Petrucci and Petrucci
[2009] FamCA 722
•11 August 2009
FAMILY COURT OF AUSTRALIA
| PETRUCCI & PETRUCCI | [2009] FamCA 722 |
| FAMILY LAW – PROPERTY SETTLEMENT – Assets and Liabilities – Contributions – Adjustments – Just and equitable – Superannuation |
| Family Law Act 1975 (Cth) ss 75, 79 |
In the Marriage of Hickey (2003) 30 Fam LR 355
In the Marriage of Omacini (2005) 33 Fam LR 134
Mallett v Mallett (1984) 9 Fam LR 449
In the Marriage of Shewring (1987) l2 Fam LR 139
In the Marriage of Lenehan (1987) 11 Fam LR 615
In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712
In the Marriage of Zyk (1995) 19 Fam LR 797
In the Marriage of Coghlan (2004) 33 Fam LR 414
| APPLICANT: | Ms Petrucci |
| RESPONDENT: | Mr Petrucci |
| FILE NUMBER: | SYC | 1489 | Of | 2008 |
| DATE DELIVERED: | 11 August 2009 |
| PLACE DELIVERED: | Sydney |
| JUDGMENT OF: | Judicial Registrar Loughnan |
PLACE HEARD: Sydney
| HEARING DATE: | 16 & 17 July 2009 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT WIFE: | Mr P. Batey |
| SOLICITOR FOR THE APPLICANT: | Watts McCray Lawyers |
COUNSEL FOR THE RESPONDENT : | Mr R. Lethbridge SC | |
| SOLICITOR FOR THE RESPONDENT | Stacks Family Law | |
Orders
The interim spousal maintenance order contained in Order 1 of the Orders of 2 June 2008 is discharged from the date of these orders.
The parties are to forthwith do all things and sign all documents necessary to cause the net proceeds of sale of the former matrimonial home held in a controlled monies account in the names of Watts McCray and Stacks Family Law on behalf of the parties, together with interest accrued thereon, to be divided in the following proportions:
2.1 $1,070,337 to the wife;
2.2any sums owing to the wife under previous orders for costs or maintenance to the wife; and
2.3 the balance to the husband.
Pursuant to paragraphs 90MT(1)(b) of the Family Law Act, as amended, whenever a splittable payment becomes payable in respect of the interest held by the husband, Mr Petrucci, member number … in the MacQuarie Wrap Solutions Fund, the wife, Ms Petrucci, is entitled to be paid an amount calculated in accordance with the Family Law (Superannuation) Regulations 2001, using a base amount in the sum of $52,245 at the operative date and there shall be a corresponding reduction in the entitlements the husband would have had in the said Fund but for this order.
Having been afforded procedural fairness, orders 3, 4 & 5 bind the Trustee of the MacQuarie Wrap Solutions Fund to observe the requirements of the Family Law Act and the Family Law (Superannuation) Regulations 2001.
The operative time for order 3 is 4 days after the date of service of the sealed Orders on the Trustee.
The husband shall forthwith do all acts and things and execute all documents necessary to cause the transfer of the Toyota Prado motor vehicle to the wife and shall discharge all liabilities in relation to that vehicle at his cost.
Upon compliance with order 6 the wife shall indemnify the husband and shall keep him indemnified in relation to all further liabilities in respect of the vehicle.
Each party shall otherwise retain all other assets currently in his or her possession, custody or control, including, but not limited to shares, stock options, funds at bank, motor vehicles, and furniture and effects.
In the event either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these Orders, then the Registrar of the Family Court of Australia shall be appointed pursuant to Section 106A of the Family Law Act 1975 (Cth) to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of Affidavit.
The applications in relation to spousal maintenance are otherwise dismissed.
Each of the parties is at liberty to re-list this matter on 48 hours notice to each other in relation to the form of these orders within 14 days and otherwise on seven days notice for the purposes of implementation of all or any part of these Orders.
IT IS NOTED that publication of this judgment under the pseudonym Petrucci & Petrucci is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 1489 of 2008
| MS PETRUCCI |
Applicant
And
| MR PETRUCCI |
Respondent
REASONS FOR JUDGMENT
After a marriage spanning 14 years the parties cannot agree on a settlement of their property.
Applications
It transpired during final submissions that the wife does not seek the orders set out in her Initiating Application filed 14 March 2008. In particular she does not seek a splitting order. The wife seeks final orders in accordance with a minute of orders foreshadowed in final submissions and provided to my chambers at about 4.30 pm on 17 July 2009. She seeks:
1.That the Wife be solely entitled to the funds contained in the Controlled Monies Account held in the name of Watts McCray Lawyers and Stacks Family Law, being the net proceeds of sale of the property at [Q].
2.That in the event the Court fails or declines to make an Order in terms of Order 11 herein, that the Husband pay to the Wife a sum equal to 5% of the net value of the pool of assets, superannuation and resources as found by the Court, such sum to be paid from and be a charge against bonuses received by the Husband from time to time from his employer, [B Business] or in the event that the Husband’s employment with [B Business] is terminated, from any bonus, redundancy or termination payment received by him from [B Business].
3.That in the event that interest earned on the Controlled Monies Account attracts taxation, that each of the parties be responsible for the tax on the amount received by them pursuant to these Orders.
4.That within twenty-eight (28) days of the date of this Order, each party shall do all acts and things necessary to cause the following simultaneously:-
4.1.Transfer the Toyota Prado Grande motor vehicle to the sole name of the Wife at the cost of the Husband;
4.2.Discharge of all liability in relation to the Toyota Prado Grande motor vehicle at the cost of the Husband; and
the Wife hereby indemnifies and shall keep indemnified the Husband in relation to all liabilities in respect of the Toyota Prado Grande motor vehicle whenever and however arising.
5.That, as between the parties, the Wife shall be solely responsible for all other personal liabilities, credit card liabilities and personal taxation liabilities in her sole name, now and in the future, and shall indemnify and keep indemnified the Husband in relation to all such liabilities, however and whenever arising.
6.That, as between the parties, the Husband shall be solely responsible for all other personal liabilities, credit card liabilities and personal taxation liabilities in his sole name, now and in the future, and shall indemnify and keep indemnified the Wife in relation to all such liabilities, however and whenever arising.
7.That, as between the parties, and subject to the above paragraphs, the parties shall each respectively retain all interest in and entitlement to:-
7.1.All personal property now in his or her respective possession and or control;
7.2.All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his or her sole name respectively; and
7.3.All interests in life insurance policies and superannuation funds standing in his or her sole name respectively.
8.That a declaration be made pursuant to Section 81 of the Family Law Act 1975 (Cth) that the parties intend these Orders to finalise and determine all financial relations and issues between them and to avoid further proceedings between them.
9.That in the event either party refuses or neglects to execute any deed, document or instrument necessary to give effect to all or any of these Orders, then the Registrar of the Family Court of Australia shall be appointed pursuant to Section 106A of the Family Law Act 1975 (Cth) to execute such deed, document or instrument in the name of the said party and do all acts and things necessary to give validity and operation to the deed, document or instrument upon the Registrar being provided with verification of such refusal or failure by way of Affidavit.
10.That either party be granted leave to re-list this matter on seven days notice for the purposes of implementation of all or any part of these Orders.
Spouse Maintenance
11.That the Husband pay to the Wife by way of spouse maintenance a sum of $9,356 per calendar month, to be paid on the first of each month by irrevocable direct debit from the account to which the Husband’s salary is paid, such sum to be subject to annual indexation.
12.That the Husband pay the Wife’s costs of and incidental to these proceedings.
The husband seeks orders in accordance with a Minute first provided during final submissions. He seeks:
1.Order that Order 1 of the Orders of 2 June 2008 be discharged from the date to which it stands paid.
2.Order that the nett proceeds of sale of the former matrimonial home held in a controlled monies account in the names of Watts McCray and Stacks / Family Law on behalf of the parties, together with interest accrued thereon, be divided in the following proportions :
2.1 $924,046.00 to the Wife, and
2.2 the balance to the Husband.
3.Order of the Family Court of Australia that, pursuant to paragraphs 90MT(1)(b) of the Family Law Act, as amended, whenever a splittable payment becomes payable in respect of the interest held by the Husband, [Mr Petrucci], member number […] in the MacQuarie Wrap Solutions Fund, the wife, [Ms Petrucci], shall be entitled to be paid a base amount of $103,955.00 from the splittable value received by the Husband and there shall be a corresponding reduction in the entitlements the Husband would have had in the said Fund but for this order.
4.Order that having been afforded procedural fairness, these orders bind the Trustee of the MacQuarie Wrap Solutions Fund to observe the requirements of the Family Law Act and the Family Law (Superannuation) Regulations 2001.
5.Order that the operative time for these Orders is 4 days after the date of service of the sealed Orders on the Trustee.
6.That the Husband do all acts and things and execute all documents necessary to cause the transfer of the Prado motor vehicle to the Wife.
7.Order that each party otherwise maintain all other assets currently in their possession, custody or control, including, but not limited to shares, stock options, funds at bank, motor vehicles, and furniture and effects.
Affidavits
The wife relied on the following documents:
a. Initiating Application filed 14.03.2008
b. Affidavit of the Wife filed 19.06.2009
c. Updated Financial Statement filed 19.06.2009
The husband relied on the following documents:
a.Response to an Application for Final Orders dated 30 May 2008
b.Husband’s Financial Statement sworn 30 May 2008, filed 2 June 2008.
c.Updated Financial Statement, sworn 22 October 2008, filed 31 October 2008.
d.Husband’s Updated Financial Statement sworn & filed 19 May 2009.
e.Husband’s Affidavit sworn and filed 19 May 2009.
f.Husband’s Affidavit sworn and filed 16 July 2009.
Short History
As at the date of the hearing the wife was 40 years of age and the husband was 48. They were married in January 1995 and separated on 31 August 2007. The parties are not divorced.
Children
There are two children of the marriage:
Wwho was born in September 1999 and as at the date of the hearing was 9 years of age; and
L who was born in July 2002 and as at the date of the hearing was nearly 7 years of age.
Background facts
The husband was born in the United States of America in 1960.
The wife was born in Australia in 1969.
In January 1989 the husband relocated to Australia and commenced employment with C Business as an executive. In 1989 the wife commenced employment with C Business in an administrative role.
In 1993 the husband commenced employment with D Business as a Senior Manager.
On 28 January 1994 the husband purchased the property at N for $265,000. The husband funded the purchase with savings and a mortgage to Citibank.
The parties were married in Sydney in January 1995.
With her brother, the wife had an interest in a property in E. She also owned a motor vehicle bought 2 years earlier for $10,000.
The husband owned:
·N property
·a 1989 Toyota Landcruiser motor vehicle,
·589 C Business shares
·an interest in Vanguard Group portfolio in the USA
·BT Lump Sum Superannuation $8,721 as at 30 June 1994 and $9,253.46 as at 30 June 1995
·Mercantile Mutual Life Superannuation valued at $13,261.45 as at 30 September 1994
The husband had a debt to Citibank secured on the N property, credit card debts and a car loan with GIO.
In 1995 the wife commenced employment with S Company.
In 1996 the wife’s brother bought her interest in the E property for $70,000.
In 1996 the parties purchased the property at T (“T property”) for $334,000 in the husband’s sole name.
On 23 June 1997 the husband transferred to the Singapore branch of D Business on secondment for three years.
On 30 June 1998 the parties purchased a unit at P (“P property”) for $347,015.
In November 1998 the husband was retrenched from D Business.
In September 1999 the husband commenced employment with B Business as an executive.
W was born in September 1999.
On 22 December 1999 the parties bought a property at Q (“Q property”) for $972,500.
In February 2000 the husband was retrenched from B Business.
On 7 April 2000 the N property was sold for $494,000. The husband applied the net proceeds of sale of $14,511.25 to general living expenses.
On 3 October 2000 the husband commenced an employment contract with F Business as an executive.
In June 2001 the husband was retrenched from F Business.
On 13 June 2001 the parties sold the D property for $468,000, receiving net sale proceeds of $153,807.49. The parties applied the net proceeds by paying out a NAB car loan on a Landrover Discovery motor vehicle in the sum of $55,193.42 and invested the balance in the NAB off-set account.
In August 2001 the husband commenced an employment contract with M Business as a Consultant.
In April 2002 the husband commenced employment with B Business as an executive.
L was born in July 2002.
In 2005 the husband was appointed as a Director of B Business.
In 2006 the wife was employed for two months as a Sales Administrator with R Company.
Between March 2006 and December 2007 the wife managed the renovations of the Q property.
The parties separated under one roof on 31 August 2007.
On 21 November 2007 the parties attended a Round Table Conference and reached agreement in relation to interim property, parenting and child support matters.
On 13 December 2007 the parties sold the Q property for $3,100,000, receiving net sale proceeds of $1,232,923.71.
On 16 February 2008 the parties sold the P property for $419,990.00, receiving net sale proceeds of $20,337.62.
In February 2008 the husband was promoted. His base salary increased to $302,531.00 gross per annum plus a bonus for the 2007 financial year of $273,640.
The wife filed an Initiating Application in the Family Court of Australia at Sydney seeking Interim and Final Orders on 14 March 2008.
On 2 June 2008 orders were made for the husband to pay the wife $2,339.00 per week by way of spouse maintenance and the wife’s costs on an indemnity basis.
On 26 August 2008 the parties attended a Conciliation Conference.
On 6 October 2008, 20 October 2008, 3 November 2008, 17 November 2008, 30 December 2008, 12 January 2009, 9 February 2009, 9 March 2009, 23 March 2009, 6 April 2009, 4 May 2009, 18 May 2009, 1 June 2009 and 15 June 2009 the husband failed to pay the wife spouse maintenance in accordance with the Orders made on 2 June 2008.
On 31 October 2008 the husband filed an Application in a Case to vary the Orders made on 2 June 2008.
On 10 November 2008 the wife filed an Application in a Case seeking that the husband produce financial disclosure documents.
On 14 November 2008 orders made for the husband to produce documents.
On 20 November 2008 the wife filed a Third Party Debt Notice against the National Australia Bank to recover moneys due to her pursuant to the Orders made on 2 June 2008.
On 15 December 2008 the wife filed a Response to an Application in a Case seeking that the husband’s Application in a Case be dismissed and Orders enforcing the husband’s obligation.
On 19 December 2008 orders were made requiring the husband to provide B Business with an Irrevocable Direction & Authority to satisfy his spouse maintenance liability and that the husband pay the wife’s costs. The husband did not provide the Business with that Irrevocable Direction & Authority.
On 5 February 2009 the wife filed a Third Party Debt Notice against B Business to recover moneys due to her pursuant to the Orders made on 2 June 2008.
On 16 February 2009 the husband’s application for Leave to file an Application for Review of the Orders made on 2 June 2008 was dismissed and the husband was ordered to pay the wife’s costs.
On 18 March 2009 the wife filed a further Third Party Debt Notice against B Business to recover moneys due to her pursuant to the Orders made on 2 June 2008.
On 6 April 2009 the husband filed a further Application in a Case seeking to vary the Orders made on 2 June 2008.
On 30 April 2009 the wife filed a further Third Party Debt Notice against B Business to recover moneys due to her pursuant to the Orders made on 2 June 2008.
On 1 May 2009 the husband’s base salary increased to $380,000 gross per annum plus a bonus of approximately $182,593.00 which the husband will receive in two equal cash instalments on 1 May 2010 and 1 May 2011.
On 4 May 2009 the wife filed a Response to Husband’s Application in a Case.
On 9 June 2009 the matter was re-listed in relation to the husband’s failure to make proper disclosure and the husband’s application for a stay of the enforcement of Third Party Debt Notice and a Costs Assessment Order.
On 11 June 2009 the husband filed a further Application in a Case seeking to stay the operation of the Third Party Debt Notice and Costs Assessment Orders issued by Registrar George.
On 12 June 2009 orders were made including an order that the husband pay the Wife’s costs.
The evidence of the witnesses
The only witnesses called for cross-examination were the parties. There are few factual disputes and therefore findings on credit have little or no relevance.
The approach in proceedings under section 79
The case law reveals that there is a permissible approach to the determination of an application brought pursuant to the provisions of s 79. That approach involves four inter-related steps. First, I am to make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Second, I should identify and assess the contributions of the parties within the meaning of s 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Third, I should identify and assess the relevant matters referred to in s 79(4)(d), (e), (f) and (g), (the other factors) including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourth, I should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case. [1]
[1] This summary of the effect of the authorities is paraphrased from the comments of the Full Court in In the Marriage of Hickey (2003) 30 Fam LR 355 at 370
There is no mention of steps in section 79 but it is convenient to approach the exercise of discretion in a structured way. The Full Court has supported such an approach.
The property of the parties at the date of the hearing
The Court is required to make a finding as to the property of the parties. That involves identifying assets, liabilities and financial resources and their values.
There are circumstances whereby assets may be included in the list for division although they no longer exist. The same logic would apply to the exclusion from the relevant list of liabilities, debts that do exist at the date of the hearing. In the Marriage of Omacini (2005) 33 Fam LR 134 the Full Court noted:
[30] To date, three clear categories of cases have emerged where the court has determined that it is appropriate to notionally add back to the pool of assets, that is, assets that no longer exist. They are:
(a) Where the parties have expended money on legal fees. In In the Marriage of DJM and JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; [1998] FamCA 97 the Full Court said at [11.6]:
[11.6] For reasons set out in Farnell, s 117 provides that each party to proceedings under the Family Law Act shall bear their own costs unless the Court otherwise orders. Failing to add back monies expended by parties on costs frequently has the effect of defeating the policy of s 117 by permitting the pool of available assets for distribution between the parties to be diminished by any monies that either of the parties have managed to spend on their costs up to the date of trial. We are of the view that the normal approach ought be to add costs already paid back into the pool. Whilst there may be cases where that approach is inappropriate, the reasons why it is not taken ought normally be spelt out.
(b) Where there has been a premature distribution of matrimonial assets. In In the Marriage of Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569 Nicholson CJ as he then was with whom Fogarty and Jordan JJ agreed, said at Fam LR 509; FLC 81,654:
In my view, what occurred in this case, as I said during the course of argument was, in fact, a premature distribution of a proportion of the matrimonial assets. What the husband did was to distribute to himself an asset in which the wife had a legitimate interest. In such circumstances I consider that it would be unjust in the extreme to simply treat such conduct by the husband as a matter to which regard should be had under section 75(2). It seems to me that the husband has had the benefit of that money. Had he retained, for example, the taxi licence instead of selling it, that would have been brought into account as an item of property which would have been dealt with in the same way as the remaining items of property in this case. Accordingly, I am of the view that the correct way in which to deal with the husband’s receipt of those moneys is to bring them into the pool of assets on a notional basis and make a distribution accordingly.
(c) In the circumstances outlined by Baker J in In the Marriage of Kowaliw (1981) 7 Fam LN N13; (1981) FLC 91-092 at FLC 76,644:
As a statement of general principle, I am firmly of the view that financial losses incurred by parties or either of them in the course of a marriage whether such losses result from a joint or several liability, should be shared by them (although not necessarily equally) except in the following circumstances:
(a) where one of the parties has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets, or
(b) where one of the parties has acted recklessly, negligently or wantonly with matrimonial assets, the overall effect of which has reduced or minimised their value.
Conduct of the kind referred to in para (a) and (b) above having economic consequences is clearly in my view relevant under s 75(2)(o) to applications for settlement of property instituted under the provisions of s 79.
The parties have settled a joint balance sheet but the following issues remain to be determined:
The balance of the National Australia Bank account
At items 5 and 29 of the draft list of assets and liabilities, the wife seeks to read back the balance of the NAB account at separation of $4,812. The husband opposes that course and in turn claims that account as representing a joint debt of $37,859 being part of $47,859 borrowed by him since separation. The difference of $10,000 relates to school fees and that is conceded by the husband to be properly his debt.
The best part of two years has passed since separation and life and associated living costs have not stopped during that period. The general approach is to identify assets and liabilities as at the date of the hearing. I will not read back $4,812 back into the pool.
As to the debt of $37,859, this is part of an argument on behalf of the husband that he has gone backwards over the period since spouse maintenance orders were made in June 2008. The husband seeks redress for this in a combination of ways. He seeks:
· credit for debts he incurred in meeting the obligation;
· that the interim order be discharged as at the date to which it stands paid (effectively forgiving the arrears);
· to be allowed to retain the benefit of proceeds of assets sold since separation; and
· that there be a 5% adjustment to the finding on contributions overall, based on the imbalance of contributions since separation.
If I accepted all of those approaches the effect would be that the wife paid the husband spouse maintenance since separation. There is and was never a basis for such an obligation. Dealing with the first approach – seeking credit for debts incurred in meeting this obligation (among others), if that approach was adopted the effect would be to have the wife contribute, after the event, to her own support. In my view that is not permissible. There is a front door for a party seeking redress in relation to interim spouse maintenance orders. The order can be challenged ab initio by a review or it can be varied because of a change in circumstances. Here the husband applied to review the decision but on 16 February 2009 he withdrew that application. By his Application in a Case filed 4 April 2009 the husband applied to vary the order. Ultimately that application was consolidated with this hearing. Later in these reasons I will address the husband’s application to discharge the interim order as at the date to which it stands paid.
As to this issue being considered in the context of the balance of contributions after separation and I will undertake that exercise. However, outside those two mechanisms I will not take a step in the fixing of the relevant assets and liabilities, which has the effect of belatedly reversing all or part of the earlier order. Therefore I will not include a debt of $37,859 at item 5 or item 29.
Add backs associated with $50,000 distributed to each of the parties
The parties had a joint account at separation. After separation they reached an informal agreement about debts and assets. The parties divided a joint fund by taking $50,000 each. The parties agree that the two amounts of $50,000 will be read back into the balance sheet. The husband paid his $50,000 into the joint account. The wife later withdrew $23,000 from that account in two withdrawals. The husband says – the wife had the use of $23,000 of his $50,000 and therefore $73,000 should be read back on her side and only $27,000 on his. The wife says that the husband had earlier withdrawn $25,000 from that same joint account. The problem here is that the agreement is not in evidence and in any event was never binding. The husband does not recall what, if any, impact the agreement had on transactions on the subject account. I cannot make the finding the husband seeks. The evidence does not permit me to make a finding about whether the parties had equal or unequal access to joint funds after separation.
If there was to be two lots of $50,000 added back then they cancel each other out and there is no need to add anything back. The husband bears the onus of establishing that the extra $23,000 should be added back on the wife’s side of the ledger and he cannot satisfy me that it was not balanced by his earlier access to that same account. I will not read any amount back into the fund in relation to this issue.
The husband’s post separation credit card debts
At items 25, 26 & 27 the husband seeks the inclusion of his credit card debts in the list of relevant liabilities. He owes $5,115 on a Citibank credit card, $28,762 on a National Australia Bank Visa card and $549 on an American Express card. The wife opposes that course as they were incurred after separation. While some proportion of those debts may relate to the husband’s living expenses, this is not a case where the parties have agreed to include their post-separation debts.
For the same reason as the above finding in relation to the overdraft debt to the NAB, I will not include the husband’s credit card debts at items 25, 26 & 27.
Add back for the sale of MAN shares
The husband sold shares after separation for $45,772. It is conceded that at least some of the proceeds were paid back into the Macquarie Bank margin loan facility established by the parties to fund share purchases. I will not add the proceeds back as a notional asset.
Inclusion of the negative value of the husband’s Volvo motor vehicle
The husband seeks that the difference between the value of his motor vehicle and the associated debt be included in the list of liabilities. The husband drove a Saab motor vehicle at separation. It became unserviceable and he sold it for $2,000. The husband leased a Volvo motor vehicle to replace the Saab. He neither consulted with the wife about that nor obtained her agreement after the event. However, in the context of these proceedings, his replacing a motor vehicle should be seen as a normal living expense. This is a case where at all relevant times family funds have been applied to the provision of motor vehicles for the parties. I will include $2,000 for the Saab, for which the husband has not accounted to the wife but will also include the liability related to the Volvo.
On the basis of the parties’ agreement and those findings, the assets and liabilities are:
Assets
Value
Sale proceeds of Q property – joint
$1,395,054
Wife's bank accounts
$11,285
Funds in Watts McCray Trust Account (W)
$511
Citigroup share portfolio (W)
$4,480
2008 Volvo car (H)
$49,700
Proceeds of sale of Saab motor vehicle (H)
$2,000
Household contents (H)
$15,000
NAB Account No 19… (H)
$0
NAB Account No 47… (H)
$1,716
NAB Account No 81… (H)
$625
St George Bank Account No … (H)
$2,838
Bank of America share portfolio
$11,763
Macquarie Bank Margin Lending Portfolio (H)
$141,402
2002 Toyota Prado Car (driven by wife) (H)
$16,000
Total
$1,652,374.00
Superannuation Interests
Value
Macquarie self managed fund (W)
$57,640
Macquarie self managed fund (H)
$260,575
MLC Superannuation Plan 2 (H)
$293
Vanguard Portfolio Equity (H)
$4,682
Total
$323,190.00
Liabilities
Amount
Macquarie Bank Margin Lending Loan
$99,952
Bank of America Car Loan
$59,502
Bank of America Car Loan - Prado
$11,135
Total
$170,589.00
Net assets
The net non-superannuation assets have a value of $1,481,785 ($1,652,374 - $170,589). There is $323,190 in superannuation.
Financial Resources
The parties agree that the following financial resources exist:
Resources
Amount
The balance of the husband’s 2008 bonus
$81,355
The husband’s Retention Award payable in two instalments 2010 & 2011 (before tax)
$185,368
Total
$266,723.00
Contributions
The obligations placed on the Court by s 79 call for an assessment of the respective contributions of the parties. The manner of assessing contributions has been the subject of previous decisions. The contributions of a parent and homemaker are to be assessed, not in any merely token way, but in terms of their true worth to the building up of the assets[2]. There are said to be risks in taking an overly technical approach to the assessment of the respective contributions of the parties in that the Court can become involved in questions of the quality of contributions which go far beyond the real world expectations of parties[3].
[2] Mallett v Mallett (1984) 9 Fam LR 449; In the Marriage of Ferraro (1992) 16 Fam LR 1
[3] In the Marriage of Shewring (1987) l2 Fam LR 139
As to whether the Court should apply the considerations in section 79(4) to the assets globally or asset by asset, the authorities have it the latter approach is preferred, in appropriate circumstances either approach is permissible and sometimes the asset by asset approach is best. See In the Marriage of Lenehan (1987) 11 Fam LR 615; In the Marriage of Norbis (1986) 10 Fam LR 819; FLC 91-712; In the Marriage of Zyk (1995) 19 Fam LR 797.
In the Marriage of Coghlan (2004) 33 Fam LR 414 the Full Court allowed that superannuation may be included in the list of property drawn up as “the first step” in the determination of proceedings under s 79, whether or not a splitting order is sought in those proceedings. The Full Court suggests that that:
“… approach could be adopted where the parties agree that it should be adopted, or where the court is satisfied that the superannuation interest is indeed property within the meaning of the definition of property contained in s 4(1), or if the interest is not within that definition, but is of relatively small value in the context of the value of the other assets in the case, or there are features about the interest which leads the court to conclude that this would be an appropriate approach.”
Here the parties have applied the same considerations to superannuation and non-superannuation assets save only in respect of the form of orders. On that basis, I will also deal with the assets globally except for the final step.
The balance of contributions is largely agreed. There is a dispute about things done after separation. Dealing briefly with the type of contributions made:
Section 79(4)(a) Contributions
Financial contributions, both direct and indirect were made by each of the parties.
Both parties made an initial financial contribution. The wife had a motor vehicle and an interest in a property that later realised $70,000. The husband brought in his equity in the N property, some superannuation and personalty. It is not possible to identify the extent of his equity in the N property. The calculation is confused by the fact that the parties borrowed against the property after the commencement of the marriage.
The parties each had paid employment.
The wife worked for S Company from 1995 until W was born in 1999. For two months in 2006 she worked for R Company as a Sales Administrator, 9.30 am to 2.00 pm 3 days a week.
The husband’s taxable income[4] from his work as senior business executive was:
[4] Exhibit 7
Year ended 30 June
Income
Tax refund
1995
$0
$0
1996
$0
$0
1997
$174,325
$1,484.86
1998
$3,276
$632.53
1999
$0
$423
2000
$256,597
$24,827.82
2001
$189,370
$20,108.95
2002
$27,444
$19,656.26
2003
$365,517
$12,622.46
2004
$409,789
$191,617.02
2005
$416,234
$195,322.09
2006
$426,045
$37,008.63
2007
$509,927
$20,749.98
2008
$459,584
$7,397.18
In the financial year ending 30 June 2000 the husband earned SG$688,332 in Singapore, including a redundancy payment.
There is no admissible evidence about the wife’s taxable income.
Section 79(4)(b) contributions
This provision deals with direct and indirect non-financial contributions other than those made in the form of parent and homemaker contributions.
Members of the wife’s family assisted with painting and carpeting the N property.
Between March 2006 and December 2007 the wife managed the renovations of the Q property. She located tradesmen, sourced materials and supervised the project. The wife organised to have trees removed, obtaining quotes and council permission. She assisted the builder in removing the front garden, fence, front path and veranda. The wife redesigned the landscaping for the front garden. She selected the plants and helped the builder install the plants and watering system. The wife’s father assisted with the painting of the new front wrought iron fence. The fence was installed by the wife’s brother. The wife organised the final alterations and adjustments to the property so that the renovations could be approved. She organised the approval process with the builder and the council. The wife liaised with the conveyancer in relation to the contract for sale. She prepared the house for inspections prior to sale.
Section 79(4)(c) contributions
This provision deals with contributions in the form of parent and homemaker contributions.
The wife made a greater contribution by way of parent and homemaker, than did the husband. Adding to that responsibility was the fact of the husband’s business travel and his hours of work. The wife says that the husband generally woke at 7.00 am and left for work at 8.00 am, returning at 8.00 pm or 9.00 pm.
The wife has been involved with the children’s schools. She has assisted with canteen duties, sporting carnivals, presentations, concerts, reading groups, debates and parent/teacher occasions.
Conclusion on Contribution
It is agreed that the parties’ contributions were equal to the date of separation. The wife contends that the contributions were equal overall. The husband contends that his contributions since separation were greater than those of the wife, bringing the overall balance of contributions to 55% by him and 45% by the wife.
It is agreed that the balance of contributions was shared along traditional lines, with the husband making the greater financial contribution and the wife making the greater contribution as homemaker and parent.
The non-financial contributions favour the wife. The wife had more of the parent and homemaking with the husband in full-time employment and travelling.
The point of difference in the cases made on behalf of the parties is the significance of the financial support provided by the husband, to the wife’s household, since separation. The husband asserts that the impost on him since separation in the form of child support (both periodic payments and non-agency payments such as school fees) and spousal support in the form of direct payments such as car payments and periodic sums, caused an imbalance of contributions in his favour. He makes that argument despite the fact that he did not make all of the payments voluntarily. Some of the spousal maintenance was recovered through enforcement action by the wife and some remains unpaid. I accept that the question of whether the contributions were volunteered or forced is not relevant to the assessment of those contributions. In my view there is something in the husband’s case on this point. The arrangement since separation has caused a financial burden far greater than anything the husband experienced during the marriage. The plain fact is that he has provided virtually all of the financial support to two households. True it is, despite that impost he was able to maintain a level of discretionary expenditure on himself. Nevertheless, a part of the cost of the support he provided will be carried by him in the form of ongoing debt.
The adjustment should not be as great as 5%. In the context of this case 5% makes a difference between the parties of over $180,000 in superannuation and non-superannuation assets. In effect that would have the wife repaying much of the support provided. Further, an adjustment of that size because of an imbalance in contributions over less than 2 years does not give proper recognition to the valuable contributions made by the parties over the preceding 12 years. I will allow an adjustment of 2%.
This was a marriage of substantial duration, involving very considerable contributions. The submissions of the parties reflect the tight range of dispute between the parties. I find that the various contributions of the parties would properly be acknowledged by a finding that the husband made 52% of the contributions and the wife, 48%.
The other matters in Section 79
Once contributions have been assessed, the other factors in section 79(4) need to be considered. They are:
Section 79(4) (d)
Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the parties. No relevant effect is identified in the evidence.
Section 79(4)(e) - Section 75(2) Factors
The relevant matters in Section 75(2) would seem to be paragraphs (a), b), (c), (d), (g), (j), (k) & (na).
(a) the age and state of health of each of the parties;
First, as to the age and state of health of each of the parties. The wife and husband are 40 years of age and 48 years of age respectively. There is no relevant evidence about the health of either party.
(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;
The wife’s income is $724 per week made up of $677 by way of child support payments and $47 by way of a Family Tax Benefit and Parenting Payment.
The wife lives in rented premises with the parties’ children. The children have no income. The wife has a friendship with a man who occupies another property in the block where she lives. They have had a romantic relationship and have travelled overseas together on at least one occasion but the wife does not plan to live with him.
The wife’s expenses are as follows:
Expense Amount Rent $650.00 Motor vehicle comprehensive insurance – NRMA $42.00 Motor vehicle registration Toyota Prado $7.00 Other expenses. $2,590.00 Wife Children Food $300 $150 House supplies $50 $30 Electricity $50 $40 Telephone $80 $0 Petrol $80 $40 Car maintenance $30 $20 Fares and parking $25 $0 Clothing and shoes $250 $100 Children’s activities $0 $100 Child minding $0 $75 Medical dental and optical $30 $0 Entertainment & hobbies $200 $100 Holidays $200 $200 Chemist pharmaceuticals $40 $30 Repairs furnishings and appliances $10 $5 Dry cleaning $15 $5 Books and magazines $20 $5 Gifts $40 $40 Hairdressing, toiletries $70 $10 Gym membership, personal trainer, yoga & tennis $150 $0 $1640.00 $950.00 $3,289.00
The wife has a weekly deficit.
Evidence about the wife’s assets and liabilities is set out earlier in these reasons.
As to her earning capacity, the wife has been pursuing paid employment. She has not seen appropriate part-time positions but has responded to applications for full-time jobs in administrative support including shopping centre management and sales support in Real Estate. I take it from her comments in cross-examination that she is not hopeful of obtaining a suitable part-time position and will need to work full-time. For that purpose she will make use of the after hours school care arrangements provided by the schools. That will involve a cost. The jobs she has been interested in pay about $40,000 per annum. We do not live in times of full-employment. The wife has been out of the paid workforce for a considerable period and even then, she was not remunerated at a high level. She could not expect an income of the order of that enjoyed by the husband. There is reason for confidence about the wife securing a paid position if she wants a job but that is not to say a job, or an appropriate position will be easy to find in the current job market.
The husband earns $8,782 per week made up of his wages at B Business of $5,610 per week, interest of $2 per week, employment benefits in relation to motor vehicles, computer and expense allowance of $1,700 per week and a bonus which for the 2008 calendar year represents $1,470 per week. He too lives alone but for the days the children live with him.
The husband puts his expenditure as follows (although the arithmetic in his latest Financial Statement is wrong in part):
Expense
Amount
Income tax
$2,854.00
Superannuation contributions for both parties
$514.00
Rent
$921.00
Income protection insurance – CommInsure
$68.00
Motor vehicle comprehensive insurance – AAMI
$112.00
Health Insurance - MBF
$47.00
Motor vehicle registration Toyota Prado & Volvo
$23.00
Hire purchase / lease agreements on Toyota Prado & Volvo – B Business
$518.00
Visa card payments NAB & Citibank (min payment $266)
$1,268.00
American Express repayments (min payment $67)
$175.00
Maintenance payments for the benefit of the wife and children
$2,965.00
Other expenses.
$2,568.00
Wife
Children
Food
$150
$100
House repairs
$25
$0
Electricity
$12
$0
Telephone
$64
$32
Petrol
$25
$25
Car maintenance
$12
$0
Fares and parking
$180
$20
Clothing and shoes
$120
$80
Children’s activities
$0
$50
Child minding
$0
$75
Medical dental and optical
$80
$30
Entertainment & hobbies
$100
$100
Holidays
$33
$67
Education expenses
$0
$731
Chemist pharmaceuticals
$20
$10
Dry cleaning
$23
$0
Books and magazines
$15
$15
Gifts
$30
$30
Hairdressing, toiletries
$20
$0
Other commitments
$294
$0
Sub-total
$1203.00
$1365.00
$12,033.00
There is no suggestion that the husband is not fully exercising his earning capacity.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
W is 9 years of age and attends a private school. L is nearly 7 years of age and attends a private school. The children live with the husband five nights a fortnight in school term – every second weekend and overnight each Tuesday. They are usually with him for one half of the school holidays.
(d) commitments of each of the parties that are necessary to enable the party to support:
himself or herself; and
a child or another person that the party has a duty to maintain;
(e)the responsibilities of either party to support any other person;
I have set out the evidence in relation to the parties’ expenses.
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
any law of the Commonwealth, of a State or Territory or of another country; or
any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia,
and the rate of any such pension, allowance or benefit being paid to either party;
As is recorded above, the wife receives the Family Tax Benefit. The parties have interests in superannuation funds.
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
The parties enjoyed a good standard of living during the marriage. The husband expressly referred to his maintenance of an appropriate standard of living in dealing with cross-examination about his current expenditure. For example, he recognises that at $921 per week his rental is high but having considered that fact has not sought to find cheaper accommodation. He agreed that two items he recently bought from Tiffany’s were gifts for someone other than his wife. He expects to maintain expenditure on entertainment and holidays.
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
There is no evidence of either party planning further study or intending to set up in a new business.
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant;
This is not a significant aspect of the case.
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
The wife undertook the main parenting role and that allowed the husband to commit himself to the travel and work hour demands of senior executive positions.
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
The parties’ arrangement had the wife taking the main parenting role and leaving the husband to pursue full-time employment. His job took him away from home for periods. It is likely that the marriage restricted the wife’s earning capacity in the sense that she was not able to develop a career in any one field and presumably lost the benefits that come with stable, full-time employment such as long service leave and opportunities for promotion.
(l) the need to protect a party who wishes to continue that party's role as a parent;
The wife has been looking for paid employment and has not been able to find any suitable part time employment. The children are not babies and I gather that the wife is resigned to not being available to the children before and after school on all of the days they are with her.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
According to the parties, this is not relevant.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;
(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; and
The parties entered into a Child Support Agreement on 14 December 2007 which was accepted by the Registrar on 14 January 2008. Pursuant to that agreement the husband is to pay the wife an amount by way of periodic indexed sum. The current rate is $2,710.75 per calendar month. The agreement also provides that the husband will pay the children’s school fees (including all tuition and text book fees, uniform charges, after school care fees when the children or either of them is in the husband’s care, excursion fees and or the costs of excursions the parties agree that the children shall attend and any other fee levied by the schools and other related incidentals) together with all costs of private health cover for the children.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
Nothing comes to attention under this provision.
(p) the terms of any financial agreement that is binding on the parties.
I have referred above to the child support agreement. Otherwise there is no binding agreement made between the parties.
Section 79(4)(f)
The parties’ parenting arrangement continues in place. Otherwise, there are no other orders made under the Family Law Act 1975.
Section 79(4)(g)
I have referred to the child support position.
Conclusion
The parties are largely agreed in relation to this issue. The husband argues for an adjustment in favour of the wife of 15% - 20%. That proposal is very much on the basis that the wife receives no award of ongoing spousal maintenance. The wife sought an adjustment of 15% but in final submissions respectfully supported the submission on behalf of the husband of 20%. Understandably that support did not involve any concession about spouse maintenance. The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are:
ØThe husband is eight years older than the wife.
ØThe wife does not have paid employment and despite her intention to actively seek a return to the paid workforce it could take her some time to find a suitable position.
ØThe husband’s income is far greater than any income to which the wife might aspire. This is one of those cases in which the husband’s earning capacity is a valuable, if not the most valuable “asset” of the marriage.
ØThe wife has the children with her for a greater proportion of the time.
ØThe parties established a good standard of living during the marriage and have maintained aspects of that standard of living since.
ØThrough her role in the household, with the children and in support of the husband’s work through related social activities, the wife assisted the husband to build and maintain a successful career.
But for the difference in age, these matters call for an adjustment in favour of the wife. I will make an adjustment of 20%. That would give the wife 68% of the net assets and the husband 32%.
Just and Equitable
The trustee of the MacQuarie Wrap Solutions Fund has been afforded procedural fairness[5] and does not object to orders in the form sought on behalf of the husband. The value of the superannuation interests is agreed. Both parties seek that more of the wife’s settlement be reflected in non-superannuation assets than in superannuation. The husband seeks a splitting order that will divide the current superannuation interests equally. The wife seeks no superannuation split. In amending the Family Law Act 1975 to permit the splitting of superannuation payments the Parliament has indicated a preference for dealing with superannuation in that way. Over recent years Government policy has included encouragements to individuals making better provision for self-funded retirement.
[5] Exhibit 13
There are advantages and disadvantages to superannuation interests. They cannot normally be accessed before the member reaches a certain age and leaves the workforce. The Court can take judicial notice that of recent times many superannuation funds have made a substantial loss. Thus it can be unfair to require one party to retain a disproportionate amount of the superannuation interests and the other to retain a disproportionate amount of the non-superannuation assets. On the other hand, the Court can take judicial notice of the fact that preferential taxation treatment is afforded to assets and income in the form of superannuation after 60 years of age and that ameliorates the disadvantages of taking funds in the form of superannuation compared to accessible assets.
For those reasons, the Court would not lightly leave one party with most of the superannuation interests and the other with mostly non-superannuation assets. That said, of the parties, only the husband is likely to have a satisfactory self funded retirement. I will provide for the wife to take one half of her entitlement to superannuation interests in that form, with the balance adjusted out of non-superannuation interests.
The net non-superannuation assets have a value of $1,481,785 ($1,652,374 - $170,589). 68% is about $1,007,613. The wife wishes to retain the Toyota Prado motor vehicle. It would be easiest to leave the associated debt with the husband. That will not be unfair to him as it will be adjusted as part of his settlement.
The wife will have the benefit of the following non-superannuation assets:
Assets
Value
Wife's bank accounts
$11,285
Funds in Watts McCray Trust Account (W)
$511
Citigroup share portfolio (W)
$4,480
2002 Toyota Car
$16,000
Total
$32,276.00
In order to bring her to 68% of the net non-superannuation assets the wife would receive about $975,337 ($1,007,613 - $32,276).
There is $323,190 in superannuation. 68% of the superannuation is $219,769.20. If the wife is to receive one half of her superannuation entitlement in that form, she would have $109,885 in superannuation. The wife has the benefit of the following superannuation assets:
Superannuation Interests
Value
MacQuarie Wrap Solutions Fund (W)
$57,640
Total
$57,640.00
On those calculations she should receive a split relying on a base amount of about $52,245 ($109,885 - $57,640). Otherwise the parties will retain their superannuation interests. That leaves the wife to receive an adjustment, out of the non-superannuation assets, to allow for the shortfall in superannuation. This should not be a dollar for dollar figure given the restrictions imposed on superannuation and the accessibility of the non-superannuation funds. In other words, there must be a price paid by the wife for, in effect, being allowed to access some of her superannuation straight away and some compensation to the husband for receiving less in the way of non-superannuation assets in his settlement. For a $109,885 shortfall in superannuation I will allow an adjustment of $95,000 to the wife from the net non-superannuation assets. Thus, by way of property settlement, the wife will receive $1,070,337 ($975,337 + $95,000) from the controlled moneys account.
The wife will also owe any current personal debts, including her legal fees.
As is referred to above, the husband owes the wife moneys under previous orders. The arrears were somewhere between $15,000 and $32,746. I understand that there are outstanding Third Party Debt Notices and the extent to which those notices are satisfied will affect the arrears. In addition, there are costs ordered but yet to be quantified. Given the past need for enforcement action by the wife, it would be sensible for any obligations under such orders, that can be quantified within a reasonable time, to be satisfied from the controlled moneys fund prior to payment of the husband’s property settlement from that fund. Subject to any such adjustment the husband would receive the balance of the controlled moneys fund of about $324,717 ($1,395,054 - $1,070,337). In addition, the husband would retain the following non-superannuation assets and liabilities:
Assets Value 2008 Volvo car (H) $49,700 Proceeds of sale of Saab motor vehicle (H) $2,000 Household contents (H) $15,000 NAB Account No 19…(H) $0 NAB Account No 47… (H) $1,716 NAB Account No 81… (H) $625 St George Bank Account No … (H) $2,838 Bank of America share portfolio $11,763 Macquarie Bank Margin Lending Portfolio (H) $141,402 Macquarie Bank Margin Lending Loan -$99,952 Bank of America Car Loan -$59,502 Bank of America Car Loan – Prado -$11,135 Total $54,455.00
Subject to the superannuation splitting order foreshadowed, the husband will retain his superannuation interests:
Superannuation Interests
Value
MacQuarie Wrap Solutions Fund (H)
$260,575
MLC Superannuation Plan 2 (H)
$293
Vanguard Portfolio Equity (H)
$4,682
Total
$265,550.00
In my view those orders represent a just and equitable settlement of the parties’ property.
Conclusion under Section 79
This was a substantial marriage involving very significant contributions by each of the parties. They acquired assets and provided a secure home for their daughters. In the course of over 14 years of cohabitation and since, the parties shared the work of the family in different ways but overall the contributions slightly favoured the husband. The parties agree that there should be a substantial adjustment in favour of the wife.
Spouse Maintenance
Discharge of interim maintenance as at the date to which it stands paid
The husband seeks a discharge of the interim maintenance order as at the date to which that order stands paid. In order to consider that application it would be relevant to identify the date to which the order stands paid. I was not told of an agreed date. It may be that there is no dispute about the arrears. It is the wife’s evidence[6] that the husband owed $32,746 as at 19 June 2009 but that there were two Third Party Debt Notices outstanding. The Notices related to costs as well as maintenance. It is submitted for the husband that he has paid $106,000 of a total obligation of $121,000 and therefore the arrears are (about) $15,000 or one plus months of maintenance.
[6] Paragraph 38 of the wife’s affidavit
The history of the order is as follows:
·The wife filed an Initiating Application in the Family Court of Australia at Sydney seeking Interim and Final Orders on 14 March 2008.
·On 2 June 2008 orders were made, including an order that the husband to pay the wife $2,339.00 per week by way of spouse maintenance.
·On 31 October 2008 the husband filed an Application in a Case to vary the Orders made on 2 June 2008.
·On 15 December 2008 the wife filed a Response to an Application in a Case seeking that the husband’s Application in a Case be dismissed and Orders enforcing the husband’s obligation.
·On 16 February 2009 the husband’s application for Leave to file an Application for Review of the Orders made on 2 June 2008, out of time was dismissed and the husband was ordered to pay the wife’s costs.
·On 6 April 2009 the husband filed a further Application in a Case seeking to vary the Orders made on 2 June 2008.
There being no application for review, the only scope for affecting the interim orders is an application for variation under section 83 or a discretionary decision made in the context of enforcement proceedings. The application for variation was filed on 6 April 2009.
The relevant provision of the Act is Section 83:
FAMILY LAW ACT 1975 - SECT 83
Modification of spousal maintenance orders
(1) If there is in force an order (whether made before or after the commencement of this Act) with respect to the maintenance of a party to a marriage:
(a) made by the court; or
(b) made by another court and registered in the first‑mentioned court in accordance with the applicable Rules of Court;
the court may, subject to section 111AA:
(c) discharge the order if there is any just cause for so doing;
(d) suspend its operation wholly or in part and either until further order or until a fixed time or the happening of some future event;
(e) revive wholly or in part an order suspended under paragraph (d); or
(f) subject to subsection (2), vary the order so as to increase or decrease any amount ordered to be paid or in any other manner.
(1A) The court's jurisdiction under subsection (1) may be exercised:
(a) in any case--in proceedings with respect to the maintenance of a party to the marriage; or
(b) if there is a bankrupt party to the marriage--on the application of the bankruptcy trustee; or
(c) if a party to the marriage is a debtor subject to a personal insolvency agreement--on the application of the trustee of the agreement.
(2) The court shall not make an order increasing or decreasing an amount ordered to be paid by an order unless it is satisfied:
(a) that, since the order was made or last varied:
(i) the circumstances of a person for whose benefit the order was made have so changed (including the person entering into a stable and continuing de facto relationship);
(ii) the circumstances of the person liable to make payments under the order have so changed; or
(iii) in the case of an order that operates in favour of, or is binding on, a legal personal representative--the circumstances of the estate are such;
as to justify its so doing;
(b) that, since the order was made, or last varied, the cost of living has changed to such an extent as to justify its so doing;
(ba) in a case where the order was made by consent--that the amount ordered to be paid is not proper or adequate;
(c) that material facts were withheld from the court that made the order or from a court that varied the order or material evidence previously given before such a court was false.
(3) Subsection (2) does not prevent the court from making an order varying an order made before the date of commencement of this Act if the first‑mentioned order is made for the purpose of giving effect to this Part.
(4) In satisfying itself for the purposes of paragraph (2)(b), the court shall have regard to any changes that have occurred in the Consumer Price Index published by the Australian Statistician.
(5) The court shall not, in considering the variation of an order, have regard to a change in the cost of living unless at least 12 months have elapsed since the order was made or was last varied having regard to a change in the cost of living.
(5A) In satisfying itself for the purposes of paragraph (2)(ba), the court shall have regard to any payments, and any transfer or settlement of property, previously made by a party to the marriage, or by the bankruptcy trustee of a party to the marriage, to:
(a) the other party; or
(b) any other person for the benefit of the other party.
(6) An order decreasing the amount of a periodic sum payable under an order or discharging an order may be expressed to be retrospective to such date as the court considers appropriate.
(6A) Where, as provided by subsection (6), an order decreasing the amount of a periodic sum payable under an order is expressed to be retrospective to a specified date, any moneys paid under the second‑mentioned order since the specified date, being moneys that would not have been required to be paid under the second‑mentioned order as varied by the first‑mentioned order, may be recovered in a court having jurisdiction under this Act.
(6B) Where, as provided by subsection (6), an order discharging an order is expressed to be retrospective to a specified date, any moneys paid under the second‑mentioned order since the specified date may be recovered in a court having jurisdiction under this Act.
(7) For the purposes of this section, the court shall have regard to the provisions of sections 72 and 75.
(8) The discharge of an order does not affect the recovery of arrears due under the order at the time as at which the discharge takes effect.
The husband’s case is based on the fact that there was a shortfall of his income over his liabilities after meeting his child support obligations, interim spouse maintenance and rent of $7,307.67 per month prior to 1 May 2009 and of $4,831.02 after that date. In other words the husband’s argument dates back to the day the order was made. Nothing changed around the date to which the order stands paid. Indeed, on his case, his income increased substantially from May 2009. His key argument is that the provision made for bonuses by his employer after the orders were made, was substantially less than that made for earlier years.
I am not free to revisit the merits of the order made in June 2008 and the husband does not make out a case under section 83. There is no suggestion that the financial circumstances of the wife improved after the order was made. If anything, those of the husband improved after the order was made. There is no significance to the financial circumstances of either party as at the date to which the order stands paid.
That part of the husband’s application that seeks a discharge of the interim order to the date to which it stands paid, is dismissed.
The application for future maintenance
The effect of sections 72 and 74 of the Family Law Act 1975 is that if a party to a marriage is unable to adequately support himself or herself from their own resources, for a proper reason, the other party can be called upon to do so to the extent of his or her reasonable capacity. Those decisions are made by reference to section 75(2).
Here the wife seeks an order that the husband pay $9,356 per calendar month for her maintenance. That would be about $2,160 per week. If that application fails, she seeks a payment equivalent to 5% of the property pool secured against the husband’s future entitlements from his employer.
The husband opposes any such order. It is submitted on his behalf that the wife will have over $900,000 in capital from her property settlement, on the husband’s proposal. It is submitted that with that sum and full-time employment she will be able to support herself. It is submitted that the husband will continue to have a greater income than the wife but that 40% of his net salary will continue to be committed to his child support obligation.
Many of the necessary findings have been made earlier in these reasons.
The wife spends $2,339 per week. For the purposes of spousal maintenance, she has no income. Her expenditure on the children exceeds the child support she receives and I am obliged to ignore any income tested benefit. Therefore the wife has weekly outgoings of $2,339. The difference between the earning capacities of the parties remains. The wife had full-time paid employment until W was born in 1999. Her only other paid position was two months work in 2006 when she worked for R Company as a Sales Administrator, 9.30 am to 2.00 pm on 3 days a week. Thus the parties’ arrangements during the marriage had the wife at home and available to the children. On the basis of her cross-examination it appears that the wife has been actively pursuing paid employment. The jobs for which she has applied pay about $40,000 per annum. There are reasons for confidence about the wife securing a paid position if she wants a job but that is not to say a job, or an appropriate position will be easy to find in the current job market. She may not secure such a position in the short term, let alone immediately. When she secures a job she would pay tax of about $126 on an income of $800 per week. If and when she secures such a position, there will be a cost in the form of after hours school care provided by the children’s schools and other work related expenses
As to whether her expenses are reasonable, the categories and amounts involved are not extraordinary. As with the husband, there are aspects of the wife’s expenditure that would give way to necessity. Indeed, given that the husband failed to meet much of his obligation under the interim orders as it fell due, the wife is likely to have done without some of that expenditure. There is no suggestion that the rate or type of expenditure is in excess of the parties’ expenditure during the marriage. There is evidence that, despite the asserted downturn in the husband’s income, the husband has maintained a level of discretionary expenditure. In his cross-examination, the husband responded to questions about his own expenditure restraint. He pays $921 per week to rent his current accommodation. He conceded that cheaper accommodation would be available. He said that he had considered, but had not acted to reduce his rental obligation. In dealing with this issue he referred to maintaining an appropriate lifestyle.
The difference for the wife in the future, however, will be that she will retain her personalty and superannuation and receive more than $1,000,000 by way of settlement of property. That leaves the wife with decisions to make about how she addresses her needs for appropriate accommodation and for income.
As to the husband’s capacity to pay, the competing submissions relate to the characterisation of the husband’s income. I have referred above to the submissions made on behalf of the husband. The wife refers to the husband’s taxable income of $515,030 and $467,453 for the income tax years ending 30 June 2007 and 2008. The latter figure has him with monthly income in excess of $38,000. On the basis of his declared tax, it is submitted on behalf of the wife that the husband’s available income is $25,688 per month. With $15,746 for his fixed commitments, the husband has about $10,000 per month for his own reasonable needs. The husband has not stopped all discretionary spending. In my view the husband has the capacity to provide support to the wife. In addition to his income, the husband has the potential of the retention bonus which is recorded earlier in these reasons as a financial resource. On the other hand there has been an adjustment in the parties’ property of 20% to the wife for matters including the difference in the financial circumstances of the parties.
Taken together these considerations favour the dismissal of the wife’s application for periodic spousal maintenance.
It is the natural effect of the making of final orders but I will formally order that the interim order for spousal maintenance cease of the date of the order dismissing the wife’s application for ongoing spousal support.
The Orders
The splitting order sought on behalf of the husband, the form of which has been approved by the Trustee, called for the payment of a specified base amount. I have recast the wording to make it clear that the payment would be calculated in accordance with the Regulations, by reference to the base amount. I will give the parties the opportunity to bring the matter back before me within 14 days in relation to the form of the orders.
I certify that the preceding one hundred and sixty six (166) paragraphs are a true copy of the reasons for judgment of Judicial Registrar Ian Loughnan.
Associate:
Date: 11 August 2009
Key Legal Topics
Areas of Law
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Family Law
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Property Law
Legal Concepts
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Procedural Fairness
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Remedies
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Costs
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Jurisdiction
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