Gatsby and Gatsby

[2012] FamCA 265

FAMILY COURT OF AUSTRALIA

GATSBY & GATSBY [2012] FamCA 265

FAMILY LAW - SPOUSAL MAINTENANCE

Family Law Act 1975 (Cth)

APPLICANT: Ms Gatsby

RESPONDENT: Mr Gatsby

FILE NUMBER: SYC 1428 of 2010

DATE DELIVERED: 11 April 2012

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Loughnan J

HEARING DATE: 11 April 2012

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Prasak

SOLICITOR FOR THE APPLICANT: Martin Bullock Lawyers

RESPONDENT IN PERSON: Mr Gatsby

Orders

1. Leave is granted to the parties to inspect document produced on subpoena by B Law Firm.

1. That the husband’s address be sealed and not released without an order of the Court.

1. That pending further order the husband pay to the wife direct or as she may direct in writing $150.00 per week by way of interim spousal maintenance.

1. That the time in which the husband is to comply with the Notices to Produce returnable on 29 March 2012 and 11 April 2012 be extended to 28 days from today’s date.

1. That the proceedings be listed for hearing on a final basis in relation to spousal maintenance over two days commencing on 17 July 2012 at the Parramatta Registry of this Court.

1. That in relation to their health each of the parties file and serve an affidavit from their treating medical practitioner within 42 days from today’s date.

1. That not later than close of business on 3 July 2012 each of the parties file and serve a consolidated single affidavit of their evidence in chief, a single affidavit, if necessary, from any other lay witness in their proceedings and an updated Financial Statement.

1. That a case outline document be provided by each party to Justice Loughnan’s associate and the other party by close of business on Friday, 13 July 2012 setting out briefly the terms of the orders sought by the parties to the extent that they are not reflected in any other document filed, a list of the documents relied on by that party and a brief summary of the arguments to be made in relation to the elements of need and capacity in respect of proceedings for spousal maintenance

IT IS NOTED that publication of this judgment by this Court under the pseudonym Gatsby & Gatsby has been approved by the Chief Justice pursuant to s 121(9)(g) of the Act.

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: SYC 1428 of 2010

Ms Gatsby

Applicant

And

Mr Gatsby

Respondent

REASONS FOR JUDGMENT

1. These are proceedings for spousal maintenance.  The matter was heard by me today.  I indicated to the parties that I would like to give judgment this afternoon, and conclude the matter by 5 o’clock.  I have returned to Court at about half past 4, and the solicitor and counsel for the wife are not present. I have explained to the wife that her lawyers will be able to get a written version of the judgment if they wish. I propose to give my reasons and make a decision, notwithstanding that those persons are not present.  Present in Court are the husband and the wife.

2. As I say, these are proceedings for spousal maintenance. The matter was before me on 13 February and it was adjourned to today. No specific direction was made nominating the hearing as in relation to interim or final proceedings. The husband attended today thinking that this was the final hearing. The case outline documents from the wife’s lawyers indicate that their understanding was that this was an interim hearing. The matter was listed for one day and the hearing has occupied the entire day, dealing with the interim issue. Although there has been brief cross-examination, it is apparent that there could not have been an examination of the issues on a final basis in a one-day hearing.

3. In addition, a number of matters were addressed informally, such as medical evidence on behalf of each of the parties. That evidence is not on affidavit.  Medical reports were simply attached to the parties’ documents. That would need to be rectified in the substantive proceedings, in circumstances where there are some issues about that evidence.

4. The matter came before Collier J on 12 December 2011 and his Honour made a decision in respect of a jurisdictional issue.  His Honour noted the following background facts:

   The wife was born on […] 1956, the husband on […] 1956.  They married on […] March 2003.  They separated on 1 January, or thereabouts, in 2010.

5. Orders were made by consent in the Federal Magistrates Court on 13 January 2011, and I will return to the particulars of those orders later in these reasons for judgment.  A decree nisi in respect of the parties’ marriage was pronounced in July 2011, and became absolute in August 2011.  Collier J set out in his reasons the terms of the orders made on 13 January 2011, and the operative parts of those orders were:

   Firstly, the husband shall pay to the wife $37,000 payable as follows

   (a) $10,000 within 30 days of the date of filing this order, $10,000 within 90 days of the date of filing this order, and finally, $17,000 by way of 17 fortnightly instalments of $1,000 per fortnight commencing within 14 days of the date of filing this order.

6. The payment referred to in paragraph 1 (a) was to be made to the wife’s solicitor H Law Firm. 

   That the husband continue to make the payment in paragraph 1 of the orders made on 8 November 2010 –

   and there’s some other evidence that those orders were in the nature of interim maintenance –

   until receipt by the wife of the first fortnightly instalment of $1,000 pursuant to paragraph 1 (iii) of this order, whereupon paragraph 1 of the orders of 8 November 2010 is to be discharged.

7. Then there were some orders about costs.  There were orders in relation to the husband being responsible for payment of certain joint debts, and the usual declaration in relation to what the parties otherwise had.  And finally, the Court was asked to note:

   It is the intention of the parties that these orders be made in full and final settlement in relation to all financial matters including, but not limited to, weekly spousal maintenance payments and lump sum payments and any potential claim pursuant to the Family Provisions Act 1982.

8. For reasons given on 13 December 2011, the issue argued before Collier J was described as follows.

   The wife’s case:  as put to me by Mr Shaw of counsel, is that the wife should receive maintenance from the husband and contends that there is no bar or restriction upon the Court entertaining such an application.

   Collier J went on:

   The husband’s case:  the husband contends that the wife is not entitled to achieve any order for spousal maintenance, because the orders of 13 January 2011 are final in respect of all matters, and thus the wife can make no further claim for maintenance for herself.  It is her husband’s evidence that it was his understanding that part of the moneys paid by him were paid for maintenance. The orders do not assist him in that regard.

9. As to the notation on 13 January 2011 Collier J observed in his judgment – this is at paragraph 7:

   Clearly, as is pointed out to me by Mr Shaw, that notation can have no effect so far as any claim under the Family Provision Act 1982 NSW is concerned. Further, it is the only mentioned in the document as to maintenance of any kind. It is clear from the correspondence and affidavit material that the parties may well have thought that certain parts of the amounts ordered to be paid were in satisfaction of spousal maintenance for the wife. However, there does not appear to be on the face of the orders themselves, as against the mention in the notation, of any issue involving spousal maintenance. Thus, nowhere in the body of the order is there specified any amount to be paid as spousal maintenance of any kind.

10. Later in his reasons Collier J – and this was the gravamen of the argument before him – found that the jurisdiction of the Court in relation to spousal maintenance was not exhausted.  He noted that there was no specific mention in the orders that a component of the property settlement was to be by way of spousal maintenance, and that that was required by section 77A and other authorities, and found that if the Court’s jurisdiction is to be ousted, then it can only be done by way of a binding financial agreement.

11. His Honour then required that the wife’s claim for spousal maintenance be listed for hearing and disqualified himself because of findings he had made in the matter. Ultimately the matter came before me on 13 February 2012 as I have indicated.

12. In the context of this case, spousal maintenance is a remedy available between parties to a marriage whether the marriage is on foot or not. Section 72 of the Family Law Act says relevantly:

    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: by reason of having care and control of a child; by reason of age or physical or mental incapacity for appropriate gainful employment; or for any other adequate reason having regard to any relevant matter referred to in subsection 75(2).

13. The first issue to be determined by me is whether the wife is unable to support herself adequately by reference to the matters referred to in section 75(2) and if the wife is able to establish that, what reasonable capacity the husband has to provide support. And those findings are all to be made by reference to that subsection 75(2).

14. I should say these are interim proceedings. There has been some brief cross-examination today.  I am not permitted to make findings of fact on the basis of a hearing on the papers where there is a dispute unless there is independent evidence that excludes one version of events or wholly supports the other.

15. We are not much further advanced, today, as to the capacity to make findings given that this matter has been necessarily conducted as an interim hearing. The evidence has included hearsay evidence and there has only been truncated cross-examination.

16. Turning to the matters in the subsection: As to the age and state of health of each of the husband and wife, the wife and husband are 56 and 55 years of age respectively. There is evidence in the form of attached documents as to the parties’ health.  Each of them relies on evidence from health professionals, psychologists and psychiatrists, in respect of what might be broadly called mental health issues, and some physical issues. There has not been any testing of that evidence and, as I say, that evidence has not been presented, as it is required to be, on the affidavit of the person expressing the medical opinion. The key difference in relation to the two sets of medical evidence is that it is the wife’s case that by reference to her medical conditions, she is not currently in a position to hold down a job. On the other hand the husband’s case is that he is struggling but is still in paid employment.

17. As to the income, property, financial resources of each of the parties and their physical and mental capacity for appropriate gainful employment, the evidence is a bit messy.  As to the wife’s income, her most recent financial statement puts her income at $272.60 per week by way of a Centrelink Newstart allowance. She deposed to spending $744 a week, made up of $250 in rent, $20 in repayments to Centrelink for a loan for medical procedures, and $474 in living expenses.  In cross-examination, she variously said that her income was $412, $393 and $512 a fortnight. Advice from Centrelink, which is exhibit 1, suggests that her net cash income is $241 a fortnight.  That is out of a gross payment of $489.70, which has been reduced by reference to things such as a housing payment to the New South Wales Government Housing Department, housing arrears payment, Court fines, electricity and gas.

18. Doing the best I can with a rather confusing Financial Statement and the oral evidence given today, the wife received for the fortnight 22 March to 4 April the sum of $241.80.  As to her expenses, the financial statement says that her rent is $250 a week. In the witness box the wife said that her rent is $220 a week and that she also pays $50 towards arrears.  Rather than the $20 the wife deposes to in her Financial Statement for each of gas and electricity a week, it is her oral evidence that she pays $20 a fortnight for gas, and $46 a fortnight for electricity. However, they are paid directly by Centrelink by deduction from her Newstart Allowance. Unfortunately, exhibit 1 reveals that her Newstart Allowance was reduced by $46 a week for electricity, but only $15 a fortnight for gas.

19. There was no cross-examination of the wife in relation to the components of her living expenses, which she claims to be $474 a week. Thus the wife pays $270 a week in rent and arrears, $474 in living expenses and she has an income of $240 a week. She has a shortfall of the order of $500 a week.  The legislation requires that I ignore the Centrelink benefit for the purposes of these proceedings.  Therefore the wife has a shortfall in her weekly budget of something like $760 a week.

20. The husband works as the managing director of a company that he owns with somebody else, called Q Pty Ltd, which undertakes administrative work. 

21. His salary before tax is $2404 and his evidence is that he spends $2402 a week.  The husband was not cross-examined in relation to the amount he pays in respect of rent, which is $700 a week, his income tax of $694 a week, his health care of $21 a week, his repayment of loans at $352 a week, credit cards at $30 a week, or his living expenses of $603 a week. It was put to me that he could be renting a property at $450 a week.  Well, that is no doubt true but I cannot make a finding that his rent is $450 per week. There are some complications in this case and they relate to the notation in the orders of 2011.  These are interim proceedings.  Given the notation, it is not reasonable for the Court to find that somebody who presumably is paying rent pursuant to a lease, should pay a lesser amount of rent that the lease requires. The husband has refused to give evidence about his address but that does not mean he could not have been cross-examined about the financial arrangements for his current accommodation, duration of a lease, when he entered into the lease, the nature of the accommodation, whether something else was available and so on.

22. By and large, in interim proceedings the Court is obliged to take the parties as it finds them. It would be a different thing if in the week before the hearing a party moved out of a property that was rented for $200 a week and into a place that is rented for $800 a week. There is no evidence of anything like that here.  I am not free to simply make a finding - as I think I might have been invited to do - that the husband should suggest to his landlord that he should pay two thirds of the rent. Thus there is no substantial challenge to the husband’s expenditure.  He spends what he earns.

23. Now, section 75(2) requires a consideration not only of what the parties earn and spend but also of what they own.  The wife’s evidence is that she has - and this is as at 2 December 2011 - $9,000 in assets, made up of about $8,500 in two bank accounts and household contents of $500.  She owes $500 to Centrelink and that she owed $600 by way of a personal loan to a friend. She has subsequently repaid that. She owed $600 to Telstra. The wife has disposed of a retirement fund of about $25,000. Apart from assertions in relation to money that was available to the wife in the 12 months ending 22 November 2011, it was not put to her that she has another sum of money somewhere. There is no evidence to that effect and no suggestion to that effect.

24. As to the husband, his Financial Statement disclosed that as at April 2012, he owned $17,000, had $37,000 in a super fund and owed $50,000. The assets were $5,000 in cash, $12,000 in household contents and $37,000 - nearly $38,000 in a super fund. There is no evidence about the conditions or details of the super fund.  It would be normal that a person cannot access superannuation until they turn 55 and leave the paid workforce. Whether they are the terms of the fund in question, I do not know. The husband had a personal loan to St George and a personal loan to GE Finance totalling $45,500 and he owed $3,600 on a GO MasterCard account.  Again, there was no challenge in cross-examination in relation to those debts or those assets.

25. The husband disclosed that he received $98,660 from his deceased father’s estate and he says that his father passed away three months after the final orders were made. He said that he applied $95,500 to his St George personal loan, Commonwealth Bank credit card, GE Money credit card, a joint family account loan, two loans in relation to his company and a payment to the company to assist with cash flow and other liabilities and to another company. He has spent $3,000 on clothing.  There is a challenge to his application of those funds. I apprehend that at the final hearing there will be an argument that either he did not make those payments or that he did not need to make those payments.  For the purposes of today, it seems to me that there is sufficient evidence for the Court to accept that those payments were made and that those payments were necessary.  I am not in a position to make a contrary finding about it.

26. In relation to the wife, the husband spent some time in cross-examination and extracted the concession that the wife had available to her something like $112,000 in the 12 months leading up to 22 November 2011.  Of that $92,000 came in the form of payments received from him and the cashing in of her retirement benefit. The wife was not able to account for the disbursement of anything like that amount. It was her evidence that she is spending at the rate of something like $39,000 a year.  She says that there were extraordinary expenses such as the purchase of a television and a video. She must have bought the only VCR available in the Commonwealth, maybe that was a DVD player. She bought a computer, a printer, clothes and some other things. They added up to about $15,000.  I am told that there is evidence that something like $20,000 was spent on a trip to Melbourne at some point. Reference has been made by the husband, without objection, to some amount being spent on clothing. The wife cannot account for the application of $112,000. A point well made during the course of submissions on behalf of the wife that it is a very artificial exercise and it is an unfair requirement to make of the wife in the witness box.  Nevertheless this is a concern raised in the husband’s case and it is something that he wants to pursue, I gather, for the substantive proceedings.

27. Nextly, in section 75(2), relevantly I refer to the commitments of the parties necessary for them to make ends meet.  I have referred to the wife’s eligibility for a Centrelink benefit.  I have referred to the parties’ superannuation interests.  There is no evidence before me in relation to the standard of living of the parties during the marriage. There is no evidence that either of the parties intends to undertake a course of training or to set up a new business.  There is no evidence in relation to the ability of a creditor to recover a debt.  There is no evidence before me in relation to the extent to which a party, whose maintenance is under consideration, contributed to the income earning capacity, property and financial resources of the other party.  I apprehend that that is something that might be addressed in the final hearing.  There is some evidence that will need to be properly supported with medical evidence about the duration of the marriage and the extent to which it affected the earning capacity of a party.

28. There is a reference in the wife’s material to the impact of her working, in effect, part time and at home and not at the premises of the business. There is some evidence from both of the parties in relation to their health and they each make complaints in relation to the impact on their health of the behaviour of the other.  There is no evidence that either of the parties cohabits with another person.  They are required in their Financial Statements to set out the name, age and relationship and gross income of each other occupant of their households and they have each said nil. Therefore no other person lives in either household.

1. As to the terms of the orders made under section 79 - I have made reference to that.  There is no child support. Coming to catchall 75(2)(o):

   Any other fact or circumstance of which the justice of that requires to be taken into account.

   There is the notation. I do not consider it necessary or sensible to go into that too much today but it seems to me that that could be a relevant factor - particularly in relation to things that occurred before this application was made.  There is some reference to this issue in Collier J’s judgment.

2. So, coming back to the questions raised in section 72: Can the wife adequately support herself from her own resources? The wife’s case is that she can’t work - can’t have paid employment. The husband’s case is, I gather, that she can. He conceded in the course of submissions that there is some medical evidence in relation to the wife. He made a submission in the course of wrongful dismissal proceedings consistent with the wife’s evidence before me, in relation to her role with the company and inconsistent with his own and inconsistent with the propositions that he put to her in cross-examination. He put to her on a number of occasions - at least two - that she had a full time role as a secretary for eight years working for the company. That is not what he represented to the authorities in relation to the wrongful dismissal proceedings. There his evidence was something closer to the wife’s representation before me, that the arrangement had more of the character of income splitting.

3. There is no detail in the evidence before me about the hours worked, about all of the tasks undertaken. For the purposes of today, and I am not in a position to make any independent assessment of it, it seems to me on the basis of that background material there may well be something in the argument that the wife made.

4. Finally, and I do not want to dwell on this too much but there seemed to me to be some sincerity in the wife’s presentation today.  Both the parties represent that they are depressed. The husband was able to do that directly by making submissions about it. There is some medical evidence in relation to each of them. It strikes me that for the purposes of interim proceedings where I am permitted some latitude in relation to the extent to which findings can be made about one thing or another, that I should be satisfied on the basis of the evidence about that history, the intimation from the medical authorities and the fact that the wife has given unchallenged evidence of making 250 applications for paid employment and of making enquiries through an agency to which she was referred under her Centrelink obligations. She has listed four or so organisations to whom she made applications. It was her unchallenged evidence that out of those 250 applications, not one interview was offered to her.  It seems to me in those circumstance that I should accept that she is not in a position to have paid employment today.

5. I was told by her counsel earlier today that she is seeking something like 12 months of maintenance to see her through to a point where she may be in a better position to seek paid employment. Therefore, it may be that she will have a capacity for paid employment once some other matters are addressed.  I think one of her experts has - probably outside his expertise – opined that with some financial backing, the wife might be in a better position.

6. There is a concern about her application of the funds available to her over the last 18 months or so. Thus the wife has a shortfall of $700 a week. She currently has no earning capacity and therefore she meets the threshold requirement that she has a need for maintenance that cannot be met from her own resources.

7. So we turn to the husband. Again, the orders that the parties agreed to in early 2011 has an impact on the case.  The husband’s case is that the wife does not meet the threshold. She has a capacity for paid employment and she failed to account for moneys that she has had available to her. In addition, it is his case that it is not reasonable in circumstances where he entered into consent orders including a notation that those consent orders brought to an end any claim for inter alia spousal maintenance between them; and where, and there is some evidence to support this, he needed to borrow money to meet the wife’s property settlement claim; and where the orders on their face left him with joint debts, it is not reasonable that he now be required to pay spousal maintenance.

8. They are legitimate arguments. This is not the final hearing.  It is not possible for me to determine those issues today. The problem for the husband is that, stepping back from the two parties, there is no doubt that his ex-wife is in terrible financial circumstances. There is no suggestion that she has elected to live in Department of Housing premises. There is no suggestion that she had paid employment available to her and she elected not to take it up. She has the needs that every person has for food and shelter and so on. There is no indication that she can come anywhere near meeting those needs.

9. So it seems to me that one would look to the husband in this early instance for some support for the wife.  The problem is:  there is no ready fund.  He has $5000 in the bank.  He has got no surplus in his weekly budget.  However, as I put to him in the course of final submissions, one of the differences between the parties is that he has some options.  He was able to pay down some debts.  That meant his weekly budgetary problems were diminished, on his case, with the application of some of the $98,000 in inherited funds.

10. The $98,000 came from his father’s estate. It was not money to which the wife had any entitlement. Nevertheless it was money that the husband had. There is no doubt, that if some of that fund still existed in his account, it would be money against which I could make an order.  There is no requirement that maintenance be paid out of income.  There is no requirement that maintenance be paid out of property.  It can be paid out of financial resources.  It can be paid out of borrowing. Maintenance is a right and an obligation of Australians who have been in a loving relationship, such as a marriage. The right and obligation do not conclude on the day that the marriage breaks down.

11. I cannot find within the husband’s control, an available weekly sum of $577 sought by the wife.  The husband says, in effect, “I’m in a precarious situation.  These proceedings and criminal (AVO) proceedings between the parties, which have largely been found against the wife have taken a toll on my capacity to work. The husband says that the pressure has caused him to make mistakes at work, which are expensive. He said he had to borrow of recent times against the company for reasons, including the property settlement. He said he had to make arrangements so that his income could be paid when the company did not have enough funds in its accounts to advance money for his wages.

12. I come back to this:  of the parties, only the husband has any flexibility and it seems to me with all of the caveats that I have mentioned, the justice of the case requires that there be some interim payment.  I permitted a broad-brush approach.  I accept that the brush is a little bit narrower in the circumstances of these proceedings where there is no property case at the end of the road, but I propose to order that the husband pay to the wife $150 per week until the final hearing.

I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 11 April 2012.

Associate: 

Date:  27 April 2012