Hall and Hall (No. 3)

[2013] FamCA 975

FAMILY COURT OF AUSTRALIA

HALL & HALL (NO. 3) [2013] FamCA 975

FAMILY LAW – SPOUSAL MAINTENANCE – interim orders –orders made for the husband to pay a specified amount of spousal maintenance to the wife on a monthly basis in addition to paying the school fees for the children.

Family Law Act 1975 (Cth) s 72, 75, 77, 80

In the Marriage ofMitchell (1995) FLC 92-601

APPLICANT: Ms Hall

RESPONDENT: Mr Hall

FILE NUMBER: ADC 3671 of 2013

DATE DELIVERED: 10 December 2013

PLACE DELIVERED: Adelaide

PLACE HEARD: Adelaide

JUDGMENT OF: Dawe J

HEARING DATE: 9 December 2013

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr N J  Ackman QC (with Mr Werner)

SOLICITOR FOR THE APPLICANT: Barnes Brinsley & Shaw

COUNSEL FOR THE RESPONDENT: Mr Richards

SOLICITOR FOR THE RESPONDENT: David Burrell & Co

Orders

1. Pending final determination of property settlement and spouse maintenance proceedings between the parties:

   1.1    Paragraphs 8.1 and 8.3 of the Order of 23 October 2013 are continued.

   1.2The husband pay as and when they fall due all school fees for the children of the parties including all associated or related charges or expenses billed by the children’s school to either of the parties.

   1.3The husband pay spouse maintenance to the wife in the sum of TEN THOUSAND EIGHT HUNDRED AND THIRTY THREE DOLLARS [$10,833.00] per calendar month commencing on Monday 16 December 2013 and each 16^th day of the month thereafter payable to an account nominated by the wife and provided to the husband’s solicitors in writing by 4.00 pm on Thursday 12 December 2013.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Hall & Hall (No. 3) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT ADELAIDE

FILE NUMBER: ADC 3671 of 2013

Ms Hall

Applicant

And

Mr Hall

Respondent

EX TEMPORE REASONS FOR JUDGMENT

1. This is the application for spouse maintenance in the Amended Initiating Application in which the wife sought interim orders both by way of urgent spouse maintenance and by way of interim spouse maintenance, in paragraphs 10, 11 and 12.  Paragraphs 11 and 12 each seek the sum of $14,000 per month.

2. Paragraph 10 relates to the payment of the outgoings in relation to the property in which the wife and children now reside at E Street, Suburb M, in the State of South Australia. 

3. The Initiating Application came on before me for hearing and the husband opposed the orders sought. 

4. At the hearing the wife was represented by Mr Ackman, QC and the husband by Mr Richards.  There were previously orders made on 23 October 2013 in which interim orders were made by way of children’s orders and various injunctions.  Specifically the parties were directed by order to file Financial Statements to assist the Court in determining the interim maintenance application. 

5. The husband did not file his Financial Statement as ordered by 26 November but instead on 5 December 2013 filed document 27 which is an affidavit in which he gives his version of his financial circumstances. 

6. It was also ordered on 23 October that during the period of the adjournment the wife was to have the sole use and occupation of the E Street property and the husband was to pay the mortgage, rates, taxes and utilities in relation to that property. 

7. The issue which was the primary matter for me to determine in this current application for interim spouse maintenance was whether the wife passed the initial threshold test, or the first test, namely whether the material before the Court disclosed that she was unable to support herself.  It was put on behalf of the husband that the wife had not qualified in that matter, nor had she established the particular need. 

8. Obviously it requires me to also determine that if the need is established whether the amount sought was excessive, as claimed, and whether the husband had the ability to pay the same. 

9. I rely upon sections 72, 75, 77 and 80 of the Family Law Act1975 (Cth) (“the Act”).

   Section 72(1)

   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).

   Section 75(1) and (2)

   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 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 the 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

   Section 77

   Urgent spousal maintenance cases

   Where, in proceedings with respect to the maintenance of a party to a marriage, it appears to the court that the party is in immediate need of financial assistance, but it is not practicable in the circumstances to determine immediately what order, if any, should be made, the court may order the payment, pending the disposal of the proceedings, of such periodic sum or other sums as the court considers reasonable.

   Section 80

   General powers of court

   (1)    The court, in exercising its powers under this Part, may do any or all of the following:

   (a)order payment of a lump sum, whether in one amount or by instalments;

   (b)order payment of a weekly, monthly, yearly or other periodic sum;

   (ba)order that a specified transfer or settlement of property be made by way of maintenance for a party to a marriage;

   (c)order that payment of any sum ordered to be paid be wholly or partly secured in such manner as the court directs;

   (d)order that any necessary deed or instrument be executed and that such documents of title be produced or such other things be done as are necessary to enable an order to be carried out effectively or to provide security for the due performance of an order;

   (e)appoint or remove trustees;

   (f)order that payments be made direct to a party to the marriage, to a trustee to be appointed or into court or to a public authority for the benefit of a party to the marriage;

   (h)make a permanent order, an order pending the disposal of proceedings or an order for a fixed term or for a life or during joint lives or until further order;

   (i)impose terms and conditions;

   (j)make an order by consent;

   (k)make any other order (whether or not of the same nature as those mentioned in the preceding paragraphs of this section), which it thinks it is necessary to make to do justice; and

   (l)subject to this Act and the applicable Rules of Court, make an order under this Part at any time before or after the making of a decree under another Part.

   (2)    The making of an order of a kind referred to in paragraph (1)(ba), or of any other order under this Part, in relation to the maintenance of a party to a marriage does not prevent a court from making a subsequent order in relation to the maintenance of the party.

   (3)    The applicable Rules of Court may make provision with respect to the making of orders under this Part in relation to the maintenance of parties to marriages (whether as to their form or otherwise) for the purpose of facilitating their enforcement and the collection of maintenance payable under them.

   (4)    If a bankruptcy trustee is a party to a proceeding before the court, the court may make an order under paragraph (1)(d) directed to the bankrupt.

   (5)    If the trustee of a personal insolvency agreement is a party to a proceeding before the court, the court may make an order under paragraph (1)(d) directed to the debtor subject to the agreement.

   (6)    Subsections (4) and (5) do not limit paragraph (1)(d).

10. In relation to section 72 it is clear that that refers to the wife being unable to support herself adequately having regard to the factors set out in section 75(2).

11. In section 75(2)(b) includes a reference to the parties income, property and financial resources.

12. It was part of the argument in this matter that the wife’s property and possible financial resources were not clarified and therefore the Court should not be in a position to find that the wife satisfied the first threshold test.  In this regard there is the often reported authority In the Marriage ofMitchell (1995) FLC 92-601, in which the Full Court said at pages 81,995–81,996:

    The days are long gone when it is necessary for an applicant for maintenance to use up all of her assets and capital in order to satisfy the requirement that she is unable to support herself “adequately”.  Where the line is to be drawn will depend upon the circumstances of individual cases.

13. The evidence before the Court in this interim matter is striking for the many facts in dispute. 

14. Counsel for the husband emphasised that the wife’s father died in 2009 and the wife has not produced a copy of his Will or any particulars of his estate.  The wife’s affidavit said that she did not have a copy of his Will and did not know the particulars of her late father’s estate.  Presently, therefore, the wife may be entitled to an asset or financial resource or income that is not known.  However, it appears that it is not currently an asset which the Court can take into account as a basis upon which to offset the wife’s claim to be presently unable to support herself adequately. 

15. Similarly, the unknown value of the wife’s shareholding in her family’s businesses at this interim stage does not form a sufficient basis upon which to offset the wife’s interim claim. 

16. It is clear from the material before the Court that the wife has qualifications as a healthcare professional and discloses an income from limited employment. 

17. It also discloses that she has a commitment and wishes to continue with her commitment to provide care for the two children of the marriage.  Consent orders were made during the period of the adjournment that the children live with her and spend specific but limited time with the husband. 

18. Section 72 requires consideration of the factors set out in section 75(2) but when determining these factors, it is a limited determination that I can make because of the matters in dispute. The age and state of the health of the parties raises past issues concerning particularly the husband’s health but that was not put before me as a significant factor at this interim stage. The wife has the care of the two young children but apart from that, neither has disclosed a responsibility to support any other persons.

19. The question of the standard of living which might be reasonable in all the circumstances is a factor which is to be taken into account in these proceedings in determining whether the wife can adequately support herself, taking into account the section 75(2) factors. The other factors under section 75(2) are not significantly relevant to this interim application.

20. One of the significant matters to be determined is the income, property and financial resources of the parties.  As I have previously indicated, there is an unknown factor in relation to the value of the wife’s share in her family’s businesses and her possible or unknown probable interest in her deceased father’s estate.  There is also the question of the husband estimating his own assets in the extensive business interests and real estate. 

21. In the affidavit of the husband filed on 3 December 2013 at paragraph 15 the husband asserts that his current assets are worth $75 million and the current debt is $54 million.  He then described that as indicating a net of $23 million but my arithmetic tells me that that should have read $21 million if the other two figures are correct.  There are no particulars in the affidavit of how these figures have been reached.  Similarly, the husband’s current income and financial resources are not the subject of what could be described as reliable evidence.  He claims a taxable income of $80,340 for the year ended 30 June 2012.  In his affidavit in paragraph 2(a) he then refers to drawings “from various entities as and when needed”.  He is not specific. 

22. The wife’s counsel draws attention to her affidavit in which the wife alleges a conversation with her husband when he said he had an income of $4 million per annum.  This allegation was not denied in the husband’s answering affidavits.  The wife also relies upon the lifestyle and the husband’s payment of living expenses during the period of cohabitation.  In the affidavit filed by the wife in paragraph 58 she sets out the background which included payments being received for housekeeping of $7000 per month reducing to $6000 per month, having previously on one occasion been $10,000 per month, these being housekeeping moneys provided by the husband over and above payment for mortgage, telephone, utilities, holidays, clothes, motor vehicle expenses, entertainment and other items. 

23. Another factor is the commitments that are necessary taking into account the husband is to pay the mortgage, rates, taxes and utilities in relation to the property which the wife and children are now occupying.  I also take into account that he was offering to pay the children’s school fees, clothes and other expenses.  These need to be taken into account in determining the application for interim spouse maintenance. 

24. There is a balancing exercise to consider both what is adequate for the support of the wife and at the same time taking into account what is necessary so far as the commitments are concerned and a standard of living that is, in all the circumstances, reasonable. 

25. There is difficultly in determining this matter on the papers, considering the significant facts in dispute. 

26. Taking into account the past lifestyle and the husband’s conceded financial circumstances I am satisfied he has an ability, on an interim basis, to pay significant spouse maintenance.  Taking into account the wife’s current limited employment and her commitment to the role as parent, I am satisfied that she has established a need for spouse maintenance. 

27. In determining this need I have taken into account the property and financial resources disclosed by her and the apparent lack of access to possible assets of unknown value, namely her father’s estate and the shares in the family business.  On an interim basis I am satisfied that the conditions for spouse maintenance are met.  The amount must be determined taking into account the ability to pay and reasonable needs. 

28. The husband will pay an exceptional amount due as interest on the mortgage, the rates and taxes and utilities.  These, I am told, total $14,150 per month.  He also offers to pay his children’s school fees and other child-related expenses.  I will take into account school fees but the other expenses such as clothing are vague and arrangements for payment would be difficult bearing in mind the inability of these parents to communicate in any appropriate way. 

29. The wife’s Financial Statement refers to weekly total personal expenses of $7368 but she seeks $3500 per week by way of interim maintenance.  Her income is stated to be the salary of her work as a healthcare professional at $300 per week for one session per week.  Part N of the Financial Statement sets out details of the claimed average weekly expenses which total $7101, being $3438 for the wife and $3663 for the children.  The husband has taken issue with these figures.  His estimate of the wife’s expenses is merely $1210.  I am unable to rely on some of the wife’s figures as amounts which are necessary to support the wife in a standard of living that in all of the circumstances is reasonable. 

30. I take into account that the children are living with the wife, however, examples of amounts which do not fit the necessary or reasonable description are as follows (and these are only some of those figures which I give by way of examples):

    (1)food and household supplies of $580 per week, being $460 per week for the children;

    (2)cleaning (house and pool) $580 per week, (especially taking into account an extra charge of pool maintenance of $100 per week);

    (3)books and magazines of $100 per week;

    (4)clothing and shoes of $595 per week.

1. Both parties refer to the lavish lifestyle enjoyed by the family in the past but on an interim basis it is not appropriate to calculate spouse maintenance pending trial on the basis of a claim of $1900 per week or $98,800 per annum for holidays.  This may be a factor to be taken into account when final orders are considered.  I have made adjustments to the expenses claimed by the wife. 

2. Some of the significant reductions considered reasonable result in the following adjustments.  For example, food and household supplies $400 per week; motor vehicle maintenance $100 per week; clothing and shoes $200 per week; entertainment and hobbies $100 per week; holidays $200 per week; education expenses - if the husband is to pay the school fees – reduce to a small allowance of $50 per week; gardening for the house, cleaning and pool, $400 per week and other reasonable expenses adjusting to $100 per week.  Taking all of those factors into account and in particular the past lifestyle and current circumstances and that this order will apply pending the trial of these proceedings, an amount of $2500 per week or $10833 per month is reasonable and appropriate.  This is the sum to be paid by the husband as well as the mortgage and rates, taxes, utilities (gas, electricity) and school fees. 

3. The school fees are $35000 per annum or the equivalent of approximately $3000 per month.  If the husband is to pay the mortgage, rates, taxes and utilities for the wife and children’s residence that is approximately $14150 per month; school fees, $3000 per month and maintenance of $10833 per month make a total of $27983 or approximately $28000 per month. 

4. The husband’s evidence concerning his financial circumstances did not specifically deal with the wife’s allegation that the husband had claimed previously his income was $4 million a year. 

5. His affidavit filed on the 5^th of December 2013 purports to provide particulars of his income.  He says at paragraph 2(a) that his taxable income for 2012 was $80340.  In paragraphs (b), (c), (d) and (e) he says as follows: 

   I do not take a regular income from my business.  I fund my and our family’s lifestyle by drawings from various entities as and when needed.  I am meticulous in the recording of what is a private expense and what is a business expense.  On a monthly basis and then totalled at the end of the financial year drawings are allocated by way of a combination of fully franked dividends, drawings against profit and drawings against loan accounts and distributions of trusts.

6. His assets are estimated in his affidavit filed on 3 December 2013; the previous referred to figures of $75 million, debts of $54 million, which on my calculation leaves net assets on his own estimate of $21 million. 

7. Taking into account these factors and the fact that it is on an interim basis I am satisfied that the husband is reasonably able to make payments of the amounts previously calculated totalling $28000 per month pending trial. 

8. The payments made pursuant to the order may be taken into account and any necessary or appropriate adjustments made when the final property settlement proceedings are determined pursuant to section 79 and section 75(2)(o).

9. I note that the matter is otherwise already referred back to me as an interim listing on 18 March 2014. 

I certify that the preceding thirty nine (39) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 10 December 2013.

Associate: 

Date:  13 December 2013