BECKER & BECKER

[2015] FamCA 906

FAMILY COURT OF AUSTRALIA

BECKER & BECKER [2015] FamCA 906

FAMILY LAW – INTERIM PROCEEDINGS – Where the wife seeks financial support by way of exclusive occupation of the former matrimonial home, that the husband pay the expenses in relation to that home, departure from the current child support assessment or spouse maintenance – Where the husband seeks the former matrimonial home be sold – Where it is found that the husband has made a decision not to fully exercise his earning capacity – Where the husband has had the benefit of proceeds of sale of shares following separation – Where the wife does not currently have the capacity to work full time as she is the primary carer for the children – Where the wife’s costs and expenses sought in relation to the children are not excessive – Where it is just and equitable and otherwise proper to make orders for departure from the current child support assessment – Where orders are made granting the wife sole occupancy of the former matrimonial home and for the husband to meet the costs associated with the mortgage and outgoings – Where the husband’s application for the sale of the former matrimonial home is dismissed.

Family Law Act 1975 (Cth)
Child Support (Assessment) Act 1989 (Cth)

Gyselman & Gyselman (1992) FLC 92-279

APPLICANT: Ms Becker

RESPONDENT: Mr Becker

FILE NUMBER: SYC 5768 of 2015

DATE DELIVERED: 21 October 2015

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Watts J

HEARING DATE: 6 October 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Gould

SOLICITOR FOR THE APPLICANT: Harris Freidman Lawyers

COUNSEL FOR THE RESPONDENT: Ms Boyle

SOLICITOR FOR THE RESPONDENT: Watts McCray Lawyers

Orders

PENDING FURTHER ORDER

1. The wife have exclusive occupancy of the former matrimonial home situated at and known as B Street, Suburb A (“the Suburb A property”).

2. The husband pay all monies due and owing to the Westpac Banking Corporation loan secured by way of registered mortgage number … over the Suburb A property and forthwith pay all arrears in relation to all loans secured by way of the mortgage on the Suburb A property.

3. The husband pay the following outgoings with respect to the Suburb A property:

   3.1.All rates, water and sewerage expenses;

   3.2.Any land tax;

   3.3.The cost of all reasonably necessary repairs and maintenance to the structure and/or building;

   3.4.Premiums for the continuation of current insurance policies.

4. Pursuant to s 116, 117 and 124 of the Child Support (Assessment) Act 1989 (Cth), the child support assessment in respect of the children C born … 2008 and D born … 2010 (“the children”) be varied such that the husband pay child support as follows:

   4.1.Periodic child support in the sum of $250 per child per week, the first of such payment to be made within 7 days of the date of these orders, such payments thereafter to be made by no later than the 7^th day of each calendar month for each child;

   4.2.Non-periodic child support by way of:

   4.2.1.Payment to each of the children’s respective schools within 14 days of receipt of accounts or invoices from the school or from the wife, for all school fees including but not limited to tuition fees, excursion fees, incidental sporting costs, the costs of all school books, school uniforms and extra-curricular activities for each of the children in respect of each of the children’s attendance at a private school, boarding school, Catholic or State school in Australia or abroad or such other school or schools as the children attend from time to time;

   4.2.2.Private health insurance for the children at no lower than the private hospital insurance and out of hospital insurance that was in place as at 1 July 2014 and any medical, dental, orthodontic,  hospital, optical, physiotherapy, podiatry or other medical specialist fees or expenses in respect of the children which are not covered by Medicare and/or their private health insurance policy.

5. The husband’s application filed 18 September 2015 for a sale of the Suburb A property be dismissed.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 5768 of 2015

Ms Becker

Applicant

And

Mr Becker

Respondent

REASONS FOR JUDGMENT

1. The wife seeks financial support by way of an order that she have sole occupancy of the former matrimonial home at Suburb A. She also seeks that the husband pay the mortgage and other expenses in relation to the Suburb A property and that there be a departure from the current child support assessment so that the husband pays to the wife the sum of $250 per week per child, together with the children’s educational and medical expenses. In the alternative the wife seeks that the husband pay to her, spousal maintenance in the sum of $2,000 per month.

2. The husband opposes those orders being made and seeks by way of interim order, that the matrimonial home be sold and the monies applied after the payment of sale costs and the mortgage to provide $100,000 to the wife by way of interim property settlement with the balance to remain in a controlled monies account. The husband would propose that the wife have sole right of occupancy of the matrimonial home until the sale is completed on the basis that she maintain the property in good condition and cooperate with the sale.

SHORT HISTORY

1. The husband is aged 40 years old and works as a health specialist. The wife is 40 years of age and works part time in a professional capacity.

2. There are two children of the marriage. The elder child is aged 7 years old and is in year 1 at a private school. The younger is aged 5 years old and attends an early learning centre.

3. The parties commenced living together in February 2003 at which time the husband was employed as a healthcare professional and the wife had completed a PhD in health sciences.

4. The wife commenced to work as a health professional in January 2005.

5. The parties married in 2006.

6. The first child of the marriage was born in 2008.

7. The husband in the 2009/2010 financial year commenced work as a health specialist.

8. In July 2010 the parties purchased the matrimonial home for $2.1 million with a mortgage of $1.890 million.

9. In 2010 the second child was born.

10. In 2011 the wife commenced another degree.

11. In 2013 the elder child commenced his schooling in a private school.

12. In November 2013 the wife commenced full time employment at the firm at which she is currently still employed part time.

13. The parties separated in January 2015 and the husband initially moved to his parents’ home and then to accommodation to which the husband rents at $1,500 per week.

14. The wife and the children reside in the former matrimonial home which is the subject of a number of loans to a bank. The wife is the sole registered proprietor of the matrimonial home but the loans which are secured by way of mortgage over the matrimonial home are in the husband’s name.

15. The husband has failed to make repayments on two of the loans secured by the mortgage on the matrimonial home in a timely way. The wife received a default notice from the bank indicating that repossession proceedings may begin after 19 September 2015. The husband, under at least one of the loans, is about $10,000 in arrears and I was informed from the bar table that there is another loan that is also in arrears.

THE SIGNIFICANT REDUCTION IN THE HUSBAND’S EARNING CAPACITY

1. The husband on the face of his Financial Statement has a current shortfall of income over expenses in the order of about $3,000 per week. Counsel for the husband submits that without a sale of the matrimonial home, the parties will continue to haemorrhage money.

2. In the 2014 financial year, the husband’s taxable income was $591,534. The husband’s taxable income for the 2015 financial year had reduced to $478,288 (see [57] of the husband’s affidavit). That reduction is referrable to the husband’s changed pattern of working since separation. Annexure A to the husband’s Financial Statement sets out what he claims is his “net profit” from his personal exertion for the months of February 2015 through to August 2015. The net income he earned in the months February 2015 to June 2015 totalled $132,714. That means that in the previous seven months of the financial year, he earned $345,286 ($478,288 - $132,714). The gross amount that the husband earned in the 2014 financial year averages $11,375 per week ($591,534 ÷ 52). The gross amount that the husband earned for the first seven months of the 2015 financial year averages $11,391 per week ($345,286 ÷ 7 ÷ 4.33). The amount that the husband says he has earned by way of average earnings in February through to August 2015 falls to an average sum of $6,218 per week ($188,627 ÷ 7 ÷ 4.33).

3. It can be seen from the above discussion that from July 2013 until the date of separation in January 2015, the husband’s average gross earnings were about $11,400 per week. Since separation, they have dropped by an amount of $5,156 per week.

4. The husband in a rather understated way says at [60]:

   I am earning lower than previous financial years due to the following factors:

   (a)   During 2014 I was working up to 80 hours per week. This was completely unsustainable. I was very fatigued. In February 2014, I had a car crash at 5am. I was very rattled by this and was concerned the cause of the accident was my working too many hours.

5. In the context of an interim hearing, the husband cannot be tested as to how a car crash in February 2014 was relevant to him taking a decision about a year later to dramatically reduce his earning capacity, but it is inherently unlikely that the husband was able to work up to 80 hours per week for a year after the motor vehicle accident and then have it impact upon him in such a way that following the separation he could only work 35 hours per week.

6. The husband’s next reason for working part time since the separation is that:

   [60(b)] .... I have had to work on a part time basis because since separation, [the wife] has in the past dictated on an ad-hoc basis what time the children could spend with me. She often would give me a few days notice or less. This has made it hard for me to plan my work schedule around child care. I have also had to take time off for multiple appointments (court, legal, financial, medical, counselling, mediation). Whilst each appointment may only be short, the sessional nature of my work means that I usually have to take an entire day off work to attend.

7. As was highlighted during submissions by counsel for the wife, [52] of the husband’s affidavit makes it clear that the parties have settled an arrangement for the children to be with their father four nights a fortnight, with one additional night once a month at defined times.

8. The husband asserts that because an agreement has now been reached that he will collect the children on Mondays and Tuesdays from after school, he cannot do his lists as a health professional on those days because the end time of those lists is unreliable and it would not allow him to be available for the children. The parties have in the past used paid third party assistance to cater for those contingencies when they were previously both working. Counsel for the wife also indicated that the wife could assist with necessary arrangements to allow the husband to work those days or vary the agreed arrangements to better suit the husband’s working commitments.

9. I do not accept the husband’s assertion that there is uncertainty in “dictated”, “ad-hoc” arrangements imposed upon him by the wife in relation to when the children could spend time with him as an acceptable reason for the significant change in his earning capacity.

10. The third reason the husband gives for decrease in earning capacity is a claim that his cash flow can fluctuate from month to month because of vagaries of the timing of payments both in the public and private sector. Given that gross weekly income is calculated on averaging annual income, monthly vagaries in the timing of payments for work which has been performed does not impact upon the overall level of annual remuneration.

11. Given that none of the three explanations proffered by the husband seem to have any particular cogency, the obvious inference to draw about the dramatic drop in the husband’s income is that the husband took a decision as at the date of separation to dramatically decrease the exercise of his earning capacity and the hours of his working pattern (see s 117(7B)(a)(iii) of the Assessment Act).

12. It is that dramatic decrease of $5,156 per week gross which is the reason why the husband can claim that the current necessary expenditure of both parties (given their pre-separation lifestyle) can no longer be maintained.

13. During submissions, he not only put in doubt the future short time viability of payments on the matrimonial home but also the longer term position of the children in relation to private schools (which seems to me to be a rather extreme position to have adopted).

HUSBAND’S SALE OF SHARES

1. In the husband’s Financial Statement, sworn 18 September 2015, the husband deposes at Part M that in the twelve months prior to filing that statement, he had disposed of about $131,000 worth of shares, and in particular since separation, he had disposed of $88,684 worth of shares. On 21 September 2015 I made an order that the husband by no later than 4.00 pm 28 September 2015 provide to the wife an accounting for the proceeds of the sale of the $131,000 worth of shares. By the time of the completion of the hearing, the husband had tendered documents which he asserted accounted for the proceeds of the sale of the shares. It was a less than satisfactory way of attempting to comply with the order. For example, $20,000 which the wife interprets to be for costs of a designer for the husband’s rental property, was contended by counsel for the husband from the bar table to be costs of contents for the property. Counsel for the husband indicates that an examination of the exhibits shows that monies were spent on things such as piano lessons and child support. Whilst both sides made various submissions based upon Exhibits 2 and 3, I do not have a comprehensive explanation as to where that $130,000 was expended.

2. A general overview of the husband’s expenses seems to indicate that the husband has not had any particular diminution of living standard since separation. The husband chose after the separation to rent accommodation at $1,500 per week. The husband submits that that was a reasonable decision given that he wanted similar style accommodation to the matrimonial home in close proximity to where the children will continue to live.

3. The husband went to Country F or the Country E in March or April. Counsel for the husband indicated from the bar table that the trip to the Country E was for voluntary work which the wife well knew about, and which the husband has also undertaken previously, and that the fly in and out of Country F was for him to visit his sister which the wife would also have absolute knowledge about. Counsel for the wife implied from the bar table that the trip was for a holiday.

WIFE’S EARNING CAPACITY

1. The wife has a PhD, is qualified as health professional and began to specialise. She worked as a health professional for two years.

2. The wife has changed her career. That change happened during the course of the marriage. The husband asserts in his affidavit that the wife could earn utilising her old qualifications. It is not easily open to the husband to submit that the wife has a far greater earning capacity if she went back to some position associated with her original qualifications. She has reset her career. That happened while the parties were together. It will take a little time for her earning capacity to build up in the new career path that she has chosen. It is not reasonable for the husband to say that the wife’s earning capacity is dramatically more than she is currently exercising.

3. The wife does not currently have the capacity to work full time given that she has the primary care of the children. She does not have the capacity to make the regular necessary repayments on the matrimonial home and support the children. The husband currently has clearly superior earnings and earning capacity and should provide more financial support so that the wife and children do not come under pressure to leave the matrimonial home in the short term. 

4. The husband makes a complaint about the wife as to the lack of financial disclosure at this stage of the proceedings. The husband says he is in the dark about how the wife has increased the debt on her credit cards and that that lack of knowledge was an issue between the parties prior to separation where they had difficulties and arguments about money. The husband also asserts that he only found out in these proceedings that the wife had not yet paid off her HECS debt.

CHILD SUPPORT

1. The wife seeks a departure from the current periodic child support assessment. The court may make an order for departure from an administrative assessment of child support in the special circumstances of the case if the liable parent or carer entitled to child support is a party to an application pending in the court and the court is satisfied that it would be in the interest of the liable parent and the carer entitled to child support for the court to consider whether orders should be made in relation to the child based on the special circumstances of the case (Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”) s 116(1)(b)). I find that it would be in the interests of the parties in this case to consider the wife’s application under the Assessment Act.

2. In Gyselman & Gyselman (1992) FLC 92-279 the Full Court identified that a trial judge must follow the clearly established three step process outlined in s 117 of the Assessment Act – that is, assess whether in the special circumstances of the case a ground of departure has been established; assess whether it is “just and equitable” to make the proposed order; and assess whether it is “otherwise proper” to make the order. The Full Court also considered what constituted “special circumstances”, stating:

   Whilst it is not possible to define with precision the meaning of [special circumstances], as a generality it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary.

3. The provisions of s 117(2)(c)(ia) of the Assessment provides a ground for departure in this case.

4. Neither counsel specifically addressed the mandatory considerations in s 117 or s 124 of the Assessment Act. Although I have taken them into account, I do not address those considerations in any detail in these reasons. The justice and equity of the orders flows from the relative financial positions of both the parties and in particular, my comments about what the husband has done in respect of his earning capacity since the separation and a balancing of the hardship caused to each party and the child.

5. Counsel for the husband made the point that the wife’s formal application for interim orders asks for an order until the children are 18 years of age. Counsel for the wife made it clear that what was being sought was only an interim order pending further order.

6. In relation to the application for periodic payments, the current assessment is $383 per week for the support of the two children.

7. The wife sets out her costs for the children in Part N of her Financial Statement in the sum of $549 per week. Given the standard of living that the parties enjoyed prior to the separation, there is no particular cost or expense that appears excessive, although there might be some double counting in education expenses, including fees and levies at $45 if the husband is paying school fees. The wife at items 26 and 27 of the Financial Statement also is incurring other expenditure, part of which would be referrable to the children (but does not include private health insurance which the wife seeks be covered by the husband). The expenses of the wife in relation to the children as claimed are also reasonable in light of the list of expenses the husband claims he pays for the children when they are with him for four days out of fourteen. 

1. Overall I accept the wife’s reasonable expenses in respect of the children by way of periodic payment at the current time is in the sum of $250 per week per child.

2. I find that it is just and equitable and otherwise proper to make the order for periodic child support as sought by the wife. 

Non-periodic payments

1. In respect of non-periodic payments, the husband currently pays other expenses in relation to the children which he sets out in his financial statement. The husband however does not commit to any order in relation to continuing those payments.

2. The husband claims that he is already expending $895 per week on education expenses, including fees and levies. 

3. I find it is just to make the order as sought upon the basis that the husband has given evidence that he is currently making the payments for expenses associated with the children’s education, including fees and levies and payments in relation to the health and health insurance needs of the children.

SALE OF THE FORMER MATRIMONIAL HOME

1. The husband applies for the matrimonial home to be sold immediately.

2. The wife has not set out the basis upon which she believes she might be able to retain the home. Part of that is her assertion that she has not received full financial disclosure from the husband at this time. The wife’s position in respect to retaining the matrimonial home is set out in [51] of her affidavit where she says:

   I wish to have the opportunity to retain the matrimonial home in a property settlement as accommodation for the children and I, if at all financially possible. I will not know and cannot decide this until the financial disclosure and consequential investigations are completed. [The husband] can afford to maintain the property, including paying the mortgage until that time.

3. The husband asserts that the sale of the matrimonial home is inevitable. There is some force in the submission by counsel for the husband that at the present time it would appear that the wife may not be able to achieve her goal of retaining the matrimonial home based on her current income and the overall financial position of the parties.

4. Counsel for the husband reasonably submits that on the face of what I have been presented, there is no pool of funds, there is no white knight nor any obvious way that the wife would retain the property.

5. The wife currently has credit card debts of about $75,000 plus a HECS debt of approximately $29,000.The husband’s credit card debts are about $66,000 and he has some outstanding liability in relation to BAS statements, in the order of $27,000.

6. The husband asserts that it is more probable than not that the matrimonial home will eventually have to be sold. Whilst that is a consideration, it is not decisive in this case. Whilst it might be unlikely, it is not entirely impossible that the wife may achieve a result and otherwise have other assistance that would enable her to retain the home in the fullness of time.

7. The critical question is whether or not the banks can be satisfied in respect of servicing the mortgage in the interim.

8. Counsel for the husband submits that it is difficult to see how in the short term the husband will be able to pay the bank debt.

9. Counsel for the husband submitted that no order of the court will “magic up the money” to satisfy the bank in the very short term. The court does not have the capacity to order the husband to exercise his earning capacity. Counsel for the wife however says that considerations in relation to the implementation of the orders sought are best left to a further stage of proceedings and should not be a reason why the orders are not made in the first place. I accept that that is so given that I have found the husband does have an earning capacity that he is currently choosing not to exercise. The husband’s application for the sale of the home shall be dismissed.

SPOUSAL MAINTENANCE

1. The wife did not seek any periodic spousal maintenance order against the husband if the child support order was made. She did however seek non periodic payments in relation to outgoings in respect of the matrimonial home. She has not in her financial statement budgeted for the payment of rates, land tax and insurances on the property. It did not seem disputed that the husband has historically paid those monies and I find that when the financial circumstances of each of the parties is considered on an overall basis, it is proper that that order be made. The wife however should pay for her own utility expenses including but not limited to gas, electricity and telephone usage.

2. Given that I intend to make the order as sought in relation to child support, I do not intend to deal with the wife’s alternate application in relation to spousal maintenance, other than as indicated in the preceding paragraph.

I certify that the preceding sixty-one (61) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 21 October 2015.

Associate:

Date:  21.10.2015