Collingridge & Aiolfi
[2019] FamCAFC 88
•28 May 2019
FAMILY COURT OF AUSTRALIA
| COLLINGRIDGE & AIOLFI | [2019] FamCAFC 88 |
| FAMILY LAW – APPEAL – INTERIM ORDER – Spousal maintenance – De Facto relationship – Inconsistent findings – Whether findings available – Adequacy of reasons – Earning capacity – Appeal allowed – Error established as to the reasons for awarding $1,000 – Discretion re-exercised – Where it was found that the respondent cannot support herself adequately – Respondent’s reasonable needs assessed to be $617 per week – Where the appellant has the capacity to meet those needs – Order made that the appellant pay interim spousal maintenance in the amount of $617 per week – Order varied. FAMILY LAW – APPEAL – LEAVE – Leave to appeal interim order required – Where the decision of the primary judge is attended to by sufficient doubt to warrant reconsideration – Where a substantial injustice would result if leave to appeal were refused – Leave to appeal granted. |
| Family Law Act 1975 (Cth) ss 90SE, 90SF Child Support (Assessment) Act 1989 (Cth) ss 117(2), 117(3B) |
| Bevan v Bevan (1995) FLC 92-600; [1993] FamCA 95 X & X (2000) FLC 93-017; [1999] FamCA 2254 |
| APPELLANT: | Mr Collingridge |
| RESPONDENT: | Ms Aiolfi |
| FILE NUMBER: | ADC | 3940 | of | 2017 |
| APPEAL NUMBER: | EA | 106 | of | 2018 |
| DATE DELIVERED: | 28 May 2019 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Ryan, Aldridge & Watts JJ |
| HEARING DATE: | 7 March 2019 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 9 July 2018 |
| LOWER COURT MNC: | [2018] FCCA 1986 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Othen |
| SOLICITOR FOR THE APPELLANT: | Adelta Legal |
| COUNSEL FOR THE RESPONDENT: | Mr Livingstone |
| SOLICITOR FOR THE RESPONDENT: | Taylor & Scott Lawyers |
Orders
The appellant be granted leave to appeal from Order 5 dated 9 July 2018.
The appeal be allowed in part.
Order 5 dated 9 July 2018 be varied by deleting the amount of ‘$1,000’ and inserting the amount of ‘$617’.
That any application for costs be made by way of written submissions to be filed electronically within twenty-eight (28) days of the date of these orders and served on the other party within the same period.
That any submissions in response be filed electronically to the same email address within fourteen (14) days thereof and served on the other party within the same period.
Any further submissions in reply are to be filed electronically to the same email address and served within an additional seven (7) days.
Note: The form of the order is subject to the entry of the order in the Court’s records.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Collingridge & Aiolfi has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY |
Appeal Number: EA 106 of 2018
File Number: ADC 3940 of 2017
| Mr Collingridge |
Appellant
And
| Ms Aiolfi |
Respondent
REASONS FOR JUDGMENT
Ryan & Aldridge JJ
By Amended Notice of Appeal filed on 20 September 2018, Mr Collingridge (“the appellant”) seeks leave to appeal an interim order for spousal maintenance (Order 5) made by a judge of the Federal Circuit Court on 9 July 2018. Leave to appeal is required and the application for leave and the appeal were heard together.
Ms Aiolfi (“the respondent”) is the appellant’s former de facto spouse and the respondent to the application for leave and the associated appeal. The respondent seeks to uphold the decision of the primary judge and resists the application for leave to appeal.
An applicant for leave to appeal must satisfy the Court that in all of the circumstances, the decision is attended by sufficient doubt to warrant it being reconsidered by the Full Court and that substantial injustice would result if leave were refused (Medlow & Medlow (2016) FLC 93-692 at [57]).
The order under appeal
Pursuant to s 90SE(1) of the Family Law Act 1975 (Cth) (“the Act”) the appellant was ordered to pay to “[the respondent] by deposit to her Bank G account ending 12, or as she otherwise directs, spouse maintenance in the sum of $1,000 each week, commencing 16 July 2018 and continuing each week thereafter” (Order 5).
De facto spousal maintenance
There is no challenge to the primary judge’s statement of the principles which apply to an application for maintenance by a former de facto spouse. As the primary judge explained, such an application is made pursuant to s 90SE of the Act. However, the right of a de facto spouse to maintenance is determined by reference to s 90SF(1) of the Act and it is the application of this provision which is central to a number of challenges raised in the application for leave and the associated appeal.
Section 90SF(1) of the Act provides:
(1) In exercising jurisdiction under section 90SE (after being satisfied of the matters in subsections 44(5) and (6) and sections 90SB and 90SD), the court must apply the principle that a party to a de facto relationship must maintain the other party to the de facto relationship:
(a)only to the extent that the first‑mentioned party is reasonably able to do so; and
(b)only if the second‑mentioned party is unable to support himself or herself adequately whether:
(i)by reason of having the care and control of a child of the de facto relationship who has not attained the age of 18 years; or
(ii)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(iii)for any other adequate reason.
(Notes omitted)
It follows, that there can be no liability to pay de facto spousal maintenance unless an applicant has first established that he/she “is unable to support herself or himself adequately” because of the matters identified in s 90SF(1)(b)(i)-(iii) of the Act. In determining whether the respondent was able to support herself adequately, the primary judge was required to disregard the income the respondent received from Centrelink (s 90SE(4) of the Act), which she did.
In relation to this threshold question, the primary judge found that the respondent:
·Has the full time care of the parties’ son who was born in 2016 and thus two years of age at the time of hearing. As the parties live in different states it was geographically impossible for the appellant to assist the respondent with the care of the child “on anything other than a relatively infrequent basis” and thus, responsibility for the care of the child “falls very heavily” on the respondent ([25]);
·Had about $35,000 in a bank account ([26]);
·Last had a period of paid employment in June 2017, which was for a period of two months ([27]);
·Lived with her parents and wished to, but could not establish, a home of her own ([27]);
·Was studying in an effort to improve her prospects of employment ([27]); and
·Requires $617 per week to support herself ([27]).
This resulted in her Honour’s conclusion at [34] that “[l]ooking at the matter overall, I accept that [the appellant] has the capacity to meet $1,000 per week maintenance that is sought. As I have indicated, I am satisfied that the figures relied on by the applicant for maintenance are appropriate”.
Before we discuss the challenges raised against the orders, it is apparent that the trial reasons adopt the well settled approach to these cases, as set out in Redman and Redman (1987) FLC 91-805 (“Redman”) at 76,081, namely:
… on an application for interim maintenance the court conducts ''not as final or exhaustive a hearing as would be the case if one were hearing the matter finally'': Williamson and Williamson (1978) FLC 90-505; (1978) 4 Fam. L.R. 355 at FLC p. 77,650; Fam. L.R. p. 359 per Fogarty J. The evidence need not be so extensive and the findings not so precise. Having regard to those factors, and the general injunction of sec. 97(3), the court should in such matters have a greater degree of flexibility than it possesses in applications for maintenance which are intended to last for an indefinite period and can only be varied under sec. 83.
The finding that $1,000 per week was appropriate - Ground 3
Grounds 1 and 2 were withdrawn. By Ground 3 the appellant argues that the finding that the respondent receive $1,000 was inconsistent with the finding at [27] that the respondent “requires $617 per week to support herself”. Furthermore, the appellant contends that the reasons for concluding that the respondent had such a need, were inadequate.
Turning to the first limb of this challenge, the argument, in essence, is that her Honour’s finding at [27] cannot be reconciled with an order that the appellant pays the respondent $1,000 per week. The finding that the respondent required $617 each week adopts the amount identified in her updated Financial Statement filed on 18 May 2018 at Part N. True it is that the respondent gave evidence about the expenses she also incurs for the child, but those who appeared in the Court below were astute to the fact that the respondent could not use a claim for spousal maintenance as a mechanism to obtain child support and thus made it clear that consistent with authority (Stein & Stein (2000) FLC 93-004) the claim should be assessed without regard to the expenses for the child separately identified in Part N (see transcript 29 May 2018, p 21, lines 11-18).
Nonetheless, because the trial reasons are silent about how the amount of $1,000 was settled on, counsel for the appellant postulated that the primary judge took into account the cost of child care. Some support for this being a possible explanation arises from her Honour’s observation that child care in the amount of $270 per week was the respondent’s most significant expense. But that still does not amount to $1,000 per week and disregards the fact that child minding expenses (for which the respondent received an unspecified rebate) did not form part of the respondent’s claim for spousal maintenance. Notwithstanding the agreed position that child care should not be taken into account, if the primary judge thought that it should be, issues of procedural fairness and statute required consideration, which did not happen. In particular, some consideration needed to be given to s 117(2)(b)(ib) of the Child Support (Assessment) Act 1989 (Cth) (“the Child Support Act”) which provides that the high costs of child care (as defined in s 117(3B) of the Child Support Act) is a ground for departure from an administrative assessment of child support. This is because the high costs of child care are ordinarily considered as child support rather than spouse maintenance.
Counsel for the respondent surmised that the difference between $617 and $1,000 per week might have been referrable to expenses paid by the respondent’s parents on her behalf, as set out at Part F of the respondent’s updated Financial Statement. However, this finding was not made and the expenses identified in Part F are largely duplicated in Part N. In this respect, other than in relation to the payment of legal fees and electricity, the expenses paid by the respondent’s parents were taken into account in the amount of $617 and for which allowance had already been made. If this is in fact what has occurred, it follows that the primary judge double counted most of the expenses in Part F, which would be an error in itself.
Of course, the respondent’s needs were calculated on the basis that she lived with her parents and did not pay rent. As to her future plans to live independently of her parents, the respondent’s evidence was that she would need approximately $1,000 per week for rent, in relation to which she had neither income nor savings that could be utilised. Thus, although the respondent had savings, her savings were insufficient for her to make the decision that she could afford to live independently of her parents. There was no evidence from the respondent that the payment of maintenance in the amount sought would give her the capacity to live independently. On the evidence available the proper inference to be drawn from the respondent’s evidence is that it is only if she received maintenance sufficient to pay weekly rent in the amount of $1,000 plus $617 per week for her reasonable needs, would she contemplate living independently from her parents. It follows that we would not infer that the primary judge proceeded on the basis that with an additional $383 per week the respondent would be able to live independently and thus a small allowance for rent was appropriate.
The effect of this is that on the evidence available to the primary judge, the finding that the respondent needs $617 per week to support herself was available but the reasons for an order in excess of that amount are inadequate. Furthermore, the finding that an amount of $1,000 per week was appropriate was not available and is inconsistent with the finding that the respondent required $617 per week to support herself.
Error as alleged by Ground 3 has thus been established.
Is the respondent unable to support herself? – Ground 4
By Ground 4 the appellant challenges the finding that the respondent established she was unable to support herself adequately. It is said that the reasons for finding so were inadequate and not available on the evidence.
It is uncontroversial that the application for maintenance was based on s 90SF(1)(b)(i) of the Act, namely by reason of having the care and control of a child of the de facto relationship who has not obtained the age of 18 years, the respondent was unable to support herself adequately.
In relation to this question, the primary judge said at [25]:
[the respondent] has the full time care of [the child], who is aged two. There is no real issue, despite some submissions made to the contrary, that she is required to support and be available for [the child]. She had some brief period of employment last year. The [appellant] resides in [another city]. He is unable to assist the [respondent] on anything other than a relatively infrequent basis because it is geographically impossible for him to do otherwise. The responsibility for the care of [the child] falls very heavily on [the respondent].
Having analysed the respondent’s financial circumstances, the primary judge addressed her employment history and the availability of child care. At [27] the primary judge found:
... She is presently studying in an effort to improve her position for employment. Her previous experience is in the entertainment industry. Her last work in that regard was in June 2017, which was for a period of two months. In the circumstances where the father resides in [another city], [the respondent] is reliant upon either paid child care, or assistance provided by her parents, with whom she and [the child] reside.
In support of this ground, the appellant argued:
18.The difficulty for the Court in accepting the [respondent] had met threshold was the lack of evidence the [respondent] put before the Court as to the extent to which [the child]’s care needs made her unavailable for employment and thus meet her own needs. There was no physical or mental incapacity for employment; the issue was whether the applicant could not meet her needs by reason of her care and control of [the child]. The [respondent] had the onus in this regard and she failed to discharge it.
…
26.The absence of evidence offered by the [respondent] as to threshold suggests an assumption was made that when a child is 2 years old, threshold is a foregone conclusion when the child’s caregiver applies for maintenance. However, the Court may not make such assumptions, but must satisfy itself on the evidence that the onus of proof has been discharged by the [respondent], who faces in effect a presumption there is no maintenance liability. After all, the Courts see plenty of single parents with young children who work outside the home, and plenty who do not.
(Appellant’s summary of argument, filed 5 December 2018)
The gravamen of the respondent’s evidence was that as the parent who is, in practical terms, solely responsible for the care of the parties’ son, it was appropriate that he be the focus of her time and energy. Thus, she gave up full time work prior to the child’s birth to care for him. At some stage, he commenced child care which gave the respondent some time when she was able to focus on her needs and not solely those of the child. It will be recalled, that the respondent secured two months of part-time work when the child was not yet one. The respondent gave evidence that she applied for part-time employment with the implication being that other than for this one position, she had been unsuccessful.
Her Honour’s observation that the costs of child care are the respondent’s “most significant expense” carry with it the implication that the respondent could not reasonably be expected to spend more on child care than she did. In other words that the respondent could not afford the cost of having the child spend longer periods in child care so as to make her more available to take paid employment.
Although not expressly stated, there can be no doubt that the primary judge was satisfied that the respondent was entitled to prioritise her commitment to personally care for the parties’ young child and she was not required to look for full time employment at this stage of his life in order to establish an entitlement to maintenance. For the appellant’s argument to make good it would be necessary for us to interpret the provision in such a way that would require a parent of a young child to pursue full time employment at the expense of his or her desire to personally care for the child and, only if the parent was unsuccessful in securing paid employment, could there be a successful application for spousal maintenance (of whatever type). This is not an interpretation that could be properly given to the provision, which, in its terms, specifically requires that the Court takes account of the fact that an applicant for maintenance has child care responsibilities.
Nor is it accepted that merely because the respondent has been able to enrol in a part-time degree course that this is “a clear admission of availability for employment despite her caring responsibilities” (Appellant’s summary of argument, filed 5 December 2018 at [23]). The better view is that a parent who has exclusive care of the child, may have some time to him or herself. Such a person is not required to spend every nanosecond looking for paid employment or attending to the needs of others before he or she is able to establish an inability to support himself or herself.
As for the submission by the appellant that the respondent’s parents could assist with, presumably unpaid, child care so that the respondent could have paid employment, the child’s grandparents are entitled to live their own lives and have no responsibility for the child’s care. As Wood J said in Patterson and Patterson (1979) FLC 90-705, at 78,761 “[t]he Court cannot thrust upon a party an obligation to twist the arms of relatives in order to have them embark upon child minding to free that parent for employment”.
It follows, there was sufficient evidence available to support the finding made pursuant to s 90SF(1)(b)(i) of the Act.
As to the challenge to the adequacy of her Honour’s reasons, at paragraph 10 of the respondent’s summary of argument (filed 30 January 2019), the respondent argued:
Her Honour was not required to embark upon a lengthy intellectual exercise examining why, in a case such as the present where the child is too young for school and the other parent lives interstate, that an applicant for maintenance was incapable of supporting herself. The Respondent’s past efforts to obtain part time employment (one of which has succeeded) do not render her Honour’s findings inconsistent with the evidence but rather bolster those findings.
(Footnotes omitted)
We agree and observe that for this ground to have been made good, it would have been necessary to determine that Redman should not be followed, but it is as compelling now as it was when it was decided.
Ground 4 has not been established.
The appellant’s capacity to pay maintenance - Grounds 5 and 6.
The gravamen of Ground 5 is that the finding that the appellant had the capacity to pay maintenance in the amount of $1,000 per week was not available and the reasons for so concluding were inadequate. As to Ground 6, it is contended that the primary judge took into account irrelevant matters and failed to have regard to relevant matters, the effect of which was that the decision as to the appellant’s capacity to pay maintenance in the amount ordered was plainly wrong.
At its highest, the combined effect of Grounds 5 and 6 is as summarised in counsel for the appellant’s summary of argument filed 5 December 2018 at paragraphs 30 and 31:
30.The [appellant’s] income was around $825 per week, from a business in the United Kingdom which was performing less well than it had in the past. There was no evidentiary basis to conclude that the [appellant] had the capacity to earn more than this by abandoning his business and working in Australia instead, or that he could supplement this by working in Australia to the extent necessary to meet an obligation of $1,000 per week. Her Honour accepted a submission that he could without evidence.
31.The reasoning process as to why it is the [appellant] had a capacity to pay $1,000 per week is fundamentally flawed an opaque. Although some of the expenses in Part N of the [appellant’s] financial statement were pruned, often without any particular justification, there is no finding as to his actual necessary financial commitments, and no finding grounded in any evidence that he could if he chose earn an income $1,000 per week over and above the amount needed for his self-support. As such it is impossible to work out the basis on which the Court determined such capacity existed.
These challenges must be considered in the context of the finding as to the appellant’s evidence “that, on any view [the appellant’s] figures are extremely rubbery” [34]. In support of this finding, the primary judge took into account “the lack of information about what [the appellant] does with respect to income in Australia, the lack of information about how he supports his lifestyle of designer clothes and the like, as referred to in postings on social media” [34]. No challenge is made to these findings, nor to the finding that the appellant is “highly-qualified” who “in no way fulfils his capacity for employment earning $825 per week” [31].
It needs to be appreciated, that the appellant operates (with a relative) a business in the UK. The appellant lives in Australia and approximately every six weeks travels to the UK where he works in the business for one week or thereabouts. He gave no evidence about how his costs for this amount of international travel were met and no evidence of seeking employment in Australia. In essence, it can be seen that the primary judge decided that the appellant’s capacity to pay maintenance should be determined on the basis that he had the capacity to earn an income substantially in excess of that which he disclosed, and, that his financial disclosure was far from adequate. These are strong findings and demonstrate that the primary judge was satisfied that it was not possible to determine the appellant’s financial circumstances, particularly his income, with the desired certainty but that there was sufficient evidence from which his capacity to pay the amount sought could be inferred.
Cases such as DJM v JLM (1998) FLC 92-816 establish that in an application for spousal maintenance, when determining a person’s capacity to pay, a Court can take into account a respondent’s earning capacity and is not limited to that person’s actual income. As the Full Court explained at 85,272:
17.43A judge might reasonably say that a parent should be working longer hours or in more lucrative employment to meet child support obligations. A spouse is only required to support the other spouse to the extent that he or she is reasonably able to do so. This requirement does not impute the same degree of compulsion about it that the child support and child maintenance tests express. Thus a parent may be required or expected to work long hours or at more than one job if the parent has the capacity and opportunity to do so, and if the children need greater support than they would receive if the parent was only to work shorter hours. At the same time it might not be reasonable to expect an estranged spouse to avail himself or herself of such opportunities so as to provide maintenance for the other spouse. In the latter case it is a question of what is reasonable in the circumstances.
It is patently clear that the primary judge was satisfied that having regard to the appellant’s work history, the age of the parties child and that the respondent was solely responsible for their son’s day to day care, it was reasonable to expect that the appellant work longer hours than he did, including in his chosen profession. There is no reason to doubt the correctness of this approach.
There is also no doubt that the appellant’s failure to give full and frank disclosure meant that the “Court need not shy away from a robust exercise of discretion in favour of the [other party]” (Linder and Linder [2016] FamCAFC 139 at [32]) (see also Kannis and Kannis (2003) FLC 93-135 as cited by the Full Court in Gould and Gould (2007) FLC 93-333). It is evident that this principle properly informed the approach adopted by the primary judge to her assessment of the appellant’s income and earning capacity and, in particular, the inferences to be drawn from the evidence. This in turn affected consideration of the appellant’s reasonable expenses in relation to which precise findings could not be made but in relation to which the primary judge was satisfied that the appellant’s evidence could not be reconciled with other evidence as to his lifestyle. As the appellant was solely responsible for these difficulties, he cannot now complain that the findings do not have the level of detail ordinarily seen in these cases.
Otherwise, it was uncontroversial that the appellant owned five motor vehicles, three parcels of real estate and was able to travel from Australia to the UK every six weeks. The spectre was thus of financial health rather than impecuniosity.
Grounds 5 and 6 have not been made out.
Conclusion
The appellant has established error as articulated by Ground 3. It follows that the appellant has established that the decision as to periodic maintenance is attended by sufficient doubt to warrant it being reconsidered and that a substantial injustice would result if leave to appeal were refused. Leave to appeal will thus be given.
Re-exercise
It was agreed that in the event the appellant was successful in relation to only Ground 3, we would re-exercise rather than remit the proceedings for further hearing. Neither party sought to adduce further evidence. Counsel relied upon the submissions made to the primary judge.
In re-exercising the discretion of the primary judge, four questions need to be answered; namely:
a)Can the respondent support herself adequately?
b)If not, what are the respondent’s reasonable needs?
c)What capacity does the appellant have to meet those needs?
d)What order is appropriate having regard to s 90SF(3) of the Act?
The respondent has the full time care of the parties’ son who has not yet turned three. He is entirely dependent on her for his day to day needs, which she, in turn, must meet personally or delegate to others. Attempts by the respondent to secure employment which would enable her to give reasonable priority to the child’s needs have been largely unsuccessful. It is reasonable that she prioritises her desire to primarily care for the child and it would be unreasonable to require her to place the child in full time child care so that she could pursue full time employment. Although the respondent’s parents provide her with some practical support in the care of the child, there is no obligation that they do so. Nor is the respondent required to seek that they make a firm and long term commitment to care for the child so that she can pursue employment. With due respect to the argument advanced by the appellant, it is the appellant and the respondent who are obliged to care for their son and not the respondent’s parents.
As we have already explained, there is no inconsistency between the respondent undertaking further studies part time and her being able to establish that she is unable to adequately support herself. Further study sits comfortably with her primary commitment to the care of the child and her previous inability to obtain employment which would permit her to give priority to the child’s needs in the manner she considers appropriate and in his interests.
The respondent’s only source of income is welfare benefits which must be disregarded and means she has no income. She had savings of about $35,000 which by the time of the hearing had reduced to $29,000. Otherwise the respondent has no assets of value.
The respondent’s savings are modest and it is not reasonable or necessary that they be depleted before she can establish an entitlement to spousal maintenance. In short, the respondent has established she is unable to support herself adequately by reason of having the care and control of the parties’ son.
Thus, consideration must be given to the respondent’s reasonable needs. In her updated Financial Statement, the respondent claimed average weekly expenses in the amount of $617. She deposes that her parents contribute $400 per week towards her expenses, being: electricity, gas, groceries, day to day living expenses in the amount of $200 per week and an additional $200 per week for legal fees. As we explained earlier, other than legal fees and electricity, the expenses contributed to by the respondent’s parents are incorporated in the $617 average weekly expenses already identified. It is not accepted that her electricity expenses would equate to anything like $200 per week in a shared house or that the appellant, under the guise of an order for interim periodic spouse maintenance, should pay the respondent’s legal fees. This is a question as to what is reasonable in this particular case.
Although the respondent would eventually like to establish a home for herself and the child independently from her parents, she would need approximately $1,000 per week for rent. That is, she would need a weekly income of at least $1,617 to be able to live independently. It follows that even if the respondent secured a periodic order in the amount of $1,000 per week, she would only have that amount to live on and thus she would continue to reside with her parents rent free.
The effect of this is that the respondent’s reasonable needs should be assessed on the basis that for the foreseeable future she will continue to reside with her parents rent free. Calculated on this basis the respondent’s reasonable needs amount to $617 per week.
The appellant’s financial circumstances have not been disclosed adequately and he failed to explain why it is reasonable that he works one week in every six in the UK and otherwise remotely managing the business. Given his lack of involvement in the child’s care it is incumbent on him to pursue opportunities for employment so as to enable him to support the respondent to care for their young child. We infer that the appellant would earn a significantly greater income if he worked in his chosen profession for longer periods than he does at present.
The appellant disclosed an average weekly income of $825, compared to total personal expenditure in the amount of $1,238 (including $200 for legal fees). As we said earlier, these expenses do not take into account his regular international travel. Nor is it clear how, on an ongoing basis, he was able to support weekly expenses significantly greater than his income.
Otherwise, the appellant owns three parcels of real estate, five motor vehicles and has a 50 per cent share in a business in the UK. The value of his interest in the business was not in evidence, but on the estimates of value given by the appellant, his other property is worth in the vicinity of $1.425 million. One parcel of real estate is encumbered to the amount of $250,000 and, including that sum and other personal liabilities and loans, his total liabilities are in the vicinity of $435,000. Thus, the appellant has net assets worth in the vicinity of $1 million, most of which are unencumbered and could be realised without unreasonably compromising his standard of living.
In short, we are satisfied that the appellant has an unutilised earning capacity which greatly exceeds his actual income. We are not satisfied that the appellant has given complete disclosure as to his financial affairs and his actual income is probably greater than what has been disclosed. Considered in the context of the appellant’s lifestyle, this apparent underreporting of his actual income leads to the conclusion that, had he given full and frank disclosure of his financial circumstances, it would have been apparent that he was able to meet his own costs as well as the respondent’s reasonable needs. It is also appropriate to infer that in the event there was any deficiency, there would be no deficiency if the appellant fully utilised his earning capacity.
Turning then to s 90SF(3) of the Act, we place the greatest weight on ss 90SF(3)(c), (g) and (l). Other than the child, neither party has a responsibility to support any other person. As has already been established, the respondent is unable to support herself because of her child care commitments in relation to the parties’ very young son. Whereas the appellant lives independently and is able to travel extensively between Australia and the UK, the respondent cannot afford to live independently. Her standard of living is less than that enjoyed by the appellant or the parties during their relationship, even with the payment of periodic maintenance. This is directly referable to her child care responsibilities. The respondent wishes to continue her role as the child’s primary carer and not be required to place him in full time child care. The payment of interim spousal maintenance by the appellant will enable that wish to be fulfilled and, is in the circumstances, reasonable and appropriate.
The effect of this is that it is appropriate that the appellant pay interim spousal maintenance in the amount of $617 per week. The order will be varied accordingly.
Costs
At the conclusion of the hearing we invited submissions as to costs. We were informed that on the question of costs it would be necessary for us to consider offers of settlement and, thus, we agreed that any application for costs would be considered separately. Directions will be made accordingly.
Watts J
I have had the advantage of reading the Reasons for Judgment of Ryan and Aldridge JJ and agree with their Reasons in respect of Grounds 4, 5 and 6 and the directions in respect of costs. Grounds 1 and 2 have been abandoned.
Ground 3 is in the following terms:
Need
3.It was not open to Her Honour on the evidence to conclude that the respondent had a need for spouse maintenance of $1,000 per week, and Her Honour failed to give any or any adequate reasons for concluding that the respondent did have such a need.
For reasons which appear below, there is no merit in the first limb of Ground 3.
In relation to the second limb of Ground 3, the primary judge made a finding at [27] that “[h]aving regard to the matters set out in her financial statement, and particularly at Part N, [the respondent] requires $617 per week to support herself”.
The primary judge makes no other finding relevant to the amount the respondent required to adequately support herself.
Whilst counsel for the respondent suggested that the primary judge may have taken into account a combination of part or all of the respondent’s child care costs, costs paid on her behalf by her parents and notional present or actual future accommodation expenses, there is an absence of any indication in the primary judge’s reasons concerning those matters and how it was that the primary judge progressed from a finding that the respondent required $617 each week to a spousal maintenance order of $1,000 each week.
Accordingly, the error asserted in the second limb of Ground 3 is established.
If that conclusion was reached, each party invited the Full Court to re-exercise discretion and it is appropriate to do so. Each party relied upon the evidence before, and the submissions made, to the primary judge.
Before the primary judge, the respondent made an application for the following interim order:
2.That the [appellant] shall pay periodic maintenance to the [respondent] in the sum of $1,000 per week commencing seven days from the date of these Orders.
The Court, when determining whether to make a de facto spousal maintenance order, must be satisfied of the threshold requirement that the applicant is “unable to support herself or himself adequately” (s 90SF(1) of the Act).
The notion that “adequately” means a level of subsistence has been firmly rejected (see Bevan v Bevan (1995) FLC 92-600 at 81,982-3; Mitchell & Mitchell (1995) FLC 92-601 at 81,995 (“Mitchell”)). In W & W (1980) FLC 90-872, Nygh J said at 75,528:
“Adequately” is a relative concept which must be determined having regard to “a standard of living that is in all the circumstances reasonable'” see sec. 75(2)(g) and Ferguson and Ferguson (1978) FLC 90-500; (1978) 4 Fam. L.R. 312. In this case it must be admitted that the parties enjoyed a standard of living considerably above average and although the wife cannot necessarily claim that it should be maintained at the level of the formerly united household: see Aroney [(1979) FLC 90-709] it should not be at a level considerably below that presently enjoyed by her former husband in his private, i.e. non-professional, capacity.
I adopt the findings of the plurality that the respondent is unable to support herself adequately ([47]); that the appellant has an unutilised earning capacity which greatly exceeds his actual income ([54]) and the reasons given for those findings. However, I disagree with the plurality as to the periodic amount the respondent requires to support herself adequately.
In Part N of the respondent’s Financial Statement filed 18 May 2018, she gave evidence that her current average weekly expenses were $617. Her parents paid $200 towards those expenses, which included electricity expenses that were not accounted for in the figure of $617. The respondent lived in her parents’ home and did not pay any amount to them for the accommodation which they provided to her.
Thackray J said in Seitzinger & Seitzinger (2014) FLC 93-626 at [53]:
… the prescribed Financial Statement did not require the wife to state her “reasonable expenses”; rather, it required a statement of her current expenditure. It was therefore legitimate for the wife to state, as she did in her affidavit, that she needed more money than she was spending in order to maintain a “reasonable standard of living”…
In paragraphs 58 and 63 of the respondent’s affidavit filed 3 November 2017, she said:
58.I continue to live at my parent’s home with [the child], where I have a cot set up in a small separate bedroom. I do not pay rent or contribute towards any household bills or upkeep as, other than child support [she is no longer getting child support because she has opted not to] and government benefits, I am not in receipt of an income. While I do not expect my parents would kick me and [the child] out of their home, I cannot and do not want to remain living with them indefinitely.
…
63. I am presently unable to move out of my parents’ home as I do not have an income or sufficient savings from which to pay rent. As I am solely reliant on my parents to assist me with [the child’s] care and where I do not have a car, for practical reasons, it is necessary for me to remain living in the Suburb F area. A search of realestate.com.au shows that two-bedroom apartments in or around Suburb F rent for approximately $1,000 per week. Annexed hereto and marked with the letter “F” is copy of said online searches by way of example.
Section 90SF(3)(g) of the Act requires the Court to take into account a standard of living that in all the circumstances is reasonable. What is reasonable is to be judged upon the facts in an individual case and the Court must have regard to the current living standards of the parties and their financial circumstances (Mitchell at p 81,995).
Counsel for the appellant submitted before the primary judge that seeking independent rental accommodation at about $1,000 a week was a lifestyle that was simply not realistic in the circumstances (Transcript 29 May 2018, p 14, lines 9-12). Counsel for the respondent generally took issue with the appellant’s submissions in relation to lifestyle, although no explicit reference was made to the respondent’s evidence that she did not want to remain living indefinitely at her parents’ home with a cot set up in a small separate room. I am mindful, however, that this is an interim hearing on the papers and a broad-brush approach can be adopted (see Redman & Redman (1987) FLC 91-805 at 76,081).
When considering the reasonable standard of the respondent’s accommodation, some regard should be had to the history of the accommodation enjoyed by the parties during the relationship. Each gave different versions of the history of the relationship which the primary judge discussed at [9]-[14] of the reasons. On the respondent’s version, the duration of the relationship was between 2007 and June 2017. During the majority of the cohabitation, the respondent lived independently of her parents in apartments in the UK (owned or partly owned by the appellant) or a home owned by the appellant which had an estimated value of $935,000 as at May 2018. At times, the parties were physically apart due to their respective work commitments. Between September 2016 and December 2016, the parties lived with the child of the relationship in the appellant’s property. Currently, the appellant is the sole owner of the property and has a 50 per cent interest in an apartment in the UK and a 50 per cent interest in a beach house at Town C in another state. The appellant has not needed to and currently does not rely upon others for his accommodation.
It may have been possible, taking into account other s 90SF(3) considerations discussed by the plurality, to find the respondent required at least $1,617 each week but it is not necessary to further consider whether or not that finding is available on the evidence because the respondent is confined by her application. She, in effect, seeks an order for $383 per week towards the costs of accommodation and electricity which, when combined with her other average weekly expenses of $617 per week, would form the foundation for a finding that she requires at least $1,000 per week.
The plurality, at [15] and [49], find that because the respondent would need at least $1,617 to live independently and she has only sought an order for $1,000, she is unable to assert the need for a payment by the appellant towards her accommodation and electricity expense in circumstances where her parents are currently providing for those needs.
In Murkin & Murkin (1980) FLC 90-806, Nygh J said at p 75,081:
In my opinion the issue is not whether the wife is receiving sufficient funds, but whether she is able to support herself adequately i.e. whether she can generate funds from her own resources or earning capacity to supply her own needs. A woman who is dependent on payments of social security benefits, voluntary payments by a former husband or by friends and relatives is not able to support herself. She has to be supported by others … The threshold test in terms of s 72 [now s 72(1)] [in this case 90SF(1)] is ability to support one’s self, not need. A person whose needs are met by a voluntary payment or social security, is unable to support himself or herself. The criteria of need and ability to support one’s self are not identical.
(Emphasis added)
Currently, the respondent is unable to independently meet her reasonable requirement for accommodation expenses. I do not accept that simply because the respondent seeks an order that is less than what the evidence might otherwise indicate she requires, that she is disqualified from obtaining that order.
Nor am I able to find that if the respondent received a payment of $1,000 per week, that she might not be able to get independent accommodation. Not all rent needs to be paid from income. The respondent has capital of $29,000. She also receives family tax benefit and a child care rebate of $500 per week and her parents provide $200 per week to her. The rent of $1,000 per week is only approximate and she may find cheaper accommodation. In the event the respondent stays in her parents’ home, she could contribute towards the roof that her parents are providing over her head or save money towards the cost of future independent accommodation.
When considering what reasonable claim the respondent could make in respect of her accommodation expenses, a broad-brush should be applied in an interim application of this nature (see Redman) and I consider the amount of $383 per week to be reasonable.
For reasons discussed by the plurality, I agree with the primary judge’s finding that the appellant has a capacity to pay $1,000 per week.
Accordingly, I find it is proper to make an order for spousal maintenance in the sum of $1,000 per week, which is the same weekly amount as ordered by the primary judge. It follows that I would not disturb the order made by the primary judge and, if leave was granted to appeal, the appeal would be dismissed (see X & X (2000) FLC 93-017 at 87,316 – 87,317).
Turning to the issue of leave, whilst the decision of the primary judge is attended by sufficient doubt as to warrant it being reconsidered by the Full Court, no substantial injustice would result to the appellant if leave were refused (see Medlow & Medlow (2016) FLC 93-692 at [57]). Consequently, I would refuse the appellant leave to appeal Order 5 dated 9 July 2018.
The orders I would propose are:
1.The appellant’s application for leave to appeal Order 5, dated 9 July 2018, be dismissed.
2.Directions in respect of the costs be made as proposed by the plurality.
I certify that the preceding eighty-five (85) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Ryan, Aldridge & Watts JJ) delivered on 28 May 2019.
Associate:
Date: 28 May 2019
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