F and F

[2009] FCWA 131

[2009] FCWA 131

JURISDICTION	:	FAMILY COURT OF WESTERN AUSTRALIA
ACT	:	FAMILY LAW ACT 1975
LOCATION	:	PERTH
CITATION	:	F and F [2009] FCWA 131
CORAM	:	THACKRAY CJ
HEARD	:	19 MARCH 2009
DELIVERED	:	9 OCTOBER 2009
FILE NO/S	:	PTW 3518 of 2007
BETWEEN	:	F Applicant/Husband
AND
F Respondent/Wife
Catchwords:

PROPERTY SETTLEMENT - Whether agreed orders sought by the parties are just and equitable - Where the wife has primary responsibility for care of the children - Where the husband has a vastly greater earning capacity than the wife - Overall property division of 68% to the wife just and equitable in the circumstances.

SPOUSAL MAINTENANCE - Whether it would be inappropriate for the wife to receive spousal maintenance given the substantial property settlement in her favour - Property settlement not to be taken into account except when considering the parties' financial positions - Order for spousal maintenance.

Legislation:

Child Support (Assessment) Act 1989 (Cth)
Family Law Act 1975 (Cth)

[2009] FCWA 131

Category: Not Reportable

Representation:

Counsel:

Applicant	:	Mr S Moncrieff SC
Respondent	:	Mr J Hedges

Solicitors:

Applicant	:	Rattigan & Associates
Respondent	:	R E Purvis & Co

Case(s) referred to in judgment(s):

Best and Best (1993) FLC 92-418
Clauson & Clauson (1995) FLC 92-595

[2009] FCWA 131

1 [Mr F] and [Mrs F] separated in 2006. They had been in a relationship for

12 years. They have agreed arrangements for their two children. They have also
agreed the form, but not the effect, of orders for division of their property.

2 The issue I am required to decide is the wife’s application for spousal

maintenance of $300 per week. The husband says the agreed property settlement so greatly favours the wife that it would be inappropriate for her to receive maintenance, even if she had a need for it. The wife says she is entitled to maintenance as well as the majority of the property because of the husband’s very high income and her need to accommodate and support herself and the children.

Background

3 The husband and wife commenced cohabitation in about 1995, were married in

2005 and separated in 2006 (although the husband did not move out of the
matrimonial home until early 2007). They were divorced in May 2008.

4 There are two children of the marriage, [L], born in 1999 and [C], born in 2003. The boys have lived with the wife since separation.

5 The husband is 33 years of age. He is employed as a [supervisor]. He works in

the [the north-west] on a 9 days on and 5 days off roster. He comes back to Perth
during each period off work.

6 The wife is 32 years of age. She lives in Perth and works as a shop assistant on

a part-time basis.

7 The husband and wife went to the same high school. The husband left school in Year 10 and the wife remained on until the end of Year 12.

8 The husband completed his apprenticeship as a cabinetmaker during the early

years of the relationship; however, in 1998 he took up employment at the mine in the
[north-west], initially as a truck driver, then as a miner and now as a supervisor.

9 The wife has worked on and off since leaving school, usually as a shop assistant.

Near the end of the relationship she and her father commenced a business at a suburban market. The business was not successful and closed after the parties separated.

10 The husband and wife purchased a block in Perth in 2001, on which they built a house. The wife and children have lived in that home ever since.

11 In 2006 the husband and his mother purchased two investment properties in Perth. The properties were “negatively geared”.

12 The husband commenced proceedings for property settlement in July 2007. The

wife responded seeking a division of assets/superannuation 75:25 in her favour. As part of her settlement she wanted the equity in the matrimonial home and the other assets in her possession. In January 2009 the wife filed an amended Response seeking

[2009] FCWA 131

the same property settlement orders, but adding the application for spousal
maintenance.

13 The matter proceeded to trial in March 2009. I granted leave to the wife,

notwithstanding the husband’s opposition, to amend her original response to seek the foreshadowed order for spousal maintenance. Her application was made within the limitation period and the husband had been on notice for some weeks prior to the trial.

14 During the course of the trial I made parenting orders by consent. Under these

orders, the boys will spend two nights with the husband every two weeks – i.e. during
each of his rotations in Perth. They will spend the rest of their time with the wife.

The financial orders sought

15 The orders sought by the husband were set out in his Papers for the Judge. He

proposed that the wife receive the equity in the former matrimonial home. He otherwise proposed that the wife keep the assets in her possession, including the [four wheel drive vehicle]. He proposed that the wife would refinance the mortgage on the home. The husband otherwise proposed that he would retain the investment properties and other assets in his possession. Each party would retain their superannuation.

16 The orders the wife had sought in her Response were the same as those proposed

by the husband. The only difference was that the wife had prefaced the more specific orders in her application by a request for an order that the “net assets of the marriage and superannuation entitlements of the parties” be divided 75:25 in her favour. There was no suggestion that there should be a balancing payment to bring about this proposed division.

17 The parties were therefore in agreement about the assets each would keep and

the liabilities for which each would be responsible. Counsel for the wife accordingly submitted that I should treat the parties’ proposals as if they were an application for consent orders and then simply move on to determine the spousal maintenance dispute.

18 Senior counsel for the husband submitted that it was necessary for me to

determine whether the proposed settlement was “just and equitable”. He said that I should make findings in relation to some contentious issues about the asset pool. He argued that in the process of considering the property settlement issues I would come to the view that any entitlement the wife may have had to maintenance would be satisfied by the terms of the agreed property orders.

19 Counsel for the wife submitted that the approach advocated by the husband

amounted to a request for a “back door” declaration pursuant to s 77A of the Family Law Act 1975 (Cth) (“the Act”) in circumstances where no such declaration had been formally sought.

20 Section 77A of the Act provides as follows:

(1) Where:

[2009] FCWA 131

(a)	a court makes an order under this Act (whether or not the order is made in proceedings in relation to the maintenance of a party to a marriage, is made by consent or varies an earlier order), and the order has the effect of requiring:
(i) payment of a lump sum, whether in one amount or by instalments; or

(ii) the transfer or settlement of property; and

(b) the purpose, or one of the purposes, of the payment, transfer or settlement is to make provision for the maintenance of a party to a marriage;

the court shall:

(c)	express the order to be an order to which this section applies; and
(d)	specify the portion of the payment, or the value of the portion of the property, attributable to the provision of maintenance for the party.

(2) Where:

(a)

a court makes an order of a kind referred to in paragraph (1)(a); and

(b)

the order:

(i)	is not expressed to be an order to which this section applies; or
(ii)	is expressed to be an order to which this section applies, but does not comply with paragraph (1)(d);

any payment, transfer or settlement of a kind referred to in paragraph (1)(a), that the order has the effect of requiring, shall be taken not to make provision for the maintenance of a party to the relevant marriage.

21 In the absence of any formal application by the husband for a s 77A declaration,

I consider it would be open to me to simply express my satisfaction that the agreed orders are just and equitable, make the orders by consent, and then move on to the application for spousal maintenance. If I did so, s 77A(2) would require me to proceed on the basis that no provision had been made for the maintenance of the wife. However, in deference to the arguments put by both counsel, I intend to make findings in relation to the property settlement. Some of these will be of significance when I come to deal with the application for spousal maintenance.

[2009] FCWA 131

Property settlement approach

22 Applications for property settlement ordinarily involve a four step process,

namely:

• identify and value the assets and liabilities of the parties;

• assess each parties’ contributions to the assets;

• assess a range of factors set out in s 79(4)(d) – (g) of the Act; and

• consider whether the proposed orders are just and equitable.

The asset pool

23 I find the assets and liabilities to be as follows (the ownership is in accordance

with the agreement about how the property will be divided, rather than the legal
entitlements):

Wife	Husband
$	$

Assets

Former matrimonial home	484,500
First investment property	166,250
Second investment property	185,250
Boat	28,000
[4WD]	10,000

Chattels	5,015	795
Shares	946

ANZ Bank Account	3,249
BankWest Accounts	28

Total Assets	499,515	384,518
Liabilities
Mortgage on former matrimonial	180,665
home

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Loans relating to investment properties	285,740
ANZ Progress account	2,559
ANZ Loan – [4WD]	3,959
Liability to father	11,500

Total	196,124	288,299
Net assets	303,391	96,219

24 The net value of the pool is therefore $399,610. In addition, the husband has

superannuation worth $49,867 and the wife has superannuation worth $9,425. The
only matters about which comment is required are these:

Real estate

25 The real estate had been valued in 2008. The matrimonial home was valued at

$510,000. The husband’s interest in one of the investment properties was valued at
$175,000 and his interest in the other was valued at $195,000.

26 During his evidence-in-chief the husband tendered a letter sent by his solicitors

to the wife’s solicitors in October 2008 advising that he had sold his interest in the investment properties to his mother. Copies of the signed transfers were enclosed. The letter noted that the husband would receive “approximately $370,000” from the sale. (This figure represents the value of the husband’s interest in the properties as found by the valuer.) A request was made in the letter for the wife to remove caveats to allow the sale to be effected.

27 The settlement did not proceed, apparently because the wife had not removed the

caveats. During the course of his evidence the husband said his mother was no longer prepared to proceed at the original price (although stamp duty of $13,000 had already been paid). He said his mother wanted the properties to be revalued before she went ahead with the deal.

28 No evidence was given to indicate that the husband’s mother was legally entitled

to rescind the agreement for sale; however, given the passage of time and the fact the transaction is not at arms length, I accept it is likely that the contracts will be renegotiated. I have therefore included all of the properties at the original valuation less 5%, which is what the husband said had been agreed with the wife. I did not understand the wife to contend for any other position (see her Papers for the Judge and the schedule of assets tendered by her counsel during the hearing).

[2009] FCWA 131

Chattels

29 I have included the chattels in the former matrimonial home at the agreed value.

However, I note that the husband’s Papers for the Judge indicated that the parties’ agreement that the wife will keep these chattels was “subject to some minor adjustments”. I was informed during the hearing that I would receive a schedule of the agreed division of the chattels; however, this was not made available. I am therefore unaware of the extent to which the value of the chattels to be retained by the wife will be reduced. I presume the amount involved will be modest.

Long service leave

30 The husband has long serve leave entitlements worth almost $33,000. He says he does not intend to cash these but proposes to take time off work.

31 Both counsel accepted that the entitlements were not “property” but rather

a resource available to the husband. Counsel for the wife did, however, note that if the husband lost his job later this year (given the evidence discussed below), the husband would receive this entitlement in a lump sum. I accept this is so but, for the time being, the entitlements remain only a resource.

Superannuation

32 I accept the submission of senior counsel for the husband that the

superannuation entitlements should be treated separately from the other assets. It is true the husband has much more superannuation than the wife, but on the other hand it will be a long time before he is able to access it.

Addback of legal costs

33 The husband has paid $13,539 towards legal costs incurred in the proceedings.

His total costs were $29,840. The husband’s evidence indicated that at least some of his fees were paid with substantial income taxation refunds he received after the separation. A portion of these would have been related to income earned when the parties were together; however, it was not possible to determine to what extent.

34 The wife has incurred legal costs of $16,694. Although I had understood from

reading the relevant costs notification letter she had paid costs of $10,023, I was
assured by both counsel that she had paid nothing.

35 It is a somewhat academic exercise to determine whether the paid legal fees

should be notionally added back into the pool, given that the parties are in agreement about the orders to be made. Subject to any orders for payment of costs, it appears both parties will owe a similar amount to their lawyers. It is unclear how the wife will discharge her fees (perhaps with help from her parents or by borrowing more when she refinances her mortgage). The husband would be able to pay his legal fees, if necessary by selling the boat, which he uses only infrequently.

[2009] FCWA 131

ANZ Progress Account debt

36 The formal orders sought by both parties were silent as to who should be

responsible for this debt. The husband’s Papers for the Judge indicated that the liability was agreed at $2,559 but there was no indication as to which of the parties was responsible for the debt. The schedule provided by counsel for the wife during the trial indicated that the liability was that of the husband. In the absence of any comment from senior counsel for the husband I have proceeded on the assumption that this is to be the husband’s liability.

[Four wheel drive] loan

37 The orders formally sought by both parties were also silent in relation to which

party should assume responsibility for the car loan; however, the wife said in her affidavit that she was willing to assume responsibility. Her counsel’s closing submissions were also predicated on this assumption. I have proceeded on that basis.

Capital Gains Tax

38 The husband included in his Papers for the Judge an allowance for Capital Gains

Tax of $20,000. This was not included in the wife’s schedule of liabilities. The only reference to this liability in any of the evidence was in the husband’s affidavit where he proposed he be responsible for the Capital Gains Tax.

39 Senior counsel for the husband indicated in his opening address that the Capital

Gains Tax figure mentioned in the Papers for the Judge was an estimate, based on the agreed values of the investment properties and in light of the proposed sale of the husband’s interest. I was not informed who had prepared the estimate or any of the assumptions made in arriving at the estimate. No admissible evidence was provided concerning the Capital Gains Tax. Nor was I provided with any evidence concerning the cost of acquisition of the properties. I therefore cannot make my own estimate, even presuming it would be appropriate to do so.

40 In any event, whether or not the liability will be incurred is dependent on

whether the husband goes ahead with the proposed sale. I am not entirely convinced that the sale will proceed, although I accept it is a possibility. The rationale for the sale appeared to be that the husband wanted to free up capital to acquire a residence of his own. Given the husband’s level of income, and the advantages associated with retaining the properties, I would have thought there might have been a better way for the husband and his mother to proceed. However, I am not aware of all of the relevant circumstances and this issue was not agitated before me.

41 In the absence of evidence (and in the absence of a concession by the wife) I do

not see any basis upon which I could include this contingent debt in the list of liabilities. On the other hand, I did not understand the wife to be suggesting that there would be no Capital Gains Tax liability. I can therefore proceed on the basis that if the husband does go ahead with the sale, he will incur a tax liability of an indeterminate amount.

[2009] FCWA 131

Liability to wife’s father

42 The wife says she owes her father $11,500 and that this should therefore be included as a liability.

43 The wife gave evidence in her affidavit that she had persuaded her father to enter

into a business partnership with her prior to separation. The venture was not a success and continued for little more than a year. The business was financed by the father. The wife gave clear evidence that the loss on the disposal of the business had been approximately $23,000, of which her one half share was $11,500.

44 Senior counsel for the husband submitted in his opening address that there was

no “evidence” of the debt and that no documents had been provided concerning it. The wife was cross-examined about the business but, save for clarifying chronological details, the only direct question put to her concerning her liability was whether or not her father had made any demands for repayment. To this question the wife responded that her father had brought up the issue in discussion. The only other questions put to the wife on this topic were to confirm that she was not calling her father as a witness and that he had not filed an affidavit.

45 In the absence of any direct challenge to the wife’s evidence, I accept she is

indebted to her father in the amount alleged. It would, of course, have been desirable for the wife to have provided corroboration of her assertions, but I do not consider the absence of corroboration to be fatal. I do, however, consider it is unlikely that the wife’s father will demand repayment, given he has not done so to date.

Contributions

46 The husband’s Papers for the Judge asserted that contributions should be

assessed as being equal. The wife’s Papers did not comply with the Case Management Guidelines in that they did not indicate her position in relation to the percentage division of the assets arising out of assessment of contributions. However, I did not understand it was suggested that the wife regarded her contributions as being any greater than those of the husband.

47 Both parties made significant contributions. The husband made the greater

financial contribution and the wife made the greater contribution as homemaker and
parent. I have no hesitation in finding their contributions to be of equal value.

Section 75(2) adjustment

48 The husband submitted that an adjustment of only 15% for the s 75(2) factors

was warranted – i.e. that the wife was entitled overall to 65% of the pool. It was claimed that the effect of the agreed orders was that the wife would receive just over 80% of the assets (although it was conceded that if superannuation was included the percentage would be reduced to 73%).

49 The wife, in effect, sought an adjustment for s 75(2) factors equivalent to 25% of

the assets and superannuation. Her counsel submitted that, if she had asked for it, the

[2009] FCWA 131

wife would have “come close” to receiving all of the available assets because of the vast differential in earning capacities. He referred to Best and Best (1993) FLC 92-418, where one party received all of the assets in a small pool because the other party had a very large earning capacity.

50 It is in the context of these competing positions that I now turn to consider each of the relevant s 75(2) factors that appears relevant.

(a) the age and state of health of each of the parties

51 The husband and wife are both in their early 30s. Both enjoy good health,

although the husband has had his gall bladder removed and has had some procedures
on a torn cartilage.

(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment

52 The property and financial resources of the parties have already been considered.

I will discuss the parties’ incomes and earning capacities in detail when dealing with the spousal maintenance application. It is sufficient to say at this point that the husband earns about eight times what the wife earns ($3,050 per week, compared to $380 per week). Even if the wife were to work full time she would have a significantly lower income than that enjoyed by the husband.

53 The husband says he does not envisage he will be able to continue in his current

employment for more than three years because he has been working in the mining industry for the last ten years. He says his job is “very mentally and physically draining” as he has to work 15 hour days and there is a lot of travelling. He says “it has got to the stage where I do not want to continue to do it”. He then went on to say that “in the near future or a year or two I will return to work in the metropolitan area where my wage would be greatly reduced”.

54 Although the husband was not cross-examined about these claims I note that

earlier in his affidavit the husband had said that the parties’ relationship ended because of their arguments about him working away. The wife wanted him to cease working in the [north-west] but he refused to do so. He said that they had “debt which I was concerned about managing and paying for and I was not prepared to give up working away” and that he “needed to continue to work away to keep up our standard of living”.

55 If the husband was planning to give up his work it seems to me that the time to

do it would have been when the parties were having these arguments. Even in the absence of cross-examination I am not persuaded that the husband will give up work as quickly as he now claims. That said, I can appreciate that the husband does have to work extremely hard and that the travel must be very draining. I accept that he would not wish to spend the rest of his working life in such circumstances; however, I also

[2009] FCWA 131

consider the husband will find it very difficult to give up such a lucrative income as he

seeks to rebuild his financial position after the breakdown of his marriage.

(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years

56 The wife has responsibility for the care of the two relatively young children of

the relationship. She has very little respite, given that the husband works away and has the children on only two nights a fortnight. (The wife would like the husband to have the children more than he does.) The wife’s evidence indicates that the oldest child is not coping well with the separation and receives counselling.

(d)

commitments of each of the parties that are necessary to enable the party to support:

(i)	himself or herself; and
(ii)	a child or another person that the party has a duty to maintain

57 Neither party has any commitments that are out of the ordinary. If anything, the

husband’s commitments are less than “average” in that for 9 days out of 14 he has full board provided. On the other hand the husband has been meeting the shortfall between rent and expenses on the two investment properties. This will end if the properties are sold as he proposes.

(e) the responsibilities of either party to support any other person

58 Neither party has any commitment to support any other person.

(f)  subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:

(i) any law of the Commonwealth, of a State or Territory or of another country; or

(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;

and the rate of any such pension, allowance or benefit being paid
to either party

59 The wife is in receipt of Centrelink benefits. In her statement of financial

circumstances filed in July 2008 she said these amounted to $220 per week. However, at that time she was disclosing an income of only $250 per week. I was not advised of the extent of her Centrelink entitlements now that she is earning in the region of $380 per week.

60 The husband has no entitlement to a pension, allowance or benefit.

[2009] FCWA 131

61 Both parties have superannuation entitlements as set out above. It is agreed there should be no superannuation splitting order.

(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable

62 The standard of living of both parties has decreased since separation. The

husband now has to share a small home with his mother. The wife has had to struggle
to make ends meet on a significantly reduced income.

63 I consider both parties should be able to enjoy a decent standard of living. This

ought to be possible, given the relatively high level of income in the family. However,
it needs to be kept in mind that their incomes are now required to support two homes.

(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income

64 This factor is not relevant as the wife has no plans to undertake any further

studies or to commence another business. She says that she could not undertake any
further studies because of her responsibilities to the children.

(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party

65 I accept the wife’s submission that by caring for the home and the children she

has freed the husband to continue his employment. He has been able to obtain
advancement in his company and now enjoys a very high income.

(k)	the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
(l)	the need to protect a party who wishes to continue that party’s role as a parent

66 I accept the wife’s evidence that during the relationship the husband told her he

did not want her to work and that she should care for the children full-time, since he was in a position to support the family. I am satisfied the marriage has adversely affected the wife’s earning capacity to the extent that she now has responsibility for two young children, which will make it very difficult for her to engage in full time employment. The wife did try to establish a business, but this was a failure.

(m) if either party is cohabiting with another person—the financial circumstances relating to the cohabitation

67 Neither party is cohabiting with any other person.

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(n) the terms of any order made or proposed to be made under section 79 in relation to… the property of the parties

68 In dealing with this subparagraph the wife noted that the orders she was

proposing would allow her to retain the former matrimonial home for herself and the children. This is clearly a motivating factor in the wife’s application for spousal maintenance.

(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage

69 It was claimed in the wife’s Papers for the Judge that the husband was paying

child support at the assessed rate of $1,438 per month. The husband claimed that he had “contributed significantly in excess of any assessment of child support to the financial support of the wife” and that he would continue to contribute to the support of the children at a high level.

70 It was common ground at trial that the husband was not, in fact, paying child

support to the wife. Instead he was paying the mortgage on the matrimonial home and other payments for the benefit of the wife and children. Although the evidence is not entirely clear, it seems the husband’s child support up to 1 July 2008 was assessed at $2,126 per month; from 1 July 2008 to 1 November 2008 it was $1,438 per month; and thereafter it was at the rate of $1,556 per month.

71 Following the separation, the husband agreed to pay the wife $1,000 per month

in lieu of child support. In addition, he agreed to pay other expenses. He quantified these in his affidavit of September 2008 and in his statement of financial circumstances of March 2009. The figures did not always “line up” although I acknowledge there may have been changes over time; for example, in interest rates.

72 In any event, this was the information the husband provided concerning his

expenditure for the benefit of the wife and children (figures given on a monthly basis
have been recalculated on a weekly basis):

Liability Per Affidavit Per Form 13

$ $

Mortgage	346	261
House and Contents Insurance	26	16
Private Health Insurance	80	70
Vehicle Registration	10	Nil
Car Payments	108	108
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Rates and Taxes	30	Nil
Total	600	455

73 The husband also agreed at the time of separation to pay other outgoings on the

home, including telephone, water, gas, electricity, internet access and Foxtel. Although the formatting of paragraph 31(h) of the husband’s affidavit (where he set out these expenses) might suggest that the figure of $30 per week, which appeared alongside rates and taxes, also included an allowance for these other outgoings, that seems to me unlikely. I have no other evidence of what these payments cost the husband but in total they would have been a significant amount of money.

74 In November 2007 the husband warned the wife that he was going to stop the

periodic payments of $1,000 per month. The wife says he also threatened to stop paying “the mortgage and expenses”. The husband continued to pay the $1,000 per month until approximately April 2008 (according to the wife) or August 2008 (according to the husband). I considered it more likely that the payments stopped in April 2008, but little turns on this.

75 At the stage the husband stopped making the periodic payments, he also ceased

paying the utilities, car registration and the cost of internet access and Foxtel. He continued to pay the mortgage, the car loan, the house and contents insurance and private health insurance. The wife and children no longer have internet or Foxtel, presumably because the wife cannot afford these commitments.

76 The only cash payments made by the husband since he ceased the periodic

payments were $300 paid in June 2008 (when the wife said she had no money) and
$200 (in the same month for [C]’s birthday).

77 Analysis of the payments made by the husband up until the time he ceased the

periodic payment to the wife suggests that he was paying well above what he would have been obliged to pay by way of child support. However, I am not satisfied that the husband paid anything more than would have been his legal obligation at the time, given the commitments the parties had incurred and the wife’s inability to maintain herself adequately. In this regard I note that the wife was apparently only earning $250 per week in 2008.

78 Analysis of what the husband is presently paying indicates that he is paying

somewhat more than would be required by his current child support assessment. Again, I do not consider that the husband has been paying any more than he should have been paying, once again bearing in mind the commitments the parties had incurred (on the mortgage and the motor vehicle). I should also note there is no suggestion that during this period the husband has incurred any additional debt and, in fact, he has had sufficient funds to waste on gambling.

79 In all of these circumstances I do not consider that s 75(2)(na) favours one party

or the other.

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Assessment of s 75(2) factors

80 On my assessment of the asset pool, the agreed settlement will involve the wife

receiving about 76% (or about 68% if superannuation was treated as an asset). In my view such an outcome would be well within the range of discretion, given the relatively small size of the pool and all of the factors I have discussed.

Just and equitable?

81 An adjustment for s 75(2) factors of 26% in an asset pool of $399,610 amounts to $103,898. Factoring in superannuation, an adjustment of 18% in a pool of $458,902 amounts to $82,602. I recognise that the disparity created between the parties as a result of such an adjustment is twice these figures. Nevertheless, I consider the outcome to be just and equitable bearing in mind in particular the wife’s responsibilities to accommodate and care for two young children and the vastly differing earning capacities of the parties.

Spousal maintenance

82 I turn finally to the real issue, namely whether or not the husband should pay spousal maintenance – and if so whether at $300 per week or some lesser rate.

83 Counsel for the wife conceded in his closing submissions that the wife was not

seeking spousal maintenance “indefinitely”. He acknowledged it would be appropriate for the payment to end in about three years time, at which stage the children would be that much older and the wife would hopefully be “on her feet”.

84 Senior counsel for the husband submitted that the wife had achieved precisely

the settlement she had set out to achieve (namely retaining the equity in the matrimonial home and other property in her possession) and that having done so she should accept responsibility for the obligations on the properties she was to receive, namely the mortgage and the car loan.

85 It follows from what I have said about the property settlement that I do not

accept that the wife has received anything more than the amount to which she was entitled after assessment of contributions and adjustment for the s 75(2) factors. Consideration of the wife’s application for spousal maintenance should therefore proceed without any regard to the adjustment of property interests – save to accept that the division of property provides the basis for considering the parties’ financial positions (Clauson & Clauson (1995) FLC 92-595 at 81,907).

86 The husband will be left with assets worth $96,219 net and the wife will have $303,391 net. The husband will have his superannuation entitlements worth $49,867 (and increasing significantly each year while he retains his employment) and the wife will have superannuation worth only $9,425. Each will have a similar liability for legal expenses unless an order for costs is made.

87 Section 72(1) of the Act provides as follows:

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(1)

A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:

(a)	by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)	by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c)	for any other adequate reason;

having regard to any relevant matter referred to in subsection 75(2).

88 The test is twofold. First, can the wife support herself “adequately” without

maintenance from the husband? Secondly, if she is not able to do so, to what extent is the husband “reasonably” able to meet the shortfall between her reasonable needs and the financial resources available to her?

89 Section 74(1) of the Act provides:

(1) In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part.

90 Section 75(3) importantly provides [emphasis added]:

(3) In exercising its jurisdiction under section 74, a court shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.

91 I will discuss first the wife’s capacity to support herself. Given the way the

parties arranged their affairs during the marriage, and given the high income of the husband, I do not consider it reasonable for the wife to be expected to liquidate her interest in the former matrimonial home to provide funds to maintain herself. The wife and children have lived in the home for a number of years. It provides security and stability for both the wife and the children. In the event that she was required to liquidate her interest the wife would still need to meet outgoings on a cheaper property (assuming a suitable property was available) or alternatively in paying rent.

92 The wife has responsibility for two young children. The husband acknowledges

that the boys have sporting activities on most days of the week and on the weekend. He wishes them to continue to have involvement in these activities and wishes the wife to be available to transport them. I do not consider it reasonable to expect at present that the wife will work longer hours than she presently does. This is especially so in circumstances where one of the children is experiencing emotional difficulties associated with the breakdown of his parents’ relationship.

93 The wife has been lucky enough to secure part-time employment which involves

her working between four to five hours a day on four days each week. Her income

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from this employment is $19 per hour. Accordingly if she works 20 hours a week she has an income of $380 per week on which she would pay only a modest amount of tax. Senior counsel for the husband estimated that this would be $34 per week which I accept is about right.

94 In addition the wife will have available to her child support payments of $18,674 per annum. Accordingly, her combined income from employment and child support will be in the region of $38,500 per annum on which she will have to pay only a modest amount of tax. (I am obliged to ignore her entitlement to social security because of the provisions of s 75(3).)

95 The Child Support (Assessment) Act 1989 (Cth) now contains a means of estimating the costs of children depending upon the combined income of the parents (see s 55H). Reference to Schedule 1 of the Child Support (Assessment) Act and the corresponding tables published by the Child Support Agency indicates that where the combined child support income amount of the parents exceeds $141,063, which is the case here, the cost of maintaining two children under the age of 12 years is $26,802 per annum. Most of this expense is met by the wife as she has the children most of the time.

96 The wife tendered a schedule of her average weekly expenses for herself and the

children. This suggests that her total outgoings are $569 per week (or $29,588 per
annum). However, there is no allowance in this for:

•  mortgage payments (currently $261 per week);

•  car payments ($108 per week);

•  private health insurance (which the husband has agreed to pay);

•  house and contents insurance ($16 per week – husband’s estimate);

•  motor vehicle insurance (save for what seems to me to be a nominal amount of $3 per week);

•  motor vehicle registration ($15 per week - wife’s estimate)

•  rates and taxes ($42 per week – wife’s estimate).

97 Some of the wife’s claimed level of expenditure for herself and the children is

very modest. For example, she includes food and household supplies at only $165 per week and clothing and shoes at only $20 per week. There is no allowance for house repairs, vehicle maintenance, medical, dental and optical, holidays, books or magazines. On the other hand, some of the claimed expenses seem ample, for example, $78 per week for gas and electricity, $50 per week for telephone and $100 per week for petrol.

98 In total, the wife’s claimed level of expenditure (after the husband ceases paying

various payments) will be in the region of $52,572. However, as I have pointed out, some of these claims are very modest and some of reasonable commitments have not been accounted for at all.

99 Senior counsel for the husband noted that the wife had given no evidence about

the likely level of payment she would be required to meet on the mortgage on the

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former matrimonial home after the debt was refinanced (as had been proposed by both parties). I accept that there is a possibility that the wife could renegotiate the terms of the mortgage so as to reduce the payments currently being made. I am not satisfied that this would lead to a very significant reduction in the current level of payment required. I should also be alert to the possibility (some might say likelihood) of increases in interest rates as the economy recovers.

100 On the other hand, I accept there is a prospect the wife might be able to

renegotiate the loan facility on her motor vehicle at the same time as renegotiating the house mortgage. This could result in a significant reduction in payments; however, I need to take account of the fact that vehicles do not last forever and the wife will in due course need to replace the vehicle. I also need to take account of the fact that the wife has legal costs which she is going to have to meet in full or part (depending on any costs orders made). She may have to borrow to meet these and that would need to be factored into the equation.

101 Whilst it is impossible to be precise in relation to such matters, I am satisfied that the wife has established a need for spousal maintenance at the rate of at least $300 per week. If this was paid, her total disposable income would be in the region of $52,000 per annum. Taking the tables published by the Child Support Agency as a guide, this would mean that the wife would have about $25,000 per annum available to support herself – or $480 per week. (I acknowledge that in making this calculation I have not made allowance for the proportion of the costs of the children that is met by the husband during the short periods he has with them.)

102 The husband’s income is significantly greater than that of the wife. Following

the review of his pay, which took effect from January 2009, the husband has a “cash” income of $132,197 together with a “project allowance” of $26,439, giving an annual income of $158,636. In addition, the husband will have superannuation payments made on his behalf amounting to $15,864 per annum.

103 The husband gave oral evidence that he would be required to sit an examination

during this year which he would be required to pass if he is to continue to hold his position as a supervisor. The husband claimed that this was a requirement arising out of a performance review conducted last year, but the wife was not given a copy of the review.

104 The husband acknowledged that he had been informed that in the event he lost

his position as supervisor, he would be able to apply for another position at the mine, although this would be dependent upon a suitable position being available. He claimed that during the downturn there had been a reduction in the number of employees at the mine.

105 The husband’s assertions concerning the insecurity associated with his current

employment are too flimsy a foundation on which to proceed in assessing his obligation to pay spousal maintenance. I consider the only appropriate course is to assume that he will remain in his current position and continue to earn at least what he is currently earning. In the event there is any deterioration in the husband’s position it would be open to him to seek to vary the terms of any spousal maintenance order.

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106 The husband claimed that his income taxation amounted to $998 per week.

Under cross-examination he acknowledged that this paid no regard to the “negative gearing” associated with his rental properties, nor any other legitimate deductions. In previous years the husband has been able to obtain an income taxation refund of several thousand dollars following lodgement of his taxation return.

107 I accept the submission of senior counsel for the husband that the negative

gearing deductions will no longer be available in the event the husband proceeds with his stated intention of selling his interest in his investment properties. Furthermore, I accept the submission that the husband does not receive the benefit of any taxation refund until the end of the financial year when he lodges his taxation return. Whilst funds would then be available to allow the husband to meet commitments, his capacity in the meantime to meet periodic commitments is dependent upon the amount that he has in his pay packet. (This proposition, of course, is predicated on an assumption that the husband has no other funds from which he could draw to meet periodic obligations.)

108 The husband is presently residing with his mother on the five days when he is in

Perth each fortnight. His mother lives in a two bedroom unit and the husband has the children staying with him on two nights each time he comes to Perth. He says he intends, when he disposes of his interest in the investment properties, to obtain accommodation of his own so that he can have the children staying with him in his own premises.

109 I consider it is appropriate, given the husband’s high income, to proceed on the

assumption that the husband will, in fact, obtain more suitable accommodation than that which he currently has available. If he acquires a property, he will have to meet mortgage commitments and if he does not acquire a property he will need to meet rent. Although senior counsel for the husband was critical of the wife for not providing evidence concerning the level of expenditure she would incur in the event that she refinanced her mortgage, no evidence was provided by the husband concerning the likely level of expenditure by him on mortgage payments or rental.

110 Counsel for the wife noted in his closing address that the husband’s obligation to

meet the mortgages on the investment properties would “go” upon sale but conceded that he would incur a similar level of commitment on a new home in which to live. He also conceded that the husband’s outgoings on such a property would be about $30 per week (presumably basing this on the husband’s estimate of the rates and taxes he had been paying on the former matrimonial home). The husband’s payments on his share of the mortgages on the investment properties is $410 per week, which I accept would be an amount the husband would have to pay in order to obtain suitable accommodation for himself and the children when they are with him.

111 The husband claims that he is paying $250 every week for the hire of a motor

vehicle. He says it is cheaper for him to hire a car rather than to incur the costs of acquiring his own vehicle, particularly in circumstances where he would have to pay $100 per week for parking if he drives to the airport for each of his rotations. It may of course be cheaper for the husband to live closer to the airport and catch a taxi, but I recognise there are many costs associated with owning a vehicle and that the husband does need a vehicle when he is in Perth.

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112 The husband failed to produce any documents concerning the level of

expenditure associated with his car rental and although he believed that the rental commitment would show on his Visa card statements, these could not be produced when called for during the trial. The husband’s claimed expenditure on hire cars amounts to $13,000 per annum. Given that the husband would be home for not more than 130 days a year (26 periods of five days) I have difficulty in accepting that this would be the actual level of expenditure incurred. I suspect the husband’s estimate of $250 per week for car hire relates to the week in which he has to hire a car, but he does that only every second week.

113 The husband also claimed expenditure of $400 per week for “hobbies and

entertainment”. He accepted that for the nine days a fortnight when he is at the mine he only spends “a little bit” on hobbies and entertainment. The husband properly acknowledged that a significant proportion of the claimed expenditure was money which he had lost on gambling. Clearly this is not an expenditure the Court should take into account in determining the husband’s capacity to maintain the wife.

114 The husband also spends $70 per week on private health insurance. The wife

did not submit that this was an inappropriate expenditure but she sought an assurance from the husband that he would continue to meet the premiums. The husband said that this was his intention. I intend to proceed on the basis that the husband will, in fact, be meeting this level of expenditure for the benefit of the children.

115 The husband claimed to be expending $40 per week for telephone calls for the

benefit of the children. This was the cost of the phone calls the husband makes to keep in touch with the boys when he is working away. The husband said he would speak to the children at least once a week, but he properly conceded that in fact his expenditure would not amount to $40 per week.

116 The husband also claimed expenditure of $50 per week on education. It

transpired that this was the amount the husband is contributing to a scholarship fund for the children. The husband’s intention is that he will close down this fund and will give the wife the proceeds to allow her to cover education costs for the children. There was no indication as to the amount, if any, that would be available to the wife for this purpose. I accept, however, that the husband will terminate the fund and will not have this level of expenditure in the future.

117 The husband also claimed that he was expending $200 per week on food, of

which $150 was for him and $50 was for the children. Given that the husband has full board provided on nine days out of 14, he properly conceded that this claimed level of expenditure should be reduced, especially in light of the wife’s evidence that she is only able to spend $160 per week on food for herself and the children, notwithstanding that the children live with her for all but two days in the fortnight.

118 In summary, the husband has an income of $3,050 per week (excluding the rent

from the investment properties). His tax is presently $998 per week (without allowing for any deductions). He has to pay $70 per week in private health premiums. Once these proceedings have been resolved, he will have to pay child support of $358 per week. This will leave him with a disposable income of $1,624 per week or $84,448

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per annum. This is to be contrasted with the wife’s income of in the region of $38,500
per annum (less some tax).

119 If the husband were to pay spousal maintenance of $300 per week his disposable

income would still be in the region of $68,884 per annum and the wife’s disposable income would be in the region of $52,000 per annum. The husband has himself to support and the children on two days a fortnight. The wife has herself to support and the children for 12 days in the fortnight on an income about $17,000 less than what the husband will have. On the other hand the wife will have the benefit of having assets at her disposal of significantly greater value than the assets the husband has. She will have none of the expenses associated with setting up a new home, which the husband will have if he decides to live in his own accommodation.

120 In coming to my decision, I should have regard to the fact that the significant

disparity in the parties’ earning capacities has already been allowed for in the division of the parties’ property. The wife has received significantly more of the property than has the husband. It is appropriate that the husband be given the opportunity to begin rebuilding his asset base. In the exercise of the wide discretion available to me, I consider the husband should pay spousal maintenance of $275 per week.

121 I consider, as was conceded by counsel for the wife, that the husband’s

obligation to pay spousal maintenance should not be open-ended. It does need to be stressed again that the disparity in the income of the parties has been reflected in the disproportionate share of the assets received by the wife. In the event that the wife was to receive spousal maintenance for a fixed period of three years, this would mean that the youngest child would be 9 years of age by the time the maintenance payments ended (and the oldest child would then be 13). Whilst I recognise that it would still be very difficult for the wife to have full time employment, she will be somewhat better placed to do so than she is at present. I consider three years to be the appropriate duration of the payments for spousal maintenance.

Orders
122	Although the parties agreed that the husband would “forthwith” transfer his interest in the former matrimonial home to the wife and that the wife would simultaneously discharge the mortgage it appears to me that this is unrealistic. The wife will clearly require time in which to make arrangements to obtain funds to discharge the mortgage and I propose to give her 90 days in which to do so.

123 The orders I intend to make are as follows:

1. Upon discharge of the mortgage referred to in paragraph 3 of these orders, the husband shall forthwith transfer to the wife all of his right, title and interest in the property at [the address of the matrimonial home] in the State of Western Australia, more particularly described as Lot xxx on Plan xxxx and being the land comprised in Certificate of Title Volume xxxx Folio xx (“the property);

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2. The husband shall forthwith transfer and assign to the wife all of his right, title, estate and interest (if any) in the following:

a.	the wife’s superannuation entitlements with REST;
b.	the 1996 [4WD] registered in the wife’s name;
c.	the furniture in the wife’s possession (save for items the parties agreed at trial the husband will receive);
d.	all bank accounts in the wife’s name or control; and
e.	the wife’s jewellery and personal property.

3. Within 90 days the wife shall discharge the mortgage to Australia & New Zealand Banking Group Ltd No. XXXXX

4. The wife shall forthwith transfer and assign to the husband all of her right, title and interest (if any) in the following:

a.	the property at [the address of the investment property], more particularly described as Lot xxx on Plan xxxx and being the land comprised in Certificate of Title Volume xxx Folio xxxx;
b.	the property at [the other investment property], more particularly described as Lot xxx on Plan xxxx and being the land comprised in Certificate of Title Volume xxx Folio xxx;
c.	the husband’s superannuation entitlements;
d.	the aluminium boat;
e.	all bank accounts in the husband’s name or control;
f.	the husband’s personal property; and
g.	the items from the property the parties agreed at trial the husband will receive.

5. The wife shall forthwith cause any caveat or charge she has registered over the [investment] properties to be withdrawn.

6. Pending the discharge of the mortgage on the property the husband shall continue to pay as and when they fall due all payments that he was making at the date of trial including the mortgage payment, the car payment and the house and contents insurance.

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7. By way of spousal maintenance the husband pay to the wife the sum of $275 per week for a period of 3 years commencing on the first Friday following the discharge of the mortgage.

8. Upon discharge of the mortgage the wife shall indemnify the husband and keep him indemnified against any liability in relation to the loan for the [4WD] motor vehicle.

9. The application and response be otherwise dismissed.

I certify that the preceding [123] paragraphs are a true copy of the reasons for

judgment delivered by this Honourable Court

Associate