Lao and Lao & Anor
[2017] FamCA 917
•14 November 2017
FAMILY COURT OF AUSTRALIA
| LAO & LAO AND ANOR | [2017] FamCA 917 |
| FAMILY LAW – PROPERTY – Where competing applications for property adjustment – Where issues as to the husband’s non-disclosure and late disclosure – Where by reason of funds advanced by the husband’s family contributions to separation be regarded as favouring the husband – Where post separation contributions by the wife lead to conclusion that contributions to trial to be regarded as equal – Where adjustment in favour of wife under s 75(2) – Where overall property pool to be divided 60/40 in favour of wife. FAMILY LAW – CHILD MAINTENANCE – Where husband resident of Country R – Where Child Support Scheme not apply – Where consideration of the children’s proper needs – Where consideration of the parties’ capacity to contribute – Where periodic liability of the husband assessed – Where in the circumstances appropriate for periodic liability to be assessed as discounted capitalised sum and for order for lump sum child maintenance. FAMILY LAW – SPOUSE MAINTENANCE – Where discussion of applicable principles – Where wife unable to support herself adequately – Where consideration of wife’s reasonable needs in context of property orders to be made – Where husband has clear capacity to pay periodic spouse maintenance – Where appropriate in circumstances for order for spouse maintenance for closed period. |
| Family Law Act 1975 (Cth) ss 66B, 66H, 66J, 66K, 72, 74, 75(2), 79, 79(1), 79(2), 79(4) Limitation Act 1969 (NSW) Family Law Rules2004(Cth) |
| AJO & GRO [2005] FamCA 195 Teal & Teal [2010] FamCAFC 120 |
| APPLICANT: | Ms A Lao |
| FIRST RESPONDENT: | Mr B Lao |
| SECOND RESPONDENT: | Ms C Lao |
| FILE NUMBER: | PAC | 4992 | of | 2014 |
| DATE DELIVERED: | 14 November 2017 |
| PLACE DELIVERED: | Parramatta |
| PLACE HEARD: | Parramatta |
| JUDGMENT OF: | Foster J |
| HEARING DATE: | 21, 22, 23 and 25 August 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Dura |
| SOLICITOR FOR THE APPLICANT: | Cameron Gillingham Boyd |
| COUNSEL FOR THE FIRST RESPONDENT: | Mr Pierce |
| SOLICITOR FOR THE FIRST RESPONDENT: | Cambridge Lawyers |
| SECOND RESPONDENT – SELF REPRESENTED LITIGANT: | Ms C Lao in person |
Orders
Property adjustment
It is ordered:
That the property of the parties as set out in the “Schedule to Orders” set out below is to be divided in the proportions 60 per cent to the wife and 40 per cent to the husband.
In order to give effect to Order (1) above:
That the husband do all things necessary within two months from this date to transfer to the wife his interest in the property D Street, Suburb E being land in Folio Identifier ...
That concurrently with the transfer provided for in Order 2, the wife do all things necessary to discharge the existing mortgage encumbrance secured on property D Street, Suburb E in favour of the National Australia Bank.
That concurrently with the transfer provided for in Order 2, the Second Respondent Ms C Lao shall do all necessary things and sign all necessary documents to facilitate a discharge of the second mortgage registered number … presently registered over the property D Street, Suburb E being land in Folio Identifier ...
That within two months from this date the wife sign all necessary documents provided to her by the husband so as to effect a transfer of her interest in the property at F Street, City G to the husband.
That concurrently with the transfer provided for in Order (5), the husband do all things necessary to procure a discharge of the mortgage presently secured over the property at F Street, City G in favour of the H Bank.
That within three months from this date the husband shall pay to the wife by way of further property adjustment the sum of $287,106.00.
Child Maintenance
That the husband pay by way of lump sum child maintenance for the children of the marriage, J born … 2000, K born … 2001, L born … 2006 and M born … 2009, in the sum of $171,000.00 within three months from this date.
Spouse maintenance
That the husband pay by way of spouse maintenance for the wife the sum of $250.00 per week for a period of 26 weeks and that such payments be made by way of a lump sum payment to the wife of $6,500.00 within three months from the date of these orders such payment to be made to the wife or as she may otherwise direct in writing.
Enforcement
That the wife shall have a charge against the husband’s interest in the property at N Street, Country O to the extent of the monies or part thereof outstanding to her from time to time pursuant to Orders (7), (8) and (9) and shall be at liberty to register against the title of the property at N Street, Country O such claim, charge or encumbrance that she may be entitled at law or in equity in Country O.
That in default of the husband’s compliance with Order (7), (8) or (9) or any of them above, the wife is hereby appointed Trustee for Sale of the property at N Street, Country O for the best price reasonably obtainable and the property shall vest in the wife for that purpose and the wife shall sell the property for the best price reasonably obtainable and after payment of selling costs and discharge of mortgage the net proceeds of sale shall be paid as follows:
(a)In default of the husband complying with Order (7) (Property Adjustment) a sum payable to the wife that will result in the wife receiving overall 60 per cent of the property identified in the Schedule to these orders as adjusted by reference to the net proceeds of sale of the Country O property and in accordance with the orders above.
(b)In default of the husband complying with Order (8) (Child Maintenance) of these orders, the sum of $171,000.00 payable to the wife.
(c)In default of the husband complying with Order (9) (Spouse Maintenance) of these orders, the sum of $6,500.00 payable to the wife.
(d)In payment to the wife of her reasonable legal fees incurred in Country O or otherwise in implementation of this order.
(e)In payment of the balance then remaining to the husband.
Schedule to Orders
Husband N Street, Country O $ 1,401,110.00
Husband D Street, Suburb E $ 735,000.00
Joint F Street City G $ 177,856.00
Husband P BankAccount $ 150.00
Husband Standard Chartered Account …07 $ 4,318.00
Wife NAB account …70 $ 1,039.00
Wife NAB account …50 $ 2,376.00
Wife NAB account …84 $ 440,766.00
Wife Motor vehicle $ 18,200.00
Wife CBA account …30 $ 1,662 .00
Husband Q Bank account …07 $ 6,659.00
Husband Rental Bond $ 27,746.00
Husband Q Bank Term Deposit $ 3,108.00
Husband NAB account …21 $ 3,000.00
$ 2,822,990.00
Liabilities
Joint Mortgage City G $ 35,636.00
Husband Mortgage Country O $ 653,457.00
Husband Mortgage Suburb E $ 350,063.00
Husband Rental Bond Country O $ 6,852.00
$ 1,046,008.00
Superannuation:
Husband MLC Wrap Super $ 101,000.00
Husband Country R Super Fund $ 15,628.00
Husband Country O Super $ 1,500.00
Wife Country O Super $ 2,448.00
$ 120,576.00
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 Lao & Lao 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 PARRAMATTA |
FILE NUMBER: PAC 4992 of 2014
| Ms A Lao |
Applicant
And
| Mr B Lao |
First Respondent
And
| Ms C Lao |
Second Respondent
REASONS FOR JUDGMENT
The issue for determination is the property settlement entitlements as between the applicant wife and the respondent husband.
In her further amended application filed 30 June 2017 the wife sought property orders that, in summary, provided:
a)that the parties’ property at N Street Country O be sold and that the whole of the net proceeds of sale be paid to the wife;
b)that the parties’ property at D Street, Suburb E be sold and that the whole of the net proceeds of sale be paid to the wife;
c)that the parties’ property at F Street, City G, UK be sold and that the proceeds of sale be apportioned so as to effect an overall property settlement as to 75 per cent to the wife and 25 per cent to the husband.
The wife also sought orders by way of lump sum or periodic child maintenance for the children, J born in 2000, K born in 2001, L born in 2006 and M born in 2009.
The wife further sought orders by way of lump sum or periodic spouse maintenance for herself.
The husband, for his part, sought final property orders that, in summary, provided:
a)that the wife pay to the husband the sum of $296,000.00;
b)that the properties at Suburb E, Country O and City G be sold and that the net proceeds of sale be paid as to 60 per cent to the wife and 40 per cent to the husband.
The husband opposed any order for spouse maintenance in favour of the wife.
As to child maintenance, it was common ground that the husband does not reside in a reciprocating country that would have facilitated the wife obtaining in Australia a child-support assessment enforceable in that reciprocating country and thus the Court has jurisdiction to make a child maintenance order.
As to child maintenance, the husband in closing submissions sought an order that his total ongoing obligation of $3,000.00 per month by reason of interim orders be continued and indexed each year to consumer price index movements and be varied on a pro rata basis as each child attains the age of 18 years.
It is common ground that the children all reside with the wife in Sydney with the husband residing in Country R and having no engagement with the children.
The husband’s lack of disclosure
The wife’s evidence demonstrates great suspicion as to the husband’s financial circumstances not just after separation but during the latter period of the parties’ cohabitation.
There has been significant correspondence between the parties’ solicitors as to disclosure and allegations of non-disclosure by the husband: Exh “V”. In reality, there should have been no real issue from the husband’s side as the matters in dispute could well have been resolved by timely production of what were mostly bank records and other objective financial records. Regrettably, much of the disclosure happened during the husband’s oral evidence, a circumstance that unduly protracted the trial.
The husband finally produced his historical tax returns after the trial had commenced as he also did with his later Q Bank account statements for the period May 2016 to May 2017. The Q Bank account is where his salary is deposited. He failed to disclose before trial his H Bank account in the UK opened by him post separation through which he makes mortgage payments for the City G property.
The husband’s failure to make proper disclosure in a timely manner was conceded by his counsel in final submissions. Regrettably, whilst documents continued to be “discovered” during the trial and during the husband’s oral evidence, there can be no confidence that there has been full and proper disclosure by the husband. Thus his evidence at best must be treated with some circumspection.
Context
The husband at the time of trial was 42 years of age and the wife was also 42 years of age. The parties married in Country R in 1998 and thereafter returned to Australia to reside.
At the time of marriage the husband was employed in the financial sector. The wife was completing a tertiary degree. The wife completed her degree in 2004 in Sydney.
After a short period living with the husband’s parents in December 1998 the parties moved to rented premises at Suburb S.
In May 2000 the parties purchased a home unit property at T Street, Suburb U for $220,000.00 with a mortgage of $176,000.00. The wife’s parents provided an advance of $30,000.00. The husband asserts that the wife’s parents were repaid with funds from his sister and parents.
The property at Suburb U was sold in early 2002 for $293,000.00. The net proceeds of sale after discharge of the mortgage were applied to the purchase of a property at V Street, Suburb W for $400,000.00. The balance of purchase price for the Suburb W property comprised a mortgage advance.
A short time later the husband purchased in his name a home unit property at D Street, Suburb E for $430,400.00 with a mortgage advance of $392,269.00. Settlement of the purchase was in July 2002. The property was, after purchase, occupied by the husband’s sister as tenant.
At about the time of purchase of the Suburb E property the husband was earning approximately $90,000.00 to $100,000.00 per annum.
The deposit and balance of purchase price plus stamp duty and legal fees was advanced to the husband by his sister in a total sum of about $70,000.00. That advance was a short time later secured by way of a Memorandum of Mortgage dated 2 October 2002. The mortgage advance was repayable on not less than three months’ notice of demand. The mortgage debt to the sister is now statute barred. In a separate later agreement the husband contends that he agreed with his sister to pay her interest on the advance of $70,000.00. The sister claims compounding interest such that the asserted debt to her is now $270,000.00. However, as discussed below, the sister’s advance will be considered a contribution of the husband in respect of which the parties have had the use of interest free for many years to date.
Significantly, these agreements between the husband and his sister were entered into at a time when the parties had separated. However, the wife provides no evidence of there being available any matrimonial funds to meet the cost of the purchase of the Suburb E property over and above the funds asserted by the husband to have been borrowed from his sister.
The parties separated in late 2002 but resumed cohabitation in 2004. Subsequent to this separation the parties sold the Suburb W property with the net proceeds of sale being provided to the wife from which she purchased a home unit property at X Street, Suburb Y. This home unit property was sold in November 2016 after final separation by the wife for $740,000.00 with the net proceeds of sale being approximately $666,000.00. The use of the proceeds of sale by the wife will be considered later.
Subsequent to the parties’ reconciliation in 2004 the family moved for the purposes of the husband’s employment to City G. The Suburb Y property was rented out by the wife and income applied to mortgage payments and outgoings. The mortgage was later finally paid out in about 2009.
During their stay in City G the parties jointly purchased a property at F Street, City G. In City G the parties engaged for a period in the operation of a Country R language school.
In 2007 the family moved to the UK for the husband’s continuing employment.
The husband was moved to Country O in late 2008 with the wife and children remaining in the UK for a period and then with the wife’s parents in Sydney for a period of seven months. The parties’ fourth child was born in the UK.
The wife and children joined the husband in Country O in October 2009.
Whilst in Country O the wife’s parents provided about $30,000.00 to enable the child J to attend private school. The wife’s parents have, otherwise, provided financial support for the needs of the children.
Currency Exchange rates
It was agreed that exchange rates at relevant times would be as published by the Reserve Bank of Australia from time to time.
The Country O Property
The husband purchased the property at N Street, Country O in October 2009 for $1.050 million AUD with a mortgage of $840,000.00 AUD. The husband asserts that the bulk of the balance of purchase price was advanced to him by his parents in the sum of about $207,000.00 AUD. The wife does not assert and provides no evidence of there being, otherwise, any available matrimonial funds to contribute to the balance of the purchase price. The husband’s father gave evidence and impressed as a witness on this issue.
The husband’s father, in his evidence, was keen to assist the Court and gave evidence to the best of his recollection. It is accepted that the husband’s parents provided the balance of purchase monies for the Country O property as contended by the husband. The husband asserts an agreement for the payment of interest at 10 per cent per annum on the capital sum. The amount sought to be repaid to the husband’s father is $391,000.00. However, as discussed later, the father’s advance will be considered a contribution of the husband in respect of which the parties have had the use of interest free for some years to date.
Whilst in Country O the wife obtained full-time employment. She worked full-time for about six months but found it was impossible to continue that employment due to the needs of the children. She then commenced working part-time.
In July 2014 the family moved to Country R for the purposes of the husband’s employment with Company Z in Country R. He remains employed by that company.
The Rental Bond Issue and other funds
An issue between the parties is as to the source of 180 million Country R dollars (CRD) [about 955 CRD to $1.00 AUD] required for part of a rental bond in Country R in July 2014. That sum being reimbursed on the husband later vacating that rental property. The wife says that she at first was to borrow the funds from her father which is clearly indicative of the parties not having available funds. The wife’s father withdrew his offer of funds and the husband thereafter sourced the required funds from family and friends.
The wife contends that there were various funds available to the husband to meet part or all of the 180 million CRD required including funds at bank, detailed below, and she asserts $30,000.00 SGD held in cash.
a)The husband had a Standard Chartered Bank account (9936) which as at 1 July 2014 had a balance of $61,920.00 SGD (about $1.16 SGD to $1.00 AUD): Exh “K”. On 21 July 2014 the wife transferred $20,000.00 SGD from the Standard Chartered Bank account 9936 to the joint UOB Bank account. Otherwise, transfers from the account were made as set out below. The account has a balance of $28,753.00 SGD as at 22 July 2014. On 25 July 2014 the husband transferred $23,000.00 SGD to his account 3107 with Standard Chartered Bank. It appears that the balance of the account 9936 was $5,733.00 SGD as at 29 July 2014. The husband does not say he used these funds for the rental bond, yet if he did they were reimbursable to him.
Funds totalling $30,000.00 SGD were later deposited to the account on 15 August 2014 with $25,000.00 SGD withdrawn on 18 August 2014.
b)The husband had a Standard Chartered Bank account (3107) (Exh “S”) with a balance of $5,257.00 SGD as at 1 July 2014. He transferred $8,000.00 SGD to the account from account 9936 on 1 July 2014 and $23,000.00 SGD from the same account on 25 July 2014. He withdrew $36,000.00 SGD on 25 July 2014. The husband does not say he used these funds for the rental bond, yet if he did they were reimbursable to him.
On 5 August 2014 he deposited $20,971.00 SGD (described as UT SALE) to the account and a further deposit of $7,000.00 SGD from account 9936 on 6 August 2014. On 7 August 2014 he withdrew $28,000.00 SGD from the account leaving a minimal balance. He has not accounted for these funds.
c)The husband had a NAB account (1221) with a balance of about $18,900.00 AUD as at 14 June 2014 from which $17,000.00 AUD was withdrawn on 16 June 2014. Subsequently, $13,000.00 was deposited to the account on 29 July 2014 with the husband then withdrawing $16,000.00 AUD in the first week of August 2014. The husband cannot account for the funds.
d)The husband had a P Bank Ltd, Country O account (Exh “R”) with a balance of $10,273.00 SGD as at 31 July 2014. It appears he has retained these funds.
The husband opened a Q Bank account in Country R on 28 July 2014 and on that day deposited funds totalling 188.882 million CRD.
He asserts that funds were transferred from his family or others by way of alleged loans totalling about 143 million CRD. Otherwise, deposits appear to be in cash for the balance of about 45 million CRD.
From this account he paid the rental bond of 180 million CRD on 28 July 2014. The rental bond was repaid to the husband in January 2015 with a payment of 178.512 million CRD. He paid 150 million CRD to his parents and 30 million CRD to his sister on 26 January 2016.
From his Q Bank account the husband paid further funds as follows:
a)August 2014: 26 million CRD ($26,940.00 AUD) to his sister, he says for legal fees and money for the children, although no money was paid until later interim orders in March 2015. The husband asserts that his sister paid a total of $18,000.00 in payment of the lump sum ordered and three months periodic child maintenance. The effect is that the matrimonial assets were diminished by the husband accordingly to meet his personal obligation.
b)July and August 2014: $16,000.00 AUD to his sister.
c)September and October 2014: 5 million CRD ($5,200.00 AUD) to his parents.
d)March 2015: 9.77 million CRD ($11,200.00 AUD) to his parents.
e)August 2014: 34.479 million CRD for the children’s school fees in Country R but he was reimbursed 20 million CRD ($21,000.00 AUD) by his employer.
These funds from the Q Bank account appear to represent various funds available to him as referred to in [36] above.
It is accepted that the husband borrowed funds for the bond and later repaid the same. However, it is clear that the husband still had significant funds available after the initial bond was paid as set out above. He has not accounted for those funds. It is to be inferred that he retained or used those funds for his own purposes.
Separation
In September 2014 the parties separated with the husband at that time leaving the matrimonial accommodation. Thereafter the wife and children returned to Australia to live. The wife and children lived with the wife’s parents until November 2015 at which time they moved to a rented three bedroom house at Suburb EE to be closer to the children’s schools.
Subsequent to the wife and children returning to Australia, the husband provided no financial support until interim orders made in March 2015. The wife commenced to receive government single parent benefits and was, otherwise, assisted by her parents. The wife also withdrew her Colonial Managed Fund Investment of $6,456.00 to meet the needs of herself and the children post separation.
The wife completed her professional accreditation in September 2016 and obtained part-time employment in October 2016. Otherwise, the wife was in receipt of the rental income from her Suburb Y home unit.
Interim Orders and thereafter
On 2 March 2015 interim orders were made, in summary, that provided:
a)that the husband pay interim child maintenance in the sum of $10,000.00 to the wife by no later than 25 March 2015 and thereafter monthly payments of $3,000.00 pending further order;
b)that the husband pay the wife’s costs in the sum of $5,000.00 of and incidental to the interim hearing.
On 15 August 2016 final parenting orders were made by consent that, in summary, provided for the wife to have sole parental responsibility for the children and that the children live with the wife. There were no orders made as to the husband’s time with the children.
Sale of Suburb Y
The Suburb Y property was sold by the wife in November 2016 for $740,000.00. The husband made application to restrain the disposition of the proceeds of sale. Net proceeds on sale were about $717,000.00.
It was necessary for the wife to rely on funds including regular periodic support advanced to her by her father post separation. These totalled about $111,000.00.
Interim Orders were made by consent that the sum of $394,000.00 be retained in a Term Deposit. Otherwise, the wife has had access to funds totalling about $323,000.00. She repaid $111,641.00 to her father, paid $87,520.00 for legal fees, paid outstanding school fees of $16,618.00 and School Bonds for the children of $28,000.00. The balance she paid to her bank account.
The child J is presently in year 12 at AA School. He will be 18 on 9 May 2018. The child K is presently in year 10 at BB School. The child L is in year five at BB School and the child M is in year two at AA School. All children commenced the present schooling arrangements in early to mid-2015.
The husband has had little engagement with the children since separation.
There is no issue between the parties that the wife was the primary carer for the children with the husband involved to a much lesser extent when permitted by his work and travel commitments. The wife, otherwise, attended to the great majority of domestic and household tasks.
The Property approach
The approach to the determination of an application under s 79 of the Act is set out in Stanford v Stanford [2012] HCA 52 and further considered by the Full Court in Bevan & Bevan [2014] FamCAFC 19, Chapman & Chapman [2014] FamCAFC 91 and Scott & Danton [2014] FamCAFC 203.
The Court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
Such a consideration should not be guided by an assumption that the parties’ rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s 79(4). The Court needs to conclude that it would be unjust or unfair to leave property rights intact under s 79(2) of the Act.
In many cases this requirement is readily satisfied where the parties are no longer in a marital or de facto relationship and, thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship. Such is the case in this matter.
In particular, such a circumstance arises where both parties seek property adjustment orders but are unable to agree as to same. Here the wife seeks an order for adjustment of property as does the husband.
It would in some circumstances be unjust or unfair to leave property rights intact where there is common ownership and discrete assets are sought by each. Otherwise, a consideration of s 79(4) factors as discussed below reveals it would be unjust or unfair to leave the parties’ property rights as they are.
Section 79(4) requires a consideration of the contributions made by the parties as defined in s 79(4)(a) to (c). The Court must then consider s 79(4)(d) to (g), in particular, the subjective considerations as to the parties by having regard to the provisions of s 75(2) in so far as they are relevant (s 79(4)(e)).
The Court can then consider the “justice and equity” of the actual orders to be made: Russell & Russell (1999) FLC 92-877; Teal & Teal [2010] FamCAFC 120, in the context of the Court’s obligation to make “appropriate orders” as provided for in s 79(1) of the Act.
The asset pool
The parties provided an updated draft balance sheet towards the end of the trial (Exh “Y”). Subsequently, that pool was also addressed in submissions. There was substantial agreement.
The present pool for consideration is as follows:
Assets
Husband N Street Country O $ 1,401,110.00
Husband D Street, Suburb E $ 735,000.00
Joint F Street, City G $ 177,856.00
Husband P Bank Account $ 150.00
Husband Standard Chartered Account …07 $ 4,318.00
Wife NAB account …70 $ 1,039.00
Wife NAB account …50 $ 2,376.00
Wife NAB account …84 $ 440,766.00
Wife Motor vehicle $ 18,200.00
Wife CBA account …30 $ 1,662.00
Husband Q Bank account …07 $ 6,659.00
Husband Rental Bond $ 27,746.00
Husband Q Bank Term Deposit $ 3,108.00
Husband NAB account …21 $ 3,000.00
$2,822,990.00
Liabilities
Joint Mortgage City G $ 35,636.00
Husband Mortgage Country O $ 653,457.00
Husband Mortgage Suburb E $ 350,063.00
Husband Debt to sister, Ms DD Lao $ (270,000.00)
Husband Debt to father, Mr CC Lao $ (391,000.00)
Husband Company Z Credit Card $ (226.00)
Joint Utilities City G $ (959.00)
Husband Rental Bond Country O $ 6,852.00
Husband Income tax debt Country O $ (11,081.00)
Wife HECS Debt $ (23,094.00)
Superannuation:
Husband MLC Wrap Super $ 101,000.00
Husband UK Super Pension $ ( . )
Husband Country R Super Fund $ 15,628.00
Husband Country O Super $ 1,500.00
Wife Country O Super $ 2,448.00
$ 120,576.00
The parties’ contentions as to the pool were limited to certain issues well defined during the hearing. The issues are bracketed above.
The debt to the husband’s sister:
The wife contended that the asserted debt to the husband’s sister be ignored. The evidence it was submitted was vague and uncertain.
It was submitted that the debt was in any event statute barred and should be regarded only as a contribution on behalf of the husband. It was common ground that the mortgage advance as framed was an on demand mortgage in respect to which no demand for repayment had been made. The Limitation Act 1969 (NSW) provides for a limitation period of 12 years from when a cause of action first accrues under a mortgage: see Gleeson & Gleeson [2002] NSWSC 418. The separate agreement as to interest was subject to a limitation period of only six years.
In Biltoft and Biltoft (1995) FLC 92-614, the Full Court said at 82,124:
A general practice has developed over the years that, in relation to applications pursuant to the provisions of s 79, the Court ascertains the value of the property of the parties to a marriage by deducting from the value of their assets the value of their total liabilities. In the case of encumbered assets, the value thereof is ascertained by deducting the amount of the secured liability from the gross value of the asset. See, Ascot Investments Pty Ltd v Harper & Anor (1981) 148 CLR 337 where Gibbs J (as he then was) pointed out at p 355 that the Court “must take the property of a party to the marriage as it finds it. The Family Court cannot ignore the interests of third parties in the property, nor the existence of conditions or covenants that limit the rights of the party who owns it”. Where the assets are not encumbered and moneys are owed by the parties or one of them to unsecured creditors, the court ascertains the value of their property by deducting from the value of their assets the value of their total liabilities, including the unsecured liabilities.
At 82,127, the Court said:
Notwithstanding the general practice which has developed, the Court has indicated that it may properly determine not to take into account or to discount the value of an unsecured liability in certain circumstances. Such liabilities would include but are not limited to a liability which is vague or uncertain, if it is unlikely to be enforced or if it was unreasonably incurred.
and see: Antmann and Antmann (1980) FLC 90-908 and Af Petersens and Af Petersens (1981) FLC 91-095.
In H & H [2001] FamCA 134 the Full Court said:
27.We respectfully agree with the observation of Evatt CJ in Prince and Prince (1984) FLC 91-501 at 79,076, including her Honour’s observation that the assessment of debts and liabilities is not necessarily arrived at by a strictly mathematical or accountancy approach in all cases.
28.…
29. The authorities to which his Honour referred in paragraphs 59 and 60 of his reasons were concerned with the circumstances in which, in proceedings brought pursuant to the provisions of s 79, it was proper for the Court to disregard a liability in whole or in part in assessing the net value of the assets of the parties for the purpose of the proceedings. They establish that, in some circumstances, it is appropriate to disregard a liability in whole or in part but do not exhaustively list those circumstances. However, the Full Court in Jenkin and Jenkin [1998] FamCA 163, after noting that the category of exceptions from the general approach or general rule relating to liabilities is not closed and that the adoption of that general approach or rule is not required as matter of law, said:-
“It [the general approach or general rule] amounts to no more than a guideline for the exercise of the discretion, departure from which, in a particular case, whilst justifying close scrutiny by the Full Court of the result of that exercise, does not of itself amount to an appealable error unless the result arrived at is seen to be plainly wrong in that it is manifestly unjust to one party or outside the range of the generous ambit within which a proper exercise of that discretion would fall.
The evidence of the advances by the sister over a period of two and a half years was unsatisfactory and how the capital sum of $70,000.00 is comprised is not clear. The supplementary agreement as to interest at a time when the parties had separated raises concern as to the bona fides of same.
For her part, the husband’s sister, the second respondent in the proceedings, did not seek orders to protect her asserted claim in the proceedings but having been put on notice as to the orders sought by the wife informed the Court that she would abide by the Court’s determination.
However, the parties have had the use of the sister’s funds interest free over a significant period. In the circumstances, the asserted debt with alleged capitalised interest will not be included in the pool for division but the use of such funds interest free will be accounted for as a contribution on the husband’s side. Such, indeed, was the ultimate submission made on behalf of the husband.
The debt to the husband’s father
Like the husband’s asserted debt to his sister, the funds advanced by the husband’s father to the Country O purchase in 2009 are not much in issue. The husband’s father’s oral evidence was clearly supportive of the capital advance made. The wife identifies no other source of funds for the Country O purchase.
The husband asserts an oral agreement in early October 2009 to pay interest on the sum advanced. Yet his written “acknowledgment” of the debt later that month makes no mention of interest. There has been no demand for repayment nor any payment of interest ever made.
The parties have had the use of the husband’s father’s monies for some years. It will be weighed as a contribution of the husband. Such again was the ultimate submission made on behalf of the husband.
The husband’s credit card debt
There is no evidence that the expenditure was for matrimonial purposes that would support the debt being included in the asset pool for division. It will be omitted.
The husband’s Country O tax debt
There is no evidence that the liability accrued was related to the matrimonial cohabitation particularly where the husband has been in receipt of the rental income from the property. It will be omitted.
The wife’s HECS debt
Counsel for the wife conceded that the wife’s HECS debt should be omitted from consideration. It will thus be omitted.
The utilities debt City G
The husband contended that these outstanding outgoings should be included. He has managed the property alone since separation. He gives no evidence as to why the liability has accrued. It will be omitted.
The husband’s UK Pension benefit
There is no valuation of any prospective entitlement. Exh “U” reveals that the husband may be entitled to a small pension in October 2041. He will need to contribute to National Insurance for another 24 years to be entitled to same. The prospective benefit is so uncertain as to be illusory. It will be disregarded.
The wife’s paid legal fees
Counsel for the husband contended that the wife’s legal fees paid from the sale of the Suburb Y property ($87,250.00: Exh “T”) should be added back into the pool for division.
In AJO & GRO [2005] FamCA 195 the Full Court said:
30. To date, three clear categories of cases have emerged where the Court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a)Where the parties have expended money on legal fees. In DJM and JLM [1998] FamCA 97; (1998) FLC 92-816 the Full Court said at 85,262:
“11.6For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.” (emphasis added)
(b)Where there has been a premature distribution of matrimonial assets. In Townsend and Townsend [1994] FamCA 144; (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at 81,654:
“In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.”
(c)In the circumstances outlined by Baker J in Kowaliw and Kowaliw (1981) FLC 91-092 at 76,644:
“As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a)where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b)where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para. (a) and (b) above having economic consequences is clearly in my view relevant under sec.75(2)(o) to applications for settlement of property instituted under the provisions of sec.79.
Subsequent to separation the wife was in parlous financial circumstances with the full‑time care of the children and reliant on support from her family and government benefits. The husband has taken out of the marriage his full income earning capacity intact and has been able to fund most of his legal fees from that source in addition to which he retained significant funds on separation as set out above and failed to provide financial support to the wife and children subsequent to separation. In such circumstance it is not appropriate for the wife’s paid legal fees from the sale of Suburb Y to be “added back” into the pool for division.
The final pool for division:
The resultant pool for division purposes is as follows:
Assets
Husband N Street Country O $ 1,401,110.00
Husband D Street, Suburb E $ 735,000.00
Joint F Street, City G $ 177,856.00
Husband P Bank Account $ 150.00
Husband Standard Chartered Account …07 $ 4,318.00
Wife NAB account …70 $ 1,039.00
Wife NAB account …50 $ 2,376.00
Wife NAB account …84 $ 440,766.00
Wife Motor vehicle $ 18,200.00
Wife CBA account …30 $ 1,662.00
Husband Q Bank account …07 $ 6,659.00
Husband Rental Bond $ 27,746.00
Husband Q Bank Term Deposit $ 3,108.00
Husband NAB account …21 $ 3,000.00
$ 2,822,990.00
Liabilities
Joint Mortgage City G $ 35,636.00
Husband Mortgage Country O $ 653,457.00
Husband Mortgage Suburb E $ 350,063.00
Husband Rental Bond Country O $ 6,852.00
$ 1,046,008.00
Superannuation:
Husband MLC Wrap Super $ 101,000.00
Husband Country R Super Fund $ 15,628.00
Husband Country O Super $ 1,500.00
Wife Country O Super $ 2,448.00
$ 120,576.00
Overall, the net pool including superannuation is $1,897,558.00.
Contributions
The wife contended that contributions should be regarded as equal to separation with thereafter contributions being adjusted to favour the wife 60/40 (thus creating a disparity of about $380,000.00 in her favour) by reason of her post separation contributions with the children in her sole care to trial.
It was further contended that such result was in part justified on the basis of the funds at bank retained by the husband at separation. This has, however, been taken into account in not adding back the wife’s legal fees from the Suburb Y sale.
The husband contends that contributions should favour him by reason of the capital funds from his family used interest free for some years relating to the purchases of Suburb E and Country O. The Country O funds came in later in the relationship and are significant.
The husband contended that contributions to separation should favour him by five per cent to 10 per cent (thus creating a disparity of between about $190,000.00 to $380,000.00 in favour of the husband) by reason of his family funds advanced for Suburb E and Country O but that after separation contributions would favour the wife by a similar percentage, presumably leading to an overall equality of contributions to the date of hearing.
In assessing contributions the Full Court said in Harris & Harris (1991) FLC 92-254:
…the task of the court in proceedings under section 79 [and thus s 90SM(4)] is not akin to an accounting exercise. To borrow a phrase used by McClelland J in Davey v Lao (1990) DFC 95-084; (1990) 13 Fam LR 688 at 689 in relation to section 20 of the De Facto Relationships Act 1984 (NSW):
''the Court is required to make a holistic value judgment in the exercise of a discretionary power of a very general kind”.
In Kessey and Kessey (1994) FLC 92-495 at 89,151 the Full Court made clear that ultimately all that is necessary is to evaluate the weight that should be given to each party’s contributions relative to the contributions of the other party:
... In many – indeed probably in most – property settlement cases the Court has to evaluate and assess contributions to property in the absence of precise valuations of the contributions in question. Indeed, where the contributions to property are indirect or non-financial, precise valuation is impossible, and even where the contributions are direct or financial so that a valuation might be provided, other factors (not capable of precise mathematical statement) may well have eroded the initial value of such contributions. In a case such as the present, it is not necessary to arrive at precise mathematical valuations of the parties’ contributions - all that is necessary is to evaluate the weight that should be given to each party’s contributions relative to the contributions of the other party.
Years later in Lovine & Connor and Anor (2012) FLC 93-515, the Full Court said:
42.As part of the process of ultimately determining just and equitable orders under s 79 there is included a complex of discretionary assessments and judgments of many components of contribution, only some of which are capable of measurement in money terms and then often only in historical, rather than present, money terms. Any dictate to the effect that in the course of assessment each disparate component part or kind of contribution must be assigned a discrete and identifiable value or percentage is antithetical to the nature of the discretion involved.
The factual background is set out above.
Overall, it is considered that weighing the parties’ contributions to date of hearing, they should be regarded as equal.
Section 75(2) factors
It was rightly conceded by counsel for the husband that a consideration of these factors must favour the wife.
The parties are of the same age with no asserted health issues.
The husband retains from the marriage a significant income earning capacity as discussed in detail below. Whilst the wife has obtained her tertiary qualifications her capacity to earn is circumscribed by her parenting obligations. She has a modest income capacity. The property and financial resources of the parties are considered above.
The wife will have the care of the parties’ four children, J born in 2000, K born in 2001, L born in 2006 and M born in 2009, into the future without, it appears, any real input from the husband.
The wife has the obligation to support herself and the children. The husband has a new wife and child to support.
The parties have modest accumulated superannuation.
Any provision of maintenance for the wife will not assist her earning capacity.
The wife in following the husband around the world (with the children) for the purposes of his employment, it is to be inferred, contributed to the husband’s ongoing earning capacity.
Whilst the marriage is of some 16 years. It is not contended that it has affected the wife’s earning capacity. She is a qualified professional who obtained tertiary qualifications during cohabitation. Her capacity to earn is limited by her parenting obligations.
Little is known of the husband’s arrangements with his new wife save that he pays her a monthly sum to run their household.
It is common ground that the Australian Child Support Scheme does not apply to the husband who resides primarily in Country R. The prospect of ongoing financial support for the children is limited by the non-applicability of reciprocal child maintenance enforcement obligations as between Australia and Country R. A periodic child maintenance order is thus most problematic by reason of enforcement difficulties and the issue is considered in the context of the wife’s application for child maintenance orders below. As set out below, the wife will receive a lump sum child maintenance order.
A consideration of the pertinent s 75(2) factors is indicative of an adjustment in favour of the wife. Such was the contention of the husband’s counsel although an appropriate percentage was not suggested.
Counsel for the wife contended that the adjustment should be in the order of 15 per cent thus creating a disparity of about $569,000.00 between the parties. That disparity would represent nearly 30 per cent of the net matrimonial pool. Such a disparity is not called for. In the circumstances of this matter an adjustment to the contribution based finding of 10 per cent in favour of the wife is appropriate.
Overall, the pool for adjustment should be apportioned at 60 per cent to the wife and 40 per cent to the husband.
The wife is thus entitled to assets to the value of $1,138,534.00.
She has:
Wife NAB account …70 $ 1,039.00
Wife NAB account …50 $ 2,376.00
Wife NAB account …84 $ 440,766.00
Wife Motor vehicle $ 18,200.00
Wife Country O Super $ 2,448.00
Wife CBA account …30 $ 1,662.00
$ 466,491.00
In final submissions counsel for the wife sought property orders in summary:
a)That the Country O property be sold with the whole of the net proceeds being paid to the wife.
b)That the husband transfer to the wife the Suburb E property with the second respondent being required to discharge her mortgage.
c)That the City G property be sold and the wife receive such of the proceeds of sale that would result in an overall division as to 75 per cent to the wife and 25 per cent to the husband.
In final submissions counsel for the husband sought orders in summary:
a)That the husband transfer the Suburb E property to the wife (presumably subject to her refinancing the current mortgage).
b)That the husband transfer to the wife his interest in the City G property (presumably subject to the existing mortgage).
c)That the husband retain the Country O property.
It is proper that the wife shall retain the Suburb E property having equity of $354,937.00 bringing her entitlement to $821,428.00. This would leave a balance by way of property adjustment payable to the wife of $287,106.00.
Thus a final adjustment can be made by the husband by way of a cash adjustment in favour of the wife of $287,106.00 in default the Country O property shall be sold to meet the payment to the wife plus any interest accrued. This gives the husband the opportunity to retain the Country O property.
It is unnecessary to order a sale of the City G property. The husband can retain it and deal with it as he wishes. He may choose to refinance or sell it to realise equity to meet the payment due to the wife.
The husband will retain:
a)The Country O property subject to payments to the wife to be provided for in orders.
b)The City G property subject to mortgage.
c)His funds at Bank.
d)His refundable rental bond.
e)His superannuation entitlements.
Orders as to property will be made accordingly.
Child maintenance
Section 66B of the Act provides:
Objects
(1)The principal object of this Division is to ensure that children receive a proper level of financial support from their parents.
(2)Particular objects of this Division include ensuring:
(a) that children have their proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both of their parents; and
(b)that parents share equitably in the support of their children.
Section 66H of the Act provides:
Approach to be taken in proceedings for child maintenance order:
In proceedings for the making of a child maintenance order in relation to a child, the court must:
(a) consider the financial support necessary for the maintenance of the child (this is expanded on in section 66J); and
(b) determine the financial contribution, or respective financial contributions, towards the financial support necessary for the maintenance of the child, that should be made by a party, or by parties, to the proceedings (this is expanded on in section 66K).
Section 66J relevantly provides:
Matters to be taken into account in considering financial support necessary for maintenance of child
(1)In considering the financial support necessary for the maintenance of a child, the court must take into account these (and no other) matters:
(a)the matters mentioned in section 66B; and
(b)the proper needs of the child (this is expanded on in subsection (2)); and
(c) the income, earning capacity, property and financial resources of the child (this is expanded on in subsection (3)).
(2)In taking into account the proper needs of the child the court:
(a)must have regard to:
(i) the age of the child; and
(ii)the manner in which the child is being, and in which the parents expected the child to be, educated or trained; and
(iii) any special needs of the child; and
(b)may have regard, to the extent to which the court considers appropriate in the circumstances of the case, to any relevant findings of published research in relation to the maintenance of children.
(3)In taking into account the income, earning capacity, property and financial resources of the child, the court must:
(a)have regard to the capacity of the child to earn or derive income, including any assets of, under the control of or held for the benefit of the child that do not produce, but are capable of producing, income; and
(b)disregard:
(i)the income, earning capacity, property and financial resources of any other person unless, in the special circumstances of the case, the court considers it appropriate to have regard to them; and
(ii)any entitlement of the child or any other person to an income tested pension, allowance or benefit.
Section 66K provides:
Matters to be taken into account in determining contribution that should be made by party etc.
(1)In determining the financial contribution, or respective financial contributions, towards the financial support necessary for the maintenance of a child that should be made by a party, or by parties, to the proceedings, the court must take into account these (and no other) matters:
(a)the matters mentioned in sections 66B, 66C and 66D; and
(b)the income, earning capacity, property and financial resources of the party or each of those parties (this is expanded on in subsection (2)); and
(c)the commitments of the party, or each of those parties, that are necessary to enable the party to support:
(i) himself or herself; or
(ii)any other child or another person that the person has a duty to maintain; and
(d)the direct and indirect costs incurred by the parent or other person with whom the child lives in providing care for the child (this is expanded on in subsection (3)); and
(e)any special circumstances which, if not taken into account in the particular case, would result in injustice or undue hardship to any person.
(2)In taking into account the income, earning capacity, property and financial resources of a party to the proceedings, the court must have regard to the capacity of the party to earn and derive income, including any assets of, under the control of or held for the benefit of the party that do not produce, but are capable of producing, income.
(3)In taking into account the direct and indirect costs incurred by the parent or other person with whom the child lives in providing care for the child, the court must have regard to the income and earning capacity forgone by the parent or other person in providing that care.
(4)In determining the financial contribution, or respective financial contributions, that should be made by a party, or by parties, to the proceedings, the court must disregard:
(a)any entitlement of the child, or the person with whom the child lives, to an income tested pension, allowance or benefit; and
(b)the income, earning capacity, property and financial resources of any person who does not have a duty to maintain the child, or has such a duty but is not a party to the proceedings, unless, in the special circumstances of the case, the court considers it appropriate to have regard to them.
(5)In determining the financial contribution, or respective financial contributions, that should be made by a party, or by parties, to the proceedings, the court must consider the capacity of the party, or each of those parties, to provide maintenance by way of periodic payments before considering the capacity of the party, or each of those parties, to provide maintenance:
(a)by way of lump sum payment; or
(b)by way of transfer or settlement of property; or
(c)in any other way.
The needs of the children
The four children are in private colleges as chosen by the wife. The parties have never been in a position to afford from their income alone the enrolment of the children in private school. When overseas school fees were mostly funded by the husband’s employer or from other family. The husband opposes being required to contribute to such school fees.
The wife sets out the weekly expenses of the children in her Financial Statement. She was not cross-examined as to such expenses.
The needs of the children by reason of significant components of $700.00 per week for private school fees and $200.00 per week for extracurricular activities total $1,947.00 per week.
The wife presently pays reduced school fees due to her financial circumstances.
Leaving aside school fees the reasonable needs of the children are about $1,200.00 per week being about $300.00 per week per child.
The wife’s capacity to contribute to the children’s needs is mostly dependent of drawings from her capital and her modest income.
The husband’s income: Exh “L”
In the 2015 calendar year the husband was paid salary and bonuses totalling 160.208 million CRD (about 850 CRD to $1.00 AUD) being about $188,480.00 AUD less withholding taxes of 13.120 million CRD being $15,435.00 AUD.
In the 2016 year he was paid salary and bonuses totalling 165.409 million CRD (about 850 CRD to $1.00 AUD) being about $194,598.00 AUD less withholding taxes of 23.03 million CRD being $19,578.00 AUD. His gross income averages out at about $3,742.00 per week.
Otherwise, the husband accrues superannuation and has insurance deductions from his salary that in 2015 were about 8.7 million CRD equal to about $9,176.00 AUD. There is no evidence as to the deductions from salary in 2016. It is assumed to be similar.
Regrettably, documents were only produced by the husband during his oral evidence as to his current income circumstances: Exh “N”. The documents and the husband’s evidence show that up to the end of July 2017 he had been paid salary and bonuses of 108.982 million CRD. It was agreed that such sum was equal to an annualised gross salary of $200,667.00 AUD, slightly more that his 2016 annual income.
Otherwise, the rental income from the properties at Suburb E, City G and Country O mostly meet mortgage and property outgoings.
Otherwise, the husband has paid from his accumulated income post separation a new rental bond of 25 million CRD repayable when his current lease expires in August 2018. He also has paid to his new wife (a circumstance only disclosed in his oral evidence) 20 million CRD for “various expenses”. The husband has resided with his partner since 2016 but had never disclosed that.
There is a new child of the relationship. He transfers three million CRD (about $3,348.00 AUD) to his wife’s account each month “to run the household”.
His financial statement and oral evidence reveal weekly expenses as follows:
Tax $ 163.00
Life Insurance $ 56.00
Health Insurance $ 175.00
Care Insurance $ 11.00
Long Term Insurance $ 19.00
Household expenses transferred to new wife $ 772.00
$ 1,196.00
He thus has a surplus of income over expenditure of about $2,668.00 per week.
A consideration in issue is the question of “the manner in which the child is being, and in which the parents expected the child to be, educated or trained”.
The wife has unilaterally enrolled the children in their current schools and is only able to meet her fee commitment from capital or borrowing. When together overseas the parties were able, it appears, to have the children in private schools by reason of employer largess or funds provided from family.
They were not able of themselves to fund such fees.
It is clear that the preference for periodic support for children is explicitly stated in s 66K(5) of the Family Law Act. In Luckie & Luckie (1989) FLC 92-036 the Full Court said that s 66K(5) makes it clear that the preferable order for the payment of maintenance is for periodic payments and the Court is not to consider other methods of payment unless it has first considered the capacity of a party to make periodic payments.
In Bendeich & Bendeich (1993) FLC 92-355 Mushin J explained that:
The rationale underlying the general approach of the Court was that the longer a lump sum order operates the greater the chance of change in circumstances necessitating a variation of that order, thereby making the order unjust.
The provision of child support by way of lump sum payment is clearly not the preferred method of maintaining children. See the comments by the Full Court in Prpic & Prpic (1995) FLC 92-574 where the Court said:
Capitalisation orders may well be appropriate where there are difficulties in enforcement or where it is proper to sever the financial link between the parties however as a general rule, given that payments of child support depend upon circumstances prevailing from time to time which circumstances cannot be predicted with any significant degree of certainty it seems to us that the provision of child support by way of lump sum should not be considered to be a readily available alternative but one that is only exercised when there are circumstances that make it appropriate to do so.
Lump sum orders have usually been considered by the Court in two situations:
(a)where there are difficulties in enforcement; and
(b)where liable parents are asset rich and income poor.
The husband’s general conduct in relation to the proceedings has been one of reluctance to disclose and he has failed in his obligation to be full and frank with the Court. Notwithstanding that he has met his obligation under interim orders for periodic support for the children, that was in the context of incomplete financial proceedings that would have facilitated enforcement from property had he defaulted.
As discussed, there are no reciprocal child maintenance enforcement arrangements with Country R. On conclusion of property proceedings an expectation that the husband would meet any periodic support obligation must be considered problematic especially where he has not sought any engagement with the children since separation. A lump sum order would free up his income for his new family.
In the circumstances, it is appropriate that there be an order for lump sum child maintenance.
The children’s reasonable needs have been assessed at about $300.00 per week per child. Otherwise, the wife has the obligation to provide ongoing accommodation for the children such cost not being reflected in the periodic needs of the children set out by the wife.
Doing the best on the evidence available the husband should pay by way of child maintenance a contribution of $250.00 per week per child.
The child J will be 18 in mid 2018. His future maintenance would total about $8,625.00. For the child K born in 2001 it would total about $15,125.00. For the child L born in 2006 it would total about $91,000.00. For the child M born in 2009 it would total about $99,500.00.
The total lump sum periodic liability order would be $214,250.00. That figure representing a present lump sum payment of a future periodic liability should be discounted as the wife will get the benefit of the capital funds immediately on which she can earn interest on deposit whilst making periodic withdrawals. A discount of 20 per cent would see the pro rate reduction of the amounts reduced to a total of about $171,000.00.
In all the circumstances, a lump sum future child maintenance obligation of $171,000.00 will be ordered.
An order will be made accordingly.
Maintenance Issues
Section 72 of the Act sets out the relevant provisions in relation to the right to spouse maintenance. The Court can make such order as it considers proper (s 74).
Section 72 provides that a party to a marriage is liable to maintain the other party, to the extent that the first mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
b)by reason of age or a physical or mental incapacity for appropriate gainful employment; or
c)for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2) of the Act.
Section 75(2) considerations have been discussed above.
It is not conceded on behalf of the husband that the wife is unable to support herself adequately by reason of any of the matters referred to in s 72.
The wife has the onus of establishing her right to an order for spouse maintenance.
The means and needs of the wife
The wife is working part-time having resumed work in October 2016. She presently works for an agency (Exh “F”) doing a regular two days per week with the occasional extra days. She says she averages two to three days per week with the occasional fourth day. Her gross income averages about $553.00 per week ($2,400.00 per month) (Exh “F”) less tax of about $50.00 per week.
Otherwise, the wife receives government child benefit payments of about $550.00 per week and the husband’s maintenance payment of $3,000.00 per month ($692.00 per week).
She is assisted in after school care by her parents. Otherwise she attends to the care of the four children and their household.
The wife expects as the children get older to increase her work by a further day a week. She has no assistance with childcare from the husband.
At hearing the wife had funds at bank of about $441,000.00 including remaining funds from the sale of Suburb Y.
The wife in her Financial Statement filed 28 October 2016 deposes that apart from fixed expenses her own needs are about $257.00 per week. She was not cross-examined on the issue.
Otherwise, her fixed weekly expenses are:
Rent $ 530.00
Insurance $ 6.00
Car insurance $ 16.00
Car Registration $ 24.00
$ 576.00
making a total of $833.00. Her net deficit is thus about $330.00 per week.
It is clear that the wife is unable to support herself adequately at present.
She, however, proffers no evidence as to her attempts as a qualified professional to seek further or other work that would enhance her present income.
She is to receive the income earning Suburb E property (Gross $2,250.00 per month) and has funds at present or will have funds that will allow her to discharge the mortgage secured on the property. She will then receive the rental subject only to payment of property outgoings. Should the wife sell the property she will have significant investment funds.
It will take some months for orders as to final property adjustment to be implemented. In all the circumstance, it is proper by reason of the husband’s capacity to meet an order that he pay periodic spouse maintenance for a period of six months only at the rate of $250.00 per week. That liability will be secured against the Country O property as a capitalised sum for any amount unpaid at the time of sale and the then remaining future periodic liability.
Orders will be made accordingly.
I certify that the preceding one hundred and sixty five (165) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Foster delivered on 14 November 2017.
Associate:
Date: 13 November 2017
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