KEPLER & MORO

[2018] FamCA 1122

FAMILY COURT OF AUSTRALIA

KEPLER & MORO [2018] FamCA 1122

FAMILY LAW – CHILD SUPPORT – where the wife seeks a departure from administrative assessment of child support and that the husband pay the children’s educational expenses including tuition fees and arrears and private health insurance by way of non-periodic child support payments – where the children’s educational expenses are significant – where the parties agree that the children should attend private school - where the wife has primary care of the children – order made that the husband pay $3033 per week by way of periodic child support payments – order made that the husband pay the children’s private school fees including any arrears and private health insurance by way of non-periodic payments.

FAMILY LAW – SPOUSAL MAINTENANCE – application for interim spousal maintenance – where the wife seeks that the husband pay $500 per week in spousal maintenance – where the wife does not have sufficient income to support herself and the children – where it was found that the husband has no capacity to meet the order in addition to child support payments – no order made for spousal maintenance.

Family Law Act 1975 (Cth)

APPLICANT: Ms Kepler

1st RESPONDENT: Mr Moro

FILE NUMBER: MLC 1002 of 2018

DATE DELIVERED: 21 December 2018

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Macmillan J

HEARING DATES: 4 December 2018

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Ben-Simon

SOLICITOR FOR THE APPLICANT:	Leanne Cain & Associates
COUNSEL FOR THE 1ST RESPONDENT:	Mr Fuller
SOLICITOR FOR THE 1ST RESPONDENT:	Brygel Lawyers

ORDERS

IT IS ORDERED THAT

1. Pursuant to s 117 of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act) and until further order there be a departure from the administrative assessment of child support issued 8 June 2018 and/or any further assessment that may issue such that the husband pay child support for the children of the marriage X born … 2008, Y born … 2009 and Z born … 2013 as follows:

   (a)   As and from the date of this order periodic child support of $3033 per calendar month;

   (b) And by way of non-periodic child support pursuant to s124 of the Assessment Act as follows:

   i.All invoiced school fees including any arrears with respect to the children’s enrolment and attendance at C School,; and

   ii.Maintain Private health insurance for the children at the current level.

2. The payments made by the husband pursuant to paragraph 1(b) herein are additional to the periodic child support payable by the husband pursuant to 1(a) herein and are not to be credited against any periodic child support payable by the husband for the children.

3. All interim applications be otherwise dismissed and removed from the list of cases awaiting hearing.

4. All extant applications for final property orders be consolidated with the extant applications for final parenting orders in the pool of cases awaiting allocation to a judicial docket.

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

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

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 1002 of 2018

Ms Kepler

Applicant

And

Mr Moro

Respondent

REASONS FOR JUDGMENT

1. This matter was listed for hearing before me in the judicial duty list on 4 December 2018. 

2. The de facto husband and wife in this case commenced cohabitation in 2006, separated under the one roof in or about May 2017, and separated physically when the wife left the former matrimonial home with the children of the marriage in July 2017.  For convenience I will refer to the parties as the husband and wife.

3. There are three children of the parties relationship namely:

   X who is 10 years of age;

   Y who is nine years of age; and

   Z who is five years of age.

4. On 16 October 2018 the parties consented to interim parenting orders which provided for the children to live primarily with the wife, spending five nights per fortnight with the husband.

5. In her application in a case filed 14 November 2018 the wife sought orders that the husband pay periodic spousal maintenance in the sum of $1000 per week and that there be a departure from the child support assessment on the basis that the husband pay non-periodic child support for the children including the payment of all arrears of school fees, all invoiced private school fees, agreed excursions, extracurricular costs and levy charges on an ongoing basis, the entirety of the children’s school book and uniform expenses, any other fees and charges with respect to the children’s schooling, extracurricular activities attended by the children and that the husband maintain private health insurance for the children at the current level together with the payment of any gap expenses for any medical, hospital or therapeutic treatment required by the children. 

6. These payments were to be in addition to the current child support assessment which was issued on 8 June 2018. In her affidavit filed 14 November 2018 the wife deposed that pursuant to the assessment issued on 10 January 2018 the husband was required to pay the sum of $2,743 per calendar month or $633 per week. The wife also said in that affidavit that the husband by continuously extending the time for payment, had only been paying $2,532 per month or $584 per week. There is no way of knowing on the evidence before me how the wife has calculated this figure  and in circumstances where I do not have any evidence as to there being any arrears I propose to rely upon the figure in the assessment. However, in any event pursuant to the assessment issued on 8 June 2018 the husband is required to pay $2,355 per month or $541.60 per week.

7. Section 116(1) of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”) provides that a liable parent or a carer entitled to child support may apply to the court for an order for departure in the special circumstances of the case if that liable parent or carer entitled to child support is a party to an application pending in that court and the court is satisfied that it would be in the interest of the liable parent or carer entitled to child support for the court to consider whether an order should be made for a departure in relation to the child in the special circumstances of the case.

8. Counsel for the husband submitted that the wife should be required to seek an administrative departure however in this case the wife seeks orders for both her support and the support of the children. The source of that financial support is the same and in my view it is essential in determining both the need for and the capacity to pay both spousal maintenance and child support that these matters be dealt with at the same time as one will inevitably impact upon the other.

9. During the course of the hearing the wife amended her proposal to seek periodic spousal maintenance in the sum of $500 per week together with periodic child support of $3,498 per month ($807.23 per week), an increase of $1,143 per month ($263 per week) to cover the cost of the children’s extracurricular, and ongoing private school fees for all three children together with school uniforms for the children. The wife estimated the costs of the school uniforms to be approximately $1,000 per annum or $19.23 per week. The school fees for the 2019 school year for all three children will be $70,740. It is common ground that the first term fees of $17,685 were due on 30 November 2018. The parties also agree that the balance of the fees for the 2019 school year are payable on 28 February 2019, 31 May 2019 and 30 August 2019. The total child support in dollar terms sought by the wife, excluding the cost to the husband of adding the children to his private health insurance, is $113,716 on an annual basis or 2,186.85 per week. The total including spousal maintenance of $26,000 ($500 per week) is $139,716 on an annual basis or 2,686.85 per week.

10. At the commencement of the hearing it was the husband’s case that he should not be required to make any non-periodic payments and that the wife’s case should be dismissed. He then said that he would agree to add the children to his existing private health insurance, at a cost of somewhere between $40 and $50 per month, but that he had no capacity to contribute to the children’s private school fees which he submitted should be paid out of the funds invested on behalf of the parties from the sale of the former matrimonial home. It was also his case that that he had no capacity to meet any increased periodic child support payments.

11. During the course of the proceedings counsel for the husband submitted that, having reflected upon his proposal, his client would agree to pay the private school fees for the children but that he would need to sell shares in order to do so. On either of the husband’s proposals, the school fees would effectively be paid out of funds that would otherwise form part of the asset pool, the only difference being the source of that capital.  

12. The way in which the parties conducted this litigation was far from satisfactory.  The wife filed an Initiating Application on 1 February 2018 in which she sought orders for both spousal maintenance and non-periodic child support. On 6 August 2018 the wife filed an Amended Initiating Application. There was no amendment to the orders she sought with respect to spousal maintenance and child support. On 16 October 2018 Senior Registrar Fitzgibbon made orders adjourning the relevant paragraphs of the wife’s application to the judicial duty list, noting that “spousal maintenance will be submitted as interrelated with Child Support.”  He further ordered that the wife file any further affidavit upon which she seeks to rely on or before 30 October 2018.  The husband was to file and serve his affidavit in response to the wife’s affidavit by 23 November 2018.  For reasons that are not clear to me, the wife filed an application in a case to clarify the orders sought and a further affidavit however she did not file those documents until 14 November 2000, some two weeks after she was required to do so.  The husband filed a response to that Application in a Case and an affidavit in support at 5.54 pm on 3 December 2018, a further two weeks later.  The fact that the wife was late filing her documents, albeit that is not satisfactory, does not in my view explain why the husband could not have filed his affidavit earlier. The fact that he did not do so made the conduct of the matter significantly more difficult for both the wife and for the court. The husband also sought to remedy deficiencies in that affidavit during the course of the hearing, seeking leave to file a further affidavit at the commencement of the second day of the hearing. For her part the wife was unable without being pressed to articulate in monetary terms the effect of the order she sought. This was similarly unhelpful. What this meant was that it was left to the court to glean each party’s case and the evidence necessary to make a determination adding significantly to the length of the case.

13. Counsel for the husband submitted that the court could not make findings and that it should not in these circumstances make the orders the wife seeks and that to do so would prejudice the husband in circumstances where he has not had the opportunity to cross-examine the wife. In particular he referred to his client’s assertion as to the wife’s income earning capacity and what she could do to increase her income. As the High Court said in Hall & Hall (2016) 257 CLR 490 at [8] affirming the Full Court in Redman & Redman (1987) FLC 91-805 in reference to an interim application for spousal maintenance, although the court must be satisfied on the balance of probabilities as to the threshold question in s 72(1) of the Family Law Act 1975 (Cth) “ ‘[t]he evidence need not be so extensive and the finding not so precise’ as on an application for a final order.” Were it otherwise it would be almost impossible for the Court to make interim orders in contested interim proceedings without the parties being cross-examined.

14. Doing the best I can on the evidence before me I am satisfied on the balance of probabilities that the wife is a self-employed part time professional and currently earns approximately $566 per week gross. I am not in a position to form a concluded view as to whether the wife has the capacity to increase her income however I note that she is the children’s primary caregiver and it is her case that she tailors her work commitments around the children’s schooling and extra-curricular activities. I also note that the husband’s evidence is generally consistent with their having been a similar arrangement during the marriage. In any event, even I were satisfied that the wife could generate additional income that arguably might take her some time and these are interim orders. The wife also receives a payment of $1,200 per month or approximately $277 per week, which she says is a gift from her father. She has been receiving this payment from her father on an ongoing basis throughout the relationship and continues to do so.

15. In her affidavit filed on 14 November 2018 the wife deposes to expenses of $1,417 for herself and $1,403 for the children, not including private school fees. These figures include a figure of $627 for her and $627 for the children which is the rent she pays for her current accommodation. I am satisfied that attributing half of the rent to the children in circumstances where she must accommodate herself and the three children is not unreasonable. Despite the husband’s assertion that he pays $660 per month less than the wife for his rental accommodation, which he says adequately houses he and the children, it does not follow and there is no basis upon which I could find that the wife’s rental is unreasonable or extravagant as the husband suggests. I also note that the figure for the children is less than the figure in Part N of her Financial Statement filed 1 February 2018 when she commenced these proceedings however that was based upon her estimate shortly after separation.    

16. In his Financial Statement filed 6 March 2018 the husband deposed to the receipt of gross income of $5,127 per week ($266,604 per annum). Based upon the evidence I am satisfied that his gross salary was in fact $286,650 per annum and that $266,604 was his income after tax and superannuation contributions were deducted. Neither the husband nor the wife filed updated Financial Statements however the husband deposed that on 29 November 2018 he was advised that his base salary was going to be increasing from $286,650 to $295,790 inclusive of superannuation and that he would be receiving a cash bonus of $49,500 on 15 December 2018. Unfortunately this was information not available to the wife until after office hours on the day before the hearing. As this is a case in which there is clearly not a great deal of trust between the parties, the late filing of the husband’s material only served to add to that distrust. It is also unfortunate that the documents the husband produced at the Court’s request to support his evidence did not provide sufficient clarity with respect to the figure the husband will receive based upon his salary increase, after tax and superannuation contributions are deducted. What this meant was that it was left to the Court to extrapolate what his net income is likely to be based upon his previous salary and the deductions from that figure. This is notwithstanding that this is information which one would expect to be readily ascertainable by the husband and in my view should have been available to the Court.

17. According to the husband’s most recent pay slip which was based upon a base salary of $286,650, the tax deducted is approximately 34.26 per cent and the superannuation contributions are approximately 7.1 per cent of that base salary. Although that does not accord with the required 9 per cent contribution to superannuation based upon his pay slip that is what the husband pays. Doing the best I can extrapolating from the husband’s pay slip but based upon his new base salary of $295,790, the husband’s gross monthly salary would be $24,649 and allowing for tax of approximately $8,444 and superannuation contributions of approximately $1,750 in the same proportions as that most recent pay slip the husband is left with a net monthly salary of approximately $14,455 or $3,335 per week. The husband disclosed an additional $103 per week he receives by way of interest and dividends which needs to be added to this figure making a total weekly income of approximately $3,438. I propose to adopt this figure for the purposes of the decision I must make.

18. The husband is also due to receive a bonus of $49,500 on 15 December 2018. It is the husband’s case that he will be left with only $17,237 after tax and superannuation is deducted and that, as he will still be a member of the Employee Share Purchase Program when that bonus is paid, some of that bonus will be applied to the purchase of shares in that scheme. The husband did not adduce any evidence to support this assertion, however if I were to extrapolate from the husband’s most recent pay slip, as I did with respect to his new base salary in order to calculate the tax and superannuation contributions, the husband would be left with a figure of approximately $28,704.60 less any amount contributed to the share program.  

19. The husband’s weekly expenses as set out in Part N of his Financial Statement are $1,644 for himself and $1,249 for the children, a total of $2,893. His other expenses excluding tax, which I have already taken into account, rent and for the purposes of this exercise excluding the child support of $633 which he said he was paying at the time are $195 per week making his total expenses $1839. I have divided his rent of $1,100 equally between he and the children, as the wife has done, making his expenses $2,389 and the children’s expenses $1,799, a total of $4188 and leaving the husband with a shortfall of approximately $750 per week. The husband now concedes that he will not continue his participation in the share program and on that basis as from 15 January 2019 his expenses of $2,389 will be $770 less making his expenses $1,619. He also acknowledges that the $675 he says he pays by way of kindergarten fees for the youngest child will not be payable on an ongoing basis and the privates school fees for that child are included in the figure of $70,180. His expenses for the children will be on this basis $1,124. This reduces his total expenses of $4,188 per week by $1,445 making total expenses of $2,743 per week. This leaves him on his figures with a surplus of $695 per week. However this also assumes that all of his expenses are necessary expenses. I will return to this issue.

20. Based upon his performance the husband also receives shares in his employers share plan as part of his remuneration. The husband deposes that he received a performance equity grant of shares valued at US $47,156 (AUD $60,198) which will be allocated in January 2019. Although this equity grant does give rise to a taxation liability there is no evidence before me based upon which I could ascertain, other than in general terms that it is likely to be at the highest marginal rate, what that tax liability is likely to be and in any event other than any PAYG instalments the tax is unlikely to be payable until sometime in late 2019/early 2020. There is however the tax payable for the financial year ending June 2018. I note in this regard that, although the wife was agreeable to the tax on the sale of shares being paid out of capital, it is also the case that if the husband is to have additional income available to meet the cost of supporting the children, and assuming some part of the $65,084 which is payable in 2019 relates to shares the husband has received as part of his remuneration, she may also have to consider paying not only the tax on the sale of shares but also the tax which is referable to the allocation of shares in the Employee Share Plan and upon which tax has been assessed where those shares are likely to form part of the asset pool or at the very least be taken into account in the event that they have not vested. Even if that is not the case, any tax that should not have been paid out of joint funds can be adjusted at settlement.

1. The husband deposed that this tax would be payable in March 2019 whereas it was the wife’s case that the husband would not have to lodge his return until  31 March 2019 and that thereafter tax would not be payable until late May or July. It was the wife’s case that on this basis the balance of the proceeds of sale should be reinvested for a 6 month period making those funds available to pay the tax in June 2018. Neither party adduced any evidence as to when the husband would be lodging or required to lodge his tax return nor when, on that basis, any tax assessed would be payable and I cannot determine this issue. However this is evidence that the husband should be able to make available to the wife enabling them both to make an informed decision about reinvesting the funds currently held in trust on their behalf having regard to the necessity to pay any tax that is assessed.

2. The other contentious issue in this case is in relation to the monies each of the parties has received or had access to since separation pursuant to previous orders or monies that are otherwise unaccounted for. In summary it is the wife’s case that after she vacated the former matrimonial home with the children, the husband did not provide any financial support for her and the children for a period of seven weeks, refused to pay the children’s private school fees or for their extracurricular activities, refused to service the mortgage loan repayments or pay the rates (effectively living rent free in the property until settlement), retaining all of his income (including a cash bonus of $34,040 gross that he received in December 2017),  for his own benefit. The husband also purchased a motor vehicle for $53,800. After this seven week period, the husband started voluntarily paying the wife child support of $475 per week. Thereafter the wife applied for a child support assessment which was issued on 10 January 2018.

3. The wife asserts that following separation and without any consultation the husband sold a parcel of Company B shares, albeit she concedes that in September 2017 after the husband had purchased his motor vehicle they each received $27,096, a total of $54,192.

4. Pursuant to orders made by consent on 13 March 2018, the husband was ordered to pay the wife $145,000 and the children’s school fees of $50,000 from the sale of shares. Pursuant to that order he also received $105,000. The payments to both the husband and the wife were by way of partial property settlement and the payment to the children’s school is to be categorised by the trial judge.

5. The wife set out in her affidavit a table of the capital sums she says have been accessed by the husband since separation. She also set out a table summarising the shares she says have been sold by the husband since separation in addition to the $54,192 sold and divided equally between the parties in September 2017. There is some overlap between these two tables. The husband in his affidavit also set out in a table a history of the share sales and included dates upon which those share proceeds were available. It was is evidence that he has disclosed all of the share sales and he deposed that he has applied the share proceeds, not otherwise used to satisfy the orders made in March 2018, to pay 2017 school fee arrears and Term 1 2018 fees in the sum of $20,927, and to pay the $93,336 owing to the ATO. The husband’s case was that this ATO liability was for the financial years ending 2016 and 2017. If as the husband says this taxation liability refers to income earned or asset sales during the marriage, arguably the wife is likely to have had the benefit of that income and capital and any tax should be treated as a joint liability.

6. The difficulty with this analysis of these share sales is that the value of the shares that were sold is in US dollars and therefore it is difficult to marry those figures with the payments which have been made or to ascertain what if any of the proceeds of share sales are unaccounted for. In an attempt to remedy this deficiency counsel for the wife prepared what I will refer to as an Aide Memoire converting the share sales proceeds to Australian dollars. As those amounts are converted based on the exchange rate as at 4 December 2018, this does not assist.

7. Albeit that the figures and dates do not seem to marry up the parties respective totals are not that different. Whilst there may be some of these share sale proceeds unaccounted for, without knowing what the exchange rate was on the relevant date it is impossible to say how much that might be.  

8. In my view what is more significant, and a point which the husband appears not to comprehend, is that when the $53,800 he used for the car is taken into account he has not only had access to more capital than the wife he has had that capital notwithstanding that he has also had his income and bonuses less what he has paid to the wife for child support. In so far as he says he has had to support the children when they are in his care, the wife, even taking into account the child support she receives, has had to support the children for nine nights per fortnight as against the five nights per fortnight they are in the husband’s care. It would hardly be surprising in these circumstances if the wife has depleted her capital, but in my view harder to understand why the husband might have done so. However even if the husband has had more capital which appears to be the case and there may need to be an adjustment in the wife’s favour when the matter is finally determined it does not necessarily follow that this capital is still available to the husband to pay child support on an ongoing basis above and beyond those amounts the husband has disclosed. 

9. Neither party in this case seemed to have much of a sense of the reality of their position and how that might impact upon the children. The wife was focused on the preservation of the party’s capital position and in my view at the commencement of the case had somewhat unrealistic expectations about what the husband should be required to pay by way of spousal maintenance and child support and his capacity to do so. To her credit the wife did indicate that her priority was the children and their support and she also indicated that, in so far as there was a tax liability with respect to share sales, that tax could be paid out of the proceeds of sale of the former matrimonial home presently held in trust.

10. In my view the husband also appeared to have little understanding of his obligation to support both the wife and the children, and did not seem to understand that the Court was not bound to deduct all of his expenditure for the purposes of determining his capacity to meet those obligations. His insistence that the wife is maintaining an extravagant lifestyle, and that he has no capacity to further contribute at the very least to the support of the children, does not bear scrutiny in circumstances where he earns in excess of $300,000 gross per annum and the wife earns approximately $29,500 and receives a regular payment from her father, and his expenses exceed those of the wife notwithstanding she has the children more of the time. In this regard I note that, although the wife has applied approximately $80,000 of the capital she has received to her legal fees leaving her with capital of $97,000 available to use to support herself and the children’s care, the wife should not have to use capital for her support or to support the children if the husband has a capacity to contribute to their support.

11. Notwithstanding that the husband alleged that the wife is living an extravagant lifestyle, he did not make any significant challenge in relation to the wife’s expenditure for the children. Arguably it would be hard to see how he could do so in circumstances where his expenditure for the children, excluding the child support he is required to pay, is more than the wife says she now spends.

12. In circumstances where the wife seeks to prioritise the child support and the children’s school fees I propose to address the issue of child support before turning to her application for spousal maintenance. The wife seeks both increased periodic child support and non-periodic child support payments. Those non-periodic payments necessarily require a departure from the assessment as they are sought in addition to the periodic payment of child support. Section 123(3) of the Assessment Act requires the Court to hear and determine any pending application for a departure before hearing the application for non-periodic child support. On that basis I will first address the question of whether there should be a departure.

13. The process the Court must follow in determining an application for departure requires three steps. The applicant must establish one or more of the grounds for departure in s 117(2) of the Assessment Act, whether it is just and equitable as required by the terms of s 117(4) of the Assessment Act and, pursuant to s 117(5) of the Assessment Act, whether it is otherwise proper to make a particular order. Counsel for the wife did not direct me to particular grounds under s 117(2) of the Assessment Act, nor did the husband address me in any detail with respect to a particular ground or grounds nor suggest that there was no ground for a departure, focusing instead on his client’s capacity and the inequity of the Court making an order in the terms sought by the wife. That being said it is clear from the way in which the wife put her case that she relied upon the costs of the children being significantly affected because of the manner in which the children were and the parents expected them to be educated. Both parties agreed during the hearing before me that they wanted the children to continue attending their current schools. This ground under s 117(2) of the Assessment Act is established. The wife’s case is also that the administrative assessment would result in an unjust and inequitable determination of the level of financial support to be provided by the husband because of the party’s respective incomes, property and financial resources. I am satisfied that this ground is also established in circumstances where the husband has had the benefit of both his income and significant capital.

14. As previously referred to, the child support the wife is seeking, both periodic and non-periodic, is in dollar terms $2,195.61 or $2,198.61 per week. That is made up as follows:

    a)Periodic payments of $807 per week;

    b)School Fees which averaged out over 2019 will be approximately $1,360.38 per week;

    c)School uniforms at a cost of approximately $19.23 per week; and

    d)Private Health Insurance at a cost of approximately $9 to $12 per week,

15. The wife’s current income is $566 per week. She also receives a payment of $220 per week from her father. Whilst this is a gift it is a gift that she has been receiving for some time and it was not her case that these payments would not continue. However the wife’s own expenses are greater than the income she earns and the payment she receives from her father.

16. I have already found that the husband has a surplus based upon his figures of $695 per week however this figure does not take into account the child support of $541.60 he is currently required to pay. However in circumstances where the husband’s personal expenses and those of the children when they are in his care exceed the wife’s expenditure I am also not satisfied that all of the husband’s expenses are likely to be “necessary” for his support or the support of the children, and as the wife must cut her cloth so must the husband. 

17. It appears that both the husband and wife have used a substantial proportion of the capital they each received to pay the legal fees. When the wife swore her affidavit on 12 November 2018 she deposed that she had a balance of $16,967 in an NAB account in her name which was part of the capital she had received and which as at the date of the hearing had been reduced to approximately $11,000. The husband in his affidavit sworn 3 December 2018 said that he had $40,000 in his bank accounts and during the course of the hearing disclosed that his solicitor is holding $12,500 in trust on his behalf. Although I do not have the exact figure he will in a matter of days also receive his bonus which if I accept his figure will add another $17,237 to his bank balance. It is the husband’s case that he requires a $15,000 to $20,000 cash on hand as a buffer for unplanned expenses. This would arguably equally apply to the wife if not more so as she has the children more of the time.

18. I have already addressed the issue of the tax the husband says will be payable in March 2019, and am satisfied that in circumstances where there is agreement that at least some part if not all of that tax is to be paid out of the funds held in trust, I can disregard it for the purposes of the matters I must determine. The same applies to the PAYG payments of $6,187 per quarter the husband says are payable in January 2019, April 2019 and July 2019. Although in circumstances where I am satisfied that the these PAYG instalments relate to either or both of the husband’s share portfolio or his share program if there is ultimately no agreement about what amounts are to be paid out of the funds held in trust there may need to be further consideration of the husband’s capacity to pay child support.   

19. I have had regard to the fact that the husband has had, unlike the wife, the benefit of significant income in addition to the capital he has received. However even disregarding the tax liabilities I am not satisfied that the husband has the capacity to make the payments the wife seeks by way of child support let alone the spousal maintenance. The husband does have savings which he can and in my view should be required to use to pay the school fees and I note that those fees are not all immediately payable. However even allowing him a buffer of say $10,000 he will also have to rely upon income to pay the school fees absent any further distributions of capital. There is in this case as previously discussed a significant level of distrust between these parties and I have some reservations about how they will work out what extras are payable and how that payment will be facilitated. In these circumstances I am satisfied that it would be preferable for these extras to be built into the periodic child support to the extent that is possible.   

20. It is difficult to put an exact figure on how much of his income the husband will need to set aside or use to pay school fees above and beyond the savings he now has however doing the best I can on the evidence before me and having regard to the matters in s 117(4) of the Assessment Act I am satisfied that it is proper to make an order requiring the husband to pay periodic child support of $700 per week in addition to the private school fees. Whilst this is not as much as the wife seeks it is more than the amount of the surplus the husband has of income over expenses and does prioritise the school fees at least in the interim, ensuring the children’s attendance during 2019. Whether this is the appropriate course may need to be reassessed when the property proceedings are determined and the parties’ respective financial positions are clearer.

21. Having regard to the orders I propose to make, although the wife may be able to demonstrate that she has a need for spousal maintenance, I am not satisfied that the husband has the capacity to meet that need in addition to the obligation imposed upon him with respect to child support. I propose to dismiss the balance of the wife’s interim application on that basis.            

I certify that the preceding forty-one (41) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Macmillan delivered 21 December 2018.

Associate: 

Date:  21 December 2018