CARSON & WALTERS
[2017] FamCA 330
•18 May 2017
FAMILY COURT OF AUSTRALIA
| CARSON & WALTERS | [2017] FamCA 330 |
| FAMILY LAW – PROPERTY – DE FACTO RELATIONSHIP – where the parties were in a de facto relationship for the purposes of Part VIIIAB of the Family Law Act 1975 (Cth) (‘the Act’) – where the parties seek property settlement orders pursuant to s 90SM of the Act – where the de facto husband made significant financial contributions during the relationship – where the de facto wife was primarily responsible for caring for parties’ three children – where the parties agree that contributions during the relationship ought to be treated as equal – where, post-separation, the de facto husband earnt significant income in his profession and where he received significant money when he departed one international professional firm and became a partner in another international professional firm – whether it would be just and equitable to make adjustments to the parties’ current legal and equitable interests – where it is just and equitable to make an adjustment – consideration of what adjustment ought be made – where the financial contributions post-separation favour the de facto husband – orders made that the property pool be distributed in the proportion 65:35 per cent in favour of the de facto wife – delay in sale of real property and permission for one or other party to bid at auction – delay in payment of capital. FAMILY LAW – CHILD SUPPORT – application by de facto wife for a departure from administrative assessment of child support to provide that the de facto husband pay child support for each of the parties’ three children – Order made that the de facto husband pay child support at the rate of $3,400 per month (annually indexed to the Child Support Inflation Factor and making a combined total of $10,200 per month) plus other expenses including private school fees. FAMILY LAW – SPOUSAL MAINTENANCE – Application for spousal maintenance by de facto wife – Application granted in circumstances where de facto wife has established threshold test in establishing reasonable needs and where de facto husband has the financial capacity to meet the de facto wife’s reasonable needs – order made. |
| Family Law Act 1975 (Cth) |
Child Support Assessment Act (1989) (Cth) s 116
Norton & Locke [2013] FamCAFC 202
Gollings & Scott (2007) FLC 93-319
Harris & Ellis [2011] FamCAFC 90
Bevan & Bevan (1995) FLC 92-600
| APPLICANT: | Ms Carson |
| RESPONDENT: | Mr Walters |
| FILE NUMBER: | SYC | 79 | of | 2016 |
| DATE DELIVERED: | 18 May 2017 |
| PLACE DELIVERED: | Hobart |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Benjamin J |
| HEARING DATE: | 23, 24 & 25 January 2017 – final written submissions dated 16 February 2017. |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Dickson QC |
| SOLICITOR FOR THE APPLICANT: | Watts McCray Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Schonell SC |
| SOLICITOR FOR THE RESPONDENT: | Barkus Doolan Family Lawyers |
Orders
IT IS DECLARED
A de facto relationship within the meaning provided in the Family Law Act 1975 (Cth) (‘the Act’) existed between Mr Walters (‘the de facto husband’) and Ms Carson (‘the de facto wife’) from about December 1999 until they separated on 1 February 2014.
IT IS ORDERED
The de facto husband shall pay to the de facto wife the sum of $988,681 (‘the payment’); such payment to be made contemporaneously with settlement of the sale of A Street, Suburb L (‘the L property’) and, if available, from the de facto husband’s share of the proceeds of sale of the L property.
The de facto wife and de facto husband do all things and sign all documents necessary to place the L property on the market for sale by auction, with such auction to occur on a date in February 2018 to be agreed by the parties or in the absence of agreement determined by the selling agent and subject to the following:-
a.Both the de facto wife and the de facto husband shall each be permitted to bid at the auction of the L property and if either the de facto wife or the de facto husband acquire the L property on such sale the acquisition is to be treated as being made pursuant to these orders;
b.Pending sale of the L property the de facto wife shall have sole right of occupation and enjoyment of the L property and the de facto husband shall not enter upon the property without the consent of the de facto wife;
c.The de facto wife shall cooperate in every reasonable way with the listing agent in order to present the L property for sale including, but not limited to, the following and without limiting the generality of the following:-
i.making a key available to the listing agent to access all areas of the L property;
ii.allowing and permitting access to all areas of the L property by all photographers and personnel involved in marketing the L property for sale, at all reasonable times as may be requested by the listing agent on behalf of such person(s);
iii.allowing and permitting inspections of all areas of the L property by prospective purchasers in the company of the listing agent, and the listing agent, at all reasonable times as requested by the listing agent;
iv.ensuring that the L property and its surrounds are presented in a neat and tidy condition at the time of inspection by prospective purchasers and the listing agent; and
v.doing nothing to hinder or prevent a sale being negotiated and effected.
d.The repayments on the mortgage over the L property shall continue to be met from funds standing in the Joint ANZ Bank Account (Account No …82) (‘the offset account’);
e.The solicitor acting on the sale shall be the person, partnership or incorporated legal practice agreed by the parties or, in the event that there is no agreement, such person as is nominated by the President of the Law Society of NSW at the request of either party;
f.The L property shall be listed with a real estate agent/auctioneer agreed by the parties and in the event that there is no agreement, then such agent/auctioneer as is nominated by the President of the Real Estate Institute of NSW at the request of either party;
g.The reserve price on the auction and any following auctions of the L property shall be as determined by agreement of the parties and if they are unable to agree then it shall be at the value ascribed to it by Mr C the single expert real-estate valuer in these proceedings, and if the property does not sell such lesser price as agreed by the parties and in the absence of agreement then as recommended by the said single expert at the request of either party; and
h.Liberty be reserved to the parties to apply to the court on 7 days notice in the event of a dispute as to the terms and conditions of the sale.
Upon settlement of the sale of the L property, the proceeds of that sale be consolidated with the offset account and be applied:-
a.First; to pay all legal costs and disbursements on the sale, adjustments of rates etc., commissions and expenses of the sale, including any agreed costs of preparing the property for sale and costs (if any) associated with the appointment of a solicitor, real estate agent/auctioneer or the determination of reserve price by the said single expert;
b.Second; to discharge the mortgage secured over the L property;
c.Third; the balance be divided as to 65 per cent to the de facto wife and 35 per cent to the de facto husband;
d.As to the 35 per cent payable to the to the de facto husband, the wife shall be entitled to be paid from that sum all or as much as is available to satisfy the payment ($988,681) due her by the de facto husband pursuant to Order 2 above; and
e.In the event the payment is not made or wholly made by the de facto husband at the date of completion of the sale of the L property, then interest shall commence to run on so much of the payment as is then outstanding at the rate prescribed by the Family Law Rules 2004 (Cth).
Within twenty one (21) days of the date of this order the de facto husband shall transfer 200,000 Qantas Frequent Flyer points from his frequent flyer account to each the children’s respective Qantas Frequent Flyer accounts, being a total of 600,000 points. The de facto wife alone is permitted to operate the children’s Qantas Frequent Flyer accounts and redeem those frequent flyer points on the respective children’s flights.
As against the de facto husband, the de facto wife is the sole owner of the following artwork:-
a. … dot painting;
b. … dot painting; and
c. … Navigational Chart.
As against the de facto wife, the de facto husband is the sole owner of the following artwork:-
a. – h. [details of artwork omitted for publication purposes]
Within fourteen (14) days from the date of this Order the de facto wife is to provide two lists of the following artwork to the de facto husband for him to determine which list of items he wishes to retain, the de facto husband shall notify the de facto wife of his election within a further period of fourteen (14) days and the de facto wife is to make available to the de facto husband such artwork for collection in addition to the artwork set out in the preceding order within one month:-
a. – o. [details of artwork omitted for publication purposes]
and as against each other the de facto husband will be the sole owner of those listed artworks and the de facto wife shall be the sole owner of the artworks remaining in her possession.
The de facto wife shall within fourteen (14) days from the date of this Order cause the Impressionist print to be made available for collection by the de facto husband at his own expense, if it has not already been collected.
The de facto wife shall within fourteen (14) days from the date of this Order cause the de facto husband’s clothing, prizes, trophies, awards, degrees and birth certificate to be made available for collection by the de facto husband at his own expense.
The de facto wife shall within fourteen (14) days from the date of this Order cause the de facto husband’s photographic prints prepared from photographs taken by the de facto husband, and all photographs, books and effects which he owned at the time he and the de facto wife commenced living together to be made available for collection by the de facto husband at his own expense.
The parties shall have liberty to apply to the Court in the event the parties disagree in respect of the return of specific items of personality; such leave to be available for a period of three (3) months from the date of this Order.
Within seven (7) days of receipt of each the repayments of each capital due to him in both May 2017 and May 2018 from the US firm partnership of the which the de facto husband was a partner:-
a. the de facto husband shall provide to the de facto wife an account of the precise sum which he receives in both United States dollars and Australian dollars together with copies of all documents available to him showing the payments and the calculation of such payments; and
b. The de facto husband shall pay to the de facto wife in Australian dollars the sum equivalent to 65 per cent of each such payment.
The de facto husband shall be responsible to pay in their entirety the fees of Mr D, Mr C and Ms E; and the de facto wife shall not be required to further contribute to such fees. This Order shall dispense with the compliance of any Rule under the Family Law Rules 2004 (Cth) as may otherwise conflict with the intent of this Order.
As against the de facto husband and save as is otherwise provided in these orders, the de facto wife shall retain all interest in and entitlement to all property now in her possession or control, including but not limited to:-
a. All funds standing in bank accounts in her sole name;
b. Shares held in her sole name;
c. Motor vehicles registered in her sole name;
d. Furniture and contents in her possession or control;
e. Other personal property in her possession or control including the photographic equipment referred to in annexures to the de facto husband’s trial affidavit (Exhibit 7 - page 132, E1 to E8);
f. Interests in life insurance policies in her sole name;
g. Superannuation funds standing in her sole name; and
h. Qantas Frequent Flyer points standing in her name.
As against the de facto wife and save as is otherwise provided in these orders, the de facto husband shall retain all interest in and entitlement to all property now in his possession or control, including but not limited to:-
a.the N property owned by him;
b.the [English professional firm] LLP Capital Contribution;
c.the de facto husband's bank funds;
d.the Telstra Corporation Ltd shares;
e.the VW motor vehicle;
f.the Nissan motor vehicle;
g.all furniture and contents, including artworks, already in the possession of the de facto husband;
h.all rental bond monies repayable to the de facto husband;
i.the remaining Qantas Frequent Flyer points standing in his name, after his compliance with order 5;
j.all monies standing to the credit of the de facto husband in the Barkus Doolan Trust Account as at the date of these Orders; and
k.the de facto husband's superannuation entitlements.
Maintenance
The de facto husband shall pay the following by way of maintenance for and to the de facto wife:-
a.the sum of $923 per month on the first day of each calendar month (monthly in advance) to a bank account as she shall direct, until the last day of the month in which the sale of the L property is completed; and
b.the sum of $1,174 per month from the first day of each calendar month following the completion of the sale of the L property until 31 December 2025; such payments are to be monthly in advance to a bank account as the de facto wife shall from time to time direct.
Child Support
Pursuant to s 117 Child Support (Assessment) Act1989 (Cth) (‘the Assessment Act’), the current child support assessment between these parties is varied to provide that de facto husband shall pay to the de facto wife by way of monthly periodic child support of $3,400 for each of P (born … 2006), F (born … 2008) and R (born … 2013) (‘the children’) making a total of $10,200 per month, and:-
a.This rate of child support commences as and from the date of this order;
b.This child support is to be paid by a pro rata payment in the first month, then the full amount to be paid in advance on the first day of each calendar month on a monthly basis, until each of the children turns 18 or completes secondary schooling in the year the child attains the age of 18 years, whichever is the later.
c.This periodic child support shall be varied on 1 July in each year (commencing 1 July 2018) by increasing the amount payable by the “Child Support Inflation Factor” calculated with reference to the annualised MTAWE figure, as used by the Child Support Agency (>
Pursuant to s 124 of the Assessment Act, the de facto husband shall in addition to periodic child support pay or reimburse to the de facto wife, the following non periodic expenses in respect of the children:-
a.The youngest child’s pre-school fees, all school fees including private school fees, levies and other compulsory education-related costs and expenses, from the date of these Orders for the three children until each child attains the age of eighteen years or completes the final year of his or her secondary school in the year of his or her eighteenth birthday (whichever is the later) including but not limited to all:-
i.school fees, enrolment fees, non-refundable deposits, tuition fees and levies, reasonable levels of school uniforms, school shoes, school sports uniforms, school sports shoes, local excursions including school camps;
ii.compulsory and recommended textbooks, compulsory school computers, compulsory school music equipment, school recommended additional classes, school requested sporting equipment; and
iii.other compulsory parent contributions, including but not limited to such things as building levies and the like.
b.Private health and hospital insurance premiums for each of the children at the current rate of cover and with the current or similar provider, until each child attains the age of eighteen years or completes the final year of his or her secondary school in the year of his or her eighteenth birthday (whichever is the later);
c.Ninety per cent of any gap in medical, dental and optical expenses, including any treatments or medications prescribed by the children’s treating General Practitioner or other specialist health provider, ‘equipment’ such as braces, spectacles, prescription sunglasses, or contact lenses, psychological or other therapeutic expenses until each child attains the age of eighteen years or completes the final year of his or her secondary school in the year of his or her eighteenth birthday (whichever is the later);
The expenses referred to at Order 19 above shall not be expenses for which the de facto husband shall be entitled to seek in any way to reduce his periodic child support amount referred to in these orders above, and the same shall not be the subject of any claim by the de facto husband for any form of credit in respect of his periodic child support liabilities.
All extant applications (other than any applications for costs) are dismissed.
Any costs application/s shall be made in accordance with the Family Law Rules 2004 (Cth).
Exhibit E15 shall be available for collection by the solicitor for the de facto husband as and from the expiry date of the lodgement of any appeal from these orders or such other time as is determined in the event of an appeal.
At the end of the appeal period all other subpoenaed documents be returned to the persons or institutions from which they emanated and all other exhibits are returned to the person or persons who tendered the same.
IT IS CERTIFIED
Pursuant to Rule 19.50 of the Family Law Rules 2004 (Cth) it was reasonable to engage senior counsel to attend.
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 Carson & Walters 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 SYDNEY |
FILE NUMBER: SYC 79 of 2016
| Ms Carson |
Applicant
And
| Mr Walters |
Respondent
REASONS FOR JUDGMENT
Introduction
Ms Carson (‘the de facto wife’) and Mr Walters (‘the de facto husband’) were in a long term de facto relationship and they were blessed with three children. These parents are highly intelligent and highly qualified people. They each work as professionals. In early 2014 the parties’ relationship irretrievably broke down.
Sadly, they have been unable to sort out their own financial difficulties following that breakdown of their relationship. Consequently and expensively, they have invited this Court to determine the questions of division of their property, spousal maintenance and child support.
One of the features of this hearing was that some evidence of and disclosure by the de facto husband was cavalier in nature and in at least one minor area, he decided not to disclose.[1] In this case there is no suggestion that the de facto husband has concealed assets or income.
[1] The use of frequent flyer points applied and accumulated since separation.
Given that circumstance, it is again timely to remind parties and the legal profession that in proceedings under the Family Law Act1975 (Cth) parties are required to provide full, frank and ongoing discovery and disclosure. In language easily understood, these proceedings are not “hide and seek”, they are “show and tell”.[2]
[2] Family Law Rules 2004 – Chapter 13 – Disclosure
This couple commenced living together in a de facto relationship in late 1999 and that relationship subsisted until early 2014. Both parties contend their relationship was a de facto relationship within the meaning provided in the Family Law Act 1975 (Cth) (‘the Act’). I have read the trial affidavits of both parties[3] and I accept that theirs was a de facto relationship under the Act and that such relationship had broken down in 2014 after subsisting for about 14 years.
[3] De facto wife’s affidavit filed 17 January 2017 (‘de facto wife’s trial affidavit’) and de facto husband’s affidavit filed 17Janaury 2017 (‘de facto husband’s trial affidavit’).
The Court has jurisdiction and power to deal with property[4] and partner maintenance[5]. As to an application for orders changing child support assessments the Court may, in some circumstances, having regard to s 116 of the Child Support (Assessment) Act 1989 (Cth) (‘the Assessment Act’), have the jurisdiction and the power to make such orders pursuant to sections 117 and 124 of the Assessment Act.
[4] Part VIIIAB Division 2 of the Act, s 90SM.
[5] Part VIIIAB Division 2 of the Act, in particular 90SF.
In terms of the property, both parties assert that there should be an adjustment of property. It is the nature and extent of the property and the assessment of contribution and so-called future needs where they disagree.
The parties contend, and on the evidence I accept, that their respective contributions to the acquisition, maintenance and conservation of property from the date of commencement of their relationship until separation was equal.
It is the contributions subsequent to separation where there is a difference. The de facto husband asserts that there ought to be an adjustment of 20 per cent in his favour given his post separation contributions, including the creation of wealth through income and capital accumulation over that period of time, and having regard to his views that the de facto wife has spent excessively over that time and not taking into consideration the de facto husband’s claim of double dipping of other monies he asserts were provided after separation. Senior Counsel for the de facto husband asserts that that capital sum is completely separate. He says that this approach would mean equality considering the future needs factors in se 90SF(3) of the Act. I considered that submission in the context of this determination.
Senior counsel for the wife submitted that these should be dealt with over the whole period both before and after separation, and that there should be an adjustment of 15 per cent in favour of the de facto wife on the basis of contribution factors and of the so called future needs factors pursuant to s 90SF (3) of the Act. This would give an overall division of 65 per cent in her favour. I considered this submission in the context of this determination.
Issues
In terms of the property, there are issues about:-
(a)the division of personal property (including artwork);
(b)the treatment and division the de facto husband’s Frequent Flyer points;
(c)the treatment of the de facto husband’s capital repayments which are not due to be completed until 2018;
(d)tax liabilities;
(e)the treatment of income and income entitlements in terms of property;
(f)the question of the date of sale of the former joint home at Suburb L (‘the L property’), where the wife seeks an order that either party be able to acquire the L property pursuant to these orders at auction if they are the successful bidder;
(g)the timing of the sale of the L property;
(h)the de facto husband is a professional, and is the Australian business partner of a multinational English professional firm (‘the English firm’) and is entitled to a payment in August 2017. The question is the treatment of this prospective or possible payment of income, which the de facto wife values at $336,340 and the de facto husband values at nil;
(i)the tax payable on the payment from the English firm, if I accept the de facto wife’s submissions;
(j)the value of an Audi motor vehicle. There was no expert evidence in relation to the value of this motor vehicle. The de facto wife conceded that it had a value of $49,000, and given that concession and the otherwise lack of evidence, I will treat that as the value;
(k)the treatment of funds received by the de facto wife pursuant to orders made 20 April 2016 ($100,000 to be determined and $50,000 costs) and the funds paid pursuant to the orders made 22 August 2016 (totalling $135,000);
(l)the treatment of a claim by the de facto husband for income tax that is likely to be outstanding of some $147,779;
(m)fees due to an architect employed by the de facto husband;
(n)the claim by the de facto husband in regard to the de facto wife reimbursing him $19,721 in expert and mediation fees; and
(o)the overall adjustment of property in percentage terms, as indicated earlier.
The question as to whether there ought to be an order for partner maintenance and if so, the amount of such maintenance and the period any such order ought be operative. The de facto wife contends that the periodic maintenance should remain in place until the parties’ youngest child completes primary school. The de facto wife seeks additional partner maintenance by way of an order requiring the de facto husband to pay her private health insurance premium. Such order is to operate until the parties’ youngest child completes her secondary school education, when she is aged about 18, which would mean until about 2031.
In addition she seeks that the interim order made 22 August 2016 for maintenance of $923 per month continue until the L property is sold (presumably a completed sale) then periodic maintenance of $1,361 per month until their youngest child commences high school, which is likely 2025.
In terms of child support, there is a threshold question as to whether the requirements set out under s 116 of the Assessment Act have been met and, if so, whether there ought to be a departure from the current child support assessment as sought by the de facto wife.[6] It was not in issue that the Child Support Registrar had been served. If the threshold is established, then the issue in question is what amount of child support ought to be paid by the de facto husband and what additional expenses should rest with the de facto husband, having regard to the provisions contained in s 117 of the Assessment Act. The wife seeks:-
[6] The current assessment was issued on 05 January 2017 and requires the de facto husband to pay the de facto wife $35,712 per annum for the period 16 December 2016 to 15 March 2018; see Annexure K to the de facto wife’s trial affidavit.
(a)a departure order that the de facto husband pay periodic child support for the each of the children in the sum of $4,500 per month, when each such child is at preschool or primary school and increasing to $5,000 per month when each of such child attends secondary school, commencing for each child on 1 January of the first year of high school. These payments are to continue for each child until the later of when he/she attains the age of 18 years or completes secondary schooling;
(b)such periodic child support to be varied on 1 July in each year by increasing the amount payable by the “Child Support Inflation Factor” calculated with reference to the annualised MTAWE figure, as used by the Child Support Agency;
(c)In addition to periodic child support, pursuant s 124 of the Assessment Act, the de facto husband pay, until further order, or presumably until each child attains the age of 18 years or completes secondary schooling, non-periodic expenses in respect of each child:-
i)100 per cent of each child’s school and pre-school fees, levies and education-related costs and expenses, from the date of these Orders until each child completes their high school education, including but not limited to all:-
·school fees, enrolment fees, non-refundable deposits, tuition fees and levies, school uniforms, school shoes, sports uniforms and sports shoes, excursion or incursion costs and expenses, including school camps;
·stationery, textbooks, computers, music equipment (excluding the purchase of any new piano), additional classes and activities, sporting equipment and participation costs organised, invoiced or requested by a child’s school; and
·other parent contributions, including but not limited to such things as building levies; and
·before and after school care fees, net of any government rebate received.
ii)Private health insurance premiums for the children at the current rate of cover and with the current provider;
iii)Gap medical, dental and optical expenses, including any treatments or medications prescribed by the children’s treating General Practitioner or other specialist health provider, ‘equipment’ such as braces, spectacles, prescription sunglasses, or contact lenses, psychological or other therapeutic expenses.
(d)The de facto wife seeks that these s 124 expenses shall not be expenses for which the de facto husband shall be entitled to seek in any way to reduce his periodic child support.
At the commencement of the property, maintenance and child support hearing before me, the parties sought some time to finalise a parenting arrangement.
Final parenting orders were made by consent on 23 January 2017. In those orders there was provision for the children to attend private schools in the event that they did not attain places in NSW State selective high schools. The de facto husband conceded in evidence that, in those circumstances, the children should attend private school and said he was likely to pay those fees. The de facto husband said that he understood that the fees would range, in present terms, between $25,000 and $30,000 per year. The de facto wife had made no enquiries as the cost of school fees. The de facto husband conceded that he has income to meet school fees and the de facto wife does not. Given that evidence the de facto husband ought to be required to pay private school fees, if any, (given the nature of the parenting orders).
Background
The de facto husband is aged 44 years and is a professional by occupation. He is in good health.
The de facto wife is aged 43 years and is a professional by occupation. Apart from some health issues around the time of separation she is in good health.
The parties commenced living together as de facto couple in about December 1999 and that relationship subsisted until they separated on about 1 February 2014. That relationship was for a period of 14 years. The parties have never been married to each other.
There are three children of the parties’ relationship:-
·P (‘the elder child’), who will be aged 11 when these reasons are published and who commenced year 6 of primary school this year;
·F (‘the second child’), who is presently eight years of age but will attain the age of nine years in a short time, and
·R (‘the daughter’), who is about three and a half years of age.
At the time of separation the elder child was aged almost eight, the second child was aged almost five, and the daughter was aged about four months.
The de facto wife and de facto husband are both residents of New South Wales and live in Sydney. During at least one third of the period of their relationship and at the time the relationship broke down they lived in Sydney.
The parties had acquired the L property in about September 2012. Since then the de facto wife has lived in that house with the children. She and the children continued to be the sole occupants after separation in February 2014.
I have not gone into detail as to the parties’ respective backgrounds as between the commencement of cohabitation and separation; this because, as I said earlier, on the contentions of each party the respective contributions were equal, and given the evidence I am satisfied that that is an appropriate position for the parties to take.
Following separation the parties’ relationship was at first respectful and they were cooperative with each other. The de facto husband asserted that his time with the children was somewhat limited, although given the age of the daughter at the time of separation and the inevitable tensions and conflicts which arose with the relationship breakdown, the time the children spent with the de facto husband in all the circumstances seemed reasonable.
Given the parenting orders made by me on 23 January 2017 the children will continue to live primarily with the de facto wife, but will spend increasingly more time with the de facto husband, eventually being significant and substantial time. I have had regard to that circumstance in the determinations made by me.
Following separation the de facto husband moved into rented accommodation at Suburb N. In the same month he opened a Macquarie Cash Management Account and deposited $34,557.28 into the account.
From May 2014 to October 2014 the de facto wife worked part time in an unpaid capacity with an independent professional service and obtained recent work experience.
Sometime after separation the de facto wife contacted Centrelink and the Child Support Agency to make applications for welfare benefits and Child Support. The de facto husband subsequently lodged an objection to that Child Support Assessment.
Initially after separation the parties’ financial arrangements continued substantially as they did prior to separation. The de facto wife had been the domestic financial manager of the parties; however, the de facto husband was concerned about what he regarded as the high and unsustainable rate of spending by the de facto wife after separation. In about September 2015 the post separation relationship between the parties began to sour. The de facto husband opened bank accounts in his name and undertook the financial arrangements set out in paragraph 156 of his trial affidavit.
At the time the parties commenced cohabitation the de facto husband worked for a large United States based multinational professional firm (‘the US firm’). Initially he had worked in Sydney, and then in the United States for about two years, and then in Sydney again. In about 2009 the de facto husband became a partner of that firm, and was a partner of that firm as at the date of separation. During the course of the relationship he made or created capital contributions to that partnership.
As a consequence of his employment with the US firm the de facto husband received a substantial gross income, namely:-
(a) $1,625, 995 in 2013;
(b) $1,723,172 in 2014; and
(c) $2,172,187 in 2015.[7]
[7] Paragraph 140 of the de facto husband’s trial affidavit.
In the latter part of 2015 the US firm made a decision to close its Sydney office, and entered into discussions with the de facto husband regarding his withdrawal from that partnership. Those discussions were concluded in February 2016 and the de facto husband received a number of payments between January 2016 and December 2016, totalling $2,206,323.
There was also a further agreed figure to be paid to the de facto husband of $119,050, which was paid in about February 2016. This sum was related to retirement contributions which would have been paid to the de facto husband had he been a resident of the United Stated of America.
In addition the de facto husband also received partner distributions totalling $908,492 on 28 January 2016 and 5 February 2016.
The effect of those payments, according to the de facto husband, was that he was paid the same amount through the 2016 calendar year as what he received by way of gross partner distributions in 2015.
In addition to the money payable to the de facto husband pursuant to the agreement he entered into with the US firm and pursuant to his employment,[8] he has remaining in that firm an unpaid partner capital account. The de facto husband deposes that the total current balance of his US firm partner capital account, prior to deductions which the partnership may make prior to its payment to him, is some USD$547,996. The parties agree that has a current exchange rate value of AUD$732,302. The de facto husband anticipates receiving this by way of payments in two instalments in May 2017 and May 2018. He asserts that the precise quantum which he will receive is not known and that it is subject to certain conditions. The de facto husband proposes that this be dealt with as a separate pool of divisible property for the purpose of these proceedings and be divided between the parties on receipt in the future.
[8] Ibid at paragraphs 140 to 150.
In October 2012 the de facto wife commenced working part time with the New South Wales public service. She remains in that employment. Given her evidence on the parenting needs of the children, which I generally accept, I am satisfied that she is likely to continue for the medium term to long term in that type of employment.
The proceedings
These proceeding were commenced in January 2016.
On 20 April 2016 an interim application came before a judge of the Family Court, who made interim orders, pending a final determination, which provided, inter alia, that:-
(a)The payment of principle interest in respect of the [[L] property] be paid out of an offset account (this circumstance continues);
(b)The de facto husband pay the de facto wife $100,000 with the classification of such payment to be reserved for determination at trial; and
(c)The de facto husband pay the de facto wife $50,000 towards legal costs.
In that order the Court noted that the parties had agreed to private mediation.
On 24 April 2016 the de facto husband and his girlfriend Ms Y (‘the girlfriend’) entered into contracts to purchase properties at 8 Street, Suburb N, (‘the N Property’) and 6 S Street, Suburb N. The evidence of the de facto husband was that he considered various ways of buying those properties, but determined that he would buy 8 S Street and his girlfriend would buy 6 S Street. Those purchases occurred. Another example of the de facto husband’s somewhat cavalier approach to disclosure was that he did not inform the de facto wife of that purchase until after contracts had exchanged. The purchase price was $1.7 million for the property purchased by the de facto husband. The stamp duty on that purchase was about $90,000, and the mortgage was about $800,000. The de facto husband applied approximately $990,000 towards the purchase price and associated acquisition costs. Since that time the de facto husband has paid down the mortgage by approximately $70,000, leaving the balance outstanding at about $531,000.
Since their acquisition the de facto husband has boarded up an interconnection between numbers 6 and 8 S Street Suburb N. There was a development approval for significant renovation to the properties owned by the de facto husband and his girlfriend. The de facto husband said if they adopted that plan it would effectively involve demolishing the buildings and rebuilding them, leaving the front façades intact. That consent expired in February 2017.
The de facto husband has, in recent time, spent significant funds on an architect in respect of those properties. In evidence the de facto husband conceded that he had received an account from the architect which related to both his and his girlfriend’s property. He either paid that account or claimed it as a liability. The de facto husband said that he would receive money or has received money from his girlfriend in relation to that bill. He did not produce documents to that end.
The de facto husband dissembled in some areas of his evidence about his intentions regarding keeping the N property. It is significant that in his financial statement he asserts that he pays mortgage instalments on the N property of about $1,115 per week. Someone is using the property at the present time but is not paying rent, and that arrangement will soon end and in any event it had been relatively short term arrangement.
The de facto husband does not occupy the N property, instead he is renting another property at Suburb N with a weekly rental of $2,050. The de facto husband’s evidence was that the N property was or would be habitable with a few minor changes. The effect of his evidence was that he was content to pay:-
(a)$2,050 per week rent; plus
(b)mortgage instalments of about $1,115;
(c)rates, utilities and the like on the N property, which he estimates at about $31 per week,
(d)insurance, although no details of that was provided. It may well be included in mortgage instalments; however, I have treated it as not being so included.
I have had regard to these circumstances in regard to the adjustment of property and in terms of questions of maintenance and child support.
The de facto husband was able to find work as a partner and member of an English professional firm. He operated in the English firm’s Sydney office. The financial year is calculated in England and consequently runs from 1 May of each year to 30 April the following year.
The de facto husband contributed capital to the English firm of $453,231, which he now asserts has a value of $182,000 given the report of the single expert Ms E. For the period 1 May 2016 to 9 January 2017 the de facto husband has received gross partner distributions totalling $504,510.21. The de facto husband deposes that if the pounds sterling and the Australian dollar exchange rates remains at the rate applied to his January drawings his gross drawing for his first year as a partner of the English firm will amount to $672,680.
This figure is somewhat illusory and the payment is likely to effectively be substantially greater. The English firm partnership distributes an amount equal to the predetermined portion of its budgeted distributable profit on a current monthly basis. For his first year in the partnership the de facto husband will receive 60 per cent of the total to which he would otherwise be entitled. If that is the case he is likely to have effectively earnt about $1,100,000 in the May 2016 to April 2017 financial year. In August 2017 when the final accounts are in he will be paid a sum which will bring up his partner’s distributions to 100 per cent of the actual figure. The de facto husband says, quite rightly, that this will be subject to variations in the exchange rate and also whether what the partnership achieves is less than or more than the figure upon which the earlier distributions have been made.
The de facto husband says that this could be significantly less and, presumably, could be significantly more. As I said elsewhere in these reasons, the de facto husband has been at best cavalier and at worst disingenuous in providing information. He was asked to produce the partners’ guide for the English firm and declined to do so on the basis that the partners refused permission for that to occur. However, when this Court made an order that it be provided during the hearing it was made available the next day. The de facto wife had signed a confidentially agreement in any event. The de facto husband has available to him management accounts and also monthly figures which would enable him to have some idea as to how the practice is tracking in terms of the amount payable to him. He did not produce those accounts and I can only assume that they would not have assisted him in his assertion that he could be paid less than the 40 per cent of the budgeted distributable profits.
In addition, for the current year the de facto husband has 18 base points in the partnership and he anticipates moving to 20 base points as of 1 May 2017, which will mean an 11 per cent increase in the monies which would be otherwise payable to him. His base points are the subject of further review and possible increase over the year.
I accept on the evidence and the submissions of Senior Counsel for the de facto wife that:-
(a)there is the prospect of the de facto husband achieving bonus points of up to 4 per cent each year[9] for the first three accounting periods as a full member. These bonus base points do not accumulate. The effect of this is that:-
· in year 1 - he has 18 base points plus the potential of 4 bonus base points;
· in year 2 - he has 20 base points (presumably subject to management approval) plus the potential of 4 bonus base points;
· in year 3 - he has 21 base points (presumably subject to management approval) plus the potential of 4 bonus base points;
· in year 4 - he has 21 base points (presumably subject to management approval) plus the average if the previous 3 year bonus base points (i.e. a potential total of up to 25 base points); and
· Year 5 – he has the normal progression on the Amended Australian Ladder based on the base points allocation in year 4.
Using the current per point rate, 4 bonus base points could provide the de facto husband with additional gross income of up to $249,140 in any given year, provided the income steam continues.
(b)the April 2016 memorandum between the de facto husband and the English firm sets out details of the employment arrangements. The de facto husband commenced with the English firm on 1 May 2016 and that he joins as a Full Member with 18 base points. That level of base points will move to 20 base points on 1 May 2017,[10] subject to management approval. There is a likelihood that his points would continue to increase each year[11] over a period of up to 15 years.
[9] Exhibit E7 page 74 (clause 2.7 to 2.10).
[10] Ibid page 73 and 74 (clause 2.5 to 2.6).
[11] Ibid page 73 (clause 2.4 and the ‘amended Australian Ladder’ - page 079).
Given the assumptions in the memorandum for admission to full membership for base points to grow over 15 years and that the de facto husband asked Ms E to adopt for her report that same period, I am satisfied that the de facto husband’s present intention is that he will remain a partner in the English firm for the next 15 years. I make this finding notwithstanding his evidence as to the short/medium term nature of his type of work in the context of his employment.
Given the de facto husband’s historical earnings, and the agreements with the English firm he is likely to earn towards $2 million per year in the short to medium term.
I am satisfied that his earnings in terms of profit sharing for his first year with the English firm is likely to be around the $1.1 million mark. As I say elsewhere in these reasons the de facto husband has the financial records to show downturns or upturns in the English firm turnover, but has not adduced that in support of his contention that his income will be limited to the 60 per cent of the profit to which he was paid between May 2016 and April 2017.
In the 2016 financial year the de facto wife's taxable income was $31,956 and the de facto husband's taxable income was $2,875,321.
On 19 August 2016 the de facto husband paid $250,000 he had standing in his ANZ cheque account into the mortgage account secured over the N property.
On 22 August 2016 interim orders were made which provided:-
1.The proceedings be listed for hearing in January 2017;
2.The de facto husband pay interim maintenance to the de facto wife of $923 per month;
3.Payment to the [de facto] wife of $135,000 against the parties’ off-set account;
4.A notation that the mortgage repayments on the parties … [sic] home are to be paid from funds in the parties ANZ joint account;
5.A notation that the mortgage repayments will be a factor under s 75 [sic] to which the court will have regard in terms of the contributions and otherwise; [12]
6.A notation that the application under s 116 [Assessment Act] be adjourned to the hearing; and
7.The expenditure of the lump sum will be considered by the court in relation to contribution factors.[13]
[12] I had considered the payment of mortgage in terms of the relevant s 90SM factors including s 90SF of the Act.
[13] Ibid.
The Court otherwise made directions for hearing and interlocutory orders.
In August/September 2016 the de facto wife took approximately four weeks of unpaid leave and asserted that she took leave in September/October 2016 as a consequence of medical issues.
The de facto wife asserts that the daughter will commence kindergarten in 2019. If that is the case she will likely complete primary school in December 2025.
This trial was conducted over three days in January 2017 and the reasons were reserved. Final submissions were forwarded in mid February 2017.
In these reasons any statement of fact is to be regarded as a finding of fact unless the contrary is otherwise clear from the context.
THE LAW
This Court has both the power and obligation to determine jurisdiction in terms of whether there is a relationship within the meaning of the Act. The Full Court in Norton v Locke [2013] FamCAFC 202 said in relation to the question of jurisdiction under Part VIIIAB of the Act:-
43.This court, does, however, plainly have jurisdiction to determine if it has jurisdiction – in this case the jurisdiction to embark upon proceedings which seek to establish or deny the relevant jurisdictional facts. This court has the power to make orders that are necessary for the determination of issues relevant to that jurisdiction. Those powers include the power to control its own process; “[t]he power of each court over its own process is unlimited; it is a power incident to all courts, inferior as well as superior; were it not so, the court would be obliged to sit still and see its own process abused for the purpose of the injustice…” (Cocker v Tempest (1841) 151 ER 864 at 865 by Alderson B, cited by Gaudron J in Jackson v Sterling Industries Pty Ltd (1987) 162 CLR 612, at 638). More specifically, this court has the power to, as Menzies J put it in Ex parte Bevan, “protect […] its function as a court”.
44.Within that jurisdiction and within the ambit of powers just described, this court has the power to make what this court has described as “holding orders” pending the determination of the jurisdictional facts necessary to found jurisdiction. Orders of that type can include, specifically, orders for interlocutory injunctions (see, for example, Ex parte Green; Re LSH; and, Jackson v Sterling Industries Pty Ltd at 617, per Wilson and Dawson JJ). In both the High Court and this court orders of that type have been expressed as orders “preserving the status quo” pending resolution of the question of jurisdiction.
The Family Law Amendment (De Facto Financial Matters & Other Measures) Act 2008 (Cth) introduced the concept of “de facto financial cause” to the legislation. Sections 4(1) of the Act, relevantly defines a de facto financial cause to mean:-
(a)proceedings between the parties to a de facto relationship with respect to the maintenance of one of them after the breakdown of their de facto relationship; or ….
(b)proceedings between the parties to a de facto relationship with respect to the distribution, after the breakdown of the de facto relationship, of the property of the parties or either of them; or …
Section 4AA (1) of the Act provides:-
(1) A person is in a de facto relationship with another person if:
(a) the persons are not legally married to each other; and
(b) the persons are not related by family (see subsection (6)); and
(c)having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.
Paragraph (c) has effect subject to subsection (5).
Working out if persons have a relationship as a couple
(2) Those circumstances may include any or all of the following:
(a) the duration of the relationship;
(b) the nature and extent of their common residence;
(c) whether a sexual relationship exists;
(d)the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(e) the ownership, use and acquisition of their property;
(f) the degree of mutual commitment to a shared life;
(g)whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
(h) the care and support of children;
(i) the reputation and public aspects of the relationship.
(3)No particular finding in relation to any circumstance is to be regarded as necessary in deciding whether the persons have a de facto relationship.
(4)A court determining whether a de facto relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case.
(5) For the purposes of this Act:
(a)a de facto relationship can exist between 2 persons of different sexes and between 2 persons of the same sex; and
(b)a de facto relationship can exist even if one of the persons is legally married to someone else or in another de facto relationship.
Once there is found to be a de facto relationship with the meaning provided under the Act this Court may make an order or a declaration in relation to a de facto relationship only if the Court is satisfied that one of the four criteria set out in that section has been met. Section 90SB provides:-
A court may make an order under s 90SE, s 90SG, or s 90SM, or a declaration under s 90SL, in relation to a de facto relationship only if the court is satisfied:-
(a)that the period, or the total of the periods, of the de facto relationship is at least 2 years; or
(b) that there is a child of the de facto relationship; or
(c) that:
(i)the party to the de facto relationship who applies for the order or declaration made substantial contributions of a kind mentioned in paragraph 90SM(4)(a), (b) or (c); and
(ii)a failure to make the order or declaration would result in serious injustice to the applicant; or
(d)that the relationship is or was registered under a prescribed law of a State or Territory.
Note: For child of a de facto relationship, see section 90RB.
The jurisdiction to hear de facto property proceedings in the Family Court is provided by s 31(1)(a)(aa) of the Act which relevantly provides:-
Original jurisdiction of Family Court
s 31(1) Jurisdiction is conferred on the Family Court with respect to:
(a)matters arising under this Act or under the repealed Act in respect of which matrimonial causes are instituted or continued under this Act; and
(aa)matters arising under this Act in respect of which de facto financial causes are instituted under this Act; and …
Section 39A of the Act provides jurisdiction for de facto financial proceedings to be instituted in the Family Court.
Section 4 of the Act implements the requirement that a de facto relationship must have existed between the parties and there has been a breakdown of that de facto relationship to enable the jurisdiction of the Court to be enlivened. These requirements are repeated in s 90SM(1) of the Act.
Section 4AA(a) of the Act also sets out the circumstances which give rise to a de facto relationship. If there is no de facto relationship then the Act will not apply as the Court has no jurisdiction.
The reason for these provisions is that the power to deal with maintenance and property in respect of parties to a de facto relationship was created as a Commonwealth power by way of limited referral of these State powers to the Commonwealth by some, but not all, State Governments.
In this case the parties resided in New South Wales and its State Government, by reason of the Commonwealth Powers (De Facto Relationships Act) 2003 (NSW), referred powers to the Parliament of Commonwealth of Australia in respect of financial matters relating to de facto parties arising out of the breakdown (other than by the reason of death) of de facto relationships.
The Commonwealth accepted the referral of power by the passing of the Family Law Amendment (De Facto Financial Matters and Other Measures) Act2008 (Cth).
I am satisfied the parties commenced cohabitation in 1999. Their relationship subsisted as a genuine de facto relationship, having regard to the definition under the Act, from December 1999 until 1 February 2014 and that this relationship has come to an end. The parties lived in Sydney from 2002 until separation in February 2014, which occurred in Sydney. As such, I am satisfied that the Court has jurisdiction and power to determine the contested applications.
Evidence
The de facto wife relied upon her trial affidavit and her financial statement filed 17 January 2017. In addition, a number of documents were tendered during the hearing to which I have had regard. There was an application to rely upon an adversarial expert as to the value of L property, but that application was refused. In that circumstance the parties acquiesced the value determined by the single expert valuer, Mr C, and both parties asserted that the L property would need to be sold.
The de facto husband relied upon his trial affidavit filed 17 January 2017 and his updated financial statement filed the same day.
The evidence of the de facto wife
The de facto wife gave further evidence in relation to her use of a nanny, and her need for the use of a nanny minding the children given the age of the children and her work commitments. I am satisfied that her use of the nanny is consistent with the lifestyle which the parties had prior to separation and enables the de facto wife to undertake gainful employment.
The de facto wife was cross-examined in relation to a musical instrument which she purchased for the second child. Perhaps in more modestly remunerated households the amount paid may have seemed somewhat unreasonable. However, given the lifestyle adopted by these parties and the household income at that time, it was not unacceptable or excessive. Although, for the de facto wife the access to such funds into the future will likely cease.
In cross-examination the de facto wife was criticised in terms of claimed expensive accommodation which was, at least on one occasion, similar to that paid by the de facto husband.
The de facto wife gave cogent evidence in her affidavit, in chief, and in cross-examination. She said that she could not entirely support herself without spousal maintenance or diminution of her capital. I was particularly impressed with her evidence contained in her financial statement, which showed impressive thought and preparation. I accept that it is the case given her need and desire to be the primary carer for the parties’ three children, and in the context of the part time work she is undertaking.
There was some evidence about the de facto wife salary sacrificing, however I accept that she did this for a few months and it did not continue.
No expert medical evidence was adduced. Consequently, I will treat the de facto wife’s evidence to the effect that the child had particular symptoms noticed by her. There was some criticism of the de facto wife in respect of vitamins which the elder child takes, but these were apparently recommended by his general practitioner and I accept that these are in all the circumstances reasonable.
These parties have been in conflict for some time and the de facto wife arranged for the elder child and the second child to undertake psychological assessment in the last six months. Each has had six sessions. Given the stress of these proceedings and the stressed households which both parents must present from time to time I accept that this was, in all of the circumstances, a reasonable expense.
The de facto wife was cross examined about a friend with whom she has travelled. She gave frank evidence about activities with this friend and the funding. I am not satisfied that she is in a permanent or long-term relationship with him.
The de facto wife gave evidence in terms of the items of furniture at the L property and her preference for “pick a pile” approach rather than alternate choice should it come to that.
In her trial affidavit[14] the de facto wife asserted that she spent or incurred the following amounts on the children:-
[14] Paragraph 259(f).
(A)Music 1 lessons for [elder child] - $100 per lesson;
(B)Music 2 lessons for [elder child] – $337.50 per terms;
(C)Music 3 Lessons for [second child] – $40 per week;
(D)Music 4 lessons for [second child] - $337.50 per term;
(E)Band Practice for [elder child] – usually $150 per term;
(F)Band Practice for [second child] – usually $150 per term;
(G)Sport 1 lessons for [elder child] - $450 to $500 per term; –
(H)Sport 1 lessons for [second child] - $450 to $500 per term;
(I)Sport 2 lessons for [elder child] (though [second child] may re-join) – usually $450 per child, per term;
(J)Weekly tutoring for both boys for $150 in total;
(K)Mentoring for [second child], occasionally at $70 per session;
(L)Gymbaroo lessons for [the daughter] for $230 per term; and
(M)Sport 3 lessons for all three children $37 per fortnight.
Some of these are paid by the de facto husband and some are seasonal. The parties’ children are very engaged in extracurricular activities in many and varied forms and which sometimes change from time to time and season to season.
When cross-examined about the level of spending for the children the de facto wife conceded that she expected to reduce that level of expenditure. This was one of the admissions she made against interest.
There was cross-examination in relation to the mentoring of the parties’ eldest child. I am not satisfied, on balance, that mentoring should be allowed as an expense as against the de facto husband. Such assistance may well be helpful, but there are other activities and other ways that this can be undertaken, especially given the high academic and professional achievements of both parents.
There was a significant argument as to whether the second child had been diagnosed with reactive arthritis or whether he had symptoms consistent with that condition. I am satisfied if he needs medical treatment he will receive it.
Another example of the de facto wife’s evidence given against her interests was that when she was shown a text from August 2015. She conceded the accuracy of it, although suggests that it was not consistent with other occasions. What was very clear from her evidence was that she is the fall-back or default position in relation to the care of the children and as such is their primary carer.
Given that she has been their primary carer through all of their lives and notwithstanding the consent parenting orders, I find that the de facto wife will continue as their primary carer.
In re-examination the de facto wife conceded that she may have been reimbursed in relation to the Sport 1 fees for the children which she paid. The de facto husband confirmed that in his evidence.
The de facto wife listened to the questions carefully and answered them frankly, and at times against her interest. She was cross-examined in relation to her estimate of expenses. Her evidence was impressive. She was thoughtful, careful and worked hard to ensure that her answers were as accurate as could be and when not exact that they were reasonable estimates. She would not concede that they were guesses, and frankly her work in terms of her expenses was as good as any witness I have seen in this Court. I am satisfied that she made a genuine and honest attempt to estimate the expenses for her and her children as set out in her financial statement, in particular Part N.
The de facto wife presented as an intelligent, thoughtful and considered witness. She clearly took her evidence seriously and took the preparation of her documents seriously. Her evidence was not in any way materially impeached, although it is clearly coloured by her own perception of the events. I regard her evidence as generally reliable.
The evidence of the de facto husband
The de facto husband gave evidence in terms of his trial affidavit filed 17 January 2017 and his financial statement filed the same day. He conceded initially in evidence that he reimbursed the de facto wife for Sport 1 expenses, although he did not specifically point it out to her. He said that she could calculate it from the amounts which he paid to her. He challenged the trips he had taken during the course of the marriage, however, much of that evidence goes to areas in which I need not make any determinations. The de facto husband was cross-examined in relation to the ‘catch up mechanism’, but was careful in his language in respect of that material.
The de facto husband gave evidence as to how the partners’ distributions from the English professional firm were calculated, which was consistent with his affidavit. He did not directly inform the de facto wife as to the percentage of distributions paid during the financial year of earnings and the subsequent August final distribution. In his first year he was to receive 60 per cent of the estimated partner distributions during that financial year and the final outstanding percentage in the following August. This approach changes in year two with the de facto husband to be paid 50 per cent of the estimated partner distributions during that financial year and the final sum made up in August following each end of year. The August payment will be a calculation of the total distributions to partners (based on their points) less the estimated amount paid to them for the preceding financial year. The de facto husband’s points in the partnership will likely increase in the years to come.
The de facto husband gave evidence in relation to the N property. He was cavalier in keeping the de facto wife appraised of that purchase, although perhaps his concern was that it would undermine the purchase or that the purchase came quickly. The de facto husband conceded that he had discussed with his girlfriend a number of options, including them living together. He was careful in his evidence, although there were times when he was not as careful as the de facto wife. It is clear that if the de facto husband lived at the N property he would save about $104,000 per year in rent, and he conceded that the home, with some minor changes, could have been occupied by him and the children. His evidence in relation to the N property was that the architect rendered bills to either his girlfriend or his girlfriend and himself. In any event, he paid them. He provided no documentary evidence of any reimbursement by his girlfriend. She was not a witness to these proceedings. The de facto husband says that he has formed no intention to cohabit with his girlfriend at this stage.
The de facto husband gave evidence as to his expenses. He was not as accurate or had not been as meticulous as the de facto wife in that regard.
In relation to medical insurance the husband says that he will pay the gap of $500 and expenses beyond that will be subject to negotiations.
In relation to school fees he acknowledged that he will end up paying these fees if they occurred, and I note that he consented to the children attending private school if their endeavours to find places at NSW state selective high schools were not achieved. He conceded that he had agreed to that course.
The de facto husband was cross-examined in relation to the acquisition of a musical instrument for the elder child. This was in circumstances where an instrument was lost and he purchased the same model. It is probably not a fair comparison in terms of the musical instrument obtained for the second child.
The de facto husband has travelled at times with his girlfriend and her family, and has at times paid for relatively expensive accommodation.
In relation to his allegations of profligacy by the de facto wife, the de facto husband spent $22,000 for membership of the Sydney Cricket Ground, he spent a modest amount of money on furniture, but spent relatively large amounts of money on recreational equipment, holidays and a present for his girlfriend.
In addition, he bet $5,000 on the outcome of a political election. Unfortunately for him the bet was lost.
There was cross-examination of the de facto husband about the capital investment in regard to the English firm of which he is now a partner, and I will deal with that later.
The de facto husband’s evidence was not seriously impeached by cross-examination. There were some aspects of his evidence which were a little troubling however, it was probably more a matter of being cavalier and angry at the de facto wife rather than any deliberate endeavour to conceal assets, facts or documents.
Ms E
Ms E provided an expert report as to the value of the capital contribution in the de facto husband’s interest in the English firm. Ms E was not challenged in relation to her qualifications nor was she challenged in relation to the methodology and conclusions in relation to her report dated 20 January 2017.[15]
[15] Affidavit and report of Ms E sworn and dated 20 January 2017 – Exhibit E5.
The underlying facts upon which Ms E based her assessment were that the de facto husband was aged 44 years and was a full member of the English firm. He was required to pay a capital contribution and did so out of his savings, that amount being $453,231.68. He could have elected to fully finance the capital payment. On retirement that amount is to be repaid to the de facto husband in pounds sterling. Ms E was asked to adopt a retirement date such as the capital sum would be locked in for fifteen years.
Having regard to the facts and assumptions set out in her report, which I generally accept, the capital sum, as set out in paragraph 4.6 of her report, had a current value, using the Reserve Bank of Australia (‘RBA’) 15 year interest rate average, of $182,182.
There were various other factors put to Ms E, including lower housing interest rates which may have been available and in the context of the de facto husband using borrowed funds rather than savings.[16] I prefer and accept the conservative approach adopted by Ms E and prefer and accept the value based upon the existing circumstances rather than a reflection upon that which it may have had.
[16] Exhibit E18.
Some findings relevant to the evidence
There was argument as to the amount of time the de facto husband spent at home or did not spend at home, and his involvement with the children. Given that there was agreement as to the contributions during the relationship up to the date of separation there is no need for me to make findings in that regard. I am satisfied that the de facto wife has been the primary carer of the three children since separation and is the default carer for them.
Some of the evidence of the de facto husband seems to imply that the de facto wife took funds from accounts without his knowledge and/or consent. She did so, but transferred it into interest-bearing accounts and then transferred it back, as was the arrangement she undertook prior to separation. I make no criticism of her for that action.
The de facto wife gave evidence as to the costs of mentoring of about $70 per session, the cost of a recreational pursuit for the elder and second child of about $80 per week and for the daughter of about $35 per week, which evidence I accept. However, given the evidence of the parties and the equivocal nature of this non specialist mentoring service, I am not convinced that this is a cost to which the de facto husband ought to be required to pay.
The de facto wife says that the parties holidayed extensively prior to separation. I accept her evidence in that respect, although it seems clear that the holidays in 2015 were perhaps more than those the parties had previously or since taken. I have had regard to that in respect of post separation contributions.
The de facto wife said that it was likely that the daughter would be commencing high school in 2025 and therefore she would be looking for spousal maintenance up until 31 December 2024, a period of slightly less than eight years. At that time the de facto wife should be able to resume full time work and consequently any spousal maintenance, whether by way of medical insurance and/or monthly payments, should cease on that date.
These parties led a very good life, having regard to the significant income earned by the de facto husband. The de facto husband’s implicit criticisms of the de facto wife for spending too much and for being profligate were at times disingenuous given the comments I have made in relation to his accommodation costs such as leaving the N property untenanted and his own use of money on recreational equipment and presents for his girlfriend and his costs of holiday accommodation at times since separation.
Whether it is just and equitable to make orders?
Further relevant legal principles
It is s 90SM of the Act that deals with the division of property of parties to a de facto relationship. One of the preferred approaches used in determining such property disputes is a four step one which involves:-
(a)The identification of the property of the parties including their assets, financial resources and liabilities;
(b)The evaluation of the “contributions” or s 90SM(4)(a), (b) and (c) issues;
(c)The evaluation of the matters referred to in s 90SM (4)(d), (e), (f) and (g) including, the relevant matters set out in s 90SF(3); and
(d)A determination as to whether the result is just and equitable by reference to s 79(2) of the Act.
In Stanford v Stanford (2012) 247 CLR 108 the High Court’s left in place the first step requiring the identification of the existing legal and equitable interests in property of the parties. Thereafter the Court must determine whether it is or is not just and equitable to make an order altering the parties’ property interests.
Often, given the circumstances of the parties that step will be uncontroversial; as is the case each party seeks orders for adjustment of existing property interests pursuant to s 90SM of the Act. In doing so the parties assert that it would be just and equitable for such orders to be made. These parties had ended their de facto marital relationship and consequently their common use of property. That separation ended their assumptions, which underpinned their property arrangements up to the date of separation. Albeit, the implementation of that approach took some time.
As a starting point and having regard to the parties’ existing legal and equitable interests in property as set out below, I am satisfied that the just and equitable requirement in s 90SM(3) for the making of orders under s 90SM is met.
The parties’ existing legal and equitable interests in property and their liabilities
The parties tendered a schedule of property and liabilities.[17]
[17] Exhibit E16.
From the evidence I have been able to determine the property and liabilities of the parties as follows:-
The L property – jointly owned Determined by expert evidence $5,250,000 S Street, Suburb N – owned by de facto husband Agreed $2,000,000 Capital Contribution – English firm (subject to currency fluctuations) – owned by de facto husband Determined by expert evidence[18] $182,182 Refund of Capital Contribution – US firm (subject to currency fluctuations) – owned by de facto husband Determined $732,302 Balance of English firm partnership drawings - – owned by de facto husband Considered and taken into account in terms of the other factors 0 ANZ Bank Account - ending in numbers 82 – jointly owned. Agreed[19] $131,698 ANZ Bank Account - ending in numbers 28 – owned by de facto wife Determined $45 Citibank Account - ending in numbers 78 – owned by de facto wife Agreed[20] $1,113 Ubank Account ending in numbers 30 – owned by de facto wife Agreed $1,640 Ubank Account - ending in numbers 34 – owned by de facto wife Agreed $500 Commonwealth Bank Account – ending in numbers 56 – owned by de facto wife Agreed $1,190 Macquarie Bank Ltd – ending in numbers 46 – owned by de facto husband Agreed $25,542 ANZ Bank Cheque Account – ending in numbers 06 – owned by de facto husband Agreed $475,760 ANZ Bank Online Saver Account ending in numbers 22 – owned by de facto husband Agreed $4,712 BHP Billiton Shares (150 shares)
owned by de facto wife
Agreed
$3,978 IAG Shares (661 shares) –
owned by de facto wife
Agreed
$3,986 Telstra Corporation Ltd Shares (1,600 shares) - owned by de facto husband Agreed $8,352 Audi vehicle - owned by de facto wife Determined $49,000 Volkswagen vehicle – owned by de facto husband Agreed $18,000 Nissan vehicle - owned by de facto husband Agreed $4,500 Rental bond - owned by de facto husband Agreed $12,200 Funds held in Watts McCray Trust Account [21] - owned by de facto wife Determined $126,580 Funds held in Barkus Doolan Trust Account - owned by de facto husband Agreed $99,175 De facto husband’s claim for one half of the mediation fees, single expert reports Determined $0 Funds received pursuant to Orders of 20 April 2016 Considered and taken into account in terms of contributions and the other factors) $0 Funds received pursuant to Orders of 20 April 2016 Considered and taken into account in terms of contributions and the other factors) $0 Funds received pursuant to Orders of 22 August 2016 Considered and taken into account in terms of contributions and the other factors) $0 Funds received pursuant to Orders of 23 January 2017 Dealt with earlier $0 Total non- superannuation property $9,132,455 [18]Exhibit E16 and Transcript of Proceedings dated 25 January 2017 – page 2.
[19] Ibid – page 3.
[20] Ibid page 4
[21] See discussion in Transcript of Proceedings dated 25 January 2017 – page 5 – dealing with items 25 and 31 in Exhibit E16.
Liabilities are as follows:-
Joint ANZ Home Loan on L property Agreed $346,152 De facto husband Mortgage in respect of S Street, Suburb N Agreed $522,251 De facto wife ANZ Visa/Amex Combined Account (#27) Agreed $8,652 De facto husband ANZ Frequent Flyer Black Credit Card (# 68) Agreed $11,999 De facto husband ANZ Bank Visa (#93 / #85) Agreed $89 De facto husband Income tax payable by 21 April 2017 Agreed
$531,939 De facto husband Quarterly Tax Instalment, due 28.02.2017 Agreed
$208,412 De facto husband Estimated unpaid tax on income received from 1 July 2016 Determined
$247,779 De facto husband Tax payable on balance of English firm partner drawings due to de facto husband for the period May 2016 to January 2017 Considered and taken into account in terms of contributions and the other factors) $0 De facto wife Outstanding legal fees and work in progress, to be billed Determined
$0 De facto husband Outstanding legal fees Determined
$0 De facto husband Outstanding fees due to architect Determined
$0 De facto wife De facto husband’s claim for one half of the mediation fees, single expert reports Determined
$0 $1,877,273
The parties each have frequent flyer points, to which I have discussed later in these reason and I have treated these points as separate property to the other of the parties’ superannuation property and non-superannuation property.
Superannuation
The parties superannuation property is agreed as follows:-
Z Superannuation
de facto wife’s agreed accumulation fund
$49,391.00 X Superannuation - de facto husband’s agreed accumulation fund $336,278.00
The de facto husband submits that the current periodic child support of about $35,687 is about right and he will voluntarily pay the additional amounts. That money approach has an ambit claim sense about it and leaving the parties to their own devices in terms of child support is an invitation back to litigation.
In her updated financial statement filed 17 January 2017 the de facto wife sets out her estimate of the costs of caring for the children as $3,933 per week, which amounts to about $204,516 per year.
There are some amounts which ought be removed or reduced, namely:-
(a)Food and other expense of $700 per week ought to be reduced to about $500 per week;
(b)House repairs of $389 seems somewhat ‘ambit’ based and I have reduced that to $189 per week;
(c)The utilities seem somewhat high and I have reduced those to $100 per week;
(d)The motor vehicle expenses ought to be reduced by $140 and clothing by $25 per week;
(e)I have not allowed the mentoring costs of about $60 per week;
(f)Given all of the circumstances and the greater involvement of the de facto husband, I have reduced the childcare by $200 per week;
(g)The de facto husband has indicated he will pay the health insurance for the children and they will be subject of another part of the child support departure order. From the de facto wife’s trial affidavit, doing the best I can, the health cover is about $1,168.40 per quarter[44] and from her updated financial statement it seems she has allocated this as to one quarter to her and three quarters to the children. This makes their annual share of the premium, $3,505, or about $67.00 per week.
(h)As to entertainment etc., given the holidays and activities I have reduced this amount to $65 per week;
(i)For travel, even for this family, almost $50,000 per year is too high. With the children I have reduced the $630 per week ($32,760 per year) to $400 per week, which is $21,000 per year. This is having regard to 2015 being an unusual travel year;
(j)I have reduced the hairdressing, etc. from $76 per week to $36 per week; and
(k)Miscellaneous is too vague to allow.
[44] De facto wife’s trial affidavit paragraph 267.
These are estimated expenses and not exact, thus the reduction is about $1,400 per week bringing the total of the claim to about $2,500 per week, which is about $130,000 per year. This is about $3,600 per child per month.
I remain concerned at this level and some part of the cost ought to be carried by the de facto wife. As such I will lower that amount to $3,400 per child per month, which amounts to about $122,400 per year. Given all of the circumstances, I consider this an appropriate figure.
As to the increase when the children attend high school, given the level of support I am not inclined in all of the circumstances to make that change.
It was submitted that the costs of the daughter were low and would increase once she attended full time school. That is true, but of course the need for nannies and childcare, preschool etc. would reduce. Hence the amount for her will be the same as her older siblings.
As to the other parts of the claims, including those under s 124 of the Assessment Act, I have considered them separately, but in the context of the whole of this child support determination.
The de facto wife claims one hundred per cent of school fees in a broad range. As to school fees, whether public or private, they ought to be met by the de facto husband as should pre-school fees, which he already pays. This should include school camps and local excursions. Other excursions ought to be the subject of negotiation between the parents.
The school fees should include other compulsory school contributions, including but not limited to such things as building levies.
The de facto husband should meet the cost of school textbooks, both compulsory and recommended, and computers which the school requires to be purchased for the children. This does not include the broader claims made by the de facto wife.
Given the reduction in clothing costs and their overall modest levels the de facto husband should meet the reasonable cost of school uniforms, including school sports uniforms, shoes and school equipment, for primary and high school.
He should meet school fees, enrolment fees, non-refundable deposits, tuition fees and levies, school uniforms, school shoes, sports uniforms and sports shoes, excursion or incursion costs and expenses, including school camps.
The de facto wife sought a special allowance for before and after school care, however given the periodic child support I am not convinced that this should be otherwise directed to be paid.
The de facto husband will be required to pay private health insurance premiums for the children at the current rate of cover and with the current provider or similar.
As to Gap medical, dental and optical expenses, including any treatments or medications prescribed by the children’s treating General Practitioner or other specialist health provider, ‘equipment’ such as braces, spectacles, prescription sunglasses, or contact lenses, psychological or other therapeutic expenses the de facto husband shall pay 90 per cent of those gaps,
The payment of the above specific expenses should not be a basis upon which the de facto husband may reduce his periodic child support amount.
Given the facts and circumstances discussed in these reasons and having regard to the special circumstance giving rise to the relevant ground, and having been satisfied that the orders I will make are both just and equitable and are otherwise proper.
Accordingly, I will so order.
SPOUSAL MAINTENANCE
In respect of this aspect of the claim, I have had regard to the findings and discussions elsewhere in these reasons.
The de facto wife seeks de facto spousal maintenance as follows:-
16.That the [de facto husband] pay the following by way of maintenance for the [de facto wife]:
a.health insurance premium for the Applicant with the current provider and at the current rate of cover, until [the younger child] [aged three] completes her secondary school education; and
b.The sum of $1,361 per month by way of cleared funds, on/by the first day of each calendar month on a monthly basis in advance, to the Applicant, as she shall direct, until [the youngest child] commences high school.
The de facto husband opposes the order.
There is in place in interim maintenance order made 22 August 2016 providing for payment to the de facto wife of $923 per month.
There is no issue that the parties were in a de facto relationship within the meaning contained in the Act and that this Court is satisfied that two of the matters in s 90SB of the Act have been met in that that the period of the de facto relationship is far greater than two years and there are three children of the de facto relationship.
The Act provides in terms of couples in a de facto relationship that there is a geographic requirement to which the Court is satisfied that both parties were ordinarily resident in New South Wales at the time the application was made and that the other geographic qualifications have been met.
The de facto relationship has broken down.
As such the Court has jurisdiction to hear and determine the maintenance application.
The threshold question
Section 90SF(1) of the Act provides that:-
… the court must apply the principle that a party to a de facto relationship must maintain the other party to the de facto relationship:
(a) only to the extent that the first-mentioned party is reasonably able to do so; and
(b) only if the second-mentioned party is unable to support himself or herself adequately whether:
(i) by reason of having the care and control of a child of the de facto relationship who has not attained the age of 18 years; or
(ii) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(iii) for any other adequate reason.
The threshold questions are firstly whether the de facto husband is able to fund a spousal maintenance order. Given the earlier findings as to his high income and the growing nature of his income, that question is clearly answered in the affirmative. This is notwithstanding the child support departure orders I have discussed earlier. Inter alia, the de facto husband has been able to fund the current child support assessment, spousal maintenance of $923 per month, and rent of $2,000 per week, and mortgage of about $1,000 per week. I am satisfied that he has excess disposable income to meet the maintenance order which I am considering in these reasons.
In terms of the financial needs of the de facto wife, she set out her personal expenditure of $1,145 per week.[45] This schedule did not include the income tax payable by the de facto wife on her salary, nor did it include the loan repayments on the L property, which is being paid out of joint savings.
[45] De facto wife’s updated Financial Statement filed 17 January 2017 – Part N.
The de facto wife’s net income after tax is $824 per week. In addition, she receives Family Tax Benefits and energy supplement of $196 per week, child support of about $688 per week and maintenance of $213 per week. In terms of her income I have not regarded child support as funds available for her use, as I accept that it is wholly applied for the benefit of the children.
The de facto wife claims expenditure in Part N of her financial statement. I generally accept those estimates with the exception of hairdressing, which should be reduced by $30 per week, miscellaneous of $30 and holidays to be reduced by $50 per week. In addition I will not be making an order that the de facto husband meet the de facto wife’s health insurance. That will be a matter for the de facto wife. There is no direct evidence of the cost of health insurance for a single person. There is some evidence of a payment of $1,100 per quarter for health insurance, to which I have earlier alluded. I believe I can take judicial notice that such health insurance would be around $3,000 per year, that is about $60 per week.
Subject to those changes I am satisfied that the de facto wife’s present expenditure is in the circumstances, reasonable.
The de facto wife has the care of the parties’ three children, one of whom is not yet attending full time school. All three children are relatively young. The de facto wife has applied herself to part time work and I accept that this level of work is reasonable given her responsibility to care for the children.
There has been consideration given to what is meant by the term ‘adequately’ where it appears in ss 72 and 90SF of the Act. Adequate support is not consigned to subsistence level nor is it necessarily to be the luxury end of the spectrum. The standard of living enjoyed by the parties during their relationship is a relevant factor in determining the adequacy of the support. In this case the parties had a very high standard of living, of which I have had regard and I am satisfied that what is sought by the de facto wife is reasonable in the circumstances.
Accordingly, I am satisfied that the de facto wife has a need for maintenance, albeit based upon the parties’ respective incomes.
Section 90SE of the Act provides a discretionary power to a court to make a de facto partner maintenance order, once their de facto relationship has broken down.
Section 90SF requires the Court to take a series of matters into consideration. The section provides:-
90SF(1) In exercising jurisdiction under section 90SE (after being satisfied of the matters in subsections 44(5) and (6) and sections 90SB and 90SD), the court must apply the principle that a party to a de facto relationship must maintain the other party to the de facto relationship:
(a) only to the extent that the first-mentioned party is reasonably able to do so; and
(b) only if the second-mentioned party is unable to support himself or herself adequately whether:
(i) by reason of having the care and control of a child of the de facto relationship who has not attained the age of 18 years; or
(ii) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(iii) for any other adequate reason.
Note: For child of a de facto relationship , see section 90RB.
(2) In applying this principle, the court must take into account only the matters referred to in subsection (3).
(3) The matters to be so taken into account are:
(a) the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship ); and
(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; and
(c) whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years; and
(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; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (4), 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; and
(g) a standard of living that in all the circumstances is reasonable; and
(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; and
(i) 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; and
(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; and
(k) the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party's role as a parent; and
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 90SM in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(o) the terms of any order or declaration made, or proposed to be made, under this Part in relation to:
(i) a party to the subject de facto relationship (in relation to another de facto relationship); or
(ii) a person who is a party to another de facto relationship with a party to the subject de facto relationship; 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);
(p) the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:
(i) a party to the subject de facto relationship; or
(ii) a person who is a party to a marriage with a party to the subject de facto relationship; 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); and
(q) any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and
(r) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(s) the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and
(t) the terms of any financial agreement that is binding on a party to the subject de facto relationship.
(4) In exercising its jurisdiction under section 90SE, a court must disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.
In considering this maintenance application I have had regard to the relevant matters pursuant to s 90SF(2) to s 90SF(4) of the Act.
As I have indicated earlier, I have had regard to the age and state of health of each of the parties to the de facto relationship.
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 have been considered by this Court in terms of the maintenance application, as discussed earlier in these reasons.
The parties have three children who are in the primary care of the de facto wife. The de facto husband spends significant and substantial time with the children.
Each of the parties filed lengthy affidavits and tendered a great volume of financial documents. Each party filed detailed financial statements. The de facto wife was thorough and meticulous in her calculations of expenditure, to which I have had considerable regard.
In the context of that evidence and their oral evidence I have been able to determine the commitments of each of the parties that are necessary to enable the party to support themselves and their three children. I have considered this in the light of the parenting orders of January 2017 and the Child Support order discussed earlier.
Apart from themselves, the children and, in the context of this application, the possibility of the de facto husband supporting the de facto wife, neither party has the responsibility to support any other person.
The de facto wife has an entitlement to Family Tax Benefit A and B and Energy supplement A and B. These seem to be a pension, benefit or allowance under a law of the Commonwealth. As such I have considered these in the light of this application and in particular having regard to s 90SF(4) which provides:-
(4) In exercising its jurisdiction under section 90SE, a court must disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit
I have disregarded these benefits.
Neither party has a present entitlement to a pension, superannuation or benefit under State, Territory or Commonwealth Law or otherwise.
Each of the parties lives in a high standard of living. For the de facto husband this is likely to continue. For the de facto wife it will remain high but certainly not to the extent that the parties enjoyed up until separation, and perhaps into 2015.
Section 90SF3(h) of the Act requires the Court to consider 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 de facto wife had worked voluntarily to retrain herself to enable her to get back into her chosen profession. She has undertaken part time work to enable her skills to continue and grow and at the same time enable her to continue as the primary carer of the children. Maintenance will enable her to continue in that regard until the daughter completes primary school.
Section 90SF(3)(i) as to 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, is not a relevant consideration.
Section 90SF(3)(j) imposes an obligation on the Court to consider 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 de facto wife has indirectly contributed to these factors given that she adopted the role of primary care of the children and as homemaker through the duration of the parties’ long relationship. In adopting that role the de facto wife indirectly allowed to the professional skills of the de facto husband to flourish. At the same time her very strong professional foundations were put aside as she adopted the role of housewife and mother. I have had regard to that in respect of the s 90SF(3)(k) factor.
Section 90SF(3)(l) provides a need to protect a party, the de facto wife in this case, who wishes to continue that party's role as a parent. I have had regard to the de facto wife’s wishes to continue in her role as primary parent of the parties’ three children.
Neither party is cohabiting with another person and as such s 90SF(3)(m) is not a relevant consideration.
Section 90SF(3)(n) requires the Court to consider the terms of any order made or proposed to be made under s 90SM in relation to the property of the parties. I have done so. The de facto wife will have a significantly larger share of the parties’ property pool, and the de facto husband notwithstanding the child support liabilities and a likely maintenance order, he will have a very strong and likely increasing steam of income.
Subsections 90SF(3)(o) and (p) were not argued and appear not to be relevant.
Section 90SF(q) provides that the Court must have regard to any child support under the Assessment Act that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship. In this context I have considered the departure orders that I have indicated I would make, and I have also considered the likelihood of additional expenses of private schools and associated costs should they be incurred.
The remaining factors were not argued and were not relevant except in terms of the generalised factors to which I had regard in the property adjustment, I have had regard to them in this maintenance consideration.
The Full Court in Bevan & Bevan (1995) FLC 92-600 set out the process in determining spousal maintenance applications as:-
Taken together then, we would state the law as being that an award of spousal maintenance requires:
1.a threshold finding under s72;
2.consideration of s74 and s75(2);
3.no fettering principle that pre-separation standard of living must automatically be awarded where the respondent's means permit; and
4.discretion exercised in accordance with the provisions of s74, with "reasonableness in the circumstances" as the guiding principle.[46]
[46] At 89,981 and 89,982.
The de facto wife has reasonable living expenses of about $1,195 per week. She earns about $824 per week leaving a shortfall of about $271 per week, totalling about $1,174 per month. At present she is receiving $923 per month, but in that circumstance the de facto husband is meeting part of the de facto wife’s accommodation expenses out of joint savings. Given the amount of capital available to her, it is likely that the de facto wife will be able to accommodate herself and the children without the need of a mortgage.
Given all of these circumstances, I intend to allow the maintenance payment of $923 per month to continue until the completion of the sale of the L property, and thereafter the de facto husband should pay maintenance at the rate of $1,174 per month until the end of December 2025.
As there will be no CPI indexing of this payment it is likely that it will effectively reduce over that period of time. I am satisfied that such an approach is reasonable in all of the circumstance and I will so order.
I certify that the preceding three hundred and ninety five (395) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Benjamin delivered on 18 May 2017.
Associate:
Date: 18 May 2017
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