Blakeley & Jaine (No 2)

[2020] FamCA 141

FAMILY COURT OF AUSTRALIA

BLAKELEY & JAINE (NO. 2) [2020] FamCA 141

FAMILY LAW – SPOUSAL MAINTENANCE – wife needing maintenance and unable to self-support – husband having capacity to pay the maintenance sum sought – modest sum sought – no extraordinary discretionary spending by wife – sum ordered to prevent wife falling into deficit.

Family Law Act 1975 (Cth) ss 72, 74, 75, 77

Banks & Banks [2015] FamCAFC 36
Bevan & Bevan (1993) 19 Fam LR 35
Brewer & Brewer [2019] FamCA 247
Deiter & Deiter [2011] FamCAFC 82
Eaby & Speelman [2015] FamCAFC 104
Garston & Yeo (No 2) [2019] FamCAFC 139
Hall v Hall (2016) 257 CLR 490
In the Marriage of Redman and Redman (1987) 11 Fam LR 411
In the Marriage of Stein (2000) 25 Fam LR 727
Marvel v Marvel (2010) 43 Fam LR 348
Pollard & Nordberg [2019] FamCA 365
Redmond & Redmond [2014] FamCAFC 155
Salah & Salah (2016) 56 Fam LR 299
SS & AH [2010] FamCAFC 13

APPLICANT: Mr Blakeley

RESPONDENT: Ms Jaine

FILE NUMBER: SYC 7125 of 2018

DATE DELIVERED: 5 March 2020

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: The Honourable Justice Wilson

HEARING DATE: 3 March 2020

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms M. Gillies SC

SOLICITOR FOR THE APPLICANT: Clinch Long Woodbridge Lawyers

COUNSEL FOR THE RESPONDENT: Dr R. Barnett

SOLICITOR FOR THE RESPONDENT: Dorter Family Lawyers And Mediators

Orders by consent on 3 March 2020

1. Within 7 days of the date of these orders the parties shall do all acts and things necessary to cause a mortgage to be secured on the property located at C Street, Suburb D in the state of New South Wales being the whole of the land comprised in Certificate of Title Folio Identifier … (“the Suburb D property”) to a maximum amount of $100,000.00, with the entirety of that sum to be available to the wife only, for her current outstanding and future legal fees.

2. The mortgage facility shall only be drawn down by the parties to pay legal costs and disbursements incurred by the wife in relation to these proceedings (SYC7125/2018) for her current outstanding fees of $35,160.58 and any future legal fees that she incurs in relation to these proceedings.

3. Any money drawn down on the mortgage facility in accordance with these orders shall require the signature of both parties and they shall be required to provide their signature within 7 days of a tax invoice provided by the wife or her solicitors for the wife’s solicitor’s costs or disbursements in relation to these proceedings.

4. The husband shall be solely responsible for the payment of the draw down facility on an interest only basis pending final hearing.

5. The monies that are drawn down from the mortgage facility in accordance with these orders are interim property distributions by the wife and shall accordingly be added back against the wife’s entitlements at any final hearing of this matter.

6. The court notes and the parties agree that the wife currently has $35,160.58 outstanding in legal costs and disbursements.

7. Otherwise the wife’s application for litigation funding is dismissed.

Orders on this application

1. The husband pay the wife weekly spousal maintenance in the sum of $836.

2. The further hearing of this proceeding is referred to the docketed registrar for ongoing case management.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Blakeley & Jaine has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 7125 of 2018

Mr Blakeley

Applicant

And

Ms Jaine

Respondent

REASONS FOR JUDGMENT

Introduction

1. The Honourable Justice Harper requested me to address three issues in this proceeding, namely a parenting application, an application for litigation funding and an application for the spousal maintenance.

2. On 3 March 2020 I delivered an ex tempore decision in relation to the parenting application, ordering a modest enlargement in the time the father has with X.

3. Also on 3 March 2020 the parties compromised the wife’s application for interim property orders (also described by counsel as litigation funding orders).  Orders by consent were made as appear above.

4. That left the wife’s application for spousal maintenance.  She sought the sum of $836 on a weekly basis.  The husband opposed the application contending that he had no capacity to meet the order sought and that the wife had no need for such maintenance.  By lunchtime on 3 March, debate had concluded.  I reserved my decision to consider the extensive documentary exhibits on which the parties relied.

5. Having heard counsels’ submissions and having read counsels’ written submissions, I am able to express my conclusions and reasons therefore on the spousal maintenance application. 

6. The wife sought interim orders for spousal maintenance of $836 per week.  On behalf of the husband Ms Gillies SC argued that as this application was made on a sum-sought basis, the husband’s position was to oppose the sum sought, offering no different amount.

Synopsis 

1. For the reasons that follow, in my view –

   a)the sum sought by the wife is appropriate;

   b)the wife is unable to meet her own self-support; and

   c)the husband has the capacity to meet the sum sought.

Relevant factual setting     

1. Certain formal factual matters were not in contest on this application.  They may be quickly enumerated as set out bellow –

   a)the husband is 55 years of age and the wife is 49 years of age;

   b)the parties commenced cohabitation in October 2014, they married in … 2016, they finally separated in late December 2017 and they are not yet divorced;

   c)the husband and wife have one child together, X, born in … 2014 and who is currently five years of age;

   d)the wife has an eight year old child of a previous marriage whose father died; and

   e)the wife relies on welfare payments.

2. Other relevant facts were not necessarily agreed yet they were not the subject of serious disputation.  Those may be catalogued in the following manner –

   a)when last employed, the wife earned an annual sum of $55,000 as an administrative assistant;

   b)in December 2015, that is to say, a little over a year after first cohabiting, the wife sold a parcel of real estate in Suburb B for $2.51 million so as to purchase the land and improvements at C Street, Suburb D for $2.9 million in the joint names of the husband and wife (although they were not married by then);

   c)the wife contributed the entirety of the net proceeds of sale of the Suburb B property towards the purchase of the Suburb D property;

   d)in the period August 2018 to January 2019 the wife received almost $50,000 in government support;

   e)in September 2018 the husband reduced the weekly sum he had paid to the wife from $3,000 to $1,500;

   f)in late February 2019 the husband sold a tranche of E Bank shares valued at approximately $1 million and applied that sum towards the acquisition of the land and improvements at   F Street, Suburb G for $2.35 million; and

   g)in early May 2019 (so the wife contended) the husband applied almost $160,000 in reduction of the mortgage debt over the Suburb G property, such sum derived from the sale of other E Bank shares.

3. That recital is far from exhaustive.  To the wife’s chronological narration the husband added his own, relevantly distilled as follows –

   a)in July 2016 soon after the parties married the husband sold his property at Suburb H for $2.1 million from which he deposited $450,000 into a cash account in the wife’s name; and

   b)the husband’s purchase of the property at F Street, Suburb G was financed by mortgage finance in the sum of $1,230,000.

4. In her written submissions dated 20 February 2020 the wife’s counsel, Dr Barnett contended that at present the wife receives $940 per week made up of $393 from Centrelink under a parenting payment, $202 from Centrelink pursuant to family tax benefit arrangements and $345 from the husband.

5. It was common ground that no child support administrative assessment has been made.

6. In support of her contentions for orders in favour of the wife, Dr Barnett emphasised that the mother has not worked since 2011, the father of Y is dead and X has just commenced school.

Applicable legal principles 

1. In Brewer & Brewer[1] I held as follows –

   [1] [2019] FamCA 247.

   56.So far as the spousal maintenance claim is concerned, ultimately the issue is determined by application of the principles in s 72 and s 74 of the Family Law Act, a matter addressed by the Full Court in In the Marriage of Stein.[2]  There, the Full Court (Kay, Holden and Dessau JJ) held as follows[3] –

   [2] (2000) 25 Fam LR 727.

   [3] Ibid (at [55]).

   Spousal maintenance is ultimately governed by the provisions of ss 72 and 74, namely there being no right to spousal maintenance unless there is a capacity to meet it and an inability by the claimant to meet the claimant's own self-support.

   57.In Hall v Hall[4] the High Court described the legislative gateway to the operation of Part VIII of the Family Law Act in relation spousal maintenance be as being s 72(1) of the Family Law Act. The High Court pointed to the power conferred by s 74(1) to make an interim order as distinct to the power conferred by s 77 to make an urgent order. Under s 77 two preconditions were required, namely, the immediate need of financial assistance and, second, it must not be practicable in the circumstances to determine immediately what orders if any should be made. Conversely, under s 74 the making of an interim order calls for satisfaction of the threshold requirement in s 72(1) plus any relevant matter in s 75(2). On that last issue the High Court affirmed the observations of the Full Court of the Family Court in In the Marriage of Redman and Redman.[5]  Hence, the High Court in Hall v Hall held that in an application for an interim order under s 74 the court cannot determine the application without finding on the balance of probabilities on the evidence before it the threshold requirement of s 72(1) are met plus any relevant matters in s 75(2).

   [4] (2016) 257 CLR 490.

   [5] (1987) 11 Fam LR 411.

   58. Section 72(1) is in the following terms –

   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;

   (d)having regard to any relevant matter referred to in subsection 75(2).

2. To those statements Dr Barnett addressed the observations in Bevan & Bevan.[6]  There, the court held that an award of spousal maintenance involves –

   a)a threshold finding under s 72;

   b)consideration of s 74 and 75(2);

   c)no fettering principle that pre-separation standard of living must automatically be awarded where the respondent’s means permit; and

   d)discretion exercised in accordance with the provisions of s 74, with “reasonableness in the circumstances” as the guiding principle.

   [6] (1993) 19 Fam LR 35.

3. Self-evidently, in this case the battlelines were drawn in relation to the wife’s need for maintenance and the husband’s capacity to provide the sum sought.

4. On behalf of the wife Dr Barnett developed submissions in relation to the wife’s need for spousal maintenance partly premised on the husband’s own material.  In no special order of priority, Dr Barnett placed reliance on the following matters –

   a)during the marriage the wife was the primary carer of the two children (Y and X) and she attended to the vast majority of the duties of homemaker;

   b)the wife is not in paid employment;

   c)during the relationship the husband provided the wife with a credit card having a monthly credit facility of $3,000 that was reduced by the husband to $1,500 in September 2018;

   d)in May 2019 the weekly sum provided by the husband to the wife was further reduced to $345; and

   e)the wife deposed in paragraph 94 of her affidavit made 20 February 2020 to there being a weekly deficit in her financial condition.

5. It was put on behalf of the wife that her financial statement revealed normal, unexceptional outgoings and nothing in the category of extraordinary outgoings.  In reliance upon the decision in Garston & Yeo (No 2)[7] Dr Barnett contended that the sum sought by the wife was modest in the circumstances.

   [7] [2019] FamCAFC 139.

6. So far as need was concerned, Ms Gillies SC contended that the wife engaged in a pattern of discretionary spending that pointed to the unreliability of the wife’s contentions as to need.  Ms Gillies argued that no impediment existed to the wife’s returning to the workforce in some administrative capacity.  Ms Gillies also argued that the wife currently resides in the former matrimonial home at no cost to her while the husband has been forced to take up alternative accommodation at additional cost.  Ms Gillies cited certain cosmetic surgery undertaken by the wife as an illustration of the wife’s spending on elective expenses.  Dr Barnett countered the argument about the wife’s expenditure on cosmetic surgery by contending that the surgery was not properly characterised as elective cosmetic surgery for beautification but rather as necessary surgery for varicose veins.

7. While I accept that on a contested interlocutory hearing the true factual position of the parties is in a state of fluidity.  In Pollard & Nordberg[8] I drew together the learning on the point in the following way –

   70.In Marvel v Marvel[9] the Full Court addressed the complications that presented themselves when on an interim hearing the court is called upon to make findings of fact on disputed evidence.  The Full Court embraced the cautioning remark sounded in SS & AH[10] where it was held that findings made at an interim hearing should be made with great circumspection.

   71.In Deiter & Deiter,[11] a differently constituted Full Court held that interim hearings are necessarily truncated hearings and a court must be cautious to avoid being drawn into contentious trial issues.  Instead, the court should look for agreed issues, care arrangements prior to separation, current circumstances of the parties and the children and the parties’ respective proposals.

   72.In Eaby & Speelman[12] the Full Court held that frequently the judge must do the best he or she can by weighing the probability of competing claims and assessing the likely impact on the children in the event that a controversial assertion is relied upon or rejected. The decision in Banks & Banks[13] was to like effect as was the decision in Salah & Salah.[14]

   73.In Redmond & Redmond[15] the Full Court held that guidance is often provided by independent expert evidence, even where on an interim contested hearing significant disputes exist in relation to the evidence on which reliance will be placed.

   [8] [2019] FamCA 365.

   [9] (2010) 43 Fam LR 348.

   [10] [2010] FamCAFC 13.

   [11] [2011] FamCAFC 82.

   [12] [2015] FamCAFC 104.

   [13] [2015] FamCAFC 36.

   [14] (2016) 56 Fam LR 299.

   [15] [2014] FamCAFC 155.

8. Accordingly, in arriving at even preliminary observations about factual matters at this juncture of the litigation, certain matters may be recorded with circumspection.  They support my conclusion that the wife is in need of interim spousal maintenance in the sum sought.  Those may be distilled as follows –

   a)for the main, the wife’s financial weekly support is derived from government benefits;

   b)to those government benefits the husband contributes a very low weekly sum of $345 after once contributing $3,000 per month then the lesser sum of $1,500 per month;

   c)the wife’s weekly deficit is as she says of an amount over $800;

   d)during their marriage the parties consensually arranged their workload so that the husband worked and the wife was engaged as homemaker;

   e)the wife has not worked since 2011 and is now at an age where her prospects of gaining full time employment are less optimistic than they were when the parties married;

   f)the sum sought is modest or, put differently, is not extravagant.

9. Let me now address capacity.  This arena of the contest was hard-fought and some of the contentions advanced by both sides were speculative in nature.  On behalf of the wife, Dr Barnett argued as follows –

   a)historically, the husband has enjoyed the benefit of receiving an annual bonus of substantial amounts;

   b)if history is any guide, it is probably – more likely, certain – that for this current financial year the husband will receive a bonus;

   c)based on the husband’s financial statement made 14 March 2019, the husband’s weekly income was given as being in the vicinity of $11,000;

   d)the husband now asserts his weekly income is in the order of $5,000;

   e)amortised, over a sustained period of years the husband has earned in excess of $500,000 per annum;

   f)he has spent large amounts by way of discretionary spending; and 

   g)the offset home loan statement for the period 1 July to 31 December 2019 revealed that he applied over $31,000 towards the reduction of his home loan demonstrating that he has the financial capacity to apply such large sums as he chooses in payment of such amounts as he chooses.

10. Ms Gillies SC contended that the husband lacked the capacity to meet the sum sought by the wife by way of interim spousal maintenance.  Ms Gillies said that as this was a sum-sought application, if the wife failed to demonstrate the husband’s capacity to meet the sum sought the application should be dismissed and that I should not order in lieu of the sum sought some lesser amount.  In making good her contentions that the husband lacked the capacity to meet the sum sought Ms Gillies SC relied on the following –

    a)no certainty exists that the husband will in fact receive any bonus this year because the calculation and distribution of any bonus is depended on such matters as group and individual performances by would-be bonus recipients;

    b)if any bonus is received by the husband he will incur a liability to pay tax on that bonus;

    c)the husband currently owes the ATO unpaid tax in excess of $100,000;

    d)child support liabilities are not yet ascertained;

    e)the wife can work; and

    f)she has chosen not to work.

11. By way of reply, Dr Barnett addressed on certain matters that Ms Gillies said were unsupported by the evidence.  Those included the contention that the husband could, if he elected so to do, sell presently unvested shares that will ultimately vest, said to be worth in the vicinity of $97,000.  Ms Gillies said that when the shares vest yet another tax liability will be enlivened.

Applying the facts to the law  

1. The legislative pathway that I am required to follow in an application for spousal maintenance has been outlined above, as distilled especially by the High Court in Hall v Hall.  As has been recorded above, I am persuaded that the wife is in need of spousal maintenance.  While their marriage was intact, the husband and wife agreed to or acquiesced in an arrangement pursuant to which the wife cared for the children at home and the husband provided the wife on a regular basis with funds.  The amount he provided diminished.  Initially it was $3,000 per month then it dropped to $1,500 per month then it reached its current level of $345 per week.  The wife says she is in deficit on that arithmetic.  Her spending is not out-of-the ordinary.  In fact, her spending seemed to me to be on the modest side.

1. The husband’s earning capacity has (at least historically) been substantial.  At one stage it was $11,000 per week or thereabouts. I accept that his weekly earnings may have diminished in recent times.  Yet the home loan payments to 31 December 2019 reveal that the husband is able to apply a considerable sum to reduce his home loan.  In my view he has the capacity to meet the sum sought.

2. The arguments advanced in opposition to the wife’s application did not attract me, in particular, the contention that the wife can return to the work force.  Of course, she could seek employment doing a task just to gain employment.  However, it cannot be overlooked that the prospects of a person of or over 50 gaining employment are not particularly promising.  Even if the wife were able to seek some form of employment it is likely that the task of securing paid employment will be time consuming.  Her needs to meet ongoing recurrent expenses is immediate.  They must be addressed immediately.

3. I take the view that the wife is entitled to weekly spousal maintenance of $836.  I make an order to that effect.

4. I refer this proceeding to the docketed registrar for ongoing case management.

I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Wilson delivered on 5 March 2020.

Associate: 

Date:  5 March 2020