Gilholme & Gilholme
[2021] FCCA 1821
•23 July 2021
FEDERAL CIRCUIT COURT OF AUSTRALIA
Gilholme & Gilholme [2021] FCCA 1821
File number(s): SYC 4570 of 2021 Judgment of: JUDGE B SMITH Date of judgment: 23 July 2021 Catchwords: FAMILY LAW – PARENTING – 13 year old child – mental health concerns - change of school - child wants to move to school near father she now lives with – 10 minute trip to local school - 2.5 hour return trip to former school near mother – other factors: Child may change school – referral to mental health support service to be acted on forthwith
PROPERTY - interim spouse maintenance – assessment of unutilised earning capacity - COVID-19 lockdown effect on Sydney labour markets: interim spouse maintenance till March 2022 – liberty to seek further spouse maintenance post March 2022
Legislation: Family Law Act 1975 (Cth) pt VII, div 5, ss 60CA, 64B, 65AA, 65D, 72(1), 75(2), 79A Cases cited: Deiter & Deiter [2011] FamCAFC 82
Eaby & Speelman [2015] FLC 93-654
Goode & Goode [2006] FamCA 1346
Marvel & Marvel [2010] 43 Fam LR 348
Re G: Children's Schooling [2000] FamCA 462
SS & AH [2010] FamCAFC 13Number of paragraphs: 116 Date of hearing: 13 July 2021 and 15 July 2021 Place: Sydney Counsel for the Applicant: Mr Roberts Counsel for the Respondent: Ms Spain Solicitor for the Applicant: Barkus Doolan Solicitor for the Respondent: Watkins Tapsell ORDERS
SYC 4570 of 2021 BETWEEN: MS GILHOLME
Applicant
AND: MR GILHOLME
Respondent
ORDER MADE BY:
JUDGE B SMITH
DATE OF ORDER:
23 JULY 2021
THE COURT ORDERS THAT:
1.The matter be listed on 7 February 2022 at 9.30am for mention.
2.The parties do all acts and things to cause the child, X born in 2008 to be enrolled in and thereafter attend B School for her entire secondary school education.
3.The parties do all acts and things and sign all documents necessary to cause the child, X born in 2008 to be referred to the Child Adult Mental Health Service (CAMHS) program at C Hospital pursuant to the referral of Ms D registered psychologist or such other referral is obtained. A copy of these orders may be provided to that Hospital or Service.
4.The Respondent (‘husband’) pay or cause to be paid by way of spousal maintenance to the Applicant (‘wife’) the sum of $750.00 per week commencing on the first Monday following the making of these Orders and each Monday thereafter and finishing with the last payment on Monday 7th March 2022. This is without prejudice to the wife to bring a further application in respect of the period from 14 March 2022.
5.Liberty is granted to the parties to approach the Court in Chambers to have the matter relisted on seven (7) days’ notice for mention if any issues arise.
6.Within 28 days, each party comply with their obligations under Part 24 of the Federal Circuit Court Rules 2001 for full and frank disclosure.
7.Any Application in a Case or Objection to Subpoena made returnable by the Registry from the date of these orders until the next adjourned date will not be heard on that date without the express leave of Judge B Smith.
AND BY CONSENT THE COURT ORDERS THAT:
8.That within 14 days from the date of these Orders, the wife shall provide the husband:
a.The names of three (3) experts that she proposes as suitable to undertake a valuation of the husband’s interest in:
i.E Pty Ltd; and
ii.F Pty Ltd
9.Within 14 days of Order 8, the husband shall nominate and notify in writing to the wife of his choice of the single expert to be appointed to value the husband’s interests in:
i.E Pty Ltd; and
ii.F Pty Ltd
10.In the event the husband fails to nominate a single expert in accordance with Order 9, the wife shall be at liberty to thereafter choose one of the nominated experts to be appointed as single expert.
11.Within seven (7) days of receipt of the husband’s nomination or upon nominating an expert in accordance with these Orders, the wife shall provide to the husband a draft letter of instruction, and within seven (7) days of receipt, the husband shall either sign and return same or provide a marked-up version of any proposed changes.
12.The husband is to pay for the expert report in the first instance.
13.Liberty is granted to the parties to approach the Court in Chambers to have the matter relisted on five (5) days’ notice in the event of dispute as to the expert report.
AND THE COURT NOTES THAT:
A. It is not appropriate to put an unlimited time on the spousal maintenance given the current circumstances of COVID-19 and the associated lockdown, which impacted on the decision. By March 2022 the lockdown impacts will hopefully have finished and the wife will be in a position to establish her gainful employment / earning capacity in the open labour market.
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 Gilholme & Gilholme is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
EX-TEMPORE REASONS FOR JUDGMENT
JUDGE B SMITH:
These are short from oral reasons for decision, pursuant to s 69ZL of the Family Law Act (‘the Act’) in an interim urgent application for parenting orders concerning schooling for a child, and in respect of an application for spousal maintenance.
The matter was heard before me last week. It involves a degree of urgency, which means, in my view, it is appropriate to provide the parties with a decision orally today, rather than to make them wait the two or three months that would be required to provide the decision in writing.
Given the way in which both parties sought to conduct the interim hearing, I emphasize that an interim hearing is, as was said in Cowling v Cowling (1998) 22 FamLR 776 at 780:
…an abridged process where the scope of the inquiry is necessarily significantly curtailed. As a consequence, the Court needs to exercise considerable caution against being drawn into matters properly dealt with in the trial process.
I must do the best I can on an interim basis in the context of this necessarily abridged process, where there is much disputed about the facts, and there has been no cross-examination.
The short facts are as follows.
The applicant mother (‘mother’) was born in 1982 and she is 39 years old. The respondent father (‘father’) was born in 1980 and he is 41 years old. They commenced cohabitation in about 2005, married in 2007 and had three children.
The eldest child X was born in 2008. She is 13 years old and in year 8 at G School in Suburb H where she has attended since the beginning of year 7 last year. The second child Y was born in 2009 and he is 11 years old. The third child Z was born in 2011 and is nine years old.
The parties finally separated in September of 2019. They were divorced, and the divorce became final on 25 December 2020.
The father has remarried to a lady name Ms J and there is a step-daughter named K, and she is 14 years old. The father is a professional, and the sole director of a family business, and also has an interest in what appears to be a related company and business called E Pty Ltd (‘E Pty Ltd’). He lives at Suburb L with Ms J and K and now with X who moved to live with him from about mid-December 2020.
The mother lives with Y and Z, who spend five nights a week with her, and two nights a week with the father, Ms J, K and X.
The mother did not disclose her address in the affidavit for reasons which are not clear to me so I do not know where she lives, but I presume it is somewhere near Suburb H, where G School is.
From the parties separation until October 2020, X was also spending five nights a week with the mother and two nights a week with the father. X now spends time with the mother in accordance with her wishes.
The mother says that X’s move was motivated by her wanting her own bedroom. Unfortunately, the mother’s living circumstances are such at the moment the three children share one bedroom, and one can understand that a 13 year old girl might want more privacy than that would afford.
Unfortunately, the mother says that her relationship with X has been negatively impacted since the move. The mother says she now only talks to X about once per fortnight, as X has not been responding to her. X has spent only three overnights with the mother since about December 2020.
X’s mental health is extremely concerning and I will consider that further a little later.
X is in year 8 at G School, where she has been since the commencement of year 7 in 2020. It appears she is doing well academically there.
It was agreed that the travel time for X between the father’s place at Suburb L and G School is about an hour and 15 minutes each way, which is to say two and a half hours a day, or 12 and a half hours of travel time per week. This would be a relatively long daily journey even for an adult travelling to and from work.
Complicating all of this, X has had, unfortunately, many relocations of schools and homes. She has been to five schools and that is very unfortunate.
The mother wants X to continue at G School to the end of year 12. Order 2 of the mother’s application for interim orders filed on 22 June 2021, which was one of the orders argued, was “[t]hat the parties do all acts and things to cause the children X born in 2008 (“the child”) to remain enrolled in and thereafter attend G School for her entire secondary school education.” [original emphasis]
The father’s reply set out in his response filed on 9 July 2021 at Order 1 was “[t]hat the parties do all acts and things to cause the child, X born in 2008 to be enrolled in and thereafter attend B School for entire secondary school education”. He also seeks that the mother’s application otherwise be dismissed.
B School is about a 10 minute trip from the father’s. It is referred to, at some points, as a 10-minute round trip. Either way, there is a significant difference in travel time.
It appears that X’s currently expressed view is that she wants to move to G School. However, the mother said she had a series of communications from X which X had previously sent saying that X did not want to change schools.
It is not clear what the factors motivating X are. The mother says at paragraph 51 of her affidavit that she is concerned that in light of the father’s “Manipulative behaviour (coercive control) in the past, I am concerned that Mr Gilholme is influencing X’s view to change schools.”
On the other hand, it may be that she does not want to travel two and a-half hours a day for school.
The other factor that was raised, is that X had apparently decided that she is not heterosexual and would therefore prefer not to attend a Catholic School where her preferences are not encouraged. I will turn later to this, as this is an interim hearing and to the extent to which there are contested facts I am not in a position to decide the. However, I must do the best with the evidence I have.
Turning now to X’s mental health, it is a significant concern. It is clear on all parties’ evidence that X presently has significant mental health issues of the kind which, if left untreated, could have dire long term consequences for X, her mental health and future prospects.
Each party has provided evidence confirming their concerns about X’s mental health and, despite the conflicts between the parties, I accept that both the parties are very concerned about X in this regard. It is unfortunate that the conflict between the parties means that they are having difficulty acting in a coordinated fashion to assist X.
X was sent to see a psychologist, Dr D. Dr D objected to her subpoenaed documents being produced. I gave an oral decision which required its production, balancing all the issues involved. I have read a lot of the subpoena material. The best summary, which seems to draw all the threads together, is unsurprisingly contained in the initial psychological assessment of Dr D dated 13 March 2021.
There were things that occurred after this report which I will come to, but I am going to summarise some of the key parts of this report which is at page 33 of the bundle of material provided to me. The presenting issue was:
X presented with longstanding low mood, significant difficulties in interpersonal relationships and social withdrawal.
Although I do not intend to read the whole document on to the record, I have taken the entire document into account and want to highlight certain matters. It was noted that [ pg 34]:
X shows restricted appetite and refuses to have meals with her family. She said she preferred to only consume canned or snack food. Her stepmother has noticed that X has secretly been purging food from her body by a method X had heard through her friends or online, which is consume a large amount of salt water. X was described to have low self-care and personal hygiene;
Further:
As for energy lXls, X reports feeling tired constantly. She said she often sleeps less than 7 hours a night and thinks that she is more energized after sleeping three hours. She would often spend her nights talking to her friends on her devices.
And further:
On the Strengths and Difficulties Questionnaire, X scored high in items indicating conduct problems.
There was some very concerning reports about her not being inclined to help others if hurt and fighting a lot, and it was noted that she is often accused of lying and cheating.
And it continued:
…X reported being constantly restless and cannot stay still for long, she is often constantly fidgeting or squirming, is easily distracted and finds it difficult to concentrate, and reported that it is untrue that she can finish the work she is doing or that her attention is good.
The vulnerability factors Dr D identified were:
-Constant relocation of schools and homes may be creating a sense of instability in X’s life which makes it difficult for X to establish friendships and develop a sense of security. X has moved schools fives times and moved house multiple times to accommodate for father’s work.
-X does not seem to have a parental figure who is able to understand and meet her emotional needs. She said that she felt closest to her stepmother.
-The custody conflict for X between her parents has led X to distrust the behaviours or words of her mother and leads X to cast doubt on the affection that is shown to her. X said she attributes the kindness shown by her mother as simply a way to win custody over her.
-X has recently moved in full-time with her father’s family and navigating her relationship with her older stepsibling appears to place strains on her.
The report continued:
Context in which problem most likely to occur:
The custody conflict between X’s parents appears to be a significant source of stress for X. In addition, X appears to be frequently involved in friendship group difficulties, which may amplify the isolation and instability she experiences in her day-to-day life.
And then further:
Maintaining factors:
-X’s mother regularly attempts to try and reconnect with X. This reportedly causes X stress, as she believes she is being emotionally blackmailed to return to live with her mother.
-X’s involvement with a group of peers who reportedly have significant mental health concerns may influence X’s coping.
-X’s inability to express her emotional needs and have them met by her caregivers would make it difficult for her to develop a sense of self or self-awareness of her emotions.
In terms of the history of the presenting problem, it was noted [Pg 35] that:
X said she had felt passive suicidality since Year 6 and was feeling low throughout Year 7. X said she had no plans to act on her thought.
There was another unfortunate intervening event where:
X reported that she was sexually assaulted on Christmas Day, 2019 by her maternal grandfather’s best friend.
That had been reported to the Joint Investigation Response Team Referral Unit (JIU) for a more detailed assessment. Detectives advised on 12 March 2021 that there was not enough physical contact from the older man to pursue further legal action. I do not know what the facts are of the case, but X’s perception of it is what is relevant here.
Dr D gave a diagnosis pursuant to the diagnostic and statistical manual version 5 (DSM-5).
The diagnosis was [pg 35]:
Adjustment Disorder with mixed disturbance of emotions and conduct: Both emotional symptoms (e.g., depression, anxiety) and a disturbance of conduct are predominant
and also:
Parent-Child Relational problem.
She also, gave a provisional diagnosis pending further assessment, although the parties kept making submissions as if it was a final diagnosis, of:
Conduct Disorder adolescent-onset type, with shallow or deficient effect, mild severity.
Given the history that was reported, including by X, one can understand why that provisional diagnosis was made.
The positive factors for treatment were said to include X’s intact social skills and the desire to connect with others. The fact that she had hobbies that she engaged in regularly with friends, e.g., Minecraft, which gave her enjoyment and as I understand it, Minecraft is an online game she can play wherever she is. Also, the fact that X’s father and step-mother were eager to be involved in her treatment.
The possible obstacles to treatment were said to be the fact that [pg 36]:
-The relationship between X and X’s parents is complex, and there may be difference in opinion on the purpose of X’s treatment.
-X may find it difficult to develop trust towards an adult considering her wariness towards adults.
That is a very concerning diagnosis and preliminary report for a girl of X’s age. It is indicative of the potential for significant problems.
I also note that eating disorders in girls of this age are potentially lethal. They have the highest mortality rate of almost all of the mental health disorders. Large numbers of sufferers suffer significant physical problems in the long run.
It is not surprising that Dr D strongly recommended that X be referred to the Child Adolescent Mental Health Service (CAMHS) at the C Hospital which is near where X is living now.
From general knowledge that is a multi-disciplinary support mental health service for children, in particular those experiencing both emotional and psychological difficulties and, obviously, often is these are both displayed in behavioural issues.
The father says the mother blocked this referral. The mother says that she merely blocked Dr D’s further involvement with X, not the referral to CAMHS. The reality is that this appears to have had the same effect and X has not yet been referred to this service.
Both parties agreed during submissions that this referral was appropriate and should be acted on as soon as possible and I have no doubt that is absolutely the case.
From what Dr D said when she appeared before the Court for determination of her subpoena objection, the nature of the referral is such that, due to funding reasons, X cannot be in private counselling at the same time she is in the public system.
I have no doubt that the kind of multi-disciplinary support that can be provided by psychiatrists, psychologists, nutritionists, counsellors at a specialist service is what X needs. I am going to make an order that effect be given to the referral and I would expect that to be acted on forthwith.
In April 2021, after that report, there was suicidal ideation and X was referred to a hospital. Unfortunately, as Dr D had to make disclosures, X was no longer willing to see her and that is where these issues have arisen with the mother not wanting Dr D to be involved.
I do not have a full current mental health assessment however Dr D’s is three or four months old, which is reasonably current but a preliminary review. It is the best material I have so I will rely upon it, but obviously these are complex questions.
The mother says that given X’s mental health condition, the fact she has friends at G School, and that it is clear she has a good relationship with her school counsellor at G School, it would not be in X’s interests for her schooling to be changed now. The mother says that the Court should await expert evidence.
It would obviously be preferable to have expert evidence concerning both X’s current mental health situation, her expressed preferences which are to move, and whether they may have been improperly influenced, to help me assess and balance the risks of her losing the continuity of the current school, school counsellor, and a school who knows about her problems and contact with her current friends, against the risks of not acting on her expressed desire to move, noting the fact that it will save a lot of travel time, and noting the fact that her current school may not support her expressed sexual preferences. There are risks either way associated with a 13 and a half year old who has got a provisional diagnosis of conduct disorder as well as an adjustment disorder, and who has what one would consider disordered eating though not yet perhaps an eating disorder.
There is no doubt that either way there are significant risk issues.
Unfortunately, I do not have expert evidence apart from the material I have cited. I have read the other reports, but the other material from counsellors etc. was not relevant expert opinion evidence. There is no Child Inclusive Conference available until towards the end of the year. No one has suggested an urgent private expert report, and the Court cannot pretend that not making a decision until the end of the year or later when an expert report can be obtained is not in itself, a decision with potential adverse effects for X.
I was referred to Re G: Children's Schooling [2000] FamCA 462 but the reality is that all that says is that each case has to be determined on its facts for the best interests of the child.
I refer to the legal principles that bind me in the making of this decision.
Each party seeks parenting orders as defined in Part VII Division 5 of the Act. I note section 64B and the Court’s power in 65D. The paramount consideration that must guide me is what is in X’s best interests. I note section 60CA and 65AA. The primary considerations when determining X’s best interests are first and foremost, the need to protect X from physical or psychological harm, from being subjected to or exposed to abuse, neglect or family violence. It was not raised as an issue here. The second is the benefit to X of having a meaningful relationship with both parents and again, that is not an issue here that there is a benefit.
It is very unfortunate that X has taken a certain view of her mother. That view has to be taken with a grain of salt, given that X is a 13 year old girl who is having emotional difficulties. There is no suggestion that the parents are involved in abusing her or that either parent thinks it would not be appropriate for X to have a meaningful relationship with both parents. The real issues here are those as joined by the parties.
I note what was said in Banks & Banks [2015] FamCAFC 36 that:
…the issues joined by the parties that dictate which section 60CC factors are relevant.
Of all the section 60CC factors, what it really comes down to is, and the parties agree on this, what is going to be in X’s best interests overall. To stay at G School which does not involve the change or to move to the new school.
I do not have an expert to help me balance those mental health risks, but it seems to me that there are risks either way. There is a risk that if X is moved, it further destabilises her because she perhaps loses touch with her friends, although she should be able to stay in touch with them online with Minecraft. She loses the one existing counsellor she has, although I do not know what that person’s skills are. Given that X is to be referred immediately to CAMHS, subject to their wait list, that may ameliorate the risk to some extent.
There is however also a very clear risk with a child of this age, particularly with the psychological profile that has been disclosed, if the child has decided it is time to move and is told she cannot move when she has already got concerns about her mother, she will know it is her mother who is blocking the move, and may also just not go to school. That would be an even worse result that could add to her mental stress. Children, as much as adults, have the problem that when you are making bad decisions because of mental health problems, you do not know you are making bad decisions, and it is very easy to spiral down.
I note what was said in Goode & Goode [2006] FamCA 1346 and that the competing proposals and issues have been identified. As noted in Marvel & Marvel [2010] 43 Fam LR 348, this is a temporary measure, and if X’s mental health were not so bad, I might be minded to wait for a period of months to get a Child Inclusive Conference, but that is not a realistic option in this case.
This is a case involving mental health risks and as said by the Full Court in SS & AH [2010] FamCAFC 13:
Apart from relying upon the uncontroversial or agreed facts, a judge will sometimes have little alternative than to weigh the probabilities of competing claims and the likely impact on children in the event that a controversial assertion is acted upon or rejected. It is not always feasible when dealing with the immediate welfare of children simply to ignore an assertion because its accuracy has been put in issue.
Similarly, in Deiter & Deiter [2011] FamCAFC 82, the Full Court talking about risk assessment said at [61]:
The assessment of risk is one of the many burdens placed on family law decision makers. Risk assessment comprises two elements – the first requires prediction of the likelihood of the occurrence of harmful events, and the second requires consideration of the severity of the impact caused by those events. In our view, the assessment of risk in cases involving the welfare of children cannot be postponed until the last piece of evidence is given and tested, and the last submission is made. We accept, however, it is always a question of degree depending upon the evidence before the Court.
Given the disputes about the reason behind X’s views and the dispute of facts, I note what was said in Eaby & Speelman [2015] FLC 93-654:
That does not mean that merely because the facts are in dispute, the evidence on the topic must be disregarded, and the case determined solely by reference to the agreed facts.
The reason for X’s views on changing schools may be in dispute but the fact that she has the view is not. The fact that she has mental health problems is not. One of the problems under vulnerability factors Dr D referred to was the constant relocations of schools and homes and that further destabilising X is a risk. I am however also very aware of the fact that X is 13 and she is in year 8. The evidence suggests that she is very headstrong. That is from both parties and Dr D. It apparently took the mother two hours to get X to get her out of her school uniform into her pyjamas again. When children are in that mindset, ignoring their views also creates real risks.
It is concerning that she will lose her school counsellor, but as said previously she needs to be immediately enrolled in the CAMHS program and provided with the full, wraparound mental health support that such programs specialise in.
She will be able to play online games with her friends at G School.
Weighing all of those factors, and constrained by the nature of an interim hearing but being required to do the best I can because this matter cannot wait until further evidence, on balance I find that the lesser risk to X is to allow her to continue at the B School.
The second issue before the Court is raised in the mother’s application for interim orders at Order 4, that is:
The husband pays or cause to be paid by way of spouse maintenance to the wife the sum of $1,082 per week commencing on the first Monday following the making of these orders and each Monday thereafter.
This is a circumscribed hearing however the parties sought to make arguments as if it was a full hearing, again I am going to do the best I can.
Throughout the relationship the mother worked as an office manager for the father’s family business F Pty Ltd. It is agreed she was earning $150,000 per annum working as an office manager. She ceased working there in September 2020 and was paid out her entitlements between September 2020 and March 2021. The parties entered into a final property agreement or settlement on 21 April 2020. The mother received $20,000 which she has spent to fund living expenses. This is believable given the costs associated with having herself and three children to care for even for, even though she is receiving child support.
Spousal maintenance was not dealt with and despite the written submissions, it was common ground that there is no impediment to the Court hearing this issue.
The mother says she has casual employment at Employer M where she is earning $149 per week and working one day a week. She was working two days a week but she has to take Y for therapy on the second day. She says she is trying to get a second days’ work which would give her about $300 per week. She commenced her own business which commenced trading in January 2021 and works in that two days per week. She says it is trading but not generating income, however I do not know what the financial position of the business, or whether there are any sales. I do not know what the business plan is. I do know that business plans are often unfortunately little more than aspirational guesses, even when they go to regulated IPOs. But in any event, I do not know the financial position of the business, what its future prospects are or what she hopes to make out of it. It is however understandable that someone who has worked in that industry is taking her skills and trying to go back into that industry.
As part of the background, the mother is also seeking a final hearing to re-agitate the property settlement pursuant to section 79A of the Act, on the basis of the father’s failure to fully disclose his interest in E Pty Ltd. There is also an issue about whether the mother was legally represented at the relevant times, and how she could not have been aware of E Pty Ltd which was a related to business to F Pty Ltd, as she was the office manager at F Pty Ltd.
The father says in his financial statement that his 50% in E Pty Ltd has a value of zero dollars. It’s not clear to me why a business that has a long history of trading would have a zero dollar valuation. It may be that if that was the value he disclosed, and if it turns out not to be true, there was a misrepresentation which might justify the section 79A reopening, but I have no proper evidence of any of these things and no idea what the true position may be. That is something that will have to be tested and dealt with another time.
There were issues and argument about disclosure. The mother has been seeking disclosure, particularly related to the value of E Pty Ltd. Although the spousal maintenance application was only brought on recently, it is clear she was asking for disclosure earlier this year in anticipation of a spousal maintenance application.
She set out her financial position and that is in her financial statement – where she gets the $1,082.
Section 72 of the Act states:
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).
It is a reasonably straightforward two step issue.
The husband is only liable to maintain the wife to the extent that he is reasonably able to do so and only if the wife is unable to support herself adequately, that includes by reason of having the care or control of a child, by reason of age, physical or mental incapacity for appropriate gainful employment or any other adequate reason.
The mother has said that Y has certain needs which impact on her which is a relevant matter pursuant to 75(2). She doesn’t suggest any mental or physical incapacity for appropriate gainful employment.
The first question is whether the wife is unable to support herself adequately. Depending upon the precise jurisdiction involved gainful employment involves either four or five factual elements in gainful employment, or as it is often called in total “earning incapacity”.
The first and second elements relate to whether there is any physical restrictions or psychological restriction upon capacity to work. There is no suggestion of that here.
The concept of gainful employment includes thirdly what is referred to variously as either “education, training, and experience” or “transferrable skills”, i.e. the third element is what skills you have, including by reason of the totality of your education, training and experience, to go out into the labour market and to obtain and hold employment.
The wife clearly has skills as an office manager. It is not known what particular skills she had. The occupation of office manager involves a variety of tasks which are standard, but each individual job would be different. It is not known, for example, whether she was an office manager who had to work with MYOB or Quicken and dealt with accounts, whether she did staff management, or just general administration. Nevertheless, she clearly has some skills.
The fourth element is, assuming she is physically and psychologically capable of going out into the marketplace, and she has these certain skills, what jobs within her capacity and skills are available in the reasonably accessible labour market for which she would be a viable candidate, taking into account any barriers to entry including e.g. time out of the labour force.
The wife in this case does not have the kind of barriers to entry that one commonly sees for people who have been in a marriage and where they have not been working. If you have not been working for 10 years that is a barrier for entry.
The fifth element is, taking all those things into account, what amount can you actually earn in the real world labour market. What are the actual dollars?
The husband says the wife has unutilised earning capacity and started with an assumed capacity of $150,000 per annum based on her prior earnings. Usually past earnings are the appropriate starting point for an assessment of earning capacity that take into account all of the factors I have identified, however, where married parties run a business, the allocation of income between them does not occur at arm’s length.
Based on the information provided about F Pty Ltd, and the knowledge one has of the employment markets as a member of the community generally, the sum of $150,000 for an office manager of a company of that size stretches credulity as a valuation of her earning capacity at arm’s length.
Clearly, the wife has an earning capacity that is not currently productive of income. If her child care obligations mean that she has to spend a day, which is not capable of being used fully for work, because of Y’s therapy, that is a relevant factor, but she would still have four days available for work.
It is not unreasonable that she is seeking to take the skills she has from her time working in a business, to try and establish a business in the same general field, which may in fact reflect her best long-term future earning capacity. New businesses take time to establish, but there must be a point at which the business either makes money or it folds. There is also the fact that if she works two days a week in her new business, and she might be able to have Y’s appointment on one of those days, so she has got some flexibility, which would give her three days for other work.
The wife has demonstrated the capacity to earn at $149 per day, so she has at least $450 per week demonstrated capacity of doing three days casual work per week. Her experience as an officer manager, assuming that she has done the standard tasks that would bring her within the ANZSCO coding for office manager, i.e. the Australia and New Zealand Classification of Occupations which is the standard classification system used for all occupations or jobs in Australia, that one would be expect she may have transferable skills to undertake a role which would earn, conservatively, say about $60,000 gross per annum in Sydney. I take into account my general knowledge of the world and how the markets work, which would depend on the size of the business and the quality of her past experience in determining this issue on an interim basis absence a formal assessment of her earning capacity. If she is skilled with MYOB, that might attract a higher remuneration. If she has just done scheduling, perhaps a lower one.
The balancing factor, which was not addressed in detail, although everyone was aware of it, is that Sydney is in a hard lockdown due to COVID-19, with growing daily numbers and no current end in sight. I take that into account on the basis of general knowledge, and think it is uncontroversial that that means that the existence of a reasonably available labour market is currently not clear. The simple fact is that while businesses are locked down and people are not leaving the house, as they are only supposed to leave the house if they cannot work from home and given we are the point where even the construction industry has been locked down for the first time in New South Wales, it is not all clear to me that there is a labour market for new entrants or that people who are worried about having to go and try and access JobSeeker or something similar in order to keep their businesses running would be looking to take on a new employee.
It is a factor I cannot ignore given that it affects the current reasonably available labour market, which is a relevant factor to gainful employment and so earning capacity.
In a final hearing, assuming no physical or psychological restrictions, one might have an assessment prepared by a vocational assessor, based on a full history of work duties, and a labour market investigation to address elements three, four and five. On an interim application where there is no such report I have to do the best I can.
A variety of other factors were raised. That included the mother’s new boyfriend having made three payments for her rent. The fact that there were only three suggests that they weren’t consistent and he is not really contributing. He is a new boyfriend, and as has been foreshadowed he may well now be scared away by these proceedings. There is not sufficient evidence to form a view that he is a financial resource.
I am satisfied that the mother has some need, although not to the extent she claims.
The second issue is the father’s capacity to reasonably maintain the mother. The father’s income is said to be $5818 a week and his expenses $5270. This is a $548 excess to start with. The other fact to take into account is that the father’s new wife earns $2862 per week and appears to be only contributing $350 to food and groceries a week and nothing to the rent for the house she and her daughter are living in. She is clearly a financial resource.
There was a dispute about disclosure, and the facts are highly disputed facts where E Pty Ltd may be worth nothing even though it is still trading. Both parties expense statements were general and I take them into account to the extent to which I can.
Turning back to the fact that we are in a relatively hard lockdown, it is unlikely that there is much new hiring going on now, and it may also be very difficult to start and run a new business now. The reality is that I cannot know how long it will take, but I will need to make a decision now because the mother needs to pay her bills.
Balancing all of those matters, I find that the wife has established a need but is not fully exercising the earning capacity she has, and that she did not take measures before the lockdown more appropriately exercise that capacity. Balancing all of these issues I find that the wife has established a need at the moment of $750 per week. I am comfortably satisfied the husband is in a position to meet that sum.
However, this should not be a long-term order, given the fact that the lockdown has played such a significant part in my assessment. Hopefully this lockdown will finish sometime in the next few months, as either the outbreak is brought under control by the lockdown and or as more people are vaccinated. We will see a time when the wife’s business will either start to generate income, or she will need to make a decision to close it down and go to the market to exercise her latent earning capacity as an office manager, which at four days a week full employment would still likely cover most, if not all of, her needs for the relevant legal purposes.
The lockdown may take a while and the wife may not be quick to get work again, as even after the lockdown some business may be scared.
On that basis, the justice of the case requires the making of an interim order. It is not an ideal order because it would be better to deal with matters once and for all, but it is not appropriate to put an unlimited order on the spousal maintenance in these circumstances.
By March next year, which is just over six months, the wife should be in a position to establish what her true earning capacity is and the issue may have to be re-visited.
I will make orders accordingly.
I certify that the preceding one hundred and sixteen (116) numbered paragraphs are a true copy of the Reasons for Judgment of Judge B smith. Associate:
Dated: 6 August 2021
Key Legal Topics
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Family Law
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Civil Procedure
Legal Concepts
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Expert Evidence
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Jurisdiction
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Remedies
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Consent
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