CASEY & CASEY

[2011] FamCA 1062

FAMILY COURT OF AUSTRALIA

CASEY & CASEY [2011] FamCA 1062

FAMILY LAW – SPOUSAL MAINTENANCE - Application by the wife seeking interim spousal maintenance – Consideration of ss 72, 75 of the Family Law Act 1975 (Cth) – Where husband claimed incapacity to pay – Where the circumstances justify the making of an order in favour of the wife – Where the husband has the capacity to meet the wife’s need in the interim period.

Family Law Act 1975 (Cth) s 72

APPLICANT: Ms Casey

RESPONDENT: Mr Casey

FILE NUMBER: SYC 2113 of 2010

DATE DELIVERED: 6 December 2011

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Ryan J

HEARING DATE: 5 December 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Sweet

SOLICITOR FOR THE APPLICANT: Stojanovic Solicitors

COUNSEL FOR THE RESPONDENT: Mr Richards

SOLICITOR FOR THE RESPONDENT: Barkus Doolan Kelly

Pending further order

1. The parties forthwith do all acts and things necessary to sell Telstra shares owned by them to a value of $6,000.00, the proceeds of which are to be held in trust in their joint names and applied in accordance with these orders.

2. Upon the wife’s written confirmation that she may rent a property, the funds referred to in Order 1 shall be paid to the managing real estate agent as a bond for that rental.

3. In the event that the rental bond to be paid by the wife is less than $6,000.00 the balance of the Telstra share proceeds shall be paid to the wife as lump sum maintenance.

4. From when the wife enters into a lease to rent a property, the husband shall pay directly to the real estate agent the wife’s weekly rental (in advance) in an amount no greater than $400.00 per week.

5. From when the wife moves into her own rental property, the husband shall pay to her on a weekly basis the difference between the amount paid by him to the real estate agent pursuant to the above order and $450.00 per week.

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

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 2113 of 2010

Ms Casey

Applicant

And

Mr Casey

Respondent

REASONS FOR JUDGMENT

1. These reasons were delivered orally.

2. This is an application by Ms Casey (“the wife”) that her husband Mr Casey (“the husband”) pays her interim spousal maintenance.  During the hearing she abandoned her application for urgent spousal maintenance (s 77) in favour of her alternative application for interim periodic maintenance and a small lump sum.  Although the wife’s application sought $1,500.00 per week, when her counsel was asked to identify the evidence which indicated that the husband had the capacity to pay that amount; it was conceded that in relation to that issue the evidence was lacking.  Nonetheless, the wife did not amend her application to seek a lower amount and it is thus necessary to proceed on the basis that she asks the Court to order $1,500.00 per week.

3. It is the husband’s case that the wife’s application should be dismissed.  It is submitted on his behalf that the wife has not demonstrated that she is unable to support herself and, in the event the Court is satisfied she has demonstrated a need for spousal maintenance, the Court would be satisfied that the husband lacks the capacity to pay.

4. The nature of interim hearings means that at this stage the Court is unable to determine contentious matters.  By way of background, it would appear the following, unless otherwise identified, are generally uncontentious.

5. The husband was born in 1965 and is 45 years of age.

6. The wife was born in 1967 and is 43 years of age.

7. The parties married in 1986. 

8. There are three surviving children, none of whom is under 18 years.  They are B (born in 1988), M (born in 1990) and J (born in mid 1992).  The children reside with the husband in the former matrimonial home.  No one else lives with them.

9. All three children are in the paid workforce; albeit M also attends TAFE.  From the eldest to the youngest, they respectively earn $530.00, $520.00 and $492.00 per week.  Consistent with the approach agreed between the parties prior to separation, the husband does not ask that the children pay rent or board or contribute towards household expenses. 

10. This application is pressed by the wife on the basis that while the husband may feel a moral obligation to support their adult children he has no legal obligation to do so. Thus, his expenditure on their children is discretionary and should not have the same weight as his obligation to maintain her.  With this submission I agree.

11. The parties separated in January 2009.

12. At separation the wife left the former matrimonial home.  Initially, she lived between her mother’s and sister’s homes, and commencing March 2009 for a few months with a friend in Town N, north of Sydney. She then, for about 10-11 months, shared a rented property with a male partner at Town K.  When that relationship ended in June 2010 she again stayed briefly with her sister, then her mother, for about three weeks at the former matrimonial home and also lived with a girlfriend. 

13. For about the last six months the wife has lived with her boyfriend, Mr A, in a home unit owned by him.  An issue arose in the proceedings about the nature of the wife’s relationship with Mr A.  In her affidavit sworn in August 2011 she described him as a flatmate and said “[w]e are not in a relationship and I regard [Mr A] as a friend who has helped me out in the difficult times that I now face”.    

14. However, tendered in the husband’s case are extracts from a transcript in proceedings between the police and the wife.  The proceedings comprise criminal charges brought by police against the wife.  In those proceedings the wife gave evidence, as did the husband and Mr A.  In her evidence the wife repeatedly described Mr A as her boyfriend.  Mr A gave evidence that his relationship with the wife is romantic which he said is quite strong.  He acknowledged that they socialise together: as the matters at issue in those proceedings make plain they did on the night in question. 

15. Curiously, although the wife was by the time of that hearing (20 September 2011) living with Mr A, she gave a different address to the Local Court.  Not only is this inconsistent with the evidence she gave in these proceedings, but also with the information provided by her to Centrelink. The point being, that, on oath, the wife gave incorrect evidence about her address to the Local Court.  This is a matter to which I will return.

16. In any event, returning to the chronology, on 14 July 2010 the husband commenced property settlement proceedings in the Federal Magistrates Court.  In her Response to his application, in addition to property settlement orders, the wife applied for periodic maintenance at the rate of $1,000.00 per week.  Those proceedings, that is, the entirety of the litigation underway in the Federal Magistrates Court was subsequently transferred to this Court.

17. Before that occurred, a divorce order was pronounced and the parties were divorced on 21 June 2010.   

Applicable law

1. Section 72 sets the relevant provision in relation to the wife’s “right to maintenance”. Section 72 is set out below:

   (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).

   (2)  The liability under subsection (1) of a bankrupt party to a marriage to maintain the other party may be satisfied, in whole or in part, by way of the transfer of vested bankruptcy property in relation to the bankrupt party if the court makes an order under this Part for the transfer.

Has the wife established she is unable to adequately support herself?

1. The first question, which must be answered, is whether the wife has established that she is unable to support herself adequately by reason of one of the factors referred to in s 72(1)(a) – (c).

2. The wife is in receipt of a disability support pension and has been for a considerable period post-separation. Section 75(3) requires that I disregard this entitlement in assessing her capacity to support herself. The effect of this is that for these proceedings the wife does not have any income. Although there is a paucity of evidence about the basis upon which she was granted a disability support pension, in July 2009, her treating medical practitioner informed Centrelink he had diagnosed her with major depression which was an exacerbation of an existing condition. It is common ground that the wife, in 2009, was hospitalised suffering from severe depression. The wife continues to feel depressed in relation to which she attends a medical practitioner (Dr P) monthly. In addition, the husband gives unchallenged evidence that the wife suffered postpartum depression. He does not dispute that, prior to separation, the wife “was undoubtedly the parent primarily responsible for care giving to the children and the housework”, nor put in issue the wife’s evidence that from about 1992, and until the parties separated, she did not have paid employment.

3. Although it was submitted the Court would be troubled by the lack of evidence about the wife’s attempt to pursue paid employment post-separation I am not.  I am satisfied that for the purposes of this hearing, the evidence is sufficient to show that the duration of the marriage and the role undertaken by the wife therein has adversely affected her earning capacity.  When this is combined with the evidence about her mental health, I am satisfied that the wife need not put herself through the indignity of pursuing unskilled employment when her prospects of securing paid employment are so obviously compromised. 

4. During the years the parties cohabited, the husband was in fulltime employment in a family business which produced sufficient income to provide the parties with a comfortable standard of living.  For example, they acquired the former matrimonial home, accrued superannuation in both parties’ name but most notably, valuably the husband’s name, and enjoyed a standard of living which the husband describes as being “a reasonable standard but not an extravagant lifestyle”.  The parties were able to afford elective surgical procedures for the wife and for her to acquire, according to the husband, approximately 16 wardrobes of clothes.  Through an associated entity, they had an interest in another property on the Central Coast (now sold), acquired shares and were able to afford at least one trip to a casino in Melbourne and to gamble at a casino in Sydney. 

5. While the husband’s standard of living, post-separation, has continued in a somewhat similar vein, the wife’s has deteriorated significantly.  Her assets and liabilities are set out in her Financial Statement filed 12 August 2011.  This reveals that other than her interest in the former matrimonial home, the family business which is in the husband’s possession and/or control, the sale proceeds of the Central Coast property (held in trust for the parties jointly) and superannuation, she has an interest in a business which is said to be worth $5,000.00 plus household contents and jewellery of modest value.  She has a credit card liability of about $1,000.00 and, in effect, until the parties’ property settlement is achieved no assets at her disposal which could be used to provide her with an appropriate standard of living.

6. It was strongly submitted on the husband’s behalf that the wife and Mr A cohabit, the financial consequences of which are that the wife is able to support herself.  However, Mr A became unemployed in July 2011 and has been unable to find further employment.  He owns the unit in which he and the wife reside and has permitted her to live there on the basis that she pays $50.00 per week for expenses and helps out with groceries, cooking and cleaning.  As was mentioned earlier, they socialise together and are in a romantic relationship.  Mr A has a motor vehicle which on at least one occasion, and I infer probably more often, the wife has been able to drive.  This is not the same as having her own car.

7. I agree with counsel for the husband that there should have been filed in the wife’s case an affidavit from Mr A which sets out his financial circumstances.  However, while in some circumstances this omission may have significantly adversely affected an applicant for spousal maintenance case, here it has not been catastrophic to the wife.  This is because she wants to live independently of Mr A, and only commenced living with him because she could not cope with living with her mother and was unable to afford a place of her own.  Even were I persuaded that the wife and Mr A are in a de facto relationship (which finding it is unnecessary to make), the short duration of that relationship means that the wife is not entitled to claim maintenance from him under the Act.  I make similar findings in relation to the wife’s relationship with her partner with whom she cohabited at Town K.  Thus, whilst I am satisfied the wife’s romantic relationship with Mr A may continue, I am also satisfied it is not her intention that they continue to cohabit and that in order to live independently she requires spousal maintenance.

8. The wife seeks to obtain a small three bedroom home in the Western Sydney area.  I accept her evidence that she would incur rental of about $450.00 per week and that a bond of between three and six months in advance would be required.  Although hopeful that the children will visit her and stay “for some period”, there is no evidence that this is likely and thus I am not satisfied it is reasonable that she obtain a three bedroom property.  At question 60 of her Financial Statement she identifies her average weekly expenses (excluding rent) at $460.00.  This is considerably less than the $712.00 per week which the husband says he incurs and which he says is reasonable.  Thus, taking a broad-brush approach to the evidence, I am satisfied the wife has established a need for a rental bond of at least three months and a periodic payment of between $870.00 and $900.00 per week. 

Does the husband have the capacity to pay?

1. Turning then to the husband’s capacity to pay.  The husband’s evidence is found in his affidavit and Financial Statement, both filed on 30 November 2011.  This evidence shows that he has a total average weekly income of $3,596.00.  This comprises salary of $2,564.00 and income from a family business of $1,032.00.  He says he has total personal expenditure of $4,094.00, the details of which are set out in his Financial Statement.  This includes $448.00 per week for the parties’ adult children.  The $448.00 includes $110.00 per week as part of a long-established savings plan set up for the children.  The point being this was a savings plan which the parties agreed long before separation would be established for the benefit of their children.

2. The husband is concerned that if he stops contributing to the savings plan it may lose its tax-exempt status and have other financial consequences.  Nonetheless there is no doubt the husband may, at his election, stop paying the $110.00 per week towards the savings plan.  It may be if it is to the children’s advantage that that plan continues, that between them, the children decide to pay the weekly payment.  The evidence of their respective salaries would suggest that this is easily within their financial capacity.

3. It was emphasised by counsel for the husband that, even taking into account that $448.00 which is applied to the parties’ adult children, his income still exceeds his expenses.  Presently, taking into account the monies paid towards the children, his expenses exceed his income by $498.00 per week.  What is not apparent is the duration over which his expenditure has exceeded his income.   In terms of borrowings, there is no evidence for example of default on the mortgage or that there has been a drawdown in order to meet the shortfall.  There is no evidence that it has been necessary for him to sell assets in order to meet the shortfall.  He has a credit card liability of $1,600.00 which equates to 3.2 weeks of the expenditure over and above his weekly income.  The point which flows from this is that it would seem the husband is able to organise his financial affairs so that when his expenditure does exceed income this does not cause him financial hardship. 

4. Plainly on the information that is presently presented, when measured against the extent of his borrowings, namely the $1,600.00 on credit cards it would be a matter of only a couple of weeks within which the husband might be able to bring his financial circumstances back into alignment.  However, one can not ignore that the husband also continues to receive superannuation at $520.00 per week, and he has the benefit of a car which, although predominantly used for work purposes, is valued at $369.00 per week and is of some benefit to him.

5. He has the capacity to pay his tax at $1,454.00 per week, the parties’ mortgages at $1,000.00 per week, plus necessary insurances and rates which rounded out all comes to about $2,810.00.  He then has the other liabilities referred to, as well as his own average weekly expenses at $712.00.  It is not for me to give the husband financial advice, but it is clear that he has at his disposal, even when items such as tax, mortgages, insurance and rates are taken into account, a considerable weekly sum which he can apply in part to support his wife. 

Conclusion

1. In my view, the appropriate amount he should pay is $450.00 per week.  The husband is understandably anxious that this may be used by the wife to gamble.  Produced in his case are her bank records which show on the identified days the wife withdrawing her disability benefit at gaming venues.  It would be wrong to require the husband to pay money to the wife if the Court was certain that those funds would be lost gambling.  Nor is it my intention that the husband financially support the wife whilst she cohabits with her romantic partner.

2. The wife, however, does not wish to remain resident living with Mr A.  During addresses, the wife agreed that spousal maintenance could be paid in a way which would enable the Court to be confident that spousal maintenance would be used to enable her to rehouse.  This would involve the payment of a bond directly to a real estate agent, the rental to that agent, and any extra to the wife.  The probability is that this would give the wife a small sum in her hands towards her necessary expenses.

3. In the husband’s Financial Statement there is disclosed Telstra shares which have a current value of $6,000.00.  These, I understood from exchanges between the bench and the bar table are assets in which both parties have an interest.  Those shares provide an obvious source of funds for the wife’s bond money.  For a person in her position, namely on a disability support pension, it may be that she will experience difficulty securing rental accommodation.  An ability to provide a bond of three months will probably make it easier for her to secure a place in her own right. 

4. At around $400.00 per week rent, the proceeds of the Telstra shares will provide her with an approximate sum for a 15 week down payment as a bond.  Otherwise the husband will be ordered to pay up to $400.00 per week directly to the rental agent, and then the difference between the amount actually paid for her rent, and $450.00 per week directly to the wife. 

1. I earlier alluded to the duration of the parties’ marriage, the role undertaken by the wife as a homemaker and parent.  For these proceedings it is sufficient to observe that the wife has demonstrated she has made a not-inconsequential contribution to the matrimonial assets.

1. For these reasons I am satisfied that the orders I make today pending further order are appropriate.

I certify that the preceding thirty seven (37) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Ryan delivered on 6 December 2011.

Associate:     

Date:              9 February 2012