Robbins and Rosemount

[2008] FamCA 486

FAMILY COURT OF AUSTRALIA

ROBBINS & ROSEMOUNT [2008] FamCA 486

FAMILY LAW – CHILDREN
FAMILY LAW – PROPERTY SETTLEMENT

Family Law Act 1975 (Cth)

APPLICANT: Ms Robbins

RESPONDENT: Mr Rosemount

INDEPENDENT CHILDREN’S

LAWYER:

Septimus Jones & Lee

FILE NUMBER: MLF 3211 of 2004

DATE DELIVERED: 25 June 2008

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Carter J

HEARING DATE: 13, 14, 15 & 16 August 2007 & 25 & 26 October 2007 and Written Submissions, last Submissions filed 2 January 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr G Dickson

SOLICITOR FOR THE APPLICANT: Lander & Rogers

COUNSEL FOR THE RESPONDENT: Mr R Spicer

SOLICITOR FOR THE 

RESPONDENT:

Hale & Smith

COUNSEL FOR THE INDEPENDENT

CHILDREN’S LAWYER:

Ms Buchanan

SOLICITOR FOR THE

INDEPENDENT CHILDREN’S

LAWYER :

Septimus Jones & Lee

Orders

[Parenting]

IT IS ORDERED

1. That all previous orders in relation to parenting issues concerning the child of the marriage, D, born … March 2002 (“[the child]”) be discharged.

2. That the husband and the wife have equal shared parental responsibility for the child.

3. That the child live with the wife.

4. That the husband spend time with the child as follows:

   (a)during school terms:

   (i)in the first week of a fortnightly cycle from the conclusion of school on Friday until 5:00pm on Sunday commencing 25 July 2008;  and

   (ii)in the second week of a fortnightly cycle from the conclusion of school on Monday until 6:30pm and from after school on Thursday until the commencement of school on Friday.

   (b)for one-half of all school term holiday periods and in default of agreement, the first half;  and

   (c)for one-half of the long school term holiday period each year and in default of agreement the second half.

5. That for the purposes of all travel referred to in par (4) hereof the husband shall collect and return the child from outside the wife’s home from time to time (currently H Street, K,) save when the time the husband spends with the child commences and/or concludes at the child’s school.

6. That in order to avoid doubt it is noted that the provisions of par (4)(a) hereof are suspended during all school holiday periods.

7. That the husband and the wife both forthwith notify the other:

   (a)in the event the child incurs any serious illness or injury requiring medical attention;

   (b)of any advice received from any medical practitioner in respect to the child while he is in the care of the husband or the wife;  and

   (c)of any medication which has been prescribed for the child.

8. That further orders be made by consent in accordance with the Minutes of Proposed Consent Orders annexed hereto and marked “A”.

9. That pursuant to s 65DA(2) and s 62B of the Family Law Act 1975, the particulars of the obligations these orders create and the particulars of the consequences that may follow if a person contravenes these orders and details of who can assist parties adjust to and comply with an order are set out in the Fact Sheet attached hereto and these particulars are included in these orders.

10. That the appointment of the Independent Children’s Lawyer be discharged at the expiration of 45 days from this day unless an Appeal has been filed.

11. That save as aforesaid all extant applications in relation to parenting issues be dismissed, save as to any questions of costs.

[Property]

That pursuant to s 79 of the Family Law Act 1975 (Cth):

IT IS ORDERED

1. That on or before 31 August 2008 the husband pay to the wife the sum of $245,843 (“the payment”).

2. That pending the payment the husband be restrained from:

   (a)mortgaging, charging or encumbering the real properties situate at and known as the P Street property and the W Street property save for the purposes of complying with par (1) hereof and then subject to the written consent of the wife which shall not be unreasonably withheld;  and

   (b)doing any act or thing to diminish the value of his superannuation entitlements.

3. That pending the payment the husband pay all mortgage instalments, rates, taxes, house insurance, and like outgoings for the P Street property and the W Street property.

4. That in the event that the husband does not comply with par (12) hereof the wife, upon seven days written notice being given, may apply for such orders as to enforcement as she may be advised.

5. That subject to compliance with par (12) hereof and save for the purposes of enforcement of these orders the husband shall retain to the exclusion of the wife for his sole use, enjoyment and benefit absolutely:

   (a)his interest in the P Street property and the W Street property;

   (b)all personal property including but not limited to, furniture, effects, appliances and chattels, motor vehicles, savings and investments, and life insurance in his possession, power and control;

   (c)all his superannuation entitlements;  and

   (d)his interest in L Pty Ltd.

6. That contemporaneously with the payment the wife resign as a trustee and/or director of the L Pty Ltd Staff Superannuation Fund and thereafter the husband retain any benefits in the said superannuation fund for his sole use and benefit absolutely.

7. That the wife retain to the exclusion of the husband  for her sole use, enjoyment and benefit

   (a)her interest in the real properties situate and known as the H Street property and the M Street property;

   (b)all personal property including but not limited to furniture, effects, appliances and chattels, motor vehicles, savings and investments and life assurance in her possession power and control;  and

   (c)all her superannuation entitlements.

8. That each of the husband and the wife otherwise be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders and each of the husband and the wife be liable for and indemnify the other in respect of all debts incurred in his or her name.

9. That save as aforesaid all extant applications for alterations of interests in property be otherwise dismissed save as to any questions of costs.

[Child Support]

1. That there be no departure from the determination and assessment made on 21 February 2007 by a Senior Case Officer for the period 10 January 2007 to 29 February 2008

2. That save as aforesaid and save as to any question of costs, par 14 of the wife’s Second Amended Application for Final Orders be dismissed.

IT IS FURTHER ORDERED

1. That all documents produced on subpoena be returned to the person or institution providing the same at the expiration of 45 days from this day unless an appeal has been filed.

2. That all exhibits be returned to the solicitor for the person tendering the same at the expiration of 45 days from this day unless an appeal has been filed.

IT IS CERTIFIED

1. That pursuant to r 19.50 of the Family Law Rules 2004 this matter reasonably required the attendance of Counsel.

“A”

FAMILY LAW ACT 1975

IN THE FAMILY COURT OF AUSTRALIA
AT MELBOURNE

File No. (P)MLF  3211  /  2004

BETWEEN

[Ms Robbins]  (Applicant)
and
  [Mr Rosemount]  (Respondent)
and
  Independent Children’s Lawyer

[Minutes of Consent Orders]

[Children’s Orders]

BY CONSENT IT IS ORDERED

School Vacations

1. That the said child live with the husband as follows:

   (a)for half of each of the school term vacations, such half to be agreed between the parties and in default of agreement, during the first half of the school vacations in odd-numbered years and the second half in even-numbered years;

   (b)for half of the long summer school vacation, at times to be agreed between the parties and in default of agreement, during the second half of the said summer vacation.

2. That unless otherwise defined in these orders, school vacation time commences at the conclusion of the last day of the school term, and concludes at 5:00pm on the day immediately prior to the beginning of the next school term.

Religious Holidays

1. That from 5:00pm on the day preceding the following Jewish religious holidays until 5:00pm on the day of the Jewish religious holidays, the said child spend time with the wife in the 2009 calendar year and each alternate year thereafter:

   (a)First Day Passover;

   (b)First Day Shavuot;

   (c)First Day Jewish New Year;

   (d)Day of Atonement;

   (e)First Day Sukkot (Tabernacles);

   (f)Simchat Torah;

   (g)Chanukah;

   save that this paragraph does not apply where the above-mentioned Jewish religious holidays fall during a school term vacation or summer vacation.

2. That in the 2008 calendar year and each alternate year thereafter, the said child spend time with the husband on each of the Jewish holidays set out in the preceding paragraph from 5:00pm on the day preceding the holiday until 5:00pm on the day of the Jewish holiday, save that this paragraph does not apply where the above-mentioned Jewish religious holidays fall during a school term holiday.

Mother’s Day, Father’s Day, Birthdays

1. That in the event that Mother’s Day falls during the time when the said child would otherwise be with the husband, such time be suspended from 9:00am until 5:00pm on Mother’s Day, and in the event that Father’s Day falls during the time that the said child would otherwise be spending with the wife, such time be suspended from 9:00am until 5:00pm on Father’s Day.

2. That the parent with whom the said child is not living be able to contact the child by telephone at any reasonable time by agreement between the parties and in default of agreement, each Monday and Wednesday between 7:00pm and 7:30pm.

3. That each parent keep the other advised in writing of their current e-mail address and telephone number, including land line telephone number.

4. That each parent notify the other of any change in their residential address not less than 14 days in advance of the change.

5. That each parent authorise and request any educational facility the child attends to provide to both parents copies of all reports, invitations, or any other correspondence, relating to the said child.

6. That each parent be restrained from enrolling the said child in, or withdrawing the said child from, any educational facility without the consent of the other parent or leave of the Court.

7. That each parent be restrained from denigrating and/or making negative comments about the other parent or allowing any other person to denigrate and/or make negative comments about the other parent or any member of his/her family in the presence or hearing of the said child.

8. That each parent be restrained from discussing these proceedings or permitting anyone else to discuss these proceedings in the presence of the said child.

9. That the Minutes of Consent Orders remain on the Court file.

IT IS NOTED that publication of this judgment under the pseudonym Robbins and Rosemount is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER:   (P)MLF  3211   of  2004

MS ROBBINS

Applicant

and

MR ROSEMOUNT

Respondent

and

INDEPENDENT CHILDREN’S LAWYER

REASONS FOR JUDGMENT

1. The husband and the wife are unable to agree about parenting arrangements to be made for their son;  alteration of interests in property;  and child support issues.

2. It is a sad fact that they have litigated for longer than they cohabited.

Short History

1. The husband was born in May 1960 in the former USSR.  He is self-employed through a company, L Pty Ltd.  He is an engineer and has tertiary qualifications, which he obtained in the land of his birth.  His degrees include a Masters degree, a PhD in engineering and another degree.  The husband is the sole director of L Pty Ltd and it is common ground that this company is the husband’s alter ego.

2. The wife was born in July 1971 in the former USSR.  She is employed in information technology.  She also has tertiary qualifications.

3. Cohabitation commenced on 24 June 2001 when the wife moved into the husband’s property at W Street. They married in November 2001 and physical separation took place on 5 July 2003.  They had separated under the one roof in about April 2003.

4. There is one child of the marriage, a son, D, who was born in March 2002 (“[the child]”).  It can be seen that the child was only about 16 months old when his parents separated.

5. Following separation the wife and the child lived initially with her parents and then moved into rental accommodation in or about February 2004.  Since separation the child has been in the primary care of the wife and has spent time with the husband which has varied over the years.

6. In broad terms, the time the child spends with the husband is from 6:00pm Thursday until 4:00pm Saturday each alternate week, as well as from 7:45am on Tuesday until 6:00pm on Wednesday in each other week.  In addition, the husband spends time with the child on certain specified Jewish holidays, Father’s Day, and during school holiday periods.

7. Neither party has repartnered and both appear to be in good health.

8. The wife continued in full-time employment subsequent to separation.  The husband’s level of work has varied as will be later discussed.  For present purposes it is sufficient to say that I am satisfied on the evidence that both the husband and the wife have the capacity to earn income from their own endeavours.

9. An Independent Children’s Lawyer (“I C L”) was appointed on 11 April 2007 and participated in these proceedings thereafter.

Orders Sought

1. The proposals of the husband and the wife have changed at various times during these proceedings.  For present purposes it is sufficient to provide a summary of the orders sought at the trial, and/or in the final written submissions.

Children’s Orders

1. The husband and the wife both propose that they should have shared parental responsibility for the child.  The I C L supports that “with some reservations”.

2. The wife proposes that the husband should spend time with the child from after school on Friday until 5:00pm on Sunday in each alternate week, and from after school on Thursday to the commencement of school on Friday in the other week.  Detailed proposals are put forward in respect of special days, school holidays, and certain Jewish Religious Holy Days.

3. The husband proposes that the child should live with his parents on an alternate week and week about basis during school terms with changeover to take place after school, and at that school, each Friday.  The husband also has provided detailed proposals in respect of special days, school holidays and Jewish Religious Holy Days.

4. The I C L proposes that the child should spend time with the husband on each alternate week from after school on Friday until Sunday at 5:00pm and from after school on Thursday until 6:30pm on Friday in the other week.

Property

1. The wife’s proposals are based on a list of assets and liabilities of the parties as at the date of separation, updated in terms of real estate valuations only.  The assets and liabilities were otherwise based on those in existence at the time of separation.  The list includes some notional assets.

2. On the basis of that list of assets and liabilities the wife sought to retain the equity in two items of real estate owned by her before cohabitation;  superannuation (as at separation);  her motor vehicle (as at separation);  and moneys held by the wife at separation in the child’s name (subsequently expended).  The wife sought further that the husband should pay to her the sum of $251,802. The effect of the wife’s proposals so far as the husband was concerned was that he would retain the equity in two items of real estate owned by him prior to cohabitation; his superannuation (as at separation) and his interest as at separation in L Pty Ltd.  This of course, is subject to the payment from the husband sought by the wife.

3. In broad terms the husband’s proposal was that each party should retain the assets and liabilities in existence as at the date of hearing.  He conceded that there should be a payment to the wife.  During re-examination by his counsel he proposed that this payment should be between $70,000 and $100,000.  However, in the final written submissions it was contended that the payment should be not more than $50,000, payable by way of a superannuation split.

Child Support

1. The wife sought a departure from the current child support assessment to the effect that periodic child support in the sum of $250 per week should be paid and that this should be “locked in by the Court for a reasonable period into the future”.  An exception to this was the calendar year of 2007 and in this regard it was sought that the husband should be liable to pay the child’s school fees for that calendar year.

2. The husband opposes this.

Conduct of the Hearing

1. The hearing was conducted on the basis of affidavits by each of the witnesses involved.  Additionally Mr Z was subpoenaed to attend the hearing by the wife’s solicitors and he gave evidence and was cross-examined.

2. Mr Dickson of counsel appeared on behalf of the wife;  Mr Spicer of counsel appeared on behalf of the husband;  and Ms Buchanan of counsel appeared on behalf of the I C L.

3. A number of documents were tendered and received in evidence as exhibits.

4. The wife relied on:

   ·Her trial affidavit filed 14 November 2006

   ·Her Financial Statement filed 14 November 2006

   ·Her Second Amended Application for final orders filed 9 March 2007

   ·Her Undertaking as to Disclosure filed 18 May 2007

   ·Her further affidavit filed 20 May 2007 (“the wife’s second affidavit”).

5. The husband relied on:

   ·His Further Amended Response filed 29 January 2007

   ·His trial affidavit filed 4 May 2007

   ·His Financial Statement filed 13 August 2007

   ·An affidavit by Mr A filed 9 August 2007

   ·An affidavit by Dr V filed 13 August 2007.

6. On 25 June 2007 the I C L filed an affidavit sworn or affirmed by Ms D, a psychologist, to which were annexed two reports which Ms D prepared for the Court at the request of the parties.  The first report was dated 2 November 2006.  This report was prepared after the solicitors for both parties jointly requested a report and following Trial Notice orders made 9 June 2006.  The second report was dated 2 April 2007, and this report was prepared as a consequence of orders made by Mushin J on 23 January 2007.  The second report was an updated report.

7. On 26 July 2007 the I C L filed an affidavit sworn or affirmed by Dr P to which were annexed three reports.  The first report was dated 18 October 2006; the second report was dated 29 November 2006; and the third report was dated 17 January 2007.

8. Mr A was not required for cross-examination following a concession made on behalf of the husband that paragraphs s 7(c) and (d) should be struck out from his affidavit.

9. The wife’s solicitors had subpoenaed the husband’s mother to attend Court and to give evidence.  Following discussion between counsel I was told that it had been conceded by the husband that certain correspondence sent to the mother, signed by the paternal grandmother was “authored” by the paternal grandmother after translation by the husband who therefore knew of its contents prior to it being sent.  The correspondence in question related to the issue of the paternal grandmother’s own contact with the child.  Following this concession I was informed that the wife no longer sought to call evidence from the paternal grandmother.

10. All other witnesses were cross-examined.

11. The husband and wife both provided Case Summary Documents which dealt with children’s issues as well as financial matters.

12. The case had been in the reserve list and was transferred to me on 13 August 2007.  Following discussions between counsel it commenced at around 3:30 pm and had not concluded by the end of that week (15 August 2007).  That is not a criticism of any of the parties or their counsel given that the estimated hearing time was about five days.  The fact was that my other commitments did not permit me to sit during that week for longer than three days and subsequent commitments meant that the matter resumed part heard on 25 October 2007. The evidence concluded on 26 October 2007 and orders were made for the I C L, the husband and the wife to file written submissions in accordance with a timetable I fixed.  Orders were also made by consent relating to where the child was to go to school in the 2008 calendar (amongst other things).  The last submissions were filed on 2 January 2008.

Credit

1. In Sanders (1976) FLC ¶ 90 – 078 Evatt CJ and Watson J caution:

   “Restraint is called for in expressing views about the parties because of the need to have regard to the preservation of the ongoing relationship between the parties and between parents and children.”

2. However it is also necessary to form an assessment of the character and personality of each of the husband and the wife, the same being necessary for a proper determination of these proceedings in so far as they relate to the child.

3. I have had the benefit of observing the husband and the wife as well as the other witnesses when they gave evidence and were cross-examined.  This can be of considerable assistance (see Government Insurance Office of New South Wales v Bailey 27 NSWLR 304 per Kirby J at 313). However, it is appropriate to be cautious in drawing inferences from the demeanour of witnesses in the somewhat artificial and sometimes stressful circumstances of the Courtroom (see State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq)and others (1999) 160 ALR 588 commencing at 617).

4. As required, 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 Briginshaw v Briginshaw (1938) 60 CLR 336 at 362; s 140 Evidence Act 1995 (Cth) ). Throughout this Judgment save where otherwise noted, statements of fact constitute findings of fact made on the basis of the application of that standard of proof, together with my observations of the witnesses.

5. Mr Dickson provided detailed submissions as to credit in his final written submissions.

6. It was submitted that the wife emerged from cross-examination presenting as a witness of truth;  further, there was no challenge to her version of events of significance;  further, she readily made concessions where appropriate and was a co-operative and courteous witness.

7. The written response of the husband (which I note was prepared by the husband with assistance from his counsel and solicitor) agreed with that submission, and added that this had particular significance in relation to the wife’s evidence as to parenting issues.

8. It was also submitted on behalf of the wife that the Court should accept the wife’s version of events wherever there was a conflict in the evidence between the husband and wife.  It was also submitted that where there were events to which the wife was not privy and therefore not able to give evidence, the Court should not accept the husband’s evidence unless supported by documents (which he himself had not prepared).  Those submissions were supported by detailed reasons which in my view were of considerable merit.

9. However I do not find it appropriate or necessary to make a blanket finding as to credit or reliability.  Nor will it be necessary to refer to the totality of the matters raised in the evidence which I have heard and read throughout this case.  The substantial features of the history which was presented will be dealt with and, where necessary, findings will be made in a context in which differences arise in that evidence.

10. Many of the criticisms made of the husband relate to financial matters however it was submitted on behalf of the wife that as a result of certain of those matters, the Court should have very real concerns about the husband as a role model for the child, and accordingly this would impact on the parenting orders.

Chronology

1. The terminology now used in children’s cases has changed as a consequence of the Family Law Amendment (Shared Parental Responsibility) Act 2006. In dealing with events and orders made before that legislation came into effect I will use the “old” terminology in order to be consistent with the orders which were made at the time.

2. In what follows events relating to children’s issues, as well as financial issues, will be recorded, in some instances determined, and in some instances they will be expanded upon later.

Prior to Cohabitation

1. Prior to cohabitation commencing the husband asserts he borrowed monies from a cousin, Mr S, who is said to live in the USA.  The first transaction was said to have occurred on 10 June 1999 when the husband borrowed US$5000.  The second transaction was said to occur on 16 October 2000 and the sum was said to be US$10,000.  These alleged loans, together with subsequent alleged loans, were disputed and will be considered later.

2. In or about the year 2000, but certainly prior to cohabitation commencing, the husband asserts his mother paid an amount of $10,000 into his mortgage account with the National Australia Bank.  That alleged loan, together with a subsequent alleged loan, are disputed and will be considered later.

Cohabitation 24 June 2001

1. At the time cohabitation commenced the husband and the wife both had assets including real estate.  The value of the real estate was agreed.

2. The wife owned:

   ·K Street property (“[K Street]”) valued at $260,000.

   ·H Street property (“[H Street]”) valued at $270,000.

   ·M Street property (“[M Street]”) valued at $245,000

3. The above real estate was collateral security for borrowings of about $560,000 (according to the wife) and $559,896 (according to the husband).  Nothing significant turns on this difference.

4. The wife also had a small superannuation entitlement and it was common ground that this was worth $10,000.

5. The husband’s real estate comprised:

   ·W Street property (“[W Street]”) valued at $260,000

   ·P Street property (“[P Street]”) valued at $145,000.

6. P Street was not encumbered however W Street was encumbered by way of a mortgage.  The husband agreed during cross-examination that the mortgage on W Street was $139,913 as at 24 June 2001.  I note that in the table prepared by the husband’s counsel the mortgage encumbering W Street was noted at $130,913.  There was no evidence, other than in cross-examination, as to the amount of this liability at the date cohabitation commenced.  I find that the mortgage liability was $139,913.

7. The husband also had superannuation entitlements of about $82,000 (according to the wife) or approximately $82,500 (according to the husband).  Nothing much turns on this disparity.

8. When cohabitation commenced the wife was employed at WP Company, as a senior consultant, earning approximately $70,000 per annum.  The husband’s income was derived through L Pty Ltd.  L Pty Ltd had a bank account with a credit balance of $33,605, at or around the time cohabitation commenced.  The profit and loss figures for L Pty Ltd at the time (and after) are set out in par 45 of the wife’s trial affidavit.

9. According to the list of assets and liabilities as at the date the relationship commenced, as prepared by counsel for the husband, the husband also owned a Toyota Camry valued at $12,000.  I will return to this in due course.

10. It is common ground that the wife’s parents occupied the H Street property when the relationship between the husband and the wife commenced.  They continue to live in that property.  It is common ground that at all relevant times they have paid the wife rental for that property.

11. The wife’s property at M Street is an investment property and it was and has been rented out.  The wife continues to own that property.

12. It is common ground that the husband’s property at P Street is occupied by his mother.  I am not altogether clear when she commenced to reside in that property but she was, on the evidence, residing in it when the parties commenced to cohabit, given that it was common ground that the W Street property was the parties’ first home.

13. During cross-examination of the wife, Mr Spicer put to her that shortly prior to cohabitation commencing the husband’s mother had lived in the W Street property which is larger than the P Street property and when it became apparent that the husband was to have “a female companion” he moved from the smaller unit to the larger unit.  He suggested to the wife that when the husband’s mother was living in the W Street property she paid him rental of $110 per week (the wife said this was not discussed) but in his tax return he disclosed income received by way of rental of $180 per week.  Mr Spicer explained to me that was what the husband’s evidence would be.  The husband did not give this evidence in evidence-in-chief or in cross-examination.  The husband’s tax return for the financial year ending 30 June 2002 was not put into evidence.

14. According to the husband’s evidence during cross-examination his mother stopped paying rent at the end of 2003. He was not certain whether it was the financial year or the calendar year.  There was a written lease entered into between the husband and his mother which provided for rental of $110 a week to be paid.

15. Annexure “SR14” to the wife’s second affidavit is a copy of a Residential Tenancy Agreement said to have been made 1 July 2002 between the husband and his mother relating to the P Street property.  The relevant period was said to commence from 1 July 2002 and to continue “until terminated in accordance with the Residential Tenancies Act 1980”. The rental was said to be $110 per week “payable by the tenant upon request as accumulated amount for every six months”.

16. During subsequent cross-examination the husband appeared to clarify when rental ceased saying that it was at the end of 2003, and, beginning in 2004, it was difficult for his mother to pay the rent, and the arrangement stopped.  That is inconsistent with the taxation return for the financial year ending 30 June 2004 which indicates that the property was rented from 1 July 2003 to 31 May 2004, a period of 48 weeks.  There is no personal tax return for the financial year ended June 2005 but the personal return for the year ending June 2006 indicates that the property was not rented in that financial year (see Exhibit “H4”).

17. In the husband’s tax return for the year ending 30 June 2003 he disclosed rental income of $5,720 for the year, the rental period being 52 weeks.  This equates to $110 per week.  In the financial year ending 30 June 2004 the husband (as seen) said the property was rented for 48 weeks, the total rental income being $5,243, which equates to $109.23 per week.

18. In their respective trial affidavits the husband and the wife both swore that they maintained separate bank accounts.  Notwithstanding that, Mr Spicer put to the wife during cross-examination that her evidence that the parties had separate bank accounts was not completely accurate.  The wife agreed with this and further agreed that they had a joint account with the National Australia Bank from July 2002.  She added that there was equal contribution to that account.

19. It is common ground that the wife received the sum of $12,000 by way of a redundancy payment arising from her employment with WP Company.  It is not clear to me as to the precise date upon which it was received although I am satisfied on the evidence that it was received prior to the child’s birth, probably early in the parties’ relationship.

20. It was the wife’s case that she used these moneys to maintain herself during her pregnancy (wife’s trial affidavit pars 10 and 49).

21. The wife had said in par 10 of her trial affidavit that the husband went overseas for about six to eight weeks, refusing to leave her with any financial support.  In cross-examination Mr Spicer put to her that the period was for two weeks, rather than six to eight weeks.  The wife maintained it was for a longer period, adding that she was pregnant at the time. Mr Spicer then put to the wife that the period was “two weeks or thereabouts”.  The wife responded saying that she could not say the exact number of weeks, but that it was at least four weeks.  I pause here to note that the husband’s affidavit evidence was that the period in question was “about three weeks”.

22. The husband created a document after having checked diaries which was not provided until the week before the trial commenced in August 2007.  It became Exhibit “W9”.  It covers the period from 1999 to 2004.  According to that document the husband travelled to the United States of America on business in February 2002.  I note that the document also contains reference to travel to Thailand in November - December 2001.  That was said to be for the purpose of a holiday.

23. Given that the child was born in March 2002 the wife must have been pregnant as at the date of the marriage in November 2001.  If Exhibit “W9” does contain an accurate account of the husband’s overseas travel, it demonstrates that he was overseas for an unspecified number of weeks but between November and December 2001, as well as in February 2002, during the time that the wife was pregnant.

24. Mr Spicer put to the wife that at the time the husband went away, he had under $2000 in the bank.  The wife’s response was that she did not know how much the husband had or did not have.  Mr Spicer put to the wife that she had more than $8,000 in the bank.  The wife’s response was that she had her redundancy cheque, saying that she had been made redundant basically on the Friday before.  (She did not complete that sentence.)  She did agree that she had some of the redundancy payment in the bank but could not say whether she had more or less than the husband, given her lack of knowledge as to the state of the husband’s bank account.

25. Mr Spicer then put to the wife that before the husband went overseas there was not one but a number of discussions about financial matters and that an agreement was reached that while the husband was overseas, and because the wife had more money in the bank than the husband did, that the wife would use that money to live on during the time he was away.  The wife flatly denied that there were any discussions about this.

26. The thrust of what Mr Spicer put to the wife was contrary to what the husband had said in par 28 of his trial affidavit.

27. In par 28 the husband deposed that he and the wife both maintained separate bank accounts during the course of the marriage.  His further evidence in that affidavit was that they both kept their own income and made certain (unquantified) contributions to the running of the household.  He explained that when the wife became pregnant he cancelled all but one of a number of overseas trips which had been arranged, the duration of the trip in question being about three weeks.  He added that he ensured that the wife had funds in the bank to assist her during his absence.  However during his absence the wife decided to sell the K Street property.  He deposed that the wife made this decision without reference to him and for her own reasons, which did not include that she needed the funds, given that he had ensured she had more than adequate funds to support her during his brief trip overseas.

28. On the evidence the wife sold the K Street property on 20 December 2001 for $260,000, with settlement being finalised on 22 February 2002 (par 8(a) wife’s trial affidavit.)  There is documentary evidence of that, namely Exhibit “H3” which is the wife’s taxation return for the financial year ended the 30 June 2002.  That indicates that on 22 February 2002 the wife received $259,857 on the sale of K Street.

29. In all the circumstances, I prefer the wife’s evidence, namely that the husband was away for at least four weeks.  I also prefer the wife’s evidence that the husband did not make financial provision for her whilst he was away or indeed whilst she was pregnant.  I accept that the wife sold the K Street property to alleviate the financial pressure which she was experiencing.

30. In his trial affidavit the husband deposed that the nett proceeds of the sale of K Street were $81,417.  During cross-examination the wife agreed that the nett proceeds of sale were a sum in excess of $80,000.  The wife’s evidence was that the proceeds were applied to discharge part of her borrowings, to acquire a motor vehicle and to invest $35,000 for the child.  There appears to be no dispute as to this.  The investment for the child was by way of a term deposit.  During cross-examination the wife agreed with Mr Spicer that it was her choice to make this investment.  When asked whether she had had discussions with the husband about this, the wife responded that the husband had known of her intention, adding that he had “offered” to take this amount and apply it towards the reduction of his mortgage liability.  She added that there had been a number of arguments about the application of those particular funds.  It is convenient to note here that the wife was not able to retain the moneys invested for the child, and this is a matter to which I will return.

31. The husband asserts he borrowed the further sum of US$5,000 from his cousin on 26 February 2002, and as earlier noted this will be dealt with later.

Wife’s Return to Work

1. As I have earlier recorded the child was born in March 2002.

2. When the child was about two months old the wife took up a short-term contract with R Department and it was her evidence that arrangements were made at the time for her parents to care for the child on a full-time basis.  This was notwithstanding the fact that the husband was working from home.  It was the wife’s evidence that she contracted her services through L Pty Ltd.  She told Mr Spicer during cross-examination that the payment from R Department was $45 per hour and on average she worked perhaps eight hours per week.

3. During further cross-examination about the dates when the wife was working, Mr Spicer questioned the wife about whether or not she had disclosed the earnings she received through L Pty Ltd.  He had called for the wife to produce her taxation returns for the financial year ending 30 June 2003 and this was tendered as Exhibit “H2”.  However it became clear and was obvious that the relevant financial year would have been that ending 30 June 2002.  That tax return was also called for.  It was produced and received as Exhibit “H3”.  The document does not include reference to any source of income other than that received from WP Company.

4. The wife’s evidence was that her taxation returns for the relevant year was prepared by her husband and/or his accountant, however it is trite to say that it was the wife who was required to disclose all income received in her taxation return and it is clear on the evidence that she did not disclose any payments from R Department or L Pty Ltd for the financial year ending 30 June 2002.

5. It is common ground that the wife returned to work on a full-time basis when the child was about four months old.  This would have been about July 2002.  It was the husband’s evidence as set out in par 29 of his trial affidavit that he was “not keen” for the wife to return to work and that he encouraged her to stay at home at that time.  He added that the wife made her own decision to return to work.

6. The wife had said in her first affidavit that her return to employment with R Department arose in circumstances where the husband encouraged her to return to employment.

7. I am unable to resolve the parties’ respective versions, however to my mind nothing much turns on this issue.

The Wife Buys the Husband’s Car

1. It is common ground that the husband sold the wife his motor vehicle (a Toyota Camry) shortly prior to her return to work.  The wife, according to the husband’s trial affidavit, had been using that vehicle, given that he was working from home.  However he had arranged to trade-in this vehicle to purchase a Toyota Avalon vehicle and the wife eventually agreed to take the Camry.  According to the husband the wife acknowledged that as she had intended to buy a car it was “fair for her” to pay the husband the trade-in price.

2. The wife’s evidence was that she accepted the husband’s proposal that she should purchase the husband’s motor vehicle by paying him the trade-in price which he had been offered. In her first affidavit she expressed her disappointment that she was required to acquire the car from the husband, rather than it simply being made available to her to assist her in her return to work as well as in promoting child-care arrangements for the child.

1. I accept the wife’s evidence that the purchase of the car was funded from the proceeds of the K Street property.

2. The transaction would have taken place around about May 2002.  I find this on the basis of an entry in the husband’s Income Tax Return for the financial year ending 30 June 2003 (part of Exhibit “H4”).  He deposed there to having purchased a Toyota Avalon on 14 May 2002, the relevant entry being with regard to work-related motor vehicle expenses for that financial year.

Arrangements for the child

1. After the wife’s return to work on a full-time basis the child was cared for by the wife’s parents during the working week.  The wife told Mr Spicer during cross-examination that her mother cared for the child from Monday to Friday until he was nine months old and after that time the husband’s mother assisted one day each week.

2. The husband’s evidence in his trial affidavit was that he had cared for the child each Friday.  He had flexibility because of his self-employment to be able to arrange to stay home each Friday.  Otherwise, he concurred with the wife’s evidence that the maternal grandparents, principally the maternal grandmother, cared for the child from Monday to Thursday each week.

3. It was the wife’s case that she provided primary care for the child until separation, but within the parameters of her employment commitment.  It was the husband’s case as set out in his trial affidavit that the husband and the wife shared all matters relating to the child’s care until separation.

4. Some four months after the wife acquired the husband’s motor vehicle it broke down.  The wife borrowed from a friend and purchased a motor vehicle for herself.  The wife later repaid her friend.

5. The husband asserts that he borrowed a further sum of US$10,000 from his cousin on 11 October 2002.  As foreshadowed this matter will be dealt with later.

6. The husband asserts that his mother paid a further amount of $10,000 into his mortgage account with the National Australia Bank, probably in 2002.  As foreshadowed, this matter will also be considered later.  For present purposes it is sufficient to record here that I am not satisfied that the husband is indebted to his mother and even if he were, I am by no means satisfied that his mother would require payment.

7. On 30 June 2003 the husband drew down $10,000 on the mortgage secured on the W Street property.  This was paid into another of the husband’s accounts.

Separation – 5 July 2003

1. As earlier noted counsel for each of the husband and the wife adopted different approaches towards the formulation of the pool of assets.  The wife submitted that the pool at separation should be utilised for the purposes of division but included in that pool the current value of real estate.  Liabilities were noted as at the date of separation (see Schedule “B” to wife’s written submissions).  The husband adopted a more traditional approach, listing the value of assets and the amount of liabilities as at the date of separation (see Exhibit “B” to husband’s written submissions) and then later performed the same exercise as at the date of hearing (see Exhibit “C” to husband’s written submissions).

2. There are a number of differences in the respective calculations and schedules and it will be convenient to deal with this aspect later.

The Arrangement between the Husband and Mr Z

1. During the financial year ending 30 June 2004 the husband entered into an arrangement with Mr Z.  Mr Z is a sole trader and operates a software development business known as DS Company.

2. Reduced to its bare bones the arrangement involved L Pty Ltd paying DS Company, allegedly as a subcontractor, again allegedly, for work carried out.  Shortly after payment however a large proportion of the money was returned in cash by DS Company to L Pty Ltd. DS Company recorded this as “refund to customer”.

3. L Pty Ltd entered the payment to DS Company in its financial records as an expense, however, the money which was refunded was not accounted for by the husband or L Pty Ltd.  The evidence was that the husband kept the money in cash.

4. The wife had raised in her trial affidavit (sworn or affirmed in November 2006) queries about the increase in subcontractors’ fees which emerged in L Pty Ltd’s Profit and Loss figures.

5. There had been correspondence about this matter between the solicitors for the husband and the wife.  The husband confirmed during cross-examination that he was aware of the correspondence which was directed to the arrangement between L Pty Ltd and DS Company. He also confirmed that, on his instructions, his solicitor advised the wife’s solicitor that there was no relationship other than as a client/contractor.  He agreed that this was “just plain wrong”.

6. Mr Z had been subpoenaed to produce documents prior to the hearing.  Some of the documents he produced had had the figures relating to refunds or repayments “blanked out”.

7. The husband agreed with Mr Dickson that it was only when he knew “the game was up”, that is when he knew that Mr Z had finally been required to produce “the real documents”, without them being blanked out, and that he was subpoenaed to give evidence, that the husband in part “confessed”.  This “confession” was the explanation (not completely accurate) given by the husband in par 35 of his trial affidavit (filed 4 May 2007).  No reference was made in his Financial Statement filed late 2004, to any of the above matters.  It was not until the husband affirmed his Financial Statement on 10 August 2007 that there was any acknowledgement by the husband (see items 41 and 54).

8. On Mr Z’s evidence L Pty Ltd paid DS Company a total of $74,000 between April 2004 and August 2005 and the husband received cash back from Mr Z of $69,580.  According to the husband’s affidavit the payments made totalled approximately $80,000 and he was reimbursed by payments totalling approximately $54,000.

9. These transactions will be enlarged upon later.  For present purposes I record that I found the husband’s various versions of these events unconvincing and at times risible.  His expressed inability to comprehend what he had done and its effect on a financial level must be looked at in light of the fact that he holds a Masters Degree in Economics.  I say that on the basis of information recorded in Ms Y’s First Report dated 2 November 2006 (see p 5).  Whilst the husband did challenge Ms Y’s factual accuracy in some areas, this was not one of them.

Arrangements for the child following Separation

1. The husband deposed in par 5 of his trial affidavit that until September 2003, and by agreement, the child was in his care all day Friday each week;  all day Saturday each week;  and for several hours on one day midweek.  The husband deposed that additionally he was able to have the child in his care overnight on a few occasions.

2. The wife responded to this part of the husband’s affidavit in her second affidavit but did not deny what the husband had said as to the arrangements for the child following separation.  Accordingly I accept the husband’s evidence.

3. The wife has also not disputed the husband’s evidence that these arrangements ceased in about September 2003, so far as overnight contact arrangements were concerned.  She has however in her second affidavit explained certain other matters raised by the husband.

4. The husband’s evidence as set out in his trial affidavit was that he then saw the chld regularly each Friday from 9:00am until 6:00pm and each Saturday from 9:00am until 5:00pm.  The wife does not dispute this and indeed was recorded by Ms Y in her first report as having said as much to her.

5. On Fridays when the child was with his father, the child was taken to a child play group conducted under the auspices of an ethnic community group.  It was the husband’s view that it was important that the child should play with other children who could speak Russian, given that the husband and the wife both have a Russian background, and the Russian language was one with which the child was comfortable.

6. The evidence establishes that the child attended the playgroup from the middle of 2004 until some time in 2005 (see Annexure “SR7” to wife’s second affidavit).

7. The wife was not aware that the child was attending at the playgroup and she told Mr Spicer that she only became aware of this on the first interim hearing of these proceedings.  It is convenient to note here that the thrust of the wife’s objection to the child’s attendance at this centre was because of language difficulties which the child had, and this is a matter to which reference will subsequently be made.

8. The wife moved into her own rental accommodation in February 2004 and at or around this time the child commenced childcare attending two days per week.  The wife paid the childcare fees.  The wife confirmed in par 19 of her first affidavit that her parents continued to care for the child and that the husband had contact with the child on Friday and Saturday of each week.

Child Support

1. As I understand it from Mr Spicer’s opening the first Child Support Assessment issued on 7 June 2004.  Following an application by the wife a Senior Case Officer increased the assessment on 3 September 2004, setting an annual rate of $6,000 effective from 7 July 2004 to 31 August 2005 (see Annexure “SR5” to wife’s trial affidavit p 2 of 8).  It is common ground that the husband made the required payment during that period.

The husband’s cousin is repaid

1. The husband deposed in his trial affidavit that the total amount provided to him by his cousin was AU$54,560 and that he utilised the payments to assist him in paying off loans secured over W Street.  He further deposed that the money had been repaid in full. He contended that the repayment occurred in October 2004.

Proceedings Commence

1. On 15 November 2004 the wife’s application for final orders was filed.  She sought orders in respect of the child and also sought orders in relation to property and lump sum spousal maintenance.  That part of her application was not particularised and she sought to reserve particularisation until discovery and valuations had been obtained.

2. Before the first return date of the wife’s application the husband sent her an email.  The email was dated 25 November 2004 and it is Annexure “SR1” to the wife’s trial affidavit.  It concerned issues relating to the child having contact with the paternal grandmother and foreshadowed that legal action would be taken by the paternal grandmother unless “conditions” in an earlier email of the husband were accepted by the wife by the end of the day.

3. On 9 December 2004 the husband filed his Response to the wife’s application for final orders.  That Response dealt with financial matters as well as matters relating to the child.

4. On 22 December 2004 the husband filed an Application in a Case seeking contact with the child from 9:00am each Friday to 6:00pm each Saturday, together with periods from after childcare on either Monday or Tuesday of each week on an overnight basis.

5. I am satisfied on all the evidence that it had been proposed that the child’s childcare arrangements would change during the 2005 calendar year.  The husband’s position was that he had work commitments on Mondays, Tuesdays and Wednesdays and that Friday was the only day available to him.

6. Interim orders were made in late January 2005 pending the proceedings returning to Court on 15 February 2005.  Those orders were made by consent.

7. On 15 February 2005 further interim orders were made, again by consent.  It was ordered that each of the husband and the wife were to retain joint responsibility for decision making in relation to the child’s long-term care, welfare and development.  An interim order was made that the child was to live with the wife.  An interim order was also made that the husband would have contact with the child each week from 7:45am on the Friday until 4:00pm on the Saturday.  That contact was to commence on 25 February 2005.

8. Both before and after those orders were made there had been correspondence between Victoria Legal Aid, acting on behalf of the paternal grandmother and the wife’s solicitors.

9. On 1 March 2005 the paternal grandmother sought leave to intervene in the proceedings.  She sought contact with the child each Tuesday from 4:00pm to 7:00pm, together with other occasions if the husband was unable to exercise contact because he was outside the Melbourne metropolitan area or otherwise “incapacitated”.

10. On 4 April 2005 Joske J adjourned the paternal grandmother’s application and made directions for filing and service of all further affidavits and any amended applications.  The wife’s costs were fixed in the sum of $1,250 and reserved.

11. The proceedings came before Registrar FitzGibbon (as he then was) on 28 April 2005.  The paternal grandmother’s interim application was dismissed and she was ordered to contribute the sum of $500 towards the wife’s costs.

The child has Surgery

1. It is common ground that the husband and the wife discovered when the child was about one year old that he suffered from a condition called “Trigger Thumb”.  This condition was described by the husband as “a painful condition in which a thumb locks when it is bent” (see par 19 husband’s trial affidavit).  The husband and the wife had received medical advice that surgery might be required to relieve the symptoms.  The wife sent an email to the husband dated 31 May 2005 (Annexure “G” to husband’s trial affidavit).  In that email she advised him that she had scheduled surgery to correct the condition.  That surgery had been tentatively fixed for 1 July 2005 and the wife told the husband that the date had been confirmed the previous day (30 May 2005).  She explained in her email that until the date had been confirmed it could have been rescheduled by the surgeon.  She also explained that the day in question was a Friday, which was the only day that the surgery could be carried out in a public hospital.  The cost in a public hospital was much less than what would have been charged in a private hospital.  Friday, of course, was a day when the husband would normally have contact with the child.  As the husband correctly said in his trial affidavit the wife requested that he forego his access visit to the child for that particular week.  The husband also correctly points out that the wife did not suggest any make up time in that email.

2. According to the husband he requested information as to the name of the surgeon and where the operation was to take place, however, the wife refused to provide this information to him and he was obliged therefore to engage his solicitors to obtain the information.  The husband opposed the wife’s request to forego his time with the child, saying that he knew he “was capable of providing [the child] with all appropriate care on the day of the operation and after the operation was finished”.  He went on to say, that after he had obtained the necessary information from the surgeon he decided to exercise contact with the child on that day and after his operation.  He added that he also advised the wife that “she was welcome to communicate with, and visit [the child] whenever she chose”.

3. It appears to be common ground that the operation went smoothly and without any complications.

4. The husband’s criticisms of the wife as expressed in his trial affidavit went to the fact that she had made a unilateral decision to schedule surgery for the child without his consent, together with the manner in which she approached the issue of time which he was to spend with the child.

5. In her second affidavit, the wife took issue with the husband’s comments as to certain paragraphs of his affidavit and in particular, in relation to the child’s operation. Mr Spicer did not cross-examine her about this matter.  Ms Buchanan (on behalf of the I C L) did.

6. When Ms Buchanan put to the wife that she had not consulted with the husband about the operation the wife’s response was that when the child was a year old there were two appointments, one of which the parents both attended.  She went alone to the second appointment and it was made clear that the operation would need to be done when the child was about three years of age.  It was agreed between the husband and the wife that the operation would be done privately so that the child would not have to go on the waiting list.

7. The wife agreed with Ms Buchanan that whether or not the child had an operation was an important issue and one which his parents should share.  She went on to say however that it had been discussed two years beforehand and both parents discussed the matter.  They knew it was going to happen when the child was about three.

8. It is the case that the wife made arrangements unilaterally about the scheduling of the surgery.  This was an incident of parenting about which the husband should have been consulted.  Part of the wife’s reasons for doing so, however, can also be gleaned from the email in question which relevantly states:

   “As you know we discovered two years ago that [the child] was born with a condition called Trigger Thumb.  The medical advice has always been that if this condition had not corrected itself by they time [the child] was about three, surgery to correct would be required.  [The child] still shows the signs of this so it is time for it to be corrected by surgery.

   During the last two years you have not asked about progress of [the child’s] condition, so I am informing you that his condition has not changed and so I have scheduled surgery to correct his Trigger Thumb for 1 July 2005.”  (Emphasis added but quotation otherwise not altered.)

9. The second aspect of the husband’s criticism was as to the way the wife approached the issue of time which he was to spend with the child.  He was not any more specific than this.

10. To my mind, however, a plain reading of the email demonstrates a sensitivity of approach by the wife.  Relevantly she wrote:

    “…  As the whole experience of surgery and the hospital will be unsettling for [the child] I feel that it would be best if he was taken to the hospital by myself and that I am there when he come out of surgery and then I take him home so that he can recover in the most familiar and comforting environment.  The surgery is very minor but [the child] will be unsettled so I feel that it would best if you would for go your access visit on this week so that he can recover and settle down again.  There will be some pain immediately after the surgery and there will be some after care to ensure that any pain is managed, the wound is managed to ensure that an infection does not set in.

    So in [the child’s] best interests I request that you for go any access visit to [the child] on this week.  Then the following week, when [the child] has recovered, the access visits will continue as normal.  I am just trying to do what is best for [the child] and I believe that you, as his father, would like to do the same thing.  I am sure that [the child] will still be unsettled for a few days and therefore it would be best for [the child] to spend these days following the surgery at his home where he spends most of his time and feels most comfortable at.

    With all this in mind I believe that you will do what is best for [the child] and his well-being by supporting him in his recovery process.”  (Quotation not altered.)

11. Setting aside the lack of consultation, I cannot see why the wife could be criticised for the manner in which she dealt with this issue in that email.

12. The matter did not appear to loom large in the husband’s case, given that Mr Spicer did not cross-examine the wife about it.  Indeed, during re-examination the husband told Mr Spicer that there had never been any difficulty in relation to the child’s medical treatment.  Subsequently, and without opposition, the husband was permitted to reconsider that answer.  He said that the Court had been incorrectly informed.  He had been confused and advised that there had been disagreement about a health issue, namely who would care for the child after his operation.

The Wife seeks an Increase in Child Support

1. The basis for the amount claimed was said to be:

   “49.The husband should be assessed on the basis of his latest taxable income in the order of $120,000 per annum.  The wife’s package is $77,000 per annum.  If those were the figures that the Child Support Agency were to use, the assessment that would be created would be $14,004 per year ($1,167 per month or $269 per week).  The wife’s application seeks $250 per week.”

2. The husband opposes the application and seeks that it be dismissed.  His Cross-Application (par 27) has not been pursued save as I have hereafter noted and appears in any event to be based on an equal sharing of time.  There were no submissions make in support..  He has not disputed the basis upon which the wife’s calculations have been made.  His submissions were set out on p 5 of the Response to the wife’s written submissions in the following terms:

   “It is submitted that there is no evidence which would justify a departure from the current assessment of Child Support.  There is no evidence that the husband’s taxable income in the foreseeable future will amount to $120,000 per annum.  There is no evidence justifying that the rate of Child Support is inappropriate and it is therefore submitted that this part of the wife’s application should be dismissed.  On any view, it would be quite unjust to exclude from any Child Support calculation the $12,000 which the husband has paid on behalf of [the child] to [U School.”

3. That latter contention related to a further submission on behalf of the wife that the husband should be liable to pay the U School fees without affecting the amount properly payable for child support.  Various reasons were advanced for this.

4. I should also note that one of the reasons advanced on behalf of the wife for “locking in” the assessment, was that there was no reason to expect that either party’s job was under threat or that his or her financial position would change, in an income sense, in any meaningful way in the future.

The Law

1. Section 3 of the CSAA sets out the duty of parents to maintain their children.  This duty has priority over all commitments of the parents other than commitments necessary to enable the parent to support himself or herself and any other child or another person that that person has a duty to maintain.

2. The objects of the CSAA are set out in s 4.  This section provides as follows:

   “Section 4   Objects of Act

   4(1)  [Principal object]

   The principal object of this Act is to ensure that children receive a proper level of financial support from their parents.

   4(2)  [Particular objects]

   Particular objects of this Act include ensuring:

   (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.”

3. I bear those objects in mind.

4. I am satisfied (and it was not submitted to the contrary) that it would be in the best interests of the husband and the wife that it is appropriate to deal with the Child Support Application, noting that both parents are parties to other applications before this Court dealing (amongst other things) with financial issues).  (See s 116(1)(b).)

5. The grounds for departure orders are set out in s 117 of the CSAA.  The approach to be taken was set out in Gyselman (1992) FLC ¶ 92-279. The Full Court held that:

   “The structure of (section 117) is that section 117(1)(b) identifies concisely the matters about which the Court must be satisfied and those components are then expanded in subsections (2) to (9).  Section 117(1)(b) identifies a clear three-step process:

   1.        Whether one or more grounds of departure in section 117(2) is established. 

   If so:

   2.        Whether it is “just and equitable” within the meaning of section 117(4) to make a particular order.

   3.        Whether it is “otherwise proper” within the meaning of section 117(5) to make a particular order.

   It is clear from the careful way in which section 117 has been structured that the Court must address each of those three separate issues.”

6. In dealing with the meaning of “the special circumstances of the case” (which appears in s 117(1) and which also precedes each of the grounds set out in s 117(2)) the Full Court said:

   “Whilst it is not possible to define with precision the meaning of that term, as a generality it is intended to emphasise that the facts of the case must establish something which is special or out of the ordinary.  That is, the intention of the Legislature is that the Court will not interfere with the administrative formula result in the ordinary run of cases.  In Savery’s case ((1990) FLC ¶ 92-131) (p 77,897, Kay J … said that ‘special circumstances’ were ‘facts peculiar to the particular case which set it apart from other cases.’ ”

7. The Full Court explained in Sheahan (1993) FLC ¶ 92-375, having been referred to the decision in Savery (supra) that the “relevant facts of the particular case must be considered to determine whether they constitute special circumstances which, in this context, if not taken into account, would result in injustice or undue hardship to any person.”

8. In Gyselman (supra) it was made clear that the Court was not obliged to “slavishly go through” each of the considerations in s 117(4).  In Ross and McDermott (1993) 23 Fam LR 613 the Full Court held at [39] that a practical and sensible approach should be adopted to the task of considering the matters in ss 117(4) and (5), advocating an approach similar to that which the Court had long adopted to what was then “s 68F(2) matters”.

9. For the purposes of s 117(1)(b)(i) s 117(2)(c) relevantly provides:

   “that, in the special circumstances of the case, application in relating 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 parents of the child:

   …

   (ia)  because of the income, property and financial resources of either parent;  or

   (ib)  because of the earning capacity of either parent;  or

   … ”

10. I have elsewhere in these Reasons considered the decision of the Full Court in DJM v JLM (1998) FLC ¶ 92-816.

11. Subsequent to the decision in that case, the CSAA was amended by the insertion of s 117(7B).  It is in the following terms:

    “117(7B)  [Determinations in respect of para (4)(da)]

    In having regard to the earning capacity of a parent of the child, the court may determine that the parent's earning capacity is greater than is reflected in his or her income for the purposes of this Act only if the court is satisfied that:

    (a) one or more of the following applies:

    (i) the parent does not work despite ample opportunity to do so;

    (ii) the parent has reduced the number of hours per week of his or her employment or other work below the normal number of hours per week that constitutes full-time work for the occupation or industry in which the parent is employed or otherwise engaged;

    (iii) the parent has changed his or her occupation, industry or working pattern; and

    (b) the parent's decision not to work, to reduce the number of hours, or to change his or her occupation, industry or working pattern, is not justified on the basis of:

    (i) the parent's caring responsibilities; or

    (ii) the parent's state of health; and

    (c) the parent has not demonstrated that it was not a major purpose of that decision to affect the administrative assessment of child support in relation to the child.”

12. It is clear from s 117(7B) that one or more of the circumstances expressed must be established before the Court can find that it is “just and equitable” if the ground upon which the order would have been made is that the liable parent’s earning capacity is not reflected in his or her income.

Decision of Senior Case Officer

The First Period:  10 January 2007 – 29 February 2008

1. On 21 February 2007 a Senior Case Officer made a determination under Pt 6A of the CSAA to depart from the provisions of that Act relating to administrative assessment of child support.  Section 98C sets out the matters as to which the Registrar or Senior Case Officer must be satisfied before making such a determination.  They are the same grounds as those used by a Court in deciding whether to make a departure order under Div 4 of Pt 7 of the CSAA.

2. The ground relied upon by the wife in her application was that the child support assessment did not take into account the income, earning capacity, property and financial resources of the applicant or the respondent.  As the Senior Case Officer noted it was incumbent upon the wife to show that the relevant assessment was not “fair” because of the income, earning capacity, property and financial resources of either or both parties.  That, in turn, involved two components, namely, that the income, property or financial resources of either parent or their “capacity to pay” made the relevant assessment unfair and/or either parent’s “capacity to earn” made the relevant assessment unfair.

3. The husband’s reasons as given in his Cross Application were twofold.  The first was the same reason relied upon by the wife, but he also claimed that the costs of maintaining the child were significantly affected because he was being cared for, educated or trained in the manner expected by his parents.  (Section 117(2)(b)(ii).)

4. The Senior Case Officer set out a brief history of previous Child Support Assessment decisions.  He noted information which had been provided for his consideration.  He also noted that the husband had provided a written response to the wife’s Application, which included his own Cross Application.

5. He then proceeded to set out and consider the submissions made by both parties in respect of their own and the other party’s financial circumstances.

6. He determined that, so far as the wife was concerned, it was appropriate to base his decision on her income, property and financial resources.  He set out her taxable income for the financial years 2005, 2006 and 2007. He also considered the issue raised by the husband concerning the H Street property which is rented by the wife’s mother.

7. The Senior Case Officer then turned to consider the husband’s position and determined that his decision should be based on his capacity to earn.  He then made reference to the child support legislation effective from 1 July 2006 which made provision for certain criteria to be met in dealing with the capacity to earn.  He set out those criteria in what was a clear reference to s 117(7B) of the CSAA.  He made a finding that the husband was not working despite ample opportunity to do so (s 117(7B)(a)(i)).  He found that s 117(7B)(b)(i) and (ii) had been met.  Finally, he noted that s 117(7B)(c), which is a rebuttal presumption had not been effectively rebutted.  The consequence was that he found that he was able to make a decision based on the husband’s capacity to earn.

8. The Senior Case Officer then turned to consider the question of what was the husband’s fair and reasonable earning capacity based on his primary responsibility to provide for the child’s needs and the available information.

9. In this respect he examined the husband’s taxable income for the 2005 and 2006 financial years.  He was satisfied that the husband was his company and that for child support assessment purposes his company profit and individual income should be taken in combination.

10. When turning to the 2007 financial year the Senior Case Officer determined that for the period 1 July 2006 to 31 December 2006 the husband’s monthly payments of $10,272, when annualised amounted to $123,264.  The husband had maintained that his total income for that period was $61,632 and that he should be assessed at that income level and not the annualised amount. 

11. Importantly, in the circumstances of this case, it was noted that the husband had not provided any “updated financials” in relation to his or the company’s expenses from 1 July 2006.  The Senior Case Officer therefore felt it appropriate to allow one-third of the gross income and expenses ($41,088 per annum) leaving a balance amount of $82,176 per annum.  He was satisfied that the husband should be assessed at that income level for child support purposes, noting that this was a special circumstance, given that the amount differed from his currently assessed income level.

12. Notwithstanding the husband’s unemployment from 1 January 2007 the Senior Case Officer was satisfied that he had the on-going earning capacity of $82,176 per annum.  He noted that the background of information indicated that the husband had been capable of maintaining on-going work and income.

13. The Senior Case Officer then turned to the balance of the husband’s Cross Application, which related to the child’s costs.  The husband had relied on the payments which he was to make in relation to the child’s attendance at U School and it was his contention that the husband and the wife should each pay 50 per cent of the annual costs of $12,000.

14. The wife’s case can be summarised by saying that it was her understanding that if there was to be an adjustment between the husband and the wife for the child’s childcare, then it was to be “a property settlement matter” not a “child support matter.”  In the event the Senior Case Officer was satisfied that there were no special circumstances which established the ground relied upon by the husband.  He expressed the view that it appeared clear that both the husband and the wife had agreed to place the child at U School for the 2007 year and that they also appeared to have their own arrangement in relation to the cost.  In those circumstances he was satisfied not to make a finding in that regard.

15. The Senior Case Officer then turned to consider the question of whether it was just and equitable within the meaning of s 117(4) to change the assessment and whether it was otherwise proper to change the assessment within the meaning of s 117(5).

16. He made no change to the assessment for the period between 1 December 2006 and 9 January 2007.  It was his view that it would be “unfair to create a retrospective debt”.  He then made the determination to change the assessment for the period 10 January 2007 to 29 February 2008, which was assessed on the husband’s child support income amount which he had determined at $82,176 per annum, and the wife’s child support income amount which he had determined as $65,653 per annum, which raised an annual rate of $10,135 or $844.58 per month.  He declared his satisfaction that this change of assessment was both fair and otherwise proper.

Discussion

1. I am not satisfied that a “special circumstance” has been established for this period.

2. There is simply no basis upon which I can conclude that the husband’s latest taxable income is in the order of $120,000 per annum.

3. I am asked to find this based on the wife’s earlier submission that I can “comfortably conclude that the husband has the capacity to earn not less than $10,000 per month (exclusive of subcontracting, travel or other costs)”.  At best I could conclude that the husband had the capacity to generate gross fees through L Pty Ltd of $120,000 per annum exclusive of travel costs.  However, the sub mission does not take into account other legitimate expenses which L Pty Ltd must incur.

4. The amount of those legitimate expenses has not been quantified.  There are no submissions as to what amount it would be proper to deduct.

5. I have already set out the manner in which the Senior Case Officer dealt with the absence of updated financial company information.  It is not submitted that I should adopt the same or some other procedure.  However, I simply cannot ignore the fact that L Pty Ltd must have incurred some (unquantified) legitimate expenses.

6. The same reasoning would apply to rental payments of about $5,700 per annum which the husband is entitled to receive from his mother.  That would be a gross figure and the husband would be entitled to deduct proper expenses incurred in earning that income.

7. Further, nothing has been submitted which would lead me to conclude that the Senior Case Officer had not acted appropriately in his determination or approach.  It was, of necessity, somewhat arbitrary in the manner in which he determined the expenses to be deducted, but it still represented a sensible and appropriate way in addressing the problem with which he was faced.

8. For all those reasons I would not interfere with the assessment made by the Senior Case Officer for this period.

Subsequent Periods Commencing 1 March 2008

1. The Senior Case Officer’s decision would, on its face, have ceased on 29 February 2008.  I am uncertain whether the assessment has reverted to an assessment based on taxable income for the 2007 financial year, assuming that taxation returns have been filed.  Alternatively, it may have reverted to an assessment based on earlier taxable incomes.

2. The legal practitioners were requested to provide this information on the date which had been appointed for the publication of these Reasons, and also to advise the terms of any new assessment.

3. Further submissions may be necessary.  At this stage, however, I note my findings on the basis of the husband’s own evidence as to the actual income of L Pty Ltd which he assessed for the 2007 financial year.  I found he had the on-going capacity to generate consultancy fees through L Pty Ltd of not less than $99,624 per annum gross.  To this should be added his on-going capacity to obtain rental from his mother of about $5,700 per annum gross.

I certify that the preceding nine hundred and twenty-six (926) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Carter.

Associate:                 

Date:    25 June 2008