BEATON and BALLAM

[2014] FCWA 20

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY LAW ACT 1975

LOCATION: PERTH

CITATION: BEATONand BALLAM [2014] FCWA 20

CORAM: CRISFORD J

HEARD: 6, 7 & 14 MARCH 2014

DELIVERED : 28 MARCH 2014

FILE NO/S: PTW 3353 of 2012

BETWEEN: MS BEATON

Applicant

AND

MR BALLAM Respondent

Catchwords:

FAMILY LAW - PROPERTY PROCEEDINGS - Where it is just and equitable to alter the parties' rights and interests in their property

FAMILY LAW - ASSET POOL - Whether invested conditional share units from employment plans are property or a financial resource - Where shares cannot be sold, transferred or dealt with until they vest - Invested shares a financial resource

FAMILY LAW - SPOUSAL MAINTENANCE - Where wife primary caregiver to parties' two children aged 11 and eight, the older suffering severe disabilities - Wife out of paid employment since 2002 - Entitlement made out

Legislation:

Family Law Act 1975 (Cth)

Category: Not Reportable

Representation:

Counsel:

Applicant: Mr P Dowding SC

Respondent: Mr D Smith

Solicitors:

Applicant: Holden Barlow

Respondent: O'Sullivan Davies

Case(s) referred to in judgment(s):

Beklar & Beklar [2013] FamCA 327

Bevan v Bevan (2013) FLC 93-545

Clauson & Clauson (1995) FLC 92-595

Gollings & Scott (2007) FLC 93-319

Hurst and Weber [2009] FamCAFC 137

Milankov & Milankov (2002) FLC 93-095

Nielson & Nielson [2012] FamCA 70

Sand and Sand [2012] FamCAFC 179

Stanford v Stanford (2012) 247 CLR 108

Woollams and Woollams (2004) FLC 93-195

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

Introduction and background

1I am asked to determine how the assets [Ms Beaton] and [Mr Ballam] acquired during their 16 year relationship should be divided. The wife asks the Court to quantify an appropriate level of spousal maintenance for her support and also an appropriate level of child support for the two children of their relationship, [A] aged 11 and [B] aged eight.

Brief relevant chronology

2The wife and the husband met in 1994 and started living together in 1995. They married [in] 1996 in Sydney and separated on [in] April 2011 in Perth.

3The husband was originally employed as a [customer service representative]. He is now employed as the Vice President of [a project] within [a company]. The wife initially worked as a receptionist/administration assistant until the birth of [A] [in] 2002. The wife has not worked since that time. [B] was born [in] 2005.

4Dr [W], Paediatrician, reports A has Down Syndrome and an associated major diagnosis of severe intellectual handicap, autism and mild to moderate hearing loss. A had congenital heart disease in early life, but cardiac function is now normal. He has limited communication, with mostly single words, and only rare word combinations. A cannot read or write. He is incontinent of urine and faeces. He does not have severe aggression or self-injury. A cannot look after his nutritional needs independently and he requires assistance in dental care and some assistance in feeding. It is common ground that A will continue to be severely handicapped into adult life and will require supervision and assistance throughout his life.

5After the parties married they lived overseas in various locations, including New Zealand, the Hague, Netherlands, Singapore and finally they moved to Perth in late 2007.

6At the date of separation the parties were living at [Property A], a property they had purchased in 2008 for $1,475,000. The wife and children remained in the property until it was sold for $2 million [in] October 2013.

7An order was made by consent on 7 March 2014, after the close of evidence, for the wife to receive the net proceeds of sale of the home of $798,977 with any accumulated interest.

The law to be applied

8The High Court has set out the principles applicable to the determination of property settlements in Stanford v Stanford (2012) 247 CLR 108. From this the Full Court of the Family Court (per Bryant CJ and Thackray J) has summarised three fundamental propositions which will provide useful guidance to trial judges in approaching the task of apportioning property after the breakdown of a marriage (or de facto marriage). These were set out recently in Bevan v Bevan (2013) FLC 93-545 as:

1. Determination of a just and equitable outcome of an application for property settlement begins with the identification of existing property interests (as determined by common law and equity);

2. The discretion conferred by the statute must be exercised in accordance with legal principles and must not proceed on an assumption that the parties’ interests in the property are or should be different from those determined by common law and equity;

3. A determination that a party has a right to a division of property fixed by reference only to the matters in s 79(4), and without separate consideration of s 79(2), would erroneously conflate what are distinct statutory requirements.

9There is an initial question of whether it is just and equitable for the court to make any orders altering the existing property interests of the parties. If the answer to that question is yes, then the court is to determine the manner in which, and the extent to which this should be done. There is nothing to suggest that in carrying out that exercise the four step approach previously adopted should not apply. These steps are:

•to make findings as to the identify and value of the assets and liabilities of the parties;

•to identify and assess the contributions made by the parties to the assets;

•to identify and assess the range of factors set out in s 79(4)(d)-(g) of the Act; and

•to consider whether the orders proposed is just and equitable.

10Point three set out above in Bevan [supra] demands a dual consideration of issues arising under s 79(2) and s 79(4) of the Family Law Act 1975 (Cth) (“the Act”). These are intertwined, but they are different considerations.

Orders sought by the parties

11Overall, the wife is seeking a 75 per cent split of the parties’ assets. In practical terms she wants to be in a position to purchase a property in the same area as the former matrimonial home. She currently rents a property in the [Suburb A] area. She wants the home to be commensurate with the standard previously considered by the parties as appropriate for the family. The children live with her for the majority of the time.

12In order to facilitate the obtaining of such a property the wife proposes that the husband procure a mortgage over a property she nominates and that he service the debt. She anticipates that such an arrangement would be a combination of a property settlement and maintenance. She otherwise seeks a raft of orders to secure a share of the husband’s present and ongoing wealth.

13It is common ground that the orders sought by the wife for periodic child support marry with the existing administrative assessment of child support the husband is currently to pay for the children.

14It is also common ground that the husband will pay, by way of non-periodic child support, some other school and health related expenses for the children.

15It is agreed that the annual rate of child support will not to be reduced by the non-periodic child support provided above.

16The wife also seeks a weekly payment of spousal maintenance of $1,903 to be indexed according to the Consumer Price Index on an annual basis.

17The husband is of the view that the wife should receive 60 per cent of the assets. He accepts she should receive all of the readily available liquid assets and that he should retain his superannuation entitlement. He says as a result of not receiving any of the presently available assets, there should be a decrease in what the wife might otherwise have secured by way of percentage allocation. He says 60 per cent is just and equitable.

18The husband strongly opposes any payment of spousal maintenance to the wife. He says he is simply unable to afford to do so and that she can support herself.

Balance sheet of the property

Description	Ownership	Value
HSBC Bank account	Husband	435
HSBC Bank account	Husband	245,825
HSBC Bank account	Husband	65,126
[A] Personal account	Husband	227
[A] Personal account	Husband	47
[A] Personal account	Husband	284
NAB Cheque account	Husband	149
NAB Keycard Mortgage Payments	Husband	15
Employee shares and options
Ordinary Fully Paid (1650)	Husband	64,515
Ordinary Fully Paid (1504)	Husband	58,806
Employee shares under loan:
1995 under loan (1000 – loan value 6424.68)	Husband	32,675
1997 under loan (500 – loan value 3557.46)	Husband	16,867
Vested:
2010 [M]shares (grant Oct 10, 3250 vest Aug 2013 – expire 20/10/2016)	Husband	127,075
[R] (was ‘[OS]’) (381)	Husband	630
[Jeep]	Husband	56,900
Household and personal effects	Husband	30,000
Wine (National storage) (E)	Husband	25,000
Push Bikes	Husband	4,000
Sub-total Husband - property	$728,576
Liabilities
HSBC Mastercard	Husband	15
HSBC Mastercard	Husband	324
NAB Visa	Husband	1,209
Tax FY 2013	Husband	95,389
Tax FY 2014	Husband	39,751
Sub-total Husband’s Liabilities	136,688
Total Husband’s Net Property	$591,888
Net proceeds from sale of [Property A]	Wife	798,977
Commonwealth Bank account	Wife	10,143
Commonwealth Bank account	Wife	4,686
[Tarago]	Wife	28,500
House contents and personal possessions	Wife	20,000
Sub-total Wife’s Property	$862,306
Liabilities:
Store account	Wife	958
Wife’s Net Property	$861,348
Total Net Property of the Parties	$1,453,236
Superannuation:
Superannuation Fund	Husband	973,868
CareSuper	Wife	16,748
Total Superannuation	$990,616
Total Net Property including Superannuation	$2,443,852

19There are a number of items in contention that I will deal with. The wife seeks to include as property certain shares and bonus entitlements of the husband. The husband says these are not property and are simply financial resources.

20There is no dispute that shares granted to the husband and that have already vested are property. These have been included in the balance sheet as such.

21The wife sets out other items she considers should be included as property. She has attributed a value to both the unvested shares and the bonus expectation of the husband. Neither the treatment nor the value is agreed by him. The wife’s position is:

Share entitlements:	Value
2011 M Conditional Shares 2400 (grant Oct 11, vest Aug 2014 – expire 30/6/17)	Husband	93,840
2011 [G] Conditional Deferred Shares 1504 (grant Oct 11, vest Aug 2014)	Husband	58,806
2012 G Conditional Deferred Shares 2421 (grant 31 Oct 12 – vest Aug 2014)	Husband	94,661
2012 M Conditional Shares 2600 (grant 31 Oct 12 – vest Aug 2014)	Husband	101,660
2013 M Conditional Shares 2675(grant 31 Oct 13 – vest Aug 2016)	Husband	104,592
2013 G Conditional Deferred Shares 2421 (grant 31 Oct 13 – vest August 2015)	Husband	94,661
Sub-total Husband’s Shares	$548,220
Husband’s bonus expectation to be paid October 2014	Husband	219,213
Cash bonus for 2014	Husband	130,938
Total Expectation	$350,151

22Part of the salary package offered to the husband by the company, and by way of incentive, is participation in what is termed the M and the G.

G

23The G rewards participants annually and is based on performance.

24The participant guide for 2014 states:

A participant’s [G] percentage indicates, as a percentage of Base Salary, the incentive that can be earned when the individual, the business and the Group all fully achieve expectations for the financial year. The actual incentive paid to each participant at the conclusion of the year may be more, or less, taking into account:

•the performance of the Group;

•the performance of the business where the participant worked during the year; and

•the participant’s performance relative to that of their peers.

25The incentive is divided as 50 per cent in cash and 50 per cent in Deferred Shares, which vest approximately two years after the grant. This is provided on the basis the participant remains employed by the company over that time.

M

26M is delivered to participants through Restricted Shares which vest approximately three years from the date of grant provided that the participant remains employed with the company over that time. Any awards are discretionary, subject to annual invitation and the size of the award is linked to the role. The number of shares granted is reviewed annually.

27The participants within the scheme have to ensure that they maintain a minimum shareholding requirement.

28Both the awards are “discretionary, subject to annual invitation, with the size of award linked to the role. The number of shares granted for each role is reviewed annually”.

29The shares allocated under the G and M schemes are not ordinary company shares. They do not provide dividend income or other ordinary shareholder rights. The shares are a conditional entitlement which allows the participant to receive ordinary company shares in the future once conditions are met. There are restrictions on transferring a conditional award. Any transfer of the restricted shares or the creation of any interest in restricted shares in favour of a third party will cause the award to lapse.

Are the shares property or a financial resource?

30Counsel for the wife referred the Court to the Full Court decision of Hurst and Weber [2009] FamCAFC 137 in support of her position. In this case the husband held employee share options in W Limited. The options were valued by an accountant on behalf of the wife, whose report was in evidence before Baumann FM. One of the issues raised at the appeal was that his Honour, contrary to uncontested expert evidence, erred by treating the share options as a financial resource and not as an asset as at the date of hearing.

31At first instance his Honour was of the view:

…that the shares ought be regarded as a financial resource in the future to the Husband, and not be included in the available pool of assets. The entitlements have not vested and there is nothing the Husband can do to make them vest. He must satisfy certain performance hurdles and particularly maintain his employment. These contingencies shape the quantification of the options, but also support a finding that it is proper to regard his interest as a financial resource rather than a current asset.

32The Full Court (Warnick and Boland JJ) in its reasons state at 14:

His Honour did not make a finding that the share options were not property… his Honour did not bring the share options into any pool for division, but rather treated them as a financial resource. We are not prepared to say that that course was not open to him.

33Justice O’Ryan reached a different conclusion in relation to the treatment of the share options. His Honour states at:

52. At the commencement of the trial there was discussion with the Federal Magistrate about various issues including the extent of the net assets. During such discussion counsel for the Husband contended that although it was conceded that at some future time the Husband could exercise the options and “make a profit from them” they should be dealt with as a financial resource. No submissions were made explaining why it was contended that something that was property should be treated as a financial resource. Then during final submissions by counsel for the Husband, in discussion with the Federal Magistrate, the contention was that although the options were property for the purposes of s 4 of the Family Law Act they should be “treated” as a financial resource because of the difficulties as to the “actual value”. However no submissions were made in relation to the valuation of Mr G. Further no submissions were made explaining what the difficulties as to value were. In fact nothing was said as to what was meant by the notion of treating the options as a financial resource.

…

54. … What is important is that the Federal Magistrate said that he accepted the valuation of the options by Mr G namely $79,976. However, the Federal Magistrate then said at [26] that in his view “the shares ought be regarded as a financial resource in the future to the Husband and not be included in the available pool of assets”. The explanation given by the Federal Magistrate for this finding was that the “[t]he entitlements have not vested” and that before they vest the Husband “…must satisfy certain performance hurdles and particularly maintain his employment”. The Federal Magistrate said that “[t]hese contingencies shape the quantification of the options, but also support a finding that it is proper to regard this interest as a financial resource rather than a current asset”.

55. The two contingencies identified by the Federal Magistrate were; first the satisfaction of performance hurdles and; second the maintenance of employment. As to the first matter Mr G made clear that in arriving at his value he had applied a discount “for the risk that the performance hurdles may not be met and therefore some of the options would be forfeited”. As to the second matter Mr G said that “[i]t should be recognised that where an employee ceases employment prior to the vesting of options, they will not provide any value to the employee as all rights will be forgone”. However he said that even if he had “…data on the likelihood of [company] employees as a collective group continuing in their employment” he was “…not aware of how relevant it would be to one specific employee”. None of this evidence was challenged or referred to in submissions of either counsel or in the reasons of the Federal Magistrate.

…

57. If a particular asset is property as defined by s 4 of the Act then it remains property and it cannot be treated as a financial resource. It is not like what happened at the Marriage of Cana. A financial resource is ordinarily intended to be something which is not property but from which a financial benefit is or may be gained. However there may be particular characteristics of an item of property or of a financial resource which have to carefully considered and in consequence of findings may be made either as to value or pursuant to s 75(2)(o) of the Act. For example depending on the circumstances it may be that no value is attributed to shares options or some feature of them is taken into account pursuant to s 75(2)(o) provided there is an evidentiary foundation for such findings and adequate reasons are given. In my view this did not happen.

34Neither party in the case before me has provided a valuation of the award entitlements. The basis upon which the wife attributes a value appears to have been to use the method set out in the husband’s employment documents based on present share values. I do not consider this to be satisfactory. It is not an agreed position. I do not have a value which makes any allowance for either performance hurdles or the risk of cessation of employment. I am simply left without any reliable value.

35In any event, I do not accept that the judgment of O’Ryan J supports the wife’s position. Not only in Hurst (supra) were the shares given a value, but there was acceptance by the husband, being the party entitled to the benefit of the shares, that they were property. He simply sought they be treated as a resource. It was this particular treatment of the shares that his Honour considered, rather than whether the shares were, in fact, property.

36Counsel for the wife also directed the Court to a first instance judgment of Loughnan J of Nielson & Nielson [2012] FamCA 70. Again in this case each party provided expert evidence of a present value of the shares which took into account various contingencies.

37Counsel for the husband referred the Court to Beklar & Beklar [2013] FamCA 327 a first instance judgment of Ryan J. Her Honour discussed the nature of the husband’s employee share units. At 118 and 119 her Honour outlined reasons for finding that the shares be treated as a financial resource:

The non-exhaustive definition of property is found in s 4 of the Act. Reference is there made to “property” as “… to which … that party is … entitled”. In Kennon v Spry (2008) 238 CLR 366 the High Court referred with approval to the wide meaning given to the word “property” in the context of the Act. Reference was made to In the Marriage of Duff (1977) 15 ALR 476 at 484, where, in turn, the Full Court of this Court adopted remarks by Langdale MR in Jones v Skinner (1835) 5 LJ Ch 87 at 90 who said “property is the most comprehensive of all terms which can be used inasmuch as it is indicative and descriptive of every possible interest which the party can have.” The words “financial resource” are not defined in the Act but, as is explained in Kelly and Kelly (No.2) (1981) FLC 91-108 at 76,802, must mean something “not covered by the terms ‘income and property’, for example, contingent interests or benefits which a party actually received or was likely to receive, whether legally entitled thereto or not.”

Two factors are particularly persuasive of the share units being categorised as the husband’s financial resource rather than property. First, he cannot sell, assign or deal with them until they vest. Second, until the shares vest he is entitled to receive dividends on the underlying shares and nothing more. Notwithstanding the husband’s evidence that his position with his employer is insecure, he did not establish his job is in jeopardy or that he is unlikely to be employed by A Ltd when the share units vest. Thus, although one cannot be certain that the husband will definitely be employed when each of the three tranches of shares are due to vest, the probability is that he will and accordingly this factor is a less significant factor than the two already mentioned. However, it too points to the share units being a financial resource rather than property.

38I agree with the propositions put forth by her Honour.

39Justice Coleman discusses the authorities in relation to what constitutes “property” in the appeal judgment of Sand and Sand [2012] FamCAFC 179. Of particular relevance is paragraph 53:

Whilst, as is the case of a reversionary or remainder interest, present entitlement to possession of the property to which a legal or equitable estate or right relates is not necessary for the entitlement, interest or right to be “property”, the authorities suggest that the entitlement, interest or right must presently exist. It is improbable that an “expectation”, or right to “due administration” of a trust or estate which might in the future result in the vesting of “property” in a party to a marriage, in the absence of any legal entitlement by a party to facilitate such vesting could enliven the jurisdiction to make orders for settlement of property pursuant to s 79 of the Act. For a Court to have jurisdiction to make orders pursuant to s 79 of the Act property must be in existence when the jurisdiction to do so is sought to be exercised…

40Although there is no evidence that the husband's employment is uncertain and that he will not meet any of the contingencies, I am not satisfied that the shares, on the state of the evidence before me, can be categorised as property.

41The wife started proceedings on 9 July 2012. It was always apparent that the husband’s income from the company would be pivotal to a determination in a property settlement. This is a case where the appointment of a Single Expert to value the shares would have been of great assistance in clarifying the nature of that part of his salary. Neither party took that course, nor endeavoured to obtain their own valuation evidence.

42I intend to consider this further when I deal the primarily prospective factors set out in s 75(2) of the Act.

43Counsel are of the view that the inclusion of paid legal fees and the borrowings to secure the fees of both parties would make no material difference to the overall outcome in this matter. I agree with this after considering the costs position presented to me. The legal fees of both parties have been removed from the schedule by consent.

44I consider it appropriate to make orders in relation to the parties’ property here. It is just and equitable to do so. If the Court does not make orders then it is likely that the wife will not receive entitlements that reflect a just and equitable outcome after a marriage of 16 years where she has been and will continue to be primarily responsible for the care of the two children.

Contributions

45The parties agree that up until the date of separation their contributions to their marriage were equal. The point of departure on this position of equality is what each contributed after they separated in April 2011.

46The husband's position is that he made the following contributions which need to be taken into account:

•The wife and children were able to remain in the former matrimonial home after separation until October 2013 and the husband was responsible for all the outgoings including the mortgage;

•Prior to the sale of the home he paid approximately $100,000 in improvements to it;

•He paid health insurance for the wife and children until October 2013;

•Following the sale of the former matrimonial home the husband paid $750 a week for the benefit of the wife and children and also paid 100 per cent of school fees and 50 per cent of all extra-curricular activities undertaken by the children; and

•It was informally agreed that the wife would have a total of $60,000 paid to her. This was paid by the husband on 13 September 2013 and he says it comprised $55,000 “partial property settlement and $5,000 spousal maintenance”. The wife received another $40,000 from the sale of shares in her E-trade portfolio on 21 September 2012.

47To counter these arguments the wife identifies:

•She has had the majority care of the children since separation. (Despite his Papers for the Judge noting the wife “continued in her role as primary carer of the children” the husband, through his counsel, denied at trial that this was the case. I will return to this later in the judgment);

•She was not able to access the parties’ bank accounts after mid-2012;

•After the sale of the former matrimonial home she received only $750 a week from the husband for the children and herself despite the fact that their rent alone was $790 a week. She relied upon government assistance;

•The husband's lifestyle has been considerably better than her and the children’s lifestyle;

•She did substantial work herself on the former matrimonial home to prepare it for sale and she presented it regularly for inspection;

•The husband was able to repay a debt to his parents, incurred by him prior to marriage, from the sale of shares acquired during the marriage. This debt of $12,500 was not made known to the wife until its repayment; and

•He has received significant amounts of income, including bonuses, shares and insurance policies.

48The husband provided a schedule of his income and expenditure post-separation. I am satisfied he has had enough to live comfortably, rearrange himself in a new living environment and to cater for his various recreational interests.

49I have considered all of these matters.

50It is apparent that each party has made different contributions over this long relationship. Each was to the fore during different periods of time in terms of contribution.

51After separation the husband initially made what I consider to be an appropriate financial contribution to the welfare of the family. This changed over time. Especially after the sale of the former matrimonial home his financial assistance to the wife was considerably reduced. The husband has earned a considerable income post-separation and he has also accumulated financial resources from his employment.

52The wife has always been the primary care-giver of the two children in difficult circumstances, given A’s disabilities. This includes the time after separation. A’s carers, teachers and paediatrician all gave evidence. I find the wife has had a considerable load to bear since separation in this respect and she has not deviated from a very dedicated and consistent approach. She has been present if needed to assist A not only at school, but in pursuing and arranging various therapies. She has spent an enormous amount of time and effort accessing the very best of opportunities for him in terms of additional funding to ensure his time is spent in a productive and supervised fashion. When A is in respite care she is able to give B the attention he needs and can often miss out on when A has high demands. The husband also has the benefit of the respite and other assistance the wife has accessed for A.

53The wife is a member of CareSuper Superannuation Fund. She had accrued entitlements prior to A’s birth when she was able to earn an income. In her financial statement filed 9 July 2012, her entitlements were $13,372. On 7 January 2014 the entitlements were $16,748.

54The husband is a member of [T] Superannuation Scheme. At the time of separation, at 30 May 2011, his entitlements were $658,744. By 6 February 2014 his entitlements had increased to $961,480.

55I return to the parties’ respective contributions in considering the superannuation. There is no doubt that the husband is able to accumulate significant superannuation entitlements. He has been able to do that by virtue of his employment, an endeavour in which he has been supported by the wife in often difficult circumstances. I consider the wife’s homemaking and contributions to the family, both during the marriage and after separation, have allowed the husband to maximise every opportunity provided by his work and he has been able, despite the parties having a severely disabled child, to channel his energies into earning an income and accumulating work related benefits. In no small part, the wife’s contribution to the family enabled him to do this.

56Whilst there is no presumption of equality of contribution, I am satisfied that when I evaluate the role of the wife as homemaker and parent and the husband’s role as financial provider, I consider that the two very different sorts of contributions are equal.

Primarily prospective factors of s 75(2)

57The wife is now 40 years of age and the husband 41 years of age. They each appear to be in good health. The wife suffers some low level anxiety and depression. I am satisfied that this is likely to ameliorate once the court proceedings are finalised.

58The husband currently earns a base income of $327,345. On 1 September 2014 it is due to be reviewed as it is each year. Over and above this he also has an opportunity to receive shares and bonuses. I do not consider, based on the available evidence, that this is likely to change in the short term.

59The husband, through his counsel in closing submissions, identified that in recent years he has earned bonuses and share options which equate to 80 per cent of his income each year. Since separation he has continued to receive these bonuses and share options. He has been able to access lump sum payments from time to time. Depending upon his continuing employment and performance the husband will receive an ongoing entitlement to shares in the future as well as certain bonuses. The next tranche of shares will vest in August 2014 and others will vest in 2015 and 2016. The husband must maintain a minimum shareholding level and reach certain targets. The husband has an expectation of a bonus in October 2014

60The husband does not have any significant debt to service, although he has some tax liabilities. The husband has a well-established history of earning a significant income. I find his financial future is secure.

61The husband has paid and continues to pay child support. He paid the wife $750 each week for her and the children. In addition to this, he has paid significant school fees for B and has agreed to continue to do so. It is common ground that he is paying over and above what he has been assessed to pay for the children and I take this into account. He will now pay around $500 each week for the children pursuant to an assessment.

62The wife has not worked in paid employment since 2002. I accept it is unlikely she can or will work in the foreseeable future. Even if she does work in the future, she will never earn anything like the income of the husband. Her commitments to A are likely to continue past his 18^th birthday. The husband sees the two boys for four nights out of 14 during term time and for a portion of school holidays periods.

63There is no criticism of the husband for moving into a new relationship and commencing a new chapter in his life. Although the wife has a boyfriend, I am satisfied she does not have the same opportunities as the husband. She is not in a de facto relationship. I find her main focus has been on the children on a daily basis and this will continue. A has a busy ongoing schedule which includes the wife having to adopt an organised and consistent routine. The wife deposes to the difficulties that A is experiencing in detail and I accept her account that these will not diminish in the future.

64She says that A can be difficult to settle at night. This behaviour is irregular and unpredictable and includes turning lights on and off and making noise. She says that in the past few months A has started to have more difficulties with his toileting. Unfortunately, this includes smearing faeces on walls and putting it on his face. It is necessary for him to wear nappies all the time. This often involves soiling of bedding and furniture.

65The husband was very clear that he considers the wife to exaggerate A’s difficulties and her role in caring for him. He said he has a different experience. The Court does not underestimate the fact that A, as he moves into puberty, is growing rapidly and is harder to manage physically and emotionally. The wife said A was getting more stubborn. As an example she cited that he has a habit of dropping to the floor. It is very difficult for her to actually pick him up given his increasing size and weight.

66Although the husband does have the boys on a regular basis, I find he is very eager to preserve his own separate life and fails to understand that the boys, even when they are not with their mother, require her to arrange, plan for and attend to the majority of their needs and interests. This will not diminish in the short term.

67The wife has made, and continues to make, consistent efforts to ensure that A receives the maximum benefits available from carers and independent agencies that provide some respite for her and also allow her one on one time with B.

68On the basis of the assistance the wife receives in caring for A, the husband argues the wife’s need to be involved with A is decreased. I do not accept this proposition and find it to be short sighted. Even if there has been some exaggeration by the wife, I consider it to be minimal and, generally, I accept the description of life in her household now and as it is likely to be.

69Dr [H], Principal of [P] Support Centre, the school attended by A, gave evidence in the proceedings. Her evidence was helpful in identifying the extent of A’s disabilities in a practical sense and how they impact on his life.

70She deposes:

22.… Using respite services are very important; parents as well as siblings need to have time away from a high needs family member to recharge their energy levels and relax. Parents who can support one another in some way are at a huge advantage. [A] receives funding from DSC which enables his parents to obtain some respite and help with his management, which is a great benefit for them. Having a realistic understanding and acceptance of [A]’s needs and abilities will help tremendously with his future planning.

71The wife wishes to rehouse in an area close to the former matrimonial in Suburb A. She says this is an area familiar to the children, especially A, and it is close to his present medical supports and community connections. It is also very convenient to B’s school.

72I have been careful not to double count the impact of the wife’s desire to continue caring for the children upon her own circumstances.

73The husband’s position here is a classic example of the oft quoted passage of the Full Court in Clauson & Clauson (1995) FLC 92-595 at 81,911:

It has long been recognised that in most cases the most valuable “asset” which a party can take out of the marriage is the substantial, reliable, income earning capacity: see Best & Best (1993) FLC 92-418 at 80,295.

74The husband was able to develop and continue his career due in no small part to the wife’s support of his working life and to her caring for the children during and after the marriage. Not long after A’s birth the parties relocated to the Netherlands for the husband’s work. The wife had a severely disabled child to care for, no local language or community supports. The parties moved on a number of occasions.

75The husband accepts that he will retain the superannuation of the parties. He says there should be an adjustment in his favour because he will not have the same ability to re-establish himself without being able to access any current assets. Counsel for the husband referred to the decision of Thackray AJ (as he then was) in Woollams and Woollams (2004) FLC 93-195 as a basis for a “significant readjustment”. His Honour in Woollams (supra) made a 10 per cent adjustment in the husband's favour on the basis that it was just and equitable to do so given the husband had all the superannuation assets. I do not accept the facts in this case are in line with those of Woollams (supra), vis-à-vis the extent of any adjustment, but accept that the husband is left with few tangible assets.

76Counsel also referred to Beklar (supra) where the wife sought virtually all the property of a non-superannuation nature. Although the Court accepted that the wife’s need for tangible assets was legitimate given she wanted to re-establish herself and provide a home for the children in a particular suburb, it was accepted that an adjustment in the husband's favour was warranted given he would take his property settlement in superannuation, which he could not access for many years.

77Again, the factual circumstances of the cases differ, but I do accept there should be some adjustment in favour of the husband in this respect.

78It may take the husband a period of time to recover financially from this property settlement given the wife has all the available assets, but the husband has time to do this given he is only 41 years old with a high income stream. I am conscious of the amount of the husband’s base salary and that additional income is subject to conditions.

79I find on the evidence before me he has the ability to re-establish himself in the short to medium term and secure his own future, even if this involves some short term modification of lifestyle, although there was little evidence of this. He is likely to be in a vastly superior position to the wife within a relatively short period of time.

80Associated with the husband’s T Superannuation Fund is a death benefit entitlement. As at 31 December 2013 the husband’s entitlement was $2,351,125. After separation the husband changed the beneficiary of his T Superannuation Fund from the wife to B. B, currently aged eight, is to receive 100 per cent of the benefit. It is a non-binding nomination, but the husband has no will and has made no provision for the future care of the family, in particular, A. The husband conceded he needed to address this issue and I accept he will do so. There is nothing to suggest he does not want A to be taken care of appropriately. He accepts it is a long term financial issue.

81In terms of an adjustment pursuant to s 75(2), I am satisfied the wife should receive a further 22.5 per cent taking into account the cumulative outcome of my findings on s 75(2) even weighed against matters in the husband’s favour.

Just and equitable

82Section 81 of the Act imposes on a Court an obligation that as far as practicable the orders it makes will finally determine the financial relationship between the parties and avoid further proceedings between them.

83Taking into account the property and the superannuation assets (collectively termed “the pool”), the wife is entitled to $1,771,793 to reflect 72.5 per cent of the pool. Correspondingly, the husband to achieve 22.5 per cent of that pool, would retain $672,059. Presently, the wife has $861,348 worth of property and $16,748 in superannuation. Overall, she has $878,096. Correspondingly, the husband has $591,888 in property and $973,868 in superannuation. He presently has a total of $1,565,756.

84On the basis of this percentage adjustment, and with the husband to retain his superannuation intact, the wife would have 100 per cent of the available property and 30.5 per cent of the superannuation.

85On the basis of that calculation, the husband will pay to the wife $910,445. He accepts that he will need to access the savings, vested shares and entitlements he currently has in order to fulfil those orders. On my calculations, he has approximately $500,000 to provide to her, more or less immediately. I accept that any sale attracting some form of impost should be dealt with in the most tax effective way. However, ultimately it is my view that the husband should be responsible for the payment of that impost or reimburse the wife for any payment she is required to make. After utilising presently available property there will still be a balance for him to pay.

86The issue of making orders that exceed the presently available property is not new and has been considered previously (Milankov& Milankov (2002) FLC 93-095, Gollings & Scott (2007) FLC 93-319). One of the difficulties identified in each of those cases was the inclusion of add backs to the pool. The add backs represented property or assets that no longer existed at the time of trial and would never exist in the future. In the circumstances of this particular case, and perhaps aided by Stanford (supra), there are no add backs in the balance sheet here. However, there is a substantial combination of assets, liabilities and financial resources. This is common ground.

87The husband has not proposed any specific form of orders, but in his amended response filed 10 January 2014 he simply sought the following:

1.That the assets, liabilities and financial resources of the parties be divided 60/40 per cent / 65/35 per cent in favour of the wife.

88There was no further particularisation, but the husband anticipates that there would some order that takes into account his financial resources. As pointed out previously, he had relied upon the fact that those resources constitute approximately 80 per cent of his income and that has been, and the Court acknowledges, a substantial contribution to the pool. There is nothing concrete to suggest those resources will not be available over time.

89I do not accept that the structure of the orders proposed by the wife is just and equitable or assists the parties in finalising their financial relationship expeditiously.

90How then to structure the orders? I anticipate there should be an immediate substantial payment to the wife based on what is available from the present asset pool. The husband identified those items through his counsel. I then anticipate payment of at least the bulk of the balance being made by 31 December 2014. There is no suggestion the husband needs to borrow money to achieve this. The evidence supports cash bonuses being paid annually in September and deferred shares at the end of October. It is likely other shares will vest in August. This is an historic course for the husband who has previously met the conditions of any awards. If the money is available then, the wife can receive her entitlement, otherwise the husband's superannuation may need to be reconsidered (Woollams).

91One of the issues about which I was provided little evidence was the effect on the husband of having to retain a minimum shareholding as required by the various awards. The document produced by the husband relating to the award indicates he needs to hold a minimum of the company shares. These are all ordinary unencumbered shares, whether obtained through the various award or simply by purchasing them himself. Any vested, but unexercised, awards under M and G are also counted (other than G options which cannot be counted whether vested or unvested). If the required number of shares is not held at the time the award vests, the participant may be prohibited from selling the shares or a portion of them. There was no evidence provided about how many shares the husband must retain. The document provided supports a sliding scale of between 3,000 to 7,500 shares, depending on whether the employee is level C or level D. There was simply no evidence of this before the Court and may need to be considered to determine what shares the husband can transfer or sell.

92When I consider the overall effect of these orders it will allow the wife, in time, to acquire a house in keeping with what the parties had during the relationship particularly as it relates to A and his continuing needs. I do not consider it unreasonable for the wife to want to stay in an area familiar to A and close to essential services. These orders will allow that to take place even if not immediately. The fact is that the wife may have to borrow some funds if her expectations are higher than what is fair and reasonable in all the circumstances.

93On the other hand I accept the husband will not be in a position to acquire property immediately but it is something he and his partner will, within a few years, be able to do. Given the delay in the wife receiving all her funds in one go she may not be in a position to purchase a property immediately. However, there is no certainty as to timing and money she receives from income can be utilised to defray costs in purchasing a property when it happens.

Spousal maintenance

94Section 72 of the Act sets out:

(1)A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:

(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;

(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or

(c) for any other adequate reason;

having regard to any relevant matter referred to in subsection 75(2).

95The husband does not accept that given the wife’s present need to care for the parties’ children, in particular A, she is unable to support herself adequately.

96The husband's position is that the wife should be able to obtain some form of employment given he sees the children each alternate weekend and on one occasion in the alternate week for an overnight visit. He has part of the holiday periods. He points out that the wife has considerable access to respite care for A which includes some weekends. He also says that A is provided with after school care and that the wife has ample opportunity to pursue some employment to support herself.

97This stance fails to appreciate a number of issues. Firstly, there is the need for the wife to have some time to recuperate from the rigors of caring for A and to spend one on one time with B. I accept the wife’s evidence that she is often physically exhausted, even from early morning.

98Despite the fact that A has considerable assistance from outside carers, the ultimate responsibility rests with the wife. A lot of time that A is with carers the wife is still involved in doing activities that concern his health and wellbeing. This includes keeping the house to an appropriate standard, liaising with various agencies, attending upon medical health professionals and generally ensuring she is available if there are last minute cancelations of carers or there is a need for her to attend school. Whilst the evidence suggests that the latter happens infrequently, I do not consider it unreasonable for her to be ready, willing and available for A at this stage.

99Secondly, I am satisfied the wife has a lack of qualifications and up to date skills for immediate employment. She has no recent experience or updated qualifications. She has not worked since 2002 and then it was in basic reception or secretarial roles.

100The wife does propose some form of retraining in the future and I consider this appropriate. However, at this stage I am persuaded that she falls within the circumstances in which spousal maintenance should be ordered.

101Given all this, I consider the wife has overcome the threshold issue and she is unable to support herself adequately. I now turn to the husband’s capacity to pay.

102Counsel for the husband asserts that there was no challenge with respect to any aspect of the husband’s financial statement. It is correct that there was no specific attack on the average weekly expenses set out in Part N of that document. However, there was a sustained and persuasive challenge to the manner in which the husband had structured some of his finances post-separation and which suggest he has the ability to access finance if needed. Examples include:

•The husband had decided not to continue with the family health insurance. He cancelled the wife and children from his benefits. Taking this step has saved him $500 per annum. At the time of cancelling the family policy he received a refund of subscription of approximately $1,400. He was able to utilise this money on acquiring a new camera for himself.

•The husband spends a regular monthly amount on acquiring alcohol. He has a collection of wine valued at $25,000 and he is able to regularly add to this collection. In order to keep the wine stored appropriately, he pays $53 a week for a climate controlled storage facility. I note that this is only slightly less than the wife now pays each week for health insurance for herself and the children.

•The husband was able to access money to repay a loan to his parents of $12,500. This loan was of 20 years duration and there was no evidence of any need for repayment at this juncture.

•The husband and his partner pay $1,000 a week rent for their accommodation. The husband contributes $700 of this amount and his partner $300. The wife alone pays $790 a week for accommodation for herself and the two children. The total amount paid to the wife by the husband is $750 each week in total.

•The husband and his partner are able to share expenses. His partner earns an average weekly amount of $1,420.

103I note the husband continues to claim $77 a week for replacement costs on furnishings and appliances. The parties have now been separated since April 2011.

104The husband will have an excess amount after liabilities of approximately $832 per week. Taking into account his ability to rearrange his finances, I consider he is able to pay to the wife at least that amount.

105The total amount the wife seeks for herself is $1,903 each week. I will consider her actual needs. In considering this I must turn to the relevant s 75(2) factors. I canvassed many of these in relation to property settlement. I do not intend to restate matters here. However, it is necessary to consider the practical effect of the s 79 proceedings to ascertain the property and financial resources of each of the parties and their commitments.

106I accept the wife will use the money she receives from the property settlement to obtain a home for herself and the children as soon as she can. Although she will not then have to pay rent she will, no doubt, need to service a mortgage in lieu as I do not intend to structure the orders in the manner proposed by her. Given the delay in receiving her full entitlement, there is no certainty when she will be in a position to purchase a home which is exactly what she wants. She will have the ability, perhaps in the short term, to invest some money. This will assist in defraying other expenses apart from personal weekly expenses and not taken into account here.

107The wife has disclosed that her personal weekly expenses for her support are $1,125. This does not include her and the children’s health insurance premiums of $62 per week. The only issue that was really challenged was an amount of $75 per week expended by the wife on cleaning. She explained that even though she did not work outside the home, given A’s incontinence and the difficulty in maintaining an appropriate standard of cleanliness, she considered it appropriate to have a thorough clean on one occasion each week. She said that she frequently spent early morning time changing sheets and cleaning up after A, but that once a week an outside agency clean was needed.

108I accept the wife does a daily clean of the house. In all the circumstances it is reasonable for her to also have an independent cleaner attend the premises on a weekly basis.

109I do not consider the wife’s expenses to be excessive. She receives government benefits by way of a carer’s pension of $413 a week and family tax benefit A and B of $79 a week. Without the assistance of the many agencies she has approached for help since separation her expenses would be considerably more.

Conclusion

110I find that the husband can and should contribute towards the wife’s maintenance in an amount of $1,125 per week to be indexed annually as sought. This should continue at this stage, until A is 18 years of age. The matter may well need to be dealt with again if the parties are unable to come to some arrangement in accordance with their present circumstances at that stage.

111At present, it is appropriate for the wife to be given a period of time in which to resettle herself and the children in appropriate accommodation, adjust to life after a financial settlement and to consider some form of part-time work or retraining.

Child support

112The issue in relation to child support has resolved itself and the orders I will make are really common ground between the parties. The husband will pay child support pursuant to any administrative assessment to be adjusted annually. He will also pay agreed items of non-periodic child support. These will not impact on his rate of periodic child support.

Orders

113Given my findings and the comments about the orders I consider appropriate to reflect those findings, I will take further submissions from counsel as to the detail each proposes. There are issues relating to form and also the timing of some of the orders.

114The orders I propose are:

1The assets, liabilities and financial resources of the parties be divided 72.5 per cent to wife.

2The property otherwise in the name of each party or in the possession of each party be the property of that party.

3 The matter be adjourned until December 2014.

4Until further order the husband be restrained from selling, charging, borrowing against or disposing of any shares or other benefits which he receives as an employee of [the company] or any other company.

5 There be liberty to apply in relation to the implementation of these orders.

6Until further order the husband pay to the wife as and by way of spousal maintenance the sum of $1,125 per week to be indexed annually according to the Consumer Price Index.

7Until further order, and by consent, under Section 124 of the Child Support Assessment (Act) 1989 the husband provide child support to the wife for the children by way of payment of:

(a)all school fees and tuition costs, uniforms, books and other expenses in relation to [B]’s attendance at [C School];

(b) 50 per cent of agreed extracurricular activities of the children; and

(c)50 per cent of any gap of agreed medical expenses for the children, including paediatric, optical, orthodontic and other specialist treatment (with both the husband and wife to otherwise meet general medical expenses for the children whilst they are in their care).

8The annual rate of child support as set by administrative assessment is not to be reduced by the non-periodic child support provided in paragraph 7.

I certify that the preceding [114] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court

Associate