Lambton and Lambton

[2017] FCCA 1744

FEDERAL CIRCUIT COURT OF AUSTRALIA

LAMBTON & LAMBTON [2017] FCCA 1744

Catchwords:
FAMILY LAW – Interim spouse maintenance pending hearing of an appeal.

Legislation:

Family Law Act 1975, ss.72, 75(2)

Applicant: MS LAMBTON

Respondent: MR LAMBTON

File Number: SYC 212 of 2015

Judgment of: Judge Henderson

Hearing date: 5 June 2017

Date of Last Submission: 5 June 2017

Delivered at: Sydney

Delivered on: 8 June 2017

REPRESENTATION

Counsel for the Applicant: Mr Gould

Solicitors for the Applicant: Pigdon Norgate Family Lawyers

Counsel for the Respondent: Mr Williams

Solicitors for the Respondent: Barkus Doolan

ORDERS

1. The husband is to pay to the wife $400.00 per week by way of interim spousal maintenance.

2. The payments are to cease upon the wife obtaining employment.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYC 212 of 2015

MS LAMBTON

Applicant

And

MR LAMBTON

Respondent

REASONS FOR JUDGMENT

1. This is an application by a wife for interim spousal maintenance and final maintenance. Mr Gould of counsel acted for the wife, and Mr Williams of counsel acted for the husband. The husband opposes the application.

2. The evidence I read for the wife was:

   a)An application filed 7 April 2017;

   b)Affidavits sworn 3 March 2017 and 1 June 2017; and

   c)Financial statement sworn 30 March 2017.

3. The wife tendered two exhibits:

   a)The first was bank loan documents completed by the bank in respect of the husband obtaining a loan to comply with Justice Rees’ orders of 15 February 2017; and

   b)The second a loan application document completed by the husband.

4. For the husband I read:

   a)His response, affidavit and financial statement filed 1 June 2017 and a case outline prepared by Mr Williams.

5. Each party asked that I read Justice Rees’ decision of 15 February 2017. The wife has appealed that final decision. The final decision her Honour delivered was both as to parenting and property. The wife’s application was to relocate with the parties’ daughter X, born (omitted) 2013, to (country omitted), where her family live, for property division and an order for spousal maintenance.

6. Her Honour denied the mother’s application to relocate the child’s residence to (country omitted), made an order for property division and gave the wife an order for spousal maintenance for a period of three months, being the time between Her Honour’s judgment and the time when the husband was to pay a capital sum to the wife in compliance with the property orders.

7. X is four years of age, and she will spend four nights a fortnight with her father, being one night in one week and three in the other week, and ultimately, by the end of July, five nights a fortnight with her father. X is progressing well, and she has a strong and attached relationship with both her parents. Her mother is her primary carer.

8. Initially, the father is to share the cost of X travelling overseas twice a year with her mother should her mother wish to go to (country omitted) to visit her family. There are orders for school holiday time and the like.

9. In addition to the capital sum to be paid to the wife which her Honour determined was some $656,288, and a superannuation split, the husband is to pay to the wife 60 per cent of the net value of (omitted) shares which are to vest in him in November and December of this year.

10. The net calculation of that is around $24,000 odd to the wife and some $16,000 to the husband. The order for spouse maintenance was at $1361 a week. The husband has complied with all of her Honour’s orders, and he pays child support for his daughter at $400 a week, well in excess of what he would pay if there was a child support assessment.

11. The wife seeks a continuation of a maintenance order pending further order of the Court. I note that the Full Court has the power to deal with this issue as well as any other Court the matter may be remitted to. The wife seeks both a final and an interim order in relation to maintenance. I am only dealing with the interim issue today.

12. The husband’s case is this. The issue of maintenance was dealt with to finality in Her Honour’s judgment of February 2017. The wife has the onus to establish a proper basis to satisfy me that she comes within the threshold of a spouse requiring maintenance under section 72 of the Act[1]. That section is as follows.

    [1] Family Law Act 1975 (Cth), s 72.

    72(1):A party to a marriage is liable to maintain the other party, to the extent the first-mentioned party is reasonably able to do so, if and only if that other party is unable to support herself or himself adequately, whether

    (a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years,

    (b) by reason of age or physical, mental incapacity for appropriate gainful employment, or

    (c) for any other adequate reason, having regard to any relevant matter referred to in subsection 75(2) of the Act.

13. Going to 75(2) of the Family Law Act1975 (Cth). I say the relevant factors in this matter are these:

    a)(2)(a), “the age and state of health of each of the parties”;

    b)(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”;

    c)(c) whether a party “has the care or control of a child of the marriage” who has not attained the age of 18 years;

    d)(g) where the parties have separated or divorced, a standard of living” that is reasonable in all the circumstances;

    e)(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration”;

    f)(n) the terms of the orders “ made by her Honour, which I have read onto the record

    g)(o) “any fact or circumstance which in the opinion of the Court the justice of the case requires to be taken into account”.

14. I say these are the relevant section that I am bound to apply in this decision.

15. The wife’s evidence, the husband asserts, would fail to satisfy the Court that she is unable to support herself adequately by a reason of having care of the child or a physical or mental incapacity for appropriate gainful employment or for any other adequate reason. However, properly, the husband’s counsel submitted that even if I was satisfied the wife fulfilled the threshold test; the husband now has no capacity to pay maintenance for his former wife’s support.

16. Looking at the evidence on the threshold issue. The wife has received a capital sum, superannuation, which does not presently assist her to support herself at this stage, will receive about further $24,000 towards the end of the year and the husband pays $400 in child support. The wife is not working, and has not worked since 4 November 2016.

17. The wife has put some $400,000 of her capital sum into an interest-bearing account and receives about $115 a week interest. The wife paid various debts, totalling, as best I can work out, given that some of them were in (currency omitted), $50,000 to $60,000 thousand dollars as set out at paragraph 5 of her affidavit. The wife then put $33,000 into an everyday living account to support herself and her daughter.

18. Her income is, for my purposes, $115 a week, interest only. The wife receives $400 for child support, but that’s what that is: child support and $218 family tax benefit A and B, which under the Act[2] I cannot take into account as income. The reality is the wife’s income is $115 per week, being the interest payments she receives from her capital sum.

    [2] Family Law Act 1975 (Cth).

19. The wife is a trained (occupation omitted), has worked in (employment omitted) and the wife has worked in that position prior to and “post” the marriage. The wife, as I said, has not worked at all since November 2016.

20. At the hearing before Justice Rees and I go to paragraph 46 of her Honour’s reasons – the wife admitted in cross-examination she had been a (occupation omitted) for 15 years; she was familiar with the clinical signs of depression and knew what symptoms to report in order to secure a diagnosis of depression.

21. At paragraph 49 – she was able to earn about $100,000 in Australia if she worked full-time. She agreed that the father and X’s paternal grandparents were willing and able to assist her to care for X while she worked and that she could work on weekends or at night if she wanted to. At paragraph 50 the mother said she had earnt $50,000 working only two days each week up to 4 November 2016, and those earnings included some benefits.

22. At trial, the wife relied upon a psychiatric report as to her emotional state and functioning prepared by Dr R. That report was relied upon and formed part of her Honour’s judgment. The wife had been referred to Dr R in 2014 due to the marriage breakdown and was put on a course of medication. She saw him regularly in 2015, and by 23 March 2016, Dr R says:

    At the moment, she is sleeping well, her mood is reasonable and she’s engaging well with X. However, the predicament –

23. Dr R talked about the predicament being the wife’s desire to return to (country omitted) and the upcoming Family Law proceedings:

    …is weighing heavily on her and the outcome before the Family Court is weighing on her heavily.

24. This is found at paragraph 62 of her Honour’s judgment. At paragraph 63 of her Honour’s judgment, she refers to a report of Dr R of 27 April 2016:

    I’ve diagnosed her with an adjustment disorder with depression, anxiety in relation to her predicament of separation from the father and living in Australia without major supports, who are in the (country omitted).

25. By 8 July 2016, Dr R says the mother was struggling. This is at paragraph 65. This was around the time that the family report assessment carried out by Mr P was taking place. The mother’s symptoms were interrupted sleep, decreased appetite, anxiousness. She had lost weight. “Feels she is stuck in a cycle of poverty and lacks control of her life in Australia.”

26. By 25 October 2016 – this is at paragraph 67 of her Honour’s judgment – Dr R says:

    The mother is struggling, balancing work, caring for her child –

27. His recommendation was that she stop work until the case was over, which indeed she did.

28. Paragraph 68 of her Honour’s judgment, Dr R says:

    If the mother remains in Australia, she would still probably be able to provide for X, although her adjustment disorder and  depression would continue having regard to her predicament.

29. At paragraph 69 and paragraph 70 of her Honour’s judgment – Dr R is reported as saying:

    I’m confident the mother will continue to care well for X no matter what the outcome of the Family Court hearing is.

30. Her Honour noted Dr R did not resile from that statement under cross-examination.

31. Dr R said in his report, at paragraph 69 of her Honour’s judgment:

    The ongoing stress and worry financially, worry about her family and pressure of the full responsibility of the care of X is likely to gradually wear her down. She’s likely to have a chronic adjustment order with depressive symptoms, but in the long-term she could find the situation overwhelming, which would impact on X. She’s strong and capable, and she continues to be a healthy, competent parent, but she would find adjustment to life of living in Australia a major challenge and at a great cost to her personal wellbeing.

32. At paragraph 76 of her Honour’s judgment, Dr R said the mother’s mental state had gradually deteriorated “over the past 12 months”. He conceded his assessment relied heavily on the mother’s self-reporting. This was his oral evidence that her Honour was summing up.

33. At paragraph 80, her Honour said that Dr R conceded it was possible the mother was presenting her history in a way to garner advantage from her therapy with him and it was possible she was editing her history to achieve her aims. There was an issue about the closeness, that is, the father cavilled with the mother’s position that she had a close relationship with her family. The father would say it was anything but close and was not a close relationship.

34. Dr R said at the heart of his support for relocation was his assumption that the mother’s difficulties would be ameliorated by returning to the (country omitted), but if her relationship with her parents was as described by Ms T and not as he presumed, that could change the situation quite for the mother and child.

35. Thus there was some issue about the mother’s reporting of the true reality of her relationship with her parents.

36. Paragraph 84 of her Honour’s judgment, she reported Dr R said:

    I expect her condition may not resolve immediately if she was allowed to go to the (country omitted) but would improve in the (country omitted).

37. At paragraph 85:

    But finalisation of the litigation would be beneficial to the mother’s condition and she would experience some relief.

38. At paragraph 88:

    Resolution of the property proceedings if she were to receive financial security would assist her to a degree but would not address her social isolation and lack of family support.

39. Mr P’s report was referred to by her Honour and at paragraph 100, where he described the mother’s presentation to him:

    Given she seems often feeling flat, pre-occupied, depressed, it suggested the mother would find X’s demands for a safe haven challenging and tiring. It would be likely that at such times, X would sense this and experience her mother is disconnected from her and likely to escalate demanding behaviours in a bid to reconnect with her mother. She might also experience her mother’s disconnection from her as a rejection.

    Mr P’s view was the mother tries hard to override her own emotional discomfort when X’s need for a safe haven is evident, but it is extremely difficult to disguise parental emotional discomfort from young children and it’s the writer’s opinion that the mother, when she’s not stressed or pre-occupied, has the capacity to be in tune with X’s emotional needs. There is some issues about X acting out and presenting with challenging behaviours in her mother’s care.

40. At paragraph 113, Mr P is reported in his oral evidence to say:

    If the mother’s condition worsened and she moved to a major depressive illness, there is an elevated risk that X would have significant psychological problems later in life.

41. At paragraph 119, Mr P said:

    The worst alternative for X is to live with a primary attachment figure who is depressed, be it in Australia or the (country omitted).

42. At paragraph 228 and going now to the father’s income, as described by Justice Rees her Honour states this:

    The husband works as a (occupation omitted). In the financial year ended 30 June ’16, his salary was $220,000. He received an incentive bonus for 2015 of $125,000 gross, about $62,000 net, and a long term incentive in deferred shares of $38,000, giving a total gross income of $483,000.

43. He received cash of $62,000 and shares from his bonus:

    In December 2016, he received his 2016 bonus of net $58,000, which would be accounted for in his 2017 tax return.

44. Paragraph 229:

    There is no suggestion that the husband will not continue to receive a similar level of remuneration.

45. Her Honour found that the mother had an earning capacity, this is at paragraph 230, as a (occupation omitted), and that she currently earns $70,980 and that if she was working full-time, she could earn about $100,000. Her Honour accepted that her commitments to care for her child may have an impact upon her earning capacity. Her Honour noted:

    The husband’s income is almost five times greater than that of the wife.

46. Her Honour noted at paragraph 232:

    At the present time, the wife’s ability to work is affected by her health. She has been diagnosed with depression and at the time of the trial had been on sick leave since 4 November 2016. She deposed that her sick leave, annual leave and long service leave would be exhausted on 8 January 2017, when she will have no income from employment unless she returns to work. She has little option but to do so.

47. It was submitted to me that the last sentence meant that her Honour said the wife had to return to work. I do not agree with that, necessarily, as being what her Honour meant, rather if the mother wants income, she must return to work, because she has run out of her sick leave. That is how I read that particular paragraph.

48. Her Honour found that the disparity in income required a 15 per cent adjustment of the property pool to the wife.

49. In relation to the spousal maintenance order, her Honour dealt with that issue at paragraph 243.

50. Her Honour said that the husband agreed he should continue to pay a contribution towards the wife’s rental cost until he has paid her the whole of the lump sum she was to receive pursuant to the order. He was currently pays $803 per week and to that extent, she met the threshold under section 72[3] and it was conceded by the husband’s counsel that it would be open to the Court for the Court to order that the husband pay spousal maintenance for a period of three months. Her Honour found with her capital sum and that she would have the ability to work, an order for spouse maintenance in the sum of $1361 to be paid for three months was made.

    [3] Family Law Act 1975 (Cth), s 72.

51. The question for me is what is the state of the evidence in relation to the wife’s capacity to work, because she has not worked since 4 November 2016.

52. Going to paragraphs 13 to 17 of her affidavit of 1 June 2017, the mother gives evidence of her attempts to work since the decision. The mother tells the Court that on 24 March 2017, she joined the (employer omitted) at (omitted) which offers employees shifts at the (employer omitted) as they arrive. That she has been offered three shifts, Friday, 24 March, in the (department omitted), 29 April 2017, in the (department omitted) and Saturday, 6 May 2017 in the (department omitted).

53. The mother says she has not felt she is in a position to accept the shifts for the following:

    The (employment omitted) is a busy (department omitted) that requires dealing frequently with (omitted). It requires me to deal with (employment omitted). It is (omitted) and I would not be able to adequately carry out my responsibilities.

    The (department omitted) is a (omitted).

54. These are the only positions she says she has been offered and she says she cannot work on those (departments omitted) due to how she is feeling. The mother sets out her health at paragraph 22 of her affidavit, where she says:

    On the advice of Dr R, she has increased her dosage of Prozac. Temazepam stays the same.

55. The mother describes what she and X do. They mostly stay at home, or go the park and visit. She does not feel comfortable with groups or talking to people:

    I try and avoid people. If people ask about my personal life, I leave it. The father continues to spend time with X. The paternal grandparents frequently assist with pick-ups and drop-off.

56. The mother says she feels isolated. For example, on Mother’s Day no card came from X or notification of her being the mother. X is only four years of age and this would have been something that the father would have had to assisted the child to do, and the mother says that has further increased her sense of unhappiness.

57. Going to her earlier affidavit of 30 March 2017, at paragraph 16.1, the mother talks about the reduction in her standard of living since the marriage broke down and post the property settlement and the decision of her Honour.

58. X is not currently enrolled in any extra-curricular activities. She did have (hobbies omitted) lessons and she and X previously went to the movies. They do not. They eat dinner at a restaurant or have takeaway once or twice a week and coffee and/or lunch with friends about twice a week, go to the park, and do activities which cost minimal amounts of money. I see no inconsistency with paragraph 16.3 and paragraph 24 of the mother’s affidavit of 1 June as it was put to me. There are many descriptions of what the mother does. It is a low key lifestyle, to put it mildly.

1. The mother describes her costs for the rental property. Her taxable income in 2016 was actually $50,089, not as described by her Honour in her judgment and she gives her employment history at paragraph 27, and describes the history of her work since the breakdown of her marriage. There is no doubt, as was described in her Honour’s judgment and as is described in the mother’s affidavit of March 2017, the breakdown of the marriage and the litigation has taken a heavy toll on the mother’s mental health and functioning.

2. All her leave entitlements are now exhausted. The mother was not performing at work, as she says in paragraph 31 of her affidavit. She had a car accident where she was at fault, because she says she is just simply not focusing on things, due to her level of functioning. She never had these issues up until the breakdown of the marriage. She describes the medication she takes at paragraph 35, which is medication for depression, Prozac and Temazepam. She found the trial difficult. The outcome was upsetting, and she continues to attend on Dr R.

3. She is unable to maintain an eating or sleeping pattern. She has lost significant weight, is finding it difficult to get out of bed, and she describes X being resistant and she does not cope with her all the time. For example, asking her to brush her teeth. Matters raised in the family report by Mr P, that is, the mother is disassociated with the child, perhaps are evident here.

4. The mother does not have many friends in Australia.

5. At paragraph 41 she says she is very worried about her financial position. She is unemployed and describes the husband’s income.

6. I have not referred to the report of Dr R in the mother’s affidavit of 1 June 2017. I accept it is unsafe for me to do so, as I am unable to ascertain the basis or the evidence upon which he gives his expert opinion and therefore, I have not read it or used it. However, I do not accept the submission that there is no evidence, or insufficient evidence, to support the mother’s assertion that she is, at present, unable to work due to her mental health capacity or her emotional functioning due to her health.

7. The evidence, as I see it, is ample, and the evidence today in her affidavit of 1 June and 30 March is merely a continuation of the evidence which was before her Honour at trial. The completion of the trial has not assisted the mother and, in fact, compounded the wife’s depressive state. She has continued to be unable to work and the reality is that the proceedings have not yet finalised because there is an appeal pending. I accept the mother has filed the appeal, but the proceedings have not finalised because of that appeal.

8. Therefore, the factors and matters that Mr P and Dr R talked about, the mother feeling better when the trial was over, the mother feeling better with financial stability, the mother feeling better knowing the result, have not come to pass because the mother has filed an appeal and her financial stability is not assured, given her circumstances and the costs that she incurred prior to the trial, and that she has effectively about $400,000 left of that capital sum.

9. It was clear to me, in her Honour’s judgment, that she believed the wife fulfilled the threshold test under section 72(2)[4] at that time and she made an order for maintenance for three months. That is now, as I see the evidence, an inadequate period of time for the mother to recover from the effects of the breakdown on the marriage, the consequence of the proceedings, and now that those proceedings are continuing. I am satisfied the wife is at present incapable to engage in appropriate gainful employment due to her health and her emotional state and that under the provisions of section 75(2)(c) of the Act[5], any other adequate reason that I see in the evidence is that these proceedings which have caused her so much stress are continuing by virtue of the appeal that she has filed.

   [4] Family Law Act 1975 (Cth), s 72(2).

   [5] Family Law Act 1975 (Cth), s 75(2)(c).

10. All the matters accepted by her Honour at trial in relation to the mother’s incapacity to work continue today and have been presented to me in a format that I find is cogent and reasonable and has reached a threshold and that the filing of that appeal is, as I see it, a further adequate reason, let alone my finding today that she is unable to work due to her mental incapacity for appropriate gainful employment at this time.

11. When I look at the relevant 72(2)[6] factors, as I must, the evidence of incapacity is further satisfied pursuant to section (2)(a), her health, (b), her income and financial resources of each of the parties, the care and control of X primarily, commitments to support X primarily, and the fact that her income today is $115 per week.

    [6] Above, note 3.

12. The wife’s emotional health is a significant disability at present and it does prevent her from working. The question for me now is what is the husband’s capacity to pay towards her needs?

13. Given he has re-financed and borrowed some $796,000 to pay out the capital sum to the wife and to assist him to pay the $400 per week maintenance for his child, I accept his outcomes have increased. His necessary commitments to support himself have increased since her Honour’s decision and his financial position is rather different today than it was at the trial.

14. Going to his financial statement, I do not allow, under part N, the matters for his personal needs, what we might call discretionary expenses, as they appear at page 11and as follows.

15. Repairs on the house at $40.

16. Children’s activities of $50.

17. Holidays $140.

18. Cleaning $40.

19. Gardening $15.

20. Gifts $70.

21. Charities $40 which totals $430.

22. Taking $430 off what he says are his commitments to support himself, gives him discretionary expenses, not fixed expenses, of $751.

23. Going to his fixed costs.

24. His income is $5671.17 with expenditure both fixed and discretionary of $6644.34 weekly.

25. The shortfall on his own financial statement is about $1000 per week in the red, that is, his expenditure exceeds his income. However his discretionary expenses claimed are $1361, which I have reduced by $430.

26. Looking at his material, although this was not put to me, it may well be that his significant mortgage payment of $2694.43 a week is a principal and interest payment and not interest only. However, that is a matter I cannot really make any finding on.

27. Looking at the exhibits tendered, being the home loan applications prepared by the husband and the bank, his home loan payments on one document sys are $7750 per month, or about $1937 per week. However, that would appear to be the payments prior to him increasing his mortgage to pay the wife’s capital sum.

28. The issue really for me is this question of the bonus and what this means. The husband certainly used his bonus to the bank to bolster his income, so it must be real.

29. The husband asserted his 2016 income to assist in borrowing from the bank to payout the wife was $439,220. His projected income for 2017 was a base salary of $320,000 and a bonus of $130,000.

30. I accept his bonus is both shares and cash. The break-up of cash and shares has not been advised to me and I accept that perhaps it cannot be until it is actually paid. The husband may have a little control over that, and I accept this bonus is paid yearly, not week by week.

31. I accept the husband can cash in shares, as he deems appropriate at times, although there would be a significant diminution in the net amount received by him.

32. In conclusion I am satisfied the wife fulfils the threshold test of a spouse in need of maintenance present. Her current income is interest from capital of $115 per week and on any version of living standards, this is not a sum sufficient for her to maintain any standard of living. I accept she will soon receive an additional sum of some $24,000 from the sale of shares in late December.

33. However, that money, together with the lump sum she received from the husband, is her capital and her only capital. If the other spouse can maintain a spouse so that they do not use their capital in their maintenance that is an appropriate decision for this Court to make.

34. The husband’s assets are real estate, admittedly highly geared real estate, a combination of real estate, shares and perhaps some cash. I have formed the view that pending further order and having regard to the bonus the husband receives, he has a capacity to pay towards the support of the wife, though it is nothing like that which the wife seeks and nothing like that which her Honour ordered him to pay after the hearing.

35. I have formed a view he can pay her some $400 per week by way of spousal maintenance due to the receipt by him of a yearly bonus. This equates to $20,800 per annum. The husband’s own estimate of his yearly bonus is around gross, $130,000. Perhaps it would be similar to other years where, at the time of trial, it was a net $60,000 figure. The wife receiving $20,800 of a gross figure of $130,000 is 15 per cent of that bonus. If the bonus nets down to $60,000, her receiving $20,000 is some 33 per cent of that bonus.

36. I see that as an appropriate order on an interim basis, pending the determination of this appeal or agreement between parties. I accept this may create some financial difficulty for the husband because his bonus is paid yearly, not weekly, and the order I propose to make is that the wife will receive this sum weekly. I do not see that the husband has the capacity to pay more than this sum to the wife and that, together with child support, is an amount of $800 per week to the wife.

I certify that the preceding ninety-four (94) paragraphs are a true copy of the reasons for judgment of Judge Henderson

Date:  26 July 2017