Beklar & Beklar
[2013] FamCA 327
•10 May 2013
FAMILY COURT OF AUSTRALIA
| BEKLAR & BEKLAR | [2013] FamCA 327 |
| FAMILY LAW – PROPERTY PROCEEDINGS – Where it is just and equitable to alter the parties’ rights and interests in their property – Stanford v Stanford [2012] HCA 52 applied FAMILY LAW – ASSET POOL – Whether unvested share units from an employment equity plan are an asset or financial resource – Where share units cannot be sold, assigned or dealt with until they vest – Unvested share units a financial resource –Whether assets disposed of after separation should be notionally added back to the asset pool – Whether the treatment of funds owned at separation to pay legal fees should be added back –Where the payment of legal fees by the husband from post-separation income considered – Where payment of legal fees by the wife constitutes a premature distribution of property albeit property that no longer exists – Where it should be dealt with pursuant to s 79(4) rather than create a notional pool – Where husband’s paid legal expenses taken into account pursuant to s 75(2)(o) FAMILY LAW – SPOUSAL MAINTENANCE – Where the wife’s chances of paid employment are hindered by her years out of the workforce – Where the wife is entitled to maintenance for the remainder of the year in order to re-train and prepare to return to full-time employment FAMILY LAW – CHILD SUPPORT – Where a departure order is sought in accordance with the Child Support (Assessment) Act 1989 (Cth) – Where special circumstances must be shown for a ground of departure – Where the wife’s necessary commitments exhaust her income thus her capacity to contribute to the children’s support – Whether the children’s attendance at private fee paying schools is a style of education in the manner that was expected by the parties – Where risk of hardship to liable parent if order made for total duration sought – Closed period order made |
| Child Support (Assessment) Act 1989 (Cth): ss 116, 111, 112, 3, 4, 114, 121, 117, 121, 124 Evidence Act 1995 (Cth): s 140 Family Law Act 1975 (Cth): ss 79, 79(4), 75(2) Family Law Rules 2004: rr 1.11, 1.12, 15.47(1) |
| AJO & GRO (2005) FLC 93-218 Stanford v Stanford [2012] HCA 52 |
| APPLICANT: | Mr Beklar |
| RESPONDENT: | Ms Beklar |
| INDEPENDENT CHILDREN’S LAWYER: | Legal Aid NSW |
| FILE NUMBER: | SYC | 3556 | of | 2008 |
| DATE DELIVERED: | 10 May 2013 |
| ORDERS MADE: | 10 May 2013 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Ryan J |
| HEARING DATE: | 10-13 December 2012 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Lloyd SC |
| SOLICITOR FOR THE APPLICANT: | Barkus Doolan Kelly |
| COUNSEL FOR THE RESPONDENT: | Mr Batey |
| SOLICITOR FOR THE RESPONDENT: | Paul & Paul |
| COUNSEL FOR THE INDEPENDENT CHILDREN’S LAWYER: | Mr Kenny on 10 December 2012 |
| SOLICITOR FOR THE INDEPENDENT CHILDREN’S LAWYER: | Legal Aid NSW |
Orders made 10 may 2013
That within three (3) months of the date of these orders the husband pay to the wife $41,382.00.
That within three (3) months the husband do all acts and things in order to transfer to the wife all of his right title and interest in the property situated at and known as B Street, Suburb T in the State of New South Wales being the whole of the land contained in Folio Identifier … .
That the wife shall indemnify the husband and keep him indemnified in respect of all liability whenever and however arising in relation to B Street, Suburb T.
Simultaneously with the transfer to the wife of the husband’s interest in B Street, Suburb T the wife shall provide the husband with a discharge of the mortgage registered number … to AMP Bank Limited secured upon the title of the Suburb T property.
That the parties shall forthwith join in the sale of the Type N boat with 115 HP Evinrude motor and associated accessories with the net sale proceeds to be divided 75 per cent to the wife and 25 per cent to the husband.
That in the event the wife does not comply with Order 4, then she shall forthwith do all acts and things necessary to effect a sale of the Suburb T property for the best price reasonably obtainable.
On settlement of the sale of the Suburb T property the proceeds of sale shall be paid in the following manner and priority:
(a)All costs and expenses of sale including legal costs and disbursements, agents commission and valuers fees and auctions expenses;
(b)The amounts necessary to discharge the Suburb T mortgage;
(c)The amounts required to pay all municipal, and water rates outstanding with respect to the Suburb T property; and
(d)The balance remaining to the wife.
That forthwith the husband and the wife do all acts and things necessary for the parties’ portfolio of Commsec shares in the joint names of the parties to be sold at the best price reasonably obtainable and the proceeds applied as to the wife 75 per cent of the net sale proceeds and the balance to the husband.
Unless otherwise provided by these orders:
(a)the husband hereby indemnifies the wife from and in respect of all actions, claims, suits and demands as may be made against the wife in relation to all liabilities in the name of the husband;
(b)the wife hereby indemnifies the husband from and in respect of all actions, claims, suits and demands as may be made against the husband in relation to all liabilities in the name of the wife, including any liability of the wife and/or the parties to the wife’s father.
Pending compliance by the wife with Order 4 of these orders, she shall pay as and when they fall due mortgage payments in relation to the AMP Line of Credit, council and water rates and utilities in relation to the Suburb T property.
Pending compliance by the wife with Order 4 of these orders, she is restrained from further encumbering or increasing the amount due to AMP in relation to the Suburb T property.
In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to these orders then the Registrar of the Court be appointed pursuant to section 106A of the Family Law Act 1975 (Cth) to execute such deed or instrument in the name of the defaulting party and to do all acts and things necessary to give validity and operation to the deed or instrument.
That the husband pay to the wife by way of spousal maintenance the sum of $800.00 per week by depositing that amount into the wife’s nominated bank account on a weekly basis, the first payment to be made within 7 days of the date of these orders and to occur weekly thereafter until 31 December 2013.
That pursuant to section 117 of the Child Support (Assessment) Act 1989 (Cth) there be a departure from the administrative assessment of child support dated 18 September 2012 so that the periodic amount payable by the husband in relation to the children, O born in February 2001 and P born in March 2004 is:
·for the period commencing on 10 May 2013 until 31 December 2013 in the amount of $300.00 per week per child, and
·for the period commencing on 1 January 2014 until 31 December 2016 in the amount of $400.00 per week per child.
That pursuant to section 124 of the Child Support (Assessment) Act 1989 (Cth) in addition to the periodic payments referred to above, from the commencement of term 1, 2013 and until the child, P finishes primary school the husband shall pay school fees for his attendance at Q School.
That the annual rate of child support payable by the husband pursuant to Order 14 is not reduced as a consequence of Order 15.
Subject to any application for costs, all outstanding applications are dismissed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Beklar & Beklar 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 3556 of 2008
| Mr Beklar |
Applicant
And
| Ms Beklar |
Respondent
REASONS FOR JUDGMENT
These are proceedings for property settlement, spousal maintenance and child support. Mr Beklar (“the husband”) commenced proceedings by his application for parenting orders filed in the Federal Magistrates Court on 18 June 2008 to which a claim for property settlement orders was subsequently added. Three years later the proceedings were transferred to this Court. Fortunately for the parties and their two children, on the first day of this hearing parenting orders were made by consent.
There are few significant issues raised in relation to the formulation of the property pool and, however it is constructed, the husband claims 40 per cent. In this regard, he says the application of s 79(4) of the Family Law Act 1975 (Cth) (“the Act”) achieves equality and concedes a 10 per cent s 75(2) adjustment in the wife’s favour. He proposes that she takes a portion of her property settlement by way of a superannuation splitting order and in accordance with her application, retains her interest in the family home at R Street, Suburb C (“the Suburb C property”) and receives an investment property at B Street, Suburb T (“the Suburb T property).
Ms Beklar (“the wife”), in addition to receiving the two properties already mentioned, seeks that the husband discharge an AMP line of credit in the amount of $308,000.00 secured on the Suburb T property. She opposes a superannuation splitting order and on the basis she receives 85 per cent of the assets (75 per cent pursuant to s 79(4) and an additional 10 per cent pursuant to s 75(2)), says that no payment is due to the husband. The effect of her application is that he would be left with superannuation which he cannot access for at least 20 years, an apartment with little equity, personalty, share options and the AMP liability which he has no obvious capacity to borrow plus other debts. In addition, she seeks $1,000.00 per week spousal maintenance for three years and a child support departure order which would result in the husband paying $500.00 per week per child, plus private school fees and all education expenses until the children finish secondary school. Spousal maintenance would cease when their youngest child commences secondary school. As the quantum of maintenance and child support sought would suggest, the husband has a good income which, in relation to all applications, the wife says weighs significantly in her favour.
The husband does not agree that the children should attend private fee paying secondary schools or to pay child support in excess of the child support formula. Having supported the wife since separation he says it is time she returned to paid work albeit a three month period of additional support was said to be appropriate. It is his view that the wife should contribute to the children’s financial support, which outcome he says will be achieved by the application of the child support formula.
It is apparent there is a wide divergence in the outcomes sought. To a considerable extent, in the property settlement proceedings their differences centre on the significance of the wife’s greater initial contribution, the value of a home provided by the wife and her family throughout cohabitation, her capacity for paid employment and the formulation of the property pool. In relation to the property pool, the most significant issue is the treatment of a breathtaking $782,000.00 combined paid legal fees. Once it is appreciated that the balance of the property pool is in the vicinity of $1.06 million it is apparent this litigation has been undertaken without any sense of proportionality.
Background Facts
Throughout these reasons contentious findings of fact will be determined upon the balance of probabilities (s 140 Evidence Act 1995 (Cth)).
The wife was born in May 1966 and is 46 years old.
The husband was born in April 1969 and is 44 years old.
Together with her parents and three siblings, in May 1986, the wife purchased the Suburb C property in which she has a one-sixth interest.
In 1987 the husband commenced full-time employment as a trainee in the financial industry with Company U.
In June 1989 the wife commenced full-time employment as an assistant with Company V.
In August 1990 the parties married and commenced cohabitation. By then the husband was employed in the financial industry, for which he earned $70,000.00 per annum. He owned a motor vehicle and had modest savings, the precise amount of which he cannot recall and was debt free.
At the commencement of cohabitation the wife did not have any liabilities and had the following assets:
·one-sixth share in the Suburb C property;
·25 per cent interest in W Street, Suburb X (“W Street”);
·one-sixth share in Y Street, Suburb X (“Y Street”);
·cash savings - $4,694.00;
·jewellery - $1,000.00;
·Ford Cortina - $2,000.00; and
·modest superannuation, the value of which is not known.
In addition, the wife claims $20,000.00 was gifted by her parents and that she had wedding gifts and a glory box. The husband disputes the wife’s evidence about the $20,000.00. In the ocean of documents produced none were presented which support the wife’s evidence on this topic. Nor did her parents (with whom she resides) give evidence in support of her claim about this gift. Notwithstanding the wife’s family’s generosity which will be discussed later, she failed to establish the gift.
At that time, the wife earned approximately $23,000.00 per annum.
From the date of marriage until November 1990 the parties lived rent free with the wife’s parents.
In November 1990, the husband was retrenched in relation to which he received a termination payment of approximately $25,000.00 net. This was equivalent to slightly more than the wife’s annual gross salary. These monies were used for the parties’ living expenses. At about the same time, they moved into the Suburb C property where they lived until separation. It had been tenanted and was in poor condition. In preparation for occupation the husband repaired and tidied the home and gardens. This was a substantial exercise which took some months to complete. The wife and her father assisted to a small degree. Although the parties paid rates and taxes they were not charged an occupation fee. Evidence is adduced from a single expert, Mr Z, to the effect that had the parties paid market rent this would have cost about $364,520.00. This evidence was unchallenged and is accepted.
In 1991, the husband commenced full-time degree studies at university. Other than three months work with a financial institution between December 1994 and February 1995, during the five years he was at university he did not have paid employment. Essentially, the parties lived on the wife’s salary and his termination payment. There can be no doubt that the provision of housing without charge made their situation easier than it would have been.
Having completed his university studies, at the commencement of 1996, the husband did graduate studies. He commenced full-time employment as a professional with Company V in May 1996 on a salary of $52,000.00 plus superannuation. Once again the husband earned more than the wife.
In about October 1996, the wife’s brother Mr BB purchased her interest in Y Street for $108,000.00. The purchase price was paid in instalments which commenced in October 1998 with the final payment made on 1 December 2003. These funds were used towards the purchase of the Suburb T property.
The wife’s father gave the parties $20,000.00 in February 1997.
In August 1998, the husband left Company V to take up a position with Company CC as a professional. It is at Company CC that his income started to climb.
In November 1998, the wife resigned from Company V against whom she made a workplace claim that she had been bullied. Since then, other than for a brief period of commission selling, the wife has not sought paid employment. Indeed, it was a point of contention that the wife resisted the husband’s entreaties she return to paid employment. The husband’s evidence that the wife’s brief period of commission selling did not produce a return after expenses were taken into account is accepted.
Company CC terminated the husband’s employment in January 2000 in relation to which he received $29,750.96 net final payment (exhibit “P”). Three months later he was employed by Company DD at a gross salary of $100,000.00 per annum plus bonus.
The parties’ daughter O was born in February 2001. By agreement, O and her younger brother live with the wife. Essentially they spend each alternate weekend, half school holidays and other special occasions with the husband. From when the children were born the wife was overwhelmingly responsible for their care. To the extent his work commitments permitted, the husband was also involved; primarily at weekends.
In November 2001, the wife and her family co-owners of W Street granted an option to developers for its purchase at $870,500.00. For this the wife received $216,706.34 which she deposited into a St George account in her sole name pending their purchase of Suburb T.
The wife settled her workplace claim in late 2002 for which she received $50,900.00 net and $24,000.00 for legal expenses. The legal expenses had been paid from the husband’s income as they were incurred. The monies were secured in an ANZ Term Deposit in the wife’s name pending the purchase of Suburb T.
In June 2002, the husband was retrenched in relation to which he received a net termination cash payment of $42,000.00. These funds were used for the parties’ day to day expenses.
The husband commenced employment with A Ltd as a professional in August 2002 with whom he has worked ever since. At A Ltd he was promoted from manager to senior manager in 2004, to executive level in 2005 and in 2009 to his current senior executive role. With A Ltd the husband has earned significant income.
In December 2003, the parties purchased Suburb T in their joint names for $750,000.00 plus acquisition expenses of approximately $32,000.00. Essentially, they planned to develop the property so that two new homes were built, one of which would be sold and the other to become their family home. Although a development application was approved and significant preliminary works undertaken, the property has not been developed and remains vacant.
Suburb T was acquired as follows:
·$357,211.14 from the wife’s sale of W Street and Y Street;
·$72,346.67 being the wife’s settlement and accumulated interest;
·$10,000.00 being the October 2003 instalment from the wife’s brother for Y Street;
·$124,000.00 from the parties’ joint savings; and
·the balance on a line of credit jointly borrowed from AMP secured over Suburb T.
It follows, that for a total acquisition of $782,000.00 from assets the wife owned at cohabitation, and her settlement, she contributed approximately $418,000.00 (this excludes reimbursement of the payments made by the husband for legal expenses). In relation to the settlement money, excluding the component which reimbursed payments the husband made for legal expenses, it is conceded by the wife that this reflects, in effect, no more than lost income. This should be contrasted with the second and third of the husband’s retrenchment payments following which he quickly obtained full-time employment.
The parties’ son, P was born in March 2004.
After a convoluted process, in November 2005, the local council approved plans and a development application for Suburb T, a condition of which was that construction commenced within five years or it would lapse.
Without the wife’s consent, in March 2006, the husband loaned his friend, Mr J, $10,000.00. In order to do so he drew down on the AMP line of credit. Later that year, Mr J repaid the amount in full. With $8,000.00 of the repayment the husband purchased his parents a car and used the balance for day to day expenses. In early 2007 the husband loaned Mr J a further $10,000.00 which has not been repaid. In July 2011, the husband sold his run down car to Mr J for $4,000.00. Mr J is to pay the $4,000.00 by instalments but has not yet paid anything. The husband says Mr J owes him $14,000.00; which evidence is confirmed by Mr J and was eventually conceded by the wife.
In June 2007, the husband transferred $41,800.00 (part of his $121,466.94 bonus received on 15 June 2007) from the parties’ joint ANZ savings account to the AMP line of credit. The effect of this was that the AMP line of credit was fully repaid. Thereafter, the account was used for minimal expenditure which was repaid the same month. It is common ground that at separation, but for lump sum withdrawals made by the wife, the line of credit was fully repaid.
For the year ended 30 June 2007, the husband’s pre-tax income was $603,710.00. This is the highest annual income he earned and peaked because bonuses for two years were received in the same year.
The husband transferred the balance of the bonus payment, in the amount of $88,100.00 from the joint account which paid approximately 0.05 per cent interest per annum to his ANZ Esanda V2 cash management account which paid approximately 6 per cent per annum. Although the transfer was made without the wife’s consent, it was not his intention to deny her access to the funds. He unsuccessfully sought her co-operation in establishing a separate joint account. In the event, those funds remained in the husband’s V2 account until July 2008. In three transactions dated 16 July 2007, 15 August 2007 and 17 September 2007 the husband withdrew a further $27,000.00 from their joint account which he deposited into his V2 account. As the V2 statements attached to the husband’s affidavit (DB34) identify, from that account the husband continued to pay the parties’ credit cards, amounts due on the line of credit with an occasional cash ATM withdrawal. It is accepted that those funds utilised prior to separation were used for matrimonial purposes.
When the parties separated in mid September 2007, the V2 account held $89,991.16. In a letter sent by his solicitors to the wife’s solicitors dated 9 November 2012, the husband explained that these funds remained in the V2 account until 15 July 2008 “subject to substantial credit card payments [he] made from the account for [the wife’s] benefit when the monies were transferred to [his] CBA Netsaver account to earn a higher interest rate. … the bulk of expenditure of this amount went to [his] legal costs, child support payments to [the wife], rent and other miscellaneous payments over the next 12 months.” There is an issue about whether these funds (and/or the husband’s paid legal costs) should be notionally included as the husband’s asset.
Following discussion about separation, without consulting the husband, on 31 August 2007, the wife withdrew $100,000.00 from the AMP line of credit with a second $100,000.00 draw down made in similar circumstances on 5 September 2007. She then unilaterally altered instructions to the bank so that thereafter both parties’ signatures were required to make a withdrawal. Other than one recent payment, no payments have been made to AMP since 31 August 2007. The effect of this is that interest has capitalised with the AMP liability now approximately $308,000.00. These funds have been exclusively used by the wife; primarily for legal fees and her and the children’s expenses. There is an issue about whether these funds should be notionally included as the wife’s asset.
In a heated exchange in mid September 2007, the wife made it plain to the husband she had no plans or desire to return to paid employment. O was six and P was three. In this regard, it would seem that the parties had different opinions about the benefit to their children of a parent’s full-time care. Although the husband was extraordinarily critical about the wife’s stance against returning to work, he is supportive of his second wife’s decision to remain at home with their baby son and hopefully a second child.
The parties separated on 19 September 2007. At separation, the husband moved out of Suburb C where the wife and children remained. For the following eight months he did not see the children the reasons for which were not explored in this hearing. So that it is clear, the parties retained funds which each withdrew in the months leading up to separation.
At separation, the parties had the following property and liabilities:
Assets
·Suburb T;
·Suburb C;
·Ford Futura;
·Suzuki motor bike;
·Ford Falcon;
·Type N boat with motor;
·Commsec shares;
·A Ltd shares;
·husband’s savings - $89,991.16;
·wife’s savings - $200,000.00;
·wine;
·contents Suburb C;
·surfing equipment;
·fishing equipment;
·wife’s jewellery;
·husband’s jewellery; and
·Loan to Mr J - $14,000.00.
Liabilities
·AMP line of credit - $200,000.00.
Superannuation
·AMP Signature Super (husband);
·Advance Super (husband);
·ING Super (husband);
·Super Fund AA (husband); and
·Super Fund AA (wife).
Other than where stated, the evidence does not reveal the value of those items of property referred to in the above paragraph.
Following separation the husband moved into rental accommodation. At that time his salary (not including bonuses) was about $10,000.00 per month net which he continued to deposit into a joint account from which the wife was able to make withdrawals. By agreement he paid her credit card expenses; her cards being supplementary cards on the husband’s account.
In late 2007, the husband moved into his now wife’s rented apartment. She is a professional employed in a senior position with A Ltd.
The parties disagree about the magnitude of the wife’s expenditure in the few months following separation, it being the husband’s contention this averaged $7,135.00 (including ANZ joint account withdrawals) per month whereas the wife claims it was considerably less; at least for the first three months. Regrettably, both parties provided calculations of what each says the wife received in the months following separation but neither provided the source documents. It is thus difficult to determine, for example, whether the wife’s October 2007 figure of $3,508.00 or the husband’s figure of $5,809.60 is correct. Similar difficulties arise with expenditure over the following months. The wife concedes that on credit cards alone she spent $6,487.00 in February 2008. Curiously, in presenting his calculations the husband failed to acknowledge that the wife’s withdrawals related to her Centrelink payments and her share of dividend payments; both of which were paid into their joint account. The point being the husband’s calculations include withdrawals which the wife was entitled to make and for which he was not the original source.
There is no doubt that the husband sought to bring order to their post separation financial arrangements, as his email to the wife dated 10 January 2008 attests. In this email the husband comments that the wife had spent $6,500.00 that month on credit cards and from all sources $7,004.00 the month before. This is a contemporary account which is likely to be reliable.
He requested that the wife nominate an account into which he would make reasonable monthly payments and requested she provide a budget so that this could be calculated. This she failed to do. He also asked that she return the $200,000.00 on the basis they would split the approximate $90,000.00 held in his V2 account. The husband repeated his offer in June 2008 and also offered that the wife receives half of his recently received $121,000.00 (approx) bonus. It is common ground the wife refused the husband’s offer or to return the funds withdrawn from the line of credit. Thus interest on the entire amount was payable which accrued rapidly. For example, in the four months to
January 2008 it reached $5,453.70.
In late February 2008, the husband reduced the credit limit on the wife’s Visa card to $3,000.00 per month. The following month she withdrew $1,723.00 from the joint account. In the following months, the wife exceeded the credit card limit in eight out of 10 months which resulted in over limit and other fees. The husband terminated the wife’s access to his MasterCard account in
May 2008.
From March 2008 until February 2009 the husband gave the wife, from all sources, an average of $3,723.78 per month. This included private family health cover from which he also benefited.
In November 2008, the wife applied for an administrative assessment of child support which issued in the amount of $2,167.50 per month. Following this, the husband cancelled her remaining credit card on his account.
The husband paid school fees in relation to the children’s attendance at Q School until early 2008 and from 2009. It is not clear who paid the 2008 fees and in what proportion.
These proceedings were commenced by the husband on 18 June 2008.
For the financial year ended 30 June 2008, the husband’s gross income was $417,385.00. This was made up of $334,329.00 salary plus $78,620.00 bonus.
Interim parenting orders were made on 9 December 2008. Essentially, the effect of these orders was that for one month the children spent time with the husband each Saturday from 2.30 pm to 6.00 pm, then for about six months each Saturday from 9.00 am to 5.00 pm and thereafter each alternate weekend from 9.00 am to 5.00 pm and special days. Although the parties are in furious disagreement about why the husband did not spend time with the children before this, there is no dispute that after separation and until these orders were made, the wife was exclusively responsible for the children’s care. Self evidently, even after these orders she remained overwhelmingly responsible for the children’s care.
It was in early 2009 that the husband stopped directing his salary into the joint ANZ and AMP accounts as a consequence of which the wife was no longer able to access his income. Between February 2009 and when the husband was ordered to pay spousal maintenance, the only payments he made to the wife were child support and health insurance.
In April 2009, the wife consulted Dr PP who prescribed antidepressant medication.
On 1 June 2009, by consent, an interim order was made that the husband pays the wife $40,000.00 to be used towards her legal expenses. Curiously, characterisation of that payment was reserved to the hearing. The husband paid $40,000.00 within seven days.
For the financial year ended 30 June 2009, the husband earned a taxable income of $204,685.00 plus $197,680.00 in bonds.
The first final hearing in the Federal Magistrates Court was listed for three days to commence on 27 July 2009. By then, the proceedings included property settlement. Based on the wife’s allegation of non-disclosure by the husband and her concern he had not filed his 2008 and 2009 taxation returns, the Federal Magistrate split the hearing and adjourned the property proceedings. During this hearing, it became clear that the wife did not explain to her Honour that her primary concern was that she had recently changed lawyers and was not in a position to conduct the property hearing. In short, the rationale for the wife’s adjournment application proffered to her Honour and the evidence which she gave was quite misleading.
Final parenting orders were made by consent on 27 July 2009. In essence, the orders provided that the children would continue to live with the wife and spend each alternate weekend and gradually lengthening periods during school holidays with the husband. The following day her Honour ordered the husband pay $800.00 per week interim spousal maintenance.
Because the husband was now spending time with the children overnight, his child support liability reduced to $1,828.73 per month (from December 2009).
At about the same time, the husband and his now wife ceased to cohabit.
P started school at Q School in January 2010.
The parties divorced in February 2010.
From 13 February 2010, the husband’s child support liability reduced to $1,770.50 per month.
With the husband’s consent, in the lead up to the second final hearing, the wife withdrew $25,000.00 from the AMP line of credit to cover further legal expenses. Directions for the second final hearing required the parties to file their affidavits by 18 February 2010 with which the wife failed to comply.
On 26 March 2010, she consulted a consultant psychiatrist, Dr MM, for a medico legal report. A copy of the report, which issued the same day, was provided to the husband’s solicitors within a few days. The gravamen of this report was that the wife was medically unfit for paid employment. Feeling he had been ambushed and that the nature of the wife’s case had changed the husband applied to adjourn the hearing.
Although it is accepted that the wife had health difficulties in early 2010 which impinged on her capacity to prepare for an April 2010 hearing, no adequate explanation was provided for her failure to do so in the months beforehand. In any event, it would appear the Federal Magistrate was moved by the husband’s denial of procedural fairness argument and his application for an adjournment was granted. Although it is the husband’s contention that on 15 April 2010 the wife included child support as a new cause of action, child support was already an issue and the wife’s Further Amended Response is irrelevant to whether or not the April 2010 hearing could have proceeded.
On 20 April 2010, the husband filed a Further Amended Application in which he sought to vary the 2009 parenting orders so that the children live with him. Essentially the catalyst for this application was the wife’s evidence about her incapacity for paid work, in particular, her mental health as articulated in Dr MM’s report. The husband’s point being, if Dr MM accurately recorded the wife’s history which she gave him, there was reason to be concerned not only about her capacity for paid employment but also her ability to care for the children.
On 21 April 2010, the husband was ordered to pay the wife $40,000.00 by way of an interim property order. The husband complied with this order.
For the financial year ended 30 June 2010, the husband’s taxable income was $403,822.00 which comprised $254,126.00 taxable income and $149,696.00 in bonds.
The wife’s application for summary dismissal of the husband’s parenting application was dismissed on 25 August 2010.
On 23 September 2010, the husband asked the wife to join in the sale of Suburb T. In so doing he mistakenly claimed that the development application would shortly lapse and thus a sale was necessary. The wife wants to retain Suburb T and thus she refused. Between October and December 2010 she borrowed $45,000.00 from her parents and brothers to preserve the development application. Essentially, $25,000.00 was spent obtaining advice from a town planner and the certificate of compliance. The remainder was spent on legal fees. When she applied for the certificate of compliance the wife had written advice from a town planner that the earlier completion of significant stormwater drainage works meant the development had commenced and thus the development application would not lapse. It is common ground that the town planner’s advice was correct.
It is argued by the husband that the $25,000.00 spent for this purpose was wasted and should be notionally added back into the asset pool. It is accepted that the $25,000.00 was spent unnecessarily. However, in light of the husband’s representations to the wife that the development application would shortly lapse and that for this reason the property should be sold, it is not accepted that she acted unreasonably. The wife does not have legal or planning qualifications and a decision about whether to follow her professional husband’s or the town planner’s advice would not have been easy. Although it would have been prudent for her to give the husband a copy of the town planner’s advice and invite him to reconsider his instruction, it was reasonable that she accepted his advice in preference to the town planner’s. Thus, the husband’s add back contention fails. So that it is clear, there is also an issue about whether the wife’s debt to her family for the $45,000.00 should be included as a liability. In short, reliant upon authorities such as Biltoftv Biltoft (1995) FLC 92-614, the husband argues that the debt is unlikely to be repaid.
In January 2011, the wife developed pancreatitis and in the following months had a laparoscopic cholecystectomy. The pancreatitis did not resolve and upon her release from hospital, the wife felt so unwell that she and the children moved in with the wife’s parents. They have lived there ever since with Suburb C standing vacant. If, as the wife alleged, the parties’ occupation of Suburb C rent free caused financial pressure for her family, it would have been expected that after the wife left Suburb C the property would have been tenanted. That it has stood vacant indicates that the wife’s evidence on this point is less reliable than that given by the husband. Of course, with Suburb C vacant the husband had ample opportunity to retrieve his wine and boat. He chose not to.
Shortly before she made another adjournment application, the wife informed the husband it would be made. She was unrepresented and, on 15 March 2011, the wife made an oral application to adjourn the hearing listed to commence on 21 June 2011. The husband opposed the wife’s application and it was refused.
In April 2011, the parties and children saw Dr M again. He confirmed that the wife’s depression had stabilised and said there should be no change to the children’s living arrangements.
On 12 April 2011, the wife filed an application to adjourn the June 2011 hearing. Although it is not entirely clear, it would appear that application was adjourned to 3 June 2011. The wife’s application for an adjournment was granted and on 3 June 2011 the hearing was vacated and the proceedings were transferred to the Family Court.
For the financial year ended 30 June 2011, the husband’s gross income was $575,117.00 which comprised $286,887.00 taxable income and profit share of $288,230.00 taken in bonds. This is consistent with the husband’s application for finance made in May 2011 for the purpose of property acquisition.
The husband purchased in his sole name a new three bedroom apartment at HH Street, Suburb E on 2 July 2011 for $750,000.00 (“Suburb E”). To fund the purchase he borrowed $637,500.00 from ING Bank which advance is secured by mortgage on Suburb E. Because he did not have sufficient funds to pay the $75,000.00 deposit in a lump sum, he came to an arrangement with the vendor to pay by instalments. The first two instalments ($25,000.00) were paid from savings and the balance from his 2011 profit share.
The husband relinquished the apartment he rented after separation and, at settlement, he and his now wife, Ms F, moved into Suburb E.
Shortly after settlement, the husband’s now wife loaned him $44,200.00. The entire amount was deposited into the ING loan.
On 25 July 2011, the husband made another request that the wife join in the sale of Suburb T. Again she refused.
The husband married Ms F in August 2011. The wife appropriately abandoned her submission that the slightly less than $9,000.00 which the husband spent on his wife’s engagement ring should be notionally added back.
The husband’s wife commenced maternity leave on 30 September 2011. Although she plans to return to work, her preference is to return part-time and if, as is planned, she and the husband have a second child in 2013, she would remain on maternity leave until around October 2016. Although the husband’s wife is anxious about whether A Ltd will facilitate her return from maternity leave part-time and, if not, whether a position remains available to her, her status and experience makes her an attractive employee both to A Ltd and in that industry. The point being, that when she decides to return to paid employment, the husband’s wife is highly likely to have well paid employment.
The husband and his wife’s son, S, was born in October 2011.
A new child support assessment issued in relation to the period 1 January 2012 to 31 January 2014. This requires the husband to pay $1,951.50 per month ($448.80 per week) for the children. In addition to this, he continues to pay approximately $460.00 per month school fees and $265.00 per month private health insurance. When spousal maintenance is taken into account, this amounts to approximately $6,000.00 per month.
In May 2012, the husband received an after tax bonus in the amount of $105,474.00. This comprised $91,581.00 from bonds with a separate payment of $13,893.00 paid as a periodic bonus included in his monthly pay. The husband paid the bonds payment into the Suburb E mortgage.
For the financial year ended 30 June 2012, the husband’s total income was $486,334.00 which comprised $326,367.00 taxable income and $159,967.00 bonds.
By October 2012, including the $44,200.00 advanced by the husband’s wife and additional payments which the husband made, the ING loan secured against Suburb E was reduced to $519,167.00.
In October 2012, for the first time the line of credit was overdrawn. AMP required an immediate payment of $4,434.56. After the husband declined to make the payment it was paid by the wife. This is the only payment she made after she withdrew the $200,000.00. Although at paragraph 82 of her affidavit the wife said she would produce email exchanges between her and the husband in relation to her request that he deposit his bonus into the line of credit and his refusal to do so, those emails were not produced. On the other hand, there is no doubt that immediately after the wife withdrew the $200,000.00 the husband requested she return it. He correctly pointed out the risk of significant interest being payable on the entire amount from the outset and that she would be liable for tax on income earned on the $200,000.00. In return for her doing so, the husband offered to share his bonus.
Because the parties spent such a large amount on legal fees it was inevitable that recourse would be had to the line of credit, as indeed it was later on. Although it is accepted that the wife approached this matter without regard to the adverse financial consequences, in this highly conflicted separation it is not accepted that given she had the care of the children and had not had paid work for years, it was unreasonable for her to take control of a portion of their savings.
After more failure to comply with directions, the wife eventually filed her previously mooted application for a litigation costs order. That application was filed on 30 August 2012. Simply put, the wife sought an order that the husband pay her $90,000.00 which she would use for legal fees in the looming hearing.
The wife’s application was opposed by the husband. If it was not dismissed in the alternative, the husband offered $50,000.00 which would be paid by instalments. The rationale for instalment payments was that payments would be made as the wife complied with the steps required for the December 2012 final hearing.
In granting the wife’s application I said:
42.It is not accepted that after the husband has made provision for his further legal expenses his capacity to contribute to the wife’s interim costs is limited to $50,000.00. Although he may need to rearrange aspects of his financial affairs; for example increase his borrowings against the [Suburb E] apartment, ask his wife to return the $44,000.00 she recently withdrew from the mortgage (or lend it to him on commercial terms) or perhaps jointly with the wife seek to extend the mortgage secured against the [Suburb T] property, on balance I am satisfied he has the capacity to advance to the wife the amount sought.
43.The effect of these matters is that the wife has also established that the husband’s superior financial circumstances weigh in favour of her application. Comparatively, the quantum and rate of the wife’s legal expenses are reasonable and, as the husband will be represented, it is in the interests of justice that she too is also represented.
The orders made on 30 October 2012 are set out below:
(1) That the husband pay to the wife interim costs as follows:
(a)Ninety thousand dollars ($90,000.00), in the event that the wife provides proof that subsequent to 30 August 2012 she has paid $11,500.00 towards outstanding legal expenses referred to at paragraph 53 of her Financial Statement filed 30 August 2012, payable as follows:
(i)five thousand dollars ($5,000.00) within seven (7) days of the date of these orders;
(ii)five thousand dollars ($5,000.00) following the wife’s attendance upon [Dr M] (on 17 October 2012);
(iii)twenty five thousand dollars ($25,000.00) by 14 November 2012;
(iv)the balance on 30 November 2012, upon written confirmation that the wife has filed all evidence upon which she relies and is ready to proceed with the final hearing..
(2)In the event that the wife does not comply with Order 1(a) the amount payable by the husband is reduced to $80,000.00.
(3)To facilitate the payments in Order 1 above, the husband will deposit the amounts due in the trust account of Barkus Doolan Kelly and it is directed that the husband’s solicitors certify to the wife’s solicitors seven (7) days prior to payment, that such funds are held.
(4)Excluding any other application for costs, the wife’s Application in a Case filed 30 August 2012 and the husband’s Response to an Application in a Case filed 21 September 2012 are dismissed.
Neither party applied for their costs of the wife’s application.
In order to comply with the October 2012 orders, the husband sold 1,083 A Ltd shares which yielded somewhere just over $30,000.00. Submissions were made by counsel for the husband to the effect that the husband borrowed $70,000.00 from his father in order to comply with the litigation costs order. However, attached to the husband’s affidavit is the loan agreement which he entered into with his father (DB 43). At Clause 2, the purpose of the loan is set out. It is as follows:
[The husband] shall use the net proceeds of each Advance:
(a)for application towards the costs of [the husband] in connection with family law proceedings between [the husband] and [the wife], including legal costs, expert witness costs, court and trial costs and such costs, expenses and charges (but excluding the costs of [the wife]) for which [the husband] may be liable in connection with those family law proceedings; and
(b)such other purposes as the parties may agree in writing.
(my emphasis)
This is consistent with the husband’s father’s evidence. His unchallenged evidence is that the husband asked for a loan “to pay for my legal costs as the Court made an Order for me to pay [the wife’s] costs and I can’t afford to pay my own”. The husband’s father advanced $50,000.00 on 13 November 2012 together with a further $20,000.00. As will be discussed later, the husband will successfully resist the wife’s application to notionally add back his paid legal expenses, albeit the amount expended will be taken into account pursuant to s 75(2)(o) of the Act. The treatment of the husband’s liability to his father will be discussed later.
So that the husband was able to comply with the October 2012 legal expenses order, his wife permitted the use of the $44,200.00 she previously paid into the ING loan. The wife argues that the $44,200.00 advance from the husband’s wife is a gift. It is her submission that the husband’s claim that the amount should be included as a liability ought to be rejected. The husband and his wife have a written loan agreement. The husband’s wife gave affidavit evidence in which she said the advance is a loan. Her evidence was not challenged and is accepted. For these reasons and because it is accepted that but for that advance the husband would not have been able to comply with the order, that liability is included in the asset pool. So that the point is not lost, the parties agree that Capital Gains Tax in the amount of $6,600.00 which is payable on the sale of the A Ltd shares so as to comply with the order, should be included in the list of the parties’ property and liabilities.
The husband calculates that post separation he has paid the following spousal maintenance and child support:
· credit card and cash payments totalling $80,637.00;
· child support of approximately $91,751.00;
· spousal maintenance of approximately $138,944.00;
· health insurance premiums of approximately $8,284.00, excluding payments after May 2011; and
· school fees of approximately $24,017.00.
In addition, he paid approximately $25,000.00 in land tax and other expenses in relation to Suburb T.
As was mentioned earlier, there is an unresolved issue in relation to the magnitude of the cash payments which the wife withdrew post separation. The issue is that the husband’s calculation does not take into account that a portion of the cash withdrawals were monies deposited by Centrelink for the wife and her share of dividends. This is accepted and thus the husband’s calculation is greater than the amount he paid. However, if the wife’s current entitlement to Centrelink payments is a reasonable guide, which it is, the husband’s overstatement is not significant.
The ING loan secured against Suburb E is fully redrawn with the funds used to comply with an order for litigation costs made in the wife’s favour and to meet the husband’s costs.
General principles for the adjustment of matrimonial property
The approach to the determination of an application under s 79 of the Act is set out in Stanford v Stanford [2012] HCA 52. The question which ultimately must be answered is whether it is just and equitable to alter the parties’ rights and interests in their property. In this case, the parties agree that it is just and equitable that their interests and rights in property are altered. Where they disagree is in relation to what that adjustment should comprise.
After so many years of cohabitation during which the parties proceeded upon the basis they would work to their and their children’s mutual benefit and intermingled their interests accordingly, now that their relationship has broken down it is accepted that it is just and equitable that their interests in property are altered.
Thus, it is necessary to first, identify the nature of the parties’ interests in their property, liabilities and financial resources at the time of the hearing. Then, to evaluate the contributions made by the parties as defined in s 79(4)(a), (b) and (c) and the effect of any proposed order upon the earning capacity of either party. This involves consideration of any other order made under the Act affecting a party or child and any child support under the
Child Support (Assessment) Act 1989(Cth) (“CSAA”) that a party to the marriage is to provide, or might be liable to provide in the future, for a child of the marriage. Orders that affect a party will include, for example, those made in relation to legal expenses and partial property settlement. The matters contained in s 75(2) must then be evaluated insofar as they are relevant. As has been mentioned, consideration is required of whether it is just and equitable that there is an alteration of the parties’ interests so as to effect a property settlement order and, if it is, to what extent. So that it is clear, the first issue must not be conflated with the outcome of the s 79(4) and s 75(2) deliberations, albeit these may inform the justice and equity determination.
Property, liabilities and financial resources at the date of hearing
The parties reached agreement as to the value of most property and liabilities.
The value and identity of the parties’ property, liabilities and financial resources at the date of hearing is set out in the table below.
Ownership Description Agreed Value Property Joint B Street, Suburb T Agreed $900,000.00 Wife Wife's 16.7% interest in R Street, Suburb C Agreed $106,000.00 Husband HH Street, Suburb E Agreed $750,000.00 Wife Honda CRV motor vehicle Agreed $19,500.00 Husband Honda CBR motorbike Agreed $12,000.00 Husband Nissan Murano motor vehicle Agreed $17,250.00 Joint Type N boat and motor Not agreed To be sold Joint Commsec Shares Agreed $14,500.00 Husband Cash at bank (4 accounts) Agreed $2,417.00 Wife Cash at bank (4 accounts) Agreed $16,427.28 Joint ANZ Access Advantage #...91 Agreed $2,586.38 Husband Contents Suburb E Agreed $13,840.00 Joint Household contents at Suburb C (located in garage and in room adjoining garage) Agreed $13,220.00 Husband Husband’s gym and other items Agreed $4,000.00 Wife Jewellery Agreed $1,790.00 Husband Loan to Mr J Agreed $14,000.00 TOTAL $1,887,530.66 Superannuation Husband AMP Signature Super Agreed $131,966.00 Husband Advance Super Agreed $14,793.00 Husband ING Super Agreed $13,707.00 Husband Super Fund AA Agreed $8,467.99 Wife Super Fund AA Agreed $30,058.71 TOTAL $198,992.70 TOTAL GROSS ASSETS $2,086,523.36 Liabilities Ownership Description Agreed Value Husband Mortgage to ING (on Suburb E) Agreed $621,000.00 Joint AMP Line of Credit Agreed $308,000.00 Wife Loan from wife’s family Not agreed $45,000.00 Husband Loan from husband’s wife Not agreed $44,200.00 Husband Capital gains tax on sale of shares Agreed $6,600.00 TOTAL LIABILITIES $1,024,800.00 NET ASSETS $1,061,723.36
A number of matters require explanation.
The parties jointly own a Type N boat which since separation has languished unused at the Suburb C property. There is a minor dispute about its value, which the single expert said is $6,000.00. The husband says the boat is worth $5,000.00. In circumstances where neither party seeks to retain the boat, it is agreed it will be sold and the net sale proceeds divided in whatever proportion the Court determines for the overall adjustment of property. The amount each party will receive will be small.
There is an issue about whether the husband’s unvested A Ltd Employee Share Fund unvested share units are an asset or financial resource. They were valued by an accountant, Mr L, on 6 December 2012 at $47,599.00 and however they are characterised their value at this amount is agreed. In essence, the valuation does no more than ascribe to the 4,249 unvested A Ltd shares the share sale price at that date.
As a senior executive, if the husband receives a bonus exceeding $50,000.00, he is required to invest a portion in these unvested share units. This is designed to achieve staff loyalty and align staff to the A Ltd share price performance. The scheme operates so that where a bonus exceeds $50,000.00, one quarter of the amount which exceeds that amount is retained and invested in unvested share units. Thus, in 2012, out of the husband’s bonus, $37,500.00 was retained. The retained amount is released to the employee provided the employee continues to be employed by A Ltd. When the share units vest they do so as A Ltd ordinary shares. Release or vesting of the share units occurs two, three and four years after the date of retention. Each release is for one-third of the amount retained.
It follows that from the amount retained from his 2012 profit share, the husband will receive $12,500.00 (before tax) in 2014, 2015 and 2016. Until the share units vest, he is entitled to receive dividends on the underlying shares but cannot sell, deal or raise money until the units vest as ordinary shares.
Annexure “DB8” to the husband’s affidavit sheds further light on the nature of these share units. The statement explains “… past share prices and exchange rates are not an indication of future performance or value. The value of your Awards at the time they vest or at the time you receive or sell shares through the [A Ltd Employee Share Fund] may be higher or lower than this value”. In other words, because the retained amount is invested in shares, in the event there is an improvement in the share price, the value of the husband’s share units when they vest will be greater than they are at present. If they fall they will be worth less. In the event his employment is terminated his entitlement to any unvested share unit is forfeited.
The non-exhaustive definition of property is found in s 4 of the Act. Reference is there made to “property” as “… to which … that party is … entitled”. In Kennon v Spry (2008) 238 CLR 366 the High Court referred with approval to the wide meaning given to the word “property” in the context of the Act. Reference was made to In the Marriage of Duff (1977) 15 ALR 476 at 484, where, in turn, the Full Court of this Court adopted remarks by Langdale MR in Jones v Skinner (1835) 5 LJ Ch 87 at 90 who said “property is the most comprehensive of all terms which can be used inasmuch as it is indicative and descriptive of every possible interest which the party can have.” The words “financial resource” are not defined in the Act but, as is explained in Kelly and Kelly (No.2) (1981) FLC 91-108 at 76,802, must mean something “not covered by the terms ‘income and property’, for example, contingent interests or benefits which a party actually received or was likely to receive, whether legally entitled thereto or not.”
Two factors are particularly persuasive of the share units being categorised as the husband’s financial resource rather than property. First, he cannot sell, assign or deal with them until they vest. Second, until the shares vest he is entitled to receive dividends on the underlying shares and nothing more. Notwithstanding the husband’s evidence that his position with his employer is insecure, he did not establish his job is in jeopardy or that he is unlikely to be employed by A Ltd when the share units vest. Thus, although one cannot be certain that the husband will definitely be employed when each of the three tranches of shares are due to vest, the probability is that he will and accordingly this factor is a less significant factor than the two already mentioned. However, it too points to the share units being a financial resource rather than property.
The husband seeks to include as a loan payable to him by the wife, $10,040.00 being pre-payment of Dr M’s fees and half of the costs for the other joint experts. It will be recalled the husband applied for orders that the children live with him in 2010 which application was compromised by consent orders made at the start of this hearing. The effect of these consent orders was that little change was made to the consent orders made in 2009. Contrary to submissions made on the wife’s behalf, on 31 May 2012, and in accordance with the husband’s application, I ordered that Dr M’s prior reports (there were three) be updated. The cost of the updated report was to be shared equally, albeit in the first instance, the total cost was to be met by the husband. The issue here is whether the order that the parties equally share Dr M’s costs should be altered so that they are met solely by the husband.
The order that the parties would be equally liable to pay Dr M’s reasonable fees and expenses is an order pursuant to r 15.47(1) of the
Family Law Rules 2004 (“the rules”). There is no doubt that pursuant to r 1.11 and r 1.12 there is power to set aside or vary that order, as well as to dispense with the rules.
The wife relies on the husband’s lack of success achieved from his parenting application and its proximity to recently made parenting orders. It is accepted that both matters weigh in favour of an order that the husband alone pays for the report.
On the other hand, as was submitted by counsel for the husband, the catalyst for the husband’s 2010 parenting application was a report the wife obtained from Dr MM in March 2010 (exhibit “V”). Dr MM was retained by the wife to express an opinion in relation to her state of health and her capacity for paid employment. In answer to a question about the impact of any treatment and her condition on her capacity to function and commit to paid employment, Dr MM said:
… [the wife] is substantially disabled by her chronic medical and psychiatric problems. In her current state she is not fit to work at all, not even on a part time basis. She is struggling to manage day-to-day and look after herself and the children with the support of her mother. I think it is very unlikely that she will reach a point where she will be fit for part time work in the future. (par 7.4, exhibit “V”)
The wife relied on Dr MM’s report when the proceedings were before the Federal Magistrate. She did not rely on his report in this hearing and does not agree with his prognosis concerning her inability to work. However, it is easy to understand why, after he read this report, the husband was concerned about the wife’s ability to care for the children and regarded it as appropriate to reconsider his earlier agreement that they live with her.
Before the proceedings were transferred, the Federal Magistrate dismissed the wife’s application that the husband’s parenting application be dismissed. Essentially, it was the wife’s contention that consistent with
Rice & Asplund(1999) FLC 90-725 the husband failed to demonstrate sufficient change in circumstances to warrant further consideration of the children’s living arrangements. The Federal Magistrate, in whose docket these proceedings were litigated for years and who made the 2009 parenting orders, obviously agreed with the husband’s contention that there was a proper basis to allow his application to proceed.
In recommending against any change with whom the children should live, Dr M commented upon the wife’s improved mental health which he said had stabilised. Neither child wanted to live with the husband and, according to Dr M, they thrived in the wife’s care. He also commented on the significant improvement in the children’s relationships with their father and his wife, as well as the joy their baby brother S had brought to their lives. It is noteworthy that almost as soon as Dr M’s report was released the parenting proceedings were compromised in accordance with his recommendations.
In relation to this issue, real weight is placed upon the Federal Magistrate’s decision to dismiss the wife’s Rice & Asplund application and greater weight is placed upon the wife’s prior reliance upon Dr MM’s report. These factors are more compelling than those factors which I have already indicated weigh in the wife’s favour. Notwithstanding the husband’s greater income, the wife’s argument against the cost of Dr M (and other experts) being shared equally are unpersuasive. Thus the wife will pay the husband her half share as part of the overall settlement of property. That said, the husband’s argument that 50 per cent of the amounts he paid should be notionally added back is fallacious.
Although the wife argued for the inclusion of a Suzuki motorbike as the husband’s property worth $8,000.00, during closing addresses it was appropriately conceded that she could not make a case for its inclusion. If I am mistaken about the concession, the husband’s evidence that he sold the motorbike for $8,000.00 is accepted and it is thus not included in the property pool.
According to the husband, at separation, he left 10 cases of wine under the house worth an agreed $10,200.00. The wife said she understood her brother found two cases which she said he could take and assumes they have been consumed. The wife’s brother did not give evidence. It is accepted that the wife unilaterally disposed of the husband’s property for no payment. However, the husband left the wine behind and made no attempt to retrieve it. There is no principled basis for its inclusion in the property pool.
As has already been mentioned, there was considerable argument addressed to the inclusion of various assets disposed of after separation and the treatment of paid legal expenses. Before the facts in issue are discussed, it is useful to set out the guiding principles which, to a degree, overlap.
In Kowaliw & Kowaliw (1981) FLC 91-092, Baker J determined that financial loss incurred by the parties in the course of a marriage, whether or not a joint liability, should be shared between them except in the following circumstances:
(a)where one of the parties embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
If the losses occurred in the course of the pursuit of the objectives of the marriage, for example, gaining income and/or assets, then such losses should be shared by the parties, although not necessarily equally. Kowaliw has received widespread appellate support.
In Browne v Green (1999) FLC 92-873, the trial judge determined that the husband should bear full responsibility for losses incurred by a failed business because he alone initiated the venture and had control over it. There was no suggestion of recklessness on his part, nor a course of conduct designed to reduce the asset pool. Essentially this case involved a promising business venture that went sour. In placing the full burden of the loss on the husband, the Full Court determined that the trial judge erred.
The issue of whether the loss should be notionally added back into the asset pool, whether it constitutes a s 75(2) factor or whether it should be dealt with another way is complex and discretionary. In Townsend & Townsend (1995) FLC 92-569, the Full Court determined that wasted property should be notionally added back. Simply put, after separation the husband in
Townsendsold the parties’ most valuable asset. He had the benefit of the money and none of the sale proceeds remained. The Court found that this was a premature distribution of marital property and that it would be unjust to merely consider such conduct pursuant to s 75(2).
In B and B [2000] FamCA 1301, the Full Court made it clear that notional adjustments are not limited to wasted assets but may also include identified items of property that have been bona fide disposed of. Also, at [75] it was said that “[i]t may also be appropriate, depending on the circumstances, to notionally include in the pool of assets items of property in respect of which no or no reasonable explanation has been given for the assertion that they no longer exist or never existed”. As a general approach, the Court has been reluctant to notionally add back assets where monies that existed at separation have been spent on reasonably incurred living expenses; the point being that parties are entitled to continue to provide for their own support: M and M [1998] FamCA 42.
In M and M, Baker, Kay and Chisholm JJ said at [2.10]:
It is well settled that save in exceptional circumstances a trial Judge should deal with the property as at the date of the hearing and make adjustments taking into account the various matters set out under s.79. (Wells v Wells (1977) FLC 90-285; Wardman v Hudson (1978) FLC 90-466; In the Marriage of Geyl 7 Fam LR 219). However, the particular justice of the case may make it appropriate to notionally add back assets which have been demonstrated to have been dissipated either during the marriage or post-separation. Normally it is necessary to demonstrate an appropriate basis for doing so, for example by wastage such as gambling or extravagant living. (Kowaliw v Kowaliw (1981) FLC 91-092; Fane-Thompson v Fane-Thompson (1981) FLC 91-053; Winnel v Winnel (1984) FLC 91-580; Townsend v Townsend (1995) FLC 92-569; Doherty v Doherty (1996) FLC 92-652.
In C and C [1998] FamCA 143, the Full Court said that where the monies have been shown to have been reasonably disposed of, the notional add back approach should be the exception and not the rule.
Before consideration is given to the submissions in relation to paid legal fees, it is appropriate to deal with the husband’s argument that $78,000.00 should be notionally included as the wife’s asset. According to him these funds were deliberately or recklessly dissipated.
It will be recalled that in the weeks prior to separation the wife secretly withdrew $200,000.00 from the AMP line of credit. From the draw down $121,714.58 was used for legal expenses in these proceedings. At issue is the remaining $78,000.00. At paragraph 109 of her affidavit filed
19 November 2012 the wife explained her application of the remaining amount as follows:
·Honda motor vehicle - $43,528.00;
·children’s school fees and extra curricular activities - $17,304.12; and
·replacement appliances and household goods - $23,030.00.
The wife clearly accounts for expenditure greater than the $78,000.00 under consideration. At the same time, as she incurred these expenses, the wife had the full-time care for two children who at separation were six and three. She did not have paid employment and notwithstanding the husband’s evidence which he says would result in the Court finding this expenditure was extravagant, even in the context of the total sum he provided after separation, it was nothing like that. The amount will not be notionally added back.
In relation to the treatment of paid legal fees, the most current and complete expose of principle is found in Chorn & Hopkins (2004) FLC 93-204. Writing ex judicially, Boland J correctly summarised the principles that emerge from that case as follows:
·The treatment of funds used to pay legal costs remains ultimately a matter for the discretion of the trial judge.
·In determining how to exercise that discretion, regard should be had to the source of funds.
·If the funds used existed at separation and are such that both parties can be seen as having an interest in them (on account, of contributions) then such funds should be added back as a notional asset of the party, who has had the benefit of them.
·If the funds used to pay legal fees have been generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance), they would generally not be notionally added back as a notional asset; nor would any borrowing undertaken by a party post-separation for payment of fees be taken into account as a liability in the calculation of the net property of the parties.
·Funds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement may need to be looked at differently from other post-separation income or acquisitions.
·Outstanding legal fees themselves are generally not taken into account as a liability.
·If in the exercise of discretion it is determined that legal fees already paid should be taken into account as notional assets, then normally any liability associated with the acquisition of the monies used to pay the legal fees should also be taken into account. (Trends in the Full Court: Recent cases” 9th Australian Family Lawyers’ Conference, Sabah 11-13 June 2005)
The key factors that appear to have general application are the emphasis on the source of the funds and an approach which delivers a just outcome. In particular, whether the funds received were through one party’s efforts alone or in his or her own right came from assets in which both parties had an interest, and whether the funds were acquired pre or post separation.
To Boland J’s summary, reference should be made to their Honour’s remarks, at [45], in relation to DJM v JLM (1998) FLC 92-816. DJM v JLM relevantly concerned whether or not to add back legal fees which the husband had been ordered to release to the wife to enable her to prosecute the proceedings. Their Honours in Chorn and Hopkins said “[i]n those circumstances it could be expected that the fees would be added back”.
Nine months after Chorn and Hopkins in AJO & GRO (2005) FLC 93-218 a differently constituted Full Court discussed notional add backs and paid legal fees. Their Honours in AJO & GRO referred to two of the numerous authorities discussed in Chorn and Hopkins but did not address Chorn and Hopkins. Thus, although one sees in AJO & GRO support for the proposition, at [30], that the “normal approach ought to be to add costs already paid into the pool”, as the review of authorities in Chorn and Hopkins makes clear, to elevate prior decisions made in one context to a “normal approach” in all contexts, ignores the variety of scenarios that result in the payment of legal expenses. Thus, to the extent counsel for the wife suggested that I would prefer the approach in AJO & GRO to Chorn and Hopkins, the argument fails.
Counsel for the wife argued that unless the Court adopted an “add back” approach to both parties’ paid legal expenses, injustice would be visited on the wife. The point being, that if her paid legal expenses were added back (they being paid from the line of credit, funds provided by the husband and borrowed from her family) but the husband’s were not (they being paid from post separation income), he would have the benefit of significant post separation income and take his property settlement in kind, whereas a significant component of her property settlement would be legal fees. In response to my suggestion that par 58 of Chorn and Hopkins suggested the husband’s paid legal expenses should not be added back and that the potential for injustice could, if necessary, be avoided by the application of s 75(2)(o), counsel for the wife said such an approach tended to be amorphous and lacked the transparency achieved if the amount was simply added back and redistributed.
It is unnecessary to recite the plethora of cases where pursuant to s 75(2)(o) an adjustment in relation to a particular transaction has been made. The transparent and concrete example sought by counsel for the wife was achieved, for example, in De Angelis v De Angelis (2003) FLC 93-133. In that case the trial judge found that the wife had gambled away $90,000.00 of the parties’ joint funds and rather than adopt the Townsend approach, dealt with the loss under s 75(2). In re-exercising the Court’s discretion the Full Court reaffirmed the use of s 75(2)(o) and ordered the wife to pay the husband an amount equivalent to half of the joint money she lost gambling.
Counsel for the wife relied on the recent Full Court decision
Kasiopoulos & Garapiperis[2012] FamCAFC 85. In this case, the trial judge added back the husband’s paid legal costs notwithstanding they were paid from income and bonuses earned after separation. Here, the trial judge mistakenly recorded that the husband agreed to have his paid legal fees added back. In seeking to resist the husband’s appeal on this point, the wife was unsuccessful in her attempt to show that the source of funds used to pay the husband’s legal fees was contentious. In short, the Full Court accepted that the evidence demonstrated that the husband’s legal fees were paid from post separation bonuses and income. In the course of doing so, at [91], their Honours said:
...Although the trial Judge could have added back the husband’s paid legal fees, notwithstanding that they were paid out of income, having not done so on that basis, we feel obliged to uphold this complaint.
It is upon these remarks that counsel for the wife relies to support the contention that the husband’s legal fees in this case should be included in the list of the parties’ property. However, there is no discussion in
Kasiopoulos & Garapiperisof the authorities in relation to the treatment of legal expenses. If the remarks are intended to convey that there is no explicit statutory prohibition against the course adopted by the trial judge, one could not disagree. However, if those remarks are intended to convey well settled principle or indicate how this type of payment could be categorised as property, I am unable to agree. In my view, the weight of authority is against the approach referred to in Kasiopoulos & Garapiperis.
I will now turn to the facts of this case.
The picture that emerges from the husband’s evidence, his bank statements (DB34) and exhibit “S” is that he paid his legal fees from post separation income and bonuses. He was able to do this because until June 2008 he was able to live on his income and preserve the funds he withdrew at separation. It is in June 2008 that he started to pay legal expenses. At the end of May 2008 he had $78,402.47 in his V2 account, which is the balance that remained from the funds he retained at separation. On 30 May 2008 he received a bonus of $120,781.00 which he deposited into his V2 account.
It follows that the husband had a choice of funds he would use to pay legal fees; either the funds retained at separation or his bonus and later income. As has been discussed, he chose the latter and then started to use the funds he retained at separation for his day to day expenses. Although the husband’s expenses were not unreasonable, he had sufficient income (salary and bonuses) to meet them. In other words, but for his decision to pay his legal fees from income and salary, the funds he retained at separation would have been available for distribution. In these circumstances, the retained funds which he still had when he embarked on this course, is a premature distribution of matrimonial property. So that it is clear, I am persuaded that the manner in which he arranged his financial affairs qua legal fees at this point was unreasonable and almost certainly designed to maximise his chances of persuading the Court that the wife should not share in the savings he retained at separation. However, because the wife also received the benefit of a portion of the funds he retained at separation, the full amount of the sum he had at that time is not taken into account as a premature distribution; the appropriate amount being the balance that remained at the end of May 2008.
There is no principled basis for inclusion of funds that the husband paid for legal fees from post separation income as notional property. That being so and consistent with authority, the husband’s liability to his father is excluded from calculation of the parties’ net property.
In relation to the wife’s paid legal fees it can be seen that they were paid by her use of property which existed at separation or acquired thereafter; relevantly from the husband and her family. In short, they are entirely sourced from funds either advanced by the husband on the basis the advance would be used for her legal expenses, the AMP line of credit withdrawal and $20,000.00 borrowed from her family. She presses for inclusion of the entire loan made by her family as a liability. Although it is not entirely clear how the wife will repay the advance, it is accepted she will. In the event her paid legal expenses are taken into account so to should that portion of the advance. The balance relates to the certificate of compliance, which as mentioned earlier, although misguided was a reasonably incurred expense.
There is a great variety of private fee paying schools. The differences include a substantial dichotomy in fees, as well as the form of education that a child will receive. A party will be able to establish the ground if he or she can demonstrate agreement that the child receives an education of a particular type which includes agreement as to the costs that will be incurred. Agreement would usually need to be much more specific than discussions during the child’s infancy that the child attends a private fee paying school. Relevant factors would include whether the parties completed enrolment forms, together placed the child on a school’s waiting list and maintained an agreement to proceed with enrolment are relevant. Whether the child started at a school with both parties’ consent is relevant. This list is not exhaustive and, of course, each case will raise its own particular issues.
It appears to be common ground that the parties agreed that the children attend Q School which is a private, fee paying Catholic school. This is where O attended school prior to separation and where P has always attended. The husband has paid their school fees and it is accepted that P’s attendance at that school had the husband’s support in the same way he supported O’s attendance there. It follows that P is being educated in a manner expected by his parents.
In relation to the children’s secondary education, the wife relies on the fact that in 2007 the parties attended open days at JJ School and LL School. According to her, the husband was agreeable that O attend one of these schools, however, because the wife understood that she need not take any steps to enrol O until she reached Grade 4, nothing was done. By the time O was in Grade 4, even on the wife’s case, the husband was not agreeable to this course and it is accepted that even before separation, he tried to encourage O to prepare for selective public school exams. The point being, at least by that stage, he was firm in his resolve that the children would not attend private fee paying schools for secondary school. With the husband having maintained that stance thereafter, on 31 May 2012, the wife obtained an interim order that she has sole parental responsibility in relation to O’s enrolment at JJ School. The point being, that even though she knew the husband did not agree that O attend JJ School, the wife could complete enrolment procedures. For O, JJ School’s fees for her first year would be $16,930.00 per annum.
The wife wants P to attend KK School which is a Catholic boy’s school. Its school fees for a boy commencing secondary school are $13,576.00 per annum. No steps have been taken to enrol P at KK School.
It is not accepted that at the point of enrolment the wife had the husband’s agreement that O attend JJ School or that she would be educated in a school of that ilk. The conversations upon which the wife relied indicated no more than years earlier the husband was open to the possibility that the children might attend secondary private fee paying schools. The discussions that occurred were insufficient to establish that years later the children’s attendance at a secondary private fee paying school would see them educated in the manner that was expected by both parents or that this was a step to which he consented.
Although it is accepted that O would like to attend JJ School, this does not mean that her welfare dictates attendance at that school. In short and notwithstanding that the children attended Catholic schools in their primary years, the evidence does not establish that their welfare requires attendance at schools of the ilk nominated by the wife.
In relation to O, the wife has not established this ground for departure. The wife has established this ground of departure in relation to P’s attendance at Q School until he finishes primary school.
Is it Just and Equitable to make a Departure Order?
The next question then, having established special circumstances, is whether it is just and equitable to make a particular departure order?
As mentioned earlier, regard must be had to the matters identified in s 117(4). In this regard, the Court must consider the nature of these parents’ duty to maintain the children, which duty is described as being “the primary duty”. That duty is not of lower priority than the husband’s duty to maintain his wife and S and has priority over all commitments other than those necessary to enable the husband and wife to support themself and, in relation to the husband, his wife and S.
The wife’s evidence is that her average weekly expenses (which exclude school fees) incurred for the children amount to $1,066.00. She does not distinguish between the costs for each child which, taking a broad brush approach, means that she says their proper needs for these expenses are $533.00 per week. This does not include provision for the items included at Part G of her Financial Statement and assumes that the rate payments and her car insurance relate to the wife’s necessary commitments. It will be recalled that because the wife and children live with her parents, this does not include accommodation costs.
Although the husband challenged whether these amounts could be described as reflecting the children’s proper needs, if that figure is contrasted with his average weekly expenditure in relation to S, it is apparent that he is content to spend much more on S’s “proper needs” than $533.00 per week. When regard is had to a reasonable standard of living for these children in this family’s circumstances, the wife’s evidence that provision should be made for holidays, extra curricular activities, reasonable expenditure on clothing and the like is accepted. Thus, it is accepted that until the wife and children move into their own accommodation, the children’s proper needs (excluding school fees) are approximately $533.00 per week. So that it is clear, the $533.00 includes the children’s school uniforms, excursions and the like.
Neither of the children has any income, property or financial resources.
Findings have already been made in relation to the parties’ income, property and financial resources. There is a paucity of evidence about the wife’s earning capacity once she has retrained. However, it is inferred that at that point the wife will be able to adequately support herself and possibly contribute in a modest fashion towards the children’s proper needs.
Further consideration is required of the husband’s commitments.
Returning then to the husband’s Financial Statement, it shows his total average weekly income is $8,919.00 and erroneously asserts personal expenditure in the amount of $9,419.00 per week. When the $505.00 attributed to AMP is deducted, this leaves him with total personal expenditure in the amount of $8,414.00. This figure includes child support at $450.00 and school fees for the children of $137.00. Although it is accepted that minus the AMP payment this reflects his actual expenditure, the CSAA is concerned with necessary commitments. The word “necessary” is a relative concept and requires consideration of patterns of expenditure and a family’s overall standard of living. What might be necessary for one family can be quite different to another’s. For example, the wife’s evidence that the children’s proper needs includes provision for gifts, extra curricular activities, holidays and the like might in another case be considered beyond the ambit of what is proper or necessary.
When considering the husband’s necessary commitments, a similar approach to that adopted for the wife and children is appropriate. It is also appropriate that he supports his wife and S and that for the time being, assumes greater responsibility for S’s financial expenses than his wife. Excluding accommodation costs, the husband pays $943.00 per week for his wife’s expenses. As was mentioned earlier, her credit card expenses appear high and, absent evidence about what these comprise, it is not accepted that the full amount is necessary. In relation to necessary commitments, the applicant wife’s evidence is that hers considerably exceed Ms F’s. However, she has been able to secure $800.00 a week spousal support which, considered in the context of the husband’s actual expenditure for Ms F, indicates that it is appropriate to set his necessary commitments for her at $800.00 per week.
In relation to children (which includes the costs he incurs for the children when they are with him), but excluding school fees, the husband says his necessary commitments are $867.00 per week. As was mentioned earlier, this includes some $346.00 for toys, nappies and accessories for S and $270.00 child minding for S (which is not incurred). The latter relates to the possibility that S will attend day care. It is understood that this was for his development, which is accepted as reasonable. However, if this would mean that the children’s proper needs are not met, the full amount is not accepted as necessary. Given the amount of time the children spend with the husband, and taking a broad brush approach, his necessary expenses for them and S are allowed at $600.00 per week. With the prospects of a new baby it may be that the husband’s necessary commitments will very slightly increase from about the end of 2014. If there is a new baby it is not accepted this will materially affect the husband’s commitments for some time after that.
The husband claims $820.00 per week for his personal expenses which, although more modest than the wife’s and Ms F’s, are brought to account at $800.00 per week. He has an obvious capacity to make minor adjustments to his expenses to bring the amount to that comparable figure. As to his Part G personal expenditure, housing, tax, car registration, insurances and the like, these amount to $5,043.00 per week, all of which are necessary.
In total, therefore, the husband’s necessary commitments are $7,243.00 per week. To this, spousal maintenance must be added and provision made for the additional borrowings he will need to make in order to pay the wife about $41,000.00 and provision for the additional liabilities he will carry. When this is taken into account, his reasonable expenses are assessed at $8,200.00 per week. This leaves the husband with the capacity to pay $718.00 per week. However, he carries heavy liabilities and a small margin for unanticipated allied expenses is appropriate.
Excluding provision for P’s school fees, this means that the husband has the capacity to pay child support for the remainder of 2013 in the amount of $300.00 per week per child.
Once he stops paying spousal maintenance his capacity will increase. At that point, notwithstanding the husband’s capacity to pay the periodic sum sought, it would not be just and equitable that he meets virtually all of the children’s costs. The amount which would be just and equitable is then $400.00 per week per child.
Both parties submit that they would suffer hardship if an order were made (the husband) or refused (the wife). In relation to the wife, she would have to use capital in order to provide for the children. In relation to the husband the payment of child support in the amount discussed above does not create hardship. In short it is not accepted that orders along these lines would create hardship for either party or the children.
It is not possible to make the required finding in relation to the parties’ income and necessary expenses, or achieve a safe approach to those issues for the period until P finishes secondary school. The risk of hardship to the husband if an order is made beyond 2016 is considerable and would make it neither just nor equitable for a departure order of any type beyond the end of 2016.
Is it otherwise proper to make a Departure Order?
In determining whether it would be otherwise proper to make a particular departure order, the matters referred to in s 117(5) CSAA must be considered. Whatever order is made, the children will be maintained by their parents. The evidence does not address how the making of an order (or refusal to make an order) might affect the wife’s Newstart and Family Tax Benefit. There is no evidence that either child has an entitlement to an income tested pension, allowance or benefit and it is inferred they do not.
In relation to the wife’s application that the husband pays the children’s school fees, she has only established a ground for departure in relation to the payment of P’s school fees until he finishes primary school. This requires consideration of the additional objects of Division 5 and relevantly, s 124. The s 124 factors largely require consideration of the same factors considered in relation to periodic child support. Findings having been made, it is unnecessary that they are repeated. Notwithstanding that the wife has secured a degree of success in relation to periodic child support, the husband has the capacity to pay P’s school fees and it is just and equitable and otherwise proper that he does so. Because the costs of the children’s uniforms and the like have been taken into account when assessing their proper needs, it would not be just and equitable and otherwise proper to make a non-periodic order in relation to those additional expenses. Refusing to make an order is likely to create anxiety in relation to the payment of P’s primary school fees and otherwise cause real hardship to the wife.
The non-periodic order is a separate payment to the assessment that will issue as a consequence of the Part 7 Division 4 order. So that it is clear, the annual rate of child support payable by the husband is not reduced as a consequence of the order made pursuant to s 124 of the CSAA.
In relation to periodic payments, the period over which the payments will be made is not so long that the order should be indexed.
Orders take effect from the date the order is made, which in relation to the periodic payments is appropriate. However, in relation to P’s primary school fees, just as the husband has paid these to date and to maintain that commitment, the order will operate from the commencement of term 1, 2013. Although he is likely to have done so and the order might be otiose, it means there is one less issue upon which the parties may come into conflict.
Before entering the proposed orders which are set out below, these reasons will be published to the parties to ensure that my calculations and findings are accurately reflected therein.
The parties were given a copy of my reasons and proposed orders on 9 May 2013 and the matter was adjourned to the following day. When the matter resumed the solicitor for the husband asked whether the figure for the wife’s paid legal expenses included the $40,000.00 referred to in paragraph 59 was taken into account at paragraph 155. It was.
Paragraph 221 of the reasons published yesterday referred to the July 2009 continuance of spousal maintenance order for three months. Because a new spousal maintenance order (in the same amount will be made) for the avoidance of doubt that paragraph has been withdrawn from these reasons. Although the intent was clear, this ensures that there can be no suggestion that in the next three months that the wife is entitled to the benefit of two spousal maintenance orders.
For these reasons I make the orders identified at the front of this judgment.
Proposed orders
1.That within three (3) months of the date of these orders the husband pay to the wife $41,382.00.
2.That within three (3) months the husband do all acts and things in order to transfer to the wife all of his right title and interest in the property situated at and known as B Street, Suburb T in the State of New South Wales being the whole of the land contained in Folio Identifier … .
3.That the wife shall indemnify the husband and keep him indemnified in respect of all liability whenever and however arising in relation to B Street, Suburb T.
4.Simultaneously with the transfer to the wife of the husband’s interest in B Street, Suburb T the wife shall provide the husband with a discharge of the mortgage registered number … to AMP Bank Limited secured upon the title of the Suburb T property.
5.That the parties shall forthwith join in the sale of the Type N boat with 115 HP Evinrude motor and associated accessories with the net sale proceeds to be divided 75 per cent to the wife and 25 per cent to the husband.
6.That in the event the wife does not comply with Order 4, then she shall forthwith do all acts and things necessary to effect a sale of the Suburb T property for the best price reasonably obtainable.
7.On settlement of the sale of the Suburb T property the proceeds of sale shall be paid in the following manner and priority:
(a)All costs and expenses of sale including legal costs and disbursements, agents commission and valuers fees and auctions expenses;
(b)The amounts necessary to discharge the Suburb T mortgage;
(c)The amounts required to pay all municipal, and water rates outstanding with respect to the Suburb T property; and
(d)The balance remaining to the wife.
8.That forthwith the husband and the wife do all acts and things necessary for the parties’ portfolio of Commsec shares in the joint names of the parties to be sold at the best price reasonably obtainable and the proceeds applied as to the wife 75 per cent of the net sale proceeds and the balance to the husband.
9.Unless otherwise provided by these orders:
(a)the husband hereby indemnifies the wife from and in respect of all actions, claims, suits and demands as may be made against the wife in relation to all liabilities in the name of the husband;
(b)the wife hereby indemnifies the husband from and in respect of all actions, claims, suits and demands as may be made against the husband in relation to all liabilities in the name of the wife, including any liability of the wife and/or the parties to the wife’s father.
10.Pending compliance by the wife with Order 4 of these orders, she shall pay as and when they fall due mortgage payments in relation to the AMP Line of Credit, council and water rates and utilities in relation to the Suburb T property.
11.Pending compliance by the wife with Order 4 of these orders, she is restrained from further encumbering or increasing the amount due to AMP in relation to the Suburb T property.
12.In the event that either party refuses or neglects to execute any deed or instrument necessary to give effect to these orders then the Registrar of the Court be appointed pursuant to section 106A of the Family Law Act 1975 (Cth) to execute such deed or instrument in the name of the defaulting party and to do all acts and things necessary to give validity and operation to the deed or instrument.
13.That the husband pay to the wife by way of spousal maintenance the sum of $800.00 per week by depositing that amount into the wife’s nominated bank account on a weekly basis, the first payment to be made within 7 days of the date of these orders and to occur weekly thereafter until 31 December 2013.
14.That pursuant to section 117 of the Child Support (Assessment) Act 1989 (Cth) there be a departure from the administrative assessment of child support dated 18 September 2012 so that the periodic amount payable by the husband in relation to the children, O born … February 2001 and P born … March 2004 is:
·for the period commencing on 10 May 2013 until 31 December 2013 in the amount of $300.00 per week per child, and
·for the period commencing on 1 January 2014 until 31 December 2016 in the amount of $400.00 per week per child.
15.That pursuant to section 124 of the Child Support (Assessment) Act 1989 (Cth) in addition to the periodic payments referred to above, from the commencement of term 1, 2013 and until the child, P finishes primary school the husband shall pay school fees for his attendance at Q School.
16.That the annual rate of child support payable by the husband pursuant to Order 14 is not reduced as a consequence of Order 15.
17.Subject to any application for costs, all outstanding applications are dismissed.
I certify that the preceding two hundred and seventy nine (279) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ryan delivered on 10 May 2013.
Associate:
Date: 10 May 2013
36
9
4