Sand and Sand
[2012] FMCAfam 454
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| SAND & SAND | [2012] FMCAfam 454 |
| FAMILY LAW – Property and spouse maintenance proceedings – dispute as to identity and value of assets – dispute as to disposal of assets – whether it is appropriate to include property that no longer exists by way of notional add back – where credit is a significant issue – considerable disparity in earning ability – obligation to make an order which is just and equitable. FAMILY LAW – Parenting – child aged 2½ years – time to be spent with the father – parenting responsibility – best interests of child. |
| Family Law Act 1975 (Cth), Part VII, VIII and Part VIIIB |
| NHC & RCH [2004] FamCA 633; (2004) FLC 93-204; 32 Fam LR 518 C & C [2005] FamCA 429;(2005) 33 Fam LR 414 DJM & JLM [1998] FamCA 97; (1998) FLC 92-816; 23 Fam LR 396 Essex & Essex [2009] FamCAFC 236; (2009) FLC 93-423 Evans & Public Trustee for the State of Western Australia (1991) FLC 92-223; 14 Fam LR 646 Hickey & Hickey [2003] FamCA 395; (2003) FLC 93-143; (2003) 30 Fam LR 355 Milankov & Milankov [2002] FamCA 195; (2002) FLC 93-095; 28 Fam LR 514 AJO & GRO [2005] FamCA 195; (2005) FLC 93-218; (2005) 33 Fam LR 134 Stein & Stein [2000] FamCA 102; (2000) FLC 93-004 Townsend & Townsend (1995) FLC 92-569; 18 Fam LR 505 Walters& Walters (1986) FLC 91-733; (1986) 10 Fam LR 1006 |
Applicant: | MR SAND |
| Respondent: | MS SAND |
| File Number: | CAC 1042 of 2010 |
| Judgment of: | Coakes FM |
| Hearing dates: | 5, 6 & 7 September 2011 |
| Date of Last Submission: | 7 September 2011 |
| Delivered at: | Newcastle |
| Delivered on: | 18 May 2012 |
REPRESENTATION
| Solicitor/Advocate for the Applicant: | Mr D Farrar |
| Solicitors for the Applicant: | Farrar Gesini & Dunn |
| Counsel for the Respondent: | Mr K F Nicholson |
| Solicitors for the Respondent: | Legal Aid ACT |
THE COURT ORDERS THAT:
The husband pay to the wife the sum of $120,000.00 (“the total payment”) such monies to be paid by way of fortnightly instalments at the rate of $750.00 per fortnight (“the instalment payments”) by way of property settlement, first payment to be made not later than 15 June 2012.
That in the event that the husband defaults in three consecutive instalment payments or more than five instalment payments at any time prior to the total payment having been paid to the wife then the total payment shall become due and payable.
That within fourteen (14) days of the date of these orders the wife is to supply to the Solicitors for the husband the BSB number, Account number, the name of the account holder and the name of the financial institution into which monies are to be deposited by the husband pursuant to Order 1 above and production by the wife of a statement of payments into such account by the husband shall be conclusive proof of such payment for the purposes of considering any default pursuant to Order 2 above.
The wife’s application for spouse maintenance is dismissed.
Except as otherwise provided for in these orders, the husband and the wife are each otherwise entitled to retain sole legal and beneficial ownership to the exclusion of the other of all and any real property and personalty including but not limited to motor vehicles, bank accounts, money, shares, jewellery, superannuation and any other personal effects presently in the possession of each of them respectively.
Subject to the above orders, the husband and the wife shall be and remain liable for any debts in his or her own name as at the date of these orders.
In the event that either party refuses or neglects to execute any document or documents whatsoever pursuant to these orders necessary to be executed the Registrar of the Family Courts of Australia at Canberra is appointed pursuant to section 106A to execute such documents in the name of such party and do all acts and things necessary to give validity to the operation of the said document.
IT IS NOTED that publication of this judgment under the pseudonym Sand & Sand is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT CANBERRA |
CAC 1042 of 2010
| MR SAND |
Applicant
And
| MS SAND |
Respondent
REASONS FOR JUDGMENT
Introduction
The husband initiated these proceedings in July of 2010 when he filed an application seeking both interim and final parenting orders in relation to the one child of the relationship [X] born [in] 2009 (“[X]”), a little girl born in the United States of America and who at the time of the hearing was two years and three months of age.
When the wife filed her response in August 2010 she sought interim and final orders in relation to both parenting and alteration of property interests and spouse maintenance.
At the commencement of the hearing, the parenting issues related to how much time [X] should spend with her father and whether there should be a gradual progression as she gets older.
In relation to alteration of property interests and spouse maintenance, there was a stark difference in the positions of each party at the commencement of the hearing. The husband, quite simply, contended that there was no net property upon which any order could be made in favour of the wife, and that if there was any property it would be wholly notional to be brought back in pursuant to the principle of adding back but had been spent justifiably.
It was put on behalf of the husband that the wife’s application for spouse maintenance must fail for the reason that she did not meet the threshold test in section 72.
On behalf of the wife, it was contended that the husband had received monies during the course of the relationship including superannuation, proceeds of sale of a house, proceeds of sale of some shares and proceeds of sale of motor vehicles all of which he had divested to members of his family and which it could be argued was unjustified and which, if the wife was successful could be paid, as to the percentage to which she was entitled by instalments over a period of time.
It was contended on behalf of the wife that she did pass the threshold and she was eligible to bring a claim for spouse maintenance.
At the conclusion of the evidence and on the last day of hearing I indicated what I considered would be appropriate parenting orders which both Counsel after obtaining instructions told me were acceptable to their respective clients. There was consensus about a number of other practical parenting matters. I made orders providing, in essence, that the parents have equally shared parental responsibility for [X], that [X] live with her mother and spend substantial and significant time with her father as defined in the orders and with those periods of time to increase. There were a number of other practical parenting orders included in the orders including the placing of [X]’s name on the airport watch list.
It is to the credit of the parties that they were able to resolve the issues concerning their daughter and I am grateful to the Family Consultant, Ms D who gave very clear and compelling evidence which no doubt assisted the parents to come to a resolution.
Consequently, the contested matters related to alteration of property interests and spouse maintenance.
The respective applications
The husband sought orders that the wife’s application for a property settlement and spouse maintenance be dismissed and that each of the husband and wife be entitled in effect, to retain all items of real property and personalty presently in their possession of whatsoever description.
Toward the end of the hearing, Mr Nicholson on behalf of the wife proposed orders contained in draft minutes of proposed orders in the following terms:
1. The husband pay to the wife the sum of $125,000.00 (the total payment) such monies to be paid by way of weekly instalments at the rate of $1,000.00 per week (“the instalment payments”) by way of property settlement
2. That in the event that the husband defaults in three consecutive payments or more than five payments at any time prior to the total payment having been paid to the wife then the total payment shall become due and payable.
3. That pending payment of the total payment, the husband deliver up his passport to the Registrar of the Family Court of Australia.
4. That Mr Sand born [in] 1973 be restrained from leaving or attempting to leave the Commonwealth of Australia and it is requested that the Australian Federal Police give effect to this order by placing the name of the husband on the airport watch list in force at all points of arrival and departure in the Commonwealth of Australia and maintain the husband’s name on the watch list pending the total payment in full or a further order of the Court.
5. That the husband pay spousal maintenance to the wife in the sum of $500.00 per week for a period of five years from the date of these orders.
6. That the husband pay the legal costs of the wife.
Existing orders
A number of interim parenting orders have been made. On 5 July 2010 an order was made restraining both parents from removing [X] from Australia and an airport watch order was put in place followed by orders on 1 September 2010 that [X] live with her mother and spend time with her father each Saturday from 3.00pm to 5.00pm and each Sunday from 10.00am to 1.00pm and in the presence of a nominated person. Such orders were extended on 1 February 2011 by consent to enable [X] to spend time with her father each Wednesday, with different times depending upon whether he was working but generally until late afternoon or early evening and each weekend alternating between Saturdays and Sundays from 10.00am until 5.00pm with no requirement for supervision and with a discharge of the airport watch order.
There are no interim orders for spouse maintenance or other relevant orders relating to property.
Background
The husband was thirty eight years of age at the time of the hearing. He is a [omitted] by occupation and is able to command a salary or contract payment in the order of at least $4,000.00 per week gross. He currently lives at his sister’s home in [omitted], a suburb of the ACT and on the evidence before me has not re-partnered.
The wife was twenty nine years of age at the time of the hearing. She is an [occupation omitted] working between 8.30am and 4.30pm Monday to Friday with an [omitted] entity and lives in shared rental premises at [omitted], a suburb of the ACT.
[X] lives with the mother and spends each weekday, at the [omitted] Child Facility at [omitted] in the ACT where her mother drops her each morning and generally collects her at the end of the day, with the exception of Wednesday when she spends time with her father at varying times.
The parents gave birth to their first child, [Y] in June 2005 but tragically he died at the age of about ten months in 2006.
Both the husband and the wife were born in India where the husband lived until 2000 when he travelled to the United States of America for work and on the evidence before me was engaged more or less continuously as an [occupation omitted] until March 2010 when he moved to Australia to settle.
The parties married in India [in] 2003 when the husband returned to India for that purpose and accompanied his wife to America shortly afterwards. They had not lived together at all before marriage.
[In] 2009 [X] was born in America and in July 2009 the relationship between the parties broke down with separation taking place on or about 4 August 2009 in America.
Neither of the parties has made an application for a divorce.
In December 2009 the parties made a decision to move to Australia to settle permanently and in January 2010 the wife and [X] moved to Australia for that purpose.
Between January and June 2010 the wife and [X] lived with the husband’s sister Ms V and her husband in their home, then in [omitted]. From the beginning of July until the second week in October they stayed in a friend’s house at [omitted]. The mother and [X] then moved to her present home in [omitted] where she boards with a husband and wife and their one adult child at home. The wife has the use of two bedrooms and bathroom with other shared facilities.
At the end of March 2010 the husband moved to Australia to take up permanent residence and in April 2010 obtained employment with [omitted] which continued until June 2010. Between July and 5 November 2010 the husband was employed by an [omitted] firm, largely in Sydney returning to the ACT at weekends. Between July and November 2010 the husband rented shared accommodation in [omitted].
On arrival in Australia the husband stayed with his brother Mr S at their home in [omitted] where he stayed until June 2010. For a few days at the end of June the husband and wife and [X] stayed at a hotel in [omitted] at the end of which the husband moved to and lived with his sister Ms V until November or December 2010 at her family home, then at [omitted]. At the end of 2010 the husband found his own temporary accommodation in the ACT, but at the time of hearing had resumed living in his sister’s home.
The parties did not live together in Australia but spent limited time with each other in the sense of enabling [X] to spend time with her father and generally on a daily basis between the time the father arrived in Australia and June of 2010.
In July 2010 the wife brought an application for an apprehended violence order against the husband and members of his family and interim orders were made but not subsequently made on a final basis when the wife did not attend court to give evidence at the final hearing.
In November 2010 the husband ceased work for a period and gained further employment in about February or March 2011 continuing until the time of the hearing.
In February 2011 the wife commenced work in [omitted].
The husband is not legally aided in these proceedings. The wife is legally aided.
The husband’s case
The husband’s case is that he has properly accounted for those monies which he received from the sale of various assets and his superannuation and that he was obliged to meet certain expenditure in America and when he came to Australia and that there is currently no net property available for division between the parties.
The husband also contends that the wife, during the course of the marriage, received various assets, primarily in the form of jewellery manufactured from gold which is of a considerable value and which the wife retains, and had the benefit of savings of her own at separation.
The wife’s case
The wife’s case is that the husband has received the benefit of the net proceeds of sale of the former matrimonial home in America, superannuation monies, proceeds of sale of motor vehicles, proceeds of shares and other monies for which he has not accounted to her or given any satisfactory explanation as to their disposal or has spent part on his legal fees and has therefore had the use of such funds and which should be treated as notional property and added back to a pool of assets.
The issues
It seems to me the issues are these:
i)What are the contributions made by each of the parties from cohabitation to the date of final separation and the weight to be attached to such contributions;
ii)What are the contributions from the date of final separation until the time of hearing and the weight to be attached to such contributions;
iii)If monies were realised from the sale of assets, what has happened to those monies and in whose hands were they at the time of disposition, and can the disposition be satisfactorily accounted for. If not, what is the value of such monies and is it appropriate to add back such monies as notional assets;
iv)What are the relevant section 75(2) factors, if any, and what adjustments are required, if any, in favour of either party;
v)If it is established that there are notional assets to be added back and brought into account, and they are or were in the possession of the husband, is it appropriate to make an order, if the wife is entitled to such an order for alteration of property interests, that such amount be paid to the wife by instalments;
vi)Can the wife establish a need for spouse maintenance in the first instance, and if that need is established, what is the capacity and ability of the respondent husband to pay such maintenance; and
vii)Should there be any adjustment in respect of legal costs paid by either party, and how should such adjustment be achieved.
The evidence
In the husband’s case I read the following documents:
a)Affidavit of the husband affirmed and filed 15 August 2011;
b)Further amended financial statement of the husband affirmed and filed 15 August 2011;
c)Affidavit of the husband’s brother Mr S affirmed 3 November and filed 4 November 2010;
d)Affidavit of the husband’s sister Ms V affirmed 3 November and filed 4 November 2010.
e)Affidavit of the husband affirmed 11 October 2010 and filed 11 October 2010 (Exhibit F6 33 paragraphs).
In the wife’s case I read the following documents:
a)The wife’s affidavit affirmed and filed 12 August 2011;
b)The wife’s financial statement affirmed 26 August and filed 27 August 2010.
I also had the benefit of the family report by Ms D, a family consultant attached to the Canberra Registry who interviewed both parents and observed [X] with each parent. The family report was published on 28 July 2011. Ms D gave evidence and was cross examined by both counsel. I found the family report and Ms D’s evidence to be most constructive.
I also had the benefit of sworn oral evidence from both the husband and the wife and was able to observe each of them in the witness box.
I also had the benefit of appropriate and comprehensive submissions from Mr Farrar on behalf of the husband and Mr Nicholson on behalf of the wife.
There were a number of exhibits.
The relevant law
Parenting
I have regard to Part VII of the Family Law Act 1975 (Cth). The significant sections are, and to which I must have regard are section 60CA which provides that:
“In deciding whether to make a particular parenting order in relation to a child, a court must regard the best interests of the child as the paramount consideration.”
I must consider, in determining a child's best interests, the matters set out in s.60CC. They are broken down into two primary considerations:
“(2) The primary considerations are:
a) the benefit to the child of having a meaningful relationship with both of the child's parents; and
b) the need to protect the child from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence.”
There are a number of additional considerations in s.60CC(3) to which I must have regard insofar as they are relevant and I must also have regard to s.60CC(4).
I must also have regard to s.60B which sets out the objects of Part VII and the principles underlying those objects. I must have regard to s.61DA which provides for a presumption of equal shared parental responsibility when a parenting order is made, save that the presumption does not apply when there are reasonable grounds to believe that there has been abuse of the child or family violence. The presumption may also be rebutted if there is evidence to satisfy the Court that it would not be in the best interests of the child for the child's parents to have equal shared parental responsibility for the child.
The relevance of the presumption of shared parental responsibility where it does apply or is found to apply is that the Court is then obliged to consider making an order if it is consistent with the best interests of the child and reasonably practicable for the child to spend equal time with each of the parents. If equal time is not in the best interests of the child or reasonably practicable, the Court must go on to consider making an order, if it is consistent with the best interests of the child and reasonably practicable, for the child to spend substantial and significant time with each of the parents[1].
[1] Subsection 65 DAA Family Law Act1975
It seems to me that there is a shift toward the Court being required to consider in a much more practical manner how a child's development can be nurtured and promoted by being exposed to and enjoying in a beneficial sense all the aspects of living with each parent. It seems to me that this requires an involvement in the whole of the ordinary household routine where it is appropriate. See the Full Court decision of Goode v Goode[2].
[2] Goode & Goode [2006] FamCA 1346; (2006 FLC 93-286; (2007) 36 Fam LR 422
I have considered also the decision in Mazorski and Albright[3], a case involving relocation where Her Honour Justice Brown after setting out the definition of “meaningful” and “meaning” said at paragraph 26:
“What these definitions convey is that “meaningful”, when used in the context of “meaningful relationship”, is synonymous with “significant” which, in turn, is generally used as a synonym for “important” or “of consequence”. I proceed on the basis that when considering the primary considerations and the application of the objects and principles, a meaningful relationship or a meaningful involvement is one which is important, significant and valuable to the child. It is a qualitative adjective, not a strictly quantitive one. Quantitive concepts may be addressed as part of the process of considering the consequences of the application of the presumption of equally shared parental responsibility and the requirement for time with children to be, where possible and in their best interests, substantial and significant”.
[3] Mazorski & Albright (2007) 37 Fam LR 518; at 526
In the recent Full Court decision of McCall & Clark[4] their Honours Bryant CJ, Faulks and Boland concluded that there are three possible interpretations of Section 60CC(2)(a) finding that the preferred interpretation of the benefit to a child of a meaningful relationship is “the prospective approach” although, depending upon factual circumstances, the present relationship approach may also be relevant[5].
[4] [2009] Fam CAFC 92; (2009) 41 Fam LR 483
[5] Paragraph 119
The Full Court rejected the notion that a Court should assume there is a benefit to all children in them having a meaningful relationship with both parents, finding that if the legislature had intended to elevate the benefit to a child of a meaningful relationship to a presumption, then it would have said so in clear and unambiguous language[6].
[6] Paragraph 120
Her Honour Justice Bennett discussed the terminology in G & C[7] finding that the enquiry was a “prospective” one which requires the Court to evaluate the extent to which a meaningful or significant relationship with both parents is going to be of advantage to a child.
[7] G & C [2006] FamCA 994
The Full Court accepted as appropriate the interpretation of “meaningful relationship” set out by Brown J in Mazorski (supra), and consistently with their conclusions also agreed with the reasoning of Bennett J in G & C (supra).
The Full Court also said[8]:
“In reaching these conclusions, we also considered the legislation requires a Court to focus on the benefit to the child of a meaningful or significant relationship. No doubt in the majority of cases there will be a positive benefit to a child of having a significant relationship with both parents, but there will also be some cases where there will be no positive benefit to be derived by a child by a Court attempting to craft Orders to foster a relationship with one parent if this would not be in the child’s best interests.”
[8] Paragraph 122
Consequently, I conclude that I am bound by the existing authorities, some of which I have referred to in the preceding paragraphs, and subject to the facts of this particular case. It seems to me that the amending legislation provides a new focus and emphasis on both parents being not only involved but substantially involved with the lives of their children except when it is or would be contrary to the child’s best interests.
Alteration of property interests
The Court’s approach to determining property disputes is well established. In Hickey and Hickey[9] the Full Court of the Family Court of Australia described the approach in the following terms:
“The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determine and resolve what order is just and equitable in all the circumstances of the case.”
[9] [2003] FamCA 395; (2003) FLC 93-143; (2003) 30 Fam LR 355.
The addition of Part VIIIB to the Act provides for a superannuation interest to be treated as property for the purposes of paragraph (ca) of the definition of matrimonial cause under Section 4 of the Act[10]. Those amendments now enable the Court to make orders with respect to superannuation interests.
[10] See Section 90MC of the Act.
The Full Court’s decision in the matter of C & C[11] suggested some practical implications for the treatment of superannuation interests. As a consequence of the decision the Court has a discretion to treat the superannuation assets of the parties as part and parcel of the other property and in this case it is appropriate that I do that. There is no good reason on the material before me to consider the superannuation as a separate asset and that, in my view, is especially applicable where there are few other assets to be considered.
[11] [2005] FamCA 429; (2005) 33 FamLR 414.
Spouse maintenance
Put simply, it is necessary for the wife to establish a need for spouse maintenance in the first instance, and if that need is established, it is then a question of assessing the capacity and ability of the respondent husband to pay such maintenance.
These principles are embodied in Section 72(1) of the Family Law Act 1975 (Cth) which provides the threshold test and is in the following terms:
“(1) A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2). “
Section 75(1) enables the Court to make such order as it considers proper for the provision of maintenance.
Section 75 prescribes the matters to be taken into account when considering an application for spouse maintenance. It seems to me that the relevant matters to be taken into account pursuant to Section 75(2) in this particular case are as follows:
“(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party's role as a parent; and
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
(p) the terms of any financial agreement that is binding on a party to the marriage.”
Evidence and findings of fact
Findings of fact are made on the test of balance of probabilities, having regard to the evidence and my observation of the parties and their witnesses. In these reasons for judgment, unless stated to the contrary, statements of fact constitute findings of fact.
Discussion as to parenting matters
It was not in dispute between the parents that [X] should live primarily with her mother. The father proposed equally shared parental responsibility but the mother sought sole parental responsibility. Each parent proposed different periods of time for [X] to spend with her father, the mother essentially proposing a cautious approach in her draft minutes of proposed orders filed on 31 August 2011 with no overnight time until she attains the age of 3 years then a gradual progression to alternate weekends from the age of 4 years in May 2013.
The father sought in his draft minutes of proposed orders filed on 29 August 2011 an immediate commencement of overnight time at two nights per week with a progression to three nights per week between the age of 3 years and 5 years and each alternate weekend and half of school holidays from the age of 5 years.
Having heard the evidence of both parents in cross examination but particularly that of Ms D, it seemed to me appropriate to give an indication to Counsel of what I considered to be appropriate and to enable them to address their submissions accordingly.
It seemed to me, and I find on the evidence that both parents have much to offer to [X] and both are devoted to her. I find on the evidence that the father clearly is not only able but wants to spend time with his daughter and has missed little or no opportunity to do so.
The evidence establishes that the impediment to the parents of establishing a better relationship with each other and particularly to be reflected in more successful communication about their daughter is the very high degree of reciprocal mistrust which became abundantly clear during the evidence relating to property matters.
There was however evidence before me that suggests that both parents are conscious and well aware of the need to be able to talk constructively to each other about their daughter.
Both parents have been undergoing personal counselling and both told Ms D that they would agree to attend mediation over their parental communication. It seems to me these are significant steps forward. For this reason alone, there is no good reason or need for the mother to have sole parental responsibility for both the long term and short term decisions concerning [X]’s care, welfare and development. The evidence does not support such a finding.
To the contrary, I find it is appropriate for the parents to have equal shared parental responsibility for the long term decisions and to consult with each other with a view to making a genuine effort to come to a joint decision about matters concerning her education, her religious and cultural upbringing, her health, her name if it becomes an issue and changes to her living arrangements which may make it significantly more difficult for her to spend time with either parent. I have some confidence they can do this.
So far as the primary considerations in section 60CC are concerned, I find on the evidence there is a very considerable benefit for [X] to have a meaningful relationship with both her parents and this can be achieved by her living primarily with her mother and spending gradually increasing periods of time with her father.
As to the second primary consideration, there is a need to protect [X] from physical or psychological harm from being subjected to or exposed to abuse, neglect or family violence. Whilst there are a number of allegations in relation to family violence, I find on the evidence that the prospect of recurrence as between the parents, if it had occurred, is most unlikely.
I was left with the distinct impression that neither parent would willingly expose [X] to risks of this nature.
It seems to me, and I find on the evidence that both parents recognise the importance of [X] continuing to develop a close and loving relationship with the other parent and to desist from denigrating the other parent or members of that parent’s family in the presence of [X]. It is appropriate that an injunction be made in those terms. I am satisfied that both parents will comply with such an injunction.
Given the evidence of Ms D, I find there is likely to be no adverse effect to [X]’s present circumstances and her relationship with each parent if she spends gradually increasing time with her father with occasional overnight time to commence in three months from the date of the hearing, initially once per fortnight then from her third birthday weekly, and then from the age of three and a half years each alternate weekend overnight and each Wednesday overnight. In my view, that enables [X] to benefit from a more meaningful relationship with her father for which the foundation is now laid.
Both parents live in the Canberra district and there is no practical difficulty or considerable expense in implementing such arrangements.
I am satisfied that both parents are able to provide not only for [X]’s day to day physical needs but also her emotional and intellectual needs. The evidence does not establish there is a risk of either the father or the father’s extended family in Canberra undermining [X]’s relationship with her mother or seeking to damage that relationship.
It is unfortunate that the parents lack of trust of each other has, in my view, precluded them from always putting [X]’s interests first and thus permitting the dispute between them about property matters to foment which in turn has disabled them from overcoming the breakdown in their trust of each other or from being able to embrace ways of rectifying this voluntarily.
It is however encouraging that during the course of submissions, Counsel told me that both parents were willing to agree to an order to see a family dispute counsellor or consultant at the local agency to discuss with each other the way in which their communication could be improved with a view to diminishing their high level of conflict and with a view to their mutual trust of each other being improved.
I was left with the distinct impression from the manner in which both parents gave their evidence that each recognises the benefits of this intervention which suggests that both are keen for it to be successful so as to improve their relationship with each other about their daughter.
There is no current family violence order in force.
Whilst it would be preferable to avoid the need for further proceedings, it is not possible on the present evidence to consider appropriate parenting arrangements for [X] beyond the age of five years or when she begins her formal education in primary school. She will grow a lot between now and then both physically and intellectually and emotionally. It seems to me that if both parents perceive and accept that [X]’s gradually increasing time with her father are in her best interests then there is every likelihood that they will be able to consider further parenting arrangements without the need to return to court.
I have some confidence that if their reciprocal wish to improve communication is fulfilled, and if their trust in each other is enhanced upon the conclusion of these proceedings, then there is every likelihood that they will be able to agree on future arrangements for [X].
Culturally, I am satisfied that each parent is conscious of the importance of educating [X] in Indian culture, background and beliefs. I indicated to Counsel that in my view it was appropriate that [X] spend time with her father each alternate Saturday or Sunday but preferably both from 8.00am until 6.00pm each alternate weekend with each Wednesday continuing as it was at the time of the hearing and with progressions as I outlined to Counsel as referred to earlier in these reasons.
There was discussion with Counsel about a number of other practical parenting orders and implementation, and after a short adjournment during which Counsel obtained instructions from their clients I was told that the parties would accept the orders I had foreshadowed together with some other practical parenting orders.
It was for these reasons I made final parenting orders on the third day of the hearing with reasons to follow.
Discussion as to spouse maintenance
The evidence establishes that in February 2011 the wife obtained employment as an [omitted]. Initially, she received by way of salary $1,550.00 per fortnight after tax and superannuation. At the time of the hearing, she had obtained a promotion and her evidence was to the effect that her increase in salary, which was imminent, would be to approximately $1,610.00 per fortnight net to her and therefore the equivalent of $805.00 per week.
In cross examination, the wife acknowledged that her new rate of annual pay would be $54,956.00, or $2,113.69 per fortnight gross, and whilst it was suggested that perhaps she would receive more than $805.00 per week net on such a salary, I accept the wife’s estimate.
The wife receives from the husband weekly child support of $313.00 pursuant to the current child support assessment applicable at the time of the hearing and a child care allowance of $80.00 per week.
The wife and [X] share accommodation with the owners of a home in [omitted].
I accept the mother’s evidence that she has the following weekly expenses for herself and [X]:
a)Rent $300.00
b)Utilities $50.00
c)Net child care after allowance $120.00
d)Extra child care $36.00
e)Food $150.00
f)Buses/petrol $60.00
g)Total $716.00
There was no evidence adduced by the wife of her other current and ordinary recurring weekly expenditure. It seemed to me appropriate therefore to refer to her financial statement upon which she relied sworn 26 August and filed 27 August 2010.
It follows therefore, and I find on the balance of probabilities that the wife has the following recurring weekly expenditure:
1. Household supplies $20.00
2. Telephone $15.00
3. Clothing and shoes $20.00
4. Chemist/pharmaceutical $10.00
5. Books and magazines $5.00
6. Hairdressing and toiletries $15.00
7. Total $85.00
It follows therefore that the evidence as to the wife’s expenditure is $801.00 per week.
During cross examination, the wife said that she incurred additional expenditure for pre paid internet and mobile telephone use.
The wife has a motor car but no expenses are claimed for registration, maintenance, repairs and insurance.
It seems to me appropriate to apportion the wife’s total expenditure as between her and the costs of supporting [X] and I assess it is reasonable to do so upon the following basis as expenses for [X]:
a)Rent $150.00
b)Utilities $25.00
c)Child care $120.00
d)Food (33%) $50.00
e)Apportionment of travel costs $15.00
f)Clothing and shoes $10.00
g)Chemist and pharmaceutical $5.00
h)Toiletries $10.00
i)Total $385.00
It follows that if the amount of $385.00 is deducted from the wife’s total weekly expenditure of $801.00 the balance of $416.00 is attributable to the wife’s reasonably necessary expenditure for herself.
Since the costs of supporting [X] exceed the amount of child support paid by $72.00 it is appropriate to add that amount to the wife’s weekly expenditure which therefore gives a total of $488.00.
It is of course not wholly appropriate to consider the wife’s costs with mathematical precision to this degree.
The evidence does not enable me to establish with accuracy the wife’s current actual weekly expenditure for herself but doing the best I can it is in the order of not less than this amount and probably more but certainly a lot less than her net income of $805.00 per week.
On her behalf, Mr Nicholson submits that the evidence establishes that the husband has a gross annual income of $228,000.00 compared with that of the wife at $55,000.00 which, if the wife wanted to be a full time homemaker and parent to [X] may suggest she would clearly have an entitlement to spouse maintenance and that her current circumstances of being obliged to work to support herself and [X] nevertheless do not preclude a claim for spouse maintenance given that section 72 of the Act refers to:
“… that other party is unable to support herself adequately by reason of having the care and control of a child of the marriage who has not obtained the age of eighteen years…”.
Mr Nicholson submits, with some force, the wife is obliged to live in shared accommodation as a boarder for the reason that her financial circumstances do not permit her to rent independently.
Mr Nicholson also submitted that even with a gross income of $55,000.00, when compared to that of the husband, that does not preclude her claim for spouse maintenance succeeding for the reason that she is not obliged to live at subsistence level when compared with his income.
I do not accept these submissions. The evidence is that the wife was successful in obtaining employment after an unpaid three month period of training, she has received an increase in pay after nine months or thereabouts and she worked in America in a similar field as I understand it before moving to Australia. Consequently, I find on the evidence the wife has both a capacity and ability to work and wants to work. It is not part of the wife’s case and she did not adduce any evidence that she would rather stay home and be a full time homemaker and parent to [X].
[X] is in day care each day, there is no evidence that she is suffering as a consequence of such day care, and no evidence was adduced by the wife as to what it may cost her to rent a home independently and neither was there any evidence as to what a realistic standard of living for her would be.
Mr Nicholson submitted, in effect, that the wife was obliged to tailor her expenses to meet her income. It is trite to make the observation that this is a sound, sensible and wise way to conduct one’s financial affairs if one is to avoid debt.
There is no evidence that the wife and [X] have suffered or wanted for anything to meet their day to day needs as a consequence of the wife no doubt budgeting carefully and spending her income wisely.
The wife discloses no liabilities in her financial statement nor her affidavit.
If I am to make an order for the husband to pay the wife spouse maintenance as she seeks, in the amount of $500.00 for a period of five years, I must be satisfied that the wife has established a need for spouse maintenance. For the reasons given above, the wife has failed to establish such a need. Consequently, her claim for spouse maintenance must fail and I dismiss that part of her application.
The evidence of the witnesses and credit
The only witnesses in the property proceedings who gave evidence in cross examination were the parties.
The tenor of the affidavits filed by both parties suggested, at the highest, misuse of monies by the other party, and at the very least inappropriate use of proceeds of sale of assets existing at separation and either a non disclosure of the use of such assets or a failure to account properly for the proceeds of sale or misapplication of proceeds of sale.
There were many factual matters put into issue during the course of the hearing by each party which necessitate findings based on the material and the evidence before me.
The husband was not a good witness. Some of his answers in cross examination were either vague, implausible or non-sensical. The husband was warned repeatedly by me to answer questions put to him in cross examination when he failed to do so. I am left with the distinct impression the husband sought to avoid answering some questions truthfully. I am also left with the distinct impression that some of the transactions to which the husband deposed are artificial and which lead me to the conclusion that the husband has transferred monies to members of his family without justification possibly to be held for him until these proceedings are concluded at which time he can request their return or to be credited against further family financial transactions. It is this which is the nature of the artificial transactions.
In comparison with the husband, the wife was a good witness but she also avoided answering some questions but to nowhere near the same extent as the husband.
In comparison with the husband, the wife gave clear answers and was not shaken on her affidavit evidence. I have preferred the wife’s evidence where there was conflicting evidence about the same issue.
Assets, liabilities and financial resources
The property of the parties at the time of the hearing
The Court is required to make a finding as to the property of the parties at the time of the hearing. There are circumstances when the Court has found to have justified the inclusion of property that no longer exists. Similarly, the Court has sometimes found that debts that do exist should not be included in the list that goes to make up the net pool of assets.
The Full Court of the Family Court of Australia in AJO & GRO[12] found there were three clear categories of cases, which the Full Court identified, where it has been determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist, namely:
a)Where the parties have expended money on legal fees which if not added back would permit the pool of available assets for distribution to the parties to be diminished by monies spent on their costs up to the date of trial unless it is inappropriate to do so;
b)Where there has been a premature distribution of matrimonial assets, when for example one party has had the benefit of the proceeds of sale of an asset of the marriage when it is then appropriate to bring such asset back into the pool of assets on a notional basis;
c)Where financial loss incurred by the parties or either of them in the course of the marriage should be shared by them except when one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets or when one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
[12] [2005] FamCA 195; (2005) FLC 93-218; (2005) 33 Fam LR 134.
Assets at separation
It is the husband’s case that he spent some of the monies he realised from the sale of assets on reasonably incurred necessary living expenses both in America and here in Australia for himself and his wife and daughter. Consequently it is necessary to determine how funds realised by the husband were applied in that fashion.
The evidences establishes that at the time of separation in August 2009 the assets of the husband and the wife comprised the following of which the husband had possession or control of all but the last item:
| Contributions to [omitted] College Tuition Plan established by the husband for [X] |
| Former matrimonial home in the name of the husband at Property M |
| 1996 Honda Accord Motor Vehicle |
| 2004 Honda Odyssey Motor Vehicle |
| The husband’s superannuation benefits with [W] |
| Household furniture and furnishings |
| Shares in investment portfolio held with [P] |
| Account with [C] Bank |
| Monies on deposit in the name of the wife in a bank |
Liabilities
The evidence establishes that the following liabilities existed at separation:
| Mortgage to [T]-mortgage over the home at Property M | Approx: US $202,622.46 |
| Second mortgage to [A] Bank over the home at Property M | Approx: US $4,003.06 |
| Loan from Am-Honda relating to the purchase of the Honda Odyssey Motor Vehicle | US $7,900.00 |
The first two liabilities referred to above were discharged upon the sale of the former matrimonial home and the third liability was discharged upon the sale of the Honda Odyssey motor vehicle.
Net value of assets at separation in August 2009
The evidence does not enable me to determine with any accuracy the net value of the assets at separation.
Dealings with assets post separation
Sale by husband of shares in [P]
The evidence as to the existence of this fund is found in annexure “D” to the wife’s affidavit affirmed and filed 12 August 2011.
The evidence establishes that this fund is identical with an asset which the husband describes as his “US superannuation retirement account [R]”.[13]
[13] Paragraph 102 of the husbands affidavit affirmed and filed 15 August 2011
The evidence establishes that on 15 September 2009 the husband withdrew the sum of US$14,000.00 from such account. The husband deposes to this leaving a balance of about US$2,000.00 in such account and which the husband discloses as an asset in his further amended financial statement sworn and filed 15 August 2011.[14] The same amount is disclosed in the husband’s outline of case document.
[14] Part J superannuation paragraph 45
In his affidavit affirmed 15 August 2011 the husband does not disclose what he did with the amount of US$14,000.00.
In his affidavit affirmed and filed 11 October 2010[15] the husband deposes as follows:
“In one retirement plan I held shares to the value of US$14,000.00. I withdrew the funds to pay my legal fees in US and manage my household expenses it was not enough as I was on unpaid leave.”
[15] Exhibit F6 paragraph 22
The legal costs incurred by the husband appear to relate to criminal complaints against the husband arising from incidents on 3 and 4 August 2009 when the wife asserts she was assaulted by the husband[16] and giving rise to the District Attorney’s office in [omitted] County bringing charges against the husband for two charges of misdemeanour battery, two charges of disorderly conduct and intimidation of a victim and all separately described as forms of domestic abuse.
[16] Paragraphs 17-25 of the wife’s affidavit filed 12 August 2011
The husband deposes that a restraining order was made against him which precluded him from occupying the home and which resulted in him living, after a while, in rented premises until he moved to Australia. The husband denies assaulting or abusing the wife and further denies having been threatening or intimidating. The husband deposes to the criminal proceedings being listed for a final hearing in February 2010 when the charges against him were dismissed. The wife understands the dismissal arose from her not giving evidence as a consequence of having then moved to Australia in January 2010.
In annexure GG to the husband’s affidavit, section 2, the husband includes as an item of expenditure US$18,000.00 for “US court case expense”. In the absence of any evidence to the contrary, I find that such expense related to the husband’s payment to lawyers to defend the domestic violence charges in the United States.[17]
[17] Paragraph 102 of the husband’s affidavit affirmed and filed 15 August 2011
Annexure “D” to the wife’s affidavit affirmed and filed 12 August 2011 confirmed that an amount of $14,000.00 was withdrawn from the monies invested with Principal Life Insurance Company.
On the balance of probabilities, I find that the sum of US$14,000.00 which was withdrawn was in existence at or about the time of separation and that it had accrued from investments made by the husband during the currency of the marriage and prior to separation more likely than not from earnings from his employment to which he deposes in his affidavit material.
Had the husband not spent these monies on legal fees I find the shares represented an asset to be properly considered and brought into account as property of the parties at separation.
In 2004 in NHC & RCH[18] the Full Court of the Family Court of Australia considered a number of Full Court authorities concerned with notionally adding back paid legal fees to the pool of assets.
[18] NHC & RCH [2004] FamCA 663 (2004) FLC 93-204; 32 Fam LR 518 (Referred to as NHC v RCH)
The Full Court, in summarising the earlier authorities considered that certain principles could be derived from the case law as follows:
“56. In summary, we consider that the above mentioned decisions of the Full Court establish that, while the treatment of funds used to pay legal costs remains ultimately a matter for the discretion of the trial Judge, in determining how to exercise that discretion, regard should be had to the source of the funds.
57. If the funds used existed at separation, and are such that both parties can be seen as having an interest in them (on account, for example, of contributions), then such funds should be added back as a notional asset of the party, who has had the benefit of them.
58. If funds used to pay legal fees have been generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be added back as a notional asset; nor would any borrowing undertaken by a party post-separation to pay legal fees be taken into account as a liability in the calculation of the net property of the parties. Funds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement may need to be looked at differently from other post-separation income or acquisitions.
59. Outstanding legal fees themselves are generally not taken into account as a liability.
60. If in the exercise of the discretion, it is determined that legal fees already paid should be taken into account as a notional asset, then normally any liability associated with the acquisition of the monies used to pay the legal fees should also be taken into account.”
In all the circumstances, and in the exercise of my discretion, I find it is appropriate to bring the amount of US$14,000.00 into account as a notional asset.
My reasoning is that it is immaterial that such fees related to the father’s defence of criminal proceedings brought against him by the District Attorney’s office arising from complaints made by the wife. By analogy, it is no different from legal costs paid in family law proceedings, opposing, for example, an injunction for the personal protection of a party to the marriage pursuant to section 114(1)(a) or an injunction sought by a wife to restrain a husband from entering or remaining in the matrimonial home or the premises in which the wife resides pursuant to sub-section (b) of the same section. It seems to me that the costs incurred by the husband arise from circumstances related directly to the parties and their marriage, and for that reason are to be brought into account.
I find also that the wife had an interest in such funds as funds existing at separation and to which the wife could, as part of her case, claim a contribution pursuant to section 79(4), whether directly or indirectly or in her role as homemaker and parent.
Sale of home at Property M
The sale of the former matrimonial home was completed by the husband on 24 May 2010. The net proceeds of sale after discharge of the two mortgages and costs of sale were US$35,972.07[19].
[19] Annexure “R” to the husband’s affidavit affirmed and filed 15 August 2011
This amount was deposited to the husband’s bank account with [C] on 25 May 2010[20].
[20] Exhibit M1
In his affidavit, the husband deposed to the net proceeds of sale being approximately US$20,972.00 after paying for the borrowings referred to in paragraph 90[21].
[21] Paragraph 90 of the husband’s affidavit
The only borrowings referred to in paragraph 90 of such affidavit is a mortgage of approximately US$203,000.00.
Annexure “R” refers to the amount paid to [T] to discharge the first mortgage and which was US$202,622.46, and the amount paid to [A] Bank to discharge the second mortgage was US$4,003.06. Consequently, the husband was either careless or at the very least inaccurate as to his assertions in paragraph 90.
In paragraph 89 of his affidavit the husband sets out work done to the home to prepare it for sale all of which he asserts he arranged to be done and paid for. The husband asserts the total costs for repair, renovation and maintenance were about US$15,000.00 which he asserts were paid from borrowings and credit cards.
In Annexure “GG” to his affidavit the husband sets out in section 1 particulars of amounts totalling US$14,044.00 which he asserts he spent on the house to prepare it for sale[22].
[22] Paragraph 99(a)
Annexure “Q” to the husband’s affidavit comprises receipts for some of the expenses he asserts were incurred.
Some of the receipts or financial documents appear irrelevant. For example, there is a copy document numbered 551 in the top right hand corner, perhaps a counterfoil for a transaction with a financial institution showing an amount of US$5,000.00 but dated 18 September 2007. There is an invoice number [omitted] from [omitted] Heating and Air Conditioning LLC dated 12 August 2008 for installation of air conditioning in part noted as being financed to an amount of US$2,799.00 but showing a furnace tune up at a cost of US$58.08 paid in cash.
A receipt for [omitted] Snow Ploughing service dated 20 March 2010 for US$50.00 is included twice.
Of the items of expenditure set out in Annexure “GG” the copy invoices for the kitchen counter top replacement total US$1,892.00 whereas the husband claims an expense of US$2,000.00.
The amount claimed as an expense for kitchen renovation and appliances loan of US$2,652.00 appears to relate to an invoice from [business omitted] dated 28 February 2010 and a payment on 2 June 2010 for US$2,651.97.
Only one receipt for a total of US$140.00 is produced for lawn care but with the amount claimed as US$400.00.
One receipt is produced for snow clearance in the amount of US$50.00 but the amount claimed is US$250.00.
The amount claimed for basement water damage is US$3,850.00 whereas the actual cost was US$3,862.21.
The amount claimed for professional cleaning of carpet is US$350.00 whereas the receipt evidences a payment of US$278.95.
For A/C and heater tune up an amount of US$242.00 is claimed and the actual expense is US$242.78.
Consequently, there is a little more than US$5,000.00 claimed for which there is no evidence as to costs being incurred nor evidence of payment.
The husband’s assertion that the total repair, renovation and maintenance costs were paid from borrowings and credit cards is not established on the evidence. In particular, the husband gives no evidence as to the identity of any financial institution or person from whom monies were allegedly borrowed and he did not adduce any evidence at the hearing as to what amounts were paid by credit card.
The evidence establishes that the amount paid for kitchen renovation and appliances loan of US$2651.97 paid on 2 June came from the proceeds of sale of the home[23].
[23] Exhibit M1
It seems to me that the appropriate amounts to be allowed for reasonable and proper expenditure for the preparation of the home for sale are as follows:
Water damage repair
US$3,862.21
Kitchen counter top replacement
US$1,892.00
Kitchen renovation and appliances loan
US$2,651.97
Total
US$8406.18
It follows that the amount to be brought into account as the net amount from proceeds of sale of the home is therefore US$27,565.89.
It seems to me that the other amounts claimed by the husband, to the extent that they are substantiated are normal running expenses to maintain the home and that the unsubstantiated expenses are to be included in the same fashion. The evidence does not enable me to make a finding that such expenses were not incurred but at the very least it is doubtful.
Borrowings by Husband
The husband deposed to borrowing US$10,537.00 from his brother
Mr S to pay some of his expenses in September 2009[24] which he then used to help pay for his expenses as well as household expenses for the wife and [X] from September 2009. The wife denies this assertion and claims the husband paid only the mortgage[25].
[24] Paragraph 101 of his affidavit
[25] Paragraph 72 of wife’s affidavit filed 12 August 2011
The husband deposed to his income and the money borrowed from
Mr S not being enough to pay for all his expenses as he was also paying Lawyers to defend the domestic violence charges and had taken unpaid leave for approximately one month in order to deal with the Court case[26].
[26] Paragraph 102 of the husband’s affidavit
The evidence establishes that the husband had sold shares to the value of US$14,000.00 applied towards payment of his legal costs (referred to in paragraphs 125,127 and 131 above).
It is less than clear why it was necessary for the husband to borrow monies. The husband asks the Court in effect to draw a clear inference from his evidence of taking unpaid leave that he therefore did not receive any income for one month but inspection of his earnings summaries[27] establish that there was a difference of only US$300.00 or so in his net income after all deductions for both 2008 and 2009. Consequently, the earnings summaries establish that there was no significant loss of income during the period of unpaid leave.
[27] Annexure “FF” to his affidavit
The husband’s brother, Mr S affirmed an affidavit in these proceedings on 3 November[28] and in paragraph 5 deposed to helping the husband between August 2009 and March 2010 with expenses described as:
"(a) Emergency international travel. I paid for his airfares, accommodation and any incidental expenses that he had;
(b) I loaned money so that he could pay for his expenses and accommodation whilst he was living in the United States.”
[28] Affidavit filed 4 November 2010
The husband’s brother estimated such costs to be approximately US$31,500.00[29].
[29] Paragraph 6
The husband’s brother does not itemise such expenditure at all or differentiate between the amounts in sub paragraph (a) and subparagraph (b) above.
Consequently, there is no accurate evidence before me at all as to the amount lent allegedly for expenses and accommodation, nor the receipt by the husband of any monies lent to him.
The husband’s net income during 2009 was approximately $72,000.00[30]. This represents an average of US$6,000.00 a month. Consequently, the pro rata income from August to December 2009, a period of five months is US$30,000.00.
[30] See Annexure “FF” to the husband’s affidavit
The husband’s net income until he ceased employment in March for 2010 is approximately US$32,000.00[31].
[31] See Annexure “FF” to the husband’s affidavit
Consequently, the husband had net income of about US$62,000.00 between August 2009 and the cessation of his employment in March 2010 when he moved to Australia.
In Annexure “GG” to his affidavit the husband claims his US salary after tax from August 2009 to March 2010 was US$47,745.00. I do not accept that assertion. In paragraph 98(b) of his affidavit affirmed 15 August 2009 the husband deposes to his income from [W] in Milwaukee from April 2004 until March 2010 as being an amount of USD$416,413.00. That amount equals the total net amounts shown in Annexure “FF” in his earnings summary.
In Annexure “GG” to his affidavit, the husband claims total expenditure of US$104,357.00 in sections 1 and 2 but I find this to be misleading as some of the expenditure claimed was in fact paid from the sale or realisation of assets.
The following amounts are to be credited against the claimed expenditure totalling US$36,701.00 and the relevant expenditure to be considered is therefore US$67,656.00:
i)US$14,000.00 on 15.09.2009 from sale of shares and applied to legal costs;
ii)House repair expenses paid from proceeds of sale of home US$14,044.00;
iii)US$7,987.00 (probably a typing error that should read US$7,897.00) paid to AM-Honda to discharge loan over Odyssey motor vehicle and paid from proceeds of sale of such vehicle
iv)US$670.00 for car collision damage paid from proceeds of sale of Honda Odyssey motor vehicle;
Whilst I have made a finding that the appropriate amount to be allowed for the proper expenditure for the preparation of the home for sale was US$8,406.18[32], it is appropriate to allow in the above calculation the amount claimed by the husband of US$14,044.00 in assessing his approach to his claim for expenditure.
[32] See paragraph 159 above
This results in a shortfall of US$5,656.00 of expenditure over income.
It is also necessary to consider whether some of the expenditure claimed was appropriate including, for example, US$480.00 for charity, airfare of US$7,000.00. Further, some expenditure is reflected in assets including US$2,150.00 to [X]’s tuition plan savings, US$2,500.00 to [R] for the husband’s retirement fund and US$600.00 for 401k retirement savings.
In summary, I find that there is much which is unsatisfactory and unexplained in the husband’s evidence as to the calculation of expenditure and the justification he asserts for borrowing monies from his family. It is for the husband to establish that expenditure and borrowings were justified and I find he has failed to show the necessity to borrow.
On 4 June 2010 the husband transferred, following receipt of the proceeds of sale of the house, an amount of US$5,000.00 to his brother Mr S and on 8 June 2010, again from the proceeds of sale of the home transferred to his brother Mr S a further sum of US$5,000.00[33].
[33] Exhibit M1
In cross examination, the husband admitted that on 15 June he transferred a further sum of US$5,000.00 to his brother[34].
[34] Exhibit M2
I find on the balance of probabilities the total amount of US$15,000.00 paid by the husband to Mr S in early June 2010 [35]is not able to be justified as a proper reimbursement of money allegedly borrowed in September 2009.
[35] Paragraph 103 of the husband’s affidavit filed 15 August 2011.
I find on the balance of probabilities that it was a payment to the brother to reduce the husband’s assets and is therefore to be added back as an asset.
It would be otherwise if the evidence enabled me to find that the husband had spent such monies or any part of them on meeting reasonably incurred necessary living expenses, and I do not make such finding.
The Full Court in Marker[36]said:
[2.11] There seems to be no appropriate basis for notionally adding back monies that existed at separation but which have been subsequently spent on meeting reasonably incurred necessary living expenses. Neither the Family Law Act 1975 (Cth) nor does the case law require the parties go into a state of suspended economic animation once their marriage breaks down pending the resolution of their financial arrangements. Parties are entitled to continue to provide for their own support. Whether any expenditure so incurred is reasonable or extravagant is a matter that can be determined by the trial judge.”
[36] Marker v Marker [1998] FamCA 42
Monies paid to Mr V
The evidence establishes that the husband has a younger brother Mr V.
The husband admitted in cross examination by Mr Nicholson that on 23 June 2010 the husband transferred to his younger brother an amount of US$3,713.18, and made a further transfer to the same brother on 25 June 2010 of US$3,699.86 and a third transfer to the same brother on 7 July 2010 of US$2,233.06.
The three amounts together total US$9,646.10.
The evidence establishes that the husband did not disclose such transfers in Part M of the three financial statements that he swore[37] and which relates to disposal of property by the husband or on his behalf in the 12 months before separation and any time since separation.
[37] First financial statement sworn and filed 11 October 2010, second financial statement sworn 29 April and filed 2 May 2011, third financial statement affirmed and filed 15 August 2011.
It is established on the evidence that these transfers occurred approximately 12 months after separation.
The husband conceded in cross examination that the transfers to his younger brother had not been included in his affidavit material and neither had the husband deposed to any monies owing to his younger brother.
The significance of the transfers is that these are made shortly following the deposit of the net proceeds of sale of the home on 25 May[38].
[38] Exhibit M1
The closing balance of the husband’s account on 10 June 2010 following the three separate payments of US$5,000.00 to the husband’s brother Mr S on 4, 8 and 15 June as referred to above was US$29,514.07.
The transfers of monies to Mr V are made from these monies and before monies are deposited from the husband’s superannuation fund as referred to below.
I find on the balance of probabilities that the husband has failed to establish any reason for the transfers to his younger brother and that consequently the total payment of US$9,646.10 is to be added back as a notional asset.
Realisation by the husband of his superannuation benefits
During the course of the marriage the husband had contributed to a superannuation fund by way of deduction from his salary. It is known as a 401(k) fund and is identified as such in the husband’s earning summaries annexed to his affidavit[39].
[39] See Annexure “FF”
On 12 July 2010 the husband deposited into his [C][40] account an amount of US$112,382.89 which he conceded in cross examination came from his superannuation fund, with Principal Trust which he had realised together with a further sum of US$545.78 deposited the following day making a total of US$112,928.67.
[40] See Exhibit M2
The husband conceded that these monies were not included in Part M of any of his statements of financial circumstances.
Whilst the husband deposed to advice he had received that he had a liability to pay 30% tax and a 10% early withdrawal fee when he completed his next US tax return in respect of the superannuation monies which had been withdrawn, the husband adduced during the hearing no further evidence at all upon which I can make a finding that any such liability exists.
During re-examination of the husband, Mr Farrar sought to tender documents the husband had obtained from the internet of general information both from the Inland Revenue Service for America and Wikipedia. I rejected the tender on the basis that the documents did not enable me to make a finding that at law the husband was liable to pay any particular amount of tax on the superannuation fund or indeed whether he was liable to be assessed at all. Further, the documents did not amount to an individual assessment related to the husband.
The evidence establishes, and the husband admitted in cross examination that between 15 July 2010 and 9 August 2010 he transferred to the account of his brother Mr S a total of US$78,000.00[41].
[41] Exhibit M3
The evidence further establishes and the husband conceded in cross examination that on 1 October he transferred an amount of US$8,946.69 to Farrar Gesini & Dunn, his solicitors and that on 6 October 2010 two amounts together totalling US$18,483.89 were also transferred to his brother, Mr S.
In summary, the evidence establishes that the husband transferred a total amount of US$111,483.89 to his brother, paid US$8,946.69 to his lawyers and paid US$9,646.10 to his younger brother.
These amounts together total US$130,076.68.
I find on the evidence the whole of these payments came from the proceeds of the sale of the house and the husband’s superannuation funds.
I find on the evidence that it is appropriate to add back as a notional asset the amount of US$112,928.67 realised by the husband from his superannuation fund.
I find also on the evidence that the husband affirmed falsely in his affidavit sworn and filed 11 October 2010 when he said in relation to his superannuation fund[42] as follows:
“I withdrew the entire amount from the second retirement fund after leaving the United States. I had to pay 30% tax and an 10% early withdrawal fee. I received approximately US$55,000.00 from this retirement fund. At that time I had no intention of withdrawing this money, however I withdrew this money to repay legal fees, debts and liabilities.”
[42] Paragraph 23
The sale of motor vehicles
The husband’s unchallenged evidence is that in February 2010 he sold a Honda Accord motor car for US$2,200.00 which was deposited into his cheque account with [C] on 9 March 2010. On the balance of probabilities, I find the husband applied these monies towards his reasonably incurred living expenses.
The evidence establishes this motor vehicle was purchased by the husband on 29 July 2003 at a cost of US$5,200.00 funded in part by an amount of US$4,196.00 which the husband received in August 2003 from an insurance company following the write off of a 1992 Toyota Camry which the husband brought into the relationship and was written off a few weeks after marriage[43].
[43] See annexure L & M of the husband’s affidavit filed 15 August 2011.
The evidence establishes that a 2004 Honda Odyssey motor vehicle purchased during the relationship by the parties was sold by the husband in early March of 2010 for US$9,000.00 with nett proceeds amounting to US$434.00 after repayment of the outstanding balance of the loan to purchase the vehicle, the costs of some repair damage and a new key[44].
[44] See annexures T,U & V of the husband’s affidavit filed 15 August 2011.
On the balance of probabilities, I find that these monies were also applied towards the husband’s reasonably incurred living expenses at that time.
Household furniture and furnishings
The husband gave evidence in chief that he had given to charity the whole of the household furniture and furnishings and electrical goods on the basis that they were old and did not have any value. The husband said that he also sold some children’s items and furniture for about $80.00.
There is no other evidence before me as to disposal of household furniture and furnishings.
Other Assets
Education fund for [X]
The husband deposes to contributing monies on a monthly basis to a college tuition plan for [X][45], and that contributions ceased between November 2010 and February 2011 when he was unemployed. The husband asserts making payments of $500.00 per month and that there is about $6,000.00 in the plan at present.
[45] Paragraph 73 of the husband’s affidavit filed 15 August 2011.
In his evidence in chief the husband said he opened the plan within about a week of her birth and that he has been making contributions to the fund since that time except when he was unemployed and when he was supporting two family households but since then has been making regular payments.
The husband said that the sole beneficiary is [X] and that he can access it only for funding her education which he proposes to do after she attains the age of 18 years to assist with her education. The husband asserted that if he withdrew monies from the fund other than for [X]’s education then he would have to pay taxes and penalties.
In his affidavit sworn and filed 11 October 2010[46] the husband deposed to investing approximately $400.00 in his daughter’s college tuition plan every month and regularly.
[46] Paragraph 31
In his amended financial statement[47] the husband deposed to an average weekly payment of $125.00 for [X]’s College tuition and included the same item of expenditure in his further amended financial statement[48]. Such amount was not included in his financial statement sworn and filed 11 October 2010.
[47] Sworn 29 April 2011 filed 2 May 2011 Paragraph H 34.
[48] Sworn and filed 15 August 2011.
Nowhere in the husband’s financial circumstances does the education fund appear as an asset.
The husband’s evidence as to the existence of this fund is less than satisfactory. There is no corroborative documentary evidence. There is no corroborative evidence of any tax or penalties which the husband would be liable to pay if such money was withdrawn. There is no evidence of any interest the fund may be earning. Further, it seems to me the fund is likely to be greater than the sum of $6,000.00 to which the husband deposed.
My reasoning is that if the contributions commenced June 2009 and continued until August 2011, a period of 26 months, and if no contributions were made between November 2010 and February 2011 a period of 4 months then there is a period of 22 months over which contributions are made of not less than $400.00 per month, a total $8,800.00.
I am satisfied on the husband’s evidence that he has been making greater payments to make up for the period when he was unemployed and was supporting two families. Further, on his current rate of contributions he is making payments to the equivalent of $540.00 per month.
Since I cannot be satisfied that this is a fund to which the husband does not have access without penalty I find on the balance of probabilities it is an asset to be included.
In so doing, I find that the husband’s evidence concerning this fund is less than satisfactory. The onus lay with him to adduce evidence capable of being accepted and the best means for doing that would be to produce documentary evidence and the husband neglected to do so.
The wife’s jewellery
The husband asserts there is an asset in the form of the wife’s jewellery to the value of $25,000.00[49] to be bought into account.
[49] Paragraph 82.3 of the husband’s affidavit filed 15 August 2011.
The husband asserts that such jewellery comprises gold jewellery bought by his family for the wife at the time of marriage evidenced by receipts annexed to his affidavit[50]. The husband asserts on weight alone such gold has a current value at the time of hearing of more than $9,000.00.
[50] Annexure N.
The husband asserts also that the wife’s family gave her 300 grams of gold jewellery as a wedding gift which on current gold prices at the time of hearing he asserted was worth more than $15,000.00[51].
[51] Paragraph 85 & 86 of the husband’s affidavit filed 15 August 2011.
The wife deposes that the only jewellery bought for her at the time of the marriage was a chain and wedlock costing approximately $800.00 and which she asserts the husband has retained[52].
[52] Paragraph 80 of the wife’s affidavit sworn and filed 12 August 2011
Both parties gave evidence in chief, in cross examination and in reply in relation to the alleged jewellery, its existence and its ultimate disposal.
The wife gave detailed evidence, which I accept, that this was an arranged marriage and in accordance with custom her family paid a dowry to the husband in the form of cash, gold jewellery, household utensils and clothing. The wife said in cross examination, which I accept, that the purpose of the dowry is to honour the groom’s family on the premise that her family recognised she would enjoy a good life upon marriage to the husband because of his position and profession.
After considering the whole of the evidence very carefully, I prefer the wife’s evidence and find on the balance of probabilities that she has no jewellery or gold in her possession flowing from the dowry or any other gold jewellery she may have received as a wedding gift. Further, the evidence or rather the lack of evidence is such that I am not able to make any finding as to where such jewellery currently is nor with whom it is, nor its value, if any.
The assertions made by the husband as to the wife possessing such jewellery are without foundation and unsupported by any evidence. The questions put by Mr Farrar to the wife during cross examination, relying on instructions by the husband suggest the husband was seeking deliberately to destabilise the wife’s credit in these proceedings. Such attempt failed.
Wife’s bank accounts
The husband asserted that at the time of separation and at the time of hearing the wife had monies in her bank accounts which she failed to disclose and for which she had failed to give a proper account including an amount of US$18,000.00 she received from a motor vehicle accident claim in November 2006.
The husband supports his assertions by relying, in part, on bank statements produced by the wife during the process of informal discovery and exchange of documents and seemed to suggest that the wife still has monies in a bank account or other monies she has failed to disclose.
The evidence establishes that the wife operated one bank account with [C] Bank during the three years or so prior to separation and after separation until the account was closed. I accept the wife’s evidence that the source of monies was savings accumulated by her after expenditure on ordinary day to day living expenses.
The evidence establishes that at the time of separation in August 2009 the wife had approximately US$25,000.00 in her [C] Bank account and that on two occasions in August and on one occasion in September 2009 she made withdrawals each of US$5,000.00. On 13 October 2009 the wife redeposited to her account the sum of US$8,000.00.
I accept the wife’s evidence given during cross examination as to how she spent the amount of US$7,000.00 both on ordinary day to day expenses for herself and [X] following separation and also on medical expenses for her mother who was then staying in America and who required medical treatment not covered by any insurance scheme.
It seems there was a balance in the account of a little more than US$17,000.00 between mid October 2009 and 22 March 2010 when the wife drew a cheque for US$17,400.00 and which it is common ground was paid to her sister via a company operated by her sister in America.
The wife deposed to and confirmed during cross examination that her sister had helped her financially by meeting expenses on her behalf from the time of separation until she moved to Australia with [X] in January 2010[53].
[53] See paragraph 73 of wife’s affidavit filed 12 August 2011.
I accept the wife’s evidence as to the nature of the expenditure and that her sister made such expenditure on her behalf and was then reimbursed.
I find the expenditure does not amount to reasonably incurred living expenses and is therefore to be added back in the full amount of US$17,400.00.
The wife was cross examined as to the disbursement by her of the damages of about US$18,000.00 she received in 2006 for a motor vehicle accident[54].
[54] Paragraph 82 of wife’s affidavit filed 12 August 2011.
I prefer the wife’s evidence that a sum of US$8,000.00 was paid to her mother with the husband’s knowledge and consent.
As to whether there was a payment by the wife of US$4,000.00 to the mortgage, there is considerable doubt on the evidence before me. Whilst the wife asserts this payment was made by cheque number [omitted] on 30 May 2007 to [F], and it is common ground that [F] was a mortgagee of the home at Property M, it is less than clear that such monies were paid in reduction of a mortgage.
The evidence of both the husband and the wife is that the original mortgage was to [F] and that such loan was refinanced to [T] but the evidence does not enable me to make a finding as to when such refinancing occurred. It is however clear on the evidence that the sum of US$4,000.00 was not paid to the mortgage account with [F].
The wife denied in cross examination that such monies were sent to her mother. There is no evidence and no corroboration by any document that such monies were withdrawn for such purpose.
The wife immediately conceded in cross examination that it was not an “electronic transfer” referred to in her affidavit but payment by cheque.
The wife gave compelling evidence that the amount of US$4,000.00 was reimbursement for the husband for the medical expenses he had paid following the motor vehicle accident. It is significant that the calculation of such amount or the reason for the reimbursement was not contradicted by the husband when he later gave evidence in reply.
The evidence establishes that there was a second mortgage on the home to [A] Bank probably obtained to assist in the original purchase of the home or a little later and which the wife asserts she paid from 2007 until she stopped work just before giving birth to [X].
When I weigh the competing versions the most likely explanation is that the sum of US$4,000.00 was reimbursed to the husband in one form or another and probably applied towards ordinary recurring household expenditure for the benefit of the family. The rationale to support this conclusion is that whilst the wife has not established the payment went towards any mortgage, the husband has not established that it was paid or sent to the wife’s mother.
I am satisfied on the evidence that the husband also received from the wife’s settlement monies two payments together totalling US$5,500.00[55].
[55] Paragraph 82.c of the wife’s affidavit 12 August 2011.
The evidence establishes that the payment of US$5,000.00 by the wife to the husband on the 18 September 2007 was subsequently remitted by the husband to the wife’s uncle in India by agreement. The wife is to be criticised for not having included this in her affidavit.
The reason for the payment to the wife’s uncle is disputed with the wife asserting it was reimbursement for financial support the uncle had given her when she had returned to India with her first child [Y] and remained there for six months.
The husband asserted that the wife had told him the payment was a loan to him to pay for his surgery and that it would be repaid.
I prefer the wife’s evidence as to this transaction.
I am satisfied on the evidence that the remainder of the wife’s damages claim was paid by instalment towards the second mortgage and that the total amount did not exceed US$2,000.00 and was probably less.
Residential property in India
The wife asserted that the husband has an interest in a house in India[56].
[56] Paragraph 76 of the wife’s affidavit 12 August 2011.
The husband gave evidence that such home was purchased by his mother in October of 2001 prior to him meeting the wife, that the home is in [omitted] in India and that his parents continue to live there.
I accept the husband’s evidence that it was built with help from family and children and from time to time he sent money to them for maintenance but that he made no financial contribution to the purchase of the home.
The evidence does not establish that the husband has any financial interest in the property.
Conclusion as to the assets to be brought into account at the hearing
Before considering further the disposition of the proceeds of sale and realisation of the assets it is appropriate that I make findings as to the relevant assets, for the purposes of the hearing, which I find are as follows:
Description
Amount
Sale by husband of shares in [P]
US$14,000.00
Proceeds of sale of home at Property M
US$27,565.89
Realisation of the husband’s superannuation benefits
US$112,928.67
Balance monies in wife’s bank account with [C]
US$17,400.00
Total
US$171,894.56
Conclusion as to the property to be considered as available for division
I conclude on the whole of the evidence before me that the relevant amount is that referred to in paragraph 261 above, that is an amount of US$171,894.56.
It seems to me that I can treat this amount as equalling Australian dollars without disadvantage to either party on the premise that on the evidence before me[57] there were some transfers in June 2010 whereby the American dollar was the equivalent of fractionally more Australian dollars, for example US$9,491.07 converted to AU$9,500.00 and US$8,992.82 converted to AU$9,000.00.
[57] Exhibit M3
Liabilities
The evidence establishes that there are no liabilities in existence at separation that have not been discharged.
The husband has a current liability to his brother for monies borrowed for some later legal fees but this liability has arisen after separation and is to be disregarded save to take it into account generally when I consider the husband’s financial circumstances.
The nett assets
The nett assets accordingly, are US$171,894.56.
As to evidence of other assets at the time of hearing, these are as follows:
·The husband’s account with [N] Bank US$1,000.00;
·The husband’s account with [C] (America) AU$855.00;
·The husband’s superannuation benefits with [A] Superannuation AU$5,000.00;
·Residue of husband’s superannuation retirement account [R] AU$2,000.00;
·Wife’s superannuation accruing post separation consequent upon employment - value not established;
·Wife’s motor car purchased August 2010 - value not established.
I propose not to bring into account the monies held in the education fund for [X] on the premise that such monies are held by the husband in trust for [X].
It is not in dispute that the assets referred to in paragraph 267 above, except for the [R] fund have accrued post separation. Given the relatively insignificant value of such assets I do not propose to bring these into account in these proceedings and note merely that the imbalance probably favours the husband slightly.
Discussion as to husband’s claims for disbursement of monies
It seems to me that given the apparent complexity of the financial transactions put in place by the husband whilst he lived in America and after his move to Australia it is appropriate to start from the point of considering the proceeds of sale of the various assets to be the property at the time of the hearing, tracing the disposal of such monies and then adding back those amounts which, if any it is appropriate to add back.
This involves consideration of amounts paid for legal fees and other purposes. It also involves an assessment of the veracity of the husband’s evidence.
An illustration of the confused and unreliable evidence given by the husband as to financial matters is found in his evidence concerning monies he paid his sister Ms V with whom he lives, in effect as a boarder.
In his evidence in chief he said that he was paying her about $600.00 per week between rent and food and with the rental component being $450.00 and about $200.00 for food but changed his evidence to say $150.00 for food and $400.00 for rent but then said, when asked how he paid for utilities such as telephone, he said that he usually paid his sister about $2000.00 each month which included rent, food, gas, electricity and entertainment and some telephone and internet usage.
In cross examination, the husband agreed that by paying his sister $2,000.00 a month he was in effect paying her $461.00 per week which covered his rent which he claimed in his financial statement to be $400.00 per week, food, which he set out in paragraph 60 to be $150.00 per week and other items including household supplies, repairs, electricity, gas and telephone which together in paragraph 60 totalled $160.00 per week including telephone and internet.
The inconsistency lies in the amount referred to in his financial statement and his oral evidence.
I find on the balance of probabilities that the husband pays his sister $2,000.00 per month for rent, food, utilities and use of household services and that the amounts claimed in the financial statement both as to rent and other outgoings are unreliable and incorrect.
Annexure “GG” of the husband’s affidavit filed 15 August 2011 is a spreadsheet of expenditure which the husband asserts he incurred for various relevant periods as well as income. I find that the spreadsheet amounts to a reconstruction by the husband of various financial transactions made in an attempt to justify how income and more particularly the assets were realised and spent or disbursed.
During cross examination, the husband conceded that he went through almost every bank statement he had as well as invoices and any other documents he could find to create in effect a balance sheet of outgoings against incomings to show where the money went. The husband conceded there were errors in the spreadsheet but asserted that they were unintentional and he had tried to rectify mistakes when they came to light. It follows that this is not the best evidence. It is no excuse for the husband to suggest he gave discovery of all documents to the wife. It is for the husband to adduce primary acceptable evidence if he asks for a finding that such income and expenditure are established.
The evidence establishes that the husband paid his sister $28,410.00 in about August or September of 2010 which I find on the balance of probabilities was sourced from the monies the husband had transferred to his brother from realisation of assets.
It is not in dispute that between January and June of 2010 the wife and [X] stayed at the home of Ms V and during a time when the wife was not receiving any income. The evidence establishes that there was no obligation on the part of the wife to reimburse the husband’s sister for the expenses met by the sister accommodating the wife and [X]. Further, the evidence establishes there was no obligation on the husband to reimburse his sister. Rather, the husband took it upon himself as a moral obligation to give money to his sister.
There is no evidence before me as to the calculation of the amount of little more than $28,000.00.
In her affidavit[58] Ms V deposes to the facilities the wife and [X] were able to use together with a description of other services provided but with no itemisation at all of specific items of expenditure. Ms V deposes in the following terms as to costs:
[58] Affirmed 3 November 2010 and filed 4 November 2010.
“I estimate the cost of her staying at my house to be $28,200.00.”
In annexure “GG” of the husband’s affidavit the husband seems to attribute specific items of expense to gas and electricity, home accommodation, clothing, food, grocery and kitchen related items and the like including loss of income for Ms V’s husband assessed at $5,200.00 and all such items together totalling $28,410.00.
The husband adduces no evidence at all in support of the items claimed, nor the basis of calculation.
Ms V deposes in paragraph 10 of her affidavit[59] that there was never any written agreement that she expected the husband to pay her back in full for what she had provided to him, his family and his daughter.
[59] Affirmed 3 November 2010 and filed 4 November 2010
I find such expense was not justified and is therefore not to be allowed against the monies realised by the husband from the sale and realisation of assets. It is a fiction intended to deplete the pool of assets available for division.
I find on the evidence that there was no legal obligation on the partof the husband to pay his sister the sum of $28,410.00 or indeed any other sum.
The husband also paid legal costs incurred by his brother Mr S and his sister Ms V in amounts of $11,000.00 and $17,000.00, and totalling $28,000.00 in relation to apprehended violence proceedings brought by the wife.
The husband conceded correctly in cross examination that there was no legal obligation on his behalf to pay such costs. He considered he had a moral obligation to do so.
I do not accept the husband’s explanation for paying such costs. It is a fiction which further depleted the available pool of assets.
I find on the balance of probabilities that such costs were also paid from the assets realised by the husband and is therefore not a cost that is justified.
The husband deposes to having paid his brother Mr S $29,720.00[60] which is calculated by the husband and set out in section 4 of annexure “GG” to his affidavit. This includes an amount of $15,000.00 for a loan to pay US expenses and an amount of $5,000.00 for marriage.
[60] Paragraph 99.d of the husband’s affidavit affirmed and filed 15 August 2011
I find that the husband is not able to justify this expenditure with the exception of the $15,000.00 lent to the husband whilst he remained living in America shortly after the separation and to which I have referred earlier in these reasons for judgement[61]. The amount of $5,000.00 appears to be identical with an amount of US$9,000.00 which the husband’s brother Mr S in his affidavit affirmed 3 November and filed 4 November 2010[62] was lent to the husband to pay for his marriage.
[61] Paragraphs 180-183.
[62] Paragraph 7.
The husband’s evidence as to whether such liability existed is contradicted, as he was obliged to concede in cross examination he had paid for the majority of the marriage costs in India in June 2003 and which he estimated cost him approximately $15,200, as deposed by him in his affidavit affirmed and filed 11 October 2010[63]. There is no mention in that affidavit of borrowing money from his brother.
[63] Exhibit F6
There is no evidence of any loan agreement between the husband and the brother for repayment of any loan from the wedding and I find on the balance of probabilities there was no obligation on the part of the husband to repay his brother the sum of US$9,000.00 or indeed any other sum allegedly financed to assist with the wedding. I find it is of significance that the husband does not raise anywhere in his evidence that a liability existed at separation to repay his brother any such amount.
The remaining balance of $9,720.00 is asserted by the husband to be monies paid to his brother to meet the cost of accommodating him in the brother’s home between March and June 2010.
In the brother’s affidavit the brother sets out by way of description the items for which expense was occurred[64]and in paragraph 4, Mr S said this:
“The estimate the costs that I incurred whilst Mr Sand was living with me was approximately $13,000.00”.
[64] Paragraph 3 of the affidavit affirmed 3 November and filed 4 November 2010
There is no basis put forward for the calculation of such costs. It is merely an assertion with no foundation laid for the calculation. Such calculation is inconsistent with the amount claimed by the husband.
There is no evidence of any liability on the part of the husband to pay any such monies to his brother. Whilst the husband asserts it is a moral obligation it is not sufficient in my view to warrant such an amount being a justifiable expense. Rather, it is a fiction which depleted the available pool of net assets.
In summary, there is no evidence or any sufficient evidence to warrant the husband paying his brother a total of $52,700.00[65] as justified and reasonable expenditure for his self support.
[65] Paragraph 11 of the affidavit affirmed 3 November and filed 4 November 2010
A further illustration of the husband’s unreliable evidence in relation to financial transactions comes from his evidence as to his [N] Bank cheque account which he opened in about April 2010. The statements[66] commence on the 16 June 2010 with a balance of $14,826.50. There are no prior statements. The deposits to this account from 16 June 2010 come from the husband’s employment.
[66] Exhibit M4
The evidence does not enable me to make a finding as to the origin of the balance of $14,826.50 at the time of the first statement in the exhibit.
An illustration of the ambiguity of the husband’s evidence arises in relation to a withdrawal from the ANZ account of $14,000.00 on 7 October 2010. In cross examination the husband said initially, when he was asked to whom the money was paid, that he had spent it on expenses and for legal bills. When pressed, he said that he spent it on family members flying to India they being his brother-in-law and his sister visiting his parents who were undergoing some heart surgery. As to the reason for paying this money the husband said that he owed them a lot and he paid for their expenses.
I find on the balance of probabilities that such monies were paid by the husband voluntarily to his sister and brother-in-law and from income earned after separation.
The husband was cross examined about a withdrawal of $8,000.00 on 21 June 2010, from his ANZ account. The husband said the money was paid to his brother Mr S but the evidence does not establish the purpose of the payment. I am unable to make any finding to whether these monies came from realisation of assets by the husband.
In summary, I find on the evidence that there was no obligation on the part of the husband to pay the amount of $28,410.00 to his sister or the sum of $52,700.00 to his brother, both sums being paid by the husband in about August or September of 2010 and on the balance of probabilities from monies realised by the husband from the sale and realisation of assets which consequently are to be added back. The same rational applies in relation to the legal fees together totally $28,000.00 paid by the husband on behalf of his brother and sister to which I have made reference to above.
Legal fees
The evidence establishes that the husband has paid a total of $80,500.00 to his Solicitor, Farrar Gesini & Dunn[67]. Of this amount $36,500.00 was paid by the husband’s brother Mr S between 1 November 2010 and 28 March 2011. I find on the balance of probabilities that such monies were paid from the assets realised by the husband.
[67] Exhibit F4
Between 2 July 2010 and 30 July 2010 payments were made to the Solicitors together totalling $7,000.00 and paid by [T] Mastercard. I infer the payments were made by the husband by credit card and therefore not paid from realisation of assets.
A further payment was made on 8 September 2010 in an amount of $10,000.00 by transfer from [C] Bank which I find on the balance of probabilities was made by the husband and from monies realised from the sale of assets. There was a further payment of $9,000.00 on 1 October 2010, again by transfer from [C] Bank and to which I have referred earlier in these reasons and in an amount of US$8,946.69.
The balance of $18,000.00 is made up of transfers on 9 September 2010 of $10,000.00 and amounts totalling $8,000.00 between 10 May 2011 and 8 July 2011 by transfer from [N] Bank which I find on the balance of probabilities are payments made by the husband from his post separation earnings whilst living in Australia.
In all the circumstances I find it is appropriate to add back legal fees paid only from the realisation of assets.
The other legal fees referred to above paid from post separation earnings of the husband are not to be added back.
Wife’s motor car
The wife conceded in cross examination that in late 2010 she purchased a motor car at the cost of $7,990.00 funded by borrowing from her friends and family and of which $5,386.00 was lent by her sister [name omitted] in America, the same sister to whom she transferred $17,000.00 in March 2010 as referred to earlier in these reasons.
Whilst it was suggested to the wife in cross examination that there was some subterfuge as to her purchase of the motor car, I find that the deposit of the money into her landlady’s bank account was not intended to be deceptive and there was nothing untoward concerning the transaction. Whilst the motor car is clearly an asset I find on the evidence it was acquired after separation and from borrowed monies. The current value of the car is not established.
Financial resources
Neither party discloses any financial resource in their respective financial statements, and the evidence at trial does not disclose any financial source.
Evaluation of the contributions
The Court is required pursuant to Section 79 to make an assessment as to the contributions of the parties. The manner in which contributions are assessed has been the subject of a number of significant Full Court decisions. The contributions for parent and homemaker are to be assessed not in any merely token way but in terms of their true worth of the building up of the assets[68].
[68] See Mallett & Mallett (1984) 9 FamLR449 & In the marriage of Ferraro (1992) 15 FamLR 1
The Full Court has observed there are risks in taking an overly technical approach to the assessment of the respective contributions of the parties during the course of their relationship, both financial and non financial, both direct and indirect in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of the parties[69].
[69] In the marriage of Shewring (1987) 12 FamLR 139
It seems to me that the most appropriate and the most convenient manner in which to deal with the contributions of the parties in this case is to adopt a global approach as opposed to an asset by asset approach.
I find on the evidence, that at the commencement of their relationship when they were married in India neither party brought into the relationship either any asset of significant value or any liability of any significance. The assets comprised a motor car, some household furniture and a dowry about which there is a dispute as to its value.
This was a marriage of a little more than six years during which the husband has been employed and continuously and worked hard to provide for his family and in so doing made significant financial contributions to the assets in the form of his superannuation, the home and shares.
The wife was involved in the early years of the marriage in obtaining experience and qualifications for employment in America as well as being a homemaker and parent and gave birth to their first child in 2005 and was involved with his care until his death the following year. The wife subsequently obtained employment until she gave birth to [X] in 2009 a few months prior to separation. The wife also contributed her income to the welfare of the family.
The husband had some involvement in the care of both children.
I find on the evidence that until separation both parties made significant contributions in their respective capacities and that such contributions were equal.
Post separation, the husband continued working, except for a period when he took leave from employment whilst living in America and did not work in Australia. The husband continued to make some financial contributions both in America and once he obtained employment after he moved to Australia.
The wife continued as primary care giver and mother to [X] both in America and Australia after separation. The wife has now obtained employment but continues to be the primary care giver to [X] subject to the time [X] is now spending with her father.
In all the circumstances, I find, on the evidence that their respective contributions in such capacities continued to be equal and no further adjustment is warranted for the period from separation to the date of hearing.
Section 79(4)(d)
I find on the evidence before me, that there is no adverse affect of any proposed order on the earning capacity of either party.
Consideration of the matters referred to in Section 79(4)(e)
These are the matters which the Court is required to consider under Section 75(2). The relevant matters would seem to me to be subparagraphs (a), (b), (c), (d), (e), (f), (l), (m), (n), (na) and (o).
(a) the age and state of health of each of the parties.
Although the husband is 10 years older than the wife, both enjoy good health on the evidence before me.
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
For the reasons I have given, the evidence establishes that both parties have not only the physical and mental capacity for appropriate gainful employment but have shown that each can obtain well paid employment. However, the husband has a significantly greater earning capacity than the wife given that the evidence at the hearing was that he has a gross weekly income of $4,400.00 as a [omitted] - contractor in the private sector. In comparison, the wife’s gross weekly pay with [omitted] was about $1,056.00 per week and therefore one quarter of the husband. Neither party has any property of any significance and neither party has any financial resources.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
The wife is the primary carer of their daughter [X] and will continue to perform that important role and have that responsibility, subject to the husband spending substantial and significant time with her pursuant to the orders I have made.
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
Each party has commitments to support themselves and their daughter. The husband currently pays Child Support pursuant to a child support assessment. The husband has the benefit of accommodation with his sister and the wife and [X] board in shared accommodation.
(e) the responsibilities of either party to support any other person; and
The evidence establishes that neither party is responsible for supporting any other person.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
The wife is eligible for and receives a Child Care allowance of $80.00 per week. Neither party is eligible to receive any superannuation benefit from any fund or scheme and the husband is not eligible to receive any Commonwealth benefits.
(l) the need to protect a party who wishes to continue that party's role as a parent; and
I take this factor into account. The mother prefers to work and has obtained employment and, on the evidence before me, this does not detract from her role as a primary carer for [X].
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
The evidence establishes that the husband is not living with any other person in a romantic relationship but shares accommodation with his family and pays his way. The wife lives in shared accommodation as a boarder and also pays her way. Neither party derives any other financial benefit from these forms of shared accommodation.
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii)vested bankruptcy property in relation to a bankrupt party; and
The value of the property for division between the parties is modest.
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
The husband pays Child Support pursuant to an assessment to which I have referred earlier in these reasons.
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
There is none.
Weighing all these factors I find that a significant adjustment is warranted in favour of the wife and I assess this to be 30%. This results in a division of the assets in the ratio of 80% to the wife and 20% to the husband.
My reasoning is that the husband has a very significant earning power resulting in a significant surplus of income to him after deduction of income tax, superannuation, Child Support and his ordinary cost of living flowing from the benefit of living with his sister, and for the reasons which I have given earlier in these reasons. Whilst the husband is now 39 years of age I am satisfied he has the capacity to continue to earn significant income well into the future. Whilst the wife is younger, she does not have the same earning power or capacity, and has the primary responsibility for the care of [X].
Thirty percent (30%) of the net assets to be considered is $51,568.00 and which the husband will earn in approximately 3 months as a gross amount. In real money terms this is not a significant sum of money when I compare the number of years for which the wife will have the primary responsibility for [X] and the husband’s earning capacity and ability.
Whilst [X] will spend substantial and significant time with her father, it is the mother who has the primary parenting role and all that entails. Ultimately, the wife may need to obtain separate accommodation for herself and [X]. The need for the husband to obtain separate accommodation is not so great, and may not exist at all.
Conclusion
Put simply, and for the reasons I have given it is appropriate to add back and treat as available for consideration as relevant assets the monies realised from the assets described in paragraph 261 and which have a combined value of $171,894.56.
80% of such amount is $137,516.00.
Taking into account the wife has had the benefit of $17,400.00 it follows that the amount payable by the husband to her is $122,116.00 which I will round down to $120,000.00 for practical purposes.
The issue which then arises is whether such amount should be paid by a lump sum or by instalment.
I am grateful to Mr Farrar, Counsel for the husband and Mr Nicholson, Counsel for the wife for their careful and comprehensive submissions as to the options open to the Court facing this difficulty.
Mr Nicholson submitted that I could make an order for a lump sum payment in the order of $125,000.00 on the premise that the husband’s conduct was such that a finding could be made that the husband had diverted monies to members of his family and parked it there and it was available to him as a lump sum.
Mr Farrar urged upon me that the only add back that the Court may consider is warranted, but not conceded by the husband was arguably the legal fees he had paid but that it was not open to the Court to make an order for a lump sum payment out of property that does not exist and could only be brought into existence by the exercise of an alleged borrowing capacity[70].
[70] See Walters and Walters (1986) FLC 91-733; 10 FamLR 1006, Evans and Public Trustee for the State of Western Australia (1991) FKC 92-223; 14 FamLR 646.
Mr Farrar submitted that an order for periodic payments for a property settlement, where the property no longer exists, and comprises only added back property does not fall within the meaning of Section 80(1)(a) or (b) of the Act and suggests the Section is intended to refer to spouse maintenance orders under Part VIII and not property orders but conceded that he had not been able to find any authority directed to the point and of assistance.
I should add that both Counsel referred me to a number of relevant authorities and which I have included on the coversheet of this judgment. Little purpose is served by my traversing each of those authorities in detail in these conclusions.
I do not accept Mr Nicholson’s submission that there is a pool of money readily available to the husband parked by him with members of his family and certainly sufficient to pay any order the Court is likely to make. Quite simply, the evidence does not enable me to make a finding of such nature. Whilst there is a degree of suspicion in relation to the monies paid by the husband to his brother and sister and I have found such payments were unjustified and not warranted and it may well have been a means for the husband to divest himself of the proceeds of his superannuation fund, shares and the home with a view to avoiding payment of any likely property settlement to the wife, the evidence falls far short of enabling me to make such a finding.
The remedy, for the reasons I have given, is to add back such payments as well as the legal fees.
There is no doubt on the authorities the Court is not empowered to require the husband to borrow monies to pay any amount he is required to pay.
However, I find that I do have the power under Section 80(1)(a) and (b) to order payment of a sum of money by instalments and which I propose should be made monthly.
My reasoning is that on the evidence before me the husband is paid at different intervals dependent upon the work he is doing and to whom he is contracted at the time, and is employed for the majority of the time.
When I consider my findings as to the husband’s income and expenditure it seems to me that he can afford payments of $750.00 each fortnight.
I note in Paskandy v Paskandy[71] the Full Court upheld the decision of the trial Judge that as a consequence of a husband not having the capacity to pay the amount of the wife’s property entitlement other than by way of instalments, that it was appropriate to make such an order and was within the trial Judge’s discretion. The husband was ordered to pay an amount of $10,000.00 by monthly payments of $500.00.
[71] Paskandy v Paskandy (1999) 25 FamLR 607; FLC 92-878
Counsel for the wife sought an order in draft minutes of proposed orders prepared toward the end of the hearing that there be an order that pending payment of the total payment to the wife the husband deliver up his passport to the Registrar of the Family Court of Australia and that an airport watch order be put into place. This matter was not pressed in submissions. It seems to me that I do not have power to make such orders and I decline to do so.
Section 79(2), is the order proposed just and equitable?
The last matter I am required to consider is whether the orders I propose are just and equitable. In all the circumstances, I find that the orders I propose are just and equitable and that the orders I propose will do justice as between the parties.
For these reasons I make the following orders.
I certify that the preceding three hundred and sixty-two (362) paragraphs are a true copy of the reasons for judgment of Coakes FM
Date: 18 May 2012
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