Short & Trevilian (No. 3)
[2007] FamCA 1673
•9 March 2007
FAMILY COURT OF AUSTRALIA
| SHORT & TREVILIAN (NO. 3) | [2007] FamCA 1673 |
| FAMILY LAW – PROPERTY SETTLEMENT – husband sought to include $18,000 withdrawn by the wife since separation in the property pool – wife states she used the money to meet reasonable expenses and some legal costs – amount not included in asset pool - mortgage on property registered to husband’s parents – husband and husband’s father claiming the loan has not been repaid – consideration of evidence – husband and husband’s father’s claim rejected - assessment of contributions – 55%/45% in favour of husband – consideration of s75(2) factors – significant disparity in income earning capacity of parties – adjustment of 20% in wife’s favour. FAMILY LAW – CHILD SUPPORT – husband unilaterally ceased periodic child support payments – husband paid children’s school fees direct to school – husband in arrears of child support – agreement for a departure from administrative assessment for period up to commencement of trial – wife seeking departure from administrative assessment for youngest two children living with her – grounds for departure under s117(2)(b)(ii) made out – not satisfied that assessments are unjust or inequitable – assessments for 2006 should remain in place – order increasing annual rate of child support payable by the husband - wife seeking injunction restraining husband from dealing with certain property until youngest child attains 18 years as security for payment. FAMILY LAW – SPOUSAL MAINTENANCE – wife’s application for continuation of order for spousal maintenance but seeking increase – findings as to wife’s capacity to earn and proposed orders for property settlement means wife no longer satisfies the threshold test that she is unable to support herself adequately under s72 of the Act – current order for spousal maintenance discharged - wife’s application dismissed. |
| Chorn and Hopkins (2004) FLC 93-204 Phillips and Phillips (2002) FLC 93-184 |
| Family Law Act1975 (Cth) ss 72, 74, 75(2), 79(4), Child Support (Assessment) Act 1989 (Cth) ss 99(1), 100, 117(1), 117(2), 117(4), 117(5), 141(1) |
| APPLICANT: | Mr Trevilian |
| RESPONDENT: | Ms Short |
| FILE NUMBER: | ADF | 1855 | of | 2003 |
| DATE DELIVERED: | 9 March 2007 |
| PLACE DELIVERED: | Adelaide |
| JUDGMENT OF: | Strickland J |
| HEARING DATES: | 20-22 March 2006 27-31 March 2006 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Pyke QC |
| SOLICITOR FOR THE APPLICANT: | Howe Martin & Associates |
| COUNSEL FOR THE RESPONDENT: | Mr Berman |
| SOLICITOR FOR THE RESPONDENT: | Angela Ferdinandy |
Orders
That within 42 days of the date of this order the wife pay to the husband the sum of FIVE THOUSAND THREE HUNDRED AND EIGHTY EIGHT DOLLARS [$5,388.00].
That contemporaneously with the said payment:
(a)The husband transfer to the wife at the wife’s cost his interest in the following properties:
(i)B1 property
(ii)B2 property
(iii)A property
(b)The wife transfer to the husband at the husband’s cost her interest in the following properties:
(i)The Scotland property
(ii)P Property
That forthwith the net proceeds of sale of the property situated at B3 be divided between the parties 65% to the wife and 35% to the husband PROVIDED THAT each party do pay any Capital Gains Tax assessed on the share of the said proceeds of sale received by that party.
That forthwith the wife do cause to be delivered up to the husband the items of personalty set out in Annexure “A” hereto.
That forthwith the husband transfer to the wife at her cost his interest in the Holden Commodore Acclaim motor vehicle.
That forthwith the wife transfer to the husband at his cost her interest in the 1992 Mazda 121 motor vehicle.
That forthwith the husband do all acts and things including the payment of any money required to discharge the mortgage to the husband’s parents and/or to the husband’s father and the husband’s mother’s estate registered on the title to the property at A.
That the husband indemnify the wife and keep her indemnified against and in relation to the payment of all debts and liabilities of the parties or either of them to the husband’s father and/or to the husband’s mother’s estate.
That the husband do retain the following free of any claim, right, interest, demand or entitlement of the wife:
(a)The property situated at G.
(b)The furniture and household effects currently in his possession or control together with the items in Annexure “A” hereto once delivered.
(c)All rental monies held in any account and/or received by him since the date of separation.
(d)His share of the proceeds of sale of the properties situated at V1 and V2 PROVIDED THAT he pay any Capital Gains Tax assessed thereon.
(e)All other items of real estate and personalty in his possession or control.
That the wife do retain the following free of any claim, right, interest, demand or entitlement of the husband:
(a)Her superannuation entitlement.
(b)Her share of the proceeds of sale of the properties situated at V1 and V2 PROVIDED THAT she pay any Capital Gains Tax assessed thereon.
(c)Subject to paragraph (4) hereof, the furniture and household effects currently in her possession or control.
(d)All other items of real estate and personalty in her possession or control.
That subject to the provisions of this order each party do release the other party from any liability for any claim that either one may have against the other in respect of any property either now or hereafter owned by either of them.
That the husband indemnify the wife in relation to all actions, claims, proceedings and demands howsoever arising in relation to any debts or liabilities incurred in his sole name.
That the wife indemnify the husband in relation to all actions, claims, proceedings and demands howsoever arising in relation to any debts or liabilities incurred in her sole name.
That hereafter each party shall discharge without calling upon the other to contribute thereto their several debts contracted for and by them.
Henceforth each party is restrained and an injunction is hereby granted restraining the parties and each of them from pledging the credit of the other.
In the event that either party shall fail and/or refuse to execute any document necessary to give effect to the terms hereof within seven [7] days after the same shall have been tendered to him or her for that purpose, then and in such case a Registrar or Deputy Registrar of this Honourable Court upon proof by affidavit of such refusal or neglect is hereby appointed to execute any such document on behalf of either party hereto and if in his opinion it shall be necessary so to do to settle the same and to do all such other acts and things and execute all such other documents as shall be necessary to give full force and effect hereto and shall execute and do the same accordingly and the party in default shall pay the other party’s costs as agreed or taxed.
That the order for spouse maintenance made on 7 June 2004 be discharged and the wife’s application for spouse maintenance be dismissed and removed from the active pending list.
That pursuant to Section 117 of the Child Support (Assessment) Act 1989, there be a departure from the administrative assessment of child support payable by the husband to the wife for the children V born … June 1995, E born … June 1998 and S born … July 1992.
That from 16 June 2003 to 20 March 2006, the total amount of child support payable by the husband for the three children be equal to the amount of child support the husband has already paid to the wife for the said period.
That from 1 January 2007 to 16 April 2007 the annual rate of child support for each of V and E is increased by the amount of the compulsory fees payable to R College for each child for the 2007 calendar year.
That pursuant to Section 117 of the Child Support (Assessment) Act 1989, there be a departure from the administrative assessment of child support payable by the wife to the husband for S born … July 1992.
That the total amount of child support payable by the wife to the husband for the child S for the period from 16 June 2003 to 20 March 2006 be reduced to nil.
That the application for an injunction restraining the husband from transferring, assigning, encumbering or in any way dealing with his interest in the properties situated at P pending 23 June 2016 be dismissed and removed from the active pending list.
That the Form 63 Application filed by the husband in the Federal Magistrates Court on 26 February 2004 and transferred to the Family Court of Australia on 7 April 2004 be dismissed and removed from the active pending list.
That the Form 63 Application filed by the wife in the Federal Magistrates Court on 9 March 2004 and transferred to the Family Court of Australia on 7 April 2004 be dismissed and removed from the active pending list.
That all applications be dismissed and removed from the active pending list.
IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Honourable Justice Strickland delivered this day will for all publication and reporting purposes be referred to as Short and Trevilian.
| FAMILY COURT OF AUSTRALIA AT ADELAIDE |
FILE NUMBER: ADF 1855 of 2003
| MR TREVILIAN |
Applicant
And
| MS SHORT |
Respondent
REASONS FOR JUDGMENT
Introduction
The parties were in dispute about both children’s issues and financial issues. However, at the commencement of the trial the parties and the Independent Children’s Lawyer were able to reach agreement about the former and consent orders were made on 21 March 2006. Those orders provided for the child S born in July 1992 to live with the husband and the children V born in June 1995 and E born in June 1998 to live with the wife.
The trial on financial issues then proceeded. Those issues comprised property settlement, spouse maintenance and child support.
The orders sought by the wife at trial in relation to these matters are as follows:
Property settlement
3.1The assets of the parties be divided on a 75%/25% basis in favour of the wife.
3.2That to give effect to the said percentage division:
3.2.1the husband do transfer to the wife:
3.2.1.1all of his interest in the former matrimonial home situated at [B1];
3.2.1.2all of his interest in the property situated at [A];
3.2.1.3all of his interest in the property situated at [B2].
3.2.2that the wife retain the following:
3.2.2.1her share of the proceeds of sale of the properties at [V1] and [V2] provided that she meet any Capital Gains Tax liability assessed thereon;
3.2.2.2her superannuation entitlement;
3.2.2.3her Holden motor vehicle;
3.2.2.4subject to the items agreed to be delivered up to the husband, the furniture and household effects currently in her possession or control;
3.2.2.5all other items of real estate and personalty in her possession or control.
3.2.3that the wife do transfer to the husband all of her interest in the properties situated at […], Scotland and at [P] and that the husband do indemnify the wife and keep her forever indemnified with respect to all debts and liabilities arising with respect to the said properties;
3.2.4that the proceeds of sale of the property at [B3] be divided 75% to the wife and 25% to the husband;
3.2.5that all Capital Gains Tax payable with respect to the transfers referred to in paragraphs 3.2.1 and 3.2.3 hereof be paid by the parties in equal shares;
3.2.6that the husband retain the following:
3.2.6.1his share of the proceeds of sale of the properties at [V1] and [V2] provided that he meet any Capital Gains Tax liability assessed thereon;
3.2.6.2his superannuation entitlements;
3.2.6.3his interest in the property situated at [G];
3.2.6.4all rental monies held in any account;
3.2.6.5the husband’s Mazda motor vehicle;
3.2.6.6including the items agreed to be delivered up by the wife, the furniture and household effects currently in the possession or control of the husband;
3.2.6.7all other items of real estate and personalty in his possession or control.
3.2.7that the husband pay to the wife such amount after taking into account the above orders as may be required to give effect to paragraph 3.1 hereof.
3.3That the husband do indemnify the wife and keep her forever indemnified in relation to all debts and liabilities of the parties or either of them to the husband’s father and/or mother’s estate and that the husband do discharge in full such amount as may be outstanding (if any) with respect to Memorandum of Mortgage No. […] to the husband’s father, […], registered on the title to the said [A] property.
3.4That subject to the provisions of this order that each party do release the other party from any liability for any claim that either one may have against the other in respect of any property either now or hereafter owned by either of them.
3.5That the husband indemnify the wife in relation to all actions, claims, proceedings and demands howsoever arising in relation to any debts or liabilities incurred in his sole name.
3.6That the wife indemnify the husband in relation to all actions, claims, proceedings and demands howsoever arising in relation to any debts or liabilities incurred in her sole name.
3.7That hereafter each party shall discharge without calling upon the other to contribute thereto their several debts contracted for and by them.
3.8Henceforth each party is restrained and an injunction is hereby granted restraining the parties and each of them from pledging the credit of the other.
3.9In the event that either party shall fail and/or refuse to execute any document necessary to give effect to the terms hereof within seven [7] days after the same shall have been tendered to him or her for that purpose, then and in such case a Registrar or Deputy Registrar of this Honourable Court upon proof by affidavit of such refusal or neglect is hereby appointed to execute any such document on behalf of either party hereto and if in his or her opinion it shall be necessary so to do to settle the same and to do all such other acts and things and execute all such other documents as shall be necessary to give full force and effect hereto and shall execute and do the same accordingly and the party in default shall pay the other party’s costs as agreed or taxed.
Spouse Maintenance
3.10That the husband do pay to the wife by way of periodic spouse maintenance the sum of $1,500.00 per week.
3.11In the alternative to paragraph 3.10 hereof the husband do pay to the wife the sum of $200,000.00 by way of lump sum spouse maintenance.
Child Support
3.12That pursuant to Section 117 of the Child Support (Assessment) Act 1989, there be a departure from the administrative assessment of child support payable by […] (“the husband”) to […] (“the wife”) for the children […] (“[V]”) born […] June 1995, […] (“[E]”) born […] June 1998 and […] (“[S]”) born […] July 1992.
3.13That from 16 June 2003 to 20 March 2006, the total amount of child support payable by the husband for [the three children] be equal to the amount of child support the husband has already paid to the wife for the said period.
3.14That pursuant to Section 117 of the Child Support (Assessment) Act 1989, there be a departure from the administrative assessment of child support payable by the wife to the husband for […] (“[S]”) born […] July 1992.
3.15That the total amount of child support payable by the wife to the husband for the child [S] for the period from 16 June 2003 to 14 July 2010 be reduced to nil.
3.16That in lieu of all assessments after 20 March 2006 the husband pay to the wife the sum of $552.95 per week per child (annual rate $28,753.00 per child) for [V] and [E].
3.17That the child support referred to in the last preceding paragraph be paid by internet transfer on Monday of each week into such bank account as the wife may nominate in writing.
3.18The husband be restrained and injunctions are hereby granted restraining the husband from transferring, assigning, encumbering or in any way dealing with his interest in the properties situated at [P], pending 23 June 2016.
The orders sought by the husband at trial in relation to these matters are as follows:
Property settlement
4.1That the husband transfer to the wife his interest in the former matrimonial home situated at [B1].
4.2That the wife retain the following:
4.2.1the proceeds of sale of the property situated at [B3] provided that she pay any Capital Gains Tax assessed thereon;
4.2.2her share of the proceeds of sale of the property situated at [V1] and [V2] provided that she pay any Capital Gains Tax assessed thereon;
4.2.3the sum of $18,000.00 withdrawn by her from a National Australia Bank Account at the date of separation;
4.2.4her superannuation entitlement;
4.2.5subject to the items agreed to be delivered up to the husband and subject to paragraph 4.6 hereof, the furniture and household effects currently in her possession or control;
4.2.6her Holden motor vehicle.
4.3That the wife transfer to the husband her interest in the following properties:
4.3.1[A Property];
4.3.2[B2 property];
4.3.3[P property];
4.3.4[Scotland property].
4.4That the husband retain the following:
4.4.1the property situated at [G];
4.4.2all rental moneys held in any bank account or received by the husband since the date of separation;
4.4.3his share of the proceeds of sale of the property situated at [V1] and [V2] provided that the husband pay any Capital Gains Tax assessed thereon;
4.4.4the furniture and household effects currently in his possession and control together with the items referred to in paragraph 4.6 hereof and the items agreed to be delivered up by the wife;
4.4.5his Mazda motor vehicle.
4.5That the husband make all repayments required pursuant to the mortgages registered on the titles to the said properties at [A Property] and [G Property] and the husband indemnify the wife and keep her indemnified against and in relation to such payments.
4.6That the wife forthwith deliver to the husband the following items of personalty:
4.6.1Baltic pine turned leg dining room table;
4.6.2piano;
4.6.3pedestal bedside cabinet;
4.6.4Cedar chest of drawers.
Spouse Maintenance;
4.7That the application for an order for spouse maintenance filed by the wife be dismissed.
Child Support
4.8That pursuant to Section 117 of the Child Support (Assessment) Act 1989, there be a departure from the administrative assessment of child support payable by the husband for the children [V], [E] and [S] as follows:
4.8.1That from 16 June 2003 to the date of judgment the total amount of child support payable by the husband is equal to the amount of child support that has already been paid by the husband to the wife for that period.
4.9That pursuant to Section 117 of the Child Support (Assessment) Act 1989, there be a departure from the administrative assessment of child support payable by the husband for the said children [V] and [E] as follows:
4.9.1That from the date of judgment to 23 June 2016, the payment of school fees for the said children at [R] College being lump sum child support in the total amount of the school fees paid by the husband each year shall count for 100% of the husband’s annual child support liability.
In relation to the property at B3 orders were made by the Judicial Registrar on 9 December 2005 that that property be sold, that the sum of $80,000.00 be paid to the wife, and the balance held in trust. For a number of reasons a sale did not take place and I made further orders including on 26 June 2006. Then, on 5 July 2006 I was informed that a new contract to sell the property for $280,000.00 was about to be executed and on 26 February 2007 I was informed that a sale had taken place. The net proceeds were $270,088.69, the wife received $80,000.00 pursuant to the said order made by the Judicial Registrar and the balance including interest of $194,503.87 was being held pending delivery of my reasons for judgment.
The factual background
The husband was born in August 1949 and is aged 57 years.
The wife was born in March 1959 and is aged 47 years.
In 1967 the husband began collecting and dealing in coins and antiques, and thereafter gradually increased the size and value of his collections.
In 1973 the husband graduated with a degree in medicine.
In December 1975 the husband obtained work in hospitals and as a general practitioner. He continued dealing in coins and antiques.
In 1978 the wife commenced a Science Degree at Flinders University, but she withdrew in mid-1978 to travel overseas. She subsequently commenced a professional Degree at the University of Adelaide.
In 1982 the husband moved to Adelaide and commenced the same professional Degree as the mother at the University of Adelaide. He also continued to work as a medical practitioner.
In 1984 the parties met and later commenced cohabitation. The wife completed her Degree in that year.
In December 1984 the parties travelled overseas. This travel was funded by the husband exchanging and upgrading gold coins.
In 1985 the wife obtained a Bachelor of Arts Degree.
In 1986 the husband graduated from the University of Adelaide and worked in that profession for L Organisation. Later in that year the parties moved to Sydney.
On 19 December 1986 the wife completed her professional registration and obtained work in her profession. The husband worked as a medical practitioner. He also completed a Certificate in his new profession.
In 1986/1987 the parties returned to South Australia.
In 1987 the wife completed an Honours Degree in Arts and the parties then spent six [6] months in Scotland while the husband commenced but did not complete a Masters Degree. The wife worked as a nanny and the parties received rent free accommodation.
On 7 March 1988 the parties purchased the property in Scotland for £19,000.00 entirely financed by way of first mortgage to the Royal Bank of Scotland.
In 1988 the parties returned to Australia and the Scotland property was rented out. The husband resumed employment with L Organisation, and thereafter worked for R Organisation and the public service. The wife worked in the public service for a few months.
Between 1989 and 1992 the wife worked in the public service.
On 12 February 1989 the husband received approximately $50,000.00 from the Australian Taxation Office comprising a refund of overpaid Income Tax and interest thereon.
On 17 February 1989 the parties purchased the property at Y for $132,000.00 and registered it in the husband’s sole name. The parties obtained a loan from the husband’s parents for the purposes of purchasing this property. That loan was subsequently repaid by the parties.
In July 1991 the husband commenced specialised training at D Hospital.
In October 1991 the parties purchased the property at A for $120,000.00. This amount was obtained by way of an interest free loan from the husband’s parents ultimately in May 1992 secured by way of mortgage registered on the title to the property. The wife asserts that this loan has been repaid but the husband denies that.
In December 1991 the parties married.
In May 1992 the wife ceased employment.
On 12 June 1992 the property at Y was transferred from the husband’s sole name into the joint names of the parties.
In July 1992 the child S was born.
In 1992 the husband ceased dealing in coins.
By March 1993 the mortgage over the title to the Scotland property was fully repaid.
In October 1993 the property at Y was sold for $176,115.00 net.
In October 1993 the parties purchased the former matrimonial home at B1 for $355,000.00. The property was purchased with the proceeds from the sale of the Y property and a loan from the husband’s father.
In November 1993 the husband sold most of his coin collection for $400,000.00 net.
The parties repaid the husband’s father and undertook renovations to the B1 property with the proceeds from the sale of coins. The wife also asserts that the loan of $120,000.00 obtained from the husband’s parents to purchase the A property was repaid from these proceeds.
In 1993 the husband asserts that after the death of his mother he sold antique silverware which had been stored on his behalf at his parents’ home for approximately $80,000.00 to $100,000.00. The wife has no knowledge of this transaction.
In 1995 the husband commenced working in a general practice at M. There were two other partners but one was declared bankrupt and the other lost interest in the business. As a result the practice lost money and the husband worked part time in an attempt to make it successful.
In June 1995 the child V was born.
In June 1998 the husband lost his prescribing rights as a result of allegations that he was over-prescribing medication to patients. He was also suspended from his position at D Hospital.
In June 1998 the child E was born.
In August 1998 the husband qualified as a specialist and eventually he was able to sell the practice at M.
On 18 December 1998 the parties purchased a home unit adjacent to the former matrimonial home at B2 for $135,000.00. The property was purchased by way of a loan of $108,000.00 secured by mortgage and the balance from the parties’ savings. The mortgage was subsequently discharged.
In February 1999 the husband commenced private practice in P.
On 31 August 1999 the parties purchased a property at P for $210,000.00. The purchase was financed by borrowings of $168,000.00 and joint savings of $31,445.00.
On 9 December 1999 the parties purchased a property at V2 for $152,500.00. The purchase was financed by a loan of $121,168.00 and joint savings of $37,660.00.
In 2001 the wife commenced a Degree course in Art History.
On 9 October 2002 the parties purchased the property at V1.
On 11 January 2003 the parties purchased the property at B3 for $166,500.00. The purchase was financed by a loan of $133,000.00 and joint savings.
On 16 June 2003 the parties separated. The wife remained living in the former matrimonial home with the children and the husband moved to the A property.
On 18 July 2003 the wife filed a Form 3 Application in this Court seeking orders that the three children reside with her, that she have sole responsibility for their day to day care, welfare and development, and that the husband have supervised contact. The wife also sought injunctions against the husband and orders that by way of property settlement the assets of the parties be divided on a 75%/25% basis in favour of the wife.
On 8 August 2003 interim consent orders were made by a Registrar of the Family Court that the three children reside with the wife and that she have sole responsibility for their care, welfare and development, that the husband have contact with the children and he be restrained from approaching or remaining in the vicinity of the former matrimonial home. Injunctions were also placed on the parties to refrain from drug and alcohol abuse.
On 4 September 2003 the husband filed a Form 3A Response seeking orders that the wife’s application be dismissed.
On 21 October 2003 the Judicial Registrar made interim orders by consent for the sale of the properties at V1 and V2 and the payment of spouse maintenance of $500.00 per week pending the sale of the properties.
In 2003 the husband incorporated a company, T Company, and he commenced to operate his practice through this company.
On 3 November 2003 the husband filed an Amended Form 3A Response seeking final orders for property settlement, residence and contact.
On 26 February 2004 the husband filed a Form 63 Child Support Application in the Federal Magistrates Court of Australia seeking that the assessment of child support made on 18 December 2003 be set aside and that the previous assessment be restored.
On 9 March 2004 the wife filed a Form 63 Child Support Application in the Federal Magistrates Court of Australia seeking orders for departure from the child support assessments.
In April 2004 the said Form 63 Child Support Applications were transferred from the Federal Magistrates Court to the Family Court of Australia.
In mid 2004 the V1 and V2 properties were sold for $580,000.00 and after the payment of all of their mortgage liabilities, each of the parties received $62,195.00.
On 7 June 2004 an order was made that the order for spouse maintenance continue until further order.
In July 2004 the husband purchased the property at G for $800,000.00. This property was registered in the name of the husband’s company. The husband obtained a loan to finance the purchase of this property and he “cashed in” his superannuation receiving approximately $137,606.00.
In December 2004/January 2005 the husband ceased paying periodic child support.
The husband failed to comply with the order for spouse maintenance and by January 2005 the arrears were $8,000.00.
On 13 January 2005 the wife filed a Form 17 Third Party Debt Notice requiring the National Australia Bank to pay to her the sum of $8,435.00 from the account held by the husband at that bank and comprising the arrears of spouse maintenance and costs.
On 27 January 2005 the National Australia Bank paid the said amount to the wife.
On 17 February 2005 the wife filed a further Form 17 Third Party Debt Notice to the same bank seeking payment of the sum of $3,435.00 from the account held by the husband at that bank and being for further accumulated arrears of spouse maintenance and costs. However that notice was not able to be complied with as a result of the husband closing his personal accounts and only maintaining an account in the name of his company.
On 18 March 2005 the wife filed a Form 18 Application alleging contravention by the husband of the orders for the payment of spouse maintenance.
On 31 May 2005 an order was made by consent by the Judicial Registrar that the husband pay the sum of $11,000.00 by way of arrears of spouse maintenance and the sum of $2,000.00 by way of costs, and on that basis the Form 18 Application was struck out.
On 6 June 2005 the wife filed an Amended Form 1 Application for final orders.
In August 2005 the child S commenced to reside with the husband after she refused to return to the wife.
On 26 August 2005 the husband filed a Second Amended Form 1A Response seeking final orders.
On 9 December 2005 Judicial Registrar Forbes made orders in relation to the sale of the property at B3.
On 26 March 2006 I made procedural orders in relation to the sale of the property at B3.
On 9 June 2006 the wife filed a Form 2 Application seeking further orders in relation to the sale of the property at B3.
On 26 June 2006 I made the following orders:
76.1That the husband do execute a contract for the sale of [B3 property] in the terms of the contract attached to the Form 2 Application filed by the wife on 9 June 2006 on or before 5:00pm on Tuesday 27 June 2006.
76.2That if the husband should default in executing the said contract as provided by this order, that a Registrar or Deputy Registrar is hereby empowered to execute the same upon proof by affidavit filed by the wife as to such default and to do all such acts and things and to sign such documents as shall be necessary to give effect to the settlement of the sale of the said property.
76.3That the Form 2 Application filed by the wife on 9 June 2006 be dismissed and removed from the active pending list.
76.4That the question of costs of and incidental to this application be reserved to 5 July 2006.
On 30 June 2006 the wife file a further amended application for final orders.
On 5 July 2006 the wife’s application for costs was adjourned to 15 August 2006 and on that date it was further adjourned to be dealt with following delivery of my judgment.
On 17 July 2006 a child support assessment was issued for the period from 1 July 2006 to 31 December 2006 requiring the husband to pay $3,597.75 per month. On the same date a child support assessment was issued for the period from 1 January 2007 to 6 April 2007 requiring the husband to pay $1,754.42 per month. Also on the same date there were further child support assessments issued recalculating the amount of child support to be paid by the husband from 1 January 2005 to 30 June 2006.
On 2 August 2006 the wife filed a second further amended application for final orders.
The current circumstances of the parties
The wife
The wife resides with the children V and E at the former matrimonial home at B1.
The wife does not work. She receives spouse maintenance of $500.00 per week from the husband as well as a Family Tax Benefit of $200.00 per fortnight. There is a current child support assessment but in lieu thereof the husband is paying the children’s school fees at R College. V will be in Year 7 and E will be in Year 4 in 2007.
The wife currently does not spend any time with the eldest child of the marriage, S, who lives with the husband. The order made on 21 March 2006 provides for S to have counselling before commencing to spend time with the wife, but I do not understand that that has yet occurred. The children V and E though do spend time with the husband pursuant to that order.
At the time of the hearing the wife had a tax debt arising from the 2004 and 2005 financial years. The former substantially comprises Capital Gains Tax and the latter arose from income from rental properties which the wife did not in fact receive. The wife has made arrangements to pay this tax debt.
The wife has a cleaner attend at her home once per fortnight and she has lawn mowing and some gardening attended to.
The children attend an extra-curricula or an organised school activity every night of the week except Friday.
The wife says that she suffers from post-separation trauma and attends her general practitioner once each month and a psychologist on a regular basis. She takes medication for anxiety occasionally and to help her sleep.
The wife has borrowed money from her father, her brother and her sister-in-law. She currently owes her father $10,000.00, her brother $4,000.00 and her sister-in-law $4,000.00.
The husband
The husband lives in the house property at G. That home was purchased after separation and registered in the name of the husband’s company, T Pty Ltd.
The husband works in private practice. I find that his practice generates net income after business expenses of approximately $300,000.00.
The husband operates out of a serviced office for which he pays $5,000.00 per month.
Since August 2005 the child S has resided with the husband and the other two children spend time with him as referred to above.
S attends S College as well as the other children and she will be in Year 10 in 2007.
The husband employs a full time live in housekeeper for $350.00 per week and free accommodation.
The husband has been the subject of certain complaints investigated by the Medical Tribunal. One complaint was dismissed but an application for judicial review has now been made to the Supreme Court of South Australia. I have not been informed of the outcome of that application.
The husband is also still the subject of complaints of over-prescribing in the mid-90s. The husband though is applying to strike out these complaints as an abuse of process.
The husband continues to pay the school fees at S College in lieu of the child support assessments. As a result though there are substantial arrears. For example, as at July 2006 the arrears were $74,000.00.
The matters in dispute
Apart from two aspects the parties were able to agree the asset pool and the values of the same. The aspects in dispute are as follows:
98.1The mortgage to the husband’s parents registered on the title to the A property. The husband and his father assert that there is still an amount of $120,000.00 outstanding pursuant to that mortgage whereas the wife says that there is nothing owing. The wife says that the loan has been repaid, or, if it has not been it should not be taken into account.
98.2The amount of $18,000.00 withdrawn by the wife from a National Australia Bank account at separation. The husband says that that amount should be included in the asset pool but the wife says otherwise. The wife says that the money was spent by her on reasonable living expenses and legal costs.
In relation to the respective contributions of the parties the major issues in dispute are as follows:
99.1What assets the husband had at the commencement of cohabitation and the value of the same. The husband says that he had substantial collections of coins, antiques and silverware and the coins alone were worth approximately $1,000,000.00. He gave inconsistent evidence about this though on which I will elaborate shortly. The wife concedes that the husband had some coins, antiques and silverware but she says that the coins were only worth between $100,000.00 and $200,000.00 at the time.
99.2The husband claims that he made a significant contribution by way of his dealings in coins, antiques and silverware following the commencement of cohabitation. He says the parties travelled overseas on a regular basis for this purpose and those trips were funded by the transactions. The husband further says that the profits that he made enabled the parties to purchase a number of items of real estate.
The wife agrees that the husband dealt in coins but she says that there was no antique dealing and that with the silverware the purchase and sale of the items was generally undertaken jointly by the parties.
99.3The husband says that his parents provided a number of interest free loans to the parties during cohabitation for which he should receive credit. The wife agrees that a number of loans were made but says that they were all repaid by her and the husband and neither party should receive any credit for that.
99.4The husband also says that he should receive credit for his parents providing the parties with two motor vehicles, namely a Mazda motor vehicle worth $16,000.00 in 1992 and a Holden motor vehicle worth $34,000.00 in 1995. The wife says that these motor vehicles were gifts to the parties and should not be taken into account.
99.5Although there is agreement that the wife was the primary caregiver to the children there is a dispute over the husband’s role. He says he was significantly involved in the children’s care but the wife says his contribution was minimal.
99.6The wife says that post-separation the husband failed to satisfy his obligation to properly support the children. The husband stopped paying periodic child support in about December 2004/January 2005, and since then he has only paid the children’s school fees, but direct to the school. The husband says that overall the amount he has paid by way of school fees including ancillary fees offsets the child support assessments, and in any event the parties have now agreed that at least up to the commencement of the trial on 20 March 2006 the payments made by the husband are to be treated as entirely satisfying the child support assessments to that date.
In relation to Section 75(2) of the Family Law Act, the issues in dispute are as follows:
100.1The income of the husband. At the commencement of the trial the husband had not filed an Income Tax return for the 2004 or 2005 financial years and the wife claimed that his discovery was deficient such that it was not possible to precisely determine his income. The husband took advantage of a lengthy adjournment during the course of the trial and filed his 2004 and 2005 Income Tax returns just prior to the conclusion of the trial in August 2006, but he did not file a 2006 Income Tax return. He denied that his discovery had been deficient.
100.2The wife’s capacity to work. The wife has not worked since just prior to the birth of the child S in 1992, and she indicated that she had no intention of doing so until the children had left school. She also claimed that the husband’s behaviour towards her had left her with post-separation trauma and that effected her ability to not only work but to exist without being stressed and anxious.
The husband says that the wife is capable of obtaining employment and denied the allegations about his behaviour and the alleged affect of that on the wife.
The parties are in dispute over certain items of furniture that the husband wants from the wife. They are a dining room table, a piano, a bedside cabinet and a chest of drawers.
The parties each want the property at A. The wife says that it is a property that has been in her family for many years. The husband says that it is a property that he and the children now have a special affinity with.
The wife is seeking a continuation of the order for spouse maintenance but increasing to $1,500.00 per week. The husband opposes this and says that the wife will no longer need spouse maintenance once the final orders for property settlement are made, and in any event the husband challenges the wife’s alleged inability to work and her claimed expenditure.
In relation to child support, to repeat, the parties are agreed that there will be a “clean sheet” up to the date of the commencement of the trial. However they are not agreed as to what is to happen thereafter. I have set out above what each party proposes in this regard and there is no need to repeat that.
There is also a dispute as to whether an injunction can or should be granted to in effect provide security for the payment of any child support into the future.
The principles applicable to the matters before the court
Property Settlement
The provisions of Section 79 of the Family Law Act define the court's power and obligations in determining applications for property settlement. The court has a discretion to make orders altering the interests of parties in property, provided the court is satisfied that such orders are appropriate, just and equitable.
The court is obliged by the provisions of Section 79(4) of the Family Law Act to take into account the following matters:
107.1The financial and non-financial contributions 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 (sub-paragraph (a) and (b)).
107.2The contribution made by a party to the marriage to the welfare of the family, including any contribution made in the capacity of homemaker or parent (sub-paragraph (c)).
107.3The effect of any proposed order upon the earning capacity of either party to the marriage (sub-paragraph (d)).
107.4The matters referred to in Section 75(2) so far as they are relevant (sub-paragraph (e)).
107.5Any other order made under the Act affecting a party to a marriage or a child of the marriage (sub-paragraph (f)).
107.6Any child support payable (sub-paragraph (g)).
Accordingly, in assessing the entitlement of each of the parties for property settlement, there is both a retrospective element relating to the contributions of each of the parties and a prospective element relating to matters referred to in Section 75(2).
According to guidelines established through a series of leading decisions, the court should determine the following matters on the evidence, that is:
109.1Firstly, the court must determine the assets, liabilities and financial resources of the parties to the marriage.
109.2Secondly, the court must consider all relevant contributions of each of the parties, and, where possible, the court should assign an entitlement of each of the parties arising as a result of those contributions.
109.3Thirdly, the court should then consider the prospective components of the claims of each of the parties arising as a result of the provisions of Section 75(2). The court should then identify what alteration, if any, should be made to the entitlement of each of the parties earlier assessed on account of contributions having regard to the relevant Section 75(2) factors.
109.4Fourthly, the court takes a step back and considers whether the proposed orders are just and equitable.
Spouse Maintenance
The provisions of Sections 72 and 74 of the Act define the right of a spouse to maintenance and the court’s power in determining an application for spouse maintenance.
A party is liable to maintain the other party to the extent that the first mentioned party is reasonably able to do so only if the other party is unable to support himself or herself adequately whether:
111.1By reason of having the care and control of a child of the marriage who has not attained the age of 18 years.
111.2By reason of age or physical or mental incapacity for appropriate gainful employment, or
111.3For any other adequate reason having regard to any relevant matter referred to in sub-section 75(2). (Section 72)
The court may make such order as it considers proper for the provision of maintenance. (Section 74)
Sub-section 75(2) of the Act sets out the only matters that the court shall take into account in exercising its jurisdiction under Section 74.
Child Support
There have been child support assessments in place since 16 June 2003 and there is a current assessment which ends on 16 April 2007. The wife seeks orders departing from those assessments and orders providing for the periodic payment of child support in lieu of all future assessments pursuant to Division 4 of Part 7 of the Child Support (Assessment) Act 1989. The husband was seeking an order departing from those assessments but it appears that he is now seeking orders for the provision of child support otherwise than in the form of period amounts pursuant to Division 5 of Part 7 of the Act.
The relevant provisions of Division 4 and Division 5 are extensive and I will recite them later in these reasons for judgment where necessary.
In addition, to repeat, the wife seeks an injunction restraining the husband from dealing with his interest in certain property pending the youngest child attaining 18 years of age. This injunction is sought as security as the payment of child support by the husband. There is a dispute as to the jurisdiction of this court to grant such an injunction and I will refer to the relevant sections of the Child Support (Assessment) Act and the Family Law Act when addressing this issue later in these reasons.
The Evidence
The wife was represented by Mr Berman. She gave evidence and was cross examined. She relied on her affidavit filed on 19 December 2005 and her Form 13 Financial Statement filed on 2 November 2005.
The husband was represented by Ms Pyke QC. He gave evidence and was cross examined. He relied on his affidavit filed on 13 January 2006 and his Form 13 Financial Statement filed on the same date.
In the end result the wife did not call any other witnesses but she did rely on the affidavit of Dr B filed on 19 December 2005 and paragraphs 1 to 10 inclusive of the affidavit of her mother filed on the same date. The husband did not require either Dr B or the wife’s mother for cross examination.
The husband called one other witness, namely his father. The husband’s father filed an affidavit on 13 January 2006. He gave evidence and was cross examined.
The wife gave her evidence well. She showed signs of stress and distress at times but generally she spoke quietly, slowly and deliberately. I find her to be a helpful and credible witness. The only real criticism that could be levelled at her was her failure to reveal until cross examination that since the separation she has been consulting a psychologist, Ms T on a frequent and regular basis. She claimed to have become traumatised and suffered from a loss of self-esteem and confidence as a result of the behaviour of the husband towards her.
A subpoena was issued to obtain Ms T’s notes and for her to give evidence, but in the end result she still was not called as a witness.
The husband’s presentation of his case was chaotic, his affidavit and Form 13 Financial Statement were inadequate, and in a number of respects both were inconsistent with his oral evidence and/or the objective evidence, and in places inaccurate and misleading. His oral evidence was generally unhelpful and at times untruthful. He failed to make proper and adequate discovery in the lead up to the trial, and during the trial he lacked candour, he obfuscated, he was deliberately vague, and he attempted to play the wife’s counsel and this court for fools.
I have no hesitation in finding that save and except in respect of one or two matters, wherever the evidence of the husband conflicts with the evidence of the wife, I accept the wife’s evidence.
One example of how devious the husband was related to his Income Tax returns. Following the separation he did not file any personal Income Tax returns in the belief that that would ultimately assist his case, but when it became apparent as a result of cross examination that without any other documentary evidence it was open to the court to find that he had an income of approximately $300,000.00 net after business expenses, he hurriedly arranged for his accountant to prepare his 2004 and 2005 Income Tax returns and he presented them on the last day of the hearing. He was able to do this despite in cross examination denying that the preparation of his Income Tax returns was a simple exercise and justifying that by suggesting that no Group Certificates existed. He had also failed previously to discover the source documents despite them clearly being available, and he chose not to prepare his 2006 return or discover the source documents for that year.
It is also instructive to consider how the husband has used his company. For example, he purchased his house property at G in the name of his company and then the company claimed a deduction for the mortgage repayments despite the husband paying no rent and that home not being used for business purposes. The husband also justified not including his furniture in his Form 13 Financial Statement on the basis that “the company” owns it.
I find the husband determined to make life as difficult as possible for the wife. Examples of this were firstly him stopping all periodic child support payments in January 2005 when he became “angry” at the wife and he determined that he would not pay any child support to her “come hell or high water”. He unilaterally decided to pay the children’s school fees direct rather than pay any periodic child support to the wife and he has continued to do that despite the arrears of child support reaching $74,000.00 in July 2006. Secondly, the husband failed to comply with the orders of this court as to spouse maintenance, but after the wife was successful in obtaining the arrears of $8,435.00 direct from his bank account by way of a Third Party Notice, the husband then closed all of his personal bank accounts and only operated an account or accounts in the company name. The arrears continued to accumulate and the wife had to take other enforcement proceedings to have them paid.
An example of how misleading and inaccurate his affidavit was arose in paragraph 25 thereof. The husband deposed as follows:
“In October 1991, my parents purchased a property at [A]. This was a combination wedding/[S’s] birth present.”
However, this was completely untrue. The parents did not purchase the property, and of course if it was a present, there would be no loan outstanding as the husband and his father now allege.
In paragraph 8 of that same affidavit the husband deposed to an Australian Taxation Office investigation over seven [7] years which resulted in a determination that his income was over-declared, and all of the income tax paid by him was refunded with interest. Now this was correct, but in cross examination he claimed that he was involved with officers of the Australian Taxation Office in a conspiracy to defraud the Commonwealth. Now, if true, that clearly should have been in his affidavit. However, was it true? Once again the evidence of the husband on this issue was entirely unsatisfactory. It was quite apparent that something happened with the Australian Taxation Office but I am still not sure precisely what. All I can say is that the husband’s story was riddled with inconsistencies and I have no confidence that I have been told either the whole story or indeed the truth.
The starting point is the husband’s claim in his affidavit that he had substantial coins, antiques and silverware at the commencement of cohabitation and which four to five years later were worth $1,000,000.00 net. Then, during his lengthy examination in chief where evidence was presented which should have been in his affidavit the husband claimed that the coins were worth $1,000,000.00 at the commencement of cohabitation in 1984. However, the documents obtained from his discovery reveal “trading stock” worth $137,228.00 as at 30 June 1984 and decreasing to $106,881.00 by 30 June 1989 (see Exhibit W5). Thus the husband was in a bind, and his position became that that was not the full extent of his stock and that that was not its true market value. He asserted that he was able to use the figures that he did with the assistance of officers of the Australian Taxation Office and one in particular who subsequently became his accountant. However, the husband did not produce one relevant document which supported his claim in relation to the extent and value of his collections at the relevant times. He produced cheques, bank drafts and overseas transfers used to purchase coins prior to 1984, but they of course give no indication of what coins the husband still had at the commencement of cohabitation and particularly given the circumstance that he was regularly dealing in coins. Moreover, what was in his tax records was consistent with what he told the wife, albeit he denied the conversation.
Then there was the mystery surrounding the sale of coins for approximately $400,000.00 in 1993 and the involvement of the husband’s father in the same. Apart from the fact that the coins of which the wife was aware and which were the subject of investigation by the Australian Taxation Office were buried by the husband’s father in his backyard, the documents again from the husband’s discovery and presented to him in cross examination reveal that the proceeds of the sale of the coins were paid not to him but to his father (see Exhibit W8). Both the husband and his father in evidence denied any knowledge of this but I do not believe them. It is consistent with the husband during the Australian Taxation Office investigations preparing a document “transferring” all of his gold coins to his parents in November 1982, and the father declaring to the Australian Taxation Office that money in the husband’s ANZ bank accounts was in fact his money.
The husband’s father attempted to distance himself from the husband’s conduct in relation to the coins and the financial dealings, but I find that he was directly involved in much of what the husband did. For example, to repeat he assisted the husband during the Australian Taxation Office investigation by untruthfully claiming that money in bank accounts of the husband belonged to him. Further, he travelled to Melbourne specifically to take delivery from the husband of coins which were supposed to be retained in bank safe deposit boxes, and he subsequently buried them at the husband’s request in his backyard. This could have been for no other purpose than to hide the coins. He lamely suggested in cross examination that it was to provide easier access to the coins. However, I have no difficulty in rejecting that. Then, again, to repeat, the father received the proceeds of the sale of the coins in 1993, and I find that this was done for no other purpose than to assist the husband during the Australian Taxation Office investigation.
As a result, like the husband, I find that the husband’s father lacks credibility. He was also deliberately vague and seemed to have a selective memory. In short, I do not believe that he was telling me the truth about these matters.
The assets, liabilities and financial resources of the parties
At the commencement of cohabitation in 1984
The wife had the following:
Assets
Savings E $2,000.00
A motor vehicle N/K
Furniture and household effects N/KLiabilities
Nil
Financial Resources
Nil
The husband had the following:
Assets
Savings N/K
Coins, antiques and silverware N/K
Furniture and household effects N/K
Mazda motor vehicle N/K
Company plant and equipment N/KLiabilities
Nil
Financial Resources
Nil
In relation to these assets I make the following comments:
136.1The husband did not challenge the wife’s assertion as to the assets that she had at this time.
136.2The husband presented no relevant documentary evidence of his claim as to the extent and value of his coins, antiques and silverware. To repeat, all he said in his affidavit was that four to five years later his net worth was $1,000,000.00. Then, in his examination in chief he said that the coins were valued at $1,000,000.00 in 1984, but why he did not say this in his affidavit was never explained.
The wife’s evidence was that the husband told her that he had coins worth between $100,000.00 and $200,000.00. The husband denied this conversation but I believe the wife.
The only relevant documentary evidence of the husband’s assets at this time was the Asset Betterment Statement prepared by or on behalf of the husband for the purposes of his Income Tax returns and tendered during his cross examination (see Exhibit W5). That statement indicates that the husband’s “trading stock” had a market value of $137,228.00 as at 30 June 1984. To repeat, the husband claims that that was not the true extent of his collection and nor was it the true market value. He said he had other coins in Australia and overseas that he did not disclose and he was able to use figures which bore no resemblance to market value. He says that this was done with the connivance and assistance of officers of the Australian Taxation Office and was a fraud on the Commonwealth. However, whether this is so or not, and I confirm that I am not satisfied that the husband has either revealed all or indeed has told the court the truth, the only documentary evidence is still the Asset Betterment Statement and this is consistent with the wife’s evidence which I accept. Thus, I reject the husband’s claim that his net worth arising from his pre-cohabitation assets was $1,000,000.00, and I propose to use the figures from the Asset Betterment Statement.
The husband submits that for the parties to have accumulated the assets they did, his collections must have been worth more than $137,228.00. However, I do not agree. For example, the evidence as to how each item of real estate was purchased is not inconsistent with the collections being worth $137,228.00 in 1984. Importantly there is no issue that most of the husband’s then collection of coins was sold for $400,000.00 net in 1993.136.3In relation to the husband’s motor vehicle and his company plant and equipment the figures in the Asset Betterment Statement are respectively $3,440.00 and $1,600.00, although these are expressed to be at cost and not market value. From this Statement the husband also had savings of $5,616.00, although 30 June 1984 was of course not the precise date on which cohabitation commenced.
At the date of separation on 16 June 2003
The assets, liabilities and financial resources of the parties were as follows:
Assets
House property at B1 N/K
Property at B2 N/K
House property at B3 N/K
Property at P N/K
House property at A N/K
House property in Scotland N/K
Properties at V1 and V2 N/K
Furniture and household effects N/K
1992 Mazda 121 motor vehicle N/K
Holden Commodore Acclaim motor vehicle N/K
The husband’s superannuation entitlement N/K
The wife’s superannuation entitlement N/K
Coins and silverware N/K
The husband’s medical plant and equipment N/K
Rental monies from investment properties N/K
Savings N/KLiabilities
Money due to builder for bathroom renovations $3,901.00
Loans secured by mortgages over the titles to
some of the items of real estate N/KFinancial resources
Nil
In relation to these assets and liabilities I make the following comments:
138.1In mid 2004 the parties sold the V1 and V2 properties and discharged all outstanding mortgage liabilities on all of their properties. The net proceeds of $124,391.20 were divided equally between the parties and they are each responsible for any Capital Gains Tax assessed on them individually. The wife has paid her liability but because of the husband’s failure to lodge his income tax returns until recently he has not yet paid his liability.
138.2The husband “cashed in” his superannuation in October 2004 and he contributed the proceeds of $137,606.00 towards the purchase of the property at G.
138.3The wife withdrew $18,000.00 from the National Australia Bank account of the parties at separation. She says that she then used this to meet living expenses and legal costs.
138.4At the time of separation there was a mortgage to the husband’s parents registered on the title to the A property. There is a dispute between the parties as to whether there is any money owing pursuant to this mortgage and even if there is whether it should be taken into account.
138.5Subsequent to separation the builder instituted proceedings against the husband and the wife claiming payment of the $3,901.00. The wife paid out one half of this amount but the husband initially refused to pay anything. The builder pursued the husband for payment but the husband lodged a third party claim against the wife seeking that she satisfy the entire builder’s claim. In the end result the matter settled with the husband making a payment of $1,800.00.
At the date of the hearing
I find that the relevant assets and liabilities of the parties to be taken into account are as follows:
Assets
House property at B1 $875,000.00
Property at B2 $305,000.00
The net proceeds of sale of the house property at
B3 (including interest) $274,503.00
Property at P $365,000.00
House property at A $540,000.00
House property in Scotland $273,081.00
House property at G $800,000.00The husband’s share of the proceeds of sale
of the V1 and V2 properties $62,195.00
The wife’s share of the proceeds of sale
of the V1 and V2 properties $62,195.00
The wife’s furniture and household effects $44,554.00
The husband’s furniture and household effects $36,238.00
The husband’s Mazda motor vehicle $3,750.00
The wife’s Holden Commodore Acclaim motor vehicle $5,000.00
The wife’s superannuation entitlement $35,160.00
Rental moneys held by Raine & Horne $36,990.00
Rental moneys retained by the husband $12,628.00
Rental moneys held at the Royal Bank of Scotland $8,087.00
$3,739,381.00Liabilities
Mortgage secured over the title to the G property $601,000.00
In relation to these assets and liabilities I make the following comments:
140.1The value of B1 property is agreed at $875,000.00, but the husband seeks to add an amount of $42,633.00 to this value on the basis that the wife will sub-divide this property at some time in the future. The valuation report of Mr K which is annexed to the affidavit of the wife’s solicitor Angela Ferdinandy filed on 9 December 2005 raises the possibility of sub-division but after assessing the costs of the same and the likely sale price of the sub-divided land Mr K considered that “the value of the property with or without sub-division potential is $875,000.00”. However, his calculations were quite properly undertaken on the basis of the costs to a developer as opposed to the costs to the owner, and the husband submits that $42,633.00 of the costs to a developer would not have to be borne by the wife as owner. Apart from the fact though that the selling costs of the sub-divided land would still have to be borne by the wife as the owner and that it is more than likely that the wife would have to borrow the money to undertake the sub-division and then there would still be holding costs and that there would still be an element of risk involved in terms of what the land would sell for and what the balance of the property was then valued at, and thus in my view it is not appropriate to add back anything like the $42,633.00 suggested by the husband, the wife may not in fact do this at all. Therefore I reject this submission.
140.2On 26 February 2007 I was informed by both counsel that the property at B3 had been sold. The net proceeds were $270,088.69, $80,000.00 of which was paid to the wife pursuant to the order made by the Judicial Registrar on 9 December 2005 and the balance has been held. Currently the balance including interest is $194,503.00. The husband proposes that all of the proceeds be retained by the wife as part of her entitlement to property settlement and that she meet any Capital Gains Tax liability. The wife proposes that the proceeds be divided between the parties in the same proportion as the overall percentage division that I determine and the Capital Gains Tax be dealt with similarly.
140.3At trial I was informed by both counsel that the value of the house property in Scotland was agreed at $268,292.00. On 26 February 2007 I was informed by the counsel for the wife that the valuation that both parties were relying on was in Pound Sterling, namely ₤110,000.00. I was then informed that at the current exchange rate that equates to AU$273,081.00. The wife’s counsel proposed and the husband’s counsel agreed that that should now be the value that the court uses.
140.4The property at G was purchased by the husband through his company, T Pty Ltd. However, this is clearly the husband’s alter ego and thus it is appropriate for this property and the mortgage associated with it to be included in the schedule.
140.5To repeat, in relation to the properties at V1 and V2, the wife has paid her Capital Gains Tax liability but the husband has not yet done so.
140.6In relation to the furniture and household effects the parties have agreed most of what the husband is to have from the items retained by the wife. The figures that I have used in the schedule are agreed figures subject only to my decision as to the four further items that the husband seeks from the wife.
140.7The parties are agreed that the wife’s superannuation is to be included in the one asset pool with all the other assets.
140.8The husband sought to include the amount of $18,000.00 withdrawn by the wife from the parties’ National Australia Bank account. However, the wife opposed that on the basis that she used this money to meet the expenses of herself and the children and some legal costs. I accept the evidence of the wife about this and thus I have not included this amount in the asset pool (Chorn and Hopkins [2004] FLC 93-204).
140.9In relation to the mortgage to the husband’s parents registered on the title to the A property I find that the loan secured by this mortgage has been repaid in full and there is nothing outstanding. Both the husband and his father claim that the loan of $120,000.00 has not been repaid but I do not believe them. My reasons for this are as follows:
140.9.1the husband’s and his father’s lack of credibility generally;
140.9.2the ability of the husband to manipulate and control his father evidenced by how he used his father in hiding coins and the proceeds of their sale, and making false claims to the Australian Taxation Office about bank accounts;
140.9.3the memorandum of mortgage (Exhibit H15) was registered on 25 May 1992 despite the loan being made in October 1991. The only term of repayment is that the principal sum is payable on 1 March 2017. No installments are required and no interest is payable. Yet, the husband alleges that $80,000.00 of the $120,000.00 was repaid but then that $80,000.00 was borrowed again. However, the husband produced no documentation relating to these transactions and the father had a poor recollection of not only anything surrounding the loan but in particular whether there was any repayment and whether there was any further borrowing. Indeed, the father produced no documents about this loan other than a copy of the mortgage;
140.9.4despite the terms of the mortgage there was a schedule of repayments kept by the husband but it only went up to November 1992 (see Exhibit W12). Given the husband’s meticulous nature it would seem incomprehensible that if $80,000.00 of the loan had been repaid and then re-borrowed that he did not keep a record of this. The wife says and I accept that she was not told of any re-borrowing of money;
140.9.5it was only in cross examination that the husband claimed that the $80,000.00 had been repaid and then borrowed again. It was not in his affidavit of evidence in chief. Indeed, what was in his affidavit was errant nonsense. To repeat, he claimed that his parents purchased the A property and it became “a combined wedding/[S’s] birth present”;
140.9.6it is apparent from the evidence that the proceeds of sale of coins in 1993 were received by the husband’s father. Prima facie $240,000.00 of that money was then retained by the husband’s father and the wife suggests that part of that money was used to repay the $120,000.00 loan. I find that to be an entirely plausible proposition. The husband said nothing in his affidavit about this money going to his father and he produced no records to show what happened to the proceeds of sale. In cross examination all the husband’s father could say was that he could have kept $120,000.00 of the $240,000.00 in order to repay the loan, but he had no recollection of doing so;
140.9.7the wife’s evidence is that the husband told her that the loan had been repaid. I accept this evidence;
140.9.8in his application for a loan from the National Australia Bank to purchase the G property the husband did not include any loan to his parents in his liabilities (see Exhibit W3);
140.9.9the husband relies on the loan appearing in what he describes as “the state of the empire document” (Exhibit H10). However, that is far from determinative given for example it is not referred to on the page dealing with the family finances if the husband dies.
The husband says that he will have Income Tax liabilities for the 2004, 2005, and 2006 financial years. Now that may turn out to be correct, but no evidence was put before me as to what those liabilities will or even may be, and thus I cannot include any figure for this in this schedule.
Contributions
I now turn to the respective contributions of the parties pursuant to Section 79(4) of the Family Law Act.
Section 79(4)(a) and (b)
I have set out above the assets that each party brought into the relationship. These assets comprise their respective initial contributions under this heading.
As referred to already the most contentious issue here was the extent and value of the husband’s coins, antiques and silverware. I have found though that what the husband declared in his Asset Betterment Statement is the amount that should be used, namely $137,228.00 for “trading stock”.
This is still a significant contribution and far outweighs any initial contributions made by the wife. However, in accordance with the authority of such cases as Pierce and Pierce (1999) FLC 92-844 the initial contributions must still be weighed with the contributions that were made during cohabitation and following the separation.
Following the commencement of cohabitation in 1984 the husband made the following contributions:
146.1The husband continued to trade in coins and that provided income for the parties. The husband claimed in examination in chief that he made a profit of $150,000.00 between 1984 and 1991. However, I do not believe what the husband has to say about his coins and his dealings with them. Typically the husband did not depose to this in his affidavit of evidence in chief and there were no documents produced by him to substantiate his claim. Thus, although I accept that income was received I am not able to make a finding as to how much that was.
Significantly though, the value of the coin collection grew over time and when the majority of the collection was sold in 1993 net proceeds of approximately $400,000.00 were achieved. The husband’s evidence is that certainly 73 and maybe another 27 of the total of 144 coins sold were coins that he had at the commencement of cohabitation, and he says that these 100 coins accounted for approximately $300,000.00 of the sale proceeds. However, again I am not prepared to make a finding to this effect on the husband’s oral evidence alone. None of this was in his affidavit of evidence in chief and the only documents produced were a catalogue in which he identified the specific coins and a list prepared by him (Exhibit H6). I do accept though that there were coins sold which the husband had at the start and it is also important to recognise that the husband’s coin collection in 1984 provided the basis for his subsequent trading.
It was put to the wife in cross examination that the husband sold further coins between 1993 and 1998 for approximately $150,000.00, and that this was used primarily to fund some of the renovations to the former matrimonial home. The wife agreed that there were some coins sold in this period but she did not accept that $150,000.00 was received. Again, none of this was in the husband’s affidavit, no documents were produced, and although he briefly referred to it in his examination in chief it really only arose in cross examination of the wife.
In the end result, I simply do not accept that the amount received was as put to the wife. The husband was earning a high income and the parties had sufficient money to meet the commitments of the family and to acquire assets.146.2At the commencement of cohabitation the husband also had items of silverware and antiques. The silverware was held by his parents but it was subsequently sold. In his affidavit the husband says that this occurred at about the same time as the sale of the coins in 1993, and he received $80,000.00 to $100,000.00. Now, the wife did not concede this and in effect put the husband to proof of this claim. Again, the husband has failed to satisfy the court that he did receive this amount of money for the silverware. He did not produce any documentary evidence and I am not prepared to accept his evidence.
Following the commencement of cohabitation the husband says that he traded in silverware and antiques. The wife denies that there was any trading in antiques but she says, and I accept, that she developed an interest in silverware and that she and the husband would purchase items both in Australia and overseas and later sell them for profit.
The wife says that there were antiques, but any sale and purchase of the same was undertaken by both of them as a hobby and for their own personal use. I also accept this evidence of the wife.146.3At the commencement of cohabitation the husband was a qualified medical practitioner but he was studying another profession as was the wife. I have already set out in detail the subsequent working history of the husband and I will not repeat the same. The relevant issue though is there is no dispute that the husband’s income from his employment, from his medical practice and from his coin dealing was used for the benefit of the family. There is also no issue that overall the husband’s income exceeded that of the wife, however, when they were both working there were times when the wife’s income exceeded the husband’s, and there were times albeit not many when the wife was working and the husband was not.
Of course, this is not solely a contribution to the acquisition, conservation or improvement of any particular property of the parties or either of them, but it is still appropriate to refer to the income earnt by the husband and its use under this heading.
146.4To return to the husband’s coin dealing, he suggests that he was the sole contributor to this exercise. However, I reject this claim. The wife says that she accompanied the husband when he purchased and sold coins and she assisted him as best as she could. Further, at times the money used to purchase coins came from the wife’s income both when she was working and he was not and when they were both working.
146.5The parties purchased a property in Scotland in 1988. The entire purchase price was met by way of a loan secured by mortgage to the Royal Bank of Scotland. The parties lived in this property but when they returned to Australia in late 1988 they left the property in the hands of rental agents. The mortgage was fully repaid by March 1993 but there is a dispute in relation to where the money came from to achieve this. The husband claims that the mortgage was paid off quickly by the sale of part of his coin collection. The wife denies this and says that the mortgage was paid off from the rentals received for the property and where necessary from the joint income of the parties. Again, I accept the wife’s evidence in this regard, but of course I accept that part of the income of the husband which may have been used would have come from trading in coins.
146.6The husband was able to obtain interest free loans from his parents during cohabitation. Such a loan was obtained to enable the parties to purchase the property at Y in 1989, the property at A in 1991, and the property at B1 in 1993.
The husband claims that the first loan was repaid from his trading in antiques but I reject that and find that it was repaid from the joint income of the parties.
I have already found that the second loan was repaid from the proceeds of the sale of coins in 1993, and with the third loan the parties were in agreement that that was repaid from those proceeds. Nevertheless, the husband must get credit for the interest free nature of all these loans.146.7The husband’s parents also assisted in other ways, namely:
146.7.1after the parties returned from Scotland they lived for a few months rent free in a flat owned by the husband’s parents;
146.7.2the husband’s parents provided the parties with two motor vehicles during cohabitation, the first a Mazda motor vehicle costing $16,000.00 at the time of S’s birth in 1993, and the second a Holden Acclaim motor vehicle costing $34,000.00 at V’s birth in 1995.
I note that in cross examination the wife’s counsel put to the husband that the Holden was not a gift but was purchased by him. The husband denied this. However, it was not dealt with at all by the wife in her affidavit or in her oral evidence and on this issue I am inclined to accept the evidence of the husband and his father.
146.8There were extensive renovations undertaken to the Y property. The husband suggests that he not only paid for most of this but also that he undertook much of the work himself along with his mother. I reject these claims by the husband and find that the costs were met jointly by the parties and that apart from some minor assistance from the husband’s mother the parties together undertook the work and labour required.
146.9Renovation work was also undertaken to the A property. Again I find that that was a joint exercise in terms of the work and labour although I accept the evidence of the wife that she supervised the building work attended to by tradesmen. There is no doubt though that the costs were met from the husband’s income given the wife ceased outside employment to give birth to S in 1992.
146.10The parties also undertook substantial renovations to the property at B1. They are agreed that the cost of the same came from the proceeds of the sale of coins in 1993, and apart from the supervision of the building work neither party claims to have contributed more than the other to the work and labour required. The wife says that most of the work done was undertaken by tradesmen and that she was the one to supervise this. I accept this evidence and particularly given that the husband was working long hours throughout this period of time.
146.11The husband undertook specialist training in 1991 and worked as a registrar in a number of hospitals until qualifying as a specialist in 1998 and then commencing private practice in 1999. During this time he worked long hours both during the week and on weekends. This left the wife to attend to all things domestic including the care of the children.
146.12The wife says that apart from working long hours in his practice the husband effectively withdrew from family life. He became preoccupied with litigation that he was either taking or defending. For example, he was suspended from his employment as a registrar on the basis of allegations that he over-prescribed medication. The proceedings before the Medical Tribunal in relation to this issue are still ongoing. He has also had to deal with other complaints to the Medical Tribunal about his conduct. Thus it is not the case that the husband spending long hours in his practice or in his study at home was necessarily productive time benefitting the family.
146.13The husband received the sum of approximately $50,000.00 in 1989 from the Australian Taxation Office representing overpaid tax and interest thereon for the years 1978 to 1981. Initially there was no evidence from the husband as to what this money was used for but in typical fashion in his oral evidence he claimed that it was put towards the purchase of the Y property. That then meant that paragraph 18 of his affidavit of evidence in chief was incorrect where he in effect deposed that the purchase price of that property came solely from a loan from his father. Then he changed his evidence again and said that he did borrow the $132,000.00 from his father but he repaid part of this when the money from the Australian Taxation Office became available. However, the Y property was purchased on 17 February 1989 and according to Exhibit W5 the money from the Australian Taxation Office was paid out on 13 February 1989. Thus this is yet another example of how it is impossible to believe anything that the husband says.
The husband employs a live-in housekeeper to assist him in the care of S and which enables him to continue to work full time. The wife does not have that luxury and she personally attends to all of the needs of V and E.
The husband is easily able to support S financially but given that he pays no periodic child support for V and E the wife finds it difficult to support them. That will change with the result of these proceedings, but the wife will still not be in the same position as the husband and thus her burden will continue to be greater than his. This needs to be properly recognised.
(f) 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;
At the moment the wife has an entitlement to a Family Tax Benefit, but there is no evidence before me as to whether that will continue and if it does at what level.
(l) the need to protect a party who wishes to continue that party’s role as a parent;
The wife relies very much on this factor. She says that she does not want to work and she prefers to continue to be a full time parent. That is all very well but when she has the capacity to obtain appropriate gainful employment and there is a need to do so in order to support herself and the children, something has to give. She cannot for example sit back and say that she has the care of two children, that she needs to devote herself full time to their care, and the husband should go to work and support her. In any event, despite the fact that the children attend school and they have many extra curricular activities I do not accept that the wife needs to be available on a full time basis to care for them. I consider that the wife can adequately fulfil her role as a parent even if she works full time, and there can be no question that she can do so if she works part time. The children are at school during the day and there is before school and after school care available at S College.
(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;
Although the parties have reached agreement that there should be “a clean sheet” up to the commencement of this trial in relation to the payment of child support, I am still entitled to take into account the evidence as to what child support the husband has paid. To repeat, he met his child support obligation up until January 2005 and then he unilaterally determined to cease periodic payments and only pay the children’s school fees direct to the school. There is evidence before me as to the amount of school fees that the husband has paid, but the evidence is not such that I can determine whether what the husband paid equalled what he was required to pay periodically to the wife. However, even if it did, that still left the wife and the children in a difficult financial position given that she was not receiving child support in a way that allowed her to contribute the same to meeting the children’s ongoing daily needs. That of course is the basis for the payment of period child support.
The husband proposes to continue to pay the school fees by way of lump sum child support. Again, that will create difficulties for the wife in meeting the children’s ongoing daily needs.
The wife of course seeks that the husband pay periodic child support of $552.95 per week per child from the commencement of the trial until the husband’s liability for child support ends.
As I will elaborate on shortly I will not be making an order in the terms that either party seeks. However, I can say quite categorically that the child support that the husband pays into the future should be of a periodic nature assessed on the proper needs of the children including their school fees. Although the wife is concerned about the husband’s compliance with any child support assessment or departure order, it is not as though he has paid nothing al all, and I propose to proceed on the basis that the husband will in fact comply and provide the wife with an appropriate amount of child support into the future.
Conclusion on Section 75(2) factors
The wife’s counsel submitted that there should be a 25% adjustment in the wife’s favour as a result of a consideration of the relevant factors under Section 75(2), but the husband’s counsel submitted that there should only be a 10% adjustment in the wife’s favour.
The important considerations are the husband’s greater income and earning capacity, his greater entitlement to the net assets of the parties as a result of the respective contributions of the parties, the wife’s greater responsibility for the care of the children, and the husband’s past and future provision of child support.
The husband says that his greater income and earning capacity is offset somewhat by the consequence that he will be required to pay child support at a high rate, that there is a question mark in any event as to his future earning capacity as a medical practitioner given the complaints against him, and that there should be no adjustment for the care of the children.
The wife says that the disparity between their income and their earning capacity is the most significant issue. She says that her ability to find work is limited by her “fragile disposition” and her “substantial commitment to the care of the children”, yet the husband “has substantial means and he is able to earn significant income”.
I find that there should be an adjustment of 20% in the wife’s favour. I agree with the wife’s counsel that the most significant issue is the husband’s greater income and earning capacity. I accept though that the effect of the disparity is ameliorated somewhat by the consequence that the husband will be paying child support at a high rate but that still leaves the husband well ahead of the wife on this score. Nor does my finding as to the capacity of the wife to obtain paid employment reduce the disparity by much, and of course to repeat, there is insufficient evidence for me to take into account any risk to the husband’s future earning capacity.
Finally, apart from the disparity in their income and earning capacity I consider that part of the adjustment in the wife’s favour is justified by her greater responsibility for the care of the children.
Section 79(4)(d), (f) and (g)
Next, I am obliged to consider the effect of my proposed orders upon the earning capacity of either party (Section 79(4)(d)); any other order made under the Act effecting a party to the marriage or a child of the marriage (Section 79(4)(f)); and any child support under the Child Support (Assessment) Act that a party to the marriage is to provide or has provided for a child of the marriage (Section 79(4)(g)).
In relation to the first matter, it is apparent that the effect of my proposed orders will be to increase the earning capacity of the wife. She will have properties that she can rent out commercially or sell and invest the proceeds. She will also have money from the sale of the property at B3 to invest and earn income on.
In relation to the second and third matters, I have already taken them into account and there is nothing further to be addressed.
Conclusion
The net assets of the parties should be divided 65%/35% in the wife’s favour.
Furniture and household effects
The husband seeks the following:
Baltic pine turned leg dining table valued at $300.00
Piano valued at $1,200.00
Pedestal bedside cabinet valued at $70.00
Cedar chest of drawers valued at $250.00I will not repeat the evidence of the parties as to why they each seek to have these items but I propose to order that the wife retain all of them. In short, again I accept the evidence of the wife as to how the parties acquired these items and their current use, and on that basis there is no question that the wife should retain them. The table is constantly used by the wife and the children, the wife wants to retain the piano for use by the children, the cabinet is used by V, and the chest of drawers is used by the wife.
The A property
The value of this property is agreed at $540,000.00 and I have found that although it has not been formally discharged there is no money owing to the husband’s parents pursuant to the mortgage registered on the title. The issue now is that both parties want the property as part of their respective property settlement entitlements.
The land was originally purchased by the wife’s grandfather and his second wife in 1968, and they then built a beach house to be used by their extended family. Thereafter there was a roster system put in place for the use of this property by the family members and there were also numerous times when most of the family members attended there together.
In 1979 the property passed to the wife’s father and his siblings as tenants in common, and the roster system continued.
After the husband and the wife commenced to live together they stayed at the property from time to time. However, some family members gradually lost interest in the property and its condition deteriorated. The wife asked the husband to join with her in purchasing the property, and he agreed. An offer of $120,000.00 was made and accepted and the property was registered in the joint names of the parties in about October 1991. The purchase price was met by an interest free loan from the husband’s parents secured by mortgage later registered on the title to the property.
Thereafter the wife and the husband made the property available for use by members of the wife’s family at a nominal rent and they of course used it as well with their children. They also carried out renovations and improvements which I have referred to already.
This property has great sentimental value to the wife and she wants to retain it for use by herself, the children and her extended family. She conceded in cross examination though that in order to keep it she may have to rent it out commercially.
The husband says that he now has a greater affinity to this property than the wife. He lived in the property for approximately 18 months after the separation of the parties.
Since January 2005 the property has been available for both parties to use when they have the children with them, and they have taken that opportunity. The husband though says that the property is a special place for the children and that they want him to retain it for them. He says that while S will not spend any time with the wife it would only be if he has the A property that she will be able to enjoy going there at all, but more importantly with her sisters.
I find that the husband has gone to extraordinary lengths to manipulate the children in an attempt to prevent the wife from having this property. He had them cover every square inch of horizontal and vertical space in the house with notes for the wife to see when she went there. He also removed the lounge suite that the wife had put in there because he said the children would not use it and they were “distressed” by it.
I agree with Mr Berman that the husband has attempted to set the property up as some sort of a “family shrine” in an attempt to prevent the wife from having it.
Importantly, I also accept that if the husband is able to have the property he will continue to use it in ways designed to effect the relationship between the wife and the children and in particular S.
I find that the husband’s reasons for wanting the property are mere window dressing and in reality he only wants it to prevent the wife having it and to use it against her.
The husband’s counsel has submitted that the wife will not be in a financial position to keep this property and she would be forced to sell it. However, that submission is based on the result of this case being as the husband seeks. That is not the position though and on my calculations the wife can retain this property as part of her property settlement entitlement. Certainly it will still tie up a good deal of capital and I need to take that into account when considering issues such as spouse maintenance for example, but the wife can still rent it out commercially if she needs income, and/or she can borrow against it and/or as she said, one of her brothers is prepared to purchase a half interest to ensure that the property can be retained in the family. Thus, financial considerations are not an impediment to the wife having this property, and in all the circumstances she should have that opportunity.
Just and equitable
Pursuant to Section 79(2) of the Act, the court cannot make an order unless the court is satisfied that in all the circumstances it is “just and equitable” to make the order. To assess that I need to stand back and consider the practical effect of my proposed orders (Waters and Jurek (1995) FLC 92-635; JEL and DDF (2001) FLC 93-075; Phillips and Phillips (2002) FLC 93-184).
The net asset pool comprises a monetary equivalent of $3,138,381.00. Thus, the effect of my decision is that the wife is entitled to net assets to the value of $2,039,948.00 (rounded off), and the husband is entitled to net assets to the value of $1,098,433.00.
The husband has had, currently has, and seeks to have the benefit of net assets totalling $1,301,969.00 calculated as follows:
Assets
Property at B2 $305,000.00
Property at P $365,000.00
Property at G $800,000.00
Property in Scotland $273,081.00
The husband’s share of the proceeds of sale of
the properties at V1 and V2 $62,195.00
The husband’s furniture and household effects $36,238.00
The husband’s Mazda motor vehicle $3,750.00
Rental monies held by Raine & Horne $36,990.00
Rental monies retained by the husband $12,628.00
Rental monies held at the Royal Bank of Scotland $8,087.00
$1,902,969.00
Liabilities
Mortgage in relation to the G property $601,000.00Net $1,301,969.00
The wife has had, currently has, and seeks to have the benefit of net assets totalling $2,045,336.00 calculated as follows:
Assets
Property at B1 $875,000.00
Property at B2 $305,000.00
Property at A $540,000.00
65% of the net proceeds of sale of the property at
B3 (Including interest) $178,427.00
The wife’s share of the proceeds of sale of
the properties at V1 and V2 $62,195.00
The wife’s furniture and household effects $44,554.00
The wife’s Holden Commodore Acclaim motor vehicle $5,000.00
The wife’s superannuation entitlement $35,160.00
$2,045,336.00As can be seen both parties seek to have the property at B2. However, if the husband retains it he will have to pay to the wife the sum of $203,536.00, and if the wife retains it she will have to pay to the husband the sum of $5,388.00. On the evidence, the only obvious way the husband can make his payment would be by using his share of the proceeds of sale of the property at B3, the rental monies, and then borrowing the balance. On my rough calculations he would have to borrow approximately $63,000.00. Alternatively the wife could easily make her payment from her greater share of the proceeds of sale of the property at B3.
There was no evidence presented and no submissions made as to who should have this property, but doing the best that I can it would seem logical on the figures above that the wife should have it, and in any event it is situated next to the former matrimonial home where the wife lives. Thus, if she has the property then the figure of $1,301,969.00 above for the husband becomes $996,969.00 and the figure for the wife remains the same. On that basis the wife must pay to the husband the sum of $5,388.00. This assumes though that the net proceeds of sale of B3 and the interest earnt thereon is divided 65% to the wife and 35% to the husband. This is what the wife seeks but for some reason not explained to me the husband sought that the wife have all of the sale proceeds. In my view the most appropriate course is to divide these proceeds between the parties in the same proportion as the overall percentage division. Thus, given that the wife has already received $80,000.00, the balance of $194,503.87 should be divided $98,427.51 to the wife and $96,076.36 to the husband.
The husband says that because of his high income there should be an adjustment made to the percentages as a result of the properties that he is to retain attracting a greater Capital Gains Tax liability when sold than the properties retained by the wife. However, there is no evidence of what any Capital Gains Tax liability might be, and as a result the husband’s counsel could not tell me what adjustments I should make. Thus, there is no basis for me to make any adjustment for this.
I mention here that although the wife initially sought an order that, “all Capital Gains Tax payable with respect to [all] transfers…be paid in equal shares”. I was informed on 26 February 2007 that the wife was not pursuing that order. However, each party will be subject to Capital Gains Tax on their respective shares of the proceeds of sale of the property at B3.
On this analysis the wife will have the former matrimonial home at B1, the beach house at A, an investment property at B2, 65% of the proceeds of sale of B3 (subject to Capital Gains Tax liability), furniture and household effects, her Holden motor vehicle and her superannuation. She wants to retain A property for use by the children and her extended family, but she has the option of renting it out commercially and/or borrowing money on the security of the property and/or selling an interest in the same to her brother if she needs to. With the former matrimonial home there is a possibility of her sub-dividing that and selling off a portion of the land, and with the property at B2 she has the option of selling that and investing the proceeds if she wants to. There would be Capital Gains Tax assessed on the proceeds of the latter sale though.
It also must not be forgotten that the wife has substantial debts which she needs to pay, namely a total of $18,000.00 to her relatives, and she has legal fees of at least $35,000.00.
In relation to the husband he will have his house at G subject to a substantial mortgage, but one that he said in evidence he has no difficulty in servicing, he will retain his investment properties at P and in Scotland, he will have furniture and household effects, his Mazda motor vehicle, the rental monies, a small payment from the wife and 35% of the proceeds of sale of the property at B3. As with the wife he will have a Capital Gains Tax liability arising from the sale of this property. In addition, the husband will have Income Tax liabilities for the 2004, 2005 and 2006 financial years, although there was no evidence of what they will be.
Prima facie the result leaves the wife in a better financial position than the husband, but that is not a basis for making any adjustment. Any assessment of what is “just and equitable” must be undertaken in the knowledge of the reasons for the proposed orders in the first place. One of the prime reasons is the husband’s far greater income and earning capacity than the wife has, and importantly that will enable the husband to build up his asset base. Thus, there is nothing unjust or inequitable in the orders that I propose.
Spouse maintenance
The husband is currently paying spouse maintenance to the wife in the sum of $500.00 per week pursuant to orders of this court. She seeks that that continue but that the amount be increased to $1,500.00 per week. In the alternative she seeks a lump sum payment of $200,000.00. The husband opposes the payment of any spouse maintenance.
The order for spouse maintenance has clearly been justified up until now, but given my findings as to the wife’s capacity to earn income and my proposed orders for a property settlement I find that the wife will no longer satisfy the threshold test, namely that she is unable to support herself adequately (Section 72 of the Family Law Act). This, despite my findings as to the husband’s income and his attempts to prevent this court from learning what the true level of that is, his use of his medical practice company, and his unsatisfactory evidence not only surrounding his finances but generally.
Thus, I propose to discharge the current order for spouse maintenance and dismiss the wife’s application in this regard.
Child support
Both parties sought orders in relation to the child support assessments. Agreement was reached though that a departure order should be made for the period up to the commencement of the trial on 20 March 2006 providing for a “clean sheet” with no arrears payable by the husband and no repayments payable by the wife. Thereafter the wife seeks:
229.1That there be no payment by her to the husband in relation to the child S for the entire period until she turns 18 years of age in July 2010.
229.2That the husband pay $552.95 per week per child for the children V and E until the end of the year in which each child turns 18 years of age.
The husband’s case is that the “clean sheet” approach be put in place until the delivery of my judgment or at least until 1 January 2007 on the basis of him paying all school fees in the meantime, and thereafter he pay lump sum child support in an amount sufficient to satisfy school fees and related charges. I note though that he did not say anything about S’s position until I raised this with his counsel on 26 February 2007. His counsel then indicated that the husband’s liability for S up to the time that she went to live with him should be included. That though still did not address any liability of the wife for child support for S.
Although the basis on which the orders the wife seeks in relation to V and E were never articulated by the wife or her counsel beyond the sparse information in her affidavit of evidence in chief, it seems that she is relying on the grounds for departure set out in Section 117(2)(b)(ii) and Section 117(2)(c)(ia) of the Child Support (Assessment) Act 1989. Those paragraphs provide as follows:
Section 117(2)(b)(ii) – “that in the special circumstances of the case, the costs of maintaining the child are significantly affected because the child is being cared for, educated or trained in the manner that was expected by his or her parents;”
Section 117(2)(c)(ia) - “that, in the special circumstances of the case, application in relation to the child of the provisions of this Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child because of the income, property and financial resources of either parent.”
As at 20 March 2006 the child support assessment required the husband to pay $5,172.33 per month for all three children (Exhibit H17). Of course, only two children were living with the wife at that time, and on 17 July 2006 there was a reassessment on that basis which reduced the monthly amount to $4,367.25 (Exhibit W13). Further, on 17 July 2006 new assessments were issued providing for the husband to pay a monthly amount of $3,587.75 from 1 July 2006 until 31 December 2006, and a monthly amount of $1,754.42 from 1 January 2007 until 6 April 2007. It seems that the reason for the difference between these assessments is that the former takes into account the school fees payable for the children, but the second assessment does not.
The wife has lodged an objection to the second assessment but I do not know the result of that.
There were substantial arrears of child support as at 20 March 2006 as a result of the husband paying the school fees direct since January 2005 rather than paying the periodic child support assessed. That has continued to be the case until the end of 2006 and the arrears have increased accordingly. I do not know of course what has happened after 1 January 2007 but the husband’s case was that he would continue to just pay the school fees.
At this point I note that the school fees for the three children for 2006 at S College were approximately $31,500.00 in total. There was no evidence of the 2007 school fees for V and E.
The matters as to which a court must be satisfied before making an order departing from a child support assessment are set out in Section 117 of the Child Support (Assessment) Act 1989. Section 117(1) of that Act provides as follows:
“(1) Where:
(a) application is made to a court having jurisdiction under this Act for an order under this Division in relation to a child in the special circumstances of the case; and
(b) the court is satisfied:
(i)that one or more of the grounds for departure mentioned in subsection (2) exists or exist; and
(ii)that it would be:
(A) just and equitable as regards the child, the carer entitled to child support and the liable parent; and
(B) otherwise proper;
to make a particular order under this Division;
the court may make the order.”
In relation to these requirements there does not seem to be any issue about special circumstances here, and thus I turn to whether there is a ground or grounds of departure. Neither party spent much if any time on this either in their documents, their evidence or their submissions. However, in relation to Section 117(2)(b)(ii) there is no doubt that the costs of maintaining the children are significantly effected because they are being educated and trained in the manner expected by both parties, and thus this ground may be established. This of course not only applies to their tuition fees but to all ancillary costs and including the costs of their extra-curricular activities. The question though is whether there is any basis for changing the assessments that applied between 20 March 2006 and 31 December 2006, given that they make allowance for this circumstance. The assessment from 1 January 2007 does not make any specific allowance for school fees and ancillary costs, and thus it is probably the case that this is a basis for varying this assessment. In relation to Section 117(2)(c)(ia) there is no issue that the income of the husband is far higher than the amounts used by the agency in order to calculate the child support payable since 20 March 2006, but that per se is not enough. There must be something else special or unusual about the case that will justify an increase. In this regard the wife points to the actual cost of caring for each child, and says that without more from the husband the application of the Act results in an unjust determination of the level of child support to be paid given the extent of the husband’s income.
In paragraph 242(x) of her affidavit of evidence in chief the wife sets out “the children’s estimated weekly expenses”. The total is $1,681.47 including school fees and ancillary costs with a further $46.30 specifically for V and $22.15 specifically for E.
It was unclear from her affidavit whether these expenses were for three children or only for the two children in her care, but in cross examination she said that apart from where it was specified they were the estimated weekly expenses of all three children. On that basis, and only allowing for individual variation where there was evidence allowing me to do so the alleged costs for V would be $604.79 per week and for E would be $582.64 per week.
The weekly amount sought by the wife from the husband is $552.95 for each of V and E. Nothing was put to me as to how that was calculated, but I assume that that amount is based on the expenses set out in paragraph 242(x) because the wife specifically relied on this for her application in this regard. This is borne out by the circumstance that in the wife’s affidavit filed on 9 March 2004 in support of her Form 63 Application transferred from the Federal Magistrates Court in April 2004 wherein she sought payment of the same amount of $552.95 by the husband for each of the three children, she set out an almost identical list of expenses for those three children which totalled $1,658.85, namely precisely $552.95 for each child.
Thus it seems that what the wife is saying is that “the total costs of the three children are at least $1,658.85, thus the cost for each child is $552.95, and because I am not working and I have no intention of doing so until the children have left school the husband should meet all of the costs of [V] and [E]”. I note at this stage that one difficulty with that is that although the wife is seeking the same amount to be paid for each of the two children on this occasion the costs set out in paragraph 242(x) total more than $1,658.85.
The wife was not specifically cross examined as to the expenses set in paragraph 242(x), but the husband certainly challenged the wife’s total expenditure for herself and the children set out in her Form 13 Financial Statement filed on 2 November 2005. It was put that she had exaggerated her expenses because she simply did not have the money to actually be paying the claimed expenses. In response the wife attempted to explain the shortfall by saying that some of the costs of the children go on the school accounts paid by the husband, and there are some costs that she is just not able to pay.
In the end result the evidence does not allow me to make a precise finding as to the proper needs of each of the children V and E. Firstly, I am not satisfied that the list of expenses set out in sub-paragraph 242(x) properly represents the total expenses of the children now given that it is merely a repeat of the list that was prepared in early 2004. Secondly, and more importantly the amount sought is calculated on the total costs of three children rather than two, and I am not satisfied that I can simply extrapolate from the total costs of three children the individual costs for V and E and particularly given that many of the expenses are simply a proportion of the total household expense.
Thus, I cannot be satisfied that the assessments in place between 20 March 2006 and 31 December 2006 are an unjust or inequitable determination of the level of financial support that should be provided by the husband.
The husband of course, without any specific evidence or any submissions to justify it, seeks an order that he pay the school fees by way of lump sum child support. That bears no resemblance to his application for departure filed in the Federal Magistrates Court of Australia in February 2004 and subsequently transferred to this court. It entails the application of Division 5 of Part 7 of the Child Support (Assessment) Act 1989, yet the husband’s counsel did not refer me to the relevant sections of that Division and indicate how they might be applied. Thus, I simply have nothing before me that would allow me to make the order sought.
Accordingly, the assessments for the period 20 March 2006 to 31 December 2006 should remain in place and the husband should be required to satisfy the same subject to him being given credit for a proportion of the school fees that he paid for the 2006 calendar year for V and E. That proportion should be the same as the number of days between 20 March 2006 and 31 December 2006 bears to the entire year. If I need to make an order about that I will, but I propose to leave that until I deliver this judgment and then seek input from counsel. It may be that it can be attended to administratively by the Child Support Agency.
In relation to the child support assessment for the period 1 January 2007 to 6 April 2007, to repeat I am satisfied that a ground of departure is made out given that the two children are continuing at S College and the costs of maintaining the children would be significantly effected because of that. However, to also repeat I am not able to make a finding as to the proper needs of the children and there is also no evidence of the school fees for 2007. Thus, I am not prepared to make the order for departure sought by the wife in relation to this assessment. Nor, am I prepared to make the order sought by the husband for the same reason as I indicated in relation to the assessment up to 31 December 2006. Instead, I find that it is just and equitable as regards the children, the wife and the husband and otherwise proper to make an order increasing the annual rate of child support payable by the husband by the amount of the compulsory fees payable to S College for each child for the 2007 calendar year. This is consistent with previous variations of the administrative assessments.
In determining the justice and equity of such an order, and whether it is otherwise proper, I have taken into account as best as I can on the evidence before me all of the factors referred to in sub-sections 117(4) and 117(5) of the Child Support (Assessment) Act 1989, and in particular:
248.1The proper needs of the children.
248.2My findings as to the income and property of each of the parties.
248.3The hardship that would be caused to the wife and the children by the refusal to make an order.
248.4The fact that the change to the assessment will not necessarily affect the wife’s Family Tax Benefit.
248.5The nature of the duty of a parent to maintain a child and the fact that it is a primary duty.
In the circumstances that is as far as I am prepared to go. I am in no position to make a departure order beyond 6 April 2007. Apart from the fact that the evidence does not allow me to make a specific finding as to the proper needs of both V and E, the order sought by the wife is based on the wife not working and I have found that she has the capacity to do so, and it also assumes that the children will continue to attend a private school until they reach 18 years of age.
Similarly, the prospect of changed circumstances renders it inappropriate to make the order for departure sought by the husband, even if I had some evidence and some submissions in support of the orders that he seeks.
I note that the child support system is in the throes of significant changes and in my view it is far better to leave the parties and the children subject to that system at the moment than to fix child support for the future on inadequate information.
This also applies to S. The wife presented no evidence and made no submissions in relation to the departure orders she sought for S. Indeed, I do not even know if there is a current child support assessment providing for the wife to pay child support for S. However, given the agreement reached by the parties I consider it appropriate to make the order sought up to the commencement of the trial.
Injunction
The wife seeks an order restraining the husband from dealing with the properties at P “pending …/6/16”.
The basis for this injunction is to provide security for the payment by the husband of child support until the youngest child turns 18 years of age in 2016.
The wife points to the history of the husband’s payment of child support in support of this application. She says that he has failed to make payments pursuant to the assessments and he has unilaterally determined how and what he should pay.
The husband opposes the application saying that there is no jurisdiction in this court to grant the injunction sought, but if there is then there is no basis for it to be granted.
The application was clearly made on the basis that this court would be making a departure order which provided for the payment of child support by the husband until June 2016 when the youngest child turns 18 years of age, however, that is not the case. My order will cover the period up to the expiry of the current assessment on 16 April 2007 and thereafter the parties will be subject once again to the child support system. Given that, even if I have jurisdiction I certainly will not be making an injunction which extends beyond my departure order. There is no telling what if any assessments or orders might be put in place after 16 April 2007.
Pursuant to Section 99(1) of the Child Support (Assessment) Act 1989 the Family Court is invested with jurisdiction in relation to matters arising under that Act, and the source of power to make an order providing for security is Section 141(1) of the Child Support (Assessment) Act. That relevantly provides as follows:
“In exercising its powers under this Act, a court may do all or any of the following:
…
(d) order that payment of an amount ordered to be paid be wholly or partly secured as the court specifies;
(e) order that any necessary deed or instrument be executed, and that such documents of title be produced and such other things be done, as are necessary to enable an order to be carried out effectively or to provide security for the due performance of an order;
…
(k) make an order imposing terms and conditions;
…
(n) make any other order (whether or not of the same kind as those referred to in paragraphs (a) to (m) (inclusive)) that the court considers appropriate;”
Thus, I consider that this court has the power to make the order sought. Alternatively, or additionally, I consider that as a result of Section 100 of the Child Support (Assessment) Act providing that the Family Law Act applies as if the proceedings are proceedings under Part VII of that Act, there is jurisdiction to grant the injunction pursuant to Section 114(3) of the Family Law Act and even at a stretch pursuant to Section 68B(2).
However, the next question is whether it is appropriate to make the order sought, and in my view it is not.
Although the husband ceased paying periodic child support in January 2005, it is not as though he has not paid anything at all. In lieu of periodic child support he has paid the school accounts covering tuition fees and ancillary costs for the children, and that has been of substantial benefit to the wife and the children. Granted, his unilateral decision in that regard has made it difficult for the wife to meet the day to day needs of the children, but for a reason which has not been explained to me nothing was done to rectify that situation except for the filing of applications to review the assessments.
The wife also points to the husband failing to make payments pursuant to the orders for spouse maintenance, but of course that was remedied and the husband has kept up his payments in this regard since approximately the middle of 2005.
I have found that the husband has behaved inappropriately towards the wife and he has attempted to make life difficult for her at every turn, but the recent history of the husband’s payments for the children do give the court sufficient comfort that he will pay the required amount of child support certainly until the expiry of the order for departure on 16 April 2007.
Thus I propose to dismiss the wife’s application for an injunction.
I certify that the preceding
264 numbered paragraphs are
a true copy of the reasons herein of the
Honourable Justice Strickland.
The 9th day of March 2007.
……………………………………….
Associate
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Injunction
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Remedies
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