DAVEY & DAVEY
[2020] FamCA 528
•2 July 2020
FAMILY COURT OF AUSTRALIA
| DAVEY & DAVEY | [2020] FamCA 528 |
| FAMILY LAW – PROPERTY – Interim – Spousal maintenance – Where the wife seeks orders for spousal maintenance by way of periodic and lump sum payments – Where the husband opposes the wife’s application – Whether the wife is able to adequately support herself – Whether the expenses of the children are a factor to be considered – Whether it is just and equitable to make orders for spousal maintenance – Where the husband contends that the wife’s expenditure is reckless – Orders made for spousal maintenance to be paid to the wife by way of periodic payments in respect of her weekly needs and lump sum payments. FAMILY LAW – PROPERTY – Interim – Partial property distribution – Where the wife seeks orders for partial property distribution to allow payment of debts owing in respect of her legal fees and her motor vehicle – Where the wife seeks orders for payment of the children’s expenses – Where the husband contends that the orders are in the nature of child maintenance orders – Whether orders for partial property distribution will deprive the parties of relief at final hearing – Orders made for interim partial property distribution. |
| Family Law Act 1975 (Cth) ss 43(c), 66E, 66L, 72, 74, 75(2), 79, 80(1). |
| Brown and Brown (2007) FLC 93-316 Edgar & Strofield (2016) FLC 93-711 Gabel & Yardley (2008) FLC 93-386 Hall v Hall (2016) 257 CLR 490 In the marriage of Aroney and Aroney (1979) FLC 90-709 In the marriage of Davidson and Davidson (1994) FLC 92-469 In the marriage of Lutzke and Lutzke (1979) FLC 90-714 Iphostrou & Iphostrou [2011] FamCA 20 Maroney & Maroney [2009] FamCAFC 45 Medlow & Medlow (2016) FLC 93-692 Stanford v Stanford (2012) 247 CLR 108 Stein v Stein (2000) FLC 93-004 Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 Vautin v Vautin (1998) FLC 92-827 Wenz v Archer (2008) 40 Fam LR 212 Yunghanns v Yunghanns (1999) FLC 92-836 Zubcic & Zubcic (2019) FLC 93-918 Zubcic & Zubcic [2018] FamCA 129 |
| APPLICANT: | Mr Davey |
| RESPONDENT: | Mr Davey |
| FILE NUMBER: | SYC | 3756 | of | 2019 |
| DATE DELIVERED: | 2 July 2020 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | McClelland DCJ |
| HEARING DATE: | 18 June 2020 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Richards |
| SOLICITOR FOR THE APPLICANT: | Dettmann Longworth Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Roberts |
| SOLICITOR FOR THE RESPONDENT: | Broun Abrahams Burreket |
Orders
That within seven (7) days of the date of these Orders, Mr Davey (“the husband”) and Ms Davey (“the wife”) shall do all things and sign all documents to authorise and direct B Lawyers to pay the money held in trust for the husband and the wife to the parties’ joint C Bank account no. …39 (“Joint C Bank Account”).
Other than as provided in these Orders, that neither the husband nor the wife may withdraw any funds from the Joint C Bank Account without the express written consent of the other.
Subject to Order 6, that the husband pay direct to the wife by way of interim spousal maintenance the sum of $701 per week to such bank account as may be nominated by the wife in writing, of which the first payment is to be made within three (3) days of the date of these Orders and each subsequent payment is to be made weekly thereafter.
Subject to Order 6, that within seven (7) days of the date of these Orders, the husband is to pay to the wife or at the wife’s direction the sum of $47,814.91 by way of lump sum spousal maintenance.
Subject to Order 6, that within 28 days of the date of these Orders, the wife receive the following sums by way of interim property settlement and such sums are to be paid from the Joint C Bank Account:
(a) the sum of $143,153 for payment of the wife’s incurred legal costs;
(b) the sum of $58,700 being the balance of the payment required to purchase the motor vehicle 1; and
(c) the sum of $6,930.95 in payment of items 6, 7, 8 and 10 of the wife’s tender bundle tendered in the proceedings on 18 June 2020.
Orders 3, 4 and 5 are subject to the wife providing her consent for the husband to withdraw the amount specified in those Orders from the Joint C Bank Account.
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 Davey & Davey 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 3756 of 2019
| Mr Davey |
Applicant
And
| Mr Davey |
Respondent
REASONS FOR JUDGMENT
Introduction
This decision concerns an urgent interim Application by Ms Davey (“the wife”) for financial relief against Mr Davey (“the husband”). Specifically, the orders sought by the wife include an Application for interim spousal maintenance and partial property distribution. Those orders sought are opposed by the husband, primarily on the basis that he contends that the wife’s current financial difficulties are the result of her own actions in expending excessive amounts of funds that have been distributed to her to date. The husband also raises the technical issue as to whether the wife has established a proper basis for orders which he contends are in the nature of an application for child maintenance in circumstances where he is paying child support. The husband also contends, in circumstances where the wife seeks orders for adult child maintenance, that she has not established the legislative precondition for those orders to be made.
Issues for determination
Spousal maintenance
The first issue for determination is whether orders should be made for the wife to receive regular periodic payments of spousal maintenance as well as additional sums by way of lump sum spousal maintenance. The issue involves consideration of the following sub-issues:
a)Has the wife established that she is unable to adequately support herself by reason of one of the factors set out in s 72 of the Family Law Act 1975 (Cth) (“the Act”); and
b)If so, what are the wife’s reasonable weekly needs?
c)What capacity, if any, does the husband have to pay spousal maintenance?
d)If a determination is made that an order for spousal maintenance is necessary, what order is just and equitable having regard to those matters set out in s 75(2) of the Act?
e)Finally, should there be an order for the payment of lump sum spousal maintenance in the sum of $47,814.91 being the total amount required by the wife to pay the amount set out in items 1, 2, 3, 4, 11, 12 and 13 of the wife’s tender bundle.
Interim partial property distribution
The second issue is whether an order, or, more specifically, orders as sought by the wife, should be made for partial property distribution. That issue, in turn, requires consideration of the following sub issues:
a)Is the combined matrimonial property such that an order for interim partial property distribution can be made without potentially depriving a party of the relief that they seek at final hearing?
b)Has the wife established that it is in the interests of justice for such an order to be made?
c)Having regard to the matters set out in s 79 of the Act, should such an order be made?
Background
On … 1970, the wife was born. She is currently aged 49 years.
On … 1971, the husband was born. He is currently aged 48 years.
In 1992, the parties met.
In October 1994, the parties commenced cohabitation. At that time, the wife was employed as an educator and was earning approximately $60,000 per year. The husband was employed with the wife’s father as a rural worker and was earning approximately $35,000 per year.
In 1995, the husband commenced employment as a rural agent and was earning approximately $50,000 per year and, in 1996, the parties were each earning an income between $60,000 and $70,000 per year.
On … 1996, the parties were married.
In 1997, the husband, his father and his brother each purchased a one-third share in a property located at D Street, E Town (“the D Street property”) for an amount totalling $500,000. The husband used the parties’ joint funds to enable the transaction.
In 1998, the wife sold a property located at F Street, E Town (“the F Street property”), which she owned prior to the commencement of the parties’ cohabitation, for $90,000.
In September 1999, the parties purchased, from the wife’s brother, sister-in-law and parents, land located at J Street, E Town (“the J Street property”) for $13,000. The proceeds of sale of the F Street property, together with the wife’s savings, were contributed towards building a house on the property.
On … 1999, the parties’ child, Ms W, was born. She is currently aged 21 years. The wife took maternity leave for a period of six (6) months following the birth of Ms W.
On … 2001, the parties’ child, MS X, was born. She is currently aged 19 years. The wife took maternity leave for a period of six (6) months following the birth of MS X.
On … 2005, the parties’ child Y was born. She is currently aged 15 years. The wife took maternity leave for a period of six (6) months following the birth of Y.
In 2008, the wife commenced employment as Assistant Manager and was earning approximately $110,000 per year.
In 2009, the husband commenced employment as manager at the wife’s father’s business and was earning approximately $100,000 per year.
In 2009, the husband, his father and his brother each purchased a one-third share in a property located at D Street, E Town (“the D Street property”) for $837,600. The husband, again, used joint funds to enable the transaction.
On … 2009, the parties’ child, Z, was born. He is currently aged 11 years.
In or about 2010, the husband purchased a property located at G Town (“the G Town property”). The wife states that this was done without her knowledge.
In May 2010, the wife purchased, from the husband’s father, a one-third share in the D Street property for $333,350 and, for the same price, the parties together purchased another one-third share in the property from the husband’s brother. Effectively, the husband and the wife together owned the D Street property entirely.
On 5 July 2010, the parties purchased shares in the wife’s father’s business from the wife’s parents for $500,000. The parties’ arrangement with the wife’s parents provided for the purchase price to be paid in fortnightly instalments over a period of 10 years using funds derived from the dividend income that the shares generated. The husband states that he has been advised, by his accountant, that the consideration has been fully repaid. The wife describes the arrangement as a conditional gift. The shares were subsequently converted into shares in H Pty Ltd (“H Pty Ltd”).
In June 2011, the husband sold his one-third share in the D Street property to his brother for $815,000. The wife states that she was not aware of this transaction.
In August 2011, as a result of the parties’ home being insufficient to accommodate the parties and their four (4) children, the parties’ reached an agreement with the wife’s parents whereby the parties would receive ownership of the wife’s parents’ home in exchange for a transfer of the parties’ ownership in their home, the J Street property. The J Street property was valued at approximately $200,000 while the wife’s parents’ property was valued at approximately $800,000. The transaction giving effect to the arrangement took place in or about September 2011.
The wife contends that, in 2012, the husband sold the G Town property for “a significant loss”.
In 2014, upon agreement by both parties, the wife and the children moved to Sydney for the purpose of facilitating the children’s attendance at their respective schools in Sydney.
The wife contends that the parties separated on 14 February 2014. The husband opposes this and states that the parties separated in April 2019. Determination of that issue is unnecessary in these interim proceedings.
In March 2014, the parties purchased a property located at K Street, Suburb L for $1,430,000. The wife states that the proceeds of sale of the G Town property went towards the purchase price and the remainder was funded by a loan advanced to the parties by C Bank. The husband states that the loan was secured over the D Street property.
In or about June 2014, the wife commenced employment at O School.
In early 2015, the wife commenced employment at Q School and was earning $117,000 per year.
In late 2015, the wife commenced employment at P School and was earning approximately $115,000 per year.
During 2015, due to the financial difficulties that the parties were facing, the parties received gifts of approximately $2,000 to $5,000 per month from the wife’s parents.
In February 2016, the parties sold the D Street property to the husband’s brother and sister-in-law for $1,648,898. Save for a sum of $600,000 paid towards an overdraft, the wife states that she does not know where the remainder of the purchase price was paid to. In that respect, the wife deposes that she recalls “signing a transfer but [she] was not involved in the transaction”. The husband states that his brother paid the purchase price in two instalments and attests to the wife being “responsible for administering the transaction”.
On 23 April 2019, the parties sold a portion of the shares that they held in H Pty Ltd for $583,844.10.
On 24 April 2019, the wife states that, following agreement between the parties, the wife transferred $540,000 from the parties’ joint C Bank account into the wife’s C Bank account and those funds were used to pay the expenses of both parties, including arrears on the parties’ loan from C Bank and other debts and the wife’s and the children’s living expenses. The wife’s legal costs were also paid using the funds transferred to her C Bank account. The husband, however, states that the wife’s conduct in doing so was unilateral.
Until 4 May 2019, of his monthly salary in the sum of $6,756.18, according to the wife, the husband had been paying $3,500 towards the mortgage over the Suburb L property and the remainder was deposited into the parties’ joint C Bank account. The wife states that, following his receipt of a letter sent by her solicitors to the husband, the husband ceased all payments towards the mortgage over the Suburb L property, as well as to the joint C Bank account. Alternatively, the husband attests to only ceasing such payments in June 2020 “against a background of the substantial cash that [the wife] now controls”.
In May 2019, the wife and the children relocate from the Suburb L property to a rental accommodation in Warrawee for $1,504 per week.
On 22 May 2019, the wife was diagnosed with “having a large tumour” requiring two (2) operations.
On 13 June 2019, the husband commenced proceedings in the Federal Circuit Court of Australia.
On 18 June 2019, the husband disclosed receiving a gross monthly income from H Pty Ltd in the amount of $9,373.18 and, additionally a motor vehicle benefit, including fuel and other associated motor vehicle costs. The husband also disclosed receiving a salary from the S Organisation between $200 and $2,000 per month, as well as sales commissions.
On 8 July 2019, Judge Boyle made the following Order in respect to the monies withdrawn by the wife from the parties’ joint C Bank account:
1.Forthwith from the date of the making of these Orders, the wife do all acts and things and sign all documents necessary to pay the balance of the remaining funds withdrawn from the parties C Bank Account in to the parties C Bank Account Number ending …39, and that thereafter each of the parties are restrained from withdrawing funds from that account other than for the purposes of payment of the wife’s share of the mortgage on the Suburb L property.
On 8 July 2019, Consent Orders were also made by Judge Boyle providing, inter alia, for the parties to sell the Suburb L property and that the proceeds of sale of the Suburb L property be used to pay the parties’ debts, with the balance to be deposited into “a controlled monies account in the names of the legal representatives of the husband and the wife in trust for the parties”.
On 13 August 2019, by letter addressed to the solicitors for the husband, the solicitors for the wife disclosed that the wife, between April 2019 and 8 July 2019, used a total of $338,746.65 of the funds in the parties’ joint C Bank account in payment of her expenses. The husband states that there has been “no adequate accounting for [the wife’s] expenditure since 9 July 2019”.
On 6 September 2019, Judge Boyle made the following Orders:
BY CONSENT AND PENDING FURTHER ORDER THE COURT RODERS THAT:
…
2. That Order 1 of the Orders made on 8 July 2019 be varied to provide that from such funds the parties shall pay Z’s school fees for the 2020 school year in the amount not exceeding $15,000 and pay Y’s school fees in the amount of $35,000 for the 2020 school year and such other amounts as agreed between the parties in writing.
3. That Order 7 of the Orders made on 8 July 2019 be varied to provide that the parties shall each receive the sum of $50,000 by way o partial property settlement form the sale proceeds of the [Suburb L] property prior to the balance of such funds being deposited into the controlled monies account as provided for in the said Orders
On 9 September 2019, Judge Boyle made the following Orders:
PENDING FURTHER ORDER THE COURT ORDERS THAT:
1. The wife shall receive from the proceeds of sale of the [Suburb L] property:
a) $40,000 for the motor vehicle by way of partial property settlement; and
b) $40,000 to be characterized as a partial property settlement or spouse maintenance at a final hearing.
…
3. That from the funds sitting to the credit of the parties in the C Bank Account the parties shall pay the medical expenses for the children as follows:
a) As agreed between them in writing from time to time;
b) The occupational therapy costs for Z in the sum of $95 per fortnight.
…
THE COURT NOTES THAT:
A.As provided for in 3(a) the parties agree to pay $255.55 per week for MS X’s speech pathologist until the conclusion of MS X’s HSC examinations in October 2019.
On 26 September 2019, the wife states that she borrowed $50,000 from her brother which she used to pay rent and living expenses.
On 29 October 2019, the Suburb L property was sold and, pursuant to the Orders of Judge Boyle made on 8 July 2019, the balance of the proceeds of sale, totalling $434,295.28, were deposited into the trust account of the solicitors which acted on the conveyance on behalf of the parties. The wife received the sum of $130,000 from the sale, of which $50,000 was used to repay the funds advanced to the wife by her brother on 26 September 2019.
On 3 November 2019, the wife paid a non-refundable deposit of $2,000 on a Motor vehicle 1. The total purchase price of the motor vehicle is $60,700 and, accordingly, the sum of $58,700 remains outstanding. The motor vehicle has been awaiting collection since 19 February 2020.
Commencing January 2020, the sum of $325 per week by way of child support in respect to the parties’ two (2) minor children, Y and Z, is garnished from the husband’s income. The wife states that the husband was liable to pay child support commencing 7 July 2019 and, accordingly, an additional amount of $150 per week has been garnished from the husband’s income in payment of the child support arrears. In that regard, the wife contends that, as at 27 April 2020, the husband’s child support arrears total $6,296.05. The husband, however, states:
Upon the issue of the assessment I was assessed to pay arrears arising from the backdating of the assessment to July 2019. I did not have a cash reserve to pay the arrears, and I entered into a payment plan with the Department of Human Services… The current arrears balance owing is approximately $5,000.
On 12 May 2020, the wife’s lease in respect to her rental accommodation in Warrawee expired. The wife, however, deposes that she intends to “hold over on the lease until such time as [she] moves to a smaller property for lesser rent of about $1,000 per week”.
On 11 June 2020, the wife filed an Application in a Case that was set down for urgent interim hearing before me on 18 June 2020.
Application
Orders sought by the wife
The wife seeks that orders be made, in accordance with the Minute of Order set out in her case outline document provided to the Court on 18 June 2020, as follows:
1. That within 7 days of the date of these Orders the Husband and the Wife shall do all things and sign all documents to authorise and direct B Lawyers to pay the money held in trust for the Husband and the Wife to the parties joint C Bank account no. …39 (“Joint C Bank Account”).
Spouse maintenance
2. That the Husband pay direct to the Wife by way of interim spousal maintenance as follows;
2.1. for herself the sum of $955 per week to such bank account as may be nominated by the Wife in writing, the first payment to be made within 3 days of the date of these Orders and each subsequent payment to be made weekly thereafter.
2.2. In payment of the following with such sum to be paid from the Joint C Bank Account;
2.2.1. $1,504 per week be paid as and from 1 July 2020 onwards from the Joint C Bank Account with such payments to be made direct to the agent managing the rental property occupied by the wife, together with such other amounts as and when required by the rental agent by way of bond and rent in advance
2.2.2. The sum of $47,814.91 being items 1,2,3,4,11,12 and 13 of the Wife’s Tender bundle 1.
Interim Property Payment from the parties’ joint account
3. That within 28 days of the making of these orders the Wife receive the sum the following sums by way of interim property settlement such sums to be paid from the Joint C Bank Account;
3.1. $143,153 for the payment of the wife’s incurred legal costs
3.2. $$58,700 for the balance of the payment required to purchase the Motor vehicle 1
3.3. The sum of $6,930.95 in payment of items 6,7,8 and 10 of the wife’s tender bundle 1
3.4. A payment of $1,718 per week in respect of the children’s expenses
3.5. An in the event that the court declines to order any or part of the payments referred to in order 2 above, a payment to the wife such that she receives all of the amounts set out in that order.
4. That the Husband pay the Wife’s costs of and incidental to this application.
Orders sought by the husband
By Response to Application in a Case filed 17 June 2020, the husband seeks the following orders:
1. That the wife’s Application in a Case filed on 9 June 2020 be and is hereby dismissed.
2. That within 7 days the wife return to the husband Motor vehicle 1 registration number … to the husband.
3. That the wife pay the husband’s costs of and incidental to the Application.
During the course of the hearing, however, counsel for the husband indicated that he would not oppose an order being made that reflected the substance of order 1 as proposed by the wife, provided that funds could not be withdrawn from the joint account without the express written consent of both parties. I, therefore, will make an order to that effect.
The husband, through his counsel, further advised the Court that he would consent to the wife’s proposed order 3.3 in respect to items 6, 7 and 8 of the wife’s tender bundle.[1] For reasons which I set out below, I am also satisfied that it is appropriate that an order be made for the payment of an interim partial property distribution that includes item 10 of the wife’s tender bundle and an order will be made to that effect.
[1] Transcript 18 June 2020, p.3 lines 11–27.
Counsel for the husband further advised the Court that he had instructions to consent to proposed order 3.2 of the wife’s Minute of Order in respect to the payment of $58,700 for the balance of the payment required to purchase the Motor vehicle 1.[2] Accordingly, an order will be made in those terms.
[2] Transcript 18 June 2020, p.18 lines 41–42.
Evidence
The wife relied upon the following documents:
a)Application in a Case filed 9 June 2020;
b)Affidavit of the wife filed 9 June 2020 and bundles of annexures to that Affidavit;
c)Financial Statement of the wife filed 9 June 2020;
d)Initiating Application of the husband filed 13 June 2019; and
e)Financial Questionnaire filed by the wife on 18 December 2019.
The husband relied upon the following documents:
a)Response to Application in a Case filed 17 June 2020;
b)Affidavit of the husband filed 17 June 2020;
c)Financial Statement of the husband filed 17 June 2020; and
d)Financial Questionnaire filed 17 December 2019.
The following exhibits were relied upon:
a)Letter from the solicitors for the husband addressed to the solicitors for the wife dated 18 June 2020 (‘Exhibit 1’); and
b)Letter from the solicitors for the wife addressed to the solicitors for the husband dated 18 June 2020 (‘Exhibit 2’).
Consideration
Spousal Maintenance
The wife’s ability to adequately support herself
In Hall v Hall (2016) 257 CLR 490 at 496 (“Hall v Hall”), the High Court described the “gateway” requirement for the consideration of a spousal maintenance application pursuant to s 74 of the Act. The gateway requirement is set out in s 72(1) of the Act, as follows:
(1) A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
The difficulties associated with making findings of fact in interim proceedings have been acknowledged. As the Full Court said in Edgar & Strofield (2016) FLC 93-711 at [15], “…the limits to an interim hearing are well known. Disputed issues of fact cannot be resolved at an interim hearing”.
Despite those limitations, in Hall v Hall (supra) at [497], the High Court confirmed that:
No doubt, on an application for an interim order “[t]he evidence need not be so extensive and the findings not so precise” as on an application for a final order. But there is nothing to displace the applicability to an exercise of the power conferred by s 74(1) of the ordinary standard of proof in a civil proceeding now set out in s 140 of the Evidence Act 1995 (Cth).
(Citations omitted)
The wife in this matter is the primary carer of parties’ four (4) children, two (2) of whom, namely Y and Z, have not attained the age of 18 years. Her circumstances, therefore, potentially satisfy the requirements of s 72(1) of the Act
In Brown and Brown (2007) FLC 93-316 at 81,455-56, the Full Court said that, where possible:
…both spouses should continue to live after separation at the level which they previously enjoyed if this is reasonable, although the parties’ standard of living may have to be lower if financial resources are insufficient to maintain that standard.
For reasons which I set out below, I am satisfied that the parties have been living above their means and this is particularly the case in respect to the wife in the period subsequent to the parties’ separation.
In her Financial Statement, the wife attests that her weekly expenditure is $5,394 and her weekly income is $2,681. For reasons which I set out under the immediately following subheading, I am satisfied that the wife’s claimed weekly expenses are exaggerated. Nonetheless, having regard to the fact that the wife is required to meet expenses for the two (2) children to whom I have referred, over and above the amount that she receives by way of child support and, additionally, that the wife has been required to re-home herself and the parties’ children, I am satisfied that the wife is unable to adequately support herself in terms of s 72(1)(a) of the Act.
The wife’s reasonable weekly needs
In her Financial Statement filed 9 June 2020, the wife lists her total gross salary as $2,206 per week and lists her weekly deductions and expenses as follows:
·Taxation – $621;
·Rental payment – $1,504;
·Health insurance – $109;
·Compulsory third party and comprehensive car insurance – $25;
·Motor vehicle registration – $26;
·Credit card payments (account ending 9582) – $90;
·Credit card payments (account ending 6222) – $50; and
·Weekly living and/or household expenditure for herself – $1,302;
Total = $3,727.
This leaves a deficit of $1,521 of deductions/expenditure over and above her income.
However, for reasons which I set out below, I am satisfied that it is appropriate for there to be a partial property distribution to pay out the arrears owing in respect to the wife’s credit card accounts. On that basis, I will deduct, from the wife’s weekly expenses, the amount of $140.
Further, with respect, the amount of $200 per week or approximately $10,400 per year in respect to holidays is excessive and, therefore, I propose deducting a further $100 per week.
Additionally, the amount of $160 claimed as house/pool cleaning, being approximately $8,320 per annum is excessive in circumstances where the wife is living in rental accommodation. I, therefore, propose deducting a further $80 per week.
During the course of the interim hearing, counsel for the wife acknowledged that the wife recognised that living in rental accommodation at the cost of approximately $1,500 per week may be excessive and, by reference to paragraph 81 of the wife’s Affidavit, advised the Court that the wife is in the process of looking for accommodation at the cost of approximately $1,000 per week.[3] I will, therefore, reduce the amount of the wife’s claimed weekly expenses by a further $500 per week.
[3] Transcript 18 June 2020, p.8 lines 24–26.
As a result of reducing the items of expenditure claimed by the wife in the manner in which I have set out immediately above, I am satisfied that the wife is unable to adequately support herself to the extent of $701 per week.
In Stein v Stein (2000) FLC 93-004 (“Stein v Stein”), the Full Court found that the reasonable needs of the applicant for interim maintenance are to be assessed according to the amount that they require for their own support, as opposed to what they require in order to support a child. Accordingly, in arriving at that assessment, I have disregarded the expenditure that the wife incurs in respect to the parties’ children.
The husband’s capacity to pay spousal maintenance
In his Financial Statement, the husband attests to having an average weekly income of $2,642 per week and that his total personal expenditure, including taxation, is approximately $2,986 per week. In other words, the husband attests to having a shortfall between his income and expenditure of $344 per week.
On that basis, the husband lacks the capacity to pay spousal maintenance for the wife in the amount that I have determined to be the wife’s weekly needs of $701 per week.
However, it has been held that, in determining the “reasonable ability” of a party to satisfy an order for interim spousal maintenance, the Court is not confined to consideration of that party’s income only, but rather, as stated in Maroney & Maroney [2009] FamCAFC 45 at [56]:
Once a party… establishes an entitlement to interim spousal maintenance, and such entitlement is quantified in accordance with that spouse’s reasonable needs, an order may be made notwithstanding that the liable spouse could only satisfy the order out of capital or borrowings against capital assets.
In this case, in his Financial Statement, the husband attests to having access to only an amount of $3,335 in a Westpac Choice bank account ending 3803 together with a further amount of $49,134 in a Westpac Choice bank account ending 5744. The husband attests, however, that those funds have been borrowed for the purpose of paying his legal fees.
In terms of an additional capital sum that can be reasonably accessed for the purpose of paying maintenance, I note that the parties potentially have access to the amount of approximately $434,295, being the proceeds of sale of the Suburb L property, in a controlled monies account. As previously noted, the parties agree to those funds being transferred to a joint interest-bearing account provided there are safeguards in respect to each party authorising expenditure. Those monies provide a potential source of funds to satisfy the wife’s claim for interim spousal maintenance.
Just and equitable order: s 75(2) of the Act
In determining what order, if any, should be made for the payment of interim spousal maintenance, the Court is required to have regard to those matters set out in s 75(2) of the Act. Those matters are:
(a) the age and state of health of each of the parties; 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 marriage 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 (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, 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
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; 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 marriage 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 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
In this matter, the husband contends that, having regard to those matters set out in s 75(2) of the Act, the Court would not make an order for the payment of weekly spousal maintenance having regard to the following:
·The wife is in good health;
·The husband is in good health;
·The wife earns a superior income to the husband; and
·The wife has engaged in a pattern of reckless and negligent expenditure in the period subsequent to the party separation.
In terms of expenditure of funds by the wife, the husband contends that, in the period subsequent to the parties’ separation, the wife has had the benefit of:
·Funds removed from the parties’ joint account less agreed expenses paid – $231,957;
·Funds from the parties’ joint account pursuant to Orders – $130,000;
·Further funds withdrawn from the parties’ joint account on 27 February 2020 – $26,276;
·Loan from the wife’s mother – $80,000;
·Balance of ANZ credit card – $18,901; and
·Balance of the wife’s Westpac credit card – $10,388.
The husband further notes that, in the period since January 2020, he has paid child support totalling $11,400.
Additionally, the husband refers to the fact that, on 6 September 2019, Judge Boyle of the Federal Circuit Court of Australia made Orders which included:
2. That… from such funds the parties shall pay Z’s school fees for the 2020 school year in the amount not exceeding $15,000 and pay Y’s school fees in the amount of $35,000 for the 2020 school year and such other amounts as agreed between the parties in writing.
3. That… the parties shall each receive the sum of $50,000 by way of partial property settlement from the sale proceeds of the Sydney property prior to the balance of such funds being deposited into the controlled monies account as provided for in [Order 7 of the Orders made on 8 July 2019]
The husband also refers to the following Orders made by Judge Boyle on 9 September 2019:
1. The wife shall receive from the proceeds of sale of the Sydney property:
a)$40,000 for the motor vehicle by way of partial property settlement and
b)$40,000 to be characterized as a partial property settlement or spouse maintenance at a final hearing.
…
3. That from the funds sitting to the credit of the parties in the C Bank Account the parties shall pay the medical expenses for the children as follows:
a) As agreed between them in writing from time to time;
b) The occupational therapy costs for Z in the sum of $95 per fortnight.
…
THE COURT NOTES THAT:
A. As provided for in 3(a) the parties agree to pay $255.55 per week for MS X’s speech pathologist until the conclusion of MS X’s HSC examinations in October 2019.
The wife acknowledges receiving approximately $115,000 as an educator, however, does not concede that her income is substantially in excess of that of the husband. She contends that the husband receives income from H Pty Ltd in the sum of approximately $113,000 per annum and receives other emoluments, including a motor vehicle benefit. Further, the wife contends that, according to disclosures made by the husband on 18 June 2019, the husband receives a salary from the S Organisation between $200 and $2,000 per month as well as sales commissions, the amount of which is not known to the wife. In that respect, the husband states that he has “sold one property and received one commission in the last 14 months of about $3,784 gross”.
In terms of other relevant s 75(2) factors, at paragraphs 47 to 51 of her Affidavit, the wife outlines her circumstances in respect to the care of the parties’ four (4) children as follows:
47. I continue to look after all of the 4 children, 2 of which are attending school. Ms W is enrolled in university and is undertaking part time study. Ms W’s university course is not offered as a full time course and the course will take another five and a half years to complete. Ms W was previously employed as a casual employee in the hospitality industry however she has been stood down due to COVID-19. When Ms W was employed she was earning approximately $168 per week but is no longer receiving this income. MS X intends to go to university commencing in 2021 and will be undertaking a three year course. Ms X was accepted for a gap year in London from April 2020 and as a result, deferred her university studies until 2021 however she is unable to take the gap year in London because of the COVID-19 pandemic. MS X is currently undertaking an online course.
48. [Having regard to the circumstances of all her children the wife contends that her] future needs need to incorporate the fact that MS X and Ms W will continue to be financially supported by [her] for a further five and half years in respect of Ms W and three and a half years in respect of MS X.
49. As stated at paragraph 95 below all of the children have medical issues which require extra care from me including taking them to their medical specialist doctors and providing them with their medications. The children’s medications and medical specialist doctors increase my cost of caring for the children.
50. I receive no assistance from [the husband] in relation to parenting the children and I am the primary carer of the children [the husband] is supposed to spend time with Z every third weekend and with Y in accordance with Y’s wishes however since 7 February 2020 when the Final Parenting Orders were made [the husband] has only spent time with Y on one night and with Z over two weekends. I do not have any family or friends who could assist me with the care of the children. This restricts my ability to seek career advancement because it is difficult to spend time in attending meetings outside school hours and I often have to take time off from work because the children are sick or need my attention.
51. I have been diagnosed as being severely anaemic and I require an iron transfusion twice a year. On 22 May 2019 I attended on a specialist who diagnosed me with having a large tumour and I had two operations, the first being on 22 May 2019 and the second on 7 June 2019. I also suffer from a medical condition and I take medication daily.
While Stein v Stein (supra) is authority to the effect that costs incurred by a party in providing for the needs of children should not ordinarily be taken into consideration in assessing a party’s needs for the purpose of an application for spousal maintenance, the fact that a party is responsible for caring for another person or persons, including their own adult children, is a relevant factor that the Court is required to consider pursuant to s 75(2)(e) of the Act.
In that respect, it has been acknowledged that, in In the marriage of Lutzke and Lutzke (1979) FLC 90-714 at 78,836 and In the marriage of Aroney and Aroney (1979) FLC 90-709 at 78,784, the Court held that “the responsibility of a party to support another person, referred to in s 75(2)(e) can extend to a moral obligation”.[4]
[4]Zubcic & Zubcic [2018] FamCA 129, [535].
Further, in considering whether it is just and equitable to make an order for the payment of spousal maintenance, I have had regard to the fact that each of the children, including the adult children, have health issues as detailed by the wife at paragraph 95 of her Affidavit filed 9 June 2020.
In that respect, I note that in Zubcic & Zubcic (2019) FLC 93-918 at 79,223, the Full Court stated that s 75(2)(o) of the Act is expressed “in the widest terms and forms part of a suite of provisions that recognises more than merely financial matters”.
Also of relevance in respect to my consideration of s 75(2)(o) of the Act is the husband’s contention that the wife has engaged in “reckless” or capricious expenditure in the period subsequent to the parties’ separation. In that respect, at paragraphs 60 and 61 of her Affidavit, the wife states:
60. On or about 29 October 2019 I received the sum of $130,000 on the sale of the Suburb L Property. I subsequently repaid my brother the sum of $50,000 on 30 October 2019.
61. The remaining amount of $80,000 was used to pay my significant credit card debt totalling approximately $27,683.41, my legal costs of $30,000 , my living expenses and rent of approximately $22,316.59 for the children and I who have all lived with me since separation to date. By the time that Judge Boyle had delivered her judgment on 9 September 2019, my legal costs to that date had amounted to $104,895.96
The amount specified by the wife in respect to her own living expenses and that of the children is entirely understandable. However, there does not appear to be any explanation as to the imperative of repaying her brother the sum of $50,000 in October 2019 or the need to pay off the totality of her credit card debts. As noted, the husband contends that, despite the documentation that the wife has presented to the Court for the purpose of these proceedings, it is still the situation that she has not adequately explained how she has applied the totality of funds that she has received in the period subsequent to the parties’ separation. In these interim proceedings, it is not possible to make a determination regarding those matters that, clearly, may become relevant considerations at final hearing.
The Court is concerned that declining to make an order for spousal maintenance in the absence of being able to make a determination of those issues could result in a situation of hardship for the parties’ children in circumstances where s 43(c) of the Act requires the Court to have regard to the welfare of the children. In summary, while there is a live issue in these proceedings regarding the manner in which the wife has expended funds that she has received in the period subsequent to separation, the extent to which that is a relevant consideration in respect to the adjustment of the parties’ property is an issue that should be determined at final hearing.
Accordingly, for all these reasons, I am satisfied that it is appropriate, just, and equitable for the husband to pay spousal maintenance to the wife in the sum of $701 per week. That order will be made conditional upon the wife taking all reasonable steps to facilitate the husband drawing an amount in that sum from the joint account in which the proceeds of the sale of the Suburb L property will be deposited as a result of the orders made in these proceedings.
Should there be an order for lump sum spousal maintenance
In proposed order 2.2.2 of the wife’s Minute of Order, she seeks payment of a lump sum amount of $47,814.91 required, she contends, to pay items 1, 2, 3, 4, 11, 12, and 13 of the wife’s tender bundle. Those items are set out as follows:
Item
Amount
Provider
Particulars
1
$13,035.72
Chadwick Real Estate
Rental arrears for rent owed May and June 2020
2
$1,341.86
AGL
Electricity bill
3
$230.72
Chadwick Real Estate (Sydney Water)
Water usage
4
$2,141.61
Telstra
Internet and mobile telephone
11
$17,985.93
ANZ Credit Card
Living expenses
12
$1,877.54
Westpac Credit Card
Living expenses
13
$1,877.54
NAB Credit Card
Living expenses
Subsection 80(1) of the Act relevantly provides:
(1) The court, in exercising its powers under this Part, may do any or all of the following:
(a) order payment of a lump sum, whether in one amount or by instalments;
(b) order payment of a weekly, monthly, yearly or other periodic sum;
…
In Vautin v Vautin (1998) FLC 92-827 at 85,423-4 , the Full Court said:
...in the exercise of the power to order lump sum maintenance caution is usually appropriate because of the apparent finality of lump sum orders and the difficulties in making predictions into the future. However, it is a power, the exercise of which may be appropriate in particular cases. It may be ordered, amongst other reasons, to meet non-periodic expenditure for the maintenance of that person where there is an established need and a capacity to pay. It is not confined to cases of the capitalisation of periodic maintenance and/or where periodic maintenance is unlikely to be paid because of concerns about the capacity or willingness of the liable parent to pay...
[Emphasis added]
Having regard to the nature of the items set out in paragraph 2.2.2 of the wife’s proposed Minute of Order, I am satisfied that it is appropriate, just, and equitable to make an order for lump sum spousal maintenance in the sum of $47,814.91. For reasons which I have previously set out, I will make that order subject to the wife taking all necessary steps to enable the husband to access funds held in the joint account which will be established to hold the proceeds of the sale of the Suburb L property. I will make a further order that, from the total amount of $47,814.91 received by the wife by way of lump sum spousal maintenance, she is required to pay those items referred to in her proposed order 2.2.2.
Interim partial property distribution
Principles
Sections 79 and 80(1)(h) of the Act confer power on the Court to make orders for an interim property settlement, including, as in this instance, for litigation funding. By way of summary, the relevant legal principles that I apply in this matter are as follows:
·Section 79 of the Act confers a discreet power to make Orders for property settlement and the Court may exercise that power through “a succession of orders until the power... is exhausted” or until a final order dealing with all the known property of the parties is made: Gabel & Yardley (2008) FLC 93-386, as cited in Strahan & Strahan (Interim Property Orders) (2011) FLC 93-466 at 85,640 (“Strahan & Strahan”); and
·Section 80 of the Act is not, in itself, a source of jurisdiction for such an order to be made. Rather, the section is an “enabling provision” that provides various ways in which the general power in s 79 of the Act may be exercised in individual cases: In the marriage of Davidson and Davidson (1994) FLC 92-469 and Yunghanns v Yunghanns (1999) FLC 92-836. This includes, by s 80(1)(h), the making of “a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order”.
There are two stages to the hearing of an application for interim property adjustment orders: Strahan & Strahan (supra) at 85,645-6: The first stage is a “procedural step” which requires an analysis of whether the circumstances of the case trigger the Court’s power to invoke s 80(1)(h) of the Act to make an order for partial property adjustment. At this stage, the “overarching consideration” is the interests of justice.
The second stage is the “substantive step” where the provisions of s 79 of the Act must be considered and applied, but with limitations, given that it is not the final hearing.
The overriding consideration at all stages of the process is that the Court is satisfied that it is “just and equitable” to make the order in circumstances before the Court: Stanford v Stanford (2012) 247 CLR 108 at 120.
In Medlow & Medlow (2016) FLC 93-692 at 81,090 (“Medlow & Medlow”), the Full Court said:
The onus was clearly upon [the applicant for relief] to establish that there were sufficient assets available for the interim distribution and that the effect of any interim order was capable of being reversed as part of the final hearing or at least would not defeat [the respondent]’s property claims. The onus was not on the [respondent] to adduce such evidence.
There are a variety of circumstances in which interim property settlement orders have been made, such as those summarised by Riethmuller FM, as he then was, in Wenz v Archer (2008) 40 Fam LR 212 (“Wenz & Archer”). Relevantly, for the purpose of these proceedings, this includes, as in Wenz & Archer (supra) at [53], where a party may need access to resources to “meet debts which may result in the party being pursued by creditors”.
It is also relevant to note that, in evaluating an application for a litigation funding order, it is appropriate to have some regard to the fact that, in family law proceedings, one party may have the predominance of resources: Strahan & Strahan (supra) at 85,643, citing, with approval, Riethmuller FM in Wenz v Archer (supra) at [53].
In that respect, the authorities are quite clear that, wherever possible, the Court should endeavour to even out the playing field between litigants where one party, in this case the husband, has predominant control of and access to the matrimonial property pool: Iphostrou & Iphostrou [2011] FamCA 20 at [60].
In the context of interim property orders, in Strahan & Strahan (supra) at 85,631, Boland and O’Ryan JJ analysed relevant authorities and noted:
In Poletti and Poletti Nygh J, when describing an application for “interim costs”, referred to the reasons of the Full Court in Wilson and Wilson and said it is a “situation where one party to the marriage controls almost exclusively what might be described as the patrimony of the parties and has control of the bulk of the assets and funds of the parties, where an order may be made to ensure that the other party, who does not have the fortune of controlling those funds, at least has an equal or near equal opportunity to present his or her case”: see also In the Marriage of Polletti at 796 per the Full Court (Ellis, Strauss and Butler JJ). The Full Court in Zschokke at 83,220 made a number of relevant remarks about the “desirability of legal representation for both parties in family law proceedings”.
(Citations omitted)
Interim partial property distribution and relief sough at final hearing stage
According to the authorities outlined above, it is necessary to determine whether the combined matrimonial property is such that an order for interim partial property distribution can be made without potentially depriving a party of the relief that they seek at final hearing.
In her case outline document, the wife contends that the net assets and superannuation of the parties total $3,334,172. She contends that the superannuation component is $400,954.
In his case outline document, the husband contends that the net assets of the parties, including superannuation, totals $3,169,470. He contends that the superannuation component is $389,786.
In the Financial Questionnaire, she seeks an order that would result in a distribution of matrimonial property of 75% to her, having regard to those matters set out in s 79(4) of the Act. She seeks a further adjustment of 10% having regard to those matters set out in s 75(2) of the Act.
In his Financial Questionnaire, the husband seeks an order that would result in a distribution of matrimonial property of 60% to himself, having regard to those matters set out in s 79(4) of the Act. He also seeks an adjustment of three per cent (3%) in his favour, having regard to those matters set out in s 75(2) of the Act.
Accordingly, on the basis of the husband’s contentions based on the parties’ current property pool, he is seeking an outcome that would result in him receiving the sum of approximately $1,750,000, leaving approximately $1,000,000 for the wife.
I am satisfied that, provided the orders for partial property distribution are not made on the open-ended basis sought by the wife, an order for interim partial property distribution can be made without depriving either party of the opportunity of obtaining the relief they seek at final hearing.
Order to be made in the interests of justice
In addressing whether the wife has established that it is in the interests of justice for such an order to be made, I note that the wife firstly seeks an order for the payment of $143,153 for payment of the wife’s incurred legal costs. Having regard to the principles adumbrated in Strahan & Strahan (supra) at 85,631, to which I have referred, I am satisfied that it is in the interests of justice for that amount to be paid.
The wife secondly seeks an order, as set out in proposed order 3.2 of the wife’s Minute of Order, for the payment of $58,700 for the balance of the payment required to purchase the Motor vehicle 1. As previously noted, the husband consents to that order.[5]
[5] Transcript 18 June 2020, p.18 lines 41–42.
The wife thirdly seeks the sum of $6,930.95 in payment of item 6, 7, 8, and 10 of the wife’s tender bundle. Those items are set out as follows:
Item
Amount
Provider
Particulars
6
$273.50
P School
School uniform order:
· 1 Ms X shirt ($75)
· 1 Ms X pair socks ($16)
· 1 Ms X knickers ($72.50)
· 1 Ms X tie ($20)
7
$1,144.75
Q School
School uniform order:
· 1 Ms X blazer ($225)
· 2 Ms X skirts ($250)
· 1 Ms X jumper ($85)
· 3 Ms X blouses ($120)
· 1 Ms X Winter hat ($80)
· 5 Ms X pairs socks ($50)
· 5 Ms X pantyhose ($59.75)
· 3 Ms X PE socks ($30)
· 1 Ms X track suit tops and pants ($185)
· 1 Ms X Saturday sports uniform ($60)
8
$2,299.00
Q School
School laptop
10
$3,459.70
Chemist
Children’s prescription medication
As noted above, counsel for the husband advised the Court that the husband would consent to an order being made in accordance with proposed order 3.3 in the wife’s Minute of Order in respect to items 6, 7 and 8.[6]
[6] Transcript 18 June 2020, p.3 lines 11–27.
This leaves the question as to whether an order should be made in respect to item 10. Item 10, as outlined above, is in respect to funds payable to a Chemist in respect to the children’s prescription medication totalling $3,459.70. The wife has attached to her tender bundle a statement of account substantiating those charges.
Having regard to the principles set out in Wenz & Archer (supra) at [53], I am satisfied that the expenditure incurred in providing medication for the children is entirely reasonable. It is, therefore, in the interests of justice for there to be a partial property distribution to the wife in respect to that item of indebtedness.
Fourthly, the wife seeks an amount of $1,718 per week in respect of children’s expenses. Leaving aside the issue as to whether it is possible to make an order for interim partial property distribution by way of an order for weekly periodic payments on an open-ended basis, I decline to make that order because it is, in substance, an application for an order to pay child maintenance and adult child maintenance.
In that respect, s 66E of the Act provides:
66E Child maintenance order not to be made etc. if application for administrative assessment of child support could be made
(1) A court having jurisdiction under this Part must not, at any time, make, revive or vary a child maintenance order in relation to a child on the application of a person (the applicant) against, or in favour of, a person (the respondent) if an application could properly be made, at that time, by the applicant under the Child Support (Assessment) Act 1989 for the respondent to be assessed in respect of the costs of the child, or vice versa.
(2) Subsection (1) has effect whether or not an application for administrative assessment of child support for the child has in fact been made (whether by the applicant, the respondent or another person).
(3) This section does not apply to proceedings under regulations made for the purposes of section 110 or 111A.
It is not disputed that there is a child support assessment in place in respect to the two (2) minor children. I am of the opinion that s 66E of the Act therefore precludes me from making the order proposed by the wife for an ongoing periodic payment which, although has been described by the wife as an order for partial property distribution, is, in actual fact, in the nature of an order for ongoing periodic payment of child maintenance.
Similarly, s 66L of the Act provides:
66L Children who are 18 or over
(1) A court must not make a child maintenance order in relation to a child who is 18 or over unless the court is satisfied that the provision of the maintenance is necessary:
(a) to enable the child to complete his or her education; or
(b) because of a mental or physical disability of the child.
The court may make such a child maintenance order, in relation to a child who is 17, to take effect when or after the child turns 18.
(2) A court must not make a child maintenance order in relation to a child that extends beyond the day on which the child will turn 18 unless the court is satisfied that the provision of the maintenance beyond that day is necessary:
(a) to enable the child to complete his or her education; or
(b) because of a mental or physical disability of the child.
(3) A child maintenance order in relation to a child stops being in force when the child turns 18 unless the order is expressed to continue in force after then.
It is not suggested that the parties’ adult children have a mental or physical disability and the Court has not been addressed on the issue as to whether the payment sought by the wife is necessary for the children to complete their education. Accordingly, the precondition to the making of an order pursuant to s 66L of the Act has not been established.
In those circumstances, I will not make order 3.4 as proposed by the wife.
Should there be an order for interim partial property distribution pursuant to s 79 of the Act
At paragraphs 20 to 45 of her Affidavit, the wife summarises her contributions in terms of s 79(4) of the Act as follows:
Financial contributions
20. At the time of commencement of cohabitation, I owned the following assets:
a) I owned a house at F Street E Town (F Street Property) valued at about $90,000;
b) I owned a motor vehicle 2 valued at about $7,000;
c) I had about $5,000 in savings;
d) I had nominal superannuation.
21. At the time of commencement of cohabitation, I had a $1,500 liability on my credit card.
22. At the time of commencement of cohabitation, [the husband] had about $10,000 in savings and an old motor vehicle of nominal value. I believe that [the husband] had no liabilities.
23. At the time of commencement of cohabitation, I was earning about $60,000 per annum as an educator. [The husband] was earning about $35,000 per annum, working with my father as a rural worker. From about October 1995 [the husband] worked as a rural worker in U Town earning approximately $50,000 per annum and I worked at the local primary school in U Town as an educator.
24. In 1996 [the husband] and I were both earning a similar income of between $60,000 and $70,000. In 1997 [the husband] purchased a one third share in a property at D Street, E Town with his father and brother using our joint funds. The property at D Street, E Town was purchased for the sum of $500,000.
25. In 1998 while pregnant with Ms W I sold the F Street Property for $90,000. In 1998 [the husband] and I rented a house (at a reduced rate). In or about September 1999 [the husband] and I purchased land for $13,000 at J Street in E Town (J Street Property) from my brother, sister in law and my parents at a reduced price. We both paid $6,500 each for the land and I paid my entire pre cohabitation savings (and proceeds of sale of the F Street Property) of about $95,000 for a three bedroom house to be constructed.
26. Ms W was born on … 1999. I took six months maternity leave when I had Ms W before returning back to my position at E Town Public School.
27. Ms X was born on … 2001. I took a short maternity leave of about six months and then returned to my position at E Town Public School. At about that time [the husband] resigned from his position at V Company and returned to work for my father. While working for my father [the husband] earned about $70,000 and I was earning a similar income.
28. Y was born on … 2005. I took a short maternity leave of about six months and then returned to my position at E Town Public School. In 2008 I resigned from my position at E Town Public School and commenced a position as the assistant manager of another School earning approximately $110,000.
29. In 2009 [the husband] was working as a manager for BB Business (my father’s business) and was earning about $100,000. In or about 2009 [the husband] purchased a one third share in a property at D Street, E Town with his brother and father for the sum of about $837,600. [The husband] purchased the one third share with our joint funds.
30. In about May 2010 I purchased [the husband]’s father’s one third share of the property at D Street, E Town for the sum of $333,350 so that [the husband] and I now owned a two thirds share in D Street, E Town. In about May 2010 [the husband] and I purchased [the husband]’s brother’s one third share of the property at D Street, E Town for the sum of $333,350 so that [the husband] and I now owned the property at D Street, E Town.
31. In or about 2010 [the husband] purchased a property at G Town without my knowledge and which was later sold in about 2012 for a significant loss.
32. In about 2012 things were getting tough financially so my parents agreed to give [the husband] and I their shares in BB Business for the sum of $500,000 payable in fortnightly instalments over 10 years from the dividend income generated off the shares. My parents set this price so that my brothers would not be jealous. My parents had been offered $1,000,000 for the shares from H Pty Ltd. [The husband] and my shares in BB Business were subsequently converted into shares in H Pty Ltd. The shares in H Pty Ltd were in effect a gift from my parents to [the husband] and I. The gift was conditional on part of the dividend in each year from the shares ($50,000) being paid to my parents. The payment of $50,000 per annum to my parents ceases on 30 June 2020 or upon the death of my mother.
33. In about June 2011 [the husband] sold his one third interest in the property at D Street, E Town to his brother, Mr N Davey for the sum of $815,100. I was never made aware of this sale nor was I made aware of where the money was subsequently deposited.
34. In or about August 2011 my parents were living in the family home where I grew up being the E Town Property. [The husband], the children and I were all living in a smaller home at the J Street Property. At that time the E Town Property was valued at about $800,000 and the J Street Property was valued at about $200,000. My parents were concerned that [the husband], the children and I were living in a property which was too small for our requirements and accordingly they agreed to swap the E Town Property with the J Street Property. Accordingly in about September 2011 [the husband] and I transferred the J Street Property to my parents and my parents transferred the E Town Property to [the husband] and I.
35. Upon the children and I moving to Sydney we lived in Suburb M until June or July 2014 and then I obtained a job at O School.
36. In early 2015 I obtained a job with Q School for 12 months earning $117,000 per annum.
37. In late 2015 I was offered employment at P School. Whilst the job at P School paid about $2,000 less than my wage at Q School, I was able to negotiate a 50% discount on Z’s fees to attend P School as part of my offer of employment which more than compensated for this lesser wage.
38. At the time the school fees for the four children were about $100,000 per annum. Mainly we used the shared dividend from the shares which my parents gave to [the husband] and I share to pay the school fees.
39. In or about early March 2014 [the husband] and I purchased the Suburb L property for the sum of $1,430,000. Whilst [the husband] organised the finance for the Suburb L property I understood that the purchase came partly from the proceeds of sale of a property at G Town jointly owned by [the husband] and myself and the remainder was from a loan with C Bank.
40. By about 2015 [the husband] and I were experiencing financial pressure to the extent that I was receiving gifts of money from my mother of about $2,000 to $5,000 per month.
41. In February 2016, D Street, E Town was sold by myself and [the husband] to [the husband]’s brother and sister in law for $1,648,898. I do not know where that money was paid with the exception of about $600,000 which was paid towards an overdraft. I recall signing a transfer but I was not involved in the transaction. I have no idea where the sum of $1,648,898.30 was deposited.
Non-financial contributions
42. When we commenced cohabitation [the husband] usually left for work between 8:30am and 9am and returned home at about 5pm but sometimes later if he had meetings. [the husband] worked Saturdays. When we were living in E Town and after the birth of Ms W, [the husband] became irritated and would complain that I was giving attention to the children rather than him. [the husband] would often not come home until about 7pm. On or about 2 or 3 nights per week [the husband] would not return home until about 9pm. This continued until the children and I left E Town and lived in Sydney in about early 2014.
43. Whilst we were living in E Town I was the primary home maker during the course of the marriage and had the responsibility for managing the family and the day-to-day domestic requirements. [the husband]’s contribution to the domestic requirements was limited to sometimes cooking a meal for the children and myself. I did everything else in relation to parenting and homemaking and non-financial contributions. Whenever I needed assistance my mother would assist me by caring for the children and cook meals for the children, [the husband] and myself.
44. I was responsible for creating a stable and nurturing home for the children. [the husband] made little to no contribution in caring for the children. I have been the children’s primary carer since their birth. I breastfed all the children until they were 12 months of age and prepared their bottles as required. I bathed the children and changed their nappies, comforted them when they were ill and woke several times during the night to settle them when they were in pain or upset with severe reflux and breathing problems. [The husband] did not provide me any assistance in settling the children during the night and did not assist me with the day to day care of children.
45. When the children and I moved to Sydney in about early 2014, Ms W was 13 years of age, MS X was 11 years of age Y was 7 years of age and Z was 3 years of age. From that time I was the children’s sole carer. I had no time other than my work as a full-time educator and looking after the children. [The husband] would only spend time with the children during school term once every 3 weeks on a weekend and usually a few days to a week in the school term holidays and a few weeks in the summer holidays.
Clearly, many of the assertions of the wife will be the subject of contest at the final hearing of this matter. Nevertheless, having regard to the evidence presented, in the context of the parties’ respective contentions in respect to the content of the balance sheet constituting matrimonial property, I am satisfied that, at final hearing, the wife will receive an adjustment of matrimonial property that comfortably exceeds the amount that she will receive by way of a partial property distribution pursuant to these orders. Indeed, in his Financial Questionnaire, the husband conceded that, even on his case, the wife would receive an adjustment of 37% of the parties’ matrimonial property which, leaving aside superannuation, totals $2,779,684. In other words, even on the husband’s case, the wife would receive a distribution to her of $1,028,483.
I do not, however, make the order sought in paragraph 3.5 of the wife’s proposed Minute of Order which, in effect, seeks to substitute the orders in respect to interim spousal maintenance with orders characterised by the wife as orders for partial property distribution in the event that the wife is unsuccessful in obtaining the orders she sought for the payment of periodic spousal maintenance and lump sum maintenance. As noted, I have determined that it is appropriate, just, and equitable to make an order for the payment of interim spousal maintenance, including an amount in respect to the wife’s rental accommodation, totalling, for interim spousal maintenance, the sum of $701 per week. I have also made an order for the payment of lump sum spousal maintenance in the sum of $47,814.91. The effect of order 3.5 as proposed by the wife would, therefore, require the Court to make an order for the payment of an ongoing periodic payment in the sum of $1,758 per week characterised as an order for partial property distribution pursuant to ss 79 and 80 of the Act. I respectfully agree with counsel for the husband that, even if such an order for ongoing weekly periodic payments is permissible pursuant to those ss 79 and 80 of the Act, the open-ended nature of those payments, in the absence of a cap, as sought by the wife, has the potential for the wife to receive an amount of money that exceeds that which can be accommodated within an appropriate adjustment at final hearing contrary to the principles adumbrated in Medlow & Medlow (supra).
Accordingly, other than in respect to proposed orders 3.4 and 3.5, I will make the orders sought by the wife in respect to interim partial property distribution.
Conclusion
For all of the above reasons, I make the orders as set out at the commencement of my reasons for judgment.
I certify that the preceding one hundred and thirty-two (132) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice McClelland delivered on 2 July 2020.
Associate:
Date: 2 July 2020
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