HAMMILL and Wilson

[2013] FCCA 768

FEDERAL CIRCUIT COURT OF AUSTRALIA

HAMMILL & WILSON [2013] FCCA 768

Catchwords:
FAMILY LAW – Interim spouse maintenance – applicant’s need and respondent’s capacity to pay – duty of full and frank financial disclosure.

Legislation:
Family Law Act 1975, ss.72, 74, 75, 80

Davidson & Davidson (1994) 17 Fam LR 656, (1994) FLC ¶92-469
Weir & Weir (1992) 16 Fam LR 154, (1993) FLC ¶92-338

Applicant: MS HAMMILL

Respondent: MR WILSON

File Number: PAC 1167 of 2011

Judgment of: Judge Halligan

Hearing dates: 10 May 2012 & 5 July 2013

Date of Last Submission: 5 July 2013

Delivered at: Parramatta

Delivered on: 12 July 2013

REPRESENTATION

Counsel for the Applicant: Mr Anderson

Solicitors for the Applicant: Etheringtons Solicitors

Counsel for the Respondent: Mr Mills

Solicitors for the Respondent: Clive Mills and Associates

ORDERS

1. The wife's Amended Application in a Case filed on 7 May 2013 is dismissed, except for paragraphs 1 and 6 of the orders sought therein.

2. The balance of the wife's Amended Application in a Case is adjourned to the final hearing of this matter.

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

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT PARRAMATTA

PAC 1167 of 2011

MS HAMMILL

Applicant

And

MR WILSON

Respondent

REASONS FOR JUDGMENT

Introduction

1. This is the determination of an interlocutory application by the wife for orders-

   a)staying an order for the sale of the parties’ jointly owned home, in which she and the parties’ 12 year old son X live; and

   b)that the husband pay her interim spouse maintenance of $3,500 per month.

2. The wife did not press a further order in her Amended Application in a Case that the husband pay arrears on a loan secured by mortgage over the jointly owned home of $17,959.34.

3. The husband opposes the orders the wife seeks.

4. Concurrently with the hearing of the wife’s application I heard an application by the husband for an order appointing Ms B, clinical psychologist, as a “joint expert” to prepare a report for the rehearing of the substantive applications.  The husband sought an order that the parties equally share the $5,500 cost of the preparation of what in reality would have been an updating report by Ms B, who has already been appointed as a court expert and who prepared a report for the initial hearing.  However, it was put on his behalf that he did not have the funds to meet his share of the cost, and it was the wife's position she could not contribute to the cost.  For reasons I delivered ex tempore at the conclusion of the hearing, not least that the parties both asserted they could not contribute to the cost of an updated report from Ms B, I dismissed the father's application and left in place an order for a Family Report I previously made.

Background

1. The wife is aged 54, the husband is 58.  The parties married in 2000, and finally separated in mid 2007.  There is no evidence before me that the parties have been divorced.

2. They jointly purchased their home in 2004, subject to a bank mortgage.  That home is presently encumbered by two loans – a “consumer loan facility”, which I infer was the original home loan, and a “continuing credit facility” that is, a line of credit, which the wife has drawn on to pay legal fees in the proceedings between herself and the husband, and in relation to which she is making interest only repayments.

3. The repayments under the consumer loan facility are in arrears, as a result of which there has been a default under the parties’ loan agreements with the bank that also brings the continuing credit facility into default, although there are no arrears in relation to that loan.  The mortgagee has threatened enforcement action against the security, the former matrimonial home, if the default continues.

4. The loan balance on the home loan as at 6 May 2013 was $495,618.09, at which date the arrears were $17,959.34.

5. The substantive proceedings between the parties concern both property settlement and parenting disputes.  The competing applications were heard on 6-8 February 2012, with judgment delivered and final orders made on 5 April 2012 (Wilson & Wilson, [2012] FMCAfam 313). The husband appealed against those orders. The Full Court of the Family Court heard the appeal on 22 November 2012, and delivered judgment allowing the appeal and remitting the matter for re-hearing on

   
   

   22 March 2013 (Wilson & Wilson, [2013] FamCAFC 43). The re-hearing is listed before me for four days commencing on 24 September 2013.

6. The property settlement orders made on 5 April 2012 included orders that the parties sell their jointly owned home and divide the proceeds in specified, unequal proportions. The order for the sale of the home was therefore ancillary to and facilitative of the order altering the parties’ interests in the jointly owned home. The source of power to make such an order is s.80, Family Law Act 1975.

7. In allowing the appeal against the property settlement orders, the Full Court discharged the order for an unequal distribution of the proceeds of sale of the home and an order that otherwise the parties retain their own property and resources.  However, the Full Court did not set aside the order requiring the parties to sell their jointly owned home.  In leaving those orders in place, the majority of the Full Court (May & Ryan JJ), said, at [156]-

   “156.    We understand it is agreed that the former matrimonial home must be sold and that currently the parties are endeavouring to achieve the result as set out in orders 11 and 12(a) to (c).  Consequently it is only necessary to set aside orders 12(d) and 13.”

8. Orders 11 and 12(a) to (c) of 5 April 2012, which the Full Court did not disturb, provide-

   “11.  The parties to place the former matrimonial home on the market for sale at a sale price as agreed or failing agreement at $1,150,000 with an agent as agreed by way of private treaty or as otherwise agreed.

   12.    Upon settlement of the sale the proceeds to be applied as follows:

   a.  To discharge the then current mortgage;

   b.  Payment of agent’s commission;

   c.  Payment of all usual costs of sale including solicitors fees and sale adjustments;”

9. The former matrimonial home has not been sold, and the wife now objects to it being sold until the proceedings are finally determined.  She seeks an order “staying” paragraphs 11 and 12 of the orders of

   
   

   5 April 2012 “pending the final outcome of these proceedings”.

10. An initial issue was how to characterise paragraphs 11 and 12(a) to (c) of the April 2012 orders for the purpose of the wife's stay application. As mentioned, they were made in the exercise of the court’s powers under s.80. The power to make orders of the kind referred to in s.80 only arises when the court is exercising its powers under Part VIII of the Family Law Act. It is not an independent source of power (Davidson & Davidson, (1994) 17 Fam LR 656 at 667; (1994) FLC ¶92-469 at 80,874 – 80,875).

11. The orders altering the parties’ interests in property were thus the foundation on which the power to make the order for the sale of the home rested.  On the orders altering the parties’ interests in property being discharged by the Full Court, the foundation on which the orders for the sale of the home as originally pronounced rested was removed.

12. In leaving the orders for the sale of the home in place, it must be inferred that the Full Court, cognisant of the effect of discharging the orders altering the parties’ interests in property on the power to make the sale order as originally made, intended that the sale order continue as an interlocutory order, perhaps as a mandatory injunction under s.114(3) of the Family Law Act 1975.  Both parties agreed to the order for the sale of the home being now treated as an interlocutory order, rather than as ancillary to final orders as originally pronounced.

13. In hearing these interlocutory applications, there has been no cross-examination of the witnesses.  I am therefore unable to resolve any factual issues that arise.

14. I must also emphasise that the findings I make at this stage of the proceedings are based on the untested evidence as placed before me for this interlocutory hearing.  My findings in these reasons in no way pre-empt me making different and even inconsistent findings at the final hearing, when different or further evidence is placed before me and the witnesses are cross-examined on their evidence.  My findings in these reasons will have no bearing on the findings I make after a full hearing of the substantive applications.

The evidence

1. The wife and X have lived in the jointly owned former matrimonial home since separation in mid 2007.  The home is close to the primary school X attends.

2. At separation, the parties agreed that the wife and X would remain in the former matrimonial home, that the husband would pay the mortgage instalments, and the wife would reimburse him $500 per month as a contribution towards the mortgage instalments.  The husband said he agreed to do this only until 2010.  I infer this agreement related only to the consumer loan facility, although the parties’ evidence about the loans is confused and confusing.

3. The husband paid the mortgage instalments from separation in mid 2007 until mid 2011.  The wife reimbursed the husband $500 per month from mid 2007 until mid 2010.

4. There is a dispute between the parties as to the amount of the monthly mortgage instalments, and hence as to the amount the husband paid towards the mortgage.  I cannot resolve this issue at this stage, and in my view it is not necessary to do so to determine the interlocutory issues.

5. In mid 2011, the husband advised the wife that he was suspending mortgage repayments for the months of July, August and September 2011 “due to cash flow issues”.  The wife's solicitors wrote to the husband's solicitors asking for information about the husband's “cash flow issues”, but very soon after this letter was sent, and before any response was received, the wife applied for an administrative assessment of child support.  Consequently, the husband was assessed to pay the wife child support for X at the rate of $886 per month.

6. The husband did not make mortgage payments for the three months July to September 2011, as he had advised.  The wife received child support payments from the husband of $1200 in the months of August and September 2011, which the wife deposited to the consumer loan facility account.

7. In October 2011, the husband resumed mortgage repayments, which had increased to $3,389.48, and the parties agreed to treat half the mortgage repayments as non-agency payments of child support, that is, half the mortgage repayments the husband made were to be credited to him as child support payments to the wife.

8. The wife apparently did not understand that doing so gave rise to the husband accruing credits against future child support, as he was receiving credit for a sum greater than his child support liability each month.  On being advised of this by the Child Support Agency towards the end of 2011, the wife asked the CSA to revert to the normal monthly payment of assessed child support by the husband, which it did from January 2012.

9. The husband received credit for half the mortgage instalments he paid in October, November and December 2011 against his child support as non-agency payments.

10. The husband paid the monthly mortgage instalments from October 2011 until September 2012, but he did not pay any child support, other than the sums credited as non-agency payments.

11. In June 2012, the husband made a change of assessment application to the CSA to reduce the level of child support based on his payment of the mortgage.  The wife cross-applied to increase the child support.  Towards the end of September 2012, these applications were determined.  The exact effect of the determination of these applications is unclear, as the husband annexed only each alternate page of the reasons of the Senior Case Officer to his affidavit.  However, the decision was that the husband's adjusted taxable income amount be set at $169,644 from 1 October 2012 to 30 June 2013, and his self support amount was increased by $20,334 for that period.

12. The wife said that in September 2012, she was advised by the CSA that the husband's child support arrears were $5,304.  The husband said his child support arrears in October 2012 were $4,489.77.

13. On 9 October 2012, the husband's solicitors wrote to the wife's solicitors referring to the wife's refusal to agree to the husband's application to the mortgagee to suspend mortgage repayments “on the grounds of (the husband’s) current financial hardship”, the wife's refusal to treat the mortgage repayments as non-agency payments, and the order for the sale of the former matrimonial home, and advised that the husband had made a child support payment of $1,059 on 7 October 2012 and would make further payments on the 7^th of each month, that the husband would make no further mortgage repayments, and that the husband wished to immediately “re-engage” a named agent to carry out the sale of the former matrimonial home.  The wife gave no evidence of any response from her solicitors to this letter.

14. Although by October 2012 the husband's assessed child support was $1059 per month, he in fact paid $1500 in the four months from November 2012 to February 2013.  Unlike the payments of $1200 the wife received in August and September 2011, the wife paid none of the child support she received to the consumer loan facility account.

15. On 3 December 2012, the husband's solicitors wrote to the wife's solicitors.  The full terms of that letter are not in evidence, as page two of a three page letter was omitted from the copy annexed to the husband's affidavit.  The husband said the letter requested the wife to join with him in making a hardship application to the mortgagee requesting a pause in the mortgage repayments.  How this was expressed in the letter is not in evidence due to the relevant page not being included in the husband's affidavit.  However, the wife's reply, conveyed in her solicitor’s letter of 18 December 2012, is unambiguous – she was not willing to sign an application to the bank to pause the mortgage repayments, and she was not willing to sell the property, even though there was an order in force requiring it to be sold, albeit the property settlement orders were under appeal by the husband, and even though her position as represented to the Full Court on 22 November 2012, less than 4 weeks prior, was that the property must be sold and that the parties were then attempting to effect that result.

16. There is no evidence before me that the property settlement orders were stayed by the court or that the parties agreed not to proceed with the sale pending the outcome of the appeal.

17. In March, 2013, the child support for the period 1 November 2012 to 30 June 2013 was reassessed at $1,150 per month, and the husband has paid that amount since March 2013.  The notice of assessment for this period indicates that the husband's 2012 taxable income used to calculate the child support was $169,644 as determined by a change of assessment decision.  His self support amount is $21,622, the same as for the wife.  That is, the self support amount used in this assessment was not increased in accordance with the departure determination made in September 2012.  Why this is so is not explained by the evidence before me.  I am left to speculate that the Senior Case Officer’s decision may have been changed on an objection to it, or perhaps a fresh change of assessment application was made.

18. In mid March 2013, the wife received a payment of $3,103 from the CSA, being the application of a tax refund the husband was entitled to in reduction of child support arrears.  She also received the husband's monthly payment for that month of $1,150.  Again, the wife applied none of these monies to the consumer loan facility account.

19. On 3 April 2013, the wife received two default notices from the mortgagee of the former matrimonial home, one for each of the loans secured on the home.

20. On 26 April 2013, the husband paid $1,000 to the consumer loan facility account.  He said he did this “by way of computer error”.  On 14 May and 14 June 2013, the wife paid $3,500 to that account.  She said she made both payments “from my savings”.

21. X has ADHD, for which he is medicated on the advice of his paediatrician (Ritalin and Epilim).  The wife said he has poor concentration skills, becomes forgetful, disorganised and becomes impulsive, which is sometimes manifested in aggressive behaviour.  She said that one of the main characteristics of X is that he becomes defiant in his interactions with others and aggressive at times.  He has had a number of suspensions from school for violence to other students.

22. The former matrimonial home has three bedrooms, one of which the wife uses as a home office to conduct her business.  The wife said X needs “an outdoor lifestyle” and hence a unit or town house would be inappropriate for him.  She said he needs a yard in which to play, and hence she needed to live in a house with a suitable yard, such as the former matrimonial home.  She said X has a trampoline at the former matrimonial home that he uses “frequently”.

23. The wife said that the former matrimonial home is near X’s school, (omitted) Public School.  She expressed the opinion that it is in X’s interests that he not change primary schools.  She said she had built up a cooperative working relationship with the school in managing X’s behavioural issues.  She also said that she needs to be relatively close at hand during the school day to be able to attend the school quickly if X is involved in an incident.

24. The wife said it will be necessary to move and for X to change schools at the conclusion of these proceedings, and expressed concern at the impact on X if he had to change schools twice.  She said that if the former matrimonial home was sold before the conclusion of the proceedings, she would need to find alternate accommodation proximate to X’s school so he did not have to change schools.

25. X is due to commence high school next year.

26. In summary, the wife said she sought to remain in the former matrimonial home until the conclusion of the proceedings “to minimise disruption to X in consideration of his ADHD condition”.  However, there is a significant issue in this case as to whether either of the parties alone, or both the parties together, have the financial capacity to satisfy the mortgagee to be able to retain the former matrimonial home until the conclusion of the proceedings.  That issue will be resolved by the determination of the wife’s interim spouse maintenance application.

27. The wife said she spoke to an employee of the mortgagee and advised the employee that the final hearing of this matter would be on

    
    

    24 September 2013, “which means the house will be sold shortly after that”.  She said she was advised by the employee that if repayments on the mortgage were made in the sum of $3,500 by the 17^th of each month “for at least 3 to 4 months”, the mortgagee would not commence enforcement proceedings, and the mortgagee would not insist on payment of the arrears “as you’ve said the property will go on sale around September”.

28. As at 2 July 2013, there was no evidence from the wife that the mortgagee had made further contact with her or had made any further demands on her.

29. The wife is a self-employed (omitted).  She conducts her business through a company she owns and controls.  There is no evidence as to how many hours per week she works.

30. Until she lost a major client in May 2013, she earned $546 per week from her business.  She asserted that the client she recently lost accounted for 35.9% of the total income of her business, and on that basis said she had to reduce the wage paid to her by her company to $355 per week.

31. When she was earning $546 per week, her total weekly income, including child support and Centrelink payments, was $936, of which $3 was an income tested pension, allowance or benefit which I must disregard for the purposes of the wife's interim spouse maintenance application (Family Law Act, s.75(3)), giving a figure for the purposes of her spouse maintenance application of $933 per week. After losing the major client, the wife's total income was estimated to be $769, of which $27 was an income tested pension, allowance or benefit that I must disregard, giving a figure for the purposes of her spouse maintenance application of $742 per week.

1. The wife's expenses are $1,583 per week, including a sum of $807 per week for the two payments of $3,500 the wife paid on the consumer loan facility loan in May and June 2013.  It also includes an amount of $29 per week in interest only payments on the ongoing credit facility loan.  Thus, if the home was sold, the wife’s expenses would reduce by $836 per week, but she would need to provide for the costs of alternate accommodation for herself and X.

2. The wife said that the cost of renting alternate accommodation would be between $900 per week and $1350 per week, based on three properties in the same general area as the former matrimonial home she identified on the internet.  The cheapest had three bedrooms, two recently renovated full bathrooms, a “huge rear yard”, and a three to four space garage.  The most expensive had three bedrooms with ensuite to main, a separate home office, and a fully fenced yard.  The husband put no evidence before the court as to the cost of appropriate alternate accommodation for the wife and X if, as he sought, the former matrimonial home was sold now.

3. Based on the cheapest rental of the three properties the wife identified, the wife’s weekly expenses would increase by $64 if she had to leave the former matrimonial home and find alternate rental accommodation.

4. The wife has savings totalling $7,592 remaining after making the two mortgage payments in May and June 2013.  She owns a motor vehicle she believes is worth $15,000, she believes the shares in her company are worth $6,653, and she believes her household contents are worth $10,000.  She has a superannuation interest in the accumulation phase worth $110,768.  The wife has no liabilities other than the loans secured on the former matrimonial home.

5. The husband in his affidavits and financial statement described himself as a (omitted), working as a contractor with (omitted).  I note he describes himself on emails sent from his business email account as “(omitted)”.  Be that as it may, he contracts his services to (omitted) through a company he owns and controls.

6. The husband stated his total weekly income is $3,610 per week.  He receives interest from a bank account, income from his company, and other benefits from his company.  He estimated the income he currently receives from his company is $2,980 per week, and the value of benefits and director’s fees he receives is $620 per week.  The benefits he received from the company included the costs and expenses of his motor vehicle until he disposed of it in May 2013, and thereafter taxi fares, rail tickets and phone calls as well as the benefit of a “hire car” he uses for both business and personal purposes.

7. The husband said his weekly expenses total $5,634, including $520 rent for his one bedroom apartment, child support, and an amount of $2,955 for legal costs.  He included as part of his expenses expenditure made on his behalf by his company and which he reported as part of his income as benefits received from his business, including a proportion of the rent on his home and his travel and some meal expenses.

8. The husband has savings of $100, household contents he believes to be worth $1,000, and an interest in his company he says is worth ($10,290).  I will refer shortly to the husband's explanation of how he arrived at this negative value.  Why he reported the value of the company as in effect a liability of his was not explained.  The husband's proprietary interest in the company is his shareholding.  He owns one $1 share.  The company’s debts are not the husband's debts.  There is no evidence he has guaranteed them.  How the husband's share in his company can have a negative value was not explained, and hence I am not satisfied this is a true reflection of the husband's property in the company.  Accepting that the company’s liabilities exceed its assets, which is less than clear at the present, the husband's share would have no value, not a negative value.

9. The husband reported that two bicycles he owned were stolen on

   
   

   24 June 2013.  He said they were worth $4,000.  He did not explicitly state whether they were covered by insurance, but I note he did not disclose paying insurance premiums other than for life and TPD cover and income cover, and I infer from this that they were not insured.

10. The husband disclosed a superannuation interest in the accumulation phase worth $365,000.  In addition to the loans secured on the former matrimonial home, the husband disclosed credit card debts totalling $26,000.  He disclosed no other liabilities, despite attaching to his financial statement a letter from his counsel suggesting counsel was owed $2,759.20.

11. The husband said that on 18 April 2013 he was diagnosed with nodules on his thyroid and was scheduled to have his thyroid removed on

    
    

    21 June 2013.  He said he was advised that the gap payment after his private health insurance would be $8,000.

12. The husband apportioned some of his personal expenditure between himself and X.  X had been spending most weekends with his father from after school Friday to 10.00 am Sunday.  The husband said that although he spent time with X uneventfully on 23 and 24 March 2013, when he collected X from school on 28 March 2013, X was sullen and refused to talk to him other than to accuse him of stopping “us” from going to (omitted), saying “we” do not have any money, and telling the husband his mother could not afford to stay in Sydney.  One aspect of the parenting orders set aside by the Full Court on 22 March 2013 was an order permitting the mother to relocate X’s residence to (omitted).  I note that the Full Court’s judgment was delivered on Friday 22 March 2013 in Brisbane.

13. When the husband took X to the wife's home to collect his holiday bag, the husband said X refused to go with the husband as planned for Easter Friday and Easter Saturday.  X did not spend that time with the husband.  X spent time with the husband on 5, 6 and 7 April 2013, but refused to stay with the husband as planned for a week of the April school holidays.  X was also dismissive and disrespectful to the father in SMS exchanges in the latter part of April.  However, on 7 May 2013, the wife messaged the husband that X wanted to spend time with him as usual on 10, 11 and 12 May 2013.

14. The husband did not update his time with X in his subsequent affidavit.  The mother, who relied on affidavits sworn as last as 2 July 2013, did not suggest X was not spending time with his father as he habitually had.  I will therefore proceed on the basis that X has resumed spending most weekends with the husband, and that the husband will continue to incur expense in supporting X when spending time with him.

15. There are unanswered questions about whether the husband has adequately discharged his duty of financial disclosure, despite his financial statement being supplemented with eight pages of notes and having various documents attached to it.

16. The husband disclosed that he disposed of a motor vehicle in May 2013 for $17,750 (Part M of the financial statement).  He does not disclose there that he then disposed of the proceeds of sale, but as already mentioned, his total reported savings are only $100.

17. Note 3 attached to the husband's financial statement comprises two parts, (a) and (b).  Part (a) is cross-referenced to Item 27 (Motor vehicle registration) in Part G (Personal expenditure) of the financial statement.  In Note 3(a), the husband states that he applied the $17,750 proceeds of sale as a director’s loan from him to his company by paying the proceeds into the company’s bank account.  The husband does not report a director’s loan account with the company as an asset at Part I (Property owned by you).

18. Part (b) of Note 3 is cross-referenced to Paragraph 37 (Funds in banks, building societies, credit unions or other financial institutions) in Part I (Property owned by you) of the financial statement.  There, the husband states that while his cash at bank is $100, his company has a total of $5,010 in its bank accounts.  Thus, the whole of the $17,750 he lent the company is not still held as cash by the company, and there is no explanation what became of this money.

19. The husband goes on to say in relation to the value he ascribed at Item 41 (Interest in a business, including a business operated by you as a sole trader, in a partnership or through a proprietary company or a trust) in Part I (Property owned by you) of ($10,290) that he valued the company as the total of its bank accounts less tax liabilities, which he said were $15,300.

20. The husband attached a copy of his company’s 2011/2012 financial report to his financial statement.  The balance sheet suggests that simply setting off the company’s cash at bank against its tax liabilities may not be a full or true reflection of the company’s value, as there appear to be other assets and liabilities, at least at 30 June 2012, and the husband has not indicated, for example, whether the company has disposed of its fixed assets.

21. I am not implying that based on the 30 June 2012 financial report, the husband may be failing to bring to account significant assets of the company, but I am highlighting that the husband's financial disclosure in some respects is rather opaque.

22. In fact, ultimately the husband prima facie has not adequately explained what became of $17,750 cash he received in May 2013, and it is difficult to see that the husband has discharged his duty of full and frank financial disclosure.  This sum is particularly significant, as it would be sufficient to meet the mortgage payments the mortgagee requires to stay its hand of $3,500 per month for five months.

23. Another aspect of the husband's financial statement warranting close examination is his weekly personal expenditure.  Prima facie, when compared with the wife's expenditure for similar items, the husband's claimed expenditure is relatively high.  For example, he claims $550 per week for food for himself and X, of which he attributes $500 to himself.  The mother claims $200 per week for food her herself and X, of which she attributes $120 to herself.  X spends most weekends with his father, and the rest of the time with his mother.  The husband claims $40 per week for clothing and shoes for himself, while the wife claims the same amount, but she apportions $20 to herself and $20 to X.  The husband claims $150 for holidays, while the wife claims $50, apportioned equally between her and X.  The husband claims $20 for cycle maintenance and repairs, but says his bikes were stolen.

24. I am satisfied on the basis of this comparison that there are areas of the husband's discretionary expenditure that so exceed the like expenditure in the wife's household that it indicates the husband is enjoying a significantly higher standard of living in some respects than the wife and X.

25. The husband included as part of his weekly expenditure a sum of $2,955 attributable to his legal expenses of these proceedings.  The husband said that this was based on an assessment by his solicitor of the weekly average of his legal fees “between now and late September”.  His solicitor swore an affidavit estimating the costs the husband would incur for the solicitor preparing for but not attending on the adjourned hearing on 5 July 2013 (12 hours’ work, $4,350), preparing for the final hearing (20 hours, $7,250), and attending on the final hearing (32 hours, $11,600), a total of $23,200.  The solicitor annexed a letter from counsel estimating his fees for preparing for the final hearing (10 hours, $4,400), brief on hearing (“engaged 2 days”, $8,800), and “incidental attendances re costs, engaged ½ day” ($2,000), a total of $15,200.

26. The solicitor said that based on these figures, he estimated that to the conclusion of the final hearing on 27 September 2013, the husband is likely to incur costs in the region of $38,400, which he expressed as a weekly average of $2,955.  The solicitor said that neither he nor counsel is in a position to defer payment of their fees until the matter is concluded and that both his firm and counsel required their fees to be paid by the husband “as invoices are rendered”.

27. There is no evidence of the frequency or basis on which the husband's solicitors and the husband's counsel render invoices, nor is there any evidence as to the terms of invoices, that is, the period after an invoice in rendered within which it must be paid.  The husband's solicitor stated at the bar table that his firm renders monthly accounts, but there is no evidence to that effect.  But accepting that to be so for the moment, unless the solicitor renders invoices for work no yet done, the invoice for the preparation for the final hearing and attendance on the final hearing, a total estimated cost of $18,850, could not be rendered until after the end of September 2013.  When that invoice would be payable is not disclosed, but I am not satisfied the period over which the husband and his solicitor have chosen to average his estimated legal costs is appropriate.

28. The wife too will be incurring legal costs, both for this hearing and for the re-hearing in September, although there is no evidence before me of an estimate of those costs, or when they would be payable.  I note that the wife has drawn on the continuing credit facility to meet an unspecified amount of her costs in the past, but there is no evidence to suggest she can continue to draw on that facility to meet her ongoing costs.

The wife's spouse maintenance application

1. The husband is liable to maintain the wife, to the extent he is reasonably able to, if, and only if, the wife is unable to support herself adequately by reason of having the care and control of a child of the parties’ marriage who is under 18, or by reason of age or physical or mental incapacity for appropriate gainful employment, or for any other adequate reason (Family Law Act, s.72). In spouse maintenance proceedings, the court may make such order for the maintenance of a party to a marriage as it considers proper in accordance with Part VIII of the Family Law Act (s.74(1)). In exercising its jurisdiction to make a spouse maintenance order, the court must take into account the matters in s.75(2) (s.75(1)).

2. I will separately address such of the matters under s.75(2) as are relevant, then determine the wife's spouse maintenance application, before turning to address her stay application.

Parties’ age and state of health

1. As mentioned, the wife is 54 and the husband is 58.  Despite the evidence of the husband about the removal of his thyroid, there is no medical evidence to suggest the health of either party affects her or his ability to work.  The husband said his out of pocket expenses for his thyroid surgery would be $8,000.

The income, property and financial resources of the parties and their physical and mental capacity for appropriate gainful employment

1. As mentioned, the wife said she made payments of $3,500 to the consumer loan facility account on 14 May 2013 and 14 June 2013 “from my savings”.  In a financial statement sworn on 30 April 2013, she said she had savings of $3,470.  That statement indicated that she then had a surplus of income over expenditure of $154 per week.  In her financial statement sworn on 2 July 2013, after she made these payments totalling $7,000 “from my savings”, she said her savings had increased to $7,592, despite her expenditure exceeding her income, taking those payments into account, by $814 per week.

2. Even assuming her surplus of income over expenditure had continued at $154 per week, despite her evidence that in May 2013 she lost a major client and in consequence lost 35.9% of her business’s income, from 30 April 2013 to 2 July 2013, a period of 9 weeks, the wife could have saved no more than $1,386.  Yet the wife has been able to increase her savings over this period by $4,122 despite paying $7,000 from those savings to the mortgagee.  Thus, she has been able to save a total of $11,122 over this nine week period.  The source of this $11,122 is unexplained on the wife's evidence.

3. I am concerned about the adequacy of the wife's financial disclosure, and prima facie it seems she has not discharged her duty to make full and frank disclosure of her financial circumstances.  The unexplained acquisition by the wife of such a large sum over such a short period means I am unable to determine what the wife's income, property and financial resources are.  If a party does not make a full, frank and transparent disclosure of his or her financial position, the court must seek to ensure that that party does not benefit from his or her failure to discharge his or her duty of disclosure, by not being “unduly cautious about making findings in favour of the innocent party” (Weir & Weir, (1992) 16 Fam LR 154 at 158, (1993) FLC ¶92-338 at 79,593).

4. In any event, I am not satisfied that the wife's current income is a true reflection of her earning capacity.  It is reduced because of the loss of a major client recently.  The wife could reasonably be expected to seek additional clients to replace the work she has lost, and I see no reason on the evidence before me to doubt that she will succeed in doing so.  But even if her earning capacity is taken to be what it was before she lost the major client, it still cannot explain how the wife accumulated $11,122 over nine weeks from the end of April to the beginning of July.

5. I am satisfied the husband's income and financial resources are as disclosed in his financial statement.  I accept that the husband has assets and liabilities as listed in Parts I and K of his financial statement, subject to my finding that his interest in his company is worth nil, not ($10,290).  However, I am concerned that the husband appears not to have made a complete disclosure of his property in his financial statement.  I am concerned about the adequacy of his explanation of what he did with the proceeds of sale of his motor vehicle, a sum of $17,750, which he received only two months ago.  What happened to the proceeds after the husband loaned the money to his company is unexplained, where the husband does not disclose the loan as an asset of his and he suggests the current bank balance of the company is only $5,010.

6. As this is an interim hearing and there has been no cross-examination of the husband, the court must be circumspect in its findings.  It is of course possible that if the husband were cross-examined about the proceeds of sale, he could provide a full explanation of his dealings with the proceeds, and satisfy the court that his financial position is as reflected in his financial statement.  But the duty of disclosure is a proactive one.  It is not the case that a party and the court are to be informed of the other party’s financial position by cross-examination.  And as already mentioned, if a party does not make a full, frank and transparent disclosure of his or her financial position, the court must seek to ensure that that party does not benefit from his or her failure to discharge his or her duty of disclosure, by not being “unduly cautious about making findings in favour of the innocent party” (Weir & Weir, above).

7. Therefore, in the absence of an explanation by the husband of what happened to the proceeds of sale after he loaned them to his company as a director’s loan, and in the absence of the husband disclosing such a director’s loan as an asset, I am of the view that I should proceed on the basis that he retains control of the sum of $17,750 at this time.

8. I am satisfied the husband's income is an appropriate reflection of his present ability to work and earning capacity.

Care of a child of the marriage under 18

1. Both parties provide care for X, albeit the wife provides the majority of that care.  The evidence does not suggest that the wife's caring responsibilities for X have affected her ability to work.

The parties’ respective necessary commitments to support themselves and any other person they have a duty to maintain

1. The only person either party has a duty to maintain is X.

1. The wife stated the commitments for the support of herself and X totalled $1,583 per week.  It was not suggested on behalf of the husband that any of the expenses the wife claimed were excessive or unreasonable, other than the mortgage repayments, which the husband contended were only necessary because of the wife's failure to join with him in applying to the mortgagee to suspend repayments.  The fallacy of the husband's contention is that it assumes the mortgagee would have granted the application to suspend repayments from, at the latest, late 2012 on a continuing basis until these proceedings are finalised and the property is sold.  There is no evidence the mortgagee would have agreed to such a request.  The evidence now is that the mortgagee will exercise its powers consequent on the default by the parties under the mortgage unless it receives payments of $3,500 per month.

2. I find the wife's commitments to support herself and X when he is with her are $1,583 per week, whether the wife remains in the former matrimonial home until the final determination of these proceedings, or must vacate the home and rent accommodation elsewhere.

3. The husband stated his commitments for the support of himself and X, including his child support payments and the cost of maintaining X when X is with him, totalled $5,634.  I am not satisfied this is a proper measure of the husband's commitments necessary to support himself and X, because the husband has brought to account his anticipated legal costs to the completion of the final hearing averaged over a period that I am not satisfied is the period over which he will have to pay those costs, and because some of his day to day expenses in my view are excessive when compared with those for the wife.

4. Because of the lack of evidence in the husband's case that would enable me to determine the period the husband would have to pay his legal costs, I am unable to determine an appropriate figure for his legal costs as part of his necessary self-support commitments.  I am satisfied the husband’s overall day to day living expenses should be reduced by at least $400 per week to reflect his necessary self support commitments, as I am satisfied his claimed expenditure for items such as food, clothing and shoes, and holidays are unreasonably high having regard to the wife's necessary commitments for like expenses, and he no longer has his bicycles to maintain.

5. Doing the best I can on the evidence before me, I determine the husband's necessary commitments to support himself and X are in the order of $2,500 per week.

A reasonable standard of living

1. I have made allowances for a reasonable standard of living for the parties in my findings as to their necessary commitments to support themselves and X.

The extent to which the payment of maintenance would increase the wife's ability to better obtain income

1. The payment of maintenance sought by the wife will not on the evidence affect the wife's earning capacity.

The extent to which the wife has contributed to the husband's income, earning capacity, property and financial resources

1. The evidence does not suggest that the wife has contributed to the husband's income, earning capacity, property or financial resources, other than to the extent to which the wife assuming the majority of X’s care has freed the husband to devote more of his undivided attention to his employment.

The duration of the marriage and the extent to which it has affected the wife's earning capacity

1. The parties cohabited for about 7 years.  The evidence does not indicate whether the marriage has affected the wife's earning capacity.

Any child support under the Child Support (Assessment) Act 1989 that a party has provided, is to provide or might be liable to provide in the future, for a child of the marriage

1. The husband presently pays child support of $264.48 per week.  While there have been periods when the husband has not paid child support as assessed, during those periods he has met the mortgage payments on the former matrimonial home, except for one month.  I am satisfied on the evidence currently before me that the husband will continue to meet his child support obligations as assessed by the CSA from time to time.

Any other relevant matter

1. I am not satisfied that the wife's failure to comply with the orders for the sale of the former matrimonial home is a relevant consideration in the context of the wife's spouse maintenance application, because her expenses and need for support exists whether she lives in the former matrimonial home or moves to rented premises.

2. The level of payments made since separation by the husband to the mortgage on the home and to child support payments are a relevant consideration, but not in the way it seemed the husband sought to suggest. If the wife can demonstrate a present need in accordance with s.72 that the husband has the financial capacity to meet, she is entitled to spouse maintenance regardless of the financial support the husband has provided in the past.

3. What the husband's past financial contributions to the mortgage suggest is that when he was making the mortgage repayments he had the capacity to pay a sum well in excess of his child support assessment.  But the evidence before me does not address the husband's past financial position.  It simply addresses his present financial position, and it is on the basis of that evidence that I will decide the present application.

Decision

1. Given the wife's unexplained accumulation of savings at the rate of $1,236 per week in the nine weeks from the end of April to early

   
   

   July 2013, I cannot be satisfied the wife cannot meet her necessary commitments from her own resources.  The deficit of income (disregarding her income tested pension, allowance or benefit) to expenditure on the figures in her most recent financial statement is $841.  So even if the wife's reduced income figure is a correct measure of her present earning capacity (and I am not satisfied it is), the unexplained accumulation of savings is more than sufficient to meet that deficit.

2. The wife bears the onus of proving her case.  I am not satisfied that on the evidence presented in this hearing the wife has proven that she is unable to adequately support herself and X, and her spouse maintenance application must fail.

The wife's stay application

1. In relation to the wife's stay application, I note the following-

   a)Counsel for the wife characterised the stay application as a stay of execution of the orders for the sale of the former matrimonial home.

   b)In his response to the wife's stay application, the husband did not seek any orders by way of enforcement of the order for the sale of the home.

   c)The orders for the sale of the home do not include any machinery provisions that might enable the sale to be effected without both parties’ cooperation.

   d)Within a month after representing to the Full Court that the former matrimonial home must be sold, the wife indicated to the husband that she no longer agreed to the sale proceeding, and has provided no explanation for her change of attitude.

   e)

   The letter from the husband's solicitor to the wife's solicitor dated 9 October 2012 (Annexure IIH4 to wife's affidavit sworn on

   
   

   6 May 2013), requesting agreement to re-engage the selling agent, infers that at some point between the making of the orders in April 2012 and October 2012, the husband either agreed to or acquiesced in the property being withdrawn from the selling agent.

   f)If the wife's stay application is not granted, the sale cannot be effected without the wife's cooperation unless the husband brings an enforcement application, which would be unlikely to be determined before the final hearing scheduled in under three months’ time.

   g)If neither of the parties pays $3,500 per month to the consumer loan facility account, and both parties insist they are unable to do so, then the issue of whether the order for sale of the home should be stayed or enforced will at some point become academic.

2. In the circumstances, I am not satisfied I should grant the wife's stay application, but I am not satisfied I should dismiss it either.  In my view, the preferable course is to adjourn that application to the final hearing.  If the husband brings an enforcement application before the final hearing, the wife may then again press her stay application.

I certify that the preceding one hundred and seven (107) paragraphs are a true copy of the reasons for judgment of Judge Halligan

Date:  12 July 2013