully, that will alleviate the problems surrounding such issues as attendance at [activity omitted] and attendance at birthday parties etcetera. An order that will, in general, grant to the father more time with the children is therefore the type of order which would be less likely to lead to the institution of further proceedings in relation to the children.
Section 60CC(3)(m) – Any other fact or circumstance that the Court thinks is relevant
In Mr F’s first report he noted, inter alia:-
“THE CHILDREN AND THEIR RELATIONSHIPS
48.Observations were conducted of the children and their mother during the interview process. They were observed to be well behaved, relaxed and connected. The mother displayed emotional availability to them.
49. The father arrived for observations. There was no greeting between the parents. The children displayed affection to him. He was observed alone with the children. He had brought them some toy rockets and they all talked in an animated fashion. [Z] stood very close to her father. [Z] and [Y] then began playing independently and [X] stood near to his father, gaining his attention.
50. The children were observed jointly with their mother and father in a somewhat incidental fashion. There was no adult interaction. The children did not alter their stance. There was affection displayed by the children when it was time for them to leave.
EVALUATION
51. [X], [Y] and [Z] do not present with developmental concerns. They are bright, stimulated children who display positive affections for their mother and father. The children do not offer any specific views about the notions of relocation. Their ages are such that any views, if they were to be expressed would add little to the considerations of the Court.
52. It is noted however that [X] would miss his school if he were to relocate to Newcastle. It is noted that [X] is indeed cognisant of and troubled by his parents’ conflict. It is also noted that [Y] wants very much to ensure that both of his parents are in his life. He makes evenly balanced comments about his parents. He would like to see more of his father.
53. Instability and uncertainty are inherent problems for children when their parents separate. It can lead to changes in housing and schools. Friends can be lost and routines can disappear. It can lead to a loss of belongings and a loss of time with one or other parent. It can lead to a loss of emotional availability of parents.
54. This is a recent separation that has caused considerable instability and uncertainty for both parents. The father’s business is not profitable and it is in limbo. The mother’s housing and future employment prospects are entirely uncertain. The parents are in very strong conflict. They mistrust each other and their communication appears far more damaging than it appears constructive. It is quite evident that the decisions surrounding the arrangements for the children are the main impediment for the parents to find more social stability. For this reason it would be desirable for decisions to be made either by the parents or the Court as quickly as possible.
55. The stance put forward by the parents is such that it appears the Court is not going to be asked to consider a structure where the children live at some distance from either their mother or father. The mother signals that if the children are to remain on the Gold Coast, she would not relocate. The father signals that he would move to Newcastle if the children are permitted to relocate there with their mother. There are somewhat similar proposals afoot to suggest that the children might live primarily with their mother and spend regular, frequent and diverse time with their father.
56. There is nothing from the information of the parents which leads me to form a view that either lacks the capacity to meet the needs of the children. The parents it would seem have quite different parenting styles and this is a source of conflict for them. These are not issues however which would lead me to conclude the mother or father to be less than adequate parents. The information as it is put in respect of alcohol use is such that I would not conclude that either parent is dependent on alcohol. It is reasonable to conclude that each parent engaged in higher levels of alcohol consumption during their relationship and they both will have developed a higher level of tolerance to alcohol.
57. The mother presents as socially isolated. She suggests that she would be far more supported by her family should she be able to live in Newcastle with the children. She would have greater access to support which in turn would allow her a smoother entry into the workforce. She would have cheaper, more secure accommodation by virtue of living in family owned properties. She would have a greater level of emotional support and connection from her family which in turn, she suggest would assist her to be emotionally available to the children.
58. The father also appears to have had considerable difficulties with social integration since separation. He was transient, although his accommodation at this stage is quite stable. His business is failing. He suggests that a move to Newcastle would only add to his troubles. He suggests that the Gold Coast not only represents a better lifestyle for the children, it would also offer more stability for them. He believes that the certainty of this would provide certainty for him so that he can move ahead with his business arrangements. With this however he acknowledges that the children should change schools and should do so soon, before they become too ensconced in their present environment.
59. Parental conflict when it is intense, long term and quite explicit tends to produce detrimental outcomes for children. It can affect their parental relationships, their schooling and behaviour and their social skills. Severe forms of conflict can increase the likelihood of mental health difficulties in children to clinic levels. The parents in this matter display little ability to resolve conflict over day to day and longer term issues at this stage. They appear to have insight into the potential effect of their conflict on their children and their destructive communication, thankfully has occurred by way of text message. Orders should remain in place that require of the parents to communicate in writing, either by texting or email and to refrain from relying on the children to pass messages between them. The parents may also benefit from a parenting orders program.”
It is particularly relevant in this case that the parents take note of what Mr F has had to say. The parents should particularly note, “Parental conflict when it is intense, long term and quite explicit tends to produce detrimental outcomes for children. It can affect their parental relationships, their schooling and behaviour and their social skills. Severe forms of conflict can increase the likelihood of mental health difficulties in children to clinic levels.”
Mr F continued further in his first report:-
“65. Regardless of whether or not the children live in Newcastle or the Gold Coast, it is my view that they should be afforded the scope to develop and maintain meaningful relationships with their parents. The children are of an age in which developmentally it is quite appropriate for them to spend longer periods of absences from one or other parent and more intense blocks of time. This is especially the case for intact relationships. Structures that best allow for meaningful relationships to develop are those that allow for the parent to care for them at different times across different aspects of their lives.
66. This is not to say however that this is a matter where I could confidently recommend a structure of shared living for the children. From a practical and developmental perspective the parents may establish the scope for such a structure. I have little confidence however in the interpersonal relationship of the parents to make such an arrangement work seamlessly for the children at the present stage and I would have strong doubts about its longevity.
RECOMMENDATION
67. It is recommended from this assessment that:
a. The children live with their mother in Newcastle.
b. If the parents are living in close proximity to each other (regardless of it being on the Gold Coast or Newcastle) the children live with their mother and spend time with their father as follows:
i. During the school term in week one from Thursday to Friday and in week two from Thursday to Monday.
ii. For half of the school holiday periods.
c. Change overs wherever possible occur through the school or child care service.
d. The parents communicate in writing by email and text message.
e. The parents consider enrolling in a parenting orders program.
f. Telephone communication occurs between the children and their parents at all reasonable time.
g. If the parents live at an unfeasible distance from each other, the children live with their mother and spend time with their father as follows:
i. For at least one weekend in three in the Newcastle area.
ii. For all of the mid-year holidays and half of the Christmas holidays.
iii. The mother will facilitate telephone calls between the children and their father on two occasions a week.”
I accept the evidence given in the first report by Mr F. I do of course note that the mother, subsequently, changed her mind and decided not to relocate to Newcastle.
In his later report, Mr F stated, inter alia:-
“THE CHILDREN AND THEIR RELATIONSHIPS
53. The children arrived with their mother at the time of their scheduled interview. She set up a DVD for them and they had some games. She gave them lunch and my incidental observations of them showed them to be entirely relaxed and supported by their mother. Ms Nolan displayed emotional availability to the children and support for them despite the stressors of the day.
54. Mr Pelly and Ms S arrived. The children greeted them warmly. Mr Pelly and Ms S came into my office. There was no greeting or interaction between the adults. Ms S and
Ms Nolan had not met and there was no introduction. The children came into the room with their father and Ms S. They showed affection to them and chatted about school. Mr Pelly had photographs to show the children from their recent holidays. There was laughter. He asked if they drove or caught the train. The children left the room to their mother and came back in again. When it was time for them to go they quite naturally and affectionately farewelled their father and Ms S. Again there was no adult interaction.EVALUATION
55. [X], [Y] and [Z] are all of school age. They present as bright, well stimulated children. There are no developmental impediments in my view to the proposals as they are put by the parties.
56. The children present as sensitive about the conflict of their parents. [X] wants it to stop and for his parents to get on well with each other. [Y] embracing a concept of fairness (for his parents) and [Z] sees the solution in having her parents reconcile.
57. The substantive changes to the last report relate to the father being more socially stable. He and Ms S have moved in together. The further change relates to the position of the mother in that she no longer seeks to relocate with the children to Newcastle.
58. The parental conflict has not improved since the last report. It has become more entrenched. The parents are highly polarised. The children transfer between two mutually exclusive environments. The parents strongly mistrust each other. The communication between them is limited and ineffective. The unspoken or implicit rule here is that it is the children who are responsible for managing the flow of information between these households. It appears that the parents are unable to communicate about or agree on any aspect of the extra-familial lives of the children.
59. The mother sees the solution as structural. If the children are with her for the bulk of the school week and weekends, they can establish a degree of certainty and consistency with their extra-familial lives. The father too seeks a structural solution. If the children can spend a broader and larger range of time with him, there is less pressure on their time together and he will have more scope to participate in their day to day lives. This is a difficult matter in that both of these proposals carry the potential for loss and detriment to the children.
60. Children tend to develop stronger relationships with a parent when they have the scope for sharing different types of time together. This relates to school and non-school time. It allows them to experience transactions in different settings and environments. It allows them a broader scope to be exposed to the beliefs and ideas of both parents. If the children spend time with their father in accordance with their mother’s proposal, it reduces the scope for them to have that broader range of time with their father. There is in my view a loss of opportunity for them to experience weekend time and school time with their father. The advantage to her proposal however is that the children would probably have a more predictable set of routines as they would be operating more predominately out of one household.
61. A structure that sees the children spending six nights with their father each fortnight is effectively a structure of shared living. I have commented in the previous report (at paragraph 66) in respect of my concerns about a shared living arrangement. I have also commented (at paragraph 59) about the potential implications for the children of being exposed to parental conflict. From this updated assessment, my concerns for the interpersonal relationship of the parents have only deepened. In my view, the parents are ill-equipped to be able to manage the larger flow of information required to manage such a structure. I have strong misgivings about the longevity of such an arrangement and the pressure it will place on parental conflict. Such a structure may be enhanced by the father completing a parenting orders program and by having specific orders governing parental communication and decision making.
62. Beyond this, if the Court is to instigate an arrangement in accordance with my recommendations in the previous report, I would remain concerned about the capacity of the parents to ensure some consistency in meeting the day to day, extra-familial needs of the children. The conflict and poor communication is such that I have stronger misgivings about the amount of time I have recommended between the children and their father. Despite these concerns I do not at this stage alter my recommendations. The structure might be enhanced if the parents are to undertake to take the children to their weekend events and notify each other if there is an intention not to do so.
63. In my view, the Court should consider an arrangement for the children that allows them to remain living primarily with their mother. They should have the scope for broader ranges of time with their father. It should encompass school and non-school time. I remain of the view that the weekends are alternated during the school term. Holidays and special events should be shared between the parents. The orders should provide some guarantee for the children that both parents will endeavour to meet the children’s extra-familial needs. By the same token the parents should also consult with each other prior to enrolling the children in any extra-curricular activities. The children should have some protection from their parents’ communication. Ideally changeovers should occur through the school as it protects the children from parental interactions and makes their transitions occur in a more seamless fashion. The father should enrol in a parenting orders program as it may afford him similar information about the effects of poor communication and parental conflict upon children. It may offer him some advice on how best to communicate with
Ms Nolan.”
Mr F also gave evidence in the witness box. It is clear that Mr F is concerned about the conflict and the poor communication between the parents.
It is apparent from Mr F’s evidence that he considers that the children should be spending school and non-school time with the father. I accept that recommendation.
Mr F also gave evidence that he could see benefits in staging an increase in the father’s time. In that regard, Mr F stated:-
“HIS HONOUR: Just hold on there, Mr F. Now, I’m just considering your evidence. Do you have a view, in view of your ‘stronger misgivings’, as you’ve referred to there in paragraph 62, do you think that the court ought to consider some staging of or increasing in time or not?
Mr F: There are benefits to it, your Honour. There are twofold benefits to it. Firstly, it allows the parents to be – manage the increase in time and the level of communication between them and – and to manage those new orders in a way. It allows the children to get used to the increased time, not only of being with their father, but also being away with their – being away from their mother, which is significant. My – yes – yes, it – it is reasonable, in my view, for the court to consider a stage and a graduation of – of – of that structure.
HIS HONOUR: Okay. In the off week at the moment, it’s currently Thursday afternoon for a few hours and – were you aware of that?
Mr F: Yes, your Honour.
HIS HONOUR: You will be. And you have recommended an overnight there in the off week?
Mr F: Yes.
HIS HONOUR: In your opinion, when there are difficulties with communication, does that impact at all upon your opinion concerning overnights in off weeks or not?
Mr F: Potentially, yes. And – and in balancing those things, my view is that the need for frequency outweighs those issues of conflict at this point – at this point in time from what I can see and the information I Have.
HIS HONOUR: Yes?
Mr F: Notwithstanding the fact that I am concerned about the issues of conflict that are there.”
Conclusion in relation to best interests
There have been difficulties with communication between these parents. There is, as noted, mistrust between them. Notwithstanding those obstacles the parties both still accept that the children need to have a close relationship with both parents.
As noted, I accept Mr F’s view that the children need to spend weekend time and non-weekend time with the father. The mother’s proposal (in particular for changeovers to take place at 9.00 am each Saturday morning) is therefore not appropriate.
As to the father’s proposal for the children to spend six (6) nights per fortnight in his care – I note Mr F says in paragraph 61 of his second report that such a structure, “is effectively a structure of shared living”. Mr F has concerns about a shared living arrangement and commented in both reports about those concerns. He set out in his second report at paragraph 59 the potential implications for the children of being exposed to parental conflict. In view of Mr F’s concerns about six (6) nights per fortnight with the father – I do not consider such a proposal to be in the best interests of the children.
To my mind, the children’s best interests will be served by the adoption of the recommendations of Mr F. The children should spend five (5) nights per fortnight with the father. I do, however, consider that a staged process is called for. This accords also with the recommendations and evidence of Mr F.
To my mind, the best approach would be to have the children living primarily with the mother and spending alternate weekends with the father from after school Friday until before school Monday. In addition, the children will spend from Thursday night to Friday morning (with school changeovers) in the off week. This arrangement will persist for a period of six (6) months from the date of the final order. This will enable the father to complete the “Parenting Orders Program” and the Triple P program. It will also give the children time to become used to such an arrangement. It will give the parents time to adjust to the change in circumstances also.
Six (6) months after the date of the final order and provided the father has completed the “Parenting Orders Program” and the Triple P parenting program, the children shall spend time with the father from after school Thursday to before school Monday each alternate weekend. In addition they will spend Thursday night to Friday morning in the off week with the father.
I note the comments of the Full Court in Collu & Rinaldo [2010] FamCAFC 53, especially at paragraph 355. At that paragraph the Full Court stated, inter alia:-
“… in determining best interests the obligation is to ‘consider, weigh and assess the evidence touching upon each of the relevant matters adduced on behalf of the parties. After a consideration of all those matters, a trial judge should then indicate to which of those matters he or she attaches greater significance and how all of those matters balance out’”.
It will be seen from the above that I have attached significance to the issue of parental conflict. In my view, Mr F’s assessment is correct. As a result of the parental conflict in this case – it is not in the best interests of the children for them to be spending any more than five nights per fortnight with the father. In addition to accepting Mr F’s view in that regard – I have also concluded that, notwithstanding some of the father’s shortcomings as identified earlier herein in these Reasons in relation to issues such as the involvement of the children in [activity omitted] and their attendance at birthday parties – I have nonetheless concluded that it is still in the children’s best interests to spend both weekend time and non weekend time with the father.
In my view, the proposed orders are in the best interests of the children. They accord with the recommendations of Mr F.
Section 61DA
There should of course be an order for equal shared parental responsibility. Both parents acknowledge this.
Section 65DAA
In relation to the possibility of an order for equal time, such an order is not appropriate in this case. I note the evidence of Mr F in this regard, in particular at paragraph 61 of his second report. Mr F is concerned about the “conflict and poor communication” between these two parents.
In relation to s.65DAA(2) – that section deals with “substantial and significant time”. The order proposed by the Court does fall within the definition of substantial and significant time as stated in s.65DAA(3) of the Act. I also accept the other applicable recommendations made by Mr F in his report dated 7 May 2010 at paragraph 67 and the final orders to be made in this case should reflect these Reasons and those recommendations.
Property
The well known four (4) step approach for consideration in cases involving s.79 of the Act have been set out in cases such as Hickey & Hickey & Attorney General for the Commonwealth of Australia (Intervenor)[1]. The considerations are as follows:-
a)The net asset pool of the parties needs to be ascertained;
b)The contributions by the parties to that pool and to the family;
c)The parties’ financial and family circumstances and a consideration of their needs both now and in the future;
d)A requirement that the order made be just and equitable.
[1] (2003) FLC 93-143
Notwithstanding the fact that the parties in this case were not married, for ease of reference I have referred to them as the husband and wife respectively.
Step 1 - Assets and liabilities
By agreement, the parties have included their superannuation and non-superannuation assets in the one pool.
There are several items of disagreement between the parties in relation to the pool. I will deal with the minor matters first.
2005 Toyota Hilux Dual Cab
The husband has this included in his list of assets and liabilities contained in the Case Outline Document filed 22 February 2011 in the amount of $10,000. This is the husband’s motor vehicle. The wife has the value amount of $13,400. The husband relies upon the Red Book valuation and has annexed to his trial affidavit the reference to the Red Book (Annexure “SCMP-3”). In the absence of any agreement between the parties I will include the sum of $10,000 in the pool as the value for the Hilux as that is the “highest” amount the husband is prepared to agree. I do note the Red Book valuation in that regard.
Stock for online clothes business
The husband has included an asset for the wife in the amount of $20,000 in relation to stock for an [omitted] business. The wife was cross-examined by counsel for the husband in relation to this issue. I accept the wife’s evidence in this regard. I accept that the wife was not running a business by way of an [omitted] business. I accept that the wife and her friends were importing clothes – for their own use and the use of their children. I accept the wife’s evidence that if some of the clothes did not fit the children for whom they were purchased – the wife would sell or attempt to sell those clothes on ebay. The husband may well have seen a number of bins containing clothes. The wife denies that she told the husband that the clothing was worth $20,000. I accept the wife’s evidence in that regard.
In my view there should be no item included in the pool and no amount included in the pool in respect of the “Stock for [omitted] business” as contended for on behalf of the husband.
Household furniture
The husband has included household furniture in each pool in the amount of $3,000. This is an estimate. In the absence of any agreement between the parties concerning the value of any household furniture, I do not propose to include any such figure for either party in the asset pool.
Proceeds of sale of 1000 WBC Shares and 2500 AMP Shares
The wife has contended for an add back – to the effect that the husband had the benefit of $32,050 being the proceeds of sale of 100 Westpac Bank shares and 2500 AMP shares. The husband says that in respect of that money only $9,000 should be added back in respect of legal fees paid. I note the husband’s evidence contained at paragraphs 105, 106 and 107 of his affidavit filed 31 January 2011. I accept the husband’s evidence as stated in those paragraphs. It is apparent that the husband needed to sell the shares in question in order to support himself during the time in question – namely between June 2009 and December 2009. I accept his evidence that the money was, generally speaking, used for reasonable living expenses. I note that the husband has conceded that $9,000 should be added back in respect of legal fees paid from those funds.
It is clear from decisions of the Full Court of the Family Court of Australia that there are three (3) clear categories of cases where an asset will be notionally added back into the pool. In AJO & GRO[2] the Full Court stated at paragraph 30:-
[2] (2005) FLC 93-218
“30To date, 3 clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a) where the parties have expended monies on legal fees …;
(b) where there has been a premature distribution of matrimonial assets ..;
(c) in the circumstances outlined by Baker J in Kowaliw v Kowaliw (1981) FLC 91-092 …”
There is no evidence before the Court that the husband acted “recklessly, negligently or wantonly” with any of the matrimonial assets so as to reduce their value. Accordingly, the third category “the Kowaliw” category is not relevant in this case.
Has there been a premature distribution of matrimonial assets? In NHC & RCH[3] at page 79,314 the Full Court of the Family Court of Australia supported comments by earlier Full courts that after separation the parties to a marriage need not go into a state of “suspended economic animation”. The parties are able to spend funds that were accumulated prior to separation – if such funds are spent on the parties’ own well being and maintenance. Any such expenditure can only be at a reasonable level.
[3] [2004] FLC 93-204
The expenditure by the husband as set out in paragraph 107 of his affidavit is, to my mind, reasonable. I therefore agree with the submission made on behalf of the husband in respect of this item of the property pool. The only amount to be added back is the $9,000 for legal fees included in the husband’s pool.
I note that the balance of the husband’s legal fees have apparently been funded by his father. Those amounts ought not be added back into the pool.
I note that the wife’s legal fees in the amount of $33,391.70 have been “by agreement” added back into the pool.
Add back – money removed from mortgage account by the husband - $5,450?
Counsel for the husband, Mr Jordan, referred the Court to annexure “TLN-12”. This annexure appears in the mother’s affidavit. It shows that the money drawn from the mortgage account by the husband totalling $5,450 occurred between 27 May 2009 and 11 August 2009.
I note that the funds in question were drawn down by the husband in the six month period following separation. I accept the husband’s evidence to the effect that he has suffered stress since the separation. It is apparent that he has not done a great deal of paid work since the separation. I note that the time frame in question regarding the draw down of that mortgage by the husband accords with the time frame referred to in paragraph 107 of the husband’s affidavit. In the circumstances, I am prepared to draw an inference that the money drawn down was used by the husband for living expenses.
Monies owed by the wife to Ms N; Ms K and [S] School
I note paragraph 116 of the wife’s affidavit filed 28 January 2011. In particular, I note subparagraphs (n) and (o). I accept the wife’s evidence as contained in those paragraphs. Since separation the wife has not worked outside the home. I find that any funds borrowed by the wife from her mother (Ms N) was in order to assist the wife financially since separation. I infer from the available evidence that those funds were used by the wife for living expenses for herself and the children post-separation. The wife did not strike me as a wasteful person. There is no evidence of any extravagant spending by the wife. I accept the submission made on her behalf and contained in her Case Outline Document filed 21 February 2011 – I accept that the money owing to Ms N, Ms K and the [S] School are all properly characterised as matrimonial liabilities and should be included in the pool.
The money advanced by Mr P (the husband’s father)
The single largest issue concerning the pool in this case and the property settlement proceedings generally is the question of whether or not monies advanced by Mr P should be characterised as a loan, repayable by the parties and therefore, appear in the property pool as a matrimonial liability.
The husband gave evidence that he did not recall any specific conversation with the wife in relation to this issue.
The paternal grandfather is a [occupation omitted]. His name is Mr P. There is an affidavit filed 24 February 2011 which was sworn by Mr P on the same date.
Mr P was born [in] 1937. He has two (2) children namely – the applicant father: Mr Pelly – and a daughter, Ms P. His daughter does not have any children.
Mr P is a widower. He has no other dependants. It is apparent from the evidence of Mr P and the husband in this case that, over a period of many years, Mr P has advanced large amounts of money to his son. The money has been advanced either personally by Mr P or through entities he controls. Mr P was formerly a [occupation omitted]. Mr P retired as a [omitted] in 1991. He continues to work as a [omitted]. He works part time [omitted]. He is [omitted]. He intends to retire completely from work later in 2011. He currently lives off the income from his employment and from the income he derives from his investments. He will be a self funded retiree.
Mr P controls a company called [B] Pty Ltd. This company is the corporate trustee of The Pelly Trust and The [H] Trust. I note the evidence of Mr P contained in his affidavit at paragraphs 28, 29 and 30. Mr P states in those paragraphs:-
“PAYMENTS BY ME OR BY MY ENTITIES
28. Throughout Mr Pelly’s relationship with the Respondent in these proceedings, Ms Nolan, I made a number of payments, either personally, or by entities controlled by me, to Mr Pelly and/or both Mr Pelly and Ms Nolan. To the best of my knowledge, these monies were used for the purpose of Mr Pelly and Ms Nolan’s relationship.
29. Mr Pelly’s affidavit sets out the basis and extent of these payments. I set out below, however, additional comments by way of further explanation.
30. All payments made by me either directly or through the entities mentioned above, have been made at my complete discretion. I control, and made all decisions relating to, all of the entities referred to at paragraph 4 above, save for [D] Pty Ltd. Save for the comments above, Mr Pelly has no interest in these entities. He does not have, and has not had, any input into the decisions to make these payments.”
I accept this evidence from Mr P.
I also note the evidence of Mr P contained in paragraphs 31 – 40 (inclusive) of his affidavit. There, Mr P states:-
“Housing Loan
31.In or about November 2003, I agreed with Mr Pelly that I would provide a loan to him to enable him to purchase a property at Property V, [V].
32.Annexure “SCMP-8” to Mr Pelly's Affidavit attaches the loan agreement between [B] Pty Ltd as trustee for the Pelly Trust and Mr Pelly (“the loan agreement”). Interest was particularised to apply at the same rate as the Westpac mortgage. Interest did not have to be paid for at least three (3) years. The loan was structured in this manner to allow Mr Pelly and Ms Nolan to get on their feet – they had a young family, minimal income and a Westpac mortgage debt.
33.Most of the monies were paid on my behalf out of the [H] Trust. The $250,000.00 was charged against the Mr P loan account in the books of the [H] Trust. The loan of $250,000.00 was recorded in the accounts of the Pelly Trust as a loan from me and a loan in the same amount to [Mr Pelly].
34.The following amounts were paid by me as part of that loan:
• Deposit of $37,800.00
• Stamp duty $6,980.00
• Moving expenses $2,640.25 (estimated)
• Balance of settlement monies $242,579.75
$290,000.00
Mr Pelly reimbursed me $40,000.00 from the sale of his shares.
35.I expected Mr Pelly would pay off the Westpac loan and then commence to repay the Pelly Trust. I expected the payment to the Pelly Trust would include interest. I did not, and have not, made a demand for payment on behalf of the Pelly Trust. The terms of the loan agreement preclude me from doing so until such time as the debt to Westpac is paid. I did not register the loan by mortgage as I did not feel it was necessary to do so.
35.In late 2006, Mr Pelly informed me that he was selling the [V] property and had signed a contract to purchase the property at Property B. I had been aware that Ms Nolan and Mr Pelly were having problems with their neighbour. I had suggested to Mr Pelly that these problems would only be solved by selling the [V] property and moving elsewhere. We discussed the loan agreement. As director of [B] Pty Ltd, I was able to permit the loan originally advanced for the purchase of the [V] property to be transferred to the new property on the same terms ad the original loan. I did not think it was necessary to have a new written agreement as the terms of the original loan were clear and in writing.
37.I am aware from conversations I had with Mr Pelly that he had arranged a mortgage loan of $170,000.00 with Westpac to enable him to purchase Property B, an increase of $70,000.00 from the mortgage over the [V] property.
Mr Pelly was confident that he could meet the repayments on the increased borrowings from his income and the monthly contributions made by me, or on my behalf, to
Mr Pelly’s Westpac account. As detailed in Mr Pelly's Affidavit, I had been making payments of $1,000.00 per month into Mr Pelly’s Westpac account to be used towards payment of mortgage, insurance and rates payments on the [V] property.38.I did not share Mr Pelly’s confidence. From my own observations, it was apparent that Mr Pelly and Ms Nolan were struggling financially. I was of the view that Mr Pelly could not afford the payments on the increased loan. It was therefore agreed with Mr Pelly that the Pelly Trust would lend him a further $70,000.00 to pay down the Westpac mortgage to $100,000.00. It was agreed that the additional loan of 470,000.00 would be made on the same terms as the original loan of $250,000.00. Again I did not think it was necessary to sign a further loan agreement. The terms of the existing agreement were clear.
39.On 5 January 2007, I arranged for the transfer of $70,000.00 to Mr Pelly’s Westpac account from a Macquarie Investment account held by [U] Pty Ltd.
40.The payment was made on behalf of [H] Trust A/c Mr P – Loan Account. Subsequently [H] Trust repaid [U] by cheque banked to [U] on 15th March 2007. The $70,000.00 was charged against the Mr P loan account in the books of [H] Trust. As with the original loan of $250,000.00, the further 470,000 was recorded in the accounts of the Pelly Trust as a loan from me and a loan in the same amount to Mr Pelly. Annexed hereto and marked with the letter “C” is a true and correct copy of bank statement from Macquarie A/c No: [omitted] in the name of [U] Pty ltd showing the deposit of $70,000.00 on the 5th January 2007 to Mr Pelly.”
I note that the money advanced by Mr P to assist the husband (and the wife) with the initial purchase of the property at Property V, [V] - subsequently assisted the parties with the purchase of the property situated at Property B.
Exhibit “3” is a document dated 21 January 2004 headed, “Annexure Certificate of Acceptance” and it notes that the document was signed by the husband, Mr Pelly and witnessed by the wife, Ms Nolan. I accept the evidence of the wife that she was not provided with any details in relation to the money advanced by Mr P – either in relation to the initial advance of $250,000 or in relation to the further advance of $70,000 made at the time when Mr Pelly was purchasing the property at Property B.
I note Exhibit “4”. This is a letter dated 19 January 2004 from [B] Pty Ltd addressed to the husband, Mr Pelly. The reference line is, “Loan Facility”. Under that heading the letter states:-
“The Facility
The Advance is to be wholly applied by you towards the purchase of Property V, [V].
Other terms and conditions of this Facility are:
1. The Advance will not be repayable before the first registered mortgage you are to give to Westpac Banking Corporation is repaid in full and thereafter on not less than 6 months written notice;
2. You will not be required to pay us any interest for a period of at least 3 years (although interest will accrue on the Advance at monthly intervals at the same rate of interest as is payable from time to time under the first registered mortgage you are to give to Westpac Banking Corporation);
3. The Advance shall be made in instalments upon request up to a total of $250,000; and
4. The Advance shall be secured by a registrable all-moneys mortgage which will rank behind the first registered mortgage you are to give to Westpac Banking Corporation and may be registered at our discretion.”
I accept the evidence of Mr P that the money advanced in the sum of $250,000 was advanced to his son as a loan. Furthermore, I accept the evidence of Mr P that the additional amount of $70,000 that was advanced to the husband at the time of the purchase of the Property B property was also intended as a loan.
In a 1981 decision entitled Af Petersens & Af Petersens[4] - Nygh J stated at page 76,669, inter alia:-
[4] (1981) FLC 91-095
“What is the appropriate order? Normally this Court will distribute amongst the parties the net value of their assets after deduction of all debts. But this is not invariably the case: the Court will not normally take account of debts incurred after the separation and on some occasions has ignored debts, although incurred during the marriage, for which it felt one of the parties should bear exclusive responsibility: Antmann and Antmann (1980) FLC 90-908.
…”
Nygh J continued further at 76,669, inter alia:-
“It is fairly common in this Court to meet a situation where a parent has made a loan to a child which is in all respects legally enforceable, but which is not in fact enforced and would not really be expected to be enforced. It is no doubt an “obligation” but if the obligation is not likely to have to be met, it should not be taken into account.”
The views stated by Nygh J in the Af Petersens decision were endorsed by Evatt CJ in Prince and Prince[5] at page 79,076 where Her Honour stated:-
“In some cases there are sufficient uncertainties as to the alleged liability to lead the Court to disregard it entirely or partly (e.g. a loan from a parent of the party not likely to be enforced; Af Petersens (1981) FLC 91-095; Quirk (1983) unreported).”
[5] (1984) FLC 91-501
In Biltoft and Biltoft[6] the Full Court stated:-
“There is no requirement that the rights of an unsecured creditor or a claim by a third party must be considered and dealt with prior to the Court making an order under s. 79, nor is there a rule of priority as between a creditor claimant and a spouse. Those rights, however, cannot be ignored. They must be recognised, taken into account and balanced against the rights of the spouse. That was the approach adopted by the trial judge. In this case, there are uncertainties surrounding the debt, including the reluctance of Mr Horrocks to negotiate as to an amount, to institute proceedings for its recovery or to seek a stay of the proceedings in this Court. These factors must form part of the balancing equation.”
[6] (1995) FLC 92-614
Exhibit “2” is a loan application signed by the husband seeking a Westpac Loan of $100,000 to assist him in the purchase of the property situated at Property V, [V]. Mr Pelly notes on the front page of the loan application that his personal contribution towards the purchase price is $290,000. The evidence of Mr P reveals that those funds were in fact being advanced to his son by means of a loan. The initial advance was for approximately $290,000 but Mr Pelly then sold some shares and paid down the debt to his father so that the amount owing was $250,000 to his father. When looking at Exhibit “2” in its entirety it does not appear to be signed by Mr Pelly. There is no specific date noted on the application form itself but I do note from “Page 6 of 8” that it is stated that, “I need to have the money from this loan by: 15-1-04”. The date of the contract for the purchase of the property is 25 November 2003. Part of that contract forms part of Exhibit “2”.
On “Page 5 of 8” in Exhibit “2” the heading is:-
“Liabilities (what I owe) – All people
Complete for all people applying for the loan
List all liabilities whether individually or jointly liable – attach details if there is insufficient space”
The only liability noted on that page is a Westpac Visa (Card) stating that the amount owing is $1,900.
There is a specific heading on “Page 5 of 8”, “My other loans, including personal loans, vehicle leases, hire purchases, etc are”. The word “nil” has been written in under this heading. No other liabilities are noted in that loan application document which is Exhibit “2”. It certainly seems to be accepted by Mr Pelly that he filled in that form. It seems that loan application document was filled in prior to 15 January 2004. The money advanced by Mr P – or so it seems from Exhibit “3” – did not occur until at least 21 January 2004. There is no doubt, however, that Mr Pelly well knew at the time that he filled in the loan application form to Westpac that his father was advancing $290,000 to assist him with the purchase (on the basis of a repayment from
Mr Pelly to Mr P in the sum of $40,000 upon the sale of shares by
Mr Pelly).
It is contended on behalf of the wife that whilst the monies may have been advanced by Mr P as a “loan”. There was never any possibility or prospect that the money would be repaid and hence, the Court should not include the amounts advanced by Mr P (and the interest claimed thereon) as matrimonial debts in these s.79 proceedings.
Mr Jordan of Counsel appeared on behalf of the husband. Mr Jordan submitted that the wife well knew that the monies advanced by Mr P were indeed a “loan” that needed to be repaid. Mr Jordan referred to Exhibits “6”, “7” and “8”. These Exhibits are a Response document on behalf of the wife filed on 16 December 2009; an affidavit of the wife filed 16 December 2009 and an affidavit of the wife filed 2 December 2010. In the Response document under the heading, “Final Orders Sought” the wife has included paragraph 29 which states, inter alia:-
“29. The father shall indemnify the mother for any money owing or which may become owing in relation to the Property B property including but not limited to the loan to Westpac, money owed to Mr P or any entity controlled by Mr P ...”
In the wife’s affidavit filed 16 December 2009 at page 85 there appears a table of assets and liabilities. Under the heading “Liabilities” the wife has listed, inter alia, “Money from [B] being the subject of a loan in the Applicant’s name”. The amount included in the table is, “E$250,000”.
A similar entry appears in a table of assets and liabilities included in paragraph 3 of the wife’s affidavit filed as recently as 2 December 2010.
The terms of the original loan from [B] Pty Ltd to the husband as set out in Exhibit “4” note that the money does not have to be repaid until after the Westpac Loan has been repaid.
Since the monies in question were advanced to the husband no interest has been paid by the husband to Mr P. Nor has there been any demand for the payment of any interest and there has not been a demand for the repayment of the loan. Indeed, as just noted, the loan itself – according to its terms – is not repayable until the Westpac loan has been repaid.
I note the evidence of the husband contained in paragraph 120 of his affidavit filed 31 January 2011, wherein he states:-
“CONTRIBUTIONS MADE BY OR ON BEHALF OF MY FATHER
120. Since the commencement of my relationship with Ms Nolan, our financial circumstances have been sustained by my father, Mr P. By way of summary, my father has made the following payments either directly or through entities controlled by him:
120.1 In January 2004, the sum of $250,000.00 to me by way of loan from [B] Pty Ltd as trustee for the Pelly Trust.
120.2 In January 2007, the sum of $70,000.00 to me by way of further loan from [B] Pty Ltd as trustee for the Pelly Trust.
120.3 Prior to separation, by way of contributions to our living expenses:
120.3.1 from 27 October 2003, by deposit of $1,000.00 per month into my Westpac account to be used in payment of mortgage, insurance and rates payments on the Property [V] and Property B properties (and initially towards expenses on our Miami tenancy), totalling $67,000.00.
120.3.2 from 16 February 2006 until 4 June 2009, by deposit of $400.00 per fortnight into our joint account as contribution to our living expenses, totalling $34,000.00.
120.3.3 by further payments for the following amounts and purposes:
(a) $50,000.00 and $8,000.00 on 4 and 7 July 2005 respectively, used to purchase our current motor vehicles;
(b) $2,000.00 on 22 August 2005 used towards improvements on the [V] property referred to at paragraph 91 above.
(c) $5,000.00 on 24 October 2005 used towards improvements on the [V] property referred to at paragraph 91 above.
(d) $15,000.00 on 22 November 2005 used towards improvements on the [V] property referred to at paragraph 91 above.
(e) $2,000.00 on 22 September 2006.”
I accept this evidence of the husband.
It is apparent that Mr P has advanced to his son and to the wife, a substantial amount of money over many years. In addition to the two (2) particular sums totalling $320,000 to assist the husband to purchase the two (2) properties referred to earlier – Mr P has provided an additional amount of approximately $200,000 to help his son and
Ms Nolan with the running of their family. Mr P does not seek to be repaid in respect of any amounts except the amounts advanced to assist the husband in purchasing the real estate (and the interest thereon).
I accept the evidence of the wife that in respect of the $400 per fortnight deposited into the parties joint bank account by Mr P – the wife was well aware of those funds. I note they were deposited between February 2006 and June 2009. I note that Mr P deposited a further $1,000 per month into the husband’s Westpac account from 27 October 2003 onwards. There is no specific end date in respect of those deposits referred to in the evidence by the husband. I note that the wife says that she was not aware of those deposits. I find in respect of those monies that the husband did use part of those monies to assist with the running of the household including mortgage repayments, insurance etcetera. It is probably also the case that the husband used some of that money for his own personal use including expenditure at such establishments as the “[omitted] Tavern”.
In any event – it is apparent that Mr P advanced substantial funds to the husband and to the parties over a long period of time.
Mr P gave evidence in this case. Mr P specifically stated that he has approximately $1,500,000 by way of savings. Upon his final retirement he intends to live off the income generated from those funds. In addition, he owns his principal place of residence in New South Wales. He estimated that property to be worth $800,000. it is unencumbered. Upon the recovery of the monies sought by Mr P he will use those funds to assist him in the funding of his own retirement.
Mr P has, obviously, been exceedingly generous in relation to his financial dealings with his son and the parties. Because of the generosity of Mr P the parties and their children were able to live in comfortable homes during the course of their relationship.
I accept the evidence of Mr P that when the husband sold the [V] property and bought the Property B property – that it was agreed between them that the debt would merely be “rolled over”. It seems that the essential terms and conditions between Mr P and his son remained the same. There was, of course, the additional sum of $70,000 advanced at that stage. At this point in time there is no legal obligation for any loan to be repaid by the husband to Mr P. It seems to me that the obligation to repay will not arise until the Westpac loan has been repaid.
Eventually the obligation to repay the money to Mr P will arise. The question for the Court is - whether or not once the obligation arises – is it likely to have to be met? (note per Nygh J in Af Petersens (supra) at 76,669).
Mr P is in reasonably comfortable circumstances but, clearly his source of funds is not endless. There was no evidence led in relation to his life expectancy. He is a self funded retiree.
As noted, Mr P was extremely generous in advancing large amounts of money over a considerable period of time to his son and (whilst they were together) to the parties. Since separation Mr P has continued to financially assist his son.
I note paragraph 46 of Mr P’s Affidavit filed 24 February 2011 where he states:-
“46.I am aware that Mr Pelly proposes that Ms Nolan remain living in the Property B property with their children for a period of up to four years. I am prepared to wait for repayment until Ms Nolan and the children vacate the property in accordance with Mr Pelly’s proposal.”
Whilst it is the case that Mr P has advanced considerable monies to his son and to the parties – it was only in respect of advancing money for the purchase of real estate by the father that Mr P prepared a loan agreement. It seems to me that Mr P specifically viewed the monies advanced in respect of the purchase of real estate differently to the way that he viewed monies advanced to assist with ordinary day to day living expenses. This is true in respect of both the initial advance of $250,000.00 and the additional advance of $70,000.00 upon the purchase of the Property B property.
Mr P does not seek to be repaid any amounts except amounts advanced to assist with the purchase of real estate.
In view of the fact that Mr P clearly has demonstrated the clear intention to treat monies advanced in respect of the purchase of real estate differently to the way he viewed monies advanced for ordinary living expenses – I have reached the conclusion that when the obligation to repay the principal sums of $320,000.00 arises – it is, on the balance of probabilities, likely to have to be repaid by Mr Pelly to Mr P. That is not to say that Mr P will not assist his son financially beyond that point. I will refer to that later in these Reasons for Judgment.
Interest on the monies advanced by way of loan for the purchase of real estate
The agreement between [B] Pty Ltd and Mr Pelly notes that interest does not have to be repaid in the first three years following the advance of the monies. I do note that in fact no interest has been paid to date. Indeed Mr Pelly has repaid somewhere between $5,000.00 and $20,000.00 in total. He only managed to do that because he had received an inheritance from one of his grandparents. In his Affidavit filed 31 January 2011 the husband has stated in paragraph 117 – 119 inclusive:-
“My inheritance
117.In January 2010, I received an inheritance of $20,000.00 from my grandfather’s estate, deposited to my Macquarie Cash Management account. Annexed hereto and marked “SCMP-6” is a true and correct copy of a letter to me from Stuart Bouveng Barrister, executor of my grandfather’s estate, dated 27 November 2009.
118. These monies were applied as follows:
118.1Payment of $15,000.00 made on 20 January 2010 against the Westpac loan secured over the Property B property as and by way of mortgage. Annexed hereto and marked “SCMP-7” is a true and correct copy of the internet Westpac statement indicating my payment of $15,000.00 to the mortgage account on 20 January 2010.
118.2Payment of $5,000.00 interest to Pelly Trust in respect of the principal loan of $320,000.00.
119.To the best of my knowledge, my grandfather’s estate has been administered. I will not be receiving any more monies from his estate.”
It was in fact therefore the Westpac loan that was reduced by $15,000.00 as a payment by Mr Pelly. This was made possible because of his inheritance from his own grandfather’s estate.
At paragraph 118.2 I note the words used by the father:-
“118.2Payment of $5,000.00 interest to Pelly Trust in respect of the principal loan of $320,000.00.”
This is an unusual way to refer to an “interest” repayment. It does indicate to me that in fact the payment made was in reduction of the principal loan of $320,000.00. Even if my view in that regard is incorrect I note that the evidence contained in paragraph 118.2 is contradicted by the evidence in annexure “SCMP-10”. In that document it states on the second last line:-
“Repayment of $3,000.00 in January 2010”.
There was no adequate explanation in the evidence from the father to explain the discrepancy between paragraph 118.2 and annexure “SCMP-10”. It reiterates my view that the question of “interest” on the principal sum owed by Mr Pelly to Mr P was not a question that loomed large between the father and the son. There is not even any clear evidence as to how much interest has been paid.
Mr P had given evidence that he personally had been repaid $15,000.00 by his son when his son had inherited the money from the grandfather.
The specific paragraphs in the loan agreement which is comprised in exhibit “4” relating to interest on the monies advanced state:-
“2.You will not be required to pay us any interest for a period of at lease (sic) 3 years (although interest will accrue on the advance at monthly intervals at the same rate of interest as is payable from time to time under the first registered mortgage you are to give to Westpac Banking Corporation).”
There is no evidence that Mr P has ever sought a payment of interest from his son – even though, according to the terms of the loan, the legal obligation to pay the interest commenced as early as 2007. Therefore four years have elapsed since the obligation to pay interest under the loan arose – but still no interest has been paid. The amounts that have been repaid seem to be a part repayment of the principal sum.
I accept the evidence of Mr P that he did not register the loan by way of mortgage as he did not feel that it was necessary to do so. In the family circumstances which prevailed I consider this approach reasonable and not dissimilar to the approach taken by many families in a similar situation. There is no evidence that Mr P has ever personally calculated the amount of interest owing. In paragraph 41 of his Affidavit filed 24 February 2011 he notes that Mr Pelly has calculated interest of $126,171.41. Mr P states that he agrees with that calculation. The calculation of interest by Mr Pelly is referred to in paragraphs 129, 130 and 131 of his trial Affidavit. I also note annexure “SCMP-10”.
The calculation of interest has only been prepared by Mr Pelly for the purposes of these proceedings. As noted, Mr P has never personally calculated the interest to which he apparently would be entitled in accordance with the terms of the loan agreement.
I have reached the conclusion that it is not likely that Mr Pelly will ever have to repay to his father interest in respect of the monies advanced to assist with the purchase of the said real estate. In accordance with the statement of principle referred to by Nygh J in Af Petersens (supra) – the “interest” component allegedly owed by Mr Pelly to Mr P should not be taken into account in the matrimonial pool of assets in these property settlement proceedings[7].
[7] References in these Reasons for Judgment to monies owed by Mr Pelly to Mr P should be taken to include and indeed refer to money owed by Mr Pelly to [B] Pty Ltd as trustee for the Pelly Trust. Furthermore such references should (if applicable) take into account monies owed by Mr Pelly to any entity controlled by Mr P.
Therefore, there should be excluded from the pool the liability sought by the husband – namely “interest on loan from [B]” in the amount of $126,171.00. In the event that the court’s attention has not been specifically drawn to any particular asset or liability and further, if in respect of any such asset or liability there is no agreement between the parties – then the amount to be included in the pool shall be the lower amount (whether such amount has been put forward on behalf of the wife or the husband). In relation to credit cards I note that both parties have some credit card debt. Both parties should be entitled to include credit card debt as matrimonial liabilities in the pool. The husband’s Westpac Visa account should be included in the pool in the sum of $3,564.88. That is the highest amount conceded by the wife. Further, the husband’s Westpac Mastercard should be included in the pool as a liability in the sum of $16,523.94. That is the highest amount conceded by the wife. The Westpac mortgage in the husband’s name should be included in the pool in the sum of $116,963.99 – as that is the highest amount conceded by the wife. The wife’s two credit cards (Westpac and ANZ) should be included in the pool in the amounts of $2,746.13 and $5,053.63 respectively. I note those amounts are included in the wife’s Amended Outline of Case filed 21 February 2011. In accordance with my earlier finding that both parties should be entitled to include some credit card debt in the pool, I consider it appropriate for that credit card debt of the wife to be included. Those credit cards have been referred to in evidence by the wife in paragraph 114 of her Affidavit filed 28 January 2011.
The husband has contended that there should be included as a matrimonial liability an amount of $9,000.00 representing a loan from Mr P post separation. In these Reasons for Judgment I have made specific findings concerning loans from Mr P. It is only those amounts referred to specifically herein (and accepted by the court as loans) which ought to be included in the property pool. I do not accept that any so called “loan” from Mr P post separation in respect of expenses will need to be repaid by the husband to Mr P. The amount of $9,000.00 as a liability on the husband’s side ought therefore be excluded from the pool.
I have therefore concluded that the property pool in this case is as follows:-
ASSET
OWNER
VALUE
Property B, Queensland
Husband
E$485,000.00
Shares (as at 22 January 2011)
Husband
• 10 B Class shares in [U] Pty Ltd
$10.00
• 1,000 Westpac
$22,550.00
• 1,000 CBA
$51,660.00
• Proceeds of sale of Telstra shares pursuant to Order made 6 December 2010
$5,603.01
Shares (as at 22 January 2011)
Wife
• 1,000 [Q]
$2,470.00
• Proceeds of sale of Telstra shares pursuant to order made 6 December 2010
$5,603.01
2005 Toyota Hilux dual cab
Husband
$10,000.00
Holden VY II Commodore
Wife
E$5,000.00
Westpac One Main account
Husband
$218.87
Macquarie Cash Management account in the name of Mr Pelly
Husband
$2,356.94
Newcastle Permanent Savings account
Wife
$7.84
Macquarie Cash Management Trust
Wife
$12.37
Westpac Choice account
Wife
($1.00)
[Q] Staff Credit Union account number [omitted]
Wife
($333.11)
[Q] Staff Credit Union account number [omitted]
Wife
$1.00
[P] business
Husband
$10,953.68
• Westpac account (as at 22 January 2011) - $2,053.68
• Stock – E$1,000.00
• Tools – E$1,500.00
• Plant and equipment – E$1,000.00
• Accounts receivable – E$5,400.00
ADDBACKS
• Legal fees
Husband
$9,000.00
• Legal fees
Wife
$33,391.70
SUPERANNUATION
• [1] (as at 30 June 2010)
Husband
$31,806.74
• [2] (as at 30 June 2009)
Husband
$2,749.34
• [3] Eligible Rollover fund (as at 19 January 2011)
Wife
E$130,352.11
TOTAL ASSETS AND SUPERANNUATION
$808,457.14
LIABILITIES
OWNER
VALUE
Westpac mortgage (account no. [omitted])
Husband
($116,963.99)
Loan from [B] Pty Ltd [initials omitted] Pelly Trust
Husband
($320,000.00)
Westpac Visa account (account number [omitted]) (paid out by Mr P following separation)
Husband
E($3,564.88)
Westpac Mastercard (account number [omitted]) as at 27 January 2011
Husband
($16,523.94)
Westpac Credit Card (account number [omitted])
Wife
($2,746.13)
ANZ Credit Card (account number [omitted])
Wife
($5,053.63)
Money owed to childcare centre
Joint
($117.00)
Money owed to [S] School
Joint
($5,526.00)
Money owed to Ms K
Wife
($5,000.00)
Money owed to Ms N
Wife
($20,000.00)
TOTAL LIABILITIES
$495,495.57
NET POOL
$312,961.57
Contributions
When the parties first met the wife was a [occupation omitted] employed by [Q]. Her job entailed [omitted]. The husband was a [occupation omitted] for [omitted] on the Northern Beaches of Sydney.
The husband says at paragraph 70 of his affidavit:-
“FINANCIAL CONTRIBUTIONS AT COMMENCEMENT OF OUR RELATIONSHIP
70. To the best of my knowledge, I held the following assets at the date of cohabitation:
70.1 Share portfolio valued at approximately $100,000.00.
70.2 Subaru RX motor vehicle estimated value $20,000.00.
70.3 [omitted] Superannuation entitlements – estimated balance $8,000.00.
70.4 Personal belongings.”
I accept this evidence on behalf of the husband.
The wife’s affidavit at paragraph 117 sets out her initial contribution as follows:-
“117. At the commencement of my relationship with the Applicant I was employed as a [omitted] with [Q] and the income I earned as a [omitted] was $58,627.00. I was also receiving additional allowances of $23,654.00 bringing my total income to $82,858.00. I had the following assets:
(a) a Ford Laser motor vehicle;
(b) computer and other office equipment worth approximately $3,000.00;
(c) [Q] shares;
(d) [N] Limited shares;
(e) an interest in a superannuation fund valued approximately $51,951.93. …;
(f) savings of approximately $5,000.00;
(g) Furniture and household effects.”
I accept this evidence on behalf of the wife.
The parties lived together from early 2002 until May 2009.
I note the wife’s evidence contained in paragraphs 15 – 17 of her trial affidavit. In those paragraphs the wife has stated:-
“15. I continued to [occupation omitted] until 2 December 2002. At that stage I was about 4½ months pregnant with [X] and due to Union policy I was unable to continue to work as a [omitted] past this point in my pregnancy.
16.Between 2 December 2002 and 30 June 2007 I was either on maternity leave, annual leave, long service leave or training with [Q] such that:
(a) I took maternity leave from 3 December 2002 to 19 January 2004 (the first period of maternity leave). Whilst on maternity leave after having [X] I discovered that I was pregnant with [Y].
(b) I was still on the first period of maternity leave after the birth of [Y]. When that finished I took a further 40 weeks maternity leave (The second period of maternity leave). This was due to expire on 14 January 2005.
(c) Between 15 January 2005 and 24 March 2005 I took all of my annual leave that I had available to me;
(d) Between 4 April 2005 and 2 July 2005 I took long service leave that I had accrued.
(e) On 23 June 2005, during the time I was on long service leave, I discovered that I was more than 18 weeks pregnant with [Z].
(f) My maternity leave with [Z] started on 23 July 2005 (the third period of maternity leave). My maternity leave was to continue until 16 November 2007.
(g) Between 13 July 2005 and 22 July 2005 I attended a conversion course with [Q] so I could transfer from [omitted](international] work to [omitted] [domestic] work. The course was in Sydney and whilst I attended the course, [X], [Y] and I stayed with my family in Newcastle. I commuted between Newcastle and Sydney each day and my parents cared for [X] and [Y]. The Applicant remained on the Gold Coast.
(h) On 17 May 2006 I was offered employment on [omitted] work based out of Sydney. This work would have commenced at the time I finished the third period of maternity leave and I accepted this position but hoped for a closer position. In or around June 2007, prior to my maternity leave concluding I was offered part time [omitted] work out of Brisbane. By this stage it was evident to me that I could not rely on anyone on the Gold Coast, including the Applicant, to assist me with the children and on 30 June 2007 I was offered and accepted a redundancy payout from [Q].
17. Since 2 December 2002 my role has been mother and “wife”. My role as a Mother has continued since separation.”
I accept the wife’s evidence contained in these paragraphs.
I also accept the evidence of the husband contained in paragraph 76 of his affidavit. The husband states in that paragraph that the parties were substantially supported by Mr P during the relationship. Mr P caused $1,000 per month to be deposited into his son’s Westpac account. Furthermore, Mr P deposited $400 per fortnight into the parties joint account.
The husband did work during the relationship. Initially as a [occupation omitted] and subsequently as an employee in a [omitted] business before setting up his own [P] business.
The husband’s income was always relatively minor.
I accept the following evidence:-
YEAR
HUSBAND’S TAXABLE INCOME
2007
$34,000
2008
$35,000
2009
$37,000
2010
$19,899
It seems that the highest income earned by the husband during the relationship was approximately $42,000. He appears to have earned that level of income when he was the [occupation omitted].
From the time that [X] was born until the present the wife has been the primary carer for the children of the relationship. Indeed, this case is somewhat unusual in several respects. The wife maintains that the husband only provided a very small amount of help in caring for the children when the parties were together. I accept the wife’s evidence in this regard. I accept the wife’s evidence that she provided practically all of the homemaking contributions whilst the parties were together.
In 2011, [X] will turn eight (8) years of age. That therefore means that the mother has provided practically all of the contributions in relation to parenting for eight (8) years. The contributions made by the husband to the parenting of the children were minimal.
Since separation and since the preparation of the first family report, the husband has consistently sought more time with the children. But in terms of contributions to date – it is apparent that the wife has provided the vast majority of the parenting and home making contributions.
The husband worked during the relationship and I find that he contributed his income for the benefit of the family. His income was modest – as noted earlier, however, the husband’s income was supplemented by the financial contributions made to the parties by
Mr P. This enabled the parties to live comfortably as a family.
I do note that the husband spent approximately $24,000 over a two and a half year period at the “[omitted] Tavern”. He does say that, on occasions, the wife was with him. I find that the majority share of the money spent at the “[omitted] Tavern” was spent by the husband alone.
I note that in the property pool the wife’s superannuation has been included in the sum of $130,352.11.
The relationship was more than seven (7) years. It does not, in my opinion, fall into the “short relationship” category that would require the Court to look solely at direct contributions.
The issue is further complicated by the fact that in those seven (7) years the parties had three (3) children. I have already made findings in relation to contributions made for the care of those children.
Conclusions on contributions
The parties certainly packed a lot into their seven (7) years together. There were significant financial contributions made on the husband’s side – because of the generosity of Mr P. But, as noted, the wife made the overwhelming majority of contributions so far as parenting and homemaking was concerned. The wife has continued in the two (2) years that have passed since separation to provide the overwhelming contribution in that regard. I note that the husband is paying a very small amount of child support but has continued to pay the mortgage on the house where the wife lives with the children. Once again, that is with the assistance of Mr P.
Notwithstanding the large amount of financial contributions made on the husband’s side – I have concluded that the contributions based entitlements of the parties up to the date of the hearing should be assessed as 50/50.
Section 75(2) Factors
The wife essentially gave up her career with [Q] in order to raise the children. It may well be the case that she can eventually retrain and find employment. The wife certainly appears to be an intelligent and resourceful person.
The husband has earned less money post separation than he did while the parties were together. He indicated to the Court that he has been under stress since the separation.
The wife will have the primary care of the children. I do note that the arrangement will eventually become one whereby the children spend nine (9) nights per fortnight with the mother and five (5) nights per fortnight with the father. I note that the husband is willing to allow the wife to remain living in the former matrimonial home with the children for four more years.
From a financial perspective, the husband has a considerable advantage over the wife because of the fact that his own father has been so willing to provide ongoing funds to him to assist with day to day living. Upon the repayment to Mr P of $320,000 lent to enable Mr Pelly to purchase the properties – Mr P will have approximately $1,820,000 in savings and a house worth approximately $800,000. Mr P had assisted the husband financially for many years prior to the commencement of the relationship between the parties. As it has been seen, Mr P has been very generous in providing funds to his son and the parties during the relationship. Furthermore, since the relationship ended Mr P has continued to provide funds for the benefit of his son. On the balance of probabilities I find that Mr P will continue to make available funds to Mr Pelly to enable him to continue to pay for ongoing living expenses including accommodation costs and so on. The generosity of Mr P represents a significant financial resource that is available to the husband in this case. The wife has no such financial resource available to her.
To my mind the s.75(2) factors favour the wife. Mr Jordan of counsel submitted that it should be a 15% adjustment in favour of the wife in relation to s.75(2). This was the figure used whether or not the Court had found the smaller or larger pool. Mr Cooper, Solicitor, on behalf of the wife submitted also that there should be a 15% adjustment in favour of the wife. It is not clear whether Mr Cooper was confining his submission to the larger pool sought by the wife.
So valuable is the financial resource available to the husband (namely through the generosity of Mr P) that I have concluded that the s.75(2) adjustment in favour of the wife should be higher than either side has suggested. I have formed the view that there should be an adjustment in favour of the wife of 20%. In reaching this conclusion I have also noted that the children will live primarily with the wife.
Justice and Equity
On the pool as found – I am of the view that an order whereby the wife receives 70% of the net available assets and the husband receives 30% of the net available assets amounts to a just and equitable outcome in the circumstances.
The wife has superannuation in the amount of $130,352.11. I note that the husband has recommended that a splitting order be made in respect of the wife’s super. I agree with this approach. To my mind, it is appropriate in the circumstances of this case.
I will allow to the parties 21 days within which to forward orders to the Court reflecting the Reasons for Judgment.
I certify that the preceding one hundred and ninety-four (194) paragraphs are a true copy of the reasons for judgment of Howard FM
Date: 25 July 2011
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