TELFER and TELFER
[2016] FCWA 2
•4 JANUARY 2016
JURISDICTION : FAMILY COURT OF WESTERN AUSTRALIA
ACT: FAMILY LAW ACT 1975
LOCATION: PERTH
CITATION: TELFER and TELFER [2016] FCWA 2
CORAM: WALTERS J
HEARD: 30/10/2013, 31/10/2013, 1/11/2013 & 20/01/2014
DELIVERED : 4 JANUARY 2016
FILE NO/S: PTW 5265 of 2011
BETWEEN: MS TELFER
Applicant
AND
MR TELFER
Respondent
Catchwords:
FAMILY LAW – PROPERTY SETTLEMENT – alteration of property interests under the Family Law Act (1975) (Cth) – where both parties had assets at commencement of relationship – where husband's assets at commencement of relationship were of significantly greater value than wife's assets at that time – where husband's real estate assets owned at commencement of the relationship have remained intact or largely intact – consideration of parties’ respective contributions – where husband was reluctant to recognise wife's significant contributions to welfare of family both prior to and after separation – where significant imbalance between parties' incomes and earning capacities – where assessment of s 75(2) factors favours wife
FAMILY LAW – SPOUSAL MAINTENANCE – where wife seeks spousal maintenance in addition to property settlement entitlement – where insufficient evidence about wife’s financial needs provided – where wife failed to meet the threshold test – spousal maintenance application dismissed
Legislation:
Family Law Act 1975 (Cth)
Interpretation Act 1984 (WA)
Category: Not Reportable
Representation:
Counsel:
Applicant: Mr M Beckerling
Respondent: Mr D Childs
Solicitors:
Applicant: DCH Legal Group
Respondent: DS Family Law
Case(s) referred to in judgment(s):
Anast & Anastopolous (1982) FLC 91-201
B & B [2006] FamCA 883
Best (1993) FLC 92-418
Bevan & Bevan (1995) FLC 92-600
Bevan & Bevan [2013] FamCAFC 116
Bolger & Headon [2014] FamCAFC 27
Bonacci & Bonacci [2012] FamCAFC 15
Bremner& Bremner (1995) FLC 92-560
C & C (2005) FLC 93-220
Chapman & Chapman [2014] FamCAFC 91
Chemaisse & The Commission of Taxation & Ors (1990) FLC 92-133
Clauson & Clauson (1995) FLC 92-596
Dekker & Dekker [2014] FCWA 61
Dickons & Dickons [2012] FamCAFC 154
Fielding & Nichol [2014] FCWA 77
Fitzgerald-Stevens & Leslighter [2015] FCWA 25
Hayton & Bendle (2010) 43 Fam LR 602
Herridge & Handerson and Ors [2011] FamCAFC 156
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Line & Line (1997) FLC 92-729
McMahon & McMahon (1995) FLC 92-606
Mitchell & Mitchell (1995) FLC 92-601
Money & Money (1994) FLC 92-485
NHC & RCH (2004) FLC 93-204
Norbis v Norbis (1986) 161 CLR 513
OSF & OJK (2004) FLC 93-191
Pastrikos & Pastrikos (1977) 31 FLR 524
Pierce & Pierce (1998) 24 Fam LR 377
Rollings & Rollings [2009] FamCAFC 87
Russell v Russell (1999) FLC 92-877
Scott & Danton [2014] FamCAFC 203
Stanford v Stanford (2012) 247 CLR 108
Steinbrenner & Steinbrenner [2008] FamCAFC 193
Vautin & Vautin (1998) FLC 92-827
Waters & Jurek (1995) FLC 92-635
Way & Way (1996) FLC 92-702
White & White (1995) FLC 92-648
Williams & Williams [2007] FamCA 313
WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED
Introduction
1Before the Court are the parties' competing applications for alteration of property interests and the wife's somewhat perfunctory claim for spousal maintenance. Parenting issues relating to their two children were resolved by consent in November 2013.
2It is not in dispute that the total net value of the parties' property (including property owned by entities controlled by the husband) is approximately $4.25 million. Nor is it in dispute that the parties' property interests should be divided in such a manner as will result in the wife retaining the former matrimonial home free of encumbrances (with the husband to retain what might be described as the business assets).
3The trial took place in late 2013 and early 2014. Mr M Beckerling of counsel appeared for the wife. Mr D Childs of counsel appeared for the husband.
4At the conclusion of closing submissions on 20 January 2014, I reserved my decision.
Documents relied upon
5The wife relied upon the following:
(a)her trial affidavit sworn 21 June 2013 ("WA1");
(b)her supplementary trial affidavit sworn 17 October 2013 (although the wife did not affirm the affidavit at the commencement of her evidence in chief);
(c)her financial statements sworn 21 June 2013 and 28 October 2013;
(d)joint affidavit of her parents ([Mr W] and [Mrs W]) sworn 25 June 2013;
(e)affidavit of Mrs W sworn 17 October 2013;
(f)affidavit of Mr W sworn 17 October 2013;
(g)affidavit of [Ms L] sworn 17 October 2013;
(h)expert reports prepared by Professor Laidler in June 2012 and October 2013; and
(i)affidavit and valuation of the single expert witness, Jennifer Low, sworn 23 October 2013.
6The wife's papers for the judge were provided to the Court on 28 October 2013. The wife's amended minute of final orders sought was provided to the Court on the same day.
7The husband relied upon the following:
(a)his trial affidavit sworn 11 June 2013 ("HA1");
(b)his supplementary affidavit sworn 27 September 2013 ("HA2");
(c)his financial statement sworn 11 June 2013; and
(d)affidavit of his fiancée, [Ms K], sworn 11 June 2013.
8The husband's papers for the judge were provided to the Court on 24 October 2013.
9Because parenting issues were resolved (largely by consent) on 1 November 2013, much of the affidavit material filed by both parties was rendered irrelevant. For example, no or almost no reference was made to the affidavits of the parties' supporting witnesses at any time after 1 November 2013. Significantly, no or almost no reference was made to them during closing addresses in January 2014. The only notable exception was the affidavit – or, perhaps more accurately, the report – of Ms Low (who gave evidence and was cross-examined).
10Ms Low's report dated 23 October 2013 became exhibit J1. It was tendered by the parties jointly.
Background and financial history
11In these Reasons, and unless otherwise indicated:
(a)all statements of fact comprise findings of fact;
(b)I have referred to the parties as the wife and the husband (and I mean them no disrespect by doing so) – because it is less confusing than referring to them as the applicant and the respondent;
(c)I have not drawn a distinction between proceedings or events before a family law magistrate and proceedings or events in the Family Court of Western Australia;
(d)I have referred to all affidavits filed by or on behalf of the parties as being "sworn", even if they were affirmed by their deponents (and I note that, in a slightly different context, s 5 of the Interpretation Act 1984 (WA) provides among other things that "to swear" includes "to affirm"); and
(e)unless otherwise indicated, references to legislation are references to the Family Law Act 1975 (Cth) – although, when necessary, I have referred to this enactment as "the Act" or the "FLA".
Brief chronological outline
12The husband was born [in] 1965. The wife was born [in] 1968. They met in late 2003 or early 2004 and commenced living together shortly afterwards. They were engaged for approximately three months before marrying [in] 2004. They separated (finally) on 21 May 2011, following an ugly incident during which the parties argued and the husband allegedly assaulted the wife. According to the wife, it was not the first time that the husband had subjected her to family violence.
13The parties divorced in April 2013.
14There are two children of the marriage: [Child A], (born in 2005) and [Child B] (born in 2007). Both boys have lived with the wife since the parties separated.
15When they met, the husband was working overseas in "[engineering]". He also had experience in the building industry. The wife was a teacher.
16At the date of separation, the parties were living in the former matrimonial home at [Property A]. Following separation, the wife moved out (with the boys) and initially lived with friends, and then with her parents. In December 2011, however, she was granted exclusive occupation of Property A. She and the children moved back in January 2012. They have lived there since that time.
17The husband has repartnered, but the wife has not. The husband and his fiancée, Ms K, have a son, [J,] born [in] 2013. They live in a residential property owned by the husband at [Property B]. The husband owned [Property B] before his relationship with the wife commenced. He arranged for extensive renovations to be carried out on the property before moving there – after having lived in Property A after separation until the wife and the boys returned to live there in early 2012. The husband also conducts his business interests from Property B.
18On 1 November 2013, orders were made (largely by consent) providing for the parties to have equal shared parental responsibility for the boys, who are to live predominantly with the wife. The orders also provide for the husband to have substantial and significant time with the boys. I have set out the terms of the November 2013 orders later in these Reasons.
S & E Pty Ltd and S & B Pty Ltd
19Prior to and during the parties' relationship, the husband conducted his business affairs through [S & E Pty Ltd]. After separation, those affairs were conducted through a similarly named entity: [S & B Pty Ltd]
20S & E Pty Ltd is the trustee of the [ABC Construction Unit Trust] ("the Trust").
21In or about 1988, the husband had commenced a business known as [ABC Construction]. S & E Pty Ltd was incorporated, and the Trust established, in March 1994 and April 1995 respectively. Through S & E Pty Ltd and the Trust (which effectively comprised the husband's alter ego) the husband undertook some fairly small-scale and low-budget property development. On at least two occasions he was involved in subdivisions of residential blocks and the construction of additional townhouses or villas on those blocks.
22S & B Pty Ltd was incorporated and registered in February 2012, over six months after the parties separated. Its registered office is at Property A. The husband is the sole director of the company. He also holds its only issued share.
23According to the husband, S & B Pty Ltd was incorporated as part of a process associated with satisfying the requirements of the Builder's Registration Board.
Commencement of cohabitation
24At the commencement of cohabitation, the wife owned a unit in [P Street, Suburb C] (which was subject to a mortgage) and a motor vehicle. I shall refer to the unit as [Property C]. She also had superannuation entitlements valued at approximately $50,000. The total net value of the property owned by the wife at that time (including her superannuation entitlements) was approximately $168,000.
25The wife had qualified as a teacher in 1994 or 1995. She worked full-time in that profession until April 2005, approximately one month prior to Child A’s birth. Her salary was approximately $55,000 in each of the 2004 and 2005 financial years.
26After Child A’s birth in 2005, the wife remained out of the workforce for approximately five years. She resumed teaching on a part-time basis (one day per week) in March 2010. By the time of the trial, she was working two days per week.
27The wife received six weeks of maternity leave at the time of Child A’s birth and took a further 26 weeks of long service leave at half pay. She also received six weeks of paid parental leave at the time of Child B’s birth.
28The wife was diagnosed with depression in 2007. She asserted that it was "managed with counselling, now ceased, and medication": see WA1 at [22].
29The husband had been "working in [engineering] for approximately 4 years" when he and the wife met. He had been working overseas and was "a non-resident of Australia and was residing [overseas] and only returning to Australia for between four and eight weeks each year": see HA1 at [46]. He had been working for [Company F] in remote locations in northern Australia for approximately five years prior to that time. In other words, the husband had worked in paid employment, outside of Perth, for approximately nine years prior to the commencement of cohabitation in mid-2004. His income had been significant.
30Ms Low said that S & E Pty Ltd and the Trust had effectively been "dormant" for the period of approximately nine years during which the husband worked for Company F and overseas.
31Cohabitation commenced when the wife moved in to Property B, where the husband then lived when he was in Perth. It was not until the wife became pregnant with Child A and the parties became engaged [in] 2004, however, that the husband (reluctantly) agreed to cease working overseas and "work locally instead": see HA1 at [70].
32It is not in dispute that the husband had or had control of assets with a net value of approximately $959,000 at the commencement of cohabitation. These included residential properties at Property A, Property B, [Property D], [Property E], a motor vehicle and superannuation. All of the residential properties were encumbered. Some assets were held by the Trust. The husband asserted that he also owned his boat (referred to in the property schedule appearing in these Reasons) at that time.
33It follows from the above that the difference between the net value of the property owned or controlled by the husband at the commencement of cohabitation and the net value of the property owned or controlled by the wife at that time was approximately $800,000.
The husband becomes a registered builder
34The wife said in evidence that the husband had worked in the building industry "for years" before their relationship commenced. He had had his own [roofing] business, although he was not a registered builder. She conceded that he already had skills, knowledge and acumen relating to building and development when the parties met.
35According to the husband, the realisation dawned on him in or about September 2004 (after he had resolved to cease working overseas) that he "needed to increase (his) formal skill set in order to progress in the building/construction field": see HA1 at [70]. In 2004 he commenced full-time work for a company associated with his friend, [Mr M] (see below). He was employed as a project manager/construction manager. At the same time, he started studying towards a Diploma of Building and Construction.
36Between 2005 or 2006 and 2010, the husband studied part-time. He also worked full-time throughout that period, although he concedes that he took four or five hours per week off work to study. He would usually study at home early in the morning, but was required to attend classes between two and four nights each week. Sometimes he studied at TAFE.
37In cross-examination, the husband said that he studied two to three nights per week for a semester and that some classes were from 6 p.m to 9 p.m. The husband also said that he would complete one night of study each week: see HA1 at [73].
38The wife said in evidence that the husband was away from home for the purpose of attending classes or studying on approximately two evenings per week. I am satisfied that the husband has minimised the amount of time he spent attending classes and studying and that the wife's evidence better reflects the true position.
39The wife asserted that she was supportive of the husband in relation to his studies and that she assisted him by (among other things) caring for the children and typing and proof-reading assignments. In cross-examination during the second phase of the trial, however, the husband denied that the wife assisted him while he was studying. He said that, on the contrary, the wife hindered his efforts to study. For example, he asserted that –
(a)he had to "almost hide" the fact that he was studying because it caused her "angst";
(b)the wife was suffering depression and the time he devoted to studying became a "bone of contention";
(c)he resorted to studying in the early hours of the morning because the wife insisted that his studies were not to have anything to do with the family or interfere with his time with the children; and
(d)it felt like the parties were "working against each other" during that period.
40Notwithstanding this evidence, the husband conceded that he continued with his studies for approximately four years.
41I accept that there were times when the husband's study commitments created friction between the parties. I also accept that were times when the wife was not as supportive of the husband's efforts to "improve his skill set" (to use the husband's expression) as her affidavit evidence would suggest. Overall, however, I am satisfied that the wife cooperated with the husband's arrangements while he was studying as best she could and that the husband's evidence regarding her being a hindrance was exaggerated. Further, I am satisfied that the husband's study commitments placed an additional burden on the wife because there were times when he was not available to contribute to household and parenting tasks. That burden was exacerbated by the fact that the wife suffered from depression. Having seen and heard the husband give evidence and having read his affidavit material, and bearing in mind the various findings I have made elsewhere in these Reasons regarding the husband's credibility and attitude to the wife, I have little doubt that he was often (but perhaps not always) unsympathetic towards and unsupportive of the wife as she endeavoured to promote what she perceived to be the family's interests and, at the same time, deal with her depression.
42The husband completed his Diploma of Building and Construction in 2009 and was registered as a Builder in 2010.
Property C
43As indicated above, the wife owned the Property C at the commencement of cohabitation. It was encumbered by a mortgage in respect of which approximately $96,000 was owing.
44It appears that the parties never lived in Property C. It was eventually sold in September 2005. The net proceeds of sale were approximately $104,000.
45According to the husband, the wife collected rent from Property C after the parties commenced cohabitation at Property B. She used the rental income from Property C to meet the repayments in respect of the mortgage encumbering the property.
Property D
46The husband purchased Property D in late 1993. The purchase price was $105,000. The husband added a double carport to the front of the house and built a granny flat at the rear of the property for his sister to live in. He did further improvements to the property to facilitate the construction of a carport for the use of the granny flat.
47Property D was retained throughout the parties' relationship. It was used as a rental property. According to the husband, he had planning approval to develop the site into two townhouses. It was anticipated that the house on the property would be demolished.
48After separation, the husband resolved to refurbish Property D, so that he could live there. The refurbishment was completed in December 2011. It involved significant work. For example, the kitchen, bathroom and laundry were refurbished, internal doors were replaced, walls were removed to create an open plan area (requiring the installation of structural supporting beams) and the house was repainted inside and out. New reticulation was installed. Instant lawn was placed in the front and back yards. New whitegoods and other electrical appliances were also acquired and installed. Other work was done as well.
49The husband did not deal with the costs of the refurbishment in his affidavit material. He said in evidence that the total costs associated with the works amounted to something between $30,000 or $50-$60,000. He also said that he did some of the work and that contractors did the rest.
Husband obtains paid employment
50In or about 1994, and seemingly because he had lost his driver's licence, the husband obtained paid employment with [Company F Maintenance] in [Queensland]. To use Ms Low's description once again, S & E Pty Ltd and the Trust became "dormant" while the husband worked with Company F. He was employed by Company F for approximately four or five years. According to the husband, his work conditions during this period were "difficult and detrimental to (his) health": see HA1, para 20.
51According to the husband, he "worked long hours in difficult and dangerous situations, and spent years in isolated areas working on remote sites", which resulted in him "developing resilience and teaching him to survive". He said that he "would get on with (his) job and put (his) grievances with any other team member aside": see HA1 at [27] and [28]. Having seen and heard the husband during the course of the trial, however, I do not accept that he has "developed resilience" and learned to put grievances aside. At the commencement of his evidence, he tried hard to give the impression of being an affable, easy-going man. That facade soon dropped as he gave evidence about certain parenting issues (including an incident during which he physically restrained Child A in an attempt to force him to go to sleep), and when he later spoke very forcefully of S & B Pty Ltd being "under siege" and "his" assets being "raped" by the wife. At those times he presented as an aggressive and unreasonable man, and the effect of his evidence was unnerving. Far from putting grievances aside, it seemed that he had allowed his rancour and resentment towards the wife to consume him, and to distort his perception of their respective roles during and after their relationship.
52During his closing address, Mr Childs endeavoured to excuse the husband's harshness and hostility towards the wife by suggesting that he was simply "a frustrated litigant". Again, I do not agree. In my opinion, the husband's antipathy to the wife runs deep, and seems to be accompanied by a degree of churlishness. To a large extent, the husband's frustration with the litigation process amounts to a self-inflicted wound. As will be apparent from my discussion of Ms Low's evidence set out below, he was unwilling to cooperate fully with her in that he failed to cause his accountants to provide her with all necessary information. Further, he seemed incapable of putting the parties' property dispute into perspective, and of giving the wife credit where it was due. In my opinion, and as I have commented elsewhere in these Reasons, one of the sources of the husband's frustration with the wife and the litigation process appears to be her refusal to accept the husband's idiosyncratic assessment of her financial entitlements, and to settle on his terms.
53It is apparent that the husband continued to work in paid employment for approximately four years after he ceased working for Company F. He worked offshore, in engineering. At the commencement of the parties' relationship, and as I have said, he was a non-resident of Australia residing overseas (and only returning to Australia for between four and eight weeks each year).
54Again, it follows from the above that the Trust and S & E Pty Ltd were "dormant", or largely inactive, for a total period of approximately nine years prior to the commencement of the parties' cohabitation.
Property B
55At the commencement of cohabitation, the parties lived in Property B. They renovated Property B over a period of approximately three months in the first half of 2005 (when the wife was pregnant with Child A).
56The wife assisted the husband with the renovations to Property B, including by doing some manual work. When all is said and done, however, her direct contributions to the project were minor in comparison with those of the husband.
57As was the case with his evidence in relation to other renovations and developments, the husband sought to minimise the wife's input and maximise his own. I note, however, that he said in HA1 at [99]:
[The wife] did not complete any "hands on" work on the property. She was heavily pregnant at the time and I simply would not hear of her doing anything too physical. I recall suggesting that [the wife] engage a housecleaner to attend to tasks around the home is I didn't want her to be completing physical tasks at that time, especially as the house became quite dusty with the renovations.
58In the light of comments such as the above (included, it would seem, to bolster the husband's argument that he was the driving force behind all building and construction work and the sole – or by far the greater – contributor to that form of work), the husband's lack of insight is staggering. On the one hand, he would have the Court believe that the wife did little; on the other, he adopts the patronising – or perhaps bullying – attitude inherent within the assertion that he would not have allowed her to contribute even if she had wished to do so. Suffice it to say that, although I regard the wife as having exaggerated her input into this area of the parties' endeavours, I am satisfied that her evidence is far closer to the mark, and considerably more balanced, than the husband's evidence on the subject. Although I shall try not to repeat them unnecessarily, these findings adhere to all the evidence presented by the husband in relation to building, renovation or development work undertaken during the parties' relationship.
59The husband had purchased Property B in 1995, together with his sister. In 1999, he purchased his sister's one half share for $100,000. Thereafter, he lived in the property when he was in Perth.
60After the family relocated to Property A, Property B and its attached granny flat were leased for a total of approximately $560 per week. The lease arrangements continued until mid-2012, well after the parties separated.
61In August or September 2012, some eight months after he had moved out of Property A and the wife had moved in to that property with the boys, the husband (who had been living in Property D) commenced renovating and developing Property B. As was the case with Property D, substantial work was done. For example, a second-storey extension with two bedrooms, one bathroom and a living area was added, the living area on the ground floor was expanded and maintenance and repairs were carried out to other parts of the property. The husband said that the works included the establishment of a new home office for what he described as "my business": see HA1 at [197].
62Again, the husband did not deal with the costs of the renovations to Property B in his affidavit material. In evidence, however, he said that the cost of the work was approximately $120,000. He said that he did some of the work and that contractors did the rest. He also said that the work "went over budget".
63Clearly, the work done on Property B was far more extensive (and expensive) than the work done on Property D.
64The husband commenced living in the redeveloped Property B in January 2013. He now lives there with Ms K and J. S & E Pty Ltd and S & B Pty Ltd are conducted from that address.
Property E
65The Trust purchased a property at [Suburb C], later to become known as [B Street, Suburb C] in 1998. This is the property to which I have referred as "[Property E]". It was acquired for development purposes. For various reasons, the development did not proceed as planned and the existing premises were leased to commercial tenants (who remained in the property for approximately 10 years from 2002).
66Property E is still owned by the Trust.
Property A
67In November 2003, the husband purchased Property A. The purchase price was $330,000. In or about 2006, he arranged for the installation of new kitchen cabinets in a granny flat attached to the main house on Property A. Other comparatively minor work was done to the property in that year.
68Approximately 12 months later, however, the house and granny flat were demolished to enable the construction of a new home for the family. Regrettably, the husband could not resist the temptation to correct the wife's early evidence regarding the existence or otherwise of the granny flat at the time of the purchase of Property A. Nor could he resist the temptation to list the work he had arranged and his brother had carried out for the purpose of improving the quality of the accommodation in the granny flat. Such evidence is irrelevant, of course, because all improvements on the property were soon demolished. The raising of such issues says far more about the husband and his determination to disparage the wife and diminish the significance of her contributions than it says about the merits of the wife's case.
Property F
69In September 2004, the parties purchased a property [in Suburb P] ("[Property F]"). They borrowed the entirety the purchase price, amounting to approximately $350,000, together with stamp duty of approximately $15,000. The borrowing was secured against the property itself, and against one or more of the other properties.
70The parties subdivided the Property F block, renovated the house on the front lot and constructed a new residence on the rear lot. The two homes were eventually sold (in late 2005 and August 2009 respectively) for a total of over $1 million. It is unclear from WA1 how much profit the parties made from the exercise. The costs of acquiring Property F, subdividing the block, renovating the original home and constructing the second home were well in excess of $750,000.
71Between August 2004 and July 2007, the wife drew down a total of $50,000 from the loan secured by the mortgage over Property C. The moneys helped fund the Property F development. She also contributed approximately $11,000 in cash to the development.
72According to the husband, the wife contributed $30,000 towards the renovation and subdivision costs. In my opinion, nothing turns on the precise amount of the wife's financial contribution.
73The wife assisted the husband with the development of Property F, including by doing some manual work. As was the case with the earlier Property B renovations, the wife's direct contributions to the project were minor in comparison with those of the husband. Having said that, I am also satisfied that the husband has minimised the wife's contributions to the acquisition, conservation and improvement of Property F and exaggerated his own contributions in that regard. Indeed, the husband asserted that the wife did almost nothing in relation to the development of Property F and that she was "preoccupied with the child". It is clear, however, that the husband had greater knowledge and more experience than the wife in the theory and practice of building and development, and that he had a significant number of "contacts" in the building industry who were able to assist him in carrying out some of the tasks associated with the renovation or redevelopment.
74I shall deal with the parties' contributions (in all their various guises) later in these Reasons. In my opinion, however, this aspect of the husband's case was misconceived. From the commencement of cohabitation, both parties worked hard to ensure that the enterprises upon which they embarked would be successful and of benefit to the family. Their roles were not identical, but they may have overlapped from time to time. As an integral part of the role that he undertook in relation to the various developments or enterprises, the husband was obliged to use the skills he possessed for the benefit of the family. As an integral part of the role that she undertook in relation to those developments or enterprises, the wife was obliged to use the skills she possessed (including her knowledge and experience as primary homemaker and caregiver for the children) for the benefit of the family. To suggest that the husband obtained goods or services from contacts or acquaintances (at, perhaps, a discounted price) or that he used skills he possessed in the building industry cannot support a submission to the effect that he has made some form of special or extraordinary contribution in the circumstances – any more than a parent who is, say, a medical practitioner, can be regarded as having made some form of special or extraordinary contribution to the welfare of his or her children because he or she had the knowledge and skills necessary to diagnose and treat childhood illnesses. The contribution of a party's knowledge and skills to the family and its endeavours to improve its financial well-being and promote the welfare of children is a necessary concomitant of a marriage or marriage-like relationship; it is, if you like a "given".
Property G
75In August 2005, the parties purchased a unit in [Suburb O] ("[Property G]"). The purchase price was approximately $380,000. The net proceeds of sale of Property C (amounting to approximately $104,000) were applied to the purchase of Property G. The balance was borrowed, although the husband suggests that he contributed $47,000 of his "personal funds" to the project. What he means by that expression is unclear.
76Property G was sold in April 2008 for approximately $765,000. After discharging the borrowings secured against it (totalling some $250,000) and meeting the other costs of sale, the parties received just under $500,000.
77There was some dispute as to the manner in which the proceeds of sale of Property G were applied. The wife suggested that the husband had purchased an expensive motor vehicle and boat for himself. The husband denied the wife's suggestion in this regard and said that the vehicle was purchased by S & E Pty Ltd from other sources and that the boat had been purchased before the parties commenced cohabitation. These issues were not explored at trial; nor were they alluded to during closing addresses. Either way, they have no bearing on the outcome of the competing property settlement applications.
Property H
78In November 2006, the parties purchased a one half interest in a property in [Coastal Town A] ("[Property H]"). The other half interest was purchased by the husband's mother. The parties paid approximately $225,000 in respect of their half interest – all of which was borrowed.
79The parties made some improvements to Property H after its acquisition. For example, they installed reticulation and improved the garden. They also installed paving and painted the inside and outside of the house.
80According to the husband, Property H was rented out as holiday accommodation and was managed by [Coastal Town A Accommodation Services] for a few years after its purchase. The rental income was spent on improvements (which were carried out by contractors, but managed by the husband).
81The parties also made other improvements to Property H, the details of which are unimportant. These improvements were paid for from moneys inherited by the husband from his grandmother. According to the husband, the inheritance amounted to $17,500.
82The wife said, and I accept, that the parties worked together on the improvements to Property H. They later employed contractors to complete the improvements. I am satisfied, however, that the husband's direct contributions to the project were significantly greater than those of the wife.
Family relocates to Property A
83As indicated above, Property A is the former matrimonial home. The wife currently lives in it, with the boys.
84In late 2007, the parties (who were then living in Property B) demolished the existing structure at Property A in order to construct a family home. The cost of constructing the new house was approximately $600,000. In order to fund the project, the parties used part of the net proceeds of sale of Property G (amounting to some $500,000) and borrowings.
85The wife assisted the husband with the project, including by doing some manual work. As was the case with the parties' other development projects, however, the wife's direct contributions to the project were minor in comparison with those of the husband.
86While the new home was being constructed, the wife won certain window treatments (shutters) to the value of $20,000. The shutters were installed in Property A.
87The parties commenced living in Property A in March 2009. The construction process occupied approximately 18 months.
88The wife's case is that Property A comprises very suitable accommodation for herself and the boys. It is close to their school, and to the school where she works.
Family violence and Child A’s behavioural issues
89As indicated above, the wife said that she was subjected to family violence during the parties' relationship. Incidents occurred on a number of occasions, including in September 2007 and at the date of separation. The wife describes the incidents in WA1. The husband deals with the subject in a number of places, including in HA1 at [352] to [438].
90In my opinion, and taking into account the findings I have made elsewhere in these Reasons regarding the husband's credibility and his attitude to the wife and the current litigation generally, the husband's overly detailed and extravagantly defensive responses to the wife's allegations do not ring true. I am satisfied that this aspect of the husband's evidence reflects his broader philosophy regarding the conduct of the proceedings – namely, and to use the old aphorism, that the best form of defence is offence. Still, I am cognisant that neither party was cross-examined (or cross-examined to any significant extent) regarding the family violence allegations.
91The incident in September 2007 led to the parties separating for a short period.
92Not long after the parties resumed cohabitation in November 2007, the husband lost his temper and assaulted the wife's father.
93The wife's father, Mr W, refers to the assault in his affidavit sworn 16 October 2013. He also deposes to the husband approaching him after the assault and saying words to the effect of: "I'm sorry. I'd probably also be upset if someone treated my children the way I've been treating [the wife]". Mr W was not cross-examined about his evidence in relation to the assault, and I have no reason to reject it.
94From time to time, the husband was also short tempered and physically rough with Child A. It is clear from the wife's evidence, however, that Child A is not an easy child. She said his behaviour has been "challenging" since he was in kindergarten. The parties found it necessary to discuss Child A’s behaviour (particularly his aggression towards other children) with his teachers – and, on at least one occasion, with the school psychologist. Child A has been identified as a Student at Educational Risk and has been placed in an appropriate program for such students.
95The husband was cross-examined about an incident in July 2012 (well after the date of separation) during which he "restrained" Child A for approximately 15 minutes. The incident (and other incidents involving the husband's behaviour towards Child A) formed the subject of correspondence between the parties' solicitors in May 2013: see WA1, Annexure 3 (pp 29 to 32 of WA1). The husband said that Child A had wanted to go roller skating and had started throwing a tantrum, whereupon the husband said "[Child A], you're tired", picked him up and took him to a bedroom in which there was a double bed. The husband then told him to "lie down with Dad" and have a rest. Child A was "screaming and crying" when he entered the bedroom and steadfastly resisted the husband's attempts to force him to lie down, as a result of which the husband held him down (on the bed) for some 15 minutes. As the husband put it: "[Child A] did not want to lie down; he wanted to get up". The husband said that he had used this method of "calming the boys down" in the past, because they often do not know when they are overtired.
96The husband was cross-examined about a further incident which occurred either when he took the boys to [New South Wales] in February 2013 or a little later (perhaps in May 2013) on an evening after the boys had attended school. He said that the incident was "so insignificant that he barely remembered it". He was wrestling with the boys in the lounge room. At one stage he "had his legs over [Child A]". A couch pillow was involved. The husband accepted that Child A had a very different recollection of the event.
97In his solicitors' letter to the wife's solicitors of 28 May 2013 (see WA1 at p 29), the incident was described as follows:
Recently our client was play fighting with both [Child A] and [Child B] and [Child A] said "Stop Dad I can't breathe". At this time our client was wrestling with [Child B] and was lying on his back on the ground, with his legs over both [Child A] and a couch pillow. [The husband] immediately stopped the game and ensured that [Child A] was both safe and comfortable.
98It is unnecessary, and probably unhelpful, for me to make findings regarding these incidents – given that parenting issues have been resolved. Indeed, they were resolved largely by consent. Suffice it to say, however, that I am satisfied that the wife was entitled to have concerns regarding the husband's relationship with Child A and the appropriateness of some of his behaviour towards him. My satisfaction in this regard is reinforced when consideration is given to the incident which occurred at the date of separation (see below).
Separation
99The parties separated in May 2011, following an ugly incident. In HA1, the husband concedes that he and the wife shouted at each other after he had attempted – ineffectually and, in my opinion, in an unduly heavy-handed manner – to discipline Child A during a trip back from Coastal Town A. Child A was six years old at the time. The wife was clearly of the view that the husband had lost his temper and that his behaviour towards Child A was wholly inappropriate. According to the husband, the parties spat at each other while arguing. Further, the husband called the wife a "filthy, hillbilly hick".
100Not surprisingly (even accepting the husband's version of events), the wife took the children and left the former matrimonial home. After staying with friends, she and the children relocated to her parents' home.
101The wife and children moved back into the former matrimonial home in January 2012, after the husband vacated it. The husband lived in Property D, and then in Property B.
102After separation, the wife continued working on a part-time basis. In September 2012, she consulted a medical practitioner in relation to stress and depression resulting from being subjected to bullying and abuse at the school where she had been teaching for the last nine years. It appears that, with a change of Principal at the school, the wife observed a difference in the manner in which senior staff conducted themselves towards the wife and other teachers. The wife complained about the relevant behaviour (which she characterised as bullying) and appealed to the Public Sector Commission. Changes at the school followed, as a result of which the behaviour which had caused the wife discomfort improved significantly: see exhibit H1. Save for the fact that the wife took some time off work because of these events and their effect on her, this evidence is of little relevance to the broader issues in the proceedings.
S & B Pty Ltd
103As indicated above, the husband commenced trading through S & B Pty Ltd in February 2012. According to the husband, he did so because he had decided to operate as a Registered Builder. He said in HA1 at [188]:
In early 2012, I decided to operate as a Registered Builder. Initially I intended to do this through [S & E Pty Ltd] but was unable to do so as the building commission would not allow [S & E Pty Ltd] to be registered as a building company, as it operates through a unit trust.
104S & B Pty Ltd earned substantial income in the financial years 2012 and 2013. The husband said that he obtained the contracts through which S & B Pty Ltd was able to earn that level of income "really as a matter of being in the right place at the right time as a Registered Builder" and that he "also had the support of [XYZ Engineering] as the project managers to front the head contract negotiations and legalities": see HA1 at [193]. He also spoke of working 19 hour days "when not caring for the boys" and suggested at [194] that –
… my ability to do this was fuelled by my frustration at [the wife's] antics post separation and her attempts to isolate me from the children.
105Regrettably, the husband's comments in this regard comprise a further example of his unwarranted resentment of and antipathy towards the wife. As I have indicated, parenting issues were ultimately resolved by consent.
106I am satisfied that the establishment of S & B Pty Ltd was far from the benign development described by the husband in HA1. He did not draw the wife's attention to the new entity until months after it was established. As the wife deposed in WA1, it was first mentioned, without explanation, in negotiations between the parties in July 2012. It was not until October 2012 that the wife and her advisers realised that S & B Pty Ltd was a new entity (given that its name was very similar to S & E Pty Ltd). Further, the husband did not make full disclosure of financial information relating to S & B Pty Ltd, even after the wife's solicitors specifically requested certain documents as late as April 2013. The wife eventually issued subpoenas to obtain the relevant information.
107The husband was cross-examined about the establishment of S & B Pty Ltd. Among other things, he suggested that one of the purposes for establishing the new entity was "to mitigate risk" – but he was otherwise effectively unable to explain lucidly what he meant by that expression. He was questioned about S & B Pty Ltd's reissue of invoices that had originally been directed to S & E Pty Ltd. His attempted explanation for the reissue of the invoices was incomprehensible: the husband did little more than refer to the fact that it "took time" to establish S & B Pty Ltd and that there was an "overlap" between the two companies.
108The facts of the matter are that a conciliation conference was held on 11 May 2012 and that discussions or negotiations took place between the parties over the next couple of months. Eventually, and after an "in principle" agreement had been reached to settle the property proceedings on a final basis, the husband's solicitors forwarded a draft Minute of Consent Orders to the wife's solicitors for their consideration. The Minute was sent under cover of a letter from the husband's solicitors dated 25 July 2012: see exhibit H6. The Minute and the letter comprise the first time the husband or his legal advisers advised the wife or her legal advisers of the existence of S & B Pty Ltd. During cross-examination, the husband conceded that at the time of the conciliation conference, or alternatively at the time his solicitors corresponded with the wife's solicitors on 23 May 2012, S & B Pty Ltd had already issued invoices and was expecting something in the order of $2.2 million to be paid to it in respect of work done. He also conceded that no mention of either S & B Pty Ltd or the very substantial moneys due to be paid to it was made at that time. I am satisfied that the non-disclosure was deliberate and egregious. Far from being an oversight on the part of the husband, I find that it comprised an ill-conceived attempt on his part to conceal his income (or income to which he was directly or indirectly entitled) from the wife and her advisers. I find, as well, that the establishment of S & B Pty Ltd was a further manifestation of the husband's attitude towards the wife and the validity of her entitlement to a just and equitable property settlement – which attitude I have described elsewhere in these Reasons.
Ms K
109The husband and Ms K met in November 2011 and commenced a relationship a short time later. They moved in together [in] February 2013 and became engaged in May 2013. As I have said, they have a son, J, born [in] 2013. As might be expected, Ms K had positive things to say about the husband in her affidavit – most of which focused on the husband's relationship with and parenting of Child A and Child B. Having said that, the affidavit contained a large amount of unnecessary detail, unhelpful comments and impermissible opinion evidence. It was a much longer document than was necessary, even if parenting issues were to be litigated.
110I have commented later in these Reasons on the onus that rests on legal practitioners to ensure that parenting cases focus on the criteria set out in the Act, and to guard against being used as "mouthpieces" for clients who, to use a colloquialism, have their own barrow to push. Ms K's affidavit is an example of a document that should not have been filed in its current form.
111Ms K said that she proposed to cease work on 27 June 2013 and, after the birth of J, adopt the primary role of homemaker and parent. Like the wife, she indicated that she is in no hurry to return to work and that she proposes to give priority to her role as a parent. Beyond that, Ms K says nothing about her financial circumstances.
Litigation in this Court
112The wife filed an initiating application on 26 September 2011. She sought orders relating to financial issues. Relevantly, she sought to retain Property A as part of a 60%/40% division of the parties' property in her favour. She also sought an order for periodic spousal maintenance.
113The husband filed a response to the initiating application on 24 October 2011. He also sought orders relating to financial issues but, in addition, he sought various parenting orders. Given that final parenting orders have been made by consent, I need not dwell on the parenting orders sought by the husband in his response. In relation to financial issues, however, he sought an 80%/20% division of the parties' property in his favour.
114The wife filed a reply to the husband's response on 11 November 2011. The reply related to parenting issues only. As indicated above, the parenting dispute settled in November 2013.
115There is little point in retracing the procedural history of the litigation in this Court. Both parties are fully aware of it.
Child support issues
116There has been a protracted dispute between the parties regarding child support issues. Part of the history of the dispute is recorded in the decision of the Social Security Appeals Tribunal ("SSAT") dated 13 December 2013 (see exhibit W11), and I do not propose to reproduce that history in these Reasons. It is relevant, however, that the husband demonstrated that he could be just as angry and resentful about child support as he had shown himself to be about the wife's approach to parenting issues and her claimed entitlements to alteration of property interests. For example, he had an acrimonious exchange with an officer of the Child Support Agency during a telephone conversation with her on 19 August 2013: see exhibit W10. During the conversation, he spoke of the officer's decision to disallow his objection as being "criminal", protested that he was not "just a slave" and threatened that he would "fight the (Agency) for the next 10 years". In cross-examination, the husband endeavoured to excuse his behaviour by saying that he was upset and frustrated. Perhaps he was, but the husband's inability to control his temper on this occasion is wholly consistent with his barely contained animosity towards and unwarranted annoyance with the wife that has suffused his approach to these proceedings generally.
117Pursuant to an administrative assessment relating to the period from 21 February 2013 to 20 May 2014, the husband was required to pay child support for the boys at an annual rate of just over $7000. The assessment was based on an adjusted taxable income of just over $66,000 for the husband and an adjusted taxable income of approximately $23,500 for the wife. Both figures related to the 2012 financial year. The assessment also took into account a "care percentage" for the children of 38% for the husband and 62% for the wife.
118This assessment was challenged and the subsequent departure determination objected to. The objection was disallowed, resulting in an application for review being lodged by the husband on 29 August 2013.
119Exhibit W11 reveals that the SSAT was satisfied that the husband's adjusted taxable income for the 2012 financial year was $585,358. This appears to comprise the total net profit of S & B Pty Ltd (amounting to $470,637), together with the husband's income from the Trust (amounting to $114,721). In his 2012 tax return, the husband had claimed a net rental property loss of $48,572 against his income from the Trust – but the SSAT disallowed this deduction.
120When considering the husband's income for the 2013 financial year, the SSAT was not satisfied that he had made adequate disclosure of his financial circumstances. It was not prepared to guess at what the husband's true income may have been for that year and therefore elected to rely on "the last income figure readily attainable", being the adjusted taxable income of $585,358: see exhibit W11 at [37].
121In relation to the wife's income, the SSAT relied upon her 2013 tax return. It concluded that her adjusted taxable income for 2013 was $32,926.
122The SSAT had little difficulty concluding that a ground existed to depart from the administrative assessment. It also concluded that the costs of maintaining the children were in the vicinity of $31,900 per year. It was not prepared to alter the "care percentage" contained in the original assessment.
123Ultimately, the SSAT concluded that application of an adjusted taxable income of $585,358 for the husband and $32,926 for the wife to the child support formula resulted in a liability for the husband of $21,396 per annum (or $421 per week). It found that an increase in the husband's child support liability from the assessed amount of $7088 per annum (being the equivalent of approximately $136 per week) to the higher figure was unlikely to cause hardship for either party.
124The SSAT's decision was in the following terms (see exhibit W11 at [63]):
On the basis of the evidence and material before it, and the Tribunal's findings, the Tribunal has decided to vary the decision so that there is a departure determination in the following terms:
1)For the period 21 February 2013 to 31 December 2013, the wife's adjusted taxable income is set at $32,926; and
2)For the period 21 February 2013 to 20 February 2016, the husband's adjusted taxable income is set at 585,358.
Orders in relation to parenting issues
125On 1 November 2013, the following orders were made. Except where indicated, they were made by consent.
1)The parents have equal shared parental responsibility for [Child A] and [Child B].
2)The boys live with the wife.
3)The boys spend time with the husband as follows:
(a)after school Thursday until before school on Friday weekly;
(b)after school Friday until before school on Monday fortnightly;
(c)during each inter-term holiday period on the basis that:
(i)the term-time residence arrangements provided for at paragraphs 3(a) and (b) above be suspended;
(ii)if the husband's time with the boys is to be spent over the first week of each such holiday period having regard to the order of his alternate weekend contact, then from Friday at 3:00 pm to the following Saturday at 5:00 pm; and
(iii)if the husband's time with the boys is to be spent over the second week of each such holiday period having regard to the order of his alternate contact, then from Saturday at 5:00 pm until Sunday at 5:00 pm;
(d)from 12 noon on Christmas Eve until 12 noon on Christmas Day in each odd year (commencing 2013), and from 12 noon Christmas Day until 12 noon Boxing Day in each even year (commencing 2014);
(e)from 12 noon on 26 December 2013 until 12 noon on Friday, 27 December 2013;
(i)during the summer school holidays as follows:
(ii)in 2013/2014, on a week about basis commencing 20 December 2013 at 9:00am (with the first week to conclude at 12:00 pm on 25 December 2013), on the basis that the first week shall be spent with the husband and thereafter on an alternating basis until 5:00 pm on the day immediately prior to the first day of school;
(iii)in 2014/2015 and in each alternate year thereafter, for the first half of the holiday period commencing 9:00am on the day following the conclusion of Term 4 and concluding at 5:00 pm on the final day of the first half of that period; and
(f)in 2015/2016 and in each alternate year thereafter, for the second half of the holiday period with such time to commence at 9:00am on that day and conclude at 5:00 pm on the day immediately prior to the first day of school;
(g)on Father's Day from 5:00 pm the day before Father's Day until 5:00 pm on Father's Day, provided that the husband's time with the boys be suspended and the boys be returned to the wife's care on the same basis on Mother's Day;
(h)on the husband's birthday for 3 hours, provided that his time with the boys be suspended and the boys be returned to the wife's care on the same basis on the wife's birthday; and
(i)for 3 hours with both boys on each of their birthdays provided that the husband's time with the boys be suspended and the boys be returned to the wife's care on the same basis when a child's birthday falls on a period the boys are in the husband's care.
4)The boys' time with the parties over any holiday period be subject to the party with whom the boys are to spend time being on leave and personally available to supervise the boys, failing which – and in the event that either party cannot care for the boys for a period of more than two days – the boys shall remain in or be returned to the care of the other party.
5)(Not by consent) The boys have liberal uninterrupted telephone communication with each parent while in the other parent's care, and each parent must initiate the boys' telephone contact –
(a)at 7:00 pm each Sunday; and
(b)not less than once every 3 days during holiday periods.
6)The parents must each set up internet video chat facilities and encourage the use of those facilities for the boys' communication with the other parent.
7)Both parties be restrained and an injunction is hereby granted restraining them from:
(a)physical punishment, including physical restraint of either of the boys;
(b)abusing alcohol to excess while the boys are in their care; and
(c)(Not by consent) eavesdropping and/or recording any telephone conversation between a child and the other parent.
8)(Not by consent) The parties be and are hereby restrained by injunction from:
(a)abusing, insulting, belittling, rebuking or otherwise denigrating the wife and/or her family or the husband and/or his family; and
(b)discussing these proceedings,
to, with or in the presence or hearing of the boys (or either of them), and from permitting any other person to do so.
9)The husband collect the boys at the commencement of each contact period and the wife collect the boys at the conclusion.
10)Each parent keep the other informed of his/her current residential address and telephone numbers within seven days of any change.
286In any event, I propose to (metaphorically) step back and consider whether the outcome achieved by my consideration of the parties' contributions and the s 75(2) factors has brought about a just and equitable result.
287The Full Court has cautioned against assessing the s 75(2) factors in percentage terms, without considering the real impact of any proposed adjustment. In other words, the real impact in money terms is "the critical issue": see Clauson & Clauson (supra).
288If the wife is entitled to 45% of the property, then she is entitled to property to the value of $1,913,370 (being 45% of $4,251,933). The net value of the property currently in her possession or under her control (including her superannuation and the amount already paid in respect of legal fees, and including Property A) is $1,357,269. This figure comprises the total of items 1, 5, 11, 13, 16, 18, 21, 22 and 23 in the property schedule. It follows that if the wife is to retain those items, then the husband must pay to her $556,101 (being the "shortfall" between $1,913,370 and $1,357,269).
289In the present case, the s 75(2) adjustment equates to $318,895 (being 7.5% of $4,251,933). I am satisfied that such an adjustment is proper – even taking into account that it creates a "differential", as it were, of 15%, or approximately $637,790. This figure is, after all, not substantially more than the gross amount earned by the husband through the entities under his control in 2012 alone. Indeed, I am also satisfied that the adjustment is proper when regard is had to the difference between the wife's overall entitlement (being 45%) and the husband's overall entitlement (being 55%), which difference equates to 10% of the property (or $425,193) in the husband's favour. Such a result is just and equitable.
290I am very conscious that justice and equity must be done to both parties, and I am satisfied that the split that I have proposed achieves that result.
291Thus, and in summary, the wife will receive property to the value of $1,913,370 (being 45% of $4,251,933) and the husband will receive property to the value of $2,338,563 (being 55% of $4,251,933). In other words, he will retain items 2, 3, 4, 6, 7, 8, 9, 10, 12, 14, 15, 17, 19 and 20 in the property schedule. He will also retain the benefit of the assets and liabilities of S & E Pty Ltd (as trustee of the Trust) and S & B Pty Ltd. As indicated above, he will be obliged to pay $556,101 to the wife (which I shall round down to $556,100). He will also be obliged to transfer Property A to her, free of encumbrances.
Spousal Maintenance
292The right of a spouse to maintenance is dealt with in s 72 of the Act, the relevant subsection of which is as follows:
Right of spouse to maintenance
1)A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c)for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
293I have referred to the provisions of s 75(2) elsewhere in these Reasons. The provisions serve two masters, as it were: they are relevant to the property settlement "exercise" and to the issue of spousal maintenance.
294Section 74 of the Act provides, among other things, that, in spousal maintenance proceedings, "the court may make such order as it considers proper for the provision of [spousal maintenance]".
295The distinction between property settlement and spousal maintenance orders was described in Anast & Anastopolous (1982) FLC 91-201. Relevantly, the Full Court distinguished a party’s entitlement to a property settlement based on contributions and the general factors arising under s 75(2) on the one hand, and a party’s entitlement to be maintained within the meaning of s 72 on the other. It held that an entitlement to an order under s 79 (including the s 75(2) factors) should be assessed before the question of entitlement to maintenance within the meaning of s 72 is considered. In some cases, a party’s property settlement entitlement under s 79 will “exhaust” that party’s claim for spousal maintenance. In other cases, a maintenance entitlement under s 72 will remain, even after property entitlements under s 79 have been determined.
296In Clauson & Clauson (supra), the Full Court was at pains to clarify the distinction between a claim for spousal maintenance (properly so called) and the s 75(2) factors. After describing the general approach which should be adopted in property settlement applications, the Full Court said at 81,907:
The result of the s 79 order may be such that the applicant for maintenance can no longer be described as being “unable to support himself or herself adequately” because he or she may have sufficient assets which, with or without income arising from the investment or use of those assets, will provide an adequate level of support. It also defines the other party’s capacity to meet any order.
297The Court has broad powers in considering what may be a proper or appropriate order for spousal maintenance. Although periodic maintenance is the most common form of spousal maintenance, s 80 makes it clear that, in exercising the powers under Pt VIII of the Act, an order may take a variety of forms. It follows that the Court may make an order for periodic spousal maintenance, lump sum spousal maintenance, or a combination of both. In making such an order, it is to be borne in mind that maintenance is not confined to a subsistence level of support, but is intended to provide such assistance as is reasonable in the circumstances of the particular case: see Mitchell & Mitchell (1995) FLC 92-601.
298In Vautin & Vautin (1998) FLC 92-827, the Full Court said:
…in the exercise of the power to order lump sum maintenance caution is usually appropriate because of the apparent finality of lump sum orders and the difficulties in making predictions into the future. However, it is a power, the exercise of which may be appropriate in particular cases. It may be ordered, amongst other reasons, to meet non-periodic expenditure for the maintenance of that person where there is an established need and a capacity to pay. It is not confined to cases of the capitalisation of periodic maintenance and/or where periodic maintenance is unlikely to be paid because of concerns about the capacity or willingness of the liable parent to pay…
299In Bevan & Bevan (1995) FLC 92-600, the Full Court stated that an award of spousal maintenance requires:
(a)a threshold finding under s 72;
(b)a consideration of ss 74 and 75(2);
(c)no fettering principle that pre-separation standard of living must automatically be awarded where the respondent’s means permit; and
(d)discretion exercised in accordance with the provisions of s 74, with “reasonableness in the circumstances” as the guiding principle.
300In Line & Line (1997) FLC 92-729, the Full Court said at [4.87]:
[It was] submitted that the wife should not necessarily be forced to draw upon her property settlement moneys to provide for her support.… In relation to that, all we would say is that every case depends upon its own facts, and that whilst a spouse is certainly not obliged to exhaust his or her property entitlement in order to establish a need for maintenance, it does not follow that a spouse in all circumstances is entitled to retain his or her entire property settlement proceeds intact and call upon the other spouse to fully support him or her. Nor is a spouse who receives a lump sum of money by way of property order necessarily entitled to earmark all of those funds for the purchase of a house or some other capital expenditure, and again seek to depend entirely on the other spouse for weekly support in the form of maintenance payments. It is a question of balance and reasonableness in each case, and in many cases it is certainly appropriate, in assessing the needs of the spouse claiming maintenance, to make some allowance on the income side for potential interest earned upon all or part of the capital coming to that spouse from the property orders.…
The wife's claim for spousal maintenance
301The wife's claim for spousal maintenance was not pressed with any degree of vigour. It seems to have been included as a form of fall-back position in the event of the wife not receiving the benefit of the orders that she sought in relation to alteration of property interests. Indeed, the wife's papers for the judge make no mention of it. It is not included as one of the issues set out under the heading Statement of Issues on page 26 of the papers for the judge.
302The subject is not referred to in the husband's papers for the judge either; nor is it included as one of the issues set out under the heading Summary of Issues for Determination on page 2.
303In the wife's amended minute of final orders sought dated 28 October 2013, the following order was sought by way of property settlement and spousal maintenance (although the wife also sought other orders relating to property settlement):
Within 28 days of the publication of these orders to the parties there be the following contemporaneous transactions:
1)The husband do all things and sign all documents necessary to –
(a) transfer to the wife the unencumbered title to [[Property A]];
(b) pay to the wife a sum sufficient to the effect –
(i)an overall equal distribution of the matrimonial property between them with an apportionment of $200,000 as to spousal maintenance for the wife pursuant to s 77A;
or in the alternative,
(ii)pay to the wife within 7 days… A sum so as to effect an overall distribution of the matrimonial property between them so as to settle upon the wife 45% of the same and the husband 55%; and
(iii)the husband do pay to the wife spousal maintenance in the sum of $250 per week, the first payment to be due and payable on the first Friday following the discharge of the liabilities secured over [[Property A]].
304It is apparent that I have concluded that there should be orders in terms of paras 1(a) and 1(b)(ii) set out above. Such orders are to be made pursuant to the Court's powers under s 79. It follows that the s77A claim in para 1(b)(i) falls away and I do not propose to consider it further. Thus, the wife's spousal maintenance claim is that appearing in para 1(b)(iii). In other words, the wife seeks ongoing spousal maintenance at the rate of $250 per week.
305Mr Beckerling provided no real guidance as to how the amount of $250 per week was calculated or why it might be perceived as appropriate in all the circumstances. He did little more than refer the Court to the wife's financial statement sworn 28 October 2013 (being exhibit W1).
Threshold finding
306I accept that the wife prefers not to work in paid employment on a full-time basis while the boys are young. For the reasons discussed above, however, and taking into account the property settlement orders I propose to make, I am not satisfied that she is unable to support herself adequately by reason of having the care and control of the boys, for health reasons or for any other adequate reason. Among other things, the effect of the property settlement orders will be that the wife will retain Property A on an unencumbered basis and receive a payment from the husband of in excess of $550,000. I accept that she has a significant liability to her parents in respect of legal fees, but even if that liability were to be paid immediately, she would still have substantial cash funds available to her for investment. She will not be obliged to pay rent or meet mortgage repayments.
307I am not satisfied that the wife has met the threshold requirements of s 72. Nor am I satisfied that, in all the circumstances, it would be proper for the Court to make an order for either lump sum or periodic maintenance in the wife's favour.
Revisiting the s 75(2) factors
308I do not propose to recapitulate my discussion of the s 75(2) factors. Even assuming that there is a shortfall between –
(a)what might represent a reasonable allowance for the wife's necessary commitments in the light of the property settlement orders that I have indicated are just and equitable; and
(b)the wife's income from all sources (but excluding her income from Government benefits),
I am not persuaded that it would be proper to make an order for spousal maintenance. Nor am I persuaded that it would be proper to make such an order even though I have no doubt that the husband has the capacity to pay any amount up to the $250 per week sought by the wife.
309My view in this regard would likely be very different if I had been persuaded to make the property settlement orders sought by the husband (which, on my calculations, would have excused the husband from having to make any or any significant cash payment to the wife. Indeed, in the husband's minute of orders sought contained in his papers for the judge he proposed that the wife should pay him $150,000.
310Suffice it to say that I am satisfied that the property settlement orders I have indicated are just and equitable have the effect of "exhausting" any entitlement the wife may have to spousal maintenance – particularly when regard is had to the wife's earning capacity.
311I would add that, in my opinion, there is insufficient evidence to enable me to make clear findings regarding what might represent a reasonable allowance for the wife's necessary commitments in the light of the property settlement orders I propose to make. A simple reference to the wife's most recent financial statement during the course of counsel's closing address, coupled with an invitation to the Court to effectively "work it out for itself", is of little assistance.
Conclusion in relation to the spousal maintenance claim
312On the basis that the wife is to receive her full entitlement by way of property settlement, I am not persuaded that the wife has a need for spousal maintenance. Put another way, I am unable to make the threshold finding under s 72 required as the first step before awarding spousal maintenance. It follows that there is no real need for me to consider the other steps required before an award of spousal maintenance can be made (including the husband's capacity to pay). The wife's application for spousal maintenance will be dismissed.
Orders
313I propose to make orders based substantially on the wife's amended minute of orders sought. I shall, however, hear Counsel as to the precise orders necessary to give effect to these Reasons.
314The orders are as follows:
(1)Within 45 days, there be the following contemporaneous transactions:
(a)the husband do all things and sign all documents necessary to:
(i)transfer to the wife the unencumbered title to [Property A]; and
(ii)pay $556,100 to the wife; and
(b)the parties do all things and sign all documents necessary to:
(i)transfer and assign to the husband all of the wife's right, title and interest in [Property H]; and
(ii)effect and procure the wife's release from any and all liability arising in relation to the loan and mortgage security relating to [Property H].
(2)All of the wife's right, title and interest in the following forthwith vest in the husband:
(a)[Property B];
(b)[Property D];
(c)the Trust;
(d)the business and assets of [S & E Pty Ltd];
(e)the business and assets of [S & B Pty Ltd];
(f)all personalty in the husband's possession, including the husband's furniture, personal effects, boats and motorcars;
(g)all funds standing to the husband's credit or the credit of the husband's businesses at banks and other financial institutions; and
(h)the husband's superannuation entitlements.
(3)All of the husband's right, title and interest in the following forthwith vest in the wife:
(a)funds standing to the wife's credit at banks and other financial institutions;
(b)all personalty in the wife's possession including furniture and personal effects; and
(c)the wife's superannuation entitlements.
(4)The husband indemnify the wife and keep her indemnified in relation to any and all liability, costs, claims, expenses or obligations, however described arising in relation to S & E Pty Ltd and S & B Pty Ltd.
(5)The parties indemnify one another and keep one another indemnified in relation to any liability associated with or arising in respect of an asset to which that party is entitled in accordance with these orders.
(6)The parties have liberty to apply in relation to the implementation of these orders.
(7)All extant applications otherwise be dismissed.
I certify that the preceding [314] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court
Associate
4 January 2016
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