FALCONER & BABETT
[2013] FCCA 1845
•13 November 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FALCONER & BABETT | [2013] FCCA 1845 |
| Catchwords: FAMILY LAW – Property – application for property settlement – relationship of 12 years – contributions – assessment of contributions – loan from applicant’s mother regarded as contribution on behalf of the applicant – post separation contribution to the welfare of the parties’ children – whether adjustment under Family Law Act 1975 (Cth) s.75(2) warranted. COSTS – Party seeking an order for costs to file and serve an affidavit within 28 days. |
| Legislation: Child Support (Assessment) Act 1989 (Cth) ss.3, 4, 12, 116, 117 Family Law Act 1975 (Cth) ss.79, 90MT |
| Cases cited: Gosper & Gosper (1987) 90 FLR 1; 11 Fam LR 601; FLC 91-818 Hickey & Hickey [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143 Kessey & Kessey (1994) 18 Fam LR 149; FLC 92-495 Pellegrino & Pellegrino (1997) 22 Fam LR 474; FLC 92-789 Stanford v Stanford [2012] HCA 52; (2012) 47 Fam LR 481; FLC 93-518 Williams v Williams [1985] HCA 52; (1985) 61 ALR 215; 10 Fam LR 355; FLC 91-628 |
| Applicant: | MS FALCONER |
| Respondent: | MR BABETT |
| File Number: | SYC 6278 of 2011 |
| Judgment of: | Judge Scarlett |
| Hearing dates: | 15 &16 May 2013 |
| Date of Last Submission: | 16 May 2013 |
| Delivered at: | Sydney |
| Delivered on: | 13 November 2013 |
REPRESENTATION
| Senior Counsel for the Applicant: | Mr Schonell SC |
| Solicitors for the Applicant: | Paul & Paul Lawyers |
| The Respondent: | Appeared in person |
ORDERS
PROPERTY ORDERS
Forthwith upon the making of these Orders the Applicant and the Respondent are to do all acts and things and sign all documents necessary to cause to be paid to the Applicant’s nominated bank account the funds standing to the credit of the parties in the trust account of (omitted).
Forthwith upon the making of these Orders the Applicant and the Respondent are to do all acts and things and sign all documents necessary to cause the funds standing to the credit of the parties in the Matthews Folbigg Controlled Monies Account to be paid to the Applicant’s nominated bank account or as she may otherwise direct in writing.
Within one (1) month of the making of these Orders the Applicant is to:
(a)Transfer and assign to the Respondent all of her right, title and interest in the company (omitted) Pty Ltd and provide all associated documents in her possession;
(b)Transfer and assign to the Respondent all of her right, title and interest in any loan account with (omitted) Pty Ltd;
(c)Resign from each and every office that she holds with (omitted) Pty Ltd; and
(d)Sign any document that may be provided to her by the Respondent that has the effect of transferring or assigning to the Respondent any right, position, power or interest in the The (omitted) Property Trust and the (omitted) Property Investment Trust and otherwise relinquishing any right, position or control that she holds in relation to such settlement.
That from the date of transfer in accordance with Order (3) above the Respondent must do all acts and things necessary to indemnify and keep indemnified the Applicant against all liabilities whether actual or contingent, suits, demands, causes of action or claims of whatsoever kind or nature that may be brought against the Applicant in relation to or arising in relation to:
(a)(omitted) Pty Ltd;
(b)The (omitted) Property Trust;
(c)The (omitted) Property Investment Trust;
(d)Any personal liability of the Respondent; and
(e)Any guarantee or guarantees into which the Applicant has entered or otherwise provided prior to 1 March 2010 whether as a director, shareholder or guarantor or otherwise of (omitted) Pty Ltd, the (omitted) Property Trust or the (omitted) Property Investment Trust.
In accordance with section 90MT(1)(b) of the Family Law Act 1975, the Applicant is to be paid 70% of the value of the Respondent’s interest in the (omitted) Fund – superannuation fund and the Respondent and (omitted) Fund as trustee of the (omitted) Fund –superannuation fund are to do all acts and things and sign all documents and give all consents to give effect to these and there shall be a corresponding reduction in the entitlement of the Respondent in the (omitted) Fund –superannuation fund had these Orders not been made.
The trustee of the (omitted) Fund –superannuation fund is to do all acts and things and sign all documents as may be necessary to:
(a)calculate in accordance with the requirements of the Family Law Act 1975 the entitlement awarded to the Applicant in the immediately preceding Order; and
(b)pay the entitlement whenever the Trustee makes a splittable payment from the Respondent’s interest in the (omitted) Fund –superannuation fund.
The preceding two Orders shall have effect from the operative time and the operative time is the fourth (4th) business day after which a copy of these orders is served upon the trustee of the (omitted) Fund –superannuation fund.
After service of the payment split notice in accordance with the Superannuation Industry (Supervision)Regulations 1994 the trustee of the (omitted) Fund –superannuation fund is to do all acts and things and sign all documents necessary including but not limited to exercising the Applicant’s request in accordance with the Superannuation Industry (Supervision) Regulations for the rollover or transfer of the Applicant’s interest into a complying superannuation fund of the Applicant’s choosing in accordance with the Superannuation Industry (Supervision) Regulations.
The trustee having been accorded procedural fairness in relation to the making of these Orders, these Orders bind the trustee of the (omitted) Fund – superannuation fund.
Subject to the Respondent complying with the terms of these Orders, as against the Applicant he is and will be the sole owner of the and the Applicant has no interest in:-
(a)All bank accounts in his name;
(b)His personal effects;
(c)His household contents;
(d)His superannuation entitlements;
(e)All real and personal property of whatsoever nature and kind in his possession or name at the date of these Orders; and
(f)All real and personal property of whatsoever nature and kind which may come into his possession after the date of these Orders.
Subject to the Applicant complying with the terms of these Orders, as against the Respondent she is and will be the sole owner of and the Respondent has no interest in:
(a)All bank accounts in her name;
(b)Her personal effects including any furniture and effects removed from the former matrimonial home by her;
(c)Her superannuation entitlements;
(d)All real and personal property of whatsoever nature and kind in her possession or name at the date of these Orders; and
(e)All real and personal property of whatsoever nature and kind which may come into her possession or name after the date of these Orders.
Except as specifically provided for by these Orders to the contrary, the Applicant and the Respondent hereby indemnify each other from and in respect of all actions, claims, suits and demands as may be made against them in relation to all liabilities in the name of each other.
CHILD SUPPORT DEPARTURE ORDERS
In accordance with Section 117 of the Child Support (Assessment) Act 1989 there is to be a departure from the Administrative Assessment of Child Support dated 14 July 2011 by providing that the amount payable by the Respondent from 14 October 2011 is the sum of $400.00 per week per child in the total amount of $3,466.67 per month, such payment to be made on the first day of each month and to be paid by way of monthly instalments to the Applicant’s nominated bank and the final payment to be made on the happening of a terminating event as defined by Section 12 of the Child Support (Assessment) Act 1989 or such child completes his secondary education whichever is the latter.
For the purpose of the implementation of the preceding Order the Respondent must pay all arrears of child support to date to the Applicant’s nominated bank account within one (1) month of the date of these Orders and in the event the Respondent does not pay the arrears by the said date the Applicant is to have leave to file and serve an Application in a Case seeking enforcement of this Order. In addition to the periodic amount payable by the Respondent in the preceding Order the Respondent is to pay the following expenses for the children X born (omitted) 1998 and Y born (omitted) 2001:
(a)All instalments at the present scale to the Medibank Private Health Fund including cover for private hospital, optical, physiotherapy, dental and orthodontic expenses in respect of the children and in addition to pay any medical, dental, hospital or orthodontic expenses incurred in respect of either of the children not recoverable from Medicare or Medibank Private Health Fund; and
(b)All tuition fees in respect of the attendance by each of the children X born (omitted) 1998 and Y born (omitted) 2001 at (omitted) College or such other school as the Applicant and the Respondent may agree from time to time including all school excursion fees and levies shown on school accounts and other mandatory expenses associated with the children’s attendance at (omitted) College.
Within one (1) month of the date of these Orders the Respondent is to pay to (omitted) College all arrears of tuition fees presently outstanding.
In the event that the Applicant meets at first instance any of the medical or other expenses or school expenses or arrears referred to in the preceding Orders the Respondent must reimburse the Applicant within seven (7) days of presentation of an invoice and proof of payment such reimbursement to be made by payment to the Applicant’s nominated bank account.
In the event that the Respondent resigns or is made redundant or otherwise ceases to be employed at his current place of employment namely (omitted) any funds that the Respondent is to receive from (omitted) whether by way of payout for long service leave, leave entitlements or redundancy payment must be paid to the Child Support Agency on behalf of the Applicant and used to meet any arrears due to the Applicant in respect of child support.
The Applicant is entitled to serve a copy of these Orders on the Respondent’s employer.
The interim Order made by consent on 16 May 2013 is discharged.
If either the Applicant or the Respondent wishes to apply for costs that party must within twenty-eight (28) days file and serve an affidavit setting out the amount of costs sought and the basis upon which those costs are calculated.
IT IS NOTED that publication of this judgment under the pseudonym Falconer & Babett is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 6278 of 2011
| MS FALCONER |
Applicant
And
| MR BABETT |
Respondent
REASONS FOR JUDGMENT
Application
This is an Application by the Wife for orders for the settlement of property interests between the Husband and herself. She also seeks a departure from the administrative assessment of child support. By his Further Amended Response filed on 5th February 2013, the Husband also seeks property orders and a child support departure order.
Background
The parties met in 1992 and commenced to live together early in 1998.
In June 1999 the parties purchased a property in Property B for $505,000.00. The Wife’s mother lent them the sum of $100,000.00 and the balance of purchase price was secured by a mortgage.
The parties’ first child, X, was born on (omitted) 1998. Their second child, Y, was born on (omitted) 2001.
The parties were married on (omitted) 2001.
In February 2002 they purchased a property at Property E for $320,000.00 and commenced to live in it the following year.
The parties sold the property at Property B in August 2004 for $970,000.00, making a profit of $465,000.00.
In March 2005 the parties sold the property at Property E for $535,000.00, making a profit of $215,000.00. They later purchased a property at Property H for $1,145,000.00, using the proceeds of sale of the properties at Property E and Property B and borrowing an amount of $700,000.00, which was secured by a mortgage over the property.
The parties established the (omitted) Property Trust in 2007. The Trust purchased three properties in Queensland, borrowing all of the funds. The properties were leased.
The parties separated under the one roof early in March 2010.
The Wife applied for a Child Support Assessment on 9th March 2010. She sought a revised Child Support Assessment after the final separation.
The Husband vacated the former matrimonial home at Property H on 8th May 2011. The home was sold that same month. The net proceeds amounted to $145,000.00 and were deposited into the Wife’s personal bank account.
On 14th October 2011 the Wife filed an Application seeking property orders and a departure from the administrative assessment of child support. The Application was returnable on 30th January 2012.
The Husband filed a Response on 23rd March 2012, in which he not only sought orders relating to property and child support but parenting orders in respect of the two children.
On 27th March 2012 the parties were directed to attend a Conciliation Conference before a Registrar. The Conciliation Conference took place on 7th May 2012. No agreement was reached at the Conference.
The parties sold all of the real property owned by the (omitted) Property Trust, leaving the trust with losses of $135,000.00.
On 21st May 2012 the parties were directed to attend a Child Dispute Conference with a Family Consultant.
On 9th July 2012 the Wife filed an Amended Application in which she sought orders that:
a)The parties should have equal shared parental responsibility for the children;
b)The children should live with the Mother; and
c)The children should spend time with the Father.
The parties were divorced by an Order of this Court made on 9th July 2012. The divorce Order became final on 10th August 2012.
The Husband filed an Amended Response on 31st August 2012.
On 7th March 2013 the parties entered into final Consent Orders providing:
1. That the Husband’s application for parenting orders is hereby dismissed.
2. The issue of costs to be reserved for the final hearing.
The proceedings were heard on 15th and 16th May 2013. On 16th May, the Court made the following interim Order by consent:
That pursuant to Section 117 of the Child Support (Assessment) Act 1989 there be a departure from the Administrative Assessment of Child Support dated 14 July 2011 by providing that the amount payable by the Respondent within seven (7) days from the date of this Order and thereafter on the first day of each month is the sum of $2,600.00 per month as to $1,300.00 for the child X born (omitted) 1998 and $1,300.00 for the child Y born (omitted) 2001 such amount to be paid by way of monthly instalments to the Applicant’s nominated bank account and the final payment to be made on the happening of a terminating event or until such time as each child completes his or her secondary education whichever is the latter.
Evidence
The Wife relied on the following documents:
a)her affidavit of 8th April 2013;
b)her affidavit of 30th April 2013;
c)her financial statement of 19th April 2013;
d)the affidavit of her mother, Ms D, sworn 9th April 2013;
e)the affidavit of her sister, Ms E, sworn 24th April 2013; and
f)the affidavit of Mr K sworn 3rd May 2013.
Ms D, Ms E and Mr K were not required for cross-examination.
The evidence of Ms D is that she lives on the (omitted) of New South Wales but travels to the Wife’s home on the (omitted) and stays with her for three nights each week. She deposed that she cares for the children while the Wife is at work.
Ms D also stated in her affidavit that she has assisted her daughter financially and annexed a schedule setting out details of the financial assistance provided to March 2013, which amounted to $25,121.00. She stated that her daughter had reimbursed her to the extent of $25,000.00, leaving only $121.00 owing at the date of her affidavit.
Ms E is the Wife’s sister. She deposed in her affidavit that she received from her sister an amount of $10,000.00, which she agreed to hold in her bank account in case her sister needed to use the money for legal fees. She annexed to her affidavit a schedule showing that she had expended or advanced sums of money to her sister for various purposes, including legal expenses, totalling $10,320.00. The sum of $10,000.00 was repaid to her in May 2011, leaving a balance of $320.00 outstanding.
The Schedule then shows that Ms E advanced further amounts to her sister for legal expenses, bringing the total owing to $25,137.00.
Ms E deposed that on 11th March 2013 her sister repaid to her the sum of $35,000.00, which left a small surplus of funds that she intended to reimburse to her.[1]
[1] Affidavit of Ms E 24.4.2013 at paragraph [5]
Mr K deposed in his affidavit of 3rd May 2013 that he is an Accountant instructed by the Wife’s solicitors to prepare a report and provide an opinion with respect to the operation of the tax losses held in the (omitted) Property Trust. He was also asked to provide an opinion as to:
a)The benefit to one or either of the parties were they to retain the benefit of the Trust as opposed to winding up the Trust; and
b)The benefit the Husband had derived in minimising his tax position through the operation of the Trust in the financial years ending 30th June 2010 and 30th June 2011.[2]
[2] Affidavit of Mr K 3.5.2013 Annexure “A”
Mr K’s opinion forms Annexure “B” to his affidavit. He summarised his findings by stating:
In summary, based on the information provided the Trusts have a potential maximum value of $31,524 and minimum potential value of $14,594. These figures are of course dependent upon the trust engaging in activity that will give rise to a capital gain at some time in the future. This future gain would need to satisfy the ATO tax rules of same business or ownership test at any relevant time.[3]
[3] Ibid annexure “B”
The Wife gave oral evidence and was cross-examined by the Husband, who was not represented by a lawyer.
The Husband relied on the following documents:
a)His affidavit sworn 30th April 2013; and
b)His financial statement dated 27th April 2013 and filed on 30th April 2013.
He also advised that he wished to rely on the Wife’s affidavit filed on 14th October 2011, which is the original affidavit she filed in support of her originating Application.
The Husband gave oral evidence and was cross-examined by Senior Counsel for the Wife, Mr S.
Orders Sought
The orders sought by the wife are set out in a Minute of Orders handed up on the first day of the hearing by Mr Schonell SC. The Wife seeks the following orders:
A. Definitions
A1 “Mr Babett” means the Respondent/father
A2 “Ms Falconer” means the Applicant wife/mother.
A3“the children” means X born (omitted) 1998 and Y born (omitted) 2001.
A4 “The Act” means the Family Law Act 1975
A5“The CSA Act” means the Child Support (Assessment) Act 1989
A6“The Court” means the Family Court of Australia (sic)[4]
[4] Presumably a clerical error – the proceedings are being held in the Federal Circuit Court
A7 “the Company” means (omitted) Pty Ltd;
A8“terminating event” means the first time of any of the following to occur:
1 the happening of a child support terminating event as defined by Section 12 of the Act (sic)[5] in relation to the children, except that in the event that either child turns 18 years of age during Year 12 of his secondary education then on 31 December of that year.
[5] This appears to be a clerical error as it should refer to s. 12 of the Child Support (Assessment) Act 1989 (Cth)
2 a child obtaining paid full-time employment.
B. Recitals
B1The husband and the wife are each directors and shareholders of (omitted) Pty Ltd (“the company”) which is the Trustee company for:
1.1 The (omitted) Property Trust; and
1.2 The (omitted) Property Investment Trust
(“the trusts”)
B2The company was the registered owner as Trustee for the (omitted) Property Trust of a property at Property M in the State of Queensland (“the Property M property”). Property M property was sold and proceeds of sale in the sum of $37,693 are held in Trust with (omitted) Conveyancing. Prior to the sale of the Property M property all rental income from the property was paid into an account with (omitted) Real Estate at (omitted) and those rental funds in the sum of $9,445.59 have been transferred to a controlled monies account with MatthewsFolbigg Lawyers.
B3Part of the husband’s 2012 income tax refund is also held in the MatthewsFolbigg Trust Account in the amount of $18,642.56.
THE ORDERS
PROPERTY SETTLEMENT ORDERS
1) That forthwith upon the making of these orders the parties do all acts and things and sign all documents necessary to cause to be paid to the wife’s nominated bank account the funds standing to the credit of the trust account of (omitted) Conveyancing.
2) That forthwith upon the making of these orders the parties do all acts and things and sign all documents necessary to cause the funds standing to the credit of the MatthewsFolbigg Controlled Monies to be paid to the wife’s nominated bank account or as she may direct in writing.
3) That forthwith upon the making of these orders the wife shall:
a. Transfer and assign to the husband all of her right, title and interest to the company and provide all associated documents in her possession;
b. Transfer and assign to the husband all of her right, title and interest in any loan account with the Company;
c. Resign from each and every office that she holds with the Company;
d. Sign any document that may be provided to her by the husband that has the effect of transferring or assigning to the husband any right, position, power or interest in the (omitted) Property Trust and the (omitted) Property Investment Trust and otherwise relinquishing any right, position or control that she holds in relation to such settlement.
4)That from the date of transfer pursuant to the preceding Order the husband shall do all acts and things necessary to forthwith indemnify and keep indemnified the wife against all liabilities (actual or contingent), suits, demands, causes of action or claims of whatsoever kind or nature which may be brought against the wife in relation to or arising in relation to:
a.The Company;
b.The (omitted) Property Trust;
c.The (omitted) Property Investment Trust;
d.Any personal liability of the husband’s including without limiting the generality hereof; and
e.Any guarantee or guarantees that the wife has entered into or otherwise provided prior to 1 March 2010 whether as a director, shareholder or guarantor or otherwise of the Company, the (omitted) Property Trust and/or the (omitted) Property Investment Trust.
SUPERANNUATION SPLIT
5) That in accordance with Section 90MT(1)(b) of the Family Law Act, the wife be paid 60% of the value of the husband’s interest in the (omitted) Fund – (‘the Superannuation Fund’) and the husband and (omitted) Fund as trustee of the Superannuation Fund (‘the Trustee’) shall do all things and sign all documents and give all consents to give effect to these and there shall be a corresponding reduction in the entitlement of the husband in the Superannuation Fund had these orders not been made.
6) The trustee of the Superannuation Fund shall do all acts and things and sign all documents as may be necessary to:
a.calculate in accordance with the requirements of the Family Law Act the entitlement awarded to the wife in the immediately preceding Order; and
b.pay the entitlement whenever the Trustee makes a splittable payment from the husband’s interest in the Superannuation Fund.
7) The preceding two orders shall have effect from the operative time and the operative time is the fourth business day after which a copy of these Orders is served upon the trustee of the Superannuation fund.
8) After service of the payment split notice in accordance with the Superannuation Industry (Supervision) Regulations 1994 (“the SIS regulations”) the trustee of the Superannuation Fund shall do all acts and things and sign all documents necessary including but not limited to exercising the wife’s request in accordance with the SIS regulations for the rollover or transfer of the wife’s interest into a complying superannuation fund of the wife’s choosing in accordance with the SIS regulations.
9) That having been accorded procedural fairness in relation to the making of these Orders, these Orders bind the Trustee of the Superannuation Fund.
GENERAL ORDERS
10)Subject to the husband complying with the terms of this agreement[6], as against the wife, he is and will be the sole owner of and the wife has no interest in:-
[6] sic
a. his Bank accounts;
b. his personal effects;
c. his superannuation entitlements;
d. all real and personal property of whatsoever nature and kind in his possession or name at the date of the making of this agreement; and
e. all real and personal property of whatsoever nature and kind which may come into his possession or name after the date of this agreement.
11)Subject to the wife complying with the terms of this agreement[7], as against the husband, she is and will be the sole owner of and the husband has no interest in:
a. her Bank accounts;
b. her personal effects including any furniture and effects removed from the home by her in accordance with this agreement;
c. her superannuation entitlements;
d. all real and personal property of whatsoever nature and kind in her possession or name at the date of the making of this agreement; and
e. all real and personal property or whatsoever nature and kind which may come into her possession or name after the date of this agreement.
12)Except as specifically provided for by this Agreement to the contrary, the parties hereby indemnify each other from and in respect of all actions, claims, suits and demands as may be made against them in relation to all liabilities in the name of each other.
[7] sic
CHILD SUPPORT DEPARTURE
13)That pursuant to Section 117 of the Child Support (Assessment) Act 1989 there be a departure from the Administrative Assessment of Child Support dated 14 July 2011 by providing that the amount payable by the Respondent from 1 March 2011 is the sum of $400 per week per child (total amount $3,466.70 per month), such payment to be made on the first day of each calendar month and to be paid by way of monthly instalments to the wife’s nominated bank and the final payment to be made on the happening of a terminating event or until such time as the child completes their secondary education, whichever is the latter.
14)That for the purpose of the implementation of the preceding order that all arrears for child support for the period 1 March 2011 to date (which as at 15 May 2013 stands at $36,841.12) (“the arrears”) be paid by the husband to the wife’s nominated bank account within 30 days of the date of these orders (“the due date”) and in the event the husband does not pay the arrears by the due date the wife have leave to relist the matter on 48 hours notice. In addition to the periodic amount referred to in the preceding paragraph the Respondent to meet the following expenses of the children:
a. All instalments at the present scale to the Medibank Private Health Fund including cover for private hospital, optical, physiotherapy, dental and orthodontic expenses in respect of the children and in addition thereto pay any medical expenses and other such expenses incurred in respect of the children not able to be recovered from the Fund and/or Medicare.
b. All tuition fees in respect of the attendance by each of the children at (omitted) College or such other school as the parties agree upon from time to time together with all school excursion fees and levies shown on school account all and other mandatory expenses associated with the children’s attendance at (omitted) College.
15)Within 7 days of the date of these Orders the husband shall pay to (omitted) College all tuition fees presently outstanding which include all tuition fees for the 2013 school year for the children.
16)In the event the wife at first instance meets the expenses referred to in the preceding order the husband shall reimburse the wife the said cost within 7 days upon presentation of the invoice and proof of payment, such payment to be made to the wife’s nominated bank account.
17)That in the event the husband resigns and/or is made redundant and/or ceases to be employed at his current place of employment (omitted) that any funds the husband shall receive from (omitted) be it payout for long service leave, leave entitlements and/or redundancy payout shall be paid to the Child Support Agency and shall be applied to meet any arrears due to the wife in respect of the child support, and payment due to the wife pursuant to paragraph 12 hereof and any future child support payment.
18)That the wife be entitled to serve a copy of these Orders on (omitted).
19)The husband pay the wife’s costs of and incidental to this application on an indemnity basis.
The Husband filed a Further Amended Response on 5th February 2013 in which he set out the final orders that he seeks:
1.IT IS NOTED that the husband and the wife are each directors and shareholders of the (omitted) Pty Ltd (‘the company’) which is the Trustee company for
1.1 The (omitted) Property Trust and
1.2 The (omitted) Property Investment Trust
and the company was the registered owner as trustee for The (omitted) Property Trust of a property at Property M (‘the Property M property’). Property M property was sold and proceeds of sale in the sum of $37,693 are held in trust with (omitted) Conveyancing. Prior to the sale of the property all rental income from the property was paid into an account with (omitted) Real Estate at (omitted) and those rental funds in the sum of $9,445.59 have been transferred to a controlled monies account with Matthews Folbigg (‘the (omitted) Real Estate funds’).
2.IT IS NOTED that the tax returns for each party for the year ending June 2011 were received in July 2012 and:
2.1 The husband’s refund, after deduction of accounting fees, was $32,614.57. The Child Support Agency deducted arrears in the sum of $13,971.99 from the refund leaving a balance of $18,642.58. The sum of $18,642.58 is currently held in a controlled monies account with Matthews Folbigg (‘the husband’s 2011 tax refund’).
2.2 The wife’s refund, after deduction of accounting fees, is $1,973.75. The wife has had the benefit and use of those funds.
3.The parties shall within seven days do all acts and things necessary, both personally and in their capacity as directors of the company to cause:
3.1 the sale proceeds currently held in trust with (omitted) to be paid:
3.1.250% to the husband or as he may otherwise direct in writing
3.1.250% to the wife or as she may otherwise direct in writing
3.2 the (omitted) funds to be paid to the husband or as he may otherwise direct in writing.
4.The parties shall within seven days do all acts and things necessary to cause the husband’s 2011 tax refund monies to be distributed to the husband or as he may otherwise direct in writing.
5.Any monies remaining (in) the Matthews Folbigg controlled monies account after the distributions referred to in Order 3.2 and Order 4 shall be distributed to the husband.
6.The parties shall forthwith do all acts and things necessary, both personally and in their capacity as director of the company do all acts and things necessary (sic) to finalise and submit to the Australian Taxation Office the tax returns for the financial year ending 30 June 2012 for:
6.1 the company and
6.2 the (omitted) Property Trust and
6.3 the (omitted) Property Investment Trust
7. Upon compliance with Order 6 the wife shall:
7.1 Transfer and assign to the husband all of her right, title and interest (in) the company and provide all associated documents in her possession;
7.2 Transfer and assign to the husband all of her right, title and interest in any loan account with the company.
7.3 Resign from each and every office that she holds with the company.
7.4 Sign any document that may be provided to her by the husband that has the effect of transferring or assigning to the husband any right, position, power or interest in the (omitted) Property Trust and the (omitted) Property Investment Trust and otherwise relinquishing any right, position or control that she holds in relation to such settlement.
8.From the date (of) transfer pursuant to Order 7 the husband shall do all acts and things necessary to forthwith indemnify and keep indemnified the wife against all liabilities (actual or contingent), suits, demands, causes of action or claims of whatsoever kind or nature which may be brought against the wife in relation to or arising in relation to:
8.1 the company
8.2 the (omitted) Property Trust
8.3 the (omitted) Property Investment Trust
8.4 any personal liability of the husband’s including but not limiting the generality hereof
8.5 any guarantee or guarantees that the wife has entered into or otherwise provided prior to 1 March 2010 whether as a director, shareholder or guarantor or otherwise of the company, the (omitted) Property Trust and/or the (omitted) Property Investment Trust.
9.That pursuant to Section 90MT(1)(a) of the Family Law Act 1975 (‘the Act’) that Mr Babett, a member of the (omitted) Fund – (‘the Superannuation Fund’) and (omitted) Fund trustee of the Superannuation Fund (‘the Trustee’) do all acts and things, sign all documents and give all consents so that whenever a splittable payment becomes payable to Mr Babett, c/- Matthews Folbigg, Level 7, 10-14 Smith Street Parramatta member number (omitted) from his interest in the Superannuation Fund that Ms Falconer is entitled to an amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 using a base amount of $75,000 and there is a corresponding reduction in the entitlement of the said Mr Babett had these orders not been made.
10. That for the purpose of Order 9
10.1 the base amount to be allocated to Ms Falconer in the Superannuation fund is $75,000 and
10.2 The operative time for this order is four days from the date of these orders.
11.That the Trustees of the (omitted) Fund shall be bound by these orders.
12.Subject to the husband complying with the terms of these orders, as against the wife, he is and will be the sole owner of, and the wife has no interest in the property and financial resources including but not limited to:
12.1The company
12.2The (omitted) Property Trust
12.3the (omitted) Property Investment Trust
12.4His bank accounts
12.5His personal effects
12.6His superannuation entitlements
12.7All other personal property of whatsoever nature and kind in his possession or name at the date of making this agreement;[8]and
[8] sic
12.8All real and personal property of whatsoever nature and kind which may come into his possession or name after the date of this agreement.
13.Subject to the wife complying with the terms of this agreement[9], as against the husband, she is and will be the sole owner of and the husband has no interest in:
[9] sic
13.1The wife’s real estate
13.2Her Bank accounts and including the monies held by the wife from the sale of the former matrimonial home.
13.3Her personal effects including any furniture and effects removed from the home by her in accordance with this agreement;
13.4 Her superannuation entitlements
13.5All other personal property of whatsoever nature and kind in her possession at the date of the making of this agreement; and
13.6All real and personal property of whatsoever nature and kind which may come into her possession or name after the date of this agreement.
14.Except as specifically provided for by this agreement[10] to the contrary, the parties hereby indemnify each other from and in respect of all actions, claims, suits and demands as may be made against them in relation to all liabilities in the name of each other.
[10] sic
Child Support Departure
15.Pursuant to Section 117 of the Child Support (Assessment) Act 1989 there be a departure from the Administrative Assessment of child support payable by the husband in respect of the children X born (omitted) 1998 (‘X’) and Y born (omitted) 2001 (‘Y’) as follows:
15.1From 1 March 2011 to the date of these orders the total amount of child support be set equal to the monies already paid for that period including the value of any non-agency payments credited for the same period, with the effect that no arrears remain payable and no overpayment is created and
15.2from the date of these orders the husband shall pay or cause to be paid to Ms Falconer:
15.2.1 the sum of $1,300 per month for X and
15.2.2 the sum of $1,300 per month for Y
the first payment to be made 7 days following the making of these orders and thereafter by monthly instalments in advance and the final payment to be made on the happening of a child support terminating event in relation to either child as defined by Section 12 of the Child Support (Assessment) Act 1989 and in the event that either child is still completing full-time secondary education on their 18th birthday then until the end of the child’s secondary education.
16.Commencing on 31 December 2014 the annual rate of child support payable by the husband to the wife shall increase in accordance with the consumer price index for Sydney.
The proper approach to determination of a property application
The decision of the High Court in Stanford v Stanford[11] requires a court faced with an application for the determination of property matters under s.79 of the Family Law Act 1975 (Cth) to consider first of all the requirement in subsection 79(2) of the Act that:
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.
[11] [2012] HCA 52; (2012) 47 Fam LR 481; FLC 93-518
In my view, this decision requires the Court to consider whether it is just and equitable to make an order under s.79 at all, before embarking on the four step process set out by the Full Court of the Family Court in Hickey & Hickey.[12] The High Court held in Stanford that there are three fundamental propositions:
37.First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law principles, the existing legal and equitable interests of the parties in the property…
38.Second, although s.79 confers a broad power on a court exercising jurisdiction under the Act to make a property settlement order, it is not a power that is to be exercised according to an unguided judicial discretion … (but) “in accordance with legal principles which the Act itself lays down”.
[12] [2003] FamCA 395; (2003) 30 Fam LR 35; FLC 93-143
…
40.Third, whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s. 79(4).[13]
[13] Stanford v Stanford (supra) at [37]-[38] & [40] per French CJ, Hayne, Kiefel and Bell JJ
Having made a preliminary decision that it would be just and equitable to make an order under s.79, the Court should then undertake the four inter-related steps set out in Hickey[14]:
First, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of hearing. Second, the Court should identify and assess the contributions of the parties within the meaning of s 79(4)(a),(b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, the Court should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g) (the other factors)including…the matters referred to in s.75(2) so far as they are relevant…Fourth, the Court should…resolve what order is just and equitable in all the circumstances of the case.[15]
[14] Hickey & Hickey (supra) per Nicholson CJ, Ellis and O’Ryan JJ
[15] Hickey at [39]
It can be seen that the Court must consider whether it is just and equitable to make an order under s.79 before undertaking the process set out in Hickey and again as the fourth step in that process. This is not unnecessary repetition because different considerations are involved.
First, the Court must consider the general question whether it would be just and equitable to make a property order at all. As their Honours held in Stanford at [49]:
No basis was identified at first instance, on appeal to the Full Court, or in argument in this Court, for concluding that it was just and equitable to make any order dividing the parties’ property between them.[16]
[16] Stanford at [49] per French CJ, Hayne, Kiefel and Bell JJ
Second, once the Court has decided whether it would be just and equitable to make a property order, the Court must then consider the asset pool, the parties’ contributions and whether any adjustment should be made under s.75(2) of the Act. Having done so, the Court must then consider whether the terms of a particular order proposed to be made would be just and equitable. There may be reasons why a particular order would not be just or equitable, having regard to all the circumstances.
All of the above principles have been considered in making this decision.
The parties’ property and liabilities
Senior Counsel for the wife submitted a balance sheet on the final day of the hearing.
Non-superannuation asset pool
There were some issues between the parties as to the value of certain assets. The husband claimed in his Financial Statement filed on 30th April 2013 that he owned a (model omitted) Peugeot motor car which he valued at only $150.00. He also claimed that he owed an amount of $8,142.00 to (omitted) Finance for the car.
In cross-examination, the husband gave evidence that the car had been written off in an accident on 23rd February. The car was uninsured and, as the other driver was entirely at fault, he claimed against the other driver. The other driver’s insurance company paid to him the sum of approximately $9,200.00. The payment was made directly to the Husband’s finance company and the liability of $8,142.00 was paid out. The Husband received the balance, which he estimated at almost $1,000.00.
The way in which the Husband set out the details in his Financial Statement came under some criticism from Senior Counsel for the Wife in cross-examination:
When did you have a car accident? ---Late February.
Well, so you had the car accident after you swore – before you swore this financial statement? ---Yes.
So you had the car accident before you swore this financial statement. Have you received some insurance payout? ---Yes.
How much did you receive? ---Nine thousand two hundred and something.
How much? ---Nine thousand two hundred and something.
And do you still have the car? ---No.
So, - what did you do with the $9270?[17]---Well, they had to pay the finance and---
[17] sic
And did that pay out the finance? ---Yes.
So if it paid out the finance, why did you represent to the court on this document in April that you still owed (omitted) Finance eight thousand one hundred-odd dollars? ---Because it shows I don’t own a vehicle – I have finance on the vehicle. At the moment I’m borrowing a vehicle.
Sir, had you, as at 29 April when you swore this financial statement, paid out the liability to (omitted) Finance? ---Yes.
Then why did you show it as a liability that you still owed that money? ---It was a mistake. I should have just put zero for the car.
It wasn’t with an intent to mislead and deceive this court, was it, as to your true financial position? ---No not at all.
So---?---I put---
---that had I not asked you any questions about this financial statement, this court would have proceeded on the basis that you owed (omitted) Finance $8142 as at 29 April 2013; correct? ---That was not the ---sorry, what was the question?
Had I not asked you any questions about this motor vehicle and this loan to (omitted) Finance, this court would have proceeded upon the assumption that you, as a man of your word, owed (omitted) Finance $8142; correct?---Not entirely, no.
And of course this court would have been misled as to the true nature of your financial position? ---No, that’s not true. The car is worth nothing. That’s what I’m trying to represent to the court.
And, sir, could you just explain while you are at it, how it is that when you told (omitted) Bank, at page 83 of the exhibit, that your hire purchase loan liability was $4870 in September of 2012, it became by April of 2013 $8142?---Okay, that was an estimate. I didn’t – that figure I didn’t check.
Right. So it’s misleading or reckless? ---To (omitted) Bank.
And the court? ---I wouldn’t say reckless, but I should have checked the figure, yes.[18]
[18] Transcript 16/5/2013 pages 26-28
Clearly, the information in the Husband’s Financial Statement does not give an accurate impression. The Husband does not own a motor car. The Husband also deposed in his affidavit sworn on 30th April 2013 that he owned a motor vehicle valued at $150.00.[19] This is clearly incorrect.
[19] Affidavit of Mr Babett 30.4.2013 at paragraph [13]
I find the value of the non-superannuation asset pool to be:
a)Wife's (omitted) Bank Account (omitted) $49,000.00
b)Wife's (omitted) Bank Account (omitted) $ 77.00
c)Wife's (omitted) Bank Account (omitted) $ 300.00
d)Funds held on parties’ behalf by Matthews Folbigg $28,644.37
e)Funds held on parties’ behalf by (omitted) Conveyancing $38,653.00
f)Wife’s 2006 (vehicle omitted) $ 7,000.00
g)Wife’s household contents $ 3,000.00
h)Husband's (omitted) Bank Account (omitted) $ 750.00[20]
i)Husband's (omitted) shares $ 419.00
j)Husband's (omitted) motor cycle $7,000.00
k)Husband’s household contents $15,000.00
Total $152,843.37
[20] From husband’s Financial Statement filed 30 April 2013
Liabilities
It is the case that the Husband no longer has a debt owing to (omitted) Finance.
Another issue arose, in that the Husband claimed at paragraph [50] of his Financial Statement that he owed the sum of $17,000.00 to Ms P, characterised as a personal loan. Ms P is his mother. He was also cross-examined about this transaction by Mr S:
Well you borrowed $34,000.00 from your mother, you paid $17,000 on exchange, exhibit page 172? ---Yes.
What happened to the other $17,000?---Legal bills predominantly and mortgage.
Legal bills and---?---Actually, no, it was legal bills.
Right. So have you ever indicated anywhere in these proceedings that you allegedly borrowed $34,000.00 from your mother?---Why?
Could you answer my question?---No.
You won’t answer my question?---Sorry. What was the question?
Have you ever alleged anywhere in these proceedings that you had borrowed $34,000.00 from your mother?---No.
So that’s a part of your financial history that you have chosen not to disclose?---Not correct. I don’t agree with that.
And where does your mother live?---(omitted).
Right. Is she in good health?---she’s 70-odd, but yes.
And she’s in (omitted) right now?---I assume so.
Right. And you have a good relationship with her?---Yes.
Thank you. Now, in relation to this alleged loan from your mother, do you have a single document that would evidence a payment by your mother to you of $34,000?---There is a handwritten document at home. Mum’s pretty pedantic about it.
Well, right now you don’t have a single piece of paper here to evidence a payment of $34,000 by your mother, do you?---No, but the outstanding debt is 17,000.
Would it be fair to say---?---That’s what I have disclosed to the court.
Would it be fair to say, following on from your answer to my last question, you don’t have a single bit of paper that would evidence any payment by your mother to you; correct?---That’s not correct.
Right. Can you point me to a piece of paper---?---Sorry…
---to show your mother giving you any money?---I don’t have that here…yes, you are right.
Thank you. And you know the trial started yesterday; correct?---Mm.
And it ends today?---Yes.[21]
[21] Transcript 16/5/2013 pages 19-20
I am not satisfied, on that evidence, that the Husband has proved a liability to his mother of $17,000.00.
In the circumstances, the Husband’s Financial Statement is not a reliable document.
I find the parties’ liabilities to be the Wife’s MasterCard account in the sum of $6,500.00.
Superannuation
I find the parties’ superannuation to be:
a)Wife's (bank omitted) superannuation $75,000.00
b)Husband's (bank omitted) superannuation $246,476.22
Total superannuation $321,476.22
The gross value of the parties’ non-superannuation asset pool is $152,843.37.
The liabilities amount to $6,500.00.
By deducting the liabilities from the total of the non-superannuation asset pool, the net value of the non-superannuation asset pool stands at $146,343.37.
The total of the parties’ superannuation stands at $321,476.22.
The net total, combining the net non-superannuation asset pool with the superannuation pool, amounts to $467,819.59.
The (omitted) Property Trust and the (omitted) Property Investment Trust
According to the affidavit of Mr K, the Trusts have a potential maximum value of $31,524.00 and a potential minimum value of $14,594.00.
Credit on account of legal fees
There is a sum of $20,000.00 standing in the Trust Account of the Wife’s solicitors, Paul and Paul, on account of her legal fees.
The Parties’ Contributions
The Court must consider the contributions made by the parties under s.79(4) of the Family Law Act 1975 under the following paragraphs:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage any children of the marriage, including any contribution made in the capacity of homemaker or parent…
Contributions under s.79(4)(a)
The parties commenced their relationship in 1997. Neither party had any assets of any great value at the time the relationship commenced. They were both in full-time employment.
The Wife became pregnant in (omitted) 1998. She remained in employment until approximately a week before the child X was born, on (omitted) 1998. She returned to work approximately six weeks after he was born. She arranged for a home-based carer to look after the child whilst she was at work.[22]
[22] Affidavit of Ms Falconer 8.4.2013 at paragraph [15]
The Wife continued to work for (omitted) Pty Ltd, with whom she had been working since the parties commenced their relationship in 1997. She obtained another position in (omitted) 2000, at which time she was pregnant with the parties’ second child, Y. She continued to work until late (omitted) 2000.
The child Y was born on (omitted) 2001. The Wife returned to work 10 weeks later. She worked on a part-time basis, two to four days a week. She continued to contribute her income to the marriage.
In 2007 the Wife sustained an injury in an accident. She received an amount of $20,000.00 in compensation, which was paid into the parties’ joint line of credit.
The Wife’s mother also made a contribution towards the purchase of the parties’ first home at Property B. The Wife deposed in her affidavit:
We paid $505,000 for the purchase price and secured the purchase via an advance from my mother in the sum of $100,000.[23]
[23] Affidavit of Ms Falconer 8.4.2013 at [35]
The amount provided by way of loan from the Wife’s mother should properly be regarded as a contribution made on behalf of the Wife (see Gosper & Gosper[24], Kessey & Kessey[25] and Pellegrino & Pellegrino[26]).
[24] (1987) 90 FLR 1; 1 Fam LR 601; FL 91-818
[25] (1994) 18 Fam LR 149; FLC 92-495
[26] (1997) 22 Fam LR 474; FLC 92-789
The Husband contributed his salary and income from his employment toward the benefit of the family during the marriage.
After the parties separated under the one roof in March 2010, the Wife applied for an assessment of Child Support.
The Wife obtained work in March 2011 as a (omitted) with a firm called (omitted), on the (omitted). She deposed in her affidavit that her starting salary for the first twelve months was $40,000.00 and that she currently earns $55,000.00 per year, excluding superannuation.[27]
[27] Affidavit of Ms Falconer 8.4.2013 at [24]-[25]
The parties physically separated on 8th May 2011, when the Husband moved out of the former matrimonial home. The Wife deposed that he had previously, in January 2011, changed the arrangement for his salary, which was being paid into the parties’ joint line of credit, so that it was paid into his own personal account, to which she did not have access.[28]
[28] Ibid at [23]
The Wife continued to use her income and her financial resources for the welfare of the family, being herself and the parties’ two children since separation. This situation continues.
By comparison, the Husband has been paying child support as assessed but has otherwise had the benefit of his income from his employment since separation.
Contributions under s.79(4)(b)
It is the Wife’s case that she was the one who managed the family finances on a day to day basis during the marriage. She, too, managed all aspects of the sale process of the matrimonial home and the investment properties registered in the name of (omitted) Pty Ltd acting as trustee for the (omitted) Property Trust and the (omitted) Property Investment Trust.
It is also the Wife’s case that she was primarily responsible for the conservation and maintenance of the matrimonial home, with the assistance of her mother, Ms D.
It is the Wife’s evidence that:
67.Throughout my entire career and studies, I have been responsible for caring for the children, cooking and preparing meals, arranging childcare, cleaning and generally managing and arranging the household, as well as ensuring all household bills etc. are paid.
68.I have been the primary carer for the children since they were born.[29]
[29] Affidavit of Ms Falconer 8.4.2013 at [67]-[68]
The Husband worked long hours and was thus unable to provide a great deal of assistance. The Wife deposed that:
In February 2005 the Respondent commenced working for (omitted) based in (omitted), Sydney where he remains at the present time. He has always commuted, travelling up to 3-4 hours daily and working a typical 10 hour day.[30]
[30] Ibid at [31]
The Husband conceded in his affidavit of 30th April 2013 that he had a full-time in position and that “on weekdays I was away from home for prolonged periods”.[31]Thus, it can be seen that the circumstances of his employment, including commuting, kept the Husband away from the home for long periods, thus leaving the responsibility on the Wife to care for the children and run the household. This is not to say that the Husband did not make a contribution, but his contribution by way of providing an income was a financial contribution and has been considered under s.79(4)(a).
[31] Affidavit of Mr Babett 30.4.2013 at [7(f)]
Contributions under s. 79(4)(c)
The Wife contributed as the primary caregiver to the parties’ two children, where the Husband’s ability was seriously limited, due to the circumstances of his employment, as referred to at [81] and [82] above.
The Wife has also made a post-separation contribution to the welfare of the children as their primary care-giver.
The Husband, whilst disputing a separation in early 2010, stated that “on almost every weekend I had substantial care of the boys so that the applicant could study”.[32]
[32] Affidavit of Mr Babett 30.4.2013 at [7(f)]
It is well-established law that the contribution made by a party to the marriage by caring for the children after cohabitation ceased is a factor within s.79(4)(c) (Williams v Williams[33]).
[33] [1985] HCA 52; (1985) 61 ALR 215; 10 Fam LR 355; FLC 91-628
This is not a case where the parties’ contributions should be regarded as equal. Taking into consideration the Wife’s history of employment, the financial contribution made by the Wife’s mother early in the marriage and her assistance with the care of the children and the Wife’s contribution as homemaker and primary carer, before and since separation, I am of the view that the contributions favour the Wife.
The parties’ contributions are assessed at 60% by the Wife and 40% by the Husband.
The effect of any proposed order upon the earning capacity of either party (s.79(4)(d))
Senior Counsel for the Wife submitted that she will have the primary care of the children in the foreseeable future, as the Husband is not currently spending any time with them. This will restrict her capacity to pursue other avenues of employment as she needs flexibility in her working hours so that she may attend to the needs of the children.
Neither party’s proposed orders will affect the Husband’s working capacity.
Any other order under the Family Law Act affecting a party to the marriage or a child of the marriage (s.79(4)9f))
The parties were divorced by Order of this Court on 9th July 2012. The Divorce Order became final on 10th August 2012.
On 7th May 2013 the following Orders were made by consent:
1. That the husband’s application for parenting orders is hereby dismissed;
2. The issue of costs to be reserved for the final hearing.
Any child support under the Child Support (Assessment) Act 1989 for a child of the marriage (s.79(4)(g))
The Husband currently pays child support. There is an Application by the Wife for departure from administrative assessment of child support currently on foot.
On 16th May 2013 an Interim Order was made by consent that the Husband would pay to the Wife the sum of $2,600.00 per month by way of child support, as to $1,300.00 for each of the parties’ two children.
Matters referred to in subsection 75(2) of the Family Law Act 1975
Paragraph 79(4)(e) of the act requires the Court to consider the matters referred to in s.75(2) so far as they are relevant.
The Wife was born on (omitted) 1972. She is 41 years of age. Her counsel submitted that she is in “reasonable” health but there is no evidence other than that she is in good health.
The Husband was born on (omitted) 1966. He is 47 years of age. He appears to be in good health.
Each party is in employment. The Wife’s earning capacity appears to be affected by her need to remain with an employer like her current employer who can provide her with flexible working hours so that she may attend to the needs of the children, including the younger child, Y, who has been diagnosed with Autistic Spectrum Disorder.
The Wife deposes that:
My employer has allowed ‘flexibility’ so I can work longer days Monday and Tuesday shorter days Wednesday to Friday, allowing me to be home for the children Wednesday to Friday and minimise child care requirements during the week.[34]
[34] Affidavit of Ms Falconer 8.4.2013 at [90]
The Husband is employed by a company called (omitted) for approximately 8 years and 10 months. He states in his Financial Statement that he receives an average sum of $4,313.00 before tax. He receives bonuses from his employer.
The Wife has the care and control of the parties’ children, X, born (omitted) 1998, and Y, born (omitted) 2001.
The Husband does not have the care and control of any child of the marriage under the age of 18 years.
Neither party has the responsibility to support any other person.
The Wife receives a means tested Commonwealth benefit amounting to $100.00 per week by way of Family Tax Benefit.
Both parties have superannuation. The Wife has a superannuation entitlement of some $75,000.00. The Husband has a superannuation entitlement of $246, 476.22.
The parties enjoyed a comfortable standard of living before they separated. The Husband will continue to be able to do so. The Wife has a need to support the two children of the marriage and provide a home for them. She will need to continue to work.
Dealing with the matters under paragraph 75(2)(h), the Wife is exercising her earning capacity by working on a full time basis with her current employer. She is not seeking an order for spousal maintenance but a child support departure order. She submits that her income is insufficient to even support her basic needs. Further, it is submitted that she will have little realisable capital from which to subsidise her weekly living expenses.
The Wife submits that, whilst the Husband has a surplus income and can expect his salary and bonuses to increase, what little realisable capital assets she will retain she may need to draw on as security to fund her weekly shortfall. She also hopes that part of her capital resources will be applied towards the acquisition of a home for herself and the children.
However, this submission does not fall within the parameters of paragraph (h) of s.75(2), to which it is addressed, which provides that the Court should take into account:
the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of the 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;
In my view, the Wife has not established any matter that would affect this consideration.
The Wife submits that she contributed to the income, earning capacity, property and financial resources of the husband (s.75(2)(j)) by undertaking the majority of homemaking and parenting whilst he focused on his career progression. She was assisted by her mother in this regard.
The duration of the marriage is relevant. The parties commenced living together early in 1998 and separated under the one roof in March 2010.
The Wife proposes that she will remain the children’s primary carer. Senior Counsel submits that “the Husband has not displayed a readiness to prioritise the children’s day to day care from that of the demands of his employment and his own emotional distress as a result of the breakdown of the marriage.”
There is no evidence that either party is cohabiting with any other person.
The Court must consider the terms of any order made or proposed to be made under s.79 in relation to the property of the parties. The Wife seeks orders that would leave the Husband with his shares, bonuses, annual income tax refunds, and his income and part of his superannuation. For herself, she seeks the cash available to the parties to assist her to acquire a home for herself and the children.
As to the matters under s.75(2)(na), the Husband is continuing to pay child support and has consented to an interim order whereby the rate of child support that he pays is increased to $2,600.00 per month.
The Wife seeks a departure order that would require the Husband to pay an increased amount of child support to $3,466.00 per month, along with the expenses involved with the children’s school attendance.
The Husband does not seek an order that he be responsible for any further costs over and above the sum of $2,600.00 per month.
The Wife seeks arrears of child support.
As to the matters under s.75(2)(o), “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”, the Wife submits that upon the Husband’s obligation to pay child support she will have the ongoing financial responsibility for the children, one of whom has special needs.
Adjustment
It was submitted on behalf of the Wife that she sought 60% to 65% of the combined available assets and superannuation entitlements of the parties on contributions. I have found at paragraph [88] above that the parties’ contributions should be assessed at 60% in favour of the Wife to 40% to the Husband.
Senior Counsel for the Wife submits that, in accordance with the third step in the process set out by the Full Court of the Family Court in Hickey, there should be a further 10% to 15% adjustment in her favour as a result of the factors under s.75(2), resulting in orders that would give her 70% to 75% of the available property and assets, both superannuation and non-superannuation.
In my view, there is a basis for an adjustment in favour of the Wife under the provisions of s.75(2), due to the fact that she has the care and control of the two children of the marriage. X is aged 15 years and Y is aged 12 years and 10 months. Y has special needs as a result of the diagnosis of Autistic Spectrum Disorder. The Wife needs to be able to re-house herself and the children.
The need to be available to care for the children has a limiting effect on the Wife’s ability to work, as she needs to remain in a position where she has some flexibility in her working hours.
The Husband is not in the same situation, as he now appears to have little or no contact with the children at all. He is free to engage in his employment. He retains his income-earning capacity intact.
Even taking a conservative view, there is a clear case for a 10% adjustment in favour of the Wife.
Thus, the parties’ percentage entitlements will be adjusted to 70% to the wife and 30% to the Husband.
Just and equitable
The Court is again required to consider whether the proposed orders to be made are just and equitable. The orders sought by the Wife will provide her with cash which she can use towards the purchase of a home for herself and the two children. She will also receive a part of the Husband’s superannuation whilst retaining her superannuation entitlement intact.
The Husband will be left with his significant earning capacity, his shares, and a reasonable amount of his superannuation. As he appears to be in good health and is less than 48 years old, he still has a significant earning life ahead of him to build up a substantial superannuation entitlement.
The Wife is entitled to 70% of the net asset pool. As the net asset pool (including superannuation) amounts to $467,819.59. Accordingly, the Wife will receive $327,473.71. The Husband will receive $140,345.88.
The Wife will therefore be entitled to:
a)her (omitted) Bank Account (omitted) $49,000.00
b)her (omitted) Bank Account (omitted) $ 77.00
c)her (omitted) Bank Account (omitted) $ 300.00
d)the funds held by Matthews Folbigg $ 28,000.00
e)the funds held by (omitted) Conveyancing $ 38,653.00
f)her (vehicle omitted) $ 7,000.00
g)her household contents $ 15,000.00
h)her (omitted) Fund superannuation $75,000.00
Total $213,030.00
This leaves a shortfall which should come from the Husband’s superannuation.
I am satisfied that the proposed orders are just and equitable.
Departure from administrative assessment of child support
The parties seek an order for departure from administrative assessment of child support.
The Wife seeks orders providing that:
a)the amount payable by the Husband with effect from 1st March 2011 is the sum of $400.00 per week for each child, being $3,466.70 a month);
b)arrears to date should be paid by the Husband within 30 days;
c)the Husband should continue to meet the payments to Medibank Private Health Fund for the children; and
d)the Husband should pay all tuition fees, school excursion fees and levies and all mandatory expenses for the children at (omitted) College; and
e)the Husband should pay all arrears of tuition fees owing to the school.
The Husband, in his Further Amended Response, seeks a departure order that provides that:
a)Child support from 1st March 2011 to the date of these orders remains unchanged;
b)from the date of these orders the Husband should pay child support at the rate of $1,300.00 for the child X and $1,300.00 for the younger child Y until the children attain the age of 18 years or complete their secondary education; and
c)from 31st December 2014 the annual rate of child support should increase in accordance with the consumer price index for Sydney.
As can be seen, the husband is not proposing an order whereby he pays the children’s school fees or health fund expenses.
Applications for departure from an administrative assessment of child support
Under s.116(1) of the Child Support (Assessment) Act 1989 (Cth), there are five different circumstances in which a party may apply to a court for a departure from administrative assessment of child support. The subsection provides:
A liable parent or a carer entitled to child support may, in respect of an administrative assessment of child support for a child, apply to a court having jurisdiction under this Act for an order under this Division in relation to the child in the special circumstances of the case if:
(a) all of the following apply:
(i) the Registrar has, under section 98E or 98R, refused to make a determination under Part 6A in respect of the administrative assessment;
(ii) an objection to the refusal has been lodged;
(iii) the Registrar has disallowed the objection; or
(aa) all of the following apply:
(i) a decision has been made in respect of the administrative assessment;
(ii) an objection to the decision has been lodged;
(iii) in making a decision on the objection, the Registrar has, under section 98E or 98R, refused to make a determination under Part 6A in respect of the administrative assessment; or
(ab)the SSAT has, under section 98E or 98R, refused to make a determination under Part 6A in respect of the administrative assessment; or
(b) both of the following apply:
(i) the liable parent or carer entitled to child support is a party to an application pending in a court having jurisdiction under this Act;
(ii) the court is satisfied that it would be in the interest of the liable parent and the carer entitled to child support for the court to consider whether an order should be made under this Division in relation to the child in the special circumstances of the case; or
(c)in the case of a liable parent – the administrative assessment of child support payable by the liable parent for the child is made under subsection 66(1).
Subsection 116(2) provides that:
An application may be made by the carer entitled to child support, or the liable parent, in relation to the child.
Section 117 of the Act sets out the circumstances in which a court may make a departure order:
(1) Court may make a departure order Where:
(a)application is made to a court having jurisdiction under this Act for an order under this Division in relation to a child in the special circumstances of the case; and
(b)the court is satisfied:
(i) that one or more of the grounds for departure mentioned in subsection (2) exists or exist; and
(ii) that it would be:
(A)just and equitable as regards the child, the carer entitled top child support and the liable parent; and
(B)otherwise proper;
to make a particular order under this Division;
the court may make the Order.
The grounds for departure are set out in paragraphs (a), (aa), (b) and (c) of subsection (2) and can essentially be divided into three main categories:
a)that, in the special circumstances of the case, the capacity of either parent to provide financial support for the child is significantly reduced;
b)that, in the special circumstances of the case, the costs of maintaining the child are significantly affected; or
c)that, in the special circumstances of the case, application in relation to the child of the provisions of the Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child.
The Departure Application
In this case, the Application is being made under s.116(1)(b), where both the liable parent (the Husband) and the carer entitled to child support (the Wife) are parties to an application pending before the Court (the wife’s Application for property settlement) and the Court is satisfied that it would be in the interest of both parties to consider whether an order should be made.
In accordance with s.116(2), the Application is being made by the carer entitled to child support (the wife), and the liable parent (the husband) is also seeking a departure order.
The Wife submits that there are grounds for departure as set out in s.117(2)(b), being:
a)the special needs of the child Y, who has been diagnosed as falling within the autistic spectrum and having Juvenile Onset Arthritis; and
b)her wish to educate the two children at a private school, being the education that was expected by the parents.
The Wife further submits, in accordance with s.117(2)(c), that, in relation to the parties’ two children, in the special circumstances of the case , application of the provisions of the Child Support (Assessment) Act would result in an unjust and inequitable determination of the level of child support to be provided by the Husband because of:
a)The income, property and financial resources of each parent; and
b)The earning capacity of each parent.
It is the Wife’s evidence, unchallenged by the Husband, that Y was diagnosed with Autistic Spectrum Disorder when he was two and a half years of age. She described his symptoms as:
…a speech impediment and echolalic speech at an early age, and erratic, violent behaviour and an inability to cope with and adapt to change.[35]
[35] Affidavit of Ms Falconer 8.4.2013 at [70]
The Mother deposed:
71. I thereafter focused all of my attention and worked very closely with him and did all that I could and continue to do all that I can to provide Y with an opportunity to lead a normal life. Following Y’s diagnosis by Sydney’s leading Autistic Paediatrician (Dr U), he underwent a number of years of extensive therapy, including OT, speech therapy, counselling, dietary supplements, paediatric appointments, blood/hair/urine analysis, physiotherapy and early intervention.
72.I took Y to nearly all his doctor’s appointments and school appointments alone and worked with him at home doing the exercises required by the different specialists which included making up visual charts and structured routines. This took up a couple of hours each day.[36]
[36] Affidavit of Ms Falconer 8.4.2013 at [71]-[72]
The Wife further deposed that the child has a government disability/pension card and special school; funding because of the diagnosis. She fears that he may never be fully independent and she will be required to care for him well beyond his becoming an adult.
The Wife stated in her affidavit that the child is now in Year 6 at (omitted) College, where his brother attends. She stated:
79.Y's NAPLAN results have been very poor and he is unable to complete most tasks independently at school. He is progressing less than well and has issues with organisation, routine and change and benefits from social skill programs. He always requires extra assistance and hands on teaching strategies (preferably 1 on 1) to understand instructional content and move him back on track. He doesn’t understand the concept of sarcasm, idioms etc. and always needs to be taught everything that most adults and children take for granted. Y currently receives weekly counselling sessions at (omitted), attends social skills workshops and receives ongoing support from the special needs unit with teachers working together to try to get the best outcome for Y. In February I attended one of many meetings arranged by the school to discuss funding and requirements for Y including organising an assessment by (omitted), which the school organises and pays for annually.[37]
[37] Ibid at [79]
The Wife further deposes:
81.Typical of Y’s condition, Y will not complete or hand in assignments at school unless I know about them and ensure that he completes the assignment and X or I take them to school and hand them in for him. He is incapable of returning anyone’s belongings, money, notes etc. He simply forgets. I go through his school bag each day and have to constantly remind him about things he needs to remember to do or find. Y has left his IPAD in a retail shop, his iPod at a basketball station, his books at his grandmother’s home, his wallet on a shop counter, his school bag on the bus, his art folder on the bus, his clothes always at friends etc.
82.Y should be undergoing private counselling, social skills, physiotherapy, speech therapy and tutoring. He undertook these tasks up until 2011 and 2012, however the respondent will not financially assist me in this regard and I have not been able to afford for him to continue to undertake many of these tasks. He is in urgent need of such assistance. If such assistance is not provided shortly I am concerned that he may regress further.
83.Additionally, Y was attending specialised physiotherapy appointments on a fortnightly basis for his Juvenile Arthritis diagnosis (2011). This was at a cost to me of about $65/session. Y also required hospitalisation for steroid injections and there were many medical refund gaps payable by me. I have been advised by the specialist that the arthritis flair[38] up could occur at any time again. The respondent does not reimburse me these fees.
84.I currently need to spend about 30 minutes each day working with Y on physio activities. The physio “sets” a number of home based physio tasks and aids. I have enrolled Y into gym lessons and trampolining on doctor’s advice to assist in coordination and to help his wrist and assist in reducing weight gain which has resulted since his Arthritis onset. He would also benefit from swimming lessons used to have at a cost of $70 per month that I currently can’t afford.[39]
[38] sic
[39] Affidavit of Ms Falconer 8.4.2013 at [81]-[84]
In my view, bearing in mind the fact that the Husband is not currently spending time with either of the children at all, the Wife has demonstrated the existence of a ground for departure due to the special needs of the child Y (s.117(2)(b)(ia)). The commitment of her time, unaided by the Husband, also impacts on her ability to earn a greater income, because she needs to remain in a job that allows her the flexibility to devote more than the usual amount of time to her son.
The Wife also states that throughout their relationship it had always been the parties’ intention that the children would attend private schools during their primary and secondary years at school. She states that X was attending (omitted) Grammar School until the end of 2010 “when I made the decision to move him to a cheaper school – (omitted) College (three to four times less expensive than Grammar).[40]
[40] Affidavit of Ms Falconer 8.4.2013 at [157]
The Wife also deposed at paragraph [159] of her affidavit:
(omitted) School was deemed to be the only other option available on the (omitted) for the two boys that would satisfy this requirement going forward, and the Respondent and I had mutually agreed that private schooling would be required. The Respondent and I agreed the children require a compassionate teaching system where they are being looked after and the (religion omitted) values and culture has been so much more important since the separation.[41]
[41] Ibid at [159]
The Husband agreed at paragraph [12(l)] of his affidavit that the parties intended the children to attend this school:
Attached is evidence that both the Applicant and Respondent intended the children to go to the same school which they currently attend – Annexure L.[42]
[42] Affidavit of Mr Babett 30.4.2013 at [12(l)]
Annexure “L” consists of a chain of emails between the parties referring, inter alia, to the enrolment of Y at (omitted). One email from the wife to the husband dated 19th October 2011 states:
Fees have also been set for next year $6316 (X) and $4150(Y) which includes their annual increase.[43]
[43] Ibid Annexure “L’
I am satisfied that a ground for departure has been made out because the children are being educated in the manner that was expected by their parents (s.117(2)(b)(ii)).
Subsection 117(1) requires at subparagraph (b)(ii) that:
the court is satisfied:
(ii) that it would be:
(A) just and equitable as regards the child, the carer entitled to child support and the liable parent; and
(B) otherwise proper;
to make a particular order under this Division.
I am satisfied that it would be just and equitable in regard to the child Y, the Wife and the Husband to make the departure orders sought. It is clear that the costs connected to Y’s special needs involve an amount of medical, physiotherapy and other costs which are difficult for the Wife to meet on her weekly income, which is stated in her Financial Statement of 30th April 2013 as:
a)Salary or wages before tax: $1,146
b)Interest $ 35
c)Carer Allowance $ 55
d)Child support $ 386
As a result of the Interim Order made on 16th May 2013, the Wife now receives an amount of $2,600.00 per month by way of child support, which is the total amount that the Husband proposes on a final basis. This amounts to $600.00 per week.
The Husband sets out in his Financial Statement filed on 30th April 2013 a total average weekly income before tax of $4,313.00, against which he claims weekly expenses of $4,170.00. This latter figure includes $48.00 to Medibank Private, which includes the children, yet the Husband does not consent to an order that he should continue to pay health and medical insurance for them after the end of 2013[44]. He also refers to an actual payment of $638.00 per week by way of child support, which is higher than his current obligation under the order of 16th May.
[44] Transcript 16.5.2013 at page 7
It should be pointed out that it is just and equitable to require a father in the position of the Husband in this case to pay to keep the children covered by a health fund, especially in the light of the additional medical expenses that Y tends to require.
In addition, the Husband claims $9.00 per week towards the registration of the Peugeot motor car which was written off in an accident on 23rd February 2013[45] and $177.00 per week to (omitted) Finance, in respect of a debt of $8142.00 that was paid out prior to the date he completed the Financial Statement on 29th April 2013.[46]
[45] See at [46] above
[46] See at [47]-[48] above
The Husband claims other expenses amounting to $1,090.00 per week.
In view of the unreliability of the material in the Husband’s Financial Statement, I am not prepared to accept that his average weekly expenses are what the husband says they are. He was not a witness of credit and was at times evasive in answering questions and apparently untruthful in cross-examination.
I am satisfied that the Husband does have the capacity to pay the amount sought and that the orders sought are just and equitable.
The Court must also be satisfied that it is otherwise proper to make the orders sought (s.117(1)(b)(ii)(B)). It is the primary duty of parents to maintain their children (Child Support (Assessment) Act 1989, s.3). Similarly, s.4 of the Act states that the principal object of the Act is to ensure that children receive a proper level of support from their parents.
In my view, although the Wife is receiving some financial assistance from the Commonwealth Government by way of a carer’s allowance for Y, the proposed arrangements require the child’s parents to meet the children’s needs for financial support. The proposed orders are, therefore, otherwise proper.
Child Support Departure Orders
It is for the above reasons that Orders will be made for a departure from administrative assessment of Child Support. The Husband will be required to pay child support at the rate of $400.00 per week for each of the two children, a total of $3,466.67 per month (although the Wife seems to have rounded up the calculation to $3,466.70), together with arrears.
I am also satisfied that an order should be made requiring the Husband to pay:
a)The children’s Medibank Private Health Fund instalments; and
b)The tuition fees and other expenses for each of the children to attend (omitted) College, together with arrears.
The Wife seeks that the departure order should date from 1st March 2011, noting that the relevant assessment of Child Support is dated 14th July 2011.
The Application for Departure was filed on 14th October 2011, and I consider that this should be the commencement date. I am not prepared to make an order retrospective to a time before the proceedings commenced. The commencement date will be the date of the Application.
Costs
On 7th March 2013, when the Husband withdrew his Application for parenting Orders, the issue of costs was to be left for the final hearing. If either party seeks an order for costs, on any subject, he or she should file and serve an affidavit within 28 days, setting out the amount of costs sought and how that amount is calculated. A further 21 days will be allowed for an affidavit in reply.
I certify that the preceding one hundred and seventy-two (172) paragraphs are a true copy of the reasons for judgment of Judge Scarlett
Date: 12 November 2013
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