BONDELMONTE & BONDELMONTE (NO. 2)
[2013] FamCA 725
FAMILY COURT OF AUSTRALIA
| BONDELMONTE & BONDELMONTE (NO. 2) | [2013] FamCA 725 |
| FAMILY LAW – INTERIM PROCEEDINGS – SPOUSE MAINTENANCE – Where the primary proceedings are between the wife and the husband to a marriage of approximately 14 years – Where the wife seeks an order for spouse maintenance in the sum of $1,066 per week – Consideration of whether the wife is unable to support herself adequately for any of the reasons set out in s 74 of the Family Law Act 1975 (Cth) (“the Act”) – Where the wife was the primary homemaker and parent during the marriage and has not worked in paid employment for many years – Consideration of whether the husband is reasonably able to maintain the wife – Where the threshold findings required by section 74 of the Act were satisfied – Analysis of what order for maintenance would be “proper” having regards to the matters set out in section 75(2) of the Act – Where the Court found that it was proper that the husband pay to the wife the sum of $1,000 per week by way of spouse maintenance. FAMILY LAW – INTERIM PROCEEDINGS – CHILD SUPPORT DEPARTURE – Where the husband and the wife have three children who have not attained the age of 18 years – Where the husband pays periodic child support to the wife at a rate assessed by the Child Support Agency – Where the wife seeks an order for departure from the administrative assessment of child support pursuant to section 117 of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”) – Application of the three-step process which is required when determining child support departure applications – Where the Court found that in the special circumstances of the case a ground for departure existed – Where the Court found that it was just and equitable and otherwise proper to make an order for departure. FAMILY LAW – INTERIM PROCEEDINGS – NON-PERIODIC CHILD SUPPORT – Where in addition to periodic child support the wife seeks an order that the husband pays non-periodic child support pursuant to section 124 of the Assessment Act – Where the husband already makes payments to the wife to cover certain expenses for the children and made an undertaking to continue to do so – Where the Court declined to make the order sought by the wife. |
| Child Support (Assessment) Act 1989 (Cth) Family Law Act 1975 (Cth) |
| Gyselman & Gyselman (1992) FLC 92-279 Saberton & Saberton [2013] FamCAFC 89 Wilson & Wilson (1989) FLC 92-033 |
| APPLICANT: | Ms Bondelmonte |
| RESPONDENT: | Mr Bondelmonte |
| FILE NUMBER: | SYC | 4839 | of | 2011 |
| DATE DELIVERED: | 16 September 2013 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Fowler J |
| HEARING DATE: | 30 August 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Batey |
| SOLICITOR FOR THE APPLICANT: | Broun Abrahams Burreket |
| COUNSEL FOR THE RESPONDENT: | Mr Schonell SC |
| SOLICITOR FOR THE RESPONDENT: | Karras Partners |
Orders
Pending further order the husband shall pay to the wife by way of spouse maintenance the sum of $1,000 per week; this sum is to be paid to the wife monthly in advance (the monthly amount being $4,333) and the first payment is to be made within four days of these Orders and then on the same date in each succeeding month.
Pursuant to section 117 of the Child Support (Assessment) Act 1989 (Cth) there shall be a departure from the administrative assessment of child support payable by the husband to the wife with respect to R (born on … June 1999), S (born on … April 2001) and T (born on … October 2004) (together “the children”), such that the rate of child support for the children in total shall be $1,200 per week; this sum is to be paid monthly in advance (the monthly amount being $5,200) and the first payment is to be made within four days of these Orders and then on the same date in each succeeding month.
The child support departure order made in Order 2 above will remain in force for a period of twelve months from the date of these Orders or until the final determination of the proceedings between these parties, whichever is the earlier.
The Court notes that the husband has undertaken to continue paying to the wife the sum of $1,635 per week for the children, which sum covers the following expenses for the children:
(a) school fees
(b) private health insurance
(c) school books and
(d) extra-curricular activities
In the event that the husband fails to make any of the payments listed in
Order 4 above, the wife is granted liberty to apply on 14 days’ notice to the Court for an order that the husband make those payments.
The wife’s application for an order for non-periodic child support under section 124 of the Assessment Act is dismissed.
The costs of these proceedings are reserved to the hearing.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Bondelmonte and Bondelmonte (No. 2) 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 4839 of 2011
| Ms Bondelmonte |
Applicant
And
| Mr Bondelmonte |
Respondent
REASONS FOR JUDGMENT
Introduction
The proceedings before the Court are interim ones in which the applicant, Ms Bondelmonte (“the wife”), seeks orders with respect to spouse maintenance and child support. The wife’s application for child support is two-fold: she seeks a departure from the current administrative assessment of child support and she seeks an order for non-periodic child support. Each of the wife’s applications are opposed by the respondent, Mr Bondelmonte (“the husband”).
The primary proceedings between the parties are ones in which the applicant wife seek orders with respect to, inter alia, property settlement, spouse maintenance and child support.
The proximate proceedings were initiated by the wife’s filing of an Application in a Case on 1 March 2013 (which was followed by her filing of an Amended Application in a Case on 23 April 2013). The husband also filed a competing Application in a Case on 1 March 2013.
The parties’ interim applications first came before me on 14 June 2013, however, on that date I formed the view that the proceedings could not be justly determined by the Court without some testing of the parties’ evidence through cross-examination. As a result, the proceedings were adjourned and ultimately heard over one day on 30 August 2013.
With respect to spouse maintenance, the wife seeks the following order as set out in her Case Outline Document dated 30 August 2013:
4.That pending further order the husband shall pay to the wife by way of spouse maintenance the amount of $1,066.00 per week paid to her monthly in advance (the monthly amount being $4,619.34 the first monthly payment to be made within 48 hours of these Orders)
With respect to child support, the wife seeks the following orders as set out in her Case Outline Document dated 30 August 2013:
5.That pending further Order and pursuant to Section 117 of the Child Support (Assessment) Act there be departure from the Administrative Assessment of child support payable by the husband to the wife such that the annual rate of periodical child support for the children shall be calculated at $2,156 per week (the monthly amount being $9,342.67 the first monthly payment to be made within 48 hours of these Orders).
6.That pending further Order and pursuant to Section 124 of the Child Support (Assessment) Act the husband shall provide the following child support to the wife for the benefit of the children (in addition to the periodic amounts referred to above) until each child attains the age of 18 years or completes secondary school, whichever is the latter, by way of payment of:
a.all private school costs of the children including but not limited to tuition fees, school uniforms, school footwear, school sports uniforms, school sports footwear, text books, sporting activities, camps and excursions;
b.as and when they fall due all gap medical, dental, optical, orthodontic, psychologist fees, counselling fees and other therapeutic fees for the children that are not covered by medical insurance for the children; and
c.all premiums to keep the children at the highest level of private health insurance.
7.That the husband pay the wife’s costs of and incidental to these proceedings.
The husband seeks that the wife’s applications with respect to both spouse maintenance and child support be dismissed.
It is noted that Orders 1 and 2 contained in the wife’s Case Outline Document were not pressed at the hearing and there was no evidence or submission put to the Court with respect to those orders. Order 3 contained in the wife’s Case Outline Document is already an existing order of the Court so it is unnecessary for the Court to make that order.
As to costs, these are interim proceedings and the Court is of the view that it is appropriate to reserve the parties’ rights to seek costs until after the conclusion of the primary proceedings.
Background
In 1963 the wife was born. She is currently 49 years old, soon to turn 50.
In 1966 the husband was born. He is currently 47 years old.
The parties commenced cohabitation in or around mid-1996 and married in September 1997.
There are three children of the relationship, currently aged 8, 12 and 14 years old. The parties’ first child, R, was born in June 1999; the second child, S, was born in April 2001; and the third child, T, was born in October 2004.
In June 1999 the wife ceased employment as a healthcare worker to take on the role of primary homemaker and parent.
In 2005 the parties moved into a property at C Street, Suburb B (“the Suburb B property”). The husband asserts that the Suburb B property was purchased for $4,902,000 by D Pty Ltd as Trustee of D Trust, of which the husband’s brother is the appointer and a principal beneficiary.
The parties lived at the Suburb B property from 2005 until they separated in April 2010, at which time the husband vacated the property. According to the husband, in 2005 he entered into a five-year lease of the property. Despite the parties’ separation and the expiration of the lease in 2010, the wife and children continued to live at the Suburb B property until earlier this year. The husband asserts that rental continued to accrue following the expiration of the lease and that rental arrears are now owed to D Trust.
In November 2012 the parties divorced. The wife commenced proceedings for, inter alia, property settlement under section 79 of the Family Law Act 1975 (Cth) (“the Act”).
The husband is currently involved in ongoing tax litigation with the Commissioner of Taxation in the Federal Court of Australia and the Administrative Appeals Tribunal (“the ATO proceedings”). As at February 2013, the Commissioner of Taxation claimed that the husband owed over
$3.2 million in respect of personal tax liabilities, including penalties and interest.
The wife presently lives in a unit which she owns in Suburb F (“the Suburb F property”). Until recently, all three of the parties’ children resided predominantly with her at the Suburb F property.
The husband presently lives at a property in Suburb G. On or around 12 August 2013 the child R changed his place of residence from the wife’s home in Suburb F to the husband’s home in Suburb G.
The evidence
The wife relied on the following documents:
a)Amended Application in a Case filed on 23 April 2013
b)Affidavit of the wife filed on 1 March 2013
c)Affidavit of the wife filed on 23 April 2013
d)Affidavit of Ms H filed on 29 August 2013
e)Financial Statement of the wife filed on 29 August 2013 (and the Court notes that earlier Financial Statements were filed by the wife).
The husband relied on the following documents:
a)Response to Application in a Case filed on 1 May 2013
b)Affidavit of the husband filed on 1 March 2013
c)Affidavit of the husband filed on 22 April 2013
d)Affidavit of the husband filed on 7 June 2013
e)Financial Statement of the husband filed on 28 august 2013 (and the Court notes that earlier Financial Statements were filed by the husband).
On 14 June 2013 and 30 August 2013, a number of documents were tendered and marked as exhibits in the proceedings. Those documents are:
·Exhibit 1: an AMP loan application for D Pty Ltd as Trustee for D Trust with documents related to a guarantee of that loan by the husband and wife
·Exhibit 2: documents from Perpetual Lenders Mortgage Services and AMP with respect to a loan to D1 Pty Ltd. On the Solicitor’s Certificate in this bundle of documents the husband and wife are listed as guarantors for the loan, together with D Pty Ltd as Trustee for D Trust and in its own right
·Exhibit 3: correspondence and bank statements relating to an AMP home loan account
·Exhibit 4: documents with respect to child support assessment from the Child Support Agency
·Exhibit 5: results of ASIC company extract searches for D Pty Ltd. The husband is shown to be a director and secretary of the company and he is the sole shareholder
·Exhibit 6: income tax returns filed by the husband in the USA for the years 2009, 2010 and 2011 for both State and Federal tax purposes
·Exhibit 7: a bundle of ING bank statements in the name of the husband produced by ING Bank Ltd under subpoena
·Exhibit 8: directions of this Court made on 12 December 2012 together with a bundle of correspondence between the parties’ solicitors.
As noted above it was in the Court’s view necessary for the parties’ evidence to be tested before a just determination could be made as to the applications before it. Accordingly, at the hearing on 30 August 2013 both the wife and the husband gave oral evidence-in-chief and were cross-examined.
Credit
The evidence of both the husband and the wife raised doubts as to the reliability of each of them.
The wife conceded some inaccuracies in her evidence and made admissions against her interest during cross-examination, notably with respect to her claimed expenses for the children.
The husband’s oral evidence, while truthful, gave the impression that what he told the Court was not the whole truth. He tended to take refuge in a very narrow and precise view of the questions asked of him and did not appear committed to a full and frank disclosure.
To the extent that it is possible, the Court’s findings as to credit will be evident from its findings on particular issues.
Spouse maintenance
Applicable law
Under section 74 of the Act, the Court may make a spouse maintenance order which it considers “proper”. In exercising jurisdiction under section 74, the Court shall take into account only the matters referred to in section 75(2).
Before the Court’s jurisdiction under section 74 can be triggered, however, a spouse’s right to maintenance must be established. The right of a spouse to maintenance is set out in section 72 of the Act as follows:
(1)A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c)for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
Section 72 operates as a threshold test in spouse maintenance applications: In the Marriage of Bevan (1995) FLC 92-600 (“Bevan”). The liability of one party to maintain the other only arises when the person seeking maintenance is unable to support himself or herself “adequately” and the person from whom they seek maintenance is “reasonably able” to maintain them.
The wife’s inability to support herself
In her affidavit filed on 1 March 2013 the wife asserted that she has not been in paid employment since the birth of R in June 1999. According to the wife, the husband told her that she did not need to work as her role was to care for the children. Before leaving the paid workforce in 1999, the wife had been employed as a healthcare worker. She has not since had any training or experience in that field.
Counsel for the wife submitted that, while the wife has not worked for many years, the expectation is that she may return to employment at some future date. It was further submitted that, notwithstanding that the wife may have a future capacity for employment, she has not worked in her profession for some time and may have difficulty returning to work in the future. It was also said that the wife’s potential to earn income in the future should not cancel out her entitlement to maintenance from the husband now.
The husband in his affidavit filed on 7 June 2013 asserted that the wife worked between 2001 and 2005 for the “[J] group of companies”. He further asserted that between 1999 and 2010 the wife started two businesses called “[Business A]” and “[Business I]”. He stated that he is not aware of there being any impediment to the wife gaining employment.
In response to those statements made by the husband, the wife deposed as follows in her affidavit field on 23 April 2013:
I attempted to create a business opportunity for myself importing [goods], known as “[Business I]”. I operated this business out of the [J] Pty Limited factory. When the factory burnt down I lost all my stockman (sic) and I ceased running [Business I].
[Business A] was a business that manufactured [goods]. I operated this with a friend. In total I estimate I sold 100 pieces. After the stock was stolen from a factory premises. I did not continue with [Business A].
With respect to the wife’s earning capacity, Counsel for the husband drew the Court’s attention to her concession during cross-examination that she did not intend to retrain or to look for any form of employment in the near future. As to that statement by the wife, it was said that:
… [Y]ou just can’t turn up at this court and say, well, I don’t intend to look for work and therefore you must construe that I have no capacity whatsoever to support myself.
Counsel for the husband also pointed to the fact that the wife at one point had in the order of $1.1 million or $1.2 million in her bank account and chose to place herself in a position of impecuniosity by using those funds to acquire a property. On this note, it was submitted that:
… [O]ne can’t then turn up and contend that one is unable to support oneself having created a situation by taking nearly $1.1 million and spending it as opposed to investing it and providing for a measure of return on one’s capital that would provide a measure of support.
In response to that submission, the Court notes that while the capital value of the parties’ assets may be a relevant consideration in determining an application for spouse maintenance, there is no requirement that the wife utilise all of her assets as a means of deriving income. As the Full Court commented in In the Marriage of Mitchell (1995) FLC 92-601 at 81,995:
The days are long gone when it is necessary for an applicant for maintenance to use up all of her assets and capital in order to satisfy the requirement that she is unable to support herself “adequately”. Where the line is drawn will depend upon the circumstances of individual cases.
In the circumstances of this case, the Court finds that the wife’s conduct in utilising those funds to purchase the Suburb F property was reasonable. Following the commencement of these proceedings, she found out that the Suburb B property in which she and the children had been living for many years (including the five years prior to separation) was not owned by her and the husband. She was also informed by the husband in March this year that she had no alternative but to vacate the Suburb B property. She thereafter sought appropriate accommodation for herself and the children, that being the Suburb F property which, she says, is “significantly smaller” than the Suburb B property. It also does not boast certain amenities that the children formerly enjoyed, such as a swimming pool and backyard.
With respect to her care and control of the children, the wife in her affidavit filed on 1 March 2013 asserted that it is her belief that she could not retain employment given the ongoing requirements of the children. She asserted that the children have “various health and educational needs” requiring her attention, those being that:
a)S is “very introverted” and has “difficulties with communication, depression, stuttering and social issues”
b)R has ADHD and “global learning issues” and
c)T has learning difficulties with mathematics.
Counsel for the husband submitted that the reality of the children’s medical and other needs is different to the picture which the wife has sought to paint. It was submitted that cross-examination of the wife revealed the true position with respect to the children, which is that R and S attend upon the doctor twice a year, T has no limitations on her capacity, and S attends upon a psychologist. On that basis it was said that there “could be no realistic suggestion that they are the reasons why [the wife] can’t support herself.”
The Court agrees with the submission made by Counsel for the husband to the extent that the health and educational needs of the children do not appear to form a reason as to why the wife cannot support herself adequately.
Counsel for the husband also raised the issue as to whether R is any longer a member of the wife’s household. The Court is aware that R moved from the wife’s residence to the husband’s residence on or around 12 August 2013.
There is insufficient evidence before the Court to find that the present arrangement for R will necessarily be permanent. What the Court does know is that, since separation in April 2010, R has lived predominantly with the wife. Further, based on the husband’s oral evidence as to his overseas travel requirements (which are connected to his employment and to his need to access documents in the Middle East for the purpose of the ATO proceedings), it appears that the wife will probably continue to play a primary role in R’s parenting in the future. This issue is discussed again later in these reasons.
Based on all of the above, the Court finds that there are barriers to the wife’s capacity to obtain appropriate, gainful employment at the present time, which fall within the ambit of the reasons listed in section 72. Specifically, apart from some apparently unsuccessful small business ventures, the wife has been out of the paid workforce for almost 15 years and this has left her in a position where she has little or no prospect of earning an income through paid employment based on her lack of recent training and experience. She also had the primary care of the parties’ three children who are all under the age of 18 years.
The Court’s finding that the wife is unable to support herself adequately is based on there being impediments to her earning capacity now and into the near future. It is not envisaged that those factors will continue indefinitely.
In reaching this conclusion the Court has had regard to relevant matters set out in section 75(2). Its consideration of those matters is discussed in greater detail below.
The husband’s ability to maintain the wife
With respect to the husband’s ability to pay spouse maintenance, the wife argues that on the state of his evidence it will be difficult for the Court to form any conclusive view as to what his income and expenses are.
Counsel for the wife pointed to a number of factors which, it is said, reflect the husband’s reasonable ability to maintain the wife. These factors include that:
a)the husband “by and large” appears to have had access to approximately half a million dollars from 30 June 2012 to 30 June 2013, based on the ING bank statements that became an exhibit
b)the explanations given by the husband as to the debts listed in his Financial Statement are questionable
c)the husband’s brother, who could have shed light on and corroborated the husband’s assertions, has not given any evidence
d)the husband has been unable to say how much the entities in which he is involved pay him, notwithstanding that he is involved in some 70 entities (either as a director, secretary or in some other capacity) from which he says he receives “benefits” and
e)the husband was able to gift to Ms U $30,000 yet tells the Court he is unable to pay for the utilities of the wife and children.
In summing up, Counsel for the wife submitted that if the husband were to at a later stage produce evidence of his inability to pay spouse maintenance in the sum that the wife seeks, he could bring an application to have such an order varied. To this end, the following submission was made:
[H]is evidence in respect of his own financial affairs just cannot be accepted. But if that is the case, and he chooses not to make a full disclosure, then your Honour should have no hesitation in respect of those cases, like Black & Kellner, Weir & Weir, in finding that if he chooses not to put a full disclosure before the Court, then the Court shouldn’t have any hesitation in finding that, in fact, his financial affairs would easily accommodate the amount of moneys that the wife seeks. If he, at some later stage, wishes to come along and put on proper documentation, as to his impecuniosity that he claims, that is a matter for him.
In response to the above, Counsel for the husband submitted that the task of the Court is to find that the husband has the capacity to comply with any order that it proposes to make, rather than to make an order and then see whether the husband can comply with it.
With respect to not calling the husband’s brother to give evidence, it was submitted in reply that the wife could have joined the husband’s brother to the proceedings but chose not to.
On the evidence before it, the Court finds that the husband is reasonably able to maintain the wife based on both his income and his financial resources. In reaching this conclusion, the Court has had regard to relevant matters in section 75(2). Its consideration of those matters is set out in greater detail below.
Determining an amount which is “proper”
Whilst the Court has found that the wife has an entitlement to spouse maintenance and that the husband is reasonably able to maintain her, it must now determine what order will be proper in the circumstances.
When exercising discretion under section 74 to make an order for spouse maintenance which is “proper”, the Court shall take into account only the matters referred to in section 75(2).
The Court’s consideration of matters under that subsection is set out below.
(a) The age and state of health of each of the parties
The wife is 49 years of age (turning 50 this month) and the husband is 47 years of age.
There is no evidence to suggest that the parties are in other than good health.
(b) The income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
The wife set out details of her financial position in a Financial Statement filed on 29 August 2013. In that document, the wife claims that her total average weekly income is $652.86.
It is to be noted that $326.98 of the wife’s weekly income is received from government benefits which, pursuant to section 75(3), must be disregarded when determining what level of spouse maintenance would be proper. The wife’s average weekly income for present purposes will therefore be taken to be $325.88, which is the amount she presently receives from the husband in child support payments.
The wife has no other income but notes in Part F of her Financial Statement that the husband pays $1,635 per week for the children’s expenses in addition to the assessed rate of child support which he pays her. This amount covers school fees, private health insurance, books for the children’s schooling and some extra-curricular activities.
Property owned by the wife is said by her to have a value of $998,571.16 and to comprise the following:
a)the Suburb F property valued at $850,000 and unencumbered
b)funds in a NAB account valued at $13,323.16
c)funds in an ING account valued at $248
d)a motor vehicle valued at $38,000
e)household contents valued at approximately $20,000 and
f)other personal property (namely jewellery, shares and handbags) valued at approximately $77,000.
The wife has no liabilities in her name. Other than the income and property listed above, there is no evidence that the wife has any financial resources available to her. She claims that she has interests in superannuation but that the value of those interests is not known to her.
The wife’s capacity for employment has already been discussed. The main barrier to her engaging in appropriate, gainful employment is that she has been out of the paid workforce for around 15 years and would need to undergo retraining and advance her skill set before being able to return to work of the nature that she used to perform. There appear to be no physical or mental barriers to the wife taking immediate steps to start that retraining process to the extent that her commitments to the children allow her.
In his Financial Statement filed on 28 August 2013 the husband claims that his average weekly income is $3,365. This income is derived wholly from the “[K] Trust” and includes trust distributions.
Counsel for the wife submitted that this figure does not include funds which have been paid into the husband’s ING account from “[L] Pty Ltd”. The husband’s ING bank statements were exhibited in the proceedings, showing deposits from L Pty Ltd, and he was questioned about those payments in cross-examination. His evidence was that he did not receive regular monthly payments of $10,000 from L Pty Ltd, as was put to him. According to the husband, his brother distributes funds to him and it is irrelevant to the husband where those funds come from. He said:
[W]here the money comes from is not really relevant – not particularly relevant to me whether my brother decides to distribute to me from his [K] trust or his [L] trust.
In the Court’s view, the husband’s lack of knowledge, alleged ignorance and his insouciance with respect to the sources of his income lacks credibility.
Property owned by the husband is said by him to be valued at $499,484 and to comprise the following:
a)funds held in bank accounts valued at $14,081
b)an investment loan to the wife in respect of legal fees relating to other proceedings valued at $415,403 (the wife disputes this loan)
c)household contents valued at approximately $20,000 and
d)other personal property (said to be contents in the wife’s possession) valued at approximately $50,000.
In addition to the above, in Part I of his Financial Statement the husband listed as “other real estate” a unit in California, USA (“the Californian property”). The husband asserts that he is the registered owner of the Californian property as nominee for E Partners but he claims that the value of his share in the property is nil. This is disputed by the wife.
The husband asserts that he has liabilities totalling $4,808,450 however this is also a point of some contention between the parties. The total gross value of the husband’s superannuation interests is $238,121.
The husband is employed as a company director at present and there appear to be no physical or mental barriers to his capacity for appropriate, gainful employment. It has been difficult for the Court to gain a clear picture of the nature of the husband’s role within each of the entities he is associated with, but it appears he has ample experience in managing and directing companies.
During cross-examination the husband said that he “look[s] after a very large number of entities” yet he found it difficult to answer financial questions in relation to some of those entities without being able to see documentation.
The husband travels extensively in his capacity as a company director, including to the USA almost every second month. He incurs expenses on his credit card for work travel but is reimbursed for those costs, which are paid for by trusts or entities which he says are in his brother’s control. As the husband explained, “[Mr V] makes the decision as to which entity will pay for it”.
The husband also receives non-cash benefits in the form of a mobile phone,
e-tag and petrol card from at least one entity, that being Company M of which he is presently a director.
(c) Whether either party has the care or control of a child of the marriage who has not attained the age of 18 years
There are three children of the marriage who have not yet attained the age of
18 years. Two of the parties’ children, S and T, live predominantly with the wife and spend time with the husband at other times. R presently lives with the husband, where he has been living since around 12 August 2013.
In her examination-in-chief, the wife said that the future arrangement with respect to R will be that he lives with her and spends alternate weekends plus one night per week with the husband. The husband contends that R will remain living with him permanently.
The husband was asked about the future arrangements for R during cross-examination and the following dialogue took place between him and Mr Batey:
Mr Batey:Now, when you say that [R] has come to live with you – and there seems to be some dispute about actually when – I thought you had said that you travel quite extensively for the business?
Husband: Yes, I do.
Mr Batey:And how many times a year would you travel for the business?
Husband: Between five and nine, has been the past few years.
Mr Batey:Five and nine. And that’s usually for, what, two to four weeks?
Husband: Generally, the – on average, the trips would be two, two and a half weeks. There has been a trip of six weeks, and there has been trips of a couple of days.
Mr Batey:Right. And what’s to happen to the care of [R] when you’re away on one of these trips?
Husband: That hasn’t been discussed yet, because at the moment, there’s no intention of me going anywhere at the moment. I don’t need to go anywhere.
Mr Batey: So you have no current plans to travel?
Husband:I always have plans to travel, and I always have bookings in the system, but they always get moved.
Mr Batey:All right. And the current booking in the system is what?
Husband: October.
Mr Batey:And how long is that for?
Husband: I think the return date is about three weeks.
On the current state of the evidence the Court is unable to find that R will or will not continue to live with the husband permanently. It is inclined, however, to accept the evidence of the wife over that provided by the husband for the reasons set forth below.
On the husband’s own evidence he travels regularly, including to the USA “almost every second month” and to the Middle East “many times a year”. His travel to the Middle East relates to the ATO proceedings. In relation to that travel the husband said as follows:
I’m required to go to [the Middle East] many times a year, depending on what is happening with the cases. The lawyers can ring me up in the afternoon and say, “We need you on a plane tomorrow because you need to go and do this or that.” There are issues that occur with … in terms of machinery that I need to go and look at or [goods] supply that I need to look at, and again requires me to go. That’s usually not as urgent, and I usually try and coordinate that with a trip to [the Middle East].
The periods in which the husband travels overseas appear to be relatively frequent, not entirely within his control and generally of a duration that would impact on his ability to care for a child who has not attained the age of 18 years. In the Court’s view, it could not be said that the husband would be capable of properly exercising the care or control of R, who is 14 years old, when he is so often required to travel outside of Australia.
(d) Commitments of each of the parties that are necessary to enable the party to support: (i) himself or herself; and (ii) a child or another person that the party has a duty to maintain
The husband has a commitment to support himself and the children. The wife has a commitment to support herself and the children. There are no other persons that the parties have a duty to maintain.
(e) The responsibilities of either party to support any other person
It is noted that the husband has a new partner with whom he lives, Ms U. Ms U receives an income, albeit modest at $500 per week, and it appears that the husband provides financial support to her on a regular basis. That said, the husband does not have a legal responsibility to support Ms U.
The wife does not have a responsibility to support any other person other than the children as noted under subheading (d) above.
(f) Subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under: (i) any law of the Commonwealth, of a State or Territory or of another country; or (ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia; and the rate of any such pension, allowance or benefit being paid to either party
Pursuant to subsection 75(3), the Court “shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.”
The Court here notes that it has disregarded the wife’s receipt of a family tax benefit and the Commonwealth Newstart Allowance in its consideration of what spouse maintenance order will be “proper”. As noted above, the amounts received by the wife from these benefits have been deducted from her income for the purposes of determining this application.
There is otherwise no evidence that either of the parties is eligible for any pension, allowance or benefit as described in subheadings (i) or (ii) above.
(g) Where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable
The parties are divorced and the mutuality and cooperation that was attendant between them during the marriage no longer exists. The standard of living which the parties and the children enjoyed prior to their separation was no doubt higher than that which they are enjoying now and can expect to enjoy in the future.
The wife in her affidavit filed on 1 March 2013 made the following assertion as to the standard of living which she and the children enjoyed during the marriage:
The children and I were never limited to any form of budget during the marriage. I enjoyed an extravagant lifestyle at [the husband’s] insistence. For example, [the husband] often handed me bundles of $100 notes to “go shopping.” With this cash I would purchase designer clothes, bags and shoes valued in the tens of thousands of dollars.
In assessing what standard of living will be “reasonable” in the circumstances of this case, the Court notes that there is no general rule that the pre-separation standard of living of an applicant should be maintained simply because the other party can afford to do so. This has been established by a number of cases: see Bevan; Wilson & Wilson (1989) FLC 92-033 (per Strauss and Nygh JJ).
In the majority of cases upon a breakdown of marriage there is a diminution of the standard of living for everyone, including children, of the marriage. The resources available to maintain the members of an intact family are normally insufficient to maintain those same individuals at the same level after the family has separated. The Court is of the view that this is one of those cases.
(h) The extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income
The wife refers to her lack of skills and training as a hindrance to her gaining appropriate, gainful employment. The Court is of the view that, if she were in receipt of spouse maintenance, she would be able to undertake a course of education or training to increase her potential to find employment.
It is noted, however, that the wife in cross-examination conceded that she had not applied for any jobs and does not intend to seek any form of employment. Necessity and a desire for a higher standard of living may well promote effort on the wife’s part in the future.
(ha) The effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant
The Court has considered whether any order which it makes for spouse maintenance will affect in any relevant way the ability of a creditor of the parties to recover their debt. It does not on the evidence believe that the order which it proposes to make will do so at this time.
(j) The extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party
The parties were in a relationship of cohabitation for approximately 14 years. For most of this period, the wife took on the role as primary parent and homemaker while the husband assumed the role of breadwinner.
In this case, there is no doubt that the wife made a significant contribution to the present income, earning capacity, property and financial resources of the husband. Owing in part to the wife’s role in the relationship and family, the husband is now in a far better financial position than her.
It has been said that the greatest thing a person can take from a marriage is an earning capacity and the Court is of the view that, in this case, the wife’s contribution to the husband’s earning capacity must be recognised accordingly.
(k) The duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration
As previously noted the parties cohabited for about 14 years and were married for a similar length of time.
On the wife’s evidence, she left the paid workforce in 1999 after the birth of R. Prior to that she was working as a healthcare worker, a field in which she has not since had any training or experience. The wife asserts that the husband told her that she did not need to work as her role was to care for the children.
The husband however asserts that he does not believe there is any impediment to the wife’s earning capacity. He asserts that she undertook work in the period from 2001 to 2005 and that she started two businesses between 1999 and 2010. That evidence has been discussed above.
Notwithstanding there being some contradictions in the parties’ evidence, the Court is of the view that the roles which were assumed by the parties during the marriage affected to a large extent the wife’ earning capacity.
(l) The need to protect a party who wishes to continue that party’s role as a parent
The parties’ present parenting responsibilities and arrangements have been discussed elsewhere. It is clear that the wife wishes to continue her longstanding role in parenting the children. It is also apparent that, whatever the stated wishes of the husband are, his travel would probably make it difficult to realise them.
(m) If either party is cohabiting with another person - the financial circumstances relating to the cohabitation
The husband is cohabiting with Ms U, whom he started going out with in September 2011. The husband reported in his Financial Statement that
Ms U’s average weekly income is $500 and he confirmed this figure in his oral evidence.
The husband was questioned on the circumstances relating to his cohabitation with Ms U and gave the following evidence:
a)he was not familiar with her financial circumstances
b)he does not know how much she contributes to the costs of living with the husband but it is “very little, if any.”
c)it is possible she could contribute to the costs of living with the husband
d)she and the husband have a joint bank account into which the husband transfers $2,000 per month and
e)in April 2013, when Ms U was out of work, the husband gifted to her half of the sale proceeds of his Porsche which amounted to $30,000.
(n) The terms of any order made or proposed to be made under section 79 in relation to: (i) the property of the parties; or (ii) vested bankruptcy property in relation to a bankrupt party
At this interim stage of the proceedings this subsection is not relevant.
(naa) The terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to: (i) a party to the marriage; or (ii) a person who is a party to a de facto relationship with a party to the marriage; or (iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or (iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii)
This subsection is not relevant.
(na) Any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage
This subsection is relevant to the Court’s determination given that the husband is presently liable to provide to the wife child support in the sum of $325.88 per week for all three children. This is the child support amount that was assessed by the Child Support Agency (“the CSA”) for the period commencing on
28 May 2013 and concluding whenever a new assessment is undertaken.
This subsection is also relevant because the wife seeks orders for child support departure together with orders for non-periodic child support. The outcome of those applications is relevant because they will determine the child support that the husband will be liable to provide in the future.
In determining what spouse maintenance order will be “proper”, the Court has taken into account the child support that the husband has paid to the wife to date, together with the orders for child support which it proposes to make.
Under the terms of the Court’s proposed orders, the husband will in the future be liable to pay to the wife:
a)$1,200 per week in periodic child support, as a departure from the assessed rate and
b)payments to cover the costs of the children’s school fees, private health insurance, school books and extra-curricular activities; at present these costs total $1,635 per week.
(o) Any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account
The Court has no additional comments to make here.
(p) The terms of any financial agreement that is binding on the parties to the marriage
This subsection is not relevant.
(q) The terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
This subsection is not relevant.
Determination
The wife seeks an order that the husband pay to her $1,066 per week paid to her monthly in advance (the monthly amount being $4,619.34).
In Part N of her Financial Statement filed on 29 August 2013, the wife claims that her average weekly expenses for herself are $1,026.
The wife was cross-examined on the topic of her claimed expenses in Part N and, while she made concessions with respect to inaccuracies in the column representing the children’s expenses, no concession was made by her for personal expenses. The wife also disagreed with the proposition put to her that her overall expenses at present are more than what they were during the course of the marriage. When asked if her Financial Statement overstates what her expenses are, the wife answered “no” (however, she agreed that it did not understate her expenses). The Court accepts that evidence of the wife as being accurate.
For all of the above reasons, the Court has determined that the sum of $1,000 per week represents an amount of spouse maintenance for the wife that is proper in the circumstances of this case.
Child support departure
The wife seeks an order for child support departure which would see the husband paying to the wife $2,156 per week (or $9,342.67 per month) in respect of the three children.
Currently the husband is paying $325.88 per week (or $1,417 per month) at the assessed rate of child support in respect of the three children. The amount that the wife seeks would therefore represent an increase of $1,830.12 per week.
The wife, in Part N of her Financial Statement, asserted that she spends $2,156 per week on the children. She was questioned on this aspect of her evidence in cross-examination and conceded that some of the expenses she had claimed were in fact being paid by the husband. The extent of the wife’s misrepresentations can be summarised as follows:
a)the $113 said to be expended on children’s activities per week is not being incurred by the wife
b)the $375 said to be expended on medical, dental and optical expenses are not being incurred at that quantum by the wife
c)the $257 said to be expended on school camps is not being incurred on a weekly basis by the wife but rather on an ad hoc and much more infrequent basis than her Financial Statement suggests.
Counsel for the husband also pointed to the assertion by the wife in her affidavit filed on 1 March 2013 that her expenses relating to the children were at that point in time only $1,493 per week (which, it is noted, did not include the children’s health, educational and extra-curricular expenses that the husband had been paying for).
Following those revelations, Counsel for the husband submitted to the Court as follows:
One gets to a figure that’s closer to something in the order of about $1100 as representing on a realistic basis what she would be spending on these children and that’s for three and there are only two in her care at the present moment in time.
The Court acknowledges at this point that the husband has a duty to maintain the child R who is presently living with him, having moved recently from the wife’s household.
There is evidence which suggests that R will change his ordinary place of residence back to the wife’s home. At this point, and for reasons already adumbrated, it is in the Court’s view on balance likely that the wife will have the care and control of R in the future.
Applicable law
Before making an order for a departure from administrative assessment of child support under the Assessment Act, the Court must be satisfied that it has jurisdiction to do so under s 116 of the Assessment Act.
There are two pathways to establishing jurisdiction under the Assessment Act; these were summarised in the recent Full Court decision of Saberton & Saberton [2013] FamCAFC 89 (“Saberton”) at [12]:
12. As is not in doubt, before an application for a departure order of the type sought by the wife can be made, the steps referred to in s 116(1)(a), (aa), (ab) or (c) of the Assessment Act must be complied with, or, having been satisfied that the provisions of s 116(1)(b) are met, a Court exercising jurisdiction under the Assessment Act may permit the application to proceed.
Section 116(1) of the Assessment Act reads as follows:
(1)A liable parent or a carer entitled to child support may, in respect of an administrative assessment of child support for a child, apply to a court having jurisdiction under this Act for an order under this Division in relation to the child in the special circumstances of the case if:
(a) all of the following apply:
(i)the Registrar has, under section 98E or 98R, refused to make a determination under Part 6A in respect of the administrative assessment;
(ii)an objection to the refusal has been lodged;
(iii)the Registrar has disallowed the objection; or
(aa) all of the following apply:
(i)a decision has been made in respect of the administrative assessment;
(ii)an objection to the decision has been lodged;
(iii)in making a decision on the objection, the Registrar has, under section 98E or 98R, refused to make a determination under Part 6A in respect of the administrative assessment; or
(ab)the SSAT has, under section 98E or 98R, refused to make a determination under Part 6A in respect of the administrative assessment; or
(b) both of the following apply:
(i)the liable parent or carer entitled to child support is a party to an application pending in a court having jurisdiction under this Act;
(ii)the court is satisfied that it would be in the interest of the liable parent and the carer entitled to child support for the court to consider whether an order should be made under this Division in relation to the child in the special circumstances of the case …
(c)in the case of a liable parent—the administrative assessment of child support payable by the liable parent for the child is made under subsection 66(1).
Counsel for the wife made no reference to subsections 116(1)(a), 116(1)(aa) and 116(1)(ab) as forming the basis for the Court’s jurisdiction to make an order for child support departure. In the Court’s view those provisions cannot therefore be the pathway to establishing jurisdiction in this case.
This is an interim matter in which proceedings for property settlement under section 79 of the Act are pending. In the special circumstances of this case, the Court is satisfied that it is in the interests of the husband (being the liable parent) and the wife (being the carer entitled to child support) for the issues that have been raised to be determined, given that the Court seeks to procure the resolution of this dispute, particularly in relation to children, at the earliest opportunity. The Court therefore finds that it has jurisdiction under section 116(1)(b) to make an order for child support departure.
The three-step process
Having established that it has jurisdiction to hear the wife’s application, the Court must be satisfied of the matters contained in section 117 of the Assessment Act. The Full Court in Saberton (at [58]–[60]) set out the steps that the Court is required to consider under section 117 and made the following comments at [63]:
63. It is well established by authority that in determining and granting an application for an order for departure from an administrative assessment, the Court must follow the three stage approach provided by the legislation and, when a non-periodic order is sought, the two steps in accordance with Part 7 Division 5 of the Assessment Act. Reference need only be made to cases such as Gyselman & Gyselman (1992) FLC 92-279 and those which followed to establish these points.
The three-step process referred to in the above passage is set out in section 117(1) of the Assessment Act and was also expressed by the Full Court in Gyselman & Gyselman (1992) FLC 92-279 (“Gyselman”).
The three steps can be summarised as follows:
1.it must be found that “in the special circumstances of the case” one or more of the grounds for departure listed in section 117(2) exists
2.the Court must then find that it would be “just and equitable” to make a departure order in accordance with the provisions of section 117(4)
3.the Court must also find that it is “otherwise proper” to make a departure order in accordance with the provisions of section 117(5).
Step one: establishing a ground for departure
The grounds for departure upon which an applicant may rely are listed in section 117(2) of the Assessment Act. Without repeating those grounds in full, it should be noted that each of the grounds is prefaced by the terms “in the special circumstances of the case”.
As to the effect of that clause, the Full Court has said that when making an order for child support departure the Court must provide reasons as to why the circumstances of the case are special and that the Court’s reasoning must go beyond a mere recital of those words: see Saberton at [59].
The meaning of the terms “in the special circumstances of the case” was considered by the Full Court in Gyselman and the following was said:
Whilst it is not possible to define with precision the meaning of that term, as a generality it is intended to emphasize that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the court will not interfere with the administrative formula result in the ordinary run of cases. In Savery’s case (p. 77,897), Kay J, adopting the view in Philippe and Philippe (1978) 90-433 at p. 77,202 in a difference context, said that “special circumstances” were “facts peculiar to the particular case which set it apart from other cases”. The approach to the interpretation and application of the particular grounds in s 117(2) must be guided by that qualification.
In this case the following matters are taken into consideration as matters which distinguish it from other cases, namely:
a)the unusually high financial resources available to the husband, including the provision of clear benefits to him from trusts which he says are controlled by his brother but in respect of which control there is no corroborative evidence (and the Court notes here that it is of the view that such evidence would have been available to the husband)
b)the husband’s support of Ms U who has an income and whom he does not have presently a duty to maintain
c)the lack of income presently derived by the wife and the unlikelihood of her deriving any income in the near future
d)the husband’s transfer to Ms U by way of gift $30,000 which might otherwise have been available for the provision of child support to the wife and
e)the husband’s reduction of outstanding liabilities and the consequent improvement in his financial position at the expense of the children being supported at an appropriate level, having regard to the standard of living which for these children is reasonable.
Based on those distinguishing features, the Court finds that the circumstances of this case are special in that they are sufficiently peculiar and out of the ordinary to warrant the Court’s interference with the administrative formula for child support assessed by the CSA.
Despite it being essential to the Court’s determination of applications under this division to find that at least one ground for departure exists, Counsel for the wife did not direct the Court to any ground or grounds on which she relies. Similarly, no specific ground or grounds could be found in the wife’s evidence.
In the Court’s view, the only ground thought to be applicable to the wife’s application is that which is set out in subsections 117(2)(c)(ia) and (ib) of the Assessment Act which reads as follows:
(c)that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:
(i) …
(ia)because of the income, property and financial resources of either parent; or
(ib) because of the earning capacity of either parent; or
(ii) …
In the Court’s view, given the unusually high financial resources available to the husband together with the benefits which he derives from various entities with which he is associated, the application of provisions of the Assessment Act to the children of this marriage would result in an unjust and inequitable determination of the level of financial support to be provided by him. This finding is sufficient to establish the ground for departure contained in subsection 117(2)(c)(ia).
Step two: the “just and equitable” requirement
After finding that one or more grounds for departure have been made out, the Court must embark on the second step of the process. For the purpose of this step, section 117(4) states as follows:
Matters to consider for purposes of subparagraph (1)(b)(ii)
(4)In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:
(a)the nature of the duty of a parent to maintain a child (as stated in section 3); and
(b) the proper needs of the child; and
(c)the income, earning capacity, property and financial resources of the child; and
(d)the income, property and financial resources of each parent who is a party to the proceeding; and
(da)the earning capacity of each parent who is a party to the proceeding; and
(e)the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i)himself or herself; or
(ii)any other child or another person that the person has a duty to maintain; and
(f)the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(g)any hardship that would be caused:
(i)to:
(A) the child; or
(B) the carer entitled to child support;
by the making of, or the refusal to make, the order; and
(ii)to:
(A) the liable parent; or
(B)any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order; and
(iii)to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.
In Gyselman the Full Court commented on potential overlap in the considerations required by section 117 and made the following comment at 79,078:
… [S]ome of the matters listed in sub-section (4) may overlap with matters already considered under sub-section (2) and some of the paragraphs in sub-section (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 sub-section (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 of the individual case and the analysis already performed under sub-section (2).
As such, in considering the matters it is required to consider under subsection 117(4) the Court will not repeat its analysis of matters already considered in these reasons (especially given that the spouse maintenance application required that some of those factors be considered):
a)Each of the parents has a duty to maintain a child as set in section 3 of the Assessment Act.
b)Section 117(6) of the Assessment Act is relevant to the Court’s determination of the “proper needs” of the children. It states that the Court must have regard to the manner in which the children are being, and the manner in which the parents expected them to be, cared for, educated and trained. The three children attend a private high school in Sydney’s Eastern Suburbs. There appears to be no dispute between the parties about the manner in which the children are being educated or in which they expect the children to be educated. There was a suggestion made by Counsel for the husband in his cross-examination of the wife that she is expending more on the children now than she did during the marriage. The wife denied this proposition and the Court is unable to find that the suggestion is true at this point. The wife asserts in her affidavit filed on 1 March 2013 that she and the children “were never limited to any form of budget during the marriage.” The wife says that she lived an extravagant lifestyle at the husband’s insistence and it appears that the same would have been the case for the children. The Court must also pursuant to section 117(6) consider any special needs of the children. As discussed earlier in these reasons, the wife asserted in her affidavit material that the children have “various health and educational needs that require [her] time and attention”. The Court here takes note of those needs, which appear to be more pronounced for S and R than for T.
c)The subject children have no income, earning capacity and financial resources of which the Court is aware.
d)The income, property and financial resources of the parties were discussed earlier in these reasons.
da) The parties’ earning capacities were discussed earlier in these reasons.
e)The commitments of the parties to support themselves and the children were discussed in the Court’s consideration of section 75(2)(d) of the Act.
f)The direct costs incurred by the wife in respect of the children are set out in Part N of her Financial Statement and said to be $2,156 per week. As noted above, the wife conceded in her cross-examination that her expenses in some categories were inaccurate. In submissions, Counsel for the wife provided no updated figure to account for these inaccuracies, save for a concession that $133 might have been conceded by the wife. In the Court’s view, cross-examination of the wife revealed that the total figure representing the wife’s inaccuracies in Part N would be much higher than that and reduce what her actual expenses are to a total sum in the vicinity of $1,212. That figure was reached by deducting from the claimed sum of $2,156 the following amounts:
i)$113 to account for the “Children’s activities” which the wife admitted she is not paying.
ii)$275 to account for the concession that the wife is not paying for therapy and ADD specialist fees which she claimed under the category “Medical, dental and optical”. The wife clarified that she in fact pays for visits to the local doctor and for half of the costs of R and S’s braces.
iii)$250 to account for the wife’s concession that the “Holidays (children’s camp fees)” are not paid weekly and that this year the wife has paid only $240 for one holiday camp for T. That would amount to just over $5 per week.
iv)$306 to account for the wife’s inclusion in Part N of costs that she paid for house repairs at the Suburb F property as these are retrospective costs.
There is no evidence of any indirect costs that the wife is incurring or might incur in relation to the children.
g)The Court now must consider the question of hardship. It is of the view that there would be significant hardship caused to the wife and to the children if the Court were to refuse to make an order for child support departure. The wife’s costs for the children are far greater than the amount she presently receives from the husband under the child support assessment, which is $325.88 per week. As to potential hardship caused to the husband by the making of a child support departure order, the Court is not of the view that an increase in child support would cause him hardship, based on the income which he says he earns from the K Trust together with the Court’s finding that, in addition to that income, he has significant financial resources available to him.
Based on a consideration of the factors set out above and pursuant to section 117(4) of the Assessment Act, the Court has come to the view that it would be just and equitable, having regard to the circumstances of the children, the wife and the husband, to make an order for child support departure.
Step three: whether it is “otherwise proper” to make an order
The third step that the Court must consider is whether it would be otherwise proper to make an order. For the purpose of this step, section 117(5) states:
(5)In determining whether it would be otherwise proper to make a particular order under this Division, the court must have regard to:
(a)the nature of the duty of a parent to maintain a child (as stated in section 3) and, in particular, the fact that it is the parents of a child themselves who have the primary duty to maintain the child; and
(b)the effect that the making of the order would have on:
(i)any entitlement of the child, or the carer entitled to child support, to an income tested pension, allowance or benefit; or
(ii)the rate of any income tested pension, allowance or benefit payable to the child or the carer entitled to child support.
Section 3 of the Assessment Act states that:
(1)The parents of a child have the primary duty to maintain the child.
(2)Without limiting subsection (1), the duty of a parent to maintain a child:
(a)is not of lower priority than the duty of the parent to maintain any other child or another person; and
(b)has priority over all commitments of the parent other than commitments necessary to enable the parent to support:
(i)himself or herself; and
(ii)any other child or another person that the parent has a duty to maintain; and
(c)is not affected by:
(i)the duty of any other person to maintain the child; or
(ii)any entitlement of the child or another person to an income tested pension, allowance or benefit.
The husband and the wife being the parents of the children in this case clearly have a duty to maintain the children. They do not have duties to support any other person other than, in the husband’s case, his duty to maintain the wife. The husband’s duty to maintain the children is not of lower priority than his duty to maintain the wife but it has priority over all other commitments other than commitments necessary to support himself and the wife.
The Court must have regard to the effect of any departure order it might make on the rate of the wife’s government benefits, namely her Family Tax Benefit and the Commonwealth Newstart Allowance.
There is no evidence which enables the Court to determine precisely the effect that the making of a child support departure order may have on the wife’s entitlement to the government benefits which she receives, or the effect it may have on the rate of the income-tested benefits she receives. If, however, a child support departure order were to affect her eligibility for those benefits, or if it were to lessen the rate that she receives, the Court is of the view that it would still be in the best interests of the wife and the children to make such an order.
Based on the above considerations in the circumstances of this case the Court determines that it is otherwise proper to make an order for child support departure.
Determination
For all of the reasons above, the Court has concluded that it will make an order for departure from the assessed rate of child support such that the husband will be liable to pay to the wife $1,200 per week in total (which amounts to $400 per child per week) in periodic child support.
The husband submits that, in the event that an order for child support departure is made, it should have effect for a period of no longer than 12 months or until the final determination of the proceedings between the parties, whichever is the earlier. The Court agrees with that submission and this will be reflected in the order that it makes.
Non-periodic child support
Further to her proposed order for child support departure, the wife seeks an order that the husband pay non-periodic child support until each of the children attains the age of 18 years for the following expenses:
a)all private school costs, including but not limited to tuition fees, school uniforms, school footwear, school sports uniforms, school sports footwear, textbooks, sporting activities, camps and excursions
b)as and when they fall due all gap medical, dental, optical, orthodontic, psychologist fees, counselling fees and other therapeutic fees for the children that are not covered by medical insurance for the children and
c)all premiums to keep the children at the highest level of private health insurance.
As noted above, the husband presently pays $1,635 per week to cover the children’s school fees, private health insurance, school books and some extra-curricular activities.
Applicable law
Part 7 Division 5 of the Act relates to orders for the provision of child support paid to a carer otherwise than in the form of periodic amounts. Relevantly, section 122 states that:
This division applies where a carer entitled to child support wants a liable parent to provide, or a liable parent wants to provide, child support for a child otherwise than in the form of periodic amounts paid to the carer entitled to child support.
The wife, who is entitled to child support, wants the husband to provide child support otherwise than in the form of period amounts. Such an application would ordinarily be governed by the provisions of sections 123 and 124 of the Assessment Act.
In this case, however, the husband has been voluntarily paying for the expenses which are referred to in the wife’s proposed order. That is, he currently pays for the children’s school fees, private health insurance, school books and extra-curricular activities. The husband’s payment of these expenses is over and above his assessed child support payments.
At the hearing, Counsel for the husband submitted to the Court that the husband undertakes to continue to pay for the expenses listed above. Given that these expenses are presently being met and the husband has undertaken to continue to make them, which undertaking is enforceable, the Court is not inclined to make an order in circumstances where payments are being made voluntarily and where the amount being paid appears on the evidence to be appropriate.
As such, the Court will make a notation in the orders which reflects the husband’s undertaking. It will also grant to the wife liberty to apply to the Court for a further order should the husband fail to meet any of those expenses.
The wife’s application on that basis for non-periodic child support will be dismissed.
I certify that the preceding one-hundred and fifty-nine (159) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler delivered on 16 September 2013.
Associate:
Date: 16 September 2013
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
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Remedies
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Jurisdiction
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Procedural Fairness
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