HODGES & ROSE
[2014] FamCA 430
•23 June 2014
FAMILY COURT OF AUSTRALIA
| HODGES & ROSE | [2014] FamCA 430 |
| FAMILY LAW – CHILDREN – Parenting orders – dispute over number of nights. FAMILY LAW – PROPERTY SETTLEMENT – Property, spousal maintenance and child support orders – Husband high income earner. |
| Child Support (Assessment) Act 1989 (Cth) Family Law Act 1975 (Cth) |
| Bevan and Bevan (2014) FLC 93-572 Chapman & Chapman [2014] FamCAFC 91 Coghlan and Coghlan (2005) 33 Fam LR 414; (2005) FLC 93-220 Stanford v Stanford [2012] HCA 52; (2012) 293 ALR 70 Watson & Ling [2013] FamCA 57 |
| APPLICANT: | Mr Hodges |
| RESPONDENT: | Ms Rose |
| FILE NUMBER: | MLC | 1454 | of | 2013 |
| DATE DELIVERED: | 23 June 2014 |
| PLACE DELIVERED: | Melbourne |
| PLACE HEARD: | Melbourne |
| JUDGMENT OF: | Cronin J |
| HEARING DATE: | 20, 21, 22, 23 May 2014 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Dixon SC with Ms Patterson |
| SOLICITOR FOR THE APPLICANT: | JH Legal Pty Ld |
| COUNSEL FOR THE RESPONDENT: | Mr Atkinson |
| SOLICITOR FOR THE RESPONDENT: | Clancy & Triado |
Orders
The parties have equal shared parental responsibility for the children J born 2000, B born 2002 and L born 2003.
In each alternate week (commencing with a continuation of the existing pattern), the children live with the husband from the conclusion of school on Friday to the commencement of school on the following Tuesday.
That save as set out below, the children live with the wife at all other times.
That paragraphs 2 and 3 be suspended (including during the middle of any such period) during the following times and the arrangements shall be as follows:
(a)During school term holidays and the long summer holidays, the children live with each parent for one half of the time. In default of agreement as to which half, they shall live with the husband during the first half in even numbered years and the second half in odd numbered years;
(b)For Mothers’ Day, the children live with the wife from 5 pm on the Saturday and she return them to school on the Monday morning whereupon if it is the father’s time under paragraph 2, he shall be responsible for them from the commencement of school on the Monday until the commencement of school on the Tuesday;
(c)For Fathers’ Day, the children live with the husband from 5 pm on the Saturday and he return them to school on the Monday morning whereupon if it is the mother’s time under paragraph 3, she shall be responsible for them from the commencement of school on the Monday.
For the purposes of the calculation of all school holidays and summer holidays, they will commence when school ceases and conclude at midday on the day before school resumes. Regardless of who has the children for the second half, the children are to be returned to the wife at midday on the day before school resumes.
For the purposes of the resumption of paragraphs 2 and 3, the parties shall continue the pattern as if it had not been interrupted by the holidays.
If changeover does not occur under these orders at the schools of the children, the parent whose time is about to commence shall collect the children from the residence of the other parent.
Unless the parties agree otherwise, communication about the children shall be by email.
If during the time the children spend with the husband under any of the paragraphs of these orders, he is unable to personally care for them for a period which will exceed 24 hours, he is required to notify the wife at least 24 hours beforehand and she shall have the right to determine whether or not the husband’s proposed arrangements are suitable. If she determines they are not, the children are to be returned to the wife only for the period that he is absent.
Pursuant to s 65DA(2) and s 62B of the Family Law Act, particulars of the obligations that these orders create, particulars of the consequences that may follow contravention of these orders, and details of assistance to comply with these orders are set out in the attached Fact Sheet, which forms part of these orders.
That by 4 pm on 4 August 2014, the wife pay to the husband $730,000 and provide to him a discharge of any liability he may in respect of:
(a) The joint share portfolio loan;
(b) The St George Share account loan; and
(c) The St George mortgage.
By the date shown in paragraph 11, in default of:
(a) The payment of the sum referred to in paragraph 11; and
(b)The provision of the discharges of liabilities referred to in paragraph 11,
the wife forthwith elect to either:
(i)Place the home at Suburb C on the market for sale on agreed terms and failing agreement by public auction to be held no later than 2 months later; or
(ii)Sell such shares as are held in the share portfolio to satisfy the payment of the sum referred to in paragraph 11 together with interest according to the Family Law Rules 2004 but also to enable the provision to the husband of the necessary discharges of liabilities referred to in paragraph 11.
If the property at Suburb C is so placed on the market for sale, each party shall do all acts and things necessary to expedite the sale including:
(a)Instructing the relevant landscapers to complete the landscaping at their joint expense but for which the husband shall pay in advance to be reimbursed as set out hereafter;
(b)Appointing an agent and solicitor for the sale by agreement and in default of agreement, at the choice of the husband; and
(c)Determining any advertising costs, agents’ commissions, legal fees and expenses of the proposed sale by agreement and in default of agreement as determined by the husband.
Upon the settlement of the sale of the said home, the proceeds be applied as follows:
(a)First, to pay the costs, commissions and expenses of the sale referred to in paragraph 13;
(b)Secondly, to refund to the husband the costs of the completion of the landscaping;
(c)Thirdly, to discharge any encumbrance affecting the said home;
(d)Fourthly, to pay to the husband $730,000 plus interest under the Family Law Rules accrued from the date referred to in paragraph 11 until the payment is made; and
(e) Finally, to pay to the wife the balance.
Notwithstanding the terms of paragraph 14 hereof, if the Suburb C home sells for more than a gross amount of $2.15 million, the provisions of paragraph 14 (d) and (e) shall not apply. Instead, the net proceeds of the sale (after taking into account the provisions of paragraph 14 (a), (b) and (c)), shall be added to the values of the other assets and liabilities as set out in paragraph 154 (but not 155) of the reasons for judgment delivered this day and the new net total shall be divided as to 70% to the wife and 30% to the husband and adjustments shall be made accordingly and the appropriate sums then paid from the sale proceeds of the Suburb C home.
That save as otherwise provided by these orders, each party otherwise retain and the other party relinquish any interest in:
(a)Any asset in that party’s name or possession at the time of these orders; and
(b)Any superannuation interest in which the party is named as member in any superannuation fund.
That by way of spousal maintenance, the husband pay to the wife $500 per week for a period of 3 years but the first of such payments not be made until 1 August 2014.
That paragraph 4 of the orders made on 23 April 2013 is discharged as and from such date as would have calculations show that there is now no money owing under that order.
Pursuant to s 118 of the Child Support (Assessment) Act 1989 (Cth), there be a departure from the administrative assessment of child support issued on and dated 13 May 2014 for the period of 1 June 2014 to 31 August 2015.
For the purposes of paragraph 19 of these orders, the Registrar of Child Support shall apply the formula under the Act with the following variations:
(a) The husband’s adjusted taxable income is fixed at $552,500;
(b) The wife’s adjusted taxable income is fixed at $38,428; and
(c) The husband’s care percentage is fixed at 28.5%
Pursuant to s 124 of the Child Support (Assessment) Act 1989 (Cth), until each of the children referred to in paragraph 1 attains the age of 18 years, the husband pay either directly to the relevant provider or to the wife if she establishes that she has made the payment, the following:
(a)All school fees and compulsory school expenses at the current schools or such other schools as the parents agree; and
(b)All medical, hospital, orthodontic, dental, physiotherapy and psychology expenses for the children not covered by insurance provided the husband (pursuant to his obligations arising by virtue of paragraph 1 of these orders) has agreed to the treatment.
Further and pursuant to s 124 of the said legislation, the husband pay to the wife on 1 July in each year, an amount of $2,000 to be paid by the wife towards the health insurance cover of the children and for that purpose:
(a)The wife maintain the health insurance cover for the children and provide evidence to the husband should he so request; and
(b)The payment of the $2,000 shall be indexed annually and increased according to the Consumer Price Index (all States).
None of the payments referred to in paragraphs 21 or 22of these orders shall be credited against any administrative assessment of child support.
That save as to the parenting orders set out above, all other extant parenting orders are discharged.
That all applications are otherwise dismissed.
IT IS CERTIFIED:
That pursuant to Order 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.
All documents produced under subpoenae should be returned to the recipient of the subpoena and any exhibits may be returned to the parties.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Hodges & Rose 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 MELBOURNE |
FILE NUMBER: MLC 1454 of 2013
| Mr Hodges |
Applicant
And
| Ms Rose |
Respondent
REASONS FOR JUDGMENT
The parenting orders sought by both husband and wife in this proceeding include a provision that they have equal shared parental responsibility for their three children.
Section 65DAA of the Family Law Act 1975 (Cth) (“the Act”) requires that where a court is to make the order sought by both of the parents in this case, it consider whether the time aspects of the children with the parents should be equally shared. Whilst the mandatory provisions require a number of considerations such as best interests and practicability of spending equal time, the parents here have chosen to set the parameters of the litigation. The husband has asked the Court to make an order that he have five nights in a block period per fortnight with the children whereas the wife has sought that it be limited to four.
The wife went one step further and suggested it should be four nights per fortnight plus one evening in the alternate week from after school until just after the evening meal. The husband rejected that on the basis that he felt that it was not appropriate for the children.
The Act also requires the Court to contemplate what is defined as “substantial and significant time” if equal time is rejected. Substantial and significant time means time that falls on holidays, weekends and week days which allows parental participation in a child’s daily routine as well as things of particular significance to the child and vice versa (s 65DAA(3)).
For the reasons that follow, I find that four nights in a block period per fortnight is in the best interests of these children and that that period satisfies the test of substantial and significant time. It is in their best interests but also reasonably practicable. The parents live within a manageable distance of each other and, despite their poor communication, do manage the current arrangements reasonably successfully. The fact that they disagreed about whether the arrangements should be carried out is a different matter and the subject of considerable focus in the wife’s case.
Importantly, I am satisfied that the arrangement would be one with which the children would also be happy and comfortable. Its impact will not be confusing or detrimental to them bearing in mind their various school and sporting commitments. I cannot find that there is a similar degree of comfort and certainty about five nights per fortnight in a block period.
In addition to their parenting dispute, the husband and wife also require the Court to determine financial matters. The wife sought virtually all of the property of the parties which on any view exceeded $2.5 million net but she also sought three years of spousal maintenance. In respect of the former, I do not find such an order would be just and equitable. In respect of the latter, the wife has satisfied me that she cannot support herself adequately without spousal maintenance but based upon the parties’ positions relating to child support and private school fees, I find that the husband only has a very limited capacity to pay and that could only be on the basis that his current income situation continues. I return to that situation below.
The parties and the children
The child J is aged 14, B is aged 12 and L is aged 10. They are the three children of Mr Hodges (“the husband”) and Ms Rose (“the wife”). In these proceedings, the husband was the applicant.
The husband is a financial professional. He is aged 50 years and a partner of one of the large professional firms. He earns a substantial income but obviously, that remuneration is dependent upon the fees he and the firm generate.
The wife is a health professional but has not worked in that field for some years. She has recently been granted registration as a health professional again but only on condition that she undertakes considerable retraining. She also has academic qualifications but for much of the lives of the children, she has been engaged in managing them and the home. A portion of the parties’ time was spent in the United Kingdom. As part of the husband’s then partnership commitments to the firm with which he is no longer a partner, he went to the United Kingdom and the wife and the children went as well.
This was the second marriage for the husband and the first for the wife. They commenced living together in 1997 and married in 1999.
The husband has four adult children from an earlier marriage two of whom he directly and indirectly supports or assists financially.
The marriage came to an end in early 2013. The parties had been in the United Kingdom from 2007 but the wife became unhappy and returned to Australia with the children at the end of 2010. She moved back into the former matrimonial home that had been rented out in the parties’ absence. The husband remained in the United Kingdom completing his professional obligations and returned to live in Australia permanently in August 2012. He then he rented alternate accommodation after a disagreement about whether he could move back into the home with the wife. It was clear by that time that the marriage was coming to an end if it had not already ended.
After separation, the husband and wife put in place various arrangements relating to both parenting and financial issues.
When the proceedings were begun by the husband, it was in the Federal Magistrates Court.
The first hearing in the Federal Circuit Court
On 23 April 2013, an interim order was made after a contested hearing at which both husband and wife were represented by counsel. Orders were made that:
(a)The children live with the wife;
(b)The husband’s time with the children be from Friday through to Sunday in week 1 and Monday evening to Tuesday morning in week 2.
The following orders were made which were either contentious or at least caused problems in the final hearing:
(a)“The husband pay the sum of $1000 per week into the wife’s nominated account for support of the wife and the children”;
(b)“The wife pay any additional cost for the landscaping over and above the amount agreed between the parties”.
The proceedings before me included both spousal maintenance and child support. Neither party was able to assist as to what power the learned judge was exercising to make Order (a) in paragraph 17 above. No published reasons were available although the parties had transcript which I gather was not decisively helpful and it was certainly not tendered in evidence.
The uncertainty about what the orders meant led to arguments between the parties. There may have been an application to the Child Support Agency by the wife for a child support assessment before April 2013 but there seemed uncertainty about it. No evidence was produced to confirm that an application had been made. To the extent there had been such an assessment, the parties could not agree on what the $1000 per week represented.
If an assessment had been in place, it was common ground that the Registrar in Child Support had not been served with a copy of the application that was before the Federal Circuit Court. Service upon the Registrar is required by the rules. It seems no evidence was led before the learned trial judge that would have satisfied s 139 of the Child Support (Assessment) Act 1989 (Cth). If that had been the basis of the order, the arrangement was to be a holding position until the proper assessment commenced. It was the husband who provided a copy of the April 2013 order to the Child Support Agency. For her part, the wife claimed the learned judge was exercising the spousal maintenance power and the $1000 per week was just that. She refused to adopt the husband’s position for registration and collection purposes by the Child Support Agency.
During the trial before me, there was no consensus as to how the Court should treat the April 2013 order. I find the only logical answer is that it was spousal maintenance. That is because there was no evidence of any assessment or indeed an application for one at that time. Absent such evidence, the only power that could have been exercised was the spousal maintenance power in the Act. Subsequently, the Child Support Agency issued an assessment that bore no resemblance to the order of April 2013. Section 119 of the Child Support (Assessment) Act requires the Registrar to implement the Court’s order and, as the husband was claiming it was child support, that did not seem to be what occurred. An assessment subsequently issued on the basis of the husband’s known taxable income position. That is another reason to consider it was spousal maintenance because the wife at that time had no income of substance and that to which she could refer, would not have enabled her to support herself adequately in any event.
What to do with the April 2013 order is a vexed question. In my view, as the husband has paid his obligation anyway, it should be discharged as and from now and to the extent that there are any arrears, they should be discharged. The power to make that order lies in s 83(1)(c) and (f) of the Act. The correct approach to discharging arrears is to deal with the position retrospectively.
I also have an application for a departure order from the new assessment and an additional application relating to school and other childhood expenses.
The second order in paragraph 17(b) above led to another dispute. The former matrimonial home has been partly landscaped. It is incomplete. There is a need for someone to pay about $57,000 to finish it. The husband offered to pay one half although that was not readily apparent from the original orders that he sought.
The April 2013 order required some form of agreement that was obviously never going to eventuate. Indeed, each consented to an order that they be restrained from making unilateral decisions about the landscaping but they also had to use their “best endeavours” to reach agreement within 14 days of 23 April 2013. Over a year later, no consensus had been reached.
The significance of this landscaping dispute was that the valuer of the former matrimonial home (who was not called as a witness) was said to have opined that the completion of the landscaping would increase the capital value. It was said to be far more of an increase than the cost of the unfinished task of the landscaping. This became an issue in cross-examination of the wife but as I propose to leave the property to the wife to retain if she is able to do so financially, it will be her problem unless the house is to be sold. If that occurs, and I propose to make a default order, common sense dictates that it is in both parties’ interests for the task to be completed.
June 2013 orders
By June 2013, the parties remained in dispute about all matters. Another Federal Circuit Court judge varied the husband’s time with the children by increasing it from Friday through to Monday and then giving him an evening meal with the children on the alternate Monday. An order was also made for the husband to spend time with the children during school holidays. Christmas holidays remained a problem but the learned judge did no more than say that if the parties could not agree, they could seek an order from the Court. They did not agree and they now still seek an order from this Court about the long summer holidays.
Orders August 2013
By August 2013, the wife was still pursuing child support and spousal maintenance issues. Those unresolved issues were fixed by the Federal Circuit Court for an interim hearing on 25 October 2013. Discovery was recorded on the August 2013 order as “incomplete and ongoing”. When the case came before the Federal Circuit Court for hearing on 25 October 2013, at which time both parties were represented by the same counsel who had appeared in April 2013, the proceedings were transferred to this Court because it was said to involve issues of “some urgency and complexity” and counsel estimated that it would take five days. That transfer lost the parties significant legal expenses and they also lost time. New counsel came into the case for the final hearing before me and it took just over three days.
The issues
The husband initially sought:
(a)To spend time with the children from the conclusion of school on Thursday until the commencement of school on the following Tuesday;
(b)One half of school term holidays;
(c)One half of the long summer holidays at times agreed and in default of agreement, for a block period of not less than two weeks dependent upon the husband being able to take leave from work;
(d)Various Christmas and New Year’s Eve arrangements on an alternating basis;
(e)A variety of ancillary orders including injunctions relating to attendance upon health professionals and non-denigration orders;
(f)A child support departure order but that it be in line with the periodic payments under the administrative assessment by the Child Support Agency and non-periodic payments for the children relating to school fees and compulsory school expenses but in respect of the latter, if the husband’s income fell below $400,000, the school be reconsidered based upon the affordability of the husband’s income;
(g)In respect of property, that the wife receive 65 per cent of the total “asset pool” or 55 per cent together with $156,000 worth of spousal maintenance being $1000 per week for a period of three years and that the wife otherwise retain the assets that she had, bearing in mind the need to satisfy the husband’s 35 per cent or 45 per cent as the case may be.
In final address, the husband altered the position relating to the children to have them from after school on Friday through to the commencement of school on the following Wednesday morning and for one half of the long summer holidays in one block period.
The husband’s senior counsel’s final address also abandoned most of the injunctive orders save in relation to the attendance of the children upon health professionals.
In relation to property matters, the husband’s final position was that the landscaping be done by 31 July 2014 and the cost be borne equally by the parties, paid initially by the wife and adjusted in the final payment by the wife to the husband. The husband also sought default orders in relation to the house in the event that the wife did not satisfy his financial entitlement.
In relation to child support, the husband sought an order that the order made on 23 April 2013 be discharged including as to arrears if it was treated as a spousal maintenance order. He sought orders that the May 2014 assessment be fixed at $673.21 per week but after June 2014, it be as per the assessment by the Agency. He then sought orders that he otherwise pay all school fees and compulsory school expenses and $2000 per annum indexed annually for private health insurance cover for the children. However, he repeated that there be a $400,000 gross cut off in terms of his salary for his school expenses obligation relating to the private schooling. He sought that it be some form of self-executing order.
The wife’s position did not alter during the trial. She sought:
(a)That the husband spend time with the children from the conclusion of school on Friday to the commencement of school on the Tuesday morning and one evening meal on the Monday night of the alternate week;
(b)That the parties each have the children for half of all school holidays;
(c)That the long Christmas holidays be shared but on a week-about basis absent some other agreement between them;
(d)Specific orders in relation to the discrete Christmas period;
(e)Importantly, that the husband be in substantial attendance during his time with the children and in the event that he was unable to care for the children for a period in excess of 24 hours, he give her first option to care for them;
(f)That for the purposes of the parenting orders, the husband collect the children from her residence (if not at school) and return the children to her residence at the conclusion of the time unless otherwise agreed;
(g)In respect of property that she retain the home subject to the registered mortgage, the share portfolio with its loan and that the husband be responsible for the parties’ joint Bank of Melbourne overdraft loan of approximately $73,000 and otherwise the parties keep what they had;
(h)That the husband pay her $1000 per week by way of spousal maintenance for three years;
(i)That by way of child support, the husband pay $333.33 per child from 1 June 2013 until the children attain the age of 18 years or completed high school together with all costs, fees and expenses associated with the children’s education, extra-curricular activities, hospital, medical and dental insurance costs and the gap payments in relation to those health costs.
The evidence relied upon
The husband relied upon two affidavits that he swore on 30 January 2014 and 23 February 2014 respectively along with a financial statement of the same date but also a financial statement that he was given leave to file on 20 May 2014. He relied upon the expert evidence of Mr E relating to chattels and the evidence of psychologist Dr K.
The wife relied upon an affidavit filed 14 February 2014 as to her evidence, a financial statement and a document which contained answers to the husband’s specific questions.
The only witnesses required for cross-examination were the husband, the wife and Dr K.
The standard of proof
There was no dispute that the standard of proof was the balance of probabilities and I have applied that in respect of findings I have made. No party sought that there be any rulings on objections to evidence.
The parties as witnesses
Both parties subjected themselves to searching and probing cross-examination. Despite the notation to the August 2013 orders about discovery, the wife complained right up to the point of the commencement of the hearing that she had not been given comprehensive documents relating to the financial affairs of the husband. She referred to the reticence of the husband’s partnership firm to produce financial records yet she still proceeded to the trial. Her counsel complained the documents were still being produced as the trial commenced.
In cross-examination, the wife said she had no evidence that the husband had hidden assets. She was described by her counsel in final address as still having difficulty understanding where all the money had gone bearing in mind the high earnings of the husband. She was suspicious because of the husband’s seniority in his profession but also his very occupation. Her counsel justified her apprehension by referring to the fact that even the husband had conceded he did not fully understand his firm’s own financial payments to him. At one point, some modest discrepancy was described by the husband as possibly an overpayment.
With all of that said, I had ample opportunity to observe both the husband and wife. The husband was a good historian and readily explained financial records. He not only had a good memory but his answers were plausible.
The wife was troubled that so much of a large income earned by the husband had not shown up in more capital assets for them. The husband explained that on the basis of the affluent lifestyle the parties had led. Documents were tendered to show what his “package” was and it was noticeable that it included various allowances including school fees. It became apparent that the affluent lifestyle included extensive travel in Europe.
I am satisfied there is no missing asset and that the husband was an honest and accurate witness.
The wife’s understanding of the financial position coloured her instructions in the property, spousal maintenance and child support claims. What she pursued as fair, cannot accord with my understanding of what is just and equitable. With all of that said however, I found her an honest and thoughtful witness.
It is important to record that the three children still lead privileged lives. They attend two of Melbourne’s well-recognised private schools. They have loving, dedicated and determined parents.
The statutory approach to a children’s matter
Section 60CA of the Act provides that in deciding whether to make a particular parenting order, the Court must regard the best interests of the children as the paramount consideration.
To assist in determining what is in the best interests, the Court has the benefit of parliament’s overview of the legislation. Section 60B provides that the best interests of children are met by ensuring they have the benefit of both parents having a meaningful involvement in their lives consistent with their best interests and that the children be protected from physical or psychological harm. The objects require the Court to consider ensuring the children receive adequate and proper parenting to enable them to achieve their full potential and to ensure that parents fulfil their duties and meet their responsibilities concerning the care, welfare and development of their children. Underlying those objects are principles that indicate a number of legislative desires. Among them are matters to which I shall turn below.
Section 64B(2) sets out the various orders that a court may make and s 64B(3) provides that the order may also deal with the allocation of responsibility for making decisions about major long term issues in relation to the children.
In determining what is in the best interests of a child, the Court is obligated to consider the matters set out in s 60CC of the Act. Those matters include:
· The benefit of the children having a meaningful relationship with both of their parents;
· The need to protect the children from physical and psychological harm;
· Any views expressed by the children, the weight to be given to which is dependent upon their maturity and level of understanding;
· The nature of the relationship of the children with each of the parents as well as other persons;
· The extent to which each of the parents has taken the opportunity to participate in decisions about major long term issues as well as spending time and communicating with the children;
· The extent to which a parent has fulfilled or failed to fulfil an obligation to maintain a child;
· The likely effects of changes in a child’s circumstances including the separation from a parent;
· The practical difficulty and expense of carrying out the arrangements relating to children;
· The capacity of each of the parents and other persons to provide for the needs of the children;
· The attitude to the children and to the responsibilities of parenthood demonstrated by each of the parents; and
· Whether it would be preferable to make an order least likely to lead to further proceedings.
In that checklist under s 60CC, I have left out such things as family violence and cultural issues because they are not relevant in this particular case.
As I remarked in discussion with counsel, there was very little dispute in these proceedings about those issues in s 60CC. Both parents were, and are, very child-focussed. Little separated the parents in terms of their ideals and desires for their children. They were not able however to agree on the time aspects of their involvement in their children’s lives.
The general evidence of the parties about parenting issues
It was the husband’s evidence that the wife worked up until the time that the child J was born and then took maternity leave and similarly after B’s birth. She then remained home caring for the children. The husband said that he did not work long hours at that time nor work on weekends and he assisted as best he could with the care of the children. The wife did not disagree with that save as to its extent but made reference to the many social engagements that came with the husband’s position.
The husband said that after the child L was born the wife returned to part-time employment which continued between 2000 and 2007 during which nannies were engaged. There was some dispute about the use of the word “nanny” but the evidence indicates that the wife at least had assistance in the household in the United Kingdom.
After moving to the United Kingdom in 2007, the husband said that his arrangements at work fitted around the children’s activities. The wife’s response was that this was a romanticised version of what happened. I find that it is most likely that both parties contributed to the best of their abilities and that it was the wife who was the primary carer of the children even though she might have been working and studying.
The husband also had obligations in the United Kingdom for one of the children of his earlier marriage and it was the wife’s evidence that that caused problems in the household. After the parties’ relationship soured and the wife returned to Australia, there was interaction between the parties and the children and various travelling arrangements were made backwards and forwards between the United Kingdom and Australia.
After the marriage came to an end, the husband said that the wife was restrictive on what time he could spend with the children and her response was that she denied ever saying that he could not be involved in such things as school pickups and drop-offs. Having regard to the evidence of Dr K and the statements to which I shall refer made to him by the children, it is more likely that the wife’s version is more accurate and comprehensive.
The husband said that he had all of the facilities in his home and the children were quite comfortable in that environment. He had two adult daughters from his previous marriage living with him and he provided them with financial assistance. None of that evidence was challenged by the wife.
The husband also referred to the fact that his two children from the first marriage had a good relationship with J, B and L. Again, the wife did not dispute those facts.
The evidence of Dr K
Dr K is a clinical and forensic psychologist. No party challenged his expertise. In this case, he had undertaken two reports to assist the parties and provide expert evidence to the Court.
Dr K noted the issues that were central from his first report were:
(a)The differences between the parents in their parenting approaches and personality styles;
(b)The mother had been the primary caregiver but the father had a well-established relationship with the children;
(c)There were differences between the parents with respect to their emphasis on the activities of the children which he saw as a reflection on the values of those parents;
(d)The extent of the activities had become an issue in the parenting dispute and that he thought that was potentially problematic for the development of the children as well as creating a burden for the parents which spilled over and affected the relationship between the children and the parents. His concern was that that had potential for long and short term difficulties;
(e)The children were a product of sound and positive parenting with high degrees of care and skill and they had led a privileged life.
Dr K thought the children would benefit from a greater involvement in the life of their father and that from a developmental perspective, bearing in mind their ages, it was appropriate to increase the time from what the parties had been doing (three days per fortnight) to immediately four days per fortnight and a move to five days per fortnight in six months’ time. Dr K thought that it would be simpler to have a one block period rather than the separated periods as advocated by the wife.
Dr K also thought that holidays and special days should be made clear and the parties should benefit from working with an experienced psychologist over the next several years to assist them in cooperating and communicating more effectively than they had in the past as well as adapt to Family Court orders.
Dr K saw the wife as somewhat anxious with divergent thinking. He assessed the wife as finding it difficult to reflect on her own position relating to the conflict of the family and the Family Court issues. My assessment was that the wife had difficulty accepting what had happened to her but nothing I observed indicated that she was not a competent parent. Nothing I heard indicated that she was destructive of the husband’s relationship with the children. My assessment was that the wife’s greatest difficulty was accepting that she might have to change her lifestyle because of the financial constraints arising out of the breakdown of the marriage.
Much of the focus of Dr K’s evidence related to the issue of the extensive activities of the children. Much of that coloured his observations of the children and to that issue I return below.
Dr K assessed the husband as presenting a “black and white” picture about his circumstances and he thought that that over-simplified the children’s circumstances. With that observation I agree.
Dr K’s conclusion was that the children had coped well with the arrangement that had been in place since 2013 and that the relationship between the husband and the children had solidified and strengthened. He thought that this related to the husband becoming a more regular part of the caregiving of the children. In addition, things had settled down.
In relation to the duration of time, Dr K noted that the child L missed her mother to some degree whilst in her father’s care but at the same time, valued her relationship with her father.
The child J told Dr K that it would not “bother” him if there was an extra night. The child B reported to Dr K that he “liked” the amount of time (bearing in mind that this assessment was done at a time when it was three nights per fortnight) and L was described by Dr K as “comfortable” about the amount of time involved.
Thus it can be seen that it was Dr K’s view that there should be an ultimate increase to five nights per fortnight from a development perspective. He was not prepared to recommend that it be an immediate move.
Whilst I accept Dr K’s overall assessment, I do not accept the basis of recommendation about time. The reason for that is that:
(a)The children’s views had been restricted to an increase but not the extent recommended by Dr K;
(b)All children were content with the existing arrangement;
(c)J had expressed concern about the fact that his father was not happy about taking the children to all of the activities in which they were involved. J thought that if his father became cross about something, he would make mention of the fact that he was driving them around everywhere to fulfil their sporting commitments;
(d)J had reported to Dr K that B had begun “coping better” with the time away from his mother and Dr K thought B was somewhat different from the other two children and possibly more aligned with his mother; and
(e)There was correspondence (Exhibit H9) between lawyers dated 5 September 2013 in which it was said that the husband had missed time with the children because of a trip to London. That that letter suggested that the husband had declined make-up time offered by the wife. The letter went on to suggest that the husband had missed Father’s Day. In the letter, reference was made to an agreement that the parties had reached with the assistance of psychologist Ms T that the husband would have “one-on-one” time with each of the children. I have inferred that a smooth transition to five days might not be all that simple even if things have improved.
Those matters suggest that if the basis of the recommendation of Dr K is about the future development of the children and that a further increase should be contemplated later in 2014, I do not have sufficient evidence to enable me to say that it is in their best interests immediately for that move to be made nor indeed should I crystal ball gaze that they will be able to overcome all of the problems just mentioned over the ensuing period of time. In my view, the better way to approach the matter is to see how the children progress and if the parties’ relationship improves, things will work themselves out naturally between the parties. It is also important to recognise that J is not far away from entering the final years of his schooling where demands will be placed upon him. That too will affect what time he spends with his father.
Based upon all of the matters including the statutory requirements to which I have already referred, it is my view that it is in the best interests of the children that the block period be limited to four nights. Whilst the wife still offered the Monday night in the alternate week, it would not be appropriate for me to order that in circumstances where the husband was emphatic in not desiring it.
The school and summer holiday periods
There was no dispute about term holidays. The parties agree on one half each. It is obviously an open inference that the wife accepts that the husband can care for the children for seven days (or possibly more depending on the duration of the term holidays). Dr K did not express any reservations about holiday time.
What is disputed concerned the long summer holidays with the husband wanting one half in a block period and the wife wanting a week-about arrangement if agreement was not reached. Whilst the wife indicated that the children had some difficulty settling into the husband’s home, that would not seem to be a problem in relation to holiday periods. She said that she proposed that each of the parties have one half of the holidays “either in block or in week-about periods”… “with the hope we can agree on some Christmas Day time each year”. It is the hope statement that causes me some concern. Clearly, the wife wanted a default position and the very fault that agreement about matters at the moment is, in my mind, doubtful, means that it is possible that the parties will not reach agreement as to the extent of the holidays which makes planning for them difficult. I consider the husband’s proposal the sensible one in that if there is no agreement, they half each and they alternate that one half each year. For holidays which begin in even numbered years, the wife should have the first half and the husband have the second half. In odd numbered years, the reverse should apply.
One would hope that the parties do not need to precisely calculate days (or even hours) for the purposes of deciding what is one half but if they have to, the holidays should be deemed to conclude at least by midday on the day prior to school resuming for the new year to enable preparation to occur.
The substantial attendance issue
There was some debate between the parties about the husband being absent and he was asked why it was that the children should not be returned to the wife if he was going to be away for any length of time. The argument descended into the length of that time and his response was that he had adult children in the household. I am not confident that that is a sensible solution bearing in mind the wife’s apparent lack of trust in those adults not to mention the fact that I do not have any evidence about their willingness to take on that responsibility. The most logical solution from my perspective is that if the husband is away for more than 24 hours, he immediately notify the wife before that 24 hour period commences and it should be a matter for the wife to decide whether the children should be returned to her or be cared for in the manner proposed by the husband.
The extra-curricular activities
In filing his outline of case, the husband sought an order that absent agreement, the children be restricted to “three extra-curricular” activities at any one time. The reason for this approach was evident from his evidence. He described the weekends of the children as “really jammed packed” with sporting activities organised by the wife. He said there was very little time for the children to relax and do fun activities together. In evidence, he produced a spreadsheet which, when eventually put to the wife (and read by Dr K), contained disputed details. Little could be confidently drawn from the husband’s chart. That said, the husband pointed to the fact that a large part of his time was spent transporting the children to and from these activities.
The wife did not dispute the extent of the activities even if she disputed the detail. She observed that she managed the activities but did concede there had been occasions where she had left the child L alone so she could collect the boys.
The wife’s evidence was marginally different from that of the husband. She had spoken to coaches of various sporting teams about how the children were managing. Her view, with which the husband appeared sceptical, was that there was a prospect of future professional involvement with one of the national football clubs by at least one of the boys. The husband did not consider his children to be potentially “elite” sports persons.
Although I have indicated earlier what I found to be in the best interests of the children and this particular issue was ultimately not a matter upon which a determination was required by the husband, I think it is important that it be mentioned because for a very large degree, I suspect it underpinned the position of the husband.
The issue was clearly highlighted by the evidence of Dr K. He spoke to the children as I have indicated and observed that he had never come across such extensive involvement like this before. He noted the children enjoyed their activities and, as they were in private schools, those activities were probably more extensive than they would otherwise be in less prominent schools.
There does not appear to be any evidence of detriment to the children either at school or at home. As I indicated, Dr K thought L was tired but the wife agreed that she sometimes became that way. She said that the boys had a real commitment to their sport and were very engaged in it. Her preference was to see such physical rather than sedentary activity.
In respect of activities outside of these sports, the wife thought they had ample “downtime”.
The husband thought the wife was placing the children under pressure to perform but also that these extensive commitments meant that the children were exhausted. The evidence does not assist me to make such a finding.
The wife pondered whether the husband was asserting that she was deliberately organising activities to thwart his relationship and she specifically denied that. The husband’s position was that the schedule was “overdoing it”. It must be remembered that the wife was the parent who reintroduced the children to Australian life after her return in late 2012. Whilst the husband did return at various times thereafter before coming back to Australia permanently, I find it was the wife who took on the major caring and organising role.
In his evidence, Dr K said that he thought the wife retreated to asking people who agreed with her whenever there was a conflict. The wife explained that on the basis that she spoke to coaches about the children. I accept that answer. In his recommendations, Dr K said that the central rationale was to reduce the reliance on structured activities which would enable the increase of other creative time for the children as well as increase the quality time between the children and the parents. Whilst logical and perhaps ideal, the recommendation was predicated on discussion and agreement between the parents. At the current time, that is unlikely. Just what these children would do as “creative” in substitution for their sport remains uncertain. The husband’s evidence was that they were already playing sports in a nearby park when they were in his care and not competing. He described them being involved in swimming and “mucking around” together in the swimming pool along with visiting family and friends. He proudly referred to them as skiing in New Zealand. Thus, although perhaps not structured, the activities were just as active bearing in mind that these were occurring during the period of time that the husband had had them either during the holidays or at the weekends.
I made some suggestions about each parent taking control and deciding what sports would be occurring in their respective households. That of course could lead to dissention and the “ogre parent” but it is not the Court’s role to police the extent of the activities unless there is evidence of an inappropriate impact on the child.
Dr K noted the children’s perspective because J told him that he felt the husband did not like taking them to training because he got frustrated with all the driving. B spoke about the inconvenience in not being able to get to a particular sporting event and occasionally missing something. L was tired because she had had a long week and lots of activities but I must take into account her age.
The child L is also the subject of medical observation in any event. She has a chronic conditions management plan monitored by a number of health professionals. That plan relates to her auditory processing difficulty. The plan recommends regular exercise and participation in sports whilst at the same time, regular times for sleep and rest. That report was prepared by L’s general practitioner in February 2014. No suggestion was raised in the evidence that L’s then lifestyle was seen by the health professionals as inappropriate.
Thus, on the evidence, a number of observations can be made:
(a)All children love their sport and are keen to participate;
(b)The extra-curricular activities may be structured but they do other activities of a physical but unstructured way as well;
(c)There is no evidence that this over-indulgence in activities is harming the children;
(d)The parties cannot agree on the placing of limitations.
In my view, the activities need thought by the parents not by the Court.
The legal issues
Section 61C provides that each of the parents of a child who is not of 18 years of age has parental responsibility for that child. That is always subject to any order of the Court.
Section 61D provides that a parenting order confers parental responsibility to the extent that it confers duties, powers, responsibilities or authority in relation to the child.
It is important to point out that s 61D(2) provides:
A parenting order in relation to a child does not take away or diminish any aspect of the parental responsibility of any person for the child except to the extent (if any):
(a)expressly provided for in the order; or
(b)necessary to give effect to the order.
In my view, absent some evidence of a parent deliberately thwarting another’s time and relationship, or a parent simply ignoring the adverse consequences of extensive activities, the Court should not step in to make an order of the type that would restrict parental organisation. Section 61D(2) contemplates just that.
Section 65D provides that in proceedings such as this, (and subject to the presumptions relating to parental responsibility) the Court may make such parenting order as it thinks proper.
“Proper” means appropriate for the purpose. The Court is required by s 60B(1)(d) to contemplate parents fulfilling their duties but at the same time, s 60B(2)(d) refers to parents agreeing about future parenting of their children.
Notwithstanding Dr K’s views, having heard how focussed the husband and wife are on their children, I find it would not be appropriate for the Court to interfere.
As I indicated, when the trial began, there were also arguments about injunctive orders. The husband through his senior counsel, ultimately agreed that they were not necessary save for a specific order preventing the wife from taking the children to a health professional without consent. In my view, the evidence does not support such a conclusion. There is no evidence that the wife has deliberately ignored the husband’s role in the lives of the children. There is evidence of a dispute about attendance on a psychologist but that was just a symptom of poor communication.
The husband seeks an order precluding the attendance on a psychologist without permission
It was the husband’s evidence that the wife had requested he consent to the child B attending upon a child psychologist. The husband’s perception was that B did not appear anxious and thus he did not consent to the appointment. He said he wanted to speak to the general practitioner first. In May 2013, another request was made so the husband spoke to the general practitioner who told him that although the wife had explained the symptoms she had seen, the general practitioner had not seen any anxious behaviour himself. The husband said that he did not see any anxious behaviour or such symptoms and he thought that it was all related to B being over-committed in activities. The wife did not accept that and made an appointment for the psychologist Dr M. Dr M did not see the need for any ongoing appointments and as far as the husband was concerned nothing arose thereafter.
All of that was responded to by the wife who said that to the extent she was being so criticised, she did not accept the criticism. She said she observed symptoms of anxiety and wanted to go to the psychologist to see whether there was something troubling the child. She said she was now happy that there was a general level of improvement. She said there was a recent incident at his father’s home where he wet the bed but there is no basis for me to be really concerned about this having regard to the fact that almost a year has gone by since the problem about the psychologist arose. For the reasons which are now articulated in this judgment, it is not appropriate for the Court to be interfering in this area. The parties should be able to recognise where a problem arises and where one party doubts the other, they should be examining the concern of the other parent rather than simply refusing the request based upon their own assertion that they have not seen such a problem.
Nothing I heard suggested that the wife would prejudice the health and welfare of the children. Both parties have sought an order for equal shared parental responsibility. I point out that upon the making of such an order (at their request) s 65DAC is taken to require each of the parents to:
(a)Consult with the other in relation to decisions about a major long term issue; and
(b)To make a genuine effort to come to a joint decision about that issue.
The parents have urged the Court to make that order. I indicated in discussion during the hearing that I was concerned about the level of communication and whether the parties could indeed fulfil that obligation. Despite that comment, in final address, both parties asked the Court to make the order.
Having regard to all of that, in my view it is not appropriate for the Court to make injunctions of the nature sought by the husband.
There is no dispute in this case about special occasions such as Father’s Day and Mother’s Day and I will make those orders.
A very minor dispute about which there was no evidence related to the exchange of the children. The wife’s position was that the children should be collected and returned by the husband whereas he suggested that the wife should collect the children from him at the conclusion of his period of time. I have no certainty as to where the parents will each be living in the future. For the reasons that follow in relation to financial matters, I have some doubt as to how long the wife can continue to live in the former matrimonial home and the husband is currently renting accommodation and has made it clear that he wishes to purchase a property. On the basis of that uncertainty, it seems the only logical conclusion I should draw is that the parties should share equally in the travelling for their children. I will make an order that the wife collect the children from the conclusion of any period with the husband if the children are not to be dropped at school.
The husband also sought that the parties use email correspondence to exchange information about such things as health, well-being, education and extra-curricular activities. In my view, it is not normally appropriate for the Court to make such an order about the means of communication. It is a matter for the parties to work out the most appropriate way for them to feel comfortable about their communication. Ideally, it should be orally and the wife indicated in evidence that she was prepared to contemplate that in the future but there was no other indication by either party that a first step was being taken. Because the relationship is still tense, I will order that the parties do communicate by email but with the very clear understanding that common sense needs to prevail sooner or later. To the extent that there is a problem which arises out of their communication, the parties can resort to the State Courts’ intervention order process.
Property
I turn then to property issues. In Stanford v Stanford [2012] HCA 52; (2012) 293 ALR 70, the High Court of Australia emphasised the importance of s 79(2) of the Act and observed that the Court should first determine whether it is just and equitable to make an order. The plurality said that the power to make a property settlement order was not to be exercised in an unprincipled fashion and that the question of whether it was just and equitable to make an order at all, was not to be answered by assuming that the parties’ rights or interests in property are, or should be, different from those that then existed. Section 79(2) of the Act provides:
The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
In Stanford (supra) the High Court of Australia set out how the Court should approach this issue. The plurality said:
41.Adherence to these fundamental propositions in exercising the power in s 79 gives due recognition to "the need to preserve and protect the institution of marriage" identified in s 43(1)(a) as a principle to be applied by courts in exercising jurisdiction under the Act. If the parties have made a financial agreement about the property of one or both of the parties that is binding under Pt VIIIA of the Act, then, subject to that Part, a court cannot make a property settlement order under s 79. But if the parties to a marriage have expressly considered, but not put in writing in a way that complies with Pt VIIIA, how their property interests should be arranged between them during the continuance of their marriage, the application of these principles accommodates that fact. And if the parties to a marriage have not expressly considered whether or to what extent there is or should be some different arrangement of their property interests in their individual or commonly held assets while the marriage continues, the application of these principles again accommodates that fact. These principles do so by recognising the force of the stated and unstated assumptions between the parties to a marriage that the arrangement of property interests, whatever they are, is sufficient for the purposes of that husband and wife during the continuance of their marriage. The fundamental propositions that have been identified require that a court have a principled reason for interfering with the existing legal and equitable interests of the parties to the marriage and whatever may have been their stated or unstated assumptions and agreements about property interests during the continuance of the marriage.
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).
43.By contrast, the bare fact of separation, when involuntary, does not show that it is just and equitable to make a property settlement order. It does not permit a court to disregard the rights and interests of the parties in their respective property and to make whatever order may seem to it to be fair and just.
As can be seen, there must a principled reason for the Court to interfere with the existing legal and equitable interests of the parties. It was not argued in this case that the husband had a specific equitable interest in the Suburb C property. The fact that the parties set up that legal structure without any reference to an equitable interest by the husband might be a basis to say (as the wife seemed to be saying) that there ought not be any alteration to the existing interest that she held. However, as will be observed from what their Honours said in Stanford, one basis to make an order is that there will no longer be a common use of property by the parties. In addition, the various assumptions that underpinned those property arrangements have now come to an end by the severance of the marital relationship. There was no evidence as to the reasoning behind the legal title structure but I can safely assume that the parties had a long term aim that this property would be their home and the home of the family.
In my view, there are good reasons here to depart from the title position which the parties created. Among those reasons is the fact that there were significant borrowings to enable the parties to acquire the property which could not have been attained without the benefit of the husband’s income stream. A similar conclusion can be drawn in relation to the share loan under which the husband was required as a guarantor. It is therefore not just the fact that the husband no longer has the use of what was otherwise the family home.
Similar discussions can be observed in Bevan and Bevan (2014) FLC 93-572 in which it was said that there would not be too many situations like Stanford but equally, the Court ought be careful about drawing inferences without evidentiary facts to support them. Assets are sometimes acquired for tax minimisation purposes or even asset-protection purposes. Equitable interests still arise under those arrangements and here, the parties set up their assets for purposes that suited them at the time. That situation no longer applies. In this case, there is sufficient evidence for me to be satisfied that there was a purpose for the title structure but that at all times both parties recognised the equitable interest of the husband. That conclusion can be drawn from the fact that the wife went to the husband for the purposes of obtaining his guarantee for the share loan. She recognised that at least to some extent, he had an interest in the home and she needed his financial guarantee. How all of these matters should be then approached once a decision is made that it is just and equitable to alter the interests, can also be seen in the very recent discussion in Chapman & Chapman [2014] FamCAFC 91.
Superannuation interests
Before dealing with the issues of property, it is helpful to observe that in this case, limited reference was made by the parties to their respective interests in superannuation. Neither party sought a superannuation splitting order. In each case, the parties prepared a schedule of assets and liabilities and included superannuation. In the husband’s case, he added it with the other assets and came up with a total whereas the wife separated it out.
The Full Court in Coghlan and Coghlan (2005) 33 Fam LR 414; (2005) FLC 93-220 noted that Act does no more than provide that superannuation interests are but another “species” of asset in addition to the property defined in s 4(1) of the Act. The Full Court observed that because of the obligation under s 79(2) to make a just and equitable order, the Court should, wherever there is a superannuation interest, apply the provisions of s 79(4) to which I shall turn below. As to whether it is necessary to slavishly examine s 79(4) discretely in a superannuation interest case is open to debate (see Chapman (supra)). The Full Court said that that approach should be taken whether or not a splitting order was sought. Here, because of the age of the parties, their significant number of years away from retirement and the very modest amounts that they have saved through their superannuation funds, the balances reflected in their respective balance sheets are only minimally relevant. Whilst a consideration of s 79(4) relating to how those sums came into existence and the relevance to them of the economic status of the parties as individuals and as a family is relevant, the first and critical question is whether or not it is just and equitable to make any order at all in relation to those interests.
Because of the fact that the parties set up their superannuation funds that way and for the reasons that I have just set out, are of only minimal value, I consider it is not just and equitable to make any order at all relating to their respective interests in the superannuation funds.
In cross-examination, the husband conceded that he had not been a big fan of superannuation and for a man who has significant seniority in the financial profession and who has otherwise had a family that enjoyed a reasonably affluent lifestyle, it would be inappropriate to simply add all of the assets together and include superannuation amongst them and then divide them on a percentage basis where the parties themselves set them up in that particular way. In my view, no order should be made about superannuation and it should be ignored (save for the consideration in s 79(4)(e) to which I shall turn). It would be inappropriate to treat the superannuation in the wife’s hands as an asset of the same calibre as the assets that are or otherwise will be in the hands of the parties. The disparity between the parties’ superannuation is such that I would be unlikely to make any alteration in any event because the disparity roughly accords with how I consider the assets of the parties should otherwise be divided.
Is it just and equitable to make an order at all?
It is clear that the wife’s position was that there was no justifiable basis to make any significant adjustment order. The husband’s position was that to allow him to walk away with no property was not just and equitable. Clearly, the parties could not have had the significant value in the former matrimonial home had they not borrowed funds and for which both parties were responsible. In addition, the major share portfolio was in the wife’s name alone but she could not have undertaken that investment without the husband’s guarantee to the lending authority. It must be therefore just and equitable for an adjustment to be made.
The general evidence in relation to property matters
Each party set out in their respective trial affidavits, their perception of the financial position when their relationship began. That evidence descended into detail about savings, superannuation, cars, real property and the money owed to the husband by his professional firm.
The husband was cross-examined about his 1997 tax assessment showing $29,967 and the wife’s counsel observed that there was an inconsistency between that document and the portrayal by the husband of his entitlement to income and money due at the time that the parties commenced living together. However, a close analysis of the various 1997 and 1998 documents showed something different. The evidence tendered by the husband showed that his 1997 income was $66,000. That was before it was apportioned between himself and his “assignee”. Evidence was not led about who that assignee was. From the document from the firm, it is a reasonable inference that his income was at least $66,000. However, it was actually more likely to be $186,000 because the documents also show that $120,000 went to what was described as the “Second Meritable Trust”. I remain unsure how if at all, the husband and wife benefitted from that trust. I am left with some uncertainty but in my view, none of that evidence affects the outcome of this case.
When cross-examination of the wife began, she was asked whether at the time the parties began living together, both had put $110,000 into the purchase of the former matrimonial home. The title to that property showed the wife becoming the registered proprietor on 19 November 1998. The parties had only begun living together in the previous year. The wife agreed both were requested to write equal cheques for the purchase and they did so. She then acknowledged that they contributed equally to the acquisition of the home. A mortgage to St George Bank Limited was registered at the time of the purchase on the title. Thus, the borrowings were substantial.
To the extent that it is necessary for me to say so, the evidence supports the conclusion that when the parties began living together, they each had similar capital but on any view, the husband’s earning capacity was much higher than that of the wife.
The wife’s knowledge of the finances after the purchase of the home was troubling. Various documents were tendered in evidence. I accept the parties did have savings by 2000. The family went to the United Kingdom in 2007 at which time the mortgage over the home still existed. In 2011, the mortgage was $207,000 and was paid out in full from savings in a term deposit. All of that was interesting but the fact remained that the husband was the major income earner throughout the relationship by a very significant disparity as against the wife.
In November 2007, when the parties went to the United Kingdom, the husband’s salary was split into two parts. One was used for the United Kingdom purposes and the other went towards an Australian bank account. While the wife disputed the husband’s statement that the amount banked in Australia was consistently about $36,000 she produced documents to show that it fluctuated. She observed that money went backwards and forwards to Australia. All of this was to show not so much the inaccuracy of the husband’s evidence but rather that the wife could neither accept nor understood, where all of the husband’s large earnings had been spent. When cross-examined, the wife conceded she had no evidence of hidden assets. The husband subjected himself to cross-examination and, albeit there were concerns expressed about the paucity of documents, nothing I saw or heard, suggested any impropriety on the part of the husband. The husband gave evidence in cross-examination of extensive travel including with the children throughout Europe. He referred to the contribution the parties made to the wife’s mother in her travel. None of that was challenged.
The husband made concessions that the wife’s chief role was as the homemaker and parent but she also worked on a part-time basis between 2000 and 2007. During that period of time she also studied and contributed to the parties’ lifestyle.
I find that even though the parties had assistance consistent with their affluent lifestyle, it was the wife who was the person primarily responsible for the management of the household and the care of the children. It was the wife who re-established the children in Australia after they returned from the United Kingdom. Even with the husband back in Australia, it was the wife who was primarily responsible for medical appointments and the organisation of various activities. It was the wife who also was primarily responsible for school activities and attendances.
Notwithstanding the significant earnings of the husband it was not argued that there was a difference between the parties’ respective contributions throughout the time that they lived together. Subsequent to the wife’s return to Australia, the husband continued to provide the financial support for the family. It was only when these proceedings began that arguments occurred over finances.
In final submission, senior counsel for the husband argued that the parties’ contributions could be assessed as having been equal. Generally I accept that submission.
The parties’ position in final address
Counsel for the wife urged the Court to grant the orders sought by the wife. That would have meant excluding a share portfolio on the basis that it had been the wife’s initiative to create it and its consequent increase subsequent to separation. It would have meant ignoring the wife’s share portfolio (the Commsec Account) she claimed was held on trust for the children. The dividends earned have been put back into the capital value by further share acquisition. In reality, the basis of the wife’s argument really came down to disparity of earning power.
The husband’s position was as I have earlier described it. Senior counsel for the husband observed that on the basis of the wife’s portrayed scenario, it could not be a just and equitable outcome because the husband was effectively getting less than 1 per cent of what the parties had. He acknowledged there had been equal contributions. That is significant in circumstances where there is a huge disparity in the financial contributions made by the parties. In addition, the husband’s evidence was directed to the role that he played in respect of the care of the children and whilst not equating it with that of the wife, he was certainly seeking an acknowledgement for contribution purposes in the financial dispute as well as in the parenting dispute.
If all of the assets of the parties (except superannuation) were lumped together, it would be simple to treat them globally. A court has the power to assess the weight to be given to the parties’ respective contributions once a decision is made that it is just and equitable to alter the interests. In this case, counsel for the wife urged the Court to deal with the assets as I have indicated which is another way of describing them as either an asset by asset approach or simply excluding assets from the parties’ control at all. In this case, I propose to exclude the share portfolio relating to the children for the reasons that are set out below. I do not propose to exclude the major portfolio in the wife’s name.
The partnership of the husband
In her outline of case, the wife suggested that a property interest that the husband had was his interest in the professional firm of which he is a partner. In respect of the value of that interest, she noted “$TBA”. No evidence was produced nor was it seriously suggested at any stage that the husband had more than an interest in generating income in that partnership. I find therefore that the partnership interest has no tangible value.
The husband’s trust
Very little evidence was given about two trusts. One was the H Capital Trust of which HH Capital Pty Ltd is the trustee and the second is the H Family Trust. The 2013 taxation returns are in evidence. It is clear from those documents that the husband has the absolute control on what happens to the funds that are transferred to those entities but on any view, the money comes from his exertion within the firm. In 2013, distributions were made of all of the money in the H Family Trust totalling over $120,000. Those payments went to his two adult daughters. Although somewhat unclear, it would seem that payments were not made directly to those daughters but rather, used for their support.
The documents in evidence also show that the husband’s income which is declared for his personal taxation but which is also referred to in the child support assessment, dated 13 May 2014, was $410,096.
To the extent that it might be thought that the husband was relying upon his taxable income, an examination of his financial statement showed that he included as his income, the amount that he received through the family trust and which had been distributed to his adult daughters. In his financial statement which was filed with leave on the day of the hearing, he showed his weekly income as $10,625 or $552,500 per year.
The disclosure of that income and the production of the documents supports the conclusion that the husband has not hidden anything. What he does with that money is the ultimate question.
The share portfolio
In final submissions, senior counsel for the husband produced an asset list in which the wife’s share portfolio was shown as $977,113. Documentary evidence showed that the wife’s share portfolio only days before was $950,928. Between 1 May 2014 and 16 May 2014, withdrawals for the account into which the sale of the shares went were significant. On 20 May 2014, $12,895 worth of shares was sold and on 1 May 2014, $13,595 worth of shares was sold. The wife said that these funds been used for living expenses. The extent of that expenditure and the details of its use were not provided. Because of the financial support provided by the husband, I do not consider it appropriate to simply accept that the capital was used for living expenses. In my view, the share portfolio should be treated as $977,113 as indicated in the balance sheet prepared by senior counsel for the husband.
Counsel for the wife submitted that the shares should be excluded from division or alteration and simply left for the wife on the basis that both parties had agreed over a year ago to a drawdown of funds of $189,000. With further borrowings, the wife used that sum and along with the buoyant share market and her trading expertise, the balance increased to what I have just set out. The husband was required by the share fund’s lender to provide a guarantee for that sum. In addition, the husband used the drawing that he received for school fees and living expenses. Counsel for the wife submitted that the Court should question why the husband used that capital drawdown for those purposes when he was earning such a significant income. I am satisfied that very large sums of money were being used for school fees and other expenses associated with the children along with the husband’s need to re-establish himself. The husband was criticised for renting a property that was expensive but he also had to keep close to the children’s schools as well as house the children.
I find on the evidence that there is no basis to give the wife any unusual credit because the husband funded her living expenses and those of the children during that period of time. When I examine what has and is to occur with the husband’s income generally, it seems clear that he does not have a lot of latitude notwithstanding the substantial income that he earns.
Accordingly I find that the appropriate asset of the wife which should be the subject of consideration for adjustment is the whole of the share portfolio.
The children’s “trust” share portfolio (the Comsec account)
The wife has a share portfolio in a Comsec share account which has a value of $52,253.
The share account was said by the wife to belong to the children. I accept that. It transpires that in the United Kingdom, the husband purchased his adult daughter a motor car for her 21st birthday present. It was the husband’s evidence that the wife then unilaterally took $39,000 as a quid pro quo notwithstanding that the 21st birthdays of each of the children were a long way away. The husband’s submission was that I should simply treat the Comsec as an asset in the hands of the wife. I reject that on the basis that superficially the wife has made a declaration of trust for the children.
The wife has treated the money as belonging to the children and has created a position in which she is the trustee of those funds. Nothing in the evidence suggests to me that she is acting other than as a trustee and is aware of her obligations. Having made the declaration of trust by her evidence, I consider she is bound by that trust. It does not appear to me to be any form of sham nor that she considers the money to be the property of the parties even if there is no dispute that the money came from the parties resources. In discussion in final address, the husband was given an opportunity to consider whether those funds should be isolated and he also become a trustee but he rejected that on the basis that he felt that the money should belong to the “pool of assets” between the parties.
As the shareholding is obviously immediately accessible, there is no reason in my view why that sum should not be paid to the husband within about 42 days of these orders.
Because of the absence of trust between the parties, I propose to make an order that if the payment is not made to satisfy the husband’s entitlement in six weeks, at the wife’s election, she can choose either the sale of the home or sell the shares.
If she chooses the sale of the home, to give efficacy to the sale, the husband shall be responsible for the appointment of the agent, the marketing and the arranging of various commissions and advertising expenses. It will be the responsibility of the wife to ensure that inspections are made possible according to the arrangements made by the husband. The parties are to complete the landscaping expeditiously and the husband is to fund that from his resources but to be repaid it as an expense of the sale.
In my view, that ultimate division is just and equitable to both parties.
The financial conundrum
Before dealing with the discrete issues of spousal maintenance and child support, it is helpful to look at the “big picture”.
The wife seeks a payment of child support of $1000 per week and a further $1000 per week by way of spousal maintenance. She desires that the husband take responsibility for private school fees and like expenses. In her financial statement filed in February 2014, she disclosed income in her own right of $596 per week. Even if she was able to retain the source of that income, which I doubt, her total income would therefore be $2596 per week.
On the financial statement she filed the expenditure details of which were not seriously challenged, she needs $4027 per week to support herself and the children in the lifestyle to which she and the children have become accustomed.
The shortfall is self-evident. If indeed she has to sell or transfer the shares, the position is even more dire.
The husband’s position is that he earns $10,625 per week. If all of the expenses are deducted from that sum and again, these figures were not challenged, before paying child support, spousal maintenance or school fees, the husband spends $7199 per week. I have made some notional adjustments for things such as expenditure on his adult children which I would not allow.
The husband therefore has $3426 per week but from that, he is agreeing to pay and the wife is seeking, over $2000 per week by way of school fees.
There are clearly not sufficient funds available for the husband to pay the shortfall that the wife seeks. Something must give way.
Child support
The current assessment dated 13 May 2014 requires the husband to pay $35,127 from 1 June 2014 to 31 August 2015. It is from that assessment that the wife seeks a departure. However, the wife also seeks the substitution order or non-periodic payments as earlier mentioned.
Section 123 of the Child Support (Assessment) Act governs the way in which this particular issue can be determined. It provides that where an application is made to a court having jurisdiction, that application may only be made if an assessment is in force. That requirement is therefore satisfied. However, s 123(3) reads as follows:
Before hearing the application, the court must hear and determine any pending application made to the court for an order under…Division 4 (departure orders) in relation to the child, the carer entitled to child support and the liable parent.
Section 123(4) gives the Registrar of Child Support the right to intervene and on the first day of the hearing, the Court was advised that the Registrar would be, but had not been, advised of the application. I presume that that has now occurred. It is also a requirement of the Family Law Rules 2004.
Section 116 of the Child Support (Assessment) Act provides that a parent normally has to undertake an administrative pathway before being eligible to come to the Court except in one particular circumstance. The section provides that if there is an application pending in a court, and the court is satisfied that it would be in the interests of the parents to deal with the matter, jurisdiction is enlivened. I am satisfied that that requirement is met.
The application of the wife was for an order retrospective to 1 June 2013. She sought it conclude when each child turned 18 years of age or completed high school. Because of the order of April 2013 and the conundrum posed above, it is my view that it would be unjust to try and calculate the matter retrospectively. The figures upon which I would be asked to rely by both parties are not figures that I could comfortably accept. In addition, there was no suggestion that the wife was not managing to satisfy the financial needs of the children. Further again, just what income the husband earned in the transition from Firm Y to Firm X, I would not be prepared to make findings about on the evidence before me. Further, I am not entirely sure what ground the wife was relying on.
The last point arises too in respect of the future assessments. At no stage did the wife particularise exactly what the ground was.
Section 117 of the Child Support (Assessment) Act provides that to depart from an assessment, there must not only be a ground as set out in the Act but also special circumstances. Even at that point, if a ground is established, the Court must be satisfied that it is just and equitable as regards the children, the payer and the payee and otherwise proper, to make the order. Section 117(2) sets out the various grounds. I have inferred that the grounds are:
(a)That in the special circumstances of the case, the costs of maintaining the children are significantly affected because the children were being cared for, educated or trained in the manner that was expected by their parents; and/or
(b)That in the special circumstances of the case, the assessment (as it currently stands) would result in an unjust and inequitable determination of the level of financial support to be provided by the husband because of his income, earning capacity, property or financial resources.
Another ground which was not raised by either party was that the assessment resulted in an unjust and inequitable determination of the level of financial support to be provided by the husband because of the income of the children arising from the trust containing the share portfolio to which I have earlier referred. I do not know the income of that trust because the wife simply brushed aside the question and indicated that any dividends were converted into shareholdings. In any future assessment of child support, that trust will now be a matter of record and even if dividends are notionally so converted, they should be treated as income in the hands of the children for the purposes of any assessment. I turn then to the two grounds which I understand the wife relied upon.
The philosophy of child support
Section 3 of the legislation provides that parents of a child have the primary duty to maintain that child and the duty is not of a lower priority than the duty to maintain any other person and has priority over all other commitments of the parents other than those which are required for the purposes of supporting themselves. The objects of the Act are therefore clear. Parliament intended that parents ensure that the level of financial support to be provided by parents was to be determined according to their capacity to provide that support and that parents with a like capacity provide like amounts of financial support. Importantly, the level of that financial support should be determined in accordance with the cost of the children.
The legislation also provides that the person who provides ongoing daily care for the children should be able to have their financial support determined without the need to resort to a court. It may be that the conundrum set out above cannot be rectified if the formulaic approach is used. I do not propose to set out the formula in detail but the philosophy just outlined can readily be found within the Act itself (see s 55F and thereafter).
In my view, on the evidence, both grounds are made out. However, that does not solve the problem.
The assessment of May 2014, which is prospective, was based upon the husband’s taxable income of $410,096 and the wife’s taxable income of nil. The husband’s actual (but not necessarily his 2013 income) is now established in this Court as $552,500 taking into account the money distributed to the trusts. The wife’s actual income to February 2014 (including the family tax benefit but excluding spousal maintenance) was $38,428. Thus, neither of the amounts of income upon which the assessment was based could actually be deemed to be current. That justifies a reconsideration of the assessment.
The various components of the formula are also seen in the evidence before this Court. The husband’s “care percentage” should be 28.5 per cent and not as it is shown in the assessment. That arises out of the orders I propose to make.
Using the financial statements of the parties which obviously the Child Support Registrar did not have and excluding certain affluent expenses such as holidays, gifts and pocket money and any education costs on the basis that the husband will be meeting most of those, the directly met costs of the children by the wife comes to something in the vicinity of $1560 per week. Applying the same principles, the husband’s directly met costs amount to about $540 per week for these children. On a percentage basis, the wife is meeting 74 per cent of the costs and the husband 26 per cent. However, if the education expenses and the like are included in the husband’s costs, he is meeting 62 per cent of those costs and the wife 38 per cent.
The Registrar of Child Support annually publishes in the gazette the various tables relating to the costs of children and on my understanding of the table which is also reflected in the most recent assessment, for parties of a combined income as here, the costs of maintaining the children should be 19 per cent. That is around $2192 per week and of course, without the education expenses involved, the parties’ evidence shows that the formula is not too far from the reality.
The question must be asked whether it is appropriate and just and equitable to depart from a formula which has taken into account not only the incomes of the party albeit not entirely accurately but which has factored in the costs of the children reasonably closely to what the parties have indicated that between them, they spend. Having found that one or other of the grounds has been met, the obvious question is whether there are some special circumstances here that justify a departure from the assessment because it would otherwise be unjust and inequitable to the parties and/or the children. It is evident from the conundrum that the assessment for the ensuing 14 months or so would not meet all of the expenses that the wife is incurring based on her financial statement. Because the formula works on the children sharing in a proportionate way of the income of their parents, the absence of the inclusion of the trust means that the children are slightly disadvantaged by the inaccuracy in one of the factors in the formula.
Section 118 of the Child Support (Assessment) Act sets out the various orders that a court can make on the basis that the other criteria are satisfied. Those orders include varying the cost percentage for a child or a parent’s child support income or the parents’ combined child support income. It also empowers the Court to vary the child support percentage and the adjusted taxable income. It allows the Court to vary the costs of the children.
As it must be just and equitable as regards the parents and the children, the appropriate way for that test to be satisfied is for the Court to order that the factors which have been found to be inaccurate in the assessment should be substituted for what I have found in the evidence of the parties. In this case, the income of the husband and wife should be put into the formula properly which includes the trust but having regard to the philosophy of the legislation, there is no basis for me to alter the costs aspects bearing in mind that I am being asked to make an order for significant education expenses and the husband is agreeing to that order.
Thus, in addition to one of the grounds being satisfied, the Court must find that there are special circumstances to justify a departure. The only circumstances that justify the departure here are that the parties’ circumstances are not entirely accurately reflected.
When considering a departure from the assessment, the Court is entitled to take into account more than just the income of the party. Section 117 requires the Court to consider as part of one of the grounds, the property, financial resources and earning capacity. Both parties in this case have property and each needs to have a home for the sake of the children. On that basis, I would not be prepared to make an adjustment because of the fact that either party has more property than the other. Having heard the evidence, I am also satisfied that the financial resources of both parties are limited and the husband’s earning capacity is accurately reflected in his adjusted income. Notwithstanding the husband’s cynicism about the wife’s earning capacity, I am satisfied that she too is limited by her circumstances as outlined earlier.
I propose therefore to order the formula be rectified only by the taxable incomes and for the Agency to reflect the amount of time that the husband has with these children pursuant to the orders I have proposed earlier.
As I began, the wife sought the orders until the children each attain the age of 18 years or concluded school. In my view, there is no justification for that order and the formula should be applied each year but with more accurate figures.
The extra expenses
The wife also sought that the husband be responsible for all education costs and she defined those. She also sought extra-curricular activities, hospital, medical and dental insurance costs and any amount for those expenses so incurred that were not covered by insurance.
The husband’s proposed order was that he pay non-periodic payments as follows:
(a)All school fees and compulsory school expenses for the children at their current schools or at such other schools as are agreed between the parties; and
(b)An amount of $2000 per annum indexed annually on 1 June each year to be paid by the husband to the wife in relation to the children’s private health insurance cover.
The husband wanted to limit that order as I earlier indicated to a situation where he directly and indirectly earned more than $400,000 per annum. It would be impossible for the Court to expect that such an order could be easily implemented. In my view, if the circumstances change substantially and absent agreement, an application will have to be made to the Court.
Section 124 requires that the Court be satisfied that it is just and equitable in relation to the children as well as the parents and otherwise proper to make such an order. It is not suggested in this case that any payments made should be credited against any assessed sum.
In my view it is just and equitable that, as the parties have equal shared parental responsibility and the husband will be substantially involved in the lives of these children, that he contribute any gap between health insurance over and medical costs including orthodontic expenses. He will know what is needed for the children and unless agreement is reached, those expenses will not be incurred because the parties now have an order for equal shared parental responsibility in relation to major health issues.
The husband is in a much stronger financial position and has the ability using the trust to reduce his tax but presumably still use the benefit of that money which on the evidence, he has not paid to his adult daughters. He is in a much stronger position than the wife and on that basis, I find that he has the capacity to pay the expenses otherwise known as the gap.
The wife sought an unidentified amount of insurance but in my view, the husband’s position is much more sensible because it enables the wife to take out a family policy and the husband’s payment will be a contribution towards that expense. Because he will be paying in due course by having to pay the gap costs, it is only appropriate that an order be made that the wife take out the insurance and provide details to the husband should he so request them. I am conscious that such an order might be open to abuse where the wife does not take out comprehensive and appropriate cover for the children because that would lead the husband to having to face a bigger gap. For that reason, I consider the responsibilities of equal shared parental responsibility require that there be agreement before any such extensive costs are incurred.
The same should be said in respect of the orthodontic expenses some of which has already been incurred and some which will be incurred in the future. He is in a far stronger position to cover those costs.
The wife sought that the husband pay all extra-curricular activities costs. In my view that is inappropriate in circumstances where the husband has made it clear that he objects to certain extra-curricular costs. Returning to the conundrum, it will be clear that the wife will not be able to incur all of those costs and unless there is agreement between the parties, the children will just have to withdraw from those activities. That is a matter that the parents will have to face in explaining the problem to the children. I would not make an order therefore that the husband be responsible for all extra-curricular activities.
Spousal maintenance
As earlier indicated, the wife sought $1000 per week for a period of three years by way of spousal maintenance.
Section 72 of the Act provides that a party to a marriage is liable to maintain the other party to the extent that that proposed payer is reasonably able to do so if and only if the applicant is unable to support herself or himself adequately whether:
(a)By reason of having the care and control of a child of the marriage under the age of 18 years;
(b)By reason of age or physical or mental incapacity for appropriate gainful employment; or
(c)For any other adequate reason
having regard to any relevant matter referred to in s 75(2) of the Act.
The outline of argument on behalf of the wife submitted:
(a)The wife will continue to have the primary care of the three children;
(b)The wife ceased all paid employment in 2007 when the family relocated to the United Kingdom for the purposes of the husband’s employment;
(c)The wife has been out of the workforce for seven years;
(d)To practice as a health professional, the wife will need to complete examinations and undertake an interim period which she has to date not been able to obtain; and
(e)If the wife was able to requalify, she would only be able to work part-time because of her parenting duties and even in that situation would be earning $25 per hour as an experienced health professional.
The evidence of the wife supports those outlined arguments. She was cross-examined about her position as a health professional. I am satisfied that while she has been re-registered by the relevant authority, she is limited in what she can do until she completes the relevant internship and her evidence was that she had not been able to obtain such a position from the various people that she had contacted. She was asked various questions about other alternatives in areas where she had previously had experience but she indicated none of that would work because of her obligations towards the children not to mention the fact that there would be travel involved.
I am satisfied on the evidence that her current income and earning capacity is as she describes it in her financial statement and that she cannot contribute to her own support any more than what she is currently doing. Spousal maintenance is also a situation in which property and financial resources can be considered but in this case, for the same reasons that I have mentioned in relation to child support, that would not advance the wife’s financial position much at all after she pays out the husband and deals with the mortgage on the home.
All of that being the case, the wife’s income is largely provided by the dividends from the shares on the basis that the tax benefit she receives must be ignored because of s 75(3) of the Act.
Whether she can adequately support herself on the income so disclosed depends upon the Court accepting her claim for the items expended in her financial statement. Those were largely not contested. I accept therefore that her weekly expenditure which was unchallenged was in the vicinity of $1468. Some things such as holidays, the health retreat and family therapy should be ignored as unnecessary but in any event, the expenditure that was not challenged still far exceeds the income that the wife has at her disposal.
The wife sought $1000 per week and on the basis of the figures before the Court, she could justify that sum or close thereto. If I excluded $300 for the items that might be deemed to be an extravagance, her expenditure is still $1168 per week and her income is $596 from dividends which she says is not affected by tax. However it also has to be taken into account that the mortgage is currently being met at the rate of $537 per week from the share portfolio so on any view, her expenses will be back in the range of $1100 per week because those dividends will not cover the mortgage payments.
Section 72 requires the Court to examine any relevant matter referred to in s 75(2) when considering (a) to (c) in the paragraph above.
I have already dealt with the issues in s 75(2) for the purpose of the property proceedings and I adopt those again.
I find therefore that the wife has a need of at least $1000 per week for a period of three years as she claims. The three year period is predicated on the basis that it will take her that period of time to retrain and get back into the workforce and to then be able to adequately support herself.
However, as was pointed out in s 72, the husband is only liable to maintain the wife if he is reasonably able to do so.
His financial position has been dealt with in some detail above. I have already referred to the conundrum. On the basis that the husband earns $10,625 per week, it is important that I take into account the expenses that he incurs for himself and the children excluding the two adults who are also part of his household. Factoring in tax of $4250, insurance and registration of vehicles at $255 and allowing $1850 per week for the item in Part N of the financial statement along with child support as assessed and education expenses of approximately $2000 per week, one has to consider what allowance to make for his accommodation. At the moment he is claiming $1454 per week but if he purchases a house from the money received by him from the wife, as he wished to do, that expense will go down presumably considerably. It is clear on the figures that if an allowance is made for $1454 per week, he does not have the capacity to pay any spousal maintenance. If the rental accommodation is reduced and substituted by a mortgage payment, the husband would have some capacity to pay. What sort of house he purchases and what sort of commitment he makes to a mortgage is a matter entirely for him. In my view, he has an obligation to support the wife at least for the next three year period and he should tailor his accommodation either by rental or purchase around that obligation.
In respect of the Part N of the financial statement to which I have referred, his current claim was $4300 per week but deducted from that was $500 per week for the two adult children and $2000 for the education expenses which I have otherwise included separately. The expenses for caring for the children when in his care were predicated on a three day per fortnight basis together with holidays. There will no doubt be some modest increase on the basis that there will be a further night in the fortnight. He will also have the obligations under the child support orders that I have made for approximately $50 per week for health insurance costs and I factored that into the Part N expenditure.
I do not know what the calculation from the departure order will produce but I suspect it will be either a small increase or a small reduction depending upon how the Agency deals with the figures that I have included in the order. On that basis, the issue was really whether or not the husband should be allowed an accommodation cost of $1454 per week. In my view he should not having regard to the circumstances that now prevail as a result of the property orders that I shall make.
In my view, the adjustment to his living expenses including accommodation allows him to pay $500 per week comfortably which still leaves him some money left over for exigencies associated with the children such as holidays and activities that were not included in the expenses above.
I therefore propose to order that the husband pay $500 per week for a period of three years. The start-up date of that order is a vexed question. The capacity to make the payment is predicated on the husband being able to accommodate himself at a much lower rate than he currently can. That is dependent upon the wife paying to him the money due under these orders. The husband offered a lump sum reduction to his capital entitlement but that was rejected by the wife. The wife has access to the income from the share portfolio until such time as and if, she decides to use those capital funds to pay out the husband. In the circumstances, it is only just that the first payment not be for some weeks to enable the husband to refinance his position assisted by the wife’s obligations under these orders during which time, she can live on the money she has earning an income. I consider until 1 August is sufficient time for those arrangements to be implemented. I do not propose to make any orders retrospective.
The orders of April 2013
As a result of the orders that I propose to make, it is appropriate that the order made on 23 April 2013 for $1000 per week be discharged forthwith. It is also appropriate that paragraph 9 of the minutes attached to that order be also discharged. It is difficult for me to be critical of the court that made that order bearing in mind that it was drawn by the parties’ lawyers. Curiously, it refers to it being made “without prejudice” to either party. That sort of language is not appropriate in my view in an order. The order is made or it is not. The power is there or it is not.
There was considerable discussion and cross-examination during the hearing about the insurance on the wife’s motor car. The evidence of the husband and wife is in conflict. The husband said that he sought through AAMI to make the payment for the period of six months from when it was due up until the trial but the wife produced a document to show that she had paid it and that the husband had not refunded her. I do not propose to go back over the period subsequent to separation but in my view, that was a consent order (unlike the maintenance order) and therefore, the husband should pay the registration of the wife’s motor vehicle up until the date of these orders. To the extent that that needs some pro rata calculation, the parties can do that and that payment should be adjusted out of any payment made by the wife to the husband but I do not intend to make any orders about that.
All applications should otherwise be dismissed.
I certify that the preceding Two Hundred and Thirty Two (232) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 23 June 2014.
Associate:
Date: 23 June 2014
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