Saberton and Saberton

[2012] FamCA 870

FAMILY COURT OF AUSTRALIA

SABERTON & SABERTON [2012] FamCA 870

FAMILY LAW – PROPERTY SETTLEMENT –Adjustment of property interests – where the parties’ contributions were assessed as equal during the marriage – Orders for substantial adjustment of property in favour of the Wife to account for the uncertainty as to her future needs owing to her chronic illness– Where the family had always enjoyed an expensive lifestyle -Where chronic illness meant Wife required ongoing paid support to care for the three children of the marriage and to look after her home – where the adjustment also took into account the current financial position of the Husband in his new household, where he and his current partner both had substantial income earning capacity

FAMILY LAW – PROPERTY – Notional Add-backs – where the Mother alleged that father failed to make payments under various interim orders– where neither party has made any application for contravention prior to hearing - Where the wife sought orders that those unpaid amounts be added back to the pool of matrimonial assets - Smith v Smith (1984) FLC 91-512 distinguished – Where the Court found the husband had made his best effort to meet his interim obligations and there were no addbacks on these amounts –Orders made adding back amounts the father spent on gifts to his Mother

FAMILY LAW – SPOUSAL MAINTENANCE – Factors Considered – Where both parties consented as to the provision of spousal maintenance – where the issue in dispute related to the duration of the maintenance – Where orders were made for the duration of three years in circumstances where it was unclear as to the wife’s future employment owing to an uncertain diagnosis of a chronic illness – where wife intended to return to work

FAMILY LAW – CHILD SUPPORT – Application for Departure – Orders made under s 116 and 117 of the Child Support Assessment Act 1989 (cth) that Husband pay the children’s school fees and related expenses in addition to existing child support payments - Where the family enjoyed a costly lifestyle – where the costs of the children’s private education were substantial – where the Wife has been unable to work for more than ten years due to a chronic illness – where the children live with the Wife – where the Husband earns a substantial wage and has acted for the last ten years as the families primary provider of financial support

Child Support Assessment Act 1989 (Cth) s 116 and s 117
Family Law Act 1975 (Cth) ss 72, 75, 79 and 90MT
Family Law (Superannuation) Regulations 2001(Cth)

Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Smith v Smith (1984) FLC 91-512
Omacini and Omacini (2005) FLC 93-218

APPLICANT: Ms Saberton

RESPONDENT: Mr Saberton

FILE NUMBER: SYC 6689 of 2010

DATE DELIVERED: 10 August 2012

PLACE DELIVERED: Newcastle

PLACE HEARD: Sydney

JUDGMENT OF: Cleary J

HEARING DATES: 16, 17 & 28 November 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Lethbridge SC

SOLICITOR FOR THE APPLICANT: Robyn Sexton & Associates

COUNSEL FOR THE RESPONDENT: Mr Johnston

SOLICITOR FOR THE RESPONDENT: Hazan Hollander

Orders

1. That within 42 days of the date of Order, the wife will do all acts to cause the matrimonial home to be listed for sale and sold for its fair market value which must be agreed between the parties or in default of agreement for a period of excess of 14 days must be the price determined by a valuer appointed by the wife whose determination will be final and binding upon the parties, and by way of consequential arrangements that shall be made for the purpose of effecting the sale:

   1.1The parties will list the property for sale with R Real Estate;

   1.2The parties will appoint, P solicitors, to conduct the conveyance in relation to the sale,

   1.3The property is to remain on the market until sold or for the expiry of three months from the date of orders, whichever is sooner and thereafter is to be offered for sale by auction.

2. That upon settlement of the sale of the home, the parties will do all acts and things to cause the proceeds of sale to be distributed as follows:

   3.1in payment of (or reimbursement to the party having made the prepayment of) all legal costs, commissions, and agent expenses (including advertising expenses) in relation to the sale, and the cost of any value appointed by the wife in accordance with Order 1 herein;

   3.2      in adjustments of rates and other outgoings;

   3.3      payments in respect of the following National Australia Bank loans:

   3.3.1Loan number …(“the home loan”);

   3.3.2Loan number …(“the S loan”);

   3.3.3Bank account number …(“the L Ltd overdraft”);

   3.3.4Loan number …(“the business loan”)

   such that the total borrowings in relation to the accounts listed as 3.3.1, 3.3.2, 3.3.3 and 3.3.4 herein at no time exceeds the amount of $1,900,000.

   3.4      Citibank Credit Card held by the wife in the amount of $31,984;  and

   3.5in payment of the net balance remaining to the wife and in the event that the net balance is less than the sum of $206,575, then the husband will pay to the wife the sum being the difference between the actual net balance and $206,575.

3. That within three months of the date of settlement of sale of the matrimonial home, the husband shall pay to the wife the sum of $66,949.

4. 4.1      That within 60 days of the date of Order the husband do all acts and things to sign all such documents to:

   4.1.1transfer all shares held by him in her name in the companies known as L Pty Ltd, ACN number …(“L Pty Ltd”) to the wife;

   4.1.2resign as director and secretary of L Pty Ltd.

   4.2That the wife in her capacity as director of L Pty Ltd cause the husband to be released from any liability arising from any loan account owed by him to L Pty Ltd and that the husband release L Pty Ltd from any claim he may have as a result of monies owned to him by way of loan account by L Pty Ltd and the husband further indemnify the wife and keep her indemnified in respect of all liability whatsoever to any third party creditor of L Pty Ltd for any debt incurred prior to  his compliance with Order 4 or arising out of any act or failure to act by L Pty Ltd or its directors prior to his compliance with Order 4.

   4.3That the wife in her capacity as director of L Pty Ltd do all acts and things to cause the company’s shares in X Pty Ltd,  the office furniture and equipment owned by L Pty Ltd to be transferred to the husband at his expense if any.

   4.4That except as otherwise provided herein, as between the parties the wife be declared the owner of all of the assets of L Pty Ltd Pty Ltd.

5. 5.1 That pursuant to s 90MT(1)(a) of the Family Law Act 1975, whenever a splittable payment becomes payable in respect of the husband’s entitlement in the self managed fund known as The Y Superannuation Fund, (“the Fund”) the wife shall be entitled to be paid 100 per cent of the husband’s entitlement in accordance with Family Law (Superannuation) Regulations 2001 and that there be a corresponding reduction to the entitlement of the husband that he would have had in the Fund but for this Order.

   5.2It is noted that L Pty Ltd is the trustee of the fund, with the effect that the trustee has had sufficient notice of these orders for the purpose of rule 14.06.

   5.3The operative time for Order 5.1 is four business days after the date of order.

6. That within 42 days of the date of order, the husband will do all acts and things to cause to be transferred to the wife the motor vehicle in her possession, registration number…, subject to the lease secured on that motor vehicle, and the wife will thereafter pay and continue to pay all instalments in relation to the lease secured on the motor vehicle.

7. That other than as herein provided the husband and the wife each be declared the owner at law and in equity of all items of personalty including but not limited to shares in public companies, money, proceeds of bank accounts, furniture, furnishings, contents, jewellery, and personal effects presently in their respective possession and control.

8. That other than as herein provided the husband and the wife each be declared the owner of such superannuation/annuity entitlements, and pension benefits to which each of them is or might become entitled in his or her own right.

9. That other than as herein provided each of the husband and the wife remain liable for any debts in his or her sole name at the date of the orders and in this respect shall indemnify and hold harmless the other from any liability in relation thereto.

10. That in the event the husband or the wife refuses or neglects to comply with any of the Orders herein requiring a party to execute a deed or instrument, the Registrar or Deputy Registrar of this Court at its Sydney Registry is appointed pursuant to Section106 of the Family Law Act to execute, in the name of the husband or the wife as the case may be, any deed or instrument necessary to give effect to the orders herein, or any of them, and to dl all acts and things necessary to give validity and operation to the said deed or instrument.

11. That pursuant to s 72 of the Family Law Act the husband shall pay to the wife spousal maintenance in the sum of $863 per week, the first such payment to be made within seven days of the date of this order.  Such payments to continue until the date of settlement of sale of the home and thereafter the sum of $1,613 per week, such payments to continue until:

    11.1the youngest child commences primary school in 2016.

12. That the spousal maintenance to be paid to the wife pursuant to Order 11 herein be varied each year on and from 1 November each year, in accordance with the variation of the Consumer Price Index for Sydney as published by the Commonwealth of Australia Statistician as at 30 September of the year in question.

13. That by way of departure from the Child Support Assessment made on

    
    

    22 October 2011 the husband shall pay directly to the school, in addition to the Child Support amount assessed from time to time, the school fees and other associated expenses (including but not limited to uniforms; excursions; text books; and extra curricular activities as agreed between the parents) at H College, or such other school as the parties agree on for each of the three children to the conclusion of their secondary education.

THE COURT NOTES:

(A)That the parties or either of them may provide a copy of these Orders to H College or such other school as the parties agree that the children attend.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: (P)SYC 6689 of 2010

Ms Saberton

Applicant

And

Mr Saberton

Respondent

REASONS FOR JUDGMENT

Introduction

1. By an amended application filed in November 2011, Ms Saberton (the wife), seeks Orders for alteration of property interests, spouse maintenance and departure from assessment of child support.  Also urged upon the Court was   enforcement of various interim orders.

2. The respondent husband, Mr Saberton, seeks orders only for alteration of property interests.  He concedes the need for spouse maintenance for a defined period.

3. The key to understanding the parties’ present situation is that during the marriage there was an increasingly high ratio of debt to income.

4. At the date of separation the parties’ main assets were the family home and the husband’s office premises. Associated debts for both were secured on the home.  Apart from superannuation, there was not a great deal of property to divide.

Background

1. The parties were married in 2001, separated in 2010 and divorced in 2011.  They lived together for a little over nine years.  There are three children of the marriage now aged eight, seven and four.  The children live with their mother and spend time with their father on an agreed basis.

2. At the date of their marriage in Ms Saberton aged 30 was working fulltime as a professional person.  Mr Saberton aged 36 was also practising fulltime in a professional field.

3. On marrying the couple moved into a Apartment at G owned by the wife and her parents in equal shares.

4. The wife left her employment around late 2001 following diagnosis of an undefined chronic illness.  She recommenced work in May 2002 for two days each week.  She then only worked on a casual basis, at odd times, once her first child B was born in November 2003.

5. In December 2002 the wife’s parents bought out their daughter’s interest in the at Apartment at G for $90,000.  At the same time the parties bought the Property at G which became the family home.  The purchase price was $1.2 million.  They borrowed a little over $1 million to fund the purchase.

6. In 2003 B was born, followed by T in 2005 and J in 2007.

7. The wife has provided the majority of the day to day care of the children with the assistance of their father, maternal grandparents, a nanny and at times an au pair.

8. In July 2010 the husband left the marriage for a new relationship.  This was a devastating event for the wife.  The wife and children have remained living in the family home.  The husband lives with his new partner and their child.  The period since separation has been fraught with personal and legal conflict.

Litigation History

1. Prior to the final proceedings heard by me, there were interim applications and orders made which have a bearing on these proceedings.

2. On 22 October 2010 the wife filed an Initiating Application which included an application for urgent spouse maintenance and child support.  The matter came before the court on 15 December 2010 when the following orders were made by consent and without admissions:

   i.       That the husband pay to the wife the sum of $20,000, made up as follows:

   a$5,000 on 17 December 2010;

   b$5,000 on 13 January 2011;

   c$10,000 on 27 January 2011,

   and such sums to include any liability in relation to child support up to and including 18 February 2011.

   ii.      That the husband pay the registration on the wife’s motor vehicle as and when same falls due.

   iii.    Orders 3, 4 and 5 were otherwise procedural and/or in relation to arrangements for the children.

3. The matter next came before the Court on 23 February 2011 and orders were made on 11 March 2011 as follows:

   i.       Urgent spousal maintenance orders that until 9 September 2011 or further order, the husband promptly pay the following expenses as and when they fall due:

   a)mortgage instalments in respect of the property situate at and known as the Property at G (‘the matrimonial home’);

   b)all periodic and other payments pursuant to all loans made to him and/or the parties by the National Australia Bank including but not limited to “the S loan”, the Accelerator loan and the business loan;

   c)the husband’s income protection life insurance and the family’s current health insurance premiums;

   d)the householders and contents insurance premiums in respect of the former matrimonial home;

   e)motor vehicle registration insurance both compulsory and comprehensive and  lease payments in relation to the motor vehicle registration number…;

   f)water and council rates in respect of the former matrimonial home.

   2.     That the husband  pay to the wife by way of urgent spousal maintenance the sum of $863 per week by payment into such bank account as she may in writing direct until 9 September 2011 or further order, the first payment to be paid on or before 4.00 pm 18 March 2011.

   Child Support Departure Order:

   3.     That the husband promptly pay as and when due and payable, the W School Term 1 fees and related educational expenses and uniforms for each of the three children of the marriage.

   4.     That all other outstanding applications for urgent spousal maintenance and child support assessment departure are dismissed.

4. On 31 May 2011 final orders were made by consent in relation to the children.  The matter was then expedited and leave given for a two day final hearing. 

5. On 8 August 2011 the matter came before the court again and the interim orders of 11 March 2011 were varied by consent as follows:

   i.       That pending further order, the orders of Rose J made on 11 March 2011 be varied by deleting the words “9 September 2011” from orders 1 and 2.

   ii.      That the husband forthwith use his best endeavours to obtain consent from the National Australia bank to repay only the home loan registered on title to the matrimonial home together with the L Pty Ltd Pty Ltd loan and the accelerator loan in the event that the home is sold together with the mortgage,

   iii.    That upon service of the consent referred to in Order 2 by the husband on the wife’s solicitor, the wife shall forthwith do all acts and things and execute all documents necessary to sell the matrimonial home at a price and with such agent agreed upon by the parties within seven days of service of the consent and failing agreement, with such agent who be nominated by the President of the Real Estate Institute of New South Wales and such agent shall determine the sale price in consultation with the parties.

   4.     That the proceeds of sale of the matrimonial home shall be distributed in the following order and priority:

   4.1in payment of agent’s fees and conveyancing costs;

   4.2in repayment of the home loan, the L Pty Ltd loan, the accelerator loan with the National Australia Bank;

   4.3in payment of the balance to the wife.

   5.     That the settlement of the sale of the home shall occur no later than 10 January 2012 (market conditions accepting) and the husband shall pay for the advertising and promotional costs of the sale.

   6.     That upon the wife securing rental accommodation the husband shall pay the rental bond and the wife’s reasonable costs of removal.

   7.     That as and from the date of the settlement of the sale of the home:

   7.1the husband shall continue to pay the sum of $676 per week for child support ordered by Justice Rose on 11 March 2011 pending further order; and

   7.2the husband shall increase the payment of spouse maintenance to the wife to $2,324 per week pending further order.

   8.     That the husband pay the arrears of school fees for the children as soon as is reasonably practicable.

   9.     That the husband pay the enrolment fees for the children’s schools in 2012 upon the receipt of a tax invoice but not any tuition fees without agreement between the parties in writing.

   Notations

   A     The parties agree that the present balances of the loans referred to in Orders 2 and 4 are home loan $1,506,000, accelerator $75,500, L Pty Ltd business loan $130,000.

   B      The parties agree that Mr P shall act in relation to the sale of the matrimonial home.

6. The matter was otherwise expedited.

7. The implication of orders made by consent on 8 August 2011 was that the husband’s obligation to meet mortgage instalments and various other payments including urgent spouse maintenance was extended to the date on which the settlement of the family home took place, thereafter payments of child support and spouse maintenance were to continue on a different basis (Order 7).

8. The husband sought consent from the National Australia Bank in accordance with Order 2 and was unsuccessful.  The family home had not been sold at the date of commencement of final hearing and neither party had made any application to enforce the order for sale.  The wife was continuing to live in the home with the children and there was an issue as to the extent of the husband’s compliance with the interim orders.

9. The final proceedings were heard on 16, 17 and 28 November 2011.  Written submissions were provided on behalf of each party as directed in December 2011. There was a further application heard on 5 March 2012.  That application was dismissed with costs reserved.

Alteration of Property Interests

1. The approach I am obliged to undertake pursuant to s 79 of the Family Law Act 1975 (Cth) (“the Act”) in relation to the parties’ property adjustment is well established (see Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 at [39]).

2. Accordingly, I must consider the four following factors as set out below:

   i.Identify the assets and liabilities of the parties.

   ii.Analyse the contributions during the relationship up to the date of the hearing.

   iii.Consider the application of the factors in s 75(2) of the Act by way of adjustment.

   iv.Consider whether the overall outcome is just and equitable in those circumstances.

1. Net asset pool[1]

   4 Exhibit ‘ HW1’

1. The net asset pool was identified by the parties as follows in a joint balance sheet.

Ownership			Description	Wife’s Value		Husband’s Value
1	W		Property at G	2,300,000		2,300,000
2	W		Apartment at G	Nil		Nil
3	L Pty Ltd comprised of: - X Pty Ltd - Business loan (balance show below – 29) - Overdraft (secured on home) (balance show below – 29A)	225,000 see below see below		225,000 see below see below
4	H		Motor vehicle driven by wife	35,000		35,000
5	W		Commonwealth Bank Account	325		NK
6	W		AMP Account	59		NK
7	H		St George Bank Account	NK		(13,436)
8	H		NAB Account	NK		NK
9	Joint		Joint NAB Accounts: (1)  NAB (Personal account) (2)  NAB (Tax account)              (3)  NAB (Surplus account) (4)  NAB  (weekly expenses)	541 40 (789) (93)		541 40 (789) (93)
10	Joint		Commonwealth Bank Account	Nil		Nil
11	W		Telstra Shares (400)	1,200		1,200
12	H		Legal fees and disbursements paid to date	22,737		22,737
13	W		Legal fees and disbursements paid to date	8,624		8,624
14	H		Household contents	10,000		10,000
15	W		Household contents	10,000		10,000
16	H		Office furniture and equipment	20,000		20,000
17	H		Fees outstanding	NK		225,000
18	H		Unbilled work in progress	NK		15,000
19	H		Funds owed to husband by Ms Z	10,000		Nil
20	H		Reimbursement owed to husband by his offices	NK		Nil
Total	$		$
ADDBACKS
21	H		Funds held in tax savings bank account at separation, less amount withdrawn by wife	73,000		Nil
22	H		Rental paid on apartment not occupied by husband after separation	13,421		Nil
23	H		Arrears in relation to mortgage and loans	143,421		Nil
24	H		Funds transferred by husband to new partner after separation	63,679		Nil
25	H		Funds transferred or otherwise gifted by husband to his mother since separation (full information relation to this amount yet to be provided)	9,703		Nil
Total	$		$
LIABILITIES
26		Joint	NAB mortgage secured on home (increasing)		1,534,089		1,534,089
27		Joint	Loan re business secured on home (increasing)		257,317		257,317
28		Joint	NAB accelerator loan secured on home (increasing)		76,922		76,922
29		Joint	NAB (Business loan) (increasing)		133,113		133,113
29A		Joint	NAB (overdraft) (increasing)		58,037		58,037
30		Joint	Gadens – enforcement costs after 8 November 2011		NK		NK
31		Joint	Estimated sale costs of Property at G		60,000		60,000
32		H	Car Lease balance		40,502		40,502
33		W	Citibank credit card		31,984		NK
34		H	NAB Visa card		NK		11,917
35		H	NAB Mastercard		NK		26,592
36		W	Loan from Lender 1		10,000		10,000
37		W	Loan from Lenders 2 & 3		7,700		7,700
38		H	Loan from Ms C		Nil		13,499
39		Joint	K School		2,339		Nil
40		H	Legal fees outstanding at 31 October 2011		59,823		59,823
41		W	Legal fees outstanding at 31 October 2011		112,303		112,303
42		H	Tax liabilities owing to ATI		51,314		157,325
43		H	Provision for Tax on Fees outstanding at item 17		101,250
Total		$		$

SUPERANNUATION - Name of Fund and type of interest
44	W	Y Super Fund – Self Managed Fund	77,703	77,703
45	H	Y Super Fund – Self Managed Fund	282,583	282,583
46
47
48
Total	$	$
FINANCIAL RESOURCES
49	Joint	Tax losses held within L Pty Ltd	Nil	Nil
50
Total

[End of Exhibit HW1]

Analysis of the Asset Pool

1. Items 2, 8, 10, 19 and 20 have been excluded from the pool for the reasons in the notes following. Item 25 was added back.

Assets
Item 1	Propert at G	$2,300,000
Item 3	L Pty Ltd shares in X Pty Ltd	225,000
Item 4	Motor Vehicle driven by wife	35,000
Item 5	CBA (wife)	325
Item 6	AMP Account (wife)	59
Item 7	St George Bank Account	(13,436)
Item 9	Joint NAB Accounts x 4  541+40+(789)+(93)	(301)
Item 11	400 Telstra Shares (wife)	1,200
Item 12	Paid Legal Fees (husband)	22,737
Item 13	Paid Legal Fees (wife)	8,624
Item 14	Household Contents (husband)	10,000
Item 15	Household Contents (wife)	10,000
Item 16	Office-Furniture and Equipment (husband)	20,000
Item 17	Fees Outstanding	169,445
Assets	2,788,653
Item 44	Y Super Fund (wife’s interest)	77,703
Item 45	Y Super Fund (husband’s interest)	282,583
Item 25	Addback funds provided to husband’s mother	9,703
Total Assets	$3,158,642
Notes to Asset Pool
Item 2	Agreed at Nil
Item 8	Parties unable to supply a figure
Item 10	Agreed at Nil
Item 18	The amount of $15,000 for unbilled work in progress has been excluded from the pool.  This is an estimate which may or may not be billed in due course.
Item 19	Funds owed to Ms Z   $10,000 has been excluded from the pool.  Even assuming that this sum was a debt not a gift, there is no evidence to support likely repayment and the limitation period has expired.
Item 20	Agreed at Nil
Item 25	In circumstance where the husband says he exhausted his funds attempting to meet obligations and court orders for the support of his wife and children and fell short, these gifts to his mother should be added back.  The needs of the wife and the parties’ children had priority over the personal obligation of the husband to his mother.
Notes to Items not added back
Items 21-24	Items 21 to 24 inclusive have not been added back.
Item 21	Agreed at Nil
Item 22	It was reasonable for the husband to acquire short term rental accommodation for himself after the breakdown of the marriage[2].
Item 23	The arrears in relation to mortgage and loans is artificial when there is no assertion of failure to disclose funds.
Item 24	Monies provided to the husband’s new partner were a combination of loans repaid, living expenses and legitimate expenses for the husband’s youngest child.
Liabilities
Item 26	Mortgage secured on home	$1,534,089
Item 27	Loan re business	257,317
Item 28	NAB Accelerator Loan	76,922
Item 29	NAB Business Loan re business	133,113
Item 29A	NAB Overdraft	58,037
Item 31	Estimated Sale Costs on Property at G	60,000
Item 32	Car Lease Balance (husband)	40,502
Item 33	Citibank Credit Card (wife)	31,984
Item 34	NAB Visa Card (husband)	11,917
Item 35	NAB Mastercard (husband)	26,592
Item 36	Loan from Lender 1 (wife)	10,000
Item 37	Loan from Lenders 2 & 3 (wife)	7,700
Item 43	Provision for tax on fees (Item 17)	71,321
Total Joint Liabilities	$2,319,494
Notes to Liabilities
Item 30	Excluded as both parties were unable to put any figure on this item.
Item 33	The debt owing on the Citibank Credit Care has been included in the joint liabilities being discretionary spending for the benefit of the wife and children and the maintenance of the family home and joint assets.
Item 38	Excluded as agreed as Nil
Items 40 & 41	Excluded from liabilities being post separation expenditure of a personal nature.
Item 42	This figure has been excluded as a joint liability. Tax on post separation income not applied to joint assets. Is personal to the husband.
Item 43	The wife conceded that the husband would pay a third of gross fees on tax –
Item 17 is            $169,445 (fees billed but unpaid) GST Payable           15,404 Tax (one third)        55,917   $  71,321
Identification of Net Asset Pool
Gross Assets		$3,158,642
Liabilities		$2,319,494
Total Net Assets		$   839,148

[2]  See Omacini and Omacini (2005) FLC 93-218 at p 79,619

1. Contributions

1. This nine year marriage saw the birth of three children.

2. The parties are both professionals.  At the time of marriage the husband was in a junior position and the wife was working.  By separation the husband was in a senior position and the wife had effectively although retaining the requisite certificates for employment in her field.

3. At the date of marriage the husband owned premises used for his business.  He had no other significant assets[3].  He had acquired an interest in superannuation and had outstanding fees in the range of $50,000 to $100,000[4]. Most, if not all of those outstanding fees would have become part of the income stream of the husband and do not have particular significance as an initial contribution.

   [3]  Husband’s affidavit sworn 10 November 2011, par 57

   [4]  The husband asserted $50,000 in a Court document dated May 2011, $100,000 in evidence-in-chief.

4. The wife had a one half share in an Apartment at G.  She had bought it jointly with her parents five years before her marriage.  The loan was secured on the family home of her parents.  She otherwise had a car, some savings, Telstra shares and a proportionate credit card debt[5].  She was working full time in the city earning $120,000 per annum, plus bonuses.

   [5]  Wife’s affidavit sworn 9 November 2011, par 9

5. The parties lived in the G apartment for almost two years, paying one half of the loan repayments.  This represented a contribution on behalf of the wife by her parents which provided a home and the opportunity for the parties to save.

6. In December 2002 the parties purchased the matrimonial property for $1,200,000.  This was a catalyst for change.

   i.The wife’s parents paid $90,000 to their daughter for her half share of the equity in the G apartment.

   ii.The parties borrowed $1,020,000 from the National Australia Bank and funded the balance of purchase price from savings.

   iii.Before moving in the parties spent $70,000 on renovations to the matrimonial home.

7. The parties moved into the property in 2003 and in November of that year their first child B was born.

8. Thereafter, other than for a period in 2007, the wife was not in paid employment.  T was born in early 2005 and J late in 2007.

9. There is no significant dispute that from 2003:

   i.the majority of the work of caring for the children was undertaken by the wife, and

   ii.the income of the husband supported the family.

10. During the course of the marriage until separation in mid 2010, the parties worked hard in their different capacities.  The income of the husband increased as did expenditure.

    The wife raises two matters:

    i.the purchase by the husband in quick succession of two sets of business offices, and

    ii.the financial support and assistance given to the husband’s mother by the husband.

11. Both these matters relate to decisions made, however reluctantly, during the course of the marriage.  Neither constitutes waste so as to exclude the wife from bearing the financial consequences of those decisions. The situation is somewhat different post separation.

12. To the extent that the husband worked long hours to build his practice, the wife had the care of young children alone.

13. I consider the contributions were equal during the marriage, or very slightly favouring the wife given that her interest in the G apartment property provided a home for the parties for the first two years of their marriage.

‘Enforcement’ of Interim Orders

1. On behalf of the wife it was submitted that the Court should enforce the husband’s obligations pursuant to interim orders.

2. Although the term “enforced” was used and reference was made to “egregious default” and breaches by the husband of interim orders, this was not a contravention application.

3. The wife had not applied to enforce any of the interim orders nor did the husband apply to vary the interim orders.  I accept the submission on behalf of the husband that given there was no formal application for enforcement before the Court, the husband did not have the proper opportunity to lead evidence of reasonable excuse to contravention if established.  It would be unjust to deal with the matter as enforcement.

4. The real application of the wife is that any non-compliance by the husband should be taken into account at the first stage of the determination of these proceedings.  That is, that there be an adding back of a sum equivalent to all payments which could have been made pursuant to earlier orders..

5. The husband was cross-examined on the basis that he wilfully disregarded the interim orders.  I do not accept that submission.

Consideration of the husband’s alleged non-compliance with Interim Property Orders

15 December 2010

1. These orders were complied with.  They represented immediate provision for the wife who was not in paid employment and had three young children.

11 March 2011        

1. These orders were for a closed period of six months.  They obliged the husband to meet all relevant outgoings and to provide support for his wife and children on a periodic basis.

8 August 2011

1. These orders represented a variation on the March orders.  The period was extended to the unknown date when it was contemplated the family home would be sold.  Order 2 of those orders is difficult to interpret.  However, the intention appears to have been for the husband to obtain consent from the bank to consolidate three debts into one.  Contingent on obtaining that consent the wife would then sell the matrimonial home, discharge all secured debts and receive the net balance.  In any event the bank declined to agree to consolidation of debt and to any arrangement other than the business loan then standing at $254,316.29[6] being repaid when the house was sold.

   [6]  Husband’s affidavit sworn 10 November 2011,pars 36-41 and Annexure ‘C’.

2. The consent of the bank not being forthcoming, the house was not sold.

3. Neither party made any further application.  The wife remained living in the home.  The husband continued to meet child support and spouse maintenance.  He brought school fees up to date.  He did not meet all the loan payments.

4. This outcome was not the one contemplated by the parties.  The August 2011 orders provided for settlement of the sale of the home by January 2012.

5. Both parties seek an order for sale of the home.

6. I accept that the husband took seriously his obligation to meet the orders and made payments, although sometimes erratically, to the full financial extent possible, consistent with his obligation to pay tax and overheads related to his business.

7. To the extent that the wife considered that the mortgage and other payments had priority over the payment of personal tax and business overheads, I reject that submission.  The ability of the husband to continue to work in order to generate the income to meet his obligations to his wife and children was dependent on meeting statutory and professional obligations in a timely way.

8. I was referred to the decision in Smith v Smith (1984) FLC 91-512. That decision is authority for the proposition that the court need not inquire into financial orders made by the consent of legally represented parties. That is not the point here. Events contemplated by both parties did not eventuate. The debts could not be reorganised. The house was not sold. The wife remained living in the home. The husband paid all that he could.

9. There was a concession by the wife, quite properly, that she did not assert hidden funds by the husband.

10. Accordingly, I conclude that it would not be appropriate to “add back” amounts which the husband was unable to pay.  Rather I should take into account the assets and liabilities as they stand.  The parties have both born the cost of loan repayments not made.  It is simply a fact which I take into account.

1. Adjustment  s 75(2) of the Act

1. The wife is aged 41 years, the husband 47 years. 

2. The wife developed problems with her health in the first year of the parties’ marriage.  She had developed a virus at a conference in Europe towards the end of 2000[7] and thereafter suffered a variety of symptoms which were considered to constitute “a post viral fatigue state (noting the symptoms were not consistent with) typical chronic fatigue”.  The medical evidence does not provide a diagnosis for the wife or a prediction of the future state of her health.

   [7] Wife’s affidavit sworn 9 November 2011, Annexure ‘P’ report of Dr AW Steinbeck, Consultant Physician.

3. The husband readily conceded that he had shared his wife’s concern about her bouts of ill health throughout the marriage.  The husband enjoys good health.

4. The wife is not presently in paid employment.  She worked from time to time during the marriage, but has not returned to fulltime or permanent part-time, rather the nature of her work was and remains episodic.  The medical evidence does not allow for a clear prediction of the wife’s capacity for work in the future.  The wife is uncertain about the future although she has expressed a view that she will return to the workforce.

5. Both parties have a mental capacity for gainful employment at the professional level.  The husband undertakes such employment.  The wife certainly has a source of employment if her health and location allow her to take it up. The firm the wife previously worked for would readily re-employ her.  A partner in that firm, Mr P, in his oral evidence said this:

   There are few employees you would readily take back.  She is one of them.

6. It seems less likely that the wife will return to this previous firm, given that she intends to move to the South Coast, however, that evidence gives some indication of the value of the wife to any firm with whom she found work.

7. The wife has the care of three young children, and will continue to do so until each has reached the age of eighteen.

8. Each of the parties has a commitment to maintain the three children of their marriage. The husband also has a duty to maintain the child of his current partnership, aged about twelve months.

9. The wife receives a Government benefit, being a Parenting Benefit of $303 per week and a Family Tax Benefit A and B of $150 per week.  She has an interest in superannuation (Y Superannuation Fund) with a gross value of $77,703.  The wife is unlikely to be able to access this superannuation for at least twenty years.   She has no current paid employment.

10. The husband is ineligible for any Government benefit and is supported entirely by his own income. He has earned gross fees of approximately $1 million per annum for the past three financial years.

11. The parties enjoyed a high standard of living during the marriage.  It is reasonable for the wife to continue to have some paid assistance with the care of the children, given the uncertainties of her health.

12. The wife is seeking the payment of maintenance to her.  There is no evidence to suggest that the wife needs to undertake any course of education and training to re-establish herself, other than the ongoing continuing mandatory education required in her field.  A regular maintenance income for the next three years will allow the wife to undertake that training.

1. Each of the parties has applied their income to the acquisition of assets and the wife has assisted the husband to maximise his earning capacity.

2. The marriage endured for nine years.  The birth of three children has affected the earning capacity of the wife with the support of the husband she has devoted herself with some paid assistance with the care and supervision of those children.  The wife wishes to continue her role as a parent, although the children will be spending regular time with their father, the bulk of the day to date care of the children will fall on her.

3. The husband is now living with his current partner, Ms C and their child T.  Ms E is also in well paid employment and subject to the commitment of both parties to their child and in the case of the husband, the three children of the marriage, the financial circumstances of the household of the husband are very much stronger than that of the wife.

4. The wife is to have the balance of proceeds of the sale of the family home and accumulated superannuation to date.  The husband will have unencumbered business premises and no other asset.

5. There is a current child support assessment.  The husband pays child support at the maximum assessable rate.  There is an order for departure from that assessment to the extent that the husband will, at all times, until the conclusion of their education, be responsible for every aspect of the cost of that education.

6. The wife submits that I should consider the debt relating to the purchase by the husband of the business premises under s 75(2)(o) of the Act as a factor for increasing her share of the assets.

7. I reject that submission.  The business premises were sold at a loss when the husband moved to his current premises.  This move was, as described by counsel for the wife, a career move.  Despite her stated concerns about the financial burden of loans for two sets of business premises, the wife:

   Wished to support her husband’s career by pursuing relocation to the premises of his choice[8]

   [8] Wife’s affidavit sworn 9 November 2011, par 23

8. There is nothing to criticise in the conduct of either party.  The practice of the husband has been increasingly lucrative. There has been an associated debt burden. The decision was taken by both parties. They should both carry the burden as well as the benefit of those decisions in 2007 and 2008 when the marriage was intact.

9. Having considered all of the matters above, I find that there should be a significant adjustment for the wife who has the care of three young children, a reduced capacity for work due to health problems, the logistics of caring for the children and a huge disparity in income between herself and the husband. Accordingly, a substantial adjustment is appropriate in the order of 25 to 30 per cent.  Overall the appropriate division is 80 per cent to the wife and 20 per cent to the husband.

   Division of Net Assets:

   80 per cent to wife  $671,318

   20 per cent to husband                   $167,830

(IV)  Just and equitable

1. The following liabilities will be discharged from the proceeds of sale of the matrimonial home:

Item 26	Home loan	$1,534,089
Item 27	Business premises (1)	257,317
Item 28	Accelerator Loan	76,922
Item 29	Business premises (2)	133,113
Item 31	Estimated Sale Costs	60,000
Item 33	Citibank Credit Card (wife)	31,984
Total	$2,093,425

1. The wife will retain the following assets:

Motor vehicle

35,000

Commonwealth Bank Account

325

AMP Account

59

Telstra Shares

1,200

Paid Legal Fees

8,624

Household contents

10,000

Net proceeds of Property at G

206,575

Superannuation:

-  Wife’s interest

-  Husband’s interest

77,703

282,583

Cash payment from husband

    66,949

$622,069

1. The wife will be responsible for the following liabilities:

Item 36	Loan from Lender 1	10,000
Item 37	Loan from Lenders 2 & 3	7,700
$17,700

1. For the wife:

Assets	$622,069
Less Liabilities	17,700
$604,369
Cash adjustment from husband required	66,949
80 per cent	$ 671,318

1. The husband will retain the following assets:

Shares in X Pty Ltd	$225,000
St George Bank	(13,436)
Joint NAB accounts	(301)
Paid Legal fees	22,737
Household contents	10,000
Office and Furniture	20,000
Fees outstanding	169,445
Add back Item 25	9,703
$443,148
Less Liabilities	$208,369
$248,516

1. The husband will be responsible for the following liabilities:

Item 29A	Overdraft	$58,037
Item 32	Car Lease	40,502
Item 34	NAB Visacard	11,917
Item 35	NAB Mastercard	25,592
Item 43	Provision for Tax on Fees	71,321

1. For the husband:

Assets	$443,148
Less Liabilities	208,369
234,779
Cash Adjustment Payment to Wife	66,949
20 per cent	$167,830

1. The wife will receive the proceeds of sale of the home, superannuation and a lump sum. The husband will retain his business premises unencumbered. This outcome reflects the need for support and re-accommodation for the wife and for the husband to continue to work.  The wife will have a cash sum made up of the proceeds of sale of the home and a further amount, a total of not less than $273,000.

Spouse Maintenance

1. It is not challenged that the Wife should receive spouse maintenance pursuant to s 72 of the Act. However, the parties’ remain in issue as to the duration of that support. The Wife submits that she cannot afford to remain in the inner city of Sydney and wishes to live in W Town on the coast of New South Wales where she would have the support of family members.

2. The husband does not concede that the wife has no income earning capacity.  He did concede that the wife has struggled with ill health, mainly fatigue.  He concedes that spouse maintenance is necessary until the youngest child is at pre-school.  Further there is a proper concession that the need for spouse maintenance could extend beyond that point.

3. The concession extends to total support by way of child support and spouse maintenance at the rate of $75,000 per annum.  Given the current assessment of child support, that amounts to $40,000 per annum in spouse maintenance.

4. In her financial statement the wife estimated her average weekly expenses at $2,644, in addition to any mortgage or rental expenses.  However, the evidence is of spending at a level which currently exceeds the spending of the wife during the marriage.  The orders maintain the figure established in March 2011 after an interim spouse maintenance hearing.  I have allowed the further sum of $750 per week to cover rent, mortgage, rates and repairs.  The wife will receive assets to re-establish herself.  She will need income to buy or rent a home.

5. I consider that the wife has established a need for spouse maintenance in the current sum which the husband has the capacity to pay.

6. Once the wife is obliged to find accommodation, the level of support will increase for three years.

7. The wife is a professional undertaking all requirements to maintain her employability.  She had an expectation of a return to work reflected in a contemporaneous note to the husband[9], “Obviously I will have to go back to work at some point I am hoping not to do that until after this school year” (2010).

   [9]Exhibit ‘W3’

8. Three years spouse maintenance gives the wife the opportunity to sell the house, re-establish herself elsewhere, settle the children into new schools and have sufficient time to seek out appropriate professional work convenient to where she is living.

departure from assessment of child support

1. There is a departure application by the wife[10] pursuant to s 116 and s 117 of the Child Support (Assessment) Act 1989 (Cth).

   [10]  Orders 16 & 17 wife’s Amended Initiating Application

2. The order sought is for the total sum of $3,000 per week plus Consumer Price Index (CPI) variations until the youngest child turns 18 or completes secondary school.  This is likely to be in 2025.

3. The husband during trial also tendered a Minute of Order requesting departure orders, more specifically requiring that the husband pay child support for the children’s school fees[11].

   [11]  Exhibit ‘H5’

4. Division 4 of the Child support (Assessment) Act relates to orders for departure from administrative assessment in special circumstances.  In October 2010 the wife made an application to the Child Support Agency and secured an assessment.

5. Notably under s 117 of the Child Support (Assessment) Act, grounds for departure include pursuant to s 117(2)(b)(ii):

   …(b)That in the special circumstances of the case, the costs of maintaining the child are significantly affected: …

   … (ii) because the child is being cared for, educated or trained in the manner that was expected by his or her parents…

6. For the assessment period of 19 October 2012 to 18 January 2012 the assessment was $2,942.75 per month (weekly $676.77).  This assessment was made on the basis of the wife having no relevant child support income.  There was very little evidence in the written material on this area.

7. The future circumstances of each party are unknown.

8. If the wife moves to the coast with the children as she intends then her accommodation costs and income, if any, are unknown.

9. The husband will be paying spouse maintenance initially $863 per week and then following the sale of the former matrimonial home $1,613 per week.  He earns a high income and has the capacity to support his wife and children.  If the children are privately educated, as is likely, the husband should pay the fees together with all the expenses associated with their education.   The wife should have the reassurance of the husband meeting those expenses for the entirety of the years of education of all three children.

10. The husband has a new partner who is self employed and has a young child from that relationship.

11. The husband receives no cash sum from the division of property.  He may have to borrow to meet the additional payment.  It is clear the husband has a capacity to rebuild assets from income which the wife does not.  However, it seems more appropriate for there to be a fresh assessment by the Agency based on the parties’ new financial circumstances rather than a fixed sum at four times the current rate applicable for the next 13 years.

12. Therefore in the circumstances of this case, I am satisfied pursuant to

    
    

    s 117(1)(b)(ii)(A) and (B) of the Child Support (Assessment) Act that it would be just and equitable and otherwise proper to make an order departing from existing child support arrangements.

13. The order provides for departure to the extent for the husband to supplement the children’s school fees and related expenses.  This will allow for the children to continue their education at whatever schools their parents agree on.

I certify that the preceding one hundred and five (105) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cleary delivered on 10 August 2012.

Associate: 

Date:  10 August 2012