Parkes & Parkes
[2024] FedCFamC2F 784
•28 June 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Parkes & Parkes [2024] FedCFamC2F 784
File number(s): LNC 167 of 2023 Judgment of: JUDGE TURNBULL Date of judgment: 28 June 2024 Catchwords: FAMILY LAW – PROPERTY – superannuation split agreed – contributions to non-superannuation pool agreed as equal – extent of adjustment to the Wife for s 79(4)(d)-(g) factors – SPOUSAL MAINTENANCE – whether spousal maintenance should be paid to the Wife as a lump sum if ordered. Legislation: Evidence Act 1995 (Cth)
Family Law Act 1975 (Cth)
Cases cited:
Beck & Beck (No 2) (1983) FLC 91-318
Best and Best (1993) FLC 92-418
Briginshaw v Briginshaw (1938) 60 CLR 336
Cabbell & Cabbell [2009] FamCAFC 205
Carson & Hillman [2019] FamCAFC 42
Clauson & Clauson (1995) FLC 92-595
Collins and Collins (1990) FLC 92-149
Dawes & Dawes [1989] FamCA 71
Dovgan & Dovgan [2021] FamCA 306
Elder v Elder [2009] FamCAFC 224
Engelbrecht & Moss [2015] FCWA 19
Figgins & Figgins [2002] FamCA 688
Gadhavi & Gadhavi [2023] FedCFamC1A 117
Garston & Yeo (No 2) [2019] FamCAFC 139
Grier & Malphas [2016] FamCAFC 84
Habib and Habib [1988] FamCA 40
Hall v Hall [2016] HCA 23
Hickey & Hickey & Hickey [2003] FamCA 395
InMitchell & Mitchell (1995) FLC 92-601
In the Marriage of Bevan & Bevan (1995) FLC 92-60
In the Marriage of Napthali (1988) 13 Fam LR 146
Jabara & Gaber [2021] FedCFamC1A 26
Jabour & Jabour [2019] FamCAFC 78
Jacobson & Jacobson (1989) FLC 92-003
Kajewski T.G. & Kajewski B. [1978] FamCA 62
Line & Line (1997) FLC 92-729
Lotta & Lotta [2017] FamCA 50
Mallet & Mallet (1984) 156 CLR 605
Maroney & Maroney [2009] FamCAFC 45
Phillips & Phillips [2002] FamCA 350
Pierce v Pierce (1999) FLC 92
Qin & Donato [2023] FedCFamC1A 223
Seitzinger & Seitzinger (2014) FLC 93-626
Sigley & Cullen (No 3) [2015] FamCA 825
Stanford & Stanford (2012) 247 CLR 108
Teal & Teal [2010] FamCAFC 120
Telfer & Telfer [2016] FCWA 2
Waters & Jurek (1995) 126 FLR 311
Division: Division 2 Family Law Number of paragraphs: 111 Date of last submission/s: 7 March 2024 Date of hearing: 5 & 7 March 2024 Place: Launceston and Hobart - by Microsoft Teams (MS) Counsel for the Applicant: Mr M Trezise Solicitor for the Applicant: McVeity Dean Counsel for the Respondent: Mr G Williams Solicitor for the Respondent: Glynn Williams Legal ORDERS
LNC 167 of 2023 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS PARKES
Wife
AND: MR PARKES
Respondent
ORDER MADE BY:
JUDGE TURNBULL
DATE OF ORDER:
28 JUNE 2024
THE COURT ORDERS THAT:
1.The Wife relinquish to the Husband all of her right, title and interest in the property situate and known as B Street, Town C in Tasmania, and the Husband will indemnify the Wife in relation to all debts, loans and liabilities relating to the said property.
2.Both the Husband and the Wife do all things, sign all documents, provide all necessary authorities, and undertake all actions necessary to have the net sale proceeds of the now sold Town D property (‘the Town D Funds’) distributed as follows:
(a)$340,410.25 to the Wife.
(b)$25,251.75 to the Husband.
(c)any balance be divided 75% to the Wife and 25% to the Husband.
3.For the purpose of implementing paragraph 2 of this Order, the parties have leave to provide a copy of this Order to the person or entity holding the Town D Funds.
4.The Husband transfer to the Wife all of his right, title and interest in Motor Vehicle 1 and the Wife will indemnify the Husband in relation to all debts, loans and liabilities relating to the same.
5.The Wife transfer to the Husband all her right, title and interest in Motor Vehicle 2 and Motor Vehicle 3 and the Husband will indemnify the Wife in relation to all debts, loans and liabilities relating to the same.
6.In relation to the Husband's superannuation with Super Fund 1, account number …, of which E Pty Ltd is Trustee ("the said fund"):
(a)it is declared that this Order is made in accordance with Section 90XT(1) of the Family Law Act ("the Act");
(b)for the purposes of Section 90XT(4) of the Act the amount of one hundred and four thousand, six hundred Dollars ($104,600) is specified as the base amount being the entitlement of the Wife in relation to the superannuation held by the Husband with the said fund;
(c)for the purpose of these Orders the operative time shall be four (4) business days after service of these Orders upon E Pty Ltd as Trustee of the said fund;
(d)for the purposes of Section 90XT(1)(a) of the Act whenever a splittable payment becomes payable:
(i)from the interest of the Husband in the said fund the Wife shall be entitled to the base amount pursuant to these Orders as adjusted by the Trustee of the superannuation fund in accordance with the provisions of Division 6.1A of the Family Law (Superannuation) Regulations 2001; and
(ii)the Trustee of the said fund shall reduce the entitlement of the Husband in the said fund accordingly.
(e)until the Trustee of the said fund has effected the splitable payment in favour of the Wife pursuant to sub-paragraph (d) hereof, the Trustee of the said fund, the Husband, his personal legal representative, and any person or persons acting on his or their behalf, be and are hereby restrained from disposing of all or any amount payable to the Husband and/or his personal legal representative, received by or held in trust for or to the benefit of him or them.
7.Within seven (7) days of the date of this Order the Wife effect personal service of a sealed copy of these Orders upon the Trustee of the said fund with a request that they proceed to effect the splitable payment in favour of the Wife pursuant to Order 6(b) and 6(d) of this Order.
8.Having been accorded procedural fairness in relation to the making of this Order, the Order binds the Trustee of Super Fund 1.
9.In all other respects, each of the parties be solely entitled to the exclusion of the other to all property in that party’s possession or control as at the date of this Order including, but not limited to, personalty and chattels, motor vehicles, balances of bank accounts and superannuation or pension entitlements.
10.Each party be solely responsible for and indemnify the other in respect of all and any liabilities attaching to any of the assets to be retained by that party pursuant to these Orders and liabilities incurred by that party since separation in that party’s name alone.
11.Each Party must do all things necessary including, but not limited to, signing all documents and provide all consents necessary to give effect to this Order in the time periods prescribed in this Order.
12.Both parties have liberty to apply in relation to the implementation of the terms of this Order.
13.The Wife’s application for spousal maintenance is dismissed.
14.All extant property applications are dismissed.
THE COURT NOTES THAT
A.That pursuant to section 81 of the Family Law Act 1975 the parties intend that these Orders shall as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.
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).
Part XIVB of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish an account of proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to subsection 114Q(2) of the Family Law Act 1975 (Cth)
REASONS FOR JUDGMENT
JUDGE TURNBULL
Overview
These are property and spousal maintenance proceedings concerning Ms Parkes (‘the Wife’) and Mr Parkes (‘the Husband’). The Husband is employed as a labourer for F Pty Ltd. The Wife is casually employed as an allied health worker with G Company.
The parties have two children — X, born in 2007 (aged 17) and Y, born in 2013 (aged 11). The Husband has spent little time with the children since separation.
These proceedings were initiated by the Wife on 17 March 2023. The trial commenced on 5 March 2024 and ran over two days with the decision reserved on 7 March 2024.
By the outset of the trial, the parties had agreed upon the assets they would each keep and the makeup of the balance sheet. They also agreed that their respective contributions during the relationship — s 79(a)-(c) of the Family Law Act 1975 (Cth) (‘the Act’)[1] — should be regarded as equal[2] and that there should be a superannuation splitting order favouring the Wife in the amount of $104,600.
[1] Family Law Act 1975 (Cth) (‘FLA’).
[2] Mr Williams, for the Husband, seemed to withdraw this concession — made in his case outline — momentarily during closing submissions. In his Written Submissions provided at closing, he stated ‘Contributions were equal during the marriage but unequal with property created (Motor Vehicle 1 of wife and [Town C] house) arising out of the husband's income, which has distorted the pool.’ This submission ignored the contributions the Wife had made as the sole carer of the children post separation. Mr Williams took instructions and then conceded during final oral submissions that the parties pre and post separation contributions should be regarded as equal.
This left for determination:
(a)the extent of the adjustment to the Wife for s 79(4)(d)–(g) including s 75(2) factors, and the overall determination of a just and equitable property division of the parties’ non-superannuation assets; and
(b)whether the Husband should pay the Wife spousal maintenance and if so, whether such maintenance should be capitalised.
Brief History
The parties commenced cohabitation in 2006. They were married in 2015. The children were born in 2007 and 2013.
In mid-2020, the parties purchased a property at Town D. This purchase followed the sale of properties that they had owned at Town C and Town H.
The parties separated on 21 November 2021. The Wife has been the primary carer of the children since that time.
In mid-2023 the Husband re-purchased the Town C property for $400,000, financed with a mortgage of $353,800.
In late 2023 the parties completed the sale of the Town D property netting the sum of $366,662 (‘the Town D Funds’).
The Trial commenced on 5 March 2024.
Evidence
The Wife relied upon:
·her Amended Initiating Application filed 21 August 2023;
·her Amended Financial Statement filed 26 February 2024;
·her Trial Affidavit filed 26 February 2024;
·her Case Outline filed 4 March 2024; and
·Exhibit J1.
The Husband relied upon:
·his Response filed 2 June 2023;
·his Trial Affidavit filed 28 February 2024;
·his Financial Statement filed 29 February 2024;
·his Case outline (emailed on 5 March 2024);
·his Written Submissions dated 7 March 2024; and
·Exhibit J1.
The Wife was cross-examined, answering questions in a clear and concise manner. She was challenged in relation to the reasonableness of her weekly expenditure and her ability to earn a greater income — I found her to be a credible witness.
The Husband was not cross-examined. In his written submissions, Mr Williams suggested that this created an unfairness for the Husband:
7. … With the length of Affidavits curtailed by Orders of the Court, it had not been expected that there would be no cross examination. Cross examination has, in the experience of this counsel, occurred in every single property hearing that counsel has been in since first family law matter in 1998… [3]
[3] Written Submissions of Mr Parkes dated 7 March 2024 (‘Husband’s Written Submissions’).
This submission was misconceived. Given the narrow dispute at trial, there was a strong possibility that neither party would cross-examine the other. That possibility was noted at paragraph 4 of the Order made 23 February 2024.[4] The Husband was not caught ‘off guard’ when he was not cross-examined and there is no requirement for a witness to be cross-examined in any event.
[4] Orders of J Turnbull in Parkes & Parkes (Federal Circuit and Family Court Division 2, LNC167/2023, 23 February 2024).
Standard of Proof
I note briefly, before continuing, that all facts in issue in these proceedings must be proved on the balance of probabilities. A fact in issue is 'proved' if I am reasonably satisfied, on the evidence, that it is more likely than not that the fact existed or occurred in the manner ultimately determined.
The Evidence Act 1995 (Cth) sets out the applicable standard:
140 Civil proceedings: standard of proof
In a civil proceeding, the court must find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities.
Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account:
(a) the nature of the cause of action or defence; and
(b) the nature of the subject‑matter of the proceeding; and
(c) the gravity of the matters alleged. [5]
[5] Evidence Act 1995 (Cth) s 140 (‘EA’).
Dixon J, as he then was, also remarked upon the standard of proof for civil proceedings in Briginshaw v Briginshaw (1938) 60 CLR 336, which remain relevant and authoritative:
The truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality. No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal.[6]
[6] Briginshaw v Briginshaw (1938) 60 CLR 336.
I must ground my assessment of the issues in dispute in facts, of which I am persuaded, on the balance of probabilities.
The Parties’ Submissions
The Wife
Mr Trezise, Counsel for the Wife, submitted that there should be an adjustment to the Wife of no less than 20% for s 75(2) factors — although it was also open for the Court to make a higher adjustment — resulting in an overall adjustment of at least 70% to the Wife. He emphasised the significant income disparity between the Husband and the Wife in circumstances where the Wife has full-time responsibility and care for the children — one of whom is only 11 years of age. Mr Trezise rejected any contention that the Wife was able to earn a greater income.
A 70% adjustment to the Wife would result in her receiving net assets worth $364,382.90 of the agreed asset pool.[7] This can be achieved by her retaining the assets under her control[8] and a cash payment of $314,382.90 from the monies held in trust ($365,662).
[7] Exhibit J1 as extracted at paragraph 32 of these Reasons.
[8] Motor Vehicle 1 and the Town D contents with a net value of $50,000.
Regarding spousal maintenance, Mr Trezise submitted that the Wife established a need for the same due her responsibility to care for the children, which impedes her ability to increase her income. He submitted that her personal expenses exceed her income (excluding child support) markedly. Her shortfall amounts to $485 per week. The Husband’s income, by contrast, exceeds his reasonable expenses, such that he has the capacity to meet the Wife’s shortfall.[9]
[9] Outline of Case of Ms Parkes filed 4 March 2024, 7-8 (‘Wife’s Case Outline’).
Mr Trezise submitted that it would be appropriate, in the circumstances of this case, for the Husband’s spousal maintenance obligation to be capitalized with a payment of $40,000. This discounts the periodic amount the Husband would have to pay to $385 per week for two years. This lump sum payment could be met by paying to the Wife most of the balance of the monies held in trust, after the payment to her of a cash amount to meet her property order entitlement.[10]
[10] Ibid 8.
Mr Trezise accepted that the effect of his submissions was that a just and equitable outcome could only be achieved with the Wife receiving the majority, if not all, of the monies held in trust — whether it be via a s 79 adjustment alone or with an additional payment of lump sum spousal maintenance.
The Husband
Mr Williams, Counsel for the Husband, submitted that a 10%–20% adjustment for s 75(2) and other factors was appropriate in the circumstances of this case. Mr Williams acknowledged that the Wife does have the primary care of the children and there is an income disparity but submitted that any adjustment greater than 10%–20% would exceed any reasonable exercise of the Court’s discretion. At 60%, the Wife would be entitled to $312,328.20 of the net assets. This would see a cash payment to her from the monies in trust of $262,328.20.
In relation to spousal maintenance, Mr Williams submitted that the Wife has not established that she has a need for the same with reference to the matters set out in s 72 of the Act.
Mr Williams submitted that the Wife could earn a greater income as she chooses only to work on a casual basis for 15 to 25 hours per week.[11] If she availed herself of childcare, she could work longer hours and earn enough income to meet her necessary expenses. Further, the Wife has shown an ability to meet her current expenses with her available income, including child support payments. He submitted:
54. Hers is an unstressed life of streaming services, label clothing and casual work, all the while she has produced no evidence of lack of support but that ‘I have no support network”. The claim does not withstand scrutiny. She has her network and [X] is well able to care for [Y] as a 17-year-old, she deposes to no disability impairing the children. She even pays for an app so that she can track them, as revealed in cross-examination. The Wife has already found a way to pay for what she seeks, it is just that she seeks more.[12]
[11] Husband’s Written Submissions (n 3) [57].
[12] Ibid [54].
Mr Williams also emphasised that the Court should not consider the question of spousal maintenance without also considering the significant property adjustment that the Wife will receive — whether it be 60%, 65% or 70%.[13]
[13] Ibid 14 [C], [F].
He submitted that Mr Trezise’s assumptions about the Husband’s income and expenditure were incorrect and that the evidence does not support a conclusion that the Husband has capacity to make a periodic spousal maintenance, let alone a payment of $485 per week — even if the Wife establishes a need. Importantly, the Husband’s obligation to pay outstanding and future tax had not been factored into Mr Trezise’s calculations. He submitted that the Husband makes a significant payment of child support to the Wife, and, after the payment of tax and other stated expenses, he has little money left. Finally, he submitted that there is no basis for the capitalisation of maintenance if periodic support is ordered.
Property adjustment: the Law
Property proceedings under Part VIII and the approach in Hickey and Stanford
Part VIII of the Act governs the scope of the Court’s power with respect to property and financial matters. The Court’s powers under s 79(1) — as ‘very wide discretion[s]’ — must be exercised according to principled reason,[14] and are constrained by a number of factors to which the Court must direct itself.[15] To this end, a typical approach is that set out in Hickey & Hickey & Hickey [2003] FamCA 395 and Stanford & Stanford (2012) 247 CLR 108,[16] comprising four steps:
(1)identify the parties’ existing legal and equitable property interests, liabilities, and financial resources at the time of trial, and then determine whether it is just and equitable to adjust their interests pursuant to s 79(1);[17]
(2)consider the parties’ contributions under s 79(4)(a)–(c);
(3)consider the factors under s 79(4)(d)–(g) including, by virtue of s 79(4)(e), the ‘subjective considerations’ under s 75(2) insofar as they are relevant;[18] and then
(4)‘stand back’ to consider the justice and equity of the actual terms of order proposed to be made.[19]
[14] Stanford & Stanford (2012) 247 CLR 108, 122 [41] (‘Stanford’).
[15] Mallet & Mallet (1984) 156 CLR 605, 608 (Gibbs CJ), noting that the ‘very wide discretion to make such order as [the Court] thinks fit’ is conferred only ‘when [the Court] is satisfied that it is just and equitable that an order should be made’, with his Honour further stating that ‘there are some broad principles to which the Court is required to give effect, and some circumstances which it is required to take into account’ in making an order, and with Dawson J (at 647) referring to the just and equitable requirement as the ‘overriding requirement.’
[16] Hickey & Hickey [2003] FamCA 395, [39] (‘Hickey’), noting the remarks of the Full Court in Norman & Norman [2010] FamCAFC 66, [60], at which their Honours state that ‘[i]t is the mandatory legislative imperative (to reach a conclusion that is just and equitable) that drives the ultimate result’ and that ‘[f]or all its usefulness and merit [the four-step approach] merely illuminates the path to the ultimate result’. I also note the three ‘fundamental propositions’ set out in Stanford (n 14) 120 [36], as alternative guidance for trial judges, ultimately towards the same objective as the approach in Hickey (n 16), namely to cover off on all necessary points and criteria in pt VIII.
[17] Stanford (n 14) 120 [37], noting the explanatory remarks in Lotta & Lotta [2017] FamCA 50, [283]–[284], importantly that ‘[s]uch 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’ and that ‘the Court needs to conclude that it would be unjust or unfair to leave property rights intact under s79(2) of the Act.’
[18] Lotta & Lotta (n 17) [289].
[19] Teal & Teal [2010] FamCAFC 120, [70], referring to Phillips & Phillips [2002] FamCA 350 in which, at [68], their Honours discuss the importance of considering the ‘real impact’ of an order to assess whether the result is just and equitable.
Identifying the parties’ legal and equitable interests
As stated above, the balance sheet was agreed and exhibited as J1, which is extracted here: [20]
Assets
[20] ‘H’ represents the assets and liabilities to be retained by the Husband. ‘W’ represents the assets and liabilities to be retained by the Wife. The net proceeds of sale are to be divided.
1 Net Sale Proceeds from Town D property (W&F to divide) $365,662 2 Town C Property (H) $400,000 3 Motor Vehicle 3 (H) $35,000 4 Motor Vehicle 1 (W) $40,000 5 Motor Vehicle 2 (H) $47,000 6 Town D Property Contents (W) $10,000 7 Husband Contents $minimal 8 Shares (H) $2,300 TOTAL OF GROSS NON-SUPERANNUATION ASSETS
$899,962[21]
[21] J1 referred to gross total of $904,562 and a net of $520,560 — those figures were clearly in error.
Liabilities
1 Town C Property Mortgage (H) $359,000 2 Car Finance (H) $20,415 Total – liabilities $379,415 NET TOTAL OF NON-SUPERANNUATION ASSETS
$520,547
Superannuation
1 Superannuation (W) $19,799 2 Superannuation (H) $229,000 TOTAL OF SUPERANNUATION ASSETS $248,799 By reference to the parties’ existing legal and equitable property interests, is it just and equitable to make an order pursuant to s 79?
As foreshadowed above, the law requires that any interference with legal and equitable interests adheres to principled reason.[22] Justice and equity, with respect to property settlement in s 79(2), does not admit of an exhaustive definition and it is ‘not possible to chart its metes and bounds.’[23] The principles contained within the Act also accommodate ‘stated or unstated assumptions and agreements about property interests during the continuance of the marriage.’[24] It is just and equitable, according to Stanford, for a court to make a property settlement order if such agreements or assumptions with respect to property interests during the marriage have been brought to an end, which usually occurs with the end of the marriage.
[22] Stanford (n 14) 121 [41].
[23] Ibid 120 [36].
[24] Ibid 122 [41].
Both parties submitted that there should be a property order — I agree. The parties jointly owned real estate — now sold — and those funds need to be allocated. They both hold superannuation, and each agrees that an amount of the Husband’s superannuation should be transferred to the Wife. The assumptions and agreements that the parties held during their relationship as to the appropriateness of the arrangement of their property interests and liabilities were ended when they separated. It is just and equitable for there to be a property order in this case.
Section 79(4)(a)–(c) — contributions
In assessing the parties’ contributions, I must ‘weigh and assess the contributions of all kinds and from all sources made by each of the parties throughout the period of their cohabitation.’[25] A trial judge must not disproportionately account for one contribution over and above the ‘myriad of other contributions’ made during the relationship.[26] This means that any contribution, whatever its size or significance, should not be weighed against the other ‘miscellany’ of contributions made, but instead should be assessed as one of those myriad contributions.[27] In essence, as expressed by Harper J in Dovgan & Dovgan [2021] FamCA 306, the introduction of property by one party to a long relationship must be assessed holistically:
347. … all contributions must be weighed collectively and so it is an error to segment or compartmentalise the various contributions and weigh one against the remainder.[28]
[25] Jabour & Jabour [2019] FamCAFC 78 [60].
[26] Ibid [43].
[27] Ibid [59], [73].
[28] Dovgan & Dovgan [2021] FamCA 306 [347].
Recently, the Full Court in Gadhavi & Gadhavi [2023] FedCFamC1A 117 at [30], confirmed that the Court cannot overlook the use and impact of an asset introduced into the relationship by a party:
30.It was not in dispute that the primary judge applied proper principle in determining that the assessment of the impact of the Husband's initial contributions could only properly occur after she assessed "the totality of the parties' contribution—based entitlement over the entirety of the marriage and post-separation" (at [210]).
31.In that respect, in Pierce v Pierce (1999) FLC 92—844 ("Pierce"), the Full Court stated at [28]:
… It is necessary to weigh the initial contributions by a party with all other relevant contributions of both the Husband and the Wife. In considering the weight to be attached to the initial contribution, in this case of the Husband, regard must be had to the use made by the parties of that contribution.
32.To similar effect, in Cabbell & Cabbell [2009] FamCAFC 205, the Full Court stated at [54] that in considering the parties' contributions, it is necessary to trace the use of those assets and consider the foundation that they laid for the subsequent accumulation of wealth by the parties.
33.That is, in evaluating the parties' contributions, it was necessary for the primary judge to have regard to the context of the Husband's initial contribution and specifically, to the opportunity that initial contribution created and the impact of that initial contribution on the subsequent wealth of the parties as at the date of the hearing. (emphasis added)
The Court must also consider the parties' non-financial contributions, including those as homemaker and parent, and not give such contributions token weight. In Dawes & Dawes [1989] FamCA 71, the Full Court stated:
73.Although it is difficult, as it always is in such cases, to put one's finger squarely on what led his Honour to so undervalue the Wife's contribution, we think that one significant matter which did so was that he failed to give any weight to the fact that the Wife's performance of her role as homemaker and parent during the 30 years of cohabitation was not just a contribution under s.79(4)(c) (which he subsequently recognized to some degree) but was also a significant contribution under s.79(4)(b). That point was made by the Full Court (Nicholson, C.J., Murray and Buckley, JJ.) in In the Marriage of Napthali (1988) 13 Fam LR 146 at p 151, where their Honours said:-
151.Turning now to the second ground of appeal, (which was that 'the court erred in law in failing to take into account contributions made by the Wife during the marriage as homemaker and parent') it is apparent that nowhere in her Honour's judgment does she consider the contribution of the Wife to the business assets as a home—maker and parent. It is clear that the Wife did perform this role and nowhere in the evidence or in the submissions was any criticism directed at her capacities in this regard. It is to be noted that in Mallet v. Mallet [1984] HCA 21; (1984) 9 Fam LR 449; (1984) FLC 91—507, the High Court whilst rejecting the proposition of a presumption of equality, approved statements by this Court that the purpose of s 79(4)(b) is to give recognition to the position of the house Wife who by her attention to the home and the children frees her Husband to earn income and acquire assets and also approved the proposition that the contribution made by the Wife as a home—maker and parent should be recognised not in a token way but in a substantial way: see Gibbs C.J. at Fam LR 451; FLC 79,111; Mason J. at Fam LR 461—2; FLC 119—20.”[29] (emphasis added)
[29] Dawes & Dawes [1989] FamCA 71, [73] (Lindenmayer, Strauss and Cohen JJ).
The parties agree that their financial and non-financial contributions, pre and post separation, were equal. Having considered all the evidence, I have no reason to disagree with that joint submission.[30]
[30] Wife’s Case Outline (n 9) 5; Case Outline of Mr Parkes dated 5 March 2024, 4 (‘Husband’s Case Outline’); Trial: closing submissions 7 March 2024.
Section 79(4)(d)–(g), including s 75(2) — other factors
It is not the task of a court with jurisdiction under Part VIII to engage in social engineering under these sections — that is, to serve any ‘moral’ or ‘charitable’ (but non-legal) ends outside the bounds of s 79 or s 90SM.[31] The Full Court in Beck & Beck (No 2) (1983) FLC 91-318 explained that:
[i]t is the financial consequences of all of the relevant matters that are to be taken into account and the section is so drafted to effect this purpose while excluding matters of conduct in a moral or non-financial sense.[32]
[31] Clauson & Clauson (1995) FLC 92-595 (‘Clauson & Clauson’) 81, 912.
[32] Beck & Beck (No 2) (1983) FLC 91-318 78, 167–78, 168 (‘Beck & Beck’).
In relation to maintenance or property settlement, the Court cannot assess or account for the s 75(2) (or s 90SF(3)) factors without satisfying itself that it bears upon a party’s financial circumstances.[33]
Section 79(4)(d) — the effect of any proposed order upon the earning capacity of either party to the marriage
[33] Jacobson & Jacobson (1989) FLC 92-003, 77, 178, at which Nygh J remarks that there ‘cannot be any doubling up as between the adjustment in capital position of the parties, which is implicit in sec 75(2) factors [in the context of s79] and making provision for the periodic needs of a party who suffers from an inability to support [themselves] pursuant to sec 72 of the Act’. Both assessments, on his Honour’s remarks, require an assessment of the financial consequences of the factors considered. See also Sigley & Cullen (No 3) [2015] FamCA 825, [42], [105], as an example, in which Cronin J discusses the Wife ’s health as it affected her academic studies, which in turn may have affected her employment prospects.
The term ‘earning capacity’ is defined as ‘a capacity to obtain income which could be used to provide maintenance … and not merely as current income from personal exertion or from the use of personal skills.’[34]
[34] Beck & Beck (n 32) 166.
The Wife claims in her Amended Financial Statement that she works casually earning at least $462 per week.[35] She also receives $122 from Family Tax benefits and $472.50 in child support — totalling $1,056.50 per week or $54,938 per annum.[36] As will become apparent later in these Reasons, I will ultimately find that her total income is in fact higher than this amount. The Wife was cross-examined about her ability to work longer hours, however, I am not convinced that her fulltime care of the children would currently enable her to do so. Working a further 15 hours a week, as put to her, would place enormous stress upon her and the children, given her lack of available support. Once Y becomes more self-sufficient, her ability to work longer hours may change, but as an allied health worker, earning $35 per hour,[37] a few extra hours worked is unlikely to significantly change her financial circumstances.
[35] See Footnote 52.
[36] Amended Financial Statement of Ms Parkes filed 26 February 2024 [9], [12]-[13], [16] (‘Wife’s Financial Statement’).
[37] Trial: cross-examination of the Wife.
The Husband works full-time for F Pty Ltd and states in his Financial Statement that he earns $4,250 per week plus $420 per week from rent — totalling $4,670 per week.[38] He also receives fringe benefits of free accommodation and a motor vehicle (which he values at $400 per week).[39] This amounts to $242,840 per annum plus fringe benefits. In his written submissions, Mr Williams seemed to dispute his clients’ evidence:
8. At this point, it is stressed that the evidence of the husband supports that the husband has a gross salary of $210,000.00 a year plus fringe benefits which include the provision of a house and the provision of a motor vehicle. It has been stated through the hearing on a number of occasions by Counsel for the wife that there is a salary of $240,000.00. This is not correct. His gross income under the scheme of the Child Support (Assessment) Act may be $240,000 as indicated in the child support document annexed to his affidavit, but he is not paid a salary of $240,000.
…
10. It is submitted that it is procedurally fair that the husband be given the opportunity to produce the evidence which relates to his income and his taxation obligations so that these can be better understood by the Court as they are of relevance in terms of the funds that are available to him. At a minimum, a recent payslip will set that.
11. The Respondent husband refers to and relies upon his payslip of February 2024. It is the husband's evidence that he receives his income on a monthly basis.[40]
[38] Financial Statement of Mr Parkes filed 29 February 2024 [9]-[10], [16] (‘Husband’s Financial Statement’). I note that this was incorrectly calculated as $4,600 in the Husband’s Financial Statement.
[39] Ibid [18].
[40] Husband’s Written Submissions (n 3) [8], [10]-[11].
There was no objection to the Court receiving the Husband’s payslip as an annexure to the written submissions. That document is a payslip from F Pty Ltd, showing a pay date of 24 February 2024 (his Financial Statement was signed 28 February 2024). It evidenced an annual salary of $210,000 — $4,038.46 per week — $213.54 per week less than the figure set out in his Financial Statement. This anomaly was never explained. Added to the rent he receives, on this version of his income, he receives $231,840 per annum, plus fringe benefits. I also note that the document evidences the Husband as having 78.8864 hours of Annual Leave owing.
The Husband’s total income (whichever the correct figure) is significantly higher than that of the Wife — plus free accommodation, a car and with significant annual leave owing.
Neither party’s proposed property order impacts upon their income earing capacity.
Section 79(4)(e) — s 75(2) factors
Section 75(2)(a) — the age and state of health of each of the parties
The Wife is 37 years of age, and the Husband is 48. Neither party produced admissible evidence as to any illness or infirmity that will prevent them from undertaking meaningful employment. The Wife stated that her mental health would be impacted if she was to work longer hours:
36. The industry I work in is physically demanding and it requires me to be mentally healthy. The [employer] I work for has approximately [50 patients] daily and it is important that I be alert to deal with the issues that occur with being in charge of a large number of [patients]. Currently I do not feel that I am able to work full time as this process has taken a toll on my mental health.[41]
[41] Affidavit of Ms Parkes filed 26 February 2024 [36] (‘Wife’s Affidavit’).
Although she produced no expert evidence to attest to any mental health issues, I readily accept, given her fulltime care of the children, without physical assistance from the Husband, that working longer hours would be exhausting and stressful.
Section 75(2)(b) — the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment
In Clauson & Clauson (1995) FLC 92-595, the Full Court stated:
It has long been recognised that in most cases the most valuable “asset” which a party can take out of the marriage is a substantial, reliable, income-earning capacity: see Best and Best (1993) FLC 92-418 at 80, 295.[42]
[42] Clauson & Clauson (n 31), 81, 911 (Barblett DCJ, Fogarty and Mushin JJ).
Their Honours further remarked that:
In addition, it should not be forgotten that the payment of child support in no way compensates the custodial parent for the loss of career opportunity, lack of employment mobility and the restriction on an independent lifestyle which the obligation to care for children usually entails: see Langford (16 January, 1995, Full Court, not reported).[43]
[43] Ibid.
The impact of income disparity was considered by the Full Court in Waters & Jurek (1995) 126 FLR 311:
78. It must first be said that the provisions of s75(2) are primarily concerned with the exercise of the Court's jurisdiction pursuant to the provisions of s74 to make an order for the payment of spousal maintenance. The provisions of s75(2) however have been incorporated into the Court's jurisdiction to alter the interests of the parties in their property, including an order for settlement of property via s79(4)(e).
79. The question must then be posed, what is the extent of the Court's jurisdiction to make an adjustment in favour of one of the parties because of a disparity in income, property and financial resources (see s75(2)(b)). In the case to which his Honour referred, Anast and Anastopoulos (supra) the Court at page 77,061 clearly recognised that an Wife who is not entitled to be maintained by the other party under s72 may nevertheless be entitled to rely on factors arising out of s75(2) in support of a claim for a share of the property of the parties greater than that which might result from contribution alone.
…
81. In Collins and Collins (1990) FLC 92-149 the Court considered the application of s75(2) factors and approved the following passage from the reasons for judgment of the Full Court in Branicki delivered on 18 May 1990 (unreported). I here incorporate that passage which is on pp.78,043-4:-
“Section 79(4)(e) incorporates in the consideration of a property order under sec.79 'matters referred to in sec.75(2) so far as they are relevant'. Section 75(2) sets out in 15 paragraphs various matters which are required to be taken into account. They are of considerable diversity; some are likely to have little to do with the general run of property applications; some are likely to have more significance in one case than they would in another. Section 75(2) is part of sec.75 which is a section related to 'matters to be taken into consideration in relation to spousal maintenance'. Consequently, some of the matters set out in sec.75(2) may be more appropriate to spousal maintenance than they may be to a property order, and the use of a common subsection in the disparate responsibilities under sec.74 and sec.79 can produce confusion and the risk of overlapping. However, these circumstances are well known to trial Judges in the course of their experience in the daily application of sec.79 to the facts of a particular case.”
82. The Court then went on to say on p.78,043-5 of the report:-
“In particular, we reject the submission of senior counsel for the husband that sec.75(2) is referable only to a question of 'financial need'. That confuses the exercise under sec.79 (which includes sec.75(2)) with proceedings for spousal maintenance under sec.72-75. No doubt, as the Full Court in Branicki's case pointed out, there is a risk of overlap and trial Judges need to be cautious to avoid that. The sec. 75(2) factors within sec.79 have an independent existence which is quite different from and separate from proceedings for spousal maintenance.”
83. There are many cases in which there has been a disparity in the property and financial resources of one of the parties which has been reflected in an adjustment being made under s75(2) for that reason. Indeed, one of the arguments raised in Collins and Collins (supra) was that for there to be any adjustment under s75(2) a financial need for such on the part of the other party must be shown. The Court rejected such a notion in the passage to which I have referred and came to the conclusion that the trial Judge was entitled to take account of any imbalance in property and resources.
84. The question for me however, is, does the Court have a corresponding right to make an adjustment pursuant to the provisions of s75(2)(b) if there is a disparity in the income which each of the parties is earning, or are respectively capable of earning?
85.In my view, consistent with the decision of the Full Court in Collins and Collins (supra) the answer must clearly be yes. Shortly stated, if a trial Judge comes to a conclusion that where there is an imbalance in the income and or respective earning capacity of each of the parties, adjustment can be made in favour of one of the parties. This must be so if for no other reason than that any order which the Court makes under the provisions of s79 must, in all the circumstances, be just and equitable. (emphasis added)
As detailed earlier, the Husband works fulltime with F Pty Ltd, earning at least $210,000 per annum, plus rent and fringe benefits. The Wife works on a casual basis — 15 to 25 hours per week[44] — earning around $30,000 per annum,[45] together with child support and government benefits. Combined, on these figures, she receives approximately $60,914 per annum.[46] It is noted, however, this figure assumes that the Wife only receives $462 per week for child support, when the Husband’s assessed rate is $833 per week. Her actual total income earning potential is therefore $79,669.98 per annum. There remains, however, a very large income disparity, which would not significantly narrow if the Wife was to increase her working hours. She may also need to pay childcare fees[47] to undertake such work, reducing any financial advantage for working longer hours. The Wife maintained under cross-examination that she is unable to work longer hours than she currently does — evidence I accept. She has the fulltime responsibility to care for the children and worries that the stress would impact on her and her parenting.[48]
[44] Trial: cross-examination of the Wife — she stated that sometimes she works longer than the stated hours.
[45] Wife’s Affidavit (n 41) [40].
[46] At paragraph 40 of the Wife’s Affidavit, she says she earns approximately $30,000 per annum whilst in her Amended Financial Statement she says she earns $462 per week ($24,024 per annum). The difference was not explained but it suggests an income ranging between these figures depending on her hours worked.
[47] Mr Williams implied that she could use her employer’s childcare facilities at no cost. There was no evidence to support this.
[48] Trial: cross-examination of the Wife.
The parties have agreed to equalise their superannuation interest such that they each hold superannuation worth $124,399. Given the Husband’s high income, he will be able to build his superannuation quickly, whilst the Wife is unlikely to ever achieve a superannuation balance comparable to the Husband’s by the point of retirement.
Section 75(2)(c) — whether either party has the care or control of a child of the marriage who has not attained the age of 18 years
The Wife has the fulltime care of the children aged 11 and 17. The Husband has not spent time with the children since 5 December 2022.[49] Given his hostile attitude towards Y,[50] and his vile denigration of the Wife to X, that situation is unlikely to change.[51]
Section 75(2)(d) — commitments of each of the parties necessary to enable them to support themselves and a child or another person that the party has a duty to maintain
[49] Wife’s Affidavit (n 41) [37].
[50] Ibid [26].
[51] Ibid Annexure C: The texts to X by the Husband annexed to the Wife’s Affidavit demonstrate a lack of restraint and are far from child focused.
The Wife’s evidence in her Amended Financial Statement was that the necessary expenses for her and the children amount to $1,532 per week, whilst her total income is at least $1,056.50 per week.[52] As addressed above, she stated in her Affidavit that she in fact earns $30,000 per annum and is due $833 in child support each week.
[52] Wife’s Financial Statement (n 36).
The Wife was cross-examined about her income and expenses. It was contended that she could work longer hours and use the childcare facilities of either her employer or use X to assist with the care of Y. The Wife rejected the contention stating she cannot plan her rosters ahead to receive priority for childcare as her rosters are weekly, and if Y cannot get into care, then she cannot work.[53]
[53] Trial: cross-examination of the Wife.
The Wife stated during cross-examination that the childcare centre was not accepting any more full time or part time employees so even if she wanted to work longer hours, she would not be able to, so she continues to remain as a casual employee.[54]
[54] Ibid.
The line of questioning demonstrated the Husband’s lack of insight as to the everyday pressures on the Wife to care for the children without support. She requires flexible work hours for the obvious reasons set out in her Affidavit:
35. As [Y] is only 10 and he requires me to be available if he is sick or injured, I have continued to work casually as this allows me some more flexibility to be available when he and [X] need me. I do not have a support network that I can rely on to offer this kind of care for the children.[55]
[55] Wife’s Affidavit (n 41) [35].
The same can be said about his attack on the Wife’s expenditure. Mr William’s cross-examined the Wife’s expenditure on streaming services and label clothing for the children, suggesting that the expenditure of $1,532 in a household with two growing boys was excessive. Such questions were put when the Husband admitted to spending $500 per week on ‘entertainment and hobbies’ and $200 per week on ‘holidays.’[56] In circumstances where the Husband does not see his children and earns significantly more than the Wife’s total income, with hundreds of dollars of discretionary expenditure each week, this line of questioning only highlighted the stark difference in the parties’ financial circumstances.
[56] Husband’s Financial Statement (n 38) 11.
The Husband’s combined income is at least $231,840 per annum — $4,458 per week, plus fringe benefits. In his Financial Statement he stated that his weekly expenses are $3,282 per week, although there was no entry made for tax.[57]
[57] Ibid [33], Part N.
Unfortunately, some of the figures set out in his Financial Statement were incorrectly calculated. At paragraph 16, he stated his total income to be $4,600. The correct figure is $4,670. At paragraph 33, he stated his total expenditure to be $1,912, when the correct figure is $2,161.50. That figure is, however, also incorrect. The sum of $250 at paragraph 32 should be the sum of $1,370 at Part N. The total at paragraph 33 should therefore be $3,281.50.
The Husband was not cross-examined about his expenses, but Mr Trezise submitted that the entry in his Financial Statement of $500 per week for ‘entertainment/hobbies’[58] and $200 per week for ‘holidays’ could not be regarded as anything other than excessive expenditure, highlighting the stark difference of the parties’ available income. Mr Trezise submitted that the Husband has a significant surplus available each week — a distinct difference to the Wife’s more precarious financial position.
[58] Ibid.
Mr Williams countered that Mr Trezise’s submissions failed to consider the Husband’s tax obligation:
12.In relation to the issues of tax, it will be apparent to the Court that in the last 12 months [Mr Parkes] has purchased a property which is in fact a former matrimonial property at [Town C]. That property is rented out for $400 a week. The circumstances of receiving rental income and there being a mortgage and outgoings on a property create accounting issues in relation to the assessment of income and tax under the Income Taxation Assessment Act 1936. It is the case that there is no evidence of a tax return being completed nor has one been completed by the husband for the financial year ending 30 June 2023, therefore in relation to the assessment of weekly tax on the Financial Statement the answer "not known" is an accurate and valid answer. Obviously, he wasn't questioned on it.
13.Nevertheless, the husband relies on the evidence of what tax is taken from his salary through his contract with [F Pty Ltd].
14.On a monthly basis the total earnings are $17,500.00 with a Net pay of $11,715.00. This sees tax, pay as you go, of $5,785.00 each month, equating to $1335 for each week of the year.[59]
I note that the Husband does not state the amount of his weekly liability for tax in his Financial Statement but does state that he does not have any outstanding taxation debts.[60]
[59] Husband’s Written Submissions (n 3) [12]-[14].
[60] Ibid [19], [48]-[49].
The Husband’s pay slip attached to his written submissions evidenced that the Husband did pay $5,785 in tax for February 2024. Extrapolating that to a yearly basis, it calculates at $69,420 per annum or $1,335 per week. If the amount of $1,335 is added to his actual expenses each week, they total $4,616.50.
His weekly income from employment is stated, in his Financial Statement, to be $4,250 per week, but his payslip suggests that his income is in fact $210,000 per annum ($4,038.46 per week). His total income (including rent) is, therefore, at least, $231,840 per annum — $4,458 per week. With expenses of $4,616.50 per week, he has a shortfall of $158.50 per week. Some of his expenditure is, however, clearly discretionary. He spends $500 per week on entertainment/hobbies, $200 per week on holidays, $100 per week on credit card payments[61] and $100 per week to meet After Pay repayments[62] — where his credit card balances are low.[63] I have little trouble in finding that the Husband has surplus monies available to him each week after he meets his necessary expenditure. He is also assisted by having his accommodation and motor vehicle supplied by his employer. His financial position is significantly better than the Wife’s. I also note that his stated personal expenditure of $1,370 per week at Part N of his Financial Statement[64] was only $160 per week less than the Wife’s stated total expenditure on herself and their children set out at Part N of her Amended Financial Statement — a position he sought to criticise.
[61] Husband’s Financial Statement (n 38) [30].
[62] Ibid 11 — I note the Husband has no corresponding head debt under Part K and his Mastercard debt is $2,000.
[63] Ibid [51].
[64] Ibid.
Section 75(2)(e) — the responsibilities of either party to support any other person
The Wife has the fulltime care of X and Y. She stated that she receives child support from the Husband in the amount of $472.50 per week.[65] The Husband claimed that he pays $950 per week.[66] Annexed to his Affidavit were documents from the Child Support Agency evidencing an assessment of $3,610.50 ($833.19 per week).[67] The documents also evidenced a child support debt of $5,266.80, which may explain the $950 per week payment. If the Wife is due to receive $833 per week, then her total income increases to $1,532.11 per week or $79,669.98 per annum.
Section 75(2)(f) — the eligibility of either party for a pension, allowance or benefit under any law or superannuation fund, and the rate of any such pension, allowance or benefit being paid to either party
[65] Wife’s Financial Statement (n 36) 3.
[66] Husband’s Financial Statement (n 38) [31].
[67] Affidavit of Mr Parkes filed 28 February Annexure 2.
The Wife receives Family Tax Benefit — A and B — of $122 per week.[68]
Section 75(2)(g) — a standard of living that in all the circumstances is reasonable in the circumstances
[68] Wife’s Financial Statement (n 36) [12].
The income available to the Husband and his stated use of that income suggests that he affords a high standard of living. The Wife’s standard of living is adequate noting her full-time care of the children. The parties appear to have maintained a reasonable standard of living during the relationship — confirmed somewhat by the Wife’s evidence under cross-examination that the children were ‘raised on brand name clothing.’[69]
Section 75(2)(h) — the extent to which a party’s earning capacity could be increased by enabling them to undertake a course of education or training or to establish themselves in a business or otherwise to obtain an adequate income
[69] Trial: cross-examination of the Wife.
This factor is not relevant.
Section 75(2)(j) — the extent to which a party has contributed to the income, earning capacity, property and financial resources of the other party
The parties agree that their contributions during a 15-year relationship were equal. They have, and continue to, work very hard and each has assisted the other to undertake their chosen endeavours.
Section 75(2)(k) — the duration of the marriage and the extent to which it has affected the earning capacity of each party
The Wife’s role as the primary carer of the children has curtailed her ability to advance her career. That is not to understate the sacrifice the Husband has made, working remotely in difficult conditions to benefit his family.
Section 75(2)(l) — the need to protect a party who wished to continue that party’s role as a parent
The Wife will continue in her role as the children’s fulltime carer. That responsibility will remain for another 7 years. Her ability to increase her working hours is impacted by that reality, particularly where the Wife does not have support systems to assist her with parenting responsibilities while Y is young.
Section 75(2)(m) — if either party is cohabiting with another person—the financial circumstances relating to the cohabitation
This factor is not relevant.
Section 75(2)(n) — the terms of any order made or proposed to be made under section 79 in relation to the property of the parties
The parties agreed at the outset of the trial that their contributions to the non-superannuation assets, identified in J1, were equal. The net non-superannuation assets are valued at $520,547. This results in both being entitled to net assets worth $260,273.50. Both have also agreed to equalise their superannuation interests, resulting in each retaining superannuation with a value of $124,399.
Section 75(2)(na) — any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage
The Husband, in the Wife’s case, pays her $472.50 per week in child support. The Husband contends that he pays a higher amount.[70] It seems clear that he is assessed to pay a higher amount and can pay up to $4,000 a month as he ‘catches up on arrears due to income variations in years past and change in assessment.’[71]
Section 75(2)(o) — any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account
[70] I note that the Wife’s Financial Statement at [13] states that the child support required to be paid is $902.60, whereas the amount stated that is received — at the time the Financial Statement was made — is $472.50. The Husband’s Written submissions and Case Outline suggests he pays closer to the amount required — between $902 and $914 per week. The amount of $4,000 he pays at the time of 7 March 2024 was to also cover some arrears he owed.
[71] Husband’s Written Submissions (n 3) [15].
The Wife claimed that the Husband sold an animal post separation for $30,000, using some of the proceeds to purchase the Town C property.[72] That property is included in the balance sheet, and therefore, if correct, the Wife will receive some benefit from the purported sale. The Husband explained that the proceeds were used up in the efforts to sell the animal. He was not cross-examined about this and, as such, I cannot make a finding that he received a financial advantage by selling this animal.
[72] Wife’s Affidavit (n 41) [32].
The Wife also referred to the Husband’s withdrawal of $62,090 from the ‘J Bank’ account post separation for his own benefit.[73] The only mention of this was in the Husband’s Case Outline where he volunteered that he withdrew these funds from ‘post separation overseas income.’[74] This was not raised in the Wife’s Affidavit nor her evidence in chief, and the Husband was not cross-examined about the use of these funds. The Wife continued to make significant contributions as the fulltime carer for the children post separation. In those circumstances, the fact that these funds were earned post separation does not result in them being disregarded for the purpose of determining a just and equitable outcome, and some explanation needed to be afforded as to how those monies were used.[75] He did so in his Case Outline, where it was stated that the funds were put towards the purchase of the Town C property[76] — which forms part of the balance sheet. The Husband was not challenged about this, and as such, I will not take the withdrawal of those monies into account in the manner proposed by Mr Trezise.
Section 79(4)(f) – any order made under this Act affecting a party to the marriage or a child of the marriage
[73] Wife’s Case Outline (n 9) 2, 5.
[74] Husband’s Case Outline (n 30) 2.
[75] See Grier & Malphas [2016] FamCAFC 84, [57] (Bryant CJ, Murphy and Kent JJ agreeing at [141]).
[76] Husband’s Case Outline (n 30) 2.
An Order of 19 July 2019 provides that the children live in an equal time arrangement between the parties. At the time of the trial, the Husband had not spent time with the children since December 2022.[77] In the Wife’s account he recently reached out seeking time, but she believes that he needs to work on his relationship with them before overnight time is possible.[78]
Section 79(4)(g) — any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage
[77] Wife’s Affidavit (n 41) [37].
[78] Ibid.
This factor has been addressed.
Conclusion regarding the matters referred to in s 79(4)(d)-(g)
Having regard to all the matters addressed above, with special regard to the Wife’s role as fulltime carer for the children — particularly Y — and the significant disparity in their incomes, fringe benefits and future financial resources, I assess that there should be a 25% adjustment to the Wife for these factors. I acknowledge that this exceeds the figure of 70% referred to by both Counsel (although Mr Trezise referred to it as a minimum outcome), however, in the context of a small asset pool, the Wife’s fulltime care of the children, the Husband’s fringe benefits, his 78 hours of available long service leave, and the stark differences in the parties’ financial positions and outlook, I am of the view that an adjustment of 25% to the Wife is appropriate.
Conclusion regarding the parties' non-superannuation assets
I have determined that there should be a 75/25 division of the parties' non-superannuation net assets (valued at $520,547) in the Wife’s favour — resulting in the Wife being entitled to net assets worth $390,410.25 and the Husband $130,136.75 — a differential of $260,273.50. Considering the funds the Husband has available to him from his total income and the large amounts he spends upon discretionary expenses, he has the ability recover financially from this outcome over the years ahead.
The Wife currently holds assets with a net value of $50,000 and the Husband $104,885. This results in a cash payment to the Wife of $340,410.25 from the Town D Funds ($365,662). The balance of $25,251.75 will be paid to the Husband. To ensure that all the Town D Funds are exhausted, I will allocate any balance over $365,662[79] to the parties on a 75/25 basis, in favour of the Wife.
[79] Interest may have been earned on the amount.
Final assessment: a just and equitable exercise of discretion?
After assessing contributions and other factors, this Court must consider whether, in light of those assessments and the actual property to be divided, the proposed exercise of the discretion under s 79 is just and equitable. In Clauson & Clauson, the Full Court said the following:
… that exercise is not done in isolation; it is done against the background of conclusions already arrived at on contributions, the consequence of which will be in some cases to intrude into the s 75(2) exercise because of the dimension of the former conclusion and the total pool.
It is largely for that reason that it is ultimately necessary to stand back from the process and reach a conclusion which appears overall to be a just and equitable exercise of the discretion.[80]
[80] Clauson & Clauson (n 31) 81, 911–81, 912.
As a result of my assessment, the Husband will retain real-estate, shares, some cash and two cars. The Wife will receive the bulk of the Town D Funds, a car and some chattels. Each will hold superannuation. Of the total pool (superannuation and non-superannuation) valued at $769,346, the Wife will receive 60.4%. Standing back, I am satisfied that a 75/25 division of the parties’ non-superannuation assets in favour of the Wife and an equal division of the superannuation assets is a just and equitable outcome.
Spousal Maintenance
The Wife seeks an order for $485 per week for spousal maintenance[81] — or such other amount as the Court deems appropriate — and seeks to capitalise the same. The Husband argues that there is no basis for the order for spousal maintenance to be made.
[81] I note that the Wife put forward two alternative proposals to the Court in how spousal maintenance could be provided, should the Court order so. The Wife submits that spousal maintenance could be capitalised as a lump sum order of $40,000, specifying $385 per week for two (2) years. Should the lump sum proposal not be accepted by the Court, then in the alternative, the Wife seeks a periodic order of $485 per week indefinitely; Wife’s Case Outline (n 9) 8.
The Law
The Full Court in Habib and Habib [1988] FamCA 40 at [26] confirmed that the question of spousal maintenance is to be considered after the determination of proceedings under s 79:
In Lee Steere and Lee Steere (1985) FLC 91-626 the Court viewed the exercise that is required in proceedings under sec. 79 as incorporating two steps. Firstly the ascertainment of contribution and then the consideration of the relevant matters set out in sec. 75(2). It is the combined application of the past contributions and the sec. 75(2) elements that bring a Court to make an order that is just and equitable within the meaning of sec. 79. An order for maintenance, be it periodic or by way of lump sum, which is intended to be caught by the provisions of sec. 66L, 77A and 87A is something that is looked at generally after the sec. 79 matters have been attended to. It may require an additional transfer of property or payment of lump sum over and above the proposed order which has already been arrived at by the application of sec. 79 principles. (emphasis added)
Thus, a property adjustment does not disqualify a party from a maintenance order. In Mitchell & Mitchell (1995) FLC 92-601, the Full Court also confirmed that the terms of any property order or proposed order, are to be taken into consideration when assessing whether to make a spousal maintenance order.[82]
[82] In the Marriage of Mitchell and Mitchell (1995) FLC 92-601, 15 (Nicholson CJ, Fogarty, Jordan JJ) (‘Mitchell & Mitchell’).
In Hall v Hall [2016] HCA 23, the High Court summarised the matters to be considered for a spousal maintenance application:
(a)To what extent is the wife unable to support herself;
(b)What are the wife’s reasonable needs;
(c)What capacity does the husband have to meet a spousal maintenance order if such an order was to be made; and
(d)If the wife’s circumstances favour an order for spousal maintenance to be made, then what order is reasonable having regard to s 75(2) of the Act.
Section 74 of the Act states that the Court may make such provision for spousal maintenance ‘as it considers proper’. A right to spousal maintenance is embodied in s 72 which states:
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… (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 physical or mental incapacity for appropriate gainful employment, or (c) for any other adequate reason.
These considerations are to be assessed with regard to any of the relevant matters under s 75(2).
The Full Court in Mitchell and Mitchell provided guidance as to the interpretation of s 72, confirming that the section establishes a threshold question before the power of s 74 can be exercised:
That threshold is whether the Wife “is unable to support herself or himself adequately” by reason of the matters set out in (a), (b), or (c) of that section, but having regard to any relevant matter referred to in sub-section 75(2).
Thus, the question of whether the Wife can support herself “adequately” is not to be determined by reference to any fixed or absolute standard but having regard to the matters referred to in s 75(2) and more specifically the paragraphs of that sub-section identified above.
Nor is that question to be determined upon a “subsistence” level, as earlier cases under State maintenance legislation suggested. In Nutting and Nutting (1978) FLC 90-410 at 77, 094 Lindenmayer J said:-
“By sec. 72 of the Act, the Husband is liable to maintain the Wife only to the extent that she is incapable of supporting herself adequately, and again ‘adequately’ imports a standard of living which is reasonable in the circumstances, including the circumstances that the parties are no longer husband and wife and that the assets and resources which were formerly available to them both in common have now been divided between them.” [83] (emphasis added)
[83] Ibid 15.
In the Marriage of Bevan & Bevan (1995) FLC 92-60, the Full Court confirmed that an award of spousal maintenance should not be at a subsistence level but should pay proper regard to the factors in s 75(2).[84] Nor does a party seeking a maintenance order need to deplete their resources before satisfying the threshold question. The Court also confirmed that the Court’s discretion is to be exercised in accordance with the provisions of s 74 with “reasonableness in the circumstances” as the guiding principle.[85]
[84] In the Marriage of Bevan and Bevan (1995) FLC 92–600 (Nicolson CJ, Lindenmayer & McGovern JJ).
[85] Ibid 7.
Recently, in Qin & Donato [2023] FedCFamC1A 223, the Full Court stated:
Whilst adequate needs can often be inferred from a person’s expenses, such expenses may not extend to reasonable needs. A person with no income and who cannot pay any expenses, still has needs.
Thirdly, what are assessed to be ‘reasonable needs’ are to be assessed having regard to the parties’ previous standard of living. This was confirmed in Brown and Brown (2007) FLC 93-316 where the Court said (at 81,455):
Where possible both spouses should continue to live after separation at the level which they previously enjoyed if this is reasonable.
…
Reasonable means reasonable in all of the circumstances, not subsistence (Evans and Evans (1978) FLC 90-435; Bevan and Bevan (1995) FLC 92-600 and Mitchell and Mitchell (1995) FLC 92-601).[86]
[86] Qin & Donato [2023] FedCFamC1A 223 [27]-[28], [31].
In Garston & Yeo (No 2) [2019] FamCAFC 139, the Full Court considered what amounts to ‘reasonable needs’:
A claim for maintenance is not limited by reference to current expenses because an Wife applying for maintenance may not have the ability to pay for commitments necessary to support themselves (s 75(2)(d) of the Act) and thus avoid incurring what otherwise would be a reasonable expense. Therefore, the focus is on what is necessary for support.
Often, and conveniently, the identification of reasonable needs may be done by reference to expenses that are currently being incurred but obviously, that will not be possible or lead to adequate support in all cases. It is reasonable to claim that you need more money than you are currently spending (Seitzinger & Seitzinger (2014) FLC 93-626 at [53]).[87] (emphasis added)
[87] Garston & Yeo (No 2) [2019] FamCAFC 139, [29], [30].
A Court exercising jurisdiction under s 74 of the Act ‘shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance, or benefit’.[88] This was interpreted by the Full Court in Elder v Elder [2009] FamCAFC 224 to mean that the entitlement or receipt of a pension cannot be taken into account in determining whether the party to receive a maintenance is unable to support themselves.[89] The Family Tax Benefit payments received by the Wife in this case cannot be considered when making an assessment as to whether she is able to adequately support herself.[90]
[88] FLA (n 1) s 75(3).
[89] Elder v Elder [2009] FamCAFC 224 [50].
[90] The Wife receives a Family Tax Benefit — A and B — of $122 per week.
In relation to the question of ‘capacity’ to meet a payment of spousal maintenance, in Maroney & Maroney, Coleman J said:
56. The “capacity” to meet an order for interim spousal maintenance is not confined to income. Once a party, such as the Wife in this case, establishes an entitlement to interim spousal maintenance, and such entitlement is quantified in accordance with that spouse’s reasonable needs, an order may be made notwithstanding that the liable spouse could only satisfy the order out of capital or borrowings against capital assets.[91]
[91] Maroney & Maroney [2009] FamCAFC 45 [56].
If the inquiry establishes that a respondent does have the capacity to contribute towards the maintenance of the other, then there is a further enquiry as to the extent to which it is reasonable that he or she should do so.[92]
[92] Kajewski T.G. & Kajewski B. [1978] FamCA 62.
Finally, there is the question of the impact of child support payments on a claim for spousal maintenance. The correct approach was confirmed by the Full Court in Carson & Hillman [2019] FamCAFC 42:
61.However, the level of support that the appellant needs for herself is not dependent upon her obligation to maintain the children (see Stein v Stein [2000] FamCA 102; (2000) FLC 93-004). The trial judge did not include in her calculation of the $330 per week shortfall either the child support which the respondent was providing or might in the future be liable to provide to the appellant or the cost of the children to the appellant. That was the correct approach.[93]
Consideration
[93] Carson & Hillman [2019] FamCAFC 42 [61]. See also Jabara & Gaber [2021] FedCFamC1A 26 at [29]-[31].
Is the Wife unable to support herself adequately?
The Wife stated in her Affidavit that she works on a casual basis as an allied health worker — 15 to 25 hours per week[94] — earning around $30,000 per annum ($576.92 per week). [95] This figure differs from her Amended Financial Statement where she states her employment income to be $462 per week ($24,024). The Wife was not cross-examined as to this discrepancy. It may be explained by the varying nature of her weekly working hours. I will adopt the $30,000 figure as the more accurate because she states it in her Affidavit — which was not amended during her evidence in chief. As I have found, I am satisfied that the Wife is working to the maximum extent reasonably possible.[96]
[94] Under cross-examination, the Wife stated ’15 to 25 hours or more.’
[95] Wife’s Affidavit (n 41) [40].
[96] See paragraph 42 and 52 of these Reasons.
The Wife’s expenses were challenged by Mr Williams under cross-examination. As I have found, the Wife’s stated expenses are not excessive, although I hold some concern that they have been understated. Her Amended Financial Statement sets out her personal expenditure at Part N of the document, but unfortunately the column in that table setting out the same is incomplete. She states that her personal expenditure is $382 per week, yet she does not state a sum for food, supplies, repairs, gas, electricity, internet or motor vehicle. In fact, her share of the expenditure set out under the ‘total’ column is largely missing. Doing the best I can, and without the assistance of submission or better evidence, unless otherwise stated, I will assume that the Wife’s expenditure to be one third of the ‘total’ column. I will adopt the same approach for the expenses set out at paragraphs 21, 26 and 78. The income tax figure at paragraph 19 is the Wife’s alone. Adopting that approach, the Wife’s weekly expenses are $780.17. This leaves a shortfall of $203.25 per week (‘the shortfall’). I note the stark difference with the Husband’s stated expenses in Part N of his Financial Statement, including food of $200 per week — compared to the Wife’s $83 — and $700 per week for entertainment/hobbies and holidays — compared to the Wife’s $5 per week. This suggests that the Wife’s actual expenditure is less than what might be regarded as reasonable, given her past standard of living. The Husband, by contrast, has been able to maintain a high standard of living.
It cannot be forgotten, however, that the Wife will receive $340,410.25 cash and $50,000 in other assets by virtue of the Order I will make pursuant to s 79. The monies she will receive will significantly improve her financial circumstances and can be utilised to increase her available income.
The Full Court in Clauson and Clauson stated:
The result of the s.79 order may be such that the applicant for maintenance can no longer be described as being "unable to support himself or herself adequately" because he or she may have sufficient assets which, with or without income arising from the investment or use of those assets, will provide an adequate level of support. It also defines the other party's capacity to meet any order.[97] (emphasis added)
[97] Clauson & Clauson (n 31).
In Figgins & Figgins [2002] FamCA 688, Ellis J, as part of the Full Court, dealt with the question of ongoing spousal maintenance where the Wife in that case had received a sizeable property settlement. He re-stated the Trial Judge’s Reasons:
The question of spousal maintenance, however, falls to be determined in light of the distribution of property which I have foreshadowed. In my view, it would not be appropriate to make an order for spousal maintenance or to continue the order for spousal maintenance having regard to the quantum of the order I propose to make in the wife’s favour. The provision to her of a capital sum of $1.1 million provides her with a wide range of investment opportunities and when received by her will result in a situation when she could not demonstrate that she was “unable to support herself ... adequately”. It is by no means certain that the wife intends to purchase a “house like Orchard Street”, or indeed a house in Brighton, particularly noting that M now attends Wesley College. (emphasis added)
Ellis J then found:
236. The question of spousal maintenance must be determined in the light of the impact upon the financial affairs of the parties of the order for property settlement. Given that I would award the wife, by way of property settlement, the sum of $2,350,000, that is the relevant figure for consideration.
237.In the light of that factor and the other matters referred to in s.75(2), I am not persuaded that, on a re-exercise of the discretion, the wife, upon receipt of the $2,350,000, would be unable to support herself adequately.
238. I would thus dismiss the appeal against the trial Judge’s refusal to order that the husband pay to the wife spousal maintenance. (emphasis added)
In Line & Line (1997) FLC 92-729, the Full Court confirmed that in can be unreasonable to expect a payment of spousal maintenance after a party has received their property entitlement:
4.87 Counsel for the wife further submitted that the wife should not necessarily be forced to draw upon her property settlement moneys to provide for her support. In support of this submission he relied upon some dicta of the Full Court in Mitchell & Mitchell (1995) FLC 92-601 at 81, 994 and following. In relation to that, all we would say is that every case depends upon its own facts, and that whilst a spouse is certainly not obliged to exhaust his or her property entitlement in order to establish a need for maintenance, it does not follow that a spouse in all circumstances is entitled to retain his or her entire property settlement proceeds intact and call upon the other spouse to fully support him or her. Nor is a spouse who receives a lump sum of money by way of property order necessarily entitled to earmark all of those funds for the purchase of a house or some other capital expenditure, and again seek to depend entirely on the other spouse for weekly support in the form of maintenance payments. It is a question of balance and reasonableness in each case, and in many cases it is certainly appropriate, in assessing the needs of the spouse claiming maintenance, to make some allowance on the income side for potential interest earned upon all or part of the capital coming to that spouse from the property orders...[98] (emphasis added)
[98] Line & Line (1997) FLC 92-729 at [4.87] as quoted in Telfer & Telfer [2016] FCWA 2 at paragraph 300 and Engelbrecht & Moss [2015] FCWA 19 at paragraph 252.
In this case, the Wife did not state in her evidence what she intended to do with any cash amount received. I accept the submission of Mr Williams that in circumstances where there is no evidence that the Wife will invest her money into a new home or some other venture, it is open for her to invest at least some of those monies to increase her available income.[99]
[99] Husband’s Written Submissions (n 3) [62]-[63].
I was not provided with any evidence as to existing interest rates on offer and therefore can only speculate as to what she might earn if she invested some or all of the monies she will receive from the property order. For example, investing $200,000 at 4%[100] could earn her another $8,000 per annum before tax — $154 per week. The annual interest would be $10,000 if $250,000 were invested — $192.00 per week. The figure would of course be higher if the interest rate was higher. The Wife will need to pay legal fees from the monies she receives,[101] thus reducing the amount that she might be able to invest, however, she should retain approximately $300,000, which she can invest and use to meet everyday expenditure.
[100] I accept that there was no evidence produced as to the current investment rates available on deposits at this time. The sums referred to are somewhat speculative and the actual amount the Wife could earn if she invested the monies could be higher or lower than the amount stated.
[101] The Wife’s Cost Notice filed 4 March 2024 evidences an amount of $31,997 plus potentially a maximum amount of $20,000 for the trial.
If the Wife was able to earn interest by investing as described, then a large part, and perhaps all, of the estimated shortfall could be met. Again, what interest she could earn is unknown as no evidence was produced as to the actual interest rates on offer from banks and other institutions. It is possible that she could earn more interest than that contemplated. My calculations were also hampered because of the state of the evidence as to her expenditure. As such, I am only able to estimate the same.
For the purpose of this exercise, if I were to assume that her income could increase from $576 per week to $768 per week, then on the figures set out above as to her expenditure, the shortfall would be reduced to $12 per week. To be clear, $12 per week is likely less than the shortfall that might exist if one was able to factor in her reasonable expenses — if those figures were known. As can be seen, however, I have had to somewhat speculate as to her expenses and it may well be that she could derive a surplus once the monies that she receives from the property order are properly invested.
In any event, the Wife has monies to assist her to meet the shortfall, if one exists. She would still have approximately $50,000 available to her after investing $250,000, enabling her to meet expenses as they arise from time to time. Her income is also likely to increase when Y becomes more self-sufficient in the years ahead, opening the opportunity for her to take on more hours of work, thus improving her financial circumstances.
Given the resources available to the Wife once she receives the monies from her property order, I am satisfied that the Wife will be able to maintain herself adequately.
Conclusion regarding the Wife’s Claim for Spousal Maintenance
For the reasons stated above, and after having considered the relevant matters set out in s 75(2) as detailed earlier in these Reasons, I am not satisfied that there should be a payment of spousal maintenance by the Husband to the Wife. The Wife has not met the threshold requirements of s 72. Further, I am not satisfied that, in all the circumstances, it would be proper to make an order for either lump sum or periodic maintenance in favour of the Wife.[102] I reach this conclusion even though I am satisfied that the Husband has the capacity to make a payment of periodic spousal maintenance if it was ordered. The Wife’s application for spousal maintenance will be dismissed.
[102] FLA (n 1) s 74.
I will make the Orders set out at the commencement of these Reasons.
I certify that the preceding one hundred and eleven (111) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Turnbull. Associate:
Dated: 28 June 2024
0
27
2