Beeson and Spence

[2007] FamCA 200

FAMILY COURT OF AUSTRALIA

BEESON & SPENCE [2007] FamCA 200

FAMILY LAW - Property settlement and child support departure - Husband an undischarged bankrupt with interest in excess of $1.4 million superannuation – Wife’s application for a splitting order related to his superannuation – Husband’s application pursuant to s 106B to set aside to set Deed of Variation of Trust to return to the wife property settled on the Trust and to reinstate the parties as potential beneficiaries – Order made pursuant to s 106B – No splitting order – Order for child support departure.

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

Ascot Investments Pty Ltd v. Harper (1981) 148 CLR 337
Gould and Gould; Swire Investments Ltd (1993) FLC 92-434;
Coventry and Coventry and Smith (2004) FLC 93-184;
Davidson and Davidson (No 2) (1994) FLC 92-469;
Bowman (1984) FLC 91-574;
Ashton (1986) FLC 91-777;
Stein (1986) FLC 91-779;
Biltoft and Biltoft (1995) FLC 92-614;

APPLICANT: Ms Beeson

RESPONDENT: Mr Spence

FILE NUMBER: SYF 2511 of 2004

DATE DELIVERED: 2 February 2007

PLACE DELIVERED: Sydney

JUDGMENT OF: Moore J

HEARING DATE: 18-21 December 2006

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Batey

SOLICITOR FOR THE APPLICANT: Gayle Meredith & Associates

COUNSEL FOR THE RESPONDENT: Mr Schonell

SOLICITOR FOR THE RESPONDENT: Milne Berry Berger & Freedman

Orders

1. The Deed of Variation of the S Trust dated 26 September 2003 is set aside pursuant to s 106B of the Family Law Act (1975).

2. The wife is solely entitled to all property, real or personal, in her possession or control.

3. The husband is solely entitled to retain absolutely his interest in the superannuation fund of which he is a member.

4. Until 13 March 2008 the husband is to pay child support in the sum of $50 per week for each child. 

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYF 2511  of 2004

Ms Beeson

Applicant

And

Mr Spence

Respondent

REASONS FOR JUDGMENT

1. Parenting orders were made by consent in the course of the hearing and property settlement remains to be determined along with the husband’s application pursuant to s 106B to set aside a Deed dated September 2003 varying certain terms of a discretionary trust established in 2001.

2. The wife (37) and husband (55) met in 1996, they began living together in March 1997 and they married in November 1997.  Both had been previously married and the husband has a son, A (25), from his earlier marriage.  Their first child, W (8), was born in August 1998 and their second, J (6), was born in May 2000.  They separated in mid-February 2003 and were divorced in June 2004. 

3. The husband has since remarried.  His wife, (43), works as a project officer with a local council.  They have lived together since mid-2005 in rented premises at S with her teenage son. 

4. The wife is engaged to be married to Mr N who is a businessman, apparently of some financial means.  There is no indication when their marriage will take place and they continue to maintain separate households.  She is not in paid work but has worked in the past on her own account as a futures trader. 

5. When their relationship began the husband owned a business, of considerable magnitude, which operated through the D Group.  He also owned a partly developed unencumbered residential property at W, a Riviera motor boat, a share portfolio, household contents and some artwork.  The evidence does not allow any value to be put on his assets at the time.  It does show that the husband had an entitlement in a superannuation fund as at 1 July 1998 of around $750,000 but not when his membership began.  He made no mention of superannuation in his affidavit when listing his assets at the beginning of the relationship.  If established before the relationship began, there is no evidence of its value at the relevant time; if established after the relationship began, only the husband could have been the source of any direct financial contributions during the intervening period until 1 July 1998. 

6. Prior to their marriage the wife worked on her own account as a commodities trader.  She owned a share in a property at R (encumbered), a motor vehicle, household effects, and she had an interest in a superannuation fund.  There was a question about her debts at the time, but the evidence ultimately established to my satisfaction that she did have liabilities apart from the mortgage over the R property.  I accept that the husband paid around $20,000 and more towards her debts and he also paid off the debt on her car.  Similarly, the evidence does not allow any finding about the net value of her assets at the time. 

7. Initially they moved to live in a unit owned by the husband at D while construction of a residence at the W property was completed.  While this was in train the wife attended at the site and took a role in decision making about plans, décor and the garden.  They moved to the W property in November in 1997, the month they married. 

8. While pregnant with W, and following earlier discussion between them, the husband executed a transfer of half of his interest in the W home to the wife and upon registration they held the property as joint tenants.  There is other evidence that in August 2000 the husband executed a further transfer to her of his interest as joint tenant, but this was never registered. 

9. After their relationship began the wife did a couple of courses which came to nothing and she resumed commodities trading at some point with funds provided by the husband.  It was not a success.  She was otherwise occupied managing the family home, assisted by some paid help with domestic chores, and after the children’s birth until separation she had the added responsibility of their care. 

10. The husband continued to operate his business.  He locates the start of troubles in the business at the beginning of 2000 by which time his relationship with Group’s financier, the Commonwealth Bank, had begun to unravel.  The security the bank held included a personal guarantee from the husband.  He attempted to refinance through alternative investment funding but ultimately in March 2001, after extensive legal and accounting advice, the companies in the Group were placed in voluntary administration and in July 2001 in liquidation. 

11. The evidence in chief of both parties presents a rather fragmented history of the course events took from around mid-2001 but a broad outline of the more significant developments would seem to be as follows:

    (a)The wife sold her interest in the R property as mortgage repayments were no longer being made by the husband on her behalf. 

    (b)Motor vehicles and a motor cruiser were sold.  The W property was also sold for around $4.4 million.  All up, about $6 million was realised. 

    (c)Proceedings were commenced in the Supreme Court by the Commonwealth Bank against the husband and the Group who brought a cross-claim.  Interlocutory proceedings were resolved by undertakings given by the husband on 12 July 2001 providing for a controlled money account operated by the husband’s solicitors to hold half of the sale proceeds of the W property and of chattels owned jointly with the wife and also to hold the sale proceeds of the motor cruiser and of the husband’s wholly owned chattels.  Those chattels are identified in schedules attached to the draft orders.  There were other chattels, accepted as belonging to the wife, which were not included and they are the subject of a valuation report here by Mr L.  Around $3 million was paid into the account.  It was further agreed that the husband would be entitled to withdraw $6,000 per week from the controlled money account for living expenses [subsequently reduced to $1,000 per week] along with a sum for moving costs.  The other half of the sale proceeds, around $3 million, was paid to the wife who transferred the funds she received to a Trust established the previous month.  She also retained certain chattels. 

    (d)The Trust was established by Deed dated 8 June 2001.  It is known as the S Trust [the Trust].  Mr Beeson [[the wife’s] father, now deceased], and Mr E [her solicitor] were appointed the trustees and she was given the power of appointment.  The Deed governing its terms is in evidence and it has all the hallmarks of a usual discretionary Trust.  It will be convenient to record just some of its terms here:

    (i)Recital A records the settlor as wishing to ‘make provision for the Beneficiaries described in this Deed’. 

    (ii)Under the terms of the initial Deed, the beneficiaries are defined as:

    ‘(a)     the Specified Beneficiary referred to in item 2 of the schedule;

    (b)       The parents, brothers, sisters, spouses, widows, widowers, children and remoter issue and next of kin of the Specified Beneficiary and the spouses, widows, widowers, children and grandchildren of those parents, brothers, sisters, spouses, children and remoter issue and next of kin;

    (c)       any corporation a share in which is beneficially owned or held by any Beneficiary, whether or not that corporation is in existence at the date of this deed;

    (d)       the trustees of any trust or settlement under which any Beneficiary has an interest whether absolute or contingent or by way of expectancy and whether liable to be defeated by the exercise of any power of appointment or revocation or to be diminished by the increase of the class to which he or she belongs, and whether or not that trust or settlement is in existence at the date of this deed;

    (e)       those additional persons, trusts, companies, organisations or institutions as the Appointor may declare from time to time in writing to the Trustee; and

    (f)        the trustee of any charitable trust and any person, officer or governing body of a charitable society or association in their capacity as such, or any society, authority, institution, church, religious order or person or entity which at the time a distribution of Income or capital of the Trust is to be made is exempt from income tax under the provisions of the Act or if at the time a gift of money is made is deductible against assessable income of the donor by virtue of the Act;

    HOWEVER:

    (i)the Settlor or any person claiming under or in right of the Settlor, or any corporation and the trustees of any trust or settlement in which the Settlor or any person claiming under or in right of the Settlor has any beneficial interest or share or expectancy of whatever nature so long as that interest or share or expectancy continues, will not be Beneficiaries; and

    (ii)the Trustee at any time and from time to time may declare in writing that any person or class of persons named, described or defined in that declaration in writing will be excluded as a Beneficiary notwithstanding that but for the exclusion he or she would otherwise have been a Beneficiary and the Trustee at any time may in writing revoke the whole or any part or parts of that declaration.

    For the avoidance of doubt, the definition of Beneficiary is not to be construed as dependent upon any legislation (whether delegated or otherwise).

(iii)     The schedule includes the following:

SCHEDULE

APPOINTOR:  [The wife] and upon her death [Mr B]

SPECIFIED BENEFICIARY:            [The parties’ sons]

NAME OF TRUST:               The [S] Trust

(iv)One clause worthy of note, concerned with the trustees’ power to deal with capital and income, is:

‘3.3     A determination to pay, apply or set aside any sum to or for the benefit of any Beneficiary may be validly made and satisfied by:

(a)placing that sum to the credit of that Beneficiary in the books of account of the Trust;

(b)paying it over to or for the benefit of that Beneficiary in such manner as the Trustee thinks fit;

(c)paying it over to the trustees of any trust which in the opinion of the Trustee will or may benefit that Beneficiary; or

(d)paying it to any parent or guardian of that Beneficiary (if an infant) without being bound to see how it is applied,

and from then on that sum will cease to be a part of the Trust Fund.’

(e)The husband asserts no involvement with the Trust after it was established and, on his evidence, he was in the dark about its’ financial position; such knowledge as he has of it now has been gleaned through these proceedings.  He maintains the Trust was established for the benefit of the family and not merely their two children.  Whatever his level of knowledge, he says in his affidavit [paragraph 84] that following discussion about future contingencies, a memorandum of wishes was prepared [annexure G to his affidavit], though it was not signed.  This apparently occurred around November 2002 and the parties separated not long afterwards. 

(f)Subsequent to receipt of the sale proceeds referred to earlier, the Trust acquired at unit at D for $1.55 million and the family moved into the unit where they remained until the husband’s departure on separation in February 2003.  Various household chattels unable to be accommodated were stored. 

(g)At some point after the Trust was established the husband decided to distribute equally between his three children $150,000 he had available in a savings account.  The $100,000 intended for the parties’ sons was paid to the wife who passed it through to the Trust. 

(h)The litigation with the Commonwealth Bank concluded by judgment on 21 November 2002 in favour of the bank for almost $52.4 million together with interest at a specified daily rate and the cross-claim was dismissed.  The husband’s appeal from the decision was unsuccessful and his later application for leave to appeal to the High Court suffered the same fate in November 2004. 

(i)During those years of litigation the husband was also involved in other financial related litigation.  Over time, the money held in the controlled money account was exhausted by legal fees and other permitted withdrawals. 

(j)In the meantime, after the appeal but before the special leave application was determined by the High Court, a Deed of Variation of the Trust was executed on 26 September 2003 between the trustees and the wife as the original appointor and her sister, K, the new appointor.  This document is at the heart of the husband’s106B application.  The recitals:

A.On 8 June 2001 a Settlor settled on the Trustees a sum which they agreed to hold in trust for [my sons W and J] as Specified Beneficiaries under a Deed of Trust executed that day (hereinafter “the Trust”).

B.           At the time of the creation of the Trust the parents of the Specified Beneficiaries were married but since that time have separated and will proceed to divorce in due course.

C.           The father of the Specified Beneficiaries [the husband] has been engaged in litigation with the Commonwealth Bank of Australia for some years seeking to avoid the enforcement of a guarantee given by him and to press a counter-claim against the bank which would negate the guarantee and require that the bank paid damages to the father.

D.           Both the Court on the hearing at first instance and on appeal to the NSW Court of Appeal decided in favour of the bank’s guarantee and rejected the cross-claim by the father.

E.           The Trustees are concerned in all the circumstances at the possibility of insolvency of one or other of the parents placing the Trust Fund in jeopardy and accordingly have requested the Appointor to resign and the New Appointor to consent to variations of the Trust which they have agreed to do on the terms and conditions hereinafter appearing.

The operative provisions:

1.DEFINITION

All terms and expressions used in this Deed of Variation shall have the same meaning as ascribed to them in the Trust.

2.CONSENT

2.1     The Original Appointer pursuant to clause 7 of the Trust hereby appoints the New Appointor in her place to act as Appointor in relation to the Trust which the New Appointor consents to do as is signified by her execution hereof.

2.2     The Trustees with the consent of the New Appointor hereby vary the Deed and it is hereby varied in the following manner namely:-

(a)     By deleting the word “parents” in the first and third lines of clause (b) and the words “next-of-kin” in the second and fourth lines in the same clause in the definition of “Beneficiaries” contained in the Trust deed.

(k)The following month, October 2003, the Trust sold the D unit for $1.6 million and purchased a property at H.  I can find nowhere any evidence of the purchase price or costs related to this acquisition.  Furniture and other chattels held in storage were moved to the H home which the wife and the children have since occupied.  Some items of furniture were sold by the wife around this time for a little over $5,000. 

(l)In June 2004 the solicitors who had acted for the husband in the litigation with the Bank advised the wife of security they held over the husband’s assets for his outstanding legal costs and sought her attitude about purchasing his share or her consent to their sale.  The upshot was further litigation in the Supreme Court, later resolved by consent on 22 October 2004 providing for the husband to receive certain items [subject to the solicitors’ rights] and the balance to be retained by the wife.  She incurred legal costs of over $32,800 as a result. 

(m)These costs along with previously incurred legal costs were met by drawing on funds held by the Trust, either in whole or in part.  It is not apparent when the Trust money ran out – according to an affidavit sworn by the wife on 30 September 2005 $21,000 remained at that date – but the fact that it is all now gone was not put in issue.  The funds have been applied not only towards legal costs for litigation in the Supreme court but also in this Court and on living expenditure for the wife and the children, the children’s education costs, as well as, no doubt, costs related to the two real properties the Trust has owned and provided to the wife and the children, including costs related to their sale, acquisition and maintenance. 

(n)In April 2005, with an outstanding judgment of $64 million plus costs and interest, the husband lodged a debtor’s petition and was declared bankrupt. His trustee in bankruptcy, I should say, has notice of these proceedings and the orders being sought here and has elected not to participate. I should also add for completeness that neither the trustee nor the present appointor elected to participate or be heard on the s 106B application.

1. After separation the husband went to live at the home of his parents in V.  The children remained in the care of their mother.  From there began dispute about their arrangements which led to the litigation in this Court.  The parenting arrangements now agreed are set out in a schedule at the end of these Reasons.  Essentially, the children will continue to live with their mother for most of the time and spend time regularly with their father. 

2. The husband is working for a transport business acquired in October 2004 and operated through F Pty Limited, which is a company owned and controlled by his elderly father.  The husband works in the business 60 – 70 hours a week but receives no salary; his father gives him an ‘allowance’ of $500 per week, an arrangement continued from earlier on when his financial position was tight.  The husband  is also provided with a motor vehicle and telephone, both used for private as well as business purposes, as part of his employment arrangement.  From his allowance, he pays his wife either $150 [his affidavit] or $200 [his financial statement] or $175 [his oral evidence] as a contribution towards household expenses and he retains the balance for other needs.  His wife supports him, he estimates, to the extent of around $400 per week. 

1. In September 2005 an assessment issued from the Child Support Agency requiring the husband to pay $21.67 in child support during the period from 15 September 2005 to 14 December 2006.  A fresh assessment issued recently for the period from 14 December 2006 to 13 March 2008 for ‘nil’ amount. 

2. The wife is not in paid work and she has no income from employment.  It would appear she has had unimpeded availability of Trust funds from which she has paid expenditure of various kinds incurred since separation.  As well as this source, it is her evidence that to meet her various expenses she has been reliant on advances from friends and from her fiancé, Mr N, who has provided her with considerable ongoing financial support.  It is her case that advances she has received from various friends, totalling $216,000, are loans which she is obliged to repay. 

3. Against that general background, I come to the available assets and to the parties’ liabilities.  Most of the items and figures are agreed, but there remains disagreement in two areas:

   (i)The husband’s case proposes that the wife’s assets include the value of the H home at $1.9 million, being the value attributed to it by the single expert, Mr O.  It is acknowledged that a debt for land tax amounting to $19,785 related to the home would be brought to account in that event.  The wife’s case excludes the value of the H home, arguing it is property owned by the Trust and not her and, it follows, also excludes the land tax. 

   (ii)The wife’s case proposes inclusion of a ‘notional’ asset held by her of paid legal costs from funds available to her and also the inclusion of liabilities totalling $216,000, being advances from various persons to meet expenditure including legal costs.  The husband’s case argues for the exclusion of both. 

4. The first area of dispute is related to the outcome of the s 106B application which can be dealt with now. Mr Schonell put an argument that the Trust is a ‘sham’, but if that is not accepted then he submits all of the elements of s 106B are satisfied so as to warrant setting aside of the Deed of Variation, thus restoring the governing instrument to its initial terms as established during the marriage; in other words, restoring the wife’s control of the Trust and restoring her and the husband, as parents of the specified beneficiaries, as beneficiaries in their own right.

5. Authority establishes that if a transaction is found to be a ‘sham’ it may be ignored and the property held attributed to the real owner/s without any need to call on s 106B and, conversely, s 106B needs no finding of ‘sham’ to operate. As for the meaning of ‘sham’, Gibbs J in Ascot Investments Pty Ltd v Harper (1981) 148 CLR 337 at 354 described a ‘sham’ as having been

   ‘….brought into being, in appearance rather than reality, as a device to assist one party to evade his or her obligations under the Act.  Sham transactions may always be disregarded.’

6. But there was elaboration on its meaning by the Full Court in Gould and Gould; Swire Investments Ltd (1993) FLC 92-434 at 80,432-3:

   ‘The meaning of the term ‘sham’ was discussed by Lockhart J in a decision of the Full Court of the Federal Court in Sharrment Pty Ltd v The Official Trustee in Bankruptcy (1988) 82 ALR 530, esp. at 536-40.  At p. 537 his Honour concluded:-

   ‘A “sham” is therefore, for the purposes of Australian Law, something that is intended to be mistaken for something else or that is not really what it purports to be.  It is a spurious imitation, a counterfeit, a disguise or a false front.  It is not genuine or true but something made in imitation of something else or made to appear to be something which it is not.  It is something which is false or deceptive.’

   In the course of that judgment his Honour referred to a number of cases which had considered that issue and in particular to the observations of Windeyer J in Scott v Commissioner of Taxation (No 2) (1966) 40 ALJR 265 at 279:

   ‘On the other hand, if the scheme, including the deed, was intended to be a mere facade behind which activities might be carried on which were not to be really directed to the stated purposes but to other ends, then the words of the deed should be disregarded.  A disguise is a real thing: it may be an elaborate and carefully prepared thing; but it is nevertheless a disguise.  The difficult and debatable philosophic questions of the meaning and relationship of reality, substance and form are for the purposes of our law generally resolved by asking did the parties who entered into the ostensible transaction mean it to be in truth their transaction, or did they mean it to be, and in fact us it as, merely a disguise, a facade, a sham, a false front – all of these words have been metaphorically used – concealing their real transaction…’

7. The timing of the establishment of the Trust in relation to the husband’s dealings with the Bank raises for consideration the obvious inference that the Trust was established to provide a vehicle for removal of his assets from the Bank’s reach should he be unsuccessful in the looming litigation.  Context, therefore, cast its shadow.  But I think it is important to bear in mind what initially occurred.  The Trust Deed gave to the wife the power of appointment of the trustee by whose discretion the funds of the Trust would be administered and the Trust fund comprised for the most part half the proceeds of sale of the home she had owned jointly with the husband, along with other assets to which she laid claim.  So while context and timing might be suggestive of a ‘disguise, a façade….a false front’, the fact is that the wife’s interest in the home and other assets were ‘quarantined’ and moved into her control, albeit with discretion to distribute to others including herself and her husband who was confronting financial difficulties at the time and potential bankruptcy if the dispute with the Bank went awry.  But the wife had no similar exposure to liability.  In my opinion, the shift that took place by the establishment of the Trust, as initially constituted at least, could not attract a finding of ‘disguise…facade…false front’ and therefore be seen as a ‘sham’.  Nor is there any basis for such a finding arising from the evidence of either the husband or wife. 

8. Before leaving this point, some reference should be made to the manner in which the fund has been administered over time.  The only financial accounts available are those related to the 2002 and 2003 financial years – both showing distributions only to each of the children.  That largely reflects the period before separation and not subsequent years when the wife appears to have had considerable funds held by the Trust at her disposal for one purpose or another.  How that activity has been [or will be] dealt with in the financial accounts is not known, either from the accounts for later years or from any minutes/resolutions reflecting the trustees’ exercise of discretion.  But the very terms of the Trust allow distributions of capital and/or income to be made to the wife, either in her own right as a parent of the specified beneficiaries or pursuant to clause 3.3(d).  So the fact that she has been the recipient of funds does not enhance the proposition that the Trust is a ‘sham’.  The only available finding, in my assessment, is that the Trust was not a ‘sham’ and was validly constituted. 

9. This leads to the s 106B application which seeks to set aside the Deed of Variation. The section relevantly provides:

   ‘106B(1) In proceedings under this Act, the court may set aside or restrain the making of an instrument or disposition by or on behalf of, or by direction or in the interest of, a party, which is made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order.

10. The present definition of ‘disposition’ is this:

    106B(5) In this section:

    disposition includes:

    (a)      a sale or gift; and

    (b)the issue, grant, creation, transfer or cancellation of, or a variation of the rights attaching to, an interest in a company or a trust.’

11. However, that applies to dispositions occurring on or after 3 August 2005 and the former definition applies here:

    ‘disposition includes a sale and a gift.’

12. A number of elements have to be established before considering the exercise of discretion involved: (i) there are proceedings under the Act; (ii) the Deed in question is an ‘instrument or disposition’; (iii) it was made by or on behalf of or by direction or in the interest of the wife; (iv) and it was made to defeat or, irrespective of intention, is likely to defeat an anticipated order in these proceedings. 

13. The first is beyond contention. 

14. As for the second, Mr Batey submits the Deed is a ‘disposition’ because, as he puts it, the wife is ‘disposing’ of her power of appointment under the Trust.  He argues that the definition in ss (5) therefore applies and, as the amendment per ss. (5)(b) of August 2005 has no retrospective effect, the Deed is not caught.  I reject this.  The definition in ss (5), before and after the amendment, relates only to the meaning to be given to ‘disposition’ and is silent about ‘instrument’.  That is to be given its ordinary meaning which clearly includes a Deed such as that under discussion here.  Certainly a Deed of Variation of a discretionary Trust was the ‘instrument’ considered at appellate level in Coventry and Coventry and Smith (2004) FLC 93-184] as it was in Davidson and Davidson (No 2) (1994) FLC 92-469, so there can be no doubt about such a document being an ‘instrument’ falling within s 106B.

15. The third element is also satisfied.  The Deed of Variation recognised the resignation of the wife as the appointor and brought about important and fundamental changes to the Trust by appointing a new appointor and by removing the wife and the husband as beneficiaries in their own right as parents of the specified beneficiaries.  Until then, the wife could have continued to lawfully control the Trust by ensuring it was administered in a manner of her choosing, including administered for her sole benefit, both as to income and capital.  The recitals to the Deed of Variation suggest the wife’s resignation as appointor was preceded by a request from the trustees and that, in turn, was made referable to the trustee’s concern at possible insolvency and the Trust fund being placed in jeopardy.  Yet whatever the thinking behind it or wherever the motivation lay, the plain fact is that nothing, including a request from the trustees, obliged the wife to relinquish control of the Trust by relinquishing the power to appoint the trustees by whose discretion it is administered.  To the contrary, it was within her singular and unquestionable power to remove the trustees and appoint another at any point.  So while the recital suggests the relinquishment of the power of appointment was brought about by the trustees, it was obviously and necessarily done with the wife’s co-operation and consent which she was at no time obliged to give.  Then, having relinquished control and with the new appointor installed, the Deed was altered to remove the ‘parents’ as beneficiaries in their own right.  The steps taken via the Deed of Variation must be seen as having been taken at the wife’s direction. 

16. As for the remaining element, Mr Batey argues that the actions of the wife in resigning as appointor could not be seen as having been done to defeat an anticipated order. His primary argument, as I apprehend it, is that the Trust, from its inception, was created exclusively for the benefit of the ‘primary beneficiaries’ [being the children] and therefore the Deed of Variation could not be seen as satisfying s 106B. To develop the submission, he makes a number of points: the Trust was named the ‘[S] Trust’; the husband gave evidence on affidavit in the Supreme Court proceedings [exhibit 16] to the effect that he did not consider himself a beneficiary under the Trust [because, as Mr Batey explained, he was paying rent to the Trust and that would be inconsistent with him being a beneficiary]; in providing information about his financial affairs in the debtor’s petition he signed in 2005 [annexure M] he did not identify himself as being a beneficiary of this Trust; and, finally, the unsigned memorandum of wishes are an indication that he saw himself as having no interest in the Trust. The ‘primary role’ of the Trust was to benefit the children, it is submitted, and the husband saw no benefit to himself in it other than his position as a category of beneficiary by reason of being a parent of the beneficiaries. Mr Batey supported the argument about being for the sole benefit of the children by arguing that the Trust fund in fact had been administered for their benefit.

17. None of this has any merit for several reasons:

    (a)Putting to one side for the moment whether these points constitute extraneous considerations to interpretation of the Deed itself, they can each be met: the husband, along with the wife, was a beneficiary of the Trust as it was established in 2001 by the very definition of ‘beneficiaries’ for whose benefit the Trust, according to the recitals, was established; the name given to a Trust is irrelevant to the terms of its governing instrument; the evidence of paying rent to the Trust is not at all inconsistent with being a potential beneficiary [amongst others]; when the husband signed the debtor’s petition in 2005 he had been removed, by the 2003 Deed of Variation, as a beneficiary of this Trust; and the unsigned memorandum of wishes prepared some time in 2002 is an irrelevant consideration. 

    (b)On the contrary, as already noted, by its very terms the Trust Deed gave to the wife the power to control the distribution of income and capital by giving her the power of appointment of the trustee/s on whose discretion that distribution depended and by its very terms included the wife and the husband amongst the potential beneficiaries.  By its plain terms it was not established for the sole benefit of the two children. 

    (c)As for the manner of past administration, as also noted earlier, there is limited information available since inception in mid-2001.  Such distributions as were made from income [interest and rent] in both 2002 and 2003 were apportioned between the two children, of the parties.  But for the most part that period is prior to separation and there is no indication how the enormous amount of money coming out of the Trust since 1 July 2003 has been [or will be] accounted for in the financial records of the Trust or tax returns or even whether there has been a record made of decisions by the trustees about any distributions up to the present time via minutes or resolutions.  It all seems to have passed through the wife’s hands and she has applied it for mixed purposes, including her legal costs.  Payment towards her legal costs, in the Supreme Court and here, might be thought to put paid to Mr Batey’s argument that historically the fund has been used for the children’s benefit.  But he argues, citing clause 4(k) of the Trust Deed along the way, that legal costs she incurred were for their benefit because all of the litigation constituted steps she took to secure their assets.  Yet the power given under clause 4(k) [about furthering the ‘interests of the Beneficiaries or any of them’] is a power given to the trustees and the wife has never been a trustee and nor is there any suggestion she was acting as agent in that capacity.  As I assess it, the legal costs she incurred, here and elsewhere, and paid for from the Trust funds could not all be categorised as Mr Batey submitted.  They are more aptly seen as having been incurred on her own account. 

    (d)I should add that there is nothing improper about the trustees having exercised their discretion in the wife’s favour by distributing funds to her and there is nothing improper about her having applied those funds in a manner of her choosing.  Until the variation of 2003 she was a potential beneficiary in her own right and free to apply funds distributed however she wished and after the variation clause 3.3 (d) [which remained untouched] entitled her to receive distributions not as a beneficiary but as a ‘parent’ of the specified beneficiaries and she was not obliged to account for its’ application. 

    (e)Despite these arguments, therefore, the only available finding is that the Trust was never one created to benefit the children alone but created to benefit the described beneficiaries which included, initially as constituted, the husband and wife as the parents of the specified beneficiaries.  It was also created with the wife in control of the appointment of those with the duty of administering it. 

18. There is abundant authority for the proposition that assets held in a discretionary trust controlled by a party to property proceedings in this court may be considered assets of the controller [Bowman (1984) FLC 91-574, Ashton (1986) FLC 91-777, Stein (1986) FLC 91-779, Davidson (No 2) (supra), and Coventry and Coventry and Smith (supra)].  This is because it would be contrary to justice and equity to allow a spouse with control of assets to quarantine them from property settlement proceedings by preserving them for the benefit of the beneficiaries in circumstances where the controlling spouse has the power legitimately to determine at any point to whom income and/or capital will be distributed, including to themselves. 

19. Consistent with the authorities just mentioned, one consequence of the Deed of Variation was to remove assets of the Trust from being brought to account as the wife’s assets in property proceedings between her and the husband and assessment of their respective entitlements accordingly.  There being no other assets from which the deficit could be compensated, it operates to defeat a reasonably anticipated property settlement order.  The intention behind the change, either the wife’s or the trustees’, is irrelevant.  The fourth element is satisfied. 

20. No submissions were made about the exercise of discretion in that event, but this is not a case where the exercise of discretion can be withheld.  The Deed of Variation should be set aside.  The former position should be restored to what was established and prevailed during the marriage and beyond separation until this step was taken in 2003.  An order will be made accordingly.  Consistent with authority, the effect will be to attribute to the wife the value of the Trust assets, which currently is the H home worth an agreed $1.9 million.  It follows that her liabilities should also include the unpaid land tax. 

21. Of course once these proceedings are over there is nothing to prevent the wife from executing another Deed of Variation in the same or similar terms to the 2003 Deed if that is what she chooses to do.  That is to say, if she wishes to relinquish control of the Trust and exclude herself [and [the husband]] as a beneficiary, it will be a matter for her.  But such a decision cannot govern the distribution of property between her and the husband here. 

22. It remains to consider the other areas of disagreement – legal fees paid and liabilities – which in one sense are intertwined.  It is not a straightforward issue to resolve by reason of the rather unsatisfactory state of the evidence which counsel clarified to some extent in a further mention post-hearing. 

23. It is common ground that the wife has paid legal costs related to these proceedings [or money is held by her solicitor in trust] totalling just under $150,000 [see exhibit 4].  Those funds have come from various directions, noted for the most part in “A” attached to exhibit 4 to which there may be added her sister, E, who advanced the amount of almost $40,000 held in trust by her solicitors.  It will be noted that the source of funds falls into two categories: (i) relatives and the wife’s fiancé and (ii) Trust funds.  It will also be noted that in her financial statement of 19 July 2006 she deposed to $100,000 having been obtained from Mr R by way of loan to pay legal costs.  Yet this is not a source identified in exhibit 4.  In any event, in as much as money has come from relatives to pay legal costs it is the wife’s case that they are debts that have to be repaid.  In as much as money came from Trust funds [$38,191] it might be thought arguable that this should be added back to her assets, given the property of the Trust is to be regarded for present purposes as her property, the proposition being that an asset that would otherwise be available to a party has been ‘depleted’ by that amount for the purpose of paying legal costs.  But Mr Schonell expressly declined to take up that line of argument and maintained the submission that both the paid legal costs and her liabilities not be included in calculating the available net assets. 

1. Turning to the liabilities, there have been a number of cases at appellate level concerned with the approach to debt, but reference to the following passages from Biltoft and Biltoft (1995) FLC 92-614 [Nicholson CJ, Ellis and Buckley JJ] will suffice:

   ‘A general practice has developed over the years that, in relation to applications pursuant to the provisions of s. 79, the Court ascertains the value of the property of the parties to a marriage by deducting from the value of their assets the value of their total liabilities.  In the case of encumbered assets, the value thereof is ascertained by deducting the amount of the secured liability from the gross value of the asset.  See, Ascot Investments Pty Ltd v. Harper & Anor (1981) 148 CLR 337 where Gibbs J. (as he then was) pointed out at p 355 that the Court “must take the property of a party to the marriage as it finds it.  The Family Court cannot ignore the interests of third parties in the property, nor the existence of conditions or covenants that limit the rights of the party who owns it”.  Where the assets are not encumbered and moneys are owed by the parties or one of them to unsecured creditors, the court ascertains the value of their property by deducting from the value of their assets the value of their total liabilities, including the unsecured liabilities.’

and at 82,127:

‘Notwithstanding the general practice which has developed, the Court has indicated that it may properly determine not to take into account or to discount the value of an unsecured liability in certain circumstances.  Such liabilities would include but are not limited to a liability which is vague or uncertain, if it is unlikely to be enforced or if it was unreasonably incurred.’

1. Mr Schonell argues essentially that there is no evidence to support a finding that any of the various advances made to the wife over time were loans or, alternatively, he argues she has not established any obligation to repay advances.  He develops the submission with reference to her evidence about advances from Mr R being unsatisfactory in that she failed to mention his gift of $32,000 [and her uncertainty about the amount gifted], or Mr R’s death, or that there had been no demand for repayment by him or by his Estate.  Similarly, the evidence about the advance from Ms H was unsatisfactory in that $20,000 was said to have been advanced in 2004 but the purpose was unclear and if it was bridging finance as she initially claimed that was at odds with the H property having been purchased earlier in the year.  Nor had there been any demand for repayment from Ms H.  He submits she was vague and uncertain about the advances from Mr A who also, like Mr G and the others, had made no demand for repayment.  Added to this, the wife’s various financial statements make no reference to loans said to have been made before those documents were sworn: for example, she made no reference to any debt to Ms H in her financial statement sworn 23 June 2004 [assuming it had been advanced by then], no reference to any debt to Ms H, Mr G or Mr A in her financial statement sworn 30 September 2005, and the amount said to be owing to Mr G in her financial statement sworn 19 July 2006 is $20,000 rather than the $30,000 she gave evidence about.  This lack of specificity and lack of any demand or request for repayment was compounded by the absence of evidence from anyone who had advanced money to her though clearly available to give that evidence [excluding [Mr R]].  Mr Schonell also pointed to the wife’s evidence, despite her assertion she will have to repay the advances following the completion of the proceedings, that she cannot foresee a period over the next five years when she would be able to repay the money advanced and ultimately her evidence was that it would be repaid ‘when I can’.  Also, it is submitted that her assertion of obligation to repay has to be assessed in light of the fact that she has had and still has assets she could have realised to repay some of the money given to her [eg two paintings valued at $104,000] and yet she has taken no steps to do so. 

2. Mr Batey correctly conceded that the wife’s evidence on the topic was well short of ‘perfect’, though she was ‘unshaken’ on the evidence of having received $100,000 from Mr R.  As for the remainder, about which she was unclear, he submits there is little doubt money was received by her or that she considers she has an obligation to repay it.  Amongst other submissions, Mr Batey contends it is not necessary for a party to come to this Court and present evidence from the lender on affidavit to verify loans and he dismisses the suggestion that the wife could have realised assets she has and put the proceeds towards repayment if in fact she feels herself so bound. 

3. Despite Mr Batey’s best efforts with the situation, the merit does not lie with the arguments he put.  When assertion of debt is a relevant and unresolved issue, either in this court or any other, it has to be proved.  That may be an elementary or complex exercise depending on the nature of the claim and the surrounding circumstances.  The former applies here and some basic steps to put evidence covering the necessary elements would have put the matter to rest.  But that was not done and as the evidence stands there was no proof of debt totalling $216,000 or any lesser amount.  The deficit comes from the wife’s own case.  The remedy was to prove the debt and take up the ultimate finding later in a costs claim.  Having said that, it can be accepted that the wife has received substantial funds from various persons and for present purposes that can even be accepted as being in the order of $216,000.  What is not established is that she has any obligation to repay any of the advances or any portion of them, either now or in the foreseeable future or, alternatively, if there was an obligation to repay by reason of the agreed terms of the advance then it is unlikely to be enforced in the foreseeable future by those who advanced money.  The upshot is that the amount should not be brought to account here as debt she has to repay. 

4. I find the assets and liabilities to be as follows:

   Assets –The wife

   H Home (Trust)   1,900,000

   B Account  3,746

   Combined ING Accounts  406

   BMW motor vehicle  40,000

   Personalty  162,345

   Jewellery  60,000

   Children’s Trust ING Account  370

   Superannuation         15,139                     282,006

   Sub-total   2,182,006

   Liabilities

   Land tax  19,785

   NAB Savings               2,000

   Visa card                   20,923  42,708

   2,139,298

   Assets – The husband

   Bank account                17

   Superannuation   1,424,392                 1,424,409

   Total assets   3,563,707

1. Against that background, the parties’ contributions of various kinds, identified in s 79(4), are to be evaluated. 

2. Though it is not possible to quantify it, at the beginning of their 6 year relationship the husband was in a far stronger financial position than the wife.  They lived initially in a home he owned at D and then at W after the construction of the home there was completed.  He supported the family from his earnings.  However, his financial position collapsed four years later when the Group through which his business operated was placed in liquidation.  Apart from his superannuation, personal assets which were introduced in some form into the relationship some years earlier were salvaged from the collapse and realised around $6 million.  Half of the salvaged funds were put into his hands and ultimately went towards litigation costs and support of the family.  He no doubt worked diligently in the course of the marriage and took whatever steps he deemed necessary to operate his business and provide financially for the family.  That included making decisions, with the assistance of advisers, about matters related to the litigation that spanned several years before it came to an unsuccessful and costly conclusion.  None of that has been the subject of any criticism.  In addition to his work in the business and involvement in the litigation, he contributed to the welfare of the family after the birth of the children through his role as a parent.

3. The wife’s efforts at earning income earlier in the marriage did not succeed but there is no criticism of her for that.  It is acknowledged that she made a significant contribution throughout the marriage as a homemaker with the assistance of some paid help and as a parent after the children’s birth.  She was also involved in seeing to various matters associated with the completion of the W home when it was under construction.  By the role she undertook the husband was able to attend to his business and, later, to the litigation that must have preoccupied him until separation and beyond.  Her joint ownership of the W home was also a contribution towards the sale proceeds remaining available to the family upon the collapse of the business. 

4. In the four years or thereabouts since separation both have continued to make contributions of various kinds.  They have each continued their roles as parents though the wife has had the children in her care for most of the time.  She [with the children] has had exclusive use of the properties owned by the Trust which provided a home for her and the children over these past years.  Her financial support and that of the children has been met not by direct payments by the husband of maintenance and/or child support but by distributions from the Trust funds which included the $100,000 that came from savings held in an account operated by the husband until 2001.  As Mr Batey pointed out, the availability of those savings is properly seen as funds accumulated during the marriage and therefore represents a contribution not by the husband alone but by both parents.  I could not calculate how much money the wife has had available from Trust distributions since separation.  The 2003 financial accounts reflect cash at bank of over $1.445 million as at 30 June 2002 and cash at bank of over $1.024 as at 30 June 2003.  This latter date was before the purchase of the H home and absence evidence of what was paid as the purchase price or the associated costs there is no way of knowing what remained in available cash.  Yet if the sale proceeds of the unit and the current value of the H home are anything to go by, it cannot have been an insubstantial amount.  Whatever the amount, similar to the view taken of the $100,000 savings made available by the husband in 2001, the availability of those funds must be seen as a contribution by both parents.  In the circumstances, the husband, along with the wife, should be seen as having made a proper financial contribution towards the support of the children post separation. 

5. As for the apportionment of the available assets between them, Mr Batey’s submits for an assessment of equality of contribution to separation, adjusted to 55:45 in the wife’s favour to account for post-separation contributions.  Of course this was based on a net asset figure different from that adopted earlier.  Nonetheless, that assessment impresses as not giving sufficient weight to the ‘personal’ assets the husband introduced to the relationship initially, more particularly the W home which provided accommodation for the family initially and whose later sale proceeds were the major source of the funds ultimately salvaged from the financial collapse.  Nor do I see any justification for an adjustment for post separation factors of the magnitude suggested, particularly when it is not possible to calculate how much cash the wife has had available to her through the Trust from separation, or at least from 30 June 2003.  On the other hand, Mr Schonell submits that contributions ought to be assessed in the proportions of 80:20 in the husband’s favour.  Yet that strikes me as too weighted in his favour and tends to unduly discount the contributions made by the wife by reason of the roles she has undertaken over the years. 

6. My own assessment is that their respective contributions would be adequately reflected by 30:70 in the husband’s favour. 

7. I turn now to the relevant s 75(2) factors. 

8. (a)      Based on the assessment made of their contributions, the wife would be entitled to receive assets to the value of $1,069,112 and the husband to receive assets worth $2,494,595.  That is a rather large difference though of course it has to be recognised that a good portion of what the husband would receive if that were implemented would be his superannuation entitlement of some $1.424 million which is not available to him immediately though, given his age, would be in the reasonably foreseeable future but depending on when he retires from the workforce. 

   (b)Indeed, there is a disparity of some 18 years in their ages.  Not only does this mean the husband is far closer to being able to access his superannuation than the wife could access her far lesser entitlement; it also means she has a longer working life ahead of her and therefore a longer period of future earning capacity. 

   (c)Neither have any health issues to impede their ability to work or their capacity to earn income.  Yet neither is presently earning an income from employment and both have been for some time in the rather unusual position of having available the financial resources from others to meet their costs of living and lifestyle expenditure.  That makes their future somewhat difficult to predict. 

   (d)That said, the wife points to her responsibility for the children as relevant to any assessment of her income earning capacity.  I accept that it must be recognised that during the marriage she took the role of primary responsibility for the children’s day to day care and that role has continued since separation.  Added to that, it is also recognised that she has not been in paid work for some years and, while that may be understandable given her child care responsibilities, there is no indication of any attempt to seek work of a kind she might be able to undertake or even to position herself for financial independence in the future by re-skilling in some new direction.  It therefore seems unlikely that she will make the decision to support herself from paid work in the future.  However, her fiancé is plainly a person of considerable means and she has had the benefit of first class or business travel to overseas holidays, five star hotels, her weekly expenditure, and her credit cards paid by him.  There is no suggestion any of this is likely to change and therefore her future has to be seen in light of this significant financial resource continuing to be available to her.  Despite Mr Schonell’s submissions, advances from friends and relatives probably should be seen as falling into a different category of financial resource; certainly there is no indication that earlier advances made in the context of these unresolved property proceedings will continue.  On balance, it seems reasonable to view her fiancé’s financial support as likely to continue into the future and that will be the not inconsiderable means by which she will be financially supported. 

   (e)As for the husband’s earnings and earning capacity, there are some unusual aspects to it also.  He works long hours for his father, around 60-70 hours per week, in a business in which he has no interest for which he receives no wage and he has been doing so for well over two years now.  The $500 per week he receives from his father is unrelated to the business and is a gift.  The husband is plainly an experienced businessman who must surely be seen as having a capacity to earn a good living from the skills that allowed him to operate his own business over many years and there is no reason to think he could not earn a good living were he to put himself in the employment market.  But what would be a reasonable level of remuneration for his skills, I could not say.  That was not canvassed.  Certainly it is more than the nothing he is paid for his work now.  It is not disputed that he would not have to make a contribution to his bankruptcy from earnings up to $60,000 per annum.  But that hardly identifies his earning capacity.  The gross annual income necessary to generate $500 per week after tax [the equivalent of the gift from his father] is around $32,000.  Nor does that identify his earning capacity.  In my view it is reasonable to see his current situation as surely coming to a halt at some point in the foreseeable future.  Either the business generates sufficient to pay him for his efforts or he finds work that will remunerate him for it, Mr Schonell’s arguments about his ‘moral obligations’ to his father notwithstanding.  The limits of that transitional period I take here to be March 2008 when he will [presumably] be discharged from his bankruptcy.  If the business is not remunerating him adequately he should be taken as having a capacity to earn a relatively comfortable income from elsewhere by other means. 

   (f)The consent orders mean the husband will have the children in his care regularly throughout the year, including equal time during school holidays.  But the wife will continue to be responsible for their care for most of the time and, as they are still quite young, that will remain the case for their many remaining dependent years.  As for the children’s financial support over those years, that is difficult to predict.  The application for child support departure is to be discussed shortly and that will provide for some financial support to be forthcoming from their father over the next 13 months or more until the current assessment ceases to operate.  At that time the level of financial support from each parent will be assessed according to the statutory formula or any administrative or court ordered departure from it.  In the short term, therefore, the children’s support will very likely come from the husband to the extent provided by the departure orders made here and from the wife from the financial resource she has available as discussed.  For the longer term, obligations will be determined according to circumstances at the time.  But I think it reasonable to see the husband as contributing to the children’s financial support beyond the operation of the current child support assessment not only during the time he has them in his care but also during the majority of time they will spend with their mother.  In all likelihood his circumstances will be seen from that point as better than they are now because his earning capacity could not be seen as limited as it is now beyond that date by which time his efforts to get his father’s business into a viable state would be apparent and his situation assessed in that light. 

9. Overall, the weight favours an adjustment in favour of the wife.  The factors relevant to that are the disparity of property they would be entitled to retain if left to their contributions, the greater responsibility she will have for the children’s day to day supervision and care for many years to come during their dependency, and the greater responsibility she will have for meeting their costs of support at least in the short term until the husband’s position becomes clearer which should be no later than March next year.  In my assessment, a generous adjustment would be as high as 25% of the total assets set out earlier or 25% of $3,563,707 which is $890,926. 

10. In that event the wife’s total entitlement would be brought up to 55% of the net assets.  Yet the husband’s case is that she should retain all of the property she now has and he would retain his superannuation.  The outcome he proposes would bring about a distribution to her of 60% of the total net assets and not 55% as assessed. 

11. Of course there may be room for other views about the split between contributions and s 75(2) adjustment.  Nonetheless I take the view that an overall distribution of 55% of the net assets to the wife’s, having regard to the history recounted, including the weight to be given to the assets introduced by the husband at the beginning of their relationship, would bring about a just and equitable outcome.  However, the husband’s position means that she will in fact receive around 60% and orders will be made to put that into effect. 

Child Support Departure

1. Finally, an assessment must be made of the wife’s child support departure application.  As exhibit 5 reflects, she seeks departure from the nil assessment for the period of the current assessment – from 15 December 2006 to 13 March 2008.  Instead, she seeks payment for each of the children of 50% of their school fees and $200 per week per child.  She also seeks an order [1.1.1.2] for school fees and expenses as they appear on the school account from the commencement of year 7 or such earlier year as may be agreed the children would attend [several private schools are then listed], but that particular aspect can be disregarded in reality because it is hypothetical and not foreseeable from anything presented in evidence. 

2. The position is governed by the Child Support (Assessment) Act 1989 which provides for the court to make a departure order in relation to a child in the special circumstances of the case if the court is satisfied:

   ‘(i)that one or more of the grounds for departure mentioned in subsection (2) exists or exist; and

   (ii)      that it would be:

   (A)just and equitable as regards the child, the carer entitled to child support and the liable parent; and

   (B)      otherwise proper…’

1. The grounds identified in the wife’s application are said to be these:

   ‘7.1 That in the special circumstances of the case the assessment results were unjust and an inequitable determination of the level of child support because of the husband’s present income, earning capacity and financial resources.
    7.2 That in the special circumstances of the case, the assessment of child support is unjust and inequitable having regard to the proper needs of the subject children.’

1. However expressed, I propose taking the grounds relied on to come within s 117(2)(c)(ia) and (ib) [below]:

   ‘(c)     that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:

   …

   (ia)because of the income, property and financial resources of either parent; or

   (ib)     because of the earning capacity of either parent; or

   ….’

2. Essentially the legislation requires this ground to be established by having regard to the proper needs of the children and an assessment of the capacity of both parents to contribute to those needs having regard to their income, property and financial resources. 

3. Taking the children’s needs first, the wife has set them out in her most recent financial statement at a total of $1,468 per week for both or $734 each.  She was taken to some of the figures during cross examination and I am satisfied that the figure proposed represents an overstatement of what might be considered proper in the particular circumstances of these children.  Certainly it is considerably in excess of the figures discussed in the studies related to the costs of supporting children, whether that be the Lovering or Lee figures.  Some pruning could therefore be undertaken to some of the figures to reduce it considerably.  When the individual items are reviewed, household supplies, house repairs, telephone, clothing and shoes, activities, entertainment and hobbies, holidays, education expenses, furniture and appliance repairs, and hairdressing are all areas that could be reduced somewhat.  In my assessment, it would be reasonable to see the children’s needs as more in the order of around $400 per week each. 

4. As for the husband’s capacity to make a contribution to that, his financial circumstances as they relate to property and financial resources as well as income and earning capacity have all been discussed earlier and there is no need to repeat any of the detail of that.  It is recognised that he has his own costs to meet in so much as they are not met by contributions from his wife and that he has some additional expenses that she does not meet from the housekeeping he provides to her.  I assess the proper contribution by him from the weekly funds he receives to be around $100 per week.  That amount would enable him to continue to pay to his wife a regular amount for housekeeping as he does now and retain a portion of what he receives for additional day to day expenditure for himself.  Obviously that is not anywhere near the children’s needs or even half of their needs if apportioned equally between both parents.  But it is a contribution from the limited funds he receives each week that should assist in some way, even if that is put towards the children’s school fees and some of their other expenditure.  It is an amount that would be payable for a relatively short time until March 2008 when the situation can be reassessed after the issue of a fresh certificate at which point, as already discussed, it would be expected that his earning capacity would be re-appraised. 

5. Obviously it is recognised that in setting the husband’s obligation for the next year or so at this amount that the wife will have to meet the balance of their needs from resources available to her.  That includes, of course, the property to which she will become entitled from orders now to be made as well as her resort to her fiancé’s financial provision discussed earlier.

Schedule - parenting orders

Orders made by consent 18 December 2006

1. That except as provided for hereunder, the children of the parties of these proceedings [W] (born [in] August 1998) and [J] (born [in] May 2000) (“the children”) live with their mother.

2. That the children live with their father as follows:-

   (a)During the school term each alternate weekend from after school on Friday until the commencement of school on Monday (or on Tuesday in the event of a Public Holiday);

   (b)Overnight each Wednesday afternoon from the conclusion of school until the following Thursday morning.

3. That for the purposes of the children living with their father and in the event that the children are at their mother’s residence then the father shall collect the children from and return the children to the bottom of the lane at [H].

4. That the parties have joint responsibility for decisions concerning the long term care, welfare and development of the said children.

5. That each of the parties have sole responsibility for decisions concerning the day to day care, welfare and development of the children for such periods as the children or either of them are spending time or living with that party.

6. That for all school holidays periods commencing from 2007:-

   (a)the children live with their father for the second half of the school holidays for odd numbered years to a midway point and continuing in each alternate year;

   (b)the children live with their father for the first half of even numbered years until the midway point and continuing each alternate year.

7. Subject to Order 10 hereof for the December/January holiday period commencing 2006 the children live with their father for the first half of these holidays commencing after school on 21 December 2006 until 5.00pm on 8 January 2007 and then live with their mother for the remainder of the said holiday period.

8. That in those years that the children live with their mother in the second half of all school holiday periods, the children shall commence living with their father on the first weekend of the school term.

9. That in those years that the children live with their father in the second half of all school holiday periods, the children shall commence living with their mother on the first weekend of the school term.

10. That for the purpose of calculating the times that the children shall live with the parties pursuant to Orders 5 to 7 inclusive, the commencement of each school holiday period shall be 5.00pm on the last school day of the term and concluding at 5.00pm on the day prior to the children attending the first day of the school term.

11. That during any periods that the children are not residing with a party then the party with whom the children are not residing shall have telephone contact between the hours of 7.00pm and 8.00pm.

12. In the event that the children or either of them select a sport or activity necessitating their attendance in a winter or summer sports program then both parties should do all things necessary to deliver the children to such sporting activities including training for that sport whilst the children are living with them and in the event that the wife is unable to take the children to such sporting event or training then she shall notify the father and allow him to collect the children and take them to that sporting activity and return them to her.

13. That in the event that the children’s mid-week training time changes to another evening, then the mother agrees to vary Order 5(b) regarding mid-week contact to such other night as is necessary to enable the children to attend training.

14. That each of parties shall keep the other informed about the health of the children whilst the children are in that parent’s care in the event that either of the children is unable to go to school due to such illness then each party shall discuss with the other the proposed health management of the child.

15. That notwithstanding any other Order herein contained the children shall spend time with their father on Father’s Day in the event that they are not already spending time with him between the periods of 10.00am to 5.00pm that day.

16. That notwithstanding any other Order herein contained the children shall spend time with their mother on Mother’s Day in the event that they are not already spending time with her between the periods of 10.00am to 5.00pm that day.

17. That notwithstanding any other Order herein contained the party with whom the children are not living with on each of the children’s birthdays shall spend time with both children on each of their birthdays for a period of two hours as agreed between the parties or failing agreement from after school or in the event of no school from 3.00pm to 5.00pm on each of those days.

18. That notwithstanding any other Order herein contained the parent with whom the children are not living on that parent’s birthday shall spend time with both children on that parent’s birthday for a period of two hours as agreed or failing agreement from after school or in the event of no school from 3.00pm to 5.00pm that day.

19. That without admission, each of the parties be and is hereby is restrained from:-

    (a)Consuming alcohol to excess whilst the children or either of them are in that parties’ care;

    (b)      Consuming or otherwise taking any illegal drugs;

    (c)Denigrating the other or the other’s partner or members of the other partner’s family or causing or permitting such denigration to or in the presence and/or hearing of the children or either of them.

20. That in the event that either party is unable to care for the children for a period greater than 48 hours then that parent shall notify the other and the other parent shall be given the first right to care for the children in the absence of the first said parent.

21. That both parties shall ensure that during the school week when the children are in their care, except in emergencies, that the children are put to bed in their home at a reasonable hour.

Orders made by consent 21 December 2006

1. That notwithstanding the orders for the children to spend time with each of their parents during the Christmas school holidays, the children shall spend time with their father from 5pm Christmas Day to 5pm Boxing Day in odd numbered years and with their mother from 5pm Christmas Day to 5pm Boxing Day in even numbered years.

2. For the purpose of facilitating order 1 hereof the father shall transport the children to and from the location where the children shall be spending Christmas Day/Boxing Day with the mother provided the children are in the Sydney metropolitan area which for the purposes of these orders include Dural.

I certify that the preceding sixty (60) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Moore

Associate: 

Date:  2 February 2007

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as BEESON & SPENCE