Hackford and Hackford

[2016] FamCA 925

FAMILY COURT OF AUSTRALIA

HACKFORD & HACKFORD [2016] FamCA 925

FAMILY LAW – SPOUSAL MAINTENANCE – Where the wife seeks spousal maintenance four years after the parties separated – Where the wife contends she is unable to support herself and the children adequately – Where the wife alleges the husband has inhibited her capacity to earn an income – Where the wife seems to suggest that the family’s current accommodation is substandard – Where the husband contends that the wife may have other available financial resources that are not disclosed.

Bevan & Bevan (1995) FLC 92-600 at 81,981-81,982; (1993) 19 Fam LR 35 at 42
Eliades & Elides (1981) FLC 91-022 at 76,232. See also Clauson and Clauson (1995) FLC 92-595
Hackford & Hackford [2015] FamCA 415
N & N (1997) FLC 92–782 at 84643
Nutting & Nutting ((1978) FLC90–410 at 77,094

Family Law Act 1975 (Cth)ss 72, 74, 75

APPLICANT: Ms Hackford

RESPONDENT: Mr Hackford

FILE NUMBER: SYC 7358 of 2012

DATE DELIVERED: 3 November 2016

PLACE DELIVERED: Parramatta

PLACE HEARD: Parramatta

JUDGMENT OF: Hannam J

HEARING DATE: 12 October 2016

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Michael Whittemore Solicitor

COUNSEL FOR THE RESPONDENT: Mr Jackson

SOLICITOR FOR THE RESPONDENT: Kydon Segal Lawyers

Orders

1. The wife’s application for spousal maintenance is dismissed.

2. Order 2 (14) of orders made 2 July 2015 is discharged.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Hackford & Hackford has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: SYC 7358 of 2012

Ms Hackford

Applicant

And

Mr Hackford

Respondent

REASONS FOR JUDGMENT

Introduction

1. The parties who separated finally in October 2012 are engaged in property and parenting proceedings. 

2. The parties were engaged in protracted proceedings with respect to the parenting arrangements for their three children in Singapore and final orders were made in that jurisdiction in May 2015.

3. Throughout the proceedings in Singapore the husband remained residing in Australia. 

4. In mid May 2015 the wife returned to Australia in circumstances which are more fully set out later in these Reasons.  Initially she and the children lived for a short time in Western Australia.

5. Orders were made with the consent of the parties in July 2015 that the wife and children return to Sydney where the husband was living, and that the husband pay various expenses associated with the children and a sum of $400 per week by way of spousal maintenance from 6 July 2015.

6. The parties have been locked in a bitter and ongoing dispute since May 2015 which has involved many applications and court appearances.  Little progress has been made with the property proceedings. 

7. On 12 October 2016 I heard competing applications with respect to spousal maintenance.  The husband seeks that the order that he pay spousal maintenance of $400 per week be discharged while the wife seeks an order that the husband now pay $1750 by way of spousal maintenance.

8. It is the wife’s position that her income is less than her reasonable expenses and that the previous order for maintenance is insufficient.  She contends that she needs $1750 per week to maintain herself and the children adequately and that the husband has the capacity to pay this sum.

9. The husband contends that the circumstances in which he agreed to the previous order for payment of maintenance have changed, and that the wife does not need any sum by way of maintenance as she has other sources of undisclosed income.  He also contends that he no longer has the capacity to pay the $400 per week.

Background

1. The husband who is 46 and the wife who is 44 met in around 1992 when they were both working in a particular church community in Sydney.  They formed a relationship shortly thereafter and married in 1995.

2. Over the course of their marriage, the parties had three children.  Their eldest daughter who is almost 16 was born in 2000 and a second daughter who is 11 was born in 2005.  A third child, a boy who was born in 2008 and is now eight years of age.

3. Over the course of their marriage, the parties purchased at least one property and established a number of businesses with the wife playing a significant role.  Initially, the wife was in the service industry and later became involved in writing, training and educational materials in the same industry.  

4. The parties also explored the possibility of entering into franchise agreements for the businesses and a franchise sale was being negotiated with a potential franchisee in New Zealand shortly before the parties separated.

5. There is significant dispute between the parties about the financial success or otherwise of various businesses in which the parties were engaged and the role the parties played within those businesses.  There is also significant dispute about the value of the parties business interests at various times throughout the marriage.

6. The parties initially separated in August 2011 when the children were 10, five and three years of age.  Shortly after separation, the parties transferred their shareholdings in four companies to each other and resigned as directors of the companies in which they were no longer shareholders.  As a result each of the parties became directors and shareholders of two companies respectively.  There appears to be a significant dispute concerning the value of the respective companies, the liabilities of the companies and the general circumstances concerning the transfers.  According to the husband a dispute in relation one of the companies has been ongoing for many years and resulted in threatened litigation in 2015. 

7. The wife as sole Director of one of the companies she retained entered into the franchise agreement as franchisor with the franchisee in New Zealand in November 2011.  Under the franchise agreement the wife’s company received initial sums totalling $80,000 and ongoing amounts throughout the life of the five year agreement (with two rights of renewal of five years each)

8. From 2012 the husband operated the businesses he retained following separation under a new name and legal structure.

9. In June 2012 the family moved to Singapore for the purposes of attempting to reconcile and it appears that the family unit did remain intact for some months. 

10. In October 2012 the parties separated permanently as the wife relocated with the children to a location within Singapore that was unknown to the husband. 

11. At the beginning of November 2012 the husband returned to Australia from Singapore and commenced parenting proceedings in the Federal Magistrates Court, as it was then known, in Sydney.

12. The wife also commenced parenting proceedings in Singapore and the husband participated in those proceedings.

13. Throughout the course of the proceedings in Singapore which took a number of years, the children continued to remain living with the wife in Singapore.  The wife did not seek any financial support for herself or the children in Singapore following separation and earnt a considerable income from her own endeavours at this time.  From September 2014 she was earning $240,000 per annum.

14. On 14 May 2015 the Singapore parenting proceedings were finally determined with an order that the parties have “joint custody” of the three children and that the husband have “sole care and control” of the children for a period of six months.  The husband was granted leave to bring the children back to Sydney and the wife was initially to have “no access” with the children but thereafter was to have such “access” for a minimum of two hours in Sydney as could be facilitated with the assistance of “The Australian Children’s Contact Services”.  The husband was required to attend and ensure that the children attended counselling and therapy for the purposes of repairing the relationship between himself and the children.  After the six month period, both parties were to have “shared care and control” of the children, provided that the wife was residing in Sydney.

15. The day after the Singapore Court determined the parenting proceedings, the husband accompanied the three children to Australia from Singapore.  The initial destination was to be Brisbane so that the children could become acquainted with members of the paternal family.

16. Notwithstanding the Singaporean orders, for reasons which are still unclear, the Australia Federal Police assisted in releasing the children to the care of the wife at Brisbane International Airport.

17. The following day the wife unilaterally and without the knowledge or consent of the husband, removed the children to a small town in rural Western Australia about 500km from Perth.

18. The husband then commenced recovery proceedings for the children in this Registry.  For the Reasons given in my Judgment of 21 May 2015[1], orders were made that the husband have sole parental responsibility for the children, that the children live with the husband, that the wife do various things specified in the orders to ensure that the children were delivered to the husband and that in the event the children were not so delivered then a recovery order was to issue.

    [1] Hackford & Hackford [2015] FamCA 415

19. The wife did not comply with the orders for the return of the children and the recovery order was not able to be executed.  The relevant authorities were unable to locate the children who the wife had taken into hiding in Western Australia. 

20. Thereafter, the husband made a number of further applications in an attempt to locate the children and have them returned to his care.  The wife also appealed against the recovery order and sought a stay of the order but the appeal was not pursued.  Ultimately, the wife attended this Registry with the children in late June 2015.  Orders were then made for the children to live with the mother in the Sydney area.

21. The wife has resided with the children in the Sydney area as required under orders that have been made on various occasions since that date.  As I understand it, the children are now well settled in Sydney.

22. On 2 July 2015, various orders were made with the consent of the parties.  Pursuant to these orders, the wife and children were to live in a home formerly rented by the husband and he was to be responsible for the rent and electricity.  The husband was also to be responsible for school fees and the costs associated with the children’s extracurricular activities and uniforms and he was also ordered to pay spousal maintenance in the sum of $400 per week. 

23. The parties were divorced in August 2015.

24. On 11 September 2015 the husband’s solicitors notified the wife that the husband regarded the July 2015 orders as “an arrangement” which had been agreed to in order to allow the wife to re–establish herself in Sydney, and that given the wife’s earning capacity and the husband’s own outstanding debts and expenses, the husband then intended to cease paying the spousal maintenance and internet and electricity bills.  The solicitors also informed the wife that the husband would be terminating the lease agreement.  The husband had at that stage made application to discharge the July 2015 orders but the application had not been determined.

25. The husband ceased paying spousal maintenance of $400 per week on 14 September 2015.

26. As foreshadowed by the husband’s solicitor, the husband terminated the lease on the home in which the wife and children were living.  Although the husband was required under the orders to continue paying the rent until 1 March 2016 the parties subsequently reached an agreement that the wife and children would vacate the premises on 4 January 2016.

27. From February 2016 the wife’s long term partner Mr J began living with the wife and her children.

28. On 4 February 2016 the wife and children began living in alternate rented accommodation.  The children settled at schools in the eastern suburbs of Sydney.

29. The wife applied for a child support assessment and the husband paid child support as assessed by the Child Support Agency (CSA).

30. In March 2016 the wife sought to vary the Child Support Assessment and as a result the husband’s assessment was significantly increased.  As understand it, the assessment was undertaken by the CSA on the basis of financial records of the husband’s company.  The findings of the CSA concerning the husband’s level of income, which is also relied upon by the wife in this interim application, is a significant matter of dispute between the parties. 

31. The husband lodged an objection with the CSA and on 8 September 2016 his objection was upheld.

32. The husband recommenced paying spousal maintenance of $400 per week from 18 June 2016.

33. The husband paid child support as required until September 2016 when the wife requested to CSA to end child support payments for the children.

The Law

1. The Court must consider the spousal maintenance claim in accordance with the assessment process identified by the Full Court In the Marriage of Bevan[2] which requires:

   a)A threshold finding under s 72

   b)A consideration of the factors in ss74 and 75(2)

   c)No fettering principle is to apply so that any pre-separation standard of living must not automatically be awarded where the respondent’s means permit; and

   d)The Court to exercise its discretion in accordance with provisions of s 74 with ‘reasonableness in the circumstances’ as the guiding principle

   [2] (1995) FLC 92-600 at 81,981-81,982; (1993) 19 Fam LR 35 at 42.

2. Section 72 of the Family Law Act 1975 (Cth) (“the Act”)provides as follows:

   (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).

3. The test of ability to support one’s self in s 72(1) was interpreted in Eliades and Eliades[3] as:

   “[N]ot identical to the test of whether one is in need but means whether the applicant is in a position to finance himself or herself from his or her own resources. That is to say, the test is whether by reason of earning capacity, by reason of capital or other sources of income which have accrued independently to the applicant, the applicant is in a position to look after herself …”

   [3] (1981) FLC 91-022 at 76,232. See also Clauson and Clauson (1995) FLC 92-595.

4. The recipient of maintenance is entitled to be maintained ‘adequately’. The word ‘adequately’ was interpreted by Lindenmayer J in Nutting and Nutting[4] as:

   A standard of living which is reasonable in the circumstances, including the circumstance that the parties are no longer husband and wife and that the assets and resources which were formerly available to them both in common have now been divided between them.

   [4] (1978) FLC 90-410 at 77,094.

5. The Full Court agreed with this interpretation in In the Marriage of Bevan (supra). The Full Court also said that a court is not bound by a principle that an applicant is entitled to the same standard of living as was enjoyed prior to separation whenever the respondent is able to pay.

6. Mullane J in N & N[5] stated that:

   [T]he interpretation of the expression “unable to support herself or himself adequately” is subject to the words “having regard to any relevant matter referred to in subsection 75(2).

   [5] (1997) FLC 92-782 at 84643.

What are the wife’s reasonable needs? And to what extent can she support herself?

1. In determining the threshold issue in Section 72 of the Family Law Act 1975 (Cth) the Court is to have regard to the matters set out in 75(2).

75(2) matters

1. The parties are in their 40’s and so far as I am aware are in a good state of health.

2. Neither of the parties raises physical or mental incapacity in relation to an ability for appropriate gainful employment.  Each has demonstrated that they are physically and mentally capable of earning an income.  However, the wife raises the allegation that the husband has inhibited her capacity to earn an income through his alleged campaign of misinformation on the internet.  Although it is not clear, I assume that this is a fact or circumstance which the wife contends the justice of the case requires to be taken into account under s75(2)(o).

3. The statements on the internet and social media sites upon which the wife relies, annexed to her affidavit are very difficult to read as they are poor reproductions.  However, it is clear that one entry purports to have been made by the husband’s sister on 22 September 2014 and another purports to have been made by the husband on the same date.  The other documents are either illegible or appear to be comments made by third parties whose connection with the parties is unknown.  In my view, even on the wife’s case, these internet statements taken at their highest could not have had an impact upon the wife’s reputation as she contends.  According to her, she was appointed as a business development manager of a company in Singapore with a monthly salary of $20,000 per month at around the same time that these statements were made. 

4. Having attached no weight to these documents relied on by the wife, there is no evidence upon which I could be satisfied that any actions of the husband have had any detrimental impact on the wife’s capacity to earn an income.

5. According to the wife’s affidavit, she has had an impressive history and demonstrated capacity to earn a significant income both in Australia prior to separation and in Singapore following separation.  As the husband’s contribution to the support of the wife and children following separation had been limited to child support until July 2015 I draw the inference that the wife capably supported herself and the children for over three years.  For the reasons given, I am not satisfied that the husband’s conduct has impeded the wife’s capacity to earn an income and there is no reason why her capacity is in any other way limited.  On the basis of the wife’s previous pattern of employment I am satisfied that she has the capacity to earn a reasonable income.

6. So far as the wife’s current income is concerned, in her Financial Statement sworn 27 September 2016, the wife says that she earns approximately $500 a week in total salary or wages before tax.  The wife does not state any details of her employer but states that she is employed by “various casual employers”.  However, an interim superannuation statement dated August 2016 attached to her Financial Statement indicates that her superannuation fund has received monthly employer contributions from a particular employer regularly since November 2015.  It is not clear why the details of this employer or any others are omitted in the wife’s Financial Statement.  Further, the wife has not filed any other documents such as wages slips to support her claim as to her income.  For these Reasons, I have reservations about whether the wife has accurately stated her current income.

7. The financial resources available to the wife is also a matter in dispute.  According to her affidavit and Financial Statement she receives $400 per week from her partner.  The wife says that he earns $1000 per week but also fails to declare any information to verify his income.  There is also in my view some weight to be attached to the husband’s contention that the wife may have other available financial resources that are not disclosed.  The issue of any financial entitlements arising from the wife’s franchise agreement for the business in New Zealand and her capacity to enforce a judgment in her favour from Singapore are two of the matters in dispute.  The wife has also obviously had some capacity to pay legal fees which would suggest that she has other financial resources available to her.

1. The wife has the care and control of the three children who are 16, 11 and eight years of age.  The husband has been paying child support in Australia though this has been a matter of dispute between the parties which has resulted in an objection being successfully lodged by the husband.  Subsequent to the date of the objection decision, the wife has requested that the CSA end the child support payments for the children.  There is no evidence of other commitments of the parties that are necessary to enable the party to support him or herself or their children or of responsibilities of either party to support any other person.

2. The wife receives $240 by way of “family benefit” and also $263 which is described as an “NEIS Full time student payment”.  The wife does not address the issue of her being a “full time student” in her affidavit and the basis upon which this payment is made is unknown.

3. The issue of a reasonable standard of living, being one of the matters that the court is to take into account in relation to spousal maintenance appears to be another matter of significance to the wife in this application.  As I understand it, a reasonable standard of living goes to the heart of the applicant wife’s reasonable needs.

4. This is a very unusual application.  It is being determined four years after the parties separated and throughout that period of separation the wife has demonstrated a capacity to support herself and meet her reasonable needs without any contribution by the husband.  While it is not entirely clear, it appears that the wife contends that she did not need the husband’s support when she was living in Singapore following separation but has needed it since arriving in Australia in May 2015. 

5. The wife appears to attach significant weight in this application to the fact that the husband consented to orders that he pay the rent for premises for herself and the children in Sydney and $400 per week in spousal maintenance in July 2015. 

6. In my view, no inference can be drawn from the husband’s consent to these orders in July 2015 which is relevant to the issue of the wife’s capacity to support herself and her reasonable needs.  It is to be remembered that at the time the husband consented to these orders, there had been protracted parenting proceedings in Singapore which resulted in orders that he have sole custody of the children for six months from May 2015 and that he be permitted to return to Australia with the children.  It is unknown why the Australian Federal Police intervened in the parenting arrangement upon the arrival of the husband and children in Australia in May 2015 and the wife then unilaterally and covertly relocated to Western Australia.  The husband was at this time attempting to encourage the wife to return to Sydney with the children.  In these circumstances it was in my view, totally reasonable that the husband consented to orders to provide financial assistance for the family to live in Sydney.

7. It cannot however in my view, be incumbent on the husband to continue to support the wife if she cannot demonstrate that she is not reasonably able to support herself simply because he previously consented to orders for spousal maintenance in particular circumstances.

8. I accept the wife’s contention that her current expenses set out in her Financial Statement and affidavit are modest.  However, on her own evidence the wife’s partner pays the household rent in full and her own expenses are only $155 per week.  Her expenses are well able to be covered by the average weekly income of $1000 that she declares, and the additional $100 contributed by her partner. 

9. It is difficult to understand why, when the wife asserts that the children’s weekly expenses are $644 she is no longer seeking child support from the husband.  However, although the children’s expenses are not to be taken into account in a claim for spousal maintenance, even the total expenses for herself and the children of $799 each week can be paid for from the wife’s weekly income, as her partner’s contribution completely covers his own expenses and all of the rent. 

10. The wife seems to suggest in her affidavit that the family’s current accommodation is substandard.  She describes it as “far inferior” to the accommodation in which the family had previously been living when the husband was paying the rent or to other accommodation in which she and the husband had lived throughout the lives of the children, even following separation.  As noted previously there is no principle that an applicant for spousal maintenance is entitled to the same standard of living as was enjoyed prior to separation.

11. There is also a dispute between the parties about the cost of rent of premises of a similar standard to those in which the family had previously been living prior to March 2016 when the wife and children moved to publicly subsidised housing.

12. There is however no satisfactory explanation as to why the wife is not earning a considerably greater income in her chosen occupation and could thereby pay rent on higher quality premises. I am of the view that the wife’s current circumstances are not due to an inability to support herself adequately but due to her own choice not to work more hours each week. 

13. One of the matters referred to in 75(2) (h) relates to the extent to which the payment of maintenance to the applicant would increase her earning capacity by enabling her to undertake a course of education or training.  Although the wife receives a payment which seems to be related to her studies there is no suggestion in this matter that such studies would increase her earning capacity. Rather, the issue of further studies is not addressed at all in the wife’s affidavit and only emerges incidentally through a reference to the payment in her Financial Statement.

14. Although findings of any matters in dispute between the parties including their respective contributions to the matrimonial assets cannot be determined at this stage, there is no dispute that both the wife and husband made significant contributions to the financial resources of both parties.

15. The parties were married for just over seven years prior to final separation.

16. The wife does not assert that there is a need to protect her in continuing to play role as a parent.  She has at all times since the children were young been actively employed and earnt a considerable income.  The children are now in primary and secondary school and it is not contended that the wife’s role as a parent requires protection.

17. There is very little information concerning the financial circumstances of the wife’s partner.

Summary and conclusion

1. As previously noted, this is an unusual application for spousal maintenance as the parties finally separated four years ago.  Since that date the wife has been able to support herself and the children to an apparently high standard in Singapore.  It may even be, though it is unable to be determined on this application, that the wife had a greater earning capacity than the husband during the marriage and following separation. 

2. After the father and children returned to Australia and it was intended that the children live with the husband for at least six months in accordance with the Singapore orders, the wife also returned and covertly relocated with the children to Western Australia.  When she returned to Sydney in circumstances where the husband sought to re–establish his relationship with his children, the husband agreed to support the wife by spousal maintenance and by paying her rent and some other outgoings.  Subsequently the wife also sought Child Support in respect of the children’s expenses, which she now no longer seeks.

3. Although the wife contends that her capacity to earn an income at a similar level to that which she previously earned has been affected by the actions of the husband, I am unable to make a finding to this effect.  There is no other reason, in my view, that the wife cannot earn more than she currently earns having regard to her expertise and skills.  I also have some concerns that the wife may have access to other income or financial resources as she has made an incomplete disclosure as to these matters.  The wife does not give any details about her employers which is clearly available to her to enable verification of her claimed income.

4. While the current circumstances of the wife may not be to a standard that she previously enjoyed, I am not satisfied that the standard of living she enjoys is unreasonable.

5. Accordingly, I am not satisfied that the wife is unable to support herself adequately as required to be established by her as a threshold issue.  Accordingly, the husband’s circumstances and capacity to pay does not arise, and the wife’s application for spousal maintenance is therefore dismissed.

6. Although the husband previously consented to an order that he pay spousal maintenance for the wife of $400 per week, I am satisfied that he did so in circumstances where he was seeking to encourage the wife to relocate to Sydney and support her in doing so. 

7. I am also satisfied that in agreeing that such an order be made, the husband did not concede that the wife would continue to be incapable of being reasonably able to support herself at all times in the future. 

8. Although I have not made a finding as to the husband’s capacity to pay spousal maintenance, in circumstances where he is seeking that the previous order be discharged, the threshold issue of the wife’s ability to support herself must still be considered.  For the Reasons given, I am not satisfied that the wife has established that she is unable to reasonably support herself adequately.  Accordingly, the order requiring the husband to pay spousal maintenance made in July 2015 is discharged.

I certify that the preceding eighty one (81) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hannam delivered on 3 November 2016.

Associate: 

Date:  3 November 2016