SAIJEL & YEETUL
[2014] FamCA 446
•11 June 2014
FAMILY COURT OF AUSTRALIA
| SAIJEL & YEETUL | [2014] FamCA 446 |
| FAMILY LAW – PROPERTY – undefended hearing – consideration and determination of what order was just and equitable FAMILY LAW – CHILD SUPPORT – whether s 66E Family Law Act excluded the court’s jurisdiction under Division 7 Part VII – where an order is sought against a parent in a non-reciprocating jurisdiction – consideration of the interaction between ss 29A(3)(a) and ss 24(2) Child Support (Assessment) Act – where there was jurisdiction to hear the wife’s application for child maintenance pursuant to Division 7 Part VII Family Law Act – where it was proper to make an order for lump sum child maintenance FAMILY LAW – COSTS – where the husband failed to engage in any meaningful way in the proceedings and his conduct put the wife to expense – where the wife was substantially successful – costs order made on a party/party basis |
| Family Law Act 1975 (Cth) – Division 7 Part VII; s 66B; s 66C; s 66E; s 66G; s 66H; s 66K; s 66J; s 66P(1)(a); s 117 Evidence Act 1995 (Cth) – s 66A |
| Bendeich & Bendeich (1993) FLC 92-355 Peters & Peters and Ors (2012) FLC 93-511 |
| APPLICANT: | Ms Saijel |
| RESPONDENT: | Mr Yeetul |
| FILE NUMBER: | SYC | 7541 | of | 2012 |
| DATE DELIVERED: | 11 June 2014 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Watts J |
| HEARING DATE: | 21 October 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Kennedy |
| SOLICITOR FOR THE APPLICANT: | Abrams Turner Whelan Family Lawyers |
| SOLICITOR FOR THE RESPONDENT: | No appearance |
Orders
The Court notes that the following words have the following meanings for the purpose of these Orders:-
1.1"Suburb J" means the property at C Street, Suburb J, registered in the name of D Pty Ltd as Trustee for the Trust as more fully described in Folio Identifier … .
1.2"the Home" means the property at B Street, Suburb E, registered in the parties' joint names as joint tenants as more fully described in Folio Identifier … .
1.3"F Australia" means the company F Australia Pty Limited ACN … of which the husband and the wife are the directors and each own 3,000 of the 6,000 issued ordinary shares.
1.4"the Trust" means the S Family Trust established by Deed dated 1 July 2009 of which D Pty Limited is the Trustee and the husband is the appointor.
1.5"D Pty Ltd" means the company D Pty Limited ACN … of which the husband and the wife are directors and the husband is the holder of the one issued ordinary share.
1.6"the Companies" means F Australia and D Pty Ltd.
1.7"the Super Fund" means the G Superannuation Fund established by Deed dated 3 May 2007 and amended by Deeds of Variation dated 20 November 2010 and 8 November 2011 and of which the husband and the wife are the only members.
1.8"G Group" means G Group Pty Limited ACN … of which the husband and the wife are shareholders and directors and which is the Trustee of the Super Fund.
1.9"The Husband's Australian Bank Accounts" means the following bank accounts held in the husband's sole name:
1.9.1Westpac Choice account number …33
1.9.2Westpac eSaver account number …53
1.10"The Parties' Joint Accounts" means the following bank accounts held in the joint names of the parties:
1.10.1St. George Account number …35
1.10.2St George Account number …01
1.11"The St George Loan Account" means St George Loan Account number …67 held in the joint names of the parties
1.12"The Margin Loan" means the CommSec Margin Loan Account number …73 held in the husband's sole name.
An Order by way of alteration of property interests pursuant to s79 of the Family Law Act 1975 (Cth) be made in terms of paragraphs 3 to 5 and 7 to 13 of these orders.
The husband forthwith do all acts and things and sign all documents necessary to transfer and assign to the wife his interest in the Home including signing and handing to the wife a Transfer, to be prepared by the solicitor for the wife, of his interest in the Home within seven days of this Order and of the Transfer being served upon him and that he thereupon redeliver the said Transfer duly executed to the solicitors for the wife, Abrams Turner Whelan Family Lawyers.
As and from the date of receipt of the Transfer of the husband's interest in the Home to the wife, the wife shall be responsible for all mortgage payments, statutory rates and charges, other utilities, insurances, outgoings and expenses in relation to the property incurred prior to the date of the sale, shall make all such payments as and when they fall due and the wife hereby indemnifies and shall keep forever indemnified the husband in respect of all such liabilities in relation to the property.
Within seven days from the date of these Orders and of the requisite documents being served upon him and simultaneously:-
5.1The husband shall do all acts and things and sign all documents presented to him and thereupon redeliver such documents duly executed to the wife's solicitors, Abrams Turner Whelan Family Lawyers, to:-
(a)resign all offices held by him in the Companies but shall first, if called upon to do so, vote at any meetings of members and directors thereof in favour of such resolutions as the wife may direct to convert the Companies to single shareholder/director companies;
(b)transfer to the wife the whole of his shares and any other interest he may have in the Companies;
(c)transfer to the wife the whole of his interest in the Trust and resign and remove himself from all positions as appointor in relation to the Trust in favour of the wife;
(d)assign to the wife all credit loan accounts standing in the husband's name and the parties' names jointly in the Companies and/or the Trust;
(e)transfer to the wife the entirety of his interest in the Husband's Australian Bank Accounts;
(f)transfer to the wife the entirety of his interest in the Parties' Joint Accounts;
(g)transfer his interest in the Margin Loan to the wife;
(h)transfer to the wife the entirety of his interest in the St George Loan Account;
(i)transfer his 13,023 Telstra shares to the wife.
5.2The wife will do all acts and things and sign all documents necessary to:-
(a)assume from the husband liability for all debit loan accounts standing in the husband's name and/or the parties' names jointly in any of the Companies or the Trust;
(b)indemnify and keep indemnified the husband in respect of all liabilities in relation to the Companies and/or the Trust, whenever and however arising, including but not limited to all taxation liabilities of the entities or either party personally arising in connection with any interest, loan account, office or employment in relation to the entities;
(c)indemnify and keep indemnified the husband in respect of all liabilities in relation to the Margin Loan and the St George Loan Account.
In the event that the husband fails to execute any documents required pursuant to Paragraphs 3, and/or 5.1 of these Orders and deliver them to the wife's solicitors within seven days of being provided with the said documents, that pursuant to s 106A of the Family Law Act 1975 (Cth), a Registrar of the Family Court of Australia at Sydney be appointed to execute in the name of the husband all and any such documents.
The furniture, furnishings and effects presently situated in the Home shall be retained by the wife.
That within seven days of the date of these Orders, the husband pay to the wife the sum of $377,743.
In accordance with Section 90MT(1)(b) of the Family Law Act 1975 (Cth):-
9.1The wife is entitled to be paid the specified percentage of each splittable payment out of the husband’s interest in the Super Fund;
9.2The husband's entitlement, and the entitlement of such other person to whom a splittable payment may be made, to payments out of the husband’s interest in the Super Fund is correspondingly reduced by force of this order.
9.3the specified percentage for the purpose of this paragraph is 100 per cent.
9.4this Order has effect from the operative time and the operative time is four business days after service of this Order on G Group.
9.5G Group shall do all acts and things and sign all documents as may be necessary to:-
(a)calculate, in accordance with the requirements of the Family Law Act 1975, the entitlement created by the preceding paragraph of this Order;
(b)pay the entitlement whenever a splittable payment becomes payable out of the husband’s interest in the Super Fund;
The husband be and is restrained from requesting the G Group, in accordance with Regulation 7A.06(2) of the Superannuation Industry (Supervision) Regulations 1994, to rollover or transfer the transferable benefits to another superannuation fund.
Upon G Group giving effect to paragraph 10 of these Orders, the husband will:-
11.1tender his resignation as director of G Group;
11.2transfer to the wife his shares in G Group; and
11.3resign as a member of the Super Fund.
As between the husband and wife, and subject to these Orders, the husband and wife shall each respectively retain all interest in and entitlement to:-
12.1All personal property now in his/her respective possession or control;
12.2All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively;
12.3All interests in life insurance policies and superannuation funds standing in his/her sole name respectively.
Subject to the above Orders:-
13.1The husband hereby indemnifies the wife from and in respect of all actions, claims, suits and demands as may be made against the wife in relation to all liabilities in the name of the husband or in his name jointly with any other person;
13.2The wife hereby indemnifies the husband from and in respect of all actions, claims, suits and demands as may be made against the husband in relation to all liabilities in the name of the wife or in her name jointly with any other person.
Pursuant to s 66G of the Family Law Act 1975 (Cth), the husband pay to the wife the sum of $215,650 within 14 days of the date of these orders by way of lump sum child support for the children of the marriage, H, born on … 1996, and K, born on … 2000.
Subject to the above Orders, each of the husband and the wife release the other from all actions, proceedings, claims, demands, debts, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of or in respect of any act, cause, matter or thing.
In the event that either party refuses or neglects to execute any document or documents whatsoever pursuant to these Orders the Registrar of the Court be appointed pursuant to s 106A to execute such documents in the name of such party and do all acts and things necessary to give validity to the operation of the said documents.
Pursuant to s 81 of the Family Law Act 1975 (Cth) the parties intend these orders to finally determine all financial relations and issues between them and avoid further proceedings between them.
The husband pay the wife's costs of and incidental to these proceedings on a party/party basis to be agreed in writing or assessed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Saijel & Yeetul has been approved by the Chief Justice pursuant to s 121(9)(g) of the Act.
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 7541 of 2012
| Ms Saijel |
Applicant
And
| Mr Yeetul |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
The applicant seeks an order by way of final property settlement which would effect a 70/30 split of the net pool of assets in her favour. She also seeks in her amended application filed 16 October 2013, a lump sum child maintenance payment from the husband in the total of $215,650 for both children.
NO APPEARANCE BY THE HUSBAND
Leave was granted by Registrar George on 2 October 2013 for the wife to file an amended initiating application and for that application and all supporting documents to be served on the husband via email to the husband’s email address. I am satisfied the husband was served with all relevant documents.
The husband has instructed two solicitors who have both filed notices of address for service in these proceedings but who have not attended court. They have also since both filed notices of ceasing to act.
The husband was served multiple documents and sent communication at his email address between May and October 2013. On 12 June 2013 the husband failed to appear at a conciliation conference and the Registrar allocated the 16October 2013 as the date for an undefended hearing. The husband failed to appear at the hearing. The wife contends that the husband is now residing in China.
THE HUSBAND’S LACK OF FINANCIAL DISCLOSURE
Despite numerous requests from the wife’s solicitors the husband has failed to provide any disclosure regarding his financial circumstances.
Furthermore, despite orders made by this court on 7 February 2013, 4 April 2013 and 27 May 2013 requiring the husband to file and serve a financial statement setting out his financial circumstances, these orders were not complied with.
DOCUMENTS RELIED UPON
The documents relied upon by the wife are set out in Schedule 1.
ORDERS SOUGHT
The orders sought by the wife are set out in Schedule 2.
The wife seeks to retain all assets in her sole name. The wife seeks to have the husband’s interest in the former matrimonial home at Suburb E transferred to her in its encumbered state and she intends to take over the responsibility to continue to make the mortgage repayments on the property. The wife seeks to have transferred to her the husband’s joint interest in items 11, 12, 18 and 23 on the balance sheet and for the husband to transfer to her the assets which are in the husband’s sole name at items 3, 14, 20 and 21 on the balance sheet. In addition to taking over the mortgage on the matrimonial home, the wife would also be responsible for making repayments in relation to the St George loan account (…67; item 38 on the balance sheet). The wife seeks an order splitting superannuation so that the wife receives the whole of the husband’s interest in their self-managed superannuation fund.
SHORT HISTORY
The wife was born in 1960 in China and is currently 53 years old.
The husband was born in 1962 in China and is currently 52 years old.
The parties married in May 1994.
The child H was born in 1996 and is currently 17 years old.
The child K was born in 2000 and is currently 14 years old.
On 15 March 2012, the wife asserts that the husband assaulted her. As a result of this, she formed the view that the marriage was over and the parties remained living separately under one roof.
The parties physically separated on 13 September 2012.
DETAILED CHRONOLOGY
The wife was born in 1960 in China and is currently 53 years old.
The husband was born in 1962 in China and is currently 52 years old.
The parties married in May 1994.
In 1995 the wife commenced employment with Company A.
In July 1995 the husband established a business called I Pty Ltd and began operating a wholesaling business through that company. This company changed its name to F Australia Pty Limited in March 2009.
The child H was born in 1996 and is currently 17 years old.
From 1996 to 2001 the wife’s mother resided with the parties and assisted with household duties.
The husband became an Australian citizen in 1997 and commenced travelling overseas for the company approximately five times per year. The wife also became an Australian citizen on in August 1997.
The parties purchased the property at L Street, Suburb M (“the Suburb M property”) in June 1997 for $242,000, funded by a mortgage of $200,000 and the balance from savings.
The child K was born in 2000 and is currently 14 years old.
The parties purchased the property at O Street, Suburb R (“the Suburb R property”) in May 2001 for $541,000 funded by a mortgage of $433,000 and the balance from savings.
In February 2002 the parties purchased the property at P Street, Suburb N (“Suburb N Property”) for $410,000 funded in part by a mortgage of $328,000.
In March 2002 the parties sold the Suburb N property for $435,000.
On 1 August 2003 the wife was made redundant by Company A and received a redundancy payout of approximately $80,000. The wife then began working for F Australia full time.
The parties purchased a warehouse at Q Street, Suburb T (“the Suburb T Warehouse”) in November 2003 for $700,000, funded by a loan of $490,000, the wife’s redundancy payout and from the sale of shares.
In May 2005 the parties sold the Suburb N Property for $540,000 and purchased the property at B Street, Suburb E (“the former matrimonial home”) for $1,450,000 funded by the proceeds of sale of Suburb N and mortgage of $1,160,000.
The parties established the company D Pty Limited in April 2007. The parties are joint directors and the husband is the sole shareholder of the company.
The parties established a self-managed super fund known as U Super Fund in May 2007 (“the Super Fund”) .The trustee of the fund was U Pty Ltd (which was F Australia under a previous name).
In 2009 the wife stopped going into the office for F Australia and instead worked from home doing the book keeping, at the husband’s suggestion.
In July 2009 the husband established the S Family Trust (“the Family Trust”). The Trustee is D Pty Limited and the husband in the Appointor of the Trust.
In September 2009 the wife obtained a loan from Ms V for $250,000 to reduce the home loan over Suburb E.
In 2010 the parties renovated the former matrimonial home at a cost of approximately $20,000.
In July 2010, the parties purchased the property at C Street, Suburb J (“the Suburb J property”) in the name of D Pty Ltd as Trustee for the sale for the S Family Trust for $1,290,000. The purchase price was funded by a mortgage of $1,032,000 and the money saved by refinancing Suburb E.
The parties established the company G Pty Ltd in October 2010; the parties are joint shareholders and directors of the company.
The parties changed the name of U Super Fund to G Super Fund and the trustee to G Pty Ltd in November 2010.
The parties sold the Suburb T warehouse to G Group as trustee of the G Super Fund in March 2012 for $780,000.
On 15 March 2012, the wife asserts that the husband assaulted her. As a result of this, the Wife formed the view that the marriage was over and the parties remained living separately under one roof.
The wife says on 16 March 2012 she attended W Hospital to have her injuries treated and on 17 March 2012 she attended Suburb X Police Station to report the assault.
Between 7 May 2012 to 31 August 2012 the wife says the husband withdrew $300,000 from the parties Term Deposit Account and transferred those funds to his personal bank accounts.
On 14 June 2012 an Apprehended Domestic Violence Order was granted against the Husband.
On 18 July 2012 the wife withdrew the balance of the parties’ Term Deposit Account and transferred it to her personal account. She asserts that she had worries the Husband would take the remaining funds from the Term Deposit Account.
Between 24 July 2012 and 26 September 2012 the husband drew cash totalling $186,858 from F Australia.
Between 21 August 2012 and 8 October 2012 the wife sold shares held by the Family Trust and asserts she had concerns the husband would sell these shares himself and transfer them overseas.
On 6 September 2012 the husband dismissed the wife as director of D Pty Ltd, the Trustee company of the S Family Trust.
On 13 September 2012 the husband transferred $250,000 from his bank account to a bank account overseas. The husband also left the matrimonial home and moved to live in China. The wife asserts the bullion bars, assets of the superannuation fund, were missing after the husband left Australia (these had been acquired by the super fund) and that he also took the Lexus motor vehicle belonging to F Australia.
The wife attempted to contact the husband to find out where he was on 14 September 2012 but he did not respond.
On 16 September 2012 the child H spoke to the husband on the phone and asked his whereabouts but the husband did not disclose this. The wife says she received no further contact from the husband until his return to Australia on 4 March 2013.
Between 28 September 2012 to 28 June 2013 the wife loaned a net total of $160,110 to F Australia.
Between 1 October 2012 and 3 October 2012 the husband transferred a total sum of $20,000 from his personal accounts to his Citibank credit card as a credit.
On 2 October 2012 the husband resigned from F Australia. After the husband resigned from F Australia, the business started performing poorly, incurring a loss of $222,086 in the financial year ending 30 June 2013 as well as experiencing a large drop in purchasing orders from F Australia’s 4 major clients.
On 9 October 2012 the wife reported the husband as missing after staff of F Australia expressed concerns about the husband’s whereabouts.
On 11 October 2012 the wife was informed by Suburb X police that the husband had left Australia for China.
The wife commenced proceedings for property settlement in this court on 14 December 2012. The wife sought an order for lump sum child maintenance in her amended application filed 4 October 2013.
In January and February 2013 the wife carried out repairs to the Suburb E property as a result of storm damage and general wear and tear, spending approximately $9,770.
On 22 February 2013 Interim Orders were made.
On 27 February 2013 pursuant to the orders of 22 February 2013, the wife’s solicitors sent the husband the necessary documents to convert the mortgage over Suburb E to be interest only, to allow the wife to receive all bank statements in relation to the mortgage over Suburb J and to direct all of the rent received from Suburb J to be paid against the mortgage.
On 4 March 2013 the husband returned to Australia and attempted to enter the home in Suburb E. The wife and children stayed at a friend’s house until the husband left. Upon the wife and children returning home, they received a phone call from the police who subsequently attended the home.
On 6 March 2013 the court signed the documents sent to the husband on 27 February 2013 in the husband’s name, pursuant to the orders of 22 February 2013 and the mortgage over Suburb E was converted to an interest only mortgage on 14 March 2013.
On 15 March 2013 Lewis Law wrote to the wife’s solicitor saying that the husband had recently returned from China and wanted time to file a response and financial statement.
On 21 March Churchill Lawyers filed a notice of address for service on behalf of the husband.
On 27 March 2013 the wife’s solicitors sent a letter to the husband’s solicitors requesting financial disclosure with respect to the husband’s bank accounts.
In April 2013 the wife purchased a Toyota motor vehicle from F Australia. The wife also undertook repairs to Suburb E to prepare it for renting, spending approximately $9,500.
On 5 April 2013 the wife received a third reminder letter from the Office of State Revenue requesting payment of the outstanding land tax.
On 5 April 2013 the wife’s solicitors sent a letter to the husband’s solicitors requesting full and frank disclosure regarding the husband’s financial circumstances.
On 12 April 2013 the wife’s solicitors sent a letter to the husband’s solicitors requesting that the husband pay the land tax over Suburb J as soon as possible. The wife’s solicitors received no response and the wife paid the outstanding land tax on 24 April 2013.
On 15 April 2013 the husband received a payment of a claim of $41,767.20 from AAMI as result of a car accident in which the Lexus he had taken from F Australia was written off.
On 17 April 2012 the wife’s solicitors sent a further letter to the husband’s solicitor following up their request for financial disclosure. No response was received.
The wife’s solicitors received a letter from the husband’s solicitors on 19 April 2013 offering to settle the matter on the basis the husband accept all orders sought in the wife’s initiating application.
On 25 April 2013 the wife was advised from a mutual friend of the parties’ that the husband had disappeared. On 26 April 2013 she was advised from the same friend that the husband had returned to China.
On 15 May 2013 the husband paid $8,040 from his Citibank credit card to Company Y located in Suburb Z. He paid a further $9,800 to this company on 16 May 2013.
On 24 May 2013 the wife’s solicitor’s received a Notice of Ceasing to Act from the husband’s solicitors.
On 8 July 2012 the wife and children moved out of the Suburb E property to a rental unit at Suburb AA and commenced renting out the Suburb E property pursuant to the orders of 22 February 2013.
In September 2013 the wife was informed by the agents managing the rental of Suburb E that she would need to replace the curtains at Suburb E at a cost of approximately $11,145.
APPROACH
In this matter my task is to:
80.1.Identify according to ordinary common law and equitable principles and then value the property, assets, financial resources and liabilities of the parties;
80.2.Determine whether it is just and equitable to make an order altering those interests and if so;
80.2.1.Identify relevant contributions and assess them;
80.2.2.Consider relevant matters referred to in Section 79(4)(d) – (g) of the Act;
80.3.Determine what order adjusting the property, assets and liabilities of the parties is just and equitable.
BALANCE SHEET
The wife’s balance sheet is set out below.
Assets
Item no.
Title
Description
Value
1
J
[B Street, Suburb E]
$1,600,000.00
2
W
[O Street, Suburb R]
$790,000.00
3
H
CommSec Margin Loan account no. …73 and Share Portfolio (as at September 2013)
$5,195.00
4
W
18,600 Telstra shares at 4.91 (as at 30/8/13)
$91,326.00
5
W
1,202 ANZ Shares at 29.62 (as at 30/8/13)
$35,603.00
6
W
CommSec Share Portfolio (as at 23/9/13)
$4,162.00
7
J
Shares with KGI Asia Limited
$360,000.00
8
W
ANZ Access Acount no. …58 (as at 23/9/13)
$120.00
9
W
ANZ Online Savings Account no. …66 (as at 26/9/13)
$98.00
10
W
St George Account no. …90 (as at 23/9/13)
$0.00
11
J
St George Account no. …35
$1,459.00
12
J
St George Account no. …01
$0.00
13
W
St George Account no. …82 (as at 26/9/13)
$327,288.00
14
H
13,023 Telstra Shares at 4.91 (as at 30/8/13)
$63,943.00
15
H
HSBC Hong Kong Account no. …33
$614,415.00
16
H
Westpac Choice Account no. …33 (as at 28.6.13)
$21,043.00
17
H
Westpac eSaver Account no. …53 (as at 31.5.13)
$20,624.00
18
J
[F] Australia Pty Limited
$0.00
19
H
[F] International Pty Limited
$52,664.00
20
H
[D] Pty Limited
$0.00
21
H
[S] Family Trust
$260,703.00
22
H
Lexus (insurance funds paid by AAIMI)
$41,767.00
23
J
Household Contents
$5,000.00
24
W
Money owed to the Wife by [F] Australia Pty Limited
$93,000.00
25
W
… Toyota [motor vehicle]
$5,000.00
26
H
Cash taken from [F] Australia Pty Ltd
$186,858.00
27
H
Cash taken from joint accounts with St George
$72,341.00
28
H
[Bullion] Bars taken from [G] Super Fund
$20,706.00
29
H
Cash transferred by the Husband to overseas bank accounts
$250,000.00
30
H
Moneys paid by husband to [Company Y] in [Suburb Z]
$17,840.00
31
W
Superannuation in [G] Super Fund
$572,436.00
32
H
Superannuation in [G] Super Fund
$410,417.00
Total assets
$5,924,008.00
Liabilities
Item no.
Title
Description
Value
33
J
Mortgage to St George secured over [Suburb E] property
$1,420,381.00
34
W
Mortgage to St George secured over [Suburb R] property
$555,101.00
35
W
Debt to [Ms BB] including interest
$305,000.00
36
W
Wife’s credit card debt
$29,941.00
37
W
Outstanding orthodontist fees for [K]
$7,735.00
38
J
St George Loan Account no. …67 (as at 31.8.13)
$75,950.00
39
H
Citibank Credit Card
$406.00
Total liabilities
$2,394,514.00
Total net assets
$3,529,494.00
Items 1, 2, 18: The wife has obtained valuation reports in relation to the former matrimonial home, the Suburb R property and in relation to F International Pty Limited.
Item 19: The wife is unaware of the specific value of F International Pty Limited and does not know whether the company is trading. However, she is aware that the company had a bank account containing approximately AUD $36,826 as at 4 September 2012, and AUD $15,837.77 was paid into that account on 5 November 2012.
Item 21: A valuation report was prepared in relation to the S Family Trust and D Pty Limited.
Item 22: Although the car was written off in April 2013, the husband received a payout from AAMI for the vehicle of $41,767.20.
Item 24: Whilst the wife has loaned a total of $160,110 to F Australia, the estimated value of the loan has been valued by the expert valuer at $93,000 and it is unlikely that the wife would recover the full value of her loan to the company should it be wound up.
Items 38, 39: A valuation report had been prepared in relation to member entitlements for G Super Fund.
WHETHER AN ORDER ALTERING INTERESTS SHOULD BE MADE
The parties have separated and their partnership has ended. After the separation, there was no longer a continuing commitment to the mutual use of assets and a shared responsibility for liabilities. As the balance sheet set out above demonstrates, the assets and liabilities remaining with each party are $ 470,128 held jointly; $2,038,110 held by the husband and $1,021,256 held by the wife.
I find that in all the circumstances, it is just and equitable to make an order altering property (including adjusting liabilities).
CONTRIBUTIONS
Initial Contributions
At the date of marriage, the wife asserts she possessed savings in the sum of approximately $70,000. She contends that the husband had no assets going into the marriage.
Financial Contributions
The wife was employed full time from the date of marriage until 2003 with two different companies. Her income during this period ranged from $60,000 to $80,000 per annum.
In 2003 the wife was made redundant and received a redundancy payout of approximately $80,000 (which included a payment of 36 weeks’ pay in accordance with her Retrenchment Agreement, as well as a further payment of $4,500, payments for her long service leave entitlements, and eight weeks of accrued annual leave).
At the date of marriage, the husband was running a hospitality business in partnership with two other people. In June 1995 the husband established I Pty Limited and began operating a wholesaling business through that company. This company now operates under the name F Australia Pty Limited as of March 2009.
The wife asserts that the company was not particularly successful and was earning fairly little income up until 2003. The parties relied primarily on the income derived from the wife’s employment.
The parties used the wife’s redundancy payout in 2003 towards the purchase of the Suburb T warehouse in the name of F Australia. The wife then started working full time for F Australia with the husband and it was built up into a successful enterprise. The wife says her duties included bookkeeping, taking care of payables and receivables, establishing the MYOB system so all orders and invoices could be electronically recorded, and dealing with any bad debts to the company. The wife ceased work at F Australia in 2009, she says at the request of her husband. She consequently stopped going to the office and worked from home doing the bookkeeping.
The wife says the husband continued working for F Australia until 3 October 2012 when she received a letter of resignation from him.
The parties established a self-managed superannuation fund known as U Super Fund. The wife rolled over her accumulated superannuation of $202,475.15 into the Super Fund and the husband also rolled over all the interest he had in superannuation being $80,991.38 into the Super Fund.
On 1 July 2009 the husband established the Family Trust. The trustee of the Family Trust was D Pty Limited, a company which the parties established in 2007 and of which the parties were joint directors and the husband was a sole shareholder. The husband removed the wife as a director of this company on 6 September 2012. The husband is the appointer of the trust.
In 2010, the parties undertook renovations to the former matrimonial home which comprised of landscaping of the front and back gardens and building a retaining wall in the front and back garden. The total cost of renovations was approximately $20,000, funded from the income of F Australia.
Non-Financial Contributions
The wife says that during the marriage, she and the husband shared responsibility equally for:
100.1.Locating and negotiating the purchases of the real estate that was acquired throughout the marriage;
100.2.Negotiating the sale of the real estate sold during the marriage;
100.3.Managing F Australia Pty Limited and other investments, including the parties’ super fund.
The wife however contends that she was primary responsible for:
101.1.Managing the parties’ investment properties and leasing them;
101.2.Negotiating and obtaining finance for the parties’ investments;
101.3.Managing the renovation of the former matrimonial home in Suburb E in 2010, including obtaining council approval and managing the contractors (i.e the builder and landscaper);
101.4.Managing contractors to carry out general repairs and maintenance in the Suburb E home.
In her affidavit the wife states that in 2009, when she was employed by F Australia, the husband said to her words to the effect “you can stay at home and look after the kids. The company only needs one boss.”
As such, the wife asserts to have been primarily responsible for homemaking and parenting duties during the marriage. She was assisted by her mother with some of the household duties whilst her mother was residing with the parties between 1996 and 2001. The maternal grandmother particularly assisted with preparing meals, cleaning the household and doing the laundry.
The wife states in her affidavit that during the times the husband travelled overseas for work during 1997 onwards, she would be solely responsible for taking care of the children, apart from the assistance from her mother.
Post Separation Contributions
The wife contends that upon leaving the former matrimonial home, the husband took with him the bullion bars which belonged to the parties’ super fund and are worth $20, 706. The husband also took with him the Lexus which was a company car for F Australia.
Further, it is asserted by the wife that the husband withdrew $300,000 from a Term Deposit account in the name of the Family Trust on 11 May 2012, and deposited it into one of his personal Westpac bank accounts, and after a series of transfers into other personal accounts the money was transferred into an overseas bank account held by the husband. The monies in the Term Deposit consisted of the balance of the proceeds of sale of the Suburb T warehouse.
The wife says that the husband further transferred a sum of $20,000 from his Westpac choice account to his Citibank credit card.
The wife expressed concern that the husband would take the remaining funds in the Term Deposit Account and says as a result of this she withdrew the balance of the Term Deposit on 18 July 2012 and deposited it to a new St George account which she opened.
On 20 November 2012 the wife opened a new account with ANZ Bank and closed the St George account. She transferred the funds from the St George account to the new ANZ account (being $845,304 which was made up of the funds from the Term Deposit account and proceeds of sale of some shares). These funds were then transferred to a new ANZ online saver account.
On 27 February 2013 the wife transferred $760,000 of the funds in her ANZ online saver account to her St George Home Loan offset account.
The husband further withdrew cash from the parties joint Loan Account with St George totalling $72,341,50 between 7 May 2012 and 31 August 2012, and $186,858 from F Australia between 24 July 2012 and 26 September 2012.
After separation, the wife sold shares held by the Family Trust realising a total net sum of $545,304. She says she did this out of concern that the husband might sell these shares himself and transfer the proceeds to an overseas bank account. The wife transferred the proceeds into her new St George and then ANZ account as outlined above. She then transferred the majority of those funds into the St George Home Loan Offset Account.
From 28 September 2012 to 28 June 2013 the wife loaned a total of $187,462 to F Australia so that the company could continue trading. The wife says that the company was suffering from a shortage of cash flow. The wife asserts that F Australia owes her $160,110 (being the outstanding $187,462, having deducted purchase of a Toyota motor vehicle from F Australia, the wife’s contribution for Fringe Benefits Tax of $4,173, and a loan drawn by the wife from F Australia of $15,000 as a director’s fee.)
The wife contends that the husband has made no contribution to the mortgage repayments over the former matrimonial home at Suburb E since separation. The wife has been solely responsible for making these payments of $8,379.12 per month immediately following separation and increasing payments to $9,773 since 14 November 2012. The wife claims to be in shortfall of income under expenditure in excess of $5,000 per week.
As at 14 March 2013 the monthly instalments for the mortgage were reduced and converted to interest only repayments.
In December 2012 the wife was notified by St George Bank that the direct debit mortgage payments for the Suburb J property were not being made to HSBC due to there being insufficient funds in the Family Trust’s St George bank account. Since March 2013 the wife has become authorised to manage the relevant accounts and has been able to direct all rental proceeds for Suburb J to be paid against its mortgage.
In January and February 2013 the wife spent approximately $9,770 in carrying out repairs to the former matrimonial home as a result of storm damage and general wear and tear.
In April 2013 the wife again undertook repairs to the Suburb E home in order to prepare it for renting. This included repair and replacement of the retaining wall in the gardens, repairs to the bathroom, rectifying the house damping problem, painting, rectifying the toilet drainage problem, repairing sliding doors, garage door, replacing the dishwasher and replacing all the down lights to be LED lights, re-gyprocking the bedroom ceiling and grouting the kitchen and bathroom floors. The cost of these repairs is estimated at $9,500 in total.
The wife paid outstanding Land Tax and interest of $8,666.12 on 24 April 2013 from the Home Loan Offset Account.
The wife asserts the husband received payment of a claim of $41,767.20 from AAMI as a result of a car accident involving the Lexus which the husband had taken from F Australia.
The wife also says the husband has paid a total of $17,940 from his Citibank credit card to Company Y located in Suburb Z.
FUTURE NEEDS - SECTION 79(4)(d) - (g) MATTERS
The wife’s financial statement filed 4 October 2013 indicates that her average weekly income is $2,483. This income is primarily rent received by her on the Suburb E and Suburb R properties. In the financial year ended 30 June 2012 she also received $100,000 from F Australia for director’s fees but apparently was not taking any director’s fees as at October 2013. The wife is the company director responsible for the operations of F Australia Pty Ltd. In her affidavit also filed 4 October 2013 (at [105]) the wife says that the business she is managing is performing poorly. She asserts the business has been performing poorly since the husband left and for the financial year ending 30 June 2013, the business made a loss of $222,086. F Australia relies on four major clients for the majority of its business and there has been a significant fall in ordering from those four major clients since the husband left Australia. The wife’s evidence is that the husband has set up a company operating out of Hong Kong which seems to be in competition with the wife’s operation. The wife is fearful that the husband will use his influence with F Australia’s major customers to transfer business to a business in Australia called Business CC which is operated by the husband’s sister and brother-in-law.
The wife’s expenditure (including expenditure in relation to the two children) is $11,516 per week. The wife’s expenditure consists of $1,000 in rent; mortgage commitments weekly of approximately $1,850 and asserted personal expenditure for herself and the children in the sum of $8,102 per week. The major part of that weekly expenditure arises from the assertion by the wife that she is subsidising losses incurred by F Australia in the approximate sum of $3,418 per week through drawing against loan facilities. Excluding corporate losses, Part N of the wife’s financial statement indicates that the wife (excluding corporate losses) is expending $1,354 per week for herself.
The wife has applied for lump sum child support but any order made in accordance with her application will still leave her with the substantial financial responsibility for the children.
The husband has failed in his duty of financial disclosure. I find that he is operating a business overseas and otherwise has access to significant assets.
JUST AND EQUITABLE
Based upon the findings made in relation to s 79(4) considerations, I find that a just and equitable order is as proposed by the wife; namely an adjustment of 70/30 in her favour. The overall result can be achieved by distributing the assets and liabilities of the parties between them in accordance with the following table:
Husband gets 30.0%
Assets
Item No.
Description
Percentage
Value
7
Shares with KGI Asia Limited
50%
$180,000
15
HSBC Hong Kong Account no. …33
100%
$614,415
16
Westpac Choice Account no. …33 (as at 28.6.13)
100%
$21,043
17
Westpac eSaver Account no. …53 (as at 31.5.13)
100%
$20,624
19
F International Pty Limited
100%
$52,664
22
Lexus (insurance funds paid by AAIMI)
100%
$41,767
26
Cash taken from F Australia Pty Ltd
100%
$186,858
27
Cash taken from joint accounts with St George
100%
$72,341
28
Bullion bars taken from G Super Fund
100%
$20,706
29
Cash transferred by the Husband to overseas bank accounts
100%
$250,000
30
Moneys paid by husband to Company Y in Suburb Z
100%
$17,840
Husband pays Wife
$419,410
Net Assets to Husband
$1,058,848
Wife gets 70.0%
Assets
Item No.
Description
Percentage
Value
1
B Street, Suburb E
100%
$1,600,000
2
O Street, Suburb R
100%
$790,000
3
CommSec Margin Loan account no. …73 and Share Portfolio (as at September 2013)
100%
$5,195
4
18,600 Telstra shares at 4.91 (as at 30/8/13)
100%
$91,326
5
1,202 ANZ Shares at 29.62 (as at 30/8/13)
100%
$35,603
6
CommSec Share Portfolio (as at 23/9/13)
100%
$4,162
7
Shares with KGI Asia Limited
50%
$180,000
8
ANZ Access Acount no. …58 (as at 23/9/13)
100%
$120
9
ANZ Online Savings Account no. …66 (as at 26/9/13)
100%
$98
10
St George Account no. …90 (as at 23/9/13)
100%
$0
11
St George Account no. …35
100%
$1,459
12
St George Account no. …01
100%
$0
13
St George Account no. …82 (as at 26/9/13)
100%
$327,288
14
13,023 Telstra Shares at 4.91 (as at 30/8/13)
100%
$63,943
18
F Australia Pty Limited
100%
$0
20
D Pty Limited
100%
$0
21
S Family Trust
100%
$260,703
23
Household Contents
100%
$5,000
24
Money owed to the Wife by F Australia Pty Limited
100%
$93,000
25
Toyota motor vehicle
100%
$5,000
31
Superannuation in G Super Fund
100%
$572,436
32
Superannuation in G Super Fund
100%
$410,417
Liabilities
Item No.
Description
Percentage
Value
33
Mortgage to St George secured over Suburb E property
100%
$1,420,381
34
Mortgage to St George secured over Suburb R property
100%
$555,101
35
Debt to Ms BB including interest
100%
$305,000
36
Wife’s credit card debt
100%
$29,941
37
Outstanding orthodontist fees for K
100%
$7,735
38
St George Loan Account no. …67 (as at 31.8.13)
100%
$75,950
39
Citibank Credit Card
100%
$406
Wife receives
$419,410
Net Assets to W
$2,470,646
Standing back, an order based upon this distribution of assets and liabilities is just and equitable.
CHILD SUPPORT
The wife seeks in her Amended Application filed 4 October 2013 an order pursuant to s 66G of the Act that the husband pay to the wife the sum of $215,650 within 14 days by way of lump sum child maintenance for the children of the marriage. At the hearing, counsel for the wife attempted to make some mathematical alteration to the calculation of the amount sought but that was not permissible given the matter was proceeding on an undefended basis upon documents that had been served upon the husband.
Does Division 7 Part VII apply in this case?
The wife asserts that the court has jurisdiction to make a child maintenance order under the Family Law Act 1975 (Cth) (“the Act”) because in this case an application could not be properly made to the Child Support Registrar for an assessment in respect of the costs of the children.
Section 66E of the Act is in the following terms:
Child maintenance order not to be made etc. if application for administrative assessment of child support could be made
(1) A court having jurisdiction under this Part must not, at any time, make, revive or vary a child maintenance order in relation to a child on the application of a person (the applicant ) against, or in favour of, a person (the respondent ) if an application could properly be made, at that time, by the applicant under the Child Support (Assessment) Act 1989 for the respondent to be assessed in respect of the costs of the child, or vice versa.
(2) Subsection (1) has effect whether or not an application for administrative assessment of child support for the child has in fact been made (whether by the applicant, the respondent or another person).
(3) This section does not apply to proceedings under regulations made for the purposes of section 110 or 111A. [emphasis added]
The question to ask is, could an application for administrative assessment properly be made at the date a child maintenance order is proposed to be made?
Relevantly, s 25(d) Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”) provides:
A parent (the applicant) of a child may apply to the Registrar .... for administrative assessment of child support for the child if:
....
(d) if either parent of the child is not a resident of Australia on the day on which the application is made – the application meets the requirements of section 29A and 29B. [1]
[1] Section 29B of the Assessment Act is not relevant as the wife is resident in Australia
Section 10 of the Assessment Act provides:
For the purposes of this Act, a person is a resident of Australia on a day if on that day the person is a resident of Australia for the purposes of the Income Tax Assessment Act otherwise than because of section 7A, subparagraph (2) of that Act.
Section 29A of the Assessment Act is in the following terms:
Person by whom child support is payable must be Australian resident or resident of reciprocating jurisdiction
(1) This section applies if:
(a) an application is made under section 25 .... for a parent to be assessed in respect of the costs of the child; and
(b) the parent is not a resident of Australia on the day on which the application is made.
(2) The Registrar must determine whether child support is reasonably likely to be payable by the parent.
(3) If the Registrar determines that child support is reasonably likely to be payable by the parent, the application is taken to have been properly made only if:
(a) subsection 24(2) does not apply in relation to the child (payee of child support resident in reciprocating jurisdiction); and
(b) the parent is a resident of a reciprocating jurisdiction on the day on which the application is made.
Note: If an application is not properly made, the Registrar must refuse the application under section 30.
Section 24 of the Assessment Act is in the following terms:
Children in relation to whom applications may be made
(1) Application may be made to the Registrar for administrative assessment of child support for a child only if:
(a) the child is:
(i) an eligible child; and
(ii) under 18 years of age; and
(iii) not a member of a couple; and
(b) except in a circumstance referred to in subsection (2), either or both of the following subparagraphs applies or apply in relation to the child:
(i) the child is present in Australia on the day on which the application is made;
(ii) the child is an Australian citizen, or ordinarily resident in Australia, on that day.
(2) Paragraph (1)(b) does not apply to an application for administrative assessment of child support if:
(a) all of the following apply:
(i) the application is made under section 25 for a parent to be assessed in respect of the costs of the child;
(ii) the parent of the child is a resident of a reciprocating jurisdiction;
(iii) the Registrar has not determined under section 29A that child support is reasonably likely to be payable by the parent; or
(b) both of the following apply:
(i) the application is made under section 25A by a non-parent carer;
(ii) the non-parent carer is a resident of a reciprocating jurisdiction.
The Full Court in Peters & Peters and Ors (2012) FLC 93-511 at [21] to [30] discussed the inter-relationship between s 24, 25, 29A and 29B[2] of the Assessment Act. The Full Court comments at [28]: “The complex sections of the child support legislation to which we have referred are not easy to interpret...”.
[2] s 29B is not relevant in the circumstances of this case
Although I have not had the advantage of argument, it seems s 29A(3)(a) of the Assessment Act is otiose. Section 29A(3) is predicated on the condition that the Registrar has made a determination that child support is reasonably likely to be payable by the parent. The application is taken to have been properly made only if, inter alia, ss 24(2) does not apply. However, ss 24(2)(a)(iii) provides that the exception provided by ss 24(2) is only available if, inter alia, the Registrar has not determined under s 29A that child support is reasonably likely to be payable by the parent. It is difficult to see how in those circumstances, s 29A(3)(a) adds anything because ss 24(2) will always not apply to the circumstances described by s 29A(3).
The jurisdictional issues in this case can be answered by considering whether the father is a resident of Australia and, if not, whether the father is a resident of a reciprocating jurisdiction.
In deciding whether or not the husband is a resident of Australia for the purposes of child support, relevant indicators are the reason the husband left Australia; the amount of time spent overseas; the location of assets and property and the current source of the husband’s income.
The husband became an Australian citizen in 1997.
On 13 September 2012 the husband transferred $250,000 from his bank account to a bank account overseas. On this date the husband also left the matrimonial home. The wife attempted to contact the husband to find out where he was on 14 September 2012 but he did not respond.
On 16 September 2012 the child H spoke to the husband on the phone and asked his whereabouts but the husband did not disclose where he was. The wife says she received no further contact from the husband until his return to Australia on 4 March 2013.
The husband resigned from F Australia on 2 October 2012 and the following day a staff member of F Australia phoned the mother expressing concern because the husband had not come to work for many days, had not responded to urgent requests for deliveries and had his phone disconnected. The wife was contacted by Suburb X on 22 October 2012 and was informed that the police had “found out that [the husband] has left Australia to China”. It was, however, a contemporaneous representation of knowledge of the police and s 66A Evidence Act 1995 (Cth) can be relied upon to exclude the hearsay rule.
On 4 March 2013 the husband returned to Australia for a brief period where he obtained legal representation to attempt to negotiate a property settlement. However, despite the wife’s solicitors repeated requests to the husband’s solicitors to provide them with disclosure as to the husband’s financial circumstances (on 27 March, 5 April, 17 April 2013), no responses were received.
The wife’s solicitor’s sent a letter to the husband’s lawyers on 12 April 2013 enclosing letters from the OSR regarding outstanding Land Tax and requesting that the husband pay this outstanding Land Tax as soon as possible. The wife’s solicitors received no response to this letter and despite sending further correspondence requesting an urgent response, no response was received.
On 17 April 2013 the wife received a skype message from the husband in the following terms:
Hi, you are more than welcome to visit our booth on [Chinese City DD exhibition] if you are in [City DD] now, the booth number is …, contact …. products are … and … .
(see page 430 of Exhibit SS to the affidavit of the wife sworn 4 October 2013).
On 19 April 2013 Churchill Lawyers sent a letter on behalf of the husband indicating that he wished to finish these proceedings amicably and as soon as possible and advised that he accepted all the proposed orders sought by the wife in the application that she had then filed. The difficulty for the wife however was that the husband was thereafter non responsive through his lawyers or otherwise in terms of concluding any settlement arrangements.
On 26 April 2013 the wife was advised by Mr EE, with whom the husband was staying in Australia at the time, that the husband had gone back to China. The wife did not call Mr EE as a witness. What Mr EE said to the wife is also admissible firsthand hearsay. The wife’s solicitors wrote to the husband’s solicitors seeking clarification as to whether the husband had returned to China. The wife’s solicitors received no response.
On 15 May 2013 the husband paid $8,040 from his Citibank credit card to Company Y located in Suburb Z. He paid a further $9,800 to this company on 16 May 2013. The purpose of the payments is unclear, as is where the husband was at the time of these transactions.
On 24 May 2013 the wife’s solicitor’s received a Notice of Ceasing to Act from the husband’s solicitors.
The husband is the sole shareholder of the company F International Pty Limited which is registered in Hong Kong. The company has a bank account in Hong Kong.
Counsel for the wife tendered the husband’s Westpac Banking Corporation account in Australia. The husband last operated that account in September 2012. The balance in that account in excess of $20,000 has only been affected by interest and bank charges since that time. Apart from the occasion previously referred to, the husband has not used his Australian visa card during the months in 2013, covered in Exhibit 1.
In summary, the husband left Australia for China a few months after separation, and apart from the one month in 2013, the husband had been in China for 12 months at the date of the hearing. He has not had any meaningful contact with his children. He has also transferred large sums of money into overseas bank accounts and has made no contribution to any mortgage repayments or outgoings on the parties’ property in Australia since the separation. His resignation from his position at F Australia is consistent with an intention to no longer work and reside in Australia, particularly considering he has since established a similar business which is registered and run from overseas. There is evidence from both the police and a house mate that he is in China.
The wife is severely hampered in presenting evidence to the court about these matters given the husband’s lack of communication. In those circumstances it is permissible to draw inferences in the wife’s favour. All of the evidence that the wife has been able to present to the court points in the direction of the husband leaving the marriage and his family; cutting off all communication with them and relocating assets overseas. The husband’s whereabouts are currently unknown to the wife. I find that the husband is no longer a resident in Australia. It is possible that he is residing in Hong Kong (which is a reciprocating jurisdiction) but on balance it is more probable that he is living in China (which is not a reciprocating jurisdiction) (see Child Support (Registration & Collection) Regulations 1988, Schedule 2, Regulation 3A).
In this case, s 25(d) of the Assessment Act provides that an application for assessment of the costs of the children under the Assessment Act can properly be made if the requirements of s 29A of the Assessment Act are met. Section 29A(3)(b) is not satisfied because the father is not a resident of the reciprocating jurisdiction.
Also, even if the husband was resident in a reciprocating jurisdiction, given the history of the husband’s failure to comply with court orders and to give financial disclosure, there is a strong argument, that the Registrar would not be able to determine that the child support is reasonably likely to be payable by the father (s 29A(3) of the Assessment Act).
It follows that the prerequisites required by s 66E of the Act to exclude the court’s jurisdiction under Division 7 Part VII of the Act do not exist in this case and that jurisdiction may be invoked by the wife.
Child maintenance application under the Family Law Act
Section 66G of the Act provides that, if it otherwise has the power to make a child maintenance order, the Court can make such order for child maintenance as it thinks proper.
Sections 66B and 66C of the Act set out respectively the objects and principles applicable when considering an application of this nature. There is a need to ensure that the children’s proper needs are met from reasonable and adequate shares in the income earning capacity, property and financial resources of both parents, and that the parents share equitably in the children’s support, and that that duty has priority over all commitments of the parents, other than commitments necessary to enable the parent to support him or herself.
Section 66H of the Act requires me to consider the financial support necessary for the children’s maintenance and to determine the respective financial contributions that each party should make towards the children’s needs.
Section 66K of the Act sets out the matters which the court must take into account when considering the respective financial contributions each of the parents should make towards the children’s financial support.
Section 66J of the Act sets out the matters the court is required to take into account when considering the financial support necessary for maintenance of the children.
The wife will receive 70 per cent of the known net assets of the parties.
I have set out above the wife’s financial situation when discussing s 79(4)(d) – (g) matters.
Part N of the wife’s financial statement asserts she is expending $3,329 per week for the two children. The major component of the amount claimed for the children relates to educational expenses of $1,957 per week together with “children’s activities” of $173 per week. On page 14 of her financial statement and in the wife’s affidavit filed 4 October 2013 at paragraphs 113 to 118, the wife breaks down the educational expenses and the future schooling expenses for H and K and the costs of their special needs in relation to food.
At paragraph [118] of the wife’s trial affidavit she estimates the total cost of the children until each complete year 12 to be in the sum of $431,300. Counsel for the wife during the hearing attempted to correct that figure by increasing it to $496,000. This was said to have arisen from an obvious mathematical error in paragraph 115 of the affidavit where the wife calculated a weekly figure of $160 per week to equate to a total of $1,200 until both children complete year 12, whereas the actual figure should have been $66,000. I accept that that is a clear mathematical error which would have been obvious to the husband upon him reading the affidavit and would have allowed him to recalculate the figure in paragraph [118] of the wife’s affidavit. The more fundamental difficulty with the calculation in paragraph 118 is that the total figure for school fees for each child to complete year 12 is rubbery. The wife had estimated $200,000. That estimate is not supported by the schedule of fees for School FF at tab 51 of Exhibit SS to the wife’s affidavit. A calculation based on those documents would indicate that the school fee figure is more likely to be in the range of $154,000 (taking into account a 5 per cent per annum increase in school fees in the forward years).
This sum excludes sundry charges for things such as excursions and school activities. These sundry charges for the children until they complete year 12 are estimated by the wife to be a further $11,000. Also, the wife intends to send both children on a “GG School Program” in years 10-12. This cost is estimated at a total of $36,000.
The wife states the cost of food for the children to be an average of $187.50 per child per week as the children have food allergies necessitating the purchase of gluten free, yeast free, dairy free, egg free, organic foods. H suffers from stress, disassociation and candida and is currently treated by a psychologist and naturopath. Her medical costs include acupuncture, herbs and physiotherapy.
Both children also have eye conditions requiring special contact lenses at a cost of $600 a pair, usually two times per annum. The children’s combined medical, dental and optical expenses are estimated by the wife at $150 per week.
The wife’s calculation of a total amount of $180,000 for the children’s living expenses to the end of year 12 is roughly consistent with the weekly expenses that she set out in Part N of $1,372 per week ($3,329 - $1,957) or approximately $700 per week per child for living expenses excluding educational expenses. Notwithstanding the lifestyle to which the children may have become accustom, the weekly amount claimed by the wife for the children is at the outer limit of reasonable need.
Taking into account the error in the wife’s calculation in respect of school fees, and allowing the living expenses as claimed, the assessment of the costs of the children to the end of year 12 is about $450,000 ($496,000 - $200,000 + $154,000).
The husband’s property and financial resources after an order is made under s 79 of the Act, are set out in the table set out above. The husband has substantial resources in the form of Telstra Shares, a HSBC bank account in Hong Kong, two Westpac bank accounts and his interest in F International and the S Family Trust. The husband transferred in excess of $250,000 cash to overseas bank accounts. Following distribution of the assets and liabilities of the parties in accordance with the orders made above, the husband will be left with net assets of $1,058,848. I accept that the husband has been successful in the past in his business and I have inferred that he is currently successful in his business operating in China and Hong Kong and will continue to be so in the future.
Section 66J(2)(a) of the Act is in the following terms:
Matters to be taken into account in considering financial support necessary for maintenance of child
....
(2) In taking into account the proper needs of the child the court:
(a) must have regard to:
(i) the age of the child; and
(ii) the manner in which the child is being, and in which the parents expected the child to be, educated or trained; and
(iii) any special needs of the child;
As at the date of the hearing, H was 17 and K was 13 years old.
In this case, both parties made the decision to put the children into a private school where they expected to spend a significant sum of money. The total school expenses for the two children until they complete year 12 are in the range of $154,000.
The children do not have any income, any earning capacity, property or financial resources. No assets are held for the benefit of the children that are capable of producing income.
Section 66P(1)(a) of the Act provides the court with power in proceedings for a child maintenance order to make an order payment of a lump sum, whether in one amount or by instalments. However, s 66K(5) of the Act provides that the court must consider the capacity of the liable party to provide maintenance by way of periodic payments before considering the capacity of that party to provide maintenance by way of a lump sum payment. The rationale for this is set out in cases such as Luckie & Luckie (1989) FLC 92-036 and Bendeich & Bendeich (1993) FLC 92-355. Whilst the husband does have the capacity to make periodic payments in terms of his financial resources, the likelihood of the husband committing to making those payments is dubious. The husband has left Australia and failed to communicate with the wife and children. The husband has failed to make any payment towards the mortgages and outgoings of the parties’ property. The husband has not paid any amount to support the children to date, although he has left a significant portion of the parties’ financial resources in the control of the wife. The husband does not seem to be concerned with his responsibilities in Australia, and this is also evinced by his failure to correspond with the wife’s solicitors; his failure to sign the relevant documents in respect of the mortgage in accordance with the orders previously made by this court; his failure to engage with the wife in property settlement or comply with court orders. I am not satisfied that the husband will make regular payments if a periodic order is made. As I have indicated, it is likely the husband is prosperously engaged in business in China and Hong Kong.
In these circumstances, it is proper to make a lump sum order.
Conclusion in respect to lump sum child maintenance
The wife has business skills and an earning capacity. She also has 70 per cent of the known assets of the parties. It is not proper for the husband to be required to pay the whole of the costs of the children. The husband has 30 per cent of the known assets of the parties and a business operation overseas in respect of which he has given no disclosure. Consequently I do not have to be particularly careful when making assumptions about what is his current financial situation.
The lump sum amount that the wife seeks, on the expenses as submitted by the wife (as corrected for mathematical error), represents 48 per cent ($215,650 ÷ $450,000) of the costs of the children until they complete year 12. In the circumstances I think it is appropriate that the husband pay the amount sought by the wife by way of lump sum child maintenance and the wife be otherwise responsible for the maintenance of the children.
Accordingly a lump sum order for child maintenance will be made in the sum of $215,650 as sought by the wife.
COSTS
Section 117(1) of the Act provides that each party to proceedings under this Act shall bear his or her own costs. Section 117(2) of the Act provides that a cost order can be made as the court considers just. Section 117(2A) of the Act sets out matters to which the court should have regard.
The financial circumstances of each of the parties have been canvassed in these reasons. Neither party was in receipt of legal aid. The husband failed to engage in any meaningful way in the proceedings and his conduct put the wife to the expense of pleading her case in considerable detail. The husband purported to make a written offer on 19 April 2013 but as earlier indicated, did nothing to conclude that property settlement.
Whilst the wife was not wholly successful in obtaining the orders that she sought, she was substantially successful.
Having regard to those matters, it is just that the wife have a cost order made in her favour for the proceedings on a party/party basis to be agreed in writing or otherwise assessed.
I certify that the preceding one hundred and eighty-five (185) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 11 June 2014
Associate:
Date: 11 June 2014
SCHEDULE 1
Documents
Wife’s Amended Initiating Application filed 4 October 2013;
Wife’s Financial Statement filed on 4 October 2013;
Wife’s Financial Questionnaire filed on 5 June 2013;
Wife’s Affidavit filed on 4 October 2013;
Affidavit of Service filed on 11 October 2013;
Orders and Directions
Orders made by the Court 22 February 2013;
Directions made on 12 June 2013;
Directions made on 2 October 2013;
Valuations
Affidavit of [Mr HH] filed on 2 October 2013;
10.Affidavit of [Mr JJ] filed on 2 October 2013;
11.Affidavit of [Mr KK] filed on 2 October 2013.
SCHEDULE 2
Orders sought by applicant wife
The Court notes that the following words have the following meanings for the purpose of these Orders:-
1.1"[Suburb J]"` means the property at [C Street, Suburb J], registered in the name of [D Pty Ltd] as Trustee for the Trust as more fully described in Folio Identifier … .
1.2"the Home" means the property at [B Street, Suburb E], registered in the parties' joint names as joint tenants as more fully described in Folio Identifier … .
1.3"[F] Australia" means the company [F] Australia Pty. Limited ACN … of which the husband and the wife are the directors and each own 3,000 of the 6,000 issued ordinary shares.
1.4"the Trust" means the [S] Family Trust established by Deed dated 1 July 2009 of which [D] Pty. Limited is the Trustee and the husband is the appointor.
1.5"[D Pty Ltd]" means the company [D] Pty. Limited ACN … of which the husband and the wife are directors and the husband is the holder of the one issued ordinary share.
1.6"the Companies" means [F] Australia and [D Pty Ltd].
1.7"the Super Fund" means the [G] Superannuation Fund established by Deed dated 3 May 2007 and amended by Deeds of Variation dated 20 November 2010 and 8 November 2011 and of which the husband and the wife are the only members.
1.8"[G] Group" means [G] Group Pty. Limited ACN … of which the husband and the wife are shareholders and directors and which is the Trustee of the Super Fund.
1.9"The Husband's Australian Bank Accounts" means the following bank accounts held in the husband's sole name:
1.9.1Westpac Choice account number …33
1.9.2Westpac eSaver account number …53
1.10"The Parties' Joint Accounts" means the following bank accounts held in the joint names of the parties:
1.10.1St. George Account number …35
1.10.2St George Account number …01
1.11"The St George Loan Account" means St George Loan Account number …67 held in the joint names of the parties
1.12"The Margin Loan" means the CommSec Margin Loan Account number …73 held in the husband's sole name.
That an Order by way of alteration of property interests pursuant to s79 of the Family Law Act 1975 (Cth) be made in terms of paragraphs 2 to 15 of this document.
That the husband forthwith do all acts and things and sign all documents necessary to transfer and assign to the wife his interest in the Home including signing and handing to the wife a Transfer, to be prepared by the solicitor for the wife, of his interest in the Home within seven days of this Order and of the Transfer being served upon him and that he thereupon redeliver the said Transfer duly executed to the solicitors for the wife, Abrams Turner Whelan Family Lawyers.
As and from the date of receipt of the Transfer of the husband's interest in the Home to the wife, the wife shall be responsible for all mortgage payments, statutory rates and charges, other utilities, insurances, outgoings and expenses in relation to the property incurred prior to the date of the sale, shall make all such payments as and when they fall due and the wife hereby indemnifies and shall keep forever indemnified the husband in respect of all such liabilities in relation to the property.
That within seven days from the date of these Orders and of the requisite documents being served upon him and simultaneously:-
23.1The husband shall do all acts and things and sign all documents presented to him and thereupon redeliver such documents duly executed to the wife's solicitors, Abrams Turner Whelan Family Lawyers, to:-
(a)resign all offices held by him in the Companies but shall first, if called upon to do so, vote at any meetings of members and directors thereof in favour of such resolutions as the wife may direct to convert the Companies to single shareholder/director companies;
(b)transfer to the wife the whole of his shares and any other interest he may have in the Companies;
(c)transfer to the wife the whole of his interest in the Trust and resign and remove himself from all positions as appointor in relation to the Trust in favour of the wife;
(d)assign to the wife all credit loan accounts standing in the husband's name and the parties' names jointly in the Companies and/or the Trust;
(e)transfer to the wife the entirety of his interest in the Husband's Australian Bank Accounts;
(f)transfer to the wife the entirety of his interest in the Parties' Joint Accounts;
(g)transfer his interest in the Margin Loan and his share portfolio held with Commonwealth Securities to the wife;
(h)transfer to the wife the entirety of his interest in the St George Loan Account;
(i)transfer his 13,023 Telstra shares to the wife.
23.2The wife will do all acts and things and sign all documents necessary to:-
(a)assume from the husband liability for all debit loan accounts standing in the husband's name and/or the parties' names jointly in any of the Companies or the Trust;
(b)indemnify and keep indemnified the husband in respect of all liabilities in relation to the Companies and/or the Trust, whenever and however arising, including but not limited to all taxation liabilities of the entities or either party personally arising in connection with any interest, loan account, office or employment in relation to the entities;
(c)indemnify and keep indemnified the husband in respect of all liabilities in relation to the Margin Loan and the St George Loan Account.
In the event that the husband fails to execute any documents required pursuant to Paragraphs 3, and/or 5.1 of these Orders and deliver them to the wife's solicitors within seven days of being provided with the said documents, that pursuant to Section 106A of the Family Law Act, a Registrar of the Family Court of Australia at Sydney be appointed to execute in the name of the husband all and any such documents.
That the furniture, furnishings and effects presently situated in the Home shall be retained by the wife.
That within seven days of the date of these Orders, the husband pay to the wife the sum of $377,743.
That in accordance with Section 90MT(1)(b) of the Family Law Act 1975:-
27.1The wife is entitled to be paid the specified percentage of each splittable payment out of the husband’s interest in the Super Fund;
27.2The husband's entitlement, and the entitlement of such other person to whom a splittable payment may be made, to payments out of the husband’s interest in the Super Fund is correspondingly reduced by force of this order.
27.3the specified percentage for the purpose of this paragraph is 100%.
27.4this Order has effect from the operative time and the operative time is four business days after service of this Order on [G] Group.
27.5[G] Group shall do all acts and things and sign all documents as may be necessary to:-
(a)calculate, in accordance with the requirements of the Family Law Act, 1975, the entitlement created by the preceding paragraph of this Order;
(b)pay the entitlement whenever a splittable payment becomes payable out of the husband’s interest in the Super Fund;
That the husband be and is restrained from requesting the [G] Group, in accordance with Regulation 7A.06(2) of the Superannuation Industry (Supervision) Regulations 1994, to rollover or transfer the transferable benefits to another superannuation fund.
That upon [G] Group giving effect to paragraph 10 of these Orders, the husband will:-
29.1tender his resignation as director of [G] Group;
29.2transfer to the wife his shares in [G] Group; and
29.3resign as a member of the Super Fund.
That, as between the husband and wife, and subject to these Orders, the husband and wife shall each respectively retain all interest in and entitlement to:-
30.1All personal property now in his/her respective possession or control;
30.2All shares, debentures, units in unit trusts, bank, building society or credit union accounts standing in his/her sole name respectively;
30.3All interests in life insurance policies and superannuation funds standing in his/her sole name respectively.
That subject to the above Orders:-
31.1The husband hereby indemnifies the wife from and in respect of all actions, claims, suits and demands as may be made against the wife in relation to all liabilities in the name of the husband or in his name jointly with any other person;
31.2The wife hereby indemnifies the husband from and in respect of all actions, claims, suits and demands as may be made against the husband in relation to all liabilities in the name of the wife or in her name jointly with any other person.
That pursuant to Section 66G of the Family Law Act (1975) Cth, the husband pay to the wife the sum of $215,650 within 14 days of the date of these orders by way of lump sum child support for the children of the marriage, [H], born on … 1996, and [K], born on … 2000.
That subject to the above Orders, each of the husband and the wife release the other from all actions, proceedings, claims, demands, debts, costs and expenses whatsoever and howsoever arising which either of them had or may have against the other for or by reason of or in respect of any act, cause, matter or thing.
In the event that either party refuses or neglects to execute any document or documents whatsoever pursuant to these Orders the Registrar of the Court be appointed pursuant to Section 106A to execute such documents in the name of such party and do all acts and things necessary to give validity to the operation of the said documents.
Pursuant to section 81 of the Family Law Act the parties intend these orders to finally determine all financial relations and issues between them and avoid further proceedings between them.
That the husband pay the wife's costs of and incidental to these proceedings.
Key Legal Topics
Areas of Law
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Family Law
Legal Concepts
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Costs
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Remedies
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Statutory Construction
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Jurisdiction
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Procedural Fairness
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