Macarthur & Macarthur (No 5)
[2023] FedCFamC1F 964
•13 November 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Macarthur & Macarthur (No 5) [2023] FedCFamC1F 964
File number: BRC 6154 of 2020 Judgment of: REES J Date of judgment: 13 November 2023 Catchwords: FAMILY LAW – PROPERTY – Division of asset pool – Spousal maintenance – Child support departure – Determination of beneficial ownership – Characterisation of lump sum payment – Applicant seeks superannuation splitting order – Allegations of maintenance arrears Legislation: Child Support (Assessment) Act 1989 (Cth), ss 117, 117(4)(c), 123(1)(a), 124
Family Law Act 1975 (Cth), ss 72, 124
Cases cited: Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 Division: Division 1 First Instance Number of paragraphs: 176 Date of hearing: 31 October, 1 & 2 November 2023 Place: Sydney For the Applicant: Litigant in Person For the Respondent: Litigant in Person ORDERS
BRC 6154 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS MACARTHUR
Applicant
AND: MR MACARTHUR
Respondent
ORDER MADE BY:
REES J
DATE OF ORDER:
13 NOVEMBER 2023
THE COURT ORDERS:
1.That the husband and the wife do all things required to effect the distribution of the funds held on their behalf in the E Trust Account as to $129,340 to the wife and the balance to the husband.
2.That other than as provided in these orders, each party is solely entitled to all other property in his or her possession, including but not limited to any superannuation entitlement.
3.That the wife’s application for spousal maintenance is dismissed.
4.That all orders for the payment of spousal maintenance are discharged as at the date to which they stand paid.
5.That the wife’s application pursuant to s 123(1)(a) of the Child Support (Assessment) Act 1989 (Cth) is dismissed.
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 Macarthur & Macarthur has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
REES J:
Ms Macarthur (“the wife”) and Mr Macarthur (“the husband”) commenced co-habitation either in July 2013, according to the wife or in November 2013 according to the husband. Nothing turns on this dispute.
The wife was born in the United States of America (“USA”) and the husband is Australian.
They married in 2014 and they have a daughter, X, born 2017 who lives with her mother.
The proceedings before the Court relate to the division of their property, spousal maintenance and a child support departure application.
They do not agree about when they separated but the wife deposed that she last had physical contact with the husband in August 2019.
The wife moved to Australia from the USA when they started their relationship and she has not been in paid employment since.
The husband was employed in industry in an overseas role until they separated but has since undertaken different employment.
The husband purchased a property at City O in 2013 for $370,000. Of that amount, $231,204 was borrowed by way of mortgage and the balance of the purchase price, including the stamp duty, was paid from his savings. It is not in dispute that, when the relationship commenced, the husband had savings remaining of some $98,000. He owned a car and was contributing to superannuation with Superannuation Fund 2. The husband’s superannuation interest was valued at $109,282 at 30 June 2013 and was $139,745 at 30 June 2014.
The wife had no assets of significance when the relationship started. She had credit card debts of about $30,000 which were paid off using the husband’s savings. The wife asserts that the debts had been incurred by them jointly, paying for travelling expenses and the like. There is no evidence that allows me to resolve this issue.
The husband paid $8,000 to obtain the wife’s visa and $10,000 for her dental work.
The husband’s savings were used to support them while he studied full time and obtained qualifications.
On 7 June 2016, the Macarthur Family Superannuation Fund (“the SMSF”) was established. All of the funds held in the husband’s account in Superannuation Fund 2 were transferred to the SMSF. The trustee of the SMSF is Macarthur Family Superannuation Pty Limited. When the trustee company was incorporated, the wife and the husband were both directors. After the company was incorporated, the husband was advised by ASIC that the wife was not eligible to be a member of the SMSF because of her immigration status and she resigned as a director in October 2016. The husband is the sole director. The wife is not a member of the SMSF and has made no contributions to it.
In mid-2016, a property at Suburb Y was purchased for $449,000. The purchase was wholly funded by mortgages secured over both the Suburb Y property and the City O property. Both City O and Suburb Y were rented out and the rent was paid into the wife’s bank account.
In late 2016, another property was purchased at Suburb C for $701,000. This property was also wholly financed by three mortgages secured over City O, Suburb Y and Suburb C. They lived in the Suburb C property.
The SMSF purchased a property off the plan at Suburb R. The evidence does not disclose the date of purchase, other than it was after the wife resigned as a director of the trustee company, but the loan for the purchase was approved in late 2016 in the sum of $347,600. The loan repayments were of interest only for five years. I am not aware of the purchase price. Funds were raised by way of mortgage and, I infer, from the husband’s superannuation contributions held in the SMSF. That property constitutes the significant asset of the SMSF.
X was born in 2017. At that time, the husband was working onsite for five weeks at a time, typically then having five weeks at home after each deployment. In mid-2017, the wife and X travelled to the USA to stay with her parents and she has since remained in the USA. The Suburb C property was then offered for rent by QQ Company. The rent was paid directly into the wife’s account. If I understand the evidence correctly, the husband then continued working onsite, flying to and from the USA between contracts. The wife also had access to the husband’s bank account into which he paid his wages.
In early 2019, the wife purchased from her parents their property at V Street, City T in the USA for $US170,000. The purchaser was a company, W Company owned by the wife. The wife’s parents advanced the whole of the purchase price by way of mortgage. The property was tenanted and the rent paid to K Real Estate who were the rental agents.
In 2019, the husband’s mother advanced him $13,500 to do necessary repairs to Suburb C.
In early 2019, the wife’s parents purchased a property at S Street, City T in the USA for $317,500. The wife was a borrower named on the mortgage for $254,000 together with her parents. In mid-2019 the wife was registered as the proprietor of the S Street property. In cross‑examination, the wife said that S Street was rented but it is unclear whether she was the tenant or whether there was a third-party tenant at some time.
In mid-2019 the husband left the USA to go overseas. After that date, the parties did not again live together and the husband did not return to the USA. The husband’s unchallenged evidence is that, from August 2019 to February 2020, he worked continuously, leaving one site at the end of a contract and immediately flying to the next site.
In late 2019, the wife transferred ownership of W Company and thus of the V Street property to her mother for no consideration.
In December 2019, the husband received a letter from lawyers acting for the wife notifying him that the marriage was ended. Thereafter, the husband directed that the rent payments were made to his account. The wife’s Z Bank statements for the period from November 2019 to December 2019 show deposits into her account from QQ Company totalling over $10,300. During the same period the wife transferred a total of $4,600 to “S Street”. There is no evidence about the reason for those payments but, since the wife was the registered proprietor of S Street, I infer the transfers were for mortgage payments. There are no payments made from that account towards the mortgages on the Australian properties and I infer that the husband was meeting all of those mortgage payments from his earnings. The statement also shows transfers made by the wife to M Finance Investment.
After January 2020, the husband continued to provide some financial support for the wife but I am unable to ascertain what amounts were paid.
These proceedings were commenced in May 2020. On 7 August 2020, an order was made for the husband to pay spousal maintenance of $200 per week.
City O was sold in late 2020 for $486,000. All of those funds were paid off the mortgages.
Suburb Y was sold in late 2020 for $347,000. There was insufficient available to discharge the mortgages and the husband applied for the release of $10,000 from his superannuation entitlements to complete the sale. After completion, $6,565 was repaid to the superannuation fund.
In mid-2021, the wife transferred her interest in the S Street property to a company, BB Company, which is owned by her mother, for no consideration. The wife remains a party to the mortgage. The wife's father deposed that the wife was renting S Street at the time it was transferred.
On 26 May 2021, orders were made for the sale of Suburb C. The orders provided for payment of $80,000 to the wife and for the balance to be held in trust pending the determination of these proceedings. The orders contained the notation,
The sum of $80,000 referred to in Order 5d above is to be characterised by the trial judge.
In addition to the order for the payment of $80,000, the orders provided for the husband to pay spousal maintenance in the sum of $1,348 per week.
Suburb C Property was sold in late 2021 for $838,000. The wife received $80,000 which she used to pay off her credit card debts. The balance of the net proceeds of sale of $141,031 are held in a controlled monies account.
In late 2021, the parties were divorced in the USA and, as part of those proceedings, entered into a parenting plan whereby X lives with the wife in the USA.
The husband’s employment was terminated in late 2022. In early 2023, the husband sent an email to the wife setting out his current employment position and advising her that he had been injured in an attack. He was unable to work and had applied and been approved for Job Seeker assistance. Further he advised that he needed an operation and was unable to work on site until the surgery was completed. He enclosed with that email the relevant supporting documents.
In mid-2023, the husband entered into a contract of employment in the position he currently occupies.
Trial directions were made on 1 November 2022 when the matter was listed for final hearing for three days commencing on 31 October 2023. Those trial directions required the parties to file their trial affidavits by 13 October 2023 and to file a joint balance sheet 28 days before the hearing.
The husband filed according to the trial directions. The wife did not. The wife did not respond to the husband’s draft balance sheet.
From this narrative, the following issues need to be determined.
ISSUES
·Does the wife beneficially own the V Street property?
·Does the wife beneficially own the S Street property?
·How should the sum of $80,000 received by the wife pursuant to the orders made on 26 May 2021 be characterised?
THE ADJOURNMENT APPLICATION
On 22 October 2023, the wife filed an application to adjourn the hearing which was listed to commence on 31 October. She sought an adjournment for six weeks. I listed the matter before me on 27 October for argument. The husband opposed the application.
After hearing submissions, I dismissed the application and indicated that reasons would be provided in the substantive judgement.
The balance sheet then provided by the husband in preparation for the hearing asserted that the assets of the parties were $141,031 in a trust account in Australia and some $176,426 in the United States of America. There was $344,466 in a self-managed superannuation fund.
The husband disclosed an income of $88,452 per annum and the wife disclosed no income from employment.
Trial directions had been made by Christie J on 1 November 2022, requiring that the applicant file an Amended Initiating Application, setting out the orders she sought, by 15 September 2023 and her trial affidavits by 13 October 2023. The orders provided,
The proceedings have been listed for trial for three days commencing on 31 October 2023. Notwithstanding any non-compliance with directions, this matter will proceed on the allocated dates.
The wife did not comply with those directions and the matter was relisted. On 9 October 2023, Christie J extended the time for the wife to file her Amended initiating Application by 13 October 2023 and her trial affidavits by 4pm on 24 October 2023.
When the matter came before me on 27 October 2023, the wife had filed the Amended Initiating Application together with the following documents:
·Financial Statement sworn 23 October 2023
·Affidavit of Mr CC sworn 20 October 2023 of 31 pages including annexures
·Affidavit of Mr CC sworn 20 October 2023 of 4 pages
·Affidavit of Ms DD sworn 25 October 2023
·Affidavit of Ms EE sworn 20 October 2023
The application to adjourn was supported by an affidavit of the wife sworn 20 October 2023 which annexed a medical certificate dated July 2023 which stated that the wife had completed an “intensive program with [FF Health Service]” from May 2023 to June 2023, “working on her symptoms of depression, anxiety and PTSD” and an undated report from a psychiatric nurse practitioner purporting to give evidence about the wife’s psychiatric health. Setting aside the question of whether that report has any evidentiary value or whether it is admissible in evidence, nothing in that report explained why the wife had not complied with the trial directions or gave any reason to believe that the matter would be in any better state of preparation if it were adjourned for six weeks.
The husband, who was also unrepresented, has complied with the trial directions and is ready to proceed.
Three days of court time has been allocated and will be thrown away if the matter does not proceed.
I had no available dates in six weeks’ time.
I had no confidence that the matter will be any better prepared if the adjournment is granted.
For those reasons, the application to adjourn the trial was dismissed.
THE BALANCE SHEET
Doing the best I can, and with little input from the wife, I have compiled a balance sheet which sets out the respective contentions of the parties. The figures for which the husband contends are taken from his draft balance sheet. The figures for which the wife contends are taken from her Financial Statement. I will deal with the disputes using the item numbers on the balance sheet.
Ownership Description Wife's value Husband’s value ASSETS 1. Joint Funds held in trust from sale of Suburb C $141,031 $141,031 2. Wife Net increase in value of S Street USA disposed of by wife during marriage US $139,500E Nil E$216,840 3. Wife Net increase in value of V Street, USA disposed of by wife during marriage US$99,000E Nil E$152,598 4. Wife GG Financial Services in USA $2,900USD E$46,656 5. Wife M Finance Single TOD account E$126,770 6. Wife Bank accounts Nil Unknown 7. Wife Motor vehicle $12,237 E$32,590 8. Wife NAB shares $882 9. Wife W Company bank account (rent) Unknown Total … ADDBACKS Sought by the husband against the wife 10. Wife Partial distribution received from rent funds with F Company paid 26 July 2021 $4,751 11. Wife Interim property distribution from sale of Suburb C $80,000 12. Wife Reimburse half of cost of valuation of Suburb R property $660 Sought by the wife against the husband as per Financial Statement sworn 23 October 2023 13. Husband Sale of City O at under value $130,000 14. Husband Sale of Suburb Y at under value $15,000 15. Husband Draw down Suburb C mortgage $12,645 16. Husband Not paying Suburb C mortgage (includes drawdown) $30,178 17. Husband All rental income taken by husband from City O and Suburb C $50,000+ 18. Husband Emptied City O bank account $2,000+ 19. Husband Kicking renters out losing income for 8 months $31,325 20. Husband Taking all belongings, furniture etc at Suburb C $10,000 21. Husband Takin all of City O furniture and appliances $3,000 22. Husband Taking all of my storage unit $15,000 23. Husband Insurance payout $200,000 24. Husband Undisclosed cryptocurrency $50,000 25. Husband Quit paying promised spousal maintenance 26. Husband Got out of child support $9,000 27. Husband Gave his car to his mum $30,000 28. Husband Then rented (car) back from her weekly $20,000 29. Husband Misused our SMSF pulled for personal use Total LIABILITIES 30. Husband Credit cards $5,167 31. Husband Loan from mother re legal fees & advances $129,543 32. Wife Credit cards $172,907 Unknown 33. Wife Loan for motor vehicle $7,567 $7,567 34. Wife Student loan Unknown 35. Wife Loan from HH Financial $27,221 36. Wife Personal loans $163,238 37. Wife Unpaid rent $127,075 38. Wife Legal loans $65,675 39. Wife JJ Financial Services $5,424 $5,424 Total SUPERANNUATION 40. Husband SMSF $344,466 41. Wife M Finance Investments Account $14,900 $18,466 42. Wife Interest in SMSF $5,398 43. Husband Life insurance policy in SMSF Total Does the wife beneficially own the V Street property?
The wife’s father deposed,
In 1985, my wife and I purchased our home at [V Street], [City T], [State U]. We raised our family in this home, we we’re [sic] not ready to sell it. In 2019, when we found another residence we desired, [the wife] told us she would like to buy the [V Street] property. However, after reaching an agreement with her, [the husband] unexpectedly left his family and returned to Australia. He then removed their financial access, leaving [the wife] and their young child without support or a way to pay required marital bills. As a result, [the wife] could not purchase the house, she never made a payment, rendering our contracted agreement null and void. My wife is the sole owner of [W Company] which holds out house at [V Street]. We have included our 2022 tax returns, we are expecting a large loss this year.
The joint tax return of the wife’s parents is annexed to the affidavit. They declared income by way of rent of $US18,800 from the V Street property and expenses of $US13,523.
In cross-examination, it was suggested to the wife’s father that, when these proceedings were completed, the V Street property will belong to the wife. He said that “we’re not going to give it to her – at one point we were going to help her buy it”.
Asked what mortgage payments had been paid by the wife, he said “She never paid a cent”.
I accept the wife’s contention that she is not the beneficial owner of the V Street property.
However, she did own the property from early 2019 until late 2019 when it was transferred. During that period the property was rented through Mr KK of K Real Estate. On 25 April 2021, the husband sent an email to Mr KK asking for details of the rent received by the wife. Mr KK replied on 27 April 2021, “We have been instructed by [the wife] not to release any information.”
I am satisfied that between January and October 2019, the wife received rent for the property and that she has deliberately failed to disclose what she received.
Does the wife beneficially own the S Street property?
The wife’s father deposed,
Separately, we bought the [S Street] property shortly before [the wife and the husband’s] separation. The intention was for them to rent and eventually purchase when feasible. This arrangement was never meant as a gift. Though [the wife’s] name appeared on the loan agreement, enabling us to secure a 30-year-fixed interest rate. It is our financial standing that solely secured this loan. [The wife’s] inclusion doesn’t denote an ownership stake…
In the midst of the upheaval, we were already transferring [S Street] property to [the wife] in [late] 2019, just as the respondent removed access to their financial accounts from Australia…
The following year, [the wife] was advised to transfer the property back transparently, which we did. An agreement was in place for [the wife] to pay rent …
If I understand the evidence correctly, the wife lived in the S Street property from early 2019 and remains living there. Other than the payment of $4,600 referred to earlier in these reasons, there is no evidence of what money was paid by the wife towards the mortgage on S Street. The wife was in a position to provide that evidence. She did not.
However, I am satisfied that the wife is not the beneficial owner of the property.
How should the sum of $80,000 received by the wife pursuant to the orders made on 26 May 2021 be characterised?
The evidence which was before the judge on 24 May 2021 was not before me.
Reasons were published and orders made on 26 May 2021.
The application before the Court on 24 May 2021 was the wife’s amended application filed 27 April 2021. Both parties were legally represented by counsel.
In his reasons for judgment, the trial judge stated,
The dispute between the parties is relatively narrow. The wife sought spousal maintenance in the sum of $2,037 weekly. The husband offered to continue to pay the sum of $200 each week. The wife sought an order for lump sum spousal maintenance in the sum of $80,000, with such amount to be paid from the sale proceeds of their jointly owned property at [Suburb C] in Queensland. The husband opposed the making of any lump sum spousal maintenance order, but submitted that if the Court were to make such an order, it should not be characterised as lump sum spousal maintenance, but rather the payment be made on the basis that the characterisation be left to the trial judge. There did not appear to be much contention about this particular issue from the wife's perspective, and an order will be made to reflect this if that is where the Court goes.
The trial judge found that the wife was receiving $200 per week from the husband by way of maintenance and that she had reasonable expenses in excess of $2,000 per week. The trial judge found that the wife had met her living expenses using her credit cards, incurring a debt of $80,000.
The award of $80,000 was specifically said in the reasons to allow the wife to pay off her credit card debts.
In those circumstances, it is reasonable to characterise the payment of $80,000 as a payment of lump sum maintenance.
I turn now to the disputes which arise on the balance sheet. I have already determined Items 2, 3 and 11.
Item 4 – wife’s GG Financial Services Account
This item was not previously disclosed by the wife who said in cross-examination that she didn’t know the money was there. She said that she had emailed the husband with the details as soon as she discovered the funds.
In her trial affidavit, sworn on 28 October 2023, the wife deposed,
Missing from my financial statement. I have $2,900 in a [GG Financial Services] Account. It is not liquid and locked in for 3 years.
In her Case Outline document, the wife concedes that the fund is in US dollars. Applying a conversion rate of 1.55 the funds will be included at $4,495.
There is no evidence to support the husband’s assertion that the amount is $46,656.
The fund will be included in the balance sheet at the amount conceded by the wife.
Item 5 – wife’s M Finance investments
The wife swore a Financial Statement on 13 May 2021. She did not depose to any investment with M Finance other than her interest in superannuation. In her Financial Statement sworn 23 October 2023, the wife did not disclose any investment with M Finance, again other than her superannuation which, in that document, she listed as “[LL Account] from 2007 in the US”.
Documents produced on subpoena disclose that there is an investment in the wife’s name that is agreed to be X’s college fund and both parties agree that this should not be included as property of the wife. For the purpose of this analysis, that fund has been ignored.
The M Finance statement to 30 November 2018 shows that the wife then had two other accounts, referred to as “Single Account” and “[LL Account]”. The Single account had a balance of $53,469 and the LL Account had a balance of $8,704. Under the heading “Value 1 year ago” the value of the Single Account was “nil” and thus I infer that the funds in that account were deposited after 30 November 2017 and before 30 November 2018.
Statements for February 2019, April 2020, November 2020 and June 2022 show the value of the LL Account steadily increasing and the value of the Single Account fluctuating.
The statement for 30 June 2023 shows the LL Account at $12,021 and the Single Account at $81,000.
The statement is addressed to the wife as “Owner” and, in relation to each account, she is named as “Account Holder”.
The wife did not disclose the Single Account. She provided no documents relating to it. In cross-examination, she denied that the Single Account was beneficially hers. If this were so, then the wife bore the onus of proving her assertion.
The only evidence in relation to this issue is from the wife’s father who deposed,
On another note, [the wife and the husband] occasionally consulted my financial adviser. [The wife] transferred her [LL Account] for retirement under this advisement. Separately a stock portfolio originating from my grandmother in the 1920s was intended for future generations. While initially in [the wife’s] name temporarily, the beneficiaries are the great-grandchildren, specifically [X]. Recent challenges, such as my wife’s health concerns, led to some delays in finalizing the account setup, but it’s pertinent to note that [the wife] isn’t a beneficiary.
Since the wife’s father does not identify the funds which he says originated from his grandmother I cannot assume that these are the same funds as those held in the wife’s name in the Single Account. Those funds could not be said to have been in the wife’s name “temporarily” having been deposited in her name in 2017 or 2018. There is no explanation for a deposit of funds to which the wife is not entitled being made to her account. There are no documents to support the assertion that the funds are not owned by the wife.
The amount according to the statement is $US81,000. Applying a conversion rate of 1.55, that amount is $A125,550.
These funds will be included as an asset of the wife.
Item 7 – wife’s motor vehicle
There is no evidence to support the husband’s assertion of value. The vehicle will be included in the balance sheet at the figure conceded by the wife taking into account the loan for the vehicle at item 33.
Item 8 – wife’s NAB shares
These shares were not disclosed by the wife in either of her Financial Statements.
In cross-examination, she said that the shares had been purchased by her for X when X was very small.
They will be included as an asset of the wife.
Item 9 – W Company bank account
There is no evidence that such an account exists.
Item 10 – partial distribution
There is no evidence in support of this assertion.
Item 12 – valuation costs
Orders 10 and 11 made on 1 November 2022 required the husband to nominate three suitable valuers for the Suburb R property and the wife to nominate one. The costs of the valuation were to be equally shared.
I do not propose to add this item to the balance sheet but rather to make orders which will provide for the money to be paid to the husband from any entitlement of the wife.
Items 13- 16 asserted add backs against the husband
There is no evidence in support of any of these assertions.
Item 17 – asserted rent retained by husband
There is no evidence that the husband retained rental payments to which he was not entitled. He was the registered proprietor of the properties and was responsible for the mortgage payments.
Item 18 – asserted money removed from bank account
There is no evidence to support this assertion.
Item 19 – asserted loss of rent
There is no evidence that the husband deliberately left the property or properties vacant.
Items 20 and 21 – furniture
The wife had been living in the USA for some time when the properties were sold. The husband in cross-examination said that he had disposed of such furniture as remained. He sold some items and received a small sum of a few hundred dollars. The remainder was given to charity shops. There is no evidence to support the wife’s assertion that the furniture was worth $13,000.
Item 22 – the wife’s items in storage
The husband deposed that the wife’s personal possessions are stored at his mother’s garage. He has provided the wife, through her then solicitor, with photographs of the stored items but received no response. There is no evidence to support the wife’s assertion of value.
Item 23 –insurance payout
The husband deposed that, in March 2019, the Suburb C property required extensive repairs due to damage. He made representations to the insurer but the claim was not allowed and he did not receive any payment from the insurer. There is no evidence to support the wife’s assertion that he received $200,000.
Item 24 – undisclosed crypto currency
There is no evidence to support the assertion that the husband has undisclosed cryptocurrency.
Items 25 and 26 – asserted failure to pay maintenance and child support.
Documents from the Child Support Agency support the husband’s evidence that he is in credit in relation to child support payments.
Item 27 – the husband’s car
There is no evidence to support the assertion of value. The husband’s evidence was that he could not afford to repair the car so he transferred it to his mother and she repaired it.
Item 28 – car rental
The husband’s evidence is that he uses his mother’s car when he needs a vehicle. In his Financial Statement sworn 20 October 2023, he makes no claim for car rental.
Item 29 – misuse of SMSF
There is no evidence to support this assertion.
Item 30 – husband’s credit card debt
These parties have been separated for four years. There is no evidence that this debt relates to any joint expenditure or is in any way related to the marriage.
This item will not be included in the balance sheet.
Item 31 – loan from husband’s mother
The husband has borrowed from his mother, substantially to pay legal fees. He is entitled to spend funds as he chooses on legal fees but the wife should not bear the consequences of his decisions.
This debt will not be included in the balance sheet.
Item 32 – wife’s credit card debt
The wife’s credit card debts were fully paid from the proceeds of sale of the Suburb C property in September 2021.
She has incurred this debt in the past two years. There is no evidence that this debt relates to any joint expenditure or is in any way related to the marriage.
This debt will not be included in the balance sheet.
Item 34 – wife’s student loan
The student loans were incurred years before the parties met. There is no evidence of the amount owing but the wife’s evidence was that she has been able to defer payment.
There is no evidence that payment is presently required or in what circumstances payment will be required.
This debt will not be included in the balance sheet.
Item 35 – wife’s loan from HH Financial
There is no evidence of when this loan was taken out or for what purpose the funds were used.
This debt will not be included in the balance sheet.
Item 36 – loans from wife’s parents
The wife’s father deposed that her parents lent the wife $163,238 between December 2019 and June 2021. In his affidavit, he set out the amounts advanced and the date of each advance. The advances totalled $US93,500. The figure of $163,238 appears to be after applying an interest rate of 2 per cent and conversion to Australian currency.
In her application to vary the order for spousal maintenance heard on 24 May 2021, the trial judge accepted the wife’s case was that she had been forced to live on her credit cards to pay the difference between her living costs and the amount of maintenance she was receiving and that she had incurred credit card debts of $80,000. The trial judge wrote,
The wife's case was clear. She was not in paid employment and had full-time care of the child. She contended that she had been unemployed and out of the workforce for a long time. She was dependent on credit cards in order to make ends meet, particularly in the circumstances of what she contended was both the limited child support and spousal maintenance paid by the husband.
Later, the trial judge wrote,
The wife's case is that she is basically living off her credit card.
There is no reference, in the reasons for judgement, to the wife’s having borrowed $US93,500 from her parents.
Since there is no evidence about what the wife did with those borrowed funds this debt will not be included in the balance sheet.
Item 37 – unpaid rent
If I understand the evidence correctly, the wife claims to owe her parents $127,075 for unpaid rent on the S Street property, the rent being $US600 per week or $US2,600 per month.
In cross-examination, the wife’s father said that there was no formal rental agreement and no documents but that this was a family arrangement.
There is no evidence that the amount of $US600 per week is a reasonable market rental.
The amount of $127,075 appears to have been reached after applying an interest rate of 2 per cent to the loan and converting the amount to Australian currency.
I am not satisfied that the amount of rent was reasonable or that the debt should be taken into account for the purpose of ascertaining the net asset pool.
Item 38 – loan from wife’s parents for legal fees
This loan will be disregarded on the same basis as the husband’s loan was disregarded.
Item 39 – JJ Financial Services loan
Although the husband agreed that the amount had been lent to the wife, there was no evidence about the purpose of the loan or how the funds were applied.
This debt will not be included in the balance sheet.
Item 41 – wife’s LL Account
This item will be included on the balance sheet at the figure in the statement produced by M Finance of $US12,021. The husband contends for an Australian dollar amount of $18,466 which is slightly less than the figure achieved by applying a conversion rate of 1.55, that is $A18,632.
The LL Account will be included in the balance sheet at the figure for which the husband contends.
Item 42 – wife’s interest in the SMSF
There is no evidence that the wife has such an interest.
Item 43 – life insurance
The husband gave evidence that the SMSF has a life insurance policy over his life. There is no evidence that it has any value.
I therefore find that the assets of the parties, for the purpose of this determination are as follows:
Funds held in trust from the sale of Suburb C $141,031
Wife’s GG Financial Services funds $4,495
Wife’s M Finance funds (excluding LL Account) $125,550
Wife’s car (net value) $4,670
Wife’s NAB shares $882
(1)TOTAL $276,628
I propose to deal with the superannuation assets separately because there are a number of evidentiary difficulties in relation to the SMSF that are not relevant to the non-superannuation assets.
I have assumed that the wife’s LL Account funds should be treated in the same way as a superannuation fund would be treated in Australia although there is no evidence before me about the applicable law in State U.
In relation to the SMSF, the wife seeks a superannuation splitting order whereby she would receive 75 per cent of the husband’s entitlement. The husband opposes this application and wants to keep his entitlement.
It was incumbent upon the wife, who seeks the order, to bring evidence of the following matters:
·If a splitting order is made, and it is necessary to sell the Suburb R property to effect the split, what are the Capital Gains Tax implications of the sale?
·Can an interest in a self-managed superannuation fund be split with a foreign national who is not resident in Australia?
·If a splitting order can be made, is it a requirement that the funds be paid into a complying superannuation fund in Australia?
·If the funds must be paid into a complying fund in Australia, must those funds be retained in the complying fund until the wife attains a condition of release or preservation age?
·If the funds can be released at some earlier time because the wife is resident in the USA, what are the tax implications of the release?
·Does the answer to any of these questions depend on what type of visa was granted to the wife?
The wife brought no evidence in relation to any of these issues.
Absent that evidence, I am unable to make a splitting order and the husband will retain his interest in the superannuation fund.
The husband is 37 years of age. He will not have access to the superannuation interests for many years.
The wife has a small superannuation interest in the USA now worth $18,466. She is 42 years of age. I have assumed that she will also not have access to those funds for many years.
How then, should the non-superannuation assets be divided?
Of the pool of $276,628, the wife has $135,597 in her possession. If the wife receives a further $130,000, she will have received 96% per cent of the non-superannuation pool. From that amount, she must pay the husband $660. The orders will provide that the funds be divided as to $129,340 to the wife and the balance to the husband.
SPOUSAL MAINTENANCE
The wife seeks payment of spousal maintenance in the sum of $2,037 per week for a period of five years.
Section 72 of the Family Law Act 1975 (Cth), (“the Act”) 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 …
The wife has not worked in paid employment since she came to Australia to live with the husband in 2013. Before that time, she worked. In her trial affidavit she deposed that she “gave up her life in [City MM], including work” to move to Australia. Elsewhere in her trial affidavit, she refers to her contributions to the management of the rental properties “leveraging her […] background”.
The wife graduated from NN University in 2005 with a degree. In her resume, linked to her Linkedin profile, she described herself as,
Passionate, tenacious, results-focused professional with substantial senior-level marketing management experience, primarily involving internet marketing, CRM management, corporate website project management, and managing graphic design projects.
In her Linkedin profile published in 2020, she described her experience as follows:
OO Company
Manager
2016 – Present (4 years)
Consultant
Domestic & International Consultant
August 2008 – Present (12 years 5 months)
Her curriculum vitae sets out a history of employment from 1997 to 2013.
She has both skills and experience.
The wife gave no evidence of any attempt to find paid employment. She gave no evidence of any intention to undertake a course of education or training or to establish herself in a business or otherwise to obtain an adequate income from employment.
The parties’ child is seven years old and goes to school. The wife gave no evidence that caring for their child interferes with her ability to work.
In support of her application, the wife tendered a document entitled “Patient Plan”, which appears to have been produced by a general practitioner, dated 16 May 2023 which, under the heading “Problem List”, notes,
[…]
Attention deficit hyperactivity disorder (ADHD) unspecified ADHD type
Mixed anxiety and depressive disorder
[…]
Further, she relied upon an “Outpatient Treatment Progress Report” from PP Health Service dated August 2023 prepared by a social worker which makes reference to her being engaged in weekly therapy for post traumatic stress disorder.
Neither of the documents upon which the wife relied dealt with her fitness for employment. I note that the wife represented herself in the hearing over three days and appeared to competently prepare and handle voluminous tender bundles and otherwise to prepare and manage the documents required for the hearing.
The wife bears the onus of proving that she is unable to support herself adequately. She cannot rely on inadmissible evidence or inferences which may (or may not) be available from business records. As the High Court stated in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170,
The strength of the evidence necessary to establish a fact in issue on the balance of probabilities will vary according to the nature of what is sought to prove.
In this case, the wife is seeking payment of $105,924 per annum for the next five years or a total of $529,620.
Absent expert evidence from a medical specialist, I am not able to find that the wife is unable to work to support herself and her application for spousal maintenance will be dismissed.
If I am in error in that finding, I would nevertheless dismiss the application.
The husband’s income is $1,701 per week. He has fixed expenses, including the current order for child support but excluding spousal maintenance, of $1,022 per week. There was no challenge to his claimed Part N expenses of $852 per week. Therefore his outgoings exceed his income.
Although the wife did not challenge the husband’s expenses, other than the payment of rent to his mother, by way of comparison, the wife’s expenses are very similar to his. Her Part N expenses are claimed to be $863 per week for herself and her fixed expenses (excluding credit card interest and repayments to her parents) are claimed to be $1,166. It cannot therefore be said that the husband’s expenses are unreasonable.
ARREARS OF MAINTENANCE
The wife asserts, but has not proved, that the arrears of maintenance are $114,757. She concedes that the husband paid spousal maintenance of $1,435 per week until September 2022. The husband’s evidence that he advised the wife that his employment had ended on late 2022; that he had been attacked and injured in late 2022 and admitted to hospital and that he was in receipt of a Job Seeker allowance from March 2023 was not challenged.
The husband has no funds to meet any orders for the payment of the asserted arrears and had no funds with which to pay spousal maintenance from November 2022.
The application for payment of arrears will be dismissed and the orders for spousal maintenance will be discharged from the date to which they stand paid.
CHILD SUPPORT DEPARTURE
Although there is no evidence that the Child Support Registrar has been served with the wife’s application, the husband told the court that he had recently spoken with an officer of the Child Support Agency who told him the agency was aware of these proceedings and awaiting the outcome.
The wife seeks an order, pursuant to s 123(1)(a) of the Child Support (Assessment) Act 1989 (Cth) that the husband pay:
·50 per cent of “all tuition fees, application fees, enrolment fees and entrance fees” and
·50 per cent of all “extra curricular fees” and
·50 per cent of all the costs of “the child’s treatment by all medical practitioners” and
·50 per cent of the costs “associated with the child’s current comprehensive health insurance”.
and that such payments not be credited against the husband’s periodic child support liability.
Section 123(1)(a) provides:
123 Application for order under Division
(1) An application may be made to a court having jurisdiction under this Act for:
(a)an order that a liable parent provide child support otherwise than in the form of periodic amounts paid to the carer entitled to child support;
Section 124 provides:
124 Orders for provision of child support otherwise than in form of periodic amounts paid to carer entitled to child support
(1) Where:
(a)a carer entitled to child support or a liable parent makes an application under paragraph 123(1)(a); and
(b) the court is satisfied that it would be:
(i)just and equitable as regards the child, the carer entitled to child support and the liable parent; and
(ii)otherwise proper to make an order that the liable parent provide child support for the child otherwise than in the form of periodic amounts paid to the carer entitled to child support;
the court may make the order.
(2) In determining the application, the court must have regard to:
(a)the administrative assessment in force in relation to the child, the carer entitled to child support and the liable parent; and
(aa)any determination in force under Part 6A (departure determinations) in relation to the child, the carer entitled to child support and the liable parent; and
(b)any order in force under Division 4 (departure orders) in relation to the child, the carer entitled to child support and the liable parent; and
(c)whether the carer entitled to child support is in receipt of an income tested pension, allowance or benefit or, if the carer entitled to child support is not in receipt of such a pension, allowance or benefit, whether the circumstances of the carer are such that, taking into account the effect of the order proposed to be made by the court, the carer would be unable to support himself or herself without an income tested pension, allowance or benefit.
(3)In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make an order under subsection (1), the court must have regard to the matters mentioned in subsections 117(4), (6), (7), (7A) and (8).
(3A)In having regard to the earning capacity of a parent of the child under paragraph 117(4)(da), the court may determine that the parent’s earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied as mentioned in subsection 117(7B).
(4)In determining whether it would be otherwise proper to make an order under subsection (1), the court must have regard to the matters mentioned in subsection 117(5).
The relevant portions of s117 are set out below:
117 Matters as to which court must be satisfied before making order
…
(4)In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:
(a)the nature of the duty of a parent to maintain a child (as stated in section 3); and
(b)the proper needs of the child; and
(c)the income, earning capacity, property and financial resources of the child; and
(d)the income, property and financial resources of each parent who is a party to the proceeding; and
(da)the earning capacity of each parent who is a party to the proceeding; and
(e)the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:
(i) himself or herself; or
(ii)any other child or another person that the person has a duty to maintain; and
(f)the direct and indirect costs incurred by the carer entitled to child support in providing care for the child; and
(g) any hardship that would be caused:
(i) to:
(A) the child; or
(B) the carer entitled to child support;
by the making of, or the refusal to make, the order; and
(ii) to:
(A) the liable parent; or
(B)any other child or another person that the liable parent has a duty to support;
by the making of, or the refusal to make, the order; and
(iii)to any resident child of the parent (see subsection (10)) by the making of, or the refusal to make, the order.
(5)In determining whether it would be otherwise proper to make a particular order under this Division, the court must have regard to:
(a)the nature of the duty of a parent to maintain a child (as stated in section 3) and, in particular, the fact that it is the parents of a child themselves who have the primary duty to maintain the child; and
(b)the effect that the making of the order would have on:
(i)any entitlement of the child, or the carer entitled to child support, to an income tested pension, allowance or benefit; or
(ii)the rate of any income tested pension, allowance or benefit payable to the child or the carer entitled to child support.
Proper needs of the child
(6)In having regard to the proper needs of the child, the court must have regard to:
(a)the manner in which the child is being, and in which the parents expected the child to be, cared for, educated or trained; and
(b) any special needs of the child.
Income, earning capacity, property and financial resources
(7)In having regard to 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 person who does not have a duty to maintain the child, or who has such a duty but is not a party to the proceeding, unless, in the special circumstances of the case, the court considers that it is appropriate to have regard to them; and
(ii)any entitlement of the child or the carer entitled to child support to an income tested pension, allowance or benefit.
(7A)In having regard to the income, property and financial resources of a parent of the child, the court must:
(a)have regard to the capacity of the parent to derive income, including any assets of, under the control of, or held for the benefit of, the parent that do not produce, but are capable of producing, income; and
(b) disregard:
(i)the income, earning capacity, property and financial resources of any person who does not have a duty to maintain the child, or who has such a duty but is not a party to the proceeding, unless, in the special circumstances of the case, the court considers that it is appropriate to have regard to them; and
(ii)any entitlement of the child or the carer entitled to child support to an income tested pension, allowance or benefit.
Direct and indirect costs in providing care
(8)In having regard to the direct and indirect costs incurred by the carer entitled to child support in providing care for the child, the court must have regard to the income and earning capacity foregone by the carer entitled to child support in providing that care.
The wife bears the onus of proving each of those matters.
I will deal first with the requirement that the order sought must be “just and equitable” and “otherwise proper”.
I have already found that the husband’s expenses exceed his income.
The evidence of the wife’s father is that X is the beneficiary of a trust set up by her great grandmother. There is no evidence of the terms of the trust, when the trust will vest, whether funds are available from the trust for X’s care, how many beneficiaries there are or the amount of funds in the trust.
All of those matters could and should have been disclosed by the wife in circumstances where the provisions of s 117(4)(c) of the Child Support (Assessment) Act requires the Court to consider the income, earning capacity, property and financial resources of the child.
In those circumstances, I am unable to find that it is just and equitable or otherwise proper to make the orders sought by the wife.
I certify that the preceding one hundred and seventy-six (176) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rees. Associate:
Dated: 13 November 2023
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