Fannon & Salzer (No 2)
[2024] FedCFamC2F 406
•3 April 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fannon & Salzer (No 2) [2024] FedCFamC2F 406
File number: MLC 13379 of 2022 Judgment of: JUDGE BLAKE Date of judgment: 3 April 2024 Catchwords: FAMILY LAW – Interim spousal maintenance – where wife on parental leave following birth of child with new partner – where wife previously worked – whether husband should be required to pay spousal maintenance where the wife is not working because of decisions she made – HELD other adequate reasons exist for why the wife is unable to adequately support herself.
FAMILY LAW – Interim spousal maintenance – where the wife will shortly receive paid parental leave payments under the Paid Parental Leave Act 2010 (Cth) (‘PPL payments’) – whether PPL payments are an ‘income tested pension, allowance or benefit’ for the purposes of section 75(3) of the Family Law Act 1975 (Cth) – HELD payments under the Paid Parental Leave Act 2010 (Cth) are not income tested pensions, allowances or benefits and must be taken into account.
FAMILY LAW – Interim spousal maintenance – relevance of child support payment and children’s expenses to an application for spousal maintenance – where such payments and expenses are excluded from assessment.
FAMILY LAW – Interim spousal maintenance – where wife’s new partner is making contributions for the benefit of their child – where such payments are voluntary and irregular – where no submission put that wife and new partner are in de facto relationship – whether such payments are likely to continue – what quantum of these payments is being used for the expenses of the child of the wife and the new partner.
FAMILY LAW – Interim spousal maintenance – where there are three distinct periods covering the application including when the wife is on unpaid parental leave, when she is in receipt of PPL payments and what happens when the PPL payments end – different maintenance orders considered in relation to each period.
Legislation: Child Support (Assessment) Act 1989 (Cth) ss 17, 117, 124, 125.
Family Law Act 1975 (Cth) ss 4(1), 72, 72(1), 72(1)(a), 72(1)(b), 74, 75(2), 75(2)(b), 75(2)(d), 75(2)(f), 75(2)(j), 75(2)(l), 75(2)(na), 75(2)(o), 75(3).
Paid Parental Leave Act 2010 (Cth).
Social Security Act 1991 (Cth) ss 18, 23(1), 1068A, 1068B.
Social Security Legislation Amendment (Parenting and Other Measures) Act 1997 (Cth) sch 1, items 310, 311.
Family Law Regulations 1984 (Cth) reg 12A.
Federal Circuit and Family Law (Family Law) Rules 2021 (Cth).
Cases cited: Carson & Hillman [2019] FamCAFC 42
In the Marriage of Bevan (1993) 120 FLR 283
In the Marriage of Patterson (1979) FLC 90-705
Jabara & Gaber [2021] FedCFamC1A 26
Kensit & Kensit [2022] FedCFamC1F 633
MS & PS (2006) FLC 93-268
Stein v Stein (2000) 25 Fam LR 727
Division: Division 2 Family Law Number of paragraphs: 119 Date of hearing: 13 March 2024 Place: Melbourne Counsel for the Applicant: Ms Renwick Solicitor for the Applicant: Barry Nilsson Lawyers Counsel for the Respondent: Mr Dickson KC Solicitor for the Respondent: HQ Law ORDERS
MLC 13379 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MS FANNON
Applicant
AND: MR SALZER
Respondent
ORDER MADE BY:
JUDGE BLAKE
DATE OF ORDER:
3 APRIL 2024
THE COURT ORDERS BY CONSENT THAT:
1.Pending further order, and pursuant to, section 117 of the Child Support (Assessment) Act 1989 (Cth) (‘the CSA Act’), there be and is hereby a departure from the administrative assessment of child support payable by the husband to the wife for the children:
(a)X, born in 2018; and
(b)Y, born in 2021;
such that the husband must pay the wife by way of periodic child support, $100 per child, per week, payable by monthly instalments, the first payment to be made on the first day of the first calendar month after the making of this order, and thereafter, by the first day of each calendar month.
2.Pending further order, and pursuant to, inter alia, section 124 of the CSA Act, the husband must pay, or cause to be paid, non-periodic child support to the wife for the children by way of payment of 100% of the children’s:
(a)educational expenses including but not limited to tuition fees, school uniforms, information technology expenses, books, and stationery;
(b)extra-curricular activity expenses including but not limited to class fees, registration fees, uniform fees, and competition fees; and
(c)private health insurance premiums at the current or better level and which are due and payable from time to time;
3.For the purposes of Order 2 herein, the husband must:
(a)pay all such expenses to the relevant provider within 7 days of receiving an invoice from the wife or the provider; or
(b)reimburse the wife if she has paid such expense at first instance within 7 days of receiving an invoice from the wife by making such payment into a bank account nominated by her.
4.The payments referred to in Order 2 are not to be credited against any administrative assessment for child support for which the husband is responsible for payment, and for the purposes of section 125 of the CSA Act, such payments will not reduce the administrative assessment for child support.
5.Within 28 days of these Orders, the parties do all such acts and sign all such documents as may be required to amend the minute of meeting for the Salzer Family Trust in respect to the distribution of the Trust income of the Salzer Family Trust for the 2021/2022 financial year to state that $80,000 currently distributed to the wife, be distributed as directed by the husband.
THE COURT ORDERS THAT:
6.The husband pay to the wife $340,000 by way of partial property settlement as follows:
(a)$90,000 within 7 days of the date of these Orders; and
(b)the balance of $250,000 within 45 days of the date of these Orders.
7.In the event that the whole of the payment referred to in Order 6 above has not been made on or before 45 days from the date of these Orders, the property at B Street, Suburb C (‘Suburb C’) shall be sold altogether out of Court and the husband shall have control of the sale.
8.Any amount outstanding to the wife pursuant to Order 6 shall be paid from the Suburb C settlement proceeds.
9.Pursuant to section 74 of the Family Law Act 1975 (Cth), the husband pay interim spousal maintenance to the wife, by way of payment to the wife’s nominated bank account:
(a)from the date of these Orders until the wife commences receipt of Paid Parental Leave Payments under the Paid Parental Leave Act 2010 (Cth) (‘PPL Payments’), an amount of $884 per week; and
(b)from the time the wife commences to receive the PPL payments until she ceases to receive the PPL payments, an amount of $123 per week.
10.The wife immediately notify the husband in writing when she commences to receive PPL payments.
11.The wife immediately notify the husband in writing when she ceases to receive PPL payments.
AND THE COURT NOTES THAT:
A.Order 5 above was consented to on the basis that the husband would retain the amount of $80,000 (net of tax) in the asset pool, and that this amount would not be paid to the wife.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BLAKE:
This is an application by the wife. In her Application in a Proceeding filed 15 February 2024 (‘Application’), she sought the following orders. First, that the husband pay to her spousal maintenance. Second, an order that there be a departure from the administrative assessment of child support payable by the husband. Third, an order that the husband pay non-periodic child support. Fourth, that the husband pay to her an amount of $400,000 by way of partial property settlement.
The husband came to Court seeking the following. First, the dismissal of the applications for spousal maintenance and child support. Second, an order that he pay the wife $340,000 by way of partial property settlement. Third, an order that the parties amend minutes of meeting for the Salzer Family Trust (‘the Trust’) for the 2021/2022 financial year to state that the $80,000 currently to be distributed to the wife, be distributed as directed by the husband. Fourth, costs of the wife’s application.
During the course of the hearing, the parties agreed to orders that dealt with the wife’s application for a departure from the administrative assessment of child support and her application for non-periodic child support. The parties also agreed that the husband would make a payment to the wife of $340,000 by way of partial property settlement. Finally, the parties agreed to an order requiring them to amend the minutes of meeting for the Trust for the 2021/2022 financial year.
Accordingly, the issues remaining in dispute are these:
(a)whether the husband should be ordered to pay spousal maintenance of $395 per week as well as further spousal maintenance of $500 per week for rental costs incurred by the wife (with such amount to be payable as a lump sum twice annually); and
(b)whether, after paying $90,000 of the partial property settlement within seven days of the date of these orders, the husband is required to pay the balance of the partial property settlement within 45 days of the date of these orders (the wife’s position), or 90 days of the date of these orders (the husband’s position).
The wife relied on her Application, her affidavit and updated Financial Statement, all of which were filed in early 2024. She also relied on various documents tendered during the proceeding, as well as the affidavit of Mr D filed late 2023. The husband relied on his Response to the Application, his affidavit and updated Financial Statement, all of which were filed on 6 March 2024. He also relied on documents tendered during the proceeding. Both parties also filed an Outline of Case document.
BACKGROUND
The parties commenced living together in 2012, married in 2016 and separated in around early 2022. There are two children of the marriage. They are X born in 2018 and Y born in 2021 (collectively, the ‘children of the marriage’).
The wife has re-partnered with Mr D. They have a child together, E born in 2024. The wife is presently on unpaid parental leave. The husband has re-partnered with Ms F.
The husband and Mr D are business partners. The business relationship has soured and there are proceedings in other courts or forums concerning their business and commercial relationship.
The husband pays periodic child support of $866 per month. He also pays non-periodic child support.
In September 2023, the wife filed an application seeking that she be permitted to relocate with the children of the marriage from the City G area to Town H. Mr D currently lives in Town H with his parents.
On 22 November 2023, the wife filed a Financial Statement. In that document, she disclosed she earned total salary or wages before tax in the amount of $1,275 per week, and that she was employed by J Pty Ltd as a professional.
Following a hearing on 6 December 2023, a Senior Judicial Registrar of this Court permitted the wife to relocate to Town H. The husband sought a review of that decision. Ultimately, on 17 January 2024, Judge Demack upheld the review and restrained the wife from relocating from the City G area. Under the orders made by Judge Demack, X and Y effectively live with the parents on an equal shared care basis.
In her affidavit, the wife sets out the asset pool as follows:
Asset Ownership Value (E) Real property at K Street, Suburb L Mr Salzer $830,000 Real property at M Street, Suburb N Mr Salzer $625,000 O Pty Ltd atf O Trust Joint $187,237 25% interest in the P Unit Trust Mr Salzer $757,309 The Trust Mr Salzer $2,968,010+ Cash at bank Mr Salzer $N/K Cash at bank Me $NIL Motor Vehicle 1 Me $17,000 Motor Vehicle 2 Mr Salzer $35,000 Motor Vehicle 3 Mr Salzer $2,500 Motor Vehicle 4 Mr Salzer $25,000 GROSS ASSETS $5,447,056+ Liability Ownership Value (E) Loan secured against Suburb N Mr Salzer ($140,645) Loan secured against Suburb L (used to purchase property owned by O Pty Ltd) Joint ($218,631) Loan secured against Suburb L (used to purchase property owned by Trust) Joint ($219,544) TOTAL LIABILITIES ($578,820) NET NON-SUPERANNUATION ASSETS $4,868,236+
In his affidavit, the husband did not dispute the assets in the pool as set out by the wife, but did dispute the valuations. I am not able to resolve that issue, however, I note that the asset pool (whatever the specific valuations) would appear to be valued somewhere between $4.1m (based on the husband’s Financial Statement) and $4.9m (based on the wife’s affidavit).
The husband says that that the wife has already received $320,000 since separation, being a lump sum amount he paid to her of $200,000 on 25 April 2022, a partial property settlement of $25,000 ordered by the Court on 15 February 2023, and amounts she withdrew from his business accounts without his prior knowledge, being $50,000 on 28 February 2023, and $45,000 on 21 March 2023.
LEGISLATION
Section 72 of the Family Law Act 1975 (Cth) (‘Act’) sets out the right of a spouse to maintenance. The section provides as follows:
(1)A party to a marriage is liable to maintain the other party, to the extent that the first‑mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2). …
Section 74 of the Act then sets out the power of the Court in spousal maintenance proceedings. Relevantly to this application, section 74(1) of the Act permits the Court to ‘make such order as it considers proper for the provision of maintenance in accordance with this Part’.
As is apparent from the terms of section 72, the Court is required to take into account the matters set out in section 75(2) of the Act. Section 75(2) and (3) provide as follows:
(2)The matters to be so taken into account are:
(a)the age and state of health of each of the parties; and
(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; and
(c)whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(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; and
(e) the responsibilities of either party to support any other person; and
(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; and
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(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; and
(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; and
(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; and
(l)the need to protect a party who wishes to continue that party’s role as a parent; and
(m)if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(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; and
(naa)the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii)a person who is a party to a de facto relationship with a party to the marriage; or
(iii)the property of a person covered by subparagraph (i) and of a person covered by ubparagraph (ii), or of either of them; or
(iv)vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(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 to the marriage; and
(q)the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
(3)In exercising its jurisdiction under section 74, a court shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.
PRINCIPLES AND APPROACH
In In the Marriage of Bevan (1993) 120 FLR 283, the Full Court of the Family Court of Australia summarised the principles to apply when dealing with applications for spousal maintenance. The Full Court stated at page 42 as follows:
Taken together then, we would state the law as being that an award of spousal maintenance requires:
(1) a threshold finding under s 72;
(2) consideration of s 74 and s 75(2);
(3)no fettering principle that pre-separation standard of living must automatically be awarded where the respondent’s means permit; and
(4)discretion exercised in accordance with the provisions of s 74, with “reasonableness in the circumstances” as the guiding principle.
In MS & PS (2006) FLC 93-268, Coleman J identified four matters the Court is to have regard to when deciding whether to make an order for spousal maintenance. The four steps are:
(a)to what extent can an applicant for spousal maintenance support himself or herself;
(b)what are the applicant’s reasonable needs;
(c)what capacity does the respondent have to meet an order; and
(d)if steps 1-3 favour an applicant, what order is reasonable having regard to section 75(2) of the Act.
These four steps are cited with regularity. While a helpful guide, they are not a replacement for the words of the Act. On this point, see also Reithmuller G and Smith R, Family Law (7th ed, Thomson Reuters, 1991) at [19.80].
The onus of establishing a need for maintenance is on an applicant, in this case the wife. If the wife cannot establish an inability to support herself adequately, an order for maintenance will not be made: In the Marriage of Patterson (1979) FLC 90-705.
I now proceed to consider the Application and the evidence in light of the principles above.
IS THE WIFE UNABLE TO ADEQUATELY SUPPORT HERSELF FOR ONE OF THE STATED REASONS?
The competing positions of the parties
The wife submitted that the terms of section 72 of the Act are engaged for the following reasons:
(a)she has care of the two children of the marriage on an equal shared care basis;
(b)her circumstances require her to live in between City G and Town H to facilitate the orders. Those circumstances include that Mr D (as the father of E) is living in Town H, while the husband, as the father of the children of the marriage, is living in City G;
(c)she is unwell and her mental health has been affected;
(d)she has the care of an infant (E). It is conceded that E is not a child of the marriage but it is submitted it is the reality and represents another adequate reason why section 72 is engaged; and
(e)there are other adequate reasons that exist. These include her financial circumstances, that the husband is asset rich and controls the properties of the parties from which he derives income, and that he is the sole beneficiary of income generated from the assets of the marriage. This, in circumstances where both parties contributed to the marriage and its assets.
The husband submitted that the terms of section 72 are not engaged. He submitted that prior to the wife giving birth to E, the wife was adequately able to support herself without the need for spousal maintenance. He says she was working and earning an income sufficient to support herself until she gave birth to E, who is not a child of the marriage. He says the situation where the wife finds herself on parental leave is entirely her choice, and a situation of her making. Similarly, he says the wife’s decision to move to Town H and cancel her accommodation (among other things) in City G is a situation entirely of her making and a result of her choices. He says she does not have to live in between City G and Town H. He submits that these matters are important when one has regard to section 75(2)(o) of the Act and that when considered together with various other matters to which he referred, the wife has not demonstrated she is unable to support herself for any of the stated reasons in section 72(1) of the Act.
The wife’s circumstances
The wife’s evidence as to her overall circumstances may be summarised as follows:
(a)while in City G, she has not been able to obtain accommodation because she is not in receipt of any income;
(b)while in City G, she has been living with the children in motels and accommodation sourced through short stay accommodation. On occasion, she has had to check out of the hotels and been forced to try and entertain the children in local parks during the day times;
(c)she is suffering from extreme guilt in relation to the children’s living arrangements;
(d)for the last eight weeks, her only income has been the $866 per month that the husband is paying in child support, together with ad hoc support she has received from Mr D;
(e)she has had to borrow funds from her father for legal fees and living expenses;
(f)she intended to take 12 months parental leave, but now accepts she will be required to return to work earlier than originally intended;
(g)her engagement as a contractor at Q Company was terminated by the husband and his business partner (Mr R) in mid-2023, and that her net income has decreased;
(h)during the marriage she received dividends and distributions from the various investments owned by the parties and she no longer receives these; and
(i)she has $688.15 in her bank account.
The wife has recently filed two Financial Statements in these proceedings, one in 2023, prior to the birth of E (‘First Financial Statement’), and one in 2024, post the birth of E (‘Second Financial Statement’). In 2023, the wife disclosed income of $1,486 per week comprised of $1,275 in wages, $11 in interest, $200 in child support, and expenditure of $2,001 per week. Of the $2,001 in expenses, $1,198+ were the itemised expenses at Part N of the First Financial Statement and of that amount, $664 were her personal expenses and $534+ were expenses for the children of the marriage. In her Second Financial Statement in 2024, her income is stated as being $205 per week (comprised of the husband’s child support payments and interest), with total personal expenditure of $1,975 per week. Of those weekly expenses, a total of $1,491 are the expenses itemised at Part N of the Second Financial Statement and of that amount, $650 are expenses for her and $841 are expenses for the children of the marriage and E.
Income or funds available to the wife
At present, the wife is not earning income from employment. She receives child support from the husband of $204 per week, [1] or $866 per month.[2] She has applied for paid parental leave (‘PPL’) payments through Centrelink. The amount she will receive per week (once processed) is $761 net of tax. The wife also discloses that she has received ad hoc payments from Mr D totalling on average, around $350 per week.
[1] Item 13 of the wife’s Second Financial Statement.
[2] Part O (iii) of the wife’s Second Financial Statement.
The PPL payments
There is a question as to whether I am required to take account of the PPL payments when exercising jurisdiction under the Act, given the terms of section 75(2)(f) and section 75(3). The parties’ submissions on this point were surprisingly brief given the complexity of the issue, and the significance of it to the matter.
The husband submitted there was no evidence before the Court to enable it to be satisfied that PPL is an ‘income tested pension, allowance or benefit’ under section 75(3) of the Act. The husband submitted that the onus rests on the wife to make good the proposition that it is, and she has failed to meet the onus cast upon her.
The wife in response handed to the Court a copy of a letter from Centrelink dated late 2023. That letter makes clear that the wife has qualified, subject to completing certain documents, to 90 PPL pay days. The letter also makes clear that the wife ‘must be on leave from work or not working, unless for an allowable reason’ in order to be paid PPL. The wife submitted that this should satisfy the Court that PPL falls within the category of benefits caught by section 75(3).
Neither of the above submissions deal with the relevant law.
The term ‘income tested pension, allowance or benefit’ as used in section 75(3) of the Act is defined in section 4(1) of the Act as follows:
means a pension, allowance or benefit prescribed, or included in a class of pensions, allowances or benefits prescribed, for the purposes of this definition.
Regulation 12A of the Family Law Regulations 1984 (Cth) (‘Regulations’) prescribes income tested pensions, allowances or benefits for the purposes of section 4(1) of the Act. Regulation 12A is as follows:
For the purposes of the definition of income tested pension, allowance or benefit in subsection 4(1) of the Act, each of the following pensions, allowances or benefits is prescribed:
(a) the following entitlements under the Veterans’ Entitlements Act 1986:
(i)a service pension within the meaning given by subsection 5Q(1) of that Act;
(ii)a veteran payment within the meaning given by subsection 5Q(1) of that Act;
(iii)income support supplement under Part IIIA of that Act;
(b)a social security pension or a social security benefit within the meaning given by subsection 23(1) of the Social Security Act 1991;
(c)a family tax benefit within the meaning given by subsection 3(1) of the A New Tax System (Family Assistance) Act 1999, the Part A rate of which is higher than the base rate under clause 4 of Schedule 1 to that Act;
(ca)so much of an allowance under the Aboriginal study assistance scheme, within the meaning given by subsection 23(1) of the Social Security Act 1991, as is means tested;
(d)the amount of a boarding allowance under the Assistance for Isolated Children Scheme, referred to in paragraph (a) of the definition of current special educational assistance scheme in subsection 3(1) of the Student Assistance Act 1973, that is greater than the non means tested amount of the allowance;
(e) a payment under the scheme known as the New Enterprise Incentive Scheme;
(ea) a payment under the program known as:
(i)the Self‑Employment Assistance program; or
(ii)if the Self‑Employment Assistance program is known by another name—that other name;
(f)an AUSTUDY benefit under Part 2 of the Student and Youth Assistance Act 1973 as in force immediately before 1 July 1998.
The PPL payments that the wife has applied for arise from the operation of the Paid Parental Leave Act 2010 (Cth) (‘PPL Act’). The letter from Centrelink to the wife makes that clear. The PPL Act establishes a PPL scheme for the payment of parental leave pay. Nothing in the PPL Act provides that PPL payments are to be treated as an ‘income tested pension, allowance or benefit’ for the purposes of the Act or the Regulations.
Returning to the Regulations, nothing in subparagraphs (a)–(f) of Regulation 12A identify a PPL payment made under the PPL Act as an income tested pension, allowance or benefit.
I have separately considered whether a payment made under the PPL Act may be considered a ‘social security pension’ or ‘social security benefit’ within the meaning of subsection 23(1) of the Social Security Act 1991 (Cth) (‘SS Act’).
A ‘social security pension’ is defined as:
(a) an age pension; or
(b) a disability support pension; or
(d) a carer payment; or
(e) a pension PP (single); or
(ea) a sole parent pension; or
(k) a special needs pension.
The only apparently relevant limb of the definition above is the reference to ‘pension PP (single)’ in subparagraph (e). Section 18 of the SS Act defines ‘pension PP (single)’ as meaning a parenting payment whose rate is worked out under the Pension PP (Single) Rate Calculator in section 1068A. This is not a payment paid under the PPL Act.
A ‘social security benefit’ is defined as:
(aab) youth allowance; or
(aac) austudy payment; or
(a) jobseeker payment; or
(d) special benefit; or
(f) benefit PP (partnered); or
(g) parenting allowance (other than non‑benefit allowance).
The only apparently relevant limbs of the definition above are ‘benefit PP (partnered)’ in subparagraph (f) or ‘parenting allowance (other than non-benefit allowance)’ in subparagraph (g). The term ‘benefit PP (partnered)’ is defined in section 18 of the SS Act as meaning a parenting payment whose rate is worked out under the Benefit PP Partnered Rate Calculator in section 1068B. This is not a payment paid under the PPL Act.
The term ‘parenting allowance (other than non-benefit allowance)’ is defined in section 23(1) of the SS Act as meaning ‘a parenting allowance under this Act as previously in force’. The superseded version of the SS Act defined ‘benefit parenting allowance’ as meaning a parenting allowance that, under Module B of the Parenting Allowance Rate Calculator at the end of section 1068A, is a benefit parenting allowance. I note that this is not a PPL payment. The benefit parenting allowance under the superseded version of the SS Act was repealed by the Social Security Legislation Amendment (Parenting and Other Measures) Act 1997 (Cth) at items 310-311 as from 20 March 1998. The benefit parenting allowance was replaced by the parenting payment from 20 March 1998. The SS Act now defines ‘parenting payment’ as meaning either a pension PP (single) or a benefit PP (partnered). A PPL payment does not fall under either of these definitions.
When these matters are considered, I find that the PPL payments that the wife will receive are not an ‘income tested pension, allowance or benefit’ for the purposes of sections 4(1) and 75(3) of the Act. Accordingly, from the time the wife commences receiving PPL payments, I am required to take them into account under section 75(2)(f) of the Act.
The payments from Mr D
In Part F of her Second Financial Statement, the wife has disclosed that Mr D contributes $350 per week for the payment of expenses for E. The nature of these payments, that the wife describes as ‘ad hoc’, gives rise to a number of issues.
The first issue concerns whether this payment is being applied only to E. The clear answer to that is no. In Part O of her Second Financial Statement, the wife clarifies that she has used the funds from Mr D to also purchase groceries for the family (including the children of the marriage) and pay bills when she has no funds in her bank account. In her affidavit, she repeats these statements, and says further that the funds have been used by her for filling up her car with petrol.
The next issue is what portion of the $350 per week is being applied to E, and what is available to the wife. On this issue, the husband referred to the amounts the wife claimed as expenses for the children of the marriage in 2023, and compared that to the amount claimed as expenses for the children of the marriage and E in 2024. The husband submitted that once additional accommodation costs in City G are excluded, the difference of $46-49 per week could be attributed to E with the remainder being available to the wife. The wife in her Second Financial Statement attempted to divide the expenses for gas, electricity, clothing and medical expenses as between the three children. On the basis of this information from the wife, expenses for E would equate to $49 per week.
The difficulty with accepting the proposition that E’s expenses amount to approximately $49 per week is that it obviously excludes other expenses which are relevant and applicable. Household supplies, chemist expenses, toiletries, and motor vehicle maintenance are all expenses in which it is reasonable to infer E has a share.
In her Second Financial Statement, the wife says she pays for private health insurance for herself, the children of the marriage, and E. I am prepared to accept that the payments made by Mr D go some way to covering the cost of private health insurance for the wife and E (given what she says her current income is), and that his contribution also covers other medical expenses the wife and E, as a newborn child, are likely to incur. The wife says as much in her affidavit, where she refers to Mr D paying for out-of-pocket medical costs and other obstetric costs.
There is then the fact that Mr D is living in Town H and is the father of E. It may be inferred that a large proportion the wife’s motor vehicle expenses and petrol expenses are incurred in travel to and from Town H, in order to enable E to see Mr D. Some of the amount Mr D contributes must be taken to cover these expenses. Indeed, the wife makes clear she has used Mr D’s payments to fill her car with petrol.
There is then the question of the rent paid by the wife. It is artificial to simply exclude the rent as the husband suggests, in order to suggest E’s expenses are no more than $49. Some part of Mr D’s contribution must be taken to include contributing to rent for E in Town H and in City G.
When these matters are considered, I would allow for $300 of the $350 paid by Mr D as being applied to E. I acknowledge this is an arbitrary figure, but it is one that takes into account the other matters to which I have referred, recognising the state of the evidence before me on this issue.
The third issue is how the amounts from Mr D should be treated and whether they will continue. Both parties made submissions that Mr D was doing what he is required to do and what he should do – covering expenses for E. No express submission was put on behalf of the husband that I should find a de facto relationship exists between Mr D and the wife. The husband submitted, however, that I should assume that the level of support provided by Mr D would continue. The wife made no submission that I should exclude the amount paid by Mr D, but submitted that Mr D did not have the means to pay. In her affidavit, however, the wife says Mr D is providing all he can currently afford to provide.
Mr D did not file an affidavit in relation to the issues before me, but he did file an affidavit earlier in these proceedings which was relied on by the wife. In that affidavit, Mr D describes himself as the partner of the wife and says he looks forward to building a life with her.
In his affidavit, Mr D also gives evidence that he is currently residing with his parents in Town H, that he cannot financially return to the City G or Town S area, and that he has been employed at T Company, Town H as a retail worker since early 2023.
On these matters, I accept the husband’s submission, and accept the level of support provided by Mr D will continue. While the wife describes the amounts received as ad hoc, she does not suggest in her affidavit that it is likely to end, she simply says he is paying all he can afford to pay. The payments are clearly being made by Mr D and received by the wife, and they would appear to be occurring regularly enough for the wife to arrive at an average weekly amount of contribution from him. I do not accept the wife’s submission that Mr D does not have a capacity to make the payments. While there is evidence before the Court of some of the difficulties Mr D has faced in City G and that he is currently living with his parents in Town H, it is equally the case that Mr D has been employed in the same position since early 2023. He has just started a new business which one would expect would earn more income. Importantly, and irrespective of any difficulties, he has made the payments to the wife, and she has disclosed them. There is, in these circumstances, every reason to consider that Mr D will continue to make the payments, particularly in circumstances where he gives evidence about the serious nature of his relationship with the wife.
The child support payments made by the husband to the wife
The parties agreed to orders that there be a departure from the administrative assessment of child support payable by the husband and that the husband pay periodic child support of $100 per week, per child. The parties also agreed to orders that the husband pay non-periodic child support. Despite these matters, no party addressed me on the extent of the interaction between the child support payments made by the husband and received by the wife and the children’s expenses, and the wife’s application for spousal (her) maintenance.
The principles in relation to child support payments and their effect on a claim for spousal maintenance have been addressed in various cases, including Stein v Stein (2000) 25 Fam LR 727 (Kay, Holden and Dessau JJ) at [47], [49], [56] – [57], Carson & Hillman [2019] FamCAFC 42 (Strickland, Kent and Watts JJ) at [61] and Jabara & Gaber [2021] FedCFamC1A 26 (Ainslie-Wallace J (sitting alone in an appellate capacity) at [30]-[31]). A more recent practical application of these principles occurred in Kensit & Kensit [2022] FedCFamC1F 633 where Brasch J at [58] – [59] and [62] excluded from the wife’s income the amount she received from child support from the husband, and excluded from the Part N of the wife’s Financial Statement, expenses claimed for the children, when assessing an application for spousal maintenance. I propose to follow the approach of Brasch J in this matter.
Summary of the wife’s income position
Given the matters above, the weekly income or funds currently available to the wife is $51, comprising the $50 per week from Mr D and $1 in interest.
Once the wife starts receiving PPL payments, the weekly income or funds available to her will be $812 per week, comprising of $761 per week of PPL payments, and the $51 per week.
The wife’s expenses
Given my earlier comments in respect of child support and the children’s expenses, I will only have regard, in Part N of the wife’s Second Financial Statement, to the column headed ‘FOR YOU’. I disregard the expenses of the children in assessing the wife’s claims for spousal maintenance. I am disregarding expenses claimed for the children of the marriage (given the husband’s payment of periodic and non-periodic child support), and the expenses claimed for E (that Mr D is meeting).
The wife says that she is required to maintain a residence in Town H and in City G to give effect to the current parenting orders. The husband is critical of the wife moving to Town H ‘precipitously’ (as he put it) following the orders of the Senior Judicial Registrar in December 2023. He says this situation, and the additional expense, is a situation that she has created and the costs of it should not fall at his feet.
The Senior Judicial Registrar made orders on 6 December 2023 that permitted the wife to relocate to Town H. The husband says, in his affidavit, that he applied for a stay of the orders, but then withdrew the application for the stay on 15 December 2023. He says the application for the stay was withdrawn following him applying to review the orders of the Senior Judicial Registrar on 12 December 2023. Further, he says he wrote to the wife on 8 December 2023, notifying her he intended to seek a review of the Senior Judicial Registrar’s orders. I note that the letter of 8 December 2023 to which the husband refers is not in evidence before me.
When these matters are considered, the situation is not as simple as the husband makes out. He had the opportunity to apply for a stay of the 6 December 2023 orders. He withdrew that application. He filed the review application on 12 December 2023, six days after the orders. While all this was going on, the wife had the benefit of the orders of the Senior Judicial Registrar.
Furthermore, there is no principle that suggests that the wife is not permitted to move on with her life with a new partner. Mr D is now in Town H. That he is there for what he says are social or financial reasons is also not a situation of the wife’s making.
In these circumstances, I do not accept the husband’s submission that the situation of the wife moving to Town H and acquiring accommodation there is one that is entirely of her own making.
The evidence from the wife is that she has entered into a 12-month lease with her mother and is living in her mother’s investment property in Town H at a cost of $300 per week when the children of the marriage are in the care of the father.
In terms of her accommodation in City G, in Part N of her Second Financial Statement, the wife has disclosed ad hoc accommodation costs for her of $120 per week. In her affidavit, she says she has applied to rent properties in the City G area that cost between $300 per week and $480 per week. She also gives evidence that the property she was previously staying in, prior to moving to Town H, is now being rented for $440 per week. From this evidence, I accept that the wife’s accommodation costs in City G for her are $120 per week.
The husband submitted that he could not imagine the wife’s mother holding her to a 12-month lease at $300 per week in Town H if she were living only in City G. The effect of the submission, therefore, was that the wife’s expenses are, in reality, only what she needs to pay to live in City G and she could walk away from her commitments in Town H to her mother (as lessor) and to Mr D (as her partner and father to E). I accept the orders do not require the wife to maintain two residences. I do not accept, however, that the wife’s mother will release the wife from her 12-month rental agreement. There is simply no evidence to that effect. I accept the wife is required to fulfil all rental commitments in Town H at least for the duration of her lease, and that she also needs to find accommodation in City G to facilitate the living arrangements for the children under the current orders, while also ensuring Mr D sees E. Clearly the wife’s need to fund accommodation in City G to facilitate the parenting orders is affected by her commitments in Town H, and vice versa. It is not ideal for the children to live in hotels or short stay rental accommodation when in City G, and to spend some or all of their daytimes in parks until the wife can check into new accommodation. I note the husband says in his affidavit that he does not want this to occur.
While the wife’s evidence is that rent in Town H is $300 per week, she has not apportioned that amount between her and the children. Given the parenting orders, the accommodation in Town H is, in reality, only for the wife and E. Given E’s age, I would apportion two thirds of the rental cost in Town H to the wife ($200 per week) and one third of the Town H rental costs to E ($100 per week).
Item 26 of the wife’s Second Financial Statement discloses she is paying for private health insurance for herself, the children of the marriage and E in the amount of $99 per week. In his affidavit, the husband discloses that he pays private health insurance for himself and the children of the marriage in the amount of $157.50 per fortnight. Quite why both parties are paying private health insurance for the children of the marriage is not clear. Among the orders agreed to by the parties by consent before me, was that the husband would pay non-periodic child support for the children of the marriage by way of hundred percent of the private health insurance premiums to cover them. In all these circumstances, I do not accept that the wife’s private health insurance premiums are or need to be $99 per week to cover the children of the marriage. The husband is paying health insurance for the children of the marriage. I am satisfied that Mr D is making a contribution that goes to cover the private health insurance of the wife and E. In these circumstances, the private health insurance expense is not a reasonable expense.
In item 29 of the wife’s Second Financial Statement, she discloses paying $50 per week as repayment of a debt to the Australian Taxation Office. The quantum of the debt to the Australian Taxation Office appears to be $2,265 according to the wife’s Second Financial Statement. In the circumstances, I accept the wife has that debt and will continue to need to meet that expense on a weekly basis. I do not accept the submission of the husband that that expense will fall away because the wife will discharge the total quantum of any tax debt once she receives the part property payment under the orders I will make. There is no evidence to that effect.
Other than the matters I have referred to above, the husband did not contend any other expenses of the wife were unreasonable.
Summary of wife’s expenses
When the above matters are considered, the wife’s reasonable needs and weekly expenses are as follows: $200 rent per week for the property in Town H, $20 per week for car insurance, $15 per week for motor vehicle registration, $50 per week as payment for a tax debt, and $650 for herself as set out in Part N (which includes her rent in City G). The total reasonable expenses of the wife are therefore $935.
Is the wife unable to support herself for one of the stated reasons in section 72 of the Act?
I have considered the evidence of the wife in relation to the state of her health. I have also considered the post-natal screening annexed to her affidavit. I have little doubt the wife is under a significant degree of stress and that it may be impacting her health, including her recovery from giving birth. I am unable to conclude, however, that she is physically or mentally incapable of appropriate gainful employment. There is simply no evidence from a medical expert that indicates the wife is incapable of appropriate gainful employment. The wife does not satisfy subsection 72(1)(b).
Section 72(1)(a) is concerned with the care and control of children of the marriage. Both parties share the care of X and Y. The husband submits that prior to the wife giving birth to E, she was working and was able to support herself. The husband invites the Court to conclude that but for the birth of E and the wife taking leave (which was a choice by the wife), the wife would be able to support herself. He says, in effect, that to the extent there is a shortfall between the wife’s income and expenses, that shortfall should not be laid at his feet.
The husband’s submission above is to be treated with caution. The First Financial Statement discloses the gross income of the wife as being $1,286 (being $1,275 wages and $11 interest and excluding child support). The First Financial Statement discloses her expenses as being $1,467 comprising of $410 for rent, $257 for tax, $17 for car insurance, $5 for contents insurance, $99 for health insurance, $15 for motor vehicle registration and $664 in Part N being expenses for her alone (excluding the expenses of the children). The position on its face, therefore, is that even before she ceased work and gave birth to E, the wife was facing a shortfall of $181 between her income and expenses. I accept that this shortfall takes into account the wife’s claim for private health insurance ($99 per week) that I have not permitted. It also does not seek to apportion the rent cost between the wife and the children of the marriage. Allowing even for these matters, however, it is not at all clear the wife was able to support herself prior to the birth of E. I reject the husband’s submission.
There is then the question of whether there is any other adequate reason why the wife is unable to adequately support herself. I am satisfied that in the circumstances of this case, there are other adequate reasons why the wife is unable to support herself. Those reasons are as follows:
(a)the wife has the care of three children, including a very young infant. True it is that section 72(1)(a) of the Act refers only to children of the marriage, however, I am also required to take account of section 75(2)(l) which is ‘the need to protect a party who wishes to continue that party’s role as a parent’. I note that section 75(2)(l) does not limit the role of a parent to children of the marriage. It is plainly the wife’s desire to be a parent at this time not only to the children of the marriage, but also to newly born E. The parenting role in this respect not only encompasses what I have said above, but ensures the children of the marriage adjust to life with their new half-sibling;
(b)I am also required to take account of section 75(2)(d), that is, both parties’ commitments that are necessary to enable them to support themselves and any child that the person has a duty to maintain. Clearly, the wife is not able to maintain herself, given the evidence. Further, her financial position means that her ability to maintain the children of the marriage and E is compromised;
(c)there are additional rental costs that will be incurred because of the wife’s movement between City G and Town H. I have referred earlier to the circumstances in which this occurred. It is an unfortunate situation. This is a significant additional expense. The wife would not have been able to meet it had she continued working. The fact that this has arisen around the time she likely commenced parental leave has exacerbated the situation. The wife ought not carry the consequence of this by herself, given the circumstances of how the wife came to incur additional cost in Town H, and when one has regard to section 75(2)(o);
(d)this is a relationship of around ten years duration, and a marriage of around five years duration. There are two children of that marriage. No doubt there are disputes about who made what contributions to the marriage. Given the duration of the marriage, however, it is likely that both parties contributed to the income, property and financial resources of the marriage. I am required to take these matters into account given the terms of section 75(2)(j);
(e)the wealth of these parties is to be found in the assets they control. As matters stand, it is the husband that has control over those assets. There is evidence before the Court (that I expand upon below) that shows that the husband is drawing upon income generated by those assets to fund himself. This includes funding his representation in these proceedings. That of itself in my view, but certainly in conjunction with the other matters I have referred to above, leads me to conclude there are other adequate reasons why the wife is unable to support itself; and
(f)it is by no means clear that the wife was adequately able to support herself prior to ceasing work and giving birth to E.
Summary of the wife’s position
The wife’s position then, is as follows.
Currently, she has income of $51. She has expenses of $935 per week. The shortfall is $884 per week.
Once the wife receives PPL payments, she will have income or access to funds of $812 per week (being the $50 from Mr D, the $1 in interest and $761 in PPL). Her expenses will be $935 per week. The shortfall will be $123 per week.
Given these matters, I am satisfied that the wife is presently unable to adequately support herself.
WHETHER THE HUSBAND IS REASONABLY ABLE TO MAINTAIN THE WIFE
The husband submitted he is not in a financial position to pay maintenance to the wife. The wife disputed that contention. To determine the actual position, it is necessary to have regard to a number of matters, including the personal income of the husband, income from the Trust as well as other sources, what the evidence is about the way the husband manages his funds and moves his funds between accounts, as well as other evidence that may provide some insight into the financial position of the husband.
In his affidavit, the husband says, in respect of his 2023 tax return, that his ‘taxable income for the 2023 financial year is $113,854’. He says based on this, his gross income is approximately $2,819 per week and his expenses including child support payments of $200 a week, total $3,651.75. According to his affidavit therefore, the husband says he is running a weekly deficit of $832.75.
The husband filed his Financial Statement on 6 March 2024. In his Financial Statement, the husband discloses an average weekly income of $2,373.84 per week before tax or an amount of approximately $123,000 annually. In the same document, he claims total expenditure of $3,651.75 per week. According to his Financial Statement then, the husband is running a weekly deficit of $1,277.91.
The question that arises from the information provided by the husband above is whether it paints an accurate picture of his financial position. The wife contends that it does not.
The wife tendered to the Court, bank statements from the husband’s personal account, the account for U Company, the Bank Account Trust (an account of the Trust), and the Trust bank account. In respect of these bank statements:
(a)the husband’s personal bank account shows deposits into it over the period 30 December 2023 to 21 February 2024 from V Pty Ltd, Q Company, and rent from a property at Suburb N. These entities are connected with the Trust. The total amount of these deposits over the period is approximately $19,990. There is a curiosity about the payments the husband has received into his personal account from Q Company:
(i)there are three payments from Q Company to the husband’s personal account. Those deposits are for the amounts of $3263.91 on 2 January 2024, $3613.40 on 2 January 2024, and $3613.40 on 13 February 2024;
(ii)the husband says in his affidavit that he is temporarily acting as the Manager for Q Company and he expects to conclude in that role ‘next month’. He says that from taking that role, he has been paid $3,700 gross per month;
(iii)the amounts paid to the husband’s personal account from Q Company are not consistent with the amount the husband sets out in his affidavit;
(iv)the income from Q Company has not been disclosed in the husband’s Financial Statement filed 6 March 2024, even though on his own evidence, he is performing that role until early 2024;
(b)the account for U Company shows a deposit on 24 November 2023 of $12,000 from the Salzer Family Trust Bank Account. The statements also reveal the Salzer account being used to cover a range of what would appear to be personal expenses including for various retail outlets as well as hotels and taverns;
(c)the Bank Trust account shows a payment on Wednesday, 10 January 2024 of $12,100 for what would appear to be Counsel’s fees (noting that there was a hearing before the Court on 11 January 2024); and
(d)the Trust account shows deposits in from a range of sources as well as payments out, including to the husband’s personal accounts.
A number of matters become apparent when the information above is considered. First, the husband’s Financial Statement is not accurate or complete, at least insofar as it fails to disclose his income from Q Company. Second, the husband is using funds in the Salzer account to pay for personal expenses. Third, the husband is using the Bank Trust Account to meet legal fees. He is not drawing that from income. Clearly, the husband is drawing on other sources of funds to pay his expenses and is not reliant solely on his personal income.
The husband sought to downplay the significance of what the bank statements disclosed. He submitted, among other things, that he had disclosed in his affidavit that it was his practice to continually move money around to offset interest payments on loans, or to obtain better financing rates. His Counsel also ultimately was prepared to add together the husband’s personal income and trust income at the hearing.
There are two problems with those submissions. First, the first submission does not accord with the evidence. In his affidavit, the husband deposes to a practice of moving money around ‘prior to separation’. He makes no mention of continuing that practice post separation. In respect of the second submission above, while the husband was prepared to add his personal income and trust income together at the hearing, I note the following. First, this only occurred following the wife being given access to the bank statements, which occurred on the day before the hearing. Further, it is not the position that he put in his Financial Statement or affidavit that was filed in advance of the hearing before me.
There is then the question of the actual financial position of the Trust. The Court has before it the Financial Statements for the Trust for the financial years ended 30 June 2022, and 30 June 2023. The FY2022 Financial Statements for the Trust have not been finalised, but are accepted by the parties as being correct, save and except for the purported distribution of funds to the wife. The FY2023 Financial Statements for the Trust have not been finalised and are in draft form.
The Financial Statements for the Trust disclose the following:
(a)for the FY2021, total income was $245,173 and profit after expenses, but before distribution was $179,460;
(b)for FY2022, total income was $293,057 and profit after expenses, but before distribution was $201,188;
(c)for FY2023, total income was $174,479 and profit after expenses, but before distribution was $21,999;
(d)for FY2022, distributions were recorded as being made to Ms W, Mr Z and the wife. The husband accepts that the amounts were not actually paid to those persons; and
(e)for FY2023, distributions are recorded as being made to Ms W and Mr Z. Again, it seems to be accepted that these amounts will not be actually paid to those persons.
The husband says the best evidence of the income generated from the Trust is what is set out in the FY2023 Financial Statements. He submits that once the profit from the Trust for FY2023 is added to his income, that effectively raises his income to around $135,000 per annum. When his expenses are taken into account, he says he will not have the capacity to maintain the wife.
It is of some note that the profits of the Trust have significantly deteriorated in the last financial year. It is notable that that deterioration coincides with the period following separation, and also with the period when these proceedings were first commenced. The husband asserted that there were explanations for that deterioration. He pointed, among other things, to franked dividends from Q Company in 2021 of $94,595 which increased the income of the Trust that year, and which he said was not repeated in 2022, and would not be repeated again, given it is in the process of being wound up. He said the income in 2022 was driven by a one-off capital gain of $130,325. He said the increase in interest expenses to ‘AA Company’, ‘BB Company’ and ‘CC Company’ in FY2023 (which had the effect of reducing profit of the Trust) was explainable by increases in interest rates.
I note the following in relation to the husband’s submissions above:
(a)there is no evidence before me as to the nature of the capital gain of $130,325 in FY2022 or whether it is a one-off matter;
(b)accepting that the dividend from Q Company may not be repeated given the dispute between the owners in respect of that business, I note the following. First, while the husband says the business is being wound up, he also says it would be his preference that he and Mr R (his business partner) pay Mr D out. If that is the case, there may well be future dividends from Q Company, though I accept there will also be a cost with paying Mr D. Second, if the business is indeed wound up, I note the husband says that Mr D will receive a substantial share. It is not clear how that would arise or what that means, or whether the husband may too receive a share from the wind up; and
(c)the interest charges for the items identified appears to have doubled between FY2022 and FY2023. The only explanation given for that in submissions (not evidence) was that interest rates had increased. No evidence is before me as to effective interest rates and how they changed in FY2022 and FY2023, or whether the rates doubled in that time.
The apparent deterioration in the income of the Trust since separation is not the only example of the husband’s income having deteriorated since separation. In her affidavit, the wife deposes that she saw a draft of the husband’s tax return for the financial year ending June 2021. The wife says the husband’s draft tax return for the financial year ending June 2021 disclosed the husband had an income of $207,366. The husband’s evidence is that this figure was included in a draft he prepared of the 2021 tax return prior to him and the wife separating, and that the tax return ultimately filed for the financial year ending June 2021 disclosed an income of only $88,196.
The significant deterioration in the position of the Trust and the apparent significant deterioration in the husband’s personal income (both of which have occurred since separation) cause me to doubt the veracity of the husband’s statements as to his real financial position.
I also doubt the veracity of what the husband claims to be his real financial position when regard is had to the position the husband took in respect of a property at DD Street, Town EE. Notation A to orders made by the Court on 15 February 2023 record that ‘the wife contends that the parties have 1/3 beneficial interest in the property…The husband denies that contention’. In paragraph 28 of his affidavit, however, the husband now appears to have resiled from that position, indicating that the sale of that property is now a matter of dispute between him, Mr D and one of his business partners, and that it is his and his business partner’s position that the property was owned in partnership.
When these matters are weighed, I do not accept the husband’s explanations as to why the income for the Trust has deteriorated in FY2023.
There are then three other matters that the wife relies on to suggest that the husband has access to sources of funds over and above what he claims in his affidavit and Financial Statement.
First, the wife says that at the interim defended hearing on 29 November 2024 [sic], the husband’s Counsel indicated that the husband could provide lump sum financial support to assist her to remain living in City G. The wife says that he now refuses to do so unless it forms part of any property settlement. It is difficult to place much weight on what occurred in late 2023. I do not have the transcript of what occurred or what was said. Clearly the husband has offered money, but there has been a dispute as to how that amount should be characterised.
Second, the wife says the husband engaged King’s Counsel for the review hearing before Judge Demack on 11 January 2024 at a cost of at least $11,000 for the day. In his affidavit, the husband points out that the wife also engaged King’s Counsel on that day for a similar fee. The wife in reply says that before me the husband has once again engaged King’s Counsel, but she has not.
This is clearly a highly litigious matter. What is beyond dispute, however, is that the husband has now engaged King’s Counsel twice in the space of two months. If the daily fee is $11,000 (and no contention was advanced to the contrary), then the husband, notwithstanding what he says is his restrictive financial position, has been able to find significant amounts to pay King’s Counsel at reasonably short notice twice in the last two months. He would not be able to afford to do so if his income was as restricted as what he claims.
Third, the wife’s evidence is that on 11 January 2024, King’s Counsel for the husband submitted on his behalf that if she were permitted to relocate to Town H, the husband would obtain a rental property in Town H so that he could visit and spend overnight time the children on school nights during the school term. The husband did not respond to this either in his affidavit or in the submissions. I am prepared to accept in those circumstances that the husband made that offer. It is again an indicator that the husband has access to other sources of income.
Finally, during the course of the hearing, I asked the husband to file a Costs Notice that complied with the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) and in particular, identified the source of the funds he is using to pay his legal costs. That Costs Notice discloses the total estimated cost for the husband of the interim defended hearing dispute before me as being $16,000 inclusive of $13,200 in Counsel’s fees. It also discloses the husband has incurred $285,683.53 in costs and disbursements up to 12 March 2024 and that estimated costs to final hearing are $169,450. The updated costs notice filed by the husband identifies the source of payment of legal fees in the Costs Notice as being ‘from the Respondent Father’s savings and resources, including cash at bank and earnings’. No further detail is provided. It is apparent from what is set out above that the husband is able to fund the not-insignificant costs of this litigation from what he says are his savings, resources and earnings. This contrasts with the position of the wife, who in her costs notice, has disclosed her source of funds as being cash at bank, and significantly, a loan from her father.
It necessary to also consider the husband’s capacity to pay having regard to the express factors in section 75(2). On these matters, I note that the husband has care and control of the children of the marriage when they live with him. No doubt, he is paying for their expenses during the times they are with him, in addition to the child support he is paying to the wife. The husband needs to be able to maintain himself. The evidence is that he is doing so and for the reasons above, I consider he has the capacity to do so. I have also considered all of the circumstances of this case, including that the wife’s position has been brought about because she is on parental leave to care for E, who is not the husband’s child.
When all of these matters are considered, I find as follows. I do not accept the husband’s evidence that his income is what he claims it to be in his affidavit and his Financial Statement. The level of income disclosed by the husband in his affidavit and Financial Statement is not accurate. The husband clearly accesses funds from other sources including his businesses, and the Trust, to meet his expenses. He is able to draw upon those resources at will and at short notice to fund very significant costs, including his legal fees. The documents, particularly the bank statements, bear this out. As do the husband’s actions. Those actions include being able to access funds to pay significant legal fees in quick succession and at short notice, what he says is the source of his ability to fund his legal fees, and his statements to the Court about his capacity to be able to fund himself additional accommodation at Town H. For all of these reasons, the husband has the capacity to pay maintenance to the wife in the sums she claims in her application, as well as to continue to maintain himself and the children.
WHAT ORDER IS REASONABLE?
I am satisfied that the wife is unable to support herself adequately for one of the stated reasons in section 72 of the Act. I am satisfied that the husband is reasonably able to maintain the wife in the amount she claims. The issue then is what order is proper for the provision of maintenance, having regard to the factors in section 75(2) of the Act.
There are a number of factors (when one has regard to section 75(2)) that need to be weighed in assessing the level of spousal maintenance. The wife does not have funds to maintain herself. Further, her inability to maintain herself will necessarily impact on her ability to care for the children of the marriage, and also for E. The wife, through her actions, clearly wishes at this time to have a parenting role for E and the children of the marriage that does not involve paid work, and the Court must have regard to the need to protect a party’s role as a parent for those who wish it. It is also the case that the wife has likely contributed to the assets of the marriage (with the exact contribution level to be determined at trial) and that the assets of the parties are presently within the control of the husband. Consideration also has to be given to a standard of living for the wife that is, in all the circumstances, reasonable.
As far as the husband is concerned, the Court needs to weigh the overall justice of the case in circumstances where the wife is not working because she has had a child with Mr D. The Court also needs to weigh his ability to support himself, and his commitments to support the children of the marriage, as well as him having a standard of living that is, in all the circumstances, reasonable. Finally, the Court needs to weigh the wife’s capacity for work now (in the immediate aftermath of birth) and then in the future, and her ability to support herself in the future.
Deciding the quantum of spousal maintenance to award in this case is made challenging because there are three distinct periods of time that need to be considered. The first period is the present period when the wife is not working and not in receipt of PPL payments. The second period is when the wife starts receiving PPL payments. The third period is when the PPL payments end, and whether the wife works or does not work following the end of PPL.
In the first period, I consider it proper and reasonable that the husband pay spousal maintenance to the wife of $884 per week. This will cover the shortfall between her reasonable expenses and her income. It takes into account the support provided to her by Mr D. It excludes the child support payments and all of the children’s expenses. I have also weighed the fact that it will likely be for a short period until the PPL payments commence. I do not delineate between rental expenses and other weekly expenses in awarding this amount. It is a lump sum weekly amount.
In reaching this conclusion, I have considered whether it is unfair to the husband to make an order in this sum when the wife came to Court seeking weekly expenses of $395 per week, and rental expenses of $500 per week, and when I have found the actual rental expenses of the wife to be $320 per week. The husband might well say the outcome I have arrived at is not the case he came to meet, and he has been denied procedural fairness. There are three answers to this. First, the amount I have arrived at is less than the total amount of the claim by the wife. The husband was on notice of the total quantum claimed, if not its particular composition. Second, the husband had the opportunity to challenge particular expenses of the wife and he did so. I have taken those challenges into account and accepted some of them, but ultimately made an assessment as to what the wife’s reasonable expenses are. Third, after considering those challenges to expenses, I have found the wife’s reasonable expenses to be $935 per week and the shortfall to be $884 per week. This is the amount by which the wife is not able to adequately support herself and the husband has capacity to pay it.
I decline to order that any amount for rental support be paid in a lump sum each six months given the wife’s position will change once she commences receipt of the PPL payments (see below).
In the second period, the spousal maintenance payable by the husband should decrease by the amount of the PPL payments. Accordingly, once the wife starts receiving her weekly PPL payment, the husband should pay maintenance of $123 per week. That payment can be used by the wife to meet weekly expenses, and is less than the sum she was pursuing for weekly expenses of $395 per week. It will be necessary to make an order that the wife notify the husband when she commences to receive the PPL payments and when she ceases to receive the PPL payments.
In the third period, as matters presently stand, I decline to make any ongoing order for interim spousal maintenance. The wife has not satisfied me that she will be unable to adequately support herself at that time. The wife has an ability to earn an income. She is taking steps to maintain her professional development – see Part N of the Second Financial Statement. She has indicated she has accepted she will need to return to work earlier than 12 months. She is on leave, and therefore would appear to have a job to return to. Her evidence is that she cannot return to work before mid-year, the inference being that she can return to work thereafter. As matters stand, when the PPL ends, she would appear to have the capacity to work and earn an income. Exactly what work she will do, how many days she will work, and what her income might be, are not known at this time.
I have stepped back to consider the nature and effect of these orders. I am satisfied that the amount of maintenance the husband is required to pay to the wife is both reasonable and proper having regard to the terms of the Act.
WHEN SHOULD THE BALANCE OF THE PARTIAL PROPERTY SETTLEMENT BE PAID?
The wife seeks payment of the balance of the part property settlement within 45 days. She submits that she requires the money to rehouse herself, to repay the loans to her father, and also for future costs that may arise. She says the husband has the capacity to pay within that period having regard to his overall financial position, his borrowing abilities and his ability to get money quickly when he needs it.
The husband submitted that there was no urgency to making the payment, that the wife will have $90,000 within seven days to meet urgent payments, and that he requires time to raise the money. If he cannot raise the money, then he will need to sell a property.
In my view, the husband should pay the balance of the part property settlement within 45 days. The wife has been upfront about the loans she needs to repay. She has clearly been in a situation of need for some time. It is not unreasonable in all the circumstances of this case, including having regard to the spousal maintenance orders that I have made, that she should have access to the remainder of the payment within 45 days. The husband would, on the material, seem to have the capacity and the financial nous to raise funds at short notice, be that from his own sources or through arranging a loan.
I certify that the preceding one hundred and nineteen (119) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Blake. Associate:
Dated: 3 April 2024
4
7