Vuksan & Jelasic
[2023] FedCFamC1F 832
•28 September 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Vuksan & Jelasic [2023] FedCFamC1F 832
File number(s): SYC 4056 of 2022 Judgment of: BAUMANN J Date of judgment: 28 September 2023 Catchwords: FAMILY LAW – PROPERTY – Long marriage – Where the parties benefited from interest free loans from family members – Where those family members intervened in these proceedings – Where the husband has had the benefit of a high income for several years – Where the wife was the primary carer of the parties’ three children
FAMILY LAW – CHILD SUPPORT – Where the mother seeks a departure order – Where the father has a significantly higher earning capacity than the mother – Where the children’s lifestyle as engineered by both parents incurs costs which are not able to be sustained by the mother’s income – Where the father concedes he will pay private school fees but opposes a non-periodic child support order
Legislation: Child Support (Assessment) Act 1989 (Cth) ss 117, 125
Family Law Act 1975 (Cth) ss 75, 79, 117, 124
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)
Conveyancing Act 1919 (NSW) s 66G
Cases cited: Best & Best (1993) FLC 92-418
Clauson & Clauson (1995) FLC 92-595
Hickey & Hickey (2003) FLC 93-143
Mallett v Mallett (1984) 156 CLR 605
NHC & RCH (2004) FLC 93-204
Pierce & Pierce (1999) FLC 92-844
Stanford & Stanford [2012] HCA 52
Division: Division 1 First Instance Number of paragraphs: 83 Date of hearing: 21-22 August 2023 Place: Sydney Counsel for the Applicant: Ms Horsley Solicitor for the Applicant: Broun Abrahams Burreket Counsel for the First Respondent: Mr Alexander Solicitor for the First Respondent: IHS Law The Second and Third Respondents: No appearance Counsel for the Fourth Respondent: Ms Power Solicitor for the Fourth Applicant: Matulich Lawyers ORDERS
SYC4056 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS VUKSAN
Applicant
AND: MR JELASIC
First Respondent
MR B JELASIC
Second Respondent
MS D JELASIC (and others named in the Schedule)
Third Respondent
ORDER MADE BY:
BAUMANN J
DATE OF ORDER:
28 SEPTEMBER 2023
THE COURT ORDERS:
1.That pursuant to section 79 of the Family Law Act 1975 (Cth) (“the Act”) by way of final property alteration:
(a)That within fourteen (14) days of the date of these Orders the husband and wife shall do all acts and things necessary to sign all documents and provide all authorities necessary to authorise the distribution of the funds held in the controlled monies account as follows:
(i)$12,215 to the wife by way of contribution to her capital gains tax liability from the sale of the Suburb E home;
(ii)$17,451 to the husband by way of contribution to his capital gains tax liability from the sale of the Suburb E home;
(iii)$966.361 to the wife;
(iv)$327,875 to the husband; and
(v)Any balance remaining in the controlled monies account (representing accrued interest, if any) to be distributed as to 65% to the wife and 35% to the husband.
Wife’s superannuation
2.That in accordance with section 90XT(1)(b) of the Act, whenever a splitable payment becomes payable in respect of the interest of the wife in Superannuation Fund 1 member number … (“the wife’s superannuation fund”), the husband will be entitled to be paid 50% of each splitable payment and there will be a corresponding reduction in the entitlement of the person to whom the splitable payment would have been made but for this Order.
3.That Order 2 of these Orders has effect from the operative time and the operative time for this Order shall be the fourth (4th) business day from the date of service of this Order upon the trustee of the wife’s superannuation fund.
4.That until the happening of any of the following:
(a)The establishment of a separate account in the name of the husband in the wife’s superannuation fund of the payment split created pursuant to this Order;
(b)The transfer or rolling over into another superannuation fund of the payment split created pursuant to this Order for the benefit of the husband;
(c)The husband satisfying a condition or release and being paid the payment split created pursuant to this Order; or
(d)The Husband executing a waiver of rights within the meaning of section 90XZA of the Act regarding the payment split created pursuant to this Order;
the wife be and is restrained from executing a death benefit nomination in favour of any person or doing any other act or thing which would render any part of their interest in the superannuation fund “a non-splitable” payment within the meaning of regulation 12 and/or 13 of the Family Law (Superannuation) Regulations 2001 and the trustee of the superannuation fund will do all acts and things to give effect to this Order.
Husband’s superannuation
5.That in accordance with section 90XT(1)(b) of the Act, whenever a splitable payment becomes payable in respect of the interest of the husband in Superannuation Fund 1 (“the husband’s superannuation fund”), the wife will be entitled to be paid 50% of each splitable payment and there will be a corresponding reduction in the entitlement of the person to whom the splitable payment would have been made but for this Order.
6.That Order 5 of these Orders has effect from the operative time and the operative time for this Order shall be the fourth (4th) business day from the date of service of this Order upon the trustee of the husband’s superannuation fund.
7.That until the happening of any of the following:
(a)The establishment of a separate account in the name of the wife in the husband’s superannuation fund of the payment split created pursuant to this Order;
(b)The transfer or rolling over into another superannuation fund of the payment split created pursuant to this Order for the benefit of the wife;
(c)The wife satisfying a condition or release and being paid the payment split created pursuant to this Order; or
(d)The wife executing a waiver of rights within the meaning of section 90XZA of the Act regarding the payment split created pursuant to this Order;
the husband be and is restrained from executing a death benefit nomination in favour of any person or doing any other act or thing which would render any part of their interest in the superannuation fund “a non-splitable” payment within the meaning of regulation 12 and/or 13 of the Family Law (Superannuation) Regulations 2001 and the trustee of the superannuation fund will do all acts and things to give effect to this Order.
F Pty Ltd
8.That within forty-two (42) days of the date of the making of this Order, the wife shall do all acts and things to sign all documents necessary to:
(a)transfer to the husband the whole of her right title and interest in any shareholding of F Pty Ltd (“the company”); and
(b)give effect to the assignment to the husband of the whole of her right, title and interest in and to any sums due to the wife from the company.
9.That within forty-two (42) days of the date of the making of this Order, the wife shall do all acts and things to sign all documents necessary to:
(a)resign as an Appointer of the trust;
(b)assign to the husband the whole of her right title an interest to any amount owing to the wife by the trust or the trustee;
(c)effect the assumption by the husband of any amount owing by the wife to the trust or the trustee and the husband will indemnify the wife and keep the wife from and against the same; and
(d)otherwise forgo any right or claim she may have in respect of the trust whether as a potential beneficiary or otherwise.
10.That other than provided for within these Orders:
(a)the husband hereby indemnifies the wife from and in respect of all actions, claims, suits and demands as may be made against the wife in relation to all liabilities in the name of the husband including of and in respect of any amount claimed to be owing by the husband and/or the wife to the Second Respondent, the Third Respondent and/or the Fourth Respondent; and
(b)the husband and the wife will be solely entitled to the exclusion of the other to all property and chattels of whatsoever nature and kind in the possession, ownership or control of each party as at the date of this Order.
Child support departure
11.That pursuant to section 124 of the Child Support (Assessment) Act 1989 (Cth) the father will pay non-periodic child support in respect of the children as and when they fall due as follows:
(a)to the children’s school (including such private schools as the children are enrolled in from time to time), within fourteen (14) days of receipt of accounts or invoices from the school or from the wife, all school fees including but not limited to tuition fees, excursion fees, incidental sporting costs, the costs of all school books, school uniforms and extra-curricular activities;
(b)to the relevant provided of insurance, private health insurance premiums for the children at their current rate of cover; and
(c)to the wife the costs of medical, dental, orthodontic, hospital, physiotherapy, podiatry, psychiatric or other medical specialist fees or expenses in respect of the children which are not covered my Medicare and/or the children’s private health insurance policy.
12.That the father’s obligation to pay non-periodic child support under this Order shall not be credited against the administrative assessment from time to time on account of the expenses paid as per this Order.
13.That the application for departure from the child support administrative assessment is dismissed.
14.That in the event either party refuses or neglects to execute any deed or instrument necessary to give effect to these orders then the Registrar of the Court be appointed pursuant to Section 106A of the Act to execute such deed or instrument in the name of the defaulting party and do all acts and things necessary to give validity and operation to the deed or instrument.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Vuksan & Jelasic has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
BAUMANN J:
INTRODCUTION
When the parties were married and commenced cohabitation in 2005, the Applicant wife was a health professional and the Respondent husband was also a health professional.
Over the next 18 years until the trial before me which took place on 21 August 2023, the parties were blessed with three high achieving children and enjoyed on any test a luxurious lifestyle which included quality family homes, expensive family holidays and a number of lifestyle benefits.
That, despite the husband’s consistent and substantial income, ultimately the nett pool of divisible interests is so modest in many ways has fuelled the litigation and “blame game” which has engulfed these parties (and to some degree their children) since final separation occurred in March 2022 – less than 18 months ago.
Even though both parties (and family Intervenors) had the benefit of specialist independent lawyers representing them, resolution of the primary issue of what orders do justice and equity to both parties, could not be achieved.
These Reasons seek to explain what orders, in the Courts view, does achieve justice and equity. Sadly, having seen the parties give evidence and having observed the clear lack of trust and respect each hold for the other, it is likely that these two high functioning people (and parents), will not easily move on with their lives.
PRINCIPLES
Shortly stated, but more concisely and elaborately described in the Full Court decision in Hickey & Hickey (2003) FLC 93-143, in a property settlement case, the Court must adopt a well-known four-step process, essentially:
(a)to identify the pool of assets and liabilities generally, and usually at the time of hearing;
(b)to assess the relative contributions of both the financial, non-financial, direct and indirect nature as specified by s 79(4);
(c)to consider the factors as are relevant contained in s 75(2) of the Act; and
(d)finally, consider the ultimate analysis to determine whether the order the Court proposes to make is just and equitable to both parties.
Counsel for the parties, Ms Horsley for the wife and Mr Alexander for the husband both contended that it is just and equitable to make orders which alter the existing legal and equitable interests of the parties (s 79(2) of the Family Law Act 1975 (Cth); Stanford & Stanford [2012] HCA 52). I agree. I should note that the efficient way in which both Counsel advocated for their clients, enabled the trial to be completed within two days – thus saving the parties extra legal costs. Neither Counsel could have said more than they did to prosecute their client’s position.
MATERIAL RELIED UPON
Prior to the trial commencing, the parties resolved by way of an order made by consent, the claims raised by the husband’s parents Mr B Jelasic and Ms C Jelasic (“the husband’s parents”). After the wife was cross examined and at a stage where the husband’s cross examination was underway, the Court adjourned on day one. At the commencement of day two, the Court was presented with a proposal order resolving the claims of the husband’s sister Ms D Jelasic. I made the order by consent and, as a result Ms Power of Counsel was not required, nor did she, undertake cross-examination or make submissions. As a result of these events, the affidavits of Ms D Jelasic filed 14 July 2023 and 17 July 2022; the affidavit of Ms D Jelasic’s solicitor Mr Mark Matulich filed 3 August 2023 and the documents described by the Intervenors as their “tender bundle” were not before me.
Mr Alexander had raised the possibility that he would seek to rely upon the affidavit of Mr Matulich, but after exchanges with the bench, and although he formally sought to rely upon the affidavit by that time, Mr Matulich had left the Court (and I infer was not readily available for cross-examination). Ms Horsley opposed the husband relying on the affidavit. I ruled, for Reasons apparent from the transcript, that the husband could not rely on the affidavit. However, without objection, Mr Alexander tendered a number of documents at the conclusion of his case.
The Applicant wife filed her case outline on 7 August 2023, in which she identified the material she relied upon. Her trial affidavit annexed 573 pages, mostly by way of documentary corroboration of an asserted fact, but as the transcript reveals, many of the facts were not challenged and in final submissions nearly all of the annexures were not referred to by Counsel. The wife had a tender bundle which was not tendered, although some parts of that bundle were put in cross-examination or otherwise tendered and marked as an Exhibit. The wife’s brother Mr G was briefly cross-examined, however the wife’s other witnesses Ms O and Ms P were not required for cross-examination.
The husband filed a case outline on 8 August 2023 in which he identified his trial affidavit and financial statement (both filed 7 July 2023) as the evidence he relied upon at the hearing. The husband had amassed two folders of documents said to constitute his tender bundle. Whilst some documents in those folders were ultimately tendered (and marked as Exhibits in the trial), the majority of the tender bundle was not tendered and were returned to the husband’s Counsel at the conclusion of the trial.
Because of the form of some submissions, a discrete issue arose as to whether the pleadings (or parts of them) relating to the Intervenors’ claims could properly be considered, in the circumstances where the consent orders dealing with their claims had been made. Both Counsel agreed the Court could consider the pleadings so far as it related to their asserted claims and admissions.
As the Intervenors’ further amended Points of Claim identifies, the claims of the Intervenors was something of a “moving feast”, however, the final orders sought in these pleadings were:
(a)a declaration that the husband is indebted to his sister Ms D Jelasic in the sum of $527,456; and
(b)a declaration that the husband is indebted to his sister Ms D Jelasic in the sum of $150,804; and
(c)a declaration that the husband and the wife are jointly indebted to the husband’s parents in the sum of $354,650.
The consent orders speak for themselves, and in circumstances where on the face of those orders some compromises are apparent, without impermissibly seeking to “go behind” the orders and what compromises were agreed to, it is at least appropriate for context to record that the consent orders were made in this form:
(a)As to the claims of the husband’s parents, the sum of $241,482 was to be paid to them from the controlled moneys account (a reduction from their asserted claim of $113,178); and
(b)As to the claims of Ms D Jelasic, the sum of $339,500 was to be paid to her from the controlled moneys account (a reduction from her asserted claim of $187,956); and
(c)As to the claims of Ms D Jelasic (for what seems to have been some funds paid to the husband post separation) a notation to the order records an agreement between the husband and his sister Ms D Jelasic that the husband “will pay the sum of $105,562” to his sister from his share of the property division after the making of final orders. This agreed payment is a reduction from her asserted claim (see paragraph 5 of the further amended Points of Claim) of $45,242.
CONTEXUTAL HISTORY
Statements of fact which now follow in these Reasons should be construed as findings of fact.
The wife is nearly 51 years of age and the husband is currently 48 years of age and when they commenced cohabitation upon their marriage in 2005, the wife was 32 years old and the husband was 29 years old.
Prior to the marriage the husband, with financial assistance from his family, purchased land at Suburb H and constructed a home. The wife owned an encumbered unit in Suburb J having in 2004 received an inheritance of $60,000 from her uncle’s Estate.
Shortly after the marriage, after living together in the wife’s unit in Suburb J, the wife sold the property and received a nett return of approximately $89,000 – of which, I find, $42,000 was paid to the husband’s sister Ms D Jelasic in part payment of loans the husband had received from his sister whilst living in the Suburb H home.
The parties three children were born:
(a)X in 2006 (now aged 17 years);
(b)Y in 2007 (now aged 16 years); and
(c)Z in 2009 (now aged 14 years).
The wife ceased work prior to the birth of X and did not return to part time employment until August 2022 (some 16 years later).
The husband’s parents had security over the Suburb H home for asserted initial advances totalling $525,000, granted by the husband pursuant to a mortgage dated early 2005 (see annexure 28 to wife’s affidavit). This security was offered before the marriage took place, although the evidence is that it most likely represented funds provided to the husband by both his parents and his sister before the marriage in proportions not entirely clear. This mortgage was discharged in 2009 although the husband says not all the loans had been repaid.
In 2011 the parties jointly acquired vacant land known as K Street, Suburb L (“the Suburb L property”) for $750,000 and funds were secured from the National Bank of Australia (NAB) to complete the purchase (see annexures 31 to 32 to the wife’s trial affidavit).
With the Suburb H property not sold until settlement occurred in 2011, and with construction of a home on the Suburb L property progressing, I find that the parties benefitted from funds provided by the sister Ms D Jelasic that had been provided in 2010, when the sister’s solicitors had directed funds from the sale of her home at Suburb M to be made payable by a bank cheque in favour of the wife in the sum of $484,983. In the absence of any tested evidence from the sister (for the reasons already explained) I find that:
(a)in or around early 2010, a cheque payable to the wife for $484,983 was produced and was banked into an account controlled by the husband and the wife;
(b)the deposit (which I infer probably remained intact until the funds were needed progressively towards the construction of the home on the Suburb L property after early 2011), attracted interest which was taxable in the hands of the wife (see wife’s Income Tax Return for year ended 30 June 2011 at Exhibit 5). In circumstances where it is not asserted at that time the parties had monies available to invest (other than the funds received from the sister) it is reasonable to infer that the gross interest shown in the wife’s tax return of $17,759, represents interest accrued on the sister’s money. The wife was not working and her liability for income tax was at a much lower level rate than the husband’s income attracted;
(c)Exhibit 27, includes an unstamped “Family Loan Agreement” signed by the husband and his sister (and witnessed by their father Mr B Jelasic) dated October 2011 – 18 months after the “advance” was made. It is not readily apparent why there was a need to document the loan at that time, however the loan was described as being for the purpose of assisting the husband “with his family house construction”. Furthermore, the loan agreement provided that “… the amount will be repaid when the lender requires the funds back to purchase her own family home or for any other purpose. The loan is without interest”.
The sale of the Suburb H property resulted in nett proceeds on settlement of $814,350.56 being available. The security over the property to NAB had to be released on settlement, and although Exhibit 24 was helpful in some respects, doing the best I can on what I was directed to, I find that:
(a)Although the Suburb H property was solely in the name of the husband, the property was collateral for loans over the Suburb L property as well. The Discharge Authority referred to the parties’ intention to reduce the limit of the liability to $500,000;
(b)By the time of the settlement in late 2011, the offset home loan number ending in …88, had escalated to $784,000 which reduced to a level of $600,000 immediately after settlement;
(c)The parties operated an offset account (ending in numbers …33), and the bank statements offered in Exhibit 24, reveal a fluctuating balance commencing in October 2011 (at $625,174 CR) until it had reached a level of $315,547 CR by December 2011 (immediately before settlement of Suburb H);
(d)In late 2011, two deposits to these two accounts were made:
$185,300 To the home loan account $627,824 To the offset account $813,134
I find that all the proceeds of the sale of Suburb H went into the parties accounts, as they directed, but it is difficult to be satisfied whether, at that time, any funds were paid to either the husband’s parents or his sister.
However from the level of $938,293 credit, large withdrawals in and out can be seen until the last bank statement at at 16 January 2012 has a credit balance of $605,151.95. The parties utilised an offset account to not only deposit the husband’s income, but to make payments (including I infer for building construction and other family expenses) as required from time to time.
The transaction involving a desire to support the wife’s brother Mr G by providing a home for him needs little explanation, save to say that the parties purchased land in Suburb N in 2012 for around $260,000; constructed a home on the land (which took about nine months); after construction was complete in 2015, Mr G moved into the property and was meant to pay the parties $1,000 a week to cover the mortgage, rates and for some furniture.
Mr G says, and I accept, by about mid-2016 it was clear to him that his variable work meant he was struggling to make the agreed weekly payments and it was agreed between the husband and wife and Mr G that it was best to sell the home, which was achieved for $782,000 in late 2016. At paragraphs 31 to 32 Mr G describes how he received some funds after settlement totalling $34,000. Any “profit” the husband and wife achieved from this transaction was modest and found its way into joint funds.
The parties decided to upgrade the family home and move from Suburb L to Suburb E. Although it is not explained why they exchanged contracts to buy the property at Suburb E for $2.3 million (plus stamp duty and costs) before they had the proceeds of sale from the Suburb L property, that is what they did. The settlement for Suburb E took place in 2014 with the sale of the Suburb L property occurring 20 days later, for approximately $1,660,000. As the husband says, and I accept, bridging finance was required to complete the Suburb E purchase and further funds were borrowed to make planning and building applications. Until the construction of the Suburb E property was completed (which required the demolition of the previous home and a complete rebuild), the parties rented in Suburb L. They also for a period rented the Suburb E property, which accounts for why (when that property was sold in mid‑2023); the parties have incurred Capital Gains Tax from their principal place of residence. The family moved into the Suburb E home in 2017.
The parties borrowed some funds on the Suburb E home to the level of a further $300,000 to enable an investment to be made into a private commercial venture, but for reasons not necessary to analyse that investment, rather than proving profitable, resulted a loss of some capital.
As I will further observe, notwithstanding the husband’s income (which was the source of the family support) being estimated at $8,854,711 gross ($5,102,186 nett of tax) between 1 July 2006 to 30 June 2022 (see paragraph 28 of the husband’s affidavit), the parties seemed to be under pressure financially at times. Whilst the family home at Suburb E was sold for $6.6 million; the children all attended high fee private schooling; and living expenses incurred by the wife on behalf of the family unit on their credit cards averaged around $1,900 per month (see Exhibit 7). These factors, I find, encouraged the husband – who was less competent in financial planning and management (which he undertook for the family) then as a highly successful health professional, to venture into more speculative endeavours like cryptocurrency. Although often the wife was given some details of their financial position and activities, often I find that the husband both kept things to himself (including dealings with the family) or, perhaps so as not to cause anxiety to the wife, did not always tell her the truth. The affidavits are filed with versions of conversations between the parties about money matters, where there are denials. Even the limited text messages entered into evidence (see Exhibit 6) paint a picture of ineffective communication.
Although it is not necessary to attribute any particular reason to the ultimate breakdown of the marriage, I am satisfied that the financial tensions the husband was trying to manage – including his feelings of inner disappointment for not being able to meet the debts he said he owed to his parents and sister and the inability to ensure his taxation liabilities were satisfied in a timely manner, was the major contextual factor.
The evidence makes it clear, the husband formed a view the marriage was over and put in place some financial and personal decisions (without the wife’s knowledge) to prepare himself. The way the children were informed by the father unilaterally of the marriage breakdown, showed a lack of insight in my view, and hardly the approach a health professional would recommend to a patient. In any event, final separation occurred abruptly on 23 March 2022, and the husband immediately moved into a rented home unit in the City (organised at a rate of $5200 per week some days earlier) whilst the wife and children remained in the Suburb E home.
The wife commenced proceedings in this Court on 14 June 2022 seeking property relief and about three weeks later the husband commenced proceedings in the Supreme Court of New South Wales seeking orders under s 66G of the Conveyancing Act 1919 (NSW) for the sale of the family home at Suburb E. Those proceedings were ultimately transferred to this Court to be consolidated with the property proceedings, with the parties costs (each having incurred costs) being reserved.
Between 14 June 2022 and 17 November 2022, a number of case management events before Registrars took place (including orders for pleadings after the third parties – the husband’s parents and sister – had sought to be joined) before the Honourable Justice Schonell made a number of orders by consent on 17 November 2022 (amended pursuant to the rule 10.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) on 12 May 2023 for payment of the husband’s income tax as determined), and those Orders are Appendix One to these Reasons (“the November Orders”).
Later in these reasons when discussing the parties contributions, some of the compliance with the November orders are recorded, but at least the following occurred:
(a)The husband made the payments required of him to support the wife, but the wife who secured rental accommodation of $1,600 per week did not reach the cap of $2,500 per week permitted by the November orders;
(b)The husband did organise for the sale of the cryptocurrency investment (which he claimed he held on trust for his sister) so as to pay the wife $150,000 on account of legal fees;
(c)The Suburb E home was sold with the settlement in mid-2023 resulting (after payment of three secured NAB loans) and expenses of sale (but not including Capital Gains Tax) in nett funds of $2,427,300 placed by agreement in a controlled moneys account.
The controlled moneys account, at the conclusion of the trial, is agreed to have an available balance of $1,323,902 after withdrawal from the controlled money’s account of at least the following major sums:
(a)$472,751.18 paid to the Australian Taxation Office (“ATO”) on account of the husband’s 2020, 2021 and 75% of his 2022 income tax liability;
(b)$241,482 paid to the husband’s parents pursuant to the consent order; and
(c)$339,500 paid to the husband’s sister Ms D Jelasic,
together with withdrawals pursuant to the November orders.
POOL
Exhibit 37 represented the final “agreed” balance sheet with items in dispute, the subject of submissions, which I deal with below. Both parties agreed that as most of the parties’ superannuation entitlements accrued during the relationship, it is appropriate to include those interests in the same pool as non-superannuation interests. I agree.
In respect of items or amounts in dispute, I make the following findings.
Loans to the wife from Ms O and Ms P
These post separation liabilities were incurred by the wife and used predominantly for legal expenses. I do not regard it as just and equitable, because of the manner in which I intend to treat the payment of legal expenses, to include these debts in the balance sheet and therefore they are excluded.
Capital Gains Tax
The agreed liabilities for Capital Gains Tax arising from the sale of the Suburb E home should be paid from the controlled moneys account – which represented the nett proceeds of sale. As a result, I intend to notionally reduce the balance in the controlled moneys account by $29,666 (being the aggregate of the Capital Gains Tax for both parties) and will make an order that sum be withdrawn and $12,215 be paid to the wife and $17,451 be paid to the husband to meet that personally assessed liability.
Balance of husband’s 2022 income tax
As I understand the submissions, the husband’s income tax liability for the year ended 30 June 2022 were paid from controlled moneys account, save for 25% of the assessment – a figure of $141,942. The wife’s opposition to the payment of that balance was because the period from separation to 30 June 2022 represented approximately 25% of the tax year. On the evidence, the husband continued to pay or reimburse the wife’s credit card expenses for the months of March, April and May 2022 (totalling $58,880 – see Exhibit 7) and meet other expenses such as school fees. The parties were in a state of transition and whilst I accept the husband’s decision to rent the apartment for $5,200 per week riles the wife, I on balance am persuaded by the submissions of Counsel for the husband that the additional tax on income generated to 30 June 2022 and significantly used for family support ought to be included in the balance sheet, essentially as a joint liability.
Husband’s 2023 income tax liability
As the aide memoir to Exhibit 11 clarifies, the husband has a tax liability for the year ended 30 June 2023 of $344,782. As already noted, $17,451 of that liability (the Capital Gains Tax component) will be met from the controlled moneys account. The husband has had total control of how much he earns and must, like all Australian tax payers, meet his obligations to pay income tax. To the extent he elected to pay other expenses (or agreed to do so in terms of the November 2022 orders) the proper way to take account of his use of available income is to be reflected in the assessment of contributions. His income received should not, properly in my view, be aggregated and included in the balance sheet. In these circumstances it is not just and equitable to include his primary outstanding tax of $327,331 in the balance sheet. Mr Alexander properly conceded that if penalties are imposed by the ATO, for delay in payment of personal income tax, then that should be the sole responsibility of the husband.
Legal fees
The vexed question of how properly to take account of the parties’ paid and/or outstanding legal fees is the next issue requiring determination. At least since 2004 in the decision of NHC & RCH (2004) FLC 93-204, it has been identified that the exercise of discretion as to whether to “add back” paid legal fees notionally required the Court to consider:
(a)when and how the funds used to pay legal fees have been accumulated;
(b)if the funds used have been generated by a party post-separation from his or her own endeavours, they would not generally be added back, nor would any borrowings by a party post-separation to pay legal fees be considered as a liability in calculating the nett property of the parties;
(c)where the payment of legal fees can be regarded as a premature distribution of funds in which both parties have an interest, it is appropriate to add back those funds as a notional asset;
(d)where the funds used have been borrowed, and such liability is still outstanding, neither the payment of the fees nor the liability should be taken into account; and
(e)where it is determined that a payment of legal fees should be considered as a notional asset, any outstanding liability in respect of those fees should be considered.
Exhibit 34 are the parties’ cost notices filed under the Rules which reveals:
(a)the wife has paid $274,000 to date (of which sum $99,667.77 remains in Trust), with the source of those payments being:
(i)sale of engagement ring ($5,000);
(ii)loans ($89,000);
(iii)interim property distribution ($150,000); and
(iv)agreed payment in August 2023($30,000).
There is likely to be further costs payable over those already paid.
(b)The husband has paid $243,052 costs to date (of which sum $18,831 remains in Trust) with the source of those payments being:
(i)A loan from his sister Ms D Jelasic ($20,000); and
(ii)paid from income ($221,078).
Section 117(1) of the Act provides a general rule that each party bear their own costs, although departure from that rule can occur when circumstances justify doing so. Litigants make choices as to whether to represent themselves or to engage lawyers. The fees lawyers charges vary and is no doubt taken into account by a client before they are retrained. Apart from the order in November 2022 (where joint property was to fund a $150,000 payment to the wife for legal fees) no other litigation funding orders were made. The agreement for the wife to receive $30,000 close to the trial is not clearly characterised on the evidence before more.
I see no injustice to either party, where the source of the payment of legal fees has been set out above, that the balance sheet does not include:
(a)loans for legal fees incurred;
(b)monies currently held in trust; or
(c)add back legal fees (whether billed, paid or estimated).
I will add back the proceeds of sale of the engagement ring which the wife used for some legal as well as the partial property distribution of $150,000 from the sale of the cryptocurrency, noting properly that the balance of the cryptocurrency portfolios have been included in the balance sheet.
It is of course consistent with authority, to take into consideration when considering the s 75(2) factors, any liabilities the parties have a legal obligation to pay.
On the basis of these findings, and adopting agreed positions set out in Exhibit 37, I find the pool of interests and liabilities to be as follows:
POOL PARTY DESCRIPTION AMOUNT Assets Joint Controlled Monies (after GST allowance) $1,294,236 Husband Car $40,000 Wife Household possessions $5,000 Wife Car $10,000 Wife Q Bank account $1,060 Wife Westpac account $867 Joint Jelasic Family Trust account $40,705 Husband Watch and ring $35,100 Husband Cryptocurrency portfolio $24,273 Husband R Bank account $54,497 Wife Jewellery $2,000 Husband Rental bond $20,800 Wife Rental bond $3,200 $1,531,738 Liabilities Wife Credit Card $59.00 Husband Balance of 2022 Tax (25%) $141,942 $142,001 1,389,737 Add backs Wife Partial property distribution $150,000 Wife Sale of engagement ring $5,000 $155,000 $1,544,737 Superannuation Husband $738,823 Wife $190,181 $929,004 TOTAL NETT POOL $2,473,744 CONTRIBUTIONS
It is well established that the assessment of contributions, both financial and non-financial (direct and indirect) to the acquisition, conservation or improvement of any of the property of the parties and the contributions made by a party to the marriage to the welfare of the family and any children of the marriage, including any contribution made in the capacity of a homemaker or parent (collectively s 79(4)(a),(b) and (c)), is to be undertaken holistically. In cases like this, it is well to remember that the contribution of a primary homemaker and parent should not be underestimated, simply because it is less capable of financial quantification than earnings established (see Mallett v Mallett (1984) 156 CLR 605).
Furthermore, this relationship spanned nearly 17 years to separation and then a further 18 months from separation to trial. The history of this relationship reveals a myriad of diverse contributions, and it would be contrary to principle to segment separate assessments between pre and post separation conduct. With these broad principles in mind, I find that the core contributions of the parties were:
Wife
(a)At cohabitation the wife owned an encumbered property at Suburb J which sold shortly after marriage and with the nett proceeds used in part to repay some debts the husband owed to his sister and otherwise the balance was contributed to family expenses. The wife also had a superannuation benefit with Superannuation Fund 1 estimated at $37,925;
(b)Although the wife worked as a health professional from 2005 and contributed her nett income, from the birth of X in 2006, the wife was the primary homemaker and parent, and by doing so, the husband was less restrained in developing his career as a health professional, which he achieved successfully. I do not say the husband made no contribution as homemaker or parent, but his full time professional responsibilities simply meant he was less available, save for the weekends;
(c)The wife says, and I accept, she made indirect contributions to the various homes selected (including finishes and design), improved and maintained during the marriage – although most construction work was performed by qualified tradespersons. She was generally a co-borrower with the husband in respect of bank loans and exposed joint assets to risks of building wealth (including for the S Venture);
(d)When the wife returned to part time employment in mid-2022, her modest income was contributed; and
(e)In the post separation period, she was supported by the husband’s income (sometimes voluntarily offered but after the November 2022 Orders, as prescribed), but also maintained to the time of the hearing her role as a primary carer and homemaker. The evidence of both parties demonstrates the number of extra-curricular commitments their high achieving children are engaged in, and the support through transport and the like required.
Husband
(f)At cohabitation, the husband owned solely the Suburb H home that was subject to a secured mortgage of $525,000 to the parents. The husband says there were other loans to family, but I accept the equity in this asset continued to increase during the relationship, both through normal market factors but also contributions by the parties. Mr Alexander says (in a Pierce & Pierce (1999) FLC 92-844 sense), the Suburb H property was the springboard for the parties’ wealth. I think that overstates the position, considering the other contributions made, however when I also take into account the husband’s superannuation entitlements at cohabitation ($26,781 – see Exhibit 31) and other interests he refers to at paragraph 18 of his affidavit. I am persuaded that the husband’s initial contributions were greater than the wife – however the difference is not so significant, and those contributions were over 18 years ago, such that weighed against all the other contributions it does not demand a significant adjustment;
(g)Clearly the husband has been the “breadwinner” and his income has allowed him to support a very comfortable lifestyle for the children and the wife. I do not regard the period where he received a reduction in income (as a result of issues ultimately resolved in his favour) or the less successful S Venture and/or cryptocurrency investments, as diminishing the weight to be applied to his earnings. Clearly those earnings (when employed) allowed contributions to his superannuation entitlements to be accumulated at a much higher level than the unemployed wife achieved;
(h)As already acknowledged, the husband did make a contribution as a homemaker and parent, but his commitments to developing his career meant this contribution was much less than the wife’s. The husband says in his affidavit, and I accept, he also made contributions to the various homes selected, improved and maintained during the marriage. However, as it is for the wife, the fact that the family property sold at Suburb E achieved a nett return of $2.4 million in mid-2023, was attributable in a large part to a buoyant Sydney property market and being in the right suburb at the right time;
(i)I take into consideration the post separation contributions which the husband made from his income. Clearly he attempted to maintain the family’s lifestyle particularly the children’s schooling and extra-curricular activities. Both of these proud parents have, I accept, done their best to shield the children from the adverse adjustments which so often flow to children from their parents marital relationship coming to an end.
The other factor for which the husband seeks a weighting in his favour (in final submissions – whilst based on a different estimate of the pool – of 7%), is what he asserts is the support directly and indirectly the family has benefited from relating to his parents and sisters assistance. Overall, as I will summarise, whilst I accept some benefits have flowed for (which the husband is entitled to receive some credit) the evidence makes it generally impossible to quantify the monetary value of those benefits, because at least:
(a)the husband was an extremely vague and very pool financial historian. Clearly he is an excellent professional but at times the lack of detail he could recall; the absence of reliable records or certainty as to the author of various documents claimed as supportive (see Exhibit 12); and lack of evidence before the Court (able to be properly tendered) from either his parents or his sister Ms D Jelasic only increases the vagueness of what occurred;
(b)significant intermingling of monies between the husband and his family occurred, however gaps in the tracing exercise were apparent. For example, Exhibit 28, was some bank statements from the husband’s mother, which on their face reveal some sizeable tax office payments related to the husband from his mother’s account (for example, 4 June 2008 - $127,689; 6 August 2008 - $155,543; 2 March 2009 - $51,533). In final submissions I raised with Mr Alexander for the husband what I was to make of these entries – particularly where in every case only days before the deposit to the ATO was made, a credit to the mother’s account from another account is exhibited. Were these temporary loans made for the husband’s benefit and were they repaid? The husband gave evidence of repaying monies he says he borrowed from his parents but there are also “offsets” against alleged borrowings for “in kind” payments for the benefit of both the husband’s parents and his sister. I accept, as already noted, that previously the husband’s sister was prepared to deposit funds of $425,000 to an account – which the husband and wife used to generate (for a time) income. How, if at all, this was adjusted with the sister is entirely unclear;
(c)however, even if I accept some unspecified benefits would flow between the husband and his family, my finding is that the highest level that the respective nett debts could have reached and remained unpaid, was reflected in the two consent orders because:
(i)the parents and the sister sought to intervene for the purpose of getting a declaration about monies owed to them. They have incurred costs in intervening, and preparing for trial, and retaining Counsel to appear for them;
(ii)in circumstances where the wife, at least, was putting them to proof about the true debt levels, in the negotiations that ensured with independent lawyers retained, the crystallisation of the amounts agreed to be paid represents the best evidence of what was payable. It is, accordingly appropriate to take into consideration that the husband (and indirectly the wife) benefited from the funds representing these loans on an interest free basis for some time perhaps;
(iii)the Court’s disquiet (properly characterised as the failure of the husband to meet the evidentiary onus to establish a fact he asserted), was only increased by the historical manner in which the husband has appeared not to prioritise payment of income tax over other financial obligations. Most tax payers accept the reality that one can only spend “after tax” income. This does not seem to have been the husband’s consistent approach. To this end, I find the husband’s attempts to criticise the wife’s spending on her credit card for family expenses – without apparent criticism of those expenses until separation occurred and where he felt he needed to enter into a rental agreement for a unit (at $5,200 per week) and buy an expensive watch (for $33,000) – as hypocritical at best.
(d)I do not ignore the increase in the husband’s superannuation entitlements between separation ($657,687) and the trial ($738,823), however it is reasonable to infer that increase is a component of:
(i)investments returns on the balance at separation;
(ii)contributions made by the husband; and
(iii)deductions for administration expenses, tax and possibly other expenses (such as life insurance).
Without any evidence of these components, it would not be appropriate to find the increase is solely attributable to contributions by the husband.
Taking all these findings into account in respect of the pool of interests including superannuation, which I calculate to be $2,472,744, I assess contribution based entitlements as 52.5% to the husband and 47.5% to the wife – a differential of 5% or approximately $120,000.
SECTION 75(2) FACTORS
As the submissions of Counsel (and the filed case outline demonstrate) only some of the factors set out in s 75(2) of the Act are relevant in this case. The findings I make in these proceedings on the evidence are:
(a)the parties are in good health and of similar ages, with the wife nearly three years older;
(b)the income and earning capacity of the husband is not less (on a gross basis before taxation) than six times greater than that of the wife. The husband mixes work in a public environment together with private work. In the year ended 30 June 2023, the gross income from these sources was $757,201. Whilst I accept the husband wishes to be available for the children, past gross annual income has been as much as $899,256 (see paragraph 28). By comparison, the best evidence of the wife’s current income is the payslips set out at Exhibit 8 – where the gross annual income to 25 June 2023 was $34,338. Although the wife wishes to maintain her role as a parent (s 75(2)(l) of the Act), I find the wife’s acknowledgement the she understood as the children get older and finish school her flexibility to work longer will improve, refreshing. Her expressed desire to undertake further tertiary studies over the next few years to hopefully gain qualifications and future employment is not fanciful – but at best she says, and I accept, that her gross annual income would reach is $120,000. The wife, by being out of the workforce for 16 years suffers a disadvantage not likely to be experienced by the husband (s 75(2)(k) of the Act). The husband has benefited from the support the wife has given him, and that contribution which includes her primary care role is a factor to be considered under s 75(2)(j) of the Act;
(c)I take into account that the husband will be required to pay, and I accept will pay, child support to the wife as assessed administratively and will, as he says he is prepared to do, be required to meet the children’s school experiences. I accept these obligations will eat into his nett available income;
(d)both parties will have some residual legal fees to pay beyond what they have already paid – the wife from her partial property settlement and borrowings (with the debts to Ms O and Ms P still to be discharged). I accept the father owes money to his sister (as noted in the consent order) but also owes at least $344,782 primary tax. Whilst he will secure some funds available in cash from the controlled moneys account to meet some of these expenses – he will not receive sufficient funds to cover all his debts. He may well be required to continue to reach repayment arrangements with the ATO;
(e)I take into account that the parties will each get a share of the divisible pool, although neither can access their superannuation entitlements for some years. In that respect, as I note below, Ms Horsley for the wife submitted that the parties had agreed to “equalise” their superannuation entitlements. Although Mr Alexander in oral submissions was a little unclear that this was the agreement, at paragraph 41 of the husband’s case outline prepared by Mr Alexander he referred to this agreement “albeit the husband should receive credit” for this increase in the husband’s superannuation post separation. I have dealt with that above.
Mr Alexander said in his initial oral submissions that there should be an adjustment in the wife’s favour of 7% for the s 75(2) factors. When I robustly challenged that submission, Mr Alexander was given a chance to take further instructions after also hearing from the wife’s Counsel. In final oral submissions in reply, Mr Alexander made it clear that his firm instructions were that a 7% adjustment (a differential of 14%) was fair.
Ms Horsley for the wife contended for an adjustment of 21% to the wife on contribution based entitlements (a difference of 42%).
It is recognised by longstanding authority that in some cases the most significant and valuable “asset” which a party can take out of a marriage is a substantial and reliable earning capacity (see Best & Best (1993) FLC 92-418; Clauson & Clauson (1995) FLC 92-595) and that rather than just a percentage assessment, the adjustment must be looked at in real money terms.
I assess that the appropriate adjustment for the s 75(2) factors in this case in favour of the wife is 17.5% - a differential of 35% of the pool or $865,809.
I accept the husband will clearly regard this as unfair – however within four years this sum will be covered by his available nett income (noting at least for the next 2 to 3 years when the wife is re-educating herself the husband’s nett income will be more than 10 times that of the wife).
I will now consider what orders do just and equity and, I will explain how, using these percentages as a guide, the orders I will make and the mix of asset classes will achieve the statutory obligation.
WHAT ORDERS ACHIEVE JUST AND EQUITY?
Both parties seek as much cash or liquid funds as possible – but for different reasons. The wife needs to re-establish herself but at her level of income I infer her borrowing capacity for the next few years is modest. She is likely to be required to pay rent – however at the current level of $1600 per week ($83,200 per annum) she will be required to access capital to maintain that type of accommodation (and nowhere near the previous standard at Suburb E). She will be able to invest cash available to her to supplement her income – but on what is likely to be a reducing balance, as withdrawals are made to meet expenses not covered by child support payments or her own income.
The husband has got significant debts to pay (to his sister and the ATO) but, as already noted a significant income. He has other funds available to him ($119,475) in addition to his share of the controlled moneys account. If he was really desperate, he could contemplate selling his watch ($33,000) and find less expensive rental accommodation than his current unit which costs $270,400 per annum; all of which will take some pressure off him until his expenses for child support, school fees and the like start reducing.
If the pool of assets was divided as to 65% to the wife and 35% to the husband (and with total superannuation also being distributed in those proportions) the wife’s share of the pool amounting to $1,607,281 could be made up as follows:
Add backs $155,000 Household furniture $5,000 Car $10,000 Bank accounts $1,927 Jewellery $2,000 Rental bond $3,200 Current superannuation $190.181 Superannuation split $413,020 $780,328 Less credit card $59 Plus share of controlled moneys account $780,269 $827,662 65% of pool equals to $1,607,931
The husband’s 35% share of the divisible pool equates to $865,450 which could be made up as follows:
Superannuation after superannuation split $325,803 Car $40,000 Jelasic Family Trust $40,705 Watch and ring $35,100 Digital Currency $24,273 R Bank account $54,497 Rental bond $20,800 541,178 Less tax $141,942 $399,236 Plus share of controlled moneys account $466,574 35% of pool equates to $865,810
Ms Horsley’s submissions that the parties agreed to equalise their superannuation has, if adopted, the effect of increasing the wife’s cash component from the controlled moneys account and reducing the superannuation split, by the same figure. Whilst the wife might benefit from a high superannuation split now, so as to create a base for her future retirement, she clearly seeks more cash now – and I am persuaded, even if the “agreement” to equalise superannuation benefits was “conditional” as the father’s case outline suggests, that equalising the superannuation interests creates a more just and equitable result.
On this basis the orders for property division which appear at the commencement of these Reasons provide for the wife to receive:
Assets and interests currently held by her $22,127 Add backs $155,000 $177,127 Less credit card $59 $177,068 Current superannuation $190,181 Superannuation split $274,321 $454,502 $641,570 Plus share of controlled money account $966,361 $1,607,931
The husband on this basis will receive:
Assets and interests currently held by him $215,375 Less tax $141,942 Superannuation after the splitting order $464,502 $537,935 Plus share of controlled moneys account $327,875 $865,810
Therefore the disbursements to be actually received from the controlled moneys account of $1,323,902 shall be:
Wife $966,361 + $12,215 (GST) $978,576 Husband $327,875 + 17,451 (GST) $345,326 $1,323,902
CHILD SUPPPORT APPLICATIONS
The wife (for this part of these Reasons called “the mother”) seeks in the Amended Initiating Application filed 9 June 2023 an order in these terms:
3. Pursuant to Section 117 of the Child Support Assessment Act 1989 [(Cth)] there be a departure from the administrative assessment of child support such that the Husband will pay to the Wife:
3.1. Period child support for the children in the sum of $500 child per week; and
3.2. Non-periodic child support in respect of the children as and when they fall due as follows:
3.2.1.to the children’s school/s (including such private schools as the children are enrolled in from time to time), within 14 days of receipt of accounts or invoices from the school or from the wife, all school fees including but not limited to tuition fees, excursion fees, incidental sporting costs, the costs of all school books, school uniforms and extra-curricular activities;
3.2.2.to the Wife the costs of all non-school extracurricular activities the children are enrolled in from time to time;
3.2.3.to the relevant provider of the insurance, private health insurance premiums for the children at their current rate of cover; and
3.2.4.to the Wife the costs of medical, dental, orthodontic, hospital, physiotherapy, podiatry, psychiatric or other medical specialist fees or expenses in respect of the children which are not covered by Medicare and/or the children Private Health insurance policy.
4. The husband be and hereby is restrained from making an application for a change of administrative assessment and/or seeking credit against the administrative assessment on account of the expenses paid as set out in Clause 3.2 above.
Very little cross-examination in respect of this application was undertaken. However, consideration of the following evidence shapes the orders I made in respect of child support:
(a)The mother at paragraph 305 asserts that if the father does not wish to pay “the children’s non-periodic expenses including private health insurance and their private school tuition. I will not be able to support the children in their various endeavours from my income if an order is not made regarding [Mr Jelasic] to continue to meet the children’s non-period [sic] expenses and the children’s private school tuition”;
(b)The current Child Support Assessment (Exhibit 20) issued on 21 August 2023; reflected the husband’s (for this part of these Reasons called “the father”) 2022 Taxable Income as $888,414 and the mother’s at $10,031; and for the assessment period ended 30 September 2023, the father was assessed to pay $927.97 for the three children (approximately $309 a week per child);
(c)The mother, as set out in Exhibit 18 estimated expenses paid by her from her own accounts, in respect of the children for the 12 months to 1 August 2023 being $2670 per week. The major weekly expenses being food ($792) and three quarters of rent, utilities and internet ($1264.50);
(d)The mother, as set out at Exhibit 19, estimated expenses paid from the father’s bank and credit card accounts for the 12 months to 31 December 2022 to be, on a weekly basis (averaged out) as:
T School tuition fees $1546 Education related expenses (approximate) $9 Music related expenses $376 In school activity expenses $12 Miscellaneous school expenses $55 Sport expenses $35 Sport expenses $40 Language course expenses $6 Medical expenses $15 Sports clothing expenses $69 Entertainment: phones $18 Miscellaneous X (excluding cost of car – $6000 – which the father said the child reimbursed) $66 $2247
(e)The mother deposes to the difficulties she experiences to manage her finances and the children’s expenses when the children are almost full time in her care and she is required to ask the father to pay for items which the children need.
(f)At paragraph 346, the mother gives details of the number of extra-curricular activities the children have been engaged in – some from kindergarten and various sports;
(g)In cross-examination the father seemed to take offence at a suggestion that an order for him to pay school fees was necessary as he said he would pay the fees – but did not believe it should be ordered to do so;
(h)At paragraph 33 and 34 of the father’s Case Outline he submitted in effect that he should be trusted to pay school fees and that no special circumstances exist to justify a departure order.
DISCUSSION
All the evidence establishes that the father has chosen at times to pay expenses for the children (including school fees) rather than meet his income tax obligations. Realistically this cannot continue.
The parents value their high achieving children being educated in private schools. It might be possible to find a school where the fees are less expensive than are being paid to T School, but that is where they have been enrolled (during the relationship and by agreement) and both parents seek that these enrolments continue.
Pursuant to s 124 of the Act, I will order as per the mother’s Application at 3.2.1. I will also order as per proposed order 3.2.3 which enables the children (but not the mother which is her obligation) to be covered for private health insurance and order 3.2.4 relating to gap payments on medical expenses.
I regard an order for the father to meet all costs of non-school extracurricular activities as too wide and vague and likely to lead to significant difficulties because of the poor and ineffective communication between the parents. I am not persuaded, merely because the children have been involved in so many non-school extracurricular activities that this necessarily means the parents can now afford for all those activities to be maintained.
In respect of the mother’s application pursuant to s 117, it is asserted by the mother, that the ground of departure prescribed by s 117(2)(c) is established namely, in the special circumstances of the case application in relation to the children of the provisions of the Act relating to administrative assessment of child support would result in an unjust and inequitable determination of the level of financial support to be provided by the father, at least because of the income of the father and his earning capacity (s 117(2)(ia)-(ib)).
With his liability under the s 124 non-periodic order I will make, I am not satisfied this ground of departure is established.
Even if I am found to be wrong in this regard, it would not be just and equitable or otherwise proper on the evidence to increase the father’s periodic child support liability by nearly $600 per week $500 per child per week - $1500 less $927 equalling $573. I take in account earlier findings about the property adjustment orders and the debts the father could be required to pay from his income – including outstanding income tax.
It may be little comfort to the mother that the father says he will meet a number of other expenses of a more general nature and if he fails to do so, it may be that some of the children’s extracurricular activities may be reduced. However the periodic child support liability does include an element for such expenses, although not at the level and frequency now being enjoyed by the children.
Parents have a legal obligation to meet the needs of their children equitably and it is a reality that when parents separate, the costs of running two households is generally more than running one household.
For these Reasons, I make the orders set out at the commencement of these Reasons.
I do not regard it as proper, in the exercise of my discretion, to make the injunction restraining the father from making an application to change the administrative assessment anymore than I would the mother. I cannot reasonably lock the parents into an assessment which, if there be a change of circumstances, would reduce or extinguish their statutory rights. I made the observation during submissions that frankly, these parents would be well served in entering into a Child Support Agreement to provide each with a degree of certainty and alleviate either a return to the Court or further administrative pathways being navigated. That might be a subject they see, now that final property alternation orders have been made, as worthy of future consideration.
Pursuant to the discretion in s 125 of the Child Support (Assessment) Act 1989 (Cth), I will order that the non-period order child support cannot be credited against the periodic child support obligation from time to time.
I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Baumann. Associate:
Dated: 28 September 2023
SCHEDULE OF PARTIES
SYC4056 of 2022 Respondents
Fourth Respondent:
MS C JELASIC
APPENDIX ONE
THE COURT ORDERS THAT:
1.By consent, Orders are made in accordance with paragraphs 1 and 2 of a document titled "Minute of Consent Order" dated 16 November 2022, filed herein and set out hereunder:
1."That Mr B Jelasic, Ms C Jelasic and Ms D Jelasic be joined to these proceedings as the second, third and fourth respondents respectively.
2.Costs reserved."
2. By consent and pending further order, Orders are made in accordance with paragraphs 1 to 10 of a document titled "Minute of Consent Order" dated 17 November 2022, filed herein and set out hereunder:
1."That within 14 days the husband and the wife will do all acts and things and sign all documents necessary to market for sale and sell of the property situate at and known as U Street, Suburb E in the State of New South Wales being the whole of the land comprised in Certificate of Title Folio Identifier … (“the Suburb E Property”) and in particular will:
1.1list the Suburb E Property for sale with Mr V of W Real Estate and Mr BB of CC Real Estate to be appointed as co-agents (the Agents) forthwith provided that the Suburb E property shall not be publically listed for sale in accordance with these orders until 23 January 2022;
1.2execute all documents requested by the Agents for the sale of the Suburb E Property and in the event that the husband and the wife cannot agree on the terms of the Agents’ contract within seven days of the agents being selected, the contract is to be in the agents’ standard terms and with the agents’ standard fees;
1.3give such instructions as are necessary to a legal practitioner or conveyancer agreed upon by the husband and the wife within seven days of the date of this Order and failing agreement the husband shall forthwith in writing nominate two solicitors or conveyancers from which the wife shall within a further seven days select one and failing which the husband will select one who shall be the legal practitioner or conveyancer appointed (“the Legal Practitioner/conveyancer”);
1.4market the Suburb E Property for sale by public auction on or before early 2022 (“the First Auction”) at a reserve price agreed between the husband and the wife and failing agreement as recommended by the Agents;
1.5in the event that the Suburb E Property does not sell at the First Auction, market the property for sale with the Agent by way of private treaty for a period of 12 weeks during which time the husband and the wife will accept any offer made to purchase the Suburb E Property within 5% of the reserve price of the First Auction unless the husband and wife otherwise agree;
1.6in the event that the Suburb E Property is not sold at the First Auction and is not sold in the period provided for sale by private treaty, market the Property for sale by public auction with the Agent on a date within six weeks of the date of the conclusion of the period of sale by private treaty at a reserve price agreed between the husband and the wife and failing agreement 5% below the reserve price at the First Auction;
1.7each attend any auction pursuant to this Order and in the event that the reserve price set for that auction is not reached will negotiate with the highest bidder and the second highest bidder and will accept the highest offer to purchase made within 5% of the reserve price set for that auction unless the husband and wife otherwise agree;
1.8execute the contract for sale and in the event that the husband and the wife fail to agree on the terms of the contract for sale the terms recommended by the Legal Practitioner/Conveyancer will be adopted;
1.9co-operate in every way with the Agent in relation to the sale of the Suburb E Property at all times requested by the agent and ensure that the Property is in a neat and clean condition; and
1.10execute all other documents necessary to complete the sale within the time required by the contract for sale to ensure that the purchasers do not have a right to terminate or rescind due to failure to do so.
2.That on settlement of the sale of the Suburb E Property the husband and the wife will do all acts and things necessary to distribute the proceeds of sale in the following manner and priority:
2.1payment of the agent’s commission, marketing and advertising costs, auctioneer’s fees and any other expense properly incurred in respect of the sale of the Suburb E Property;
2.2payment of the legal costs of sale;
2.3payment of any amount outstanding to any water authority or local council in respect of the Suburb E Property not otherwise taken up as a credit in favour of the vendor;
2.4payment of the amount required to effect a discharge of the registered mortgage to National Australia Bank secured on the title to the Suburb E Property, number … (“the Suburb E Mortgage”);
2.5payment of the total amount owing on the wife’s CBA credit card number …01;
2.6payment to the Australia Taxation Office of the outstanding income tax of the husband referrable to the 2020 and 2021 financial years provided the husband submits proof of the tax owing from the Australia Taxation Office;
and 75% of any unpaid or overdue amounts of tax for the Husband's year-ended 2022 tax year, once assessed;2.7the remaining balance to be paid into the controlled monies account held by Broun Abrahams Burreket Lawyers Pty Ltd on behalf of the parties (Controlled Monies Account).
3.That pending the sale of the Suburb E property, the husband will pay the following to the supplier of the goods and services as and when they fall due:
3.1all statutory and consumable utilities and outgoings in relation to the Former Matrimonial Home including but not limited to council rates, internet, water charges, electricity, gas and insurance premiums;
3.2repairs and improvements to the Former Matrimonial Home as requested from time to time by the Agents;
3.3pool maintenance for the former matrimonial home.
4.That following the sale of the Former Matrimonial home the wife be permitted to draw from the Controlled Monies Account the sum of up to $2,500 per week to be applied to her rent and in the event the proceeds of sale are not available when the wife is required to move out of the Former Matrimonial Home that amount is to be drawn from R Bank account No. …54 in the name of the Jelasic Family Trust.
5.That within 14 days the husband will pay to the wife’s legal representatives trust account the sum of $150,000 on account of the wife’s legal costs and disbursements and the husband is permitted to sell the Digital Currency held on trust by Ms D Jelasic for his benefit to meet the payment of $150,000.
6.That pending further order the Husband pay, or cause to be paid:
6.1to the Wife, the sum of $254 per week, such sum to be paid into the Wife’s nominated bank account commencing the first Monday following the date of this Order and by no later than 5:00pm each Monday thereafter;
6.2to the wife, or as she may direct, upon sale of the former matrimonial home an additional sum of $1,000 per week by way of rent;
6.3to the supplier of the relevant goods or service as and when they fall due:
6.3.1Registration, insurances, and maintenance for Motor Vehicle 1; and
6.3.2Private health insurance premiums for the Wife at the current level;
6.4to the relevant supplier of good and services all gas, electricity and internet in respect of the wife’s rental property.
7.That pending further order the husband will pay to the wife:
7.1periodic child support for the children as assessed by the Department of Human Services – Child Support;
7.2in respect of the children as and when they fall due as follows:
7.2.1to the Wife the costs of all non-school extracurricular activities the children are enrolled in from time to time provided that both parents have agreed in writing for that expense;
7.2.2to the relevant provider of the insurance, private health insurance premiums for the children at their current rate of cover;
7.2.3to the Wife the costs of medical, dental, orthodontic, hospital, physiotherapy, podiatry, psychiatric or other medical specialist fees or expenses in respect of the children which are not covered by Medicare and/or the children Private Health insurance policy;
7.2.4Apple icloud and Spotify accounts for the children;
7.2.5the children’s individual allowances;
7.2.6children’s lunch orders;
7.2.7children’s clothes and shoes as agreed between the parties in writing;
7.2.8children’s hairdressing expenses; and
7.2.9children’s driving lessons fees up to $500 per child or as otherwise agreed between the parties in writing.
and the husband will reimburse the wife upon the wife providing the husband with electronic copies of an invoice or receipt to her nominated bank account within 7 days.
7.3That the husband will do all acts and things and sign all documents necessary to pay from the R Bank account No. …54 in the name of the Jelasic Family Trust the following:
7.3.1to the children’s school/s (including such private schools as the children are enrolled in from time to time), within 14 days of receipt of accounts or invoices from the school or from the wife, all school fees including but not limited to tuition fees, excursion fees, incidental sporting costs, the costs of all school books, school uniforms and school extra-curricular activities;
7.3.2the wife’s rental bond; and
7.3.3the wife’s removalist and storage costs.
Injunctions
8.That pending further order pursuant to section 114 of the Family Law Act 1975 (Cth) the husband and the wife are hereby restrained by way of injunction from:
8.1drawing down on any loan facility secured by the Mortgage; and
8.2further encumbering the former matrimonial home.
Miscellaneous
9.That pending further order the husband in his capacity as Director of DD Pty Ltd as trustee for the Jelasic Family Trust be and hereby are restrained for making any distribution of:
9.1capital; and/or
9.2income save to the extent necessary to comply with these Orders,
other than in compliance with these orders.
10.That there be no order as to costs."
3.Liberty is granted to the husband to restore the matter on seven days' notice to my Associate upon the issue of his 2022 Notice of Assessment for the court to consider whether or not there should be a further payment from the controlled monies account.
4.All outstanding interlocutory applications are dismissed.
5.Pursuant to Section 65DA(2) and Section 62B, the particulars of the obligations these Orders create and the particulars of the consequences that may follow if a person contravenes these Orders and details of who can assist parties adjust to and comply with an Order are set out in the Fact Sheet attached hereto and these particulars are included in these Orders.
6.These Orders have been amended pursuant to paragraph 10.13 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
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