Campbell and Campbell
[2009] FMCAfam 518
•29 May 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CAMPBELL & CAMPBELL | [2009] FMCAfam 518 |
| FAMILY LAW – Discharge spousal maintenance – inadequate financial disclosure – balancing exercise – wife’s interest in property and monies – wife successful in winning prize moneys on “[quiz show omitted]”. |
| Family Law Act1975 (Cth), ss.72, 74, 75(2) & 83 |
| Bevan & Bevan (1995) FLC 92-600; 19 Fam LR 35 Brown v Brown (2007) 37 Fam LR 59 Collins & Collins (1990) FLC 92-149 Evans & Evans (1978) FLC 90-435 N & N (1997) 92-782 Waters & Jurek (1995) FLC 92-635 |
| Applicant: | MR CAMPBELL |
| Respondent: | MS CAMPBELL |
| File Number: | SYC 1318 of 2007 |
| Judgment of: | Kemp FM |
| Hearing dates: | 23 November 2007, 13 & 14 August 2008, 27 & 28 January 2009, 1 April 2009 |
| Date of Last Submission: | 1 April 2009 |
| Delivered at: | Sydney |
| Delivered on: | 29 May 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr Hodgson |
| Solicitors for the Applicant: | H.A. Miedzinski Lawyers |
| Counsel for the Respondent: | Mr Johnston (and subsequently self-represented) |
ORDERS
That order 7 of the orders made by the Family Court of Australia at Sydney on 20 February 1997, namely:
"That the husband pay direct to the wife by way of maintenance for her the sum of $450 per week and that the first of those payments be made on the 27th day of February 1997 and weekly thereafter"
be vacated and discharged as and from 1 March 2010.
The husband to pay within 28 days any monies, up to the sum of $250.00, and to sign all documents reasonably required to enable the discharge of the mortgage in registrable form together with the title deeds to Property C (“the Property C property”) to be provided to the Executor of the Estate of the late Ms C mother or to the wife to be held by her on behalf of the said Executor pending the grant of Probate of the wife’s late mother’s last will and testament.
All exhibits tendered in these proceedings, be returned at the expiration of 1 (one) calendar month, unless an appeal is lodged.
The solicitor who issued any subpoena collect the subpoenaed material produced and return it to the owner in 14 (fourteen) days.
All outstanding applications (save as to costs, including any reserved costs) otherwise be dismissed and the matter be removed from the list of cases awaiting finalisation.
In the event that an application is made for an order for costs by either of the parties:
(a)Any applicant party is to file and serve an updated Financial Statement and any other necessary affidavit evidence with a submission in writing as to the basis upon which the orders for costs are sought by that party within 21 days.
(b)Any respondent party to any such application is to file and serve within a further 21 days of the service of such a submission and statement an updated Financial Statement, and a submission in writing in answer.
(c)Any applicant shall have a further 14 days in which to lodge any submissions in reply.
In the event that no such applications are made within 21 days from the date hereof, there will be no order as to costs.
IT IS NOTED that publication of this judgment under the pseudonym Campbell & Campbell is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYC 1318 of 2007
| MR CAMPBELL |
Applicant
And
| MS CAMPBELL |
Respondent
REASONS FOR JUDGMENT
This is an application by the husband filed on 26 February 2007, seeking orders to the following effect:
(1)That order 7 of the orders made by the Family Court at Sydney on 20 February 1997, namely:
"That the husband pay direct to the wife by way of maintenance for her the sum of $450 per week and that the first of those payments be made on the 27th day of February 1997 and weekly thereafter"
be vacated and discharged as at the date of the last payment which has been made.
(2)That the respondent wife pay the applicant's costs of and incidental to this application.
The husband submitted that the discharge of order 7 (“the subject order”) should occur as and from 26 February 2007, being the date the father’s application was filed.
The respondent wife in her response filed on 16 August 2007, seeks the following orders:
(1)An order dismissing both orders sought by the applicant husband;
(2)That order 7 made on 27 February 1997 be varied as follows:
That the amount of the maintenance order be varied on and from the payment next due after 31 December each year in accordance with the variation in the CPI (all groups of Sydney "the index") by comparisons of the index as it stands at 31 December immediately preceding the date of the variation as compared with the index at 31 December, 12 months before;
(3)Costs
The wife submitted that, in any event, if the Court was minded, that if a CPI increase would not bring about a fair and equitable result, then the Court could make such order that would otherwise be just and fair. The Court accepts this submission, subject, of course, to affording the parties procedural fairness.
The husband relies, subject to all proper claims as to admissibility, on:
a)his affidavit sworn 23 February 2007;
b)his financial statement sworn 23 February 2007;
c)his affidavit sworn 12 August 2008;
d)his financial statement sworn 11 August 2008.
The wife relies, subject to all proper claims as to admissibility, on:
a)her affidavit sworn 16 August 2007;
b)her financial statement sworn 16 August 2007;
c)her affidavit sworn 5 August 2008;
d)the affidavit of [Z] sworn 16 November 2007;
e)the affidavit of Dr P sworn 16 January 2009.
The following documents were tendered as Exhibits:
i)Judgement of Ellis J from the Family Court of Australia on 20 February 2007, being Exhibit 1.
ii)Husband’s income tax return for year ended 30 June 2006, being Exhibit 2 (together with a schedule not forming part of the exhibit but received as an aide-memoire).
iii)Copy letter from the wife to the husband dated 27 July 2005, being Exhibit 3.
iv)ING Savings Maximiser Statement Account [1] Statement number 14 (1/1/07 to 31/3/07), being Exhibit 4.
v)ING Savings Maximiser Statement Account [1] Statement number 10 (1/1/06 to 31/3/06), being Exhibit 5.
vi)[Z]’s SGE Account number [6] from 30 June 2006 to 15 April 2008 (including statements 30/4/08, 31/7/08, 30/9/08 and 31/10/08) and from 1 November 2008 to 22 January 2009, being Exhibit 6.
vii)[Z]’s ING Direct Savings Maximiser Account no. [1], Statements 17, 18,19 and 21, being Exhibit 7.
viii)The wife’s SGE transaction statement on account [2] from 31/8/07 to 22/1/09, being Exhibit 8.
ix)Tax invoice N & M dated 16 December 2008, being Exhibit A.
x)Mr Campbell Superannuation Fund income tax return 2007, being Exhibit B.
xi)Mr Campbell individual tax return, being Exhibit C.
xii)Bundle of National Australia Bank Visa One Statements of the wife, being Exhibit D.
Background facts
The husband was born in 1944 and is currently 64 years of age.
The wife was born in 1945 and is currently 64 years of age.
The parties were married in 1979, separated on 17 May 1993, and were divorced on 14 July 1995.
There were three children of the marriage, being [X] born in 1973 ("[X]"), [Y] born in 1980 ("[Y]") and [Z] born in 1982 ("[Z]"). The husband is the biological father of [Y] and [Z]. The children are now all adults.
In 1986, the wife was diagnosed with a malignant lymphoma, which has been in remission since that date (although there was a recurrence in about 1991). The wife described her occupation as “domestic duties”.
In 1995, the husband married his current spouse, Ms W.
On 20 February 1997, Justice Ellis made the subject order for spousal maintenance in favour of the respondent wife.
The husband asserted that he had separated from his current spouse in March 2004 but, at this point in time, had not obtained a divorce. He, however, continues to pay her HCF as part of his medical insurance package.
The husband practices as a [medical specialist] engaged through [workplaces omitted]. He further provides services in [clinic omitted]. He says that his practice as an [medical specialist] accounts for about 80 per cent of his income and his work in the clinic for the remaining 20 per cent. The husband’s company, Mr Campbell Pty Ltd, derives all of his income. He is the sole director and share-holder of that company. There is also the Mr Campbell Superannuation Fund that accumulates his superannuation.
In about 2005, the wife won $125,000.00 on a television quiz program known as "[omitted]".
On 6 December 2005, the wife's father, Mr C, died.
On 24 July 2006, the wife's mother, Ms C, died.
The wife's parents were the registered proprietors of the property being more fully described in certificate of title folio identifier [5] and known as Property C, New South Wales ("the Property C property"). Notwithstanding that the Property C property was registered in the wife's parents' names as joint tenants, it would appear that no notice of death had been registered as at the date of hearing and the title of the property is still subject to a registered mortgage, now to MLC Building Society. No transmission application has been lodged, as no probate application has been made with respect to the will of the wife’s mother.
While a mortgage is shown as registered on the title for the Property C property, it would appear that the husband has complied with other orders of the Family Court of Australia made in 1997 and had repaid all moneys owing under it in about 2004. The costs of obtaining a discharge of that mortgage would appear to be the costs of preparing the discharge form, being in the order of some $100.00 together with any registration of discharge fees to the Land and Property Information (“LPI”).
The wife, as the only child of Mr C and Ms C, acknowledged that she was and is the sole beneficiary of her parents’ respective estates and would otherwise be entitled to be registered on the title to the Property C property as its registered proprietor.
The children, [Z] and [X], currently reside at the Property C property with the wife.
Property C has an agreed value of $950,000.00.
The husband resides in rented premises in Property H, Sydney.
The wife is in receipt of a disability pension of some $265.45 per week.
The husband has superannuation of $324,754.00;
The wife has superannuation of $89,833.00.
At the commencement of the hearing on 23 November 2007,
Mr Johnston of Counsel appeared for the wife and Mr Moss of Counsel appeared for the husband.
Two issues arose at the commencement of the hearing. One issue related to an objection taken by Ms W, the current wife of the applicant, to have documents produced by her in answer to a subpoena issued on 14 November 2007 and made returnable on 22 November 2007. The objection taken to the subpoena was that it was seeking documents which were irrelevant and/or the terms of the subpoena were so broad as to be oppressive and a fishing exercise.
On 22 November 2007, the legal representatives for Ms W and the wife who had issued the subpoena, limited its terms to paragraphs 1, 6, 12 (limited to documents with respect to travel with the applicant) and 13 and the subpoena was then stood over to 23 November 2007.
On 23 November 2007, Ms W produced documents in answer to the subpoena, so limited, but argued that access should not be given to the respondent as the documents were irrelevant. Mr Moss of Counsel argued that as Ms W was no longer cohabitating with the husband, her documents could not be relevant under s.75(2)(m) of the Family Law Act (“the Act”).
Mr Johnston, by agreement with Mr Moss, inspected the documents to determine whether he would pursue an argument that general access should be ordered. After Mr Johnston had inspected those documents, he submitted that they were in fact relevant and sought general access. On that issue, he tendered documents produced by the husband on a call made under a Notice to Produce dated 16 November 2007. The documents so tendered became Exhibit 1 on the application and consisted of a copy of the Applicant’s passport and various travel itinerary documents. On the basis that the cessation of cohabitation between the husband and his current wife was a disputed fact in issue, the Court granted access to the documents produced under subpoena. Oral reasons for that decision were given at that time.
The second issue concerned the applicant’s alleged failure to produce all of his documents in response to the Notice to Produce dated
16 November 2007. On that basis, the husband went into the witness box and gave some short evidence. As a result, certain identified documents falling within that Notice to Produce were agreed to be produced by the husband with access granted to the respondent wife.
During the course of identifying the parties affidavits, the following concessions were made:
a)The value of the Property C property was agreed at $950,000.00.
b)It was not an issue before the Court that the wife could not obtain remunerative employment “outside the home”.
c)That the adult child, [Z], lives with the wife in her house and the adult child, [X], lives in a self contained apartment within the wife’s house.
The matter was then adjourned to 13 and 14 August 2008 for resumed hearing.
On the resumed hearing, Mr Hodgson of Counsel then appeared for the husband and Mr Johnston continued to appear for the respondent wife.
On 13 August 2008, the husband was recalled and Mr Johnston cross‑examined him. At page 57 of the transcript of that day, Mr Johnston indicated to the Court that he had exhausted the examination of the husband, but for the production of certain financial documents. Mr Hodgson indicated that certain financial documents were provided by those instructing him. Notwithstanding that, a further notice to produce appears to have been served by the wife on or about 19 January 2009.
The proceedings were then adjourned part heard and the matter again came before the Court for resumed hearing on 27 and 28 January 2009. On those last two dates, the respondent wife was self‑represented. The respondent wife having filed a notice of address for service on
19 January 2009. The Court did not receive a notice of ceasing to act from the solicitors retained for the wife, being Gells Lawyers.
On 27 January 2009, Mr Hodgson confirmed that further copies of the documents and some later financial documents were then provided in answer to the notice to produce served on the husband. The Court then allowed the wife to further cross‑examine the husband in relation to the financial documents so produced.
On 28 January 2009, the parties evidence closed and the matter was adjourned to 1 April 2009 for oral submissions. On that last date,
Mr Hodgson of Counsel appeared again for the applicant husband and the respondent wife was again self-represented.
Concessions
During the course of the hearing, the husband conceded that he could pay the sum of $450.00 per month spousal maintenance but not that he could afford to pay any more than that. The husband stated that he could not afford to pay $615.00 per week, being the sum put to him by Mr Johnston of Counsel as the varied amount of spousal maintenance which would be sought by the wife, taking into account Consumer Price Index (“CPI”) increases.
The parties conceded there is a document which requires the husband’s signature in order to obtain a discharge of the mortgage currently registered on the title to the Property C property.
The parties conceded that [Z] and the wife both unsuccessfully attended as co-contestants on the “[omitted]” quiz show, held on mother’s day, prior to the wife being successful in her own right at a subsequent attendance at that quiz show.
During the course of submissions, the wife conceded that monies received by her from her parent’s estates had gone “in a chaotic way between accounts”.
Disputed facts
There were a number of disputed matters. These include:
a)Whether the husband's expenditure on a monthly basis exceeded his income;
b)Having regard to the assets now available to the respondent and moneys received by her and her outgoings, whether she was in a position to otherwise support herself.
c)The extent of the wife's health issues.
d)The extent of the wife's support for the two adult children, [Z] and [X].
e)Whether the husband is cohabiting with his current spouse and the financial circumstances relating to that cohabitation.
Evidence
The husband currently resides at rented premises at Property H.
The husband’s wife, Ms W, is the registered proprietor of a property at Property B ("the Property B property"). The husband says that as part of a property settlement between her and her former husband, she retained the Property B property but she was required to pay out a sum of money which was subsequently secured by way of a mortgage on that property. That sum of money, in about August 2002, was in the order of $340,000.00 and was borrowed from Westpac Banking Corporation. The husband says that he contributes the sum of $1,400.00 per month, representing one half of the mortgage repayments, and he has continued to contribute that sum, notwithstanding his separation from her.
The husband says that he separated from his current wife in March 2004. His evidence was that they live in separate residences and neither has a key to the other’s residence. His current wife is financially self supporting and he makes no contribution to her daily living expenses (save HCF and the payment of $350.00 per week towards her mortgage), or personal outgoings and similarly, she makes no contribution to his. While he acknowledges that they still go to dinner together and travel overseas, it would appear his current wife meets the cost of her own airfare and travel. The husband asserted that the ASIC records were incorrect to the extent that they showed the registered office of his company as being the Property B property and that he had taken steps to correct that. The husband was cross-examined as to whether he was still in fact co-habiting with his current wife. No evidence was called from his current wife. Notwithstanding this, the Court accepts that for the purposes of this application, the husband is not in fact relevantly cohabitating with his current wife, to the effect that his current wife’s financial circumstances should not be examined either in support or opposition of the husband’s asserted position.
Further, the husband says pursuant to an oral agreement (not documented in any form) entered into between himself and his current wife, she holds the Property B property on trust for him as to a one‑twelfth interest (or 8 per cent) in return for which the husband contributes the sum of $350.00 per week towards the mortgage secured on its title.
The husband's evidence is that his income has remained relatively steady since the date of the subject order. Nevertheless, it would appear that it has remained at that level by way of an adjustment made by the husband's accountants on an annual basis to provide for a payment to his superannuation fund.
The child, [Z], is now some 24 years of age and has graduated with an [omitted] degree and completing his Master of [omitted] degree at the end of 2006. [Z] appears to have received some income as the nominated carer for the wife's parents together with some fees paid by [omitted] University where he has tutored part-time. [Z] wishes to attend [overseas University omitted] to study a PhD.
[X] is also an adult but resides in a “self-contained” area of the Property C property, which was previously occupied by the wife's parents. [X] is not presently in employment.
Neither [X] nor [Z] appear to pay any rent to the wife.
The wife's evidence is that she supports the adult children, [X] and [Z], 100 per cent.
The husband says that his current weekly outgoings total some $480.00 made up of $200.00 for food, $7.00 for gas, $15.00 electricity, $15.00 for telephone, $22.00 for petrol and maintenance of a motor vehicle, $35.00 for clothing and shoes, $25 for medical, dental and optical, $40.00 for entertainment and hobbies, $50.00 for holidays, $25.00 for chemist/pharmaceutical, $3.00 for dry cleaning, $10.00 for books and magazines, $25.00 for gifts and $8.00 for hairdressing and toiletries. These, together with his income tax of $1,085.00, his mortgage payments on behalf of his current wife of $350.00 per week and his rent of $365.00 per week, his health insurance of $84.00 per week, motor vehicle registration of $3.00 per week and car lease of $64.00 per week, together with minimum credit card payments of $180.00 per week and the spousal maintenance payment of $450.00 per week totals in all an expenditure of $3,061.00 per week. He says that his total average weekly income is $2,506.00 per week, being $6.00 dividend and $2,500.00 income from his medical practice.
The husband's 30 June 2007 income tax return shows that he is receiving some $228,508.00 per annum, or $4,394.38 per week. The husband conceded his weekly income was in fact in the order of $4,429.00. The difference between this figure and the $2,506.00 referred to above, is in the order of some $1,9230.00. A sum of this magnitude appears to have been paid to the Trustee of the husband’s superannuation fund, the Mr Campbell Superannuation Fund. In other words, the husband has salary sacrificed to build up his superannuation. The husband, at one point, contributing $250.00 per week towards his superannuation, that figure being reduced to nil in his later financial statement.
The husband's evidence concerning his health is that he suffers from a condition which affects his left hip, for which he takes painkillers and gives rise to some pain, which is exacerbated by walking and/or lifting.
The wife’s weekly income consisted of her spousal maintenance payment from the husband of $450.00 per week together with a disability pension of $237.00 per week and some interest. The wife asserted that some $613.00 of her weekly expenditure of $1,194.00 related to [Z] and of this sum $192.00 appeared to be in relation to HECS fees for a HECS debt in [Z]’s name which has never been paid. The wife accepted that if one reduced the $613.00 by the $192.00, some $421.00 of her asserted weekly expenditure related to [Z] and a further $100 related to [X]. [Z] confirmed that until recently the wife (his mother) supplied, apart from groceries, almost 100% of his regular support. This percentage he said reduced to approximately 50% in August 2008. The wife then conceded that the figure of $1,194.00 was in fact not correct and that it was more likely that her average weekly expenditure was in the order of $800.00 (plus “extra-ordinaries”) per week. While there was no specific evidence before the Court as to the wife’s claimed ADHD, it was obvious that she had great difficulties in completing the Financial Statement. Her evidence was in response to a question from Mr Hodgson
“…Attention Deficit Disorder, I can’t handle detail”
She went on to say
“when I was going to put this document in… you end up with a ridiculous result if you try to work out individual things and then add them up because you get too many rounding errors”
The wife in making her estimates had utilised a calculation of 52.17857143 weeks per year.
Accordingly, if one accepts the wife’s evidence that her expenditures were in the order of $800.00 per week plus extra-ordinaries, somewhere between $400.00 and $521.00 of that sum appeared to relate to expenditure paid on behalf of the two adult children. The Court cannot give any more precise a determination as to this, given the state of the wife’s evidence.
In August 2008, the wife had, in her own name, in various financial institutions the sum of approximately $30,500.00. How this sum came into existence was the subject of extensive cross-examination.
Shortly before the wife's mother's death and following the wife's father's death, it would appear that the wife had some discussions with the Department of Veterans Affairs. As a result of those discussions, the wife utilised a power of attorney given to her in order to transfer funds of approximately $110,000.00 belonging to the mother which were subsequently placed into an account in the name of her son, [Z]. Those funds, the wife says, were for the purposes of effecting repairs to the Property C property and were in some way entitled to be placed into the name of [Z], as it was agreed between [Z] and her that [Z] would provide the role of carer to the wife’s parents, that he had performed in that role and that it was important for the moneys to be protected and preserved in some form to enable the wife and her son to agree on an appropriate scheduling for the carrying out of works to the Property C property. It was put to the wife that the transfer of such funds to [Z] was to avoid their disclosure to the husband in these proceedings. The wife disputed this and indicated that the documents had all been produced to show where the funds had gone. The Court accepts the wife's explanation as to the reason to transfer the funds. Nevertheless, they are funds available to the wife, being the sole beneficiary of her parents' estates and should have been disclosed.
Further, the wife received moneys through her involvement in television quiz shows. She received some $125,000.00 from "[omitted]". The wife's evidence is that of that sum, a certain amount was paid to syndicate members who assisted her in obtaining those winnings. Her evidence was entirely unclear as to how much was, in fact, paid, as it appears to have been paid out in cash, and whilst her initial intention was to pay certain people, some of those persons did not wish to take the money that she had originally intended to provide them. It would appear that her evidence was that some $30,000.00 had been drawn out to provide to the syndicate. However, she only paid some $10,000.00, leaving a balance of $20,000.00. It would then appear that the $20,000.00 had been placed into another account or had been set aside for the purposes of the wife travelling to [overseas] to visit [Z] when he took up his PhD studies. There was a further sum of $8,000.00 received by the wife which the wife referred to as being a reimbursement from the nursing home for overpaid fees for her mother. The wife's evidence was that she did not know what had happened to this refund cheque, as it may have fallen behind the refrigerator.
The wife has been assisted in her preparation of her case by her son, [Z], who it would seem also suffers from ADHD.
The wife's evidence is that she is unable to multitask and that for her it was important for these proceedings to be completed before she and [Z] could consider the issue of reconciling the accounts, income and expenses of her parents for the purposes of proving the will of her mother. Because of this, she has done nothing to effect a transfer of the Property C property into her sole name. Further, she has not given regard to any tax or accounting advice as to whether that is, in fact, for her, the appropriate way forward. Her evidence was, to some extent, confused in this area, as she indicated that she may not want the Property C property but that, rather, it should go to the children, her view being that, in any event, she would continue to live at the Property C property with the children. The wife's evidence was that her parents had another will which it would appear had been drafted leaving the Property C property to the children but that as a result of the wife's concerns about their ability to deal with coming into property, her mother prepared the current will which provided for her to be the sole beneficiary.
[Z] filed an affidavit and gave oral evidence. He refers to some $20,000.00 (being 2 instalments of $10,000.00 each) in an account of his which was paid by his grandfather (the wife's father) on account of [X]'s teeth, as part of directions so as to observe Department of Veteran’s Affairs rules limiting the amount of annual gifts. These funds also appear available to the wife, as [X] appeared to no longer require the dental work initially considered appropriate. [Z]' evidence was also that a further sum totalling about $70,000.00 had been paid into his account for repairs to the Property C property which was also available to the wife at her direction.
The subject order
The subject order made by Justice Ellis on 20 February 1997 followed His Honour’s very detailed consideration of the wife’s claim for spousal maintenance.
His Honour had first dealt with the property dispute between the parties on the basis that it was his view that their liabilities exceeded their assets. Accordingly, the only property orders that were made were consent orders that the parties transfer between themselves the shares in the two companies Mr Campbell & Ms Campbell Pty Ltd and [Z] Pty Ltd so that the wife or her nominee received the husband’s one share in those two companies. The husband had joined the wife’s parents seeking an order as against the Property C property. Those proceedings were resolved by consent orders which saw the husband assume the responsibility for the obligations of the wife and her parents under a mortgage and for the husband to reduce the capital amount outstanding under that mortgage, in addition to meeting interest payments, over designated periods of time until all the outstanding capital had been repaid. A further order was made that upon the husband’s request to the wife’s parents, the wife’s parents would join in in obtaining a discharge of any current mortgage on the Property C property and to enter into a new mortgage with similar conditions for the husband to repay capital and to meet interest.
There were further consequential orders for the husband to effect life insurance to secure his obligations and to pay costs. His Honour stated that it was clear “particularly following the consent orders made on the first day of the hearing” that the husband had no interest in the Property C property which was owned by the wife’s parents. Similarly, by implication, the wife, at that point in time, had no interest in that property.
His Honour after setting out the relevant sections of the Act concluded as follows:
“The wife, in these proceedings, by way of personal exertion, consequent upon work done by her in the home, receives on average about $37.00 per week and she says, an insignificant sum for interest estimated by her at $1.00 per week, giving her a total income of $38.00 per week. In addition, of course, she receives social security payments being in the sum of $187.00 per week, spousal maintenance, pursuant to an interim order made by consent on 31 May 1996, in the sum of $250.00 per week and child support of $422 per week. In addition, she receives some royalties for a book estimated by her at $1.00 per week.
The Act provides of course that, in exercising jurisdiction under s.74, the Court shall disregard any entitlement of a party whose maintenance is under consideration to an income tested pension, allowance or benefit. Accordingly, in these proceedings, I disregard the benefits of $187.00 per week, to which I have referred, received by the wife. At pages 5 and following of her Financial Statement, the wife has set out her expenses and, in addition, she has set out those expenses in Exhibit “A”. She has been cross-examined in relation to her expenses and I shall return to that aspect of the matter shortly.
The husband is an [medical specialist] who is employed by a company controlled by him, Mr Campbell Pty Ltd. The evidence before me discloses that he has an income of $192,000 gross,
80 percent of which is received from Mr Campbell Pty Ltd and the balance from moneys paid directly to him by public hospitals.He sets out in his Financial Statement, to which I have referred, his expenses. He was cross-examined on them. In addition, he discloses, in that document, that his present wife is in employment, earning an estimated $962.00 gross per week. As I mentioned earlier, his two step-children aged 16 and 13 reside with him. There is no evidence in relation to their support and his present wife has not given evidence in these proceedings. The only inference I draw from the whole of the evidence is that the husband does not contribute to the support of his step-children and that they are wholly supported either by his present wife or by the father of the two children.
I am not satisfied, having regard to the material before me, that I can place reliance upon the evidence of either the husband or of the wife in relation to their expenses.
The husband, for example, conceded that some of his expenses were exaggerated and some of the expenses which, on the face of it, he claimed related only to himself, were in fact expenses which related to other people as well as himself. I am further of the view that some of the expenses claimed by the wife are exaggerated and are not proper, for example, the $70 per week for petrol claimed by her. However, in the circumstances of this case, it is not necessary, in my view, for me to seek to make a detailed analysis of the expenses of the parties, even if that were possible, given the state of the evidence. However, the husband meets the claim of the wife for spousal maintenance by first saying that she has not satisfied the s.72 test. That is, he says, she is able to support herself adequately. He points to the fact that she has two university degrees, as set out in the evidence, that she is a qualified medical practitioner and that she has in fact practised as a medical practitioner. However, she ceased so practising in 1979 and has not practised as such from then to the present time.
She points to the fact that during the period of the marriage, she performed secretarial duties for the companies and he points to the other efforts that she has made to obtain employment. In a consideration, however, of the wife’s capacity for gainful employment, it is unfortunately necessary to consider the impact upon her of her medical history. In 1986, it was discovered that she was suffering from lymphoma. That condition was successfully treated, if successfully is the correct word, with chemotherapy and radiation. She suffered a relapse in May 1991 but responded to what has been described as aggressive therapy. She is not currently on medication, except hormone replacement therapy. The whole of the evidence indicates that the malignancy from which she suffered can reoccur at any time. Her prognosis, on the medical evidence, which I accept, is unpredictable and uncertain.
She has had one episode of depression in the past and on the evidence, which I accept, is vulnerable to further depression, particularly if she were to experience significant stress, either physical or psychological.
Dr P, whose evidence I accept and whose evidence I prefer to that of Dr H where the evidence of the two conflicts, strongly recommends that the wife should make no attempt to return to either medical or engineering practice and he doubted that, for the reasons which he gave, she should attempt to take on any retraining with a view to beginning a further career. He was of the opinion that the maintenance of a low stress environment may be of particular importance for her. He described an attempted return to a profession which she last practised in 1979 as unwise and a potentially dangerous decision.
Both doctors, to whom I have referred, accept that the wife believes that she will be subjected to stress if she works outside the home and that there would be a high risk of recurrence of the life-threatening illness. The role of stress has been affirmed to her by her treating doctors. In relation to the role of stress, insofar as it affects the wife, the two doctors disagree, but as I have indicated, in that regard, I prefer and accept the more cautious approach urged upon me by
Dr P. Given the wife’s belief and the support for that belief given to her by her treating doctors, in my view, work outside the home would clearly have an adverse affect upon the state of her well-being and her health. In addition, it is appropriate, in the consideration of this threshold question, that I take into account her age and the period which she has not worked outside the home, having regard to the other commitments which she has undertaken since 1979.She has indeed, according to her and I accept her evidence in this regard, made attempts to obtain work within the home. To a degree, she has been successful, but nowhere near as successful as she would hope and want. Further, she has the care and control of two children under the age of 18 years. She has a real fear, and I accept that her fear is a genuine fear, that if she is subjected to stress, her life expectancy will be dramatically shortened and thus she has a fear of not being able to raise the two children in her custody to adulthood. When I weigh all those considerations, I conclude that she is indeed unable to support herself adequately within the meaning of s.72. I accept that she is seeking work within the home and that, in the future, she may be successful in those endeavours. The fact of the matter is that she has not been successful in so doing to date and, in the whole of the circumstances of this case, as I say, I am satisfied that notwithstanding that she has not sought work outside the home, she is unable to support herself adequately within the meaning of the section.
I must now determine what is the appropriate level of support on the evidence and whether the husband can contribute and, if so, what, to that level of support. I have already indicated that I cannot accept at face value the evidence of either the husband or the wife in relation to their expenses but, in my view, taking an overall approach to the expenses to which the wife has referred, I am satisfied that she reasonably requires a sum of not less than $500 per week to adequately support herself. The husband, as I say, has an assessable income of $192,000. The income tax payable on that figure is $80,842 per annum and the Medicare levy is $2880 per annum. He thus has a net income of $108,264 per annum or $2082 net per week. In addition, of course, he receives the benefits which are referred to on page 4 of his Financial Statement which total $858 per week or $44,616 per annum. The most significant of those benefits, for the purposes of these proceedings, is the Mazda motor vehicle to which I have already referred.
The husband pays child support for the two children of the marriage in the sum of $22,030 per annum and, in addition, pays private school fees for the two children in the sum of approximately $20,000 per annum. I have already referred, I think, to the notation in relation to the payment of those fees and I further note that, in evidence, the husband indicated that, it is his intention to continue to pay private school fees for both children. The order that I propose making is made on the basis that he will continue to make those payments although, of course, I cannot make an order directly relating to the maintenance of the two children. I have already referred to the obligations that, at least in the next two years, the husband will assume under the orders made on 19 February 1997. If I add those figures to the child support and school fees paid per annum by the husband, I arrive at a figure of $67,210. If I subtract that from the net annual salary of $108,264, I am left with a figure of $41,054.
Now, it is true that the husband has other liabilities which he must meet, for example, but not limited to, outstanding income tax. They are matters that I have already referred to in his Statement of Financial Circumstances. However a person in the position of the husband just cannot come to this Court and say “I have lived my life on a certain basis over a period of time and I am therefore not in a position to make any contribution to the maintenance of a former spouse.” In addition, of course, to that $41,054, the husband has the benefits which he receives from his company to which I have already referred. Neither party, in my view, will really, in the immediate future, have expenses in relation to accommodation. The husband really has the $41,054 available to support himself and meet his liabilities other than those included in the $67,210 to which I have referred.
In the whole of the circumstances, in my view, it is proper that he contribute to the maintenance and support of the wife in the sum of $450 per week. That will give her from the $41,054 the sum of $23,400 per annum and it will leave him with $17,654 per annum or $340 per week. In addition to this sum, he will, of course, have the benefits to which I have already referred. The parties agree that it is appropriate, in the circumstances, for the husband to transfer to the wife his one share in the companies Mr Campbell and Ms Campbell Pty Limited and [Z] Pty Limited, that the husband retire as a director of each of those companies and that he take certain steps to meet one-half of certain payments and ensure that annual returns and the like are filed. It is agreed that the wife should give an indemnity to him and he give an undertaking in relation to the amounts standing to his credit in the books of account of each of the two companies.”
The Court has quoted extensively from Justice Ellis’ decision as it is relevant to the wife’s current circumstances. The Court has before it an affidavit from Dr P who has provided to the wife an updated report dated 1 July 2008. Whilst that report traverses a number of matters outside the doctor’s expertise and, to some extent, reiterates what the wife has otherwise informed him, the Doctor comments on the wife’s medical condition as follows:
“Most significantly you suffer from a B-Cell lymphoma, currently in remission, but you remain at risk for a recurrence of the cancer. You were diagnosed with hypertension during 2004 and you have brought that problem under control with lifestyle changes rather than medication. You have deteriorating vision. You have a congenital spinal stenosis, with a diagnosis of central disc prolapse at L4/5and with associated narrowing of the exit foraminae. This leads to back pain at most times. You experience pain in your first left metatarsal bone which you believe might be arthritic in type. Additionally, you have been diagnosed with adult attention deficit hyperactivity disorder (ADHD) and you are medicated for the disorder with Dexamphetamine. You fear again becoming depressed if you are placed in a situation of severe psychological distress, particularly if you lose the family home.”
Dr P provides the following opinion:
“Whilst it is good to note that your lymphoma appears to be in remission, you are well aware that you remain at risk for an exacerbation of the disorder. In that situation, your life may be placed at risk.
Unfortunately, you have declining physical health and you suffer from hypertension and possible arthritis. You have also been diagnosed with ADHD. You face a number of ongoing stresses, the most significant being that spousal maintenance might stop (with subsequent major changes to your lifestyle) and additionally, you have a difficult relationship with your first son (who continues to live at home).
I do not think there is any prospect that you could return to the practice of medicine due to your age, your deteriorating physical health and the vast attrition of knowledge that you will have experienced. There is no other obvious career that you might undertake.
…the withdrawal of spousal maintenance would put you at greater risk for health problems, (physical, psychological) and you might face an increased risk of a recurrence of your cancer, on the basis of your altered psychological status and the possible effect that this might have on immunity generally and your resilience to the neoplastic process.
I support your argument on medical/psychiatric grounds that you should not be denied spousal maintenance.”
Dr P was cross‑examined. He conceded that he had not formally
re-examined the wife. Whilst the Doctor acknowledged that there was no possibility of the wife returning to her former professional career as a [healthcare professional], he could not recall being advised by the wife of her winning moneys as a quiz show contestant. Notwithstanding that, the Doctor does refer to the affidavit sworn by the husband on 23 February 2007 as having been supplied to him, and that affidavit refers to that matter. The Doctor's evidence was that if he had been told of that, he potentially would have said to the wife that that was a stressor which she could probably do without, bearing in mind she suffers from B cell lymphoma currently in remission. The Doctor's evidence was that stress had the effect of potentially lowering immune responses and that, in turn, may place the wife at risk. The Doctor also opined that the wife faced ongoing stressors, the most significant being the threat that spousal maintenance might stop, which brought with it subsequent major changes to her lifestyle and additionally the difficult relationship with her first son, [X] could also contribute to this.
The Doctor conceded that the word "would” should be "could" in the second‑last paragraph, although he was comfortable with the word "might". Accordingly, his opinion was expressed as follows:
... the withdrawal of spousal maintenance [could] put you at a greater risk for health problems (physical, psychological) and you might face an increased risk for recurrence of your cancer on the basis of your altered psychological status and the possible effect that this might have on immunity generally and your resilience to the neoplastic process.
The Court is of the view, notwithstanding the wife’s fortunate position in, as she submitted, “miraculously [surviving] for 20 years beyond when… told the prognosis was poor”, that in light of Dr P’s evidence, little has changed in the wife’s future prognosis to that accepted by Justice Ellis as “being somewhat unpredictable and uncertain” at the time of making the subject order.
The law
The applicant submits that the basis of his application is made under s.83 of the Act which relevantly states:-
s.83 Modification of spousal maintenance orders
(1)If there is in force an order (whether made before or after the commencement of this Act) with respect to the maintenance of a party to a marriage:
(a) made by the court; or
(b)made by another court and registered in the first‑mentioned court in accordance with the applicable Rules of Court;
the court may, subject to section 111AA:
(c)discharge the order if there is any just cause for so doing;
(d)suspend its operation wholly or in part and either until further order or until a fixed time or the happening of some future event;
(e)revive wholly or in part an order suspended under paragraph (d); or
(f)subject to subsection (2), vary the order so as to increase or decrease any amount ordered to be paid or in any other manner.
(1A)The court's jurisdiction under subsection (1) may be exercised:
(a)in any case--in proceedings with respect to the maintenance of a party to the marriage;
(b)if there is a bankrupt party to the marriage--on the application of the bankruptcy trustee; or
(c)if a party to the marriage is a debtor subject to a personal insolvency agreement--on the application of the trustee of the agreement.
(2)The court shall not make an order increasing or decreasing an amount ordered to be paid by an order unless it is satisfied:
(a) that, since the order was made or last varied:
(i) the circumstances of a person for whose benefit the order was made have so changed (including the person entering into a stable and continuing de facto relationship);
(ii) the circumstances of the person liable to make payments under the order have so changed; or
(iii) in the case of an order that operates in favour of, or is binding on, a legal personal representative--the circumstances of the estate are such;
as to justify its so doing;
(b)that, since the order was made, or last varied, the cost of living has changed to such an extent as to justify its so doing;
(ba) in a case where the order was made by consent--that the amount ordered to be paid is not proper or adequate;
(c)that material facts were withheld from the court that made the order or from a court that varied the order or material evidence previously given before such a court was false.
(3)Subsection (2) does not prevent the court from making an order varying an order made before the date of commencement of this Act if the first‑mentioned order is made for the purpose of giving effect to this Part.
(4)In satisfying itself for the purposes of paragraph (2)(b), the court shall have regard to any changes that have occurred in the Consumer Price Index published by the Australian Statistician.
(5)The court shall not, in considering the variation of an order, have regard to a change in the cost of living unless at least 12 months have elapsed since the order was made or was last varied having regard to a change in the cost of living.
(5A) In satisfying itself for the purposes of paragraph (2)(ba), the court shall have regard to any payments, and any transfer or settlement of property, previously made by a party to the marriage, or by the bankruptcy trustee of a party to the marriage, to:
(a) the other party; or
(b)any other person for the benefit of the other party.
(6)An order decreasing the amount of a periodic sum payable under an order or discharging an order may be expressed to be retrospective to such date as the court considers appropriate.
(6A) Where, as provided by subsection (6), an order decreasing the amount of a periodic sum payable under an order is expressed to be retrospective to a specified date, any moneys paid under the second‑mentioned order since the specified date, being moneys that would not have been required to be paid under the second‑mentioned order as varied by the first‑mentioned order, may be recovered in a court having jurisdiction under this Act.
(6B) Where, as provided by subsection (6), an order discharging an order is expressed to be retrospective to a specified date, any moneys paid under the second‑mentioned order since the specified date may be recovered in a court having jurisdiction under this Act.
(7)For the purposes of this section, the court shall have regard to the provisions of sections 72 and 75.
(8)The discharge of an order does not affect the recovery of arrears due under the order at the time as at which the discharge takes effect.
Threshold finding under section 72
Section 72 of the Act provides that 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 himself or herself adequately, whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in s. 75(2).
Goldstein J in Evans & Evans (1978) FLC 90-435 noted that:
Section 72, for all that it is a threshold provision in the maintenance Part must not be read alone and it must firstly be read in the light of sec. 74. Section 72 cannot restrict the Court's duty to make such order "as it thinks proper.
Further, Mullane J in N & N (1997) 92-782 stated that:
[T]the interpretation of the expression "unable to support herself or himself adequately" is subject to the words "having regard to any relevant matter referred to in subsection 75(2)"
Consideration of sections 74 and 75(2)
Section 74(1) of the Act provides that the court may make such order for spouse maintenance as it considers proper:
In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this part.
Section 75(1) of the Act provides that:
In exercising jurisdiction under section 74, the Court shall take into account only the matters referred to in section (2).
The matters to be so taken into account in accordance with s.75(2) of the Act are as follows:
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia,
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
(l) the need to protect a party who wishes to continue that party's role as a parent;
(m) if either party is cohabiting with another person, the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties; and
(q) the terms of any Part VIIAB financial agreement that is binding on a party to the marriage.
The test for taking into account a matter under s.75(2), is its relevance to a “just and equitable order”: Waters & Jurek (1995) FLC 92-635 (at pp.82,375-82,376). Consideration can be limited to the most relevant matters rather than all which have some relevance: Collins & Collins (1990) FLC 92-149.
The Full Court in Bevan & Bevan (1995) FLC 92-600held that an award of maintenance should not be at a subsistence level and should pay proper regard to the factors set out in s.75(2).
Section 74(3) of the Act provides that when a court exercises jurisdiction under s.74, the Court shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.
The husband in particular relies on s.83(2)(a)(i) in that he says that the wife’s circumstances have changed. Mr Hodgson submitted that although Justice Ellis had determined that the wife may be able to work within the home, she was not then in a position to support herself adequately at that time. The husband conceded that the wife could not now go out into the work force given her age and that fact that she had not worked as a [healthcare professional] since 1979 nor obtained employment. However, Mr Hodgson submitted that the wife had other means now available to her, whereby she could derive income which did not necessarily entail her physical endeavours and that these means were not available to her at the time of the subject order.
Mr Hodgson further submitted that there were five other changes in the wife’s circumstances which had occurred since the time of the subject order. These were:
a)First, notwithstanding that probate had not been granted the wife had received a significant inheritance being the unencumbered Property C property which had an agreed value of $950,000.00 (although while the wife asserted the property needed some $120,000.00 worth of repairs to be done to put it in a position to be rented, there was no admissible evidence relevant to this assertion) following the death of her parents. Again, this valuation figure arose as a result of the assessment of the property in its “unrepaired” state. No doubt, if repairs were expended, this may have a positive effect on any valuation. At the time of the subject order, Justice Ellis found that the wife had for many years lived in her parents home at no cost. The wife has continued to reside in the Property C property with or without the two children, [X] or [Z]. The wife’s evidence was that she had chosen not to seek to obtain a grant of probate. She acknowledged that if she had, she may have been in a better position to determine exactly what monies she had received from her mother’s estate, including the receipt of dividends from shares. The wife conceding that she had given priority to these proceedings over and above dealing with the probate issues for the reason she asserted that she has ADHD.
The wife asserted that because documentation had been in Court since 2007, she has not “been able to use them to… do probate because we haven’t got that information”. The Court does not accept that the wife who had legal representation up until shortly prior to 27 January 2009 could not have inspected and copied the documents at Court. The wife not having progressed the probate application notwithstanding her assertion in her affidavit in August 2007 that “as soon as the relevant documents are prepared by my solicitor and verified by me to be true and correct, I shall instruct my solicitor to lodge both a Notice of Death and the probate application and provide a copy to the husband’s solicitors”. The Court is of the view that the wife has deliberately not taken any steps in this regard as she saw to do so as only improving the husband’s prospects and negatively impacting on hers in these proceedings. The wife’s medical condition did not otherwise prevent her in the conduct of these proceedings and the Court is of the view that if she had taken appropriate steps at the time she swore she would, probate would have been granted and the Court and the wife would have a better idea as to what assets and monies were received or were to be receivable by her from the estates of her mother and father.
b)Secondly, the wife had received the sum of $110,000.00 from the wife’s mother. This sum appears to approximate the funds held in the wife’s name at the end of 2008/beginning of 2009 in various accounts being ING $4,500.00; St George $3,000.00; BankWest $1,000.00; SGE account $15,379.00; a further SGE account $2,600.00 totalling $26,479.00 together with monies in various accounts held by [Z] at that same time being BankWest $1,200.00; SGE account $11,000.00 and ING account $64,000.00 totalling $76,200.00. The primary source of these monies appear to have come from the wife’s mother. The Court accepts that this is the case referrable to the quantum of moneys in [Z]’s name given his evidence of the receipt of the carers pension and a small income from his part-time lecturing position at the University and the wife’s evidence of her operating a power of attorney granted by her mother to move monies from her mother’s control into accounts under her control and then subsequently into accounts controlled by [Z]. Although it would also appear that [Z] had received a further $20,000.00 from the wife’s father for payment for [X]’s teeth. The wife’s evidence being that the whole reason she effected such transfers, was that she did not have to deal with those monies when she was dealing “with all the other stuff that was confusing” her. The wife acknowledged that the monies were received on the basis that she felt a moral obligation to spend them on the house, notwithstanding that her evidence was that apart from some urgent works, including repairs to the roof, she had not carried out the repairs or renovations that she initially thought these monies should be expended on. Those monies, she believed, were to put the house in order so that the wife’s mother could return there to be cared for. [Z]’s evidence was to the effect that he had received the monies because the wife’s affairs were “complicated enough” and he was the wife’s mother’s carer and had been in receipt of a carer’s allowance. [Z] acknowledged that the monies were transferred on the basis of advices given so that these monies were not otherwise expended for nursing home care. He acknowledged that he was holding the monies and they were not his. The evidence was also to the effect that [Z] subsequently transferred monies in accordance with the wife’s directions. At one point, in 2007, [Z] had in the order of $175,000.00 in his accounts. [Z] agreeing that of this, some $20,000.00-30,000.00 was likely to be his savings and the balance of between $145,000.00-$155,000.00 were monies transferred to him by the wife. Some $152,000.00 of ING monies in [Z]’s name were transferred between 1 March 2007 and 19 March 2007, it would appear, as Mr Hodgson submitted on almost a daily basis by some 16 separate withdrawals of $9,500.00 each (see exhibit 4). These monies were placed into another account in [Z] name at SGE. [Z] was asked “Why?” His only answer was that it made the money “more accessible” for “house repairs and back operations”. He conceded that he had no direct recollection and that this answer was a “sort of rationalisation”. This account held some $130,000.00 as at September 2007 and only some $225.00 appears to have been expended from it on repairs. The fact that the SGE account had a cheque withdrawal facility did not appear to make the account more accessible and there appeared no explanation for this rapid removal and transfer of monies. The wife further submitted that instead of using monies for repairs (save those arising from the expenses caused as a result of a fallen tree and a burst hot water heater), she has expended monies on the costs of these proceedings. Further, it appeared that having large sums of money in [Z]’s name had the undesired effect of being considered his monies when he was applying for Ausstudy assistance. Mr Hodgson submitted that these monies were initially transferred by the wife to hide their existence from the husband. The Court notes that $10,000.00 is the relevant amount for transaction reporting purposes and the withdrawals were all under this sum. This was denied by the wife. Mr Hodgson submitted that if a subpoena had not been issued to [Z] to produce his accounts, the information concerning these monies would never have been disclosed and that the wife had in those circumstances failed to make appropriate disclosure. These monies were not disclosed in the wife’s filed financial statements. The wife’s ADHD has not assisted her. The Court accepts that she had to deal with her father being placed in a nursing home and his death and then her mother’s position and subsequent death on her mind. While these proceedings were commenced after those events, the wife was still struggling to deal with the financial issues surrounding her. The wife’s explanation was also that she was seeking to keep the factual matters before the Court as simple as she could, however, she submitted:
“But once they discovered it you think okay, it isn't my money, it isn't his money, but now that they've done it we've got to put the information in there. It's going to prolong the case and it should never have happened, but there you go, didn't have a choice.”
Whilst the Court accepts the wife’s explanation, the Court finds there was a failure to disclose.
c)Thirdly, the wife in 2005 won $125,000.00 through a television quiz show called “[omitted]”. Of these monies, the wife gave [Z] $62,500.00 (without any deduction). The wife then earmarked a further $30,000.00 in cash out of her share alone to provide as an “ex-gratia” payment to the so called “Ten Phone a friends”, consisting of three sites, who were to be paid $10,000.00 each. However, the evidence, although quite unclear and the wife conceding that the Court would have been misled by some of her evidence as she had no written records and payments were made in cash, was to the effect that she had earmarked $30,000.00 to the consortium, seems to be that she only paid some of these people, including; $3,000.00 to Mr G and his two children [names omitted] (being the wife’s goddaughters), who constituted one site, another site refused to accept any payment and $6,000.00-7,000.00 to Mr F for distribution to the members of the third site totalling approximately $10,000.00. She also paid for repairs to computers, trips to Adelaide and Melbourne and the purchase of expensive Greek classical reference books for her home library.
d)Fourthly, the wife received $1,000.00 in November 2005 from being a “Phone a friend” for Mr F who won $1,000,000.00 on the same quiz show.
e)Fifthly, the wife had been able to earn for a short period of time commencing in 2006 an income by providing questions and answers for quiz shows.
The husband conceded that it was not part of his case that the wife could continue to earn monies falling into the categories of c), d) and e) in paragraph 86 above, this is so, notwithstanding that she had also won $42,500.00 on “[show omitted 1]” in 1993 and $20,000.00 on “[show omitted 2]” in 2002.
Mr Hodgson submits that taking into account the matters referred to in paragraph 86, the wife had received in the form of real property and monies in the order of $1,100,000.00 and as such, these were assets and financial resources which the Court should have regard under s.75(2) and s.74 of the Act.
Mr Hodgson submitted that the issue before the Court came down to one of choice exercised by the wife. He submitted that the wife had made or seeks to make a number of choices which she is otherwise entitled to do. However, he submits that the husband should not have to pay for those choices. These choices he says run contrary to the wife’s assertion that she cannot adequately support herself. The wife’s choice was to provide [Z] with half of her winnings from the quiz show. The wife acknowledged that this was her choice as a mother to assist [Z] get on with his studies. Mr Hodgson argues that such a choice was the wife’s and she cannot be criticised for making that choice. However, that gift approximates 3 years of maintenance that the husband would otherwise be obligated to pay. Further, she chose to give monies away to the “phone a friends” without any obligation, save, she says, a moral one. As Mr Hodgson submits, there is nothing wrong with the wife being generous, but not at the husband’s expense. Similarly, Mr Hodgson submits that the wife’s continued support for the two adult children is a matter of her own choice. Neither of the adult children pay any rent or make any other financial contribution to the wife’s household. This is notwithstanding that [Z] was paying some $245.00 per week from about December 2007 for his “outpost” being his rented accommodation near the university and outside his “headquarters” in the home at the Property C property. Mr Hodgson further submitted that the wife had chosen not to do anything with the inherited property which could have improved her financial position, for example by selling it and moving to more modest accommodation and using the balance of sale monies for investment so as to derive an income. Further, she could rent the property out and rent less expensively elsewhere, thereby producing an income. Her choice not to do this, was again a matter that the husband should not be asked to pay for.
In reply to Mr Hodgson’s submissions, the wife submitted:
a)That the sum of $450.00 referred to in the subject order should be increased as Justice Ellis had found that she reasonably required the sum of no less than $500.00 per week to adequately support herself but reduced it given the husband’s obligations to repay the debt secured by the mortgage over the Property C property. That debt having been repaid, the wife submitted, the maintenance sum could therefore be increased given the husband also had no further obligations to pay child support or private school fees.
b)That the husband has in some way by his failure to obtain a discharge of the mortgage registered on the title of the Property C property and the title deeds to that property, “nobbled” his own application. The wife submitted that she had not inherited the Property C property as she had not done anything “to take or receive [that] property as heir”. Notwithstanding that, she conceded she was the person who stood to inherit it, “unless it is changed”. Her parents have both died, nothing else could change. The wife has, for the reasons proffered by her, taken no steps to have the probate granted, notwithstanding her obligation as Executor to prove the last Will and Testament of her mother. The Court does not accept the wife’s submission in this regard. The wife also submitted that she had told her parents not to pay anything to get the discharge of the mortgage because it was “his [the husband’s] job”. This is so, notwithstanding that the husband had paid all monies outstanding under the mortgage and had written a letter seeking, it would appear, to finalise the discharge.
c)That the husband is not in fact separated from his current wife. However, the Court cannot see the relevance of this submission given the husband’s concession as to capacity. Nevertheless, it was not further developed by the wife.
d)That the wife could not move out of the Property C property due to her two cattle dogs requiring a house with a yard. There is no evidence that the wife could not accommodate her dogs if she chose to move to another residence.
e)That the wife had taken on the moral responsibility for supporting the two of the three adult children. The wife asserting those children were suffering from ADHD but there being no medical evidence of that before the Court.
f)That the Court must consider the factors under s.75(2) of the Act and in particular the parties ages (the husband being 64 years and in good health and the wife being 64 years and with significant health issues.) That the husband was seeking to have the wife “live in penury” and to dictate how she should live her life. She says she has lived in the Property C property for 50 years and she intends to stay there and that a decision to move from that property would impact on her mental health which would potentially affect her cancer. The Court accepts the wife’s submission that spousal maintenance should not be looked at on a “subsistence basis” and should reflect as far as possible the more equal access to family income that occurred during the marriage, recognising the husband’s earning capacity and the wife’s contribution to that through her efforts concerning the family. There is an anticipation that both husband and wife should continue to live after separation at the level which they have previously enjoyed, provided such is reasonable in the circumstances.
In Brown v Brown (2007) 37 Fam LR 59, the Court said:
“Where the capacity of the husband is such that he is able to provide maintenance for the wife at a level which enables both of them to continue to enjoy a standard of living equivalent to that which they enjoyed for sometime prior to the separation or which enables the wife to enjoy a standard of living which may be higher than the average in the community, it may be proper to make an order which broadly achieves that result”
g)The wife says that she has no capacity to earn an income. The Court has had regard to her success in the quiz show and the monies that she has earned by being a phone a friend and by providing questions and answers for quiz shows and is of the view that these are unlikely to be repeated in the future. They appear more in the nature of one off receipts which to a large extent were occasioned by the luck of the wife in proceeding through the selection criteria to become a contestant than her undoubted skill in achieving the winnings that she did achieve. Accordingly, the Court accepts the wife’s submission that she does not have an ongoing earning capacity save for perhaps nominal amounts.
h)The wife submitted that the husband had failed to make full and frank disclosure of his financial circumstances. The wife asserted the husband’s income relied upon by Justice Ellis in 1997, was $192,000.00, compared to his current estimated income of $228,000.00-$230,000.00. Given the admissions made by the husband concerning both his income and salary sacrifice towards his superannuation and given his concession as to capacity referred to above, the Court finds that the husband is able to pay the maintenance sought by the wife, including any increases referrable to the increase in the consumer price index. The wife submits that this alleged failure is a matter that the Court can have regard under s.75(2)(o) of the Act. The Court is not satisfied that the husband has failed to make a full and frank disclosure of his financial circumstances, noting that some of his income estimates were made at a time somewhat advanced from when his actual tax returns were required to be lodged and as a medical practitioner, his somewhat, not unusual, reliance on his accountant. Nevertheless, when considering the importance of completing financial statements one should recall the famous sign on President Harry S Truman’s desk “the buck stops here”.
The Court must carry out a balancing exercise. The husband seeks the discharge of a spousal maintenance order which was made in 1997 after the conclusion of property proceedings. At that time, the parties had minimal property, the husband had a good source of income and the wife had the identified medical problems that she still faces today with an inability to earn an income.
Since the death of the wife’s father and mother the wife has inherited a property with an agreed value of $950,000.00, notwithstanding repair issues, including termite damage. She has also been fortunate in quiz winnings totalling $125,000.00 from [omitted] in 2005 and $20,000.00 on [show omitted 2] in 2002. The wife has also received at least some $155,000.00 (of which some $130,000.00 as at 16 August 2007, stood in [Z]’s accounts available to the wife at her direction) from monies belonging to her parents. In fairness to the wife, she acknowledged that if she had won the million dollars, she “probably wouldn’t be asking …for spousal maintenance”.
The Court is satisfied that there has been a substantial change in the financial circumstances of the wife pursuant to s.83(2)(a)(i) of the Act. The circumstances of the husband have not substantially changed, save that he has remarried, is now separated and is paying a proportion of his current wife’s mortgage commitments.
As part of that balancing exercise, the wife seeks that the spousal maintenance be maintained on the basis as she says “this case is the most important thing in my life and [Z]’ at the moment.” She saw the preservation of the home as being important for [Z] because it was “his home that’s at stake”. The wife stated that if she was denied spousal maintenance she will be denied the means of its upkeep. Both adult sons appear to pay nothing to the wife to reside at the home or to assist in its upkeep. To some extent, the spousal maintenance order appears to be a back door way of obtaining adult child maintenance from the husband given the position adopted by the wife.
The wife acknowledged that her relationship with [X] was at times difficult and he has been and is a big stressor in her life, something to be avoided, given the clear evidence of Dr P. The husband suggested that [X]’s self contained area in the home could be let out to achieve an income. The wife argued that this would involve her working as a “land lady” and there had been a concession that she did not have the capacity to work. This concession was to the effect that she did not have the capacity to obtain remunerative work outside the home. The Court is of the view that the wife has at least this capacity to earn some income “inside the home”. The wife gave evidence that she was going to write a book and that may produce an income. This appears to be a possibility rather than a probability and the Court for present purposes has not considered that prospect as a viable source of income for the wife. The wife’s evidence was that she may have to move into the bottom half of the house because of her health and subject to some works (putting up ramps), that may provide her with an opportunity to lease out the other part of the house. This may take some time.
It was submitted by the husband that the wife could also sell the Property C property, buy suitable other more modest accommodation and invest the difference. The wife answered such a suggestion with the assertion that she did not intend to do so, so that the husband can “have more money to put into his superannuation”. She, however, acknowledged she could sell it.
The transfer of monies from accounts under the wife’s control to [Z] and the gifting of monies to [Z] and the explanations for doing so do not impact well on the wife’s credit in these proceedings. Nor does her delay in arranging for a grant of probate and the proper and due administration of the estates of her parents. The Court has had regard to Dr P evidence and the effect of the wife’s medical conditions on this delay.
The monies transferred and gifted to [Z] and to others, total in excess of $225,000.00 or close to ten years worth of spousal maintenance. This is without regard to the capital asset in the home of some $950,000.00 which the Court accepts the wife would be solely entitled to. The wife acknowledged in January 2009 that she had some $25,000.00 in accounts in her own name, having sworn to bank balances totalling some $30,569.00 in August 2008. The Court accepts that the monies transferred to [Z] arising from the wife’s parent’s estates (including the $20,000.00 for [X]’s teeth, which cannot be now used for that purpose) are capable of being re-transferred to the wife at her direction. The wife acknowledged that she had control of these monies, as she stated:
I could have bought race horses and I didn’t and we are in a dreadful mess now. Taking – once this case is over [Z] and I are going to have to sit down and try and make sense of all of the bank accounts […].
The wife has access to superannuation with Zurich, of some $89,773.00. The wife owns a 1991 motor vehicle.
The wife also gave evidence of the receipt of some $8,000.00 of refund of nursing home fees, which had been provided by a cheque which had “fallen down behind a wardrobe [fridge] or something”, but she seemed optimistic that because it had not been cashed, it could be reissued and that would be “one of the lovely things … [she will] have to look forward to after this case is over”.
The Court notes the ages of the parties, both being 64 years of age. The wife is incapable of gainful employment in the sense of obtaining paid employment outside the home. The husband continues as a specialist medical practitioner to earn an income in the order of some $229,000.00 per annum. Neither party has the care or control of a child of the marriage who has not attained the age of 18 years.
The commitments of the wife are such that the Court considers her access to the capital available to her in the form of real estate and monies would enable these to be met. The wife’s continuing support for [Z] and [X] considering their ages is not a responsibility which the Court would afford any weight to under s.75(2)(e). The Court has not had regard to the wife’s disability pension but has considered her modest superannuation. The Court has considered the fact that the parties divorced some thirteen and a half years ago and the subject order for spousal maintenance has been operative for in excess of twelve years and the wife’s standard of living, more likely than not, would not be adversely affected if she were to now have recourse to the capital available to her to obtain other suitable accommodation at a cost which would enable her to invest funds and to receive an income. Alternatively, leasing of the Property C property could otherwise produce an income for the wife which would enable her standard of living to be maintained. Subsections (h), (ha), (l), (n), (naa), (na), (p) and (q) of s.75(2) are not otherwise relevant.
The wife’s failure to put before the Court the full financial circumstances of her parent’s estates and how those impacted on her position as the sole beneficiary is a matter which the Court has given some weight to under s.75(2)(o). The Court has also had regard to the length of the marriage and the wife’s undoubted contribution to the family household and consequently the husband’s income earning capacity during and following their marriage, noting however that the parties separated in 1993 and the marriage ended in 1995 and at the time of the hearing before Justice Ellis the parties had very limited assets available for distribution between them.
In the above circumstances the Court is of the view that the spousal maintenance order should be discharged.
The Court is mindful of the wife’s medical condition and stress issues which may affect that condition, and is of the view that the wife will require some 6 months in order to obtain the relevant grant of probate so that she is placed in the legal position to be able to effectively deal with the Property C property, either by way of sale or leasing. The Court will provide a further 3 months after the date by which a grant of probate could be obtained, to allow the wife the time to “put her house in order” so as to be in a position to generate an appropriate income from the capital available to her. The Court will also order the husband pay within 28 days any monies up to $250.00, calculated as the costs of preparing a discharge of mortgage ($110.00) (inclusive of GST) and the registration fees for the discharge ($92.00) and sign all documents reasonably required to enable the discharge of the mortgage currently registered on the Property C property to be registered and the title deed made available to the Executor of the estate of the late Ms C or to the wife on behalf of the Executor pending a grant of probate of the wife’s late mother’s will.
Accordingly, the Court is of the view that the spousal maintenance order made on 20 February 1997 should be vacated as and from 1 March 2010.
Costs
Any order for costs must also be determined in light of the substantive judgment and the relative success or failure of the parties. This is naturally something that can only be addressed after judgment is delivered. The Court notes that on 13 August 2008, it reserved the husband’s costs with respect to its admissibility rulings on the wife’s affidavit sworn 5 August 2008.
The Court will make the orders and directions in relation to any application for costs that might be made as set forth above.
I certify that the preceding one hundred and eight (108) paragraphs are a true copy of the reasons for judgment of Kemp FM
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