JANTZEN & LESTER

[2019] FCCA 3117

FEDERAL CIRCUIT COURT OF AUSTRALIA

JANTZEN & LESTER [2019] FCCA 3117

Catchwords:
FAMILY LAW – Lump sum spousal maintenance – respondent incarcerated for serious drug offences – property of the respondent subject to automatic forfeiture.  

Legislation:

Confiscation Act1997 (Vic) ss.14, 16(2A), 20(1B), 36GA
Family Law Act 1975 (Cth) ss.72, 72(1)(a), 72(1)(b), 74, 75(2), 75(2)(l)
75(2)(na), 75(2)(o), 77, 77A, 79C(1), 79C(1A), 80(1)(ba)
Federal Circuit Court Rules 2001 (Cth) r.16.05

Cases cited:

Bevan & Bevan (1995) FLC 92-600

Garston & Yeo (No.2) [2019] FamCAFC 139
Milankov & Milankov (2002) FLC 93-095
Vautin & Vautin (1998) 23 Fam LR 627

Applicant: MS JANTZEN

Respondent: MR LESTER

File Number: MLC 6785 of 2017

Judgment of: Judge Harland

Hearing date: 8 October 2019

Date of Last Submission: 11 October 2019

Delivered at: Melbourne

Delivered on: 31 October 2019

REPRESENTATION

Counsel for the Applicant: Mr Hall

Solicitors for the Applicant: Tribeca Legal

No appearance by the Respondent

Solicitors acting as amicus: Ms Tenni of the Office of Public Prosecutions Victoria

ORDERS

1. The Respondent pay or cause to be paid to the Applicant the sum of $200,000 by way of lump sum spousal maintenance ("the payment").

2. To the extent necessary in order to secure the payment, IT IS DECLARED pursuant to section 80(1)(ba) of the Family Law Act1975 (Cth) ("the Family Law Act") that the payment be made by way of transfer to the Applicant a sum equivalent to the payment from the balance of proceeds of sale of the real property situated at A Street, Suburb B, (“the A Street, Suburb B property”) in the State of Victoria more particularly described in Certificate of Title Volume … Folio ….

3. The payment be made from the balance of proceeds of sale of the real property situated at A Street, Suburb B, in the State of Victoria more particularly described in Certificate of Title Volume … Folio …, such proceeds being held by the Asset Confiscation Operations department ("ACO") in the Department of Justice for the State of Victoria on trust and restrained pursuant to a Serious Drug Offence Restraining Order made by His Honour Judge Dyer made on 13 November 2018 pursuant to the Confiscation Act 1997 (Vic) in proceeding number … in the County Court of Victoria at Melbourne.

4. The payment be made to the Applicant's solicitor Mr Philip Tribe, of Tribeca Legal, 166 Victoria Parade, East Melbourne Vic 3002.

5. A copy of this Order be served forthwith on the Director of Public Prosecutions for Victoria ("the DPP") such service to be made by service upon Ms. Tegan Tenni, Senior Solicitor, Proceeds of Crime, Office of Public Prosecutions Victoria, PO Box 13085 Melbourne, Victoria, 8010 and by email to [email protected].

6. Liberty to apply on short notice to the DPP be reserved to the Applicant in respect of compliance with this order.

7. That Chambers cause a copy of these reasons to be provided to the DPP.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 6785 of 2017

MS JANTZEN

Applicant

And

MR LESTER

Respondent

REASONS FOR JUDGMENT

1. On 8 August 2019 the applicant filed an application seeking an unparticularised amount of lump sum spousal maintenance. The applicant sought interim orders seeking leave to rely on an affidavit containing more than 10 pages and 5 annexures under direction that a registrar issue an “invitation or requirement” to the Office of Public Prosecutions (“OPP”) under s.79C(1A) of the Family Law Act to make submissions with respect to staying these proceedings under s.79C(1) as there is property in the respondent’s name which is subject to a County Court restraining order.

2. On the first return date of her application on 8 October 2019, the applicant’s Counsel sought that the Court determine and finalise the matter that day. That was simply impossible in a busy duty list. One of the difficulties was the lack of particularisation of the amount for lump sum maintenance. Unfortunately, it is a very common occurrence in this Court to see lawyers file applications both with respect to property matters, maintenance matters and children’s matters seeking unparticularised orders. Often the orders erroneously seek leave as a final order to particularise orders after disclosure or the release of a family report.

   Often maintenance orders simply seek orders “as deemed appropriate by the Court”. It should be a rare instance where a party genuinely cannot particularise their claim when filing their application. In circumstances where applications are brought in extreme urgency because of risk the Court is generally not critical of final orders not being particularised. However, in most cases there is no good reason why they cannot particularise the orders. Indeed, if it is the case that disclosure has not occurred then one clear question is whether they have filed the proceedings too early. With respect to parenting matters the purpose of the family report is not for the family report writer to tell the parties what orders they should seek. In fact, it makes the job of the family report writer more difficult when the parties do not articulate their cases. The same can be said for registrars and mediators when parties do not articulate and particularise their claims. This also leads to a failure to focus on issues in dispute or even properly identify them and address them in evidence.

3. This persistent failure to properly articulate claims and identify issues in dispute adds to increased time in Court, further court events and delays and does not assist in the administration of justice.

4. The respondent has recently been sentenced to a period of incarceration for 15 years with a minimum of 8 years for serious drug trafficking offences. Property in the respondent’s name including proceeds of sale are the subject of restraining orders in the County Court of Victoria. That property will be the subject of an automatic forfeiture on 10 November 2019 unless the OPP brings an application to the County Court to vary the restraining order that is to be heard and determined prior to 8 November 2019. This results in this Court having to determine this matter prior to 10 November 2019. It is unfortunate that the applicant did not bring this application earlier. She gives no explanation for this.

5. The applicant’s solicitor filed an affidavit sworn on 3 October 2019 with respect to the County Court proceedings. He also represents the applicant in those proceedings with respect to the restraining order made pursuant to s.14 of the Confiscation Act1997 (Vic). The OPP is able to apply for such an order if a person has been or within 48 hours will be charged with or has been convicted of a schedule 1 offence: s.16(2A).

6. In correspondence between the applicant’s solicitor and the OPP the issue of delay in bringing the application with respect to the Confiscation Act was raised and the OPP indicated that they would decline to make an application to this court seeking a stay of the maintenance proceedings but would consent to the applicant being given an extension of time until Friday, 8 November 2019 to file an exclusion application with the County Court in order to allow the maintenance application to proceed. 

7. The OPP outlines a chronology in an email dated 16 September 2019 provided to County Court. 

8. The case was mentioned in the County Court on 17 September 2019. The serious drug offence restraining order was made by His Honour Judge Nye in the County Court on 13 November 2018. It is annexed to the applicant’s affidavit filed on 8 August 2019. The purpose of the restraining order is to preserve assets which may become subject to a forfeiture order. If a restraining order has been made, a person claiming an interest in the property, subject to the restraining order may apply to the court for an exclusion order. The application must be made within 30 days. The court may extend the time to make that application if it is in the interests of justice to do so.

9. There was a further appearance in the County Court on 24 October 2019 which has been adjourned to 31 October 2019.

10. The restraining order arises under a serious drug offence restraining order. Consequently pursuant to s.36GA of the Confiscation Act 1997 (Vic) it occurs automatically on 10 November 2019.

11. The application to extend time is made pursuant to s.20(1B) with respect to an application for an exclusion order under the Confiscation Act 1997(Vic). In that email the OPP raises the issue of delay by the applicant and refers to the applicant’s affidavit sworn on 20 August 2019 in this court in support of her application of lump sum spousal maintenance. Her affidavit is silent as to the reasons for the delay in bringing the application in the County Court between December 2018 and January 2019 when the applicant instructed solicitors to act on her behalf with respect to the restraining order in the County Court and also to make an application by lump sum maintenance in this Court which was not brought until August 2019 when both those applications were filed. It is most unfortunate that the applicant did not act much earlier. The consequence of the delay is that this Court, which already has a crushing workload, must determine this matter before the automatic forfeiture takes place on 10 November 2019 as this will defeat the applicant’s claim.

12. The sum of $214,668.83 is held on trust being the balance of the proceeds of sale of property at A Street, Suburb B.

The position of the respondent

1. I am satisfied that the respondent is on notice of these proceedings. He is currently incarcerated and has signed acknowledgements of service with respect to various court documents served on him. I was also assisted by the appearance in court of Ms Tenni a senior solicitor with the proceeds of crime section of the Office of the Public Prosecutions of Victoria. I am satisfied that the respondent does not have an interest in these proceedings because of the forfeiture order and therefore there is no prejudice to determining the matter in his absence. I also accept the applicant’s Counsel’s submission that is not necessary to make the order which is often made when the matter is determined in the absence of the party being that they be at liberty to apply to have the orders set aside due to their absence pursuant to rule 16.05 of the Federal Circuit Court Rules 2001 (Cth).

Previous proceedings and the applicant’s circumstances

1. The applicant is 28 years old. She commenced a relationship with the respondent in 2012, they married on … 2014 and separated in September 2015. They are now divorced. There are three children of their relationship; X born … 2014, aged 5, Y born … 2015, aged 4, and Z born … 2016, aged 3.

2. The respondent commenced proceedings in the Federal Circuit Court on 7 July 2017 seeking parentage testing orders and parenting orders. The applicant filed a response seeking sole parental responsibility, that the children live with her and spend no time with the father. On 8 September 2017 Her Honour Judge Small made final parenting orders by consent. The orders provide for the applicant to have sole parental responsibility for the children, for the children to live with her and for the children to spend time with the respondent from time to time as agreed.

3. The applicant filed an initiating application seeking unparticularised property orders on 11 October 2017. Final property orders were made by consent on 13 March 2018. Those orders provided for the respondent to pay the applicant $120,000. The applicant retained two properties, being C Street, Suburb D, subject to the mortgage with the National Australia Bank and E Street, Suburb F, her car and her superannuation.

4. The respondent retained his property at A Street, Suburb B subject to the mortgage to Australia and New Zealand Banking Group Limited, his car and his superannuation.

5. The applicant describes her relationship with the respondent as being characterised with severe and frequent family violence involving physical assaults, threats to kill and harm and coercive and controlling conduct including isolating her from her family and friends and controlling the family’s finances. It is not necessary to set out the details of the violence which she describes in her material.

6. She annexes transcripts of recordings of interactions between her and the respondent in front of the children which are troubling as they indicate the respondent engaging in severe family violence, both in the form of threats and psychological abuse, but also physical abuse of the applicant in front of the children.

7. The applicant is engaged full-time as a parent to her children who are all under the age of six. She also cares for her father and receives a carer’s pension and carer’s allowance from Centrelink in addition to her parenting payments. Those benefits are means tested. She does not have any other source of income.

8. The applicant says that she and the children have suffered significant trauma and fear because of their exposure to family violence. She sees a psychologist to assist her and is seeking psychological assistance for the children. She says that X has started showing behavioural difficulties including aggressive behaviours.

9. Since the parties separated some four years ago the applicant has not received any financial support from the respondent for the children. She deposes that the Department of Human Services – Child Support determined that seeking child support payments from the respondent would place her at too high of a risk given the significant history of family violence and so she has not been required to seek child support from the respondent. 

10. The serious drug offence restraining order made in relation to the respondent’s property was made in the County Court on 13 November 2018. That order lists several properties. The applicant says that the A Street, Suburb B property is a property that the parties purchased as an investment during their relationship. It was purchased in the respondent’s sole name. The applicant says she contributed $15,000 towards the purchase from her savings. During their relationship they also purchased a business also in the sole name of the respondent and that business was sold for $65,000 in 2013. The applicant says that she did not receive any of the sale proceeds of the business which she had worked in with the respondent. She believes that the proceeds were put towards the purchase of the A Street, Suburb B property. 

11. The applicant filed a further affidavit on 26 September 2019. She has entered into a contract to build a home on a block of land in E Street, Suburb F. She has sold the property at C Street, Suburb D and received net proceeds of $171,186.83. She says the total costs of the building will be about $360,000. She has paid $4,000 towards this. 

Expert evidence

1. The applicant relies on the affidavit of Dr G, psychiatrist, who conducted an assessment of her for the purposes of these proceedings. He also refers to the transcripts and the police statements the applicant has made.

2. Dr G says in his report that the alleged family violence has caused chronic post-traumatic stress disorder (“PTSD”). It is likely that the oldest child X is also traumatised but as he has not seen the children he cannot confirm that. The applicant told him that the children were no longer displaying emotional problems. The applicant still has nightmares about the abuse but has stopped having flashbacks. The applicant told Dr G that her severe anxiety eased when the respondent was remanded in … 2018. Dr G found that the PTSD is in substantial remission but the applicant still has:

   vestigial symptoms: include hypervigilance, avoidance behaviours and memory deficits as a result of suppressing the emotional trauma. She could have further episodes if she is exposed to further trauma. She does not trust others and this is affecting her social engagement.

3. With respect to recommendations for treatment Dr G refers to the fact that PTSD is a very difficult condition to treat and it would be necessary to re-expose the applicant to trauma as part of any talking therapy component of treatment which could cause real deterioration in her mental state which he states he would be reluctant to recommend. He goes on to say that if there is a relapse then there is only treatment available through the private health system for these types of PTSD cases.

4. With respect to the applicant’s earning capacity he points out that he is not a rehabilitation consultant but refers to her significant loss of trust in others which is something that is required in employer and employee relationships. He refers to potential damage to the applicant in her having to stop working as a customer service officer which the applicant referred to as having been her dream because of the respondent’s controlling behaviour. She may be able to re-engage in work as health care worker as she had in the past but working with potentially aggressive and violent dementia patients for example could be distressing to her.

5. Dr G’s evidence supports the applicant’s contentions about her restricted earning capacity.

6. This is a case where the applicant’s evidence is not contradicted and has not been tested. The respondent does not have standing to make any application with respect to the disposition of the property that is the subject of the Confiscation Act 1997 (Vic) and forfeiture. The DPP does not have an interest in whether or not the applicant succeeds in her application but rather has appeared as amicus to provide assistance to the Court, which the court is appreciative of given the tight timeframes in this matter and the concurrent County Court proceeding.

7. The applicant has filed two financial statements. Her financial circumstances are modest. She has $12,000 superannuation. Both financial statements are filled out incorrectly at Part N. When seeking maintenance Part N must be completed. This has only partially been done as she has only given totals and has not provided the breakdown of the costs for herself and the costs for the children.

8. In her second financial statement filed on 26 September 2019 she discloses a $70,000 interest free loan from her parents. She does not have a credit card. She has minimal superannuation of approximately $1,000. She currently pays rent of $360 a week. She will continue to have this expense whilst her house is being built. When she moves into her house she will have mortgage repayments.

9. The applicant says that she estimates the weekly expenses for the children to be $160 per child. She wants to send the children to the local Christian primary and secondary schools and estimates the education costs of approximately $65,000 per child.  She does not say how she has calculated these costs.

10. The expenses she claims in Part N are modest. She claims $150 a week for food. That is typically an amount claimed for an adult, not two adults and 3 children. She claims $25 a week for clothing and shoes. That equates to $1300 a year. Examining the expenses I infer that many of these amounts she lists are for herself only and not totals for the household.

11. She claims expenses of $52 a week for children’s activities and $104 a week for education expenses.

12. She also does not make any claim for household repairs and repairs to furnishings and appliances. She may not have these expenses currently but will have these expenses when she moves into her house.

13. She also has expenses for her father, for whom she receives the carer’s allowance but she does not disclose what those expenses are.

14. She does not make any claims for medical, dental and optical, pharmaceutical, entertainment and hobbies and gifts. An applicant for maintenance is not required to claim only current expenses as the applicant may not have current capacity to pay for all the commitments necessary for self-support.[1]

    [1] Garston & Yeo (No.2) [2019] FamCAFC 139 at [29].

Legal principles applying to maintenance claims

1. Section 72 of the Family Law Act addresses a spouse’s entitlement to maintenance. The court must consider two limbs. Firstly that the spouse seeking maintenance has established that he or she is unable to support himself or herself adequately because of having care and control of a child under 18, by reason of physical or mental incapacity for employment or for another adequate reason. Secondly, that the other spouse has the capacity to pay. The court is to have regard to the relevant factors listed in in s.75(2). Section 74 empowers the Court to make an order for maintenance that it thinks proper.

2. There is no jurisdictional impediment to the applicant’s application as she filed her application just prior to the expiry of the 12 month period after their divorce became final. The final property orders did not include lump sum maintenance as there is no reference to s.77A of the Family law Act.

3. The applicant bears the onus of establishing that she has a need for maintenance. She has easily done this as her only source of income is Centrelink benefits which are means tested. Section 75(3) requires me disregard this. She also comfortably satisfies s.72(1)(a) and (b). I accept that currently she has the sole care of three children under the age of 6. I also place considerable weight on the report of Dr G with respect to the impact of the significant family violence on the applicant and her PTSD.

4. Given the respondent’s recent sentence which could see him in prison for up to 15 years and not released from prison for 8 years (presumably subject to time served.), even if he were to be released in 7 years’ time that is a significant period of time where the applicant will not have any prospect of receiving any financial support from the respondent.

5. One of the relevant considerations under s.75(2) is the applicant’s responsibilities to care for other persons. She has the sole care of three young children and also the care of her father which has been assessed by Centrelink as enough to entitle her to carer’s payments for looking after him.

6. It is well-established that an applicant for maintenance does not need to deplete all of their capital or assets before successfully applying for maintenance.[2] The relevant considerations are the income, property and financial resources of the parties and the terms of any property settlement. The applicant has received a property settlement which has been referred to above and with that settlement subject to a mortgage the applicant is able to house herself and the children. 

   [2] Bevan & Bevan (1995) FLC 92-600

7. The applicant’s Counsel also points out in written submissions that at the time the final property orders were made it was not foreseen that the respondent would be incarcerated for a lengthy period of time and not in a position to provide any financial support for the children. The applicant’s evidence is that the Department of Human Services – Child Support has not required her to make an application for child support given the severe family violence and the risks to her in doing so. It is quite clear that for the next several years at least, the applicant will not receive any ongoing child support payments. Even if the applicant were now to make an application for an administrative assessment of child support, such application could not be determined before the automatic forfeiture takes effect. My concern is to ensure that the concepts of maintenance and child support are not conflated. Whilst I cannot make an order for lump sum child support I am entitled to take into account pursuant to s.75(2)(na) of the Family Law Act the fact that the applicant will not receive any child support for the foreseeable future.

8. I must consider the applicant’s circumstances in having the sole care and control of three young children. I must also consider her obligations to support herself, her children and her father. Another important consideration is at s.75(2)(l) being the need to protect the applicant who wishes to continue her role as parent.

9. Section 75(2)(na) requires the Court to consider any child support a party is or might be liable to pay for a child of the marriage. I am satisfied that the applicant will not receive any child support for the foreseeable future. Section 75(2)(o) refers to any other circumstances which the Court considers the justice of the case requires to be taken into account. The applicant’s evidence is that the respondent has not provided any financial support for the children since they separated.

10. A number of authorities have discussed the issue of the person not being able to support himself or herself adequately. It does not mean that a person must live on a subsistence level rather it is necessary to consider what is reasonable in circumstances of the case.

11. It is apparent from the material that the respondent does not have the capacity to make any periodic maintenance payments and that is the reason that the applicant seeks a lump sum payment. Indeed unless such an order is made prior to the automatic forfeiture coming into effect that claim would be defeated. It is also well established by the authorities that lump sum maintenance orders can be made where the respondent does not have the income to be able to make periodic payments but has assets, or in other words, is income poor but asset rich. Courts generally exercise caution with respect to lump sum maintenance because of the finality of providing a lump sum which is designed to provide for a person’s ongoing needs and the difficulties in predicting the future.[3] The circumstances of this case are different.

    [3] Vautin & Vautin (1998) 23 Fam LR 627.

12. In his further written submissions the applicant’s Counsel addressed the issue of calculation of maintenance. He sets out various calculations including child support calculations using different assumed incomes for the respondent. He submits this is to provide a guide as to the cost of caring for the children and is not seeking child support. He also refers to the Fair Work Ombudsman’s guide for wages for health care workers.

13. I am satisfied that the applicant has established a need for maintenance. I am further satisfied that it is appropriate to make an order for lump sum maintenance. I have no evidence that the respondent has the capacity to pay periodic maintenance. Given his lengthy gaol term he will not have an income earning capacity for many years.

14. The applicant’s Counsel filed supplementary submissions which include calculations based on different assumptions about the respondent with respect to what a child support assessment could look like, to provide a guide as to the financial commitment of the applicant caring for the children. He also provides a calculation based on what the applicant could expect to receive if she was working as a health care worker as she has previously. He annexes a child support estimate and the award rates for health care workers. He does not point to authorities which take that approach. The applicable legislation does not refer to taking into account lost opportunity or lost wages but rather refers to the applicant’s reasonable needs in all the circumstances. 

15. The applicant’s Counsel also seeks that maintenance be backdated for four years to the date of separation. He does not refer to any authority supporting that proposition. In appropriate cases the Court has backdated applications for maintenance to the date of the application. In Milankov & Milankov (2002) FLC 93-095, Kay J referred to the approach taken by the trial judge in that case which was to make an order for retrospective periodic maintenance which created an obligation of the husband to pay arrears. The trial judge found that at the time of the marriage breakdown the husband had the capacity to pay the wife maintenance and the wife had the need for it but that the husband had chosen not to pay the wife but to spend his money elsewhere and that in those circumstances he was not relieved of the potential liability to pay maintenance in the future. Kay J did not see an error in the trial judge’s approach. Unlike in that case I cannot make a finding that the respondent had the capacity to pay maintenance at the time of the breakdown of the parties’ marriage.

16. As I have indicated there are gaps in the applicant’s evidence in several categories of expenses which she has not made any claim for. It is unfortunate that her affidavit does not address this, as in cases such as this, a party may set out in that affidavit expenses that they expect to incur in the future and indeed would be likely to incur in the future but are not currently in a position to do so. In this regard I refer to the fact that she does not make any claim for expenses with respect to medical dental and pharmaceutical, entertainment and hobbies, holidays and gifts. The other amounts she claims for her weekly expenses are modest. The expenditure she claims is approximately $1,000 a week. As she is solely reliant on income tested benefits her income is nil. I accept that it is reasonable for the applicant to remain a full time parent until her youngest child attends school. She has recently turned three. After that she may seek part-time work. What she is able to earn is uncertain and if she returns to health care work she may be required to do further training. Two years of maintenance in the sum of $52,000 a year is $104,000. She will continue to have significant restrictions on her earning capacity given her responsibilities for caring for the children. I am satisfied it is proper to order a further amount of maintenance taking into account the fact that she will not receive any financial support from the respondent for at least the next eight years if not longer and that she will be limited in her earning capacity because of her parenting and caring commitments.

17. I am satisfied that in the justice of the case the applicant should receive lump sum maintenance in the sum of $200,000. There is also a public policy consideration which is of relevance here being that where an individual has the capacity and obligation to support a spouse that person should do so rather than it being an expense of the public purse.

18. I accept the applicant’s Counsel’s submissions that lump sum should not be discounted given the low rates of inflation.

I certify that the preceding fifty-six (56) paragraphs are a true copy of the reasons for judgment of Judge Harland

Date: 31 October 2019