S and S
[2008] FCWA 47
•2 MAY 2008
[2008] FCWA 47
| JURISDICTION | : | FAMILY COURT OF WESTERN AUSTRALIA |
| ACT | : | FAMILY LAW ACT 1975 CHILD SUPPORT (ASSESSMENT) ACT 1989 |
| LOCATION | : | PERTH |
| CITATION | : | S and S [2008] FCWA 47 |
| CORAM | : | MARTIN J |
| HEARD | : | 25 MARCH 2008 |
| DELIVERED | : | 2 MAY 2008 |
| FILE NO/S | : | PT 501 of 2008 |
| BETWEEN | : | S |
| Applicant/Wife | ||
| AND | ||
| S Respondent/Husband | ||
| Catchwords: |
FAMILY LAW - interim orders - spousal maintenance - departure from Child Support
Assessment
Legislation:
Family Law Act 1975 - s 72, s 74 and s 75
Child Support Assessment Act 1989 - s 117
Category: Not Reportable
Representation:
Counsel:
| Applicant: | Mr Hooper |
| Respondent: | Mr Wilson SC |
[2008] FCWA 47
Solicitors:
| Applicant: | Dwyer Durack |
| Respondent: | O'Sullivan Davies |
Case(s) referred to in judgment(s):
Gyselman and Gyselman (1992) FLC 92-279
Kiesinger & Paget [2008] FamCAFC 23
Mitchell and Mitchell (1995) FLC 92-601
[2008] FCWA 47
1 The issue to be determined is the wife’s Form 2 application, seeking injunctions, interim spousal maintenance and child support departure.
2 On the hearing date of 25 March 2008, several issues were resolved between the parties, and I made orders to reflect the position.
3 In relation to the injunctions sought by the wife, which largely relate to
preventing the husband from dealing with certain assets, the husband was prepared to give undertakings on a without admission basis. The husband also agreed that he would continue to meet the private health insurance premiums of the wife.
4 Pending determination of the proceedings, I made an order that the husband
continue to deposit $2,000 per fortnight into the wife’s account and meet various
expenses relating to the parties’ children.5 At the conclusion of the hearing I made the following orders:
“And on the undertaking of the respondent, [Mr S], given to the Court, on a
without admission basis, until further order or unless excused by the Court:
(a)
to give the Applicant, [Mrs S], not less than 21 days’ prior written notice of any intention to dispose of any item of property having a value of greater than $10,000 (and including those that he owns and which are specified in paragraph 1 of the annexure to the Form 2 Application filed by the Applicant on 7 February 2008);
(b)
to give the Applicant not less than 21 days’ prior written notice of any intention to further encumber any item of his property;
(c)
to give the wife not less than 21 days’ prior written notice of any intention to transfer, assign or further encumber his shares in, or resign as a Director of, the following companies:
(i) [AB] Investments Pty Ltd; (ii) [HT] Investments Pty Ltd; (iii) [TCO] Number 1 Pty Ltd; (iv) [TCO] Number 2 Pty Ltd; and (v) [LT] Investments Pty Ltd. (d)
to give the Applicant not less than 21 days’ prior written notice of intention to resign any position he holds in [TCO] Number 1 Trust or [TCO] Number 2 Trust;
(e) to give the Applicant not less than 21 days’ prior written notice of:
(i)
any notice of meeting he receives with respect to any of the companies referred to in sub paragraphs (c);
(ii)
any notice he receives of any claim or demand made by his parents or either of them; and
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(iii) any notice he receives from [his sister], with respect to her intention to change any office in, or terms of, any trust in which he hold office or of which she is Appointor.
It was ordered that:
…2. Pending determination of the application, the Respondent continue to deposit the sum of $2,000 per fortnight into the Applicant’s account and meet the other expenses that he is presently meeting in relation to:
(a) school fees; (b) tuition fees; (c) other expenses for the children; and (d) the private health insurance premiums for the said children, on the basis that he is not to delete the Applicant from the coverage under the policy. … 4. The solicitors for the Respondent be permitted to file and serve a further document in relation to the Applicant’s expenses, by close of business on Thursday 27 March 2008 and the solicitors for the Applicant may file any response within 7 days of receipt.”
6 The proceedings were otherwise adjourned to a conciliation conference in June
2008.
Orders sought
7 The remaining orders sought by the wife in her Form 2 application filed on
6 February 2008, not dealt with by the orders made on 25 March 2008, are as follows:
“6. The husband pay by way of spousal maintenance the sum of:-
(a) $10,500.00 per calendar month for living expenses; (b) $150.00 per calendar month for the maintenance and upkeep of the property [in the country]. 7. There be a departure order from the assessment by the Child Support Agency dated 24 January 2008 and in lieu thereof the husband pay by way of child support:-
(a) $14,000.00 per calendar month; (b) school fees, school excursions, camps, music tuition, school requirements, books, uniforms and school incidentals for the children’s education at [the private schools]. 8. Any order for the payment by the husband of child support and spousal maintenance if the Court considers it necessary include an order that payment be made from the proceeds of sale of property
[2008] FCWA 47
(other than real property) on such terms and conditions as
determined by the Court.
...
10. The husband return or procure the return to the wife of the keys and remote control/s in respect of the [suburban] property.
11. The wife and the husband share the use and occupation of the [holiday home] with the school holidays to be shared equally and otherwise by agreement.”
8 In response, the husband sought the following orders in his application filed on
6 March 2008:
“On the basis of the orders being on the basis of the undertakings of the
husband filed herein (without admission):1. Pending the disposal of the proceedings, as and by way of spousal maintenance, the husband pay, or cause to be paid, as and when they fall due:
(a) Fixed outgoings on the property situated at [the suburban address] in the State of Western Australia and more particularly described in Certificate of Title Volume xxxx Folio xxxx (“ the suburban address”) and being: (i) Local authority rates and taxes;
(ii) Water rates and taxes;
(iii) Premiums for the insurance of the home and contents;
(b)
All reasonable costs for any required repair of [the suburban address] and otherwise for the repair, maintenance and upkeep of the said property as agreed in writing between the parties;
(c)
The following costs associated with the use and occupation of [the suburban address] namely those reasonable and required expenses for:
(i) The following services connected to the property:
a) Electricity; b) Gas; c) Water Consumption; (ii) Security services for the homes.
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(d) Fixed outgoing on the adjoining block situated at [the suburban address] in the State of Western Australia and more particularly described in Certificate of Title Volume xxxx Folio xxxx(“the suburban address]”) and being:
(i) Local authority rates and taxes; (ii) Water rates and taxes; (iii) Insurance for the said property. (e) In relation to the use by the wife of the [motor vehicle] in her possession and control, all reasonable and required maintenance and servicing. 2. Pending disposal of the proceedings, as and by way of further spousal maintenance, the husband pay, or cause to be paid, the sum of $360.00 per week by way of direct deposit to an account of the wife to be nominated to the husband by the wife in writing.
3. Pending disposal of the proceedings, as and by way of child support and in addition to the amount payable from time to time pursuant to any assessment issuing by the Child Support Agency, the husband pay, or cause to be paid as and by of child support:
(a) Tuition fees charged by the private schools in which the children are enrolled from time to time and such other fees and charges as the parties agree in writing; (b) All other agreed and reasonable incidental expenses associated with the children’s education; (c) Premiums for the continued medical insurance for the children at a rate of cover not less than that enjoyed by them at the date of separation; (d) The cost of calls made the children on the mobile telephones provided for the use of the two eldest children. 4. The Application in a Case of the Wife filed 7 February 2008 otherwise be dismissed.”
9 A major issue is the significant dispute between the parties as to the husband’s
financial position. The wife says that the husband potentially controls wealth in the vicinity of $100 million, whereas the husband states he has an excess of liabilities over assets of $1.3 million.
10 It is the wife’s position that the parties had a high standard of living throughout
their marriage and it is not appropriate for financial restrictions to be applied to one party and not the other. She says that the husband has the ability to access funds and
[2008] FCWA 47
consequently has the capacity to pay the amounts she seeks, either by selling an asset, or borrowing from his parents, particularly as, on his own case, his financial position contemplates borrowing.
11 The husband says that he would have to borrow funds to make the payments he
is proposing, let alone pay the amount the wife is seeking as spousal maintenance, as he simply does not have the financial resources. He argues that the parties were able to enjoy a high standard of living during their marriage through borrowings, and gifts from his parents. However, he says he should not be expected to approach his parents for money to make payments to the wife, particularly as they may not agree to lend him the money. The husband notes in his affidavit filed on 6 March 2008:
“A fundamental issue [Mrs S] has raised is her belief that, because my father is a wealthy person and has a measure of control over the affairs of [ABC], this translates into a greater income for me.
That is not the case.”
12 The proceedings are still in their very early stages, having only been instituted in
February. It seems likely that the parties, if they continue to take their current approaches, are heading for expensive and protracted proceedings, which is likely to substantially involve the parties’ parents. If they are not doing so already, I would urge the respective families to start working towards an appropriate settlement, which will involve maintenance of both parties’, and the children’s, lifestyles.
Background
13 The husband and wife are both 44 years of age. The husband is employed as
director and deputy chairman of [AB] Pty Ltd (“ABC”). He has held this position since 12 May 1986. The wife is engaged in home duties. She has previously been employed as [a designer], but has not worked outside the home since 1995.
14 The husband has said that the parties married on 12 July 1995, while the wife
says it was 9 July 1994, which is the correct date. The husband says they lived together for approximately a year prior to their marriage and the wife says it was approximately a year and a half. The parties formally separated on 7 August 2007.
15 There are four children of the marriage, [K], born [in] April 1995 (aged 12 years), [A], born [in] November 1997 (aged 10 years), [C], born [in] February 2000 (aged 8 years) and [T], born [in] April 2003 (aged 5 years). Initially, the details of the children were wrong in the husband’s documentation. At this stage the parties have been able to agree the care arrangements for the children. Presently, an agreement having been reached through mediation, the children live predominantly with the wife, spending every second weekend with the husband from 6pm Friday to 7:30am Monday, and at times mutually agreed during school holidays. The husband drives the children to school every day and the wife picks them up.
16 Since separation the wife has remained in the former matrimonial home
consisting of a residence at [the suburban address] and an adjoining block
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(collectively known as the [“suburban Perth] property”). The husband currently
resides in a property at [a suburb nearby] which he leases from his parents.17 The wife commenced property settlement proceedings on 6 February 2008. At
the same time the wife filed an application for interim orders, which are the subject of this determination. The husband responded to the wife’s applications on 6 March 2008.
Interim spousal maintenance
18 Pursuant to s 72 of the Family Law Act 1975:
“(1) A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether -
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years; (b) by reason of age or physical or mental incapacity for appropriate gainful employment; or (c) for any other adequate reason; having regard to any relevant matter referred to in subsection 75(2). …
19 Section 74 of the Act further provides:
“In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with the Part.”
20 The parties did not refer separately in any detail to the matters to be taken into account under s 75(2) of the Act.
21 The wife is also seeking as an alternative that the payment be considered as urgent spousal maintenance. Section 77 of the Act states:
“Where, in proceedings with respect to the maintenance of a party to a marriage, it appears to the court that the party is in immediate need of financial assistance, but it is not practicable in the circumstances to determine immediately what order, if any, should be made, the court may order the payment, pending the disposal of the proceedings, of such periodic sum or other sums as the court considers reasonable.”
22 The major issue in this case is what maintenance the husband is reasonably able
to provide, and what maintenance is required for the wife to be able to support herself
adequately.23 In Mitchell and Mitchell (1995) FLC 92-601, the Full Court said at 81,995:
[2008] FCWA 47
“Thus, the question whether the applicant can support herself “adequately” is not to be determined by reference to any fixed or absolute standard but having regard to the matters referred to in s. 75(2) and more specifically the paragraphs of that sub-section identified above.
Nor is that question to be determined upon a “subsistence” level, as earlier cases under State maintenance legislation suggested …
It is also necessary in determining this issue to have regard to the standard of living of the parties and the financial circumstances of the other person: s. 75(2)(b) and (g). The days are long gone when it is necessary for an applicant for maintenance to use up all of her assets and capital in order to satisfy the requirement that she is unable to support herself “adequately”. Where the line is to be drawn will depend upon the circumstances of individual cases.”
24 The Full Court recently affirmed this position in Kiesinger & Paget [2008]
FamCAFC 23:
“23. Dr Dickey relied strongly on the opening stanza of s 72(1) which provides that a party to the marriage is liable to maintain the other party to the marriage “if, and only if, that other party is unable to support herself or himself”. In our view, this submission glosses over two other important features of s 72(1). The first is the use of the word “adequately”, which imports a subjective element into the determination. The second is the qualifying phrase, “having regard to any relevant matter referred to in sub-section 75(2)”, appearing at the end of the subsection. 24. In considering the implications of the use of the word “adequately”, we concur with the views expressed in Mitchell and Mitchell (supra at 81,995), where the Full Court said, “…the question whether the applicant can support herself “adequately” is not to be determined by reference to any fixed or absolute standard but having regard to the matters referred to in s. 75(2) and more specifically the paragraphs of that sub-section identified above”. (The paragraphs so identified by the Full Court were sub-paragraphs (a), (b), (g), (j), (k) and (n).) 25. The concluding words of s 72 cannot be treated as mere surplus. In Project Blue Sky v ABA (1998) 194 CLR 355 at [71], McHugh, Gummow, Kirby and Hayne JJ said [footnotes and reference to authority excluded]: … a court construing a statutory provision must strive to give meaning to every word of the provision. ... In The Commonwealth v Baume … Griffith CJ cited R v Berchet … to support the proposition that it was “a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or
[2008] FCWA 47
insignificant, if by any other construction they may all be made
useful and pertinent”.26. In our view, the concluding words of s 72(1) direct attention to each of the provisions of s 75(2) which the Court, in the exercise of the wide discretion conferred by s 74, considers relevant in determining whether or not a spouse is able to support himself or herself adequately. The reference is not merely, for example, to s 75(2)(b) which directs the court to consider the “income, property and financial resources of each of the parties…” The Court would be entitled, for example, to have regard to s 75(2)(j), which directs the Court to consider “the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party”.
27. In our view, it was well open to her Honour to consider that the stark imbalance in the capital resources of the husband and the wife after a lengthy relationship was a relevant consideration in determining that the wife was entitled to look to the husband for periodic support pending the final hearing, rather than having to deplete her investments, which represented only a minute proportion of the wealth of the family.”
25 While the circumstances of that case were similar, in that the wife and children
were well-housed, and the wife had some assets on which she could call, the case is distinguishable on the basis the husband had very substantial liquid assets in a share portfolio.
26 The wife is seeking that the husband pay her $10,500 per month for living
expenses and $150 per month for the maintenance and upkeep of a property she jointly owns at [an address in the country] (“the country property”). The husband is offering to pay the wife $360 per week, in addition to paying the wife’s health insurance premiums, the maintenance of her motor vehicle and the rates, utilities and outgoings associated with the [suburban property].
The parties respective financial positions, income and expenditure
27 The husband says he has a negative financial position. In his financial statement
filed on 6 March 2008 he states his current financial position at approximately minus $1.8 million, with assets at just over $13.2 million and liabilities at approximately $15 million. His position is slightly improved by his superannuation valued at approximately $334,318, and some joint assets, which he says total approximately $75,448. Consequently, the husband states his total net assets, including superannuation, stand at approximately minus $1,394,527.
28 The wife claims the husband’s financial position is significantly better than he
states in his financial statement, particularly in relation to the value of his interest in
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[ABC], and the potential dividends he could receive from his shareholding. She states
at paragraph 38 of her affidavit:
“In 2005 the husband received dividends of $1m. The husband informed
me that the dividends were received from his shares, in [ABC]…..”
29 The husband’s affidavit evidence was that his shares in [ABC] have no value, as
they do not produce an income, and he cannot sell them. He says that a dividend has never been declared, and none is proposed. He argues that the declaration of a dividend depends on the decisions of others, whom he does not control.
30 The husband’s weekly financial position is also stated to be in the negative. His
income before tax is approximately $5,300 per week ($275,229 per annum), while his total personal expenditure is listed at $9,558 per week. The husband’s weekly expenses include rent at $1,500, superannuation at $476, income tax at $2,072, credit card repayments at $50, child support at $1,003, expenses associated with [his residential] property and a property at [an address on the coast] ([the holiday house]”) totalling $2,114, expenses associated with his three [prestige] motor vehicles at $199, personal expenses at $571 and other expenses for the wife and the children totalling $1,570. Consequently, according to the husband, he has a shortfall of $4,265 per week. However, as pointed out by the wife’s counsel, the husband has double- counted his rental expenses in his calculations and accordingly his weekly expenses are reduced to $8,058. Therefore, his weekly net financial position is a shortfall of $2,765 per week.
31 The wife’s current net asset position was said to be approximately $627,780 in
her financial statement filed on 14 February 2008. Her assets include a half interest in [the country] property, with a sibling, with an estimated value of $300,000, funds in a savings account totalling $142,955, a [prestige] motor vehicle with an estimated value of $60,000, household contents valued at approximately $10,000 and jewellery valued at $114,825. The wife later filed a further affidavit, on 19 March 2008, noting that she has a further $18,803 in savings held by her step-father for her benefit. Therefore her current assets total approximately $646,583.
32 As to her weekly income and expenditure, the wife says she receives an income
of $1,081 per week, comprising $81 in interest she receives from a Westpac account and an estimated $1000 from the husband. She did not include in this amount, child support she receives from the husband. She states in her financial statement that the husband has been making various payments in child support with the most recent payments being $2,000 on 31 January 2008 and $4,000 on 11 February 2008. She says that $643 is required to be paid. In relation to the wife’s weekly expenditure, she includes income tax of $7.28 per week, a [store] credit card repayment of $70 per week, expenses relating to the [the holiday house] and [the country] properties totalling $8,964 per annum and living expenses totalling $24,712 per month listed in a schedule attached to her financial statement titled “Summary of Required Expenditure for [Mrs S] and Children”. Of this sum, $10,563 relates to the wife’s expenses, and $14,149 relates to the parties’ children. Accordingly, based on this schedule, she seeks $10,500 per month in spousal maintenance from the husband.
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33 On 27 March 2008, in response to the wife’s position, the husband filed a list of
objections to the wife’s expenditure detailed in the schedule referred to above. He sought to reduce the wife’s expenditure based on two objections, firstly, expenditure that includes amounts he already pays and seeks to continue to pay, and secondly, items he considers excessive, extravagant or unnecessary. Under the first category, the husband says he will continue to pay accounts in relation to the [suburban home] including electricity, gas, land rates and taxes, water rates and usage, repairs and maintenance, and also the insurance premiums for the wife and children. If the husband was ordered to continue to meet these payments it would result in a reduction of $1,074 in the wife’s sole expenses as detailed in her schedule.
34 The wife opposes any reduction in the expenses relating to the rates, taxes,
utilities and outgoings of the [suburban] property because she seeks that the husband pay her these amounts so that she can be responsible for them, as she currently occupies the property and the husband does not. She says she does not want to be concerned as to whether the husband has, or has not, made the payments.
35 As to the second category, the husband considered the following items to be excessive, extravagant or overstated in relation to the wife’s expenditure:
Cleaning and ironing
36 The wife attributes $383 per month to cleaning and ironing. The husband
considers this amount to be excessive as the wife is not working and is able to contribute to these activities. He considers $183 to be appropriate. The wife disputes this and says that she has the major responsibility for the care of the children and the management of a large house. She submits it is inconceivable that she be required to go into such detail having regard to the financial history and standard of living of the parties. I accept this is a proper expense in the family’s circumstances.
Training and [Pilates]
37 The wife says she requires $250 per month for training and $110 per month for
[Pilates]. The husband argues that neither of these amounts should be included in the wife’s expenditure as the wife should contribute to these expenses herself should she wish to continue it. Further he says the wife’s gym membership at $65 per month, which he has not challenged, allows her to attend a gym, and that [Pilates] has already been paid up until 27 May 2008. I am prepared to accept these as proper expenses in the circumstances.
Food and household supplies
38 The husband says that this amount should be reduced from $1,498, as claimed
by the wife, to $800. He says that the level of expense is excessive and overstated. The wife responded to this objection by stating that the husband has allowed only $800 per month for food for the wife and nothing for the children. From my understanding of the husband’s objections, he has reduced the food and household supplies expenditure of the wife to $800 per month, but has not objected to the expenditure as it relates to the children, which is stated by the wife as $2,997 per month. Further, the wife says that she calculated her expenditure with reference to previous payments made. I accept that $1,200 per month is a reasonable allowance in the circumstances.
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The wife’s personal allowance and gifts
39 The wife says that she requires $3,799 per month for her personal allowance for
clothing, shoes, personal grooming, hygiene, entertainment and incidental expenses, and $800 per month for gifts. The husband argues that the wife’s personal allowance should be reduced to $500 per month. He considers this to be a reasonable amount, and any further expense is indulgent, and should be drawn from the wife’s own capital and income. In relation to the expenditure on gifts, the husband says the amount should be nil, as the wife should subsidise this expense with her own capital and income.
40 The wife argues that the husband’s challenge is somewhat malicious as it
trivialises the wife’s role and ignores the parties’ financial history and the wife’s
involvement in social and school environments where expectations are very high.41 I do accept that, despite the parties’ usual standard of living, having regard to the
small range of living expenses this sum is required to meet, this figure is high. I
propose to allow $2,500 on an interim basis.Health, medical, dental, sundries
42 The wife attributes $150 per month to health, medical, dental and sundries. The
husband says the expense required should be reduced to $50, as he pays the wife’s private health insurance, and the wife has provided no evidence for the expense. I accept the amount claimed is reasonable.
Skiing within Australia and Overseas holiday
43 The wife has sought an amount of $200 per month for [holidays] within
Australia, and $1,389 per month for overseas holidays. The husband argues that these amounts should not be included in the wife’s expenditure as they are an unnecessary expense for him to be required to pay in the interim. The wife says that the matter is unlikely to be resolved for 12-18 months, and therefore it is necessary that these amounts are included in an interim order, as she would like to be in a position to take the children on a holiday during that time.
44 I accept the husband should make a one-off payment to the wife for a skiing holiday in Australia.
45 In this family’s circumstances, overseas holidays are appropriate, but
consideration of this is premature since it is most likely such a holiday would take place in the summer school holidays, and, at the earliest, October. This issue can be revisited, if necessary, with a specific proposal at a later time.
46 I would expect the wife and children to be entitled to have an overseas holiday
each year, as this has been the usual practice and there is no indication that the
husband does not propose to holiday overseas.47 As a result of the husband’s objections under the second category, he has
decreased the wife’s expenditure by $7,084 per month. Consequently, after all the deletions or reductions from both categories of objections, the husband says the wife’s expenditure should be reduced from $10,563, to $2,405 per month.
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48 In response to the husband’s objections, the wife says the husband does not set
out any basis for his assertions, namely that he has not referred to past spending in calculation of the wife’s expenses or his own. The wife says that in compiling her schedule of required expenditure, she referred to the family’s past expenditure, in particular the “Schedule of Expenditure 2006-2007” which is attached to her affidavit. She says she calculated the amounts listed on this schedule using invoices and receipts retained by the parties, and which were made available to the husband’s solicitors. Where the wife was unable to obtain invoices or receipts for certain expenses, she provided a breakdown of those expenses.
49 Accordingly, the wife says the amounts are appropriate as they are consistent
with the parties’ history of spending. The wife says that during their marriage she received periodic payments of $6,000 from the husband to meet expenses and other purchases. She says that when she spent all the money, the husband would only provide her with more funds after careful scrutiny. She says that she had to account for all purchases, and up until 2002 would keep bundles of receipts. She says in the financial year ending 30 June 2007, their monthly expenses totalled approximately $27,936, and anticipates the expenses for herself and the children after separation would remain largely the same despite the absence of the husband.
50 The husband says that the parties only had such a history of spending during
their marriage, because he borrowed from his parents. He says the wife did not complain when this occurred and that it enabled them to have a very comfortable lifestyle. The husband says at paragraphs 83 of his affidavit that:
“The fact of the matter is that we lived not only on my income but also on money that was borrowed and has to be repaid and on gifts my parents also made from time to time and which were over and above money lent on a strictly commercial, secured basis.”
51 According to the husband the borrowings were always formalised into loan
agreements, and pursuant to these agreements his parents obtained security over the parties’ assets. On the husband’s evidence there are five loan agreements dated 1990, 1992, 1995, 1996 and most recently on 18 April 2002. The husband explains in paragraphs 38 and 39 of his affidavit:
“Pursuant to security granted in the agreement, my parents have registered caveats on the titles to the properties at [the suburban address], my property at [an address in a regional development] to secure the performance of the obligations under the agreement.
My parents also have a right to security over any motor vehicle I may own and to hold the registration papers and ownership papers.
There is another agreement relating to motor vehicles and pursuant to which my parents have security over those motor vehicles.”
52 The wife states in her affidavit filed on 6 February 2008:
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“…It is only in recent years that I have become aware of the financial arrangements between the husband and his parents and have learned that [a previous] property was and other properties currently held in the husband’s name are encumbered by a caveat to secure a loan agreement between the husband and his parents.”
53 Further, she stated that the loans were not entered into with her knowledge and consent. She said at paragraph 64 of her affidavit:
“I am advised by the husband that the amount owed to his parents to 30 September is $10,848,768.00. I do not accept that this is the amount owed by the husband to his parents in accordance with the loan agreement, nor do I accept that there is any likelihood that the husband will ever be required to repay the loans.”
54 The husband says that the wife was always aware of the loans, and that they existed before the parties met and married.
55 Immediately following separation, the wife says she had use of the parties’ joint
account and credit card to meet living expenses, but, in December 2007, the wife ceased to have access to such funds. The wife says that the husband stopped her use of the credit card and joint account because of her expenditure. The wife’s position is that the expenditure was not extravagant and was consistent with their usual standard of living. She says at paragraphs 98 and 99 of her affidavit:
“Since early December 2007 I have not received regular and reasonable payments from the husband, to enable me to run the home and care for the family. I have not had any payment from the husband since 26 December 2007 apart from the payment of a Synergy account. I have requested by email that the husband provide funds for me on 15 January 2008, 25 January 2008 and 29 January 2008. The husband has not responded to any of my emails.
I have approximately $1,000.00 (apart from my capital) to pay for the continued financial support of the children and me and to purchase all school clothes, shoes, hair cuts and prepare them for school.”
56 The husband says in his affidavit that he closed the joint account after the wife
incurred expenses without consulting him, particularly in relation to holidays, and that his requests for a budget, or justification of the expenditure, from the wife were not answered. He says that he put in place a regime of payments in which he deposits $2,000 per fortnight into the wife’s bank account, or by cheque, and he pays direct expenses related to the [suburban] property and other personal expenses relating to the wife and the children, including school fees and health insurance, amounting to approximately $1,570 per week.
57 A further issue raised by the wife is that she does not believe that the husband
has been required to curtail his expenditure since the parties separated. The wife also infers the husband has not been required to meet the expenses he claims. She says in her written submissions filed on 4 April 2008, that, despite the argument that the
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husband must now support two households, there is no evidence that the husband’s income is, in fact, used to support his new household. The wife referred to the husband’s previous residence at [a suburban rental unit] which he leased prior to leasing his current residence at [an address in the adjoining suburb] from his parents. She says the husband states in his affidavit that he secured a release from the [rental unit] lease, effective on 19 March 2008, however there is no mention of this rental obligation in his affidavit, or financial statement, which were filed on 6 March 2008. She says there is no evidence the husband has had to pay rent since separation. The wife says the husband has sufficient funds available to him to allow the parties to continue to enjoy the standard of living they experienced during their marriage, and there is no evidence the husband has had to restrict his expenditure or reduce his standard of living since separation.
58 The husband obviously disagrees, and argues that the wife can utilise the funds
to which she has access. The husband’s counsel said at the hearing that the wife has approximately $168,000 at her disposal, with a further $114,000 in jewellery that she could sell to access further funds. The wife’s counsel said the amount in savings was closer to $130,000 as approximately $30,000 is to be deducted for solicitor’s fees. The husband’s counsel said he has not seen any documents in relation to legal fees. He says that she is not a litigant without funds, or access to funds.
Conclusion - spousal maintenance
59 At this early stage of the proceedings, on the evidence currently before me it is
difficult to conclude that the husband has the capacity to meet all the payments sought by the wife, but I am not convinced that he does not have the capacity to make payments greater than he proposes. It is relevant that these parties enjoyed a high standard of living when they were married. I am not prepared to apply comparatively tough financial restrictions on one party when they do not apply to the other, nor do I consider it appropriate for the wife to significantly deplete all her capital to finance her living expenses during these proceedings.
60 What is not said in the husband’s affidavit is relevant – for example, it is not
denied that the boat, for which he has a pen, and which he uses, is worth millions of dollars and that his parents have recently bought the home in which he resides for $7.65 million. There is no explanation as to why he needs three late model [prestige] motor vehicles. While the wife lives in a property worth over $10 million, it is the case there is no suggestion in the husband’s material that his standard of living has reduced in any way.
61 The husband claims the wife’s expenditure should be reduced to $2,405 per
month, which equates to approximately $600 per week. He is proposing to pay only $360 per week. Although I do not agree with all the objections raised by the husband, I do accept some of the expenditure claimed by the wife to be somewhat inflated, even at this interim stage, particularly having regard to the evidence of the financial positions of the parties. Although the wife should not be required to deplete her capital to meet reasonable necessary expenses, the wife may have to do this, to some extent, if she seeks to maintain her current very high level of expenditure. Further, although the wife does not want the husband to meet the expenses relating to the rates,
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taxes, utilities and other outgoing associated with the [suburban] property because she is the occupant, and she wants the responsibility for such accounts, there is no reason why the husband should not continue to meet the expenses he has been, and if he is going to seek assistance from his parents, I suspect payment of direct expenses will be more palatable, as I find it hard to believe his parents would require their grandchildren’s lifestyle to be directly affected by their parents’ break-up. I have concluded the following are the wife’s reasonable additional living expenses:
Wife’s Monthly Expenses
Contributions to upkeep [country] property 150 Cleaning and ironing (for the whole household) 383 Gym Membership 65 Training 250 [Pilates] 440 Food and household supplies 1,200 Personal allowance 2,500 Health, medical, dental, sundries 150 Gifts 800 Total: $5,938 62 Therefore, I have concluded that the husband should pay the wife an additional
amount of $6,000 per calendar month. I do not accept it is appropriate on an interim basis for the husband to pay any additional amount to assist in the maintenance and upkeep of the [country] property as sought by the wife, as the husband does not use the property, and the wife jointly owns the property with another party.
63 Although there appears to be no surplus from the husband’s income to meet any
payments to the wife, the husband may need to borrow further funds or sell an asset, such as one of his motor vehicles to meet the payments to the wife. The husband’s counsel argued that the wife has not identified an asset that the husband can sell to raise money to pay spousal maintenance above his offer, as his assets are encumbered by his parents. In reply, the wife’s counsel argued that there is equity remaining in the husband’s motor vehicles as they are not encumbered to their full value. Frankly, it is not tenable for the husband to propose very large reductions in his family’s living expenses when he is able to run these vehicles, and if necessary, these assets may need to be liquidated.
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64 While in the long term, the whole position will require readdressing, on an
interim basis only, I am satisfied that the husband should be required to make these appropriate arrangements, unless he also proposes to significantly reduce his standard of living,. He has the responsibility for ensuring appropriate arrangements are made with the family to meet the payment required. To this end, it is likely I would permit him to further encumber the parties’ property to meet payments in the short term.
Departure from child support
65 As at 24 January 2008, the husband was assessed to pay to the wife child support
of $2,787.58 per month for the period 14 January 2008 to 13 April 2009. The wife is seeking that there be a departure from this assessment, and the husband pay by way of child support, $14,000 per calendar month, and all costs associated with school fees, school excursions, camps, music tuition, school requirements, books, uniforms and school incidentals for the children’s education at [private schools].
66 Pending the disposal of these proceedings, the husband proposes to pay any
assessed child support issued by the Child Support Agency, in addition to the school fees of the parties’ children, any other agreed and reasonable incidental expenses associated with the children’s education, the children’s health insurance and the mobile telephone accounts for the two eldest children, [K] and [A].
67 The relevant provision is s 117 of the Child Support (Assessment) Act 1989. The approach to be is a three-step process as enunciated by the Full Court in Gyselman and Gyselman (1992) FLC 92-279 at 79,064:
1. Whether one or more grounds of departure in s 117(2) is established.
If so: 2. Whether it is ‘just and equitable’ within the meaning of s 117(4) to make a particular order. 3. Whether it is ‘otherwise proper’ within the meaning of s 117(5) to make a particular order.
68 The grounds for departure under s 117(2) are as follows:
(2) For the purposes of subparagraph (1)(b)(i), the grounds for departure
are as follows:
(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) the duty of the parent to maintain any other child or another person; 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:
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(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
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the benefit of a resident child or resident children
of the entitled carer.
69 Each of the grounds for departure above is prefaced by the words “in the special circumstances of the case”. The Full Court in Gyselman (supra) said at 79,065:
"Whilst it is not possible to define with precision the meaning of that term, as a generality it is intended to emphasize 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 (p. 77,897), Kay J, adopting the view in Philippe and Philippe (1978) FLC 90-433 at p. 77,202 in a different context, said that "special circumstances" were "facts peculiar to the particular case which set it apart from other cases". The approach to the interpretation and application of the particular grounds in s 117(2) must be guided by that qualification."
70 The wife did not specifically refer to any of the provisions of s 117. It appears
that the wife’s position relating to the departure order was based on the same reasoning for seeking spousal maintenance. The schedule provided by the wife in support of her application for spousal maintenance, also noted the required expenditure in relation to the children, and indicated a significant shortfall from the amount the husband has been assessed to pay by the Child Support Agency. The expenses totalled $14,149 per month, not including school fees.
71 As with the required expenditure sought by the wife for her needs, the husband
objected to certain amounts stated by the wife as required expenditure for the children. The objections were similar, being either because the claim included expenses he proposes to pay and expenses he considers extravagant or unnecessary at an interim stage.
72 The husband says that he already pays, and proposes to continue to pay, the
expenses for the children relating to electricity, gas, land rates and taxes, water rates and usage, repairs and maintenance of the [suburban] property, and their health insurance premiums, so these amounts can be removed from the wife’s schedule. The husband also included in this category, a reduction in the expense relating to the Telstra account for the children. The wife states on her schedule that the children’s portion of the Telstra account is $252 per month. The husband argues that this amount should be reduced to $100 because he proposes to pay the two eldest children’s mobile telephone accounts.
73 If allowed, the first category of objections would reduce the amount sought by the wife by $2,097 per month.
74 As mentioned previously, the wife objects to these reductions as she wants to be
responsible for the rates and utilities associated with the former matrimonial home as she currently resides there. In relation to the reduction in the Telstra allowance, the wife says that the children’s mobile telephones are only occasionally used for convenience and the children predominantly use the home telephone. The wife says she also often uses the home telephone for matters relating to the children. Accordingly she says the expense for the Telstra account should not be reduced.
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75 The husband objects to the following items which he considers to be extravagant or unnecessary in the interim:
Babysitting
76 The wife attributes $400 per month to this expense while the husband argues that
it should be reduced to nil as the wife is available to supervise the children, and further the children spend time with him each alternate weekend. The wife says that it is unreasonable to suggest that she only goes out when the children are with the husband. As an example, she says she uses a babysitter after school so that she can leave some of the children at home while she takes another of the children to an activity. She considers it to be in the best interest of the children for them to be in their own home after school. She points out the husband employed a driver and a nanny when she was in hospital recently. I accept the item is reasonable in the circumstances.
Children’s clothing and shoes
77 The wife states that she is required to spend $1,423 per month on the children’s
clothing and shoes. The husband says that this is excessive and considers $500 per month to be an appropriate amount. The wife says that the expense is reasonable because the children live in an environment where they are high social expectations and where they are invited to numerous social activities. In the interim, I consider it appropriate to reduce this item slightly.
Health, medical, dental, sundries
78 The wife states the expense to be $350 per month. The husband argues that the
expense should be reduced to $100 per month as there is no evidence to support this amount. The husband pays for the children’s health insurance premiums. It was not said that the children have any specific health problems, but I accept the net cost may well add up to $350 per month.
Skiing within Australia and Overseas holiday
79 The wife attributes $633 per month for skiing within Australia for the children
and $2,778 for overseas holidays. As with this expenditure for the wife, the husband has reduced this expense to nil, as he considers it unnecessary in the interim. In response, the wife says that she would like to be in a position to take the children on an overseas holiday and it is unlikely that this matter will be resolved for 12-18 months. As with the wife, I have concluded the husband should make a one-off payment for this winter’s skiing holiday.
80 As to overseas holidays, it is reasonable for the children to have an overseas
holiday, but, as with the wife, I consider it is premature to make allowance for this
when, at the earliest, it would occur in October.Children’s sporting equipment, activities, etc
81 The wife states this expense to be $417 per month. The husband says the
amount should be nil because he is seeking in his Form 2A response to pay the children’s school fees and all reasonable expenses relating to the children’s education. I accept a separate allowance should be made for this, as it would be too messy to require the husband to pay on a piecemeal basis.
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Children’s parties and gifts
82 The husband says the wife’s stated amount of $620 per month is excessive and it
should be reduced to $300 per month. The wife objects to the husband’s reduction for the same reason she objected to a reduction in the cost of the children’s clothing, that the children live in an environment where they are high social expectations, and where they are invited to numerous social activities. I consider $400 per month would be a reasonable allowance in this regard.
Motor vehicle, fuel, service, maintenance, licences and insurance
83 The wife states the expense at $510 per month. The husband argues it should be
reduced to $200 per month because pursuant to the orders he is seeking in his Form 2A response he is to pay all reasonably required maintenance, and servicing of the wife’s vehicle. Presumably, this would then be expected to cover fuel. I consider $300 per month would be more reasonable.
Children’s entertainment
84 The wife attributes $293 per month to this expense. The husband says the
expense should not be included as the wife has provided insufficient explanation in relation to the amount. I would accept a rounded figure of $300 per month, in the circumstances of this family, which I consider to be quite modest.
85 The husband’s proposed reductions and deletions decreases the amount required
by the wife from $7,424 per month to $1,100. Together with the amounts he says he proposes to pay he argues that there can be an overall reduction in the children’s expenses from $14,149 per month to $5,728.
86 I have concluded the proper expenses are:
Children’s Monthly Expenses
Telstra 100 Babysitting 400 Children’s clothing and shoes 1,200 Health, medical, dental, sundries 350 Children, sporting activities 417 Children’s parties and gifts 400 Motor vehicle expenses apart from 300 servicing, repairs Children’s entertainment 300
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Total: $3,467
Conclusion - departure from child support assessment
87 While I have accepted that some of the children’s expenses should be pared
down slightly, and I acknowledge the husband has the care of the children every second weekend, so has some expenses himself, the wife’s claim in relation to the children was largely reasonable, once the costs of overseas holidays are put to one side for the time being.
88 In considering the circumstances of the parties, I am satisfied that there are
special circumstances to satisfy s 117(2), in particular s117(2)(b)(ii), that the costs of maintaining the children are significantly affected because the children are being cared for, educated or trained in a manner that was expected by their parents. In any event, it was not disputed the threshold had been met.
89 As to the husband’s ability to meet the amount claimed, there is no question he
could do so by making appropriate arrangements with his family. I do not accept it is appropriate for the children’s standard of living to be reduced, at all, in circumstances where their parents’ standard of living has always been very high, and has not, on an interim basis, been reduced.
90 I have concluded the husband is to pay the wife $3,500 per month in child
support. In addition the husband is to continue to meet the expenses relating to the [suburban] property for the children, their school fees and other associated educational expenses, health insurance premiums and the Telstra mobile telephone accounts for the two eldest children, [K] and [A].
91 I am satisfied it is just and equitable to make the order proposed and it is proper for there to be a departure from the assessed child support.
Other miscellaneous matters
92 The application filed by the wife also sought that the husband return the keys
and remote controls to the [suburban] property and the use and occupation of the
[holiday home].93 In relation to the [holiday home] the wife says at paragraph 104 of her affidavit:
“I seek that the children and I continue to share the use of the [holiday home] on an equal basis with the husband. We have used this [holiday home] as a family on many occasions. For example we share the holidays and otherwise by agreement on giving each other a weeks notice. It would be fair and reasonable for the husband to share the [country] property.”
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94 The husband says he is open to consider any requests made by the wife to use
the [holiday home], but he does not want there to be any Court orders as to its use. He says that he wants to able to leave his belongings there and live there from time to time. He argues that the wife already has use of the [country property], a property which he does not seek to use. In the husband’s opinion it is desirable for the parties to avoid using the same places and having to argue over its use.
95 It is appropriate for each party to have access to a holiday house in the interim.
The wife has the [country property] and the husband the [holiday home]. I do not intend to make an order to force the husband to permit the wife to use the [holiday home] at this interim stage, as I consider this to be appropriate to avoid any further conflict or confusion between the parties. Presumably, apart from the possibility of weekends, the issue does not arise until the October school holidays. If the husband proves unreasonable about reasonably permitting the family access, the matter can be revisited at a subsequent time.
96 The husband’s counsel said at the hearing that the keys and remote controls to
the [suburban] property are with the husband’s parents as they are the mortgagees in relation to the property. The keys and remote controls should be made available to the wife at this interim stage as she is currently residing in the property.
Proposed Orders
1. Pending the disposal of the proceedings, the husband pay the following, commencing 1 May 2008, by way of interim spousal maintenance:
(a) $6,000 per calendar month to the wife for living expenses; (b) the sum of $2,400 towards an Australian skiing holiday for the wife by 1 June 2008; (c) the private health insurance premiums of the wife at the current rate; (d) the fixed outgoings relating to the property occupied by the wife being the former matrimonial home of the parties situated at and known as [the suburban home] (C/T Volume xxxx Folio xxxx and the adjoining block at (C/T Volume xxxx Folio xxx) to include: (i) local authority rates and taxes;
(ii) water rates and taxes;
(iii) premiums for the insurance of the properties, the home and contents;
(e) the costs of:
(i) electricity; (ii) gas; (iii) water consumption; (iv) security services for the properties;
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(f) all reasonable costs for any required repair of [the suburban address] and otherwise for the repair, maintenance and upkeep of the said property as agreed in writing between the parties; (g) all reasonable and required maintenance and servicing of the [prestige] motor vehicle in the wife’s possession and control; 2. Until further order, there be a departure order from the assessment of the Child Support Agency dated 24 January 2008, and in lieu thereof the husband pay by way of child support:-
(a) $3,500 per calendar month; (b) school fees, tuition fees and other associated education expenses for the children’s education [K] born [in] April 1995, [A] born [in] November 1997, [C] born [in] February 2000 and [T] born [in] April 2003 at [their private schools]; (c) Telstra mobile telephone account for the two eldest children; (d) private health insurance premiums for the children. (e) the sum of $6,000 towards an Australian skiing holiday to be paid by 1 June 2008.
3. There be liberty for the husband to apply on short notice if he seeks to sell or further encumber any assets to meet the payments referred to in these orders.
4. The husband return, or procure the return, to the wife the keys and remote control/s in respect of the property at [the suburban address].
5. The wife’s application filed 7 February 2008 otherwise stand adjourned generally, to be relisted on written request.
I certify that the preceding [96] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court
Associate
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