WELLESLEY & WELDON
[2013] FMCAfam 283
•28 March 2013
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WELLESLEY & WELDON | [2013] FMCAfam 283 |
| FAMILY LAW – Property adjustment – consideration of applicable principles – question of whether there should be a splitting order – spouse maintenance – child support – no special circumstance justifying departure. |
| Family Law Act 1975, ss.72, 75, 79, 117 |
| Hickey and Hickey and Attorney-General for the Commonwealth of Australia (2003) FLC 93-143, (2003) 30 FamLR 355 In the marriage of Lee Steere (1985) FLC91-626 In the marriage of Ferrarro (1993) FLC92-335 In the marriage of Clauson (1995) FLC 92-595 Stanford (2012) 293 ALR 70 Russell and Russell (1999) FLC 92-877 Teal & Teal [2010] FamCAFC 120 Gyselman and Gyselman (1992) FLC 92-279 Sheahan and Sheahan (1993) FLC 92-375 Hides and Hatton (1998) FLC 92-759 |
| Applicant: | MS WELLESLEY |
| Respondent: | MR WELDON |
| File Number: | WOC 92 of 2011 |
| Judgment of: | Foster FM |
| Hearing dates: | 11 & 12 March 2013 |
| Date of Last Submission: | 12 March 2013 |
| Delivered at: | Sydney |
| Delivered on: | 28 March 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Dura |
| Solicitors for the Applicant: | Willis & Bowring Solicitors |
| Counsel for the Respondent: | Ms Kennedy |
| Solicitors for the Respondent: | Johnson Horsley Lawyers |
ORDERS
That the husband and wife do all things necessary and sign all necessary documents to effect a sale of the property at Property B as and from 1 September 2013 and that upon sale of the property the proceeds of sale be applied as follows:
(a)in payment of agents commission and costs on sale,
(b)in discharge of the mortgage to the National Australia Bank,
(c)in payment of any rates adjustments payable on settlement provided always that in respect of any arrears of rates the wife be liable for such arrears,
(d)in payment of the balance then remaining as to 70% to the wife and as to 30% to the husband.
That the husband and wife have liberty to apply as to implementation of the preceding order on short notice.
That pending sale of the property as provided for in Order 1 the husband pay mortgage instalments in relation to that property as they fall due and payable.
That pending completion of the sale of the property as provided for in Order 1 the husband pay spousal maintenance to the wife in the sum of $500 per week first payment within seven days with such payment to be made by bank transfer to an account nominated by the wife within seven days from the date of this order.
That upon completion of the sale of the property as provided for in Order 1 the husband thereafter pay spousal maintenance to the wife in the sum of $1000 per week first payment within seven days from the date of completion of the sale of the property with such payments to be made by bank transfer to an account nominated by the wife within seven days from the date of this order and with such payments to continue for a period of 104 weeks from the date of commencement.
That there be a splitting order pursuant to s.90MT(1)(a) of the Family Law Act 1975 that whenever a splittable payment becomes payable in respect of the husband’s interest in the (omitted) Super Fund, the wife be entitled to be paid an amount calculated in accordance with the regulations, using a base amount of $117,701 and that there be a corresponding reduction in the entitlement the husband would have had but for this order and
(a)this order binds the Trustee of the (omitted) Super Fund and
(b)the operative time is the beginning of the fourth business day after the date of service of these orders on the Trustee of the (omitted) Super Fund.
That otherwise all applications before the court be dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Wellesley & Weldon is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
WOC 92 of 2011
| MS WELLESLEY |
Applicant
And
| MR WELDON |
Respondent
REASONS FOR JUDGMENT
The Proceedings
These are financial proceedings commenced by the applicant wife by application filed on 7 October 2011.
In her amended application filed on 12 July 2012 the wife in summary sought the following orders:
a)that the home at Property B be transferred to her,
b)that for a period of two years from the date of orders the husband pay mortgage payments in relation to that property,
c)that at the expiration of a period of two years the wife indemnify the husband in respect to mortgage payments and outgoings in relation to the property,
d)that there be a splitting order in favour of the wife from the husband’s superannuation in the sum of $117,000,
e)that the husband pay spouse maintenance in the sum of $500 per week,
f)that there be an order for adult child maintenance in respect to the child X in the sum of $500 per week until he completes his tertiary education,
g)that there be an order for adult child maintenance in respect of the child Y in the sum of $500 per week until she completes her tertiary education,
h)that there be a departure in respect to the husband's child support liability in that his liability for child support for the children Z and A be in the sum of $250 per week in each until they complete their secondary education or reach the age of 18 years whichever is the latter with such payments to be CPI indexed annually.
At trial the husband sought financial orders in terms of the minute of orders admitted into evidence as Exhibit B and in summary the orders sought by him are as follows:
a)that the parties sell the property at Property B and that upon the sale of the property the net proceeds of sale be divided as to 65% to the wife and 35% to the husband,
b)that there be a splitting order from the husband superannuation in favour of the wife in the sum of $63,324,
c)that otherwise orders sought by the wife be dismissed.
On 22 June 2012 financial orders were made pending further order as follows:
a)from 6 July 2012 the husband make repayments on the loan secured by way of mortgage over the former matrimonial home in the sum of $600 per week,
b)the husband pay to the wife by way of periodic spouse maintenance the sum of $300 per week first payment being within seven days and payable weekly thereafter directly into the wife's nominated bank account.
Background
The wife is presently 50 years of age as is the husband.
The parties commenced cohabitation in early 1985 and married on (omitted) 1987.
The parties separated in March 2009 at which time the husband left the former matrimonial home.
There are four children are of the marriage, X born on (omitted) 1992, Y born on (omitted) 1994, Z born on (omitted) 1999 and A born on (omitted) 2002.
Subsequent to separation all of the children have remained residing with the wife in the matrimonial home. The eldest child X is currently attending (omitted) University where he is undertaking an (omitted) course. Y completed her year 12 studies in 2012 and is enrolled as an undergraduate at the University of (omitted).
The child Z is in year nine at a selective high school and the child A is in year five at the local public school.
The husband presently spends time with the younger children on a limited basis each week and for periods of each school holiday. Regrettably it appears that he is estranged from the older children with whom he has some telephone contact.
The husband’s present child support liability in relation to the younger children by way of assessment dated 29 August 2012 is in the sum of $526 per week in addition to which he pays a sum for (omitted) training fees for the child A. Otherwise the mother pays for the costs of the younger children including their costs of accommodation and schooling in addition to which she provides support for the elder two children.
Cohabitation
At the commencement of cohabitation the parties had minimal assets. Following marriage the parties resided in a rental accommodation in (omitted) while saving for a home deposit.
In August 1990 the parties purchased a property at (omitted) for the sum of $128,000. The purchase price comprised the parties’ joint savings and a mortgage.
This property was sold in 1993 and the parties purchased a property at (omitted) for the sum of $230,000 with the purchase price comprising the net proceeds of sale of the (omitted) property in the sum of $46,500, joint savings and a mortgage of $183,500.
In 1997 in the parties sold the (omitted) property and purchased the present matrimonial home at Property B for the sum of $269,000. The purchase price comprised the proceeds of sale of the (omitted) property and a mortgage of $180,000. The mortgage was refinanced on occasions for the purchase of a motor vehicle and renovation costs.
In 2000 and for the parties borrowed by way of collateral security over the matrimonial home the sum of $174,057 to purchase an investment property at (omitted) for the sum of $167,279. The wife asserts that the purchase of this property was to secure the children's higher education costs for the future. However the precise purpose of the purchase is of little relevance.
The (omitted) property was sold in October 2007 and the net proceeds of sale of $92,401 was deposited to the parties’ joint account. These funds were depleted over a period to approximately August 2011 for living expenses, mortgage payments, credit card payments and the sum of $10,000 transferred to a children's education account.
Concession as to contributions
Both parties gave significant evidence as to the various contributions during cohabitation including financial, non-financial and homemaker and parenting contributions. Sensibly at trial the parties agreed that the contributions made by each of them at the date of separation was to be regarded by the court as equal. Thus the only assessment of contributions necessary is for the period from the date of separation to hearing.
Post separation
The children have remained in the primary care of the wife post separation thus requiring the wife to balance her ability to work with the care of the children, particularly the younger children. The husband has offered little assistance to the wife in this regard over and above his normal time with the children.
The wife is presently employed by (workplace omitted) as a (occupation omitted). She works between 15 and 20 hours per week earning a salary of $698 per week gross for a 15 hour week. Over the Christmas 2012 period she was able to increase her hours marginally by reason of assistance afforded to her in the care of the younger children by the child Y. It is the mother's expectation that her present position will cease by the end of 2013. At present the mother travels a significant distance for work with such travel taking her between four and five hours each day with her health circumstances making this travel for the purposes of employment extremely unpleasant.
The wife was able in late 2012 and early 2013 to work additional hours on contract but such work is no longer available to her. The wife suffers from systematic lupus symptoms, lower back pain and sciatic numbness which she asserts and the court accepts prevents her from undertaking full-time employment even if she was able to do so over and above her obligation to care for the children of the marriage. The mother engaged with a counsellor in relation to grief issues and depression in 2011/2012 for a period of three months.
The husband is employed as a (occupation omitted) by various organisations including (workplaces omitted). Throughout cohabitation the husband has worked in various positions as a (occupation omitted).
The husband asserts a history of depression. He is presently on appropriate medication and has more recently consulted a consultant psychiatrist Dr T. The husband first consulted his present psychiatrist in August 2012. The husband provided to his psychiatrist of a history of severe symptoms of depression that had been present for some weeks which commenced in the context of ongoing conflict with his ex-wife. On initial examination his psychiatrist noted major stresses in the husband's life together with financial issues and late work history at four different sites all of which are contributed to the deterioration of the husband's health. The husband presented to his psychiatrist with a depressed affect with melancholic features with the depression scoring in the severe range. Dr T noted that the husband had for some years been taking the antidepressant Sertraline, continued the husband on Zoloft and commenced him on a second antidepressant Valdoxan and discussed with the husband the need to restrict his working hours to a more manageable target. The husband was reviewed by Dr T on 4 September 2012, 18 September 2012 and on 6 November 2012.
On 22 January 2013, the last review by Dr T, the husband's mood was still depressed but overall without melancholic features. Dr T opines that the husband's prognosis for full recovery is somewhat problematic having regard to the complex origins of the husband's depressive disorder. The prognosis, says Dr T, is dependent upon a reasonable resolution and final settlement of the marriage and to a great extent on factors outside the husband's control such as the attitude of his children.
Dr T suggests that the husband will need to maintain antidepressant medication for a further two years and later this year be referred for more intensive psychotherapy.
The husband presently resides in rental accommodation.
Subsequent to separation and until May 2010 the parties continued to operate a joint account to which the wife had access. However in May 2010 the husband stopped the wife's access to the joint account and reduced his level of financial support for the wife's household to $200 per week. He continued to pay mortgage payments and for a short period utilities in relation to the home. From November 2010 until December 2011 the husband paid child support varying between $500-$750 per week for the children but he deducted from such payments monies expended by the wife that he thought was unwarranted. In December 2011 the husband commenced paying child support in the sum of $600 per week and in January 2012 until August 2012 in the sum of $800 per week.
In August 2012 the husband reduced his child support payments to $500 per week at which time the wife applied for a child support assessment in relation to the two youngest children.
Otherwise the husband paid the major proportion of school fees for the child Y until 2011 and the child A until 2013.
In relation to the home mortgage the husband substantially made mortgage payments from separation until trial save for payments over the period from 23 August 2011 until 17 January 2012 totalling $7,700 that were debited as against the pre-payments existing on the mortgage account as at separation.
The husband asserts that he ceased mortgage payments in August 2011 as he could not afford his child support obligations and to provide for his legal costs in relation to these proceedings that to date total some $40,000. At that time the mortgage was some $40,000 into advance as a consequence of payments made over the years.
The overall the effect of the husband's non-payment of various mortgage payments and various payments made to the mortgage by the wife since separation has been to increase the mortgage liability on the home over and above the amount owing at separation by the sum of approximately $5,000 allowing for an agreed redraw by the parties which was applied to repairs and renovations to the property in the sum of $10,000.
Since separation the wife has otherwise maintained the property including part painting the exterior, together with the gardens and grounds with little assistance from the husband.
After separation the husband received 2 small inheritances. The first in the sum of $10,000 was deposited into the parties’ joint account in June 2010 with those funds being accessed by the wife. The second in mid-2010 in the sum of $5,000 also deposited into the parties’ joint account.
The husband complains that since separation the wife has continued to draw funds from the joint account and otherwise but overall the court considers that the expenditure of such funds to be justified in that they need not be considered by the court as a factor in assessing post separation contributions.
Property: The Law
The approach to the determination of an application under s.9 of the Act is set out in Stanford v Stanford[2012] HCA 52.
As was observed by Ryan J in Wolter [2012] FamCA 1133
“The question which ultimately must be answered is whether it is just and equitable to alter the parties’ rights and interests in their property. The power to make a property settlement order must be exercised in accordance with legal principles, including the principles which the Act itself lays down. In this case the parties agree (as do I) that by reason of the manner by which they conducted their marriage, which has now irretrievably broken down, it is just and equitable that their interests and rights in property are altered; where they disagree is in relation to what that adjustment should comprise.
Thus, it is necessary to first, identify the nature of the parties interests in their property, liabilities and financial resources at the time of the hearing.
Then to evaluate the contributions made by the parties as defined in s 79(4)(a), (b) and (c) and the effect of any proposed order upon the earning capacity of either party.
I must then evaluate the matters contained in s 75(2) insofar as they are relevant, including any other order made under the Act affecting a party or child and any child support under the Child Support (Assessment) Act 1989 (Cth) (“CSAA”) that a party to the marriage is to provide, or might be liable to provide in the future, for a child of the marriage.
Consideration of whether it is just and equitable that an alteration of the parties’ interests is made and, if it is, its terms are required.
The first question must not be conflated with the outcome of the s 79(4) and s 75(2) deliberations, albeit these may inform the justice and equity determination.
Section 81 imposes on the Court an obligation, that as far as practicable, the orders will finally determine the financial relationships between the parties and avoid further proceedings between them.”
Thus the process ordinarily involves a staged process.
The court must identify the existing legal and equitable interests of the parties in the property, the liabilities and financial resources of the parties at the time of the hearing and then whether it is just and equitable to make a property settlement order.
Such a consideration should not be guided by an assumption that the parties rights to or interests in property are or should be different from those that then exist. The question is whether those rights and interests should be altered.
There is no presumption that one or other party has the right to have the property of the parties divided between them or a right to an interest in marital property that is fixed by reference to the various matters in s.79(4) (Stanford supra). This consideration addresses the prohibition in s.79(2) of the Act.
The court needs to conclude that it would be unjust or unfair to leave property rights intact. Such a conclusion can not be informed by reference to s.79 (4) and s.75 (2) factors.
In many cases this requirement is readily satisfied where the parties are no longer in a marital or defacto relationship and thus, for example, the common ownership or use of property by husband and wife will no longer be possible or the express or implicit assumptions that underpinned existing property arrangements such as the accumulation of assets or financial resources by one for the benefit of both have been brought to an end with the relationship.
In particular such a circumstance arises where both parties seek adjustive orders but are unable to agree as to same.
Once the s.79 (2) prohibition is overcome the court then considers the contributions made by the parties as defined in section 79 (4) (a) to (c). The court must then consider the subjective considerations as to the parties by having regard to the provisions of section 75(2) in so far as they are relevant. Such a consideration can include arguments as to asserted add backs, alleged waste by a party or other financial resources that it is contended should be added to the actual pool as notional property or liabilities.
In the light of the reconsideration of the role of s.79 (2) as a threshold question it would be appropriate for the court to consider the “justice and equity” of the actual orders to be made (see Russell and Russell (1999) FLC 92-877, Teal & Teal [2010] FamCAFC 120)) in the context of the courts obligation to make “appropriate orders” as provided for in s.79 (1) of the Act.
The s.79(2) Question: The Legal and Equitable Interests of the parties in Property
During the course of the trial the parties reached substantial agreement as to the legal and equitable interests of the parties in property.
The agreed position as to the parties assets and liabilities is as follows:
Joint matrimonial home at Property B $770,000
Wife motor vehicle $ 5,500
Wife savings $ 401
Wife (omitted) shares $ 3,065
Husband savings $ 200
Husband household contents $ 1,000
Wife household contents $ 3,270
Total: $783,436
Less:
Mortgage secured would over matrimonial home $375,953
Net: $407,483
Superannuation:
Husband (omitted) Super Fund superannuation fund $193,167
Wife Total superannuation $ 48,948
Total: $242,115
Thus the total asset pool of the parties is in the sum of $649,598.
It was contended by the husband that the court should have regard to his superannuation entitlement at the sum of $175,595 representing his superannuation entitlement at about the time of separation. However the husband took from the marriage his earning capacity by reason of his ongoing employment as a (omitted) over the years of cohabitation. Subsequent to separation the wife has managed part-time employment by reason of further obligation primarily to care for the children. In this circumstance the court considers appropriate to consider the husband’s accrued superannuation at date of trial.
The s.79(2) Question
The cohabitation of the parties was over a period of 23 years. Their relationship produced four children and the primary asset of the parties being the matrimonial home remains jointly owned. The common use of this property is no longer possible. Otherwise there is a significant disparity in superannuation by reason of contributions over the period of cohabitation. The underlying inference in relation to accruing superannuation benefits is the provision of retirement benefits for the parties to the marriage. As a consequence of the cessation of cohabitation this purpose is no longer a consideration.
In all the circumstances the court is satisfied that it is just and equitable to make and adjustive order under section 79 of the Act.
Contributions of the Parties
As referred to above the parties agreed that contributions during cohabitation should be regarded as equal as at separation. The issue for the court’s determination is as to whether there is a disparity in the parties’ respective contributions post separation.
It must first be noted that for the purposes of any adjustive order both parties contended that the court should regard all assets as one divisible pool. By reason of the history of the relationship and contributions referred to above the court is satisfied that this is an appropriate course.
The wife contended that contributions post separation should be regarded as equal. The husband contended that by reason of his significant financial contributions to the household comprising the wife and children post separation particularly in regard to maintenance of mortgage payments there should be an adjustment in his favour to reflect those contributions.
The court is not satisfied that the husband’s post separation contributions should be so recognised. Over the period from separation to trial the wife has shouldered the major burden of parenting the children of the marriage and maintenance of the home and household comprising the wife and the children. The husband’s capacity to make significant financial contributions is a capacity in terms of income earning capacity that accrued to him during the relationship.
Otherwise the husband contended that appropriate recognition should be afforded to 2 small inheritances received by him after separation and paid into the parties’ joint bank account. In the overall scheme the inheritances represent a very modest factor in terms of contribution and are mostly offset by the husband’s failure to continue mortgage payments and over a period of about five months, such failure resulting in an increase in mortgage debt even allowing for an agreed redraw for renovation purposes of $10,000 and some smaller capital sums paid into the mortgage by the wife from the parties’ joint account.
In all of the circumstances the court is satisfied that overall contributions as between the parties should be regarded as equal.
Section 75(2) Considerations
After considering the contribution-based entitlements of the parties court is required to consider the various factors set out in section 75(2) of the Act.
In this regard the applicant wife sought a further adjustment in her favour of 25%. It was contended that this adjustment reflected the parties’ disparity in income, the wife’s continuing primary parenting obligation in relation to the youngest two children, the husband’s ongoing child-support obligation and by reason of section 75(2)(o) the wife’s obligation to provide ongoing care and financial assistance for the two older children who are both at University.
The husband’s contention was that a proper consideration of the section 75(2) factors would lead the court to an adjustment in favour of the wife of 20%. The relevant factors in the husband’s contention being the health of the parties, the disparity in income, the wife’s continuing care for the two youngest children of the marriage.
The court has had regard to all of the factors in section 75(2) and is satisfied that in all the circumstances an adjustment in favour of the wife as to 20% is just and equitable.
Just and Equitable Order
Overall the wife is thus entitled to 70% of the pool available for division and the husband of 30%.
Such a division entitles the wife to a sum of $454,719.
The wife contended that she should receive a most significant proportion if not all of the equity realisable on sale of the matrimonial home. The parties agree that there should be an order for sale of the home with the property to be placed on the market for sale no earlier than 1 September 2013.
Should the court agree to the wife’s contention the result would be that the husband would be left with in effect his superannuation accrued during cohabitation and until hearing and little else in recognition of a marriage of 23 years.
The court is cognisant of the purposes behind the superannuation splitting scheme when introduced. It is open to the court to make appropriate provision by way of superannuation splitting subject to orders being just and equitable. Both parties are presently 50 years of age and have some years in the workforce ahead of them. It is clear that the husband will continue to accrue superannuation at a much greater rate than that of the wife even if she returned to full-time employment.
However the husband still has many years until he is able to access his superannuation entitlement as does the wife. As a consequence the court considers it inappropriate in all the circumstances to leave the husband as it were superannuation rich but asset poor. No doubt he will seek to purchase accommodation for himself and such of the children who spend time with him. The reality of him being able to do so at least in the short term will be limited by his financial capacity to meet other obligations such as the child support.
Otherwise the court is not satisfied that is appropriate to offset the husband’s superannuation on a dollar for dollar basis with the equity in the matrimonial home as of course his entitlement to superannuation is only realisable some years into the future.
In all of the circumstances the court is satisfied that the husband should receive a modest sum of capital from the proceeds of sale of the home.
Should the overall percentage entitlements of the parties be applied to the estimated net proceeds of sale of the matrimonial home the husband would receive approximately $118,000 and the wife approximately $275,800. Such an adjustment would then require an appropriate adjusted splitting order from the husband’s superannuation to the wife.
The court is satisfied it is appropriate that the overall entitlements of the parties be applied to the proposed net proceeds of sale of the matrimonial home and that the remaining assets including superannuation be adjusted in a like manner.
The wife presently has in her position or entitlement the following:
Wife motor vehicle $ 5,500
Wife savings $ 401
Wife (omitted) shares $ 3,065
Wife household contents $ 3,270
Wife Total superannuation $ 48,948
Total: $ 61,184
The Husband has:
Husband savings $ 200
Husband household contents $ 1,000
Husband (omitted) Super Fund superannuation fund $193,167
Total: $194,367
To facilitate an overall adjustment of these assets a mathematical splitting order in the sum of $117,701 in favour of the wife is called for. Having regard to the components of this discreet pool of assets the court is not satisfied that the mathematical splitting order should be reduced or discounted.
Accordingly orders to be made by the court will facilitate a sale of the matrimonial home at a time as agreed between the parties with a division of the net proceeds of sale as to 70% to the wife and as to 30% to the husband and that further there will be a splitting order in the sum of $117,701 in favour of the wife from the husband’s fund. Otherwise the parties shall retain other assets which are in their possession or to which they are presently entitled.
Spouse Maintenance
Section 72 of the Family Law Act 1975 sets out the relevant provision in relation to the right to maintenance. Section 72 provides that a party to a marriage is a liable to maintain the other party, to the extent that the first mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
b)by reason of a each or physical or mental incapacity for appropriate gainful employment; or
c)for any other adequate reason
having regard to any relevant matter referred to in subsection 75(2).
Having regard to the matters set out above in the court’s reasons for judgment, the court is comfortably satisfied that the wife is unable to support herself adequately by reason of having the care and control of the younger children of the marriage and by reason of her health.
The court finds that the wife’s present income is in the sum of $701 per week.
The wife’s expenses as set out in her financial statement excluding entertainment, hobbies and holidays are in the sum of $1,279 per week. Thus leaving a shortfall of $578 per week. This figure does not include the present mortgage payments which are in the sum of $600 per week or her rental obligation subsequent to sale of the matrimonial home which the court is satisfied will be in the order of about $600 per week.
Overall the wife’s shortfall is thus in the sum of $1,180 per week. In addition the wife has an obligation to maintain the children of the marriage to the extent that the children’s costs are not met by the husband’s child support obligation. Otherwise the wife has the obligation in relation to the two eldest children who are both at University and remain substantially residing in the matrimonial home.
In the event of a sale of the matrimonial home the wife will receive a not insignificant capital sum which would be available to her to invest should she choose to rent accommodation for herself and the children.
Taking a conservative figure of $250,000 available to the wife following sale invested at an interest rate of 5% as suggested during submissions, would result in an investment income to the wife of about $250 per week which of course would be liable to the impost of income tax.
The husband’s capacity to meet an obligation to pay spouse maintenance was the subject of detailed cross-examination. The court is satisfied that the husband’s income after tax comprises the sum of $1,955 together with sums totalling $618 per week received by him on a tax-free basis. Thus his available income is in the sum of $2,573 per week.
More recently the husband has ceased his casual work at (workplace omitted). It was contended by the wife that the court should have regard to this additional income capacity that historically was in the sum of about $187 per week. The court is not satisfied that it should do so by reason of the medical evidence available particularly from the husband’s treating psychiatrist who recommended that the husband scale back his work hours as a result of which the husband ceased his additional work at this (workplace omitted).
It was conceded by counsel for the husband that the husband’s reasonable expenses comprised:
Rent $ 270
(omitted) Life $ 11
Child Support $ 524
Adjusted Part N Expenses $ 561
Total: $1,366
Thus the husband’s mathematical capacity to meet a spouse maintenance obligation is in the sum of $1,207 per week.
The husband continues to make mortgage payments on the matrimonial home and will be required to do so pending sale of the property. However on sale his capacity to meet an obligation for spouse maintenance will be as stated.
The court has had regard to each of the relevant factors in section 75(2) and is satisfied that pending sale of the matrimonial home the husband by way of spousal maintenance should be required to pay mortgage payments on the home as they fall due and payable together with the further sum of $500 per week and that upon sale of the matrimonial home which is expected will not be completed until much later this year or indeed early in 2014 the sum of $1,000 per week for a period of two years.
Thereafter should the wife assert an ongoing need for spousal maintenance she will of course be able to make application in appropriate circumstances to vary the order by extending the time of its operation.
Child Support Departure and Adult Child Maintenance
In submissions counsel for the wife abandoned the wife’s claim for orders for adult child maintenance for the two eldest children of the marriage.
Otherwise as to child support the wife abandoned the substance of her child support application presumably having regard to the quantum of the present administrative assessment. The wife in submissions sought a child support departure order to extend the operation of the current assessment until such time as the subject children attain the age of 18 years or complete their secondary education whichever is the latter.
The current child support assessment is operative until 21 November 2013. The assessment that comprises Annexure A to the wife’s affidavit filed on 15 February 2013 reveals that the husband’s liability is assessed on a taxable income of $221,533. As explained in the assessment the figure used as the husband’s taxable income includes gross reportable fringe benefits.
In order to obtain a departure from an administrative assessment the ''three step process'' as explained in Gyselman and Gyselman (1992) FLC 92-279 at 79,064 must be followed:
"1. Whether one or more grounds of departure in 117(2) is established.
If so:
2. Whether it is ''just and equitable'' within the meaning of sec 117(4) to make a particular order.
3. Whether it is otherwise proper within the meaning of sec 117(5) to make a particular order. ''
The first step of the ''three stage process'' identified in Gyselman and Gyselman (1992) FLC 92-279 at 79,064 is to establish a ''ground'' for departure under section 117. A ''ground'' can only be established under s.117 if the facts and circumstances of the case amount to ‘‘special circumstances’’ as required by s.117.
The expression ''special circumstances'' was considered by the Full Court in Gyselman and Gyselman (1992) FLC 92-279 at p.79,065. The Court said:
"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 [(1990) FLC 92-131] (p 77,897), Kay J ... said that ''special circumstances'' were ''facts peculiar to the particular case which set it apart from other cases''. ''
In Sheahan and Sheahan (1993) FLC 92-375 the Full Court said at p 79,884 that the ''relevant facts of the particular case must be considered to determine whether they constitute special circumstances which ... if not taken into account, would result in injustice or undue hardship to any person’’.
It is clear that in determining whether special circumstances are demonstrated in a particular case all of the circumstances of the case must be considered. As was stated by the Full Court in Hides and Hatton (1998) FLC 92-759 at 84,355:
"...not only must the Judge apply the three stage process under sec 117(2), (4) and (5) in relation to the circumstances of the parties as they existed in the child support year in question, but also in relation to the present circumstances of the parties (if at all relevant). For example, it may well be necessary in a particular case in addition to considering the circumstances of the parties in the past child support year in question, also to consider the present capacity of the payer to meet a new assessment, and/or the impact on a payee of any credit in the payer's favour which might be created by a departure from an assessment for an earlier child support year. ''
In this matter both parties are PAYE salary earners. To the extent that the husband receives non-taxable fringe benefits in respect to a portion of his employment the child support legislation ensures that the gross fringe benefits payable are included in his income for the purposes of child-support assessment.
In future years the husband’s income may or may not vary but an administrative assessment will issue based upon his taxable income from time to time. In the event that the wife for whatever reason seeks a departure from the administrative assessments then they will be dealt with by the child support agency in the usual way.
In all the circumstances the court cannot identify nor indeed was it suggested in submissions on behalf of the applicant wife that a special circumstance existed that would facilitate the court embarking upon a child support determination.
Accordingly the wife’s application for child support departure as modified at hearing will be dismissed.
I certify that the preceding one hundred and three (103) paragraphs are a true copy of the reasons for judgment of Foster FM
Date: 28 March 2013
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