Chilcott v Freeman
[2011] TASSC 30
•24 June 2011
[2011] TASSC 30
COURT: SUPREME COURT OF TASMANIA
CITATION: Chilcott v Freeman [2011] TASSC 30
PARTIES: CHILCOTT, Kylie Jean
v
FREEMAN, James Alistair David
FILE NO/S: 752/2008
DELIVERED ON: 24 June 2011
DELIVERED AT: Hobart
HEARING DATE: 30, 31 May, 2 June 2011
JUDGMENT OF: Tennent J
CATCHWORDS:
Family Law and Child Welfare – De facto relationships – Other matters – Application for leave to commence proceedings – Relevant principles.
Relationships Act 2003 (Tas), ss36, 37, 38, 46 and 47.
Property (Relationships) Act 1984 (NSW), s18(2).
Relationships Act 2008 (Vic), s43(2).
Property Law Act 1958 (Vic), s282(2).
Kemp v French [2010] NSWSC 971; Giller v Procopets [2008] VSCA 236; Whitford v Whitford (1979) FLC 90-612; Althaus v Althaus (1982) FLC 91-233; Hedley v Hedley (2009) FLC 93-413; Hall v Hall (1979) FLC 90-679 referred to.
Aust Dig Family Law and Child Welfare [503]
REPRESENTATION:
Counsel:
Applicant: W A Ayliffe
Respondent: M Foster
Solicitors:
Applicant: PWB Lawyers
Respondent: Murdoch Clarke
Judgment Number: [2011] TASSC 30
Number of paragraphs: 64
Serial No 30/2011
File No 752/2008
KYLIE JEAN CHILCOTT v JAMES ALISTAIR DAVID FREEMAN
REASONS FOR JUDGMENT TENNENT J
24 June 2011
On 25 August 2008, Kylie Chilcott ("the applicant") filed an originating application in this Court by which she sought an order pursuant to the Relationships Act 2003 ("the Act"), s40, for the adjustment of property interests as between her and James Freeman ("the respondent"). On 8 February 2011, she filed an interlocutory application by which she sought to amend the originating application to add a claim for maintenance. The parties have treated that application as an application for leave to commence maintenance proceedings pursuant to the Act, s38(2). It is that application to which these reasons relate.
The applicant and the respondent were formerly in a personal relationship as that term is defined in the Act. They separated early in February 2008. There was no dispute that the duration of the relationship exceeded two years. While there was a dispute between the parties as to the date upon which their personal relationship began, it is unnecessary to make a finding as to the precise date it commenced. The relationship was a longstanding, albeit unconventional, one. There are two children of the relationship, Jasmine Rose Chilcott born 19 December 1997, and Lily Jean Chilcott born 10 January 2000.
Relevant provisions of the Act
The Act, s36, provides that a partner to a personal relationship may apply to a court for an order for the adjustment of interests with respect to the property of either or both of them, or for the granting of maintenance, or both. The Act, s37(1), provides that the court is not to make an order unless the parties have been in a personal relationship for at least two years.
The Act, s37(2), provides:
"(2) A court may make an order if satisfied that –
(a) there is a child of the partners referred to in the application; or
(b) the applicant –
(i)has made substantial contributions of the kind referred to in section 40(1) for which the applicant would otherwise not be adequately compensated if the order were not made; or
(ii) has the care and control of a child of the respondent –
and the failure to make the order would result in serious injustice to the applicant."
Where a personal relationship has ended, any application for adjustment of property interests or maintenance is to be made before the expiration of two years from the date the parties last ceased to be in a relationship (see s38(1)). However, s38(2) gives the Court a discretion to grant leave to a party to apply for property adjustment and/or maintenance after that two year period has expired. It may grant such leave "if greater hardship would be caused to the applicant if that leave were not granted than would be caused to the respondent if that leave were granted."
The Act, s46, provides that, subject to Part 5 Division 3, a partner to a personal relationship is not liable to maintain the other partner, and that other partner is not entitled to claim maintenance. Section 47(1) then goes on to provide that a court may make an order for maintenance if satisfied that a partner is unable to support himself or herself adequately because:
"(a) the partner's earning capacity has been adversely affected by the circumstances of the personal relationship; or
(b) of any other reason arising in whole or in part from the circumstances of the personal relationship."
A claimant for maintenance must therefore first satisfy the Court that they are unable to support themselves adequately for a particular reason. That reason must relate to the circumstances of the personal relationship. If such a reason is established, the Court then has a discretion as to whether to order the payment of maintenance. That discretion is to be exercised having regard to the factors identified in the Act, s47(2). Those factors are:
"(a) the income, property and financial resources of each partner (including the rate of any pension, allowance or benefit paid, payable or entitled to be paid to either partner) and the physical and mental capacity of each partner for appropriate gainful employment;
(b) the financial needs and obligations of each partner;
(c) the responsibilities of either partner to support any other person;
(d) the terms of any order made or proposed to be made under section 40;
(e) any payments provided for the maintenance of a child in the care and control of either partner;
(f) whether either partner has the care and control of a child of the partner who is under 18;
(g) the age and state of health of each partner;
(h) the standard of living that is reasonable for each partner in all the circumstances;
(i) the extent to which the payment of maintenance to the partner whose maintenance is under consideration would increase the earning capacity of the partner by enabling the partner –
(i)to undertake a course of education or training; or
(ii)to establish a business; or
(iii)otherwise to obtain adequate income;
(j) the extent to which the partner whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other partner;
(k) the length of the personal relationship;
(l) the extent to which the personal relationship has affected the earning capacity of the partner whose maintenance is under consideration;
(m) any other fact or circumstances the court considers relevant."
If a claimant is unable to establish that they have a reason relating to the circumstances of the personal relationship as to why they cannot support themselves adequately, then the application for maintenance will fail.
The law applicable to an application for leave
Both counsel submitted that the discretion to be exercised in this matter should be guided by decisions of the Family Court of Australia in relation to the Family Law Act 1975 ("the FLA"), s44(3) and (4). Section 44 deals with the period within which certain ancillary proceedings may be instituted after a divorce of a married couple. It also provides that a party may seek leave to bring proceedings outside that period. Section 44(4) provides:
"(4) The court shall not grant leave under subsection (3) or (3A) unless it is satisfied:
(a) that hardship would be caused to a party to the relevant marriage or a child if leave were not granted; or … "
The wording of the FLA, s44(4), and the wording of the Act, s38(2), are obviously different. The former prohibits a court from granting leave unless it is satisfied that there would be hardship to the applicant. The latter does not require a court to be satisfied simply that there would be hardship to the applicant. It presupposes that there may be hardship to a respondent if leave were granted, and requires the court firstly, to find that there would be hardship to the applicant if leave were not granted, and secondly, to find that that hardship would be greater than any flowing to the respondent if leave were granted. It might be argued the test is more extensive than that under the FLA. The wording of s38(2) also makes it clear that leave will not automatically be granted if a court is satisfied as to the matters referred to. A court retains a discretion to grant leave even if satisfied as to those matters. The Act however does not identify any specific matters which are to be taken into account for the purpose of the exercise of a court's discretion as to leave.
Neither counsel referred to any case in this Court in which s38(2) had been considered. An examination of the database of decisions maintained by the Court suggests that, while the section has been referred to in some cases with which the Associate Judge has dealt, those cases did not involve an examination of any relevant authorities. His Honour considered what might be said to be general principles relating to any application for leave to extend time, namely whether the applicant had a reasonable explanation for their delay, whether the applicant had a viable case to pursue, and whether there was likely to be prejudice to the respondent if leave were granted.
There do not appear to be any cases in respect of the equivalent section in the legislation which preceded the Act in this State. Neither counsel made any reference to cases from other Australian states in which legislation with the same or similar wording to that in the Act had been considered. For example, the Property (Relationships) Act 1984 (NSW), s18(2), gives a court a discretion to grant leave to bring proceedings out of time "where the court is satisfied, having regard to such matters as it considers relevant, that greater hardship would be caused to the applicant if that leave were not granted than would be caused to the respondent if that leave were granted". The wording of that section is almost identical to that in s38(2).
The New South Wales courts have considered s18(2) a number of times. In those cases, no comparison has been made with the FLA, s44(4), the courts confining their consideration to the section itself. For example in Kemp v French [2010] NSWSC 971, Hallen AsJ said at par[13]:
"In Selmore v Bull[2005] NSWCA 365; (2005) 34 Fam LR 488, Mason P, with whom Tobias JA and Brownie AJA agreed, said that it was not mandatory for an applicant for leave under the section to explain the delay in commencing proceedings under the Act (at [13]). His Honour said that what is required to be demonstrated is a preponderance of hardship to the plaintiff if leave is not granted than will be caused to the defendant if leave is granted. If such preponderance is shown, it does not automatically follow that leave is to be provided. There remains a residual discretion: see Beavan v Fallshaw (1992) 15 Fam LR 686; also see, Henry v Ford (No 2)[2009] NSWSC 1254 at [9] per White J."
In Victoria, the equivalent provision to s38(2) is found in the Relationships Act 2008 (Vic), s43(2). It replaced the Property Law Act 1958 (Vic), s282(2). Both provisions contain the same or similar wording to s38(2). Victorian cases (see Giller v Procopets [2008] VSCA 236) talk of a consideration of a "comparison of hardships". Ashley JA, although in the minority in that case, said at pars [59] – [61]
"59 The specific focus of s 282(2) is, as I have said, upon comparative hardships. According to the appellant’s written submissions, consideration of hardships ‘would take place in the context of a determination that an adjustment in favour of the appellant would be just and equitable in the event that leave was granted’. In other words, the Court was invited to determine that the appellant’s claim would yield an order for adjustment in her favour. If it did so, hardship (exceeding any hardship to the respondent) would be established.
60 In this case, by contrast with many others, the evidence bearing on the merits of the s 285 claim was before the Court which had to consider the s 282(2) application. It was not a case in which the applicant for leave asserted an entitlement which, although disputed, remained a question for resolution in respect of which the applicant should not be denied her (or his) day in Court. If, on evaluation of all the evidence, a claim under s 285 could not be established, then the s 282(2) application would necessarily fail. There would be no hardship to the appellant to be balanced out against any hardship to the respondent. If an order for adjustment could be justified, even for a small amount, exercise of the residual discretion would be required. In the latter case, the explanation, if any, for delay in commencing the application could be considered as one item of relevance.
61 In the particular case, then, before resolving the s 282(2) application, the merits or otherwise of the s 285 claim need to be considered."
A number of Victorian cases have also considered the importance or otherwise of there being an explanation for delay. As to that, Neave JA said in Giller's case at par[309]:
"309 In Lockett v Duckett, Cummins J referred to a divergence of view as to whether it was necessary for an applicant to provide an explanation for not having commenced proceedings earlier. In Harris v Harris, Gillard J said that this was unnecessary, but Cummins J preferred to follow the approach of Warren J (as she then was) in McGibbon v Marriott. Her Honour said that the applicant should provide a reasonable explanation for the delay, but that:
'the standard is not a rigorous or high standard of satisfaction, but rather a standard of reasonableness; that is, a reasonable explanation, allowing, in particular, for the emotional and human factors involved in domestic arrangements and the complex of factors involved in such arrangements.'
I respectfully agree with that view."
As to the cases to which counsel referred decided in relation to the FLA, s44, the principal case to which reference was made was Whitford v Whitford (1979) FLC 90-612. Their Honours, Asche and Pawley S JJ and Strauss J said at 78,144 – 78,146:
"Thus, on an application for leave under sec 44(3), two broad questions may arise for determination. The first of these is whether the Court is satisfied that hardship would be caused to the applicant or a child of the marriage if leave were not granted. If the Court is not so satisfied, that is the end of the matter. If the Court is so satisfied, the second question arises. That is whether in the exercise of its discretion the Court should grant or refuse leave to institute proceedings.
…
The hardship referred to in sec 44(4) is the hardship which would be caused to the applicant … if leave were not granted … The requirement, that the Court must be satisfied that hardship would be caused if leave were not granted, implies that it must be made to appear to the Court that the applicant would probably succeed, if the substantive application were heard on the merits. If there is no real probability of success, then the Court cannot be satisfied that hardship would be caused if leave were not granted.
…..
If the Court is satisfied that hardship would be caused if leave were not granted, the Court may exercise the discretion which is conferred upon it by sec 44(3) to grant leave or it may refuse such leave. Section 44(4) inhibits the granting of leave unless the requisite case is made out, but it does not provide that leave must be granted if the Court is satisfied that hardship would be caused.
The determination how this discretion should be exercised, must depend on the facts of the particular case. Due weight must be given to the expressed legislation intendment that ordinarily, proceedings should be commenced within a year from the date of the decree nisi, and the general policy of the Act which appears from sec. 44(3) and sec. 81 that financial relationships between the spouses should, wherever possible be brought to finality within a reasonable time after the dissolution of the marriage. Hence, such matters as the length of the delay, the reasons for the delay and prejudice occasioned to the respondent by reason of the delay, and the strength on the merits of the applicant's case, and the degree of the hardship which would be suffered unless leave were granted, are matters affecting the exercise of the discretion. These matters are not necessarily the only ones.
On the other hand, sec. 44(3) and 44(4) point to the conclusion that the legislature intended to confer power on the Court to grant leave to institute proceedings in order to avoid hardship. Having regard to the nature of the jurisdiction which this Court exercises, this power should be exercised liberally in order to avoid hardship, but nevertheless in a manner, which would not render nugatory the requirement that proceedings should be instituted within a year from the decree nisi."
In Althaus v Althaus (1982) FLC 91-233, Evatt CJ said that, for the purpose of an application for leave, a detailed hearing on the merits was not required. Her Honour said:
"The exercise is to determine whether there is a reasonable claim to be heard. That is the essence of the inquiry into whether hardship will be suffered by denying the applicant the right to litigate that claim."
In Hedley v Hedley (2009) FLC 93-413, the Full Court of the Family Court found that a federal magistrate had made an error in that he had treated the matter before him as one which required determination of the wife's entitlement under s79 concurrently with the s44(3) application, rather than one in which he focused on the issue of hardship to the wife if unable to commence proceedings. In Hall v Hall (1979) FLC 90-679, the Full Court referred to the need to establish that there was "a proper claim to be heard". The terminology used varies. However, the underlying tenor of these authorities is not, in my view, that, as a starting point in an application for leave, a court should effectively determine on the merits if a prospective claim for maintenance will succeed. The court will need to make an assessment of the chances of success of a prospective claim. It clearly must do so because it would be futile to give leave in circumstances where the prospective claim had no real chance of success. It is likely the court would need to be satisfied that a prospective claim has reasonable prospects of success.
Notwithstanding those comments, I am not persuaded that the decisions of the Family Court are necessarily determinative of the type of application this Court is presently dealing with. The more appropriate cases to which regard should be had are those dealing with comparable legislation. Having said that however, the underlying principles are very similar. It would seem to me that the first step is, in the words of Ashley JA in Giller's case "a comparison of hardships". If the Court is satisfied that there would be greater hardship for the applicant if leave were refused than would flow to the respondent if it were granted, the Court then needs to consider the matters ordinarily affecting a court's discretion to grant leave.
A comparison of hardships will necessitate a consideration of hardship to the applicant if she is not granted leave. That in turn will necessitate a consideration of the merits of her claim for maintenance.
Merits of the applicant's claim for maintenance
Three issues arise when considering the merits of any claim for maintenance by the applicant. These are:
(a)would the applicant be able to satisfy the Court that she is unable to support herself adequately;
(b)if so, would the applicant be able to satisfy the Court that that inability arises because of a reason related to the circumstances of the parties' personal relationship; and
(c)if so, a consideration of the exercise of the Court's discretion by reference to s47(2) factors.
Would the applicant be able to satisfy the Court that she is unable to support herself adequately?
At the time of hearing, the applicant was aged 40, having been born on 1 April 1970. The respondent was aged 45, having been born on 14 September 1965. The applicant resided in a property at Churchill Road, Taroona ("the Taroona property"). The registered proprietor of the Taroona property is a company called Adagio Pty Ltd. The respondent is the sole director and shareholder of that company. The Taroona property was purchased late in 1998. The applicant moved in there shortly after purchase, and has lived there for most of the time since. The title to the Taroona property is subject to a mortgage. The amount owed on the mortgage at about the time of separation of the parties was approximately $135,500. It continued to reduce after that date and had reduced to approximately $122,400 by March 2009. At that point, an additional advance was obtained by the respondent in the amount of $120,907.33, increasing the mortgage to $243,301. The mortgage loan was further increased by the respondent in October 2009, and then March 2010, resulting in a balance of $350,000. The mortgage was subsequently reduced to about $24,000 as a consequence of the subdivision of the Taroona property and the sale of two resulting vacant blocks of land. The property is now valued at a little over $350,000. The respondent has at all times made the repayments in respect of that mortgage and continues to do so.
The respondent resides in a property at 334 Davey Street, Hobart ("the Davey Street property") purchased in 2009 after the parties separated. Part of the reason for the increase in the mortgage on the title to the Taroona property was an advance to assist the respondent with the payment of a deposit on the Davey Street property. That property has an agreed value of $1,550,000.
The applicant is a registered nurse and has worked in that capacity to varying degrees throughout the entirety of the parties' relationship. The respondent is a medical practitioner. The parties' children are now aged 13 and 11. The eldest lives full-time with her father and stays with her mother when she wishes to. The youngest child lives week and week about with each parent. Both children attend private schools. The fees are paid by the respondent but with funds sourced from his family.
The applicant currently works casually as a nurse and conducts an interior design business. It is the position of the respondent that the applicant has the capacity to work more extensively at both roles and that, if she did so, her income would rise, and there would be no question about her capacity to support herself adequately.
As to the term "adequately", in the same context this has been considered by reference to the FLA. In Whitford's case (supra) at 78,145, the court said in relation to the term:
"Similarly a party in relatively affluent circumstances may demonstrate an entitlement to maintenance because such party cannot support herself or himself adequately. The word 'adequately' in sec.72 means much the same as fittingly or suitably, and what is adequate depends on all the circumstances of both parties."
The term should therefore not be interpreted as meaning, for example, just enough to meet basic expenses.
The applicant is employed as a casual nurse at the Hobart Private Hospital. She has also done some work at the Hobart Day Surgery. As a casual employee, she has no guaranteed hours of work. The system is that the hospital maintains a diary. Casual workers indicate in that diary when they either are or are not available to work. The hospital then allocates available hours to the staff who have indicated availability on particular days. Staff are generally allocated to work a particular shift. A full shift is eight hours. However it is not the case that a casual nurse will necessarily work a full shift each time she is allocated one, because at times staff are simply not required.
The applicant produced pay slips from employment at both the Hobart Day Surgery and the Hobart Private Hospital. They were tendered. Counsel for the respondent, when he cross-examined the applicant, put to her a typed summary of what he said her pay slips disclosed were the hours she worked at the Hobart Private Hospital during the period 28 June 2010 to 13 December 2010. That summary indicated that over a period of 22 weeks, the applicant worked an average of 13.82 hours per week. Counsel for the respondent cross-examined the applicant at some length about those hours, and her lack of written applications for permanent employment at the Hobart Private Hospital, and other hospitals and day surgery facilities in Hobart. The evidence of Ms Sarah Bird from the Hobart Private Hospital suggested there had been few available permanent part-time nursing positions at the hospital in the period the applicant had been there.
Counsel for the respondent submitted that it was incumbent upon the applicant to demonstrate that she had made all reasonable efforts to obtain as much work as she could and that, since she had not demonstrated she had done that, her application must fail. In making that submission, it seems to me counsel had misapprehended the case for the applicant. The applicant's position is that she is unable physically to work longer hours as a nurse than she currently is by reason of her physical health, and that that position may worsen as she gets older. She wishes to be able to concentrate on building up her interior design consultancy business so that when the point comes when her nursing capacity becomes significantly limited, she will have the interior design work to fall back on.
The applicant obtained her interior design qualifications at TAFE during the course of the parties' relationship. She then set up her own business, called ID3. She now operates as an interior design consultant through that business. She produced copies of invoices issued in respect of work done in 2010/2011. Again, counsel for the respondent produced to the applicant in cross-examination a typed summary which he suggested represented an analysis of the invoices. He later made the same type of submission as he had in relation to nursing work, namely that the applicant had a capacity to earn more income from this source which she was not utilising.
While at the end of the day it made little difference to the figures upon which counsel for the respondent based his cross-examination and later submissions, it should be pointed out that the typed documents which he put to the applicant as being accurate summaries of her hours worked from both areas of employment were not accurate. The first contained an incorrect date and an incorrect calculation of the period to which it referred. The second contained calculations which could not have been produced by reference to the invoices tendered. The summaries also made no reference to income earned or hours worked by the applicant at the Hobart Day Surgery during part of the summarised period. It can also be seen from the payslips tendered that, for the most part, the applicant worked at times which maximised the rate of pay she would receive for the hours worked by working over parts of weekends. Her year to date gross income from the Hobart Private as at 26 December 2010 was $16,999.12. As to invoices rendered from the interior design work in the period 1 July 2010 to 31 December 2010, these totalled $13,100.
The applicant's gross income for the first half of the current financial year therefore appeared to be just on $30,000. By reference to her financial statement filed 16 February 2011, her estimated gross weekly income was $779. That did not include child support which she said she was not then receiving. She is now receiving child support of $532 per month which increases her estimated weekly income to $901. The applicant's estimated expenditure according to her financial statement was $856 per week. Two adjustments needed to be made to that. One was the removal of an allowance for superannuation of $36,and the other was the inclusion of an extra $65 for car repayments. The revised total was $885.
The applicant was cross-examined about the fact that she had claimed some of her telephone expenses and her car expenses as deductions on her taxation return in the last financial year. The applicant did not dispute that. The cross-examination seemed to overlook the fact that, deductible expenses or not, the expenses still needed to be met. Since the gross income to which the claimed deductions related also appeared in the financial statement, it seemed reasonable to include the expenses.
While on the face of her financial statement the applicant appeared to have a surplus of income over expenses of some $16 per week, a number of things should be noted. The claimed expenses were generally modest. There was no allowance for holidays. If the child support amount is removed, there would be a significant shortfall of income over expenses. Child support has not been a consistent source of income for the applicant. Further, child support payments are, in one part, dependent on the disparity between the income of the applicant and the respondent. The respondent says his income will reduce from July 2011. The likelihood is that therefore any level of child support will also drop.
In or about April 2006, the applicant suffered an injury to her neck. She was diagnosed as having a disc protrusion impinging on her spinal cord. The following month, the applicant underwent surgery. A disc was removed and a spinal fusion performed. The applicant described her working situation as at 25 February 2010 in the following terms:
"I currently work part-time as a registered nurse at the Hobart Private Hospital. I work two or three 8 hour shifts per week. On average my net pay varies between $800.00 to 1,800.00 per fortnight. This depends on how much work is available. Lists are often cancelled during the school holidays when surgeons themselves take holidays. In the last financial year I earned about $23,000.00 after tax. This year I anticipate my income will be about $30,000.00 net. I supplement this income through ID3, however that income is not as reliable as is nursing and my primary consideration is the children's care. I need to nurse to survive as I find it difficult to support myself and the children with my limited business income from ID3. ID3 has either just broken even each year, or made a loss.
...
Since my neck surgery I have had to maintain my fitness and my strength to assist my neck injury; as I still suffer from pain at times. My recovery was disappointingly slow. Since our separation and due to my neck injury I can only do limited periods of nursing and many other activities. It is foreseeable that I will require further surgical intervention in the future and will not be able to bedside nurse long term.
I find three (3) consecutive days nursing is my limit physically. I do not require regular medication to manage my current episodes of pain and try to manage discomfort through strengthening exercises prescribed by my physiotherapist, oral medications when necessary and rest."
An affidavit by Dr Timothy Stewart was read into evidence on behalf of the applicant without objection. Attached to that affidavit was a report. Its contents, that is the opinions expressed and the qualifications to express them, were not challenged. The reported occupational history on which Dr Stewart based his opinion was that the applicant did not normally work more than two nursing shifts consecutively. He observed that the applicant was in a position where she had symptoms in her neck which constantly reminded her of the surgery she had had. He said that it was well recognised that patients who had had such surgery ran the risk of having problems with discs above and below where the fusion was performed. He noted the applicant was physically fit and had excellent pain management skills. If she experienced any aggravation of her pain, she knew that if she rested or changed posture, the impairment would ease. Dr Stewart also said:
"From an employment perspective it would be logical for Ms Chilcott to move into aspects of nursing that she knows are within her capacity. She would be ill-advised to take on a role that would involve a substantial amount of manual handling – in particular anything that requires her being in a fixed position for prolonged periods of time, for example, a theatre sister ... Her current position in the day surgery unit at the Hobart Private Hospital is appropriate."
The extent therefore of the applicant's nursing work appears to be within the range Dr Stewart considers appropriate for the nature of the health difficulties from which the applicant suffers.
As to the applicant's work in interior design, the applicant indicated that her business was gained mainly through word of mouth. She wanted to be able to advertise and thereby hopefully expand her business. While the respondent's counsel submitted that the hours which appeared to have been demonstrated as being devoted to this business seemed very low, realistically his calculations were based on the proposition that the applicant worked every single week of the period under consideration. They did not allow for time out, for example during school holidays when one or both children might be with her, or during the Christmas break. The applicant quite clearly does not have the financial resources to meet high costs associated with child care which might enable her to work during these sorts of periods.
As I have already said, based on current figures, the applicant appears to have an excess of income over expenditure of some $16 per week, provided that she continues to receive the current level of child support. Since the level of any child support the applicant might receive is dependent on the disparity between her income and that of the respondent, and, according to the respondent, his income is to drop from July, it is likely that the applicant's income will not exceed her expenditure. Further, the applicant's expenditure claims are in any event modest. They also do not include any costs associated with maintaining her own home, such as rates, insurance and a possible mortgage.
In summary, the applicant is working part-time in two areas, that is as a registered nurse and in her own interior design business. I accept, having regard to the evidence of Dr Stewart and the applicant, that as far as nursing is concerned, the applicant is probably working to her physical capacity and that, within the confines of her available time, she is also endeavouring to build her business appropriately. In my view, on the basis of the evidence as it stands, the applicant may very well be able to satisfy a court that she is unable to support herself adequately.
Would the applicant be able to satisfy the Court that any inability to support herself adequately arises because of a reason related to the circumstances of the parties' personal relationship?
There is evidence to the effect that the applicant worked full-time until the birth of the parties' first child, and that, thereafter, she had periods where she did not work, but devoted herself to the full-time care of the children. There were lengthy periods when the respondent was not living in Australia, but was living and working or holidaying overseas. The applicant, during those periods, cared for the children alone. There were other periods where the applicant moved interstate to be with the respondent while he worked in various places. As a consequence of these factors, the applicant has not maintained consistent full-time work such as to enable her to develop and establish a career in nursing.
The applicant's present reduced physical capacity to seek work as a nurse to a greater extent than she is, is primarily as a result of an injury to her neck occasioned during the course of the parties' relationship. The applicant alleged that the injury was caused when the respondent "shoved" her during the course of an argument. The respondent denies the allegation, and says that it occurred when the applicant threw a cordless phone when she became angry. The applicant did not at the hearing of this matter seek to prove her allegation, nor rely on her allegation that the respondent was the direct cause of the injury.
The position of counsel for the respondent was that, in effect, this injury had nothing to do with the circumstances of the personal relationship of the parties and therefore, if it was the cause, either wholly or partially, of the applicant's inability to support herself adequately, it was not a reason which could be relied on by the applicant to satisfy the requirement of the Act, s47(1). No authority was relied upon to support this very restrictive interpretation of the section. The section requires that the Court be satisfied that the inability to support is because either earning capacity has been adversely affected by the circumstances of the parties' relationship, or because "of any other reason arising in whole or in part from the circumstances of the personal relationship". In my view whether or not the respondent directly caused the injury is irrelevant. By reference to pars 79-80 of the affidavit of the applicant sworn 25 February 2010, and par 36 of the affidavit of the respondent sworn 11 March 2010, I can be satisfied that, as a result of finding an email or emails on the respondent's computer which suggested or showed a relationship being conducted by him with a woman in the Solomon Islands at a time when the applicant believed she had a continuing relationship with the respondent, the parties' argued, and the applicant threw a cordless phone. If indeed that was the cause of the injury, then it arose either in whole or in part from the circumstances of the parties' relationship at that particular time.
The applicant has been able to enhance her earning capacity as a result of undertaking interior design training during the parties' relationship. This was done prior to the injury which has resulted in the restriction on nursing work. It may be that that training will in the future enable the applicant to support herself adequately.
However, at the present time, I am of the view on the evidence as it stands, that the applicant is likely to be able to satisfy the Court that her inability to support herself adequately is because her earning capacity has been adversely affected by the circumstances of the relationship as referred to in par [40] of these reasons, and because of another reason arising from the circumstances of the parties' relationship, namely the neck injury.
Section 47(2) factors
There remains a discretion to be exercised by the Court even having regard to the conclusions in the foregoing paragraphs. This is to be exercised having regard to the factors set out in s47(2). I do not propose to deal with these in any detail. I note however that the material before the Court discloses that the applicant has made a contribution to the assets under the control of the parties during the course of their relationship, she is likely to succeed in obtaining some order which provides for property to be transferred to her, the parties' personal relationship continued over several years, and they have two children whose care is shared. The parties are of similar age and, subject to comments already made as to the applicant's health, each is in good health.
Some comment needs to be made about the evidence presented to the Court about the respondent's financial position. In anticipation of a hearing in respect of the applicant's claim for an adjustment of property interests, the respondent swore a financial statement on 10 September 2010. It did not contain much detail about his living expenses because, at the time it was sworn, there was no application for maintenance on foot. On 4 April 2011, directions were made for the filing of updated material for the purpose of the hearing in relation to the grant of leave. The respondent was directed to file any further material upon which he sought to rely by 5pm on 16 May 2011. No material was filed. The hearing in this matter was listed to commence on Monday, 30 May. At about 4pm on the Friday before, the respondent's solicitors filed an affidavit sworn by the respondent. In his affidavit, the respondent disclosed that he proposed to change his line of work. He did not propose to renew his hospital contract when it expired at the end of July, and proposed instead to complete his fellowship with the College of Rural and Remote Medicine and work as a general practitioner. He anticipated his annual income would then be about $250,000. He set out some of the expenses he incurred for his daughters. These included some $21,000 for private school fees which it seems were paid by his father, the girls' grandfather. He also set out details of various loan expenses and those he continued to meet in relation to the Taroona property.
The respondent did not file any updated financial statement and provided no detail at all about his general living expenses in the affidavit he swore. When the respondent was called to give evidence, his counsel simply put into evidence the affidavits and financial statement already filed, and made his client available for cross-examination. He made no effort to put before the Court any information about his client's general living expenses, or to put before the Court current information about income.
The September 2010 financial statement disclosed a gross income of some $322,608 per annum. In cross-examination, it became apparent that that estimate was based on a taxation return completed for the financial year ended 30 June 2009, that is for a period which had ended some 15 months prior to the statement being sworn. It also became apparent that the respondent's actual income at the time of hearing was much higher than that disclosed. The respondent agreed that his projected income for the current financial year would be in the region of $413,000. The expenditure the respondent did disclose would seem to leave him with a surplus of income over expenditure, although precisely what his situation was, was simply not apparent.
After the evidence of all parties had been put before the Court, and counsel were about to commence their closing addresses after a hearing which had commenced on 30 May, and continued on 31 May and 2 June, it came to the attention of the Court that a financial statement sworn by the respondent on 1 June 2011 had been filed. It had been prepared and filed by the respondent in person without him telling his counsel. Indeed, even after all the evidence was completed, counsel for the respondent seemed unaware of the document. I have no doubt it was filed by the respondent in an attempt to address the perceived damage to his position done up to that point in cross-examination. The Court declined to have regard to it given the stage of the proceedings at which it was filed.
I raise these matters because, during the course of closing submissions, counsel for the respondent was asked whether there was any issue about his client's capacity to pay maintenance, that issue not having been addressed at all. Counsel's response was that he did not concede that his client had a capacity to pay, but he could not dispute that he might have. On the state of the evidence as it was presented, there seems little doubt that the respondent has a capacity to pay. This is notwithstanding he has re-partnered, and that his partner and her children now live with him. She it seems works part-time.
Having regard to all these factors it would seem to me that the applicant has a case for maintenance which has reasonable prospects of success.
Does hardship flow to the applicant if leave is not granted to pursue an application for maintenance?
If the applicant is unable to pursue an application for maintenance which may result in a payment to her, her financial situation will likely remain as it is, subject to a possible change in child support payments and changes which might occur as a result of her needing to be responsible for her own housing costs post any hearing in relation to property adjustment. Her capacity to increase her income on her own will be limited. She will I am satisfied suffer hardship if she is unable to pursue her application.
Is there hardship to the respondent if leave is granted?
The respondent has, since he and the applicant separated, acquired another home which has with it significant financial commitments. He has a new partner. She lives with him as do her children. She is in part-time employment. No information was provided to the Court about the financial arrangements generally of the respondent and his new partner. The respondent was clearly conscious of the fact that he was at risk of a claim for maintenance because, when the two year period expired in February 2010, he telephoned the applicant to tell her she was out of time. No information was put before the Court as to any way he had changed his life since then, relying on there being no claim for maintenance. The only change in his circumstances is to his proposed employment arrangements, and that appears to have been arranged after the present application was made. It was submitted by the respondent's counsel that it could not be expected that the respondent would work ridiculously long hours for ever.
Leaving that sort of rhetoric to one side, I am satisfied that there may be hardship to the respondent if the applicant is given leave to proceed at this time.
A comparison of hardships
The respondent's financial position is a far better one than that of the applicant. While clearly that arises to a large extent from his commitment to work and willingness to work long hours and in different places, it cannot be ignored that his capacity to do that during the parties' relationship after the birth of the parties' children depended to a degree on the role the applicant played in the care of the children. While the balance in the care arrangements has now altered, that does not change the fact that the respondent, based on his history of employment, has a far better opportunity than the applicant to improve his financial position and address any hardship which might flow if leave were granted.
I am satisfied in all the circumstances that greater hardship will be caused to the applicant if leave is not granted than will be caused to the respondent if leave is granted.
The Court's residual discretion
As to the exercise of the Court's discretion, the Act, as I have already said, does not set out what factors a court should have regard to. Each case will largely therefore turn on its own facts. The application by the applicant, effectively for leave to commence maintenance proceedings, was made in February 2011, that is approximately a year outside the period during which it should have been made. While the authorities to which I have referred suggest that an explanation for any delay may not be necessary, I take the view that the question of delay is relevant and should be addressed.
The applicant's explanation for her delay was not challenged by the respondent. The applicant was represented by a particular lawyer until December 2009. She raised with him on at least two occasions the possibility of making a claim for maintenance. In August 2009, he advised her that long-term future maintenance was not practical in the circumstances. On 1 September 2009, when the applicant queried why she could not obtain maintenance, she was advised it was because of the passage of time. At that time, the applicant was still within time to make such a claim. In December 2009, the applicant changed solicitors. However, her new solicitor was not able to access the file from the former one for some months. Notwithstanding that, the new solicitor dealt with the filing of affidavits in property matters which were filed late in February 2010.
The respondent also telephoned the applicant and told her the two year time limit had expired, saying "time's up, you're too late, too bad". The applicant said in her affidavit that, because of her former solicitor's advice, the advice by the respondent and the pressure of other matters relating to the children and property, she did not pursue the issue. It was not until her solicitor briefed counsel in relation to the matter generally, and the applicant met with him on 7 February 2011, that the applicant was advised to make an application. She did so immediately.
There are clearly reasons why the applicant did not pursue a claim for maintenance before she did. Most particularly she had legal advice that it was not appropriate and that time was against her. She also was told by the respondent she was out of time. She then acted as soon as appropriate advice was given. I accept that in the circumstances there is a reasonable explanation for the applicant's delay.
Another factor, in my view, relevant to the discretion to be exercised, is that the applicant's property adjustment claim has not yet been dealt with. While I accept that it might have been had this application not been made, it is relevant that, at the time this application was made, property matters had not been resolved. It will therefore not be a situation where the respondent is exposed to a second set of proceedings after the first had been dealt with, with associated extra costs.
Conclusion
Having regard to the findings I have made in these reasons, I am satisfied that the Court should exercise its discretion in favour of the applicant and, in effect, grant her leave to commence maintenance proceedings.
The order of the Court is that the applicant have leave to amend her originating application filed on 25 August 2008 to add to it par 2 in the form in which it appears in the amended form of application attached to the interlocutory application filed on 8 February 2011.
I will hear counsel as to any order as to costs.
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