Gaber & Jabara
[2021] FCCA 210
•9 February 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Gaber & Jabara [2021] FCCA 210
File number(s): PAC 106 of 2019 Judgment of: JUDGE OBRADOVIC Date of judgment: 9 February 2021 Catchwords: FAMILY LAW – Interim spousal maintenance – whether applicant demonstrated unable to support himself adequately.
FAMILY LAW – Interim property distribution – litigation funding – whether just and equitable.
Legislation: Family Law Act 1975 (Cth), ss 72, 75. Cases cited: Brown & Brown [2007] FamCa 151
Garston & Yeo (No. 2) [2019] FamCAFC 139
Hall v Hall [2016] HCA 23
Hanas & Jolaha (No. 4) [2019] FamCA 483
MS & PS [2006] FamCA 588
Strahan & Strahan [2009] FamCAFC 166
M v M [2006] FamCA 868
Maroney & Maroney [2009] FamCAFC 45
Osferatu & Osferatu [2012] FamCA 408Williamson & Williamson [1978] FamCA 57
Number of paragraphs: 51 Date of hearing: 27 January 2021 Place: Parramatta Counsel for the Applicant: Mr Fowler Solicitors for the Applicant: Watts McCray Appearing for the Respondent: Ms Ralston Solicitors for the Respondent: Coleman Greig Lawyers ORDERS
PAC 106 of 2019 BETWEEN: MR GABER
Applicant
AND: MS JABARA
Respondent
ORDER MADE BY:
JUDGE OBRADOVIC
DATE OF ORDER:
9 FEBRUARY 2021
THE COURT ORDERS THAT:
1.Pending further order, pursuant to section 74 of the Family Law Act 1975 (Cth), the Respondent pay to the Applicant, by way of spousal maintenance, the sum of $500 per week.
2.The spousal maintenance referred to in order (1) herein shall be paid in cash directly to the Applicant.
3.The first payment of spousal maintenance be made within 7 days from the date of these orders and thereafter on Wednesday of each week.
4.Within 14 days from the date of these orders, by way of partial property distribution, the Respondent do all acts and things to cause the sum of $100,000 to be paid to the Applicant or at his direction to the solicitors for the Applicant.
Pending further order, the Applicant is restrained by injunction from encumbering, selling, disposing or otherwise dealing with his legal interest in the property situated at and known as B Street, Suburb C in the State of New South Wales being more fully described in the Certificate of Title Folio Identifier ....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 under the pseudonym Gaber & Jabara is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE OBRADOVIC
INTRODUCTION
The applicant husband and the respondent wife were married for 20 years, from 1997 to 2017. They were divorced in April 2019.
The parties have 4 children together, three of whom are now adults. The youngest is 16 years old and lives with the applicant, as do two of the three adult children.
The applicant moves the Court for orders that the respondent pay him interim spousal maintenance in the amount of $500 per week and that there be a partial property distribution such that he receive $100,000 pending the final hearing.
The respondent has conceded that she has the capacity to pay spousal maintenance, however, she disputes that the applicant has proven that he is unable to support himself adequately as required by s.72 Family Law Act 1975 (Cth) (“the Act”).
Furthermore, the respondent opposes the partial property distribution, arguing that if the applicant was to have the benefit of this order then this would likely defeat her application for final orders, and there is unlikely to be any adjustment in the applicant’s favour at the conclusion of the proceedings.
CHRONOLOGY
There are a few agreed facts between the parties and as far as relevant they are as follows:
a.The applicant was born in 1960 and is currently 59 years of age.
b.The respondent was in 1972 and is currently 47 years of age.
c.The parties married in 1997 in Country D.
d.Their first child, Ms E, was born in 1998.
e.The respondent completed her health care qualifications in 1999.
f.Their second child, Mr F, was born in 2000.
g.Their third child, Ms G, was born in 20002.
h.Their fourth child, X, was born in 2004.
i.The parties travelled to Australia for the birth of each of their children.
j.In 2008, the respondent relocated to Australia permanently where she was able to secure employment as a health care professional in City H. The applicant joined the respondent in Australia with the children in or about 2008.
k.In or about 2009 to 2010, the respondent became the sole director of J Pty Ltd, owning 50 shares in the company. The applicant also held 50 shares and was the Secretary of the company.
l.In 2013, the parties and their children moved to Sydney.
m.In late 2017, J Pty Ltd became deregistered.
n.In or about March 2017, the parties separated on a final basis. The parties divorce becomes absolute on 21 April 2019.
The applicant says that the income generated through the company was distributed to them both as a salary and then deposited into a joint account which was used to pay joint bill, utilities and expenses for the family.
The respondent says that he was the primary homemaker, and that he was responsible for all the cooking, washing, shopping and attended to the needs of the children. He further says that he was employed as an Uber driver from time to time and therefore also supplemented the family income.
INTERIM SPOUSAL MAINTENANCE
In determining whether to make an order for spousal maintenance, it is appropriate for the Court to determine the issue in the following manner (Hanas & Jolaha [2019] FamCA 483 (“Hanas”) at [79] citing MS & PS [2006] FamCA 588 per Coleman J):
a.Can the applicant support themselves adequately in terms of s.72 of the Act?
b.If not, what are the applicant’s reasonable needs?
c.What capacity does the respondent have to meet those needs?
d.What order is reasonable, having regard to s.75(2) of the Family Law Act?
The question as to whether or not a person is able to support themselves “adequately” is (Hanas citing M v M [2006] FamCA 868 at [32]):
… not to be determined upon a “subsistence level” but upon consideration of whether the applicant can support himself or herself “adequately” importing a standard of living reasonable in the circumstances.[references omitted].
It is not necessary for an applicant for maintenance to use up all capital in order to satisfy the requirement that he/she is unable to support himself/herself adequately (Brown & Brown [2007] FamCA 151 [161] cited in Hanas at [80]).
Furthermore, a claim for maintenance is not limited by reference to current expenses because an applicant applying for maintenance may not have the ability to pay for commitments necessary to support themselves and thus avoid incurring what otherwise would be a reasonable expense. Therefore, the focus is on what is necessary for support (Aldridge J (sitting as the Full Court) in Garston & Yeo (No. 2) [2019] FamCAFC 139 (“Garston”) at [24] citing Hall v Hall [2016] HCA 23 at [8]).
A claim for interim maintenance “would normally involve some hearing on the merits, although not perhaps as final or exhaustive a hearing as would be the case if one were hearing the matter finally” (Garston at [32] citing Williamson & Williamson [1978] FamCA 57; (1978) FLC 90-505 per Fogarty J at 77,650).
“Capacity” to meet an order for interim spousal maintenance is not confined to income (Maroney & Maroney [2009] FamCAFC 45 at [56]).
The Court can only make such an order “as it considers proper” (s.74(1) of the Act) taking into account the factors set out in s.75(2) of the Act.
Is the applicant unable to support himself adequately?
The applicant is almost 60 years old with some health issues. He has suffered 2 heart attacks and he has been recommended for hip replacement surgery. The applicant tells the Court that his health issues prevent him from being able to work.
Prior to moving to Australia, for the first 12 years of the parties’ marriage the applicant worked as a professional in Country D. Following the family’s migration to Australia and the fact that the applicant’s qualifications were not recognised, the applicant was limited to unskilled employment opportunities in Australia. He says that he was, during the parties’ relationship and whilst living in Australia, the primary homemaker and parent. The applicant was last in paid employment in 2017, and that was as an Uber driver. This does not include the income he received through the respondent’s business as referred to later in these reasons.
The respondent is a health care professional, who obtained her qualifications after the parties’ marriage and with the applicant’s support. Whilst she agrees that the applicant’s income after the move to Australia was at all times inferior to hers, and that he did take on more of a parenting and home maker role, she does not concede that the extent to which the applicant took on this role was as asserted by him.
From 2010, after the establishment of the respondent’s business company J Pty Ltd, the business income was paid into the company bank account, and the company then paid each of the parties a salary, the applicant’s being significantly lower than the respondent’s. Both parties had access not only to the business account, but also to a joint account. This continued until separation when J Pty Ltd was de-registered and the applicant’s access to the business account ceased.
The respondent asserts that between the time of separation and April 2018, the applicant withdrew over $143,000 from the business account. The applicant denies this, and says that any money that was utilised by him was from the joint account and that it was for the purpose of caring for the children, all of whom remained living with the applicant post separation, with one of them moving into the respondent’s home approximately 6 months after separation.
As at the date of hearing, the applicant had about $5,700 in his bank accounts, while the respondent had over $386,000.
It was submitted on behalf of the respondent that the applicant has a capacity to earn an income, because in October 2017 he was earning over $1000 per week as an Uber driver. The evidence is that the applicant’s taxable income for the 2019 financial year was $4717. If the applicant did earn $1000 per week in October 2017, this cannot be extrapolated as proof that in early 2021 he has an earning capacity of some $52,000 per year, particularly not in light of other evidence as to his taxable income in the 2019 financial year.
Neither party was cross-examined.
The applicant has the care of the parties’ youngest child, who is presently 16 years old and turning 17 at the end of this year. Two of the parties’ adult children also live with the applicant.
The applicant’s current standard of living appears, in all of the circumstances, to be lower than that which the parties’ enjoyed whilst living together. His application for spousal maintenance discloses a rather frugal lifestyle, as does the amount which he claims.
The applicant has no income save income tested government benefits and family allowance payments, and child support.
For the purposes of the exercise of the Court’s jurisdiction under s.74 of the Act, the Court must disregard the applicant’s entitlement to an income tested allowance or benefit (s.75(3) of the Act).
The child support scheme aims to ensure that children receive an appropriate level of financial support from parents, and the payments which the applicant receives are geared towards meeting the costs of the children (to be differentiated from the costs of the spouse or former spouse).
In any event, it appears from the applicant’s evidence, in particular his financial statement, that the child support amount he receives falls short of the costs he has to meet with respect to the children.
The court is satisfied, having regard to not only that the applicant has the care and control of the parties’ youngest child, but also that by reason of his age and physical incapacity for appropriate gainful employment, as well as the other matters referred to above, that the applicant has demonstrated that he is not able to support himself adequately.
What is the quantum of the applicant’s reasonable needs?
The applicant’s average weekly expenses for food, household supplies, utilities, personal needs and similar are $450 per week. In addition, his costs for motor vehicle insurance premiums and registration, and rates are assessed at $50 per week. The applicant’s financial statement attributes $93 to these costs, being for two motor vehicles. As he can only drive one vehicle at a time, the cost is split.
As such, the applicant has demonstrated a need for $500 per week as is evident from his financial statement filed 25 January 2021, in particular Parts F, G and N thereof.
The respondent’s capacity to pay
The respondent has conceded that she has the capacity to pay spousal maintenance as sought by the applicant.
Conclusion as to spousal maintenance
In all of the circumstances, it is appropriate that an order be made, pending further order, that the respondent pay to the applicant spousal maintenance in the amount of $500 per week.
INTERIM PROPERTY DISTRIBUTION
When considering whether to exercise the power to make an interim property order, the overarching consideration is the interests of justice. The Court does not need to find any special or compelling circumstances. All that is required is that in the circumstances it is appropriate to exercise the power. However, in order to establish an appropriate case for interim property distribution, more is required than the mere fact that upon final hearing the applicant would receive the property being sought, or an amount in excess of what is sought (Strahan & Strahan [2009] FamCAFC 166 (“Strahan”); at [132], [139]).
Whilst a detailed enquiry is not required, there must be some assessment of s.79 factors, “either the remaining property needs to be sufficient to meet the legitimate expectations of both parties at the final hearing, or the order that is contemplated needs to be capable of being reversed or adjusted if it is subsequently considered necessary to do so” (Osferatu & Osferatu [2012] FamCA 408 at [41]).
In Strahan the Court has said:
[79] The need for a party to proceedings under the Act to seek an order for the provision of funds to enable the payment of his or her legal costs of participating in the proceedings has been recognised for many years. It is a reflection of an important matter that distinguishes litigation under the Act from civil litigation between parties who are not parties to a marriage, namely that “very often the wealth of the parties is controlled by one rather than both of them”:
(citation omitted)
Determination as to interim property adjustment
The parties lived together for approximately 20 years.
At the commencement of the relationship, the husband did not have any assets while the wife says that she had an interest in a property in City K, Country D.
The parties each assert financial and non-financial contributions during the period of their cohabitation.
The parties do not agree as to the value of the asset pool. There appear to be three major points of disagreement, as follows:
a.The applicant is the registered legal owner of a property at B Street, Suburb C, where he presently resides. He says that he holds this property on trust for himself, his mother, and his five siblings. The applicant says his share of the interest in that property is worth approximately $105,883, whilst the respondent says that as he is the legal owner the entire value of the property should be ascribed to him, which she estimates at $635,000.
b.The respondent asserts that there should be an amount of $143,140 added to the asset pool being the pre-distribution to the applicant of funds from the business bank account (operated by J Pty Ltd). As noted earlier, the applicant does not concede receiving this amount, and says in any event that whatever moneys he spent between March 2017 and April 2018 was for the purposes of usual living expenses for him and the children.
c.The respondent has property in City K, Country D the value of which is not agreed. The applicant asserts that the respondent’s interest in worth over $630,000 whilst the respondent asserts that her interest is worth approximately $300,000.
On the applicant’s case as it presently stands, the net pool (inclusive of superannuation) is $1,435,011. The applicant asserts that the property in his possession or control, excluding superannuation is only $175,177 whilst that in the possession or control of the respondent, excluding superannuation, is close to $500,000. He says he holds approximately 26% of the assets. The applicant submits that the difference between 50% of the non-superannuation property and the property of the applicant at present is $206,238 and that on a final basis he seeks an order that he receive one half of the entirety of the property of the parties.
On the respondent’s case as it presently stands, the net pool (inclusive of superannuation) is $1,621,111. The respondent asserts that the applicant already has over 50% of the pool of assets, and that if he requires money for the payment of legal fees (which is not conceded) he has available to him the B Street, Suburb C property which it is unencumbered. It was further submitted that there is no evidence before the Court that this property could not be encumbered in a way which would permit the applicant to draw down moneys sufficient to pay his legal fees. The respondent submits that if she was successful in the final orders she sought, then any interim property distribution might mean that the orders she seeks on a final basis might not be satisfied.
The applicant has to date paid $10,000 towards his legal costs. His lawyers have estimated that the costs of this interim hearing will be in the order of $12,000 to $20,000 and that the conduct of a defended hearing for property adjustment may cost him another $80,000 to $100,000. The applicant says he does not have the ability to fund legal fees from his income, and that he does not have assets to charge as security for any litigation funder. The applicant’s lawyers have informed him that they are unable to represent him on the basis that he pay his costs after final orders are made from whatever money he might receive as a result thereof. The applicant seeks the partial property distribution payment so that he may continue with the litigation.
The respondent is able to fund her own legal costs from her income.
The parties, should as far as possible, have a level playing field in terms of their financial capacity to conduct family law litigation. This is particularly so after a relatively long marriage, and where on one party’s case the other party holds not only the majority of the assets but has a much higher earning capacity and financial resources.
There is presently sufficient cash in the bank accounts held by the respondent (or bank accounts which are within her control) to satisfy the partial property distribution order the applicant is seeking.
Even if the respondent’s contentions are proven correct, and she is able to satisfy the Court as to the value of the assets as she asserts, and if she is able to satisfy the Court that the final orders she seeks in her Amended Response filed 21 August 2020 ought to be made, there are sufficient assets available for judgement to be satisfied in her favour.
If what the respondent says is correct, and that is that the respondent’s legal interest in the B Street, Suburb C property stands (and he does not hold the property on trust) then there is capacity for the partial property distribution to be in essence reversed, by for example, a sale of the B Street, Suburb C property and an adjustment back to the respondent in the amount of the partial property distribution made pursuant to these interim orders. Of course, in order for this to occur, there would have to be an asset preservation order in place to ensure that the B Street, Suburb C property is not dealt with in a manner which might ultimately defeat the respondent’s case. Such an order will therefore be made as part of the interim property orders.
It is just and equitable that there be a partial property distribution to the applicant as sought.
CONCLUSION
For those reasons, orders as set out at the forefront of these Reasons for Judgment are made.
52 I certify that the preceding fifty-one (51) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Obradovic.
Associate:
Dated: 9 February 2021
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