SNIPPER & JAMES

[2012] FamCA 453

FAMILY COURT OF AUSTRALIA

SNIPPER & JAMES [2012] FamCA 453

FAMILY LAW - SPOUSAL MAINTENANCE – Where wife has primary care of three young children – Where wife is unable to adequately support herself – Where husband high income earner  - Where husband has dissipated the parties’ assets through gambling – Where husband’s income sufficient to pay the periodic spousal maintenance to the wife as sought by her and a percentage of his performance bonus and profit share.

FAMILY LAW - CHILD SUPPORT – Child support departure application – Where no application made to the Child Support Agency – Where the Court does not have jurisdiction to hear a departure application or application for urgent child maintenance – Application dismissed.

FAMILY LAW - PROPERTY – Interim Property Application – Where the wife sought an interim property settlement to fund repairs on the family home – Where husband does not have funds available – Where husband owes a significant sum to the Australian Taxation Office – Where wife is already receiving a percentage of husband’s performance bonus and profit share – Where in the circumstances an interim property order should not be made – Where husband seeks to have the family home sold  – Where wife seeks to retain the family home on a final basis – Where wife is currently residing in the family home with the children – Where it is not in the interest of justice that the family home be sold.

FAMILY LAW - INJUNCTION – Where wife seeks an injunction restraining the husband from dealing in a substantial part of his annual income – Where wife’s interests are protected by other orders – Application for injunction over husband’s income refused.

Child Support (Assessment) Act 1989 (Cth) ss 115, 116, 139
Family Law Act1975 (Cth) ss 75(2), 79, 80(1)(h), 114

Bevan & Bevan (1995) FLC 92-600
Mitchell & Mitchell (1995) FLC 92-601
Strahan & Strahan (2011) FLC 93-466

APPLICANT: Ms Snipper

RESPONDENT: Mr James

FILE NUMBER: SYC 1913 Of 2012

DATE DELIVERED: 14 June 2012

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Ryan J

HEARING DATE: 4 June 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Gould

SOLICITOR FOR THE APPLICANT: Diana Perla & Associates

COUNSEL FOR THE RESPONDENT: Ms Hanna

SOLICITOR FOR THE RESPONDENT: McDonell Milne Toltz

Orders

1. That Order 1.1 of the orders dated 11 April 2012 is discharged.

Pending further order

1. That Mr James (“the husband”) pay spousal maintenance to Ms Snipper (“the wife”) in the amount of $8,000.00 per calendar month, which amount is to be paid monthly on the 12^th day of each calendar month, the first such payment to be made on 13 July 2012.

2. That the wife’s child support departure application in relation to the children G born … October 2002, B born … November 2004 and R born … January 2010 is dismissed.

3. That from each profit share and performance bonus paid by Company C to the husband 35% of the gross amount paid to the husband is, by way of interim spousal maintenance, to be paid to the wife.

4. That the husband pays as and when they fall due all instalments in respect of the Commonwealth Bank mortgage secured over the family home at … D Street, Suburb J.

5. That the husband forthwith signs all necessary documents directing the responsible partners and/or the payroll manager of Company C to pay the amounts referred to in Orders 2, 4 and 5 above for monies payable to him directly to the wife and in relation to the mortgage, directly to the bank.

6. The Court notes the husband’s undertaking that he will direct his employers to pay to the wife $4,500.00 per month which is to be applied by her to the children’s support.

7. That all outstanding applications for interim orders are dismissed.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 1913 of 2012

Ms Snipper

Applicant

And

Mr James

Respondent

REASONS FOR JUDGMENT

1. Before the Court are claims for interim property settlement, spousal maintenance, child support departure and injunction orders. 

2. The proceedings were commenced by Ms Snipper (“the wife”) when she filed her Initiating Application and application for interim orders on 3 April 2012.  The wife sought that her interim application was listed urgently, essentially to preserve her husband’s income and an anticipated bonus.  Protection was necessary, according to the wife, because the husband has         gambled and lost nearly everything they owned.  According to the wife this includes a significant component of $1.555 million her mother gave her and indirectly an unencumbered property which she brought into the marriage. 

3. The situation now is that after approximately 20 years of cohabitation, with three young children of whom the wife has been the primary carer, financial contributions by and on the wife’s behalf of the type just mentioned and the husband earning hundreds of thousands of dollars a year, few assets remain.  Indeed, on the evidence presently available the parties’ only assets would appear to be the family home at Suburb J which they hope is worth $1.1 million and subject to a Commonwealth Bank mortgage of $952,373.00 and the husband’s shares in a family company (established by the wife’s mother) known as A Pty Ltd.  As will become apparent, unless the husband’s shareholding in A Pty Ltd is worth more than about $500,000.00, the probability is that the parties’ liabilities exceed their assets.

4. Mr James (“the husband”), who is professionally employed, does not dispute the majority of the wife’s evidence about her financial contributions, that he had a serious gambling problem and that little of the income and assets acquired during cohabitation remains.  However, he challenges the wife’s assertion that she is entitled to spousal maintenance, offers child support for the parties’ three children in the amount of $4,500.00 per month and does not agree that he should pay the mortgage.  According to him, the wife is mistaken in her assertion that from his position as a senior executive in Company C he earns $16,680.00 per week in relation to which he says he earns $10,385.00 per week.  Precisely how each amount is calculated remained unclear.

5. It is the husband’s proposal that the family home, in which the wife and children reside, is sold pending which he would pay the mortgage.  As was mentioned earlier, it is the wife’s estimate that the family home is worth $1.1 million in relation to which $952,373.00 is secured to the Commonwealth Bank.  According to the wife a further $300,000.00 is due to her mother, which amount there is no dispute her mother advanced to the parties to acquire the family home.  In relation to the sale of the home, it is the husband’s proposal that after payment of selling costs and discharge of the mortgage, that the wife indemnify him for any shortfall and in the event that there exists a capital sum, that this is paid to the wife.  The gravamen of counsel for the husband’s submission was that this could provide a capital sum which the wife could use to obtain rental accommodation for her and the children.

6. In the absence of valuation evidence, some caution is appropriate in relation to the amount which the parties hope that the family home is worth.  On the available evidence it is far from certain that it is likely to produce even a modest capital sum.  Why else would the husband seek an order that the wife indemnifies him in relation to any shortfall to the Commonwealth Bank.  Such an order would only be sought if he anticipated that there was a reasonable likelihood such a scenario may unfold.

7. In relation to child support, the husband denied that the wife could establish a ground for departure but nonetheless agreed that a departure order could be made.  In this regard, in his response the husband sought the following order:

   That pending the sale of [the family home] the husband pay by way of departure from any assessment issued by the Child Support Agency the sum of $4,500.00 per month in respect to the children of the marriage, [G] born [in] October 2002, [B] born [in] November 2004 and [R] born [in] January 2010 being (“the children”) in the sum of $1,500.00 per month for each child.

8. It will thus be apparent that, in his response, by way of financial support to the wife and children, the husband proposed that until the family home was sold, he pay approximately $3,000.00 per week and thereafter nothing beyond child support as assessed by the Child Support Agency.  As this surprising approach was explored during addresses, counsel for the husband proffered that the husband proposed that the $4,500.00 per month departure order would continue pending further order. 

9. Although the question of jurisdiction in relation to the child support issue was not raised, because it is apparent that the Court lacks jurisdiction this matter will be addressed first. In her application the wife applied for “a departure from any assessment or in the event that no assessment has issued…urgent child support.” There is no evidence that either party has applied to the Child Support Agency for an administrative assessment of child support and it is appropriate to infer they have not. Thus the jurisdictional foundation for an application for urgent maintenance pursuant to s 139 of the Child Support (Assessment) Act 1989 (Cth) (“CSAA”) is lacking. The effect of ss 115 and 116 of the CSAA is that an application to depart from an administrative assessment requires that there is an assessment in existence. In these circumstances the wife’s child support application must be dismissed.

Background Facts

1. Unless it is stated otherwise, the following matters appear to be uncontentious. 

2. The wife was born in 1969.

3. The husband was born in 1971.

4. In 1990 the parties commenced cohabitation.  At that time the wife was employed full-time and the husband was a full-time student studying a Bachelor degree.  From the commencement of cohabitation, the parties resided in an unencumbered apartment owned by the wife.  The husband did not bring any assets of value into the marriage.

5. Until the husband graduated in 1993 he was essentially supported by the wife.

6. The parties married in December 1994.  By then the husband was employed at Company P where he remained until he moved to Company E which, in 2002, merged with Company C.

7. From the sale of a business, in two instalments one in 2000 and one in 2001, the wife’s mother gave her approximately $1.555 million.  The husband does not dispute the wife’s evidence that the parties opened a joint account into which the funds were deposited and from which he undertook to establish and manage a share portfolio or, that he later redirected the bank statements away from the home to a post office box. 

8. In her affidavit, the wife provides significant detail about a raft of transactions which she says were undertaken without her knowledge and, from investigations undertaken by her post separation, she discerns that the funds gifted by her mother have been lost.  For his part, the husband does not respond to the wife’s detailed evidence which he in effect avoids by a blanket denial.  Nor does he specifically address the mother’s evidence that approximately $124,000.00 received by her in 2002 were withdrawn by him, with the use he made of those funds not being disclosed to her.

9. In any event, when the wife’s mother sold her business, the wife (who had been employed by her mother for a number of years) became unemployed.

10. The wife’s mother gave the parties sufficient funds for them to travel abroad for one year, which they did.

11. The first of the parties’ three children, G was born in October 2002.  Their daughter B was born in 2004 and their youngest child, R was born in 2010. There is no issue that the wife has been the children’s primary carer.  While there is a disagreement about the extent that the wife gambled with the husband prior to G’s birth, there is no issue that from this time, at the most, the wife attended the casinos periodically and that the catastrophic consequences of gambling in the following decade resulted from the husband’s actions.

12. In 2002, A Pty Ltd was incorporated by the wife’s mother. There are 30 issued shares: 10 held by each of the husband, the wife’s brother-in-law and her mother.  The wife and her brother-in-law are the company’s directors.  The company provides services to a health industry sector.  By way of final order, it is the husband’s proposal that he transfer his interest in the company to the wife. 

13. There is no issue that the wife has worked in the company although there is an issue about whether she has ever worked full-time.  There is no issue that the wife has never drawn a salary.  Payments, however, have been made by the company into the parties’ joint account.  These are described as “reimbursement” and a small number as “distribution”.  Notwithstanding these payments, there is no issue about the husband’s evidence that “for the period from 2002 I have been the sole financial provider for the wife and our children”.

14. There is an issue about the extent of the husband’s involvement with A Pty Ltd, in particular, as a financial advisor and overseeing management of its accounts.  According to the husband “at no time have I ever worked in A Pty Ltd, had in depth knowledge of their business operations, prepared any form of accounting entry or tax returns for the company, interacted with employees, acted as a company representative or paid accounts for or on behalf of the company”.  He informs the Court that he does not have any documents relating to A Pty Ltd and was aware that the wife was “significantly tardy” in relation to completion of company taxation returns and the like.  The husband’s evidence in relation to his lack of involvement with the company sits uncomfortably with his evidence that his shareholding in the company is worth an estimated $1.5 million.  For the 2010 and 2011 financial years, the company had revenue of approximately $800,000.00 and $826,000.00 respectively.  For those years, during which neither director received a salary, rounded out, there was $40,000.00 and $80,000.00 profit.  It is the husband’s contention that in her role with the company, the wife has developed specialised knowledge of the relevant health care sector and other skills which have her well placed to obtain employment and earn a salary in excess of $150,000.00 per annum; whether from the company or elsewhere.  This is the basis upon which it is asserted that the wife has not established the threshold entitlement to spousal maintenance (s 72).

15. Returning then to the background chronology, having sold the apartment which the wife owned at cohabitation, the parties bought and sold a number of properties which culminated in their purchase in 2010 of the family home at Suburb J for $1.25 million.  This was acquired with a $950,000.00 mortgage advanced by the Commonwealth Bank and $300,000.00 advanced by the wife’s mother. 

16. The parties separated on 28 November 2011. 

17. By agreement, the wife and children, then aged 9, 7 and 21 months, remained in the family home.  No one else lives with them.  The two elder children continue to attend a local public school and the youngest child attends day care/preschool three days each week. 

18. Since separation and by agreement the children spend time with the husband from Sunday morning until Monday morning each week and, it would appear, on occasions during school holidays.  The husband has repartnered and lives in rented accommodation with his partner, for which he pays $1,204.00 per week.  The husband’s partner is between jobs and does not contribute to their accommodation expenses.  The husband has no legal obligation to support her.

19. Following separation and prior to the commencement of these proceedings, the husband paid to the wife $16,000.00 in January 2012, $17,000.00 in each of February and March. According to the wife, the husband made numerous remarks to the effect that he may cease making payments to her and thus, to ensure his continued financial support, on 3 April 2012, she commenced these proceedings.

20. The proceedings came before the Court on 11 April 2012 in relation to which the following orders and directions were made by consent:

1.By consent orders and notations are made in accordance with the document titled Minute of Consent Orders marked Exhibit 1 as set out hereunder:

1.     That pending further order and without admissions, the husband pay or cause to be paid to the wife or as she directs by way of financial support the sum of $17,000.00 per calendar month, the first such payment to be made on 13 April 2012.

2.     That pending further order and without admissions, the husband be restrained from gambling in any form with any person or organisation.

3.     That by 26 May 2012 the husband produce to the wife’s lawyers the document described in Annexure “A” hereto.

4.     That these proceedings be adjourned for further hearing of the interim or procedural orders sought in the Initiating Application filed 3 April 2012, at 9:30 am on 4 June 2012, if practicable.

Notation:

5.     The parties agree that pending further order and without admissions the sum to be paid by the husband pursuant to Order 1 hereof represents the husband’s present liability to pay spouse maintenance and/or child support to the wife.”

2.That the Case Assessment Conference set down for 9 May 2012 be vacated AND the Court requested that the Registry allocate a further Case Assessment Conference in respect of the substantive proceedings on a date convenient to the Court, being a date after 4 June 2012.

ANNEXURE “A”

SYC1913/2011 [SNIPPER AND JAMES]

1.The husband’s ATO integrated client account evidencing all payments made and/or outstanding, together with a copy of all accounts or invoices from the ATO for any such amounts paid and/or outstanding.

2.A schedule of all bank accounts in the name of the husband or which are held on his behalf or in which he has an interest, and copies of the statements for all such bank accounts for the period from the date of the husband’s appointment as a [senior executive] if [Company C] to date.

3.The husband’s [company] agreement with [Company C], and/or any other contract of employment or other document evidencing the terms of the husband’s [role] and/or employment with that [company].

4.The [company] accounts for [Company C] for each of the financial years since the date of the husband's appointment as a [senior executive] of that [company] to date.

5.Current member benefit statement showing the husband's entitlement in any superannuation fund in which he currently holds an interest, and/or the trust deed of any self managed superannuation fund in which the husband has an interest, together with the financial statements and the tax returns and the ATO integrated client account and lodgement status for each financial year since the inception of any such self managed superannuation fund.

6.The trust deeds and the financial statements for each financial year since inception of any trust -

(i)      of which the husband is the appointor or trustee;

(ii)    of which either the husband, the wife or the children or a child of the marriage is or are an eligible beneficiary as to capital or income;

(iii)   of which a corporation is an eligible beneficiary as to capital or income if the husband, or the wife or the children or a child of the marriage is a shareholder or director of that corporation;

(iv)   of which the husband has any direct or indirect power or control;

(v)     of which the husband has the direct or indirect power to remove or appoint a trustee;

(vi)   of which the husband has the power, whether subject to the concurrence of another person or not, to amend the terms;

(vii)     of which the husband has the power to disapprove a proposed amendment of the terms or the appointment or removal of a trustee; or

(viii)  of which a corporation has a power mentioned in any of the sub-paragraphs (iv) to (vii) above, if the husband, the wife or the children or a child of the marriage is a director or shareholder of that corporation;

including but not limited to The [Snipper] Family Trust, [F] Trust, [F] No 2 Trust, [L] Trust, [K] Trust.

7.The husband’s income tax returns and notices of assessment for each financial years since the date of his appointment as a [senior executive] of [Company C] to date.

8.The husband’s general ATO integrated client account and income tax account for the last 3 financial years.

9.The ATO integrated client account/s and income tax account/s for any related entities in which the husband has an interest or has had an interest since the date of his appointment as a [senior executive] of [Company C] to date.

10.Details of all distributions made to the husband or to any related entity on his behalf from [Company C], either directly or for or on behalf of that [company], and whether as cash or otherwise, since the date that the husband was appointed a [senior executive] of [Company C] to date.

11.Financial statements of any corporation of which the husband is a director, secretary and/or a shareholder, and/or that is fully or partially owned or controlled by the husband, for the last three financial years, including but not limited to [A] Pty Limited.

12.Details of any vested or contingent property in which the husband has an interest or which is held on behalf of the husband including by any other legal entity that is fully or partially owned or controlled by the husband.

13.Details of all liabilities and contingent liabilities which the husband has.

14.Details of the disposal of any property by the husband, whether by sale, transfer, assignment, gift or expenditure and whether made by the husband directly or by any legal entity, corporation or trust on his behalf, since the date that the husband was appointed a [senior executive] of [Company C] to date.

15.Details of all memberships in the husband's name with any club including but not limited to Star City, Crown and Burswood in Australia, and any overseas clubs or organizations.

16.Details of all accounts in the husband's name or held on behalf of the husband with any gambling organisation including but not limited to Tabcorp, Centrebet and Sportsbet and any other corporate bookmaking company, both in Australia and overseas.

17.Details of all credit cards and/or credit facilities in the husband’s name either solely or jointly with any other person or organization, or which the husband is entitled to operate if in the name of any other person or organization, and copies of statements of account of same for the last 3 years, both in Australia and overseas.

18.The husband’s current passport and any expired passport covering the last 3 years, and copies of all travel documents including flight bookings and itineraries, accommodation bookings and payments and insurance documents, for the last 3 years.

19.Statements and correspondence evidencing any investment/s or account/s held overseas in the husband's name solely or jointly with any other person or organization or in which the husband has an interest, whether held now or during the marriage.

20.Details of any Post Office Box opened and/or closed in the husband’s name or on behalf of the husband, since the date of marriage.

21.Details of all motor vehicles owned by the husband or in which he has or has had an interest since 1 July 2006.

22.Details of all jewellery and/or precious metal/s owned by the husband or held on his behalf by any person or corporation, since 1 July 2006 to date.

23.Details of any safety deposit or other security boxes or packets held in the name of the husband or on his behalf, whether in Australia or overseas.

24.Details of all life insurance policies in the name of the husband or securing the life of the husband, from 1 July 2006 to date.

Application of the law to the facts

1. The approach to an application for an interim property order is well settled and is as described in Strahan & Strahan (2011) FLC 93-466. Essentially, this involves a two-step process. Firstly, it must be established that s 80(1)(h) of the Family Law Act1975 (Cth) (“the Act”) is enlivened to allow an interim property settlement pursuant to s 79. In determining to depart from the usual approach that there is a once and for all order made after a final hearing, it is necessary that it is appropriate to make an interim order, with the overarching consideration being the interests of justice. In determining what interim property order might be in the interests of justice, a preliminary assessment of the application of s 79 and s 75(2) factors is required. The imprecise nature of this component of the exercise makes it appropriate to exercise a degree of caution so that the ability to make a just and equitable final property settlement is not compromised by the earlier interim property order.

2. The wife seeks to retain the family home. Arguing in support of its sale, counsel for the husband relied on the wife’s evidence about its state of disrepair and the expenditure required “to ensure that the home is safe for the children and me”. By ordering the sale of the family home, it was argued that the children’s safety would be ensured and they could be comfortably housed in rented accommodation. With respect, the approach adopted by the husband did not engage the wife’s argument that a sale against her wishes and in the context of her application for final orders that she keep it, would be inconsistent with the interests of justice. True it is that the parties’ liabilities would be reduced but it was not established that when the wife’s costs involved in rehousing herself and the children are taken into account, this would be to their financial betterment. Although there is undoubtedly power to make an order for sale along the lines contended for by the husband, in circumstances where the application of s 79(4) and s 75(2) factors result in the wife being able to make an apparently strong case for its retention, it is not in the interests of justice to order its sale.

3. It is thus necessary to consider who should pay the mortgage.  As was mentioned earlier the husband proposed that he would make the mortgage instalments pending the sale of the home in relation to which there are a number of sources of power under which such an order might be made.  In this case it is appropriate to view the wife’s application and husband’s response as seeking an asset preservation order (s 114).  As will be discussed further later, the husband has a significant income and the capacity to pay the mortgage not only for the period he proposed but pending a final hearing.  In circumstances where the wife has primary responsibility for the care of three young children and, as will be seen, is unable to adequately support herself, it is just and appropriate that he does so.   

4. Although the situation is not without a degree of confusion, the wife pressed for a payment by the husband of $100,000.00 which she would use to undertake repairs to the family home and for legal expenses.  The husband does not have such an amount.  Unless he disposes of his A Pty Ltd shareholding, which by way of interim order neither party proposes, he would need to borrow that amount or apply bonuses payable later this year.  The wife relies upon receipt by the husband of bonuses to underpin her spousal maintenance and child support applications.  Although her child support applications will be dismissed, for want of jurisdiction, after she has applied to the Child Support Agency for an administrative assessment this issue can and, it is inferred, will be considered again.  With respect to the argument made on the wife’s behalf, she cannot double-dip.  In addition, in circumstances where it is accepted that the husband owes in excess of $300,000.00 to the Australian Taxation Office (“ATO”) for income he earned during cohabitation which must be paid, the wife has not established that an interim property order should be made.

5. Turning then to spousal maintenance.  During addresses the different components in the applications were effectively rolled into one composite claim of $17,000.00 per month (plus mortgage repayment). Because each application requires, at least initially, consideration of different factors, a composite or global approach is fraught with difficulty.  Particularly, as has transpired here, when the child support application must be dismissed.   In her application the wife sought $8,000.00 per month spousal maintenance which is the amount that will be considered. 

6. As was earlier referred to, it is the husband’s contention that the wife could obtain full-time employment at an annual salary of approximately $150,000.00.  In the alternative, that as a director of A Pty Ltd she could demand a similar salary.  The extent of the wife’s work in the company is a matter of contest which cannot be resolved at this stage.  Nonetheless, in support of his claim that the wife’s involvement is significant, the husband pointed to the $1,120.00 per week she claims for childminding.  His point being that such expenses would only be incurred if her work in the company was also significant.  This fails to recognise the wife has worked in the company without effective remuneration for a decade and now does so as a single parent.  In addition, it does not necessarily follow that the entirety of the amount spent on childminding equates to periods she is at work.  But even if this is the only available inference, it has not been established that the company has the capacity to pay her anything like $150,000.00 per annum or that in the broader employment market she could earn a salary of that magnitude, as well as attend to the children.  With better evidence and in the context of a final determination when more is known about the parties’ circumstances and the wife and children have had time to adjust to the separation, the husband’s approach to the assessment of her earning capacity may be on a stronger footing.  However, at this stage, the wife has established that she is unable to adequately support herself by reason of her care of the children and the manner which, prior to separation, the parties agreed she would spend her time.

7. Turning then to the relevant s 75(2) matters. The wife’s income and expenses are as set out in her Financial Statement. While she has in the past received reimbursement of expenses (for example, telephone) from the company and an occasional distribution, the latter is rare and thus unreliable. At $630.00 per week her average weekly expenses are unremarkable. As is the other $695.00 identified at Part N of her financial statement. Although at the rate the wife currently pays her credit card this liability should be discharged within four months, because she has not been successful in obtaining an interim property settlement order, the wife will also incur significant legal fees which she will need to pay. Calculated on the basis that the husband pays the mortgage, the wife has established an entitlement to monthly spousal maintenance in the amount sought by her. Mitchell & Mitchell (1995) FLC) 92-601; Bevan & Bevan (1995) FLC 92-600.

8. In addition, although the wife’s interim property claim failed, it is appropriate to consider whether as spousal maintenance a further sum is appropriate.  It is accepted that the wife will need to undertake repairs to the home as identified in her affidavit which she cannot afford to undertake.  As this was the basis for the husband’s application for the sale of the home there is no doubt that he too agrees that repairs are required.  Rounded out the repairs will cost about $105,000.00.  Although it is accepted that the repairs should be attended to sooner rather than later, it is not essential that are attended to urgently. 

9. In relation to the husband’s financial circumstances, as was earlier mentioned, he has been a senior executive at Company C since 2006.  His Company C income is calculated on a unit basis, which is divided into 20 payments annually.  He receives 1/20^th on the … day of each calendar month and 2/20^th which is paid on the … day of each quarter.  In addition, profit sharing and performance payments are paid each November and January for the preceding year.  Potentially these payments are very significant.  For example, the last profit and performance payments received by the husband were $155,951.00 on 4 November 2011 and $103,967.05 on 25 January 2012.  A further bonus of $29,256.00 was received by him in October 2011, as well as a one-off $30,000.00 sabbatical payment received in April 2012.  So that it is clear, this is in addition to his $27,585.00 monthly and $54,297.00 quarterly draws.  While it is accepted that profit and performance payments are not guaranteed it is clear that even after, for example, the commencement of the global financial crisis, the husband has continued to receive significant profit and performance payments.  Thus, while it is accepted that market conditions mean that this year’s payments are likely to be less than last year’s, even the husband’s evidence does not suggest that the payments are likely to be significantly less. 

10. According to the husband’s Financial Statement his total average weekly income is $10,385.00 and total personal expenditure is $13,403.00.  This latter figure includes $4,731.00 income tax, $3,923.00 to the wife (pursuant to the initial interim orders), $877.00 credit cards and $1,204.00 rent.  He resides with his partner for whom he pays her share of their rental accommodation but otherwise does not contribute to her support.  Surprisingly her financial circumstances are not in evidence.  Of the $1,664.00 he claims as average weekly expenses significant amounts are allocated for clothing and shoes, entertainment, holidays and household repairs.  For the 22 hours per week the children spend with him, he claims average weekly expenses of $1,006.00, which it is observed includes $350.00 towards holidays.

11. The husband’s average weekly income figure referred to above does not sit comfortably with his bank records and 2011 taxation return, to which greater weight is attached.  His 2011 taxation return shows Company C income of $609,000.00.  Via a services trust, the husband directed a further 15 per cent of his income to the wife; albeit this was not received by her.  The effect of this is that the husband’s total remuneration package from Company C for the preceding year constitutes the 85 per cent declared in his taxation return, plus 15 per cent which he directed to the wife.  When the husband’s evidence that this year his performance and profit bonuses are likely to be lower (but not significantly) is taken into account, it is likely that his total average weekly income is at least about $3,000.00 per week more than contained in his Financial Statement.  As to the wife’s submission (as outlined in her counsel’s aide memoir) that his income is even higher, this calculation erroneously mixed financial and calendar years and thus produced an unsafe result.  Because of the unsatisfactory manner in which the husband presented evidence in relation to his income it is no surprise that this occurred.  

12. Unbeknownst to the wife, post-separation the husband entered into an agreement with the ATO and credit card providers to repay approximately $300,000.00 and $63,000.00 respectively.  The details of these arrangements are set out at paragraphs 20 – 22 of the husband’s affidavit and in his Financial Statement.  Correspondence from the ATO attached to the husband’s affidavit shows that if he has difficulty in relation to the repayment plan he is invited to contact the ATO.  There is little reason to doubt that he is able to seek to vary the arrangement.  It is reasonable to anticipate that he can also seek to alter the arrangement with his credit card providers.  While it is accepted that because of the nature of the husband’s employment a balanced approach to his obligations to creditors such as these, as well as his obligations to the wife and children is required, it is not the case that his unilateral arrangement with these creditors has greater priority to his obligations to the wife and children.  Thus in determining the reasonableness of the husband’s expenditure and his necessary commitments it is appropriate to proceed on the basis that the husband is able to approach these creditors and seek to alter (by reducing the instalment payments) the repayment schedule.

13. Nor is it accepted that his average weekly expenses are entirely necessary, albeit they appear to be consistent with the standard of living enjoyed by the parties prior to separation.  In light of the financial catastrophe which the husband’s gambling appears to have visited upon the family, it is not reasonable for him to expect to maintain that lifestyle ahead of his financial obligation to the wife, the children and his creditors.  With little effort by him his expenses could be significantly modified, for example in relation to clothing and shoes, entertainment, repairs, holidays and the like.  Nor at this stage is it accepted that he needs to spend the equivalent of $500.00 each week on holidays for himself and the children.  It is accepted that pending any further child support application by the wife, that the husband will keep his promise to pay her $4,500.00 per month child support.  In this regard his offer that the payment is secured by direct payment from his employers will be reflected in the orders as a notation.

14. Calculated on this basis the husband is reasonably able to pay the wife the periodic spousal maintenance sought by her. It is appropriate that these payments are made from his monthly draw, the next of which is due in approximately four weeks.  In the meantime he will receive a quarterly draw which, given that the payments he must make pursuant to these orders and his undertaking constitutes a significant component of his monthly draw, prudence suggests he at least partly puts aside towards his future expenses.  

15. The husband is also reasonably able to contribute to the wife’s support from his performance bonus and profit share.  Because the amount which he will receive cannot be determined with certainty it is appropriate to order that the wife receives a percentage rather than sum certain.  On the basis that his next payments will be less, but not significantly less than last years payments, the wife should have 35 per cent of each future payment.  This will provide her with a buffer for unanticipated expenses, enable her to at least start to repair the family home and supplement her capacity to meet her legal expenses. 

16. The wife’s argument in favour of an injunction which would have all income bar his monthly draw placed into an account controlled by her does not find favour.  In circumstances where the only liabilities which will not be protected are personal to the husband, it is for those creditors to seek to protect their interests if there is a basis for so doing. 

17. By way of final observation, it is regrettable that it was not possible to address the wife’s child support application.  In the event a competent application is filed by her in a timely way, the most efficient use of the Court’s judicial resources is that the application is listed before me. 

18. For these reasons the orders identified at the start of this judgment will be made.

I certify that the preceding forty seven (47) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ryan delivered on 14 June 2012.

Associate:     

Date:              14 June 2012