WAYNE and FLETCHER

[2015] FCWAM 140

JURISDICTION : MAGISTRATES COURT OF WESTERN AUSTRALIA – 150 TERRACE ROAD

ACT: FAMILY COURT ACT 1997

LOCATION: PERTH

CITATION: WAYNE and FLETCHER [2015] FCWAM 140

CORAM: KAESER M

HEARD: 2 FEBRUARY 2015

DELIVERED : 9 JULY 2015

FILE NO/S: PTW 5633 of 2013

BETWEEN: MS WAYNE

Applicant

AND

MR FLETCHER
Respondent

Catchwords:

Property Settlement, Child Welfare and Child Support; undefended trial; lump sum child support orders made – 6 years capitalised at rate of current child support assessment; to be deducted from father’s property settlement entitlement.

Legislation:

Child Support (Assessment) Act 1989 (Cth)
Family Court Act 1997 (WA)

Category: Not Reportable

Representation:

Counsel:

Applicant: Self Represented Litigant

Respondent: Self Represented Litigant

Solicitors:

Applicant: Self Represented Litigant

Respondent: Did not attend

Case(s) referred to in judgment(s):

Stanford v Stanford (2012) 247 CLR 108

WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT - PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED

1These parties require the Court to determine a number of issues including their respective property settlement entitlements, whether there should be a lump-sum child support order and orders in relation to the children, [Child A] and [Child B] (twins) born [in] 2006.

Background of the parties

2The applicant was born [in] 1966, whilst the respondent was born [in] 1965. They started living together in 2005 in Perth (the applicant had moved from [Coastal Town N] in [Victoria]) and they separated on 14 March 2012. They clearly lived in Western Australia for more than two-thirds of their de facto relationship, although they lived for a year back in Coastal Town N.

3The applicant obtained a violence restraining order against the respondent in March 2012. That was made final in March 2014 and was in place at the time of the trial before me.

History of proceedings

4This matter was listed for an undefended trial before me. At trial, however, both parties initially appeared. I gave the respondent an opportunity to address the Court. He chose to allow the undefended trial to proceed and was excused from any further attendance. The trial therefore proceeded in his absence.

5The proceedings were initially commenced on 9 October 2013 by the applicant filing a Form 1 application in relation to property matters only. The respondent filed a competing Form 1 application on 13 December 2013, but only in relation to children’s issues. The applicant amended her Form 1 application on 16 January 2014 to add child support orders.

6On 1 May 2014, the applicant filed a further amended Form 1 application which varied the terms of the child support and other orders sought, but did not include any fresh causes of action.

7On 22 July 2014, orders were made given the respondent’s failure to comply with earlier orders about the filing of documents. The applicant was granted leave to proceed on an undefended basis and the Court allowed the Child Support Agency to deduct child support arrears from a joint Commonwealth Bank account which held the sale proceeds of a property in [Suburb P].

8On 27 October 2014, further orders were made (at a time when the respondent was represented) that provided for the respondent to sign documents to authorise the Commonwealth Bank to deduct the arrears of child support from the term deposit and forward to the Child Support Agency. A Registrar was ordered to sign in default of the respondent.

Applicant’s case

9The applicant says that she should receive 72% of the term deposit. From the respondent’s 28% share she says that a lump sum child support payment should be paid to her equating to $96,000.

10In the final minute of orders sought by the applicant filed 8 January 2015, she sought the following orders:

Children

1.That the applicant mother have sole parental responsibility for the children [Child A] and [Child B] born [in] 2006.

2.That the children live with the applicant mother.

3.That the children will communicate and spend time with the respondent father as agreed in writing.

4.The respondent be restrained and an injunction is hereby granted restraining him from removing the said children from the care and control of the applicant and/or any agent acting on her behalf and/or any educational or day-care facility that the children attend, unless with the prior consent of the applicant.

5.The applicant have liberty to provide a copy of these orders to any educational or day-care facility that the said children attend.

6.That the applicant mother have liberty to apply to renew the children’s passports as required and the requirement for the respondent father to sign the renewal application be dispensed with.

Property

1.The proceeds of sale of [Property P], deposited into Commonwealth Bank term deposit, account number xxxxxxxxxxxxx (joint account in names of [Ms Wayne] and [Mr Fletcher]) be disbursed as follows:

(a)On closure of above term deposit, including closing interest (and/or Court orders):

The applicant receive 72% and the respondent 28%;

i.From the respondent’s 28% of the term deposit: a lump sum payment be paid to the applicant for child support other than in a form of periodic amounts:

That pursuant to s 123A of the Child Support (Assessment) Act 1989, [Mr Fletcher] provide child support to [Ms Wayne] for the children [Child A] and [Child B], a payment of $96,000. The lump sum payment is calculated using a fixed monthly amount of $800 over 120 months, commencing 1 January 2015 until the children complete year 12 at high school (December 2024).

ii.That [Mr Fletcher] pay to [Ms Wayne] $2,604 representing current outstanding child support payments up to 31 December 2014 (please see attached letter from Child Support Agency (Annexure A) [sic];

iii.That the respondent father pay the applicant mother a further $4,216.23 (from the 28%) in lieu of child support payments taken by the Child Support Agency, from the joint proceeds of sale (settlement November 2013). Based on a 72/28% division, the applicant be paid 72% of the child support arrears payments and the administration fee (146.05).

iv.That the respondent father pay the applicant mother a further $6,855.46 (from the 28%) in lieu of child support payments withdrawn from joint finances: Commonwealth Bank account (as above) on November 24 2014 (see attached statement Annexure B). The total withdrawal of $9,521.47 represented child support arrears up to the end of September 2014. Based on a 72/28%, the applicant paid 72% of the child support arrears payments.

2.The applicant and respondent to be liable for their own debts e.g. personal/store credit cards, business debts and HECS debts.

3.Assets other than the joint term deposit account:

The applicant and respondent each retain motor vehicles registered in their personal/business names, tools of trade, furniture and household contents presently in their possession or control, and the applicant and respondent each retain their own money in bank accounts, shares, superannuation and business incomes.

Respondent’s case

11The respondent has not filed any documents regarding financial matters or child support issues. In relation to children’s issues he sought final orders in his Form 1A response filed on 13 December 2013 in the following terms:

1.The applicant father to have equal shared residency and spend time with the children of the relationship [Child B] and [Child A] both born 2 July 2006 to include the equal sharing of health and educational information in relation to the [sic] both children.

2.In relation to Christmas/Boxing Days, Easter holidays and the children’s birthdays, these days be shared equally between the parties and alternating each year thereafter.

3.Any other order deemed necessary by the honourable court.

Property settlement law

12There is no dispute that the Court has jurisdiction to deal with this matter.

13The parties were not married, therefore the provisions of the Family Court Act 1997 apply.

14Section 205ZG(1) of the Act provides that the Court must make such orders as it considers appropriate. Section 205ZG(3) provides that “the Court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order”.

15Traditionally that has meant that the Court followed a four‑stage process.

16That process is as follows:

(a) identify the value of the assets and liabilities of the parties;

(b) assess the contributions made by each party to the assets;

(c) assess the factors set out in s 205ZG(4) and s 205ZD(3); and

(d) consider whether the proposed orders are just and equitable between the parties.

17The fourth step of this process was seen to be the check required pursuant to s 205ZG(3) to only make an order if it was just and equitable to do so.

18The High Court examined these provisions in Stanford v Stanford (2012) 247 CLR 108.

19The High Court noted at [36-40] that when exercising the property settlement power, three fundamental propositions must not be obscured:

(a) One must first identify, according to common law and equitable principles, the existing legal and equitable interests of the parties in the property [emphasis added];

(b) The Court’s power must be exercised in accordance with legal principles; and

(c) To conclude that making an order is “just and equitable” only because of reference to the various matters set out in s 79(4), without separately considering s 79(2), would be to “conflate the statutory requirements and ignore the principles laid down by the Act” [noting that the provisions in the Family Court Act 1997 are identical].

20The Court also held that the mere fact of separation is not necessarily enough to warrant exercising the property settlement power and making an order.

21The power under s 205ZG is to alter a party’s interest in property, which is why the High Court considered it is essential to begin with an examination of what interests in property the parties have. It may or may not be necessary to alter any such interests.

22The High Court at [42] acknowledged the reality that in many cases, the “just and equitable” requirement is:

… readily satisfied by observing that, as a result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife.

23In the event that the Court decides that s 205ZG demands that an order be made, then the Court must make such orders as it considers appropriate. It must also take into account the provisions of s 205ZG(4) and s 205ZD(3).

24The parties’ assets and debts are set out in the table below.

Joint fixed term accounts	Commonwealth Bank [xxxxxxxxxxxxx]	555,900.61
Interest on the above account to the time of judgment	Estimated	3,500.00
Joint account	[xxxxxxxxxxxxx]	Nominal
Transaction account	Applicant’s name	500.00
[Toyota] car	Applicant	14,000.00
Furniture and chattels	Applicant	3,000.00
Arrears of child support added back in	9,521.47
Managed fund with Colonial First State added back in	Respondent	78,000.00
Total Assets	$664,422.08
MasterCard	Applicant	1,000.00
American Express	Applicant	1,000.00
HECS debt	Applicant	7,127.25
Commonwealth Bank account – credit card	Respondent – at 9/12/14	41,458.28
Commonwealth Bank MasterCard	Respondent ‑ at 10/12/14	7,924.26
Total debts	$58,509.79
Net assets	$605,912.29

25Given the parties were in a de facto relationship, superannuation cannot be treated as an asset. The applicant has a Hesta fund worth $89,350.75. There is no evidence of any fund in the respondent’s name.

Discussion in relation to assets and contributions

26Firstly, it is clear that the Court must make property settlement orders in this matter. The parties have a joint term deposit account. They can no longer have the common use of that asset and have been unable to agree on the appropriate distribution. This case falls within the reality observed by the High Court at [42] in Stanford (supra).

27The subpoenaed material shows that the respondent may have further debts as set out above. It is appropriate that he retain liability for those debts, but it is also fair to consider if appropriate that he receive an amount that might cover those debts so that he can then discharge them if possible. I have therefore taken into account the material produced pursuant to the subpoenas namely, the Colonial First State documents, being Exhibit W3; the Commonwealth Bank documents, Exhibit W4; and the CommSec documents, Exhibit W5.

28At the start of the relationship the applicant owned a 50% interest in a house in Coastal Town N, Victoria. The respondent worked as a [labourer] throughout the relationship. Prior to the relationship the applicant worked in management earning approximately $55,000 to $70,000 per annum.

29The applicant reduced her work once pregnant with the two children (who were born [in] 2006). She had planned to return to work in June 2007 after taking some maternity leave, but the child, Child B, was diagnosed with [health issues], therefore the applicant did not return to work as planned.

30The parties bought and sold three houses during the course of the relationship and maintained separate bank accounts throughout that time. In November 2013 (post separation) the family home was sold and the sale proceeds currently remain in trust.

31The applicant’s interest in the Coastal Town N. property was sold in 2006 and she obtained net proceeds of about $180,000.

32The parties bought a property in [Suburb D] at the end of 2005. The applicant’s sale proceeds referred to above went towards the mortgage on the Suburb D property. The Suburb D property cost about $500,000 and the parties initially obtained a mortgage of about $330,000. It is clear therefore that the respondent therefore contributed about $170,000 to the purchase price.

33Once the applicant paid approximately $160,000 off the mortgage from the sale proceeds of the Coastal Town N. property, the mortgage was reduced to about $150,000. A further $20,000 from the sale proceeds of Coastal Town N. went towards renovation costs.

34In the end, the applicant accepted that the parties had contributed roughly equal amounts to the initial purchase of that property.

35The Suburb D property was sold in about April 2008 for $845,000. The parties received about $600,000 net. They used those proceeds to buy a property in Coastal Town N. for approximately $574,000 in May 2008. The property purchase included a small mortgage, but otherwise the cost was covered by the sale of Suburb D.

36The parties then moved back to Victoria to live in that property for 12 months. They returned to Perth in June 2009. They sold the Coastal Town N. property, reduced the overall mortgage size and bought a new property in Suburb P. Suburb P cost $660,000 and again was subject to a small mortgage. Suburb P was sold on 19 November 2013 for $714,000. The net proceeds of sale went to a joint trust account and remain in that account.

37It is clear that the mortgage repayments throughout the course of the parties’ relationship came predominately from the respondent’s income. The applicant received child support from the father of her daughter and received various Centrelink benefits throughout the period of the relationship.

38Since separation the applicant has been living in the property until it was sold in 2013. From March 2012 to January 2013 the respondent paid the mortgage repayments on that property. From January 2013 until November 2013, when it was sold, the applicant paid the mortgage repayments.

39The respondent clearly had $78,000 in a managed fund, but he has withdrawn that amount. The Court has no evidence as to whether he still retains any of that money, but he has certainly had access to it. From December 2012 to 28 May 2013 he made several withdrawals to reduce the account to zero.

40In addition, in December 2012 the respondent sold the last of his shares in CommSec and received the amount of $10,226.30.

41The applicant has been the predominant caregiver to the two children during the relationship and almost exclusively since. There have been no child support payments received from the respondent. The previous arrears were only paid from the real estate sale proceeds held on trust and therefore have not come from the respondent’s income.

Conclusions in relation to contributions

42The applicant made the overwhelming contributions towards the welfare of the family and to the care of the children. The respondent made greater financial contributions up to the date of separation, being March 2012. The parties initially contributed about the same amount of money to the first purchase of real estate and the respondent has contributed by way of his income since that date.

43Since separation, however, he has clearly abdicated his responsibility apart from paying mortgage repayments for the period referred to above. It seems clear that he is still living beyond his means, given that he cashed in the amount held in the managed fund and he sold his shares and his credit card debt is still high, notwithstanding those amounts being received. In my view, on balance, given the contributions to property, contributions to the family and the significant contributions made by the applicant since separation, a figure of 60% in the applicant’s favour is an appropriate adjustment.

Section 205ZD(3) factors

44I have taken into account all of the relevant factors pursuant to this provision. I note that the respondent has not made voluntary child support payments as required pursuant to the relevant legislation. Orders made by this Court allowed the applicant to access the sale proceeds in order to repay the child support arrears. That however has used a joint asset of the parties to pay child support that should have come from the respondent’s income. That has then potentially been prejudicial to the applicant and therefore I have added back into the asset pool that amount that was withdrawn.

45The applicant completed her Graduate Diploma of Early Childhood Studies in December 2014 and at the time of trial was still hoping to obtain employment in that field. If she receives full‑time employment her initial wage will be around $58,000 per annum.

46The applicant has the ongoing care and control of the two children, aged eight at the time of the trial.

Conclusions in relation to s 205ZD(3) factors

47The above-mentioned factors support a weighting in the applicant’s favour. She will have the ongoing needs of the children to contend with, although I intend to put in place a lump‑sum order for a period of time. In doing so, I have been careful not to double count in relation to the property factors and the proposed lump sum child support order. The applicant retains now a capacity for a reasonable income subject to the availability of work. The respondent still has significant credit card debts and it would appear has few resources left. I have no evidence before me as to his current income. In my view, an apportionment of 10% in the applicant’s favour is appropriate by way of s 75(2) factors. Of the assets that I have determined above, the applicant is to otherwise keep the following:

Transaction account	500
Car	14,000
Furniture and chattels	3,000
Total	$17,500

48She will also retain the following debts:

MasterCard debt	1,000
American Express	1,000
HECS	7,127.25
Subtotal	$9,127.25
Net asset position to the applicant	$8,372.15

49The net assets amount to $605,912.29. Seventy percent of that figure is $424,138.60; less the amount that the applicant would otherwise retain of $8,372.15; provides a net figure of $415,766.45 to the applicant. This is the amount that should be deducted from the sale proceeds to go to the applicant. The proceeds of sale amount to $555,900.61 plus $3,500 in interest, totalling $559,400.61. By deducting the applicant’s amount referred to above of $415,766.45, leaves an amount of approximately $143,634 to the respondent. From that figure the respondent has approximately $49,000 by way of credit card debts that may still be payable.

50I am satisfied that the above represents a just and equitable settlement between the parties.

Child support

51The current assessment is from the period of 1 January 2015 to 31 October 2015 and is set at $916.17 per month. There is a history of arrears being built up through a lack of proper payment by the respondent pursuant to his income.

52As I have mentioned, previous orders allowed the applicant to access the term deposit to pay the outstanding arrears and I have added that amount back into the pool. I am satisfied, given that there have been no child support payments made voluntarily to date, and given the lack of involvement in the proceedings, that there is no reasonable prospect of the respondent voluntarily paying child support in the future. The applicant seeks to capitalise an amount of $800 per week until each child reaches the age of 18. The basis upon which she made that suggestion was that:

1.Eight hundred dollars was less than the current assessment because she thought it was a fair amount; and

2.I infer that she thought there might be a variation in the respondent’s income over time and this reduced amount might take into account such variations.

53The children, at the time of trial, were eight years of age. The applicant therefore seeks to capitalise the child support for a period of 10 years. It is unusual to capitalise a lump‑sum amount for such a lengthy period of time, but it is open to the Court to do so.

54Orders for lump‑sum child support are contained in Part 7 Division 5 of the Child Support (Assessment) Act. That division allows for payment for child support other than by way of period payments. The division has two particular objects set out in s 121 which provides:

121 Additional particular objects of Division

Additional particular objects of this Division include ensuring:

(a)that children have their proper needs met from reasonable and adequate shares in the income, earning capacity, property and financial resources of both their parents; and

(b) that parents share equitably in the support of their children.

55These objects are, of course, in addition to the objects provided in s 4 that children receive a proper level of financial support from their parents and that the support is determined according to their capacity to provide such support.

56Section 123A provides the following:

(1)The court may make an order that a liable parent provide child support for a child to a carer entitled to child support in the form of a lump sum payment to be credited against the amount payable under the liability under the relevant administrative assessment if:

(a)the carer entitled to child support or the liable parent makes an application to a court under paragraph 123(1)(b); and

(b) the court is satisfied that it would be:

(i)just and equitable as regards the child, the carer entitled to child support and the liable parent; and

(ii) otherwise proper;

to make an order under this section; and

(c)the amount of the lump sum payment equals or exceeds the annual rate of child support payable for the child under the administrative assessment.

57Subparagraph (3) provides that:

An order under subsection (1):

(a) must specify the amount of the lump sum payment; and

(b)must specify that the lump sum payment is to be credited against 100%, or another specified percentage that is less than 100%, of the amounts payable under the liability.

58Section 123A(4) provides that the Court must have regard to:

(a) the administrative assessment; and

(b)any determination in force under Part 6A (departure determinations) in relation to the child, the carer entitled to child support and the liable parent; and

(c)any order in force under Division 4 of this Part (departure orders) in relation to the child, the carer entitled to child support and the liable parent; and

(d)whether the carer entitled to child support is in receipt of an income tested pension, allowance or benefit; and

(e)if the carer entitled to child support is not in receipt of such a pension, allowance or benefit—whether the circumstances of the carer are such that, taking into account the effect of the order proposed to be made by the court, the carer would be unable to support himself or herself without an income tested pension, allowance or benefit.

59In this case the applicant is in receipt of an income‑tested pension, allowance or benefit.

60In this case the provision of a lump‑sum amount is designed by the Court to take the place of the periodic payments and, therefore, should be credited. I therefore intend to make an order that the relative administrative assessment is to be reduced given the lump‑sum payment contemplated.

61What the Court intends to do in this matter is proceed under s 123A to make an order for a lump‑sum amount and have that amount credited against future child support assessments. I am satisfied that it is just and equitable and otherwise proper to make a lump sum order.

62It is necessary, in my view, to capitalise the current child support payments for a period of time. The real issue though is whether should be for such a lengthy period as 10 years. In my view, it is too long a period in the circumstances of this case, in particular where I have no evidence of the respondent’s current income.

63In my view, a period of six years is sufficient and that will provide an amount of $65,964.24 (at the rate of $916.17 per month). The respondent is entitled to his proceeds of sale from the property settlement pursuant to the jurisdiction of the Court in relation to financial matters, however, he is also obliged to maintain his children at the rate assessed by the Child Support Agency in the event that he does not object to such decisions and seek a review of them. He has failed in that obligation and it is entirely appropriate for a lump‑sum child support order to be made. I have therefore made orders that will erode into his property settlement entitlement in order to provide a proper amount of child support for the two children whom he has an obligation to support. On balance, in my view, the amount left to the respondent is sufficient.

64I acknowledge the risk that in six years’ time when the lump sum effectively expires, the parties will need to go back to a child support assessment and the applicant may be in no better position from that time forward. By that time, however, the attitude of the respondent towards his obligation to support his children may have changed and the parties’ financial circumstances at that time can be taken into account in a revised child support assessment.

65The arrears of $9,521.47 cover the child support arrears to 8 October 2014. I note that there were further child support arrears up to the end of December 2014 in the amount of $2,604. I intend to make orders that will allow for the payment of that amount as well.

66In an overall sense, the respondent retains an amount of $143,634 or thereabouts from the proceeds of sale. He may still have approximately $49,000 in debt leaving him with $94,634. From that amount I have deducted the amounts of $65,964.24 and $2,604, being a total of $68,568.24, which leaves the respondent with $26,065.76. I am satisfied that this is a fair result in all the circumstances.

Children’s issues

67The respondent last saw the children in January 2013 and last spoke to them by telephone in February 2013. He has been the subject of 19 charges for breaches of violence restraining order by communicating with the applicant whilst he was restrained by such an order. The respondent received a suspended sentence regarding these breaches, having been convicted in March 2014. The orders proposed by the applicant allow for ongoing time between the children and the respondent as agreed in writing. The respondent did not press his position, although he commented that he wanted to see the children when he left the Court at the commencement of the trial. In the circumstances, therefore, the orders sought by the applicant are entirely appropriate. I am not prepared to put in place orders sought by the respondent as they are not in the children’s best interests and he has not pressed for those orders and has provided no evidence in support. These include orders in relation to passports and parental responsibility. I have, in coming to that determination, taken into account the best interests of these children and the entire history of this matter including all of the primary and additional considerations under the Act.

Orders

1. The applicant be appointed sole trustee of the Commonwealth Bank term deposit, account number [xxxxxxxxxxxxx] and is solely authorised to deduct the following amounts from the sale proceeds held in that account:

(a) $415,766.45 to the applicant by way of property settlement;

(b) A further $65,964.24 to the applicant by way of lump‑sum child support to 8 October 2014;

(c) Plus a further amount of $2,604 by way of lump‑sum child support to 31 December 2014;

(d) And the balance to an account in the respondent’s sole name.

2. Within 28 days of these orders, the respondent notify the applicant and the Commonwealth Bank of his nominated account referred to in the above order.

3. That pursuant to s 123A of the Child Support (Assessment) Act 1989, the respondent provide child support to the applicant for the children [Child A] and [Child B], by way of a lump-sum payment of $65,964.24, which payment is to be credited to the current child support assessment at the rate of $916.17 per month for a period of six years, with effect from 1 January 2015.

4. That the applicant have sole parental responsibility for the children [Child A] and [Child B] born [in] 2006.

5. That the children live with the applicant.

6. That the children will communicate and spend time with the respondent as agreed in writing.

7. The respondent be restrained and an injunction is hereby granted restraining him from removing the said children from the care and control of the applicant and/or any agent acting on her behalf and/or any educational or day-care facility that the children attend, unless with the prior consent of the applicant.

8. The applicant have liberty to provide a copy of these orders to any educational or day-care facility that the said children attend.

9. That the applicant have liberty to apply to renew the children’s passports as required and the requirement for the respondent to sign the renewal application be dispensed with.

10. The proceedings before the Court are otherwise dismissed.

I certify that the preceding [67] paragraphs are a true copy of the reasons for
judgment delivered by this Honourable Court

Secretary