Elder and Elder

FAMILY COURT OF AUSTRALIA

ELDER & ELDER

[2008] FamCA 850

FAMILY LAW – PROPERTY – Alteration of property interests

APPLICANT:

Ms Elder

RESPONDENT:

Mr Elder

FILE NUMBER:

NCF

693

2006

DATE DELIVERED:

23 September 2008

PLACE DELIVERED:

Newcastle

PLACE HEARD:

Newcastle

JUDGMENT OF:

JUSTICE MULLANE

HEARING DATES:

12 & 13 August 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Kelly

SOLICITOR FOR THE APPLICANT:

Emery Partners

COUNSEL FOR THE RESPONDENT:

Mr Hartley

SOLICITOR FOR THE RESPONDENT:

In person

Orders

On or before 31 October 2008 the husband must pay to the Child Support Registrar a lump sum of $11,366 for child support for the children of the parties J born … August 2002, E born … October 2003 and S born … June 2005.
The lump sum is to be credited towards any administrative assessment for the period 1 October 2008 to 30 June 2009 and for that purpose to have an annual rate of $15,155 and the annual rate of child support under any administrative assessment for that period is to be reduced by $15,155.
On or before 31 October 2008 the wife must pay to the husband by way of alteration of property interests a sum of $24,490 and may at her option instead pay the sum by 31 October 2008 as follows:
3.1)pay $11,366 on the husband’s behalf to the Child Support Registrar in satisfaction of his liability under Order 1;
3.2)pay on the husband’s behalf to the Child Support Registrar any arrears of child support, interest and charges owing by the husband and in respect of the children or $13,324 9 (whichever is the less); and
3.3)pay the balance to the husband.
If the sum of $24,690 is not paid by 31 October 2008 the wife must pay to the husband interest at the rate prescribed by the Family Law Rules on so much as is from time to time outstanding.
On or before 31 October 2008 the parties must do all acts and execute all documents prepared by the wife to release the husband from any liability in respect of:
5.1)her loan of $140,000 from the National Australia Bank;
5.2)any guarantee he has given relating to the debt; and
5.3)the mortgage over V property securing the loan.
On or before 31 October 2008 in consideration for the wife’s compliance with Orders 3 and 5 and contemporaneous with such compliance, the husband must do all acts and execute all documents submitted by the wife to transfer to the wife all his interest in:
6.1)the debt of $400 owing to the parties by Mr and Mrs W;
6.2)the parties’ 214 shares in Telstra; and
6.3)the property known as V property being the land in Certificate of title folio identifier ….
Except as otherwise provided in these orders each party is declared to have no interest in the items of property in the possession of the other.
If a party neglects to execute any document necessary to implement these orders within 10 days of a request to do so, the Registrar of the Newcastle Registry of the family Court of Australia is hereby appointed to execute the document on that party’s behalf and do all acts and things necessary to give validity and operation to the document.
Otherwise any outstanding applications are dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Elder & Elder is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT NEWCASTLE

FILE NUMBER: NCF 693 of 2006

MS ELDER

Applicant

And

MR ELDER

Respondent

REASONS FOR JUDGMENT

INTRODUCTION

This was a hearing of competing applications for alteration of property interests under Section79 of the Family Law Act.

CREDIT OF THE APPLICANT WIFE

The applicant wife was an impressive witness. Although she had understated several minor shareholdings by failing to include additional shares allocated under dividend reinvestment plans, there was very little otherwise that affected adversely on her credit. She was particularly impressive in her recollection of dates, events and amounts. She presented as an honest witness with a very good memory of detail endeavouring to do her best to give truthful and accurate evidence.

CREDIT OF THE RESPONDENT HUSBAND

The husband is a person of extremely poor credit. He presented as an extremely unreliable witness. The major problem with his credit was that he is dishonest.
He was also evasive in cross-examination. He avoided questions and often volunteered unresponsive material to a question.
In his 2005/06 income tax return he falsely stated that the wife ceased to be his spouse on 30 December 2005.
In a hearing before the Social Security Appeals Tribunal the husband testified that he had been employed by G Pty Ltd since shortly after he returned to Australia on 26 April 2007, but the company was not incorporated until 2 May 2007, Ms GM, the sole director, office bearer and shareholder of the company, was, according to his evidence in this hearing, living in New Zealand until July 2007, and the contract of employment which he signed and she signed on behalf of the company, is dated July 2007.
Cross-examination of the husband revealed that:
·    Since separation he knowingly understated his commitments in a loan application to the National Australia Bank to obtain money to purchase a car for his friend, Ms GM.
·    He falsely told the bank that the money was to be used for him to purchase a car.
·    He falsely told the bank in the same loan application that he had a bank account with the Westpac Bank in New Zealand with NZ$7,000 in it. His evidence is that he had no such account.
·    He failed to disclose to the bank that the money lent was to be given to his friend for her to purchase a car.
·    He told the National Australia Bank in the loan application that Ms GM was his partner. He testified in these proceedings that this was untrue.
·    He failed to disclose in his Financial Statement savings of his in a building society account and falsely swore that he had no other account than an account with the National Australia Bank.
·    Prior to separation he instructed the wife to treat about $50,000 in private expenditure for a swimming pool as a business expense of his company and describe it as a purchase of materials.
·    After separation he instructed his accountants to prepare company financial statements and a tax return for the 2005/06 year, using a figure for materials purchases of $88,944, which he knew was over-stated by about $50,000. (See exhibit W14.)
·    After such financial statements were prepared based on his instructions, they were misleading in that they falsely showed the company had traded at a net loss of $81,203 instead of a net loss of $31,203.
·    Two weeks later when the accountants produced amended financial statements for the company that corrected that, the husband fraudulently purported to the Child Support Agency that the first set of financial statements for the company for 2005/06 were accurate and he did not disclose the amended statements.
·    In the 2006/07 tax year, commencing about 7 months after the separation, the husband spent about 6 months in New Zealand. There he was in full time employment on a salary of about $55,000 p.a. He did not disclose to the Australian Taxation Office his earnings in New Zealand of about $27,500. He disclosed only $21,298 (his Australian income) as his income for the whole tax year.
·    He falsely purported for income tax purposes and for purposes of assessment of Child Support for his children, that this was his only income in the year. His taxable income in the two previous tax years was $55,842 in 2004/05, and $68,000 in 2005/06.
The husband denied in cross-examination ever talking to Ms GM about running the trade business in order to off-set past tax losses. He said, “I didn’t know she had any”. Later he again denied talking to her about past tax losses. But the Child Support Agency found, and the Court accepts, that at a hearing on 31 July 2008, the husband told the Delegate of the Child Support Registrar that the setting up of the company G Pty Ltd the way it was done allowed Ms GM to “recoup losses” from a previous business.
After separation, the husband, without the wife’s consent removed a Toyota Landcruiser that was in her possession and sold it. He did not give her notice of his intention to remove the vehicle or to sell the vehicle. When he was cross-examined about the sale, he volunteered that it was sold “with her permission”. It was put to him that he did not have her permission and he claimed that he did and said, “She signed over the registration”. But this was a lie, as was the proposition that she consented to the sale. He later conceded that the registration of the vehicle was in the name of his company, and after avoiding the question twice, eventually conceded that she did not sign the registration transfer. In the course of avoiding the question he sought to confuse the issue by talking about the wife’s prior motor vehicle, which had been used as a trade-in for the purchase of the Landcruiser. It was clear that he lied when he said that she agreed to the sale and he lied when he said that she signed the registration transfer.
In cross-examination the husband said that it was never his intention to move to live in New Zealand permanently. He was shown a document and asked if he wanted to change his answer. He replied, “No, not at all”. He denied that he had ever told the Child Support Agency that he intended to live in New Zealand permanently. He conceded that Ms GM is a New Zealand national. He denied that he intends to live in New Zealand after these proceedings. But after some considerable evasion and production of documents to him in the witness box, he conceded that in January 2007, he said in documents written by him in New Zealand, that he intended to remain in New Zealand permanently.
The husband was cross-examined about long service leave he received after separation from his employment with the company D Pty Ltd. He said he received about $4,000. This was untrue. The correct amount was $5,900.
In re-examination the husband testified that the 2005/06 financial statements of D Pty Ltd were amended because the wife, who did the books for the company before separation, erroneously included the cost of the swimming pool as a company payment. He alleged this was the reason the financial statements subsequently needed to be amended. The wife was then called to give evidence in response to his evidence. She wrote to the accountant in August 2006. The letter is Exhibit W16 and was sent by facsimile. She informed the accountant that the husband had included the pool “as business materials against my advice, so please make sure that he is aware that he may get audited”. She raised a series of other issues, including that the husband had claimed for the cost of tyres on the Landcruiser, which the wife had paid for, but he was purporting was paid through the business.
On the balance of probabilities the accountant told the husband that the reason the accounts had to be amended was that the wife had notified him of the inclusion of the pool in the expenses of the business as “materials”. On the balance of probabilities, the husband lied when he told the Court that it was the wife who initiated the inclusion of the pool expenses in the company accounts and he also sought to mislead the Court by failing to disclose his knowledge of the fact that the amended statements were prepared because the wife notified the accountant of what had been done. It was clear on the evidence that he gave instructions to the accountant to prepare the financial statements knowing the swimming pool expenses were included in the company records as materials purchases, he did not disclose it to the accountants, and he intended that the discrepancy be carried forward into the financial statements and income tax return.
The husband’s non disclosure of details of the arrangement he reached involving the incorporation of G Pty Ltd, it’s assumption of the business of D Pty Ltd and his employment by that company, also reflects adversely on the reliability of the husband as a witness and also on his level of honesty. It is clear from the facts set out later that the steps he took in relation to the two companies and his employment were intended to minimise his income tax liability and his liability to pay Child Support for the support of his children, and to improve his prospects in these proceedings by a transaction that reduced his income and purported that his earning capacity has substantially reduced since the separation.

PAYMENT TO HUSBAND’S DE FACTO WIFE

It is common ground to the evidence of both parties that the husband paid his former de facto wife Ms F $5,000 in consideration of her transferring to him her interest in their jointly owned property at B.
The wife alleged that the $5,000 came from the proceeds of sale of two properties that were sold in 2001. She also alleged that about $1,500 was paid in legal costs to the husband’s solicitors in respect of that settlement and those funds came from the same source.
It was put to the wife in cross-examination that the settlement was not arrived at until February 2002. She disagreed. She said, “My perception was that it was sorted out before the marriage in September 2001.” She said she was sure she was right about that.
In cross-examination the husband identified cheque butts of his in May 2001 ($660.55), and February 2002 ($400.00) payable to the solicitors he says acted for him in reaching the settlement with Ms F. He claimed that these payments were for legal costs. There was a further cheque on 4/4/2002 for $3,290.05 which he alleged was part payment of the $5,000 settlement amount. He alleged he paid that to the solicitors to hold in their trust account to pay to Ms F.
Although the wife has alleged she provided the funds for the settlement amount and the legal costs, and she made that allegation in her affidavit, the husband had not disputed that in an earlier affidavit or in any evidence in chief. It was only when he was cross-examined that he denied that the funds to pay Ms F came from the wife’s savings from prior to the marriage. He also denied that she provided money for the legal costs.
After the husband gave evidence in re-examination about the cheques payable to his solicitors in respect of the payment to Ms F and his legal costs of the transaction, the wife’s Counsel was permitted to cross-examine him on that evidence. After some evasion, he conceded that he had said in his earlier evidence that Ms F was paid before the title was transferred. He conceded that she was no longer on the title when he paid the first cheque ($660) to his solicitors in May 2001.
The wife tendered in her case the actual transfer. The husband identified the signature of Ms F on the document. It is Exhibit W12. It was stamped on 5 February 2001 and it is dated 27 March 2001. It also includes in endorsements, apparently made by the land titles office, the words “Rev: 30-April-2001”. The dealing whereby the husband and Ms [F] mortgaged the same property is dated 29 September 2001 and includes a similar endorsement: “Rev 14-Oct-1997”. It appears likely that the dates on these endorsements are the dates of some processing in the land titles office, probably lodgement or registration.
The proposition alleged by the husband is that his solicitors stamped the transfer, Ms F executed it and it was dated and registered, about a year before he provided funds to the solicitors to pay her the settlement agreed upon as consideration for the transfer. It seems very unlikely that this would happen and there is no corroboration for his version of the events.
The settlement amount was $5,000 but the cheque butts he tendered do not establish payment of that either by one cheque or several. Nor does the husband’s evidence identify any other payment that he says was made in addition to the payment in April 2002 that comprised the alleged balance of the $5,000.
On all the evidence, the Court is satisfied on the balance of probabilities that the payment was made and the transfer was lodged at the Land Titles Office by April 2001 as the wife alleges.

BACKGROUND

The parties commenced cohabitation in August or September 2000 in a property at B, owned jointly by the husband and his former de facto wife, Ms F.
The wife had worked in the transport industry in Sydney and been a member of the Military Reserve. She resigned those employments to move to the Newcastle area to live with the husband. She had a child, P, born of her relationship with Mr …, and P was 10 or 11 months of age.
The husband worked for a company D Pty Ltd of which he was the sole office bearer and shareholder. He was a tradesman and worked for the company.
The wife owned two properties in Sydney, each of which was subject to a mortgage. By about April 2001 she had sold those two properties and had received a net total of $127,314 after discharge of the mortgages and payment of the sale expenses.
The wife also had the following property:
·A new Nissan Pulsar motor vehicle bought for $22,500 in early 2000
·Savings of $1,800 in the National Bank of New Zealand
·NRMA shares worth about $470
·Savings of about $3,000 in the U Credit Union
·Savings of $5,705.42 in an account with St George Building Society
·Furniture and furnishings worth about $6,000
·Superannuation entitlements with First State Super worth about $17,000 and superannuation entitlements with another fund worth $1,632
·Money invested in Bridgecorp Finance Ltd in New Zealand which is unquantified, but was transferred to an investment with Bridgecorp Finance in Australia.
The wife had no debts other than the mortgage debts secured on the Sydney properties.
The husband at the time cohabitation commenced had the following assets:
· A half interest in the property at B, the other half interest being owned by Ms F. Three years early they had bought the property for $93,000. They had obtained a mortgage loan of $118,664 for the purchase and improvements to the property. The evidence does not establish whether the husband had any equity in the property at the time the parties commenced cohabitation.
· The husband at the time also owned all the shares in D Pty Ltd but the evidence does not establish that those shares had any value at that time.
The wife alleged the husband also owned a utility and tools and equipment used in the business of the company. The tools and equipment had cost $4,000 in 1999 when he incorporated the company. But on his evidence and the financial statements of the company, the tools and equipment and the motor vehicle were assets of the company; not the husband.
He had no savings.
In March 2001 Ms F transferred to the husband her interest in the property at B subject to the mortgage for a consideration of $5,000 which probably was paid to her at that time.
In September 2001 the parties married.
In May the following year the husband purchased a property at E for $218,000 in his sole name. To finance that the parties borrowed from the Commonwealth Bank in their joint names a sum of $248,000 and the loan was secured on the property. The property was then rented out and the rent was used towards the mortgage payments and other outgoings.
The parties’ first child, a daughter called J, was born in August 2002.
In March 2003 the parties purchased another investment property. It was at V and for the purposes of maximising the tax deduction from negative gearing, it was bought in the names of the parties as tenants in common with the wife having a 1% interest and the husband having a 99% interest. The purchase price was $300,000 and the parties borrowed $300,000 from the Commonwealth Bank towards the total cost of the purchase. The property was then rented out.

The parties’ second daughter, E, was born in October 2003.
In January 2004 the company purchased a Toyota Landcruiser for $65,000. They traded in the wife’s then motor car for $9,000 and they obtained a Commonwealth Bank line of credit for $55,000 to pay the balance.
In April 2004 the husband sold the property at B for $410,000. At the same time they settled the purchase of a property at Y Street for $350,000. The parties had intended to live in the Y Street property but changed their minds and on completion of the sale and the purchase, they occupied rented premises at B Street. The parties then obtained professional services for the purpose of obtaining Development Approval to redevelop the property at Y Street. They expended more than $18,000 on those services, but did not proceed with the proposal.
The parties borrowed another $315,000 from the National Australia Bank in June 2004 to discharge the mortgage debt on the M property and existing Commonwealth Bank line of credit. They also obtained a new line of credit with the National Australia Bank for an amount of $60,000.
In December 2004 the parties moved from the rented premises at B Street and then occupied the house at V.
The parties’ third child, S, was born in June 2005.
In June or July 2005 the wife purchase a property at I Street with Ms C as tenants in common in equal shares. The purchase price was $250,000. Ms C paid for her half share in cash. The wife took out a mortgage for her loan of $140,000 for the purchase of her half. The mortgage was secured against the property at V and not secured on the property at I Street.
From the mortgage loan funds, the wife invested $10,000 in Bridgecorp. The husband was guarantor for the wife in respect of the mortgage loan.
The wife and Ms C have since leased the premises at I Street. The wife receives about $100 per week for the rental and that is used towards meeting her mortgage payments.
From October 2005 to June 2006 the wife operated a business selling by party plan. She did this through the use of a company S Pty Ltd of which she was the sole office bearer and sole share holder. Financially the business was not a success. It netted only $1,100 in 8 months of operation.
The parties separated on 26 March 2006. The separation was at the husband’s instigation. He left the home at V and the wife and the children have continued to reside there.
When the parties separated in March 2006 they had the following property:
Home at V
Property at M
Property at I Street (wife’s one half share)
Property at Y Street
Wife’s Newcastle Permanent Building Society account  $       3
Wife’s National Australia Bank account  $     253
Wife’s shares in IAG  $ 1,200
Jointly owned shares in Coles Myer  $ 4,000
Wife’s shares in Telstra Ltd  $     800
Wife’s shares in BR Ltd  $     300
Husband’s shareholding in D Pty Ltd
Equity per balance sheet at 30 June 2006  $47,731
Debt owing by Mr & Mrs W  $34,000
Wife’s savings in National Bank of New Zealand  $     938
Wife’s debentures with Bridgecorp Finance Ltd   $10,500
Wife’s unsecured Notes with Bridgecorp Finance Ltd  $ 1,050
Wife’s shares in S Pty Ltd - demonstration stock           $     500
Wife’s interest in AMP superannuation  $26,830
Wife’s interest in Australian superannuation   $11,400
Furniture and other household contents per paras 82 & 83 of
wife’s affidavit sworn 14 July 2008 -- value not established
The liabilities of the parties at the time of separation comprised:
Joint loan from National Australia Bank secured by
mortgage over M property     $216,000
Joint line of credit with National Australia Bank  $ 60,000
Wife’s debt for I Street property       $140,000
Mortgage to National Australia Bank secured over
Property at V  $295,000
Husband’s National Australia Bank Visacard  $    6,400
Total      $717,400
He paid the wife in April 2006 $4,766 as a payment for Child support for a period of three months after separation. The wife ceased her party plan business in June 2006.
That month a friend of the wife, Mr BY bought her a motor cycle, helmet and accessories at a total cost of $6,242. The wife has elected subsequently to treat that as a loan, rather than a gift and has been paying for cleaning services to be provided to Mr BY as a way of reducing her indebtedness to him.
In July 2006 by agreement with the husband, the wife sold the jointly owned Coles shares and received $5,400.
After separation the husband began winding up the business of his company. He gradually laid off the staff and it appears that in or before June 2006 the business had ceased. That month the husband received a long service leave payment of $5,635 for his service in the building and construction industry. The entitlement accumulated during his work for D Pty Ltd, mainly during the period of cohabitation.
From when the company ceased trading till June 2007 the husband did not undertake paid work.
In August 2006 the wife’s investment with Bridgecorp Finance matured and she received $11,143, which she deposited into an account with the National Australia Bank in the name of her daughter P.
The husband removed the Toyota Landcruiser from the wife’s possession and in August 2006 he sold the vehicle for $28,000. He purchased a 2002 Commodore station wagon for $13,000 and provided that vehicle to the wife. The Toyota Landcruiser was the property of the company and presumably the husband treated the sale proceeds as a receipt by the company.
In August the wife transferred a further amount of $15,243 to the bank account of her daughter P.
The husband received a tax refund of $5,779 on 20 September 2006, apparently in relation to the 2005/06 tax year. In September 2006 the properties at Y Street and M were listed for sale.
After separation, the husband continued to make the mortgage payments on the Y Street property and the V property until Y Street was sold in September 2006 and the mortgage discharged. The line of credit to the National Australia Bank was also paid out from the sale proceeds as was the joint mortgage on V. There was no evidence as to whether there was any shortfall after separation between the rental from Y Street (apparently received by the husband) and the mortgage payments paid by the husband.
In October 2006 the wife purchased 3,000 shares in Telstra Ltd for $6,000, which she withdrew from the account in the name of her daughter P. She also at that time transferred from P’s account $5,513 and paid it in reduction of her National Australia Bank Visacard account and then later transferred from the account of her daughter another $4,038 to further reduce her National Australia Bank Visa credit card account debt.
The husband left Australia on 18 October 2006 and went to live in New Zealand with Ms GM. At about the time he departed he received a further tax refund of $5,236, again in respect of the 2005/06 tax year.
On 9 November 2006 the wife filed her application commencing these proceedings.
In January 2007 the wife purchased a Hyundai car for $24,024. She obtained a $9,000 trade-in allowance for the Commodore vehicle and paid the balance from savings and a cash advance of $2,081 on her National Australia Bank Visacard.
The husband returned to Australia on 26 April 2007. On 30 June 2007 the husband’s company paid him a dividend of $12,000.
In October 2007 the husband paid $217,398 to the National Australia Bank to discharge the mortgage debt secured on the property at M. The husband did not give or tender evidence of the source of the funds. In the joint balance sheet he alleges there is a mortgage debt of $216,000 secured on the property. The wife does not concede this as she notes on the joint balance sheet “we cannot agree as husband has not served a statement for the account”. His financial statement alleges a mortgage debt of $216,000 and alleges he is paying mortgage payments of $402 per week to the national Australia Bank. He was not cross examined on these matters. Accordingly the finding is that he refinanced with the same bank by borrowing in his sole name and the balance owing is about $216,000.
In May 2008 the wife paid a second instalment for the Telstra shares she had purchased in October 2007. The amount she paid was $4,800 and this came from her account with the National Bank of New Zealand.
The hearing proceeded on 12 and 13 August 2008 and Judgment was reserved.

THE HUSBAND, MS GM & G PTY LTD

Six months after the separation, the husband in September 2006 ceased trading with his company D Pty Ltd. Then he went to New Zealand with Ms GM for six months. He returned to Australia in April 2007.
In May 2007 a company G Pty Ltd was incorporated. The sole office bearer and sole shareholder is Ms GM. The husband’s evidence in cross-examination, however, is that Ms GM did not return from New Zealand until about July 2007. There was no evidence as to how G Pty Ltd was incorporated in Australia in May 2007, while Ms GM was in New Zealand until about July. On the evidence it appears that the husband was instrumental in incorporating the company.
When the company was incorporated, an address in L, the address where the husband was residing, and where Ms GM resided when she returned from New Zealand, was nominated at the principal place of business.
The company has since traded as a contractor in domestic building services. The husband works for the company and, it appears, is the only employee. The company commenced doing jobs on 18 June 2007 (see Exhibit W10). His evidence is that Ms GM does all the bookwork and that he does not know details of the trading figures of the company. The husband has entered a written contract of employment with G Pty. Ltd dated 1 July 2007. Ms GM signed the document on behalf of the company, but it appears that she may have still been in New Zealand at the time on 1 July 2007, and the document may have been back-dated on her return.
Produced on subpoena from the company were all the invoices issued by the company and the husband in cross-examination testified that he did all the work in those invoices. All of the invoices were addressed to the same firm, JG Firm, a firm to which D Pty Ltd subcontracted before it ceased trading.
The husband’s employment contract provides that he is paid $18 per hour. That equates to $720 per week or an assessable income of $37,440 p.a. The evidence is that at the start of the parties’ cohabitation the husband’s work hours were charged out at $32 per hour.
An assessable income of $37,440 p.a. can be compared with his much greater income in 2005/06. His taxable income (assessable income after deductions) that year from D Pty Ltd was about $68,000. In addition he was the sole shareholder of D Pty Ltd and had control of the company. Although the company traded at a loss in 2005/06 (the parties separated in the March.), in 2004/05 his taxable income was about $58,000 and the company made a profit of $56,210. The company at the start of 2005/06 had accumulated undistributed profits of $75,034. It paid him a dividend of $12,000 in June 2007. By comparison with his position pre separation, the husband now has no shares in his employer G Pty Ltd and is not a director or other officer bearer of the company.
There was no evidence in the husband’s case as to the profitability of G Pty Ltd. He denied any knowledge of such matters. Ms GM did not give evidence in the husband’s case.
Cross-examination of the husband and banking and other records reveal that the finances of the husband and Ms GM are closely intermingled. She frequently deposits funds into his bank account and his credit card account and cheque account are often used for payment of personal expenses of Ms GM, including purchase of jewellery and payment for travel and holiday expenses. He also paid $800 to ship her dog to New Zealand. He identified $5,000 he received from her as reimbursement for payments for her motor cycle jacket, boots, helmet and insurance from his credit card account, but was unable to identify in his credit card statements any record of any of the alleged payments.
The husband sought to argue that the amounts provided by Ms GM into his bank accounts are merely by way of reimbursement of payments that he makes on her behalf, including payments for petrol expenses incurred in the course of his employment. However, the evidence did not establish that proposition and on the balance of probabilities Ms GM supports the husband financially with funds from G Pty Ltd.

VALUE OF SHARES IN D PTY. LTD

The husband provided no valuation of his shares in D Pty Ltd.
The balance sheet of the company at 30 June 2006 showed his shareholder’s equity as nearly $48,000. It showed the major assets were motor vehicles (depreciated value $60,399), other plant and equipment (depreciated value $1,200) and loans to the husband of $48,764.
In a balance sheet attached to his affidavit sworn 8 April 2008, he acknowledges that the company had an asset by way of a 2003 Holden Rodeo utility worth $16,000. He did not disclose any other assets or liabilities of the company, except an outstanding debt of $4,998 to Workcover. He alleges that since 1 July 2006 he has paid debts on behalf of the company, but the evidence does not establish that such amounts or other amounts lent by him to the company since 1 July 2006 together exceed the $48,764 he owed the company at 30 June 2006.
The company in 2005/06 had a turnover of $189,680, producing a profit of $47,631. But after separation in 2006/07 the turnover was only $30,124 and the result for the year was a loss of $14,168.
In his Financial Statement sworn 14 July 2008, the husband stated the value of the company as $500. But he also showed the 2003 Holden Rodeo vehicle as being property of his own valued at $16,000.
In the single balance sheet tendered in evidence at the hearing, he stated the value of the company at $11,500. The admission in his single balance sheet of the value of $11,500 for the company is in the context where the 2003 Holden Rodeo value is no longer included as his asset. That single balance sheet was tendered at the start of the hearing on 12 August and the figure for the value of the company has been adopted as admission against interest by the husband.

VALUE OF SHARES IN S PTY LTD

For five months commencing October 2005, the wife operated a business of selling on commission from a firm called FP. The sales were on a party plan arrangement. She acquired a shelf company called S Pty Ltd. She operated the business from the home and from time to time purchased sample products to be used at demonstration nights in peoples’ homes. She spent approximately $2,500 purchasing sample products. She sold products to a total value of $18,403 and received a commission totalling $3,422.
Because the sample products were used at demonstrations it could not be sold. She kept some of it for herself and others and gave some away to friends. At the time she ceased trading she had sample products for which she had paid about $500. She sold some of it and received $30. The rest was used or given away.
Her evidence is that she is not prepared to continue as it is not profitable enough for her to meet the cost of child minding so that she can go out at night to conduct the demonstration parties.
There was no valuation of the company shares provided by the wife in her case. Nor was there any such evidence in the husband’s case. However, given the small turnover of the company and the profit after allowing for the cost of the demonstration product (about $922 over about 5 months; an average of about only $184 per month), it appears that the business was not viable. There was no evidence that there are now any assets of value owned by the company. In the circumstances, on the balance of probabilities, the shares in the company have no value.

LOAN TO MR & MRS W

The evidence of the wife, Mr W and the husband is inconsistent in various respects about the loan to Mr & Mrs W by the parties and the repayments.
However, the evidence of the wife and Mr W seems to be consistent that $1,000 was lent by the parties to Mr & Mrs W for a holding deposit for the purchase of a property in late 2004 and this was repaid “almost immediately”.
There was then a subsequent loan or the purchase in October 2004.
The husband alleges that there was interest payable of 7% p.a. on the second loan. He says it was “a verbal agreement”, but does not provide evidence of the conversation alleged to have constituted the agreement to pay interest.
The evidence of the wife and Mr W is that there was no agreement to pay interest. The wife provides evidence of a specific conversation:
In a conversation between [Mr W], [Mrs W], [the husband] and myself, I said to [the husband] words or to like effect “Will we charge interest?”. [The husband] replied “No, you’re friends, we don’t want interests, just pay it back whenever.”
Mr W gave evidence that the wife told him, “We’d love you to have the money. We don’t want any interest. Pay it back when you can.” In cross-examination Mr W testified the four of them were together and it was agreed that there would be no interest repayable. He said, “The only discussions about interest was that there would be no interest.”
There is no allegation of any request by the wife or the husband at any time since October 2006 for the borrowers to pay interest.
The Court finds on the balance of probabilities that there was no agreement to pay interest.
The wife said the second loan was $34,000, the husband says it was $35,000, and Mr W testified that the total amount lent (including the holding deposit) was $34,000. But he later said that the second amount was “$33,000 or $34,000”. It appears that the second amount was not $33,000 because Mr W’s evidence and the evidence of the wife is that Mr W has since repaid another $33,600. Mr W’s evidence is that there was an agreement that there would be no interest payable. He does not suggest that he paid any amount for interest even though none was payable. If the amount repaid total $33,600, then that is inconsistent with the suggestion that only $33,000 was borrowed.
On the balance of probabilities, the total amount lent in October 2004 was $34,000.
The evidence establishes the following repayments have been made:
In the period March to July 2006 payable to the husband a cheque   $8,000
In August/September 2006, a cheque payable to the wife $5,000
At about the same time in cash paid to the wife    $600
In cash paid to the wife on 15 February 2008 $5,000
In cash paid to the wife on 29 February 2008  $10,000
In cash paid to the wife on 7 March 2008    $5,000
Total$33,600
The amount of the debt outstanding is $400.00.

PROPERTY AND LIABILITIES

The property and liabilities of the parties at the time of the hearing comprised the following:
Jointly owned property at V  $380,000
Wife’s interest in I Street  $130,000
Husband’s property at M -Agreed value            $360,000
Husband’s shares in DD Pty Ltd per husband’s admission           $ 11,500
Wife’s shares in S Pty Ltd  $   Nil
Wife’s 2004 Hyundi motor vehicle – agreed value           $ 14,000
Wife’s 329 shares in IAG Limited
at agreed value of $3.82 per share                          $    1,257
Jointly owned 214 shares in Telstra Limited at agreed value
of $4.25 per share  $      910
Wife’s 1,200 shares in BR Limited, agreed value   $       18
Wife’s 3,150 shares in Telstra Limited at agreed value of $4.25            $ 13,388
Wife’s 2006 Yamaha 250cc motor cycle – agreed value  $    3,500
Wife’s money upon deposit in banks or building societies,
Per wife’s oral evidence in cross-examination  $    4,392
Husband’s funds in building society per oral evidence  $        42
Husband’s funds in bank per admission in Exhibit A            $      113
Debts owing to parties by Mr & Mrs W  $      400
Cash in wife’s possession – per her oral evidence  $      105
Wife’s NAB Visa card credit – per oral evidence  $         23
Contents of wife’s home – agreed  $    3,000
Contents of husband’s home – agreed  $      500
Wife’s superannuation with AMP Flexible Lifetime Super,
agreed   $ 33,197
Husband’s superannuation entitlements with Australia
Super as at 29.7.08  $ 19,993
Wife’s savings in the National Bank of New Zealand
Balance per her admission against interest  $     800
Wife’s prepaid cruise, air fares and car hire  $   9,600
Wife’s entitlement to Child Support Arrears payable by husband $   9,586
Total  $996,524

The liabilities of the parties at the time of the hearing comprised:
Husband’s mortgage debt secured on property at M          $216,000
Wife’s mortgage debt secured on V property – agreed  $140,000
Husband’s NAB Visa card debt – agreed    $6,000
Wife’s second NAB Visa card debt – per wife’s oral evidence                    NIL
Wife’s ANZ Master card debt – per wife’s oral evidence approx     $1,000
Debt owing to Boyd Olsen for legal costs in the proceedings                    $1,306
Debt owing to Mr BY for purchase of motor cycle – approx   $4,927
Husband’s liability for Child Support Arrears   $9,586
Total  $378,819
The difference between the property and the liabilities at the time of the hearing was $ 617,505.

INTEREST ON THE WIFE’S LOAN OF $140,000 FOR I STREET

There is no direct evidence of the amounts paid by the wife after separation for interest on this loan. Her evidence is that after payment of other outgoings on the property from the rentals, she received a net amount of $98 per week, which she used towards payment of the interest on the loan. When she swore her affidavit and financial statement of 14 July 2008 the interest was $254 per week. When the loan was taken out in mid 2005 the interest was about $160 per week.
The Court takes judicial notice that between mid 2005 and the hearing there were a series of increases in the interest rates of bank loans with a variable interest rate. The Court does not have any evidence of the actual increases or the dates they applied. Doing the best one can on the evidence, the average interest rate since separation is estimated to be about $200 per week. When the $98 is offset the amount the wife provided from other sources averaged about $102 per week. For the period from separation to date the total she has paid is about $13,318.

FINANCIAL SUPPORT OF THE PARTIES’ 3 CHILDREN SINCE SEPARATION

The following events are established by the evidence:
·1/10/06 – husband’s child support liability was assessed at $3,417 pa based on a taxable income (adopted as his child support income) for 2005/06 of $26,903.
·The wife applied for a re-assessment and the Child Support Agency then adopted the figure $68,926 as his child support income for 20/10/06 to 19/10/07 $72,372 for the period 20/10/07 to 19/10/08.
·The husband objected to that assessment but the objection was disallowed 16 March 2007.
·The husband appealed to the Social Security Appeals Tribunal.
·25/5/07 the Social Security Appeals Tribunal set aside the Child Support Agency decision and held that the husband’s assessment for child support should be on the basis that for 20/10/06 to 19/10/07 his child support income was $68,926 and for 20/10/07 to 30/6/08 his child support income was $72,372.
·November 2007 – the Child Support Agency assessed the father’s child support liability for the period 1/7/08 to 31/3/09 as $1,104 pa ($94 pm). This was based on a taxable income of $18,828.
·12/4/08 the Child Support Agency re-assessed the husband’s child support liability at $339 pa for that same period. This was based on a child support income of $18,828 pa.
·17/7/08 the husband’s child support income assessment was revised for the period 4/4/06 to 14/5/06 and was assessed at an annual rate of $17,582.
·11/8/08 the Delegate of the Child Support Registrar granted the wife’s application for a re-assessment of the child support for the period 1/7/08 to 31/3/09. It was determined that the husband’s child support income for the period 1/7/08 to 30/6/10 would be taken as $75,629. It was agreed at the hearing that the rate payable is $15,155 per annum, which is approximately $290 per week.
The husband did not give evidence of what child support he has paid.
The evidence by way of child support assessment is minimal. There is no evidence of the liability for the period 15/5/06 to 1/6/07. There is no evidence of the assessed rate for the period 20/10/06 to 19/10/07, and 26/10/07 to 30/6/08; only the child support income amounts.
The only evidence of what he has paid comes from the wife:
First payment to wife, April 2006 $ 4,765.54
$1,000 per month from October 2006 to May 2008 $20,000.00
Total paid$24,765.54
Exhibit H establishes that the arrears as at 28 July 2008 were $9,585.92.
Accordingly, on the evidence the total amount paid or payable is $34,351.46. That averages about $ 277 per week (about $92 per child).
J turned 6 in August. E will be 5 in October, S turned 3 in June. The Court takes judicial notice that the costs of keeping Australian children are substantially more than $92 per week. As at July 2008 the wife’s expenses for the children (excluding any share of rent or mortgage expenses) were $451 per week. Doing the best one can on the evidence the wife has provided not less than an average of $150 per week since separation towards the financial support of the children. However, this has been funded from social welfare benefits and should not be treated as a contribution by the wife.

PAID WORK

During the 5.5 years of cohabitation the wife did not undertake paid work except her party plan work. From that she contributed about $922 for the support of the household.
Throughout the cohabitation the husband was in full time work as a tradesman and as the sole office bearer and shareholder of his company. The whole of the profit of that activity went to him as wages or as dividends, or accumulated profits of his company. He contributed his after tax income form this activity.

PARENTING

The husband worked long hours in his business. The turn-over of the business was, for example, $189,680 in 2005/06, although he was winding the business down after the separation in March 2006.
The husband often did jobs in Sydney and this work required extensive travel times. He often left home for work at 4.30am or 5am. He usually came home from work by 3pm.
On Saturdays he often went yachting during the two sailing seasons of the year. On about 8 Wednesdays he also went sailing.
There were considerable periods of the week when the husband was not available to assist with the care of the children because he was attending his work or he was sailing. On the evidence, even when both parents were present and available to care for the children, it was the wife who did most of it and the husband’s involvement was a limited support role.
On nights when the wife was doing the party-plan work, the husband minded the children, but they were usually in bed before she left. She occasionally relied upon paid child care, but in general it was she who cared for the children when they were not attending school or preschool.
Since separation, the wife has continued to provide the large majority of the children’s care. They have resided with her and have spent time with their father generally every second weekend. During the period of about 6 or 7 months that he was away in New Zealand he saw the children for only 4 days in January 2007 when he returned to Australia to attend a Conciliation Conference in the proceedings.
The wife before and after separation has provided a large majority of the care for the children. Relative to her contribution in that regard, the husband’s has been very limited.

HOMEMAKING

Throughout the cohabitation the wife performed the homemaking duties of cleaning the house, vacuuming, tidying, cleaning the bathroom and the toilet, washing dishes, drying dishes and putting them away, washing clothes, hanging out the clothes, and folding, ironing and putting away. She also usually made the beds and did the shopping for food for the household.
The husband on some rare occasions assisted her with such chores.
Apart from cooking a bar-be-cue every few weeks, he very rarely assisted with preparation of meals.

IMPROVEMENTS TO PROPERTY

After the parties commenced cohabitation there were some improvements to the property at B. The husband had erected, or engaged tradesmen to erect, an extension to the original house for a new kitchen, lounge, 2 bedrooms and a bathroom. It had reached only the lock-up stage. The parties engaged tradesmen including carpenters, tilers, plumbers and carpet layers, and they negotiated with the tradesmen to complete the house including performing the work listed in paragraph 30 of the wife’s affidavit of 14 July 2000.
The parties did some of the work themselves. Her evidence is:
[The husband] and I did a lot of work ourselves. [The husband] did most of the heavy lifting and specialised jobs. I assisted by painting interior walls, architraves, skirting boards and ceilings, mixing paints, mixing grout and helping with the laying of floor tiles and grouting and finishing off. I helped [the husband] to measure up the dimensions for the built in wardrobes. The built in wardrobes were pre-fabricated and I helped [the husband] to install them in the two new bedrooms.
In addition, the wife drove to the hardware store to purchase materials, tools and other things that were required, and she also fetched tools for the husband, carried out rubbish, and cleaned up at the end of each day they did work on the improvements.
The husband claimed in cross-examination that he spent $75,000 for the extensions. But there were no receipts, other documents, or records produced to corroborate that. In addition, it appeared he did not have the funds. The evidence is that the purchase price of the property three years earlier was $93,000. In addition they paid stamp duty, lawyer’s fees and other expenses of the purchase. They borrowed $118,000 on mortgage loan. It appears then that there was probably only about $22,000 or $23,000 available for expenditure on improvements. It seems that was the likely amount that was spent before the cohabitation, as the husband had no savings at the time cohabitation commenced. It appears that the figure of $75,000 was mere fiction.

CONTRIBUTIONS TO PROPERTY AND TO THE WELFARE OF THE FAMILY (Paras (a), (b), & (c) of Subsection 79 (4) of the Family Law Act)

The parties made the following joint and equal contributions:
· As borrowers of $300,000 from the Commonwealth Bank for the purchase of the V property and as lessors of it for 21 months;
·As borrowers of the $55,000 Commonwealth Bank line of credit for 5 months;
·As owners and lessors of the property at Y Street for 29 months;
·As borrowers of the 2004 loan of $315,000 from the National Australia bank and the $60,000 line of credit;
·As mortgagors of V property for 3 years to secure the $140,000 borrowed by the wife on the purchase of I Street;
·As lessors of the V property for 21 months; and
·As owners of the Coles Myer shares and joint Telstra shares.
The applicant wife made the following additional contributions:
·    She brought into the relationship property worth at least $185,000 comprising her interests in real estate worth about $127,300, furniture worth about $6,000, her NRMA shares worth $470, superannuation worth about $18,600, her car and savings worth about $30,500 and her investment with Bridgecorp Finance;
·    Her unpaid work doing the book-keeping for the company D Pty Ltd for 5.5 years;
·    About $23,682 in child support she received from P’s father (per annexure B to her affidavit of 14 July 2008);
·    As owner of a 1% interest in the V property and as mortgagor to the commonwealth bank of her share as security for the $300,000 loan;
·    As owner of her half interest in I Street for 3 years, as lessor for that period and as borrower of the loan of $140,000 for it’s purchase;
·    $922 from the business conducted by S Pty Ltd;
·    Her work on the improvements to B Property;
·    She painted the interior of I Street;
·    As legal owner of her shares and other interests in IAG, Telstra, BR Ltd, and IAG;
·    Almost all of the homemaking chores for the parties and their 3 children during the cohabitation;
·    The large majority of the parenting of the parties’ 3 children during cohabitation and since;
·    About $ 13,318 in interest payments since separation on her loan for the purchase of her interest in I Street; and
·    The homemaking chores for the parties’ 3 children since separation.
The respondent husband made the following additional contributions:
·He brought into the relationship his shares in D Pty Ltd and his then half interest in B property, each of which was not established to then have any value;
·His work after the commencement of cohabitation on the improvements to B property;
·A contribution as (part and then sole) owner of B property for 3.5 years and as borrower and mortgagor in respect of the loan obtained before the cohabitation for its purchase and improvement;
·As sole shareholder and sole office bearer of D Pty Ltd for about 7 years;
·As sole owner of the M property for about 6 years, as mortgagor of it to secure the loan of $248,000 from the Commonwealth Bank, as lessor of the property for about 6 years, and as mortgagor of the property to secure the National Australia Bank loan of $315,000 and line of credit;
·As owner of a 99% interest in the V property and as mortgagor to the commonwealth bank of his share as security for the $300,000 loan;
·As guarantor for the wife for her loan of $140,000 for the purchase of I Street;
·A nominal homemaking contribution during the cohabitation;
·Mortgage payments (unquantified) on the V property for 6 months after separation;
·$34,351 in child support paid or payable towards the support of the parties’ 3 children since separation;
·his after tax wages and dividends from D Pty Ltd from his work for the company for the 5.5 years of cohabitation;
·his contribution to the care and financial support of the wife’s child P for the 5.5 years of cohabitation (although not strictly a contribution under subsection 79(4), justice requires under paragraph 75(2)(o) that it be taken into account and it is more convenient to do so here);
·an indirect contribution to the welfare of the wife, P and the parties’ 3 children in that since separation they have had the rent free occupation off the V home; and
·a relatively minor parenting contribution in the 5.5 years of cohabitation and a limited parenting contribution since separation.
The joint and equal contributions are significant. The wife’s initial contribution was substantial and the husband’s was not shown to have any value. The wife’s initial contribution is more substantial to other financial contributions because it was in 2000 dollars.
Since separation the wife’s contributions other than to the properties have been:
·    Most of the care of the parties’ 3 children for 2.5 years;
·    The homemaking chores for them; and
·    $ 13,318 in interest payments on the loan for I Street.
Since separation the husband’s contributions other than to the properties have been:
·    $34,351 in child support;
·    payment of mortgage payments (unquantified) on V property for 6 months;
·    his contribution to their children’s care; and
·    his indirect contribution to the accommodation of the wife and the 4 children.
The contributions in the preceding 2 paragraphs appear to be roughly equal. The remaining contributions are numerous and diverse, but it appears that overall they too are roughly equal. What makes the difference is the wife’s initial contribution.
The overall ratio of their contributions is 60:40 in favour of the wife, but justice and equity requires that in calculating their entitlement based upon contributions alone, the calculation should be done by applying the ratio to a notional pool calculated as follows:
Present property and liabilities   $617,505
Add back
Wife’s post separation debts   $   7,233
Value of S Pty Ltd at separation  $     500
Payments received from Mr & Mrs W
post separation  $ 3,600
Husband’s post separation debt for child support $   9,586
Proceeds of sale of Coles Myer shares  $   5,400
Husband’s long service leave  $   5,635
Proceeds of Bridgecorp Finance investment  $ 11,143
Husband’s tax refunds from 2005/06 or earlier years      $ 11,015
Family Tax Payment received by wife from 2005/06       $ 16,000
D Pty Ltd dividend from 2005/06  $ 12,000
Subtotal  $ 729,617
Less
Adjustment for husband’s reduction in
Visa card debt since separation       $    400
Post separation assets
Wife’s Telstra shares            $13,388
Wife’s Motor cycle  $ 3,500
Wife’s Motor vehicle  $14,000
Wife’s entitlement to child suppt    $ 9,586
Wife’s prepaid cruise etc                 $ 9,600
Wife’s Increase in savings
($5,320 compared with $1,194)     $ 4,126
Husband’s increase in savings         $     155
$ 54,755
Adjusted Pool  $ 674,862
Applying the ratio to the adjusted pool gives figures of $404,917:$269,945 in favour of the wife.
The applicant wife’s entitlement from the adjusted pool would be as follows:
V property  $380,000
Half interest in I Street  $130,000
Shares in IAG( formerly NRMA Insurance)  $    1,257
Joint Telstra shares  $      910
BR Pty Ltd shares  $         18
Savings at separation  $    1,194
S Pty Ltd  $      500
Household contents  $    3,000
Payments from Mr & Mrs W  $ 25,600
Balance owing  $      400
Sale of Coles Myer shares  $    5,400
Proceeds of Bridgecorp Finance investment                    $   11,143
Family Tax Payment received by wife from 2005/06       $   16,000
Wife’s superannuation  $   33,197
Subtotal  $ 608,619
Less
Loan for I Street  $140,000
Adjustment payable to husband       $ 63,702                  $ 203,702
Entitlement   $404,917
The husband’s entitlement from the adjusted pool would be calculated as follows:
Adjustment payable by wife  $ 63,702
M property       $360,000
Shares in D Pty Ltd  $ 11,500
Payment from Mr & Mrs W  $    8,000
Long Service Leave received  $    5,635
Tax refunds received  $ 11,015
Dividend received for D Pty Ltd  $ 12,000
Household contents  $      500
Superannuation  $ 19,993
Subtotal  $492,345
Less
Visa card debt at separation  $    6,400
Joint NAB Mtge debt on M property          $216,000
Subtotal  $222,400
Entitlement  $269,945
The result would be a distribution of present property and liabilities of the parties as follows:
Husband           Wife
Adjustment from wife  $ 63,702
V property$380,000
Wife’s interest in I Street       $130,000
Husband’s property at M  $360,000
Husband’s shares in D Pty Ltd          $ 11,500
Wife’s shares in S Pty Ltd  $   Nil
Wife’s 2004 Hyundai  $ 14,000
Wife’s 329 shares in IAG Limited   $    1,257
Jointly owned 214 shares in Telstra Limited   $      910
Wife’s 1,200 shares in BR Limited  $         18
Wife’s 3,150 shares in Telstra Limited            $ 13,388
Wife’s 2006 Yamaha 250cc motor cycle   $    3,500
Wife’s money upon deposit in banks or building societies,                   $    4,392
Husband’s funds in building society   $        42
Husband’s funds in bank   $      113
Debts owing to parties by Mr & Mrs W  $      400
Cash in wife’s possession   $      105
Wife’s NAB Visa card credit   $        23
Contents of wife’s home        $    3,000
Contents of husband’s home  $      500
Wife’s superannuation- AMP Flexible Lifetime Super  $ 33,197
Husband’s superannuation --Australia Super  $ 19,993
Wife’s savings -National Bank of New Zealand   $     800
Wife’s prepaid cruise, air fares and car hire  $   9,600
Wife’s entitlement-Child Support     $   9,586
Total   property  $455,850      $604,176
Liabilities:
Adjustment payable by wife to husband  $ 63,702
Husband’s mortgage debt on M property          $216,000
Wife’s debt for I Street  $140,000
Husband’s NAB Visa card debt   $    6,000
Wife’s second NAB Visa card debt   NIL
Wife’s ANZ Master card debt   $    1,000
Debt owing to Boyd Olsen                   $    1,306
Debt owing to Mr BY            $    4,927
Husband’s liability for Child Support   $     9,856
Total   liabilities of each  $ 231,856      $210,935
Net Property & Liabilities of each   $224,264       $393,241

MATTERS UNDER SUBSEC 75(2) OF THE FAMILY LAW ACT

The husband is 44 and the wife turns 39 this week. They both enjoy reasonable health.
Orders based upon contributions alone would see the wife with about 63.7% of their present property and liabilities and the husband with about 36.3%. The wife’s present average weekly income (apart from her negatively geared property investment) comprises:
Social welfare payments                 $670
Child support –P  $    9
Child support- parties’ 3 children    $290
Dividends  $ 17
Total (at least)  $956
The husband’s present average weekly income is $720.
The wife before the parties cohabited worked in the transport industry. She has not since undertaken that type of work for about 8 years. It appears that her lack of more recent experience, particularly with modern vehicles, would mean that she could not obtain employment in that field without some retraining. Otherwise, it appears she is unlikely to obtain paid work other than unskilled work at low pay. The cost of day care for the preschool children and child care for the others before and/or after school is likely to be prohibitive for full time unskilled work. Allowing for such costs, the wife does not at present have any appreciable earning capacity in such work.
Before the parties cohabited the wife also worked as a reservist with the Military. That would require her to attend some camps and weekend activities. But she does not have family support or affordable child care for the 4 children to be minded. Her evidence is that if the husband minded the children that could facilitate her participation. But she testified, and he did not dispute, that since separation he has declined to spend time with P and has been unreliable in that at times he fails to attend to collect the other children for their time with him.
The finding is that the mother’s earning capacity is probably limited to that from part time unskilled work, significantly less than her income from social welfare payments, and likely to be mostly absorbed by the costs of child care.
The father has available to him the choice of working for himself instead of sharing the income from his work with G Pty Ltd. The evidence does not establish the profit of G Pty Ltd in 2007/08. However, the court finds on the evidence that the husband’s earning capacity is not less than $75,629, the figure of adopted by the delegate of the Child Support Registrar in August as the husband’s child support income.
The wife has the future care and control of the 3 children of the marriage. That is a significant factor. It will probably last for about 12 years for J, about 13 years for E and the best part of about 15 years for S.
The husband has commitments necessary to enable him to support himself. He has no commitments to support any other person other than his obligation to support the parties’ 3 children by way of child support and also by providing for them during the time they spend with him. His child support obligation is $290 per week.
The wife has the commitments necessary to enable her to support herself and to the support her 4 children, subject to the child support contribution of the 2 fathers. The cost of supporting the children appears to be about $451 per week, plus the children’s share of housing costs such as rent, or rates and mortgage payments.
The evidence does not establish that either party has a responsibility to support any other person.
The wife is eligible for the social security benefits she currently receives.
The wife is studying part time in year 2 (the final year) of a TAFE course for a Diploma. She has in mind the prospect of employment with a Domestic Violence Assistance Group, with whom she had voluntary involvement. The wage with the diploma qualification would be about $35,000. But she is interested in doing another 2 years at university to convert the Diploma to a Bachelor of Social Science Degree. With that degree she says the salary would be in the range of $50,000 to $75,000. She says that with a position using that qualification she could avoid reliance on Social welfare payments. She sees her future options as being “a stay at home mum”, continuing the study and obtaining work. She said her preference is to complete the Social Science degree. But the latter 2 options will depend upon availability of affordable child care.
By the parenting, homemaking and book-keeping roles the wife undertook during the cohabitation the husband was enabled to pursue his career and maintain and improve his work skills and work experience. She has contributed to his income and earning capacity.
It was a cohabitation of 5.5 years and the effect of the marriage and the roles the wife undertook has been that she did not maintain her skills and work experience in the transport industry and as a reservist and this has adversely affected her earning capacity.
The husband has a continuing liability to pay child support for the parties’ 3 children under the child Support decision of 11 August 2008.

SUBSECTION 79(2) OF THE FAMILY LAW ACT

Subsection 79 (2) provides :
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
The matters under subsection 75(2) that weigh in the husband’s favour are:
·Orders based upon contributions would see the wife in a far superior position as to property and liabilities;
·His ongoing liability to contribute child support for their 3 children; and
·The wife’s eligibility for the present social welfare payments she receives.
The matters under the subsection that weigh in the wife’s favour are:
·The husband’s far superior earning capacity;
·Her responsibility for the future care and control of the parties’ 3 children;
·Her commitments to support her 4 children;
·Her need for financial support to enable her to complete her diploma or Degree and obtain employment that will enable her to assume more of the financial support of thee parties’ children and herself;
·Her contribution to the husband’s income and earning capacity; and
·The adverse effect of the marriage on her income and earning capacity.
The matters favouring the wife are of greater weight than those favouring the husband. Overall the just and equitable result is for the present property and liabilities to be divided in the ratio of 70:30 ($432,253:$185,252) in favour of the wife.

WIFE’S APPLICATION FOR LUMP SUM CHILD SUPPORT

General

The wife seeks an order for payment of thee child support currently assessed and payable by monthly instalments for the period from now to 30 June 2010 to be paid by a lump sum.
The wife’s application is under paragraph 123(1)(b) of the Child Support (Assessment) Act. Section 123A of the Act provides:
Orders for provision of child support in the form of lump sum payment to be credited against amounts payable under liability
(1) The court may make an order that a liable parent provide child support for a child to a carer entitled to child support in the form of a lump sum payment to be credited against the amount payable under the liability under the relevant administrative assessment if:
(a) the carer entitled to child support or the liable parent makes an application to a court under paragraph 123(1)(b); and
(b) the court is satisfied that it would be:
(i) just and equitable as regards the child, the carer entitled to child support and the liable parent; and
(ii) otherwise proper;
to make an order under this section; and
(c) the amount of the lump sum payment equals or exceeds the annual rate of child support payable for the child under the administrative assessment.
Note: If the court makes such an order, the lump sum payment is credited under section 69A of the Registration and Collection Act against the amount payable under the liable parent's liability (rather than reducing the annual rate of child support payable under the administrative assessment).
(2) A lump sum payment may include a payment by way of transfer or settlement of property.
(3) An order under subsection (1):
(a) must specify the amount of the lump sum payment; and
(b) must specify that the lump sum payment is to be credited against 100%, or another specified percentage that is less than 100%, of the amounts payable under the liability.
(4) In determining the application made under paragraph 123(1)(b), the court must have regard to:
(a) the administrative assessment; and
(b) any determination in force under Part 6A (departure determinations) in relation to the child, the carer entitled to child support and the liable parent; and
(c) any order in force under Division 4 of this Part (departure orders) in relation to the child, the carer entitled to child support and the liable parent; and
(d) whether the carer entitled to child support is in receipt of an income tested pension, allowance or benefit; and
(e) if the carer entitled to child support is not in receipt of such a pension, allowance or benefit--whether the circumstances of the carer are such that, taking into account the effect of the order proposed to be made by the court, the carer would be unable to support himself or herself without an income tested pension, allowance or benefit.
(5) In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make an order under subsection (1), the court must have regard to the matters mentioned in subsections 117(4), (6), (7), (7A) and (8).
(6) In having regard to the earning capacity of a parent of the child under paragraph 117(4)(da), the court may determine that the parent's earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied as mentioned in subsection 117(7B).
(7) In determining whether it would be otherwise proper to make an order under subsection (1), the court must have regard to the matters mentioned in subsection 117(5).
(8) Subsections (4), (5), (6) and (7) do not limit the matters to which the court may have regard.
The Court takes into account that it is conceded by the husband’s counsel that there is an administrative assessment implementing the departure determination of 11 August 2008 and the effect of the assessment is that the annual rate of child support payable by the husband is $15,155 for the period 1/7/2008 to 30/6/2010.
The wife is entitled to income tested benefits, allowances and pensions being the Single Parenting Payment, Family Tax Benefit and Pensioner Education Supplement in the amounts set out in her Financial Statement. They total $670 per week. She would be unable to adequately support herself without those.

Just and Equitable?

Section 3 of the Act provides:
Duty of parents to maintain their children
(1) The parents of a child have the primary duty to maintain the child.
(2) Without limiting subsection (1), the duty of a parent to maintain a child:
(a) is not of lower priority than the duty of the parent to maintain any other child or another person; and
(b) has priority over all commitments of the parent other than commitments necessary to enable the parent to support:
(i) himself or herself; and
(ii) any other child or another person that the parent has a duty to maintain; and
(c) is not affected by:
(i) the duty of any other person to maintain the child; or
(ii) any entitlement of the child or another person to an income tested pension, allowance or benefit.
The proper needs of the parties’ 3 children are for them to be cared for educated and trained at a standard that has regard to the financial circumstances of the parties, including their earning capacities and their property. That is a standard involving a level of expenditure higher that what the wife has been able to provide, even with the child support the husband has paid (about $1,000 per month).
The children have no significant income, earning capacity, property or financial resources to meet their needs.
The findings as to the income, property and financial resources of the parties are set out above.
The findings as to the earning capacities of the parties are set out above.
The commitments of the wife necessary to enable her to support herself are itemised in her financial statement and amount to $82 per week plus her share of housing costs such as rent, or mortgage payments and rates.
The weekly commitments of the husband for housing costs appear to be one half (he shares with Ms GM) of mortgage payments and rates of $437. That is $218.50 and he also has expenses for car registration and miscellaneous expenses paid with his Visa card ($64). His payments for life assurance were not established to be necessary to enable him to support himself. The total expenses he has included in is Financial Statement that are necessary to enable him to support himself is $282.50 per week. His evidence is that Ms GM gives him $350 per week as her share of household expenses. Whether his necessary commitments are $282.50 or $350 per week, the level of expenditure is much higher than the wife’s.
The commitments of the parties necessary to support their children and the wife’s necessary to support P have been discussed earlier.
Indirect costs for the parties’ 3 children are being incurred by the wife for the provision of their housing, but also in terms of the unaffordability of child minding services preventing the wife from undertaking part time paid work.
The husband has demonstrated over the last 2 and a half years strong opposition to payment of child support. On occasions he has withheld relevant information from the child support Agency and knowingly provided false information. He has closed down his business, and relied upon consequent artificially reduced income figures to reduce his child support income. He has also failed to disclose his income from 6 months work in New Zealand. He has constructed an artificial structure whereby he is employed by G Pty Ltd for an unrealistically low level of remuneration with the purpose or a purpose of minimising his child support liability. He has accumulated substantial arrears of child support owing for the support of his children.
If a lump sum order is not made the wife and her four children are likely to suffer hardship because the husband will not pay the child support as it falls due.
It would be just and equitable for the children, the wife and the husband to make an order for payment of the child support for the period from today until 30 June 2009 by lump sum.

Otherwise Proper?

It would be otherwise proper to make such an order because of:
·the nature of the duty of a parent to maintain a child, particularly because the parents have the primary duty to maintain their children; and
·payment by a lump sum would not see the wife receive a higher amount in 2008/09 than if the child support were paid by monthly payments as assessed and should not result in the wife receiving any lesser payments of income tested pensions, allowances or benefits in 2008/09 than if the child support were paid monthly as required by the assessment.

SPOUSE MAINTENANCE

The wife seeks lump sum spouse maintenance of $30,000 to cover a period of 4 years. Subsection 72(1) of the Family Law Act provides:
A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
The wife has the care and control of the 3 children of the marriage and at this stage wishes to continue her role as a parent, homemaker and student. But the wife has substantial net property, including a negatively geared investment property. She has not established that she is unable to adequately support herself. Her spouse maintenance application should be refused.

________________________
The Hon Justice G. Mullane

Date: 23 September 2008

[2008] FamCA 850

23 September 2008

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