PMM and DMM
[2004] FMCAfam 574
•28 October 2004
| PMM & DMM | [2004] FMCAfam 574 |
| FAMILY LAW – Children – contact – child aged 6 years expressing reluctance. FAMILY LAW – Property dispute – contributions – asset pool. |
| Applicant: | P M M |
| Respondent: | D M M |
| File No: | (P)PAM3942 of 2003 |
| Delivered on: | 28 October 2004 |
| Delivered at: | Parramatta |
| Hearing Dates: | 12 & 13 October 2004 |
| Judgment of: | Sexton FM |
REPRESENTATION
| Counsel for the Applicant: | Ms M Clifford |
| Solicitors for the Applicant: | Watts McCray |
| Solicitors for the Respondent: | Marsdens Law Group |
ORDERS
That the husband and the wife have joint responsibility for making decisions about the long term care, welfare and development of the children of the marriage Paul (not his real name) born in 1997 and Claire (not her real name) born in 2000.
That the children live with the wife.
That the wife have responsibility for making decisions about the day to day care of the children when they are in her care and the husband have responsibility the day to day care of the children when they are in his care.
That the husband have contact with the children as follows:
(a)From Friday 29 October 2004 at 5.30 p.m. until Saturday 30 October 2004 at 5.30 p.m. when the husband shall collect and deliver the children from the wife’s residence for the contact period.
(b)Every alternate weekend from 5.30 p.m. Friday until 5.30 p.m. Sunday [or Monday at 5.30 pm if a public holiday] commencing Friday 12 November 2004 and it is noted that the children will be cared for by the husband’s mother during any periods of the contact weekend when the husband is working.
(c)On Father’s Day from 9.30 a.m. until 5.30 p.m. each year, if a non-contact weekend.
(d)In the event Mother’s Day is a contact day pursuant to these Orders, then contact shall be suspended from 9.30am on that day.
(e)On Easter Day from 9 a.m. until 5.30 pm in 2005 and each alternate year thereafter.
(f)As and from the Christmas 2004 school holiday period, for one week during each school holiday period, by agreement between the parties and failing agreement, for the first week of term school holiday periods commencing in even years, the second week in such holiday periods commencing in odd years and for one week commencing 2 January each year.
(g)From 3.00pm Christmas Day until 5.00pm Boxing Day 2004 and each even year thereafter.
(h)From 5.00pm Christmas Eve until 3.00pm Christmas Day 2005 and each odd year thereafter.
(i)By telephone on two weeknights each week between 6.30 and 7.30 p.m., being Tuesday and Thursday nights unless otherwise agreed between the parties.
(j)At such other times as may be agreed between the parties.
That for the purposes of all contact pursuant to these Orders, the husband collect the children from the wife’s place of residence or the children’s sporting venue (if applicable) at the start of each contact period and return the children to wife’s residence at the end of each contact period.
That each parent inform the other of any change to his or her residential address not less than 21 days prior to such change occurring.
That each parent inform the other of any change to his or her contact telephone number within 2 days of such change occurring.
That each parent inform the other of any significant illness or injury suffered by the children or either of them whilst in that parent’s care.
That the wife authorise any school or pre-school attended by the children from time to time to provide the husband with copies of school reports, newsletters, circulars and school photographs as the husband may request and at his cost.
That both parties be restrained from denigrating or allowing any other person to denigrate the other, any member of the other’s family or any person with whom the other is in a relationship in the presence or hearing of the children or either of them.
Alternate weekend contact shall be suspended during school holiday periods at the end of Terms 1, 2 and 3 and re-commence on the first weekend after the end of the school holiday period if the children are with the husband in the first week of the holiday period, and on the second weekend after the end of the school holiday period if the children are with the husband in the second week of the school holiday period.
Alternate weekend contact shall not be suspended during Christmas holiday periods, except with the agreement of the parties, provided that the second weekend of the 7 day contact block in the Christmas school holiday period is treated as a contact weekend.
That the parties forthwith do all things necessary to authorise Watts McCray, solicitors to distribute the funds held on trust for the parties in a Controlled Monies Account, being account number 082-330-57-147-9756 with the National Australia Bank as follows:
(a)$142285.00 to the wife;
(b)The balance to the husband.
That other than as herein provided the husband and the wife each be declared the owner at law and in equity of all items of personalty including but not limited to proceeds of bank accounts, money, and personal effects presently in their respective possession and control.
That except as otherwise provided herein, the husband and the wife remain liable for any debts in their own name at the date of these Orders and in this respect shall indemnify, keep indemnified and hold harmless the other from any liability in relation thereto.
That in the event the husband or the wife refuses or neglects to comply with any of the Orders herein, the Registrar or Deputy Registrar of this Court at its Sydney Registry be appointed pursuant to Section 106A of the Act to execute, in the name of the husband or the wife as the case may be, all deeds and instruments necessary to give effect to the orders herein, or any of them, and do all acts and things necessary to give validity and operation to the said deeds and instruments.
The applications be otherwise dismissed and removed from the List of Cases waiting finalisation.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PARRAMATTA |
(P)PAM 3942 of 2003
| P M M |
Applicant
And
| D M M |
Respondent
REASONS FOR JUDGMENT
Applications
These are proceedings for final parenting and property orders. Residence is not in dispute but the husband asks for more contact with the two children of the marriage. There are competing applications for an adjustment of property interests between the parties.
The proceedings were commenced by the wife who filed an Application on 19 September 2003. The wife filed an Amended Application on 30 September 2004 upon which she relied at hearing. The husband filed a Response on 27 November 2003 and a further Response on 27 September 2004 on which he relied at hearing.
Background facts
The wife was born in Australia in 1970. She is 34 years old.
The husband was born in Australia in 1969. He is 35 years old.
The parties married on 11 August 1990.
The parties separated on 10 June 2003. The husband left the matrimonial home on 29 June 2003. The parties were divorced on 14 October 2004.
There are two children of the marriage, Paul born in 1997, aged 6 years and Claire, born in 2000, aged 4 years.
Paul is in Year 1 at the local Public School. Claire attends pre-school one day each week.
Since the parties separated, the children have been living with the wife at Fairfield in New South Wales. The husband has been living in Parramatta. He has had contact with the children each alternate Saturday [or Sunday] from 9.30 a.m. until 3.30 p.m.
There are no current orders.
Neither party has re-partnered.
The relevant law – parenting
Parenting orders arise in proceedings conducted under Part VII of the Family Law Act 1975. Section 60B sets out the objects of Part VII and the principles which underline those objects. They are subject to Section 65E which provides that a court must regard the best interests of the child as the paramount consideration. Section 60B(2)(a) emphasises the rights of a child to (i) know both parents and (ii) to be cared for by both parents. These rights apply whether the parties are married or separated. The right to know both parents has been recognised as a fundamental consideration and it is only in the most exceptional of circumstances that orders would interfere with that right.
Section 60B(2)(b) provides that children have a right of contact, on a regular basis, with both their parents and other people significant to their care, welfare and development. It recognises the desirability of contact. The word ‘regular’ implies that contact should be as frequent as is appropriate. In B and B; Family Law Reform Act 1995 (1997) 22 Fam LR 676 the Full Court of the Family Court said “it is now well accepted that in most cases meaningful contact by children with both their parents is important to their welfare both in the short and long term.” In considering how much contact should be ordered, the court must make the order which it considers to be in the best interests of the children.
In deciding the contact arrangements that will promote the best interests of a particular child, the court must consider the various matters set out in Section 68F(2) of the Act. Its subsections set out a list of matters the court must consider to the extent each subsection is relevant to the particular case. The matters that are to be taken into account under section 68F(2) are:
a)the wishes expressed by the children or either of them;
b)the nature of the relationship between each child and each parent;
c)the likely effect of any change in the children’s circumstances;
d)the practical difficulty and expense of children having contact with a parent, and whether that difficulty or expense will substantially affect the children’s right to maintain personal relations and direct contact with both parents on a regular basis;
e)the capacity of each parent or any other persons to provide for the needs of the children, including each child’s intellectual and emotional needs;
f)each child’s maturity, sex and background;
g)the need to protect each child from physical or psychological harm;
h)the attitude of the parties to the responsibilities of being a parent;
i)any family violence that may involve the children or a member of the children’s family;
(j)any family violence order that applies to the children or a member of the children’s family;
(k)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 children;
(l)any other fact or circumstance that the court thinks is relevant. This subsection ensures that the individual children’s circumstances in a particular case can be properly taken into account.
The issues – parenting
The issues in relation to the parenting aspect of this case are the amount of contact time the children should have with the husband, the timing of the introduction of any alteration to contact arrangements and whether or not the husband should be required to be present during contact periods.
Evidence – parenting and property
The wife relied on:
·Her Amended Application filed 30 September 2004;
·Her Affidavit sworn 29 September 2004 and her oral testimony;
·Her Financial Statement sworn 29 September 2004; and
·The affidavit of her mother, C F, sworn 30 September 2004 and her oral testimony.
The husband relied on:
·His Response filed 27 September 2004;
·His Affidavit sworn 27 September 2004 and his oral testimony;
·His Financial Statement sworn 27 September 2004; and
·The affidavit of his mother, M M, sworn 30 September 2004 and her oral testimony.
Mr Theo George prepared a Family Report dated 7 October 2004 which was in evidence.
Both parties tendered additional documents that became exhibits in the proceedings.
Evidence and findings – parenting
At the commencement of the hearing, counsel for the wife asked me not to order overnight contact for either child until February 2005 when Claire is due to start school. She asked that holiday contact not start until the July school holidays 2005. She said Paul, in particular, required a further period of time to adjust to the prospect of overnight contact with his father as he had told her on a number of occasions he did not want overnight contact.
The husband’s solicitor said the children should not suffer any further delay in having overnight contact. The husband’s position was supported by the Family Report prepared by Mr Theo George on
7 October 2004. The husband asked me to make the orders for alternate weekend contact and holiday contact sought in his Response on the basis the changed arrangement start immediately. The husband says he has suitable accommodation for the children in his two bedroom rented unit in Parramatta and it is well set up for them.
There were significant differences in the parties’ positions on what the husband has contributed by way of day to day care of the children since they were born. The wife holds the view that the husband has done very little. She says she gave up her job in 2001 because the husband refused to help her with Paul. He chose to pursue his own interests rather than share with her in the children’s care. The husband says he has always been very involved with the children, looking after Paul full time for the first twelve months of his life and then sharing the care of the children outside his working hours. I am not persuaded the husband did as little as the wife would have me believe although I am satisfied the wife took the greater share of responsibility for the day to day care of the children once the husband returned to work when Paul was about 12 months of age.
In relation to Paul, the wife agrees with the husband that she returned to work when Paul was very young. The husband was unemployed at the time and available to care for Paul day to day. Although the wife says she retained the major responsibility for Paul even while working, it is clear the wife spent most of her weekday time at work while Paul spent most of the week days in the sole care of his father during that
12-month period. I accept that the wife took Paul for medical check ups and immunisations and that she was vigilant in ensuring Paul’s needs were met while in his father’s care.
The wife says the husband’s mother, M M, looked after Paul from April or May 1999 until December 1999 while both parties worked. The husband and the husband’s mother said she looked after Paul from April 1999 until May 2000 and I accept that she did so at least until April 2000. The wife said she allowed this arrangement most reluctantly and on the insistence of the husband. From early 2000 the wife says she cared for Paul, taking him to day care on 3 days and looking after him herself on the other two days each week. The husband agrees that this was the arrangement from shortly after Claire’s birth in April 2000. Paul started school at the beginning of 2003.
In relation to Claire, the wife says she had full responsibility for her care from the time of her birth, with almost no assistance at all from the husband.
The wife gives the husband almost no marks for parenting either during the marriage or after separation. Even during the months when the husband was home full time with Paul, the wife does not accept he contributed in any significant way to Paul’s care. The totality of the husband’s parental contribution to Paul, according to the wife’s affidavit is that he took Paul to pre-school on a number of occasions after Claire was born and attended with her for Paul’s first day at school. In relation to his contribution to Claire’s care, she said the husband used to pick her up and cuddle her on his arrival home from work, but this was put in the context of an assertion that he favoured Claire over Paul.
The wife paints the husband as a selfish man who always chose to meet his own needs ahead of the needs of the children, or of her. The wife’s mother’s observations of the husband support the wife’s view that the husband did almost nothing with the children, and that he favoured Claire over Paul. The wife’s mother clearly had a very low opinion of the husband. The husband, by contrast, compliments the wife as a very good mother and carer of the children and acknowledges the importance of the close and loving relationship the children have with her. The husband’s mother did the same in her oral evidence.
I am troubled by the wife’s deeply negative attitude to the husband and cannot avoid the conclusion that her attitude has been communicated to the children, particularly to Paul. She was unable to concede in evidence that Paul loves his father. It was evident from the wife’s mother’s affidavit and oral evidence that she holds the same negative view. It seems most odd that the wife’s mother would refer to the husband as “Mr M” and herself as “Mrs F” in her email letter to the husband of 11 January 2004. [Ex H4]. I am concerned the wife has let her feelings for the husband get in the way of the children’s need for a continuing relationship with him. I am not satisfied that the wife has always put the children’s interests ahead of her own.
The wife seemed confused about what she wants for the children. On the one hand, she complains that since separation the husband has never telephoned the children and that he has not taken advantage of every contact period she offered. On the other hand, she had offered the husband very little contact since separation and seemed opposed to him having any more than a nominal role in their lives. The husband says by the time the parties separated, communication between them was very strained. He said he had difficulty trying to make arrangements with the wife for contact. There were times he was unable to contact her at all. The husband said the wife was not prepared to accommodate his Saturday night work and often refused contact at the times which best suited him. The husband says despite his requests, the wife did not let him see his children on Father’s Day.
In short, the husband said his wife dictated the terms of the contact and allowed him no more than 6 hours on alternate Saturdays (later Sundays) during the day. It appears for the most part the husband accepted the wife’s terms, although at times he expressed frustration at her refusal to be flexible. I have read the email letters between the parties [Ex H4] which are evidence of a degree of inflexibility on the wife’s part. They support my conclusion that the wife has at times lost sight of the children’s needs and their rights to a strong and continuing relationship with the husband.
The wife is opposed to the husband having overnight contact, at least in the immediate future. She says it is not what Paul wants, that the husband has no experience of caring for the children overnight, and that in any event the husband is unavailable on Saturday nights because of his music commitments. She also says in support of her position that the husband has been unreliable in relation to agreed contact arrangements since they have separated and on one occasion tried to run her down with his car while the children were present. The wife describes in detail this incident on 3 April 2004 when the parties argued at changeover. The wife felt very threatened by the husband’s words and actions and she reported the matter to the police. The husband denied he was ever threatening but did not deny there was an incident along the lines described by the wife. I am satisfied the husband behaved badly on this occasion, frustrated by the strict limits his wife was placing on his contact time.
The wife gives a number of examples in her affidavit evidence about Paul expressing disappointment about the husband’s lack of attention to him. She gives further examples of the negative remarks Paul has made to her about the husband. I accept the wife’s evidence that Paul has made these remarks. The wife also gives examples of incidents when she has observed Paul’s disappointment including the time the husband missed seeing Paul being presented with his certificate at school and the time he missed a soccer game he had promised to watch. I have no doubt these incidents occurred as described. It is clear that Paul has felt let down by the husband and that the husband hasn’t until very recently, had much insight into Paul’s feelings of disappointment. I have concerns about how both parties have handled this problem. There is nothing in the wife’s evidence to suggest she discussed the problem with the husband to try to resolve it. She instead seems to have used it to build her case against the husband so that his contact continues to be minimal.
Paul’s feelings about his father came to light in the interviews for the Family Report. Paul was reticent about leaving his mother in the reception area to accompany his father to the observation room and Mr George reported Paul exhibiting “higher levels of enthusiasm and happiness with his mother than with his father.” At the initial session, Paul barely communicated with his father, who allowed Claire to dominate. A short time later in the interview sessions, Mr George reported Paul conversing readily with his father “when the man attended solely to his son. Their conversation about Paul’s opinion encouraged Paul to excitedly discuss his ideas with his father.” On the second day of interviews, Paul told Mr George that although his father loved him, he did not love his father. In the presence of his father Paul was then courageous enough to confront his father calmly and clearly with these words “Daddy, I just don’t like you any more… Because you fighted with Mummy.” Mr George said the husband was shocked and distressed by Paul’s words being unaware he had been favouring Claire over Paul. This led to a session with the husband and Paul and to the husband apologising to Paul. Paul then said he had changed his mind and wanted to spend overnight with his father. Mr George described Paul’s behaviour as “courageous” and complimented the husband on responding “immediately and receptively”. On the other hand, Claire exhibited only enthusiasm for her father and there is no evidence that Claire would not benefit from much more time with her father. Mr George recommended alternate weekend contact from Friday at 5.30 p.m. until Sunday at 5.30 p.m. In his oral evidence, Mr George said that until Paul had the talk with his father, overnight contact represented emotional pain for him because he felt rejected by his father. After the talk, he decided to risk pain and have a go. Mr George was of the opinion that Paul wanted a lot more time with his father to enjoy himself and test him out, and felt he was capable of looking after his interests in this regard. Mr George saw no benefit in delay in commencing overnight contact or in restricting contact time. In his view, if Paul didn’t have the chance of overnight contact now, he would feel let down, as his promise would not be fulfilled. The wife said Paul had told her after the Family Report interviews that he did not want overnight contact with his father. Mr George agreed with the husband’s legal representative that one possible reason for this comment from Paul was his loyalty to his mother. Mr George added that without further talking with Paul, he wasn’t prepared to comment further.
The husband impressed me as a father who very much loved his children and wanted the best for them but was unsure how to achieve this. I accept the wife’s evidence that the husband has not behaved appropriately at times which in part, has led to the children, especially Paul, lacking confidence in him. The wife has wanted the husband to have only very limited contact and it is unfortunate for the children that the husband hasn’t pressed for more contact from the time of separation. I have concluded the husband lacks practice at managing the children and that his parenting skills are very likely to improve as he has more time with them.
The question of whether the husband should spend the whole of his contact weekends with the children was a significant issue in the case. The wife said the husband should give up musical performances on contact weekends and spend the whole of the weekend with the children. The husband is a professional musician and has worked many Saturday nights during the course of the marriage and since separation. The parties disagreed about how often the husband works on Saturday nights but I am satisfied the husband has performed at music events and intends to continue to perform on the majority of Saturday nights. This will mean him leaving the children in the early evening on Saturdays and returning late Saturday night or very early Sunday morning. The husband proposes that his mother cares for the children in her home at Wollongong while he is at work and that he spend the night and every contact Sunday with the children with his extended family at Wollongong.
The husband’s mother, M M, impressed me as a witness. It was obvious she loves Paul and Claire and has their interests at heart. She was forthright and frank about her present feelings of anger and disappointment towards the wife, very evident in her letter to the wife of 18 December 2003 [Ex W4]. She also acknowledged the wife’s excellent skills as a mother and the strength of the relationship between the wife and the children and I am confident she will do nothing to undermine that relationship. M M looked after Paul full time for 12 months when he was only 12 months old and has been a regular babysitter for both children since then. I have no doubt that M M has been a loving and generous grandmother to Paul and Claire, and that she is genuine in her wish to facilitate their happiness in any way she can. M M has offered to look after the children, preferably at her home in Wollongong but if necessary at the husband’s home in Parramatta, on any contact Saturday night when the husband is working. This would mean the children would also spend time with the husband’s siblings. As long as the husband takes heed of what he has been told by Mr George and spends solid periods of time alone with the children during contact, I am completely satisfied the arrangement proposed by the husband for weekend contact will work very well for the children.
There is an obvious abundance of love for Paul and Claire in both parent’s families and that love should be available to them. I am satisfied that the orders I have made for their care will be in their best interests in both the short and long term.
The relevant law – property
Section 79 of the Family Law Act defines the Court’s powers in determining applications for property settlement. Section 79(2) provides that:
“The Court shall not make an Order under this Section unless it is satisfied that, in all the circumstances, it is just and equitable to make the Order.”
Section 79(4) sets out the matters the Court must take into account when considering what orders should be made for the alteration of the interest of the parties in property. Those matters include:
a)The financial and non-financial contributions made directly or indirectly by or on behalf of each party or by a child to the acquisition, conservation or improvement of any property of the parties;
b)The contribution made by a party to the welfare of the family including any contribution made in the capacity of homemaker or parent;
c)The effect of any proposed order upon the earning capacity of either party;
d)The matters referred to in sub-section 75(2) as far as they are relevant;
e)Any other order made under the Family Law Act affecting a party to the marriage or a child of the marriage; and
f)Any child support payable.
The approach to the determination of an application under section 79 is well established by authority (In the Marriage of Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335; In the Marriage of Clauson (1995) FLC 92-595). The process involves four steps. Firstly, identifying the property, liabilities and financial resources of the parties at the time of the hearing. Secondly, evaluating the contributions made by the parties as defined in section 79(4)(a) to (c). This is essentially an exercise in looking back in time from the date of hearing, taking into account the effect of any proposed order upon the earning capacity of either party. Thirdly, evaluating the relevant matters contained in section 75(2), which is essentially an exercise in looking forward in time from the date of hearing. The court must also take into account any other orders already made under the Act and child support already provided or liable to be provided in the future for the children of the marriage. Fourthly, the court must be satisfied in all the circumstances that it is just and equitable to make the orders [Section 79(2)]. It is the justice and equity of the actual orders that the court must consider. Russell v Russell (1999) FLC 92-877.
Issues – property
The issues in the property aspect of this case are whether particular debts should be included in the net asset pool of the parties to be divided between them, and what percentage of that asset pool each party should receive.
Evidence and findings – property
In relation to Step 1: Identifying the assets and liabilities of the parties.
The parties reached agreement as to the value of most assets. The items in contention are those marked in bold and italicised. I set them out as follows:
| Assets as at the date of hearing | $ |
| Proceeds of sale of home | 200,050.00 |
| Wife’s bank account | 280.00 |
| Wife’s Toyota | 17,000.00 |
| Wife’s household effects | 1,200.00 |
| Wife’s superannuation (total) | 18,680.00 |
| Husband’s bank account | 100.00 |
| Husband’s 1991 Honda | 1,000.00 |
| Husband’s household contents | 10,000.00 |
| Husband’s musical instruments | 4,000.00 |
| Husband’s superannuation | 7,400.00 |
| Add back to husband’s assets | 1,100.00 |
| Wife’s visa card | (551.00) |
| Wife’s MasterCard | (1,436.00) |
| Wife’s debt to her mother | (18,364.00) |
| 1996 Telstra bill | (653.00) |
| Family Assistance Debt | (2,743.00) |
| Husband’s tax assessment | (4,000.00) |
| Husband’s ANZ personal loan | (10,299.00) |
| Husband’s visa card debt | (10,971.00) |
Both parties submitted a memorandum of legal costs at my request and I invited both parties to take costs into account in relation to the net asset pool of the parties. However, both parties asked me to ignore costs in my assessment of the pool and I have done as requested. No account has therefore been taken of costs paid or anticipated by either party.
Husband’s household contents: The husband deposed to a value of his household contents in his Financial Statement sworn 23 September 2004 of $10,000.00. As there was no other evidence before me of value, I gave the husband the opportunity to explain how he had arrived at this figure. He said he estimated the value on the basis of the cost of replacement of his household contents. I accept the submission of the solicitor for the husband that to leave the figure in the pool at $10,000.00 calculated on replacement value would be unfair to the husband. I have therefore decided to take out household contents for both parties in identifying the net asset pool to be divided between the parties.
Telstra debt: There is no dispute between the parties that there exists an outstanding debt to Telstra in the sum of $653.00 from 1996. The husband’s solicitor submitted that this debt should not be included as the limitation period for suing on the debt had long passed. He relied on the evidence of the wife that she had never been sued nor received any correspondence in relation to the debt. I accept this submission and have excluded this debt from the net asset pool.
Add back to husband’s assets: Counsel for the wife submitted I should nominally add back to the husband’s share of the assets, the sum of $1100.00. This was the difference between the sale price of the Falcon [$1900.00] and the sum he used to purchase the Toyota vehicle. [$800.00]. The husband’s solicitor submitted that if I were to accept this submission, fairness would demand that I also add back on the wife’s side the sum of at least $350.00 being the amount she received for the car. I am not satisfied that I should do this. I have excluded the $1100.00 from the pool.
Husband’s tax assessment: The husband included a debt of $4,000.00 in his Financial Statement sworn 23 September 2004. Under cross examination by counsel for the wife, he was unable to provide any basis for the inclusion of this debt and had no documents to verify such a debt. I am not satisfied such a debt exists and have excluded it from the net asset pool of the parties.
Husband’s personal loan to ANZ Bank and husband’s Visa card debt to ANZ Bank: In May 2001 the husband borrowed $13,000.00 [Ex H2] from the ANZ Bank to purchase a Holden Rodeo utility for $12,150.00 to run a courier business. He sub-contracted to another Courier company. At around the same time the husband obtained a Visa credit card from ANZ to assist with anticipated business and family expenses. The wife says she was not consulted about the purchase of the utility or the credit card, nor did the husband discuss the business with her. The husband denies the wife’s assertion. The husband ran the business for 12 months and it was unprofitable. I am satisfied the husband tried to make the business operate profitably and certainly did not try to lose money. However, the result was that at the end of the 12 month period the parties had a debt to ANZ Bank for the utility loan and an ANZ visa card debt. The wife contends there should now be some accounting in her favour because she didn’t support the business venture. She wants the two loans excluded from the net asset pool. However, this was not a business for the husband alone. Had it been profitable the wife would properly have wanted to share in the profits. In the same way, she must share in the losses. In cross examination, the wife conceded she had no reason to assume the funds from the loans were not used for the benefit of the family. She just didn’t know exactly how they had been spent. I have decided there is no basis for excluding these debts from the net assets of the parties. Counsel for the wife said if these debts are included in the pool, the wife’s contributions must increase. In the circumstances of this case, the fact that the husband was not able to make a success of this attempt to make money from a courier business should not be taken into account to the advantage of the wife.
I therefore find the nett asset pool of the parties to be:
| Nett Asset Pool as at the date of hearing | $ |
| Proceeds of sale of home | 200,050.00 |
| Wife’s bank account | 280.00 |
| Wife’s Toyota | 17,000.00 |
| Wife’s superannuation (total) | 18,680.00 |
| Husband’s bank account | 100.00 |
| Husband’s 1991 Honda | 1,000.00 |
| Husband’s musical instruments | 4,000.00 |
| Husband’s superannuation | 7,400.00 |
| Wife’s visa card | (551.00) |
| Wife’s MasterCard | (1,436.00) |
| Wife’s debt to her mother | (18,364.00) |
| Family Assistance Debt | (2,743.00) |
| Husband’s ANZ personal loan | (10,299.00) |
| Husband’s visa card debt | (10,971.00) |
| Total | $204,146.00 |
In relation to Step 2: assessing the contributions of each party.
The parties lived together for 13 years. I accept the wife’s assertion that the parties did not talk much about their financial position nor ask many questions of each other about financial issues. Neither fully trusted the other when it came to financial matters and both said in evidence at different times, that he or she did not accept what the other said about a particular financial event. However, ignorance of a financial transaction does not mean that transaction should somehow be deducted from the ignorant party’s entitlement in a family law dispute about property.
At the date of marriage the wife had the benefit of an inheritance of $14,000.00 from her father which she received by way of instalments from her mother, who had borrowed the inheritance money from her. It is not disputed that the wife contributed her inheritance to the parties’ expenses. However, at around that time the parties were defrauded by the wife’s aunt which resulted in both parties declaring bankruptcy in the early part of their marriage. The parties therefore had a difficult start financially through no fault of their own and there was no obvious benefit to the parties gained from the wife’s inheritance. The Full Court in Pierce v Pierce (1999) FLC 92 – 844 at page 85, 873 said as follows:
It is necessary to weight the initial contributions by a party with all other relevant contributions of both the husband and the wife. In considering the weight to be attached to the initial contribution…regard must be had to the use made by the parties of that contribution.
In 1997 the wife’s mother gave the parties an interest free loan for
5 years to enable them to purchase a property in joint names at Auburn. The property had belonged to the wife’s mother and her husband. The wife’s mother and husband moved from their home in Auburn and bought a villa at Sefton in their names and the names of the parties. The wife’s mother’s husband died just before settlement so the Sefton property was owned by the parties and the wife’s mother. The three had borrowed the monies for the purchase by way of mortgage on the Sefton property and the parties repaid one half the mortgage repayments until the Auburn property was transferred to them in August 1998. This amounted to about $16,000.00. In addition, the parties paid the utility expenses on the Auburn property. The parties then paid $300,000.00 for the Auburn property, borrowing the funds for the purchase from the wife’s mother by way of mortgage to her. The terms of the mortgage provided for no interest to be repaid, unless the parties defaulted. In the case of default the parties were to pay interest of 9% per annum. The wife’s mother also refunded the parties $4,000.00 of the monies paid into the mortgage, which they contributed to the costs of stamp duty. The wife borrowed the necessary balance from the Punchbowl Credit Union. The parties transferred their interest in the Sefton property to the wife’s mother for no payment. They did not receive any rent for their share of the property. However, as the parties agree they had no chance of borrowing from an external source at that time, this arrangement gave the parties the chance to own the property at Auburn which has since been sold. The net proceeds of sale of that property are the bulk of the parties’ asset pool to be divided and the wife is given credit for this contribution.
Apart from a few months, the wife was in paid employment during the marriage. From August 1995 until January 2003, she worked for a screen printing business owned and operated by her mother. From May 2003 until February 2004 the wife again worked for the same business one day a week. The wife contributed her income from that business towards the expenses of the family. From May 2000 she was able to do her work from home, which enabled the wife to return to work shortly after Claire was born. In her affidavit, the wife differentiated between the income she earned and the income earned by the husband. She also differentiated between expenses paid for the benefit of the husband alone, and family expenses. She says she met the commitments she had agreed with the husband to meet, but the husband did not meet the commitments he was supposed to meet. The wife asserted that his failure to meet these expenses left the parties with utility debts after separation. The wife says the husband defaulted on his repayments to the Credit Union which resulted in the Credit Union taking legal action against the parties. In February 2002, the wife’s mother discharged the debt and the parties increased their loan to the wife’s mother and signed a variation of mortgage. The wife had the mortgage repayments to her mother deducted from the salary she received from her mother for her work in the screen printing business. The wife continued to make the mortgage repayments from her salary, at a reduced rate after the date of separation until February 2004. It is the wife’s view that the husband has not been reliable or responsible with money and has chosen to meet personal expenses for himself while failing to meet necessary expenses for the family. She infers the husband was extravagant, even wasteful while she was frugal. I accept the wife was careful with money. Given the limited financial resources of the parties, I am not satisfied the evidence supports that the husband was wasteful.
In February 2004 the wife advised the husband through their legal representatives, that she was moving from the Auburn property because she was unable to afford the expenses there. The Auburn property was subsequently sold. Settlement took place in June 2004. At settlement the parties discharged the whole of their debt to the wife’s mother which included interest at 9% accrued since May 2003 when the parties defaulted on the mortgage repayments as well as a number of expenses the wife’s mother had apparently met on the parties’ behalf in relation to the Auburn property.
The husband contended that he did not know the parties were in arrears and the wife’s mother was charging interest. He argued that the amount paid to the wife’s mother at settlement of the sale was excessive and he was not satisfied it was the correct amount owed. I think it likely the husband was not aware of the loan arrangements at that time but I am not satisfied his ignorance was as a result of anything said or done by the wife or the wife’s mother. The husband had left the mortgage repayments to the wife both during the marriage and after separation. He could have accessed the receipt book if he had wanted to. He could have made inquiries when he received the letter from the wife’s solicitors in February 2004 about he wife moving out. He had a further missed opportunity to check the figures at the time of settlement of the sale of Auburn when he was shown the draft settlement sheet. He did not do so.
The husband’s evidence of his employment during the marriage was imprecise and unsatisfactory. He said he was substantially employed in the delivery business during most of the marriage, apart from the 12 months he looked after Paul in 1998. He agreed he had short periods of unemployment between jobs. He did not provide evidence of income for most of the marriage period. The wife said she did not know what the husband earned during the marriage, but that he had significant periods of unemployment and was in and out of work frequently. The wife had limited knowledge of the income the husband earned as a professional musician. She did not think he used all his income for the benefit of the family.
I have no doubt that the husband understated his income on his Financial Statement of September 2004, in relation to his present salary from his employment with Brad Garlick Ford and in relation to his income from his music business. The husband did not produce taxation returns. He said in evidence he had endeavoured to average his income over a year, but it was clear from the documents produced by him at the request of counsel for the wife, that his income was considerably higher than the income he deposed to [Ex H5 and W5]. He denied trying to hide income from his wife when omitting engagement details from his website at the end of 2003. I accept that on the basis of the invoices of his music business for the period provided, the husband has earned about $18,000.00 in addition to his salary in the last 12 months. That was not disclosed in his financial statement.
The husband conceded that the income details in his Financial Statement were understated, and asked me to accept the errors were not deliberate but rather the result of his inefficient and inadequate book-keeping practices. I am satisfied the husband prepared his Financial Statement in these proceedings carelessly and without proper regard to the truth. This is in breach of the obligations of which he was clearly aware, to frankly and fully disclose his financial position for these proceedings. It is not however, possible to conclude that the whole of the income he did receive was not contributed to the benefit of the family during the marriage. Since separation however, the position is not the same. I am satisfied the husband’s liability for child support has been assessed on the basis of a lower income than the actual income he has received. This should be rectified immediately. I expect when his true income is known to the Child Support Agency, the husband’s liability for child support will increase.
The parties received some assistance from the husband’s mother. She borrowed $3,000.00 from AGC to lend them to purchase a Nissan Skyline[Ex H6] and also purchased furniture for the parties. I accept the husband’s mother’s evidence, disputed by the wife, that she bought a number of items of furniture and other items for the children, assisted with the decorating of the Auburn property and paid some bills on their behalf when necessary. I also take into account that the parties lived with the husband’s parents for a period rent free. The wife says 4-6 months; the husband says 12 months.
The wife says she was responsible for the household chores, and the husband gave little assistance apart from washing the car. The wife says she did all the external and internal maintenance. The husband disputes the wife’s assertion and says he was actively involved in assisting with maintenance and household tasks. I am not satisfied there is any basis for concluding the parties’ non financial contributions are other than approximately equal.
The orders that I propose making in this matter will not affect the earning capacity of either party to these proceedings.
Taking all these matters into consideration leads me to the view that, as a result of their respective contributions, the assets of the parties should be apportioned 62.5% to the wife and 37.5% to the husband.
In relation to Step 3: A consideration of ‘future factors’
I have considered each of the factors listed in section 75(2) of the Act.
·The husband is 35 years of age. The wife is 34 years of age. Both are in good health.
·The wife is presently not working in paid employment. The husband has permanent employment with the prospect of a promotion in the foreseeable future. The wife has the continuing responsibility for the care of two young children. In addition, the husband receives income from his work as a professional musician. Although the wife has worked during most of the marriage, and plans to return to work when her teacher’s aide course is completed, it is clear the husband has a higher earning capacity and as a result, there should be an adjustment in favour of the wife.
·Neither of the parties has commitments other than those necessary to support himself or herself and their child. Neither party is cohabiting with another person.
I agree with counsel for the wife that had the husband fully disclosed his income from his music company music he would have been paying more child support. He is presently in arrears in the sum of about $1,700.00 but these arrears will be recovered by way of garnishee of the husband’s income. As the husband is in regular employment, the wife will be able to rely on regular payments in child support from the husband.
The husband’s mother contributed by caring for the parties’ son Paul and babysitting for the parties at no cost to them. This is a factor I have taken into account under section 75(2)(o).
The wife has continued to receive significant financial assistance from her mother since the date of separation. The wife’s mother has bought the wife a car, provided her with a home at less than market rent, and paid all her legal fees. There is nothing in the evidence to suggest the wife’s mother will not continue to provide some level of assistance of the kind already provided in the future. This is a factor I have taken into account under section 75(2)(o).
It is my view, that a just and equitable result requires the wife to receive by way of adjustment in her favour a further fourteen per cent of the matrimonial assets.
The wife is to receive 76% of the nett assets of the parties, which equals $155,151.00. The wife already has:
| Wife’s Position | $ |
| Wife’s bank account | 280.00 |
| Wife’s Toyota | 17,000.00 |
| Wife’s superannuation (total) | 18,680.00 |
| Wife’s visa card | (551.00) |
| Wife’s MasterCard | (1,436.00) |
| Wife’s debt to her mother | (18,364.00) |
| Family Assistance Debt | (2743.00) |
| Total | 12, 866.00 |
She therefore needs the sum of $142,285.00 from the nett proceeds of sale of the home to receive 76% of the pool.
The husband will receive $57,765.00 from the nett proceeds of the sale of the home in addition to the assets he holds and he will be responsible for repayment of the ANZ Bank personal loan and the ANZ Visa card debt.
| Husband’s Position | $ |
| Husband’s bank account | 100.00 |
| Husband’s 1991 Honda | 1,000.00 |
| Husband’s musical instruments | 4,000.00 |
| Husband’s superannuation | 7,400.00 |
| Husband’s ANZ personal loan | (10,299.00) |
| Husband’s visa card debt | (10,971.00) |
I am satisfied that in all the circumstances the Orders set out at the commencement, these Reasons are just and equitable.
I certify that the preceding sixty-eight (68) paragraphs are a true copy of the reasons for judgment of Sexton FM.
Associate: Collette McFawn
Date: 28 October 2004
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