Hadden and Mansell

[2014] FamCA 927

FAMILY COURT OF AUSTRALIA

HADDEN & MANSELL [2014] FamCA 927

FAMILY LAW – PROPERTY – Where it is just and equitable for orders to be made – Where both parties sought an alteration to existing property interests due to the breakdown of their relationship – where the value of the parties assets was small – where the wife’s future needs justify an adjustment in her favour.
FAMILY LAW – CHILD SUPPORT – Application for departure – where the children have special needs – where the parents agreed to enrol the children in private schooling – where the father has capacity to make additional child support payments – where it is just and equitable for there to be a departure from the child support assessment.

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

Chorn & Hopkins (2004) FLC 93-204
Coghlan & Coghlan (2005) FLC 93-220
In the Marriage of Gyselman (1992) FLC 225
Mayne & Mayne [2011] FamCAFC 192
Pierce & Pierce (1999) FLC 92-844
Stanford v Stanford (2012) 247 CLR 108

APPLICANT: Ms Hadden

RESPONDENT: Mr Mansell

FILE NUMBER: CAC 1641 of 2012

DATE DELIVERED: 30 October 2014

PLACE DELIVERED: Canberra

PLACE HEARD: Canberra

JUDGMENT OF: Faulks DCJ

HEARING DATE: 21 October 2014

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Ms Hadden represented herself

COUNSEL FOR THE RESPONDENT: Mr Brown

SOLICITOR FOR THE RESPONDENT: Browns Lawyers

Orders

1. The Husband and Wife do all acts and sign all necessary documents to effect the sale of the business known as X Business (“the business”) and the property upon which the business is carried on at B Street, Town Y in the state of New South Wales being real property described as Lot … in Deposited Plan …, Parish of …, County of …, Folio … (“the Y property”) upon the following terms:

   (a)       The business and Y property shall be listed for sale with one business broker or real estate agent;

   (b)       The Husband and Wife shall do all acts and sign all necessary documents to list the business and Y property with such business broker or real estate agent;

   (c)       The Husband and Wife shall do all acts and sign all necessary documents to effect the sale of the business and Y property including the signing of all Contracts of Sale, transfers, real estate agent authority forms, business broker authority forms, mortgage discharge forms, solicitors’ authorities and other documents required to be signed to effect the sale;

   (d)       The business and Y property shall be sold together.

2. Upon completion of the sale of the business and Y property the Husband and Wife shall do all acts and sign all necessary documents to pay the proceeds of sale of the business and Y property as follows:

   (a)       Firstly to pay the business broker’s commission and legal costs of the sale;

   (b)       Secondly to pay in full the mortgage to the ANZ Bank secured upon the title to the Y property including the business loan;

   (c)       Thirdly the balance to be paid as to a ONE THIRD (1/3) share thereof to D PTY LTD as Trustee for THE MANSELL FAMILY TRUST (“The Mansell Family Trust”), a ONE THIRD (1/3) share thereof to MS G and MR G and a ONE THIRD (1/3) share thereof to MR C and MS C.

3. The Husband and Wife, in whatever capacity, shall do all acts and sign all necessary documents as may be possible to pay and distribute all of the proceeds of sale of the business and Y property receivable through The Mansell Family Trust to the Wife.

4. The Husband shall retain in his possession and ownership, the Wife shall relinquish any claim she may have in respect thereto and shall do all acts and sign all necessary documents to transfer to the Husband all of the Wife’s right, title and interest in and to the following:

   (a)       The balance of the Husband’s W Bank superannuation entitlements following the superannuation split effected under the terms of these Orders;

   (b)       The furniture and personal effects presently in the Husband’s possession.

5. The Wife shall retain in her possession and ownership, the Husband shall relinquish any claim he may have in respect thereto and shall do all acts and sign all necessary documents to transfer to the Wife all of the Husband’s right, title and interest in and to the following:

   (a)       The Wife’s Hesta Super superannuation entitlements;

   (b)       The Wife’s Australian Ethical Super superannuation entitlements;

   (c)       The Wife’s AMP Super superannuation entitlements;

   (d)       The furniture and personal effects presently in the Wife’s possession;

   (e)       The proceeds of sale of the campervan sold by the Wife; and

   (f)        The Kia motor vehicle.

6. The Husband shall pay, be liable for and indemnify the Wife in respect of the following:

   (a)       The Husband’s W Bank Mastercard debt;

   (b)       The Husband’s W Bank personal loan;

   (c)       The Husband’s GE Finance personal loan.

7. A base amount of SIXTY NINE THOUSAND DOLLARS ($69,000.00) is allocated, as required by section 90MT(4) of the Family Law Act 1975 (“the Act”) to the Wife out of the Husband’s interest in W Bank Superannuation Fund (“the W Bank Superannuation Fund”).

8. In accordance with section 90MT(1)(a) of the Act:

   (a) The Wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (“the Regulations”) using the base amount referred to in Paragraph 7 of these Orders; and

   (b)       The Husband’s entitlement and the entitlement of such other person to whom a splittable payment may be made to payments out of the Husband’s interest in the W Bank Superannuation Fund, is correspondingly reduced.

9. The Trustee of the W Bank Superannuation Fund shall do all acts and sign all necessary documents to:

   (a) Calculate in accordance with the requirements of the Act, the entitlement created by paragraph 8 of this Order, and

   (b)       Pay the entitlement whenever a splittable payment becomes payable out of the Husband’s interest in the W Bank Superannuation Fund.

10. These Orders have effect upon the operative time and the operative time is the date four (4) business days from the date of service of a copy of the sealed Orders upon the Trustee of the W Bank Superannuation Fund.

11. Both parties shall do all acts and sign all necessary documents to implement and carry out the terms of these Orders.

12. In the event the either party defaults in the doing of any act and/or the signing of any document as is necessary to give effect to these Orders then a Registrar of this Honourable Court is hereby appointed pursuant to section 106A of the Family Law Act 1975 to do all acts and execute all necessary documents in the name of the Wife or the Husband to give validity and operation to the terms of these Orders.

13. It is noted that the wife’s application for spousal maintenance was not pressed at final hearing and is accordingly dismissed.

Child Support

1. Pursuant to the Child Support (Assessment) Act 1989 the father will pay to the Orana Steiner School further child support to that payable by him under any administrative assessment for the children L, K and J of one half of all school expenses, including tuition fees; resource and maintenance levies; uniform costs; and school excursions, for L, K and J while they continue to attend the S School. Payment is to commence from the start of term 3 2014 and the father will pay amounts in conformity with this order within 30 days of his receiving each invoice. The mother will promptly send or cause to be sent, by prepaid post or by email, such invoices upon their receipt by her.

   (a)       In relation to school excursions, the father shall not pay one half of any school excursion costing more than $200, unless he agrees in writing to do so before the expense is incurred.

2. The child support ordered to be paid by way of school fees does not reduce the amount payable by the father under an administrative assessment of child support in any one year.

3. Pursuant to the Child Support (Assessment) Act 1989 the father provide further child support to the mother for the child L by payment for all costs associated with L’s orthodontic expenses, as and when those expenses arise and within 30 days of an invoice relating to such expenses being sent to him.

   (a)       The father may recoup and retain the costs of L’s orthodontic work, as applicable, through his private health care insurance

4. The child support ordered to be paid by way of L’s Orthodontic expenses does not reduce the amount payable by the father under an administrative assessment of child support in any one year.

5. The Child Support Registrar has 30 days in which to apply in relation to these orders should he or she wish to do so.

6. All material produced subpoena which did not become the subject of exhibits will be returned by the Court to the persons producing it as soon as practicable.

7. Any material produced subpoena which became an exhibit will be returned by the Court at the expiration of the appeal period to the person producing it. Any material produced by a party which became the subject of an exhibit will be returned by the Court to the party at the expiration of the appeal period.

8. This matter is removed from the pending cases list.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Hadden & Mansell has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT CANBERRA

FILE NUMBER: CAC 1641 of 2012

Ms Hadden

Applicant

And

Mr Mansell

Respondent

REASONS FOR JUDGMENT

Foreword

1. The present application was filed in the form of an amended initiating application by Ms Hadden (“the wife”) on 3 March 2014.  In accordance with my directions the wife also filed a Minute of Orders Sought on 15 September 2014 and at the start of the hearing the wife confirmed that this document now comprised the totality of orders which she was seeking in this matter.  As outlined in this document the wife sought orders relating to the division of property and certain other orders relating to a departure from a current Child Support Assessment.  The wife had previously sought orders about spouse maintenance but in the time before the hearing she obtained employment and abandoned that claim.  The wife’s Minute of orders sought appears as Annexure A to these reasons.

2. The husband’s Minutes of Orders Sought filed on 15 September 2014, which appear at page 103 of the Electronic Trial Book (ETB), sought that the parties do whatever was necessary to sell the X Business and that proceeds of the sale, after two thirds had been applied towards the “partners” in the business, should be divided as to thirty per cent to the husband and seventy per cent to the wife.  The husband estimated the amount involved for division between him and the wife was about $883.  Apart from his assuming various debts for his Mastercard and personal loans and retaining his personal property, he proposed that his superannuation interests should be split as between him and the wife with her having a base amount of $69,000. 

3. In relation to the wife’s proposed departure orders from the Child Support assessment, the husband opposed both that he pay school fees in addition to the child support payment and that he pay their son L’s expenses for orthodontic treatment.  He also sought an order for costs.  The husband’s Minutes of Orders Sought is Annexure B.

Background

1. The parties are both about 44 years of age.  They were married on in 1992 in Sydney and had three children, L, born in 1999, K, born in 2001, and J, born in 2005.  The parties separated in June 2011 and were divorced in May 2013.

2. The husband is a regional manager with the W Bank and the wife has recently obtained employment in the public service in Canberra.

3. The husband has remarried and the wife has a relationship with Mr T. 

4. The children have principally lived with the wife and spent time with the husband.  The husband remarried in early 2014.  His second wife has two children, O and A, who are about nine and seven years of age respectively. 

5. During the time the parties were together they invested in a business known as the X Business.  This they did in partnership with two other companies and their family trust, in effect, had a one third share in the business.  The husband estimated and set out some calculations that the net result of the sale of the business would be that the Mansell Family Trust would receive about $883.

6. In addition, the husband and wife previously engaged in a joint venture with the wife’s sister and her partner in some land at Village M in northern New South Wales.  As a consequence of earlier orders of this Court made by consent the dispute involving the wife’s sister and her partner (who became interveners in these proceedings) was settled.  As a result of these orders the husband and wife currently owe to the wife’s sister and her partner $102,276.

7. There had been various disputes about these arrangements in the past but the projected sale proceeds of the X business and the debt owed to the wife’s sister and her partner were accepted by the wife during the course of the proceedings before me. 

8. The husband and wife have few other assets.  The wife has a Kia motor vehicle which the husband valued at $15,000 but which was apparently subject to a loan for about $13,000, and the husband and the wife had owned a camper trailer which the wife sold for apparently about $34,000, the proceeds of which were retained by her.  Otherwise, the husband estimated the wife had furniture and personal effects with a value of about $10,000, but felt that those in his possession had only a nominal value.  No proper valuation was provided for any of those effects and I do not propose to take them into account. 

9. The parties also had superannuation interests with the husband claiming entitlements with the W Bank Superannuation Fund of an estimated value of about $98,263.  This was supported by a valuation from Mr R.  The wife’s significantly less superannuation entitlements with Australian Ethical Super were about $18,724.  This arose out of a valuation from a superannuation information statement which both parties appeared to accept in the course of the proceedings. 

10. The husband claimed, and supported in his Financial Statement, that he had a personal loan with the W Bank of $26,000, a Mastercard debt with the W Bank of $16,600 and a GE Personal loan of $18,000.  There was also a St George personal loan for $13,000 for the wife (this apparently related to her car).

11. Ultimately the wife did not seriously dispute any of the matters set out above.  In the past there had been suggestions that there were other assets in existence that had not been disclosed by the husband or that the value of the assets was more than that contended by the husband, but the final position, unfortunately for the parties at the time when the matter came before the Court, was that their assets were very few indeed.  In fact, their liabilities exceed their assets by a significant amount. 

12. The amount owed by the parties to the wife’s sister and her partner was the subject of some controversy.  The wife admitted that it was improbable her sister would sue her for the amount due.  However, the reality was, by admission from the lawyer representing the husband, that the debt was jointly and severally owed and it would be open to the wife’s sister to sue Mr Brown’s client for the whole amount.  If this were so, it was agreed he might then seek reimbursement as to one half share from the wife.  The wife’s evidence was that if she were obliged to repay the loan or any part of it, that, in effect, she would need to declare herself bankrupt. 

13. The husband’s lawyer sought that I should add-back the $34,000 which the wife appropriated from the sale of the camper trailer.  I do not agree that I should do that. 

14. It is common ground that the proceeds have been dissipated.  There was no suggestion that there was any “waste” on the part of the wife in relation to those funds.  As the funds no longer exist they are not property of the parties and are not “the property of the parties to the marriage or either of them”. [1]

    [1] Family Law Act 1975 (Cth) s 79(1); Mayne & Mayne [2011] FamCAFC 192.

15. The husband’s assertion[2] is that:

    … there should be added-back into the pool the proceeds of sale of the camper trailer sold by the wife post-separation without the husband’s consent in the amount of thirty four thousand dollars ($34,000) pursuant to the principles in Townsend as a premature distribution of property in which the husband had a legitimate joint interest. 

    [2] Husband’s Outline of Submissions, p 7, [29].

16. The husband does not, in his affidavit,[3] assert any further as to what happened to the proceeds other than that they were retained by the wife.  No questions were directed to the wife in cross-examination about what happened to the proceeds.

    [3] P 125 of the ETB [62].

17. The wife, who represented herself in the proceedings, does not refer to this matter in her affidavit.[4]  Moreover, she does not record in her Financial Statement that any of the sums still remained.  No questions were directed to her about this matter. 

    [4] P 23-92 of the ETB.

18. I might reasonably conclude, as the wife asserts that she still owes her solicitors a significant sum of money, that the funds were expended on living expenses.  No cross-examination was directed as to whether the expenditure was, in the circumstances, on “reasonable living expenses” or not.[5] 

    [5] Chorn & Hopkins (2004) FLC 93-204.

19. Whether and how much of an “add-back” might be returned to the pool was a question of discretion under the law as it applied prior to Mayne & Mayne and subsequent decisions of this Court.  If my determination set out above should be wrong as to the appropriate way of dealing with the proceeds of the sale (that is, if it were to be determined that there could appropriately be an “add-back” in relation to the money), it would be within my discretion as to the extent to which the expenditure was reasonable and what if any add-back should apply.  On the state of the evidence and given the property of the parties, and the circumstances of the parties since separation, I do not believe it would be appropriate to exercise my discretion in favour of ‘adding-back” any sum to the property of the parties for the purposes of the hearing. 

20. If there was a reason for what the husband’s lawyers described as a premature distribution of money, I believe the proper approach is for it to be taken into account under s 75(2)(o), and in the circumstances of this matter given the disparity of factors between the husband and the wife, as I shall deal with in due course, I would decline to make any adjustment in relation to that item alone. 

21. Parties may appropriate and unreasonably use joint property after separation.  Such an action may result in an appropriate adjustment in the division of property between them.  There needs to be some evidence however as to what happened and for what purpose, before such an adjustment might reasonably be made.

22. Accordingly, as between the parties the only property reasonably available for distribution is the projected proceeds of the sale of the X business.  The wife’s car has a net value of $2,000.  The furniture is not appropriately valued and in my opinion is not such that it would be just and equitable to make an order altering the interests of the parties as they lie (by possession) at the present point.  It is astonishing that at the end of quite extensive litigation that is the extent of the property for division between the parties. 

The approach to be undertaken

1. As I explained to the wife in the course of her submissions to me at the end of the proceedings, I do not accept that the approach set out by the husband’s lawyer in paragraph 35 of his Outline of Submissions is accurate as a summary of the approach to be undertaken since Stanford v Stanford.[6]

   [6] Stanford v Stanford (2012) 247 CLR 108.

1. In my opinion, a court dealing with the division of property between the parties must first determine, without conflating matters required by s 79(2) and the matters set out under s 79(4), the interests of the parties in property.  The court is then obliged to determine whether it would be just and equitable to alter those interests and thereafter, if the court should determine that it is, consider how they should be altered in accordance with the principles set out in s 79(4) including the future financial factors referred to in s 75(2). 

2. In this matter, there was agreement between the parties that there should be an alteration in their property interests and hence it would appear in the opinion of the majority in Stanford v Stanford that a court could readily then proceed to determine that it would be just and equitable to alter those interests. Their Honours in Stanford said:

   42. In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s 79(4).[7]

   [7] Ibid, [42].

3. The $883 (approximately) that is the projected profit from the sale of the parties interests in the X business is not, of course, strictly speaking the property of the parties.  However, neither party sought to argue that the interposition of the Mansell Family Trust altered the proposition that this was in fact the joint property of the parties.  Given the amount involved and the agreement of the parties about that aspect of the matter, there would seem to be no purpose served in a further investigation of the precise equities or legal ownership of the share.  The orders should reflect that each of the parties will do such things as may be possible to enable the distribution of the funds [in accordance with the terms of the orders].  It seems in this matter that such an order would not interfere with the duties of the Director or the Directors of the Trustee Company, whoever he, she or they may be and I note that no evidence was adduced about this matter at the final hearing.

Contributions

1. It would be reasonable to determine in this matter that in the relatively lengthy period of the parties’ marriage, they each made contributions whether financially (principally by the husband of course) or as home maker and parent (principally by the wife in part to facilitate the husband’s contributions financially).  There were some contributions to superannuation by the husband prior to the parties beginning their relationship but overall taking account of the factors that are outlined in Pierce & Pierce[8] it would be reasonable in the circumstances to take the view (not emanating from a presumption) that the contributions of the parties should be regarded as equal.  I take account of the fact in doing so that the net property appears to be very small indeed. 

   [8] Pierce & Pierce (1999) FLC 92-844.

Future financial factors

1. The discrepancy between the income of the husband and the wife was marked and will continue to be so into the foreseeable future. 

2. The wife will continue to have the principal care of the children.  She has indicated for her part, from her relatively meagre earnings, a desire to pay for one half of the children’s school fees and expenses.  While doubting perhaps her capacity to do that, I note her willingness to apply her funds in that manner.  That in turn reduces her earning capacity at least in comparison with the husband. 

3. The husband has remarried and has assumed (at least from his Financial Statement) some responsibility financially and otherwise for his step-children.  While such an acceptance of obligation of his part may accord with his moral responsibilities, those are not necessarily coincident with his legal obligations.  His present wife is also a financial services manager and earning a reasonable income and apart from the demands of child support and the repayment of his (relatively) modest loans, his income will remain relatively high by comparison with many members of the community.  He also has a bonus paid to him each year.  I accept that is discretionary and appears to have emerged each year on a regular basis.  I will return to this issue in due course and the issue of child support. 

4. The wife’s partner, Mr T, appears to contribute relatively small amounts towards the household but I accept that he is not financially dependent upon the wife.  There are no factors that I am aware of that the parties claim should otherwise be taken into account under s 75(2).  (I note that I have previously rejected the proposition that I should take account of the wife’s appropriation of the proceeds of the camper trailer as a s 75(2)(o) factor.)

Summary

1. Taking those factors into account, and bearing in mind the size of the pool of property, it seems to me that it would be appropriate if the whole of the parties’ interests in the proceeds of the sale of the X business should go to the wife.  It would appear on that basis that this would mean that there would be a fifty per cent adjustment in favour of the wife for s 75(2) factors, but that fifty per cent represents about $400.

2. I have not specifically referred to the parties’ superannuation entitlements in my consideration of the other property of the parties.  To some extent this is a matter in which there need to be two pools of property[9] because of the unusual way in which the parties have approached the matter.  The husband, as I indicated above, was prepared to ascribe a split of his superannuation as to $69,000 to the wife.  The wife, for her part, responded to this proposal with a claim that the husband should pay her $69,000 in cash. 

   [9] Coghlan & Coghlan (2005) FLC 93-220.

3. As I explained to the wife in the course of her submissions, it does not lie within my power to order the husband to borrow the sum of $69,000 to pay her.  If the pool of property (other than superannuation) had been large enough, an adjustment might have been made from that pool in accordance with the principles enunciated in Coghlan & Coghlan.[10]

   [10] Idib.

4. This, for reasons set out above, is just not possible and accordingly, the wife is left with no basis for her claim in relation to superannuation to be met in the way in which she suggests.  It may have been sensible for the husband to have taken the view that he would borrow the amount of money involved to exclude the wife from any claim on his superannuation.  However, such an offer was not forthcoming (at least to my knowledge) and accordingly I am left with no choice other than to make or not an order for the splitting of his superannuation. 

5. The factors set out above would not necessarily mandate a split of the size that the husband in fact had offered in his response.  His division takes not particular account of the wife’s (admittedly much smaller) superannuation entitlements.  In the circumstances it seems that it would be reasonable for me to accept what the husband has suggested in relation to that split and make orders accordingly. 

Child Support

1. In essence the wife’s claim in relation to child support was that there should be a departure from the current Child Support Assessment to provide, taking account of her income, that in addition to the sum determined by the Child Support Agency pursuant to the most recent assessment,[11] the husband should be responsible for the payment of at least half of the children’s school fees at the S school and for L’s orthodontic work. 

   [11] Exhibit H1.

2. The husband’s lawyer quite rightly commented that the evidence about the cost of those two matters was both inadequate and unsatisfactory.  The most precise evidence about the amounts involved is contained in the wife’s affidavit.[12]  This suggests that the total of money due would be about $24,195 a year.  This however is for 2014 and what it is on a continuing basis is not available. 

   [12]ETB p 25 [13].

3. So far as L’s orthodontic expenses are concerned, paragraph 21 of the wife’s affidavit[13] estimates the cost to be, or perhaps more accurately reports that the relevant orthodontist estimates the cost to be of the order of $14,300.  This however, as she comments, is “before insurance rebate and is payable by instalments”.[14] 

   [13] ETB p 26.

   [14] Ibid.

4. As I mentioned previously the husband resists payment other than through his child support obligation of any of the amounts sought in relation to school fees or orthodontic work. 

5. The opposition to the wife’s application begins with the proposition that there was no evidence that the wife had served the Child Support Registrar with her application for child support orders as provided by Rule 4.23(1)(c) of the Family Law Rules 2004.[15]

   [15] See [62] of the husband’s Outline of Submissions.

6. It was therefore submitted that in those circumstances the application for child support is incompetent and the Court was without jurisdiction to determine such an application.

7. To the extent that this submission is pressed, it is rejected.  To the degree that it is required that I should dispense with compliance with the Rules in relation to this matter I do so.  My reasons for this are as follows.

8. There are some matters in which the Registrar has an obvious interest and these would include matters relating to substantive questions of law, or where there are proceedings already pending before the Agency.  It is not suggested that either of these matters or any other relevant reason would require the attendance of the Registrar or that he be involved in the proceedings.  I acknowledge however, that it is important that the Registrar should be aware of the orders I make in these proceedings and if I make an order for child support in addition to the assessed amount (as I intend to do), I will provide for the Registrar to have thirty days to apply in relation to the order if the Registrar wishes to do so. 

9. In his written submissions, Mr Brown, on behalf of the husband, comments[16] that the wife seeks non-periodic child support.  I suppose in one sense this is correct.  However, the application is that the husband should continue to meet, on a regular basis, the children’s education expenses (or as I commented previously one half of them) over and above his child support.  Such amounts would necessarily be paid periodically although not necessarily simultaneously or contemporaneously with the ordinary amounts of child support under the assessment. 

   [16] [59]

10. Moreover, the claim for orthodontic expenses while indeterminate, is not necessarily a once only payment but as the wife has suggested might be paid by instalments. 

11. It is therefore somewhat problematic that I should be referred to sections 124 and 125 of the Act.[17] Assuming for the sake of argument at this point that the amount sought are “child support otherwise than in the form of periodic amounts” the Court is required under s 124(2) to have regard to:

    a)the administrative assessment - I will do that;

    b)any departure orders or the like - There are none presented to me;

    c)Whether the person entitled to receive the child support is in receipt of an income tested pension - It is not suggested that she is (although I presume she receives some form of family support). 

    [17] See submission [70]

12. Section 124(3) refers me, in effect, to the matters set out under s 117 (this is the departure provisions in this part of the Act) and in subsection 124(3)(A) I am obliged to only determine that relevantly the husband’s income is greater than reflected in his income for the purposes of this Act if I am satisfied by the matters set out in s 117(7)(B).

13. The matters set out in that subsection deal with people who are not working or working to capacity. It is not suggested that in this case the father is not working or working to capacity. Accordingly, if s 124(3)(A) is applicable it would seem that I would be prohibited by the Act from determining that his earning capacity is greater than is reflected in his income for the purposes of this Act. This however would not preclude me from finding that his income was greater than that indicated in the assessment. Section 124(3)(A) is directed to capacity.

14. Section 124(4) requires that I should also have regard to the matters set out in s 117(5) which is the section that deals with whether an order is “otherwise proper” which is directed principally to ensuring that there are no deals done between parents which would mean that the person in receipt of the child support is more liberally supported by the public purse then the circumstances of the parties would otherwise justify.[18] 

    [18] It is not the precise wording of the subsection but rather the effect of it.

15. Section 125 of the Act requires that the connexion between the order other than by way of periodic payment should indicate the connexion between that order and the administrative assessment. To the extent that this is applicable to the wife’s application in this matter it would be dealt with by the proposition contended for by the mother if I were to accept it that the administrative assessment should not be changed as a result of the order that the father pay these additional amounts.

16. Section 125 is a proper reminder that a decision about the payment of the claimed additional sums is not to be dealt with in a vacuum but is to make reference to and be clearly identified with payments made under the Child Support assessment.

The nature of the application

1. It is probably helpful to set out again the claims in this regard by the wife which while stipulated in her Minute of Orders Sought as an interim order, are in fact sought on a permanent basis as she informed me at the beginning of the trial. 

   1.    That the Husband forthwith does all things, i.e. sign all documents necessary, pay all outstanding school fees and continue to pay school fees to keep the children enrolled at [S] School.

   2.    That the Husband forthwith pays for all orthodontic expenses for his children and that this is not be counted as child support.

   3.    That the Husband pays child support on a regular basis, i.e. fortnightly.

2. It was noted that the third of these orders sought was abandoned by the mother on the basis that since she had filed her affidavit, payments had begun to be regular.

3. Looking at order 1 sought then, amplified orally (as I would permit in the circumstances of the mother’s self-representation at least) and as understood by the father, what the mother sought was that the father should continue to pay school fees for all of the children at the S School.  The mother modified this in the course of her address to the Court to say that she would pay one half of such school fees.  Recouched therefore, the mother’s claim is that the father in addition to (and there was no doubt that this was so intended by her) to his ordinary or other obligation for child support would pay one half of the children’s (that is all of the children’s) school fees for the time that they attend at the S School.

4. It is to be noted that nothing in the orders sought requires the payment of any school fees if the children cease to be attending at the S School. It is further to be noted that there is no end sought to this payment. That is, it is not a payment that would be once off but is a payment that would need to be made periodically until all of the children had finished school. Whether or not the provisions of s 1117 of the Child Support Act would support such a departure is a matter for consideration below.

5. The second order sought relates to ““all”[19] orthodontic expenses for his children[20]…”.

   [19] My emphasis

   [20] My emphasis

6. This in its terms seeks payment of all orthodontic expenses for all of the children.  The only child who is receiving orthodontic treatment at the present time is L and the details of his treatment at least is in the only form that appears in any of the evidence records that the costs “are estimated to be $14,300”. 

7. The mother goes on to say “however this is before insurance rebate and is payable by instalments”.

8. No objection was taken to annexure B to the wife’s affidavit[21] and that appears to set out from the health insurance fund of the father the proposition that he would be able to recoup only $2,800 of whatever the total costs of L’s orthodontic work may be.  There is no reason to expect that he would not recoup that amount. 

   [21]P 41 of the ETB

9. Accordingly, that would mean, translating the wife’s application as best I might, that he would be obliged to pay in respect of L, $14,300 less the $2,800.  In effect the wife’s application is that the husband should pay the sum of $11,500 in respect of L (and she would add in respect of any future expenses in relation to the other children) as and when such a claim might be made supported by invoices from the orthodontist.  Again, this would be in the nature of periodic payments as the full sum would not be required at any one time.  Not that in my opinion anything turns on that issue in this case.

10. It is to be noted however, as was pointed out by the lawyer for the husband[22] that the evidence only relates to L.  I accept that submission and the application cannot be taken validly to support any contention that there should be a generalised agreement or requirement for the father to pay unspecified amounts into the future contingent upon the other children requiring orthodontic assistance when such is not presently indicated by any of the evidence before me. 

    [22] [71] of submissions

11. Before leaving the form of the orders sought it should be noted that annexure 8 of the wife’s affidavit (again not objected to and hence in evidence before me) sets out from the S School the expenses that will likely be incurred in relation to school fees.

12. The father’s position broadly in relation to both requests to payments as now redefined is that they should only be counted as part of his child support assessment liability and should not be in addition to it. 

13. Properly construed therefore, the wife’s application is one arising first under s 116 of the Family Law Act that I should entertain an application for departure from an administrative assessment. This arises, she argues, on the basis that there are special circumstances in the case justifying she as a “carer entitled to child support” to apply for an order under division in relation to the children on the basis that she, as a carer, and the father as a liable parent are parties to an application pending in this Court which is a court having jurisdiction under the Act and that this Court should be satisfied that it would be in the interests of both the wife and the husband for the Court to consider “whether an order should be made under this Division in relation to the child in the specific circumstances of the case”.

14. In brief, the provision is designed to avoid the parties having to be engaged in parallel or multiple proceedings particularly in circumstances where the result of one set of proceedings may impact upon the result in the other.  The property proceedings in this matter are properly before this Court and may have been impacted by a determination under the Child Support Assessment Act for departure from the administrative assessment.  As it turned out, in the nature of the application for a division of property little it seems would turn on the outcome of the Child Support Assessment Act except to emphasise that the result of the property proceedings would not provide to the wife substantial funds such as would enable her to meet some of the expenses that she is presently claiming.  In fact, if anything the result of the property proceedings before the Court would demonstrate to the contrary.  The wife will have little in the way of capital and virtually no capacity to meet the additional expenses for education and orthodontics which were the subject of the Child Support AssessmentAct application.

1. The husband first argued that the words “special circumstances” where they appear in s 116 should be construed to preclude the application.

2. Mr Brown quoted from Gyselman & Gyselman[23] including the following:

   That is the intention of the legislature is that the court will not interfere with the administrative formula results in the ordinary run of cases.

   [23] In the Marriage of Gyselman (1992) FLC 225.

3. To the extent that it is suggested that this supports the proposition that this Court should not consider the application for departure from child support in this matter, I reject that contention.  There are, as in every case, some unique factors relating to this application and there are some that might be submitted simply leave the case as one in the ordinary “run of cases”. 

4. In my opinion, it would be a travesty if in circumstances where the matters were before the Court were substantially argued over a long period, whether parties had incurred legal expenses of some significance (it appears the wife’s legal expenses were in the order of $50,000 and one might infer that the husband’s were at least of that size if not more) that I should send them away even if they were to represent themselves in proceedings before the Registrar and then possibly before the SSAT to resolve a dispute that is easily capable of being dealt with before me on the evidence that has already been assembled. If that were not to be enough in itself the fact that the property dispute in this matter whether so predicted by the parties or not, resulted in such a minor adjustment between the parties because of the nature of the property involved that it would be inappropriate not to have the court deal with the matter under s 116.

5. Furthermore, given that notwithstanding that the trial had originally been set down for four days it was completed within a matter of a few hours, again it would be sensible and appropriate and proper to find that these factors constituted special circumstances which would at least predispose the Court (if it were not otherwise of that opinion) to regard the circumstances as special and requiring immediate attention.

6. Those factors having been said, I consider that it is appropriate that the Court should deal with the matter under s 116 and consider what amounts to a departure order pursuant to s 117 of the Child Support Assessment Act. 

7. In those circumstances, as is pointed out by Mr Brown[24], on behalf of the father, there is a three staged approach which was mandated by the Full Court in Gyselman & Gyselman[25] which might be summarised (or paraphrased) as follows:

   a)That the Court must determine that there is a ground for departure in accordance with subsection 117(2).

   b)That it would be just and equitable for there to be such a departure and;

   c)That it would be otherwise “proper”.

   [24] [81] and following of his submissions

   [25] In the Marriage of Gyselman (1992) FLC 92-279.

8. I will deal with each of these in turn.

9. First there is a need for the Court to find “special circumstances” of the case and then to determine that the costs of maintaining the child and children are significantly affected because s 117(2)(b)(ii) the children are being cared for, educated or trained in the manner that was expected by their parents or in relation to orthodontics by s 117(2)(ia) the special needs of L.

10. Alternatively, that in the special circumstances of the case the application of the formula would result in “an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child[ren]”, (ia) because of the income and financial resources of the father (and inferentially of course of the mother) or (ib) because of the earning capacity of the father.

11. The application of these matters gives rise to a consideration of the claim by the father that he could not afford to make the additional payments.  It was not significantly in dispute that L required orthodontic work and in the past the father had indicated a willingness to make such a payment if he were able to do so.  His position at trial however was that he would not have the means and capacity to make the payment and that in any event he should not be required by law to do so. 

12. So far as the school fees are concerned the father asserted at trial that he was opposed to the children’s attending the S School and that he did not have the capacity to meet the fees. 

13. His evidence in relation to this primarily came from his Financial Statement.  This was a document (commencing at ETB 303) which set out his average weekly income as $3,309.  It also indicated total personal expenditure of $4,209.  The component parts to his income were asserted to be a salary of $3,048 a week together with a motor vehicle lease benefit of $261 providing the total of $3,309. 

14. I digress to indicate that the father assisted the mother’s claim to some extent by tendering H1 which was agreed by all to be the current child support assessment.  That recorded his income as being $3,320 (from a figure of “2014 taxable dollars 224 (638)”).  That assessment issued on 15 September 2014 which was some days before the husband swore as to his financial circumstances in his Financial Statement on 29 September 2014.  It is not immediately obvious how the discrepancy between the two documents might be explained.   

15. Part of the discrepancy was identified during the course of submissions, after some questions from me to Mr Brown, on the basis that the husband had received (as he had deposed in his affidavit material) a bonus payment which was not separately disclosed in the Financial Statement. 

16. When I mentioned “disclosed” I meant generally he agreed that he received (or might receive perhaps more accurately in any year) a bonus payment.  In this particular year he received his bonus payment on 27 September 2014 as was admitted by Mr Brown on his behalf (a fact which Mr Brown told the Court that he knew).  This was some two days before he signed his Financial Statement without disclosing the payment of that bonus.  It was admitted during the course of submissions that the bonus involved was some $33,000.  This is a substantial additional payment to that set out in the Financial Statement.  That amount of course was in fact from a gross amount of $58,464.  It was said that from that sum on a net basis of $37,118.63 was deducted his normal pay of $3,700 producing the $33,000 net which was referred to above. 

17. The $3,700 does not align with the figures in the Financial Statement or that on exhibit H1.

18. Leaving aside those discrepancies which were matters entirely within the control of the husband, it appears that the net figure of some $33,000 was expended in the two days between its payment and the signing of the Financial Statement on the payment of unspecified debts.  One might surmise that those debts were his legal expenses as none is recorded as outstanding in his Financial Statement.  However, it does not matter very much what the sums were expended upon. What is of deep concern to me is the fact that there was no disclosure of this transaction which Mr Brown thought apparently, and submitted was all right because the net effect was a zero sum in or out because the whole of the funds were expended on debts. 

19. With respect to Mr Brown, his failure to inform the Court of something which he knew about and which was relevant to the proceedings and which had not been the subject of evidence before me is a matter of concern in itself.  Mr Brown’s duty as an officer of the court is, in my opinion, clear. 

20. Of perhaps more fundamental concern is the fact that the husband chose not to make the disclosure when there was unquestionably a duty upon him to make a full and frank disclosure. 

21. In such circumstances, given that there is nothing to suggest that the husband will not continue to receive substantial bonus payments in every year. Given that the interrelationship between his bonus and the amounts disclosed as his income is not adequately explained, the husband cannot complain and should not be heard to complain if the inference is drawn that he has a substantial sum of money in every year which would enable payments such as those claimed by the wife (if they are legitimate of course) to be met without there being any serious interference with his capacity otherwise to maintain himself and to meet his other financial obligations.

22. Hence in the special circumstances of this case, it seems to me that an argument on the part of the husband that he has no capacity to meet the amounts claimed must properly fail. 

23. Turning to the second matter required, under s 117, the question that needs to be responded to is whether it would be just and equitable to make the order or orders that are being sought. This involves considering the nature of the duty of the husband to maintain the children; the proper needs of the children and the income; property and financial resources of each parent parties to the proceedings; the earning capacity of each parent; the commitments of each parent that are necessary to enable in this case the father to support himself or any other child or any other person that he has a duty to maintain; and any hardship that would be caused to the child or to the liable parent (relevantly) by the making of or refusal to make the order.

24. In this matter, the nature of the husband’s duty is not in issue.  Moreover, his earning capacity must be resolved as I have indicated above.  The capacity of the mother to contribute is identified by her having obtained employment and the limited amounts which that has produced in terms of income.  I am not satisfied that there is any proper basis for saying she is not working to capacity.  The evidence would not support such a conclusion.

25. It is difficult to see in the circumstances when the husband’s expenses as outlined in his Financial Statement might properly be reduced by reference to his legal obligation to support his own children and his chosen obligation (or perhaps oral obligation which he acknowledges) to contribute to the support of his step-children.  It is hard to see that any hardship would be caused because of the additional sums paid by way of bonus that are referred to above and there would be hardship it seems to the children if the payments were not to be made. 

26. In this connexion I turn to a number of contentions as follows:

    a)Is it appropriate that the children should attend a private S School involving the payment of expenses.

27. Tellingly in this regard the mother gives evidence of the fact that the children have always attended S Schools notwithstanding there had been several changes of location.  It is not suggested that the husband in any way strongly disagreed with that in the past.  Moreover in relation to the children’s current attendance at an S School the husband signed the enrolment form.  It appears that his submission and possibly his evidence, although the evidence of it is little, is that he felt he had no choice except to sign the enrolment form.  I do not accept that proposition.  Accordingly, in my opinion, it is reasonable to say that the children’s education at an S School is consistent with the children being “… educated or trained in the manner that was expected by his or her parents”.[26] 

    [26] Section 117(2)(b)(ii)

28. I also accept that the orthodontic work referred to (given that the father does not object to the performance of the work merely to whether he ought to be required to pay for it or not) falls within the “special needs of the child”[27]. 

    [27] Section 117(2)(b)(ia)

29. Returning therefore to the question of whether it would be just and equitable it seems to me that on a proper construction of the provisions of the Child Support Assessment Act it would be in the circumstances unjust and inequitable if the mother were obliged on her vastly inferior income to meet these additional expenses which were properly a matter that should be taken into account particularly in circumstances where the result of the property division proceedings in this matter leaves the mother with little if any capacity.  The result of the property proceedings in effect may render the mother liable to bankruptcy for the reasons that I have set out above. 

30. Finally, it is necessary that I should have regard to whether the order is otherwise proper.  

31. In this regard it is necessary that I should take account again of the nature of the duty of a parent, in this case the father, to maintain the children.  This is not a matter that was put into issue.  And to consider the effect that the making of the order would have on the entitlement of relevantly any of the parties involved or the child to an income tested pension allowance or benefit.  No evidence is put forward to suggest that any of these matters would be relevant to these proceedings.

32. Accordingly, it seems to me that the mother has made out a proper case for there to be a departure order in the terms that I might reasonably construe that she meant by her application but that would confirm it to the payment of one half of the school fees in respect of all children on a continuing basis without effecting the husband’s liability under the Child Support Assessment and in respect of L’s orthodontic work as it falls due.

33. I shall make orders accordingly.

Annexure A

That pending further Orders:

1. That the Husband forthwith does all things, i.e. sign all documents necessary, pay all outstanding school fees and continue to pay school fees to keep the children enrolled at S School.

2. That the Husband forthwith pays for all orthodontic expenses for his children and that this is not be counted as child support.

3. That the Husband pays child support on a regular basis, i.e. fortnightly.

4. The base amount of SIXTY NINE THOUSAND DOLLARS ($69,000.00) is paid out to the Wife immediately in lieu of Superannuation split of Husband’s interest in W Bank Superannuation Fund (“the W Bank Superannuation Fund”).  This amount can be paid in two instalments according to Husband’s bonus payment this year and next year.  

5. The Wife shall retain in her possession and ownership, the Husband shall relinquish any claim he may have in respect thereto and shall do all acts and sign all necessary documents to transfer to the Wife all of the Husband’s right, title and interest in and to the following:

   a)The Wife’s Hesta Super superannuation entitlements;

   b)The Wife’s Australian Ethical Super superannuation entitlements;

   c)The furniture and personal effects presently in the Wife’s possession;

   d)The proceeds of the sale of the campervan sold by the Wife;

   e)The Kia motor vehicle.

6. The Husband shall pay, be liable for and indemnify the wife in respect of the following:

   a)The Husband’s W Bank Mastercard debt;

   b)The Husband’s W Bank personal loan;

   c)The Husband’s GE Finance personal loan;

   d)The Viridian line of credit;

   e)The debit arising from the sale of the property at Village M.

7. That the Husband’s application for Wife to pay the Husband’s costs of and incidental to this Application be dismissed.

8. That the Wife forgo any interest in X Business (“the business”) in lieu of the Husband indemnifying her from any debt on any loans (Point 6.) and any debt on any loans arising from the sale of Village M property, plus doing all acts and signing all necessary documents to continue the children’s attendance at S School.  That the husband pays half of school fees over and above child support, alternatively pay whole school fees and ancillary costs to the children’s attendance at S School and half being counted towards child support.

Annexure B

Property and Spousal Maintenance

1. That the Husband and Wife do all acts and sign all necessary documents to effect the sale of the business known as X Business (“the business”) and the property upon which the business is carried on at B Street, Town Y in the state of New South Wales being real property described as Lot … in Deposited Plan …, Parish of …, County of …, Folio … (“the Y property”) upon the following terms:

   a)The business and Y property shall be listed for sale with one business broker or real estate agent;

   b)The Husband and Wife shall do all acts and sign all necessary documents to list the business and Y property with such business broker or real estate agent;

   c)The Husband and Wife shall do all acts and sign all necessary documents to effect the sale of the business and Y property including the signing of all Contracts of Sale, transfers, real estate agent authority forms, business broker authority forms, mortgage discharge forms, solicitors’ authorities and other documents required to be signed to effect the sale;

   d)The business and Y property shall be sold together.

2. Upon completion of the sale of the business and Y property the Husband and Wife shall do all acts and sign all necessary documents to pay the proceeds of sale of the business and Y property as follows:

   a)Firstly to pay the business broker’s commission and legal costs of the sale;

   b)Secondly to pay in full the mortgage to the ANZ Bank secured upon the title to the Y property including the business loan;

   c)Thirdly the balance to be paid as to a ONE THIRD (1/3) share thereof to D PTY LTD as Trustee for THE MANSELL FAMILY TRUST (“The Mansell Family Trust”), a ONE THIRD (1/3) share thereof to MS G and MR G and a ONE THIRD (1/3) share thereof to MR C and MS C.

3. The Husband and Wife shall do all acts and sign all necessary documents to pay and distribute the proceeds of sale of the business and Y property received through The Mansell Family Trust by way of distributions under The Mansell Family Trust as to THIRTY PER CENT (30%) thereof to the Husband and SEVENTY PER CENT (70%) thereof to the Wife.

4. The Husband shall retain in his possession and ownership, the Wife shall relinquish any claim she may have in respect thereto and shall do all acts and sign all necessary documents to transfer to the Husband all of the Wife’s right, title and interest in and to the following:

   a)The balance of the Husband’s W Bank Superannuation Fund entitlements following the superannuation split effected under the terms of these Orders;

   b)The furniture and personal effects presently in the Husband’s possession.

5. The Wife shall retain in her possession and ownership, the Husband shall relinquish any claim he may have in respect thereto and shall do all acts and sign all necessary documents to transfer to the Wife all of the Husband’s right, title and interest in and to the following:

   a)The Wife’s Hesta Super superannuation entitlements;

   b)The Wife’s Australian Ethical Super superannuation entitlements;

   c)The Wife’s AMP Super superannuation entitlements;

   d)The furniture and personal effects presently in the Wife’s possession;

   e)The proceeds of sale of the campervan sold by the Wife;

   f)The Kia motor vehicle.

6. The Husband shall pay, be liable for and indemnify the Wife in respect of the following:

   a)The Husband’s W Bank Mastercard debt;

   b)The Husband’s W Bank personal loan;

   c)The Husband’s GE Finance personal loan.

7. That a base amount of SIXTY NINE THOUSAND DOLLARS ($69,000.00) is allocated, as required by Section 90MT(4) of the Family Law Act 1975 (“the Act”) to the Wife out of the Husband’s interest in W Bank Superannuation Fund (“the W Bank Superannuation Fund”).

8. That in accordance with Section 90MT(1)(a) of the Act:

   a)The Wife is entitled to be paid the amount calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (“the Regulations”) using the base amount referred to in Paragraph 7 of these Orders; and

   b)The Husband’s entitlement and the entitlement of such other person to whom a splittable payment may be made to payments out of the Husband’s interest in the W Bank Superannuation Fund, is correspondingly reduced.

1. That the Trustee of the W Bank Superannuation Fund shall do all acts and sign all necessary documents to:

   a)Calculate in accordance with the requirements of the Act, the entitlement created by paragraph 8 of this Order, and

   b)Pay the entitlement whenever a splittable payment becomes payable out of the Husband’s interest in the W Bank Superannuation Fund.

2. That this Order have effect upon the operative time and the operative time is the date four (4) business days from the date of service of a copy of the sealed Orders upon the Trustee of the W Bank Superannuation fund.

3. The Wife shall do all acts and sign all necessary documents to implement and carry out the terms of these Orders.

4. In the event the Wife defaults in the doing of any act and/or the signing of any document as is necessary to give effect to these Orders then a Registrar of this Honourable Court is hereby appointed pursuant to Section 106A of the Family Law Act 1975 to do all acts and execute all necessary documents in the name of the Wife to give validity and operation to the terms of these Orders.

5. That the Wife’s Application for spousal maintenance be dismissed.

Child Support

1. That the Wife’s Application for the Husband to pay the school fees and ancillary costs relating to the children’s attendance at the S School in addition to the child support payment required pursuant to the administrative assessment of child support be dismissed. 

Costs

1. That the Wife’s Application that the Husband pay all costs associated with L’s orthodontic treatment with such payment to be in addition to the child support required to be paid by the Husband pursuant to an administrative assessment of child support be dismissed.

2. That the Wife pay the Husband’s costs of and incidental to this Application to be assessed.

3. For such further or other Orders as to this Honourable Court may deem meet.

I certify that the preceding one-hundred and twenty-seven (127) paragraphs are a true copy of the reasons for judgment of the Honourable Deputy Chief Justice Faulks delivered on 30 October 2014.

Associate: 

Date:  30 October 2014