CARTWRIGHT & CARTWRIGHT

[2016] FCCA 1473

FEDERAL CIRCUIT COURT OF AUSTRALIA

CARTWRIGHT & CARTWRIGHT [2016] FCCA 1473

Catchwords:
FAMILY LAW – Spousal Maintenance.

Legislation:

Family Law Act 1975, ss.72, 74, 75, 79

Cases cited:
Bevan & Bevan (1995) FLC 92-600
Nutting & Nutting (1978) FLC 90-410
Brown & Brown (2007) FLC 93-316
Maroney & Maroney [2009] FamCAFC 45

Applicant: MR CARTWRIGHT

Respondent: MS CARTWRIGHT

File Number: SYC 7093 of 2015

Judgment of: Judge Myers

Hearing date: 6 April 2016

Date of Last Submission: 6 April 2016

Delivered at: Newcastle

Delivered on: 6 April 2016

REPRESENTATION

Counsel for the Applicant: Mr Ulbrick

Solicitors for the Applicant:	G & D Lawyers
Solicitors for the Respondent:	Mark Graham Solicitor

THE COURT ORDERS PENDING FURTHER ORDER THAT:

1. The husband pay to the wife the sum of $500.00 per week as spousal maintenance with the first of such payments to be made within 7 days of todays’ order. 

2. The husband pay the following expenses:

   (a)All instalments of principal and interest in relation to the home loan with (omitted) Bank;

   (b)The parties’ hospital and medical private health insurance with (omitted) Health Fund;

   (c)All rates and taxes of the Property E property including water rates;

   (d)All rates, taxes and outgoings including strata levies in relation to the real estate at Property M.

3. The wife retain in her possession the Jayco Expanda Caravan.

4. The husband forthwith do all acts and things and sign all documents necessary to sell the (omitted) shares and thereafter pay the proceeds as follows:

   (a)50% of the proceeds to the husband;

   (b)50% of the proceeds to the wife.

5. The husband at first instance pay the costs of the valuation fee for the valuer valuing the property situated at Property E and Property M that where the husband has paid those valuers fees prior to the sale of the shares in (omitted) he deduct from the fifty percent share of the proceeds payable to the wife a sum equivalent to that paid by him for reimbursement where he has not paid the said sum prior to or following the sale the wife thereafter reimburse the husband fifty percent of the costs of the valuations upon the husband providing to the wife a receipt evidencing payment of the sale.

6. Both parties’ costs of the spousal maintenance proceedings be reserved.

1. Any argument for costs is adjourned to 23 May 2016 at 9.30am for either costs hearing or alternatively setting a timetable with respect to the parties application for costs.

2. Both parties are within 14 days to provide to the other party a letter that sets out any costs sought by that party identifying the quantum of costs in accordance with and whether such costs are in accordance with Schedule 1 of the Federal Circuit Court Rules 2001 and if so itemising costs in accordance with those rules.

THE COURT NOTES THAT:

(A)The applicant and respondent will seek to make an application for costs against one another in respect to the spousal maintenance proceedings.

IT IS NOTED that publication of this judgment under the pseudonym Cartwright & Cartwright is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT NEWCASTLE

SYC 7093 of 2015

MR CARTWRIGHT

Applicant

And

MS CARTWRIGHT

Respondent

REASONS FOR JUDGMENT

EX-TEMPORE`

1. This is a decision in proceedings between the husband, Mr Cartwright as the applicant in the substantive proceedings and respondent in the application for spousal maintenance and the wife, Ms Cartwright as the respondent in the substantive proceedings and applicant in the application for spousal maintenance.  The wife relies upon a minute of order provided to the Court in which the wife seeks orders as follows:

   a)that pending further order, the husband pay to the wife spousal maintenance in the amount of $746 per week with the first payment to be made within seven days of today’s orders.

   b)that pending further order, the husband shall pay the following expenses when the same fall due:

   c)all instalments of principle and interest in relation to the home loans with the (omitted) Bank.

   d)all insurance premiums in relation to the home, the hospital and medical insurance cover with (omitted) Health Fund, the wife’s Nissan Navara motor vehicle together with registration fees for the caravan registration number (omitted).

   e)all rates and taxes in relation to the home at Property E, including electricity and gas, telephone and internet charges including the wife’s mobile telephone service.

   f)that pending further order, the husband pay all rates, taxes and outgoings in relation to Property M in the State of New South Wales. 

   g)the husband’s interim application for the order for the sale of the Jayco Expanda (omitted) caravan be dismissed. 

   h)the wife sought orders that were not pressed with respect to a trailer and some jewellery in the possession of the husband

   i)the husband sell his shareholdings in (omitted) forthwith and pay one half share of the proceeds to the wife as her solicitors direct in writing.

   j)the husband pay the wife’s costs.

2. At the conclusion of the hearing, the solicitor for the wife changed the wife’s position and instead sought an order that spousal maintenance be paid in the sum of $520.00 per week pending further order. 

3. The wife relied upon the following documents that the court has read and considered being:

   a)the minute of order filed at 5 April 2016;

   b)the affidavit of the wife filed at 1 September 2015; 

   c)the affidavit of the wife filed 30 March 2016;

   d)financial statement of the wife filed 1 December 2015;

   e)the affidavit of Ms E filed 30 March 2016;

   f)an affidavit of Dr N filed 1 February 2016.

4. The husband’s position was one as follows;

   a)that he paid the wife the sum of $225 per week as spousal maintenance pending further order. 

   b)The husband pay pending further order the following;

   i)instalments of principal and interest in relation to the home loan with (omitted) Bank;

   ii)the parties hospital and medical insurance with (omitted) Health Fund;

   iii)all rates and taxes in respect of the Property E property, including water rates;

   iv)all rates, taxes and outgoings in relation to the strata property at Property M.

5. The husband sought the sale of the Jayco Expanda (omitted) caravan with the proceeds to be used towards the wife’s maintenance.  The husband agreed to the sale of his shareholding in the (omitted) but that the moneys be first used to pay the costs of the expert valuer or valuers engaged by the parties to value the properties at Property E and Property M. 

6. At the conclusion of the hearing, the solicitor for the husband indicated the husband was prepared to pay the wife the sum of $300 per week as spousal maintenance pending further order.

7. The husband relied upon the following documents at the hearing, namely

   a)an outline of case document,

   b)affidavit of the husband filed 1 April 2016,

   c)financial statement of the husband filed 29 October 2015. 

8. The court has read and considered those documents tendered from subpoena packets 2 and 3 being material produced by (omitted) and the New South Wales Police. 

Background

1. The wife was born on (omitted) 1955 and the husband was born on (omitted) 1959.  The husband is employed as an (occupation omitted) with the (employer omitted).

2. The wife is not employed and receives a Newstart allowance from Centrelink.  The parties met in late 1998 or early 1999 and began living together upon them getting married on (omitted) 2000.  There are no children of the parties’ relationship.  The husband suggests at paragraph 12 of his affidavit that parties separated in July 2014.  The wife at paragraph 5 of her affidavit filed 1 December 2015 likewise suggests the relationship ended in on or about July 2014.  Following separation there was considerable acrimony between the parties with some police involvement.

3. To be clear, the court is not able to make findings about who may have or have not been the perpetrator of family violence in circumstances where the wife alleges family violence, the husband denies family violence and the evidence has not been tested.  At the commencement of the parties’ relationship, the wife worked as a self-employed (occupation omitted).  The wife gives evidence as to having been involved in three separate motor vehicle accidents and having undergone spinal surgery as late as April of 2015.

4. The wife provides evidence that she has constant pain in her lower back radiating down her left leg, is unable to sit or stand for long periods of time and sleep without medication.  The wife suggests that she is unable to support herself adequately by reasons of her physical and mental incapacity for appropriate gainful employment.  The wife relies upon her financial statement in support of her contention.  The court has considered the expenses set out within the wife’s financial statement and the evidence of the parties with respect to the wife’s expenditure on such things including pharmaceutical expenses.

5. The court finds that the expenses with respect to pharmacy costs are overestimated having considered the wife’s expenditure on pharmacy set out in the wife’s bank account statements that were submitted on behalf of the husband in support of his case. 

6. It is not controversial the husband currently pays the wife $225 per week as spousal maintenance and had previously paid $300 a week.  The affidavit of Dr N and Ms E psychologist is such that the court accepts the wife is unable to support herself by reasons of physical or mental incapacity for appropriate gainful employment.

7. The husband suggests the wife could support herself by renting out a room or running a bed and breakfast-type business from the Property E property.  The court notes that while the parties might have at one stage contemplated such a business venture the same never came to fruition.  The court accepts that the property at Property E is in a damaged state.  The court does not accept the husband’s argument that the wife might support herself adequately via the rental of a room or operation of a bed and breakfast enterprise from the Property E property that is in what the court will describe as a state of disrepair.

8. The court does not accept the wife would be able to adequately support herself working as a self-employed (occupation omitted).  The husband suggests that the caravan in the wife’s possession be sold and proceeds be used for the wife’s maintenance.  The wife gives evidence of her attachment to the caravan and her desire to keep the caravan in a final property settlement.  To order the sale of the asset on an interim basis would render the orders sought by the wife on a final basis nugatory.  The court declines to order the sale of the said caravan in those circumstances.

9. The process for assessing a spousal maintenance claim is set out in the case of Bevan & Bevan (1995) FLC 92-600 at pages 81, 981 to 81 982.

10. It requires a threshold finding under section 72(1) before consideration of section 74 and provides that no fettering principle that pre-separation standards of living must automatically be awarded where the respondent’s means permit and discretion as to an exercise of the Court’s discretion in accordance with section 74.

11. The recipient of maintenance is entitled to be maintained adequately.  The word “adequately” imports a standard within which, in all circumstances, is reasonable.  The Court is not required to automatically order sufficient maintenance to allow the pre-separation standard of living should the respondent’s means prohibit.  Those cases are found in Nutting & Nutting (1978) FLC 90-410. And, again, in Bevan & Bevan at page 81 980 to 81 982.

12. The Full Court in Brown & Brown (2007) FLC 93-316 summarised the principles relating to the courts consideration of the term “adequate”. The word adequate is not to be determined according to any fixed or absolute standard. The idea that adequate means is of a subsistence level has been firmly rejected. Where possible, both spouses should continue to live after separation to a level which they have previously enjoyed if this is reasonable, although the parties’ standard of living may have to be lower if financial resources are insufficient to maintain that standard.

13. In some circumstances, it may be reasonable for the parties to live at a high standard than that previously enjoyed.  It is not necessary for an applicant for maintenance to use up all of the capital in order to satisfy those requirements where he or she is unable to support herself or himself adequately.

14. However, an applicant is not entitled to live at a level considered luxury or comfort merely because the other party is very wealthy.  Having regard to the evidence, the court deals with threshold question.  The court finds that the wife has a need of some $500 per week for spousal maintenance in order to support herself adequately. 

15. The husband accepts as uncontroversial in these proceedings that he has been contributing a voluntary sum towards his superannuation from the salary he receives from his employment.  The Court has considered the husband’s financial statement and his affidavit material.  The court finds the husband has an excess of income over expenses of some 450 to 500 dollars per week and has some capacity to pay spousal maintenance to the wife. 

16. Capacity to pay is assessed by determining the respondent’s surplus after having paid reasonable commitments but is not based merely upon income.  In the Full Court in Maroney & Maroney (2009) FamCAFC 45 at paragraph 56, it was held:

    The capacity to meet an order for interim spousal maintenance is not confined to income.  Once a party, such as the wife in this case, establishes an entitlement to interim spousal maintenance and such entitlement is quantified in accordance with that spouse’s reasonable needs, an order may be made, notwithstanding that the reliable spouse could only satisfy the order out of capital or borrowings against the capital asset. 

17. This is a case where the husband does not need to satisfy an order made by the Court out of the capital he might have available to him. Such payment could be satisfied out of the income that the husband derives from his employment with (employer omitted). The Court finds the threshold question answered when one considers section 72(1), which provides:

    A party to a marriage is liable to maintain the other person 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 the child of the marriage has not attained the age of 18 years, (b) by reason of age or physical or mental incapacity for appropriate gainful employment, (c) for any other reason, having regards to any other relevant matters set out in subsection 75(2). 

18. The court finds that the wife is not reasonably able to support herself adequately by reason of her physical or mental incapacity. Once the court finds the threshold question answered, the Court must consider section 74(1), which provides in proceedings with respect to the maintenance of a party to a marriage the Court may make such orders as it considers proper for the provision of maintenance in accordance with this part.

19. The court has considered section 74. Section 74, in part, deals with issues relating to the bankruptcy trustees and there is no bankruptcy trustee in this matter. In order to exercise its discretion under section 74, the Court must take into account matters referred to at section 75(2).

20. The matters to be taken into account are the ages and state of health of the parties.  The court is aware of the age of the parties.  There is a disparity of some four years, the husband being four years younger than the wife.  The court is conscious of the health needs of the parties, particularly that of the wife relating to her physical incapacity as a result of the motor vehicle accident and subsequent spinal fusion she has had a result of those injuries and otherwise issues relating her mental health, noting that in recent times she was suffering suicidal ideation.

21. The court notes the income, property and financial resources of each of the parties.  The court has regard to the real properties, the motor vehicles, what the court might describe as other chattels, the mortgages of the parties.  The court considers there to be no other financial resources of the parties.

22. The court is aware that there is no child of the marriage who has not attained the age of 18. The court has considered the commitments of the parties that are necessary to enable them to support himself or herself as detailed in the husband’s affidavit and the financial statement and the wife’s financial statement. The court is aware that neither party has a responsibility to support any other person. The court notes subject to section 75(3) the wife has some entitlement to a pension or benefit in the form of a Newstart. The court questions at least at this moment whether that allowance may ultimately translate into a disability support pension. At this moment it would appear on the face of the material the wife is entitled to receive a Newstart allowance.

23. The court considers where the parties have separated a standard of living in all the circumstances is reasonable.  It is reasonable that the parties remain domiciled in their current residence namely the wife in the Property E property and the husband in the property at Property M.  Where a payment is ordered by the court of the amount assessed by the court the parties will retain a standard of living that in all the circumstances is reasonable. 

24. The court must consider the extent to which the payment of maintenance to a party whose maintenance is under consideration would increase the capacity of that party by enabling that party to undertake a course of education or training or establish himself or herself in a business or otherwise obtain adequate income.  The wife has an inability to engage in employment related to her physical capacity and mental incapacity. 

25. It is not a case where if the husband pays the wife money by way of spousal maintenance she might go and re-train, doing such things as a TAFE course or otherwise university study.  The court must consider the effect of any proposed order on the ability of a creditor to a party to recover creditor’s debts insofar as that is relevant.  Should the court makes the order of the type it contemplates making the husband will be able to pay his debts if and when they fall due. 

26. The court considers the extent to which the wife has contributed to the income, earning capacity, property and financial resources of the husband.  The court is aware having regard to the affidavit material of the parties, as to the parties’ financial contributions during the course of their relationship and at the commencement.  This is not a case where the duration of the marriage has affected the earning capacity of the wife in these proceedings. 

27. The wife’s incapacity is largely as the result of a motor vehicle accident she suffered during the course of the parties’ relationship and then what the court might describe as acrimony following the breakdown of the parties’ relationship.  The payment of spousal maintenance is not made for the purposes of protecting the wife who wishes to continue her role as a parent.  There are no children under the age of 18 and no children of the parties’ relationship. 

28. The court is not aware that either party is cohabitating with any other person. The substantive proceedings are those brought pursuant to section 79 in relation to the property of the parties that have not concluded. It is for that reason the court declined to make an order for the sale of the caravan in circumstances where the wife seeks to retain and would otherwise render the orders sought by the wife pursuant to section 79 nugatory in the proceedings. The court has otherwise considered section 75(2)(n), (naa) and (na).

1. There is no child support assessment that affects the parties.  There are no other facts or circumstances that in the opinion of the court, the justice of the case require be taken into account.  The court is not on notice that there is any binding financial agreement or Part VIII AB financial agreement affecting the parties. 

2. The court notes the provision of subparagraph (3) of section 75 that provides in exercising its discretion under section 74 the court shall disregard any entitlement of the parties whose maintenance is under consideration to an income tested pension or benefit. Whilst the court has noted the wife’s entitlement it does not take it into consideration when dealing with the issue before the court having regard to section 75(3).

3. The Court notes the agreement to sell the shares in the (omitted) by the parties.  The Court has heard submissions to the effect that the parties had previously agreed the husband would at first instance pay the costs of the valuation of the properties at Property E and Property M and that despite this positon the orders made by my sister Judge Henderson did not reflect that position.

4. The Court understands the valuation costs to be something in the order of $2000. The Court is conscious of rule 15.11 of the Federal Circuit Court Rules that provides:

   Unless the Court otherwise directs, the parties are jointly liable to pay the reasonable remuneration and expenses of the Court expert for preparing a joint report. 

5. The Court has made, based upon the parties’ submissions, a direction about payment of the valuer’s fees, save and except that it was not an order. The Court notes that rule 15.11 does not provide for an order but simply a direction. The Court does propose to make an order that the wife reimburse the husband her share from the costs of the valuation from moneys she receives from the husband upon the sale of the shares. In other words, the husband must pay the valuer’s costs and will thereafter be reimbursed.

6. Having regards to those matters set out at section 72, 74, 75(2), the Court considers the following orders to be just and exercises its discretion to make orders as follows.

7. The Court adjourns any argument as to costs until 23 May 2016 at 9.30 for either a costs hearing or alternatively the setting of a timetable in respect of the parties’ application for costs. 

I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of Judge Myers

Date: 17 June 2016