MAGNUS & MAGNUS

[2015] FamCA 429

FAMILY COURT OF AUSTRALIA

MAGNUS & MAGNUS [2015] FamCA 429

FAMILY LAW – PROPERTY – INTERIM PROCEEDINGS – Where the wife sought a number of interim orders including a payment of $100, 000, spouse maintenance and adult child maintenance – Where the husband concedes the wife has a need for spouse maintenance – Whether the husband has the capacity to continue to pay spouse maintenance – Where the husband seeks an immediate sale of the former matrimonial home – Where the court finds the husband has the capacity to continue to pay spouse maintenance until a sale of the former matrimonial home – Where the wife concedes the need for a sale – Where no submissions are made by the wife as to the source of the $100, 000 payment sought – Where the husband cannot afford to make such a payment and a sale is now imminent – Where the wife cannot satisfy the court that an adult child maintenance order is necessary – No adult child maintenance order made – Orders made pending further order for a sale of the former matrimonial home and for spouse maintenance to the wife.

FAMILY LAW PROPERTY – CHILD SUPPORT– Where both parties seek a child support departure order – Where the court is not prepared to make such order at this point in the proceedings – Orders made varying the administrative assessment.

Family Law Act 1975 (Cth) s 66L, s 72

APPLICANT: Ms Magnus

RESPONDENT: Mr Magnus

FILE NUMBER: SYC 8140 of 2014

DATE DELIVERED: 4 June 2015

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Justice Stevenson

HEARING DATE: 27 May 2015

REPRESENTATION

SENIOR COUNSEL FOR THE APPLICANT: Mr Lloyd SC

SOLICITOR FOR THE APPLICANT: Newnhams Solicitors

COUNSEL FOR THE RESPONDENT: Mr Sansom

SOLICITOR FOR THE RESPONDENT: Watts McCray Lawyers

Orders pending further order

1. That each party do all acts and things and sign all documents necessary to effect the sale of the former matrimonial home situated at and known as B Street, Suburb C in the state of New South Wales (“the Suburb C property”) for sale by public auction, with a real estate agent agreed between the parties, at a price agreed between the parties, or failing agreement then as determined by the President of the New South Wales Division of the Real Estate Institute of Australia, as an expert not as an arbitrator.

2. That the proceeds of the sale of the Suburb C property be applied as set out in the following manner:

   (a)In payment of agent’s commission and advertising expenses and legal expenses on the sale;

   (b)In payment of the costs incurred in relation to the nomination of the agent, in payment of costs incurred in relation to the nomination of a Solicitor and in payment of costs in relation to determination of value or selling price by the President of the New South Wales division of the Australian Property Institute or his or her nominee;

   (c)In payment of such sum as is required to discharge the mortgages secured on title; and

   (d)In payment of the balance to the parties’ solicitors, who will lodge these funds in a controlled monies account pending further order of the court or the written direction of the parties.

Child Support

1. That the administrative assessment of child support for the children

   
   

   D born … 2000 (“D”) and E born … 2003 (“E”) (collectively referred to as “the children”) be varied such that the husband shall pay or cause to be paid by way of non-periodic child support for the children on or before the date upon which those expenses fall due for payment, the following:

   (a)100 per cent of D’s F School tuition fees, levies and education-related costs and expenses as invoiced by F School, including school uniforms and excursion costs, or at such other non-government school as the parties may agree that D attends, from the date of these Orders until D completes her high school education;

   (b)100 per cent of E’s F School tuition fees, levies and education-related costs and expenses as invoiced by F School, including school uniforms and excursion costs, or at such other non-government school as the parties may agree that E attends, from the date of these Orders until E completes her high school education; and

   (c)100 per cent of D’s and 100 per cent of E’s private health insurance premiums, at the current rate of cover with Bupa Health Fund, or such other fund as the parties may agree.

2. That the child support payable by the husband pursuant to Order 3 herein:

   (a)Is to be credited against the husband’s liability under any administrative assessment of child support payable by the husband to the wife for the period until the happening of a child support terminating event in respect of each of the children; and

   (b)Is to count for 100 per cent of the annual rate of child support payable by the husband under any administrative assessment of child support payable by the husband to the wife for the period until the happening of a child support terminating event in respect of each of the children.

Spouse maintenance

1. That the husband shall pay or cause to be paid:

   (a)Repayments due in respect of the loan secured by way of mortgage over B Street, Suburb C in the state of New South Wales (“the Suburb C property”);

   (b)Council and water rates in respect of the Suburb C property;

   (c)J Pty Ltd house insurance premiums in respect of the Suburb C property;

   (d)Electricity and gas accounts in respect of the Suburb C property;

   (e)NRMA contents insurance premiums in respect of the Suburb C property;

   (f)BT Trauma insurance premiums due on the wife’s behalf;

   (g)NRMA comprehensive motor vehicle insurance premiums in respect of the German motor vehicle driven by the wife;

   (h)Motor vehicle registration fees charged in respect of the German motor vehicle drive by the wife;

   (i)The hire purchase / lease payments in respect of the German motor vehicle driven by the wife; and

   (j)The sum of $1,000 per week to the wife.

2. That the husband have liberty to apply to vary these orders in the event of a significant change in his financial circumstances, including but not limited to a redundancy.

3. That, otherwise, the competing applications for interim orders are dismissed.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC8140 of 2014

Ms Magnus

Applicant

And

Mr Magnus

Respondent

REASONS FOR JUDGMENT

The Proceedings

1. By a Further Amended Initiating Application filed on 22 May 2015 the wife, Mrs Ms Magnus, sought a raft of interim orders which may be summarised as follows:

   1.that the wife have exclusive occupation of the former matrimonial home at B Street, Suburb C (“the Suburb C property”);

   2.that the husband pay by way of spouse maintenance a sum of $1,183 per week, plus all outgoings in respect of the Suburb C property, health insurance premiums and medical expenses for the wife;

   3.that the husband make a German motor vehicle available for the wife’s exclusive use and that he pay all associated outgoings;

   4.that the husband pay the wife’s rent and/or hotel expenses pending her reoccupation of the Suburb C property;

   5.that there be a Child Support Departure order such that the husband pay $647 per week for each of the parties’ two minor children, together with all private school fees and expenses and their health costs;

   6.that the husband pay maintenance for the parties’ adult daughter Ms G in a sum of $484 per week, together with her tertiary education fees and expenses and all health costs;

   7.that the husband be restrained from dealing with funds he may receive by way of bonus payments from J Pty Ltd Bank; and

   8.that the husband provide to the wife copies of certain specified bank statements.

2. By an Amended Response to Initiating Application filed on 1 May 2015 the husband, Mr Magnus, sought interim orders which may be summarised as follows:

   1.that the parties forthwith effect the sale of the Suburb C property and that the wife receive, as a partial property settlement, the sum of $2  million which is to be applied solely to the purchase of a home;

   2.that there be a Child Support Departure order such that the husband pay a sum of $200 per week for each of the two minor children, together with private school fees and expenses and the children’s health insurance premiums; and

   3.that the husband pay by way of spouse maintenance all J Pty Ltd Bank mortgage instalments, rates, insurance premiums, electricity and gas costs, motor vehicle insurance, registration and lease fees and trauma insurance premiums in respect of the wife.

3. During the interim hearing, counsel for the wife confirmed that she now accepts that she cannot sustain her application that she retain the Suburb C property as a component of a final settlement.  It thus became common ground that there will be a sale of the property, although there remained an issue as to the timing thereof.  Counsel for the wife conceded that the interim orders which she sought should remain in force only until the sale of the former matrimonial home.

4. Counsel for the husband conceded that the wife has a need for spouse maintenance for the purposes of section 72 of the Family Law Act.  The issue in relation to spouse maintenance is thus the husband’s capacity to pay and the proper quantum of any interim order.

Background

1. The husband and the wife are both aged 50.  They married in 1992 and separated finally on 14 October 2014.  They are the parents of three children:

   ·Ms G born in 1995 (20);

   ·D born in 2000 (14); and

   ·E born in 2003 (11).

   The children have lived with the wife since the parties’ separation.

2. In June 2013 the parties purchased the property B Street, Suburb C (“the Suburb C property”) at a price of $3.5 million.  They borrowed $85,000 from the J Pty Ltd Bank but discharged this debt when they sold a property at Suburb H in November 2013.

3. In May 2014 the parties commenced substantial renovations to the Suburb C property.  According to the husband the budgeted cost of these works was $750,000, which was available from the proceeds of sale of the Suburb H property.  The parties have since borrowed funds from J Pty Ltd Bank to finance the renovations.  The current mortgage balance is some $817,000 and there remains available from the redraw facility approximately $483,000.

4. The Suburb C property was uninhabitable during the renovation period and the family lived in rented accommodation.  Certain work must be completed before I Council will issue the relevant certificates.  Counsel for the wife informed the court that this work will be completed in late September / early October 2015 and that the property should then be listed for sale.

5. The husband has a history of highly-paid employment.  In July 2010 he began work with J Pty Ltd.  He was informed by letter dated 21 May 2015 that his present position had become redundant.  He was afforded four weeks to attempt to secure another position within the J Pty Ltd Group.  As at the date of the interim hearing the husband was unaware of the outcome of his application for employment within J Pty Ltd (Exhibit 2).  He was also unaware of the nature of the redundancy package which he will receive if he fails to secure an alternate position.

6. The wife has not held paid employment since approximately 1992.  There was no evidence that she has attempted to re-enter the workforce since the separation.

Interim Spouse Maintenance

1. As noted, there was a concession on behalf of the husband that the wife is unable to support herself adequately for the purposes of section 72 of the Family Law Act.  The remaining issue thus is the husband’s capacity to contribute to the financial support of the wife, pending sale of the former matrimonial home.

2. The husband deposed that he receives a gross annual base salary of $348,624, which equates to $6,704 per week.  There can be no guarantee that any new employment which he may secure will generate a comparable level of income.

3. The husband has received annual bonuses from J Pty Ltd in the form of cash and shares in each of the years 2010 to 2014.  These bonuses have been paid in November / December each year and attract income tax at the top marginal rate.  There was no evidence as to what amount, if any, the husband may receive by way of a bonus in 2015.

4. In his affidavit of 21 May 2015 the husband deposed that he has about $132,490 in savings.  From these funds he must pay a tax debt of around $76,000, which arose from the sale of J Pty Ltd shares.  The balance will thus be approximately $48,000.  The husband deposed further that there will be approximately $298,506 available from the mortgage redraw facility, after pending payments to a builder and architect.

5. The husband must pay the following fixed weekly expenses:

($)
1.	Income tax	2,823
2.	Mortgage instalments	1,000
Total	$3,823

From the balance of $2,881 the husband must meet all of his remaining expenses, including the cost of accommodation for himself.

1. The husband agreed that he will continue to meet the following expenses:

($)
1.	School fees and expenses ($1100 x 2)		2,200
2.	Private health insurance		80
3.	Home and contents insurance		79
4.	Council and water rates		93
5.	Electricity and gas		180
6.	Trauma insurance for the wife		30
7.	Lease payments, registration and insurance in respect of the wife’s car		323
Total	$2,985

After payment of these expenses, income tax and mortgage instalments the husband has a shortfall of income over outgoings of some $104 per week.

1. The husband deposed that he has been able to meet his expenses, including payments for the benefit of the wife and children, only by resort to cash bonuses and the proceeds of sale of J Pty Ltd shares.  It seems to me that the parties have no option but to draw on the husband’s savings and the mortgage account to fund their separate households until the sale of the former matrimonial home.

2. I accept that the wife has a need for cash to meet her day-to-day living costs, which are additional to the expenses which the husband has been paying on a voluntary basis. It seems to me that the only source of such funds is the mortgage redraw facility. My somewhat arbitrary assessment of an appropriate amount is $1,000 per week, which will be sourced from the mortgage account if necessary.  Otherwise, I will make orders for spouse maintenance as sought by the husband.

Interim Child Support Departure

1. The wife sought that the husband pay the following amounts by way of child support for D and E:

($)
1.	Cash		1,294
2.	School fees and expenses		2,200
3.	Health insurance		80
Total	$3,574

She also sought that he pay all gap medical expenses for the children and the total cost of their extracurricular activities.

1. As noted, the husband agreed that he will continue to pay school fees and expenses, as well as private health insurance for the children.  The nub of this dispute would thus appear to be the cash component of child support, with the husband seeking to pay $200 per week per child and the wife requiring a sum of $647.

2. It thus appeared to be common ground that there should be a child support departure order. For reasons which appear below, however, I am not persuaded that there should be a departure order at this stage of the proceedings other than so as to acknowledge the husband’s ongoing payment of the children’s educational expenses and private health insurance. Accordingly, I will not determine whether either or both of the parties have satisfied the requirements of section 117 of the Child Support (Assessment) Act 1989.

3. Firstly, there was no evidence that the wife has applied for an administrative review, thus utilising the tools available to the Child Support Agency to deal with this very issue.  The husband’s financial situation is highly likely to change in the near future, due to the restructure of his employment arrangements or impending redundancy.  The child support situation may then require reconsideration and, in my view, it is premature at this stage that the court interfere with the administrative arrangements which are currently in place.

Interim adult child maintenance

1. The wife seeks that, in addition to all of the other payments she requires of the husband, that he provide maintenance for their adult daughter Ms G in the sum of $484 per week, together with the whole of the costs of her first university degree and all medical expenses.  The wife adduced no evidence from Ms G, nor offered any explanation why the parties’ daughter is not herself the applicant.

2. Section 66L of the Family Law Act provides as follows:

   SECTION 66L CHILDREN WHO ARE 18 OR OVER

   66L(1)  A court must not make a child maintenance order in relation to a child who is 18 or over unless the court is satisfied that the provision of the maintenance is necessary:

   (a)to enable the child to complete his or her education; or

   (b)because of a mental or physical disability of the child.

   The court may make such a child maintenance order, in relation to a child who is 17, to take effect when or after the child turns 18.

   66L(2)  A court must not make a child maintenance order in relation to a child that extends beyond the day on which the child will turn 18 unless the court is satisfied that the provision of the maintenance beyond that day is necessary:

   (a)to enable the child to complete his or her education; or

   (b)because of a mental or physical disability of the child.

   66L(3)  A child maintenance order in relation to a child stops being in force when the child turns 18 unless the order is expressed to continue in force after them.

3. The wife adduced no admissible evidence to the effect that provision of maintenance for Ms G is necessary because she suffers from a disability.  I have difficulty in accepting that Ms G suffers from such a disability in circumstances where she spent the period December 2014 to April 2015 in the United Kingdom independently of either of her parents.  According to the husband she funded this trip with savings of $2,000 from her employment and a gift of $1,000 from her grandparents.  The husband deposed that he provided Ms G with $450, the cost of her travel insurance, and his American Express card.  The wife maintained that her parents loaned Ms G $7,000 for this trip and the husband provided $500 and the airfares.  The wife deposed that she provided a total amount of $1,200 to Ms G in February and March 2015.

4. Whatever may have been the funding arrangements, it is clear that both parties were content for Ms G to travel alone to England and remain in that country for some five months.  In these circumstances, I have difficulty in accepting that she suffers from a mental or physical disability which warrants an order for adult child maintenance.

5. It was common ground that Ms G commenced a nursing degree in 2015.  There was no evidence as to the precise costs of this degree.  There was no evidence to support an inference that the husband is unwilling to provide financial assistance to Ms G to enable her to pursue her studies on a voluntary basis.

6. It seemed to me that the wife failed to make out her case for an order for adult child maintenance.  I will dismiss this aspect of her application.

Payment by the husband to the wife of a sum of $100,000

1. The wife sought an order that the husband pay to her a sum of $100,000.  No submission was put on her behalf as to the source of any such payment.  It could be inferred that this money could be sourced from the husband’s savings or the mortgage redraw facility.

1. As noted, however, the husband must pay tax of approximately $76,000 from his savings of $132,490.  Accordingly, in reality he does not have available a sum of $100,000 to make such a payment to the wife.  With an imminent sale of the Suburb C property and the husband’s proposal that the wife immediately receive a significant portion of the sale proceeds, I am not persuaded that such a sum should now be drawn down on the mortgage facility.

2. At the same time, I see no reason why the wife and the children should not avail themselves of accommodation of the Suburb C property pending its sale.  In my view, it is a matter for the parties to negotiate the best arrangements for the liquidation of their major asset.

3. I am not prepared to make an order that the husband pay rent or hotel costs, pending her re-occupation of the Suburb C property, for two reasons.  Firstly, there is a limit to the funds available to the husband.  Secondly, on 17 September 2014, each of the parties withdrew a sum of $100,000 from a joint bank account.  The wife had depleted her drawings by the time she swore her affidavit on 22 May 2015.

4. I am not prepared to make an order which restrains the husband from dealing with any cash or shares which he may receive by way of a bonus from J Pty Ltd.  As noted, he has been able to sustain the payments which he has made voluntarily to finance two households only by resort in part to money generated by bonuses.  I have no reason to suppose that this course of action will not be necessary to enable the husband to comply with my orders.

5. I will not make the order sought by the wife in relation to provision by the husband of bank statements.  The Family Law Rules make adequate provision for discovery.

Other Issues

1. The husband sought orders which would bring about an immediate sale of the Suburb C property.  The wife proposed that the remaining renovation work be completed before the property is placed on the market and that she have exclusive occupation pending the completion of the sale.

2. There was no evidence which satisfies me that there is any advantage to the parties in a delay of the sale of the Suburb C property.  I would imagine that any issues of compliance with council regulations would be a matter for negotiation between conveyancing solicitors.  I see no reason to deprive the husband of access to the property pending its sale.  He has established independent accommodation but has a legitimate interest in accessing the property so as to ensure that the renovations are completed properly.

I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Stevenson delivered on 4 June 2015.

Associate:

Date:  4 June 2015