LAGANA & LAGANA

[2019] FCCA 3862

FEDERAL CIRCUIT COURT OF AUSTRALIA

LAGANA & LAGANA [2019] FCCA 3862

Catchwords:
FAMILY LAW – Property – spousal maintenance Application – issues of ongoing lack of disclosure by the Husband – contested aspects involving child support but in circumstances where there is no formal Application before the Court.

Legislation:

Family Law Act 1975 (Cth), ss.72, 74(1), 75(2)(o), 77
Federal Circuit Court Rules 2001 (Cth), r.24.03

Cases cited:

Bevan & Bevan (1995) FLC 92-600

Chang & Su (2002) 170 FLR 244
Hall v Hall (2016) 257 CLR 490
Saxena & Saxena [2006] FLC 93-268

Applicant: MS LAGANA

Respondent: MR LAGANA

File Number: CAC 1995 of 2018

Judgment of: Judge Neville

Hearing date: 20 August 2019

Date of Last Submission: 20 August 2019

Delivered at: Canberra

Delivered on: 29 August 2019

REPRESENTATION

Counsel for the Applicant: Mr G Howard

Solicitors for the Applicant: Farrell Lusher Solicitors, Wagga Wagga

Counsel for the Respondent: Mr J Haddock

Solicitors for the Respondent: Walsh & Blair, Wagga Wagga

ORDERS

1. By way of spousal maintenance, the Respondent Husband is to pay the Applicant Wife, to a bank account nominated by her, the sum of $1,100.00 per week commencing immediately.

2. The parties shall attend a Conciliation Conference with a Registrar of the Federal Circuit Court on 31 October 2019 at 9:30am in CANBERRA.

3. The matter be adjourned for further directions to 14 November 2019 at 9:15am in CANBERRA.

4. The Registrar is requested to undertake a Compliance Check prior to the Conciliation Conference on 15 October 2019 at 3:16pm by telephone.

   (i)For the purposes of Order 4, each party is to advise the Registrar of the name and contact details for the legal representative or party attending the compliance check by e-mailing [email protected] no later than four days prior to the compliance check, being by 11 October 2019.

5. The parties must attend Court together with their legal representatives (if applicable), thirty minutes prior to the commencement of the Conciliation Conference, for the purposes of negotiations.

6. Each party must within 28 days of the date of these Orders, being by close of business on 16 September 2019:

   (i)Do all things necessary to provide full and frank disclosure to the other party including but not limited to complying with Rule 24.03 of the Federal Circuit Court Rules 2001;

   (ii)Serve on each other party copies of the relevant documents pursuant to Rule 24.04 of the Federal Circuit Court Rules 2001.

7. At least 21 days prior to the Conciliation Conference, being by close of business on 10 October 2019, the parties must:

   (a)Deliver to the Registrar conducting the Conciliation Conference by email at [email protected] the following:

   (i)A jointly prepared single balance sheet setting out all assets, liabilities and financial resources including superannuation that each party asserts are relevant to the determination of the matter and the joint balance sheet shall contain notes to explain the differences between the parties in relation to any disputed items.

   (b)Deliver to the Registrar conducting the Conciliation Conference by email at [email protected] and to the other side, the following:

   (i)A completed Conciliation Conference document being a document setting out the parties assertions as to:

   1.   The percentage share of the net asset pool to which they are entitled;

   2.   The respective contributions of each party to the net asset pool (expressed as percentages);

   3. Any adjustments to be made pursuant to section 75(2) of the Family Law Act 1975 (expressed as percentages);

   4.   The facts alleged by each party in support of each of the foregoing (set out as a summary in ‘dot point’ form); and

   5.   The Orders sought by each party which he or she asserts is just and equitable in all the circumstances.

   (ii)A written confirmation by each party or their solicitor that:

   1.   All relevant documents have been exchanged between the parties;

   2.   Rules 24.03 and 24.04 of the Federal Circuit Court Rules 2001 have been complied with; and

   3.   The superannuation trustee of any fund that may be the subject of a splitting Order has been accorded procedural fairness.

   (iii)Any other documents required for the Conciliation Conference.

   (c)In the event that the value of any real property, item of personality (such as art work), interest in superannuation or financial resource is not agreed the parties shall cause that item to be valued by a single Expert with the costs of such valuation to be shared equally between the parties, a copy of such valuation should be provided to the Registrar Conference by email at [email protected] at least 21 days prior to the Conciliation Conference, being by close of business on 10 October 2019.

8. No later than 3 days prior to the Conciliation Conference, a lawyer must give to their client a written notice setting out:

   (a)The actual costs and disbursements incurred by the party up to and including the event; and

   (b)The estimated future costs and disbursements of the party up to and including each future Court event.

9. If either party is in a superannuation plan that party forthwith make an application to the Trustee of the plan pursuant to Section 90MZB for information about the party’s interest in the plan and provide a copy of that information to the other party as soon as it is received.

10. In the event that either party intends to seek a superannuation splitting Order, that party is required afford the Trustee of the relevant superannuation fund/s procedural fairness in accordance with Section 90MZD of the Family Law Act 1975 (Cth) by:

    (a)Immediately after filing the Application, Response or Reply, serving a sealed copy of that document on the trustee of the eligible superannuation plan in which the interest is held, in accordance with Rule 24.07 of the Federal Circuit Court Rules 2001 (Cth).

11. In the event that one or either party contends the Conciliation Conference cannot proceed due to non-compliance, that party is to contact the Judge’s Associate for a listing prior to the Conciliation Conference if at all possible. The Conciliation Conference may be vacated.

12. Any Conciliation Conference fee must be paid as follows:

    (a)if the Conciliation Conference is listed less than twenty-eight (28) days after this Order, then the fee must be paid before the Conference commences;

    (b)in any other case, twenty eight (28) days prior to the Conciliation Conference; and

    (c)50% of the fee (unless reduced or waived) shall be paid by each party.

13. In the event that either party fails to comply fully with these directions, the Registrar may vacate the Conciliation Conference.

14. The solicitors comply with Rule 19.04 Family Law Rules 2004 (Notification of costs).

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT CANBERRA

CAC 1995 of 2018

MS LAGANA

Applicant

And

MR LAGANA

Respondent

REASONS FOR JUDGMENT

Introduction

1. On 29^th August 2019, the Court delivered detailed oral reasons and pronounced Orders regarding, among other things, an ongoing spousal maintenance dispute between the parties.  The matter has been on foot since the Wife filed an Initiating Application on 3^rd October 2018 seeking property Orders.  Until relatively recently, the parties have had no dispute regarding parenting matters.

2. For completeness I note the following as briefly as possible.

3. On 11^th December 2019, the Applicant Wife’s lawyer wrote to the Court to advise on matters relating to possible arbitration, which may or may not involve the Wife’s parents regarding the beneficial ownership of the A Road property.  The letter also noted an ongoing dispute over child support and possible enforcement proceedings of earlier Court Orders.  The Wife’s enforcement Application was filed on 11^th October and the Husband’s Response to it, on 11^th November 2019.

4. On 13^th December 2019, the Husband filed an Amended Response to an Application for Final Orders.  Notwithstanding an earlier consent position, for the first time in the proceeding, the Husband now seeks Orders (final and interim) in relation to parenting of the couple’s now 7 year old daughter, X.  He seeks to increase his time with X and ultimately to move to an equal time arrangement. 

5. In his supporting Affidavit filed at the same time, the Husband raised, among other things, the ongoing issue of child support, and the general distress of the child.  The child’s distress is hardly surprising not only because of the ongoing family law dispute but also because her Mother is now coping with treatment for cancer.  Stress is not, as far as I am aware, a recommended additional treatment for cancer – or most other medical conditions.  Sensitivities (or lack of them), and insight, abounds on so many fronts.  But such matters are not for immediate consideration because the Mother will need to file material in Reply to deal with the new parenting Application and the amended property Application proposed by the Husband.

6. In any event, in the letter from the Wife’s solicitors on 11^th December there was no mention of the need or request for written reasons that were delivered on 29^th August 2019.

7. A mere four (4) months or so after delivery of the Court’s reasons on 29^th August 2019, by letter dated 12^th December 2019, the lawyer for the Respondent Husband, without much explanation, requested that written reasons be provided.  No explanation was given for the delay and the almost casual or perfunctory manner of the request.  In terms, after noting the situation regarding possible arbitration, and the payments the Husband has made, the request simply stated:

   We request that his Honour provided [sic] written reasons for his Orders of 29^th August 2019.  That may resolve this matter for the parties without the need for a further interim hearing.

8. What precise “matter” was being referred to in the letter was not immediately obvious. 

9. Be that as it may, lest it not be clear, requests for written reasons should be, and are meant to be, made promptly.  Clearly, this has not occurred here.  Among other things, it is at least discourteous, accepting that such is clearly not the intention of either of the parties.  Further, one reason among many why such requests are meant to be made promptly is to allow the Court to make provision for the extra time required to accommodate such requests, amidst the constant demand to deliver [other] written judgments.  Given the scarce and always over-stretched resources of the Court, a significantly delayed request, such as the current one, places further burdens on the Court to try to find time (and much else) to accommodate it.  Among other things, it means that, having dealt with it back in August, and there having been no appeal or properly prompt request for written reasons, the Court (a) has, as it were, “moved on” to the immense load of ongoing other matters, and (b) now has to become sufficiently re-acquainted with the basal facts and circumstances, which were otherwise fresh in the mind of the Court at that time.  Four or five months later, hundreds of other matters have now intervened.

10. Further still, such a late request means that other scheduled work has to be delayed and re-calibrated.  Put another way, the flow-on effects of such a late request to other litigants is significant.

11. The improperly, flagrantly and [seemingly] languidly delayed request is a very significant impost on the Court’s already and always hugely stretched resources.  It is an improper indulgence and should not be, but will be, accommodated.  It must never happen again – for any reason.

Procedural impediments

1. In addition to the taxing, almost impertinent request, months after the event, for written reasons, there is the further insult to the Court as follows. 

2. By Orders dated 12^th June 2019, the parties were directed to file and serve an Outline of Submissions of no more than 2 pages in length. Neither party complied with this Order.  A bit like a Roman street sign, the Orders were treated as “mere suggestions.”

3. The Wife did provide the Court with an “Aide-Memoire”, which was filed in Court at the hearing on 20^th August 2019.

4. So, on the one hand, the parties did not comply with Orders (for unexplained reasons and without obvious penalty) that were designed to assist the Court to more readily and expeditiously deal with the matter.  On the other hand, the Court must now summon what it can to answer the extremely dilatory, insouciant “request” for written reasons.  One might be tempted to refuse the late-breaking request on the basis of the indolence or impertinence (or whatever unexplained reason there might be) that was shown to the Court back in August in not providing submissions as directed.

Background & further procedural history

1. On 12^th December 2018, the Court made orders by consent in relation to, amongst other things, spousal maintenance.  Those orders provided for the Husband to pay to the Wife spousal maintenance in the sum of $730 per week as well as to pay the mortgage payments on the B Road property, the Wife’s telephone costs, and private health insurance for the Wife and the daughter of the relationship.  The characterisation of certain other payments was to be left for another day. 

2. These December 2018 Orders also provided, amongst other things, for an interim property distribution of $5,000 and that both parties provide:

   …disclosure of all documents requested by the other party.

3. There was something of a revision or expansion of those Orders, by consent, by Orders made on 5^th April 2019.  Order 4 of those Orders provided, amongst other things, that the parties would jointly retain C Accountants to advise them in relation to:

   …the appropriate allocation of income to each of the parties from the Lagana Family Trust.

   This has not occurred to date.  There are no reasons given for this ongoing delay.

4. The April 2019 orders provided for a distribution of funds to both parties in specified amounts from an offset account, and for the balance from that account to be used to pay down the mortgage to the Commonwealth Bank of Australia (“the CBA”) over the B Road property.   

5. Both parties have filed Financial Statements.  In the Wife’s case, she filed an updating Financial Statement on 14^th August 2019.  The Husband’s only Financial Statement was filed on 11^th December 2018.  However, he has provided some updated financial information in his Affidavit filed on 3^rd April 2019.  Subject to what is said below, I need not, at this stage, rehearse relevant parts from those documents.  It is not explained why, on the Husband’s behalf, he did not simply file an updated Financial Statement.

6. In brief, the Wife’s first Financial Statement (filed 3^rd October 2018) deposed that she had weekly income of $1,496.00 and expenditure of $2,332.60.  The Husband’s Financial Statement (filed 7^th December 2018) deposed to weekly income of $4,255.00, and expenditure of $3,788.00.

7. In her Financial Statement filed 14^th August 2019, the Wife deposed that her weekly income had dropped to $1,037.20.  Her expenditure remained similar to the previous year, at $2,348.05.

Earlier case outlines

1. The now, somewhat dated submissions of the parties that were set out in their respective Case Outlines, were both filed 4^th April 2019.  These Case Outlines were filed prior to the Wife ceasing work due to her being diagnosed with cancer in July 2019. 

2. The Applicant Wife’s Case Outline was as follows (footnotes omitted): 

   APPLICANT WIFE’S SUMMARY OF ARGUMENT

   1.   This document has been prepared in relation to the interim hearing scheduled to occur on 5 April 2019. There are a number of interlocutory matters agitated by both parties. This document will focus on the major issues for determination.

   SPOUSAL MAINTENANCE   

   2. The wife seeks both interim and lump sum spousal maintenance. For an interim hearing “the evidence need not be so extensive and the findings not so precise” as on an application for a final order. Section 72 of the Act sets out the threshold requirement for spousal maintenance. In this case the wife’s capacity for employment is limited as a result of the care of the child of the relationship. In addition, the wife has been excluded from the business, which was the joint enterprise of the parties, since separation. The wife also ceased her tertiary education studies during the relationship in order to work in the business.

   3.   The wife’s income, for the purpose of the spousal maintenance application, should not include the child support to be paid (not currently being paid) by the husband. Nor should her expenses include the costs of the child. These have been excluded from the assessment of her expenses. The court should not too closely analyse her claimed expenses given the proceedings are interim proceedings.

   4.   In relation to the husband’s capacity to meet a spousal maintenance order, his own financial statement records a capacity of $437 of income over expenses (noting that his claimed expenses includes Child Support). In addition, he is not in fact paying the D Street mortgage or the B Street mortgage. In addition, there is no evidence before the court that the husband in fact is paying any amount to the ATO by way of anticipated future tax liability. On the contrary, the business is paying amounts to the ATO apparently on behalf of the husband and in addition to the amounts that he withdraws for his own use. This is an additional $1,695 available to the husband in excess of his income over his expenses.

   CHARACTERISATION OF ORDERS 1 & 2 MADE ON 12/12/2018

   5.   The husband claims that orders 1 and 2 of the orders made on 12 December 2018 should be characterised as child support. It is submitted that this could not be possible given that the court has no jurisdiction generally in relation to child support matters and, specifically, no current application in relation to child support before it. The court therefore has no jurisdiction to make an order in relation to child support at present. The order should be characterised as an order for spousal maintenance.

   INTERIM COSTS ORDERS

   6.   The wife seeks a lump sum and a dollar for dollar order in relation to costs. Addressing the Strahan factors, there are 2 possible sources of funds to meet a lump sum order. The husband has, in business and personal accounts, approximately $46,000. Alternatively, some part of the funds in the offset account could be applied for this purpose. The wife has very limited funds available to meet her legal fees. Evidence of her legal fees is set out in the affidavit of Ms E. The husband is clearly in a stronger financial position than the wife with his control of the company and his ability to allocate income as he desires. On even the broadest assessment of the wife’s entitlements it is likely that she would receive in excess of 50% of the pool.

   7.   In relation to the proposed dollar for dollar order, that would allow the wife to fund her legal expenses to the same extent as the husband has and will likely continue to do.

   DISTRIBUTION OF MONIES FROM TRUST

   8.   The income of the trust has allocated, for tax purposes, as to $149,000 to the wife and only $97,000 to the husband. The wife in fact received about $95,000 in the relevant period. The problems created by this artificial allocation of funds, at the sole control and direction of the husband, is twofold. Firstly, the allocation will likely create a tax liability for the wife in the future relating to monies that she has not received. Secondly, it will reduce the amount of the husband’s income for which child support is assessed. At present the CSA has not taken into account the paper distributions to the wife but it is possible that this could occur in the future.

   9.   The 2 alternatives set out in the wife’s orders are reasonable. Either there needs to be a payment to the wife of the difference between the actual allocation of funds in the paper allocation, or the tax return needs to be amended to reflect the actual distribution to the parties.

   SALE OF D ST PROPERTY

   10.    The husband proposes that this property be sold. There is no reason why this property needs to be sold on an interim basis. The property is tenanted and the rent paid meets the mortgage and other costs of the property. No proper basis is put forward by the husband as to why this property needs to be sold.

   TRANSFER OF FUNDS FROM OFFSET ACCOUNT TO MORTGAGE

   11.    The wife agrees to the transfer funds from the offset account to the mortgage secured over the B Road property. This is subject to the possibility that some of those funds could be transferred to her to meet her lump sum legal costs order.

   COLLECTION OF ITEMS

   12.    The wife denies that some of the items claimed by the husband are in her possession. This dispute will need to be determined at a final hearing.

   13.    The husband’s tools need to be valued. The husband does not suggest that there is an urgent need for him to have his tools. If the tools were valued and accepted at that value by the husband then the wife would have no difficulty in providing those tools to him.

1. The Respondent Husband’s Case Outline, filed on 4^th April 2019, was as follows:

   Spousal Maintenance

   1.   The 4 step process outlined by the Full Court in Bevan &Bevan (1995) PLC 92-600 is:

   ·   a threshold finding under s.72;

   ·   consideration of s.74 and s.75(2);

   ·   no fettering principle that a pre-separation standard of living must automatically be awarded where the respondent's means permit;

   ·   the discretion exercised in accordance with the provisions of s.74 with "reasonableness in the circumstances" as the guiding principle (Mitchell) 1995 19 FamLR 44.

   2.   On 3 October 2018 the Wife commenced the proceedings for interim spousal maintenance. On 29 March 2018 an agreement was reached in relation to the voluntary support to be provided by the Husband which included payment of the mortgage (para 41 W aff).

   3.    The Wife says she commenced proceedings seeking interim spousal maintenance as she "need the security of knowing that I will not be cut off financially at given time (sic)" para 49 W aff. She does not depose that she needed money for any particular purpose or was being deprived of money for any particular purpose. The Wife was employed at the time proceedings were commenced.

   4.   Nowhere in the Wife's affidavit does she set out the difficulties she has had paying for any of her living expenses. Nowhere in the Wife's affidavit nor in any annexure to the Wife's affidavit does she set out the basis for the estimate of her living expenses as set out in her Financial Statement. The Wife filed no updating affidavit evidence until 4 April 2019, the day before the interim hearing, being paragraphs 38 - 40 and she provided by email her updating bank statements also on 4 April 2019. The Husband is put in a very difficult position to meet the Wife's case in these circumstances. The matter had previously been set down for hearing in Wagga on 18 March 2018. That was vacated on 8 March 2018. No updating material or disclosure was provided prior to that.

   5.   Annexure B Page 15 of the Husband's affidavit is the only disclosure the Wife provided to the Husband until 4 April 2019. They are the Wife's bank statements that show for the period 13 March 2018 to 30 June 2018 that the Wife accumulated savings of $7,391.61.

   6.   The Court cannot be satisfied, given the complete lack of evidence from the Wife, that she meets the threshold test, given that the savings she accumulated prior of the commencement of the proceedings. Even if she did meet the threshold, given the lack of evidence of the Wife the Court is not in a position to determine what amount would be appropriate to adequately support the Wife. On any view it is less that the voluntary support agreed in March 2018.

   7.   This task is now made more difficult by the disclosure from the Wife for the first time on the day prior the interim hearing that she has commenced full time work and is earning $649.00 per week.

   Litigation Funding Costs

   8.   It is submitted due to the insufficiencies in the Wife's evidence the Court is not in a position to make any findings of fact to enable it to determine whether (a) the Wife is unable to afford her own legal costs, (b) what her legal costs are, (c) what her current and future legal costs are estimated to be or (d) what legal costs she is being charged or (e) what further legal issues and steps need to be conducted.

   Dollar for Dollar Order

   9.   In Atkins & Hunt and Ors [2018] FamCA 14 (18 January 2018) his Honour Justice Watts provides a useful summary of when this type of order is made. The making of a dollar for dollar order is a discretionary order that is usually made only as an order of last resort. Examples of circumstances which may attract the exercise of the discretion include:

   46.1 Where:

   46.1.1. The party who apparently controls significant financial purse strings pleads impecuniosity; and

   46.1.2. The financially disadvantaged party cannot point to any particular fund or asset that might be available to help assist that party fund their litigation; but

   46.1.3. The financially advantaged party seems to be able to fund their litigation through personal exertion income or structures that they directly or indirectly control (see for example, Zadenev & Zadenev [2014] FamCA 693 and Ryder & Bonham);

   46.2. Where a financially advantaged party is a minority shareholder in a company and/or a discretionary beneficiary in a trust and directors or trustees seem more than willing to declare dividends or make distributions to fund litigation for the financially advantaged party against the disadvantaged party;

   46.3. Where a financially advantaged party has relatives or associates who are prepared to fund the litigation against the financially disadvantaged party in circumstances where the financially disadvantaged party does not have the same support from third parties (Hurford &Hurford [2016] FamCA 328).

   10.    It is submitted that none of these circumstances apply this matter.

2. The “Aide-Memoire” of the Wife, filed in Court on 20^th August 2019, was in the following terms:

   Aide Memoire of the Wife

   1.   The Husband’s week to week income is taken from the Lagana Pty Ltd, F Bank business account #..31.

   2.   From the F Bank business account #...31 the Husband transfers the following monies, apart from the week to week expenses associated with the running of Business G:

   a.   $2500 per fortnight to the Australian Tax Office for account  #...60

   b.   Further amounts to the ATO which in the period 1 January 2019 to 31 March 2019 totalled $24,403.10

   c.    $3230 per fortnight to his personal H Bank account # ..81 for his wages

   d.   $5000 per fortnight to his personal CBA bank account #...23

   e.    The repayments of his personal F Bank Vertigo Visa #...33

   The last three months of banks statements disclosed for 1 January 2019 to 31 March 2019 are attached (pages 3 to 25) to show the relevant transactions referred to.

   3.   From the Husband’s personal H Bank Account # …81 into which his fortnightly wages from the business is paid the Husband withdraws $3000 in $1500 lots, per fortnight.

   The H Banks statements for the period 1 January 2019 to 31 March 2019 are attached to show the relevant transactions referred to (pages 26 to 27)

   4.   From the Husband’s personal CBA account #...23 into which the Husband deposits $5000 per fortnight he pays:

   a.   $730 per week to the Wife which he labels “X’s support”

   b.   $1500 per fortnight to a CBA transaction account labelled “I Transaction”

   c.    NRMA Home insurances of $160.24 per month and $132.73 per month and some rates

   The CBA statements for the period 1 January 2019 to 31 March 2019 are attached and show the relevant transactions referred to (pages 28 to 35)

   5.   The Husband also withdraws from the CBA account #...23 large cash sums of:

   a.   $7000 on the 20 December 2018

   b.   $5000 on 23 January 2019

   c.    $4482.03 transferred to an account unknown and undisclosed on 27 February 2019.

   6.   The Husband has a F Bank Vertigo Visa Card #...33. This card appears to pay:

   a.   Petrol expenses

   b.   Personal food expenses

   c.    J health insurance

   d.   Purchase of computer and furniture expenses at Harvey Norman

   e.    Other sundry expenses

   The Visa is repaid monthly by the CBA business account #...31.The F Bank Vertigo Visa Statements are attached for the period 24 December 2018 to 24 March 2019. (pages 36 to 44)

Ongoing issues

1. Despite the parties agreeing in April 2019 to attend private mediation, this has not yet occurred.  The Wife says that the main reason for this delay is because the Husband has still to provide full and complete disclosure, notably of his liability or credits, as the case may be, with the Australian Tax Office (“the ATO”).  Bank statements up until March 2019 have been provided, which confirm a series of payments to the ATO, but whether this is to discharge a liability, or to increase any relevant credits, is unknown.

2. The Wife says that she has requested regularly, and even very recently, access to the ATO Portal from the Husband.  This has not occurred.  As with many things in this matter, this is not explained. 

3. A further issue of some dispute, difficulty and apparent aggravation for the parties relates to child support.  It was not disputed by the Husband’s Counsel that there is an existing child support debt of a little over $6,000 or thereabouts.  Part of the immediate dispute relates to whether the December 2018 Orders regarding spousal maintenance included a component of what would or should otherwise be child maintenance payments.

4. In this regard, Counsel for the Wife properly, in my view, noted that this Court was without an Application regarding child support and was thereby without jurisdiction in the current proceeding regarding this aspect of the matter.  Therefore, in the Wife’s submission, it was not apposite to raise any matter that involved a determination regarding child support.

5. A final and late-breaking factual issue (noted earlier in these reasons) is that the Wife has been diagnosed with cancer.  From medical evidence recently filed, she expects to be undergoing treatment for between the next nine to 12 months.  For the purposes of her spousal maintenance Application, properly and fairly, the Husband has conceded that the first step in such applications of establishing “need” has been met in the current circumstances.  Respectfully, he could hardly do otherwise.

6. As outlined in the case of Bevan, and many other cases since, and in the light of the threshold issue of need under s.72 being conceded, to speak generally, the following matters require consideration:[1]

   (a)The relevant parts of ss.74 and 75(2);

   (b)without fettering the discretion to be exercised and subject to the respondent’s means, and;

   (c)of the pre-separation standard of living.

   [1] Bevan & Bevan (1995) FLC 92-600.

7. It is appropriate to make some general reference to the most recent High Court discussion of maintenance applications.  Somewhat curiously, there was no reference to it in any of the submissions.  In any event, in Hall v Hall the majority judgment stated the following general principle.[2] First, for an urgent maintenance termination to be established under s.77 of the Family Law Act 1975 (“the Act”):

   It must appear to the court that a party to the marriage is in immediate need of financial assistance.

   And it must be:

   [2] Hall v Hall (2016) 257 CLR 490.

   …practicable in the circumstances to determine immediately what order, if any, should be made. 

8. Once established, the Court has power to order the payment, pending the disposal of the proceedings, of such periodic sum or other sums as the Court considers reasonable.

9. Next the High Court said that 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 must be satisfied of the threshold requirement in s.72 - which I have already addressed – and must have regard to any matter referred to that is relevant. Although the evidence need not be so extensive, and the findings not so precise, as on an Application for a final Order, there is nothing to displace the applicability to an exercise of the power conferred by s.74 of the ordinary standard of proof in a civil proceeding.

10. At [57] in Hall, the High Court went on to hold that section 75(2)(o):

    …extends to any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account as showing that a party to the marriage is or is not able to pay spousal maintenance or is or is not able to support himself or herself. 

11. Earlier, at [54], the Court commented on what constituted a “financial resource” for the purposes of s.75(2)(b), and the long-time jurisprudence on that subject.  The Court said:

    The requirement that the financial resource be that “of” a party no doubt implies that the source of financial support be one on which the party is capable of drawing.  It must involve something more than an expectation of benevolence on the part of another.  But it goes too far to suggest that the party must control the source of financial support.

12. The final point of principle to highlight in the current matter relates to the ongoing duty of complete disclosure. 

13. Rule 24.03 of this Court’s Rules prescribes that duty. The consequences of not complying with it are set out in many cases. It is sufficient to refer to the Full Court’s comments in Chang & Su.[3]  In that case (at [67] – [70]) the Court referred to:

    A court being less constrained in making orders in favour of the innocent party in circumstances where the one party had not sufficiently or properly complied with the duty of strict and complete disclosure. 

    [3] Chang v Su (2002) 170 FLR 244.

14. In the circumstances here of an interim application, I cannot and do not make any relevant findings.  At its highest, it seems to me I can observe however, as already noted, that there are significant gaps in the Husband’s evidence and in his disclosure.  This is so despite repeated requests by the Wife’s lawyers for the Husband to provide specific information regarding, for example, access to taxation records.  The reason, or reasons, for the lack of disclosure have again not been explained, save for a less than detailed comment during argument by the Husband’s Counsel that everyone had been “deluged” with paper.  Whatever the nature and extent of that “deluge”, unfortunately there appears to be still a significant number of parched areas where the deluge has not sated the relevant ground of disclosure.

15. Very summarily stated, as argued, the Wife’s position was that:

    (a)The Husband’s Orders sought would, in fact, reduce the amount payable to her from the amount agreed upon in December last year;

    (b)It is improper for the Husband to characterise the payment of the mortgage over the residence in which he lives as being part of the consideration of her spousal maintenance;

    (c)The last bank statement provided by the Husband was in March 2019, which shows significant payments to the ATO, but with no other detail;

    (d)The Husband has an approximate $6,000 debt to the Child Support Agency, and;

    (e)The Husband has total control over the assets for the parties, including the distribution (notational and actual) from a trust, which in turn has tax implications for the Wife.

16. In response to a challenge by the Husband, the Wife says that her entertainment expenses are modest, and that the care of animals is likewise (plus the parties’ daughter uses one of the animals in question).  In my view, these matters come reasonably within the area of consideration of standard of living, to which the Court must pay relevant attention. 

17. Summarised, the Husband said that because of all the various payments in relation to mortgages over the parties’ properties, he simply cannot afford to pay the Wife anything more in spousal maintenance.  He says that he does not have the relevant capacity to pay and, further, that what is currently being paid for constitutes what is appropriate in all the circumstances. 

18. He also confirmed that, for example, because of how stretched his funds are, the F Bank overdraft has not been paid for two months because he cannot afford it.

Disposition

1. Now that the threshold issue of need has been conceded, the Court’s concerns and focus must necessarily be on questions of capacity and what is appropriate to pay in all of the circumstances.  This is also in the context of the principles to which I have earlier referred, including the Husband’s lack of disclosure regarding his payments to the ATO.  This acknowledged lack of disclosure comes readily within the principles outlined by the Full Court in Chang v Su and the flexibility of the Court in dealing with financial matters where there is such delinquency.

2. For more abundant caution, I remind myself of the comments or principles outlined by Coleman J in Saxena.[4]  With characteristic succinctness, his Honour noted the following four basic steps:

   (a)To what extend can the Applicant support herself?

   (b)What are the Applicant’s reasonable needs?

   (c)What capacity does the Respondent have to meet an order, and;

   (d)If these steps favour the Applicant, what order is reasonable, having regarding to section 75(2)?

   [4] Saxena & Saxena [2006] FLC 93-268.

3. Given what I have already said, to the factors referred to by Coleman J in Saxena, in my view is the important consideration of the ongoing inability or refusal by the Husband to provide complete and ongoing financial disclosure to the Wife.  It is relevant to the issue of capacity.  It is relevant to other things too, including, of course, compliance with the Court’s Rules.  Why there is such an ongoing issue about a basic procedural requirement is staggering.  If it continues, as it has done for a significant period of time now already, there is a not insignificant risk of adverse consequences for the Husband.  It is needless, unaccountable, and unexplained obstruction.

4. Not only is the lack of disclosure a significant concern, but (as just mentioned) equally so is the lack of explanation for it.  Why there have been no bank statements since March was not explained.  Why there has been no information regarding the Husband’s situation with the ATO also remains unexplained.  In my view, these are very concerning gaps in the evidence before the Court.  There may be simple and straightforward explanations, but I am not aware of them.  I am concerned also because the Husband complains regularly that he cannot afford to pay spousal maintenance to the Wife, at least in the amounts sought by her. 

5. A party cannot, on the one hand, complain about Orders made to pay spousal maintenance because of some incapacity, but on the other hand, deny to the Court and to the other party, the necessary and ongoing disclosure of financial records to support such a claim.  In circumstances such as those currently on display, where there is an ongoing deficit of disclosure, the consequences as outlined by the Full Court in Chang v Su must apply.

6. In all of the circumstances, including having regard to the consent Orders last December where the Husband agreed to a spousal maintenance Order, which provides for the Wife to receive $730 per week, in my view, until further Order, the Husband shall pay the Wife a sum of $1,100 per week in spousal maintenance.  This figure excludes any mortgage or health insurance payment. The focus of the Court is on spousal maintenance, not mortgage or any other payment.

7. I will make the Order in relation to the Conciliation Conference date that has previously been discussed for 31^st October at 9.30 am.  The matter will come back before me, obviously absent settlement or other resolution, on 14^th November at 9.15am with everyone being able to attend by telephone.

I certify that the preceding fifty-one (51) paragraphs are a true copy of the reasons for judgment of Judge Neville

Associate: 

Date:  25 February 2020