Ashton and McCortney

FAMILY COURT OF AUSTRALIA

ASHTON & MCCORTNEY

[2012] FamCA 227

FAMILY LAW – CHILDREN – Whether there should be equal shared parental responsibility – where the child lives with the mother by consent – where the mother will have to move residence post-property settlement – where the mother has principally cared for the child – where the child’s wishes are taken into account – where the mother is given sole parental responsibility – where the mother must inform the father of any intended decision.
FAMILY LAW – CHILD SUPPORT – Application for Departure– whether there are special circumstances – where father’s taxable income does not present the actual position in respect of his income – where an administrative assessment of father’s income under the Child Support (Assessment)Act would result in an unjust and inequitable determination of child support – where payment of school fees has been used to mitigate amount of child support paid by the father – where there are special circumstances – where father consents to departure from assessment.
FAMILY LAW – PROPERTY SETTLEMENT – where the parties’ liabilities are greater than the value of their assets – whether orders can still be made pursuant to Family Law Act 1975 (Cth) s 79 for alteration of property interests – where it is determined to be just and equitable for husband to indemnify wife in respect of liabilities in her name alone.
FAMILY LAW – SPOUSAL MAINTENANCE – lump sum – where there are no circumstances justifying lump sum payment – where the husband has no capacity to make a lump sum payment - where application for spousal maintenance is dismissed.

Child Support (Assessment) Act 1989 (Cth) s 116, s 117, s 123
Family Law Act 1975 (Cth) s 60B, s 60CA, s 60CC, s 61DA, s 62B, s 65DA , s 65DAA, s 75, s 79, s 106A, s 106B

Cerini [1998] FamCA 143
Cowley v Mendoza (2010) FamCA 597
Chorn v Hopkins (2004) FLC 93-204
Kowaliw (1981) FLC 91-092
Omacini (2005) FLC 93-218

APPLICANT:

Mr Ashton

RESPONDENT:

Ms McCortney

INDEPENDENT CHILDREN’S LAWYER:

Patrick Dooley

FILE NUMBER:

BRC

2613

2010

DATE DELIVERED:

13 April 2012

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Brisbane

JUDGMENT OF:

Forrest J

HEARING DATE:

8, 9 and 10 August 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Ms Picker of Counsel

SOLICITOR FOR THE APPLICANT:

A Firm

FOR THE RESPONDENT:

Ms McCortney in person

COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER:

Mr Slade-Jones of Counsel

SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER:

Patrick Dooley
Dooley Solicitors

Orders

PARENTING

IT IS ORDERED

That all previous parenting orders and injunctions are discharged

Parental Responsibility

That the mother has sole parental responsibility in respect of all major long term issues (as that expression is defined in the Family Law Act 1975 (as amended) (“the Act”)) in respect of the child, C Ashton, born … August 2000, save that the mother shall, prior to making the sole ultimate decision about any such issue:
(i)Advise the father in writing of the decision intended to be made;
(ii)Seek the father’s written response in relation thereto;
(iii)Consider, by reference to the best interests of the child, any such response prior to making any such decision;
(iv)Advise the father in writing as soon as reasonably practicable of her ultimate decision.

BY CONSENT IT IS ORDERED

Live With

The child shall live with the mother.

IT IS FURTHER ORDERED

Time with the Father

The child shall spend time with the father at all such times as may be agreed between the parties in writing, in addition to:
(i)From 9:00 am until 5:30 pm each alternate Sunday commencing Sunday 15 April, 2012;
(ii)From 9:00 am until 5:30 pm on Father’s Day each year;
(iii)From 9:00 am until 5:30 pm on Christmas Day in 2012 and each alternate year thereafter.
Should the child be due to spend time with the father pursuant to these orders on the Sunday that is Mother’s Day then paragraph 4 (i) of these orders is suspended for that day and the child shall remain in her mother’s care that day and she shall spend the following Sunday with the father from 9:00 am until 5:30 pm to make up for missing the Mother’s Day Sunday with him.
When the child is to spend time with the father pursuant to these orders the father shall collect her from the mother’s residence at the commencement of such time and she shall return to the mother’s care at the conclusion of such time by being collected by the mother from the father’s residence.

Communication with the Father

The child shall communicate with the father at her own discretion, in addition to:
(i)By telephone on Tuesday and Thursday of each week between 7:00 pm and 8:00 pm with the father calling the child on the mother’s landline or the child’s mobile telephone (if she has one) and speaking to her for up to an hour on each such occasion;
(ii)By telephone on the child’s birthday, the father’s birthday, Christmas Day and New Years Day when the child does not otherwise spend any time with the father on such days, with the father calling the child on the mother’s landline or the child’s mobile telephone (if she has one) and speaking to her for up to an hour on each such occasion;
(iii)By card or letter sent by the father through the post at his discretion;
(iv)By email sent by the father to the child’s email address (if she has one) on up to two occasions each week.
The mother shall inform the child that she may communicate with the father by any means and at any time that the child wishes to and the mother shall assist the child in facilitating such communication as the child requests from time to time.

Schooling and Residence

The mother may remove the child from S School at the Gold Coast at her sole discretion and may change the child’s place of residence from the Gold Coast to Brisbane at her sole discretion.
The mother shall give the father two weeks notice in writing of any decision to remove the child from S School and/or to change the child’s place of residence to Brisbane and shall, in the same notice, provide him with details as to the new school the child is to attend and/or the new residential address at which the child will be residing.

Specific Issues

The father shall not drink alcohol or be under the influence of alcohol at any time when the child is spending time with him or at any time when he is communicating by telephone or email with the child.
The mother and the father shall keep each other informed as to their residential address, their landline telephone number, their mobile telephone number, the child’s mobile telephone number (if any), their email addresses (if any) and the child’s email address (if any) and shall ensure that any change in any of those details is advised to the other parent in writing within 48 hours of any such change.
The mother shall keep the father informed as to the child’s health and in respect of any issues in respect of same, including as to the name and contact details of any medical practitioner or allied health professional upon whom the child attends from time to time and these orders authorise any such medical practitioner or allied health professional to provide the father with any information that he may request as to the child’s health and treatment that may lawfully be provided to him.
These orders authorise any school at which the child attends from time to time to provide the father with any information relating to the child’s education or extra-curricular activities that the father may request and that the school may lawfully provide to him and the father shall be permitted to attend at any event at any such school that parents of students are welcome to attend whether the mother is also in attendance or not.
That save as otherwise provided for in these orders, both the mother and the father are restrained from discussing, raising or talking to the child about these orders or any aspect of these proceedings.
That the mother and the father shall communicate with each other only in a respectful manner and are restrained from abusing each other.
That both the mother and the father are restrained from denigrating, criticising or belittling the other parent or any member of the other parent’s family in any way to or in within the hearing of the child and from allowing the child to be within the hearing of any other person who does so.
Pursuant to s 65DA(2) and s 62B, the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders and details of who can assist parties adjust to and comply with an order are set out in the Fact Sheet attached hereto and these particulars are included in these orders.

PROPERTY

AND IT IS FURTHER ORDERED THAT

That within four weeks of the date of these orders the wife shall:
(i)give up to the husband vacant possession of the apartment situated at … (“the [Gold Coast 2 property]”) and transfer all of her right, title and interest in the said Gold Coast 2 property to the husband; and
(ii)give up to the husband vacant possession of the real property situated at … (“the [Gold Coast 1] property”) and transfer all of her right, title and interest in the said Gold Coast 1 property to the husband.
That the husband indemnifies the wife and shall keep her indemnified against any and all liability in respect of the Gold Coast 2 property and the Gold Coast 1 property including in respect of the liabilities secured by mortgages registered over the properties, local authority rates and charges levied against the properties, any water or service charges levied against the properties and all body corporate fees owing in respect of the Gold Coast 2 property.
That the husband shall use his best endeavours to have the wife released as soon as possible from any personal guarantees she has given in respect to any liability pertaining to the Gold Coast 2 property and/or the Gold Coast 1 property.
That the husband shall retain free from any claim by the wife all of his interest in A Firm.
That the husband shall retain all of his interest in the companies, A Pty Ltd, G Pty Ltd, O Pty Ltd and NT Pty Ltd and the wife shall resign forthwith as an officeholder of any of those companies should she not already have done so.
That the wife shall retain all of her interest in the companies, P Pty Ltd, SB Pty Ltd and PM Pty Ltd and the husband shall resign forthwith as an officeholder of any of those companies should he not already have done so.
That the husband indemnifies the wife and shall keep her indemnified against any and all liability to:
(i)Toyota Finance in respect of the shortfall on the payout of the lease relating to the Mercedes Benz CLS350 motor car formerly in the wife’s possession;
(ii)David Jones for her credit card debt as at the 18^th October, 2010 and interest thereon;
(iii)Myer for her credit card debt as at the 18^th October, 2010 and interest thereon
(iv)HSBC for her credit card debt as at the 18^th October, 2010 and interest thereon;
(v)The ANZ Bank for her credit card debts as at the 18^th October, 2010 and interest thereon;
(vi)American Express for her credit card debts as at the 18^th October, 2010 and interest thereon;
(vii)Citibank Diner’s Club for her credit card debts as at the 18^th October, 2010 and interest thereon;
(viii)Citibank for her credit card debts as at the 18^th October, 2010 and interest thereon;
(ix)Westpac for her credit card debt as at the 18^th October, 2010 and interest thereon;
(x)NAB for her credit card debt as at the 18^th October, 2010 and interest thereon;
(xi)Coles Group for her Source Mastercard credit card debt as at the 18^th October, 2010 and interest thereon;
(xii)Bendigo Bank for her credit card debt as at the 18^th October, 2010 and interest thereon;
(xiii)GE Money in respect of all and any liability with respect to the lease relating to the Mercedes Benz ML270 motor car that was in the husband’s and/or his son’s possession.
That the husband shall retain as his own property solely all furniture, jewellery, artwork and other personal possessions currently in his possession or currently situated at the Gold Coast 1 property.
That the wife shall retain as her own property solely all furniture, jewellery, artwork and other personal possessions currently in her possession or at the Gold Coast 2 property.
That the husband shall be responsible for all liability in respect of:
(i)His American Express credit cards;
(ii)His Bendigo Bank credit cards;
(iii)His Citibank credit cards;
(iv)His St George Bank line of credit;
(v)All liability to the NAB Bank, the Macquarie Bank and the ATO in respect of the practice, A Firm
and he shall indemnify the wife and keep her indemnified against all and any liability for any of these debts.
That in the event that either the husband or the wife refuses or neglects to sign any document necessary to implement these orders the Registrar of the Brisbane Registry of the this Court is hereby appointed pursuant to the provisions of s106A of the Act to execute, in the name of the defaulting party, any document necessary to give effect to and implement these orders.

SPOUSAL MAINTENANCE

That paragraph 2 of the orders of Federal Magistrate Cole of 24 August 2010, being an order that the husband pay the wife spousal maintenance in the sum of $500 per week, is discharged as at 3 October 2010.

THE TRUSTEE FOR SALE

That all previous orders appointing Mr Y, solicitor, as trustee for the sale of property of the parties or either of them are discharged and any trust or trusts created by any such previous orders are hereby discharged with any and all property that was subject to such trusts hereby vesting in the husband.

CHILD SUPPORT

AND IT IS FURTHER ORDERED

That the annual rate of child support payable by the father in respect of the child, C Ashton, born … August 2000, be varied to $10,400 in respect of the following periods:
(i)From 13 April 2012 to 30 June 2012;
(ii)From 1 July 2012 to 30 June 2013;
(iii)From 1 July 2013 to 30 June 2014;
(iv)From 1 July 2014 to 31 December 2014
whereafter the rate of child support payable by the father to the mother is to be fixed in accordance with the normal administrative provisions of the Child Support (Assessment) Act 1989.

COSTS

That the wife pay the husband the sum of $3,500 towards the costs of the single experts initially paid by him.

IT IS NOTED that publication of this judgment under the pseudonym Ashton & McCortney is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 2613 of 2010

Mr Ashton

Applicant

And

Ms McCortney

Respondent

REASONS FOR JUDGMENT

Introduction

Mr Ashton and Ms McCortney began living together as a couple in January, 1992. They married in March 1993, and had their only child, C, in 2000. They separated in October 2009, and their marriage was dissolved in January, 2011. They have been locked in conflict about parenting C and property and financial settlement ever since their separation.

In August, 2011, I presided over a three day hearing of their competing applications for parenting orders, property division, spousal maintenance and for child support departure and substitution orders. Mr Ashton, a solicitor, was represented by counsel who was instructed by Mr Ashton’s adult son, Mr V Ashton, who is a partner with him in their own solicitors’ practice…. Mr V Ashton was also a witness in his father’s case. Ms McCortney was unrepresented, unable to afford legal representation.

Mr Patrick Dooley, the Independent Children’s Lawyer, was represented by counsel who made submissions at the outset of the trial as to what the Independent Children’s Lawyer considered to be in the best interests of the child in so far the time she is to spend with her father is concerned. He informed the Court that it was the child’s recently expressed clear wish that she only spend time with her father over the course of a day, namely Sundays, as she had been doing pursuant to earlier interim orders made by me. It was the ICL’s submission that it was in the child’s best interests to put orders in place in accordance with that wish. The Court was informed that the father accepted that proposal and the Independent Children’s Lawyer sought leave to withdraw as well as an order that he actually be formally discharged as at that point in time.

After confirming with the father’s counsel that the father indeed did accept that proposal and that the trial was concerned principally with financial matters, I acceded to the ICL’s request to be discharged and made that order.

There remained to be determined in the parenting dispute, issues surrounding parental responsibility, whether or not the child should, by enjoining the mother from removing her, continue to attend a particular school on the Gold Coast and whether or not the mother should be enjoined from moving the child’s residence more than 40 kms away from that school.

In respect of property division, Ms McCortney was seeking an interesting mix of orders in all the circumstances. It was plainly clear, although Ms McCortney did not openly wish to acknowledge it, that the evidence in the matter reasonably established that the parties had, between them, more liabilities than they had assets of value. Nevertheless, Ms McCortney sought orders that divided their “joint and several property interests” as to 70% to her and as to 30% to Mr. Ashton. She also sought an order pursuant to s 106B of the Family Law Act 1975 (Cth) setting aside “the transfer by the Husband to the other party [Mr V Ashton] of a thirty percent (30%) share in [A Firm]”. In addition, she sought an order that the husband pay out in full a long list of personal and joint liabilities and indemnify her against any liability in respect thereof.

Ms McCortney also sought an order that the husband pay her $2,000 per week in spousal maintenance in addition to all arrears of spousal maintenance owing pursuant to an order made by Federal Magistrate Cole on 24 August 2010. Cole FM’s order provided that the husband pay the wife $500 per week. I had suspended that order on 8 April 2011, after hearing an interim application of the husband.

The wife also sought orders that child support assessments be departed from pursuant to s 117 of the Child Support (Assessment) Act 1989 (“the Assessment Act”) and that the annual rate of child support payable by the husband be fixed at $81,744 for the years from separation until the child turns 18 in August 2018. She then went on to seek lump sum substitution orders pursuant to s 123 of the Assessment Act, wanting the Court to order the father to pay her $653,952 in such lump sum.

In contrast, the husband sought orders that the two real properties currently registered in the sole name of the wife be transferred to him and that he indemnify the wife in respect of all liabilities relating to those properties. The balance of the property orders he sought would see each party keeping what they otherwise already owned or retained and each being solely liable for credit card liabilities in their own name. He opposed the orders sought by the wife in respect of spousal maintenance and child support and sought to have FM Coles’ $500 per week spousal maintenance order discharged as at 3 October 2010, the day when he stopped paying it.
At the end of the trial, interestingly, given the concession clearly made at the commencement of the trial when the Independent Children’s Lawyer was given leave to withdraw and was discharged, counsel for the husband informed the Court that the husband actually sought an order that provided for the child to spend time with the father from Sunday morning until the commencement of school on Monday morning. I do not make such an order and order, principally, in accordance with the submission of the Independent Children’s Lawyer and the child’s express wish that she spend day time only with the father unless otherwise agreed between the parents.

I intend to give my reasons in respect of the parenting dispute before I turn to the financial matters. However, there is important overlap between the financial issues in this case and the parenting issues, particularly the question of whether the child should continue to live on the Gold Coast and continue to attend S school. I have determined that the decision about that is one best left to the mother and that is what my orders will provide. I will explain my reasons for that in detail below.

THE PARENTING DISPUTE

The Principles to be Applied

Part VII of the Family Law Act 1975 (“the Act”) sets out the statutory framework within which parenting orders are to be made by the Court. The Court is given discretionary power to make such parenting orders as it thinks proper.[1] In deciding whether to make a particular parenting order in relation to a child, the Court must regard the best interests of the child as the paramount consideration[2] and must apply a rebuttable presumption that it is in the best interests of a child for its parents to have equal shared parental responsibility in respect to that child.[3] The Court must, having regard to the objects of Part VII[4] and the principles underlying those objects,[5] consider certain express “primary” considerations[6] and “additional” considerations[7] in determining what is in the child’s best interests. The Court must also consider the extent to which each parent has fulfilled or failed to fulfil responsibilities as a parent in respect of some further particularly identified matters.[8]
[1] Family Law Act 1975 (Cth) s 65D
[2]Family Law Act 1975 (Cth) s 60CA
[3] Family Law Act 1975 (Cth) s 61DA
[4] Family Law Act 1975 (Cth) s 60B(1)
[5]Family Law Act 1975 (Cth) s 60B(2)
[6]Family Law Act 1975 (Cth) s 60CC(2)
[7]Family Law Act 1975 (Cth) s 60CC(3)
[8]Family Law Act 1975 (Cth) s 60CC(4)

The presumption referred to does not apply in circumstances of abuse or family violence[9] and may be rebutted by evidence that satisfies the Court that it would not be in the child’s best interests for the child’s parents to have equal shared parental responsibility for that child.[10]
[9] Family Law Act 1975 (Cth) s 61DA(2)
[10]Family Law Act 1975 (Cth) s 61DA(4)
If an equal shared parental responsibility order is made the Court must consider whether the child spending equal time with each parent is in the child’s best interests and reasonably practicable and, if satisfied as to both, then the Court must consider making such an order and, if not, then must consider whether the child spending substantial and significant time with each parent is in the child’s best interests and reasonably practicable and, if satisfied as to both, then consider making such an order.[11] Determination of the reasonable practicability of equal time or substantial and significant time with each parent is made by reference to the factors identified in s 65DAA(5).
[11]Family Law Act 1975 (Cth) s 65DAA

If an equal shared parental responsibility order is not made then the Court may make such parenting orders as it considers proper by regard to the best interests of the child.

Relevant Findings and Parental Responsibility

The mother gave evidence, effectively, that the parties’ relationship was one which was initially significantly built around socialising, entertaining and the consumption of large amounts of alcohol but that after the child was born, the father’s unwillingness and inability to curtail that lifestyle put increasing stress on the relationship, ultimately causing it to break down. The mother’s evidence is that the father perpetrated serious domestic violence on her on occasions over the latter years of the relationship, including one incident in which she sustained a fracture of an arm. That evidence about sustaining a fractured arm was corroborated by one of the mother’s friends who gave evidence that she observed the mother with a broken arm that the mother attributed to be a result of the father’s violence.
Whilst the father generally denied the mother’s allegations of violence and continued alcohol abuse, I did not understand him to directly deny that the mother sustained a broken arm as she alleged. Nor did I understand him to attribute her broken arm to any other cause. I accept that she did sustain a broken arm in an incident of violence between them some years before the end of their marriage. In addition, evidence given by both of them satisfied me that violence had occurred between them in the direct presence of the child at the father’s office on a day early in 2011, after their separation, when the mother went unannounced to collect the child who she knew was there with the father, and a violent confrontation took place when the father ejected the mother from his office. Accordingly, I am satisfied that family violence did occur between the mother and the father in this case.
The Independent Children’s Lawyer put into evidence a November 2010 report of Mr N, Social Worker. In paragraph [61] of that report, Mr N said:

[The father] presents … as being aggressive, controlling and petulant, and as self rather than child-focused, and as being unprepared to co-parent with [the mother]. While expressing reservations about the efficacy of her personal, relationship and parenting functioning, he largely also proposes to abrogate parenting responsibility to her while contemporaneously proposing that he should be able to prescribe that [the child] lives on the GC and attends [S] School.

Mr N went on to say in paragraph [64] that the father made a clear and robust declaration that:
…he is unwilling and/or unable to cooperate and co-parent with [the mother]….

and Mr N opined then:

This declaration would seem to pronounce that there is no basis for hope that the parents will be able to discuss, negotiate and or jointly arrive at decisions crucial for [the child’s] health, education, religion, sports, hobbies, overseas travel, welfare or other matters and that such entrenched or episodic adult conflict where the child is the foci of disputation and conflict is not in her interests.

In the circumstances, I am satisfied that the presumption provided for in s 61DA of the Act is rebutted by the evidence that family violence has occurred between these parents and I am also satisfied, particularly having regard to the observations and opinions of Mr N which I unreservedly accept having seen and observed the father myself during the trial and on several other occasions when he appeared before the Court on interim applications representing himself, that an equal shared parental responsibility order in this case is not in the child’s best interests.
The mother seeks an order conferring sole parental responsibility upon her. The father, significantly, concedes that parental responsibility should be conferred solely on the mother in respect of all major long-term issues save for the child’s education. In that regard, he makes his position abundantly clear. He seeks an order that the child continue to attend S School on the Gold Coast and that as long as he continues to pay the S School fees the mother be enjoined from removing her from that school. I do not make such an order in respect of S School and I do not enjoin the mother from removing the child from S School. I make orders that give the mother sole discretion to remove the child from S School and to put her into another school; even to remove her to Brisbane to live and to put her into a school there if she considers that necessary. Accordingly, I do not consider it in the child’s best interests to confer equal shared parental responsibility in respect of her education on both parents.
My orders confer sole parental responsibility on the mother subject to an obligation on her part to consult the father as to his views and proposals prior to the making of a decision about a major long-term issue. Very high levels of conflict between the parents of an eleven year old child (who, I am satisfied, suffers from such conflict) as are present in this case, coupled with my obligation to consider preferring orders that are least likely to lead to further litigation between the parties[12] mitigate in favour of conferring sole parental responsibility on the mother. I am satisfied that she is the parent who has principally discharged parental responsibility in respect of this child since she was born and, most particularly, since the parental separation.
[12] Family Law Act 1975 (Cth) s 60CC(3)(l)
As an equal shared parental responsibility order is not being made, the s65DAA consideration process is not triggered and I can simply move on to determine what parenting orders are proper to make having regard to the child’s best interests.

Relevant Findings and Other Parenting Orders

There is no contest about the child living with the mother. That order is made by consent. The parents simply do not agree on the amount of time the child is to spend with the father.
Relevantly, in July 2010, FM Spelleken ordered that the child spend alternate weekends with the father from 10 am Saturdays until 5 pm Sundays. When the matter came before me in early April 2011, the evidence established that the father had not been taking advantage of those orders. He refused to have the child with him from 10 am on Saturdays, asserting that he had to work in the law firm on Saturdays doing work that could not be done on weekdays. The father made it equally clear that he did not want to have the child come into his care on Saturday afternoon or evening, preferring to have Saturday night free for socialising and/or spending time with his new partner.
Instead, he sought an order that the child spend time with him from Sunday morning until sometime early in the school week. At the interim hearing in early April 2011, I determined it in the child’s best interests to spend only the Sunday day time hours with the father. My reasons for that were twofold. Firstly, I was satisfied that the father consumes large quantities of alcohol and that he has a regular habit of attending a bar close to his residence on Sunday evenings and drinking a lot of alcohol when he does. I was not satisfied that he could change his ways sufficiently so as not to expose the child to the unacceptable risk of suffering physical or emotional harm on Sunday evenings. Secondly, I was not satisfied that the father had the actual capacity to appropriately prepare the child for the school week and attend to all of her needs in that respect on Monday mornings let alone Monday evenings and Tuesday mornings. The evidence satisfied me that the father had played a very minor role in the day to day parenting of his four children by his former marriage as well as the child after she was born, preferring to immerse himself in work most of the time and adult pursuits in the little free time that he had.
At the trial, as I mentioned in the introduction to these reasons, the Court was informed without objection that the Independent Children’s Lawyer had recently interviewed the child who had made it absolutely clear that she wished to only spend time with her father during daytime hours. The ICL’s position was that the child’s wishes should, in this case, be determinative. The Court was told the father conceded that position at the commencement of the trial only to be informed at the end of the trial that the father had changed position again.
Having considered all of the evidence, I am satisfied that the child’s wishes should be given significant weight in the determination process. She is eleven years old, turning twelve in August this year. She is on the cusp of adolescence and significantly dependent upon her mother for her day to day practical and emotional care at this time. The evidence satisfies me that she has and is being affected by the intensity of her parents’ conflict. It is, I consider, important for the child, at this stage of her life, to feel as though she has been heard by the Court and by her parents. I am not persuaded by consideration of any other matters that her best interests are served by putting in place the orders that her father seeks contrary to those she herself effectively told the ICL she wants put in place.
I am, after the trial, still satisfied that the father’s excessive use of alcohol and his habitual Sunday evening drinking session at the local bar present an unacceptable risk to the child if she was required to stay with him overnight on Sunday night. As valiantly as the father tried to present a case that he does not drink alcohol to excess, I was not convinced. His reference to the results of blood tests that were in evidence frankly did not convince me. In addition, I am still not satisfied that the father has the actual parenting capacity to ensure that the child is readied properly for a busy school week on Sunday evening and Monday mornings. Finally, I consider that there is every chance that the mother might have to move to Brisbane to live as one of the consequences of the finalisation of property and financial matters between the parties. In the same set of circumstances, I consider the child’s continued attendance at S School is no certainty given the fact that it can only be described as a very expensive private school and I have serious doubts about the likelihood of the father being able to pay those school fees having regard to the evidence, my findings about it and the orders I will make in the property proceedings. As I consider it, in all these circumstances, in the child’s best interests to leave it to her mother to determine if the child continues at S School, making it a real prospect that the child may have to move to Brisbane to live with her mother, I do not consider it in the child’s best interests to require her to live with her father on the Gold Coast until Monday or Tuesday in each alternate week.
I am satisfied that providing Sunday day time only, each alternate weekend, strikes the appropriate balance between the two s60CC(2) “primary” considerations. I am also satisfied that the mother will actually encourage the child to spend more time with the father than that, and that she would particularly give favourable consideration to appropriate holiday proposals put by the father. Indeed, the mother did want the child to spend time with the father from Saturday morning until Sunday evening each alternate weekend. It is the father who does not want to have that time with the child. I am confident that between the mother, the child and the father, appropriate holiday arrangements will be able to be made to the satisfaction of all and the best interests of the child. I am confident that they should be able to be consensually facilitated without the need for specific orders. I do not consider it in the child’s best interests to impose a holiday regime with her father by order.
My orders will provide for the child to spend Father’s Day each year and, starting this year, Christmas Day each second year with her father as well as Mother’s Day each year with her mother.
My orders will provide for the father to collect the child from the mother’s residence (whether that be on the Gold Coast or in Brisbane) at the commencement of the time she spends with him and for the mother to collect her from the father’s residence at the conclusion of such time. In this way, the father is sure to be awake and ready for the day when the child comes into his care and any delays in respect of her transition into his care are only likely to be the father’s responsibility. Similarly, transition back into the mother’s care on time will, principally, depend on the mother being on time and, in my view, is less likely to be problematic, particularly if she and the child have to move to Brisbane. Further, such arrangements enable her to stay in her father’s care on the Gold Coast for an hour longer in the afternoons if her mother is collecting her at 5:00 pm at her father’s home, saving him from having to leave earlier than that if he was to drop her at her mother’s at 5:00 pm.
As to the communication the child should have with her father, I consider that she is old enough now to determine for herself when and how she communicates with her father and my orders shall provide for that recognition, requiring the mother to inform the child of that as well. In addition though, I will make orders that permit the father to initiate communication with her by post as often as he wishes and by telephone on two evenings per week, as well as on special celebratory days each year. My orders will also permit the father to initiate email contact with the child twice each week if she has an email address of her own.

Schooling and Residence

The father showed particular interest in having the child continue to attend S School on the Gold Coast where she has attended since she began primary school. It is a private school and the fees parents must pay for their child to attend the school are in the many thousands of dollars on an annual basis. The parties in this case are, as will be demonstrated later in these reasons, substantially in debt. In fact, the level of their debt substantially exceeds the value of their assets. Objectively viewed, they are both at real risk of default and potential bankruptcy. Yet, against this, the father, who argues that he has not had the capacity to pay the wife $500 per week spousal maintenance as ordered in 2010, nor the capacity to pay meaningful levels of child support, seeks an injunction that the child continue to attend S School, arguing that he will continue to pay for those school fees into the future. In the past though, whilst paying those very expensive school fees, he has reduced the level of his direct child support paid to the mother for the child by claiming credit against his assessed liability for the school fees he pays at the levels allowed for by the Child Support Agency.
The mother, not surprisingly, would like the child to continue to attend S School. Realistically though, the mother cannot contribute towards the cost of this schooling and the level of child support she is receiving from the father to assist her in financially supporting the child is being significantly reduced as a result of the father paying all of the private school fees, placing more of the burden of the child’s day to day support on the mother. The orders I make in finalising property and financial matters between the parties require the mother to vacate the apartment that she and the child currently live in on the Gold Coast and to transfer title in that apartment and the other property on the Gold Coast owned by the parties to the husband. The mother’s position was that if that was the outcome of the proceedings, and she was to receive no lump sum payment by way of property settlement or any spousal maintenance, that her financial circumstances will be such that she might have to move to Brisbane to live with family. I accept that evidence. I do not order payment of a lump sum to the mother or spousal maintenance. The mother might have to move to Brisbane to live and to find more work to generate an income to provide financially for her own needs and for the child’s needs. I do not put an injunction in place requiring her to live on the Gold Coast or to continue to send the child to S School. That will be a matter for her to decide. If, notwithstanding all of the orders I make in this case, the mother decides to keep the child at S School, as long the father continues to pay those school fees then, of course, the child can continue to attend there. But, as I have said, that will be a matter for the mother principally to decide and she needs to be in a position where she can make the relevant decisions without being enjoined to keep the child at S School. If she does determine that she must move with the child to Brisbane or that she must change the child’s school then she shall give the father two weeks’ notice in writing of that decision and details of her proposed residence and the child’s new school.

Specific Issues

I am satisfied that it is in the child’s best interests that the father be enjoined from drinking alcohol or from being under the influence of alcohol at any time she is spending time with him or even communicating with him. As the orders I will make provide for the child to spend day time only with the father each second weekend, I do not consider this an unfair restraint to place upon the father. I consider it best if the child does not see the father drinking at all when she is in his care. I am satisfied that the father sometimes drinks to excess and I am satisfied that the child already has a negative view of her father’s drinking habits and that her best interests are served by experiencing her father showing restraint for the relatively short time that she spends with him. It is a relatively small sacrifice on his part for a greater benefit in terms of his relationship with his adolescent daughter.
I will make orders requiring the parents to keep each other informed of contact details such as addresses, phone numbers, the child’s phone number (if she has one), and email addresses. I will also require the mother to keep the father advised in respect of the child’s health and as to any doctors or allied health professionals she attends upon. My orders will authorise the father to be provided with any information that he requests from such practitioners that may lawfully be provided.
My orders authorise the child’s school to provide the father with any information about the child’s education or extra-curricular activities that he may request and for him to be able to attend at any event at the school that parents are welcome to attend at, whether the mother is attending or not.
I also consider it in the child’s best interests that both parents be restrained from discussing any aspect of these Court proceedings with the child and from abusing each other or denigrating the other to or in the hearing of the child.

THE PROPERTY DISPUTE

The Principles to be applied

Both parties seek orders pursuant to s 79 of the Act. That section gives the Court a discretion to make such orders as it considers appropriate altering the parties’ interests in the property that they jointly or severally own, subject to the statutory prohibition against making any orders unless the Court is satisfied that they are just and equitable. In determining what orders are appropriate to make the Court must have regard to the matters set out in s 79(4)(a) to (g) of the Act.
The generally preferred approach to the discretionary exercise is by way of a four-stepped process. Firstly, the Court should identify the assets, the liabilities, the superannuation interests and the financial resources of the parties and determine the values to be ascribed to each of those. Secondly, the Court is to make relevant findings as to the contributions of the parties as provided for in s 79(4)(a) to (c) of the Act and attribute, where appropriate, based on those findings, a notional percentage division to the net property pool or pools (if the superannuation interests are considered appropriately dealt with as a separate pool). Thirdly, the Court is to consider whether justice and equity requires any adjustment to that notional percentage division having regard to the matters set out in s 79(4)(d) to (g) including the matters set out in s 75(2) and any factual findings made in respect thereof. Fourthly, and finally, the Court is to make orders, giving effect to the division notionally arrived at after the first three steps, that are, broadly considered, just and equitable.

The First Step in this Case

There is limited agreement between the parties in respect of their property and its value. The following table sets out the list of agreed property and agreed values.

Item No. Description of Property Ownership Agreed Value

1 Gold Coast 1 Property Wife’s name $1,450,000

2 Gold Coast 2 Property Wife’s name $590,000

Sub Total $2,040,000

The following table sets out the list of the balance of the parties’ property as contended for by each of them and the value each asserts should be ascribed to each of those items.

Item No.

Description of Property

Ownership

Value asserted

By Husband

Value asserted

By Wife

3

Husband’s interest in the Solicitors’ Legal Practice

Husband

$117,000 for a 70% share in partnership

Wife asserts Husband has 100% interest but argues worth much more than $167,142 (exact figure asserted unclear)

4

Mercedes Benz SL 350 motor car

A Pty Ltd

$125,000

$200,000

5

Mercedes Benz ML320 motor car

G Pty Ltd

$45,000

$60,000

6

Furniture and personal effects in husband’s possession

Some jointly owned some owned by the husband

$8,000

$15,000

7

Artwork in wife’s possession

Jointly owned

$110,000

$20,000

8

Furniture and personal effects in wife’s possession

Some jointly owned some owned by the wife

$35,000

$10,000

9

Jewellery in wife’s possession

Wife

$200,000

$8,000

10

Jewellery in husband’s possession

Husband

No value ascribed

$20,000

11

Furniture held in storage at Gold Coast 1 property

Jointly owned

$20,000

No value ascribed

12

Artwork in husband’s possession

Jointly owned

No value ascribed

$20,000

13

Motor dinghy and outboard motor

Husband

No value ascribed

$15,000

Sub totals

$660,000

$368,000 plus legal practice

The parties have a significant number of very substantial liabilities. There was, at trial, agreement in respect of the following.

Item No

Description of Liability

Owed by

Amount of Debt

14

Liability to Aussie Home Loans secured by mortgage registered over Gold Coast 1 property

Husband and Wife

$1,744,316

(note property only worth $1,450,000)

15

Liability to Aussie Home Loans secured by mortgage registered over Gold Coast 2 property

Husband and Wife

$647,420

(note property only worth $590,000)

16

Liability to Toyota Finance in respect of lease of Mercedes Benz CLS350 motor car sold by wife leaving shortfall owing

Wife

$69,059

17

Rates owing for Gold Coast 2 property

Wife

$1,248

18

Water rates owing for Gold Coast 2 property

Wife

$579.37

19

Water rates owing for Gold Coast 1 property

Wife

$434.92

20

American Express Credit card no

…000

Wife

$6,715.38

21

American Express Credit card no

…008

Wife

$24,366.51

22

HSBC Credit card

Wife

$2,490.05

23

Westpac Credit card

Wife

$10,822.04

24

Citibank Diners Credit card no

… 883

Wife

$58,106.67

25

Citibank Diners Credit card no

… 677

Wife

$54,890.35

26

Citibank Platinum Visa Credit Card no …649

Wife

$67,287.23

27

ANZ Credit card no …552

Wife

$29,263.91

28

ANZ Credit card no …762

Wife

$423.56

29

Bendigo Bank Credit card

Wife

$17,489.03

30

Myer card

Wife

$6,267.09

31

David Jones card

Wife

$10,160.95

32

NAB Visa Credit card

Wife

$26,695.68

Sub total

$2,778,035

There was evidence about liabilities of the parties upon which there was no actual agreement. The following is a list of those.

Item No

Description of Liability

Owed by

Amount of debt asserted by Husband

Amount of Debt asserted by Wife

34

Lease liability to Toyota Finance in respect of Mercedes Benz SL 350 motor car

A Pty Ltd and Husband

$203,182

No figure ascribed

35

Lease liability to GE Money in respect of Mercedes Benz ML320 motor car

G Pty Ltd and Husband and Wife

$62,000

No figure ascribed

36

Body Corporate fees owing in respect of Gold Coast property 2

Wife

$1,798

$12,808

37

Liability to E Pty Ltd in respect of installation of kitchen to Atlantis apartment

Wife

No figure ascribed

$11,006

38

2 x American Express Credit cards in husband’s name

Husband

$26,000

No figure ascribed

39

Bendigo Bank Credit card in husband’s name

Husband

$25,000

No figure ascribed

40

Citibank Credit card in Husband’s name

Husband

$6,000

No figure ascribed

41

St George Bank line of credit

Husband

$25,000

No figure ascribed

42

Husband’s 70% share of legal practice liabilities in respect of plant and equipment

Husband

$52,500

No figure ascribed

43

Husband’s 70% share of legal practice overdraft

Husband

$70,000

No figure ascribed

44

Husband’s 70% share of fully drawn advance loan

Husband

$65,000

No figure ascribed

45

Husband’s 70% share of legal practice liability for GST, Group tax and superannuation

Husband

$70,000

No figure ascribed

Sub total

$606,480

$23,814

Neither party disclosed any superannuation interests or financial resources of any other kind. Neither party asserted the other had any such interests.
By reference to a balance sheet submitted by him, the husband asserted that amounts of $310,000 and $330,000 should be added back in the determination of the net pool of property to be considered for division between the parties. The first amount related to jewellery and artwork he asserted was in the possession of the wife at separation that she had disposed of since separation without accounting to him in respect of any of the proceeds of sale or in respect of their disposal. The second amount he asserted, in the balance sheet, was interest he had paid on liabilities since separation. However, in his affidavit of evidence-in-chief filed 30 March 2011, at paragraph 81, the husband deposed with more particularity to the make-up of the amount he was asserting should be added back. He set out post-separation expenditure under the heading “Add backs” as follows.

Item no

Item of Expenditure

Amount

1

HW Valuations of real property

$1,650

2

B Valuation report

$9,262.14

3

Interest paid on loan secured by Gold Coast 2 property mortgage

$55,000

4

Rates at Gold Coast 1 and Gold Coast 2 properties

$4,500

5

Interest paid on loans secured by Gold Coast 1 property mortgage

$200,000

6

American Express Credit cards

$7,000

7

Bendigo Bank Credit card

$4,800

8

Citibank Credit card

$1,500

9

St George Overdraft account

$4,600

Total

$298,312.14

My Findings as to the Assets and Liabilities of the Parties

As can be seen from the tables above, the parties at least agree that there are two real properties valued at $2,040,000 with liabilities secured by mortgages over those two properties equal to $2,391,736. That creates a shortfall of $351,736 just in respect of that securitised debt.
In addition, the parties agree that there is another $386,299 in debt, every single dollar of it in the wife’s sole name and divided into three essential categories. They are credit card debt, debt relating to sole registered ownership of the two real properties and debt relating to the shortfall between the sale price obtained for the motor car the wife sold and the amount owing at its sale in respect of the lease financing package that was set up during the marriage to acquire that car for the wife’s use.
Accordingly, just in respect of agreed assets and liabilities, the parties are in a net liability position of owing $738,935 more than the value of the agreed value of their real property assets.

The Matters on which there is no Agreement

Husband’s interest in legal practice

The husband asserts that he owns a 70% interest in the legal partnership that operates A Firm, a solicitors’ practice operating on the Gold Coast and in Brisbane. He asserts that his 70% interest is worth $117,000. He relies, in support of his position, on the expert opinion evidence of Mr B whose valuation report dated 9 September 2010 is in evidence pursuant to an order made in the Federal Magistrates Court that an expert be selected and jointly instructed to provide opinion as to valuation. Mr B was that jointly instructed expert.
Mr B opined that the husband’s 70% interest in A Firm was worth $305,489 as at the date of the report, having regard to the sustainable earnings stream of his share of the partnership after allowance for a commercial remuneration of $250,000 for the husband’s services to the partnership and before taking off any amount for the husband’s share of partnership liabilities.
Mr B’s opinion that the husband’s 70% interest in the partnership was actually worth $116,231 at 9 September 2010 was arrived at after deducting $97,258, being an amount said to be owed by the husband to the partnership and a further sum of $92,000 being an amount said to be owed by the husband to Westpac.
The sum of $97,258 represents the amount shown in the accounts of the partnership as being the excess of drawings over net share of profits attributable to the husband as at 30 June 2010. Thereby it represents an amount owing by him to the partnership as at that date.
The $92,000 liability to Westpac was said by Mr B to be owed by the husband pursuant to a Settlement Deed entered into with the bank on 10 August 2009 in respect of an action commenced by the bank in the Supreme Court of Queensland in early April 2009. According to Mr B, that Settlement Deed obliged the husband still to pay the bank $50,000 on 31 December 2010 and fourteen monthly payments of $3,000 per month after 30 June 2010, thus a total of $92,000.
Evidence in the husband’s case was that the A Firm practice, as it was in early 2008, namely a 100% sole proprietorship of the husband, completely collapsed after losing most of its mortgage work as a consequence of the global financial crisis in 2008. The practice, through a number of associated corporate entities owned and controlled by the husband, owed Westpac, and numerous other creditors, a large amount of money. The service company went into liquidation and the husband and other associated entities were sued by Westpac. That litigation was settled between the husband and his associated entities and Westpac. The terms of the settlement were embodied in the Settlement Deed already referred to. The husband and his son then entered into partnership and commenced practice through the new partnership on 1 October 2008, the husband with a 70% interest and the son with a 30% interest. The evidence is that the husband’s son paid nothing for his 30% interest, but in affidavit evidence the son deposes that he did agree that the new partnership would repay the debts of the old firm and assume the liability of the old firm for the existing and continuing leases on its offices on the Gold Coast and in Brisbane.
There is no evidence that the husband and his son agreed, in that partnership agreement, that the husband would personally owe the partnership the full amount of the debt owed to Westpac. Therefore, I frankly do not understand how the full amount determined to be owing by the husband at 30 June, 2010 is deducted from the value of the husband’s interest in the partnership. In any event, by the trial in this matter, that debt was due to be repaid and the evidence was that the husband was repaying it as per the agreed timetable. Accordingly, I will not take that sum of $92,000 off the earnings based valuation of the husband’s 70% interest in the partnership.
The husband also put into evidence for the trial an affidavit of Mr GM, the chartered accountant undertaking accounting work for the husband’s practice. Attached to his affidavit were financial statements for the partnership showing that the husband’s debt to the partnership as at 29 March 2011 was $86,427. I will take that amount off Mr B’s earnings based valuation of the husband’s interest. Although the earnings based valuation was said to be as at 9 September 2010, the difference between the husband’s share of the net profit for the 2010 year and his share of the net profit for the period 1 July 2010 to 29 March 2011, annualised, is not so significant, in my view, for it to be unfair to accept Mr B’s 9 September 2010 earnings based valuation but to take off the husband’s debt to the partnership as at the later date of 29 March 2011.
However, the husband gave evidence that the partnership had a current liability to the Bendigo Bank for $75,000 at time of trial. That had been sourced as a refinance of a prior NAB equipment loan obtained when they commenced the new partnership. They also had a liability of $192,850 to Macquarie Bank, being for a fully drawn loan and a working overdraft. I accept that evidence and consider 70% of those liabilities should also be considered in attributing a value to the husband’s interest in the practice.
The husband asserted that the partnership owed $100,000 in respect of GST and Group Tax to the ATO and superannuation contributions for its employees at the time of filing a balance sheet in the proceedings on 28 April 2011. The husband’s share of that is $70,000.
Accordingly, I will include the sum of $219,062, being the earnings based valuation of the husband’s interest in the partnership ($305,489) less the husband’s debt to the partnership ($86,427), in the pool of property. I will also include the husband’s liabilities of $187,500, being 70% of the debts the partnership owes to Macquarie Bank and the Bendigo Bank, and $70,000, being his share of liabilities to the ATO in respect of the practice.

The Motor Vehicles and their Leases

No acceptable expert opinion evidence was put before me in respect of the value of the two Mercedes Benz motor cars which were at the date of trial in the possession of, and being driven by, the husband and his son. In respect of at least one of those vehicles, the ML320, the wife has personal liability for lease repayment obligations pursuant to a personal guarantee given by her as a director of the company that contracted to lease the vehicle through the finance provider. I understand that she may also be personally liable for the SL350 through her former directorship of A Pty Ltd and a personal guarantee in respect of that company’s lease liability for that vehicle.
The wife asserts that the SL350 is valued at $200,000. She gives no evidence as to the basis upon which she gives that opinion. The husband asserts it is worth $125,000 but also gives no basis for that opinion. The husband’s evidence is that the payout figure on the lease at the time of trial was $203,182. The wife gave no evidence about that.
The wife asserts that the ML320 is valued at $60,000. Again, she gives no evidence as to the basis upon which she gives that opinion. The husband asserts it is worth $45,000 but also, again, gives no basis for that opinion. His evidence is that the payout figure on the lease at the time of trial was approximately $62,000. The wife gave no evidence about that.
Both motor cars are driven by the husband and his son and are used as work vehicles. I very much doubt that the cars are worth almost as much as the pay out figures in respect of the leases. That does not accord with common experience where expensive cars are bought and financed through leases where there is only little equity in the vehicles at the outset of the finance agreement. That said, I am not prepared though to accept the unqualified opinion of the husband as to the values of the two cars. It appears at this stage, at least, that the husband and his son are intent on retaining possession of the motor cars and to continue paying the ongoing lease liabilities for them, as expensive as they may be. It appears that they have been able to manage to do so to the time of the trial and, I am satisfied, they intend to continue to try to do so until the terms of the leases expire.
I do accept that the cars were not worth the amounts which would have been required to pay out the lease liabilities in respect to them at the date of the trial. The evidence was that the ML320 lease was due to expire in November 2011 and that the payout figure at that time was expected to be $46,000. There was no evidence about the date on which the SL350 lease was due to expire or the expected payout figure at that time. It may be that the final payout figures were somehow set by way of estimate as to what the value of the vehicle would be at the time the lease expired. In any event, I am not in a position to determine that the cars will not be worth as much as the payout figures when the leases expire. In the meantime, I observe that the practice recorded motor vehicle expenses for the first nine months of the 2011 financial year of $63,775, an average of $7,086 per month. I am satisfied that includes a substantial proportion, if not all, of the total lease expenses and other running costs of the two motor cars, deducted against the gross receipts of the business before the taxable income of the partners is determined.

I will not include in the pool of property in this case any amount for either of the two cars or for any liability attached to them. I will, nevertheless, have regard to the fact that the wife, who has not had the possession or use of the motor cars, remains potentially liable to the financiers for any shortfall owing at the end of the leases and that such prospect is clearly a result of entity structuring and asset financing decisions taken by the husband and the wife, to their maximum joint benefit, whilst they were still a couple. The orders I will make will deal with that matter, at least in my view, justly and equitably.

Furniture, Personal effects, Jewellery and Artworks

The husband would have me accept that the wife has $345,000 worth of furniture, personal effects, jewellery and artwork in her possession. He also would have me accept that the wife should be credited with another $310,000, added back to the pool and treated as property retained by her, on account of her disposal of that much worth of jewellery since separation.
The wife would have me accept that the husband has furniture, jewellery, artwork and a dinghy in his possession worth $70,000.
The evidence establishes, without a doubt, that the couple possessed a substantial amount of valuable jewellery and artwork at the time of their separation. They also possessed furniture and personal possessions in the Gold Coast 2 property they occupied as their home and there was furniture stored in the unoccupied Gold Coast 1 property. No single expert valuation evidence is put before the Court to assist in respect of dealing with this property. Neither party put an affidavit of an expert witness into evidence in which evidence of valuation opinion is given about these items of personal property.
The husband did put into evidence a copy of a Certificate of Insurance from Suncorp for house and contents insurance cover in the wife’s name that had issued on 1 October 2007. In that document was a list of jewellery that I find must have been provided to Suncorp by the wife at some time. Included in the list are men’s jewellery items, particularly watches, with the total of $44,450 of value ascribed to them. Also included in the list are items of women’s jewellery with the total of $130,295 ascribed to them. The husband gives evidence that the wife bought two more items for a total of $7,000 in December 2008 and January 2009.
In addition, the husband gave evidence that the couple owned valuable artworks … at the time of separation and that they were all retained by the wife. He put into evidence a copy of a Certificate of Valuation for Insurance from the a prominent Gold Coast gallery, dated 20 June 2000, in which painting was said to be valued at $18,000 and a second painting was said to be valued at $24,000. In his affidavit, the husband asserted that those two paintings were then worth $30,000 and $40,000 respectively and that the others were all worth a total of $40,000.
The husband also asserted that the wife had a significant collection of designer label handbags and other valuable possessions.
The husband put copies of a series of letters into evidence sent by solicitors acting for him in early 2010 to solicitors acting for the wife at the time. They requested provision of an inventory of the artwork in the wife’s possession, an inventory of the jewellery in her possession as well as an inventory of the furniture in her possession. No inventories were provided in response. Consequently, the husband’s solicitors requested an undertaking from the wife that she would “not dispose of or otherwise deal with” the art collection. The wife’s solicitors replied:
[the wife] undertakes to not deal with the art collection and she will provide an inventory within 7 days. These matters are trivial in the scheme of things.
No such inventory was provided by the wife within 7 days. Again, the husband’s solicitors requested inventories of artwork and jewellery in the wife’s possession. Again, none were forthcoming. Later, in March 2010, the wife’s then solicitors wrote, informing that the wife intended to sell some of the artworks to fund her legal fees and would give a full account of all that was sold. The husband’s solicitors wrote making demand that no paintings be sold and advising that an application for an injunction preventing such sale would be made. The wife’s solicitors then informed that they no longer held instructions and were instructed to put matters on hold for the time being.
The husband gave evidence that his solicitors then received an email from the wife in which she said that she had sold her engagement ring and had disposed of the art work, saying she had done so “to enable [the child] and [the wife] to live.” The husband’s lawyers wrote straight back to the wife expressing the husband’s objection, requiring an immediate accounting for the proceeds of sale and copies of any documents evidencing sale and requesting the proceeds to be placed into their trust account. No response was received and an application for an injunction was commenced in the Federal Magistrates Court.
Both parties were represented by solicitors and counsel when the matter came before the Court on 26 May 2010. By consent, many orders were made. Included was an order that each party disclose within 14 days details of any property sold or disposed of since October, 2009, including detailed particulars in respect of such sale or disposal. The orders appointed Brisbane solicitor, Mr Y, as trustee to sell the two real properties as well as any jewellery, artwork, couture and household chattels the parties retained, with each party to advise Mr Y within 7 days of the items they did retain They were entitled to specifically retain nominated items which were to be valued by a single expert. The proceeds of sale of any of the items in the wife’s possession that she elected to sell were to be retained by her and were to be characterised as spousal maintenance or property at the final hearing.
On 9 June 2010, the wife provided a schedule of property sold, disposed of, or transferred after 18 October, 2009. She listed four paintings as well as 35 listed items of jewellery and a Versace handbag as having been transferred to Mr D of Atlanta, Georgia in the USA on 12 May 2010 as “full and final repayment of loan of $30,000 with interest owed since 1991.” The schedule also detailed:
·     that one painting had been given as a birthday present to the wife’s sister;
·     that another painting had been sold in February 2010 for $500 cash to a couple at Surfers Paradise;
·     that some mirrors and plaques had been sold to a couple in February 2010 for $1,000; and
·     that a Raymond Weil gold watch had been provided as security for a loan of $10,000 the wife had borrowed from Mr J of Brisbane.
The wife also provided a schedule of items that were in her possession and that she said she wished to retain. Some were said to be in the Gold Coast 2 property and some were said to be at the Gold Coast 1 property.
The husband put those schedules into evidence along with a copy of a letter from the wife to Mr D in which she informed him she was transferring all of the items referred to in paragraph 78 hereof to him as repayment of a longstanding debt of $30,000 owed to him.
Under cross-examination during the trial the wife said:
·     that Mr D had loaned her $30,000 to commence a business many years ago, before she married the husband;
·     that business had failed and with the help of the husband, who she had started going out with at the time, she was able to extricate herself from the financial consequences of the failure;
·     that she had made a commitment to Mr D back then to repay him one day;
·     that Mr D had come to Australia early in 2010 and had accepted her offer to repay him in kind with paintings and jewellery;
·     that Mr D had asked her to deliver the paintings to a gallery for them to be sold;
·     that she thinks that the paintings might have been sold at auction;
·     that she worked for that gallery at some point but that the gallery has “gone broke”;
·     that the …[named artwork] had been purchased by her in 1998 for $24,000 but that it had recently been valued for $15,000 to $16,000;
·     that the …[named artwork] had been purchased by her in 2002 for about $5,000;
·     that the …[named artwork] had been purchased by her for $4,500;
·     that the [named] painting had been purchased by her for $4,000;
·     that she had never told the husband during the marriage that Mr D forgave the debt;
·     that Mr D gave the Rolex watch back to her and she still has it and she says it is worth $8,000;
·     that contrary to what the email she sent to the husband’s solicitors in March 2011 said, she did not sell the engagement ring in March 2011.
When the wife was asked had she lied to the husband’s solicitor in the March 2011 email when she had said she sold the engagement ring, she gave a big smile and simply said “yes”. I sensed the wife was very proud of that fact.
I am not satisfied that the wife told the truth about her dealings with the artwork and the jewellery following separation. I do not accept that she transferred paintings and jewellery, as she asserted, to Mr D in discharge of a twenty year old debt. There was no evidence of pressure from him for repayment. Her apparent cavalier attitude to having the items properly valued before the alleged transfer fortifies me in rejecting her evidence about this matter. The pride with which she declared she had previously lied to the husband’s solicitor caused me to consider that she was not concerned at all about lying. The wife was acutely aware of the husband’s position with respect to those items she retained in her possession prior to the alleged transfer. Indeed, he was proposing an orderly sale and use of the sale proceeds to repay some of the enormous credit card debt the parties have. I am satisfied that the wife simply elected to retain the jewellery and artwork for her own benefit at the time and that she has probably sold some of it and retained and used the sale proceeds to support herself and the child, retaining the rest in her possession, meaning it is still available for sale if necessary.
The dilemma that faces the Court is that there is no evidence upon which any reliable findings as to the value of all of those items that she sold or still retains can be made. I simply cannot determine the value of all the items the wife retained at separation or those which she retained as at the trial. I cannot determine the amount she has received on the disposal of any such items. Of course, in such circumstances, a robust approach is permissible and there can be no doubt that the paintings and the jewellery retained by the wife at separation, some of which I am sure she still possesses, were worth tens of thousands of dollars. However, in the circumstances of this case, I do not believe that I am required to ascribe a value to those items retained by the wife and to include that value in the pool and to treat it as partial property settlement already received by the wife, in order to arrive at orders that are just and equitable as between these two parties.
The parties agreed to an order in May last year that the characterisation of the retention by the wife of any proceeds of sale of any such items since separation as partial property settlement or spousal maintenance was a matter to be left for the trial judge. They also agreed to a single expert valuing any items remaining in the possession of the parties. That has not happened and, consequently, the Court has no reliable evidence of value of the items of personal property each party retains in their possession.
For the first few months after separation, whilst the wife had little in the way of her own income to support herself and the parties’ child, the husband made weekly payments to the wife for her support and the child’s support. He was paying $2,000 per week, presumably based on his own assessment of the wife’s needs for herself and the child. He was also making credit card repayments in respect of the vast array of credit cards the wife had in her name. He also caused lease repayments to be made in respect of the Mercedes Benz motor car the wife was driving at the time of separation.
In January 2010, he stopped paying the credit card repayments. He reduced the weekly cash support to $1,500 and he stopped paying the lease payments in respect of the wife’s car. At some point soon thereafter, the wife had to deliver that car to a dealer for it to be sold. She was left without a car. There was a shortfall of $69,059 on the amount required to pay out the lease liability.
By early March 2010, the husband reduced the wife’s cash support to $500 per week and by mid-March he ceased paying her any such amount and began paying her $196 per week by way of child support.
From that point on, the wife, whilst continuing to live in the Gold Coast 2 property at no cost to her, had to financially support herself and the child from her own efforts whilst at the same time deal with the numerous creditors chasing her for repayment of hundreds of thousands of dollars of debts incurred during the marriage in her sole name.
On 24 August 2010, FM Cole made an order that the husband pay the wife spousal maintenance in the sum of $500 per week commencing from 31 July, 2010. The evidence satisfies me that the husband complied with that order until 3 October 2010 before simply unilaterally ceasing to pay it anymore. As already mentioned, he sought an order from me on 8 April 2011 that the spousal maintenance order be discharged because he had no capacity to pay it. I suspended the order from that date and left the determination of the wife’s enforcement application to the trial.
I am satisfied that the spousal maintenance order should be discharged as at 3 October 2010 and that is what my orders will do. However, I am also satisfied that the wife had substantial financial need, for her own support and the support of their daughter. I am satisfied that she was not able to support herself fully from her own income and earning capacity and that the $500 per week she received from the husband for the short period between August and early October 2010 would not have sufficiently met the shortfall in her needs during those months. I am satisfied that she did sell some of the artwork, jewellery and personal possessions and has continued to do so from time to time since separation and that she has used the proceeds of sale to meet the financial needs of herself and the child since separation.
At the same time as I am satisfied that the wife retained jewellery and artworks of considerable yet undeterminable value when she and the husband separated, I am also satisfied that the husband retained jewellery and other items of value. He did not even answer in evidence the wife’s assertion that he retained a dinghy and outboard motor that she claimed were worth $15,000 and that she had asked to be sold by Mr Y. As I have observed already, neither party put appropriate valuation evidence before the Court in respect of the personal possessions each retains. The husband also gave evidence that he purchased $12,000 worth of furniture for his own needs since separation. He clearly still possesses that.
Of course, the Court could order the sale of all remaining items in the parties’ possession. Sale of property is often the most appropriate outcome when value cannot be determined. However, I do not consider sale to be the best outcome in the circumstances of this case. I would not be confident that all such items would be put up for sale and appropriately accounted for by each party and there would simply be too many items of personal property to make it practicable. I have determined to deal with this issue by simply making orders that allow each party to retain ownership of that which they already have in their possession and for the husband to keep any items that are left in the Gold Coast 1 property. I will consider those items of property as retained by each party as offsetting the personal property in the other party’s hands without any amount of value being ascribed to the property pool in respect of the property retained by each of them. I do accept, without a doubt, that the value of the items retained at separation by the wife exceeds the value of the items retained by the husband by many thousands of dollars. However, in all the circumstances, particularly the difficulty in determining, even approximately, the greater value retained by the wife or the actual amount realised by her on the sale of those items that she has sold, I determine to treat such excess value as having been utilised by the wife for her financial support and the support of the child, C, since separation. Of course, the retention and use by her of personal property acquired by her and the husband during the course of their cohabitation is a matter that must also be considered when considering the various contributions of the parties. Clearly, the use by the wife of funds obtained by selling such personal property must be regarded as contribution made by the husband towards her wellbeing and the wellbeing of their child post-separation.

The Remaining Liabilities on which there is no Agreement

I accept the evidence that there is $12,808 owing in respect of Body Corporate fees for the Gold Coast 2 property. I can think of no reason the wife would have to be overstating that figure. I accept that an amount of $11,006 is owed to E Pty Ltd in respect of the kitchen installation at the Gold Coast 2 property prior to separation. At the same time, I accept the liabilities the husband asserts he has to American Express, Bendigo Bank, Citibank and St George Bank. The wife did not dispute them. She just did not have any basis, as I understood her position, to contradict the husband’s assertions. I will include all of those liabilities when determining the pool of property to be subject to s 79 orders.

The “Add Back” argument

I have already determined how I will deal with the artwork, jewellery and other personal items retained by the parties. It is thereby apparent that I do not intend to add back into the pool of property any further amount, let alone the $310,000 contended for by the husband, in respect of jewellery and artwork retained and/or disposed of by the wife since separation.
As to the sum of $298,312 particularised by the husband in his affidavit that I have set out in the table included in paragraph 47 of these reasons, I am of the view that items 3 to 9 are matters to be considered as post-separation contributions by the husband. I do not consider it appropriate, having regard to principles established by the Full Court’s decisions in Omacini (2005) FLC 93-218, Cerini [1998] FamCA 143 and Chorn v Hopkins (2004) FLC 93-204, to add these amounts back into the pool of property.
As to the amounts paid by the husband for the single expert valuations that are items 1 and 2 of that table, I observe that paragraph [19] of the orders of FM Slack of 26 May 2010, that the parties consented to, provided:
That the costs of the Court Experts are to be paid by the Applicant at first instance on the condition that these costs be reserved to the trial.
I interpret that to mean that I can consider, having regard to all of the matters contained in s 117, whether to make a costs order, that the wife contributes some share of the cost of the experts as set out. I do not consider it a matter to determine pursuant to “add back” principles. I shall return to it later.

The Pool

Accordingly, I find that the assets and liabilities of the parties that can be made subject to property alteration orders pursuant to s 79 are:

Item No. Description of Property Ownership Ascribed Value

1 Real Property at Gold Coast 1 property Wife’s name $1,450,000

2 Gold Coast 2 property Wife’s name $590,000

Sub Total $2,040,000

3 Husband’s interest in legal practice Husband $219,062

Total $2,259,062

Item No. Description of Liability Person Liable Ascribed Value

4

Liability to Aussie Home Loans secured by mortgage registered over Gold Coast 1 property

Husband and Wife

$1,744,316

5

Liability to Aussie Home Loans secured by mortgage registered over the Gold Coast 2 property

Husband and Wife

$647,420

6

Liability to Toyota Finance in respect of lease of Mercedes Benz CLS350 motor car sold by wife leaving shortfall owing

Wife

$69,059

7

Rates owing for Gold Coast 2 property

Wife

$1,248

8

Water rates owing for Gold Coast 2 property

Wife

$579.37

9

Water rates owing for Gold Coast 1 property

Wife

$434.92

10

American Express Credit card no

…000

Wife

$6,715.38

11

American Express Credit card no

…008

Wife

$24,366.51

12

HSBC Credit card

Wife

$2,490.05

13

Westpac Credit card

Wife

$10,822.04

14

Citibank Diners Credit card no

…883

Wife

$58,106.67

15

Citibank Diners Credit card no

… 677

Wife

$54,890.35

16

Citibank Platinum Visa Credit Card no …649

Wife

$67,287.23

17

ANZ Credit card no …552

Wife

$29,263.91

18

ANZ Credit card no …762

Wife

$423.56

19

Bendigo Bank Credit card

Wife

$17,489.03

20

Myer card

Wife

$6,267.09

21

David Jones card

Wife

$10,160.95

22

NAB Visa Credit card

Wife

$26,695.68

23

Body Corporate fees owing in respect of Gold Coast 2 property

Wife

$12,808

24

Liability to E Pty Ltd in respect of installation of kitchen to Gold Coast 2 property

Wife

$11,006

25

2 x American Express Credit cards in husband’s name

Husband

$26,000

26

Bendigo Bank Credit card in husband’s name

Husband

$25,000

27

Citibank Credit card in Husband’s name

Husband

$6,000

28

St George Bank line of credit

Husband

$25,000

29

Husband’s 70% share of legal practice liabilities in respect of plant and equipment

Husband

$52,500

30

Husband’s 70% share of legal practice overdraft

Husband

$70,000

31

Husband’s 70% share of fully drawn advance loan

Husband

$65,000

32

Husband’s 70% share of legal practice liability for GST, Group tax and superannuation

Husband

$70,000

Total of liabilities

$3,141,349

Excess of Liabilities over assets

$882,287

I am moved by a few other aspects of the evidence, given those matters I am required to consider pursuant to s 79(4)(e) and s 75(2). The wife has contributed to the husband’s current earning capacity by principally caring for the child since she was born, thus allowing the husband to focus on his legal career as he did. The fact that he does not want to spend Saturdays with the child now because he is committed to working in the office on those days is a perfect example of how the wife continues to contribute to the husband’s earning capacity.
The husband has re-partnered in a committed, personal relationship with a person who is in full-time employment. Cohabitation with that person will bring with it some economies of scale and savings for the husband on the financial front. On the evidence, I am satisfied cohabitation is likely to happen in the not too distant future, if it has not happened already.
The wife, by agreement between the parties, is going to continue principally caring for and financially supporting the child. Being forced into unwanted bankruptcy is hardly something that she would relish when struggling with little direct financial assistance from the husband to support herself and the child. She is most unlikely in the foreseeable future to enjoy a similar standard of living to that which she and the husband enjoyed during their marriage or to that which the husband is likely to enjoy in the foreseeable future having regard to the substantial difference in their earning capacities.
I am also required to consider the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that is relevant. As I have already observed, I am not permitted to make orders pursuant to s 79 that cause prejudice to the rights of creditors. However, if orders that are considered just and equitable as between the parties, actually enhance the prospects of creditors recovering the liabilities owed to them, it could hardly be inappropriate to make them.
Finally, I may consider any fact or circumstance which, in my opinion, the justice of the case requires to be taken into account. I am satisfied that the high level of debt that the parties had in the last years of their marriage and at their separation is not something that should be laid at the feet of one of the parties solely. I am satisfied that a substantial amount of the liability in the wife’s sole name is in respect of expenditure on credit cards that was committed to for the use of the husband’s legal firm, particularly before the global financial crisis, as well as for the joint purposes of the parties as opposed to the sole use and benefit of the wife. I am satisfied that the lease that was taken out in respect of an expensive Mercedes Benz motor car that the wife drove and for which she was, ultimately, solely liable, was taken out in a marriage context where both parties agreed to possess and drive very similar expensive motor cars. To leave the wife in a position where she is solely liable for hundreds of thousands of dollars worth of debt incurred in a marriage partnership context in circumstances where she has no capacity to meet that debt whilst having to principally financially support the only child of the relationship would not, in my opinion, be a just result. Leaving her in that position simply increases the likelihood of bankruptcy and poverty for her and the child whilst at the same time reducing the prospect of bankruptcy for the husband. I consider the often cited words of Baker J in Kowaliw (1981) FLC 91-092[13] to be apposite. I do not accept that either one of the parties is any more personally responsible for the level of the debt than the other.
[13] at [76,643]-[76,644]
In all the circumstances, I do not consider it just and equitable to divide the net debt between the parties, leaving the wife solely responsible for all the debt in her sole name.
The husband makes a good argument in respect of the two real properties in the wife’s sole name. He is earning substantially greater income than the wife and has the capacity to continue doing so into the future. He has been meeting the repayment liabilities in respect of the two properties since separation and in circumstances where he is likely to continue doing so in the future, he proposes the transfer of the two properties to him and the provision of sole use and exclusive occupation to him so that he can rent them, or at least one of them, to a third party as soon as possible, thus increasing the income he has at his disposal to use for repayment of debt. It would also enable him to take advantage of negative gearing principles for the reduction of his taxable income thus freeing up more income for debt repayment.
I have been attracted to that proposal and indicated to the wife on the occasion of the hearing of an application in a case since I reserved my decision in this matter that I would be most likely to be acceding to that submission by the husband.

The Fourth Step in this Case

I consider it just and equitable in all the circumstances of this case to order the wife to vacate the Gold Coast 2 property and give up vacant possession of it to the husband within four weeks of the date of my orders. That will give the wife time, particularly since she has been well and truly forewarned that it was going to happen, to find and move to alternative accommodation either in Brisbane or on the Gold Coast.
I consider it just and equitable to order the wife to transfer all of her right, title and interest in the two real properties to the husband. By having the sole legal title to both properties and, therefore, the right to any and all income produced by those two properties, the husband will be in a far better position to be able to discharge the parties’ liabilities.
The husband is most unlikely though, in the current circumstances, to be able to have the wife released immediately from her personal guarantees in respect of the mortgages secured over the two properties and, as such, she will remain exposed, potentially, to liability in respect of those mortgage debts that currently exceed the value of the property that is security for them. Nevertheless, I will order that he takes all steps necessary to have her released from her personal guarantees in respect of those mortgages as soon as that is possible.
I am satisfied that the husband will make every effort to repay the liabilities for which he is personally responsible. Indeed, I am satisfied that he has a reasonable capacity to be likely to be able to satisfy creditors or to reach satisfactory accommodations with them. I am satisfied that he has that capacity in respect of all of the debts that came out of this marriage, including those in the wife’s name alone. I consider it far more likely that he, as opposed to the wife, can avoid bankruptcy. I do not consider that it is just and equitable to make orders that place the wife in a position where she is likely to be made bankrupt but that leave the husband in a position where he is able to avoid it. I make orders that, I consider, give both parties prospects of coming out of the current debt crisis avoiding bankruptcy along the way. The husband is left in the position where he might have to meet much if not all of the outstanding debt of both parties, but I take that into account when dealing with the wife’s spousal maintenance and child support departure applications.
As I have already observed, I cannot make orders that prejudice the rights of third party secured or unsecured creditors where they have not been parties to the proceedings and have not had a right to be heard in them. I can though make orders altering rights as between the husband and the wife. I include in the orders I make, an order, that the husband indemnifies the wife in respect of all of the credit card liabilities that she had in her sole name at the date of separation and the interest that has accrued on those amounts since the date of separation. I will include in that order, indemnity in respect of the car lease liabilities of the wife. Such indemnity does not change the rights of the wife’s creditors or the primary liability of the wife to those creditors. What my order is intended to do is to create a situation where if any of the creditors commence litigation against the wife to recover any of the outstanding liabilities the wife can join the husband in any such proceedings on the basis of the indemnity I include in these orders. In such circumstances, either some accommodation is then required to be arrived at between the husband and the wife and the creditor or both parties risk bankruptcy. That is, in my view, in accord with what is a just and equitable outcome in these proceedings.
I will also discharge previous orders appointing Mr Y, solicitor, as trustee to sell property of the parties. Mr Y was unable to sell any property due to the fact that the debts secured by mortgages over the properties exceeds the likely sale price of the properties making it improbable that he could pass clear title to any purchaser. He appeared at the commencement of the trial, explained this position to the Court and sought to be discharged. Neither of the parties opposed such discharge. All property previously vested in Mr Y on trust will, pursuant to my orders, vest in the husband.
I will also make orders pursuant to s 106A of the Act authorising the Registrar of the Brisbane registry of this Court to sign any documents necessary to give effect to my orders in the event that either party refuses or neglects to sign any such documents.

SPOUSAL MAINTENANCE

The husband applied for an order discharging the spousal maintenance order of FM Cole made 24 August 2010 as from 3 October 2010, the date the husband unilaterally ceased paying the wife the sum of $500 per week as ordered. The wife opposed his application and sought enforcement of the order. As I have already noted, I suspended the order in April last year prior to the trial and left the applications for discharge and enforcement for the trial.
Section 74 of the Act gives the Court discretion, in proceedings with respect to the maintenance of a party to a marriage, to make such order as it considers proper for the provision of maintenance. In exercising this jurisdiction, the Court is to have regard to all of the matters set out in s 75(2). I am satisfied, in all the circumstances of this case, particularly having regard to:
(i)my findings that from the date of separation the wife retained to her use and benefit jewellery, artworks, furniture and other items of personal property worth tens of thousands of dollars that were not included at a specific value in the pool considered for the property division, and that she has sold some of those items, retaining and using the sale proceeds to her own needs; and
(ii)my intention to make orders pursuant to s 79 of the Act that include an order that the husband indemnifies the wife against liability for debts in her name;
that it is proper to discharge FM Cole’s spousal maintenance order as at the date the husband stopped paying the weekly amount. I will do so.

CHILD SUPPORT DEPARTURE AND SUBSTITUTION ORDER

The wife makes application for orders pursuant to the provisions of Part 7 Divisions 4 and 5 of the Child Support (Assessment) Act 1989 (“the Assessment Act”). Firstly, she seeks departure from the administrative assessment of child support and an order that the husband pay child support in the sum of $81,744 per year. She sought such a departure from the date of separation. Secondly, she seeks an order that the child support the husband is to pay the wife be paid by way of a lump sum of $653,952.
The husband opposed the hearing of the wife’s application but at the outset of the trial I determined to hear it along with the other applications that were before me, relying on the provisions of s 116(1)(b) of the Assessment Act and my determination that it was in the interest of the parents and the child for the Court to consider the wife’s application at the same time as the other applications that were being heard.
Pursuant to s 117 of the Assessment Act, the Court has discretion to make a departure order in the special circumstances of the case where the Court is satisfied that one or more of the grounds for departure[14] exists or exist and that it would be just and equitable as regards the child and the parents and otherwise proper to do so.
[14]Child Support (Assessment) Act 1989 (Cth) s 117(2)
In this case, the evidence establishes that the Child Support Agency assessed the husband’s liability for child support for the child at the weekly rate of $67.10 for the period 1 July 2011 to 30 September 2012. There is evidence that prior to that, during the period from after separation in October 2009, the husband had been assessed as liable to pay $196 per week and that he was claiming a 25% credit against that for the school fees he was paying for the child that were actually in excess of that weekly amount of child support. He was being given credit for the payment of school fees and his weekly payment was reduced to around $130. The wife would have the husband’s assessment increased to an amount of $1,572 per week then would have eight years of payments capitalised and paid as a lump sum. She says she would then be responsible for all school fees.
The husband, on the other hand, through his counsel, made submissions that he would consent to a departure from administrative assessment and an order fixing his liability at $1,000 per month. In addition to that amount, he said that he would continue to pay the school fees for the child at S School, an amount of about $16,000 per year.
I am satisfied that there are special circumstances in this case justifying considering a departure application pursuant to s 117 of the Assessment Act. The fact that the parties’ liabilities exceed the value of their property as well as the fact that I make orders that has the husband retaining their two real properties as well as ultimately indemnifying the wife in respect of all debt are certainly special circumstances requiring consideration of the child support departure application.
The fact that the maintainable income of the husband from the legal practice was determined by Mr B in September 2009 to be just under $100,000 after allowing for a commercial remuneration of $250,000 and the fact that more recent figures support a finding that there has been only a little reduction in that in recent times are relevant matters to take into account. Of course, the husband’s actual taxable income does not reflect that level of income as its assessment is based on allowable deductions for interest, bank fees and charges and very expensive motor vehicle running expenses. Some of that debt that the husband is carrying is debt that existed at separation. Pursuant to my orders pursuant to s 79 of the Act, the husband will ultimately be liable for even more debt, all of which is debt of the parties from before separation.
I am satisfied that application in relation to the child of the provisions of the Assessment Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of child support to be provided by the husband because the father’s taxable income does not accurately reflect the reality of his income having particular regard to the expenses deducted against the gross income of the legal firm to achieve his taxable income. I am satisfied that without departure from them the provisions of the Assessment Act relating to administrative assessment of the husband’s liability for child support for the child would also result in unjust and inequitable determinations of the level of child support into the future bearing in mind the likelihood that high levels of interest, bank charges and expensive motor vehicle expenses are likely to continue to be deducted before his taxable income is determined and also considering the fact that the husband will have even greater opportunity to reduce his taxable income due to legitimate negative gearing with the real properties that are going to be transferred to him pursuant to my s 79 orders.
I must have regard to the matters set out in s 117(4) of the Assessment Act in determining whether it would be just and equitable as regards the child and the parents to make a particular departure order. I consider all of those things set out in that subsection, particularly:
(i)the nature of the duty of a parent to maintain a child;
(ii)the child’s proper needs;
(iii)the fact that the wife is going to take a few years to rebuild an earning capacity of around $50,000 and that she will be bearing the substantial responsibility for financially caring for the child from her own income and will have only jewellery, artwork and her personal possessions as property that she may be able to draw on for support additional to any income she earns and the hardship that will be caused to the child by refusal to make a departure order;
(iv)the income and earning capacity of the husband, particularly having regard to Mr B’s opinion evidence about that, which I have accepted;
(v)the fact that he husband will be, by my orders pursuant to s 79 of the Act, in the position of having to bear responsibility, ultimately, for dealing with all of the parties’ pre-separation debt as well as his own incurred since separation;
I also particularly consider the fact that the husband proposed in submissions at the end of the trial that his child support liability be fixed at $1,000 per month and that when proposing this he was still proposing to pay the child’s private school fees of approximately $16,000. I do not accept that the husband alone or the husband and the wife jointly have the capacity to continue to pay the child’s school fees. My orders in respect of the child’s schooling reflect that view and give the mother the sole right to move the child to a school where the fees are less or even to a State school where there are very limited fees charged. I consider it far more essential that the father’s income and earning capacity, affected as it is and will be by the ultimate responsibility for the pre-separation debt of the parties, is directed to meeting his primary duty to contribute to the essential day to day needs of the child as opposed to the luxury of an expensive private school education. Of course, if he can still find his way to being able to meet those school fees over and above the child support he will be liable for pursuant to my departure orders and the s 79 obligations, and the wife is prepared to keep the child enrolled at S School, that is a matter for the two of them. Private schooling of the child will just have to be appropriately considered after other more essential matters are, by the orders that will be made, prioritised.
I determine that it would be just and equitable for the child and the parents in this case to fix, by departure from the administrative provisions of the Assessment Act, the husband’s liability for child support in the amount of $200 per week or the annual amount of $10,400. Having regard to the provisions of s117(5) of the Assessment Act, I determine it would also be otherwise proper to make an order to that effect and I will do so.
I will only make the departure order commence as at the date of my orders as I do not consider it appropriate to create an immediate arrears of several thousand dollars as would happen if I backdated my order. I consider it appropriate to put the departure in place for the periods from the date of my orders to 30 June 2012, 1 July 2012 to 30 June 2013, 1 July 2013 to 30 June 2014 and 1 July 2014 to 31 December 2014. That will provide certainty to the parties for a reasonable length of time and give respite to them both from further applications for that period. It will also, importantly, allow the husband a reasonable period of time within which to deal with the responsibility of meeting all of the liabilities my decision and my orders will place upon him.

I am simply not persuaded that it is just and equitable to make an order pursuant to Part 7 Division 5 of the Assessment that the periodic child support be capitalised and be ordered to be paid in a lump sum. There is just no basis for such a determination in this case. The husband has been paying child support as assessed and he simply does not have the capacity to pay any lump sum in lieu of periodic child support. The wife’s application is quite misguided. I dismiss the wife’s application for such an order.

CONCLUSION

I consider that the orders that I make pursuant to s 79 of the Family Law Act reflect, in all the unusual circumstances the this matter, a just and equitable determination of their financial affairs, particularly when considered in conjunction with the orders discharging the interim spousal maintenance order and departing from the administrative provisions of the Child Support (Assessment) Act that I also intend to make.
I order, pursuant to s 117 of the Act, that the wife pay the husband the sum of $3,500 towards the costs he paid for the single expert reports from HW and Mr B. Having regard to the income and earning capacity of both of them and the mother’s principal responsibility to care for their child in the future, I consider that a just and equitable sharing of the those costs paid up front by the husband.
Accordingly, I order in terms set out at the outset of these reasons.

I certify that the preceding one hundred and sixty (160) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 13 April 2012.

Associate:

Date: 13 April 2012

[2012] FamCA 227

13 April 2012

Key Legal Topics

Areas of Law

Family Law

Property Law

Equity & Trusts

Legal Concepts

Consent

Injunction

Costs

Remedies

Item No.	Description of Property	Ownership	Agreed Value
1	Gold Coast 1 Property	Wife’s name	$1,450,000
2	Gold Coast 2 Property	Wife’s name	$590,000
Sub Total	$2,040,000

Item No	Description of Liability	Owed by	Amount of Debt
14	Liability to Aussie Home Loans secured by mortgage registered over Gold Coast 1 property	Husband and Wife	$1,744,316 (note property only worth $1,450,000)
15	Liability to Aussie Home Loans secured by mortgage registered over Gold Coast 2 property	Husband and Wife	$647,420 (note property only worth $590,000)
16	Liability to Toyota Finance in respect of lease of Mercedes Benz CLS350 motor car sold by wife leaving shortfall owing	Wife	$69,059
17	Rates owing for Gold Coast 2 property	Wife	$1,248
18	Water rates owing for Gold Coast 2 property	Wife	$579.37
19	Water rates owing for Gold Coast 1 property	Wife	$434.92
20	American Express Credit card no …000	Wife	$6,715.38
21	American Express Credit card no …008	Wife	$24,366.51
22	HSBC Credit card	Wife	$2,490.05
23	Westpac Credit card	Wife	$10,822.04
24	Citibank Diners Credit card no … 883	Wife	$58,106.67
25	Citibank Diners Credit card no … 677	Wife	$54,890.35
26	Citibank Platinum Visa Credit Card no …649	Wife	$67,287.23
27	ANZ Credit card no …552	Wife	$29,263.91
28	ANZ Credit card no …762	Wife	$423.56
29	Bendigo Bank Credit card	Wife	$17,489.03
30	Myer card	Wife	$6,267.09
31	David Jones card	Wife	$10,160.95
32	NAB Visa Credit card	Wife	$26,695.68
Sub total	$2,778,035

Item no	Item of Expenditure	Amount
1	HW Valuations of real property	$1,650
2	B Valuation report	$9,262.14
3	Interest paid on loan secured by Gold Coast 2 property mortgage	$55,000
4	Rates at Gold Coast 1 and Gold Coast 2 properties	$4,500
5	Interest paid on loans secured by Gold Coast 1 property mortgage	$200,000
6	American Express Credit cards	$7,000
7	Bendigo Bank Credit card	$4,800
8	Citibank Credit card	$1,500
9	St George Overdraft account	$4,600
Total	$298,312.14