Corney and Hose - [2010] FMCAfam 1462

FEDERAL MAGISTRATES COURT OF AUSTRALIA

CORNEY & HOSE

[2010] FMCAfam 1462

FAMILY LAW – Interim application – declaration as to provision in a binding financial agreement – spouse maintenance.

Family Law Act 1975, ss.77A, 87A, 90B, 90UH, 90UJ

Carvetta [2007] FamCA 667
Doig & Doig [1999] FamCA1363
Fevia & Carmel-Fevia [2009] FamCA 816
Heeks (1980) FLC90-807

Applicant:

MR CORNEY

Respondent:

MS HOSE

File Number:

WOC 162 of 2010

Judgment of:

Altobelli FM

Hearing date:

29 November 2010

Date of Last Submission:

29 November 2010

Delivered at:

Wollongong

Delivered on:

10 December 2010

REPRESENTATION

Counsel for the Applicant:

Mr Folino-Gallo

Solicitors for the Applicant:

Donnelly Lawyers

Counsel for the Respondent:

Mr Foster

Solicitors for the Respondent:

Abrams Turner Whelan Family Lawyers

ORDERS

Declare that Recital 6 of the document entitled “Financial Agreement” signed by the parties dated 14^th July 2009 (“the Agreement”) is void pursuant to Section 90UH of the Family Law Act 1975 (as amended) and be severed from the Agreement.
Pending further order, that pursuant to Section 90SE(1) of the Family Law Act 1975, the father pay to the mother by way of spouse maintenance the sum of $500 per week, the first payment of spouse maintenance to be made within seven days of the date of these Orders and thereafter on the same day each week.
The spouse maintenance referred to in Order (2) above shall be paid by way of direct deposit into the mother’s ANZ Bank Account BSB Number [omitted], Account Number [omitted] or as otherwise directed in writing by the wife.
The parties’ costs of today are reserved.

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

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

WOC 162 of 2010

MR CORNEY

Applicant

And

MS HOSE

Respondent

REASONS FOR JUDGMENT

In the matter of Corney & Hose, I provide the following oral reasons. I deliver these short oral reasons in a context where I have had no time off the bench since hearing in this matter on 29 November, and I am about to proceed on five weeks leave. Some of the issues raised are complex, and it is regrettable that I am unable to do justice to the thoughtful written submissions provided by counsel for the applicant and respondent. However, the circumstances of the respondent are such that I believe an order does need to be made sooner rather than later.
In the amended response filed 5 November 2010, the respondent de facto wife seeks as interim orders a declaration that recital 6 of a financial agreement dated 14 July 2009 is void pursuant to section 90UH of the Family Law Act 1975 and be severed from the agreement, and thereafter, an order for spousal maintenance at $500 per week. By way of his reply filed 24 November 2010, the de facto husband opposes this. In effect, the de facto wife seeks to set aside the provision dealing with spousal maintenance in the financial agreement, as it offends section 90UH.
This provision says, in effect, that a provision in a financial agreement that relates to the maintenance of a spouse is void unless it specifies the party for whose maintenance provision is made and the amount or value of the property attributable to this maintenance. It is common ground that section 90UH has not in a technical sense been complied with. The de facto wife asserts accordingly that recital 6, which states neither party shall at any time make any claims upon the other for any payment of spousal maintenance should be severed, thus leaving intact the rest of the financial agreement but leaving open her claim for spousal maintenance.
The de facto husband asserts that in a situation where there is no suggestion that the formal requirements of section 90UJ has not been complied with, the de facto wife is estopped from invoking non-compliance with section 90UH. I must state once again that I am doing no justice to the written and oral submissions of both counsel. I am, as the circumstances necessitate, greatly simplifying the arguments made and focusing on the central issue as I regard it, and that is whether the wife estopped from relying on section 90UH.
I was referred to a number of decisions by both counsel, perhaps the most useful of which was that of Murphy J in Fevia & Carmel-Fevia [2009] FamCA 816. It is important to focus on section 90UH. It is in similar terms to section 90B and, importantly in the present context, sections 87A and also 77A. The Full Court in Doig & Doig [1999] FamCA 1363 at paragraph 23 stated as follows in relation to section 77A:
The section is designed to protect the revenue. There are pensions available which are means tested according to the income of parties and one way historically of maximising those pensions was to make a capital allowance and thus minimise income. In order to minimise demands upon income-tested pensions the Court was required by section 77A and similar legislation in respect of section 87 to identify so much of any capital amount which could be attributable to maintenance.
I am satisfied that section 90UH, like sections 90B, 87A, and 77A has the purpose of protecting the revenue. This is an important consideration when bearing in mind the “social purpose” of the legislation, a phrase I borrow from cases such as Fevia & Carmel-Fevia. If the purpose of section 90UH is to protect the revenue, I am unable to accept the contention that parties can choose to, in effect, opt out of a statutory provision which was designed not to protect their private interests but the much broader public interests. In these circumstances, the estoppel argument articulated on behalf of the de facto husband cannot succeed.
Having regard to the purpose of section 90UH and the terms of the provisions of the financial agreement that purport to prevent the wife from claiming maintenance against the husband, I declare that the provision which is described as recital 6 ( I must say I doubt very much whether it is really a recital) is void.
The wife seeks an order for interim spouse maintenance in the sum of $500 per week. I am satisfied that the threshold issue has been met under section 72 subsection (1). In particular, I am satisfied that the wife wishes to continue in the role of primary carer to the parties’ daughter [X], who is nearly three years old, and in accordance with well-established authorities in this Court, including Heeks (1980) FLC90-807 and Carvetta [2007] FamCA 667 it is not unreasonable for her to do so. Thus section 72(1)(a) is established.
The wife quantifies her need for maintenance at $500 per week. Her financial statement filed 5 November 2010 indicates that the wife’s income excluding Centrelink and child support is $626 per week and that the wife’s expenses excluding the child’s expenses are $1155 per week, thus revealing a deficit of $529 per week. It would be possible, at least in an academic sense, to further apportion some of the wife’s expenses at Part G of her financial statement as between the child and herself, but I am satisfied that her personal expenditure is so modest in the circumstances that her claim is clearly reasonable. Subject to the husband’s capacity to pay $500 per week, the wife’s claim is reasonable.
I am satisfied that the husband does have the capacity to pay. His own financial statement discloses a surplus of income over expenses of $185 per week as well as over $260,000 in cash assets. Putting aside his cash resources, his expenses claimed are not reasonable. He claims $150 per week for insurances, a total of $7800 per year, which seems excessive. He claims $700 per week for credit cards in a situation where he owes nothing on a credit card, and that suggests either excess or, alternatively, a duplication of the expenses referred to at Part N of the financial statement.
He claims as an expense at Part N, $250 per week for food, which I find unreasonable in circumstances where the wife’s is $50 per week. He claims entertainment at $250 per week and holidays $100 per week, which is also unreasonable in the circumstances. I hence have no difficulty on an interim basis and based on the husband’s own financial material in finding that he has capacity to pay $500 per week.

I certify that the preceding eleven (11) paragraphs are a true copy of the reasons for judgment of Altobelli FM

Date: 10 December 2010