BODILLY & HAND

[2019] FamCA 210

FAMILY COURT OF AUSTRALIA

BODILLY & HAND [2019] FamCA 210

FAMILY LAW – SPOUSAL MAINTENANCE – where the wife has a medical condition and had the benefit of an order for many years – where the husband, albeit wealthy, desires to transition to retirement but where he also has a second family – where the husband’s property interests are largely owned at law by his second wife – where the court is obliged to look at the distinction between necessary expenditure and discretionary expenditure for both parties – where subsequent to the previous order, the wife became eligible for the National Disability Insurance Scheme – Impact of entitlement on spousal maintenance.

FAMILY LAW – PRACTICE AND PROCEDURE – Extension of Time – where the wife was well out of time to pursue costs from an appeal in 2013 and sought an extension – where the court considered that the wife first had to approach the Full Court or a Full Court judge.

Family Law Act 1975 (Cth)
Evidence Act 1995 (Cth)
National Disability Support Act 2013 (Cth)

Beck and Beck (No 2) (1983) FLC 91-318
Bevan v Bevan (1995) FLC 92-600
Bickel v John Fairfax and Sons Limited [1981] 2 NSWLR 474
Bracklow v Bracklow [1999] 1 S.C.R. 420
Briginshaw v Briginshaw (1938) 60 CLR 336
Britt and Britt [2017] FamCAFC 27
Collins and Collins (1977) FLC 90-286
Curnow and Curnow (unreported) 28 April 1997
DJM v JLM (1998) FLC 92-816
Evans and Evans (1978) FLC 90-453
Ferguson and Ferguson (1978) FLC 90-500
Freestone and Freestone [2013] FamCAFC 190
Johnson v Page (2007) FLC 93-344; [2007] FamCA 1235
Jones v Dunkel (1959) 101 CLR 298
Keepkie and Keepkie [1998] FamCA 39
Lutzke and Lutzke (1979) FLC 90-714
Maroney and Maroney [2009] FamCAFC 45
McGarrigle v National Disability Insurance Agency [2017] FCA 308
McOmish v McOmish [1968] VR 524
Mee and Ferguson (1986) FLC 91-710
Mitchell and Mitchell (1995) FLC 92-601
Nutting v Nutting (1978) FLC 90-410
Oshlack v Richmond River Council (1998) 193 CLR 72
R v Watson; exparte Armstrong [1976] HCA 39; (1976) CLR 248
Smith and the New South Wales Bar Association (1992) 176 CLR 256
Tidswell v Tidswell (No 2) [1958] VR 601
Wilson and Wilson (1989) FLC 92-033
Wren v Emmett Contractors Pty Limited [1969] 43 ALJR 213 at 221

APPLICANT: Ms Bodilly

RESPONDENT: Mr Hand

FILE NUMBER: MLC 10737 of 2009

DATE DELIVERED: 9 April 2019

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 1 October 2018; 29 November 2018; 11, 12, 13, 14, 19 and 25 February 2019

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Matta

SOLICITOR FOR THE APPLICANT: Sayer Jones

COUNSEL FOR THE RESPONDENT: Mr St John QC

SOLICITOR FOR THE RESPONDENT: Pearce Webster Dugdales

Orders

1. Paragraphs 1 and 2 of the orders made 27 August 2012 (suspended by paragraph 1 of the orders made 15 June 2018) are varied as and from this date as set out hereafter.

2. The husband pay spousal maintenance for, and to, the wife fixed in the sum of $500 per week with the first payment to be made on Friday 12 April 2019.

3. To the extent necessary, paragraph 2 of the interim orders made 15 June 2018 is discharged as and from 11 April 2019.

4. The wife’s application for an extension of time to dispute the itemised costs account dated 5 July 2018 is struck out.

5. The wife’s application for costs (paragraph 5 of the application initiating proceedings filed 15 August 2017) is adjourned for determination as soon as practicable.

6. The initiating application of the wife (albeit as respondent) filed 15 August 2017 and the amended response of the husband (albeit as applicant) filed 2 August 2018 are otherwise dismissed.

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 Bodilly & Hand 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 MELBOURNE

FILE NUMBER: MLC 10737 of 2009

MS BODILLY

Applicant

And

MR HAND

Respondent

REASONS FOR JUDGMENT

1. These proceedings concern spousal maintenance.  Ms Bodilly (“the wife”) seeks an order for periodic spousal maintenance of $3000 per week (indexed annually by reference to the Consumer Price Index for Sydney).  In addition, she seeks costs. 

2. The respondent is Mr Hand (“the husband”).  He has paid spousal maintenance for 17 years and opposes any order at all.  Initially, he had sought that the discharge of his previous obligations be backdated to when his employment situation altered but that approach was abandoned at the end of the hearing. 

3. I have referred to the parties as “husband” and “wife” only for my own convenience notwithstanding their marriage status has long ago ended and the husband has remarried.

4. The hearing was conducted by the husband on the basis that the court should discharge previous maintenance orders with a fresh examination of the necessity for any order whilst the wife approached it on the basis of seeking a variation of the extant orders.

Some issues?

1. Some unusual questions or issues arise from the proceedings.  For example:

   (a)After many years of paying spousal maintenance, is there a point at which the court should say it is no longer proper for an order to continue?  Is there a basis to change an order when a payer retires from the paid workforce (or is anticipating so doing) or, is the obligation to pay spousal maintenance dictated only by the economic and financial circumstances of the parties?

   (b)If spousal maintenance has been paid from income, does a significant reduction in that income require that the maintenance continue to be paid from (say) capital if the income stream is inadequate?  Can the court order a party to liquidate assets for that purpose?  Should the payee’s capital assets be taken into account where income declines or is reduced?

   (c)What impact does the National Disability Insurance Scheme legislation have on spousal maintenance orders in circumstances where the payee has been entitled to maintenance based on a recognised illness making employment not possible?

   (d)What is the relevance of the payee’s expenditure for spousal maintenance purposes if the National Disability Insurance Scheme fixes a budget for that expenditure?  Can a payee claim the difference or shortfall for spousal maintenance purposes from the payer?

   (e)How should the court treat the expenditure by the payer towards his second family including children?  Is there priority between families?  What should the court do when all of the assets of the second family are in the name of the payer’s spouse yet there is an acknowledged equitable interest by the payer in those assets?  Does it matter that there is no application to set aside any of the property acquisition transactions?

   (f)How does the court deal with, or assess weight to be given to, evidence of a spousal maintenance claimant where that evidence cannot be tested because of a disability?  What does “give weight to” mean in a financial case?

   (g)In a case where the focus is on economic and financial factors, where, and how, does credibility of a party affect the determination?  Is credit relevant other than in discovery issues where it is suggested that assets or income have not been disclosed?  Is conduct relevant?

   Most of these questions are addressed in the reasons that follow  This is a discretionary area of the law in which parliament has used words such as “adequately”, “proper” and “reasonable” when requiring the court to determine the twin questions of the applicant’s need and the respondent’s capacity to pay; thus the discretionary exercise of power here looms large.

2. To understand the complexities of this dispute considerable background is necessary.

Background

1. The husband is now 62 years of age and the wife 61 years.  They married in 1983 and there were no children from their union.  They separated in November 1998.

2. At the time of the marriage, the wife had a multiple sclerosis and by November 2009, nine years after the separation, she was housebound.

3. In November 2000, the husband married Ms K Hand (“Ms Hand”) and from their relationship there are two children now aged 17 and 14 years respectively.  Ms Hand was a health professional but now describes herself as engaged in home duties.  Apart from some investment capacity, Ms Hand has no income and is reliant, as is the rest of the family, on the husband.

4. In December 2000, an agreement between the husband and wife was approved under s 87 of the Family Law Act 1975 (Cth) (“the Act”). A cursory examination of that agreement shows that they then had modest assets. The wife received the majority of the non-superannuation assets and the husband the rest. Most importantly, the agreement did not cover spousal maintenance. To highlight the unusual nature of how the parties finalised their financial matters, they simultaneously agreed to a spousal maintenance order. One might question why a “maintenance agreement” under s 87 of the Act did not cover spousal maintenance but that is what the court file shows. Both parties had lawyers acting for them. It has not since been suggested that the approval of the agreement acts as an impediment to the jurisdiction of the court to litigate spousal maintenance.

5. The husband agreed to pay spousal maintenance of $500 per week.  At that time, the wife was working part-time as a health professional but her medical condition progressively deteriorated and in 2007 she ceased working. 

6. The husband’s view expressed in the present proceedings was that the agreement to pay $500 per week was to help the wife to resettle into Sydney because the parties had lived in Melbourne.  His own words set the scene for the costly and traumatic dispute that has followed.  He said:

   [33]     (Affidavit filed 2 August 2018).

   Naively I assumed my payments would no longer be required once she found her feet.  I certainly did not appreciate at the time that there was any possibility the payments would be indefinite, or could be subject to dramatic increase.

   That statement must be seen as irrelevant having regard to the matters mentioned above as to what the court was asked to do in 2000.

7. In September 1999, the husband was appointed to a position with a major Australian company in Western Australia and he and Ms Hand relocated there.  His long hours of work and no doubt the responsibilities that went with that, assisted his corporate profile.  The relevance of that is that unlike his present financial position, when his first marriage ended, the financial position, and his income, were modest.  In other words, he has amassed wealth over a number of years since separation occurred.

8. In 2005, the husband was transferred back to Melbourne by promotion to a senior management role in the company with global responsibility.  His income was apparently commensurate with that responsibility and he and Ms Hand purchased a residence for $3.2 million with the title in the name of Ms Hand.  It was mortgaged with the National Australia Bank.

9. In May 2008, a further property was acquired at Town V for $1.57 million and also registered in Ms Hand’s name.  To do this, the mortgage portfolio facility was increased to $4.66 million and secured against both of the real properties in the name of Ms Hand.

10. The global financial crisis then hit and in March 2009, the husband was made redundant.  He obtained consulting work. 

11. Although almost nine years had gone by without any contact between the husband and wife during which he had continued to make the $500 per week payments to her, in December 2009, the wife brought an application for an unspecified increase in maintenance based upon her inability to work and her declining medical condition. 

12. With that application pending, the husband and Ms Hand acquired a Town V property in the name of Ms Hand and a residence in Suburb T.  The purchase of one was funded by the sale of an earlier home.  Around that time, the husband was appointed the Chief Executive Officer of another mining company but that ended after a matter of months as a result of a takeover of the company.

13. The 2009 proceedings began in Melbourne.  The $500 per week maintenance had not been indexed but had been regularly paid by the husband.  It was increased to $1500 per week on an interim basis and the husband was ordered to pay a lump sum of $25,000 as well.

14. Having lost his CEO position and despite only being engaged in consultancy work, further purchases of property were made still in the name of Ms Hand.  The funding was from borrowings.  At the same time, sale of property which had increased in value meant there were funds available and the bank was apparently lending freely.

15. In 2012, the husband was appointed to the board of a company known as CA Company as non-executive director and shortly after, was appointed Chief Executive Officer.

16. The spousal maintenance proceedings were transferred to Sydney because of the incapacity of the wife.  By that time, the husband’s net capital position (he said) was $10.68 million of which approximately, $4.62 million was in superannuation and he had $870,000 worth of share rights.  Of that $10.68 million however, all real properties were registered in the name of Ms Hand.  The present evidence is that the husband has, in his mind, an identifiable equitable interest in those properties.  It was not canvassed in the present proceedings just what equitable entitlement the husband might otherwise have but he agreed that the financial affairs of he and Ms Hand were “intermingled”.  He guessed that he had a 50 per cent ownership of the (now) two real properties.

17. On 27 August 2012 in Sydney, after a contested three day hearing, Loughnan J ordered the husband to pay $3323 per week periodic spousal maintenance backdated for nine months and a lump sum payment of $120,000.  The husband was also ordered to pay the wife’s costs fixed in the sum of $330,000 or thereabouts.

18. The husband appealed against the orders but on 24 June 2013, the Full Court dismissed that appeal.  One sentence in the judgment of the Full Court explains the difficulties that the husband faced in the appeal.  It said:

    This is an appeal against the exercise of discretion.

19. Arising out of the 2012 hearing, Loughnan J described the assets of the wife as modest.  Not much has changed.  A statement of financial circumstances completed in September 2018 shows that she owns a 50 per cent interest in a suburban Sydney property owned equally with her mother.  It was not controversial in the present hearing that the wife’s interest was valued at $575,000 and is unencumbered.  The title to the property shows the wife and her mother registered as tenants in common in equal shares.

20. The wife also has a superannuation portfolio of just over $378,000 which appears to be in the accumulation phase.  She also has a variety of bank accounts with modest balances that fluctuate.  Most of these bank accounts were set up by her accountant for the purposes of endeavouring to manage her expenditure on specific categories.  In September 2018, the balances of those accounts amounted to $67,000.  Because of the involvement of the accountant, there have been significant accounting fees but the wife now also has legal bills outstanding.  The large accounting fees appear to have been paid from her superannuation capital not long before the hearing began.  In the assessment of her needs, this accounting cost is a contentious expense because she desires to use her accountants to assist her.  The challenge is to determine whether those sorts of costs should be allowed in the maintenance claim. 

21. The wife’s legal fees are also very large and Senior Counsel advised that during the hearing, he had sent a letter requiring an immediate part payment of his fees.  There are a number of reasons why the fees are high.  The wife continues to use Melbourne solicitors.  She has had attendances on them and also junior counsel from Melbourne who have travelled to Sydney.  She retains Melbourne senior counsel.  All of these things are justified by her on the basis that she has a relationship with her advisers and has confidence in them.  Again, the difficulty is how to perceive those expenses in the context of her need. 

22. The question of the diminishing superannuation fund arises because it could be converted to an annuity.  At the moment, the capital seems to be the only source of the payment of the professional expenses apart from the maintenance.

23. Insofar as the legal fees are concerned, the court was advised that the wife has incurred more than $500,000.  It is reasonable to assume that the wife has conducted this litigation on the basis that she anticipated the husband would be paying her legal costs, or for him to ultimately be making a contribution thereto as that is part of her application. 

24. The costs for both parties are hard to understand until an examination is made of the plethora of affidavits that have been filed.  Many of these were argumentative and largely unhelpful when it is clear that the focus must be the extent of the wife’s need and the reasonableness of the husband continuing to pay spousal maintenance for a relationship long ended. 

25. The husband’s property ownership is hardly controversial.  In his August 2018 financial statement, the husband disclosed a nominal amount of money in the bank but like the real properties, any interest he had in bank savings was in accounts in the name of Ms Hand.  Although senior counsel for the wife focussed with considerable interest and enthusiasm on two of those bank accounts the total of which had significant funds, when all accounts were totalled, the net savings position of the husband and Ms Hand came to about $14,000.  Suffice to say, the husband has paid his legal fees from his resources and those of Ms Hand.

26. Whilst the husband also has some shares, the bulk of his legal interest in any significant property lies in his AA Superannuation Fund where the balance is now just under $1 million.  He had previously significantly more than that but the fund has been used for property acquisition.

27. It is also important to observe that the degenerative and progressive nature of the wife’s multiple sclerosis meant that in the 2012 hearing, she could not be cross-examined.  The evidence discloses that her illness has not significantly changed and she was again unable to be cross-examined.

28. In the 2012 hearing, the husband made a concession that he could pay the maintenance and accordingly, the focus of that hearing was almost entirely upon the wife’s circumstances.  Now, things have changed. 

29. The wife’s need for support largely arises out of a simple and modest lifestyle that has not altered for years.  Her lifestyle is incomparable with that of the husband and his family. 

30. After the husband lost the appeal in 2013, he paid spousal maintenance until May 2017.  In 2016, he purchased a home in Suburb AB for $3.225 million but to acquire that, he (or more appropriately, Ms Hand) sold one of the other properties to fund the purchase.  Then, in December 2016, he was made redundant.  That precipitated these proceedings because he stopped paying the maintenance.

31. The husband’s redundancy took effect from 1 January 2017 and whilst there was a significant financial package associated with that redundancy, his debt position had to be met.  It was not the subject of dispute that that was where his money largely went.

32. In May 2017, then unemployed, the husband wrote to the wife that he intended to stop making payments of spousal maintenance.  Much comment was made during the present hearing about the husband’s letter written to the wife.  He hand delivered the letter.  At the same time, two other letters were sent to the wife’s mother and brother.  Senior counsel for the wife described the letters as “bullying” and containing “lies” as well as “threats”.  The letters show a man frustrated by the long-running obligation to support the wife in the light of his desire to live what was unashamedly an affluent lifestyle in a second family. 

1. As I have set out, at the time the husband’s relationship with the wife came to an end, the parties’ respective financial circumstances were modest and it is also not controversial that over the ensuing years from separation, the husband’s work and ability gained him significant reward.  It is not controversial that he paid the maintenance obligations until May 2017.  It is not controversial that the acquisition of property in the name of Ms Hand had nothing to do with avoiding his responsibilities to support the wife. 

2. The husband’s financial position has now changed again but he is 62 years of age and desires to “transition” (his word) to retirement.  It is not controversial that in undertaking the corporate tasks he has, there was significant impact upon his family.  He now says that he desires to reduce the stressors in his life and to participate in family activities.  It is also not controversial that the husband has a legal obligation to the two children of his marriage to Ms Hand.

3. In cross-examining the husband, senior counsel for the wife pressed him as to why Ms Hand was not working.  No doubt the purpose of the exercise was to establish that if the husband was financially strained, he could ameliorate that by Ms Hand obtaining some form of employment.  In my view, that was unrealistic having regard to the amount of time that she has been out of the workforce but there had also been an understanding that she would be a homemaker and parent to the children they have raised.  Senior counsel for the wife did not suggest to the husband that Ms Hand had any particular earning capacity that might ameliorate the dilemma.

4. Having met his obligations to the wife (albeit begrudgingly), the husband’s desire to move to transition into retirement, as well as spend time with his family with an ongoing obligation to pay spousal maintenance without any termination on the horizon, has no doubt caused him angst.  He has faced the wife’s criticisms of his letters written in May 2017.  His desire to end the spousal maintenance is understandable but whilst a lot of time was spent on those questions, it is necessary to ask about their relevance in what is largely a mathematical exercise.

5. Whilst the law provides for a significant exercise of discretion and value judgment in the approach to the determination of a spousal maintenance case, it ultimately boils down to what can be done in circumstances of largely unchallenged need on the part of the wife and an apparent desire on the part of the husband to limit his exposure to payment.  Thus, in the case of the husband, the issue comes down to one of priorities of payment. 

What is the intention of the legislation?

1. Shortly I turn to the relevant provisions of the Act. Before doing so, I mention authorities to which my attention was drawn. The first is the decision of the highest court of Canada in Bracklow v Bracklow [1999] 1 S.C.R. 420. The facts of this case were very similar to the present proceedings. The court there described the wife’s circumstances as there being no “economic hardship” having befallen her as a consequence of the marriage or its breakdown. There were problems of the wife’s health of a psychiatric nature, but they were not due to the marriage. The trial judge had found that there was no express or implied agreement between the parties that they were responsible each for the other’s support. The unanimous decision of the appeal court was that:

   Absent indications to the contrary, when two spouses are married, they owe each other a mutual duty of support.  Marriage is a joint endeavour.  When a marriage breaks down, however, a presumption of mutual support no longer applies.  This is reflected in the Divorce Act and the provincial support statutes which, require a court to determine issues of support by reference to a variety of objectives and factors.

2. The Canadian court found that the wife was eligible for support based on the length of cohabitation, the hardship marriage breakdown imposed upon her, her palpable need, and the respondent’s financial ability to pay.  McLachlin J on behalf of the whole court said (at [49]):

   Divorce ends the marriage.  Yet in some circumstances the law may require that a healthy party continue to support the disabled party, absent contractual or compensatory entitlement.  Justice and considerations of fairness may demand no less. 

3. In my view, it is not appropriate to extrapolate the principles from that decision to the present proceedings.  Various provisions of the Family Relations Act were considered by the Canadian court but they look at the role each spouse fulfilled within the family as well as express or implied agreements between them about support and maintenance.  They also refer to the parties’ economic circumstances.  In my view, the Australian provision imports no such consideration.  The Australian law is about an objective assessment of the economic circumstances of each party if jurisdiction exists.  In this case, those economic circumstances have been made a little more complicated by the intervention of the Commonwealth government in the passage of legislation known as the National Disability Insurance Scheme.  That legislation (and the relevant scheme), are new but in my view, it has a very significant bearing on this case.  I turn to that legislation in more detail below.

A variation or discharge of the 2012 orders?

1. To modify a spousal maintenance order, s 83 of the Act applies. It relevantly provides that the court may discharge (s 83(1)(c)), suspend (s 83(1)(d)) or (in specified circumstances) increase or decrease an order (s 83(1)(f)).

2. Although the hearing began on the apparent basis that the husband needed to establish one of the grounds in s 83, it was only at the end that there appeared consensus (albeit disagreement as to the relevant ground). The husband submitted that the correct basis was a discharge of the order under s 83(1)(c) of the Act. However, had that been conceded by the wife, there would be no extant order thereafter (subject to the making of the discharge order) and, as the parties had long been divorced, s 44(3) of the Act would have precluded the wife proceeding. Whilst that issue was raised, it is now not an issue because I am satisfied that this is a case where a variation rather than a discharge is appropriate.

3. Senior counsel for the wife said in final address that the wife conceded there was a basis to apply s 83 of the Act but he submitted that the wife relied upon s 83(1)(f) which is a variation of the extant order.

4. Here, there is a need to first determine whether the wife still meets the threshold and if so, whether the husband has the capacity to pay before determining which ground in s 83(1) applies. There cannot be an increase or a decrease of an order that no longer exists.

5. As I shall set out, I find s 83(1)(f) applies on the basis that since the last order was made, the circumstances of the wife have changed by virtue of the introduction of the NDIS to which I turn in a moment but also, the circumstances of the husband have changed in that his income stream is substantially different from what it was then. Both of those issues justify an order altering the previous amount ordered and in my view, appropriately in this case, by decreasing it but not discharging it absolutely.

The positions as the lawyers see them

1. The husband was the applicant.  His counsel Mr Matta opened the case on the basis that there were two issues.  First, could the wife adequately support herself having regard to the property she had and her entitlement to the benefits of the National Disability Insurance Scheme.  If she could not adequately support herself then the focus of the court had to be what was reasonable in any event.  That question raises the issue of the relevance of the applicant’s property as well as that of the respondent.  As property is to be taken into account (s 75(2)(b)), does it have to be expended or exhausted for self-support?  Does it have to be liquidated?  Is it just tokenly noted as being within the applicant’s control and then ignored?  The husband’s position is that it was a matter for the wife what she did with her property but that the court could not ignore it.  That is, it should be used for self-support.

2. Mr Matta said that the second limb of the case revolved around the husband’s desire to transition to retirement.  The continuation of the payment of spousal maintenance was said to erode his capital whilst (if the wife’s property was ignored) having the effect of preserving her capital.  That gave rise to the rhetorical question of whether or not the wife could better utilise her own capital anyway.  In my view, there is little enough already for the wife to better her capital position and she would not be much better off.

3. The nub of the husband’s case was that it was not reasonable for him to continue to maintain the wife because of his desire to transition to retirement.  Ultimately, as I shall find below, the husband has capacity at the moment to provide the necessary support albeit not to the level that the wife seeks.  That finding is determined not on the respective global approaches of the parties but rather, a delineation between what is necessary and what is discretionary after considering the wife’s needs and entitlements from the NDIS.  That distinction also gives rise to the discretionary determination of priorities of expenditure for both parties.

4. The wife’s case (as respondent) was that expenses had increased since the making of the 2012 maintenance order and that despite potential reimbursements from the National Disability Insurance, she still had a need for $3000 per week to meet her proper needs.  It was submitted that the husband had “the income, assets and financial resources” which made an order for spousal maintenance in $3000 per week reasonable and appropriate.  In my view, the wife faces two problems.  First, there is an assumption that all of her expenditure (and anticipated expenditure) ought be justifiably allowed for the purposes of determining her adequate needs.  In my view, the evidence does not support that conclusion.  Secondly, there is an assumption that the husband has control over the intermingled wealth of the family and that the wife should take priority over his second family.  In my view, justice ought not permit that.  Competing priorities have to be considered here.

The national disability insurance scheme

1. The wife applied to join the Scheme through the National Disability Insurance Agency on 1 November 2017.  In March 2018 she was informed that her “plan and support budget” had been approved for a period of 12 months commencing 21 March 2018.  Funding was said to have been budgeted for specific support in four separate categories each of which had a maximum amount of benefit available. 

2. Because there were proceedings on foot, the husband became aware of the wife’s interest in this scheme.  In June 2018, he applied for a suspension of the existing spousal maintenance order on the basis that the wife’s entitlement to the scheme meant that many of her expenses were covered by the scheme.

3. The husband had initially conducted the interim application in June 2018 on the basis that the total entitlement to the benefits of the scheme should be simply taken from the total expenses of the wife.  That was not the basis upon which I approached the matter.  Vague as the evidence then was, it was clear that some of the expenses of the wife were covered but there were certainly limitations on what her entitlements were and they had been capped by the relevant authority.  I ultimately had no opportunity to test the evidence but found that some of the costs should be taken into account and I reduced the payment obligation of the husband to $1600 per week accordingly.  The wife’s position now is that with more comprehensive evidence available, the amount should be returned to $3000 per week. 

Ms Hand

1. In late 2017 Ms Hand was joined to the proceedings by the husband.  The joinder was controversial.  The husband was then the respondent because the wife had brought enforcement proceedings when he stopped paying the maintenance in May 2017.  By an amended response filed on 30 October 2017, he sought an interim order joining Ms Hand.  Ms Hand not only did not then seek to be removed as a party but actively participated on the basis that her assets were at risk of being diminished if the husband had to continue to pay maintenance.  It seemed that her view was that she was indirectly paying or contributing towards the wife’s maintenance because the husband had high financial commitments to fulfil in supporting the lifestyle of his second family.  Initially it was the wife who complained about the joinder of Ms Hand and sought her removal.  The controversial issue was that the costs of Ms Hand were ultimately being either directly or indirectly funded by the husband.  The wife’s opposition then seemed to disappear.  As the matter progressed towards trial, Ms Hand was discharged from the proceedings on 29 November 2018 although it was made clear that the wife intended to seek costs against her in the future.

2. Ms Hand was not called as a witness for the husband and that was the subject of criticism by senior counsel for the wife.  In my view, apart from Ms Hand’s own limited income position, I doubt she could have added to the husband’s evidence which I find was comprehensive.

3. This trial extended over six days.  The majority of the time was spent in either submissions or in cross-examination of the husband.  To have extended it beyond that by involving Ms Hand including any cross-examination of her, could not be justified under the circumstances here. 

The litigious nature of these proceedings

1. In my view, this case was modestly simple but revolved around how the discretion provided in Part VIII of the Act should be applied. Despite my urgings about concerns over the costs being spent, considerable amounts of time were unnecessarily spent pursuing every issue.

2. Whilst there is an absolute obligation on all parties in financial litigation to make adequate discovery, there were disputes here as to whether that had occurred.  Again, much of that seems to me to have been unnecessary but in part, caused by the husband’s refusal to accept the wife’s need.  I say in part because the wife’s evidence as to expenditure was difficult to test in her absence and her reliance upon other people created another layer of evidence that needed to be considered.  As examples, there was an occupational therapist who assessed the wife’s needs but there was also her accountant whose staff spent considerable accounting costs (albeit not very recently) organising how the expenditure of the wife was to be recorded.  The accounting perspective of that expenditure was historical and different to the anticipated costs sworn to by the wife in her financial statement.  The absence of any capacity to test the wife’s financial evidence left counsel for the husband the task of testing the accountant’s evidence.  Even that evidence was controversial.

The controversial evidence of Mr BB and the wife’s financial statement

1. Of her financial statement, the wife said (by affidavit filed in September 2018), she relied on her accountants to provide her lawyers with necessary information and documentation for its preparation.  The document is endorsed with the statement that it was prepared by junior counsel.  In her affidavit filed 18 February 2019, the wife said that she needed “explanation and physical assistance” from her lawyers and accountants because she “could not possibly” have accomplished it by herself.  The speed with which this affidavit in February 2019 was undertaken would suggest that she did a remarkably quick and thorough job.

2. Despite her reliance upon the professionals, the wife said she did not keep all of her receipts but gave the accountants those that she had.  She said she told them of the “difficulties and confusion” about the multiple accounts that they had set up for her and the categories that had been allocated.  That was not the accountant’s perception.

3. When the accountant Mr BB came to her home, he told her to spend less.  However, the wife pointed to the inaccuracies of Mr BB’s document which he called a “profit and loss” statement.  It was the wife’s view that the statement was not reliable.  However, as to the financial statement, she said it was her “best estimate” of her expenditure at the time “and anticipated in the future”.  I consider that doubtful as the accountant impressed me as meticulous.

4. The lack of cross-examination of the wife made the task of the husband more difficult particularly as to expenditure.  The wife’s evidence gives me little confidence as to the accuracy of some items in her financial statement.  I intend to approach it with care.  That said, many items were not the subject of specific challenge, nor could they be.

5. Much of the wife’s reference to “anticipated in the future” came through in the estimates in her financial statement.  However, those must be based upon some historical fact.  Some examples which show the dilemma follow.

6. In the financial statement, the wife identified by asterisk, expenses that fell within the NDIS categories.  Gardening at “E5O” per week was not included with an asterisk.  In his evidence, Mr BB said that gardening was covered by the NDIS or at least some of it.  At the point of final address, senior counsel for the wife produced an aide memoir that agreed with Mr BB’s evidence on that point.

7. Another example of the dilemma is that Mr BB was asked about the disability support pension.  He said the wife’s pension was $916.30 per fortnight or $458 per week.  In her financial statement, the wife said it was $209 per week.  Whilst I have to ignore that pension, as I must, it is concerning that the discrepancy remains unexplained.

8. The wife claimed an estimate of $50 per week for house repairs but Mr BB said “possibly” some of those, “not necessarily all of them”, would be covered by the NDIS.  The “house repairs” reference in the financial statement was not asterisked and I do not know whether (and if so what) amount might be covered by the NDIS.  However, when I examine the categories of expense covered by NDIS, it is hard to understand why it would not be covered by the scheme’s categorized description.

9. Another simple issue is the amount in the wife’s superannuation fund.  In her financial statement as at September 2018, it was noted as $409,032 but Mr BB said that it was $378,285 just prior to the commencement of the February 2019 hearing.  On 26 October 2018, one month after the financial statement was sworn, the wife withdrew $50,382 to pay Mr BB’s fees.  It will be obvious that the discrepancy between $378,000 and $409,000 is not $50,000.  Albeit not enormous, the capital affects the notional interest value that could be earned on an annuity.  Like the other issues, this remains unexplained and confusing. 

10. Prior to the NDIS system eligibility getting under way, which was sometime after March 2018, Mr BB had been using a variety of bank accounts to get the wife to discipline herself about her expenditure.  He said that to the extent that the receipts and information were given to him that did not fit with his categories, he made alterations to the allocations.  To a large degree, that is no longer relevant because the wife is not using the accounts.  However, it is relevant to distinguish unavoidable and discretionary expenditure particularly where the wife asserts that her financial statement relates to anticipated expenses for the future.  I am particularly troubled about the fact that the wife maintains that not only was she spending $1600 per month on the fees of Mr BB, all of which now seems to have been paid, but that was also claimed as an expense.  The wife wants that expense to be treated as part of the money she needs from the husband.  Equally importantly, she relied upon the lawyers to prepare the financial statement including expending costs on counsel travelling to Sydney for the purposes of the preparation of that document.

1. Another example of the dilemma arose over what was being spent on food and household supplies in the period prior to September 2018.  In her financial statement in September 2018, the wife said she estimated that she spent $345 per week.  In the profit and loss statement which related to a nine month period up until March 2017, Mr BB said that her food and household supplies came to $42,460 or extrapolated out to twelve months, about $1000 per week.  There was furious debate between counsel about the accuracy of all of this.  The same document showed clothing and shoes and accessories at $741 (for nine months) whereas 18 months later, the wife said she needed to estimate on spending $180 per week or $9000 per annum.  Whilst the wife’s financial statement was not tested, Mr BB agreed that he had had a part in its preparation.  The court is left with a confused picture of what is the wife’s reasonable need.

2. The wife endeavoured to rectify all of this by the filing of an affidavit on 18 February 2019 when the proceedings were adjourned over a weekend.  In this affidavit, the wife explained her expenditure relating to food and household supplies as described by the accountant.  She said it included shoes and clothing and she then went on to elaborately detail her expenditure.  In the end, the wife said:

   When preparing my two financial statements (filed 16/10/17 and 21/9/18) with the assistance of my lawyers and (the accountants), I carefully reviewed by expenditure in the preceding year, and any changes thereto.  The amount set out in the Statements were my best estimates of my expenditure at the time and anticipated in the future. 

3. Without a clear understanding of why the wife had that anticipation and how her accountant’s concern about her need to spend less was answered, I have great difficulty knowing which version of the financial position should be given significant weight.

4. It has always been the case that the absence of cross-examination makes the court carefully monitor weight to be allocated to evidence.  Senior counsel for the wife endeavoured to assist by preparing an aide memoir comparing the wife’s expenses in 2012 with those presently incurred but that does little to ameliorate my concern as to the accuracy of the evidence now given.  The question raised is whether the estimated costs are justifiable and that depends upon the information concluded by the accountant and lawyers.  Mr BB’s evidence therefore was empirically based even though the wife said she thought it inaccurate.  For the reasons I shall develop, I intend to only accept the accuracy of some of the wife’s anticipated expenditure.

The wife’s medical condition

1. A right to maintenance can arise where the applicant is unable to adequately provide support for herself or himself by reason, inter alia, of physical incapacity for appropriate gainful employment.

2. In the 2012 proceedings, for the purposes of that threshold question, the husband conceded the evidence of the medical and health professional experts who were not required for cross-examination.  In essence they all agreed that by virtue of the multiple sclerosis diagnosis, the wife had a significant impairment in her occupational, social and independent functioning.  Their concluded view was that she would increasingly require services in the future including ongoing consultation with an accountant.  Her case management was deemed beneficial because of the number of services she required but also because she was unable to physically negotiate her environment with her probable continuing cognitive decline. 

3. In 2018, that was all reviewed and evidence was provided for the present hearing.  Associate Professor K provided an affidavit that was filed in February 2019.  He had been the treating specialist for the wife since 2003 and he had last seen her in January 2019.  He said that there had been several “flare-ups” of the multiple sclerosis.  There had been injuries requiring rehabilitation.  He said that she remained “substantially impaired” by her multiple sclerosis and he provided a MRI report that he had sought which compared a previous examination in August 2016.  Overall, the situation was unchanged. 

The evidence of MS O

1. Ms O is an occupational therapist who was the person referred to in the 2012 report as case managing the needs of the wife.  Notwithstanding the recommendation in 2012 that the wife needed her services, Ms O told the court in the present proceedings that she had had no contact between February 2016 and May 2018.  What precipitated the resumption of the relationship between the wife and Ms O was the introduction of the National Disability Insurance Scheme (“NDIS”).  The wife needed the help of Ms O but this witness said she was not familiar with the intricacies of the funding of the NDIS but rather, her role was to assess the needs of the wife. 

2. Whilst Ms O may not have been familiar with the NDIS funding, as best I can determine, she participated in meetings.  Although the wife’s evidence was lacking on the subject of how these meetings progressed, the NDIS legislation makes it clear that the focus is on the applicant’s needs.  No evidence was called by the wife from anyone to show that the NDIS assessment was wrong according to law.  The wife disputes that the NDIS assessment covers her needs but the relevant legislation creates a problem for this court in assessing the adequacy of the wife’s needs where she estimates expenditure which the NDIS seems not to agree with.  I return to the NDIS legislation in a moment.

3. Ms O was not required for cross-examination.  Counsel for the husband argued that her evidence was of no probative value rather than unchallenged.  This submission arose because the therapist reported largely on what the wife told her were her desires and needs.  I have taken the view that it is more about how much weight should be given to the therapist’s views.  For the reasons that follow, very little turns on Ms O’s views.  The court still has to assess the reasonableness of the wife’s expenditure arising out of her desires and needs.

4. Of Ms O’s evidence, for example, it is not controversial that the wife needs carer assistance.  The carers prepare lunch and evening meals for the wife and assist with short outings including attending at a local shopping centre.  However, is there relevance in what the NDIS assesses as the wife’s need if it differs from what the wife wants? 

5. As for the wife’s view of her needs for carers, she told the court in an affidavit filed 4 June 2018 that she anticipated needing assistance for approximately 37 hours per week.  In a subsequent affidavit filed in February 2019, the wife said that Ms O had assisted her to increase her carer’s hours.  That statement was after Ms O’s affidavit was filed but in any event, I consider it all falls into the NDIS categories of costs as to how the wife’s life is assisted.  The focus of the problem is the funding shortfall that the wife faces bearing in mind what the NDIA will pay.  She wants to have more carer time than the NDIA have assessed.

6. A dilemma is that the NDIS covers registered providers but if the wife prefers her own services which are not NDIA registered, there is a problem with refunding any expenses incurred.  The wife also argues there are limitations on what the carers’ funding covers.  An example is whether or not they are covered to take the wife to medical appointments.  To some extent, the wife relies upon her brother to do that.  However, a careful examination of the scheme enables me to find that an assessment has been made and whilst this is the subject of an incomplete review, the Scheme requires the Agency to assess the need and then support it.  Travel and transport have been considered in that assessment.  Ms O was (according to the accountant) at the meeting with the NDIS representative.  I do not know whether her position has altered in circumstances where the meeting was after the affidavit evidence was filed.

7. Ms O said that the wife’s future care needs would gradually increase over time and that these “time frames” were “impossible to estimate”.  There is no evidence as to longevity expectations and I can only assess the situation on the basis of what is currently occurring.  I am conscious that the evidence also shows little change in the wife’s disability since 2012.

Dr G

1. One piece of evidence relied upon by the wife that might have given some insight as to not only her present needs (as distinct from her desires) and how that might change in the future, came from Dr G.  Dr G was apparently not available for cross-examination but in any event, her affidavit was filed in October 2017 so almost 18 months prior to the hearing.  In circumstances where the multiple sclerosis diagnosis and the cognitive difficulties that came with it were not the subject of major dispute, the evidence of Dr G does little to help. 

2. One consistent problem for the wife over the years has been her capacity to fall and be injured.  One such fall delayed the commencement of the trial as she was incapacitated in hospital.  There was uncertainty as to whether or not she would be going home or to a rehabilitation place.  In an affidavit filed by the wife on 1 February 2019, she set out how she was incurring extra costs associated with the problems of the fall but this case also raises the question of whether I can, or should, make allowances for prospective falls, extra costs arising from such injuries and indeed, the deterioration of the wife’s physical and mental capacity. 

3. The obvious example where there is a dilemma arises from when the wife was hospitalised.  During that hospitalisation, she did not use the carers but now that the NDIS system is in place, any such costs will be borne by the NDIA (except the shortfall).  In any event, the shortfall arose because the wife wanted to pay more than the NDIS prescribed.  That shortfall would presumably not have been paid during her hospitalisation unless she had contracted with the carers to pay regardless of whether the service was used.  If that was the case, and it may have been here because the wife had contracted with different carers, the evidence did not assist me.  These sorts of perplexities bedevil this case.

4. My concern about the wife’s evidence is that the court is asked to anticipate costs and expenses for various needs but that is speculative.

NDIS and self-management

1. One issue raised by Ms O was the question of the wife’s financial management.  She said the wife received assistance from the accountant that went back to 2012.  Ms O wrote that the wife was able to use on-line banking to pay her bills but that she had some confusion with bill payments.  That related to which were to be paid by her and those that should have been handled by the accounting firm.  Thus, some of the financial management costs could be saved by not using the accountants.  The “confusion” mentioned by Ms O and the wife’s desire to have the accountants look after her affairs are contentious.  The accountant was of the view that the wife could not manage.  That raises the question of whether the NDIA has such a view and such a service.  There is such a provision and the question comes down to whether, as an expense for consideration in a maintenance case, the wife should be allowed to claim accounting fees because she feels more comfortable about the accountants undertaking that work.  If she used the NDIS system, the wife would save a considerable amount of accounting fees.  As I mentioned earlier, in October 2018, the wife spent over $50,000. 

Mr BB’s view about management

1. There was dispute over the evidence of the accountant as to whether or not he had recommended and/or suggested to the wife that she move the accounting management to the NDIA. 

2. Mr BB said that because of the wife’s disability, he assisted in providing financial information to her lawyers for the current proceeding and that that exercise involved a significant amount of accounting work for which the wife was billed.  To minimise the costs for the wife however, Mr BB gave the management exercise to employees within the practice.

3. It was Mr BB’s view that if the wife could manage the dealings with the NDIA, a lot of the work could be taken on by them and thereby reduce the wife’s costs.  That is not the wife’s position.

4. In his final written submission (at paragraph 41) senior counsel for the wife submitted that it was “fundamental” to the wife’s happiness and ability to cope that he have the ongoing benefit of the accountants rather than be managed by the NDIA system.  I consider that emotive statement is not borne out by the evidence.

5. In an affidavit filed February 2017, one of many relied upon for this hearing, the wife said that she could not manage without the assistance of the accountants.  In her affidavit filed on 20 September 2018, she said that the accountants managed her finances but otherwise she undertook banking, on-line purchases and payments of some bills.  Ms O confirmed that the wife continued to use those services and paid the bills when they arrived.  The wife’s concern was that she would have to scan documents but it remains unclear whether the carers could do that or indeed the scheme-appointed manager.  The wife must have been managing some of these tasks because Ms O said that after 2016, her services were not “required”.  During that period of time, the wife must have relied upon the accountants.  Ms O is now back in the picture.  As at September 2018, the costs of the accountant were said to be $1650 per month and Mr BB was concerned how those costs could be ameliorated or avoided.  In a budget as tight as that of the wife, that amount of money is significant.

6. One of the tasks someone has to undertake in dealing with the NDIA is the completion of contracts for services with the carers who are needed by the wife.   In her affidavit filed 19 February 2019, the wife said there was no “flexibility” for her in her choice of carers and if she is to have their expenses covered by the NDIS, all of these people would have to be registered.  In my view the evidence does not support the assertion that there is no flexibility.

7. Remarkably, the wife said she had not been spoken to by Mr BB about the prospect of moving all of his services across to the NDIA.  Mr BB may not have done so but it is clear that he was conscious of ameliorating the wife’s costs.  In her affidavit sworn on 18 February 2019, the wife said that she had not been informed by anybody about a change to her account management.  She said that a NDIA representative attended on 5 February 2019 to review her entitlements for the 12 month period ahead and Ms O was present.  She said no mention was made of the agency taking responsibility for the management of her entitlements.  She said she did not want to change things because she was happy and confident with the current arrangements and was alarmed at any change being made.  She said the NDIS process had been confusing and worrying for her.  Against that, there is no further evidence from Ms O about whether the wife might be capable, with assistance, of handling the various accounting practises. 

8. The wife’s evidence is that she cannot read written documents of any length nor properly understand them unless they are first read to her and explained but she can access the internet.  She did not know how to access a government department portal but those matters seem to be things that could be addressed either by Ms O or by the NDIA. 

9. Whilst the NDIA had provided details of categories within a budgetary framework to her, the wife said that she found this “very confusing”.  The wife’s resistance to the NDIS management scheme could not be tested because of the inability of cross-examination.  In the light of the evidence of Ms O and that of the wife as to her capacity to do such things as banking and having the ability to use the internet, her resistance seems odd. 

10. There was considerable difficulty therefore in understanding just how complex the accounting task has become.  The wife’s evidence on the subject was lacking and addressed only her subjective view about the degree of difficulty.  It was only when the husband produced evidence from the NDIA about the role it intends to fulfil that I obtained a better understanding about what is available to the wife.

What does the NDIS offer?

1. Exhibit H4 is an NDIS information booklet.  The document asserts that the management plan allows the wife to have choice and control over the providers of services.  It provides an opportunity for a plan manager to be funded by the NDIS.  That person’s role is to pay the service providers, help keep track of the funds, and “take care of financial reporting” which is described as managing book-keeping and records.  The manager is also to help choose providers.

2. Considering the evidence of Mr BB as to what his firm has been doing for the wife, the NDIA role sounds remarkably similar.  The submission by senior counsel for the wife that the continued use of the accountants was “fundamental” to the happiness of the wife, has little to commend it.  It may very well be that the wife desires that system but in terms of her reasonable needs, in a spousal maintenance case, I see no reason why the husband should be responsible for the accounting fees.  In my view, there is no basis to say that the wife could not manage without the accountants.  She certainly said in 2017 that she could not manage without their “assistance”.  I find that the assistance is available without cost to her and accordingly, accounting fees are not part of her adequate or reasonable needs.

3. Senior counsel for the wife objected to the admissibility of the booklet.  Notwithstanding the objection, I admitted the document into evidence on the basis that its probative value here lies in the fact that it points the court to the relevant legislation and is a public record (s 48(1)(f)) of the Evidence Act 1995 (Cth) (“Evidence Act”) But, more importantly, the wife had access to all of the NDIS details about her entitlements. In her evidence filed in September 2018, the wife referred to four “categories” of expenditure entitlement. She said they were:

   ·Assistive technology;

   ·Core building daily activity;

   ·Core supports; and

   ·Transport.

   Looking at the relevant document and the legislation, I do not consider that is an accurate description. 

4. The scheme refers to three types of support:

   (a)Core support;

   (b)Capacity building budget; and

   (c)Capital budget.

   In the context of those descriptions, because of the nature of the legislation involved, I propose to examine the wife’s financial statement along with the evidence provided by her accountant.

5. The “Core” category relates to assistance with everyday needs, household cleaning and/or yard maintenance.  It relates to everyday items including “continence” and technology.  It provides for a support worker assistance and also transport. 

6. The second category relates to a support coordinator and includes details about home living and plan management.

7. The third category relates to home modifications and technology.

The shortfall?

1. If the wife chooses to spend more than the NDIS budget, should that excess or shortfall be permitted to be added to her reasonable needs?

2. In relation to what was described as the shortfall between the wife’s anticipated expenditure and what was covered by the NDIS, most of the wife’s evidence is contained in the affidavits filed 4 June 2018, 20 September 2018 and 19 February 2019.

3. In her affidavit filed 4 June 2018, the wife said that the NDIA statement had not been prepared by her or anyone on her behalf.  She said:

   Whilst the “Participant Statement” describes my general situation, it does not accurately describe my current required care or domestic arrangements.

4. She then went on to say that she had been provided with a “funding budget” in four areas.  Subsequent to that affidavit, the wife confirmed that the various categories had been increased as a result of a review and she then set out the amounts involved.  Importantly, the wife said she did not know how the amounts were assessed or calculated and she found it very confusing.

1. The Full Court also observed (at 75,195), s 75(2) did not (and still does not) indicate priorities or weight in respect of the relevant factors requiring consideration. The Full Court was troubled about an approach that allowed all expenditure to be deducted from income to assess a maintenance obligation because (as here):

   There is usually very little left and the consequence of that is that the amount of maintenance which is assessed is usually quite out of kilter with the actual needs (of the child)…

2. The Full Court felt that the courts should deduct from income “unavoidable or compulsory expenses together with necessary expenses”. That however has to be also seen in the context of what the Full Court said in DJM (supra) about obligations to support a spouse being somewhat different to those of supporting a child.

3. In a case such as this where the lifestyle of the husband is significant in financial terms, two observations must be made. First, some allowance has to be made for that lifestyle having been acquired well after the parties’ relationship came to an end and they separated and with the commitments undertaken by the husband with a new family. Secondly, nothing in the Act refers to an ending of the obligation to provide financial support for a spouse and as such, it cannot be presumed that spousal maintenance is only payable during a work life. There has to be a balance.

The submissions of the parties

1. Mr Matta on behalf of the husband provided the court with a written outline of argument as did senior counsel for the wife, Mr St John.  I propose therefore only to deal with some of the salient points here.

2. I have dealt earlier with the s 83 point.

3. One argument raised by the wife was whether the court should deal with the issue of the wife’s costs before determining her maintenance. I rejected that argument at the time. I do so again on the basis that it is inappropriate to determine the question of costs until the outcome of the proceedings having regard to the provisions of s 117 of the Act. That provision requires that each party pays their own costs unless there are circumstances to justify a departure from that principle. However, Mr St John also raised the subject of the wife’s own legal costs and I have already mentioned the high quantum involved. It is inappropriate for me to do more than say that I acknowledge the wife will have costs but I cannot simply deduct from the wife’s resources all of those costs. The wife has undoubtedly contracted with her lawyers and presumably, although I have not been given any specific detail, been given advice as to the impact of contracting out of the scale of costs provide by the Family Law Rules 2004. Whether someone else is able to provide financial assistance for the purposes of funding the case, I do not know. Whether the wife may have been eligible for some form of legal aid, the evidence remained unsaid. In the circumstances, it is not appropriate for me to presume that the wife’s capital position will be reduced by her existing lawyer’s demand for payment.

4. Mr Matta submitted that in relation to the wife’s financial position, the court knew that she had the money in the superannuation account but it was also clear that she had an unencumbered interest in the property in which she lived with her mother taking the total value, albeit no expert evidence of the valuation, to $1 million. He submitted that the wife was endeavouring to ignore that financial position but was requiring the husband to eat into his capital position to support her. In my view, both parties are caught by the same problem but s 75(2)(b) requires that property to be taken into account.

5. The disparity between the parties’ capital positions is only one of the considerations required of the court.  The argument put by Mr Matta is too simplistic.  For example, if the wife was required to somehow convert her capital interest in the house to an income producing asset, the court would then have to factor in some rental expense.  It would be undoubtedly crystal ball gazing to try and anticipate how long that would last bearing in mind the nature of the wife’s illness.  There was some discussion in cross-examination of the husband about the possibility of a reverse mortgage but that too was mere speculation. 

6. In my view, it is appropriate to determine the matter on the basis of readily accessible income on the assumption that the wife needs somewhere to live. However, there is a problem in this area as well. As Mr Matta conceded, s 75(3) provides that the court is not entitled to take into account eligibility on the part of the wife for an income-tested pension. In a jurisdiction where fairness and justice and equity, let alone what is proper, form the foundations of determinations, is perplexing that an apparent permanent non-income-tested pension should be ignored. Mr BB said that the disability pension was not affected by any spousal maintenance order because maintenance was not deemed to be income.

7. The court can take into account the wife’s eligibility for the assistance she receives from the National Disability Insurance Scheme but cannot take into account the disability pension.  I have ignored the disability pension.

8. Mr St John QC submitted that the whole of the case put by the husband revolved around trying to avoid the restrictive provision of s 72 of the Act. He submitted that the course proposed by the husband to try and restrict the approach to the ordering of maintenance obligations was not permitted under the Act. To a very large degree I agree with that submission and have set out what I understand the law to be and how the discretion should be exercised.

9. In relation to the husband’s argument that the wife was endeavouring to have the maintenance paid out of capital, Mr St John submitted that the husband had chosen to pay such things as school fees and holidays out of capital because the reality on his own figures was that he did not have enough income in the true sense, to meet all of his committed obligations.  Mr St John submitted that on the basis of the husband’s own argument, he was expecting the wife to pay for her own maintenance out of her capital.  That ignores the fact that she has benefits from the NDIS but also the disability pension which must be ignored.  Her capital position was controversial and there is an argument that she has saved money.  Against that, just using fluctuating balances does not help.  As I have already observed, the wife paid her lawyers for their appeal work but in turn, they have not recovered any such costs.  The capital argument therefore has little relevance.

10. The reality here however is that determining the capacity of both parties either to support themselves or to contribute towards the support of the other amounts to the art of the possible. 

11. Mr St John provided the court with two aide memoirs setting out the estimated care costs but also the anticipated weekly expenses by way of a comparison with the position before Loughnan J in 2012. In respect of a comparison, I have taken the view that it is largely unhelpful because the court needs evidence of what is happening now because of the concession that the husband (and to that extent, the wife) met the test in s 83 of the Act.

12. In respect of the National Disability Insurance Scheme, Mr St John was at pains to point out that his client had no idea how the bureaucracy of the Agency would deal with the various categories of entitlements that she had. However, the legislation and documents speak for themselves. The wife has the benefit of a review albeit she has indicated dissatisfaction with the lack of communication from the agency. The fact that she has a review is a matter that I can take into account on the basis that the whole purpose of the scheme was to try and improve the lifestyles of persons in Australia affected by disabilities. Strict as the requirement of s 75(1) is, this is a factor I take into account in s 75(2)(o).

13. Despite the passing of the NDIS, no alteration has been made by the parliament to the provisions of ss 72, 74 and 75(2) of the Family Law Act. There is therefore a clash between the legislative provisions but I consider I should be guided by what was said in McGarrigle (supra) notwithstanding the parliament presumably contemplated that persons entitled to assistance under the disability scheme were also entitled to maintenance. 

The just cause argument

1. Counsel for the husband submitted that with the transition to retirement, there was just cause to end the maintenance.  This could be seen as part of the “enough is enough” argument but I did not accept it was put that way.  I understand it was said that because the husband’s expenses would not be able to be met by his future income when he retired, it was proper to stop the payment now.  That too is a departure from the intention of the legislation.

2. The husband pursued a discharge of the order on the basis that s 83(2) provides that a change of either parties’ circumstances justifies a change of the order. However, s 83 also provides for an alteration of the amount of spousal maintenance rather than just a discharge. I reject the husband’s claim for an absolute discharge of the order.

3. In respect of the “just cause” argument, counsel for the husband submitted that those words were considered by Lindenmayer J in Lutzke and Lutzke (1979) FLC 90-714 where his Honour noted that the Act was silent on what might constitute a just cause but they had to be interpreted in the context of the Act as a whole. His Honour noted s 83(7) and went on to say that in respect of a s 83 determination, the court still had to have regard to the provisions of ss 72 and 75.

4. Counsel for the husband submitted that the husband’s assets had accrued after separation and by his own exertion.  It was submitted that only now, “after a long and taxing career”, the husband was unable to further fund the wife’s expenses from his income which has reduced significantly.  I find otherwise.

5. It was submitted that relying on s 75(2)(o) it was in the interests of justice that the litigation and ongoing maintenance come to an end because it was proper that after almost 20 years of spousal maintenance support paid from a high income that was no longer available, there was just cause to discharge the order. I reject that as being inconsistent with the Act.

6. Senior counsel for the wife submitted that s 75(2)(o) had to be read according to the ejusdem generis rule.  He pointed to the Full Court decision in Ferguson and Ferguson (1978) FLC 90-500 but that case was all about conduct. As the Full Court there observed, Part VIII was addressing financial matters and maintenance alone was based on need and economic capacity.

7. Section 75(2)(o) must be read in the context of the other matters in s 75(2)(a)-(n). If there is conduct which has an economic significance in the parties’ dealings with each other, it might then be relevant. Thus, senior counsel for the wife submitted that the husband could not rely on s 75(2)(o) to argue that it was simply proper to discharge the maintenance order on the basis that he had fulfilled his obligations for many years. I agree.

8. In my view, the discretion to make an order which is “proper” does not put the court at large. The court is obliged to exercise its discretion in accordance with the legislative intent as clearly expressed in ss 72 and 74. Thus, s 75(2)(o) does not stand on its own but rather, has to be seen in the context of what the Full Court described as need and economic capacity.

9. The final matter I wish to raise from the submissions concerns Ms Hand.  Mr St John was highly critical on a number of occasions that the husband had not called Ms Hand as a witness.  Indeed, he submitted that I should draw an inference adverse to the husband because Ms Hand had been a party to the proceedings until removed; had provided evidence to the court as to her financial position; but had also sat in court throughout the proceedings.  He submitted that I should draw an inference adverse to the husband of the type referred to in Jones v Dunkel (1959) 101 CLR 298 along the lines that calling her as a witness would not assist his case.

10. There are preconditions to the application of the rule in Jones v Dunkel.  For example, no inference can be drawn unless and until enough has been proved to warrant the conclusion adverse to the person not giving evidence.  There must be a situation first where the very nature of the case admits of explanation or contradiction (per Windeyer J at 321).

11. Here, the lawyers for the wife had access to various documents from Ms Hand.  There were various complaints made during the hearing about the lateness with which those documents were provided but at no stage, was any request made to call Ms Hand.  No adjournment application was made as a result of inadequacy of discovery.  This case has been extant for a long time.  The husband was cross-examined at length over a number of days about his financial position and at all times, he answered questions about Ms Hand’s interests.  He was questioned at length about why she was not working and his answers were plausible.  The husband and Ms Hand chose to start a family and the obligations for spousal maintenance were met up until May 2017 and then later resumed when the court so ordered. 

12. Even if Ms Hand was to be called as a witness about her capacity for employment, apart from the evidence that she had been out of the workforce since the birth of their first child, there was the unchallenged decision made that she would be a homemaker and parent to their children.  In the circumstances where the maintenance had been paid and the husband had a high level of income, it would be dangerous for the court to subjectively determine that she had to go and find employment at her age and stage of life.  It will be remembered that one of the issues raised by the husband was his desire to transition into retirement so that he could spend more time with the family having regard to how he managed to create the affluent lifestyle including by his absence from the family. 

13. In the circumstances, it is difficult to know what evidence Ms Hand could give and what evidence the husband did not give.  Accordingly, I reject the suggestion that an adverse inference should be drawn in relation to the absence of Ms Hand.

Conclusion

1. Being satisfied that the wife cannot adequately support herself without maintenance, I find the husband has the capacity to pay.  Of the $780 available before discretionary expenditure, and allowing him some funds to provide for commitments he has always had towards his family, the husband should contribute $500 per week commencing now towards the maintenance of the wife.

A discrete extension of time issue

1. Unrelated to the spousal maintenance issue is a discrete application by the wife for extension of time to serve a specific notice relating to costs arising from the husband’s unsuccessful appeal 2012 orders.

2. Unusual though it may seem, despite the Full Court dismissing the husband’s appeal on 24 June 2013, the wife (or more particularly, her solicitor) did not complete the necessary steps to define and quantify the costs of the appeal. She now seeks an extension of time under the Family Law Rules 2004 to do so.

3. The husband’s position is that I have the power to grant the extension of time but should dismiss the wife’s application having regard to what can only be described as an extraordinary delay.

4. In my view, approaching the Full Court, or at least a judge of that division of the court, is the only way the extension can be granted.

5. The power to grant an extension of time does lie in a judge of the trial division if there is no judge of the appeal division available but it seems common ground that no approach to a Full Court judge has been made. It being agreed that the wife needs the extension of time, the relevant legislative provision is set out in s 94(2D) of the Act.

6. The Act provides that applications of a “procedural nature” may be heard and determined by a judge of the appeal division or otherwise a judge if no appeal division judge is available.  An argument that the appeal division no longer has a role to play because the appeal is concluded, should therefore be rejected. 

7. Senior counsel for the wife relied upon a judgment of the Full Court which seemed to suggest it was open to the wife to make an application to a judge other than a judge of the appeal division.  Their Honours had to deal with an appeal from an order for extension of time granted by a judge of the trial division.  They did not however have to decide the point because they re-exercised the discretion anyway.  I do not consider the decision assists.  In my view, I have no power to grant the wife’s application until such time as there is evidence that she has approached the Full Court and there is no judge available to determine that application.  Her application therefore must be dismissed.

I certify that the preceding two hundred and eighty-seven (287) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 9 April 2019.

Associate: 

Date:  9 April 2019