MACKNAIR & MACKNAIR
[2015] FamCAFC 106
•11 June 2015
FAMILY COURT OF AUSTRALIA
| MACKNAIR & MACKNAIR | [2015] FamCAFC 106 |
| FAMILY LAW – APPEAL – SPOUSAL MAINTENANCE – Appeal from a decision of a Federal Circuit Court judge heard by a single judge of the Appeal Division – Where there is an error in the calculation of the husband’s reasonable expenses – Appeal granted. FAMILY LAW – CROSS-APPEAL – SPOUSAL MAINTENANCE – Where it is alleged the primary judge erred in including a loan owed by the husband to his brother – Where the wife failed to demonstrate an error – Cross-appeal dismissed. |
Family Law Act 1975 (Cth) ss 72(1), 75(2), 94AAA(3)
Federal Proceedings (Costs) Act 1981 (Cth)
De Winter & De Winter (1979) FLC 90-605
Freestone & Freestone [2013] FamCAFC 190
House v R (1936) 55 CLR 499
| APPELLANT/CROSS-RESPONDENT: | Mr Macknair |
| RESPONDENT/CROSS-APPELLANT: | Ms Macknair |
| FILE NUMBER: | BRC | 10829 | of | 2013 |
| APPEAL NUMBER: | NA | 13 | of | 2015 |
| DATE DELIVERED: | 11 June 2015 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | May J |
| HEARING DATE: | 11 June 2015 |
| LOWER COURT JURISDICTION: | Federal Circuit Court of Australia |
| LOWER COURT JUDGMENT DATE: | 13 February 2015 |
| LOWER COURT MNC: | [2015] FCCA 297 |
REPRESENTATION
| SOLICITOR FOR THE APPELLANT: | Appeared in person |
| SOLICITOR FOR THE RESPONDENT: | Appeared in person |
Orders
The appeal be allowed.
Order 1 made 13 February 2015 be discharged and in lieu thereof the appellant husband pay the respondent wife spousal maintenance in the sum of $437 per week, effective from 30 January 2015.
The wife pay the husband the lump sum of $1,014 (without interest) within three months of the date of these orders.
There be no order as to costs of the appeal.
The Court grants to the husband a costs certificate pursuant to the provisions of s 9 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise payment under that Act to the husband in respect of the costs incurred by him in relation to the appeal.
The Court grants to the wife a costs certificate pursuant to the provisions of s 6 of the Federal Proceedings (Costs) Act 1981 (Cth) being a certificate that, in the opinion of the Court, it would be appropriate for the Attorney-General to authorise a payment under that Act to the wife in respect of the costs incurred by her in relation to the appeal.
The cross-appeal be dismissed.
No order as to costs for the cross-appeal.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Macknair & Macknair has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| IN THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT BRISBANE |
Appeal Number: NA 13 of 2015
File Number: BRC 10829 of 2013
| Mr Macknair |
Appellant/Cross-Respondent
And
| Ms Macknair |
Respondent/Cross-Appellant
REASONS FOR JUDGMENT
On 13 February 2015, Judge Cassidy made final orders that Mr Macknair (“the husband”) pay a sum of $515 per week, by way of spousal maintenance, commencing as and from 30 January 2015, to Ms Macknair (“the wife”).
On 3 March 2015, the husband filed a Notice of Appeal with the following ground of appeal:
1.The learned trial judge (Her Honour Judge Cassidy) erred in the computation of the amount of spousal maintenance ordered to be paid by the [husband] to the [wife] in the sum of $515 per week (Reasons for Judgment, para 15) in that the learned trial judge has used in the table at paragraph 41 of the Judgment delivered 13 February 2015, a table titled “Calculation of the Husband’s Relevant Income & Expenditure”, under the sub-heading “Unreasonable expenses”, the amount of the “The child’s expenses” are incorrectly entered as $365.00. The learned trial judge, has, in error, used an amount relating to the de facto spouse of the [husband], which is the figure at Part N, paragraph 60, column 5 titled “Other Adults”. The correct figure of $278.00 should have been entered in the table as “The child’s expenses” which is the figure at Part N, paragraph 60, column 4 titled “For Children”, of the Financial Statement of the [husband].
On 27 March 2015, the husband filed an Application in a Case to partially stay the order made on 13 February 2013 for spousal maintenance.
On 28 April 2015 the primary judge made orders for a partial stay of the spousal maintenance payment of $515 per week, and instead ordered the husband pay the wife the sum of $437 per week as and from 28 April 2015.
On 14 May 2015, the wife filed an Amended Notice of Appeal for Cross-Appeal, with one ground of cross-appeal:
1.The learned trial judge erred in calculating the weekly spousal maintenance payment to the wife in the Judgment dated 13 February 2015. The judge included provision for repayment of a loan in the “Calculation of the Husband’s Relevant Income & Expenditure” that should not have been included. I have liabilities incurred pre-separation of which no provision has been made for repayment. The husband’s loan was post divorce and therefore should not influence the outcome of my spousal maintenance. This would bring the husband’s total capacity to $615.00 per week in spousal maintenance.
I head this appeal as a single judge pursuant a direction issued by the Chief Justice on 15 April 2015 under s 94AAA(3) of the Family Law Act 1975 (Cth) (“the Act”).
Background and Reasons of the Primary Judge
The wife was born in 1954 and is presently 60 years of age. The husband was born in 1964 and is 50 years of age.
The parties commenced cohabitation in 2001. They married in 2003, and separated in July 2013. They divorced on 9 September 2013.
There are no children of the relationship. The wife has a son from a previous relationship and the husband has a child from a previous relationship. Both children are now over 18.
Judge Cassidy previously, on 9 April 2014, made interim orders that the husband pay the wife an amount of $720 per week.
The parties reached agreement in relation to property settlement and orders were made on 23 March 2015 by consent. A superannuation splitting order was made, which provided for the wife to be allocated a base amount of $40,000 from the superannuation account of the husband.
As to spousal maintenance, the husband sought the wife’s application be dismissed, while the wife sought the husband pay her a sum of $1,070 per week.
The husband is presently employed and earns a relatively significant income. He has commenced a new relationship and lives with his partner and her child, who has a disability.
The wife is presently unemployed. She gave evidence before the primary judge of the attempts she made to gain employment and the judge concluded that “by reason of her age…she is having difficulty in obtaining appropriate gainful employment.” [28].
There is no doubt that the wife is in need of maintenance as required by s 72(1) of the Act. The primary judge found that the wife is unable to support herself by reason of her age, difficulty gaining employment and her health.
Appeal
The husband argues that the primary judge made an error in the calculation of the expenses relating to the child of his present partner.
The husband was employed with a weekly income of $2,330. He claimed expenses for the child. There being no evidence that the husband had a duty to support the child as required by the relevant legislation, the primary judge found that those expenses were not reasonable. Other expenses were also disallowed and listed as “Unreasonable Expenses”.
The husband’s updated Financial Statement was filed 20 January 2015. In “Part N” of the document, the total amounts are recorded:
a)For Children: $278
b)Other Adults: $365
At [61] of the reasons of the primary judge, the following calculation table is included:
Calculation of the Husband’s Relevant Income & Expenditure1
Total Weekly Income
$2,330
Total Weekly Expenses
$3,141
Unreasonable Expenses:
The Child’s Expenses
$356
Gifts
$50
Part of Rent Attributable to Child
$50
Part of Loan Repayment to [the brother]
$150
Total Unreasonable Expenses
$606
Total Expenses
$3,141
Minus Unreasonable Expenses
($606)
Minus Current Maintenance
($720)
Total Reasonable Expenses
$1,815
[Husband’s] Capacity
Income
$2,330
Minus Reasonable Expenses
$1,815
[Husband’s] Total Capacity
$515
1.The figures in this table have been taken from the husband’s Financial Statement filed in these proceedings.
It is clear that the primary judge has incorrectly entered “The Child’s Expenses” as $356 when that amount should have been $278, in accordance with the husband’s financial statement filed 20 January 2015.
Therefore, the calculation of the husband’s relevant income and expenditure should be amended to the following:
Calculation of the Husband’s Relevant Income & Expenditure
Husband’s Capacity
Total Weekly Income
$2,330
Minus Reasonable Expenses
$1,893
Husband’s Total Capacity
$437
The appeal has merit; clearly the correct sum is $437. In oral submissions, the wife conceded that an error had been made and the appeal should succeed.
The original order contains a clear mistake which can be remedied by re-exercising and the substitution of the correct figure. There is no need for a rehearing as no other issues were raised in this appeal. The new order should be dated from 30 January 2015.
The husband paid the wife the original spousal maintenance order of $515 from 30 January 2015 to 28 April 2015. The husband therefore overpaid the wife $78 per week for 13 weeks. In total, the husband has overpaid the wife $1,014.
This Court is mindful that the wife is without a consistent income, although she has received some money from the husband’s superannuation fund. It would therefore be appropriate that the wife repay the sum of $1,014 within three months of the date of the orders.
Cross-Appeal
It is the position of the wife that the primary judge erred by including part of the loan repayments the husband makes to his brother in the calculation of his relevant income and expenditure. The wife questions the validity of the loan and also complains that, if genuine, it was arranged after the parties divorced. It is her contention that the amount payable to her for spousal maintenance should not be reduced because of that factor.
The husband’s brother filed an affidavit on 3 November 2014, where it is recorded that he extended an interest free loan to the husband in the sum of $7,000. The loan was repayable in monthly instalments of $1,000, commencing November 2014. As the parties divorced in September 2014, there is no doubt this loan was arranged after the parties divorced. The loan has been repaid in part.
In his affidavit filed 10 December 2014, the husband references this loan as necessary to meet interim spousal maintenance payments and other obligations. He also references non-refundable fees he incurred when engaging counsel, who ultimately did not appear for the husband.
In the husband’s Financial Statement filed 20 January 2015, before the judge he records a weekly loan repayment of $250 to his brother. At “Part K” of the Financial Statement, the husband notes it is a personal loan of $5,000. This reduction in the loan amount reflects repayments already made by the husband to his brother.
In the reasons of the primary judge, the following findings were made as to the loan:
41.I note that the husband owes his brother $5,000. The husband has indicated that they agreed to a repayment of $250 per week. I note that his brother has already agreed to defer the initial repayments. Given that the debt is for $5,000, I do not consider that it is unreasonable to not allow the $250 that is claimed per week and reduce that to $100 per week. This would see the loan repaid in 12 months. Furthermore the brother was not called to give evidence.
The wife disputes the legitimacy of the loan, and also argues that no provision was made for loans she had to take out to cover previous contraventions of the husband when he failed to pay maintenance on certain occasions. However, the wife did not cross-examine the husband’s brother, even when invited to do so by the primary judge:
HER HONOUR: Okay. What about the brother? What do you want to ask him questions about?
[WIFE]:I don’t need to ask him questions either.
HER HONOUR: Okay. Then there’s no need for an application for telephone evidence because there will be no questions and therefore no cross-examination so ‑ ‑ ‑
(Transcript 30 January 2015, p.9, l. 24 – 31)
In oral submissions in the appeal, the wife referenced where in the transcript she had cross-examined the husband regarding the purpose of the loan, in an attempt to demonstrate it was unreasonable:
[WIFE]:Now, in both – or the last two financial statements, you’ve put your loan from [your brother] and your barrister’s fees as liabilities? Yes, I have.
Yet your loan from your brother, wasn’t that post-divorce? And for the purpose of you engaging a barrister, wasn’t that your choice, and irrelevant to the maintenance case? I can’t see how a liability of a barrister is not part of the case.
Well, I’m sorry, but if I – hypothetically, if I was to do that
HER HONOUR: No, no, don’t – let me worry about that. I understand what has been paid, and I can make a decision about that. You don’t need to ask him about that.
[WIFE]:Okay. Thank you, your Honour.
(Transcript, p.92, l.11 – 24)
[WIFE]:All right. So if I had gone out, got a loan for 7000, said to you, “I want to engage a barrister for this hearing,” and then put it down as a liability, would you find that acceptable? I’m not too sure where you’re coming from, with respect.
Well, exactly the same as what you have done. You have gone out and got a loan? Yes.
Right?Yes.
And you’ve then put that down as a liability as though it was my problem. If I had done the same thing, wouldn’t you object to me putting‑ ‑ ‑?‑‑‑But didn’t you put down
HER HONOUR: I’ve said to you I will deal with that.
[WIFE]:All right.
HER HONOUR: You don’t need to argue with him about it.
[WIFE]:Okay.
(Transcript 30 January 2015, p.92 – 93, l. 45 – 47, l. 1 – 16).
While I appreciate the wife did attempt to challenge the loan, she has failed to demonstrate any error on part of the primary judge. It seems that the wife understandably complains that a loan incurred after divorce should not be included in the property pool for the purposes of a property matter. Here, the relevant question was that of the husband’s reasonable capacity in the context of spousal maintenance, which requires a different examination.
The issue is whether the primary judge properly considered the matters in s 75(2) of the Act, in particular sub para (d)(i) and (g) which provide:
(d)commitments of each of the parties that are necessary to enable the party to support:
(i)himself or herself; and
…
(g)where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
The question of whether a debt incurred after separation should be taken into account as to the husband’s ability to “reasonably” pay maintenance requires some examination. In Freestone & Freestone [2013] FamCAFC 190 the Full Court said:
32.…What his Honour needed to find, as is clear from s 72(1) of the Act, was that the husband was, or was not, “reasonably able” to pay maintenance.
33.The meaning of the words “reasonably able” as it is used in s 72(1) was explained in the following way by Ellis J (with whom the other members of the Full Court agreed) in Curnow & Curnow (unreported, Full Court of the Family Court of Australia, 28 April 1997):
In my judgment, a party is only liable to maintain the other party to the extent that the first-mentioned party is reasonably able to do so. In determining whether a party is reasonably able to support or contribute to the support of another party, one should have regard to the income of the first-mentioned party and then the unavoidable, non-discretionary expenses of that party, including his or her reasonable living expenses. After that exercise, one can consider the amount, if any, from which the first party may be able to contribute to the maintenance of the other party.
(emphasis per original)
There are some unusual factors in this matter as the parties have little property between them.
In order for the cross-appeal to succeed, the wife must demonstrate an error on the part of the primary judge. The wife did not challenge the husband’s brother as to the existence or purpose of the loan. In the circumstances, the primary judge was therefore entitled to accept the existence of the loan and as a reasonable expense of the husband. The discretion of a primary judge to make a decision upon the facts and evidence before them is a principle well understood. In House v R (1936) 55 CLR 499 at 504-505, it was explained:
It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so.
The cross-appeal should be dismissed.
costs
The Appeal
At the conclusion of the hearing today, I asked the parties for submissions on costs.
The husband seeks payment of his costs, including the fee to file the Notice of Appeal.
The wife submitted she would be unable to pay the costs of the appeal as she is without a stable income and an order for costs would cause her financial hardship.
There will be no order as to costs. Instead, an order for costs certificates will be made as there was clearly an error by the primary judge, and such an error affected the proper exercise of discretion by the primary judge (De Winter & De Winter (1979) FLC 90-605).
In these circumstances, it is appropriate to order that each party be granted a costs certificate, pursuant to the Federal Proceedings (Costs) Act 1981 (Cth) (“the Costs Act”).
The husband should be granted a costs certificate pursuant to s 9 of the Costs Act.
The wife should also be granted a costs certificate, pursuant to s 6 of the Costs Act.
Cross-Appeal
The cross-appeal is dismissed and is without merit. The wife explains that she did attempt to settle the matter with the husband but to no avail. There will be no order as to costs or provision of a costs certificate.
I certify that the preceding forty-six (46) paragraphs are a true copy of the reasons for judgment of the Honourable Justice May delivered on 11 June 2015.
Associate:
Date: 11 June 2015
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