Rapson and Rapson
[2007] FamCA 1257
•11 October 2007
FAMILY COURT OF AUSTRALIA
| RAPSON & RAPSON | [2007] FamCA 1257 |
| FAMILY LAW – PROPERTY – Settlement in relation to marriage |
| Family Law Act 1975 (Cth) |
| APPLICANT: | Ms Rapson |
| RESPONDENT: | Mr Rapson |
| FILE NUMBER: | MLF | 537 | of | 2006 |
| DATE DELIVERED: | 11 October 2007 |
| PLACE DELIVERED: | Melbourne |
| JUDGMENT OF: | Carter J |
| HEARING DATE: | 8, 9 & 10 October 2007 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Thompson of counsel appeared 8, 9 & 10/10/2007. Ms Nguyen, Solicitor, appeared 11/10/2007. |
| SOLICITOR FOR THE APPLICANT: | Devenish & Co |
| ADVOCATE FOR THE RESPONDENT: | Mr Moore |
| SOLICITOR FOR THE RESPONDENT: | Borchard & Moore |
Orders
In the matter of Rapson, MLF 537 of 2006, I adjourn the further hearing of this matter to 9.30 am on 26 October 2007 to enable counsel to bring in Minutes of Orders consistent with my Reasons for Judgment given this day, with liberty to bring the matter on earlier by mutual agreement, subject to consultation with my Associate.
I reserve all questions of costs.
IT IS NOTED that publication of this judgment under the pseudonym Rapson & Rapson is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT MELBOURNE |
FILE NUMBER: MLF 537 of 2006
| MS RAPSON |
Applicant
and
| MR RAPSON |
Respondent
Ex Tempore
REASONS FOR JUDGMENT
Even though their marriage has been dissolved I will continue to refer to the parties as “the husband” and “the wife”.
This is the determination of proceedings for property settlement and child support following the breakdown of the marriage. As to property, the wife, claims 70 per cent of the net assets, which on her calculations, total in round terms almost $1.4 million. That figure includes “add-backs” of just over $230,000. The husband proposes a division in the proportion of 55 per cent to the wife and 45 per cent to himself. He does not specify what the pool of assets is and has not quantified the assets in any way, nor has he set out or submitted to me whether add-backs are disputed, and if so, which ones. I will come back to this later on.
Additionally, the wife seeks a lump-sum order for child support of $36,400, representing two years' payment of child support, or alternatively that the sum of $50,000 be paid to her solicitors as security for payment of child support for a period of three years. For his part, the husband conceded that there should be a lump-sum payment of $15,000 only.
Relevant Legal Principles
Section 79(4) of the Family Law Act 1975, “the Act”, requires a four-step exercise.
4.1Firstly, the identification of the property of the parties, their assets, liabilities and financial resources;
4.2Secondly, the evaluation of the parties' contributions, whether financial or non-financial, direct or indirect, including contributions to the welfare of the family in the capacity of homemaker or parent;
4.3Thirdly, the evaluation of the matters referred to in section 75(2); and
4.4Finally, a determination of whether the result is just and equitable, noting that it is the real impact in money terms which is ultimately the crucial issue. (As to this see JEL & DDF (2001) FLC 93-075).
Section 79(4)(d) requires the Court to take into account the effect of any proposed order upon either party’s earning capacity. Subsection (f) requires the court to take into account any other order made under the Act which affects a party to the marriage or a child of the marriage. Subsection (g) requires the Court to take into account 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 for a child of the marriage.
Standard of Proof
The standard of proof I have applied is the civil standard, namely, the balance of probabilities having regard to the particularity and gravity of the matter. (See s 140 of the Evidence Act 1995 (Cth) and Briginshaw (1938) 60 CLR 336.) Throughout this judgment statements of fact constitute findings of fact made on the basis of the application of that standard of proof, together with my assessment and observations of the witnesses.
Short History
The husband is 46 years of age, having been born in August 1961. The wife has just turned 45, having been born in October 1962. The parties commenced to cohabit in 1979, there was a separation of about 10 months in 1983 and they then resumed cohabitation. They married in January 1985 and separated in August 2005. Their marriage was dissolved by decree nisi made 24 October 2006. There are three children of the marriage. H, who was aged 22 at trial; M who was aged 21 at trial and S who is aged 12 at the trial.
The Hearing
Mr Thompson, of counsel, appeared on behalf of the wife. The wife was present throughout the proceedings. Mr Moore, the husband’s solicitor, appeared on behalf of the husband. The husband did not attend the hearing. He lives in the United States of America. The husband had earlier sought leave to give evidence at the trial by electronic means. That application was filed 21 August 2007. The wife opposed the application, her Response having been filed 7 September 2007. I refused the husband’s Application on 11 September 2007. Both parties were represented by counsel on that occasion and both parties made submissions. I was specifically advised by counsel for the husband that formal or written reasons for judgment were not requested, my reasons having emerged during the course of the hearing, as well as being encompassed by counsel's summary during dialogue at the end of the hearing.
At the trial Mr Moore announced that he appeared with Mr Hoult of counsel, who was then absent from the Court. I was not troubled by that, however, the matter was raised subsequently and in particular during final submissions on the third and last day of the hearing. Mr Moore then told me that Mr Hoult should only be noted as having appeared on the first two days of the trial. From what he told me, I understand that Mr Hoult had been engaged to negotiate and/or advise. Again, I'm not troubled by this, save that there is a significant difference between being briefed for those purposes and being briefed to appear. The Court record obviously needs to be accurate and in my view this would not be the case if Mr Hoult were to be noted as having “appeared” for the husband.
No Case Outline documents were filed on behalf of the husband and I was not provided with a list of documents upon which he proposed to rely. I was informed by Mr Thompson, and without contradiction by Mr Moore, that notice had been sent requiring the husband to attend for cross-examination, and in addition, that this had been raised at the Pre-Trial Conference. Given the husband’s non-attendance, it was submitted that the husband should not be permitted to rely on any trial affidavit. (See r 15.14(3)(a).)
Having heard submissions, I agreed for the brief reasons I gave at the time. I subsequently inquired further and ruled that the husband could also not rely on his Form 13 Financial Statement. The husband had also sought that a proposed witness give valuation evidence from the United States by electronic means. That witness was a Mr N and his affidavit was filed 28 August 2007. During the course of the hearing on 11 September 2007 that affidavit was challenged on a number of bases, including that it did not disclose what items had in fact been valued. No steps were taken to rectify this, nor were there any submissions made at the trial about this affidavit. Accordingly, the husband’s participation in these proceedings was limited.
The wife’s solicitors had earlier sent to the husband’s solicitor a written Request to Admit Facts and Documents. (See Document 48 in the Court book, Exhibit “W2”.) The husband did not respond in any way. Accordingly, a number of facts and documents are taken to have been admitted. (See rr 11.07 and 11.08.) The deponents of a number of the affidavits relied upon in the wife's case were therefore not required to be called. Furthermore, no Notice to Attend for Cross-Examination was given in any case.
A number of people had been subpoenaed. The parties’ legal practitioners had discussions with these people and thereafter I was asked to and did release them all. Notwithstanding that, on the second day of the trial Mr Moore told me that he wished to call evidence from one of those witnesses, a Mr B, who is an accountant. Notwithstanding Mr Thompson's objections to this course of action, I agreed that Mr B could be called on behalf of the husband to give evidence.
The wife presented an Outline of Case Document. Part C of that document set out a list of documents relied upon. A Court book of documents had been prepared on the wife’s behalf, which comprised documents from discovery. This was tendered and became Exhibit “W2”.
The wife relied on:
· her own trial affidavit, filed 17 July 2007, as well as a further affidavit in support of her Application for a Departure Order, which had been filed 31 July 2007
· the affidavit of a Mr P, filed 17 July 2007. That concerned the valuation of firearms
· the affidavit of a Mr V, filed 20 July 2007, which contained a valuation of animal trophies
· the affidavit of a Ms G, which had been filed 20 July 2007. That affidavit provided evidence of calculation of interest which related to the wife's claim to add-backs being made to the pool of assets
· the affidavit of a Mr Y, filed 31 July 2007. He is a bank employee and his evidence concerned the circumstances in which certain accounts were frozen
· the affidavit of Mr L, which was filed 6 August 2007. Mr L had been engaged on behalf of the parties to conduct the sale of various items of machinery and equipment. In his affidavit he detailed payments which had been made to the husband
· the affidavit of Mr S, a psychologist, which was filed 22 August 2007. That affidavit dealt with the wife’s current psychological and emotional state, which had relevance on the basis of the possibility of employment
· finally, the wife relied on her Financial Statement, filed 17 July 2007.
Part H of the wife’s Case Outline Document comprised a list of assets, liabilities and financial resources. That document remains on the Court file. It has been amended by me in red ink to reflect certain matters which emerged in evidence or as a result of concessions by the wife.
At the commencement of the husband's case Mr Moore told me that the husband “would like” to have his daughter visit him in the United States each year from 17 December to 17 January. The husband would be responsible for the costs associated with that. This was the first time this matter had been raised. It had not been even suggested during cross-examination of the wife. Sensibly, to my mind, Mr Moore did not press this matter and I will make no further mention of it.
Add-Backs
Generally in proceedings under s 79 of the Act, the property and financial resources of the parties are valued as at the date of trial. In some circumstances items which no longer exist need to be notionally considered in determining what a fair share of the existing pool of assets should be, so as to do justice and equity to the parties. (See par 111 to 114 of Milankov (2002) FLC 93-095, per Kay J, together with the cases cited there by his Honour.)
In Omacini (2005) FLC 93-218 the Full Court held that there were three clear categories of cases in which the Court had up until then determined that it was appropriate notionally to add-back to the pool of assets, that is to say, assets that no longer existed. They were where the parties had expended money in legal fees; where there had been a premature distribution of a matrimonial asset post-separation, as for example, in Townsend (1995) FLC 92-569 and in the circumstances outlined by Baker J in Kowaliw (1981) FLC 91-092 at 76-644.
Whether this should be done is a matter for discretionary judgment. The category of cases in which assets should be notionally added back is not closed. In Omacini the Full Court, drawing on Browne & Green (1999) FLC 92-873, also noted that the principle stated by Baker J in Kowaliw did not constitute a fixed code, being no more than a guideline to be used in the exercise of the discretionary jurisdiction conferred by s 79 of the Act. It has grown, however, to be a well-accepted guideline, the use of which assists in the achievement of the important goal of consistency within the jurisdiction.
In NHC & RCH, 32 FamLR 518 the Full Court wrote:
“[21]It is important to bear in mind, and indeed should be emphasised, that in Townsend the Full Court was concerned only with the situation where between separation and the hearing of property settlement proceedings, one party has disposed of an asset which could be described as “a matrimonial asset”, in the sense that it was an asset which was owned by one or both of the parties at separation and in which the other party would have a legitimate interest, in that, for example, he or she had made a direct or indirect contribution to that asset.
(We will refer later in these reasons to the principle which emerges from Townsend.)
…
[24]We will refer again later in these reasons to the decision in Townsend, but we would in the present context draw attention to the following observations by later Full Courts:
‘[2.11]There seems to be no appropriate basis for notionally adding back moneys that existed at separation but which have been subsequently spent on meeting reasonably incurred necessary living expenses. Neither the Family Law Act nor the case law require that parties go into a state of suspended economic animation once their marriage breaks down pending the resolution of their financial arrangements. Parties are entitled to continue to provide for their own support. Whether any expenditure so incurred is reasonable or extravagant is a matter that can be determined by the trial judge.
[M [1998] FamCA 42 (1 May 1998, per Baker, Kay and Chisholm JJ).]
[46]While not seeking to place a fetter upon the exercise of discretion of a trial judge in individual cases, it seems to us that the concept of adding monies reasonably disposed of back into the pool ought to be the exception rather than the rule. The parties are entitled to reasonably conduct their affairs post-separation in a manner that is consistent with properly getting on with their lives.
[C [1998] FamCA 143 (8 October 1998, per Nicholson CJ, Ellis, Kay JJ).]’ ”
Discussion
The wife seeks to add-back on the basis of Kowaliw the sum of $35,120 for “unnecessary interest payments on borrowings” and the further sum of $24,243 for what was described as “unnecessary [D Accountants] costs”. While it is the case that depletion of assets in a Kowaliw-type situation could result in add-backs to the pool of assets, generally this is a matter dealt with under s 75(2)(o).
Some context needs to be given to this aspect of the wife’s case.
There are two components of the “unnecessary interest payments”. The first relates to delays in completing the subdivision of land at C. The wife has detailed this in pars 88 to 116 of her trial affidavit. Her case can be broadly summarised from par 116 where she points out that there were five contracts for sale of land at C which could have settled prior to 7 December 2006 if the plan of subdivision had been registered in a timely manner.
The various properties had been sold and settlement had been fixed for different dates, two in May 2007, two in October 2006 and the last in November 2006. The plan was not registered until December 2006 for reasons described by the wife and attributed by her to delays that should be attributed to the husband. The wife dealt with this by assessing the interest paid from the date that the contracts could have first settled to the date when the plan of subdivision was registered. The evidence was set out in Ms G’s affidavit and it confirms the quantification of that interest in the amount of $15,300.13.
It was put to the wife in cross-examination that the parties gained a taxation advantage because settlement of the properties did not take place in one single financial year. The wife’s response was consistent with par 93 of her affidavit.
Mr B, confirmed to Mr Moore that there was some taxation advantage and that completion of all sales in a single financial year, rather than being spread over two financial years, would have attracted a higher tax rate. There is no evidence however as to what this advantage might have amounted to in financial terms. Mr B’s evidence was that the husband's taxable income for the financial year ended 30 June 2005 was $8,343 and partnership taxable income was $12,171 for the same year. No tax returns have been filed since then, although apparently the 2006 return has been prepared. I am satisfied it was not provided, even in draft form, from Mr B to the wife’s solicitor notwithstanding requests, nor was it tendered to the Court.
There is accordingly no evidence which can be called upon or utilised, as it were, to offset the quantum of additional interest which the wife claims was unnecessarily incurred in all those circumstances. Nonetheless, to my mind this issue is more appropriately dealt with under s 75(2)(o). There is an element of artificiality and some speculativeness in adopting the course urged on behalf of the wife to add-back this amount.
The second aspect of this part of the wife’s case arises from alleged delays in selling the former matrimonial home. The wife's evidence as to this is contained in pars 117 to 129 of her trial affidavit.
I accept that the wife first requested in writing a sale of this property in February 2006. It is the case that orders were made on 31 August 2006 on the wife's application that the property be sold. I accept that there were further delays after that because the parties did not agree as to who should be appointed to conduct the sale and that an agent had to be appointed by the Real Estate Institute of Victoria. The property did not sell at auction on 16 December 2006.
The wife said in par 123 of her affidavit:
“I say that the timing of the auction was the reason for the failure to sell. The date was too close to Christmas and there had just been an interest rate rise. If the husband had co-operated with the arrangements I had made to sell the house, either in February or September 2006, the auction would have taken place at a more favourable time and in all probability it would have sold.”
Her claim is summarised in par 129. She again requested and obtained calculation of interest payments which were made pursuant to mortgages between the date of the first documented request to sell the property, which was 8 February 2006, and the date with the Family Court ordered the sale, which was 31 August 2006. The interest paid was $19,820 and this amount is confirmed by Ms G’s affidavit.
To my mind the wife’s claim in this regard is too speculative to be dealt with in the manner suggested. There is no evidence to support her belief and contention that the timing of the auction was not favourable or conducive to a sale. Indeed, the high point of her evidence was that the house “in all probability” would have sold if the husband had co-operated.
The property is still on the market for sale and a different agent was appointed pursuant to orders made on 20 June 2007. It is also relevant and important to note that the wife remained living in the former matrimonial home until late April 2007. She is now paying rental of $180 per week. Her occupation of the property was a benefit to her, although I accept it came at a cost of physical labour, including maintenance of the home, fences and livestock. I do not propose to add-back this amount as sought by the wife, nor indeed is it appropriate in my mind to take it into account under s 75(2)(o); it is far too speculative.
The next aspect of the wife’s claim was the issue relating to the sum of $24,243 for what was described as “unnecessary [D Accountants] costs”. She deals with this in pars 130 to 142 of her affidavit. By way of background I note that orders were made by consent on 19 April 2006 which in effect appointed Mr B of D Accountants to administer the financial and business affairs of the husband and the wife. Both parties were legally represented at the time the orders were made. Mr B’s evidence was that he had been the parties’ accountant for some 12 to 15 years and that he was familiar with their affairs. He told Mr Moore that he acted on behalf of both the husband and the wife and he would normally charge fees for accounting advice and services.
According to Mr B he had contact with the husband every week and quite often more than once in each week. Whilst he was not specific, he confirmed to Mr Thompson that most of the expenses incurred were generated by the husband. He agreed that the husband was a “pretty demanding” client. Costs estimated at $24,243 had been incurred, and as I understand it, paid to date and a further $11,000 is anticipated to be charged, of which $3000 to $4000, according to Mr B, is referrable to the husband’s personal tax returns.
I have no reason to doubt the wife’s evidence as to why she consented to Mr B’s appointment. That said however, I have no power to go behind the Court orders which were, as I have said, made by consent (and when both parties were represented). Whilst the orders do not specify who should pay Mr B’s costs and expenses, it is implicit that he would be entitled to be paid. It can be inferred that any payment to him has been made from the proceeds of sale of equipment, plant or other assets with the overall effect that the parties paid his fees and costs equally.
The orders did not reserve the right for either party to submit at the trial that the other should be responsible for Mr B’s services, nor was the wife's case argued on this basis. Her case was simply that there was no need for a third party to be appointed to perform the role which Mr B did conduct and which she had been performing for a year or so beforehand. It came about, according to submissions made on her behalf, because the husband was absent from Australia and refused to cooperate. However, as I have said, it is not open to me to go behind the terms of a consent order. In my view, it is not appropriate to add-back the costs of Mr B’s services to the pool before distribution. Nor is it appropriate to require the husband to bear those costs without contribution by the wife.
The wife seeks to add-back on the basis of Townsend the sum of $76,853 for funds received by the husband since his departure to the United States through credit cards and direct transfers from the Bendigo Bank. Particulars are given in pars 165 and 166 of the wife’s trial affidavit. The relevant Visa statements are comprised by Document 45 in Exhibit “W2”. The Amex transaction lists are comprised by Document 46 of Exhibit “W2” and the telegraphic transfers and Bendigo Bank statements are comprised by Document 47 of Exhibit “W2”. Reference should also be made to pars 175 to 186 of the wife's affidavit, in which she sets out the circumstances leading up to the parties' separation.
The funds referred to in this aspect of the wife’s case relate to funds used by the husband since his departure to the United States in about April 2005. The payments related to expenditure by the husband in the United States. There was very limited cross-examination about this. The wife confirmed that there were payments of outstanding accounts from the credit cards but insisted that the husband was “setting himself up in the United States”. It was not put to the wife that she had included any payments of accounts which were applied for family purposes. It was not suggested to her or submitted to me that any of the payments were for the husband’s “reasonably incurred living expenses” (see M [1998] FamCA 42).
In par 167 of the wife’s affidavit she said:
“The husband has earned income in the United States since the separation. The husband's solicitors wrote to my solicitor by letter dated 14 March 2006 in which it was said that the husband was working on a ranch for his keep and receiving a relatively small allowance.”
In par 168 the wife said:
“I have emails from the husband in which he refers to the fact that he is organising hunting tours at [R] Ranch.”
In par 169 of her affidavit the wife said:
“The organisation where the husband lives and works is a money-making venture. The husband is not the type of person to work voluntarily.”
The wife was not cross-examined about any of these matters.
Document 49 in Exhibit “W2” includes two emails from the husband, both sent 13 January 2006 to two separate persons who were apparently interested in hunting game at the R Ranch, which is located in Texas. On both of these emails the husband is described as “salesman” for that ranch.
When Mr B gave evidence he told Mr Moore that in all the husband had received payments of $115,909 and that the wife had received payments totalling $129,760. No attempt was then made to provide specifics of the various payments made, save in respect of payments totalling $106,751, alleged to have been made by A Pty Ltd and Mr B which resulted from sale of equipment and the like. I will return to this aspect of the wife's claim shortly. That claim, I might say, is a separate claim to the one with which I am presently dealing.
During his cross-examination Mr Thompson directed Mr B to payment of the sum of $43,632 shown to have been paid to the husband by the QuickBooks (accounting) entry. That payment was confirmed. It does not relate to this aspect of the wife's claim or the claim which I am presently dealing with, but has some relevance because Mr B told Mr Thompson on inquiry that the husband had not told him how the money had been expended. Matters concerning the payments to the husband by way of credit cards and transfers to the Bendigo Bank overdraft were also raised by Mr Thompson. In particular Mr B confirmed that payments totalling $35,683.88 from the Bendigo Bank overdraft had been recorded by the husband as expenses for the C property development. Mr B confirmed he had seen these entries; that it had been wrongful of the husband to characterise them in the way he had done; and that he had had discussions about this matter with the husband.
I note that there was no attempt made by Mr Moore to deal with any of these matters in re-examination. No submissions about this aspect of the wife's claim were made, or indeed about any of her claims for add-backs.
Mr Thompson submitted that the husband had not made full and frank disclosure, notwithstanding the husband's undertaking as to disclosure which had been filed as required under the Rules. The thrust of his submissions was that I should adopt a broad brush approach and not be unduly cautious about making findings in favour of the wife.
The earlier authorities relating to disclosure were conveniently summarised in Chang & Su (2002) FLC 93-117, commencing at par 67. I also have regard to the decision of the Full Court in K, an unreported decision and delivered 24 December 2002 in Appeal numbers WA6L of 2000 and WA9 of 2002 and, in particular, pars 50 and 51 of that case.
No particulars of nondisclosure were given. To my mind it would not be appropriate to rely on this. I ruled that the husband’s affidavit and Form 13 Financial Statement were not to be relied upon and did so, on the application of the wife. It would not be appropriate, in my view, in those circumstances effectively to penalise the husband again for not giving the evidence or complete evidence. However, the matter does not end there. The husband was permitted to call Mr B, although very little evidence was sought to be adduced. The husband was legally represented, cross-examination was conducted on his behalf, although again it was very limited; submissions were made, although as will be seen and as I have already said, these submissions were also very limited. That was the way ultimately that the husband, through his solicitor, chose to conduct his case. In all those circumstances, but not relying on any finding of non-disclosure, I am satisfied it is appropriate to add-back the sum of $76,853 as sought by the wife.
The wife seeks to add-back, also on the basis of Townsend, further sums for payments made to the husband by Mr B and A Equipment Pty Ltd (“A Pty Ltd”). Mr L is an employee of A Pty Ltd and between March 2006 and March 2007 he was engaged in selling various items of machinery and equipment for the parties. The sale proceeds were held in trust pending further instructions from the parties or Mr B. Mr L’s evidence in his affidavit, filed 6 August 2007, was that he transferred to the husband on the husband’s instructions $5000 on 6 April 2006 and a further sum of $53,406 on 31 May 2006. That evidence was not challenged. However, Mr B gave further evidence about this matter. Subsequently, and after cross-examination, Mr Thompson conceded that the wife’s claim in this regard should be reduced from $106,751, which had earlier been the amount sought, to the sum of $58,751, there being an element of “double accounting” in the wife's calculations. In my view, this amount should also be added back.
Apart from the cross-examination I have detailed, the only other relevant cross-examination was of the wife. This was as to the question of “double accounting”. Given the concession subsequently made on the wife’s behalf I need not take that part of the matter any further. For the same reasons given in connection with the wife’s claim to add-back the sum of $76,853, it is in my view, appropriate to add-back the sum of $58,751 as sought by the wife. In particular I note, that yet again, there was no cross-examination of the wife or evidence from Mr B, save as noted. There were no submissions whatsoever as to the treatment of any of the wife’s claims for add-backs.
It is convenient to note here that certain payments were made to the wife pursuant to Court orders. All payments apart from one were designated as spousal maintenance. Pursuant to orders made 31 August 2006 the wife was to receive the sum of $10,000 from funds held by Mr B’s firm, this sum to be characterised by the trial judge. The wife also received periodic maintenance of $350 per week from joint funds and borrowings. The wife has provided a detailed account of her financial circumstances following separation in her trial affidavit. (See, for example, par 10 to par 28 and par 171.)
The wife has also described in par 77 the sale of her motor car and the purchase of another car which left her with a surplus of funds of $21,107. In par 172 of her affidavit the wife explained that there remained about $12,000 at the time her affidavit was sworn, which was 16 July 2007, the balance of funds having been used for her own support and that of the parties’ daughter, S. It was the wife’s case that the payment of the amount of $10,000, pursuant to the orders of 31 August 2006, as well as the proceeds of sale of the motor vehicle, should be characterised as spousal maintenance.
I note that the replacement motor vehicle is not included in the wife’s list of assets. I further note that personal property of the husband (animal trophies and firearms) is included in the wife’s list of assets. There was no cross-examination of the wife about any of these matters, nor were there any submissions as to how these matters should be treated, nor as to the characterisation of the funds received by the wife which was to be determined at trial.
In all those circumstances, and given the financial situation described by the wife in her trial affidavit, I propose to treat these payments as maintenance for the wife. I repeat that there was no submission to the contrary.
Finally, I note that as seen, Mr B's evidence was that the wife had received payments totalling $129,760. I have absolutely no idea how that sum is made up. No attempt was made by Mr B or Mr Moore to particularise it; it was not put to the wife in cross-examination that she had received funds of that amount, or indeed any particular amount. It may be, but I cannot be sure, that it includes spousal maintenance paid periodically. Mr B’s evidence did not provide any assistance to the Court in this regard, nor was it submitted how, or if, it should be taken into account.
The wife had claimed there should be an add-back of $30,000 for tools, plant and machinery. She gave particulars in pars 143 to 148 of her affidavit. Mr B was cross-examined about this. He confirmed that the QuickBooks entry for the 2005 financial year showed an entry “general joinery and building equipment” valued at $30,000. Document 43 in Exhibit “W2” is the relevant document showing this entry and Mr B confirmed it had been prepared by his firm, agreeing with Mr Thompson that it was an asset of the husband and the wife.
There was a dispute about certain small items of equipment claimed by the wife not to have been included on a list prepared by Mr B. The wife relied on a list prepared by Mr L (see Document 11 in Exhibit “W2”).
The wife’s evidence was that not all of those items had been accounted for. She identified quite a number of them. During cross-examination Mr B was taken to this matter and he said he did not know whether everything on “his” list was in fact there, when compared with Mr L’s list. The items in question appeared largely to be of modest value and Mr B assessed the value as between $6500 and $7000. He confirmed that this amount could be added to the $30,000 already mentioned as an asset of the husband and the wife. Neither of these matters were referred to in re-examination or in submissions on behalf of the husband. Strictly speaking these are not matters appropriate to be added back. They are more appropriately to be described as additional assets of the parties, totalling $37,000 and to be included in the pool as such. I will do so.
Assets and Liabilities
Before I detail the assets and liabilities I should address a number of matters. Firstly, I have no list from the husband and I will largely follow the format of the wife’s list of assets and liabilities, including however and reflecting my determination on issues of notional or additional assets. Secondly, there were no submissions made on behalf of the husband as to what should or should not be included in the pool of assets or liabilities. Thirdly, there were no submissions on behalf of the husband as to the accuracy or otherwise of the values and/or amounts detailed in the wife’s list. Certain matters are covered by affidavit evidence and/or the consequences of the husband not serving a Notice Disputing Facts or Documents. It may be that other matters were agreed. In the absence of any dispute being articulated or put on behalf of the husband, I rely on the wife’s list.
Finally, Exhibit “W4” demonstrates that T Estate Pty Ltd had credit bank balances totalling $8323.33 as at 30 September 2007. This company owns land at T which has been subdivided. There are some unsold lots. The husband and the wife each own three of the 12 issued shares and Mr O, through another company, owns the balance of six shares. The interest of the husband and the wife in the T Estate Pty Ltd bank accounts is therefore $4662, rounded. It will be included in that amount as an asset of the parties. There was no submission made to the contrary.
Accordingly, I find that assets and liabilities of the parties are as follows:
A. Assets
F Property$750,000
T Estate, (five residential vacant blocks,
50 per cent interest of husband and wife); $145,987
trust proceeds held by D Accountants, $5,220
last two block of C Property (after deduction
of estimated selling costs); $297,375
animal trophies $29,250
firearms$3,600
value of joinery, building equipment and tools $37,000
50 per cent interest of the husband and wife in
T Estate Pty Ltd bank accounts $4,662
Total:$1,273,094
B. Husband's superannuation$85,000
C. Add-backs
i)Funds used by the husband since his departure to
the United States through credit cards and
direct transfers $76,853
ii)payments received by the husband from Mr B
and A Pty Ltd $58,751
Total add-backs: $135,604
a)Liabilities
i)Mr X and staff E $4,000
ii)outstanding accounts (D Accountants still E $1,000
determining whether the parties are liable
in this regard)
iii)administration costs of D Accountants E $11,000;
iv)Australian Tax Office tax liability $146,000
Estimated total liabilities $162,000
E.Summary
Assets $1,273,094
Husband’s superannuation $85,000
Add-backs $135,604
Total $1,493,698
Less liabilities $162,000
Net assets $1,331,698
Contributions
The wife has set out in her affidavit from par 25 to par 47 the parties respective work histories commencing from the time they commenced to cohabit and up to the husband's departure to the United States, as well as a detailed account of their financial dealings, acquisitions of property and business activities. She was not challenged as to this evidence, although there was some cross-examination about the husband’s contributions and activities.
The wife has not in any way in my view sought to diminish the husband's contributions. Paragraph 47 of her affidavit provided, to my mind, a fair summary of their respective roles. In that paragraph the wife swore:
“During the marriage both the husband and I worked hard. I was responsible for caring for the children and totally responsible for all the domestic work in the home as well as assisting the businesses. The husband's role was to be "hands on" with the businesses and to have little involvement with the housework and childcare.”
I accept the submissions made on the wife’s behalf which are detailed in Part J of her written Case Outline. Those submissions helpfully are cross-referenced to the relevant paragraphs of her affidavit. The contributions continued, as was submitted, after the husband left Australia. (See pars 175 to 192 of the wife's trial affidavit.) The contributions were direct financial contributions, as well as non-financial contributions to the businesses and acquisition of assets.
In pars 48 to 51 of the wife’s affidavit, she detailed her contributions as homemaker and parent. I accept her evidence and the submissions made on her behalf in this regard. I agree that her contributions in this regard continued, and indeed increased, following the husband's departure for the United States.
It was submitted on behalf of the wife that contributions until separation should be seen as equal but that the wife should receive an adjustment of 5 per cent by reason of her contributions after separation. Given that she had made contributions without assistance from the husband as to homemaking and parenting of the child S since separation and that she continued to make contributions as to the administration and preservation of assets, I agree with this and indeed note that it is a somewhat modest adjustment. It does however take into account matters such as the contributions also made by the husband after separation in respect to the parties’ business enterprises and the fact that child support of, albeit painfully small amounts, has been paid.
I note here that the husband's submissions were that the wife should receive 55 per cent of non-quantified net assets. I was not told what part of that reflected contributions or what part reflected adjustments under s 75(2). There were no submissions as to why this division was a just and equitable outcome. In my view, an adjustment in the wife’s favour to 55 per cent is appropriate but only on the basis of overall contributions.
I am required to take into account under s 79(4)(d) the effect of any proposed orders on earning capacity. That has no relevance to the present case. I am required to take certain matters into account under s 79(4)(f). Save that there are orders for the child S to live with her mother, that has no relevance.
Under s 79(4)(g) I am required to take into account questions of child support. There is some overlap between s 79(4)(g) and s 75(2)(na) in relation to the need to take into account child support that a party is providing or is to provide.
The child support presently being paid was reduced earlier this year from $52.75 per month to $26.67 per month and has been recalculated for S for the period 28 March 2006 to 27 June 2007 as a result of the husband’s 2005 taxable income. It is common ground that the husband should pay a lump-sum payment of some sort, whether by security or otherwise, for child support, although the quantum is in dispute. I bear this in mind.
The matters set out under s 75(2) are required to be taken into account pursuant to s 79(4)(e). They have been summarised in Part J of the wife’s Case Outline Document and I largely agree with most of them.
I have already addressed the question of the parties’ respective ages. The wife's health is not as good as that of the husband, particularly her emotional health or strength. Evidence was called on her behalf and provided in the affidavit of her psychologist as to this.
She has recently commenced to be employed at an extremely modest wage in a small business, at an amount of about $7 per hour. The wife’s capacity to earn income is limited. She has set out in her affidavit the basis of her training and work history. Her capacity to earn income is also limited by the fact that she has a dependant child. The husband has a capacity for employment and has training and experience in a number of fields of employment as can be seen from the wife’s trial affidavit. The wife, as I have said, has the care, and responsibility for the child S who is 12. S is at school. She will be dependant upon the wife until she is 18, if not longer, although of course at 18 she becomes an adult.
The wife has financial commitments to support herself as well as S. The husband also has the legal responsibility to support S. The husband has no other financial commitments to support any person other than himself.
The wife has provided a Statement of Financial Circumstances which detail her income and expenditure, as well as the expenditure for S. It is convenient to note here that reliance was placed on behalf of the wife on the Lee Expenditure Survey approach, which indicates that the cost for a child of S’s age is in the order of $348.71 per week. The wife's income is extremely modest and is likely to remain so.
Both parties are entitled to a proper standard of living which is reasonable in all the circumstances. What is most important is that the standard of living which was enjoyed during marriage and which may not be able to be enjoyed after separation, should not result in a situation where one party alone is disadvantaged.
The wife wishes to continue to care for S, and as I have already noted, this will limit her capacity for employment. I have already taken this into account.
The wife is not cohabiting with any other person. The husband has referred in the affidavit filed in connection with his application to give evidence electronically, to the fact that he is engaged and intends to marry, hopefully in the latter part of this year. I am unaware of the financial circumstances which relate to his cohabitation.
Both parties will receive a property settlement and on the basis of the assessment I have made as to their contributions, the wife will receive a higher settlement than will the husband.
The husband’s present payments of child support are inadequate to meet the needs of the child. I bear in mind my findings and observations when dealing with s 79(4)(g). I take into account that the husband’s settlement moneys will be reduced.
Pursuant to s 75(2)(o) I am entitled to take into account any fact or circumstance which I believe the justice of the case requires to be taken into account. In this category I bring into my consideration the additional interest which was paid as a result of the delays in the C property project. Whether those delays can only be attributed to the husband or whether they should be calculated in the manner the wife raised, is not the question here. But the fact of the matter is that the husband's departure to the United States of America, his continued residence there, and the mere fact of that has resulted in difficulties in connection with this matter and delays in the finalisation of the subdivisions. This is matter which the justice of the case, in my view, requires to be taken into account in the wife's favour.
Conclusion
In my view, these matters call for a further adjustment in the wife's favour of 15 per cent. The most significant matters are:
a)the parties’ respective earning capacities;
b)the fact that the wife will continue to have the care of S for at least six years. While the husband will be required to pay child support and to provide security by way of a lump sum, this will not take into account, for example, the capital costs of accommodation and all the other matters which result from having the sole care of a child;
c)the matters I have taken into account and discussed under s 75(2)(o).
Just and Equitable?
I am required at this stage of the proceedings to step back and consider whether the proposed orders provide a just and equitable result. The net asset pool as I have found it, is $1,331,698. The wife is entitled to 70 per cent of assets to a value of $932,189 (rounded).
The husband is entitled to assets to a value of $399,509 (rounded). The husband's entitlement includes notional assets of $135,604. He does of course retain his entitlement for superannuation and the personal items of property which are noted in the list of assets. He has had the benefit, as I have found it, of considerable funds. In my view, having regard to the matters which I have discussed and the relevant legal principles, the outcome I propose does provide a just and equitable result.
Child Support
The obligation to pay child support arises from the provisions of the Child Support (Assessment) Act 1989 (“the Assessment Act”). Pursuant to s 3 a child’s parents have the primary duty to maintain the child.
The objects of the Assessment Act must be borne in mind when deciding an application under the Assessment Act. The objects are described in s 4(2) as being intended to ensure:
“(a) that the level of financial support to be provided by parents for their children is determined according to their capacity to provide financial support and, in particular, that parents with a like capacity to provide financial support for their children should provide like amounts of financial support; and
(b) that the level of financial support to be provided by parents for their children should be determined in accordance with the legislatively fixed standards; and
(c) that persons who provide ongoing daily care for children should be able to have the level of financial support to be provided for the children readily determined without the need to resort to court proceedings; and
(d) that children share in changes in the standard of living of both their parents, whether or not they are living with both or either of them; and
(e) that Australia is in a position to give effect to its obligations under international agreements or arrangements relating to maintenance obligations arising from family relationship, parentage or marriage.”
Additional objects are to be found in ss 114 and 121 of the Assessment Act and these include that children have their proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both their parents and that the parents share equitably in the support of their children.
The Assessment Act makes provision for child support for an “eligible child” to be determined administratively by the application of a statutory formula provided in the legislation, however, it is alternatively open to the parties to enter into a child support agreement.
Division 4 of Pt 7 of the Assessment Act provides a procedure by which the Court may make an order which “departs” from the administrative assessment. Where the Court concludes that it is appropriate to “depart” from the assessment, s 118 (if necessary coupled with s 141) give the Court wide power to vary or discharge the assessment including, although not limited to, varying one or more of the component parts of the formula (see Gyselman (1992) FLC 92-279).
As I have already recorded s 114 provides “additional particular objects” of this Division.
Section 117(1)(b) sets out the matters about which the Court must be satisfied before making an order for a departure order. The Court must be satisfied that in the special circumstances of the case one or more of the grounds for departure in s 117(2) is established. If so, the Court must be satisfied that it would be “just and equitable” within the meaning of s 117(4) to make a particular order and “otherwise proper” within the meaning of s 117(5) to make a particular order.
Section 117(2) sets out the grounds for departure orders. There are three broad categories namely:
“(a) that, in the special circumstances of the case, the capacity of either parent to provide financial support for the child is significantly reduced because of:
(i) because of high costs involved in enabling a parent to care for the child; or
(ii) special needs of any other child or another person that the parent has a duty to maintain; or
(iii) commitments of the parent necessary to enable the parent to support:
(A) himself or herself; or
(B) any other child or another person that the parent has a duty to maintain; or
(iv) high costs involved in enabling a parent to spend time with, or communicate with, any other child or another person that the parent has a duty to maintain;
(b) that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:
(i) because of high costs involved in enabling a parent to spend time with, or communicate with, the child; or
(ia) because of special needs of the child; or
(ib) because of high child care costs in relation to the child; or
(ii) because the child is being cared for, educated or trained in the manner that was expected by his or her parents;
(c) that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:
(i) because of the income, earning capacity, property and financial resources of the child; or
(ia) because of the income, property and financial resources of either parent; or
(ib) because of the earning capacity of either parent; or
(ii) because of any payments, and any transfer or settlement of property, made or to be made (whether under this Act, the Family Law Act 1975 or otherwise) by the liable parent to the child, to the carer entitled to child support or to any other person for the benefit of the child; or
(iii) because an amount (the additional amount) of a liable parent's child support income amount was earned, derived or received by the liable parent for the benefit of a resident child or resident children of the liable parent; or
(iv) because an amount (the additional amount) of an entitled carer's child support income amount was earned, derived or received by the entitled carer for the benefit of a resident child or resident children of the entitled carer.”
In Gyselman the Full Court described the exercise in summary as involving three steps. The first, as seen, is whether one or more of the grounds in s 117 (2) has been made out. If so, the legislation then requires the Court to consider whether any proposed order is “just and equitable” and “otherwise proper”.
In the present case, the wife sought that the husband be ordered to pay a lump sum payment. Division 5 of Pt 7 of the Assessment Act makes provision for payment of child support otherwise than in the form of periodic amounts.
This division has two “additional particular objects” which are set out in s 121 and I have already recorded those objects.
Pursuant to s 123(2) an application may only be made if there is an administrative assessment in force and pursuant to s 123(3) the Court is required to have first heard and determined any pending application for a departure order.
Section 124 requires the Court to be satisfied that it would be just and equitable and otherwise proper to make the order and pursuant to s 124(2), in determining the application the Court must have regard to the matters set out in sub-ss (a), (a a), (b), (c) and (d).
In Prpic (1995) FLC 92-574 at 81,688 the Full Court said:
“Capitalisation orders may well be appropriate where there are difficulties in enforcement or where it is proper to sever the financial link between the parties. However, as a general rule, given that payments of child support depend upon circumstances prevailing from time to time which circumstances cannot be predicted with any significant degree of certainty, it seems to us that the provision of child support by way of lump sum should not be considered to be a readily available alternative but one that is only exercised when there are circumstances that make it appropriate so to do. We would endorse the observations of Mushin J in Bendeich (supra) at 79,754 where his Honour said:
‘The rationale underlying the general approach of the court was that the longer a lump sum order operates the greater the chance of change in circumstances necessitating a variation of that order, thereby making the order unjust. Those changed circumstances might be in relation to the liable parent, custodial parent or the children. Incomes may increase or decrease and children may change their living arrangements from one parent to another.’ ”
Section 141 of the Assessment Act sets out the general powers of the Court in the following terms:
“141(1) [Powers of court]
In exercising its powers under this Act, a court may do all or any of the following:
(a) order payment of a lump sum, whether in one amount or by instalments;
(b) order payment of a weekly, monthly, yearly or other periodic amount;
(c) order that a specified transfer or settlement of property be made;
(d) order that payment of an amount ordered to be paid be wholly or partly secured as the court specifies;
(e) order that any necessary deed or instrument be executed, and that such documents of title be produced and such other things be done, as are necessary to enable an order to be carried out effectively or to provide security for the due performance of an order;
(f) order that payment be made to a specified person or public authority or into court;
(g) make a permanent order, an order pending the disposal of proceedings, an order for a fixed period, an order until a child attains a specified age or an order until further order;
(h) make an order expressed to be retrospective to such day as the court considers appropriate;
(j) subject to section 129 (Modification of orders under Division 5), make an order:
(i) discharging an order; or
(ii) suspending the operation of an order wholly or in part and either until further order or until a fixed time or the happening of a future event; or
(iii) reviving wholly or in part the operation of an order that has been suspended; or
(iv) varying an order in any way;
(k) make an order imposing terms and conditions;
(m) make an order by consent;
(n) make any other order (whether or not of the same kind as those referred to in paragraphs (a) to (m) (inclusive)) that the court considers appropriate;
(p) make an order at any time.”
This section is limited by its introductory words and it is clear that the section is not an independent source of jurisdiction. It is an enabling provision. This section could however be utilised in aid of, for example, a departure order. Accordingly, if appropriate, an order could be made for a sum of money to be deposited to be held on trust for the purpose of meeting future child support liabilities as they accrue. An order of this nature was made by Bryant CFM (as she then was) in R and R (No. 1) [2002] FMCAfam 153.
Discussion
By letter dated 3 January 2007 the Child Support Agency notified the wife that child support for S had been recalculated for the period from 28 March 2006 to 27 June 2007. Her previous child support amount was $52.75 per month and the new child support amount was $26.67 per month. That evidence emerges from Annexure “A” to the wife’s affidavit filed 31 July 2007. In the same affidavit the wife deposed that she has received this amount since October 2006. She went on to say there had been no determination in relation to a departure from the administrative assessment because of her inability to obtain information about the husband’s income or earning capacity in the United States.
It is not altogether clear to me whether the wife has followed the procedure set out in Div 4 of Pt 7 of the Assessment Act. No point was taken about this at the trial but in any event I am satisfied the matter can, and should, be dealt with pursuant to s 116(1)(b) of the Assessment Act.
Section 117(1) and s 117(2) both contain reference to “the special circumstances of the case”. In Gyselman this phrase was discussed and the Full Court explained that it was intended to emphasise that the case must establish something that is special or out of the ordinary, noting that the intention of the legislature was that the Court would not interfere with the administrative formula result in the ordinary run of cases.
It was not suggested that the facts of this case did not fall within the ambit of special circumstances. In my view, there are special circumstances in this case and I place particular regard on the fact that the husband has chosen to live in the United States, the terms of the final property orders which are to be made and the effect of those orders, and further because of the unjust and inequitable determination that would occur should S’s child support be assessed by application of the provisions of the Assessment Act relating to administrative assessment.
The husband has a capacity for employment and has training and experience in a number of fields of employment as can be seen from the wife’s trial affidavit. In the wife’s affidavit filed 31 July 2007 she deposed that the husband was in good health and was earning an income of approximately $140,000 per year when he left Australia. There is no evidence to support this latter assertion. I agree with the wife’s evidence that the husband effectively has chosen not to work in order to live in the United States.
The wife went on to say in the second affidavit that:
“The husband intends to live permanently in the United States, where he has repartnered or remarried. He says that he does not earn any income and that he cannot do so because of immigration limitations. He acknowledges that he receives free accommodation.”
The wife was not cross-examined about any of these matters and I accept her evidence.
I addressed the question of the husband’s income and earning capacity in pars 41-45 of these Reasons for Judgment.
I bear in mind that the child support legislation emphasises and prioritises the obligation of parents to support their children. In the circumstances of this case, I can comfortably find that the husband would have the appropriate capacity to support his daughter should he live in Australia.
During the property proceedings I found that there should be add-backs to the pool of assets totalling $135,604 representing funds used by the husband since his departure to the United States through credit cards and direct transfers ($76,853) together with payments received by the husband from Mr B and A Pty Ltd ($58,751). This was not notwithstanding Mr B’s evidence that in all the husband had received payments of $115,909. The relevant paragraphs in these Reasons for Judgment are pars 46, 47, 48, 51, 52 and 53. As can been seen from par 47 the husband had recorded payments he received from the Bendigo Bank Overdraft totalling $35,683.88 as expenses for the C property development. Mr B confirmed that it had been wrongful for the husband to characterise these payments in the way he had done. I was left with no explanation as to the application of any these funds.
The property orders which I propose to make will leave the husband with assets to a value of $399,509. I take into account that this includes notional assets of $135,604 . The husband also retains his entitlement for superannuation and the personal items of property which are noted in the list of assets.
By contrast the wife, as I find it, will be entitled to assets to a value of $932,189.
The wife’s health, particularly her emotional health or strength, is not as robust as that of the husband. Evidence was called on her behalf in this regard. The wife’s capacity to earn income is limited on the basis of her training and work history as disclosed in her affidavit. Her capacity to earn income is also limited by the fact that she has to care for S, who is 12 years of age. The wife’s income is extremely modest and is likely to remain so. She provided a Statement of Financial Circumstances which detailed her income and expenditure as well as the expenditure for S. She relied on the Lee Expenditure Survey approach which indicates that the cost of a child of S’s age is in the order of $348.71 per week. I repeat that the administrative assessment has resulted in payment being due by the husband of $26.67 per month. Clearly, the wife bears and has borne almost the totality of S’s financial costs. Furthermore, it falls to her to raise S, basically single-handedly.
The wife has financial commitments to support herself as well as S. The husband also has the legal responsibility to support S. Neither party has any other financial commitments to support any person other than himself or herself.
I note that S has no income of her own.
Pursuant to s 117(4)(g) I am required to consider any hardship that would be caused to S, the wife or the husband by the making of, or refusal to make the order.
The wife seeks a lump sum order for child support of $36,400, representing two years payment of child support. This equates to a weekly payment of $350 in round terms. Alternatively, she seeks that the sum of $50,000 be paid to her solicitors as security for payment of child support for a period of three years, based, as I understand it on the same weekly payment of $350. For his part, the husband was prepared to make a lump sum payment of $15,000 to cover a period of two years. I was told that this equated to approximately $150 per week.
In my view, S would suffer hardship unless a departure order was made in the terms sought by the wife.
For those reasons, I am satisfied that special circumstances exist for an order for departure from administrative assessment of child support. In my view, application of the provisions of the Assessment Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the husband to S because of the husband’s earning capacity and his property and financial resources, noting in particular, the settlement of property which the husband will receive pursuant to the property orders, and the funds he received after separation.
I am satisfied it is just and equitable to make the departure order sought by the mother, having considered the matters set out in s 117(4). I am also satisfied that it is proper within the meaning of s 117(5) having regard to the parents’ primary duty to maintain their child. This burden has been borne by the wife almost completely unaided since separation.
I now turn to the question of a lump sum payment. In my view, an order requiring the husband to deposit a sum of money on trust as security for child support payments is preferable to an order in the nature of capitalisation. I am required to be satisfied that such an order would be just and equitable as regards S and the parties. It is important, in my view, for a fund to be made available to meet the husband’s obligations given that he resides in the United States of America; that there is presently a fund from which the order could be met; and given the husband’s attitude in the past which is one which does not give priority to the payment of adequate child support for his child.
However, as Bryant CFM (as she then was) said in R & R (No. 1)(supra) it is possible that there could be circumstances which might create an unfairness to either parent if there is no ability to seek a departure within the period of time covered by the capitalised payment. This, or any potential injustice, can however be overcome by providing for the husband to deposit the appropriate lump sum into a trust account in the names of the husband and the wife to be held by the wife’s solicitors in an interest-bearing account, upon trust to pay to the Child Support Agency the relevant child support, monthly in advance. It would be appropriate (but not essential), in my view, for a direct debit instruction to be given to the bank in question. As a consequence, if either party was successful in having a court at some future time depart from the existing orders, then the remaining funds will be available and any potential injustice can be avoided. Should this occur, I am satisfied that it would be just and equitable as between the parties and S. Should there be any balance remaining at the end of the period then it should be returned to the husband. The sum payable should be $50,000 and the period involved should be three years.
Orders
The wife has provided a Minute of Orders which she seeks that the Court make. Given that the F property will have to be sold, the interests of the parties will need to be reflected as a percentage of the eventual net proceeds of that property. The wife will receive both the proceeds of the C property project, but funds will need to be retained for tax liabilities and, for example, for final administrative costs of Mr B’s firm. As to how the orders should be framed is a matter which will call for further discussion, perhaps, but certainly further drafting. I propose to give the wife the entitlement to sell the F property and to conduct the sale through her solicitors. No practical alternative is available, given that the husband lives in the United States, to my mind.
It will be necessary to take steps to make sure that the business entities of the parties are wound up. The parties would otherwise retain personal items, chattels and the like which are currently in their respective possession or power. Care will need to be taken in the drafting of these orders and I will call upon counsel to assist in drafting orders to give effect to the orders which I have outlined and which reflect the reasons for judgment which I have just read.
I certify that the preceding one hundred and twenty-seven (127) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carter.
Associate
Date: 26 October 2007
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