W & D
[2005] FMCAfam 171
•21 February 2005
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| W & D | [2005] FMCAfam 171 |
| FAMILY LAW – PROPERTY – Contributions – redundancy – generally, voluntary redundancy does not involve compensation for future economic loss – wife contributed to husbands redundancy in the same manner that parties jointly contribute to superannuation – where wife claims Kennon adjustment – evidence presented discouraged by Full Court in Kennon – where both parties claim the home – where husband in occupation and has capacity to pay out the wife’s interest – wife opposes superannuation splitting order – rarely is it reasonable for one party to take virtually all of their property entitlements in superannuation, while the other party receives a disproportionate share of the immediately available assets – CHILDREN – contact orders – assessment of risks – children's relationships with their parents are enhanced by having their parent exercise parental authority and responsibility – overnight contact ordered. |
| Family Law Act 1975 Child Support (Assessment) 1989 Family Law (Superannuation) Regulations 2001 |
| Russell & Russell (1992) FLC 92-877 In the Marriage of Lee Steere (1985) FLC 91-626 In the Marriage of Clauson (1995) FLC 92-595 Kowaliw & Kowaliw (1981) FLC 91-092 |
| Applicant: | I J W |
| Respondent: | A M D |
| File Number: | SYM926 of 2004 |
| Judgment of: | Federal Magistrate Ryan |
| Hearing dates: | 15 & 18 February 2005 |
| Delivered at: | Wollongong |
| Delivered on: | 21 February 2005 |
REPRESENTATION
| Counsel for the Applicant: | Mr N. Macpherson |
| Solicitors for the Applicant: | Johnson Horsley Lawyers |
| Counsel for the Respondent: | Mr R. Bell |
| Solicitors for the Respondent: | Rita Thakur & Associates |
THE COURT ORDERS THAT BY CONSENT:
The children Emily (not her real name) born in 2000 and Cate (not her real name) born in 2002 reside with the wife.
THE COURT FURTHER ORDERS THAT:
The following contact and parenting orders continue after Order 36 becomes operative unless the contrary is stated in the orders. The husband shall have contact with the children as follows:
(a)Until Cate turns three years old to both children:
(i)Each Monday and Wednesday from 3.00 pm until 7.00 pm; and
(ii)On the first Friday of each month from 6.00 pm until 10.00am Saturday; and
(iii)Each alternate Saturday and Sunday from 9.00 am until 4.00 pm; and
(iv)In the event that the first Friday in any month coincides with a contact weekend Saturday contact is suspended that weekend.
(v)On Father’s Day from 9.00 am until 4.00 pm.
(vi)In the event that contact falls on mother’s day, Sunday contact is suspended that day.
(vii)Unless the parties agree on different arrangements the husband shall collect the children at the start of contact and the wife shall collect the children at the end of contact. When contact starts at the end of the school day the husband shall collect the children from school.
(viii)At such other times as agreed between the parties.
(b)Upon Cate turning three years old to both children as provided above subject to the following:
(i)Orders 2(a)(ii), (iii) and (iv) are discharged.
(ii)Commencing the first weekend when contact pursuant to order 2(a)(iii) was next due, each alternate weekend from 12 noon Saturday until 3.00 pm Sunday;
(iii)After six occasions of contact pursuant to the above order, alternate weekend contact shall start at 10.00 am Saturday; and
(iv)For Christmas from 4.00 pm Christmas Eve until 11.00 am Christmas Day 2005;
(v)When Emily starts infant’s school Order 2(a)(i) is discharged. Thereafter the father shall have contact each Monday following a non contact weekend from 3.00pm until 7.00pm and each Wednesday at the same times.
(c)From the start of the third school term in 2006 to both children as provided for above subject to the following:
(i)Commencing the first weekend when contact pursuant to order 2(b)(ii) was next due, each alternate weekend from 4.00 pm Friday until 4.00 pm Sunday; and
(ii)For Christmas from 11.00 am Christmas Day until 4.00 pm Boxing Day 2006;
(iii)During each school holiday period weekend contact is extended so that it lasts for five days and four nights.
(d)From the start of the second school term in 2007 to both children as provided for above subject to the following:
(i)During each school holiday period for one week. If the parties are unable to agree upon which week, it shall be the second week.
(ii)From 2.00 pm Christmas Day until 4.00 pm Boxing Day.
(e)Irrespective of the children’s ages the husband shall have contact on the children’s birthdays as follows:
(i)If the birthdays fall on a week day, from after school/pre-school the evening prior to their birthday until the start of school/pre-school the day of the birthday in years ending in an even number. In years ending in an odd number from after school/pre-school on their birthday until the start of school the next day.
(ii)If the birthdays fall on a non-contact weekend for four hours from 9 am to 1 pm.
On those occasions when the father is exercising block contact to the children during school holidays of at least one week’s duration, weekend contact is suspended during school holidays.
Unless otherwise defined in these orders school holiday contact shall:
(a)Commence at 10 am;
(b)Conclude at 5 pm;
(c)Be calculated from the day after the last day of school until and including the day immediately before school resumes;
(d)Pupil free days are not part of school holidays.
(e)Years ending in a zero are defined as years ending in an even number.
After a period of school holiday contact, contact shall resume on the first weekend after school has resumed if the husband has exercised contact during the first half of the holidays AND on the second weekend after school has resumed if the husband has exercised contact during the second half of the holidays.
From the time Cate turns four if a contact period occurs on a day adjacent to a public holiday, it shall be extended to include the public holiday. If the public holiday is a Friday it shall start at the usual time on the Thursday. If the public holiday is a Monday it shall conclude at the usual time on the Monday.
Nothing in these orders limits the husband’s capacity to participate in the children’s school or sports activities. If the husband is planning to attend any school or other function where the wife may also be in attendance he must give her no less than 72 hours notice of his intention to do so.
The husband and the wife have joint responsibility for making decisions about the long term care, welfare and development of the children.
The husband and the wife have sole responsibility for making decisions as to the day to day care, welfare and development of the children whilst they are in their care.
Each of the parties be entitled to obtain directly from any school attended by the children or from any health or welfare professional or other professional attended by the children, copies of any reports, notices or other relevant verbal or written advice affecting the education, health and welfare of the children and for this purpose each of the parties shall immediately notify the other of the names and contact details of any relevant education, health or welfare professional and keep the other party so informed.
The parties shall agree on a family general medical practitioner who will be the children’s primary treating doctor. To the extent possible the parties shall ensure that the children attend their agreed treating doctor accompanied by one of the parties, except in the case of an emergency.
Both parties shall keep the other advised of contact telephone numbers. These telephone numbers are to be used for telephone contact or otherwise in relation to matters concerning the children only.
The father is restrained from consuming alcohol or smoking marijuana for twelve hours prior to and during any period whilst the children are in his care.
Within ten weeks of the date of these orders the husband pays to the wife the sum of one hundred and seventy two thousand seven hundred and thirty four dollars ($172,734.00).
Simultaneously upon compliance by the husband with Order (14) above the wife shall do all acts and execute all documents as are necessary to transfer to the husband the whole of her right, title and interest in “the property” situate at Illawarra in the State of New South Wales.
Simultaneously with compliance by the husband with Order (14) above, the husband shall deliver to the wife a discharge of the mortgage from the Commonwealth Bank secured against the property or alternatively, a release from the mortgagee that releases the wife from any liability pursuant to the mortgage.
In the event the husband fails to comply with Orders 14 and/or 16, the wife has the right to take ownership of the property. The wife must exercise her right to take the property within fourteen (14) days of the date of default by the husband of his obligation pursuant to Orders 14 and/or 16 or his prior written notice to her that he is unable to comply with Orders 14 and/or 16. She must exercise her right pursuant to these orders by giving the husband written notice that she does so. Upon the wife giving notice pursuant to this order, Orders 18 and 19 become operative.
Within ten (10) weeks of exercising her right to ownership, the wife shall pay the husband the sum of $50,292.00.
Simultaneously with compliance by the wife with Order 18 above, the husband shall transfer to the wife the whole of his right, title and interest in the Illawarra property.
Simultaneously with compliance by the wife with Order 18 above, the wife shall deliver to the husband a discharge of the mortgage from the Commonwealth Bank secured against the property or alternatively, a release from the mortgagee that releases the husband from any liability pursuant to the mortgage.
In the event that the wife fails to comply with Orders 18 and/or 20 the parties shall forthwith do all acts and things and sign all documents necessary to sell the property by private treaty with a real estate agent at a price to be agreed upon between the parties and failing agreement to be determined by the president of the Real Estate Institute of New South Wales or his nominee.
That the proceeds of sale pursuant to Order 21 be disbursed as follows:
(a)firstly, in payment of the costs of sale including the real estate agents and legal fees;
(b)to discharge the mortgage to the Commonwealth Bank;
(c)in payment of sixty five (65) per cent of the net balance to the wife; and
(d)the remaining thirty five (35) per cent to the husband from which he shall immediately pay the wife $28,384.00.
In the event that the matrimonial home has not been sold by or before a date three (3) months from the date Order 21 becomes operative then the husband and the wife shall make all such arrangements and do all such acts and sign all such documents and pay all monies equally necessary to procure a sale by public auction of the matrimonial home upon the following terms:
(a)The auctioneer shall be a real estate agent;
(b)The reserve price shall, unless agreed upon by the parties, be as proposed by the Auctioneer.
(c)That auction will take place within three months of Order 21 becoming operative.
(d)Each party has the right to bid at the auction.
That the husband shall continue to pay all rates and taxes when they fall due until whichever of the following events first occur:
(a)He complies with Orders 14 and 16; or
(b)The wife exercises her right to the property pursuant to Order 18; or
(c)The completion of the sale in accordance with Order 23.
Unless otherwise specified in these orders:
(a)Each party be solely entitled to the exclusion of the other to all other property and chattels of whatsoever nature and kind in the possession of such party as at the date of these orders and that for this purpose bank accounts are deemed to be in the possession of the person whose name appears on the banks’ record thereof, insurance policies are deemed to be in the possession of the beneficiary thereof and 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 entitlements.
(b)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.
Pursuant to s.90MT(4) the court allocates a base amount of $33,955.00 to the wife out of the husband’s interest in the BHP Billiton Superannuation Fund.
That in accordance with s.90MT(1)(a) whenever a splitable payment becomes payable, the Trustee of the BHP Billiton Superannuation Fund:
(a)Pay to the wife or the wife’s legal personal representatives the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001; and
(b)There is a corresponding reduction in the entitlement the husband would have had in the BHP Billiton Superannuation Fund but for this order.
The trustee of the BHP Billiton Superannuation Fund (“The Trustee”) do all such acts and things and sign all documents as may be necessary to:
(a)Calculate, in accordance with the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001 the amount to be paid to the wife pursuant to Order 27;
(b)Pay the amount whenever the Trustee makes a splittable payment out of the husband’s interest in the BHP Billiton Superannuation Fund.
This order has effect from the operative time which is four (4) business days after service of a sealed copy of these orders upon the Trustee.
The Trustee do all such acts and things and sign all documents as are necessary so that in accordance with the obligations set out under the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001, the Trustee can calculate the amount due and make payment to the wife in accordance with (27) and (28) of these orders.
The wife do all things necessary, including but not limited to, exercising her request pursuant to r.7A o6(1) of the Superannuation Industry (Supervision) Regulations 1994 for the rollover or transfer of the amount due to her out of the husband’s interest in the BHP Biliton Superannuation Fund to a fund of the wife’s choosing in accordance with r.7A.12 of the Superannuation Industry (Supervision) Regulations 1994.
Pursuant to r.14F of the Family Law (Superannuation) Regulations 2001, any payments from the husband’s superannuation interests made after the Trustee has rolled over or transferred the amount due to the wife to a fund of the wife’s choosing are not splitable payments.
Having been accorded procedural fairness, these orders require the Trustee to observe the requirements of the Family Law Act 1975 and the Family Law (Superannuation) Regulations 2001.
In the event that either party fails, refuses or neglects to execute any deed, document or instrument necessary to give effect to these orders, then pursuant to s.106A, a Registrar or Deputy Registrar of the Federal Magistrates Court of Australia is hereby appointed to execute all deeds, documents and instruments in the name of the defaulting party and to do all such acts and things necessary to give validity and operation to such deeds, documents and instruments.
In the event that the husband decides that he will not purchase the wife’s interest in the former matrimonial home he must immediately notify her in writing.
THE COURT FURTHER ORDERS BY CONSENT:
Upon Cate starting school the father shall have contact as follows:
(a)Each alternate weekend from Friday 4 pm to Sunday 4 pm.
(b)Each Wednesday from 3 pm until 7 pm.
(c)Each Monday following a non-contact weekend from 3 pm until 7 pm.
(d)One half of each school holidays, first half with the mother in 2008 and alternate years and first half with the father in 2009 and alternate years.
(e)Fathers Day from 9 am to 5 pm if it is not a contact weekend and if Mothers Day falls on a contact weekend, contact to conclude at 9 am on the Sunday.
(f)Telephone contact on Tuesday and Thursday evenings at any time from 6 pm to 6.30 pm with the father to ring the children.
The parent with whom the children are not staying for the first half of the Christmas holidays to spend from 11 am Christmas Even to 11 am Christmas Day with the children.
The father to collect the children at the commencement of all contact periods and the mother to collect the children at the conclusion of contact, contact changeover places to be agreed.
That within two weeks of the date of these orders the husband shall make available for the wife to collect the following items:-
(a)Refrigerator.
(b)Washing Machine.
(c)Piano.
(d)Dining Room table and chairs.
(e)All Krosno Glassware.
(f)Dryer.
(g)Bookcase.
(h)3 little tables at front entrance.
(i)Crock pot.
(j)Juicer.
The husband and the wife shall make available to each other for the purposes of preparing copies all photographs in their possession relating to the children Emily and Cate.
THE COURT FURTHER ORDERS:
All exhibits tendered in these proceedings shall be returned at the expiration of one calendar month unless an appeal is lodged.
The solicitor who issued any subpoena shall collect that subpoenaed material and returns it to the owner within seven (7) days.
Pursuant to section 65DA(2) of the Family Law Act 1975 the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders are set out in Annexure A and these particulars are included in these orders.
The parties have liberty to apply for further orders and directions in relation to costs on 14 days notice.
All outstanding applications are dismissed..
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT WOLLONGONG |
SYM926 of 2004
| IJW |
Applicant
And
| AMD |
Respondent
REASONS FOR JUDGMENT
These reasons were delivered orally.
Introduction
This is an application for the adjustment of property interests pursuant to s79 of the Family Law Act 1975 and for contact orders.
The contact orders relate to the parties' two children, Emily (not her real name) and Cate (not her real name). It is common ground that both girls should continue to live with their mother and have regular contact with their father. Both parties agree that the existing arrangements will not meet the children's needs for a meaningful relationship with their father long term. Their point of difference is whether overnight contact in 2008 when Cate starts school or as the husband desires much sooner. Both agree that extending contact should take place incrementally.
Concerning financial matters the wife claims contributions favour her 55 per cent as to the husband's 45, while the husband claims 60 per cent compared to the wife’s 40 per cent.
The are at issue concerning:
·The comparative homemaker non-financial contribution.
·The contribution made by the husband's voluntary redundancy from BHP in April 2002.
·Whether a Kennon & Kennon (1997) FLC 92-757 style adjustment should be made in the wife's favour.
·The significance of the husband's greater initial contribution.
Irrespective of the outcome of the s 79(4) process, the parties disagree about the appropriate s.75(2) adjustment. If she succeeds in her application to acquire the husband's interest in the former matrimonial home, the wife claims a 15 per cent adjustment in her favour. Should she fail, she seeks 20 per cent. The percentage differential relates to relocation expenses having to re-establish her self in a new home. Primarily, because he lives in the former matrimonial home and says he has the capacity to buy out the wife's interest, the husband says he should keep the home. He concedes that the wife is entitled to a 10 per cent adjustment, but no more than 15 per cent. Finally, there are relatively minor issues involved in determining the parties' net matrimonial assets.
At the outset I want to congratulate the parties and their lawyers for the effort they have put into this case. The affidavits are thorough, and both cases are well prepared. The parties reached agreement on significant issues, for example with whom the children should primarily reside, and key financial issues. Nonetheless there are instances where I am critical of one or other's frankness and their judgment.
Short history
IJW (“the husband”) was born in 1969.
AMD (“the wife”) was born in 1970.
The parties commenced cohabitation in September 1993. They separated for nine months in 1996. Having resumed cohabitation, they married on 10 January 1998.
The parties’ first child, Emily, was born in 2000.
Their second child, Cate, was born in 2002.
On 18 September 2003 the parties finally separated when the wife and children left the family home. Since then the husband has remained in occupation of it.
On 11 December 2003 the wife obtained an apprehended violence order for her protection from the husband. Without admissions the husband agreed to an apprehended violence order. On the same day the parties entered into interim parenting orders.
1.That the children Emily born in 2000 and Cate born in 2002 reside with the mother who shall have parental responsibility for their day to day care, welfare and development.
2.That the children have contact with their father as follows:
a. Each Monday and Wednesday from 3 pm to 6.30 pm;
b. Each alternate Saturday and Sunday from 10 am to 2 pm;
c. Such further and additional periods as the parties may agree upon.
3.That for the purposes of implementation of contact the father shall collect the children from and return them to the children’s grandmother’s residence in Wollongong on weekends and collect from DB in West Wollongong and return them to their grandmother’s residence on Monday and Wednesday.
4.That the father not consumes alcohol or any other illegal substance for four hours prior to any contact period or during any contact period.
On 10 February 2004 the husband started these proceedings when he filed his application in the Family Court of Australia.
The wife's circumstances and proposals
AMD is 34 years old. She lives with the parties' two children in rented accommodation in Wollongong. The wife is qualified as a primary school teacher, and holds a Master of Education degree. Presently, she works two-and-a-half days each week at a local Primary School. Her financial circumstances are identified in her financial statement.
When Emily starts school in 2006 she will attend the school the wife teaches at. This means that the wife will be able to take her to and from school. Emily has been in daycare three days a week since mid-2001. Currently she attends a local day Care Centre one day each week, and on the other two days she is looked after by DB, a family day carer.
Cate is cared for by DB while the wife works. At least until Cate starts her formal schooling, the wife plans to continue working no more than two-and-a-half days a week.
At paragraph 153 of her affidavit the wife said that upon completion of these proceedings she intended to buy a home within about 10 or 15 minutes drive of the Wollongong CBD. In December 2004 she advised the husband that she wished to buy out his interest in the former matrimonial home. Her change of approach is basically motivated by her belief that such an outcome accords with the children's best interests. Essentially, that the children would benefit from returning to the home. I infer that this is because she believes that here, the children's accommodation needs are well provided for, and it is a place where both girls feel comfortable.
In terms of the future arrangements for the children, at paragraph 157 of her affidavit the wife sets her proposed contact arrangements until 2008. Commencing from 2008, the parties agree about the contact arrangements. The wife claims that the husband is unable to meet the children's needs during overnight before 2008. She says that he is a manipulative and violent person who had a serious substance abuse problem. Notwithstanding that for 15 months he has exercised contact, by and large without complaint concerning his care of the children, she says that he presents an unacceptable risk to the children as a consequence of his personality and difficulty with substance abuse. Her case is that at night time the children are at greater risk of harm than during the day.
The significance of 2008 is that both children will be at school. Thus, it is contended Cate will have sufficient maturity to be able to tell her mother what has occurred during contact. Not only to recount happy events, but also any problems. Before 2008 she says that Cate does not have the maturity to accurately report what has occurred during contact. Thus, if the children are at risk, the wife would need to rely on Emily reporting. The wife does not believe that Emily would tell her if anything happened to Cate. Hence her contention that overnight contact should commence in 2008.
The husband's circumstances and proposals
The husband lives alone in the former matrimonial home. Having completed his Higher School Certificate, in 1987 he commenced a traineeship with BHP as a mechanical engineer. At the end of 1991 he qualified with an Associate Diploma in Mechanical Engineering. In early 1992 he took up a position in BHP as a maintenance supervisor. He was employed in this capacity when the parties commenced cohabitation in September 1993.
Presently, the husband works as a project manager with an engineering consultancy firm. He works full time, on a casual basis, for which he is paid $38 per hour. He pays $410 per fortnight on the mortgage secured against the former matrimonial home. The husband wishes to retain the former matrimonial home and says the house is set up in much the same fashion as when the parties separated. The girls each have their own bedroom, furnished with their beds and toys, and the yard is fenced. I accept that the home provides an entirely suitable environment for contact, including overnight and block periods.
The husband denies the substance of the wife's claim that he was violent, abused alcohol or marijuana. He agrees that when their marriage was failing they had heated disputes, which at times erupted into physical altercations. He claims that he manhandled the wife only to prevent the wife from landing her kicks and blows on him.
The relevant law
The approach to the determination of an application under s.79 is well established by authority. See In the Marriage of Lee Steere and Lee Steere (1985) FLC 91-626; In the Marriage of Ferraro (1993) FLC 92-335;In the Marriage of Clauson (1995) FLC 92-595.
The process involves a multiple part procedure. Firstly, identifying the property, liabilities and financial resources of the parties as at the time of hearing. Secondly, evaluating the contributions made by the parties as defined in s.79(4)(a) to (4)(c) and the effect of any proposed order on the earning capacity of either party.
I must then evaluate the relevant s.75(2) factors and any other order made under the Act affecting a party or child, and any child support under the Child Support (Assessment) 1989 Act that a party to the marriage is to provide or might be liable to provide in the future for a child of the marriage.
In determining what order the court should made under s.79, the court must be satisfied in all the circumstances that it is just and equitable to do so. It is the justice and equity of the actual orders that the court must consider. See Russell & Russell (1976) FLC 90-039.
Assets and Liabilities as at the Date of Hearing
The parties reached agreement as to the value of most assets and liabilities.
I find that the assets, liabilities and financial resources of the parties as at the hearing are as set out below:
| Assets as at the date of hearing | $ |
| The Matrimonial Home (H) (agreed) | 315,000 |
| Cash (H) | 250 |
| Cash (W) | 4,120 |
| Illawarra Credit Union (W) | 1,140 |
| BHP shares (proceeds of sale) (H) | 50,280 |
| IAG shares (W) (agreed) | 4,053 |
| Holden Commodore (W) (agreed) | 13,500 |
| Contents former matrimonial home (H) | 3,000 |
| Automotive tools (H) | 1,500 |
| BHP Billeton Superannuation (H) (agreed) | 57,657 |
| Mercer Superannuation (H) (agreed) | 15,484 |
| C.bus Superannuation (W) (agreed) | 2,000 |
| Catholic Superannuation (W) (agreed) | 10,869 |
| Catholic Superannuation and Retirement Fund (W) (agreed) | 31,664 |
| Proceeds 2003 share sale (H) | 8,000 |
| TOTAL ASSETS | 518,517 |
| Liabilities as at the date of hearing | |
| Commonwealth Bank mortgage (agreed) | 100,000 |
| NETT ASSETS | 418,517 |
There are a number of matters that require explanation.
Applying the Townsend (1995) FLC 92-569 principles, the wife contended that the court would notionally add back proceeds of shares the husband sold during 2003. On 17 July 2003 he sold $625 One Steel shares for $1130, 824 shares in IAG for $2,818, and 1033 BHP shares for $4215. On 7 October 2003 he sold 1163 BHP Billiton shares for $12,640. The husband said that he used these funds to pay household bills, including car registration, tyres, rates, and paying off the parties' credit card. The balance was spent on renovations. There is no doubt that renovations to the former matrimonial home took place at this time. However, the wife says she drew down $8000 from the mortgage to pay for these improvements. Her evidence is that the husband's credit card usually stood at the maximum borrowing limit of about $7000. Her credit card had a maximum borrowing limit of $1000. Therefore, the husband in paying out the credit card debts is likely to have paid out no more than $8000. Probably precisely that amount.
This leaves about $12,000 of the share proceeds to be accounted for. In paragraph 12 of his affidavit, the husband gives a detailed account of improvements to the former matrimonial home, however makes no mention of those he says he paid for in 2003. The improvements he details at paragraph 12, makes no mention of the 2003 improvements at all. In comparison, the wife details those paid for by the draw down from the mortgage. There was no challenge to her evidence concerning the draw down to the mortgage, or that she spent about that sum on household improvements. On balance I am satisfied that the improvements made to the home during 2003 were paid for from the draw down from the mortgage and not from the share proceeds. Thus $8000 is unaccounted for. As a consequence, I will add back $8000 into the asset pool.
I accept that the balance of moneys raised from the share sale was spent as claimed by the husband.
The husband agreed his current Visa card debt and $15,000 loan advanced by his parents all occurred after separation. These are transactions personal to him. I agree that these are not a joint matrimonial liability and should not be taken into account.
Concerning the husband's September 2004 share sales, the full sale proceeds are added back. There is $37,569 remaining[1]. From the proceeds, he has paid his solicitors $10,000 on account of legal fees. Applying the principles in Farnell & Farnell (1996) FLC 92-681, I add back the $10,000 paid on account of legal fees. As to the balance, although he claims this was spent on reasonable living expenses, I was not provided with any documentary evidence corroborating this claim. The husband has a reasonable income and relatively modest living expenses. His income is sufficient to meet his expenses on a continuing basis. While I accept that he has used the sale proceeds for his personal expenses, I am not persuaded that the expenditure was reasonable. As a consequence, I am satisfied that the entire sum raised by the 2004 share proceeds should be notionally added back.
[1] Exhibit A
The wife's legal fees are unpaid. These are her sole responsibility. See Farnell & Farnell (supra).
Section 79 (4) Contributions and other factors
Section 79(4) requires that the court looks at the entirety of the contributions, both financial and non-financial, to the welfare of the family as well as to the acquisition, conservation and improvement of the assets. Contributions are not required to be tied to the acquisition, conservation and improvement of a particular asset, and are to be taken into account generally as contributions in a total sense.
The husband made a greater initial contribution to the matrimonial assets than the wife. The wife had $1000 and personal items of no real value. The husband owned motor vehicles worth about $5000, and a motorbike worth $2000. He had household furniture and his tools of trade. From the time he commenced work with BHP on a full time basis in 1992, he was allocated BHP shares, subject to a BHP employee share loan. At the commencement of cohabitation he owned 1000 BHP shares subject to a loan of $12,510. As he had only been eligible to buy shares during the preceding 12 months, it is likely that the shares were worth only slightly more than the amount due on his share loan.
When the parties commenced cohabitation, the wife was in her final year of university studies and working part time at Grace Brothers. The husband was earning about $60,000 per annum. From cohabitation and throughout the marriage the husband worked full time. His income was always greater than the wife's.
At the start of 1994, the wife commenced full time work as a teacher at a local Primary School. Throughout the marriage she contributed all of her income to joint matrimonial purposes, particularly routine household expenses.
During 1994 the parties started saving for their home. The husband worked regular overtime, and for at least three to four months averaged eight overtime shifts per fortnight. On 5 July 2004 he sold a parcel of BHP shares for $11,655. His salary and share proceeds were put towards the parties's savings. In September 1994 the parties purchased the matrimonial home. They borrowed $131,740 from the Commonwealth Savings Bank in order to complete the purchase. The balance came from their savings. The husband contributed the majority of the shortfall needed to settle sourced from the share proceeds and the overtime.
In 1995 the husband stopped shift work, and the family's income fell somewhat.
In January 1996 the parties separated when the wife left the former matrimonial home. The parties were separated for nine months, during which time the husband remained in the former matrimonial home. He paid all of the outgoings, including the mortgage, without any assistance from the wife. Upon their reconciliation the wife returned to the former matrimonial home.
Emily was born in 2000. The wife stopped paid work shortly prior to her birth. She took approximately eight months unpaid maternity leave. The wife returned to work on a part time basis in 2001. During the three days that the wife was teaching, Emily was in paid childcare. In January 2002 the wife altered her hours of employment to five half days each week.
On 12 April 2002 the husband accepted voluntary redundancy from BHP. He received a total payment of $71,715.83 (after tax). This comprised annual leave of $3823.95, long service leave of $13,775.87, and a redundancy component of $54,116. The entire pay out was paid onto the mortgage, reducing the balance outstanding to approximately $71,750. He immediately drew down $30,000 in order to pay out his employee share loan and a small credit card debt.
Immediately after finishing with BHP, the husband started working with a maintenance service, basically performing his old job in the same mill. After 13 months he resigned and immediately started work with a construction contractor as a project manager, earning approximately $65,000 per annum. He stopped work with the construction contractor in 2003 and immediately took up his present position with an engineering consultancy.
At about the same time the wife resumed part time work, working effectively two-and-a-half to three days a week.
One of the contentious issues concerns the assessment of the parties' contributions to the husband's voluntary redundancy payment. The husband says his redundancy is a contribution made solely by him. Simply put, the redundancy provided for loss of future earnings, and because he immediately started with a new employer in essentially the same position from which he was made redundant, the voluntary redundancy is a large financial contribution he advanced. The wife submits that the voluntary redundancy is a contribution by both parties. Either as a windfall or analogous to the joint venture scenario routinely accepted to superannuation entitlements. The redundancy issue was discussed by Lindenmeyer J in Burke (1993) FLC 92-553. His Honour held:
The commission in the TCR case[2] held that the legal basis for the payment of redundancy pay is twofold. Namely, it is justifiable as compensation for non-transferable credits such as sick leave and long service leave, loss of seniority and loss of the employer's contribution to pension and superannuation, and for the inconvenience and hardship to employees associated with that. It held that redundancy payments do not relate to the need to search for other employment, or to tide over an employee during a period of unemployment, as they are payable whether or not unemployment ensues, and commented that it, 'would be misleading to assume that success in obtaining a new job indicated that an individual made redundant had managed to recover the security built up over years of service in the redundant job'. Consequently, the standard for redundancy entitlements is linked to years of service. In summary, redundancy awards generally provide for a payment of a minimum number of weeks salary, plus a set number of weeks paid per year of service for the qualifying period, and a set maximum amount.
[2] Termination, Change and Redundancy case 1984, 8 Industrial Reports 34:
Further on his Honour held:
“An employer's obligation under an award to provide redundancy pay is part of an employee's indirect remuneration arising from his or her employment. By analogy with a decision of this Court in Hauff and Hauff (1986) FLC 91-747 regarding superannuation entitlements, the circumstances that no direct financial contribution is made by the employee's spouse to the entitlement, and that no actual deprivation is suffered or established by the non-contributor spouse, do not inhibit the conclusion that the non-employee spouse has made a contribution to the redundancy under s 79(4)(c) during the period of the marriage that relates to the relevant period of employment. The extent to which the non-employee spouse has so contributed to the property or resource as the case may be, that is constituted by the right to redundancy pay will be a question of fact to be determined in the ordinary way in each case.”
Thus generally, voluntary redundancy does not involve compensation for future economic loss.
The husband was employed by BHP for six years prior to cohabitation and nine months during the parties' first separation. In total, the husband was employed by BHP for fifteen years during which the parties cohabited for eight. During their cohabitation the wife was overwhelmingly responsible for the family's welfare in her capacity as homemaker and parent, leaving the husband free to further his career. Thus, the wife made a meaningful contribution to the redundancy under s 74(c). Overall, however, the husband's contribution to his redundancy is greater. I make the same findings concerning the annual leave and the long service leave component of his pay out. The nexus between the wife's contribution and the pay out is that by taking overwhelming responsibility for the home and the children, the wife freed the husband to establish him career with BHP.
The parties separated on 18 November 2003. At separation the wife withdrew $3706 from their joint bank account, which moneys she retained. Her financial circumstances were modest and I am satisfied that she has spent those moneys meeting her and the children's reasonable needs. There is no reason for this amount to be notionally added back.
At separation the amount due on the mortgage stood at about $101,000. Since separation the husband has paid the minimum instalments due to the mortgagee, about $410 per fortnight, and all other house outgoings. As he has had the exclusive use of the property, and the amount paid is modest, this contribution does not warrant any adjustment in his favour. Basically it is the price of occupation.
On 29 November 2004, the husband sold 4000 BHP[3] shares purchased through the BHP employee buy back scheme. [4]
[3] Exhibit A
[4] Exhibit A
Comparatively, the husband has made a greater financial contribution.
Concerning s.79(4)(b), both parties made non-financial contributions by virtue of improvements and maintenance to the former matrimonial home. Whilst significant improvements were undertaken by paid contractors, both performed maintenance work around the house and improving the gardens. Neither was challenged during the course of the proceedings about the veracity of evidence that each gave concerning the maintenance of the property. Comparatively, the husband's contribution was greater than the wife's.
The wife's role as the homemaker and parent and to the welfare of the family was significant. From Emily’s birth the wife was primarily responsible for the day to day tasks involved in running the home and caring for the children. She gave these tasks her all. To an extent their roles in the family were complimentary, with the husband accepting primary responsibility for the family's financial security and assisting the wife with the children's care, the wife in turn accepting primary responsibility for the children and day to day housework, contributing financially to the extent that she could. Post separation she has been virtually exclusively responsible for the children's care. Although the husband has contact six times a fortnight, her greater contribution as a homemaker and parent must be properly recognised. See In the Marriage of Ferraro (1993) FLC 92-335.
The wife claims a Kennon & Kennon (1997) FLC 92-757 adjustment in her favour, because she says the husband was a violent alcoholic. He agrees that during the latter part of their marriage he abused the wife, but says both parties engaged in this unfortunate behaviour. He says that he physically restrained the wife while she attacked him, and otherwise denies her domestic violence allegations. I think it useful to read out the relevant passages from the Full Court's decision in Kennon (supra). This is because the wife's affidavit includes considerable irrelevant evidence. I do not know whether she has misunderstood her legal advice, or insisted on material relevant to her “(my) story” but irrelevant to the family law proceedings. My task is to analyse facts that are relevant to the process formulated by parliament. It does not involve authenticating a parties' marital experience unless it is relevant to the judicial process. There are many matters of which the wife complains to which I will make no reference. That is because they are irrelevant to these proceedings. .
In Kennon (supra) the Full Court held:
Put shortly, our view is that where there is a course of violent conduct by one party towards the other during the marriage, which is demonstrated to have had a significant adverse impact upon that party's contributions to the marriage, or put the other way, to have made his or her contributions significantly more arduous than they ought to have been, that is a fact which a Trial Judge is entitled to take into account in assessing the parties' respective contributions within s 79. We prefer this approach to the concept of negative contributions, which is sometimes referred to in this discussion. In the above formulation we have referred only to domestic violence, but for the reasons we have indicated earlier, its application is not limited to that.
And further on:
However, it is important to consider the floodgates argument. That is, these principles which should only apply to exceptional cases may become common coinage in property cases and be used inappropriately as tactical weapons or for personal attacks, and so return this Court to fault or misconduct in property matters, a circumstance which proved so debilitating in the past. In addition, there is the risk of substantial additional time and cost. However, in our view s.79 should encompass the exceptional cases which we described above. It would not be appropriate to exclude them as a matter of policy because of this risk. It is a matter of commonsense for the lawyers involved, and where that may not be sufficient it is a matter for a firm hand by the Court at an early stage when the case appears to raise those issues. It is essential to bear in mind the relatively narrow band of cases to which these considerations apply. To be relevant it would be necessary to show that the conduct occurred during the course of the marriage and had a discernible impact upon the contribution of the other party. It is not directed to conduct which does not have that effect, and of necessity, it does not encompass, as in Ferguson, conduct related to the breakdown of the marriage. Basically, because it would not have had a sufficient duration for this impact to be relevant to contributions.
Perhaps because she was concerned to try and establish a course of conduct, the wife included in her affidavit events such as the husband left the hospital, after Emily’s birth and spent the night partying with his sister. He removed his wedding ring the day after they were married. This style of evidence was always irrelevant. There are pages of arguments and this style of evidence. Its inclusion in her affidavit is, with respect, to her and those advising her, inappropriate and regrettable. It is precisely this style of evidence that the Full Court in Kennon said ought not to be given.
In her affidavit the wife describes a number of physical attacks upon her by the husband. She says[5] :
[5] Paragraph 69
In the last 12 months of their relationship he became physically abusive and violent.
Thereafter from paragraph 69 to 105 inclusive, the wife recounts the last year of the marriage. Although the evidence contained in many of these paragraphs may contribute to "her story", they have no relevance to these proceedings. For example, she describes as emotionally abusive the husband's refusal to wear his wedding ring. Although obviously upsetting to her, even using the broadest definition of abuse, her epithet is inappropriate. She seems to suggest that his refusal to join the family's evening meal, attend larger family outings and complaints about her housekeeping, influence her s.79(4)(c) and Kennon argument. His belittling remarks outlined in pars 85, 86, 87, 90, and general disinclination to communicate with are included to suggest that her contributions were made in arduous circumstances. With respect to the wife and those advising her, while I accept she was unhappy with these aspects of the husband's behaviour, the behaviour complained of does not warrant a Kennon adjustment in her favour. It is precisely this style of evidence that the Full Court in Kennon was concerned to discourage when it referred to the floodgates argument.
The husband challenged the wife’s evidence about his violence. The incidents described took place within a confined period. Even if I accept the wife's evidence, it is difficult to discern from her evidence that there was a discernible impact upon her capacity to contribute to the family in the fashion described by the Full Court in Kennon.
The wife also claims that her contribution as a homemaker and parent was made in arduous circumstances because the husband abused alcohol and used cannabis. She says that throughout their marriage he went to the local Leagues Club five to six nights a week, and on Saturdays was played in the club's snooker competition. When employed by BHP the husband left the home at about 7 am, sometimes later, and was usually home by 4 pm. Frequently he brought work home, and occasionally worked on weekends. With the construction company he worked 10 to 12 hours a day and during November 2003 was required to remain in Sydney overnight on a number of occasions.
Before the parties commenced cohabitation the husband grew cannabis in a cupboard in his home. There is no evidence that he continued to do so after the parties started to live together. Given the range and volume of complaints the wife makes about the husband, I infer that because she does not allege this, he did not. After the parties purchased the former matrimonial home, the husband kept a bong in a shed where he had a lock up cupboard for his cannabis. The wife claims that the husband used cannabis daily. He denies her allegations. The husband appeared most uncomfortable when dealing with this issue and I prefer the wife’s evidence on this issue. I accept her evidence that cannabis made him slower and his conversation was tedious. However, this does not enhance her Kennon claim, or does the husband's alcohol use. I have no doubt that the wife exaggerated the extent of the husband's alcohol abuse. For example, claiming that he was twice convicted of driving whilst under the influence of alcohol. He was convicted once.
It seemed to me that the wife tried to establish that five to six nights each week the husband visited the local Leagues Club where he always drank to excess and leaving her alone with the children. Yet she also says he arrived home in the early evening, and that although present, preferred not to join the family meal. This suggests that the husband's attendances at the club were usually brief, and did not materially affect the wife's capacity as homemaker and parent. Undoubtedly, there were occasions where he stayed longer days where he came home inebriated. On about six occasions the wife cleaned up after the husband had been sick. Although awful, the conduct and its impact do not warrant further adjustment in her favour.
Comparatively the wife made a significantly greater contribution as a home maker and parent and to the welfare of the family.
The orders do not affect either party's earning capacity.
Concerning child support, from the date of separation until 29 August 2004, the husband paid $9942 child support. In their respective financial statements both parties say that the husband is paying $350 per week child support. This amount appears to have been paid pursuant to a child support assessment. Because the husband was not in paid employment for over three weeks at Christmas time, the Child Support Agency issued him with a nil assessment. He has been re-assessed and is now liable to pay child support at $823 per month.
Pearce & Pearce (1982) FLC 91-276 requires the court to assess the significance of the parties' respective contribution. As I have already found, the parties appear to have predominantly divided their responsibilities in this marriage along traditional lines. The wife was primarily responsible for the home and children, and contributed her income from her employment when she was both in full time and part time employment.
The husband was freed, by the wife's commitment to the children, to pursue his career. At all stages through the marriage he earned significantly more than the wife did. Although he retained some of his funds for personal expenses, he contributed the overall majority of his income, including his voluntary redundancy, to joint matrimonial purposes. Just as the wife was the mainstay of the family in terms of keeping the house and children running day by day, the husband was the financial mainstay for the family in providing for its income.
He made a greater initial contribution than the wife did, the earlier years of his employment with BHP and during the first separation influenced significantly the quantum of his contribution to the voluntary redundancy. It is this extra contribution to the voluntary redundancy that tips the overall contributions in his favour.
I am satisfied that as at the date of hearing the husband's contributions are 52 per cent as compared to the wife's 48 per cent.
Section 75 (2) Factors
I turn now to consider the relevant s 75(2) factors.
The husband is 35 years old and in good health. The wife is 34 years old and also in good health. The wife has minor lower back problems which do not appear to limit her capacity for employment and are not sufficient to interfere with her capacity to play competition tennis.
Subject only to the following the parties earn the income identified in their financial statements. In her financial statement the wife says she has an income of $1115 per week. This comprises $615 salary, $2 IAG dividends, $4.02 rental assistance from Centrelink, $134.55 parenting payment from Centrelink, and $350 per week child support. The husband's child support liability was recently reduced. Effective from 7 January 2005, his monthly child support payments fell to $823 per month. This means that the wife's weekly income is in the vicinity of about $900 to $950 per week. The only change to the husband's income is, that having sold his BHP shares; he no longer receives a dividend. His weekly income is $1520. The husband earns considerably more than the wife. His future employment is relatively secure and it is likely that he will continue to earn more than the wife can for many years. Although she is well qualified in her chosen profession, she has taken career breaks and is not as senior in the teaching profession as the husband is in mechanical engineering.
In the Marriage of Clauson (1995) FLC 92-595 the Full Court of the Family Court held:
“In addition, it should not be forgotten that the payment of child support in no way compensates the custodial parent for the loss of career opportunity, lack of employment mobility, and the restriction and independent lifestyle which the obligation to care for children usually entails.”
These observations apply to this case. The children are nearly five and three respectively. The wife will have their primary care for many years to come. There is no doubt that even should she return to work on a full time basis. When Cate starts school, their care will have the impact referred to in Clauson. The wife's future care of the children warrants a Clauson style adjustment in her favour.
Section 75(2)(d) focuses on the financial needs of the parties, including their financial commitments supporting the children. There is a distinction between the s 75(2)(d) adjustment and the Clauson adjustment to which I have already made reference. The wife uses virtually all of her income supporting her and the children. Although her circumstances will improve when she resumes full time work, it will always be the case that she will expend more of her income proportionally on the children and daily necessary expenses than the husband will. The husband has a greater income and his day to day necessary expenses are less than the wife's. This warrants an adjustment in the wife's favour.
Other than the children, neither party has the responsibility to support any other person.
Neither party contends for an adjustment under subsections (e) to (m) inclusive.
I have already made findings in relation to the outcome of s 79(4). Pursuant to those findings, the wife is entitled to assets of about $200,888, and the husband will have assets of about $217,628. I have already addressed superannuation. The wife argues the court should refuse the husband's application to split his superannuation. The effect would be to leave the wife with most of the available assets, whereas a significant portion of the husband’s s.79 entitlement would vest in approximately 20 years. If persuaded that such an outcome is proper, it is likely to warrant an adjustment in the husband's favour. Later in these reasons I will explain why I have not taken the course pressed by the wife. The second issue concerns what adjustment is appropriate by virtue of the order concerning disposition of the former matrimonial home. If she acquires the husband's interest in the former matrimonial home, the wife says the husband should receive a five per cent adjustment in his favour. Five per cent of $418,000 is $21,000. Whoever secures the home, both parties are likely to incur mortgage costs, re-financing or loan establishment fees. The material difference between the two scenarios is stamp duty payable on purchase of a new property and perhaps removalist expenses. Given the parties financial circumstances, $21,000 seems high. Later in these reasons I will explain why the husband shall retain the former matrimonial home. It is proper that in consequence the wife has a small adjustment in her favour because she, unlike the husband, will have additional housing set up costs.
I have already taken into account the child support paid by the husband post-separation. He will continue to pay child support for many years to come. As I have found, he presently pays $823 per month. The many years of child support ahead warrant an adjustment in his favour.
The only other matters requiring consideration arise pursuant to subsection (o). The wife contends that the court find waste applying the principles in Kowaliw (1981) FLC 91-092. These principles are well known and do not need restating. The wife alleges that the husband has wasted significant sums on alcohol, marijuana and on his personal expenses at the club. The claim with respect to cannabis seemed to focus on the fact that cannabis is an illegal drug. Kowaliw does not establish a principle of general application that money spent on hobbies, personal pleasure or illegally amounts to waste. The wife says that the husband's credit cards usually stood at about their limit. The credit card statements are not in evidence. If the wife wished to persuade me that the husband's general credit card expenditure was for alcohol or cash advances so that he could buy drugs, she needed to produce corroborative evidence to that effect. This could have been done by subpoena. The wife's evidence in some instances did not do her great credit. I am not satisfied that in this instance I should accept her uncorroborated evidence, particularly on a matter which was amenable to reasonably precise corroboration in the face of the husband's denials. I accept that the husband spent money on alcohol and cannabis. The amounts spent are not so great that they are wanton. If the husband had other hobbies and spent money, for example sports activities which required expensive equipment or registration fees, it is unlikely that I would have been persuaded to treat those expenditures as waste. There is no suggestion on the husband's part that moneys the wife spent on her hobbies could be treated as waste. In most families parties are able to divert sums of money to their own hobbies and recreation. Kowaliw does not suggest that there is a rule of general application that merely because sums of money are spent on a party's personal hobbies or interests, that those sums are tantamount to waste. The wife has not made out this aspect of her case.
The wife's mother assisted from time to time caring for the children while the wife was studying, and the husband unavailable. This contribution appears to have been modest and does not warrant an adjustment in the wife's favour.
Having regard to all of the s 75(2) factors, I find it is appropriate that there should be an adjustment in the wife's favour of 17 per cent. This outcome reflects the cumulative outcome of the findings I have made pursuant to s.75(2). See Tomasseti (2002) FLC 93-032. Any lesser adjustment, given the size of the asset pool, would be notional.
Section 79(2) is this outcome just and equitable?
Because the court must consider the actual orders, not just the percentage distribution under s 79(2), justice and equity in cases like this requires that the court stands back and looks carefully at the outcome of the s 79(4) and s 79(2) process. It is at this stage that the court considers the actual structure of the orders.
I will not repeat the findings made thus far. There are key findings that lead to my comfortable satisfaction that an outcome favourable to the wife of 65 per cent compared to the husband's entitlement of 35 per cent is just and equitable. These include that the children will continue to live with the wife, and she will be overwhelmingly responsible for their day to day care. Although the husband will pay considerable child support, payment of child support does not compensate the wife for the financial impact upon her of many years of future childcare. The husband has a well established career which produces him a good income. It is unlikely that the wife will ever earn a comparable income. In the years ahead, the husband's financial security, because of his greater income and earning capacity, is far more assured.
There are two final issues for consideration in the financial proceedings. The first issue concerns whether there should be an order made to split superannuation. The husband's solicitors gave notice to the trustee of the BHP Billiton Superannuation Fund. The court can afford the trustee procedural fairness and thus any superannuation splitting orders are able to be implemented. The husband contends that the purpose of the superannuation splitting legislation was to in effect establish a level playing field between spouses. Thus, the spectre where one party - usually the husband - has the benefit of superannuation built up over many years compared to a wife left without adequate superannuation could be avoided. Through superannuation splitting, the parties' retirement years could be provided for if both have a proper share of any superannuation accrued at the end of the marriage. These principles apply here. The wife will not return to full time employment for a number of years. Although she will earn a reasonable income, her income will never be in the same vicinity as that earned by the husband. In order that she has the best chance for a reasonable retirement, it is appropriate that the superannuation benefits are split. Rarely is it reasonable for one party to take virtually all of their property entitlements in superannuation, while the other party receives a disproportionate share of the immediately available assets. I am satisfied that the circumstance of this case, justice and equity requires an equitable approach when dealing with superannuation.
The only remaining issue is ownership of the home. Both parties want it. At separation and for a considerable time afterwards, both parties wished to sell the home and share its proceeds. By about September 2004 the husband informed the wife that notwithstanding the terms of his amended application, he wanted to keep the former matrimonial home. In about December 2004 the wife shifted her stance and said she also wanted to keep the home. Not surprisingly, this was a highly contentious issue. The husband's counsel tried to cross-examine the wife concerning her attempt to raise money to retain the home, and her borrowing capacity. Unfortunately, the manner with which the wife responded does her no credit. She cavilled with relatively simple propositions and pretended not to understand words such as "acquire." Bearing in mind her tertiary qualifications and profession, it became clear that the wife was not willing address this issue with the husband's counsel.
On 25 October 2004 the wife attended the Commonwealth Bank in Wollongong to explore her financial options, particularly concerning her borrowing capacity. Eventually, she agreed that she came away with an idea about how much she could afford to borrow. Notwithstanding relevant questions aimed at revealing this information, the wife summarised her position thus: “As at today, I do not know what my borrowing capacity is.” She said that all she had done was nut out a possible scenario. The wife refused to say what amount she would contemplate borrowing. The wife's counsel tried to retrieve his client's position during re-examination, and tendered documents from the Commonwealth Bank. Notwithstanding the tendered documents, his difficulty was his client's insistence, during cross-examination that she did not know how much she could or was prepared to borrow. During submissions I was asked to infer that the wife has the capacity to borrow sufficient funds to pay out the husband. The husband presently pays $410 per fortnight on a $100,000 mortgage. The wife pays $250 per week rent. Thus it is submitted that the wife has the capacity to meet reasonably anticipated mortgage payments. Of course, she would also need to be able to pay rates, insurance, and maintain the former matrimonial home, expenses which as a tenant she does not pay. If the wife had not so clearly attempted to defeat reasonable questions during cross-examination, and said that she did not know her borrowing capacity, which it was clear did not mean that she could only answer the question if she had specific bank approval, the inference pressed by her counsel may have been drawn. As the suggested inference so clearly conflicts with the totality of her evidence, I decline to draw it.
By comparison, I am satisfied that the husband has the capacity to pay the wife's s.79 entitlement and pay increased mortgage instalments. His child support payments have fallen slightly, and he has maintained the property and its outgoings for fifteen months. In order to acquire the wife's interest in the home the husband will need to pay her more than she will need to pay him. However, their incomes differ substantially and the husband, with respect to the wife, has more runs on the board in terms of maintaining the home and its outgoings.
There is no evidence that the former matrimonial home has any intrinsic value for either party that should influence the outcome. Both parties enjoy the home and wish to keep it. Both appear to have an emotional attachment to it. The husband agrees with the wife that the children would benefit from returning to their home. There is no suggestion, however, that their present accommodation is inadequate or that the wife will not acquire appropriate accommodation with her s.79 entitlement. She plans to remain in the Illawarra area, hopefully close by to her and the children's schools. Although not a weighty consideration, the children's contact with the husband is likely to be enhanced if they are in familiar and comfortable surroundings. Overnight contact will shortly commence, and contact that occurs in the former matrimonial home is likely to maximise its success.
The Full Court dealt with a similar issue in Phillips v Phillips [1998] FamCA 1557 (unreported). In Phillips the factor that seemed to tip the outcome in the wife's favour is that for two years post separation she and the children continued to reside in the former matrimonial home. There the wife only needed an additional $10,000 to acquire the husband's interest in the home on top of that ordered by the outcome of the s 79(4) and 75(2) factors. See also Myethall (1997) FLC 90-273.
The effect of the orders means that the wife will receive a total entitlement of $272, 036.05, and the husband will receive $146,840.95. The wife's assets comprise cash at bank, money in the Illawarra Credit Union, IAG shares, her Commodore and superannuation, the total of which is $65,356. So that both parties are treated equally, I will deal with superannuation separately. Excluding superannuation, the net asset pool is $300,843, 65 per cent of which is $195,547.95 and 35 per cent of which is $105,295. Excluding her superannuation, the wife's assets total $22,813. Therefore the husband must pay her $172,734.95.
The parties' superannuation totals $117,674. The wife has $42,533 superannuation and the husband has $75,141. Sixty five per cent of $117,674 is $76,488.10. Rounded out, this means the husband's BHP superannuation will be split using a base amount of $33,955.10. This is the amount by which the trustee will be ordered to reduce the husband's interest in the BHP Billiton fund and pay to the wife.
The husband will have 10 weeks within which to buy out the wife's interest in the home. If he cannot afford to pay the wife the money to which she is entitled, and provide her with a release or a discharge of the mortgage, then the wife will have the opportunity to acquire the husband's interest in the home. Excluding superannuation, and the home, the husband has assets comprising cash, the moneys notionally added back, his tools and household contents, worth $55,003. Of the assets excluding superannuation, he is entitled to $105,295. Therefore, if the wife exercises her option to acquire the husband's interest in the home in the face of the husband’s default, she must pay him $50,292. She also will have 10 weeks within which to do so. Ten weeks for is sufficient time for both parties to arrange their financial circumstances and complete the arrangements to pay out the other. The other party is entitled to payment within a reasonable and not unduly prolonged period of time.
Whoever has the former matrimonial home must provide the other with a release from the mortgagee, or pay it out. To the extent possible it is important to end the parties' financial relationship. See s.81.
If the wife and husband both fail to acquire the other's interest in the home, the home must be sold on a sale. Although the home has an agreed value, its net proceeds cannot be known. Excluding the home and superannuation, the total asset pool is $77,843, of which the husband has $55,030, and the wife the balance. Therefore, from his share of the sale proceeds, the husband must pay the wife an amount so that she receives 65 per cent of the total assets. The adjusting amount is $50,597 being her 65 per cent share of $77,843, less the $22,213 that she has, which is $28,384.95.
Until these orders are complied with in the sense of one or other of the parties pays out the other, or the settlement of the sale of the former matrimonial home, the husband must pay all outgoings associated with the home and keep it in good repair. This is, in effect the price of his occupation. If the husband realises that he is unable to acquire the wife's interest in the former matrimonial home, he must immediately notify the wife. From that time the wife will have ten weeks within which to acquire the husband's interest. For certainty, notice must be given in writing.
Parenting issues
In deciding contact arrangements and other parenting orders that will promote the best interest of a particular child, the court must consider various matters set out in s.68F(2). Its subsections comprise a list of matters that must be considered to the extent that each is relevant to the particular case.
Paragraph (l) permits the court to take into account any other fact or circumstance that the court thinks is relevant. This insures that the infinite variety of individual children's circumstances can be addressed. See B and B Family Law Reform Act.
Section 60B(2)(b) and the objects has particular relevance in these proceedings. It provides, in effect, that children have a right of contact on a regular basis with both their parents and other people significant to their care, welfare and development. Subparagraph (b) refers to the right of contact on a regular basis. Fundamentally, it emphasises the desirability of contact. Regular contact carries with it a clear understanding that contact should be as frequent as is appropriate, and by the various means which are considered to be in the children's best interests. At the end of the day the court is charged to ensure that its decision concerning children promotes their best interests.
Determining the children’s best interests
The children will continue to reside with their mother. But for a period of three weeks immediately following separation, the children have had regular contact with their father. The structure of this contact is set out in the orders to which I have earlier made reference. The parties agree that prior to separation the wife was primarily responsible for the children's care. The husband helped out as much as he could, but the demands upon his time limited the time he had with the children.
In his affidavit the husband gives a detailed account of his involvement in the children's lives. He gives a clear and cogent account of concerned and capable involvement in the children's care when he was available. He assisted the wife while she was studying, and cared for the children when she was visiting friends or enjoying her own recreational activities. These occasions of exclusive care were not lengthy. His involvement in the children's care was generally overseen by the wife and rarely for more than a few hours at a time.
Since separation, the husband’s care of the children has become more structured. During contact he has been responsible for the children to an extent that he never consistently provided previously. Both parties' agree that since separation contact has gone well. Contact has been structured around daytime visits, and has not included any overnight contact. This approach has been driven by two factors. Firstly, Cate’s age, and secondly the wife’s concerns about the husband’s capacity to provide for the children. She says his capacity is limited by virtue of his alcohol abuse, cannabis use, his angry outbursts and propensity to violence. She submits, in effect, that when the husband abuses alcohol, uses cannabis and exposes the children to angry outbursts, he not only provides a poor role model but also exposes them to risk. The risk is heightened, she submits, because the children are young.
The wife says that the husband often found work stressful and that by the end of a working week his tolerance was stretched and his behaviour around the house was generally volatile. This behaviour was fairly frequent in the 12 months leading up to their separation. The wife alleges that Emily saw the husband abuse her, both physically and verbally. If I was satisfied that since the parties separated the husband was abusing alcohol, cannabis, or behaving in an abusive manner towards the wife whether or not in the children's presence, then I agree that presently overnight contact would be inappropriate. There is no evidence which indicates that he is doing so. To the contrary the husband has exercised contact regularly. He has not missed contact, because he has been hung over, forgotten or stressed because of work. For 15 months he has exercised contact, attended to the children's needs during contact, turned up for contact at the appointed time, and returned the children without incident.
The frequency of contact and the period of time over which it has been exercised satisfy me that the risks that concern the wife are at most modest. They are not so significant or compelling that the court should stand in the way of the children's opportunity to enjoy a more meaningful relationship with their father. It is important that parents are given the opportunity to parent. Parenting is far more significant than merely babysitting. Children's relationships with their parents are enhanced, not only by having a pleasurable time with them, but also in having their parent exercise parental authority and responsibility for the child. That authority and responsibility which is one of the distinguishing features of the parent/child relationship.
Emily and Cate are at ages where both will benefit from the husband’s more substantial involvement in their lives. Provided contact develops at a pace which takes into account Cate’s age, there is every reason to believe that contact will work successfully.
To reassure the wife, I will make an order that restrains the husband from alcohol use or cannabis use for 12 hours prior to or during contact. I do not consider that he will use either during contact. However, with this order in place, the wife may feel more reassured that the children's needs will be adequately met during contact.
Both of the children attend daycare or preschool. Cate will shortly start preschool. Being cared for by others, including extended family members, usually means children mature at a slightly greater pace. Both of these children are developing well, at least in accordance with their chronological age. I am satisfied that the children are ready to start overnight contact shortly.
During the hearing I discussed an approach to contact which complemented the existing pattern for contact, slowly extending the children's hours with their father, but in a way that was not too challenging for Cate. Both parties thought this approach is desirable.
Initially contact will take place on an overnight basis on the first Friday of each month starting at 6 pm on the Friday and finishing at 10 am Saturday. This will be in addition to the existing contact. When Cate is three, weekend contact will extend so that Friday contact will cease and alternate weekend contact will start at 12 noon Saturday and continue until 3 pm Sunday. After six occasions of this type of alternate weekend contact, it will start at 10 am on Saturday.
Once Emily starts school, Monday afternoon contact will change slightly and will become consistent with the arrangements the parties agree should operate from 2008. Too much disruption during the school week is difficult for young children. The approach that the parties suggest for 2008, which they agree addresses the children's needs once they start school, is appropriate from the time Emily starts school. Contact will develop so that by the start of school term in 2006 weekend contact will start at 4 pm Friday and continue till 4 pm Sunday. From that point, during school holidays, weekend contact will be extended so that it lasts for five days and four nights. This strikes a balance between Emily's ability to have longer periods of contact with her father, which at that age would ordinarily be half of each school holiday period, and Cate's need not to be away from her primary carer for lengthy periods. Commencing 2007, the children will have one week of each school holiday period with their father. By the time Emily and Cate are both at school there it will become half of each school holiday period contact.
I have made machinery orders concerning definitions of school holidays, and made provisions for special occasion contact, for example, on public holidays. At the end of the proceedings I discussed with counsel a range of standard parenting orders which the parties agreed would be made. There are orders providing for contact on birthdays. For obvious reasons Mother's Day should be with the wife and Father's Day with the husband. At Christmas time there will be a sharing of Christmas nights and Christmas mornings. This a special time for most parents and at these children's age both parties are entitled to share in the joy of the children's excitement. I have alternated the arrangements for Christmas Eve and Christmas morning contact annually.
These orders, I am satisfied, are just and equitable within the meaning of s 79(2) Insofar as they concern the children the orders are in the children's best interests.
Costs
The only other matter that requires consideration is the husband's application that the wife pays his costs associated with the re-listing of the matter last Wednesday and Friday morning.
Judgment having been reserved on Tuesday to be delivered on Thursday morning, the wife's counsel approached the court seeking to make additional submissions. I make no criticism of counsel for any oversight on the Tuesday. The court list was full, and both counsel had dealt with very contentious issues during the day.
The additional submissions, however, involve the husband in additional costs. The sum sought, however, is too high. The husband's legal advisers had no notice of the matter being re-listed on the Wednesday, and it was fortuitous that the husband's counsel was present in another hearing. I do not see in those circumstances where the matter was before me for only a matter of minutes that the wife should pay any costs associated with that appearance.
There was minor correspondence between the parties' solicitors on the Wednesday and Thursday, before the matter was dealt with by submissions on the Friday morning. The husband's counsel was briefed to appear in other hearings before the court that day and while I am satisfied that some costs should be paid, they are reduced by virtue of his appearance in other matters.
Doing the best that I can I have struck a figure of an additional $350 as the appropriate costs associated with the re-listing. The wife's solicitor and counsel have indicated that they will meet these costs, not their client. I will note that this is the course that they tend to take. Because their concession was proffered, not sought the orders do not include reference to the amount. If there is a problem in the husband receiving the $350, he may re-list this matter by arrangement with my associate.
For these reasons I make the orders at the start of this judgment.
I certify that the preceding one hundred and twenty-four (124) paragraphs are a true copy of the reasons for judgment of Ryan FM
Associate: S. Mashman
Date: 18 April 2005
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