SAMON & SAMON
[2018] FamCA 133
•1 February 2018
FAMILY COURT OF AUSTRALIA
| SAMON & SAMON | [2018] FamCA 133 |
| FAMILY LAW – CHILDREN – Interim decision – orders made for specific time and reportable therapeutic counselling FAMILY LAW – PROPERTY – Interim property distribution to both parties – Court satisfied interim distribution just and equitable to both parties FAMILY LAW – CHILD SUPPORT – circumstances where no application for leave to commence departure proceedings was enlivened ‑ application for child support departure dismissed |
| Family Law Act 1975 (Cth), s.60CC |
| Goode & Goode [2006] FamCA 1346 Banks & Banks [2015] FamCAFC 36 |
| APPLICANT: | Ms Samon |
| RESPONDENT: | Mr Samon |
| FILE NUMBER: | BRC | 289 | of | 2018 |
| DATE DELIVERED: | 1 February 2018 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Baumann J |
| HEARING DATE: | 31 January 2018 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr T Kirk QC |
| SOLICITOR FOR THE APPLICANT: | Ryan Kruger Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr S Williams |
| SOLICITOR FOR THE RESPONDENT: | Barry Nilsson Lawyers |
Orders
PARENTING
That the child, B born … 2007 (“B”) live with the father and spend time with the mother when her siblings C born … 2009 (“C”) and D born … 2012 (“D”) are living with the mother at all reasonable times as may be agreed between the parents, but at least as follows:
(a)Wednesday, 7 February 2018 from after school to 6.00pm;
(b)Saturday, 10 February 2018 from 2.00pm to 6.00pm;
(c)Sunday, 11 February 2018 from 2.00pm to 6.00pm;
(d)Wednesday, 14 February 2018 from after school to 6.00pm;
(e)Wednesday, 21 February 2018 from after school to 6.00pm;
(f)9.00am Saturday, 23 February 2018 to 6.00pm 24 February 2018;
(g)Wednesday, 28 February 2018 from after school to 6.00pm;
(h)After school Friday, 9 March 2018 to before school Monday, 12 March 2018; and
(i)Wednesday, 14 March 2018 after school to 6.00pm;
(j)After school Wednesday, 21 March 2018 to before school Monday, 26 March 2018.
That the children C and D live with the parents on an equal time basis, unless otherwise agreed, as follows:
(a)Two nights with the mother commencing 31 January 2018; then
(b)Five nights with the father; then
(c)Five nights with the mother; then
(d)Two nights with the father,
and continuing in this pattern for every block of fourteen (14) days.
That the children spend one (1) half of the Easter 2018 school holiday period with each parent, with the children to spend time with the mother for the first half of school holiday period (including the whole of the Easter public holidays) and with the father for the second half of the school holiday period.
That the children shall communicate with the parent with whom they are not living at the time, at all reasonable times, initiated by the children.
That the mother and father and B attend upon Dr E for reportable therapeutic counselling commencing 1 February 2018 and at such other times as are recommended by Dr E and:
(a)the costs of all consultations shall be shared equally and paid from a specific fund of $5,000 created by these Orders (“the Child Counselling Fund”);
(b)the parents, B and if recommended by Dr E, C and/or D shall attend all scheduled appointments for the consultations required by Dr E to attend; and
(c)the parties shall provide to Dr E a copy of the two (2) family reports prepared by Mr F and a copy of this interim parenting Order.
That either parent shall have liberty to apply, on not less than three (3) days’ notice, if the ordered parenting arrangements breakdown or are not complied with unless such variations have been agreed between the parents.
That during the time the children are with either parent, that the mother and the father will not denigrate or insult the other parent in the presence or hearing of the children and shall use their best endeavours to ensure that others do not denigrate or insult the other parent in the hearing or presence of the children.
That the mother and the father shall not show the children, allow them to read or discuss with the children, any communications directly between the parties that relate to adult issues.
That the mother and the father shall not involve the children in the adult issues and shall not permit the children to be involved in or a party to any agreements between the parents outside of these Orders in relation to the care arrangements for the children.
That the mother and father shall not show the children, allow them to read or explain to the children any parts of any affidavit, correspondence or report prepared in any respect to these Court proceedings, including but not limited to the family reports prepared by Mr F.
PROPERTY
That upon the undertaking of the husband, on agreed terms, not to conclude the terms of any Division 7A loan agreement presently in place for any of the entities in the husband’s control:
(a)the parties shall within seven (7) days sign all such documents as may be necessary to distribute part of the funds currently held in the joint Westpac account (…64) as follows:
(i)To withdraw $5,000 and hold same in a jointly controlled account for the purpose of the therapeutic counselling ordered under Order 5 hereof (“the Child Counselling Fund”);
(ii)To retain, pending further order, the sum of $250,000 in the said current joint Westpac account; and
(iii)To distribute the balance equally between the parties, with the characterisation of those funds to be regarded as an interim property distribution.
That pursuant to Rule 15.44 of the Family Law Rules 2004, G Group be appointed as a Single Expert to value the parties’ interests in any company or trust in which either the husband or the wife has an interest (“the business interests”).
That for the purpose of the Single Expert appointed to value the parties’ business interests:
(a)the Single Expert shall be provided with a joint letter of instruction, including any instructions that may be given by the Court, to be prepared by the wife’s lawyers and provided to the husband’s lawyers;
(b)the costs of the Single Expert shall be paid equally by the parties; and
(c)where any party corresponds or communicates with the Single Expert, such correspondence or minute of communication is to be copied by that party to the other party. Where any communication, by correspondence or otherwise, is received by any party from the Single Expert, then that party shall provide a copy to the other party of any such correspondence or minute of communication.
That in the event the value of any interest in real property is in dispute between the parties after the exchange of disclosure documents, the parties shall jointly appoint a Single Expert pursuant to Rule 15.44 of the Family Law Rules 2004 to undertake a valuation of the disputed assets on the following basis:
(a)The wife shall put forward a panel of three (3) valuers who are qualified to prepare a valuation report of the relevant asset;
(b)The husband shall nominate a valuer from the wife’s panel;
(c)The Single Expert shall be provided with a joint letter of instruction, including any instructions that may be given by the Court, to be prepared by the wife’s lawyers and provided to the husband’s lawyers;
(d)The costs of the Single Expert shall be paid equally by the parties; and
(e)Where any party corresponds or communicates with the Single Expert, such correspondence or minute of communication is to be copied by that party to the other party. Where any communication, by correspondence or otherwise, is received by any party from the Single Expert, then that party shall provide a copy to the other party of any such correspondence or minute of communication.
That the mother’s application for child support departure be dismissed.
That these proceedings be adjourned for Directions at 9.30am on 21 March 2018 in the Family Court of Australia at Brisbane.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Samon & Samon has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 289 of 2018
| Ms Samon |
Applicant
And
| Mr Samon |
Respondent
EX TEMPORE REASONS FOR JUDGMENT
(SETTLED FROM THE ORAL REASONS DELIVERED)
Introduction
The current dispute between the Applicant mother, Ms Samon and the Respondent father, Mr Samon, was urgently listed because of a breakdown in the relationship between the mother and the parties’ eldest daughter B, now aged 10 years. Having enlivened the jurisdiction of the Court through the Application filed 9 January 2018, the mother also sought a range of financial orders. The mother’s case relies upon her Affidavit and Financial Statement, both filed 9 January 2018.
The father responded in the short time available by Response supported by an Affidavit and Financial Statement filed on 30 January 2018, to which, of course, the mother has had insufficient time to respond. Submissions by Counsel, Mr Kirk of Queen’s Counsel for the mother and Mr Williams of Counsel for the father, both orally and in writing, were delivered yesterday. The matter requires urgent attention because of the issue currently confronted by B.
Before providing some brief oral reasons for the orders that the Court proposes to make at this time, it is appropriate to record at least that the Court in accordance with the pathway illuminated by Full Court decisions such as Goode & Goode [2006] FamCA 1346, and as further clarified by the decision of the Full Court in Banks & Banks [2015] FamCAFC 36, will shortly summarise the contested and non-contested facts and briefly discuss in narrative form those relevant section 60CC(2) and (3) considerations. Clearly, however, as in every parenting case, what is important and is paramount is the best interests of the three children, B, C and D.
I remind the parties of what was said by the Full Court in the decisions of Marvel, particularly at paragraphs 120 to 123, namely:
120. As has frequently been emphasised interim parenting proceedings, and orders made as a consequence, are a necessary but temporary measure until all the evidence can be tested, evaluated and weighed at a final hearing by the making of final parenting orders. Decisions judicial officers have to make in interim proceedings are difficult and, often for very good reason, a conservative approach, or one which is likely to avoid harm to a child is adopted. This is often to the understandable distress of a party who may not achieve the outcome he or she desires, or thinks to be in the best interests of their child or children. Interim parenting orders are frequently modified or changed after a final hearing, and any allocation of parental responsibility made at an interim hearing is disregarded at the final hearing (s 61DB).
121. The issue of when the making of findings on contested evidence will constitute appealable error has been considered in a number of Full Court decisions (see Goode at paragraph 82(d)). In this case we agree with the written submissions made by the former counsel for the ICL and the oral submissions of counsel for the ICL at the hearing of the appeal that two findings of the trial Judge were inappropriate, namely that:
a) the father demonstrated a greater level of parental responsibility when the evidence on which that finding was based was the fact the majority of the children lived with him; and
b) the incidents reported by the mother constituted “low level violence” as the violence identified fulfilled the statutory definition of family violence in the Act.
122. In SS & AH [2010] FamCAFC 13 the majority (Boland and Thackray JJ) discussed at paragraph 88 of their reasons the care necessary to be exercised in making findings in interim parenting proceedings. Their Honours said:
In our view, findings made at an interim hearing should be couched with great circumspection, no matter how firmly a judge’s intuition may suggest that the finding will be borne out after a full testing of the evidence.
123. Later, at paragraph 100 their Honours amplified their comments and said:
The intuition involved in decision-making concerning children is arguably of even greater importance when a judge is obliged to make interim decisions following a hearing at which time constraints prevent the evidence being tested. Apart from relying upon the uncontroversial or agreed facts, a judge will sometimes have little alternative than to weigh the probabilities of competing claims and the likely impact on children in the event that a controversial assertion is acted upon or rejected. It is not always feasible when dealing with the immediate welfare of children simply to ignore an assertion because its accuracy has been put in issue.
As a part of the case management in this matter, I regard it as appropriate that I give the parties liberty to apply, and although giving the parties liberty to apply, the matter will return to my list at 9.30am on 21 March 2018 for directions at least, at which time I expect to have:
a)a copy of the report from G Group in respect of the corporate entities; and
b)some indication of the results of some intensive counselling undertaken by Dr E involving B and with her parents which will have taken place.
The Court will allow the parties at or shortly after 21 March 2018 to agitate for:
a)the release of $250,000, which, as my Reasons will reflect, I intend to retain in trust rather than pay to the business at this time as sought by the husband;
b)the orders for mediation;
c)the appointment of an Independent Children’s Lawyer;
d)a psychiatric examination;
e)any further family report (which may now be necessary because of the father’s application for permission to relocate the children’s residence to Perth from the beginning of 2019); and
f)and further interim parenting orders.
Uncontested facts
The husband is 44 years of age and the wife is 43 years of age. They commenced cohabitation in Western Australia in about 1995. There are three children of the relationship, B born in 2017, C born in 2009 and D born in 2012. Although there is a period of separation after leaving Perth from December 2013 until reconciliation in August 2015, the parties were an intact couple until they finally separated under the one roof in August 2016. They physically separated in March 2017.
Since separation, without the benefit of court orders, but with a lot of therapeutic assistance, the parents have shared equally the care of the children until approximately September 2017. The sharing of care was in a five night, five night, two night, two night regime; the effect of which was that each parent had an alternate weekend with the care of the children and some time in the other week.
Although the reasons for it occurring are hotly disputed and cannot be clarified at this stage, in the Court’s view, B “ran away” from the mother’s home to the father’s home on or about 7 September 2017. Since then, the father says attempts to facilitate time between the child and the mother occurred sometimes successfully and sometimes not successfully on 29 September, 18 and 21 October, 18 and 19 November, 2, 3, 6, 16, 17, 18, 27 and 30 December 2017 (which was at the pool incident) and 3 January 2018. It seems on the evidence that the last time the mother spent any time of a substantial nature with B was on 3 January. The evidence raises disputes as to the reasons why the father felt he had a need to collect the child from the mother’s place after three hours, but again it seems to have something to do with the child’s mobile phone.
Contested facts
There are in this case at this early stage a number of contested facts. They include such things as:
a)the father’s alleged violence and/or coercive and controlling behaviour during the relationship between the mother, both of a financial and other nature;
b)whether the father has had or did have a drinking problem and/or a gambling addiction;
c)the effect of the mother’s anxiety issues, and in particular, the level of her therapeutic intervention and outcome;
d)what events/adult behaviour have shaped B’s currently expressed wishes or views;
e)the effect of change to current arrangements for C and D if either party’s proposals was to be adopted; and, until yesterday
f)who would undertake the necessary counselling, which both parties, to their credit, in my view, and with the support no doubt of their lawyers, resolved. Only then will the Court be in a better position to understand whether the distress which B has demonstrated at times by oppositional behaviour is deeply seated or not.
There has been, to again these parties’ benefit and I think credit, no shortage of therapeutic support and advice that has been obtained since separation. They have both engaged individually and in couple’s therapy on a number of occasions. That indicates, of course, both the intellectual capacity of these parents and, I think and would hope, a desire that they get some advice to try and make things better for their children. An attempt to engage Ms H as a counsellor for B did not (but for reasons which are disputed), prove successful, with the only occasion that B engaged with Ms H being on 24 October 2017.
The parties have had the benefit of two family reports (privately funded) from Mr F, an experienced consultant social worker. The first report involved interviews on 15 March 2017, which resulted in a report dated 19 May 2017. At that early stage, which was at about the time of physical separation or shortly before, Mr F recommended a continuance of the arrangements for equal time. Eight months later, Mr F was again engaged in interviews on 9 November 2017, producing a report on 30 November 2017 in which he identified some real concerns about how the position with B had deteriorated since his first report.
Interim parenting orders to be made and why
I have been assisted by the reports of Mr F, but I am not bound by them. I note that the mother adopts his recommendations at paragraph 104 of his second report, namely that the children should live with the mother and spend five nights per fortnight with the father. The mother’s primary position is to seek to adopt that position, as well as a quarantine time in relation to the children. But Mr Kirk of Queen’s Counsel yesterday confirmed that the mother’s alternate position would be to return to the previous five-five-two-two regime in place since March 2017 for all children on an interim basis. The mother is desperate to repair and have the opportunity to repair her relationship with B.
At this stage, Mr F’s assessment is, of course, untested and remains, whilst important evidence, nonetheless really just part of the evidence which the Court is required to consider. It must be weighed with all the other evidence, again untested at this early stage of the proceedings, in making an interim determination.
As noted in exchanges with Counsel yesterday, some issues which would properly form the foundation, along with the observations made by Mr F that now over two reports are disputed, including:
a)whether Mr F had sufficient and accurate information available about the extent of the mother’s extensive counselling with Dr J for her anxiety condition;
b)the report of Dr K, Psychiatrist for the father which was not provided to the Court and available until 22 January 2018 and therefore not available to Mr F;
c)the attempts made and the arising behaviour of the parties and B in encouraging B to spend time with the mother since his last interviews on 9 November 2017; and
d)the absence of any discussion in Mr F’s report on the effect on C and D of a reduction in time (although, as Mr Kirk says, it was only two nights a fortnight) between them and their father and the disruption to what has been their expectation of spending time with him.
The effect of the orders that the parties each wish me to make are that there would be a different power distribution between the parents that would occur. Furthermore, there is no reliable data available to the Court, and it seemed to Mr F, about the attempts to engage Ms H. Clearly we may all be better informed about what is happening with B and why she expresses the strong wishes she does with Mr F in the last interviews. In that regard, it should be noted that even in the first interviews, at or about the time of separation, B expressed a preference to spend more time with her father. However, there was nothing in that first report that suggested she did not wish to or could not see the benefit of a relationship with her mother.
To some degree, as I say, the words of B between the first and second report are telling. The Court is concerned about B getting a view that she has been empowered to make long-term decisions about her life, and that she has both the maturity and cognitive ability to do so. I do not share that view of B’s maturity and cognitive position at this stage, and therefore her wishes, whilst important, cannot be given determinative weight at this early stage, in my view.
Although the term “alienation” is often thrown around loosely, in my view, in family law litigation, it is a term which should be used very carefully. Alienation conjures up notions of overt psychologically damaging behaviour by a parent to rob a child of a fundamental right, that of having an opportunity to develop and maintain a meaningful relationship with the other parent. I can well understand that the mother is not able to see how, if it be the case, her actions, words or behaviour, as seen from the child’s perspective, could have created the hopefully temporary estrangement from B that currently exists.
Hopefully the counselling will give the mother a chance to listen and reflect on what has occurred to date. Similarly, although on the untested evidence it is opined by Mr F that the father’s actions are a significant contributor to the current dilemma with B, I cannot discount that his actions, words and behaviours have not contributed to some of the issues that exist today. In particular, the failure to direct B about how inappropriate it was to read the mother’s text messages and share them with the father lacked, in my view, insight.
It was a perfect opportunity, it seems to me, for the father to remind the child about life’s golden rule, namely, do unto others as you would have them do unto you. I am sure that B would be aghast if she thought her parents were reading all her messages, personal diaries and the like. Although at this stage, B expresses greater emotional attunement with her father, the subtle differences in parenting styles and a lack of any identifiable big issue that has occurred on or about 7 September 2017 or since gives me hope that with the assistance of Dr E, and clear orders which I make today, it is possible to get this family back on track.
If an “alignment” has occurred, it may be as a result of the father’s passive behaviour, some of which was referred to in Mr F’s report as a possibility, rather than any overt or active behaviour by him. I am unable to say so at this stage. A failure to do anything at the moment would result in even greater difficulties arising with B, as Mr F opines, and, most likely then C and D, who must be watching what is occurring in their family with both concern and curiosity.
It is a sad reality of this case that these children have the benefit of quite competent, functional parents, intelligent and capable, who I believe have the capacity to co-parent but who have not been able to do so sustainably to date since separation occurred finally in March 2017. If, through the process that has taken place in these proceedings and in the short time hereafter with Dr E, they are able to reflect on their actions and take some responsibility for the situation their three delightful girls are in, then there is hope for the future.
The Court is very conscious of the requirements of the Family Law Act 1975 which make it clear that the Court should be aware of the effect of its processes and its words in the long-term relationship that these parties will continue to have, however the time is shared and however and wherever in this country they live, and not to, at such an early stage, be seen to be making judgments about them. In that regard, therefore, I specifically choose not to make any further specific “findings” at this early stage, comfortable that to not do so may only enhance the effectiveness of the counselling which will be undertaken.
It is, of course, a part of our adversarial process that the parties feel they must tell the Court so much, and the lengthy affidavits, although very well-prepared and very detailed, can create parties in an oppositional position - an adversarial position, whereas ultimately they will turn, in some form of cooperative way, hopefully, to parenting these three little girls. If my views are regarded as overly optimistic, then I am happy to be so accused. The parenting orders which I pronounce today are less cautious or conservative than the revised position contended for by Mr Williams on behalf of the father.
I do not say, therefore, that they will go without difficulty. However, I believe this is a case where B needs to get the very clear message, that is, the view of the Court should be communicated to her through Dr E, that it is in her best interests to actively engage in spending more substantial time with the mother than has occurred intermittently since September. To do so, of course, is in circumstances where there has been no evidence put before the Court at this stage which identifies any particular risk to the child from spending time with the mother. That is apparent from the continual equal time arrangement that occurs for two younger siblings that have seemingly, save for their curiosities about what is occurring, continued without much difficulty.
I would expect Dr E to do her best to explain to B that her important relationship with her mother and her siblings have been uppermost in the Court’s mind in the orders pronounced today. I am in some ways thankful that the matter has come to the Court so quickly.
I am delighted the parents, hopefully genuinely, have embraced the use of Dr E for the family counselling that has been identified. I also agree with Mr F that something clear and definite needed to happen, and the general increase in time allows for the counselling to run in parallel with the orders I am pronouncing today on an interim basis. I retain some hope that both parents are able to modify, with proper reflection, some of their recent behaviour that will assist B in repairing her relationship with her mother.
The mother has as big a stake in that repair as does the father and B, and she must consider some of what B has been saying to her, even if she does not like it. That is one of the challenges of parenting children as they approach adolescence and teenage-hood. It seems to me that there is some confidence the mother may have been reflective of this in that she no longer seeks an order about neither party providing the children with a mobile phone, as was in her first application. So that is not pressed now and that is a sensible approach, in my view.
So the orders that I pronounce in relation to time are as follows:
a)The child B born … 2007 live with the father and spend time with the mother when her siblings, C and D, are living with the mother, at all reasonable times as may be agreed between the parties but at least as follows:
i)Wednesday, 7 February 2018 from after school to 6.00pm;
ii)Saturday, 10 February 2018 from 2.00pm to 6.00pm;
iii)Sunday, 11 February 2018 from 2.00pm to 6.00pm;
iv)Wednesday, 14 February 2018 from after school to 6.00pm;
v)Wednesday, 21 February 2018 from after school to 6.00pm;
vi)9.00am Saturday, 23 February 2018 to 6.00pm, 24 February 2018 – let me make it clear that I have looked at what I think is the regime in respect of the other children picking these dates – and 23 February, of course, is after the more intensive counselling which I was told yesterday Dr E is likely to engage this family in;
vii)Wednesday, 28 February 2018 from after school to 6.00pm;
viii)Then from after school Friday, 9 March to before school, Monday, 12 March; and
ix)Then from after school, Wednesday, 14 March until before school, Monday, 26 March.
As I say, the matter is returning to me on 21 March, so I have not made orders past that, save that from point of view of planning, the parties shall share equally these school holidays Easter.
I will order that:
a)the children, C and D, live with the parents on an equal time basis unless otherwise agreed as follows:
i)Two nights with the mother commencing 31 January 2018, then five nights with the father, then five nights with the mother, then two nights with the father.
b)The children shall communicate with the parent with whom they are not living at the time at all reasonable times initiated by the children;
c)The mother and the father and B attend upon Dr E for reportable therapeutic counselling commencing 1 February 2018 at such time as are recommended by Dr E and:
i)the cost of all consultation shall be shared equally and paid from a specific fund of $5,000 created by these orders;
ii)the parents, B, and, if recommended by Dr E, C and/or D, shall attend all scheduled appointments for the consultations as required by Dr E to attend; and
iii)the parties shall provide to Dr E a copy of the two family reports prepared by Mr F and a copy of this interim parenting order.
I made some other specific issues orders which were seemingly agreed.
Interim property dispute
I will now deal briefly with the interim property dispute. The property issues were mostly agreed between the parties by the time final submissions were taken. The pool is uncertain, not so much as to identity but as to value. The majority of the pool is constituted by two assets; an interest in a partnership that has a rural property in Western Australia that the husband says has a value, he says, of approximately $1.2 million, and a conglomerate of entities involved in either import, manufacture and wholesale distribution also based in Western Australia.
This is a business that employs approximately 25 people, having in the year ended 30 June 2017, based on the evidence produced by the husband, a profit after expenses and tax for the 2016/17 year of $544,955 of which $361,377 is said to have been drawn by directors. Earlier years appeared to be less profitable.
The husband says in his most recent Affidavit that the business is now struggling as a result of a number of issues which I do not propose to re-state. The wife has not been in a position to respond to those allegations and maybe even investigate them, but the evidence before the Court asserts this is because of a change of trading terms with people who supply materials for the business from China and the pressures from the secured creditor, Westpac, that has a facility of at least $4 million offered to the entities are all causing some adjustment to work practices, including sale of stock at discounted rates to occur.
Now, I accept that the wife does not accept at this stage those issues, and that is the matter which the parties agree should be investigated in some sense by Forensic Accountants, G Group, who will be appointed under my orders as a Single Expert under the Family Law Rules 2004 and where the parties will share equally the costs. They also agreed if they cannot agree on the value of the Western Australian property, to have that valued.
The real contentious issue that remained in the property dispute at this time, noting that, to be fair, both parties saw the parenting issues as the most important, and properly so, related to a use of funds that have been held in trust by Westpac since the sale of the parties’ home in Western Australia. Although some $940,000 was available to the parties from that sale, $200,000 to each party was released, it seems, without court order, but by agreement less than 12 months ago. The amount of $540,000 has remained in trust, I am told, earning interest.
It is noteworthy, in my view, that when one looks at the parties’ current sworn Financial Statements, that neither of them have really much more than 20 per cent of the funds they received less than 12 months ago of $200,000 available to them at this time. Of course, at this stage, one does not know what they have spent their money on, but they have had legal proceedings; they have had therapy and of course, they have living expenses, including things like school fees and the like. Bearing in mind that the parties were until September 2017 managing their children on an almost equal time basis.
It is also acknowledged that both parties have, as a result of their agreement, been receiving at least a payment of $1,500 per week from the commercial entities, and there are other benefits received, including use of cars and health insurance payments. For those reasons, and on the basis of concession by the husband in his material that the wife should be entitled to receive half of the funds currently invested after allowance for the payment of $250,000 to Westpac, the wife did not press nor was it appropriate to press her application for spouse maintenance and/or litigation funding utilising the power in s.80H of the Family Law Act 1975.
It may well be that the husband having given some undertakings and the wife relying on his evidence that he will maintain the payments at this stage to each party of $1,500, that issues of spouse maintenance might arise in the future. Hopefully that will not occur. The husband has, as I indicate, agreed also to give an undertaking in relation to Division 7A loans. The parties were going to work on that overnight and they can tell me about that in a moment.
Mr Kirk QC on behalf of the wife made strong and clear submissions that it would be inappropriate or, put another way, not just and equitable for the husband to obtain any further interim property distribution at this stage. He drew the Court’s attention to the husband’s own document, being the figures prepared by external company accountants L, that as at 30 June 2017, director’s drawings had been taken of $361,377 for that year. He says there has been a failure by the husband indicating how those funds have been used. Whilst that is true, of course, the Court does not know when those funds were received. If the husband’s evidence about the company’s difficulties are correct, then it may well be that some of those funds were received now over nearly two years ago.
In my view, G Group will have the opportunity to consider not only the use of those funds (although part of that time the parties were an intact couple) but more particularly, the profitability of and maintainable earnings of the companies and entities into the future. That would be a necessary assessment to be made adopting the usual evaluation methodology undertaken for an operating entity such as that in this case.
Mr Kirk QC’s submission is that allows for $78,000 paid to the wife during the period to 30 June 2017, but again, that does not take account of what drawings the parties may have taken before March 2017 when they finally separated. The husband, he says, has had the benefit of at least $283,000 which is not explained. He also says that with the pool currently uncertain, and there seems to be some uncertainty about whether or not the rural holding in Western Australia is encumbered or not, and if so, to what level, the Court should be concerned that even at a 50 per cent50 per cent division, the Court will not be in a position to make a just and equitable order that could have any practical effect in this case if any funds were paid to the husband or paid, as the husband proposes, to the bank.
Mr Williams on behalf of the husband disputes those submissions. He says that the funds in which the parties have at this stage a legal interest should be treated in the way which allows for each party to have the benefit of funds that they have an entitlement to. He says that the evidence of the husband compels a finding at this stage almost that if the funds are not paid to Westpac, the whole corporate entity will in some way collapse. I am not so satisfied at this stage of that proposition.
It is noted that the letters tendered (which may be just part of the correspondence and discussions between the husband who does operate the business in Western Australia but from Queensland and Westpac) gives some gloss to why if the bank’s concerns about the loss of equity from the required 70 per cent under the debt covenant to as low as 30 per cent had occurred, they seem not to have done anything about it.
It is also, in my view, appropriate to note that the request for the Court to intervene and look at funds on investment being paid to Westpac only came about by the husband through his Response to the wife’s Application. These parties have been separated now for nearly 12 months. No application to any Court has been made for the release of funds for business purposes before the husband’s Response.
For these reasons, I am not persuaded that on the evidence currently available, $250,000 should be paid to Westpac. However, as I indicated in exchanges with Counsel yesterday, upon receipt of the G Group’ assessment, the Court may be otherwise persuaded that if funds are not paid, then the essential financial security of these parties could be significantly damaged. I also note that in approximately two weeks’ time, the husband is required, he says on his evidence, to provide Westpac with further information about the business dealings and their attitude ought be known when the matter is back before the Court on 21 March 2018. For those reasons, I do not propose at this time to accede to the husband’s request for the payment of $250,000 to Westpac from the invested funds.
I do, however, believe it is just and equitable and appropriate that the husband receive the same drawing on the joint funds that the wife is receiving. I propose to make an order accordingly. I am not satisfied that to do so will put at risk the Court’s capacity to do justice between the parties. Interim distributions are always difficult. The exercise of power under s.79 of the Family Law Act 1975 ought, as authorities make clear, be done once. These parties have themselves voluntarily removed $400,000 from the pool. It is impossible at the current stage to look at all the orders that could be made in this matter. However, I am comfortable that justice and equity could still be done if both parties obtain some of the funds that are currently on investment.
Accordingly, the order I will make in that regard is in these terms:
a)That upon the undertaking of the husband on agreed terms not to conclude the terms of any Division 7A loan agreement presently in place for any of the entities in the husband’s control:
i)the parties shall within seven days sign all such documents as may be necessary to distribute part of the funds currently held in the joint Westpac account as follows:
1.To withdraw $5,000 and hold same in jointly controlled account for the purpose of the therapeutic counselling ordered under order 5 hereof;
2.To retain pending further order the sum of $250,000 in the said current joint Westpac account; and
3.Distribute the balance equally between the parties with the characterisation of those funds to be regarded as the interim property distribution.
I will make orders as indicated yesterday in relation to G Group and the appointment of any expert on any disputed real estate.
The mother brought an application for child support departure. As I indicated to Mr Kirk yesterday, it was both premature, the Court having no evidence and still no evidence, although Mr Kirk said he would have it available, of any assessment. Mr Kirk indicated from the bar table that the wife intends to undertake the administrative processes available under the Child Support (Assessment) Act 1989.
In my view, an application for leave to commence departure proceedings in this Court is necessary before the Court’s jurisdiction can be enlivened. No application for leave was made. In my view, the wife having indicated the intention to undertake quite properly the more cost effective processes under the Child Support (Assessment) Act 1989 for administrative review, the application for child support departure should be dismissed. If at some future stage, depending on other things, the wife wishes to seek leave, then she can do so, of course, and that can be a matter to which the husband can then be heard on.
It is clear in the financial circumstances that it is absolutely imperative that the Court have available to it the report from G Group by 21 March. That is more than six weeks from now. I expect that to be available. I expect it to be filed by one of the parties. I will read it before 21 March. We will then consider on 21 March any further applications on an interim basis when the Court calendar permits.
I make the orders which appear at the commencement of these Reasons.
I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Baumann delivered on 1 February 2018.
Associate:
Date: 7 March 2018
Key Legal Topics
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Family Law
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