Jonas and May

[2010] FamCA 551

FAMILY COURT OF AUSTRALIA

JONAS & MAY [2010] FamCA 551

FAMILY LAW – SPOUSAL MAINTENANCE – Maintenance for a de facto spouse after separation – Considerations of s 90SF – Review of the orders of Senior Registrar

Family Law Act 1975 (Cth)

APPLICANT: Mr Jonas

RESPONDENT: Ms May

FILE NUMBER: MLC 2485 of 2010

DATE DELIVERED: 5 JULY 2010

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: THE HONOURABLE JUSTICE CRONIN

HEARING DATE: 28, 29 JUNE 2010

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR O'SHANNESSY

SOLICITOR FOR THE APPLICANT: GILLIAN COOTE FAMILY LAW

THE RESPONDENT: IN PERSON

Orders

1. That paragraphs 1 and 2 of the Senior Registrar’s orders made on 12 April 2010 are discharged.

2. That until further order, the applicant MR JONAS pay to the respondent MS MAY Four Hundred Dollars per week for her maintenance, the first of such payments to made due on 18 March 2010.

3. For the avoidance of doubt, any money paid to the respondent MS MAY by the tenants of the property at K pursuant to the orders of the Senior Registrar made on 12 April 2010 shall be in part satisfaction of paragraph (2) of these orders.

4. That the applications in a case both filed by the applicant on 5 May 2010 and the response thereto filed on 1 June 2010 seeking interim orders are dismissed.

IT IS CERTIFIED:

1. That pursuant to Order 19.50 of the Family Law Rules 2004 it was reasonable to engage counsel to attend.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 2485  of 2010

MR JONAS

Applicant

And

MS MAY

Respondent

REASONS FOR JUDGMENT

1. Two applications were before the court in the judicial duty list on 29 June, 2010.  In both cases, the applicant was Mr. Jonas.  In each, the respondent was Ms. May.

2. I shall refer to the parties as applicant and respondent for convenience.  I shall describe Mr. Jonas as the applicant and Ms. May as the respondent. 

3. These applications were not before the court for the first time. 

4. The first of the two applications by the applicant was to review a decision of Senior Registrar FitzGibbon made on 12 April, 2010 that he pay maintenance for the respondent.  In those proceedings heard in April 2010, the applicant was Ms. May and Mr. Jonas did not appear. 

5. Senior Registrar FitzGibbon made an order that the applicant pay the respondent $600 per week.  He also ordered that some tenants in a property owned by the applicant, redirect their rental payment to the respondent. 

6. On the same day that the matter was before Senior Registrar FitzGibbon, the respondent’s application included a request for injunctive orders of a financial nature which were beyond the jurisdiction of the Senior Registrar.  The proceedings were then transferred to Mushin J.  On 12 April, Mushin J. being satisfied as to service, made injunctions against the applicant. 

7. The applicant now seeks to set aside the injunctions made by Mushin J. on the basis that he was not aware of the proceedings.  Having said that, in his submissions, the applicant said that he really had no problems with them “per se” because the injunctions did not affect him.  Notwithstanding his ambivalence about the orders, I propose to deal with them in these reasons. 

8. The hearing on 12 April, 2010 was in the absence of the applicant and he alleged that he was denied natural justice.  The sequence of events leading up to that hearing are simple. 

9. Two letters were sent to the applicant by the solicitor for the respondent.  They were sent to his rented residence.  By email on 1 March, 2010, the applicant said that Mr. Stephen Farmer was his solicitor and representative.  The solicitor for the respondent wrote to Mr. Farmer on 2 March because there were clearly difficulties in endeavouring to serve documents on the applicant that had been issued by the respondent. 

10. Email documents dated 26 March, 2010 would clearly suggest on their face that the applicant had possession of the initiating application and supporting documents.  Nothing indicated to the contrary. 

11. Having sent the documents and enquired of Mr. Farmer whether he was acting only to ascertain that he was not, the respondent proceeded with the hearing before Senior Registrar FitzGibbon and Mushin J.  As at 12 April, 2010, there was a stony silence from the applicant. 

12. As a matter of precaution on 12 April, 2010, the solicitor for the respondent contacted Mr. Farmer whose office indicated they had no instructions from the applicant. 

13. The applicant’s explanation for why all this has occurred is that he had been receiving offensive emails so he altered the spam filter to put anything that was not connected with a recognisable address into a separate folder. 

14. Having regard to the correspondence, it is hard to accept that the applicant was not aware of the proceedings.  He certainly knew that there was a solicitor acting for the respondent.  He certainly knew where the respondent was and there was a clear indication of her intention to take action.  He clearly knew that the respondent had been put on notice that he was to be represented by Mr. Farmer.  All of those matters indicate that the court on 12 April, 2010 was justified in concluding that the applicant had been properly served. 

15. The dilemma I have is that on the untested evidence of the applicant, I am entitled to conclude that recalcitrant though he may have been, he did not necessarily know that the application was listed for 12 April.  I am prepared to give him the benefit of the doubt.  Counsel for the respondent indicated that the applicant’s applications were misguided.  Decisions of this nature have to be established on the balance of probabilities.  Implausible though his explanation may have appeared, I will give him that benefit of doubt. 

16. I turn then to the injunctions. 

17. The respondent appeared before Mushin J. with an affidavit indicating that a large sum of money had gone through the applicant’s hands.  The applicant said that it was over a space of two years but on any view, the money was large.  Those funds came from a variety of sources including the bush fire relief fund.  At the time of the receipt of these funds, the applicant was servicing a $1,000,000 mortgage on two properties.  According to counsel for the respondent, there were taxation consequences.  It was the position of the respondent that despite the assertion of the applicant, the money had not all been accounted for. 

18. On the court file was an affidavit from the applicant attached to which was a computer disc.  On the evening before the matter was heard by me, the applicant said that the document contained a spreadsheet which had all of the explanations that were needed to satisfy the complaint of the respondent about where the money had gone.  I warned the applicant that the disc was of little value to me unless I could access it or have hard copies.  The applicant said that he had given a hard copy to the respondent but her counsel indicated to me that it was unintelligible.  No effort was made by the applicant to rectify the problem overnight during which time I said that I would read all of the documents to which I had been referred. 

19. Accordingly when the hearing commenced on 29 June, 2010, I did not have any information as asserted by the applicant which would have indicated what happened to the money.  Again, counsel for the respondent asserted that it had not been accounted for. 

20. In the course of discussion, it became clear that the applicant was not troubled about the injunction and said that it was of no consequence to him because it did not affect him.  That is inconsistent with what he had told me on the previous evening in which he said it was unreasonable for the court to injunct him in relation to such things as disposing of items of furniture.  He pointed to the fact that there was no order as against the respondent but in turn, there had been application made by the applicant against the respondent and that had previously been resolved by orders. 

21. Having regard to the nature of the evidence and notwithstanding the reticence of the applicant to agree to the orders, I am satisfied that it was appropriate for the orders to be made in the first place and for them to now continue. 

22. Injunctions made on an ex-parte basis are always open to scrutiny in a subsequent hearing where the court can examine whether there was a justification for making the orders in the first place.  In this case, I have some hesitation about whether the orders were brought to the attention of the applicant or not, but in any event, I am quite satisfied that on the evidence that I have read which was the same evidence before Mushin J., the orders were appropriate in the circumstances. 

23. There is no basis therefore for me to deal with any jurisdictional issue which gives rise to the power to make the orders.

24. I turn then to the second issue which relates to the question of the review of the Senior Registrar’s decision relating to maintenance.  A review in those circumstances is a de novo hearing.  I indicated to both parties that if they wanted considerable time in which to cross-examine, the case would have to be placed in a trial list.  Each party requested that I deal with the applications on the papers, knowing that the evidence could therefore not be tested. 

25. It would appear that both parties were in one form or another receiving Centrelink benefits. 

26. The power to make an order for maintenance lies in Part VIIIAB of the Act.  It relates to the financial matters relating to de facto relationships.  In this case, there was no dispute as to the nature of the relationship or that the parties separated after 1 March 2009.  There was no suggestion that there was any jurisdictional impediment relating to participating jurisdictions.

27. It is clear therefore for the purposes of s 90RD, a de facto relationship existed between the applicant and the respondent.  It also existed for a period in excess of the minimum requirements under the Act for the purposes of the application.

28. Section 90SE provides as follows:

    (1)      After the breakdown of a de facto relationship, a court may make such order as it considers proper for the maintenance of one of the parties to the de facto relationship in accordance with this Division.

29. Section 90SF provides as follows:

    (1)      In exercising jurisdiction under section 90SE (after being satisfied of the matters in subsections 44(5) and (6) and sections 90SB and 90SD), the court must apply the principle that a party to a de facto relationship must maintain the other party to the de facto relationship:

    (a)only to the extent that the first‑mentioned party is reasonably able to do so; and

    (b)only if the second‑mentioned party is unable to support himself or herself adequately whether:

    (i)by reason of having the care and control of a child of the de facto relationship who has not attained the age of 18 years; or

    (ii)by reason of age or physical or mental incapacity for appropriate gainful employment; or

    (iii)for any other adequate reason.

    (2)      In applying this principle, the court must take into account only the matters referred to in subsection (3).

    (3)      The matters to be so taken into account are:

    (a)the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship ); 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 de facto relationship 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 (4), 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)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

    (i)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 de facto relationship 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 90SM in relation to:

    (i)       the property of the parties; or

    (ii)vested bankruptcy property in relation to a bankrupt party; and

    (o)the terms of any order or declaration made, or proposed to be made, under this Part in relation to:

    (i)a party to the subject de facto relationship (in relation to another de facto relationship); or

    (ii)a person who is a party to another de facto relationship with a party to the subject de facto relationship; 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

    (p)the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:

    (i)       a party to the subject de facto relationship; or

    (ii)a person who is a party to a marriage with a party to the subject de facto relationship; 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

    (q)any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and

    (r)any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and

    (s)the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and

    (t)the terms of any financial agreement that is binding on a party to the subject de facto relationship.

    (4)      In exercising its jurisdiction under section 90SE, a court must disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.

30. I am satisfied for the purposes of s 44(5) of the Act that the application is also made within two years of the end of the de facto relationship.

31. Section 90SF(1) is a two staged process.  The first part of the process is for the applicant to prove an entitlement to maintenance from the other party to the de facto relationship on the basis that he or she is unable to support himself or herself adequately because of the matters set out in the section.

32. In this case, the applicant provided a financial statement in which she showed that she was not employed and her only income was from Centrelink.  She deposed to the fact that she had limited property.  She declared expenses of $441 per week which were personal to her and the additional costs of maintaining the child in her care. 

33. Looking at those expenses, there is nothing unusual about them and certainly nothing that the applicant in these proceedings said which would suggest that they were unreasonable.

34. The respondent’s evidence is that she is 51 years of age and has no income and throughout the long relationship has generally looked after the homemaker and parent role.  In respect of that allegation, the applicant did not respond in his affidavit in reply.  The respondent also said that the property known as K property has been rented out at about $500 per week.  The applicant responded to that by saying that the money was used of offset the mortgage payment of $4166 per month together with outgoings.  He said that any reduction would trigger a default.  Whilst that may be so, it means that the payment of the rental into the mortgage is a conscious choice by one or both of the parties which gives the mortgagee priority over the obligation to pay maintenance.  In some circumstances that may be well justified as the party seeking the maintenance has been very much involved in the creation of the wealth system.  In circumstances however where someone is unable to obtain an income and the only source of funds available to them is the Centrelink benefits provided by the taxpayers of Australia, the priority to pay the mortgagee must give way.  Clearly, that would potentially trigger not only a default as deposed to by the applicant but also the potential loss on a sale.  That however is an issue that can be determined on the property dispute between them.

35. I am satisfied in the circumstances that the respondent is unable to support herself adequately by reason of her age or physical incapacity for appropriate gainful employment.  The latter concept is supported by the fact that she has not worked for many years having taken on the agreed responsibility of a family.  It is inappropriate in an interim hearing to expect significant alterations to that way of life.

36. I turn then to the second issue. 

37. Section 90SF(1) says that the obligation to pay maintenance only arises to the extent that the proposed payer is reasonably able to pay.  That requires an examination of the evidence of both parties.

38. The respondent said that in August 2008, a company L Pty Ltd purchased a property at C for $965,000.  Of that company, the respondent said that the applicant was sole director and shareholder.  She said that in the same month as the purchase, a mortgage to two companies was registered as being secured against the property.  As to what those details were, she said she had no idea.  She said that after the 2009 fatal bushfires in Victoria, the applicant obtained $300,000 from RACV insurance and between $100,000 and $150,000 from the Bushfire Relief Fund.  She said she had no idea what he did with the “invested funds”.

39. It was the capital money issue that the respondent said justified the conclusion that the applicant had a capacity to pay her maintenance.

40. The applicant responded in his affidavit by going through the relevant paragraphs of the judgment of the Senior Registrar rather than the affidavit of the respondent.  I have endeavoured as best I can, to work out what his responses were to the assertions of the respondent.

1. The applicant said that the respondent had a day to day understanding of financial issues.  It is clearly a contentious issue and I cannot determine it on the facts.  He said the respondent received “in excess of $10,000” plus an inheritance and the proceed of sale of various assets.  Whilst that may be so, it does not assist where the respondent professes in her evidence now to have no money.  That evidence is largely unchallenged.

2. The applicant said that the money from the insurance and bushfire fund had been distributed, invested, or expended “with the full knowledge and agreement” of the respondent and she was aware of the monthly expenditures to maintain the “status quo”.  Those statements too were contentious issues and do not assist me in circumstances where both parties agreed that the matter would be dealt with on the papers where the evidence could not be tested.

3. The applicant referred to an email he sent to the respondent on 9 March 2010 which could only be described as a stream of consciousness.  It is not clear what it was meant to prove.

4. The applicant referred to the lease relating to the C property and having read it, I am satisfied that it confirms nothing more than the obligation of the tenant.  However, the landlord is referred to as a company called A Pty Ltd.  That company name is inconsistent with the name to which the respondent refers.  I am therefore not at all sure who or what the connection with the ownership of the land at C is.

5. The applicant said that there was no capital sum remaining in his hands.  Apart from saying that he had no capital and was receiving New Start allowance, he called no other evidence.

6. It is important to say that maintenance is not just dependent upon or payable because of, income. 

7. The respondent referred to the large sums of money having gone through the applicant’s hands.  Although the applicant endeavoured on a number of occasions to say that all of the explanations for the use of these funds were in some hardcopy document, that was never produced.  As I have previously mentioned, he referred to a disk but according to counsel for the respondent, the detail was unintelligible.  Accordingly, I am none the wiser.

8. The respondent pointed to the large sums of money I have referred to but also to some other issues relating to the inconsistency of the applicant’s statement about his impecuniosity.  The applicant did not deny that he and his partner Ms M on 3 March 2010 signed a lease for his current residential address.  They committed themselves to pay $3780 per calendar month plus a $4350 bond.  The applicant said that Ms M was on a limited government income benefit.  Accordingly, he did not deny that their combined income is almost the same as the weekly rental commitment for this new premise.  No explanation was given as to how the bond was raised.  The most that the applicant could say was that at the time they executed the lease, he had aspirations other than those that he now endured.  The execution of the lease and its payment are inconsistent with impecuniosity.

9. In support of the lease to which I have just referred, without contradiction again by the applicant, it is noted that he signed an application for the tenancy.  He described himself as the owner of the C property as well as that at K.  He referred to himself as being self-employed.  The self-employment arises from a company which is referred to in the financial statements filed on 27 May 2010.  He said in that document that he had an interest as to 100 per cent in A Pty Ltd and that its value was $1.2 million.  Counsel for the respondent said the $1.2 million was encumbered by “other personal business liabilities” referred to in the financial statement.  However, in relation to the entity, the applicant described himself as the director.  He gave as referees, the name of a friend who I note is owed $750,000 in the financial statement.  He also referred to his accountant.  Presumably, if one runs a number of companies and has significant assets albeit encumbered as those set out in his financial statement, the respondent has the capacity to pay maintenance. 

10. The application for the tenancy contained a statement that the applicant understood that it was an offence not to tell the truth in the document and then signed it.  Albeit that there may be some doubt about the legal significance of the statement similar to a declaration in law it has some weight.

11. When I inquired as to how the applicant managed to do all these things on New Start allowance, he said it was all from borrowings.

12. Thus, if the applicant can:

    (a)obtain Centrelink income whilst living in a de facto relationship;

    (b)conduct business affairs through a corporate entity in which he has a directorship;

    (c)describe himself as self-employed;

    (d)have significant sums of money go through his hands over a space of two years;

    (e)commit himself to a joint rental obligation of $3780 per calendar month; and

    (f)borrow funds apparently relatively easily,

    I can conclude that he has a capacity to pay something in excess of his own living expenses.

13. Having examined the financial statement of the applicant, it is noted that he did not set out the details of his weekly expenditure preferring to say that after rental and other basic obligations, he spent $150 per week.

14. Section 90SF requires the court when applying the principle that one partner must maintain the other, to take into account only the matters referred to in s 90SF(3) to which I have referred above.  Accordingly, I find on the evidence presented to me that there is evidence that the applicant does have some health problems but the details are not accepted by respondent but in any event, there is no evidence to indicate to me that he does not have the capacity to do what he seems to do well.

15. I accept that his income is limited to New Start allowance at this stage but his property and financial resources are such that he has the capacity to pay maintenance.

16. I accept that each party has the responsibilities for the care of a child but again, that does not seem to affect the question of the applicant’s capacity.

17. I do not have sufficient information about the commitments of the applicant.  He did not comprehensively complete the financial statement.  I have that precise evidence in respect of the respondent who set out that her personal requirements were in excess of $400 per week.

18. Neither party suggested they had legal responsibility for any other person other than their respective children.

19. I have taken into account that each party is in receipt of government benefits.  In respect of the respondent who is claiming the maintenance, I am obliged as a matter of law to ignore her pension entitlement.

20. Each party has enjoyed a reasonable standard of living.  That is evidenced by the fact that in the case of the respondent, she is maintaining the property that she was previously living in whilst the applicant has the capacity to rent a property at significant expense on a weekly basis. 

21. The respondent set out in some detail how her contributions had been made to the various properties over which the control seems to lie in the hands of the applicant.  In those circumstances she has an entitlement to share in that capital. 

22. I have contemplated the prospect that a proposed order may have some impact on creditors of either or both of the parties.  However having regard to the limited nature of the orders and the fact that the parties have otherwise agreed to the sale of the properties, that should not be a significant factor because the major creditor will have an opportunity to be heard on the question of the recovery of the sums outstanding to him.

23. I have taken into account also that this is a long de facto relationship during which time, the respondent undertook the role of homemaker and parent.  That issue is not disputed by the applicant. 

24. Although it is not the primary consideration, the respondent refers to the fact that she is caring for a child of the relationship.

25. I have also taken into account that the applicant is cohabiting with another person.  The details of the applicant’s partner’s financial situation however remain clouded.

26. At this stage, I am unable to say what the property proceedings will produce in terms of the capital for each party.  It is important however in the meantime that the respondent not be excluded from sharing in any entitlement that she might otherwise have. 

27. The other matters as set out in the relevant section do not assist further.

28. Under the circumstances, it seems to me that the appropriate order is that the applicant pay to the respondent the sum of her basic expenses each week of $400.  I have excluded the expenses of the child on the basis that they relate to child support issues.  Those are matters that can be dealt with in another jurisdiction.

29. I note that the Registrar originally made an order for a sum well in excess of that amount but on the evidence before me, the amount of $400 per week is reasonable.

30. There was some debate between the parties about the order made by the Court for the rental to be paid to the respondent.  There is some confusion as to whether that was in addition to the $600 per week or whether it was by way of security.  It seems to matter little as it would appear from the submissions of both parties that the tenancy arrangement is shortly to come to an end.  That must presumably happen anyway as the property is to be sold.  To avoid doubt, any money thus far paid can satisfy arrears of the orders that I propose to make which I shall backdate to 18 March 2010 when the respondent filed her originating application but I propose to otherwise discharge the order for the payment of $600 per week and the assignment of the rental as not being justified on the evidence.

I certify that the preceding Seventy (70) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin

Associate: 

Date:  5 July 2010