Furtado & Furtado - [2011] FamCA 1018

FAMILY COURT OF AUSTRALIA

FURTADO & FURTADO

[2011] FamCA 1018

FAMILY LAW – PROPERTY - Interim property and spousal maintenance

Family Law Act 1975 (Cth)

Bearup & Bearup (1993) FLC 92-412
Saxena & Saxena (2006) FLC93-268
Strahan & Strahan (2011) FLC 93-466
Zschokke and Zschokke (1996) FLC 92-693

APPLICANT:

Ms Furtado

RESPONDENT:

Mr Furtado

FILE NUMBER:

MLC

8586

2010

DATE DELIVERED:

30 November 2011

PLACE DELIVERED:

Melbourne

PLACE HEARD:

Melbourne

JUDGMENT OF:

Murphy J

HEARING DATE:

30 November 2011

REPRESENTATION

COUNSEL FOR THE APPLICANT:

Mr Strum

SOLICITOR FOR THE APPLICANT:

Gillian Coote Family Law

COUNSEL FOR THE RESPONDENT:

Mr Davis

SOLICITOR FOR THE RESPONDENT:

Rosetta Traficante Solicitor

Orders

IT IS ORDERED UNTIL FURTHER ORDER THAT

The husband pay or cause to be paid:
(a)Not less than the minimum payments of principal (if any) and interest required by the National Australia Bank, as same fall due from time to time, secured by registered mortgage over the former matrimonial home situate at B Street, Suburb C in the State of Victoria; and
(b) As and by way of spousal maintenance:
(i)The difference between the sum of $1007 per week and such weekly sum as the husband may be administratively assessed from time to time by the Child Support Agency to pay to the wife by way of periodic child support, such that the total weekly sum payable by the husband to the wife pursuant to this paragraph (by way of spousal maintenance and periodic child support) is $1007 per week; and
(ii)Private health insurance premiums for the wife at the existing level of cover.

IT IS ORDERED THAT

The Application in a Case filed by the husband on 17 October 2011 is hereby dismissed.
The Amended Application in a Case filed by the wife on 25 November 2011 is otherwise dismissed.
The costs of either party, of and incidental to these interim proceedings, be reserved to the trial judge.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 8586 of 2010

Mr Furtado

Applicant

And

Mr Furtado

Respondent

EX TEMPORE

REASONS FOR JUDGMENT

The applications for interim financial relief filed by each of the husband and wife need to be seen against the background that each now proceed on the assumption communicated through the regional coordinating judge that the trial of this matter will take place in March or April 2012, that is, in about 16 weeks time. With that in mind, the wife seeks, by way of a minute handed up at the outset of these proceedings, the following orders in lieu of those sought in her Amended Application filed 25 November 2011:
1. That until further order the husband pay or cause to be paid:
(a) not less than the minimum payments of principal, if any, and interest required by the National Australia Bank as same fall due from time to time, secured by registered mortgage over the former matrimonial home situated at [B Street, Suburb C] in the State of Victoria; and
(b) as and by way of spousal maintenance:
(i) the difference between the sum of $1007 per week and such weekly sum as the husband may be administratively assessed from time to time by the Child Support Agency, to pay to the wife by way of periodic child support, such that the total weekly sum payable by the husband to the wife pursuant to this paragraph, by way of spousal maintenance and periodic child support, is $1007 per week; and
(ii) private health insurance premiums for the wife at the existing level of cover.
The Amended Application in a Case sought interim orders for a child support departure order which, if made, would have seen the husband pay private school fees and associated expenses for the two children, who are currently still at school in years 11 and 9 respectively, as well as a cash payment totalling $600 per week, and medical and dental expenses. That same application sought interim spousal maintenance comprising mortgage payments currently in excess of $1300 per week, as well as utilities, and a cash sum of $300 per week.
An order, commonly referred in this state as a “Barro order” in the sum of $95,000 was also sought. The wife currently lives in the former matrimonial home with the younger of the two children. After what is described as an altercation between the two sisters, the older girl lives with her maternal aunt. The husband seeks the following orders in an Application in a Case filed 17 October 2011:
1. That the matter be listed for an urgent hearing.
2.That the former matrimonial home situated at [B Street, Suburb C], being the real property described in Certificate of Title Volume … Folio …, be forthwith sold altogether out of Court (‘the sale’) at a reserved price of not less than $1,800,000 and upon completion of the sale, the proceeds of the sale be applied:
(i)firstly to pay all costs, commissions and expenses of the sale;
(ii)secondly to discharge all mortgages and any other encumbrance affecting the real property;
(iii)thirdly, the sum of $200,000 distributed to the Husband;
(iv)fourthly, the sum of $500,000 to the Wife, by way of interim property settlement; and
(v)fourthly [sic], the balance to be held in a High interest bank account.
3.That pending the payment or completion of the sale:
(i)That the Wife assist in meeting half the mortgage and interest payments on the [Suburb C] property.
(ii)The Wife have the sole right to occupy the real property and that during such right of occupation the Wife pay all rates and taxes and like apportionable outgoings of the real property.
4.Such further Orders This Honourable Court deems fit.
The husband’s orders are contained in his Application in a Case filed 17 October 2011.
Mr Davis, who appears as counsel for the husband, fairly and properly concedes that the order for sale of the former matrimonial home is an exercise of the section 79 power, and it would be an unusual case for such an order to be made on an interim basis (particularly, it might be inferred, when the trial is imminent). In effect, the concession recognises the principle emanating from decisions of the Full Court such as Bearup & Bearup (1993) FLC 92-412, a decision to which counsel for the wife referred, together with more recent pronouncements to similar effect in Zschokke and Zschokke (1996) FLC 92-693 and Strahan & Strahan (2011) FLC 93-466.
The difficulty, as counsel fairly concedes, is that an order for sale is not “reversible” in the sense referred to in those Full Court decisions. Moreover, if, as here, one party seeks ultimately to retain the home as part of the orders for settlement of property, an order for sale on an interim basis involves the potential for unfairness to that party. It also, in my view, seeks to determine on an interim basis, something that is important to what is often called the three or four step process at trial, namely the form of the order or orders that best effect justice and equity as section 79 contemplates.
Accordingly, counsel fairly concedes that “the bar is high” and that a “conservative approach” is likely to be the hallmark of the approach to be adopted by the Court.
However, counsel says that the wife’s desire to retain the home cannot, in effect, be seen as legitimate in light of what she deposes at paragraph 24 of her most recent affidavit. In light of its importance to counsel’s submissions, I quote that paragraph in full:
I have met and become engaged to [Mr D] who is [sports coach], based at a [tertiary institution] in Canberra. We met in September 2010 and commenced a relationship in October 2010. We became engaged in September 2011. We have not yet set a date for the wedding. We had previously discussed the possibility of relocating to Canberra at the end of this year. This would provide [E] with a fresh start in Canberra for the commencement of her year 10, and I was comfortable with [F’s] recent decision to remain in Melbourne with the father to complete her VCE, in the event that [E] and myself relocate to Canberra. These plans are now temporarily on hold. Without a final settlement of our property and financial matters, I do not think that I have the financial ability or capacity to do so. At this point in time, it is my intention that both children, therefore, continue with their enrolment at [G School].
I agree that there is some potential inconsistency between the desire expressed in that paragraph and an application founded upon a desire to retain the former matrimonial home, leaving aside whether such a result, including retention with no or a small mortgage, might be seen, on an interim basis, as being within the range of just and equitable outcomes at a trial.
However, effectively precluding one party from arguing at a trial for an outcome which has been pleaded as a desired outcome, in circumstances where it cannot be said with tolerable certainty that such an outcome is not possible, is, as it seems to me, a grave action to be taken on an interim basis where familiarity with the material is fleeting, time and argument truncated and when there is no cross-examination or findings consequent upon careful scrutiny of all of the evidence.
I am not prepared to find that it is tolerably certain that the wife’s desired outcome cannot be achieved, although I emphasise, as should be obvious, that that is by no means the same thing as saying that it is. I consider it inappropriate to order the sale on an interim basis in the circumstances just described, particularly, having regard to a trial being likely in some 16 weeks or so. Accordingly, I propose to dismiss the application for sale of the former matrimonial home on an interim basis.
As to interim spousal maintenance, as observed the wife’s position now is, given the imminence of the trial, that the mooted orders for child support departure should await that final hearing. Again, the concession is, in my view, a sensible one given the findings that would need to be made to sustain that relief at an interim stage.
The application for interim spousal maintenance is, for the same reasons, also now of narrower ambit than that originally contemplated. In short, it comes down to this: the husband has in his filed material, admitted to a surplus of income over expenses of about $128 per week. Within his expenses, he admits to paying the mortgage of over $1300 per week, and maintenance and child support (in varying forms) of $1007 per week.
It must, it is argued, axiomatically follow that the husband has a capacity to pay the mortgage and $1007 per week because those expenses are deposed to and, notwithstanding those payments, there is a surplus even on the husband’s own case. Of course, those expenses take no account of the very significant expenditure on private school fees and the expenditure associate with that schooling. In round terms, that amounts to about $1000 per week.
It is contended on behalf of the wife that while private schooling for the children is very important to her, the day-to-day needs for herself and the children are more pressing, and the private school fees can await the trial, at which time a decision can be made about who should assume liability for them and from where any such liability can be met.
In short, it is submitted that given the imminence of the trial, the wife seeks no more than to be paid by way of maintenance, the sum which the husband admits that he has paid, and can continue to pay, if school expenditure is removed. It is submitted that, as a result, this sum can be ordered irrespective of the fact that the wife does not admit that the husband’s income or, perhaps, sources of funds, is confined to those to which he deposes.
In that respect, exhibit W1 comprises credit card statements that show varying amounts payable to “Tatts com Lotteries” and “Victoria Racing Club.”
Paragraph 41 of the wife’s most recent affidavit alleges that the husband has, over the last five years, spent an average of between $200 and $1000 per month, an allegation which, in terms, is not the subject of direct evidence and which has not been tested. However, W1 shows expenditure in respect of the two entries referred to above, totalling just short of $9000 over 18 months, that is, an average of about $500 per month or about $115 per week.
It is said that this is indicative of discretionary expenditure that could not be described as being for the husband’s reasonable weekly needs. Counsel for the husband submits that a proper analysis of the husband’s financial statement by, in particular, taking account of taxation, shows that he is paying 100 percent of his net income to his family, he is residing with his parents, and all of the expenditure listed in the statements, save for tax, is money spent on the wife and children.
It is submitted that where both parties have agreed (and continue to agree) upon the importance of a “good private education” for their children and have prioritised it historically within their relationship, such expenditure cannot simply be ignored, and it is submitted this is precisely what the wife is seeking to do. The wife contends that private education is desirable but not at the expense of, as it were, “putting food on the table.”
It is argued that the husband has only been able to pay what he has paid historically because he has been able to borrow from his family, borrowings which are now up to about $50,000. In short, he says he can’t afford to pay any more; school fees can’t simply be ignored, and there is, in any event, no evidence that this course is acceptable to the school.
The current ambit of the dispute, although narrow, must nevertheless be determined by reference to the provisions of the Act relating to spousal maintenance.
It is, I think, convenient to conceptualise the process required by the Act as Coleman J referred to it in Saxena & Saxena (2006) FLC93-268: (1) to what extent can the applicant support him/herself, (2) what are the applicant’s reasonable needs, (3) what capacity does the respondent have to meet an order, (4) if steps (1)-(3) favour the applicant, what order is reasonable, having regard to section 75(2).
As to the first question, on the evidence before me in these interim proceedings, it can be answered by saying, “Only by reference to maintenance from the husband”.
The (untested) evidence reveals a current incapacity for remunerative employment by the wife by reason of a back complaint. Previously, she was working part-time after the onset of that problem. Her only income is, then, income which, as is conceded, the Act dictates must be ignored (Newstart Allowance). There is no evidence before me which suggests that the wife has the capacity for gainful employment between now and the trial.
The applicant’s reasonable needs in terms of how the application is currently expressed are not (and probably could not be) the subject of challenge in these interim proceedings. They essentially comprise the mortgage, which I specifically find is a reasonable need, and the sum that the husband has in effect himself determined as reasonable needs for the wife and children. There is no evidence before me to suggest that the sum comprises amounts that could be considered other than reasonable.
The capacity of the husband to meet the order is also to be considered, as it seems to me against his admission that he has been able to meet the amount claimed. So too, whatever might ultimately be established about the husband’s gambling, if indeed it be established, exhibit W2 provides evidence that the husband has had the capacity to spend an average of about $125 per week in discretionary spending in the last 18 months. I consider that the capacity of the husband to pay the amount sought is established on the evidence before me.
It is then necessary to consider whether the order sought is reasonable in light of the matters contained in section 75(2) of the Act. In light of the manner in which the application is framed, and the other findings to which I had just referred, I do not propose in these short ex tempore reasons, to refer seriatim to each of the applicable section 75(2) matters.
I note, in particular, that in assessing the amount to be paid, I should take account of the standard of living which the parties enjoyed pre-separation and the standard that is now reasonable in all of the circumstances, a factor which might be thought to be of particular relevance to the assertion made on behalf of the husband that private school fees incurred on behalf of the children should not be ignored.
I take particular note of the fact that, as the orders now in terms seek, the commitments to the children and the expenses associated therewith exceed those which relate to them directly. I have already referred to the respective capacities, or lack of capacity, for gainful employment of the parties.
Whilst he may not consider it entirely desirable (and, indeed, might argue that it constitutes a diminution in his standard of living) the husband currently lives with his parents and deposes in his financial statement to having no day-to-day needs, including even basic expenses such as food and the like.
It seems to me that, in effect, the argument of the husband is that by reference to section 75(2)(o), that justice of the case requires me to take into account the fact that both parties have prioritised private education and that this should be a factor telling in the amount of spousal maintenance otherwise ordered.
I am otherwise persuaded that the pre-conditions for an award of spousal maintenance are met. So too, I am persuaded otherwise, that the amount sought is, by reference to section 75(2), reasonable. I am not persuaded that the matters raised by the husband, either in opposition to any order being made or in opposition to an order in the terms sought. I consider the orders sought by the wife appropriate pending further or other order.
Given the imminence of the trial, the application for a Barro order (paragraph 5 of the Amended Application of the wife) was - sensibly if I may say so – not pressed.

I certify that the preceding thirty-five (35) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Murphy delivered on 30 November 2011.

Associate:

Date: 16 January 2012