SANSON and TAN

[2019] FCWA 43

JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA

ACT: FAMILY LAW ACT 1975

LOCATION: PERTH

CITATION: SANSON and TAN [2019] FCWA 43

CORAM: O'BRIEN J

HEARD: 15 JANUARY 2019

DELIVERED : 26 FEBRUARY 2019

FILE NO/S: PTW 5493 of 2018

BETWEEN: MR SANSON

Applicant

AND

MS TAN

Respondent

Catchwords:

SPOUSAL MAINTENANCE - Interim Orders - Turns on own facts.

CHILD SUPPORT - Urgent financial support pending administrative assessment.

Legislation:

Child Support (Assessment) Act 1989 (Cth)
Family Law Act 1975 (Cth)

Category: Not Reportable

Representation:

Counsel:

Applicant	:	Ms Oakley
Respondent	:	Ms Christie SC

Solicitors:

Applicant	:	Butlers Lawyers
Respondent	:	Lander & Rogers

Case(s) referred to in decision(s):

Hall & Hall (2016) FLC 93-709

Kelly & Kelly (No 2) (1981) FLC 91-108

Redman & Redman (1987) FLC 91-805

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

1By her application in a case filed on 16 October 2018, [Ms Tan] (“the wife”) seeks interim orders for spousal maintenance and child support. The basis of the orders sought by her in relation to child support was amended without objection in a Minute of orders tendered at the hearing before me on 15 January 2019. The application is opposed by [Mr Sanson] (“the husband”).

Brief background

2The husband is 43 years old. He lives in Perth, and describes himself as an entrepreneur. The wife turns 38 [early] 2019. She lives in [Country A], and describes herself as a [pianist]/manager. She is employed in a managerial role on a full‑time basis.

3The parties began living together in 2009 and were married in September of that year. They separated in February 2017 according to the wife, or in February 2018 according to the husband. They have two children, [Child A] born [in] 2010 and [Child B] born [in] 2013. Pursuant to interim orders made on 3 August 2018, the children live with the wife, have regular communication with the husband, and are to spend time with him in no fewer than one week of each four week period. The parenting proceedings between the parties are ongoing, and a single expert witness has been appointed.

4Both the parenting proceedings, and the more recently commenced financial proceedings, show every indication of being bitterly contested. They commenced in July 2018, and the parties have already spent something in excess of $250,000 in legal fees.

5In fairness to the parties and those representing them, the financial proceedings are complex. The brief summary below is sufficient for present purposes.

6On the wife’s case, the husband holds an interest in 15 separate corporate entities, including three of which he is the sole director and shareholder. He has a beneficial interest in three separate trusts, and she asserts through related entities a beneficial interest in two further entities. The wife alleges that the husband controls, or at the very least has access to, significant funds from the various entities and that he continues to make use of those funds without giving proper disclosure of them.

7On the husband’s case, his income is limited to the taxable income disclosed in his sworn financial statement. He disputes the wife’s assertion as to his continuing access to funds from the entities, saying that both he and the entities are presently in financial difficulties, and that reference by the wife to past business performance and access to funds does not accurately reflect his current circumstances.

8The wife, as noted above, is employed on a full-time basis by a company associated with her father. It is common ground that her father is both wealthy and generous. In addition to her employment, the wife travels regularly in pursuit of her passion of [music]. It is common ground that her pursuit of that passion is not remunerative.

9It is also clear from the evidence of each party that, prior to their separation, they enjoyed at the very least a very comfortable lifestyle.

10The husband says in essence that the wife is extravagant, and that in any event the lifestyle enjoyed by the parties prior to separation is no longer sustainable. The wife defends her spending habits as being no more than are appropriate to meet her reasonable needs and those of the children, and views with scepticism the husband’s claims of a deterioration in his own circumstances.

11The scenario, of course, is not uncommon. During counsel’s submissions, the wry observation of Barblett CJ many years ago that he had “never had a case of a farmer who is having a good season at the time that there was a maintenance claim against him” came readily to mind. [1]

Relief sought by the wife

[1] W & W (Unreported, Family Court of Western Australia, Barblett J, 19 December 1988) 13.

12The wife sought interim spousal maintenance in the sum of $1,392 per week.

13Pursuant to s 139 of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”) she sought, pending any assessment of child support:

(1)periodic child support in the sum of $1,297 per week, indexed to the CPI; and

(2)non-periodic child support in the form of payment of all costs associated with the children’s private schooling, extracurricular activities, medical costs, and travelling costs (including flights and accommodation) for she and the children to travel to and from Australia to facilitate the children spending time with the husband.

14In the alternative, she sought an order that the husband pay or cause to be paid the sum of $84,626.47 “with such payment to be characterised at the final hearing of the proceedings”.

15She sought a further order that the husband reimburse her in the sum of $29,677.15 for the children’s private school fees for semester one of the 2018/2019 school year, and proposed that, on the husband making the other payments sought, she would undertake not to use his supplementary credit cards “save and except for emergency purposes in relation to the children”.

16The wife’s Minute sought other orders for disclosure and the appointment of a single expert witness to value the husband’s interest in various business entities. Those matters were not pursued in submissions at the hearing, as I was told that the appointment of a single expert witness was in hand, and (I infer) the immediate issues in relation to disclosure were adequately addressed by orders made by me at a previous hearing. If I am mistaken in drawing that inference I have no doubt that will be brought to my attention, and can be rectified.

17The husband simply sought the dismissal of the wife’s application. When I queried that position with his counsel, I was told that the husband proposed to continue to pay $2,000 per calendar month to the wife on an interim basis, and that those payments should be characterised as child support and not spousal maintenance. The husband’s position in relation to the wife’s access to his supplementary credit cards was somewhat unclear. His counsel submitted that the wife should have no need to access those cards, and that she should stop doing so, but said that did not mean that the husband would cut off her access to them. Counsel conceded that I should not have regard to the wife’s current ability to access those credit cards in determining her reasonable needs and her own capacity to meet them.

Evidence relied upon

18The wife relied on her affidavits sworn on 4 October 2018 and 8 January 2019, and her financial statement sworn on 8 January 2019. She also relied on an affidavit sworn by [Mr B], a chartered accountant retained by her to prepare a report as to the interaction of the various corporate and trust entities, the degree of control by the husband over those entities, the cash flow between those entities and the husband particularly in certain specified months, and the husband’s likely sources of funds. While the affidavit was clearly relied upon on the basis that the expertise of Mr B rendered his opinions admissible, the required application under rule 15.51 had not been made, and the affidavit was filed without permission. Nevertheless, no objection was raised and the affidavit was accepted into evidence by consent.

19The husband relied on his affidavit sworn 8 January 2019, his affidavit sworn 21 November 2018, and his financial statement also sworn 21 November 2018.

20Various documents produced under subpoenae were tendered, again by consent.

The legal principles

Spousal maintenance

21Section 72(1) of the Family Law Act 1975 (Cth) (“the Act”) provides that a “party to a marriage is liable to maintain the other party, to the extent that the first mentioned party is reasonably able to do so, if, and only if, that other party is unable to support him herself or himself adequately….. having regard to any relevant matter referred to in s 75(2).”

22Any such liability is then “crystallised by the making of an order under s 74(1)”, [2]which provides that the court may make such order as it considers proper.

[2] Hall & Hall (2016) FLC 93-709, 81,450 [4] (‘Hall’).

23In exercising the power conferred by s 74(1), the court is required to take into account only those matters referred to in s 75(2).

24On an application for interim maintenance orders, “the evidence need not be so extensive and the findings not so precise” as on an application for a final order,[3] but the court cannot make such an order without finding on the balance of probabilities that the threshold requirement in s 72(1) is met, having regard to any relevant matter referred to in s 75(2).[4]

[3] Redman & Redman (1987) FLC 91-805, 76,081.

[4] Hall (2016) FLC 93-709, 81,450 [8].

25The reference to “financial resources of a party” in s 75(2)(b) “must involve something more than the expectation of benevolence on the part of another. But it goes too far to suggest that the party must control the source of financial support”.[5] It refers to “a source of financial support which a party can reasonably expect will be available to him or her to supply a financial need or deficiency”.[6]

[5] Ibid 81,456 [54].

[6] Kelly & Kelly (No 2) (1981) FLC 91-108, 76,803.

26“Whether a potential source of financial support amounts to a financial resource of a party turns in most cases on a factual enquiry as to whether or not support from that source could reasonably be expected to be forthcoming were the party to call on it”.[7]

Child support

[7] Hall (2016) FLC 93-709, 81,456 [55].

27Section 139(1) of the Assessment Act provides as follows:

“Where, at any time after an application has been made to the registrar for administrative assessment of child support for a child (whether or not the registrar has accepted or refused to accept the application) a court having jurisdiction under this act is of the opinion that the child is in urgent need of financial assistance, the court may order the payment of such periodic or other amount as the court considers appropriate.”

28Self-evidently, an order under s 139(1) can only be made after an application for administrative assessment has been made. An order, once made, has effect for the period specified in the order, and in any event ceases to have effect if a decision of the Registrar to refuse to accept the application for administrative assessment becomes final,[8] or when an amount of child support becomes payable under an administrative assessment.[9]

[8] Child Support (Assessment) Act 1989 (Cth) s 139(2).

[9] Ibid s 152(1).

29The purpose of s 139(1) is clear: to provide short-term maintenance in circumstances where the child is in urgent need of financial assistance, during a period in which administrative assessment has been sought but not yet concluded.

30There are no reported decisions, or binding authority, on the application of s 139.

31While there are similarities of purpose between s 139(1) of the Assessment Act and the provisions for urgent spousal maintenance in s 77 of the Act, those similarities do not extend to the wording of the sections. Under the Assessment Act, the need for final assistance for a child must be “urgent”; under the Act, the need for financial assistance for a spouse must be “immediate”. The Act contemplates circumstances where, in spousal maintenance proceedings, it is “not practicable in the circumstances to determine immediately what order, if any, should be made”; those circumstances are not contemplated in s 139(1) of the Assessment Act. In my view, therefore, binding authority in relation to urgent spousal maintenance is of no guidance in the determination of an application for urgent financial assistance for a child.

32The plain words of the section make it clear that the Court must first form the opinion that the relevant child is in urgent need of financial assistance. On clearing that threshold, the Court then has a broad discretion to order such payment as it considers appropriate, whether periodic or otherwise. The possibilities of a lump sum payment, or payments by way of indirect support other than by payment to the relevant parent, are clearly contemplated.

Matters for determination

33It is convenient to consider issues regarding the husband’s current financial circumstances, and his capacity to pay spousal maintenance and child support, together. Accordingly I propose, before turning to those issues, to deal firstly with the threshold question in the spousal maintenance claim, secondly with the question of the wife’s reasonable needs if that threshold is crossed, and thirdly with what might be loosely described as the “needs aspects” of the child support claim.

The spousal maintenance claim – the threshold question and the wife’s reasonable needs

34On the wife’s evidence, she receives income of $1,572 per week by way of salary, plus $25 per week from freelance [piano performances]. That is her only personal exertion income.

35In addition, she receives $466 per week paid or caused to be paid to her by the husband, being the amount he proposes to continue to pay, albeit characterised as child support. She receives the benefit of a further $900 per week in the form of expenses incurred by her on a supplementary credit card provided by the husband; as earlier noted, the husband’s counsel said that the wife did not need to use the supplementary card, and should stop doing so, but that the husband did not intend to cut off her access to it.

36The wife says that the expenses incurred by her on the card provided by the husband are in the nature of groceries, food and dining expenses for the children, other children’s expenses, and travel and transport expenses.

37On the wife’s evidence, she also receives the benefit of approximately $2,116 per week in the form of expenses incurred by her on supplementary credit cards provided by her father. She says that the expenses incurred by her on the cards supplied by her father are “psychological fees, taxi and transport expenses, travel expenses, pharmacy and clothes, and other personal expenses of the wife.”

38The wife says that she does not presently pay income tax, and that her eventual tax liability will be modest. She says that she pays rent of $858 per week. She otherwise claims expenses for herself totalling $2,092 per week, and for the children totalling $3,213 per week, inclusive of school fees.

39In her affidavit, the wife details loans made to her by her father to meet school fees and other expenses after separation. She says further that, during the course of the marriage, her father made significant loans to the parties, including some $386,000 towards the purchase of a property, [Property A]. In his affidavit sworn on 21 November 2018, the husband says that companies controlled by him owe a company controlled by the wife’s father an amount in excess of $3.2 million.

40It is against that background that the wife says, in her affidavit sworn on 8 January 2019, that her father “cannot continue to support [her] financially, particularly given the large sum of the loans from [her father to the parties] during the marriage, and the financial assistance he provided to [her] following separation.”

41The wife’s father did not give evidence. No issue was raised in that regard by counsel for the husband, other than as follows:

[MS OAKLEY] Now, in relation to the wife’s father- we know very little about what the arrangements are with the wife’s father; the court has no evidence from him. The wife produces no evidence, either in her tender bundles or through disclosure of anything which evidences the arrangement. We hear from the bar table that she doesn’t have any Hall & Hall type entitlement, and the husband is in no position to assess that. The other thing that the husband can say, and I don’t think this is contentious, is that the wife’s father made significant gifts to the wife, or to the parties, during the course of the relationship. The parties disagree about whether or not the purchase of [Motor Vehicle A] by the wife’s father, whether that was a gift. Subsequently, the wife said she sold it for $75,000, and that that is now a loan. There is no evidence about the terms of repayment if that is a loan, either from the wife or from her father.

42As earlier noted, it is common ground that the wife’s father is both wealthy and generous. It is also common ground that he has advanced loans to the parties and to entities controlled by the husband, with an undisputed expectation of repayment. For present purposes, any dispute between the parties as to whether the wife has a debt to her father associated with the purchase of Motor Vehicle A is irrelevant.

43The wife discloses in her financial statement her understanding that she is a beneficiary of [Trust A]. On the husband’s evidence, he is the sole director and shareholder of the corporate trustee of that Trust. The wife discloses no other financial resources.

44On the evidence presently available, I conclude on the balance of probabilities that the wife has no more than an ongoing “expectation of benevolence” on the part of her father. Such an expectation is not a financial resource for the purposes of s 75(2)(b).[10] It is, accordingly, irrelevant to a determination of the threshold question raised by s 72(1) and, if that threshold is crossed, the determination of what order is proper.

[10] Hall (2016) FLC 93-709, 81,456 [54].

45It is not suggested that the wife’s age, or any physical or mental incapacity for appropriate gainful employment, renders her unable to adequately support herself. On her case, that inability arises from her care and control of the children and associated issues, and the gap between her income and expenses which are reasonably to be incurred bearing in mind a standard of living that in all the circumstances is reasonable.

46As already noted, the wife’s income other than payments characterised by the husband as child support is $1,597 per week. She has minimal property in her possession, and my findings as to financial resources need not be repeated. She is exercising her earning capacity by working full-time; the fact that her [musical] pursuits are not remunerative does not alter that.

47She claims expenses to support herself in the sum of $2,092 per week, and pays rent for the accommodation occupied by her and by the children in the sum of $858 per week. She is not eligible for any relevant pension allowance or benefit, and wishes to continue in her role as a parent. She is not cohabiting with any other person in a relevant sense. There is no present child support assessment, although it is common ground that the husband will be liable under an assessment in the future, and that he is presently paying child support voluntarily.

48It is not suggested by either party that any other factor to be taken into account pursuant to s 75(2) is relevant to a determination of the threshold question, other than a consideration of the necessary commitments of the wife to enable her to support herself and the children. It is to that issue, primarily, that the husband’s submissions were directed; it was asserted on his behalf that the wife’s claimed expenses are excessive and that there is no shortfall between her income and more reasonable expenses.

49It is convenient at this point to review those expenses.

50I note in that regard that, while the wife says in her affidavit that she employs a full-time nanny at a cost of $196 per week, no specific expense in that regard is shown in her financial statement. Rather, in that statement she claims a childminding expenses of $129 per week, shown as an expense met for the children and accordingly to be considered in the context of the child support application. There is no evidence to support any inference that the identified expense is over and above the cost of the nanny, who the wife says is employed full‑time. I propose to disregard any costs associated with the nanny for the purposes of the spousal maintenance application.

51The wife gives evidence that she pays rent of $858. Counsel for the husband asserted that there had been no proper disclosure in relation to that expense, and was broadly critical of it. I note from his financial statement that the husband presently spends $910 per week on his own accommodation. I accept the wife’s evidence as to the amount of her rent, and accept that the expense is reasonable. No submissions were made suggesting that there should be any apportionment of that expense as between the wife and the children.

52The wife claims to spend $295 per week for food for herself. The husband claims to spend $50 per week for food for himself, and asserts that the wife’s claimed expense is excessive. His counsel submitted that a reasonable expense for the wife’s food would be $200 per week. I am prepared to accept that submission.

53The wife gave evidence that she spends $98 per week on household supplies, of which she apportions $73 to herself and $25 to the children. Counsel for the husband suggested that a more appropriate expenditure would be $20 per week. I note from his financial statement that the husband presently spends $50 per week on household supplies. I accept the wife’s evidence as to the amount she spends, and accept that the expense is reasonable.

54The wife claims to spend $21 per week on household repairs, apportioned as to $11 to her and $10 to the children. The husband submits that no such expenditure should be required given that the wife lives in rental accommodation. I do not accept that submission, but any such expense would not, in the absence of more detailed information, necessarily be incurred on a regular basis during the currency of an interim maintenance order and I propose to disregard it.

55The wife claims to spend $59 per week on telephone expenses, apportioned as to $53 to her and $6 to the children. The husband’s counsel submitted that “she should get a better package”, and that a more reasonable expense would be $20 per week. In the absence of any evidence as to the actual cost of telecommunication services in Country A, I accept the wife’s evidence and that the claimed expense is reasonable.

56The wife claims to spend $364 per week on fares and car parking, apportioned as to $113 to her and $251 to the children. No detailed breakdown is provided, and the husband appropriately points out that the wife does not presently have a motorcar. Adopting a necessarily robust approach, I am prepared to accept that an expenditure by the wife of $50 per week for her own fares and parking would be reasonable.

57The wife gives evidence that she spends $449 per week on medical dental and optical expenses apportioned as to $363 to her and $86 to the children. The husband simply submits that the amount claimed is excessive, but I note that in his financial statement he claims a similar expense of $120 per week. I am prepared to accept the wife’s evidence that the amount claimed is the expense which she actually incurs. She has given evidence in relation to her health issues, and there is no suggestion that they are other than genuine.

58The wife claims expenses of $76 per week for repairs of furnishings and appliances, apportioned equally between her and the children. The husband disputes that claimed expense. Any such expense would not, in the absence of more detailed information, necessarily be incurred on a regular basis during the currency of an interim maintenance order and I propose to disregard it.

59The wife says that she spends $153 per week on gifts, apportioned as to $90 to her and $63 to the children. The husband submits that claimed expense is excessive. In the circumstances, I am inclined to agree. I regard a weekly expenditure of $100 by the wife on gifts, apportioned equally between her and the children, as more appropriate.

60The wife claims expenses for the services of a psychologist and therapy in the sum of $231 per week, apportioned as to $185 to her and $46 to the children. The husband simply submits that the amount claimed is excessive. I am prepared to accept the wife’s evidence as to the costs actually incurred, and again there is nothing to suggest that they are other than genuine.

61The wife claims a weekly expense of $710 for international travel for piano performances, apportioned as to $495 to her and $215 to the children. The husband points to the fact that the wife’s musical pursuits are not remunerative, and submits that the expense is unreasonable in all the circumstances. I accept that submission. For the purposes of considering both applications seeking financial support from the husband, I propose to disregard those expenses.

62The balance of the expenses claimed by the wife were not challenged by the husband.

63It follows from what is set out above that I conclude that the wife’s reasonable expenses incurred for her own support total approximately $2,208 per week.

64I conclude accordingly that the wife has satisfied the threshold test by establishing, on the balance of probabilities, that she is presently unable to adequately support herself.

65I conclude further that her own reasonable needs, as distinguished from those of the children, would be met by the payment to her of the sum of $600 per week by way of spousal maintenance.

The child support claim

66As already noted, the threshold question in the child support claim requires a determination by the court that the children are in “urgent need of financial assistance”. Once that threshold is cleared, the court has a broad discretion to order such payment as it considers appropriate.

67It is common ground that the power to make such an order is enlivened; an application for an assessment has been made, and no assessment has yet issued. It is also common ground that any order made will, by its nature, be short-term, expiring as it must upon any assessment being issued. The balance of the wife’s departure application may then stand to be re-agitated after an assessment issues; self-evidently, it cannot be agitated now.

68The first question to be determined, therefore, is whether the children are in urgent need of financial assistance.

69The wife sets out in her affidavit and financial statement what she claims to be the reasonable expenses for the children. Leaving aside the amount shown in relation to school fees (to which I will turn separately), and the amount shown in relation to the children travelling internationally for her piano performances (in respect of which my observations above need not be repeated), she asserts that those expenses total $1,864 per week. She seeks periodic child support in the sum of $1,297 per week. She further seeks payment by the husband of the expenses associated with the children’s extracurricular activities (which she says total some $686 per week), and medical and associated expenses not covered by insurance (which she says total $86 per week).

70My earlier observations regarding the wife’s own income and her reasonable expenses to support herself do not require repetition. As already found, there is a shortfall in that regard, even before consideration of the reasonable needs of the children.

71The submissions on behalf of the husband in relation to the threshold question were predicated on an acceptance by me of the proposition that, in fact, there was no such shortfall, and that accordingly the wife had surplus income available to be applied to the short-term needs of the children. I have found to the contrary.

72It follows that, as the wife has no surplus income with which to support the children after meeting her own expenses and providing accommodation for them, that the children are in urgent need of financial assistance. The fact that the husband is presently making voluntary payments which he characterises as being for their support does not alter that finding in circumstances where he could unilaterally cease such payments in the absence of an order.

73The question then arises as to what payment would meet that urgent need for financial assistance.

74In circumstances where there is no information before me to allow an educated estimate as to when any assessment might issue, I do not consider it appropriate to order a lump sum payment as sought in the alternative by the wife.

75Leaving aside school fees and travel expenses related to the wife’s musical pursuits the husband submitted in broad terms that the claimed expenses for the children in terms of food, fares and parking, and activities were excessive. The claimed childminding expense of $129 per week was asserted to be excessive, unless it includes the cost of the nanny. No specific complaint was made about the wife engaging the services of a nanny; that was understandable given the husband’s own claimed expenses for a nanny and housekeeper. It is unnecessary to repeat the submissions made in relation to the wife’s claimed expenses regarding household repairs and repairs to furnishings and appliances. The husband asserted that the children are in good health, and it was submitted on his behalf that he did not know why it would be necessary to spend $86 per week on medical expenses for them.

76My observations in relation to those various submissions as they applied to the spousal maintenance claim apply equally in relation to the child support claim.

77Adopting a robust approach, as is in my view appropriate in the circumstances of an application for child support which is by its nature short-term, I conclude that the reasonable expenses of the children amount to approximately $724 per week before consideration of their education expenses, holidays, entertainment and hobbies, and extracurricular activities.

78I do not regard the expenditure claimed for holidays for the children as appropriate for consideration in the context of an application for urgent financial assistance.

79The combined claimed cost of the children’s activities, and entertainment and hobbies, is $733 per week. In her affidavit, the wife specifies expenses of $300 per month for swimming lessons, $785 for a three month period of violin lessons, $104 per month for ballet lessons, $280 for each three month term for tutoring, and $752.60 for each three month term of [music] lessons. In broad terms, those expenses total approximately $233 per week. I am satisfied that an allowance in that amount is adequate in the context of the consideration of the present application. To the extent that other components of the wife’s evidence were somewhat inconsistent with those figures, or suggested slightly higher figures, I do not regard any such difference as being of significance in the overall circumstances of the case.

80It follows that, leaving aside issues related to education costs, I conclude that the children are in need of urgent financial assistance in the amount of $957 per week.

81As counsel for the husband pointed out, the children’s education expenses have been paid in advance through to June 2019. That said, as already noted I do not know when any assessment of child support may issue. The parties both gave evidence as to their intentions during the marriage regarding the children’s education. When it was anticipated that the children would continue living in Perth, the necessary payments were made for their enrolment to be accepted at [School A], [School B], [School C] and [School D]. Accordingly, I accept the evidence of the wife that the parties’ joint intention was that the children would be educated at private schools, at a high level of expense.

82The children presently attend [School E]. The parties jointly enrolled them in that school. While the husband argues that there are cheaper and, he would say, better schools available, the cost of School E is only marginally higher than the cost of the schools chosen by the parties in Perth.

83In the event that a further payment becomes necessary prior to the issue of any child support assessment to secure the ongoing attendance by the children at School E, in my view the need for such a payment would appropriately be characterised as an urgent need for financial assistance on the part of the children.

The husband’s capacity to pay

84Having reached the conclusions set out above, it remains to consider the extent to which the husband can reasonably contribute to the urgent financial needs of the children, and the reasonable needs of the wife.

85The husband filed a financial statement on 21 November 2018. In that document, he asserted that his average weekly income is $3,271 represented by a salary of $740 per week from [Business A], dividends paid to him by [Company A] of $932 per week, and income from the Trust A and the [Trust B] in the sum of $1,426 per week. He acknowledged an additional benefit of $173 per week in the form of salary sacrifice from his employment with Business A.

86As already noted, the husband is the sole director and shareholder of Company A. Company A is the corporate trustee for Trust A. The husband is the sole director and shareholder of [Company B], which is the corporate trustee for Trust B. It is common ground, accordingly, that the husband exercises effective control over the entities from which he derives income other than from his employment with Business A.

87The husband asserts that his total personal expenditure amounts to $7,135 per week. That expenditure includes a modest tax payment, mortgage payments and other fixed expenses in relation to property, insurance, and very substantial claimed expenses in the form of repayments on credit cards. It also includes claimed expenses of $477 per week for the children, who do not presently live with him. Otherwise, the husband claims relatively modest expenses for his own day to day needs.

88In his affidavit filed on 21 November 2018, the husband acknowledged depositing $2,000 per month into an account for the wife, and referred also to her access to the supplementary credit card. He referred further to various expenses met on behalf of the children, or to facilitate him spending time with them.

89Otherwise, he stated:

“There is a significant shortfall between my income and my expenses. I am unable to pay additional spousal maintenance to [the wife] from my income. I do not have sufficient capital to pay the spousal maintenance sought by [the wife]. The mortgage on the property in which I live exceeds the current market value of that property. I have limited funds in bank accounts. I own some shares, but even if I were to sell those they would be insufficient to meet [the wife’s]’s demands. I have substantial company loans and personal guarantees.”

90No reference was made in that affidavit to any detail of transactions with the entities.

91In his affidavit filed on 8 January 2019, the husband said that in his “personal capacity” his sources of “cash” for the 2017, 2018 and current financial years were his income as noted in his tax returns, available credit on his three credit cards, principal repayments of a loan made by him to Company A, and personal loans from family and friends. He said that his taxable income, comprised of his income from Business A and distributions from the trusts, was $163,656 in 2017, and that, while his 2018 tax return had not been completed, he anticipated that it would show income of a similar or slightly higher amount. He said that his credit cards have “very little remaining credit”, without delving into specifics.

92He then said that the debt owed to him by Company A had reduced during the 2017 financial year from $499,186 to $213,237. While he did not expressly say so, the obvious inference is that he received the benefit of $285,949 from that source during that financial year. As he acknowledges, that benefit is in the form of capital rather than income. He went on to say that the figures for Company A for the 2018 financial year had not yet been completed, but that he “anticipate[s] that the loan balance will be much lower again.”

93The husband describes the loan as a “moving target”, increasing when dividends are declared within the company and reducing when drawings (by which he presumably means capital repayments) are made. He provides no further detail.

94He goes on to say that, as at the end of 2018, there is “little cash available in most of the companies”. He refers to three of the companies entering into unspecified payment plans with the ATO, and refers further to deteriorating sales in one of the companies.

95In his earlier affidavit, the husband detailed what he described as the “operating companies and entities” as follows:

1.[Company C]. [Company D] owns 20 per cent of the shares in this entity. Company B as trustee for the Trust B owns all the shares in Company D. [Company E] owns the remaining 80 per cent of the shares in Company C. Company D owns 59 per cent of the shares in Company E. The husband accordingly acknowledges that he has what he describes as an “effective share” of 67.47 per cent of Company C;

2.[Company F]. Company F is wholly owned by [Company G], in which Company D has a 49.94 per cent shareholding. The husband accordingly acknowledges that he has what he describes as an “effective share” of 49.94 per cent of Company F. On the husband’s evidence, companies controlled by the wife’s father have a 34.58 per cent shareholding in Company F.

3.[Company H]. Company H is wholly owned by Company B, and the husband accordingly acknowledges that he has what he describes as an “effective share” of 100 per cent of Company H.

4.[Company I]. Company G owns 90 per cent of the shares in Company I. Company D owns 49.94 per cent of the shares in Company G. The husband accordingly acknowledges that he has what he describes as an “effective share” of 44.95 per cent of Company G.

5.[Company J]. Company G owns 50 per cent of the shares in Company J. The husband accordingly acknowledges that he has what he describes as an “effective share” of 24.97 per cent in it. On his evidence, the company is making significant losses; and

6.[Company K]. [Company L] owns all the shares in Company K. Company A owns 25 per cent of the shares in Company L. The husband accordingly acknowledges that he has what he describes as an “effective share” of 25 per cent in Company K.

96As already noted, the affidavit of Mr B affirmed on 8 January 2019 was admitted into evidence without objection. Among other things, Mr B was asked to review relevant financial documents to enable the recipient of his report to “understand and identify the cash flow between the husband and the related business entities, in particular for the months of December 2017, May 2018, August 2018 and September 2018”, and to give “an indication as to the likely sources of income or funds” to which the husband has “access.”

97Mr B concluded that the husband had received from all identified sources $27,965 in December 2017, $43,838 in May 2018, $45,888 in August 2018, and $52,109 in September 2018. In each case, the amounts received included his salary from Business A and consistent payments of $14,000 in each month from Company K. Mr B then identified payments made from those funds by the husband towards his credit cards, and regular payments of between $5,000 and $6,530 per month to a company controlled by the wife’s father.

98Mr B identified funds flowing to the husband from Company H, [Company M] as trustee for [Trust C], Company K, Company I, Company F, and Company J. Company M owns the commercial premises in [State A] from which Company K operates. On the husband’s evidence, Company A has a 25 per cent shareholding in it.

99Mr B’s findings were not challenged by the husband. His counsel, however, properly observed that those findings related to specified months only.

100The wife’s counsel pointed to documents tendered in evidence, having been produced by [Bank A] under subpoena.

101In an application for a Home Loan executed by the husband in May 2012, he asserted that he had assets to a net value of just over $10 million after deduction of all liabilities. He said that he had dividend income of between $420,000 and $600,000 per annum, with only modest loan repayments and living expenses, leaving him with “usable funds” of between $21,000 and $36,000 per month.

102In a credit card application executed by the husband in November 2016, he told the bank that his monthly income after tax was $18,049, or $216,588 per annum

103In October 2016, he told the bank that the net value of his assets, after deduction of all liabilities, was just over $8.1 million. In a further statement of position executed for the bank in July 2018, after separation, the husband provided less detail, simply asserting that the value of his “Business Goodwill” was $4 million.

104Counsel for the husband pointed out that the various bank documents were not current. She pointed out, further, that the financial statements for the various entities were not in evidence; of course, that “evidentiary gap was within the power of the [husband] to fill.” [11] Counsel submitted, further, that the husband was not in a position to continue to call on the debts owed to him by the entities, and referred in support of that submission to paragraph 16 of his affidavit sworn on 21 November 2018, in which he made the conclusionary assertion that the interests held by him in the various entities are of a value exceeded by the relevant liabilities.

[11] Hall (2016) FLC 93-709, 81,455 [48].

105That assertion, of course, runs directly contrary to the assertions made by him to the bank, albeit at different times.

106While the property and financial resources of each party are matters to be taken into account in considering the spousal maintenance claim, the absence at this stage of expert evidence as to the value of the husband’s business interests cannot properly preclude a determination of the interim claim based on that evidence which is available. That is particularly so in circumstances where the conclusionary assertion of the husband referred to above is unsupported by any evidence as to the basis upon which the conclusion was drawn, such as to enable a proper consideration by the court of its veracity.

107In considering the husband’s capacity to make the payments sought by the wife, regard may properly be had to what may loosely be described as the “track record” demonstrated by the evidence of Mr B, and the husband’s own representations to the bank. That track record is also to a degree supported by the husband’s own evidence in the form of a spreadsheet prepared by him analysing the family’s expenditure for each quarter since the start of the 2017 financial year, annexed to his affidavit. While the document is submitted by the husband as supporting his criticisms of the wife’s expenditure since separation, it nevertheless demonstrates a long-standing capacity to meet expenditure at or approximating that level.

108I note further that, in the context of his professed intention to continue to make the current monthly payment to the wife by way of child support, and to a lesser extent his professed intention not to cancel the wife’s access to the supplementary credit cards, the husband clearly acknowledges a capacity to pay the former, and is not strenuously arguing an incapacity to pay the latter.

109On the balance of probabilities, I am satisfied that the husband has the capacity to make the payments which I have found to be reasonably necessary for the interim maintenance of the wife, and the urgent financial assistance required by the children.

110I conclude further that the husband has the capacity to pay, or cause to be paid, the next instalment of the children’s school fees, should that fall due before any child support assessment is made. Should that timing issue arise, I conclude that it would constitute an urgent need for financial assistance for the children. While of course it is not open to me to make, at this stage, any orders for departure from an assessment which has not yet issued, I express (in case it is of assistance to the parties) the preliminary view that it will continue to be appropriate for the husband to cause those school fees to be paid, over and above payment of appropriate periodic support for the children, at least pending disposal of the substantive proceedings for alteration of property interests.

Other Matters

111On the face of her Minute, although the matter was not agitated at the hearing, the wife seeks an order for reimbursement in respect of the children’s school fees for semester one of the 2018/2019 Country A school year. I do not consider it appropriate or necessary to make such an order at this stage, noting also that certain payments have been made since that relief was sought.

112The wife proposed that, upon the husband’s compliance with the orders sought by her in relation to interim spousal maintenance and urgent financial assistance for the children, she would undertake not to use the husband’s supplementary credit cards save and except for emergency purposes in relation to the children. I propose to accept that undertaking.

113The wife sought that the periodic payments of child support be subject to variation in accordance with the consumer price index. I do not regard that as being necessary or appropriate in the context of the urgent and short term nature of the relief sought.

114The wife sought the ability to relist her departure application on short notice after an assessment issues, in the event that no agreement is reached. That is appropriate.

115Otherwise, counsel advised me at the hearing that arrangements were in hand for the appointment of a single expert witness as to the value of the husband’s business interests, and that the parties propose, upon publication of the expert’s report, to attend mediation external to the Court, in an effort to resolve all outstanding matters. Obviously, that is a sensible approach. I will hear from counsel if they consider any further procedural orders are required at this stage.

Proposed orders

116Subject to any submissions as to form, I propose to make the following orders, upon the undertaking of the wife as set out in paragraph 6 of the minute of orders sought by her dated 26 November 2018 as amended:

1.Until further order, the husband pay to the wife the sum of $600 per week by way of spousal maintenance, with the first such payment to be made within seven days after the date of this order, and thereafter paid weekly in advance by way of direct deposit into a bank account nominated by the wife in writing from time to time.

2.Pending the wife’s application for an administrative assessment of child support to the Department of Human Services (Child Support) via [Country A] Central Authority, pursuant to s 139 of the Child Support (Assessment) Act 1989 (Cth), the husband pay:

(a)to the wife, periodic child support for the children, [Child A], born [in] 2010, and [Child B] born, [in] 2013, in the sum of $957 per week, with the first such payment to be made within seven days of the date of these orders, and monthly in advance thereafter by way of direct deposit into a bank account nominated by the wife in writing from time to time; and

(b)to the children’s school, within 14 days of receipt of accounts or invoices from the school or from the wife, all school fees including but not limited to tuition fees, excursion fees, incidental sporting costs, the costs of all school books, school uniforms and extracurricular activities for each of the children in respect of each of the children’s school attendance.

3.Upon an assessment being issued with respect to the wife’s application for administrative assessment of child support, and in the event there is no agreement between the parties with respect to the child support departure orders sought by the wife, each party have liberty to seek a relisting on seven days’ notice to the other.

4.The wife’s application for interim spousal maintenance, and her application pursuant to s 139 of the Child Support (Assessment) Act 1989 (Cth) otherwise be and are hereby dismissed.

5.All outstanding applications and responses insofar as they otherwise seek interim or interlocutory relief stand adjourned generally.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Family Court of Western Australia.

KM
Associate to the Judge

26 FEBRUARY 2019