SHAKIR & SHAKIR
[2013] FamCA 562
•30 July 2013
FAMILY COURT OF AUSTRALIA
| SHAKIR & SHAKIR | [2013] FamCA 562 |
| FAMILY LAW – CHILDREN – interim – whether there had been a change in circumstances since Rees J made parenting orders – application dismissed. FAMILY LAW – PROPERTY – interim – whether it was appropriate and in the interests of justice to make an interim property order – whether the orders sought were conservatively within the range of outcomes the husband might receive. FAMILY LAW – SPOUSAL MAINTENANCE – interim – where the wife controls the majority of the parties’ assets – where the husband established a need for periodic spousal maintenance – where the wife has the capacity to pay. |
| Family Law Act 1975 (Cth) |
| Bevan & Bevan (1995) FLC 92-600 Harris & Harris (1993) FLC 92-378 Redman & Redman (1987) FLC 91-805 Strahan & Strahan(Interim property orders) (2011) FLC 93-466 Williamson & Williamson (1978) FLC 90-505 |
| APPLICANT: | Mr Shakir |
| RESPONDENT: | Ms Shakir |
| FILE NUMBER: | SYC | 4296 | of | 2012 |
| DATE DELIVERED: | 30 July 2013 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Watts J |
| HEARING DATE: | 9 May 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Johnston |
| SOLICITOR FOR THE APPLICANT: | Tiyce & Partners |
| COUNSEL FOR THE RESPONDENT: | Mr Levy |
| SOLICITOR FOR THE RESPONDENT: | Hamish Cumming Family Lawyers |
Orders
The interim parenting orders sought by the husband in his Amended Application in a Case filed 23 April 2013 be dismissed.
On my own motion, this matter be expedited.
By way of interim property settlement, within 28 days the wife pay the husband the sum of $86,099.
Pending further order, the wife pay to the husband the sum of $197 per week by way of periodic spousal maintenance.
Within 28 days, the wife pay the husband $40,000 for the purpose of him being able to acquire a motor vehicle. If the husband acquires a motor vehicle for less than $40,000, then the husband is to refund the difference to the wife.
The parties are to forthwith do all things and sign all necessary documents to sell the Harley Davidson motor cycle and the proceeds of that sale be paid to the wife but order 5 is not dependent upon the implementation of this order.
The wife continue to pay regular amounts in relation to registration and insurance on the husband’s motor vehicle and private health insurance for the husband.
The non-periodic child support order sought by the husband in his Amended Application in a Case filed 23 April 2013 be stood over generally save for Order 9.
In the event the wife ceases to pay:
9.1.The child M’s school fees; or
9.2.The child R’s day care fees; or
9.3.private health insurance for both children
the husband has liberty on 7 days notice to relist the matter for consideration of any application by him for an order that she do so.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Shakir & Shakir has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 4296 of 2012
| Mr Shakir |
Applicant
And
| Ms Shakir |
Respondent
REASONS FOR JUDGMENT
INTRODUCTION
This is the second interim hearing that the parties have had in this matter. The husband seeks that there be some alteration to the parenting orders made on an interim basis by Rees J on 31 July 2012. He also seeks that orders be made for interim property settlement, spousal maintenance and non-periodic child support.
APPLICATIONS
By way of his Amended Application in a Case filed 23 April 2013, the husband seeks the following property orders:
2.1.by way of interim property settlement (or alternatively as provision for costs) the wife pay the husband $36,099 on account of legal fees already accrued and a further $50,000 on account of future legal fees;
2.2.the wife pay the husband $40,000 to purchase a family car;
2.3.the wife pay the husband spousal maintenance in the sum of $2,000 per week;
2.4.the wife continue to pay M’s school fees, R’s day care fees and private health insurance fees for the children and the husband.
The husband also seeks a variation to the existing interim parenting orders. He seeks the children live with the wife on Thursday and Friday nights in the first week, and Friday and Saturday nights in the second week. He also seeks half school holidays.
The wife seeks the husband’s application be dismissed.
DOCUMENTS RELIED UPON
The applicant husband relies on the following:
5.1.Amended Application in a Case filed 23 April 2013
5.2.Husband’s affidavit filed 7 May 2013
5.3.Husband’s affidavit filed 11 February 2013
5.4.Husband’s financial statement filed 15 January 2013
5.5.Affidavit of Mr NS filed 1 March 2013
The respondent wife relies on the following:
6.1.Response filed 7 February 2013
6.2.Reply filed 11 February 2013
6.3.Wife’s affidavit filed 2 May 2013
6.4.Wife’s affidavit filed 7 February 2013
6.5.Wife’s financial statement filed 8 February 2013
6.6.Affidavit of Ms I filed 7 February 2013
6.7.Affidavit of Mr Z filed 7 February 2013
6.8.Affidavit of Ms W filed 7 February 2013
6.9.Affidavit of Ms N filed 8 February 2013
Other materials before the Court included:
7.1.Justice Rees’ Reasons for Judgment dated 31 July 2012
7.2.Child Responsive Memorandum dated 14 November 2012
SHORT HISTORY
The husband was born in1970. He is currently aged 43 years old.
The wife was born in 1970. She is currently aged 43 years old.
The parties married in 1994.
The parties have two children; M born in 2006, currently aged seven years old; and R born in 2008, currently aged four years old.
The parties separated in June 2012.
Justice Rees made interim parenting orders on 31 July 2012.
On 11 February 2013, orders were made by consent that the wife pay:
14.1.$2,000 to the husband (this amount was to enable the husband to register and insure the motor vehicle he drives and pay his electricity bill),
and until 6 March 2013 the wife pay
14.2.M’s school fees; and
14.3.R’s day care fees; and
14.4.private health insurance for the husband and the children.
PARENTING APPLICATION
The wife argues there has been no change in circumstances since Rees J made interim parenting orders on 31 July 2012. Those orders provided that the two children live with the husband during the school week and live with the wife from Friday afternoon until 7.30pm on Sunday each week during school term. Her Honour further ordered that during periods of holidays, the children live with the wife for any period she is on holidays and available to care for them and otherwise, the children live with the husband.
Counsel for the husband submitted that he did not, in interim proceedings, need to show any change had happened since Rees J determined the matter on 31 July 2012. I disagree with that proposition (see Sullivan & Tyler (No. 2) [2013] FamCA 271).
The husband points to statements made in the child responsive program memorandum prepared by a family consultant dated 14 November 2012. In that memorandum the family consultant says:
Despite the current Interim Orders, each parent believes that the children will benefit from a change to the current parenting arrangements. [The mother] said that, the children had spend [sic] all of term three school holidays with her and that, towards the end of this period, [M] had told her he was missing his father. She believes that the children ought to spend some time with their father during the school holiday periods and some time with her during the school week. [The mother] said that, if the children were to be with their father during some of the school holidays, she would want assurances that [the father] was not using any illegal substances and was the person who was taking responsibility for the children, not their paternal aunt or a nanny.
It is evident that the children love each of their parents and that [M] (understandably) wishes to spend more frequent time with his mother and some weekend time with his father.
…
Despite the existence of Interim Orders it is considered to be in the children’s short to medium term interest that the Orders be reconsidered so that the children are able to spend time with each parent during the school week, at weekends and during school holiday periods. It is important that, as the term four school holidays are imminent, there are appropriate arrangements in place for the children to spend time with each parent over the Christmas period as well as time with their father during some of the December-January holiday period. It is usually not appropriate for children of [M] and [R’s] age to spend more than seven to 10 days away from either parent.
Two things arise from these extracts from the family consultant’s memorandum:
18.1.The child M has expressed the view that he was missing his father during the school holidays;
18.2.The wife has indicated that she believes that the children ought to spend some time with their father during the school holiday period and some time with her during school week.
It appears that the wife was saying that the current interim arrangements should change by increasing time with the wife during the week in school term and providing some time to the husband in school holidays. However, the husband is not proposing any increased time during school term, just a change in its configuration. I accept that the statements she made to the family consultant have to be seen in the context of her overall application to the court. The wife’s application for final orders is that the children primarily live with her and it is in that context that her statement that she believed the children ought to spend more time with their father during school holiday periods and some time with her during school week needs to be seen.
Order 15 made by Rees J is in the following terms:
That during periods of school holidays the children shall live with the wife for any period she is on holidays and available to care for them and they shall otherwise live with the husband.
In paragraph 30 of her Reasons, her Honour explicitly says:
My conclusion is that the children should be cared for by their mother when she is available and by their father when she is not.
I do not accept the submission from counsel for the husband that Rees J assumed when making her orders that the wife, as a highly involved senior executive, would not be able to take leave from her work for all of the school holidays to care for the children.
The husband relies on the opinion of the family consultant that it is not appropriate for the children to spend more than seven to 10 days away from either parent.
Counsel for the wife submitted that the change in circumstance to which the husband points is an opinion expressed by a family consultant as to what is generally preferable, rather than a specific reason to change the current interim parenting arrangement in this case.
I accept the submission made by counsel for the wife that there is insufficient material to form the basis to entertain a change in the considered judgment of Rees J on an interim basis. To do so would be to embark upon a piecemeal exercise in circumstances where the matter should be progressed as expeditiously as possible towards a final hearing of all parenting matters. That final hearing, in accordance with the recommendation of the family consultant, ought to involve the court having the benefit of a full report, perhaps with a drug and alcohol assessment. The parties seem to have agreed that that report would be prepared by A/Prof QQ if she is available. It is appropriate to expedite the matter so that the final hearing can take place as soon as possible.
I do not in the circumstances intend to interfere with the orders made by Rees J by way of further interim order.
THE LAW TO BE APPLIED IN RELATION TO INTERIM PROPERTY PROCEEDINGS
Approach to an application for an interim property order
The Full Court in Strahan & Strahan(Interim property orders) (2011) FLC 93-466 revisited the principles applicable to applications for interim property orders. An interim property decision involves two steps.
The first step
First, it must be established that s 80(1)(h) Family Law Act 1975 (Cth) (“FLA”) was enlivened to allow an interim property settlement under s 79 FLA. The test for this was not confined to ‘compelling circumstances’. The Court in Strahan revisited the earlier well known statement made in Harris & Harris (1993) FLC 92-378 where the Full Court had said:
The exercise of the power should be confined to cases where the circumstances presented at that time are compelling. As a generality, the interests of the parties and the Court are better served by there being one final hearing of s 79 proceedings. However, circumstances may arise before there can be a final hearing which dictate that some part of the property of the parties should be the subject of orders. A common example is where both parties agree to the disposal of some assets pending the trial. However, we do not consider that it is confined to cases where the parties consent. Urgent situations may arise where it is necessary to exercise this power if injustice is to be avoided. Examples include cases where it is necessary to do so to avoid an asset being eroded or lost in the intervening period, and cases (beyond the maintenance power) where an order in favour of one party is necessary to preserve or obtain a home for or is otherwise necessary for the welfare of the children.
In Strahan, the Full Court said:
132. In relation to the first stage, in our view, when considering whether to exercise the power under s 79 and s 80(1)(h) of the Act to make an interim property order the “overarching consideration” is the interests of justice. It is not necessary to establish compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. In exercising the wide and unfettered discretion conferred by the power to make such an order, regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.
…
139. We also emphasise that in order to establish an appropriate case for an interim property settlement order more is required than the mere fact that upon a final hearing the applicant would receive the property being sought (or an amount in excess of the funds being sought) from the other party.
As explained by the Full Court, s 80(1)(h) FLA is a wide enabling provision for interim property decisions, and there is no reason to limit it, by requiring a finding of ‘compelling circumstances’. All that is required before the power to make an interim property order is exercised, is an assessment of whether it would be “appropriate” to make an interim order, with the “over arching consideration” being the interests of justice. There may need to be evidence of the likely cost of litigation, but only if that is the reason or part of the reason that is propounded as to why it is appropriate that the order be made.
The second step
As was discussed in Harris and confirmed in Strahan, the second step in making an interim property order is to have regard to the usual matters in a s 79 order (ss 79(2) and 79(4) FLA). A detailed inquiry is not required, but there must be some assessment of s 79 FLA factors. Given it is an imprecise exercise, the interim property order has to be “conservative” so that the final outcome of property settlement will not be compromised by the interim property order. Either the remaining property needs to be sufficient to meet the legitimate expectations of both parties at the final hearing, or the order that is contemplated needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so.
In Harris, the Full Court said:
As a generality, the interests of the parties and the Court are better served by there being one final hearing of sec 79 proceedings.
In Strahan, the Full Court said in exercising the wide and unfettered discretion conferred by s 79 and s 80(1)(h) FLA:
Regard should be had to the fact that the usual order pursuant to s 79 is a once and for all order made after a final hearing.
A corollary of these statements made by the Full Court in both Harris and in Strahan is the proposition that as a generality, the interests of the parties and the court are better served by there being as few interim property applications under s 79 as possible.
INTERIM PROPERTY APPLICATION
Is the order sought by the husband appropriate and in the interests of justice?
The wife has control of what appears to be the vast bulk of the matrimonial assets. She has already paid her own lawyer a significant amount of money. There appears to be some liquidity in her financial circumstances. In March 2013, as part of her remuneration for the 2012 financial year, she received a gross bonus in the sum of $122,500. The net amount she received was somewhere in excess of $60,000. The wife placed the sum of $60,000 in an investment account entitled “MLC education fund” ($30,000 for each child).
Exhibit 2 shows the wife has an arrangement with Westpac Banking Corporation where as at 4 January 2013 the total funds available on the redraw facility were $122,689. The wife has an interest in an equity loan of $114,000 (but is unclear to me as to whether or not that loan could be called upon at short notice). The wife as at 8 February 2013 had $42,723 in trust with her lawyer (some of which would have been expended in respect of the current application).
It may or may not be at the final hearing that the wife is able to establish some of the things she has alleged in relation to the husband’s financial position. At this stage however, on the undisputed facts (as opposed to controversial ones), I find that it is appropriate and in the interests of justice to make an order for interim property settlement in the husband’s favour.
What is the husband’s conservative s 79 FLA claim?
Counsel for the husband asserted, and counsel for the wife did not seem to disagree, that the overall net assets in the case are somewhere in the vicinity of $2 million. Of that, the wife has $1.8 million and the husband has $150,000. These are to be taken as only tentative estimates and I take into account the submissions made by counsel for the wife in relation to certain unresolved aspects of the husband’s asset position, particularly as it relates to his involvement in SK Pty Ltd, which apparently is in liquidation.
The wife’s application for final property orders is contained in a Reply filed by her on 11 February 2013. The order that she seeks is in the following terms:
1.That the wife causes to be paid to the husband such an amount so as to ensure that the net matrimonial assets are divided as to 75% to the wife and 25% to the husband.
2.That the husband pays the wife’s costs.
On the wife’s application, the husband would receive from her a figure in excess of $400,000 by way of alteration of property.
The husband has applied by way of interim property order, for $86,099 to fund this litigation. A figure in that order is well within the parameters of an order that he might expect pursuant to s 79 FLA once the matter is dealt with at a final hearing. Even though this is an imprecise exercise and a detailed inquiry in relation to normal considerations is not necessary, even on a conservative approach, the figure that he seeks is well within reasonable parameters.
SPOUSAL MAINTENANCE
Section 72 FLA requires a party to a marriage to maintain the other party, to the extent that they are reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately because of certain reasons and having regard to factors set out in s 75(2) FLA. If the applicant establishes a need and it is shown that the respondent has a capacity to pay, then the court may make such order as it considers proper for the provision of maintenance (s 74 FLA).
In interim proceedings, the Full Court in Redman & Redman (1987) FLC 91-805 endorsed a statement made by Fogarty J in Williamson & Williamson (1978) FLC 90-505 as follows:
Another consequence is that on an application for interim maintenance, the court conducts ‘not as final or exhaustive a hearing as would be the case if one were hearing the matter finally’ ... the evidence need not be so extensive and the findings not so precise.
So, upon an application for interim maintenance, an approach can be taken with a broader brush.
Any proposed interim property order must be taken into account when interim spousal maintenance is considered (see Bevan & Bevan (1995) FLC 92-600 and Oates & Crest (2008) FLC 93-365).
The husband’s capacity to support himself
The order for interim property has been earmarked by the husband to pay incurred legal fees and to secure legal representation, if required, in the future.
Counsel for the wife raised the issue of the husband’s involvement in SK Pty Ltd, a company which is apparently in liquidation. Counsel for the wife submits that the husband is likely to imminently receive a substantial sum as part of the company’s winding up. The husband holds a 1/15 share in the company. In Part O of his financial statement, the husband estimates his share in the company to be worth $137,000. Counsel for the husband submitted that there is no guarantee the husband will receive such sum and if he is to receive any money, it may take some time. For the purposes of this interim hearing, I accept that is so.
It is not substantially in dispute that the husband does not currently have full time employment.
However, the wife asserts the husband is not exercising his current earning capacity. She asserts that he could obtain full time employment during the day because M is at school and R is in long day care or can be in long day care and that the paternal aunt is available for drop offs and pick ups to and from school and day care.
As an alternative, it is asserted the husband could obtain some type of employment during school hours.
The wife produces some evidence that the husband has been “caught out” working but in the context of this interim application, I am unable to make any assessment as to what is the husband’s real current earning capacity.
It is agreed that in 2010 the husband had a heart attack which required the insertion of a stent. It seems not controversial the husband’s employment after that event was dramatically affected, even though he did go back to some work.
The history of all of this of course will be more fully explored at a final hearing. I am satisfied however that given the husband’s primary responsibility to look after the children during the week and what is apparently his working history since his heart attack, that for the purposes of an interim hearing I am prepared to accept that he currently does not have a substantial earning capacity. Whether or not that finding can be maintained upon full testing is another thing entirely.
The husband’s need for spousal maintenance
The husband in his financial statement claims a shortfall of income over expenditure in the sum of $2,201 per week (his claim for a weekly maintenance amount is $2,000 per week).
At item 13 of the husband’s financial statement he says he receives child support in the sum of $300 per week from the wife. The wife’s financial statement says she pays the husband $336 per week. I note the husband annexes to his affidavit sworn 11 February 2013 a child support assessment dated 30 August 2012, which specifies the weekly rate payable as $336.57. The husband’s shortfall is then $2,164.43 ($2,201 - $36.57).
The husband asserts he spends $1454 per week on the children. Those expenses should be excluded from his claim for spousal maintenance. The husband’s claim for $50 per week for other adults in his household should also be excluded.
The husband seeks to claim $750 per week by way of rent (in the event that he moves out of the current accommodation that he is in because of a sale). Counsel for the wife submits, and I accept, that the husband would not pay the entirety of the rent as the new proposed accommodation is to be shared with the husband’s sister and his uncle. The husband’s sister is recorded on the husband’s financial statement as having income of $1,000 per week. In the circumstances, it is appropriate that the husband’s claim for rent be halved.
Counsel for the wife also submitted that the husband’s claims in Part N of his financial statement in relation to house repairs and electricity are excessive. Counsel further submitted that it is unreasonable for the husband to claim the amount that he does in relation to petrol, motor vehicle maintenance and fares/car parking in circumstances where he does not work.
The wife asserts that she pays for the husband’s “motor vehicle-hire/purchase, registration and insurance” ($75 per week) and health insurance for the husband ($50 per week).
I am of the view that the husband’s claims with respect to other expenses are reasonable.
The husband has established a need for spousal maintenance of $197 per week ($2,201 - $1454 – $50 - ($750/2) - $75 - $50) on the basis the wife continues to pay outgoings on his motor vehicle and health insurance.
The purchase of a new motor vehicle
The husband currently has use of a motor vehicle (his sister’s vehicle). The husband deposes in his February affidavit that the motor vehicle was purchased by his sister for $800.
The wife has a Mercedes motor vehicle which has a written down value of in excess of $40,000 according to her estimate in her financial statement.
The husband has the children with him for more than half of the time.
I am comfortable with the notion that the husband needs a better quality motor vehicle for the purposes of transporting the children.
The husband however also currently has the use of the Harley Davidson motorcycle which is registered in the name of the wife. The wife had made it clear that that motorcycle can be sold.
The wife’s capacity to pay
The next issue is the wife’s capacity to make some payment towards the husband’s maintenance, including the funding for purchase of a motor vehicle.
There was some debate during the hearing as to what the actual difference was between the wife’s income and the wife’s asserted expenditure. It was finally conceded by counsel for the wife that when the bonus that the wife received in March 2013 (which has to be treated as part of her 2012 income) is taken into account, and when the tax in respect of that bonus is taken into account, then the level of income on the financial statement rises to be approximately the same as her asserted expenses.
When looking at her expenses, she asserts that it costs her $1,872 per week for herself to live and that she spends $1,612 per week on the children.
All up, her claim is $3,484 per week in personal living expenses (as set out in Part N of her financial statement sworn in February 2013).
By way of example, the wife asserts that she spends almost $200 per week on gym membership and a personal trainer and $200 per week to have her house cleaned. The wife asserts that she spends $235 per week on food and household supplies for the children (in circumstances where during the school term they are currently with her two days a week). I conclude that many of the items in the wife’s personal expenses are at a level that should not stand in the way of a finding being made that she has the capacity to pay for the husband’s needs.
The wife also has sufficient capacity to fund the acquisition of a motor vehicle for the husband.
Accordingly, I find the husband has established his claim for $197 per week by way of periodic spousal maintenance, along with maintenance of his motor vehicle and health insurance and a payment of up to $40,000 to enable a new vehicle to be purchased. I will order that the parties do all things and sign all necessary documents to sell the Harley Davidson motor cycle and that the proceeds of that sale be paid to the wife to offset an amount of $40,000 that the wife is to pay to the husband forthwith for the purpose of him being able to acquire a motor vehicle for $40,000. If the husband purchases a motor vehicle for a lesser sum, then the husband is to refund the difference to the wife.
NON-PERIODIC CHILD SUPPORT
The husband seeks that the wife continue to pay M’s school fees, R’s day care fees and private health insurance for both children. Neither counsel made submissions in relation to the application of relevant principles under the Child Support (Assessment) Act 1989 (Cth)(“CSAA”). Counsel for the wife did not indicate that it was the wife’s position that she would not continue to make these payments and my decision in this matter has proceeded on the basis the wife will continue to make those payments. I will not, given the lack of submissions and lack of other formal compliance with the Family Law Rules 2004 (Cth) in relation to applications for orders under the CSAA, make a formal order that she continue to pay, but in the event that she ceases, the husband has liberty on seven days notice to relist the matter for consideration of an order (which application would need to be supported by those documents required by the Family Law Rules 2004 (Cth)).
I certify that the preceding seventy-four (74) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 30 July 2013.
Associate:
Date: 30.7.13