Eacret & Eacret
[2021] FedCFamC1F 300
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Eacret & Eacret [2021] FedCFamC1F 300
File number(s): SYC 4450 of 2021 Judgment of: REES J Date of judgment: 14 December 2021 Catchwords: FAMILY LAW – INTERIM PARENTING – Independent Children’s Lawyer appointed to represent the interests of the 16 year old child.
FAMILY LAW – INTERIM FINANCIAL RELIEF – Where the husband has access to income from various corporate entities and trusts in his legal possession or under his control – Orders for the husband to pay the wife $285,000 by way of interim costs – Orders for the husband to meet the wife’s application for spousal maintenance and child support with the option of those payments being made by way of trust distributions.
FAMILY LAW – CHILD SUPPORT DEPARTURE ORDER – Where the husband’s sole control of the income of the marriage and he’s being able to notionally distribute income to the wife so as to distort the application for child support constitutes a “special circumstance” – Application for child support departure order granted.Legislation: Family Law Act 1975 (Cth) ss 79, 83(2), 117(2A) Cases cited: Gyselman and Gyselman (1992) FLC 92-279
Philippe and Philippe (1978) FLC 90-433
Savery and Savery (1990) FLC 92-131
Division: Division 1 First Instance Number of paragraphs: 90 Date of hearing: 9 December 2021 Place: Sydney Counsel for the Applicant: Mr Kearney SC Solicitor for the Applicant: Pearson Emerson Family Lawyers Counsel for the Respondent: Mr Gould Solicitor for the Respondent: Watts McCray ORDERS
SYC 4450 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS EACRET
Applicant
AND: MR EACRET
Respondent
ORDER MADE BY:
REES J
DATE OF ORDER:
14 DECEMBER 2021
THE COURT ORDERS, PENDING FURTHER ORDER:
1.That the wife have sole occupation of the premises at B Street, Suburb C.
2.That pursuant to Section 68L of the Family Law Act 1975 (Cth), an Independent Children's Lawyer shall be appointed to represent the child the subject of these proceedings, namely:
X born … 2005.
3.That the Legal Aid Commission of New South Wales is requested to make arrangements as soon as possible for the appropriate representation of the child and for that purpose:
(a)The Court advise the Senior Solicitor, Family Law Litigation Section of Legal Aid NSW of this order; and
(b)Each party make available to Legal Aid NSW (Sydney Office) Forthwith copies of all applications and affidavits upon which that party relies and all relevant reports and documents.
4.That the mother and father shall facilitate the attendance of the child upon the Independent Children’s Lawyer on dates and at times as requested by that representative.
5.That upon their appointment, and after filing of an Address for Service, the Independent Children’s Lawyer may inspect and, if permitted, copy all documents previously produced to the court in the proceedings and released to the parties.
6.That within 30 days the husband pay to the wife the sum of $285,000 by way of interim property settlement.
7.That the husband pay to the wife spousal maintenance in the sum of $411 per week into a bank account nominated by the wife.
8.That the husband cause to be paid, as they fall due, the following expenses referable to the property at B Street, Suburb C:
(c)Mortgage payments
(d)Land tax payments
(e)Water and council rates
(f)Building insurance
9.That the husband cause the luxury motor vehicle currently driven by the wife to remain available for her use and cause to be paid, as they fall due, the costs of roadside membership, registration, insurance and maintenance of the vehicle.
10.That 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 X born … 2005, such that the husband pay by way of periodic child support for the child the sum of $530 per week, with the first payment to be made within 7 days of the date of these orders.
11.That pursuant to section 124 of the Child Support (Assessment) Act 1989 (Cth) and in addition to the periodic child support at order 10, the husband shall, as and when they fall due, pay:
(a)All fees, costs and expenses for the child as listed on all tax invoices issued by D School to the parties (or such other school as the child may attend by agreement between the parties in writing or as ordered by the Court) to the parties, including but not limited to tuition fees;
(b)The costs of all school and sports uniforms, domestic school excursions, stationery, textbooks and equipment, extra-curricular activities, sports and sports camps and sports equipment in respect of the child;
(c)All instalments at the highest scale to E Health Fund, including cover for private hospital, optical, physiotherapy, psychology, dental and orthodontic expenses in respect of the child;
(d)Any private hospital, optical, physiotherapy, psychology, dental, orthodontic and other medical expenses in respect of the child not able to be recovered by Medicare or from the child's private health insurer; and
(e)Mobile telephone expenses and streaming services in respect of the child.
12.That from the date of these orders:
(a)the wife shall forward unopened all correspondence received by her as and from the date of these Orders and addressed to the husband, the husband's Entities and/or F Company to V Street, Suburb G, NSW within 7 days of receipt;
(b)the wife shall take no steps to change the postal address for the husband, the husband's Entities and/or for the husband in his capacity as a director of Eacret Pty Ltd and/or a member of the Eacret Super Fund from W Street Suburb H, NSW;
(c)the husband shall take no steps to change the postal address for the wife in her capacity as a director of Eacret Pty Ltd and/or a member of the Eacret Super Fund from B Street, Suburb C, NSW;
(d)the wife shall forward a copy of all correspondence received by her in relation to Eacret Pty Ltd and/or the Eacret Super Fund to V Street, Suburb G NSW within 7 days of receipt;
(e)the husband shall forward a copy of all correspondence received by him in relation to Eacret Pty Ltd and/or the Eacret Super Fund to B Street, Suburb C, NSW within 7 days of receipt;
(f)the wife shall use her best endeavours to ensure any invoices received by her in respect of expenses referred to in Order 8 are valid tax invoices made out to K Pty Ltd as trustee for the K Trust and shall forward such invoices expediently by email to …;
(g)the wife shall use her best endeavours to ensure any invoices received by her in respect of expenses referred to in Order 9 are valid tax invoices made out to R Pty Ltd and shall forward such invoices expediently by email to …;
(h)the husband shall pay or cause to be paid in full the invoices referred to in Orders 12(f) and 12(g) within 7 days of receipt and expediently notify the wife of payment by email to … with proof of payment, save that in the event that the invoice is paid by the wife, the husband shall pay or cause the wife to be reimbursed for the amount paid within 7 days of receipt of the email and proof of payment by the wife.
13.That on or before 29 December 2021, the wife shall make the husband’s personal property remaining in the home at B Street, Suburb C available for collection by a carrier arranged by the husband.
14.That the husband is permitted to make the payments specified in Orders 7, 10 and 11 by way of distribution to the wife or to X from a trust provided that the husband is solely responsible to pay, as it falls due, any tax assessed to be paid consequent on those distributions.
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 a pseudonym Eacret & Eacret has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
REES J:
Ms Eacret (“the wife”) and Mr Eacret (“the husband”) were married in 1996 and separated on 4 March 2020. They have three children who live with the wife in the former matrimonial home at Suburb C. The two elder children are adults. Mr M is aged 20 and engaged in full time university studies and working in administration. Ms N is aged 18 and finished her Higher School Certificate in 2020. She has casual work. X, who is aged 16, attends secondary school.
The wife filed an Initiating Application in June 2021 in which she sought a suite of interim orders. That application was amended on 12 October 2021. By her Minute of Orders contained in her Outline of Case, the wife seeks orders on an interim basis in relation to the following matters, noting that her application in relation to adult maintenance for Mr M is withdrawn and disclosure issues are not pressed, having regard to a recent flurry of mutual disclosure:
·Parenting
·Sole occupation of the former matrimonial home
·Personal protection orders against the husband
·Interim costs
·Spousal maintenance
·Preservation of assets
·Child support departure
The husband seeks orders for:
·Parenting
·Financial disclosure
·Mandatory injunctions
·Attendance at mediation
·Family therapy with X
The husband opposes the wife’s applications for spousal maintenance, interim costs and child support departure orders.
PARENTING
In summary the wife seeks orders:
·That X live with her, a matter about which there is not and, has not been an issue.
·That X spend time with the husband in accordance with X’s wishes.
·That each parent facilitate online or telephone contact with the other in accordance with X’s wishes.
·That the husband be at liberty to provide X with cards and letters.
·That the husband be restrained from causing X to consult a therapist other than a named person.
·Mutual non denigration and not discussing the proceedings with X.
·Maintaining a current passport for X.
·Overseas travel.
In relation to most, if not all of these applications, they are in similar or identical terms to the final orders sought by the wife. In most cases, there is no evidence of any urgency or any reason to deal with these issues on an interim basis.
Dealing firstly with X’s residence, there is no evidence that the husband has sought or suggested that X live with him. X is 16 years of age and will, no doubt, live with whichever parent he chooses. The evidence raises no issue in relation to residence. I do not propose to make any order relating to residence.
Similarly, in relation to the time X spends with the husband, and X’s communication with him, absent any independent evidence of X’s views on the matter I do not propose to make any order other than to appoint an Independent Children’s Lawyer.
There is no evidence that the husband has sought to involve X with any therapist.
There is no evidence that the husband has denigrated the wife to, or in the presence of X or that he has communicated to X information about these proceedings.
It appears that neither party opposes X having a current passport but they refuse to agree about the logistics of making the application. There is no evidence that either proposes overseas travel for X. There is no present need to deal with the issue of a passport or of overseas travel. Nothing prevents the parties from completing the necessary paperwork if they want the passport to issue.
The wife’s applications for interim parenting orders will be dismissed.
Turning then to the husband’s applications in relation to parenting, he seeks:
·That X attend on a nominated family therapist.
·That after four sessions of therapy, X spend time with the husband, initially for six hours once every four weeks and increasing to one weekend in four as well as half of each school holiday period.
·Video or telephone calls with X twice each week.
·Information in relation to X’s education, religious activities, medical appointments and extracurricular activities.
·To attend events at X’s school to which parents are invited.
I note that, in relation to the attendance at the school, no order is required. The husband is entitled to attend any event which is open to parents.
In relation to the balance of the husband’s parenting application, the wife, in her affidavit sworn 12 October 2021, deposed that X has refused all communication from the husband since May 2020 when X became aware that the husband was in a new relationship and that there was a child of that relationship.
Having regard to X’s age, it is not appropriate to make any order in relation to his parenting without some evidence as to his views and without his being independently represented.
The husband’s parenting application will also be dismissed.
SOLE OCCUPATION
In his affidavit sworn 4 August 2021, the husband, who has been living in the United Kingdom, deposes to the cost involved in renting and furnishing premises in Sydney.
Although, prior to that time, the husband had refused to undertake that he would not seek to reoccupy the former matrimonial home with the wife, it is not immediately clear why, after that affidavit was filed, it was necessary for the wife to continue to seek an order for sole occupation.
Before me, counsel for the husband conceded that he did not oppose the making of the order. I will make an order that the wife have the right to occupy the premises because the husband refused to give an undertaking not to disturb her occupation.
PERSONAL PROTECTION ORDERS AGAINST THE HUSBAND
The parties separated in March 2020. The husband lived in the United Kingdom from the time of separation until he returned to Australia in June 2021.There is no evidence that there has been any contact, of any nature, between the husband and the wife since separation.
There is no evidence to support the making of these orders.
INTERIM COSTS
The wife seeks an order that the husband, within 30 days, pay to her the sum of $285,000 by way of interim costs.
The application is made pursuant to the provisions of s 79 of the Family Law Act 1975 (Cth) (“the Act”) or, in the alternate, pursuant to the provisions of s 117(2A) of the Act.
The husband’s estimate is that the property of the parties has a net value of about $6 million. In his substantive response he seeks an order that the wife receive 35 per cent of the net assets, or $2.1 million.
Thus it is clear that payment to the wife of the amount she seeks in no way compromises the husband’s position.
On behalf of the husband, it is submitted that, firstly, the wife has liquid assets in excess of the amount she seeks and, secondly, that there is no fund from which the husband can pay the amount she seeks.
As to the first proposition, the wife has liquid assets of about $86,000 in bank accounts and shares totalling about $210,000. The balance of the assets of the marriage are controlled by the husband. It is not required that she exhaust all of her available funds before the court will come to her aid in relation to an interim distribution of their joint property.
As to the availability of a fund from which the payment can be made, it is sufficient to observe that the husband has publicly listed shares valued at almost $520,000 and shares in racehorses which he values at $153,500.
Further, the husband in his Financial Statement deposes to other interests held in corporate vehicles. The husband is the appointor of the K Trust which has assets of $3,210,000. The trustee of the trust is K Pty Limited of which the husband is the sole shareholder. It is not in dispute that the assets of the trust are the assets of the husband.
The K Trust, of which the husband and the wife are the beneficiaries, is also controlled by the husband. That trust is estimated by the husband to have property to the value of $2,265,000, including listed shares.
The O Trust, which is also controlled by the husband, is estimated by him to have assets to the value of $433,000.
Historically and presently, the husband has solely controlled and directed each of those entities and determined how their assets and their income is used.
There is ample property available to the husband from which the sum sought by the wife can be paid.
The husband can determine, from the various assets which he has in his legal possession or under his control, how the order for interim costs will be met.
SPOUSAL MAINTENANCE
The wife seeks an order that the husband pay, by way of spousal maintenance:
·A periodic sum of $4,000 per month.
·Rental payments in relation to the Suburb C property.
·All outgoings relating to the Suburb C property.
·The wife’s health insurance premiums.
·All costs associated with the motor vehicle driven by the wife.
Further, she seeks annual Cost Price Index (“CPI”) rises in the amount of periodic maintenance, the first to occur on 1 July 2022 although why the amount she receives should be varied after six months from the date of the order is not explained. The provisions of s 83(2) of the Act govern the variation of a spousal maintenance order and do not include an automatic variation because of a change in the CPI. To the contrary, the court must be satisfied:
(b)that, since the order was made, or last varied, the cost of living has changed to such an extent as to justify its so doing;
That order will not be made.
The wife seeks an order that the husband continue to facilitate her use of the motor vehicle, maintains the roadside coverage for the vehicle and allows her to have access to the information relevant to roadside coverage, repairs, service and maintenance of the vehicle.
The wife is employed as an educator. There is no evidence that she has the capacity for more lucrative employment.
She relies on a Financial Statement sworn on 16 June 2021 wherein she deposes to an income from employment of $552 per week.
In addition, the wife receives an income from dividends and from trust distributions.
In an updating affidavit sworn on 12 October 2021, the wife deposes that she has an income from share dividends of $149 per week.
On 30 June 2021, the wife received a payment from the P Trust of $22,197 ($427 per week).
If that evidence is accepted, the wife’s gross weekly income for the purpose of this application is $1,128.
She deposes to expenses of $4,576. That assertion will be examined later in these reasons.
The wife’s evidence in relation to the P Trust is found in her affidavit sworn 16 June 2021 where she deposes:
137.2The P Trust which was established by Deed dated 29 June 2007 and of which my father is the appointor and a trustee.
I was co-trustee with my father but was removed as a trustee on
5 May 2019.
…
138.I have not received distributions from the P Trust since about 2011. As at 30 June 2020, I had an unpaid entitlement in the trust of $22,197.
In her Financial Statement, the wife deposes that she is also a potential beneficiary of the Q Family Trust which is a trust controlled by her father.
The wife has $86,000 in bank accounts and listed shares valued at $210,000.
As to the wife’s outgoings, she pays tax on her employment income of $48 per week.
She needs to pay health insurance of $148 per week and contents insurance of $89 per week.
The husband deposed that he has met the following expenses on the wife’s behalf:
·Gas $81
·Electricity $185
·Petrol $30
·Telephone and internet $48
·Netflix & Stan $12
·Stationery $12
Total $368
Since the husband will no longer pay those expenses, they will become the wife’s expenses.
Her Part N expenses are $886 per week.
Thus her reasonable expenses are $1,539. The shortfall between her expenses and her income is $411.
I have not included in the wife’s expenses the costs of maintaining the motor vehicles driven by the adult children or the expenses of any of the children. Neither have I included the claim in relation to interest on credit cards, absent any explanation about why she is required to pay interest when she has funds to pay the full amount owed and on the assumption that the credit cards are used for expenses that have already, if relevant, been taken into account.
In the course of the hearing, but not before, the husband conceded that he would pay the following expenses:
·Land tax on the Suburb C property. (This is not the husband’s expense. The property is owned by the K Trust and the land tax is an expense of the trust).
·Water rates on the Suburb C property.
·Building insurance for the Suburb C property.
·The costs of registration, insurance and maintenance of the luxury motor vehicle driven by the wife.
·The mortgage payments related to the Suburb C property. (This is not the husband's expense. The property is owned by the K Trust and the mortgage is a liability of the trust).
I now turn to consider the husband’s capacity to pay the fixed outgoings as the wife seeks.
The husband relies on a Financial Statement sworn 4 August 2021. He deposes to an income of $8,250 per week. He deposes that he receives $789 per week from dividends by publicly listed companies and $3,461 from K Trust. In addition, he receives benefits from his employment which he estimates to be worth $4,000 per week which includes the mortgage payments referable to the Suburb C property and his United Kingdom rent. Those two items total $3,665.
His current partner has an income of $600 per week.
However, I do not accept that the husband has made a full and proper disclosure of his actual income.
The husband deposed that he is employed by R Pty Limited (“R Pty Ltd”), a company of which he is the sole shareholder and a director. The net profits of R Pty Ltd in the financial year ended 30 June 2020 were $995,262, (although the husband deposed that the net taxable income of his consultancy business was $921,592 based on fees actually received). Those funds were distributed to the K Trust. The husband controls the trust. Thus, effectively, the profits of R Pty Ltd are the income of the husband and are distributed by him as he sees fit.
S Pty Limited (“S Pty Ltd”) is an entity controlled by the husband. He is its sole director and holds the D class shares. S Pty Ltd trades in shares. The financial statements of S Pty Ltd for the financial year ended 30 June 2021 were in evidence. S Pty Ltd made a profit before tax of $1,804,778. The profit after tax for the financial year was $1,333,519. S Pty Ltd has current assets of $1,246,881 and net assets, after provision for tax, of $6,021,850.
S Pty Ltd has made two interest free, unsecured loans to a business associate of the husband, Mr T, totalling $350,000 and a further unsecured loan of $100,000 to Ms U “who is an external service provider to R Pty Ltd”.
The husband has had access to some $2,250,000 in the financial year ended 30 June 2021.
He has funds available to meet the wife’s maintenance entitlements.
The orders will provide for the husband to pay spousal maintenance of $411 per week.
PRESERVATION OF ASSETS
The wife seeks orders to restrain the husband from selling or alienating the Suburb C property or acting, in relation to that property, adversely to the wife’s interests.
There is no evidence that he has sought to do so in the past or is likely to do so in the future.
The wife seeks an order restraining the husband from making “any changes to the structure of the [h]usband’s entities”. That order is so wide as to be unreasonable and unenforceable and will not be made.
I accept that, after separation, the husband removed the wife as the alternate appointor of the O Trust and that S Pty Ltd has made unsecured and undocumented loans.
However, I do not accept that these actions justify the making of orders as sought by the wife.
There is no evidence that the husband, who throughout the marriage, controlled the corporate entities, has done anything to dissipate the assets of those entities.
Lastly, the wife seeks an order restraining the husband from distributing funds to persons other than the wife and the children of the husband and the wife. The husband has repartnered and has another child. If the husband’s partner and child are eligible beneficiaries of a trust, the husband is entitled to make distributions in their favour and such distributions will be taken into account in the substantive proceedings.
CHILD SUPPORT DEPARTURE
The Child Support Registrar has been served with the application and has acknowledged service.
In Philippe and Philippe (1978) FLC 90-433, Connor J held that:
… “special circumstances” were “facts peculiar to a particular case which set it apart from other cases…”
That statement was cited with approval by Kay J in Savery and Savery (1990) FLC 92-131.
In Gyselman and Gyselman (1992) FLC 92-279, the Full Court stated:
Whilst it is not possible to define with precision the meaning of that term, as a generality it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the court will not interfere with the administrative formula result in the ordinary run of cases.
The “special circumstances” in this case are that the husband has the sole control of the income of the marriage, which vastly exceeds his stated taxable income, and, in his capacity as the controller of the trusts, he is able to notionally distribute income to the wife so as to distort the application of the child support formula and he has done so in the past.
The husband opposes the application and proposes that he pay child support as assessed and half of X’s education expenses.
By agreeing to pay those expenses, the husband concedes that it is just and equitable to make a departure order.
The parties have agreed in the past that X should be educated in the private school system. The husband has paid the costs of that education. In his affidavit sworn 4 August 2021, the husband deposed that he pays $1,500 per month for school fees and $1,060 in child support for X. It is unclear where the figure of $1,060 is found when the current assessment is $265.30 per week. However, it is clear that the husband has considered that level of support to be appropriate in the past.
The husband proposes that he will continue to pay the costs of private health insurance for X and the costs of his mobile phone.
The wife deposed that X’s reasonable expenses are $876 per week, however, that sum includes education expenses of $346. I find that X’s reasonable expenses are $530 per week. The wife has no capacity to contribute to those expenses.
The orders will provide for the husband to pay periodic child support of $530 per week together with education expenses, health insurance premiums, medical expenses and mobile phone charges as sought by the wife.
MANDATORY INJUNCTIONS
Both the husband and the wife sought a suite of orders relating to such matters as maintaining a postal address for the various entities, forwarding correspondence received at the post box and the like.
It emerged in the course of the hearing that there was no dispute between the parties about the form of those orders and orders will be made as proposed by the wife.
HUSBAND’S PERSONAL PROPERTY
In the course of the hearing it was agreed that the wife would make the husband’s personal property available for collection by a contractor (not the husband in person) by 29 December 2021. Those orders will be made.
HOW IS MAINTENANCE AND CHILD SUPPORT TO BE PAID?
Historically, the husband has used the vehicles of the trusts to pay all of the expenses of the wife, the children and himself. That has been tax effective. Where a tax liability arose as a result of the manner in which the husband made those payments by distribution, he attended to the payment of the tax.
The wife sought to restrain the husband from paying either spousal maintenance or
child support by way of distribution. Sensibly, in the course of the hearing, senior counsel for the wife abandoned those applications.
The husband will be permitted to continue to make distributions to the wife and to the children to satisfy the orders for spousal maintenance and child support made today. He will be responsible to pay, as it falls due, any tax assessed against the wife or any of the children as a result of such distributions.
I certify that the preceding ninety (90) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rees. Associate:
Dated: 14 December 2021
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