Simpson and Simpson

[2014] FamCA 1131

FAMILY COURT OF AUSTRALIA

SIMPSON & SIMPSON [2014] FamCA 1131

FAMILY LAW – PROPERTY – Interim – Where the wife seeks an order that the husband continue to make certain payments in respect of bank liabilities and general family expenses – where the wife seeks an order for litigation funding – where the wife seeks an order for increased spousal maintenance – where the wife seeks a child support departure order – where both parties seek an order for the sole use of the recently constructed family home – where the wife seeks an order that her current residence be sold upon her occupation of the recently constructed family home – where both parties seek an injunction.

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

F and F (1989) FLC 92-031
Mullane v Mullane (1983) FLC 91-303
Re Dovey; ex parte Ross (1979) FLC 90-616
Strahan v Strahan (2011) FLC 93-466

APPLICANT: Mr Simpson

RESPONDENT: Ms Simpson

FILE NUMBER: BRC 4117 of 2014

DATE DELIVERED: 15 December 2014

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Forrest J

HEARING DATE: 8 December 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Kirk of Queen's Counsel

SOLICITOR FOR THE APPLICANT: Hartley Healy Lawyers

COUNSEL FOR THE RESPONDENT: Mr North of Senior Counsel

SOLICITOR FOR THE RESPONDENT: Rice Naughton

Orders

IT IS ORDERED

(1)That, until further order, the Husband, or an entity that he controls pay directly to the relevant entity, financial institution or service provider, as and when they fall due all of the following:

(a)The periodic repayments for each loan secured by registered mortgage over all real property including but not limited to the property at 1 B Street, Town C, 2 B Street, Town C, E Street, Suburb D, and professional offices including at A Street including but not limited to:

(i)        NAB loan account number …061;

(ii)       NAB loan account number …847;

(iii)     NAB loan account number …381; and

(iv)      NAB loan account number …771.

(b)All further PAYG quarterly tax payments of the Wife as and when they become due and payable to the ATO but only to the extent that those tax payments arise as a consequence of monies having been distributed from any of the entities controlled by the Husband, with the Wife to provide the Husband with the notices requiring payment of those amounts as soon as practicable after she receives them;

(c)The electricity account, including the connection and usage charges in respect of the property in which the Wife resides, with the Wife to provide the Husband with any such account that she receives as soon as practicable after she receives it;

(d)The gas account, including the connection and usage charges in respect of the property in which the Wife resides, with the Wife to provide the Husband with any such account that she receives as soon as practicable after she receives it;

(e)The Telstra phone, internet, Foxtel and mobile phone service package (as currently described in Telstra account number … or such other account number as may be advised by the Wife to the Husband), with the Wife to provide the Husband with any such account that she receives as soon as practicable after she receives it;

(f)The local government rates, water connection and usage charges in respect of the property in which the Wife resides, with the Wife to provide the Husband with any such account that she receives as soon as practicable after she receives it;

(g)The home and contents insurance policy in respect of the property in which the Wife resides, with the Wife to provide the Husband with any such account that she receives as soon as practicable after she receives it;

(h)The comprehensive motor vehicle insurance premium for the Mercedes vehicle (Queensland Registration number …) in the possession of the Wife, with the Wife to provide the Husband with any such account that she receives as soon as practicable after she receives it;

(i)The Queensland vehicle registration fee, including compulsory third party insurance for the Mercedes vehicle (Queensland Registration number …) in the possession of the Wife, with the Wife to provide the Husband with any such account that she receives as soon as practicable after she receives it;

(j)The costs associated with all servicing, maintenance and lease payments in respect of the Mercedes vehicle (Queensland Registration number …) in the possession of the Wife, with the Wife to provide the Husband with these costs to only be payable by the Husband in the event the Wife obtains the Husband’s written consent prior to the works being carried provided that such consent is not unreasonably withheld, with any such account that the Wife  receives as soon as practicable after she receives it;

(k)The comprehensive motor vehicle insurance premium for the Mercedes Van (Queensland Registration number …) in the possession of the Wife, with the Wife to provide the Husband with any such account that she receives as soon as practicable after she receives it;

(l)The Queensland vehicle registration fee, including compulsory third party insurance for the Mercedes Van (Queensland Registration number …) in the possession of the Wife, with the Wife to provide the Husband with any such account that she receives as soon as practicable after she receives it;

(m)The costs associated with all servicing, maintenance and lease payments in respect of the Mercedes Van (Queensland Registration number …) in the possession of the Wife, with the Wife to provide the Husband with these costs to only be payable by the Husband in the event the Wife obtains the Husband’s written consent prior to the works being carried provided that such consent is not unreasonably withheld, with any such account that the Wife  receives as soon as practicable after she receives it;

(n)The Medibank Private health insurance premiums for the policy (Member number …) covering the whole family, including the Wife and the children.

(2)That as and when the Husband periodically pays, or causes to be paid each of the accounts required to be paid by him pursuant to paragraph 1(b) to (n) hereof, he shall inform the Wife by text message or email that the particular account has been paid as soon as practicable after it is paid.

AND, BY CONSENT, IT IS FURTHER ORDERED

(3)That the property at E Street, Suburb D be sold forthwith and each party take such steps as shall be required to sell the property upon the following terms:

(a)The property be listed with such agent as the parties shall agree and failing agreement, each party shall be entitled to appoint an agent with those agents acting in conjunction;

(b)The property be listed for sale by private treaty at a price as agreed or the value assessed by L Valuers;

(c)That should an offer be made within 5% of the list price and either party shall desire to accept that offer, then the other party shall be required to also accept that offer notwithstanding the offer may be subject to conditions relating to finance, building and pest;

(d)That should the property not be sold within 6 months or each lesser period as may be agreed, the list price shall be reduced by 5% with the above condition 3(c) remaining in force.

(4)That the net proceeds of sale be paid as agreed and failing agreement to the Trust account of Hartley Healy pending Order of the Court.

AND IT IS FURTHER ORDERED

(5)That pursuant to s 80(1)(h) of the Family Law Act 1975 (Cth), on or before Friday 6 February 2015, the Husband or an entity he controls, pay directly to the Rice Naughton Family Law Trust Account the sum of $500,000 to be used as the wife sees fit pending the final hearing of all matters in dispute between the parties with such sum being hereby categorised as a partial distribution of property to the Wife.

(6)That from midday on Saturday 20 December 2014 until further Order, the Wife shall have the sole right to use and occupy the real property situated at 1 B Street, Town C in the State of Queensland to the exclusion of the Husband.

(7)That from midday on Saturday 20 December 2014 until further Order, the Husband be restrained, and an injunction is issued restraining the Husband from coming within 100 metres of the Wife or her place of residence save for the purposes of collecting and/or delivering the children at the commencement and conclusion of time that they spend with him, and specifically, this injunction restrains the Husband from going onto the real properties situated at 1 and 2 B Street, Town C in the State of  Queensland, save for the purposes of collecting and/or delivering the children from and to the Wife’s residence.

(8)That until further Order, pursuant to section 117 of the Child Support (Assessment) Act 1989 (Cth), the monthly rate of child support payable by the Husband to the Wife in respect of the children K, born … 2002, G, born … 2004, W, born … 2007 and J born … 2009, be varied to $7,000 per month in respect of the following periods:

(i)15 December 2014 to 30 June 2015;

(ii)1 July 2015 to 30 June 2016;

(iii)1 July 2016 to 31 December 2016.

(9)That until further Order, pursuant to section 124 of the Child Support (Assessment) Act 1989 (Cth), the Husband shall provide child support for the said children by payment of all costs and fees in respect of the children’s attendance at A School (“the school”) or such other school as may be agreed between the parties, including but not limited to:

(i)Tuition fees and levies;

(ii)Building and resource fees and levies;

(iii)The costs for each child to attend at school based extra-curricular activities and sport;

(iv)The costs of each child attending at school camps and excursions which each child is expected to attend as part of their normal school curriculum;

with such payments to be made directly to the school by the Husband as and when they fall due.

(10)The annual rate of child support payable by the Husband pursuant to the Order departing from the administrative assessment of child support payable by the Husband in respect of the four children contained in paragraph 8 hereof is not to be reduced by the child support payable by the Husband as ordered in paragraph 9 hereof.

(11)That when the parties have received the valuations in accordance with the Orders of 22 July 2014 (as amended on 5 September 2014) they shall participate in a mediation to be convened by a mediator selected by agreement between them or failing agreement within two weeks of receiving all such valuations then by a mediator selected by the Husband from a panel of three mediators whose names are selected by the Wife and put to the Husband.

(12)That the fees charged by the Mediator and any expenses associated with hiring a venue for the mediation shall be paid in equal shares by the parties with the Wife to pay her half share only after she has received the sum of $500,000 provided for in paragraph 5 hereof, the Husband to meet her share, if necessary, until then.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Simpson & Simpson has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 4117 of 2014

Mr Simpson

Applicant

And

Ms Simpson

Respondent

REASONS FOR JUDGMENT

1.The parties to these proceedings separated on a final basis in November 2013, after approximately 13 years of marriage during which four children were born to them.

2.Disagreement about many issues relating to their co-parenting and financial situation soon brought them to this Court with the husband filing an Initiating Application in May this year seeking extensive property adjustment and parenting orders on a final basis and an interim basis.  The wife filed a Response in July. On 11 July 2014 some interim orders, particularly about parenting issues, were made by the Acting Principal Registrar with the consent of the parties. Other competing interim applications were then listed for hearing later in the year.

3.Disagreement and conflict continued and on 10 November 2014 the wife filed an Amended Response in which she amended her application for various interim orders. The matter eventually came before me in the duty list on Monday 8 December for the hearing and determination of the numerous contested applications for interim orders.

4.Knowing I had no prospect of reading all of the affidavits that had been filed in the matter and hearing and deciding it in an otherwise busy duty list that day, the matter was adjourned to be heard the next day. In the end, the matter was heard on Tuesday 9 December 2014 and the hearing alone took around four hours.

5.For determination are applications for orders that the husband continue to make certain payments in respect of bank liabilities and other regular family expenses until finalisation of financial matters between the parties, for the husband to pay interim litigation costs funding for the wife, applications by each party for injunctions granting them sole use of the recently constructed family home in a prime position on the Sunshine Coast of Queensland, an increase in spousal maintenance payments sought by the wife and also child support departure applications pursuant to the Child Support (Assessment) Act 1989 (Cth).

Some background

6.When the husband and the wife met, the husband was a young professional not long having gone into private practice. He had property interests that he contends had a value of about $3.5 million at that time. The wife worked in unskilled employment but was studying at the same time and was in the early stages of that study. She did not have anything like the property interests the husband had at that time. They lived, worked and studied in Brisbane. They married in 2001. At that time, the husband was almost 36 years of age and the wife was approaching 33 years of age.

7.Their first child, a girl, was born in 2002. Their second child, another girl, was born in 2004. Their third child, a boy, was born in 2007. Their fourth child, another boy, was born in 2009.

8.During their marriage, the wife finished her professional studies but, by apparent agreement, focused principally on parenting the couple’s children whilst the husband focused principally on growing his professional practice and generating income that supported the family and the acquisition of more and more property. At the same time, the wife maintained her professional registration and skills by working as an assistant to a Brisbane professional for approximately three days per month.

9.At some point in time, the couple acquired a valuable home in the Brisbane suburb of D and the family moved in and lived there for a while. They also bought another very valuable waterfront property on the Sunshine Coast and the family relocated there to live in that property in 2011. The wife and children lived in that property full-time from that time on with the children all going to a private school reasonably close to their new home. The husband continued to practice in Brisbane and during the week he lived in the family’s Suburb D home, generally travelling to the Sunshine Coast to be with the wife and children on weekends. The wife would travel back to Brisbane to do her professional assisting on three days per month.

10.One can only describe the income generated by the husband in recent years, at least, as substantial. Prior to the parties’ separation that income supported a very comfortable lifestyle enjoyed by the entire family that included private school education for the four children, Sunshine Coast waterfront living, travel, and the day to day use of multiple numbers of luxury motor vehicles as well as a luxury motor boat. At the same time, the family’s wealth has grown substantially. The position presented by the husband at the hearing is that the couple now have an estimated net wealth of around $10 million, after taking into account around $9 million in current debt. For the wife, that was said to present a conservative view of the value of their net property interests. 

The sole use application

11.Importantly, early last year, the family moved out of their Sunshine Coast waterfront home and into a rental property nearby. They demolished the existing home and began construction of a new $5 million luxury home on the same block of land. A few months later they bought the property next door to that existing property and moved into the home on that property whilst watching and awaiting the completion construction of their “dream home” on the block next door.

12.Sadly for the entire family, before their new home was completed, the husband and wife finally separated in November 2013, with the wife obtaining an order pursuant to Queensland family violence protection legislation excluding the husband from the home she and the children were occupying next door to the construction site. Not surprisingly, the husband then simply remained in residence in the family’s D property in Brisbane rather than travelling up to the Sunshine Coast at the end of his working week, as he had been.

13.Their differences and the conflict that led to their separation continued post-separation. Each of the husband and the wife has retained specialist family lawyers to advise them and represent their interests. Serious disagreement about parenting arrangements has drawn the children into the conflict. The parties have engaged in family therapy with an experienced Brisbane family therapist. Another experienced Brisbane social worker was also engaged to see the family and assist them and the Court with the provision of a family report. Following the provision of that report, the parents have been able to agree that the children spend alternate weekends and half holidays in the father’s care, but notwithstanding that fact, the parenting dispute has barely dissipated. The father pursues an equal shared care arrangement. The mother opposes that. Currently, the parties’ 12 year old daughter is refusing to spend time with her father. She and her younger sister are seeing a psychologist to assist them with emotional difficulties they are experiencing following the separation of their parents.

14.Even though the husband practices as a professional in Brisbane and was living at the time in the valuable D property when he applied to the Court in May this year for property and parenting orders, he sought an order that he be granted sole use and exclusive occupation of the new Sunshine Coast waterfront home when its construction was complete. He did this with full knowledge that the wife and children, with whom he was having conflict and difficulties, were living next door in the older place and also had an expectation of moving in to the new home when its construction was complete.

15.When the wife filed her Response in early July, she included in the orders she was seeking from the Court, an order that she be granted the sole right to use and occupy the new home once it was constructed, with the intention of moving into it with the children.

16.Whilst the hearing of their competing applications was pending in this Court, and despite repeated written requests of the husband by the wife, communicated through their respective solicitors, for the husband to respect her position and not to move into the new home until the hearing of their competing applications, the husband unilaterally moved into the newly constructed home on its completion in September. In addition, he has had an employee, who does yard and home maintenance for him, as well as child minding for him when the children are in his care, move into the home as well. The husband has done that expressly to prevent the wife moving into or coming into the home during the days that he is working and living in Brisbane. He even told the wife in writing that is what he arranged. Indeed, he has expressed a belief that the wife is “intimidating” and “harassing” him by entering onto the property when he is not there, having seen (amongst other evidence), he says,  “muddy footprints” around the swimming pool on an occasion upon his return to the property. Here, I observe that the new home has a swimming pool whilst the one next door in which the wife and children live does not and the two properties are apparently linked, at least at low tide, by a strip of sand.

17.The wife asserts to be very distressed and troubled by the husband’s actions and his attitude towards her and the children demonstrated by his unilateral disregard for her position and the position of the children in respect of the occupation of this new house, particularly whilst she and the children live right next door. The wife says in her affidavit evidence:

It is untenable for [the husband] and I to continue to live next door to one another. My most significant motivation for ending the relationship with [the husband] was to prevent his abusive behaviour towards me and towards the children. By living next door to me [the husband] is now able to continue to control, manipulate and monitor me.

18.She goes on to say:

[The subject property] has been the home in which the children and I have lived since 2011. It has always been intended that we would live temporarily in [the house next door] before moving to our permanent home [in the new home]. [The husband] has deprived the children of that opportunity.

I find [the husband and his employee] living in the house next door to me unbearable. I have no privacy. I can’t go out on the back deck or play with the children in the back yard without seeing [the husband or his employee] who is there whenever [the husband] is not.

I have taken steps to remove myself from the situation in the short term by spending weekends with my mother and sister in Brisbane and with my aunt and uncle. This is the only way that I can obtain practical relief from [the husband and his employee] living next door to me. My time with the children on weekends is very important to me and I do not feel that it is appropriate for them to have to travel away from their home because of the decisions that [the husband] has made. I have obtained therapeutic counselling, on the advice of my GP, to assist with my increased stress levels.

On 7 October 2014 I met with [the husband] at the property while the children were with him. [He] begged me to meet with him without solicitors to attempt to resolve matters. I agreed but [he] was only interested in seeking my agreement that we recommence our relationship. I ended the meeting after a short time and returned to my home. 

19.The wife also relied upon the family report of Mr F from earlier in the year that the parties had jointly obtained. Mr F expressed the opinion in that report that a “very difficult interpersonal relationship … exists between the parents”. He said “the parents do not appear to be able to communicate in a meaningful way. There is a high level of mistrust on both sides. It appears that the children are being exposed to this mistrust and conflict by both parents on a regular and frequent basis.”

20.At paragraphs 139  and 140 of that report, Mr F said the following:

The description of the relationship dynamics offered by the mother, if accepted by the Court, point to the father behaving in a controlling, coercive manner to her over several years. She describes behaviour that is consistent with emotional abusive and intrusive boundaries. She describes sexually aggressive behaviour. It is reasonable, if the Court accepts the mother’s description of the dynamics, to expect that the mother will have an ongoing aversion to dealing with the father, especially as she asserts stronger boundaries with him.

The description of the relationship dynamics offered by the father point more to interactions characterised by intensive, interactive conflict between them where little can be meaningfully resolved. His descriptions points [sic] them both being capable of displaying aggression and frustration with one another. He describes himself as being somewhat powerless at the hands of the mother, on account of her forceful and domineering manner. He describes the mother’s stance towards him at this stage as being disproportionate and legally strategic. If the Court accepts the description offered by the father, it is reasonable to expect that their dynamics post-separation will continue in a similar way, unless there can be a genuine effort on both sides to redefine their roles with one another to set up better rules of engagement for how they will address one another and deal with one another’s concerns.

21.Mr F goes on to express the opinion, that comments of the children “point to the father being more disinhibited” and that, in his view, the father presents with “a lack of insight into the effect his comments are having on the children.” He says:

The present change over arrangements make it very obvious to the children that the mother wants nothing to do with their father. [The eldest daughter] makes comments about her mother being in her own shell and on edge when the father is in the [local Sunshine Coast] area.

For the older children particularly, this exposure to parental conflict does not appear to be working in the father’s favour. Such comments alter the dynamics and carry the risk of diminishing the children’s relationship with each of the parents over time.

22.The mother also adduced evidence from a clinical psychologist who has been seeing the two girls. The psychologist said that the eldest daughter had asked her to share certain information that she had conveyed to the psychologist with her parents. The psychologist said:

[The eldest daughter] is reporting that having her separated parents living next door to each other is difficult and stressful for her, adding to pressure in relation to visiting dad and adding also to a feeling of a lack of privacy when not visiting with her dad and not wishing to have contact. It is my opinion that this arrangement would be potentially confusing and stressful for children of separated parents particularly if the parental relationship is strained or complex. It can be beneficial, and in the best interests of children, to have clear boundaries and distance between parents to allow children to have a clear sense of which parent they are with and when, and to allow each parent the best chance of maximising their relationship with their children when they are with them. 

23.Of the second child, the psychologist said:

[She] has had a bit of a rough week with her anxiety and worry about being away from mum. She appears to be struggling with the stress of having mum and dad living in two houses side by side but with parental alienation. I am concerned that [she] is internalising her anxiety …. and that if the stress continues she will ‘implode’ emotionally.

24.The father says that none of the three younger children who are spending time with him have said anything to him to make him think that they are struggling with the situation of the parents living side by side. He says that there is a two metre high fence and that privacy can be maintained. He asserts that he does not want to live in the Suburb D home in Brisbane but rather wants to live in the Sunshine Coast locality now to be close to the children. Indeed, the Court was told during the hearing that the parties have agreed to sell the D property now and a minute of order was provided to the Court for consideration to be made by consent. The husband considers there should be no difficulty with the parents living in neighbouring properties. He asserts the wife’s opposition is tactical and without a rational basis. He argues that the wife is entitled to only 20 per cent of the net property interests of the parties – about $2,000,000 of net property and superannuation – and that she will, accordingly, not have a chance of retaining the new home as her own when the property adjustment issues are finalised. He argues that is quite a relevant matter, coupled with his intent on retaining the two adjacent properties in the long run. He asserts that the property in which the wife and children currently reside is suitable for their immediate needs and that it would be “grossly unfair” to deny him access to $10 million worth of canal front property.  It was submitted to the Court that doing so should not be “lightly considered” or done “without good reason”.

25.The Court’s power to make the orders that are sought by the husband and the wife is contained within s 114 of the Family Law Act 1975 (Cth). By subsection (1) of that section, the Court may make an order or grant an injunction that it considers proper with respect to the matter to which the proceedings relate arising out of the marital relationship, and not one limited by the list of matters included in the sub-section.[1] An injunction granting personal rights of occupation or restricting proprietor’s rights of occupation of property may be made under this section.[2]

[1]          See F and F (1989) FLC 92-031

[2]          See Re Dovey; ex parte Ross (1979) FLC 90-616; Mullane v Mullane (1983) FLC 91-303

26.Although this was an interim hearing without cross-examination with necessary limitations on the Court’s ability to decide disputed questions of fact, I do accept on the evidence that the two eldest children, at least, are currently struggling with emotional difficulties that are not being alleviated or ameliorated by the circumstances of their parents, who are in high conflict with each other, living in adjoining homes and where it is clear that all of the children are neither permitted to, nor want to simply come and go between the properties. Whatever the cause of the conflict, I am quite satisfied that its existence is exacerbated rather than improved by the parties living in the neighbouring properties in circumstances of mistrust, absence of communication and lack of respect for the other’s position or feelings in the post-separation period.

27.I am quite satisfied that the proper use of the Court’s statutory power in the factual circumstances of this case, principally having regard to the best interests of the children, is to make orders that require the husband to immediately vacate the newly constructed home (prior to Christmas) and permit the wife and children peaceful occupation of that new home until the parties can otherwise agree or further order of this Court. Additionally, I am satisfied that the orders should restrain the father from coming within 100 metres of either of the neighbouring properties save for when he is collecting the children from their mother for time with him pursuant to agreement or existing orders and returning them after such time. I do not make such an order lightly and consider there to be good reason to make the order that I do. Although my order does not give the husband long to vacate the subject property, he clearly has the Brisbane property at his immediate disposal and can go back there to stay until he finds alternative accommodation on the Sunshine Coast, if that is where he is intent on living.

28.The wife initially sought an order that the property that she is currently in be sold, but changed her position on that once it was clear that the D property was to be sold by agreement and having regard to the husband’s assertion that he hoped to ultimately retain both of those neighbouring properties and would, if excluded from them, need to rent the vacant one out so as to be able to afford the rent on another property in that Sunshine Coast locality.  Whilst the husband will be excluded from both of those properties on an interim basis, the parties will not be enjoined from renting the vacant one out once the wife and children move into the newly constructed home.

The interim payment of expenses and repayments on loans

29.At the hearing, the parties presented drafts of orders that they sought from the Court. There was little difference between them in respect of the orders each sought requiring the husband to continue to pay periodic loan repayments, the wife’s tax liabilities incurred by reason of the distribution of income to her from business entities controlled by the husband, electricity, gas and phone bills of the wife, insurance premiums, motor vehicle registration, local government rates, the costs of servicing and maintaining motor vehicles and private health insurance premiums.

30.The orders I will make reflect my understanding of what was effectively agreed or conceded by the parties in respect of these matters. I will also order the husband though to inform the wife by text or email when most of these expenses have been paid by him on an ongoing basis. I consider that likely to reduce potential stress that the wife might suffer in not knowing if these bills have actually been paid by the husband as they fall due.

The wife’s application for interim litigation costs funding

31.The wife’s amended Response seeks an order that the husband or an entity he controls pay her solicitors within 28 days the substantial sum of $743,260 on account of the wife’s legal fees.

32.The wife deposed to having paid legal fees in the matter as at 1 November 2014 as follows:

·Paid to her family law solicitors - $63,272;

·Paid to her solicitors in the family violence protection order proceedings - $37,156;

·Paid to Senior Counsel in the family law proceedings - $18,762.

33.These costs were, I understand, paid by borrowings from third parties, principally her own family members.

34.The wife also deposed to having outstanding fees owing to her family law solicitors of $155,366 and at the hearing, the Court was informed that had increased to $180,000. She deposed to having outstanding fees owing to her solicitors who acted in the family violence proceedings of $8,923. She also deposed to having been advised by her solicitors that she would be likely to incur legal costs up to and including a final hearing of the parenting and property matters of $434,280 including GST, in addition to around $25,000 for forensic accountants to advise her.

35.Of course, that is a very large amount of money, but it is increasingly common for high net worth parties in high conflict parenting and property matters in this Court to pay very substantial amounts of money in legal costs and outlays and I do not, at this point, even begin to determine if the estimates the wife has been given are unreasonable or otherwise.

36.What is clear, is that the wife does not have unilateral access to that sort of money simply to be able to pay her legal costs and outlays on an ongoing basis.  I accept that she does not have the capacity to meet her own costs. I accept, as was submitted by Senior Counsel for the wife, that failure to make an interim litigation costs funding order in favour of the wife has the serious potential to result in injustice.

37.Indeed, the husband submitted that an order should be made that he pay the wife the sum of $50,000 within 60 days with such payment to be categorised as a partial property settlement. Queens Counsel for the husband also embraced the idea of a “dollar for dollar” order being made when the Court raised it as a possibility during the hearing.

38.For the wife, a “dollar for dollar” order was opposed as also having its own potential to do injustice to the wife where the husband controlled the large net worth of the parties and might not require as much forensic legal and accounting work done to properly prepare a case for the Court. Although I consider that “dollar for dollar” orders have their place, I accept that submission in this case.

39.Some factual matters of relevance to this part of the application emerged. They were:

·The wife is currently expecting a tax refund from the ATO of approximately $120,000;

·The D property has been valued for the parties’ lending bank as being worth $3.7 million;

·The D property is currently unencumbered and could be borrowed against;

·The parties agree to sell the D property and I will be making orders by consent providing for that;

·On the husband’s case, the wife would receive net $2,000,000 in property (20 per cent) in the property division and the wife asserts the husband’s values are “conservative” and she seeks 55 per cent (or $5.5 million on the husband’s current estimates of value).

40.There is no dispute between the parties that the Court can make an interim litigation funding order. That is indeed the correct position.[3] I am satisfied in this case, given the husband’s assertion that the wife is entitled to $2,000,000 in net property pursuant to a s 79 property adjustment, that the power of the Court to make orders pursuant to s 79(1) and s 80(1)(a) and (h) for partial property adjustment at this interim point in the proceedings should be used to make orders that provide for the wife to have funds, on an interim basis, that she can use to pay legal fees or otherwise spend as she unilaterally considers appropriate.

[3]          See Strahan v Strahan (2011) FLC 93-466

41.I bear in mind that she will be receiving $120,000 by way of tax refund in the near future. Accordingly, I will order that the husband or an entity he controls pay the wife’s solicitors the sum of $500,000 for her to use as she sees fit and for such payment to be categorised as a partial distribution of property. I expect it will be sourced from the equity the parties have in the D property, either by way of loan borrowed prior to the sale of the property or from the proceeds of sale of the property.

Interim variation of periodic Spousal Maintenance

42.The orders that were made with the consent of the parties on 11 July 2014 included an order that the husband pay the wife $1,000 per week by way of periodic spouse maintenance. By her amended Response the wife seeks an order varying that to $5,099 per month. I calculate that to be the equivalent of $1,176 per week.

43.In her Financial Statement filed 2 July 2014, the wife deposes to an average weekly income of $435 from her professional assisting.  She lists her personal expenditure as $21 per week for professional indemnity insurance, $11 per week for car registration and $187 per week for credit card payments. In addition, she has listed $1,970 in other weekly expenses for her own personal needs, including expenditure I am satisfied she would put on her credit cards. Accordingly, I do not consider it appropriate to double count all of those expenses and weekly credit card payments.

44.In her $1,970, she also includes $584 for child minding. Senior Counsel for the wife informed the Court at the hearing that amount should actually be considered an expense in respect of the children rather than a personal expense. I accept that, as did Queen’s Counsel for the husband. That reduces the wife’s weekly expenditure to $1,386 plus the $21 insurance premium. The car registration will now be paid by the husband pursuant to the orders I will make. Total expenses are then $1,407 per week. Currently, the wife earns $435 which she has to contribute towards those weekly expenses, thus reducing her needs, unmet from her own capacity, to $972. Allowing for a small amount of income tax payable on her income, her own personal expenditure needs appear to be met by her own income and the current payment of $1,000 per week made by the husband. I will not make an order increasing the current periodic spousal maintenance payable by the husband.

Interim Departure from Child Support Administrative Assessment

45.The wife adduced and relied upon evidence of a child support administrative assessment applicable for the period from 4 September 2014 to 3 December 2015. For the period 4 September 2014 to 18 March 2015 the husband is assessed as liable to pay child support for the four children the sum of $2,878.75 per month and from 19 March 2015 to 3 December 2015 the sum of $3,145.50 per month.

46.The wife seeks a departure from that administrative assessment pursuant to s 117 of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”) such that the husband’s liability is fixed at $7,084 from 15 December 2014 onwards. She also seeks an order that the husband pay the children’s private school fees on an ongoing basis.

47.The husband opposes the child support departure application, asserting that it is not appropriate to hear an application for departure from the administrative assessment on an interim basis in this Court and that, in any event, the husband has been administratively assessed and a liability fixed, which should be left untouched. It was submitted that there are administrative review procedures in place that the wife could and should utilise before relying on an application to the Court for departure from the administrative assessment. It was also submitted that such departure applications should not be dealt with in the summary hearing format of interim application in the duty list where cross-examination is not usually permitted.

48.With respect to Queen’s Counsel for the husband, I do not accept that submission in this case.  Section 116 of the Assessment Act expressly provides for a carer entitled to child support or a liable parent to be able to apply to a court having jurisdiction under the Assessment Act  for a departure order in relation to the relevant children in the special circumstances of the case in circumstances where the liable parent or carer entitled to child support is a party to an application pending in a court having jurisdiction under the Assessment Act and the court is satisfied that it would be in the interest of the liable parent and the carer entitled to child support for the court to consider whether a departure order should be made in the special circumstances of the case. Additionally, pursuant to s 141(1)(g) of the Assessment Act the Court may make an order “pending disposal of proceedings” or an order “until further order”.

49.I am satisfied in this case that it is in the interests of the wife as carer entitled to child support and the husband as the liable parent for the question of departure from administrative assessment of child support payable in relation to their four children to be heard and determined at the same time as the other interim property applications. Hearing and determining as many matters that are in dispute between the parties at the one time in the one court, thus saving the parties the inconvenience, time and cost of taking up matters elsewhere, is, I consider at least, in their interests.

50.This Court certainly is a court having jurisdiction under the Assessment Act and, is thus empowered to make orders under the Assessment Act pending disposal of the proceedings or until further order.

51.Section 114 of the Assessment Act says that additional particular objects of the Division of the Assessment Act include ensuring that children have their proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both of their parents and that parents share equitably in the support of their children.

52.The wife’s Financial Statement lists her average weekly expenses for the children (excluding school fees and related expenses) as $1,653. I calculate that to be the equal of $7,163 per month. No submissions were made for the husband that any of the listed expenses were unreasonable. That would have been difficult for the husband as the weekly expenses he listed for the children were not too dissimilar in amount, being around $1,545 per week, even though he has them in his care for a lot shorter period of time, being three nights per fortnight during school term. In actual fact, I consider, without going through the list in pernickety fashion, it is likely that the expenditure listed by the husband for the children is actually somewhat overstated, meaning he would have more funds available to contribute to the wife’s care of the children in any event.

53.The limited income the wife is earning from her own efforts on a weekly basis has already been taken into account in determining a proper level of spousal maintenance and, therefore, I do not consider it should now be taken into account again in determining the appropriate level of child support to be paid by the husband. Though there was argument by the husband that the wife is not exploiting all of her earning capacity, the evidence is that she is working no less than she was with the consent and/or acquiescence of the husband during the later period of their cohabitation, principally devoting her time and efforts to caring for the children and the home. For the purposes of this interim departure application, I do not consider that the wife has earning capacity that she is not exploiting at the moment. The reasonable weekly needs of the four children that she must meet without any immediate capacity to contribute from her own income, earning capacity and assets is the amount of $7,163 per month.

54.The Court was told the husband has not even started to pay the assessed amount as yet as the assessment only recently issued. In addition, the Court was told in answer to inquiry it made, that the husband was not, prior to the issue of a child support assessment, actually making a specific payment to the wife on a regular basis for the financial support of the four children, although he was paying their school fees.

55.The Court has the power to depart from the administrative assessment of child support in relation to the four children in the special circumstances of the case if satisfied that one or more of the grounds for departure mentioned in subsection (2) of the section 117 exists and that it would be just and equitable as regards the children, the carer entitled to child support and the liable parent and otherwise proper to make a particular order.

56.For the wife, it was submitted that the application of the provisions of the Assessment Act relating to administrative assessment of child support result in an unjust and inequitable determination of the level of child support to be provided by the husband because of the income he actually generates.[4] As his assessment is based on his taxable income declared to the ATO which was $1,190,126 in 2013 and $1,019,959 in his 2014 draft financial statements, whereas the business entities he actually controls generated an additional $2,020,671 in taxable income in 2013 and $1,269,755 in 2014 (according to the draft financial statements for that year), which income is distributed through various trust entities and ultimately available to be spent at the direction of the husband, the assessment result is, in my view, unjust and inequitable when one considers his true capacity to be able to contribute to the support of the parties’ four children.

[4] See s 117(2)(c)(ia)

57.I accept the submission and am sufficiently satisfied that the husband does ultimately have the capacity, on an interim basis, to pay an additional amount of just under $4,000 per month in child support for the children, who would otherwise be unlikely to have their weekly support needs properly met whilst in the care of their mother, absent such additional child support payments by the father. Considering the matters set out in s 117(4) of the Assessment Act, I am satisfied that setting a monthly amount of $7,000 for the child support periods between now and the end of 2016 would be just and equitable as regards these four children, the wife and the husband in this case. Further, having regard to the matters that are to be considered under s 117(5) of the Assessment Act, I consider it would be ‘otherwise proper’ to make the order that I intend to make. I will make a child support departure order that fixes the husband’s child support liability in respect of the four children to $7,000 per month through until the end of 2016 when the matter is likely to have reached finalisation by trial, if not previously resolved by agreement.

58.I acknowledge that the parties have a high level of debt that the husband is obliged to consider servicing, as he always has, notwithstanding separation of the parties and the existence of two households that now have to be supported from the same income source as prior to separation. However, assets have been sold down, debt has been reduced and there is intention to continue to sell down assets, including, as discussed, the very valuable Suburb D property, so that debt can also continue to be discharged with the consequent reduction in ongoing debt repayment obligations. Such action is entirely consistent with the principle, as submitted by Senior Counsel for the wife, that a liable parent cannot assert a lack of capacity to contribute to the proper support of his or her spouse and/or children because of an obligation to support substantial principal and interest repayment requirements arising out of a desire to retain valuable but heavily encumbered assets in the long term. The obligation to contribute in a just and equitable and otherwise proper fashion to the support of one’s children will, in my view at least, come before the obligation to continue making substantial repayments in respect of debts secured by assets that are not essential to retain.

Child support other than in a periodic sum

59.The husband has been paying the children’s private school fees and other expenses related to their education. The wife, concerned that he might simply cease making those payments, seeks an order that the Court has power to make pursuant to s 124 of the Assessment Act for the husband to continue to be required to make those payments.

60.As there is already an administrative assessment in place which I have now determined to depart from, such an order can be made where the Court is satisfied that it would be just and equitable as regards the children, the carer entitled to child support and the liable parent and otherwise proper.[5] In determining the application, I have regard to the administrative assessment that was in place, the departure determination that I make in respect of that assessment and the matters mentioned in ss 117(4),(6),(7), (7A) and (8) and s 117 (5) of the Assessment Act.[6]

[5] See s 123(1), (2), (3) and s 124 of the Assessment Act

[6] See s 124(2), (3) and (4) of the Assessment Act

61.Principally, I am moved by the fact that the husband has been paying the private school fees and related expenses for the children’s education and asserts he intends to continue to do so, in addition to the fact that the order I have determined to make for the departure from the administrative assessment in respect of monthly child support has set the figure based on the weekly expenditure needs the wife has for the four children not including the private school fees and education related expenses. I am satisfied that it is indeed appropriate to actually put an order in place that requires the husband to pay these fees having regard to evidence before the Court as to his conduct in the past in respect of not paying bills and school related fees after actually saying he was going to pay them. If he intends, as he says he does, to pay the children’s school fees, then complying with a child support order that requires him to do so should neither bother nor trouble the husband.

62.As I am required to do pursuant to s 125 (1) of the Assessment Act, I will state in my orders that the rate of child support otherwise payable by the husband pursuant to my orders departing from the administrative assessment of child support is not to be reduced at all by the child support that I will order the husband to pay pursuant to Part 7 Division 5 of the Assessment Act in the form of payment of school fees and educational expenses. I will make that statement being satisfied as I am that it would be just and equitable and otherwise proper not to reduce the annual amount of child support payable by reason of child support to be additionally provided in the form of school fees.

Mediation

63.I will also make some orders in respect of a mediation that the parties have agreed to attend. Those orders reflect positions put to the Court at the hearing about the process for the selection of a mediator to conduct their mediation. I also make orders that the parties share equally in the cost of the mediation but that the wife’s contribution to that cost will only have to be made after she has received the payment of $500,000 required to be paid by way of the litigation funding order I am also making.

I certify that the preceding sixty-three (63) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Forrest delivered on 15 December 2014.

Associate: 

Date:  15 December 2014