Cabral and Pender

[2018] FamCA 847

FAMILY COURT OF AUSTRALIA

CABRAL & PENDER [2018] FamCA 847

FAMILY LAW – INTERIM PROPERTY – Spousal Maintenance and child support departure – Application to suspend the orders – Where the party paying is no longer in employment – Where the party paying was paid a significant redundancy payment – Just and Equitable

Child Support (Assessment) Act 1989

APPLICANT: Mr Cabral

RESPONDENT: Ms Pender

FILE NUMBER:   SYC 860 of 2018

DATE DELIVERED: 28 September 2018

PLACE DELIVERED: Parramatta

PLACE HEARD: Sydney

JUDGMENT OF: Le Poer Trench J

HEARING DATE: 21 September 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Gardiner

SOLICITOR FOR THE APPLICANT: Austin Giugni Martin Pty Ltd

COUNSEL FOR THE RESPONDENT: Mr Richards

SOLICITOR FOR THE RESPONDENT: Dettman Longworth Lawyers

Orders

1. Order six (6) made 4 April 2018 is suspended pending further orders.

2. On or before the expiration of seven days from the date hereof, the husband cause to be placed in an interest bearing bank account of his choice and in his sole name, the sum of $30,000. The husband is to thereafter, pending further order or the exhaustion of that sum, cause to be paid the following amounts:

   (a)The amount owing to the wife pursuant to order 6 of 4 April 2018 as at the date of this order.

   (b)The sum of $1,729 per week. The first payment to be made seven days from the date hereof and then every seven days thereafter.

   (c)The amount of any current Child Support Assessment payable in relation to the parties’ child X.

3. Other than meeting the payments required by this order together with any bank charges levied against the account, the husband is not to withdraw any other funds from the account created by him pursuant to order (2) hereof.

4. On the first day of November 2018 and on the first day of each month thereafter, until such time as the account has insufficient funds to meet any payment due pursuant to these orders, the husband is to send to the wife, by email, a copy of an up-to-date bank statement for the account created by order (2) hereof.

5. Upon the husband obtaining employment, he is to forthwith notify the wife of same, including providing her with a copy of any letter of employment which sets out his remuneration and other benefits and requirements. If there is no such letter, the husband is to provide the wife with details of his anticipated remuneration.

6. Upon the husband obtaining employment and notifying the wife of same, as required by these orders, the husband is to forthwith provide to the wife, in writing, an offer in relation to payment of interim spouse maintenance, (including to not pay) and the wife is to respond to that offer, in writing, within seven days of receipt of same. Thereafter, should it be necessary, either party may at their option and risk as to costs, relist on short notice, any application in relation to the continued suspension of order 6 of 4 April 2018 or any other application in relation to interim spouse maintenance.

7. In the event of the husband intending to access any of the funds he caused to be paid to the bank account of his partners’ mother Ms B, (namely $57,455) or in the event any of that fund is returned to him, the husband is restrained from expending or applying any of that fund, other than to deposit same to an interest bearing bank account in his name, without first giving the wife 14 days’ notice of his intention to do so.    

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT  PARRAMATTA

FILE NUMBER: SYC 860 of 2018

Mr Cabral

Applicant

And

Ms Pender

Respondent

REASONS FOR JUDGMENT

Introduction

1. Before the Court is an application filed by the husband seeking to suspend orders 6 and 7 of the orders made by this court on 4 April 2018. These are orders for payment of interim spouse maintenance and an order departing from an existing child support assessment. The husband also seeks that a fund of $30,000 be paid to the wife as a lump sum payment, or alternatively that sum be paid to an interest bearing deposit account to be used only for the purpose of paying to the wife a weekly sum of $1,729 as spouse maintenance and a payment to the Child Support Agency of $551 per week until such time as the Child Support Assessment is varied following a departure application to be made by the husband to the Child Support Agency.

2. The wife opposes that application and seeks an alternate order that the husband pay the wife a lump sum of $30,000 and that sum be accepted as up-front payment pursuant orders 6 and 7 of the orders of 4 April 2018.

Background

1. The husband and wife participated in a lengthy cohabitation and marriage prior to their separation. Their cohabitation commenced in September 2002. The parties separated on about 1 April 2016.

2. The parties have one child, X, who was born in 2011. The court record suggests the child sees the husband on weekends and stays overnight for one night at a time. The parties are still at issue about the time the child spends with the husband especially overnight time when the wife travels for work.

3. The wife is employed in the education sector. She has a stated income of $2,994 per week from that source. The husband is a public servant.

4. The wife commenced the proceeding by filing an Initiating Application on 18 February this year. The proceedings include both financial and parenting issues.

5. On 4 April 2018 the parties entered into consent orders which, inter alia, dealt with interim spouse maintenance and departure from the then operative Child Support Assessment. Relevant this dispute are order six and seven of the orders made 4 April 2018 is as follows:

   6.   That until further order, the husband pay to the wife by way of interim spousal maintenance the following;

   a.   The sum of $1,729 per week by direct credit to her Westpac Bank Account BSB … Acc No #93 with the first payment to be made on 6 April 2018, and

   b.   The sum of $211 per week by direct credit to her Westpac Bank Account BSB …Acc No #93 with the first payment to be made on 6 April 2018 for each week that the child is not attending school excepting during school holiday periods.

6. As can be seen from order 6(b) it is referring to a payment associated with the parties’ child. As such I asked the parties whether the order was, in fact, a child support order. I was assured by both parties that it related to additional costs which the wife incurred if the child was unable to attend school. The order was made, I was told, because there was a period of time when the child was refused entry to school during a time he was suspended from school. I accept in that circumstance that the parties are probably correct in contending that the order is part of spouse maintenance and not a child support payment.

7. Order 7 of 4 April 2018 is as follows:

   7. That pursuant to s.117 of the Child Support (Assessment) Act 1989:

   c.   The periodic rate of child support payable by the husband for the child be varied by setting the annual rate of child support at $28,652 per annum($551 per week);

   d.   That in addition to the periodic amount referred to in order 7(a) above the husband pay the following amounts;

   i.One half of the child’s Psychologists fees within 7 days of being served with an invoice from the wife by direct credit to her Westpac Bank Account BSB … Acc No #93 and the wife shall credit ½ of any amount that she receives by way rebate

   ii.One half of the cost of the child’s attendance upon the Neuropsychologist, [Ms C] by payment directly to her upon request for same.

8. As can be seen, order seven (7) is an order made under the power provided by s 117 of the Child Support (Assessment) Act 1989. As will be discussed later, the order sought by the husband for the suspension of that order is not an order mandated by the Child Support (Assessment) Act 1989.

9. Following the orders being made on 4 April 2018, the husband was informed by his employer that he was to be retrenched. He was notified by letter dated 18 June 2018 and the retrenchment was implemented on 17 July 2018 when he was paid a sum of $211,851. His employment was terminated from that time.

10. The wife opposes any order being made to suspend the operation of the orders numbered 6 and 7 made on 4 April 2018. She supports an order being made that she be paid a lump sum of $30,000 by way of advanced payment of spouse maintenance. She cannot bind the Child Support Registrar by consenting to an order which suspends or affects a child support order. She could accept a sum as an advanced payment of child support on the provision that she inform the Child Support Registrar that she had received that payment and request the husband be provided with a credit against his liability under the Child Support Assessment or otherwise (e.g. penalties and/or interest).

11. The wife submits that the husband should not be accepted as a witness of truth. She asks that the Court assess the husband’s actions towards the wife, post the orders of 4 April 2018, as devised by him to defeat the benefit to the wife of the order for payment of her spouse maintenance, which he consented to, on 4 April 2018. She submits that notwithstanding he received $211,851 net from the redundancy payment, he has applied those funds so that there remains only $60,000 as at the date of the hearing. The wife tendered a large number of pages of the husband’s bank statements where she identified payments which she said were excessive, wasteful or unjustified.

12. In the evidence before the Court is a copy letter from the husband’s solicitors to the wife’s solicitors dated 20 August 2018. The letter refers to a conversation which took place between the two lawyers during which the husband’s solicitors advised the wife’s solicitors the husband had been retrenched and received a lump sum redundancy payment. Notwithstanding the view the wife apparently holds of the husband that he is untrustworthy and possibly motivated to disadvantage her in the proceedings between them in this court, no action was taken to require the husband to either provide an undertaking as to how he would expend or not expend the funds nor, in the absence of such an undertaking, to seek an injunction against the husband restraining him from expending the fund.

13. The wife submitted that the whole of the remaining $60,000 fund of the husband should be applied to meet the orders 6 and 7 of 4 April 2018. Such an order would leave him with no identifiable means of support until he obtained further employment. He and his partner’s baby is due in November this year.

Conclusion

1. Both the applicant and respondent sought to address the application of the husband which was filed on 19 June 2018. That application sought to review the amount of interim spouse maintenance the husband should be paying to the wife. That application was made at a time when the husband was in employment. In my view that application was overtaken by the event of the husband losing his employment. It is not a necessary function of the court to now calculate what sum the husband should pay to the wife, as interim spouse maintenance, had he not lost his income.

2. The husband’s retrenchment payment was calculated by multiples of his weekly wage. The court was informed by the husband’s counsel that the redundancy payment was calculated to be 35 weeks of income at the rate he was paid at the time of the retrenchment. There were other payments added to that sum to provide him with a net sum (after deduction of PAYE taxation) of $211,851. As such it is reasonable to submit, as the wife does, that the husband should have put aside 35 weeks’ worth of payments he was required to meet under order 6 of the 4 April 2018 orders together with a sum sufficient to meet the Child Support Assessment at least during that 35 week period. Thus, it is submitted, with some force, that the wife’s financial needs, and those of the parties’ son, would have been secure for that period.

3. The husband submits that he has applied about one third of the retrenchment fund to meet the child support and spouse maintenance order. He points to the payments made post 17 July 2018 and identifies the following:

   ·$11,699 paid on 1 August 2018 (This amount shows as child support paid as “salary deduction”).

   ·$11,541 paid to Child Support Agency 20 August 2018.

   ·$13,500 paid last week to meet a “Third Party Debt Notice”.

   ·$30,000 offered to be paid with the husband’s orders sought

   ·$66,041 Total paid to wife and Child Support Agency post redundancy

4. If accurate, the above payment represents $30 per cent of the sum received.

5. The wife is critical of the husband having refused job offers already made, as reported in his affidavit of 3 September 2018. The husband’s counsel points out, for the assistance of the court, that the affidavit discloses no refusal by the husband for any job offer. The affidavit discloses the husband has never been offered a job, rather he chose not to apply for some of the positions he was informed about and which he disclosed in his affidavit. The husband’s counsel points out that the husband chose not to apply for those positions for a good reason as stated in the affidavit. In short he considered he would find a position better suited to the experience and work history he has enjoyed prior to his retrenchment. Ultimately time will tell if that was a good decision on his part.

6. In this case I am satisfied the husband has been retrenched from his employment. In those circumstances he received a payment of $211,851. Notwithstanding there appears to be a high level of acrimony between the parties (usually accompanied by a high level of suspicion about each parties’ motivations) no action was taken to require the husband to preserve a portion of his fund to meet the order of 4 April 2018 until he again obtained employment. The wife is critical of the husband applying $57,455 to assist his partner in being able to have her mother (Ms B) live in Australia. However, such expenditure is clearly defended by the husband as essential to enable his partner to continue in employment after the birth of their first child.

7. The husband had sought to have order 7 of 4 April 2018 suspended, however, that order is a child support departure order and the husband’s legal counsel could not identify the power under the Child Support (Assessment ) Act which enabled that order to be made. The husband, through his counsel, informed the court he will apply to the Child Support Agency for a departure from the current Child Support Assessment.

8. The wife argued that a sum greater than $30,000 should be preserved. She submitted that all of the husband’s available funds should now be preserved.  If that was to happen then it would be entirely unjust to prevent the husband access to the fund. Further, justice would have to dictate that as the order of 4 April 2018 was made on the basis of the parties financial circumstances, which existed at that time, the amount of the husband’s weekly income (less the income tax figure) would need to be paid out to the husband. The wife’s legal representative relied upon the earlier Financial Statement of the husband sworn 1 May 2018. That Financial Statement showed the husband’s income as $6,218 per week with a tax payment of $2,408. The payment which would be required to be paid to the husband, should he have access to the same income he had on 4 April 2018 would be $3,810. Further, as the amount required to support the husband from the fund would draw faster than the amount to be paid to the wife, and the Child Support Assessment combined, they would receive less than $30,000 before the fund of $60,000 was exhausted. It is thus beneficial to the wife that the course of action promoted by her, to preserve the whole of the $60,000 available fund, not be followed.

9. Another aspect of the Court making an order which provides for the creation of a fund of $30,000, as proposed by the husband, is that if the husband is able to find employment prior to the exhaustion of the fund (about 13 weeks) then he can meet the payment from his new income rather than from his capital. As such there is a greater measure of justice applied across the parties by the framing of the court order.

10. At the conclusion of the hearing I spoke to the parties directly about the litigation they are involved in with this court. I emphasised my view that the parties could not afford to litigate in this court. Already the husband has incurred or paid $57,000 in legal fees and he is advised the further conduct of the property case will incur fees of $50,000 to cover a three day hearing. The wife has paid $37,513 in legal costs and still owes $81,214 (a total expenditure of $118,727).  The money the wife has paid has been loaned to her by her father. She is advised that for a two day hearing, (to finalise the case), she can anticipate solicitor’s fees of $30,000 to $35,000 and counsels fees of $25,000. I note that, in my opinion, two days of final hearing time for this case, as proposed by the wife’s lawyers, is very ambitious. I note that at this time the parties are at issue on both financial and parenting aspects of the case.

11. In the event of the husband failing to secure employment by the end of this year he will have no cash available to pay legal fees. He will have no funds to pay spouse maintenance or child support. The consequence is that his child support departure application, should he make one, must be predicted to result in the husband paying no child support or, at worst for the wife, in the wife having to pay the husband child support.

12. The inability of the husband to be able to provide substantial financial support to the wife in the form of spouse maintenance, will likely have significant impact upon the wife. Her Financial Statement sworn 7 September 2018 shows she has an income of $3,140 per week and non-discretionary expenditure of $2,866 per week. That would leave her only $179 per week for ordinary living expenses. She sets out in her Financial Statement her reasonable but discretionary living expenses amount to $2,961 per week for the child and herself.

13. Both parties face a serious financial crisis if the husband fails to secure employment providing him with remuneration, at least to the level of that he had in April 2018, by the end of this year. Both need to immediately and seriously address the situation, plan for the worst case scenario and also resolve their outstanding litigation while they still have lawyers who are prepared to be engaged without immediate payment (provide the parties with credit). The husband claims his financial circumstances have changed significantly since 4 April 2018. Apart from having lost his job he now has a new partner to support together with a baby due in November this year.

Order to be made

1. The husband sought in his minute of order that he pay a lump sum of $30,000 either to the wife as a lump sum payment or alternatively as a fund from which the husband could authorise the payment to the wife, on a weekly basis, the amount she was to receive as an interim spouse maintenance order, (orders 4 April 2018) together with the payment of the current Child Support Assessment, whatever that may be until the fund is exhausted.   The husband in submission said his preference was to create the fund from which a weekly sum was to be drawn.

1. I consider it is in both parties’ interests to have the fund created from which to draw a weekly sum to be paid to the wife for interim spouse maintenance and also to pay the current Child Support Assessment. It is in the wife’s best interests because if paid a lump sum now she will no doubt be obliged to pay at least a significant portion of the fund to pay her outstanding legal costs and/or repay her debt to her father. It is in the husband’s interest because if he is able to obtain employment he can use his income to fund any continuing spouse maintenance order rather than his capital.

2. The order should prevent the husband from accessing the set aside sum of $30,000 other than to meet the payment prescribed by these orders and to meet the Child Support Assessment.

3. The wife was critical of the husband paying the sum of about $57,000 for the benefit and use of his partners’ mother Ms B. She says there is nothing in the evidence to say that money is irrecoverable or that it won't be repaid to the husband at his request. There is some legitimate criticism contained in that submission and although it appears unlikely the payment was part of an attempt to defraud the wife, as opposed to a legitimate payment for good reason, as asserted by the husband, I will restrain the husband from accessing any part of that payment without first giving the wife notice. 

4. It is also important for the husband to notify the wife as soon as he has employment. The details of the employment will also need to be disclosed so long as the property proceeding is still on foot. Each party will need to exchange offers of settlement and, if necessary, negotiate an outcome. If that can’t be achieved it will be necessary for the court to determine the dispute. The parties should be aware that unreasonable positioning in relation to the offers of settlement may well lead to an imposition of a costs order.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Le Poer Trench delivered on 28 September 2018

Associate: 

Date:  28 September 2018