Lawler & Oliver (No 2)

[2016] FamCA 517

FAMILY COURT OF AUSTRALIA

LAWLER & OLIVER (NO. 2) [2016] FamCA 517

FAMILY LAW – PROPERTY – INTERIM PROCEEDINGS – Where the wife seeks orders for periodic spousal maintenance – Where the Court finds that the wife is unable to support herself adequately for the purposes of section 72 of the Family Law Act 1975 (Cth) – Extent of the husband’s capacity to pay spousal maintenance – Where the husband argues his income has been significantly affected by the loss of an annual stipend – Where the Court finds the husband has the capacity to pay spousal maintenance to meet the reasonable needs of the wife – Orders made.

Family Law Act 1975 (Cth) ss 74(1), 72(1), 75(2)

F & F (1982) FLC 91-214
Hall & Hall [2016] HCA 23
McCrossen & McCrossen (2006) FLC 93-283

APPLICANT: Ms Lawler

RESPONDENT: Mr Oliver

FILE NUMBER: SYC 7081 of 2015

DATE DELIVERED: 28 June 2016

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: McClelland J

HEARING DATE: 30 May 2016

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Christie

SOLICITOR FOR THE APPLICANT: KD Holmes Solicitors

COUNSEL FOR THE RESPONDENT: Mr Campton SC

SOLICITOR FOR THE RESPONDENT: Mills Oakley Lawyers

Orders pending further order

1. In addition to the amounts to be paid by the husband pursuant to Order 1 of the consent orders made 30 May 2016, by way of spousal maintenance, the husband shall pay to the wife the sum of $1181 per week, the first payment to be made within seven (7) days of these Orders and thereafter by weekly instalments.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Lawler & Oliver (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 7081 of 2015

Ms Lawler

Applicant

And

Mr Oliver

Respondent

REASONS FOR JUDGMENT

Introduction

1. This matter concerns an application for spousal maintenance by Ms Lawler (“the wife”) who separated from Mr Oliver (“the husband”) on 21 February 2015. The wife has continued to reside in the former matrimonial home at J Street, Suburb K (“the Suburb K property”) since separation.

2. Since separation the husband has continued to make all repayments in relation to the loans secured by mortgage over the Suburb K property. In addition the husband has paid all rates, utilities, insurances, outgoings and expenses in relation to the Suburb K property. This includes council rates, water rates, electricity and gas, insurance, ADT security, telephone and internet, as well as Foxtel. The husband has also attended to monthly lease payments in relation to a German motor vehicle which the wife has retained in her possession. The husband has also paid registration and insurance in respect to the German motor vehicle.

3. The parties have three children, B born in 2007 (“B”), C (“C”) born in 2008 and D born in 2010 (“D”).

4. Since separation, the husband has also been paying the amount of $2100 per week in respect to the wife’s, and the children’s, ongoing weekly expenses. The husband has also met the school fees of the children, which alongside “therapies and related costs”, total approximately $75 400 per annum.

5. The husband concedes that the wife is entitled to receive a fair and reasonable amount in respect to periodic spousal maintenance. However, he argues that the current amount of $2100 per week that he is paying towards the wife’s and the children’s weekly expenses is unsustainable because the wife has also made an application for child support which the husband anticipates is likely to be in the vicinity of $800 to $850 per week. Further, the husband asserts that, as a result of ending his term as the elected official of a professional body, he will lose a stipend of approximately $250 000 per annum.

Background

1. The husband was born in 1971 and is currently 44 years of age.

2. The wife was born in 1975 and is currently 40 years of age.

3. The parties commenced cohabitation in 2000.

4. In September 2002 the parties purchased a property at Suburb L for $750 000.

5. In 2005 the parties married.

6. In August 2006 the parties sold the Suburb L property and purchased a property at M Street, Suburb N for $2.25 million. The property was subject to a mortgage of $1.99 million.

7. In 2007 the parties’ daughter, B, was born. B is now aged 8.

8. The wife ceased paid employment shortly prior to the birth of B and has not resumed paid employment since B’s birth.

9. In 2008 the parties’ son, C, was born. C is now aged 7.

10. In 2010 the parties’ youngest daughter, D, was born. D is now aged 6.

11. In 2011 C was diagnosed with autism.

12. On 4 October 2011 the parties sold the Suburb N property for $2.94 million and purchased the Suburb K property for $3.85 million.

13. In 2012 D was diagnosed with severe autism and developmental delay.

14. Between 2012 and 2014 the husband was elected as an office holder of professional association (New South Wales).

15. In 2014 the husband was elected as an office holder of professional association (Federal).

16. On 21 February 2015 the parties separated.

17. In or about September 2015 the husband purchased a property at Suburb O for $3.85 million (“the Suburb O property”). The husband obtained a business loan in the sum of $3 407 707 in order to purchase the property. It also appears that the husband obtained a loan from his current partner, Ms I (“Ms I”), in the sum of $101 424 which was applied towards stamp duty on the Suburb O property. The husband currently owes approximately $98 000 to Ms I.

18. In October 2015 the husband cancelled the wife’s supplementary American Express card but commenced paying $2100 per week in respect to the wife’s and children’s expenses.

19. On 28 October 2015 the husband commenced parenting proceedings in the Family Court of Australia.

20. On 27 November 2015 interim consent orders were made in relation to interim parenting arrangements and injunctive relief sought by the husband.

21. In February 2016 the husband sold shares that were jointly owned by the parties in the sum of $15 150 and after initially depositing the proceeds in a joint account, he transferred the funds to a personal account on 15 February 2016.

22. On 15 February 2016 Senior Registrar Campbell made additional interim parenting orders.

23. On 19 February 2016 the wife filed an application seeking a review of the interim parenting orders made by Senior Registrar Campbell.

24. On 21 March 2016 the husband filed an Amended Initiating Application, seeking parenting and property orders.

25. On 6 April 2016 Rees J made interim parenting orders.

26. On 18 April 2016 the wife filed a Notice of Appeal in relation to the interim parenting orders made by Rees J.

27. On 3 May 2016 the wife’s application for a stay of Rees J’s interim parenting orders was dismissed.

28. On 4 May 2016 the wife’s Application in an Appeal seeking expedition of her appeal against the orders of Rees J was dismissed.

29. On 29 May 2016 the husband’s term as an elected office holder ended.

30. On 30 May 2016, being the date of the interim hearing, the following consent orders were made:

    1. Until further order, the husband shall pay or cause to be paid as and when they fall due:

    a.        all repayments in relation to the home loans secured by mortgage        over the [Suburb K] property;

    b.        all rates, utilities and insurances outgoing and expenses in relation       to the [Suburb K] property including but not limited to council        rates, water rates, electricity, insurance, gas, ADT security, Foxtel,         internet.

    c.        monthly lease payments in relation to the [German] motor vehicle in              the wife’s possession, including but not limited to registration and            insurance.

The law

1. In the recent case of Hall & Hall [2016] HCA 23, the High Court set out the appropriate approach in considering an application for interim spousal maintenance as follows:

   3. … The gateway to the operation of Pt VIII in relation to spousal maintenance is in s 72(1). That sub-section provides that "[a] party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately … having regard to any relevant matter referred to in [s] 75(2)".

   4. The liability of a party to a marriage to maintain the other party that is imposed by s 72(1) is crystallised by the making of an order under s 74(1). That sub-section provides that, "[i]n proceedings with respect to the maintenance of a party to a marriage, the court may make such order as it considers proper for the provision of maintenance in accordance with this Part".

   5. A court exercising the power conferred by s 74(1) is obliged by s 75(1) to take into account the matters referred to in s 75(2) and only those matters. Those matters are presented as a comprehensive checklist. They include what s 75(2)(b) refers to as "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". They also include, by virtue of s 75(2)(o), "any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account".

   …

   8. 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 must have regard to any matter referred to in s 75(2) that is relevant. No doubt, on an application for an interim order "[t]he evidence need not be so extensive and the findings not so precise" as on an application for a final order. But there is nothing to displace the applicability to an exercise of the power conferred by s 74(1) of the ordinary standard of proof in a civil proceeding now set out in s 140 of the Evidence Act 1995 (Cth). A court determining an application for an interim order under s 74(1) cannot make such an order without finding, on the balance of probabilities on the evidence before it, that the threshold requirement in s 72(1) is met having regard to any relevant matter referred to in s 75(2).

   (Footnotes omitted)

2. The totality of matters set out in section 75(2) are as follows:

   (a)  the age and state of health of each of the parties; and

   (b)  the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and

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

   (d)  commitments of each of the parties that are necessary to enable the party to support:

   (i)  himself or herself; and

   (ii)  a child or another person that the party has a duty to maintain; and

   (e)  the responsibilities of either party to support any other person; and

   (f)  subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:

   (i)  any law of the Commonwealth, of a State or Territory or of another country; or

   (ii)  any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;

   and the rate of any such pension, allowance or benefit being paid to either party; and

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

   (h)  the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and

   (ha)  the effect of any proposed order on the ability of a creditor of a party to recover the creditor's debt, so far as that effect is relevant; and

   (j)  the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and

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

   (l)  the need to protect a party who wishes to continue that party's role as a parent; and

   (m)  if either party is cohabiting with another person--the financial circumstances relating to the cohabitation; and

   (n)  the terms of any order made or proposed to be made under section 79 in relation to:

   (i)  the property of the parties; or

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

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

   (i)  a party to the marriage; or

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

   (iii)  the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or

   (iv)  vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and

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

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

   (p)   the terms of any financial agreement that is binding on the parties to the marriage; and

   (q)  the terms of any Part VIIIAB financial agreement that is binding on a party to the marriage.

Issues

1. The issues to determine in these proceedings are therefore:

   (i)To what extent is the wife unable to support herself as a result of having the care of children under the age of 18 years (i.e. the “gateway” issue)?

   (ii)What are the wife’s reasonable needs?

   (iii)What capacity does the husband have to meet a spousal maintenance order, if such an order was to be made?

   (iv) If (i) to (iii) favour an order for spousal maintenance being made by the Court, what order is reasonable having regard to section 75(2) of the Family Law Act 1975 (Cth) (“the Act”)?

Has the wife established that she is unable to support herself by reason of having the care of children under the age of 18 years?

1. Senior counsel for the husband argued that the wife has an unexploited earning capacity and, therefore, has some capacity to support herself. In particular, the husband referred to the fact that the wife is a health professional and has been admitted to work in another professional capacity. The husband acknowledged, however, that the wife has a significant challenge in fully supporting herself as a result of being responsible for the care of their children, two of whom have disabilities, with their youngest daughter having severe autism and learning development delays. Nevertheless, the husband argued that, as the children are now attending school, the wife has the opportunity to engage in some paid employment, even if it is of a part time nature.

2. The wife has not been in paid employment since her first child was born in 2007. I accept the wife’s argument, however, that particularly having regard to the youngest daughter’s disability, it would be difficult for the wife to return to the work force at this point in time. I also acknowledge, in the context of the two youngest children’s disabilities, the wife understandably wishes to continue her role as a parent as contemplated by sub-section 75(2)(l). I therefore find that the wife is unable to support herself adequately by reason of having the care and control of children who are under the age of 18. The wife therefore meets the gateway requirement set out in section 72(1).

The wife’s reasonable needs

1. Both parties acknowledged that, in considering the wife’s application, the Court is concerned only with the wife’s need for spousal maintenance as opposed to providing for the expenses of the children whose needs will be considered in a determination of the husband’s child support obligations (see Stein & Stein (2000) FLC 93-004).

2. In Part N of the wife’s Financial Statement filed 12 May 2016, the wife set out her weekly expenses as follows:

Food

$150

Household supplies

$75

Household repairs

$100

Gas

$53

Electricity

$NK

Heating fuel

$25

Telephone

$NK

Motor Vehicle:

-    Petrol

-    Maintenance

$120

$100

Fares, etag / car parking

$100

Clothing and shoes

$50

Children’s activities

NIL

Child minding

NIL

Medical, dental and optical (not including health insurance premiums)

$25

Entertainment / Hobbies

$100

Holidays

$275

Education expenses, including fees and levies

$400

Chemist/pharmaceutical

$0

Gardening / lawnmowing

$170

Cleaning (house / pool)

$200

Repairs – furnishings and appliances

$40

Dry cleaning

$20

Books and magazines

$10

Gifts

$25

Hairdressing, toiletries

$60

Other necessary commitments (specify)

Tennis court cleaning

$50

House wash

$60

Foxtel

$NK*

Security

$12

Vet bills

$6

TOTAL

$2,226

*Husband was paying these expenses until May 2016

1. During the course of the hearing, counsel for the wife indicated that, as the husband is attending to the payment of gas in respect to the Suburb K property, the item of $53 could be omitted. The wife also adjusted her claim in respect to holidays from the sum of $275 per week to $50 per week. Further, the wife reduced her claim in respect to education expenses from $400 per week to $40 per week. It appears that the larger amount originally specified was a typographical error.

2. Further, during the course of the hearing counsel for the wife argued, that in order to ensure equity in respect to the parties’ arrangements that the Court should consider, in assessing the extent of the wife’s needs, the following further expenses incurred by the wife:

   a)Credit card repayments of $79 per week;

   b)Child minding of $500 per week;

   c)Damage to household items, as a result of D’s behaviour, of approximately $100 per week;

   d)An allowance in respect to repairs to the house that are above and beyond its normal maintenance, as demonstrated by an invoice for $315 dated 12 October 2015 in respect of repairs to a gate; and

   e)Replacement of car tyres for $3200 per annum.

3. Having regard to the subsequent adjustments made to specific items in Part N of the wife’s Financial Statement set out above and the additional expenses referred to in the above paragraph, counsel for the wife submitted that the wife’s reasonable weekly expenses should be determined to be somewhere in the vicinity of $2100.

4. Senior counsel for the husband argued, however, that a number of the expenses claimed by the wife were exaggerated. In that respect it was submitted that it was unreasonable for the wife to claim, for instance, three separate amounts in respect to “Gardening / lawnmowing” of $170 per week, “Cleaning (house / pool)” of $200 per week and “Tennis court cleaning” of $50 per week together with “House wash” of $60 per week. Senior counsel for the husband also argued that, in circumstances where the wife utilises her German motor vehicle for suburban driving, her claim that she incurs $3200 per annum to replace tyres was unreasonable as was the amounts claimed for petrol, tolls and parking. Senior counsel for the husband further argued that the wife’s claim in respect to additional household maintenance, such as the amount of $315 incurred to repair a gate, should be included in the amount she specified in Part N for house repairs as being $100 per week.

5. More broadly, senior counsel for the husband argued in the context of exaggerated claims made by the wife, the Court should not accept the wife’s assertions in respect to her needs without being provided with relevant documentary evidence. In that respect senior counsel for the husband referred to correspondence from the husband’s solicitors to the wife’s solicitors dated 24 and 25 May 2016 respectively, seeking such information. Those letters were marked as Exhibit 5 in the proceedings.

1. The husband did however concede that reasonable household expenses for the wife and the children were, as set out in Annexure A to his affidavit, in the sum of $1745 per week. In circumstances where the wife has applied for a child support assessment, senior counsel for the husband submitted that expenses in respect to the children need to be disregarded in assessing the reasonable needs of the wife. In that context, he noted that there was “symmetry” between the total amount the husband says is reasonable for his weekly expenses, being in the sum of $1253 as set out in Annexure B to his affidavit, and those that he submitted were reasonable in respect to the wife.

2. During the course of the proceeding senior counsel for the husband also indicated that the husband accepted that the wife’s claim of $40 per week in respect to education was reasonable. Further, during the course of the proceedings, the parties entered into consent orders confirming the husband’s ongoing obligations to meet expenses in respect to the Suburb K property and the lease vehicle that he has been paying since separation, other than the weekly sum of $2100.

Consideration

1. As noted, in Hall & Hall (supra), the High Court confirmed that an applicant seeking orders for spousal maintenance carries the evidentiary burden as set out in section 140 of the Evidence Act 1995 (Cth). This can be particularly challenging in the context of an application for interim spousal maintenance. As the Full Court recently said in Edgar & Strofield [2016] FamCAFC 93 at [15]:

   …the limits to an interim hearing are well known.  Disputed issues of fact cannot be resolved at an interim hearing.

2. In these proceedings the wife has claimed amounts which, on their face, appear to be excessive. In that respect, I refer to in particular, the separate amounts claimed for “Garden / lawnmowing”, “Cleaning (house / pool)”, “Tennis court cleaning”, and “House wash”. I accept that the total amount of $150 for these items, as referred to in the husband’s Part N schedule, which is Annexure B to his affidavit, is a more reasonable figure. Further, the amount claimed by the wife in respect to replacing tyres at $3200 per annum also appears to be excessive and I accept the husband’s argument that a component for the replacement of tyres can reasonably be included in the amount of $100 per week allowed in respect to motor vehicle maintenance. The amount the wife claimed, in oral submissions, in the sum of $500 per week in respect to child minding also appears to be excessive in circumstances where the wife, justifiably, argues that she is unable to take up gainful employment as a result of her parenting obligations. The wife based her claim for the sum of $500 per week on the fact that she paid that amount during the course of the parties’ marriage and continued that arrangement until October 2015.[1] I note, however, at that time the children were younger and not all of the children would have been attending school. I therefore accept the husband’s argument that the wife’s weekly expenses should not include an additional component for child minding.

   [1] Wife’s affidavit at paragraph 48.

3. Counsel for the wife argued that it was unreasonable to expect the wife to present documentary evidence in response to the requests made by the husband’s solicitors by letters dated 24 and 25 May 2016 as the letters were only received within days of the interim hearing.

4. This, however, does not relieve the wife of the onus she carries in satisfying the Court that it should grant the relief she seeks. Despite the evidentiary difficulties faced by an applicant in interim proceedings, the applicant is not relieved:

   …from the obligation of establishing the necessary prerequisites for the grant of the relief sought. The applicant, therefore, must still prove, to the requisite standard, those matters fundamental to the successful prosecution of [their] claim”.[2]

   [2] Acton & Burton [2015] FamCA 469 at [29].

5. Annexure A to the wife’s affidavit is a letter to the solicitors for the husband attaching outstanding accounts in respect to water rates, council rates and ADT Security. Pursuant to the consent orders made on 30 May 2016 the husband acknowledges his responsibility for attending to those expenses as well as:

   a.        all repayments in relation to the home loans secured by mortgage        over the [Suburb K] property;

   b.        all rates, utilities and insurances outgoing and expenses in relation       to the [Suburb K] property including but not limited to council        rates, water rates, electricity, insurance, gas, ADT security, Foxtel,         internet.

   c.        monthly lease payments in relation to the [German] motor vehicle in    the wife’s possession, including but not limited to registration and  insurance.

6. The wife also attached, at Annexures C and D to her affidavit, quotations she has obtained in respect to further expenses which she says she will incur. This included the supply and installation of the kitchen in the sum of $37 950 and a further quotation for $109 900 in respect to:

   ·Sanding and polishing of stairs - $15 000;

   ·Repair of rotten floorboards - $1200;

   ·Renovation of kitchen - $30 000;

   ·Renovation of ensuite - $23 000;

   ·Electrical - $5500;

   ·Plumbing - $5200; and

   ·Building and coordination costs - $30 000.

7. While it is unnecessary to determine the issue in the context of this application, certain of those items referred to in the above paragraph may justifiably form the basis of an application for an interim property settlement. That application has been adjourned until a date to be fixed. It would be inappropriate, however, to include those items as components in assessing the reasonable weekly expenses of the wife.

8. In the absence of the wife providing the Court with documentary evidence detailing her weekly expenses, in the form of receipts, bank statements or credit card statements or otherwise, the wife has not presented sufficient evidence to satisfy me that her needs are as she has claimed them to be.

9. In those circumstances, items from the wife’s Part N expenses that are being paid by the husband pursuant to the  consent orders made on 30 May 2016 have been removed (now marked as “$Nil”) and the following Part N expenses have been allowed:

Item

Amount

Food

$150

Household supplies

$75

Household repairs

$100

Gas

$Nil

Electricity

$Nil

Heating fuel

$Nil

Motor Vehicle:

-    Petrol

-    Maintenance

$120
$100

Fares, etag / car parking

$100

Clothing and shoes

$50 

Children’s activities

NIL

Child minding

NIL

Medical, dental and optical (not including health insurance premiums)

$25

Entertainment / Hobbies

$100

Holidays

$50

Education expenses, including fees and levies

$40

Gardening / lawnmowing

$150

Cleaning (house / pool)

Other necessary commitments (specify)
Tennis court cleaning

House wash

Dry cleaning

$20

Books and magazines

$10

Gifts

$25

Hairdressing, toiletries

$60

Foxtel

$Nil

Security

$Nil

Vet bills

$6

TOTAL

$1181

1. It is noted that the total amount of $1181 is reasonably approximate to the amount acknowledged by the husband to be an appropriate amount for the wife’s weekly expenses over and above those amounts which he already pays.

The husband’s capacity

1. In his Financial Statement filed 21 March 2016 the husband disclosed a gross weekly income of $21 134. His Part G expenses included $9913 in income tax, $4267 in mortgage payments, $160 in rates and unit levies, $104 in life insurance premiums, $45 for motor vehicle comprehensive insurance, $16 for motor vehicle registration and $506 for hire purchase/lease agreements with P Finance. In respect to his Part N expenses, I note that the husband had left this part of his Financial Statement blank.

2. In his affidavit filed 25 May 2016 the husband disclosed a gross annual income of $1 112 731 for 2014/2015 Financial Year, which includes the stipend that he says he will shortly no longer receive. From that income the husband says he pays per annum $514 604 in income tax, $5408 in life insurance payments, mortgage payments in the sum of $219 480, principal payments on his home loan of $36 000 and rates and utilities in the sum of $17 760. He is also obliged to pay Ms I $51 972 per annum, under the terms of the loan of monies for stamp duty.

3. In addition to his expenses set out above, the husband claimed weekly Part N expenses in the sum of $1253 at Annexure B to his affidavit filed 25 May 2016 as follows:

Item

Amount

Food

$200

Household supplies

$30

Household repairs

$100

Gas

$20

Electricity

$80

Heating fuel

$

Telephone/Internet/Foxtel

$90

Motor Vehicle:

-    Petrol

-    Maintenance

$33
$80

Fares, etag / car parking

$20

Clothing and shoes

$100

Children’s activities

Child minding

Medical, dental and optical (not including health insurance premiums)

$60

Entertainment / Hobbies

$100

Holidays

$50

Chemist/pharmaceutical

$

Gardening / lawnmowing

Cleaning (house / pool)

$150

Repairs – furnishings and appliances

$20

Dry cleaning

$60

Books and magazines

$10

Gifts

$40

Hairdressing, toiletries

$10

Other necessary commitments (specify)

$

TOTAL

$1,253

1. Having regard to the circumstances of this matter, the Court considers that the husband’s Part N expenses are reasonable. It should be noted that these weekly expenses of the husband were not challenged by counsel for the wife at the hearing.

2. However, in support of her argument that the husband is reasonably able to meet the wife’s weekly needs, counsel for the wife tendered the husband’s last four personal taxation returns. Those returns indicated that the husband has had a gross annual income in those respective years as follows:

   ·    Financial Year ended 30 June 2012 - $1 355 537.00;

   ·    Financial Year ended 30 June 2013 - $1 363 169.00;

   ·    Financial Year ended 30 June 2014 - $1 247 473.00; and

   ·    Financial Year ended 30 June 2015 - $1 112 731.00.

3. Senior counsel for the husband argued, on the other hand, that whilst the husband does have a substantial income by community standards, it is necessary for the Court to have regard to the fact that he consequently pays a substantial amount of income tax. In addition, during the week prior to the hearing on 30 May 2016, the husband’s term ended as an elected official of a professional association and therefore his income will suffer the loss of a stipend of $250 000 per annum.

4. At paragraph 13(2) of his affidavit the husband acknowledges that he will be able to now devote additional time to his business. However it will take some time before he is able to recover the amount he is losing by way of the stipend. In that respect the husband stated:

   It will take time for me to earn additional income from my [business] to replace the stipend. The extent to which I can do this is very uncertain, and I therefore estimate that my future available income after tax may be reduced to about between $500 000 and $550 000.

5. Counsel for the wife argued, however, that irrespective of loss of the stipend, the husband has had, and will continue to have, a very high income and, on its face, should be able to meet the wife’s needs. In so far as the husband has difficulties in doing so, the wife submitted that his incurring of a substantial mortgage associated with purchasing an additional property in September 2015 should not enable the husband to avoid paying spousal maintenance to the wife.

6. Counsel for the wife further noted that the husband’s affidavit acknowledges that he currently resides with his new partner and her son (paragraph 13(10)) and it is reasonable to assume that the husband’s new partner would make a contribution to the weekly expenses of the husband that are associated with running his new household.

Consideration

1. I have earlier noted the wife’s difficulty in providing the Court with a sufficient evidentiary basis to establish the needs she has claimed.

2. However, accepting the husband’s estimate that his net income will be reduced to approximately $550 000 following the loss of his annual stipend, this amounts to a weekly net income of approximately $10 577 per week. From this the husband pays approximately $6358 per week in respect to his Part G expenses (as outlined at [61] above) and $1253 per week in respect to his Part N expenses (as outlined at [62] above). This leaves the husband a surplus of approximately $2966 per week from which he will be able to meet his obligations under the consent orders made 30 May 2016 and what is to be determined by the Court to be an appropriate order for spousal maintenance. I also note the husband’s anticipated child support obligations, although an assessment has yet to issue.

3. Further, in Part E of his Financial Statement filed 21 March 2016, the husband notes that his current partner’s income is $5000 per week, or approximately $260 000 per annum.

4. At paragraph 13(10) of his affidavit, the husband states that in addition to lending him money in respect to stamp duty for the acquisition of his new property, that:

   [Ms I] has also purchased or provided various items of furniture and household items for our house. She also makes a contribution towards various expenses including food, cleaning and some items of clothing for the children. In my list of expenses I have not included anything for [Ms I] or her son as she contributes those costs as well as the gardener and some other expenses directly. Effectively [Ms I] pays her own way.

5. In that respect, it is noted that the husband has not included in his Financial Statement any amounts paid in respect to supporting his partner and that she effectively “pays her own way” in meeting her own expenses and those of her son.

6. I note in that respect the comments of Fogarty J in F & F (1982) FLC 91-214 at 77,148:

   …the term ‘the financial circumstances relating to the cohabitation’ is not confined to any actual financial arrangements between the relevant persons. It may also include financial arrangements which would be appropriate in those circumstances. That is, the Court entitled to take ‘this potential into account’…

7. I consider that there is merit in the submission of counsel for the wife that, given the not insubstantial income received by the husband’s new partner, it is not unreasonable to expect that she would do a little better than “paying her own way” in assisting the husband to meet the expenses of the second household in which he lives with her and her son.

8. While I have had regard to the fact that the husband will no longer be paid his stipend, he nonetheless estimates his likely net income as being between $500 000 and $550 000 per annum. On that basis I have determined that the husband has the capacity to meet the reasonable needs of the wife as contemplated section 72(1) of the Act.

Appropriate Orders

1. In considering what amount of spousal maintenance is proper in terms of section 74(1) of the Act, I have had regard to relevant considerations set out in section 75(2). Those considerations that are relevant are as follows sub-sections 75(2)(a), (b), (c), (d), (g), (j), (k), (l), (m), (na) and (o).

Section 75(2)(a) The age and state of health of each of the parties

1. The husband is now 44 years of age and the wife is 40 years of age. Both parties are in good health.

Section 75(2)(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

1. The husband is a successful health professional who earns a substantial income through his business. The wife has, for the last nine years, performed home duties. However she is a health professional and has been admitted to practise in another profession although she has never worked in that profession. The wife is also the registered owner of the Suburb K property which she values in her Financial Statement as $4.75 million. In addition the wife has some relatively minor shareholdings in Telstra and IAG.

2. The husband’s Financial Statement deposes to ownership of the Suburb O property which the husband values at $3.85 million. The husband also deposes to a shareholding in Westpac to the value of $16 000 and ownership of two German motor vehicles totalling $85 000. The husband values his business at $41 957. The parties also jointly own artwork which is located at the Suburb K property. The wife values her 50 per cent share of that artwork at $17 500 whilst the husband values his 50 per cent share at $40 000. The husband notes his obligation pursuant to a loan from Ms I in the sum of $98 000 and to P Finance in the sum of $70 000. The husband also notes his obligations pursuant to home mortgages to Westpac in the sum of $3 548 133 and a mortgage in respect to a business loan in the sum of $3 407 707. The Westpac home mortgages relate to the Suburb K property and the business loan relates to the Suburb O property.

Section 75(2)(c) Whether either party has the care or control of a child of the marriage who has not attained the age of 18 years

1. As noted the parties have three children - B aged 8, C aged 7 and D aged 5. C was diagnosed with autism in about 2011 whilst in about 2012 D was diagnosed with severe autism and developmental delay.

Section 75(2)(d) Commitments of each of the parties that are necessary to enable the party to support himself or herself and a child or another person that the party has a duty to maintain

1. I note the commitments of each of the parties are set out in the husband’s Financial Statement filed on 21 March 2016 and the wife’s Financial Statement filed 12 May 2015. Part N of the wife’s Financial Statement was amended  during the course of the hearing and the wife submitted that additional expenses should also be recognised such that her reasonable weekly commitments should be assessed as being in the vicinity of $2100 per week.

2. In his affidavit the husband asserts that, in addition to meeting repayments in relation to the mortgage on the Suburb K property, he pays an amount of $29 772 per annum in respect to outgoings associated with the Suburb K property including utilities, council rates, water insurance, security, telephone and internet (paragraph 10(3)).

3. The husband has also agreed to meet the lease payments in respect to the wife’s motor vehicle totalling $26 312 per annum. The husband estimates his average weekly expenses of maintaining himself and his children to be $91 676 per annum (paragraph 13(5)).

Section 75(2)(g) Where the parties have separated or divorced, a standard of living in all the circumstances must be reasonable

1. In McCrossen & McCrossen (2006) FLC 93-283 at 80,383, the Full Court, after referring to a number of earlier authorities, said that the question as to whether or not a person is able to support themselves “adequately” is:

   not to be determined upon a “subsistence level” but upon consideration of whether the applicant can support himself or herself “adequately” importing a standard of living reasonable in the circumstances.

   
   (References omitted)

2. During the course of the marriage the parties enjoyed a comfortable standard of living consistent with the husband’s high income. This included residing in a large six bedroom home with a tennis court, driving modern motor vehicles and incurring significant weekly expenditure in respect to consumer goods, entertainment and regular holidays. While it is unrealistic to assume that either party will be able to maintain that standard of living now that they are living separately and apart in different households, the parties are nonetheless entitled to aspire to a reasonable standard of living in all the circumstances.

Section 75(2)(j) The extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party.

1. It is noted that the husband has been the major financial contributor to the marriage whereas the wife has been the primary carer of the parties’ children and home maker for the family. While not monetary, those contributions by the wife should be regarded as substantial and not merely token.[3]

Section 75(2)(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.

[3] Crawford & Crawford (1979) FLC 90-647 and also Mallet & Mallet (1984) 156 CLR 605 and Ferraro & Ferraro (1993) FLC 92-335.

1. It is noted that the parties married in 2005 and separated on 21 February 2015. During the course of the marriage the wife was employed as a health professional. However she has not worked as a health professional for approximately nine years as a result of homemaker and parenting responsibilities. At paragraphs 39 and 40 of her affidavit the wife states that:

   Throughout the marriage, the husband’s hours of work meant he left the home at about 7 am and returned home at about 8 pm five days per week. In addition, he [worked] Saturday morning until lunchtime and thereafter was often on-call on the weekend often [working].

   The husband was [a NSW professional office holder] from 2012 to 2014 during which he travelled approximately three times per year. Since becoming Federal [professional office holder] in May 2014 his travel substantially increased.

2. To her credit the wife has also undertaken further study and has obtained additional qualifications. The wife has not, however, as yet, undertaken any paid employment in this profession. It is reasonable to assume that the wife would experience some challenges in returning to the workforce in either profession. That option does, however, remain available to her including by taking up part time employment. This will become a more realistic prospect as the children become a little more independent.

3. Nevertheless, it is reasonable to assume that the wife’s homemaker and parenting responsibilities and the support she has provided to the husband to develop his own career, including his involvement as an elected office holder, have impacted upon the wife’s earning capacity.

Section 75(2)(l) The need to protect a party who wishes to continue that party’s role as a parent

1. A significant factor in this matter is the wife’s desire to continue her role as a parent and primary carer for her children. As previously indicated, particular in circumstances where both C and D have been diagnosed as suffering from autism and D has been diagnosed with developmental delay, the wife’s desire to maintain that role is understandable and appropriate consideration should be given to that wish.

Section 75(2)(m) If either party is cohabitating with another person, the financial circumstances relating to the cohabitation.

1. I have earlier noted that the husband’s new partner earns a substantial income. While the husband’s new partner cannot be expected to make a contribution to maintenance of the husband’s former wife, she nonetheless has some capacity to contribute to the expenses of the husband in respect to his household at the Suburb O property This would assist the husband to meet his own ongoing weekly expenses and hence is a factor to be considered in assessing his capacity to pay spousal maintenance.

Section 75(2)(na) Any child support under the Child Support (Assessment) Act 1989 (Cth) that a party to the marriage has provided, is to provide, or might be liable to provide in the future for a child of the marriage.

1. The Court was advised that the mother has made an application for child support under the Child Support (Assessment) Act 1989 (Cth). However, as yet, no assessment has been issued in respect to the amount of child support that the husband will be required to pay. In those circumstances, the potential child support obligation of the husband has not been considered in determining the proper amount of spousal maintenance that the husband should pay to the wife.

Section 75(2)(o) Any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account.

1. It is of relevance that the parties have incurred substantial litigation expenses in respect to various interim parenting applications, a subsequent application for review and subsequent appeal initiated by the wife. At paragraph 14 of his affidavit, the husband states that his legal expenses incurred to date in respect to those applications are in the sum of $111 145. While any litigant before this Court is entitled to seek such relief as they consider to be appropriate, it is also appropriate to recognise that the litigation has reduced funds that would otherwise have been available to the husband to pay ongoing spousal maintenance.

Evaluation of section 75(2) factors

1. Having regard to the considerations set out in section 75(2) that I consider to be of relevance in these proceedings, I have determined that it is proper for the Court to make an order that the husband pay spousal maintenance to the wife in the sum of $1181 per week. In arriving at that conclusion I have had regard to the wife’s reasonable needs as a result of her responsibilities as the primary carer of the parties’ three children, two of whom have a disability. I have also had regard to the fact that the wife has been absent from the paid workforce for a period of approximately nine years and this is likely to have impacted upon her earning capacity.

2. From the perspective of the husband’s capacity to pay, I have placed greatest emphasis on his actual earnings and the fact that he has the potential to share some of the burden in maintaining his second household at the Suburb O property with his current partner who is also in receipt of a substantial income.

3. I have noted that the husband’s income has recently been reduced as a result of his term ending as an elected official. However, given his past income and the fact that he will now be able to apply a greater amount of time to his business, it can reasonably be expected that the husband’s income will increase and, in any event, the husband indicates that he expects that his net income will be in the vicinity of $500 000 to $550 000 per annum.

4. One reservation that I have had in making orders for the husband to pay the full amount of maintenance as sought by the wife is the fact that the litigation, which has in large part been initiated by the wife, has unquestionably impacted on the resources that are available to the husband to meet an order for spousal maintenance. Those legal fees have not, in these proceedings, resulted in a reduction to the amount of spousal maintenance that I have determined that the husband should properly pay to the wife. However, the reasonableness of a party’s conduct during the course of litigation, and the extent to which they may cause the other party to unreasonably incur legal expenses, is a factor that the Court can legitimately consider in determining the appropriate amount of spousal maintenance to pay. It may also become a relevant consideration in respect to a potential application for modification of an order for spousal maintenance pursuant to section 83 of the Act.

5. For all these reasons I will therefore order the husband to pay the sum of $1181 per week by way of spousal maintenance to the wife in addition to the amounts to be paid by him pursuant to Order 1 of the consent orders made 30 May 2016. I make the orders set out at the commencement of these Reasons for Judgment.

I certify that the preceding ninety-nine (99) paragraphs are a true copy of the reasons for judgment of the Honourable Justice McClelland delivered on 28 June 2016.

Associate: 

Date:  28 June 2016