Milano and Nolan

[2018] FCCA 3901

FEDERAL CIRCUIT COURT OF AUSTRALIA

MILANO & NOLAN [2018] FCCA 3901

Catchwords:
FAMILY LAW – Property – spousal maintenance – litigation guardian appointed – consideration of urgent and/or interim spousal maintenance – consideration of ‘immediate need’ – whether parties have separated.

Legislation:

Family Law Act 1975 (Cth), ss.74, 77

Cases cited:

Ashton & Ashton (1982) 8 Fam LR 675

Gyopar v Gyopar (1986) FLC 91-769
Hall & Hall [2016] HCA 23

In the Marriage of Hayson (1987) 11 Fam LR 593

In the Marriage of Lane [1976] FLC 90-055
Sadlier & Sadlier [2015] FamCAFC 130

Applicant: MS MILANO

Respondent: MR NOLAN
(BY HIS LITIGATION GUARDIAN)

File Number: MLC 12093 of 2017

Judgment of: Judge Mercuri

Hearing date: 19 December 2018

Date of Last Submission: 19 December 2018

Delivered at: Melbourne

Delivered on: 19 December 2018

REPRESENTATION

Counsel for the applicant: Mr Fuller

Solicitors for the applicant: Velos & Velos

Counsel for the respondent: Ms Teicher

Solicitors for the respondent: Davies Moloney Barristers & Solicitors

ORDERS

1. Within 7 days, the respondent pay to the applicant the following lump sums pursuant to section 77 of the Family Law Act 1975 (Cth):

   (a)the sum of $4,500 for the applicant’s periodontist fees; and

   (b)the sum of $745 for the applicant’s dentist fees.

2. All other extant applications be otherwise adjourned for an interim defended hearing on 15 February 2019 at 10:00am.

3. The matter be adjourned for final hearing on 7 October 2019 at 10:00am (with an estimated hearing time of 2 days).

4. In the event that the matter resolves prior to the adjourned date, the parties be at liberty to contact the chambers of Judge Mercuri or the chambers of Judge Small with proposed final consent orders.

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

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 12093 of 2017

MS MILANO

Applicant

And

MR NOLAN
(by his litigation guardian)

Respondent

REASONS FOR JUDGMENT

(revised from the transcript)

1. These reasons for judgment were delivered orally. They have been corrected from the transcript. Grammatical errors have been corrected and an attempt has been made to render the orally delivered reasons amenable to being read.

2. This is an application for urgent orders made pursuant to section 77 of the Family Law Act 1975 (Cth) (“the Act”) by the applicant wife.

Background

1. Based on the affidavit material filed to date, the uncontroversial background to this matter is briefly as follows.  The applicant is 64 years of age, has four adult children from a previous relationship and met the respondent in 2010 in response to an advertisement placed by the respondent in a … newspaper.  The applicant and the respondent married in 2011 and lived together in the former matrimonial home, being a unit in Property A. 

2. This unit was owned by the respondent at the time of the commencement of the parties’ relationship.  The respondent is 97 years of age and, in September 2014, suffered a stroke which resulted in him moving out of the former matrimonial home and into an aged care facility.  The respondent has one adult daughter from a previous relationship.  By an enduring power of attorney dated …1992, the respondent appointed his daughter as his sole attorney.  A dispute seems to have arisen between the applicant wife and the respondent’s daughter in 2015 with respect to certain funds which the applicant sought to be used to renovate the former matrimonial home.

3. The applicant filed proceedings in VCAT seeking to have the respondent’s daughter removed as the respondent’s attorney.  Those proceedings were heard over the course of two days in May and June 2018 and the Tribunal member handed down written reasons for their decision on 26 October 2018.  Ultimately, the application by the applicant to remove the respondent’s daughter as attorney was unsuccessful. 

4. The applicant also filed an initiating application in this Court in November 2017 seeking final property orders, although I note that the applicant did not specify with any precision the orders that she sought, other than an order that the respondent pay the applicant the sum of $655 per week by way of spousal maintenance.  There were various interim orders which were also sought at that time, but it is not necessary for the purpose of these reasons to go into those in any great detail.

5. At the first return date before me in January 2018, the parties advised the Court of the VCAT proceedings in relation to whether the respondent’s daughter would remain power of attorney.  That was relevant as it was agreed that, given the respondent’s condition, a litigation guardian needed to be appointed in these proceedings and the question was whether the respondent’s daughter ought to be appointed in that capacity.  The proceedings in this Court were adjourned on various occasions to allow the proceedings before VCAT to be concluded. 

6. On 30 November 2018, the applicant filed a further amended initiating application in which various other orders were sought. The matter was listed before me on 5 December 2018 but was unable to be reached. In light of the VCAT decision, the applicant did not oppose an order being made appointing the respondent’s daughter as litigation guardian in these proceedings and that order was made. The applicant’s representative also sought an urgent hearing to press an application under section 77 of the Act in respect of the orders sought at paragraph 2(a), 3(b) and 3(c) in her further initiating application.

7. That limited application was listed for hearing before me yesterday. At the commencement of the proceedings before me yesterday, Mr Fuller of counsel who appeared on behalf of the applicant, confirmed that this was an application pursuant to section 77 of the Act. Ms Teicher, counsel for the respondent, initially appeared to argue that the application before the Court was not one made under section 77 of the Act but, rather, an application for interim spousal maintenance orders. It was suggested by Ms Teicher that this submission was put on the basis that the further amended initiating application did not make reference to section 77 but rather, simply sought various interim orders.

8. Mr Fuller confirmed that an oral application was made when the matter was last before me for these discrete issues to be pursued on an urgent basis under section 77 of the Act. Ultimately, Ms Teicher conceded that that was the case but maintained that the respondent’s position was that the requirements for an order under section 77 were not made out. To the extent of any doubt, I am satisfied that the respondent was clearly on notice that the application before me was made pursuant to section 77 of the Act and on that basis, the proceedings were dealt with as an application under section 77.

9. I have gone into some detail on the nature of the present application before this Court as it is clear from the authorities that the Court’s approach to an application under section 77 for urgent spousal maintenance are determined by reference to different criteria to those which apply to an application for interim spousal maintenance orders. Section 77 of the Act relevantly provides:

   Where, in proceedings with respect to the maintenance of a party to a marriage, it appears to the Court that the party is in immediate need of financial assistance, but it is not practicable in the circumstances to determine immediately what order, if any, should be made, the Court may order the payment, pending the disposal of the proceedings, of such periodic sum or other sums as the court considers reasonable.

10. As aptly summarised in the decision of Sadlier & Sadlier [2015] FamCAFC 130 at [36], the Court said:

    Different criteria apply in applications for urgent, as opposed to interim, maintenance.  In a section 77 application, the primary judge is obligated to consider (a) whether there is an immediate need for financial assistance; (b) practicability of making an order in the circumstances, particularly where there is sufficient evidence to justify making an interim or final maintenance order; and (c) the period of the order, which should be for a relatively short duration.

11. At [37], the Court went on to say:

    Urgent maintenance orders are often referred to as stop-gap orders which are provided to assist with an immediate need of the spouse until a hearing can be set down for spousal maintenance orders pursuant to sections 72 and 74 of the Act.

12. Nygh J analysed the difference between urgent and interim maintenance orders in Ashton & Ashton (1982) 8 Fam LR 675:

    An application for interim maintenance is basically different from an application for urgent maintenance. An application under section 77 is heard at a time when all the evidence is not yet to hand. It may have to be made ex parte or may have to be made on such evidence as the husband is able to supply in the short period before the matter is set down for hearing. An application for interim maintenance is a creature whose exact nature has not been adequately defined but, as I understand it, differs only from an application for permanent maintenance in that the order which is sought is an order until further order… On an application for interim maintenance, the normal procedures relating to applications for maintenance under section 74 must be observed, and an application for maintenance can only be heard after each party has had the opportunity to adduce evidence, that is to say, the normal procedure for the filing of affidavits by both parties and the filing of financial statements must be observed.[1]

    [1] Ashton & Ashton (1982) 8 Fam LR 675 at [676].

13. Similar comments were made by the High Court in Hall & Hall [2016] HCA 23 where the majority, consisting of French CJ, Gageler, Keane and Nettle JJ said at [5]:

    A Court exercising the power conferred by section 74(1) is obliged by section 75(1) to take into account the matters referred to in section 75(2) and only those matters.  Those matters are presented as a comprehensive checklist.  They include what section 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 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.”

14. The majority went on to say at [7]:

    It was established at an early stage in the history of the
    Family Court that the power to make an interim order under section 74(1) is separate and distinct from the power to make an urgent order that is separately conferred by section 77.

15. At [8], the majority said:

    Unlike a Court exercising the power to make an urgent order conferred by section 77, a Court exercising the power to make an interim order under section 74(1) must be satisfied of the threshold requirement in section 72(1) and must have regard to any matter referred to in section 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 section 74(1) of the ordinary standard of proof in a civil proceeding now set out in section 140 of the Evidence Act 1995 (Cth). A Court determining an application for an interim order under section 74(1) cannot make such an order without finding, on the balance of probabilities on the evidence before it, that the threshold requirement in section 72(1) is met having regard to any relevant matter referred to in section 75(2).

16. In those circumstances, it is clear that the relevant factors in this case before the Court are those set out earlier; that is,

    a)whether there is an immediate need for financial assistance;

    b)the practicability of making an order in the circumstances; and

    c)the period of any such order. 

Immediate need

1. Turning then, to the order that the applicant seeks.  In essence, the applicant is seeking that the respondent pay to her:

   a)firstly, a periodic sum of $943 per week;

   b)secondly, within seven days, the sum of $4,500 for fees of the applicant’s periodontist, Mr C; and

   c)a further sum of $745 for proposed dental work by the applicant’s dentist, Mr D. 

2. I will deal with the two fixed sums, which I will refer to as lump sum payments, first, and then I will deal with the periodic payment issue. 

Lump sum payments

1. First of all, the Court needs to consider whether there is an immediate need.  It was said on behalf of the applicant that in relation to the dental work performed by Mr C, the applicant deposed to the fact that she received some dental work in April 2018, she has paid some but not all of the account for that work and that, as a result, she was unable to complete a course of treatment with Mr C. 

2. Moreover, the applicant deposed to the fact that Mr C has been pursuing her for payment of the balance of the account in the sum of $4,500 and that on 3 December 2018, she received a letter (which was annexed to one of her affidavits filed in these proceedings) from Mr C indicating that he would be forwarding her debt to his solicitor for collection and that she would be responsible for any additional costs incurred in recovering that debt. 

3. In relation to the further dental work to be performed by Dr D, the applicant deposed that she required urgent dental work following consultation with her dentist and a dental plan has been prepared to undertake that work which will result in that cost being incurred.  In both cases, the applicant has also deposed to the fact that she sought payment directly from the respondent’s attorney; that is, the litigation guardian in these proceedings, in respect of those amounts but such payment was refused. 

4. I note that in relation to the $4,500 figure, that request was not made until after the payment was incurred.  It was further said on behalf of the applicant that on the basis of her financial statement in which her expenses exceed her income, she is unable to meet these payments. Particularly in relation to the payment to Mr C, who has threatened litigation if the applicant does not pay, she will incur even greater expenses associated with the recovery of that outstanding amount.  This, it is said, establishes an immediate need. 

5. In response, it was said on behalf of the respondent that there was no urgency in this application and there was, in effect, no immediate need.  Ms Teicher for the respondent referred the Court to the decision of

   
   In the Marriage of Hayson

   (1987) 11 Fam LR 593 (“Hayson”) in which the Full Court of the Family Court considered an appeal against an order made by a single judge of that Court for urgent spousal maintenance. After referring to the distinction noted earlier between an application under section 77 and an application for interim spousal maintenance, the Court said that section 77:

   …relates to “relief of immediate needs”, “present pressing needs”, and the order is intended to be “in the nature of a stop-gap order” and is intended to “deal with urgent situations”.[2]

   [2] In the Marriage of Hayson (1987) 11 Fam LR 593 at [594].

6. The facts in Hayson were that, for a number of years post-separation, the husband had been voluntarily paying the wife the sum of $300 per week.  In about May 1986, the wife, without reference to the husband, took on a six month lease of a three-bedroom home at a weekly rent of $240.  The Court noted that:

   On any view, that is a substantial outlay for rent by a person living alone and dependent upon her former husband for her support.  She did not inform her former husband beforehand of her intention to take that accommodation or the reasons which apparently led her to do so.  Almost immediately after entering into the lease, the wife then instituted the present application, and that was the proceeding which ultimately came on for hearing before (the primary judge).[3]

   [3] In the Marriage of Hayson (1987) 11 Fam LR 593 at [594].

7. Against this background, the Court said:

   As the authorities to which we have previously referred demonstrate, section 77 is intended to have a narrow “stop-gap” application and is aimed at “the relief of immediate needs”. That was not the situation in which the wife was placed in May 1986. Her taking of this lease, particularly without any prior discussion with or warning to the husband, cannot properly be characterised as “immediate needs” so as to call into play the particular provisions contained in section 77.[4]

   [4] In the Marriage of Hayson (1987) 11 Fam LR 593 at [595]-[596].

8. The Court concluded in that case that an order under section 77 was not warranted. It is said on behalf of the respondent that the circumstances in the present case are similar to those that arose in Hayson insofar as the applicant incurring a significant expense without first discussing it with the respondent, and that having done so and merely presenting an account for payment does not of itself create an immediate need for the purposes of section 77. Moreover, it was said that there is no evidence from the periodontist as to why this procedure was required and why it was required at that time.

9. In reply on behalf of the applicant, it was submitted that Hayson is distinguishable from the present circumstances.  First of all, it was submitted that in this case, there has been no separation in a legal sense between the parties.  Rather, the respondent is currently living in a nursing home because of ill health.  This is to be contrasted to Hayson where the wife incurred the liability for the lease many years after separation.  Moreover, it is said that on the applicant’s evidence, untested as it is, both procedures were urgent.  The applicant gave evidence that she has exhausted her health insurance and was therefore unable to meet the costs of this procedure.

10. On balance, I am satisfied that Hayson is distinguishable from the present circumstances and I am satisfied that the issue of ‘immediate need’ has been made out in relation to the lump sums. 

Periodontist fees

1. In relation to the $4,500 for the periodontist fees, the fact is that those costs have been incurred in the context of a relationship which, on the applicant’s evidence, has not come to an end.  I will say something more about that shortly.  Moreover and more importantly, the applicant is now facing recovery proceedings in respect of this amount, and it appears on the basis of her financial statement that she is unable to meet this cost. 

2. I am therefore satisfied that in the circumstances there is an immediate need in relation to this payment.  I also accept the submission on behalf of the applicant that this case is distinguishable from Hayson in the sense that the wife has not incurred an ongoing liability and the costs incurred have been incurred in the context of an ongoing relationship, not many years after the relationship had come to an end. 

Dentist fees

1. In relation to the $745 dentist fees, the evidence before the Court, untested as it is at this stage, is that the applicant has an infection which requires some dental work.  The financial statement filed by the applicant also supports a finding that she is unable to meet the costs of this payment.  I am also satisfied therefore, that in the circumstances there is an immediate need in relation to the $745 sought. 

Are the parties separated?

1. Before turning to the second factor that needs to be considered, namely, the practicability of making an order and the period of any such order, I will just deal briefly with the question of whether or not the parties were separated. 

1. This arose as a factual dispute between the litigation guardian and the applicant.  The litigation guardian essentially maintains that the parties have, in fact, separated, whereas this is disputed by the applicant.  Counsel for the applicant referred to In the Marriage of Lane [1976] FLC 90-055 as authority for the proposition that in determining whether parties have separated, consideration must be given to three factors; namely, an intention to separate, acting on that intention and communication of that intention.

2. The applicant’s evidence is that she and the respondent have not separated; whereas, the litigation guardian maintains that the applicant and the respondent separated in 2013 when the applicant ceased living in the former matrimonial home.  Clearly, it is not possible for this Court in an application of this kind to determine this factual issue.  It was suggested by Ms Teicher that the question of the status of the parties’ relationship was determined by VCAT and therefore that gave rise to an issue estoppel argument. 

3. In support of this submission, reference was made to paragraphs 3 to 5 of the VCAT decision, which is annexed to the litigation guardian’s affidavit.  I am not satisfied that a fair reading of those paragraphs leads to the conclusion that the Tribunal made any finding as to the status of the relationship between the applicant and the respondent. 

4. All that those paragraphs do is recite the facts; namely:

   a)that the applicant lived in the former matrimonial home until June 2013 when she was admitted to hospital with pneumonia;

   b)on being discharged, the applicant travelled to Country M for a period of rehabilitation at the respondent’s suggestion;

   c)the respondent met the costs of that treatment and travel; and

   d)finally, when the applicant returned to Melbourne, she lived with her mother and her children because she said that the former matrimonial home was damp and mouldy. 

5. This commentary is consistent with the evidence given by the applicant in her own affidavit material.  I am not satisfied that any issue estoppel argument arises in this instance.  Whilst this evidence goes to where the applicant lived at various times between 2013 and 2014, it does not address the question of whether the parties have legally separated.  Moreover and perhaps more tellingly, the affidavit filed by the litigation guardian does not make any reference to any expressed intention by her father that he and the applicant had separated or that he wanted to separate or that he had communicated any such desire to the applicant. 

6. I refer specifically to paragraphs 8 and 9 of the respondent’s affidavit filed 17 December 2018.  I do not set those paragraphs out in detail but have had regard to them.  On the basis of the evidence before the Court and noting that at this stage none of that evidence has been tested, I am not satisfied that there is a proper basis to assert that the parties have separated.  Nor am I satisfied that there are any findings in the VCAT decision which are inconsistent with my finding.  I then turn to the practicality of making an order in the terms sought and the period of any such order.

Practicality of making an order and the period of any such order

1. On the basis of the financial statement filed by the litigation guardian, it is evident that an order for the payment of urgent spousal maintenance to cover the dental costs incurred and to be incurred by the applicant can be met from the savings held in the respondent’s bank account.  I also note that there is a small excess between the respondent’s income and the respondent’s expenses.  It was submitted that much of the money which is currently in the respondent’s bank account is already earmarked to meet the respondent’s expenses, including his tax payments and his legal expenses.

2. I am not satisfied that even if some of those funds were used to meet the respondent’s expenses, that there would be insufficient funds to meet these relatively minor costs in the overall scheme of things.  As these orders relate to lump sum payments, there is no need to consider the time of any proposed period of any such order.  I now turn to the claim for weekly payments.

Weekly payments

1. In relation to weekly payments sought, the applicant asserts in her affidavit material that she is 64 years of age, not currently working and has a number of health concerns which limit her ability to work.  No medical evidence has been filed in relation to any physical limitations on her ability to work.  The applicant further says that her income is derived from:

   a)Centrelink payments of approximately $300 per week;

   b)payments from the litigation guardian in the sum of $20,000 per annum, which equates to $384 per week;

   c)$40 per week from her son, and which she says contributes to the cost of utilities; and

   d)a Country M pension of $35 per week. 

2. That is a total of $759 per week.  In addition, the litigation guardian continues to meet the costs of the applicant and the respondent’s health insurance.  The applicant also makes reference in her financial statement to ongoing financial gifts from her daughter of $100 per week.  The applicant deposed that her total expenditure is $943, and therefore even including the gifts from her daughter, there is a shortfall. 

3. It was submitted on behalf of the applicant that in considering the ‘immediate need’ component of this part of the application, the Court ought not have regard to Centrelink payments received by the applicant, nor the $384 per week which the applicant receives from the respondent, on the basis that it was not an expectation that those payments would continue.  In response, the respondent submitted that there was no evidence of ‘immediate need’ in relation to the claim for weekly spousal maintenance. 

4. Counsel for the respondent questioned a number of the items in the applicant’s financial statement and submitted that the expense items were excessive.  Counsel for the respondent also queried:

   a)why the applicant does not charge her son commercial rent for the use of the former matrimonial home as this would add to her financial resources;

   b)whether the applicant could, in fact, work; and

   c)whether she, in fact, had been working as a tradesperson as this was work that she had previously undertaken. 

5. The applicant said that all of these matters were not relevant to section 77 applications but, rather, could ultimately be considered in an application for interim spousal maintenance under section 74 of the Act. Counsel for the respondent referred to a decision of Gyopar and Gyopar (1986) FLC 91-769 in which, in essence, the Court said that a claim under section 77 must be read subject to the requirements of section 72. In this instance, it is argued that the applicant can only be relying upon section 72(1)(b) of the Act; namely, that she is unable to adequately support herself because of her age or physical or mental incapacity for appropriate gainful employment.

6. It was put on behalf of the respondent that there is insufficient evidence as to whether the applicant can be gainfully employed. In response, the applicant says that, given her age, it would on that basis alone be difficult for her to obtain employment. As noted above, orders under section 77 are in the nature of urgent orders and generally are of a ‘stop-gap’ nature. They are intended to meet immediate needs of an applicant in circumstances where the Court feels that it is not appropriate to deal with the merits of the claim in the usual way.

7. Whilst it is the case that in considering an application under section 74, the Court shall disregard any entitlement of the party whose maintenance is under consideration to an income-tested pension, allowance or benefit, there is no similar restraint which applies to an application under section 77. Therefore, I do not accept the submission put on behalf of the applicant that in considering the immediate needs argument, the Court ought not have regard to the fact that the applicant receives payments from Centrelink at present.

8. The present facts are that the applicant receives, on her evidence, approximately $860 per week from a range of sources.  She also gives evidence, as previously mentioned, that her weekly expenses are $943.  The weekly expenses contained in that amount include $13 for superannuation, which her counsel conceded was an error and ought not have been included, and also a further amount of $82 for rent which relates to the applicant’s housing commission accommodation. 

9. Leaving aside any other items in the applicant’s financial statement, it is not clear why the rent is included, given that the applicant says that she is currently living in the former matrimonial home. If the $13 superannuation amount and the $82 for rent are excluded from the applicant’s expense items, she currently receives sufficient funds to meet her expenses. In those circumstances, the applicant has not established that she has an immediate need to justify an urgent section 77 order for the weekly amount claimed at this stage.

10. Rather, it is appropriate that the applicant’s claim for weekly spousal maintenance be dealt with at an interim defended hearing after evidence is filed and considered. In this regard, I note that there are a number of matters raised in the litigation guardian’s affidavit which was only filed on 17 December 2018 to which the applicant will need to respond. Whilst I accept that those matters are not necessarily relevant to a section 77 application, they will ultimately be relevant to an application under section 74 of the Act.

I certify that the preceding fifty-two (52) paragraphs are a true copy of the reasons for judgment of Judge Mercuri

Date:     19 December 2018