REED & REED
[2018] FCCA 3158
•6 November 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| REED & REED | [2018] FCCA 3158 |
| Catchwords: FAMILY LAW – Parenting and property – father sought equal time - significant and substantial time in children’s best interest – competing values of the former matrimonial home – division of matrimonial property – husband refused to acknowledge wife’s clear 75(2) factors. |
| Legislation: Family Law Act 1975, ss.60CC, 72, 75(2) |
| Applicant: | MR REED |
| Respondent: | MS REED |
| File Number: | SYC 4804 of 2015 |
| Judgment of: | Judge Henderson |
| Hearing dates: | 7, 8, 9 August 2018 |
| Date of Last Submission: | 9 August 2018 |
| Delivered at: | Sydney |
| Delivered on: | 6 November 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Lethbridge SC |
| Solicitors for the Applicant: | Harris Friedman Lawyers |
| Counsel for the Respondent: | Mr Campton SC |
| Solicitors for the Respondent: | Newnhams Solicitors |
ORDERS
The parties have equal shared parental responsibility for the children [X] born 2007 and [Y] born 2010.
The children live with the mother.
[Y] spend time with the father as follows:
(a)In week 1: From after school Thursday until before school Monday;
(b)In week 2: From after school Thursday until before school Friday.
[X] spend time with the father as follows:
(a)In week 1: From after school Friday until before school Monday;
(b)In week 2: From after school Thursday until before school Friday.
[X] may elect to spend from after school Thursday until before school Monday with her father in week 1 if she so chooses.
In the 2018 Christmas holidays, the children spend time with each parent for two weeks, on a rotating basis being with the mother for the first period, the father the second period and continuing thereafter until the Friday before school resumes when the children are to be returned to their mother by 6.pm Friday if in their father’s care.
Thereafter and commencing in 2019 the child spend one half of all school holidays with each parent, being the first half with the father and the second half with the mother in odd numbered years, and the first half with the mother and the second half with the father in even numbered years.
For the purposes of the term 1, 2 and 3 school holidays, school holidays are defined to commence at the last day of term at 6.00pm and conclude 6.00 pm the Friday immediately preceding the first day of term.
The children spend time with the father from 9am to 5pm on Father’s Day if they are not otherwise in his care.
The children spend time with the mother from 9am to 5pm on Mother’s Day if they are not otherwise in her care.
The children spend time with the parent they are not living with on their birthday at times agreed between and failing agreement, the children from 3:30pm until 8:00pm.
If changeover is not to occur on a school day or within school hours the father shall be responsible for collecting the children from the mother’s residence at the commencement of his time and the mother shall be responsible for collecting the children from the father’s residence at the conclusion of the father’s time.
If either parent proposes to travel overseas for a holiday with the children they shall provide to the other parent not less than 42 days prior to the commencement date of the proposed travel a full itinerary to include:
(a)The name of the airline/s and flight number/s, or ship and details, or other mode of transport;
(b)The departure and return dates and times;
(c)The country/ies to which the child will be travelling and/or passing through;
(d)The dates on which the child will arrive and depart each country;
(e)A landline telephone number (if possible) and mobile telephone number and contact addresses at which the child will be in each country;
(f)Confirmation of the payment of travel insurance covering the child for the full period of the overseas travel including a copy of the insurance policy;
(g)The travelling parent ensure that the children communicate with the non-travelling parent by telephone or skype each third night and on any occasion the child request to communicate; and
(h)The parents will travel within school holiday periods, unless otherwise agreed.
The mother and the father are restrained from denigrating the other parent in the presence or hearing of a child or both children.
Both parties be at liberty to attend all of the children’s extra-curricular activities, concerts, carnivals and all school events.
Both parties do all acts and things in order to ensure the children have valid passports at all times and meet the costs of same equally.
The mother retain the children’s passports and provide them to the father not less than 7 days prior to the travel, with the father to return the passports to the mother within 7 days of returning.
Both parents may holiday with the children within Australia and need only to inform the other parent where they are traveling to and ensure a mobile number is provided 7 days before that holiday.
Within 90 days from the date of these Orders the husband shall transfer all his right, title and interest in the property situate at and known as Property A in the state of New South Wales (“the Property A property”) to the wife.
Simultaneous with the husband’s compliance with Order 19 herein, the wife shall comply with the following Orders:
(a)Discharge the mortgage secured over the Property A property and discharge the husband’s liability for that mortgage; and
(b)Pay to the husband the total sum of $452,336 by way of property settlement adjustment.
(c)Sign any necessary document to provide that the party’s interest in the property at Property B be the husband’s solely.
(d)Simultaneously with the wife’s compliance with order 20 the husband shall discharge all and any liability the wife has in respect of the Property B property including but not limited to re-financing any mortgage.
Should the wife fail to comply with Order 20 herein, the parties shall do all acts and things and sign all documents necessary to effect a sale of the Property A property in the following manner and priority:
(a)List the Property A property for sale by private treaty with such agent as the parties may agree to appoint and in default of such agreement with such agent as nominated by the Real Estate Institute of New South Wales or his or her nominee, the cost of such appointment to be borne equally by the parties as and when they fall due;
(b)The sale price at which the Property A property shall be listed shall be as mutually agreed between the parties, or in the absence of agreement, shall be a price nominated by a valuer appointed by the Real Estate Institute of New South Wales or his or her nominee, the costs of such appointment to be borne equally by the parties as and when they fall due;
(c)Should the Property A property fail to sell by private treaty within 6 months from the date of listing then the parties shall immediately list the Property A property for sale by public auction with such agent as the parties may agree to appoint and in default of such agreement with such agent as nominated by the Real Estate Institute of New South Wales or his or her nominee, the costs of such appointment to be borne equally by the parties as and when they fall due;
(d)The reserve price at which the Property A property shall be listed shall be as mutually agreed between the parties, or in the absence of agreement, shall be the price nominated by a valuer appointed by the Real Estate Institute of New South Wales or his or her nominee, the costs of such appointment to be borne equally by the parties as and when they fall due;
(e)Upon sale of the Property A property, the parties shall do all acts and things and sign all documents necessary to disburse the proceeds of sale in the following manner and priority:
(i)In payment of the agent’s commission, advertising expenses, legal expenses of the sale and any other costs associated with the sale;
(ii)In payment of the three mortgages secured over the property by Bank 1;
(iii)23% of the then balance to the husband;
(iv)The remainder to the wife.
The items contained in Court Exhibit 7 be returned to the husband as soon as possible.
The items sought by the wife in Wife’s Exhibit 9 remain with the wife.
Subject to the Orders contained herein, the parties shall each respectively retain all interest in and entitlement to:
(a)All personal property now in his/her respective ownership, possession or control;
(b)All shares, debentures, unites in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively;
(c)All interests in life insurance policies and superannuation funds standing in his/her sole name respectively;
(d)All interests in any business to which either party has an interest in; and
(e)All other property (including chose’s in action) of whatsoever nature and kind in the possession of either party at the date of these Orders.
In default of the parties or either of them doing all acts and things and executing all such documents as are necessary to give effect to these Orders, a Registrar of this Court is appointed pursuant to section 106A of the Act to execute all such documents in the name of the party in default and do all such acts and things necessary to give validity and operation to the said orders.
IT IS NOTED that publication of this judgment under the pseudonym Reed & Reed is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 4804 of 2015
| MR REED |
Applicant
And
| MS REED |
Respondent
REASONS FOR JUDGMENT
The matter of Reed was a three-day hearing in relation to property and parenting, commenced to be heard on Tuesday, 7 August 2018 and finalised on 9 August 2018. Mr Lethbridge, Senior Counsel, represented the applicant husband, and Mr Campton, Senior Counsel, represented the respondent wife.
The issues in the matter were the determination of the regime of time the children should spend with their father. He has sought since the commencement of these proceedings in 2015, that his children spend an equal time arrangement with him and their mother.
In final submissions, Mr Lethbridge submitted that the evidence before the Court would be contraindicated to the Court being in a position to make an equal time order. There was no issue other than that the children should spend substantial and significant time with their father. The question was the regime of time during the school week and when a period of time greater than one week’s holidays would occur between the children and their parents.
The wife sought week about holiday arrangement into the future and 4 nights a fortnight with their father. The husband sought 6 nights a fortnight time and equal school holiday time.
In relation to the property issues, there was a contest as to value. The Court had initially made orders for a joint expert Mr B of (Valuers). When the matter came on for hearing before a visiting Judge in May 2018, the Judge permitted the wife to obtain the services of another valuer as the wife had disputed the value of the property assessed by Mr B at $1.95 million.
The wife retained the services of Mr R. Mr R’s valuation came in at $1.75 a difference of $200,000. One may have reasonably believed that the parties would have been able to agree in relation to the value of the home, however consistent with their conduct and behaviour towards each other, certainly since separation, they were unable to do so.
The visiting Judge additionally directed that the valuer’s confer and produce a report setting out those parts of their respective valuation with which they agreed and those they did not. These order were complied with and the valuers could not bridge the gap.
Over the husband’s objection I permitted the wife to rely upon Mr R’s report on these facts given my findings that:
a)Firstly, Judge Harland had given the wife liberty to explore this issue and upon so doing a material fact in issue arose.
b)Secondly, it was clear there was a contest in value between 2 two qualified experts which they could not bridge.
c)Thirdly, it was an imperative that this issue was resolved by the court otherwise the matter was in a hiatus and the Court could not do justice and equity between the parties.
The value of the home for the purpose of this hearing is an important issue for the Court to determine as the wife wishes to buy out the husband’s interest in the property. The husband is agreeable to this provided he receives what he asserts is his entitlement to his share of the matrimonial property at the correct value.
The husband and wife ultimately agreed that they had made an equal contribution their matrimonial assets up to separation. The wife asserted post-separation, her contribution was greater than the husband’s due to her care of the children and maintenance of the home and funding of their extensive extra-curricular activities and contended for an adjustment of 5%. The wife argued a further adjustment of 10% to her having regard to her needs under section 75(2) of the Act[1] giving her an entitlement to 65% of the matrimonial property.
[1] Family Law Act 1975 (Cth), s 75(2).
The husband contended for an equal division of the matrimonial property.
The Evidence
For the husband:
a)Amended application filed 24 April 2018;
b)Affidavits of 29 March 2018 and 24 May 2018; and
c)Financial statement filed 11 April 2018.
For the wife:
a)Amended response filed 30 October 2015
b)Financial statement filed 10 April 2018; The wife’s income is $20,800 per annum and this is not contested by the husband; and
c)Affidavit and report by Mr Reed, valuer, dated 30 April 2018.
Wife’s Exhibits
Exhibit 1, wife’s tender bundle RI;
Exhibit 2, memo dated 9 July 2018;
Exhibit 3, the husband’s current contract with (employer omitted). The husband is clearly a talented, hard-working, industrious employee who is highly valued by his company, and receives a yearly bonus as well as his income. His base salary is $223,375, which is the only salary declared in his financial statement despite evidence of a yearly bonus in 2017 of gross $34,000 and in 2018 $39,419;
Exhibit 4, a series of text message commencing around 30 July 2018;
Exhibit 5, emails between the parties commencing 25 July 2018 and ending 26 July 2018;
Exhibit 6, a further series of emails between the wife and husband commencing in about 29 June 2018;
Exhibit 7, another series of e-mails from the mother to the father commencing 9 July 2018;
Exhibit 8, documents relating to sale of shares by the husband. The shares were sold on 2014 by a compulsory acquisition;
Exhibit 9, wife’s response to Court exhibit 7;
Exhibit 10, current Profit and Loss for the wife’s business 1;
Exhibit 11, a letter dated 18 April 2018, from the wife’s lawyers to (employer omitted), the employer of Mr R a valuer retained by the wife; and
Exhibit 12, final orders sought by the wife.
Husband’s Exhibits
Exhibit 1, a bundle of correspondence from 12 December 2016 to 13 January 2017 from the father’s lawyers disclosing payslips, bank statements, and bank account details;
Exhibit 2, a letter from the wife’s lawyer to his lawyers dated 26 March 2015 seeking equal time orders for children then aged seven and four;
Exhibit 3, a letter from his lawyer to the wife’s lawyer, dated 25 August 2017 asking that a five nights a fortnight regime of time be implemented forthwith. This was after Ms M’s first report had been released;
Exhibit 4, photographs of the front of the parties home and the kitchen;
Exhibit 5, a lengthy letter from the husband’s lawyers, dated 29 March 2017 to the wife in relation to the disposition of shares. The husband totalled the net amount he received from the share sale to be $46,983.73. He disclosed further financial information as well; and
Exhibit 6, husband’s tax assessments/returns for the years ended 30 June 2015 and 30 June 2016. The husband has failed to disclose in his financial statement that he receives yearly bonuses.
Court Exhibits
Two valuation reports from Mr B of (Valuers). The initial is dated 14 August 2015, and the updated report dated 12 March 2018;
Two family reports prepared by Ms S, Exhibit 1 is dated 30 July 2018;
Exhibit 2, is dated 21 September 2016;
Exhibit 3, the child dispute conference document. This did not assist me at all;
Exhibit 4, the joint balance sheet. There were two areas of disagreement. The value of the former matrimonial home, be it $1.75 million or $1.95 million, and the value of shares acquired during the marriage, disposed of by the husband post-separation, as contended by the wife at $113,249 or as contended by the husband some $47,000. Otherwise the balance sheet was agreed;
Exhibit 5, the parties’ costs disclosure. Legal fees paid or to be paid amount to some $160,000, for each parents;
Exhibit 6, an agreed list of items to be returned to the husband. Items such as a totem pole and tennis set and a cricket set, a thermos, stubby holders, a large concrete pot now cracked and a BBQ metal prong.
Exhibit 7, a list of items the husband required the wife to return to him not agreed. They include items such as [X]’s silver bracelet and necklace from (country omitted); [X]’s ring box; [X]’s chain with heart; a dolls’ cot and linen with a Raggedy Ann doll;. This exhibit is to be read wife’s Exhibit 9 which is the wife’s response to these additional items sought by the husband; and
Court Exhibit 8, Mr B’s updated valuation.
Despite Mr B and Mr R preparing a joint memorandum they could not bridge the gap of $200,000 between their valuations.
The parties had by way of either annexures to their affidavit or by exhibiting filed in excess of 300 pages of material each. There is no good reason or necessity for this volume of material to be filed by anyone to “prove “their case. It is almost disrespectful to expect a Judge to read that volume of material in preparation for a trial. Despite this volume of material in excess of 20 Exhibits were tendered.
Mr Campton said only the exhibits to his client’s affidavit that he took me to would be relevant, a position I accepted and also applied to the husband’s material. I trust the uselessness of the remainder of material annexed and or exhibited is reflected in reduced legal fees.
I read both Mr B’s valuations and Mr R’s valuations.
The husband and wife, Mr B and Mr R were cross-examined.
The Chronology
The father and mother are 42 years of age.
They commenced cohabitation in 2002.
They purchased a property at Property B, in 2004.
They married in 2006.
The wife commenced her Business 1 as a sole trader in 2006.
The parties sold the Property B property in 2007.
They incorporated Business 1 in that year.
[X] was born on 2007. The husband’s parents gave the parties $50,000 around this time and I accept that the husband used that money to purchase the shares which he has since disposed of.
The parties purchased the former matrimonial home at Property A , on 2009.
[Y] was born in 2010.
The parties purchased a 25 per cent interest in a property at Property B, and the husband will retain that property as part of the property settlement.
The parties’ first trialled separation in April 2014 and separated finally a couple of weeks after that. The husband moved out of the home and continued to pay the mortgage up until about March 2016, when he moved into separate accommodation. He had initially moved in with his parents.
The parties entered into negotiations in relation to the father spending time with the children. The father has always spent time with the children – maybe not the time he thought he should. His view that an equal time arrangement was best for the children immediately and at separation was misplaced and misguided.
The father commenced proceedings in 2015. The matter came before me on 18 December 2015, where I made orders at the mother’s request to allow these children to travel to (country omitted).
The children’s maternal family live in (country omitted). They have, throughout their lives, travelled to (country omitted), and the father has accompanied them on many occasions. Yet the father would not permit that to happen post-separation. I recall the decision and the orders I made. On day of the interim hearing and after listening to my preliminary views the father agreed to the children travelling to (country omitted). He should never have opposed the application.
In addition I made orders for time to be spent with the children on a slowly graduating basis culminating with another hearing on 20 October 2016 of time from Tuesday 4.30 until 7.30, and after school Friday until the commencement of school Monday in week one; and
In week two, from the conclusion of school Thursday until the commencement of school Friday.
Evidence of the Parties
The wife alleged that the husband had failed to disclose his real income and true his financial position post separation. The wife is correct.
Wife’s exhibit 3, the husband’s current contract with (employer omitted). His base salary is $223,375, which is the only salary declared in his financial statement. He failed to declare his yearly bonus which amounted to some $39,000 in 2017. He stated he paid superannuation out of his income at $408 a week. He does not pay this sum his employer pays it. His financial statement Part B, states his income is $4,370, with expenditures of $4,606. This is incorrect. Without adding in his yearly bonus his adjusted income and expenditure gives him a surplus of $400 a week in income. The husband was not careful in the completion of this document and these omissions significantly increase his disposable income. The husband had no explanation for these serious errors and omissions.
The husband’s bonus/incentive was $39,419 gross last financial year. Adding this to his yearly income and the error of his superannuation contribution brings his remuneration to $287,760, not $223,375 disclosed. This error, failure, carelessness did him little credit.
The wife’s yearly income for child support purposes is assessed at $59,093 and the husband’s taxable, not adjusted income for child support purposes is $239,010. The reality is his taxable income was in 2017 $287,760. Yet it is the husband who has made 3 applications for a review of administrative assessment of child support on the basis that the wife had not properly disclosed her income. The fact is he has not properly disclosed his income.
These omission or errors are all the more concerning when the husband asks me to include in the balance sheet the wife’s jewellery valued at $12,000. His bonus earnt in the first half of 2018 is double the value of the wife’s jewellery which when received by her was no doubt a gift at that time. I am unclear how one can un-give a gift.
The husband failed to disclose the sale of his shares to the wife and this was not included in a letter dated 27 March 2017 prepared by his lawyers and sent to the wife’s’ lawyers see wife’s exhibit 8. The shares were sold on 2014 by a compulsory acquisition, and I accept the husband did not receive any money until 2015, however, this is no excuse for failing to disclose what he ultimately received.
The husband’s 2016 tax return was not provided to the mother until 2 days prior to this hearing and nor has he produced his group certificate for 2018, which is was called for by Mr Campton.
Court Exhibit 6 was an agreed list of items to be returned as sought by the husband. Items such as a totem pole tennis set, cricket set, a thermos and stubby holders. These are not an expensive items and one would wonder why they cannot stay where they are and with the children. It became clear the husband sought these items as he or his parents had purchased them. This is a petty and rights based approach by the husband which will be counterproductive to a functioning co-parenting relationship into the future.
Husband’s Exhibit 7 a list of items the husband required the wife to return to him. They include items such as [X]’s silver bracelet and necklace from (country omitted); [X]’s china ring box; [X]’s chain with heart; a doll’s cot and linen with a Raggedy Ann doll; a large concrete pot now cracked and a BBQ metal prong. Many of these items are the child’s and the father would not concede in cross examination that as these items are [X]’s and they do not form part of the party’s property. His answer was “why can’t they be with me.”
Family law property proceedings are not accounting exercises. I have a wide discretion to include or exclude items from the assets available for distribution having regard to the totality of the party’s financial resources. An overzealous approach by a party to what the other party has can be counterproductive to their case and make the difficult but worthwhile task of co-parenting children even harder than it need be.
The items the wife seeks to retain set out in her Exhibit 9 will remain with her.
Parenting Issues
It is the mother’s case that the father has a hostile and aggressive attitude to her and in his dealing with her. This feature of the parental dynamic was noted by Ms M as well. The mother is correct.
It is the father’s case that the mother does not support his relationship with the children and is unnecessarily restrictive of their time with him. He is incorrect.
Wife’s exhibit 4 is a series of text message. The children had been at their dad’s and [Y] left his school shoes. The mother texts the father “Where are [Y]’s school shoes? They are not in the bag. I need all of these items returned today please, as he needs to wear his school shoes every day this week” and in relation to [X] “Is her thermos from her lunchbox still at your place?” The father’s response, “You will need to come over and get them”. This is not the communication of a child focused parent.
The mother writes back, “It’s your responsibility to ensure everything is returned after overnights. You will need to return them to me. They need to be returned by this evening”. The father’s response, “These are not items the children need” and confirmed this same attitude in the witness box. The father is wrong. These are items the children needed. [X]’s thermos for her lunch at school is important to her and [Y]’s school shoes are essential. This bespeaks a very poor attitude to the needs of the children and demonstrates a dismissive attitude to the mother’s position.
Wife’s exhibit 5, a series of e-mails between the parties commencing 25 July 2018 and ending 26 July 2018. The mother writes to the father, “[Y]’s (sport) exam rehearsal will be on Sunday, 12 August. Time is still to be confirmed”. It is compulsory to sit. [Y]’s (sports) game is on for the next four weekends – you have got that information. This weekend is 10.30 at oval. Confirming, I can collect [X] from (hobby) on Saturday if you want to stay with [Y] at the game. Just let me know.”
Twenty or thirty minutes later, the father responds “I am about to book (omitted) tickets for myself and the kids on 12 August 2018 so I can confirm whether I should buy the tickets to (omitted).
The mother responds the next day 25 July at 7 pm, “Mr Reed, the exam rehearsal is locked in, confirmed and is definite for the 12th”. The only thing I am waiting on them to tell me is the time. She has been working hard and preparing for the exam all year. The rehearsal is compulsory. It will be a complete let‑down if you do not take her, and extremely unfair on her, after all she is going to sit the grade”. It should have been clear to the father that the (Event) and [X]’s rehearsal clashed from reading of the mother’s first email.
The father responds, “This is getting monotonous. I always support the children in everything they do. They have never missed anything. Enough emotive language about [X] and her feelings. It populates every email you write.”
The father suggests that [X] could compete in the (Event) and then attend her (hobby) rehearsal. That the father suggested this indicates he was thinking of his needs and to be in control and not what was best for his daughter.
This attitude supports the mother’s position stated to Ms M, “it is the father’s way or the highway”. The father acts as if his capacity as a parent, or a man is being challenged by the mother on every occasion when it is not. He would do well to desist from that attitude, and look at the mother’s comments for what they are, detailed communication about their children, who lead very busy lives and whose parents want them to lead busy lives.
It is no wonder the mother responded, “Your monotonous, aggressive tone is a difficulty for me and the children.”
Wife’s exhibit 6, is a series of emails between the wife and husband commencing in about June 2018. These e-mails demonstrate a combative attitude by the father to any request by the mother. This poor attitude has not been helped by the conduct of his parents, people the children love and with whom they have had a strong and ongoing relationship. They have descended into the fight between their son and daughter–in-law. Their behaviour has done irreparable damage to their relationship with the mother of their grandchildren, the negative consequences of which have escaped them and their son.
For example, the wife writes to the husband on 28 June 2018. The children are with him on the Thursday. The wife’s email refers to a performance [X] is involved in. [X] is a talented and keen (hobby). [Y] a talented and keen (sports) player. The children are doing extremely well at school and engage in many extra-curricular activities which they did prior to separation.
The mother tells the father that [X] has asked her numerous times if she will do her hair and makeup for this event. The children were at (sports) with their father. The mothers writes “I’ll come to (sports) and do her hair and makeup in the change room. She can get into her costume before you take her for a bite to eat and drop her at the theatre”. The mother says in the last paragraph, “Please consider [X]’s feelings, and she has asked me to do this, a few times …. And allow me to do this with her. She will then only need to touch up her lipstick after she has eaten, before being dropped off at the meeting or the theatre. Ms Reed.
The father responds: “That’s fine. I agree with your suggestion”, however, adds “could I please ask you to consider your style of correspondence. I don’t like the way you suggest I do not consider the children’s feelings. There is no need for emotive language such as, ‘Please consider [X]’s feeling,’ nor do I need you to suggest I should take her for a bite to eat. I’m fully functioning and capable of looking after the children in every aspect of their lives.”
In wife’s exhibit 7 being e-mails from 4 July 2018, the mother writes “Mr Reed, the (hobby) trip is performing a matinee on Friday. They are required to go to school with their hair and makeup done, with their costumes to get into at school before they bus to the theatre. [X] has asked me to do her hair and makeup before school. Can you confirm that this okay? If you drop her to me at 8.30, I will run her up to the school as soon as she is ready”. The father’s response, “[X] has not mentioned this to me”. This is the mother properly communicating to the father arrangements for their child.
The father complains about the mother’s style of communication yet I fail to see of what he complains. It is his responses to her that are the issue. No matter what or how the mother writes to him, the father is of the view that the mother is trying to get at him, diminish him as a man, diminish him as a father and is telling him what to do. That is not the only way to read the mother’s communications. They can be read as a fulsome explanation by her, of why it is she is asking something to happen. The father would do well to bear that in mind in the future when reading communication from the mother.
There is a significant degree of competition with the mother emanating from the father in matters relating to the children being vying for their affection, time with, and activities he engages in with the children.
For the father to communicate with the mother in this fashion, and then seek since 2015 an equal time arrangement in light of Ms M’s clear recommendations on 2 occasions this would not work, indicates his lack of insight and understanding of the needs of the children and the way an equal time order can work. It is essential that both parents have good communication.
Ms M’s clear recommendations in both reports was that an equal time parenting arrangement was not appropriate. In her opinion the children should be spending five nights a fortnight with their father. Currently, they spend four nights a fortnight and have an evening meal once a week.
The mother seeks that I discharge the order for a mid-week evening meal that the children continue to spend four nights a fortnight with their father and a week about arrangement in all school holidays.
Going to the mid-week time there is sense to this as the children are not young and do not require frequent and short time. A short time mid-week period such as this can be disruptive for children who are 10 and 7.
The father seeks six nights a fortnight with the children. He was agreeable to my suggestion that [Y] aged seven spend more time with him than [X] and that [X] be given the option to spend the same time as [Y].
This suggestion arose out Ms M’s observations of the clear differences in the children’s wishes and capacities to be separated from their mother. The reality is the father will take whatever time he can get, so desirous is he of spending maximum time with his children.
It became apparent through the hearing that the father is unable to care for the children on his own and without help from his parents on the current four nights a fortnight he has with them. He manages due to the assistance of his parents, who collect and deliver the children to and from school on many occasions, and care for the children when he must work. The Court makes no criticism of the father working, or his parents assisting him. It is crucial that parents work and support their children. It is simply a reality. His full‑time high-powered job means he is simply not available, as the mother is and has been available particularly since separation, to provide the primary care for the children. His quest of pursuing an equal time arrangement since the get go bespeaks of his needs and not a focus on the children’s best interests.
Not only was the husband, up to the date of the hearing, seeking an equal time order he also sought that they attend a private school. The mother disagreed with both orders. This is in circumstances where he makes significant complaint about the mother’s spending, that she does not require an adjustment under section 75(2) of the Act[2] for her future needs, asserts his expenditure exceeds his income, has sought a review of Child Support on three occasions unsuccessfully asserting that the mother’s income from her business was understated and now asks I order he commit to spend $29,000 a year on one child’s school fees.
[2] Above, note 1.
I cannot reconcile the expenditure of this money with his petty attitude to the children’s personal items being with him and the mother’s jewellery being included in the matrimonial pool.
The mother was not supportive of the children attending a private school. There is an excellent high school in the area, School H. The mother was clear even if the former matrimonial home is sold and she cannot buy another home in the area, she will remain in the School H area, the children will attend that school.
The argument raised by Mr Lethbridge, that the mother was denying the children an opportunity by not agreeing to them attending a private school, is not accepted by me. These parents cannot afford to send their children to a private school. The father’s evidence is he is surviving by running into credit card debt, cannot afford to pay his necessary costs and expenses currently and complains bitterly about child support. I know he complains bitterly about child support because the paternal grandmother, for reasons best known to herself, chose to raise that issue with the mother, just prior to the hearing, in front of the children at their (sports).
The mother was discussing with the (sports) coach about the next level of (sports) that the children would be attending as they are talented sportsmen. The grandmother said, “Can you please send the details of how the children are doing at (sports) to Mr Reed directly because she does not give him information”, to which the mother said, “I will send it on to him. I always do,” The mother typed in the father’s email address on the (sports) instructor’s iPad so that she had the email address to send the schedules and reports to. The grandmother continues, “I’ve got a right to ask for this because I paid for the children’s (sports) lessons initially and he pays everything for them because he pays child support.”
Clearly the father complains to his parents about the level of child support and how much he pays. He pays $385.10 weekly for both children. This is the current child support assessment and is attached to his affidavit filed 2 August 2018. The child support he pays is important, and it is to his credit that he pays it without fail. The money he pays does not pay for all the children’s costs, it would not go near it. He pays for not one extra-curricular activity cost, and has refused to do so, yet seeks to send the children to private school at a cost of $30,000 a year. The inconsistency in the father’s conduct may not be apparent to him, however, it is to the Court and the mother.
The husband’s parents threatened to take the wife to court over items they wanted returned, such as for example two plastic cereal containers, and a planter pot. As the wife said, “I did not object to returning their items. What I objected was Mr Reed wanted to come to the property to do it”. The husband’s parents had stored many of their possessions at the home when they sold their property some time ago and many years later sought these items be returned.
The attitude of the paternal family and conduct towards the mother of their grandchildren is not helpful. It has a threatening, bullying and coercive overtone and this is the more inexplicable when it is clear they have been wonderful grandparents. They assisted the parties when they were together, cared for their grandchildren to assist the mother to continue running her very successful business from home whilst the children were very young. They clearly have a close relationship with their grandchildren. However, they are not the parents of the children, and their son is well capable of dealing with the wife on issues concerning his children. The court regrets they did not see their role as a safe haven for their grandchildren in the clear war and dispute that their parents, on occasions engage in.
Parenting Orders
There is a definite neatness in the father’s time with the children being Thursday, week one until Sunday, or the commencement of school Monday, and Thursday to Friday in week two being five nights a fortnight as the children will always have Thursday night with their father and collection and delivery is from school. The mother is resistant.
The husband submitted that post-separation, the wife has unnecessarily limited and continues to endeavour to restrict the time the children spend with him. I reject that submission insofar as time in school term is concerned. That is not the evidence.
It is the evidence in relation to the long school holiday time into the future. I accept into the future the mother’s attitude is restrictive, being at most a week with each parent.
I will ultimately order that commencing Christmas holidays in 2018, the children will spend a period of two weeks with each of their parents, rotating and thereafter one half of all school holidays. [X] will be 11 in December 2018 and is well able to spend lengthy time with both parents not just her mother. Holiday time is vastly different to school time.
The father works long hours, has a life and does his own thing at times on the weekend. One of the children’s complaints to Ms M in both reports is that they wanted their father to pick them up from school and spend time with them whilst they are with him, and they do not like being “left” at their grandparents’ house without their dad. This view does not reflect that they do not like their grandparents, rather they want their father. This cannot happen due to his work commitments.
The father must take a realistic assessment of his work commitments and how much time he can spend with the children. He has been saying since 2017 that he has flexible work arrangements with (employer omitted). He said so in his affidavit and in oral evidence. He said that when this matter was over, he would implement his flexible work arrangements with (employer omitted). Why has he not done it before this, given what both reports from Ms M have said are his children’s wishes?
The children want him to collect them from school the majority of the time, and him to be with them when they are in his care. He has been able to collect the children from school in the first half of 2018 on each 4th occasion only. This is no criticism but a statement of fact and reality.
It is the father who has been unrealistic, not the mother being restrictive. I reject any submission that she in some way seeks to restrict the children’s time with their father. The mother is balancing the emotional needs of her children with what can be.
This lack of realism is apparent in the husband’s submission on the wife’s needs under section 75(2) of the Act[3]. The father says to me, “Oh, well, the mother earned a lot of money during the marriage with the very successful business that she ran and she can get back to that”. The mother did run a successful business and was greatly assisted by the paternal grandparents and the husband in a co-operative and supportive way which is no longer available to her now. Her family support is in (country omitted).
[3] Above, note 1.
I accept the mother wants to get back to high paid work as she said to Ms M, “I want to get back to high income earning.” These parents have earned good money in the past and the father continues to earn a high income.
The mother says, “I cannot do this at the moment. Firstly, these proceedings are on foot,” and I accept Family Law proceedings can be disabling.
Secondly, the mother says the children have suffered from the separation. [X] has anxieties, [Y] bed wets; he has had behavioural issues at school. “The children need me more hands-on now than they ever did,” and I accept this. They have been asking their father to do that, but due to his work, he is unable to be more hands on and this is not a criticism. It is clear that the children miss both parents. They would love nothing better than their parents to be together, and if they cannot have their parents together, when they have them, they want them. That should have been clear to the father from both Ms M’s reports.
The mother has ensured her work hours are truly flexible and fit around the children’s needs being not only their emotional needs but their substantial extra-curricular activities and education needs. To achieve this balance of necessity, meant a downturn in her business. Perhaps it will come back. The wife says she hopes it will come back.
When the spectre of these proceedings is finished, she may be able to focus and concentrate more on her work. However, unlike the father who has the help of his wonderful parents to assist him, to collect and deliver children to and from school, and extracurricular activities, the mother has no such help, nor can she afford nannies and the like, as she could when the parties lived together and her business was most successful.
For the husband to contend that the mother does not have a 75(2)[4] factor due to her care of the children, is again him not looking at the reality of the situation. The father cannot care for his children on his own without help from his parents four nights a fortnight, yet says to the court, ‘Oh, but the mother can do it and get her business back.”
[4] Above, note 1.
The mother cannot. The day to day care of children, who have some emotional needs, for a sole parent without family help impacts on their capacity to work. What parties can do when they are together as an intact couple, and what you can do when you separate are vastly different, and this matter is a good as example of this consequence.
These parties are competent, capable, hardworking good people, when together were doing well. The husband was earning some $200,000 a year; the wife had a turnover of $1.6 million, with a gross profit in excess of $300,000 in 2013/2014 from her business, the husband’s parents were helping them with the children, they could afford nannies to collect and deliver the children, do housework etc. The wife was working from home and had that level of flexibility. The husband did not have to worry about any of the day to day care issues during the working week including getting the children to and from extra –curricular activities as his wife, his parents and nannies took care of those matters. This was a team approach which is not the case anymore, unfortunately. The world has significantly changed, and yet the father could not see it.
The parties filed volumes of evidence about each other’s poor attitude, conduct, and behaviour towards the other in both the property and parenting matters. In relation to parenting at the end of the day, what did this vast volume of paper distil to? What are the children’s needs and what regime of time will best suit their needs or put another way, what parenting arrangements can they tolerate. The reality is these are both good parents whom the children love.
Ms M’s reports were most insightful, and were consistent from report 1, in 2016, to report 2 in 2017. This is what she says at paragraph 40:
The children were animated, affectionate, responsive during observations with each parent. They were rivalrous; [X] more. The parents were observed to be appropriate … excellent parents.
The most significant problem identified in the original family report was the poor parental relationship still evident today from the emails I have read. The father’s attitude to the mother clouded his focus on the need of his children to be financially supported to the best of his ability demonstrated as follows.
His negative attitude to paying the mother child support which came through the grandmother’s behaviour towards the mother, reviewing assessments of child support on three occasions when he had the capacity to pay the amounts assessed and full well knew the mother was spending more than the child support he was paying on the support of the children, ceasing to pay the mortgage, not paying for any of the children’s extra-curricular activities, when he clearly has the capacity to do I so are all evidence to support a finding that in financial matters he does not put the children’s needs before his dislike of their mother.
Ms M says at paragraph 41:
My views in this regard have remained unchanged the parental relationship is a major issue. The father says the relationship has improved; the mother says it has not.
The parent’s relationship has not improved. The parents could not even look at each other during the proceedings. That behaviour is noted by [Y] and [X] in the report. The father would not look at the mother when she was being cross‑examined, and vice versa. Their relationship has not improved.
Ms M said:
Even if I accept what the father says about the improvement in communications, it is limited.
The father said to Ms M, “Oh, things are much better, we are getting on much better, we communicate much better” and at paragraph 11:
Mr Reed expressed the view the relationship between him and Ms Reed and better than it was at the time of the initial family report.
That cannot be correct given the father’s responses to the mother’s request that he return the children’s school items left at his house a mere 2 months ago. “You come and collect them”. That is not indicative of a relationship that is improving.
The father complains that the mother has been manipulative, attending a birthday party that [X] was attending in his time. The mother’s explanation was, she was asked by the mother to come and help with the party. Whatever the mother does, the father sees that as her interfering with his time with his children, or in some way undermining him as the children’s father. This is not only incorrect but indicates a very poor parental relationship.
The father described the mother as a good mother, and the mother has described him as a good father, however, she finds him threatening and coercive, and with her he is. Perhaps not so with the children.
Even when the father told Ms M their relationship has improved, he also said that the mother would be happy if he ran off into the sunset, and “She is still pushing to limit my relationship with the kids”. Not only do these beliefs indicate a poor parental relationship, they are incorrect. The reality is the opposite. The mother is acting to protect the children’s relationship with their father by supporting their emotional needs and balancing those needs with their right and desire to spend time with their father and his limitations on taking up that time due to his high powered job. The father and his parents have been most unfair to the mother in this regard.
The father behaved very poorly in 2017 at [X]’s (hobby). The parents had an altercation. He did drive off in the car when the mother was saying goodbye to [Y]. The mother was physically hurt by his actions, the children were frightened, they were crying. He was angry. The mother says the father has poor impulse control. That was an example of very poor impulse control. It was scary for the children, totally inappropriate, and completely unnecessary. The incident was all about him.
Fortunately, these children are not exposed to many incidents such as this but they are well aware of the parent’s dislike of each other as Ms M reports. The mother says the father will not acknowledge her at car parks, will not say hello to her, and the children notice this. That was evident to me in the hearing. He just turned his face away; he could not look at the mother.
Ms M reports [X] is the child most affected by the separation. [X] wants a normal life of reconciliation, finds moving between the homes difficult, misses each of her parents, but particularly misses her mother. To her father’s credit, he has taken her home on one occasion when she was inconsolable, in the last 12 months. There has been three periods of time when she has been inconsolable and the father has had difficulty in helping her deal with missing her mother.
That is nothing the mother has done or the father has done. That is [X]. That is the child she is and she feels the antagonistic relationship between the parents which, from my observations, is far more evident from the father’s camp than the mother’s camp.
It is clear that the mother has a friend – a person called Mr G – and although the mother may deny it, from [X]’s point of view, this is a fairly significant relationship to her mother. [X] has written to her father expressing fears that the mother and Mr G will get together, that they will become one household, and [X] does not want that and she will want to live with her Dad.
I accept the mother’s position that this fear expressed by [X] is not the mother’s intention and I accept that this is a mother who would never put her children’s emotional health or safety at risk for her own relationship. It is timely that the mother ponder these letters and [X]’s fears so that she can address them with her daughter. Although the mother may think these fears come from her father, they may not and they are real for her daughter and must be addressed.
There are things the parents seem to be able to manage appropriately and well. At others times there is evident hostility, mistrust and tension which the children notice and cause them discomfort. It will be in the children’s best interests for the parents to take positive action to improve this situation. The father needs to pull back and stop believing and seeing in everything the mother does, a slight on him. It is not. This mother has always come at these matters from the children’s best interest.
Ms M opined in her first report, parental responsibility should not be shared, however, these parents agree to share this responsibility to their credit I will so order.
An equal time arrangement is not practical, not realistic and not in the children’s best interests. Ultimately, the father agreed that this would not work.
Significant and substantial time is in the children’s best interests. Each parent want that for the children.
Going to the relevant 60CC[5] factors.
[5] Family Law Act 1975 (Cth), s 60CC.
The children benefit from a meaningful relationship with each parent that is apparent.
The children have been exposed to parental conflict and that conflict lies more at the feet of the father and his family than at the mother’s feet. The children are aware of this conflict and this has caused [X] significant emotional turmoil at times.
The children’s wishes. [Y] would live in an equal time arrangement if this was left up to him. [X] is content as matters are and was open to some small changes - non-radical changes.
Ms M opined that at the children’s ages, it would not be appropriate to give their wishes full weight but the Court must be cognisant of them, particularly of [X]. She will be 11 this year and the distress she experiences when she’s away from her Mum does lead weight to [X]’s views that she really does not want much of a change.
I accept as Ms M said, that at his age, [Y] does not understand what equal time means. This is an adult term. However, it is apparent that he loves spending time with his Dad, wants more time with his Dad and it may be beneficial for him to have more time with his Dad. Ms M said, if both parents thought equal time would work, it would work because they would support it, but that is not the case.
Looking at the sibling relationship: Ms M saw them being rivalrous. Both parents talked about them fighting, as all children do, and the children themselves describe fighting and it being annoying. Ms M says at paragraph 45 of her report:
Meeting each child’s individual needs does not need to involve radically different, or even different, living arrangement. This could be achieved by, for example, flexibility, as required, and by giving each child a bit of individual time from time-to-time with each parent. This can be achieved without placing extra strain on the parenting relationship.
Both parents have the capacity to provide for the emotional, psychological and educational needs of their children. The mother has a far greater insight into the children’s emotional needs and has been willing to put her life on hold for the children. The father’s work, his commitment to financially provide for his family, is as significant as the mother’s commitment to provide emotionally for the children and the family. This is where much of the tension between the parents has arisen. The mother understands this, the father and his family have not in the past. The father’s lack of understanding and acceptance that the mother’s role in emotionally supporting the children was as valuable to them as was his role in financially providing for them is a significant deficit in his insight into the needs of his children.
The father has not appreciated what the mother has done to foster and maintain the children’s all important relationship with him. Due to the mother’s efforts, the children have been able to maintain a valuable and loving relationship with their father and grandparents. That the mother has done this has resulted in her now having needs under section 75(2) of the Act[6] and the father ought to have acknowledged this as highly relevant matter.
[6] Above, note 1.
The mother is the children’s closest emotional attachment and that is why she observes in them, behaviours that the father doesn’t see. They arc up; they melt down; they feel they can be as expressive as they want with her because of this close emotional attachment. I do not find as the mother alleges, that the children are contained with their father because they are worried about his anger. They do have a different relationship with and perception of their Dad than she does as no doubt he is a loving father.
The children’s comments about him to Ms M, namely what a fun Dad he was; what great times they have; that [X] misses him as well as she misses her Mum; that she doesn’t tell her Mum she misses her Dad indicate he is not the aggressive, difficult person with them that he can be with her. I accept the father does not treat the mother with respect.
I have formed the view that an order for the children to spend five nights a fortnight with their father is the order in the children’s best interests. There will need to be a level of flexibility in relation to [X] and until the parenting relationship improves, 5 nights may not work for her, although it has advantages in other ways namely change over at school. The best option for [X] is 4 nights a fortnight with the option for her to have 5 nights. This will provide for [Y] to spend 5 nights a fortnight with his father a regime of time he will clearly benefit from and provide for [X] to make that decision knowing her time is by order 4 nights a fortnight.
I asked the mother if this was doable, could she see an arrangement working that [Y] spent five nights a fortnight with his Dad, [X], four nights a fortnight and the fifth night if she wished to? The mother said she could see that possibly working. This may be advantageous in that it provides for [Y] something he may be pining for, which is one-on-one time with his Dad. He and his Dad are similar, they enjoy the rough and tumble; they’re active, sporty and talented at sport. They are men of action.
The corollary is that [X] spends one night with her mother. This may give her relief from what she might regard as her younger brother’s irritating behaviour and she and her Mum can spend time doing things that she and her Mum like to do.
I have formed a view that the following are orders in the children’s best interests.
The parents to share equal shared parental responsibility. This was agreed.
The children spend four nights a fortnight with their father, being from Friday after school to the commencement of school Monday morning, in week one, and;
For [Y], an order for five nights a fortnight being every Thursday after school until the commencement of school Monday morning in week one and to the commencement of school Friday in week two, and;
If the child, [X], wishes to accompany her brother on the additional Thursday night, she may do.
The children to live with their mother.
The children spend one half of all school holidays with their parents commencing 2019 and including the long school holidays.
Financial Matters
I accept the wife wishes to buy out her husband’s interest in the home and will need the assistance of her family to do so as her evidence was, “I will not be able to achieve this via the bank”. I will give her that opportunity, and the husband is more than happy to do so. I give the husband credit for having vacated the former matrimonial home at separation, and demonstrates he was thinking of his children’s needs at that very difficult time and not his own needs.
My first task is to identify the matrimonial property its nature and value. There was a dispute concerning how much the husband received from the sale of the shares.
An explanation of the share dealings are contained in exhibit H5. The document the wife cross examined the husband on was produced by him and was received from his stockbrokers. The father was cross-examined by Mr Campton on this issue and the wife’s assertion the husband cashed in shares totalling $113,000 not $46,983 or $47,000 for my purposes.
Mr Lethbridge explained that the stockbroker document was a history of the movement of a parcel of shares. Where the figure of $113,249 comes from is that all transactions relating to the shares, that is the amount when they are cashed in, the amount when they are transferred to a holding account, and the amount transferred to the husband’s account, have been recorded separately. The document is produced in this way so the husband can see the expenses paid from his share sale and how the balance he received was arrived at. The wife’s legal team added up each transaction to come to the figure of $113,249 when the reality is that all transactions related to the movement of one amount being the total of the shares sold. Thus, simply adding up the amounts in each movement of the total value of the shares results in a doubling up which is why the wife came to the figure she did. The document is confusing.
I agree with Mr Lethbridge’s explanation of the way to interpret the document which is consistent with Husband’s exhibit 5 and find the value of shares cashed in by the husband post separation is $47,000.
Going now to the more contentious issue of which valuation I will follow, Mr B the court appointed joint valuer or Mr R. I have determined that Mr R’s valuation is the one I will follow for the following:
The first is, it was submitted by Mr Campton for the wife that in cross-examination, Mr B was totally defensive of his report. He would not make one concession. This is correct. He would not make a concession that an executive summary is an alternate valuing method. He would not make a concession that his report was more generalist than Mr R who compared 20 properties to Mr B’s 11 and provided a detailed summary of the Property A property market over the last 3 years and documented the changes in in that property market over that period and generally in Sydney.
He would not concede that he did not use words which are often used by agents in comparing properties such as “superior”, “not superior”, “and inferior”. He had used the word “prestige”.
At the end of the day, I found Mr B’s oral evidence rather more focused on defending his opinion, rather assisting me to understand why there is a $200,000 difference in these valuations.
Mr R has valued twice the number of properties in the Property A area than has Mr B. Mr R specialises in valuing and selling properties in the Property A area. For example he opined that the type of block is important in the Property A area and level blocks with good access are more desirable.
Mr B has a much more extensive and wider range of expertise in terms of the quantity of valuations he has carried out in the broader Sydney area and his valuation did not have the specificity of Mr R’s valuation of this particular market.
Each gentleman is highly skilled. Each man did a visual inspection of the subject property.
Mr R spoke in his report about the market movement; that his valuation was current at the date of the valuation only which was April 2018. Mr B’s valuation was carried out in March 2018 and he made no such concession as to market movement.
Mr R reported that the subject property had 4 bathrooms at page 18 of his report when it has 2. That error did not impact upon his valuation as I see it.
He gave a general market overview at page 20 referring to the strong demand from 2014 to about the mid part of 2017; that stock supply was inadequate to sustain the strong demand in the rapid increase of auction clearance rates which was occurring in Sydney at that time.
He stated that in more recent times throughout 2018, the market is in the early stages of experiencing a change in direction. He used the word “softening”. Mr Campton used the word “softening”. Mr B would not use that word. The word Mr B used was “stabilised”.
One only has to read the paper to know that the word “softening” is being used to describe the current Sydney property market.
Mr R gave an overview of Property A which is that it is a residential suburb for families; very few strata or attached properties; there was a strong market from 2013 to mid-2017 with constant demand typical of the Sydney market; the market began to cool in the latter part of 2017; open house numbers were falling, along with clearance rates. Clearances are lower than reported as agents do not necessarily report properties have not sold at auction; it is the most popular suburb in the Suburb F district; that in 2018 the market is changing from a buyers to a seller’s market; vendors do not have the same confidence and prices that might have been achieved in 2016/17 are now difficult to achieve; there has been limited sales in the Property A area in 2018, much lower than the same time last year.
The much lower sales in 2018 to 2017 must be a relevant factor in any valuation and would clearly be a factor contributing to a “softening” market.
Mr B’s report gave no such detailed overview.
Each valuer supported their position with current and past comparable sales.
Mr R looked at 3 recent attempted sales being (Property A area). These 3 properties were listed for auction recently and failed to sell even in late 2017.
(house) was on the market for 107 days, (house) for 45 days and (house) for 157 days. There is currently four properties for sale in the Property A area which agents had tried to sell at auction.
(House) was initially set down for auction but was unsuccessful. It has been on the market for 47 days and has an asking price of $1,530,000.
The three other properties: (houses) are in current auction campaigns and agents are focusing on making sales due to the limited number of buyers. That too must be a contributing factor to a “softening” market. I note the property at (house) had sold as at the date of the hearing.
These factors Mr R says have resulted in the Property A area values falling by five to ten per cent.
Mr B did not refer to these properties as they have not sold and Mr R used these properties to support his position of a softening market.
Both Mr B and Mr R agreed there can be a variation in a valuation of 10% which is around the difference in their valuations a figure of $200,000. Thus the difference in these valuations is a reasonable in both men’s opinion.
As the property at (house) had sold in May 2018 for 1.9 million, both valuers were asked if it was a good comparable. Mr B said it was not renovated to the standard of the subject property and was not a good comparable in that regard and thus supported his opinion as to the value of the subject property.
Mr R said the property had water views of (omitted) making it more desirable and thus was not good comparable. Mr B would not concede that due to water views this property could have been a more desirable property and, therefore, not an appropriate comparable and not supportive of Mr B’s value of the subject property.
Both men spoke of the high quality presentation of the subject home. Very high quality renovations; well landscaped.
The negatives each pointed out was moderating sloping backyard; swimming pool at the rear elevated above the home. Mr R opined this could limit the appeal and that a further limit may be that the home is adjacent to the local school which can be very noisy at times. Being close to a school maybe a positive as Mr B pointed out.
Mr R gave the following comparable in terms of sales (houses) sold in November 2017 $1,637,000 – an inferior property; (house) sold 2 March 2018 $1,655,000 –inferior to the subject property, older style, two storey, four bedrooms, two bathrooms, double garage, aspect over the bush; (houses) – sale price $1.8 million sold on 20 October 2017 – comparable to the party’s home, however this home was sold 6 months prior to his valuation.
Even using Mr B’s word “stabilizing” it may well be that this property is no longer a relevant comparable given when it was sold and the current nature of the property market.
(house) – sale date 3 January 2018 sold for 1.84 million dollars was a superior property. Mr B disagreed this home was superior as it had not been renovated to the high standard of the subject property. Additionally, it was on a smaller block and he did not consider that was superior to the subject property.
Mr R commented that this home was much larger than the subject property, had a superior aspect, was not on a sloping block and had double garage.
(House) sold on 7 December 2017 for $1,908,000. Mr R considered this to be superior to the subject property. Mr B did not. They each agreed it had a similar sized block. It is a two-storey Cape Cod home which each agreed can minimise value.
(House) sold 28 November 2017 for $1,955,000. Mr R said it was superior to the subject property because of the quality of the inclusions and how it has been renovated. Mr B disagreed. The pool was at the front of the home; it did not have a garage, only car parking, the land was smaller. Each agreed it was a near level block.
(House) sold for $2 million in November 2017. They all agreed that was a superior property.
(House) sold for $2,210,000 on 28 March 2018. Each agreed this is a far superior property given its inclusions which are a larger area; three-storey dwelling; five bedrooms, four bathrooms; extended and renovated throughout to a high standard; double garage; well landscaped; wet-edge in ground pool; adjoins national bushland to the rear and is superior to the subject property.
In addition Mr R did two types of valuation. He did an assessment by comparables and then he did the direct comparison approach using the summation approach where an assessment of location, surrounding development, age, condition, design, utility improvements, recent sales, value level, likely buyer profile, current market conditions is made. Then the value is broken up into the land value and improvements. In so doing Mr R still came to the same position. Mr B did not use that particular method.
Mr R made concessions where he could. He has valued many more properties in this area than Mr B, and did an extensive analysis of the property market in the Property A area pre and post his valuation, supported by comparable sales as well as prices being asked for property currently on the market for sale and his knowledge of the Sydney market in general.
Mr B did not carry out this same extensive analysis of this particular market nor did he do a direct comparison valuation as Mr R did. He relied, as he is entitled to do, on comparable sales only. He would not concede the Sydney property market was “softening” when it was common knowledge at the date of the hearing that it was. This then resulted in him not conceding that a home sold 6 months prior to his valuation may not now be a relevant comparable due to these changes in the market.
Valuation is not a science but an art and thus there will be a variation and a difference in how experts look at these matters, and it was of significance to me that Mr B simply would not make any concession which was against his own valuation.
I disagree with Mr Campton's submission that Mr B’s valuation was difficult to understand. It was not. He clearly set out the properties he regarded as comparable and the reasons why. His comparables were accepted by me. However, in not accepting or conceding a “softening” property market and sticking to the prices achieved for his comparable sales has caused me difficulty in accepting his valuation.
One of the best comparisons that both valuers agreed was (house) sold in January 2018 for $1,840,000:
Inferior improvements in a nearby comparable location, good renovation potential.
This sale is in the middle of the 2 valuations of at 1.95 and 1.75 and was sold 4 months before Mr R’s valuation. Given the extensive analysis and overview given by Mr R of the market in which he has specialised knowledge and experience, supported by comparable sales and properties to be sold in the future, together with the “softening” property market, it is Mr R’s valuation I will accept.
There are some slight variations in the current mortgage debts between the parties. The wife’s debts are slightly less than the husbands. As she wishes to buy him out I will use her figures.
Therefore, I find that the matrimonial pool for division is as follows.
| Ownership | Description | Wife / de facto partner’s value | |
| 1. | H&W | Property A | $ 1,750,000 |
| 2. | H&W | ¼ Investment property, Property B | $ 225,000 |
| 3. | H | Motor Vehicle 1 | $ 6,285 |
| 4. | H | Husband’s shareholding – Business 1 (100 Ordinary shares and 1 F class share) | $ 39,000 |
| 5. | W | Loan owed by Business 1 | $ 1,331 |
| Total | $ 2,021,616 |
| LIABILITIES | ||||
| 6. | H&W | Bank 1 Home Loan Account no. | $ 240,444 | |
| 7. | H&W | Bank 1 Home Loan Account no. | $ 290,986 | |
| 8. | H&W | Bank 1 Fixed Rate Investment Property Loan no. | $ 179,839 | |
| Total | $ 711,269 |
| Total Matrimonial Asset Pool | $ 1,310,347 |
I disregard moneys in the wife's and husband’s bank accounts. The parties have been separated for four years. That money is their money and is not an asset to be placed in the matrimonial pool for division.
I will disregard the wife's jewellery. It was gifted to her and given that the husband, in a year, earns twice the value of her jewellery, it is not a matrimonial asset and this applies to the husband’s jewellery.
This is an asset pool for distribution of $1,310,347.
There are two other aspects to the matter. The first is the share proceeds deposited into the husband's account, which I was asked to regard as an add back. These were shares acquired during the marriage used exclusively by the husband post separation and totalled $16,668.
The other shares sold by the husband came from shares he purchased with $50,000 gifted to him by his parents. He realised $46,983. This is not an add back or a contribution but a fact.
Going now to the parties’ contribution based entitlement pre-separation to their current assets.
I will disregard the wedding expenses as claimed by the husband to be a contribution. This was not a contribution to the current wealth of the parties, and the evidence from the wife is that her parents contributed the same sum.
The husband asserts he has made a superior financial contribution to that of the wife during the marriage as follows. His parents gifted the parties $2,200 when they bought their first property in 2004. He received an inheritance of about $10,000 from his grandmother. That was directly deposited into the mortgage. He received from his parents a gift to both of them of some $10,000 to assist with renovations to the house in 2012.
This totals $22,000. Given that the husband had sole use of the proceeds of sale of the shares I will not have regard to his superior contributions and therefore, I will not add back the shares as contended for by the wife.
The assets for division are $1,310,347. The parties have very similar superannuation, the wife some $244,000 and the husband $291,000 and they do not seek a splitting order.
The issue for me now is what is the proper and appropriate division of these assets having regard to their past contributions to those assets and their future needs?
Despite the husband's clear position that he made the same contribution as the wife as a parent and homemaker and to the children, and the significant cross-examination, under instructions by the husband, of the wife in relation to the working hours when the children were born, the assistance of nannies, the assistance of his parents, it is clear that the wife was the primary parent and homemaker, and that she has continued in this role post-separation.
Having said that, it does not, in any way, diminish or demean the contribution the husband made and makes to the children, or the strong relationship the children have with their father. The fact that the wife went back to work when her eldest child was four months, a very early age to have your primary carer return to work, meant that she needed the assistance of nannies. The paternal grandparents were and continue to be of invaluable assistance to this young couple in caring for their children on a regular basis, one day a week, and being there at other times as well.
However, the wife was the one working from home, and it was the husband who left the home early in the morning and returned home late at night. The argument that, because the wife had the assistance of nannies to help her with the children, she was not their primary carer when clearly she was and that the children would not be primarily attached to her is an aberrant fiction and a nonsense. Whilst working from home she would have put them to sleep, picked them up when they awoke, changed nappies etc, had lunch with them etc when she could. She would have been the one they ran to when they hurt themselves and so on during the day. The father was not at the home, he was earning an income outside the home.
The other facts leading me to this finding are that the mother has been the one who has made the dental and medical appointments; therapeutic interventions; making arrangements for their sporting activity; extracurricular activity; (hobbies) and the like. It is the mother who did and does these things and continues so to do. The evidence is clear. I must make this finding as the husband raised it as a fact in issue when on any view of the evidence it was not. The mother was the primary parent and homemaker, and like all working parents, each parent has put every inch of their effort, energy, money earned, commitment towards the benefit of their children and maximising their assets.
For the father to have given Mr Lethbridge instructions to cross-examine the mother on the minutiae of details, times and dates and places where nannies worked etc., did not assist me and supported the Court’s opinion that the husband significantly undervalues the wife’s contribution to the children’s welfare.
Over the period of the marriage the husband has earned the majority of the income and this continues today.
For a period of time the wife had a highly successful business where her income may have outstripped him in the years 2012, 2013 or 2014 tax year. The wife was not sure which years but agreed she had had at least 2 years of high profit in a successful business which she and the husband built up over a lengthy period of time commencing when [X] was four months of age.
The husband has worked consistently throughout the marriage in outside employment. I do not see on these facts that there is any difference in their past contribution based entitlement, and this was agreed between them despite the plethora of cross-examination on these issues under instruction, by Mr Lethbridge. I find that the mother has been the primary parent and homemaker, with significant assistance from outside help, including the husband and his parents.
Parenting children is not limited to the hands on, it also means who is the parent who organises their life, and it is as clear this was and is the mother. It has always been the mother, and I apprehend it will continue to be the mother, and that, in no way, takes away from the father’s commitment to his children, or his input into his children lives.
The father would do well to desist from this childish and immature belief that there is a contest between him and the wife in relation to who did what. There is not. There is no contest for the children's affection, it is equal for the children. Equal time is not how a parent maximises their relationship with children. It is the quality of time and how you spend time with them that is all important. It is a time arrangement that is best for the children.
Having found and it being agreed that their contribution based entitlement during the relationship is equal, I must now look at whether this equality is to be varied for either having regard to any post separation contributions or future needs under section 75(2) of the Act[7].
[7] Above, note 1.
The mother although the primary parent and homemaker, has earnt significant income over the years and is keen to restore her income earning potential sooner rather than later. The wife has a capacity to earn a good income.
The father, post separation and into the future, will continue to earn a good income as he did during the marriage.
Post-separation, the husband, to his credit, removed himself from the former matrimonial home. That was child focused and the wife and children benefited from this.
The husband's attitude to payment of child support and extracurricular activities is of concern. He earned a significant income last year it was $287,000. He has an excess of income over necessary expenditure and has sufficient income to support his children in their extensive extra-curricular activities, activities he and the mother want the children to engage in. Yet he quibbles and will not pay any extracurricular activity or sport costs for them and only his assessed child support. He ceased contributing towards the mortgage in early 2016 when the child support clicked in.
I might have found that the husband had made a superior post-separation contribution to the welfare of his family as the children and the wife remained in the former matrimonial home to his exclusion, however given his attitude to paying for the children's extracurricular activities and other matters, including the mortgage, I will make no such finding.
I find the wife has made a superior post separation contribution to the current assets by her contribution to the support of the children including all their extracurricular activity costs, maintaining the home and mortgage on her limited income of some $80,000 per annum whist having the bulk of the care of the children as a sole parent and assess that contribution at 5%.
Going to future needs. The husband asserts I should find that the wife has no needs, pursuant to section 75(2) of the Act[8]. He says that she earned a significant income during the marriage, she told Ms M she wants to get back to earning a high income, she will do this and I ought to make no adjustment to the wife under section 72 of the Act[9].
[8] Above, note 1.
[9] Family Law Act 1975 (Cth), s 72.
The wife will continue to be the children’s primary carer for no less than 9 nights a fortnight for [Y] and possibly 10 nights for [X].
The wife's evidence in relation to the children was truthful, poignant, and correct. When the children were young babies with the assistance of nannies, she could devote a fair degree of time to work. Their needs were much simpler, at preschool their needs simpler. As they grew older, and particularly post-separation, this has affected the children and it is noted by Ms M that [X] has been most affected by separation more so than [Y]. The wife said the children require and need more of her time, not only in emotional but matters such as doing homework and the like. This is correct and particularly stark as she is now a single parent.
For the father to suggest, "Well, just give the children to me for more time so you can work more," and noting he has the luxury of his parents to assist him to care for the children, will not work and is not child focussed. [X] stresses she misses her mother. She misses both parents, but she particularly misses her mother. She cannot be away from her mother as contended for by the father, for 6 nights a fortnight and 5 may be too much on a regular basis. The father’s position would be tantamount to a disaster for her.
The wife’s income last year was $80,000 and the husband’s $287,000. The wife earnt 35% of the husband’s income. To suggest this mother can immediately get back into business and achieve an income approaching the husband or what she did achieve in the few years before the separation is fanciful.
The wife clearly has factors that will limit her capacity to either return to the workforce in a full time capacity, which she may do, or restart her business. The wife has already begun to reconnect her prior clients, such as (client). The wife lost a big contract with (client) which was the reason she had such a high profit years prior to separation. The wife said (client) do not use her services as they did. The wife is committed to earning a high income, committed to getting back into the workforce and I accept this will happen in time. It will take time, and she will always be cognisant as she has been, throughout this matter, of the emotional needs of the children, particularly [X].
In light of these findings of the wife’s clear needs and the father’s parsimonious attitude to paying for his children’s extracurricular activities into the future and having regard to sections 75(2)(b), (c), (d), (h), (k), (o) of the Act[10], I asses those needs at 10%.
[10] Family Law Act 1975 (Cth), s 75(2)(b), (c), (d), (h), (k) and (o).
This, then, results in a 65/35 division of the matrimonial pool. The matrimonial pool is $1,310,347.
65% is $851,725 to the wife, and $458,621 to the husband. I find that is a proper division of the parties assets having regard the totality of the parties’ contribution based entitlement to their property.
What does this division of assets result in?
The wife will retain the business 1 at a value of $39,000 and the business loan of $1331 a total of $40,331 being net cash to her of $811,394.
The husband retains the Motor Vehicle 1 car $6285 giving a net cash payment to him of $452,336.
I will give the wife 90 days to pay to the husband the sum of $452,336 at which time she will discharge the mortgage over the former matrimonial home and he the mortgage, or the wife’s liability in respect of the Property B property. Otherwise the parties retain all assets in their name.
In the event the wife cannot buy out the husband’s interest in the home, I will provide for a sale of the home and a percentage split of those proceeds to reflect their entitlement to their total matrimonial assets as I have found it. This ensures if the parties receive more or less for their home than the value I have ascribed to it, each will share in the windfall or the loss.
The net value of the home is $1,750,000 less the 3 Bank 1 home loans of $240,444, $290,986 and $179,894 a total of $711,269 giving a net equity in the home after sale of $1,038,731. I have not included sale costs and this is an unknown and each will pay them.
The husband is to receive $452,336 and the wife $811,394 in cash. However part of his payment includes what will then be the unencumbered Property B property valued at $225,000. Taking the value of that asset from his entitlement to the proceeds of sale is cash to him of $227,000. Expressed as a percentage of the net proceeds of sale this is 23% to the husband and 77% to the wife.
I certify that the preceding two hundred and sixty ([X]’s 260) paragraphs are a true copy of the reasons for judgment of Judge Henderson
Date: 6 November 2018
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Property Law
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