Keir & Ramsay (No 3)
[2022] FedCFamC1F 746
Federal Circuit and Family Court of Australia
(DIVISION 1)
Keir & Ramsay (No 3) [2022] FedCFamC1F 746
File number(s): CRC 8 of 2020 Judgment of: CAMPTON J Date of judgment: 23 September 2022 Catchwords: FAMILY LAW – PROPERTY – SPOUSE MAINTENANCE – Application in a Proceeding for urgent de facto maintenance pursuant to s 90SG of the Family Law Act 1975 (Cth) – Where, on the respondent’s case, the application is made outside the time limitation to bring urgent maintenance claims – No application for leave pursuant to s 44 made – Where the Court cannot be satisfied on the evidence the respondent has established an urgent or pressing need for maintenance – Application dismissed. Legislation: Family Law Act 1975 (Cth) ss 44, 77, 90SE, 90SF, 90SG, 90SM, 102NA
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 6.06
Cases cited: Ashton & Ashton (1982) 91-285
Keir & Ramsay (2022) FedCFamC1F 362
Chapman & Chapman (1979) FLC 90-671; [1979] FamCA 14
Hall v Hall (2016) 257 CLR 490; [2016] HCA 23
Malcolm & Malcolm (1977) FLC 90-220
Sadlier & Sadlier [2015] FamCAFC 130
Division: Division 1 First Instance Number of paragraphs: 54 Date of hearing: 23 September 2022 Place: Sydney Solicitor for the Applicant: J Lawyers Solicitor for the Respondent: Litigant in Person ORDERS
CRC 8 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR RAMSAY
Applicant
AND: MS KEIR
Respondent
order made by:
CAMPTON J
DATE OF ORDER:
23 SEPTEMBER 2022
THE COURT ORDERS THAT:
1.The respondent de facto husband is granted leave to amend his relief as contained in his Application in a Proceeding as filed on 15 September 2022, such that in lieu of the reference to s 77 of the Family Law Act 1975 (Cth) (“the Act”), the reference will be to s 90SG of the Act.
2.The respondent’s Application in a Proceeding as amended filed on 15 September 2022 is dismissed.
3.Judgment reserved in relation to the Application in a Proceeding of the respondent filed 22 September 2022.
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 the pseudonym Keir & Ramsay has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX TEMPORE REASONS FOR JUDGMENT
CAMPTON J:
Mr Ramsay (“the respondent”), by way of an Application in a Proceeding filed on 15 September 2022, seeks an order in the following terms:
1.The court order the release of $50,000 from the $200,000 held in trust by [T Lawyers] to the respondent in the matter of CRC8/2020 for the purpose of urgent spouse maintenance under sections 77 and 72 of the Family Law Act 1975.
(As it was recorded)
Early in the hearing before me today, the respondent was alerted to a deficiency in the relief he prosecuted, being grounded from s 77 of the Family Law Act 1975 (Cth) (“the Act”). That section is relevant for litigants who have married and has no application for litigants seeking relief pursuant to Pt VIIIAB of the Act. Proceedings for urgent maintenance of a party to a de facto relationship that is terminated are grounded from s 90SG of the Act. The respondent sought and was granted, absent objection, leave to amend his relief as sought by deleting “section 77 and section 72" and inserting “section 90SG”.
In support of his relief the respondent relied on his affidavit filed 15 September 2022. That affidavit includes, by way of an annexure, his current Financial Statement. Quite properly, no objection was taken to the respondent relying on his Financial Statement filed in this way.
The applicant opposes the s 90SG relief as sought by the respondent. She relied upon:
(a)Her response to an Application in a Proceeding filed on 23 September 2022;
(b)An affidavit filed on 23 September 2022; and
(c)Her Financial Statement filed on 23 September 2022.
During the course of the hearing, a related affidavit of the applicant, also filed on 23 September 2022, was the subject of exchanges with both the respondent and the solicitor for the applicant. In those circumstances, applicant’s second affidavit filed on 23 September 2022 is also read for the purposes of this determination.
I advised the parties that for the purpose of this determination, I will read the respondent’s Financial Statement forming part of the annexures to his affidavit, but will not otherwise take into account any of the balance of the annexures to any of the affidavits relied upon by either the applicant and respondent unless I am directed to them in the course of submissions by reference to page number or paragraph, or I raise them in submissions, or they are tendered into evidence.
Both parties agreed to each such course.
Background
The applicant asserts a de facto relationship commenced with the respondent in mid-2007 and concluded in September 2019. The respondent asserts cohabitation commenced in mid-2010 and concluded in December 2016. The respondent’s position is that the parties continued to live under the same roof from late 2016 until the date of separation asserted by the applicant. There are no children of the relationship.
The applicant filed an Initiating Application in the Federal Circuit Court (as it was then) on 15 January 2020, seeking orders for property adjustment pursuant to s 90SM of the Act. She amended that Initiating Application most recently on 9 August 2022 seeking orders pursuant to s 90SM of the Act and no other relief. The applicant’s solicitor advised the Court last week that it is anticipated that her substantive relief will be further amended in accordance with the directions made listing the matter for trial on 20 September 2022.
The respondent by way of his Response to Initiating Application filed on 25 May 2020 also sought orders as to property adjustment pursuant to s 90SM of the Act, but in different terms than as sought by the applicant. He broadly sought that the applicant transfer to him her interest in a property at AA Street, Town F (“the Town F property”), being a property that he currently occupies, and that he refinance the existing mortgage secured upon the property into his sole name. He sought orders that he transfer his interest in G Pty Ltd to the applicant and otherwise sought a declaration that each party retain any property or superannuation they had in their respective possession or control. This would include, as identified later in these orders, a sum of approximately $200,000 that remains from the proceeds of sale of a property owned by the respondent at U Street, Suburb C, Victoria (“the Suburb C property”), sold in late 2020.
The parties each have interests in two corporations, being:
(a)G Pty Ltd (“G Pty Ltd”); and
(b)M Pty Ltd (“M Pty Ltd”).
These interests form part of the property of the parties for the purposes of any s 90SM adjustment. It seems to be uncontroversial that the respondent owns 66.6 per cent of the issued shares in G Pty Ltd and the applicant 33.3 per cent of those issued shares, and that the applicant holds 100 per cent of the issued shares in M Pty Ltd.
The respondent has instituted proceedings in the Federal Court of Australia in late 2020 claiming his oppression as a shareholder of the parties' corporate interests occasioned by the applicant. In addition to the applicant being a defendant in those proceedings, G Pty Ltd is the second defendant and M Pty Ltd the third defendant.
In early 2022 orders were made in the Federal Court transferring the oppression proceedings to the Family Court, as it was then. These proceedings are to be heard at the same time as the s 90SM dispute, each being listed for hearing commencing on 6 March 2023 in the Sydney rolling lists. The applicant, being one of the defendants in the transferred Federal Court proceedings, filed a response in that forum prior to transfer, identified as “a Response to Concise Statement”. This form of pleading appears to operate as a defence. Neither defendant corporation has filed a Notice of Address for Service or has appeared in this forum, that circumstance being noted for the purposes of the trial directions made on 20 September 2022.
Additional background of the disputes between the parties in these proceedings is identified in the reasons for judgement, Keir & Ramsay (2022) FedCFamC1F 362. As recorded in those reasons, substantial controversy exists between the parties as to the nature and value of their contributions at the commencement of their relationship, the use and application of the properties so contributed, their financial conduct during the period of cohabitation and their financial conduct in the shadow of their separation and subsequent thereto.
The Suburb C property, legally owned by the respondent, was sold in late 2020 and achieved a disposal value of $945,000. The settlement statement annexed to one of the applicant’s affidavits records that the property was unencumbered at the time of the sale. The settlement statement, by way of my rough arithmetic, appears to record proceeds of sale in excess of $940,000, less the value of any agent’s commission.
In late 2020, approximately one week after the completion of the sale of the Suburb C property, orders were made in the Federal Circuit Court injuncting $250,000 from the proceeds of sale to be retained in a trust account by the respondent’s solicitors. The balance of the proceeds of sale, being in the range of just under $700,000 were retained by the respondent.
The current property available for adjustment between the parties for the purposes of the hearing listed in March 2023 appears to be as follows:
(a)The jointly held Town F property, currently occupied by the respondent. The applicant contends that property is valued at $625,000, and the respondent contends its value is $450,000. It is agreed the value of the mortgage is approximately $405,000. Hence, on the applicant’s case there is approximately $220,000 equity in the property and on the respondent’s case, there is $45,000 equity;
(b)Approximately $200,000, being the balance of the Suburb C property proceeds of sale, held on behalf of the respondent pursuant to the aforementioned injunctive order;
(c)The applicant’s 50 per cent interest in a piece of real property recently acquired at DD Town, with an asserted value of $21,500;
(d)A small amount of savings of the applicant;
(e)A modest motor vehicle of the applicant;
(f)Each of the parties’ interests in G Pty Ltd, M Pty Ltd and X Pty Ltd; and
(g)A further entity held by the applicant, BB Pty Ltd.
The applicant, in accordance with my directions, has exhibited to her affidavit the most recent financial statements of G Pty Ltd as at 30 June 2018 and M Pty Ltd as at 30 June 2021.
The financial statement for G Pty Ltd as at 30 June 2018 records a loan payable as at that date on an unsecured basis to “shareholders”, valued at $649,911. The respondent contends that he is the shareholder who has loaned those funds to the corporation. He concedes, for the purposes of at least this determination, that G Pty Ltd does not have any assets available to materially repay such funds should they be called upon by the lender.
The 30 June 2021 financial statements of M Pty Ltd do not record what the respondent contends is a loan he has made available to that corporation in the sum of approximately $251,000. His case is that the financial statements for M Pty Ltd, as at 30 June 2017, recorded an unsecured loan payable to him in that quantum and that, in her capacity as the sole shareholder of M Pty Ltd, the applicant has caused that loan to be written out of the corporate accounts some time during the 2018 financial year, such that the loan is not recorded in the published financial statements for the entity as at 30 June 2018. That said, the respondent concedes that M Pty Ltd does not have assets available to materially repay or satisfy any demand made should that loan be called upon to be repaid to the lender.
On 23 May 2022 I made orders appointing a litigation guardian for the benefit of the respondent. That determination was made in circumstances where he became an inpatient in the N Centre at S Hospital from early 2022. He was discharged from N Centre in mid-2022.
On 20 September 2022 orders were made:
(a)Discharging the appointment of the litigation guardian for the respondent’s benefit;
(b)On a mandatory basis pursuant to s 102NA of the Act for the benefit of the respondent for the purposes of the forthcoming trial;
(c)Listing the substantive proceedings for trial over three days, as previously identified in these reasons, commencing in the rolling lists in Sydney on 6 March 2022.
The respondent’s contention as recorded in his affidavit that the parties’ de facto relationship terminated on 30 June 2016 creates a difficulty for the purposes of his current application. Section 44(5) of the Act specifies a time limitation for parties to a de facto relationship to apply for de facto spouse maintenance. That limitation, by way of the legislation, requires the application to be made within two years after the termination of the de facto relationship.
In these circumstances, it is necessary for the respondent to obtain a grant of leave to prosecute his relief pursuant to s 90SG of the Act by way of s 44(6) of the Act.
No such application for leave was made by the respondent. In those circumstances the Application in a Proceeding he filed seeking urgent spouse maintenance will be dismissed.
In the event I am in error by way of that determination, the evidentiary foundation of the respondent, in support of his application for urgent de facto maintenance in a lump sum of $50,000, is contended broadly by him to be that he is seeking the funds “literally to survive.”
He broadly contends in his affidavit evidence that he is unable to work. There is little objective or expert opinion evidence to support this contention. He gives affidavit evidence of not being engaged in employment since becoming an inpatient in early 2022. It is his evidence that he is receiving a “medical exemption from Centrelink benefits of $325 per week” and this will continue for three years.
He says, again absent expert evidentiary foundation, that he is “classified as medically unfit to operate heavy machinery for 36 months” and “given [he is] 61 years of age, it is most unlikely that [he] will work again.”
He gives evidence of contributing $77,000 in respect of mortgage payments for the Town F property for the period 25 September 2019 to 14 September 2022. He contends the minimum mortgage payment going forward is $2,300 per month.
The respondent contends he has a current credit debt of $49,000, saying he has $7,000 credit left before the card would be “maxed out.” In the course of submissions, he said that in “seven weeks’ time” he will be unable to continue to live on credit and that the house will likely be repossessed. He says that his financial circumstances are dire.
It is his proposal that the funds sought by way of urgent de facto spouse maintenance will be applied to meet forthcoming mortgage instalments. They will be applied to allow him to engage “suitable and competent legal representation” for the purposes that the matter is currently listed for trial and to reduce credit card debt and to meet the ongoing costs of his health expenses.
The respondent’s Financial Statement, attached to his affidavit, records a not dissimilar circumstance. There is some contention made as to the value of some of the items he has included by way of his reasonable periodic expenses as being implicitly excessive, such as $600 per week being spent on food for himself and no other dependent.
That said, most of the affidavit evidence of the respondent in support of his application for urgent de facto maintenance has little relevance to that application and is, perhaps, more appropriately directed towards matters to be determined at a final trial.
The applicant puts into issue the contention that the respondent is required to make any mortgage instalments at the current time. It is her evidence that the mortgage is in credit, or does not require payments until November of this year. He case is that in circumstances where the proceedings are listed for final hearing early next year, there is no material prejudice existing from an aggressive mortgagee.
The applicant submits, with some force, that, on the evidence before me, and for the purposes of this urgent de facto maintenance application, the respondent has failed in his disclosure obligations to even broadly account for the use and application of the large sum of monies he received less than two years ago on sale of the Suburb C property. It is to be remembered that this substantive portion of the sale proceeds were not the subject of any injunctive order. On one view, this deficiency alone would militate against an exercise of a de facto spouse maintenance discretion on an urgent basis.
The applicant puts into issue many of the alleged debts of the respondent recorded in his financial statement, including a Westpac MasterCard debt of $49,000 and a CC Bank loan of $47,000 together with what are identified as $234,000-odd in business debts. It is her case – and this appears controversial – that much of the debt of the respondent identifies relates to his corporate entity, X Pty Ltd, and he is not responsible for it personally. His personal debts are due to lawyers and there appears to be no immediate demand by the lawyers for payment of those debts on the evidence before me.
Importantly, the respondent, by way of his relief for urgent maintenance, implicitly seeks that the urgent payment of that support be sourced from either the applicant’s property or the applicant’s income. She submits that she has no capacity to pay an urgent lump sum from either her income or capital.
An important aspect of the construction of the respondent’s case can be illustrated in that he is, in reality, seeking a payment of funds of which he is the legal owner, being the balance for proceeds of sale of the Victorian property.
The law
It is essentially to identify the relevant head of power supporting orders sought. This is because it is the source of power that determines the necessary preconditions and the relevant considerations for making the orders sought. The identification of the source of power helps frame the order and determines what legal requirements must be met before orders will be made.
Section 90SG of the Act is in the following terms:
Urgent maintenance cases
If, in proceedings with respect to the maintenance of a party to a de facto relationship in accordance with this Division, it appears to the court that:
(a)the party is in immediate need of financial assistance; and
(b)it is no practicable in the circumstances to determine immediately what order, if any should be made;
the court may order the payment, pending the disposal of the proceedings, of such periodic sum or other sums as the court considers reasonable.
There are two preconditions to making an order for urgent de facto maintenance being:
(a)The party seeking such an order must be “in immediate need of financial assistance” and;
(b)It is not practical in the circumstances to determine immediately what order, if any, should be made.
There are a number of authorities of both the Full Court and first instance that direct the circumstances as to the exercise of discretion to make an urgent order for spouse maintenance pursuant to s 77 of the Act. They are equally applicable to de facto urgent spouse maintenance pursuant to s 90SG.
In Sadlier & Sadlier [2015] FamCAFC 130, the Full Court referred to the reasoning of Nygh J in Ashton & Ashton (1982) 91-285, saying:
Urgent maintenance orders are often referred to as “stop-gap” orders which are provided to assist with an immediate need of the spouse until a hearing can be set down for spouse maintenance orders pursuant to section 72 and 74 of the Act.”
In Malcolm & Malcolm (1977) FLC 90-220, Watson J said:
The purpose of an urgent order for spouse maintenance, pursuant to s 77 of the Act, is to provide emergency funding in most cases where the Court is unable to determine immediately what order should be made.
A number of other authorities record that applications for urgent maintenance have a particular characteristic of being applicable in urgent situations. Ordinarily, an order is for a defined or definable period of time in the nature of a “stop-gap” (see Chapman & Chapman (1979) FLC 90-671).
Most recently, in Hall v Hall (2016) 257 CLR 490 (“Hall”), the High Court said:
Unlike a Court exercising the power to make an urgent order conferred by s 77, a Court exercising the power to make an interim order under s 74(1) must be satisfied of the threshold requirement in s 72(1) and have regard to any matter referred to in s 75(2) that is relevant.
In other words, unlike the requirements of the Act in respect of an application for interim de facto spouse maintenance, an application for urgent de facto spouse maintenance is not required to satisfy any of the thresholds identified in the Act or any of the other considerations set out in s 90SF(2) of the Act. That is not to say, however, that, depending on the facts of the particular case, those considerations may well be relevant to the Court’s exercise of discretion in considering any application pursuant to s 90SG of the Act.
In Hall, the High Court confirmed, however, that, in considering an application for urgent spouse maintenance, it is necessary for the Court to be satisfied as to the following:
(a)An immediate need of financial assistance and;
(b)That it is not practicable in the circumstances to determine what order, if any, should be made and:
(c)Finally, if those criteria are satisfied, the Court must determine, generally – although not always – what periodic or lump sums are reasonable in order to satisfy that pressing or immediate need.
The duration of the order is an important matter to be considered. Most of the authorities identify that the period for urgent spouse maintenance is relatively short until, for example, there could be a hearing as to interim spouse maintenance.
The rules of Court set out very clearly that the provision, for example, of the mandatory documents identified for interim de facto spouse maintenance in r 6.06(9) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”), must be available at an interim spouse maintenance hearing. They are not necessarily required for the purpose of an urgent de facto spouse maintenance hearing.
In the circumstances of this case, I find that for the purposes of an urgent de facto spouse maintenance hearing, the broad assertive evidence of the respondent and his disclosure of failures as identified do not permit me to be satisfied that he has established an urgent or pressing need for maintenance pursuant to the section relied upon in a lump sum of $50,000. The identification of that source of power to, in reality, access the respondent’s own funds by way of a variation of an injunctive order cloaked as urgent de facto spouse maintenance, is wholly misconceived. Putting it another way, he is not seeking an order for payment of monies on an urgent basis from the property or resources of the applicant.
Further, I would not be satisfied, in the circumstances, that the limited income identified by the applicant in her Financial Statement, in the range of $535 per week, and her modest property, would present as a foundation to make a finding that she has any capacity to pay maintenance, whether it be on an urgent or an interim basis whether it be a lump sum or a periodic amount.
In those circumstances, even if the respondent had brought an application for interim de facto spouse maintenance, relying on s 90SE of the Act, I would have dismissed such application on the material before me today.
I certify that the preceding fifty-four (54) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice Campton. Associate:
Dated: 30 September 2022
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