Gabriel and Gabriel (No 2)

FAMILY COURT OF AUSTRALIA

GABRIEL & GABRIEL (NO 2)

[2017] FamCA 443

FAMILY LAW – CHILDREN – Where the husband seeks a week about arrangement with the two children, aged 10 and 15 – Where the wife opposes that application – Where the children currently spend five nights per fortnight with the husband – Where there is no dispute that the parties would have equal shared parental responsibility and the children would spend half of all school holidays with each parent – Where the husband has been diagnosed with a serious illness – Where the children have a positive relationship with both parents – Where the expert has recommended that the children spend significant and substantial time with the husband but not equal time – Orders made not in accordance with either party’s application – Orders made that the children spend six nights per fortnight with the husband.

FAMILY LAW – PROPERTY – Where the husband made significant contributions assessed at 72 per cent – Where the husband’s contributions included substantial financial assistance from his parents – Where the husband continued to earn an income during the marriage – Where the wife continues to be the primary caretaker for the children – Where the wife is undertaking tertiary education and is not earning an income – Where a section 75(2) of the Family Law Act 1975 (Cth) adjustment of 5 per cent is made in favour of the wife – Orders made for the wife to receive 33 per cent of the net asset pool.

FAMILY LAW – CHILD SUPPORT – Application for a child support departure order for periodic child support – Where the wife argued that there were special circumstances that would justify a departure pursuant to sections 117(1)(b)(ii), (2)(c)(ia) and (2)(c)(ib) of the Child Support (Assessment) Act 1989 (Cth) – Where the children’s weekly costs are not excessive – Where the father has paid child support as assessed – Where neither party is earning an income – Application dismissed.

Family Law Act 1975 (Cth) ss 75(2), 79(2)
Child Support (Assessment) Act 1989 (Cth) ss 117, 117(2)(b)(ii), 117(2)(c)(ia), 117(2)(c)(ib)

Rosati v Rosati (1998) FLC 92-804
In the Marriage of Gyselman (1992) FLC 92-279

APPLICANT:

Ms Gabriel

RESPONDENT:

Mr Gabriel

FILE NUMBER:	SYC	3413	of	2013
DATE DELIVERED:	28 June 2017
PLACE DELIVERED:	Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Rees J

HEARING DATE:

19 June 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Gould

SOLICITOR FOR THE APPLICANT:

Pigdon Norgate Famiy Lawyers

THE RESPONDENT:

In Person

Orders

IT IS ORDERED

That the parents have equal shared parental responsibility for B born … 2002 and C (“the children”) born … 2007.
That the children live with the father during school terms as follows:
(a)On each alternate Wednesday, from after school until before school on Thursday morning, commencing on 19 July 2017 and fortnightly thereafter;
(b)On each alternate weekend from Wednesday after school until before school on Monday morning commencing on 26 July 2017 and fortnightly thereafter.
(c) The children shall live with the mother at all other times.
That, unless otherwise agreed, and notwithstanding any other order, the children spend half of each school holiday period (excluding the period of the July 2017 holidays) with each parent as follows:
(a)In the holidays at the end of Terms 1, 2 and 3, if the children are in the care of the mother on the last day of term in accordance with these Orders, they shall spend the first half of the school holidays with the father and if they are in the care of the father on the last day of term in accordance with these Orders, they shall spend the first half of the school holidays with the mother.
(b)In the Christmas school holidays the children shall spend the first half of the holidays with the mother and the second half with the father in odd numbered years. In even numbered years, the children shall spend the first half of the holidays with the father and the second half with the mother.
(c)If the children are with the mother for the first half of the Christmas school holidays, they shall live with the father from 4.00 pm on Christmas Eve until 11.00 am on Christmas Day. If the children are with the father for the first half of the holidays, they shall live with the mother from 4.00 pm on Christmas Eve until 11.00 am on Christmas Day.
(d)For the purpose of this Order, the school holidays commence at 9.00 am on the first day after the last day the children attend school and end at 6.00 pm on the last day before the children attend school the following term.
(e)For the purpose of this Order, unless otherwise agreed, changeover during the school holidays is to occur at 12 noon on the mid-point of the school holidays.
That notwithstanding any other Order, the children shall live with the mother from 6.00 pm on the day before Mothers’ Day until the Monday morning following Mothers’ Day, and with the father from 6.00 pm on the day before Fathers’ Day until the Monday morning following Fathers’ Day.
That on each of the children’s birthdays, and on the birthday of the non-resident parent, they shall spend time with the non-resident parent from after school until 7.00 pm if a school day, and from 2.00 pm until 7.00 pm if not a school day.
That, except where these Orders provide for changeover to occur at the children’s school, the mother is to take the children to the father’s home at the commencement of their time with him, and the father is to return the children to the mother’s home at the conclusion of their time with him.

PROPERTY

That the husband and the wife do all things required to pay to the wife from the ANZ Business Premium Saver Account #...78, the sum of $613,428 and to pay the balance to the husband, subject to Order 7.
That until such time as the children return to Australia from Country D on 18 July 2017, the husband is restrained from withdrawing or dealing with the sum of $10,000 in the ANZ #...78 account except to pay such amount to the solicitors for the wife, Pigdon Norgate Family Lawyers, such sum to be held by them on trust. In the event that the children have not returned to Australia on 18 July 2017, then the sum of $10,000 may be paid to the wife or in accordance with her direction. In the event that the children are returned on 18 July 2017, the sum of $10,000 is the property of the husband absolutely.
That the husband and the wife do all things required to pay to the husband the balance of the funds held in the ANZ Term Deposit Account #...46.
That other than in accordance with these orders, each party retain all items of property in his or her possession.
That the wife’s application pursuant to s 117 of the Child Support (Assessment) Act 1989 (Cth) be dismissed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Gabriel & Gabriel (No 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 3413 of 2013

Ms Gabriel

Applicant

And

Mr Gabriel

Respondent

REASONS FOR JUDGMENT

Ms Gabriel (“the wife”) and Mr Gabriel (“the husband”) commenced cohabitation in the UK in May 1997. The wife, who is Australian born, and the husband, who is Country D born, were both working in the UK at the time. At the commencement of their cohabitation, the husband had savings of about $60,000. The wife had no substantial assets.
They married in 1998 and commenced living together in Australia in early 1999. They have two children, B who was born in 2002 and is now 15 years old, and C who was born in 2007 and is now ten years old.
In 1999 the husband’s mother gave the husband an interest in a property owned by her in J Town in Country D. The husband’s mother lives in the property and she pays all of the outgoings. The husband receives no benefit from the property and will not do so during his mother’s lifetime. The husband’s exact interest and the manner in which his interest should be treated are an issue in these proceedings.
In 2000 the husband and the wife purchased a property in Suburb T for $685,000, the whole of that sum, together with the costs of the purchase, was provided by the husband’s parents.
In 2001 the wife ceased full time employment and started a business. She returned to the business on a part time basis after B was born.
In 2002 the husband’s mother gave the husband an etching then valued at $18,000.
In January 2003 the husband’s mother gave the husband a portfolio of shares then valued at 157,659 Euros. The income from the shares supplemented the family’s income.
In 2005 the husband and wife renovated Suburb T, spending a total of $100,000 (according to the wife) or $110,000 (according to the husband). There is a dispute as to whether the renovations were paid for directly by the husband’s mother or, as the husband asserts, financed by the sale of the share portfolio. In either event, the money was provided by the husband’s mother.
Also in 2005, the husband purchased an investment property in Suburb U. He borrowed $340,000 by way of a mortgage and the balance was paid from funds received from his mother.
Further renovations to Suburb T were carried out in 2007 and 2008 at a cost of $450,000, those funds being again provided by the husband’s parents.
The wife again ceased working prior to the birth of C.
In 2007, renovations to Suburb U were carried out and the rental value of the property was enhanced.
In January 2008 the wife returned to part-time work.
The husband deposed that between 1999 and 2009 the husband received cash transfers totalling $1,558,188 from his parents or his mother. That evidence was not challenged.
The parties separated in June 2010 but continued to live in the Suburb T property until 2014 when the property was sold. From the date of their separation, they each paid their expenses separately and they arranged to share the care of the children so that the husband cared for them on six nights each fortnight. The wife worked as a volunteer co-ordinator earning $56,100 per annum and the husband continued in his employment. They continued to deposit money into a joint account to pay their mortgage payments on Suburb T.
The husband deposed that, after separation, the husband received a further sum of $100,000 from his mother. That evidence was not challenged.
Since separation, the husband has been solely responsible to pay the shortfall between the costs of Suburb U and the rent received. He estimated the shortfall to be $6,000 per annum.
In late 2011, the wife entered into a new relationship which she conducted, in part, in the Suburb T home where she continued to live with the husband and the children.
In 2012 the wife was retrenched from her employment and she has not since been in paid employment. She received a redundancy payment of $28,558 which she used for living expenses.
In January 2013, the wife unilaterally reduced the children’s time with their father to five nights each fortnight.
In February 2013 the wife commenced tertiary education, receiving a Newstart Allowance.
In June 2013, the wife’s mother was diagnosed with a terminal illness and she moved into the Suburb T property so the wife could care for her. She died in October 2013 leaving the wife an inheritance of $431,445.
Suburb T was sold in April 2014 and the money invested in a controlled monies account. The parties each moved to rental accommodation. The children spent five nights each fortnight in the care of the husband.
In October 2014, the wife filed an application to relocate the children’s residence to Tasmania. That application was later abandoned.
In late 2016 the husband was diagnosed with a serious illness. He underwent chemotherapy in early 2017.
The wife will finish her degree (including six months of practical placement) in late 2017.
The parties are unable to agree about the appropriate parenting arrangements for the children and the appropriate division of their assets.

PARENTING

The dispute in relation to the parenting of the children is narrow. At the present time, the children spend five nights each fortnight with their father. He seeks to increase the time to seven nights. The wife opposes any increase in the time the children spend with their father.
The children currently live with their father each Tuesday after school until Wednesday morning and each alternate weekend from Friday after school until Monday morning.
The Court was assisted by a report from a single expert, Dr V, who conducted interviews in June 2014 and prepared a report dated 13 July 2014. At the time of Dr V’s report, the children were aged 12 years and six years.
Dr V was not required for cross-examination.
Dr V asked B what was the most difficult thing about the current living arrangements (which were the same then as they are now). B told Dr V that the hardest thing is “changing from day to day and bringing everything”. Asked if she would change anything about the way she lives, B said “my dad’s house is pretty far away from the school and my friends and I wish it wasn’t so far away”. Dr V noted that several times B told her that she likes things “just the way they are” and does not want to change anything with respect to her living arrangements. She told Dr V that no adult had ever hurt or harmed her and she feels safe and comfortable with both her mother and her father.
Dr V reported that she asked C if he wanted anything to change about the way he lived with his mother and father, and C said that he was very happy with the way the living arrangements worked.
Dr V observed the children with their father. She commented “I noticed that [the father] engaged in a child-focused, playful and warm manner with the children.”
She noted:
The children were physically affectionate towards their father and this affection was reciprocated. They engaged in direct eye contact with their father and he with them. The tone and manner of the observation session was light-hearted, warm and loving. The children appeared to be extremely comfortable with their father. They also appeared to be respectful of his parenting role, including his need to, at times, set limits for them.
Dr V noted that when the children farewelled their father they kissed and hugged him and appeared to happily transition to their mother’s care.
In the care of their mother Dr V observed a physically affectionate reunion, characterised by warmth and familiarity. She reported:
I noted that the children appeared to be very relaxed and comfortable with their mother. Both [C] and [B] engaged in direct eye contact with their mother, sought and received physical affection from her and were able to engage in very light-hearted banter. Neither [the mother] nor the children appeared to be awkward or constrained in any way; rather, their communication was familiar, loving and warm.
In relation to the views expressed by the children, Dr V reported:
[B] expressed the view that she wishes the current living arrangements to continue. I noted that in her narrative and responses to me she was clear to be protective of her relationships with both of her parents. She also expressed the view that her father’s house is “too far” from her mother’s house and from her friends. I think that the Court should give considerable weight to [B’s] views. She is a relatively mature and capable twelve-year old child. However, in considering her views, I think that the Court needs to be mindful of the fact that [B] is a child who would, in my view, find it quite difficult to express anything she perceives as disloyalty to either of her parents. It could be the case, therefore, that her views are merely reflective of protection of the status quo and, from her perspective, least likely to upset either one of her parents. However, I think that her comments with regard to the logistics and geography between the two households have some developmental merit.
Dr V stated:
… I think that [B’s] views reflect a general preference for the status quo which may be influenced by her desire to please each of her parents. However, normal developmental concerns may be influencing her to wish to spend a significant proportion of time in her mother’s household.
In relation to C’s views, Dr V stated:
With respect to [C], I found that he did not have any particularly firmly expressed views about where he lives apart from indicating that he did not wish anything to change. However, despite his linguistic maturity, [C] is a six-year old boy who most hopes for his parents to reconcile. He did not have any particular reasons for saying that he wished for things to “stay the same”; therefore, I think that the Court should consider his views with a degree of caution. In my view, [C] appears to enjoy and benefit from his relationship with each of his parents and have a safe, comfortable and secure attachment relationship with both of them.
Dr V commented that both C and B appear to have “an exceptionally close sibling relationship”.
Dr V observed that B had a “warm, close and secure relationship with her mother”.
In relation to her father, Dr V noted that B “had a close and warm relationship with him. B appeared to be relaxed and comfortable in the presence of her father, found him to be supportive of her and he too appeared to be attuned to B’s developmental and psychological needs.”
In relation to C, Dr V observed that he had:
… a very close, supportive and secure relationship with his mother. He appears to relish in his mother’s attention, regards her as a stable adult and turns to her for support when needed. [The mother] appears to be attentive to [C’s] needs, to have a child-focussed and structured routine in place that supports his development and appears to be loving and warm towards him.
In relation to C’s relationship with his father, Dr V stated “Similarly, I found that [C] had a warm, supportive and close relationship with his father. [C], on observation with me appeared to vie for his father’s attention and sought his affection and approval.”
In relation to the willingness and ability of the parents to facilitate the children’s relationship with the other parent, Dr V stated:
I found that the mother had a generally good capacity to facilitate the children’s close and continuing relationship with their father … In the same manner, I found that the father had a very good capacity to support and facilitate the children’s relationship with their mother. The father positively referenced the mother in front of the children and described her as having positive elements which are child-focussed and appropriate.
Dr V stated:
In general terms, I found that both [B] and [C] had close, secure and supportive attachment relationships with each of their parents. Given their ages and developmental stages, I think that they are well able to tolerate separation from either of their parents without any undue psychological toll. I note that the children have been able to cope with extended holiday separations from either of their parents and neither of them show such anxious or stressed behaviour that indicates that such separations have been psychologically taxing on them.
Dr V found that both of the parents had an excellent capacity to provide for the children’s practical, emotional and intellectual needs.
In relation to the issue of spending time with each parent, Dr V stated:
I think that these children would benefit from spending substantial and significant time with each of their parents. To date, despite some difficulties, the parents have been able to reasonably communicate with one another and to ensure that such an arrangement has been relatively well orchestrated for the children. For example, I noted that [C] felt that either of his parents would assist him if he had forgotten certain items and there was a clear and organised communication with the parents. For example, on the day of these interviews I observed a “hand over” and found that both of the parents had adequately organised the children and the children knew and understood how such a transition would be arranged. On the other hand, each of the children spoke of the practical considerations of having to live across two households. However, I found that the children’s concerns in this regard were within the range of normal and were reasonably well managed by the parents.

Dr V found that the husband was emotionally attuned to the children, organised, motivated and available to the children.
Dr V concluded:
With respect to the specific parenting proposals before the Court I think that great consideration should be given to the children’s time with their father being extended. On the history provided to me, there were times when the father had more care of the children then he currently does, in difficult circumstances. I found that both children enjoyed and benefitted from the relationship they had with the father. They had no concerns about the father’s parenting capacity or his ability to be structured and organised and child-focussed. I also found that the mother had an exemplary parenting style and saw no reason for the children’s time with her to be significantly altered. The children expressed a general preference for the status quo to remain; however, I felt that such views may have been affected by their desire to placate both of their parents. However, B also described some developmental concerns with changing the living arrangements including her desire to be closer to her friends, for her father’s house to be closer to her school and to be able to continue to have some independence. Consequently, I would recommend an arrangement where the children would spend some more time with their father, but perhaps not to the extent of spending a “week about” arrangement with him.
At the time Dr V wrote her report, the children were spending five nights each fortnight with their father. It would seem therefore that her concluding sentence that “An arrangement, for example, where the children spent five nights per fortnight with their father would seem appropriate” does not in fact represent her view and her view would seem to be, as clearly expressed in the preceding sentences, that the children, who currently spend five nights a fortnight with their father, should spend some more time with him although not to the extent of spending equal time.
Since Dr V’s report was issued, some changes have occurred.
The children are now aged 15 years and ten years.
The husband has been diagnosed with metastatic colorectal cancer, has undergone surgery and chemotherapy and been unable to work for a period of time. Although he hopes to be able to resume working in August 2017, his treating oncologist is more cautious.
When the husband resumes employment, he will have each Thursday free.
The husband has moved homes and his present residence is 50 metres from B’s school.
The wife has almost completed a course of tertiary study and she will be in a position to commence employment in 2018. In her affidavit sworn 17 February 2017 she deposed:
In the event that I work full-time, I will have to arrange additional care arrangements for [C] through paid after school care services, which run until 6pm. I may also need to employ the services of an au pair to help get the children from school and to extra-curricular activities in the afternoons. When [C] enters high school in 2020 I intend to move and rent closer to his school in the [Suburb F] area so the Children can either walk to school or catch a school bus.
It is not in dispute that the parents will have equal shared parental responsibility for the children and that the children will spend half of each school holiday period with each parent.
Each party sought specific orders in relation to special occasions and ancillary matters. Neither addressed any submissions to the differences in their respective proposals.
Both parents accept that it is in the children’s best interests to have a meaningful relationship with each of their parents and there are no concerns about child protection.
The views of the children in 2014 were canvassed and considered by Dr V. In an affidavit sworn on 16 June 2017, the husband deposed that he recently had a conversation with C where the child asked why he only sees his father on Tuesday. C told his father that he would like to spend more time with him. B, asked if she would like to spend more time with her father, said “I don’t know”.
Dr V observed and commented on the very close and loving relationships of the children with each of their parents.
The husband has consistently sought more time with the children and the wife has consistently opposed more time.
The husband has paid child support in accordance with each relevant assessment.
The changes which are sought by the husband are not wholly supported by Dr V although she supported the children spending more time with their father.
The regime the husband proposes would see the children live with him in the first of each two week cycle, from after school on Wednesday until Friday morning (2 nights) and in the second week, from after school on Tuesday until Thursday morning (2 nights) and then from after school on Friday until Monday morning (3 nights). They would then live with their mother on Monday night and Tuesday night before returning to their father on Wednesday to re-commence the cycle.
The children are long accustomed to spending Tuesday nights with their father. When he is working, he has Thursdays free and would be available to care for the children after school.
The parents live in fairly close proximity and there is no practical difficulty in the children travelling between their respective homes.
I accept the evidence of Dr V that each parent is currently well able to provide for the children’s emotional and intellectual needs. I also accept the criticism of the wife contained in Dr V’s report in relation to her decision to introduce her new partner into the family home at a time when she and the husband and the children were all living there. Dr V stated:
The decision on behalf of the mother to move her new partner into the former family home whilst the father and children were still living there strikes me as extraordinarily insensitive to the children. This had occurred at a time where the children appeared to only be marginally coping with their parents’ separation. In addition, this continued to expose the children to chronic and extraordinarily high levels of conflict between the three adults who were living in the household.
Such was the level of tension that the police were called to the home in June 2013. The record of the event created by the police is attached to the husband’s affidavit and suggests that the wife and her partner were both affected by alcohol and entered the husband’s bedroom where he was listening to music and confronted him. The police record states that the wife’s partner was asked by them to leave the home and not return and he argued with the police, swore at them, shouted and refused to leave. Unfortunately, the children were present in the house when the incident occurred and B saw what happened. After that incident, the husband decided to move out of the house so as to avoid further conflict.
That situation is an example of very poor decision making by the wife, albeit four years ago, and of the husband taking steps to protect the children.
The wife’s willingness to promote the children’s relationship with their father, is not as apparent as Dr V observed, and gives rise to some concern. She unilaterally reduced their time with him in 2012 and again in November 2013. She has steadfastly opposed any increase in their time with him, despite Dr V’s clear recommendation made in June 2014. She has refused to allow the children to travel with him to Country D to visit their Country D grandmother and extended family.
It is not likely, that absent intervention by the Court, there will be any increase in the children’s time with their father instigated by their mother.
I accept Dr V’s recommendation that the children spend more time with their father.
The concerns that B expressed in her discussions with Dr V about the distance her father lived from her school have been addressed by his moving very close to the school. B has told her father that she loves the new unit and her new bedroom and she can get to school “in 20 seconds now”.
B’s concerns about frequent changes can be addressed by changing the configuration of the time the children spend with each parent.
If the husband’s health does not improve as he optimistically expects, then there may come a time when he is unable to care for them and it is important that they spend time with him while he is well and available to them.
Additionally, by caring for the children during school time, the husband will be sharing the burden of after school care for C and relieve the anticipated expense to the wife of paying for after school care for C on those days.
The Orders will provide for the children to live with their father each alternate Wednesday from after school until Thursday morning and, in the alternate week, from Wednesday after school until Monday morning.
I accept that this arrangement was not proposed by either parent but it addresses the need for the children to spend more time with their father and minimises the changeovers for the children.
I have given careful consideration to the husband’s application for equal time. I accept the evidence of Dr V that such an order is not appropriate. The Orders which I will make will provide for the children to have a substantial block of time with each parent.

ANCILLARY ISSUES

Each of the parents sought orders in relation to special occasions, the configuration of holiday time and the like. No submissions were directed to those issues and no attempt was made to address the differences between their respective positions.
In relation to the short school holidays, the wife sought orders that the husband have the first half in even numbered years and the husband sought orders that he have the first half in odd numbered years. I was not directed to any evidence in support of either proposition. Common sense would suggest that if the children have lived with their mother for the last week of the school term, they should spend the first half of the holidays with their father.
School holidays commence at 9.00 am on the first day after the last school day and end at 6.00 pm on the last day before the children attend school in the following term. Changeover is to occur at midday on the mid-point of the holidays.
There is a similar dispute in relation to the Christmas period. The wife seeks orders that the children spend Christmas Eve and Christmas morning with their father in even numbered years and the husband asking for odd numbered years. Again I was not directed to any evidence about that issue. Similarly they seek different orders about the configuration of the Christmas holidays.
The Orders will provide for the children to spend the first half of the Christmas holidays with their mother in odd numbered years and with their father in even numbered years. When the children are with their mother for the first half of the holidays, they will spend Christmas Eve and Christmas morning with their father. When they are with their father for the first half of the holidays, they will spend Christmas Eve and Christmas morning with their mother.
I do not propose to make any orders in relation to New Year’s Eve or Easter if the Easter period falls within a school holiday. If the Easter period falls during school term, then the term time arrangements will continue.
The husband and wife seek different orders in relation to the children’s birthdays and their own birthdays. Again I was not directed to any evidence and no submissions were made. The Orders will provide for the children to spend time with the parent with whom they are not living on each of those days.
The children should spend Mothers’ Day and time on their mother’s birthday with their mother, and Fathers’ Day and time on their father’s birthday with their father.
Where possible, changeovers will occur at school. If other arrangements need to be made, the wife will deliver the children to their father at the beginning of their time with him and he will return them to her at the end of their time with him.

PROPERTY

As will be apparent from the narrative at the commencement of these Reasons, there is little factual dispute between the parties.
The factual matters in respect to which they disagree appear to be:
·    What is the interest of the husband in the property in Country D?
·    How should the interest of the husband in the property in Country D be treated?
·    Should the payments of $100,000 paid to each of the parties by way of partial property settlement in September 2013 be added back?
·    Should the sum of $65,000 paid to the husband by way of interim property settlement in July 2016 be added back?
·    Should the wife’s credit card debts in 2012 be included as liabilities for the purpose of the proceedings?
·    How should the capital gains tax liability on Suburb U be treated?

What is the interest of the husband in property in Country D?

There is agreement as to the current value of the property. The parties disagree only on the quantum of the husband’s interest.
The husband’s mother was the owner of residential property in J Town, Country D. In 1999 she gave an interest in that property to the husband and to his brother. In his affidavit sworn 19 September 2016, the husband deposed that his interest in J Town was 30 per cent. In his oral evidence, the husband sought to correct that statement. He said that the initial gift from his mother was of a 20 per cent interest in J Town to each of him and his brother and that his mother retained 60 per cent of the property. He anticipated that, on the death of his mother, her 60 per cent interest would be left to be divided between him and his three siblings and that he would receive a further 10 per cent, giving him a 30 per cent share in J Town.
The husband said that his interest in J Town at the present time was 20 per cent. I accept that evidence.
The value of the husband’s interest in J Town is AUD $171,000.

How should the interest of the husband in property in Country D be treated?

The wife sought to have the husband’s interest in J Town treated as an asset for the purpose of the proceedings. The husband submitted that his interest in J Town was a financial resource.
The interest was a gift from the husband’s mother. Neither the husband nor the wife has ever made any contribution to the costs of the property which is maintained solely by the husband’s mother and which is her residence.
The husband receives no benefit from his ownership and will not receive any benefit during his mother’s lifetime.
If the husband’s interest in J Town is to be included as an asset in the Balance Sheet, there would need to be a significant discount given to its value to take into account the fact that it is of no present value to the husband and its value to him may not be realised for some time.
The safer course would be to treat the interest as a financial resource.

Should the payments of $100,000 paid to each of the parties by way of partial property settlement in September 2013 be added back?

On 2 September 2013, Orders were made which provided for the sum of $100,000 from the eventual settlement of the sale of Suburb T to be released to each of the parties by way of interim property settlement.
The wife deposed that she has spent the whole of that amount on a combination of legal fees, living expenses, rent, health insurance and school fees. Her evidence in relation to that expenditure was not challenged.
The husband does not specifically state how he used his partial property settlement. However, no questions were put to him in cross-examination about his use of the funds and it appeared to have been accepted that he also used those funds to pay living expenses and other commitments.
The money paid to each of the parties by way of interim property settlement was theirs to spend as they wished. No reasons were advanced by either party in support of adding back the amounts and there appears to be no utility in doing so.

Should the sum of $65,000 paid to the husband by way of interim property settlement in July 2016 be added back?

On the first day of the trial in July 2016, the parties agreed that a sum of $65,000 would be paid to the husband from the proceeds of sale of Suburb T. The husband deposed that those funds were used to pay an outstanding tax debt which arose from an audit together with credit card debts.
The husband’s evidence in relation to those payments was not challenged.
I accept that the sum of $65,000 was used to pay debts attributable to the marriage and should not be added back.

Should the wife’s credit card debts in 2012 be included as liabilities for the purpose of the proceedings?

The rationale of adding back this amount was not explained. The debt was paid, either from funds advanced by way of interim property settlement or from funds drawn from the mortgage over Suburb T.
There is no basis for adding back those amounts.

Should the amount received by the wife from her mother’s estate be added back?

The wife received $431,445 from the estate of her late mother in 2014. It is her evidence that she has spent almost the whole of that amount on a combination of legal fees and living expenses for herself and the two children.
At the date of the hearing, she had retained some $31,000 in cash and shares.
No challenge was made to the wife’s evidence about how the money was spent.
The basis of the husband’s contention that the full amount should be added back appeared to be his contention that the money was spent profligately having regard to the family’s financial position, and in circumstances where the wife chose full time study over earning an income.
Whilst that may be a matter to be considered in determining the weight to be given to the contribution of the inheritance, it does not justify adding back the full sum.

How should the capital gains tax liability on Suburb U be treated?

Suburb U was purchased as an investment. It has been rented and there is no dispute that capital gains tax will have to be paid on its sale. However, the husband gave evidence that he does not intend to sell the property but will keep it as an investment and eventually pass it on to the children.
The husband provided a calculation of the capital gains tax which would be payable if Suburb U were sold at the present time. The amount payable would be $49,581. However, he has no intention to sell.
The Full Court in Rosati v Rosati (1998) FLC 92-804 stated the approach to be adopted in such instances as follows:
6.36 It appears to us that although there is a degree of confusion, and possibly conflict, in the reported cases as to the proper approach to be adopted by a court in proceedings under s 79 of the Act in relation to the effect of potential capital gains tax, which would be payable upon the sale of an asset, the following general principles may be said to emerge from those cases:–
(1) Whether the incidence of capital gains tax should be taken into account in valuing a particular asset varies according to the circumstances of the case, including the method of valuation applied to the particular asset, the likelihood or otherwise of that asset being realised in the foreseeable future, the circumstances of its acquisition and the evidence of the parties as to their intentions in relation to that asset.
(2) If the Court orders the sale of an asset, or is satisfied that a sale of it is inevitable, or would probably occur in the near future, or if the asset is one which was acquired solely as an investment and with a view to its ultimate sale for profit, then, generally, allowance should be made for any capital gains tax payable upon such a sale in determining the value of that asset for the purpose of the proceedings.
(3) If none of the circumstances referred to in (2) applies to a particular asset, but the Court is satisfied that there is a significant risk that the asset will have to be sold in the short to mid term, then the Court, whilst not making allowance for the capital gains tax payable on such a sale in determining the value of the asset, may take that risk into account as a relevant s 75(2) factor, the weight to be attributed to that factor varying according to the degree of the risk and the length of the period within which the sale may occur.
(4) There may be special circumstances in a particular case which, despite the absence of any certainty or even likelihood of a sale of an asset in the foreseeable future, make it appropriate to take the incidence of capital gains tax into account in valuing that asset. In such a case, it may be appropriate to take the capital gains tax into account at its full rate, or at some discounted rate, having regard to the degree of risk of a sale occurring and/or the length of time which is likely to elapse before that occurs.

The preferable course, in circumstances where the sale of Suburb U will not take place in the near or mid-term, is to take account of the imposition of capital gains tax as a section 75(2), of the Family Law Act 1975 (Cth) (“the Act”), consideration.

THE BALANCE SHEET

At the commencement of submissions, the parties tendered a joint Balance Sheet, setting out the matters upon which they agreed and disagreed.
That Balance Sheet is reproduced below.
I will deal with the remaining issues raised by the Balance Sheet using the item numbers used in the Balance Sheet.

Ownership		Description	Wife / de facto partner’s value	Husband / de facto partner’s value
ASSETS
1.	J	ANZ Business Premium Saver Account #...78 ($1,423,539.56) and ANZ Term Deposit Account #...46 ($86,444.10)	$ 1,527,019	$ 1,527,019
2.	H	W Street, Suburb U	$ 680,000	$ 680,000
3.	H	J Town	$ 251,700	$
4.	W	NAB Classic Savings (#...93) (as at 08.06.17)	$ 893	$ 893
5.	W	NAB iSaver Account (#…69) (as at 08.06.17)	$ 5,057	$ 5,057
6.	W	CBA Business Transaction (#...64) (as at 30.04.17)	$ 20,009	$ 20,029
7.	W	NIB Holdings Shares (800 shares) (as at 28.04.17)	$ 4,800	$ 4,800
8.	H	NAB Savings (#...12) (as at 19.05.17)	$ 1,546	$ 1,546
9.	H	ANZ Savings (#...87) (as at 28.04.17)	$ 3,563	$ 3,563
10.	H	Motor vehicle 1 (as at 22.05.17)	$ 9,900	$ 9,900
11.	W	Motor vehicle 2 (as at 02.05.17)	$ 10,680	$ 10,680
12.	H	Artwork and Wine	$ 24,000	$ 24,000
13.	H	Furniture and Effects	$ 2,700	$ 2,700
14.	W	Furniture and Effects	$ 9,000	$ 9,000

Total

$ 2,550,867

$ 2,299,187

ADD BACKS
15.	H	Proceeds of Sale (April 2014)	$ 100,000	$ 100,000
16.	W	Proceeds of Sale (April 2014)	$ 100,000	$ 100,000
17.	H	Partial property settlement (29 July 2016)	$ 65,000	$ 65,000
18.	W	Mother’s Estate	$	$ 431,445
19.	W	Wife credit card debt September 2012	$	$ 30,000
20.	W	Wife contribution to ATO debt	$	$ 6,110
21.	W	Wife contribution to J Town Valuation	$	$ 941

Total

$ 265,000

$ 733,496

LIABILITIES
22.	H	ANZ Investment Loan (Suburb U) (as at 29.12.16)	$ 354,572	$ 354,572
23.	H	NAB Visa (#...75) (as at 15.05.17)	$ 12,857	$ 12,857
24.	H	NAB Visa (#...37) (as at 22.05.17)	$ 6,879	$ 6,879
25.	H	Citibank (#...78) (as at 15.05.17)	$ 20,459	$ 20,459
26.	H	AMEX (#...01) (as at 21.05.17)	$ 8,552	$ 8,552
27.	H	Coles Mastercard (#...06) (as at 03.05.17)	$ 10,890	$ 10,890
28.	H	Esanda Car Loan (as at 11.05.17)	$ 8,205	$ 8,205
29.	W	Fee Help Loan (as at 21.05.17)	$ E49,538	$ 49,538
30.	H	Strata and Council (Suburb U)	$ 0	$ 1,116
31.	W	NAB Visa (…69) (as at 08.06.17)	$ 10,360	$ 10,360
32.	W	AMEX (…01) (as at 18.04.17)	$ 10,272	$ 10,272
33.	W	Tax Debt (mother’s estate)	$ E22,000	$ 22,000
34.	H	Tax Debt (as at 30.06.2016)	$ 3,535	$ 3,535

Total

$ 518,119

$ 519,235

SUPERANNUATION
Member		Name of Fund	Type of Interest	Wife / de facto partner’s value	Husband / de facto partner’s value
35.	H	Super (as at 30.06.16)	Accumulation	$ 111,907	$ 111,907
36.	W	Host Super	Accumulation	$ 40,018	$ 40,018

Total

$ 151,925

FINANCIAL RESOURCES
37.	H	J Town	$ 0	$ 171,000

Items 3 and 37 – the husband’s interest in J Town
As has been explained earlier in these reasons, this interest will be dealt with as a financial resource.
Items 15, 16 and 17 – add backs of partial distributions
As has been explained earlier in these reasons, these amounts will not be added back.
Item 18 – the wife’s mother’s estate
As has been explained earlier in these reasons, this amount will not be added back.
Item 19 – the wife’s credit card debt
As has been explained earlier in these reasons, this amount will not be added back.
Item 20 – wife’s contribution to the tax debt
The tax debt was paid in full from the partial property settlement of $65,000 paid to the husband in 2016 from the proceeds of sale of Suburb T. Those funds have not been added back and there is therefore no basis to add back the wife’s share of the tax liability.
Item 21 – the wife’s share of the valuation of the Country D property
The husband has paid the whole amount of the valuation. He submits that the wife should reimburse him for half of the amount. On behalf of the wife it was submitted that, because she has paid legal fees and the husband has not, he should bear the full cost of the valuation. There is no logic in the wife’s position. It was necessary for the property to be valued for the purpose of the proceedings. The wife should bear half of the cost. However, to include the debt as a liability of the parties reduces the asset pool with the effect that the husband shares the liability. The more appropriate course of action is to order that the liability be paid from the monies due to the wife before distribution.
Item 30 – strata and council fees for Suburb U
No submissions were directed to this item. The husband was not cross‑examined about the amount which has been reduced from the sum of $3,388 which was owed when the husband swore his Financial Statement on 19 September 2016. The liability will be allowed.
Item 33 – tax debt of the wife’s mother’s estate
On behalf of the wife, it was conceded that there was no evidence of this liability.
Item 6 – the wife’s CBA Business Transaction accounts
There is a nominal difference of $20 in the value asserted by the wife and the husband in relation to the wife’s CBA Business Transaction account. I propose to adopt the wife’s value.
I therefore find the assets, liabilities and financial resources of the parties, for the purpose of these proceedings, to be:
ASSETS

1. J ANZ Business Premium Saver Account #...78 ($1,423,539.56) and ANZ Term Deposit Account #...46 ($86,444.10) $       1,527,019

2. H W Street, Suburb U $        680,000

3. W NAB Classic Savings (#...93)
(as at 08.06.17) $             893

4. W NAB iSaver Account (…69) (as at 08.06.17) $            5,057

5. W CBA Business Transaction (#...64) (as at 30.04.17) $          20,009

6. W NIB Holdings Shares (800 shares) (as at 28.04.17) $            4,800

7. H NAB Savings (#...12) (as at 19.05.17) $            1,546

8. H ANZ Savings (#...87) (as at 28.04.17) $            3,563

9. H Motor vehicle 1 (as at 22.05.17) $            9,900

10. W Motor vehicle 2 (as at 02.05.17) $          10,680

11. H Artwork and Wine $          24,000

12. H Furniture and Effects $            2,700

13. W Furniture and Effects $            9,000

Total $     2,299,167
LIABILITIES

14. H ANZ Investment Loan (Suburb U) (as at 29.12.16) $        354,572

15. H NAB Visa (#...75) (as at 15.05.17) $          12,857

16. H NAB Visa (#...37) (as at 22.05.17) $            6,879

17. H Citibank (#...78) (as at 15.05.17) $           20,459

18. H AMEX (#...01) (as at 21.05.17) $             8,552

19. H Coles Mastercard (#...06) (as at 03.05.17) $           10,890

20. H Esanda Car Loan (as at 11.05.17) $          8,205

21. W Fee Help Loan (as at 21.05.17) $          49,538

22. H Strata and Council (Suburb U) $            1,116

23. W NAB Visa (…69) (as at 08.06.17) $           10,360

24. W AMEX (…01) (as at 18.04.17) $           10,272

25. H Tax Debt (as at 30.06.2016) $            3,535

Total $       497,235
SUPERANNUATION

26. H Super (as at 30.06.16) Accumulation $        111,907

27. W Host Super Accumulation $          40,018

Total $        151,925

FINANCIAL RESOURCES

38. H J Town $171,000

Thus the parties have net assets of $1,801,932, not including superannuation. Of this sum, the wife has in her sole possession assets totalling $50,439 and she has liabilities of $70,170, leaving her with net liabilities of $19,731.

SECTION 79(2) of the Act

The substantial asset of these parties is the proceeds of sale of their former matrimonial home at Suburb T which was jointly owned.
They both seek an adjustment of their assets.
It would not be just and equitable, having regard to the much greater contribution on behalf of the husband, to make no adjustment to their legal entitlements.

CONTRIBUTION

The husband had some $60,000 at the commencement of the parties’ cohabitation. The wife had no significant assets.
The husband worked throughout the relationship until late 2016 when he was diagnosed with metastatic colorectal cancer, had surgery, commenced chemotherapy and was unable to continue to work.
The wife worked full time until the birth of B but thereafter she was primarily engaged as the carer for the children and largely worked part time until 2012 when she was retrenched. She then elected to engage in a course of tertiary study and not to earn any income from employment for the next four years.
During the relationship, the properties at Suburb T and at Suburb U were renovated. Both of the parties made physical contributions to the renovations.
After separation, the husband solely maintained Suburb U and paid the shortfall between rent and outgoings.
Annexed to the husband’s affidavit were market appraisals of Suburb U at separation and at trial. No objection was taken to those appraisals. The value of Suburb U has increased by some $170,000 since separation.
The husband deposed that the value of his superannuation interest at separation was $48,411 and that value has risen to $111,907 as a result of his contributions after separation.
Both parties made significant contributions from their own efforts. The wife made a contribution as home maker and parent and a lesser contribution by way of income. The husband made the greater contribution of income and a lesser contribution than the wife as home maker and parent. Those contributions should be assessed as equal.
There have been three other sources of financial contribution (apart from earnings).
The wife received a redundancy payment of $28,448 in 2012 which is referable entirely to employment undertaken during the course of the marriage. No adjustment should be made for that contribution.
The husband’s parents (then later the husband’s mother after the death of the husband’s father) made very significant financial contributions which enabled the parties to acquire and renovate their Suburb T home, of which the proceeds of sale are the parties’ major asset. The husband’s evidence in relation to those contributions by his mother was not challenged. She made the following gifts to the husband:
·    Cash transfers totalling $1,558,188 between 1999 and 2009;
·    Cash transfer of $100,000 after separation in about 2012;
·    A portfolio of shares valued at their transfer in 2003 at 157,659 Euros (there is no evidence of the relevant exchange rate in 2003 but, at present rates, the share portfolio would have been worth about $230,000);
·    An etching valued at $18,000 in 2002.
In an asset pool of some $1.8 million, this contribution, which exceeds the present day value of the asset pool, must be given significant value.
The wife received an inheritance from her late mother of $431,445 in 2014. The money was received some four years after separation. All of the funds were retained by the wife and used by her for living expenses and, inter alia, for the payment of legal fees.
On behalf of the wife, it was submitted that the contribution of the inheritance should be given full weight as a post-separation contribution and that contributions should, in consequence, be assessed in favour of the husband at 65 or 70 per cent.
The weight to be given to the contribution of the wife’s inheritance must be tempered by the manner in which the money was used. The wife has deposed to paying some $190,000 in legal fees. It is not possible to determine what proportion of the legal fees was paid from her inheritance and what proportion was paid from the interim property settlement.
The husband did not contend that the money paid by the wife in legal fees should be added back to the pool although that argument may have been available to him.
If the wife’s mother had given her a sum of money to pay her legal fees, then both the gift and the paid legal fees would have been ignored for the purpose of the Balance Sheet. In my view, this is the preferable analogy.
Insofar as the wife used her inheritance to pay her legal fees, that money was not contributed to the welfare of the family and no weight should be given to that portion of the contribution of the inheritance. Because there was no specific evidence of the amount of legal fees paid from the inheritance, I can do no more than give lesser weight to that contribution.
I accept the submission of counsel for the wife that, if full weight were given to the wife’s inheritance, contributions could be assessed at 70 per cent to the husband. Because I cannot attribute full weight to the wife’s inheritance, I propose to attribute 72 per cent to the husband for contributions.

SECTION 75(2) of the Act

Counsel for the wife contended for an adjustment in her favour of 10 per cent.
On behalf of the wife it was submitted that the wife is younger that the husband, that she earns significantly less than he does; that his earning capacity is greater than hers; that she has paid a greater share of the children’s expenses and that she will have the primary care of the children.
The wife is 44 years old and the husband is 50 years old. Their relative earning capacities need to be examined.
The husband has been a manager with the same company for most of the marriage. He deposed that he earned approximately $68,300 per annum in his Financial Statement sworn 19 September 2016. Since November 2016, when he was diagnosed with cancer, he has not been able to work and has been in receipt of Centrelink benefits. Although he hopes to be able to resume working in August 2017, his doctor has more cautiously estimated that he may not be able to work for 12 to 24 months. When he resumes his employment, he will earn the same amount as he did previously.
Thus, the husband’s future earning capacity has some uncertainty due to his health.
The wife deposed that she will complete her tertiary studies at the end of 2017 and expects to work. She deposed that, working full-time, she could earn $60,000 per annum. The wife, in her affidavit sworn on 17 February 2017, deposed:
97. … As I will be working part-time, I am likely to earn approximately $40,000 per annum. Subject to the terms of my property settlement with [the husband], I will be unable to support myself and the Children on this income.
98. Once I obtain full-time employment, I do not expect this to affect my care of the children.
The wife gave no evidence to explain why she would not commence full time work immediately if she was able to do so, or why she will not be earning $60,000 per annum from the beginning of 2018.
If the husband is able to resume work from the beginning of 2018, he will earn about $8,000 per annum more than the wife.
She is six years younger than he and thus has a longer working expectancy.
In relation to the children’s expenses, the husband has paid child support as assessed.
The husband has more superannuation than the wife but the difference is not great, some $71,000. She, being six years younger than he is, will have more time than he to contribute to superannuation in the future. His ability to make future contributions to superannuation will be dependent on his health and whether he is able to return to work and, if so, for what period of time.
As a result of the parenting orders which will be made, the children will spend eight nights each fortnight with the wife and six nights with the husband. Each will have the responsibility to house the children. The husband will continue to pay child support as assessed.
If those were the only matters to be taken into account, a minimal adjustment, if any, would be appropriate.
However, I also take into account the husband’s financial resource represented by his interest in the property in Country D and the fact that the husband has a greater entitlement to superannuation than the wife. Mitigated against those entitlements is the fact that the husband’s superannuation entitlements were largely accrued post-separation, and the fact that he will have to pay capital gains tax when he ultimately disposes of Suburb U.
Taking all of those matters into account, I propose to make an adjustment of 5 per cent in favour of the wife so that she will receive 33 per cent of the asset pool and the husband 67 per cent.
The net asset pool is $1,801,932. Of this sum, the wife has possession of assets totalling $50,439 and she has liabilities of $70,170, leaving her with net liabilities of $19,731. In order to receive 33 per cent, she will receive, from the proceeds of sale of the former matrimonial home, $614,369. From the amount due to her, she will pay $941 to the husband for her share of the valuation of the Country D property, leaving her with an amount of $613,428.

THE PAYMENT OF THE BOND FOR THE CHILDREN’S TRAVEL

Orders were made on 20 June 2017 permitting the children to travel to Country D with the husband leaving on 1 July 2017 and leaving Country D to return to Australia on 16 July 2017 at 9.50 pm. They will arrive in Australia at about 6.30 am on 18 July 2017.
The husband offered, as a condition of the children’s travel, to lodge a bond of $10,000 to be held by the wife’s solicitors pending the return of the children.
The bond will be paid from the husband’s share of the funds held in the ANZ bank account #...78 being the proceeds of sale of the former matrimonial home.

CHILD SUPPORT

The wife seeks a child support departure order, pursuant to s 117 of the Child Support (Assessment) Act 1989 (Cth) (“CS(A)A”), in the sum of $1,408 per month for each child until the husband is no longer liable to pay.
The relevant provisions of s 117 of the CS(A)A are set out below:

CHILD SUPPORT (ASSESSMENT) ACT 1989 - SECT 117

Matters as to which court must be satisfied before making order

Court may make departure order
(1) 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 to child support and the liable parent; and
(B) otherwise proper;
to make a particular order under this Division;

the court may make the order.

Grounds for departure order
(2) For the purposes of subparagraph (1)(b)(i), the grounds for departure are as follows:
(a) that, in the special circumstances of the case, the capacity of either parent to provide financial support for the child is significantly reduced because of:

(i) the duty of the parent to maintain any other child or another person; or
(ii) special needs of any other child or another person that the parent has a duty to maintain; or
(iii) commitments of the parent necessary to enable the parent to support:
(A) himself or herself; or
(B) any other child or another person that the parent has a duty to maintain; or

(iv) high costs involved in enabling a parent to spend time with, or communicate with, any other child or another person that the parent has a duty to maintain;

(aa) that, in the special circumstances of the case, the capacity of either parent to provide financial support for the child is significantly reduced because of the responsibility of the parent to maintain a resident child of the parent (see subsection (10));
(b) that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:
(i) because of high costs involved in enabling a parent to spend time with, or communicate with, the child; or
(ia) because of special needs of the child; or
(ib) because of high child care costs in relation to the child; or
(ii) because the child is being cared for, educated or trained in the manner that was expected by his or her parents;

(c) that, in the special circumstances of the case, application in relation to the child of the provisions of this 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:
(i) because of the income, earning capacity, property and financial resources of the child; or
(ia) because of the income, property and financial resources of either parent; or
(ib) because of the earning capacity of either parent; or
(ii) because of any payments, and any transfer or settlement of property, made or to be made (whether under this Act, the Family Law Act 1975 or otherwise) by the liable parent to the child, to the carer entitled to child support or to any other person for the benefit of the child.

High costs involved in enabling parent to care for a child
(2B) A parent's costs involved in enabling the parent to care for a child can only be high for the purposes of subparagraph (2)(a)(iv) or (2)(b)(i) if the costs that have been or will be incurred, during a child support period, total more than 5% of the amount worked out by:
(a) dividing the parent's adjusted taxable income for the period by 365; and
(b) multiplying the quotient by the number of days in the period.

(2C) If a parent has at least regular care of a child, then the only costs that can be taken into account for the purposes of subsection (2B) are costs related to travel to enable the parent to spend time with, or communicate with, the child.
High child care costs
(3A) The ground for departure mentioned in subparagraph (2)(b)(ib) is taken not to exist unless:
(a) the costs are incurred by a parent or a non-parent carer; and
(b) the child is younger than 12 at the start of the child support period.

(3B) Child care costs for a parent can only be high for the purposes of subparagraph (2)(b)(ib) if, during a child support period, they total more than 5% of the amount worked out by:
(a) dividing the parent's adjusted taxable income for the period by 365; and
(b) multiplying the quotient by the number of days in the period.

(3C) Child care costs for a non-parent carer can only be high for the purposes of subparagraph (2)(b)(ib) if, during a child support period, they total at least 25% of the costs of the child for that period.
Matters to consider for purposes of subparagraph (1)(b)(ii)
(4) In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:
(a) the nature of the duty of a parent to maintain a child (as stated in section 3); and
(b) the proper needs of the child; and
(c) the income, earning capacity, property and financial resources of the child; and
(d) the income, property and financial resources of each parent who is a party to the proceeding; and
(da) the earning capacity of each parent who is a party to the proceeding; and
(e) the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i) himself or herself; or
(ii) any other child or another person that the person has a duty to maintain; and

(f) the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(g) any hardship that would be caused:
(i) to:
(A) the child; or
(B) the carer entitled to child support;
by the making of, or the refusal to make, the order; and

(ii) to:
(A) the liable parent; or
(B) any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order; and

(iii) to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.

(5) In determining whether it would be otherwise proper to make a particular order under this Division, the court must have regard to:
(a) the nature of the duty of a parent to maintain a child (as stated in section 3) and, in particular, the fact that it is the parents of a child themselves who have the primary duty to maintain the child; and
(b) the effect that the making of the order would have on:
(i) any entitlement of the child, or the carer entitled to child support, to an income tested pension, allowance or benefit; or
(ii) the rate of any income tested pension, allowance or benefit payable to the child or the carer entitled to child support.

Proper needs of the child
(6) In having regard to the proper needs of the child, the court must have regard to:
(a) the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained; and
(b) any special needs of the child.

Income, earning capacity, property and financial resources
(7) In having regard to the income, earning capacity, property and financial resources of the child, the court must:
(a) have regard to the capacity of the child to earn or derive income, including any assets of, under the control of, or held for the benefit of, the child that do not produce, but are capable of producing, income; and
(b) disregard:
(i) the income, earning capacity, property and financial resources of any person who does not have a duty to maintain the child, or who has such a duty but is not a party to the proceeding, unless, in the special circumstances of the case, the court considers that it is appropriate to have regard to them; and
(ii) any entitlement of the child or the carer entitled to child support to an income tested pension, allowance or benefit.

(7A) In having regard to the income, property and financial resources of a parent of the child, the court must:
(a) have regard to the capacity of the parent to derive income, including any assets of, under the control of, or held for the benefit of, the parent that do not produce, but are capable of producing, income; and
(b) disregard:
(i) the income, earning capacity, property and financial resources of any person who does not have a duty to maintain the child, or who has such a duty but is not a party to the proceeding, unless, in the special circumstances of the case, the court considers that it is appropriate to have regard to them; and
(ii) any entitlement of the child or the carer entitled to child support to an income tested pension, allowance or benefit.

(7B) In having regard to the earning capacity of a parent of the child, the court may determine that the parent's earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied that:
(a) one or more of the following applies:
(i) the parent does not work despite ample opportunity to do so;
(ii) the parent has reduced the number of hours per week of his or her employment or other work below the normal number of hours per week that constitutes full-time work for the occupation or industry in which the parent is employed or otherwise engaged;
(iii) the parent has changed his or her occupation, industry or working pattern; and

(b) the parent's decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern, is not justified on the basis of:
(i) the parent's caring responsibilities; or
(ii) the parent's state of health; and

(c) the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child.

Direct and indirect costs in providing care
(8) In having regard to the direct and indirect costs incurred by the carer entitled to child support in providing care for the child, the court must have regard to the income and earning capacity foregone by the carer entitled to child support in providing that care.
Subsections not to limit consideration of other matters
(9) Subsections (4) to (8) (inclusive) do not limit other matters to which the court may have regard.
(Emphasis added)

Counsel for the wife indicated that she relied upon sub-sections (2)(b)(ii), (2)(c)(ia) and (2)(c)(ib), of the CS(A)A, which have been emphasised.
The Court must be satisfied as to a number of matters:
a)That there are “special circumstances”. Each relevant sub-section of s 117 of the CS(A)A is prefaced by the words “that, in the special circumstances of the case…” In In the Marriage of Gyselman (1992) FLC 92-279, the Full Court stated:
Whilst it is not possible to define with precision the meaning of that term, as a generality it is intended to emphasize that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the Court will not interfere with the administrative formula result in the ordinary run of cases.
b)That one or more grounds for departure exists.
c)That it would be just and equitable as regards the child, the payer and the payee to depart from the assessment.
d)That it would be otherwise proper to depart from the assessment.

HAS A GROUND FOR DEPARTURE BEEN ESTABLISHED?

That, in the special circumstances of the case, the costs of maintaining the child are significantly affected because the child is being cared for, educated or trained in the manner that was expected by his or her parents (s 117(2)(b)(ii) of the CS(A)A)

The first ground for departure relied upon is that, in the special circumstances of the case, the costs of maintaining the child are significantly affected because the child is being cared for, educated or trained in the manner that was expected by his or her parents (sub-section 117(2)(b)(ii) of the CS(A)A).
This is not a case where the dispute relates to the cost of the children attending private schools. Both of the children attend local public schools.
It is not clear on what basis the wife asserts that the manner in which the children are cared for has significantly affected the cost of their care. In her Financial Statement sworn 17 February 2017, the wife deposes to Part N expenses for the two children of $650 per week which includes an unexplained expense of $100 per week for “Repairs – furnishings and appliances” which I do not propose to take into account. The wife does not break down the children’s expenses so that the amount referable to each child can be discerned. Accordingly, I assume the cost of the reasonable discretionary expenses of each child is $275 per week.
The cost of the care of the children is modest and the ground in subsection 117(2)(b)(ii) of the CS(A)A has not been made out.

That, in the special circumstances of the case, application in relation to the child of the provisions of the CS(A)A 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 because of the income, property and financial resources of either parent (s 117(2)(c)(ia) of the CS(A)A).

The next ground upon which the wife relies is contained in sub-section 117(2)(c)(ia) of the CS(A)A.
Since the income of the parents is dealt with in the third ground, I will assume that the wife here relies upon the disparity in the assets and resources of the parents.
As a result of the orders for property settlement which will be made, the wife will have cash of $613,428 from the sale of the former matrimonial home together with her bank accounts, shares and personal effects of modest value. The husband will have cash of about $919,700 which includes the money he will receive from the proceeds of sale of the former matrimonial home, and his small bank accounts. He will also have personal effects of modest value.
The husband will retain the investment property at Suburb U. However, that property does not produce sufficient income to pay its outgoings and the husband is required to subsidise its expenses. He has done so since he has been unable to work from credit and will, I assume, continue to do so from capital.
The proceedings were conducted on behalf of the wife on the basis that the husband would retain Suburb U. In considering what orders should be made for the division of property, I acceded to the submission made by counsel for the wife that the capital gains tax liability which would arise on the sale of Suburb U should not be included as a liability because the evidence of the husband was that he had no intention of selling Suburb U. Although it was not specifically argued on behalf of the wife that the husband should sell Suburb U in order to pay child support, that submission could not have been available to her, having regard to the submissions made in relation to property.
I do not accept that a discrepancy between the cash assets of the parents of $305,272 is a sufficient discrepancy to give rise to special circumstances or that the discrepancy gives rise to “an unjust and inequitable determination of the level of financial support to be provided”. This is particularly so in the circumstances of this case where the husband has been diagnosed with cancer and, despite his confidence that he will be able to return to work in August, his treating oncologist has adopted a more cautious approach.
The second ground has not been made out.

That, in the special circumstances of the case, application in relation to the child of the provisions of the CS(A)A 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 because of the earning capacity of either parent (s 117(2)(c)(ib) of the CS(A)A).

The third ground upon which the wife relies is contained in subsection 117(2)(c)(ib) of the CS(A)A.
I have already discussed the earning capacity of each of the parents in the context of s 75(2) of the Act, adjustment. At the present time, neither the husband nor the wife is employed. Each is reliant on credit to meet daily expenses until such time as the orders for property settlement are implemented.
On that basis alone, this ground cannot be made out.
The wife has not established a ground for departure and her application will be dismissed.

I certify that the preceding one hundred and ninety-four (194) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 28 June 2017.

Associate:

Date: 28/6/2017

[2017] FamCA 443

28 June 2017

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Family Law

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Remedies