Ignacio v Ignacio
[2016] FamCA 50
•10 February 2016
FAMILY COURT OF AUSTRALIA
| IGNACIO & IGNACIO | [2016] FamCA 50 |
| FAMILY LAW – PROPERTY SETTLEMENT – Where the parties properly agreed it was just and equitable for their property interests to be adjusted – Where the parties’ contributions resulted in equal entitlement to the available assets and superannuation interests – Where the wife will retain the role of primary carer for a child of the marriage for longer than the husband, warranting an adjustment of 5 per cent in her favour – Where the wife is entitled to 55 per cent of the parties’ net assets and superannuation interests – Husband is entitled to 45 per cent FAMILY LAW – CHILD SUPPORT DEPARTURE – Where the husband sought a departure from the administrative assessment of his child support liability – Where in reality the husband’s child support departure application comprised an appeal against a decision of the SSAT – Discussion of the implications of the enactment of the Tribunals Amalgamation Act 2015 (Cth) – Where in these circumstances, it would not be just and equitable or otherwise proper for the husband’s application to succeed as a fresh departure application – Where the success of such a departure application would be tantamount to an abuse of the appeal process – Where it is otherwise not just and equitable to make a departure in respect of a support assessment within an historical closed period of three months – Husband’s application in relation to child support dismissed – Wife’s application for recovery of arrears dismissed |
| Child Support (Assessment) Act 1989 (Cth), ss 98J, 116, 117, 118 Child Support (Registration and Collection) Act 1988 (Cth), ss 30, 110B, 111F, 113, 113A Evidence Act 1995 (Cth), ss 135 Family Law Act 1975 (Cth), ss 75, 79, 106A Family Law Rules 2004 (Cth), rr 4.22 |
| Bevan & Bevan (2013) 49 Fam LR 387 Smith v NSW Bar Association (No 2) (1992) 176 CLR 256 Stanford v Stanford (2012) 247 CLR 108 |
| APPLICANT: | Ms Ignacio |
| RESPONDENT: | Mr Ignacio |
| FILE NUMBER: | NCC | 671 | of | 2013 |
| DATE DELIVERED: | 10 February 2016 |
| PLACE DELIVERED: | Newcastle |
| PLACE HEARD: | Newcastle |
| JUDGMENT OF: | Austin J |
| HEARING DATE: | 14, 15, 16 & 17 December 2015, and 2 & 10 February 2016 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Tregilgas |
| SOLICITOR FOR THE APPLICANT: | Catherine Henry Partners |
| COUNSEL FOR THE RESPONDENT: | Mr Duane |
| SOLICITOR FOR THE RESPONDENT: | Boyd Olsen Lawyers |
Orders
The wife shall pay to the husband the sum of $256,549 within 60 days of the date of these orders.
Subject to compliance with Order 1 hereof, and in consideration of that payment, the wife is declared the sole legal and beneficial owner (as between the parties) of the real property and improvements comprising Folio Identifier 9126/874539, being the property more commonly known as E Street, F Town, NSW (“the property”), and the husband shall do all such things and sign all such documents as may be necessary to transfer all his right, title, and interest in the property to the wife contemporaneously with his receipt of payment pursuant to Order 1 hereof.
Subject to compliance with Orders 1 and 2 hereof, the wife shall indemnify and keep indemnified the husband against:
(a)all rates, taxes, statutory charges, mortgage repayments, and other outgoings and liabilities affecting or relating to the property;
(b)the parties’ joint personal loan mortgage; and
(c)the debit balance of the parties’ joint CBA debit account.
In default of compliance with Order 1 hereof, unless otherwise agreed, the parties shall do all such acts and things and sign all such documents as may be necessary to forthwith list the property for sale upon the following conditions:
(a)The property shall be listed for sale by private treaty.
(b)The listing agent shall be as agreed between the parties, but in default of agreement, the agent chosen by ballot from the respective choices of the parties.
(c)The listing price for the property shall be as agreed between the parties, but in default of agreement, the price nominated by the listing agent.
(d)In the event of the property not being sold within 3 months from the date of its listing for sale then it shall be put to sale by public auction on the following terms:
(i)The auctioneer shall be as agreed between the parties, but in default of agreement, the auctioneer chosen by ballot from the respective choices of the parties.
(ii)The auction shall take place within 6 weeks of the deadline date for sale by private treaty.
(iii)The reserve price shall be as agreed between the parties, but in default of agreement, the reserve price nominated by the auctioneer.
(e)In the event the property is not sold by auction, or private negotiation within a further 7 days, then it shall be submitted to successive auctions within further 6 week periods until sold, otherwise upon the same terms and conditions as applied to the first auction.
(f)The parties are restrained from further charging, mortgaging, or encumbering the property pending its sale, other than for the purpose of permitting the wife’s compliance with Order 1 hereof.
(g)The wife may occupy the property to the exclusion of the husband pending its sale pursuant to these orders, provided she meets the mortgage repayments and insurance premiums in respect of the property as and when those expenses fall due, maintains the property in a reasonable state of repair, and facilitates inspection of the property by prospective purchasers.
Upon completion of the sale of the property pursuant to Order 4 hereof, the proceeds of sale shall be applied as follows:
(a)First, to pay all costs, commissions, and expenses of the sale, and to pay any Council and water rates outstanding in respect of the property.
(b)Secondly, to discharge any encumbrance registered over or affecting the property.
(c)Thirdly, to discharge the parties’ joint personal loan mortgage and the debit balance of the parties’ joint CBA debit account.
(d)Fourthly, to pay $13,998 to the husband.
(e)Fifthly, to pay 45 per cent of the balance then remaining to the husband.
(f)Lastly, to pay the balance then remaining to the wife.
Unless otherwise provided:
(a)Each party shall be the sole legal and beneficial owner (as between the parties) of all other assets in their respective possession as at the date of these orders, and for that purpose bank accounts are deemed to be in the possession of the person named as the account holder and superannuation entitlements are deemed to be in the possession of the superannuant.
(b)Each party shall be solely liable for and shall indemnify the other against any and all debts attaching or relating to the property in their respective possession and any debts in their respective sole names.
In the event of either party refusing or neglecting to sign within 7 days of a written request to do so any document necessary to implement the terms of these orders, the Registrar of the Family Court of Australia at Newcastle is empowered to execute such documents on behalf of the parties pursuant to section 106A of the Family Law Act 1975 (Cth).
Costs are reserved for 28 days.
Otherwise, all outstanding applications are dismissed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Ignacio & Ignacio 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 NEWCASTLE |
FILE NUMBER: NCC 671 of 2013
| Ms Ignacio |
Applicant
And
| Mr Ignacio |
Respondent
REASONS FOR JUDGMENT
Introduction
These proceedings concern two issues.
The first is the adjustment of the parties’ property interests under Part VIII of the Family Law Act 1975 (Cth) (“the Act”) following upon the breakdown of their marriage in 2013.
The second relates to child support and entails both the husband’s application for departure from the administrative assessment of his child support liability under Part 7 of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”) and the wife’s application for recovery of child support payment arrears from the husband.
Short history
The parties disputed when they actually began their relationship, but their oldest child was born in 1995 and they began cohabitation by 1998 at the latest. They married in 2000.
They finally separated in March 2013, but they temporarily separated a couple of times beforehand in 2011 and 2012.
Their three children were born in 1995, 1998, and 2007. The eldest is now an adult. Parenting orders in respect of the youngest two children were made between the parties in December 2014. The middle child lives with the husband, but does not see much of the wife. The youngest child lives with the wife, but spends substantial amounts of time with the husband and her siblings.
The wife commenced these proceedings within weeks of the parties’ final separation in March 2013, seeking property settlement orders.
In May 2013, interim orders were made requiring the husband to pay to the wife a lump sum of $40,000 by way of interim property settlement and $500 per week by way of spousal maintenance.
In August 2014, the Registrar made final property settlement orders with the parties’ consent, but the wife later sought review of the Registrar’s decision to make those orders.
In September 2014, the wife’s review application was granted and the orders made by the Registrar were set aside. Simultaneously, the former interim spousal maintenance order was discharged and another interim property settlement order was made, requiring the parties to sell a car and divide the net proceeds of sale between them equally.
The evidence
The wife relied upon:
(a)Her affidavit, filed on 30 October 2015;
(b)Her financial statement, filed on 30 October 2015;
(c)The affidavit of her father, Mr G, filed on 9 December 2015; and
(d)The affidavit of her sister, Ms H, filed on 10 December 2015.
The husband relied upon:
(a)His affidavit, filed on 11 November 2015;
(b)His financial statement, filed on 11 November 2015;
(c)The affidavit of his partner, Ms T, filed on 10 November 2015;
(d)The affidavit of his mother, Ms I Ignacio, filed on 10 November 2015;
(e)The affidavit of his brother, Mr J Ignacio, filed on 10 November 2015;
(f)The affidavit of the parties’ son, Mr K Ignacio, filed on 4 December 2015;
(g)
The affidavit of the wife’s nephew, Mr S, filed on
4 December 2015;
(h)The affidavit of Mr O, filed on 2 December 2015;
(i)The affidavit of Mr N, filed on 2 December 2015; and
(j)The affidavit of the single expert medical practitioner, Dr P, filed on 29 May 2015.
The wife objected to reception of Dr P’s evidence, but the objection failed for three reasons.
First, the wife objected to the single expert’s qualifications to offer the expert opinion evidence for which he was retained. It was contended his expertise as a university professor of orthopaedic and traumatic surgery was insufficient to permit his expression of reliable opinions about the husband’s fitness for work as a concreter. That submission was rejected. The single expert was selected jointly by the parties. The wife must have been satisfied with his qualifications when she agreed to his selection, which is hardly surprising, since he conducts the post-specialisation fellowship program in shoulder surgery at the Q Hospital and the husband’s physical complaint pertains to his shoulder.
Secondly, the wife contended the single expert’s opinion evidence was proffered in reliance upon the husband’s self-serving complaints about his shoulder pain and limitation of movement, which evidence the husband did not give in these proceedings, meaning the expert opinions were devoid of proper foundation. That submission was rejected. The husband did adduce evidence about the effects of his injury[1] and the single expert relied on much more than the husband’s uncorroborated complaints in forming his opinions. In addition to the history taken from the husband, the single expert relied upon physical examination of him, examination of the radiographs and the MR arthrogram performed on him, inquiries made of his treating orthopaedic surgeon, and the history of his past treatment by physiotherapy, steroid injections, and surgery.
[1] Husband’s affidavit, paras 26, 32, 53-56, 59-60
Thirdly, the wife asserted the single expert evidence should not be admitted in these proceedings so as to offer the husband an advantage in the assessment of any need for adjustment under s 75(2) of the Act, since there was a palpable risk he would then be benefitted twice over. The husband has sued the wife and her sister for personal injury damages arising out of the motor vehicle accident that caused his shoulder injury, as the car was driven by the wife and owned by her sister. The insurer denies liability and the husband’s claim is being defended.[2] The wife contended that, if the single expert evidence is received in these proceedings to buttress the husband’s position under s 75(2) of the Act and he then successfully prosecutes his personal injury damages claim in the State court, there will be a double-dipping effect because he will accrue financial advantage from his shoulder injury in both proceedings.
[2] Husband’s affidavit, para 61
The argument was rejected, since it was an argument about the use to which the evidence might be put if received, not an argument as to how the evidence was inadmissible by application of Chapter 3 of the Evidence Act 1995 (Cth). If the argument inferentially relied on application of s 135 of the Evidence Act, it failed to persuade that the probative value of the medical evidence was “substantially outweighed” by the danger it might be “unfairly” prejudicial to the wife. Both parties wanted these proceedings determined without delay. Neither sought an adjournment of the trial until after determination of the husband’s tortious claim. The wife’s involvement in those common law proceedings will be limited to her appearance as a witness. Given her vehement denial of liability, the husband’s claim could just as easily fail as succeed and then he would be financially worse, not better, off. Even if the husband’s claim is successful, the wife will not suffer financially because her liability will be subrogated by the insurer. In these proceedings, the husband sought to use the medical evidence defensively, to refute the wife’s contention about his unexploited superior income-earning capacity, not to offensively establish his greater proportional entitlement to the parties’ assets because of his lack of income-earning capacity.
The parties also relied upon the evidence of the single expert, Mr R, comprising his two affidavits filed on 18 July 2013 and 10 December 2015.
Following completion of the trial and the reservation of judgment in December 2015, the wife made an oral application to re-open her case and adduce further evidence. The further evidence she wished to adduce was contained within an affidavit prepared by her, dated 2 February 2016. Although it was not sworn or affirmed, it was evident she was prepared to do so. It was marked as an exhibit.[3] Aside from her observations about liability for costs in the proceedings, which were not relevant until after judgment was delivered, the contents of the affidavit were confined to evidence that was available to her at the time of trial in December 2015. Most of it was agitated at length during the trial anyway, but to the extent it was not, it could have been adduced by the wife then. If it was not, it was by her choice, albeit perhaps on legal advice. The wife could not demonstrate that she suffered any material prejudice by dismissal of her application. Alternatively, she could not demonstrate that any prejudice she thereby suffered outweighed the prejudice of the extra delay and cost the husband would suffer if her application to re-open was granted (see Smith v NSW Bar Association (No 2) (1992) 176 CLR 256 at 267). Her application was therefore refused.
[3] Exhibit A on the wife’s application for leave to re-open
Legal principles
Orders under s 79 of the Act altering the property interests of parties may only be made if the Court is first satisfied, pursuant to s 79(2), it is just and equitable to make such orders. The Act then identifies in s 79(4) the matters the Court must take into account in considering what order, if any, should be made (see Stanford v Stanford (2012) 247 CLR 108 at [22], [35]). While those two inquiries are not to be conflated (see Stanford at [35], [40], [51]), it is permissible for the s 79(4) factors to inform the inquiry under s 79(2) (see Bevan & Bevan (2013) 49 Fam LR 387 at [83]-[89], [163], [169], [171]-[172]).
It is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying the existing legal and equitable property interests of the parties. It must not be assumed that the parties’ rights to or interests in marital property should be different from those that then exist or that a party has the right to have the parties’ property divided by reference to considerations set out in s 79(4) of the Act (see Stanford at [37]-[40], [50]). Commonly, however, it will be just and equitable for the parties’ property rights to be altered because the breakdown in their relationship will end their fiscal unity and deprive them of common use of their property (see Stanford at [42]; Bevan at [68]-[70], [82], [164]-[165]).
If and once determined it is just and equitable for the property interests of the parties to be altered, the process of evaluating the proper orders to make is dictated by the factors enumerated within s 79(4) of the Act. The Court must necessarily identify and assess the parties’ contributions within the meaning of ss 79(4)(a)-(c) and then take account of the relevant matters referred to in
ss 79(4)(d)-(g) and 75(2) of the Act.
Existing property interests
Both parties failed to comply with procedural orders requiring them to file schedules of their existing legal and equitable property interests in advance of the commencement of the trial.[4] It was not until the evidence closed that the parties jointly tendered a balance sheet embodying the extent of the agreement and dispute over their property interests.[5] The following findings are drawn from that exhibit as a template.
[4] Order 5(a) made on 28 July 2015
[5] Exhibit J1
The wife’s assets, liabilities and superannuation interests are as follows:
No.
Assets
Value
Total
1
Former matrimonial home (50 per cent)
320,000
2
Household chattels
10,635
3
Jewellery
1,405
4
Car parts
5,000
9
Japanese car
16,500
Sub-total
353,540
353,540
Liabilities
24
Mortgage (50 per cent)
48,843
25
Personal loan mortgage (50 per cent)
571
26
CBA debit account (50 per cent)
280
29
Former matrimonial home rates (50 per cent)
805
30
School fees
2,334
Sub-total
52,833
-52,833
300,707
Superannuation
32
Plum Super
20,909
+20,909
Net assets/superannuation
321,616
The husband’s assets, liabilities and superannuation interests are as follows:
No.
Assets
Value
Total
1
Former matrimonial home (50 per cent)
320,000
10
Two quad bikes
6,500
11
Jewellery
315
12
GBM shares
240
13
Household chattels
1,520
16
Shares in Ignacio P/L
nil
Sub-total
328,575
328,575
Liabilities
24
Mortgage (50 per cent)
48,843
25
Personal loan mortgage (50 per cent)
571
26
CBA debit account (50 per cent)
280
27
CBA credit card debt
3,107
28
ATO tax debt
6,282
29
Former matrimonial home rates (50 per cent)
805
Sub-total
59,888
-59,888
268,687
Superannuation
33
MLC Masterkey Super
18,003
+18,003
Net assets/superannuation
286,690
The exhibit disclosed the car parts (item 4) to be an asset of the husband, but they have been in the possession of the wife at the matrimonial home since separation and it was uncontroversial she has since sold a proportion of the parts and retained the sale proceeds. The value of the items was not in dispute, but the evidence was far from clear about the components sold and the components retained. The value of the unsold components is unknown. The best way to deal with the problem is by attributing the asset to the wife. She can retain whatever she has not yet sold.
In May 2013, the husband sold a boat (item 5), a 1974 Ford (item 6), and a vintage car (item 7) and used the proceeds of sale towards payment of the sum of $40,000 to the wife pursuant to the interim property settlement order made in her favour on 3 May 2013.[6] The husband no longer has any proprietary interest in any of those chattels. They are no longer his assets and there is no basis to notionally regard them as such. The husband sold each of those assets to his brother for prices considerably lower than the values attributed to them by the single expert, but that is an issue to consider when determining the nature of the property adjustment orders to be made.
[6] Husband’s affidavit, paras 69-70
A 1975 Ford car (item 8) was the property of the husband’s brother, not the husband. The husband’s brother said he bought it from a man in Medowie in 2007 for $25,000. He said he had already produced original receipts to prove his purchase, but during cross-examination he was able to produce a photocopy of one receipt, which was then tendered.[7] The car was later valued by the single expert only because the wife believed the husband, rather than his brother, owned the car. It was valued at $25,000.[8] There was no reason to reject the evidence of the husband and his brother that the brother owned the car. The wife’s bare suspicion was not enough. It is not counted as an asset of the husband.
[7] Exhibit H8
[8] Affidavit of Mr R 10/12/15, page 6
The husband is the sole director and shareholder of Ignacio Pty Ltd (“the company”). At separation the company had about $10,700 in its bank account. The company has been in the hands of liquidators since 2014 and it no longer has any funds in its bank account. The wife proposed that $10,000 of the money in the company’s bank account at the time of separation should be notionally regarded as the husband’s own asset (item 14). That contention is rejected. The money was never the husband’s. It was always the company’s. The husband’s proprietary interest was only manifest in his shareholding in the company, not in its assets.
There was some dispute about the value of the husband’s shareholding in the company (item 16). The husband said it had no value because of its imminent liquidation. Even though the wife would not concede it had no value, she adduced no evidence to prove it had any value. The preponderance of evidence established the husband’s shareholding had no value for the following reasons.
The financial disintegration of the company was an irritant between the parties. The wife’s attitude to the company’s financial demise was difficult to discern, but it seemed to be either that the husband deceitfully conjured the appearance of the company’s failure and plans to resurrect it upon completion of these proceedings, or alternatively, he deliberately caused it to fail. The evidence did not objectively support either contention. The coalescence of some adverse circumstances sealed the company’s financial fate.
In December 2012, an insolvent debtor failed to pay its debt to the company of around $52,000.[9] None of that money was recouped.
[9] Husband’s affidavit, paras 33-34
From March 2013, for several months, the husband experienced real difficulty getting access to the company’s tools of trade, which were kept at the former matrimonial home, thereby impeding his ability to service the company’s customers, and he was unable to conveniently store the vehicles and equipment elsewhere until about July 2013.[10] I reject the wife’s denial she made it difficult for the husband to gain access to the equipment. Her obstruction was strongly confirmed by the parties’ son and the wife’s nephew. The husband needed to approach a State court with an application to vary the terms of an apprehended violence order to enable his attendance at the former matrimonial home, which variation then only permitted his attendance at the property during restricted hours.[11]
[10] Husband’s affidavit, paras 19-24
[11] Exhibit H1
In May 2013, the husband injured his shoulder and was unable to undertake the heavy physical labour he normally did in the company’s concreting business.[12] Although the wife airily asserted the company had other employees to do the hard physical labour, I accept the husband was the public face of the business and without his direct physical input the company was at a disadvantage.
[12] Husband’s affidavit, paras 26-27
In December 2013, an audit resulted in the company being billed nearly $12,000 for additional workers compensation premiums.[13] That was quite a heavy financial blow on the back of declining income and continuing overhead expenses.
[13] Husband’s affidavit, para 30
The husband’s brother was employed by the company between August 2012 and December 2013. He was originally paid slightly more than $20 per hour for his labour, but for most of 2013 his hourly rate was increased to $29. The wife considered that was another example of the husband and his cohorts siphoning money out of the company, but there was no objective basis for her suspicion. The wages paid to the husband’s brother were seemingly in alignment with the Building and Construction General On-site Award 2010, which makes provision for casual loading, daily hire uplifts, and travel allowances.[14]
[14] Exhibit H9
The profit and loss statements for the company showed a distinct dip in its financial performance during the financial year ended 30 June 2013. In the 2012 financial year the company generated gross income of $813,000, but for the 2013 financial year the gross income was only $449,000, and for the first nine months of the 2014 financial year the gross income was down to $266,000.[15] The wife conceded in cross-examination it looked as though the company’s profitability decreased “figures wise”, but she refused to concede the decreasing profitability was factually true. All available financial data in relation to the company was disclosed to the wife long ago,[16] so she has had ample opportunity to dispute it if there were good grounds to do so.
[15] Husband’s affidavit, para 29
[16] Exhibit H7, Parts 1C and 2
The declining financial performance of the company was the cause of worry for the husband before the parties’ final separation. The wife admitted the husband took a credit card from her, which caused an argument between them, but she denied they argued over the level of her expenditure on the credit card, as the husband alleged.[17] Regardless, the husband’s confiscation of the credit card implied his alarm at the declining financial resilience of the company and his consequent inability to use its assets as a resource to pay the parties’ recurring personal liabilities. The wife conceded she did not examine the credit card statements in an attempt to prove the husband’s alleged concern about their solvency was without any logical basis.
[17] Husband’s affidavit, paras 34-36
On the advice of the company’s accountant, the company ceased trading in May 2014 and liquidators were appointed.[18] At that time, the company possessed numerous leased vehicles. In aggregate, the liability under the leases amounted to about $160,000, all of which liability was personally guaranteed by the husband. The wife admitted that was indeed the quantum of debt “according to the paperwork”, but she again implied the debt was an artifice. In consultation with the liquidators, the husband tried to sell the vehicles for the best prices possible and apply the sale proceeds to discharge the debt, but there was still a shortfall he had to pay off by other means.[19] The wife suspects the company’s transfer of two vehicles to the husband’s current employer, U Pty Ltd, was a convenient ruse which will be reversed as soon as this litigation is over. The director of that corporation, Mr N, and the husband both credibly denied that suggestion. The wife’s bare suspicion is not probative. She was impelled to concede in cross-examination she was wrong when she alleged the bobcat was sold to buy other vehicles.[20]
[18] Husband’s affidavit, para 31; Exhibit H10
[19] Husband’s affidavit, paras 43-49, 74
[20] Wife’s affidavit, para 96
It is common ground the company is not yet defunct, but the husband asserted the liquidation and de-registration would be finalised within “the next couple of weeks”. The final meeting of members and creditors was fixed for
18 December 2015,[21] the week after the evidence closed. The company still possesses its ABN, but that will be revoked when it is de-registered.
[21] Exhibit H10
The wife conceded a single expert was retained to value the husband’s shareholding in the company, but the valuation was never obtained. The wife said that was because the husband obdurately refused to furnish relevant documents to the single expert, rather than because the shareholding had no material value, but that is difficult to accept. Any belligerent failure by the husband to co-operate could easily have been rectified by supplementary procedural orders, had the wife wished to seek them. Most probably, the company has ceased to be financially viable and it was not worth spending more money to have the single expert verify that fact.
The husband conceded that, at separation, he had about $7,000 in his personal banking account. The wife proposed that those funds should be notionally regarded as an existing asset of the husband (item 15), even though it was common ground he no longer has that money. That contention is rejected. The money has been spent and no evidence was adduced to prove its expenditure was unreasonable.
The parties agreed the wife should be regarded as having an asset in the form of unpaid child support, though they disagreed over the precise amount (item 18). Similarly, the parties agreed the husband should be regarded as having a liability in the form of unpaid child support, though they disagreed over the precise amount (item 31). Both items are disregarded. Although the husband does have an accrued liability for unpaid child support, it is a debt due to the Commonwealth, not to the wife (s 30 of the Child Support (Registration and Collection) Act 1988 (Cth) (“the Registration & Collection Act”)). Upon recovery, the funds will presumably eventually find their way to the wife, but she presently has no legal or equitable proprietary interest in the debt. It is not a chose in action in her hands. If the husband’s liability is counted, but the debt not also notionally counted as an asset of the wife, their respective financial circumstances will be unfairly distorted. If the husband is not relieved of liability for the child support arrears pursuant to his pending child support departure application, he should bear responsibility for the entirety of the debt. The wife should not indirectly bear joint responsibility for its payment, which would be the effect of allowing the husband to count it among his liabilities.
The wife contended the husband should be regarded as having the benefit of “other property not known”, which he allegedly failed to disclose (item 17). In final submissions, she asserted his failure to give proper disclosure under Chapter 13 of the Family Law Rules 2004 (Cth) was evident from the murky circumstances related to motor vehicles transactions, his retention of large amounts of cash, and his curious acquisition and then disposal of a proprietary interest in a parcel of real estate at Raymond Terrace. Her contention of his failure to give proper disclosure is rejected, but it is necessary to explain why in each instance.
The husband transferred two cars (items 6 and 7) to his brother in May 2013 to partially satisfy the interim property settlement order made in the wife’s favour at that time. Another car owned by the husband (a 1971 Ford) was sold at auction for slightly more than the single expert’s valuation,[22] and the net proceeds of sale split equally between the parties pursuant to another interim property settlement order made in September 2014.[23] Another car (item 8) was proven to belong to the husband’s brother. The wife failed to prove that another car (a 1976 Ford) was really owned by the husband and not his brother. The husband told the single expert that car was not his,[24] the brother confirmed his ownership of the car during cross-examination, and no evidence was adduced by the wife to disprove it.
[22] Affidavit of Mr R 18/7/13, page 8
[23] Husband’s affidavit, para 75
[24] Affidavit of Mr R 18/7/13, page 7
The wife alleged the husband accumulated and kept for himself large amounts of cash.[25] The husband denied he “ever” received cash payments for concreting jobs done by either him or the company, but I do not accept such an absolute denial as truthful. Even his counsel conceded such evidence “did not do [the husband] a great deal of credit”. Nonetheless, such an incredible denial does not automatically mean the remainder of the husband’s evidence is worthless – either in respect of that issue or more broadly. Most probably the husband did accumulate cash, but that is neither unlawful nor extraordinary. It is only unlawful to deliberately conceal income to evade tax, which the evidence fell well short of proving.
[25] Wife’s affidavit, paras 51-52, 55-57, 59-61
The wife alleged the husband told her, in about April 2012, he had accumulated $60,000 in cash. The husband denied it. The wife alleged she actually saw the husband take that cash with him when he left the former matrimonial home to live in a caravan in August 2012, when they briefly separated. They reconciled in December 2012, but the wife was silent about whether the husband brought any of the cash back. If he did, there was no point to her evidence about how she saw him remove the cash some months before. If he did not, it follows she was content to regard the cash as having been spent by the husband and no longer available to them both on their resumption of cohabitation.
Although the wife’s own evidence raised more questions than it answered, the husband’s evidence and the surrounding objective facts foreclosed the issue. He credibly denied removing any large amounts of cash from the household. The parties’ final separation on 7 March 2013 came as a surprise to him. He was not expecting to leave the former matrimonial home and so he did not foresee the need for him to remove cash from the house before the final separation. He departed the former matrimonial home on 7 March 2013 under the arrest of police officers following a complaint by the wife. His collection of some belongings upon departure was witnessed by the police officers and the wife.[26] He could not have secreted upon his person a wad of cash, let alone a wad as large as $60,000, at that time. There was no evidence adduced of any cash being found upon his person when he was searched upon arrival at the police station that evening. The husband has not been back inside the former matrimonial home since that night, because an apprehended violence order was made against him precluding his attendance at the property, and the wife was adamant there was no more cash at the property now.
[26] Husband’s affidavit, para 18
When the husband was released by police on bail that night he went to live in a caravan parked in a caravan park. Later, he went to live at his brother’s house. His accommodation was not salubrious. As his counsel submitted, he did not “live large”. There was no evidence of any flamboyant expenditure. His lifestyle was consistent with modest thrift and quite inconsistent with access to large sums of cash.
As for the Raymond Terrace property (item 36), the facts were largely uncontroversial. In February 2013, before the parties’ separation, the husband and his brother contracted to acquire legal title to the property as equal tenants in common. The purchase was completed in March 2013, just after the parties’ separation. They bought the property to help their parents acquire it, given their parents could not raise their own finance at the time. There was no evidence the husband contributed any money to the purchase, so he did not acquire any equitable interest in the property pursuant to an implied or resulting trust. Some months later, in October 2013, the husband transferred his legal title in the property to his brother for consideration of $1, after which time he had neither a legal nor equitable interest in the property.[27]
[27] Husband’s affidavit, paras 76-94; Affidavit of I Ignacio, paras 14-24; Affidavit of Mr J Ignacio, paras 14-55; Wife’s affidavit, paras 34-47, 74, 76, 77
There was no evidence the husband made any financial contribution to the maintenance of the loan secured by mortgage over the property. The company paid $300 per month to the husband’s brother between May and December 2013, which the wife asserted was some form of surreptitious financial contribution to the property by the husband, but it was simply payment of a monthly storage fee by the company as consideration for permission to use the property as a repository for some of the company’s tools and equipment which by then had been moved from the former matrimonial home. The company did not make any “mortgage” payments in respect of that property, as the wife originally suspected it did,[28] but later conceded she did not know. The loan repayments made by the company at that time related to a CBA loan in respect of a parcel of property it owned at Rutherford.[29]
[28] Wife’s affidavit, para 76
[29] Order 6(b) made on 3/5/13; Exhibit H11; Wife’s affidavit, paras 27-28
The company’s monthly storage payments ceased in December 2013 when the mortgage over the Raymond Terrace property was discharged by the husband’s parents and they decided not to charge the company any more storage fees. Such largesse is common in many families and, despite the wife’s suspicions, was unsurprising in this case because the husband and his brother had done their parents a favour by buying the property for them when they could not. The Deed of Agreement relating to the transaction, executed in March 2013 by the husband, his brother, and their parents, was disclosed to the wife in May 2013.[30] It was not a subsequently contrived hoax, as the wife implied.
[30] Exhibit H7, Part 2
The parties contended for numerous “add-backs” (items 19-23), but their proposals are rejected.
The wife received $40,000 from the husband by way of interim property settlement in May 2013 (item 19), but she spent that on acquisition of a car (item 9), which is already counted among her assets, and to otherwise meet living expenses.[31] There was nothing unreasonable about that.
[31] Wife’s affidavit, para 104
The husband sold shares he owned in July 2013, for which he received $14,750 (item 20) and he thereafter spent the money to purchase clothes and furniture for himself and the children. Nor was there anything unreasonable about that. The wife sought particulars about the sale in February 2015[32] and some weeks later the husband provided them.[33]
[32] Wife’s affidavit, Annex N
[33] Exhibit H17
In August 2013 the wife sold a caravan, but the husband does not believe she fully accounted to him for all of the sale proceeds (item 21).[34] The wife was not challenged about any unreasonableness surrounding that transaction, so presumably the husband acknowledged his grievance lost traction. It is ignored.
[34] Husband’s affidavit, paras 73-74
In March 2013 the husband withdrew $10,000 against the mortgage immediately following the parties’ final separation (item 22). He used the money to pay bills and start a separate household with at least the two eldest children, who have lived with him ever since. He could take only very few chattels from the former matrimonial home, given his departure from the property under police arrest and the restrictions then placed upon his return to the property by the terms of the apprehended violence order. His expenditure of that $10,000 was not therefore unreasonable. It is not added back.
The proceeds derived by the wife through the sale of some Car parts (item 23) are not added back, since the wife has or has had the benefit of those chattels to the extent of the value estimated by the single expert and the parties agreed those parts should be treated as an existing asset (item 4).
The wife contended the husband’s taxation liability (item 28) should be disregarded as a current liability because he accrued the liability on income he spent himself. The debt exists, it needs to be paid, and it is counted.
The quantum of the outstanding council rates on the former matrimonial home (item 29) and the outstanding school fees for the youngest child (item 30) were inadvertently reversed on the balance sheet exhibit. In fact, the outstanding rates are $1,610[35] and the outstanding school fees are $2,334.[36]
[35] Exhibit W4
[36] Exhibit W5
The balance sheet exhibit attributed the liability for rates levied on the former matrimonial home (item 29) solely to the wife, but that cannot be correct. The parties are joint owners of the property, in which case they have joint liability for the debt, as the rate notice discloses.[37] The debt is therefore attributed to the parties in equal shares.
[37] Exhibit W4
The parties sensibly agreed it was just and equitable for their property interests to be adjusted (s 79(2)), since their marital separation requires the severance of their joint interests in several assets and liabilities (items 1, 24, 25, 26, and 29), the most significant of which is the encumbered former matrimonial home.
Contributions
At the commencement of their cohabitation, the parties had few assets. The wife had an old car, some savings, and the furniture within her rented home.[38] The husband had a car.[39]
[38] Wife’s affidavit, para 5
[39] Wife’s affidavit, para 6
The first home the parties bought in 1998 was encumbered by mortgage to the full extent of its value. They were only able to purchase the property because of the husband’s parents’ willingness to guarantee their loan, which they did by granting a collateral mortgage to the bank over their own home.[40] The husband’s mother also loaned the parties extra money to renovate that property, which was repaid on sale of the property.[41]
[40] Wife’s affidavit, paras 7-8; Husband’s affidavit, para 99; Affidavit of I Ignacio, p 3-6
[41] Affidavit of I Ignacio, para 7
Thereafter, the parties bought numerous parcels of real property, which they renovated and sold for profit.[42] The parties’ development of another property at F Town was only possible because two-thirds of the purchase price and renovation costs were paid by the husband’s parents and brother. They were repaid on subsequent sale of the property.[43] The wife would not admit such financial accommodation in cross-examination, but equally, she was not prepared to deny it. The wife admitted in cross-examination that members of the husband’s family did help perform some of the renovation work on those properties, but she did not accept such help was as extensive as the husband and his brother alleged.[44] I accept the evidence of the husband and his corroborative witnesses that the parties were assisted in the manner alleged.
[42] Wife’s affidavit, paras 12-29
[43] Affidavit of I Ignacio, paras 8-10; Affidavit of Mr J Ignacio, paras 85-87
[44] Husband’s affidavit, paras 100, 103, 110, 114, 118; Affidavit of Mr J Ignacio, para 88
The husband was always gainfully employed throughout the parties’ relationship. He was initially employed by his parents, but then moved building work. He became self-employed as a sole trader in 2005 and the parties then continued his business as a partnership styled “Ignacio” from 2006 until 2011, when the husband incorporated the company and the business was transferred from the partnership to the company. The company ceased to operate in 2014 and the husband secured employment elsewhere.[45]
[45] Wife’s affidavit, paras 48, 88, 91; Husband’s affidavit, paras 12-13
The wife was also gainfully employed for portions of the parties’ relationship, punctuated by her confinement with the children. Her work experience was reasonably broad. From 2007 until separation in 2013, her employment was within the partnership and the company.[46]
[46] Wife’s affidavit, paras 49, 88; Husband’s affidavit, para 14
The wife undoubtedly took principal responsibility for running the household and for the care and supervision of the children,[47] but I accept the husband supported her in that role.[48] The wife’s bombastic insistence in cross-examination that she did “all” of that work and the husband did none was plainly false. It was not reflected in the questions she posed to the husband about her being “primarily” responsible for that work, which the husband frankly and credibly admitted was correct. The wife’s failure to make any reasonable concession in cross-examination was explained by her anger. When she prepared her affidavit in calmer circumstances she conceded she was “generally” responsible for household tasks,[49] implying the husband did indeed play the supporting role he asserted.
[47] Wife’s affidavit, paras 114-119
[48] Husband’s affidavit, paras 123-128
[49] Wife’s affidavit, para 117
Since the parties’ separation, the husband has been almost exclusively responsible for the middle child, because she lives with him and rarely sees the wife, and he is responsible for the youngest child when she frequently spends substantial periods of time in his care.[50]
[50] Husband’s affidavit, paras 129-130
Earlier mention was made of the husband’s transfer of assets to his brother at depreciated prices in May 2013. The loss of equity in those assets at the husband’s unilateral discretion is an issue for consideration at this point.
The husband sold a boat to his brother, though the circumstances of the transaction remain obscure. The husband’s evidence-in-chief[51] was supplemented by his evidence in cross-examination: the boat was sold in May 2013 (not 2014) for $12,000, but because he already owed his brother $7,000, he only received the net amount of $5,000. The husband’s brother said in cross-examination he paid a net amount of about $7,600 to the husband and the debt of $7,000 due to him was then discharged.[52] The boat was valued by the single expert after that transaction at $16,000.[53] Whether the boat was actually sold for $12,000 or $14,600, it was not for much less than the market value.
[51] Husband’s affidavit, para 70
[52] Affidavit of Mr J Ignacio, para 83
[53] Affidavit of Mr R 18/7/13, page 8
The husband sold a valuable second hand car to his brother for $13,300,[54] even though he bought it for $45,000 only seven months beforehand.[55] The husband set the sale price for the car by reference to the Red Book price guide, which specified $13,300 as the trade-in value for the car in “good” condition,[56] before it was valued at $40,000 by the single expert.[57]
[54] Husband’s affidavit, para 66; Wife’s affidavit, Annex V
[55] Husband’s affidavit, para 68
[56] Exhibit H6
[57] Affidavit of Mr R 18/7/13, page 8
The husband sold a vintage car to his brother for $20,100,[58] even though he bought it for $45,000 about two years beforehand.[59] The husband set the sale price for the car by reference to the Red Book price guide, which specified $20,100 as the trade-in value for the car in “average” condition,[60] before it was valued at $28,000 by the single expert.[61] The single expert agreed in cross-examination the car had some “knocks and bruises”.
[58] Wife’s affidavit, Annex T
[59] Husband’s affidavit, para 63
[60] Exhibit H6
[61] Affidavit of Mr R 18/7/13, page 8
The husband sent the Red Book price guide to the wife in March 2013, about a month before he sold the cars to his brother.[62] Given his reliance upon the price guide, which he disclosed to the wife in advance, her criticism that he dissipated assets at deceitfully low values was unsustainable. Nonetheless, acceptance of the single expert’s valuation evidence means the husband lost up to $30,000 on the transactions. However, it should be remembered the husband’s brother and parents helped the parties with both physical labour and financial accommodation in the early stages of their cohabitation when they were beginning to invest in real estate projects to improve their wealth. The benefit the parties received from that past assistance was greater than the detriment they suffered through the husband’s transfer of those cars to his brother at modest prices.
[62] Exhibit H6
The parties agreed their overall contributions were equal to the time of separation. While the husband asserted their post-separation contributions were also equal, the wife contended her post-separation contributions were superior and increased her overall entitlement to 55 per cent of the assets. The differential was said to result from her post-separation primary care for the youngest child and the greater financial burden she bore in maintaining that child. I reject both arguments.
Although the youngest child has lived with the wife since separation, she has spent substantial amounts of time in the husband’s care. Presently, that amounts to five nights per fortnight in school terms and for half of all school holidays. Significantly, the husband has had the sole and exclusive care of the two eldest children since separation (though the eldest attained his majority in November 2013), since neither of them spend any time with the wife.
The husband’s payment of child support to the wife in respect of the youngest child has been irregular and substantial arrears have accrued. The husband’s child support departure application is yet to be addressed, but presently it is enough to note that he did pay some child support to the wife for the maintenance of the youngest child, though she paid him none for his maintenance of the middle child. He bore sole responsibility for the financial support of the eldest child until he attained his majority and he continues to bear exclusive responsibility for the financial support of the middle child.
The parties’ contributions result in equal entitlement to the available assets and superannuation interests.
Adjustment
The husband contended there should be no adjustment for either party by reference to the criteria under ss 79(4)(d)-(g) and 75(2) of the Act.
Conversely, the wife contended for an adjustment in her favour of “not less than 10 per cent”, though she envisaged it could be considerably more. She cited four reasons why: first, the husband’s unexploited income-earning capacity; secondly, the prospective value of the husband’s tortious claim for personal injury damages; thirdly, the income-earning potential of the husband’s partner; and lastly, her prospective receipt of only small amounts of child support from the husband for the maintenance of the youngest child.
The husband injured his shoulder in May 2013. The wife said in cross-examination his shoulder injury had been present for “years and years and years”, but she was uncorroborated and the husband denied it. She alleged in earlier correspondence that the husband injured his shoulder in 2004 and 2012, which she asserted she would procure documents by subpoena to confirm.[63] If she did, none was tendered, and the husband’s denial of residual shoulder disability prior to the accident in May 2013 remained undisturbed.
[63] Wife’s affidavit, Annex N (page 55)
The wife tendered photographs of the husband using a power drill,[64] which were admittedly taken some time after May 2013, but that did not prove he has no disability at all or that his disability is much less severe than he contended. As the husband observed in cross-examination, he is depicted in the photographs taking all, or at least some, of the drill’s weight with his left arm.
[64] Exhibit W2
Since sustaining the shoulder injury in May 2013, the husband has received several steroid injections, with only limited relief, and undergone two arthroscopic procedures. He still takes pain relief medication.[65]
[65] Husband’s affidavit, paras 53-59
The shoulder disability and its suppressant effect upon his working capacity were easily proven by the evidence. The husband successfully claimed upon an income protection insurance policy under which he was paid benefits for two years until the policy indemnity period expired.[66] Dr P, the single expert medical practitioner who was not required for cross-examination, saw the husband had “visible and palpable” muscle wasting and confirmed he had “significant right rotator cuff pathology”. He confirmed the husband was unfit for normal work duties as a concreter, on the assumption such duties entailed prolonged heavy physical work with both shoulders, strenuous or repetitive forward reaching, or overhead activity. He said the husband’s “long term prognosis” was preclusion from “ever” returning to heavy manual work involving his right shoulder.
[66] Husband’s affidavit, para 28
The husband utilised his residual capacity for paid employment by securing work as a concreting supervisor, which avoids heavy physical duties. He has held that job since May 2014 and works between 20-24 hours per week on a casual basis.[67] His current employer apparently has more work available to offer the husband, but he credibly denied any capacity to work more. He said “my body can’t do more than I’m doing at the moment”.
[67] Husband’s affidavit, paras 32, 51
Such work currently generates gross income of about $50,000 per annum.[68] I am satisfied that is the limit of his income-earning capacity. It was not suggested he could earn more in some other vocational field. His employment experience is limited to the labouring work afforded by his parents and the concreting work he has done (as a sole trader, through the partnership, through the company, or in paid employment) for the last 10 years.
[68] Husband’s financial statement, para 9
The wife’s income-earning capacity is inferior to the husband’s, though still roughly comparable. She has had broad employment experience over the last 20 years in hospitality and office administration. In the hospitality industry she held a management position and had about 150 other employees “under [her] wings” and earned around $35,000 gross per annum. More recently, when working in the partnership and for the company, she organised the payroll, made superannuation contributions, paid bills and collected debts. She does have the continuing primary responsibility for the care of the youngest child, but she is now aged eight years and she spends substantial amounts of time in the husband’s care. The wife undoubtedly has some income-earning capacity, which is not presently being exploited.
The husband’s partner no longer works. She gave birth to twins in January 2015 and she has two older children, aged eight and six years, who live mostly with her and the husband. She was self-employed until her confinement with the twins in November 2014, at which point she ceased work, closed her business, and sold the business equipment for paltry amounts, which still left her in significant debt.[69] She owns the house in which she, the husband, and the children live, but she has little, if any, equity in it. She now devotes all of her time to the care and supervision of her children. She has a desire to eventually return to paid employment but, understandably, she presently has no idea when that might be. In all probability, it will be a period measured in years rather than months. For the time being, her only income will be family tax benefits and child support paid by the father of her two oldest children. Despite the wife’s contention otherwise, the husband’s partner does not measurably improve his financial position.
[69] Affidavit of Ms T, paras 6, 10-14, 16
The wife’s submission for an adjustment in her favour on account of the husband’s probable infrequent and/or irregular payment of future child support in respect of the youngest child is rejected for the same reason her past contributions were no greater than the husband’s on that account. The wife has paid the husband no child support at all in respect of the middle child and will not likely do so in the future. Although the husband’s child support liability for the youngest child will continue for much longer than the wife’s child support liability for the middle child, the husband’s future payment of child support will probably be more reliable following the determination of his child support departure application and the conclusion of these proceedings. The dispute between the parties over their financial circumstances will then be finally resolved.
As mentioned earlier, the husband has commenced common law proceedings seeking to recover tortious damages for his injury and disability arising out of the car accident in May 2013. The insurer denied liability for damages and the claim is still pending before a State court.[70] It is, of course, entirely speculative as to whether the husband will recover any damages at all, and if so, the quantum of such damages. The most that can be said is that his recovery of some damages is possible, which is too tenuous a basis upon which to adjust the parties’ property interests.
[70] Husband’s affidavit, para 61
The husband was asserted to have accrued long service leave in the building and construction industry. His “total recorded service” stands at the same calculation as his “unclaimed service” at 6 years and 76 days.[71] He has only worked in the concreting industry for some 10 years, so what that means in terms of his entitlement to take leave, or payment in lieu therefore, was never explained. For that reason, no weight is reposed in the evidence.
[71] Exhibit W6
The parties are of similar age and, aside from the husband’s shoulder disability, both are in good health. They both have superannuation interests of similar value. They both have the continuing care of a minor child of the marriage, though the wife will retain the role of primary carer for a child for longer than the husband. On account of that fact, the wife is entitled to a modest adjustment in her favour. The adjustment is quantified at five per cent of the parties’ total net assets and superannuation interests, which equates to about $30,000 in value. That sum is equivalent to the husband’s net income for about one year. I reject the wife’s submission that she is entitled to more and I reject the husband’s submission that she is entitled to less, or even none.
Child support applications
The assessment and payment of child support by the husband in respect of the parties’ youngest child, who lives with the wife, has been the source of perpetual vexation for the parties.
A schedule of the child support assessments issued to the parties, and copies of the assessments, were tendered.[72]
[72] Exhibit H14
The parties applied for and contested the child support assessments in the months following their separation.[73] In June 2013 the wife applied to change the existing assessment, in August 2013 the Child Support Registrar decided to change the assessment, in November 2013 an objections officer partly allowed the husband’s objection to the varied assessment, and in April 2014 the Social Security Appeals Tribunal (“SSAT”) determined the wife’s appeal.[74]
[73] Wife’s affidavit, paras 123-124; Husband’s affidavit, para 120
[74] Wife’s Annex W; Husband’s affidavit, Annex C
The decision of the SSAT did three things. It:
(a)Determined the child support payable by the husband in the closed period between 30 April 2013 and 18 November 2013;
(b)
Set the assumed incomes for the parties from 19 November 2013 until
31 March 2015; and
(c)Determined the increased amount of child support payable by the husband in the closed period between 1 January 2014 and 31 March 2015.
The SSAT decision ceased to be of any effect for the purpose of child support assessments after 31 March 2015. Its decision did not extend beyond that date.
Three separate child support assessments were later successively issued by the Child Support Registrar to the parties between 12 and 23 May 2014, each of which set the monthly rate of child support payable by the husband as from 1 April 2015. The last of those assessments, which presumably superseded the two assessments that preceded it, applied to the closed period between 1 April 2015 and 30 June 2015.[75]
[75] Exhibit H14
The most recent child support assessment was issued by the Child Support Registrar on 1 May 2015, covering the 2015/2016 financial year.[76]
[76] Wife’s affidavit, para 50.2.1, Annex P
The SSAT decision made in April 2014, the administrative assessment issued on 23 May 2014, and the administrative assessment issued on 1 May 2015 therefore collectively determine the husband’s child support liability for the continuous period from 30 April 2013 until 30 June 2016.
As at 12 November 2015, the husband’s child support payment arrears totalled $22,359 and had accumulated over more than the preceding two years.[77]
[77] Exhibit H15
The husband applied for orders that had the dual effect of:[78]
(a)Expunging all child support arrears accrued from 20 March 2014 until the time of this judgment, by re-setting the child support assessment at the amount already paid by him over that period; and
(b)Judicial assessment of his child support liability at $25 per week from the time of this judgment up to 30 June 2016 (the reference to “2013” instead of “2016” in his proposed orders was a typographical error).
[78] Further Amended Response filed 30/10/14 (page 7)
Even if the first limb of the husband’s application was successful he would still be left with a child support debt of $5,791, because arrears of that amount accrued prior to 20 March 2014.[79]
[79] Exhibit H15
Although the husband’s application was posited as an application for departure from administrative assessment of child support it was, in reality, both that and an appeal against the SSAT decision. That is because the SSAT decision regulated the child support assessments up to and including 31 March 2015 and the husband wanted to discharge the child support arrears calculated in accordance with those assessments over the preceding 12 months, from March 2014. His application was, at least in part, a direct challenge to the correctness of the SSAT decision. Only the remaining part of the first limb of the husband’s application, which related to the period after 31 March 2015, could be properly regarded as a departure application. Since the first limb of husband’s child support application implicitly involved two different components, each should be addressed separately.
As for the part of the application properly characterised as an appeal against the SSAT decision, the husband did not appeal in a timely way. At the time of the SSAT decision, an appeal was available to this Court, but only on a question of law (s 110B of the Registration & Collection Act) and only if filed within 28 days of the SSAT decision (r 4.22 of the Family Law Rules). The husband did not avail himself of the right of appeal and, since then, both the process of administrative review of child support assessments and the avenue of appeals against such administrative assessments have been changed by enactment of the Tribunals Amalgamation Act 2015 (Cth). The SSAT is now extinct, the Administrative Appeals Tribunal is now invested with the jurisdiction to review child support assessments, and appeals from such administrative reviews are now no longer available to this Court. Consequently, even if the husband could satisfactorily explain his delay and establish that his grievance with the SSAT decision involved a question of law, so as to justify extension of the time within which to appeal, it is no longer open to this Court to grant the extension. His appeal, and any antecedent application related to it, now lies to another court.
The husband could not now, in violation of a regulated path of appeal, simply re-contest the controversy determined between the parties by the SSAT. The Assessment Act (s 98J) is not so broad as to enable parties to engage in child support assessment departure disputes whenever they feel inclined, irrespective of surrounding circumstances. Multiple departure applications are possible, but subsequent departure applications are only permitted when the circumstances at the time the subsequent application is made warrant it. In this case, in so far as the husband’s application related to the period up to 31 March 2015, it hinged on facts that existed at the time of the SSAT decision in April 2014 – not on changed circumstances that existed when he made the departure application in his Further Amended Response filed in October 2014 or when he actually pressed the application at trial in December 2015. He cannot now seek to disturb the SSAT decision by an application that masquerades as a departure application, when it really is not so. Even if he could now press the application in its guise as a fresh departure application, it should not succeed in those circumstances because it would not be just and equitable or otherwise proper for it to do so, thereby leaving the mandatory conjunctive requirements of the Assessment Act (s 117) unsatisfied. Success of the application as a departure application would be tantamount to an abuse of the regular appeal process.
As for the part of the husband’s application that really did seek departure from the administrative assessment of child support, covering the period from 1 April 2015 to the present, it too must be considered in two parts.
The most recent child support assessment covers the current financial year, commencing on 1 July 2015 and ending on 30 June 2016. The assessment was calculated in reliance upon the husband’s 2014 taxable income of $55,070,[80] which accords with both his declared taxable income of $58,604 for 2014[81] and his admitted current income of approximately $50,000 per annum.[82] Since the assessment was calculated using a figure approximating his correct income, there is no reasonable basis upon which to entertain his application in relation to the child support assessment for the remainder of the 2015/2016 financial year. The husband’s level of income was the only material basis upon which he sought departure from the administrative assessment for that period.
[80] Wife’s affidavit, Annex P
[81] Exhibit H16
[82] Husband’s financial statement, para 9
That leaves for consideration the residual part of the departure application related to the closed period between 1 April 2015 and 30 June 2015. That precise period was covered by the child support assessment that issued on 23 May 2014, requiring his payment of $875.67 per month.[83] In other words, the husband’s total child support liability for that historical closed period of three months approximated $2,628. Even though that assessment was calculated by imputation of the husband’s income at the erroneously high figure of $146,808, applying the provisions of the Assessment Act, I am not satisfied of the existence of special circumstances that would now justify any dispute over a liability of that modest quantum (s 117(1)(a)), or that it would be just and equitable or otherwise proper to make a departure order, given the relative insignificance of that liability amongst the parties’ aggregate property interests which are now to be divided pursuant to their respective property settlement applications (s 117(1)(b)).
[83] Exhibit H14
Consequently, the husband’s application in relation to child support is dismissed.
The wife also applied for orders relating to child support. She sought the dismissal of the husband’s child support departure application, her recovery of the accrued child support arrears directly from the husband, and an order compelling the husband to pay to her indeterminate amounts for which she may become indebted to the Commonwealth.[84]
[84] Further Amended Amended Initiating Application filed 7/8/15, Orders 11-13
The wife’s application is also dismissed. She had no standing to personally recover child support arrears from the husband. Any child support debt is due by the husband to the Commonwealth. The wife was able to apply to recover the debt, but only if she gave sufficient notice in writing to the Child Support Registrar (ss 111F, 113, 113A of the Registration & Collection Act), which she failed to do. She gave no notice of her proposal to the Registrar until the last day of trial,[85] so the evidence was silent about whether the Registrar consented to novation of the debt. Nor was there any basis upon which to order that the husband reimburse her for debts she may in future owe to the Commonwealth. No evidence was adduced to prove she had any such debts or that it was likely she would incur any such liability.
[85] Exhibit W3
Conclusions and orders
The wife has an overall entitlement to 55 per cent of the parties’ net assets and superannuation interests, which amounts to $334,568 (= 55 per cent x (321,616 + 286,690)).
Besides the personal property in her possession (items 2, 3, 4, and 9), the wife wants to take and retain sole proprietorship of the former matrimonial home (item 1) and, assuming she also took exclusive responsibility for the parties’ joint debts (items 24, 25, 26, and 29), she would have assets and superannuation interests with a net value of $591,117 (= assets of 673,540 – liabilities of 103,332 + superannuation of 20,909). That would require her payment of $256,549 (= 591,117 – 334,568) to the husband to ensure they each receive their correct entitlement.
The evidence revealed no source from which funds of that quantum could be raised by the wife, so it is unlikely she can retain the former matrimonial home subject to its encumbrances. In all likelihood, the former matrimonial home will need to be sold, but the orders permit her to retain the home and pay out the husband’s interest if she is able to raise the funds.
If she is unable to do so, the orders provide for sale of the former matrimonial home, preferentially by private treaty, but otherwise by auction. Upon sale, the proceeds will be used to pay out in priority: the expenses of the sale; the joint encumbrances over the property (items 24 and 29); the parties’ joint debts (items 25 and 26); the sum of $13,998 to the husband (which will then leave him with 45 per cent of the net value of personal property and superannuation interests); and then distribution of the balance in shares of 55 per cent to the wife and 45 per cent to the husband. That will ensure they each respectively receive 55 and 45 per cent overall.
Orders to that effect are just and equitable.
I certify that the preceding one hundred and seventeen (117) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Austin delivered on 10 February 2016.
Associate:
Date: 10 February 2016
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