Wicklow and Wicklow

[2007] FamCA 792

FAMILY COURT OF AUSTRALIA

WICKLOW & WICKLOW [2007] FamCA 792

FAMILY LAW - CHILD SUPPORT - Application for departure
FAMILY LAW - SPOUSAL MAINTENANCE - Interim
FAMILY LAW - COSTS - Interim

Child Support (Assessment) Act 1989 (Cth) - s 117(2)
Family Law Act 1975 (Cth) - s 72, s 117(2)

APPLICANT: Mrs Wicklow

RESPONDENT: Mr Wicklow

FILE NUMBER: SYC 2648 of 2007

DATE DELIVERED: 29 June 2007

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Johnston JR

HEARING DATE: 29 June 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr P Campton

SOLICITOR FOR THE APPLICANT: Barkus Edwards Doolan, Solicitors

COUNSEL FOR THE RESPONDENT: Mr S Stewart

SOLICITOR FOR THE RESPONDENT: Watts McCray, Lawyers

Orders

1. That by consent an order is made in accordance with paragraph 6 of the document headed Exhibit A filed in Court today and signed by Judicial Registrar Johnston and placed with the Court papers as set out hereunder:-

“6.That within 7 days, the parties do all necessary acts and things to instruct Ms E of L to value:

6.1.the W Family Trust and its underlying assets including its interests in the following:

6.1.1.C Pty Ltd;

6.1.2.D Pty Ltd;

6.1.3.Q Pty Ltd;

6.1.4.The wife’s interest in the R Family Trust

6.2.the husband’s interest in:

6.2.1.C Pty Ltd;

6.2.2.Q Pty Ltd;

6.3.the parties’ respective interests in:

6.3.1.D Pty Ltd; and

6.3.2.W Holdings Pty Ltd;

6.4.each party’s respective interest in the W Superannuation Plan

as a single expert witness with the husband to pay such amount of the costs of the valuations, if any as determined by the Court, as and when they fall due.”.

1. That an order is made in accordance with Exhibit B filed in Court today and signed by Judicial Registrar Johnston and placed with the Court papers as set out hereunder:-

“1.That within 7 days of payment by or on behalf of the husband of any monies in payment of accounts:

1.1.rendered by the lawyers for the husband;

1.2.rendered by accountants engaged by the husband or the solicitors for the husband to value the interest of the husband in any company, partnership, trust or entity;

1.3.rendered by valuers engaged by the husband or the solicitors for the husband to report on and value the real and personal property of the husband and / or the wife in any company, partnership, trust or entity in which he has an interest;

the husband pay or cause to be paid an amount equal to that paid by the husband into the trust account for the solicitors for the wife.

2.That within 14 days of the date of these Orders the husband pay or cause to be paid to the solicitor for the wife an amount equal to the aggregate of any sums paid by or on behalf of the husband up to and including the date of these Orders to his family law solicitors (whether to their office or trust account), counsel, valuer’s or other expert witnesses in relation to these proceedings.”.

1. That pending further order the husband pay by way of interim spousal maintenance to the wife or as she shall in writing direct the sum of $3,200 per month, a month in advance commencing today.

1. That by consent and pending further order the husband shall pay all mortgage instalments at the current level in relation to the mortgages secured over the properties situate and known as M, New South Wales and N, Victoria as and when they fall due, as well as maintaining payments on the family’s private health insurance with U Health Fund as and when they fall due.

1. That the current assessment of child support in relation to the child C born in May 1990 be departed from but only in respect of the period from 1 December 2007 until May 2008 during which period the husband’s liability to pay child support for the child shall be at the rate of $417 per week.

1. That by consent the husband shall pay child support also by way of all educational expenses for the child C as and when same fall due including tuition, fees at D school, books, uniforms, sports equipment, extra curricular activities, excursions and the like.

1. That the time by which the husband is to comply with the directions made in the Minute of Directions filed on 21 May 2007 be extended to not later than 24 July 2007.

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 2648 of 2007

Mrs Wicklow

Applicant

And

Mr Wicklow

Respondent

REASONS FOR JUDGMENT

Introduction and Applications

1. Before the Court are various interlocutory applications.  The parties in the proceedings are Mrs Wicklow, to whom for convenience I shall refer as “the wife”, and Mr Wicklow, to whom for convenience I shall refer as “the husband”. 

2. There are a number of matters which are in dispute between the parties.  They fall into the broad description of issues concerning interim spousal maintenance, an application for a child support departure order and whether an order should be made, the effect of which would be to require the husband to pay in some form, part of the wife's costs in these proceedings. 

Background

1. The broad background matters are that the husband was born in August 1956.  The wife was born in January 1957.  They are both 50 years of age.  The parties married on 16 December 1978.  They separated on 19 February 2006.  They have three children, two of whom are adults.  The children are J, who was born in July 1984 and who is 22 years of age, A, who was born in December 1987 and who is therefore 19 years of age and C who was born in May 1990 and is 17 years of age. 

2. At the time that the parties separated the husband had been providing the wife with what might be described broadly as housekeeping of about $4000 a month.  After separation the husband reduced the amount to $3200 a month.  Then there were circumstances in which there were problems between the parties about money.  The wife said that she was finding herself unable to meet bills as they came in, including bills in relation to a holiday home that the parties own in Victoria.  In those circumstances the wife withdrew $15 000 from the W trust account.  That coincided with about Christmas last year.  As a consequence, the husband said that he was unable to meet his commitments and therefore he stopped paying what had been the housekeeping money to the wife. 

3. That is probably the matter that precipitated these proceedings.  Unfortunately the parties are now at odds in respect of a multiplicity of issues. It is to be hoped that the matter will settle down, and particularly, that the parties will be able to undertake some further work in the direction of investigating and preparing matters for the substantive proceedings.  Hopefully, assuming that that can be done soon, the parties will be able to have a useful financial conciliation conference.  One would hope that they would be able to achieve resolution of their outstanding substantive dispute. 

4. The present applications are in the context of overall net property of these parties of approximately $4.5 million. 

Interim Spouse Maintenance

1. The first area of dispute is interim spousal maintenance.  The wife seeks an order which would have the effect of requiring the husband to pay to her an amount of $4264 per month, monthly in advance, and certain other matters which is it probably unnecessary to refer to.  The husband asks the Court to make an order which would involve a periodic payment of something like $2600 or $2800 a month to the wife, and in addition the husband would pay various other matters.  These are the mortgage instalments in respect of the two properties that the parties own.  The first of those properties is the former matrimonial home at M in which the wife and the three children continue to reside.  The other property, as I say, is a holiday home at N just outside Melbourne.  So that the husband would pay those mortgage instalments.  He would continue to pay health insurance for the family. 

2. There appears to be no issue about the threshold matter, that is, that the wife requires maintenance.  This is on the basis that she has not worked full time in income-producing work since 1984.  She has a Bachelor of Arts degree, which was conferred many years ago.  The wife had sought to update her skills in the sense that approximately 10 years ago she completed a one-year Associate Diploma at a design school.  She has been working perhaps two and a half days a week as a design consultant.  The wife also sells some handicrafts which are her own works and that also provides her with a very modest amount of income.  So that on the basis of what she includes in her financial statement, the wife's income is something like $307 per week. 

3. I do not propose to go into any detail about the parties' property and I have indicated the ballpark net amount.  There are matters on each party’s side of the ledger, as it were, in relation to which it has been suggested that those items could be liquidated to be able to meet some of the parties' necessary expenditure.  Perhaps the prominent items are, on the wife's side, a share portfolio which on my calculation comes to a total value based on her estimates of something like $110 000.  Over quite some years the wife has been in receipt of distributions from a family trust on her side of the family.  She says that she has drawn on amounts from this in order to be able to make ends meet in terms of housekeeping and other costs over the years. Those are resources and property on which the husband says the wife should be making a call to meet her reasonable expenses, her legal costs and some of the costs of the children.

4. On the other hand, the wife points to certain property of the husband.  The husband has a number of prestige and perhaps other motor vehicles which the wife says he could liquidate and turn into funds which would enable the family to have more cash available to meet its necessary commitments. 

5. The wife in her financial statement says that she has total personal expenditure of an amount in the vicinity of $6000 per week.  This includes mortgage payments in respect of each of the properties.  As I say, the husband has approached the exercise on the basis that he would meet those mortgages.  Those estimates by the wife include her average weekly expenses, which is really her personal expenditure.  She estimates in her financial statement that that comes to a total of $984 a week.  From that, the wife accepts that there should be an adjustment of $125 a week because she included that as a weekly amount required to meet her legal fees and she has asked the Court to make an order that the husband pay her $100 000 interim costs for such fees.  For the purposes of this exercise, I propose to remove that amount.

6. I also approach this exercise of determining the wife's reasonable needs on the basis that, as I have said, the husband will pay the mortgage on both properties and the family health insurance.  This would leave the wife in the position of having to pay rates in respect of both properties, home and contents insurance in respect of those properties and expenses of her own motor vehicle.  On that basis, and reducing the amount to some extent contained in the wife's part N of her financial statement, I find that the wife's weekly costs come to something like $1000. 

7. The wife has approximately $300 a week to meet those costs.  But of course what that does not take account of the wife’s responsibility to meet at least part of the costs of the adult children who are still living at home.  It is obvious that neither of the parents proposes simply ignoring the costs of those children.  But although these are not proceedings which involve directly any application for any orders in respect of those children, in my view, for the purposes of the wife's spousal maintenance application those costs cannot be ignored. 

8. What that responsibility does is reduce the wife's capacity to be able to provide for her own needs in terms of that $300 per week. 

9. Bearing this in mind in my view, the appropriate amount in terms of the wife's needs, so as to be able to enjoy a reasonable lifestyle is the figure of $3200 a month. 

10. In arriving at that, I have also taken into account the husband’s position.  He has indicated to the Court that he sees the preferable course as being for these parties to join in orders, the effect of which would be to require the sale of the N property.  From the husband's point of view, that would alleviate the need to pay mortgage repayments.  It would alleviate other costs which I have referred to.  I would have thought in the context of this family now having to try and find funds to keep going not two but three properties that that was not an unreasonable proposition.  But that is something which obviously the wife does not wish to do. 

11. The question then becomes in circumstances where, in my view, the wife has made out a reasonable case for interim spousal maintenance of $3200 per moth – and I have not lost sight in arriving at this sum of the fact that the wife has got her shares and that she has also been able to rely on some distributions from a family trust in her time over the years – is it reasonable in all circumstances for the husband to be required to meet such an amount. 

12. The husband approached the matter on the basis that he was asking the Court to make an order of about $2800 per month.  He says that is all he can afford in the circumstances where he says his own personal expenditure comes to approximately $9945 a week.  The husband is an finance manager.  He says that his average weekly income is $5007, which on my calculation comes to something like $260 000 per annum.  I must say it is unclear to me at this point what the husband's income is.  Perhaps that is something which will become clearer in the fullness of time.  There have been endeavours on the part of the wife to try and find out what the position is in relation to his income.  Following correspondence by the wife to the husband's solicitors, the husband approached his accountants and asked them to prepare appropriate documents.  In fact he had asked his accountants to prepare the documents before there was correspondence between the parties.  But the long and short of it appears to be that the accountant has not been able to prepare the husband's income tax returns.  I think the husband receives his income from a corporation which he operates with others and also by way of a trust.  The letter from the accountant estimated the husband's income for the financial year ended 30 June 2006 as having been a total of $184 600 as well as an amount of $9908 which was paid on his behalf to his superannuation fund.  This is a total of $194 508.  

13. Issue was taken on behalf of the wife with the husband's assertions about his income.  This is, firstly, on the basis that it is not clear at this point what the husband’s income is.  Learned counsel for the wife points to the 2005 income tax return of the husband in which his taxable income was recorded at something like $400 000.  The husband points out that that was an extraordinary figure because included in that amount was a capital gain of around about $94 000.  In those circumstances it seems to me that the husband's income would appear to fall within the broad field of somewhere between about $200 000 and $300 000 per annum. 

14. The submission which is made on behalf of the husband is that he does not have income which can support the sort of order that the wife is seeking and even the order which the Court would make on the basis of a finding of the wife's reasonable needs as being $3200 a month.  On the other hand, it is vigorously submitted on behalf of the wife that the Court looks not only at income but at income earning capacity, property and financial resources.  In circumstances where the husband has control of his income, control of a considerable amount of property of the parties, and particularly the personal property, then, in my view, the Court should not be shy about making such an order.  This submission is reinforced by submissions to the effect that certainly over the last couple of years the husband's lifestyle factors would lead the Court to be reasonably confident that the husband will be able to comply with such an order.  He has been able to find the funds to pay the rent on a waterfront unit where he lives.  Apparently he has been able to fund various lifestyle matters such as some overseas travel.  He has an interest in boating and that obviously comes at a fairly significant cost.  I was taken to some of the costs involved where the husband is able to keep various membership subscriptions to sporting clubs, although, to be fair to the husband, there was some evidence that he had been selling some of his boats, or perhaps all of his boats.  I presume that would be to try and get cashed up to meet the various expenditures that he says he has.

15. I was reminded during the course of the hearing as I and others have said on numerous occasions, the task at the present time is one in which the Court does not have to be too particular about making findings, and especially where there will be ample opportunity for the Court to consider the matter in much greater detail in a substantive hearing.  Any unfairness or prejudice which may be done to the parties through interlocutory orders would be able to be rectified.  The parties would be able to be compensated at that time for any difficulties caused to them.

16. Accordingly, in my view, the spousal maintenance application succeeds, but it only succeeds to the extent of the figure that I have indicated, that is, $3200 per month.

Child Support Departure

1. That takes me to the issue of child support departure.  This can be disposed of fairly simply because the application just does not succeed.  This application was in effect that the current child support assessment be departed from and that in its place an order be made, the effect of which would be to require the husband to pay in respect of the parties' daughter C an amount of $417 per week.  The child's father has indicated that he is prepared to pay the costs of the child in respect of her education at D school, including tuition fees and the other educational expenses, books, uniforms, sports equipment, extracurricular activities and excursions and those sorts of matters which are involved in that private school education.

2. The task of the Court is to consider whether there has been a ground established for departure from the current assessment.  What is estimated by the wife in her estimates of the costs of the child set out at Part N of her financial statement is that C's costs to her mother would be $834 per week.  But that amount would include an amount of $417 (which just coincidentally happens to be half that amount) which the wife estimated would be the education expenses for the child.  As I have indicated, those are going to be met by her father.  I just pause to note that there is apparently an account of about $7500 which I think is owing and another similar account expected.  That should have the effect of fulfilling all the parties' obligations in respect of D school and happily that should have the effect of enabling the child to complete her secondary school education.

3. What needs to be established in this sort of application for a child support departure is one of the grounds pursuant to s 117(2) of the Child Support (Assessment) Act.  Learned counsel for the wife has submitted that the relevant ground is that based on the income, property and financial resources of the parents.  In my view, the amount which would be over and above the amount which the child's father is currently required under the assessment to pay, would really be quite modest.  I have in mind a figure of about $327 per week which the current child support assessment requires the father to pay.  There might be some case for suggesting the child's reasonable and proper costs would include some small adjustment beyond that amount.  In my view, it would be a small adjustment and too small to fall within the requirement at law of a ground in the special circumstances of this case.  So in those circumstances, in my view, that application fails.

Interim Costs

1. That takes me to the last of the financial matters.  That is, the wife's application to the effect that the husband pay into her solicitor's trust account the sum of $100 000 within 28 days on the basis of interim costs.  How that matter would be treated by the Court ultimately in the substantive proceedings would be a matter which would be for the trial Judge to determine.  Or in the alternative to that application, that the husband pay what might be colloquially described as a dollar-for-dollar order.  That is, for every dollar that he spends on his own legal costs, then he provides in effect the same amount to the wife's solicitor for the wife to put towards her obligation in respect of legal costs.

2. I must say I am not enamoured of the $100 000 order.  Again I take into account those matters that I have referred to earlier, and particularly the husband's suggestion that the wife ought to join with him in selling the home at N.  I take into account also the very strong submission on behalf of the wife that it would be reasonable to expect the husband to sell one of his prestige cars or something else in order to be able to produce a fund.  I take into consideration the wife's financial circumstances generally, particularly the share portfolio and the financial resources I referred to.  I am persuaded that it is reasonable in all the circumstances for the alternative order to be made.  That will require the husband to pay future costs of the wife on a dollar-for-dollar basis. 

I certify that the preceding twenty seven (27) paragraphs are a true copy of the Reasons for Judgment of Judicial Registrar W P Johnston

Associate:     

Date:              7 August 2007

IT IS NOTED that this judgment for all publication and reporting purposes be referred to as WICKLOW & WICKLOW