Ludwig & Ludwig
[2022] FedCFamC1F 378
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Ludwig & Ludwig [2022] FedCFamC1F 378
File number(s): SYC 7386 of 2017 Judgment of: REES J Date of judgment: 16 June 2022 Catchwords: FAMILY LAW – SPOUSAL MAINTENANCE – Spousal maintenance order expired – Fresh application for spousal maintenance filed by the wife – More than 12 months post-divorce – Subject to leave under s 44(3) of the Act, the power of the Court to make orders for spousal maintenance is not exhausted – Court not satisfied the wife was unable to support herself without an income tested pension, allowance or benefit pursuant to s 44(4)(b) of the Act – Application for spousal maintenance dismissed. Legislation: Family Law Act 1975 (Cth) ss 44(3), 44(4)(b), 83(1) Cases cited: Atkins & Hunt [2016] FamCAFC 230
Clayton & Bant (2020) 385 ALR 41
Mehta & Crimmins [2021] FedCFamC1A 73
Welland & Hawthorn [2021] FedCFamC1A 43
Division: Division 1 First Instance Number of paragraphs: 53 Date of last submission/s: 10 June 2022 Date of hearing: 27 May 2022 Place: Sydney Counsel for the Applicant: Mr Lawrence Solicitor for the Applicant: Tiyce & Lawyers Counsel for the Respondent: Mr Ahmad Solicitor for the Respondent: Broun Abrahams Burreket ORDERS
SYC 7386 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS LUDWIG
Applicant
AND: MR LUDWIG
Respondent
ORDER MADE BY:
REES J
DATE OF ORDER:
16 JUNE 2022
THE COURT ORDERS:
1.That the application of the wife filed 15 April 2021 be dismissed.
2.That the applications for costs of the wife and the husband be dismissed.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Ludwig & Ludwig has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
REES J:
Ms Ludwig (“the wife”) and Mr Ludwig (“the husband”) separated in January 2017 and final orders were made in relation to their financial affairs on 25 June 2018. Order 22 of those orders provides for the husband to pay the wife spousal maintenance in the sum of $1,350 per week until 31 December 2020.
By an Initiating Application filed 15 April 2021, the wife seeks an order for spousal maintenance in the sum of $1,600 per week for a period of five years and an interim order for spousal maintenance in the same amount.
The husband opposes both orders and contends that the Court’s power to make spousal maintenance orders has been exhausted and that, if the power has not been exhausted, the wife requires leave pursuant to s 44(3) of the Family Law Act 1975 (Cth) (“the Act”). Further, it is contended on behalf of the husband that, if leave is required, the provisions of s 44(4)(b) of the Act would have effect to exclude the wife’s application.
On behalf of the wife, it is contended that leave is not required because the wife’s application is to revive an order previously made. Alternately, if leave is required, the wife has satisfied the requirements for leave and the relevant date for the application of s 44(4)(b) of the Act is the date upon which the previous order ceased to have effect.
On behalf of the husband, it was submitted that, if the matter is to proceed, it should not be considered on an interim basis as there is no demonstrated urgency and that the matter should be listed for final hearing.
The wife’s position was that the matter could initially be determined on an interim basis.
Both counsel made well considered and helpful submissions, both orally and in writing and I am grateful for their assistance.
The issues which have to be resolved are these:
·Is the power of the Court to make an order for spousal maintenance exhausted by the making of the orders of 25 June 2018?
·If the power is not exhausted, is the wife required to seek leave pursuant to s 44(3) of the Act to make a further application?
·If leave is required, what is the operative date upon which, pursuant to the provisions of s 44(4)(b) of the Act, the wife must establish that she would have been unable to support herself without an income tested pension, allowance or benefit?
·Has the wife satisfied the Court that leave should be granted?
·Should the matter be dealt with on an interim basis?
Is the power of the Court to make an order for spousal maintenance exhausted by the making of the orders of 25 June 2018?
This issue was considered by the Full Court in Mehta & Crimmins [2021] FedCFamC1A 73 (“Mehta & Crimmins”) where their Honours stated:
36. Section 72(1) of the Act says:
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…
37.The section continues and sets out the circumstances in which the liability to maintain the other party might arise. These matters are expressed in the present tense.
38.Once those two conditions precedent to the order being made are established, s 74 of the Act empowers the Court to make an order for the maintenance of a party as it considers proper. The consideration of these matters must be as at the date of the determination of the application.
39.It is not suggested that a party’s liability to support the other party ceases on the conclusion of property settlement proceedings by orders nor by the dissolution of the marriage. Indeed s 83 of the Act (while not relevant here) contemplates the revival, variation or dismissal of existing orders for maintenance.
40.Section 44(3) of the Act provides that an application for spouse maintenance must not be brought more than 12 months of the date of divorce without leave.
41.Unlike final orders for property settlement which can only be varied or set aside pursuant to s 79A of the Act, a party’s right to seek spouse maintenance is capable of being exercised many times and subject to leave, over many years. So much is apparent from the terms of the sections themselves. The exercise of the Court’s discretion in making a proper order for spouse maintenance falls to a consideration of the needs and ability of the applicant to support herself or himself adequately and the reasonable ability of the respondent to maintain the other party. The circumstances supporting either of those preconditions will change from time to time.
On behalf of the husband, counsel submitted that Mehta & Crimmins can be distinguished from the present case because Mehta & Crimmins dealt only with cause of action estoppel and this case deals with res judicata estoppel.
I do not accept that proposition.
In Clayton & Bant (2020) 385 ALR 41, the High Court said:
Once it is appreciated that the rights in issue in the property settlement proceedings and in the spousal maintenance proceedings are the statutory rights of the wife to seek orders under ss 79(1) and 74(1) of the Act, it is apparent that the ruling made by the Dubai Court cannot give rise to a res judicata in the strict sense in which that term continues to be used in Australia. The rights created by ss 79(1) and 74(1) cannot “merge” in any judicial orders other than final orders of a court having jurisdiction under the Act to make orders under those sections. The rights of the wife to seek orders under ss 79(1) and 74(1) continue to have separate existence unless and until the powers to make those orders are exercised on a final basis and thereby exhausted.
(Footnotes omitted)
The Full Court in Mehta & Crimmins did not accept that the power of this Court to make a spousal maintenance order is exhausted and res judicata estoppel arises, unless the present application has already been finally determined.
Clearly, the present application has not been determined in the 2018 orders.
The making of an order for spousal maintenance, even in orders intended to be final orders, does not exhaust the power of the Court to consider an application for spousal maintenance at a later time and in different circumstances. Such an application can only be effectively precluded by a Binding Financial Agreement dealing with the spouse’s right to maintenance.
If the power is not exhausted, is the wife required to seek leave pursuant to section 44(3) of the Act to make a further application?
The basis on which an order for spousal maintenance, which is presently in force, can be varied or modified is contained in s 83(1) of the Act which provides:
83 Modification of spousal maintenance orders
(1) If there is in force an order (whether made before or after the commencement of this Act) with respect to the maintenance of a party to a marriage:
(a) made by the court; or
(b) made by another court and registered in the first mentioned court in accordance with the applicable Rules of Court;
the court may, subject to section 111AA:
(c) discharge the order if there is any just cause for so doing;
(d) suspend its operation wholly or in part and either until further order or until a fixed time or the happening of some future event;
(e) revive wholly or in part an order suspended under paragraph (d); or
(f) subject to subsection (2), vary the order so as to increase or decrease any amount ordered to be paid or in any other manner.
Section 83 of the Act has no effect if there is no order for spousal maintenance in force. In the present proceedings, the order for spousal maintenance came to an end on 31 December 2020 and therefore s 83 does not apply.
However, on behalf of the wife, it is submitted that the present application relies on the provisions of s 44(3), not on s 83 of the Act.
Section 44(3) of the Act provides:
(3) Where, whether before or after the commencement of section 21 of the Family Law Amendment Act 1983:
(a) a divorce order has taken effect; or
(b) a decree of nullity of marriage has been made;
proceedings of a kind referred to in paragraph (c), (caa), (ca) or (cb) of the definition of matrimonial cause in subsection 4(1) (not being proceedings under section 78 or 79A or proceedings seeking the discharge, suspension, revival or variation of an order previously made in proceedings with respect to the maintenance of a party) shall not be instituted, except by leave of the court in which the proceedings are to be instituted or with the consent of both of the parties to the marriage, after the expiration of 12 months after:
(c) in a case referred to in paragraph (a)-the date on which the divorce order took effect; or
(d) in a case referred to in paragraph (b)-the date of the making of the decree.
The court may grant such leave at any time, even if the proceedings have already been instituted.
(Emphasis added)
Counsel for the wife relies upon the decision of Murphy J, with which Bryant CJ and May J agreed, in Atkins & Hunt [2016] FamCAFC 230 where his Honour drew a distinction between the provisions of s 83 of the Act which requires an order to be in force and the provisions of s 44(3) of the Act and said:
54.Thirdly, the expression “an order previously made” is not defined, confined or restricted in its operation. Fourthly, the expression “revival” is not confined in s 44(3), as it is in s 83, to the situation where an order has been suspended. Finally, the word “revival” is a word of ordinary usage and meaning. It means, for example, “the state of being revived” which is “to become operative or valid again” or “restoration to use, acceptance or currency” or “an instance of something becoming … active or important again”. Thus, s 44(3) can be seen as having in contemplation “an order previously made” becoming “operative or valid again”.
(Footnotes omitted)
Counsel for the husband submitted that the wife is not seeking to revive an order but to make a fresh application for maintenance because the terms of the order she seeks are not the same as the terms of the order made on 25 June 2018.
I accept the submission on behalf of the husband that the wife is not seeking to revive the order made on 25 June 2018 for spousal maintenance in the sum of $1,350 per week. She is seeking an order for payment of $1,600 per week which is a different order.
Therefore, the wife is required to make an application for leave to make an application for spousal maintenance.
The Court may grant such leave at any time, even if the proceedings have already been instituted.
The divorce order between these parties was made in 2019 and became final in 2019. The application for spousal maintenance was made on 15 April 2021. The wife is required to seek leave but leave can be granted at any time.
If leave is required, what is the operative date upon which, pursuant to the provisions of section 44(4)(b) of the act, the wife must establish that she would have been unable to support herself without an income tested pension, allowance or benefit?
Section 44(4) of the Act provides:
(4) The court shall not grant leave under subsection (3) or (3A) unless it is satisfied:
(a) that hardship would be caused to a party to the relevant marriage or a child if leave were not granted; or
(b) in the case of proceedings in relation to the maintenance of a party to a marriage—that, at the end of the period within which the proceedings could have been instituted without the leave of the court, the circumstances of the applicant were such that the applicant would have been unable to support himself or herself without an income tested pension, allowance or benefit.
The finding required by s 44(4)(b) of the Act is a jurisdictional fact.
On behalf of the husband, it is submitted that the operative date for the purpose of s 44(4)(b) of the Act is 12 months from the date of the divorce order which would be in 2020.
Counsel for the husband submits that, at 4 July 2020, the wife could not establish that she could not support herself without an income tested pension, allowance or benefit because she was the beneficiary of an order for spousal maintenance in the sum of $1,350 per week.
I do not accept that submission.
The order for spouse maintenance remained in force until 31 December 2020. At any time before that date, the wife could, pursuant to the provisions of s 83 of the Act, apply to vary that order so as to extend its operation or vary the amount to be paid. Therefore, until 31 December 2020, the wife could institute proceedings without the leave of the Court. The operative date is 1 January 2021.
Has the wife satisfied the Court that leave should be granted?
The first matter to be determined is whether the wife has satisfied the Court that, as at 1 January 2021, she was unable to support herself without an income tested pension, allowance or benefit.
The wife bears the onus of proving the jurisdictional fact. It is not sufficient for the wife to assert that the Court can assume she would have been unable to support herself.
The evidence is that the wife is not currently in receipt of such a pension and there is no evidence that she has, since 1 January 2021, applied for such a pension. In other words, she has, in fact, supported herself without recourse to a pension.
As at 1 January 2021, the wife was living with the children in the former matrimonial home at Suburb B. The husband, pursuant to the orders made on 25 June 2018, was paying the mortgage payments, the council and water rates and the home building and contents insurance.
The husband’s bank statements, which are annexed to his affidavit, show that in January 2021, he paid the wife $5,583, those payments being nominated as for the support of the then two adult children and for “summer holiday activities for the children”. Those payments do not include payments for other obviously child related items such as school shoes, school materials and dental fees and nor do they include payments of child support for the three younger children.
In relation to the payments for the support of the two older children, those payments of $2,167 per month were voluntary payments by the husband and not mandated by the Binding Child Support Agreement that had been entered on 6 June 2018.
In February 2021, the wife received $4,334 for the support of the two elder children.
The Suburb B property was not sold until mid-2021 when the wife received $2,742,005.
From 1 January 2021 to the present time, there is no evidence that the wife has applied for or received an income tested pension, allowance or benefit.
Accordingly, I cannot find that the wife has established that she “would have been unable to support himself or herself without an income tested pension, allowance or benefit.”
Thus the requirements of s 44(4)(b) of the Act have not been satisfied and the application must be dismissed.
If I am in error in that conclusion, I would nevertheless dismiss the application because I am not satisfied that I should exercise discretion in the wife’s favour.
In Welland & Hawthorn [2021] FedCFamC1A 43 the Full Court held:
The Full Court recently had occasion to affirm that the application of s 44(6) of the Act entails satisfaction of its criteria by sequential steps (Arcand & Boen (2021) FLC 94-046). First, the applicant must demonstrate hardship and, if that hurdle is surmounted, must still persuade the exercise of discretion in his or her favour to extend time. As the Full Court said:
12.The [applicant] bore the onus of demonstrating to the primary judge’s satisfaction that, supposing leave to bring the property settlement claim out of time was denied, the deprivation of his reasonable chance of success in those prospective proceedings would occasion him hardship (Gadzen & Simkin (2018) FLC 93-871 (“Gadzen”) at [29]-[31]).
13.In assessing whether the [applicant] discharged the onus, the primary judge merely needed to be satisfied the prospective property settlement claim was reasonable or arguable, with such assessment made summarily without a detailed hearing on the merits (Gadzen at [33]-[37]; Edmunds & Edmunds (2018) FLC 93-847 (“Edmunds”) at [16]-[17]; Althaus and Althaus (1982) FLC 91-233 (“Althaus”) at 77,267).
…
38.Section 44(6) of the Act stipulates that the court may grant an extension of time if the applicant demonstrates hardship through deprivation of the chance to bring proceedings for substantive relief, meaning the application to extend time might still not be granted. The onus rests with the applicant to demonstrate why discretion should be exercised to grant the extension of time; not with the respondent to demonstrate why the application should be refused (Brisbane South Regional Health Authority v Taylor (1996) 186 CLR 541 (“Brisbane South”)).
39.The demonstration of hardship, if deprived of the right to pursue remedy under Pt VIIIAB of the Act, was a threshold issue before the primary judge (Gadzen at [29]). Having decided it against the [applicant], there was no need for the primary judge to go further, but his Honour nevertheless did so by proceeding to canvas another issue pertaining to the exercise of discretion: the delay in bringing the proceedings.
40.Supposing hardship is demonstrated, numerous factors can influence the exercise of residual discretion, including the length of the delay, the adequacy of reasons for the delay, and the prejudice the respondent would suffer if the application for extension of time was granted…
Thus the applicant wife bears the onus of satisfying the Court that she would suffer hardship if leave were refused but also that it is reasonable to exercise discretion in her favour having regard to “the length of the delay, the adequacy of reasons for the delay, and the prejudice the respondent would suffer if the application for extension of time was granted”.
I accept that the wife would suffer hardship if she were not granted leave to bring an application for spousal maintenance but she has adduced no evidence in relation to those further matters.
There is no explanation for her failure to apply to extend the spousal maintenance order which she could have done without leave at any time up to 31 December 2020. It was only necessary for her to establish that her claim was arguable.
However, there is no explanation for the delay between 1 January 2021 and 15 April 2021 when the application was filed. The period is not great but the delay must be explained. It has not been.
Absent a sufficient explanation, the wife cannot expect that the Court will exercise its discretion in her favour.
Should the matter be dealt with on an interim basis?
Since leave will not be granted, it is not necessary to answer this question.
The wife’s application will be dismissed.
COSTS
Each party seeks an order that the other pay his or her costs. The wife seeks costs on an indemnity basis although why this case falls into that range of exceptional cases that would warrant such an order is not explained.
Neither party has addressed costs but, in order to save expense and time, I propose to dismiss both applications. The wife has been wholly unsuccessful but the husband’s income is so much greater than that of the wife that it is not appropriate that she should be ordered to pay his costs.
I certify that the preceding fifty-three (53) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rees. Associate:
Dated: 16 June 2022
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