Jobbsin and Jobbsin

[2008] FamCA 924

FAMILY COURT OF AUSTRALIA

JOBBSIN & JOBBSIN [2008] FamCA 924

FAMILY LAW – SPOUSAL MAINTENANCE

Family Law Act 1975 (Cth)

APPLICANT: Ms Jobbsin

RESPONDENT: Mr Jobbsin

FILE NUMBER: MLC 8789 of 2008

DATE DELIVERED: 29 October 2008

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: The Honourable Justice Cronin

HEARING DATE: 21 October 2008

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR THOMPSON

SOLICITOR FOR THE APPLICANT: EFRON & ASSOCIATES

COUNSEL FOR THE RESPONDENT: MS PIGGOTT

SOLICITOR FOR THE RESPONDENT: MICHAEL T HELMAN

Orders

1. That until further order, the husband pay to the wife by way of spousal maintenance, the sum of $345 per week the first of such payments to be made on 31 October 2008.

2. That the husband (and the wife to the extent that it is necessary for her to do so) do all things necessary to draw down on the mortgage encumbering the parties’ home, the sum of $10,000 to be paid to the wife for the purposes of assisting her to conduct the litigation such sum to be taken into account by the trial judge as partial distribution of property, costs or maintenance as the trial judge sees fit.

3. That if the husband pays or has paid more than $10,000 by way of legal costs and expenses to his legal practitioners, advisors and expert witnesses in these proceedings, then for each dollar he pays in excess of $10,000, he shall contribute $1 in and towards the wife’s legal costs on the same terms and conditions as those set out in paragraph (2) hereof.

4. That all outstanding proceedings be otherwise transferred to the Federal Magistrates Court of Australia for listing as soon as practicable in the duty list of a Federal Magistrate.

5. That all interim proceedings should be otherwise dismissed and removed from the list of cases awaiting a hearing.

6. I certify that it was appropriate for the parties to brief counsel to appear on their behalf.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 8789  of 2008

MS JOBBSIN

Applicant

And

MR JOBBSIN

Respondent

REASONS FOR JUDGMENT

1. This is an interim application by both the husband and the wife.

2. On 25 September 2008, the wife filed an application seeking a number of financial orders.  She sought both final and interim orders. 

3. The wife’s application came before Mushin J on 29 September 2008 at which point, both parties were represented by lawyers and by consent, holding orders were made pending further investigations by the wife. 

4. The matter came before me in the judicial duty list on 17 October 2008 at which time, I did not have sufficient time to hear the case in any detail and the parties sensibly agreed on further interim orders.  They agree to adjourn the unresolved issues until 21 October 2008.

5. On 21 October 2008, Mr Thompson of counsel on behalf of the wife opened by saying that there were four issues in dispute.  Those issues were the wife’s claim for spousal maintenance, injunctions concerning the use by the husband of the Westpac Banking Corporation account and injunctions generally, a requirement that the husband continue to pay the mortgage encumbering the family home and finally, an application for some litigation funding otherwise known as a “Barro” order.

6. Ms Piggott of counsel on behalf of the husband said that there was no dispute in respect of the injunctions and the husband continuing to pay the mortgage.  I will make those orders.

7. Before turning to the background facts, it is important to also note that notwithstanding the orders that were made by Mushin J, the wife filed an application to have the husband dealt with for contempt of court orders.  That application was filed on 1 October 2008 returnable on 17 October 2008.  Counsel for the wife said that no orders were sought in relation to that application and that I could strike it out but that the question of costs was clearly relevant.

8. At the conclusion of the proceedings before me, Mr Thompson asked that there be further orders for discovery and when those were articulated, counsel for the wife indicated that the husband did not oppose them.  That further discovery is by way of an order that by 5.00pm on Friday 24 October 2008, the husband file and serve an affidavit responding to paragraphs 4(a)-(h) of the affidavit of the solicitor for the wife filed on 21 October 2008. 

9. Finally, because of the list in which I was involved on 21 October 2008, I reserved my judgment and indicated that I would give the parties reasons and outcomes as soon as possible.  I will return in these reasons to the question of the costs of the parties.  Because neither party was in a position to argue the question of the quantum of costs, I indicated that I would accept by email transmission, details of what those costs were.  What has happened is that each of the solicitors has descended into an unpleasant and inappropriate argument about not only what their respective clients have done but what they themselves were involved in.  I am intending to take any of that material into account including attachments.  I am relying only upon the documents that counsel gave me which were sworn and which is evidence.  It is inappropriate for the lawyers to do what they did and I would not expect them to be charging their clients for the unseemly argument.

10. The reasons hereafter flow from that hearing.

11. By way of background, the wife is aged 56 years and describes herself on the one hand as a housewife and on the other hand as a religious and cultural instructor.  The husband is 53 years of age and employed with a sales agency.

12. The parties were married in 1985 and separated on 2 September 2008 and as such, their relationship spanned 23 years.  They have one child of that relationship who is currently 22 years of age and self-supporting.

13. On 14 October 2008, the husband filed a response to the wife’s application.  He sought that the matrimonial home at G be sold and that existing encumbrances be paid out in addition to which the husband pay the G property utilities.  That application was not pressed nor, could it have been having regard to the state of the evidence.

14. The evidence that assists by way of background is that the wife has no qualifications and has predominantly not worked throughout the long relationship.  The husband’s response to that is that she chose that position.  Both parties allege that they have high blood pressure problems.

15. There is significant dispute between the parties about a hospitality business.  It is clear that the husband conducts it although it is not so clear how that occurs.  The wife took the opportunity to witness the funds that were taken in that business prompting some further evidence to be filed on the morning of 21 October 2008.  The husband said in his affidavit that there were no cash sums drawn from that business and it lost money particularly over the winter.  In paragraph 10 of his affidavit filed 14 October 2008, the husband said that he set the business up with $80,000 from money from his grandfather but more importantly, that it cost $3000 per week to run.  He said that thus far, the business has not made a profit.

16. Both parties refer in some detail to the fact that each was a gambler.  The husband said that he attended the casino but no longer does so and his entitlements at Crown Casino have been cancelled.  He said that on a significant portion of the time that he gambled, his wife was with him.

17. In May and June of 2008, the husband drew down funds against the mortgage and the parties had a significant dispute as to what happened to those funds.

18. The two issues that require determination are the wife’s interim entitlements to be supported by way of maintenance and some assistance to cover her legal expenses in anticipation of the hearing.  I pointed out to the parties that I was surprised at the extent of the proposed costs that the wife would incur and in my view, subject to some sensible negotiations and discovery, this is a matter that is appropriate for the Federal Magistrates Court.  On the wife’s case, there is an equity of about $750,000 and on the husband’s case much less.  The parties cannot afford to be litigating at the rate that they are currently doing so.  Accordingly, this seems to me to be a straightforward matter where although there may be some assessment as to contribution having regard to the various estate issues, the matter does not otherwise appear complicated.  Mr Thompson on behalf of the wife said that there was also the issue of add-backs having regard to the gambling of the husband.  That is a factual dispute and if it has occurred over a long period of time, it ought not to be a significant or important issue.

19. Turning then to the spousal maintenance issue.  The wife sought an amount of $750 per week.  The husband simply sought that nothing be paid by way of cash payment.

20. The wife relied on affidavits that she filed on 25 September 2008 and 16 October 2008 together with a financial statement.  She also relied upon two affidavits by her legal practitioner. 

21. The husband relied upon his affidavits filed 14 October 2008 and 20 October 2008 and a financial statement. 

22. For the purposes of these proceedings, I have relied heavily upon the figures that the parties have provided in those documents.

23. Section 72 of the Family Law Act 1975 (Cth) (“the Act”) says:

    (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).

24. The provisions set out in s 75(2) of the Act are extensive and enable a court to take a large number of matters into account. For the purposes of these reasons, I have taken those matters into account.

25. I am satisfied on the evidence that the wife is unable to adequately support herself by reason of her incapacity for appropriate gainful employment but not to the extent to which she claims.  I am satisfied that the husband has the capacity to maintain the wife for reasons which I shall now set out.

26. In her financial statement filed 25 September 2008, the wife said that she was earning a salary before tax of $155 per week.  In her affidavit filed at the same time, she describes her total monthly income as “around $800”.  Although not great, the inconsistency means that there is some uncertainty about exactly what she is earning.  As it is an admission against interest, I have taken the figure of around $800 per month as the more likely figure.  She does not pay income tax.

27. Turning to her expenses, she set out in her financial statement what may be described as a wish list.  In his affidavit, the husband alleged profligacy on the part of the wife.  Having regard to the interim nature of the proceeding, I propose to take a pragmatic approach based upon what I think is subjectively reasonable.  In her financial statement, the wife said that her average weekly expenses totalled $980.  However, in that sum, the wife has included utilities, travelling, clothing, medical, dental and optical, entertainment and holidays.  Having regard to the interim nature of the matter and the fact that the husband is paying the utilities, there is no basis for some of those expenses.  In addition, as the wife is only engaged in modest employment and there is no evidence of her travelling needs, I have reduced the claim in respect of petrol and maintenance.  Similarly, although the wife says that she says she has some blood pressure problems, there is no evidence as to the extent to which that requires medical or dental treatment and as such I propose to reduce those figures.

28. The wife has made claims in respect of entertainment and holidays as well as magazines and gifts all of which are matters that can be taken into account in the fullness of time when this case is heard at a final hearing.

29. Accordingly, I propose to allow:

    Food  $180

    Household supplies  20

    Telephone  25

    Petrol  70

    Clothing  50

    Medical expenses  30

    Entertainment  50

    Chemist  20

    Cleaning  40

    Hairdressing  40

    Total  $525

30. The wife has income that she can contribute towards that total expense of approximately $180 per week so her real needs are $345 or thereabouts per week. 

31. I find that that sum is reasonable in the circumstances.

32. The second question is the husband’s capacity to pay that sum.

33. In his financial statement, the husband deposed to the fact that he had an average weekly income before tax of $2120 and there was a further $50 a week coming in from an investment property.  In respect of the hospitality business, his financial statement showed that it “runs at a loss”.

34. The wife did not accept the evidence of the husband as set out in his financial statement.  In respect of the hospitality business, the wife examined the takings.  Matched against the figures provided by the husband, I am satisfied that even on the basis of the husband’s statement that winter is not a good time for the business and that it costs $3000 per week or thereabouts to run the business, there is still a surplus albeit a modest one.  Accordingly, I do not accept the husband’s statement that there is no income coming from the business.

35. The second contentious area relates to the husband’s income as a sales agent.  I have set out above what he deposed was his gross income before tax.  The husband’s own documents show that he is paid a set amount each calendar month by way of a retainer which is then supplemented by his commissions from sales.  The husband’s figures show that his accrued commissions total approximately $77,000.  It was suggested by an affidavit sworn by the wife’s solicitor that I should infer that all of those commissions will be paid by 9 January 2009.  Whilst that is an interpretation which is open, I accept what was put on behalf of the husband that there are sales still in progress for which he will not be paid a commission until completion. Accordingly, I could not conclude that all of that commission will be paid over the ensuing three or four months.  However, even on the husband’s own figures, combined with what he has earned to date and the commissions that will come in over the ensuing months to January, his income before tax could be seen to be something in the vicinity of $90,000 for the six month period.  That figure comes from the income that the husband has earned based on his disclosed earnings and retainer together with the commissions projected up until 9 January 2009.  If I was to add to that sum income, albeit modest, from the hospitality business, I say that I am satisfied that the husband’s income before tax is closer to $3500 per week. 

36. The husband deposes to the fact that he has total personal expenditure of $3143 per week.  How he is managing that is unclear.  However, using the same subjective reasonable allowance as I have for the wife, I say that the appropriate expenditure to be allowed is as follows:

    Tax  $600

    Westpac mortgage  850

    ANZ mortgage  50

    Rates  25

    Insurances   20

    Car lease  98

    Food  150

    Household supplies  10

    Utilities  30

    Telephone  125

    Petrol  80

    Clothing   20

    Medical   20

    Entertainment  50

    Hairdressing  5

    Total  $2133

37. It will be seen from those calculations that the husband has ample funds to pay the sum that the wife needs for her reasonable living expenses and for which she cannot adequately provide for herself.

38. I note in passing that one of the expenses claimed by the husband which has a significant impact upon the total of $3143 to which I earlier referred is a Westpac Visa account under which the husband suggests that he is paying an estimated sum of $1200 per week.  That is hard to follow having regard to the fact that his only liability for a credit card is now outstanding as a sum of $1000.  That must be clearly an oversight on the part of the husband.

39. In the circumstances, I propose to order that the husband make the payment of $345 per week commencing with the first payment due on 24 October 2008.  All such payments are to be made to a bank account nominated by the wife.  Those payments are to be made until further order.

40. I turn then to the question of the application for a Barro order. 

41. The wife’s case is that she has a need for litigation funding in the sum of $70,000. Her practitioner filed an affidavit on 25 September 2008 in which he referred to valuation expenses being in the range of $13,000-$20,000 and legal costs making up the balance. I do not accept that those sums in the circumstances are reasonable. There is no basis at this stage to have real estate assets valued. The parties have a modest dispute over the value of the home and similarly, with respect to the investment property. That issue should be easily resolved by appraisals. In respect of the hospitality business, some forensic exercise will be necessary but having regard to the size of the business and the fact that details of its purchase are well know to the parties, it ought not be a complex exercise. In relation to the question of legal costs associated with these proceedings, I do not accept that the sorts of sums suggested by the practitioner for the wife are reasonable having regard to the scale set out in the Family Law Rules 2004. The affidavit whilst detailing the amount of time expected to be spent, does not set out the reference to a scale or a costs agreement. In the circumstances, I am uncertain as to the anticipated costs that the wife could expect.

42. No party argued that there was no power for the Court to make an order which would provide funding as sought by the wife leaving its characterisation ultimately for the trial. If the sum sought or ordered was to be treated as costs, the provisions of s 117 of the Act would apply and leaving aside any question of justification, as I have pointed out, I am unclear on how the quantum was calculated according to any referable scale. More importantly, if the wife desires to expend sums on her lawyers, it is her prerogative to do so having regard to the clear entitlement that she already has to some portion of the equity of the parties in the assets.

43. In the circumstances, I do not think it is appropriate to make an order anywhere near the sum of $70,000 sought by the wife based upon the evidence before me.  The husband said in his affidavit that he had incurred fees and paid some of them.  The wife said in her affidavit that she did not have the funds to pay her solicitors the legal costs and disbursements but the husband responded pointing to the fact that the wife had in fact spent money on her lawyers at some point earlier in the year.

44. In so far as the valuation of any asset is necessary, that can be done by a single expert witness and the parties have access to over $20,000 in undrawn mortgage funds which could be used for that purpose.

45. I accept that the wife has incurred costs to date and does not have immediate access to those funds and her practitioner has indicated that the wife would have to provide security for the payment of legal costs and also disbursements for their involvement to continue.

46. This is a discretionary matter and in my view, it is appropriate to make an order that the wife have access to $10,000 for the purposes of those expenses incurred and which are likely to be incurred.  Those funds, like the valuation issue, can be drawn from the available mortgage funds.

47. In addition, it is clear that there will be ongoing negotiations between the parties and each will incur legal fees.  Presumably although it is not said, the husband is paying his legal fees from his income.  In the circumstances, each time he pays a sum in and towards his legal fees, the wife’s legal fees can be paid on a dollar for dollar basis.  Having regard to the fact that the wife is to receive $10,000 in and towards her costs however, that provision is not to apply until the husband expends a sum in excess of $10,000 on his own legal costs.

1. Each party indicated to me that they would be seeking legal costs depending upon the outcome of the proceedings.

2. Section 117 of the Act says that each party shall pay their own costs unless there are circumstances which justify the Court departing from that principle. This is a case in which the Court should depart from the principle for a number of reasons. It is clear on the evidence that the husband did not comply fully with the earlier orders of the Court and that required the wife to insist upon enforcement proceedings. In addition, notwithstanding the orders were made by consent, there were still documents relating to banking records over which the husband had absolute control which were not provided. The husband opened his own banking account when the joint fund was frozen. It was conceded by his counsel that he had access to internet banking and as such, the printing off by him of the banking account not to mention the other banking record could hardly be seen to be difficult. Furthermore, the husband did not dispute that he cut off any access by the wife to a source of funds. Notwithstanding she was living in the home with him, apart from her modest income from teaching, she had no access to funds which would have covered the reasonable expenses that I have found. In the circumstances, she had no choice but to issue proceedings when presumably the pre-action procedures were followed unsuccessfully. In addition, the parties attended court on more than one occasion at which negotiations took place involving counsel and I have inferred, the husband gave very clear instructions about his financial position which I have not accepted.

3. In the circumstances, I am justified in departing from the rule that each party pays their own costs.

4. If that determination is made, the Court is obliged to look at the various factors set out in s 117(2A) of the Act.

5. I have taken into account the financial circumstances of each of the parties.  Neither is in a strong financial position however, the husband has greater access to income than does the wife.  In addition to his regular form of income, he has all of the proceeds from the hospitality business notwithstanding his obligations to cover the costs of that business.  In my view, it is clear that the husband is in a stronger financial position than is the wife.

6. Neither party is in receipt of legal aid nor should they be in the circumstances.

7. Section 117(2A)(c) requires that I take into account the conduct of the parties to the proceedings including such things as their approach to discovery and the production of documents. I am satisfied that the husband has not been proactive in relation to the production of material that would have otherwise resolved this matter more quickly. I am also satisfied that the husband has not complied with orders notwithstanding he had consented to them. That necessitated the wife issuing the application for enforcement.

8. I am also obliged to take into account whether any party to the proceedings has been wholly unsuccessful.  The husband did not pursue the issue of the sale of the home nor, as I said, could he.  In respect of the fundamental issues associated with him paying money for the support of his wife as well as enabling the litigation to be on something of an equal footing, it could hardly be said that he has succeeded in any way notwithstanding the wife’s claim was pitched at unreasonable levels.  In my view, the husband has been wholly unsuccessful in the circumstances.

9. I have been informed that there are offers in writing in relation to various matters to settle the proceedings on an interim basis.  That is clear from the correspondence attached to the affidavit material.  In my view, the suggestion that the husband made was unreasonable in the circumstances.

10. Costs are not designed nor intended to be a punishment.  They are to compensate the person who is engaged in the litigation in circumstances where they should not need to be because of the conduct and behaviour of the other party.  It is appropriate in the circumstances that the wife not incur unnecessary costs because of the attitude of the husband as I have outlined.  Whilst the orders I propose to make will put the husband in a difficult position, having regard to the order that I have made in relation to the Barro matter, I propose to fix the wife’s costs and for them to be paid by the husband from his share of the property proceedings.  I do so because of the fact that the husband does not have access to funds of a substantial nature but has the ongoing obligations in relation to the maintaining of the mortgage and the home utilities.

11. It has long been said that the order for costs is a discretionary remedy. The wife’s position in relation to the quantum of costs was that I should make an order for $7000. Having regard to the matters that I have said about the nature of the proceedings and the costs proposed by the wife’s practitioner, I do not accept that the quantum is reasonable in the circumstances. The quantum of costs should cover counsel’s fees and a reasonable amount of money expended on documents and for that purpose, the scale in the Family Law Rules should apply. I propose to allow a total of $4000 for counsel’s fees on the basis of the hearings being short summary hearing taking less than three hours including for when the matter not reached or resolved. I propose to allow solicitor’s fees of $3000. I do not accept that it was necessary to have an instructor present at the defended hearing. That is a matter of choice for the wife and not something that I would visit upon the husband.

I certify that the preceding Fifty Eight (58) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin.

Associate: 

Date:  29 October 2008