Guild & Stasiuk - [2019] FamCA 167

FAMILY COURT OF AUSTRALIA

GUILD & STASIUK

[2019] FamCA 167

FAMILY LAW – FINANCIAL AGREEMENT – Spousal maintenance clause – s 90E Family Law Act 1953 (Cth) – whether the words of the agreement have to be precise to exclude the spousal maintenance jurisdiction of the court.

Acts Interpretation Act 1901 (Cth)
Child Support (Assessment) Act 1989 (Cth)
Family Law Act 1975 (Cth)
Family Law (Amendment) Act 2000 (Cth)

Masoud and Masoud (2016) FLC 93-689
Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355
Toll (FGCT) Pty Limited v Alphapharm Pty Ltd (2004) 219 CLR 165

APPLICANT:

Ms Guild

RESPONDENT:

Mr Stasiuk

FILE NUMBER:

MLC

13949

2018

DATE DELIVERED:

22 March 2019

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Cronin J

HEARING DATE:

18 March 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Dickson QC

SOLICITOR FOR THE APPLICANT:

Lander & Rogers

COUNSEL FOR THE RESPONDENT:

Ms Stoikovska SC

SOLICITOR FOR THE RESPONDENT:

Berger Kordos Lawyers

Orders

That until further order, the husband pay spousal maintenance as follows:
(a)$500 per week (payable in arrears) with the first payment due on 25 March 2019;
(b)All mortgage repayments, rates, taxes, utilities and insurances relating to the B Street property as and when they fall due; and
(c)Private health insurance cover at the pre-separation level of the parties.
Until further order and pursuant to s 124 of the Child Support (Assessment) Act 1989 (Cth), the husband pay to the wife for the children X born 2009 and Y born 2013 the following:
(a)All private school fees including arrears and extra-curricular and sporting expenses at D School;
(b)School uniforms (including sports uniforms), books, stationery and computer costs;
(c)School travel expenses, excursion costs and school camp costs; and
(d)Hospital, medical and dental expenses not covered by any health insurance rebate.
The payments referred to in paragraph (2) hereof are not to be credited against any assessment of child support.
ALL APPLICATIONS ARE ADJOURNED AND FIXED FOR THE DETERMINATION OF THE THRESHOLD ISSUE RELATING TO THE VALIDITY OF THE DOCUMENT CALLED “PRENUPTIAL AGREEMENT” DATED 7 JUNE 2008 before the Honourable Justice Wilson at 10.00am on 30 May 2019 subject to any part heard case as a two day case.
The evidence in chief of all witnesses shall be given by affidavit.
TIMETABLE:
By 4 pm on 5 April 2019 the applicant wife file and serve upon all other parties:
(a)All further affidavits of evidence to be relied upon; and
(b)a financial statement.
The applicant wife pay all required court fees by 4 pm on 5 April 2019.
By 4 pm on 26 April 2019 the respondent husband file and serve upon all other parties:
(a) all further affidavits of evidence to be relied upon; and
(b) a financial statement.
By 4 pm on 3 May 2019 the applicant wife file and serve any affidavit in reply.
Without leave of the Court, any affidavit filed beyond the timetable set out in these orders may not be relied upon.
SUBPOENAE
All parties have leave to issue subpoenae for the production of documents. If a party is represented by a legal practitioner, the registrar shall, upon the certification of the legal practitioner, be satisfied as to relevance.
By 4 pm on 29 May 2019 all parties file electronically to … a case outline in one document setting out:
(a)the outline of the issues in dispute;
(b)the list of the affidavits to be read;
(c)a concise set of orders to be sought;
(d)the list of objections to evidence requiring a ruling;
AND THE PARTIES SHOULD NOTE:
Upon non-compliance with the timetable under these orders or any amendments made by the registrar, the Court may relist the case for case management purposes requiring the parties to justify why it should not be removed from the trial list.

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 Guild & Stasiuk 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 MELBOURNE

FILE NUMBER: MLC 13949 of 2018

MS GUILD

Applicant

And

MR STASIUK

Respondent

REASONS FOR JUDGMENT

Ms Guild (“the wife”) married Mr Stasiuk (“the husband”) in 2008 after they lived together from 2004. Relevantly, in anticipation of that marriage, they signed what they called a “Prenuptial Agreement” in June 2008. The agreement gives rise to an argument about the power of the court to make any interim spousal maintenance order as now sought by the wife.
The second immediate issue relates to non-periodic child support which is not to be credited against a periodic child support assessment currently in existence. The focus of this issue is private school fees together and ancillary costs for the parties’ two children X and Y.

Position of the parties

The wife seeks spousal maintenance from the husband of $1000 per week and payment of various expenses connected with the running of the house in which she and the children live. She also seeks the husband pay family health insurance cover.
The husband objects to the jurisdiction of the court, maintaining that there is no power to make any such orders because of the “Prenuptial Agreement”.
This first issue is whether the “Prenuptial Agreement” is a financial agreement and if it is, whether a clause about spousal maintenance precludes any order being made. That question revolves around the interpretation of s 90E of the Family Law Act 1975 (Cth) (“the Act”) and is the subject to which I turn in a moment.
The second issue is whether the provisions of s 123 and 124 of the Child Support (Assessment) Act 1989 (Cth) apply. The husband’s position is that there is no urgency about the matter and that orders ought not be made.

The substantive issue

In addition to these two interlocutory issues, there is a substantive issue. The wife seeks a property settlement; the husband relies upon the prenuptial agreement to deny she has the right to make such an application. However, he then seeks to enforce the agreement. Thus, what is also pending is a threshold issue about the substantive matter and I will make procedural orders to enable that to be heard in May 2019. That pending determination does not, in my view, inhibit or prohibit the determination of the two interlocutory issues mentioned earlier. Any finding I make about the prenuptial agreement can only be interlocutory and tentative for the purposes of examining the spousal maintenance clause and will not bind any trial judge who will be better able to assess the evidence after it is properly tested.

Background

The wife is a professional. The husband operates a business but also is said by the wife to derive income from various trusts which own a number of properties.
The parties do not agree on when their relationship came to an end. The wife says it was May 2018 and the husband says it was 2017. That is not immediately relevant for the purposes of the present proceedings.
The two children of the relationship are the subject of a parenting dispute and by orders made at the request of the parties, and with their consent, the family is to attend upon a Mr C for the preparation of a “family report” after the release of which, they will return to the Senior Registrar’s list if there are interim parenting issues still then unresolved. From the wife’s perspective (as set out in her December 2018 affidavit), the husband’s time with the children has been limited whereas the husband maintains that the arrangement was put to him by the wife and it is not something with which he agrees.
By her affidavit, the wife complained that the husband had been financially supporting the family but that support stopped in 2018. She then sought a child support assessment and, at the time the wife filed her affidavit in December 2018, the assessment had been made but it was not being paid. Assurance was given by senior counsel for the husband and not disputed by senior counsel for the wife that the position has been rectified and the husband is currently paying $216 per week. The dilemma however is that the children attend a private school and fees are outstanding. That has given rise to the second of the two issues.

The hearing on 18 March 2019

As a matter of necessity, this case could only be heard on the papers. Each party was represented by senior counsel and neither party sought to cross-examine witnesses. Submissions were therefore made in respect of the affidavit material, limited as it was.

The prenuptial agreement

On 27 June 2008, the parties each executed an agreement which was noted to be in anticipation of them marrying but specifically said to be made pursuant to s 90B of the Act. On the same day, each party appears to have attended upon a legal practitioner who signed a Certificate of Independent Advice which was then appended to the agreement.
Clause 2.7 of the agreement provides that in respect of the property in Suburb E, in which the wife and the children are currently living, that in the event of a permanent separation, the wife is entitled to remain there or in a substitute residence for a period of 12 months. That clause then reads:
During such period (the wife) shall not be obliged to contribute towards the maintenance or the cost of outgoings of (that property).
Specifically in respect of the issue of spousal maintenance, clause 10 of the agreement under the heading of “No Claim for Maintenance” the following appears:
(The wife) agrees that in the event of the event occurring (and relevantly, the event is the permanent separation), that she will make no claim for maintenance for herself and will accept the provisions of this Agreement in full and final settlement of any claim for maintenance that she might otherwise have had.
Clause 10 of the agreement goes on to refer to maintenance relating to the children.
It is clause 10 which is the focus of the attention of both parties. The husband says that the agreement precludes the wife from bringing the claim she now does and the wife says that the clause is void.
Section 90E of the Act provides that if there is a provision in a financial agreement that relates to the maintenance of a spouse party, that provision is void unless the provision specifies the party for whose maintenance provision is made and the amount provided for…the maintenance of the party.
Senior counsel for the wife submitted that the absence of the amount makes paragraph 10 of the agreement void. Senior counsel for the husband argued that the description is sufficiently wide to enable the terminology to fall within s 90E but in any event, the issue of the validity and binding nature of the agreement is an issue for trial.
In my view, for the reasons that follow, the view of senior counsel for the wife should be accepted.

The purpose of the legislation

It is not controversial that the purpose of Part VIIIA of the Act is to prevent people who have made an informed decision when entering into a financial agreement avoiding it on some technicality and seeking relief from a court. Part VIIIA was inserted into the Act by the Family Law (Amendment) Act 2000 (Cth). Specifically s 90E was amended in 2008 (so after the parties executed the prenuptial agreement) but the amendment was of a technical nature changing the word “party” to “spouse party”. In other words, the provision has stood since the Act brought it into effect in 2000. The explanatory memorandum explained that the purpose of the new Part VIIIA was, inter alia, to provide for the mechanism to make agreements binding. To the extent that the agreement is binding upon the parties, s 71A(1) of the Act excludes the power of the court to alter property interests and make spousal maintenance orders. However, as can be seen, s 90E is specific.
Thus, from the wife’s perspective, the court has to take a plain reading approach to s 90E. When I raised the subject of whether or not the matter had to be approached through the interpretation of contract law, senior counsel for the wife submitted that there was no need to go down that path because the statutory words were quite precise. I agree with that but to the extent that I am wrong about that interpretation, s 90KA provides that if there is a question about whether a financial agreement is “effective”, the court is to determine that question according to the principles of law and equity applicable in determining the validity, enforceability and effect of contracts and purported contracts.
It is important to observe also that what underlies the relevant provision is an ousting of the jurisdiction of the court and the matter cannot be approached without caution.
In interpreting contracts, the High Court of Australia in Toll (FGCT) Pty Limited v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40] said that the meaning of the terms of a contractual document were to be determined by what a reasonable person would have understood them to mean. That includes the surrounding circumstances that were known to the parties and the purposes and object of their transaction at the time. Interpreting the statute (s 90E) is a different thing.
Whilst the whole operation of Part VIIIA is designed to give the parties certainty to avoid costly disputes in courts in circumstances where they have wanted to arrange their own affairs, it is one thing to endeavour to interpret their respective intentions but it is quite another to stretch the language of

s 90E. It must have been evident to the parties, both of whom were given independent legal advice, that s 90E required any provision associated with spousal maintenance to specify an amount. Thus, to the extent that their contract is interpreted not only by the surrounding circumstances but also as to how a reasonable person would have understood the terms, I consider that reasonable person would now know that legal advice had been given.
Clause 10 of the agreement could be read as a provision in which the wife promises not to make an application for maintenance but there is nothing in the Clause that indicates that she is barred from doing so. The second part of Clause 10 provides that the provisions of the agreement do not apply to maintenance of the children. The language of that part of the clause in respect of the children is quite different to that relating to the promise of the wife.
In the circumstances, it is not clear what the parties were intending when they said that the wife would make no claim. Was it intended that the agreement act as a bar to a claim? The answer to that question may perhaps be found in Clause 12 of the agreement which provides that the parties thought that this was a financial agreement made under s 90B of the Act. That clause says it:
refers to financial matters in relation to the parties with respect to the maintenance of one of the parties and the property of both of the parties.
Clause 12 clears up any uncertainty that the intention was for this to be a financial agreement but that does not answer the problem facing the husband of s 90E.

How to interpret s 90E?

In my view, the words “the amount provided for” maintenance must refer to an identifiable quantum. To argue otherwise opens up debate about the extent of that possible quantum.
As s 90E makes any provision void if it does not meet the requirements of the Act, any uncertainty or vagueness cannot assist the party who seeks the protection of the provisions of the Act.
Some assistance can also be obtained from s 15AA of the Acts Interpretation Act 1901 (Cth) which provides that in interpreting a provision of an Act, the interpretation that would best achieve the purpose or object of the Act is to be the preferred one. The object of this particular Part is to enable parties to opt out of the jurisdiction of the court and self-regulate their affairs. However, the legislative use of the word “void” if it does not satisfy s 90E enables me to find that parliament intended the jurisdiction of the court would only be removed in relation to spousal maintenance by strict adherence to the requirements of the Act. Thus, s 15AA of the Acts Interpretation Act does not apply here because there is only one interpretation open.
As the High Court of Australia (McHugh, Gummow, Kirby and Hayne JJ) in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 said at [70]:
Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions.
The language of s 90E makes clear that the purpose is to ensure that people cannot avoid their maintenance obligations each to the other without precise reference to an amount.

Conclusion

On the basis that the only interpretation open is that there is no amount provided in Clause 10 of the agreement, the clause must be held to be void. The wife’s spousal maintenance claim may be heard by the Court.

The spousal maintenance claim

In her amended application initiating proceedings filed 14 February 2019, the wife did not alter her original spousal maintenance claim pleaded in the original application filed on 3 December 2018. When the original application was filed, the matter was set down before a registrar on 12 December 2018. Only days before that, the husband filed a Notice of Address for Service but nothing more. In other words, when the matter came on before the registrar, notwithstanding the husband was represented by senior counsel instructed by the solicitors who had filed a Notice of Address for Service, the husband probably should not have been heard absent the filing of a response perhaps even one that went to a denial of the jurisdiction of the court.
Despite the absence of material, the registrar proceeded with the application and made orders that the matter be adjourned to the Judicial Duty List. The wife was required to serve an amending application setting out her points of claim about the substantive issue. It was then ordered that only if the wife filed that amended application, the husband had to respond. In my view, that avoided the issue of what should have happened and what documents should have been filed.
Chapter 2 of the Family Law Rules 2004 required the wife to file a financial statement with her initiating application because she was seeking spousal maintenance. Rule 13.05(1) required the respondent to file a financial statement if the case was a “financial case” and examination of the dictionary to the rules indicates that the nature of these proceedings fitted that description.
In addition, Rule 4.15 required that not only information had to be brought to the court in relation to spousal maintenance but that it also had to be produced to the other party if requested.
The wife in her affidavit (at [28]) said that the husband ignored requests for information. In an affidavit filed in compliance with the orders of the registrar made on 12 December 2018, (albeit two days late) the husband did not respond to many of the matters to which the wife referred. In that affidavit, the husband limited his reply to the matters in the wife’s affidavit of 3 December 2018 by saying that he was responding “only insofar as it relates to the enforcement of the Financial Agreement”. In my view, the husband did so at his peril. In his affidavit, he went on to say (at [26]) that he only sought to respond to the wife’s affidavit insofar as it related to the financial agreement and that he reserved his right to reply to other matters if it became necessary and that his failure to so respond ought not be taken as an admission. In my view, he also took that approach at his peril. The problem will be evident in examining the evidence presented by the parties.

The affidavit material of the parties

As I have already indicated, this matter was dealt with on submissions and to that extent, findings of fact become difficult in circumstances where the evidence is not tested. However, for the purposes of the wife’s claim for spousal maintenance, some things were uncontroversial. The wife said that she worked three days per week and her taxable income for 2017/2018 was approximately $33,000 per annum. Senior counsel for the husband said that there were questions about the wife’s income arising from bank documents that had been produced not long prior to the hearing. However, attached to the wife’s affidavit was a copy of the child support assessment dated 21 November 2018. It is reasonable to presume that the husband received a copy of that because he conceded through his counsel that he was making the payments as assessed. The assessment shows that the wife earned $33,076 as declared in her tax return. In the circumstances, it is reasonable to assume that that is her income. The reference by senior counsel for the husband to other bank deposits was explained by reference to a failed business in which capital from the sale of stock went towards a debt which was not much different to the value of the stock.
In her affidavit, the wife said that after the business closed down, she returned to her professional career in December 2016 “to obtain income”. She said that the role was offered to her on a casual basis to assist her in performing the caregiving roles to the children. That meant that she was only able to work three days per week between school hours and one evening per week. The evidence about the wife’s working life and her care for the children also relate to the parenting issue but the husband did not seem to dispute it.
The wife was uncertain about the husband’s income. Absent a financial statement from the husband or any detail as to his financial circumstances, it is difficult but not impossible, to draw inferences about his capacity to pay.
Importantly, the husband’s income as shown in the child support assessment for the 2018 year was $72,036. Curiously, and again presumably relating only to the enforceability of the property side of the financial agreement, the husband said at [19]:
The [B Street property] is registered in my name. There are two loans secured against the property in the total amount of $4,220,000. I have paid the mortgage repayments in the sum of $17,000 per month. I have paid for utilities (gas, electricity and water) in the sum of $900 per month. I have also paid for council rates at $7540 per annum. I can no longer afford these expenses and seek that (the wife) vacate the property immediately pursuant to the terms of the Financial Agreement.
It is common ground that the parties have agreed that the husband will not seek that the wife vacate the B Street property (see the notation to the orders of 12 December 2018) but one wonders what he meant by his reference to the fact that he could no longer afford these expenses. The court did not have the benefit of any of the documents that are referred to in Rule 4.15. However, if the husband is or has been paying the mortgage of $17,000 per month, that payment is $204,000 per year. That exceeds the $72,000 that he disclosed as his income in the 2018 tax return as accepted by the Child Support Agency. How he managed to continue to do that remains a mystery but more importantly, the husband was silent on when any change occurred. Senior counsel for the wife suggested that there were many entities and ways in which the husband might be able to reduce his income (legitimately) for tax purposes. However, it does not take much imagination to wonder how things have got to the stage where an income of $72,000 is declared yet the expenses exceed well over $200,000 whilst the children remain in private schools.
In her affidavit, the wife said that during the marriage, the husband was providing her with $4000 per month for living expenses and that he was otherwise meeting all of the outgoings to which I have just referred. She said that up until July 2018, he continued to pay her periodic support but he reduced the payments down to $1400 per month and then $1350 per month from August. She said to her knowledge, he continued to meet the outgoings in respect of the B Street property albeit that he cancelled the internet and home telephone account in about September 2018.
Apropos the school fees at the private school, the wife said that they were in arrears since June 2018 and that she had been told by the school that if the payments were not made, the children would be forced to leave. She said that having met the school principal, the school had indicated that the children could remain (and they have in 2019) but payments had to be made as soon as possible. For his part, the husband said that he was paying his child support as assessed and he confirmed that the school had indicated that the children would be allowed to stay for 2019. With respect, that does not address the issue.
The wife asserted that her recollection was that the income derived from the husband’s business operations had previously been between $500,000 and $700,000 per annum and she had no reason to believe it had changed because he would regularly tell her how busy the business had been. She pointed also to the fact that during the time that the parties were together, their lifestyle was comfortable and they had overseas holidays, attended concerts and expensive dinners at last once per week. She said they had a house cleaner weekly, a pool cleaner and a gardener who attended at the home fortnightly.
Save for what I have already mentioned, the husband remains silent about all of these matters and as observed, when, if at all, the situation changed.

The legislation relating to spousal maintenance

Section 72 of the Act provides, relevantly here, that the husband is only liable to maintain the wife to the extent that he is reasonably able to do so, if and only if, the wife is unable to support herself adequately by reason of one of the provisions in the section that might preclude her from appropriate gainful employment.
Section 74 of the Act provides that a court may make such order as it considers proper for the provision of maintenance but in exercising that jurisdiction, s 75(1) provides that the court shall only take into account the matters referred to in s 75(2) of the Act.
To reiterate, the wife first has to establish that she is unable to support herself adequately by one of the reasons set out in the Act (or any other good reason) and if the court so finds, then it is a question of examining the husband’s capacity to contribute towards the wife’s maintenance to the extent that he is reasonably able to do so.

What is the wife’s financial position?

Relying upon her financial statement and absent any testing of that evidence, I find that the wife’s income is $636 per week out of which she has to pay $46 in tax which leaves her $590 per week to live upon.
The wife’s non-discretionary expenses are as follows:
Car and Travel  $142.00
Food and household supplies     125.00
Telephone  30.00
Clothing   30.00
Chemist   5.00
Internet  9.00
Total  $341.00
As can be seen, and even absent submissions, I have excluded a number of expenses which might loosely be described as discretionary expenditure such as holidays and gifts.
It can be seen therefore that technically, the wife has an excess of income over expenses if the children’s needs are ignored.
The wife’s financial statement shows that the children cost her $639 per week if their private school education expenses are ignored. The husband contributes $216 per week towards the basic living costs from his child support which shows that the wife is bearing the lion’s share of the daily expenses of the children. Both parents have a legal obligation to support these children and there is nothing in the expenses of either the wife or the children that seems extravagant.
It is important here to observe the submission of senior counsel for the wife. He said it must follow that the wife was not spending money to get up to a claim of $1000 per week because she simply did not have it. However, consistent with the evidence of the wife about the lifestyle to which the parties have become accustomed not to mention that of their children, it stands to reason that she has cut her cloth substantially to meet her needs. However, despite the eloquent submission on behalf of the wife, it is difficult to know how I can make a finding as to the full claim she makes in circumstances where I would be entirely guessing at what those needs are beyond what she is currently paying to stay within her financial means.
The court is not permitted to assume that the wife cannot adequately support herself in a spousal maintenance claim by simply adding in what she is paying for the support of the children. There has not been an application for departure from the administrative assessment of child support (see Masoud and Masoud (2016) FLC 93-689 (Full Court) at [167]).
Notwithstanding that position, it is clear that the wife’s financial statement requires an artificial drawing of the line between costs referrable to a parent and those referrable to children. If that boundary is blurred as I suspect it must be here because the children are attending private schools and have been accustomed up until the parties separated, to a reasonably affluent lifestyle, there is an opportunity to use a greater amount of flexibility in assessing what is reasonable and what is adequate for the wife’s needs to determine whether or not she can support herself from her income.
Before looking more closely at that issue, I return to s 75(1) which requires that only the matters set out in s 75(2) of the Act can be relied upon.
Section 75(2) insofar as it relevant, requires the court to look at the income, property and financial resources of each of the parties and the physical and mental capacity of each party to undertake appropriate gainful employment. The wife has no property declared in her financial statement and it is unclear whether she has an equitable interest in the husband’s properties because that will depend very much upon the validity of the financial agreement. However, what is not disputed is the fact that the husband has substantial properties and, on the wife’s limited but unchallenged evidence, the husband was earning $500,000 per annum in past years.
To the extent that the husband says that he cannot continue to make the payments that he has been, it is also clear that the court is not obliged to only look at the income of the parties. Section 75(2)(b) obliges the court to look at the property and financial resources of each of the parties as well. I find in this case that the husband has substantially more property than has the wife.
The wife is not in a position to increase her working hours by virtue of her responsibilities towards the children and s 75(2) requires the court to take that into account as a basis to determine whether or not her expenses are reasonable and whether she can adequately support herself. In my view, the unchallenged evidence is that she is predominantly caring for the children and has been so for some years by agreement with the husband and that that limits the amount of income she can obtain.
The wife is not eligible for any social security benefits but even if she was, for the purposes of spousal maintenance, that amount of money would have to be disregarded (see s 75(3)).
Section 75(2)(g) in a spousal maintenance claim entitles the court to take into account where the parties have separated, a standard of living that in all the circumstances is reasonable. That must apply to both parties. However, for reasons that are somewhat mystifying, the husband has chosen not to put any of these matters before the court presumably on the basis of his interpretation of s 90E of the Act.
The unchallenged evidence of the wife is that when the parties were together, they had an affluent lifestyle. The court is entitled to take into account that, whilst the breakdown of the marriage may have changed the parties’ intentions, the wife should not be put in a position where she is unable to provide adequately for herself by virtue of taking on the responsibility of caring for the children and limiting the amount of income she can earn. In other words, whilst the wife has no right to presume the affluent lifestyle will continue, she is not obliged to live in penury either.
Another factor which is of significance in this case is the duration of the marriage and the extent to which it has affected the earning capacity of the wife. Here, the unchallenged evidence shows that the wife endeavoured to participate in the business venture by opening a second retail store but that that failed. But, to provide income, the wife went back to her professional career whilst maintaining the responsibility for the children.
The court is obliged to take into account the child support that the husband is paying but of course, absent a departure application, I am not in a position to know whether the $72,000 declared income is artificial by virtue of the husband’s ability to reduce income because of the various corporate and trust structures that he maintains. That said, the husband’s wealth either in the form of capital or income, can only be taken into account after the adequacy of the needs of the wife are determined.
It is clear from the parties’ lifestyle that they chose private school education for both of their children from a very young age and the associated expenses are high if for no other reason than the fees that have to be paid. Whilst it was also the wife’s choice to have the children in those schools, she points to the fact that she can no longer have expensive holidays or participate in social activities of the nature I earlier described because of her lack of income. The breakdown of the marriage should not mean that all of those benefits are disregarded because the husband maintains that he has no capacity to pay. Without comprehensive discovery enlightening everyone as to the exact financial position both capital and income that he has, inferences from the past financial affairs become important. In my view, the reasonableness of the expenses claimed by the wife factoring in that she would spend more if she had it, justifies a finding that the wife cannot adequately support herself on the income she receives.

How to determine quantum?

Excluding the private school fees of $1000 per week, but factoring in the amount of child support that the wife receives, and taking into account the blurred boundary between adult and child expenses to which I have referred (see s 75(2)(c), (d) and (l)) along with the lifestyle to which the parties have been accustomed and which has now been removed from the wife (s 75(2)(g)), when I take into account that the wife has a total income of $590 per week (and child support), I find she is not able to adequately support herself to the extent of $500 per week.
$500 per week would take into account food, household expenses and the like which would be incurred if the money was available. So too, expenses incurred by the wife such as gifts would be reasonably incurred if the money was available because that was the lifestyle to which the family had been accustomed. A large portion of the wife’s claim of $1000 per week seems to revolve around, but is not entirely connected with, school fees. The fees will be met elsewhere but I take into account the lifestyle that both parties set up in calculating an amount to allow the wife to live adequately and reasonably.

Can the husband provide that financial support?

The husband’s capacity to pay is difficult to assess by virtue of the absence of comprehensive material as to his present financial circumstances. To simply say that he could no longer afford to pay the various expenses that he had been, is not satisfactory.
The husband’s 2018 taxable income as shown earlier was $72,000. As a single man, the Child Support Agency has allowed him $24,500 to live on per year which I note is more than the wife needs to support herself. I take into account however that the husband has to rent accommodation although he seems to be sharing it with his girlfriend. After his child support of $11,238 per annum is taken into account and he pays his tax on the $72,000, he has $21,304 per week left unaccounted and if I take into account (s 75(2)(b)) all of the potential income streams from the properties that he owns, his financial position is substantially stronger than that of the wife. I have taken into account that the husband may be able to convert real property to cash if he needed to support himself. He can therefore provide spousal maintenance if necessary, from capital.
Based on the figures presented, and the degree of flexibility in this interim application because it is only until trial, I can safely presume that the husband has the capacity to pay $500 per week.

Conclusion

I find the wife has a need for maintenance to the extent of $500 per week and that the husband has the capacity to make that payment.

Child Support

The final part of the wife’s application is for an order that until further order the husband pay for the children:
(a)All school fees, including arrears and extra-curricular and sporting expenses at D School (including arrears);
(b)School uniforms (including sports uniforms, books, stationery and computer costs;
(c)School travel expenses, excursions costs and school camp costs; and
(d)Hospital, medical and dental expenses not covered by health insurance.
Section 121 of the Child Support (Assessment) Act 1989 (Cth) provides that a particular object of the legislation is to ensure the children have their proper needs met from reasonable and adequate shares in the “income, earning capacity, property and financial resources” of both parents and that the parents share equitably in the support of their children. That latter point does not seem to be happening at the moment.
This particular application relates to those expenses for children that are outside the usual periodic payments for care of the children.
Section 123(1) of that child support legislation provides that an application can only be made if an administrative assessment is in force. That applies here. There is no pending application for a departure order.
Section 124 of the child support legislation provides that if an application to which I have referred has been made, and the court is satisfied that it would be just and equitable as regards the children, and both parents and is otherwise proper, the court can make an order that the liable parent provide child support other than in the form of the usual periodic payments. However, in determining that application, the court must have regard to:
(a)The administrative assessment in force;
(b)Any departure determination; and
(c)Whether the carer (in this case the wife) is in receipt of an income tested pension or benefit.
All of those matters can be quickly put aside on the basis that the only one that is relevant is the administrative assessment. I have already made reference to the fact that the husband’s income under the assessment is shown as $72,000. However, as I have also observed, it is an object of Division 5 of Part VII of the Child Support (Assessment) Act, that children have their proper needs met from not just income but also earning capacity, property and financial resources of both parents.
It is clear from the evidence of the wife that she has no further contribution capacity towards the support of the children either in the form of income or in the form of property. I find in the circumstances that the only question is whether the husband has. The husband has chosen not to file a financial statement but the agreement executed between the parties and to which the wife refers in her affidavit shows that at least in 2008 when the document was executed, the husband had properties in both State F and State G the total equity at that time being about $10 million.

The wife refers to the fact that the husband’s income was between $500,000 and $700,000 per annum which indicates a substantial return on assets. By reference to s 121 of the legislation, the children’s proper needs are to be met from not just income but also property. Both parents seem to want the children to remain in a private school and whilst there is no immediate threat to their removal, any examination of the wife’s financial position shows that she is not able to make the payment towards the school fees. To the extent that the husband has a problem with cash flow, it would seem he has adequate property to meet whatever obligations there are.
In my view, therefore it is just and equitable as regards the children and both parents and otherwise proper that an order be made that he pay the school fees at this time.
In addition, it is hard to imagine why the children would not be also protected by appropriate health insurance having regard to the lifestyle to which they had become accustomed. The husband in my view has the capacity to make the payments in respect of the school fees from his various resources and income alone cannot be the just and equitable focus.
The orders should therefore be made.

I certify that the preceding eighty-four (84) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 22 March 2019.

Associate:

Date: 22 March 2019