Sanderson and Sanderson (No 2)
[2017] FamCA 231
•13 April 2017
FAMILY COURT OF AUSTRALIA
| SANDERSON & SANDERSON (NO. 2) | [2017] FamCA 231 |
| FAMILY LAW – CHILD MAINTENANCE – Application for adult child maintenance by the wife – Where the child is the step-child of the husband – Where there was no evidence as to the considerations in s 60H, s 60L or s 60M of the Family Law Act 1975 (Cth) - Application dismissed. FAMILY LAW – CHILD SUPPORT – Application for child support departure by the wife – Where the special circumstances of the case to warrant such a departure as sought by the wife in relation to periodic child support – Where the special circumstances warrant a ground for departure in relation to the child’s school fees – Where it is just and equitable to make such an order. FAMILY LAW – PROPERTY – INTERIM PROPERTY SETTLEMENT – Where the husband seeks that joint funds in a controlled money account be disbursed – Where in the circumstances of the case it is not possible to make any estimate of the property pool – Application dismissed. FAMILY LAW – PROPERTY – INTERIM ORDERS – Where both parties assert the other is not an appropriate person to manage the parties’ company – Where the only appropriate resolution is to appoint a Receiver to manage the company – Where the orders provide for the wife to nominate three potential professionals and the husband to choose one from this list. | |
| Child Support (Assessment) Act 1989 (Cth) ss 117, 124 Family Law Act 1975 (Cth) ss 66H, 66L, 66M, 80(1)(k) | |
| Family Law Rules 2004 (Cth) Part 20.6 |
| APPLICANT: | Mr Sanderson |
| RESPONDENT: | Ms Sanderson |
| FILE NUMBER: | NCC | 1455 | of | 2015 |
| DATE DELIVERED: | 13 April 2017 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Rees J |
| HEARING DATE: | 12 April 2017 |
REPRESENTATION
| THE APPLICANT: | In person |
| SOLICITOR FOR THE APPLICANT: | Carson & Associates (acting but did not appear) |
| COUNSEL FOR THE RESPONDENT: | Mr Batey |
| SOLICITOR FOR THE RESPONDENT: | York Law |
Orders
IT IS ORDERED
That the parties do all acts and things required to facilitate the appointment of a Receiver/Manager for the company, Company A Pty Ltd ACN …(“APL”) and to give effect to this order:
(a)That within 14 days, the wife provide to the husband’s solicitor a list of three proposed persons to be appointed as Receiver/Manager of APL to include the full name and address of the proposed person, details of the fees proposed to be charged and have attached the consent of the person to be appointed Receiver/Manager of APL.
(b)That within 14 days of the service on the husband’s solicitor of the list referred to above, the husband shall file and serve a document nominating the person he chooses to be the Receiver/Manager of APL. In the event that the husband does not make a nomination within the time provided, then the wife shall make the nomination.
(c)Upon the filing of the nomination the Court shall make orders in chambers for the appointment of the Receiver/Manager in the following terms:
(i)That (the nominated person) be appointed Receiver/Manager of APL.
(ii)That the Receiver/Manager have the powers given to a receiver by virtue of the provisions of s 420(2) of the Corporations Act 2001 (Cth).
(iii)That the costs of the Receiver/Manager be paid by APL and to the extent that there is any shortfall, jointly by the husband and the wife.
(iv)That the Receiver/Manager have liberty to apply on short notice for further directions.
That the husband’s application for interim property settlement contained in his Application in a Case filed 24 August 2016 be dismissed.
That the wife’s application for adult step-child maintenance contained in her response filed 25 August 2016 be dismissed.
That the wife’s application for a child support departure, in relation to periodic child support, contained in her response filed 25 August 2016 be dismissed.
That pursuant to s 124 of the Child Support (Assessment) Act 1989 (Cth), for the period from the date of these Orders until the child B born … 2004 completes her secondary schooling if that is later, the husband shall pay child support to the wife by way of payment of 50 per cent of the tuition expenses and school fees, costs of school uniforms and other compulsory school expenses referable to the child’s attendance at E School.
That the Conciliation Conference listed for 4 May 2017 be vacated.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Sanderson & Sanderson (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: NCC 1455 of 2015
| Mr Sanderson |
Applicant
And
| Ms Sanderson |
Respondent
REASONS FOR JUDGMENT
Mr Sanderson (“the husband”) and Ms Sanderson (“the wife”) are engaged in proceedings in relation to parenting and financial matters.
The financial matters concern a company, Company A Pty Ltd (“APL”) in which they are both the only shareholders and directors.
The proceedings were commenced in June 2015.
On 9 December 2016, their respective Amended Application in a Case, filed 24 August 2016, and Response to an Amended Application in a Case, filed 25 August 2016, were listed before Gill J. On my calculation, the husband sought 43 separate orders in his application and the wife sought 61 separate orders in her response.
His Honour heard those applications which related to the parenting proceedings, and the remuneration to be derived by each of the parties from APL. Specified financial applications were referred to be listed for hearing on another occasion.
Those interim applications were listed before me for determination. On my calculation, the husband seeks 20 separate orders and the wife seeks 57.
Those Applications fall into a number of broad categories:
· Applications relating to the control and day to day operations of APL.
· Applications relating to the disbursement, presumably by way of interim property settlement, of a fund of about $680,500 (plus accrued interest) being the proceeds of sale of the former matrimonial home, held in a controlled monies account by the wife’s former solicitors.
· An application for the appointment of a single expert to prepare financial accounts for APL.
· An application for adult child maintenance in relation to a child of the wife and a previous partner.
· An application for a child support departure order in relation to the parties’ child.
APPLICATIONS IN RELATION TO APL
Each of the parties seeks the effective control of APL. Each seeks to restrain the other from entering the premises or having any part in the conduct of the business of APL.
The husband alleges unwarranted interference in the running of the business by the wife. Before me, the husband said that the wife bombarded him with requests for information about things that had nothing to do with her. He asserted that the wife had, against the interests of APL, caused certain accounting expenses to be paid without reference to him. He asserted that the wife had refused to engage in the process of instructing the single expert valuer in relation to APL. He asserted that the wife had unilaterally withdrawn funds from the APL accounts to the effect that APL did not have sufficient funds to meet its expenses.
The wife alleged that the husband’s management of APL is irresponsible and puts the husband and the wife potentially in breach of their obligations as directors. The wife further alleged that she is concerned that the husband is attempting to reduce the value of APL or place APL in liquidation.
Counsel for the wife tendered documents which, it is asserted, demonstrate that the husband is using funds of the company to pay for his hobby of car rallying. The husband agreed that the draft financial statements for the year ended 30 June 2015, which are the only available financial statements, tend to show that in that year, when the company disclosed an operating profit of $239,436 after tax, the sums spent on rally cars and rallying were perhaps as high as $345,000. The husband said that the rallying was a promotional exercise by APL.
There was no evidence that the expenditure of such an amount, on what was essentially the husband’s hobby, had improved the performance of APL.
In addition, the depreciation schedule of the company shows a number of vehicles including two sports cars and a delivery truck used to transport the cars.
The wife further asserted that the husband’s credit card debts are also paid by APL, contrary to previous court orders. The husband denied that assertion.
The wife asserted that the husband’s legal fees in relation to his family law proceedings were being charged to APL and paid by APL. The husband denied that assertion.
The wife asserted that the husband had consistently failed to provide her with information on the day to day financial affairs of APL. The husband denied that assertion.
Those factual disputes cannot be resolved in an interim hearing without the benefit of cross-examination and without expert accounting evidence.
If the husband’s evidence of the wife’s interference with the day to day running of APL is accepted, she is not an appropriate person to have the sole day to day management of APL.
If the wife’s evidence of the husband’s interference with the day to day running of APL is accepted, he is not an appropriate person to have the sole day to day management of APL.
The only resolution to the dispute which seems appropriate is to appoint a Receiver/Manager to APL to manage APL and preserve its assets until the substantive proceedings are heard and determined.
The power to appoint a Receiver/Manager is found in s 80(1)(k) of the Family Law Act 1975 (Cth) (“the Act”). However, it is not within the permit of the Court to nominate an appropriate person to act as Receiver/Manager and it would be necessary for the parties to follow a process similar to that mandated by Part 20.6 of the Family Law Rules 2004 (Cth) (“the Rules”), noting that when an appropriate Manager has been agreed between the parties, the relevant order can be made in Chambers.
The husband agreed that, should it be determined that a Receiver/Manager be appointed, the appropriate machinery order is that the wife nominate three potential professionals to act in the position and he should choose which person is to be appointed.
Orders will be made in those terms, including an order that if the husband defaults on his obligation to nominate a Receiver/Manager in accordance with the orders, then the wife will be entitled to provide such nomination.
INTERIM PROPERTY SETTLEMENT
There is an amount of $680,552 (as at August 2016) in a controlled monies account. The husband seeks an order that the controlled monies account be distributed as to $250,000 to the husband and the balance to APL to meet tax liabilities arising out of previous orders.
The wife opposes the husband’s application and asks that the fund remains in the controlled monies account.
The principles for determining an application for interim property distribution are well known and do not need to be repeated here.
Firstly, it is necessary to ascertain the pool of assets and liabilities.
Each of the parties has filed a Financial Statement. Although it is clear that the significant asset of the parties is APL, neither party has, in their respective financial statements, deposed to any value of APL.
In those circumstances, it is not possible even to make a preliminary estimate of the net asset pool and therefore no order could be made for interim property settlement.
The husband’s application for interim property settlement will be dismissed.
APPOINTMENT OF A SINGLE EXPERT
Counsel for the wife indicated that, if a Receiver/Manager is to be appointed to APL, this application is not pressed.
ADULT STEP-CHILD MAINTENANCE
Ms F, who was born in 1998 and is now 18 years of age, is the child of the wife and her former husband. She has been living with the husband and the wife since 2000 when they commenced co-habitation.
The husband opposed any order that he pay maintenance for Ms F.
The wife seeks an order that the husband pay $400 per month adult child maintenance together with half of all school fees.
When the application was filed in 2016, Ms F was in Year 12. I assume that she has now finished secondary school.
The application is governed by s 66L and s 66M of the Act which are set out below:
66L Children who are 18 or over
(1) A court must not make a child maintenance order in relation to a child who is 18 or over unless the court is satisfied that the provision of the maintenance is necessary:
(a) to enable the child to complete his or her education; or
(b) because of a mental or physical disability of the child.
The court may make such a child maintenance order, in relation to a child who is 17, to take effect when or after the child turns 18.
(2) A court must not make a child maintenance order in relation to a child that extends beyond the day on which the child will turn 18 unless the court is satisfied that the provision of the maintenance beyond that day is necessary:
(a) to enable the child to complete his or her education; or
(b) because of a mental or physical disability of the child.
(3) A child maintenance order in relation to a child stops being in force when the child turns 18 unless the order is expressed to continue in force after then.
66M When step-parents have a duty to maintain
(1) As stated in section 66D, a step-parent of a child has a duty of maintaining a child if, and only if, there is an order in force under this section.
(2) A court having jurisdiction under this Part may, by order, determine that it is proper for a step-parent to have a duty of maintaining a step-child.
(3) In making an order under subsection (2), the court must have regard to these (and no other) matters:
(a) the matters referred to in sections 60F, 66B and 66C; and
(b) the length and circumstances of the marriage to, or relationship with, the relevant parent of the child; and
(c) the relationship that has existed between the step-parent and the child; and
(d) the arrangements that have existed for the maintenance of the child; and
(e) any special circumstances which, if not taken into account in the particular case, would result in injustice or undue hardship to any person.
Once the Court has determined whether an order should be made in accordance with the principles in s 66L and s 66M of the Act, it is necessary to determine what order should be made, pursuant to s 66H of the Act which provides:
66H Approach to be taken in proceedings for child maintenance order
In proceedings for the making of a child maintenance order in relation to a child, the court must:
(a) consider the financial support necessary for the maintenance of the child (this is expanded on in section 66J); and
(b) determine the financial contribution, or respective financial contributions, towards the financial support necessary for the maintenance of the child, that should be made by a party, or by parties, to the proceedings (this is expanded on in section 66K).
The wife’s evidence in relation to the matters which are required to be considered is contained at paragraphs 81 and 82 of her affidavit sworn 25 August 2016 where she deposed:
81.Although [the husband] has a strained relationship with [Ms F], she was for all intents and purposes treated as a child of our marriage, and [the husband] shared responsibility for her financial support during the marriage. By agreement with [Ms F’s] biological father…, [Ms F’s] surname was changed to [the parties’ surname] in or about 2011 and simultaneously [the biological father] ceased to pay child support in relation to [Ms F]. [The husband] agreed to and encouraged the making of these arrangements with [the biological father].
82.At paragraph 28 of his affidavit sworn 2 February 2016, [the husband] deposes to his preparedness to pay $400 per month and half of [Ms F’s] school fees, by way of child maintenance for [Ms F].
Thus there is no evidence to address the matters in s 66L of the Act.
The wife’s evidence as to Ms F’s reasonable expenses, and therefore the financial support necessary, is contained in her Financial Statement sworn 12 August 2016.
The wife, at Part N of her Financial Statement, deposed that the expenses for both children are $2,114 per week. No attempt has been made to differentiate between the expenses of the two children. It is not therefore possible to determine what Ms F’s reasonable expenses are.
Counsel for the wife conceded in the course of submissions that there was no evidence upon which an order as sought by the wife could be made.
The application will be dismissed.
CHILD SUPPORT DEPARTURE ORDER
The wife seeks a departure from the current periodic assessment and a further order that the husband pay half of the school fees incurred by their child’s attendance at a private school.
The application proceeds according to the provisions of s 117 of the Child Support (Assessment) Act 1989 (Cth) which are set out below:
117 Matters as to which court must be satisfied before making order
Court may make departure order
(1) Where:
(a) application is made to a court having jurisdiction under this Act for an order under this Division in relation to a child in the special circumstances of the case; and
(b) the court is satisfied:
(i) that one or more of the grounds for departure mentioned in subsection (2) exists or exist; and
(ii) that it would be:
(A) just and equitable as regards the child, the carer entitled to child support and the liable parent; and
(B) otherwise proper;
to make a particular order under this Division;
the court may make the order.
Grounds for departure order
(2) For the purposes of subparagraph (1)(b)(i), the grounds for departure are as follows:
(a) that, in the special circumstances of the case, the capacity of either parent to provide financial support for the child is significantly reduced because of:
(i) the duty of the parent to maintain any other child or another person; or
(ii) special needs of any other child or another person that the parent has a duty to maintain; or
(iii) commitments of the parent necessary to enable the parent to support:
(A) himself or herself; or
(B) any other child or another person that the parent has a duty to maintain; or
(iv) high costs involved in enabling a parent to spend time with, or communicate with, any other child or another person that the parent has a duty to maintain;
(aa) that, in the special circumstances of the case, the capacity of either parent to provide financial support for the child is significantly reduced because of the responsibility of the parent to maintain a resident child of the parent (see subsection (10));
(b) that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:
(i) because of high costs involved in enabling a parent to spend time with, or communicate with, the child; or
(ia) because of special needs of the child; or
(ib) because of high child care costs in relation to the child; or
(ii) because the child is being cared for, educated or trained in the manner that was expected by his or her parents;
(c) that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child:
(i) because of the income, earning capacity, property and financial resources of the child; or
(ia) because of the income, property and financial resources of either parent; or
(ib) because of the earning capacity of either parent; or
(ii) because of any payments, and any transfer or settlement of property, made or to be made (whether under this Act, the Family Law Act 1975 or otherwise) by the liable parent to the child, to the carer entitled to child support or to any other person for the benefit of the child.
The current periodic assessment is $220 per week. The wife seeks a departure of $1,000 per month or $230.76 per week. I do not consider that the “special circumstances of this case” merit a consideration of an application for an adjustment in periodic child support of $10.76 per week.
A further difficulty with the wife’s application arises from the fact that, as previously noted, there is no evidence of the child’s reasonable expenses contained in Part N of the wife’s Financial Statement.
The wife’s application for an interim departure order in relation to periodic child support will be dismissed.
The second aspect of the departure application relates to school fees. Tendered in the wife’s case was a document from the school indicating that the school fees for Year 7 are $18,877.
Before me, the husband’s position was that he would not pay the school fees for his child and that she should be removed from her school and enrolled in the state school system.
That has not always been the husband’s position.
The husband deposed that in May 2016 he was advised by the children’s school that the fees were in arrears of $3,687.88. He then paid $10,000 on account of school fees. The husband caused a letter to be written to the wife proposing that they each pay $5,000 in school fees in July and September of 2016 to ensure that the fees were paid.
In an affidavit sworn 4 February 2016, the husband deposed “I pay for half of the school fees…”.
There is no dispute that the child was enrolled in her present school jointly by both parents.
In so far as the husband asserts that he is unable to contribute to the school fees, I do not accept that assertion.
The only financial statement upon which the husband relied was that sworn by him on 24 August 2016 where he deposed to total income of $1,538 per week, or $80,000 per annum. At the time the husband swore to his Financial Statement, the husband was entitled, by order of the Court, to receive $20,000 per month from APL. Before me, the husband attempted to justify his statement of income by asserting that he did not, in fact, receive $20,000 per month and would not do so until the accounts for the financial year ended, I assume, 2017, were completed and the accountant made adjustments to reflect what money was drawn by way of salary and what by way of drawings. The amount of $80,000, the husband said, was his salary.
The husband has an obligation to make full and frank disclosure to the Court and to the wife. He has not made proper disclosure of the amount he received from the company.
The husband has re-partnered and he and his partner have bought a house together. There is no disclosure in the husband’s Financial Statement of the income of his partner or the contribution she makes to their joint expenses.
In Part N of the Financial Statement, the husband discloses weekly expenses of $500 with no attempt to indicate how that sum is calculated.
The amount of money spent by APL in pursuing the husband’s hobby is also relevant here, since the husband has been in a position to direct the earnings of APL as he chose in the past and to spend a very substantial amount of money on sport.
I am satisfied that the child was enrolled in her school because that was the desire of both of her parents. I am satisfied that the husband can afford to pay one half of her school fees in 2017 and continuing, as he was willing and able to do in 2016.
The “special circumstances” of the case are that the parents enrolled their child in the school because that was the education they envisaged for her. In addition, in 2016, the husband believed it was appropriate that he continue to pay one half of the school fees.
A ground for departure exists pursuant to s 117(2)(b)(ii) of the Child Support (Assessment) Act 1989 (Cth) – the child is being educated in the manner that was expected by both of her parents.
It is just and equitable and otherwise proper, for the reasons I have already expressed, that a departure order be made.
OTHER MATTERS
By order of Registrar George on 29 March 2017 the parties were ordered to attend a Conciliation Conference with a Registrar on 4 May 2017. At the end of the hearing before me, the husband indicated that he would be unable to attend this date, and the wife agreed that the date should be vacated if a receiver was appointed.
I certify that the preceding sixty-three (63) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Rees delivered on 13 April 2017.
Associate:
Date: 13/04/2017
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