TULLOS & BARROW
[2019] FCCA 1415
•19 June 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| TULLOS & BARROW | [2019] FCCA 1415 |
| Catchwords: FAMILY LAW – Property settlement – Balance Sheet agreed – parties agree that it is just and equitable to make a property settlement order – argument relates to contributions and section 75(2) factors – Both parties made lump sum contributions although Husband’s were greater – Husband in receipt of ongoing workers compensation benefits – Wife has re-partnered, not presently working and is primary carer of children – each party made substantial contributions during relationship but Husband’s contributions were greater – post-separation contributions favour the Wife – future factors favour the Wife – just and equitable outcome. |
| Legislation: Family Law Act 1975 (Cth), ss.60CA, 60CC, 60CC(3)(1), 61DA, 75(2), 79(4)(d), 79(4)(f), 79(4)(g), 79(2), 79(4) |
| Cases cited: Stanford & Stanford (2012) FLC 93-518 Norbis & Norbis (19860 FLC 91-712 Gosper & Gosper (1987) FLC 91-818 Kessey & Kessey (1994) FLC 92-495 Hickey v Hickey & Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 |
| Applicant: | MR TULLOS |
| Respondent: | MS BARROW |
| File Number: | NCC 2939 of 2015 |
| Judgment of: | Judge Betts |
| Hearing dates: | 26, 27, 28 & 29 November 2018 |
| Date of Last Submission: | 29 November 2018 |
| Delivered at: | Newcastle |
| Delivered on: | 19 June 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mrs Kearney |
| Solicitors for the Applicant: | Peninsula Law |
| Counsel for the Respondent: | Mr Dura |
| Solicitors for the Respondent: | Delaney Lawyers |
PARENTING ORDERS:
That all prior parenting Orders in relation to the children of the parties (collectively, “the children”):-
(a)[X] born … 2006 (“[X]”); and,
(b)[Y] born … 2008 (“[Y]”)
be and are hereby discharged.
That the mother Ms Barrow (“the mother”) have sole parental responsibility in respect of the following aspects of the long term care of the children:-
(a)the children’s medical care and treatment; and
(b)the children’s schooling and education.
That the parties otherwise have equal shared parental responsibility in respect of all aspects of the long term care of the children except those identified in Order 2 above.
It is noted that Order 2 does not prevent the father from taking the children, or either of them, to see their treating general physician in the event of an emergency or medical complaint including but not limited to an ear infection and/or chest infection.
That for the purposes of Order 2 above, the mother shall:-
(a)Provide the father Mr Tullos (“the father”) with written notice of her intention to exercise such parental responsibility not later than twenty-eight (28) days prior to such decision being made, or as much notice as is practicable, and provide the father with:-
(i) the nature of the decision she intends to make;
(ii) the date upon which the intended decision is to take effect;
(iii)the names and details of any professional that she has consulted in relation to the intended decision; and
(iv) an authority authorising the relevant professional to consult with and/or provide the father with any information relating to the mother’s intended decision;
(b)consider any opinion that may be expressed by the father in relation to the intended decision prior to implementing such intended decision;
(c)not enrol the children, or either of them, in any school that is located further than a 50km radius from the Suburb A GPO;
(d)not enrol the children, or either of them, in any school that imposes on the father a liability to pay school fees over and above that which is required in the public school system unless the mother is prepared to be solely responsible for the payment of the children’s school fees and indemnifies the father with respect to such school fees;
(e)notify the father in writing of any medical, therapeutic and/or educational appointment/s for the children, or either of them, within 24 hours of being notified of such appointment.
That each of the parties do all acts and things and sign all documents necessary as may be required by the Australian Passport Office, or any government body, to apply for the issue of a passport for the children, [X] born … 2006 and [Y] born … 2008. In doing so the mother shall provide the father with a duly completed Passport Application for execution by the father and the father shall sign the Passport Application in the correct manner and return to the mother within 7 days of receipt of the Passport Application. In the event that he fails, refuses or neglects to do so the mother is at liberty to apply for the issue of a passport for the children, [X] born … 2006 and [Y] born … 2008, without the consent of the father, Mr Tullos born … 1974 provided that the party initiating the Passport Application is solely responsible for all costs associated with the application.
The parties do all such acts and things as may be required to keep the other informed of the following long term aspects of the care of the children:-
(a)The current residential address of the children;
(b)The current school of the children;
(c)The current extra-curricular activities of the children;
(d)The current treating medical practitioners and therapeutic clinicians in respect of the children; and,
(e)Details of any medical treatment being received by the children, including any prescriptions for medication.
That each of the parties are at liberty to approach and receive information from the children’s school, treating medical practitioners and/or therapeutic clinicians
That each of the parties are restrained from enrolling the children, or either of them, in any extra-curricular activity (other than that which they are presently participating in) that occurs in the other party’s time without first obtaining the written consent of the other party.
The Court notes that, for the purposes of these Orders, and unless otherwise agreed between the parties in writing, the term “school holidays” shall include:-
(a)A reference to “the date being the conclusion of the school term” as meaning the last day upon which the children, or either of them, are required to attend school, with the intention that school holiday periods, are to include student-free days; and
(b)A reference to “the commencement of the school term” as meaning the commencement of the first day upon which the children, or either of them, actually attend school.
That the children live with the mother at all times other than when they are spending time with the father in accordance with these Orders.
That the children spend time with the father as follows:-
(a)Each alternate weekend from the conclusion of school on Friday until the commencement of school on Tuesday, commencing on Friday, 30 November 2018; and
(b)Each alternate Monday from the conclusion of school to the commencement of school the following Tuesday, commencing on Monday, 10 December 2018.
Noting that it is the parties’ intention that the pattern of term-time in this Order shall “roll-through” school holiday periods despite the exercise of actual time being suspended during school holidays.
That, notwithstanding Orders 11 and 12 above, the children spend time with the father during school holiday periods as agreed in writing, or failing agreement:-
(a)In the 2018/2019 Christmas school holiday period, from the conclusion of presentation night (11 December 2018) to 5.00 p.m. on 7 January 2019;
(b)In 2019, and each alternate year thereafter, during school holiday periods as follows:-
(i)During the Term 1 school holiday period from 5.00 p.m. on the second Saturday after the conclusion of Term 1 until the commencement of Term 2;
(ii)During the Term 2 school holiday period from 5.00 p.m. on the second Saturday after the conclusion of Term 2 until the commencement of Term 3;
(iii)During the Term 3 school holiday period from 5.00 p.m. on the second Saturday after the conclusion of Term 3 until the commencement of Term 4;
(iv)During the December /January holidays from the conclusion of Term 4 until 5.00 p.m. on 7 January;
(c)From 2020, and each alternate year thereafter, during school holiday periods as follows:-
(i)During the Term 1 school holiday period from the conclusion of Term 1 until 5.00 p.m. on the second Saturday thereafter;
(ii)During the Term 2 school holiday period from the conclusion of Term 2 until 5.00 p.m. on the second Saturday thereafter;
(iii) During the Term 3 school holiday period from the conclusion of Term 3 until 5.00 p.m. on the second Saturday thereafter;
(iv) During the December /January holidays from 5.00 p.m. on 7 January until the commencement of Term 1.
That, notwithstanding any other Order, the children spend time with the parties on the following special days as agreed in writing, or failing agreement:-
(a)Children’s birthdays:
(i)In the event either or both of the children’s birthdays falls on a day during which they would otherwise be in the care of the mother, each of the children spend time with the father on that day from 3:00 p.m. to 7:30 p.m.
(ii)In the event either or both of the children’s birthdays falls on a day during which they would otherwise be in the care of the father, each of the children spend time with the mother on that day from 3:00 p.m. to 7:30 p.m.
(b)Father’s Day:
(i)In the event Father’s Day falls on a day during which the children would otherwise be in the care of the mother, the children spend time with the father from 10:00 a.m. to 5:00 p.m.
(c)Mother’s Day:
(i)In the event Mother’s Day falls on a day during which the children would otherwise be in the care of the father, the children spend time with the father from 10:00 a.m. to 5:00 p.m.
(d)Christmas Period:
(i)In 2018 the children spend time with the mother from 2:00pm Christmas Day to 2:00pm Boxing Day.
(ii)Commencing in 2019 and each alternate year thereafter, the children are to spend time with the mother from 2:00 p.m. Christmas Day until 2:00 p.m. Boxing Day;
(iii)Commencing in 2020 and each alternate year thereafter, the children are to spend time with the father from 2:00 p.m. Christmas Day until 2:00 p.m. Boxing Day.
(e)Easter Period:
(i) Commencing in 2019 and each alternate year thereafter:-
(1)in the event the children are not otherwise with the father, the children shall spend time with the father from the cessation of school on Thursday prior to Good Friday until 12 noon on Easter Sunday; and
(2)in the event the children are not otherwise with the mother, the children shall spend time with the mother from 12 noon on Easter Sunday until 5.00 p.m. Easter Monday;
(ii) Commencing in 2020 and each alternate year thereafter:-
(1)in the event the children are not otherwise with the mother, the children shall spend time with the mother from the cessation of school on Thursday prior to Good Friday until 12 noon on Easter Sunday; and
(2)in the event the children are not otherwise with the father, the children shall spend time with the father from 12 noon on Easter Sunday until 5pm on Easter Monday.
(f)Parents’ birthdays
Commencing in 2019 and each year thereafter:-
(i)in the event that the father’s birthday falls on a day when the children would not otherwise be in his care, then the children shall spend time with the father from 3.00 p.m. to 7.30pm provided that such time is suspended if his birthday falls in a school holiday period, in which case, the time the children were to spend with the father shall be made up as agreed in writing and failing agreement, commencing from the conclusion of the time the children would otherwise spend time with him so that the mother would not collect the children until 7.30pm; and
(ii)in the event that the mother’s birthday falls on a day when the children would not otherwise be in her care, then the children shall spend time with the mother from 3.00 p.m. to 7.30pm provided that such time is suspended if her birthday falls in a school holiday period in which case the time the children were to spend with the mother shall be made up as agreed in writing and failing agreement commencing from the conclusion of time the children would otherwise live with her so that the father would not collect the children until 7:30pm.
That, for the purposes of these Orders, should a special day fall within school holidays and the children are on pre-arranged travel with a party (“the travelling party”) and are not able to spend time with the other party on a special day, then such time is suspended provided that the travelling party gives the other party not less than 28 days prior written notice and the time the Children were to spend with the other party shall be made up as agreed in writing and failing agreement commencing at the designated time the following day after the Children return from travel.
That, for the purposes of these Orders, changeover is to occur as agreed between the parents in writing, or, failing agreement, at the Suburb A McDonalds in the event that changeover does not take place at school.
That in the event a public holiday falls on a school day when the children are to be with the father, the changeover time shall occur as follows:-
(a)If the changeover time was to occur at the conclusion of the school day on a Friday, then changeover shall occur at 3:00 p.m. on the preceding day; and
(b)If the changeover was to occur at the conclusion of the school day on a Monday, then the Father’s time shall occur from the conclusion of school on the following Tuesday to the commencement of school on the following Wednesday in lieu of the time provided for in Order 11.2 above.
The parties be and are hereby restrained from:-
(a)Discussing any Court proceedings between the parents with the children, or allowing any third party to discuss such proceedings with the children;
(b)Denigrating the other parent to the children or within their hearing, or allowing a third party to denigrate the other parent to the children, or allowing the children to remain in a place where the other parent is being denigrated.
That both parties be permitted to remove the children from Australia during periods when the children are in their respective care, provided such periods are not greater than six (6) weeks, on condition that they provide to the non-travelling parent, at least two (2) calendar months prior to the proposed date of departure, the following information:
(a)Dates of proposed departure and return;
(b)Copy of itinerary provided by travel agent or airline if any;
(c)Copy of return airline ticket/s if any;
(d)Address/es at which the children will be residing whilst outside the Commonwealth of Australia;
(e)Telephone numbers upon which the children can be contacted whilst holidaying outside the Commonwealth of Australia.
That the mother will otherwise have responsibility for the care and custody of the children’s passports. The mother will provide the children’s passports to the father within seven (7) days of a written request by the father and after the provision of the information set out in Order 19 above. The father will return the Children’s passports to the mother within seven (7) days of return from travel.
That both parties shall consult with a family dispute resolution practitioner or such other consultant as may be agreed in writing between the parties to assist with:-
(a)resolving any dispute between the parties about the terms or operation of these Orders; and
(b)reaching agreement about changes to be made to these Orders arising out of any change in the needs or circumstances of the children or the parties in the event that any dispute or disagreement arising concerning such change.
Pursuant to section 13C of the Family Law Act 1975 (Cth) the parties are to attend at least three sessions of family counselling to discuss how to improve their parental communication and to facilitate this Order:-
(a)the parties shall engage with Interrelate as the family counsellor;
(b)the mother shall forthwith provide the father with not less than 3 available dates that she is available to attend the first such counselling session;
(c)the father is to contact the family counsellor for the purposes of arranging an initial session on a date suitable to the mother;
(d)the father is to notify the mother of the initial session date within 24 hours of confirming such date; and
(e)the parties shall use their best endeavours to do all acts and things and take all necessary steps to comply with all reasonable directions made by the family counsellor.
NOTING THAT:
A.Save for orders 2(b), 5(c), 13(b)(iv), 13(c)(iv), 14(d)(ii) and 14(d)(iii), all of the parenting orders are otherwise made by the consent of both parties.
PROPERTY SETTLEMENT ORDERS:
The parties do all acts and things and sign all documents necessary so as to effect a sale of the real property situate at and known as Street B, Suburb C in the State of New South Wales and being more particularly described as the whole of the land contained in Certificate of Title Folio Identifier … (‘the home’) for the best price reasonably obtainable in the following manner:-
(a)List the home for sale by with a real estate agent (‘the agent’) whose costs of and incidental to such appointment to be borne equally by the parties as and when same fall due and to facilitate the appointment of the agent:-
(i)the Husband, within seven (7) days of the date of these Orders, will provide to the Wife, the names of three proposed real estate agents together with their agency agreements; and
(ii)within seven (7) days of receipt of the Husband’s proposed panel, the Wife will nominate one of the agents identified therein and the parties shall thereafter forthwith sign all documents necessary to appoint the agent selected by the Wife;
(iii)if the Husband fails to comply with order 1.1.1 the Wife may within fourteen (14) days of the date of these Orders nominate an agent in writing to the Husband with no requirement that she submit a panel;
(iv)if the Wife fails to comply with order 1.1.2, the Husband may within fourteen (14) days of the date of these Orders nominate an agent in writing from his panel;
(v)within twenty-one (21) days of the date of these Orders, the parties shall do all acts and things and sign all documents necessary to appoint the agent in accordance with this order.
(b)Unless otherwise agreed in writing by the parties, the method of sale of the home shall be as nominated by the agent and for that purpose, the list or reserve price will be $1,550,000 or as otherwise recommended by the agent.
(c)The parties shall each co-operate in every way with the agent including (without limiting the generality of the foregoing):-
(i) Making the key to the home available to the agent;
(ii)Allowing inspection of the home at all reasonably times requested by the agent;
(iii)Doing or saying nothing to hinder or prevent a sale being affected;
(iv)Ensuring that the home, including the grounds, are in a neat and tidy condition at the time of inspection by the agent and prospective purchasers; and
(v)Signing all documents requested by the agent in relation to the listing for sale of the home except a contract or agreement for sale which has not been authorised by the parties’ solicitors;
(vi)Ensuring that a cleaning company is engaged to complete a pre-sale clean of the home with the parties to equally pay the costs of the cleaning company.
(d)The parties shall each execute a contract of sale in the form prepared by the solicitors having the conduct of the sale of the home at a price agreed upon by the parties or, in the absence of any agreement, at or above the price nominated pursuant to Order 23(b) above.
(e)Conveyancing Company, Suburb A will have the primary conduct of the sale of the home on behalf of both parties and for that purpose, within fourteen (14) days of the date of these Orders each party must do all acts and things and sign all documents necessary to give effect to this order.
(f)Neither party may confer on any agent, without the consent of the other party, any right to any sole or exclusive agency in respect of the home or to any commissions.
(g)If the agent shall certify in writing to the parties, that it is reasonably necessary for the work specified in a notice of repairs to be carried out to the home so as to assist in effecting a sale, and provided the cost of any such work is less than $500, either party may cause such work to be carried out and the costs shall be recoverable by that party from the proceeds of sale.
On settlement of the sale of the home, the proceeds of sale will be paid in the following manner and priority:-
(a)All costs and expenses of sale including legal costs and disbursements, agents’ commission and auction expenses (including repayment of any such expenses as have been paid by either or both of the parties);
(b)The amounts required to discharge the mortgage in favour of the AMP Bank Limited and having registered number … (‘the mortgage’);
(c)The amounts required to pay all municipal and water rates outstanding with respect to the home;
(d)The amount required to repay the party carrying out work for the home, for the cost of such work carried out in accordance with Order 23(g) above.
(e)The sum of $13,780 to the Region D School representing a payment by each of the parties of $6,980 for the school fees for the child [Y] (‘[Y]’) born … 2008 for the years 2019 and 2020 PROVIDED THAT should [Y] no longer attend Region D School then any applicable refund of the money paid in accordance with this Order shall be reimbursed equally between the parties in the form and manner as directed by each of them to REGION D SCHOOL and to give effect to this process, this Order shall be taken as an irrevocable authority addressed to REGION D SCHOOL and each party will be at liberty to provide a copy of these Orders to REGION D SCHOOL; and
(f)The balance then remaining shall be divided between the parties in accordance with the following formula:
(i) “Net matrimonial property” is defined as being the sum of:
(1)$93,300 (being the net assets held by the husband);
+
(2)$143,872 (being the assets held by the Wife);
+
(3)the “balance then remaining” as referred to in order 24(f).
(ii)The Wife is to be paid a dollar figure so that she retains 56% of the “net matrimonial property”;
(iii)The Husband is to be paid a dollar figure so that he retains 44% of the “net matrimonial property”.
In the event the agent recommends the home be sold by way of private treaty and it is not sold by private treaty within three (3) months of the list date then:-
(a)The parties shall list the home for sale by public auction with the agent appointed at Order 23(a) above.
(b)The reserve price for the purpose of such auction will be such as the parties agree upon within fourteen (14) days after the date upon which the home is first listed for sale in accordance with Order 23 above, or in the absence of agreement, at a price determined by the agent appointed at Order 23(a) above (‘the reserve price’).
(c)In the event that the bidding at auction does not reach the reserve price, the parties may negotiate with the highest bidders or any other interested person and effect a sale of the home at a price which is not more than 10 per cent below the reserve price.
(d)If the home remains unsold, the parties will do all acts and things and sign all documents necessary to immediately re-list the home for sale by public auction again, on a date nominated by the agent and at such action there shall be no reserve price unless otherwise agreed by the parties.
In the event the agent recommends the home be sold by way of public auction then:-
(a)The reserve price for the purpose of such auction will be such as the parties agree, or in the absence of agreement, at a price determined by the agent appointed at Order 23(a) above (‘the reserve price’).
(b)In the event that the bidding at auction does not reach the reserve price, the parties may negotiate with the highest bidders or any other interested person and effect a sale of the home at a price which is not more than 10 per cent below the reserve price.
(c)If the home remains unsold, the parties will do all acts and things and sign all documents necessary to immediately re-list the home for sale by public auction again, on a date nominated by the agent and at such action there shall be no reserve price unless otherwise agreed by the parties.
Within fourteen (14) days of the date of the sale of the home, the Husband will do all acts and things, give all directions and execute all documents necessary to give proper notice to all relevant rating authorities, insurance companies and public utilities of such sale.
The Husband shall give vacant possession of the home prior to or upon completion of the sale of the home as provided for in the above orders.
Unless otherwise specified in these Orders, each party otherwise retain and be declared sole legal beneficial owner to the exclusion of the other of all real and personal property of whatsoever nature and kind in their respective ownership, possession and control as at the date of these Orders and for that purpose:
(a)Bank accounts are deemed to be in the possession of the person whose name appears on the bank record thereof;
(b)Insurance policies are deemed to be in the possession of the beneficiary thereof;
(c)Items of personalty, jewellery and clothing shall be deemed to be the property of the person who is in possession of same as at the date of these Orders;
(d)Superannuation entitlements are deemed to be in the possession of the person who is named as the worker whose age or working future provides the conditions for payment out of such entitlement; and
(e)The chattels contained in the home are to be considered the property of the Husband to the exclusion of the Wife.
There be no superannuation splitting or flagging Order, with the intention that each party will retain for their sole use and benefit, to the exclusion of the other, all of their right, title and interest in any superannuation interest held on their behalf.
Each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these Orders.
The Husband hereby indemnifies the Wife from and in respect of all actions, claims, suits and demands as may be made against the Wife in relation to all liabilities in the name of the Husband or Tullos Pty Limited, including but not limited to taxation liability.
The Wife hereby indemnifies the Husband from and in respect of all actions, claims, suits and demands as may be made against the Wife in relation to all liabilities in the name of the Wife.
The parties shall produce and execute all documents and instruments and do all other acts and things as may be reasonably necessary to give effect to these Orders.
If either party refuses or neglects to sign (within fourteen (14) days of a written request to do so), any documents necessary to give effect to the terms of these Orders, a Registrar of the Court is hereby appointed, pursuant to section 106A of the Family Law Act 1975 (Cth) to execute such documents on behalf of such party.
That in the event that the parties, or either of them, make a payment to REGION D SCHOOL towards [Y]’s school fees as provided for in Order 24(e) above prior to the sale of the home, then upon the sale of the home, that party shall be reimbursed for the sum paid by them prior to the parties’ receiving their respective entitlements in accordance with Order 24(f) and the amount payable to REGION D SCHOOL in accordance with Order 24(e) shall be reduced accordingly.
NOTING THAT:
B.Save for Orders 23(a)(i) – (v) (inclusive) and order 24(f), all of the property settlement orders are otherwise made with the consent of both parties.
THE COURT OTHERWISE ORDERS THAT:
Save in relation to costs, all other extant applications are dismissed.
The matter is adjourned to 2.15pm on 4 July 2019 for the hearing of any costs application brought by any party.
If the parties do not intend to pursue a costs application, then they are to jointly notify chambers prior to 4 July 2019, the matter will then be removed from the list.
IT IS NOTED that publication of this judgment under the pseudonym Tullos & Barrow is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT NEWCASTLE |
NCC 2939 of 2015
| MR TULLOS |
Applicant
And
| MS BARROW |
Respondent
REASONS FOR JUDGMENT
Background:
These are parenting, property settlement and child support departure proceedings. They arise out of the breakdown of the marriage between the Applicant Husband Mr Tullos (“the Husband”) and the Respondent Wife Ms Barrow (“the Wife”).
The Husband and the Wife commenced a relationship in 1997, married on … 2004 and finally separated on 9 August 2015 after approximately eighteen (18) years together.
The parenting proceedings, and the child support departure proceedings, relate to the two (2) children of the marriage:
(a)[X] born … 2006 who is presently aged 13 (“[X]”);
and
(b)[Y] born … 2008 who is presently aged 11 (“[Y]”).
At the date of trial in November 2018, both [X] and [Y] were attending the Region D School. [X] was in Year 6 and [Y] was in Year 4. At the time of delivering these reasons, [X] will have since commenced her secondary education at Suburb E High School where she will be in Year 7. [Y] will be in Year 5 at Region D School.
[Y] has had some serious behavioural difficulties now for some years. He has been diagnosed with Oppositional Defiance Disorder and Attention Deficit Disorder, for which he takes prescribed medication. He additionally undertakes behavioural therapy with a psychologist, but nonetheless he still experiences emotional dysregulation at times. The reality is that his parents’ somewhat bitter separation has been hard on [Y].
Since separation the Wife has firmly re-partnered with Mr F and they now have a child together, [G], born … 2016 (“[G]”).
The Husband has remained single, continuing to live in the parties’ former matrimonial home at Suburb C.
The issues at trial:
At trial, the parties were able to substantially narrow the issues in dispute.
In relation to parenting, the parties were able to reach almost complete agreement. They tendered a draft consent parenting order[1] which relevantly provided that the children are to continue living with the Wife and are to spend five (5) nights per fortnight with the Husband during school terms. In one week, he spends time with the children from after school Friday until commencement of school on the following Tuesday, and in the other week he spends time with the children from after school Monday to commencement of school Tuesday. The parties are to spend time with the children on special days. They agree that the school holidays are to be shared equally. There is provision for each party to travel overseas with the children.
[1] Exhibit “HW1”
The parents agree that they should have equal shared parental responsibility in relation to the children’s religious and cultural upbringing, their names and any changes to their living arrangements that would make it significantly more difficult for the children to spend time with a parent.
The parties were in dispute in relation to parental responsibility for the children’s health – particularly noting [Y]’s issues. In the result the Husband conceded that the co-parenting relationship was such that the Wife should have sole parental responsibility for health issues, subject to her notifying him in relation to decisions.
The only parenting issues left for judicial determination are:
(a)the allocation of parental responsibility for the children’s education. The Husband is content for the Wife to have sole parental responsibility for that aspect provided that the Wife enrols the children in schools that are within the Region D Local Government area. Absent such geographical restraint, he seeks an order for equal shared parental responsibility for education. The Wife proposes that she have sole parental responsibility for education but is agreeable to a geographical radius being imposed – she submits that it be within fifty (50) kilometres of the Suburb A GPO;
(b)which parent should have which half of term 4 school holidays in each year. The backdrop to this debate is that the term 1, 2 and 3 holidays are agreed to be split so that one parent has the first half in odd years and the second half in even years, on an alternating years basis. During the end of term 4 holidays, the Wife wants to continue the same split as applied to the end of terms 1, 2 and 3 holidays. The Husband wants to reverse it, i.e. the Husband proposes that the parent who has the first half of the term 1, 2 and 3 holidays will have the second half of the term 4 holidays and vice versa.
Notwithstanding the substantial agreement the parties had reached, it was quite obvious to me at trial that there remains a simmering distrust between them, and some ongoing resentment. Having come so far in terms of their parenting agreement, they were nonetheless unable or unwilling to completely extinguish the dispute. It was as though they still needed to “have their day in court” even if it was only on these narrow issues.
In relation to property settlement, the parties agreed to the sale of the Suburb C property. The primary debate between them was as to division of the net sale proceeds – each party submitting that they should retain over 60% of the net proceeds of sale.
Lesser issues, nonetheless litigated with some intensity, related to such mundane (if not trivial) matters such as which party should appoint the selling agent. Again my strong impression was that the parties needed to “have their day in court”.
In relation to the child support departure proceedings, the parties fortunately were to reach complete agreement. They agreed that the property settlement order would incorporate a specific clause whereby a sum of $13,780.00 would be paid to the Region D School out of the net sale proceeds of the Suburb C property, such funds to be applied to [Y]’ 2019 and 2020 school fees. This was on the basis that if [Y] left that school, then any refund would be shared equally between the parties.[2]
[2] This agreement is embodied in clause 3.5 of the draft property consent order, exhibit “HW2”
Documents and evidence relied upon at trial:
Both parties were legally represented. Helpfully, each engaged counsel.
The Husband relied upon two (2) separate Outline of Case Documents, one relating to parenting and the other to financial matters. The Husband also relied upon his trial Affidavit filed 9 November 2018 and his Financial Statement filed 13 November 2018.
The Wife relied upon a Case Outline Document filed 26 November 2018. The Wife also relied upon her Response filed 23 November 2015, Notice of Risk filed 23 November 2015, Amended Response filed 9 March 2016, trial Affidavit filed 7 November 2018, Financial Statement filed 9 November 2018 and the Affidavit of Mr F filed 9 November 2018.
In the course of the trial, both parties tendered various exhibits. Most significantly, these included exhibit “HW1” being the agreed parenting orders, and exhibit “HW2” being the agreed property orders. By “agreed” I mean that the essential form of each order was agreed and that it was just the various details – albeit significant details such as property settlement percentages – that had to be included in the Orders. In some instances the court was asked to select one party’s proposed order over the other party’s – with the competing options being included in the draft orders for the court’s assistance.
The court also had the benefit of two (2) Family Reports dated 20 June 2016 (Family Consultant Ms H) and 31 August 2017 (Family Consultant Mr J). Neither of the Family Consultants was required for cross-examination, given the extremely narrow issues in dispute. I record here that I should have formally admitted the Family Reports as exhibits at trial but in the course of reviewing the matter I see that this was inadvertently overlooked. Both parties had made reference to the Family Reports in their respective Case Outline Documents and during the course of the trial. No prejudice arises in my not formally admitting those documents as exhibits.
Only the Husband and the Wife were cross-examined at trial. The Husband’s counsel chose not to cross-examine Mr F.
THE PARENTING DISPUTE:
To the extent that the court has been required to resolve parenting issues, I note that the provisions of Part VII of the Family Law Act (“the Act”) apply and that, in particular, the court is obliged to regard the best interests of the children as the paramount consideration: s.60CA. The mandatory “best interests” considerations are statutorily prescribed in s.60CC of the Act.
Having made that observation, the s.60CC considerations are something of a blunt instrument given the relatively narrow issues in dispute.
The children’s education:
The parents struggle to communicate. According to Family Consultant Mr J their communication is characterised by “mistrust.” [3] While each party’s counsel referred to it for different forensic purposes, it was common to the submissions of both that there was little or no trust between the parents.
[3] Paragraph 9 of the Family Report dated 31/08/17
I do not consider that an order for equal shared parental responsibility as to education would be in the best interests of the children, as there would be too high a risk of disagreement: s.60CC(3)(l). Education and health were obvious potential “flashpoints” for future conflict. The Husband concedes health and will also concede education – but only provided that the children attend school in the Region D Local Government Area.
In a practical sense, the arguments of the parties at trial were very much focussed upon the proposed geographical restraint rather than on the issue of parental responsibility per se. The Husband’s “equal shared” position on education was a fallback position that only arose if the court “permitted” the children to be educated at a school outside the Region D Local Government Area.
The Husband knows that his fallback position of equal shared parental responsibility for education would be problematic and difficult. The practical effect of such an order would be that the Father would withhold agreement to the children being educated at any school outside of the Region D Local Government Area – this being his major concern.
Neither party ran their case by reference to the application of the statutory presumption in s.61DA. This was sensible given the manner in which the parties had earlier agreed to divide up parental responsibility as between the various “major long-term issues”. Both parties took the practical position that there was little or no trust between them and that on this narrow issue the court simply had to make a judgment call in the best interests of the children.
To some extent the schooling issue is a problem of geography, in that the Wife lives at Suburb K, close to the southernmost end of the Region D Local Government Area whereas the Father lives close to the middle of the Region D. When the Husband sells the Suburb C property, he is likely to remain living in that general locality as home prices are somewhat cheaper there. He thus does not want the children moving going to school further south given the inevitable increase in the commute time for him, particularly noting that the Wife’s proposed 50 kilometre radius from Suburb A Post Office would capture the northern part of the greater Sydney region.
The Husband is also concerned that the Wife could use the school issue as a “Trojan Horse” to relocate with the children to Sydney.
I should note here that this present dispute is in a sense entirely theoretical at this time. [X] is presently in Year 7 at Suburb E State High School and can complete Year 12 there. [X] has always been a good student and I accept the Wife’s evidence that she has no current plan to move [X] from that school.
Why then are the parties litigating about this issue? In short, because of the risk of future exigencies. In relation to [X], the Wife gave two (2) possible examples of why she may wish to change schools in the future:
(a)if [X] decides that she wishes to study a particular subject for her HSC that is not available locally; or
(b)if [X] is subjected to serious bullying at her local school – though there is no evidence she has ever been bullied at school to date.
In either of these events – or some other unforeseen event that warrants a change of schools – the Wife wants the flexibility to be able to choose a school within the greater Sydney region. Although there are a great many available schools within the Region D Local Government Area, the Wife considers that the schools in the northern part of the greater Sydney region are superior to those available locally. The Wife specifically mentioned the possibility of sending [X] to Suburb L Girls High School – in which case she said that [X] would have to catch the train to get to and from school.
On all of the evidence before me, I consider that the Wife is not using the schooling issue as part of a broader plot to relocate to Sydney. The Husband’s fears about this are unfounded. In my view the lack of trust is in fact the major driver behind the schooling debate.
All of the Wife’s support network are at the Region D. The maternal grandfather and his partner live there, the maternal grandmother lives there and the Mother’s three (3) sisters all live there. I accept the Wife’s quite emphatic evidence that her family are at the Region D, that she likes living there, she finds it an affordable and stable environment. She enjoys the support of her family and friends there and does not want or intend to herself move to Sydney.
While Mr F does work in Sydney and has a one hour forty minute commute each way to work at Suburb M during the week, this is a longstanding arrangement voluntarily entered into by Mr F. While objectively the weekly travel burden for Mr F is a real one, Mr F is well used to it and in fact he previously sold his Sydney house to move to Suburb K - well knowing the inevitable commute that that awaited him. This was a family decision that Mr F took in consultation with the Wife.
In selling his Sydney unit, Mr F acted inconsistently with an intention to live in Sydney.
I also note that in 2018 the Wife made the decision to enrol [X] in a local high school at Suburb E for 2019 – notably this was both a unilateral decision on her part, and one which kept [X] in a local school.
The Husband’s strongest argument for a school in the Region D Local Government Area relates to the travel burden if the children attend school in greater Sydney.
But it is important to note here that if the Wife sent the children to a school in greater Sydney, then she would have the practical burden of being responsible for fourteen (14) out of every twenty (20) school pick-ups and drop- offs every fortnight compared to the Husband’s six (6). It is not logical that the Wife would want to shoulder additional avoidable travel burdens, particularly given her care of her youngest child [G] who has some health difficulties. In that regard, the Wife’s evidence as to [X] potentially catching the train if she went to school at Suburb L made sense.
The Husband’s commute difficulties only of course arise if he physically drives the children to and from school in greater Sydney rather than sending the children on public transport.
As the children get older, their wishes will become increasingly relevant and in this respect if [X] does specifically want to attend a school in the greater Sydney region to pursue a particular study opportunity, then one would think that if it was feasible for her to do so then her wishes would carry significant weight. While not presently contemplating same, the Wife does not want to foreclose that as an option into the future. Nor does the Wife (or the Husband) want another debate, or more court proceedings, to resolve schooling issues.
Likewise it should be recognised that [X] and [Y] are currently on a trajectory to complete their education in the Region D Local Government Area. There is a real likelihood that the children, particularly [Y], would very much wish to stay at school in the Region D Local Government Area. Frankly I could not envisage the Wife sending [X] (or [Y]) to a school in Sydney unless the children very much wished to do so or there was otherwise a good reason for it.
While I accept that the children attending school in the greater Sydney area would impose additional travel burdens on the Husband and potentially erode some of his time with the children, they will nonetheless be able to maintain a meaningful relationship with him. He can still be involved in their education. I am also satisfied that the Wife would not lightly make such a decision and would do so only for the purpose of advancing the children’s education to the maximum extent. I do not consider that she would deliberately set out to sabotage the Husband’s time – particularly in circumstances where it is she will be responsible for shouldering the bulk of the travel burden in any event.
I consider that the Wife, who is to have sole parental responsibility for health, can be appropriately vested with sole parental responsibility in respect of the children’s education because I am satisfied that she will make the decisions relating to their education that she considers best for them – and will focus on their needs first. Since separation she has properly facilitated and fostered the children’s education at the Region D School, at significant personal expense to herself and Mr F. She values the children’s education and wants them to do their best.
Overall I am satisfied that it is in the best interests of the children that the Wife have sole parental responsibility for their education on the basis that the parents are not able, or would be unlikely to be able, to properly communicate and agree about such matters.
On balance I consider it unlikely that the Wife will enrol the children in school in Sydney even if she is able to do so. It is not a decision she would make lightly or for other than child-focussed reasons. She would heed both children’s wishes, particularly as the children get older.
There is no good reason why the children should miss out on potential educational opportunities that may be available to them in the greater Sydney region if the parties can facilitate it for them. In my view the parties have the necessary wherewithal to make the necessary travel arrangements for the children and to utilise appropriate public transport as needed.
In all the circumstances it would be contrary to the best interests of the children to put in place a geographical restriction, where the effect of same is to potentially deprive the children of a future educational opportunity that may not be available, or as available, locally. The Wife ought to have as much freedom of choice as to schools as the children’s best interests permit and in the end, after much consideration, I have concluded that her proposed 50km radius is an appropriate line to draw.
School Holidays at the end of Term 4:
This was a curious and arguably quite trivial debate.
To be fair, the evidence specifically pointing in favour of one option over the other is “thin”.
The Husband’s trial Affidavit was silent on the issue. With my leave, he gave some brief oral evidence-in-chief wherein he explained that his proposed holiday split would better enable he and the children to go camping with some family friends and their respective children – who apparently see [X] and [Y] every two or three weeks.
Interestingly, in paragraph 14 of the first Family Report the Husband had referred to going camping with some different family friends and their children – apparently the families were interacting most weeks and camping together about three times per year. This social interaction was said to be supportive of the Husband’s mental health, noting that he suffers from post-traumatic stress disorder (referred to later.)
The Wife’s argument in response was deceptively simple. She submitted that it was better to keep all of the holidays “uniform”. She also referred to some previous requests by the Husband for time with the children at Christmas which were inconsistent with what the Husband was now proposing.
In truth the s.60CC factors are again a somewhat blunt instrument in resolving this particular dispute.
The advantage of the Wife’s order is that it keeps the holiday arrangements uniform.
That said, the parties are both intelligent and well-educated people and there is no reason why the Husband’s proposed order could not work equally well.
In the end, in what is a “line ball” decision, I find the Husband’s order to be more in the best interests of the children. I so find because of the possibility that this structure may better suit the children in terms of camping with the Husband’s family friends as he contends – noting that [Y] in particular would likely benefit from such interactions and that the Husband himself derives some support from his friendship networks.
Accordingly, I propose to make orders in terms of the Father’s proposal in relation to the end of term 4 school holidays.
In closing, there was also a very minor debate about the time that the children should spend with the parent who does not otherwise have Christmas Day with the children pursuant to the orders. The Husband proposed that the other parent have the children from 2pm Christmas Eve to 2pm Christmas Day and the Wife proposed 2pm Christmas Day to 2pm Boxing Day.
I prefer the Wife’s proposal as I consider it less disruptive to the children. It enables the “Christmas Day” parent to enjoy the leadup to Christmas Day uninterrupted.
Conclusion & orders:
With specific reference to exhibit “HW1”, I intend to make all of the agreed orders and otherwise to make:
(a)the Wife’s proposed order 2.4, which vests her with sole parental responsibility for the children’s schooling and education;
(b)order 4.3, which imposes the 50km radius for schools;
(c)order 12.2.4F, being the Husband’s holiday order for term 4 in odd years;
(d)order 12.3.4F, being the Husband’s holiday order for term 4 in even years;
(e)orders in terms of 13.4.2 and 13.4.3 in respect of time on Christmas Day and Boxing Day.
In closing, I note that after the conclusion of the trial the parties jointly forwarded a different version of exhibit “HW1” to the court which they asked the court to make by consent. That version had removed the contentious orders. It had different numbering to exhibit “HW1”. To avoid confusion these reasons for judgment refer to the original exhibit.
The court makes the parenting orders set out at the commencement of these reasons. The orders are based on exhibit “HW1” with appropriate changes to reflect the court’s decision. The numbering of the order will also be different; the notation to the parenting orders referred to the new numbering used by the court.
THE PROPERTY DISPUTE:
The property settlement proceedings are governed by the provisions of Part VIII of the Act.
In these reasons for judgment, I propose to adopt the following approach:
(a)Firstly, I will identify and value the assets, liabilities and financial resources of the parties;
(b)Secondly, I will consider whether it is “just and equitable” to make a property settlement order;
(c)Thirdly, I will identify and assess the respective contributions made by each of the parties towards the net assets pursuant to s.79 of the Act. For convenience, each party’s respective contributions–based entitlement will be expressed in percentage terms;
(d)Fourthly, I will identify and assess the relevant “future factors” set out in s.75(2) of the Act. I will also consider any relevant matters arising pursuant to s.79(4)(d), s.79(4)(f) and s.79(4)(g). Having done so, I will then determine what (if any) adjustment ought to be made to each party’s respective contributions-based entitlement. In doing so I will be mindful not only of percentages (which are a useful tool for the court) but also of the underlying dollar figures that the percentages represent (ie. the practical consequences to the parties);
(e)Lastly, I will consider the effect of my findings and proposed orders so as to satisfy myself that any proposed property settlement order I am contemplating is “just and equitable”.[4]
[4] The pathway I am adopting is primarily based upon that endorsed in the Full Court in Hickey v Hickey & Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143, adapted by me to take into account the High Court’s decision in Stanford v Stanford (2012) FLC 93-518.
In this particular case, the Wife has accused the Husband of failing to make full and frank financial disclosure of his financial circumstances. There is some substance to her complaint as will be seen. As the Full Court has made clear in a line of authorities, once it has been established that there has been a deliberate non-disclosure by a party to these types of proceedings, then the court need not be unduly cautious about making findings in favour of the “innocent” party. To do otherwise might be thought to provide a charter for fraud in proceeding of this nature.[5]
[5] See particularly the Full Court’s decision in Black v Kellner (1992) FLC 92-287.
Step 1 – Identifying and valuing the assets, liabilities and financial resources:
At trial, the parties agreed on the following Balance Sheet:
Non-Superannuation Assets & Liabilities:
ASSETS
Ownership
Item
Agreed Value
Joint
Street B, Suburb C
$1,550,000
Wife
Motor Vehicle N
$14,000
Husband
Motorcycle
$23,000
Husband
Motor Vehicle O (post-separation asset)
$37,000
Joint
Parties’ interest in Tullos Pty Ltd ATF Tullos Family Trust
$ NIL
Husband
Shares P (400)
$1,200
Wife
Shares Q (102)
$1,300
Sub-total:
$1,626,500
LIABILITIES
Joint
AMP Bank Loan (Street B, Suburb C)
($82,248)
Joint
AMP Bank Loan (Street B, Suburb C)
($180)
Husband
Unsecured loan from parents to purchase Motor Vehicle O (post- separation liability)
($20,000)
Sub-total:
$102,428
Net non-superannuation assets
$1,524,072
Superannuation:
Ownership
Item
Agreed Value
Husband
Super Fund R
$32,000
Wife
Super Fund S
$128,572
Subtotal
$160,572
Step 2 – Considering whether it is “just and equitable” to make a property settlement order in this case:
In its decision of Stanford & Stanford (2012) FLC 93-518, the High Court of Australia elaborated upon and clarified the statutory requirement that the court is not to make any property settlement order pursuant to Part VIII unless it is “just and equitable” to do so.
In their plurality judgment, French CJ, Hayne, Kiefel and Bell JJ held that:
(a)In every case in which a property settlement order is sought it is necessary to satisfy the court that in all of the circumstances it is “just and equitable” to make such a property settlement order [s.79(2)];
(b)The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations and does not admit of exhaustive definition. It is not possible to chart its metes and bounds. That said, there are three (3) fundamental propositions which must not be obscured:
i)First, the court must begin a 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;
ii)The power to make a property settlement order must be exercised in a principled fashion, and it cannot be answered by assuming that the parties rights to, or interests in, matrimonial property are or should be different from those that then exist;
iii)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 by reference to the matters set out in s.79(4). To conclude that making an order is “just and equitable” only because of, and by reference to the s.79(4) considerations, without a separate consideration of s.79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.
I have already set out the parties’ property as best I can find it to be.
This was a lengthy relationship which produced two (2) children. The parties intermingled their assets.
The relationship has failed. Both parties seek a property settlement order, albeit in different terms.
In my view, this case comfortably falls into the category of cases identified in the plurality judgment where the “just and equitable” requirement is readily satisfied.
Step 3 – Identifying & assessing the respective contributions of the parties:
This issue was a major focus of the parties at trial. Understandably, each party agitated a position most favourable to their own case.
Given the length of this relationship, I propose to assess contributions in a broad-brush manner, consistent with the authorities. Although at trial the parties at times descended into considerable detail in relation to the respective financial contributions, I will only descend into such detail to the extent that I consider necessary in order to do justice and equity. In a case such as this, determining what is a just and equitable property division is not a strictly accounting or mathematical exercise.
The parties litigated the matter on the basis that the non-superannuation assets and the superannuation assets should be bundled together for the purposes of the contributions assessment.[6] I have therefore adopted that approach.
[6] Such approach is permissible: Norbis & Norbis (1986) FLC 91-712
Initial contributions:
When the parties commenced cohabitation in … 1997, the Husband was a professional with two (2) years’ experience and the Wife was a University student.
The Husband likely had some very modest superannuation entitlement. In reality though neither party had any assets of significance.
Contributions during the relationship - overview:
By way of overview, both parties made substantial contributions during the relationship.
In the Husband’s case, he was a professional up until 2010 following which he was in receipt of workers’ compensation payments. He was also a successful share investor and something of an entrepreneur, conducting a number of businesses from home. He also made significant parenting and homemaking contributions, particularly after leaving his employment.
The Husband also received a number of lump sum payments arising out of his work-related injuries and these were applied for the benefit of the parties.
In the Wife’s case, upon leaving University she was consistently working in the professional field, around her child-rearing commitments. She made significant parenting and homemaking contributions throughout. She also contributed some lump sums for the parties’ joint benefit.
The early days of the relationship:
For the first three (3) years or so of their relationship, the parties lived on a rent-free basis with the Wife’s father and during this period they were able to save some money in preparation for the purchase of a home.
Parties acquire their first home at Suburb T:
By the year 2000, the Wife had left University and taken up employment. In June that year, the parties purchased their first home at Suburb T, which they moved into. The purchase price was $188,000 and to secure the purchase the parties took out a mortgage of $178,600.
The parties later refinanced the home mortgage to purchase a motor vehicle.
Husband obtains financial planning qualifications & establishes relevant entities:
For several months in 2003 or 2004, the Husband took a career break so as to undertake a course.
The Husband had something of an entrepreneurial streak. Having undertaken his Diploma, he then established the Tullos Family Trust (“the family trust”), while incorporating a proprietary company, Tullos P/L (“the company”), to act as trustee. The Husband was appointed as the director of the company and both parties were shareholders.
As a general statement, during the marriage the Husband managed the affairs of both the company and the trust. Initially his management of these entities met with the Wife’s approval – but as their relationship soured and particularly post-separation the Wife accused the Husband of acting unilaterally and of not properly consulting with her about financial decisions that were being made.
The Husband established a business in 2005 or 2006. It had an associated BPAY facility which the Husband established through Currency Exchange. The Husband undertook 95% of the work involved in that business.
Parties sell Suburb T property:
In … 2005, at a time when the Wife was pregnant with [X], the parties sold the Suburb T property for around $330,000 - netting approximately $208,000 after discharge of the mortgage.
The parties thereafter lived with the Wife’s mother for approximately seven (7) months on a rent-free basis.[7]
[7] Apart from a $1,500.00 contribution made by the parties towards repair costs for the Wife’s mother’s home.
[X] is born:
[X] was born on … 2006 at which time the Wife went on maternity leave and become [X]’s primary carer.
Parties acquire their second home at Suburb A:
The parties purchased their second home at Suburb A in … 2006 for $560,000. They applied $120,000 from the sale proceeds of the Suburb T property towards the purchase price, the Wife’s father provided $200,000, and the parties jointly borrowed from AMP the remaining $240,000.
At trial the Husband argued that the Wife’s father’s $200,000 gift should be regarded as a gift to both parties rather than just a gift to the Wife. However, I prefer the Wife’s evidence that it was a gift for her and I therefore propose to credit the Wife in a contributions sense in respect of that contribution.[8]
[8] See Gosper & Gosper (1987) FLC 91-818; Kessey & Kessey (1994) FLC 92-495
Husband invests in shares:
In 2009, the parties also jointly borrowed an additional $200,000 from AMP. The Husband used these moneys to establish a Commsec Share Trading account in the parties’ joint names – which the Husband then managed.
[Y] is born - Wife receives redundancy before returning to work again:
The Wife gave birth to the parties’ second child, [Y], on … 2008. She thereafter remained on maternity leave until … 2008 at which time she was formally made redundant. Her redundancy payment of approximately $40,000 which was applied for the joint benefit of the parties.
Shortly afterwards in … 2008, the Wife re-entered the workforce, obtaining part-time work with Employer which in … 2009 transitioned to full-time work.
Husband’s business and investment activities:
By 2009, the Husband had become significantly more involved in share trading through “Interactive Brokers”. In 2009 he injected capital of $130,000 from matrimonial funds into those share trading account/s. Later in 2011 when he had received his lump sum payouts the Husband injected another $120,000 into those shares so that the total capital outlay was $250,000.
I accept the Wife’s evidence that the Husband was in control of these share investments throughout and that she was not herself authorised to access the Interactive Brokers account. This was very much the Husband’s venture.
It is common ground that the Husband’s share investments made a substantial profit over the ensuing years.
Husband goes onto workers’ compensation / continues his entrepreneurial activities from home:
Although the Husband had been continuing to work as a professional during this period, eventually his work began to negatively impact on his health. He had suffered a shoulder injury and some low back injuries at work, but more significantly he suffered psychological injuries arising out of his unfortunate exposure to various confronting and/or traumatic events.
By around … 2010 the Husband was no longer able to go to work. Instead he stayed home, from where he continued to invest in shares and conduct his various businesses.
In … 2010 the Husband was formally stood down from work on medical grounds. He was thereafter diagnosed with severe anxiety and depression. Consequently he began to receive workers’ compensation benefits, which were equivalent to approximately 80% of his usual salary.
I accept that the Husband’s parenting role increased from this time, and I accept that in a practical sense he became the primary carer of the children. However, given his at times disabling mental health condition, I am also satisfied that the Wife did significantly assist him in the care of the children around her own work commitments. She also significantly assisted in caring for the Husband as well.
In … 2011 the Husband drew down $270,000 from the home mortgage – which was then loaned to the company. At the same time, two (2) beneficiary loans were created within the trust in favour of the Husband and the Wife respectively, each of an equal amount ($135,000).
Around that time, the Husband then established some other business ventures.[9]
[9] Referred to in the evidence as “…” and “…” –
Husband discharged from his employer / receives lump sum personal injuries payouts:
In mid-2011, the Husband was formally discharged from his employer. His workers’ compensation payments of approximately $33,000.00 per annum continued.
In … 2011, the Husband received a lump sum payment of $39,664 on account of his unpaid leave entitlements.
In … 2011, the Husband received a lump sum disability payout of $474,797. I accept the Wife’s evidence that at that time the Husband told her that he had only received approximately $400,000. (As will become clear in these reasons for judgment, the Husband was at times evasive as a witness when it came to financial matters. As a general statement the court is more inclined to accept the Wife’s evidence as to financial matters over that of the Husband where they conflict.)
The Husband thereafter applied the sum of $500,883 to the various liabilities of the parties.
The Husband continued conducting his various businesses from home and acting as primary parent while the Wife remained in full-time work.
The Husband proved himself to be a successful share trader. In the period FY2009 to FY 2015, he was able to generate capital gains of just over $500,000 while retaining his initial $250,000 investment. In August 2014, the Husband was able to return $500,000 into one of the Suburb A loan accounts resulting in the parties immediately having significant financial liquidity.
Also in 2014, the Husband transferred $125,000 from matrimonial funds into the company or trust for business purposes – although the evidence is far from fulsome about that.[10]
[10] Husband’s trial Affidavit, paragraph 83
Sale of the Suburb A property:
In … 2014, the parties sold the Suburb A property. After payment of the mortgage, they netted approximately $750,000.
By this time the parties’ efforts – including contribution of the lump sums referred to – meant that they had amassed had just over $1,000,000 in the bank. Financially, they were very comfortable.
As they had done before, the parties again briefly lived for a time with the Wife’s family on a rent-free basis while they were “between houses”.
Purchase of Suburb C property:
In 2015 the parties purchased the Suburb C property for $1,100,000.
From their own cash resources, they paid a deposit of $110,000.00 as well as drawing a bank cheque for $750,000.00 for the purchase. They borrowed the balance of the purchase price from AMP.
In … 2015, the Husband drew down another $150,000 from the Interactive Brokers account, depositing that money into one of the loan accounts for the Suburb C property.
Separation:
The parties separated on 9 August 2015, following which the Wife and children moved out of the Suburb C property.
Post-separation contributions:
These were the subject of significant debate at trial.
In relation to the Husband, he has continued to receive his workers’ compensation payments throughout.
The Husband has had the ongoing benefit of living in the Suburb C property. The mortgage repayments were a mere $500 per month – far less than the home’s rental value.[11]
[11] See paragraph 119.3 of the Husband’s Trial Affidavit.
To the Wife’s credit, in relation to the Suburb C property:
the Wife in fact continued to contribute to the expenses for the home. For the first six (6) months or so, she continued to pay half of the rates, water and other miscellaneous expenses;
the Wife continued to pay half of the mortgage repayments for a little over a year.
Moreover, even when the Husband took over sole responsibility for the modest mortgage repayments in March 2017, he in fact used trust or company moneys to make the repayments - rather than applying his own income.
The Husband’s evidence was that the relevant withdrawals were recorded in the Financial Statements as being repayments towards the beneficiary loans in the parties’ names. Of course, that would technically be the correct approach from an accounting standpoint, in that the moneys were being applied to repay the joint mortgage - but it ignores the fact that the Husband who had the sole occupation and use of the property.
But that is not in fact how the loan repayments were in fact treated by the accountants whom the Husband instructed. In fact the relevant Financial Statements were completed in a way that unfairly and unreasonably favoured his position over that of the Wife. For reasons that are unclear and inexplicable, the amount of the Wife’s beneficiary loan as at 30 June 2018 had been reduced to $80,490 whereas the Husband’s loan balance was $138,078.
In the course of the hearing, the Husband’s counsel followed up this obvious discrepancy with the accountants. There followed an appropriate concession by the accountants that the records of the trust were incorrect. In particular, the accountants advised that the correct balance for each party’s beneficiary loan as at 30 June 2018 should have been recorded as $109,288.00.
The Financial Statements reveal that between 1 July 2015 and 30 June 2018 the trust in fact paid out a total of $143,972 for the parties’ benefit. Yet this figure did not sit with the Husband’s evidence that the trust only paid $101,000 for the parties’ benefit during that period.[12]
[12] See Exhibit H4b.
In his evidence the Husband maintained that his figure was correct and the accountant’s higher figure was wrong.
One issue related to the trust’s ANZ Visa card. In his evidence the Husband denied that any personal expenses of his were being incurred on the ANZ Visa card post-separation. Yet the trust paid personal expenses of the Husband on that card in the amounts of $15,186 in FY 2016 and $12,470 in FY 2017.[13]
[13] See Exhibit H4d.
I do not accept the Husband’s evidence on this issue. I particularly note that the Husband had always managed the relevant entities, and that his accountants had acted on his instructions throughout.
While the Husband’s counsel submitted that, overall, I should accept the Husband’s figures in relation to the post-separation withdrawals from trust, I am not attracted to that approach. In closing addresses the Husband’s counsel conceded – quite properly – that “the state of the evidence is difficult and confusing and there’s no doubt that has not been helped by the lateness in which the Husband has prepared his case.” As I responded to counsel, why wouldn’t I draw the inference adverse to the Husband in those circumstances? Why should he be given the benefit of the doubt created by his lack of disclosure and the opacity of the trust affairs?
I am impelled to find against the Husband on this issue. I consider it to be more likely than not that the Husband manipulated the accounts in a way that advanced his own interests over those of the Wife, in much the same way that, post-separation, the parties’ respective loan account balances had ended up unfairly and inappropriately in the Husband’s favour.
My conclusion is fortified by the fact that the Husband’s non-disclosure in his earlier Financial Statement filed on 7 October 2016 that the trust was in fact even paying his share of the mortgage repayments post-separation.[14]
[14] See Part F of that document, page 4
My conclusion is also fortified by the Husband for the first time disclosed relevant PayPal statements (which were connected to his business operations and formed part of the operations of the trust) on the morning of day 3 of the trial. By this stage he was then able to produce thirty (30) pages of documents. When challenged about this late disclosure, he gave the glib answer that the Wife had “never asked for the documents” and that the same information was already recorded in the accounting software that he used.
The problem was that the PayPal statements were the primary documents whereas the Husband’s accounting software were only a secondary record. Moreover, the information in the software had already been shown to be inaccurate – at least in so far as the ANZ Visa Account is concerned. As can be seen from exhibit 6a, the Wife had been seeking substantial disclosure from the Husband for a long time before the trial. The extent of the disclosure she was seeking bears witness to the Husband’s control over, and much greater knowledge of, the financial affairs of the parties.
The proceedings having been commenced in late 2015. In my view the Husband should have provided the PayPal account statements much earlier than on day 3 of the trial.
It was quite evident during the trial that the Husband’s counsel was in the invidious position of having to “plug the gaps” in the Husband’s disclosure – gaps that ought not to have been there.
The financial affairs of the trust are somewhat opaque in terms of the capital injections and withdrawals over the years. At paragraph 83 of his trial Affidavit the Husband admits that there were “various” capital injections and withdrawals and he specifically refers to 2014 deposit of $125,000 of matrimonial funds into the trust. But he deposes that only “some” of the capital injections are recorded in the accounting systems.
Returning then to the post-separation contributions, I am satisfied that all told the trust paid the Husband the sum of $143,972 post-separation. I accept that some $40,000 of that money was applied to meet the Husband’s GST liability arising out of his past share trading activities. With some difficulty, I am prepared to accept the Husband’s evidence that $10,000 of the remaining money was in fact repaid into the Husband’s superannuation fund as he claims and that he spent $4,153 on roof repairs. With some difficulty I also accept that around $20,500 of trust moneys/assets were applied towards a trade-in on the Husband’s current vehicle. I am treading a difficult line here as I do not want to “double count” but equally the Husband’s disclosure has been less than adequate in a number of respects and he should not benefit from the resultant uncertainty.[15]
[15] See exhibit “H23”
In the result I find that the Husband obtained the sole benefit of the other $69,000 or so that was drawn from the trust. Some of that money was applied towards repayments and expenses for the Suburb C property. Some if it remains unaccounted for.
No-one but the Husband (and perhaps the accountant) will ever fully grasp the financial history of the trust and the Husband’s various business endeavours.
As to the superannuation, the Husband’s evidence was that he had accessed $100,000 – most of which he had applied to legal expenses. He says he repaid $10,000 as noted above. But to be fair to the Wife, she has to take his word for that – as the Husband did not disclose superannuation statements or records to corroborate the amount withdrawn.
As for the Wife, I accept that at separation she had $17,000 in the bank. She withdrew a further $15,000 from the mortgage offset account when she left the home. By agreement, the Wife used $8,670.00 to pay rent for a property at Town U for herself and the children in the period between September 2015 and December 2015.
The Wife started living with Mr F in 2016 and in … 2016 she gave birth to their child [G].
The Wife (with the assistance and support of Mr F) paid the private school fees for the children in 2016, 2017 and 2018. She sold her motorcycle in 2017 in order to meet the 2017 school fees and the Husband conceded that this was a reasonable expense. This was an appropriate concession by him. Notably his trial Affidavit had asserted that the motorcycle sale came as a surprise but this assertion was demonstrably shown to have been unfair – the Wife’s solicitors had written to the Husband in October 2016 seeking his agreement to the sale but he had not given her the courtesy of a reply.
The Wife has been unemployed for some time now and her weekly expenses exceed her income. Mr F is providing her and the children with financial support.
Parenting contributions & child support:
In relation to parenting, the Wife has been the primary carer of the children since separation, although the Husband has spent substantial and significant time with them.
Child support was a source of ongoing conflict between the parties and there were a number of child support reviews. The Husband conceded in his evidence that after separation he “lost interest” in pursuing his business activities. While I accept that he did not want to be irresponsible with the parties’ capital, I am also satisfied that at least part of his disinterest arose out of a desire not to pay any more child support to the Wife than he had to.
For the first couple of years post-separation, the Husband in fact paid little or no child support to the Wife at all. At one stage the Wife was even assessed to pay him child support.
Overall, having regard to the Husband’s taxable income since separation[16] it is apparent that his child support payments resulted in the Wife bearing a disproportionate share of the children’s expenses since separation.
[16] Trial Affidavit of the Husband, paragraph 114
Lump sums:
In relation to lump sums:
(a)In March 2017 pursuant to court orders, the Husband sold the bulk of the shares then remaining in the Interactive Brokers account. By agreement, the wife’s CGT arising from the Husband’s past sale of shares was paid out of those proceeds – the Husband having already used trust moneys to meet his own CGT liability. The balance left over was divided between the parties equally. (The minor amount left in the shares account was later drawn down, paid onto the mortgage and the share trading account closed.)
(b)in … 2017 the Wife received a redundancy payment of $75,116 from her Employer which she has since expended and I take into account that most of her employment with her Employer was during the parties’ relationship. Although the Husband criticises the extent of her disclosure in relation to that sum, the reality is that she concedes that she applied those funds to meet expenses for herself and the children, legal costs and general living expenses;
(c)in February 2018, the Husband received a further $15,300 lump sum workers’ compensation payment which he has retained. The relevant determination was made in October 2017.[17]
[17] See Exhibit 3a.
The Husband’s disclosure was again somewhat lacking in this respect. Up until the trial, he had never disclosed the source of this $15,300 payment into his account. His oral evidence was that he had only just received the relevant workers’ compensation paperwork at the time of trial.
I do not accept that evidence. This particular payment followed an agreed settlement of the Husband’s outstanding workers’ compensation claim. The Husband must have either had the relevant document (in which case he could have disclosed it), or he at least had the capacity to have been able to obtain a copy of those documents at a much earlier time from the solicitors who represented him in that matter.
I add here that the Husband was less than full and frank in relation to his pending compensation payments. Exhibits 6a and 6b demonstrate that in response to questions from the Wife’s solicitors about such matters, the Husband’s solicitors were quite pedantic. They gave the bare minimum of information in response to specific questions asked - without really enlightening the Wife as to the substance of what was happening. The Husband adopted not so much a “cards on the table” approach as a “catch me if you can” approach.
Overall assessment of contributions:
In the period up until separation, the Husband’s contributions were superior to those of the Wife. This is largely because of his lump sum personal injury payments.
The Husband made significant profits through share trading in the period FY 2009 – FY 2015 ($500,000). That said, once he left his employer, his weekly compensation income was less than his usual salary. The Wife also points to exhibit “W23” [18] which reveals that in the period FY 2012 to FY 2018, the trust went backwards financially by some $218,000 or so. Thus the Husband made substantial profits on one hand and losses on the other – but a healthy profit overall.
[18] Schedule of Loan Account Movements & Profitability for the trust, covering the period FY 2012 – FY 2018
Assessing contributions is of course not a strictly mathematical exercise, particularly in a long relationship such as this one involving as it did a myriad of contributions made by each party not only towards the assets but also towards the family.
As at separation, I would assess contributions to the parties’ property as being 60% - 40% in the Husband’s favour. I place particular weight upon his lump sum personal injury contributions.
The post-separation contributions favour the Wife by 10% overall, largely by reason of the Husband’s disproportionate drawdown of trust moneys, the Husband’s drawdown on his superannuation ($90,000), the ongoing benefit he has had in living in the Suburb C property, the Husband’s minimal child support payments and the Wife’s superior parenting contributions. I also take into account that the Wife did fully expend her own redundancy payment. I have also had regard to exhibit “H23” but on my findings the Husband has obtained a greater financial benefit from the trust than that exhibit portrays.
As at the date of trial, I therefore assess each party’s contributions to be 50%.
Step 4 - Identifying and assessing the relevant factors pursuant to s.75(2), s.79(4)(d), s.79(4)(f) and s.79(4)(g):
The Husband was born on … 1974 and is shortly turning 45. He is a medically discharged professional who suffers post-traumatic stress disorder, an adjustment disorder and depression. In October 2017, he was assessed by the Workers’ Compensation Commission as having a 22% whole person impairment.
He receives ongoing compensation payments of approximately $630 net per week. When he turns 66, those payments will cease and he will be eligible to receive an aged pension entitlement.
In one sense then the Husband has a secure, albeit modest, income stream for the next 21 years. He also has qualifications and a proven capacity to successfully invest in shares, although he ceased doing so in 2017. To be fair to the Husband, I would also add that in order to make the larger profits he made in earlier years of share trading, he will need a significant capital sum behind him. He says he does not wish to rent but rather to buy a house and I accept his evidence about that. It follows that he will have a fairly modest amount of “cash” left over to invest in shares and any such investment inevitably risks losing that precious capital.[19]
[19] See s.79(4)(d)
So in the end I take the view that the Husband has a modest income-earning capacity (arising from his ongoing compensation payments) but with potential to make some additional profits along the way either through shares or perhaps through other business ventures if he is so inclined.
I do not consider the Husband’s potential future return to the workforce to be realistic. He has not worked externally since being discharged from his employer in 2010.
The Wife was born on … 1978 and is presently 41. She is in good health. Although the Wife has been out of the workforce since 2016, she has qualifications and a good track record in terms of her past employment.
The Wife does however have ongoing responsibilities for [Y] and for [G]. [Y] has had behavioural difficulties and [G] has had relatively high needs. I will however only take account of the extent to which [Y] impinges on the Wife’s future work capacity.
I accept that when the Wife returns to the workforce, her income will be relatively modest and that she realistically won’t be able to work more than around 18 hours per week. [Y]’s behavioural challenges are such that she will likely have to rely upon family to care for him outside school hours, failing which she will have to pay for formal care.
I accept that her ongoing primary care of [Y] does impinge to some extent upon the Wife’s income-earning capacity.
I have set out the respective assets and liabilities of the parties earlier herein.
The Husband can support himself financially. The Wife requires financial support from her partner Mr F, a relatively high income-earner working in a professional role for a multi-national company. On the basis of Mr F’s unchallenged affidavit evidence, I am satisfied that he substantially subsidises the Wife’s (and children’s) living expenses and has done so for some time. He is likely to continue to do so into the future given the nature of his relationship with the Wife and their blended family arrangement.
The Husband qualifies for a modest Family Tax Benefit. The Wife does not.
I do not consider it likely that the Husband is ever going to pay the Wife any significant child support. She (and Mr F) will likely bear the bulk of the children’s ongoing costs of living. [Y] in particular has quite expensive ongoing medical needs.
Fortunately there is enough available equity in the Suburb C property for each party to be able to enjoy a reasonable standard of living upon its sale.
This has been a long relationship in which each party has contributed to the other party’s earning capacity and qualifications.
To recap, I have already determined that each party is entitled to 50% of the matrimonial property on a contributions basis.
The Wife holds $100,000 more superannuation than the Husband. As neither party seeks a splitting order, the Wife’s superannuation balance means that she will be receiving less of the available net equity upon the sale of Suburb C.
I am mindful that in the s.75(2) context, the underlying dollar figures matter more than strict percentages. In this case, each 1% of the net matrimonial property amounts to $16,846.
In my view, an adjustment to the Wife of 6% of the value of the net matrimonial property is appropriate in respect of these future factors. While I am critical of the Husband’s evidence and attitude towards disclosure, I am not of the view that this warrants any significant adjustment to the Wife in all the circumstances. As I stated in closing addresses, I do not see this as a case in which the Husband is likely to have some valuable hidden asset somewhere. The 6% adjustment includes a 1% adjustment in the Wife’s favour on account of this aspect.
It follows that the Husband is entitled to 44% of the net matrimonial property and the Wife 56%.
At trial, aside from the Suburb C property the parties held non-superannuation property of differential value as set out in the Balance Sheet. In particular, the Husband held net assets (including super) of $93,300 and the Wife held net assets (including super) of $143,872. To achieve an overall 56% - 44% division on sale of the Suburb C property, those asset holdings need to be factored in, in accordance with the following formula:
(a)“Net matrimonial property” is defined as being the sum of:
i)$93,300 (being the net assets held by the husband);
+
ii)$143,872 (being the assets held by the Wife);
+
iii)the balance then remaining following the sale of the Suburb C property referred to in order 3.6 of exhibit “HW2” (being the sale price of the property after deduction of the amounts referred to in orders 3.1, 3.2, 3.3, 3.4 and 3.5);
(b)The Wife is to be paid a dollar figure from the net sale proceeds of the Suburb C property so that she retains 56% of the “net matrimonial property”;
(c)The Husband is to be paid a dollar figure from the net sale proceeds of the Suburb C property so that he retains 44% of the “net matrimonial property”.
Step 5 - Ensuring that the proposed property division is just and equitable:
I am satisfied that my proposed property division is just and equitable.
The parties’ respective contributions-based entitlements to the net matrimonial property were equal in percentage terms as at trial, which reflects the substantial contributions each has made in the past as well as the post-separation contributions which favour the Wife. The court’s ultimate property division on a 56 - 44 basis incorporates an appropriate adjustment for future factors and circumstances as best the court can discern them.
Rulings in relation to the various disputed machinery orders:
I now turn briefly to the various disputed machinery orders set out in exhibit “HW2”.
In terms of who should nominate the selling agent, my view is that within seven (7) days the Husband should propose a panel of three (3) agents in writing to the Wife. I select the Husband rather than the Wife because he has remained living in the property and has presumably had plenty of time to research appropriate agents, whereas the Wife has moved away from the area. I propose however to “tighten” the timeframe to seven (7) days so as to keep things moving quickly.
The Wife should nominate in writing which agent she wishes to select from the Husband’s panel – she can have seven (7) days or so.
I will tighten the timeframes and include a default order that:
if the Husband fails to comply, then the Wife may nominate an agent in writing - with no need for her to submit a panel;
if the Wife fails to nominate an agent from the Husband’s panel as required by order 2.1.2W, then the Husband may nominate the agent from the panel.
I am not minded to make an order for a “staging company” (order 2.3.7W) as it gives rise to too much potential for conflict. The Husband has already raised an issue about the potential cost of same.
Conclusion:
The court makes the property settlement orders set out at the commencement of these reasons. The orders are based on exhibit “HW2” with appropriate changes to reflect the court’s decision.
I certify that the preceding one hundred and ninety-seven (197) paragraphs are a true copy of the reasons for judgment of Judge Betts
Date: 19 June 2019
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