Kozinska & Ciszewski
[2023] FedCFamC1F 317
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Kozinska & Ciszewski [2023] FedCFamC1F 317
File number(s): MLC 1670 of 2020 Judgment of: CARTER J Date of judgment: 28 April 2023 Catchwords: FAMILY LAW – PROPERTY – property pool is modest – whether unpaid school fees should be jointly paid by the parties Legislation: Child Support (Assessment) Act1989 (Cth) s 124
Evidence Act 1995 (Cth) s 140
Family Law Act 1975 (Cth) ss, 75, 79, 102NA
Cases cited: Aleksovski v Aleksovski (2013) 279 FLR 1
Bevan v Bevan (2013) 279 FLR 1
Dickons v Dickons (2012) 50 Fam LR 24
Stanford v Stanford (2012) 247 CLR 108
Division: Division 1 First Instance Number of paragraphs: 116 Date of hearing: 31 March 2023 Place: Melbourne Counsel for the Applicant: Andrew Hale Solicitor for the Applicant: Peter Lynch Lawyer Counsel for the Respondent: Andrew Chislett Solicitor for the Respondent: Keane Family Law ORDERS
MLC 1670 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS KOZINSKA
Applicant
AND: MR CISZEWSKI
Respondent
order made by:
CARTER J
DATE OF ORDER:
28 April 2023
THE COURT ORDERS THAT:
1.The parties do all such acts and things and sign all such documents as may be required to direct that the funds held in trust for them in the account of B Lawyers be divided:
(a)$34,455 to the wife; and
(b)the balance to the husband.
2.The husband be solely liable for and indemnify the wife in relation to the funds owing to C School.
3.The wife retain for her sole use and benefit:
(a)the motor vehicle registered in her name;
(b)funds in any bank account in her name; and
(c)all her superannuation entitlements.
4.The husband retain for his sole use and benefit;
(a)funds in any bank account in his name;
(b)all his superannuation entitlements; and
(c)all his right title and interest in the company known as E Pty Ltd and hereby indemnifies the wife in respect of all liabilities relating to this entity.
5.Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all other property (including choses in action), superannuation entitlements, cash and motor vehicles in the possession of such party as at the date of these orders;
(b)each party retain any superannuation benefits belonging to or earned by that party to the exclusion of the other party;
(c)insurance policies remain the sole property of the owner named thereon; and
(d)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders.
Miscellaneous
6.Unless otherwise specified in these orders, and save for the purposes of enforcing any monies due under these or any subsequent orders:
(a)each party be solely entitled to the exclusion of the other to all property (including choses-in-action) owned by or in possession of such party as at the date of these orders;
(b)monies standing to the credit of the parties in any joint bank account are to be equally divided between the parties and any such account be forthwith closed;
(c)insurance policies remain the sole property of the owner named therein;
(d)each party otherwise retain for their sole use and benefit, their superannuation entitlements;
(e)each party be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled, pursuant to these orders; and
(f)any joint tenancy of the parties, in any real or personal estate, is hereby expressly severed.
7.All extant applications are dismissed, and the matter removed from the list of pending cases maintained by the Court.
AND THE COURT NOTES THAT:
A.Pursuant to section 81 of the Family Law Act 1975 (Cth), the parties intend that these orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.
B.These orders have been amended pursuant to rule 10.13(1)(h) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUSTICE CARTER
INTRODUCTION
The parties in this matter have been unable to agree as to an appropriate division of their very modest asset pool. Significantly, there is a dispute as to how the outstanding school fees to C School are to be paid (“C School”). Although the wife’s application suggested she also sought an order pursuant to s 124 of the Child Support (Assessment) Act1989 (Cth) (“the Assessment Act”), for the payment of ongoing school fees, that was abandoned at the hearing before me.
The material before the Court was limited. For instance, valuations of assets had not been obtained. However, the parties wanted the matter to proceed to determination on the material that was available. I have done the best I can with the limited information provided to me.
BACKGROUND AND PROCEDURAL HISTORY
The parties were both born in Country D. The husband, now aged 53, migrated here in 2002. The wife, now 49 years old, arrived in around 2003. They are both Australian citizens.
The parties commenced living together in 2005 and were married in 2007.
There is one child of the marriage, X, born 2010. She is 12 years old and lives with the wife. Despite there being final parenting orders that provide for X to spend time with the husband, he has not sought to do so. He also does not regularly pay child support in accordance with the assessment. The last two payments he made were in June 2022, and then again a further $114 just shortly before the final hearing before me. It is common ground that the husband owes around $13,500 by way of child support arrears. The husband is contesting the assessments, and the matter is currently before the Administrative Appeals Tribunal.
In around 2012 the husband started his company E Pty Ltd, through which he subcontracted for F Company.
The parties agree that they separated in 2013, but remained living under the one roof. At that time, the wife commenced receiving Centrelink support. I am not aware as to whether or not a child support assessment was sought at that time. The husband said that his income continued to provide support for the parties and the child.
When the child commenced school in 2016, the parties agreed she would attend C School. At that time the husband was in paid employment, and the wife was not. In those circumstances, the husband assumed responsibility for the school fees.
In 2018 the husband received a workers’ compensation payment of $48,726 net. I was not provided with any documents regarding that payout. Accordingly, I do not know, for instance, how the amount was calculated; when the injury was sustained; or any breakdown as to what the payment was for.
In around mid-2018 the husband purchased the property at G Street, Suburb H (“the Suburb H property”) for $560,000. It was registered in the husband’s name. The parties had been living in that property for some time as tenants.
The husband said he used approximately $38,000 of his savings (which presumably came from the compensation payment), together with $16,000 the husband borrowed from his neighbour, the first homeowners grant and a mortgage of around $435,000 to fund the purchase.
The wife asserted she contributed $8,000 from her superannuation which was put towards the purchase of the Suburb H property in 2018. The wife has not produced any documents from her superannuation fund to verify that she withdrew funds in 2018. Nor has she provided any bank statement to show she had those funds in an account, or any statement showing funds being paid from her to the husband. The only document the wife has produced is a typed document purporting to be a translation of text messages exchanged between the parties in July 2018. In that document she referred to giving the husband $8,000, and he is said to have responded he would give it back to her. There is no reference in the purported exchange to the date the wife is alleged to have given him $8,000, nor any reference as to the application of those funds.
From the date of purchase, the husband met the mortgage repayments, the rates and insurances and all outgoings on the property.
In late 2019 the husband purchased a motor vehicle for around $29,000, which was registered in the wife’s name. As set out later in these reasons it was agreed that vehicle is now worth $6,000. It is retained by the wife.
In late 2019 the wife obtained an Intervention Order and the husband was required to leave the Suburb H property. The husband said that during the wife’s continued occupation of the home he could not keep up with the mortgage repayments as well as meeting the costs of housing himself in rental accommodation. The husband said he was under considerable financial strain, and had to rely heavily on credit cards and loans from friends to meet his obligations.
The wife conceded she did not make mortgage repayments during her sole occupation of the property.
The husband said in late 2019 he commenced paying child support pursuant to an assessment.
These proceedings were initiated in February 2020. There have been multiple hearings.
In late 2020 the husband said he purchased additional motor vehicles, subject to finance, with the hope of securing more contracts with F Company. However, he said the COVID-19 pandemic impacted his business and the amount of work he received was less than he had anticipated.
The parties’ divorce became final in late 2021.
The wife vacated the Suburb H property in December 2021, and the husband moved back in.
The husband wanted to sell the property, but the wife was resistant. She lodged a caveat over the home, and refused to remove it. The husband filed an Application in a Proceeding seeking orders for the sale of the home. That was heard on 24 August 2021. A Senior Judicial Registrar made orders for the Suburb H property to be sold and for the wife to receive $20,000 from the sale to be characterised at trial. The husband was also to receive $19,344.11.
The property was sold for just over $550,000. Settlement occurred in late 2021. After the payment of the sale costs, the mortgage and the funds paid to the parties, only the sum of approximately $40,000 remained. Those funds continue to be held on trust for the parties by the husband’s then lawyers.
The matter returned to court on 27 January 2022. On that day a Senior Judicial Registrar made orders for both parents to facilitate the child’s attendance at C School until the end of 2022 and that they attend to paying the school fees and expenses.
Those orders also reflected that this was a matter to which s 102NA of the Family Law Act 1975 (Cth) (“the Act”) applied, and the parties were accordingly directed to make the appropriate applications. The matter was adjourned to a final hearing scheduled for 18 July 2022.
The parties entered into final parenting orders by consent on 14 July 2022. Pursuant to those orders the mother has sole parental responsibility for the child, who is to live with her. Time with the father was to occur on a supervised basis for a period, and to progress to unsupervised day time visits and then alternate weekends and half of all school holidays by earlier this year. However, the husband said he had been unable to afford the fees for the supervised time and accordingly, the supervised visits have not yet commenced.
Notably, those parenting orders provided that the child would remain at C School until the end of 2022. Thereafter the orders provided:
17. The mother shall do all things and sign all necessary documents to enrol [X] to attend [J School, Suburb K] to commence her secondary education in 2023.
18. The mother shall pay the [J School] fees for [X], save that if the mother is unable to confirm her ability to pay the [J School] fees by 30 September 2022, then the mother shall do all things and sign all necessary documents to enrol [X] at [Suburb K School] to commence [X’s] secondary education in 2023.
In September 2022 the husband said he underwent surgery. He said this has impacted his income earning capacity. He did not adduce any medical evidence to corroborate his assertion.
Later that month, the husband received a letter from C School advising that there were outstanding school fees of $30,844.
On 13 January 2023 the husband received a letter from the Australian Tax Office advising that the husband’s business, E Pty Ltd had an outstanding income tax and business activity statement liability of $37,580.46. The husband asserted that whilst he is still running the business, it is not profitable, and he does not have the capacity to meet his taxation liabilities.
Notwithstanding the final parenting orders, the wife has enrolled the child at L School. She advised the Court she did not notify the husband that X was not attending J School. She said she had moved to a different suburb and it was not feasible for the child to attend at J School. The wife did not press her application that the husband meet the costs of ongoing private school fees. She further advised the child had obtained a scholarship to attend L School.
THE EVIDENCE
It has not been possible to include every aspect of each of the parties’ evidence. However, I have taken all the evidence into account. Just because I have not mentioned something in these reasons does not mean that I have not considered it.
Section 140 of the Evidence Act 1995 (Cth) sets out that the standard of proof in these proceedings is to a balance of probabilities.
The trial was conducted in person at the Melbourne Registry. Each of the parties gave brief evidence. Given the brevity of the cross examination it was not possible for me to form strong impressions of either party. I do note, however that the husband was at times unresponsive, and he was somewhat reluctant to provide information about his financial matters.
The Wife
The wife relied on her trial affidavit filed 17 March 2023 and her Financial Statement filed 6 July 2022. She also sought, and was granted, leave to rely on specific parts of her affidavits filed 6 and 11 July 2022. There was no objection to this course.
The wife said the husband had not been upfront or honest regarding his financial circumstances. She said he had hidden his entitlement to a property in Country D. She said he “manipulates financial matters”. Whilst the wife made that assertion, she adduced no admissible evidence in support. The wife had sought to rely upon a statutory declaration from a former friend of the husband’s in that regard. That was struck out. Similarly I struck out another declaration annexed to the wife’s affidavit material purporting to be from a relative of the wife asserting she owed him funds.
The wife said the husband ought be solely liable for the school fee debt in circumstances where:
·she is not in paid employment; and
·the child was enrolled in C School on the basis that the husband would meet the costs of her attendance there.
The wife said further in circumstances were the husband is electing to spend no time with the child, and has refused to pay any meaningful child support, she is shouldering the entire financial burden of providing care for the child.
The wife said these matters meant she should receive the entirety of the funds currently held on trust.
The Husband
The husband relied on his affidavit filed 14 March 2023 and his Financial Statement filed 6 July 2022.
As indicated, the husband operates his courier business, E Pty Ltd. He asserted the business is in dire financial straits, and that he has been unable to draw an appropriate wage from the business, largely as a result of the impact of the pandemic, and also as a result of medical issues he said he suffered. As already noted, he did not adduce any medical evidence to support his assertion regarding his limited ability to work.
It was his proposals that the school fees should be paid from the funds held on trust, and the balance divided between the parties equally.
Whilst the husband included an order to this effect in his orders sought, there was no evidence adduced about this matter at the final hearing. Accordingly, I am not prepared to make the order.
ASSETS, LIABILITIES AND FINANCIAL RESOURCES AS AT THE DATE OF FINAL HEARING
At first blush it appeared there were significant disputes in relation to the asset pool. However, at the commencement of the hearing each party made various concessions. The husband through his counsel acknowledged that there was little evidence to corroborate the husband’s assertions regarding how and when the taxation liabilities for the business E Pty Ltd were accrued. I understand as at the date of the hearing the husband owed $37,580.46 to the Australian Taxation Office. It was agreed that liability was accrued after the parties’ separation. It was sensibly conceded the liability ought not be included in the pool for the purposes of these proceedings.
E Pty Ltd had not been valued. Whilst the wife asserted the business did have a value, absent any valuation, I am not prepared to attribute an arbitrary value to it. Certainly the husband continues to operate the business, albeit he says he does so at a loss. The wife did not challenge the amount the husband said was in the accounts of E Pty Ltd.
The husband also asserted the wife appeared to be operating a business. However, there was no evidence to support that assertion.
There was no challenge to the value the husband attributed to the motor vehicles owned by E Pty Ltd. In his oral evidence the husband said they were probably worth less than $100,000, but he accepted the value of $116,000.
The husband conceded the wife’s motor vehicle was worth $6,000.
The wife conceded that the funds each party received from the sale of the home should be treated as part property payments and notionally added back into the pool, as sought by the husband.
The husband did not seek the wife’s withdrawal of $6,262 from her superannuation entitlements be notionally added back into the pool.
The parties were in agreement as to the quantum of fees owing to C School, and the vehicle loans owing by E Pty Ltd. Both parties agreed that any credit card liabilities and any other personal liabilities the parties respectively have should not be included in the pool.
Accordingly, the agreed pool of assets and liabilities is as follows:
Cash held in accounts of E Pty Ltd $1,323 Motor vehicles, being three commercial vehicles owned by the husband’s business $116,000 The wife’s motor vehicle $6,000 Balance of monies held on trust by B Lawyers trust account $40,320 Added back funds received by the husband from the sale of the home $19,344 Added back funds received by the wife from the sale of the home $20,000 TOTAL GROSS ASSETS $202,987 LIABILITIES Fees owing to C School ($28,100) Loans on the vehicles owned by E Pty Ltd ($64,969) NET ASSET POOL $109,918
Superannuation
The parties both have nominal superannuation entitlements. The husband has less than $200 in superannuation. According to the Australian Taxation Office summary the wife had entitlements of $7,363.51 as at June 2022. She has since withdrawn funds, leaving her with less than $500 by way of superannuation entitlements as at the date of trial.
The wife deposed that she used those funds to meet the costs of the child’s school uniforms, and stationary, as well as meeting rental payments and purchasing other shoes and clothes for the child. As noted, the husband did not seek those funds be notionally added back into the pool.
No one sought – or indeed could seek – a superannuation splitting order. Given the modesty of the entitlements there is no utility in including them in my consideration.
Country D property
The wife asserted the husband inherited an apartment in Country D following his father’s death. That is denied by the husband. He said there are proceedings on foot in Country D regarding the inheritance, and that he is not involved. He said he has multiple siblings, so even if he was entitled to a share in his father’s estate, he would only be entitled to a small share. He said his father’s property was worth only around AUD31,000. It has not been valued. I do not know whether the husband would be able to sell his interest in the property even if he was entitled to a share.
I note the husband did not adduce evidence from any of his siblings to corroborate his assertions regarding his entitlement or the proceedings. He was somewhat evasive when it was put to him that he expected to receive funds or a share in his late father’s apartment when the inheritance proceedings were completed. He was also dismissive regarding enquiries as to what the property was worth.
However, in light of the lack of evidence regarding the existence of this asset, or its value, I am not prepared to include it in the pool.
C School fees
The parties agreed the current debt to C School for unpaid fees is $28,100.
The wife said the husband insisted that the child attend C School, and that he would meet the costs of her attendance there. That is denied by the husband who said the parties agreed on her attendance there together. However, he acknowledged that at the time the child commenced in prep the wife was not working and accordingly, he was meeting the costs of the school fees.
The husband said he has paid $2,782 towards the school fees since the commencement of these proceedings. He made those payments on 22 February 2022 and 26 May 2022, from the part property payment he received after the sale of the Suburb H property.
The wife has made no contribution towards the payment of those fees.
In December 2020 the husband sent an email to C School advising that each of the parties would now pay half of the school fees. The school responded to him and advised they did not have any paperwork advising of that agreement. Rather, they said the only agreement they had was that the husband would pay the outstanding fees for the whole of 2020 by the end of Term 3. In that email the husband was informed the unpaid 2020 fees were $8,055.
The husband said he has no capacity to meet the liability, and will try to enter into a payment plan with C School in due course.
ALLEGATIONS OF NON-DISCLOSURE
Whilst there was some vague suggestion in the wife’s material that the husband had not provided full and frank disclosure, this was not agitated at the final hearing. Moreover, there was nothing put to me to corroborate the wife’s unparticularised claim in this regard. The husband similarly asserted there had been insufficient financial disclosure from the wife. However, this was not particularised, nor pursued at the hearing before me.
IS IT JUST AND EQUITABLE THAT AN ORDER BE MADE?
Prior to making any order that alters parties’ interests in property, I must be satisfied that it is just and equitable that such an order be made. That was made clear by the High Court of Australia in Stanford v Stanford (2012) 247 CLR 108 (“Stanford”).
If I am satisfied it is just and equitable for an order to be made, I am then empowered to make such order as I consider appropriate taking into account a number of factors as set out in s 79(4) and 75(2) of the Act, insofar as they are relevant.
In Stanford their Honours said the expression “just and equitable” at [36]:
… is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.
Their Honours further said there is no presumption that the parties’ entitlements in the existing asset pool should be altered, or that one party has the right to have the property of the parties divided between them only on the basis of the considerations in s 79(4).
I must not conflate my determination as to whether it is just and equitable that an order be made pursuant to s 79(2) of the Act with my determination pursuant to s 79(4) of the Act. Their Honours said these are separate enquiries.
In my view, however, this is one of the “vast majority of cases” referred to by the plurality of the Full Court in Bevan v Bevan (2013) 279 FLR 1 at [164] in which the requirements of s 79(2) of the Act are fairly readily satisfied. If no adjustment is made, the husband will retain his business and his income earning capacity to the exclusion of the wife. There could be no consideration as to the parties’ circumstances, including the wife’s primary care and support of the parties’ one child. In my view, it is plainly just and equitable to make an order pursuant to s 79 of the Act in these proceedings for a division of property between the parties.
THE PARTIES’ PROPOSALS
In his closing address, counsel for the husband proposed the funds on trust be applied to pay the outstanding school fees. He said the balance remaining should be divided equally between the parties, and the parties should otherwise retain the assets and liabilities in his or her name.
That would result in the school fees being paid, and the husband retaining his business, and the following assets and liabilities:
Cash held in accounts of E Pty Ltd $1,323 Motor vehicles, being three commercial vehicles owned by the husband’s business $116,000 Half of the balance of monies held on trust by B Lawyers trust account $6,110 Funds received by the husband from the sale of the home notionally added back $19,344 Loans on the vehicles owned by E Pty Ltd ($64,969) Net to be retained by the husband on his proposal $77,808
The wife, on the husband’s proposals would retain about 30% of the pool as follows:
Her motor vehicle $6,000 Half of the balance of monies held on trust by B Lawyers trust account $6,110 Funds received by the wife from the sale of the home $20,000 Nett to be retained by the wife on the husband’s proposal $32,110
The wife proposed that she receive the entire balance of the funds held on trust. She said the husband should bear the whole responsibility for the school fees, and indemnify her in relation to those fees. She said the parties should otherwise retain the assets and liabilities in his or her name.
According to the wife’s proposals the husband would retain his business and:
Cash held in accounts of E Pty Ltd $1,323 Motor vehicles, being three commercial vehicles owned by the husband’s business $116,000 Funds received by the husband from the sale of the home $19,344 Fees owing to C School ($28,100) Loans on the vehicles owned by E Pty Ltd ($64,969) Net to be retained by the husband on the wife’s proposal $43,598
The wife on her proposal would retain approximately 60% of the pool comprising:
The wife’s motor vehicle – the wife asserts it is worth $6,000 and the husband $8,000 $6,000 Balance of monies held on trust by B Lawyers trust account $40,320 Funds received by the wife from the sale of the home $20,000 Net to be retained by the wife on her proposal $66,320 SECTION 79(4) OF THE ACT
In determining what orders are to be made pursuant to s 79(4) of the Act, I must:
… weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation and then translate such assessment into a percentage of the overall property of the parties or provide for a transfer of property in specie in accordance with that assessment; per Baker and Rowlands JJ in Aleksovski v Aleksovski (2013) 279 FLR 1 [50] (“Aleksovski”).
At [90] of Aleksovski, his Honour Kay J said I am required to “somehow give a reasonable value to all of the elements that go to making up the entirety of the marriage relationship”.
Those observations were quoted with approval by the Full Court Dickons v Dickons (2012) 50 Fam LR 24 (“Dickons”). At [21] their Honours said that “the requirements of the section are met by approaching the assessment of contributions holistically” - by analysing the contributions of all types, and by reference to the particular circumstances of that particular relationship.
The assessment of contributions does not require “over-zealous” attention to the ascertainment of contributions, and the process of the Court as required by s 79 of the Act “is the exercise of a wide discretion, not the performance of a mathematical or accounting exercise” as set out in Dickons at [25].
Initial contributions
Neither party asserted they had assets of significance at the outset of their relationship.
Contributions during the marriage
The husband worked during the marriage, and the parties had the benefit of his income. The wife was not engaged in paid employment outside the home. She was the primary carer for the child, and undertook the majority of the homemaker and parent tasks.
Contributions post-separation
The Suburb H property was purchased after the parties had separated. It was purchased for $560,000, using around $38,000 of the husband’s savings, and his first homeowners grant. There was a mortgage of $435,000. There is a dispute as to whether the wife contributed towards the purchase price. As indicated, she asserted she provided the sum of $8,000. However, she did not adduce any persuasive evidence of that contribution. I accept in the circumstances that the husband paid for the balance of the purchase of the property.
It also appears that from the time of the parties’ separation in 2013 until the husband vacated the home in December 2019, the husband remained primarily financially responsible for the household. The wife did receive Centrelink benefits, but retained those funds for her own use and benefit and to meet the child’s day to day expenses in circumstances where it does not appear that the husband was assessed to pay child support. The husband continued to meet the costs of the mortgage, rates, insurances, utilities, and the child’s school fees.
The wife commenced employment in mid-2019. The wife remained primarily responsible for the day to day care of the child at all times.
I accept that both parties contributed towards the purchase of groceries and household supplies.
Once the husband left the Suburb H property in December 2019, it does not appear mortgage repayments were made with both parties asserting they were unable to afford to do so. The wife paid for her utilities. She acknowledged she did not pay rates during her period of sole occupation.
RELEVANT CONSIDERATIONS PURSUANT TO SECTION 75(2) OF THE ACT
Neither party adduced persuasive evidence to corroborate their financial circumstances or income earning capacity. This made it somewhat difficult to assess and weigh the matters set out in s 75(2) of the Act.
The husband is 53 years old. He said his physical health is impaired, having suffered ongoing issues with an injury. He said he also suffers with other health issues. He said these health issues have impacted his ability to work, requiring him to take time off for medical procedures, surgery, hospitalisations and generally being unwell. He adduced no medical evidence from his treating practitioners to corroborate his alleged health issues, or how these issues might impact on his earning capacity.
The husband’s evidence regarding his income was not consistent. At one part of his evidence, the husband said he generally draws around $432 per week from his business. He also said he drew $482 per week from that business. In his Financial Statement filed on 6 July 2022, he said he earned $442 per week, based on the 2021 company returns. I note that there are inaccuracies in that Financial Statement. For instance, the husband claimed various payments as being made by him, when according to the business bank statements and the profit and loss statement the husband exhibited to his trial affidavit, those expenses are met by the business.
On any version the husband apparently draws a modest income from the business. However, I note the business also pays for the husband’s phone, internet, electricity, and other utilities, and car related costs.
The husband said he has not been able to reliably draw an income this financial year as there has been insufficient income generated for him to do so. He said currently the business income is eclipsed by its expenses. He said for the current financial year, the expenses (of $86,342) have exceeded the income generated (of $75,310) by approximately $11,032. I can see from the bank statements of the business that the husband has used funds from the business for his personal expenses from time to time, including making purchases of food and alcohol, as well as payments at chemists, clothes shops and hair salons together with cash withdrawals. The husband said in his oral evidence that these amounts will all be accounted for appropriately and claimed as his income.
The husband acknowledged that previously he has generated a greater income than he currently enjoys. In 2019 for instance his personal income was $60,000. According to his personal tax estimate for the 2022 financial year, he asserted his taxable income was only $23,000. The husband also produced the taxation estimate for the business for the year ended 30 June 2022. The business income was said to be $120,196, with expenses of approximately $79,000, leaving a profit of $40,702. In his oral evidence the husband asserted that the business expenses were actually $20,000 more. He did not adduce any evidence to support that assertion. In that year the estimate sets out that the husband drew a salary of $23,000.
At trial the husband advised he would not be working for six months, as he was in a car accident a few days prior to the hearing commencing. He said as a result he was unable to work. He did not adduce any medical evidence to support this assertion. He acknowledged the business would continue to operate even if he was unable to do any work.
At trial the husband also said that the business had one contract, being with F Company. He said F Company has now been sold to a global chain and he no longer has a contract. Again, he did not adduce any evidence to support that assertion.
Although the company owns several commercial vehicles, the husband said he cannot dispose of any of the vehicles as he needs to subcontract work out to others.
The wife does not accept the husband’s evidence regarding his modest income. She said the husband’s income is considerably greater. She asserted that he earned over $150,000 per annum “after separation”. She was not more specific in the time frame. It appeared from the context of that statement she was referring to the period after she left the Suburb H property. She adduced no evidence to support her allegations that the husband has ever earned an annual income in the vicinity of $150,000.
A child support assessment notice dated 17 January 2023 was tendered. That sets out that for the purposes of calculation child support, the husband’s taxable income was assessed to be $63,756 and the wife’s estimated at $18,432. According to that assessment, the weekly rate of child support was calculated at $121.97 to be paid by the husband to the wife. Whilst the husband’s income amount was as determined by the Registrar, I was not provided with a copy of that decision. Accordingly I do not know how they came to that assessment as to the husband’s income.
The wife is 49 years old. According to the wife’s Financial Statement, her sole source of income is Centrelink, and she received $500 per week from that. In her Financial Statement she said her rental payments were $400 per week. In her oral evidence she said she now received about $600 per week from Centrelink and her rent had increased to $482 per week.
The wife said she cannot work currently as she has a health problem. She adduced no medical evidence to support that assertion. She said she has not been in paid employment since she worked for four months in 2021. She denied she was currently working in the beauty sector.
The husband referred to the child support assessment dated 20 June 2022 in which the wife was assessed as having an adjusted taxable income at $44,049. The wife acknowledged in her oral evidence that she had done some work for about four months in 2021. She said she reported all her income to Centrelink. She said that caused her income to be inflated at that time. However, she said she no longer works and is again wholly dependent on Centrelink monies.
As indicated, there are ongoing disputes regarding child support. According to the current child support assessment, the husband is assessed to pay $119.55 per week. That is being challenged by the husband and there are proceedings on foot in the Administrative Appeals Tribunal.
In his Financial Statement the husband deposed that he paid $71 per week by way of child support to the wife. The wife deposed that he does not pay child support. She said he ceased doing so in about June 2022, although he made one payment very shortly before the trial commenced before me of $114. As a result of the husband’s cessation of payment of child support, significant arrears have accrued. The husband conceded at the hearing before me that he owed about $13,500 by way of child support as at the time of trial.
The wife said she anticipates having to incur additional expenses for the child, including braces which she said will cost around $8,000.
Neither party sought orders pursuant to the child support legislation before me. The wife remains primarily responsible for the parties’ child. She is providing that support in circumstances where she has no practical assistance from the husband. She has also had very little financial assistance from him towards the support of the child for a considerable period.
ASSESSMENT OF CONTRIBUTIONS AND PROSPECTIVE NEEDS
I am of the view that each party contributed as best they could, in different spheres during the course of the parties’ relationship. The husband was primarily responsible for generating an income to provide financially for the parties and their daughter. The wife was primarily responsible for meeting their child’s needs and attending to home duties.
Those arrangements substantially continued after the parties separated, but continued to live under the one roof. During that period, the husband received a workplace payout, much of which he contributed towards the purchase of the Suburb H property. As already noted I was not provided with any evidence about how that payment was assessed; what the payment was for; or when the injury was sustained.
Since at least mid-2022 there have been ongoing issues with child support – and the wife has had to meet the bulk of the child’s expenses since that time. As noted, the husband does not spend any time with the child, and accordingly the mother also shoulders the responsibilities for meeting all the child’s needs.
In my view, taking into account the myriad contributions made by each of the parties, I am satisfied that the parties made equal contributions over the course of the relationship and post separation.
I am also satisfied that given the substantial burden on the wife of providing full time care for the parties’ child, and noting the benefits the husband is able to derive from running his business, the wife’s needs are greater than those of the husband moving forward. The responsibilities the wife has to the parties’ daughter will likely impact the number of hours she can work. This is all the more so in circumstances where the husband is not spending any time with the child.
In the context of an extremely modest pool, percentage considerations are often not of great assistance. The Court is instead to consider the implications for the parties in terms of the dollars to be received. Whilst bearing that in mind, I am of the view that it is appropriate that there be an adjustment in her favour, to give weight to the substantial burden the wife faces in caring for the parties child in the absence of any practical assistance by the husband. That will result in the assets overall being divided 55% to the wife and 45% to the husband.
On the basis that the husband retains responsibility for the payment of the outstanding school fees, the funds on trust are to be distributed $34,455 to the wife and the balance (or $5,865) to the husband. Turning again to the implications in dollar terms, I am satisfied that is an appropriate outcome for both parties.
I am also satisfied that it is appropriate the husband bear the financial responsibility for meeting the outstanding school fees. That was the agreement the parties had at the time of the child’s enrolment – when the wife was not in paid employment. It also appears to be the understanding the school had. Whilst his income is modest, in my view he is better placed than the wife to meet those repayments.
Lastly, I note that if the school fees were to be paid ‘off the top’ as sought by the husband, even if the wife were to retain the entire balance of the monies on trust, she would receive only a further $12,220. That would equate to her receiving/retaining only around 35% of the asset pool. That could not be a just and equitable outcome in all the circumstances.
For all of the foregoing reasons, I make the orders as are set out.
I certify that the preceding one hundred and sixteen (116) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Carter. Associate:
Dated: 28 April 2023
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