Dorracott & Dorracott
[2021] FedCFamC1F 315
FEDERAL AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)Dorracott & Dorracott [2021] FedCFamC1F 315
File number(s): MLC 2711 of 2019 Judgment of: HARTNETT J Date of judgment: 17 December 2021 Catchwords: FAMILY LAW – PROPERTY SETTLEMENT – Where the parties seek a property settlement – Where the parties seek differing apportionments of the asset pool – Where the wife seeks spousal maintenance – Where the husband asserts the wife is capable of gainful employment – Where it is just and equitable to adjust the parties property interests as to 30 per cent to the husband and 70 per cent to the wife – Where a spousal maintenance order is made.
FAMILY LAW – CHILD SUPPORT – Where both parties seek a departure from the Child Support Assessment Act – Where the wife seeks periodic and non-periodic child support payments – Where the husband agrees to pay the children’s school fees and other expenses – Where one child is currently residing with the wife and the other with the husband and wife – where departure order and periodic sum in respect of the child residing with the wife is made.
Legislation: Child Support (Assessment) Act 1989 (Cth)
Evidence Act 1995 (Cth)
Family Law Act 1975 (Cth)Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Cases cited: Bell & Nahos [2016] FamCAFC 244
Bevan & Bevan (2013) FLC 93-545
Eliades & Eliades (1981) FLC 91-022, 76, 232
Hall v Hall (2016) FLC 93-709
Mallet v Mallet (1984) 156 CLR 605, 608
Stanford v Stanford (2012) 247 CLR 108
Whisprun Pty Ltd v Dixon (2003) 200 ALR 447
Williams & Williams [2007] FamCA 313
Division: Division 1 First Instance Number of paragraphs: 111 Date of last submission/s: 11 August 2021 Date of hearing: 2-4 and 11 August 2021 Date of hearing of an Application in a Proceeding for leave to adduce further evidence filed by the wife. 19 November 2021
Date orders made for Application in a Proceeding filed 19 November 2021: 19 November 2021 Date of filing a further Application in a Proceeding to adduce further evidence filed by the husband: 8 December 2021 Date orders made for Application in a Proceeding filed 8 December 2021: 14 December 2021 Place: Melbourne Solicitor for the Applicant: Kenna Teasdale Lawyers Queen’s Counsel for the Applicant: Mr Dickson Solicitor for the Respondent: marshalls + dent + wilmoth Lawyers Senior Counsel for the Respondent: Ms Smallwood ORDERS
MLC 2711 of 2019 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR DORRACOTT
Applicant
AND: MS DORRACOTT
Respondent
ORDER MADE BY:
HARTNETT J
DATE OF ORDER:
17 DECEMBER 2021
THE COURT ORDERS THAT:
1.Within sixty (60) days from the date of these Orders, or such other time as agreed in writing between the parties, the parties do all acts and things and sign all documents as are required to list for sale the property situate at and known as L Street, Suburb D and being the property more particular described in Certificate of Title Volume … Folio … (“the Suburb D Property”).
2.For the purpose of the sale of the Suburb D Property pursuant to Order 1:
(a)the conveyancer, real estate agent and terms and conditions of the sale be agreed between the parties in writing within fourteen (14) days hereof and in default of agreement, the real estate agent (“the selling agent”) be appointed by the President of the Real Estate Institute of Victoria (“REIV”) and the selling agent thereafter determine the conveyancer and terms and conditions of the sale together with the reserve price in the absence of agreement between the parties but not to be a figure less than $3.75 million; and
(b)the settlement of the sale of the Suburb D Property to be as agreed between the parties or failing agreement no later than ninety (90) days from the date of any contract of sale.
3.Within seven (7) days from the date of these Orders, the parties each contribute the sum of $75,000 or such other or further sum as agreed between the parties in writing to a controlled monies account held in their joint names by the husband’s solicitors and such funds be utilised:
(a)to meet any costs of repairs and maintenance to the Suburb D Property as may be agreed between the parties in writing and in default of agreement as recommended by the selling agent in writing to prepare the property for sale; and
(b)upon completion of the sale of the Suburb D Property any balance remaining from these funds be divided equally between the parties.
4.The parties do all acts and things necessary and sign all documents required, in their capacities as directors of J Pty Ltd as trustee for J Trust, to transfer to the wife at the expense of the parties equally the real property situate at and known as B Street C Town, Victoria being the real property more particularly described in Certificate of Title Volume … Folio … (“the C Town Property”), free of encumbrance, such transfer to occur contemporaneously with the settlement of the sale of the Suburb D Property (“the Transfer”) and:
(a)in the event the transfer results in a revenue impost other than Capital Gains Tax rollover, then that debt shall be apportioned between the parties equally; and
(b)contemporaneously with the Transfer:
(i)the husband and wife do all things necessary to discharge the mortgage registered …3Q secured by the C Town Property in favour of the Commonwealth Bank of Australia (“the C Town Mortgage”); and
(ii)the parties do all things necessary to pay to the wife the balance of the Commonwealth Bank of Australia offset account numbers ending …95 and …51 and close the said accounts, and pending that occurring the husband be restrained from drawing from the said accounts.
5.Upon completion of the sale of the Suburb D Property and the real property situate at and known as M Street E Town (“the E Town Property”) the sale proceeds be applied in the following manner and priority:
(a)first, to pay all costs, commissions and expenses of each of the sales including conveyancing costs;
(b)second, at the time of the sale of the E Town Property, to discharge the mortgage no. …5M to the Commonwealth Bank secured against the title to the E Town Property and the mortgage no. …3Q secured against the title to the C Town property (to the extent that is able to be paid out);
(c)third, at the time of the sale of the Suburb D Property, to discharge the Mortgage no. …5R secured against the title to the Suburb D Property and what, if any, mortgage sums remaining pursuant to mortgage no. …3Q secured against the title to the C Town Property by the Commonwealth Bank;
(d)fourth, to set aside a sum in a joint account of the parties sufficient to meet any Capital Gains Tax (“CGT”) liability assessed against either of the parties as a result of the sale of the E Town Property, and thereafter to distribute any remaining monies as to 70 per cent to the wife and 30 per cent to the husband;
(e)fifth, to reimburse the parties any payment made toward the cost of preparing the properties for sale, including their contribution pursuant to Order 3 less any amount repaid to them pursuant to that order; and
(f)finally, the balance then remaining be divided in order to achieve an overall division of the assets including superannuation of the parties of 70 per cent to the wife and 30 per cent to the husband.
6.That pending the settlement of the sale of the E Town Property:
(a)the husband pay, be liable for and indemnify the wife in respect of all rates, insurances, land tax, water rates, mortgage repayments and other like outgoings of/and associated with the E Town Property; and
(a)each party be restrained from further encumbering the E Town Property including by drawing down on the existing mortgage without the prior written consent of the other.
7.That pending the settlement of the sale of the Suburb D Property:
(a)the wife have the sole use and occupation of the Suburb D Property;
(b)the husband pay, be liable for and indemnify the wife in respect of all rates, insurances (including contents), land tax, water rates, mortgage repayments and other like outgoings of/and associated with the Suburb D Property; and
(c)each party be restrained from further encumbering the Suburb D Property including by drawing down on the existing mortgage without the prior written consent of the other.
8.That pending the Transfer of the C Town Property to the wife:
(d)the wife have the sole use and occupation of the C Town Property;
(e)the husband pay, be liable for and indemnify the wife in respect of all rates, insurances (including contents), land tax, water rates, mortgage repayments and other like outgoings of/and associated with the C Town Property; and
(f)the parties be restrained from further encumbering the C Town Property including by drawing down on the existing mortgage or causing J Pty Ltd to do so without the prior written consent of the other.
9.Each party holds their interest in the Suburb D, C Town and E Town Properties on trust for the other pursuant to these orders.
10.The husband retain to the exclusion of the wife, all of his right, title and interest in:
(a)the partnership of N Company, including any Work in Progress (“WIP”) based entitlement;
(b)funds in any bank accounts in his sole name;
(c)his superannuation entitlements; and
(d)his Motor Vehicle 1.
11.The husband pay and indemnify the wife in relation to the following liabilities:
(a)any income tax liability assessed in his name for the financial years ended 30 June 2020 and 30 June 2021 and PAYG instalment liabilities in his name;
(b)the ANZ loan utilised to acquire his interest in the partnership of N Company;
(c)his credit card liabilities; and
(d)any other liability in his name or encumbering any property he is to retain pursuant to these orders.
12.The wife retain to the exclusion of the husband:
(a)the funds in the Commonwealth Bank of Australia offset accounts in joint names together with any funds in any bank accounts in her sole name;
(b)her Motor Vehicle 2;
(c)shares in public companies held in her name; and
(d)her superannuation entitlements.
13.The wife pay and indemnify the husband in relation to the following liabilities:
(a)Any income tax liability assessed in her name for the financial years ended 30 June 2020 and 30 June 2021 arising from any distribution made to her from the N Company Trust;
(b)her credit card liabilities including the former joint credit card; and
(c)any other liability in her name.
14.Within seven (7) days of the date of these orders, the wife make available for collection by the husband the following:
(a)from the Suburb D Property, his ski and sports gear, personal documents, dining set gifted by the husband’s father for the parties’ wedding, his father’s prints, audio engine speakers, periodicals, text books, his clothing and shoes;
(b)from the C Town Property, his clothing, sports gear and the inflatable paddle board; and
(c)a copy of the parties’ marriage certificate if the wife is able to locate same.
15.Save as provided in Order 14, the wife retain the contents of the Suburb D and C Town properties.
16.From the sale by the wife of her Motor Vehicle 3 registered … the wife apply the sale proceeds as follows:
(a)firstly to pay all costs, commissions and expenses of sale;
(b)secondly to reimburse to the wife any costs incurred by her in repairing and preparing the vehicle for sale and obtaining a roadworthy certificate; and
(c)thirdly, to pay the balance then remaining in the proportions 70 per cent to the wife and 30 per cent to the husband.
17.That within thirty (30) days of receipt by the wife of any sum in respect of any insurance claim made by her for the Suburb D property the wife pay to the husband 30 per cent of such payment.
18.That within sixty (60) days from the date of these orders, the husband and wife do all things and sign all documents as required to transfer to the wife such of the husband’s airline points as necessary to give effect to an equal division of the airline points balance as held by the husband as at the 11 August 2021.
19.Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all property (including choses-in-action) owned by or in the possession of such party as at the date of these orders;
(b)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(c)each party forgo any claims they may have to any superannuation or work related benefits or entitlements belonging to or earned by the other;
(d)insurance policies remain the sole property of the owner named thereon; and
(g)any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
Spousal maintenance
20.That until 31 December 2024 and not thereafter the husband pay to the wife the sum of $2,700 per week by way of spousal maintenance, to increase on 1 July each year in accordance with the Consumer Price Index for Melbourne, to commence on 1 January 2022, in whatever manner he chooses, to include via distribution to the wife as the nominated beneficiary of the N Company Trust (“N Company Trust”) provided:
(a)the husband pay any and all tax liabilities of the wife and indemnify her with respect thereto in respect of such distributions; and
(b)the wife receives such monies at least monthly in advance.
Child support
21.Pursuant to section 117 of the Child Support Assessment Act 1989 (Cth), there be a departure from the administrative assessment of child support payable by the husband to the wife for Y born … 2007 (“Y”) and in lieu thereof the husband pay periodic child support for the child as follows:
(a)Commencing 1 January 2022, the sum of $2,000 per month until Y attains the age of 18 years or completes her secondary education, whichever is later; and
(b)the rate of child support payable by the husband to the wife will increase on 1 July 2022 and each year thereafter in accordance with variations in the Consumer Price Index for Melbourne.
22.Pursuant to section 124 of the Child Support Assessment Act 1989 (Cth), the husband pay in addition to the periodic payments of child support, in respect of the children, X born … 2005 (“X”) and Y, until each child attains the age of 18 years or completes his or her secondary education, whichever is later, and by way of non-periodic child support:
(a)private school costs including but not limited to tuition fees, uniform and camps;
(b)costs of tutoring as agreed between the parties in writing;
(c)costs of extra-curricular activities including X’s guitar lessons; costs associated with the children’s sailing activities including sailing gear; and equipment; boat repairs and the yacht club membership for the children at C Town, with such other expenses to be as agreed between the parties in writing;
(d)children’s mobile phone plan payments;
(e)private health insurance at the current level of cover; and
(f)any out of pocket medical expenses, including psychologist expenses, for both children.
23.The payments made by the husband pursuant to Orders 21 and 22 be credited against and count toward 100 per cent of any current or future administrative assessment under the Child Support (Assessment) Act 1989 (Cth).
24.The parties have liberty to apply in respect of the implementation of these Orders.
25.Each party do all acts and things and sign all documents required to give effect to these Orders.
26.In the event that either party should fail, neglect or refuse to sign or execute any deed, document or instrument required by or to give effect to these Orders then pursuant to section 106A of the Family Law Act 1975 (Cth) a Registrar of the Melbourne Registry of this court shall be and is hereby authorised, empowered and directed to sign and execute such deed, document or instrument in the place and instead of such party and to thereafter do all things and acts as are necessary to give validity and operation to same.
27.Otherwise all extant applications be dismissed.
AND IT IS NOTED THAT:
A.These orders are intended as far as practicable and pursuant to Section 81 of the Family Law Act 1975 (Cth) to determine the financial relationship between the parties and avoid further proceedings between them.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Dorracott & Dorracott has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HARTNETT J:
PRELIMINARY
The proceeding commenced on 15 March 2019, when the Applicant husband (“the husband”) filed an Initiating Application for parenting orders.
On 28 March 2019, the Respondent wife (“the wife”) filed a Response to Initiating Application in which she sought parenting orders. On 13 December 2019, the wife filed an Application in a Case in which she sought property orders. The wife sought property orders that included provision to her of spousal maintenance and child support departure from the administrative assessment of child support.
On 9 January 2020, the husband filed an Amended Initiating Application seeking amongst other orders, a 45/55 division of the parties’ non-superannuation assets, the greater per cent going to the wife; an equalisation of the parties’ superannuation; and that the wife’s application for child support departure orders be dismissed.
On 14 January 2020, interim property orders were made. They included Orders 4 and 5 which were as follows:
4. The husband shall pay –
a.all rates, insurances (including contents), land tax, water rates and other like outgoings associated with the Suburb D, C Town and E Town properties;
b. family health insurance at the current rate; and
c. the mortgages (refinanced or otherwise).
5. Pursuant to s 124 of the Child Support Assessment Act, the husband shall pay–
a.by way of non-periodic child support, private school costs (including but not limited to tuition fees, uniforms, camps, clothing and equipment for camps, and excursions) for X at F School; and
b.by way of non-periodic child support, private school costs (including but not limited to tuition fees, uniforms, camps, clothing and equipment for camps, and excursions) for Y at G School;
and such payments are not to be credited against any administrative assessment of child support in force from time to time.
On 8 February 2021, the wife filed a Further Amended Response to Initiating Application seeking further final parenting and property orders including that the parties’ property interests (including superannuation) be adjusted as between them in the proportions of 80 per cent to the wife and 20 per cent to the husband. The wife sought spousal maintenance in the sum of $1,500 per week.
On 23 January 2020, his Honour Justice Wilson made orders relevantly as follows:
1.The wife’s application for interim spousal maintenance in paragraph 12.2 of her application in a case dated 13 December 2019 is dismissed.
2.The wife’s applications for child support in paragraph 12 of her application in a case filed 13 December 2019 are dismissed.
3.…
4.The wife’s application for sole use and occupation of B Street, C Town in paragraph 6 of her application in a case dated 13 December 2019 is dismissed.
5.Until the trial of this proceeding or further order the husband is permitted to access and use the property at B Street, C Town on the first weekend of each month from 5pm on Friday until 9am on Monday.
On 15 March 2021, the husband filed an Application in a Case seeking inter alia that the trial be expedited; and that there be valuations obtained from a single expert of the properties situate at B Street, C Town (“the C Town Property”) and M Street, E Town (“the E Town Property”).
On 16 March 2021, I made orders inter alia adjourning the matter for final hearing before me with priority. Prior to the commencement of the hearing, and on 30 June 2021, Senior Registrar McGrath made final parenting orders by consent.
At the commencement of the final hearing on 2 August 2021, the issues still in dispute before me included: the inclusion in the asset pool of the anticipated partnership distributions to be received by the husband in that month and in October 2021 from N Company (“N Company”); the adjustment necessary for the parties respective contributions; the wife’s future needs including in the context of her application for spousal support, her ability to be gainfully employed, and her receipt and application of capital; and the quantum and extent of child support departure orders.
Following the conclusion of the trial the wife filed an Application in a Proceeding on 15 November 2021 seeking leave to adduce further evidence in the proceeding.
On 19 November 2021, the court made the following orders by consent:
1.The Applicant wife have leave to tender into evidence the affidavit of her solicitor Margaret Neal, together with the annexures thereto affirmed 15 November 2021.
2.The parties forthwith instruct H Group to undertake an updated valuation of the property at B Street, C Town, with the costs of the updated valuation to be paid by the husband, and the wife forthwith provide the valuer with access to the C Town property to facilitate the valuation.
3.On or before 8 December 2021, the Respondent husband file and serve any application in a proceeding and any further Affidavit he seeks to rely upon in relation to the issue of the reopening of evidence.
4.The Applicant wife’s costs are reserved.
On 8 December 2021, the husband filed an Application in a Proceeding seeking leave to adduce further evidence in the proceeding.
On 14 December 2021, the court made the following orders by consent:
UPON APPLICATION MADE TO THE COURT pursuant to Part 10.2 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, and having been considered in Chambers without the need for an appearance by or on behalf of the parties, and it being NOTED THAT the parties have agreed for the following further information to be considered by the Court in delivering its Reasons for Judgment following the final hearing that concluded on 11 August 2021:
A.The property situated at B Street, C Town has an agreed value of $2,400,000.
B. The husband’s taxable income for the 2021 financial year was $2,430,656.
C.The distributions to the wife from the N Company Trust for the 2021 financial year were $99,758.
D.After taking into account the husband’s PAYG instalments already made, the estimated further tax liability of the husband for the 2021 financial year is $118,710.
E.After taking into account PAYG instalments already made, the estimated further tax liability of the wife for the 2021 financial year (on distributions made to her by the N Company Trust) is $4,882 (in addition to her unpaid tax for the 2020 financial year)
THE COURT ORDERS BY CONSENT THAT:
1.The husband’s Application in a Proceeding filed on 8 December 2021 be dismissed.
2. The hearing listed on 21 December 2021 be vacated.
3. There be no order as to costs.
MATERIAL RELIED UPON
The husband relied on the following material:[1]
(g)Further Amended Initiating Application filed 8 July 2021;
(h)Trial affidavit of the husband filed 8 July 2021;
(i)Financial Statement of the husband filed 8 July 2021;
(j)Affidavit in Reply of the husband filed 28 July 2021.
(k)Affidavit of Single Expert Valuer, Mr O filed 8 December 2021;
(l)Affidavit of the husband filed 8 December 2021; and
(m)Outline of Case filed 30 July 2021.
[1] Outline of Case of the husband filed 30 July 2021, page 2 together with material introduced into evidence post conclusion of the trial.
The wife relied on the following material:[2]
(a)Further Amended Response filed 21 July 2021;
(b)Financial Statement of the wife filed 21 July 2021;
(c)Affidavit of the wife filed 21 July 2021;
(d)Affidavit of Mr P filed 21 July 2021;
(e)Affidavit of Dr Q filed 21 July 2021;
(f)Affidavit of Margaret Neal, solicitor for the wife filed 15 November 2021; and
(g)Outline of Case filed 30 July 2021.
[2] Outline of Case of the wife filed 30 July 2021, page 1 together with material introduced into evidence post conclusion of the trial.
BACKGROUND
The husband was born in 1971 and is aged 50 years. He currently resides in a rental apartment on R Street, Suburb D. He is a partner at N Company. The husband is in good health.
The wife was born in 1968 and is aged 53 years. She resides in the former matrimonial home situate at L Street, Suburb D in the State of Victoria (“the Suburb D Property”). During the period of the cohabitation and marriage of the parties, the wife worked in office administration. She ceased employment in 2005, around the time of the birth of the parties’ first child, and since that time she has remained in the home engaged in the primary care of the children and home duties. She continues in that role. The wife was diagnosed with cancer following the birth of the parties’ second child. She was again diagnosed with cancer in 2014 and relapsed in late 2017. As of February 2019, the wife’s cancer has gone into remission and she is in otherwise good physical health. The state of her mental health is variable, as is discussed hereafter.
The parties commenced cohabitation in December 1998, were married in 2001 and separated in August or September 2018. Their cohabitation period was almost 20 years. There are two children of the relationship, X (“X”) born in 2005, now aged 16 years, and Y (“Y”) born in 2007 (“the children”) now aged 14 years.
The 30 June 2021 orders, made by consent, resolved the parenting part of the proceeding on a final basis with the parties having equal shared parental responsibility of the children. Those orders further provided for Y to live with the wife and spend time with the husband as she wishes, and for X to live with the wife during the school week, spend time with the husband each Wednesday for dinner from 6.30pm to 9.00pm and live with the husband each weekend save for every third weekend; and for one half of all school holidays.[3] Since late May 2021 however, X has resided predominately with the husband.[4] Indeed, well prior to the making of the orders, and being between approximately April 2020 and January 2021, X divided his time fairly equally between the households of his parents. Between January 2021, and April 2021, and save for some holiday time he spent entirely with his father, X spent week days in the household of his mother and weekends almost entirely in the household of his father. Before April 2020, and from the time of separation, X resided predominantly with the wife. In essence, the parties are content to support X in his residing with either of them as he wishes at any given time, regardless of the existence of the final parenting orders.
[3] Orders made 30 June 2021 by Deputy Registrar McGrath.
[4] Affidavit in reply of husband filed 28 July 2021.
The children have some not insignificant health issues which of course are of concern to their parents. The wife deposes that X has an immunological condition for which “he receives monthly injections to manage his allergies” as well as asthma. Both parties acknowledge that X has also very “serious mental health issues”. He has exhibited suicidal ideation and self-harmed, and engaged in highly problematic behaviours. X is attending upon a psychologist and psychiatrist.[5] He will enrol in a different private school from that which he was attending earlier in 2021 for his further secondary education. The parties both provide X with much support and will continue to do so. Y will remain attending G School (“G School”). The mother deposes that Y suffers from anxiety and currently attends upon a psychologist. I accept that evidence.
[5] Trial affidavit of the wife filed 21 July 2021; affidavit in reply of the husband filed 28 July 2021.
IS IT JUST AND EQUITABLE TO MAKE A PROPERTY SETTLEMENT ORDER
Section 79(1) of the Family Law Act 1975 (“the Act”) provides that the court may make such orders as it considers appropriate altering the interests of the parties to the marriage in the property of the parties. Pursuant to s 79(2) of the Act the court must be satisfied that it is just and equitable to make orders to alter the parties’ interests in property. If the court is so satisfied that it is just and equitable to make an order altering the interests of the parties in property, s 79(4) of the Act sets out the matters which the court must take into account when considering what order (if any) should be made.
The High Court of Australia (the “High Court”) in Stanford v Stanford (2012) 247 CLR 108 (“Stanford”) revisited the process for trial judges in altering property interests of parties pursuant to s 79 of the Act for married parties, and s 90SM of the Act for de facto couples. The High Court emphasised that the question presented by s 79(2) of the Act, namely, “whether, having regard to those existing [property] interests [of the parties], the court is satisfied that it is just and equitable to make a property settlement order,”[6] must not be merged with, or supplanted by the inquiries under ss 79(4)/90SM(4) of the Act.[7] In determining whether it is just and equitable to make an order, the matters which can be taken into account do “not admit of exhaustive definition.”[8] However, there must be a “principled reason for interfering with the existing legal and equitable interests of the parties to the marriage.”[9]
[6] Stanford v Stanford (2012) 247 CLR 108 [37].
[7] Ibid [51].
[8] Ibid [36] referring to Mallet v Mallet (1984) 156 CLR 605, 608 per Gibbs CJ
[9] Ibid [41].
The High Court stated further at [42] :
…
42.In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).
Both parties sought that I alter the existing legal and/or equitable interest in property of each of them, and both submitted that it would be just and equitable to do so.
THE EVIDENCE
Both the husband and wife were crossed-examined as to their affidavit evidence and other relevant matters. The wife’s general practitioner, Dr Q (“Dr Q”) was also cross-examined. The husband did not seek to cross examine the evidence of Mr P and as such his evidence was unchallenged.
Statements of fact in these reasons are findings of fact on the balance of probabilities.[10] It is not necessary in these reasons for judgment to comment upon the entirety of the evidence including the evidence of each witness, nor to comment on every exhibit tendered. However every piece of evidence relied upon by the parties has been read and carefully considered by me.[11]
[10] Evidence Act 1995 (Cth) s 140.
[11] Bell & Nahos [2016] FamCAFC 244, [28]; Whisprun Pty Ltd v Dixon (2003) 200 ALR 447, [62].
Evidence of Mr P
Mr P is a certified practicing accountant and the managing Director of S Pty Ltd. That firm acts as accountants and advisers to the wife.
Mr P estimated the Capital Gains Tax (“CGT”) liability in respect of the sale of the E Town property, were it to sell at a figure of $975,000 as anticipated by the parties at trial, to be $158,625. That estimate was given on the basis of material provided to him by the wife, without input from the husband.
Evidence of Dr Q
Dr Q is a General Practitioner (“GP”) whose evidence is accepted by me. She has been treating the wife since 2014.[12] In the last two years, the wife has seen Dr Q on five or six occasions, and otherwise the wife has attended upon another GP in the same practice on eight, approximately, occasions. Additionally, there have been some phone consultations between the wife and Dr Q and/or another GP in the clinic.
[12] Affidavit of Dr Q filed 21 July 2021.
It was Dr Q’s evidence that the wife has suffered multiple serious health issues since 2014, including breast cancer in 2014 and 2017 which now “requires ongoing close surveillance”; skin cancer in 2013 and 2018 which also “has close ongoing monitoring”; and depression and chronic anxiety “ that requires medication and regular psychotherapy”.[13]Under cross-examination, Dr Q confirmed her affidavit evidence that the wife does not have capacity for paid employment due to “mental health” issues as suffered by the wife. The wife’s stated lack of capacity is not related to any physical injury or condition of the wife. Dr Q confirmed in her oral evidence that she had referred the wife to a psychiatrist and psychologist for further diagnosis of her mental health condition and treatment. No evidence was before me from any of these treating medical experts as to the wife’s current mental health functioning and ability for gainful employment.
[13] Ibid page 9.
ISSUES FOR DETERMINATION
At the commencement of the trial, Queen’s Counsel for the husband confirmed that a number of issues arising in respect of the parties’ asset pool as outlined in the parties respective case outlines were no longer in contention and no longer sought to be included in the asset pool, in particular, the addback of the parties legal fees and the cash withdrawals made by both parties at various times.
What did remain in dispute was whether the husband’s profit distributions for the financial year ended 30 June 2021, to be received by him in August, and October 2021, on which the husband had paid already considerable tax, was property or a financial resource. During the course of the trial, Queen’s Counsel for the husband conceded that the monies to be received in August 2021 should be included as property in the sum of $76,671.
Otherwise Queen’s Counsel for the husband submitted that the projected partnership profits to be received by the husband in October 2021, were “provisional and notional” and “contingent”, a future financial resource, but not property.
It was further the husband’s case that the partners at N Company ‘projected’ share “was just that…a projection and not actuality” and that while the husband was due to receive his remaining share in respect of the 2021 financial year in October 2021, that share “is uncertain…it can vary up, it can vary down from year to year…and it is all contingent on…the board signing off on the approved partnership distributions.” If I were to accept the husband’s submission, Queen’s Counsel for the husband submitted that the husband would agree to an 80 per cent distribution of the net assets to the wife including superannuation, instead of a 70/30 division of the net assets including superannuation in favour of the wife as proposed by him at the commencement of the trial.
Senior Counsel for the wife submitted that which was provisional was the quantum to be received by the husband, not the husband’s right to receive it as property. Senior Counsel for the wife submitted that the wife did not seek a portion of the husband’s future income, rather the wife sought that the money the husband has already earnt and paid tax on for the most part, in respect of the financial year ended 30 June 2021, be included in the property asset pool of the parties.
Senior Counsel for the wife submitted that the husband’s partnership distributions for the 2020/21 financial year should be differentiated from that of future income:
I would submit it can’t seriously be disputed that the husband’s entitlement to the distribution, enshrined in a written agreement with his partners, is anything other than recognised by law and forcible by law. It’s legally capable of ownership. These are all the matters which you look at to determine whether things are property or whether they’re not.
In my submission, the husband is entitled to his share of the equity pool by reason of the points he possesses. He possesses 100 points, according to the partnership’s terms, and he has – the most important aspect: he has already fulfilled his obligations to qualify for the performance pool component. The requirement for precise calculation, which seems to be his point, following the auditing of accounts, is not a contingency. … He has a current right to it and therefore, in my submission, it should go at this point into the asset pool properly for your Honour to determine.[14]
[14] Ibid p. 80, lines 15 – 30.
Whilst this matter was argued at trial and I was inclined to make a finding in accordance with the submissions of Senior Counsel for the wife, post-trial, the husband in actuality received his last profit distribution for the financial year ended 30 June 2021. In accordance with orders made by consent of the parties, evidence going to that fact, and the quantum of the receipt, together with the further taxation liability was placed before me thus making unnecessary any further consideration of this matter. The October 2021 distribution fell into the category of the August 2021 distribution, property for the purposes of the calculation of the asset pool available for division between the parties. The husband’s contribution to the asset pool was thereby increased, forming a further contribution as made by him post-separation amongst the myriad of contributions made by each of the parties.
THE ASSET POOL
The legal and equitable interests of the parties on the evidence, but not including the parties interests in the Suburb D Property, the E Town Property and the wife’s Motor Vehicle 3, all of which were to be sold by agreement of the parties, are as follows:[15]
[15] Comparative Balance Sheet excluding E Town, Suburb D and Motor Vehicle 3 (being sold).
Asset
Ownership
Value
B Street, C Town
Trust
$2,400,000
(in accordance with the Single Expert Valuation report of Mr O dated 25 November 2021)
Interest in N Company
Husband
$650,000
(as increased from $600,000 at trial consequent upon the payment made as referred to below).
Commonwealth Bank of Australia (‘CBA’) Offset Account ending #...51
Joint
$530,435
These funds represent the remaining funds derived from the inheritance received by the wife in 2018
Funds in CBA offset account #...95
Joint
$8,319
K Bank (‘KB’) account #...98
Husband
$221,505
K Bank account #...82 (tax provision account)
Husband
$147,000
Motor Vehicle 1
Wife
$80,830
Motor Vehicle 2
Husband
$25,000
4,370 U Company and V Company shares
Wife
$35,000
(wife’s inheritance)
Profit distribution for the financial year ended 30 June 2021, paid in August 2021
Husband
$76,671
Profit distribution for the financial year ended 30 June 2021, paid in October 2021
Husband
$964,558
(The husband received $$1,014,558 by way of Partnership Distributions in October 2021 as due to him for the financial year ended 30 June 2021. In October 2021 the sum of $50,000 was deducted from this amount and paid by way of a capital contribution to the husband’s equity in the N Company partnership to increase the equity to $650,000 as referred to above. Thus the husband received $964,558).
ATO Credit
Husband
$4,630
Total
$5,143,948
Liabilities
Ownership
Value
Mortgage to CBA secured against C Town Property
Joint
$1,231,594
ANZ loan used to fund capital contributions to N Company
Husband
$430,000
PAYG due on income earned in current quarter to date
Husband
$47,000
Income tax on N Company Trust Distributions for the financial year ended 30 June 2020
Wife
$19,190
$X4,882
(following leave to adduce further evidence)
$24,072
Additional income tax payable by the husband on income for the financial year ended 30 June 2021
Husband
$118,710
Total
$1,851,376
Superannuation
Ownership
Value
Super Fund 1
Husband
$96,674
Super Fund 2
Husband
$59,120
Super Fund 3
Wife
$7,890
Super Fund 4
Wife
$55,208
Total
$218,892
Total Net Assets Including Superannuation
$3,511,464
Additional Assets
At trial, the E Town Property was anticipated to be sold for $975,000 approximately. The mortgage, totalling $120,000 approximately, and the CGT which would fall due from the sale, which the wife contended would be approximately $158,000 but which the husband contended could be zero, needed to be accounted for before determining the sale proceeds less expenses of net sale.
Following leave being granted to adduce further evidence in the proceeding on 19 November 2021, there was evidence before me that the real property situate at M Street, E Town had sold on 13 November 2021 for $1,415,000.
The equity in the property after deduction of the mortgage was thus approximately $1,295,000.
The Suburb D property was valued at approximately $3,750,000. The mortgage outstanding was approximately $1,434,831. The anticipated net equity in the property was $2,315,169 less selling costs. The valuation of the Suburb D property had been obtained in February 2020. Queen’s Counsel for the husband submitted that the property had very likely increased in value in the intervening period and that the parties would achieve a price closer to $4 million. The wife would not commit to a figure above the old valuation when pressed in cross-examination. The parties could not agree a reserve price in respect of the former matrimonial home and required a mechanism in the orders to facilitate the determination of the reserve price and indeed all aspects of the sale. The sale of the Suburb D property has been discussed between the parties for a lengthy period. It should be placed on the market as soon as is possible.
It was not in dispute that the wife’s Motor Vehicle 3 had a value of approximately $21,000. The wife has now sold that vehicle but provided no evidence as to the net sale price. I shall assume a figure of $21,000 is appropriate to include in the calculation of the asset pool.
The above net figures as far as can be calculated for the E Town and Suburb D properties, together with the wife’s motor vehicle total a sum of: $3,631,169 ($1,295,000 + $2,315,169 + $21,000).
The total net asset pool including superannuation is: $3,511,464 + $3,631,169 = $7,142,633. This figure may be slightly impacted by any Capital Gains Tax.
The husband proposed that the wife receive a 10 per cent adjustment of the total net asset pool including superannuation in her favour on the basis of contribution, and a further 10 per cent adjustment on the basis of the s.75(2) matters. A 70 per cent adjustment in the wife’s favour given the inclusion of the husband’s August and October 2021 profit distributions.
The wife proposed that she receive a 20 per cent adjustment of the total net asset pool including superannuation in her favour on the basis of contribution, and a further 10 per cent adjustment on the basis of the s 75(2) matters. An 80 per cent adjustment in her favour.
STANFORD CONSIDERATION
The property interests of the parties are identified above. I am satisfied that it is just and equitable to make property orders adjusting the interests of the parties. I turn to a consideration of s 79(4) of the Act, set out below:-
(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) 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.
Whilst I have considered as a precondition to making an order for property settlement whether it is just and equitable in all the circumstances of the particular case to make such an order, the Full Court of the Family Court in Bevan & Bevan (2013) FLC 93-545 made clear that the just and equitable consideration is one that “permeat[es] the entire process”.[16]
CONTRIBUTIONS
[16] Bevan & Bevan (2013) FLC 93-545, [86].
Commencement of Cohabitation
The parties agree that when they commenced their relationship in December 1998, neither party had any assets or liabilities of significance save for each owning a motor vehicle and the husband having a student loan of a figure short of $30,000 in his mother’s name, which he repaid over several years during cohabitation, and the wife having some credit card and tax debt in a sum unknown to me.[17] The parties rented until they purchased their first property in Suburb W (“Suburb W Property”) for $390,000 in 2000. They applied the first home owners grant as made available by the State Government to the purchase; the proceeds of sale of the wife’s motor vehicle; and mortgage funds. The husband’s family guaranteed the parties loan.
[17] Affidavit in reply of husband filed 28 July 2021 page 7.
During Cohabitation
In 2004, the husband became a partner of N Company. The parties sold the Suburb W Property for $590,000. The parties then rented until September 2005, when they purchased Z Street Suburb D (“Z Street Property”) for $745,000 using the net sale proceeds from the Suburb W Property and some borrowings. The wife’s uncle Mr AA (“Mr AA”) gave the parties $20,000 toward the purchase of the Z Street Property. According to the wife this amount was a gift,[18] whereas the husband deposed that this was a loan that they failed to repay in full before Mr AA passed away.[19] I prefer the evidence of the wife. The purchase of the Z Street property coincided with the birth of X.
[18] Trial affidavit of the wife filed 21 July 2021 page 7.
[19] Affidavit in reply of the husband filed 28 July 2021 page 8.
In April 2009, the parties sold the Z Street Property for $1,065,000. They again rented until they purchased the former matrimonial home, the Suburb D Property, in May 2010 for $1,932,500. The net proceeds of the Z Street property were applied to the purchase together with a mortgage advance. Additionally, on the wife’s evidence which I accept, the wife’s mother and uncle gifted them a further $40,000 in total to assist with this purchase. The husband’s evidence as to that gift was that he was not aware of the wife’s relatives contributing any money in this manner. The property was purchased in the name of the wife.
In 2010, the husband received an inheritance of $60,000 or $80,000 from his deceased father’s estate. These monies were put toward the purchase of BB Street, C Town (“BB Street”) in December 2012 which was purchased by the parties for approximately $470,000.[20] The parties renovated and landscaped this property, the wife performing considerable physical work in the garden, the parties performing some of the renovation works and otherwise the work being performed by professionals engaged by the parties.
[20] Trial affidavit of the husband filed 8 July 2021.
In 2011, the husband commenced to travel to Brisbane for work. That work continued until mid-2016 when the project concluded.[21]In the two months prior to its conclusion, the husband was living, full time, in Brisbane. For the 18 months prior to that time, he was in Brisbane from Monday to Friday of each week. In the years prior to that, the husband spent, on his evidence, “one or two days a week and sometimes less” in Brisbane. On the wife’s evidence, the husband was living and working in Brisbane for the majority of every week from 2011 until mid-2016, returning home only on week-ends and not all week-ends. I am unable, on the evidence, to make a finding as to which of the recollections of each of the parties is correct as to those earlier years spent by the husband in Brisbane save that I am inclined to accept that the husband spent greater periods of time than he asserts. Nothing turns on this however. The wife made a significant contribution to the children’s care in the husband’s absences. The husband made a significant contribution to the family in his working interstate, and so earning a large income with which to provide for the welfare of the family and otherwise to advance their accumulation of wealth.
[21] Trial affidavit of the wife filed 21 July 2021 page 7; affidavit in reply of the husband filed 28 July 2021 page 9.
In October 2014, and during the Brisbane years, the wife was diagnosed with cancer and underwent surgery.
In March 2015, BB Street sold for $687,500. In the same year, the wife received a half interest in the E Town Property, which is a vacant block, and shares from her uncle, Mr AA’s, estate. In August 2015, the wife’s mother transferred the other half interest in the E Town Property to the wife gifting her the unencumbered title to the property.
In 2015, the parties established J Pty Ltd (“the Trustee Company”) as trustee for J Trust (“the Trust”). The parties are both directors and equal shareholders of the Trustee Company. The husband deposed that the purpose of the Trustee Company was to act as trustee for the Trust and to be used by the wife “to operate an advisory business”.[22]
[22] Ibid.
In March 2015, the parties purchased the C Town Property for $1,350,000 and registered the property to the Trustee Company. The purchase funds were derived from the net sale proceeds of BB Street and a mortgage obtained from the Commonwealth Bank of Australia. The husband deposed that he “spent around $700,000 on the property” with “the cost of landscaping, heating, painting and related works in excess of $400,000”.[23] The wife disputed this figure claiming the amount spent was $132,000, considerably less. Insufficient evidence was before me to make any finding about this. Again, nothing really turns on it. There is no suggestion that the husband did not apply his income for the benefit of the family. Such funds as were applied to the works carried out, derived from the husband’s income. The husband also included in the figure of $700,000 the mortgage repayments made by him, which are continuing. The landscaping included the planting by the wife of trees from her deceased mother and uncle’s gardens. The C Town property is considered by the wife to be her home.
[23] Ibid.
On 20 December 2016, the parties borrowed against the E Town Property a sum of $130,000 to fund urgent repairs to the Suburb D Property. The husband is ongoing meeting this obligation until settlement of the sale of this property.
in 2017, the wife’s mother passed away. The wife inherited $1,410,882 from her mother’s estate over a series of distributions commencing in June 2018 and continuing until September 2019. Of the wife’s inheritance, $530,000 remains in the offset account. Senior Counsel for the wife submitted that included in the wife’s expenditure of her inheritance was the sum of $544,588 spent of legal fees and $225,000 as spent on living expenses. It was the wife’s case that she should receive an adjustment for this contribution to living expenses post separation. That sum cannot be sustained on the evidence. There was insufficient evidence from the wife as to the application of these monies on reasonable living expenses in circumstances where the husband has met the wife and children’s expenses in the manner he has. Clearly, the wife has paid for her life coaches and other treatments she has chosen to undertake as described later in these reasons. She has made payments for living expenses of approximately $80,000 as set out by her in her affidavit evidence which I accept and take into account.[24] The wife also purchased, prior to the placement of her inheritance funds in the offset account, a new vehicle in November 2019 for $97,300, a recreational boat for $11,190 and a bicycle.
[24] Trial affidavit of the wife filed 21 July 2021 at paragraph 48.
On 15 June 2018, the wife entered into a deed of agreement with her brother pursuant to which the wife now holds Y and X’s entitlements pursuant to her mother’s estate on trust for the children until they attain the age of 21 years. Those funds exist in a share portfolio which had a value of approximately $150,000 in 2017. Such funds are available to the wife to assist in her support of the children. The wife refuses to use these monies for that purpose, and instead proposes that such funds be kept preserved for the children to receive upon each reaching the age of 21 years, and in particular to enable the children to purchase a home. These funds are however available to the wife to apply in the support of the children.
Post-Separation
The parties separated in or about late August/early September 2018, when the husband moved out of the Suburb D Property. The wife and the children remained in the family home. The husband temporarily moved into the parties’ house at the C Town Property before moving to his current residence at the R Street Property in November 2018, to be closer to the children. Since the husband moved into the rental property, the wife has continued to have occupation and use of the C Town Property, mostly to the exclusion of the husband, and the Suburb D Property.
The husband has continued to pay, since separation, the mortgage repayments on all the properties, rates, taxes (including land tax), child support, school fees, medical expenses, and insurances including health insurance and life insurance. The parties’ mortgage between June 2020 and June 2021 was limited to interest only but has now reverted to principal repayments plus interest. I do not propose to require the wife to convert those mortgages back to an interest only loan in circumstances where there shall soon be a release of the husband from that obligation, he has ample capacity to pay, and the wife can benefit in some very small way. The husband has, I note, continued to pay periodic child support payments to the wife for the support of X regardless of where X is actually living. He has not sought any adjustment in his liability from the Child Support Agency. The husband has also paid non-periodic payments of child support which shall continue as hereafter described.
The wife has received ongoing trust distributions from the N Company Trust (“N Company Trust”) of $7,000 a month, which reduced to $5,500 a month, in approximately November 2020.[25] Additionally, the wife receives a further distribution in October each year to meet any taxation liabilities in respect of this receipt of income.
[25] Trial affidavit of the wife filed 21 July 2021 at paragraphs 9-10.
On 14 January 2020, orders were made by consent for the wife’s inheritance to be paid into an offset account with the Commonwealth Bank of Australia against the parties’ mortgage. The wife transferred $1,138,546.96 into the parties CBA account ending #...51 on 11 February 2020.[26] The wife has since drawn down on the offset account for living and other personal expenses and the payment of her legal fees.
[26] Trial affidavit of the husband’s filed 8 July 2021 at paragraph 35.
The totality of the above myriad of contributions have been made in the context of a lengthy marriage.[27] No one contribution is isolated from another, and all have been taken into account.
[27] Williams & Williams [2007] FamCA 313 at [26].
RELEVANT SECTION 75(2) MATTERS
The husband is aged 50 years and is in good health.
The wife is aged 53 years and has experienced a number of health issues over the years. Counsel for the wife submitted that the wife is in “fragile health.” She is genuinely concerned that her cancer will return.
Queen’s Counsel for the husband submitted that in respect of the mental health issues as experienced by the wife, “there’s no cogent medical evidence as to [the wife’s] inability” to find work, and that she is otherwise in good physical health.
It is the husband’s case that the wife is employable, and while she will not earn what the husband is earning, she could adequately support herself. I am of the view that is not evident for the next 3 years whilst the wife remains living in Melbourne and caring for the children, in particular Y, to the extent that she does. I accept that the wife has a present inability to work given her care of Y, her anxiety in respect of X’s current ill health, and her own ongoing mental health issues. These include, as conceded by the husband, a long battle with depression for which she is prescribed antidepressant medication, and significant issues with anxiety.[28] Additionally, the wife has not worked since 2005 and is not qualified in any particular field. The wife left school at the end of year 10 and thereafter attended CC School. She will need time to make her capital income producing, and to obtain some qualifications in a field of work that may interest her and in relation to which she has capacity.
[28] Transcript 3 August 2021 p 35 line 38.
While the husband’s income varies year to year, he is a partner at N Company and it is not in dispute that his income and earning capacity is very significant and will exceed any income that the wife may hereafter receive.[29] The husband’s net taxable income for the financial years ended 30 June 2018, 2019, 2020, and 2021 was approximately $1,264,446, $1,524,002, $2,189,820 and $2,430,656 respectively. The husband is now in receipt of income of $94,254 a month. Additionally he will receive three special distributions of $80,789 in accordance with the budget projection in each of February, May, and August 2022. Thereafter it is projected that he will receive a sum of $527,505 in October 2022. Taxation payments will be due in respect of all of these funds. The wife earnt no income from her personal endeavours during the same years but rather received, as the nominated beneficiary, Trust distributions from the N Company Trust, most recently in the sum of $99,758 for the financial year ended 30 June 2021.
[29] Transcript 4 August 2021 p 8.
The husband has re-partnered but does not share any expenses with his partner, who owns her own home. The husband is unaware of his partner’s income. The wife has not re-partnered.
Each of the parties shall be comfortably provided for with the wife having considerable capital at her disposal to invest as she sees fit, in addition to the unencumbered C Town property with a value of $2.4 million. The wife seeks to have the C Town Property transferred to her sole ownership. The husband does not object to this alteration of property interests. The wife does not intend to live in the property however, for at least the next three years, save for on weekends and holidays. She seeks that the husband pay her rental in Melbourne to accommodate herself and the children, and he shall in effect do so. That is reasonable given the wife’s need to care for Y in particular and Y’s ongoing attendance at G School.
The husband has paid regular child support payments together with the payment of extensive other expenses for the children, including private school fees and expenses and those other expenses as set out elsewhere in these reasons.
Conclusion
The total asset and superannuation pool is approximately $7 million if an allowance is made for CGT as contemplated by the wife. This figure in all probability will increase with an increased sale price for the Suburb D property in respect of which the wife shall benefit to greater extent than the husband.
In my view, a 70 per cent adjustment to the wife, and 30 per cent adjustment to the husband of the asset and superannuation pool is just and equitable in the circumstances of this case. 70 per cent is a figure of approximately $4,900,000. 30 per cent is a figure of approximately $2,100,000. A differential of $2,800,000.
The wife will retain the C Town property at $2.4 million; the Commonwealth Bank of Australia offset accounts, her shares, her motor vehicle and her superannuation. Her retention of these assets, less her taxation liability, of $24,072, is a sum of $3,093,610. She will then receive a further cash sum of $1,806,390 approximately.
Spousal Maintenance
Pursuant to s 72(1) of the Act a party to marriage has a right to spousal maintenance if they are unable to adequately support themselves because:
(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;
If the court considers it proper to do so, pursuant to s 74(1) of the Act, the court may make an order for spousal maintenance. In determining whether to make an order for spousal maintenance, the court “is obliged by s 75(1) to take into account the matters referred to in s 75(2) and only those matters.”[30] Section 75(2) provides a “comprehensive checklist”.[31]
[30] Hall v Hall (2016) FLC 93-709 at [5].
[31] Ibid.
The test for spousal maintenance is well established and put simply is whether one party to the marriage is unable to support themselves adequately and whether the other party to the marriage reasonably has the capacity to support them.[32]
[32] Eliades & Eliades (1981) FLC 91-022, 76,232.
The wife seeks that the husband pay her $3,500 per week by way of spousal maintenance in perpetuity.[33] That is a sum of currently $182,000 per annum which is sought to be increased in accordance with any Consumer Price Index (“CPI”) increase.
[33] Case Outline of the wife filed 30 July 2021 page 8.
The husband originally sought that the wife’s application for spousal maintenance be dismissed.[34] During the trial, the husband proposed that the wife continue to receive the N Company Trust distributions for the next three years, to conclude with distributions for the financial year ended 20 June 2024, anticipated to be approximately $86,000, with the wife to pay income tax on the distributions of approximately $19,000.[35] That would see the wife receive $67,000 a year, which equates to approximately $1,076 a week in spousal maintenance from the husband. The husband additionally agreed to make payments of spousal maintenance, from whatever source, until 31 December 2024, that being the year in which Y will complete her secondary schooling. From this money, the wife will be required to meet a rental cost of approximately $1,000 a week from perhaps June 2022, upon the settlement of the sale of the Suburb D property, until the end of 2024, when on her evidence she will move from a rental in Melbourne to her home in C Town.
[34] Case Outline of the husband filed 30 July 2021 page 9.
[35] Transcript 3 August 2021, p. 85 lines 25 – 35.
As stated above, the husband asserted that the wife could obtain employment or become self-employed. He claimed that the parties’ houses in C Town, as acquired by them sequentially, but as conceded by him being both used as holiday houses by the family, were “commercial enterprises” in relation to which the wife sought to work sales and design. He described her as “quite capable of managing to work and undertake all of those functions and issues.” The wife’s engagement in these renovation projects was, on her contrary evidence, in the context of her interest in creating essentially personal, comfortable and inviting holiday houses for the use of the family.
BB Street was purchased in the husband’s name, he claimed, to rent out to third parties, such that the husband could set off his income against the negatively geared BB Street property. That did not occur. It was never rented out. The wife disputed the husband’s characterisation of the property as a “commercial enterprise”, and I accept her evidence that the parties did not intend to rent it out at that particular time. On the evidence of the parties, the property was used by the family who derived enjoyment from their use of it. Whilst the wife’s contribution to the ambience of the home may have enhanced the property, it falls a long way short of establishing that the wife is or desired to be a property developer and/or an interior designer capable and desirous of attracting clients to establish a successful business. BB Street was subsequently sold by the parties to enable their purchase of the C Town property.
In 2015, the C Town property was purchased by the parties in a trust structure as determined by the husband, and on the advice of the parties accountant. The wife accepted the decision made by the husband and the accountant of the parties as to the ownership of the property. Such ownership structure did not signify that the wife was engaged in the business of property development. Her evidence was that the C Town property had been the parties’ home “for the last six years. It has been our home.” The parties agree that the wife will keep this property. The wife wishes for the property to be transferred, to her sole name. Such transfer will not incur a stamp duty cost and the parties do not expect to pay any capital gains tax. The wife will not contemplate the leasing of this property in order for it to produce income that would become available to her. That is in the context of her and the children’s attachment to it and frequent use of it. It is not unreasonable in the circumstances of this family’s wealth that the wife wishes to retain the property for the exclusive use of herself and the children until the end of 2024.
I was required to consider the living expenses of the wife as claimed by her. When cross-examined by Queen’s Counsel for the husband, the wife conceded that the sums as claimed by her for kinesiology, acupuncture, and traditional Chinese medicine were significantly overstated. Those expenses are in the total $90 a week and not $427. She gave evidence that the life coach she engaged for a 24 week professional coaching health package, was at a cost of $8280. Additionally, the wife had a 55 minute phone call with Mr T, also a life coach, who advertised “to dive deeper and create massive real shifts in your life”. The cost of the call was approximately $1,400.These life coaching treatments were not medical treatments and not necessary or reasonable expenditure in the context of a spousal maintenance claim. Nor was the wife’s expenditure on herbal supplements in quantum as claimed by her, at the direction of a naturopath; an intensive program of hypnotherapy as undertaken by the wife for one month over May and June 2021, at a cost of $4,000 in circumstances where the wife had previously attended upon a hypnotherapist on one occasion in 2018, and for a “couple of sessions” in 2019. Additionally, the wife commenced to attend, in May 2021, upon a chiropractor fortnightly at a cost of $180. Her evidence as to her need for this attendance was that she had a very bad car accident when aged 18 years, and has had back issues since that time. There was no medical evidence to support the need for that attendance. All of the attendances as described in this paragraph, had not been at the recommendation or instigation of the wife’s treating medical practitioners. The wife’s expenses claimed in respect of these attendances was evidence which was unreliable, especially in the context of her overstating of her expenses. The wife’s attendance upon medical practitioners had reasonably included her GP, her oncologist, her psychiatrist and plastic surgeon. She has also attended upon a psychologist as referred by her GP. The wife’s medical practitioners could have provided evidence to the court as to the need for the wife to now attend, following separation, the raft of persons she attends upon. No evidence was forthcoming and I infer it would not have assisted the wife’s case.
The expenses as otherwise claimed by the wife in her financial statement were challenged by the husband to some extent. Clothing and shoes at $500 a week ($ 26,000 a year); and entertainment and hobbies of $600 a week ($31,200) were said by the husband to be “excessive on any view”.[36] A sum total of $10,000 a year on gifts ($192.31 a week) and nearly $7,000 a year ($134.61 a week) on hairdressing, was stated by the husband to be “very expensive”.[37] The wife’s overall weekly expenditure sum of $5,100 the husband described as “extraordinary expenditure”. Importantly, his evidence, which I accept, was that the wife’s claimed expenditure at this time “doesn’t match the expenditure that we lived by when we lived together.” The wife did not incur kinesiology, acupuncture, Chinese medicine, nor chiropractic expenses when the parties lived together. The wife did not engage in hypnotherapy and did not use the services of a “life-coach”. She did not incur other expenses as highlighted by the husband to such an extent.
[36] Transcript dated 3 August 2021, p. 72 line 10-17.
[37] Ibid.
Whilst the parties resided together, the wife did attend upon a psychologist as referred by Dr Q. That attendance has continued for approximately six years, on a fortnightly basis. A necessary expense.
The wife’s total average weekly income as sworn by her was $2,107 as at 21 July 2021. Her weekly expenses as claimed were $6,178 leaving a deficit of $4,071 a week.
The wife’s receipt of income comprised child support payment and distributions from the N Company Support Services Trust of $1,269 a week.
Upon settlement of the sale of:
(a)the Suburb D property, the wife will cease to incur rates and other related expenses of $115 per week; and
(b)the E Town property, the wife will cease to incur rates and other related expenses of $67 per week.
The wife will continue to incur weekly expenses of $193 for the C Town property.
The wife will cease to incur insurance premiums for the Suburb D property home and contents insurance of $85 per week but this may be substituted in respect of the Melbourne rental property. Likewise, the Foxtel weekly expenditure.
The wife does not pay health insurance and is covered within the family care of the husband but ultimately will incur some health insurance single payment.
Whilst overseas holiday expenses were not included in the wife’s calculations of her expenses, her yachting and skiing expenses were. Holiday expenses were said to be $580 per week when expended.
The wife has a capacity to contribute to her own support with the funds that will be available to her, certainly to meet those expenses as claimed by her which are not necessary for her to adequately support herself.
The wife will have additionally the monies received by her in the Trust distribution to her of October 2021, which has been the means by which the husband has paid spousal support to date, and which I have quarantined from the asset pool those funds being needed for the wife’s support. This, together with her ongoing occupation of the Suburb D property until settlement of the sale, which is rent and mortgage free to her, as is the C Town property until transfer to her ownership, provides a financial benefit to the wife.
This consideration does not involve the husband’s capacity to pay. It is the wife’s inability, in the circumstances of this case, to support herself adequately having regard to any relevant matter referred to in sub-section 75(2). The wife’s adequate support, which she is unable to meet, in my view, requires a payment from the husband to the wife of $2,700 a week.
I will not make an order for spousal maintenance to be paid beyond the 31 December 2024. The children will both be over 18 years. The wife will have ceased to rent in Melbourne and taken up permanent residence in C Town on her evidence. Her expenses will differ significantly from what they are now.
The wife’s income, earning capacity and capital available to her on which to earn income beyond that time is unknown. She will have had significant capital to invest as a result of this proceeding, even without income receipt from the C Town property. Likewise, the husband’s position may be somewhat different. The parties’ finances have been intermingled since separation in 2018. They will continue to be so to some extent until the end of 2024, when the financial relationship between the parties should conclude.
CHILD SUPPORT
Both the husband and the wife sought a departure from the administrative assessment of child support pursuant to section 117 of the Child Support Assessment Act 1989 (Cth) (“the Assessment Act”) in respect of the children. The husband presently pays the sum of $838 per week, on $3,591 per month in child support.
To make a departure order the court must undertake a three step process and be satisfied pursuant to s 117(1)(b) of the Assessment Act that:
(1)one of the grounds in s 117(2) is established;
(2)pursuant to s 117(4) that it would be just and equitable to make a departure order; and
(3)it is otherwise proper to make such an order in accordance with s 117(5).
In determining whether to make an order, the court must also consider that:
Where there has already been a payment or a transfer or settlement of property made by the liable parent for the benefit of the child, then that is a factor that may be taken into account in determining whether or not it is appropriate to adjust the child support that would otherwise be liable to be paid by that parent. The section is designed to alleviate the burden of a parent having to effectively pay twice for the child, once by means of a transfer of property and then again by payment of periodic child support. The words of the section are clear. It applies only to transfers made by the liable parent.
The wife sought that until X reaches 18 years of age, the husband pay $3,700 per month or $1,850 per child per month. Thereafter, until Y reaches 18 years of age, the husband pay $2,500 per month in child support payments to the wife. In addition, the wife sought that the rate of child support payable by the husband to the wife increase on 1 July each year in accordance with the consumer price index for Melbourne.[38]
[38] Case outline of the wife filed 30 July 2021.
The wife further sought that the husband pay non-periodic child support pursuant to s 124 of the Child Support (Assessment) Act 1989 (Cth) for the children’s additional costs as follows:
(a)private school costs of each child;
(b)cost of a tutor for each child to have one tutorial per week;
(c)extra-curricular activities of the children including sailing and snow skiing;
(d)children’s mobile phone plan payments;
(e)private health insurance at the highest level of cover with their existing insurer or such other insurer as agreed between the parties; and
(f)any out of pocket costs relating to the children’s medical expenses.
The husband initially sought that he pay periodic child support for the children of $3,500 per month or $1,750 per child per month until X reaches 18 years of age, and thereafter, $1,750 per month for Y until she reaches 18 years of age. At trial, the husband sought no periodic child support departure order in respect of X, but rather sought that any administrative assessment as was in place from time to time should apply. This was squarely based upon the reality of X’s age and living arrangements. The wife conceded that if X was not living in her household to the extent that Y was, then the husband should not be required to make a similar payment for both children. The wife also conceded that if X was living with his father, then the husband should not be obliged to make a contribution for his support to her household. I conclude that a departure order in respect of X in these circumstances would not be just and equitable and otherwise proper. The parties can notify the Child Support Agency of the ongoing variations in X’s living arrangements for the necessary adjustments to be made. As to the monies payable to the wife for the support of Y, there was little to argue about if the husband was also paying a periodic sum in respect of X. But he may not be. I propose to order that the husband pay the sum of $2,000 per month for his daughter’s support until she reaches the age of 18 years as adjusted in accordance with the Consumer Price Index. Whilst the husband has been and is generous in his payments overall for the children, he is the only parent with an income and earning capacity at the present time, and that income and earning capacity is very significant. He does not share at all in the daily expenses of Y while he and his daughter are not spending regular time together. The wife will be able to provide for the proper needs of the parties daughter with this monthly sum as a periodic payment additional to the non-periodic payments as agreed to by the husband for the most part. Further, I note the husband will be, by the payment of spousal maintenance, contributing to the rental accommodation of the wife and children in Melbourne for a further three years.
Having first determined the question of departure for periodic child support payments, I find the husband agrees that he should and will pay the children’s:
(a)private school costs including but not limited to tuition fees, uniform and camps;
(b)cost of tutoring as agreed between the parties in writing;
(c)cost of extra-curricular activities such as X’s guitar lessons; costs associated with the children’s sailing activities including “sailing gear”; and equipment; boat repairs and the yacht club membership for the children at C Town, amongst other expenses as agreed between the parties in writing;
(d)private health insurance at the current level of cover; and
(e)any out of pocket medical expenses, including psychologist expenses for both children.
Whilst the husband did not propose to meet additionally the cost of the children’s mobile phones as sought by the wife, he did not particularly oppose the payment by him of that expenditure. Given the parties current concerns about X in particular, that is an expense that the husband should bear. The husband did not propose to meet the cost of skiing trips for the children, and that is an expense that should be agreed by the parties and not one for which the husband, without limit, is required to pay on the basis of those matters required to be considered by the court in an application of this type.
The periodic payment order shall not be reduced (in whole or in part) by the amount the husband will pay towards the children’s expenses pursuant to s 125 of the Assessment Act.[39]
[39] Ibid [79].
OTHER
The wife also sought an order that the husband transfer half of his frequent flyer points to her. Senior Counsel for the wife submitted that these points are transferable. It was agreed by the husband that half of these points should be so transferred to the wife. I am satisfied that it is appropriate to make such order.
The husband also indicated at trial that he is happy for the wife to have sole use and occupation of the C Town property pending any transfer in ownership of that property to the wife. He would like his sports gear, inflatable paddleboard and other personal items. The wife indicated at trial that the husband could “have what he wants”. The husband also sought the parties’ marriage certificate be provided to him. The wife has not sighted the certificate in recent times but will search for it. I shall make an order to this effect.
The wife gave evidence that she had made an insurance claim, although not necessarily in written form, in respect of damage sustained to the house property and/or the out buildings of the Suburb D property. Payment out of any claim made by the wife as the sole registered proprietor of the property should be paid to the parties in the same apportionment of 70 per cent to the wife and 30 per cent to the husband.
I certify that the preceding one hundred and eleven (111) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hartnett. Associate:
Dated: 17 December 2021
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