BEREAT & BEREAT
[2010] FamCA 693
•10 August 2010
FAMILY COURT OF AUSTRALIA
| BEREAT & BEREAT | [2010] FamCA 693 |
| FAMILY LAW – PROPERTY AND CHILDREN’S MATTER – UNDEFENDED PROCEEDING – Husband has not attended any court event in relation to the wife’s application – Husband is a resident of the Republic of France – Husband has not been in Australia since late 2008 – Husband advised via a letter that he did not seek to engage lawyers or oppose the wife’s claim – Consideration of requirements under regulations for service on the husband – Wife has gone to considerable effort and expense to attempt to personally serve all required documents – Compliance with regulation 12 of Family Law Regulations 2004 is waived FAMILY LAW – CHILDREN – PARENTING ORDERS – Husband has not seen the children for over eighteen months – Husband’s unilateral actions see the children have little to no interaction with him since separation – Presumption of equal shared parental responsibility is rebutted – Wife to have sole parental responsibility – Orders sought by wife are in children’s best interests FAMILY LAW – PROPERTY SETTLEMENT – Wife seeks certain add-backs or notional adjustments – Husband’s non-participation and lack of disclosure ought not prejudice the wife but justice and equity must nevertheless be done for the husband – Fifty percent of the notional adjustment sought by the wife is added back – Wife seeks orders that each party retains the property they currently hold achieving a 60/40 split – Division as sought is just and equitable in this case FAMILY LAW – SPOUSAL MAINTENANCE – Lump sum payment to enable the wife to complete further education FAMILY LAW – CHILD SUPPORT DEPARTURE – Establishment of special circumstances – Costs of caring for children in the way the parents had intended before separating FAMILY LAW – COSTS – Additional difficulties and expense by reason of the husband’s refusal to participate and residence overseas |
| Child Support (Assessment) Act 1989 (Cth) s 117; s 123; s 124 Family Law Act 1975 (Cth) Family Law Regulations 1984 (Cth) Regulations 5; 6; 12 Family Law Rules 2004 (Cth) r 11.02; |
| Black & Kellner (1992) FLC 92-287 Chappell & Chappell (2008) FLC 93-382 Chorn & Hopkins (2004) FLC 93-204 Clauson v Clauson [1995] FLC92-595 Hides & Hatton (1997) FLC 92-759 In the Marriage of Kohan (1993) FLC 92-340 Kouper & Kouper (No 3) [2009] FamCA 1080 Luckie & Luckie (1989) FLC 92-036 Mallahan & Mallahan [2010] FamCA 631 Mallet v Mallet (1984) 156 CLR 605 Morres v Papin and Rubber Trading Co Limited (1914) 14SR (NSW) 141 Munday v Bowman (1997) FLC 92-784 Omacini &Omacini (2005) FLC 93-218 R & R (No. 1) [2002] FMCAfam153 Townsend & Townsend (1995) FLC 92-569 Vartikian and Vartikian (No. 2) [1984] FLC 91-587 Vautin and Vautin [1998] FLC92-827 Weir & Weir (1993) FLC 92-338 |
| APPLICANT: | Ms Bereat |
| RESPONDENT: | Mr Bereat |
| FILE NUMBER: | BRC | 5191 | of | 2009 |
| DATE DELIVERED: | 10 August 2010 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Murphy J |
| HEARING DATE: | 13 July 2010 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Page of Senior Counsel |
| SOLICITOR FOR THE APPLICANT: | Hartley Healy |
| THE RESPONDENT: | No appearance |
Orders
IT IS DIRECTED THAT
A transcript of the hearing on 13 July 2010 before the Honourable Justice Murphy be provided to the parties at no cost to themselves, with the husband’s copy to be provided, in the first instance, to the solicitors for the wife.
The solicitors for the wife serve upon the husband:
(a) a copy of the Outline of Argument filed by the wife on 12 July 2010;
(b) the husband’s copy of the transcript of the hearing on 13 July 2010; and
(c) the husband’s copy of the Orders and Reasons for Judgment of today.
IT IS ORDERED THAT
Pursuant to Regulation 6 of the Family Law Regulations 1984, the wife be excused from compliance with Regulation 12 of the said Regulations, the requirements of which are hereby dispensed with.
Pursuant to Rule 7.17 of the Family Law Rules 2004, service of each of the documents required by the order made on 16 March 2010 be taken to have been effected in accordance with that order on 17 June 2010, and all such other service as might be required by the Rules be dispensed with.
Pursuant to Rule 11.02 (2) of the Family Law Rules 2004, this case be determined on an undefended basis.
IT IS FURTHER ORDERED THAT
Parenting Orders
The mother have sole parental responsibility with respect to “major long-term issues” as that expression is defined in the Family Law Act 1975 (“the Act”) in respect of the children B, born … May 1996 and E, born … September 1999.
The mother have sole parental responsibility with respect to issues that are not “major long-term issues” as defined in the Act in respect of the said children.
The said children live with the mother.
The said children shall be at liberty to spend time with and communicate with their father at all such times as may be agreed between the parties.
The mother, by this order, is authorised to sign all such documents and do all such things as might be necessary so as to ensure that:
(a)a passport re-issue in each of the children’s names (as and when they respectively expire);
(b)thereafter the children have a valid and current passport issued in their name without the necessity of:
(i)obtaining the father’s consent which such consent is hereby waived in each case; and
(ii)the father signing a passport application for either of the said children.
The said children be permitted to travel overseas at all such times as the mother, in her sole discretion, might determine.
Notwithstanding the previous two paragraphs of these orders, should the Australian Department of Foreign Affairs and Trade require either or both of the children’s passport applications to be signed by their father then:
(a)A Registrar/Deputy Registrar or Judge of the Family Court of Australia, Brisbane Registry, is hereby appointed pursuant to the provisions of section 106A of the Family Law Act 1975 (as amended) to execute documents in the name of the father, and to do all acts and things necessary in respect of any such application in his stead.
(b)The execution of any such document by the said Registrar/Deputy Registrar or Judge shall have the same force, validity and effect as if the document had been executed by the father.
Settlement of Property
The wife forthwith shall retain as her absolute property and the husband shall forthwith relinquish and/or transfer to the wife all his right, title and claim (if any) in and to the following:
(a) her interest in the following properties:
(i)the former matrimonial property situated at P, Gold Coast;
(ii)the unit situated at W, Gold Coast; and
(iii)the unit situated at S, Brisbane.
(b) all superannuation interests in the name of the wife;
(c) the wife’s motor vehicle;
(d) the furniture and chattels in the wife’s possession;
(e) the wife’s jewellery;
(f)any monies standing to the credit of the wife in any bank account (whether in Australia or overseas);
(g)the wife’s investment with Securcorp Pty Ltd; and
(h)all other interest or interests in any property or financial resources of whatsoever nature that the wife has in her name and/or possession as at the date of these Orders.
The husband shall forthwith retain as his absolute property and the wife shall forthwith relinquish and/or transfer to the husband all her right, title and claim (if any) in and to the following:
(a) all superannuation interest in the name of the husband;
(b) the husband’s motor vehicle;
(c) the husband’s furniture and chattels;
(d) the husband’s jewellery;
(e)subject to compliance with paragraphs 21, 23 and 24 of these Orders, the balance of the monies standing to the credit of the husband in any bank account (whether in Australia or overseas);
(f)the balance (if any) of the husband’s investment with Securcorp Pty Ltd; and
(g)all other interest or interests in any property and financial resources of whatsoever nature that the husband has in his name and/or possession as at the date of these Orders.
The husband and wife shall each be responsible for liabilities incurred in their respective names including all borrowings, personal loans and credit card facilities and shall indemnify and keep indemnified the other against any liability that may occur in respect thereof.
The husband and wife shall each do all acts and things necessary, including signing all necessary documents, so as to give full force and effect to the provisions of these Orders and, in the event that either party refuses or neglects to comply with any provision of these Orders within fourteen (14) days of a written request to do so by the other party, then a Registrar of the Family Court of Australia at Brisbane be hereby appointed, pursuant to Section 106A of the Family Law Act, to execute all documents in the name of that party and to do all acts and things necessary to give the validity and operation to these Orders.
The transferee spouse shall prepare any documents necessary to give effect to the provisions of these Orders at their cost, and further be responsible for the payment of registration fees (if any) in relation to the transfer of any property into their name.
Any duty payable on transactions arising from these Orders or any documents executed pursuant to these Orders shall be paid by the transferee spouse.
The parties shall comply promptly with all requisitions issued by the Office of State Revenue, Land Titles, Main Roads Department and any other government department in relation to any document executed or transacted pursuant to, or to give effect to, the terms and conditions of these Orders.
In default of either of the parties hereto complying with any requisition so issued within fourteen (14) days on the date upon which any requisition issues, that the party not in default shall be entitled to comply with any of the said outstanding requisitions and recover from the other party in default the costs and outlays incurred in complying with any of the said requisitions with such costs to be calculated in accordance with the Family Law Rules.
Spousal Maintenance
The husband shall pay to the wife, the sum of Twenty-Eight Thousand Dollars ($28,000) as and by way of lump sum spousal maintenance, with such payment to be made from the monies invested in the husband’s Suncorp Fixed Term Deposit Account (Account No. …57) and this order shall of itself provide sufficient authority to Suncorp to issue a cheque in that sum, payable to the wife.
Child Support and Departure
The Application for Departure from the Administrative Assessment of the child support relating to the children by the wife be dismissed.
The father forthwith pay to the mother’s solicitors Hartley Healy the sum of One Hundred Thousand Dollars ($100,000) to be held on Trust by them in the names of the mother and father as trustees upon trust to:
(a)Invest such sum in any secure investment considered by them appropriate but so as to enable compliance with the succeeding sub-paragraphs of this Order;
(b)Firstly pay to the Child Support Agency on a monthly basis, the amount due pursuant to such Child Support Assessments as apply to the said children until such time as either or both Assessments shall cease;
(c)Until cessation of Child Support Assessments in respect of each child or as otherwise ordered by a court exercising jurisdiction under the Child Support (Assessment) Act 1989, the balance of any funds so held shall be disbursed:
(i)Firstly in payment of any outstanding fees to the Child Support Agency or any arrears of child support owing pursuant to any Assessment in respect of either or both such children; and
(ii)Any balance, including any interest or other accretions remaining thereto to the father.
Costs
The husband shall pay to the wife costs of and incidental to these proceedings fixed in the sum of Twenty Thousand Dollars ($20,000), with such payment to be made from monies invested in any account in the husband’s name and such payment to be made to the Trust Account of the wife’s solicitors, Messrs Hartley Healey.
The husband be restrained and an injunction issue restraining the husband from dealing with any monies held in his name in the Suncorp Cash Management Account and the Suncorp Fixed Term Deposit, pending written notification to that financial institution from the wife’s solicitors that the monies ordered pursuant to paragraphs twenty-one (21), twenty-three (23) and twenty-four (24) of these orders have been made.
Upon receipt of the notification from the wife’s solicitors contemplated by the previous paragraph of these orders, all previous injunctions, undertakings and restraints placed upon the husband in respect of the use of any funds in his name be forthwith discharged.
AND IT IS FURTHER ORDERED THAT
All extant applications be otherwise dismissed and removed from the list of cases awaiting finalisation.
Following the expiration of the appeal period, all subpoenaed documents be returned to the persons or institutions from which they emanated and all exhibits are returned to the person or persons who tendered the same.
Pursuant to s 65DA(2) and s 62B, the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders and details of who can assist parties adjust to and comply with an order are set out in the Fact Sheet attached hereto and these particulars are included in these orders.
IT IS NOTED that publication of this judgment under the pseudonym Bereat & Bereat is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 5191 of 2009
| MS BEREAT |
Applicant
And
| MR BEREAT |
Respondent
REASONS FOR JUDGMENT
The approximate 15-year cohabitation of the parties to these proceedings commenced in about 1993 or 1994 and ended with their separation in early 2008. The parties married in 2001 in Brisbane.
The parties were each employed by a French company and had resided outside of Australia, but both immigrated to this country in about October 2003. The wife now has Australian citizenship. The parties have two children, B, born in May 1996 (14) and E, born in September 1999 (10).
Subsequent to separation, the husband returned to New Caledonia where he lived with his father, whilst the wife and children continued to reside in the former matrimonial home on the Gold Coast. Since separation, the husband has returned to Australia on two occasions: in mid-February 2008 for about six days and in mid-September 2008 for about four weeks. Since about October 2008, the husband has not returned to Australia.
In February 2008, shortly after separation, the wife obtained a Temporary Protection Order against the husband pursuant to the State’s Domestic Violence legislation. He was served with that order when he returned to Australia in September 2008. In October that year, he filed an Application to Revoke or Vary the Temporary Protection order. In November, that application was adjourned to January 2009. However, the husband has not returned to Australia since September 2008. He did not appear at the adjourned hearing of his Application for a Variation of the Temporary Protection Order.
On 16 June 2009, the wife filed an Initiating Application in this Court for final orders of varying types and sought interim orders for the preservation of monies in a bank account controlled by the husband. No material has been filed by the husband in respect of that application. No appearance has been made by the husband, or on his behalf in respect of that application.
Consequent upon service on the husband in New Caledonia on 17 July 2009, the husband sent a letter to the Court, on 4 August 2009, acknowledging receipt of the application and informing the Court that he was “not in a healthy position” to settle divorce matters with the wife. (The letter is Exhibit LB23 to the wife’s affidavit.)
On 24 August 2009, the Court made an order requiring the husband to file material by 16 October 2009 and adjourned the matter to 19 October 2009. No material was filed in accordance with that order. The wife’s application was amended and leave was given to file the amended application and affidavit material on 19 October 2009. The matter was adjourned to 30 November 2009.
There was no appearance on that adjourned date by the husband or any legal representative on his behalf. On 23 February 2010, the husband sent a letter to the Court informing the Court that he did not propose to obtain legal representation and did not oppose the orders sought by the wife.
On 11 June 2010, the wife filed a Further Amended Initiating Application for Final Orders and, on 7 July 2010, filed an Affidavit of Evidence-in-Chief, an updated Finance Statement and an Affidavit of her solicitor. The matter was listed before me by a Registrar and was heard by me on 13 July 2010.
The wife seeks parenting orders as well as orders for settlement of property, lump sum child support, and lump sum spousal maintenance together with an order for costs.
No Response or other communication has been received by, or on behalf of, the husband in respect of the Further Amended Initiating Application filed by the wife on 11 June 2010, in which those orders are sought.
Justice requires that this Court be well satisfied that the husband is aware of the orders sought against him, and that he has had an adequate opportunity to be heard in respect of the Application, before proceeding to consider the making of those orders.
Upon satisfaction of that issue, it is necessary for the Court to ensure that the evidence before the Court justifies the requirements at law for the making of the respective orders sought.
Service and Opportunity to Respond
Reference has already been made to the fact that the husband has previously acknowledged receipt of material filed by the wife and has evidenced an intention to agree to earlier orders sought and, subsequently, evidenced an intention to not participate in any aspect of the proceedings.
Annexed to the Affidavit-in-Chief of the wife is a letter from the wife’s solicitors forwarded to the husband on 11 June 2010 enclosing copies of the Further Amended Application filed 11 June 2010 and advising the husband of the consequences of failing to file material, including the Court’s power to hear and determine the wife’s application on an undefended basis in his absence. The letter was forwarded to the husband’s residential address in New Caledonia and also to his postal address.
The material prepared on behalf of the wife in support of the orders sought by her is somewhat voluminous. The wife deposes to the difficulties and costs in effecting service personally. In particular, the difficulties encountered by the wife in effecting personal service, despite attempts to do so via professional process services both here and in New Caledonia, are deposed to.
The wife also deposes in that affidavit to having had a conversation with the husband’s father. He informed her that the husband resided at his home in New Caledonia except when he was travelling. The fact that the husband resided there was confirmed by a process server who effected service of the earlier material of July 2009. In the note forwarded to the Court by the husband in 2009, he indicated his address as his father’s address.
The wife herself travelled to New Caledonia to make enquiries as to the husband’s whereabouts subsequent to the hearing of the matter before this Court on 24 August 2009. During that trip, the wife deposes to further conversations with the husband’s father, wherein the father advised that the husband continued to reside with him except when he was travelling. Information obtained by the wife suggests that the husband has been travelling extensively.
The earlier documentation filed by the wife was served personally by a Process Server on 17 July 2009, but the documents were also subsequently sent by the wife via DHL Courier to the resort at which the husband was staying in Thailand. Again, a Process Server effected personal service of subsequent Court documents on 11 February 2010. The wife deposes that whilst the husband “has a sound appreciation of the English language … I translated the covering letter my solicitor sent to [the husband] enclosing the entirety of all the court documents filed to date”.
Within that context, it is important to observe that the last contact that the wife had with the husband personally was in October 2009. Subsequent to that, and despite personal service of documents upon him, there has been no communication initiated by the husband with the wife (or, indeed, the children).
On 16 March 2010, this matter was listed for mention before a Registrar of this Court. On that occasion, the Court had before it a letter signed by the husband and dated 23 February 2010. That letter is exhibited to the wife’s Affidavit of Evidence-in-Chief. It is, I think, important to quote that letter in its entirety (quoted verbatim):
To whom it may concern following receipt of the subpoena hearing date received on 19 February
I undersigned Mr [Bereat] wish to inform the Court of Brisbane by the following letter that.
I do not propose to engage any legal representatives to appear on my behalf at either hearing date or both from the Family Court and have no intention to present any objection regarding any action engaged by [the wife].
I wish to request the legal Family Court of justice protects by any means the legal interests of my two children [B] and [E] ans assure them total protection in any circumstances.
I will take no action on my behalf whatever against any decision of Family Court of justice taken along these lines.
Mr [Bereat]
(handwritten)
[New Caledonia] 23.2.2010
(signature)
On 16 March 2010, orders were made that the matter be listed for trial on an undefended basis on 13 July 2010, together with procedural orders relating thereto.
Included among the procedural orders made was an order:
9.That within seven (7) days of today’s date the applicant’s solicitor shall provide a letter to the respondent outlining the trial directions made today and advising the respondent of the consequences of his failure to comply with the directions and the meaning of proceeding by way of undefended hearing, which such a letter and the amended application filed by the wife pursuant to paragraph 2 herein (if applicable), being sent to the respondent by ordinary post to the following addresses:-
9.1 […] [New Caledonia];
[…] [New Caledonia].
Correspondence complying with the order just referred to was forwarded by the solicitors for the wife to the husband on 10 June 2010 by International Express Post (Exhibit LB4 to the Affidavit of Evidence-in-Chief of the wife).
Regulations and Requirements
As earlier indicated, the husband (unlike the wife) did not become a citizen of Australia. He is a national and resident of New Caledonia which is a Territory of the Republic of France. Service must, then, be effected on a person who is neither an Australian citizen or in Australia and who is resident of another country.
Regulation 12 of the Family Law Regulations 1984 (as amended) provides for service in countries that are parties “to certain conventions”. France is a convention country. It is accepted that service has not been effected as Regulation 12 contemplates.
However, Regulation 5 provides:-
(1)Non-compliance with these Regulations, or with a rule of practice or procedure in a court exercising jurisdiction under the Act, does not render proceedings in that court void unless the court so directs.
(2)In exercising its discretion under this regulation, the court shall have regard to the real merits of the case, the minimizing of expense, and whether any party to the proceedings has suffered injustice or has been prejudicially affected by non-compliance with these Regulations.
(3)In relation to proceedings that commenced before the commencement of these Regulations, a reference, in subregulation (1), to these Regulations shall be read as including a reference to the former Regulations in their application to those proceedings.
In a similar vein, Regulation 6 provides:-
(1) Subject to the Act and these Regulations:
(a)the court or a registrar may, at any time, upon such terms as the court or registrar thinks fit, relieve a party from the consequences of non-compliance with these Regulations, a rule of practice and procedure of the court applicable to the proceedings or an order made by a registrar;
(b)the court may at any time, upon such terms as the court thinks fit, relieve a party from the consequences of non-compliance with an order made by a court; and
(c)the court may, upon such terms as the court thinks fit, dispense with the need for compliance by a party within the provisions of these Regulations.
(2)Where these Regulations fail to make provision on any matter, the court is empowered to give, and shall give, such directions as to practice and procedure as the court thinks fit.
(3)In relation to proceedings that commenced before the commencement of these Regulations, a reference, in subregulation (1) or (2), to these Regulations shall be read as including a reference to the former Regulations in their application to those proceedings.
Service was effected in the manner contemplated by the order earlier made by the Registrar, together with the required explanation (see Exhibit LB4 to the affidavit of the wife). In respect of service and attempts at service, it should also be observed:
· The husband has previously indicated a preparedness to abide orders of the court provided that “the legal Family Court of justice protects by any means the legal interests of my two children …”;
· There have been very significant difficulties with service on earlier occasions;
· Such service has come at considerable expense to the wife;
· The husband has evidenced a clear intention to not participate in the proceedings since late 2009, has not resiled from that position since, and has reiterated that position in the manner just indicated.
In my view, the Court should relieve the wife from any consequences of non-compliance with Regulation 12 of the Family Law Regulations. Failure to do so would, in my view, cause the wife considerable further expense and delay which is neither in the interests of justice nor in the interests of the two children of the parties’ relationship. It seems to me the wife has given an adequate explanation as to why the Regulation was not complied with in this case and I am satisfied that justice requires the default to be excused. (See Morres v Papin and Rubber Trading Co Limited (1914) 14SR (NSW) 141 at 144).
For clarity, I will, because of the circumstances earlier identified, formally order that service in accordance with the Family Law Rules 2004 and the Family Law Regulations 1984 be dispensed with. I reiterate that I am, in any event, tolerably satisfied that the husband is aware of the proceedings and has indicated his preparedness to abide the order of the Court and to take no part in the proceedings.
Undefended Proceedings
Rule 11.02 of the Family Law Rules 2004 provides, relevantly, that if a party does not comply with a procedural order, the Court may do a number of things including “determine the case as if it were undefended”.
I reiterate the matters earlier outlined and that I am satisfied that the husband has had ample opportunity in which to participate in the proceedings and has chosen not to, save in the manner earlier described.
I consider it appropriate to determine the proceedings on an undefended basis.
Parenting Orders
The wife seeks orders that she “have sole parental responsibility for the children regarding their long-term care, welfare and development …” and, thereafter, details a number of specific matters included within that order. So, too, an order for “sole parental responsibility” is sought in respect of the “day to day care, welfare and development of the children” and goes on to seek orders that the children live with her and that they “be at liberty to spend time with and communicate with the respondent husband at all such time[s] as may be agreed between the parties”.
I have, in other judgments, referred to the issue of parental responsibility as defined pursuant to the changes made to Part VII of the Act by the Reform Act. It is, I think appropriate, particularly for the husband who is not present or represented, to repeat those comments in this context. In Mallahan & Mallahan [2010] FamCA 631, I said:
41.The parents of children each have, by the fact of parenthood alone, parental responsibility for each of those children. (s 61C). That means that each parent has, in respect of each child, “all the duties, powers, responsibilities and authority which, by law, parents have in relation to children” (s 61B). That situation is not affected by any change in the nature of the parent’s relationship, for example by them separating or re-marrying (s 61C(2)).
42.Parental responsibility can, though, be altered by the making of a parenting order by the court but only to the extent that the order confers duties, rights, responsibilities or authority in relation to the particular child or children the subject of the order. However, a parenting order does not per se remove or diminish any aspect of parental responsibility; the order must expressly do so or doing so must be necessary to give effect to the order (s 61D(1) and (2)).
43.But, when a court is to make a parenting order, it must apply a presumption that it is in the best interests of the subject children for their parents to have “equal shared parental responsibility” for those children. The latter expression is not defined, but reference to s 61B would seem to render a meaning that all of the duties, powers, responsibilities and authority which, by law, parents have in relation to children are to be shared, and shared equally.
44.The statutory presumption just referred to is inapplicable in circumstances where the court has reasonable grounds to believe that there exists abuse or family violence as defined (s 61DA(2)), or is rebuttable where the court considers that it is in the bests interests of the children for the presumption to be rebutted (s 61DA(4)).
45.No statutory provision other than s 60CC governs how best interests is to be determined in that context. Section 60CC, it has been noted, is headed “how a court determines what is in a child’s best interests”. It is, then, again called into use in this context.
46.The ambit of the legislative provisions referred to thus far is narrowed by reference to s 65DAE and the Note to s 65DAC. The latter section makes it clear that sharing parental responsibility (whether equally or not) is not a passive activity; it requires those having shared parental responsibility, or aspects of it, to make joint decisions and to consult and attempt to reach agreement in order to do so. However, the section goes on to provide that consultation is not required unless the decision is about a “major long-term issue” – an expression that is defined.
47.Section 65DAE and its Note underline the last point by providing that there is no necessity to consult a person who has or shares parental responsibility about decisions that are made in relation to the child during the time that the child is spending with that person, that are not decisions about “major long-term issues”. It is to be noted that the section is made subject to any provision to the contrary in a parenting order (s 65DAE(2)).
48.“Major long-term issues” is defined in s 4:
major long-term issues, in relation to a child, means issues about the care, welfare and development of the child of a long-term nature and includes (but is not limited to) issues of that nature about:
i) the child’s education (both current and future);
ii) the child’s religious and cultural upbringing; and
iii) the child’s health
iv) the child’s name;
v) changes to the child’s living arrangements that make it significantly more difficult for the child to spend time with a parent.
To avoid doubt, a decision by a parent of a child to form a relationship with a new partner is not, of itself, a major long-term issue in relation to the child. However, the decision will involve a major long-term issue if, for example, the relationship with the new partner involves the parent moving to another area and the move will make it significantly more difficult for the child to spend time with the other parent.
49.Thus, if the presumption of equal shared parental responsibility is not rebutted, then, absent specific provision in the parenting orders, the consultation and genuine effort to reach a decision required by s 65DAC applies, but (subject to specific provision in the Orders) only in respect of “major long-term issues”.
50.Equally, the application of the presumption will mean that decisions during time spent between parent and child that are not about “major long-term issues”, can be made by the parent exercising the time without the necessity for the consultation and joint effort otherwise required in respect of “major long-term issues”. (s 65DAE(1) and (2)).
51.Each of these matters has relevance, as it seems to me, to a decision as to whether the children’s best interests require the rebuttal of the presumption. A particular aspect of that is the role that entrenched and apparently intractable conflict might play in any such decision.
52.A further issue arises by reference to the use of the expression “sole parental responsibility” which is in wide use in orders sought by parties and, indeed, in orders made by this court (and which has been in use for many years, including prior to the passing of the Reform Act which introduced into the Act the sections just referred to). The expression is neither now, nor was then, defined or used in the Act. A question arises as to what might be meant by the expression “sole parental responsibility” in the context of the current legislation.
53.The definition of “parental responsibility” in s 61B refers to “all of” the powers, duties etc of parents. It is strongly arguable, then, that the expression “sole parental responsibility” means, or is intended to mean, that the specified parent has “all of” the powers, duties etc in relation to the specified children. If so, it seems to me equally strongly arguable that the expression means, or is intended to mean, that the other parent has no parental responsibility – that is none of the “duties, powers, responsibilities and authority over their child otherwise conferred by law”.
54.If that is the meaning of the expression, then, in my view, a court should take account of a particular additional consideration (see s 60CC(3)(m)): the exercise of discretion in favour of excluding one parent from the decision making and responsibilities for their children in respect of “major long-term issues” in the manner just outlined - particularly where, as here, there are many years until the children turn 18 – is, it seems to me, a very significant interference with the fundamental rights of a person.There is no doubt that those rights must give way in favour of an outcome which is found to be in the best interests of the children. But, the fact that this is the paramount consideration does not, in my view, mean it is the sole consideration nor that the legitimate fundamental rights of a parent are irrelevant. (cf AIF v AMS (1999) 199 CLR 160; U v U (2002) 211 CLR 238).
55.The expression “sole parental responsibility” is frequently used without otherwise distinguishing between “major long-term issues” and decisions made during periods of time with the children. Or, it is used in conjunction with expressions used in now-repealed legislation such as, for example, “long-term care, welfare and development”.
56.An order that simply provides, without more, for one party to have “sole parental responsibility” is, at least arguably, an order making provision contrary to s 65DAE(2) and, arguably, an order expressly providing for the diminution or “taking away” of parental responsibility within the meaning of s 61D(2).
57.Those matters too, have relevance as it seems to me in assessing whether the best interests of children require the rebuttal of the statutory presumption and, if so, the form of the orders that might be made in respect of parental responsibility. In Chappell and Chappell (2008) FLC 93-382, the Full Court said:
75. In order to rebut the presumption it is necessary for the Court to make a finding that it would not be in the best interests of the child for the presumption to be applied. We accept that in determining what is in the child’s best interests the Court must take into account the prescribed matters in ss 60CC(2) and (3), one of which requires the Court to consider whether it would be preferable to make the order least likely to lead to the institution of further proceedings. In our view, it would be an appropriate exercise of discretion in some cases to find that application of the presumption would not be in the child’s best interests because the track record of the parents would suggest a high probability of deadlock, which would inevitably lead to further proceedings. In such cases, however, the process of reasoning required to rebut the presumption would involve findings related to the welfare of the child, rather than findings concerning, for example, the likelihood that schools and hospitals would find it easier to deal with one parent rather than two. [emphasis in original]
76. We can also envisage circumstances in which the Court, in the proper exercise of discretion, might make very specific orders in relation to issues which could be loosely described as relating to the “management” of particular aspects of a child’s welfare. Thus, for example, in the present matter his Honour might appropriately have made an order that the wife have responsibility for making of appointments with the speech therapist, as this has been a point of contention. However, where the Court proposes (as his Honour did in this case), to give one of the parents a form of responsibility for issues as broad as “health” and “education”, we consider this should ordinarily be done by use of the concepts prescribed by the legislation itself.
In this case, parenting orders are sought and are proposed to be made by the Court. Accordingly, I am bound to apply a presumption that it is in the best interests of these children for the parents to share parental responsibility equally. In my view, the presumption is plainly rebutted in this case for the reasons which follow.
The husband has not seen the children since September/October 2008, that is more than 18 months ago. The wife deposes that, as at July 2010, the husband had not spoken to the children in nearly eight months. As earlier referred to, the wife has had no contact with the husband since he returned to New Caledonia towards the end of 2008 except a couple of telephone calls, the last occasion being in October 2009.
Specifically, the husband did not contact the children at Christmas time 2009 nor at Easter. The husband has not actively participated in the co-nurturing of the children since separation. Furthermore, the wife deposes to conduct on behalf of the husband in the past that would make cooperative parenting, in the circumstances of this case, extremely difficult. The process of consultation and decision-making contemplated by the Act earlier referred to, plainly cannot (or will not) take place in this case.
The children reside with the wife and have done so since separation. Since that time, she has made all of the day-to-day and long-term decisions with respect to the children and it is plainly likely that she will continue to do so well into the future.
It is, in my view, clear that the best interests of the children in this case require rebuttal of the presumption of equal shared parental responsibility.
I make it clear that I have taken account of the other considerations relevant to an order which, as I view it, will effectively exclude one of the children’s parents from decision making for them. It will be appreciated from what I have earlier said, that I consider such an order is a significant interference with the human rights of that individual. Equally clearly, I am of the view that those rights must give way when the best interests of the children require it. In my view, the best interests of the children plainly require it in this case.
I will make an order as sought by the wife for her to have “sole parental responsibility” for “major long term issues” as defined in the Act and for an order that the wife shall have sole parental responsibility in respect of issues that are not major long-term issues.
Given the particular circumstances of this case, it seems to me plain that the other orders sought by the wife are in the children’s best interests.
In arriving at that conclusion, I have taken account of the matters already outlined in these reasons, together with the unchallenged evidence outlined in the wife’s Affidavit of Evidence-in-Chief where the wife sets out the arrangements that currently exist for the care of the children.
Specifically, the wife has set out in her affidavit unchallenged evidence with respect to those matters directly relevant to the Primary and Additional Considerations mandated by the Act to be taken into account when making parenting orders with respect to children. I have taken those Considerations into account in arriving at my decision that it is ultimately in the best interests of the children that the orders sought by the wife be made.
I also, obviously, take into account the Objects and Principles of the legislation, noting the underlying principles that children benefit from a committed (“meaningful”) relationship between them and each of their parents. Again, though, the particular circumstances of this case (brought about, as it seems on the evidence before me, through the unilateral actions of the husband) nevertheless point to the best interests of the children being met by the orders as sought.
The wife also seeks orders with respect to the issue of passports to the children. She deposes to the fact that, on earlier occasions, the husband refused to sign and return a passport application for E when requested to do so. She also deposes, I should say, to behaviour that would satisfy the definition of “family violence” in the past. Whilst orders for “sole parental responsibility” should be sufficient to meet the expressed concerns with respect to the issue of passports in the future, I nevertheless consider it prudent and appropriate to make orders in terms of those sought by the wife so as to avoid the potential for any future difficulties, including future litigation (see eg. s 69ZQ(1)(g) & (h)).
Settlement of Property
Earlier proceedings in this Court included orders, sought on an interim basis, designed to prevent the husband from accessing funds in a Securcorp Account. The wife deposes to expenditure from that account prior to the order being made and a subsequent attempt by the husband to access that account which was prevented by that order.
In the latter respect, Exhibit LB14 to the affidavit of the wife is a letter from Securcorp addressed to the husband indicating its awareness of, and preparedness to comply with, the order restraining the husband from redeeming funds from that account.
The wife deposes to the property of the parties or either of them. The table contained within her affidavit, was modified in submissions by Mr Page SC to correct some typographical errors. It is convenient and appropriate to reproduce the (corrected) table here:
UPDATED SCHEDULE OF ASSETS, LIABILITES AND FINANCIAL RESOURCES OF THE APPLICANT AND RESPONDENT
| Assets/liabilities | Ownership | Estimated value | Evidence / Reference |
| Real Estate | |||
| Former matrimonial property situated at [P] | Registered in Wife’s sole name. | $575,000.00 | As per valuation report of [SY] filed 16 June 2010. The property is unencumbered. |
| Unit situated at [W], Gold Coast | Registered in Wife’s sole name. | $260,000.00 | As per valuation report of [SY] filed 16 June 2010. The property is unencumbered. |
| Unit situated at [S], Brisbane | Registered in Wife’s sole name. | $375,000.00 | As per valuation report of [SY] filed 16 June 2010. The property is unencumbered. |
| Properties owned by Husband in New Caledonia | Husband. | $NK | As there has been no disclosure by the Husband of his financial circumstances, the Wife has been unable to ascertain if the Husband has acquired any properties overseas. |
| Motor vehicles | |||
| Wife’s motor vehicle | Registered in Wife’s sole name. | E $10,000.00 | As per appraisal Wife obtained from Redbook as per annexure “LB-15” attached to her affidavit of evidence in chief. |
| Bank Accounts | |||
| Wife’s Everyday Suncorp Bank Account (and sub-accounts) | Account held in Wife’s sole name. | $18,000.00 | As per Wife’s Financial Statement. |
| Investment in SecurCorp Limited | Account held in Wife’s name. | E $35,951.00 | As per Wife’s Financial Statement. Balance of investment as at 24 March 2010 - as per the correspondence received from SecurCorp dated 24 March 2010 as per annexure “LB-17” attached to the Wife’s affidavit of evidence in chief. |
| Monies in Wife’s bank accounts in New Caledonia (2 bank accounts; A/c No. […]67 has a balance of $2,331.40 as at 31/01/2010 and A/c No.[…]71 has a balance of $6,799.84 as at 30/09/2009) and France (A/c No.[…]88S has a balance of $177.36 as at 29/01/2010). | Account held in Wife’s sole name. | E $9,308.00 | As per Wife’s Financial Statement. |
| Monies in Husband’s bank accounts in Australia:- Suncorp Cash Suncorp Fixed Suncorp Fixed | The bank accounts are in the Husband’s sole name. | $762,596.00 | Preserved pursuant to Court Order of 19 June 2009. Balance of the account as at 31 March 2010 as per the statement attached as annexure “LB-19” to the Wife’s affidavit of evidence in chief. Balance of the account as at 17 April 2010 as per the statement attached as annexure “LB-20” to the Wife’s affidavit of evidence in chief. Preserved pursuant to Court Order of 19 June 2009. |
| Monies in any offshore bank accounts registered in the Husband’s name. | Husband | $24,757.38 | Balance of the account as at 31 March 2010 as per the bank statement attached as annexure “LB-21” to the Wife’s affidavit of evidence in chief. |
| Superannuation | |||
| Wife’s Superannuation – Intrust Super | Wife. | $901.00 | Per the Wife’s Financial Statement. Member benefit as at 2 July 2010 as per the member statement attached as annexure “LB-22” to the Wife’s affidavit of evidence in chief. |
| Notional Adjustment | |||
| Monies withdrawn by the Husband from the Suncorp Cash Management Account (Account No.:[…]86) on 22 May 2009 – the Wife seeks a notional adjustment for these monies | Husband | $50,030.00 | On 22 May 2009 the Husband withdrew, via a telegraphic transfer, the sum of $50,030.00 from his Suncorp Cash Management Account (Account No.: […]86). The Husband withdrew these monies without the Wife’s knowledge and / or consent. The Husband has not provided any accounting as to the application of the withdrawal of the said monies. |
| Monies withdrawn by the Husband post-separation | Husband | $67,863.00 | Since separation the Husband has spent a sum of approximately $67,862.90 of joint matrimonial funds for his personal use and benefit whilst travelling overseas, despite receiving a pension of approximately $4,700.00 per month for his day-to-day living expenses. The Wife seeks a notional adjustment for the monies spent by the Husband post separation. |
| NET ASSETS $2,189,406.38 + NK | |||
As can be seen, because these proceedings are being conducted on an undefended basis, I have included in that table the references to the evidence contained in the fourth column of the table produced by the wife. It can be seen that asserted valuations are supported by a valuation from an expert valuer in the case of real estate. I am otherwise satisfied as to the values included within the document.
It can be seen that included within the table are two amounts sought in respect of what is described as a “notional adjustment” amounting to, respectively, $50,030 and $67,863, a total of about $118,000.
The wife deposes in her affidavit to amounts said to be held in various of the husband’s bank accounts as at the date of separation and notes a difference between those balances and the balances, as at “March/April 2010” of $82,463. It is then asserted that the “significant variance” in the bank accounts is explained by him withdrawing:
significant amounts of monies whilst travelling overseas, despite receiving his monthly pension of a sum of approximately $4,500 to $4,700 [subject to the exchange rate], which he received from New Caledonia and France … and having minimal living expenses and also drawing on the monies in his account in New Caledonia.
Differences in the balances of other accounts are also referred to; in particular, that of the Suncorp Cash Management Account amounting to $88,422 during the same period.
The same affidavit refers to a specific withdrawal of $50,030 (being the first of the two amounts claimed by the wife) and the wife deposes “I seek to notionally add-back the sum of $50,030 withdrawn by [the husband] from the said account as [the husband] has failed to account for the application of the withdrawal of these monies”.
The wife then deposes to a series of items of expenditure totalling $38,552 incurred during a period of four months between August 2009 and December 2009, which she asserts was “for his personal use and benefit while he was travelling overseas in Asia”.
The wife also deposes to a New Caledonia Bank account in the name of the husband which “until [she] discovered a copy of [a] bank statement, [she] had no knowledge that [the husband] had …”. Again, differences in the amounts of the balance of that account are deposed to within the affidavit and “significant withdrawals of monies by [the husband] when he travelled overseas to Thailand and Japan”. Those amounts total $29,310.
The summation of the claim for what is commonly described as an “add-back” is said to exclude any amounts of interest earned by the husband on monies held in the various accounts to which reference has just been made. Further, it is said on behalf of the wife, that the wife seeks a “notional adjustment”
only … for the withdrawals of the monies which, on the face of the reference to the withdrawals on the bank statements, indicates that the monies were applied by the husband whilst travelling overseas”. It is submitted that “the husband made a premature distribution of joint matrimonial funds to himself, for which the wife seeks a notional adjustment.
In an earlier decided case now known as Kouper & Kouper (No. 3) [2009] FamCA 1080, I attempted to crystallize the principles emanating from earlier decisions of the Full Court in relation to the issue of “add-backs”. I am here applying the principles there outlined (at paras 90 and following in particular).
The cases have sought to emphasize that add-backs are the exception rather than the rule. Moreover, as has been said, parties are not expected to go into a state of suspended economic animation in the period subsequent to separation. The decided cases have equally recognised that there are categories of case where add-backs or “notional adjustments” can occur, including where there has been “premature distribution”, as referred to by Senior Counsel for the wife (which I take to be a reference to the decision of the Full Court in Townsend & Townsend (1995) FLC 92-569, particularly per Nicholson CJ at 86,654).
However, it needs to be borne in mind that the Full Court has firmly rejected the notion that “the mere fact that a party has expended money realised from the disposition of assets that existed as at the date of separation, will result in the expenditure being added back …” as being unduly simplistic (see eg Omacini &Omacini (2005) FLC 93-218 at para 39).
A notional adjustment or add-back to the pool also provides a specific dollar for dollar accounting of certain sums of money within a context that is neither an accounting exercise nor where mathematical precision predominates. The exercise of a discretion conferred by s 79 is a broad one, as has been emphasized by the High Court in Mallet and Mallet (1984) 156 CLR 605 and in many Full Court cases since.
The essence of the task is to arrive at orders which are just and equitable – a task made particularly difficult in this case by the failure of the husband to not only participate in these proceedings but, as a result, to not provide such disclosure as must be expected of a litigant in financial proceedings in this Court.
It seems to me that here, balancing the principles applicable to “notional adjustment”, the circumstances here require me to take account of the fact that the wife ought not be prejudiced by the husband’s failure to disclose or participate in the proceedings. Where there has been no disclosure, I propose to err on the side of generosity to the wife (see eg Weir & Weir (1993) FLC 92-338; Black and Kellner (1992) FLC 92-287).
So, too, where the wife has effectively taken sole responsibility for the children (albeit with the payment of some child support by the husband) for their day to day care and nurture, justice and equity requires that factor to be taken into account in assessing whether expenditure by the husband from capital, in addition to a pension received by him, ought be added back against him.
Having said that, justice and equity needs to be afforded to the husband notwithstanding his failure to participate in the proceedings and his absence from the determination. In that respect, it by no means follows (add-backs being the exception rather than the rule) that, merely because money has been expended by the husband on overseas travel that it should be added-back. That is all the more so when the tenor of the evidence is to the effect that the husband has chosen to live a somewhat peripatetic lifestyle since separation, and was formerly an employee of an international travel company who continues to have access to discount flights.
Balancing the various considerations and doing the best I can in the evidentiary circumstances presented to me, I consider it just and equitable that one half of the amount claimed by the wife, rounded to $50,000, be added back. I will make a consequent adjustment to the pool of assets accordingly.
With that alteration, the net property of the parties or either of them within the meaning of s 79 is approximately $2.139 million.
If the husband retains all such property of which the wife is aware and she retains property of which she is otherwise seised or owns (including her superannuation interests), the division of the property just described is near enough to 60 percent to the wife and 40 percent to the husband.
Contributions
The parties met and lived in New Caledonia until 2003. At that time, they were each made redundant from their employer. Until that time, each had worked for a French company. The parties worked remuneratively for, respectively, seven and four years after the birth of each child.
After their redundancy, the parties immigrated to Australia. From when they did so in October 2003 until separation in early 2008, neither party worked; they lived off the interest from their investments and the pension which the husband received from France and New Caledonia. That position has continued for the husband post-separation. The wife, however, has needed to engage in remunerative employment.
At the commencement of cohabitation, the wife had a half-interest in a unit owned by her grandmother. She estimates the value of that half-interest, at that time, at about $50,000. She had also received an inheritance pursuant to her mother’s estate. The husband apparently owned a property in New Caledonia, the value of which is unknown to the wife, and which was, apparently, sold during the course of the relationship.
Upon redundancy from their employer, the husband received about $230,000 and the wife about $160,000. The monies were applied towards the acquisition of real property in Australia and toward their respective financial support and that of the children.
The wife had earlier received an inheritance to which, I gather, she had access during the course of the relationship and which was predominantly used to acquire real property. Land situated at P on the Gold Coast (upon which the former matrimonial home is situated), was purchased in July 1999 for $93,000 from that source. In 2004/2005, the parties built the former matrimonial home on the land at P. The parties sold adjoining blocks of land for about $300,000 and the sale proceeds were applied towards the construction of the former matrimonial home.
Other real-estate was acquired at W on the Gold Coast, and at S in Brisbane. The former was purchased by the wife in her name from money she received from her redundancy package, savings of about $10,000 and the balance monies from her father’s estate. So, too, the S property was acquired from monies inherited by the wife from her mother’s estate.
As well as the $260,000 redundancy received by the husband, a sum of about $250,000 was received as sale proceeds from the sale of the property owned by the husband in New Caledonia and $150,000 was received in about 2007 by the husband as a premature distribution of his interest in his parent’s estate.
The wife asserts, and I accept, that she was the children’s primary care-giver. I accept that each of the parties made financial and non-financial contributions, including contributions to the welfare of the family, from the date of the marriage through to the date of separation.
Circumstances post-separation have already been alluded to. Significant among them is that the wife has had the full-time care of the children with virtually no input from the husband. So too, the wife (and children) have lived in, and maintained, the former matrimonial home and, similarly, preserved the other real property earlier referred to.
The circumstances, particularly the wife’s post-separation contributions, persuade me there should be an imbalance in the contributions of the parties favouring the wife of, say 2.5%. A disparity of 5% in contributions is represented by about $100,000 which I consider just.
Section 79(4)(e) – “The section 75(2) Factors”
The husband is aged 57 and is apparently in good health. The wife is aged 44 and is in good health.
The two children of the marriage are currently aged 14 and 10, and, plainly enough, have significant future care needs, including the balance of their respective educations. The wife is solely responsible for their day-to-day care. Not only is this so, but the husband plays no part in the care arrangements for the children, and has not done so for some considerable amount of time.
The husband is retired and lives off investments in the banking accounts in Australia and from the pension he receives from New Caledonia and France. The husband’s pension is in the region of $4500 per month which he will continue to receive for life.
The husband’s average taxable income can be seen to be about $110,000 per annum. The wife’s taxable income is in the sum of $20,000 - $25,000 per year. The wife’s employment and her current capacity for additional employment is affected by her previous occupation, her full-time care of two relatively young children, and her age.
The predominant responsibility for two children with (respectively, most and all of) their expensive secondary schooling years ahead of them is a telling consideration.
So, too, that care impacts upon employment, employment capacity and employment prospects.
An adjustment in favour of the wife is called for. I consider an adjustment in the region of $150,000 - $200,000 (ie a disparity of $300,000 - $400,000) is called for. When applied to my assessment of contributions, the overall result contended for by the wife would see an adjustment of about $150,000 – that is, about 7%. An adjustment in that region is, in my view, just.
Overall Assessment and Justice and Equity
The orders proposed by the wife would see each of the parties retaining the property and superannuation interests outlined in the table earlier set out,
As mentioned, that would result in the wife receiving approximately 60% of the net assets and the husband 40%. The disparity of 20% is represented in dollar terms by about $427,000. Considering all of the factors earlier enumerated, I consider that this disparity and the overall result just referred to is, in all the circumstances of this case, just and equitable.
Further, the orders reflecting that adjustment represent an appropriate “clean financial break” for these parties. In my judgment, they are, in their terms, just and equitable.
Specifically, the orders result in the wife retaining the real property and other assets situated in Australia, which provide some security for her and the children into the future in circumstances where she has an income and a capacity to earn income which I assess as being less than the husband. The husband has access to cash funds which provide a capital sum separate from his income stream for life, which can be utilised by him in his post-separation life. It is to be noted in that respect that he will have available to him well over $Aus750,000.
Spousal Maintenance
The wife’s claim is for lump sum spousal maintenance, expressed as being such as “to enable me to complete a course so that I may find employment during the children’s school hours”.
The wife’s current employment is as a casual food and beverage attendant on the Gold Coast. That employment commenced in October 2009, and requires the wife to work at night and on weekends and public holidays. She deposes to the hours being irregular.
She is employed as a casual and her hours tend to vary, but she mostly works “the lunch shift” between 11.30am and 3.00pm and “a dinner shift” from approximately 5.30pm to 10.30pm. She earns $20.20 per hour plus some penalty rates. Her net income is variable, but in the region of $300 per week.
Rental income is also received (about $670 gross per week) from the properties at W and S. The net amount received after payment of the usual expenses and the like, is about $445 per week. The wife also receives Centrelink Benefits.
The wife’s updated Financial Statement filed 7 July 2010 reveals a total gross income, then, of about $1653. That sum also includes $508 per week paid by way of child support for the children by the husband. That amount is paid pursuant to an assessment by the Child Support Agency.
The wife’s Financial Statement lists her expenses as being $1993 per week. Part N of that document reveals claimed total weekly variable expenditure of $1705 including $589 for herself and $1116 for the two children.
Given the factors earlier identified, including the husband’s non-participation and lack of disclosure, I propose to be robust. However, the Act also demands propriety in any orders made.
It seems to me that, applying a broad-brush approach, the wife’s needs ought be reduced to $400 per week.
In my view, the husband has the capacity to pay maintenance within the meaning of the Act, by reason of having a regular income secured for life and modest needs to be met therefrom. Furthermore, he has in excess of $750,000 at his disposal, which can be invested as he might think fit.
It seems on the evidence that he chooses to access income and capital for the purposes of world travel – something to which, plainly enough, he is perfectly entitled, but not at the expense of a legal obligation that otherwise exists for the support of his former spouse if such entitlement is found to exist.
In my view it is proper that an order for spousal maintenance be made. I consider it proper to provide for the approximate $13,000 for the payment of the course to which the wife deposes.
I am aware that the Full Court has indicated that periodic orders might be preferred over lump sum orders (see eg. Clauson v Clauson [1995] FLC92-595 @ 81,908). Equally, however, the search is for the order that is “proper” in an appropriate case (s 74(1)) and the Act provides the court with a discretion to effect that purpose (s 74(1)).
Here, maintenance is sought for a purpose that can be seen to be appropriate and proper: the pursuit of a course that will allow a sole-parent to pursue employment with hours more regular than those under which she currently labours. The Act plainly contemplates a lump sum being provided for such a purpose (and, indeed, more generally – see s 80(1)(a)). (See also, Vautin and Vautin (1998) FLC 92-827 @ 85,423.)
The evidence reveals both particular difficulties in contacting the husband and maintaining contact with him, and also the use of funds by him from sources of which the wife was not completely aware. The husband is living a somewhat peripatetic lifestyle in overseas countries.
I consider there is likely to be significant potential difficulties for the wife in securing regular payments of maintenance from the husband. Those factors also persuade me that the assessed spousal maintenance ought be paid as a lump sum (See Vartikian and Vartikian (No. 2) [1984] FLC 91-587). I calculate the proper amount on the basis of $400 per week for the duration of the intended course (45 weeks), a total of $18,000.
I propose to discount that figure slightly to take account of the fact that it is being received as a lump sum and might be invested. I don’t purport to do a precise calculation in that respect, but shall reduce it to, say, $15,000.
I will order that the husband pay the total sum of $28,000 as and by way of lump sum spousal maintenance.
Child Support Departure Application
The wife deposes to the means by which the amount assessed by the Child Support Agency (CSA) as child support, in respect of the two children, is paid by the husband. It involves the husband having signed a direct debit authority to allow child support as assessed to be automatically deducted from that account by the Child Support Agency.
The Child Support Assessment Notice issued by the Child Support Agency for the period 11 May 2009 to 28 February 2010 assessed that the husband pay the sum of $4838.00 per annum by way of Child support, a monthly rate of $403.17.
That application was reviewed by the wife consequent upon receiving copies of the husband’s bank statements and other such documents, indicating the amount of the pension received by the husband, together with interest earned by him on investments.
The Child Support Agency subsequently decided (on 13 September 2009) that the husband’s income ought be adjusted to $102,430 (Exhibit LB43 to the wife’s affidavit). That decision was accompanied by an Assessment dated 5 October 2009, of $2,262.33 per month.
Consistent with the husband’s approach to these proceedings, he did not respond to the wife’s application for a review of the Child support, nor did he respond or file a review to the change in assessment just referred to.
The wife deposes to the Child Support Agency deducting the sum of $2,034.42 per month pursuant to the assessment, arising, I gather, by reason of an inability to deduct the assessed increased amount (of $2,262.33 per month). Accordingly the wife deposes at paragraph 331 of the her affidavit:
The CSA continues to deduct the sum of $2034.42 per month from [the husband’s] Suncorp Cash Management account on account of the child support assessment. I was informed by the CSA that, despite the assessment being increased to $2,262.33 per month, they have continued to debit the sum of $2,034.42 and that the $9,142.30 included arrears of the extra payments that should have been made to me as per the increase in the assessment.
The sum of $9,142.30 refers to an accrued debt which was paid through a payment from that same account.
Each of the children receives a private education. The husband does not contribute to private school fees. The wife deposes:
… Despite [the husband] initially agreeing to contribute towards the private school fees, he has refused to do so telling me that his contribution towards the entire school fees was now conditional upon me revoking my DVO and allowing him to return to live at the matrimonial home with me and the children. As I refused to accept [the husband’s] demands [the husband] told me to manage all expenses relating to the care of the children by myself.
The wife deposes, then, to being entirely responsible for the payment of the children’s private school fees and all other necessary expenses associated with their care. She deposes to the child support assessed by the Child Support Agency being the only contribution made by the husband.
It will be appreciated that the monies being received by the wife come from an account over which the husband will have complete control as a result of orders for property settlement made by the court as earlier outlined. Moreover, the existing restriction on the husband being able to access other accounts will, of course, ultimately be removed so as to facilitate his entitlement pursuant to those orders.
Accordingly, in those circumstances, the wife deposes to a concern that the husband will deplete funds in the Suncorp Cash Management account, thereby leaving (in the absence of a further consent to direct debit another account) the wife without a means to receive or enforce child support or any arrears that might accrue. It is reiterated in that respect that the husband wrote to Securcorp on 3 February 2010 requesting the sum of $199,000 be transferred to him to an account in New Caledonia.
It is trite, of course, that each of the parents’ primary obligation is to support their children.
The Child Support Review earlier referred to, resulted in a decision on 30 September 2009. That reveals an assessed annual rate of child support (being one half of the likely school fee cost for the children for the 2010 year). Correspondence from the Child Support Agency, exhibited to the wife’s affidavit shows the Child Support Assessment (consequent upon the review earlier referred to) for the period 1 October 2009 to 31 January 2010 of $2,262.33 per month (being an annual amount of child support of $27,148, and based on a 2009 taxable income for the husband of $102,430.)
An applicant for Child Support Departure must first establish that there are grounds for doing so (s 117(2) Child Support (Assessment) Act 1989 (Cth)). Each is dependent upon the establishment of “special circumstances”.
Implicitly the ground relied upon is the cost of caring for, or educating, the children in the way that the parents had intended before separating (s 117(2)(b)(ii)). The Full Court said in Hides & Hatton (1997) FLC92-759 at 84,355:
… not only must the judge apply the three-stage process under s 117(2), (4) and (5) in relation to the circumstances of the parties as they exist in the child support year in question, but also in relation to the present circumstances of the parties (if at all relevant). For example, it may well be necessary in a particular case, in addition to considering the circumstances of the parties, in the past child support year in question, also to consider the present capacity of the payer to meet a new assessment and/or the impact on a payee of a credit in the payer’s favour which might be created by a departure from an assessment for an earlier child support year
In my view, special circumstances are established in this case by reason of the unusual international separation of the parents, the peripatetic lifestyle of the husband, the fact that the husband is unemployed and living off investments, and that the wife is maintaining a life for her and the children in Australia in circumstances where the husband has chosen to have very little to do with the family.
It seems to me plain that each of the parties had agreed that the children be privately educated. The wife specifically deposes to this and, in addition, deposes to the husband “reneging” on a prior informal agreement to that effect, by reason of the wife’s refusal to consider a reconciliation and the removal of the Domestic Violence Order with respect to him. There was, in my view, plainly an expectation on the part of each of the parents that private school fees would be incurred in respect of both children. In my view, a ground pursuant to s 117(2) is established in this case.
That being so, it is necessary to consider whether it is just and equitable within the meaning of s 117(4) to make the order sought or some other order, and whether it is “otherwise proper” within the meaning of s 117(5) to make the order sought or another order. Section 117(4) sets out the factors to which the court must have regard in deciding whether a particular order is just and equitable.
In Hides & Hatton, above, the Full Court said:
… some of the matters listed in ss (4) may overlap with matters already considered under ss (2), and some of paragraphs in ss (4) may be more significant in one case than they would be in another, or of little relevance in a particular case. It is an essential part of the s 117 exercise to carry out the obligation under ss (4). However, that does not mean that it is necessary in each case to slavishly go through each of the paragraphs. The extent to which it is necessary to do so will depend upon the facts and conduct in the individual case, and the analysis already performed under ss (2).
The Full Court held in Luckie & Luckie (1989) FLC 92-036 that:
A number of cases decided under the superseded child maintenance legislation were to the effect that save in exceptional circumstances the most appropriate order for child maintenance was a periodic order rather than a lump sum order anticipating the long-term future. These decisions include Spano v Spano (1979) FLC 90-707; V and G (1982) FLC 91-207; Racine and Hemmett (1982) FLC 91-277 and Vartikian v Vartikian(1984) FLC 91-587.
A preference for periodic child support can be seen, at the least, in sections 123 and 124 of the Act. Before a court can make an order for lump sum child support, there must be an administrative assessment in force (s 123(2)) and any application for departure from the administrative assessment must have been heard and determined. It is plain, then, that the application for departure must first be determined.
The review, undertaken by the Child Support Agency, and the very significant increase in child support payable (consequent, in turn, upon a reassessment of the husband’s income) also takes specific account of the matter lying at the heart of the ground for Departure relied upon in the present case. The review makes it clear that the amount of child support has been increased, not only because a review has been undertaken of the husband’s child support income relied upon, but also because of private school fees, and book and uniform costs for the children.
In order to establish that change, it was necessary for the wife to show:
… that she has extra costs for the education of the children and that the type of education being undertaken was within the mutual intention [with respect, more accurately, expectation] of both parents.
The combined school fees for the children, in excess of $7,500 per year were taken into account.
It can be seen, then, that the current assessment of child support takes account of the income from all sources of the husband (that is, investment income and the pensions earlier referred to) and also takes account of extra costs associated with private schooling being within the expectation of each of the parties.
It seems to me that, as a result, the wife does not establish a ground for departure from that most recent assessment. Even if a ground be established, it does not seem to me to be just and equitable or otherwise proper to make an order departing from that reviewed child support assessment.
A separate issue arises as to whether the assessed child support can be, and ought be, provided by way of lump sum.
Section 124 of the Assessment Act provides:
(1) Where:
(a)A carer entitled to child support or a liable parent makes an application under s 123(1)(a); and
(b) the court is satisfied that it would be:
(i)just and equitable as regards the child, the carer entitled to child support and the liable parent; and
(ii)otherwise proper;
to make an order that the liable parent provide child support for the child otherwise than in the form of periodic amounts paid to the carer entitled to child support;
the court may make the order.
The section goes on to enumerate specific matters to which the court should have regard (in addition to a consideration of whether such an order is “just and equitable” and “otherwise proper”). Section 124(2) provides:
(2) In determining the application, the court must have regard to:
(a)the administrative assessment in force in relation to the child, the carer entitled to child support and the liable parent; and
(aa)any determination in force under Part 6A (departure determinations) in relation to the child, the carer entitled to child support and the liable parent; and
(b)any order in force under Division 4 (departure orders) in relation to the child, the carer entitled to child support and the liable parent;
(c)whether the carer entitled to child support is in receipt of an income tested pension, allowance or benefit or, if the carer entitled to child support is not in receipt of such a pension, allowance or benefit, whether the circumstances of the carer are such that, taking into account the effect of the order proposed to be made by the court, the carer would be unable to support himself or herself without an income tested pension, allowance or benefit.
The factors potentially justifying a lump sum order can be seen to mirror those earlier outlined in respect of the lump sum order for spousal maintenance.
I have already referred to the expressed position of the husband, contained in one of the two very brief communications made by him, which are his sole contribution to these proceedings, which indicates that he is currently meeting child support liability of $2,034 per month ($508 per week), and that is being received by way of an authority voluntarily given by the husband to Suncorp so as to provide funds from a particular account. I am conscious that, as a result of orders made for settlement of property, the “clean break” between the parties as required by s 81 of the Act will be effected in a manner that will allow each of the parties to continue their post-separation lives.
I acknowledge the concerns by the wife that the husband will remove monies from Australia, and that there is the potential for that to occur unilaterally or without the capacity for her to ascertain information about either income or assets from the husband.
Equally, though, reorganisation of each of the parties’ lives post-separation has the potential to create changes in the respective positions of each them and the position of the children. In May 2014 (that is in less than 4 years time) the husband’s child support liability in respect of B will cease when he turns 18. At that point E will be 14½. All else being equal, the wife will have completed a course by which she hopes to improve her employment prospects (and, inferentially) her income-earning potential. The evidence indicates that the husband has accessed capital in the past and may well access capital in the future.
In all of the circumstances of this case, I am not persuaded that it is just and equitable and otherwise proper that the husband provide child support for the children otherwise in the form of periodic amounts.
I consider applicable the words of Chief Justice Bryant (when her Honour was Chief Federal Magistrate) in R & R (No. 1) [2002] FMCAfam153. Her Honour said:
… It is possible that there could be circumstances which might create an unfairness to the husband or to the wife, there is no other ability within [the specified period] to seek a Departure. Those conditions would have to be significantly different from the present. Any potential injustice however, can be overcome by providing that the husband deposit the appropriate lump sum into a Trust Account in the names of the wife and husband to be held by the solicitors for the wife, upon trust, to be paid to the wife annually in advance, the child support assessed by the Agency for that year. In the event that either party was successful in having the court, at some future time, depart from the existing orders, then the remaining funds will be available, and no potential injustice can arise. I am satisfied that if this occurs, it is just and equitable as between the parties and the child …
I consider that an order of this type in this case provides appropriate security against the manifestation of the concerns raised by the wife (which I consider to have a rational foundation given the circumstances of the husband’s participation in these proceedings and his attitudes otherwise expressed) whilst at the same time better effecting justice and equity by reason of the considerations earlier referred to.
In seeking to define the parameters of that order, I note that the current assessment provides for the sum of approximately $24,400 annually. That amount payable over the next four years until B turns 18, totals just short of $100,000. There are likely to be changes in average weekly earnings and the like during that time. There is also likely to be some fees attached to the maintenance of the account to which I have just referred and, conversely, the potential for interest to be earned.
Having regard to all of those matters, I consider it appropriate to order that the sum of $100,000 be quarantined and preserved in the manner earlier referred to, to secure the payment of periodic child support as assessed by the Child Support Agency from time to time.
I am aware that this sum, together with the sum earlier ordered in respect of lump sum spousal maintenance will reduce the capital sum available to the husband. I have taken that into account, as indeed I have taken into account the significant difference between the income currently earned by the husband, and that earned by the wife, the respective ages of the parties, and the fact that the wife is bearing the entire brunt of child-caring responsibilities with no other assistance from the husband, in arriving at a conclusion about the justice and equity, (and, otherwise, propriety) of the proposed orders.
The Wife’s Costs
The wife seeks an order that the husband pay her costs. Section 117(1) of the Act provides the general rule with respect to the payment of costs; each party shall bear their own.
Section 117(2A) sets out a number of matters to which the court should have regard in determining what order (if any) is to be made pursuant to s 117(2) which, in turn, makes it clear that the court has a discretion to make a costs order.
The wife deposes to having incurred costs in the sum of $32,110 inclusive of counsel’s fees and to an anticipated liability of a further $7,000 in and about the proceedings occurring on 13 July 2010.
On 30 November 2009, an order was made by this court that the sum of $38,300 be paid into the wife’s solicitors Trust Account on account of ongoing legal fees and that the payment of these monies be taken into account in these proceedings in such manner as the trial judge shall determine.
Ms Leszczuk deposes to that sum having been expended in respect of legal fees rendered in accordance with a costs agreement with the wife, together with outlays in respect of expert valuers and the like.
Ms Leszczuk deposes that, as at the date of the hearing before me, further costs have been incurred in the sum of $58,816 plus an additional $11,594 for “third party costs (being valuers fees, counsel’s professional fees and disbursements) as the latter, outlays are deposed to in respect of Citec searches, the issue of subpoenae, DHL Couriers, translator, international express costs, process serving costs etc and the like.
Total costs incurred by the wife to the date of the filing of her solicitor’s affidavit were $70,410.
The solicitor goes on to depose that this sum does not include “the work in progress which has not yet been billed, nor does it include costs of this affidavit being prepared, preparing for and attending at the hearing on 13 July and counsel’s professional fees for preparing for and attending at the hearing of the matter on 13 July”.
The financial circumstances of the parties have already been referred to in earlier contexts in these reasons.
It appears that the wife would rely upon the conduct of the husband in and about these proceedings, as being the principle foundation for an order for costs. It might also be argued that the necessity for at least some of the material placed before the court has arisen by reason of the failure of the husband to comply with procedural orders designed to effect his participation in these proceedings.
The wife deposes to what she says has been an excessive level of costs arising from “… the conduct of [the husband] and him intentionally failing to respond to my application and attend at the hearings of the matter on 24 August 2009, 19 October 2009, 30 November 2009 and 16 March 2010, having to prepare for the hearing on 13 July 2010.”
Whilst it is undoubtedly true that the wife has incurred costs as a result of that circumstance, it is by no means clear to me that significant additional costs have been incurred as a result. Indeed, if the husband had participated in the proceedings and contested them, it may well be that other costs would have been incurred by the wife.
Having said that, I accept that additional difficulties and expense were created for the wife by reason of the husband’s refusal to provide a Notice of Address for Service in Australia, so that effective service could be given expeditiously and quickly and, by reason of his non-participation in the proceedings, and a consequent lack of disclosure as otherwise required by the Rules, the wife has been put to significant extra expense in those specific respects.
It is, however, important to note that, in the list of the property of the parties or either of them, no “add-back” is made for the legal fees removed from the cash account of the parties, pursuant to the order of 30 November 2009. In the normal course of events, amounts paid by way of legal fees for one or both parties from capital or property otherwise available for distribution pursuant to s 79 of the Act would be added back as against the parties respective entitlements (see eg Chorn & Hopkins (2004) FLC 93-204).
Given that no such add-back is included in the wife’s pool of assets, the case, the husband has, in effect, contributed to the wife’s costs to the extent that the $38,300 was ordered and met from capital that would otherwise have formed part of the property of the parties. Its exclusion from the pool, amounts, in effect, to a contribution by the husband to the wife’s costs to the extent of approximately 40% of the amount. I don’t propose to make any additional order with respect to that sum.
The order sought by the wife must also, then, be seen in that context.
In the exercise of my discretion and bearing in mind: the general Rule enshrined in s 117(1) of the Act; the financial circumstances of each of the parties; the conduct of the husband failing or refusing to participate in the proceedings, the additional time, trouble and expense incurred by the wife by reason of the husband’s failure or unwillingness to participate in the proceedings, insofar as service and the ascertainment of the husband’s financial position is concerned, I consider that there should be an order for costs in favour of the wife.
However, those same circumstances ought not, in the circumstances of this case, sound in an order for the quantum sought. The affidavit of Ms Leszczuk should be seen as evidencing the total liability for costs (paid and unpaid) by the wife of about $45,000 (in addition to the $38,300 already referred to), in respect of which the wife claims $40,000.
In the exercise of my discretion, I consider it appropriate that the husband pay the sum of $20,000 toward the wife’s legal costs. I order accordingly.
I certify that the preceding one hundred and sixty-six (166) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy
Associate:
Date: 10 August 2010
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