TAYLOR & CLAYTON

FAMILY COURT OF AUSTRALIA

TAYLOR & CLAYTON

[2017] FamCA 195

FAMILY LAW – PROPERTY – MAINTENANCE – INJUNCTION – Interim – Where the parties have entered contracts to sell the matrimonial home and purchase a new property – Where the wife seeks orders requiring both parties to obtain finance and do what is otherwise necessary to complete the purchase of a new property including using the balance of monies from the sale of the former matrimonial home – Where the husband opposes the orders sought by the wife and says that he does not have the ability to finance the mortgage of the new property including the capacity to service a new borrowing – Where the husband seeks an order for the immediate sale of the new property – Where orders requiring the parties to obtain finance are made – Where the parties agree for orders to be made by way of partial property settlement, freezing of assets in the family trust and for a payment to be made in reduction of a loan of the husband – Where interim orders are made for exclusive occupation of the new property, for the regular payments of mortgage and rates on the new property, spousal maintenance, non-periodic child support and urgent period child support.

Child Support (Assessment) Act1989 (Cth)

Family Law Act 1975 (Cth)

Redman & Redman (1987) FLC 91-805

APPLICANT:

Ms Taylor

RESPONDENT:

Mr Clayton

FILE NUMBER:

…

DATE DELIVERED:

31 March 2017

PLACE DELIVERED:

Sydney

PLACE HEARD:

Sydney

JUDGMENT OF:

Watts J

HEARING DATE:

27 March 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Dickson, QC

SOLICITOR FOR THE APPLICANT:

Barkus Doolan

COUNSEL FOR THE RESPONDENT:

Mr Kirk, QC

SOLICITOR FOR THE RESPONDENT:

Swaab Attorneys

PENDING FURTHER ORDER

The parties do all things to cause the Clayton Investment Trust to pay:
1.1.$... to each party by way of partial property settlement; and
1.2.$... to X Pty Limited in reduction of the husband’s loan.
Upon the settlement of the sale of the property at A Street, Suburb D NSW (“the D property”), the husband and the wife shall do all acts and things and sign all documents as are necessary to direct the net sale proceeds to be paid in the following manner:
2.1.All costs and expenses of the sale including legal costs and disbursements, agents commission, valuers fees and auction expenses (including repayment of any such expenses as have been paid by either or both of the parties);
2.2.The amounts required to pay all municipal and water rates outstanding with respect to the D property;
2.3.The balance shall be deposited into an interest bearing account in the joint names of the husband and the wife and the parties shall be restrained by injunction from drawing upon the said account without the prior written consent of the other party or an order of this court.
Subject to these orders, the husband in his personal capacity and in his capacity as sole director and shareholder of C Holdings Pty Limited, the trustee of the C Investment Trust, be restrained by injunction from withdrawing from, disposing of, alienating or in any way dealing with any of the investments of the C Investment Trust without the prior written consent of the wife or an order of this court.
The husband and the wife shall forthwith do all acts and things and sign all documents as are necessary to complete the purchase of the property at B Street, Suburb E NSW (“the E property”) and, in this respect, the parties shall forthwith upon the making of these orders:
4.1.Attend upon Mr H of NAB Private to facilitate the parties borrowing such sum of monies as is necessary to complete the purchase of the E property:
4.1.1.Allowing inspection of the E property at all reasonable times;
4.1.2.Doing or saying anything to hinder or prevent the purchase being effected;
4.1.3.Signing and completing all documents requested by the solicitor, agent and bank;
4.1.4.Providing all documents requested by the solicitor, agent and bank;
4.1.5.Attending all meetings by the solicitor, agent and bank;
4.2.Direct the proceeds from the sale of the D property deposited to the joint account to be applied to the purchase;
4.3.If applicable, withdraw funds from the C Investment Trust to be applied to the purchase.
Following settlement of the purchase of the E property, the wife shall have the sole exclusive right to occupy the E property and the husband is restrained from entering the E property without the wife’s express written consent.
The wife shall be solely responsible for payment of:
6.1.The loan repayments, limited to an amount of $... per month, to National Australia Bank Ltd or any other financial institution in respect of which monies are borrowed for the purchase of the E property;
6.2.Council and water rates on the E property.
The husband pay by way of non-periodic child support the following expenses:
7.1.1.All fees for each of K and R as listed on all tax invoices issued to the parties by Y School or such other school as the children or any of them may attend, including tuition fees, school and sports uniforms, extra-curricular activities, domestic school excursions, stationary, text books and equipment;
7.1.2.All fees for V as listed on all tax invoices issued to the parties by Z School or such other school as V may attend, including tuition fees, school and sports uniforms, extra-curricular activities, domestic school excursions, stationary, text books and equipment;
7.1.3.All instalments at the highest scale to Medibank Private Limited including cover for private hospital, optical, physiotherapy, dental and orthodontic expenses in respect of the children;
7.1.4.Any private hospital, optical, physiotherapy, dental, orthodontic and other medical expenses incurred in respect of the children not able to be recovered from Medicare or the private health insurer.
The husband pay by way of urgent child support pursuant to s 139 of the Child Support (Assessment) Act 1989 (Cth) and pending issue of any administrative assessment the sum $... per child per month.
The husband pay by way of spousal maintenance the sum of $... per month.
The husband shall be responsible for paying any additional periodic loan repayments to the National Australia Bank Limited or any other financial institution in respect of which monies have been borrowed to settle the purchase of the E property that exceed an amount of $... per month.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: …

Ms Taylor

Applicant

And

Mr Clayton

Respondent

REASONS FOR JUDGMENT

Not all of the applications that the parties have filed were able to be accommodated within the confines of a busy duty day.
In an Application in a Case filed 15 March 2017 the wife had sought orders for:
2.1.interim property settlement;
2.2.in the alternative to the lump sum property order in favour of the wife, a dollar for dollar costs order;
2.3.freezing of funds from the settlement of the sale of the former matrimonial home at A Street, Suburb D NSW (“the D property”);
2.4.a mandatory injunction to require both parties to obtain finance and to do what was otherwise necessary to complete the purchase of a new property at B Street, Suburb E NSW (“the E property”) including using the balance monies from the sale of the D property as part of the funds for the purchase of the E property;
2.5.an injunctive order against the husband restraining him from dealing with investments of the C Investment Trust without the wife’s prior written consent;
2.6.granting the wife exclusive occupation of the E property;
2.7.spousal maintenance;
2.8.child support departure; and
2.9.adult child maintenance (to commence when the parties’ eldest child completes secondary education).
The husband’s Response to an Application in a Case filed 23 March 2017 sought:
3.1.an order for equal shared parental responsibility in relation to the parties’ three children aged …, … and …;
3.2.orders in relation to the children living with, spending time with and communicating with the parents;
3.3.an order for a Chapter 15 expert report;
3.4.injunctions restraining each of the parties from discussing with media organisations or publishing in any form, personal and financial details in relation to the breakdown of the parties’ relationship;
3.5.interim property settlement;
3.6.release of funds from the sale of the D property to complete the purchase of the E property but only on the basis that the parties place the E property immediately on the market for sale;
3.7.an order that neither party take occupancy of the E property;
3.8.payment be made of an outstanding loan owed by the husband in the sum of $...;
3.9.payment of other debts owed by the husband (to an accountant and a mediator);
3.10.the delivery by the wife to the husband of certain chattels; and
3.11.expedition of the final hearing.
Because of time constraints at the hearing on 27 March 2017 the wife only sought to pursue on that day applications for the following orders (Exhibit 1):
4.1.That the parties do all things to cause the C Investment Trust to pay:
4.1.1.$... to each party by way of part property settlement
4.1.2.$... to X Pty Limited in reduction of the husband’s loan
4.2.Upon the settlement of the sale of D property, the husband and the wife shall do all acts and things and sign all documents as are necessary to direct the net sale proceeds to be paid in the following manner:
4.2.1.all costs and expenses of the sale including legal costs and disbursements, agents commission, valuers fees and auction expenses (including repayment of any such expenses as have been paid by either or both of the parties);
4.2.2.the amounts required to pay all municipal and water rates outstanding with respect to D property;
4.2.3.the balance shall be deposited into an interest bearing account in the joint names of the husband and the wife and the parties shall be restrained by injunction from drawing upon the said account without the prior written consent of the other party or an order of this court.
4.3.The husband and the wife shall forthwith do all acts and things and sign all documents as are necessary to complete the purchase of E property and, in this respect, the parties shall forthwith upon the making of these Orders:
4.3.1.attend upon Mr H of NAB Private to facilitate the parties borrowing such sum of monies as is necessary to complete the purchase of E property:
4.3.1.1.allowing inspection of E property at all reasonable times;
4.3.1.2.doing or saying nothing to hinder or prevent the purchase being effected;
4.3.1.3.signing and completing all documents requested by the solicitor, agent and bank;
4.3.1.4.providing all documents requested by the solicitor, agent and bank;
4.3.1.5.attending all meetings by the solicitor, agent and bank;
4.3.2.direct the proceeds from the sale of D property deposited to the joint account to be applied to the balance of the purchase
4.4.That pending further order, the husband in (sic) personal capacity and in his capacity as sole director and shareholder of C Holdings Pty Ltd, the trustee of the C Investment Trust, be restrained by injunction from withdrawing from, disposing of, alienating or in any way dealing with any of the investments of the C Investment Trust without the prior written consent of the wife or an order of this Court.
4.5.That following settlement of the purchase of E property, the wife shall have the sole exclusive right to occupy E property and the husband is restrained from entering E property without the wife’s express written consent.
4.6.That subject to the Court making the orders sought by the wife in respect of spouse maintenance, departure of child support and adult child maintenance, the wife shall be solely responsible for payment of:
4.6.1.the loan repayments to National Australia Bank Ltd;
4.6.2.Council and water rates.
4.7.The husband pay by way of:
4.7.1.urgent child maintenance pursuant to s 139 of the Child Support (Assessment) Act pending issue of any Administrative Assessment
4.7.2.thereafter by way of Departure for any such Assessment
4.7.3.the expenses set out in paragraph 10 of the wife’s Application in a Case as follows:
4.7.3.1.all fees for each of K and R as listed on all tax invoices issued to the parties by Y School or such other school as the children or any of them may attend, including tuition fees, school and sports uniforms, extra-curricular activities, domestic school excursions, stationary, text books and equipment;
4.7.3.2.all fees for V as listed on all tax invoices issued to the parties by Z School or such other school as V may attend, including tuition fees, school and sports uniforms, extra-curricular activities, domestic school excursions, stationary, text books and equipment;
4.7.3.3.all instalments at the highest scale to Medibank Private Ltd including cover for private hospital, optical, physiotherapy, dental and orthodontic expenses in respect of the children;
4.7.3.4.any private hospital, optical, physiotherapy, dental, orthodontic and other medical expenses incurred in respect of the children not able to be recovered from Medicare or the private health insurer.
4.7.4.$... per child per month (being a total of $... per month)
4.8.spousal maintenance of $... per month (a total payment of $...per month)
The husband sought the following orders in relation to the E property (Exhibit 2);
5.1.That the parties forthwith do all acts and things and sign all documents necessary to cause the property situated at and known as B Street, Suburb E, being the proposed … with Folio Identifiers … and … respectively (“the E property”) to be listed for sale with the agent Mr J of J Real Estate and it is noted that in the event that this Order for immediate sale is not made then the husband will oppose the settlement of the E purchase.
5.2.That in respect to the above order, the parties are to forthwith:
5.2.1.instruct Firm G to act as the solicitor on the conveyancing aspect of the sale of the E property including but not limited to preparing a contract for sale;
5.2.2.instruct the agent to recommend a marketing programme and to accept and act in accordance with the agent’s marketing recommendation for the sale;
5.2.3.sell the property if a genuine bona fide offer is received for a sale price greater than or equal to $...;
5.2.4.execute a contract for sale; and
5.2.5.execute all other documents necessary to complete the sale.
5.3.That in the event that the parties are unable to sell the E property prior to settlement of their purchase of the E property and the parties have taken such steps as shall be possible to extend the date for settlement and if extended no sale takes place within that extended period, then:
5.3.1.The parties shall do all acts and things and sign all documents necessary to jointly obtain finance in the amount of $..., being such funds as are required to meet the shortfall between the net proceeds of sale of the D property and the costs of completion of the purchase of the E property; and
5.3.2.The parties shall do all acts and things and sign all documents necessary to complete the purchase of the E property; and
5.3.3.Upon completion of the purchase, the parties continue to do all acts and things necessary in accordance with the above orders to effect the sale of the E property at the earliest available opportunity.
5.3.4.In the event that the husband is unable to obtain the finance referred to on reasonable terms (in respect of which the husband shall be entitled to make the said assessment) then the parties shall take such steps as shall be required to advise the vendor that they are unable to settle.
5.4.Upon the sale of the E property, the proceeds of sale are to be applied in the following order and priority:
5.4.1.payment of agent’s fees, commission and marketing costs;
5.4.2.payment of legal fees of and associated with the sale;
5.4.3.the balance to discharge any mortgage and/or finance secured over the property;
5.4.4.the balance to be paid to a controlled monies account operated on behalf of the parties by Swaab Attorneys, with the funds to be held pending agreement in writing between the parties or further order of the court.
5.5.That upon completion of the sale of the E property, neither party reside at the said address, pending the sale of the E property.
The husband did not file a formal response in relation to the application for spousal maintenance or child support but proposed that he pay to the wife a sum of $... per week ($... per month) to cover the costs of the household for herself and the children in addition to costs of school fees, health insurance and other outgoings that he is currently paying. The husband formally proposed that the wife receive $... per week by way of spousal maintenance and that the wife receive $... per week per child in child support.
The husband also sought an order that the wife receive a sum of $... from the net proceeds of the sale of the D property to provide accommodation for herself and the children, such funds to be categorised as partial property settlement.
The applications in relation to interim parenting, gag order injunctions, payments to an accountant and mediator, delivery of chattels and the expedition of the final hearing were stood over for further hearing on 7 April 2017.
The parties have agreed that they each should receive the sum of $... by way of partial property settlement. The wife says that that money should be immediately available from the C Investment Trust. The husband’s application is that that money come from the proceeds of sale of the D property. Senior counsel for the wife submitted that the husband’s application was deliberately designed to make it more difficult to be able to settle on the purchase of the E property. It is not obvious to me as to why taking those funds from the proceeds of the sale of the D property will make it more difficult to settle upon the purchase of the E property. As set out below, funds will probably also need to be released from the C Investment Trust to complete the purchase.
The husband was born in … and is presently … years of age and the wife was born in … and is presently … years of age. They are both apparently in good health.
The parties commenced cohabitation in …, married in … and finally separated on …. They cohabited for about … years.
There are three children of the marriage namely, K born in … (aged … years), V born in … (aged … years) and R born in … (aged … years). The children have resided with the wife since separation.
At the commencement of the cohabitation neither party had any significant property. Both were employed full time on modest salaries. The wife continued to work full time up until 1999 when she ceased employment and assumed the role of the primary homemaker and parent. The husband on the other hand has been highly successful in his chosen profession and currently earns about $... per annum.

The parties disagree as to the value of the net pool of property held by the parties. It is the husband’s case that the parties have about $... in assets. The wife asserts that there are assets of $.... The major differences are:
14.1.The wife has not taken into account a loan of about $... that the husband has with his employer which the wife asserts is part of the husband’s employment package; and
14.2.The wife ascribes to the husband rights under a licence agreement to a value of $... but the husband says that the income that the wife has capitalised to reach that figure is part of his salary package and should not be treated as property.
The critical problem that has arisen is that just prior to separation on 23 June 2016 the wife (it is agreed on behalf of herself and the husband; but in her name alone) entered into a contract to acquire (off the plan) the E property for $.... A deposit of $... was paid. In order to fund that acquisition, the parties’ jointly owned matrimonial home was sold for $.... That settlement is due to complete on … (with a possible extension settlement date to …). The wife proposes that the net proceeds of the sale of the D property be used to partly pay the purchase price of the E property.
It is the husband’s case that with the parties’ finances split and with substantially higher accommodation costs associated with separate residences, neither party can afford to retain the E property and the husband considers that he no longer has the capacity to borrow sufficient funds to complete the purchase of the E property or in the alternative if it is found that he has some capacity to borrow funds to complete the purchase of the E property it would be only on a very short term basis.
As indicated, it is the husband’s proposal that the wife and the children be reaccommodated in rental accommodation funded by way of a lump sum advance from the sale of the D property.
On … the parties signed a document entitled “Interim Mediation Agreement”. It was not meant to be a legally binding document but represented the parties’ understanding as to the arrangements they had entered into at that time. The agreement was to be for a period of six months but either party could at any time withdraw from the agreement prior to the expiration of that six months. It was also recorded that neither party would use the agreement or any part of it for the purposes of advancing his or her case in future proceedings. The wife now seeks to rely upon the agreement to explain the basis upon which she agreed to sell the D property in which she and the children were living.
The agreement recorded that the parties had purchased the E property prior to separation and that the costs of not proceeding with that purchase would be excessive. The parties agreed to proceed to settlement when building works reached a stage when the property was habitable. In order to facilitate that settlement the parties agreed to place the D property on the market for sale as soon as possible and it was intended that the sale of the D property and the settlement of the E property coincide in time.
In …, pursuant to the Interim Mediation Agreement, the parties agreed that the husband would receive $... per month from his income and the wife would receive $... per month. The agreement proposed that the children’s school expenses would be paid from the $... per month. Any arrears in school fees were to be paid out of cash reserves. The parties also in this agreement reached arrangements in relation to the children’s time with their father but it seemed an agreed fact that the children had spent no overnight time with their father since the agreement was signed in ….
Senior counsel for the wife conceded that whilst the husband may have been plainly nervous about the acquisition of the E property, he had not raised its affordability as an issue until he was put to responding to the application that had been filed by the wife in these proceedings.
The parties have paid a 5 per cent deposit ($...) on the E property but the deposit due under the contract is 10 per cent. Consequently if the parties don’t proceed to complete the purchase of the E property the parties will lose $.... There is also the prospect of the wife also being responsible for contractual damages. I have no way of estimating the risk that those damages might be incurred. There is some suggestion that the E property may have increased in value.
The husband says “the purchase of the [E] property was a very expensive mistake”.
The issue is whether the parties can fund the acquisition of the E property. The orders which the wife seeks I make would require the parties and in particular the husband to enter into a borrowing. Senior counsel for the husband did not dispute that the court has the jurisdiction and power to make such an order but he submitted the court would only do that in a rare circumstance. Senior counsel for the wife submitted in response that this was one of those situations where a contract had actually been signed and the mandatory injunction sought by the wife was one that was designed to enable the wife to fulfil her contractual obligation under the contract and save the parties losing at least $.... Senior counsel for the wife also referred to the reputational damage that a default by the parties on this contract would likely generate and the possible impact that might have upon the contractual relationship with the husband’s employer.

How much will need to be borrowed?

At paragraph [98] of the husband’s affidavit filed 23 March 2017 the husband calculates that, upon the sale of the D property, the parties will receive an amount of $... after costs associated with its sale are paid.
The purchase price of the E property is $.... A 5 per cent deposit of $... has already been paid and stamp duty in the sum of $... has also been paid to the agent. At [102] of his affidavit, the husband concludes that the parties will need to pay $... (after the husband has allowed $... for legal expenses, adjustments and miscellaneous costs on the purchase of the E property) to complete the purchase of the E property.
It is the wife’s case that the whole of the net proceeds of the sale of the D property should go towards the acquisition of the E property. The remaining funds that would need to be found are in the sum of $... ($... less $...).
The husband has available to him money in the C Investment Trust. At [123] the husband says that the trust currently holds assets of about $.... There is cash of $.... That cash will be expended because the parties have agreed that they will each take $... of it by way of partial property settlement and an amount of $... will be paid to the husband’s employer in reduction of the husband’s loan with his employer. The trust however has another asset described by the husband as “N Managed Fund” which has a value of $... as at 20 March 2017. The wife asserts that this asset consists of publicly listed shares. Senior counsel for the husband was unable to say how liquid they were but I infer that they are readily convertible to cash.
Consequently, I find that there is $... available from the trust that could be used towards the acquisition of the E property. If that happened then the amount of the borrowing needed to settle the E property would be $... ($... - $...).
As set out below, the parties originally thought they would borrow $... to assist in the purchase of the E property, leaving most of the cash undisturbed in the NN Managed Fund.

What interest rate?

The parties disagree about the interest rate that should be applied when calculating the periodic cost of a borrowing to assist in the purchase of the E property.
The wife refers to a conditional approval letter from NAB Private issued in June 2016. Originally the parties had approval for a borrowing of $.... In a subsequent email dated 14 February 2017 that approval was revisited. That email provided approval for a borrowing of $.... That borrowing together with the proceeds of sale of the D property and payment of a small shortfall from the C Investment Trust would enable the parties to complete the settlement of the purchase of the E property.
At page 305 of the exhibits to the wife’s affidavit, the National Australia Bank has provided an indicative repayment calculation in respect of a loan that has taken on an interest only basis for four years and then on a principal and interest basis for a further six years. In the first four years on an interest only basis the indicative average repayment is in the sum of $... per month.
The husband now wishes to assert that the calculation of interest should be done taking a far more conservative approach. The husband at paragraph [103] of his affidavit says that any loan approval that the parties had before separation was conditional (presumably upon them being an intact couple) and is no longer applicable given the significant change arising from the separation. The husband asserts that there is no current loan approval and consequently the terms of any loan approval are unknown. The parties have both done what is necessary to obtain a new loan approval. The husband has submitted that a “standard” interest rate of 7.2 per cent interest only should be used because he asserts “[w]hilst I may be able to obtain a slightly more favourable interest rate, I am concerned to base affordability of loan repayments on anything less than the standard interest rate, in circumstances where the interest rates have been low for so long and it is likely that they will rise”. Senior counsel for the husband invited me to take judicial notice of the fact that the banks had very recently marginally increased lending rates.
Given at the time the parties entered into the contract to acquire the new property they had a conditional approval and a principle and interest repayment at an indicative rate of 4.45 per cent, there is no reason I should adopt an interest rate which was 60 per cent more than that quoted rate.
I conclude that a figure of $... per month should be adopted as the required repayment of the borrowing to enable the settlement of the purchase of the E property. Even if I am wrong about that, as discussed below, there is sufficient surplus in the husband’s income and cash reserves in the trust to cover any higher interest rate that might be reasonably anticipated.

Husband’s capacity to pay

The husband filed a financial statement on 23 March 2017. The financial statement, on its face, indicates that the husband has a total average weekly income of $... per week and total expenditure of $... per week (before any payment is made in respect of any new borrowing, spousal maintenance or periodic child support). That is, there is a shortfall of approximately $... per week on the face of the husband’s financial statement.
Senior counsel for the wife pointed to the following difficulties with the husband’s financial statement:
38.1.At item 15 the husband asserts that although he receives an annual bonus of $... from his employer, that bonus is applied directly towards the reduction of his loan with his employer and consequently is not to be treated as income. Further, the husband at item 29 of his financial statement asserts that he has an expenditure of $... per week ($... per annum) being “balance of loan payable from husband in addition to the bonus referred to in Item 15”. It is clear from item 19 on the husband’s financial statement that tax payable on the annual bonus is included at that line item.
38.2.Senior counsel for the wife submits, and I accept, that the financial statement should be corrected so that item 15 has the figure of $... inserted as “other income” and item 29 is increased as an expense from $... to $.... The effect of those alterations is to increase the available weekly income to the husband by an amount of $... per week ($... less $...).
38.3.Senior counsel for the wife submits, and I accept, that the husband’s credit card payments at item 30, being in the sum of $... per week, are effectively a double counting of regular personal weekly expenses. The husband’s current credit card debts at item 51 total $.... The husband has in personal savings at item 37 an amount in excess of $61,500 in cash. I accept that that weekly expense of $... as claimed by the husband at item 30 should be removed.
38.4.Senior counsel for the wife also drew attention to the last three weekly expenses claimed by the husband in Part N of the husband’s financial statement (at page 12) being legal fees $...; BAS professional rights $... and estimated accounting fees $1,115. The husband lists as owing at item 53 in relation to accounting fees an amount of $... and owing in relation to legal fees an amount of $.... The order made for partial property settlement will take care of both of those sums. In relation to the BAS line entry, senior counsel for the husband said that that was an expense which related to GST connected with the income arising from the husband’s professional rights Licence. The professional rights Licence Agreement between the C Investment Trust and the husband’s employer is found at tab 5 of the exhibits to the wife’s affidavit. Clause 3.5 of the licence agreement makes clear that the licence fee is exclusive of a GST and if the holder is liable to pay GST on the licence fee, the holder may invoice the licensee for an amount of GST which the licensee will pay. Schedule 2 of the licence agreement also makes plain that the licence fee is a sum of $...per annum “+ GST per annum”. That base amount of $...per annum is the same amount of income reported on the husband’s financial statement at item 11 in the sum of $... per week (being $... per annum). That is, the sum reported at item 11 of the husband’s financial statement does not include the GST to which the trust is entitled from the husband’s employer under the licence agreement. Accordingly, there is no basis upon which the husband should claim the BAS professional rights as an expense.
Conclusion in relation to the husband’s financial statement
The above analysis indicates that the following adjustments should be made to the calculation of the husband’s average weekly income and personal expenditure:

Weekly income

… + …

Subtotal: …

Weekly personal expenditure

… + … – … – … – … – … – …

Subtotal: …

The husband’s surplus weekly income before consideration is given to the allowance for future borrowings payment of spousal maintenance and child support is therefore in the sum of $... ($... – $...). This is a monthly surplus of $... per month.
I conclude that the husband’s income creates a capacity to service a borrowing of $... both in the short and medium term. If $... is needed to service the new mortgage each month, the husband has a remaining capacity of $...per month ($... – $...).
There are compelling reasons why in those circumstances the parties should be required to do all things and sign all necessary documents to affect a refinance so that the settlement of the conveyancing transaction associated with the acquisition of the E property can be completed.
The husband argues that the E property should be immediately sold as there is no chance that the wife would be able to achieve a property settlement order that would allow her to retain the E property. The wife at the final hearing wishes to argue that part of the husband’s income stream has a value of $.... Apart from that income stream, the husband otherwise currently has additional earnings of $.... If the wife was seeking the whole of the value of the E property in the property settlement, it is less than 100 per cent of the pool of assets on her case. Whilst at first sight it seems to be a claim that is probably outside a reasonable range of results, I do bear in mind that the husband would still have an earning capacity of about $... a year that the wife could point to pursuant to s 79(4)(e) of the Family Law Act 1975 (Cth) (“the Act”). I am consequently not prepared at this point to make an interim order based on a finding, which I am invited to make by senior counsel for the husband, that there is no possibility that the wife would receive the new property.
The wife points out that in the event the E property does increase in value but ultimately needs to be sold, occupying the E property as a principle place of residence might be advantageous when calculating CGT on such a sale.
The husband is currently paying an amount of $... per week ($... per month) in relation to his own rental accommodation. The husband wants to prevent the wife and children occupying the E property and has offered an amount of $... lump sum to the wife in the medium term to acquire her own rental accommodation. There is however no good reason why the wife and the children should not live in the E property particularly in circumstances where that was the basis upon which the parties had agreed, in the [mediation] agreement, to sell the D property.

Spousal maintenance and child support

The Full Court in Redman & Redman (1987) FLC 91-805 made it clear that an order for interim spousal maintenance does not involve as final or exhaustive hearing as would be the case if one were hearing the matter finally and that there is a greater degree of flexibility in dealing with applications of this sort.
The wife’s applications for spousal maintenance and child support are made under s 74 of the Act and s 139 of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”). The wife has applied for but not yet obtained a child support assessment. Section 139 of the Assessment Act provides that, at any time after an application has been made to the Registrar for an administrative assessment, a court is of the opinion that the child is in urgent need of financial assistance the court may order the payment of such periodic or other amount as the court considers appropriate. Any such order has to be limited to a specific period (in this case it would be appropriate to limit the order to the date of the issue of the anticipated administrative assessment).
The wife seeks a spousal maintenance order in the sum of $... per month and an order under s 139 of the Assessment Act of $... per child per month (overall the wife is seeking a total payment to her of $... per month).
The husband has conceded that he will attend to payments in respect of the children’s activities and payments in relation to education expenses including fees, levies, books and uniforms and payment of medical, dental and optical (not including health insurance premiums). Those figures are set out in Part N of the husband’s Financial Statement as $... (… + … + …). In addition, the husband pays health insurance for the children.
For present purposes, the husband accepts that the wife does not have the capacity to support herself or to assist in the support of the children.
The wife’s evidence in relation to her needs and the children’s needs are set out at tab 23 in the exhibits to the wife’s affidavit. The expenses claimed in that schedule are an amount of $... per annum. The wife’s amended application seeks an amount of $... per annum. The husband submits that the amount sought by the wife is grossly excessive.
The husband’s outline of argument at paragraph 7.4 challenges various amounts claimed by the wife and they include (annual figures quoted):
52.1.$...to repair appliances (and presumably the $... that the wife ascribes to the children in respect of the same item);
52.2.Health insurance of $... for the children when the husband has on his financial statement provided that he would pay for that;
52.3.$... for the wife’s dental treatment and $... for the children’s dental treatment;
52.4.$... for counselling when there is no information about the counselling to which that claimed expense relates;
52.5.Travel and holidays of $... for the wife and $... for the children;
52.6.Subscriptions and memberships of $... for the wife and a similar amount for each of the children with no indication of what subscriptions and memberships they relate to;
52.7.There are various items relating to entertainment and outings being items 43, 44 and 66. The total figure for entertainment for the wife and children is $....

Senior counsel for the husband says that his favourite is the food/vet/kennel expenses of $... per annum for one dog.
The husband does not accept the majority of the estimates given by the wife. At paragraph [94] of his affidavit, apart from those mentioned in the preceding paragraphs, the husband focusses upon:
54.1.item 10 (cleaning) at $... per week in circumstances where the wife does not undertake substantive work outside the home;
54.2.item 6 (food and groceries) and item 44 (lunches/school lunches) which are an amount of $... per week for the children. The husband says that that is far in excess of expenditure of groceries for the family and the children prior to separation;
54.3.item 48 (clothing and footwear) totalling approximately $... per week;
54.4.item 40 (babysitting) at $... per week; and
54.5.item 75 (beautician) at $... per week. The husband says he believes this is excessive under the circumstances and exceeds the wife’s expenditure during the relationship.
Senior counsel for the husband also points to item 21 being a mortgage contingency in the sum of $... per annum (being a payment that the wife would make towards the new mortgage) as not being necessary on the husband’s application. As set out above, the contingency for mortgage payments by the wife is $... per annum ($... per month).
Even if all of the items pointed to by senior counsel for the husband are discounted in the wife’s expense schedule, they do not reduce that schedule of expenses to the level of support that the wife now seeks by way of orders for herself and the children on an interim basis.
The husband draws attention to the fact that the wife advised the NAB in relation to the E loan that the monthly expenses for herself and the children were more like $... a month (or $... per annum). The wife agreed that she did indicate to the NAB that she had some expenses that totalled $... per month but asserted that this was not a complete total of the money that she and the children need on a weekly basis. She asserted that the husband also told the bank that he needed a similar monthly amount. I note in passing that the husband’s personal expenses for himself after deducting (… + … + …) are in the amount of $... a week or $... a month or $...a year. As mentioned, the husband expends a further $... per annum on his accommodation.
At paragraph [91] of the husband’s affidavit he says that he asked his solicitors to require the wife to give some documentary evidence which demonstrates the amounts that have been expended in the past. It didn’t seem a matter of contest that not all of that documentation has been provided.

Conclusion about payment of the costs of the new borrowing, spousal maintenance and child support

The wife’s application is that she be paid $... per month by way of spousal maintenance and child support but on the basis that she would pay loan repayments to the National Australia Bank in relation to the new borrowing and council and water rates in relation to the E property.
In the event that the wife’s responsibility for making repayments on the loan on the E property is limited to the predicated sum of $... per month (and the wife was paid spousal maintenance in order to be in a position to meet those repayments), it would leave $... a month (… – …) for the wife for additional spousal maintenance and child support. Taking a broad brush approach, I conclude that it would be proper to make an order for spousal maintenance in the sum of $... per month and appropriate to make an urgent child support order in the sum of $...per month per child.
Based on what is discussed above, the husband will have a surplus of income in the sum of $... per month (… – …). In those circumstances, it is appropriate that in the event that more than $... per month is needed to service the new borrowing, the husband should be responsible for that additional payment.

Other orders

The wife seeks an order that the funds in the C Investment Trust be frozen subject to the written consent of the parties or further court order. As indicated above, in the event that $... is borrowed, there will be the need to access funds in that trust to an amount of $... (… – …). The husband did not speak against the injunctive order being made in relation to the trust and it is appropriate that that order be made so that the husband does not have unfettered access to those funds.
The husband has agreed to continue to pay by way of non-periodic child support, those expenses referred to by the wife in paragraph 10 of her Application in a Case.
The other outstanding applications have been adjourned for further hearing to 7 April 2017.

I certify that the preceding sixty four (64) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Watts delivered on 31 March 2017.

Associate:

Date: 31.3.2017

[2017] FamCA 195

31 March 2017

Key Legal Topics

Areas of Law

Family Law

Statutory Interpretation

Legal Concepts

Appeal

Costs

Damages

Remedies

Statutory Construction

Weekly income	… + …
Subtotal: …
Weekly personal expenditure	… + … – … – … – … – … – …
Subtotal: …