SABERTON & SABERTON

[2011] FamCA 175

FAMILY COURT OF AUSTRALIA

SABERTON & SABERTON [2011] FamCA 175

FAMILY LAW - URGENT SPOUSAL MAINTENANCE – whether principles are engaged for urgent spousal maintenance – findings in relation to the needs of the wife – whether the husband has the capacity to meet appropriate orders
FAMILY LAW  – CHILD SUPPORT ASSESSMENT DEPARTURE -  whether s 117(1) applies – issue of private school fees

Family Law Act 1975 (Cth): ss 72(1)(a) & (b), 75(2), 77, 77A, 117(1), 117(2)(a)(ii), 117(2)(c)(ia); Child Support (Assessment) Act 1989 (Cth): s 116(1)(b)

APPLICANT: Ms Saberton

RESPONDENT: Mr Saberton

FILE NUMBER: SYC 6689 of 2010

DATE DELIVERED: 11 March 2011

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Rose J

HEARING DATE: 23 February 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: A Rees SC

SOLICITOR FOR THE APPLICANT: Robyn Sexton & Associates

COUNSEL FOR THE RESPONDENT: G Johnston

SOLICITOR FOR THE RESPONDENT: Hazan Hollander

Orders

Urgent spousal maintenance orders

1. 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 …, in G (“the former 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 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 respect of 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 $863.00 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 made on or before 4.00pm, 18 March 2011.

Child support departure order

1. 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.

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

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:  SYC6689 of 2010

Ms Saberton

Applicant

And

Mr Saberton

Respondent

REASONS FOR JUDGMENT

Introduction

1. By her Initiating Application filed 22 October 2010 the applicant wife (“the wife”) sought orders pursuant to ss 77 and 77A for periodic spousal maintenance in the sum of $1,600.00 per week and lump sum spousal maintenance in the sum of $5,000.00. Ancillary orders were also sought.

2. The wife also sought interim orders for variation for the child support assessment.

3. In addition, the wife sought an order for $50,000.00 “by way of interim costs/partial property settlement”.  Costs of the application were also sought by her.

4. The application was amended unopposed by the Minute of Orders Sought by the wife marked Exhibit 1:

   “INTERIM ORDERS SOUGHT BY APPLICANT WIFE

   1.That pursuant to Section 77A of the Family Law Act, within 28 days of the date of order the husband pay to the wife by way of lump sum spouse maintenance the sum of $12,000.

   2.That pending further order and pursuant to Section 72 and 77 of the Family Law Act the husband pay to the wife periodic spousal maintenance in the sum of $1,033 per week, the first such payment to be made within 7 days of the date of this order.

   3.That the spousal maintenance to be paid to the wife pursuant to order 2 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.

   4.4.1      That within 7 days of the date of Order, the parties do all acts and things and sign all documents necessary to authorise the National Australia Bank to transfer the sum of $14,000 from account number […] to the home loan secured by way of mortgage on the title of the property known as and situate at [G], account number […] ("the [G] mortgage"), for the purpose of reducing the present arrears in relation to that loan.

   4.2That within 7 days of the date of Order, the husband do all acts and things to cause to be paid all outstanding arrears in respect of the following:

   4.2.1National Australia Bank Accelerator loan, account number […] ("the accelerator loan");

   4.2.2the portfolio of loans with held with National Australia Bank, known as NAB Portfolio Facility […], which includes the [G] mortgage.

   5.That pending further order the husband pay all instalments/accounts as and when they fall due in relation to the following:

   5.1The [G] mortgage;

   5.2The [S] loan with the National Australia Bank, account number […];

   5.3The accelerator loan;

   5.4The Business Loan with the National Australia Bank, account number […];

   5.5MLC life insurance policy number […];

   5.6MLC life insurance policy number […];

   5.7Registration and insurance in relation to the motor vehicle registration number […];

   5.8Water and council rates for the property known as and situate at [G];

   5.9income protection policy in relation to the husband;

   5.10building and contents insurance for the property known as and situate at [G];

   Child Support

   6..That pending further order and pursuant to sections 116 and 117 of the Child Support (Assessment Act) the child support assessment be varied such that the husband pay to the wife child support in the sum of $2,879 per week, the first such payment to be made within 7 days of the date of this order, the period of such assessment to be from the date of order.

   7.That the child support to be paid to the wife pursuant to order 6 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.

   Lump sum

   8.That within 28 days the husband pay to the trust account of the wife's lawyers the sum of $50,000 by way of interim costs/partial property settlement provided that these monies be applied to the costs and disbursements of and incidental to these proceedings and provided further that the characterisation of such payment be reserved to the trial judge.

   9.That leave be granted for short service of this Application.

   10.That the husband pay the wife's costs of and relating to this application.”

5. The respondent husband (“the husband”) by his Response filed 15 December 2010 sought interim parenting and property settlement orders.  The response was amended by the Minute of Orders sought marked Exhibit 2.  The husband sought an order that the wife’s interim application be dismissed.  The husband’s application for interim parenting and property settlement orders was not before me for determination.

6. At the commencement of the hearing the husband, then represented by his solicitor without counsel, foreshadowed seeking an adjournment.  That application was subsequently withdrawn and the husband was represented by counsel thereafter.

7. Senior counsel for the wife stated that interim costs were sought in the hearing before me.  Consequently, I did not proceed to determine the application for the order sought in paragraph 8 of Exhibit 1.

Historical background

1. The following are brief relevant historical matters which are uncontroversial.

2. The parties cohabited for a period of approximately nine years which commenced on their marriage which took place in 2001 and continued until they finally separated on 12 July 2010.  They have lived separate and apart from each other since that time.  In those circumstances the period of separation necessary for an application for dissolution of marriage has not yet expired.

3. The wife is 40 years of age.  The wife is engaged in home duties.

4. The husband is 46 years of age.  He is engaged in a professional field.

5. There are three children of the marriage (“the children”), namely:

   (a)B who is 7 years of age having been born in November 2003;

   (b)T who is 6 years of age having been born in February 2005;

   (c)J who is 3 years of age having been born in December 2007

6. The children have lived with the wife throughout the period of separation subject to such times as spent in the care of the husband.

7. The husband lives with Ms C.

8. The wife is the sole registered proprietor of the property situate at and known as … G (“the former matrimonial home”).

9. The wife is also a registered proprietor with her parents of another property at G occupied by her parents.

10. On 15 December 2010, during the course of the duty list, orders were made by consent and without admissions requiring the husband to pay the wife the sum of $20,000.00 by monthly instalments “to include any liability in relation to child support up to and including 18 February 2011”.  In addition, the husband was required to pay the registration fees for the wife’s motor vehicle.  Interim parenting orders were also made by consent.

The application of the wife for urgent spousal maintenance orders

1. Although Exhibit 1 is styled “Interim Orders Sought by Applicant Wife” the terms of the orders sought make it clear that both periodic and lump sum spousal maintenance are sought by the wife on an urgent basis pursuant to ss 77 and 77A. Consequently, the principles that apply, to which I will subsequently refer, are more restrictive in their application compared to an application for interim spousal maintenance.

2. I will determine the orders so sought by the wife prior to considering her application for orders varying the current child support assessment in relation to the children.

Section 72

1. There is no issue raised by counsel for the husband to suggest that the wife had not met the threshold requirement for seeking a spousal maintenance order pursuant to s 72(1). He quite properly conceded that the wife currently cannot exercise a capacity to earn income.

2. Review of the evidence leads me to conclude that the wife is unable to support herself adequately by reason of the care of the children who have not attained the age of 18 years and separately, due to her current physical incapacity for appropriate gainful employment. Accordingly, the basis for a potential spousal maintenance order is established in accordance with ss 72(1)(a) and (b).

3. A different matter is the issue of quantum.  In that respect, I must have regard to relevant matters pursuant to s 75(2).

Relevant section 75(2)

1. The wife is 40 years of age.  The wife has serious health issues.

2. The husband is 46 years of age.  He is in good health.

3. The wife is unemployed.

4. The wife is engaged on a full-time basis in home duties.  Her sources of income include government benefits totalling $453.00 per week and child support of $676.77 per week.  The wife earns negligible interest from bank account funds as well as receiving a minuscule divided.

5. The wife is the sole registered proprietor of the former matrimonial home.  It is heavily mortgaged.  The parties have joint and several liability.

6. I accept the wife’s Financial Statement sworn and filed 22 October 2010 which reveal separate funds at bank of $3,300.00 and $6,000.00 respectively.

7. The wife also holds Telstra shares which she values as $1,050.00.

8. Otherwise, the balance of the wife’s personal property comprises household furniture and effects.

9. The wife holds 51 of the 101 allotted shares in L Pty Limited (“the company’) which acts as a service company for the husband’s business.  The balance of shares are held by the husband.  I accept the husband’s evidence that he pays the wife $1,000.00 per week by payment to her nominated bank account.

10. The wife also is a registered proprietor with her parents of a property at G.

11. The wife’s liabilities, apart from the mortgage over the former matrimonial home which secures outstanding loans for the purchase of the former matrimonial home and purchase of business premises by the husband, include her obligations as a guarantor for loans of significant amounts as described in her financial statement.  In addition, the wife has outstanding personal loans from her parents (Lender 1 and Lenders 2 & 3) in the amounts of $2,900.00, $10,000.00 and $7,770.00 respectively.

12. The wife, or perhaps the husband and wife jointly, owe $1,375.00 for outstanding income tax and superannuation payments relating to the employment of the nanny “[M]”.

13. The wife also owes her acupuncturist $450.00.

14. I accept the evidence given by the wife as set forth in her financial statement in particular, and otherwise in her affidavits in relation to her estimated weekly expenditure.  However, the extent to which that expenditure will be given weight in the context of the wife’s application for urgent spousal maintenance, as opposed to interim spousal maintenance, will be addressed subsequently in this Judgment.

15. The wife has the capacity to earn income as an employed professional.  I am satisfied that such capacity cannot be currently exercised due to her health issues and the need to care for the children who are all of a young age.

16. The husband’s sole source of income is derived from his business.

17. The husband’s Financial Statement sworn 18 February 2011 and filed 21 February 2011 states that his net average weekly income is $8,774.00.  Note 11 to the financial statement makes it clear that the amount given is net after tax.  That equates to $456,248.00 net per annum.  That figure is supported by the accountant’s spreadsheet being Annexure “D” to the Affidavit of the wife sworn and filed 21 February 2011.

18. Based on the husband’s financial statement, the following are his weekly expenses excluding personal expenditure such as food, clothing, entertainment, telephone and the like:

    (a)      arrears of tax  $1,162.00

    (b)      mortgage  $1,777.00

    (c)      rates  $39.84

    (d)      life insurance  $120.09

    (e)      life insurance  $161.59

    (f)       home insurance  $26.00

    (g)      motor vehicle insurance  $70.00

    (h)      health insurance  $60.00

    (i)       motor vehicle registration  $8.00

    (j)       motor vehicle lease  $330.21

    (k)      NAB Accelerator loan  $1,637.77

    (l)       credit card  $219.00

    (m)     maintenance for wife and children             $1,000.00

    (n)      Total  $6,611.50 per week

19. Accordingly, the husband has available $2,162.50 for other expenditure ($8,774.00 - $6,611.50).

20. The husband’s property is described in his financial statement.  The most significant item of property is represented by a half interest in household contents estimated at $98,000.00.  However, that amount represents the insurance value.  It has been well established over many years that generally the relevant value is not the insurance value but the resale value whether by auction or private sale.  For reasons unexplained, that value is not stated even on an estimated basis.

21. In addition, the husband holds shares in the company.  The value stated is “not known”.  I would have expected that the husband, as a professional person, would have made a greater effort to provide an estimated current value having regard to the underlying assets of the company which I infer include the premises in which the husband conducts business.  In the event that the substantive proceedings are not settled, the husband should be aware of the expectation for him to implement, so far as it is reasonably possible for him to do so, the obligation to make a full and frank financial disclosure, an obligation recognised by him on page 1 of his financial statement.  Appropriate specialist legal advice should enable the husband to do so without difficulty.

22. The only other significant property of the husband is represented by funds held in an account with the National Australia Bank.  I accept the husband’s evidence that the bank will not allow those funds to be withdrawn.  The husband’s total liabilities amount to $1,371,654.62.  I accept the husband’s evidence and find accordingly.

23. The husband has superannuation entitlements with estimated value of $280,000.00.  The husband has a limited indirect financial resource represented by the income of his partner stated as being “not known”.  The husband’s partner pays expenses at the rate of $150.00 per week.

24. The husband has the capacity to earn income as a professional person.

25. The wife has the primary care of the children.

26. The husband has the care of the children on a regular basis, although apparently there have been some difficulties in that regard so far as the eldest child is concerned.

27. Each of the parties has superannuation entitlements.  The wife’s entitlements are modest compared to those of the husband.

28. The parties have the commitments for their support set out in their respective financial statements including their joint commitments for the support of the children.

29. The financial circumstances relating to the cohabitation between the husband and his partner are the subject of an earlier finding.

30. The husband has received a child support assessment dated 22 October 2010 at the rate of $676.77 per week for the period 19 October 2010 to 18 January 2012.

31. The children attend a private school, K school with the youngest child having commenced this year at pre-school.  Fees for this year are $10,546.95.

Conclusion

Urgent spousal maintenance

1. The wife’s application seeks spousal maintenance on an urgent basis.

2. Spousal maintenance sought on an interim basis would have enabled a more expansive approach to be taken.  However, the wife was represented by senior counsel and no doubt on advice the wife has sought urgent spousal maintenance only.

3. I accept the submission made by counsel for the husband that maintenance so ordered, must be on the basis of immediate financial needs and for a defined period that is relatively short.[1]

   [1] See CCH Australia, vol. 1, Fam Law and Practice, paragraph 25-460 – accurate review of applicable principles

4. The husband, by his affidavits and the submissions made by counsel, has satisfied me that he has, or will assume, the following financial commitments on behalf of the wife, and in part, joint commitments:

   (a)Rates  $60.00

   (b)Insurance and life insurance $42.00

   (c)Health insurance  $60.00

   (d)Contents insurance  $27.00

   (e)House insurance  $19.00

   (f)Motor vehicle insurance                  $77.00

   (g)Motor vehicle registration              $8.00

   (h)Motor vehicle lease  $330.00

   (i)Total  $623.00 per week

5. In the above circumstances, I will make an order requiring the husband to meet those commitments.

6. I have accepted the wife’s evidence of her estimated other expenditure as set forth in Part N to her Financial Statement sworn and filed 22 October 2010.  The total being $150.00 per week.

7. I accept the submissions on behalf of the husband that on an urgent needs basis, holidays and cleaning totalling $1,050.00 should not be included.

8. Consequently, I find that the wife’s reasonable needs on an urgent basis amount to $863.00 per week.

9. The wife’s income includes child support of $676.77 and government benefits of $453.00 per week.  In view of the child support departure application, I will quarantine that child support weekly payment for consideration in that context.

10. Given the wife’s serious health issues and the need for treatment, which may not be fully covered by insurance, as well as paid assistance from time to time in the home, I have concluded that government benefits will not be given weight by way of offset against the amount of $863.00 per week for urgent needs to which I have earlier referred.

1. I am satisfied that the husband has the capacity to provide for periodic spousal maintenance on an urgent basis at the rate of $863.00 per week given the estimated average weekly funds available to him after meeting certain fixed and other pressing commitments, the subject of earlier findings.

2. I am not satisfied that on an urgent basis a lump sum spousal maintenance should be paid by the husband.  Whilst the wife clearly has outstanding financial commitments, part of her funds at bank could be applied to make a part payment.

Child support assessment departure

1. Senior counsel for the wife stated in her opening that the grounds relied upon are as follows:

   “The amount paid doesn’t adequately meet needs;  and

   the assessment doesn’t properly reflect the husband’s income.”

2. Inferentially, the wife relies upon s 116(1)(b) of the Child Support (Assessment) Act 1989 (Cth) for the purpose of attracting jurisdiction. I am satisfied that the basis for jurisdiction has been established. No submission to the contrary was made.

3. No submission was made on behalf of the wife on the ground of “special needs” referred to in s 117(2)(a)(ii), or any of the other grounds for departure in that section, other than s 117(2)(c)(ia) albeit that reference was only made to “income” of the husband.  However, due no doubt to the constraints of time that ground was not the subject of detailed analysis in submissions nor surprisingly, at least in the wife’s case, the important elements in s 117(1).  “Needs” by themselves are not a recognised ground as opposed to “special needs”.

4. Unfortunately, I was not assisted by an analysis of the contended expenses that relate to the three children, but rather emphasis upon school fees and expenses.

5. The evidence of the wife, particularly Annexure “F” to her Affidavit sworn and filed 21 February 2011, is that the first term fees for K school in relation to the three children including building fund amounts to $10,546.95.  The husband has consistently opposed the children attending that school due to financial constraints.

6. The three children have already commenced at the K school.  I am not satisfied on the evidence that they can now be enrolled in the local public school given that Term 1 has already commenced.

7. The husband has considerable and pressing financial commitments principally in relation to tax and repayments for various loans, at least part of which must be met by lump sum payments.  Bank funds that could be applied have been frozen.  Whilst the husband is a high income earner, the estimated average net weekly income ebbs and flows depending upon the rate of payment of fees.

8. I have reluctantly concluded that given the previous enrolment by the parties of the three children in their current school, the commencement of their attendance at that school with the potential practical difficulties of being moved to a public school at this stage, a departure order will be made for payment by the husband of Term 1 of the children’s school fees, uniforms and related educational expenses.

9. The child support departure orders were sought on an urgent basis.  Consequently, the order in relation to private school fees will be limited at this stage to Term 1.  It will be a matter for further application, if necessary, supported by updating affidavit evidence to enable consideration to be given by the Court as to whether or not the order be varied to encompass further school terms this year.  Practical issues may arise in relation to capacity to pay and movement of the three children to another school.

10. With respect to the application for variation of the child support assessment of a higher amount on a weekly basis, I am not persuaded that it is “just and equitable” and “otherwise proper” in accordance with s 117(1)(b)(ii).  Indeed, no submission was made in relation to that legislative requirement.

11. As a consequence, the current child support assessment will stand at $676.77 per week and otherwise departed from to include the school fees, uniforms and educational expenses to which earlier reference has been made.

12. The parties, in particular the husband, face significant financial burdens.  It would be in their interests, and indirectly the interests of the three children, for the parties to meet with their joint accountant to consider and decide upon a means of containing and reducing expenditure with a suitable and realistic approach to satisfying liabilities.  An independent and experienced mediator may assist.

I certify that the preceding seventy-seven (77) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rose delivered on 11 March 2011.

Associate: 

Date:  11 March 2011