TEAL & CORNELL
[2019] FCCA 2400
•3 September 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| TEAL & CORNELL | [2019] FCCA 2400 |
| Catchwords: FAMILY LAW – Property – adjustment of property interests – assessment of contributions – orders made adjusting property interests. FAMILY LAW – Child Maintenance – whether special circumstances exist for a child support departure order – three step process – order for lump sum child maintenance made. |
| Legislation: Family Law Act 1975 (Cth), ss.60B, 60CA, 60CC, 60CG, 61DA, 65DAA, 90SF, 117 |
| Cases cited: Bevan & Bevan [2013] FamCAFC 19 |
| Applicant: | MS TEAL |
| Respondent: | MR CORNELL |
| File Number: | PAC 962 of 2016 |
| Judgment of: | Judge Obradovic |
| Hearing dates: | 8, 9 and 19 November 2018 |
| Date of Last Submission: | 19 November 2018 |
| Delivered at: | Parramatta |
| Delivered on: | 3 September 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr Haezlewood |
| Solicitors for the Applicant: | Lewarne Goldsmith |
| Appearing for the Respondent: | In person |
| Counsel for the Independent Children's Lawyer: | Mr Givney |
| Solicitors for the Independent Children's Lawyer: | Legal Aid New South Wales |
ORDERS
All prior orders are discharged.
The applicant shall have sole parental responsibility for the children X born … 2005 and Y born … 2008.
The children shall live with the applicant.
The children shall spend no time with the respondent.
The Court being satisfied that there are special circumstances, that one or more grounds of departure exist pursuant to s117 of the Child Support (Assessment) Act 1989, it being just and equitable, pursuant to s124 of the Child Support (Assessment) Act1989 a lump sum amount of $150,000 is to be paid by the respondent to the applicant for the support of the children X and Y in lieu of the administrative assessment.
Payment of the lump sum child support departure amount pursuant to Order 5 above, is to be charged against the respondent’s interest in the property situate at and known as B Street, Suburb C.
Pursuant to s79 of the Family Law Act 1975 the respondent is to pay to the applicant the sum of $156,579 by way of property adjustment.
In the event that the respondent is unable to pay the lump sum child maintenance amount of $150,000 referred to in Order 5 above or the amount of $156,579 in accordance with Order 7 above within three months from the date of these orders then the respondent and applicant shall do all acts and things necessary to list for sale and sell the property situate at and known as B Street, Suburb C, in the State of New South Wales being the whole of the land contained in Certificate of Title Folio Identifier ….
For the purposes of such sale referred to in Order 8 above, the applicant shall provide a list of three real estate agents together with their marketing options and Agency Agreements to the respondent and within seven days of being provided with such list the respondent shall nominate one of the agents to sell the B Street, Suburb C property.
In the event that the respondent does not nominate one of the agents within seven days then the applicant is to nominate one of the agents and will sign all documents necessary to list the property at B Street, Suburb C for sale with this Order being sufficient evidence as to the applicant’s capacity to sign all documentation necessary to proceed with the sale of the B Street, Suburb C property.
The B Street, Suburb C property shall be listed for sale at an asking price of $890,000 and in the event the property has not sold within a period of six weeks from the date that the property is listed on the market for sale then the asking price shall be reduced to a listing price of $850,000 and shall remain on the market at that asking price until sold or a further period of six weeks. In the event that the property has not sold within a further six weeks then the asking price will be reduced to $800,000.
The proceeds of the settlement of the sale of the B Street, Suburb C property are to be disbursed as follows:
(a)In payment of the agent’s fees and legal fees of the sale;
(b)In payment of the outstanding Council and Water rates;
(c)In payment to the funds charged to the Legal Aid Commission for the Chapter 15 Expert Report in the sum of $3,300 as ordered by the Court on 21 December 2016;
(d)In payment to the applicant in the sum of $3,300 being half the cost of the Valuations for the Real Estate Assets paid by the applicant;
(e)In payment to the applicant in the sum of $150,000 representing the child maintenance order referred to in Order 5 above if such amount remains outstanding after three months of the making of these Orders;
(f)In payment to the applicant in the sum of $156,579 representing the property adjustment order referred to in Order 7 above if such amount remains outstanding after three months of the making of these Orders; and
(g)The balance then to be paid to the respondent.
Except as otherwise provided for herein the applicant is to retain what is otherwise currently in her name, possession and control including her interest in the property situate at and known as D Street, Suburb E, and her interest in the property at F Street, Town G and the applicant’s superannuation entitlements. The applicant shall otherwise be responsible for any liability in her name.
Except as otherwise provided for herein the respondent is otherwise to retain what is currently in his name, possession and control and shall be responsible for any liability in his name.
In the event that either party refuses or neglects to sign any document or thing necessary to give effect to these Orders then a Registrar of the Federal Circuit Court shall sign all or any documents necessary to give effect to these Orders pursuant to section 106A of the Family Law Act 1975.
Remove all outstanding issues from the list of cases awaiting finalisation.
IT IS NOTED that publication of this judgment under the pseudonym Teal & Cornell is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
PAC 962 of 2016
| MS TEAL |
Applicant
And
| MR CORNELL |
Respondent
REASONS FOR JUDGMENT
Introduction
These are proceedings relating to both property and parenting matters, as well as lump sum child maintenance. The parties to the proceedings are the applicant Ms Teal and the respondent Mr Cornell.
There are two children to the relationship, X born … 2005 and Y born … 2008.
The children live with the applicant. The children have not spent any time with the respondent since 21 October 2017.
Competing Applications
The applicant seeks orders in accordance with her Further Amended Initiating Application filed 6 November 2018 being that:
a)She have sole parental responsibility for the children;
b)The children to live with her;
c)The respondent be restrained from attending the schools that the children attend;
d)The respondent pay a lump sum payment of $150,000 in child support for the care of the children;
e)That such lump sum payment be charged against the respondent’s interest in the property situate at and known as B Street, Suburb C;
f)The respondent pay the applicant $350,000 by way of property adjustment;
g)In the event the respondent is unable to make the above payments the property at B Street, Suburb C be sold;
h)The applicant retain the property at D Street, Suburb E and her interest in the property at F Street, Town G;
i)The applicant retain her superannuation entitlements; and
j)That the respondent thereafter retain what is currently in his name, possession and control.
The respondent seeks orders in accordance with his Response filed 5 July 2016 being that:
a)He have sole parental responsibility for the children;
b)That the children live with him “or a minimum 50% mixture of both parents, as per the best judgement of the court”;
c)The children resume schooling in the Region K;
d)That the applicant “stay completely away from B Street, Suburb C, at all times unless by special written invitation of the owner”; and
e)“the respondent receive 65% of the combined marital property???”
The Independent Children’s Lawyer seeks orders that:
a)The applicant have sole parental responsibility for the children;
b)The children live with the applicant; and
c)The children spend no time with the father.
Relevant Factual Findings
The applicant and the respondent first started their romantic relationship in or around … 2003 but did not commence living together until 2005.
At the time of the commencement of the parties’ relationship, the applicant was employed full-time and living with her mother at D Street, Suburb E. The respondent would stay over with the applicant two or three nights each week.
The applicant owned her own motor vehicle, and had accumulated superannuation with Super Fund T and Super Fund U. The Super Fund U policy was taken out by the applicant in 1992, and she had been making voluntary contributions to that policy up until shortly after the commencement of cohabitation.
In 1992, 11 years before the parties started their relationship, the applicant purchased a block of land at L Street, Suburb M, (“L Street, Suburb M property”) for $33,000. The L Street, Suburb M property was unencumbered at the commencement of the parties’ relationship.
In … 1999, almost four years before the parties started their relationship, the applicant together with her brother, purchased a property at N Street, Suburb O (“N Street, Suburb O property”). The purchase price was $99,000 and it was purchased in equal shares as between the applicant and her brother. There was a mortgage of $50,000 associated with the N Street, Suburb O property, which was paid from the rental income which the applicant and her brother received.
In … 2000, the applicant and her brother received a bequest of property from the estate of their late grandfather. The property was located at F Street, Town G (“F Street, Town G property”). It is a property which the applicant remains a co-owner of, and which has continued to be used as a holiday home. The property is presently encumbered in the amount of $158,502.
Prior to meeting the applicant, the respondent had been married. The respondent and his then wife had two children together. Their younger child, Mr A, was born in 1990. Mr A and his older brother stayed with the parties from time to time, and during such periods the applicant looked after them, made their meals and generally as conceded by the respondent made a homemaker and parent contribution of the Robb & Robb[1] kind.
[1] [1994] FamCA 136
At the commencement of the parties’ relationship, the respondent owned a one half share of a property located at H Street, Suburb J. The other half share was owned by his former wife. The property at H Street, Suburb J was ultimately subdivided into three blocks, one of them containing the residential dwelling which had been in existence. The subdivision was registered on … 2006. The respondent’s former wife retained[2] the block with the home and the respondent held onto the other two blocks.
[2] Pursuant to orders made by the Family Court of Australia on 5 March 2008
On … 2005, the respondent purchased in his own name the property at B Street, Suburb C, for $800,000. At the time of purchase, he obtained a mortgage of $1,000,000 which was also secured over the two blocks of land at H Street, Suburb J. The additional funds were borrowed in order to fund the subdivision of the H Street, Suburb J property.
In … 2007, the respondent completed the sale of the first block of land at H Street, Suburb J for $540,000. The entire net proceeds of sale were applied to the B Street, Suburb C property mortgage.
In … 2010, the respondent completed the sale of the second block of land at H Street, Suburb J for $690,000. The net proceeds were applied to the B Street, Suburb C property mortgage. Any surplus funds from the sale were retained by the respondent.
The parties commenced cohabitation in early … 2005 at B Street, Suburb C. The parties were never married and they separated a number of times during their relationship.
The parties’ first child X was born on … 2005.
Following the move by the parties into the B Street, Suburb C property, the respondent worked one or two nights per week as a labourer between … 2007 and … 2008. In 2007, the respondent worked as a customer service officer in Suburb C for a short time and then from 2008 to 2015, he worked one day a week in another employer in Suburb V.
Apart from a short period of time after the parties started living together, the applicant has been a business owner and has been earning an income through the provision of business allowances. The applicant’s income was at all times significantly higher than that of the respondent. Except as noted elsewhere in these reasons with the influx of significant sums of capital from sale of real estate held by the respondent, it was the applicant who by and large was responsible[3] for meeting the mortgage repayments associated with the B Street, Suburb C property.
[3] Whether from her personal earnings or from the sale of assets held in her name as later detailed
During 2006 the applicant says that the respondent would belittle her and say things such as “I respect the dog more than you… at least he guards the house, you don’t do anything, he is higher than you”, “I would rather become gay then live with a woman like your mother”. In March 2010 the applicant confronted the respondent about having an affair to which he stated “with her it is love and with you it is sex… you drive me to suicide”. The respondent also said to the applicant shortly thereafter “you are a waste on the face of the planet”, “you are here for a free ride, you are a barnacle on my back” and “the kids will end up as fucked up as you are fucked up.” The respondent belittled the applicant throughout the relationship in a similar vein.
Throughout the relationship, the respondent referred to the applicant using many derogatory terms, including “bitch, slut, cunt, wog, puttana, arsehole…” The applicant was called those names often in front of the children or in their presence.
The applicant had made a number of reports to the police in respect of the respondent’s actions and behaviours towards her. On one such occasion, the respondent had grabbed her by the hair and was rocking her head backwards and forwards. On another occasion, which the applicant did not report to the police, the respondent grabbed the applicant by the throat and held her against the bathroom door. He tightened his grip and the applicant was not able to breathe properly. After letting go of her throat he repeatedly hit her with a slipper.
The respondent had also openly threatened suicide on a number of occasions in the applicant’s presence. While the parties were in a relationship the respondent was receiving counselling to assist him with some of his issues.
Throughout the parties’ relationship, the respondent smoked marijuana. He stored his drug paraphernalia under the sink of the parties’ home.
While the parties were together, the applicant was careful to keep the children away from the respondent’s computer which contained pornographic images and which the respondent used to access pornographic material.
In … 2008, the applicant and her brother sold the N Street, Suburb O property for $180,000. From her share of the proceeds of sale, the applicant provided $10,000 to the respondent to provide for his sister and the balance was used for family and living expenses.
In 2008, the applicant’s mother passed away, and she and her brother were the beneficiaries under her Will. Probate of the Will was not granted until 2014 however, and it was then that the legal interest in 70% of the property at D Street, Suburb E passed to the applicant (“D Street, Suburb E property”). She continues to live at that address with the parties’ children, her father, her brother and his son. It is the property where during the parties’ relationship she conducted her business.
The parties’ second child Y was born on … 2008.
During 2012 the respondent’s son Mr A lived with the parties for approximately three months.
In 2012, at the respondent’s request, the applicant sold the L Street, Suburb M property for $127,500. From the net proceeds, the applicant purchased a Motor Vehicle P for use by the respondent for $7,000 and then spent a further $3,000 to convert the vehicle to liquefied petroleum gas. A further $18,000 from the sale proceeds was spent on purchasing an excavator for the respondent to use on the B Street, Suburb C property. The balance of proceeds was used towards family expenses.
On or about 27 November 2014 the child Y disclosed to the applicant that her half-brother, Mr A “takes me to the toilet and he pulls my pants down and he puts his finger inside and he licks his finger”. There were a number of disclosures made by Y.
The applicant reported this incident to the respondent within an hour of Y making the disclosure, however, the respondent was able to persuade the applicant not to go to the Police and that he would handle it.
On 1 December 2014 the parties confronted Mr A about the disclosures made by Y. Mr A admitted the sexual assault and made further disclosures about other sexual assaults on children. Again, the applicant did not report the matter to the police until after 20 December 2014 at the persuasion of the respondent. Indeed, the respondent said to the applicant “It is not that serious, Y looks alright. Y bears no malice against Mr A, she doesn’t hate him, it will be all right”. At the time of the disclosure of the sexual assaults Y was 6 years old and Mr A was 24.
Mr A was arrested on … 2014. After entering pleas of guilty, on … 2015, Mr A was sentenced to 13 years imprisonment with a non-parole period of eight years.
The applicant moved out of the B Street, Suburb C property with the children on 20 December 2014. She has since that time been residing at the D Street, Suburb E property with the children. On the day Mr A was arrested, the respondent sent to the applicant a text message which read: “Mr A was never going to do this or anything like it ever again, you know that. This is all about spiteful revenge – you got that but look at the cost…”
On 15 January 2015, the respondent arrived unannounced and uninvited at the D Street, Suburb E property. He proceeded to speak in a loud manner and yell at the applicant. He also said in front of the children that Mr A was self-harming in gaol and that it was the applicant’s fault. As he was leaving the property, the respondent showed the applicant his middle finger in a rude gesture.
During late January and early February 2015, the applicant reached out to the respondent and organised for the children to spend time with the respondent at various public places such as the local swimming pool, and the movies, with the applicant being present during such occasions. The children saw the respondent on a Wednesday and Thursday after school initially. There were then a few occasions when the applicant went with the children to the B Street, Suburb C property and local restaurants. Things did not go well during those times the children spent with the respondent as he proceeded to belittle the applicant in front of the children, and said things such as “you can go get fucked. You are a slut and a whore” in front of the children.
Despite being invited, the respondent failed to attend X’s confirmation in … 2015. The last time the children spent time with the respondent before the applicant commenced these proceedings in March 2016 was in May 2015.
On 21 December 2016 interim orders were made for the respondent to spend supervised time with the children at Suburb W Contact Centre which commenced in July 2017.
On 21 October 2017 the Suburb W Contact Centre stopped supervising the respondent’s time with the children. The applicant later learnt that the respondent had apparently touched the child Y on her left breast. The respondent’s time with the children was terminated by the contact centre on 23 October 2017 with the mother being advised by the centre that “Mr Cornell is a psychological danger to the children”.
The children have not spent any time with the respondent since supervised time was terminated by the contact centre. They did see him and did interact with him during the interviews for Ms Q’s report which was prepared for these proceedings.
Ms Q’s evidence was ultimately to the effect that the children should not spend any face to face time with the father.
The applicant first applied for child support in late July 2015. Except as assessed, in the amount of $16.10 per fortnight, the respondent has not paid any anything towards financially supporting the children post separation.
The children have remained living with the applicant at the D Street, Suburb E property. The children both attend School Z, which is a kindergarten to Year 12 independent school. Both children attend various hobbies / lessons. There are associated costs with these extra-curricular activities. X also receives maths tutoring. The applicant is responsible for meeting the costs of the children’s education, extra-curricular activities and general living expenses.[4] The applicant has been assisted by her brother and father in meeting some of the costs of the children’s education.
[4] Except for the child support she receives
At separation, there was an amount of $58,093 held in a Westpac E-saver account in the parties’ names as trustees for the children. The respondent has used all of these funds post separation, inter alia, without making any contribution towards the cost of raising the children (except as assessed for child support). The respondent continues to reside at the B Street, Suburb C property.
Parenting
Relevant Legal Principles
The central enquiry is for the Court to determine the outcome that will be best for the children the subject of these proceedings.
Parenting proceedings are governed by the provisions of Part VII of the Family Law Act 1975. Section 60CA provides that in deciding whether to make a particular parenting order, the Court is to regard the best interests of the child as the paramount consideration.
Section 60B of the Act outlines the objects and principles underlying Part VII of the Act.
In determining what is in a child’s best interests, the Court must consider the matters set out in section 60CC. Section 60CC outlines the primary and additional considerations that the Court is to take into account in determining what is in the best interests of the child. The Act does not mandate the discussion of considerations under s60CC in any particular order, and it is well recognised that additional considerations may outweigh primary considerations.[5]
[5] see for example Slater & Light [2011] FamCAFC 1at [45]
In applying the primary considerations, the Court is to give greater weight to the need to protect children from harm than to the benefit to them of having a meaningful relationship with both of their parents.
A meaningful relationship “is one which is important, significant and valuable to the child”[6] The focus is not on the relationship as such, but on the benefit the relationship might have for the children.[7]
[6] Mazorski & Albright [2007] FamCA 520 at [26] cited with approval by the Full Court in McCall & Clark [2009] FamCAFC 92 at [121]
[7] McCall & Clark at [122]
In addition, in considering what order to make, the Court must, to the extent that it is possible to do so consistently with the children’s best interest being the paramount consideration, ensure that the order does not expose a person to an unacceptable risk of family violence[8]. The Court may include[9] in the order any safeguards that it considers necessary for the safety of those affected by the order.
[8] s60CG (1)(b); See the brief discussion of s60CG in Salah & Salah [2016] FamCAFC 100 at [35] (although in the context of an interim hearing)
[9] See s60CG(2), such safeguards are for the purposes of sub-paragraph (1)(b)
Section 61DA of the Act provides that when making a parenting order, the Court must apply a presumption that it is in the best interests of the children for the children’s parents to have equal shared parental responsibility. The presumption does not apply where there are reasonable grounds to believe a parent has engaged in abuse of the children or family violence and the presumption may be rebutted if the Court is satisfied that an order for equal shared parental responsibility would not be in the children’s best interests.
In the event that the Court orders the parents to have equal shared parental responsibility, the Court must apply the provisions of section 65DAA which provide for a consideration of the child spending equal time with the parents. If the Court finds that it is not in the child’s best interests or reasonably practicable, then the Court must consider the children spending substantial and significant time with the parents. Section 65DAA is expressed in imperative terms.[10]
[10] MRR v GR [2010] HCA 4 at [15]
The High Court in MRR v GR[11] affirmed the legislative pathway which must be followed in all parenting cases.
[11] [2010] HCA 4
Court’s Determination
The applicant sought orders for the children to spend no time with the respondent. Such orders were supported by the Independent Children’s Lawyer, the expert opinion of Ms Q and the factual findings.
The respondent sought orders for the children to essentially spend equal time with each of their parents, and submitted that he did not pose a risk to the children, lest of all an unacceptable risk of harm.
The primary considerations weigh heavily against the children spending time with the respondent. His behaviour poses an unacceptable risk of harm to them both:
a)The respondent engaged in family violence, that is, the respondent was physically and verbally abusive towards the mother during the relationship and continued to be verbally abusive towards her post separation. The children were exposed to such behaviours;
b)After Y made disclosure of sexual assault by her half-brother, the respondent failed to act protectively towards Y, indeed he put Y at further risk of psychological harm by speaking of Mr A’s struggles to Y;
c)Whilst being supervised at Suburb W Contact Centre, the respondent was observed to be acting towards Y in an inappropriate manner, including cupping her left breast area. Such behaviours were observed while the respondent knew he was being watched and supervised, that is, he knew his behaviour was being scrutinised. His oral evidence was “I am unable to say I didn’t do it” and whilst his motivation may not have been sinister towards Y, it is likely to have been an intentional act perhaps calculated to agitate and disturb the applicant; and
d)The respondent treats the two children differently, and shows favouritism towards Y, such that this is impacting negatively upon X.
The children during the interviews with Ms Q, and despite a prolonged period of little quality time with the respondent post separation, still had a loving and caring approach towards the respondent. Ms Q considered that the children have a close, strong and positive relationship with the respondent. It is a finding of this Court that this is in large part due to the applicant fostering and encouraging the children’s relationship with the respondent, despite all of the difficulties she encountered during the parties’ relationship and post separation.
The children have been primarily cared for by the applicant post separation. Their expressed views must be understood in context and are not determinative. Their interests and welfare must be protected. Their safety is paramount. As at final hearing it had been a significant period of time since the children saw their father in any meaningful fashion.
The Court accepts the submission of the Independent Children’s Lawyer that the applicant has been outstanding in her care of the children post separation, having done so without any financial assistance from the respondent.
The respondent sees the applicant in an entirely negative light. During the hearing he was still of the view that the applicant poisoned his dog and scratched his car. He is of the view that the applicant is having a relationship with a priest who is a paedophile. His views are completely unsupported by any evidence. The respondent holds the applicant responsible for Mr A’s incarceration. His interactions with the applicant are primarily defined by vitriol and venom. There is no suggestion that he would in future behave differently towards the applicant, whether in front of the children, in their presence or at all. He does not discriminate when he puts the applicant down. The respondent certainly did so during the final hearing.
Even if the Court is wrong about the respondent posing an unacceptable risk of harm to the children, time between the children and the father is unsupported by the evidence for the same reasons as outlined above.
Property Adjustment Proceedings
The parties were never married. The lived in a de facto relationship between … 2005 and December 2014.
Relevant Legal Principles
The overall approach to the determination of an application for property adjustment orders pursuant to s.79 Family Law Act1975 (Cth) was set out by the High Court in Stanford v Stanford,[12]where their Honours stated:
[12] [2012] HCA 52; (2012) 247 CLR 108
[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… 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.
…
[40]… 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.
[41] Adherence to these fundamental propositions in exercising the power in s 79 gives due recognition to “the need to preserve and protect the institution of marriage” identified in s 43(1)(a) as a principle to be applied by courts in exercising jurisdiction under 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…
Such approach was subsequently considered by the Full Court of the Family Court in Bevan & Bevan[13], Chapman & Chapman[14] and Scott & Danton[15]. Such an approach is also cleary applicable to proceedings pursuant to the de facto relationships provisions of the Family Law Act, namely Part VIIIAB.[16]
[13] [2014] FamCAFC 19
[14] [2014] FamCAFC 91
[15] [2014] FamCAFC 203
[16] See for example: Peters & Walker [2015] FamCA 732
Once the issue of whether it is just and equitable to make any order is resolved, the Court is to then consider the contributions made by the parties as defined in s.90SM(4)(a) to (c), the matters set out in s.90SM(4)(d) to (g) and in particular the subjective considerations as to the parties by having regard to the provisions of s.90SF(3) in so far as they are relevant.
The Court is then to consider the justice and equity of the actual orders to be made, in the context of the Court’s obligations to make appropriate orders as provided for in s.90SM(1) of the Act.[17]
[17] see generally Russell & Russell (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120, but in the context of s79
The just and equitable requirement is “one permeating the entire process”[18].
[18] Bevan supra at [86]
The Pool and Determination of Contributions
Both parties assert that there should be an adjustment of property. It is the nature and extent of the property and the assessment of contribution and future needs where they disagree.
B Street, Suburb C Property
At the commencement of the relationship, the respondent had an interest in the H Street, Suburb J property, which was later subdivided and sold. He applied the entire sale proceeds of such subdivided land to the B Street, Suburb C property mortgage and retained any balance. At cohabitation, the respondent purchased the B Street, Suburb C property which was subject to finance. The applicant made significant financial contributions towards the mortgage repayments until the respondent sold the blocks of land at H Street, Suburb J. This was done through her income and the sale of real property she held prior to the commencement of the relationship. While the parties were together, they were responsible together for the upkeep and maintenance of the property.
Post separation, the respondent has remained living in the B Street, Suburb C property. Consequently, he has remained responsible for its upkeep and maintenance, as well as meeting the costs associated with keeping the property. The property is in poor condition and has not been well looked after.
Applicant’s Superannuation
The applicant has made minimal contributions towards her superannuation funds after the parties commenced living together. She has made no payments since 2007.
D Street, Suburb E property
The applicant has a 70% interest in the D Street, Suburb E property. The estimated value at the time the property was transferred to her (as a beneficiary under her late mother’s will) in 2014, it was valued at $840,000. It is a property where the applicant has lived with the children since separation, and it is a property which after it came to be part-owned by the applicant was maintained and kept by her brother and father. During the relationship, the applicant used these premises to conduct her business, and continues to do so.
The D Street, Suburb E property was the applicant’s former home. It was a property that came to her by way of an inheritance five months prior to separation.
The respondent has not made any direct contributions, financial or otherwise towards this asset. There was a small contribution by the respondent indirectly, as homemaker and parent contribution.
F Street, Town G Property
The respondent has not made any direct contributions, financial or otherwise towards the F Street, Town G property. There was a small contribution by the respondent indirectly, as homemaker and parent contribution.
Residual Assets
The applicant accepts the respondent’s assessment of the value of his vinyl record collection, and motorcycles as having the values set out in the respondent’s Financial Statement filed in these proceedings. Being admissions against interest, the Court accepts these values for the purposes of determining the net pool of assets.
There are a number of residual assets in respect of which there is limited evidence. They have not been valued. They include the parties’ motor vehicles, household contents, equipment at the B Street, Suburb C property, including the excavator, and various bank accounts. These assets will not be included in the pool for the purposes of adjusting the parties’ interests therein. The bank accounts have individual balances of less than $115 and in total have a value of less than $150. It is appropriate that these assets remain with the party who is presently has possession and/or control of the assets. At best their overall total value is not significant when compared to the balance of the assets and the pool overall. There will be no adjustment in respect of these items.
Add-backs
Following separation, the respondent utilised $58,000 of the parties’ joint funds for his own purposes. The applicant sought that there be an add-back in respect of this sum. In the circumstances of this case, it is appropriate that the respondent’s actions in unilaterally disposing of this significant cash asset be assessed in the overall contributions by the parties, rather than as an add-back.
The Pool
For reasons explained above, it is appropriate that the following assets comprise the pool for distribution pursuant to any property adjustment orders the Court makes herein.
Ownership
Item
Value
Applicant
CBA Term Deposit
$12,635
Applicant
Shares S
$864
Applicant
Super Fund T
$12,835
Applicant
F Street, Town G property
$147,500
Applicant
F Street, Town G loan
($8,290)
Applicant
Motor Vehicle AA
$16,000
Applicant
Flexible Lifetime Superannuation
$91,161
Applicant
D Street, Suburb E property
$980,000
Applicant
Westpac MasterCard
($5,190)
Respondent
B Street, Suburb C property
$850,000
Respondent
Motorcycle R
$50,000
Respondent
Motorcycle BB
$5,000
Respondent
Vinyl record collection
$10,000
Respondent
Westpac Visa
($2,370)
TOTAL
$2,160,145
Determination of Adjustment
The contributions as found above, weigh heavily in the applicant’s favour. The Court assesses the overall contributions as 70% to the applicant and 30% to the respondent.
The respondent’s health, he says, is an issue for him. However, he has not put before the Court any admissible or up to date evidence in respect of his current medical conditions.
He has held no full-time employment since cohabitation commenced. He is, at the time of final hearing, involved in a business venture. It is at best, a small time operation which does not yield any meaningful income. The B Street, Suburb C property, which the respondent will retain, has in the past, been an income producing asset.
The applicant continues to earn an income through her business. It is a relatively stable income she has been able to maintain over a number of years. She appears to be well established and respected. It is highly probable that she will continue in this business and earning an income in this manner.
The applicant will after the making of these orders, have the full-time care of the parties’ two children. They will not be spending any time with the respondent.
Given the Court’s assessment of the s90SF(3) matters, it is appropriate that there is a small adjustment in the respondent’s favour of 5%.
As such, overall, the parties’ property interests will be adjusted as to 65% to the wife and 35% to the husband. In terms of the pool, this means the applicant will receive $1,404,094 and the respondent will receive $756,051.
The applicant is to retain the following assets:
Ownership
Item
Value
Applicant
CBA Term Deposit
$12,635
Applicant
Shares S
$864
Applicant
Super Fund T
$12,835
Applicant
F Street, Town G property
$147,500
Applicant
F Street, Town G loan
($8,290)
Applicant
Motor Vehicle AA
$16,000
Applicant
Flexible Lifetime Superannuation
$91,161
Applicant
D Street, Suburb E property
$980,000
Applicant
Westpac MasterCard
($5,190)
Applicant
Payment from Respondent
$156,579
TOTAL:
$1,404,094
The respondent is to retain the following assets:
Respondent
B Street, Suburb C property
$850,000
Respondent
Motorcycle R
$50,000
Respondent
Motorcycle BB
$5,000
Respondent
Vinyl record collection
$10,000
Respondent
Westpac Visa
($2,370)
Respondent
Payment to Applicant
($156,579)
TOTAL:
$756,051
The division of assets in the manner provided above, see the applicant retain the more significant portion of the parties’ assets, albeit a large portion of those assets were brought about from bequests in wills, some late in the parties’ relationship. The division of assets in the manner provided sees the respondent with a significant asset, or alternatively if that asset is sold, a significant lump sum.
In all of the circumstances, the orders are just and equitable.
Lump Sum Child Maintenance
The Applicant, by way of her Further Amended Initiating Application filed on 20 September 2018, seeks an order for lump sum child maintenance pursuant to s124 of the Child Support (Assessment) Act1989 (Cth) (“CSA”).
There are two essential pre-requisites to the Court hearing an application for lump sum child maintenance under Pt 7 Div 5 of the CSA. They are:
a)That there is an administrative assessment in force; and
b)That any application for a departure from the administrative assessment has been heard and determined.
However, a Court may entertain both a lump sum application and a departure application that are filed within the one document if it chooses to exercise its discretion to do so under s116 CSA.[19] Leave under s116 CSA is discretionary. The Court is satisfied that the applicant has established special circumstances within the meaning of s116 CSA.
[19] McGuiness v Cowie (2002) FLC 98-918 at [65]
In Gyselman and Gyselman[20] (“Gyselman”) the Full Court (Nicholson CJ, Fogarty & Nygh JJ) set out the approach a Court must take in determining whether to make a child support departure order. This is the “three step process” to be followed to determine a departure application.[21] Section 117(1)(b) identifies a clear three-step process:
1. Whether one or more grounds of departure in s 117(2) is established.
If so:
2. Whether it is “just and equitable” within the meaning of s 117(4) to make a particular order.
3. Whether it is “otherwise proper” within the meaning of s 117(5) to make a particular order.
[20] (1992) FLC 92-279
[21] Page 79,064
The first step is for the Court to decide whether to make a departure order in the special circumstances of the case where one or more of the grounds for a departure order outlined in section 117(2) CSA is established. It was submitted on behalf of the applicant that “special circumstances exist relating to the administrative assessment of child support because of the property and financial resources of the father”. The Court is satisfied that special circumstances have been established as the administrative assessment has resulted in an unjust and inequitable determination of the level of financial support to be provided by the father ($16 per fortnight) because of the property and financial resources of the respondent.
Consequent upon the making of the property adjustment orders herein, the respondent will remain holding significant property which has in the past yielded a rental income and which is of significant value.
The children will not be spending time with the respondent after the making of final orders herein. The mother will also receive significant assets as a result of the property adjustment orders herein. She continues to work and earn an income. She continues to financially support the children. The children have yet to finish their formal schooling, and they are 14 and 11 years old respectively.
For these reasons, it is otherwise just and equitable within the meaning of s117(4) and proper within the meaning of s117(5) to make the orders sought by the applicant for lump sum child support in the amount of $150,000.
Costs
The Court is not satisfied that there are circumstances justifying the making of a costs order, and as such costs are to be borne by the parties in accordance with s177 of the Act.
I certify that the preceding one hundred and three (103) paragraphs are a true copy of the reasons for judgment of Judge Obradovic
Date: 3 September 2019
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