Badir & Badir
[2022] FedCFamC1A 109
•19 July 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1) APPELLATE JURISDICTION
Badir & Badir [2022] FedCFamC1A 109
Appeal from: Badir & Badir (No 2) [2021] FedCFamC2F 335 Appeal number(s): NAA 60 of 2021 File number(s): SYC 7739 of 2020 Judgment of: MCCLELLAND DCJ Date of judgment: 19 July 2022 Catchwords: FAMILY LAW – APPEAL – Leave to appeal – Whether the appellant should be granted leave to appeal against an interim spousal maintenance order – Whether the primary judge erred in their assessment of the respondent’s income – No error established – Where the appeal is without merit – Leave not granted – Appeal dismissed – Costs ordered in a fixed sum. Legislation: Evidence Act 1995 (Cth) s 140
Family Law Act ss 72, 74, 75(2), 79A, 117
Federal Circuit and Family Court of Australia Act 2021 (Cth) s 28
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 12.17
Cases cited: Allesch v Maunz (2000) 203 CLR 172; [2000] HCA 40
Babett & Falconer (2015) FLC 98-067; [2015] FamCAFC 124
Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; [1995] FCA 350
Bilson & Geer (Costs) [2017] FamCAFC 7
Brown & Brown (2007) FLC 93-316; [2007] FamCA 151
Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33
Crawford and Crawford (1979) FLC 90-647; [1979] FamCA 38
Drysdale & Drysdale [2011] FamCAFC 85
Fitzgerald v Fish (2005) 33 Fam LR 123; [2005] FamCA 158
FJ & PN Curran Pty Ltd v Almond Investors Land Pty Ltd [2019] VSCA 236
Gilligan and Addison [2018] FamCAFC 211
Graham & Squibb (2019) FLC 93-892; [2019] FamCAFC 33
Greedy and Greedy (1982) FLC 91-250; [1982] FamCA 41
Hall v Hall (2016) 257 CLR 490; [2016] HCA 23
House v The King (1936) 55 CLR 499; [1936] HCA 40
Housing Commission (NSW) v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378
Lee v Lee (2019) 266 CLR 129; [2019] HCA 28
Luadaka v Luadaka (1998) FLC 92-830; [1998] FamCA 1520
Manesh & Manesh (No 2) [2021] FamCAFC 47
Maroney & Maroney [2009] FamCAFC 45
McCrossen & McCrossen (2006) FLC 93-283; [2006] FamCA 868
McDonald v Queensland Police Service [2018] 2 Qd R 612; [2017] QCA 255
Metwally v University of Wollongong (1985) 60 ALR 68; [1985] HCA 28
Mitchell and Mitchell (1995) FLC 92-601; [1995] FamCA 32
Norbis v Norbis (1986) 161 CLR 513; [1986] HCA 17
Phoenix Institute of Australia Pty Ltd v Australian Competition and Consumer Commission [2017] FCAFC 155
Redman & Redman (1987) FLC 91-805; [1987] FamCA 2
Rigby & Olsen [2021] FedCFamC1A 46
Robinson Helicopter Company Inc v McDermott (2016) 331 ALR 550; [2016] HCA 22
Saxena and Saxena (2006) FLC 93-268; [2006] FamCA 588
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418; [1950] HCA 35
Water Board v Moustakas (1988) 180 CLR 491; [1988] HCA 12
Whisprun Pty Ltd v Dixon (2003) 200 ALR 447; [2003] HCA 48
Number of paragraphs: 77 Date of hearing: 29 April 2022 Place: Sydney (via videolink) Counsel for the Appellant: Mr Jackson Solicitor for the Appellant: Michael Vassili Barristers & Solicitors Counsel for the Respondent: Mr Rosic Solicitor for the Respondent: Taylor & Scott Lawyers ORDERS
NAA 60 of 2021
SYC 7739 of 2020FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
DIVISION 1 APPELLATE JURISDICTIONBETWEEN: MR BADIR
Appellant
AND: MS BADIR
Respondent
ORDER MADE BY:
MCCLELLAND DCJ
DATE OF ORDER:
19 JULY 2022
THE COURT ORDERS THAT:
1.The appellant’s application for leave to appeal is refused.
2.The Notice of Appeal filed 8 November 2021 is dismissed.
3.The appellant pay the respondent’s costs in the sum of $17,416.65 within 28 days.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Badir & Badir has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
MCCLELLAND DCJ:
INTRODUCTION
This matter concerns an appeal from interim orders made by a judge of the Federal Circuit and Family Court of Australia (Division 2) (“the primary judge”) on 29 October 2021 that provided for the appellant husband, Mr Badir (“the appellant”), to pay the respondent wife, Ms Badir (“the respondent”), $600 per week by way of interim spousal maintenance. Significantly, for the purpose of this appeal, the primary judge ordered that the appellant’s obligation to do so commenced as at the date that the respondent left the matrimonial home and re-housed in alternate accommodation.
As this is an appeal against an interim order, the appellant requires leave pursuant to s 28 of the Federal Circuit and Family Court of Australia Act 2021 (Cth). Both the application and the appeal cover common factual and legal issues and the perceived strength of the appeal will influence the determination of whether leave to appeal should be granted.[1] In those circumstances and with no objection from the parties, I considered the issue of leave together with the substance of the appeal. As I have found the appeal to be without merit, I have dismissed the appeal with costs.
[1] Phoenix Institute of Australia Pty Ltd v Australian Competition and Consumer Commission [2017] FCAFC 155 at [42]
BACKGROUND
The appellant was born in 1972 and the respondent was born in 1973.
The parties initially commenced cohabitation in 1993 and separated for the first time in July 2013. During that period they had a son, X, born in 2002.
The parties had a reconciliation in June or July 2014, however they subsequently separated on a final basis in July 2020. The parties nevertheless continued to reside under the one roof and continued to do so up until the matter was heard by the primary judge.
During the period between the parties’ initial separation in 2013 and final separation, the respondent had, in April 2013, served the appellant with an Initiating Application seeking final parenting and property orders. Those proceedings were resolved during the period of the parties’ second reconciliation by way of consent orders made on 20 August 2014 by Judge Walker, now retired, of the then Federal Circuit Court of Australia.
The consent orders contained a notation that “the [appellant] advised the court today that the parties have reconciled.” It did not appear to be disputed that the effect of the consent orders was as follows:
BY CONSENT IT IS ORDERED:
1.That within fourteen (14) days from the date of these orders, the [appellant] shall do all things and sign all documents necessary to transfer to the [respondent] his right, title and interest in the hotel timeshare membership.
2.That the [respondent] be entitled to her 49 shares held in A Bank Group free from any interest of the [appellant] and shall indemnify the [appellant] in relation to any and all debts attaching thereto.
3.That the parties shall do all things and sign all documents necessary to transfer the sum of $122,491.05 being the net proceeds of sale of the former matrimonial home held in B Lawyers trust account as follows:
a.60% to the [respondent] in the sum of $73,494.63; and
b.40% to the [appellant] in the sum of $48,996.42.
4.That the [respondent] be entitled to her business known as C Company free from any interest of the [appellant] and shall indemnify the [appellant] in relation to any and all debts attaching thereto.
5.That the [appellant] be entitled to his business known as D Company free from any interest of the [respondent] and shall indemnify the [respondent] in relation to any and all debts attaching thereto.
6.That the [appellant] be responsible for the following credit cards:
a.Commonwealth Bank Mastercard
b.A Bank – Card
c.E Bank
d.F Bank
e.G Bank Mastercard
Free from any interest of the [respondent] and shall indemnify the [appellant] in relation to any and all debts attached thereto.
7.That the [appellant] be responsible for H Bank Credit Card free from any interest of the [respondent] and shall indemnify the [appellant] in relation to any and all debts attaching thereto.
8.Pursuant to section 79 Family Law Act 1975, the [respondent] is entitled to be the sole legal and beneficial owner of all other property including superannuation currently in her possession and/or control free from any interest of the Husband and shall indemnify the [appellant] in relation to any and all debts attaching thereto.
9.That pursuant to section 79 Family Law Act 1975, the [appellant] is entitled to be the sole legal and beneficial owner of all other property including superannuation currently in his possession and/or control free from any interest of the [respondent] and shall indemnify the [respondent] in relation to any and all debts attaching thereto.
10.Pursuant to Sec 106A of the Family Law Act, the Court may appoint an officer of the court or other person to execute the deed or instrument in the name of the person whom the direction was given and to do all acts and things necessary to give validity and operation to the deed or instrument in the event that either party fails, refuses or neglects to execute any deed or instrument necessary to give effect to these Orders.
(As per the original)
In mid July 2017, the appellant purchased a hospitality franchise in his sole name as the director of J Pty Ltd. He was initially the sole director and 100% shareholder of the company. In 2018, the respondent became a co-director of J Pty Ltd and an equal shareholder.
The appellant contends that, between October 2018 and September 2021, the respondent withdrew at least $72,893.12 from J Pty Ltd which he asserts was used for her personal expenses, including in respect to financing a motor vehicle for her personal use. Of this amount, the appellant contends that $35,212.03 was sourced directly from the N Bank account ending in 36 (“the J Pty Ltd business account”) and, during the period October 2018 to May 2021, $37,681.09 was withdrawn by the respondent and placed in her AMEX account ending in 01 for further personal expenditure. This, the appellant contends, is corroborative evidence of the respondent applying the funds from the J Pty Ltd business account for her personal expenses.
Comparatively, the respondent contends that funds sourced from the J Pty Ltd business account were used to maintain the motor vehicle which she used and continues to use for the purpose of the business.
On 30 October 2020, the respondent filed an Initiating Application in which she sought final orders in relation to a property settlement between herself and the appellant, including various interim orders. That application is relevant only to the extent that it included an application for interim spousal maintenance. Specifically, the respondent sought an order:
That commencing the first Monday from the date of these Orders, the [appellant] shall pay to the [respondent] by way of periodic spousal maintenance the sum of $775 per week into an account nominated by her.”
On 26 November 2020, the appellant filed his Response to the respondent’s Initiating Application, which sought orders for the respondent’s Initiating Application to be dismissed with costs and “that within 14 days of the date of these orders, the [respondent] shall vacate the matrimonial home.”
On 30 June 2021, the primary judge set the respondent’s substantive application down for a callover for the purpose of allocating a hearing date to hear the respondent’s application pursuant to s 79A of the Family Law Act (“the Act”). The respondent’s application for interim spousal maintenance was for the purpose of sustaining herself until that final hearing occurred.
On 29 October 2021, the primary judge made the following orders:
2.The liability of the [appellant] to pay spousal maintenance to the [respondent] on an interim basis being in accordance with these orders will commence only upon the [respondent] ceasing to reside at the matrimonial home, and establishing her own residence in alternate premises.
3.Upon the [respondent] establishing her own residence as referred to in order 2 herein, the [appellant] shall pay to the [respondent] periodic spousal maintenance on the interim basis in the sum of $600 per week, with the first such payment to be due and payable on the Monday following written notice to the [appellant] from the [respondent] she has established her own residence and taken occupation thereof, such payment to be made into an account with a financial institution in the [respondent’s] name, with the [respondent] to notify the [appellant] of the details thereof in the same written notice.
The appellant has appealed against those orders by Notice of Appeal filed 8 November 2021.
GROUNDS OF APPEAL
The grounds of appeal are as follows:
1.The Court erred in finding that the Respondent Wife was unable to support herself adequately under section 72 of the Family Law Act 1975 (Cth) in failing to consider the totality of the evidence represented by:
a. the personal expenses of Respondent Wife paid directly by her employer, J Pty Ltd, embodying an additional form of income for her, in that those payments did not form part of her gross salary of $750 per week; and
b. the monies available to the Respondent Wife through her status of the company J Pty Ltd as a Co-Director and 50% shareholder, and in particular, related to the unlimited availability of monies unilaterally obtained by her for her personal benefit, derived from the N Bank Account #36, owned and operated by J Pty Ltd.
2.The Court erred in calculating the quantum of Spousal Maintenance payable by the Appellant Husband to the Respondent Wife of $600 per week, in failing to account for the Wife’s personal expenses unconditionally paid by J Pty Ltd.
3.The Court erred in failing to make findings as to the Respondent Wife’s capacity for gainful alternative employment, and thereafter assessing whether that alternative employment would be adequate to support the Respondent Wife adequately.
4.The Court erred in making a conditional order for Spousal Maintenance referrable to the Respondent Wife leaving her then place of residence in relation the family home, in that there were no findings made by the Court as to:
a. when the Respondent Wife would leave her residence and consequently;
b. what the financial circumstances of the parties would be at that time of the Wife leaving the family home.
(As per the original)
APPROACH AND LEGAL PRINCIPLES
Approach
As noted by Austin J at [19] in Gilligan and Addison [2018] FamCAFC 211, unless an appeal can be categorised within those recognised grounds concerning the appropriate exercise of discretion by a trial judge, as identified by the High Court in House v The King (1936) 55 CLR 499 (“House v The King”) at 505 and Norbis v Norbis (1986) 161 CLR 513 at 539–540, the appeal will be futile.
This relevant principle, as adumbrated in House v The King at 504–505, states that appellate intervention may be required where the primary judge:
(a)Acts upon a wrong principle; or
(b)Allows extraneous or irrelevant matters to guide or affect the decision; or
(c)Mistakes the facts; or
(d)Fails to take into account some material consideration; or
(e)Makes a decision that, upon the facts, is unreasonable or plainly unjust.
An appeal may also succeed on the basis of an inadequacy of reasons. In that respect, in Rigby & Olsen [2021] FedCFamC1A 46, the Full Court recently stated at [38] that:
The requirement for the giving of reasons is a fundamental requirement of the exercise of the judicial function, as it both demonstrates that justice has been done, and enables the proper challenge of a decision. The content required varies depending upon the circumstances of the case, but is that which makes apparent how the decision was arrived at (see Bennett and Bennett (1991) FLC 92-191 at 78,266). It is not required to give reasons regarding every argument, nor to perform a microscopic analysis "if, in all the circumstances, it is clear that the trial judge has considered and evaluated the relevant evidence, taken into account all relevant factors…" (A v J (1995) FLC 92-619 at 82,230).
The appropriate process to follow in considering an application for spousal maintenance is the four step process as set out in Saxena and Saxena (2006) FLC 93-268 per Coleman J:
(1)To what extent can the applicant support him/herself?
(2)What are the applicant’s reasonable needs?
(3)What capacity does the respondent have to meet an order?
(4)If steps 1-3 favour the applicant, what order is reasonable having regard to s 75(2)?
In Redman & Redman (1987) FLC 91-805 (“Redman”) at 76,082, the Full Court said that it was appropriate to maintain some flexibility in approach in considering an application for interim spousal maintenance. Consistent with Redman, in Drysdale & Drysdale [2011] FamCAFC 85 at [40], Coleman J exercising the appellate jurisdiction of the Full Court relevantly said:
It is the nature of an interim spousal maintenance order that, as here, it is made after a circumscribed hearing, in reliance upon evidence which is incomplete and/or unable to be fully tested. … The Court hearing and determining financial proceedings between the parties on a final basis, as clearly will occur in this case in the absence of any intervening settlement, has abundant power to accommodate within its final orders, whether by way of settlement of property or spousal maintenance, any anomalies which full agitation of disputed issues of fact may reveal to have resulted from an earlier interim spousal maintenance order…
Section 74(1) of the Act empowers the Court to “make such order as it considers proper for the provision of maintenance” in accordance with Part VIII of the Act. In Crawford and Crawford (1979) FLC 90-647 (“Crawford”), it was determined that the primary purpose of spousal maintenance is to make provision for future needs, whereas a statutory-based property distribution is mainly concerned with past contributions.
In Hall v Hall (2016) 257 CLR 490 (“Hall”) at 496, the High Court described the “gateway” requirement for the consideration of a spousal maintenance application pursuant to s 74 of the Act. The gateway requirement is set out in s 72(1) of the Act as follows:
(1)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:
(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 age 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).
The matters set out in s 75(2) are as follows:
(2) The matters to be so taken into account are:
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party’s role as a parent; and
(m) if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
In Hall at [3]–[8], the High Court confirmed that an applicant seeking orders for spousal maintenance carries the evidentiary burden as set out in s 140 of the Evidence Act 1995 (Cth). However, the High Court confirmed that, in the context of interim spousal proceedings, “[t]he evidence need not be so extensive and the findings not so precise” as in an application for a final order. The High Court nonetheless confirmed that “there is nothing to displace the applicability to an exercise of the power conferred by s 74(1) of the ordinary standard of proof in a civil proceeding now set out in s 140 of the Evidence Act 1995 (Cth).”
In McCrossen & McCrossen (2006) FLC 93-283 at [32], the Full Court, after referring to a number of earlier authorities, said that the question as to whether or not a person is able to support themselves “adequately” is:
…not to be determined upon a “subsistence level” but upon consideration of whether the applicant can support himself or herself “adequately” importing a standard of living reasonable in the circumstances.
(References omitted)
That issue was further considered in Brown & Brown (2007) FLC 93-316 (“Brown”) at [161], where the Full Court stated that:
Where possible both spouses should continue to live after separation at the level which they previously enjoyed if this is reasonable, although the parties’ standard of living may have to be lower if financial resources are insufficient to maintain that standard.
The Full Court in Brown further observed that:
It is not necessary for an applicant for maintenance to use up all of his or her assets and capital in order to satisfy the requirements that he/she is unable to support himself or herself “adequately”.
In Maroney & Maroney [2009] FamCAFC 45 at [56], the Full Court confirmed that, in determining the “capacity” of a party to satisfy an order for interim spousal maintenance, the Court is not confined to considering only that party’s income, but rather:
Once a party…establishes an entitlement to interim spousal maintenance, and such entitlement is quantified in accordance with that spouse’s reasonable needs, an order may be made notwithstanding that the liable spouse could only satisfy the order out of capital or borrowings against capital assets.
Challenging findings of fact in an appeal
The appellant faces challenges in establishing errors in respect to factual findings made by a trial judge. This is because:
·The onus is held by the appellant to show that there is some error in the decision under appeal: Allesch v Maunz (2000) 203 CLR 172 at [23]; McDonald v Queensland Police Service [2018] 2 Qd R 612 at [39];
·Appeal courts do not lightly interfere with the findings of fact made by a trial judge “unless they are demonstrated to be wrong by ‘incontrovertible facts or uncontested testimony’, or they are ‘glaringly improbable’ or ‘contrary to compelling inferences’”: Robinson Helicopter Company Inc v McDermott (2016) 331 ALR 550 at [43]; and
·The difficulty in challenging findings of fact extends to “findings of secondary facts”, which are based on “inferences from primary facts”: FJ & PN Curran Pty Ltd v Almond Investors Land Pty Ltd [2019] VSCA 236 at [203] referring to Lee v Lee (2019) 266 CLR 129 at [55].
CONSIDERATION
Ground 1 – the respondent’s ability to support herself
In respect to this ground, the appellant contended that:
·the respondent’s identification of a gross salary of $750 per week did not accurately represent her earning capacity that the Court was required to consider pursuant to s 75(2)(b) of the Act; and further
·the respondent had access to an “unlimited availability of monies” contained in the J Pty Ltd business account.
The respondent acknowledged that there have been occasions where she has received a higher salary from the business, depending upon the profitability of the business in a particular period. The respondent provided evidence that, on average, her income is approximately $750 per week (at [57]).
Having regard to that evidence, the appellant has failed to demonstrate error on the part of the primary judge in determining that the respondent has, on average, received the amount of $750 per week (at [103]). In that respect, a tender bundle provided by the appellant referred to the respondent’s payslips in the period between May 2021 to May 2020 as showing a weekly gross income of $750 per week, with taxation deducted at $90 per week, leaving weekly take-home pay at $660 per week (see also tender bundle pages 534, 535). The net amount of $660 received by the respondent is also reflected in the respondent’s H Bank account (tender bundle pages 642, 644–646). It is also consistent with the respondent’s taxation return for the year ended 30 June 2021, being the most recent finalised financial year produced.
It was conceded by the respondent that she had access to funds held in the J Pty Ltd business account. The primary judge accepted that, in the period from October 2018 until September 2021, the respondent had access to a total amount of $72,893.12 from the business account (at [70]). In that respect, the respondent attested at paragraph 47.2 of her affidavit filed 12 October 2021 (“the October affidavit”) that the personal expenses that she claims through the J Pty Ltd business account are “$522 per week”, as set out at item 18 of her Financial Statement filed 12 October 2021. In that Financial Statement, the respondent attested to applying those funds to the following:
MOTOR VEHICLE FINANCE REPAYMENTS ($254),
PETROL ($85),
CAR MAINTENANCE ($15),
INSURANCE POLICY 79 ($46),
MOBILE PHONE BILL ($35),
CAR REGO and CTP ($41) and
TOLLS/PARKING FEES ($23)
(As per the original)
Additionally, the respondent acknowledged accessing the business account to reimburse her H Bank credit card, which was applied to meet her personal expenses (paragraph 47.3 of the respondent’s October affidavit). The respondent cross referred that payment which she receives to those expenses set out in item 30 of her Financial Statement.
In other words, the primary judge was entitled to accept the respondent’s evidence that, while she did receive funds from the business account over and above her salary, those funds were applied to meet the expenses referred to in items 18 and 30 of her Financial Statement. That is, while included as funds received on the positive side of the balance sheet, these amounts were also duly included on the negative side as debits to meet the expenses set out in items 18 and 30 of the Financial Statement.
Again, no error has been demonstrated in the manner in which the primary judge has treated the funds accessed by the respondent from the business account in determining what her weekly needs are. Essentially, his Honour found that the receipt of funds from the J Pty Ltd business account were cancelled out by the expenses incurred by the respondent.
While not specifically referred to in the grounds of appeal, at paragraph 7 of his Summary of Argument filed 8 February 2022, the appellant contends that the primary judge erred in assessing the respondent’s income. The appellant argues that the primary judge failed to include, as income received by the respondent, $430 weekly which is expended by the appellant to meet household expenses incurred by the respondent.
Comparatively, the respondent contends at paragraph 47.1 of her October affidavit that those expenses relate to combined household expenses met by the appellant, which were identified at item 18 of the respondent’s Financial Statement as including:
SHARE OF HOUSEHOLD EXPENSES INCL. INTERNET, FOOD, ELECTRICITY, GAS AND OTHER UTILITY BILLS
(As per the original)
I respectfully agree with the submission made by the respondent that no error has been identified on the part of the primary judge in inferring, on the basis of evidence presented in the proceedings, that those payments relate to combined expenses associated with the household that the parties both occupied and that they would not be available to the respondent once she left the matrimonial home (at [58]–[59]).
Accordingly, there has been no error demonstrated in the manner in which the primary judge has considered funds available to the respondent to meet her day-to-day expenses and how those funds have been applied. Similarly, there has been no error demonstrated in the finding by the primary judge as to those funds which will be available to her to meet her future day-to-day expenses. This ground of appeal is therefore without merit.
Ground 2 - failure to account for funds received from J Pty Ltd
This ground of appeal relates to Ground 1, which has substantially been addressed. Nevertheless, the appellant contends that the primary judge made a double counting error regarding expenses of the respondent as being met by herself in circumstances where they are actually met by the company J Pty Ltd. In support of that argument, the appellant sets out a table at paragraph 34 of his Summary of Argument in which it is contended that the respondent has admitted that certain items of expenditure have been met by the company.
It is contended that, at paragraph 50 of her October affidavit, the respondent acknowledges incurring personal expenses as follows:
50.1. Tax $90
50.2. Rent $475
50.3. Gas $25
50.4. Electricity $25
50.5. Water $10
50.6. Internet $20
50.7. Entertainment $50
50.8. Household supplies $50
50.9. Contents insurance $15
50.10. Hotel Time Share $25
50.11. Gifts (e.g., birthdays, charities) $50
50.12. Neck and lower back pain massage $50
50.13. Hairdressing, toiletries $60
50.14. Beautician and personal maintenance $20
50.15 Misc. expenses (e.g., occasional take out) $35
Subtotal = $1,000
(As per the original)
As has previously been noted, the respondent acknowledges that she has met personal expenses from the J Pty Ltd business account to the extent of $350 per week by way of reimbursement of her H Bank credit card account. At paragraph 50 of her October affidavit, in setting out the list of expenses referred to immediately above, the respondent attests that those are personal expenses over and above the amount she has received from the J Pty Ltd business account. Accordingly, no error has been demonstrated on the part of the primary judge in accepting those items as expenses met by the respondent from her own funds. There has been no double accounting error as contended by the appellant.
Accordingly, this ground of appeal is also without merit.
Ground 3 – assessment of the respondent’s capacity for gainful employment
The appellant firstly contended that the primary judge erred in assessing the respondent’s income from the hospitality franchise to be, on average, $750 per week. It was contended that the respondent’s evidence indicated that she had, on occasions including in February 2021, received an income of $1,100 per week. I have earlier dealt with this submission. The evidence clearly establishes that on average, the respondent received an amount of $750 per week from her employment with the hospitality franchise.
The appellant further contends, however, that in order to determine the respondent’s earning capacity pursuant to s 75(2)(b) the primary judge was, in the context of an application for interim spousal maintenance, required to undertake an assessment of the respondent’s employment history and qualifications, with a view to making an inexpert determination of a theoretical earning capacity that the respondent might have. The appellant’s submissions in that respect were as follows at paragraphs 37 to 42 of his Summary of Argument:
Relevant to section 75(2) (b) of the Act, the Wife referred in her affidavit sworn on 29 October 2021 at para 41 to not only working in customer services, but also working in administration, including managing stock, paying bills, hiring and training staff and all other business errands. This evidence no doubt supports the proposition that the Wife had obtained in the last four years also a considerable degree of self-management, small business-related work experience.
From 1999 until 2013 the Wife was employed as a customer service assistant in Suburb K and later as a financial services assistant at A Bank, working 5 days per week at A Bank in Suburb L from about 2008.
In addition, in 2011 and 2012, for one year, the Wife was working part-time for Company M. From 2015 until September 2016, the Wife employed as an N Bank
The Wife also conceded how she received a hospitality franchise customer service award in 2019 for maintaining a five-star rating for five years. Further, she refers to traveling to China in 2017 for a business exhibition.
The Appellant (“the Husband”) made a submission to the Federal Circuit and Family Court (Division 2) Hearing on 13 October 2021 concerning this above evidence relating to the Wife’s disclosed work experience and qualification
The Court it is submitted, was obliged to at least make findings related to this submission made by the Appellant. Nowhere in the Reasons for Judgment is this factor considered by the Court. The Court appears silent in giving reasons why the Wife’s capacity to earn a strictly limit of $750 per week.
In considering this submission by the appellant, I acknowledge that there are authorities in which this Court has found that a party seeking spousal maintenance has failed to act in good faith in reasonably exploiting their earning capacity. As noted by the Full Court at 81,997 in Mitchell and Mitchell (1995) FLC 92-601 (“Mitchell”), determination of that issue can involve some complexity and potentially require social science evidence regarding the employment opportunities available to a woman of middle age. The facts of this case could not however, in my view, reasonably be said to resemble the circumstances where the primary judge in Mitchell had determined, on the facts of that case at first instance, that the respondent had failed to make “proper efforts to increase her income.”
The appellant contended that that the primary judge had an obligation to, at least, give reasons for rejecting the appellant’s argument in that respect. I disagree. In Whisprun Pty Ltd v Dixon (2003) 200 ALR 447 at [62], Gleeson CJ, McHugh and Gummow JJ stated:
A judge’s reasons are not required to mention every fact or argument relied on by the losing party as relevant to an issue. Judgments of trial judges would soon become longer than they already are if a judge’s failure to mention such facts and arguments would be evidence that he or she had not properly considered the losing party’s case.
It was entirely appropriate that the primary judge, in assessing the earning capacity of the respondent, had regard to the income which she earned from the hospitality franchise as accurately reflecting her reasonable earning capacity. This was in circumstances where:
·the respondent had been working in the hospitality franchise for a number of years in the context of a joint arrangement between the parties;
·she has been earning an acceptable income from that business;
·the appellant attested to his intention to renew the franchise for the business; and
·it can reasonably be inferred that the respondent will continue to earn that income.
In those circumstances, no error has been demonstrated on the part of the primary judge in failing to undertake an exercise of theoretically assessing the respondent’s earning capacity in a range of other businesses or occupations. The reasons provided by the primary judge at [108] of his decision appropriately acknowledged the evidence presented to his Honour and explained why he rejected the appellant’s argument in the context where, as explained by the primary judge, there was no evidence before the Court enabling him to make a finding that the respondent was realistically capable of earning a greater income.
Accordingly, this ground of appeal is also without merit.
Ground 4 - conditional order for maintenance to be payable upon the respondent leaving the matrimonial home
This ground of appeal is perhaps surprising in the context of an exchange that occurred between counsel for the appellant and the primary judge during the course of the hearing which, excluding commentary, is as follows:
COUNSEL FOR THE APPELLANT: Can I just raise one important issue, though, your Honour - - - that goes back to the question. I think your Honour has to think – go carefully about a position where you’re assuming if you’re going to make an order that the wife is to leave the property. What if she doesn’t? What happens then if she never leaves the property?
HIS HONOUR: What if I make an order that spouse maintenance commences upon her leaving the property?
COUNSEL FOR THE APPELLANT: I couldn’t cavil with that, your Honour. I couldn’t cavil with that at all.[2]
[2] Transcript 14 October 2021, p. 21 lines 30–44.
On appeal, a party is generally bound by the case presented at trial: Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438; Metwally v University of Wollongong (1985) 60 ALR 68 at 71 and Coulton v Holcombe (1986) 162 CLR 1 at 8. However, this principle does not apply if the point argued on appeal is a question of law: Water Board v Moustakas (1988) 180 CLR 491 at 497. That is the case in respect to this issue. Specifically, the Court’s jurisdiction cannot be expanded by consent. It is therefore necessary to determine whether the Court had jurisdiction to make orders in terms of those which were made by the primary judge. For reasons which I explain, I am satisfied that the primary judge had jurisdiction to make the orders which were made in these proceedings.
The parties’ child is over the age of 18 and it has not been alleged that the respondent has a physical or mental incapacity for gainful employment. Accordingly, the gateway requirement for the respondent obtaining spousal maintenance was for the respondent to discharge the persuasive onus that rests upon her of satisfying the Court that there is an “adequate reason, having regard to any relevant matter referred to in subsection 75(2)” that she is unable to adequately support herself.
As noted by the Full Court in Crawford to which I have earlier referred, the primary purpose of spousal maintenance is to make provision for a party’s future. That purpose is readily identified having regard to the matters in s 75(2) which I have set out above.
In this case, the respondent knew of the appellant’s desire for her to leave the matrimonial home. This was communicated to her in a text message sent on 9 October 2020. In that message, the appellant requested the respondent to “look into going away from my house” (at [45]). No evidence was presented by the appellant challenging the assertions of the respondent as set out in paragraphs 38 to 40 of her October affidavit as to the parties’ mutual desire for her to vacate the property. Moreover, as noted above, the appellant sought a specific order for that to occur.
In those circumstances, it was not only entirely appropriate but necessary for the primary judge to make an assessment of the respondent’s future needs based on the assumption that she would vacate the matrimonial home. Those needs were identified by the respondent both at paragraphs 48 to 51 of her October affidavit and in her Financial Statement. Having regard to those needs, the primary judge found that the “other adequate reason” threshold test as set out in s 72(1)(c) was satisfied with the respondent’s “unavoidable living expenses” being, in those circumstances, “in excess of her available income” (at [99]).
As noted in the exchange between counsel for the appellant and the primary judge to which I have referred, the primary judge effectively granted an indulgence to the appellant to avoid a situation where he would be responsible for paying spousal maintenance until such time as the anticipated additional expenses were actually incurred. It is not only quite common but invariably the case that orders for spousal maintenance are made on the basis of anticipated but not yet incurred expenses. In the circumstances of this case, the primary judge was entitled to find that the expenses set out in paragraphs 48 through to 52 of the respondent’s October affidavit were, as a matter of probability, likely to be incurred. While it is the case that the primary judge did not make a finding as to the date upon which the respondent would vacate the matrimonial home, there was no error on his Honour’s part in finding that it is likely she would. In the absence of evidence as to the date that the respondent would rehome herself and in the context of the issue being raised by counsel for the appellant, it was, as I have noted, entirely appropriate that the orders made by the primary judge did not require the appellant to meet those expenses until such time as they were actually incurred.
Accordingly, there is no merit in the first element of Ground 4 of the appeal.
The second aspect of Ground 4 is in respect to the form of the orders made by the primary judge. Effectively, it is contended that the open-ended nature of the orders gave rise to error. This argument would have merit save to the extent that the orders must be read in the context of the specific facts of this matter. That is, both parties wanted and expected that the respondent would move out of the matrimonial home. If she did not do so, she would face the emotional and financial cost of responding to the appellant’s application that she do just that.
It is clear that the primary judge based his assessment of the respondent’s future needs on a finding that she would vacate the matrimonial home (at [110] and [116]). The respondent gave evidence that she had made relevant inquiries as to the availability and likely cost of rental accommodation. It did not appear to be the subject of dispute that the respondent’s move out from the matrimonial home and into rented accommodation was imminent. As noted by the Full Court in Babett & Falconer (2015) FLC 98-067 at [43] referring to the judgment of Mahoney JA in Housing Commission (NSW) v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 386, reasons provided by a trial judge in the exercise of a statutory discretion will be sufficient “if the inference as to what is found is appropriately clear.”
The facts of this matter, as described in the judgment, make it appropriately clear that the primary judge inferred that the respondent’s move from the matrimonial home to rental accommodation was imminent and the orders his Honour made should be read in that context.
In the context of the facts of this case, which are clearly understood by both parties, the orders are, in my view, expressed with sufficient clarity and precision such that the parties are each aware of their respective rights and obligations and when they will be activated.
Insofar as the appellant contends that there is uncertainty and/or potential injustice in the manner in which the orders have been expressed such that he is unable to reasonably comply with them, that is, with respect, a matter which he can raise in the event of there being the need for enforcement proceedings.
Accordingly, there is, in my view, no merit in either aspect of Ground 4 of the appellant’s appeal.
LEAVE TO APPEAL
In circumstances where I have found no merit in the appellant’s appeal, I dismiss the appellant’s application for leave to appeal.
COSTS
In this matter, the respondent sought an order for costs in the event of the appellant being unsuccessful. Comparatively, the appellant sought that costs in respect to the appeal are payable in the proceedings. It is unnecessary to spell out detailed reasons for awarding costs: Greedy and Greedy (1982) FLC 91-250 and Luadaka v Luadaka (1998) FLC 92-830.
Section 117 of the Act relevantly provides as follows:
(1)Subject to subsection (2), subsections 45A(6) and 70NFB(1) and sections 117AA and 117AC, each party to proceedings under this Act shall bear his or her own costs.
(2)If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A), (5) and (6) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A)In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b)whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c)the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f)whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g)such other matters as the court considers relevant.
…
There only need be one justifying circumstance to found an order for costs: Fitzgerald v Fish (2005) 33 Fam LR 123. In this case, it is relevant that the appellant has been wholly unsuccessful in his application for leave to appeal: s 117(2A)(e).
In terms of s 117(2A)(g), in Manesh & Manesh (No 2) [2021] FamCAFC 47 at [63], it was noted that the point of requiring leave in respect to appealing interim decisions is to “discourage endless interlocutory litigation and appeals that have the capacity to prolong family law litigation”.
Also in terms of s 117(2A)(g), to fail to make an order for costs in the circumstances of this case would substantially deprive the respondent of the benefit of the order for interim spousal maintenance. This is because the payments she receives would be absorbed by her obligation to pay legal fees.
In terms of s 117(2A)(a), having regard to the content of the appellant’s Financial Statement, I am satisfied that he has the capacity to meet a costs order.
For these reasons, I am satisfied that an order for costs should be made in favour of the respondent. The question becomes in what amount.
Rule 12.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) permits the Court to order costs in a specific amount. The power to do so is to “avoid the expense, delay and aggravation involved in protracted litigation arising out of taxation”: Graham & Squibb (2019) FLC 93-892 at [92] quoting Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119 at 120.
The respondent seeks party/party costs up to and including the hearing of the appeal in the amount of $17,416.65. Those costs are slightly less than the costs of the appellant specified as being $17,746.50. The costs have been itemised and I am satisfied that they are logical, fair and reasonable in terms of the authorities considered and principles adumbrated in Bilson & Geer (Costs) [2017] FamCAFC 7 at [40]–[49].
Accordingly, there will be an order for costs in favour of the respondent in the sum of $17,416.65 to be paid within 28 days.
I certify that the preceding seventy-seven (77) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McClelland. Associate:
Dated: 19 July 2022
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