FAMILY COURT OF AUSTRALIA
| SHERIDAN & SHERIDAN & ORS | [2015] FamCA 468 |
| FAMILY LAW – CHILDREN – Final Orders – whether father’s involvement with drugs poses a risk to the child – whether mother able to facilitate a relationship between the child and the father – acrimonious relationship between parents – where earlier shared care arrangement no longer in best interests of the child – benefit to the child in maintaining a meaningful relationship to be weighed against risk of physical and emotional harm - orders made for mother to have sole parental responsibility for the child – child to live with mother and spend gradually increasing time with father. |
FAMILY LAW – PROPERTY – Final Orders – where proceedings have been re-opened on multiple occasions – where wife seeks to retain former matrimonial home and pursues significant “add-backs” – where husband owes significant debt to other party –
FAMILY LAW – CONTRAVENTION – property – where husband admitted contravening injunctive orders without reasonable excuse – husband’s actions dissipated assets and extended proceedings – husband guilty of contravening orders without reasonable excuse and sentenced to a period of imprisonment – sentence of imprisonment suspended pending the husband entering into a good behaviour bond and complying with orders of the Court.
| Family Law Act 1975 (Cth) s 60B, 60CA, 60CC, 60CG, 61DA, 65DAA, 75, 79, 80, 81, 112AB, 112AD |
Bevan & Bevan (2013) FLC 93-545
Kowaliw & Kowaliw (1981) FLC 91-082
Omacini & Omacini (2005) FLC 93-218
Stanford v Stanford (2012) 247 CLR 108
Swinton & Barnstable [2011] FamCA 548
Tate & Tate (2000) FLC 93-047
| APPLICANT: | Mr Sheridan |
| RESPONDENT: | Ms Sheridan |
| FIRST INTERVENER: | Mr X |
| SECOND INTERVENER: | Norman Waterhouse Lawyers |
| FILE NUMBER: | ADC | 2309 | Of | 2009 |
| DATE DELIVERED: | 19 June 2015 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Justice Dawe |
| HEARING DATES: | 29-31 October 2012; 8 May and 30 May 2013; |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Childs (withdraws on 16 Nov 2012) |
| SOLICITOR FOR THE APPLICANT: | Belperio Clark Husband in person (from 19 Nov 2012) |
| COUNSEL FOR THE RESPONDENT: | N/A |
| SOLICITOR FOR THE RESPONDENT: | In Person (with McKenzie Friend – Mr Y) |
| COUNSEL FOR THE FIRST INTERVENER: | Mr Rowley |
| SOLICITOR FOR THE FIRST INTERVENER: | Madsen Rowley |
| COUNSEL FOR THE SECOND INTERVENER: | Ms Horvat (up to 2 Nov 2012); Ms Pyke, QC (5 Dec 2012) |
| SOLICITOR FOR THE SECOND INTERVENER: | Norman Waterhouse Lawyers |
Orders
The wife Ms Sheridan has sole parental responsibility for the child H born on … 2001 (“the child”).
The child live with the wife.
The child spend time with the husband as agreed in writing between the parties and failing agreement as follows:
(a)Commencing on Sunday 28 June 2015 on alternate Sundays from 9.00 am until 8.00 pm for a period of four (4) months;
(b)then from 31 October 2015 from 9.00 am Saturday until 5.00 pm Sunday each alternate weekend until the weekend after the child’s fifteen [15th] birthday;
(c)thereafter each alternate weekend from the conclusion of school on Friday until the commencement of school on Monday or if not during school term time from 4.00 pm Friday to 9.00 am Monday each alternate weekend;
(d)handovers at the conclusion of school and commencement of school shall may take place at the school without the other parent being present PROVIDED THAT the child is able to transport all necessary belongings without assistance;
(e)handovers which do not take place at the conclusion of school or commencement of school shall take place at a venue agreed in writing or at a neutral venue within three [3] kilometres of the wife’s residence as nominated by the wife in writing.
PROVIDED THAT the time the husband spends with the child shall not take place:
(i)on any weekend on which the Saturday or Sunday is the child’s birthday, the wife’s birthday or Christmas Day;
(ii)for a period of two [2] weeks on one [1] occasion per year to occur in a school holiday period nominated in writing by the wife to the husband not less than one [1] month before the said school holidays commence;
UPON THE COURT FINDING THAT MR SHERIDAN CONTRAVENED THE FOLLOWING ORDERS WITHOUT REASONABLE EXCUSE
(a)paragraph 8 of the Order dated 2 July 2009;
(b)paragraph 8(b)(vi) of the Order dated 2 July 2009; and
(c)paragraphs 7 and 13 of the Order dated 17 June 2013.
Mr Sheridan is sentenced to imprisonment for a period of three [3] months such imprisonment being suspended upon condition that Mr Sheridan must forthwith enter into a bond for a period of ONE [1] YEAR without surety upon the following conditions:
(i)to be of good behaviour during the period of the bond; and
(ii)to comply with all orders of this Court.
The wife’s Applications for Contravention Orders filed on 7 September 2010, 10 October 2012 and 23 May 2014 are dismissed.
In full and final settlement of any claim that either the husband or wife may have against the other for settlement of property:
(a)The wife do forthwith produce to the Registry Manager of the Family Court of Australia at Adelaide, the Taxation Assessment Invoice for any sums due and payable by the wife to the Australian Taxation Officer for income tax due by the wife for any period prior to 30 June 2014 and any interest accrued thereof AND UPON the Registry Manager being satisfied that such payments still remain due and owing to the Australian Taxation Office, the Registry Manager do pay from the sum invested in relation to these proceedings to the Australian Taxation Office on behalf of the wife the amount due pursuant to such invoices, not to exceed the sum of FIFTY THOUSAND DOLLARS [$50,000.00];
(b)Upon production by Norman Waterhouse Lawyers of an agreement in writing between them and the wife or written confirmation by a Registrar of this Court for the amount owing by the wife to Norman Waterhouse Lawyers, the Registry Manager do pay to Norman Waterhouse Lawyers from the sum invested such sum as is due and payable by the wife;
(c)if thereafter any amount remains in the sum invested by the Registry Manager, then the Registry Manager do pay such sum to the wife;
(d)within ninety [90] days from this date the husband Mr Sheridan must do all acts (including but not limited to all steps and actions necessary to ensure the removal of any caveats) and execute all documents submitted to him by the wife Ms Sheridan to transfer to the wife all his interest in the property known as G Street, Town E in the State of South Australia (“the Town E property”) being the land in Certificate of Title Volume … Folio …;
(e)simultaneously with the registration of the transfer referred to in the aforementioned order the wife do pay to the husband the sum of ONE HUNDRED AND ONE THOUSAND DOLLARS [$101,000.00] (“the settlement sum”);
(f)in order to effect such transfer the wife shall provide to the husband within sixty [60] days from today the necessary transfer documents to be prepared at her sole expense and thereafter to be provided to the wife or her authorised agents at the settlement date in exchange for the said settlement sum;
(g)if either the husband or wife shall refuse or neglect to execute any memorandum of transfer or other document necessary to give effect to the terms of these orders, then in such case a Registrar of the Family Court of Australia at Adelaide upon proof by affidavit of such refusal or neglect is hereby appointed to execute and if in his or her opinion it shall be necessary to do so to settle the same and to do all such other acts and things and execute all such other documents as shall be necessary to give full force and effect to the orders herein.
In the event that the wife refuses or neglects to make payment of the settlement sum of ONE HUNDRED AND ONE THOUSAND DOLLARS [$101,000.00] to the husband within one hundred and twenty days [120] from this date AND ON CONDITION that she has previously been offered all appropriate documents necessary and signed by the husband to effect the transfer of the Town E property then the Town E property shall be sold and payments made on the following terms and conditions:
(a)the wife provide instructions to an authorised real estate agent and auctioneer to auction the property for sale at a reserved price that has been agreed in writing between the husband and wife and failing agreement for the sum of FOUR HUNDRED AND SIXTY THOUSAND DOLLARS [$460,000.00] (or such other sum as may be determined if necessary upon further application to this Court);
(b)upon sale of the property the proceeds to be divided as follows:
(i)in payment of all disbursements, rates, taxes and other charges due on the property (except electricity and telephone charges), agent’s commission, valuer’s fees, legal fees and advertising expenses relating to the sale of the Town E property;
(ii)discharge of any costs previously ordered by the Court;
(iii)discharge of any further amount due and payable by the wife to Norman Waterhouse Lawyers;
(iv)in payment of seventy-five [75] per cent of the balance then remaining to the wife;
(v)in payment of the balance then remaining to the husband.
The wife do otherwise retain for her sole use and benefit absolutely free from any claim or demand of the husband all items of furniture and effects in her possession, all savings, monies and investments, including shares in her sole name, her superannuation entitlement, any motor vehicle in her possession and all other items of real and personal property in her possession or control.
The husband do otherwise retain for his sole use and benefit absolutely free from any claim or demand of the wife all items of furniture and effects in his possession, all savings, monies and investments, including shares in his sole name, his superannuation entitlement, any motor vehicle in his possession and all other items of real and personal property in his possession or control.
Thereafter upon compliance with the orders contained herein each of them the husband and wife do otherwise pay and discharge all debts and liabilities in their sole name to the exoneration of the other and do indemnify the other in relation thereto.
Save as to costs all outstanding applications are dismissed and removed from the active pending list.
Liberty to apply for consequential orders.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Sheridan & Sheridan & Ors has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
FILE NUMBER: ADC 2309 of 2009
| Mr Sheridan |
Applicant
And
| Ms Sheridan |
Respondent
| Mr X |
First Other Party
And
| Norman Waterhouse Lawyers |
Second Other Party
REASONS FOR JUDGMENT
Introduction
The proceedings between the applicant husband Mr Sheridan (“the husband”) and the respondent Ms Sheridan (“the wife”) relate to the final property settlement orders, orders in relation to the child and the contravention applications brought by the wife.
At the commencement of the hearing before me the husband admitted that he had contravened Orders of the Court without reasonable excuse.
The issue in relation to the contravention applications was the type of penalty to be imposed upon the husband for these admitted contraventions without reasonable excuse.
Subsequently the wife filed further contravention applications. The husband did not admit these contraventions.
The main issues to be determined in the property settlement proceedings related to the identification of the assets and liabilities which should be brought into account. There were a substantial number of items which the wife asserted should be “added back”.
Hearing
The final trial commenced before me on 29 October 2012. At the commencement of the hearing the wife was unrepresented. Permission was given for her to have the assistance of Mr Y, as a McKenzie Friend. The husband was represented by Mr Childs of counsel at the commencement of the trial. At the commencement of the trial the other party, Mr X, was represented by Mr Rowley, and the second other party, Norman Waterhouse Lawyers (the wife’s former solicitors), were represented by Ms Horvat of Counsel.
Having given Norman Waterhouse Lawyers leave to intervene in the proceedings by consent, further consent orders were made on 29 October 2012 which provided:
2.In the event that the husband and wife propose that Consent Minutes of Order be made by this Honourable Court finalising property settlement proceedings, that the draft Consent Minutes of Order be sent to each of the other parties’ solicitors (Norman Waterhouse Lawyers and Madsen Rowley) and the other parties be granted leave to make submissions to this Honourable Court regarding such proposed Consent Minutes of Order.
3.Each of the other parties is granted leave to make submissions concerning their applications prior to this Honourable Court pronouncing judgment regarding final orders for property settlement.
The trial then proceeded on the understanding that, prior to final orders being made, submissions would be received from the other parties.
On the first day of the trial it was agreed that the submissions in relation to the contravention penalties to be imposed for the admitted contraventions would be heard at the conclusion of the trial.
The first set of contraventions was formally put to the husband. He admitted both contraventions without reasonable excuse.
Contraventions
Particulars
On 7 September 2010, the wife filed an application/contravention. It alleged that the husband had contravened paragraph 8 of the Order of the Court (Federal Magistrates Court of Australia (“FMC” as it then was)) made on 2 July 2009.
The Order of Federal Magistrate Cole (as he then was) made on 2 July 2009, paragraph 8 provided:
Pending further order SAVE AND EXCEPT for the provisions of paragraph 7 of these orders, the parties be restrained and an injunction be hereby granted restraining them from selling, disposing, giving away, encumbering, mortgaging, leasing (SAVE AND EXCEPT for the lease of the K Street property) or otherwise dealing in:
(a)All real estate owned by the parties in their sole names or jointly with each other;
(b)The interests of the parties in the following entities:
(i) G Holdings Pty Ltd;
(ii) Z Pty Ltd;
(iii) Z Trading Pty Ltd;
(iv)AA Pty Ltd;
(v)Sheridan Family Trust
(vi)The husband’s share portfolio.
save and except in the ordinary course of the day to day operation of the businesses of the parties.
Paragraph 7 of that Order referred to the husband paying mortgage instalments and utilities for the former matrimonial home, being an exception which is not relevant to these contravention proceedings.
It was alleged that the contravention committed by the husband, involved the husband borrowing monies from “Mr X Pty Ltd”. The contravention allegation asserts that on 18 June 2010, Mr X Pty Ltd lodged caveats over the following properties by way of security for loan:
(a) G Street, Town E in the State of South Australia;
(b) K Street, Town M in the State of South Australia;
(c) BB Street, Town H in the State of South Australia;
(d) I Street, Town H in the State of South Australia;
(e) J Street, Town H in the State of South Australia.The husband admitted that he had contravened this Order of the Court without reasonable excuse.
By Contravention Application filed by the wife on 10 October 2012 the wife alleged that the husband contravened paragraph 8(b)(vi) of the same Order of the FMC (as it then was). This Order provided that the parties were restrained from selling or otherwise dealing with the interest of the parties in various assets which included in sub-paragraph (vi), the husband’s share portfolio.
The wife asserted in the alleged contravention that the husband had, following this Order, sold most of the share portfolio.
The wife asserted in her affidavit in support of the contravention, that save and except for 2,615 shares in CC Pty Ltd, the husband had sold the shares in his share portfolio between 21 February 2011 and 10 August 2012.
That affidavit also provided annexures which provided evidence that the share portfolio held by the husband as at February 2011, was valued at $20,896.41 and as at 10 August 2012 the share portfolio retained by the husband was valued at $86.30.
The husband admitted on oath that he had contravened this order without reasonable excuse.
The wife filed another application for contravention on 23 May 2014 relating to orders of 17 June 2013. The husband denied these contraventions.
The Law on contraventions
Part XIIIA of the Family Law Act 1975 (Cth) (“the Act”) deals with “Sanctions for failure to comply with order, and other obligations, that do not affect children”. Section 112AB(1) provides:
112ABMeaning of contravene an order
(1)A person shall be taken for the purposes of this Part to have contravened an order under this Act if, and only if:
(a)where the person is bound by the order—he or she has:
(i) intentionally failed to comply with the order; or
(ii) made no reasonable attempt to comply with the order;
112AD Sanctions for failure to comply with orders
(1)If a court having jurisdiction under this Act is satisfied that a person has, without reasonable excuse, contravened an order under this Act, the court may make an order for the imposing, in respect of the person, of one or more of the sanctions available to be imposed under subsection (2), being a sanction or sanctions that the court considers to be the most appropriate in the circumstances.
(1A)The power given to the court under subsection (1) in respect of a contravention of a maintenance order applies even if the order has been complied with before the matter of the contravention comes before the court.
(2)The sanctions that are available to be imposed by the court are:
(a)to require the person to enter into a bond in accordance with section 112AF; or
(b)to impose a sentence by order on the person, or make an order directed to the person, in accordance with section 112AG; or
(c)to fine the person not more than 60 penalty units; or
(d)subject to subsection (2A), to impose a sentence of imprisonment on the person in accordance with section 112AE.
(2A)The court must not impose a sentence of imprisonment on the person under paragraph (2)(d) in respect of a contravention of a maintenance order unless the court is satisfied that the contravention was intentional or fraudulent.
(3)An order under subsection (1) may be expressed to take effect immediately, or at the end of a specified period or on the occurrence of a specified event.
(4)Where a court makes an order under subsection (1), the court may make such other orders as the court considers necessary to ensure compliance with the order that was contravened.
Particulars of the specific sanctions are set out in the remaining part of Division 2 of Part XIIIA.
Evidence findings and submissions on contraventions
The husband admitted that he had contravened the orders on two occasions as alleged by the wife. In his affidavit filed on 28 September 2012, the husband refers to borrowing funds from “Yes Finance, a finance Broker. The actual lender is [Mr X]”. (Paragraph 50 of the affidavit filed 28 September 2012).
That paragraph of the affidavit concludes, “I admit that I did so in breach of the order of 2 July 2009”.
Paragraph 51 of the same affidavit refers to Mr X lodging caveats over the “former matrimonial home, [K Street], [J Street] and [BB Street] properties by way of security”. The amount secured over the properties was initially $120,000. Paragraph 61 of the husband’s affidavit says:
61.The $120,000 from Yes Finance was paid into the account of [DD Pty Ltd]. Those funds were committed to the fit out of the shop.
In relation to the contravention relating to the sale of his share portfolio, the husband again admitted this contravention without reasonable excuse. Paragraph 89 of the husband’s filed on 28 September 2012 states as follows:
89.The following is a Statement of the Assets and Liabilities of the marriage compiled to the best of my knowledge:
…
(c)Shares valued at $86. There was previously a portfolio of small shareholdings. However, due to lack of funds, I sold most of the shares to pay counsel fees. The proceeds of the sales were $9,457.90;
During his oral evidence the husband said that the loan of $120,000 (which he said he borrowed from Mr X, or Mr X’s finance companies) was a loan taken out by him personally, to assist his son Mr A in his business. He confirmed that the interest rate was originally 10 per cent per month. Exhibit 2 was received during the husband’s oral evidence. It was not accepted as proof of the actual debt owing, but was received as part of the husband’s evidence concerning the amount borrowed and the amount due. Exhibit 1 commences and is headed “[Mr X] trading as [Mr X] Pty Ltd”. It then describes the document as referring to a loan to “[DD Pty Ltd], [Mr A Sheridan] and [Mr Sheridan]”. This represents the company set up by the husband, he says, on behalf of his son Mr A.
The document describes date borrowed as“18/06/2010”. The principle amount borrowed is $133,200. Interest accumulates at the rate of $13,320 per month from July 2010 through to February 2011. There is an item headed “Loan 2 (new amendment)” with an interest rate change to 20 per cent per annum (previously 120 per cent per annum). This is given a date of 18 February 2011, with the principle amount being $239,760 (which was the amount of the previous loan) together with the interest that had accrued. The document then refers to various interests being overdue and concludes with the amount owing as at 30 October 2012 asserted to be $319,680.
During his oral evidence the husband confirmed submissions made by his counsel at the commencement of the final hearing, that the loan due to Mr X should not be considered as a matrimonial debt, nor should it be brought into account as ascertaining the assets and liabilities of the parties for the purposes of the property settlement proceedings, but should be regarded as a debt due by the husband alone to Mr X and his entities.
During his oral evidence the husband also confirmed that the company DD Pty Ltd was now in liquidation. He continued to maintain that it was Mr A’s business, but that he had managed the business for him.
The husband maintained throughout his oral evidence that he borrowed the money personally, and then gave it as a gift to Mr A to assist him to set up the business.
During cross-examination by the wife, the husband was unable to provide adequate, or convincing evidence as to the use of all of the $120,000 which he allegedly borrowed from Mr X or Mr X’s companies.
He was also unable to explain inconsistencies in his evidence relating to the use of the funds, being monies he claimed were provided solely to Mr A as a gift to assist Mr A in setting up the business, DD Pty Ltd. Paragraphs 92 and 93 of his affidavit sworn on 28 September 2012 states:
92.The sum of $315,000 including interest is owing to [Mr X]. I accept that this is not a debt of the marriage. The original sum was expended as follows.
93.In April 2010 as mentioned, I incorporated the company known as [DD Pty Ltd] to operate the proposed store at the [Shopping Complex EE]. As mentioned above, as result of difficulties with Centre management, I elected not to proceed with the store and the agreement lapsed for frustration;
a. There was a brokerage fee of $12,000;
b.To set up the store, I commissioned equipment at a cost of $55,000.
c.While I was still negotiating on the [Shopping Complex EE] store, I was given the opportunity to open a store at [Suburb FF]. I therefore used $24,000 of the funds for bank guarantees and $7,900 for the rent deposit at [Suburb FF]. The $24,000 was held by Westpac;
d.There were costs for signage, drawings, other equipment and designs totalling $33,100. Some of this was for [Shopping Complex EE] and some for [Suburb FF].
e.The [Suburb FF] store opened on 10 November 2010. The stock was provided on a 7 day account. The stock was paid for by the takings. I was receiving $300 per week at the time from [Suburb FF]. However, I refer to paragraph 76 hereof as to the closure and liquidation of the [Suburb FF] business.
The husband failed to provide documents which would have supported his allegations in relation to the use of the funds allegedly borrowed from Mr X or Mr X’s entities.
The husband was unable to explain why he had signed the documents in relation to the X loan as a director of DD Pty Ltd, when the records of the company indicated that Mr A was the sole director.
During his evidence-in-chief, the husband gave evidence about the share tradings. He said the funds that he received from the sale of shares he used to pay counsel fees.
Exhibit 4 produced during the husband’s oral evidence provides particulars of the share trading by the husband. In the period from November 2011 through to February 2012 there are nine separate transactions of shares in the name of the husband, with total shares of $9,457.90 resulting in withdrawals of $9,460.23. The husband did not deny the evidence of the wife concerning the valuation of the shares at an earlier time, and the minimal value of shares now retained by the husband.
When asked during his oral evidence who were the counsel whose fees were paid using these funds, the husband’s reply was “numerous counsel”. He then made reference to one of the counsel who he claimed to have paid $6,000 for the trial that “never went ahead”.
In submissions in relation to the question of penalty, the wife sought that the husband be sentenced to imprisonment. She emphasised the history of the husband’s dealings with Mr X, the timing of the borrowings and the caveats placed over numerous pieces of real estate. She also emphasised the husband’s failure to achieve the withdrawal of the caveats, although the husband had indicated to the Court that Mr X did not seek to recover any monies from Mr A or the wife.
In relation to the contravention concerning the sale of shares, the wife emphasised that the evidence in cross-examination indicated that the breaches occurred over a period of months. She emphasised also that shares that had been purchased in 2007 for $70,000, according to the husband had realised less than $9,000.
The wife maintained that the contravention in relation to the share portfolio should also attract a penalty of imprisonment due to the complete disregard of the Court Orders.
When submissions were made about the penalties the husband was unrepresented. He maintained that he had pleaded guilty to the contravention in relation to the loan and caveats over the real estate, but claimed that this did not cause any hardship to the wife.
He maintained during his submissions that he had limited income, but had huge legal expenses. He continued to maintain that the borrowing from Mr X was a loan to assist his son to set up the business.
In relation to the sale of shares he maintained in his submissions that he needed to “repay monies” and said that he was in “quite a spot”.
The husband sought that the Court consider a penalty such as Community Service, a suspended sentence or a Bond.
On 23 May 2014 the wife filed a further application for contravention claiming that the husband had contravened paragraph 7 of the Order of 17 June 2013 in that the husband had without reasonable excuse not provided details of his employment or significant change to his income within seven days. It was also alleged that he breached paragraph 13 of the Orders of 17 June 2013 in that:
Without reasonable excuse the husband has failed to pay the outstanding Water, Electricity and Council rates for [G Street, Town E] in the State of South Australia.
The Orders of 17 June 2013 paragraphs 7 and 13 provided:
7.Within seven [7] days of any change of the husband’s employment or significant change in his income being received the husband inform the wife in writing of such change UPON CONDITION that the wife is restrained and an injunction is granted restraining the wife from communicating to anyone connected with the husband’s employment without further order of this Court.
…
13.Within fourteen [14] days from today the husband provide to the wife copies of all Water, Electricity and Council rates for [G Street, Town E] in the State of South Australia which have been paid by him since November 2012, together with copies of outstanding Water, Electricity and Council Rates for [G Street, Town E] in the State of South Australia and that all outstanding debts in relation to Water, Electricity and Council rates for [G Street, Town E] be paid by the husband within twenty-one [21] days of receipt of any account relating to the same.
The wife relied upon her affidavit filed on the same date. Parts of that affidavit were not received as evidence.
The husband filed an affidavit on 18 June 2014 in which he denied the contraventions. He maintained that the business to which the wife referred was not his business, but was owned by his friend, Ms J.
The wife also relied upon the documents annexed to her affidavit filed on 4 June 2014 in relation to invoices, accounts and monies overdue.
The husband admitted in oral evidence that he had received an income from Business M and that he had been employed there for five months. His evidence also indicated that he had, during the relevant period, access to funds sufficient to pay the water, electricity and council rates for the G Street, Town E property.
Exhibit 17 was the husband’s tax return for the year ended 30 June 2014 which disclosed the husband’s taxable income at $52,000.
I accept the evidence of the wife that the husband had been provided with the appropriate accounts for the outgoings but had failed to make the payments.
Whilst the husband gave evidence about some financial difficulties I am not satisfied that he has established any reasonable excuse on the balance of probabilities. I therefore consider that the husband has also contravened these Court orders without reasonable excuse.
Conclusion on contraventions
The husband has admitted that he has contravened orders of this Court in two significant ways.
The first admission is that he encumbered the various items of real estate by way of security which allowed Mr X’s company to place caveats over the real estate to secure the alleged loan of $120,000 which then grew to in excess of $300,000.
The second contravention, admitted without reasonable excuse, is that he sold most of his shares.
Whilst the husband maintained that Mr X and his entities would not seek to recover from the wife, the caveats had not been withdrawn. The husband has not provided any reliable information about the use of the monies obtained from the sale of shares. He made only a general reference to paying counsel fees.
The Court also finds that the husband contravened the orders in relation to providing the wife with details of his employment in contravention of the orders made on 17 June 2013 and failure to pay the outgoing water, electricity and council rates for G Street, Town E.
Section 112AD (2) sets out the sanctions available to the Court. The Court must impose a sanction which the Court “considers to be the most appropriate in the circumstances”.
There was a lack of any convincing remorse by the husband. There was only a limited explanation for the sale of the shares and conflicting evidence about the arrangements for the use of the monies provided by Mr X which related to the caveat over the real estate.
Similarly, there was only limited excuse provided by the husband for his failure to provide the information concerning his income and employment and failure to pay the outgoings.
The husband has been, and continued to be, in receipt of WorkCover payments due to alleged injury as a result of his work. A community service order is therefore not appropriate. The imposition of a fine is not an appropriate penalty for the significant disregard the husband has shown for orders of this Court.
Considering each of the contraventions separately it is appropriate to impose a sentence of imprisonment but to provide for the suspension of the imprisonment on conditions. This is necessary because of the husband’s admitted contravention of significant orders of the Court, but also appropriate because of the ongoing contraventions over a period of time.
The orders will therefore provide for the husband to be sentenced in relation to the contravention concerning the sale of shares (contravention application filed by the wife on 10 October 2012), taking into account the other contraventions. The husband is sentenced to three months imprisonment, such term of imprisonment to be suspended on the basis that the husband enters into a bond to be of good behaviour and to comply with all orders of this Court for a period of 12 months.
Proceedings in relation to the child of the parties
H, the child of the parties, was born in 2001. He was therefore aged 13 at the conclusion of the trial.
Final orders in relation to the child were made by consent on 27 May 2010. These provided:
BY CONSENT IT IS ORDERED:
1That all previous orders relating to the child [H] born on … 2001 be discharged.
2That the parties have equal shared parental responsibility for the child [H].
3That the child live with the father as follows:
(a)During the school terms:
(i) Each alternate week from after school on the Friday until the conclusion of school on the following Friday or 3.30pm if a non-school day.
(b)During short school holidays:
(i) For one week of each of the term school holidays at times as agreed between the parties or failing agreement for the first week of the holidays commencing from after school on the last day of the school term until 5.00 pm on the mid Saturday of the school term holiday period.
(c)During the Christmas school holidays:
(i) For two weeks during the first four weeks of the Christmas school holidays as alternate weeks at times as agreed between the parties until the child reaches the age of 12 years and thereafter for two consecutive weeks or as agreed, subject to paragraph 3(d) of these orders in respect to the arrangements for Christmas;
(ii) In the last two weeks of the school holiday period commencing from the Monday of the last two week period as provided for in paragraph 3(a)(i).
(d)From 2.00pm on 25 December 2010 until 5.00 pm on 26 December 2010 or to conclude as agreed between the parties as provided for in paragraph 3(c)(i) herein and each alternate year thereafter, and from 5.00 pm on 24 December 2011 until 2.00pm on 25 December 2011 and each alternate year thereafter, on condition that the child live with the mother from 5.00 pm on 24 December 2010 until 2.00pm on 25 December 2010 and each alternate year thereafter, and from 2.00pm on 25 December 2011 until 5.00 pm on 26 December 2011 or to conclude as agreed between the parties as provided for in paragraph 3(c)(i) and each alternate year thereafter.
(e)From 5.00 pm on Easter Thursday in 2012 until 5.00 pm on Easter Monday in 2012 and each alternate year thereafter provided that if Easter falls during the short school holidays during the week that the child would live with the father that the time be included in the week that the child lives with the father and provided that the child live with the mother from 5.00 pm on Easter Thursday in 2011 until 5.00 pm on Easter Monday in 2011 and each alternate year thereafter, and if Easter falls during the short school holidays during the week that the child would live with the mother that the time be included in the week that the child lives with the mother.
(f)In the event that the child’s birthday falls on a school day during a period when the child is not otherwise living with the father from after school until 7.00 pm provided that if the child’s birthday falls on a school day during such time as the child lives with the father that he return to the care of the mother from after school until 7.00 pm.
(g)In the event that the child’s birthday falls on a weekend or during the school holidays during a period when the child is not otherwise living with the father for four hours at a time as agreed between the parties provided that if the child’s birthday falls on a weekend or during school holidays when the child is living with the father that the child return to the care of the mother for four hours at a time to be agreed.
(h)In each year in the event that Father’s day falls on a weekend when the child is not otherwise living with the father from 5.00 pm on the Saturday prior to Father’s day until 5.00 pm on Father’s day providing that if the child lives with the father on the weekend of Mother’s day that the child be returned to the mother’s care from 5.00 pm on the Saturday prior to Mother’s day until 5.00 pm on Mother’s day.
4.That the child live with the mother at all other times and as provided for in paragraph 3 herein.
5.That each party facilitate the child attending special family functions when the child is in the care of the other party, providing that the party who wishes the child to attend a special family function provide the other party with 7 days’ notice of the function.
6.That each party facilitate the child telephoning the other party at times as the child may request.
7.That each party maintain the child’s mobile phone when the child is in their care including ensuring that the phone is charged and that the phone has credit in order that the child is able to communicate with either of the parties as he wishes.
8.That handovers that do not take place at the child’s school take place at the Children’s Contact Service at [Town M] or at a neutral and friendly venue including either McDonalds or Hungry Jacks as agreed between the parties in writing.
9.That within seven days of the date of these orders each party register with the Anglicare Children’s Contact Service at [Town M] and sign all such documents as may be required by the Director of the said service to effect registration.
10.That each party be at liberty to attend the child’s school for parent teacher meetings and other functions that parents are usually invited to provided that they do not approach each other or permit any person accompanying them to approach the other party.
11.That each party be at liberty to obtain copies of the child’s school reports, school photographs and other information usually provided to parents from the child’s school.
12.That until the date that the child turns twelve years old that in the event that either party is not personally available to supervise the child as a result of work commitments during any period that the child lives with either of them that the child be placed in either after school care or vacation care by that party or that each party provide to the other party the first option to care for the child or alternative care as agreed between the parties.
13.That the parties communicate in respect of arrangements for the child and issues with respect to the child by e-mail or text message.
14.That in the event of a medical emergency involving the child that the party with whom the child is living contact the other party as soon as practicable.
15.That each of the parties facilitate the child attending counselling or other such therapy as recommended by the child’s treating general practitioner and each of the parties provide to the other details of any counsellor the child is referred to.
16.That each party be restrained and an injunction granted restraining each of them as follows:
(i)From consuming alcohol to excess or illicit drugs during any period that the child is in their care or for four hours prior to the child coming into their care;
(j)From allowing the child to be exposed to the use of illicit drugs or the consumption of alcohol to excess by any person at their premises;
17.That each of the parties be restrained and an injunction granted restraining each of them from denigrating the other parent or allowing any other person to do so in the presence of the child.
18.That the father sign all such documents as may be required for the mother to obtain an Australian passport for the child.
19.That during school holidays or at other times as agreed, each party be at liberty to travel outside of the Commonwealth of Australia with the child for a period of up to two weeks or such time as agreed providing that each party give the other notice in writing 28 days prior to the proposed date of departure from Australia and provide in writing a copy of the child’s return airline ticket and a full itinerary providing details and contact numbers of the intended hotels or other accommodation for the entire travel period and provided that each party facilitate telephone communication between the child and the other party on two occasions each week and providing that the other party have the option of makeup time with the child on his return to Australia for a maximum period of one week.
20.That the child’s Australian passport be retained by the Registry of the Federal Magistrates Court in Adelaide with both parties to sign any application and/or correspondence addressed to the Federal Magistrates Court in respect of the release of the said Australian passport to either party.
21.That in the event that either party travels outside of the Commonwealth of Australia with the child that within seven days of their return to Australia that party re-deposit the passport with the Registry of the Federal Magistrates Court and provide proof in writing to the other party that the passport has been lodged with the Registry of the Federal Magistrates Court.
22.That in the event that the child travels outside of the Commonwealth of Australia with either party that they personally supervise the child at all times or facilitate the child attending an organised and appropriate child care facility (e.g. kids club facilities).
23.That the appointment of the Independent Children’s Lawyer be discharged.
24.That all applications in relation to the child the child be finalised and removed from the pending cases list.
This week about arrangement continued until the significant events of June 2013 when the wife attended upon the former matrimonial home (where she understood the husband had been residing and where she understood the child to be residing when in the husband’s care). She discovered that several of the rooms had been set up for marijuana growing and contained substantial equipment.
The husband was not present at the time. The wife was greeted by a lodger called Mr N. For reasons his Honour Justice Cronin gave on 10 July 2013, the husband’s time with the child was suspended until the adjourned date.
When the matter was heard on 26 August 2013, his Honour Justice Benjamin continued the orders made by Justice Cronin which provided that the husband not spend any time with the child, save and except that the husband could telephone the child and attend his soccer matches.
On 22 October 2013 orders were made which provided that the parties enrol in a Contact service for the child to spend supervised time with the husband at the service.
At the conclusion of the hearing in November 2014 the wife sought orders that she have sole parental responsibility for the child, that the child live with her and that there be no orders for the child to spend time with the husband.
At the conclusion of the hearing the husband sought the reinstatement of the orders which provided for the child to spend equal time with him on a week about basis.
The Law (children’s issues)
75.Part VII of the Family Law Act 1975 (Cth) (“the Act”) deals with matters relating to children. In particular sections 60B, 60CA, 60CC, 60CG, 61DA and 65DAA are relevant.
76.Set out below are the specific sections 60B, 60CA, 60CC, 61DA and 65DAA as they apply to these proceedings. (Although proceedings were commenced in 2009 final orders concerning the child were made by consent on 27 May 2010. The current proceedings concerning the child arose as a result of the incident on 14 June 2013 and are therefore after the amendments of 7 June 2012).
Section 60B
Object of Part and principles underlying it
(1)The objects of this Part are to ensure that the best interests of children are met by:
(a)ensuring that children have the benefit of both of their parents having a meaningful involvement in their lives, to the maximum extent consistent with the best interests of the child; and
(b)protecting children from physical or psychological harm from being subjected to, or exposed to, abuse, neglect or family violence; and
(c)ensuring that children receive adequate and proper parenting to help them achieve their full potential; and
(d)ensuring that parents fulfil their duties, and meet their responsibilities, concerning the care, welfare and development of their children.
(2)The principles underlying these objects are that (except when it is or would be contrary to a child's best interests):
(a)children have the right to know and be cared for by both their parents, regardless of whether their parents are married, separated, have never married or have never lived together; and
(b)children have a right to spend time on a regular basis with, and communicate on a regular basis with, both their parents and other people significant to their care, welfare and development (such as grandparents and other relatives); and
(c)parents jointly share duties and responsibilities concerning the care, welfare and development of their children; and
(d)parents should agree about the future parenting of their children; and
(e)children have a right to enjoy their culture (including the right to enjoy that culture with other people who share that culture).
(3)For the purposes of subparagraph (2)(e), an Aboriginal child's or Torres Strait Islander child's right to enjoy his or her Aboriginal or Torres Strait Islander culture includes the right:
(a)to maintain a connection with that culture; and
(b)to have the support, opportunity and encouragement necessary:
(i) to explore the full extent of that culture, consistent with the child's age and developmental level and the child's views; and
(ii) to develop a positive appreciation of that culture.
(4)An additional object of this Part is to give effect to the Convention on the Rights of the Child done at New York on 20 November 1989.
Note: the text of the Convention is set out in Australian Treaty Series 1991 No. 4 ([1991] ATS 4). In 2011, the text of a Convention in the Australian Treaty Series was accessible through the Australian Treaties Library on the website (
Section 60CA
Child's best interests paramount consideration in making a parenting order
In deciding whether to make a particular parenting order in relation to a child, a court must regard the best interests of the child as the paramount consideration.
Section 60CC
How a court determines what is in a child’s best interests
(1)Subject to subsection (5), in determining what is in the child’s best interests, the court must consider the matters set out in subsections (2) and (3).
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.
Note: Making these considerations the primary ones is consistent with the objects of this Part set out in paragraphs 60B(1)(a) and (b).
(2A)In applying the considerations set out in subsection (2), the court is to give greater weight to the consideration set out in paragraph (2)(b).
Additional considerations
(3)Additional considerations are:
(a)any views expressed by the child and any factors (such as the child’s maturity or level of understanding) that the court thinks are relevant to the weight it should give to the child’s views;
(b) the nature of the relationship of the child with:
(i) each of the child’s parents; and
(ii) other persons (including any grandparent or other relative of the child);
(c)the extent to which each of the child’s parents has taken, or failed to take, the opportunity:
(i) to participate in making decisions about major long-term issues in relation to the child; and
(ii) to spend time with the child; and
(iii) to communicate with the child;
(ca)the extent to which each of the child’s parents has fulfilled, or failed to fulfil, the parent’s obligations to maintain the child;
(d)the likely effect of any changes in the child’s circumstances, including the likely effect on the child of any separation from:
either of his or her parents; or
any other child, or other person (including any grandparent or other relative of the child), with whom he or she has been living;(e)the practical difficulty and expense of a child spending time with and communicating with a parent and whether that difficulty or expense will substantially affect the child’s right to maintain person relations and direct contact with both parents on a regular basis;
(f) the capacity of:
(i) each of the child’s parents; and
(ii) any other person (including any grandparent or other relative of the child);
to provide for the needs of the child, including emotional and intellectual needs;
(g)the maturity, sex, lifestyle and background (including lifestyle, culture and traditions) of the child and of either of the child’s parents, and any other characteristics of the child that the court thinks are relevant;
(h) if the child is an Aboriginal child or a Torres Strait Islander child:
(i) the child’s right to enjoy his or her Aboriginal or Torres Strait Islander culture (including the right to enjoy that culture with other people who share that culture); and
(ii) the likely impact any proposed parenting order under this Part will have on that right;
(i)the attitude to the child, and to the responsibilities of parenthood, demonstrated by each of the child’s parents;
(j)any family violence involving the child or a member of the child’s family;
(k)if a family violence order applies, or has applied, to the child or a member of the child’s family – any relevant inferences that can be drawn from the order, taking into account the following:
(i) the nature of the order;
(ii) the circumstances in which the order was made;
(iii) any evidence admitted in proceedings for the order;
(iv) any findings made by the court in, or in proceedings for, the order;
(v) any other relevant matter;
(l)whether it would be preferable to make the order that would be least likely to lead to the institution of further proceedings in relation to the child;
(m) any other fact or circumstance that the court thinks is relevant.
Consent orders
(5)If the court is considering whether to make an order with the consent of all the parties to the proceedings, the court may, but is not required to, have regard to all or any of the matters set out in subsection (2) or (3).
Right to enjoy Aboriginal or Torres Strait Islander culture
(6)For the purposes of paragraph (3)(h), an Aboriginal child’s or Torres Strait Islander child’s right to enjoy his or her Aboriginal or Torres Strait Islander culture includes the right:
(a)to maintain a connection with that culture; and
(b)to have the support, opportunity and encouragement necessary:
(i) to explore the full extent of that culture, consistent with the child’s age and developmental level and the child’s views; and
(ii) to develop a positive appreciation of that culture.
Section 61DA
Presumption of equal shared parental responsibility when making parenting orders
(1)When making a parenting order in relation to a child, the court must apply a presumption that it is in the best interests of the child for the child's parents to have equal shared parental responsibility for the child.
Note:The presumption provided for in this subsection is a presumption that relates solely to the allocation of parental responsibility for a child as defined in section 61B. It does not provide for a presumption about the amount of time the child spends with each of the parents (this issue is dealt with in section 65DAA).
(2)The presumption does not apply if there are reasonable grounds to believe that a parent of the child (or a person who lives with a parent of the child) has engaged in:
(a)abuse of the child or another child who, at the time, was a member of the parent's family (or that other person's family); or
(b)family violence.
(3)When the court is making an interim order, the presumption applies unless the court considers that it would not be appropriate in the circumstances for the presumption to be applied when making that order.
(4)The presumption may be rebutted by evidence that satisfies 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.
Section 65DAA
Court to consider child spending equal time or substantial and significant time with each parent in certain circumstances
Equal time
(1)Subject to subsection (6), if a parenting order provides (or is to provide) that a child's parents are to have equal shared parental responsibility for the child, the court must:
(a)consider whether the child spending equal time with each of the parents would be in the best interests of the child; and
(b)consider whether the child spending equal time with each of the parents is reasonably practicable; and
(c)if it is, consider making an order to provide (or including a provision in the order) for the child to spend equal time with each of the parents.
Note 1:The effect of section 60CA is that in deciding whether to go on to make a parenting order for the child to spend equal time with each of the parents, the court will regard the best interests of the child as the paramount consideration.
Note 2: See subsection (5) for the factors the court takes into account in determining what is reasonably practicable.
Substantial and significant time
(2) Subject to subsection (6), if:
(a)a parenting order provides (or is to provide) that a child's parents are to have equal shared parental responsibility for the child; and
(b)the court does not make an order (or include a provision in the order) for the child to spend equal time with each of the parents;
the court must:
(c)consider whether the child spending substantial and significant time with each of the parents would be in the best interests of the child; and
(d)consider whether the child spending substantial and significant time with each of the parents is reasonably practicable; and
(e)if it is, consider making an order to provide (or including a provision in the order) for the child to spend substantial and significant time with each of the parents.
Note 1:The effect of section 60CA is that in deciding whether to go on to make a parenting order for the child to spend substantial time with each of the parents, the court will regard the best interests of the child as the paramount consideration.
Note 2:See subsection (5) for the factors the court takes into account in determining what is reasonably practicable.
(3)For the purposes of subsection (2), a child will be taken to spend substantial and significant time with a parent only if:
(a)the time the child spends with the parent includes both:
(i)days that fall on weekends and holidays; and
(ii)days that do not fall on weekends or holidays; and
(b)the time the child spends with the parent allows the parent to be involved in:
(i) the child's daily routine; and
(ii) occasions and events that are of particular significance to the child; and
(c)the time the child spends with the parent allows the child to be involved in occasions and events that are of special significance to the parent.
(4)Subsection (3) does not limit the other matters to which a court can have regard in determining whether the time a child spends with a parent would be substantial and significant.
Reasonable practicality
(5)In determining for the purposes of subsections (1) and (2) whether it is reasonably practicable for a child to spend equal time, or substantial and significant time, with each of the child's parents, the court must have regard to:
(a)how far apart the parents live from each other; and
(b)the parents' current and future capacity to implement an arrangement for the child spending equal time, or substantial and significant time, with each of the parents; and
(c)the parents' current and future capacity to communicate with each other and resolve difficulties that might arise in implementing an arrangement of that kind; and
(d)the impact that an arrangement of that kind would have on the child; and
(e)such other matters as the court considers relevant.
Note: Paragraph (c) reference to future capacity--the court has power under section 13C to make orders for parties to attend family counselling or family dispute resolution or participate in courses, programs or services.
Consent orders
(6)If:
(a)the court is considering whether to make a parenting order with the consent of all the parties to the proceedings; and
(b)the order provides (or is to provide) that a child's parents are to have equal shared parental responsibility for the child;
the court may, but is not required to, consider the matters referred to in paragraphs (1) (a) to (c) or (if applicable) the matters referred to in paragraphs (2) (c) to (e).
(7)To avoid doubt, subsection (6) does not affect the application of section 60CA in relation to a parenting order.
Note:Section 60CA requires the best interests of the child to be the paramount consideration in a decision whether to make a particular parenting order.
There are significant matters to be considered concerning the child’s best interests . The primary considerations are set out in s 60CC (2) and (2A).
Significant matters relate to the visit by the wife to the property in which she understood the husband had previously been residing and where she understood the husband was spending time with the child.
The wife maintains that following information she received from a subpoena to WorkCover SA she became aware that the husband was asserting that he was not living at the G Street, Town E property in March 2013.
In June 2013 the wife and her current partner, Mr Y, attended upon the property at G Street. The wife asserted that they attended there because they were concerned that the property had been “abandoned”.
As a result of her attendance there the police were called to the property. Inside the house the rumpus room, attached garage and master bedroom had been locked to prevent access to those rooms. At the time the wife visited there was a boarder (T) present, who was living in a different part of the house.
The police entered the property and discovered equipment used in the production of cannabis.
The husband maintained that the equipment was not his and that he had not installed it. He suggested that the boarder was responsible.
The evidence provided by the wife and her witnesses clearly establishes the substantial amount of equipment and significant efforts made at the property for the production of illegal quantities of marijuana.
The husband’s evidence attempting to explain this equipment and his failure to notice or be aware of this equipment, together with his failure to inform the wife that he and the child had moved was not satisfactory. This is the basis upon which the Court is able to find that there would be an unacceptable risk to the welfare of the child if he were to be left regularly in the care of the husband.
I also accept the evidence of the wife that following upon the separation the husband has taken steps to alienate the eldest child, Mr A, from the wife. This has resulted in damage to their relationship. The wife has taken steps to renew her relationship with Mr A and to ensure that Mr A and the child continue to have a proper sibling relationship.
There have been three family reports prepared in this matter. The first one being prepared prior to the Consent Orders in May 2010.
The next report was prepared by Ms GG and dated 16 August 2011. The last report was prepared by Ms HH dated 29 August 2013.
Both Ms GG and Ms HH gave oral evidence at the trial. The Court takes into account the complete reports and all of the evidence provided by the Family Consultants. Their evidence and recommendations must be seen however in the context of the information which was provided to them and their assessment of that information.
It was appropriately conceded by the Family Consultants during their oral evidence that if there was a risk to the child’s welfare (whether it is physical, emotional or psychological) then the recommendations would be reconsidered.
In the last report (29 August 2013) Ms HH referred to the information provided to her by the child. This communication needs to be considered in the context of his exposure to the ongoing conflict between his parents.
H reported to the Family Consultant that he had been regularly left on his own at night for a few hours when his father left him. Sometimes his older brother Mr A was present and at other times he was not. Paragraph 21 of the reports says:
21.[H]reported his father left the house 2 or 3 nights a week for a few hours and he was unsure where he went. Approximately half of these occasions he was left home alone and on the other half [Mr A] was present. When alone he did not feel unsafe but rather lonely. He reported his father could have a temper for example get angry when he spilt something on the carpet but he had never hurt him. His father drank at home frequently and on occasion seemed drunk.
As to the child’s wishes, paragraph 27 states:
27.He wanted to see his father and was initially non-committal about resumption to a week about. He later advised he would consider this but had two concerns. One, the information given to him by his mother finding the drugs. “I don’t like drugs” and two, his father frequently going out at night. If he could be reassured on these he would feel better.
As part of the conclusion, the report states as follows:
36.In this most recent litigation the mother has raised concerns that would appear to have foundation and are supported by evidence. The father in fact was convicted for having 18 Marijuana plants in 2012 and more recently the police have found drug paraphernalia in a home where he had resided with the subject child some months earlier. As a result all of the child’s time with the father has ceased.
37.It is assessed albeit in a limited conference that despite recent events the child has a strong bond and attachment to his father. This was supported by his statements and the observation of interaction with him.
38.H could not contain his sadness and was clearly the most responsive when asked to contemplate having no time with [Mr Sheridan]. He clearly indicated his preference to have time resumed.
39.[Mr Sheridan] was evasive in regards to his conviction in 2012. He argued that [the child] was however not exposed or negatively impacted in anyway by these events. [The child’s] statements appear to largely support this.
40.It is noted that [the child] did not raise the father’s prior conviction to the writer and his information was limited to what the mother had told him. It would appear that he was misinformed by [Ms Sheridan] in regards to what she discovered in the home on 14 June 2013. The Police reported in (Parenting Interim Orders Judgment dated 2 August 2013, Honourable Justice Cronin) paragraph 15 states the police did not find plants but drug cultivating equipment only. [The child] reported that [Ms Sheridan] had told him she found marijuana plants in his father’s bedroom and the outside shed.
41.It would seem that the mother has overly exposed the child to adult matters and apparently given inaccurate information. This is unfortunate and highly concerning in light of previous Family Report assessment of her. It is noted that the mother had not previously raised illicit drugs as a risk factor in previous assessments. Notwithstanding this, the father’s explanation regarding his drug activities were significantly vague and avoidant.
42.[Ms Sheridan] disclosing her relationship with [Mr A] and then requesting this not be documented is somewhat curious and concerning. This is assessed as inviting collusion and unnecessary secrecy. the child was asked to do the same. This is likely to be confusing and difficult for a child the child’s age to navigate his way through.
43.On the balance of probabilities it would appear the child has more to gain from the Court reinstating previous Orders of a week about arrangement while it is acknowledged that the risk associated with the father’s alleged recent drug activities remains as unknown.
Significantly the evidence before the Court indicated that the father continued to be unable to provide satisfactory explanation about the drug activities on the premises and his failure to notice or report the same. His evidence concerning these matters continued to be “significantly vague and avoidant”.
The Court also takes into account the significant past behaviour of the husband in leaving the child alone at night without appropriate supervision.
The evidence of the father in his written documents and during his oral evidence raises serious concern about the father’s failure to understand the impact of his behaviour upon the child.
Whilst the recommendations of the Family Consultant in the written report favoured a reintroduction of week about shared care, the evidence before the Court (particularly, the unsatisfactory evidence of the husband) raises serious concerns about the future welfare of the child if he were to spend shared time or significant time in the care of the husband.
Section 61DA (4) indicates that the presumption of equal shared parental responsibility does not apply if the Court is satisfied that it would not be in the best interests of the child for the parents to have equal shared parental responsibility. In this case the parties have clearly shown an inability to communicate in any satisfactory way. The Court is satisfied that the parents in this case do not have the capacity to carry out the responsibilities required by equal shared parental responsibility and it is therefore not in the child’s best interest for that responsibility to be shared.
For a considerable period of time now the mother has exercised sole parental responsibility. To reduce the child’s involvement in the ongoing conflict between his parents it is appropriate for the mother to continue to have sole parental responsibility.
The provisions of s 65DAA therefore do not apply in this matter.
The Court also takes into account all of the provisions of the s 60CC in determining both sole parental responsibility, with whom the child lives and the time he spends with the husband.
The primary considerations relate to the benefit to the child having a meaningful relationship with both parents and the need to protect the child from harm.
The Court takes into account the observations of the relationship between the child and his father as disclosed in the written family reports and the oral evidence of the Family Consultants.
The need to protect the child from harm is however in this case a significant factor. Not only is it necessary to protect the child from any risk or unacceptable risk of physical harm (taking into account the accepted evidence that the child has been left alone at night by the husband unsupervised) but also the risk of being exposed to illegal or inappropriate behaviour by the husband, which arises as a result of the husband’s past involvement in drug cultivation and drug conviction.
It is also necessary to carefully consider the risk to the child of psychological and emotional harm which would arise if the child were to again spend alternate weeks in the care of his father. The wife is clearly opposed to this arrangement and has appropriate reasons for such opposition.
The additional considerations require the Court to take into account the following:
(a)any views expressed by the child and any factors (such as the child’s maturity or level of understanding) that the court thinks are relevant to the weight it should give to the child’s views.
H has clearly indicated his views to the Family Consultant, however he was hesitant. His views should be taken into account weighing up, not only his age, but also the regrettable situation in which the child has found himself clearly involved in the conflict between his parents.
The views expressed by the child to the Family Consultant also need to be considered in light of the time that has passed since the child spent regular unsupervised time with the husband. His age and likely developing maturity are also taken into account.
(b)the nature of the relationship of the child with:
(i) each of the child's parents; and
(ii) other persons (including any grandparent or other relative of the child);
The Court accepts that in the past the child has had a good relationship with both of his parents and has continued a good relationship with his brother Mr A.
(c)the extent to which each of the child's parents has taken, or failed to take, the opportunity:
(i)to participate in making decisions about major long-term issues in relation to the child; and
(ii) to spend time with the child; and
(iii) to communicate with the child;
and
(ca)the extent to which each of the child's parents has fulfilled, or failed to fulfil, the parent's obligations to maintain the child;
As previously indicated the Court accepts that the wife has been reluctant to encourage the continuing relationship between the child and the husband, but the Court accepts that she did so on the basis that she believed for appropriate reasons that the child was at risk in the husband’s care.
(d)the likely effect of any changes in the child's circumstances, including the likely effect on the child of any separation from:
(i) either of his or her parents; or
(ii)any other child, or other person (including any grandparent or other relative of the child), with whom he or she has been living;
This factor needs to be seen in the context of the arrangements which have been in place since June 2013.
(e)the practical difficulty and expense of a child spending time with and communicating with a parent and whether that difficulty or expense will substantially affect the child's right to maintain personal relations and direct contact with both parents on a regular basis;
This is not a significant factor in this matter.
(f)the capacity of:
(i) each of the child's parents; and
(ii)any other person (including any grandparent or other relative of the child);
to provide for the needs of the child, including emotional and intellectual needs;
and
the attitude to the child, and to the responsibilities of parenthood, demonstrated by each of the child's parents;
I accept that the wife has the capacity to provide for the child’s needs, including his emotional and intellectual needs and has the appropriate attitude towards her responsibility.
The wife opposes the ongoing relationship between the husband and child because of her concerns about the husband’s past behaviour. I accept these concerns are genuine. It does however limit her ability to encourage and facilitate a relationship between the husband and child.
The evidence before the Court raises the serious doubts about the husband’s capacity to provide for the child’s needs. The evidence also suggest that whilst his attitude to the child is one of a loving father, his attitude towards his responsibilities as a parent has been called into question.
Subsections (g) and (h) are not relevant in these proceedings.
(j)any family violence involving the child or a member of the child’s family;
and
(k)if a family violence order applies, or has applied, to the child or a member of the child’s family – any relevant inferences that can be drawn from the order, taking into account the following:
(i)the nature of the order;
(ii)the circumstances in which the order was made;
(iii)any evidence admitted in proceedings for the order;
(iv)any findings made by the court in, or in proceedings for, the order;
(v)any other relevant matter.
Although issues arose in relation to family violence concerning the parties, this was not a significant factor in determining the final orders to be made. Particularly concerning the consent orders made in May 2010.
Conclusion
Taking into account all of the evidence, and in particular the significant unacceptable risk of harm to the child if the arrangements were to be week about care with his parents, the Court is satisfied that it is in the child’s best interests to live with the mother and spend limited time with the father.
For the above reasons therefore the orders will provide for the wife to have sole parental responsibility for the child, the child to live with the wife and for the child to spend time with the husband upon such terms and conditions as the parents may agree in writing and failing agreement for the child to spend alternate Sundays with the father from 9.00 am until 8.00 pm for a period of four months and then increasing from 9.00 am Saturday until 5.00 pm Sunday each alternate weekend until the weekend after the child’s 15th birthday, when the arrangements will thereafter be each alternate weekend from the conclusion of school on Friday until the commencement of school on Monday.
Property Settlement Proceedings
Hearings
The property settlement proceedings continued after the contraventions were heard. The husband relied upon his Financial Statement filed on 4 June 2012 and his affidavit of evidence-in-chief filed on 28 September 2012.
The wife relied upon her affidavits filed on 28 September 2012; 8 October 2012 and the Financial Statement filed on 31 May 2012.
Both parties provided balance sheets and case outlines.
During the oral evidence the parties were also cross-examined upon material in previous affidavits filed in these proceedings.
The trial commenced with the wife unrepresented and with the husband represented by Mr Childs of Counsel. The evidence was heard on 29 October 2012, 30 October 2012, 31 October 2012, 1 November 2012 and 2 November 2012. It continued on 19 November 2012 when the husband’s solicitors ceased to act for him and counsel was released. The trial continued through 19 November 2012, 20 November 2012, 21 November 2012 and 22 November 2012, with final submissions heard on 5 December 2012.
The first part of the trial consisted mainly of the brief oral evidence of the husband, then lengthy cross-examination by the wife of the husband, followed by brief oral evidence of the wife and limited cross-examination of the wife by the husband.
At the conclusion of that hearing, the husband sought orders for final property settlement which provided for the property at G Street, Town E and the property at C Street, Town D to be sold, the Westpac Bank debts paid and the proceeds divided equally between the parties on the understanding that the husband would remain solely liable for any amount due to Mr X. He also sought other ancillary orders.
At the conclusion of that hearing, the wife sought that the Court take into account the values of the G Street, Town E and the C Street, Town D properties, but add into the calculations significant amounts she claimed were retained by the husband by way of cash or items of personal property, the loss of business and losses on real estate. She also sought to bring into account sums representing what she claimed to be “add-backs” including an amount related to the husband residing in the former matrimonial home for three years.
On 5 December 2012 after hearing closing submissions from the husband, the wife, counsel for Mr X and the solicitors Norman Waterhouse Lawyers, judgment was reserved.
The trial was re-opened on 8 May 2013 when both parties appeared unrepresented. The property settlement proceedings were re-opened and interim orders made in relation to financial matters, including garnishing part of the husband’s payments from WorkCover SA.
The trial was then further continued on 30 May 2013. Orders were made providing for the sale of the property at C Street, Town D (“the Town D property”) which included the discharge of the mortgage and the investment of the balance of the proceeds to be held in an interest bearing account by the Registry Manager of the Family Court at Adelaide pending further order. On that day directions were made for the further evidence to be heard and documents filed.
When the matter resumed on the appointed date of 17 June 2013 the Court received a medical certificate from the husband in support of his oral application to adjourn the trial.
For reasons that were then given the matter was further adjourned to resume on 10, 11 and 12 September 2013.
Detailed orders were made in relation to preparing the matter for further hearing, further disclosure and interim financial orders.
When the trial resumed on 10 September 2013 preliminary issues were dealt with and further evidence heard concerning the changes to the parties’ financial situation. This included the issues in dispute between the parties concerning what was known as the “II Pty Ltd” debt which was then the subject of proceedings in the Magistrates Court. The wife was seeking that the husband indemnify her for any amount owing in relation to the debt.
By way of interim order the Court refused to make the order but gave the wife liberty to apply on short notice for payment of any judgment sum to be made from the monies then held in trust (being the balance of the proceeds of sale of the Town D property).
On that occasion directions were made that children’s issues be listed for final hearing in February 2014, but also on standby for late 2013.
Judgment was again reserved on the property settlement proceedings.
On 22 October 2013 further directions were made in relation to the hearing of the children’s matters and re-opening of the financial matters. On that date the matter was listed for a further four days in November 2013 and directions made for filing material and further discovery.
The part-heard trial in relation to financial matters was re-opened on 18 November 2013. There were further interim issues in relation to discovery. Further evidence was then heard from both the husband and the wife. Subsequently, during those listing days, evidence was heard from the Family Consultant, Ms GG, and Family Consultant, Ms HH.
On 22 November 2013 the Court heard the final submissions of both the husband and wife in relation to financial matters and orders sought concerning the child the child.
Judgment was reserved on 22 November 2013.
The case was again re-opened on 3 February 2014. Further material was received in relation to the debt due to II Pty Ltd. An order was made providing for payment of the $45,000 to lawyers for II Pty Ltd and an adjustment of the amount owing to be taken into account in the final property settlement orders.
On 30 September 2014 the Court heard matters in relation to subpoenas which had been issued and the further contravention application which had been filed on 23 May 2014.
Evidence was heard from both the husband and the wife which continued on 1 October 2014. On that day the Court also heard submissions in relation to the interim application made by the wife for the release of funds to meet various debts. On that date the Court ordered the release of $5,000 to the wife from the funds held in trust by the Court. The interim proceedings and contraventions were adjourned to 20 October 2014.
On 20 October 2014 further evidence was heard in relation to the case application and contravention.
On 20 October 2014 the proceedings in relation to the final orders for property settlement were re-opened and adjourned to 6 and 7 November 2014.
By consent an order was made releasing the sum of $7,782 from the funds held by the Family Court to pay Randle & Taylor solicitors to be used to conclude litigation between the wife, the husband, various entities and Gibson & Partners.
On that occasion leave was given to the wife to issue a subpoena to Ms J to give evidence and further leave was given to the wife for subpoenas for documents to various entities.
On 6 November 2014 when the trial re-opened in relation to property settlement matters the Court received further evidence from the husband. The evidence concluded on 7 November 2014. The Court then heard further closing submissions from both the husband and the wife when judgment was again reserved.
At the conclusion of the hearing the wife sought the following orders:
1.The property at [G Street Town E] in the State of South Australia … be transferred to the respondent [Ms Sheridan] and that the costs in relation to the transfer of ownership be paid by the husband [Mr Sheridan].
2.That the remainder of the funds held in the Family Court Trust Fund of the amount of $71,063.33 be transferred to the wife.
3.That the husband be liable for the respondent’s legal costs.
4.That the husband keep his superannuation.
5.That the wife keep her superannuation from Westpac and the super contribution that has accumulated since her employment in 2010 with CARA.
6.Following the undertaking by Mr. Rowley, [Mr. X’s] lawyer in December 2012 at the finish of the first trial, that [Mr. X] remove the caveat placed by him over [G Street, Town E] in the State of South Australia within 30 days of judgement (sic) being hand (sic) down.
7.That the taxation liability of $49106.00 that has arisen from the marital business that has been suspended till judgement (sic) being handed down be treated as a joint liability.
8.That the final amount as decided by the Australian Taxation Office be split between both parties.
9.That the order made on June 17, 2013 regarding payment of all outstanding debts in relation to [G Street] be paid out in full upon transfer.
In Stanford v Stanford (2012) 247 CLR 108 paragraphs 36 to 40 and 42 the High Court judgment states:
36.The expression "just and equitable" is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds. And while the power given by s 79 is not "to be exercised in accordance with fixed rules", nevertheless, three fundamental propositions must not be obscured.
37.First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of s 79(1)(a) itself, which refers to "altering the interests of the parties to the marriage in the property" (emphasis added). The question posed by s 79(2) is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.” (Emphasis in original)
38.Second, although s 79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion. In Wirth v Wirth, Dixon CJ observed that a power to make such order with respect to property and costs "as [the judge] thinks fit", in any question between husband and wife as to the title to or possession of property, is a power which "rests upon the law and not upon judicial discretion". And as four members of this Court observed about proceedings for maintenance and property settlement orders in R v Watson; Ex parte Armstrong:
"The judge called upon to decide proceedings of that kind is not entitled to do what has been described as 'palm tree justice'. No doubt he is given a wide discretion, but he must exercise it in accordance with legal principles, including the principles which the Act itself lays down".
39.Because the power to make a property settlement order is not to be exercised in an unprincipled fashion, whether it is "just and equitable" to make the order is not to be answered by assuming that the parties' rights to or interests in marital property are or should be different from those that then exist. All the more is that so when it is recognised that s 79 of the Act must be applied keeping in mind that "[c]ommunity of ownership arising from marriage has no place in the common law". Questions between husband and wife about the ownership of property that may be then, or may have been in the past, enjoyed in common are to be "decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses". The question presented by s 79 is whether those rights and interests should be altered.
40.Third, whether making a property settlement order is "just and equitable" is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised "in accordance with legal principles, including the principles which the Act itself lays down". To conclude that making an order is "just and equitable" only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
…
42.In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
The Full Court decision of Omacini & Omacini (2005) FLC 93-218 refers to the decision of Kowaliw & Kowaliw (1981) FLC 91-082.
Paragraphs 30 and 31 of the Full Court in Omacini (Supra) state:
30.To date, three clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a)Where the parties have expended money on legal fees. In DJM and JLM (1998) FLC 92-816 the Full Court said at 85,262:
“11.6 For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.”
(b)Where there has been a premature distribution of matrimonial assets. In Townsend and Townsend (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at 81,654:
“In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.”
(c)In the circumstances outlined by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092 at 76,644:
“As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a)where 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
(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec.75(2)(o) to applications for settlement of property instituted under the provisions of sec.79.”
31.As the Full Court said in Browne and Green (1999) FLC 92-873 at 86,360:
“44.We agree with her Honour that the principles stated by Baker J in Kowaliw certainly do not constitute any form of fixed code. They are no more than guidelines for use in the exercise of the discretionary jurisdiction conferred by s 79 of the Family Law Act 1975. Nevertheless, they have over the considerable period of time since they were enunciated, become a well accepted guideline in this jurisdiction – a guideline the use of which assists in the achievement of the important goal of consistency within the jurisdiction.”
Prior to Stanford (Supra) there were decisions which notionally “add back” amounts to the asset pool where there had been reckless, negligent, wanton behaviour. The Full Court in Omacini (Supra) at paragraph 30 set out the three categories as above.
The wife relied upon the decision of Tate & Tate (2000) FLC 93-047.
In Swinton v Barnstable [2011] FamCA 548 at 53 states:
53.The principles that arise from these cases appear to be the following:
i)The principle in Kowaliw is not a fixed code.
ii)Kowaliw is a useful guideline for dealing with cases involving lost assets or income.
iii)In cases involving waste there must be a proper reason for adopting a non Kowaliw approach.
iv)If the losses occurred in the course of the pursuit of the objectives of the marriage then such losses should be shared by the parties, although not necessarily equally.
v)The economic consequences of waste must be dealt with in a just and equitable manner.
vi)The economic consequences (loss) may be treated as a premature distribution of the asset pool and notionally added back as the asset of the party who had its sole benefit.
vii)Taking the premature distribution into account in a general way pursuant to s 75(2)(o) and applying the cumulative outcome of the s 79(4) and s 75(2) findings to the smaller depleted asset pool may offend s 79(2) notions of justice and equity.
viii)Where the asset pool had been seriously depleted, it may be that only by giving the premature distribution its full dollar value that justice can be given.
ix)The premature distribution concept is not restricted to post separation transactions.
x)Where monies have been reasonably disposed of the notional add back approach is the exception and not the rule.
xi)Notional adjustments are not limited to wasted assets but may also include property that has been bona fide disposed of.
xii)The source of the funds is relevant.
xiii)Notionally included assets may include unascertained assets, even if the precise value is not known.
xiv)Even if the matter does not involve waste, the economic consequences of a significant reduction in the asset pool must be considered.
In Bevan & Bevan (2013) FLC 93-545 at paragraph 79 the Full Court said:
79.We observe that “notional property”, which is sometimes “added back” to a list of assets to account for the unilateral disposal of assets, is unlikely to constitute “property of the parties to the marriage or either of them:, and thus is not amenable to alteration under s 79. It is important to deal with such disposals carefully recognising the assets no longer exist, but that the disposal of them forms part of the history of the marriage – and potentially an important part. As the question does not arise here, we need say nothing more on this topic, save to note that s 79(4) and in particular s 75(2)(o) gives ample scope to ensure a just and equitable outcome when dealing with the unilateral disposal of property.
Assets and liabilities
At the conclusion of one part of the trial in December 2012 the evidence indicated that the following were the assets and liabilities to be brought into account:
1. Former matrimonial home at [G Street,
Town E] in the joint names of the parties $460,000.00
2. [C Street, Town D] vacant land in the name
the wife (agreed value) $460,000.003. Motor Vehicle 1 retained by the husband $3,500.00
4. Motor Vehicle 2 retained by the wife $3,500.00
5. Furniture and effects retained by the husband $5,372.00
5. Furniture and effects retained by the wife $10,247.00
6. Proceeds received by the husband from his brother
for sale of other furniture $6,000.00Superannuation
1. Wife’s superannuation $23,000.00
2. Husband’s superannuation $13,369.00
Liabilities
1. Debts due to Westpac in relation to mortgage over
[Town D] property - $202,396.00
2. Amount due to Westpac in relation to remaining balance on
sale of other properties $112,060.00
The husband had by then contravened Court orders and sold his shares which were value at over $20,000 in February 2011.
There were however substantial alterations which arose thereafter.
Orders were made which provided for the wife to use monies in her own bank account to reduce the mortgage owing to Westpac in relation to the C Street, Town D property.
Significantly on 30 May 2013 the Court gave the wife permission to sell the property at C Street, Town D for a price not less than $460,000 and to use the proceeds to pay the costs of sale, discharge all debts owing to Westpac secured over that property or any other outstanding debts to Westpac of the parties or related entities, discharge any debts being rates, taxes or other outgoings relating to that and other properties of the parties and pay the balance into an interest bearing account in the name of the Registry Manager of the Family Court of Australia in Adelaide.
The orders of 17 June 2013 provided for the wife to arrange for cleaning and repairs and maintenance of the property at G Street, Town E and for the cost of such work to be taken into account in the adjustment of final property settlement orders.
The C Street property was sold. As a result the Westpac debts were paid. After payment of amounts permitted by the Order $125,725.47 and $411.01 (total $126,136.48) was paid into the Family Court Registry interest bearing account.
By order of 3 February 2014, $45,000 was paid from the interest bearing trust account held by the Family Court to enable the wife to pay the debt found to be owing by her to II Pty Ltd. The wife had previously sought that the husband indemnify her in relation to this debt.
Following upon the application by the wife for the release of further funds by order the Court authorised the release of $5,000 to the wife to allow her to pay the costs of solicitors Randle & Taylor in relation to litigation concerning the business.
A similar order was made on 20 October 2014 permitting the sum of $7,782 to be released to Randle & Taylor’s solicitors upon condition that the money was used to settle the litigation between the wife, the husband, various entities and Gibson & Partners.
The husband admitted contravening the Orders of the Court which specifically ordered him not to dispose of any of his shares. The wife maintains that the shares were purchased for $70,000. She maintained that the shares had an estimated value of $50,000. The husband admitted that he had sold the shares, but sought to have brought into account the sale price which he maintained was $9,457.90.
In the Financial Statement filed by the wife on 12 November 2013 the wife described her occupation as “team leader” and her salary as $1,021 per week. Apart from her interest in the property at G Street, Town E, the wife set out small savings accounts and minor other assets including a motor vehicle estimated at $2,000 and household contents.
At the time of the swearing of that Financial Statement she gave her superannuation as a gross value of estimated $25,501 at Westpac and Australian Super, $3,000 (total $28,500 superannuation).
In that Financial Statement the wife described her liabilities as estimated $82,000 to Norman Waterhouse Lawyers for legal fees and referred to the II Pty Ltd debts of $30,916 and $15,255 (total $46,171) and Gibson & Partners, $38,385. The wife also described other personal business liabilities as HH Accountants $7,700.
In a Financial Statement filed by the husband on 4 November 2014, in an answer to the question of “what is your current occupation?” the husband included “Business M/top up WorkCover”. He described his employer as “Business” at, U Shopping Centre. He claimed that he had been employed there for five months. He gave his estimated salary as $800 per week and at “other income” put estimated $1,011 per week (presumably referring to his WorkCover payments).
In that Financial Statement the husband referred to his interest in the G Street, Town E real estate. He also disclosed an ANZ account with an estimate of $9,600 and referred to shares as “estimate $100”. He referred to household contents worth $3,500 and referred to the monies held in the Court trust account as an estimate of $100,000.
In that November 2014 Financial Statement he referred to his Westpac Lifetime Superannuation as an estimate of $13,517.
Under liabilities he included the Mr X debt “as Finace” (sic) an estimate of $351,628 as a personal loan and credit card debts to Westpac Go MasterCard and ANZ of $25,183 and $14,784 (estimated). He referred to legal fees of an estimated $70,000.
The concluding part of the trial, the most recent evidence and final submissions were provided to the Court when both parties were unrepresented.
Taking into account the numerous changes to the evidence (oral and written) of the husband and his failure to provide proper explanations or appropriate documents, the Court is unable to rely on his evidence.
The evidence of the wife in relation to both financial matters and children’s issues is to be preferred.
Whilst the evidence of the wife is to be preferred to that of the husband, the reliable evidence establishing the specific assets and liabilities to be brought into account was limited.
The property at G Street, Town E was valued at $460,000 and the parties both relied upon this value.
The funds remaining in the Family Court Trust Account are now $71,795.04 (as at 1 June 2015) but this should be considered on the basis that originally the sum of $126,136.48 was paid into the trust account. From that amount orders have been made providing for $45,000, $5,000 and $7,782 to be paid out. Interest has also been accruing on the monies. The Court takes into account the monies already paid out at the request of the wife for the payment of monies due which arose from the business dealings.
The wife maintained that the share portfolio was valued in September 2012 at $50,000. She had previously argued that the shares were worth $70,000. The evidence from the husband is that he sold those shares (in breach of the Court orders) but received only $9,457.90.
There is no reliable evidence upon which the Court can find that at the time of the hearing (either at the commencement of the hearing or at the conclusion of the hearing) the share portfolio would have been worth the figures proposed by the wife. The Court will however take into account the fact that the shares were sold by the husband, without the wife’s permission and in breach of the Court Orders.
Similarly, the wife seeks to bring into account “cash in the safe” which she claims was retained by the husband at $18,000. The husband denied that such sum was in the safe. The Court cannot make a specific finding on any evidence before it concerning those funds.
Similarly, the evidence is unreliable concerning the monies retained by the husband or the wife from the business and the use to which those monies were put. The Court however prefers to rely upon the evidence of the wife which indicates that the husband did use some of the monies from the business and that the wife also used monies from the business.
Both parties had motor vehicles in their possession. There is no reliable evidence of the valuation, but it is accepted by both parties that the vehicles retained by the husband and retained by the wife should be considered equal at about $3,500. These will therefore not be brought into account in the overall calculations.
Similarly, the furniture and effects retained by the parties, including the proceeds received by the husband from his brother, are approximately the same ($10,247 for the furniture in the wife’s possession and $5,372 in the husband’s possession, plus $6,000 sold to his brother).
The wife sought to bring into account further equipment such as the coffee machine and items she claimed the husband retained or sold. The evidence in relation to these amounts is not reliable enough to enable them to be brought into account.
Both parties had superannuation. The wife maintained her superannuation was worth approximately $28,000. The husband’s superannuation was brought into account at $13,369. Both parties seek to retain their interest in the superannuation. The small difference in superannuation do not suggest any adjustment is necessary taking into account the other significant factors.
Liabilities
Any debts in relation to the Westpac mortgages were paid out upon the sale of the Town D property.
There remain however debts payable in relation to accounting fees, $7,700 (HH Accountants).
There were also taxation debts payable by the wife (as at November 2013 $48,537) which relate to income tax payable concerning the business which was officially in her name.
Taking into account the complex history of the matter and the debts which the wife has incurred, primarily in relation to the businesses and entities formerly operated as family businesses, I am satisfied that it is appropriate for these debts to be paid from the available funds in the Family Court Trust Account before distribution to the parties.
The debt to Norman Waterhouse Lawyers is of a different character. It was incurred by the wife for significant legal fees. At November 2013 $82,000 was claimed to be due. The Court is not in a position to identify the actual amount, nor the amount that may be payable if interest were accruing. Such debt will remain the debt of the wife and be a significant reduction in the assets available to her if Norman Waterhouse Lawyers are successful in recovering the full amount claimed.
The wife’s case was based upon the significant inclusion of what could be described as “add-backs”. Following the recent authority it is not appropriate to simply add-back these notional amounts. It is however appropriate to consider the factors to which the claimed add-backs relate.
In particular, the husband resided in the former matrimonial home for a period of three years without contributing to the debts. This was a significant benefit to him.
The wife also sought to bring into account the monies which she claimed were losses made on the sale of the real estate and loss of rent. The amounts claimed by the wife are significant however the calculations cannot be verified and used simply as “add-backs”. The Court will take into account the history of the transactions, the mortgages paid by the wife and losses sustained over the period of years.
The wife’s claim also included a request to “add-back” $400,000 as a figure which she claimed was lost on the business. The husband maintained that the wife’s behaviour contributed to the significant loss on the business.
Weighing the evidence of both of the parties, and in particular, preferring the evidence of the wife, I am not satisfied that the wife’s behaviour contributed to the loss of the significant business interests shortly after separation.
The evidence indicates that the wife’s behaviour in contacting various persons and suppliers did not assist in the maintenance of the established business. However, the husband’s behaviour in setting up competitive entities was also a significant factor.
Since the separation of the parties the husband has received a further WorkCover payment claiming to have resulted from injury. I accept the wife’s evidence however that he has continued to set up and manage a business of a similar nature to that operated prior to the separation.
Taking into account the aforementioned matters, the Court will therefore bring into account the value of the former matrimonial home at G Street, Town E ($460,000) and the proceeds of sale of the Town D property ($126,136.48) and the unpaid debts (excluding any debt to Mr X).
Taking into account the history of the relationship between the parties, the separation and the ongoing difficulties between the parties in running the businesses and adjusting their rights and interests in the jointly owned properties, I am satisfied that it is just and equitable to make an order for property settlement in these proceedings.
Section 79(2)
The provisions of s 79 also require the Court to consider the matters set out in s 79(4).
(a)The financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;
The evidence of both parties indicate that the Court should consider the financial contributions made by each of the parties to be equal up until the time of the separation. The husband played a significant role in the establishment of the business. The wife also participated in the business and had a significant role in the upbringing and care of the children.
Following upon the separation of the parties the wife attempted to maintain and operate the business. The husband’s steps taken which hindered and damaged the business are also taken into account. Since the litigation of the parties has commenced the wife has made clear attempts to conserve the assets of the parties but has not been successful, particularly in relation to maintaining the value of the businesses.
The husband has had the benefit of a considerable period of residence in the former matrimonial home whilst the debts accumulated.
These factors, combined with the claims that the wife has made in relation to add-backs, establishes the wife should be considered as having made a substantially greater financial contribution.
(b)The contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them;
The Court is also required to take into account contributions other than financial contributions. The wife again has clearly established a greater contribution, particularly since the separation in providing for the needs of the child. The Court takes into account that the husband had made a contribution in relation to the care of Mr A (who is now aged over 18).
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent;
As discussed above I consider that the parties both made contributions to the welfare of the family prior to the separation. Since separation there have been times when the child has been in shared care between the parties. For a considerable period now, however, the child has resided primarily with the wife. This factor is also taken into account.
(d)the effect of any proposed order upon the earning capacity of either party to the marriage;
This factor is not relevant in these proceedings.
(g)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.
The child support assessments have varied and they have been challenged. The husband has in the past claimed child support from the wife. The assessments have varied depending upon the information provided to the Child Support Authorities. The Court takes into account that the husband has been in receipt of an income from the business he claims to be owned by his son Mr A.
(e)the matters referred to in subsection 75(2) so far as they are relevant;
Section 79(4)(e) requires the Court to take into account those matters set out in s 75(2) so far as they are relevant. The relevant provisions in this matter are now considered.
(a)The age and state of health of each of the parties;
The husband has previously made claims pursuant to WorkCover and received significant WorkCover payments. He continues however to have the capacity, notwithstanding his age and claimed state of health, to set up the business for his son and to manage it on behalf of his son.
The parties are of similar age. The wife has the capacity to continue to manage businesses. These factors are therefore not significant in this matter.
(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;
As stated above both parties have the capacity to earn income. The property and financial resources of the parties have also been referred to previously.
(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 will continue to have the ongoing responsibility in relation to the child with limited financial assistance likely to be provided by the husband. This is a significant factor.
(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;
Both parties have similar commitments to support themselves. As indicated above the wife has a greater commitment in relation to the ongoing support of the child and is not likely to receive appropriate contribution from the husband in the future.
(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;
The husband maintains that he was in receipt of WorkCover payments as well as lump sum payout.
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
This is taken into account for both parties bearing in mind the previous standard of living maintained by the parties prior to separation.
Subsection (h) not relevant.
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant,
This will be taken into account particularly in relation to the payment of debts due from the monies held in the Family Court Trust Account. There will not be sufficient funds in the trust account to make the payment due to Norman Waterhouse Lawyers, who will thereafter need to recover the same from the wife.
(m)if either party is cohabitating with another person – the financial circumstances relating to the cohabitation;
The wife has a relationship with Mr Y. The husband was in a relationship with Ms J. The evidence provided to the Court was not sufficient to allow the Court to make appropriate findings concerning the financial circumstances concerning these relationships.
Conclusion
Taking into account all of the relevant factors pursuant to s 79 and s 75(2), the Court is satisfied that a significant adjustment in favour of the wife is appropriate. The Court considers that the wife should be allocated 75 per cent of the remaining net assets and the husband 25 per cent.
The adjustment also takes into account the payment of some of the debts due.
Assets
G Street, Town E $460,000.00
Funds in Trust account after payment to wife of debts
to be borne by both parties: $71,795.04
$531,795.04
(Rounded up to $531,800)Each party is to retain the furniture household effects, savings, shares and other personal assets in their possession.
Each party is to pay the debts not otherwise specified.
Liabilities
The sum of $45,721 was owing in relation to taxation. This should be paid from the funds held in the Family Court Trust Account.
The balance (of approximately $26,000) will be paid to reduce the debt owed by the wife to Norman Waterhouse Lawyers.
It is just and equitable to bring the Norman Waterhouse Lawyers’ debt into account because of the nature of the debt incurred by the wife and taking into account the significant role that the husband played in causing or contributing to that debt.
This leaves only the value of the property at G Street to be considered at $460,000 and the balance of approximately $56,000 due to Norman Waterhouse Lawyers.
$460,000 less $56,000 is $404,000.00
25 per cent to the husband is $101,000.00The orders shall provide that within ninety [90] days the husband transfer to the wife all his estate and interest in the property at G Street, Town E. Upon transfer to the wife and the discharge of the X Caveat, the wife is to pay the husband $101,000.
Orders will provide for each party to keep the furniture, motor vehicles, and personal effects , retain their superannuation and be liable for the payment of other debts or liabilities in their respective names.
I certify that the preceding two hundred and seventy-five (275) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 19 June 2015.
Associate:
Date: 19 June 2015
- AGLC
- Sheridan and Sheridan and Ors [2015] FamCA 468
- Case
- [2015] FamCA 468
- Decision Date
CaseChat Overview and Summary
The court was required to determine the appropriate parenting orders, specifically whether the wife should have sole parental responsibility and where the child should live, as well as the specific terms for the child spending time with the husband. A significant legal issue was whether the husband had contravened previous court orders without reasonable excuse, and if so, what penalty should be imposed. Furthermore, the court had to resolve the complex property settlement, including the transfer of the Town E property, the payment of outstanding debts, and the distribution of remaining assets and liabilities between the parties.
Justice Dawe ordered that the wife have sole parental responsibility for the child, H, and that the child live with the wife. Specific, phased arrangements were set for the child spending time with the husband, with provisions for handovers and restrictions on certain weekends and holidays. The court found that Mr Sheridan had contravened specific previous orders without reasonable excuse and sentenced him to three months imprisonment, suspended on the condition that he enter into a one-year bond to be of good behaviour and comply with all court orders. The wife's contravention applications were dismissed. In relation to property settlement, the wife was ordered to pay outstanding tax liabilities and legal fees from a sum invested, and the husband was ordered to transfer his interest in the Town E property to the wife in exchange for a settlement sum of $101,000. Provisions were made for the sale of the Town E property if the settlement sum was not paid within 120 days, with a specific distribution of proceeds. Otherwise, each party was to retain their existing property and be responsible for their own debts and liabilities.
Orders
Orders of the court
1.
The wife Ms Sheridan has sole parental responsibility for the child H born on … 2001 (“the child”).
2.
The child live with the wife.
3.
The child spend time with the husband as agreed in writing between the parties and failing agreement as follows:
(a) Commencing on Sunday 28 June 2015 on alternate Sundays from 9.00 am until 8.00 pm for a period of four (4) months;
(b) then from 31 October 2015 from 9.00 am Saturday until 5.00 pm Sunday each alternate weekend until the weekend after the child’s fifteen [15th] birthday;
(c) thereafter each alternate weekend from the conclusion of school on Friday until the commencement of school on Monday or if not during school term time from 4.00 pm Friday to 9.00 am Monday each alternate weekend;
(d) handovers at the conclusion of school and commencement of school shall may take place at the school without the other parent being present PROVIDED THAT the child is able to transport all necessary belongings without assistance;
(e) handovers which do not take place at the conclusion of school or commencement of school shall take place at a venue agreed in writing or at a neutral venue within three [3] kilometres of the wife’s residence as nominated by the wife in writing.
PROVIDED THAT the time the husband spends with the child shall not take place:
(i) on any weekend on which the Saturday or Sunday is the child’s birthday, the wife’s birthday or Christmas Day;
(ii) for a period of two [2] weeks on one [1] occasion per year to occur in a school holiday period nominated in writing by the wife to the husband not less than one [1] month before the said school holidays commence;
4.
UPON THE COURT FINDING THAT MR SHERIDAN CONTRAVENED THE FOLLOWING ORDERS WITHOUT REASONABLE EXCUSE
(a) paragraph 8 of the Order dated 2 July 2009;
(b) paragraph 8(b)(vi) of the Order dated 2 July 2009; and
(c) paragraphs 7 and 13 of the Order dated 17 June 2013.
Mr Sheridan is sentenced to imprisonment for a period of three [3] months such imprisonment being suspended upon condition that Mr Sheridan must forthwith enter into a bond for a period of ONE [1] YEAR without surety upon the following conditions:
(i) to be of good behaviour during the period of the bond; and
(ii) to comply with all orders of this Court.
5.
The wife’s Applications for Contravention Orders filed on 7 September 2010, 10 October 2012 and 23 May 2014 are dismissed.
6.
In full and final settlement of any claim that either the husband or wife may have against the other for settlement of property:
(a) The wife do forthwith produce to the Registry Manager of the Family Court of Australia at Adelaide, the Taxation Assessment Invoice for any sums due and payable by the wife to the Australian Taxation Officer for income tax due by the wife for any period prior to 30 June 2014 and any interest accrued thereof AND UPON the Registry Manager being satisfied that such payments still remain due and owing to the Australian Taxation Office, the Registry Manager do pay from the sum invested in relation to these proceedings to the Australian Taxation Office on behalf of the wife the amount due pursuant to such invoices, not to exceed the sum of FIFTY THOUSAND DOLLARS [$50,000.00];
(b) Upon production by Norman Waterhouse Lawyers of an agreement in writing between them and the wife or written confirmation by a Registrar of this Court for the amount owing by the wife to Norman Waterhouse Lawyers, the Registry Manager do pay to Norman Waterhouse Lawyers from the sum invested such sum as is due and payable by the wife;
(c) if thereafter any amount remains in the sum invested by the Registry Manager, then the Registry Manager do pay such sum to the wife;
(d) within ninety [90] days from this date the husband Mr Sheridan must do all acts (including but not limited to all steps and actions necessary to ensure the removal of any caveats) and execute all documents submitted to him by the wife Ms Sheridan to transfer to the wife all his interest in the property known as G Street, Town E in the State of South Australia (“the Town E property”) being the land in Certificate of Title Volume … Folio …;
(e) simultaneously with the registration of the transfer referred to in the aforementioned order the wife do pay to the husband the sum of ONE HUNDRED AND ONE THOUSAND DOLLARS [$101,000.00] (“the settlement sum”);
(f) in order to effect such transfer the wife shall provide to the husband within sixty [60] days from today the necessary transfer documents to be prepared at her sole expense and thereafter to be provided to the wife or her authorised agents at the settlement date in exchange for the said settlement sum;
(g) if either the husband or wife shall refuse or neglect to execute any memorandum of transfer or other document necessary to give effect to the terms of these orders, then in such case a Registrar of the Family Court of Australia at Adelaide upon proof by affidavit of such refusal or neglect is hereby appointed to execute and if in his or her opinion it shall be necessary to do so to settle the same and to do all such other acts and things and execute all such other documents as shall be necessary to give full force and effect to the orders herein.
7.
In the event that the wife refuses or neglects to make payment of the settlement sum of ONE HUNDRED AND ONE THOUSAND DOLLARS [$101,000.00] to the husband within one hundred and twenty days [120] from this date AND ON CONDITION that she has previously been offered all appropriate documents necessary and signed by the husband to effect the transfer of the Town E property then the Town E property shall be sold and payments made on the following terms and conditions:
(a) the wife provide instructions to an authorised real estate agent and auctioneer to auction the property for sale at a reserved price that has been agreed in writing between the husband and wife and failing agreement for the sum of FOUR HUNDRED AND SIXTY THOUSAND DOLLARS [$460,000.00] (or such other sum as may be determined if necessary upon further application to this Court);
(b) upon sale of the property the proceeds to be divided as follows:
(i) in payment of all disbursements, rates, taxes and other charges due on the property (except electricity and telephone charges), agent’s commission, valuer’s fees, legal fees and advertising expenses relating to the sale of the Town E property;
(ii) discharge of any costs previously ordered by the Court;
(iii) discharge of any further amount due and payable by the wife to Norman Waterhouse Lawyers;
(iv) in payment of seventy-five [75] per cent of the balance then remaining to the wife;
(v) in payment of the balance then remaining to the husband.
8.
The wife do otherwise retain for her sole use and benefit absolutely free from any claim or demand of the husband all items of furniture and effects in her possession, all savings, monies and investments, including shares in her sole name, her superannuation entitlement, any motor vehicle in her possession and all other items of real and personal property in her possession or control.
9.
The husband do otherwise retain for his sole use and benefit absolutely free from any claim or demand of the wife all items of furniture and effects in his possession, all savings, monies and investments, including shares in his sole name, his superannuation entitlement, any motor vehicle in his possession and all other items of real and personal property in his possession or control.
10.
Thereafter upon compliance with the orders contained herein each of them the husband and wife do otherwise pay and discharge all debts and liabilities in their sole name to the exoneration of the other and do indemnify the other in relation thereto.
11.
Save as to costs all outstanding applications are dismissed and removed from the active pending list.
Liberty to apply for consequential orders.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
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