Warwick & Cutler
[2016] FamCA 934
•4 November 2016
FAMILY COURT OF AUSTRALIA
| WARWICK & CUTLER AND ANOR | [2016] FamCA 934 |
| FAMILY LAW – CHILD SUPPORT - Application for departure orders – Where the orders sought by the husband would result in arrears currently owed being discharged – Where the husband sought orders that the wife be solely responsible for the children’s private school fees and health insurance – Where the Court is not satisfied the requirements of s 116(1)(b)(ii) of the Child Support (Assessment) Act 1989 (Cth) have been met – Application dismissed – Orders staying collection of arrears discharged. FAMILY LAW – PROPERTY SETTLEMENT – Where the parties were in a relationship for approximately twelve years and have two children – Where all items in dispute on the balance sheet but one are considered in the context of s 75(2)(o) – Where the parties agreed for funds provided by the wife’s father to the parties to be re-paid – Whether the Court should consider any further contributions made on behalf of the wife by her father – Where the wife provided a significant direct financial contribution to the acquisition of the parties’ property – Where the Court finds there should be a distribution of the property pool fifty-five per cent in favour of the wife – Where the wife is to have primary care of the parties’ two children – Where the Court is satisfied an additional adjustment of five per cent in favour of the wife is appropriate. |
| Child Support (Assessment) Act 1989 (Cth) ss 116, 117 Family Law Act 1975 (Cth) ss 75(2), 79, |
Bevan & Bevan (2013) FLC 93-545
Bircher & Bircher and Anor [2016] FamCAFC 123
C & C [1998] FamCA 143
Edgehill & Edgehill [2007] FamCA 1102
Harris & Ellis [2011] FamCAFC 90
In the marriage of Gyselman and Gyselman (1992) FLC 92-279
In the marriage ofMee and Ferguson (1986) FLC 91-716
Mayne & Mayne (2011) FLC 93-479
Murphy & Murphy (Child support)[2016] AATA 2001
Omacini & Omacini [2005] FamCA 195
Petruski & Balewa (2013) 49 Fam LR 116
Saberton & Saberton [2013] FamCAFC 89
Seymour & Seymour [2011] FamCAFC 97
Stanford & Stanford (2012) 247 CLR 108
Turner & Turner and Anor (2016) FLC 93-719
Vass & Vass (2015) 53 Fam LR 373
Yewen & Child Support Registrar & Anor [2014] FCCA 2399
| APPLICANT: | Ms Warwick |
| RESPONDENT: | Mr Cutler |
| INTERVENOR: | Mr N Warwick |
| FILE NUMBER: | SYC | 1668 | of | 2013 |
| DATE DELIVERED: | 4 November 2016 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | McClelland J |
| HEARING DATE: | 18 - 20 July 2016 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Schonell SC |
| SOLICITOR FOR THE APPLICANT: | Diana Perla & Associates |
| COUNSEL FOR THE RESPONDENT: | Mr Dura |
| SOLICITOR FOR THE RESPONDENT: | M & K Lawyers |
| COUNSEL FOR THE INTERVENOR: | Mr Williams |
| SOLICITOR FOR THE INTERVENOR: | Karras Partners |
Orders
Child support
The wife’s child support departure application is withdrawn and dismissed.
The husband’s child support departure application is dismissed.
The orders made on 7 March 2016 are discharged.
The wife’s solicitors are to serve the Child Support Registrar with a copy of these Orders within seven (7) days of the date of these Orders.
Property
Within twenty-eight (28) dates of the date of these Orders, the wife is to pay to the husband, or as he may direct in writing, the sum of $638 529.35.
Upon the wife complying with Order (5), the husband is to do all acts and things and sign all documents necessary to transfer to the wife the property situated at and known as D Street, Suburb E, being the whole of the property comprised in Certificate of Title Folio Identifier … (“the D Street property”).
Upon the husband complying with Order (6):
(a)the parties are to do all acts and things and sign all documents to transfer the National Australia Bank mortgage secured over the D Street property into the wife’s sole name; and
(b)the wife is to pay the sum of $1 300 000 to Mr N Warwick pursuant to Order 2.1 of the consent orders made on 18 July 2016.
In the event that the wife fails to comply with Order (5):
(a)Within fourteen (14) days of the wife’s failure to comply, the parties are to do all acts and execute all documents necessary to cause the D Street property to be listed for sale by private treaty.
(b)The sale of the D Street property is to be conducted as follows:
i.The sales agent acting on the sale is to be agreed between the parties and failing agreement, the sales agent is to be appointed by a nominee of the President of the Real Estate Institute (NSW);
ii.The solicitor acting on the sale is to be agreed between the parties and failing agreement, the solicitor is to be appointed by a nominee of the President of the NSW Law Society;
iii.The sale price is to be not less than $3.1 million, or as otherwise agreed in writing between the parties.
(c)Upon completion of the sale of the D Street property, the parties are to do all acts and execute all documents necessary to cause the proceeds of sale to be distributed in the following manner and priority:
i.In payment of the costs associated with the discharge of any loan(s) to the parties from the National Australia Bank secured by mortgage over the D Street property;
ii.In payment of the agent’s fees and commission relating to the sale;
iii.In payment of the legal costs relating to the sale;
iv.In payment of the sum of $1 030 000 to Mr N Warwick in compliance with Order 2.2 of the consent orders made on 18 July 2016;
v.Sixty per cent of the balance to the wife;
vi.The remainder of the balance to the husband.
(d)Pending completion of the sale of the D Street property;
i.The wife is to pay for all council rates, water charges, utility bills, insurances and any outgoings for the D Street property;
ii.The wife is to do all things to comply with all reasonable requests made by the agent for access to the D Street property;
iii.The wife is to comply with any reasonable request to maintain the property in a neat and tidy manner for the marketing of the property.
Within twenty-eight (28) days of the date of these Orders, the parties are to do all acts and things and sign all documents to divide the funds contained in the NAB account ending #... equally between them.
Otherwise, the wife is to retain the following:
(a)German motor vehicle registration number …;
(b)NAB bank account ending #...;
(c)Bankwest account ending #...;
(d)Household contents in the wife’s possession;
(e)The wife’s jewellery;
(f)Her F Accountants UK account; and
(g)Interest in her Sun Super Superannuation Fund.
Otherwise, the husband is to retain the following:
(a)His shares in G Ltd;
(b)Motor vehicle registration number …;
(c)Household contents in the husband’s possession;
(d)The husband’s jewellery and Coin Collection; and
(e)Interest in his Sun Super Superannuation Fund.
Other than as provided for in these Orders, each party shall retain free from any claim from the other party all other property, furniture, furnishings, savings, motor vehicles, superannuation entitlements and other financial resources currently in that party’s name, possession or control as at the date of these Orders and each party shall also indemnify the other party in relation to any liabilities or debts payable by that party as at the date of these Orders and keep such party indemnified from any such claim.
In default of either party doing all acts and things and executing all such documents as are necessary to give effect to these Orders, a Registrar of the Family Court of Australia at Sydney be appointed pursuant to s 106A of the Family Law Act 1975 (Cth) to execute all such documents in the name of the party in default and do all such acts and things necessary to give validity and operation to said Orders.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Warwick & Cutler and Anor has been approved by the Chief Justice pursuant to
s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 1668 of 2013
| Ms Warwick |
Applicant
And
| Mr Cutler |
Respondent
And
| Mr N Warwick |
Intervenor
REASONS FOR JUDGMENT
Introduction
The proceedings before the Court initially involved competing applications by the parties, Ms Warwick (“the wife”) and Mr Cutler (“the husband”), for final property, parenting and child support departure orders. With the assistance of their legal representatives, the parties were able to resolve the competing parenting applications and an issue concerning the repayment of funds provided to the parties by the wife’s father, Mr N Warwick (“the wife’s father”).
Whilst the parenting issues were resolved, the parties remained in dispute regarding the education of their children and, if they were to remain at private schools, who was to be responsible for paying for that education. The husband’s application for child support departure orders, pursuant to the Child Support (Assessment) Act 1989 (Cth) (“the CSA”), primarily related to that issue. Ultimately I have determined that the husband has not satisfied the threshold requirements, set out in in the CSA, for the Court to consider the husband’s application. Nevertheless, as there was an overlap between the issues raised in that application and the matters the Court is required to consider pursuant to s 79, it was necessary to make evidentiary findings as to the alleged existence of an agreement between the parties to send their children to private school.
Even though the parties were able to resolve the issue of the amount payable to the wife’s father, a significant issue remained as to the extent to which the wife’s ability to obtain financial assistance from her father should be considered as a contribution made on her behalf to the matrimonial property pool.
A further issue, of some complexity, was whether the wife had utilised capital to meet the cost of their daughter’s private school education and medical expenses for their son. In circumstances were those expenses were initially met by way of credit card, I have found that there is an artificiality in attempting to determine whether those credit card accounts were, in turn, re-paid by way of capital, income or savings. Moreover, I have determined that the expenditure was not wasteful, capricious or inappropriate and therefore should not result in an additional adjustment in favour of the husband.
Factual Contentions
The husband was born in 1964 and is currently aged 52. The wife was born in 1967 and is currently aged 48.
In 2000 the husband sold a property at H Street, Suburb I (“the Suburb I property”) for approximately $410 000. The husband deposed that the net proceeds of sale were approximately $240 000.
In March 2000 the parties commenced cohabitation.
In August 2000 the parties purchased a property at J Street, Suburb E (“the J Street property”) for $880 000.
The parties contributed approximately $241 000 each to the purchase of the
J Street property, with the husband utilising the proceeds of sale of the Suburb I property and the wife borrowing monies from her father. The parties borrowed the remainder of the purchase price in the form of two mortgages in the sum of approximately $220 000 each, one with a fixed rate of interest and the other with a variable rate. The husband contends that both mortgages were in the joint names of the parties. The wife contends that the fixed rate mortgage was that of the husband and the variable rate mortgage was hers.
In 2001 the parties married.
In March 2001 the wife’s father provided a sum of $211 500 to the parties to pay out the fixed rate mortgage taken out for the J Street property. The wife says that the parties then jointly paid down the remaining variable rate mortgage.
In 2002 the parties’ first child, B (“B”), was born. B is currently aged 13 and in Year 8 at K School.
In March 2003 the wife contends that the parties applied for B to attend the K School in Year 6.
In 2005 the parties’ second child, C (“C”), was born. C is currently aged 11 and in Year 6 at L School.
In January 2010 the wife contends that the parties applied for C to attend L School.
On 19 February 2010 the parties purchased a property at D Street, Suburb E (“the D Street property”) for $2 403 183. The deposit was paid via a loan of $80 000 from the wife’s father, funds from a term deposit and savings. The wife’s father also paid the stamp duty for the purchase in the sum of $117 686 and provided the settlement funds of $1 052 314. The remainder was borrowed from the National Australia Bank.
On 14 July 2010 the parties entered into a Loan Agreement with the wife’s father for the sum of $1 679 428.
In July 2010 the parties sold the J Street property for $1 650 000. From the proceeds of that sale, the wife deposed to placing approximately $200 000 into a mortgage offset account. The remaining proceeds of sale were then said to have been placed into a higher interest savings account for future renovations of the D Street property.
On 14 December 2011, according to the wife’s evidence, the wife deposited the sum of $512 966 from the higher interest savings account into an account in the name of her father.
In April 2012 on the husband’s evidence, or on 15 October 2012 on the wife’s evidence, the parties separated. It was agreed that following separation the parties lived separately under one roof until February 2013 when the husband moved out of the D Street property.
On 30 April 2012 the wife contends that the parties accepted an offer for B to attend at K School for 2014. The husband alleges that he signed the application forms in April 2012 but on the basis that the wife’s father would pay for B’s school fees.
In May 2012 the wife says she authorised her father to deduct the sum of $200 600 from the account containing the remaining proceeds of sale of the
J Street property. The wife says she authorised her father to deduct that sum in repayment of the interest free loan of $240 045 he made to her as part of her share of the deposit for the J Street property.
On 9 October 2012 the wife contends that the husband spoke to L School about registration for Year 5 for C, with the relevant application forms subsequently sent to the husband by the school.
On 24 October 2012 the husband sent an email to L School advising that the parties were potentially moving interstate.
In late 2012 the wife alleges that the husband, without her knowledge, met with M School about C attending that school in Year 5.
In February 2013 the wife says she followed up with L School and signed the necessary forms for C’s attendance at the school in Year 5.
On 28 March 2013 the wife commenced these proceedings by way of an Initiating Application seeking final property and child support departure orders.
In June or July 2013 the wife says she found out the spots for Year 5 in 2015 at L School had been filled.
On 12 August 2013 the wife received a call from L School advising that a spot in Year 4 had opened.
On 16 August 2013 the wife took C to an interview with L School.
On 22 August 2013 the wife says that L School confirmed C’s spot to attend the school for Year 4 in 2014.
On 17 September 2013 the wife filed an Application in a Case in respect of C’s attendance at L School.
On 11 November 2013 the wife’s Application in a Case was heard by Loughnan J. Before his Honour, the wife was represented by counsel and the husband appeared in person. The following orders were made:
1. Within seven days of the date of these Orders the husband do all acts and things and sign all documents to enrol [C] in L School College for the year commencing 2014.
2. In the event that the husband does not comply with Order 1, that The Registrar of This Honourable Court be authorised to sign the Application Form for [C], in place of the Husband.
3. It be NOTED that the wife will take responsibility for payment of the school fees for [C] for the years 2014 to 2016 inclusive.
4. The question of costs of and incidental to the proceedings today are reserved.
On 14 November 2013 the husband wrote to L School indicating that the wife will be responsible for the school fees for C until Year 12 and that all invoices should be directed to the wife.
In January 2014 B commenced Year 6 at K School and C commenced Year 4 at L School.
On 5 June 2014 the wife made an application to the Child Support Agency for a departure from the administrative assessment of child support.
On 26 August 2014 the wife’s application was successful and the administrative assessment of child support was varied.
On 22 January 2015 the husband’s objection to the Child Support Agency’s decision of 26 August 2014 was allowed.
On 3 March 2015 the wife lodged an Application for Review with the Administrative Appeals Tribunal (“the AAT”).
In June 2015 the husband received $363 461.17 from the estate of his late father.
On 27 October 2015 the AAT set aside the decision made on 22 January 2015 and increased the amount of child support to be paid by the husband.
On 3 December 2015 the husband filed an Application in a Case seeking a stay of the collection of arrears and a stay of the collection of any additional child support arising from the decision of the AAT.
On 7 March 2016 I heard the husband’s Application in a Case and in providing my reasons ex tempore, [1] I ordered that:
[1] See Cutler & Warwick and Anor [2016] FamCA 277.
1. The Department of Human Services be restrained until further Order from collecting any child support arrears arising from the decision of the Administrative Appeals Tribunal made on 27 October 2015.
On 11 March 2016 the wife’s father was joined as an intervenor in the proceedings. Most relevantly, the intervenor’s Application in a Case filed 9 March 2016 sought orders making the following declarations:
3. Declaration that the Intervenor has advanced to the applicant and the respondent jointly and/or separately a net sum totalling $1,006,144.00 (“the capital sum”).
4.Declaration that the capital sum was a loan by the Intervenor to the applicant and the respondent jointly and/or separately.
5. Declaration that the Intervenor is owed the capital sum upon any inter-partes transfer or sale of [the D Street property].
6. Declaration that in addition to the capital sum, the Intervenor is entitled to be paid an amount subject to the increase in the value of [the D Street property] as calculated by the terms of the Loan Agreement entered into by the applicant and the respondent on 14 July 2010, such amount being $155,875.00 as at 31 December 2015.
The Hearing
The final hearing was listed for three days commencing on Monday 18 July 2016.
On the first day, the parties and the wife’s father entered into consent orders in relation to his application. The orders in full read:
1. That the Court declares that the Husband and the Wife are joint and severally indebted to [the wife’s father] in the sum of $1,030,000 (the “Settlement Sum”), noting that the sum of $948,514 is the principal sum.
2. That the Settlement Sum is to be repaid to [the wife’s father] on either of the following occurrences, whichever occurs first:
2.1In the event an Order is made for the Wife to retain [the D Street property] (the “property”) as between the Husband and the Wife, upon the transfer of the Husband’s interest in the property to the Wife, the Wife is to repay the Settlement Sum; or
2.2In the event an Order is made for the sale of the property, the Settlement Sum is to be paid from the proceeds of sale upon settlement of the sale of the property prior to the Husband and the Wife each receiving their entitlements pursuant to any further Order made by the Court.
3. That in the event an Order is made for the sale of the property pursuant to Order 2.1, and the Wife fails to repay the Settlement Sum resulting in the property subsequently being listed for sale, the Wife shall bear sole responsibility for payment of any interest of the Settlement Sum then calculated as due and payable to [the wife’s father] until the date of payment of the Settlement Sum.
4. That simultaneous with the parties’ compliance with Order 2.1 or 2.2 above, whichever is applicable, [the wife’s father] shall provide to the parties a duly executed Withdrawal of Caveat in registerable form the effect of which removes the Caveat registered by [the wife’s father] over the title of the property.
5. That upon receipt of the Settlement Sum by [the wife’s father], the Husband and the Wife are released from any and all further obligations and/or liabilities owing to [the wife’s father] pursuant to the Loan Agreement between the Husband and Wife (on the one part) and [the wife’s father] (on the other part) dated 14 July 2010.
6. That upon receipt of the settlement sum by [the wife’s father] the Wife indemnifies the Husband in respect of the loan from [the wife’s father] and releases the Husband from all obligations in respect of the loan.
7. That there be no Order to costs as between [the wife’s father] and the Husband and the Wife.
On the second day of the final hearing, the parties entered into consent orders in relation to the parties’ competing applications for final parenting orders. Under the consent orders, the parties have equal shared parental responsibility for the children, the children live with the wife and spend each alternate weekend and half of each of the school holiday periods with the husband.
Applications
In her Further Amended Initiating Application filed on 22 December 2015, the wife sought the following orders:
[Property]
1. Within 28 days of the date of these Orders, the husband do all acts and things and sign all documents to transfer to the wife, the property at [D Street Suburb E] or fully described as folio identifier … (“the property”).
2. Upon the husband complying with Order 1 the wife shall:
a. Pay to the husband the sum of $600,000.
b. Do all acts and things and sign all documents to discharge mortgage number … to the National Australia Bank, registered over the property.
c. Do all acts and things and sign all documents to discharge the loan by the parties from [Mr N Warwick].
3. That except as provided herein the wife be solely entitled to and the husband has not interest in:
a. Any motor vehicles in her possession;
b. Any jewellery and paintings in her possession;
c. Any furniture and household effects in her possession;
d. Money in bank accounts in her name including the BankWest bank account and NAB bank account;
e. Her UK … saving fund in her name;
f. The Bankwest account held in trust for the parties by [Mr N Warwick];
g. All other assets real and personal, financial resources or superannuation entitlements in her possession, name or ownership.
4. That except as provided herein the husband be solely entitled to and the wife has no interest in:
a. Any motor vehicle in his possession;
b. Any jewellery and paintings in his possession;
c. The coin collection in his possession;
d. His Sydney Football Stadium membership;
e. Money in bank accounts in his name;
f. All other assets real and personal, financial resources or superannuation entitlement in his possession, name or ownership.
5.That in the event that either party refuses or neglects a normal order to exercise any deed or instrument necessary to give effect to all or any of the Orders made herein, the Registrar of the Family Court shall be appointed pursuant to 106A of the Family Law Act, execute such deed or instrument and do all acts and things to give validty and operation to the said deed or instrument.
6. That the husband pay the wife’s cost of any incidental to these proceedings.
Child Support
7. Pursuant to 116 and 118 of the Child Support Assessment Act, that in addition to any child support payable by the husband to the wife pursuant to any assessment issue by the child support agency the husband will pay as follows:
a. One half of all schooling cost involved in the children attending private school for:
i. [B] from 2014 (year 6) at the [K School]; and
ii. [C] from 2017 (year 7) at [L School], together with one half of all other school requirements such as uniforms, books, computers, compulsory technology and any other activities required by the school and billed by the school.
b. One half of private health insurance for the children at the highest level of cover.
c. One half of the cost of any orthodontic, medical, optical, chemist, dental and all other health expenses for the children unable to be recovered from Medicare or the children’s private health insurer and if paid by the wife payment to be made to the wife by the husband within 14 days of receipt of accounts, receipts or invoices in respect of such expenses.
d. One half of the cost of all extra-curricular activities together with equipment and uniforms required, tutoring and academic therapy attend payable directly to the provider and if paid by the wife payment to the wife within 14 days of receipt of accounts, receipts or invoices in respect of such activity.
In a Case Outline document filed on 14 July 2016, the husband sought the following orders:
Property
1. That within 14 days the Husband and the Wife do all acts and execute all documents necessary to cause the property situated at and known as [D Street, Suburb E] in the State of New South Wales, being the whole of the property comprised in Certificate of Title Folio Identifier … (“the [Suburb E] property”) to be listed for sale by private treaty.
2. That the sale of the [Suburb E] property be conducted as follows:
2.1 The sales agent acting on the sale of the property be as agreed between the Husband and the Wife and, failing agreement, that the sales agent be appointed by a nominee of the President of the Real Estate Institute (NSW);
2.2 The solicitor acting on the sale be as agreed between the Husband and the Wife and failing agreement, that the solicitor acting on the sale be appointed by a nominee of the President of the NSW Law Society; and
2.3 The sales price be as agreed between the parties and, failing agreement that it be determined by a nominee of the Australian Institute of Valuers.
3. That upon completion of the sale of the [Suburb E] property, the Husband and Wife do all acts and execute all documents necessary to cause the proceeds of sale to be distributed in the following manner and priority:
3.1 In payment of the costs associated with the discharge of any loan(s) from the parties to the National Australia Bank secured by mortgage over the property;
3.2 In payment of the agent’s fees and commission relating to the sale of the [Suburb E] property;
3.3 In payment of the legal costs relating to the sale of the [Suburb E] property;
3.4 In payment of the sum of $948,514 to [Mr N Warwick], the Second Respondent in these proceedings in full and final discharge of the debt due and owing to him by the Husband and Wife;
3.5 In payment of the balance:
3.5.1 In payment of 50% to the Husband;
3.5.2 In payment of $4,650 to the Husband (50% of the costs of the single expert family report from [Ms O]);
3.5.3 In payment of $412.50 to the Husband (50% of the costs of the updated single expert [Suburb E] property valuation from Valuations NSW);
3.5.4 In payment of the balance to the Wife.
4. That pending the completion of the sale of the [Suburb E] property:
4.1 The Wife pay for all Council rates, water charges, utility bills, insurances, and any and all outgoings for the [Suburb E] property.
4.2 That the Wife do all things to comply with all reasonable requests made by the agent for access to the [Suburb E] property.
4.3 That the Wife comply with any reasonable request to maintain the property in a neat and tidy manner for the marketing of the property.
5. That within 7 days the Husband and the Wife do all things and sign all documents necessary to:
5.1 Transfer the funds in the NAB offset account, account number … (the “Offset Account”), into the NAB mortgage, account number … (“mortgage”) to pay out the mortgage in full;
5.2 Do all things and sign all documents necessary to discharge the mortgage;
5.3 Divide any surplus funds in the Offset Account equally between them; and
5.4 Contribute equally to any costs associated with the discharge of the mortgage.
6. That the Wife indemnify the Husband against all or any actions, claims or demands as may be made by the Wife’s father [Mr N Warwick] concerning the recovery of any funds advanced by him to the parties and any amounts found to be owing to him by the parties.
7. That except as otherwise provided herein, the Husband be solely entitled, to the exclusion of the Wife to all other property, both real and personal, in his ownership, possession and/or control, including but not limited to:
7.1 His superannuation entitlements;
7.2 All monies held in bank accounts;
7.3 All shares held in his name;
7.4 His jewellery and personalty.
8. That except as otherwise provided herein, the Wife be solely entitled to the exclusion of the Husband, to all other property, both real and personal, in her ownership, possession and/or control, including but not limited to:
8.1 Her superannuation entitlements;
8.2 All monies held in bank accounts;
8.3 All shares held in her name;
8.4 Her jewellery and personalty.
9. That the Husband indemnify and keep indemnified the Wife in relation to all liabilities and debts in his name, including but not limited to, any credit card liabilities and income tax liabilities.
10. That the Wife indemnify and keep indemnified the Husband in relation to all liabilities and debts in her name, including but not limited to, any credit card liabilities and income tax liabilities.
11. That the Court allocate as required by Section 90MT (subsection 4) of the Family Law Act 1975 (Cth) a base amount of $20,288 of the Wife’s superannuation to the Husband out of the Wife’s interest in the SunSuper Superannuation Fund, Member account number … (the "Fund").
12. That in accordance with Section 90MT(1)(a) of the Family Law Act 1975 (Cth) that whenever a splittable payment becomes payable, the Trustees of SunSuper Superannuation Fund (the "Trustee") of the Fund, shall:
12.1 Create an entitlement for the Husband to be paid the amount calculated in accordance with part 6 of the Family Law (Superannuation) Regulations 2001 using the base amount referred to in Order 11 of these Orders; and
12.2 Make a corresponding reduction in the entitlement the Wife would have had in the Fund but for this Order.
13. That the Trustee do all such acts and things and sign all documents as may be necessary to:
13.1 Calculate in accordance with the requirements of the Family Law Act 1975 (Cth) and the Family Law (Superannuation) Regulations 2001, the entitlement for the Husband created by Orders 11 and 12 of these Orders; and
13.2 Pay the entitlement whenever the Trustee makes a splittable payment out of the Wife’s interest in the Fund.
14. That the Trustee do all acts and things and sign all such documents as may be necessary so that in accordance with the obligations set out under the Family Law Act 1975 (Cth) and the Family Law (Superannuation) Regulations 2001, the Trustee can calculate the entitlement of and make payment to the Husband in accordance with Orders 12 and 13 herein.
15. That the Wife be and is hereby restrained from executing a death benefit nomination in favour of any person of doing any other act or thing which would render any part of this interest in the Fund a “non-splittable payment” within the meaning of regulation 12 and 13 of the Family Law (Superannuation) Regulations 2001 until the happening of any of:
15.1 The transfer of “rolling over” into the separate account in the name of the Husband in the Fund of the payment split created by these orders;
15.2 The transfer or “rolling over” into another superannuation fund of the payment split created by these orders;
15.3 The Husband satisfying a condition of release and being paid the payment split created by these orders; or
15.4 The Husband executing a waiver of rights within the meaning of Section 90MZA of the Family Law Act 1975 (Cth) in relation to the payment split created by these orders.
and the Trustee agrees to give effect to this order.
16. That Orders 11 to 15 have effect from the operative time, being four business days after the date of service of a sealed copy of the Orders upon the Trustee.
That having been accorded procedural fairness in relation to the making of these Orders, the Orders are binding on the Trustee of the Fund.
17. That in the event that either party refuses or neglects to execute any Deed, Instrument or document necessary to give effect to any of these Orders, then a Registrar of the Court shall be appointed pursuant to Section 106A of the Family Law Act 1975 to execute such Deed, Instrument or document in the name of the defaulting party, and further appoint such Registrar to do all acts and things necessary to give validity and operation to the Deed, Instrument or document at the cost of the non compliant party.
Child Support Departure
19. That pursuant to s.117(2)(b)(ii) of the Child Support (Assessment) Act 1989 there be a departure from the Child Support Assessments in relation to the children of the relationship, [B] born … 2002 and [C] born … 2005 for the following periods:
19.1 1 January to 31 December 2014;
19.2 1 January to 31 December 2015; and
19.3 1 January to 31 December 2016
such that the Husband’s annual rate of child support be set at the following rates:
19.4 the sum of $391 per year for the period 1 January 2014 to 28 March 2014;
19.5 the sum of $1,876 per year for the period 29 March 2014 to 30 April 2014;
19.6 the sum of $3,192 per year for the period 1 May 2014 to 30 June 2014;
19.7 the sum of $12,742 per year for the period 1 July 2014 to 11 July 2014;
19.8 the sum of $5,422 per year from the period 11 July 2014 to 18 July 2014;
19.9 the sum of $5,476 per year from the period 18 July 2014 to 31 August 2014;
19.10 the sum of $448 per year for the period 1 September 2014 to 31 October 2015;
19.11 the sum of $9,812 per year for the period 1 November 2015 to 31 December 2015; and
19.12 the sum of $9,812 per year for the period 1 January 2016 to 31 December 2016
the effect of which results in the arrears of child support owed by the Husband pursuant to the decision of the Administrative Appeals Tribunal dated 27 October 2015 being discharged.
20. That the Department of Human Services (Child Support) be restrained from collecting any arrears of child support payable by the Husband arising from the decision of the Administrative Appeals Tribunal on 27 October 2015.
21. That the sum of $310 per week for the period 24 March 2016 to the date of these Orders be credited towards the Husband’s child support liability at Order 19 above and that the Department of Human Services (Child Support) be requested to do all acts and things necessary to implement this Order.
22. That pursuant to s.117(2)(b)(ii) of the Child Support (Assessment) Act 1989 the Husband’s annual rate of Child Support Assessment in relation to the children of the relationship, [B] born … 2002 and [C] born … 2005 for the period 1 January 2017 until the happening of a child support terminating event (as that term is defined in s.12 of the Act and amended by s.151 of the Act) as follows:
22.1 by way of periodic child support, the parties pay child support as assessed by an administrative assessment of child support issued by the Department of Human Services (Child Support) from time to time;
23. That the Wife be solely responsible for, and pay or cause to be paid the following:
23.1 one hundred per cent (100%) of all educational expenses for the children at a private school with such educational expenses to include, but not be limited to:
A. Tuition fees;
B. compulsory school excursions;
C. non-compulsory school excursions provided that each parent has provided written consent to such expense in advance of the excursion;
D. extra-curricular activities;
E. private tutoring fees;
F. school uniforms and footwear;
G. books and stationery; and
H. other compulsory school equipment or programs as required by the children or either of them.
23.2.One hundred per cent (100%) of the costs of a private health insurance policy which includes the children as members of the policy.
24. That the Wife be restrained from seeking any increase in the administrative rate of child support payable by the Husband from time to time on the basis of the education expenses payable by the Wife pursuant to these Orders.
25. That the Wife pay the Husband’s cost of and incidental to these proceedings.
On the second day of the final hearing, senior counsel for the wife made an oral application to dismiss the parties’ competing child support departure applications on the basis that the applications did not satisfy the requirements of s 116 of the CSA. Having heard submissions from both parties, I determined that it would have been premature to strike out the applications and the oral application was therefore dismissed.
Evidence and Witnesses
The wife relied upon the following:
a)Further Amended Initiating Application filed 22 December 2015;
b)Financial Statement filed 24 June 2016;
c)Affidavits of the wife filed 11 December 2015, 3 March 2016 and 24 June 2016; and
d)Affidavit of Mr P (the wife’s partner) filed 11 December 2015.
The husband relied upon the following:
a)Further Amended Response to Initiating Application filed 3 December 2015;
b)Financial Statement filed 27 June 2016;
c)Affidavits of the husband filed 14 December 2015 and 7 March 2016; and
d)Transcript of the hearing before Loughnan J on 11 November 2013.
The parties were cross-examined. No other witnesses were required for cross-examination.
Child Support Departure Applications
The parties each initially sought orders for a departure from the administrative assessments of child support in relation to the children of the marriage. The wife did not press her application but submitted that the Court should not consider the husband’s application as it did not satisfy the requirements of sub-s 116(1)(b)(ii) of the CSA. The husband’s application was made pursuant to sub-s 117(2)(c)(ia) of the CSA.[2] However, in the husband’s proposed orders, reference was also made to sub-s 117(2)(b)(ii).
[2] Exhibit 13, page 9.
The administrative assessment from which a departure order is sought is set out in the decision of the AAT dated 27 October 2015. The AAT decision set aside a decision of an officer of the Department of Human Services – Child Support (“the Department”) and substituted the following decision to:
· vary [the husband’s] adjusted taxable income to $70,000 from 5 June to 30 September 2014, $0 from 1 October to 23 November 2014, $63,000 from 24 November 2014 to 23 February 2015 and $109,000 from 24 February to 16 July 2015 and $113,000 from 17 July 2015 to 30 September 2016;
· vary [the wife’s] adjusted taxable income to $115,605 from 13 November 2014 to 28 February 2015, $0 from 1 March to 27 May 2015 and 20 July to 13 September 2015, $110,000 from 26 May to 19 July 2015 and $102,000 from 14 September 2015 to 30 September 2016; and
· increase the annual rate of child support payable by $13,494 from one January to 31 December 2014, $16,700 from 1 January to 31 December 2015 and $16,000 from 1 January to 31 December 2016.
There are limitations on the circumstances in which a party can apply to a court for a departure order. Those limitations must be seen in the context of significant legislative reforms to the child support scheme in recent years.
In that respect, in Harris & Ellis,[3] the Full Court said:
[3] [2011] FamCAFC 90.
23. There have always been limitations on the circumstances in which a party can apply to a court for a departure order. Those limitations were significantly amended by the Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Act 2006 (Cth) (“the Reform Act”).
24. The major difference following the commencement of the amendments made by the Reform Act was the requirement for a party aggrieved by a decision of the Agency to seek a review from the Social Security Appeals Tribunal (“the SSAT”), rather than applying to a court for a departure order. A party aggrieved by a decision of the SSAT may appeal to a court, but the right of appeal is restricted to questions of law: Child Support (Registration and Collection) Act 1988 (Cth) s 89 and s 110B.
In considering the purpose and intent of the Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Act 2006 (Cth) (“the Reform Act”), it is instructive to have regard to the following extract from the Explanatory Memorandum to the Reform Act:[4]
[4] Explanatory Memorandum, Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures Act 2006 (Cth) at page 89.
This Schedule expands the role of the Social Security Appeals Tribunal to include independent review of child support decisions, providing a review mechanism that is inexpensive, fair, informal and quick.
Background
Presently, if a carer or liable parent does not agree with a decision of the Child Support Registrar, he or she may object through the internal objection procedure. If the carer or liable parent is still dissatisfied with the decision, he or she must generally appeal to a court with Family Law jurisdiction. A parent who appeals to a court must bring their action against the other parent in an adversarial process. The child support legislation makes the carer and the liable parent, rather than the Child Support Registrar, parties to the appeal. This is perceived to be an unfair aspect of the child support system. The court process can be expensive and time consuming, as well as amplifying animosity between separated parents. Consequently, external review of the Registrar’s decisions is not often sought.
Schedule 3 introduces review by an independent external body, the Social Security Appeals Tribunal (SSAT), of child support decisions which have been reviewed under the Child Support Agency’s internal review procedure. The purpose of introducing this is to provide external review mechanism which is faster, less formal and less expensive than court action, while still providing just and fair outcomes. The Registrar is the primary respondent to an application for appeal, although the other parent is also a party (with the exception of limited circumstances in which the outcome cannot affect the other parent). It is an inquisitorial, rather than an adversarial, process, which may assist in reducing tensions between separated parents when resolving child support issues. Most of the current limited AAT appeals, relating to decisions primarily affecting only one parent, will now be performed by the SSAT.
Parents, and certain other people affected by a child support decision, may appeal a decision of the SSAT to a court on a question of law…
In Yewen & Child Support Registrar & Anor,[5] Judge Brown considered this legislative history and said:
[5] [2014] FCCA 2399.
76. The rationale for the exclusion of the court, from the process of review, is readily explicable in light of the objects as outlined in section 4 of the Assessment Act. Court proceedings, regarding child support assessments, should be the exception rather than the rule. This is particularly so, since the inauguration of the external level of appeal, in child support matters, provided by the SSAT.
77. The instigation of appeals to SSAT, in child support matters, was part of a wide ranging reform of the child support system inaugurated by the Child Support Legislation Amendment (Reform of the Child Support Scheme – New Formula and Other Measures) Act 2006 (the “Reform Act”). The SSAT is intended to be a specialist tribunal, dealing with child support matters, in preference to a court such as this one.
….
79. The important matter to note, in my view, is that departure applications are to be heard by the court in what are categorised as being limited circumstances, given the desirability of such issues being determined in a manner characterised as being less adversarial, whilst, at the same time, remaining fair.
I respectfully agree with the analysis of the legislative history by Judge Brown and, in particular, his Honour’s conclusion that court proceedings regarding administrative child support assessments should be the exception rather than the rule. The fact that, since the enactment of the Tribunals Amalgamation Act 2015 (Cth), this Court no longer has jurisdiction to hear appeals on questions of law in respect to child support strengthens his Honour’s analysis.
In the context of that legislative history, the CSA sets out several threshold issues which are to be determined prior to the Court considering and subsequently making departure orders.
In Saberton & Saberton, [6] the Full Court confirmed that, before considering an application under s 117, the Court must be satisfied of the matters set out in s 116(1). Section 116 relevantly provides:
[6] [2013] FamCAFC 89 at [12].
(1) A liable parent or a carer entitled to child support may, in respect of an administrative assessment of child support for a child, apply to a court having jurisdiction under this Act for an order under this Division in relation to the child in the special circumstances of the case if:
(b) both of the following apply:
(i)the liable parent or carer entitled to child support is a party to an application pending in a court having jurisdiction under this Act;
(ii)the court is satisfied that it would be in the interest of the liable parent and the carer entitled to child support for the court to consider whether an order should be made under this Division in relation to the child in the special circumstances of the case; or
(c) in the case of a liable parent—the administrative assessment of child support payable by the liable parent for the child is made under subsection 66(1).
(Emphasis added)
If the requirements of s 116(1) are satisfied, the Court is then required to consider and be satisfied of the matters set out in s 117 before making a departure order. Section 117 sets out a three step approach which has been described by the Full Court in the following terms:[7]
[7] In the marriage of Gyselman and Gyselman (1992) FLC 92-279 at 79,064 (“Gyselman”).
The structure of that section is that s 117(1)(b) identifies concisely the matters about which the Court must be satisfied and those components are then expanded in sub-sections (2) to (9). Section 117(1)(b) identifies a clear three step process:
1. Whether one or more grounds of departure in s 117(2) is established.
If so:
2. Whether it is "just and equitable" within the meaning of s 117(4) to make a particular order.
3. Whether it is "otherwise proper" within the meaning of s 117(5) to make a particular order.It is clear from the careful way in which s 117 has been structured that the Court must address each of those three separate issues.
The Full Court further noted:[8]
[8] Ibid at 79,065.
Section 117(2) sets out the grounds for departure from administrative assessment. Each of those grounds is prefaced by the words, "in the special circumstances of the case". Whilst it is not possible to define with precision the meaning of that term, as a generality, it is intended to emphasize that the facts of the case must establish something which is special or out of the ordinary. That is, the intention of the Legislature is that the Court will not interfere with the administrative formula result in the ordinary run of cases. In Savery's case (p 77,897), Kay J, adopting the view in Philippe and Philippe (1978) FLC 90-433 at p 77,202 in a different context, said that "special circumstances" were "facts peculiar to the particular case which set it apart from other cases". The approach to the interpretation and application of the particular grounds in s 117(2) must be guided by that qualification.
In Turner & Turner and Anor,[9] the Full Court confirmed that “[w]hilst the provisions of the legislation have been altered since 1993, those principles still hold good”.
[9] (2016) FLC 93-719 at [108].
In terms of the legislative requirements set out in s 116 of the CSA, it is clear that the liable parent (in this case the husband) and also the carer (in this case the wife) are parties to an application in a court having jurisdiction under the CSA and accordingly, the requirements of sub-s 116(1)(b)(i) are satisfied.
It is, however, also necessary for the husband to satisfy the Court of the matters set out in sub-s 116(1)(b)(ii). That is, the Court must be satisfied that it is in the interests of both the liable parent (the husband) and the carer entitled to child support (the wife) for the Court to consider whether a departure order should be made in the special circumstances of the case.
In that respect, in Seymour & Seymour,[10] Strickland J said:
[10] [2011] FamCAFC 97 at [84].
...there is a second prerequisite in s 116(1)(b), and that is the requirement in sub-paragraph (ii) that “the court is satisfied that it would be in the interests of the liable parent and the carer entitled to child support for the court to consider whether an order should be made under this Division in relation to the child in the special circumstances of the case.” The difficulty in this case is that it is not apparent that the Federal Magistrate turned his mind to this requirement let alone found that he was so satisfied. Accordingly, it cannot be said that s 116(1)(b) has been satisfied in its entirety, and thus the Federal Magistrate did not have jurisdiction to hear and determine the application for that reason.
The husband’s submissions in respect to his application for child support departure orders are set out at pages 8 to 10 of a Summary of Argument filed on his behalf (Exhibit 13). That document does not address the criteria set out in sub-s 116(1)(b)(ii). Specifically, the Court was not addressed as to why consideration of the husband’s application would be in the interests of both parties.
Paragraphs 9 and 10 of the Summary of Argument document appears to set out what the husband asserts are “the special circumstances of the case”. Those special circumstances were said to be:
10. The current assessment takes into consideration a level of income attributed to the Husband of amounts not earned by him during the stated periods and school fees in relation to [B] for her attendance at [K School] in circumstances where he only provided his consent to her enrolment on the understanding an assurance that the Wife’s Father would be responsible for the payment of her fees, i.e. that the Husband would not have a liability.
It can reasonably be inferred from this submission that the husband also submits that it would be in his interests for the Court to consider his application for orders pursuant to s 117 of the CSA. However, there has been no such submission presented by the husband in respect to why it is in the interests of the wife, as the carer, for the Court to consider his application.
As noted, the wife did not press her application for orders pursuant to ss 116 and 118 of the CSA. It was submitted on her behalf that it would be contrary to her interests for the Court to consider the husband’s application for the following reasons:
·The AAT has made a determination in respect to the husband’s past and ongoing child support obligations until 31 December 2016.
·The husband has had the opportunity to appeal that decision on a point of law but has elected not to do so.
·The husband’s application also seeks an injunctive order to restrain the wife from seeking any increase of child support payable by the husband in the future on the basis of her payment of the children’s education.
Noting those contentions of the wife, in the absence of satisfactory evidence or submissions made on the behalf of the husband as to why it would be in the interests of both of the parties for the Court to consider the husband’s application, I am not satisfied that the preconditions set out in sub-s 116(1)(b)(ii) of the CSA have been met.
In those circumstances the Court does not have the jurisdiction to hear and determine the husband’s application pursuant to sub-ss 117(2)(b)(ii) and 117(2)(c)(ia) of the CSA. I will therefore dismiss the husband’s application for child support departure orders.
As the circumstances referred to by the husband are relevant to my consideration of the parties’ competing applications pursuant to s 79 of the FLA, it is convenient to consider the husband’s submission “that special circumstances exist in this case to which section 117(2)(c)(ia) applies”.
Sub-section 117(2)(c)(ia) of the CSA relevantly provides:
(2) For the purposes of subparagraph (1)(b)(i), the grounds for departure are as follows:
…
(c) that, in the special circumstances of the case, application in relation to the child of the provisions of this 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 liable parent for the child:
…
(ia) because of the income, property and financial resources of either parent;…
In paragraph 10 of the husband’s Summary of Argument, it was submitted that the relevant special circumstances include:
a)the fact that the current administrative child support assessment “takes into consideration a level of income attributed to the Husband of amounts not earned by him during the stated periods”; and
b)that the husband only agreed for B to attend K School “on the understanding and assurance that the Wife’s Father would be responsible for the payment of her fees”.
Dealing with the first contention, it is noted that the assessment varied the husband’s adjusted taxable income in respect to the period subsequent to 5 June 2014. The husband’s evidence regarding his income for the financial year ended 30 June 2014 was particularly unsatisfactory.
The husband established a company called Q Pty Ltd to provide financial services to a sports organisation (“the sports organisation”). The husband gave evidence that an amount of $8000 which was paid by the sports organisation to an account in the name of the parties’ son, C, on 19 February 2014 was in respect to “capital” and not income. Specifically the husband stated that the amount was paid in respect to property being “a computer disc of all files relating to the [sports organisation]”. The sports organisation was the husband’s previous employer. The husband’s evidence was that the computer discs included documentation disclosing the existence of a bank account containing $1.3 million.
The husband effectively contends that his act of taking the confidential information without authority from his employer and retaining that information, gave him legal title to that property which he was able to then sell. I do not accept that to be the case.
Moreover, the husband’s evidence that the sum of $8000 was paid into C’s bank account by mistake is inherently implausible. I note that the husband’s evidence in that respect was as follows:
Q. Why then does it go into [C’s] account?
A. Complete accident.
Q. Complete accident. I see. Well, it could only have gone into C’s account because you provided a direction to the [sports organisation] to pay it there. Do you agree with that?
A. I do. [11]
[11] Transcript 20 July 2016, page 84.
In those circumstances, I find that the amount of $8000 paid by the sports organisation into C’s bank account was payment for services provided by the husband and, as such, should have been disclosed by the husband to the Department.
Further, the husband failed to declare, in his company’s taxation return for the financial year ended 30 June 2014, an amount that he had received on 13 June 2014 in the sum of $13 860. The husband’s evidence in that respect was that that amount was “prepaid income” for the following financial year.[12] The husband’s evidence in that respect is also instructive:
[12] Transcript 19 July 2016, page 75.
Q. And you will be able to dig out, given your years of experience as a [professional], and having [consulted in taxation], a ruling that would permit you to bring to account in the future year income received in the year prior. You will be able to produce us with a ruling from the ATO to that effect, Sir?
A. Look, how long are we here for?
Q. Would you be able to produce a ruling to that effect?
A. I’m sure I would be able to find something along those lines.
Q. Right. Good. We will see that tomorrow. Because what I suggest you sir?
A. I’m sorry. I won’t have time for that.
Q. What I suggest to you – I beg your pardon?
A. I’m not sure where I should be going to be searching through records. I will see what I can find.
Q. You see, sir, what I suggest to you is that you prepared these financial returns – this company income tax return with the sole purpose of frustrating any application for child support, including misleading the ATO?
A. Absolutely not. [13]
[13] Transcript 19 July 2016, page 76.
No such ruling from the ATO was produced by the husband. In those circumstances I find that, excluding the component for GST, the amount of $13 860 received by the husband on or about 13 June 2014 should have, but was not, disclosed by the husband to the Department as income received by him in the period prior to 30 June 2014.
As result of the husband’s non-disclosure of the amounts of $8000 and $13 860 (less GST) to the Department, I am unable to make a determination as to whether the Department of Human Services’ assessment of the husband’s income in the period from 5 June 2014 until 30 September 2014 was overstated, as is alleged by the husband.
In light of that non-disclosure by the husband, I am not prepared to make any findings regarding the husband’s income in respect to the specific periods that formed the basis of the Department’s assessment in the period subsequent to 5 June 2014. In making that determination I note that there is an absence of primary documentation establishing what the husband’s income was during those specific periods that are set out in the husband’s proposed order 19.
Although not referred to in the husband’s Summary of Argument, it appears that the second contention of the husband (being that he only agreed for the parties’ daughter, B to attend K School “on the understanding and assurance that the Wife’s Father would be responsible for the payment of her school fees”) relates to s 117(2)(b)(ii) of the CSA. This provision is referred to by the husband in his proposed orders. Relevantly, that section is as follows:
(2) For the purposes of subparagraph (1)(b)(i), the grounds for departure are as follows:
…
(b) that, in the special circumstances of the case, the costs of maintaining the child are significantly affected:
…
(ii) because the child is being cared for, educated or trained in the manner that was expected by his or her parents;…
Again, even if I had been satisfied that the threshold requirements of s 116(1) had been satisfied, I would not have been satisfied that a child support departure order should be made on the basis of s 117(2)(b)(ii). This is because:
1.I am satisfied that the parties had expected and made arrangements for B to be educated within the private school education system; and
2.I am not satisfied that the husband’s reasons for objecting to having to contribute to the cost of B’s private school education constitutes a special circumstance warranting the making of a child support departure order.
The husband’s Summary of Argument states that “to an extent” the husband does not deny that the parties had the intention of educating their children within the private school education system. The husband, however, asserts that:
·In April 2012 the parties had a conversation wherein the wife assured the husband that the wife’s father would meet the fees for K School.
·The husband had made known to each of the private schools attended by the children that he did not have the capacity to meet and/or contribute to the fees for either of the children.
·The husband had made known to the wife that he did not have the capacity to meet and/or contribute to the fees for either of the children prior to the children attending their respective private schools in 2014.
The father’s assertion that, in April 2012, the parties had a conversation wherein the wife assured the husband that the wife’s father would meet the fees for K School is disputed by the wife. I will subsequently discuss my reasons for preferring the wife’s evidence, over that of the husband’s, in respect to that matter.
Before doing so, it is of note that any such conversation, that the husband alleges occurred in April 2012, post-dates the formation of the parties’ joint expectation that the children would attend private school. This is confirmed by the following:
·On 26 March 2003 the parties signed an application for B to attend K School and indicated that B was to attend K School until 2020.[14]
[14] Wife’s affidavit filed 3 March 2016 at Annexure “I”.
·By letter dated 6 August 2003 K School advised the parties that:
As [the wife] is an Old Girl of the school, we are able to add your daughter’s name to the list of girls to be offered a place to commence in our 2014 Grade 6.[15]
[15] Ibid at Annexure “J”.
·In 2010 the husband completed an application for B to attend R School.[16]
[16] Ibid at Annexure “K”.
The husband’s evidence in respect to the enrolment of B at K School is inconsistent with Annexure “N” to the wife’s affidavit filed 3 March 2016. The husband’s evidence to that effect is set out in his affidavit filed 14 December 2015 as follows:
119. [The wife] submitted the [K School] application for [B] to the school in about April 2012 and withdrew $6000 from our joint account to pay for the fees associated with the application. [The wife] withdrew this money without my prior knowledge. To the best of my knowledge, this $6000 application fee was credited towards [B’s] 2014 school fees liability.
Contrary to the husband’s assertion the document accepting the offer was signed by both of the parties. Further, the document, on its face, refers to an amount of $6000 being enclosed as an enrolment fee. The acceptance of offer for B to attend K School, which was dated 30 April 2012, read:
We accept the offer for our daughter [B] to enter [K School] at commencement of 1st term 2014 (requesting 1st term 2013) and enclose an amount of $6000 as a non-refundable enrolment fee.
We undertake to pay such school fees as may be applicable from time to time.
We confirm we have read the Prospectus and we agree jointly and severally to accept the conditions contained in the attached Conditions of Enrolment.[17]
[17] Ibid at Annexure “N”.
(Emphasis added)
The husband asserted that he only signed the document as a result of an assurance that the wife’s father would pay for B’s school fees. Specifically, at paragraph 118 of his affidavit filed 14 December 2015, the husband set out the following alleged conversation between himself and the wife in April 2012:
[The wife]: “Can you sign the [K School] application for [B]?”
Me: “On the basis that your dad pays the fees, I’ll sign. Otherwise, we can’t afford it and I won’t sign it”.
The husband’s evidence does not include the wife’s response to that asserted precondition. Accordingly, even taken at its highest, the husband’s evidence in respect to this issue does not establish that the wife provided him with an assurance that her father would pay B’s school fees.
During his oral evidence, the husband also alleged that he always had been of the understanding that the wife’s father would pay for B’s education and that he “had that understanding from [B’s] age of two, where he [the mother’s father] communicated that to me”.
No explanation was provided as to why the husband’s assertion was not set out in his affidavit material. The failure to do so prevented the wife presenting evidence in rebuttal of that assertion. Further the contention was not put to the wife in cross examination. The failure to present that evidence prior to the hearing and to cross examine the wife on the matter suggests recent invention on the part of the husband, during the course of oral evidence, of his alleged understanding.
Finally, in respect to the question of both of the children’s education expenses, I note that, in proceedings before Loughnan J on 11 November 2013, the husband stated:
And if I may disclose that way back when [C] was born [2005], I always said that “you pay [B’s] school fees to [K School], and I will pay for the [C] to [M School].”
There was no assertion on that occasion that the wife’s father would pay for B’s education.
In the circumstances I prefer the evidence of the wife that there was no such assurance provided by her, or her father, that her father would meet the cost of B’s school fees.
The fact that the husband no longer wishes for the children to be educated within the private school system is not, in itself, a ground for the Court making a child support departure order. In Murphy & Murphy (Child support)[18] the AAT referred to the Full Court’s decision in In the marriage of Mee and Ferguson[19] and reiterated that the test set out in s 117(2)(b)(ii) goes to “past expectation”, not present desire (or, I would add, lack of desire), for the children to attend private schools.
[18] [2016] AATA 2001 at [16].
[19] In the marriage of Mee & Ferguson (1986) FLC 91-716 at 75,196.
In In the marriage ofMee and Ferguson (supra), the Full Court, considering the then equivalent to s 66J(2)(a)(ii) of the FLA, said: [20]
[20] Ibid at 75,200.
Where a non-custodian has agreed to the child attending [a private school] that person is liable to contribute to the fees involved so long as and to the extent that he or she has a reasonable financial capacity to continue to do so.
Accordingly, the question becomes whether the husband has a reasonable financial capacity to meet B’s private school fees. In that respect I note that the husband’s Financial Statement filed 27 June 2016 states that the husband’s average weekly income is $2112 per week and that the husband has funds of $65 000 in a Commonwealth Bank account. I further note that the husband will, pursuant to these orders, receive the sum of approximately $638 000. I therefore find that the husband has a reasonable financial capacity to contribute to B’s private school fees, although I acknowledge that he may have to access capital to do so.
Accordingly, the husband has not established a basis for the Court making a child support departure order on the basis of a ground set out in sub-ss 117(2)(b)(ii) or 117(2)(c)(ia). It is therefore unnecessary to consider the second and third steps referred to in Gyselman.
The decision of the AAT dated 27 October 2015 included a finding at paragraph 71 that “the cost of [C’s eye surgery totalling $2400] was in respect of essential medical treatment and was significant. The cost forms part of C’s proper needs under subsection 117(6) of the [CSA]”.
The argument advanced by the husband for seeking a departure order in respect to that matter is set out in paragraph 13 of the husband’s Summary of Argument. The husband’s argument in respect to medical expenses essentially replicates a submission made by the husband in respect to B’s school fees. That argument is that, in circumstances where the wife used “matrimonial funds” to meet the medical expenses, to impose on the husband the current assessment and refuse to discharge the arrears will result in the husband meeting the costs associated with C’s surgery in their entirety.
Counsel for the husband submitted that “it cannot be said that it is anything other than ‘proper’ to make the order as sought by the husband in this regard so as to do justice as between the parties”. That argument is, with respect, based on a false premise that there will be an equal division of the parties’ property and that the Court will not have regard to the expenses that have been met by the parties in the past and any expenses which will need to be met in the future.
In any event, the husband’s submission appears to be intended to address the second and third steps referred to in Gyselman but fails to address the essential first step, that is, whether one or more grounds of departure in s 117(2) is established in respect to the cost of C’s eye surgery.
Accordingly, the husband has also failed to establish the basis upon which a child support departure order should be made in respect to the cost of C’s eye surgery.
Property: The Law
Subject to s 79(2), s 79(1) of the FLA empowers the Court in property proceedings to “make such order as it considers appropriate”.
Section 79(2) provides that the Court shall not make an order altering the interests of the parties to the matrimonial property unless the Court is satisfied that, “in all the circumstances, it is just and equitable to make the order”.
In exercising its discretion, the Court is required to take into account the matters set out in s 79(4). Section 79(4) is divided into two limbs. The first limb is in respect to those matters set out in paragraphs (a) to (c), which deal with what are commonly known as the “contribution” factors. Contributions can, in turn, be direct or indirect, financial or non-financial contributions to the matrimonial property. The second limb is in respect to those matters set out in paragraphs (d) to (g), which primarily relate to the future needs of each of the parties but can include any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account.
As noted, s 79(4) applies once the Court has determined that it is just and equitable to make an order adjusting the matrimonial property. The section is a legislative guide to assist the Court in considering how its broad discretion should be exercised to make appropriate orders to adjust the matrimonial property. This is to be contrasted, for instance, with s 75(1) which provides that in exercising jurisdiction in respect to spousal maintenance the Court “shall take into account only the matters referred to in subsection (2)”.[21] In other words, s 79(4) sets out a non-exhaustive list of matters to be considered in order to do justice between the parties.[22] Those matters are:
(a) the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(b) the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last‑mentioned property, whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and
(c) the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and
(d) the effect of any proposed order upon the earning capacity of either party to the marriage; and
(e) the matters referred to in subsection 75(2) so far as they are relevant; and
(f) any other order made under this Act affecting a party to the marriage or a child of the marriage; and
(g) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.
[21] Emphasis added.
[22] Marinko & Marinko (1985) FLC 91-609 at 79,944.
In considering those matters relevant to the second limb, s 79(4)(e) requires the Court to have regard to those matters set out in s 75(2) insofar as they may be relevant. Those matters are:
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party’s role as a parent; and
(m) if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
Approach to proceedings under section 79
For reasons which I have set out previously in Stoddard & Glover [2016] FamCA 674 at [79] – [87], I intend to take the following approach to these proceedings:
oAssess whether or not it is just and equitable to make an order, as is required by s 79(2).
oIdentify the parties’ existing legal and equitable interests in property.
oIf it is just and equitable to make an order, undertake an assessment of the parties’ direct and indirect, financial and non-financial, contributions according to s 79(4).
oUndertake a further assessment of each of the parties’ circumstances, including their future by applying s 79(4) including, as required by s 79(4)(e), having regard to those matters set out in s 75(2) insofar as they may be relevant.
oAfter making the above assessments according to ss 79(4) and 75(2), take a “holistic” overview by ensuring that the outcome of the hearing and specifically, any orders for the alteration of property interests are appropriate, just and equitable.
Further, in assessing the parties’ contributions under s 79 of the FLA, I am also guided by Petruski & Balewa (2013) 49 Fam LR 116 where the Full Court said at [49]:
The task of assessing contributions under s 79 of the Act is an holistic one; what is required is to evaluate the extent of the contributions of all types made by each of the parties in the context of their particular relationship (Dickons & Dickons [2012] FamCAFC 154). As was also said by the Full Court in Lovine & Connor [2012] FamCAFC 168 at [40] and [41] such an evaluation “inevitably involves value judgments and matters of impression”, and accordingly it cannot be treated as “a mathematical exercise”.
Is it just and equitable to make an order for the alteration of the parties’ property interests?
Both parties sought an adjustment of their property interests pursuant to s 79 of the FLA. I find that it is just and equitable for the Court to make such an order for the following reasons:
·The parties acquired joint property during the course of their relationship including, most significantly, the parties’ former matrimonial home.
·During the course of their relationship, the parties shared expenses associated with running their household including providing for the care of their children.
·The wife continues to reside in the former matrimonial home with the parties’ two children.
·The wife will now assume a greater proportion of the burden of caring for the parties’ two children.
·The husband no longer resides in the former matrimonial home and wishes to purchase, rather than continue to rent, a property in which to live.
·The parties have agreed to repay loans provided by the wife’s father to assist the parties to acquire the former matrimonial home.
·The parties wish to sever their financial relationship other than to the extent that the husband will have an ongoing responsibility to pay child support in respect to the parties’ two children.
Balance sheet
The High Court in Stanford & Stanford (2012) 247 CLR 108 (“Stanford”) and the Full Court in Bevan & Bevan (2013) FLC 93-545 (“Bevan”) confirmed that the starting point for the Court in any property proceedings is the identification of the legal and equitable interests of the parties in assets, liabilities, superannuation and financial resources as at the date of hearing.
Exhibit 12, which set out the assets, addbacks, liabilities and superannuation as contended by the parties, was as follows:[23]
[23] The parties’ notations have been removed.
| Owner | Description | Wife’s value | Husband’s value | |
| ASSETS | ||||
| 1. | H&W | Property at D Street, Suburb E | $ 3,100,000.00 | $ 3,100,000.00 |
| 2. | H&W | NAB account … #...510 | $ 199,424.00 | $ 199,424.00 |
| 3. | H | CBA account … #...757 | $ 65,000.00 | $ 65,000.00 |
| 4. | H | Shares in G Ltd | $ 1,600.00 | $ 1,600.00 |
| 5. | H | Motor vehicle | $ 27,300.00 | $ 27,300.00 |
| 6. | W | German motor vehicle | $ 20,000.00 | $ 20,000.00 |
| 7. | H | Shares in Q Pty Ltd | NIL | |
| 8. | W | NAB account … #...550 | $ 1,302.00 | $ 1,302.00 |
| 9. | W | Bankwest account #...182 | $ 21,022.00 | $ 21,022.00 |
| 10. | H | Household contents | $ 5,100.00 | $ 5,100.00 |
| 11. | H | Jewellery / Sports Label Coin Collection | $ 541.00 | $ 541.00 |
| 12. | W | Household contents | $ 15,265.00 | $ 15,265.00 |
| 13. | W | Jewellery | $ 12,205.00 | $ 12,205.00 |
| 14. | H | SCG Membership | $ - | $ - |
| 15. | W | F Accountants UK (in AUD) | $ 90.00 | $ 90.00 |
| Total | $ 3,468,849.00 | $ 3,468,849.00 | ||
ADDBACKS | ||||
| 16. | H | [Wife’s] School fees obligation | $ 65,707.52 | |
| 17. | H | [Wife’s] drawings from mortgage | $ 22,600.00 | |
| 18. | W | Husband’s Coins | $ 17,755.00 | |
| 19. | H | Husband’s unexplained inheritance | $ 300,000.00 | |
| 20. | H | Payment by Wife to [Intervenor]… | $ 39,455.00 | |
| Total | $ 317,755.00 | $ 127,762.52 | ||
| LIABILITIES | ||||
| 21. | H&W | NAB #...900 | $ 196,922.00 | $ 196,922.00 |
| 22. | H&W | Loan from [Intervenor] | $ 1,030,000.00 | $ 1,030,000.00 |
| 23. | H | Child Support Arrears | $ 39,953.00 | |
| 24. | H | Income Tax on interest 2015-2016 | $ 1,662.00 | |
| 25. | W | K School | $ 17,138.00 | |
| 26. | W | L School | $ 6,278.00 | |
| 27. | W | Loan Ms S Warwick | ||
| 28. | W | Credit Cards | $ 11,600.00 | |
| Total | $ 1,262,008.00 | $ 1,268,607.00 | ||
| SUPERANNUATION | ||||
| Member | Wife’s value | Husband’s value | ||
| 29. | H | Superannuation | $ 376,092.75 | $ 376,092.75 |
| 30. | W | Superannuation | $ 416,668.00 | $ 416,668.00 |
| Total | $ 792,760.75 | $ 792,760.75 | ||
The wife was not challenged on her evidence that she borrowed her contribution of approximately $240 000 towards the purchase of the J Street property from her father. Further, she was not challenged on her evidence that she used her savings held in the ANZ Bank account, which she had at the commencement of the relationship, as an offset against the variable interest component of the parties’ NAB mortgage secured over the J Street property.
As a result of this offset account, the parties were not required to pay interest on the loan secured over the J Street property for the ten year period in which they owned it. The parties nonetheless continued to jointly pay down the NAB mortgage secured over the D Street property. As the parties made these repayments, the wife reduced the amount which she held in the offset account by a commensurate amount and placed those funds into a higher interest bearing account.
The wife was not challenged on her evidence that, by February 2010, the mortgage secured over the J Street property had been reduced to approximately $59 000 and she held approximately $63 000 in the mortgage offset account.[31]
[31] Wife’s affidavit filed 11 December 2015 at Annexure “A18”.
Further, the wife was not challenged that, as at February 2010, she held a term deposit with Macquarie Bank in the sum of $138 531, together with an additional savings account with Bankwest in the sum of approximately $75 000.[32]
[32] Ibid at Annexure “A19”.
There is a disagreement between the parties as to how the proceeds of the sale of the J Street property were allocated. However, it is not necessary to resolve this issue as there was agreement between the parties as to the value of each of the current assets in the matrimonial property pool. Further, the reallocation of funds from the sale of the J Street property is not relevant to a consideration of the parties’ contributions.
Contributions made by the intervenor on behalf of the wife
It was submitted on behalf of the husband that, in light of the agreement reached between the parties that they would repay to the wife’s father for the financial assistance he had provided to them in the sum of $1 030 000, the wife should not receive additional recognition by way of a financial contribution as a result of her father’s assistance. That financial assistance was provided primarily in respect to the acquisition of the J Street property and subsequently the D Street property.
Senior counsel for the wife, on the other hand, argued that the wife’s father’s financial assistance should nonetheless be recognised as a contribution made on the behalf of the wife to the matrimonial property pool because it substantially reduced the parties’ interest obligations and provided the parties with the opportunity of obtaining the benefit of investing in the Sydney property market.
In that respect, the wife’s father’s contributions totalled a sum of $1 701 525. Those contributions were as follows:
· In August 2000 - providing approximately $240 045 towards the acquisition of the J Street property.
· In March 2001 - paying $211 500 to discharge the parties’ fixed interest rate mortgage with the NAB secured over the J Street property.
· In February 2010 - providing towards the acquisition of the D Street property;
o $80 000 for the deposit;
o $117 666 for stamp duty; and
o $1 052 314 for completion of the purchase.
Senior counsel for the wife noted that the following payments, totalling a sum of $552 421, were made to the wife’s father:
· In December 2011 - $512 966.85; and
· On 28 April 2015 - $39 445.
Subtracting the amounts paid to the wife’s father from the amounts received from him, the balance is therefore $1 149 104. I note, that as a result of the consent orders made on 18 July 2016, the parties are required to pay the wife’s father an additional sum of $1 030 000. Accordingly, the parties will have retained the benefit of a financial contribution from the wife’s father on the wife’s behalf in the sum of $119 104.
Further, the wife is entitled to recognition of the fact that, as a result of her father’s financial assistance, the parties’ interest obligations were significantly reduced. During cross-examination the husband agreed with senior counsel for the wife that, in the period subsequent to October 2010 until March 2015, the average interest rate on the parties’ mortgage was approximately 5 per cent.[33]
[33] Transcript 20 July 2016, pages 94 – 95.
In addition, without the wife’s father’s assistance, the parties would not have been in a position to purchase the D Street property. It is noted that the purchase price of the D Street property in February 2010 was, including acquisition costs, $2 502 869. At the final hearing the parties were in agreement that the current value of the property was now $3 100 000. This represents a significant capital gain. However, it needs to be recognised that at least a portion of that capital gain was as a result of improvements made to the properties by the parties.
Further, it was not disputed that, while the wife generally made a lower income than the husband during the course of the relationship, she continued to equally meet the costs of the mortgage and the household expenses.
The wife’s evidence in respect to her role as a homemaker and as the primary carer for the children was also not disputed. That evidence was that the wife:
·Other than on a few occasions, took time off work to care for the children when they were sick and would take them to medical appointments.
·Attended pre-school and school concerts, parent teacher nights, sports carnivals, open days and other events held at the children’s schools.
·Acquired the children’s clothing and school uniforms.
·Purchased gifts for both parties’ friends and families.
·Assisted the children with their homework and school projects.
·Attended Parents and Citizens meetings and in 2007, assisted the school to establish a program of before school and holiday care.
·Took the children to weekly swimming lessons and mid-week sport training.
·Facilitating play dates with the children’s friends.
·Hosting family Christmas on three occasions.
·Undertaking most of the shopping, washing and cooking for the household.
The husband’s evidence in respect to his indirect contributions was also not the subject of challenge. That evidence was:
·Prior to the parties purchasing the J Street property and subsequently the D Street property, the husband made a number of enquiries with banks regarding the parties’ lending capacities.
·After acquiring the D Street property, the husband undertook research in locating architects and builders to prepare plans for the renovation of the house and researched heritage home renovations with a view to obtaining ideas for the renovations.
·Undertook all maintenance and repairs to the properties.
·Established and maintained gardens and generally kept the external areas clean and tidy.
While the wife did dispute assertions made by the husband in respect to the extent to which he assisted her as a homemaker and as primary carer of the children, I accept that it is likely that the husband undertook the following:
·After the children ceased breast feeding, assisting in the preparation of food and their bottles.
·Assisting in the bathing of the children and preparing them for bed.
·Reading to and playing with the children.
·On occasions, taking the children to medical appointments.
·On occasions, transporting the children to and from school and their activities.
·On occasions, observing their sporting and extra-curricular activities.
·Assisting with the children’s birthday parties and other festive occasions.
·Generally being involved in the children’s sporting activities prior to them commencing private schools. In respect to B, this included ballet, netball and nippers and in respect of C, it included Kanga sports, nippers, junior cricket and AFL.
I also accept that the husband played a role in respect to the children’s activities with the Suburb E Sports Club including as a “manager” for three years for each of the children - a total of six years. I also accept that the husband participated with the children in their membership of “Zoo Friends” including taking the children to the Zoo on Sundays.
Evaluation of contributions
As noted, I accept that the parties generally each did their best in terms of contributing their income and their time towards the benefit of the family. The wife is, however, entitled to greater recognition in respect to a direct financial contribution to the acquisition of the parties’ matrimonial property. That includes, as a result of the funds personally available to her at the time, the wife was able to establish and maintain a mortgage offset account which reduced the parties’ interest obligations. The wife is also entitled to recognition for the financial assistance provided to the parties by her father which facilitated the parties’ investments into the Sydney property market and reduced their interest payments.
I therefore accept the submission of the senior counsel for the wife that, on the basis of the parties’ direct and indirect contributions, there should be an adjustment of the matrimonial property pool of fifty-five per cent to the wife and forty-five per cent to the husband.
Section 75(2) Factors
Section 79(4)(e) requires me to have regard to those matters set out in s 75(2) insofar as they are relevant. I regard the following matters as being of relevance to my consideration of these proceedings.
In terms of s 75(2)(a), the husband is currently 52 years of age and the wife is 48 years of age. Both appear to be in relatively good health although I note that the husband has recently undergone an anterior hip replacement.
In terms of s 75(2)(b), subject to those matters that I will discuss in respect to responsibilities in respect of the parties’ children, the parties appear to have a similar income earning capacity. In addition, however, the husband was previously engaged in a private business enterprise to supplement his salary. Based on that experience, some allowance should be made for the husband’s capacity to re-engage in such a business to supplement his income further.
On the other hand, a further matter that I take into consideration is, as acknowledged by both parties, that the wife’s father remains a potential financial resource for her.[34]
[34] Transcript 20 July 2016, page 133.
In terms of s 75(2)(c) it is of significance that, under the consent orders agreed to by the parties, the wife will have primary responsibility for the care of the parties’ two children. The children will spend approximately twelve days per fortnight with the wife. This is a significant obligation on the wife in terms of her time and financial resources. It is of note that in his Financial Statement filed 27 June 2016, the husband states that he incurs expenses of approximately $285 per week in respect to the children. This is in circumstances where he only has the children in his care two days per fortnight. The wife should be given recognition for this significant financial responsibility that she carries as a result of having the primary care of the children.
In terms of s 75(2)(f) no evidence was presented to the Court in respect to the potential of either party to receive a pension, allowance or other benefit from a Commonwealth or State Government. Each party, however, has superannuation to the extent identified in the balance sheet. The husband proposes that there be an apportionment of the parties’ superannuation entitlements. However, I am satisfied that there can be a just and equitable distribution of the parties’ property without disturbing the party’s existing superannuation interests.
In terms of s 75(2)(e) both parties have, during the course of their relationship, enjoyed a comfortable standard of living. In part, that has been due to the wife’s ability to draw upon savings that she had accumulated. These funds have diminished during the course of the parties’ relationship. However, a fair and equitable outcome, in this case, is one that provides each party with the opportunity to establish a new household and enjoy a reasonable standard of living post separation.
In terms of ss 75(2)(k) and (l), I note that the duration of the parties’ relationship was approximately twelve years. During the course of their relationship, the wife took a period of maternity leave after the birth of each of the children. I accept the evidence of the wife that she has attempted to structure her employment so that she has flexibility to attend the children’s events and to be as available as possible for them during the school week. It is reasonable that this has impacted upon the wife’s career development and income-earning capacity.
In terms of s 75(2)(na), I note that I have dismissed the husband’s application for child support departure orders. The husband will therefore have an obligation pursuant to the current administrative child support assessment to make child support payments until 31 December 2016. Both parties acknowledged that it is likely that the Department will make a further assessment of the husband which will apply after that date. As previously noted, the current administrative child support assessment requires the husband to meet 50 per cent of the cost of B’s private school fees. Section 75(2)(na) requires the Court to have regard to child support payments that a party “might be liable to provide” in the future – this includes the prospect that the husband’s future child support obligations may include him paying a portion of the children’s private school fees.
In terms of s 75(2)(o) counsel for the husband submitted that, in the alternative to the Court considering “adding back” into the property pool the amounts proposed by the husband, the Court consider those items pursuant to section 75(2)(o). As previously indicated, I also intend to consider the husband’s arguments in respect to the contested “add backs”, that is, items 23, 24 and 25 on the balance sheet, in my consideration of s 75(2)(o). This consideration is set out below.
Alleged “add back” against the wife of $65 707 for the payment of school fees, liability to K School for school fees of $17 138 and the husband’s child support liability of $39 953
Counsel for the husband referred to paragraph 156 of the wife’s affidavit filed 11 December 2015 wherein she provided evidence of withdrawals made by her from her UK ISA account. Counsel for the husband also referred to item 59 of the wife’s Financial Statement filed 24 June 2016 as evidence of withdrawals in the sum of £97 356 made by the wife from that UK ISA account for the purpose of meeting school fees.
The husband asserted that, despite the wife’s evidence, in cross examination, that the school fees were paid from a mixture of capital and income, the Court should accept that the sum of $65 707.52 was paid from capital which meant that the wife had depleted the matrimonial property pool to the extent of $65 707.52.
The husband asserted that, in circumstances where he voiced his opposition to the payment of private school fees, and where the wife has had the “benefit” of those funds, it is appropriate that the Court regards those funds as “a premature distribution of matrimonial property in favour of the wife”.
Even taking the husband’s argument at its highest, that is, that the amount was a payment from capital and not income, the payment of school fees in the circumstances in which those payments have been made, are not such that the they can be characterised as an inappropriate premature distribution of funds as contemplated in cases such as Kowaliw & Kowaliw,[35] Townsend & Townsend [36] and Farnell & Farnell.[37]
[35] (1981) FLC 91-092.
[36] (1995) FLC 92-569.
[37] (1996) FLC 92-681.
Accordingly I do not regard the husband’s assertion that the wife paid the sum of $65 707 to K School from capital, as being relevant to my consideration of s 75(2) factors.
I note, however, that, as result of my dismissal of the husband’s application for child support departure orders, the husband will be required to pay arrears of child support in the sum of approximately $39 953 and that that amount includes a portion in respect to B’s school fees. The husband will also be required to continue to contribute towards 50 per cent of B’s private school fees.
The parties have a joint liability to meet past and ongoing private school fees in respect to B. In that respect, in considering s 75(2)(o), I do have regard to the fact that the payment in the sum of $39 953, which will be made by the husband to the wife, will reimburse the wife, in part, in respect to past payments she has made towards B’s school fees. Further, the husband’s ongoing obligation to make child support payments in accordance with the assessment made by the AAT on 27 October 2015 will assist the wife to meet those private school fees on an ongoing basis. Accordingly the fact that the father will be required to pay arrears of child support is a relevant consideration pursuant to s 75(2)(o) of the FLA.
As the wife will effectively be reimbursed for 50 per cent of B’s past school fees, in considering s 75(2)(o), I do not propose to have regard to the amount of $17 138 that remains outstanding in respect to B’s private school fees.
Alleged “add back” against the wife of $22 600
The husband alleged, that, in the period between 25 January 2011 and 26 April 2012, the wife withdrew an amount of $22 600 without the husband’s consent.[38] The husband’s evidence in respect to this is set out in a schedule which he prepared as a reconciliation of the NAB mortgage offset account for the period from 23 September 2010 to 16 July 2013.[39] No objection was taken in respect to the husband providing evidence of the withdrawals in that form.
[38] Husband’s affidavit filed 14 December 2015 at paragraph 39.
[39] Ibid at Annexure “Q”.
The wife, however, rejected the husband’s assertion that she withdrew the funds without the husband’s consent and asserted that, with the husband’s knowledge, “as we drew down the mortgage, the excess funds went across to my Bankwest TeleNet Saver [account]”.[40]
[40] Transcript 19 July 2016, page 50.
Even if the husband’s evidence is taken at its highest and the wife withdrew those funds without his consent, there is no evidence before the Court that indicates that the funds were used for an inappropriate, arbitrary or capricious purpose such that they should be regarded as an inappropriate premature distribution of property.
Accordingly, I do not propose to consider the withdrawal of the sum of $22 600 from the parties’ joint account as a matter that is relevant to my evaluation of s 75(2).
Proceeds of sale of the husband’s coin collection and the husband’s expenditure of part of his inheritance
The wife asserted that the Court should have regard to the fact that the husband has had the benefit of the sale of his coin collection which she has valued at $17 755.
The wife also asserted that the husband has failed to provide full and frank disclosure in respect to the inheritance which he received from his late father’s estate in the sum of approximately $300 000. That inheritance was received during June 2015, after the parties had separated.
Once again, there is no evidence before the Court to suggest that the husband has utilised the proceeds of the sale of the coin collection or his inheritance for purposes that could be regarded as inappropriate such that those amounts should be regarded as an inappropriate premature distribution of property by the husband.
In respect to the coin collection, the husband asserted that it was necessary for him to sell the collection as he was without sufficient income to meet his own living expenses.
Further, the husband asserted that he has utilised his inheritance in order to meet legal expenses associated with these proceedings, outstanding debts, medical expenses and for the purchase of a motor vehicle.[41]
[41] Husband’s affidavits filed 14 December 2015 at paragraph 61 and filed 7 March 2016 at paragraph 8.
The husband further noted that the motor vehicle he purchased using part of his inheritance appears in the balance sheet, as does the remaining portion of his inheritance which are held in a term deposit with the NAB.
Accordingly, taking a similar approach to that which I took in respect to the withdrawal of $22 600 made by the wife from the parties’ joint account, I do not propose to regard these matters as being of relevance to my evaluation of s 75(2) .
Alleged “add back” against the wife of $39 455
The wife conceded that in April 2015 she paid an amount of $39 455 to her father. The wife contended that this sum was in repayment of the loan she had received from her father in 2000, which was utilised to purchase the J Street property.
The husband contended that the loan was repaid in circumstances where it was statute barred and there was no evidence before the Court of a call being made by the wife’s father for its repayment. Further, it was submitted on the behalf of the husband that there was no evidence of a loan agreement and/or any terms of repayment of the loan or otherwise.
In Bircher & Bircher and Anor,[42] the Full Court confirmed that it is necessary for a trial judge to analyse “what the evidence [reveals] as to the terms of any loan agreement” in determining whether there was a legal obligation by a party to repay monies to a third party.
[42] [2016] FamCAFC 123 at [61].
I accept that the payment made by the wife to her father in the sum of $39 455 was paid as result of her perception of a moral, as opposed to a legal, obligation to repay those monies to her father.
On the other hand, as indicated above, a countervailing consideration is the fact that the parties received a substantial benefit from the financial assistance they received from the wife’s father.
In the circumstances, I accept that the payment by the wife to her father in the sum of $39 455 was a premature distribution of matrimonial property by her prior to the finalisation of these proceedings. The consequences of that act on the wife’s part, however, needs to be placed in the context of the overall property pool and benefit that the parties have received from the wife’s father.
Accordingly, I give some consideration to the wife’s payment to her father of the sum of $39 455 but I do not consider it has a material bearing on my evaluation of s 75(2) in these proceedings.
Evaluation of s 75(2) factors
The most relevant of the s 75(2) factors that I have had regard to is the fact that the wife will have primary care for the of the parties’ two children. This will impact upon her financially especially in terms of her future income earning capacity.
However, I have also had regard to the fact that the wife’s father is a potential financial resource to the wife. I have had regard to the fact that the husband will be assisting in meeting expenses in respect to the children in that he will be paying child support, including arrears of child support, which includes a component for B’s school fees. There is also a real possibility that the husband will be required to meet half of the ongoing private school fees of both of the parties’ children.
In evaluating the s 75(2) factors to which I have referred, I conclude that an additional adjustment in favour of the wife of five per cent is appropriate.
Superannuation
As previously mentioned, the parties’ existing entitlements in their respective superannuation funds can be accommodated in the adjustment of the parties’ overall property interests pursuant to the orders that I propose to make. This can be achieved without disturbing the parties’ existing entitlements. Accordingly, I do not propose to make any orders adjusting the parties’ respective superannuation entitlements.
Orders
I have found the net pool of assets should be divided sixty per cent to the wife and forty per cent to the husband. The net pool of assets as found by the Court amounts to $3 034 687.75, of which sixty per cent and forty per cent equates to $1 820 812.65 and $1 213 875.10 respectively.
As outlined above at [47], consent orders were entered into with the wife’s father, the intervenor, for repayment of funds owed to him by the parties. Under those consent orders, in the event that the wife retains the D Street property, she will be responsible for the repayment of that sum whilst, in the event that the D Street property is sold, such repayment would occur before any of the proceeds of sale were distributed to the parties.
Given the children shall live with their mother under the final parenting orders, I am of the view that it is in their interests to remain at the D Street property without any further disruption to their lives. Therefore, the wife should be afforded the opportunity to retain the D Street property.
Proceeding on that basis, as identified by the Court, the wife would retain the following assets and liabilities:
Description Value D Street property $3 100 000 50 per cent of NAB account ending 510 $99 712.00 German motor vehicle $20 000.00 NAB account ending 550 $1302.00 Bankwest account ending 182 $21 022.00 Household contents $15 265.00 Jewellery $12 205.00 F Accountants UK account $90.00 Superannuation $416 668.00 $3 686 264.00 Less NAB mortgage -$196 922.00 Loan from Intervenor -$1 030 000.00 -$1 226 922.00 TOTAL $2 459 342.00
The wife holds assets to the sum of $3 686 264.00 and liabilities to the sum of $1 226 922.00. Accordingly, the wife holds net assets to the sum of $2 459 342.00, which exceeds her entitlement by $638 529.35.
As identified by the Court, the husband would retain the following assets and liabilities:
Description Value CBA account ending 757 $65 000.00 50 per cent of NAB account ending 510 $99 712.00 Shares in G Ltd $1600.00 Motor vehicle $27 300.00 Household contents $5100.00 Jewellery / Coin Collection $541.00 Superannuation $376 092.75 TOTAL $575 345.75
The husband holds assets to the sum of $575 345.75 and no liabilities. Accordingly, the husband has a shortfall of $638 529.35 for which he will require payment from the wife.
Possible sale of the D Street property
The husband questioned the wife’s ability to raise sufficient funds to pay an amount that may be ordered, to satisfy a property adjustment arising from these proceedings, without selling the D Street property. I am of the view that, in those circumstances, such a sale would be an appropriate course of action and, accordingly I have made orders which provide for that.
Overview
In taking a holistic overview to the consideration of these orders I am satisfied that the orders are appropriate, just and equitable for the following reasons:
a)Both of the parties have made substantial direct and indirect, financial and non-financial contributions to the matrimonial property.
b)The wife will have the first opportunity to retain the D Street property in circumstances where the children live with her.
c)The husband will receive a distribution that, in the context of his income, could reasonably be expected to enable him to obtain a loan to finance the purchase of a home for him to live in and spend time with the children.
d)The husband retains the benefit of the remainder of his father’s inheritance.
e)The parties will share the cost of B’s school fees for the remainder of this year and may potentially share that obligation for the remainder of both of their children’s schooling.
f)Both parties will remain in the work force and continue to receive a reasonable income to meet their expenses and contribute to their future superannuation entitlements.
Accordingly, I make the orders as set out at the commencement of these Reasons for Judgment.
I certify that the preceding two hundred and thirty-three (233) paragraphs are a true copy of the reasons for judgment of the Honourable Justice McClelland delivered on 4 November.
Associate:
Date: 4 November 2016
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