WAYSON & WAYSON

[2016] FamCA 972

FAMILY COURT OF AUSTRALIA

WAYSON & WAYSON [2016] FamCA 972

FAMILY LAW – SPOUSAL MAINTENANCE – Where the wife seeks an order for spousal maintenance – Where the wife is the primary parent of four children between the ages of five and 14 years – Where the wife has not been in the paid workforce since 2007 – Where the wife is able to establish the threshold that she is unable to support herself adequately within the meaning of the legislation – Where the wife is in receipt of no income – Where the wife has established a need for  $2249 per week – Where there is an issue about the husband’s current income – Where the husband claims that his income has decreased – Where the Court accepts the wife’s submission about the husband’s capacity for earning income – Where the husband has the capacity to meet the wife’s needs – Order made for the husband to pay the wife interim spousal maintenance.

FAMILY LAW – CHILD SUPPORT – Departure from child support assessment – Whether the Court has jurisdiction to entertain a departure application – Where the Court is of the view that it is in the interest of the parties to have the child support dispute dealt with in this Court at the same time as the Court is considering interim spousal maintenance and other financial applications – Where the Court is of the view that pursuant to s 117(4) of the Child Support (Assessment) Act 1989 (Cth) it is necessary to determine the husband’s duty to pay spousal maintenance before determining the child support departure application – Where the wife is not able to establish a ground for departure from the current child support assessment – Application dismissed.

FAMILY LAW – SALE OF THE FORMER MATRIMONIAL HOME – Where the husband seeks orders for sale of the former matrimonial home – Where the wife is strongly opposed to such an order – Application dismissed.

FAMILY LAW – LEGAL COSTS – Where the wife seeks a dollar for dollar costs order – Where each of the parties have limited funds from which they could pay legal costs – Where it would be just within the meaning of s 117(2) to make the order sought by the wife.

Family Law Act 1975 (Cth) – ss 72(1), 75(2), 117(2A)
Child Support (Assessment) Act 1989 (Cth) – ss 116(1)(b), 117(1), 117(2), 117(2)(c), 117(4)

Bevan and Bevan (1995) FLC 92-600
Medlow & Medlow (2016) FLC 93-692

APPLICANT: Ms Wayson

RESPONDENT: Mr Wayson

FILE NUMBER: SYC 5545 of 2016

DATE DELIVERED: 14 October 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Johnston J

HEARING DATE: 29 September 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Millar

SOLICITOR FOR THE APPLICANT: Pearson Emerson Meyer Family Lawyers

COUNSEL FOR THE RESPONDENT: Mr May

SOLICITOR FOR THE RESPONDENT: Barkus Doolan

Orders

1. That as and from the date of these orders, until further order of the court:

   1.1The husband make and be responsible for the payment of all monies due and owing pursuant to the National Australia Bank Limited home loan and line of credit portfolio facility secured by mortgage no. … over the property at B Street, Suburb C NSW 2092 (“the Suburb C mortgage”);

   1.2The husband pay all arrears owing in respect of the Suburb C mortgage within 30 days of the date of these orders;

   1.3The husband indemnify the wife in relation to the payment of all monies due and owing pursuant to the Suburb C mortgage under the terms of any personal covenant contained in Suburb C mortgage for the repayment of the monies secured by the Suburb C mortgage or otherwise;

   1.4The husband pay in respect of the Suburb C property, council and water rates, electricity and gas accounts, house and contents insurance, repairs and maintenance.

2. That the husband pay or cause to be paid to the wife or as the wife may from time to time direct in writing, maintenance for the wife in the sum of $1,084 per week, the first such sum to be paid within 7 days from the date of this order and thereafter weekly until further order of the Court.

3. That if the husband wishes to use the facility of the D Trust as a vehicle through which to pay some part of the spousal maintenance orders, the wife is to do all things and sign all documents to facilitate this, both parties are to consent to the required machinery changes to these orders and the husband is to pay any tax for which the wife might become liable as a consequence of using this facility.

4. That the wife’s application for orders departing from child support assessment be dismissed.

5. That the husband’s application for orders for sale of the former matrimonial home be dismissed.

6. That within 14 days after any future payment by or on behalf of the husband of any money and payment of accounts rendered by his solicitors including in relation to expenses associated with the preparation of his case, the husband pay or cause to be paid the same sum of money to the solicitors for the wife.

7. That within 48 hours of the payment by or on behalf of the husband of any money referred to in paragraph 6 of these orders, the husband cause his solicitors to provide to the wife’s solicitors a memorandum stating the amount or amounts so paid.

8. That all money paid to the solicitors for the husband including on his behalf pursuant to paragraph 6 of these orders, shall be held in trust by the solicitors for the husband and not applied in payment to the husband’s costs until such time as the same amount has been paid by or on behalf of the husband to the solicitors for the wife.

9. That in the event the payment referred to in paragraph 6 of these orders is not made within 14 days thereafter, the husband is to direct his solicitors to pay 50 percent of whatever is received by them referred to in paragraph 6 to the solicitors for the wife.

10. That all such money paid to the solicitors for the wife are to be applied by them in payment of legal costs and disbursements incurred by the wife in the conduct of these proceedings.

11. That the manner in which such payments to the wife are to be dealt with in the substantive proceedings shall be a matter for the trial judge.

12. That both parties do all things and sign all documents necessary to cause the money in the National Australia Bank D Trust account (approximately $29 190) to be paid to the husband to be paid by him towards the outstanding mortgage and his tax liabilities only and in that priority.

13. That if either party should refuse or neglect to sign a document as required by these orders the registrars of this Court shall be appointed without further application to execute all such documents in the name of the defaulting party and to do all such things necessary to give validity and operation to such documents and the defaulting party shall pay the costs of the other party consequent upon the default.

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 Wayson & Wayson 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 5545 of 2016

Ms Wayson

Applicant

And

Mr Wayson

Respondent

REASONS FOR JUDGMENT

1. Ms Wayson (“the wife”) and Mr Wayson (“the husband”) are engaged in substantive financial proceedings.  But the wife says that there are urgent matters which the parties are unable to resolve and which require an urgent determination by the Court.  These matters relate to interim spousal maintenance, departure from administrative assessment of child support and preliminary costs payment. 

Applications

1. The wife seeks the following orders:

   Child Support

   3.By way of departure from the Administrative Assessment of child support issued on 1 July 2016 for the period 7 June 2016 to 6 September 2017 in Case No. 926048841 and any subsequent assessments issued in respect of the children until the happening of a child support terminating event as defined by Section 12 of the Child Support (Assessment) Act1989, and until further order of the court, the husband pay or cause to be paid:

   3.1By way of periodic child support, to the wife, or as the wife may from time to time direct in writing, child support for each of the children at the rate of $500 per child per week, payable by monthly instalments, the first payment to be made within 7 days of these orders, and thereafter, monthly until further order of the court or the happening of a child support terminating event in respect of each of the children;

   3.2By way of non-periodic child support, all education expenses in respect of each of the children at their current school and at such private school or schools as the parties agree upon in writing that the children will attend, and such expenses shall mean and include all enrolment fees, tuition fees, cost of school books, school uniforms, school and sports shoes, incidental sporting costs and excursions and all expenses associated with extra-curricular activities that the children currently undertake or have been agreed upon by the parties;

   3.3By way of non-periodic child support, all expenses in respect of the attendance of K at his current pre-school centre E Pre-School;

   3.4By way of non-periodic child support, all instalments of private health insurance fund of which the children were previously members and in addition thereto, pay any medical, hospital, optical, physiotherapy, dental, counselling, pharmaceutical and orthodontic expenses in respect of the children not able to be recovered from Medicare or the private health insurance fund.

   4.The payment of periodic and non-periodic child support by the husband pursuant to order 3 above, is to be credited against the husband’s liability under any Administrative Assessment of child support payable by the husband to the wife for the period until the happening of a child support terminating event in respect of each of the children, or until further order of the court.

   5.The child support payable by the husband pursuant to order 3 above, is intended to constitute and is to account for 100% of the annual rate of child support payable by the husband under any Administrative Assessment of child support payable by the husband to the wife for the period until the happening of a child support terminating event in respect of each of the children, or until further order of the court, and the annual rate of child support under any assessment issued in respect of each of the children for each year from the date of the making of these orders until the happening of the child support terminating event in respect of such child, or until further order of the court, is to be reduced by that amount.

   Spouse Maintenance

   6.The husband pay or cause to be paid to the wife or as the wife may from time to time direct in writing, maintenance for the wife in the sum of $1250 per week, the first such sum to be paid within 7 days from the date of this order and thereafter weekly until further order of the court.

   7.As and from the date of these orders, until further order of the court:

   7.1The husband make and be responsible for the payment of all monies due and owing pursuant to the National Australia Bank Limited home loan and line of credit portfolio facility secured by mortgage no. … over the property at [B Street, Suburb C] NSW … (“the [Suburb C] mortgage”);

   7.2The husband pay all arrears owing in respect of the [Suburb C] mortgage within 7 days of the date of these orders;

   7.3The husband indemnify the wife in relation to the payment of all monies due and owing pursuant to the [Suburb C] mortgage under the terms of any personal covenant contained in [Suburb C] mortgage for the repayment of the monies secured by the [Suburb C] mortgage or otherwise;

   7.4The husband pay all outgoings in respect of the [Suburb C] property including but not limited to council and water rates, electricity and gas accounts, house and contents insurance, repairs and maintenance.

   Legal Costs

   8.Within 7 days after any future payment by or on behalf of the husband of any money and payment of accounts rendered by his solicitors including in relation to expenses associated with the preparation of his case, the husband pay or cause to be paid to the same sum of money to the solicitors for the wife.

   9.Within 24 hours of the payment by or on behalf of the husband of any money referred to in paragraph 8 of these orders, the husband cause to be given by the husband's solicitors a memorandum stating the amount or amounts so paid to the solicitors.

   10.All money paid to the solicitors for the husband including on his behalf pursuant to paragraph 8 of these orders, shall be held in trust by the solicitors for the husband and not applied in payment to the husband's costs until such time as the same amount has been paid by or on behalf of the husband to the solicitors for the wife.

   11.In the event the payment referred to paragraph 8 of these orders is not made within 7 days thereafter, the husband is to direct his solicitors to pay 50% of whatever is received by them (as referred to in paragraph 8 of these orders and held by them in trust) to the solicitors for the wife.

   12.The amounts paid pursuant to these orders to the solicitors for the wife are to be applied by them in payment of the costs and disbursements incurred by the wife in the conduct of these proceedings.

   13.The question of how payments to the wife under paragraph 8 and 12 of these orders are to be treated at the final hearing shall be matters for determination by the Trial Judge.

2. On the other hand the husband seeks the following orders:

   Sale of the [Suburb C] Property

   1.That forthwith upon the making of these orders the husband and wife do all acts things and sign all documents to list the property at [B Street, Suburb C] in the State of New South Wales, being the whole of land in folio identifier … (“the [Suburb C] property”) for sale for the best price reasonably obtainable as agreed and failing agreement as follows:

   1.1the parties must within 7 days of the date of these orders, or such other date as the parties may agree upon in writing, list the [Suburb C] property for sale by Public Auction with such agent as agreed between the parties and failing agreement, the husband to nominate the name of three agents and 48 hours thereafter the wife to select one of the agents so nominated by the Husband (“the agent”);

   1.2the reserve price of the [Suburb C] property for the purpose of the auction shall be such price as may be mutually agreed upon by the parties in writing, or in the absence of agreement reached the reserve price shall be such price as nominated by the agent;

   1.3the parties shall each cooperate in every way with the agent including, without limited to the provisions of this paragraph:

   1.3.1making all relevant keys available to the agent;

   1.3.2allowing inspection of the [Suburb C] property at all reasonable times requested by the agent;

   1.3.3doing or saying nothing to hinder or prevent the sale being effected;

   1.3.4ensuring the [Suburb C] property including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers (and the costs of such work shall be borne equally between the parties as and when the same fall due); and

   1.3.5signing all documents requested by the agent in relation to the listing for sale of the [Suburb C] property except a Contract or Agreement for sale that has not been authorised by the parties’ solicitors;

   1.4if the bidding at the auction does not reach the reserve price, the parties or such of them that attends the auction may negotiate with the highest bidders or any other interested persons and effect a sale of the [Suburb C] property of a price which is not more than 5% lower than the reserve price, or such other price as the parties agree upon in writing;

   1.5if the [Suburb C] property remains unsold 14 days after the auction, the parties shall do all acts and things and sign all documents necessary to continue to relist the [Suburb C] property for sale by public auction again at 3 monthly intervals (or such other date that the agent shall recommend) and the provisions of these orders relating to the sale of the [Suburb C] property shall apply successively until the [Suburb C] property has been sold so that at each successive auction the reserve price shall be 5% less than the reserve price at the immediately preceding auction, unless otherwise agreed upon by the parties in writing;

   1.6The husband shall execute a Contract for Sale of the [Suburb C] property in the form prepared by the solicitors having conduct of the sale at the sale price;

   1.7In the event the parties are unable to agree upon a solicitor to have the primary conduct of the sale, then the solicitor shall be such solicitor appointed by the wife to have primary conduct of the sale on behalf of both parties provided that the husbands' solicitor shall be entitled to independently advise and represent the husband in respect of the sale and all matters arising in connection with the sale and all costs property payable to the solicitor appointed by the husband shall form part of the legal costs of sale and be deducted from the proceeds of sale as provided for in paragraph 2;

   1.8if the agent shall certify in writing to the parties' solicitor if it is reasonably necessary for the work specified in such notice to be carried out to the [Suburb C] property so as to assist in effecting the sale and providing the cost of such work is less than $2,000 either party may cause such work to be carried out and the costs incurred by that party shall be recoverable by that party from the proceeds of sale.

   2.Upon settlement of the sale of the [Suburb C] property the parties authorise and direct that the proceeds of sale be applied as follows:

   2.1All costs and expenses of sale including legal costs, and disbursements, agents’ commissions, advertising expenses, auction expenses associated with the sale;

   2.2An amount necessary to discharge the mortgage to National Australia Bank Limited Mortgage No. … secured over the [Suburb C] property (“the [Suburb C] mortgage”);

   2.3In reimbursement to either party for any costs incurred by that party in preparing the [Suburb C] property for sale;

   2.4In payment to each party the sum of $100,000 by way of partial property settlement;

   2.5The balance to be placed in a controlled monies account in the name of each of the parties.

   3Pending settlement of the sale of the [Suburb C] property each of the parties be restrained by injunction from drawing on the home loan, and line credit facility provided by the National Australia Bank Limited and any other account secured by the [Suburb C] mortgage, except with the written consent of both parties.

   Spousal maintenance

   Pending Further Order:

   4.The Husband continue to pay the Wife the distributions from the [D Trust] (which equates to 18% of the Husband’s income) to the National Australia Bank Limited account number 5149 in the name of [Ms Wayson] ([D] Trust Account).

   5.The Husband and Wife do all acts and things to pay the funds in the [D] Trust account to the Home Loan and Line of Credit Facility that is secured by way of mortgage on the Suburb C Property (the line of credit).

   6.The Husband and Wife each pay one half of the interest only payments that are debited on the line of credit, such payment to be made by each of the parties on the first day of each calendar month (and it is noted that presently each party will be paying $438 per week to the line of credit to meet the interest only repayments).

   7.The wife must meet all taxation liabilities associated with the distribution received by her from the [D] Trust from the funds standing to the credit of the [D] Trust Account.

   8.That the wife’s application for spouse maintenance and child support departure stand dismissed.

Background

1. The wife was born in 1975 in Country F.  The husband was born in 1976 also in Country F.  They commenced cohabitation in approximately December 1998, they married in 2000 and separated on 2 January 2015.  There are four children of the marriage namely G born in 2002, H born in 2005, J born in 2008 and K born in 2011.  Accordingly, the children are 14, 11, 8 and 5 years of age. 

2. At separation the wife and children remained living in the former matrimonial home at Suburb C.  The husband is a partner at Company D (“Company D”).  There is an issue between the parties about what the husband’s income is.  I shall refer to this again below.  The wife said that since the 2015 financial year when the husband became a partner, he caused approximately 18 percent of his income to be distributed to her via D Trust.  The wife said that it was these funds which enabled her to provide for herself and the children.  But in May 2016 the account to which her share of this income was deposited was frozen and she is now unable to access it.  There is approximately $29 190 in this account. 

3. It is common ground that the parties had a joint loan facility from the National Australia Bank with a limit of $1 000 000 when they completed the purchase of their Suburb C home.  All income earned by the husband from his employment at Company D was paid to that account until May 2016.  At the time of separation the amount drawn on that facility was $743 000.  By May 2016 the drawings had increased by approximately $80 000.  On 24 May 2016 the wife withdrew the sum of $177 121.28 which was the balance of the remaining available funds in the facility.  Upon the wife withdrawing this money the bank placed a “freeze” on this facility and neither party has been able to access funds since.  The wife said that she withdrew the $177 121.28 because she became concerned about what she said was the husband’s excessive spending including recent travel.  The wife said that she observed the debt to be increasing rapidly and was concerned to preserve the parties’ assets as much as possible.  Yet the wife has expended most of the $177 121.  She said she spent this as follows:

   ·$55 000 transferred to her lawyers to provide for her legal fees;

   ·$67 056 to purchase a new motor vehicle for herself and the children;

   ·$3910 to pay her outstanding tax to the Australian Tax Office (from the distributions to her from the D Trust);

   ·$744 to pay K’s pre-school fees;

   ·$456 to pay a mobile phone account and Foxtel;

   ·$647 for council rates;

   ·$200 for extra curricular activities of the children;

   ·$1800 as a deposit for J’s school enrolment;

   ·$6255 transferred to her account to meet living expenses; and

   ·$8000 transferred to her account on 1 July 2016 to pay living costs which included $4200 for outstanding landscaping costs in relation to the Suburb C property.

4. Since the account was frozen the husband has not paid interest on the facility.  The account is overdrawn by approximately $18 000 and the Bank has indicated that unless the account is brought into line it will commence to exercise its rights under the mortgage to sell the home. 

Interim Spousal Maintenance

1. Sub-section 72(1) of the Family Law Act 1975 (Cth) (“the Act”) provides in effect that a party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:

   ·by reason of having the care and control of a child of the marriage who has not attained the age of 18 years; or

   ·by reason of age or physical or mental incapacity for appropriate gainful employment; or

   ·for any other adequate reason;

   ·having regard to the matters referred to in s 75(2) of the Act.

Wife’s Needs

1. The wife is the primary parent of four children between the ages of 14 years and 5 years.  She has not worked in paid employment since 2007.  She wishes at least for some further time to remain out of the paid workforce in order to continue to devote her time and energy to the children.  It is clear that the husband is a busy professional and he has spent little time with the children since separation, no child having spent more than 11 nights with him between separation in January 2015 and June 2016.  The husband has informed the Court that he would like to spend more time with the children in the future.  As was also submitted on behalf of the wife, the wife has suffered from depression, she is also coeliac and in 2012 she was hospitalised for a transient ischemic attack (“mini stroke”) which has left her with some minor residual weakness in her left leg. 

2. The wife is a university graduate with many years’ experience in the banking industry in Country F.  But she last worked in paid employment in January 2007, and in Country F.  She had then become pregnant with the child J.  She said that the husband asked her to forgo employment and commit herself full-time to caring for him and the children so that he could focus on his career.  The wife is currently studying for a Masters degree which she hopes to complete in three years’ time.

3. Things have changed enormously for this family since 2007.  There are two more children to provide for.  And regrettably the parents have separated and now have significant increases in their living costs as a consequence of two households now being required to be funded.  The parties’ youngest child K has not yet commenced school.  He will commence school in January/ February 2017.

4. In all these circumstances, and for a limited time, in my view the wife is able to establish the threshold matter namely that she is unable to support herself adequately within the meaning of the legislation.  But in my view this will change next year upon K commencing school.  Then the wife will have some capacity to rejoin the paid workforce, at least part time.

5. Turning to the wife’s needs, in her financial statement the wife estimated her total weekly personal expenditure as being $5221.  This included the wife having estimated at Part N, her average weekly expenses as being $1158.  In fact this was in error and the total was $1320. 

6. In my view, these parties will not be able to achieve the same standard of living independently from one another as they were able to achieve when they cohabited.  That is, on present income, there will not be sufficient funds to meet the costs of both households as estimated by each party.  So bearing this in mind, I propose to make some modest adjustments to some of the wife’s estimates.  These are food, house cleaning, furniture, furniture repairs, appliances, linen/kitchenware/homewares, gifts/parties, driving lessons, entertainment, clothing and holidays to come up with a total of $1055. 

7. The wife provides estimates of her personal expenditure at Part G, including $138 for income tax.  I propose not to take this into account on the basis that if the husband proposes to avail himself of being able to arrange for Company D to direct 18 percent of the husband’s income to the wife, this will be a matter for him to arrange and to pay any consequent tax liability of the wife.  I accept that the wife would have to pay mortgage repayments of $877, rates of $113, home insurance of $48, health insurance of $80 and registration costs for her motor vehicle of $76 which would be total of $1194 per week.  The wife’s average weekly expenses of $1055 would be added to this to arrive at a total of $2249 per week. 

8. The wife’s estimated total weekly personal expenditure of $5221 included estimated costs of the children of $2731 per week.  I shall not include these because they relate to the child support departure application.

9. The wife is in receipt of no income at the present time.  As indicated above, she had previously been in receipt of the funds paid by the D Trust.  But this has ceased.  Her property consists of her interest in the former matrimonial home at Suburb C the value of her 50 percent interest she estimates at $925 000.  But this is subject to the mortgage, the wife’s 50 percent being approximately $365 000 plus 50 percent of the portfolio loans, her 50 percent being approximately $154 000.  The wife also has monies in accounts of approximately $30 629 as well as an interest in 50 percent of the $29 190 in the frozen NAB D Trust income account.  The wife also has an interest in superannuation of $81 980.

10. The wife has established a personal need for $2249 per week.  I note that this would mean that the wife would assume the entire responsibility for the mortgage whereas it is the case that the children also derive a benefit from that.  But in circumstances where, in my view this is a case where both interim spousal maintenance and child support will be paid by the husband, at least in the short term, it really does not matter.

Husband’s Capacity

1. In his financial statement the husband estimates that his income as a partner of Company D is $5109 per week.  The husband said that he arrived at the figure of $5109 after deducting 18 percent of his income, which he says he has arranged for Company D to direct to the wife as a tax saving measure.  Assuming that the wife is in receipt of this money, it would be $1121.49 per week.  But the relevant account was frozen in the circumstances to which I have referred above. 

2. There is an issue about what the husband’s current income is.  It is common ground that his “target income” for the financial year ending 30 June 2015 was $417 000.  Under the Company D partnership agreement the husband’s income is provided as follows:

   ·82 percent of his overall entitlement is received by direct payment from the partnership;

   ·20 percent of the 82 percent is held back until the end of July when five percent is released and 15 percent is released at the end of September;

   ·18 percent paid to the wife to a bank account in her name through the D Trust.  (As indicated above, this is the account that is frozen at present.)

3. Exhibit 1 is a document produced on subpoena by Company D setting out details of the husband’s income and including gross drawings.  This showed his gross drawings in the financial year ended 30 June 2015 as being a total of $433 198.  This was on a target income of $417 000.  The relevant document for the financial year ending 30 June 2016 showed gross drawings of $354 450 but to this would need to be added the final ratings adjustment ie the 15 percent payable in September ($50 040) which would make a total figure for gross drawings in 2016 of $404 490.  This is on the basis that the 15 percent would be $50 040.  But it was submitted on behalf of the wife that in fact that figure should be $78 748 rather than $50 040.  This was said to be on the basis that the wife sought details from the husband’s solicitor about how much he expected the 30 September 2016 lump sum final ratings payment would be.  By an email letter dated 22 September 2016 the husband’s solicitor informed the wife’s solicitor that the husband’s lump sum payment by Company D would be paid on or about 30 September 2016 and that the amount should be similar to the amount from last year.  That amount was $78 748.  It was submitted on behalf of the wife that this is the actual figure which the husband could expect to receive whereas the husband is asserting that the figure will only be $50 040.  The difference would be approximately $28 000. 

4. The husband’s income situation is even more complex than this.  He said in his affidavit that on 26 September 2016 he received a telephone call from his primary reporting partner Mr L who informed him that his target income was going to be dropped a level.  He said that this means that from 1 July 2016 his income will drop.  The husband said that he consulted the Company D income handbook and ascertained that his total income including the distribution of the 18 percent to the wife in the account to which I referred would be approximately $324 000 per annum rather than $417 000 per annum.  In support of this the husband swore an affidavit on 29 September 2016, the day of the hearing, to which he annexed a letter from Ms M, partner finance-director of Company D to provide information about his income.  The letter indicated that each partner has a target income set for each year commencing 1 July.  It indicated that the partner may not actually receive the full amount of their target income – this depends both on the performance of the firm (in other words, whether the firm meets its overall budget) and on the performance of the individual partner.  It indicated that actual incomes in relation to each financial period are generally finalised in around September of the subsequent financial period.  The letter went on to say that the husband’s target income for the year ending 30 June 2017 is $334 000. 

5. It was submitted on behalf of the wife that the Court would be more impressed with the documents provided by Company D on subpoena which indicated that the husband’s target income for the 2017 financial year was $417 000, the same as last year.  In support of this submission learned counsel for the wife tendered a media announcement by Company D Australia dated 9 August 2016 which included the following:

   [Company D] Australia has today announced its full year results to 30 June 2016, showing revenue growth of 11 percent to $1.92b, strong profit growth, and improvement across key non-financial metrics. 

6. It also referred to the following:

   We’ve also invested in digital platforms that will push us into new market segments.  Our [new product], which helps businesses …, has grown 200 percent year-on-year. 

7. I note that the husband is the co-founder of the new product and the partner, involved directly in the area. 

8. This material appears to be in marked contrast with the submission that the husband’s income is worsening.  The documents produced on subpoena by Company D are business records whereas the letter dated 28 September 2016 from Ms M is a self-serving letter which has been prepared for the specific purpose of these proceedings.  In my view the former documents are more persuasive than the latter.  I accept the submissions by the wife concerning the level of the husband’s salary, or as was submitted, his capacity for earning income.  I regard this as being $433 198 per annum.  The husband put no other material before the Court to indicate that the fortunes of relevant parts of Company D have deteriorated.  If it turns out that the view that I have arrived at about his income is incorrect of course it will be open to him to present further material to the Court about this matter in the substantive proceedings.

9. In his financial statement the husband estimated his total weekly costs at $6828.  At Part N of the financial statement he estimated his average weekly expenses to be a total of $1030.  I have made adjustments for holidays, chemist and pharmaceutical and gifts to arrive at $950.  Clearly some allowance must be made for expenditure on the children and I shall include this at $250 per week.  That makes his average weekly expenses at Part N of his financial statement $1200 per week.

10. In relation to other personal expenditure the husband estimated his total income tax as being $1790 per week but this was on the asserted reduced income which I have not accepted.  It was submitted by counsel on behalf of the wife that an addition of $700 ought to be added to this amount but, doing the best I can, I shall allow a further $900 on the basis that it will be open to the husband to structure payments to the wife so as to avail himself of the 18 percent Company D Service payments.  Accordingly, total income tax would be $2690.  The husband estimated his superannuation contributions at $592 per week.  It was submitted that these are optional.  I accept this submission and do not allow these superannuation contributions for the purposes of these immediate proceedings. 

11. The husband pays rent of $1023 per week for a two bedroom home unit.  It was submitted on behalf of the wife that this is in excess of the husband’s requirements and that a more appropriate weekly amount would be $800.  It was submitted on behalf of the husband that he has rented this unit because it provides amenities appropriate for him to be able to accommodate the four children and I accept this. 

12. The husband pays Company D mandatory life insurance of $38 and mandatory salary continuance insurance of $88 and I accept these.  The husband estimated his motor vehicle registration costs of $89 per week.  It was submitted on behalf of the wife that he has not demonstrated any need for three motor vehicles and should only be permitted the costs of running one for the purpose of this exercise.  I note that the husband said that the wife could have had the use of one of these vehicles yet chose to purchase a new vehicle for her own use.  In any event, the reality is that there are three motor vehicles registered and at this stage of proceedings I accept his estimate of $89. 

13. The husband makes weekly loan repayments in respect of borrowings for capital contributions to Company D of $133 per week. 

14. This is a total of personal expenditure for the items set out in Part G of his financial statement of $4061 including $2690 for tax.  To this must be added the husband’s average weekly expenses which, as indicated above, are accepted at $1200 per week.  Accordingly, the husband’s total weekly expenditure is $5261.  This would be annual personal expenditure of $273 572.  On the basis of my finding that the husband’s income earning capacity is $433 198 per annum the funds available to him after his expending $273 572 to meet his own needs would be $159 626 ($433 198 - $273 572 = $159 626), which is the weekly amount of $3070.

15. As indicated above the wife has personal weekly needs of $2249 which is $116 948 per annum.  Clearly the husband has the capacity to meet this need.  If he was to pay the wife this weekly amount the remaining balance from his income would be $821 ($3070 - $2249 = $821).

16. The husband’s property consists of his interest in the former matrimonial home, some modest funds in his personal bank account, the lump sum income payment he said would be imminent, three motor vehicles, his interest in Company D some money on trust with his solicitors, the estimated values of which are included in his financial statement and superannuation with a value estimated at $127 622.

17. The husband has liabilities to meet.  He said that the monies in the facility of approximately $177 000 which the wife withdrew and expended the large part of were to be applied in significant part to paying his tax and other liabilities.  He said that recently he paid part of his ATO tax liability but there is still $14 157 owing.  He said that in addition he is overdue to pay an instalment of $20 930 from 28 July 2016 and will be required to pay a tax instalment on 28 October 2016 in the sum of $21 558.  As I have said, there is approximately $29 190 in the D Trust account.  The husband could have the use of some of these funds for the purpose of paying outstanding tax.  Furthermore, as indicated above, he has informed the Court that he expects to receive approximately $50 040 being the final rating adjustment for financial year 2016 which as indicated above there is some reason to believe might turn out to be approximately $78 000.  This would appear to be sufficient to fund these liabilities.  He estimates his liabilities including in relation to the mortgage amount to $844 510.

18. As I have said, in my view, the wife has established the threshold requirement, a need and that the husband has the capacity to provide for her need.

Departure from Child Support Assessment

1. The first matter to consider is whether this Court has jurisdiction to entertain the departure application. It was submitted on behalf of the wife that the Court would exercise its jurisdiction because as provided for at s 116(1)(b) of the Child Support (Assessment) Act 1989 (Cth) (“the Assessment Act”) the Court could be satisfied that it would be in the interest of both parties to consider a child support departure application at the same time as the Court is considering the other interim and interlocutory financial applications before it. On the other hand it was submitted on behalf of the husband that these parties ought to ventilate any issues about child support in the appropriate way through the Child Support Registrar and the relevant procedures for dealing with any objections.

1. I must say, in my view, it would be in the interests of the parties to spare them the inconvenience of having to pursue a separate process for determining their child support dispute and for this Court to deal with that in the context of these proceedings.  After all, as was submitted by counsel for the wife, the Court is looking closely at the parties’ financial circumstances and their needs and capacities and it would be wasteful and somewhat of a duplication for the child support dispute to be determined outside of these proceedings. 

2. Sub-section 117(1) of the Assessment Act provides in effect that where application is made to a Court for an order in relation to a child in the special circumstances of the case and the Court is satisfied that one or more of the grounds for departure mentioned in s 117(2) exists or exist, and that it would be firstly, just and equitable as regards the child, the carer entitled to child support and the liable parent and secondly otherwise proper to make an order, the Court may make the order.

3. Sub-section 117(2) sets out the grounds for departure. It was submitted on behalf of the wife that the ground in s 117(2)(c) is available in this case. This is that in the special circumstances of the case, application in relation to the child of the provisions of the Assessment Act would result in an unjust and inequitable determination of the level of financial support to be provided by the liable parent for the child, because of the income, earning capacity, property and financial resources of the husband.

4. On 1 July 2016 the Child Support Registrar issued a child support assessment in respect of the children which requires the husband to pay child support in the monthly amount of $3560 which is an annual child support amount of $42 720.  It was submitted on behalf of the wife that this assessment was based on the 2015 taxable income of the wife of $45 796 attributed in respect of the income paid to her from the D Trust and based on a provisional annual income for the husband of $262 000.  It was submitted firstly that the wife has not received the $45 796 taxable income which was used by the child support registrar to assess the level of child support because the account was frozen.  It was further submitted that the $262 000 annual income attributed to the husband was well under his real income.  It was submitted, therefore, that application of the assessment formula has resulted in an unjust and inequitable determination of the level of financial support to be provided by the husband. 

5. In my view there is some force in this submission and in appropriate circumstances the Court could accept that the submitted ground would be available.  But there is a difficulty.  The next step in this process is to consider whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make an order. 

6. As indicated above, the husband, after paying for his own weekly needs of $5261 and if required to pay for the wife’s weekly needs of $2249 would have remaining from his weekly income the amount of $821.  As I have said, the current child support assessment is for the husband to pay child support for the four children at the monthly rate of $3560 which co-incidentally as it turns out, is a weekly amount of $822.

7. On my analysis, this $821 is what the husband would have available to meet his child support obligations.  If he was required to pay more, he would be forced to borrow funds which would require him to redirect income to the cost of such borrowing.  This would reduce his capacity to pay for his own needs and those of the wife and children.

8. The wife has estimated the children’s weekly costs as being some $2731.  In my view, some of the estimated costs appear high.  But even if one was to embark on an exercise of reducing these estimates, the reality is that the husband does not have the capacity to pay in excess of the current child support assessment if he is required to pay spousal maintenance, which in my view he should be, at least at this interim stage.

9. I have given consideration to the possibility of determining the application for departure from child support assessment before considering the interim spousal maintenance application. But s 117(4) of the Assessment Act provides as follows:

   In determining whether it would be just and equitable as regards the child, the carer entitled to child support and the liable parent to make a particular order under this Division, the court must have regard to:

   (a)      …
   (b)      …

   (c)…

   (d)      …
   (da)     …

   (e)the commitments of each parent who is a party to the proceeding that are necessary to enable the parent to support:

   (i)       himself or herself; or

   (ii)any other child or another person that the person has a duty to maintain; and

   (f)      …
   (g)      …

   [Emphasis added]

10. Given this requirement, in my view it is necessary to determine whether the husband has a duty to maintain the wife and, if so, the level of maintenance required, before determining the child support departure application.

11. As I have indicated, in my view the wife has established the spousal maintenance threshold requirement, at least at this interim stage.  And I have determined that the husband has the capacity to pay interim spousal maintenance.  But, as I have also found, his capacity to pay child support is limited to $821 per week which is virtually the same as the current assessment.

12. In these circumstances, in my view, the wife is not able to establish a ground for departure from the current child support assessment at this time and her departure application will be dismissed.

13. Unfortunately, on the basis of the evidence currently before the Court, there is insufficient income available to this family for all members to continue to enjoy the standard of living previously available prior to separation.  It is difficult to see, given the costs involved in providing for the children, that the wife will be able to continue not to work in paid employment, particularly once K commences school next year.  In any event, there would seem to be no reasonable option than for the parties to make some economies.  For a short time the wife will be able to pay the shortfall of income to meet the children’s costs from the approximately $30 000 remaining in her accounts from the $177 000 drawdown. 

Sale of the Former Matrimonial Home

1. The husband’s case is that the former matrimonial home at Suburb C be sold and out of the net proceeds of sale each party be paid $100 000 by way of partial property settlement.

2. There was a very strong submission on behalf of the wife against an order for sale.  It was submitted by counsel for the wife that the wife is seeking a substantive order that the husband transfer his interest in the former matrimonial home to the wife.  It was submitted that it would be most unfair to the wife not to permit her the opportunity to endeavour to find a way to be able to retain the home.  It was submitted that what the wife’s circumstances will be by the time of trial is unclear, that she might be able to be assisted by relatives in this regard.  It was also submitted that this Court has generally regarded it as being most undesirable to make an interim financial order which cannot be reversed at substantive hearing if necessary.  See for example Medlow & Medlow (2016) FLC 93-692 at page 81,090.

3. On the other hand it was submitted on behalf of the husband that it is unrealistic for the wife to think that she would be able to retain the former matrimonial home especially given the high level of her spending since separation.

4. The submissions on behalf of the wife are accepted.  Generally this Court is reluctant to make orders for living costs to be paid from capital unless there is no alternative.  See in this regard Bevan and Bevan (1995) FLC 92-600 at page 81,980. Although money in accounts will have to be used to pay liabilities, and in the case of the wife, ongoing living costs, in my view, for these parties, things have not yet reached the point where property will have to be sold. If the Court was to order sale of the home at this time, the very serious consequence would be that the wife and children would have to move out of their home and rent appropriate accommodation. This would be likely to be highly disruptive especially for the children.

5. I propose to dismiss this application.

Legal Costs

1. The wife is seeking what is commonly referred to as “a dollar for dollar costs order”.  In essence this is that upon the husband paying any amount of money to his solicitors for work done in these proceedings, the husband will pay the same amount to the wife’s solicitors.

2. The wife paid $55 000 to her solicitors from the approximately $177 000 drawdown.  But this is almost depleted.  She has no funds from which she can pay solicitors’ costs apart from the monies in her accounts.  But as I have said, she will need to use those funds to pay towards the costs of the children.

3. On the other hand, it is difficult to see that, upon this Court making the interim spousal maintenance order, and the husband continuing to pay child support, as well as his own costs, he will have any funds from which he could pay legal costs.

4. In relation to the matters set out in s 117(2A) of the Act, I have referred to the parties’ financial circumstances.

5. In relation to conduct, the wife has complained that the husband has not been completely forthcoming with all details about his financial circumstances as requested by her.  Amongst other matters the wife has sought clarification about what, if any, property the husband has in Country F.  She said that the husband has failed to respond to her requests about this.  At this interim stage of proceedings it is not clear to me whether or not there are problems about disclosure.

6. As I have said, it is difficult to see where the money to pay legal costs could come from, apart from selling the former matrimonial home.  As I have also said, in my view this ought to be avoided if possible.

7. In all these circumstances, in my view, if the husband is able to find some funds which could be directed to paying his legal representatives, then it would be just within the meaning of s 117(2) of the Act for the wife to apply a similar amount for the costs of her legal representation. Accordingly, in my view, the order sought by the wife in relation to the payment of legal costs should be made.

Orders

1. There will be specific orders for the husband to pay the weekly costs of the mortgage ($877), council and water rates ($113), electricity ($45) and gas ($29), house and contents insurance ($48) and repairs and maintenance ($53).  This is a total of $1165.  There will be an interim periodic spousal maintenance order for the balance of the wife’s costs as found above ($2249) the balance being $1084 ($2249 - $1165 = $1084).

2. There will also be an order for the husband to have the use of the money in the D Trust account of approximately $29 190 but this is to be used solely for the purpose of paying the mortgage arrears and his tax.

I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Johnston delivered on 14 October 2016.

Associate:

Date:14 October 2016