MAYDER & RACINE
[2020] FCCA 49
•15 January 2020
FEDERAL CIRCUIT COURT OF AUSTRALIA
| MAYDER & RACINE | [2020] FCCA 49 |
| Catchwords: SPOUSAL MAINTENANCE – Whether the husband should pay spousal maintenance after 10 years of separation to the wife who is working. CHILD SUPPORT – Whether there ought to be a Departure Order from the father’s Child Support Assessment. |
| Legislation: Family Law Act 1975 (Cth), ss.72, 74, 75(2), 79 |
| Cases cited: Bevan & Bevan [2013] FamCAFC 116 |
| Applicant: | MR MAYDER |
| Respondent: | MS RACINE |
| File Number: | MLC 12651 of 2016 |
| Judgment of: | Judge Small |
| Hearing dates: | 1 & 2 April 2019 |
| Date of Last Submission: | 2 April 2019 |
| Delivered at: | Melbourne |
| Delivered on: | 15 January 2020 |
REPRESENTATION
| Counsel for the Applicant: | Self-represented |
| Solicitors for the Applicant: | Not applicable |
| Counsel for the Respondent: | Self-represented |
| Solicitors for the Respondent: | Not applicable |
ORDERS
The Respondent Wife’s application for property settlement, spousal maintenance, and a Child Support Departure Order, set out in her Amended Response filed on 18 March 2019 is hereby dismissed.
All extant applications are otherwise dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Mayder & Racine is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLC 12651 of 2016
| MR MAYDER |
Applicant
And
| MS RACINE |
Respondent
REASONS FOR JUDGMENT
Introduction
This is a property, spousal maintenance and child support matter arising from the breakdown of the marriage between Mr Mayder (“the Applicant” or “Mr Mayder”) and Ms Racine (“the Respondent” or “Ms Racine”).
The Applicant, whose Initiating Application sought only parenting orders, maintains that a property division would not be just and equitable, and is seeking orders that the Response be dismissed.
The Respondent seeks an order that she retain 80% of a disputed property pool, plus orders for spousal maintenance, including lump sum retrospective maintenance, and a Child Support Departure Order.
Therefore, the issues to be decided in this matter are:
A.Is it just and equitable to alter the parties’ property interests?
B.If it is just and equitable, what are the property interests of the parties and what is their value?
C.What were the parties’ contributions to the property?
D.Should there be an adjustment to the contribution-based entitlements of the parties after a consideration of the matters set out in s.75(2) of the Family Law Act 1975 (Cth) (“the Act”)?
E.In light of the above findings, what Orders should be made to effect a just and equitable division of property between the parties?
F.Should an order be made for the Applicant to pay the Respondent spousal maintenance?
G.Should the Court make a Child Support Departure Order in relation to the Applicant’s Child Support Assessment for the parties’ son?
Background
Mr Mayder is 45 years old, having been born on … 1974. He is a customer service officer. He is in good health.
Mr Mayder has re-partnered with Ms C (“Ms C”), whom he met in 2015. They were married on … 2017. Mr Mayder and Ms C entered into a Loan Agreement on 25 May 2017 and a Financial Agreement on 30 May 2017, prior to their marriage.
Mr Mayder lives with Ms C in her home in Suburb F, which was extensively renovated between about 2016 and 2018. Ms C owned that property before meeting Mr Mayder.
Ms Racine is also 45 years old, having been born on … 1974. She currently works part-time in her own business as a health care worker. She is in good health. Ms Racine has not re-partnered, and lives with the parties’ son, X born … 2006 (“X”), in a house she has bought in Street G, Town H.
The parties met in … 1999 and commenced cohabitation in … 2000. They were married on … 2002.
On Mr Mayder’s evidence, the parties separated on a final basis in 2009, with him paying child support for X since that time.
On Ms Racine’s evidence, the parties separated for the first time in August 2009. Her evidence is that they recommenced a relationship in … 2013, although they did not live together or share finances. She says the marriage ended on a final basis in April 2015.
The parties were divorced on 16 October 2016.
X is the parties’ only child. Final parenting orders were made by consent on 14 December 2017 that provide, inter alia, for the parties to have equal shared parental responsibility for X, and that X live with his mother and spend specified time with his father.
The parties agree that in 2009, the family home at Street T, Suburb U (“the Street T, Suburb U property”), which they had purchased in 2001, and to which they had completed renovations in 2006, was sold and its sale proceeds divided between them. The net proceeds of sale were approximately $313,000. The parties agreed to divide their property so that Ms Racine received 60% and Mr Mayder 40%.
From the net proceeds of sale, Ms Racine received $185,000 and Mr Mayder received $128,000.
Ms Racine asserts that she actually received only 55% of the property because Mr Mayder did not pay his agreed half share of the liability against a motor vehicle that she retained in the settlement. That motor vehicle was worth $30,000 at the time and was encumbered by a $30,000 liability, which was paid out by Ms Racine from the sale proceeds she received from the Street T, Suburb U property.
Mr Mayder denies that the agreement obliged him to pay anything towards the loan attached to the motor vehicle, and that the agreement for a 60/40 division was in relation to the Street T, Suburb U property sale proceeds only, although he agrees that Ms Racine was to ( and did) retain the vehicle.
In addition, each party retained some chattels such as furniture and kitchen appliances, but they are in dispute as to the worth of those chattels.
The parties did not enter into a Financial Agreement under Part VIIIAB of the Family Law Act 1975 (Cth) (“the Act”) in relation to that settlement. Nor did they obtain consent orders under Part VIII of the Act. The Applicant says that the parties each received legal advice as to the terms of the settlement, but that is denied by the Respondent.
The Respondent used her share of the proceeds of sale from the Street T, Suburb U property towards the purchase of a property in Suburb J, which she purchased in 2009, renovated and then sold in 2011.
It is Ms Racine’s evidence that she used the sale proceeds from the Suburb J property to buy shares in a “start-up” investment scheme which promised her substantial return on her investment over a short period. Unfortunately, that scheme never eventuated and it is her evidence that she lost her entire investment of $120,000 as a result of the fraud perpetrated by the scheme’s operator. She then rented for a couple of years before purchasing her current property at Street G, Town H (“the Street G, Town H property”). It was her evidence at trial that her parents paid the deposit for that property, and the remainder of the purchase price was met by way of a mortgage loan of more than $500,000.
Mr Mayder lived in several rented properties after the parties’ separation before he began to live with Ms C in about … 2016.
While Ms C’s home was being renovated, she and Mr Mayder lived in rented premises in Suburb F.
Mr Mayder issued his Initiating Application, seeking parenting orders only, on 23 December 2016.
Ms Racine filed her Response seeking parenting, property, spousal maintenance and child support orders on 24 January 2017.
After several interim hearings, the Final Hearing of the matter took place on 1 and 2 April 2019, with the only witnesses being the parties, who were both self-represented. Each was cross-examined by the other.
At the end of the proceedings I reserved my judgment.
Issues and Evidence
It is not possible to refer to every fact and/or matter raised in the trial of these proceedings and nor is it necessary to do so. The parties should understand that I have had regard to the whole of the evidence, including filed Affidavits, my notes and the transcript from the trial on 1 and 2 April 2019, and if I have not referred to a particular fact or matter it does not mean that I have not considered it.
Issue A: Is it just and equitable to alter the parties’ property interests?
This question arises from the operation of s.79(2) of the Act, which states that a Court may only make orders altering the property interests of married parties if it is just and equitable to do so.
As the High Court of Australia stated in Stanford v Stanford (2012) 293 ALR 70 (“Stanford”) at paragraph 37, the first question that must be asked when a court is considering whether to make orders altering parties’ property interests is whether:
“it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.”
The parties’ property interests at the time of trial
The parties’ property interests at the time of trial, gleaned from their Financial Statements filed 14 March 2019 (wife), and 15 March 2019 (husband), the wife’s Outline of Case Document filed 26 March 2019, and their oral evidence given at trial, may be set out as follows:
Assets
Owner
Value
The Street G, Town H property
Wife
$630,000
The husband’s current interest in the property at Street D, Suburb E (“the Street D, Suburb E property”)
Husband
Nil, although he may have a possible unvested and unquantified equitable interest as a result of labour and materials he contributed to renovations.
The husband’s interest in the plant & equipment owned by K Pty Ltd
Husband
Nil
Motor Vehicle L
Wife
$30,000
Motor Vehicle M
Husband
$11,000
Chattels
Wife
$30,000
Husband
$23,800
Bank balance: Bendigo Bank
Wife
$807
Bank balance: ANZ
Wife
$500
Bank balance: Bendigo Bank
Husband
$200
Shares V
Husband
$2300
Total assets
$728,607
Liabilities
Mortgage loan attached to the Street G, Town H property
Wife
$380,000
Personal loan
Wife
$125,000
Motor vehicle loan
Wife
$30,000
HECS debt
Wife
$22,000
Credit card: Bendigo Bank
Wife
$5,000
Motor vehicle loan
Husband
$8000
Credit cards: ANZ
Husband
$15,986
Credit card: Citibank
Husband
$22,922
Credit card: Westpac
Husband
$3500
Director’s guarantee overdraft: ANZ
Husband
$42,000
Personal loan: Ms C
Husband
$70,000
Personal loan: Mr A & Ms B
Husband
$35,340
Debt to N Pty Ltd
Husband
$4,000
Debt to former lawyers
Husband
$21,810
Total Liabilities
$785,558
Nett Assets excluding superannuation entitlements
($56,951)
Superannuation entitlements
Wife
$64,378
Husband
$61,631
Total superannuation
$126,009
Total Nett Assets including superannuation
$69,059
In Stanford, the High Court stated, at paragraph 42:
“In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and wife. No less importantly, the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the marital relationship. That is, any express or implicit assumption that the parties may have made to the effect that existing arrangements of marital property interests were sufficient or appropriate during the continuance of their marital relationship is brought to an end with the ending of the marital relationship. And the assumption that any adjustment to those interests could be effected consensually as needed or desired is also brought to an end. Hence it will be just and equitable that the court make a property settlement order. What order, if any, should then be made is determined by applying s. 79(4).”
In Bevan & Bevan [2013] FamCAFC 116 (“Bevan”), at paragraph 70, the Full Court of the Family Court of Australia said that the circumstances described in that passage of the Stanford judgment “encapsulates the vast majority of cases”.
However, if the Court is faced with a situation where one party claims that a property division would not be just and equitable, the High Court in Stanford provides only some guidance as to what needs to be considered in determining justice and equity:-
“[36] The expression “just and equitable” is a qualitative description of a conclusion reached after examination of a range of potentially competing considerations. It does not admit of exhaustive definition. It is not possible to chart its metes and bounds.”
and
“[40]…whether making a property settlement order is “just and equitable” is not to be answered by beginning from the assumption that one or other party has the right to have the property of the parties divided between them or has the right to an interest in marital property which is fixed by reference to the various matters (including financial and other contributions) set out in s 79(4). The power to make a property settlement order must be exercised “in accordance with legal principles, including the principles which the Act itself lays down”. To conclude that making an order is “just and equitable” only because of and by reference to various matters in s 79(4), without a separate consideration of s 79(2), would be to conflate the statutory requirements and ignore the principles laid down by the Act.”
The Full Court in Bevan further explored the issue of the meaning of “just and equitable” at paragraphs 83-85:
“[83] Just as the expression “just and equitable” does not admit of exhaustive definition, it is not possible to catalogue the “range of potentially competing considerations” that may be taken into account in determining whether it is just and equitable to make an order altering property interests. However, in our view, it would be a fundamental misunderstanding to read Stanford as suggesting that the matters referred to in s 79(4) should be ignored in coming to that decision. Indeed, such a reading would ignore the plain words of s 79(4), which make clear that in considering “what order (if any)” to make, the court must take into account the matters referred to in that subsection.”
“[85] This requirement to consider the s 79(4) matters in determining whether it is just and equitable to make any order provides fertile ground for potential conflation of the two different issues, which the High Court has warned against. However, this potential will not be realised in many cases because of what the plurality said at [42] about the “just and equitable” requirement being “readily satisfied”. But there will be a range of cases, of which arguably the present is a good example, where determining whether it is just and equitable to make any order altering property interests will not be so clear cut and will therefore require not only separate but very careful deliberation.”
In summary, only if the Court first determines that it is just and equitable to make an order altering current property interests, may a court then give full consideration to the matters set out in s.79(4), which deals with contributions and what are generally called the “future needs” of the parties.
I consider that the present case is not one which falls into “the vast majority of cases” where the separation of the parties has led to their inability to share the use of existing property.
It is one of “the range of cases…. where determining whether it is just and equitable to make any order altering property interests (is) not so clear cut and will therefore require not only separate but careful deliberation”.
I will now embark on that separate and careful deliberation.
The date of separation is disputed between the parties.
The Respondent says the parties separated first in 2009 and then reconciled in 2013, before finally separating in 2015. She says that between 2013 and 2015 the parties went to events together, went on holidays together with X as a family, and that it was known to friends and family that although they did not live together, or share finances after 2009, the parties had reconciled.
The Applicant says that the parties separated in 2009, and that was when he began paying child support for X pursuant to a Child Support Assessment from the Department of Human Services (Child Support). It is his evidence that while the parties continued to spend time together as they were jointly parenting X, and attended events as a family, and even discussed reconciliation between 2013 and 2015, they never actually reconciled. He says he continued to pay child support for X during that period, and that the parties’ finances were separate from 2009. It is common ground that they did not live together.
The person who asserts a fact in legal proceedings bears the onus of proof - that is, the burden of proving that fact to be true. In this case, the fact to be proven is that the parties reconciled as a married couple in 2013. Ms Racine bears the onus of proving that fact on the balance of probabilities (see s140 Evidence Act 1995 (Cth)). That is, she must prove to the Court that it is more probable than not that the parties reconciled in 2013.
On the evidence before the Court – and in particular the evidence of Mr Mayder having paid child support for X since 2009, with no break between 2013 and 2015, and the evidence of Mr Mayder that while he was actively considering reconciling with Ms Racine during that time, he never took any steps to make the relationship formal again – I find that, on the balance of probabilities, the parties separated in 2009, and, in August 2009, after they had separated, they sold their jointly owned house, divided its sale proceeds and jointly owned chattels, and went their separate ways, connected thereafter essentially only by their common parentage of their son.
It does appear that the parties were not particularly antagonistic until 2015, as evidenced by Ms Racine’s performing work for the Applicant’s company in 2013-2014, but spending time together as a family does not constitute reconciliation.
The parties have not owned property together since 2009, and only Ms Racine currently has a legal interest in any real property.
It is the Applicant’s case that the Respondent was quite happy with the property division that was effected in 2009 until he met and married his current wife, who is a successful businesswoman. It is his evidence that the Respondent’s jealousy and anger about the Applicant’s remarriage, and grievances she has about his level of child support for X are what caused her to seek a property settlement under Part VIII of the Act when he had issued proceedings in this Court for parenting orders only.
I note in that regard that there was a delay of some seven years and five months between the division of the property in August 2009 and the Respondent filing her Response seeking property orders in January 2017.
I note further that she had made no other attempt to proactively seek a further alteration in the parties’ property interests until that time.
In this context, I note the comments of the Full Court in Bevan, who stated, in that regard at [119] and following:
119. In our view, if the three “fundamental propositions” can truly accommodate any consideration the parties gave to how their property interests should be arranged during the continuance of their marriage, they must also accommodate express consideration given to how those interests should be arranged after separation. Indeed, the argument for doing so is stronger, given that any mutual understanding is less likely to have been affected by extraneous influences that would be at work whilst their relationship was intact.
120. This is not to suggest that any understanding between spouses would be conclusive of any later dispute, since an agreement can only be conclusive when the s 90G(1) formalities are satisfied or when a s 90G(1B) declaration is made. Long experience in this jurisdiction teaches that there will be cases in which other factors will be present that would make it just and equitable to make an order inconsistent with the previous understanding, even one reached after separation. But the reasoning in Stanford makes clear that such an understanding would have to be a factor to be taken into account in deciding whether it would be just and equitable to make orders altering property interests. […]
121. Once it is accepted that a prior agreement or representation is relevant to the justice and equity of the outcome, we consider that the period of time a party has allowed to elapse before making a claim inconsistent with that agreement or representation must also be a material factor.
I therefore consider the Respondent’s failure to seek a further alteration of the parties property interests until the Applicant made his application for parenting orders, as a relevant factor in deciding whether it is just and equitable to alter the parties’ current property interests.
In the years after the division of the parties’ then property in 2009, the Respondent bought, renovated and sold the Suburb J property, invested in shares which resulted in her losing the sale proceeds from that property, and, after renting for some time, purchased the Street G, Town H property.
After 2009, the Applicant lived in rental accommodation until he met and moved in with his current wife, Ms C.
The Respondent’s evidence is that the parties reconciled in January 2013 and separated finally in 2015. She says that in August 2013, with her assistance, the Applicant established his business, K Pty Ltd (“K Pty Ltd”).
The Applicant denies that the parties reconciled in January 2013, but concedes that the Respondent did perform some administrative work for K Pty Ltd, for which, he says, she was paid appropriately.
I have already found that the parties had separated by the time they divided their property in August 2009, and that there was no reconciliation in any substantial terms after that.
That is not to say that Ms Racine is being deceitful in saying that the parties reconciled in 2013. It is always possible for one party to a relationship to have a genuinely-held different view of the nature of that relationship from the other party.
So, I must consider the evidence about what happened after August 2009 to determine whether it is just and equitable to make an order altering the parties’ property interests as they are set out in the table above.
It is the Applicant’s evidence that, in order to operate, K Pty Ltd purchased computer and like equipment from the liquidators of O Pty Ltd, a company owned by his father, Mr A. The Applicant says he had worked for O Pty Ltd for some years before its liquidation.
In addition, he says that K Pty Ltd used plant and equipment which was actually owned by his father, rather than by O Pty Ltd Pty Ltd, and that K Pty Ltd then paid for its use of that plant and equipment by way of paying his parents’ rent and other expenses.
The Applicant’s evidence is that the plant and equipment sold by him during the operation of K Pty Ltd was sold on behalf of his parents, who then loaned him that money, which he is required to repay. It was his evidence at trial that he had repaid some of that money, and also that he had paid his parents directly for some of the items of plant and equipment sold.
That the plant and equipment used by O Pty Ltd before its liquidation was owned not by that company but by Mr Mayder’s father, is supported by a letter from P Accountants, Public Accountants, which was annexed to the Applicant’s affidavit affirmed and filed on 15 March 2019.
That letter, dated 12 December 2013, was addressed to W Pty Ltd, the liquidator of O Pty Ltd, in circumstances where there was a dispute between W Pty Ltd and the Applicant’s father about whether the plant and equipment used by O Pty Ltd formed part of the assets to be liquidated, and it confirms the following:
· that Mr A was the director of the company O Pty Ltd, which was liquidated in 2005
· that Mr A purchased the assets of O Pty Ltd from Q Insolvency, the liquidators of that company, using “a personal line of credit secured through the CBA on his residence”
· that no plant and equipment was ever taken up in the balance sheet of O Pty Ltd, the company established by Mr A after the liquidation of O Pty Ltd.
· that “it was always our advice, and Mr (Mr A) Mayder’s intention, that it was him personally that was the purchaser of the assets and that he would make them available to the new entity for use in the business, however it was not to be that the new company would be the owner of the equipment, at that time or any time since.”
· The writer of the letter is “prepared to provide a Statutory Declaration confirming that we believe that the assets are the property of Mr (Mr A) Mayder personally and not O Pty Ltd (in Liquidation) and that at all times that has been and is the case”.
There does not appear to be any evidence that K Pty Ltd, which had been established four months before that letter was written, had bought the plant and equipment it used from either the liquidators of O Pty Ltd, or the applicant’s father, save for Ms Racine’s belief and assertion.
In his oral evidence at trial, Mr Mayder stated that certain items whose sale proceeds amounted to $35,000 were part of the items sold by Mr Mayder on his parents’ behalf, and those sale proceeds were then loaned back to Mr Mayder for the establishment, maintenance, and later closure of K Pty Ltd.
The result of those arrangements, Mr Mayder says, was that he had owed his parents a total of about $70,000.
In other words, the sale proceeds from any plant and equipment sold by him after the establishment of K Pty Ltd that was then loaned to him by his parents, was not in the nature of income to him.
K Pty Ltd ceased trading in March 2018 with liabilities on its balance sheet as at 30 June 2018 of some $250,118, and at the time of trial, in April 2019, Mr Mayder said that he was waiting for a liquidator to be appointed for the company.
I therefore find, on the balance of probabilities, that Ms Racine has failed to prove that K Pty Ltd ever owned the plant and equipment it used in the factory premises from which it operated, and that that plant and equipment is not and never was the property of the Applicant.
In addition, the proceeds of any sales of plant and equipment conducted on his parents’ behalf is not to be characterised as income to the Applicant, but as loans from his parents, now amounting to some $35,340, which he is expected to repay.
I make those findings despite the fact that neither of the Applicant’s parents filed any affidavits in these proceedings, and nor were they issued with subpoenas to give evidence at trial. It was Mr Mayder’s evidence that his father suffers from dementia and that his mother would find the court proceedings too distressing, and that was why he did not ask them to file affidavits in relation to these matters.
In any event, at the date of trial, K Pty Ltd owned no quantified plant and equipment and a large amount of debt, and was, according to Mr Mayder, in the process of being liquidated.
I have noted that after the 2009 division of their property, the parties did not live together again, and that Mr Mayder paid child support for X pursuant to a Child Support Assessment from at least 2009.
However, they were clearly not strangers in subsequent years, as is evidenced by their ongoing issues over child support and X’s care, and by Ms Racine’s involvement in K Pty Ltd’s operations.
Ms Racine now owns the Street G, Town H property subject to its mortgage, a car and household chattels, and she has the credit card, HECS and other liabilities set out in the table above. While she is employed, it is her choice to work part-time while X is at school.
Mr Mayder owns very little in the way of assets: essentially only his car; and an unquantified equitable interest in the Street D, Suburb E property which, on evidence produced at trial, has not yet vested. The most evidence Ms Racine could adduce at trial on that matter was that Mr Mayder had provided materials and labour for some of the renovations to the Street D, Suburb E property.
The Financial Agreement between Mr Mayder and his second wife indicates that Mr Mayder’s interest in that property is confined to an assessment of his contributions to it, and ten percent of any increase in the property’s value between the date of the Financial Agreement and the date of separation, with those calculations only to be performed should he and Ms C separate.
I therefore cannot find that he has any current legal or equitable interest in the Street D, Suburb E property.
Decision: Issue A
In all the circumstances set out above: where the parties have been separated for more than ten years; where they effected a division of their then-existing property in August 2009; where the Respondent made no proactive attempt to seek orders which would supersede that agreement, only seeking those orders in response to the Applicant’s application for parenting orders some seven years later; where the property then existing no longer exists; where the only positive overall equity in the parties’ interests is in their superannuation entitlements, in which they have almost equal balances; where the Applicant has been found not to hold any current equity in the Street D, Suburb E property; where the Applicant has effectively been found to have only debts, which were accumulated after the parties’ separation; and where any alteration of interests might result in the sale of the Respondent’s home to pay down joint debt; I am not satisfied that it would be just and equitable for the Court to make an Order altering the property interests of the parties. I will therefore dismiss the Respondent wife’s application for a property settlement under Part VIII of the Act.
Issues B – E
Because s79(2) of the Act only allows a Court to proceed to consider the issues set out as Issues B – E in paragraph 4 of these Reasons if it is satisfied that it would be just and equitable to do so, and I have found that it would not be just and equitable, in all the circumstances, to alter he parties’ property interests, Issues B – E are moot.
Issue F: Should an order be made for the Applicant to pay the Respondent spousal maintenance?
The Respondent seeks Orders for the Applicant to pay her spousal maintenance of two kinds.
First, she seeks retrospective lump sum spousal maintenance for the years 2009 to 2019.
I explained to the Respondent at trial that the Act does not provide for the payment of retrospective spousal maintenance, and that given the circumstances of this case as set out above, I do not find it “proper” to make such an order. I therefore dismissed that part of her application summarily.
Secondly, Ms Racine seeks ongoing spousal maintenance in the sum of $500 per week, claiming that she cannot meet her weekly expenses from her part-time salary, child support and Centrelink benefits in circumstances where she has the primary care of X.
It is her case that Mr Mayder is able to afford to pay her $500 per week.
Mr Mayder’s case is that Ms Racine cannot meet the threshold of being in need of spousal maintenance and, even if the Court were to find that she does, he does not have the means to satisfy such an order.
The law in relation to spousal maintenance applications is found in ss.72, 74 and 75 of the Act.
S.72(1) states as follows:
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 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 or 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).
S74(1) states that a court may make “such order as it considers proper” for a party to marriage that has broken down to pay for the maintenance of the other party.
Therefore, there are two “limbs” to an application for spousal maintenance:
· first, the Applicant must show that she is unable to support herself adequately for one of the reasons set out in s.72(1); and
· second, the Applicant must show that the Respondent is “reasonably able” to pay the maintenance sought.
The financial circumstances of the parties are set out in their sworn Financial Statements filed 14 March 2019 (Respondent) and 15 March 2019 (Applicant), and in their oral evidence given at trial.
It is Ms Racine’s evidence that at the time of filing her Financial Statement she had been working casually for about seven months (about 30 hours per week) as a self-employed health care worker at R Pty Ltd in Suburb Y, a business owned by her sister. I note that the distance between the Respondent’s home in Street G, Town H and Suburb Y is some 111 kilometres and one hour and 50 minutes’ drive.
It was her evidence at trial that she is unable to find work commensurate with her qualifications anywhere on the Region S, or indeed anywhere closer to her home than Suburb Y, despite having attempted to do so multiple times.
I am not totally convinced by that evidence.
Nevertheless, under cross-examination at trial, Ms Racine stated that she worked an average “anywhere between 10 to 15 to 17 (sessions per week)” and that she earns between $80 and $110 per session for that work. Later in her evidence, she revised that figure, saying that she conducted, on average, 13 one hour sessions per week, and that she travelled to Suburb Y two or three days a week. On those days, Ms Racine stated that she leaves her home in Street G, Town H at about 6:00a.m. and returns at about 8:30 p.m.
It was her evidence that she has a degree in health care, but that that qualification does not make her a health care worker, and nor does it allow her clients to claim a Medicare rebate for her fees.
Ms Racine stated that while her clients know her as “Ms Racine”, they are aware that she is not a health care worker.
She said that she could be working as a professional but that the salary for such positions “is terrible”.
She stated that she performed work for clients, for which she received $80 per session, and that those clients made up approximately half of her business.
She charged $110 per session for her private clients, as that was the amount clients would pay after they received a Medicare rebate, were they eligible for it. In other words, she charged her private clients a fee commensurate with what they would actually pay “out-of-pocket” if they were able to claim a Medicare rebate on a commercial fee for the service.
However, it was her evidence that she had to pay 30% of her income as rental for the room she used at R Pty Ltd. She later revised that evidence to say that she paid $30 per session for the room she used, which meant that she was actually receiving between $60 (sic) and $80 per session. She averaged 13 sessions per week, so her net income before tax from her business would therefore be between $780 and $1040 per week.
When asked, she stated that she only provided sessions by Skype or other electronic means for clients who were travelling internationally, and only after she had been seeing them face-to-face “for some time”.
In addition to the income from her business, Ms Racine received $147.70 per week in Family Tax Benefits and $30 per week in child support from Mr Mayder.
That puts her total income before tax at between $958 and $1218 per week.
It is her evidence that she pays $120 per week in tax, $690 a week towards her mortgage, and $155 per week in rates and other levies.
Under cross-examination by Mr Mayder, Ms Racine was forced to concede that the motor vehicle registration payment on her Motor Vehicle L was not $65 per week as set out in her Financial Statement, but $65 per month, or $15 per week.
She confirmed that she pays $40 per week against her credit card debt of $5000, $250 per week for food for herself and X, and $50 per week for her gas and electricity bill under a payment plan as she owes about $6000 to her gas and electricity supplier. She also stated that she spends $180 a week on petrol driving from Street G, Town H to Suburb Y and back on two or three days per week.
Those payments, even after the adjustment for the motor vehicle registration, add up to $1500 per week, which is considerably more than Ms Racine receives in income, benefits and child support. In addition, those payments do not include what might be called more discretionary payments she declares, such as entertainment and children’s activities.
In a rather curious exchange, Mr Mayder asked Ms Racine whether she still smoked cigarettes and she replied that she did. When asked how she afforded to do so when she had not declared any payment for cigarettes in her Financial Statement, Ms Racine stated: “I don’t buy market cigarettes”. She then said that she spent about $30 per week on cigarettes, and that she had counted that amount under “maybe entertainment”. I found that evidence quite unsatisfactory, as it suggests that Ms Racine is perhaps avoiding paying tax on her tobacco consumption.
Nevertheless, it is quite clear to the court that Ms Racine’s expenses exceeded her income at the time of trial.
However, I am not satisfied that she could not be deriving more net income from her business.
She would have to pay for rooms from which to conduct that business no matter where she works, and it seems ridiculous for someone in her financial circumstances to be paying $180 per week in petrol costs to work almost 2 hours from her home. I am sceptical about her evidence that she is unable to find any work closer to home.
X is now a teenager, and does not need his mother to work part-time or casually so that she can care for him. Any argument to the contrary is contradicted by Ms Racine’s own evidence that on the two or three days per week that she does work, she leaves home at about 6:00 a.m. and does not return until about 8:30 p.m. Were she to work closer to home, she would be more available to care for X should she consider that he needs that care before and after school each day.
I am therefore not satisfied that Ms Racine is: “unable to support herself adequately whether:
(d)by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;
(e)by reason of age or physical or mental incapacity for appropriate gainful employment; or
(f)for any other adequate reason;
having regard to any relevant matter referred to in subsection 75(2)”.
Even if I am wrong in coming to that conclusion, I am not satisfied that Mr Mayder is in a financial position to be able to make payments of any sum to Ms Racine by way of spousal maintenance.
Ms Racine made much at trial of Mr Mayder being able to travel overseas with his wife on multiple occasions, but it was Mr Mayder’s evidence that it is his wife, who operates a successful business, who bears most of the costs of that travel, and as I explained to Ms Racine at trial, Ms C is not obliged to pay her spousal maintenance.
Ms C’s income of $1980 per week, declared by Mr Mayder in his financial statement sworn 13 March and filed 15 March 2019, provides him with a financial resource upon which he might draw from time to time, but it is not his income.
Mr Mayder’s financial position is dire. It was his evidence at trial, unrefuted by Ms Racine, that his company, of which he is the sole director and shareholder, is insolvent and that a liquidator would shortly be appointed to wind it up.
The company has debts of over $250,000, and while he owns a Motor Vehicle M, that vehicle is worth $11,000 and has an attendant liability of about $8000. His only other assets appear to be household contents worth about $8000, and jewellery and musical instruments worth about $15,800.
His liabilities, not including the debts of his company or his motor vehicle finance, come to more than $200,000, and it was his evidence that he has sought the assistance of a not-for-profit organisation that assists people in debt so that he can attempt to come to some arrangement with his creditors without declaring himself bankrupt.
I am satisfied that the documents provided in relation to his debt to his current wife are genuine, although I found his evidence about his debts to his parents confusing and somewhat contradictory.
I accept his evidence that he now earns a salary of $85,000 per year, but I am not satisfied on the evidence of his Financial Statement, and based on his evidence at trial, that that salary is enough for him to meet his usual living commitments as well as to pay his considerable debts.
Decision: Issue F
In the financial circumstances of the parties as set out above, I find, on the balance of probabilities, that Ms Racine does not meet the threshold set out in s.72(1) of the Act, and that even if she were able to prove that part of her application, Mr Mayder does not have the means to satisfy a spousal maintenance order because of his accumulated debts.
In all the circumstances of this application, including the fact that no application for spousal maintenance was made until Mr Mayder made an application for parenting orders, I do not consider it “proper” for me to make a spousal maintenance order as sought by Ms Racine more than 10 years after the parties separated.
Issue G: Should the Court make a Child Support Departure Order in relation to the Applicant’s Child Support Assessment for the parties’ son?
The evidence in relation to child support is simply that the Department of Human Services (Child Support) (“the Child Support Agency”) collects child support from Mr Mayder and pays it to Ms Racine pursuant to a Child Support Assessment made before Mr Mayder began his current employment.
At the time of trial, Ms Racine had applied to the Child Support Agency for a review of that Assessment, but the result was not yet known.
Mr Mayder conceded that, as he was now in employment, he would have to pay more child support for X.
The process for seeking a change to the Child Support Agency’s Assessment is for the carer parent to raise an Objection to the Assessment. If that Objection is not accepted, then he or she can seek a review within the Child Support Agency, and if not satisfied with that, an appeal can then be made to the Australian Administrative Appeals Tribunal (“the AAT”). If the carer parent is unsatisfied with the decision of the AAT, and he or she believes that the AAT has made an error of law in making its decision, he or she can then seek a Departure Order from this Court.
Decision: Issue G
The appropriate process was explained to Ms Racine at trial and she conceded that she had not gone through the proper channels before seeking an Order from this Court.
I will therefore dismiss her Application for a Child Support Departure Order.
Conclusion
The evidence in this case has been detailed and complicated.
Ms Racine clearly carries animus towards Mr Mayder and feels aggrieved by his failure to reconcile with her after the parties re-engaged with each other in 2013.
She sees him married to a successful businesswoman, with all the lifestyle advantages that that entails, while she struggles to maintain herself and the parties’ son.
Both parties impressed at trial as holding their disparate views genuinely, although the evidence provided was sometimes vague and contradictory in content, and it would seem that neither party is particularly concerned if they do not strictly adhere to the law in relation to tobacco tax and old-age pensions.
Ms Racine will no doubt be bitterly disappointed with the result of these proceedings. She finds herself in difficult financial circumstances, but she cannot expect her former husband to rescue her from those circumstances 10 years after the parties’ separation, when they divided their property soon after separation and spent the proceeds in such a way that there is no longer any joint property to divide.
I certify that the preceding one hundred and thirty five (135) paragraphs are a true copy of the reasons for judgment of Judge Small
Date: 15 January 2020
Key Legal Topics
Areas of Law
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Family Law
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Statutory Interpretation
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