Schaars & Schaars

Case [2023] FedCFamC1F 12

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 1)

Schaars & Schaars [2023] FedCFamC1F 12

File number(s): SYC 8524 of 2019
Judgment of: ALTOBELLI J
Date of judgment: 20 January 2023
Catchwords:

FAMILY LAW – PROPERTY – Where the husband has always had a high income earning capacity – Post-separation contributions – Where assets include payment of sale of shares yet to be received – Consideration of a three-pool approach.

FAMILY LAW – SPOUSAL MAINTENANCE – Where the husband has capacity to pay – Court not satisfied wife is in need of spousal maintenance.

FAMILY LAW – CHILD SUPPORT ORDERS – Application for non-periodic child support made pursuant to Child Support (Assessment) Act 1989 (Cth) s 124.

Legislation:

Child Support (Assessment) Act 1989 (Cth) ss 117, 123, 124, 125

Family Law Act 1975 (Cth) ss 72, 74, 75, 79

Cases cited:

Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116

NHC & RCH (2004) FLC 93-204; [2004] FamCA 633

Dickons v Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154

Ferraro and Ferraro (1993) FLC 92-335; [1992] FamCA 64

Hall v Hall (2016) 257 CLR 490; [2016] HCA 23

Hickey and Hickey and Attorney General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143; [2003] FamCA 395

Hurst & Hurst (2018) FLC 93-851; [2018] FamCAFC 146

Kowalski and Kowalski (1993) FLC 92-342; [1992] FamCA 54

Marsh & Marsh (2014) FLC 93-576; [2014] FamCAFC 24

Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17

MS & PS (2006) FLC 93-268; [2006] FamCA 588

Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52

Trask & Westlake (2015) FLC 93-662; [2015] FamCAFC 160

Trevi & Trevi (2018) FLC 93-858; [2018] FamCAFC 173
Division: Division 1 First Instance
Number of paragraphs: 107
Date of hearing: 1–3 August 2022
Place: Sydney
Counsel for the Applicant: Ms Gillies SC
Solicitor for the Applicant: Swaab Attorneys
Counsel for the Respondent: Mr Dickson QC
Solicitor for the Respondent: Pearson Emerson Family Lawyers

ORDERS

SYC 8524 of 2019

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN:

MR SCHAARS

Applicant
AND:

MS SCHAARS

Respondent

order made by:

ALTOBELLI J

DATE OF ORDER:

20 January 2023

THE COURT ORDERS THAT:

1.Within 42 days of the date of these orders, the Respondent Wife (“the Wife”) is to pay to the Applicant Husband (“the Husband”) the sum of $200,014.

2.On compliance with Order 1, the Wife is declared the sole legal and beneficial owner of the property situated at and known as B Street, Suburb C in the State of New South Wales (Folio Identifier …) (“the Suburb C property”).

3.In the event the Wife is unable to comply with Order 1, the Wife is to do all acts and things and sign all documents necessary to sell the Suburb C property by public auction and in particular to:

(a)Instruct an agreed Solicitor ("the Solicitor") to prepare a Contract for Sale of the Suburb C property;

(b)Instruct an agreed Real Estate Agent ("the Agent") to…

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Schaars & Schaars [2023] FedCFamC1F 12
Case
[2023] FedCFamC1F 12
Decision Date

CaseChat Overview and Summary

The case of Schaars & Schaars involves a dispute between Mr Schaars and Ms Schaars about the alteration of property interests, spousal maintenance, and child support departure. The husband, an applicant, filed the case against the wife, the respondent. The case was heard and decided by the Family Court of Australia. The primary legal issue in this case was to determine the post-separation contributions and future needs of the parties, as well as several issues related to the constitution of the asset pool and the approach to be taken for altering property interests. The court had to assess the financial contributions made by both parties, their income, property, and financial resources, and other relevant factors as outlined in the Family Law Act 1975.

The court thoroughly examined the evidence presented by both parties and considered various factors when deciding the case. The court made several adjustments to the joint balance sheet, taking into account the concessions and disputes raised by both parties. The court also assessed the contributions made by the husband post-separation, including the payments for the wife's expenses, child support, and education fees for their children. In its reasoning, the court emphasized the importance of considering the financial contributions made by both parties, their income, property, and financial resources, as well as other relevant factors when making an order under section 79 of the Family Law Act 1975.

Based on its assessment of the evidence and the factors outlined in the Family Law Act 1975, the court made orders regarding the alteration of property interests, spousal maintenance, and child support departure. The court took into account the husband's post-separation contributions, the wife's future needs, and other relevant factors when making its decision. The court also made specific orders regarding the division of the assets, spousal maintenance, and child support.

In conclusion, the Family Court of Australia decided the case of Schaars & Schaars by considering the evidence presented by both parties and the factors outlined in the Family Law Act 1975. The court made orders regarding the alteration of property interests, spousal maintenance, and child support departure, taking into account the financial contributions made by both parties and their future needs. The court's decision was based on a thorough assessment of the evidence and the relevant factors, ensuring a just and equitable outcome for both parties.

Orders

Orders of the court

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Background

Background to the litigation

These reasons for judgment explain the orders made in a dispute between Mr Schaars (“the husband”) and Ms Schaars (“the wife”) about alteration of property interests, spousal maintenance and child support departure.BACKGROUND The husband is the applicant in this case. He is 59 years old, is a finance professional, but describes himself as a director in his affidavit. The wife is the respondent and is 55 years old. They both reside in Sydney. They commenced cohabitation in early 1992 at a time when they each had negligible assets. They married in mid-1993. They have four children aged 26, 25, 22, and 16. The husband commenced working with a professional services firm in 1994, and the parties purchased their first family home in either 1997 or 1998. In 2002, the husband became an equity partner in the firm where he worked. Soon after, they sold their first family home and purchased what is now their current family home (“the family home”) using the sale proceeds of the first property and a loan. In 2005, using the security of the family home, the parties borrowed $1 million to fund the acquisition of a share portfolio. The next year they also substantially renovated the family home using moneys drawn down on their bank mortgage, as well as the husband’s income. In 2006, their youngest son was born. Between 2009 and 2015, the parties made further draw downs on the mortgage to acquire a second share portfolio. The dividends received from both share portfolios covered interest repayments. The home was renovated again in 2012 using a combination of the husband’s income and draw downs on their mortgage. The parties separated on 6 May 2018. The husband left the family home and moved into rented accommodation. The only minor child spent time with the husband but lived with the wife. It is common ground that contribution up to the date of separation is to be assessed as being equal. The real focus of this case is assessing post-separation contribution and future needs, a number of issues relating to the constitution of the asset pool, and the approach that should be taken to the alteration of property interests. After separation the husband caused the share portfolios to be cashed in and applied towards reducing the mortgage over the family home. Within a few months after separation the mortgage was fully paid off. Between mid-2018 and late 2020, the husband paid $2,060 per week directly to the wife and further payments for expenses relating to the repair and maintenance of the family home, the motor vehicle driven by the wife, private health insurance at a family rate, notional periodic child support for the youngest child, all fees associated with their youngest child’s education including tuition fees and incidentals, a small amount of weekly payments to their adult children, all vehicle expenses for the adult children, and all Higher Education Contribution Scheme fees incurred by the adult children. The husband commenced the present proceedings on 13 December 2019 at which time the process of obtaining valuations for the parties’ assets began. The husband funded some of the wife’s legal fees.

Evidence

Evidence Before The Court

If the Court makes an order for child support to be in a form other than periodic amounts pursuant to s 124, the Court must also specify whether the payment will reduce the relevant child support assessment pursuant to s 125 of the Assessment Act.THE EVIDENCE In support of his case, the husband relied on the following documents:(a)His affidavit filed 20 July 2022;(b)Financial statement filed 20 July 2022;(c)Affidavit of Dr H filed 25 July 2022;(d)Case outline filed 28 July 2022; and(e)Various documents tendered during the proceedings, marked as exhibits A1–A7. In support of her case, the wife relied on the following documents:(a)Amended Response to Initiating Application filed 5 July 2022;(b)Her affidavit filed 21 July 2022;(c)Financial statement filed 21 July 2022;(d)Case outline filed 28 July 2022; and(e)Various documents tendered during the proceedings, marked as exhibits R1–R3. Only the husband and the wife were required for cross-examination.THE BALANCE SHEET Immediately before closing submissions, the Court was presented with a joint balance sheet which is reproduced below.[1][1] Some descriptions in the joint balance sheet has been amended for anonymization purposes. The following issues arise in relation to the balance sheet. The husband conceded that the balance of the account referred to in item 5 should be $3,430. In relation to item 8, the wife contended that the further amount of $57,890 received by the husband on 26 July 2022 should be added to the value of this account. However, the Court is satisfied that this would be double counting and hence inappropriate. The evidence indicates that $19,000 out of the $57,890 is in fact represented at item 22, another NAB account. Accordingly, the addback at item 8 should only be $38,890 on top of the $1,650,495 referred to there, totalling $1,689,385. The dispute about the value of chattels referred to in item 12 can only be determined by an admission against interest of the wife, hence the value will be $20,000. However, as the chattels in question are to be divided in specie, it is convenient to treat this item as having a nil value. In relation to item 13, the parties also agreed that the artworks at the family home would be divided in specie so this item will be nil. Item 16 represents pre-payment of school fees for the youngest son. The wife seeks an addback but the Court declines to do so. The Court accepts the husband’s evidence as to how, and why, he pre-paid the school fees. The payment was made out of post-separation income. The benefit of pre-paying the fees was greater than the benefit of keeping the money in a bank account. The payment clearly benefits the family and particularly the youngest son in giving security that he will remain at that school. Item 16 will be nil. Senior counsel for the wife submitted that if this is what the Court decided, the pre-payment should be treated as a financial resource available to the husband under s 75(2) of the Act as it may be refundable. The Court does not agree. There is no evidence that the school fees are refundable. Even if the fees were refundable, it is not plausible that the husband would wish to do so.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

This is an application under s 79 of the Act which relevantly provides:79 Alteration of property interests(1)In property settlement proceedings, the court may make such order as it considers appropriate:(a)in the case of proceedings with respect to the property of the parties to the marriage or either of them—altering the interests of the parties to the marriage in the property; or(b)in the case of proceedings with respect to the vested bankruptcy property in relation to a bankrupt party to the marriage—altering the interests of the bankruptcy trustee in the vested bankruptcy property;including:(c)an order for a settlement of property in substitution for any interest in the property; and(d)an order requiring:(i) either or both of the parties to the marriage; or(ii) the relevant bankruptcy trustee (if any);to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.…(2)The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.(4)In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:(a)the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and(c)the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and(d)the effect of any proposed order upon the earning capacity of either party to the marriage; and(e)the matters referred to in subsection 75(2) so far as they are relevant; and(f)any other order made under this Act affecting a party to the marriage or a child of the marriage; and(g)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage. Section 79(4) incorporates the provisions contained in s 75(2) of the Act, which states:(2) The matters to be so taken into account are:(a)the age and state of health of each of the parties; and(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and(d)commitments of each of the parties that are necessary to enable the party to support:(i)himself or herself; and(ii)a child or another person that the party has a duty to maintain; and(e)the responsibilities of either party to support any other person; and(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:(i)any law of the Commonwealth, of a State or Territory or of another country; or(ii)any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;and the rate of any such pension, allowance or benefit being paid to either party; and(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and(l)the need to protect a party who wishes to continue that party’s role as a parent; and(m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and(n)the terms of any order made or proposed to be made under section 79 in relation to:(i)the property of the parties; or(ii)vested bankruptcy property in relation to a bankrupt party; and(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:(i)a party to the marriage; or(ii)a person who is a party to a de facto relationship with a party to the marriage; or(iii)the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and(p)the terms of any financial agreement that is binding on the parties to the marriage; and(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.