GEORGE & BUTLER

[2015] FCCA 2154

FEDERAL CIRCUIT COURT OF AUSTRALIA

GEORGE & BUTLER [2015] FCCA 2154

Catchwords:
FAMILY LAW – Interim spouse maintenance.

Legislation:

Family Law Act 1975, ss.72, 74, 75, 114

Kiesinger & Paget [2008] FamCAFC 23
Mitchell & Mitchell [1995] FamCA 32
Weir & Weir (1993) FLC 92-338

Applicant: MS GEORGE

Respondent: MR BUTLER

File Number: WOC 927 of 2010

Judgment of: Judge Altobelli

Hearing date: 10 July 2015

Date of Last Submission: 14 July 2015

Delivered at: Wollongong

Delivered on: 14 July 2015

REPRESENTATION

Solicitors for the Applicant: Rita Thakur & Associates

Solicitors for the Respondent: DGB Lawyers

ORDERS

1. The Husband is to pay interim spousal maintenance to the Wife as follows:

   (a)$564 per week to be paid seven (7) days hence

   (b)$984 per week from 7 November 2015

2. The wife’s costs of the application are reserved.

3. The matter be listed for 3 day Final Hearing on 25 July 2016 at 10am.

4. Both parties file and serve any Amended Application / Response / Financial Statement upon which they intend to rely by no later than 8 July 2016.

5. Each party is to file and serve one consolidated Affidavit in support of the orders sought by them, together with any other witness’s affidavits by no later than 8 July 2016.

6. Neither party may rely on any documents filed after 8 July 2016 without leave of the Court, and in the event of non-compliance with these filing directions the Court will at its discretion either vacate the trial dates or list other matters with priority.

7. Each party is to file and serve a Case Outline document by no later than 4:00pm on 8 July 2016, setting out:

   (a)a list of documents to be read in their case;

   (b)a precise Minute of Orders Sought;

   (c)a list of objections to evidence and the basis for such objection;

   (d)a brief summary of argument setting out:

   (i)the party’s contention as to the percentage contribution based entitlement asserted and the evidence relied on;

   (ii)the party’s contention as to any s.75(2) percentage adjustment sought, the factors in s.75(2) relied on and the evidence relied on;

   (e)a joint balance sheet, identifying the agreed and not agreed values of the pool of assets;

   (f)a draft of the order sought to give effect to the overall entitlement asserted.

8. The Applicant is to comply with the payment of any setting down and/or daily hearing fee in accordance with Rules 24.03 and 24.04 of the Federal Circuit Court Rules 2001 or as otherwise directed by the Registry Manager by the date of filing of further material.

9. Both parties are granted leave to issue such Subpoena as they consider relevant to the issues before the Court.

10. Liberty is granted to the parties to re-list the matter on seven (7) days’ notice by joint application to the Court in Chambers in appropriate circumstances.

THE COURT NOTES THAT:

1. A party’s trial Affidavits will not be read until the Case Outline document has been filed and served in accordance with these directions, which may result in the Final Hearing dates being vacated, other matters being listed with priority, or the matter becoming part-heard.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT WOLLONGONG

WOC 927 of 2010

MS GEORGE

Applicant

And

MR BUTLER

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. In the matter of George & Butler, I provide the following ex tempore reasons.  The substantive applications between the parties deal with alteration of property interests.  The interim application that comes before me arises out of the Amended Application of the wife filed 1 July 2015 and the interim orders set out therein.  Most of the orders were in fact made by consent and in this regard and referring to the case outline document filed on behalf of the Applicant Wife and the Orders proposed by her in that document, it would appear that Orders 3, 5, 6, 7, 8, 10 and 11 were by consent, noting that in relation to Order 11, the timeframe be 14 days rather than seven days. 

2. This meant that the issues that fell to be determined by the Court on an interim basis were Order 2 about spousal maintenance, Order 4 about the payment of certain superannuation moneys and Order 12, being an Order for the sale of a property at Property U. 

3. The Applicant Wife is 47 years old and the Respondent Husband 51 years old.  They commenced cohabitation in 1985 and separated on a final basis in 2014, hence it is a long marriage.  They had four children, two of whom are adults and two of whom are below the age of 18 and live with the Wife. 

4. The impression formed from looking at the Affidavits filed by each party suggest that each have made substantial contributions but in diverse ways.  The evidence before the Court consisted of the Affidavits filed by the parties together with exhibit R1, being a bundle of job applications. 

5. In relation to the applicable law, in relation to the spousal maintenance application, I will refer to and incorporate reference to paragraphs 72, 74 and 75 of the Family Law Act 1975 (hereafter referred to as ‘the Act’):

   72.    Right of spouse to maintenance

   (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).

   (2) The liability under subsection (1) of a bankrupt party to a marriage to maintain the other party may be satisfied, in whole or in part, by way of the transfer of vested bankruptcy property in relation to the bankrupt party if the court makes an order under this Part for the transfer.

   74.    Power of court in spousal maintenance proceedings

   (1) In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part.

   (2) If:

   (a) an application is made for an order under this section in proceedings between the parties to a marriage with respect to the maintenance of a party to the marriage; and

   (b) either of the following subparagraphs apply to a party to the marriage:

   (i) when the application was made, the party was a bankrupt;

   (ii) after the application was made but before the proceedings are finally determined, the party became a bankrupt; and

   (c) the bankruptcy trustee applies to the court to be joined as a party to the proceedings; and

   (d) the court is satisfied that the interests of the bankrupt's creditors may be affected by the making of an order under this section in the proceedings;

   the court must join the bankruptcy trustee as a party to the proceedings.

   (3) If a bankruptcy trustee is a party to proceedings with respect to the maintenance of a party to a marriage, then, except with the leave of the court, the bankrupt party to the marriage is not entitled to make a submission to the court in connection with any vested bankruptcy property in relation to the bankrupt party.

   (4) The court must not grant leave under subsection (3) unless the court is satisfied that there are exceptional circumstances.

   (5) If:

   (a) an application is made for an order under this section in proceedings between the parties to a marriage with respect to the maintenance of a party to the marriage; and

   (b) either of the following subparagraphs apply to a party to the marriage (the debtor party ):

   (i) when the application was made, the party was a debtor subject to a personal insolvency agreement; or

   (ii) after the application was made but before it is finally determined, the party becomes a debtor subject to a personal insolvency agreement; and

   (c) the trustee of the agreement applies to the court to be joined as a party to the proceedings; and

   (d) the court is satisfied that the interests of the debtor party's creditors may be affected by the making of an order under this section in the proceedings;

   the court must join the trustee of the agreement as a party to the proceedings.

   (6) If the trustee of a personal insolvency agreement is a party to proceedings with respect to the maintenance of a party to a marriage, then, except with the leave of the court, the party to the marriage who is the debtor subject to the agreement is not entitled to make a submission to the court in connection with any property subject to the agreement.

   (7) The court must not grant leave under subsection (6) unless the court is satisfied that there are exceptional circumstances.

   (8) For the purposes of subsections (2) and (5), an application for an order under this section is taken to be finally determined when:

   (a) the application is withdrawn or dismissed; or

   (b) an order (other than an interim order) is made as a result of the application.

   75.    Matters to be taken into consideration in relation to spousal maintenance

   (1) In exercising jurisdiction under section 74, the court shall take into account only the matters referred to in subsection (2).

   (2) The matters to be so taken into account are:

   (a) the age and state of health of each of the parties; 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 subparagraph (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.

   (4) In this section:

   “party” means a party to the marriage concerned.

6. In relation to the order for the payment of funds into the superannuation funds, that is, an injunction pursuant to s.114 of the Act:

   (1) In proceedings of the kind referred to in paragraph (e) of the definition of matrimonial cause in subsection 4(1), the court may make such order or grant such injunction as it considers proper with respect to the matter to which the proceedings relate, including:

   (a) an injunction for the personal protection of a party to the marriage;

   (b) an injunction restraining a party to the marriage from entering or remaining in the matrimonial home or the premises in which the other party to the marriage resides, or restraining a party to the marriage from entering or remaining in a specified area, being an area in which the matrimonial home is, or the premises in which the other party to the marriage resides are, situated;

   (c) an injunction restraining a party to the marriage from entering the place of work of the other party to the marriage;

   (d) an injunction for the protection of the marital relationship;

   (e) an injunction in relation to the property of a party to the marriage; or

   (f) an injunction relating to the use or occupancy of the matrimonial home.

   (2) In exercising its powers under subsection (1), the court may make an order relieving a party to a marriage from any obligation to perform marital services or render conjugal rights.

   (2A) In a de facto financial cause (other than proceedings referred to in, or relating to, paragraph (e) or (f) of the definition of de facto financial cause in subsection 4(1)) the court may:

   (a) make such order or grant such injunction as it considers proper with respect to the use or occupancy of a specified residence of the parties to the de facto relationship or either of them; and

   (b) if it makes an order or grants an injunction under paragraph (a)--make such order or grant such injunction as it considers proper with respect to restraining a party to the de facto relationship from entering or remaining in:

   (i) that residence; or

   (ii) a specified area in which that residence is situated; and

   (c) make such order or grant such injunction as it considers proper with respect to the property of the parties to the de facto relationship or either of them.

   Sections 90SB and 90SK apply in relation to an order or injunction under this subsection in a corresponding way to the way in which those sections apply in relation to an order under section 90SM.

   Note 1: This subsection does not apply to proceedings referred to in paragraph (g) of the definition of de facto financial cause that relate to proceedings referred to in paragraph (e) or (f) of that definition.

   Note 2: The same requirements in sections 90SB (length of relationship etc.) and 90SK (geographical requirements) for section 90SM orders must be satisfied for orders and injunctions under this subsection.

   (3) A court exercising jurisdiction under this Act in proceedings other than proceedings to which subsection (1) applies may grant an injunction, by interlocutory order or otherwise (including an injunction in aid of the enforcement of a decree), in any case in which it appears to the court to be just or convenient to do so and either unconditionally or upon such terms and conditions as the court considers appropriate.

   (4) If a party to a marriage is a bankrupt, a court may, on the application of the other party to the marriage, by interlocutory order, grant an injunction under subsection (3) restraining the bankruptcy trustee from declaring and distributing dividends amongst the bankrupt's creditors.

   (5) Subsection (4) does not limit subsection (3).

   (6) If a party to a marriage is a debtor subject to a personal insolvency agreement, a court may, on the application of the other party to the marriage, by interlocutory order, grant an injunction under subsection (3) restraining the trustee of the agreement from disposing of (whether by sale, gift or otherwise) property subject to the agreement.

   (7) Subsection (6) does not limit subsection (3).

7. In relation to the sale of the property, that too is probably an injunction under s.114.

8. Let me deal with the issue of the repayment of funds into the superannuation fund.  The order sought would be futile, and the Court declines to make it.  What is clear is that the Respondent Husband has taken funds out of his superannuation fund. 

9. Whether he still retains control of it is an issue for final hearing.  There are sufficient irregularities in his evidence as well as real issues about lack of plausibility of his evidence to lead the Court to be satisfied that the money in question is certainly not in the superannuation fund in which it is supposed to be, but what is not known is where it is and whether he retains control of it.  In the present situation, the known pool of assets is large enough to make any necessary adjustments even without the superannuation in question.  So there is no prejudice to the Wife by not making the order, and the Court feels that as a general proposition it should not make futile orders. 

10. Turning to the second issue about whether the Property U property should be sold, the Wife’s evidence does not disclose a sufficient basis for even contemplating an order that she seeks.  However, the Court acknowledges that her circumstances might change and, for example, that the Husband’s failure to comply with any other orders of the Court might precipitate a revisiting of the Orders for the sale of the property. 

11. In relation to spousal maintenance, in effect the main issue for determination, the Court is satisfied that the Wife has crossed the metaphorical threshold set out in s.74 that she is unable to work. The evidence she adduces about her attempts to attain work together with the evidence she gives about her past injuries and work history satisfy the Court in this regard. The Court quantifies her needs as follows: firstly, in the first period, up until 7 November, $564, and thereafter, from 7 November, $984.

12. The reasons for this are as follows:  the Wife’s needs are set out in her Financial Statement.  Possibly her greatest need is in relation to rental accommodation at item 21, but in her Affidavit she acknowledges that this has already been prepaid to 7 November this year, so this needs to be reflected in the Orders.  Item 30 of her Financial Statement refers to credit card payments, but these are disallowed, as, consistent with her own evidence, the expenses are reflected in item 60 of her Financial Statement.  Turning to that item, there are matters that are either clearly mistaken or clearly excessive.  For example, $210 per week for telephone is either a mistake or it is clearly excessive.  In any event, the Court allows $25 per week.  In the circumstances of this particular family, a claim for entertainment of $50 per week is also excessive.  The Court allows $25.  The same conclusion in relation to books and magazines at $50.  The Court allows $25.  When these adjustments are factored in, the Wife is unable to establish a need beyond the Orders that I have foreshadowed, that is to say, $564 per week henceforth and $984 from 7 November. 

1. The Court acknowledges the Husband’s argument that the Wife has capital available to her.  She does, but it is well recognised that a spouse otherwise in need of maintenance should not be required to use up her capital (Mitchell & Mitchell [1995] FamCA 32; Kiesinger & Paget [2008] FamCAFC 23). As it is, and the Court quite frankly realises this, there is no assurance that the maintenance order will be paid, and in any event, one can reasonably expect that the Wife will have need for some capital to fund the legal expenses. The final hearing in this case is a year away.

2. Of course, the question needs to be asked as to whether the Husband has capacity to pay.  The Court finds that he has, based on the application of well-known principles in circumstances where there is reason to believe that the Husband has not complied with his duty of disclosure to the Court (Weir & Weir (1993) FLC 92-338). His evidence about what can only be described as inappropriate utilisation of the funds in his superannuation fund is plainly unsatisfactory. The inconsistencies between his Affidavits, the obvious omission to explain in his first Affidavit and the inherent implausibility of his evidence about the use and application of his superannuation fund all cast a giant shadow of doubt over the rest of the Husband’s evidence in relation to, firstly, the alleged trust funds held by him on behalf of family members and, secondly, his current employment, earning capacity and actual income. Another example is that he fails to explain how his weekly expenses are met on a weekly basis in circumstances where he says he has no income. There is every reason, even at this early stage of these proceedings, to be sceptical about the Husband’s evidence.

3. The Court has previously said it does not make futile Orders.  It does not regard the making of a spousal maintenance order that might not be paid as a futile order.  The liability will accrue and can ultimately be taken into account in a final order, and indeed arrears of maintenance might even enjoy a certain priority in bankruptcy.  This case has a long way to go.  Whilst a hearing has been appointed, a Conciliation Conference will be beneficial to the parties.

I certify that the preceding fifteen (15) paragraphs are a true copy of the reasons for judgment of Judge Altobelli

Associate: 

Date:         18 August 2015