ARTHUR & ARTHUR

[2015] FamCA 403

FAMILY COURT OF AUSTRALIA

ARTHUR & ARTHUR [2015] FamCA 403

FAMILY LAW – INTERIM PROPERTY – Where the wife seeks the husband pay to her the sum of $100,000 to meet costs of litigation – Where the husband asserts there are no liquid funds from which to pay – Where this assertion is rejected –Where the wife has no income – Where husband has unfettered access to the bulk of the matrimonial assets worth about $8 million – Where the wife’s application is appropriate and the order can be made adopting a conservative approach – Order that the husband pay the amount sought by the wife by way of interim property settlement.

FAMILY LAW – SPOUSAL MAINTENANCE – Where the wife seeks payment of weekly spousal maintenance – Where the wife has the primary care of the child – Where the wife has established a need and that need is found to be a reasonable weekly amount – Where the husband is found to have reasonable capacity to meet the wife’s need – Order made as sought by the wife.

FAMILY LAW – CHILD SUPPORT – Where the wife seeks departure from the current assessment – Where there are grounds for departure – Where the wife has established her needs for the child – Orders made for periodic and non-periodic child support payable by the husband.

Child Support (Assessment) Act 1989 (Cth)

Family Law Act 1975 (Cth)

Redman and Redman (1987) FLC 91-805
Strahan & Strahan (2011) FLC 93-466

Williamson and Williamson (1978) FLC 90-505

APPLICANT: Ms Arthur

RESPONDENT: Mr Arthur

FILE NUMBER: SYC 2084 of 2015

DATE DELIVERED: 28 May 2015

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE: 18 May 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Kearney, SC

SOLICITOR FOR THE APPLICANT: Newnhams Solicitors

COUNSEL FOR THE RESPONDENT: Mr Johnston

SOLICITOR FOR THE RESPONDENT: John R Quinn & Co

Orders

1. Within 28 days the husband pay to the wife the sum of $100,000 by way of interim property settlement. I note that it will be a matter for the trial judge at the final hearing to determine how the payment made pursuant to this order shall be taken into account.

2. Pending further order, the husband pay to the wife by way of spousal maintenance, an amount of $2,250 per week, with the first payment to be made to the wife 7 days from the date of these orders and weekly thereafter.

3. Pending further order, pursuant to s 117 of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”) there be a departure from the administrative assessment of child support payable by the husband to the wife for B (“the child”), born … 2007, for the period from the date of these orders in the amount of $745 per week.

4. Pending further order and pursuant to s 124 of the Assessment Act the husband shall provide child support to the wife for the child by way of payment of:

   4.1.All education fees, including but not limited to, private school fees, French tutor fees, music tutor fees, excursion fees, incidental sporting costs including but not limited to swimming, the cost of all school books, school uniforms and extra-curricular activities, such payments to be made within 7 days of the wife providing an invoice or receipt to the husband (or within such other time period as allowed by the provider of the service); and,

   4.2.All gap medical, dental, optical, orthodontic, hospital, pharmaceutical, physiotherapy, podiatry, speech therapy and other medical expenses, such payments to be made within 7 days of the wife providing an invoice or receipt to the husband (or within such other time period as allowed by the provider of the service).

IT IS NOTED that publication of this judgment by this Court under the pseudonym Arthur & Arthur has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 2084 of 2015

Ms Arthur

Applicant

And

Mr Arthur

Respondent

REASONS FOR JUDGMENT

1. I heard this matter in a busy duty list and reserved my judgment. I now make orders and provide reasons.

2. Ms Arthur, (“the wife”) has applied for an interim order that Mr Arthur (“the husband”) pay her a lump sum of $100,000 either as a partial property settlement order or an interim costs order. She also applies for interim spousal maintenance and a child support departure order.

3. During the hearing the husband was prepared to concede payment by him of the wife’s weekly rental payment (if paid directly to the real estate agent) and of the child’s school fees and associated costs.

4. I was informed at the commencement of the hearing (and it was an agreed fact) that the wife was not present in court because she was hospitalised due to a recent cancer diagnosis and the commencement of treatment for her illness.

5. During submissions I indicated that I would treat the wife’s application for a lump sum as being founded on s 79 Family Law Act 1975 (Cth) (“the Act”) (without in any way fettering the trial judge’s discretion to deal with that payment when making a final property settlement order in these proceedings).

6. Initially counsel for the husband asserted that there were no liquid funds from which a payment could be made. That assertion could not be maintained in light of the documentary evidence that was tendered.

7. The husband filed a financial statement in which he indicated that the net assets of the parties were just under $8 million. The bulk of those assets consist of an interest in C Pty Ltd, C Enterprises Pty Ltd, C Holdings Pty Ltd and D Pty Ltd, in an amount of slightly over $6 million, according to a valuation obtained by the husband (Exhibit 5).

8. The husband is the sole director and is a shareholder of the trading companies and they are his alter ego. The husband holds all the ordinary shares in these companies.

9. C Pty Ltd currently has a cash balance in the online saver account held by that company in excess of $2 million (see Exhibit 2).

10. I find that the husband has an ability to deal with the cash funds in C Pty Ltd as he sees fit.

11. There is a further account with the Commonwealth Bank in the name of C Pty Ltd which over a significant period has fluctuated between $200,000 and $500,000 (Exhibit 5). The most recent balance is over $300,000. Again, the husband has sole control over these funds.

12. The financial statements of C Pty Ltd indicate that in the 2014 year the company had a turnover of over $7 million with a pre-tax profit of almost $2 million and an after tax profit of $1,356,499 (Exhibit 1).

13. Counsel for the husband presented a minute of order during the hearing which would have an amount of $100,000 paid to the wife in four instalments. This application was apparently on the basis that if the wife’s application for a payment of lump sum was for interim costs, then she did not need all those costs in one lump sum.

14. During final submissions, counsel for the husband conceded that if the application by the wife for a lump sum of $100,000 was dealt with under s 79 of the Act, there could be little that could be said against making that order. That was an appropriate concession given that the requirements set out in Strahan & Strahan (2011) FLC 93-466 are more than easily met in the circumstances of this case. Accordingly, I make an order that the husband pay to the wife an amount of $100,000. The wife has earmarked these funds so that she might engage with the husband in this litigation. She may have this amount without it affecting her spousal maintenance claim.

15. The wife seeks that she be paid $2,250 per week by way of interim spousal maintenance.

16. It follows from what I have already said that there is no issue in this case as to the husband’s capacity to pay the spousal maintenance order as sought by the wife. The husband’s case is that the wife has overstated her weekly needs in her evidence and the order should not be made in the sum that is suggested.

17. The wife is currently unemployed and the husband made no submission that she currently has any earning capacity. The wife has set out the amount she says she needs for personal expenditure on a weekly basis in her financial statement filed 2 April 2015. She has the following expenses:

    Item 21 – rent   $800.00

    Item 26 – contents insurance   $23.00

    Medical benefits insurance   $66.00

    Rental agreement for fridge and washing machine              $27.00

    Total   $916.00

18. In addition, the wife’s expenses as set out in Part N of her financial statement at item 60 total $1,358 per week. These amounts total $2,250, or thereabouts, which is the amount the wife is claiming.

19. Counsel for the husband proposed that the husband cause the wife’s rental payments of $800 per week to be paid directly to E Real Estate, Suburb F. That proposal was not specifically agreed to by senior counsel for the wife and there is no reason why the wife should not be responsible for making the payment directly to the agent herself.

20. Counsel for the husband challenged a number of the expenses claimed by the wife on the basis that the wife, whilst the parties were married, had prepared a budget on 1 January 2014 (Annexure E to the husband’s affidavit) which provided weekly amounts less than those amounts that are now claimed by the wife under the same particular categories. For example, in the family budget, the wife set aside for an annual family holiday an amount of $16,640 ($320 per week). The husband complains that the wife now seeks about $23,000 ($450 weekly) for only her and the child for annual holidays.

21. Counsel for the husband also made a complaint about the cost the wife seeks for counselling. There was an assertion that the husband was paying for the parties joint counselling, however there is no indication on the wife’s financial statement that funds sought for counselling in fact referred to joint counselling.

22. The husband submits that there is no justification for the wife seeking funds for car maintenance as the husband recently paid for the wife to have her car repaired.

23. In interim proceedings, the Full Court in Redman and Redman (1987) FLC 91-805 endorsed a statement made by Fogarty J in Williamson and Williamson (1978) FLC 90-505 as follows:

    Another consequence is that on an application for interim maintenance, the court conducts ‘not as final or exhaustive a hearing as would be the case if one were hearing the matter finally’ ... the evidence need not be so extensive and the findings not so precise.

    So, upon an application for interim maintenance, an approach can be taken with a broader brush.

24. It seems clear on the face of the material that the husband:

    24.1.Has unfettered access to the bulk of the matrimonial assets, a substantial portion of which are in cash;

    24.2.Although at item 14 of his financial statement the husband indicates that he receives nil benefits from his employment/business, namely C Pty Ltd, it is clear from his supporting affidavit, and the family budget prepared by the wife at Annexure E to the husband’s affidavit, that that is not accurate. The husband receives benefits in respect of food, company vehicle (petrol, tolls and running expenses), mobile phone and the like.

25. Counsel for the husband ultimately submitted that an amount of $700 should be deducted from what the wife seeks per week.

26. Depending on capacity to pay, s 75(2)(g) of the Act requires me, where the parties have separated, to take into account a standard of living that in all the circumstances is reasonable. The family budget prepared by the wife during the marriage indicates that the company has paid for the family’s food (including meat, vegetables and dry goods) and also for both the husband and wife’s motor vehicles, including petrol, registration, service and insurance. I have not been informed in the context of this interim hearing as to what funds if any came from the companies for entertainment and travel.

27. I find that none of the expenses claimed by the wife in her financial statement are unreasonable in the context of the overall financial position of the parties. The wife’s expenditure and use of the fruits of a periodic order can always be reviewed by the trial judge at the final hearing if the husband wishes to continue to assert in a contested hearing that her expenses are unreasonable.

28. Using a broad brush approach on an interim basis, I find that the wife’s reasonable needs are in the sum of $2250 per week.

29. The wife seeks a departure from the current periodic child support assessment which is in the sum of $315 per week and instead seeks an amount of $900 per week.

30. The wife’s application relies upon s 116(1)(b) of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”). There was no submission made that it was not appropriate to deal with the wife’s application for a departure order. I am satisfied that it would be in the interests of both parties for the court to consider whether a departure order should be made.

31. When making a departure order for child support, the Court must be satisfied that:

    31.1.in the special circumstances of the case a ground of departure has been established; and

    31.2.it is “just and equitable” to make the proposed order; and

    31.3.it is “otherwise proper” to make the order.

32. The grounds of departure are outlined in s 117(2) of the Assessment Act. Counsel for the husband submitted that there was no ground for departure pursuant to s 117 of the Assessment Act. In the circumstances of this case, the relevant ground is found at s 117(2)(c)(ia); the property and income which is currently in the hands of the husband is more than sufficient reason why a departure order should be contemplated in respect of the periodic weekly assessment. I find in this case that the special circumstances that would allow me to find that the administrative assessment is unjust and inequitable arise from findings I have otherwise made in these reasons about the financial resources that the husband has available to him. The wife is not currently employed.

33. Section 117(2)(b)(ii) of the Assessment Act also bears some consideration relating to the cost of maintaining the child because of the high cost involved in the child being cared for, educated, or trained in the manner that was expected by the parents. The child attends a private school in Suburb G.

34. There was no detailed submission made in relation to s 117(4) or (5) of the Assessment Act. I do not need to take into account any particular matters in those sections for the purposes of reaching the conclusion that I have on the material before me.

35. Counsel for the husband handed up a minute of order (which I have marked Exhibit 7), that included an order in relation to non-periodic child support payments in the following terms:

    3. That pursuant to s 124 of the Assessment Act, the husband provide child support for the child by way of payment of all education fees at [H School] or such other school as the parties may agree from time to time including but not limited to tuition fees, French tutor fees, music tutor fees, excursion fees, incidental sporting costs including swimming, the cost of all school books, school uniforms and extra-curricular activities, such payment to be made directly to [H School] within 7 days of the wife providing a school invoice or reimbursement to the wife upon her providing a receipt for any such payment.

36. The wife sought an order in the following terms (at order 4 of annexure B to her Amended Initiating Application filed 14 may 2015):

    4. That pending further Order and pursuant to section 124 of the Child Support (Assessment) Act 1989 the husband shall provide child support to the wife for the child [B] born … 2007 by way of payment of:

    4.1 all education fees, including but not limited to, private school fees, French tutor fees, music tutor fees, excursion fees, incidental sporting costs including but not limited to swimming, the cost of all school books, school uniforms and extra-curricular activities, such payments to be made within 7 days of the wife providing an invoice or receipt to the husband (or within such other time period as allowed by the provider of the service); and,

    4.2 medical benefits cover with CBHS to cover the child at the current level together with all gap medical, dental, optical, orthodontic, hospital, pharmaceutical, physiotherapy, podiatry, speech therapy and other medical expenses, such payments to be made within 7 days of the wife providing an invoice or receipt to the husband (or within such other time period as allowed by the provider of the service).

37. Order 3 sought by the husband and order 4.1 as sought by the wife are in very similar terms. I shall make the order in the terms sought by the wife.

38. The costs for the child set out in the wife’s financial statement total $1,303. The wife notes that the husband currently pays (and will continue to pay under the non-periodic order to which I have just referred) the child’s education expenses (of $385 per week), bringing that total down to about $900, which is what the wife now seeks by way of periodic payment.  

39. During the hearing senior counsel for the wife amended the amount sought from $900 per week to $845 per week on the basis that the husband has in the past and would continue (under the non-periodic order) to pay for French tutoring fees ($55). Senior counsel also conceded that the child is covered by the wife’s medical insurance.

40. It was submitted by counsel for the husband that the school fees paid by the husband include extracurricular activities. In addition to French lessons, the husband also pays for music lessons, swimming and school related extracurricular activities. Counsel for the husband submitted that the wife’s claim for $57 per week for the child’s activities and $100 for the child’s entertainment and hobbies was thus excessive.  There is some force in the argument by counsel for the husband. I accordingly find that the amount sought by the wife for periodic payment should be further reduced by $100, resulting in a total amount of $745 per week.

41. It was also submitted that there was no justification to seek monies for child minding. I do not accept this submission.

42. I will make an order sought by the wife in paragraph 2 of Annexure B to her Amended Initiating Application, but for a reduced amount of $745 per week. I will make the order for “gap” payments in respect of the child’s health and medical expenses, noting the concession that the child is covered by the wife’s health insurance which has been taken into account when making the spousal maintenance order.

I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 28 May 2015.

Associate: 

Date:  28.5.2015