Harper and Harper
[2013] FamCA 202
•4 April 2013
FAMILY COURT OF AUSTRALIA
| HARPER & HARPER | [2013] FamCA 202 |
| FAMILY LAW – SPOUSAL MAINTENANCE – interim orders – whether the wife is unable to support herself adequately – whether the husband is reasonably able to maintain the wife – held that the husband is unable to reasonably maintain the wife – wife’s application for interim spousal maintenance dismissed. |
| Family Law Act 1975 (Cth) s 72, 74, 75, 80 |
| JEL & DDF (2001) 28 FamLR 1 Nutting [1978] FLC 90-410 Williamson and Williamson (1978) FLC 90-505 |
| APPLICANT: | Mr Harper |
| RESPONDENT: | Ms Harper |
| FILE NUMBER: | ADC | 2118 | of | 2012 |
| DATE DELIVERED: | 4 April 2013 |
| PLACE DELIVERED: | Adelaide |
| PLACE HEARD: | Adelaide |
| JUDGMENT OF: | Dawe J |
| HEARING DATE: | 22 February 2013 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Berman, SC |
| SOLICITOR FOR THE APPLICANT: | Barnes, Brinsley & Shaw |
| COUNSEL FOR THE RESPONDENT: | Mrs West |
| SOLICITOR FOR THE RESPONDENT: | Angela Ferdinandy |
Orders
That the application of the wife for interim spousal maintenance is dismissed.
That the question of costs of the application is reserved to a date to be fixed if not agreed by the parties.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Harper & Harper 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 2118 of 2012
| Mr Harper |
Applicant
And
| Ms Harper |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application by the wife for interim spousal maintenance.
Background
The husband Mr Harper (“the husband”) was born in 1976 and is accordingly 36 years of age. He is a company director.
The wife, the applicant for the purposes of this application for interim spousal maintenance, is Ms Harper (“the wife”). She was born in 1975 and is accordingly 37 years of age. She works in the retail industry.
The parties were married in 2003.
There are four children of the marriage:
a) B (born in March 2003, now 10 years of age);
b) C (born in June 2004, now 8 years of age);
c) D (born in October 2006, now 7 years of age); and
d) E (born in November 2008, now 4 years of age).The wife has one child of a previous marriage, F. F was born in December 1995 and is accordingly 17 years of age.
On 17 May 2011, the parties separated after a cohabitation period of approximately 7.5 years. The husband filed for divorce on 5 June 2012. This was granted in August 2012.
Following separation, the four children of the marriage have lived with the father.
The wife’s application for spousal maintenance
The husband filed an initiating application on 2 October 2012 (supported by an affidavit) seeking orders in relation to the matrimonial property and the children of the marriage. The husband filed a financial statement on 22 October 2012.
Paragraphs 26 - 28 of interim orders sought in the wife’s response to the husband’s initiating application filed on 22 October 2012 form the substance of the wife’s application for interim spousal maintenance. They provide:
26. That the husband do all such acts and things and sign such documents as shall be necessary to cause to be distributed to the wife from the [G Trust], the [H Trust], [G Pty Ltd], [I Pty Ltd], [J Pty Ltd], [K Pty Ltd], [K Trust], [L Pty Ltd] (“the entities”) the sum of ONE HUNDRED & NINETY THOUSAND DOLLARS ($190,000) annually, payable on the first day of each month.
27. In the alternative to the last preceding paragraph that the husband pay to the wife by way of urgent spousal maintenance the sum of ONE THOUSAND DOLLARS ($1,000) per week commencing on 1 September 2012 together with all mortgage repayments over the former matrimonial home, rates, taxes and health insurance premiums for the wife.
28. Upon cessation of the order for urgent spousal maintenance the husband do pay to the wife periodic spousal maintenance in such sums as this Honourable Court deems fit.
The wife’s response to the husband’s initiating application was supported by an affidavit and a financial statement also filed on 22 October 2012.
On 28 November 2012, I ordered the parties to file any affidavit material upon which they sought to rely in regards to the wife’s application for spousal maintenance by 16 January 2013 in preparation for hearing on 29 January 2013. On 29 January 2013, the hearing of the wife’s application for spousal maintenance was further adjourned to 22 February 2013.
The following affidavit material has been filed since the order of 28 November 2012:
a) Affidavit filed by the mother on 7 December 2012;
b) Affidavit filed by the father on 14 December 2012;
c) Affidavit filed by the father on 20 December 2012;
d) Affidavit filed by the father on 16 January 2013;
e) Affidavit filed by the mother on 22 January 2013;f) Affidavit filed by the father on 14 February 2013;
g) Affidavit filed by the mother on 18 February 2013; and
h) Affidavit filed by the father on 20 February 2013.At the hearing, counsel for the wife advised the Court that she also intended to rely upon paragraphs 141 to 159 and paragraphs 187 and 249 of her affidavit filed in support of her response to the husband’s application in a case filed on 22 October 2012.
The most recent financial statements filed by the parties are:
a)Financial statement filed by the mother on 22 October 2012. (Counsel for the mother at the hearing asserted that the material in this financial statement was outdated and that the mother’s current financial situation was outlined in her affidavit filed 22 January 2013).
b)Financial statement filed by the father on 27 October 2012.
The Law
Part VIII of the Family Law Act 1975 (Cth) (“the Act”) contains numerous sections relating to the provision of spousal maintenance. The applicable test is set out in section 72 of the Act. Section 72 states:
(1) A party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:
(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or
(c) for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2).
(2) The liability under subsection (1) of a bankrupt party to a marriage to maintain the other party may be satisfied, in whole or in part, by way of the transfer of vested bankruptcy property in relation to the bankrupt party if the court makes an order under this Part for the transfer.
Section 72 contemplates the consideration of two factors prior to the granting of an order for spousal maintenance:
(a)Firstly, consideration of “the extent [if any] that the [respondent to the application] is reasonably able” to maintain the applicant for spousal maintenance; and
(b)Secondly, consideration of whether the applicant “is unable to support herself or himself adequately” with reference to the factors set out in 72(1) (a)-(c) as informed by any relevant matters in s 75(2).
Section 75 provides:
(1) In exercising jurisdiction under section 74, the court shall take into account only the matters referred to in subsection (2).
(2) The matters to be so taken into account are:
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party's role as a parent; and
(m) if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 79 in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
(q) the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.
(3) In exercising its jurisdiction under section 74, a court shall disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.
(4) In this section:
“party” means a party to the marriage concerned.
Paragraphs 27 and 28 of the interim orders sought by the wife in her response to the husband’s initiating application suggest that her application is to be conceived of both as an application for urgent spousal maintenance and as an application for interim spousal maintenance. At the hearing, counsel for the wife clarified that the wife was now seeking orders for interim spousal maintenance as opposed to urgent spousal maintenance. As such, section 77, which provides the Court with power to make orders for urgent spousal maintenance, is inapplicable to this application.
Section 74(1) provides a broad discretion for the judicial officer in configuring an order for spousal maintenance. The section states:
(1) In proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part.
Section 80 enumerates various orders that can be made under Part VIII of the Act. It does not abrogate the broad discretion conferred in section 74(1). Section 80 states:
(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 specific 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 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;
i) make an order by consent;
j) 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
k) 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.
i) 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.
ii) 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.
iii) 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.
iv) If the trustee of a personal insolvency agreement is a party to a proceedings before the court, the court may make an order under paragraph (1)(d) directed to the debtor subject to the agreement.
v) Subsections (4) and (5) do not limit paragraph (1)(d).
Interim spousal maintenance applications do not call for, nor do they require, a hearing that is “as final or exhaustive” as a final application for spousal maintenance would be (Williamson and Williamson (1978) FLC 90-505).
As the applicant in the proceedings for spousal maintenance, the wife bears the burden of proof (Marklew and Marklew [2009] FamCA 753 at [32]).
Consideration of the submissions of the parties
The Threshold Test for Interim Spousal Maintenance
Is the applicant unable to support herself with reference to the factors in s 72(1)(a)-(c) having regard to any relevant matters referred to in s 75(2)?
Counsel for the respective parties devoted much of their submissions on this question to two specific issues. I will address these issues in turn with reference to the applicable provisions of ss 72 and 75. They are:
(a) How should the $200,000.00 the wife received as a result of orders made by myself on 22 October 2012 be treated when considering whether the applicant is able to support herself?
(b) With reference to the training she has received and the health issues for which she is being treated, what is the current earning capacity of the wife?
I turn first to the issue of the $200,000.00 received by the wife. The financial resources of a party are a relevant consideration under s 75(2)(a). Counsel for the wife asserted that these funds had been deposited directly into the trust account of the wife’s solicitor. Since that time, approximately $50,000.00 had been expended on legal fees.
Counsel for the wife asserts that the wife does not want to expend the remaining $150,000.00 as she was concerned that it would be added back to the matrimonial property pool upon final distribution. Furthermore, the wife does not want to justify her expenditure of this sum to the husband.
By contrast, counsel for the husband referred to numerous authorities on the treatment of partial property settlements (NHC & RCH (2004) 32 FamLR 518; JEL & DDF (2001) 28 FamLR 1; LaCosta & LaCosta (2008) 38 FamLR 412; Kowaliw [1981] FLC 91-092; Mitchell [1995] FLC 92-601).
The judgment of Finn, Kay and May JJ in NHC & RCH (2004) 32 FamLR 518 at 528 (quoting the decision of Baker, Kay and Chisholm JJ in Marker [1998] FamCA 42, [2.11]) states that:
There seems to be no appropriate basis for notionally adding back moneys that existed at separation but which have been subsequently spent on meeting reasonably incurred necessary living expenses.
This contrasts with the principles discussed in Kowaliw [1987] FLC 91-092.
It is inappropriate to express a view with any finality as to whether the expenditure of this sum by the wife would be added back to the matrimonial property pool during the final property distribution process.
I note that the mere fact that the wife has received this $200,000 by way of partial property distribution does not of itself disqualify her from claiming spousal maintenance (Mitchell (1995) 19 FamLR 44, 60 per Nicholson CJ, Fogarty and Jordan JJ). Such cases are to be resolved on a case by case basis with reference to the relevant considerations provided for in s 72(1) and 75(2) (Mitchell (supra)).
In some cases, it may be that “the possession of such a capital sum and the investment opportunities which it gives rise to” prevent the applicant for interim spousal maintenance from demonstrating that they are “unable to support [themselves] … adequately” as the Full Court found in Clauson (1995) 18 FamLR 613, 711-712 per Bartlett DCJ, Fogarty and Mushin JJ).
However, in the case at hand, the $150,000 is by far the largest asset the applicant wife possesses. The investment of this sum would not generate an amount of interest such that the wife could no longer claim that she was “unable to support herself … adequately.”
Accordingly, I do not find that the partial property settlement paid to the wife, in and of itself, acts to disable the wife’s claim for spousal maintenance in this instance.
I turn to the second issue for consideration. Namely, an assessment of what the earning capacity of the wife currently is with reference to her experience and her health issues. (Sections 75(2)(a) and (b)).
The wife currently earns approximately $538 per week working full-time hours at a retail store. She is employed on a casual basis and as such has no recourse to sick leave or similar entitlements.
The wife annexes to her affidavit dated 22 January 2013 (Document 39) two reports from health practitioners attesting to the current state of her health and the her ability to work:
(a)General practitioner [Dr M] suggests in a letter dated 11 January 2013: “at best part time work should be encouraged to deal with her children and I am sure this would improve her overall health and in particular her emotional stability.”
(b)Consultant psychiatrist [Dr N] suggests in a letter dated 09 January 2013: “If her hours of work were substantially reduced she would have increased emotional capacity to deal with her children for extended times.”
Counsel for the husband submitted that, as this matter was to be heard on the papers and without recourse to oral evidence, the husband was largely incapable of testing the validity of these reports.
However, as I have already stated, interim spousal maintenance applications do not call for, nor do they require, a hearing that is “as final or exhaustive” as a final application for spousal maintenance would be (Williamson and Williamson (1978) FLC 90-505). In taking a robust view of the evidence, I find that the health reports filed by the wife substantiate her submission that she is unable to work full-time.
As such, I find that the applicant is unable to support herself adequately with reference to the relevant factors in s 72(1) and s 75(2).
To what extent is the respondent reasonably able to maintain the applicant?
Counsel for the wife made brief submissions concerning this aspect of the threshold test at the hearing. She referred to paragraph 94 of the affidavit filed by the husband on 2 October 2012 in support of his initiating application. Therein, the husband deposes that he was “able to financially support the children” and that his taxable income for the year ended 30 June 2012 was “approximately $442,980.00 gross”. Counsel for the wife relied upon this as evidence that the husband was reasonably able to maintain the applicant to the degree that she seeks in this application.
In her initial submissions, counsel for the wife referred to the financial statement filed by the husband on 29 October 2012 asserting that the figures contained therein were “nonsense.” In this financial statement, the husband refers to:
a) A total average weekly income of $8,519.00 composed of $2,308.00 of total salary or wages before tax and $6,211.00 income from the [H Trust].
b) A total personal expenditure on himself per week of $7402.00. This figure was revised down by his counsel to $5450 at the hearing as a result of the former matrimonial home being sold and the associated costs with this dissipating.
c) An expenditure of $1,823.00 per week relating to the education of the four children of the marriage.
Counsel for the husband then submitted the surplus income of the husband after this personal expenditure and educational expense, approximately $1,246.00, was not an excessive amount to spend per week given that he bears the total financial responsibility for the four children of the marriage. As such, counsel for the husband argued that the husband was not reasonably able to support the wife to any extent.
Counsel for the wife sought to raise objections to this financial statement of the husband in her response to the submissions of the husband’s counsel. Counsel for the wife stated that the wife does “not accept [the husband’s] commitments are as they are ….” The claimed expenses were otherwise not challenged or proven to be unreasonable in this family’s circumstances.
Accordingly, the wife has not shown that the husband is capable of supporting the wife to any extent. As the threshold test for spousal maintenance has not been met, the wife’s application for interim spousal maintenance must fail.
Conclusion
The wife’s application for interim spousal maintenance is dismissed. I reserve the question of costs of the application to a date to be fixed if the parties are unable to reach agreement on such an order.
I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dawe delivered on 4 April 2013.
Associate:
Date: 4 April 2013
Key Legal Topics
Areas of Law
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Family Law
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Civil Procedure
Legal Concepts
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Costs
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