Daggett and Thorne
[2009] FMCAfam 1294
•9 December 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| DAGGETT & THORNE | [2009] FMCAfam 1294 |
| FAMILY LAW – Spousal maintenance. |
| Family Law Act 1975 (Cth), ss.72, 74, 75 & 80(1) |
| Applicant: | MS DAGGETT |
| Respondent: | MR THORNE |
| File Number: | ADC 3199 of 2009 |
| Judgment of: | Simpson FM |
| Hearing date: | 17 November 2009 |
| Date of Last Submission: | 17 November 2009 |
| Delivered at: | Adelaide |
| Delivered on: | 9 December 2009 |
REPRESENTATION
| Counsel for the Applicant: | Ms D. Morosini |
| Solicitors for the Applicant: | Di Morosini & Co |
| Counsel for the Respondent: | Ms D. Myers |
| Solicitors for the Respondent: | Diane Myers Pty Ltd |
ORDERS
UPON NOTING THAT this matter is listed for directions on 15 February 2010 at 9:30am,
THE COURT ORDERS THAT BY WAY OF SPOUSAL MAINTENANCE AND UNTIL FURTHER ORDER:
The husband do continue to pay for and on behalf of the wife the mortgage and all outgoings in relation to the former matrimonial home at Property N in the State of South Australia, namely:
(a)mortgage to ANZ Bank;
(b)Council rates;
(c)SA Water;
(d)Emergency Services Levy;
(e)gas and electricity bills;
(f)home telephone (landline);
(g)home and contents insurance;
(h)health insurance;
(i)broadband service; and
(j)Alarm Logic Electronic Security.
IT IS NOTED that publication of this judgment under the pseudonym Daggett & Thorne is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT ADELAIDE |
ADC 3199 of 2009
| MS DAGGETT |
Applicant
And
| MR THORNE |
Respondent
REASONS FOR JUDGMENT
The Application and Response
I have before me an Initiating Application filed by the wife on 13 August 2009. The wife seeks that there be an order:
That the husband do continue to pay for and on behalf of the wife the mortgage and or outgoings in relation to the former matrimonial home at Property N including but not limited to:
1.1 Mortgage to ANZ;
1.2 Council rates;
1.3 SA Water;
1.4 Emergency Services Levy;
1.5 Gas and electricity bills;
1.6 Home telephone (landline);
1.7 Home and contents insurance;
1.8 Health insurance;
1.9 Broadband service; and
1.10 Alarm Logic Electronic Security.
The wife’s Application has proceeded on the basis that in proposed order 1 the words “in relation to” be substituted for the words “included but not limited to the following”.
The wife’s Application is supported by her Affidavit and Financial Statement both sworn and filed on 13 August 2009. The wife also relies on an Affidavit sworn by her on 12 and filed on 13 October 2009, which Affidavit responded to the husband’s Affidavit sworn on 23 and filed on 25 September 2009.
The husband also filed his Response on 25 September 2009. His Response was supported by the Affidavit earlier referred to, as well as his Financial Statement also sworn on 23 and filed on 25 September 2009. In response to the wife’s application for interim relief the husband seeks orders:
That until further order:
(a)The husband do continue to pay the mortgage to ANZ, house insurance and contents insurance in respect of the former matrimonial home;
(b)The wife to pay all other outgoings in relation to the former matrimonial home; and
(c)The husband do continue to pay all other outgoings in relation to the Property C property.
When the matter first came before me on 8 September 2009 the husband had not filed any documents. Without hearing lengthy argument I made the following order:
1.During the period of the adjournment the husband do continue to pay for and on behalf of the wife the mortgage and all other outgoings.
2.During the period of the adjournment the husband do continue to pay for and on behalf of the wife the mortgage and all outgoings in relation to the former matrimonial home at Property N in the State of South Australia, including but not limited to the following:
a. Mortgage to ANZ;
b. Council rates;
c. SA Water;
d. Emergency Services Levy;
e. Gas and electricity bills;
f. Home telephone (landline);
g. Home and contents insurance;
h. Health insurance;
i. Broadband service; and
j. Alarm Logic Electronic Security.
These orders have been ordered to continue until a decision of the wife’s application for interim relief earlier referred to.
Further orders were made for the husband to file responding documents, the setting of a date for a Conciliation Conference, discovery of documents, the obtaining of valuations and the adjourned date.
Background Facts
The brief facts of the matter are that the husband is 57 and the wife 55. The parties were married [in] 1992 after a period of co-habitation of some twelve months. The parties separated finally on 22 December 2007 after a period of cohabitation of some sixteen years. The husband’s occupation is as Chief Executive Officer of [O]. The wife’s occupation is [in the Administration Industry]. The husband earns $232,648 per annum after a salary sacrifice of about $50,000 for superannuation and payment by the husband of about $5,000 for a car. The wife works a forty hour week and earns $40,000 per annum.
When the parties finally separated the wife continued living in the former matrimonial home (“the Property N property”). That property is valued at slightly over $1 million. The husband has made the parties’ beach house (“the Property C property”) his usual place of residence. That property is valued at nearly $600,000.
The parties have very similar Part N average weekly expenses. The wife’s expenses are said by her to be $714 per week whereas the husband’s expenses are said by him to be $740 per week.
Clearly the husband receives much greater income than the wife. The husband’s Financial Statement discloses that he pays $1,525 per week to the ANZ Bank, presumably in relation to the mortgage on the Property C property, and $144 per week to the ANZ Bank in relation to the mortgage on the Property N property. At the time that the husband’s Financial Statement was filed there was nearly $420,000 owing on the Property C property and nearly $43,000 owing on the Property N property.
The wife says that after separation the husband continued to make mortgage payments in relation to the former matrimonial home as well as meeting all her household expenses. This included but was not limited to council rates, SA Water, electricity, gas, home telephone, home and contents insurance, broadband and the wife’s home monitored alarm security service. She says that the husband also continued to pay health insurance with Medibank Private. She says that throughout their marriage the husband had handled all financial affairs, including payment of all household expenses. She says that she never knew how much was paid for these household expenses. She says that in April 2009 the husband told her that he would no longer pay household expenses in relation to the Property N property. The wife says that in June 2009 the husband again told her that he would be ceasing payment of the broadband facility as well as transferring other accounts into the wife’s name. This included gas, electricity, telephone and the like. At the time of signing her Affidavit on 13 August 2009 the husband had ceased paying for the broadband facility as well as the payment for the monitored alarm system. The wife says that to the best of her knowledge the husband was continuing to pay the mortgage on the Property N property at $621.93 per month, emergency services levy, house and contents insurance and some utilities. However, she says, he continually threatened to stop making these payments such that she did not know from week to week what was likely to happen. She says that the utility and insurance accounts were being sent directly to the husband as he has re-directed mail from the former matrimonial home to his post office box.
The husband disputes that the wife is only capable of earning approximately $40,000 per year. He says that the wife is capable of earning much more than this. He says that she could obtain a better paid position in either the area of medical practice management or in recreation. He says that the wife could also take in student boarders to supplement her income as she did before on an occasion when the parties separated for a period.
The husband says that he continued to pay these expenses after the parties separated trusting that that would satisfy the wife’s needs. He says that he never agreed to pay the expenses on a long-term basis. He says that since early May 2009 he has been sending certain accounts to the wife, including her electricity, gas, alarm and council rates but that the wife has returned the accounts to him. He says that he has paid them since ordered to do so by the Court on 8 September 2009. The husband says that at the hearing on 8 September 2009 his solicitor opposed the making of orders as sought on the ground that the wife was capable of supporting herself.
The husband says that since separation he has paid at least $28,132 for the wife’s benefit at the Property N property plus $2,637 for her computer and health care. He says that he has also paid half of the lease costs for the computer ($300 per year) and in addition has paid $50,444 towards the mortgage on the Property C property. He says that he cannot afford to continue to pay all of these amounts. He says that he is willing to consent to an order that he continue to pay the mortgages and the building contents insurance for both properties until further order or finalisation of the proceedings. He says that he opposes an order to the effect that he continue to pay rates, water rates, gas bills, electricity bills, telephone bills, broadband services, alarm fees and health insurance for the wife. He says that the wife incurs excessive water bills.
The wife’s Counsel submitted that the order sought was for spousal maintenance pursuant to ss.72, 74 and 75 of the Family Law Act 1975 (Cth) (“the Act”). The application itself did not make this clear. Although Counsel for the husband sought to characterise the relief being sought as possibly a partial property settlement I do not propose to deal with the application other than as put by Counsel for the wife. This application will therefore succeed or fail on the basis of whether a case for spousal maintenance pursuant to s.72 has been made out.
The Legislation
Section 72(1) of the Act provides as follows:
A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
Section 74(1) provides as follows:
In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part.
Section 75 provides as follows:
(1)In exercising jurisdiction under section 74, the court shall take into account only the matters referred to in subsection (2).
(2) The matters to be so taken into account are:
(a) the age and state of health of each of the parties;
(b)the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;
(d)commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain;
(e)the responsibilities of either party to support any other person;
(f)subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party;
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable;
(h)the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;
(ha)the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j)the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;
(k)the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
(l)the need to protect a party who wishes to continue that party’s role as a parent;
(m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation;
(n)the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party;
(na)any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p)the terms of any financial agreement that is binding on the parties.
Section 80(1) of the Act details the orders that can be made in relation to spousal maintenance. The applicant here seeks a periodic sum which is within the Court’s power to make pursuant to s.80(1)(b).
The process for assessing a spousal maintenance claim is as follows:
a)a threshold finding under s.72(1) as to whether the applicant is unable to support herself;
b)consideration of the matters referred to in s.75(2);
c)the exercise of a discretion in accordance with s.74(1); and
d)an assessment of the appropriate order bearing in mind that there is no fettering principle that the pre-separation standard of living must automatically be awarded where the respondent’s means permit.
The primary purpose of an order for spousal maintenance is to make appropriate adjustments for any disparity between the incomes or earning capacities of spouses based on their respective needs. The test of the ability of a spouse to support themselves, contained in s.72(1), is not whether the spouse is in need but whether the spouse is in a position to finance themselves from their own resources. Put somewhat differently, the question is whether the spouse, by reason of their earning capacity, capital or other sources of income, can look after themselves. If the applicant spouse does not overcome the threshold issue and show a need for spousal maintenance, the application of course should be dismissed rather than adjourned.
The recipient of maintenance is entitled to be maintained, “adequately”. The word “adequately” imports a standard of living which is reasonable in the circumstances. The income of the applicant is very important in assessing whether or not an applicant is unable to support themselves adequately. The applicant must have a present inability to support themselves adequately.
The respondent’s capacity to pay is not assessed merely on income, but also on property, finance resources and earning capacity. Capacity to pay is assessed by determining the respondent’s surplus after paying their reasonable commitments.
It was put by Counsel for the wife that the wife has demonstrated that she is unable to support herself adequately having regard to the relevant matters in s.75(2). The financial information that has been provided by the wife demonstrates that there is very little by way of surplus funds after payment of her usual expenses to be able to pay the amounts that are presently being paid by the husband. As the real estate is in joint names she does not have the ability to unilaterally obtain a loan on the security of these properties. I have no hesitation in finding that the threshold question contained in s.72(1) is met.
Next I have to consider the matters referred to in s.75(2). The husband has far greater income than the wife. The husband chooses to salary sacrifice part of his income for superannuation purposes. I also notice that apart from the $144 per week that the husband pays in relation to the mortgage of the Property N property he also pays a further $1,525 to the ANZ Bank. It is reasonable for me to conclude that, in doing so, the husband has chosen to reduce the mortgage on the Property C property as quickly as possible by paying far more than the bank is requiring as regular payments.
Whilst it is understandable that the husband wishes to reduce that mortgage as quickly as possible (which I acknowledge would be to the ultimate advantage of both parties) the needs of the wife to be able to support herself adequately make the husband’s payment of the large sum referred to inappropriate at this point in time. I therefore find that the husband is reasonably able to provide the financial support that the wife seeks.
I propose to make orders that the husband provide spousal maintenance for the wife as sought.
I certify that the preceding twenty-six (26) paragraphs are a true copy of the reasons for judgment of Simpson FM
Associate: Ms N. Julius
Date: 9 December 2009
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