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Family law judgments

Every Issue

Cite as: Jan/Feb 2015 89 (1/2) LIJ, p.60

Property

Treatment of redundancy payment of $459,199 as worth $300,000 due to “taxation implications” was in error

In Diggelen & Diggelen [2014] FamCAFC 160 (1 September 2014) the Full Court (Strickland, Ainslie-Wallace & Ryan JJ) considered Johnston J’s decision to treat a $459,199 payment the husband had received from his employer for “accrued annual leave, long service leave, severance payment and ETP” (at [25]) as having a value of $300,000. Johnson J said at [27]:

“. . . it was submitted [for] the wife that there should be added back . . . the $469,199 (sic) which [the husband] received as his redundancy payment . . . To do so would ignore taxation implications. It must be the case that some of this payment was on account of leave. There was no suggestion that the money paid was tax free. This is a most unsatisfactory aspect of the case. Doing the best I can in difficult circumstances I propose to allow $300,000 of this payment to be added back to the pool of property”.

In remitting the case for re-hearing, the Full Court said at [34]:

“. . . there was no evidentiary basis on which his Honour could have found . . . that some part of the redundancy payment . . . was subject to tax . . . and ought to be brought into account at a lesser amount than that received. We also observe that his Honour’s conclusion is at odds with . . . ss12-85 of Schedule 1 Taxation Administration Act 1953 (Cth) by reason of which the husband’s employer was obliged to retain PAYG payments on the redundancy/termination of employment payment”.

Property

Husband loses appeal where wife won $6 million after separation – Parties “leading separate lives”

In Eufrosin & Eufrosin [2014] FamCAFC 191 (2 October 2014) the Full Court (Thackray, Murphy & Aldridge JJ) heard the husband’s appeal against a property order made where, after a 20 year marriage, the wife won $6 million six months after separation. Stevenson J had adopted a two pools approach, found the husband had made no contribution to the lottery pool, divided the $2 million non-lottery pool equally and made a s75(2) adjustment in favour of the husband of $500,000. Stevenson J said that the wife had four sources of funds available when she bought the winning ticket and that at [12] “it would be ‘pure sophistry’ to credit the husband with any contribution to the funds used to purchase the ticket”. The Full Court said at [7]-[8]:

“The husband contends that the wife used funds from a business that had been run primarily by him . . . during . . . the marital relationship to purchase the lottery ticket. Even if that is accepted, the argument which proceeds from it ignores the reality of the parties’ post-separation lives. The parties had put in place a system whereby regular withdrawals of funds were made by each of them from what was formerly a joint asset, and those funds were applied by each of the parties individually to purposes wholly unconnected with the former marital relationship.

“At the time the wife purchased the ticket . . . the parties had commenced the process of leading ‘separate lives’, including separate financial lives. That crucial matter, the importance of which is reinforced by the High Court in Stanford [(2012) 247 CLR 10], renders reference to the sources of the funds or nomenclature such as ‘joint funds’ or ‘matrimonial property’ unhelpful in assessing what is just and equitable”.

In dismissing the appeal the Full Court said at [11]:

“. . . What is relevant . . . is the nature of the parties’ relationship at the time the lottery ticket was purchased. In our view, the authorities . . . [and] what was said by the High Court in Stanford regarding the ‘common use’ of property [are] sufficient to dispose of the husband’s contention that her Honour erred in failing to find that he contributed to the wife’s lottery win. At the time the wife purchased the ticket, regardless of the source of the funds, the ‘joint endeavour’ that had been the parties’ marriage had dissolved; there was no longer a ‘common use’ of property. Rather, the parties were applying funds for their respective individual purposes”.

Children

Choice of supervisor of father – Court prefers commercial agency to father’s fiancée

In Joelson & Joelson [2014] FamCA 788 (19 September 2014) the father had a history of being prescribed anti-depressant medication, had threatened suicide and was the subject of a police report expressing “genuine fears that [he] will snap and hurt himself and anyone he holds responsible for the demise of his relationship”. A single expert psychiatrist (Dr R) reported at [97] being “dissatisfied with the progress made by the father in appreciating his underlying illness and the steps he needed to undertake . . . to manage his illness”. Dr R had recommended that the father’s time occur while his fiancée (Ms Z) was at home but later recanted after Ms Z misled Dr R as to her experience of abuse. While accepting Dr R’s recommendation for a review before any progression from supervised time, Loughnan J decided at [200] that it was “safer” to make a final order for indefinite supervision (at [198]-[199]) in which it was noted that any application (after 12 months) for removal of the supervision was to be supported by a mental health assessment by the father’s treating psychiatrist.

Children

Unilateral relocation – Morgan & Miles distinguished – Recovery application dismissed

In Geddes & Toomey [2014] FCCA 1814 (13 August 2014) Judge Harland dismissed the father’s recovery application where (at [4]) the mother had “again moved” unilaterally from Darwin to Queensland with the children (aged 10 and 9). The father, a Darwin resident, had the children during school holidays under a parenting order and informally about once a month. The Court at [18] distinguished Morgan & Miles [2007] FamCA1230 (relied on by the husband), saying that “at the time of the unilateral relocation in Morgan & Miles the father was seeing the children on a week about basis. In the current case . . . the father was seeing the children once a month”. Upon considering s60CC factors Judge Harland said at [20] that it was “clear that the children have a meaningful relationship with both their parents and that this will continue regardless of whether the children are in Darwin or Queensland”. The Court also gave weight at [26] to evidence that “the father pays no child support currently and that the orders . . . for [his] time during school holidays will not be affected by the move”.


ROBERT GLADE-WRIGHT, a former barrister and accredited family law specialist, is the founder of The Family Law Book, a looseleaf and online service: see www.thefamilylawbook.com.au. He is assisted by family lawyer Craig Nicol. The full text of these judgments can be found at www.austlii.edu.au. The numbers in square brackets in the text refer to the paragraph numbers in the judgment.

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