CARMAN & CARMAN
[2017] FamCA 99
•27 February 2017
FAMILY COURT OF AUSTRALIA
| CARMAN & CARMAN | [2017] FamCA 99 |
| FAMILY LAW – SPOUSAL MAINTENANCE – Application pursuant to s 83 of the Family Law Act 1975 (Cth) to vary spousal maintenance orders – Where the wife’s circumstances have changed so as to justify a variation of the current spouse maintenance order – Where a child of the marriage has been diagnosed with a medical condition – Where the wife is unable to support herself adequately – Where the husband is not reasonably able to provide ongoing support to the wife – Application dismissed. FAMILY LAW – PROPERTY - Settlement in relation to marriage – Application to vary substantive orders for property settlement pursuant to s 79A(1)(d) of the Family Law Act 1975 (Cth) – Where the wife must establish that circumstances of an exceptional nature have arisen relating to the care, welfare and development of a child of the marriage – Where the consequences of a medical condition suffered by a child of the marriage are circumstances of an exceptional nature – Where the wife has not established that she or the child will suffer hardship if an order is not made – Application dismissed. |
| Family Law Act 1975 (Cth) ss 75(2), 79, 79A, 83. |
| Aumann & Aumann (Unreported, Judgment of Strauss, Baker and Graham JJ, Appeal number 128 and 171 of 1989, 1 November 1989) Fewster & Drake [2016] FamCAFC 214 Freestone & Freestone [2013] FamCAFC 190 Keane & Keane [2013] FamCA 332 In the Marriage of Liu (1984) FLC 91-572 Marras & Marras (1985) FLC 91-635 Milavic & Banks [2016] FamCA 884 Public Trustee v Gilbert (1991) FLC 92-211 Sadlier & Sadlier [2015] FamCAFC 130 Sandrk (1991) FLC 92-260 Simpson & Hamlin (1984) FLC 91-576 Y & Y (1995) FamCA 102 |
| APPLICANT: | Ms Carman |
| RESPONDENT: | Mr Carman |
| FILE NUMBER: | SYC | 5092 | of | 2012 |
| DATE DELIVERED: | 27 February 2017 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Loughnan J |
| HEARING DATE: | 9 January 2017 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Ms Spain |
| SOLICITOR FOR THE APPLICANT: | Mills Oakley Lawyers |
| COUNSEL FOR THE RESPONDENT: | Mr Shaw |
Orders
The Amended Initiating Application filed on 21 December 2016 by the wife is dismissed.
Paragraph 1.2 of the orders made on 15 July 2016 is discharged.
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 Carman & Carman has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC5092 of 2012
| Ms Carman |
Applicant
And
| Mr Carman |
Respondent
REASONS FOR JUDGMENT
Introduction
Ms Carman and Mr Carman were married for 16 years and separated on 31 March 2012. They have two daughters who are aged 14 and 11 years. On 24 November 2014 the parties resolved final parenting, property settlement, spousal maintenance and child support proceedings before the Federal Circuit Court, by consent (“the 2014 orders”). The property settlement component of the agreed orders included an order that the former matrimonial home be transferred to the wife with the wife required to refinance the mortgage on that property within two years. A spousal maintenance order in favour of the wife required the husband to pay one half of the mortgage repayments on the former matrimonial home, for a period of 18 months.
The wife now seeks a variation to the spousal maintenance and property settlement orders. She seeks that the spousal maintenance order be varied to the effect that the husband pay her $2,500 each month, indefinitely. She seeks that the property settlement order be varied to the effect that she have an extension of the time within which she is to refinance the mortgage on the former matrimonial home to a date, nine months after the date of the orders providing for that extension. The husband seeks that the wife’s application be dismissed and that she comply with the 2014 orders.
Although the parties have been divorced for some time, for ease of reference I will refer to them as the wife and the husband.
Applications
The wife seeks orders in terms of a minute of order submitted at the commencement of the hearing as follows:
1.That pursuant to Section 83 of the Family Law Act 1975 (Cth), Order 4 of the Orders made 24 November 2014 be varied so that the Husband shall pay to the Wife the sum of $2,500 per calendar month, into a bank account nominated by the Wife payable on the first day of each month.
2.That in the event that the Husband fails to comply with Order 1 hereof in any month, on the first day of the month, then the Husband shall pay to the Wife in addition to the said periodic sum of $2,500 interest thereon at the rate prescribed from time to time by the Family Law Rules 2004 (Cth) from the first day of the month until the date of payment.
3.That pursuant to Section 79A of the Family Law Act 1975 (Cth), Order 2 of the Orders made 24 November 2014 be varied so that the wife’s compliance be extended to occur within nine (9) months of the date of these Orders.
4.That the Husband pay the Wife’s costs of and incidental to this Application.
The husband seeks orders in terms of a Minute of Orders Sought attached to his Case Outline document dated 4 January 2017 as follows:
1.That the interim order made by this honourable Court on 15 July 2016 contained in paragraph 1.2 be discharged;
2.That the two applications made by the Applicant Wife, [Ms Carman], embodied in paragraphs 1 and 2 of her Application for Final Orders be dismissed.
The Hearing
The proceedings were listed for final hearing over two days commencing on 9 January 2017. The wife was represented by solicitor and counsel and the husband by counsel. The parties were both cross-examined, submissions were made and the trial concluded when judgment was reserved at 11.14 am on the morning of the first day of the trial.
As may be assumed from the duration of the hearing, there was little if any challenge to the evidence of each party and therefore the proceedings fall to be determined, largely on the basis of undisputed facts.
Documents Read
The wife relied on the following documents:
a)Financial Statement sworn 8 December 2016 and filed 21 December 2016; and
b)Affidavit of the wife sworn 8 December 2016 and filed 21 December 2016.
The husband relied on the following documents:
a)Amended Financial Statement sworn 22 December 2016 and filed 3 January 2017; and
b)Affidavit of the husband sworn 22 December 2016 and filed 3 January 2017.
Short History
The husband and wife were married in 1997 and separated on 31 March 2012. They were divorced with effect from 18 August 2013. They have two children, namely B and C who are aged 14 and 11 years respectively. Final orders were made by consent by the Federal Circuit Court as to parenting, property settlement, spousal maintenance and child support departure on 24 November 2014.
Background Facts
The husband was born in 1972 and is 44 years of age.
The wife was born in 1972 and is also 44 years of age.
In 1997 the parties married and commenced cohabitation.
In 2002 the parties’ first child, B was born. She is currently 14 years of age.
In 2005 the parties’ second child, C was born. She is currently 11 years of age.
The parties separated on 31 March 2012.
On 28 August 2012 the wife commenced proceedings for orders in relation to property, parenting and spouse maintenance in the Federal Circuit Court. She later amended her application to include orders for child support departure.
On 18 August 2013 the parties’ divorce became final.
The final hearing before the Federal Circuit Court was listed for 24, 25 and 26 November 2014 but on 24 November 2014 the proceedings were resolved in terms agreed between the parties. As to parenting, the 2014 orders included an order that the wife have sole parental responsibility for the children as to education and health and an order that the children spend time with the husband as recommended by the family therapist. Sadly, notwithstanding the latter order, the husband has not spent time with the children since before the 2014 orders were made. As to property and spouse maintenance, the effect of those orders is as follows:
a)That the husband transfer to the wife his interest in the former matrimonial home at D Street, Suburb E (“the Suburb E property”);
b)That within two years of the date of the orders, the wife discharge the mortgage secured against the Suburb E property (i.e. by 24 November 2016);
c)That in the event the wife fails to discharge the mortgage in accordance with the orders, the Suburb E property be sold;
d)That the husband transfer to the wife his interest in a motor vehicle;
e)A superannuation splitting order in favour of the wife as to an amount based on 65 per cent of the current value of the husband’s interest in one of two superannuation funds; and
f)That by way of spouse maintenance, the husband pay one half of all mortgage payments in relation to the Suburb E property for a period of 18 months (i.e. to 24 May 2016) and that the wife be otherwise responsible for the balance of the mortgage repayments;
g)An order that the husband pay directly, certain expenses for the children including the tuition fees and expenses for the children’s attendance at F School and that those payments not be credited against the periodic assessments of child support made from time to time and payable by the husband for the children.
In December 2014 the husband commenced working as a health professional with the G Health District. He continues to work in a similar role. He is based at H and I Hospitals and is paid at the rate of $115 per hour.
In January 2015 the husband provided to the wife an executed transfer in registerable form with respect to the Suburb E property.
In April 2015 the parties’ daughter, B was diagnosed with Ehlers-Danlos Syndrome (“EDS”), a connective tissue disorder. This will be referred to in more detail below.
On 17 December 2015 the wife was notified by Centrelink of a decision to refuse her application for Carer payments.
On 18 April 2016 the wife filed an Initiating Application in this Court commencing the current proceedings.
On 11 May 2016 the proceedings were listed for an interim hearing. The husband did not attend but agreed to continue paying half the mortgage payments until the adjourned date. The hearing was adjourned to 15 July 2016 and directions were made.
After a hearing on 15 July 2016 interim orders were made to the effect that the husband continue to pay half of the mortgage repayments on the Suburb E property until further order and that the wife’s obligation to discharge the mortgage on the Suburb E property be stayed until determination of the wife’s application for final relief.
On 29 July 2016 the wife filed a Third Party Debt Notice in the amount of $1,771.50 being an outstanding amount under the husband’s obligations with respect to a mortgage repayment. The Court issued the Third Party Debt Notice however the wife did not cause it to be served on the husband’s employer as the husband attended to the payment before that was necessary.
The wife and children continue to reside in the Suburb E property. The wife has a permanent job working three days per week.
The husband continues to work on contract for the G Health District as a health professional. He lives in rented premises at H Town with his de facto partner.
The Spouse Maintenance Proceedings
The wife seeks that the 2014 orders be varied so as to require the husband to pay the sum of $2,500 per month into a bank account nominated by her. She seeks that those payments continue indefinitely. In aid of the wife’s application, the husband’s existing obligation to pay spousal maintenance was continued until further order, by orders made on 15 July 2016.
The Approach to Proceedings for Variation of Spousal Maintenance
Section 83 of the Family Law Act 1975 (Cth) (“the Act”) provides:
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; or
(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.
It is the wife’s case that in accordance with s 83(2)(a)(i) of the Act, since 24 November 2014, her circumstances have so changed as to justify a variation of the current spouse maintenance order.
Section 72(1) provides as follows:
72 Right of spouse to maintenance
(1) A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
...
Relevantly, s 74(1) of the Act provides:
Power of court in spousal maintenance proceedings
(1)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.
As to the way in which the inquiry required by ss 72 and 74 is conducted, in Sadlier & Sadlier (2015) FLC 93-658, May J constituting the Full Court as a single judge said:
48.As correctly submitted by counsel for the husband in his written submissions, the framework to be applied in determining spousal maintenance is set out in Kajewski & Kajewski (1978) FLC 90-471. Lindenmayer J set out the framework as follows (at 77,427):
In my opinion, the procedure established by the Act in relation to the maintenance of a party to a marriage is as follows:
(1)(a) Firstly, there is an enquiry under sec. 72 to determine whether the party seeking maintenance is unable to support herself or himself adequately for one or other of the specific reasons set out in that section (and for no other reason), namely the care and control of a child of the marriage, age, physical or mental incapacity for appropriate gainful employment or “any other adequate reason having regard to any relevant matter referred to in subsec. 75(2).” (The emphasis is mine.) In my opinion, not all of the matters referred to in sec. 75(2) are relevant as possible reasons for the applicant's inability to support herself or himself adequately, and in particular the fact that he or she is or may be entitled to a pension or other Social Security payments, the entitlement to receive which is dependent upon need, is not so relevant. To hold otherwise is to make nonsense of sec. 72, and to lead to this logical absurdity, namely that the applicant's entitlement to receive the pension, which is itself dependent upon proof or at least statutory assumption of need, is to be used to show that he or she has no need. Logically (although perhaps not legally) the converse should apply, and proof of the receipt or entitlement to receive such a pension should be regarded as some evidence of need.
(b) If the answer to this first enquiry is “no”, then the application must fail and no further enquiry is necessary.
(2)(a) Next, if the answer to the first enquiry is “yes”, there is then an enquiry as to the means and reasonable needs of the other party, and the extent of his or her ability to contribute towards the support of the applicant.
(b) If this enquiry reveals that the other party has no such ability, then again the application must fail and no further enquiry is necessary.
(3) Finally, if the second enquiry establishes that the other party has an ability to contribute towards the maintenance of the applicant, then there is a further enquiry as to the extent to which it is reasonable that he or she should do so, and it is only at this stage that any entitlement of the applicant to receive a pension of the type which I have mentioned becomes relevant. No doubt if the other party is comfortably able to contribute a sum sufficient to ensure the adequate support of the applicant, any question of the applicant's entitlement to such a pension should be ignored. If there is likely to be involved some hardship to the other party in contributing to that extent to the maintenance of the applicant, then the applicant's entitlement to receive such a pension may be taken into account to the extent that it is necessary to do so to avoid such hardship. In my opinion, however, such entitlement should not be taken into account to such an extent as to reduce the liability of the other party below what he or she can reasonably afford, and thus to cast an unnecessary burden upon the public purse.
It is of no relevance to the proceedings before me but I note that the issue about the treatment of income tested benefits received by the payee, to which Lindenmayer J referred in Kajewski & Kajewski (1978) FLC 90-471 was later addressed by the Family Law Amendment Act1987 No. 181 of 1987 – s 39 which amended s 75 to insert subsection (3).
It is the wife’s case that she is unable to support herself because of the impact on her, of a deterioration in B’s health.
At the time of the 24 November 2014 orders, the children had some health problems. B suffered from asthma, vesicoureteral reflux (a backward flow of urine from the bladder to the kidneys) and joint hypermobility. C suffered from suppurative bronchitis and tracheomalatia. As a result C was and is prescribed with medication and uses a nebuliser on a daily basis. She is prone to chest infections and even a minor cold can make her quite ill. The nebuliser treatment takes 20 minutes to administer and is required twice a day when she has a runny nose. C also suffers from an anaphylactic reaction to mango skin, to a number of other plants and to food additive 471 (found in most processed foods). As a consequence, C’s food must be prepared from basic ingredients and preparing food and shopping are time consuming. As with B (and the wife), C suffers from vesicoureteral reflux.
Importantly, in April 2015 B was diagnosed with EDS. I gather that the syndrome is a group of genetic connective tissue disorders.
B has been required to consult with medical professionals including:
General practitioners; a Geneticist; an Occupational Therapist; Physiotherapists; an Ophthalmologist; a Cardiologist; a Hydrotherapist; a Nephrologist; a Dentist; a connective tissue disorder team; the Complex Pain Clinic; a Gastroenterologist; a Dietician; a Psychologist; and a spinal specialist.
B’s treating professionals are either at K Hospital or at the L Hospital.
B has been diagnosed with Scoliosis as a result of the connective tissue disorder. She may require a back brace in the next few years or back surgery to correct the condition. She suffered an associated back injury in April 2015 which required a week off school and some absences in the following week. She had daily appointments with a General Practitioner for heat therapy for two weeks. Thereafter she could not carry her school bag and needed her mother to take her to and from school.
In February 2016, B dislocated her hip as a result of her condition. Joint dislocations require B to take time off school.
On 1 March 2016 the wife and B met with a rehabilitation team at the Children’s Hospital. The team included B’s Geneticist, a Connective Tissue Disorder Specialist, a Pain Specialist and an Occupational Therapist. They plan to meet with B on a regular basis.
In April 2016 B dislocated her finger during a test at school.
In May 2016, B reported having a sore back. Over the following weeks her condition worsened and she reported pain all over her body. Medication and physiotherapy did not improve things and B was referred to the Complex Pain Clinic at L Hospital.
On 9 June 2016 B’s Orthodontist recommended that she have a plate installed due to problems caused by EDS.
On 9 June 2016 the wife and B attended at the Complex Pain Clinic. A specialist prescribed new medication and developed pain management plans for home and school. Unfortunately, despite the medication and plans, as at 20 December 2016 B continued to experience pain.
On 26 June 2016 B reported severe nausea and stomach pains. The wife was told that those pains were caused by Naproxen, one of B’s pain medications. The wife was told that the pain could have been associated with a stomach ulcer. On 28 June 2016, new pain medication was prescribed but the wife could not afford it.
There was another change of pain medication and referral back to the Pain Clinic on 12 July 2016. New medication was prescribed for B’s nausea but it requires the wife to regularly collect the medication in person at K Hospital, a round trip for the wife of some 90 kilometres.
As a result of the pain, B has been waking at night in recent months. From Term 4 in 2016 B has borrowed a school wheelchair to get around at school. The wife would like to buy her a wheelchair.
In October 2016 the wife was advised by B’s Gastroenterologist that gut issues are common for EDS sufferers and it is likely that she has developed Irritable Bowel Syndrome. Counselling was recommended as was a change to an iron rich diet.
B suffered acute pain on 13 October 2016 and was admitted to hospital for two days. B has been put on a restricted diet whereby she avoids certain foods including those containing gluten and lactose.
In November 2016 the orthodontic plate was installed.
In November 2016 B dislocated her thumb and bruised her arm on two occasions.
B’s weekly routine is set out at paragraph 39 of the wife’s affidavit and calls for the wife to supervise and facilitate activities each day. Some of the activities are undertaken at home and others require visits to K or M Town hospital or Suburb N.
The wife administers medication to B, three times a day (11 to 13 tablets a day), provides her with a hot water bottle for use day and night and at times, applies sports tape to her joints. B needs help with self care and coaxing when her own motivation to complete physiotherapy and occupational therapy exercises, diminishes. The wife drives B to and from school and each medical appointment. In addition, the wife spends 25 minutes after school each day administering C’s nebuliser.
I asked whether there was any evidence about benefits that might be available for B under the National Disability Insurance Scheme and was given no positive response. The notes from the Complex Musculoskeletal Service Hypermobility Clinic at the L Hospital dated 1 November 2016 refer to the wife being in the process of registering B under the scheme.
As at 20 December 2016 B continued to experience stomach pain.
The relevant s 75(2) matters are as follows:
(a) the age and state of health of each of the husband and wife;
The parties are 44 years of age.
The wife suffers from the following health conditions:
(a)high blood pressure. The wife is prescribed medication for that condition and is required to monitor her blood pressure at least once a week;
(b)dust allergy. The wife takes antihistamines medication when she cleans the home;
(c)vesicoureteral reflux. The wife undergoes regular testing for kidney damage as a result of that condition; and
(d)in 2014 the wife was diagnosed with carpal tunnel syndrome in her right arm. The wife suffers pain when writing and typing and pins and needles when driving and sleeping. She may require surgery in the future.
The husband suffers from the following conditions:
(a)high blood pressure. The husband is prescribed medication for that condition;
(b)pain in his neck as a result of intervertebral disc disease. He is prescribed Lyrica for the pain;
(c)stress;
(d)Obsessive Compulsive Disorder;
(e)depression and anxiety; and
(d)some manifestations of Attention-Deficit/Hyperactivity Disorder (ADHD). The husband’s psychiatrist has put the husband on a trial of Dexamphetamine.
The husband saw his Psychiatrist in October 2016 and next has an appointment in February 2017.
Neither of the parties provides evidence of any particular impact or possible future impact of their ill-health on their financial circumstances.
(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;
The wife’s income is $1,738 per week made up of salary as a public servant of $1,009, $113 by way of Family Tax Benefit and $616 per week from the husband for child support. She lives with the parties’ children. The wife says that she receives the benefit of $438 per week in the form of payments made by the husband for one half of the mortgage instalments on the Suburb E property. The husband says that he only pays $409 per week. No effort was made to explain the difference in the parties’ evidence about the amount of those payments.
The concerning fact about the wife’s income is that her job provides her with paid work for three days a week but in recent times, she has been unable to consistently attend to her work for three days a week. It was her evidence that she has used all of her recreation leave, her sick leave, her carer’s leave and some of her long service leave. In mid 2016 she only worked three days a week for a number of months. By the end of 2016 she worked on average, only one day a week. There was no challenge to the wife’s evidence about her income.
The wife spends $2,321 per week made up of $220 in income tax, $438 per week in mortgage instalments on the Suburb E property, $74 in council and water rates, $51 in health insurance premiums, $39 in home and contents insurance, $15 in CTP car insurance, $5 to register her motor vehicle and $1,479 on all other expenses. Notably, she spends $120 per week in petrol, $57 per week on motor vehicle maintenance, $60 per week on her (as opposed to the children’s) medical, dental and optical expenses, $60 on hobbies, $37 on gardening and lawn mowing and $35 per week on cleaning her house and pool. She spends $85 per week on hairdressing and toiletries and $20 per week on pets.
There are three things to note about the wife’s expenses. First, she was not challenged on any of them. That is to say it was not put to her that she does not actually incur those expenses, nor that any of them were unnecessary or excessive. Second, the wife says that she spends $583 each week more than her income. Third, on her own case, her outgoings are subsidised by the payments currently made by the husband on the Suburb E mortgage. She puts those payments at $438 per week. He says he pays $409 per week. In any event, it is common ground that those payments will cease. That would leave the wife with weekly shortfall of $992 on the husband’s figure. Finally, it is the wife’s case that her car is worn out and that her refrigerator is dying and she has no margin or provision in her budget to replace expensive items such as those. In relation to her motor vehicle, the wife drives about 100 kilometres a day whether she works or not. Her work is at a Suburb O and if she was to change jobs, presumably to work closer to home, she says she would lose her permanent employment.
The wife has $171 in banks, a car worth $1,000 and $10,000 in household contents. Pursuant to the 2014 orders the wife is to retain on sale or in specie, the net value of the Suburb E property. The net equity is estimated at about $332,000 ($950,000 - $618,000). The actual value would be crystallised by a sale but then the actual sale price may be different to the estimated value of $950,000 used for these proceedings and the value to the wife of the equity would be diminished by the costs of sale and the costs, if any, of acquiring new accommodation. The wife’s position is unsustainable. On her evidence even if she was to receive $2,500 per month (about $575 per week) she would continue to have a deficit in her weekly budget and would still be unable to replace her car or her refrigerator.
In her affidavit, the wife deposed that she owed her parents and a friend some money as a result of them providing loans to fund her legal expenses for these and the previous proceedings. The wife does not set out when those loans must be repaid.
The husband’s average weekly income is $3,986. His current contract runs from 1 November 2016 to 31 January 2017. It is the husband’s evidence that he is paid at the rate of $115 per hour for eight hours a day. If he is on call, which occurs in one week in five, he is paid for an additional hour a day. The husband is not paid for holidays or sick leave.
Those details of the husband’s employment are inconsistent with the terms of the contract of employment signed by the husband and attached to his affidavit, which purports to cover the period 1 August 2016 to 30 November 2016. There, his hours of work are said to be 10 hours a day and his daily rate is specified at $243.80 per hour. That contract provides for an on call rate of $12.80 per hour or part. I gather that the husband contends that the contract is wrong. Importantly, however, there was no challenge to the husband’s evidence about his income. It was not put to him, for example that he does, has ever or could, earn $243.80 per hour or that he could be paid for working 10 hours a day.
The husband provides specialist consultations to the health teams and hospital wards in the G Health District of New South Wales in which he works. I gather that he has not completed all of the training required to fully qualify or to be fully accredited as a specialist. He was asked about that in cross-examination and said something to the effect that he has taken his current employment as a way of maximising his income. He said that in order to complete or perfect his specialist qualification he would need to work in a position remunerated at a lower rate than his current position.
The husband’s de facto partner earns $1,178 per week after tax. As is referred to below, by his Financial Statement the husband deposes that he does not benefit from any expenditure by his partner and that he does not make any payments for her benefit. On the face of all of his evidence, I assume that at least one of those propositions is incorrect. At paragraph 21 of his affidavit the husband refers to his partner having borne a considerable part of his financial burden over the last four and a half years.
The husband estimates that he spends $4,101 per week. He pays $1,285 in income tax and $409 towards the mortgage on the Suburb E property. He spends $66 on health insurance premiums, $12 on CTP insurance, $10 in comprehensive insurance on his motor cycle and $3 to register the motor cycle. He spends $267 per week on repayments on the loan taken out to acquire the motor cycle, $112 on repayments on a Westpac Mastercard and $196 on a Commonwealth Bank Mastercard. The husband spends $1,290 in child support, made up of $617 in the form of periodic payments and $673 per week in educational and other expenses for his daughters. Finally, the husband spends $451 on living expenses. It is worth noting that the husband spends 48 per cent of his after-tax income on child support alone.
Unexplained aspects of the husband’s expenditure include the fact that although he makes reference to the payment of $215 in rent at item 21 of his Financial Statement, he does not include that amount in the total for that Part, or elsewhere in his Statement. The husband deposed at paragraph 24 of his affidavit that he and his partner equally share the payment of $430 per week in rent ($215 each). Therefore, the husband’s Financial Statement understates his expenses by $215 per week. As variously disclosed, the husband’s weekly budget shows a shortfall of income over expenses of $330 per week. I note that those calculations include $409 for the Suburb E mortgage.
Further, there is no reference in Part G of the husband’s Financial Statement to any payments being made on the Westpac personal loan that is included among the husband’s liabilities at item 50 in Part K. Presumably, one or both of those Parts are incorrect.
Whatever else might be said about it, the unexplained aspects of the husband’s evidence do not work to the forensic disadvantage of the wife and therefore no harm is done from that point of view. It is not for the Court to correct apparent errors in the husband’s evidence nor, of the Court’s own initiative to interpret ambiguities in his evidence in his favour and to the disadvantage of the wife. That said in the real world payments are likely to be required on the Westpac personal loan.
The husband has $18,504 in assets, made up of a motor cycle worth $18,000 and $504 in the bank. In addition to his obligations under the Suburb E mortgage, and subject to a problem with the arithmetic in the husband’s Financial Statement he owes $125,136 or $125,146 made up of a personal loan to Westpac of $36,754, $24,533 on the Westpac Mastercard, $41,513 on a CBA Mastercard and $22,336 on a loan to motorcycle finance.
The husband has a greater income and earning capacity than the wife.
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
In November 2014 the parties agreed to final orders which provided for the children to live with the wife and to spend time with the husband based on the recommendations of a therapist. The sad fact is that the children have not spent time with the husband since the orders were made. In the context of these proceedings, the practical result is that the wife has sole care of the children and no respite from the onerous responsibilities of parenthood, exacerbated in this instance because the children have compromised health.
(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;
(e) the responsibilities of either party to support any other person;
I have set out above, what there is of the evidence in relation to the parties’ expenses.
(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;
Both parties have superannuation interests. The wife has $125,426 in superannuation with $36,529 with the P Super Fund and $88,897 with the Q Super Fund.
The husband has $125,009 with First State Super and $29,179 with One Path Superannuation.
I am not sure if these amounts take into account the import of the super splitting orders in favour of the wife made in the first orders (65 per cent of the OnePath Fund).
(g) where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;
There is no probative evidence about the standard of living during the marriage.
An inference made in the husband’s case was that the wife may be able to rehouse herself and the children so as to take pressure from her weekly budget. That argument does not really draw on issues about the parties’ standards of living. There is no evidence for example about the availability of smaller, equally suitable but less expensive accommodation in an area accessible to the wife’s work, the girls’ school and medical services. Nor is there evidence about the standard of accommodation of the husband.
In a case largely without factual disputes, there was a suggestion in the wife’s case of criticism of the husband in relation to his choice of transport. I gather that the husband took a motor vehicle from the marriage and sold it or traded it on a motor cycle. It was not put to the husband that he could or should have made some other decision about his means of transport or that he had no need of private transport. The husband says that for his work he makes the 110 kilometre round trip between H Town and I Town, three times a week. If it is not a motor cycle, the husband would require a car. Virtually all motor vehicles depreciate. No relevant issue arises in this regard.
(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;
There is no evidence about the wife retraining or establishing a business.
(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;
There is no specific evidence on this matter. The range of possible orders may make it more difficult for a creditor to recover on a debt. The mortgagee of the Suburb E property is protected by its security. If the wife is partly or totally unsuccessful, the Suburb E property will be sold and her creditors can be paid. However, if the wife is successful to any extent, that could make it difficult for the husband’s consumer creditors and the wife’s personal lenders to be paid.
(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;
There is no evidence on this issue.
(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;
There is no evidence about the impact of the marriage on the parties’ capacity to work. However, it is the wife’s case and I accept, that the care of the children, and particularly of B has adversely affected her capacity to work.
(l) the need to protect a party who wishes to continue that party's role as a parent;
The husband provides very substantial child support. Sadly however, it appears that as between the parents, the wife will continue to bear the sole physical impost of the parenting role. It is not a question of the wife wishing to continue her role as a parent. With the husband being currently estranged from the children, only the wife is in a position to provide day to day care for the children.
(m) if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;
I have set out above what there is of that evidence. There is no evidence about the financial circumstances of the husband’s partner beyond the quantum of her after tax income.
(n) the terms of any order made or proposed to be made under section 79 in relation to the property of the parties;
The evidence suggests that the property settlement orders of 24 November 2014, heavily favoured the wife. That is not to say that the orders were inappropriate. By definition they were just and equitable but the percentage of readily accessible assets going to the wife greatly exceeded that going to the husband. On the face of it, the husband retained one of two motor vehicles, some other personalty, all of his interest in the First State Super fund and the balance of his interest in One Path MasterFund subject to a splitting order calculated by reference to 65 per cent of the total value of that interest, in favour of the wife. Otherwise, the wife received the balance of the parties’ assets. Importantly, the wife received the entire equity in the Suburb E property.
The subtext of the property settlement orders was an attempt to keep the wife and children in the Suburb E home. All of the parties’ equity in the home was to be transferred to the wife and the wife was given two years to refinance the mortgage and 18 months of maintenance in the form of one half of the mortgage payments. All of that is readily explained in terms of the difference in the parties’ incomes and earning capacities and by the fact that then, as now, the day to day responsibility for the children fell exclusively to the wife. Suffice it to say however, that apart from superannuation, the husband is left with a debt in excess of $100,000 and the wife with about $300,000 by way of equity in the Suburb E property.
Unfortunately, the wife has not been able to refinance the Suburb E property and the orders she now seeks are addressed at achieving that refinance. The mortgage now stands at about $618,000 and the wife estimates the property to have a value of $950,000, “an estimated market value based on recent enquiries”. The home is a four bedroom property on one level in Region J. It has three living rooms, a study, two bathrooms, a double car garage and a pool.
The wife has made enquiries with a mortgage broker but presents no evidence suggesting that she will be able to refinance. She was told that a lender would only provide evidence of a refinance proposal on her making of an application for refinance. The wife’s plan is that with an indefinite order for spousal maintenance, she will be able to demonstrate to a lender that she can service the loan necessary to discharge the existing mortgage within the extended period she seeks for that purpose.
It is the wife’s case that the home is suitable for her and the children, with the pool assisting with B’s therapy and the fact that it is a one level property, aiding her access around the home.
(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
There is a child support assessment and the husband makes and the wife receives those payments. In addition to the assessed rate, the husband pays a similar amount by way of private school fees and other expenses.
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;
As a result of the interim orders made on 15 July 2016 the husband has continued to pay maintenance that was to cease in May 2016 and was denied relief from legal responsibility under the Suburb E mortgage beyond the November 2016 deadline.
Otherwise nothing comes to attention here.
(p) the terms of any financial agreement that is binding on the parties.
There was no such agreement.
Discussion
I am satisfied that in accordance with s 83(2)(a)(i), since 24 November 2014, because of a deterioration in B’s health, the wife’s circumstances have so changed as to justify a variation of the current spouse maintenance order. The wife alone has the day to day care of the children. In April 2015 B was diagnosed with EDS and her health has significantly deteriorated since that time. Albeit that there is no detailed accounting for the actual costs, I am satisfied that the deterioration in B’s health has added to the wife’s costs and that the resultant demands on her time threaten her current level of income.
The next enquiry in the context of the wife’s claims is whether she is unable to support herself adequately because of her care and control of B and C.
I am satisfied that the wife is unable to pay her outgoings from her own resources. The wife does not say and it is not asserted against her, that she has unexercised earning capacity. It is not asserted that she does not incur the expenses she claims nor that, apart from the Suburb E mortgage, any of them are unnecessary. The wife’s expenses currently exceed her income by $583.00 each week. Neither of the parties seeks an order that the husband’s direct payment of one half of the mortgage instalments on the Suburb E property will continue. Therefore from the date of final orders in the current proceedings, the wife’s expenses will exceed her income by $992 per week.
It is clear that the wife’s expenses are increased by the costs associated with the Suburb E property. The remedy under s 72 is not aimed at securing a particular property for the wife. The remedy is aimed at her adequate support. The evidence does not permit a finding that the wife’s plan to refinance the Suburb E home is feasible. The wife has provided no indication from a lender that the refinance will be approved, nor the conditions for that approval. If she was entirely successful in her maintenance application, she would still have a weekly shortfall in her budget of more than $400. That would be of concern to a lender.
The wife has not identified the immediate financial consequences of refinancing the property – the costs of the refinancing itself and the anticipated mortgage instalments on the new loan. The parties give different evidence about the current mortgage instalments. If the wife is accepted, they are $876 per week. On the husband’s version they are $818 per week.
Those facts beg the question, does the wife’s support require her to retain the Suburb E property?
Again, there is no evidence of an alternate proposal – no evidence about the likely consequences for the wife of the default arrangement in the 2014 orders. If the Suburb E property was sold then the wife would presumably have the option of attempting to buy a less expensive property or obtaining rented accommodation and otherwise applying the net sale proceeds.
The wife’s income is critical and the wife makes but brings to no conclusion, a case to the effect that her current employment is untenable. She has a position that requires her to work three days a week. She has not been able to work three days a week for some considerable time and has nearly exhausted all of her paid leave entitlements. She identifies nothing that suggests that she will be able to work at the rate of three days of each week in future. It was submitted that at the time the 2014 orders were made it was the wife’s intention to increase her work to a full time load. It is her case that due to the deterioration in B’s health, she has been unable to do that.
The resolution of the question of the wife’s needs is found in the quantum of her claim. The weekly shortfall in her budget will amount to at least $992. The cost of retaining the Suburb E property may not be necessary for her adequate support. With those misgivings about the feasibility of retaining the Suburb E property, I am satisfied that the wife has a shortfall in income over her adequate needs of not less than the amount she claims for spousal maintenance, that is, $2,500 per month or about $575 per week.
The wife seeks indefinite spousal maintenance. Section 82 of the Act provides for the termination of spousal maintenance orders upon certain events but the order sought makes no provision for an end to the obligation otherwise. Since the introduction of the Act some priority has been given to the need to separate the finances of parties to a marriage that has ended (s 81). That said, I accept that the Court has power to make an indefinite order. I accept too that if I considered that the requirements of s 83 and 72 have been met, notwithstanding that neither party proposes it, the Court could make an order for maintenance on different terms than the wife proposes. An order could be made for a limited period and or at a rate that was different to the rate sought by the wife. If an order was to be made for a limited period, adequate reasons would be needed for the period identified[1]. As to affording the parties the opportunity to address that issue, during the trial I asked the wife’s counsel about the indefinite nature of the order sought and she said something to the effect that an order could be made until the younger child attained 18 years. That is no doubt true but the significance of that event is not clear. Given that the circumstances of the older child have triggered the wife’s application it is not clear why the younger child attaining 18 years would be an event that warranted the cessation of the maintenance obligation.
[1]Raine & Creed [2015] FamCAFC 133
I accept that the wife is unable to adequately support herself from her own resources, for an adequate reason. Her need for support is not less than $575 per week. There remains the question of whether and if so, on what terms, the husband would be reasonably able to pay maintenance into the future.
As to the meaning of “reasonably able” in s 72(1) in Freestone & Freestone [2013] FamCAFC 190 the Full Court said:
33.The meaning of the words “reasonably able” as it is used in s 72(1) was explained in the following way by Ellis J (with whom the other members of the Full Court agreed) in Curnow & Curnow (unreported, Full Court of the Family Court of Australia, 28 April 1997):
“In my judgment, a party is only liable to maintain the other party to the extent that the first-mentioned party is reasonably able to do so. In determining whether a party is reasonably able to support or contribute to the support of another party, one should have regard to the income of the first-mentioned party and then the unavoidable, non-discretionary expenses of that party, including his or her reasonable living expenses. After that exercise, one can consider the amount, if any, from which the first party may be able to contribute to the maintenance of the other party.”
(emphasis added)
34.This explanation of s 72(1) has been accepted by subsequent Full Courts in Keepkie & Keepkie [1998] FamCA 39 (unreported) and DJM & JLM[1998] FamCA 97; (1998) FLC 92-816.
The husband has a deficit in his weekly budget of $330. That includes provision for mortgage payments he makes at $409 per week. It is agreed that those payments will cease. That would leave the husband with a surplus of income over the outgoings he identifies, of up to $79 each week. However, as I have noted, the husband’s expenses make no provision for payments on a personal loan from Westpac.
I am not satisfied that the husband is reasonably able to provide ongoing support to the wife. He currently spends more than he earns and he owes more than he owns by a margin of about $100,000. It is not asserted that he could earn more. It is not asserted that he does not incur the expenses he claims, nor is there a credible claim that they are exaggerated or unnecessary. When he ceases to pay one half of the Suburb E mortgage he will have a small surplus in the weekly budget identified in his Financial Statement but that budget does not provide for him to service all of his debts (rent and Westpac loan).
Each of the parties has superannuation interests with a value in excess of $100,000 but they are well short of the age at which those interests are normally accessible.
It is an understatement to record that the wife is in a very weak financial position. She has sole responsibility for the most difficult of parenting tasks and is not able to adequately support herself. On the other hand the husband has a good income but more than two years after the parties’ property settlement he has substantial debts and no significant assets. The wife has established that she has a need for ongoing support. However, the husband is not reasonably able to continue to pay spousal maintenance. The wife’s application will be dismissed.
The Section 79A Proceedings
The Court has power, among other powers to vary or substitute a new order for an order made under s 79. The wife seeks an order that the 2014 orders be varied by extending the time within which she is to refinance the mortgage on the former matrimonial home to a date, nine months after the date of the orders.
The Approach to Section 79A Proceedings
Section 79A of the Act provides as follows:
Setting aside of orders altering property interests
(1) Where, on application by a person affected by an order made by a court under section 79 in property settlement proceedings, the court is satisfied that:
(a) there has been a miscarriage of justice by reason of fraud, duress, suppression of evidence (including failure to disclose relevant information), the giving of false evidence or any other circumstance; or
(b) in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out or impracticable for a part of the order to be carried out; or
(c) a person has defaulted in carrying out an obligation imposed on the person by the order and, in the circumstances that have arisen as a result of that default, it is just and equitable to vary the order or to set the order aside and make another order in substitution for the order; or
(d) in the circumstances that have arisen since the making of the order, being circumstances of an exceptional nature relating to the care, welfare and development of a child of the marriage, the child or, where the applicant has caring responsibility for the child (as defined in subsection (1AA)), the applicant, will suffer hardship if the court does not vary the order or set the order aside and make another order in substitution for the order; or
…
the court may, in its discretion, vary the order or set the order aside and, if it considers appropriate, make another order under section 79 in substitution for the order so set aside.
…
(1AA) For the purposes of paragraph (1)(d), a person has caring responsibility for a child if:
(a) the person is a parent of the child with whom the child lives; or
(b) a parenting order provides that:
(i) the child is to live with the person; or
(ii) the person has parental responsibility for the child.
The wife relies on s 79A(1)(d). As the wife’s case was argued, the subsection calls for the wife to establish that the illness suffered by B after the 2014 orders, created circumstances of an exceptional nature relating to her care, welfare and development and that therefore the child or the applicant[2], will suffer hardship if the Court does not vary the order. I take it that the hardship claimed by the wife would be the inability to refinance and thereby retain, the Suburb E property.
[2] I note that the Full Court in Garden & Gavin (No 2) [2010] FamCAFC 125 considered hardship relevant only in the context of the applicant, not the child. The first instance judge, on hearing the remitted case, had a different view (see Gavin & Garden [2011] FamCA 190) . That issue does not impact on the outcome of these proceedings.
Circumstances of an Exceptional Nature
I turn to the question of the types of situations that have been considered to be circumstances of an exceptional nature.
In Simpson & Hamlin (1984) FLC 91-576 the Full Court examined such circumstances in the context of a change in the responsibility and care of children after the making of final property orders by consent. The Full Court held at 79,657:
So far as the first point is concerned, his Honour quite rightly, in our view, concluded that:
“The occurrence of a change in the responsibility for the daily care and control of children of a marriage, after the making of a property order under sec. 79 of the Family Law Act could not be held of itself to be an unusual circumstance. The ordinary vicissitudes of life coupled with the difficulties that parties to a marriage often experience in the task of restructuring their lives following the dissolution of their marriage and the division of their assets, and their obligations to the support of each other and the support, care and control of their children, frequently creates situations in which it is desirable having regard to the children's welfare that such a change occurs.”
The question therefore was whether the change which occurred in this case was such as to “take it out of and beyond the ordinary circumstances in which such change might be reasonably expected to occur”....
At 79,658 the Full Court said:
His Honour in our view stated correctly the law applicable on this point. What amounts to ''exceptional circumstances'' is very much a question of fact and degree. With findings on such matters an appellate tribunal is reluctant to interfere. Whilst we might have had some hesitation ourselves as to whether or not in the light of the history of these parties and their admitted future intention, the change of custodial arrangements was so exceptional as to take it out of the normal vicissitudes of life, it was in our view a finding which his Honour was entitled to make on the evidence and which we cannot disturb...
At 79,659 the Full Court said:
... it is not sufficient that it appears that circumstances have arisen of an exceptional nature resulting in hardship to the applicant, the Court must consider in the exercise of its discretion whether that hardship is of such a serious nature and results in such inequity that it can only be rectified by the extreme step of setting aside or varying an existing order of the Court.
In the non-reportable decision of Y & Y (1995) FamCA 102 the Full Court comprising of Fogarty, Kay and Cohen JJ addressed the finding in Simpson & Hamlin (above) that the circumstances in question must be “out of and beyond the ordinary circumstances in which such change might be reasonably expected to occur”. Their honours Fogarty and Cohen JJ said at [18]:
18.We do not think the Full Court intended to limit the test of exceptional circumstances to circumstances which cannot reasonably be expected to arise. This was made clear when the Court said:
“What amounts to exceptional circumstances is very much a question of fact and degree.”
With respect, we agree. The Court should not limit itself to matters relevant only to expectations. It should consider all relevant facts and matters when deciding whether there have been circumstances of an exceptional nature.
In Sandrk (1991) FLC 92-260, Gee J at first instance, in contemplation of the findings in Simpson & Hamlin (above) found that it was relevant that the change in residence of the children occurred “unexpectedly and quickly” after the making of the property orders, and could not have been reasonably contemplated or expected at the time of making the orders.
In Public Trustee v Gilbert (1991) FLC 92-211 the Full Court (at 78,428) found that the death of a party can amount to a change in circumstances of an exceptional nature. At 78,428 the Full Court said:
The death of the husband clearly falls within the description of “circumstances of an exceptional nature”. The Full Court in Simpson and Hamlin (1984) FLC 91-576 at 79,657-79,658 cited with approval the remarks of Lambert J in the Court below that a change in circumstances occurring unexpectedly and quickly after the making of a property order, was such as to “take it out of and beyond the ordinary circumstances”.
(See also Saleeby & Moon(as executor of the estate of the late Ms Lambros) [2015] FamCA 43.)
In In the Marriage of Liu (1984) FLC 91-572, Nygh J found that failure to pay maintenance obligations on the part of the husband did not constitute circumstances of an exceptional nature that might justify setting aside the original order, but importantly, his Honour commented at 79,624:
There is no doubt that the “exceptional circumstances”' need not by themselves relate to the original property order. An obvious example would be a serious chronic illness of a child which causes a need for remodelling of the house in which he or she lives which cannot be met out of increased maintenance but only out of an increased share of capital...
In Marras & Marras (1985) FLC 91-635 Purdy J at first instance found that the husband’s failure to reliably pay periodic maintenance did amount to exceptional circumstances pursuant to s 79A(1)(d) of the Act.
In the non-reportable Full Court decision of Aumann & Aumann (Judgment date November 1, 1989, Appeal Nos. 128 and 171 of 1989) Graham J held, to which Strauss and Baker JJ agreed, that it was open to the trial judge to determine that the circumstance of the wife becoming unable to finance an option to purchase the husband’s share of the home, was not of an exceptional nature. Graham J said at paragraph [16]:
I am of the view that it was open to his Honour on the evidence to determine that there were no circumstances of an exceptional nature. It is no doubt desirable that a wife and child remain in the home. One can well understand her wanting to, but that is not a proper basis for the exercise of this discretion and I find that there are no errors in his Honour’s finding.
The Court has also dealt with the meaning of exceptional circumstances away from the context of s 79A. In relation to setting aside a binding child support agreement pursuant to s 136(2)(d) of the Child Support (Assessment) Act 1989, Watts J in Keane & Keane [2013] FamCA 332 found that a redundancy, and a party re-partnering and having children with that new partner, were not in themselves exceptional circumstances, but a combination of those factors could be although his Honour was unable to make such a finding in the circumstances of that case.
In Milavic & Banks [2016] FamCA 884 the Court dealt with an application to set aside a financial agreement pursuant to s 90UM of the Act and accordingly, whether there was a “material change in circumstances”. The change in circumstances was said to be where a child was born with autism, subsequent to the signing of the financial agreement. It was found that “the fact that since the parties entered into the Agreement the younger child has been diagnosed with autism, adding significantly to what is required of the parties for his care physically and emotionally and to some extent financially, is a material change relating to his care welfare and development”. I note however that in Fewster & Drake [2016] FamCAFC 214 the Full Court noted at paragraph 48 that the test required to establish “material change” is a lower threshold than which applies to circumstances of an “exceptional nature”.
Albeit that at the time of the orders, B suffered some ill-health, on the unchallenged evidence of the mother, EDS and it’s sequelae for B and necessarily for the mother, amounted to circumstances of an exceptional nature. There is no suggestion that EDS was a foreseeable development of a condition suffered by B before the orders were made. There is no suggestion that B was as debilitated prior to the making of the orders as she was at any time after she was found to be suffering from EDS. Similarly, there is no suggestion that the parenting load and the practical impost on the wife of B’s care when the orders were made was as significant and time consuming as has been the case since B was found to be suffering from EDS.
I accept that the consequences of the deterioration in B’s health since the 2014 orders are circumstances of an exceptional nature.
Hardship
The next question is whether or not, as a result of consequences of the deterioration in B’s health since the 2014 orders, B or the wife will suffer hardship if the Court does not vary those orders. The hardship identified by the wife is the sale of the Suburb E property if she cannot refinance the property.
There is no evidence in the wife’s case that, even if she was successful in her application for variation of spousal maintenance, she will be able to refinance the mortgage on the Suburb E property. As I have set out above, I will not make an order continuing the husband’s obligation to pay spousal maintenance. Without continuing spousal maintenance, there is no suggestion that the wife will be able to refinance the mortgage secured over the property. The wife has not established that either she or B will suffer hardship if the s 79A order is not made.
It follows that the wife’s application must fail.
I certify that the preceding one hundred and forty (140) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 27 February 2017.
Associate:
Date: 27 February 2017
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