Jerome & Jerome
[2023] FedCFamC2F 754
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Jerome & Jerome [2023] FedCFamC2F 754
File number: MLC 13773 of 2021 Judgment of: JUDGE YOUNG Date of judgment: 2 June 2023 Catchwords: FAMILY LAW – application for review – application for spouse maintenance by the wife – where the wife says she is unable to adequately support herself – where the husband is a medical professional – where the husband pays the mortgage on the former matrimonial home – where the court accepts the wife has an unmet financial need – where an order for spouse maintenance is appropriate. Legislation: Family Law Act1975 (Cth) s75(3) Division: Division 2 Family Law Number of paragraphs: 12 Date of hearing: 2 June 2023 Place: Darwin Counsel for the Applicant: Ms Tiernan Solicitor for the Applicant: Lander & Rogers Counsel for the Respondent: Ms Tulloch Solicitor for the Respondent: Blackwood Family Lawyers ORDERS
MLC 13773 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR JEROME
Applicant
AND: MS JEROME
Respondent
order made by:
JUDGE YOUNG
DATE OF ORDER:
2 JUNE 2023
BY CONSENT UNTIL FURTHER ORDER:
1.Within 60 days of the date of these orders, the husband and wife do all acts and things necessary and sign all documents required to place the property situated at and known as B Street, Suburb C in the State of Victoria, more particularly described in the Certificate of Title Volume … Folio … (B Street, Suburb C property) on the market for sale (sale).
2.In relation to the sale of the B Street, Suburb C property:
(a)Within 30 days of the date of these orders, the parties will appoint a real estate agent agreed in writing to sell the B Street, Suburb C property.
(b)If within 14 days of the date of these Orders the parties are unable to agree on a real estate agent to sell the B Street, Suburb C property, the parties will request the President of the Real Estate Institute of Victoria to nominate a real estate agent and the parties will appoint that nominated real estate agent to sell the B Street, Suburb C property.
(c)The parties will have the joint conduct of the sale of the B Street, Suburb C property, and to the extent that it may be necessary, the husband hereby irrevocably authorises, requests and directs the real estate agent appointed to sell the B Street, Suburb C property to:
(i)Provide to the wife all information about the sale of the B Street, Suburb C property, including any offers made to purchase the B Street, Suburb C property.
(ii)Act only in accordance with joint instructions from the parties in relation to the sale of the B Street, Suburb C property.
(d)The wife be at liberty to provide a copy of these Orders to the real estate agent appointed to sell the B Street, Suburb C property.
(e)The B Street, Suburb C property will be sold by public auction on a date to be agreed after consultation with the real estate agent.
(f)The reserve price for the B Street, Suburb C property will be as agreed between the parties upon the advice of the agent.
(g)If the B Street, Suburb C property does not sell at public auction, the B Street, Suburb C property will be offered for private sale with a reserve price of $1,950,000 or such other reserve price as agreed between the parties after consultation with the selling agent.
IT IS NOTED that it is understood that if the parties are unable to agree on a reserve price or any other aspect of the sale an application about that issue may be made to the Court.
3.Upon settlement of the sale of the B Street, Suburb C property, the proceeds of sale will be applied:
(a)First to pay the costs, commission and expenses of sale.
(b)Second, to discharge the Bank D mortgage (registration …) affecting the property.
(c)The balance be paid into the wife’s solicitor’s trust account pending further order or written agreement between the parties.
4.At or before the settlement of the sale of the B Street, Suburb C property, the wife will withdraw her registered caveat over the B Street, Suburb C property, at her own expense.
5.The parties each have liberty to apply in relation to the sale.
AND IT IS ORDERED THAT:
6.Order 8 of the orders of Senior Judicial Registrar E made on 13 December 2022 is discharged and the following orders substituted:
8AOn or before 4:00 pm each Wednesday commencing 13 December 2022 and each week thereafter the husband will pay to the wife by way of spouse maintenance the sum of $827.
8BFrom 22 February 2023 the sum in order 8A is reduced to $256.
8CFrom 30 June 2023 the amount in order 8A continues to accrue but payment is suspended on condition that:
(i)the husband pay to the wife the lump sum of $3,840 forthwith, which amount shall be deducted from any arrears owing under these orders; and
(ii)the husband resumes by 30 June 2023, and provides evidence to the wife of having done so, payment of the mortgage on the B Street, Suburb C property.
7.That the matter be adjourned to 7 July 2023 at 11.00am (AEST) for Compliance and Readiness hearing before Chief Judge Alstergren at the Federal Circuit and Family Court of Australia, Melbourne.
8.The applications for Review filed by the parties be otherwise dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym Jerome & Jerome has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
Judge Young:
This is an application for review of orders made by a Senior Judicial Registrar (“SJR”) on 13 December 2022 on an interim application for spouse maintenance made by the wife. The basis of the wife’s application is that she is unable to adequately support herself by reason of her care of the parties’ two children who are aged five and a half and two and a half. The husband is a medical professional. He has deposed in his financial statement that he earns approximately $220,000 a year, though I note that according to the child support assessment dated 19 May 2023 his assessed income was approximately $260,000.
The husband says that in view of the fact that he continues to pay, or will resume payment after a moratorium, the mortgage on the former matrimonial home and his payment of other expenses of the wife, including car insurance rates, utility charges, gas and electricity, and for the older child’s kindergarten fees, he does not have the capacity to pay any spouse maintenance.
I accept that the wife is presently unable to adequately support herself. Some suggestion was made that she could find employment, as she is a trained health care worker, during the five nights a fortnight that the children are cared for by their father but I am not satisfied that it is to be reasonably expected that during what is, I would suspect, a period of obvious instability in the parties’ lives that she can find employment just at the moment.
I consider that the SJR’s assessment of the wife’s financial needs at $855 a week was a reasonable figure for the wife’s financial needs at that time. However, at the time the SJR’s made those orders there was no child support assessment in place. That assessment is, according to the child support assessment attached to the wife’s affidavit material, a sum of $571 a week paid by the husband to the wife. The difference between those two figures is $279 a week.
The wife also receives a means tested Centrelink pension of $483 a week but I must disregard that because of subsection 75 (3) of the Family Law Act 1975. She receives no other income, although I note her child support assessment referred to an income of $390 for the year. I think I can disregard that. Accordingly, I am satisfied that the wife has an unmet financial need in addition to the child support payment she receives of $279 a week.
The husband’s primary submission was that he did not have capacity to pay spouse maintenance. He said in his affidavit material that his income was approximately $220,000 a year. It was said that he pays tax of $72,000, leaving a net income of approximately $150,000. It is said that once mortgage payments resume, they will be $87,412 a year and the other expenses, including child support he pays to the wife or for the wife’s benefit pursuant to other orders of the SJR for rates, insurance and the like, amount to $44,000, leaving him only $16,000 to support himself.
It was also put in submissions that there was a further amount of approximately $62,000 in expenses associated with the husband’s traineeship as a medical professional over the next 12 months or so. His affidavit details some of those expenses. Some at least appear to be tax deductable expenses and I am not satisfied that I should treat this $62,000 as a further deduction from the husband’s income. The husband’s claim that he earned approximately $220,000 a year was not expressly challenged by Ms Tulloch but the child support assessment referred to the Australian Taxation Office assessment of the husband’s income for, I take it, the past financial year as approximately $260,000. That assessment was dated 19 May 2023. I consider that I should accept that figure as a correct statement of the husband’s income.
If I apply the same calculation that Ms Tiernan for the husband said should be applied to his claimed income of approximately $220,000, then a tax assessment, including Medicare of two per cent of income on approximately $260,000 would be approximately $90,000. This leaves a net income of approximately $170,000. I am prepared to accept the husband’s claim that he will become responsible for mortgage payments in the sum of $87,412 a year, although in argument with counsel it was raised that there was no evidence from the husband about any efforts he may have made to obtain an interest only arrangement with the bank at the interest rate referred to in his financial statement of 6.68 per cent per annum on a mortgage debt of $1.134 million. His interest only repayments would be in the region of $75,000. So while I am not satisfied that the figure of $87,412 is necessarily correct, for the sake of argument, I accept it.
The husband also pointed to other expenses, as I have already noted, of $44,000. If those figures were applied to the income that I accept is more accurate of approximately $260,000, the husband would have a figure of some $43,320 left. I note that he claims a large payment for rent of $33,904 a year. I do take that into account. However, given my reservations about the figure the husband advances generally in relation to his income and expenses, I am not satisfied that those figures are necessarily accurate, though I accept that in rough terms they are. Having regard to all of those matters, I consider that there is a potential excess on the husband’s part of some $13,320 per annum, which at 52 weeks is $256 per week. I find that his capacity to pay spousal maintenance is $256 a week.
The SJR’s orders were made on 13 December 2022. The order that I would have made from that time, using the approach that I have just described, is $827 a week. However, from 22 February 2023 when a child support assessment was backdated and ran from then, I find that the appropriate figure is $256 a week. I understand that there are arrears under these orders and it is appropriate that I discharge those arrears but I find that they should be calculated on the basis of a weekly amount of $827 a week from 13 December 2022 and an amount of $256 a week from 22 February 2023.
The husband is presently not paying the mortgage due to the moratorium that has been in place since February of this year. From 30 June 2023, the moratorium ceases and, as I understand matters, the payments will, once they resume, include principal and interest. I note that the husband has not said anything in his affidavit about that in circumstances where the mortgage is the crucial financial issue in this case. He has not said anything about whether he was able to negotiate interest only payments or not.
Given that the parties have agreed today on the sale of the property, it would appear to me likely, or at least reasonably possible, that the husband could negotiate an interest only agreement with the bank, pending the sale of the property. That would reduce his monthly commitments considerably. I propose to suspend the payment of the spouse maintenance order that I have made, not the liability, but the obligation for payment from 30 June 2023 on two conditions.
(1)That the husband pays the wife a lump sum of $3,840 within 14 days. That constitutes, on the orders I have made, 15 weeks of arrears from 22 February 2023 at $256 a week. Any other arrears will remain outstanding, calculated in the way that I have described.
(2)That the payments will be suspended upon the husband providing evidence that he has resumed the mortgage payments on 30 June 2023. As I have noted, the parties have agreed to sell their property in B Street, Suburb C and their financial needs and capacities can be revisited at that stage and this interim order varied if necessary.
I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Young. Associate:
Dated: 2 June 2023
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